In FY2024, Furukawa Electric Co., Ltd. celebrates 140 years in business. As the future becomes increasingly difficult to predict, it is important to make management decisions faster and increase employee engagement with the organization. In addition, in order for the Furukawa Electric Group to be widely recognized by stakeholders as a corporate group that contributes to the realization of a truly prosperous and sustainable society, and for our employees to feel pride and job satisfaction, we felt that it was necessary to articulate and disseminate our purpose, so in March 2024 we reviewed our philosophy system and newly formulated the Furukawa Electric Group Purpose.

FY2023 was the second year, so the halfway mark, of the four-year 2025 Medium-term Plan, and also my first year as President. Unfortunately, our business performance left a lot to be desired, but it was also a year in which we made steady progress toward achieving Vision 2030, the visionary outlook for our Group in 2030, and the goals of the 2025 Medium-term Plan, a milestone for achieving Vision 2030.

With regard to maximizing revenues in existing businesses, there are still issues to be addressed in each area, but I believe that the direction and action we should take has become clearer. In businesses related to automotive and functional products, in particular, we are beginning to see results from our activities. For example, in the AI and data center markets, our business related to heat radiation and cooling systems is performing well, and we will further expand it by capturing additional demand. In addition, in the business that produces tapes for semiconductor process, our new factory in Mie, in which we have already made investments to boost production, is on schedule with preparations for the start of mass production in FY2025, and we are anticipating growth in the semiconductor market, where a recovery is expected. However, in the Communications Solutions business, we have been slow to respond to growing demand in the AI and data center markets, resulting in a gap in performance with other companies in our industry. We will continue to respond to the recovery in demand in the telecommunications carrier market, but we will also expand revenues by increasing sales of optical fiber and cable, optical components, and so on.

As for building a foundation for creating new businesses, several shoots that should lead to the achievement of Vision 2030 and sustainable growth thereafter have begun to emerge. We are seeing results from building a foundation for the future, such as technology for producing green LP gas and infrastructure-related digital transformation services (Michiten^®, Tetsuten^®), which have not been among our Group's core businesses until now, Infrastructure Laser™, as a means of expanding into different markets, and high-temperature superconducting wires with attractive applications such as nuclear fusion power generation. To advance these new businesses, external partnerships are absolutely necessary. We have been collaborating with Tokamak Energy in the United Kingdom on the development of high-temperature superconducting wires for nuclear fusion reactors, which I view as a major achievement.

Under the 2025 Medium-term Plan, we have been pursuing management with an emphasis on capital efficiency, and so far have completed several rounds of business restructuring, with increasing the value we add to invested capital (FVA or Furukawa Value Added) and ROIC as one of our axes for decision-making. On the other hand, by being conscious of the large granules that are "business" divisions, we tended to lack the essential perspective of whether or not a product group had strengths.

We view non-financial elements as a business fundamental that has the potential to generate future financial value, and we are pursuing ESG management under the 2025 Medium-term Plan. As such, we have been steadily developing the foundation for ESG management.

With regard to “Environment,” as we move toward our goal of achieving carbon neutrality by 2050, we are beating our targets for the sustainability indicators "GHG emissions reduction rate in business activities" and "ratio of renewable energy use to total electricity consumption." In addition, in accordance with the revision of the Environmental Targets 2030, from FY2024 we have changed the base year for GHG emissions to FY2021, and will be embracing the challenge of achieving even tougher reduction targets.

With regard to “Social,“ we are addressing strengthening human capital and organizational execution abilities. Based on the idea that what makes a company is its people, to realize our purpose and be sustainable as a company, it is important that the right employees are assigned to the right places, that individuals are motivated and fulfilled at work, and that their own value is recognized and they feel satisfied as a result. "Employee engagement scores" are the visualization of this. In FY2024, we expanded the scope of the survey from the Furukawa Electric to include employees of Group companies in Japan and overseas, and we will strengthen the survey while setting higher targets.

With regard to “Governance,” we are steadily advancing initiatives for human rights, such as implementing human rights due diligence and communicating with stakeholders on human rights.

Our group will continue to strengthen and transform our business by creating new technologies, products and services to further earn the trust and meet the expectations of all of our stakeholders. We advance various measures aimed at achieving the ideal state of Vision 2030 and the current 2025 Medium-term Plan. At the same time, based on the Furukawa Electric Group Purpose, I want to make the Furukawa Electric Group a corporate group in which we all work together to pursue businesses that create "a brighter world" and to achieve sustainable growth by "composing the core" with dreams.