Message from the President

President
Toray Industries, Inc.
Akihiro Nikkaku

We would like to express our sincere appreciation for the continuous support and understanding of our stockholders and investors.

In the year ended March 31, 2017 (fiscal year 2016), the global economy as a whole maintained its recovery despite some delay in recovery seen in the U.S. and Europe. The Chinese economy has been heading towards recovery and there were also signs of the recovery in many of the other emerging countries. The Japanese economy in general continued on a gradual recovery track on the back of improving employment and income situation.

As for foreign exchange rates, the yen remained stronger against the U.S. dollar and other major currencies compared with a year earlier, resulting in declines in net sales and profits at overseas subsidiaries when converted into yen.

Under such circumstances, Toray Group, based on the medium-term management program “Project AP-G 2016,” that spans over three years from fiscal year 2014 to 2016, implemented a growth strategy focused on taking advantage of growth business fields and business opportunities, while pursuing business expansion in growth countries and regions as well as further bolstering its competitiveness in accordance with the program.

As a result, consolidated net sales for the fiscal year ended March 31, 2017 declined 3.7% compared with the same period of the previous fiscal year to 2,026.5 billion yen. Operating income decreased 4.9% to 146.9 billion yen, and ordinary income fell 4.3% to 143.7 billion yen. Net income attributable to owners of parent increased by 10.3% to 99.4 billion yen.

Taking into consideration such earnings performance, the Company declared a year-end dividend of 14.0 yen per share of common stock, increasing 1.0 yen from the previous fiscal year.

The global economy as a whole is expected to maintain its gradual recovery tone led by economic recovery in developed countries with a focus on the U.S., as well as the upswing in emerging economies. However, attention should be paid to risk factors such as the increasing pressure of protectionism policies by developed countries, the impact of normalization of the U.S monetary policy and growing geopolitical tension. The Japanese economy is also expected to recover gradually on the back of improving employment and income situations, though there are concerns that the economy may be weighed down by uncertainties in overseas economies and the changes in the financial and capital markets.

Under such circumstances, Toray Group launched the new medium-term management program “Project AP-G 2019” which was announced in February 2017 and will continue to drive forward initiatives of growth strategies and enhancement of business structure.

We hope all stockholders and investors will grant continued understanding and support in the future.

June 2017.