Fuji Electric : Presentation Material with script

Hello, I am Tetsutani from the Industry Business Group. I will explain the FY2026 Medium- Term Management Plan for this business group.

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First, I will explain the changes in subsegments.

From April 1, 2024, we have integrated Information Solutions within the Social Solutions Subsegment and IT Solutions to establish a new subsegment called the Digital Transformation Solutions Business Subsegment.

The Information Solutions Business of Fuji Electric Co., Ltd. and the IT Solutions Business of Fuji Electric IT Solutions Co., Ltd. have traditionally been operated as a single business. We will further strengthen this collaboration to leverage the Group's overall capabilities and enhance the DX business.

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This is an overview of the business.

These are the sales ratios for each subsegment in FY2023, along with our main products and customers.

The Automation Systems Subsegment, which has the largest sales ratio, consists of two businesses: Components and Systems.

Fuji Electric contributes to productivity improvements and energy savings with products utilizing its excellent power electronics technologies, such as low-voltage inverters and other components, drive control systems and measurement control systems for the materials industry, as well as induction furnaces.

In the Social Solutions Subsegment, we integrated the nuclear power-related equipment business with the radiation-related equipment business in the second half of the previous fiscal year, and commenced activities as a single business unit. Together with the mobility business, the Company contributes to the safety and security of social infrastructure.

Additionally, the Digital Transformation Solutions Subsegment and the Equipment Construction Subsegment provide value to customers through energy savings, automation, and electrification across the entire segment.

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Here, we list the strengths of the Industry Segment.

The strengths of the Automation Systems Subsegment include the ability to quickly develop power electronics equipment equipped with our in-house power semiconductors, and engineering capabilities accumulated through an extensive trace record in deliveries to various industries. In recent years, we have advanced the standardization of each model through platforming, thereby enhancing development and production efficiency, while upgrading overseas bases and acquiring distribution channels.

For the systems business in particular, we are focused on expanding overseas business by transferring our domestically honed technologies, know-how, and experience to overseas bases, especially in the industries where we excel, such as steel and harbor cranes.

The Social Solutions Subsegment has strengths in advanced sensing and electrical equipment control technologies.

As the leading domestic supplier of radiation-related equipment, including monitoring posts and personal dosimeters, we have built up an extensive track record in deliveries. Moving forward, we will enhance synergies with the nuclear power-related equipment business.

In rail cars, we specialize in electrical doors. In Japan, our electric doors have been widely adopted on many conventional railway lines, such as the JR Yamanote Line, and we are expanding our market share in the United States, primarily with the New York City Subway.

The strength of the Digital Transformation Solutions Subsegment lies in its ability to provide both hardware and software.

We will promote vertically integrated customer proposals, including on-site device equipment from the Automation Systems Subsegment.

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This is a review of the FY2023 Medium-Term Management Plan.

Although profit ratio worsened due to a decline in component demand stemming from U.S.- China trade friction in FY2019 and the impact from the COVID-19 pandemic, Fuji Electric worked to reinforce the earnings structure and expand business through local production for local consumption, productivity improvements, and the promotion of partnership strategies.

As a result, we exceeded the targets in our medium-term management plan for net sales, operating profit, and operating profit ratio in FY2023.

Future challenges include further expansion of our existing overseas business, strengthening the profit structure, and developing new products related to decarbonization and DX.

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This is our market outlook.

Here, we outline market trends related to the main products of each business, breaking them down separately for domestic and overseas markets.

In Japan, we anticipate significant growth in DX-related markets.

The automation systems market should recover, especially in semiconductors, and we expect solid momentum in energy-saving and electrification aimed at decarbonization.

For nuclear power-related equipment, if investments proceed as planned in "nuclear fuel cycle" plants that reuse spent nuclear fuel, new capital investments are likely to taper off during the medium-term management plan.

In mobility, while the railway market is expected to remain flat, the market for ships and harbors has been slower to get up than anticipated, but the momentum towards electrification is strengthening.

Overseas, both automation system and mobility markets look likely to stay brisk.

Although China has yet to show improvement, we anticipate a gradual recovery towards the latter half of the medium-term management plan.

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