Throughout our history, we have positioned the enhancement of financial soundness and improvement of capital efficiency as top priorities, and have consistently strengthened our financial foundation over the long term. As a result, we have made steady progress in reducing interest-bearing debt and expanding equity capital, and have now established a solid and highly flexible financial base. At the same time, we recognize that challenges remain, including gaps between our medium-term operating profit targets and actual performance, as well as issues related to the profitability and efficiency of our core businesses. Accurately recognizing both achievements and challenges is essential for enhancing corporate value going forward.

In our recent financial strategy, we have shifted to a new phase of actively pursuing growth investments based on this strong foundation. Moving beyond an overly conservative financial approach, we will promote growth strategies, including M&A, by utilizing appropriate leverage, aiming to strengthen earning power and achieve sustainable growth. At the same time, we will reinforce management with a strong awareness of capital costs and work to improve market valuation through enhanced ROE and PBR.

Our capital policy emphasizes shareholder returns while maintaining financial discipline. Through dividend increases and share buybacks, we have clarified our commitment to shareholders while optimizing our capital structure. We will continue to pursue stable and continuous returns, while maintaining a balance with investments for future growth to maximize corporate value.

In cash allocation, we clearly prioritize the strategic use of limited resources across growth investments, capital expenditures, shareholder returns, and the management of interest-bearing debt. By improving structural profitability, we aim to strengthen our ability to generate stable cash flows over the medium to long term, thereby achieving sustainable value creation.

Regarding strategic shareholdings, we rigorously assess their rationale from a corporate governance perspective and have been steadily reducing them through planned measures. Through dialogue with companies within the Furukawa Group, we are enhancing capital efficiency and financial transparency, and will continue to review the appropriateness of such holdings.

As we mark the milestone of our 150th anniversary, we stand at a critical juncture for the next stage of growth. By leveraging our financial base and addressing challenges head-on, we will enhance earning capacity and capital efficiency, and strive to deliver sustainable corporate value trusted by investors worldwide.

September 2025