Acquisition of a New Business Platform through the Acquisition of Ainax Inamoto HD

「Ainax is a joint venture under joint control with JENSEN-GROUP NV, in which the Company and JENSEN-GROUP NV hold 51% and 49%, respectively.」

「As アイナックス became an equity-method affiliate, the Company reviewed its management classifications from the second quarter of the consolidated fiscal year and integrated Domestic Laundry into Domestic Equipment Sales.」

「Through this in-kind contribution, the Company contributed 49% of the shares in Ainax. As a result, the Company and JENSEN-GROUP each held 51% and 49%, respectively, of Ainax, and Ainax changed from a consolidated subsidiary of the Company to an equity-method affiliate.」

「The domestic laundry business saw higher revenue due to the impact of the accounting treatment of newly consolidated companies and a recovery in demand for the replacement of aging equipment for purposes including labor saving and energy conservation. As a result, revenue from this business was ¥10,209 million, up 12.2% from ¥9,101 million in the same period of the previous year. Segment profit was ¥122 million, down 36.0% from ¥191 million in the same period of the previous year due to higher selling expenses.」

「The domestic laundry business saw a recovery in demand for the replacement of aging equipment for purposes including labor saving and energy conservation, as well as an impact from the accounting treatment of newly consolidated companies. However, revenue declined in the current fiscal year because the previous fiscal year included revenue from large-scale projects and production was affected by delays in parts deliveries. As a result, revenue from this business was ¥6,396 million, down 2.4% from ¥6,553 million in the same period of the previous year. Reflecting the decline in revenue and an increase in selling expenses, the segment loss was ¥32 million, compared with segment profit of ¥229 million in the same period of the previous year.」

「The domestic laundry business saw higher revenue due to the impact of newly consolidated companies and a recovery in demand for the replacement of aging equipment for purposes including productivity improvement, labor saving and energy conservation in preparation for the post-COVID-19 period. As a result, revenue from this business was ¥2,905 million, up 19.7% from ¥2,427 million in the same period of the previous year. Despite the increase in revenue, the segment loss was ¥43 million, compared with a segment loss of ¥110 million in the same period of the previous year, due to amortization of intangible assets.」

「The domestic laundry business continued to face weaker customer appetite for capital investment due to lower demand for linen supply and laundry services at hotels, hospitals and other facilities amid the COVID-19 pandemic. However, demand for the replacement of aging equipment whose renewal had been postponed is showing signs of a gradual recovery, for purposes including productivity improvement and energy conservation in preparation for the post-COVID-19 period. As a result, revenue from this business was ¥9,101 million, down 1.3% from ¥9,217 million in the same period of the previous year. Segment profit was ¥191 million, up 9.1% from ¥175 million in the same period of the previous year.」

「The domestic laundry business continued to face weaker customer appetite for capital investment due to lower demand for linen supply and laundry services at hotels, hospitals and other facilities amid the COVID-19 pandemic. Under these conditions, revenue increased in the second quarter for the business, partly because it received orders for large-scale projects, although competition is expected to intensify further. As a result, revenue from this business was ¥6,553 million, up 11.8% from ¥5,860 million in the same period of the previous year. Segment profit was ¥229 million, an increase of ¥217 million from ¥12 million in the same period of the previous year.」

「The domestic laundry business remained sluggish as customers’ appetite for capital investment continued to weaken due to lower demand for linen supply and laundry services at hotels, hospitals and other facilities amid the COVID-19 pandemic. As a result, revenue from this business was ¥2,427 million, down 18.8% from ¥2,988 million in the same period of the previous year. In addition, the segment loss was ¥110 million, compared with a segment loss of ¥78 million in the same period of the previous year, due to the decline in revenue.」

「The domestic laundry business saw a decline in sales as customers’ appetite for capital investment weakened significantly due to lower demand for linen supply and laundry services at hotels, hospitals and other facilities amid the COVID-19 pandemic. As a result, revenue from this business was ¥12,583 million, down 33.9% from ¥19,040 million in the previous fiscal year.」

「In the domestic laundry business, needs for labor saving and automation aimed at improving the operating efficiency of equipment overall remained firm amid labor shortages and rising costs such as labor and logistics. However, the business performed poorly as large-scale investment declined partly because demand from the recent increase in visitors to Japan had stabilized. As a result, revenue from the business was ¥19,040 million, down 4.8% from ¥20,005 million in the previous fiscal year.」

「In the domestic laundry business, large-scale investment in new factories and equipment replacements remained active, driven by inbound demand and rising needs for labor saving and automation, as in the previous fiscal year. Sales of the core continuous batch washing machines remained firm. As a result, revenue from the business was ¥14,355 million, while segment profit was ¥975 million due to expenses related to the business combination and amortization of intangible assets.」

「In the domestic laundry business, large-scale investment in new factories and equipment replacements remained active, driven by inbound demand and rising needs for labor saving and automation, as in the previous fiscal year. Sales of the core continuous batch washing machines remained firm. As a result, revenue from the business was ¥10,446 million, while segment profit, including amortization of intangible assets, was ¥840 million.」

「Effective 1 April 2018, the company carried out an absorption-type merger in which Ainax Inamoto Co., Ltd. was the surviving company and Ainax Inamoto Holdings Co., Ltd., a specified subsidiary, was the absorbed company.」

「From the acquisition date onward, the combined amounts of revenue and quarterly profit arising from this business combination were ¥8,273 million and ¥149 million, respectively.」

「From the acquisition date onward, the combined amounts of revenue and quarterly profit arising from this business combination were ¥4,136 million and ¥366 million, respectively.」

「Effective 3 July 2017, MLE Co., Ltd., a subsidiary of the company, acquired all shares of Ainax Inamoto Holdings Co., Ltd.」

「Through this transaction, the company will enter, through Ainax Inamoto HD, a business area holding the leading share of the domestic market and acquire a new business platform. In addition to expanding its lineup of commercial products, the company will continue providing customers with comprehensive solutions for entire factories. It will also seek to expand the market share of products handled by Ainax Inamoto HD by leveraging its domestic and overseas sales networks.」