To Our Shareholders

I would like to thank all of our shareholders for your continued support and consideration.

Looking back at FY2017, although the inventory adjustment that occurred in relation to digital coherent products in the Communications Solutions business had a negative impact, the robust demand for optical fiber and cable products, as well as increased sales of wire harnesses in the Automotive Products business and increased income margins in the Copper Foil business as a result of higher productivity and revising the product mix, income increased on higher revenue compared to the previous year. Based on these results, the dividend for FY2017 was raised from 55 yen to 80 yen per share.

Concerning FY2018, as preparation for achieving the medium-term management plan “Furukawa G Plan2020”, the capital and R&D investments will be increased in the focal fields. Due to this, operating income, ordinary income and net income are expected to decline, but we will accelerate the initiatives aimed at strengthening the earnings capability, including actively introducing automation and IoT/AI, enhancing cost competitiveness companywide and reviewing the low margin businesses.

In May of this year, the consolidated operating income target in FY2020 set forth in “Furukawa G Plan 2020” was increased from at least JPY 40 billion to at least JPY 55 billion, and the target net income attributable to owners of the parent company was increased from at least JPY 20 billion to at least JPY 30 billion. In addition, the ROE target was raised from at least 8% to at least 10%. Going forward, we will continue to strengthen mainly Infrastructure (communications, energy), Automotive Products and fields that are a combination of these businesses.

I ask our shareholders for your continued support of Furukawa Electric.