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. As the 87th fiscal year for TPR has ended, I would like to summarize our financial report.
Revenue and profits were decreased due to the severe environment; however, we made strategic investments for the future growth.
Over the past year, both personal consumption and capital investment were decreased in Japan affected by the natural disasters and the consumption tax increase. China's economy remained sluggish due to the US-China trade dispute, also in India and South-East Asia, their economy slowed down. Towards the end of last year, an American economic downturn happened as well. Moreover, from the beginning of this year, the business environment has been affected by the restriction of social and economic activities due to the pandemic outbreak of COVID-19.
Paying attention to the automotive industry, the number of sales in China had been less than the previous year for the second consecutive year. Also in Japan, US, India, and South-East Asia, the number of sales decreases year-over-year.
Under these circumstances, in FY2019, the 87th fiscal year for TPR, we achieved 178.5 billion yen in sales, which is a7.3% decrease year-over-year due to slow-downs in two prominent markets, China and North America. We have worked to continue cutting costs and reduce expenditures, but we could not cover the decline in operating rate due to the decrease in sales, and rising expenses associated with establishing mass production for new technologies. As a result, we experienced a slight year-over-year decline in profit categories, with operating profit at 13.9 billion yen (24% decrease) , ordinary profit at 16.4 billion yen (24.6% decrease) , and net profit attributable to parent company shareholders amounted to 7.3 billion yen (36.4% decrease). On the other hand, we made strategic investments for innovative rationalization of production for the future growth, and research and development strengthening competitiveness.
Even under such severe circumstances, thanks to you we welcomed our 80th anniversary in December of last year. As such, the year-end dividend of 30 yen per share (including 2 yen in commemoration of our anniversary) together with the interim dividend of 30 yen already paid out (including 2 yen in it,) brings the annual dividend to 60 yen per share. This figure is meant to express our gratitude for our shareholders' support over these many decades.
To overcome this severe business environment, we will strive to execute our "23 Mid-term Management Plan."
The automobile industry in an era of change seen only once per century now faces serious situations, such as the fragmentation in international society and the deterioration of real economy by the US-China trade dispute and the spread of COVID-19.
Resetting the sustainable growth level to fit the changes of these precondition since we formulated ex mid-term management plan, we have launched new one, "23 Mid-term Management Plan," for the 4years starting from April, 2020.In this new mid-term management plan, in addition to the four pillars listed in the previous med-term management plan, we aim to be inclusive, ecological, game-changing, and sustain growth to the realize a clean, high-quality global society as stated in our management philosophy.
In the initial year 2020 in an effort to minimize the effect of COVID-19, we are promoting work style reforms, like teleworking and staggered working hours. Also, we have taken measures such as operational adjustments, reduction of executive compensations, expense reduction, sufficiently increasing the short-term liquidity, and strategic capital investments.
We humbly ask for the continued patronage of all of our shareholders.
June 26, 2020
Hiroshi Suehiro, Chairman & CEO