To Our Shareholders & Investors

During the fiscal year ended March 31, 2023, Japan's economy showed gradual recovery as efforts were made to balance the prevention of the spread of the novel coronavirus and economic activity. However, due to uncertainties such as the situation in Ukraine and the rapid depreciation of the yen, the situation required attention to the impact on household finances of rising prices due to soaring energy costs and raw material prices, as well as constraints on the supply side. In the housing industry, the number of new housing at the start of FY2022 was 861,000 units (down 0.6% year-on-year) and floor area 68,651 thousand m2 (down 3.5% year-on-year), due in part to higher construction costs resulting from high material prices and a lack of supply of building materials.

 

Our group has started the five-year 7th Mid-Term Management Plan from FY2023. We have positioned the plan as a strategy to fill the gap between the current situation and the ideal state of our medium- to long-term vision, which is "to contribute to the realization of a comfortable society through the continuous challenge of developing new technologies and creating new markets" and "to become a FUKUVI Group that can realize joy by integrating the growth of each and every employee with that of the company. We have set forth three basic strategies to enhance our existence value as a company by embodying business activities based on our corporate philosophy and to achieve stable management in the era of VUCA.

(1) Expansion of circular business
　・Expand our business domain to plastic recycling and contribute to a recycling-oriented society.
　・Increase the group's presence by developing brands of environmentally friendly products and implementing FUKUVI's 5Rs (Reduce, Reuse, Recycle, Renewable, Revalue).
(2) Build a strong earnings base
　・Further expand our value position in material compounding and molding technology, which are our strengths.
　・Further increase added value through product development in line with social needs, restructuring of business PF with profitability in mind, and further cost reductions through productivity improvements.
(3) Build an organization to support growth
　・By proactively working on human capital, we will increase employee engagement and accelerate reforms to create a fresh organization where employees can make the most of their abilities.
　・Strengthen the governance system to ensure the implementation of the strategy.

By promoting the above measures, the Group will build a solid foundation toward becoming a 100-year company, and furthermore, by continuing management that contributes to the community and society, the Group aims to be a company that is always trusted and chosen by its stakeholders.

Uncertainty is further increasing in the social environment as the effects of the new coronavirus are normalized, the Russian-Ukrainian problem is prolonged, and global inflation is rising. In order to maintain sustainable growth amid such changes, it is becoming increasingly important to promote socially and environmentally friendly business activities while implementing innovative corporate reforms, and we aim to achieve long-term development by contributing to society through the business activities of the FUKUVI Group. 　However, we recognize that the following issues need to be resolved in order to achieve long-term growth and further enhance corporate value.
(1) Shift to business operations that place ESG at the core of management
　As corporate social responsibility becomes more and more important, we will promote ESG-conscious initiatives more than ever in order to continue to be a sustainable company in the future. We will embody business activities based on our corporate philosophy of "contributing to the community and helping to create an environmentally symbiotic society through corporate management," enhance our existence value as a company, and aim for stable management that makes it easier to predict and respond to risks by raising awareness of environmental, social, and corporate governance issues.
(2) Planning and promotion of business strategies for growth
　We have newly formulated the 7th Mid-Term Management Plan, and in accordance with the three basic strategies of "expansion of recycling-oriented business," "establishment of a strong earnings base," and "creation of an organization to support growth," we will create new value that is not affected by the external environment by setting specific measures in each business and steadily implementing them based on corporate responsibility with consideration for society and the environment. We will create new value that is unaffected by the external environment by establishing and steadily implementing specific measures in each business. In particular, we will accelerate our efforts in peripheral areas of existing businesses or new businesses, which will lead to the growth of the entire group companies.
(3) Promote and strengthen sustainability management
　In order to further promote and strengthen sustainability management, we will establish a new "Sustainability Promotion Office" and a "Sustainability Committee." This committee will collect and analyze ESG-related information, and formulate and implement measures to enhance sustainable corporate value. It will also aim to disclose sustainability-related information and strengthen communication with stakeholders, thereby playing a role in the realization of a sustainable society.
(4) Establishment of a system to support sustainable growth
　As a structure to support sustainable growth, we have newly established the New Business Planning Office as a department to constantly search for new businesses in addition to the Sustainability Promotion Office. We will continue to explore new budding businesses in this era of rapid change. We will also continue to strengthen risk management. We will sequentially formulate BCPs and improve our system for geopolitical and other risks.

　In the housing industry, the Group's main market, growth in new housing is expected to continue to be weak, due to factors such as the impact on consumer confidence of rising construction prices against a backdrop of soaring raw material prices. On the other hand, the market for environmentally friendly housing is expected to grow, and since there is room for growth in the non-housing and renovation sectors, we believe that we need to create new markets by sincerely listening to the needs of our customers. 　By aggressively promoting the three basic strategies of the 7th Mid-Term Management Plan, which will begin in fiscal 2024: "Expand cyclical business," "Build a strong earnings base," and "Create an organization to drive growth," we expect consolidated net sales of 40,730 million yen, operating income of 1,680 million yen, ordinary income of 1,920 million yen, and net income of 1,920 million yen for the fiscal year ending March 31, 2024. We forecast consolidated net sales of 40,730 million yen, operating income of 1,680 million yen, ordinary income of 1,920 million yen, and net income attributable to owners of the parent of 1,490 million yen. 　We are determined to grow into a company that meets the expectations of our shareholders and investors through the steady implementation of our medium- and long-term plans, and we ask for your continued understanding and support in these endeavors.