Ichiro Hikage
President

We would like to express our heartfelt appreciation for your long-standing, valued support to Achilles Corporation. We are pleased to deliver a report on the Achilles Group’s financial results for the 104th term to you.

During the consolidated fiscal year under review, the Japanese economy showed signs of recovery as the effects of COVID-19 abated, but the future remains uncertain due to rising raw material prices and energy costs caused by the prolonged Ukrainian conflict as well as global inflation.

In this business environment, the Achilles Group focused on developing products and brands that appealed to customer expectations in order to enhance its corporate value. Specifically, we focused on priority areas such as environmentally friendly products, lifestyle-related items, energy-efficient products, disaster risk reduction, and infrastructure development, as well as advancing business for globalization. At the same time, we continued working to control costs, conserve energy, and reduce waste.

As a result, during the consolidated fiscal year under review, net sales, including price revisions, were 78,607 million yen (down 5.2% year-on-year). Despite our efforts to improve productivity and reduce expenses in response to the impact of rising raw material prices and energy costs as well as rising purchasing costs due to the weak yen, we posted an operating loss of 958 million yen (compared to an operating loss of 713 million yen for the previous fiscal year). Although we recognized foreign exchange gains and equity method investment gains/losses, we reported an ordinary loss of 171 million yen (compared to an ordinary loss of 117 million yen for the previous fiscal year). Loss attributable to owners of parent was 8,210 million yen (In the previous year, loss attributable to owners of pared was 1,204 million yen) because we reported impairment loss for vehicle materials, urethane, and thermal insulators and broke into deferred tax assets.

In the future, in order to respond to major changes in production and consumption in Japan and abroad and achieve sustainable growth, we aim to become a company that creates comfortable living spaces that are friendly to both people and the environment by fully leveraging the Achilles Group’s technologies and managerial resources for active and efficient business development, thereby continuing to create new value for our company, society, and the future.

We posted net loss for the current consolidated fiscal year as the result of reporting operating loss and impairment loss for fixed assets and breaking into deferred tax assets. This is because we reported impairment loss and broke into deferred tax assets as we determined, although each of the asset groups—vehicle materials, urethane, and thermal insulators—made every effort for price revisions, it was difficult to recover profitability in the short run as it was expected to decline due to factors such as changes in the market environment and raw material and energy costs that remained high.

Under these circumstances, in an effort to improve declining profitability, an urgent issue to be addressed in the current business performance, we will work even more energetically to achieve further productivity growth (cost reductions) in the Group and strive to revise the prices of certain products. Furthermore, by raising the rate of value added in existing businesses, achieving greater operational efficiency, and promoting efforts to create new businesses, we will endeavor to transform the business structure so that it generates profits and improves profitability at an early stage.

Your continued support would be highly appreciated.

June 2024