To Shareholders and Investors

We would like to express our sincere gratitude to our shareholders and investors for their continued support.
This is our FY 2024 financial report (from April 1, 2024 to March 31, 2025).

Looking at the world economy during the fiscal year ended March 31, 2024, the U.S. economy remained on a steady growth track, helped mainly by strong consumer spending, while growing inflation concerns due to the U.S. tariff policy caused increase in economic uncertainty. In Europe, there were signs of economic improvement, helped by the recovery of consumer spending, etc. On the other hand, China’s domestic demand remained weak due to a prolonged real estate crisis and a challenging job market, and its exports growth slowed sharply due to the impact of U.S. additional tariffs on China.
The automotive market, the company’s key focus area, showed signs of growing auto production and sales in China. On the other hand, the global EV market slowed down from the latter half of FY2023, while the Japanese, European and U.S. markets slumped. As a result, global automobile production for the fiscal year ended March 31, 2024, slightly decreased from the previous year’s level.

Given this business environment, the future mobility market saw a drop in sales because of a reversion to a rise in sales during FY2023 Q4, a period when some customers secured safety inventory against shortage anticipated during the company’s whole system change to a new ERP from April 1, 2024. It was also affected by market slowdown due to sales slump in the powertrain market for xEV (EV, FCHV, PHV, HEV) of the main segments, as well as sales decline in Japanese, European and U.S. automakers’ vehicle models, whereas car sales in China recovered from FY2024 Q2 onward. In the consumer market, sales increased for printers and digital cameras. In the industrial market, demand for FA equipment remained weak, whereas sales in the energy management system market grew. Besides, the Japanese yen remained weak. As a result, the company’s sales remained at \56,332 million, up 1.9% YoY.

When it comes to profit, an operating profit decreased to ¥5,362 million, down 9.7% YoY, ordinary profit to ¥5,558 million, down 22.7% YoY, due to stagnant sales, soaring raw material costs, etc. whereas profit attributable to owners of the parent increased to ¥2,742 million, down 51.0% YoY as structural reform expense were recorded.

Next, we would like to present our outlook for the near future.

The business environment surrounding the company will be even more uncertain due to the global impact of the U.S. tariff policy, which could also pose a risk of a potential economic downturn due to inflation and retaliatory tariffs.

In the mobility market, global automobile production is expected to decrease in the fiscal year ending March 2026 compared to the previous year’s level, while the share of xEVs, including PHVs and HEVs, in the auto production, is expected to remain only slightly higher than the previous year’s level. In the infotainment market, a boom in demand for high-speed transmission connectors is expected, driven by increasing sales to Chinese customers. In the consumer market, a weak demand for gaming consoles is expected to continue, which will lead to a tough business environment. On the other hand, in the industrial market, a grow in demand is expected in new industries including the energy management system market.

The new mid-term management plan for the three years starting from the fiscal year ended March 31, 2025 , includes four focus strategies to meet the ¥100 billion sales target by 2030, which was set out as a long-term vision, by:

・Preparing the ground for shifting from "IRISO for automotive" to "IRISO for next mobility"
・Increasing the company’s global presence in the industrial market
・Reviewing the global production system, and improving productivity and capital efficiency through standardizing equipment and toolings
・Continuing to develop the sustainable management system (environment, human resources, and strong management foundation)

Since the mid-term management plan was created, the company has faced many changes in the global business environment, including the risk of an economic downturn, poor sales in Japanese, European and the U.S. auto sales, the EV market slowdown, the rise of Chinese automakers and intensifying price competition, and the soaring costs of raw materials, which were not initially anticipated. Considering these changes and the current progress of the mid-term management plan, we will focus on the following key focus strategies during the second year of the plan, the fiscal year ending March 2026.

【Business Strategy】

■Next Mobility Market

・Increase sales of products that meet EU and US standards in the powertrain market and expand the Z-Move connector line.
・Develop a new market by entering the auto centralized control ECU market with the next-generation high-speed transmission connector and scalable connector.
・Accelerate early mass production of new products to be launched in the sensor market through joint development with KEL Corporation (from FY2025 onward).

■Industrial Market

・Seek new business opportunities for AI, chip manufacturing equipment and telecommunication sectors in the energy management system market.
・Develop new customers by using distributers such as Arrow Electronics, Inc., with which an agreement was made in FY2024.

■All Markets

・Win more Chinese customers by integrating local production, sales and engineering within China.

【Bolster Business Foundation】

■To Restructure the Company

・Improve production efficiency by accelerating the Akita plant operational launch and review production system (BCP management, local consumption of local products and tariffs).
・Standardize equipment and toolings, and promote in-house tooling manufacturing.
・Redefine HQ role and responsibility and improve back-office productivity by using digital transformation. (DX).

■To Streamline Operations

・Cut indirect costs by standardizing operations and improving supply chain visibility with the new ERP system.
・Improve capital investment efficiency and reduce fixed costs by standardizing equipment and increasing in-house tooling production and reduce fixed costs.

In the given business environment, for the fiscal year ending March 2026, we expect consolidated sales of ¥55 billion (a 2.4% decrease compared to the previous year’s level), a consolidated operating profit of ¥5.5 billion (a 3.6% increase compared to the previous year’s level), a consolidated ordinary profit of ¥5.4 billion (a 1.9% decrease compared to the previous year’s level), and net profit attributable to parent company of ¥3.9 billion (a 46.5% increase compared to the previous year’s level). The exchange rates are ¥145 per USD, ¥162 per EUR, and ¥20 per CNY.

We would appreciate the continued support and understanding of our shareholders and investors.

May 2025
Hitoshi Suzuki, President and CEO