Allow me to take the opportunity to report on the business overview and our initiatives for the interim period.

■ Business Overview for First Half of Fiscal 2022

During the six months ended September 30, 2022, the global economy showed signs of strengthening in Europe and the U.S., especially in industrial production, and a gradual economic recovery in China after the lifting of lockdowns, despite soaring resource prices and concerns about securing a stable energy source. The Japanese economy has also been picking up mainly in the manufacturing sector, as capital investments increased backed by strong corporate earnings.

Under such circumstances, demand was brisk in the telecommunications equipment and factory automation markets including robots and semiconductor manufacturing equipment, which are the Group’s main target markets.

■ 9th Mid-term Management Plan and Current Initiatives

Under the 9th Mid-term Management Plan, which started in April 2021, SANYO DENKI Group aims to build a “leading global brand”as a global company by creating new things and new ways of doing things in unprecedented ways with the theme of “Breaking the Shell.” In this second year, we continue to expand our global design and development system as well as sales system.

Conditions during the interim period were challenging as shortages and soaring prices of parts and materials drove upheaval in the business environment.

For shortages of parts and materials, we are using our sales bases around the world to carry out global procurement activities. This enables us to procure parts overseas that run short by domestic procurement alone. We are also building a system that enables stable procurement in line with market fluctuations.

In addition, we are working to deliver products to our customers as quickly as possible. For example, this includes changing the design with use of general-purpose components to provide the same performance as before.

As part of our efforts to improve profit ratio, we will discontinue the production of traditional products with low automation impact, with the aim of accelerating our transition to new products that can maximize the impact of automated production lines, for enhancement of profitability.

We thank you for your continued support and understanding of the Group.