Under the severe business environment, the Group made concerted efforts on a global basis to further enhance business performance.

First of all, I would like to express my deepest condolences to those who have lost their lives as a result of the COVID-19 pandemic, and my sympathy to those and their families who have been affected. I would also like to express my heartfelt gratitude to all the medical professionals for their dedication and hard work.
The fiscal year 2020 was a year in which the entire world was faced with a crisis the likes of which it has not experienced in recent years. The global outbreak of COVID-19 has placed severe restrictions on business activities as well as social activities, and this situation is expected to continue for a while.
The business environment surrounding the Group was harsh, in the first half of the fiscal year in particular, due to a decrease in automobile production and delays in telecommunications and electric power-related construction, as well as lower prices for optical fiber. Amid such an environment, for the fiscal year ending March 31, 2020, the Company recorded net sales of 2,918.6 billion yen and operating income of 113.9 billion yen, a drop in both sales and profits from the previous fiscal year.
As for the second half of the fiscal year, in addition to a resurgence in demands due to a rapid recovery in automobile production, the Group united its efforts globally to secure production and shipments and reduce costs in order to make up for the large deficit in the first quarter. This resulted in net sales of 1,679.3 billion yen and operating income of 125.3 billion yen for the second half, which were both record highs.
Diversity in our business portfolio engaging in social infrastructure-related businesses and automotive businesses contributed in easing the negative impact. The current mid-term management plan, VISION 2022, targets the achievement of net sales of 3,600 billion yen and operating income of 230 billion yen in the final year, FY2022, and net sales of 3,400 billion yen and operating income of 200 billion yen in the interim year, FY2020. In terms of the progress of VISION 2022, the interim targets were achieved.

We continue to strive to achieve the final goal of ourmid-term management plan, VISION 2022.

We expect that the COVID-19 pandemic will soon be brought under control with the progress of vaccinations, but there are many uncertain factors such as the spread of variants, and I believe that the normalization of economic and social activities may be delayed longer than expected. There are also political and geopolitical concerns, such as the trade dispute between the U.S. and China, as well as semiconductor supply uncertainty.

*1 CASE: Connected, Autonomous, Shared, and Electric, the key trends in the automotive field.

*2 SEQCDD stands for the Sumitomo Electric Group's policy of considering and implementing the following elements: S (Safety), E (Environment), Q (Quality), C (Cost), D (Delivery), and D(Development).

We will enhance our initiatives to address issues related to the global environment with the aim of achieving carbon neutrality by 2050.

The Group has positioned issues related to the global environment, such as global warming and climate change, as one of our most important management issues, and has been working to solve these issues by reducing the impact on the environment through the promotion of the “Action ECO-22V” Campaign by providing environmentally-conscious products and services, based on the “Environmental Policy.”
Currently, we have established the goal of reducing greenhouse gas emissions to the level required by the Paris Climate Agreement*3 by 2030, and by accelerating these efforts, we intend to make further contribution to building a society that is sustainable and has less impact on the environment. This goal has received certification from the Science-Based Targets initiative (SBTi). The Group also expresses its support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which recommends information disclosure on the risks and opportunities posed by climate change to businesses.
Taking advantage of these initiatives, the Group will continue to focus on the resolution of issues related to the global environment, including efforts to achieve carbon neutrality by 2050 and the promotion of information disclosure on climate change.

*3 Paris Climate Agreement: Aims to limit the rise in global average temperature to well below 2°C above pre-industrial levels, and to pursue efforts to limit the increase to 1.5°C

We will strive to offer social value and enhance corporate value over the medium and long term with Mobility, Energy, and Communications as our priority segments.

The business environment surrounding the Company is constantly changing, including the spreading of the COVID-19 infection. The digitalization of the economy and society, the response to issues related to the global environment, and the movement to strengthen efforts to enhance resilience are all rapidly accelerating. As part of our efforts to develop a system that can respond to these changes in the business environment, we established the DX Promotion Committee in April 2021 to further promote digital transformation (DX), which has so far been promoted mainly in manufacturing sites. From here on, I will take the lead in promoting DX for the evolution and development of SEQCDD, which is our strength.
On the other hand, we remain committed to consistently responding to the emergence of a new mobility society through the advancement of CASE, the smartening of energy networks through the spread of renewable energy, and the transformation of human communication through the advancement of digitalization, which we have traditionally envisioned.
In VISION 2022, we presented a picture of a society in which all people and things will be connected through infocommunications, electric power, transportation, and other types of network to optimize society as a whole, in other words, becoming a “smart society” around 2030. By delivering value that is environmentally friendly, safe, and secure, and that leads to comfort and social growth, the Group is committed to becoming an entity that supports industry and people’s lifestyles in a future society where the three business segments of Mobility, Energy, and Communications are fused together.
In order to realize our vision as a company, we would like to carefully assess what investments we should make and what types of business we should expand in order to improve not only the Company but also society in the future, in the process of efforts to achieve specific goals, while also discussing with our business units.
By Capitalizing on the current changes in the times, our Group, which focuses on Mobility, Energy, and Communications, will have a lot to look forward to. We are committed to making all our efforts to meet and exceed our stakeholders’ high expectations for the future of the Sumitomo Electric Group. Thank you for your continued support and cooperation.