We would like to take this opportunity to thank you for the invaluable understanding and support you have extended to Toray Industries, Inc. and the Toray Group.

During the fiscal year ended March 31, 2024, the recovery in global economy lacked strength due to the sluggish economy in Europe and slowdown in China despite a strong showing by the U.S. The Japanese economy continued to recover gradually, but uncertainties over the outlook of the global economy and prolonged adjustment in the semiconductor market exerted downward pressure on the recovery.

Under such circumstances, Toray Group starting from FY 2023 has been promoting its medium-term management program “Project AP-G 2025,” aiming to achieve sound, sustainable growth through the implementation of five basic strategies of “Sustainable growth,” “Ultimate value creation,” “Product and operational excellence,” “Enhancement of people-centric management,” and “Risk management and governance.”

As a result, consolidated revenue of Toray Group decreased 1.0% compared with the previous fiscal year to ¥2,464.6 billion, while core operating income increased 6.9% to ¥102.6 billion. Operating income declined 47.1% to ¥57.7 billion and profit attributable to owners of parent fell 69.9% to ¥21.9 billion due to recording of impairment losses in the Carbon Fiber Composite Materials segment on sluggish demand in wind turbine blade applications, etc. Taking into consideration such earnings performance, the Company declared a year-end dividend of 9.0 yen per share of common stock, for an aggregate annual dividend of 18.0 yen per share of common stock including interim dividend of 9.0 yen.

Moreover, the Company has decided a policy to reduce cross-shareholdings and use the proceeds from the sales for share buybacks. To accelerate capital efficiency improvement in order to achieve the targets under the medium-term management program “Project AP-G 2025,” the Company will reduce cross-shareholdings 50%, about 100 billion yen at current market value, in three years from FY 2024 to 2026. All the proceeds from the sales of cross-shareholdings will be used for share buybacks as shareholder return.

The pace of recovery in the global economy is likely to remain slow due to factors such as the high interest rates in the U.S. and Europe dampening consumer spending and capital investment as well as the slow recovery in the Chinese economy. The Japanese economy is expected to show a gradual recovery. However, the prolonged real estate recession in China, slowdown in consumption in the U.S. and Europe owing to the delay in start of interest rate cuts, rising tensions in the Middle East, a change in the Bank of Japan’s monetary policy, and foreign exchange fluctuations are among downward risks for the economy in Japan and abroad.

Under such circumstances, Toray Group will promote the basic strategies under the medium-term management program “Project AP-G 2025” and carry out its business operation in anticipation of uncertainties.

We would like to ask our shareholders for their continued understanding and support.

July 2024