- In fiscal 2009, ended March 31, 2009, operating conditions became challenging due to a combination
of unexpected factors, which included lower demand for winter-related products
due to unexpected weather and spending cutbacks by households on top of higher gasoline
prices and the economic recession.
- In response, we have done our utmost on all fronts to create business opportunities to sell
automotive goods and services. These efforts included increasing our lineup of low-priced private
brand tires, swiftly adapting sales outlets to meet changes in car navigation systems
demand trends, and reinforcing sales of electronic toll collection (ETC) devices in anticipation
of a fall in expressway tolls. To make the most of the synergies between sales of automotive
goods and our statutory safety inspections and maintenance service business, we ran television
advertisements to raise our profile, and also through telemarketing, we strongly
promoted sales by targeting members of our point-up card membership program. As a result,
we recorded a 15.5% year-on-year increase in the number of statutory safety inspections and
maintenance services performed by our domestic chains, including franchise stores. However,
unable to make up for the decline in sales stemming from the abrupt change in external conditions,
consolidated net sales declined 2.7% year-on-year, to ¥259.1 billion.
- Operating income fell 26.6%, to ¥5.1 billion. This decline stemmed from a fall in the gross
profit margin of tires and wheels, expenses incurred through increasing the number of
stores in Japan and overseas, point-of-sale (POS) system-related expenses, and higher selling,
general, and administrative expenses incurred as a result of advertising and other
related costs. On the positive side, we recorded an increase in net sales from statutory safety
inspections and maintenance services.
- We posted a net loss of ¥3.4 billion due to losses incurred in association with our withdrawal
from unprofitable businesses and assets in accordance with the goals of the
mid-term business plan. Main factors were ¥4.9 billion in restructuring expenses associated
with our withdrawal from our U.S. business, as well as ¥5.2 billion in impairment losses on
fixed assets and ¥3.9 billion on losses on the revaluation and sales of investment securities.
- Although we recorded declines in both revenue and earnings and posted a substantial net
loss, we believe we have now set the course for improved profitability in the coming years.
- In fiscal 2010, we forecast an 11.5% decline in consolidated net sales, to ¥229.3 billion. This
outlook is based on a decrease in revenue as we reorganize our business under the midterm
business plan, as well as from consumers holding back on purchasing discretionary
and luxury items in the face of the uncertain economic outlook. Despite declining sales of
new vehicles, however, we expect to see growing demand for statutory safety inspections and
maintenance services, a business on which we are concentrating considerable resources. In
addition, we anticipate that reduced expressway tolls and the lower gas prices than last year
will stimulate vehicle use. Consequently, we will concentrate to enhance profitability by reinforcing
sales from statutory safety inspections and maintenance services and sales of
maintenance-related goods with high profit margins, such as tires, oil, and batteries. As a
result of these measures, coupled with the effects of business consolidation and elimination
undertaken in the previous year, we forecast a 76.8% year-on-year increase in operating
income, to ¥9.0 billion. We also believe we will turn around the net loss recorded in fiscal
2009 to net income of ¥5.7 billion in fiscal 2010.
- With respect to the payment of dividends, in line with the Company’s target of a dividendon-
equity (DOE) ratio of 3% under the mid-term business plan, we announced an annual
dividend of ¥100 per share for fiscal 2009, the same as for fiscal 2008. We also reported a
DOE ratio of 2.4%. As well as canceling 1.8 million of our own shares in May 2009, we plan to
buy back 1.6 million more shares at a maximum purchase amount of ¥5.6 billion by the end
of July 2009.
- In accordance with AUTOBACS BIG Plan, our mid-term business plan launched in May 2008,
we have almost completed our withdrawal from unprofitable businesses and reorganized
the Group’s subsidiaries. At present, we are making steady progress toward achieving the
plan’s targets by reinforcing our domestic franchise chain business underpinned by our slogan
“Anything about cars, you find at AUTOBACS” There is no doubt that we can expect
ongoing uncertainty surrounding the business climate. Nonetheless, we will strive for profit
growth by turning valuable opportunities into reality while concentrating on our three core
businesses of automotive goods and services sales, statutory safety inspections and maintenance
services, and car sales and purchases.
- We thank shareholders and all other investors for ongoing support and understanding as
we embrace the challenges of the future.
- June 2009
- Setsuo Wakuda
Representative Director
and Chief Executive Officer
