05 January 2026

Happy New Year to you all.

Regarding the global economy last year, various concerns were raised, including the impacts of U.S. tariff policies and rising protectionism. While there is a viewpoint that the actual impact was limited, there are also many negative factors for future economic growth, such as delayed recovery in business sentiment in Europe and China. As a result, the downward risks have been increasingly trending.
In Japan, thanks to improvements in corporate earnings and increased wages, individual consumption and capital investment showed a reviving tendency. However, concerns have been repeatedly pointed out regarding the business environment both domestically and internationally, including the stagnation of real wage growth due to persistently high prices, the uncertainty in policy trends in the U.S. and China, and foreign exchange risks.

As for the global economy this year, a variety of risks have been highlighted, including uncertain policy trends in the U.S. and China. Meanwhile, while a moderate recovery is anticipated, the Japanese economy needs to increasingly prepare for business environment risks, particularly both yen depreciation and rising interest rates, resulting from proactive fiscal policy.

In light of the business environment surrounding our group, as I mentioned earlier, and to respond to address growth areas such as GX, CASE, and generative AI, I believe it is essential for us to enhance our adoptability to new technologies and improve our working styles and the quality of our operations.

Based on the circumstances, I would like to present the following three key points for all employees this year that I ask you to address:

1. Ensuring ”Zero Incidents” and Improving “SEQCDD"
Every employee must hold the belief that "all accidents can be prevented" and work sincerely on safety activities with a resolute determination that "similar accidents will absolutely not occur."
I urge all managers and supervisors to take the lead with a strong commitment to "Zero Incidents" and to thoroughly provide guidance in each workplace.
Moreover, I ask that you share specific numerical targets, timelines, and a strong desire for achievement among all stakeholders in all "SEQCDD" activities, and promote results-oriented activities.
To further enhance the quality of our operations, please embrace change positively, actively adopt new methods such as DX, share information within your teams, and value a spirit of cooperation and support.

2. Boldly Taking on New Challenges without Resting on your Laurels
Our group has continued to achieve strong performance, setting record highs in both sales and profits in our financial results, along with a rise in our company's stock price. This success is a result of the hard work of each and every employee. It is precisely during such favorable times that I hope you will not be satisfied with the current situation, but instead aim for further growth and boldly take on new initiatives.
In the "Sumitomo Electric Group 2030 VISION" and the "Mid-term Management Plan 2025," we aim to expand our business in three key areas: energy, infocommunications, and mobility. Specific recent projects in the energy sector include the establishment of a new power cable factory in Scotland and enhancements to production capacity in Germany. In the infocommunications sector, we are expanding the production of optical fibers, optical devices, and optical equipment for the rapidly increasing data center market. In the mobility sector, we are pursuing synergies with Sumitomo Riko and further improving the value we provide to our customers. I encourage you to successfully complete these specific and recent projects and to challenge yourselves to enhance our group's corporate value even further.

3. Demonstrating Our Group’s Comprehensive Capabilities
In October of last year, we announced the execution of a public tender offer for the transfer of shares in Sumitomo Densetsu and for the complete acquisition of Sumitomo Riko.
Regarding Sumitomo Densetsu, we have walked together since our capital participation in 1951; however, we made the decision to transfer the shares because we believe that becoming a member of the Daiwa House Group will open a new path to growth.
On the other hand, concerning Sumitomo Riko, we determined that by merging Sumitomo Riko’s technologies and research and development capabilities with our material and processing technologies, we could enhance our group’s competitiveness in the accelerating transformation of automobile manufacturing.
I hope, moving forward, you accelerate collaboration on the important issue of CASE, working together as a group to create synergies.
By sharpening our technical capabilities as well as our research and development capabilities and strengthening cross-divisional collaboration, let us exert our collective strength as a group and turn business opportunities into solid results.

As this year is a major turning point, marking the final year of the “Mid-term Management Plan 2025” and preparing the “Mid-term Management Plan 2028,” let us work together as a group to enhance our corporate value.
By thoroughly returning and distributing the fruits of our growth to all five stakeholders—you, our employees, customers, suppliers, local communities, and shareholders/investors—in line with the “Goho-Yoshi” principle, we aim to pursue our sustainable growth.