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To Our Shareholders and Investors [November 2020/June 2020]

We sincerely appreciate your continuing support and encouragement.
First, we would like to offer our deepest condolences and sympathies to all those affected by COVID-19, and furthermore wish to express our heartfelt gratitude to those persistently working to get society and the economy back on track. As the first half of the 88th fiscal year for TPR has ended, I would like to summarize our financial report.

Revenue and profits decreased amid a severe business environment due to COVID-19.

Over the first half of the fiscal year, the business environment was affected by restrictions imposed on movement and corporate activity due to proliferation of the COVID-19 pandemic, which exerted significant downward pressure on the global economy including that of Japan.

In the automotive industry, we encountered challenging circumstances as ramifications of COVID-19 materialized. The number of automobile sales consequently decreased substantially year over year in Japan, and overseas they showed signs of recovery in the Chinese market yet decreased substantially year over year in other countries and regions.

Under these circumstances, for the first half of the fiscal year, we incurred significant decreases in revenue and profits relative to the same period of the previous fiscal year. Accordingly, net sales decreased by 29.4% year over year to 63.1 billion yen, and a lower operating rate associated with the downturn in net sales caused the decrease in profits, with operating profit at 0.3 billion yen (94.4% decrease), ordinary profit at 2.4 billion yen (67.5% decrease), and net profit attributable to parent company shareholders amounting to 0.9 billion yen (81.6% decrease). Nevertheless, we maintained positive results at each profit level as a result of managerial efforts that involved engaging in cost-cutting initiatives, promoting rationalization, and thoroughly reducing selling, general and administrative expenses.

As for our interim dividend, we seek to reduce the amount to 21 yen per share, which is 7 yen lower than in the previous fiscal year (excluding the amount of 2 yen paid to commemorate our anniversary in the previous fiscal year), upon having accounted for factors such as our business performance during the fiscal year, uncertainties ahead, and shareholder expectations.

We will hasten implementation of the “23 Mid-term Management Plan” as we address the ever-changing business environment.

We must remain vigilant amid mounting concerns regarding possible resurgence of the COVID-19 pandemic. As such, TPR is making arrangements for teleworking, staggered working hours and other such workstyle reforms, and is also accurately managing production, as it persists with efforts for preventing infection of COVID-19 and ensuring operational stability. We will also enlist the entire company in efforts to improve our business performance, which will entail persisting with strategic investment as we focus on further cutting costs and reducing expenditures.

The automotive industry stands poised to undergo major transformation, particularly with respect to connected, autonomous, shared, and electric (CASE) mobility in the midst of a worldwide trend of changing behaviors and increasing environmental awareness going forward. Amid such circumstances, TPR will take firm action in meeting customer needs as it addresses various risk factors, which involves steadily implementing the management policies stated in the “23 Mid-term Management Plan” which we embarked on in April 2020. Such efforts will contribute to realization of a clean, high-quality global society as stated in our management philosophy, underpinned by our aims of achieving inclusive, ecological, game-changing, and sustainable growth.

We humbly ask for the continued patronage of all of our shareholders.

November 12, 2020
Hiroshi Suehiro, Chairman & CEO