Message from the President and CEO

To Our Shareholders and Investors Representative Director, President, CEO and COO Makoto Hattori

April 2023

A Year of All-Out Effort to Overcome Difficulties and Achieve LSV 2030

We launched LSV 2030-Stage 1, our three-year medium-term business plan, in April 2021 to set us on the road to achieving the Lintec Sustainability Vision 2030 (LSV 2030) that clarifies our long-term vision for where the Group wants to be in 2030. We achieved record-high net sales and profit in the first year of the plan (ended March 31, 2022) due mainly to a significant increase in performance underpinned by strong demand for products related to semiconductors and electronic components. Ahead of schedule, we have achieved the management targets for the medium-term business plan’s final year (the fiscal year ending March 31, 2024).

In the fiscal year ended March 31, 2023, net sales steadily expanded due in part to the ongoing depreciation of the yen and synergy brought about by an acquisition at a U.S.-based subsidiary. However, profit experienced downward pressure due to soaring logistics costs and prices of fuel and raw materials, including pulp. It proved an exceedingly challenging year because, from the beginning of autumn, the U.S. economy retracted and inventory adjustments took place in electronics-related markets.

We have positioned the final year of LSV 2030-Stage 1, namely the fiscal year ending March 31, 2024, as a year in which we will make an all-out effort overcome difficulties and achieve LSV 2030. We are therefore steadily investing in the production of semiconductor- and electronic component-related products that are expected to recover from adjustments. We will continue taking measures to improve the profitability of low-earning businesses. In both our long-term vision and medium-term business plan, we have adopted operating profit margin and return on equity (ROE) as key indicators. To achieve an ROE that substantially exceeds the current cost of capital of between 5% and 6%, we will work hard to improve profitability in each business and enhance shareholder returns, thereby increasing capital efficiency.

In addition, as laid out in the key initiatives of our long-term vision, this year we will continue to strengthen our ESG-conscious sustainability management, such as promoting work-style reform and environmentally oriented adaptation aimed at realizing decarbonization and a circular economy. Furthermore, we are striving to create new products and businesses that will serve as pillars of growth as we strengthen the corporate structure through process innovation using digital transformation (DX) with the aim of helping solve social issues and realize a sustainable world. I would like to thank our shareholders and investors for their continued support in the years ahead.

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