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Management Information

President  Jun Kato/Chairman of the board Sakurai Satoshi

We will seek even greater profitability and shareholder returns by shifting focus to the automotive sector with its expected demand.

I would like to express my sincere gratitude to all of our shareholders for their continued support.

Financial results for the second quarter of the 74th fiscal year (from April 2019 to September 2019) and business environment

The electronics industry saw sluggish levels of electronic component production, which were mainly due to the effects of slack demand accompanied by a saturated Chinese smartphone market, while demand for IoT-related devices and the expansion in the ratio of automobile electrification increased.

Under these circumstances, the Elematec Group focused on sales of automotive-related materials and components, but recorded negative growth in net sales for the consolidated cumulative second quarter, which was mainly due to the effects of weak demand caused by the saturated smartphone market. All income line items also showed negative growth in line with the decrease in net sales.

Full-year business forecast and dividends

Although the automotive-related business of the Elematec Group has been steadily expanding, the Elematec Group made a downward revision of the full-year business forecast for the current fiscal year as announced on October 28, 2019, taking into account delays in order placements for new projects, which were reflected in the original forecast, and the lower-than-expected performance of the smartphone-related business against the backdrop of a sluggish market. Concerning dividends, the Elematec Group recalculated dividends based on the downward revision of the business forecast and arrived at 17 yen per share as the interim dividend for the current fiscal year. The forecast for the year-end dividend is 22 yen per share. As a result, the annual dividend will be 39 yen per share.

We would like to extend our deep apologies to our shareholders for any anxiety and inconvenience that may have been caused as a result of the above financial results and the downward revision of the full-year business forecast and dividends.

Although a challenging situation has remained due to the deterioration of the business environment, we see optimistic signs because the performance of the Elematec Group bottomed out in the second quarter of the current fiscal year. In the second half of the fiscal year, the Elematec Group will continue to focus on sales and marketing activities in growth markets and will work on rapidly developing businesses in order to be the first to respond to, in particular, trends in the automotive market as it marks a 100-year watershed, as well as the diffusion of automation and energy conservation.

Business development leveraging the five functions of Elematec

As discussed so far, the business environment of the Elematec Group has been increasingly harsh and the Group expects even tougher competition in its markets. In order appropriately respond to such environmental changes, we will endeavor to offer a broad range of services by adding the Elematec Group’s five unique functions to the basic functions of a trading company. As an integrated service company capable of offering one-stop services covering a range of functions from planning to development and design, procurement agency services, manufacturing services, and quality and environmental management through logistics services that leverage networks of locations inside and outside Japan, we will provide added value by organically connecting the five functions in order to continue to be the first choice of customers. We ask for your continued understanding and support.

December 2019

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