Furukawa Electric

May 15, 2023

05/15/2023 | 04:58am EDT Message : Furukawa Electric Co., Ltd. May 11, 2023 Strategy Division Finance & Accounting Division This is the content of today's explanation. At the beginning of this presentation, I will give an overall view, and then Mr. Fukunaga, General Manager of the Finance & Accounting Division, will explain the results for FY2022 and the forecast for FY2023. Following that, I will again explain the progress of the 2025 Mid-Term Plan. 1 Let me begin with a review of FY2022, the first year of the 2025 Medium-Term Management Plan, and an overall view toward FY2025. 2 In FY2022, we were impacted by the global economic slowdown, especially in the deteriorating semiconductor market. The lockdown in China and other countries due to the spread of theCOVID- 19, combined with continued soaring raw material prices and transportation costs, resulted in a generally difficult business environment. Against this backdrop, the Group revised its profit plan downward in the Automotive Products and Batteries and Functional products businesses due to a lack of responsiveness to changes in the business environment and other factors. In FY2023, we assume that we will continue with a challenging business environment. The strong performance of the communications solutions-related business in North America is showing signs of slowing down, and we assume that improvement here will take place in H2 of FY2023 or later. In the Functional products business, customers are continuing to adjust their inventories, and we currently expect that the earliest recovery in demand will begin in H2 of FY2023, with full-fledged recovery beginning in FY2024. Throughout the year the Automotive Products business is expected to recover from the slump seen in FY2022, with a recovery expected from H2, as customers' semiconductor shortages will still affect the business in H1 of FY2023. Based on the above, we will not lose our strength and will firmly capture the return of demand during the coming recovery period while aggressively pursuing measures to improve profitability that we can take on our own. Although we are still in the process of recovery in FY2023, we anticipate a significant recovery in FY2024 and beyond, and therefore, the performance targets of the 2025 Mid-Term Plan remain unchanged at this time to ensure that we achieve these targets. 3 This page supplements what I just said. Global GDP is expected to grow at an annual rate of about 3%, and automobiles and semiconductors are also expected to recover in the medium term. Now, before explaining the progress of the 2025 Mid-Term Plan, Mr. Fukunaga will explain the actual results for FY2022 and the forecast for FY2023. 4