News

Sumitomo Rubber Industries, Ltd. (the “Company”) today announces that it completed the share transfer of a subsidiary on January 31, 2024. Prior to this, in December 2023, the Company concluded an agreement to assign all shares it holds in Lonstroff AG (“LAG”), its subsidiary for the manufacture and sale of rubber parts for medical applications headquartered in Switzerland to NCM Investments VII B.V., a subsidiary of private equity fund Nimbus Investment Fund V Coöperatief U.A. operated by Nimbus, an investment fund company headquartered in the Netherlands (the “Share Transfer”).

As a result of the Share Transfer, LAG and Lonstroff Medical Elastomers d.o.o (“LSI”), which is a 100%-owned subsidiary of LAG and engages in the manufacture of rubber parts for medical applications in Slovenia, have been excluded from the Company’s scope of consolidation.

In association with the Share Transfer, the Company will include a restructuring cost of 11.7 billion yen in the other expenses in the consolidated financial results for the fiscal year ended December 31, 2023, but there is no change to the consolidated financial results forecast for the fiscal year ended December 31, 2023 due to the Share Transfer.

1. Background/purpose

The Sumitomo Rubber Group globally expanded the business of rubber parts for medical applications through the acquisition of LAG, a manufacturer/seller of rubber parts for medical applications in Switzerland, in 2015 and the establishment of LSI as a new production base in Slovenia in 2017. Although the Company had strived to improve productivity and product quality in Japan and Europe in a unified way, it decided to transfer the shares to the new shareholder as it concluded that it would be difficult to improve, in a short term, profitability that declined due to a delayed improvement in productivity under the influence of COVID-19 as well as a surge in raw material costs that followed. The Company believes that further business growth will be achieved under the new shareholder. In its New Mid-Term Plan, the Company positions the period until 2025 as the period for “Selection & Concentration of Existing Lines of Business.” The Company will continue to promote the concentration and utilization of resources in growth business to achieve the future development of the Group.

2. Overview of the subsidiary

(1) Company name	Lonstroff AG
(2) Address	Aargau, the Swiss Confederation
(3) Representative (resigned)	Maurice Hasani
(4) Established	1908
(5) Business description	Manufacture and sale of rubber parts for medical applications and rubber parts for industrial applications
(6) Capital	CHF 13million
(7) Major shareholder and shareholding ratio	Sumitomo Rubber Industries, Ltd.: 100%
(8) Relationships between the Company and Lonstroff AG	Capital relationship	The Company owns 100% shares in Lonstroff AG.
	Personnel relationship	The Company dispatches officers to Lonstroff AG.
	Business relationship	The Company lends money.

(9) Business performance and financial condition of Lonstroff AG for the most recent three years 　　(In thousands of Swiss francs)
Settlement term	Fiscal year ended December 31, 2020	Fiscal year ended December 31, 2021	Fiscal year ended December 31, 2022
Total equity	13,099	9,844	(1,640)
Total assets	96,999	96,681	101,663
Sales revenue	37,822	40,428	46,472
Business profit	(386)	(2,850)	(11,630)
Settlement term Current net profits	(1,539)	(2,821)	(11,705)

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Overview of LSI

Company name	Lonstroff Medical Elastomers d.o.o
Address	Logatec, the Republic of Slovenia
Representative (resigned)	Maurice Hasani
Established	2017
Start of production	2019
Business description	Manufacture of rubber parts for medical applications
Capital	EUR 1 million (Lonstroff AG: 100%)