On May 11, 2024, Tamura Corporation reached the 100th anniversary of its founding. A year before the official launch of radio broadcasts, our Company, an early entrant in the manufacturing and sales of receivers, became a manufacturer specializing in transformers and other magnetic components. Subsequently, as Japan's electronics industry developed, we expanded our business domains to create our Electronic Components business, Electronic Chemicals/FA Systems business, and Information Equipment business. During that time, we surmounted war and other changes in the global situation, unpredictable economic upheavals at home and abroad, and other harsh business conditions to continue advancing our corporate activities to the present. This has been made possible through many years of support from our business partners, shareholders, and other stakeholders, as well as through the untiring efforts of our predecessors and employees. I want to express my heartfelt gratitude to all of these people.

However, this 100th anniversary is but a single milestone along the Company's history. I have taken up the baton passed down by three generations of presidents before me, making me the fourth-generation president and the first to come from outside our founder's family. I believe that I have been entrusted with a goal of growing the Company with the next 100 years in sight. Those of us here now, including our employees, are reaffirming our commitment to take up that goal and to work as one toward even greater advancement in the future.

In FY2023, the second year of our 13th Medium-term Management Plan, a sense of uncertainty continued amid growing geopolitical risks and the Company was affected by economic stagnation in China and Europe. From the summer in particular, markets in China slowed significantly and a significant temporary decline in business performance was forecast for our Group.

In actuality, however, we were able to avoid the major decline in business performance that had been a concern. This was made possible by firmness in the North American market, market penetration of the selling price revisions we had implemented from FY2022 through market price-linking in electronic components and electronic chemicals as a measure to combat rising prices of materials and exchange rate fluctuations, and the recording of exchange rate gains during the fiscal year in contrast to exchange rate losses in the previous fiscal year, with the depreciation of the yen further adding a tailwind.

Looking at business performance by segment, the Electronic Components business was significantly impacted by the slowdown in the Chinese market from summer onward, but remained solid overall due to significant increases in sales of LED products and automotive boosting reactors as semiconductor shortages eased. Looking at the Electronic Chemicals/FA Systems business, in the FA Systems business, capital investment has been constrained and demand dropped sharply in China as well as in Japan from around October. Overall, however, including in the Electronic Chemicals business, due to depreciation of the yen the decrease in sales was not significant. Our NTX Series entered the market in FY2023. A next-generation audio mixing console that supports IP-based broadcasting systems, it has won large orders associated with the rebuilding of broadcasting stations and equipment upgrades, leading significantly increased sales and profit in the Information Equipment business.

As a result, our Group's consolidated sales in FY2023 decreased slightly to 106.622 billion yen (down 1.3% year-on-year). Operating profit increased to 4.94 billion yen (up 2.3% year-on-year), ordinary profit was 4.956 billion yen (up 14.5% year-on-year), and profit attributable to owners of parent was 2.24 billion yen (up 9.4% year-on-year), all increasing from the previous year.

Looking at the business results forecast for FY2024, the final year of the 13th Medium-term Management Plan, we expect growth in sales and profit particularly in the second half amid recovery in the electronics market, with sales of 112 billion yen, operating profit of 5.2 billion yen, and net income of 3.4 billion yen.

During formulation of the Medium-term Management Plan, we set operating profit targets of at least 5 billion yen (FY2023) and 6 billion yen (FY2024). We revised the target downward from the second year onward, taking into account the worsening business environment, including inventory adjustment by major customers and stagnation of demand in the Chinese market. However, results in FY2023 exceeded the revised target. The market environment remains on a recovery trend. I believe that it will be difficult to reach our original target of 6 billion yen in FY2024, but I hope for us to make every effort to enhance our business performance in this memorable 100th anniversary year and produce results that exceed our expected 5.2 billion yen for the fiscal year.

In June 2023, at the same time that we transitioned to the structure of a company with an Audit & Supervisory Committee, we introduced a new CXO structure and installed a CEO, CFO, and CTO. In June 2024, we further appointed a CSO, CHRO, and CLO*.

Until then, our Company's top management, who specialize in single fields such as the Electronic Components business and the Electronic Chemicals/FA Systems business, have held responsibility for business divisions, with the President and Chairman from the founder's family bundling vertical lines of authority. However, with my appointment as a president from outside the founder's family, we have taken this opportunity to advance our "One Tamura" strategy that more powerfully makes the entire company visible to not only the President but also to management overall through horizontal lines of control.

We introduced the CXO system, centered on executive officers, in order to further strengthen and develop this strategy and to adapt to the drastic changes of the times through team-based corporate management. By bringing together the wisdom of experts in their fields, we aim to enhance the capabilities of every individual and to transition to a new generation of management. Toward that end, in July we also revised our officer structure to clarify the human resources profiles sought for our management. By ensuring transparency in the promotion of talent, we will work to hand over management duties to the next generation.

The speed of change in the world continues to accelerate. In order for our Company to survive, the people who will work here for the next 20 or 30 years must, as early as possible, come to view the Company as a matter of personal responsibility. I expect our new CSO to draw on his experience in Electronic Chemicals business and Electronic Components business sales to draft and implement strategies aimed at formulating the next Medium-term Management Plan.

We also face demands for more apt approaches to management strategy, personnel-related matters, sustainability, and various laws and regulations, as matters of our corporate social responsibility. By appointing a CHRO and CLO, we will also strengthen the functions of the Head Office and enhance its structure.

At the same time, in terms of research and development, the effects of horizontal lines of control are already becoming apparent. We are currently tackling the development of magnetic passive components for next-generation semiconductors, a task that is difficult to realize through knowledge of electronic chemistry and electronic components alone. With the CTO taking an overall view, we are fusing the materials capabilities and know-how of the Electronic Chemicals business with the knowledge and the design/development approaches that the Electronic Components business has built up over the years, to advance the development of new electronic components capable of accommodating and resisting high voltages.

In our sustainability strategy, we have set and are tackling KPIs and goals based on our eight materialities. Looking at our situation in FY2023, although we are behind in meeting our final FY2024 targets for "Product quality improvement" and for ratio of non-Japanese managers within "Fulfilling workplace," we are making steady progress toward achieving targets for the other six items.

We have now begun to review the materialities that we have updated to the next stage while incorporating the opinions of various people, as we prepare for the next Medium-term Management Plan.

Ever since I assumed the office of President, I have undertaken formulation of business strategy, work reform, and work fulfillment reform as tripartite reforms. I have put forth a policy of focusing on the promotion of DX as the core of these initiatives. The upgrading of our core systems for accounting, a tool for work reform, has already been completed. The introduction of core systems for business is now under study as we closely investigate cost-effectiveness and other factors.

At the same time, I have personally taken the lead in tackling work fulfillment reform. Rather than "workstyle reform" that seeks simple comfort in work, I want employees to have work fulfillment, finding work enjoyable and feeling happy when coming to the Company. Toward that end, I have focused on creating a climate for working with peace of mind, through means including instilling psychological safety that allows the expression of opinions regardless of hierarchy. We are also conducting employee engagement surveys, including at overseas bases, to identify the results of our measures and to take the next actions.

Individual values concerning work will only become more diverse from here on out, and the work fulfillment sought by every person will change as well. I will continue doing all I can to build a company where employees trade opinions and where as many employees as possible identify with the Company and feel work satisfaction.

We are now making preparations to formulate the 14th Medium-Term Management Plan, with our new CSO taking the lead. We are beginning the task more than half a year earlier than usual. This is because of the need to set targets that take into account varied perspectives, including how we should meet the expectations of stakeholders and our social responsibilities as a company listed on Japan's Prime Market, and the need to take time in formulating the plan, incorporating development and other policies that look ahead to our next 100 years with an awareness of generational changes.

As an overview of our policy at present, we will study the reorganization and review of our production structure in China while we advance expansion strategies in Europe and the U.S. In line with the expansion of the U.S. data center market in particular, demand for our large transformers and reactors used in uninterruptible power supplies (UPSs) and power distribution units (PDUs) for server equipment is sharply increasing. In response, we built up the production capacity at our Mexico factory in March 2024 and further plan to build a second factory. We are also envisioning future market development in India, South America, and other regions.

As our direction for medium- and long-term product development, in addition to devices for the next-generation silicon carbide (SiC) and gallium nitride (GaN) power semiconductors that lead the greenhouse gas reduction and carbon neutrality market, we hope to seek business opportunities from our involvement in β-gallium oxide (β-Ga2O3) as research and development progress.

In gate driver modules and current sensors, we are already developing products through collaboration and co-creation with domestic and overseas power semiconductor manufacturers and aim to expand sales in Europe and other regions.

In transformers and reactors, we are developing new magnetic passive components using completely different materials than used in the past, through industry-academic collaboration between our R&D Strategy Division and Tohoku University. In April 2024, we opened the Sendai Advanced Laboratory in Tohoku University to strengthen our research and development structure.

In addition, we continue our endeavors to establish a technical foundation for our next 100 years and to create new pillars of business, including the development of joining materials suited to the growing use of chiplets in next-generation semiconductors and logic semiconductors.

Taking the two years of 2024 and 2025 as our 100th anniversary year, we will carry out a number of projects including the release of a 100th anniversary website, the compilation of a company history, and exhibits for customers, as we express our gratitude to all of our stakeholders and employees.

As I noted at the outset, though, our 100th anniversary is only a milestone for the Company. If we do not become a company that can adapt to the changes of the times and continue to evolve on our own, we will not be able to survive the world of the next 100 years.

I hope that all of our stakeholders will keep an eye on our endeavors in the new era and will continue their unwavering support for us.