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Message from the President

Message from the President

• Moving from the operational turnaround phase to the sustained growth phase

Faced with a rapid, severe deterioration in performance in FY2019, the Fujikura Group changed course to a basic strategy of concentrating on a rapid operational turnaround. We designated the second half of FY2020 onward as the operational turnaround phase and the entire company has worked as a team to pursue various reforms. We are working to stabilize and improve the profitability of our core businesses through the key measures of “strengthening governance” and “the unreserved selection and concentration of existing businesses” based on the 100 Day Plan to turn around operations.
To explain “strengthening Group governance” in greater detail, we halved the number of directors and corporate officers, dissolved and constructively reorganized the former in-house company system, clarified responsibilities and authority, and implemented agile decision-making and efficient business management from April 1, 2021.
As part of “the unreserved selection and concentration of existing businesses,” we implemented various measures to reduce fixed costs, stabilize businesses, and pursue an optimal business portfolio. Such measures included strengthening the optical cable total solutions business, selling subsidiaries in the energy business, stringent selection of capital investments, consolidation and elimination of locations, and selling real estate. The largest reforms involved splitting off and reorganizing the energy business and flexible printed circuit (FPC) business.
Having implemented the series of initiatives noted above, we believe the end of the operational turnaround phase is in sight and have therefore decided to steer toward the sustained growth phase.

• Change in Director, President and CEO

Masahiko Ito, the Director, President and CEO has taken charge of structural reform, and I have been responsible for pursuing core businesses as COO up to this point.
Since we have reached a certain point of completion in structural reforms and other initiatives in the operational turnaround phase as already noted, I assumed control the Fujikura Group as Director, President and CEO from April 2022. Masahiko Ito is supporting supervision of business management under the new structure as Chairman of the Board of Directors, in a non-executive capacity. The Board of Directors decided this after receiving a report from the Nomination Advisory Committee. Outside directors comprise the majority of committee members on this committee.

• Establishment of Chief Financial Officer (CFO) and Chief Technology Officer (CTO) positions

In addition to the change in Director, President and CEO, we thought it was essential to appoint personnel who have extensive expertise in corporate finance and technological development, areas requiring an extremely high level of expertise, and who can execute business from a company-wide perspective. These qualities are necessary for a manufacturing company that has chosen the Prime Market as its listing market, which will require strong governance and high corporate value.

The extremely large sum spent on capital investment made it difficult to respond agilely to changes in the business environment. We recognize this as a major issue and one of the reasons for the rapid deterioration in performance in FY2019. We therefore designated maximizing corporate value as our mission in future growth strategies and established the position of CFO to strengthen financial discipline out of the perceived need to standardize company-wide investment decisions and strengthen risk management.

We also branded Fujikura as a technology leader and are confident that we achieved penetration in that area, at minimum. Many social changes and technological advancements are likely to occur in the future. I think these will always provide business opportunities to utilize the superb capabilities of the Fujikura Group. We established the position of CTO responsible for formulating company-wide business strategy out of the perceived need to strengthen technological capabilities as a technology leader.

In other words, Fujikura will strive for sustained growth by building a structure that augments part of the functions of the CEO with functions that utilize the financial expertise of the CFO and the technological development expertise of the CTO. This will enable the CEO to fully engage in the pursuit of company-wide strategy.

Fujikura has not appointed executive directors who are equipped with expertise in finance and technology, as is evident in the Skill Matrix included in the Notice of Convocation of Fujikura’s 173rd Annual General Meeting of Shareholders and in the FY2021 Integrated Report. The establishment of the CFO and CTO positions will establish a full line-up of internal directors skilled in company-wide strategy, finance, technology, and global business.

The “new” Fujikura will use this management structure to pursue business that offers the promise of sustained growth. We plan to disclose our new mid-term business plan in May 2023 as the new growth strategy.

All officers and employees in the Fujikura Group will unite to create a new Fujikura. We will take action to promote the continual metabolization of change aimed at transformation and contribute to society by connecting our superb capabilities to the creation of value for customers. I am confident that this will enable Fujikura to grow together with our customers and other stakeholders.
Our entire management team will work to meet the steadily increasing expectations of our stakeholders in recent years concerning the pursuit of sustainable corporate growth and sustainability. I therefore ask for your continued understanding and steady support in the future.

Naoki Okada
Director, President and CEO