On behalf of management at Komori, I would like to express my sincere appreciation to you, our valued shareholders and investors, for your continued support.

Komori celebrated the 100th anniversary of its foundation in 2023. If we look at our sales and business expansion trajectory, divided into 30-year periods, we are now in a　period of business transformation and re-establishment. It is not at all easy for top management to lead a company with a history of over 100 years. Past conventions and　success stories sometimes interfere with new operational methods. However, fierce competition and changes contain many possibilities in a time of VUCA (volatility,　uncertainty, complexity, and ambiguity), where rapid social changes make predictions difficult. I will demonstrate leadership with renewed grit to identify changes brought　by time and to seize opportunities.

The 7th Medium-Term Management Plan started in the fiscal year ending March 31, 2025.
In the plan, we set the ROE target at 6% or more and the operating income margin target at 7% or more, based on our clear-eyed analysis of the Komori Group’s current situation. To achieve these goals, our key challenging issues are transforming our business portfolio to expand growth businesses and managing human capital with a focus on promoting diversity. We need to make our management more capital-efficient while incorporating the views of our shareholders and investors.

In addition, we changed the total return ratio from 80% to 50% to invest more in growth through M&A and other means. We also set a minimum dividend amount of ¥40. Our central issue under the 7th Medium-Term Management Plan is to achieve business transformation. I believe business transformation (i.e., transformation of our business portfolio) is essential for the healthy development of the Komori Group.

Komori positions management that is conscious of capital efficiency and capital costs as a key issue for sustainable growth and higher corporate value. Our shareholders and investors have requested that we improve our price-to-book value ratio (PBR), which we should work on proactively based on Japan’s Corporate Governance Code. Accordingly, we are implementing measures to increase capital efficiency under the long-term vision and the 7th Medium-Term Management Plan. They include making products and services more competitive, investing in growth and human capital,　carrying out sustainability initiatives, transforming our business portfolio, and making strategic investments.
In addition, we have disclosed our policy on the “Action to Implement Management that is Conscious of Cost of Capital and Stock Price”　and reflected it on our corporate governance.

In the 7th Medium-Term Management Plan, we set our ROE target at 6%, but I think this level of ROE will not meet the capital market’s expectations. The 6% target is the minimum threshold, considering our current cost of shareholders’ equity of around 7-8%. We aim for an ROE of over 10% by the fiscal year ending March 31, 2031. Our most critical tasks in achieving this target are transforming our business portfolio (i.e., expanding growth businesses) and effectively managing human capital (i.e., spreading diversity). In addition, we changed the total return ratio from 80% in the 6th plan to 50% in the 7th plan to increase the amount of strategic investments in growth businesses to ¥20.0 billion. While focusing on strategic investments, we intend to maintain our financial health and stability. In our efforts to expand growth businesses, the J-throne 29, released by the DPS business at the 2024 drupa exhibition in June, was highly recognized as the world’s highest-level digital printing press. This is a product of co-creation between our technological development and many external partner companies. In addition to digital printing technology, sheet transfer technology significantly impacts the performance of high-speed digital printing presses. We will increase revenues for the entire business by providing this sheet transfer technology to other machinery manufacturers, expanding ink and other recurring businesses and the service business, and enhancing the lineup of DPS products offerings. As for effectively managing human capital, our key issues are to respond to the aging workforce and actively tap overseas human resources. In addition, we will advance our business innovation by incorporating new ideas into conservative Japanese decision criteria with appointments of overseas human resources. We believe that sharing "KOMORI's current management status, challenges, and future goals" with employees, strengthening organizational communication, and building a "self-driven organization" to accelerate management speed are of utmost importance.
We will meet our shareholders’ expectations by steadily realizing highly capital-efficient management through business innovations, better management structures, and strategic investments.
I would appreciate your continued support for the Komori Group.

May 2025