July 15, 2016,11:15 +0900(JST) On the Day of Our Ordinary General Meeting of Shareholders, in the UK...

A general meeting of shareholders is a valuable opportunity for us to communicate with shareholders directly. This year, despite the hot weather, more than 800 shareholders attended the meeting. I would like to take this opportunity to express my sincere appreciation.

At the general meeting, we delivered reports on our business performance, audit results, and other topics. Afterwards, as usual, we received several questions.

The meeting happened to be held in the middle of the voting for the national referendum of the UK to decide whether the nation should leave the EU or not. Accordingly, some of the questions from our shareholders were related to expected influence on Sumitomo Electric if the country should decide to withdraw from the EU.

Partly because I used to work in London, I carefully watched the country's historic "choice of destiny." As you may know, the result of the vote counting that garnered worldwide attention is to "Leave." It is hard to say yet what types of influence this decision by UK voters will have on global politics and economies. It is expected that Japanese companies will also be affected more than a little in such areas as future foreign exchange, stock prices, and customs.

The European Constitution will continue to be effective for two years even after the UK applies to leave the EU and concludes the necessary agreement with the EU. During this period, at Sumitomo Electric, we would like to identify future trends carefully, and make an appropriate response to each concern.

June 30, 2016,11:50 +0900(JST) Facility Tour to Hokkaido Together with Business Partners

Inviting business partners and other associates who provide cooperation supporting our technologies and products mainly related to copper, aluminum and optical core wire, we hold an annual tour to one of our related facilities, together with an information exchange meeting and an interaction session.

This year, on June 10, we hosted representatives invited from 21 companies, on a tour to our demonstration facility located in the Minami-Hayakita substation of Hokkaido Electric Power Co., Inc. (HEPCO), where we had introduced our redox flow battery system. Since the completion of its installation last December, this large-scale storage battery system has been undergoing a three-year demonstration experiment.

On the day of the tour, an outline of the facility was provided at a newly established presentation room for facility visitors, before they were shown around the entire facility. Some participants commented that the tour proved that our technology would help extend the use of renewable energy, and others said that they had realized how large scale the demonstration experiment was. In my opinion, the tour served as a valuable opportunity to help participants understand the significance of this demonstration project.

At a general session, we presented trends in the electric wire industry and our current situation, and also exchanged opinions with participants in a frank atmosphere. As usual, the event was truly significant.

  • In the presentation room of Minami-Hayakita substation
    In the presentation room of Minami-Hayakita substation
  • Addressing the general session
    Addressing the general session

June 17, 2016,14:00 +0900(JST) Endless Efforts

I attended the President's Awards ceremony for Improvement Proposals.

Designed to encourage employees to improve their daily operations by demonstrating originality and ingenuity as teams or individuals, the awards are given after a screening process to those who have implemented activities that have contributed to invigorating their workplaces.

In FY 2015, of approximately 50,000 submitted proposals, six themes that had survived the screening in each workplace and region were selected for the President's Awards.

Although recipients looked nervous at the award ceremony, they seemed relaxed at the subsequent party, where I was able to listen to each of them talk about some clues to the improvements they had made, as well as ingenuity they had demonstrated and troubles they had encountered.

What is the key in improvement activities is to work on operations always with awareness of problems, such as "Are there any ways to spend less time and effort and to enhance efficiency?" and "Are there any ways to reduce defects?" It is also important to have the capabilities and strong determination to carry through until the problem is solved.

I hope that the recipients will continue being leaders in their workplaces, foster those who will follow their lead, and demonstrate their capabilities in invigorating their workplaces.

  • At the award ceremony
    At the award ceremony
  • Commemorative photo taken after the party
    Commemorative photo taken after the party

May 24, 2016,09:00 +0900(JST) Attended the IWCC General Assembly and Joint Meeting in Cape Town

From May 8 to 11, I attended the International Wrought Copper Council (IWCC) General Assembly and Joint Meeting, which was held in Cape Town, South Africa. Held annually, the event draws representatives from a variety of parties connected to the copper industry, such as from mining companies, refining companies, fabricating companies, trading firms, exchanges, and government agencies. In the event, participants exchange opinions on a wide range of topics such as technological progress, situations in the industry, and global economic trends.

At this year's event, partly because the host country was South Africa, many presentations were given regarding the African economic and political situations, with an emphasis on the region's mining activities. This made me reflect deeply on my lack of daily efforts to keep up with the African political, economic, and social situations.

The event attracted more than 200 participants from around the world, including about 30 from Japan. They paid much attention to changes in the price trends of commodities in general, especially copper price trends.

Rapid price changes have a considerable impact on fabricating companies. There is no option but to accept structural changes in the entire industry, such as changes of the management policy of the London Metal Exchange (LME) and the speculative entry of different industries into the market. However, each related sector needs to make some kind of contribution and do its best to ensure sound development of the copper industry.
In particular, it is necessary to recognize with a sense of crisis that customers, who are the end users, are keenly aware of the instability of the copper market, and are seriously considering substitutes. As indicated by the LME warehousing problem, some people care only about themselves, but I have always asserted that this attitude is never acceptable in terms of sound development of the copper industry. Still, since the interests of each party concerned are interrelated in a complicated manner, it is difficult to solve the problem.

At Table Mountain and Signal Hill, commanding a panoramic view of Cape Town
At Table Mountain and Signal Hill, commanding a panoramic view of Cape Town

May 23, 2016,15:30 +0900(JST) FY 2015 Business Results

On May 13, we announced to the public our FY 2015 business results.
Our business results on a consolidated basis for FY 2015 were as follows: net sales of 2,933.1 billion yen; operating income of 143.5 billion yen; and ordinary income of 165.7 billion yen, with all the figures showing an increase from the previous fiscal year. Net sales, up 110.3 billion yen from the previous fiscal year, marked a record high for the second consecutive fiscal year. Meanwhile, net income attributable to owners of the parent decreased to 91 billion yen from FY 2014, when extraordinary profit was generated by the sale of our shares in Sumitomo 3M (currently 3M Japan). Although all the net sales, operating income, and ordinary income fell short of the announced forecasts, net income attributable to owners of the parent exceeded the forecast figure. This is largely thanks to your generous support, and I would like to express my deep appreciation to you all.

We announced our forecasts for FY 2016 consolidated results as follows: net sales of 2,950 billion yen; operating income of 160 billion yen; ordinary income of 185 billion yen; and net income of 100 billion yen.

It is less than two years before the deadline that we set under our mid-term business plan VISION 2017 to accomplish the targets including net sales of 3,300 billion yen and operating income of 200 billion yen. Our forecast figures for this fiscal year serve as a milestone toward the accomplishment of the targets.
Meanwhile, looking at the economic situation since the beginning of this year, I feel that although the economy was on a gradual recovery trend before, the uncertainty over the future is now evidently increasing due to a wide variety of risk factors. With this backdrop, I have disseminated to employees my message saying that nothing is more important than to vigorously promote improvement in terms of SEQCDD (Safety, Environment, Quality, Cost, Delivery, and Research and Development), which underpins the operations of manufacturers, and to establish an even more robust corporate structure to enable us to withstand environmental changes.

We look forward to again receiving your continued support this fiscal year.

【FY 2015 Business Results】

(Millions of Yen)

  2014 2015 Change
Net Sales 2,822,811 2,933,089 110,278
Operating Income 134,457 143,476 9,019
Ordinary Income 160,597 165,658 5,061
Profit Attributable to Owners of the Parent 119,771 91,001 ▲28,770

【Forecasts for FY 2016 Business Results】

(Millions of Yen)

  Net Sales Operating Income Ordinary Income Profit Attributable to Owners of the Parent
At Year-End 2,950,000 160,000 185,000 100,000
Fact Book FY2015 4th Edition [PDF:1.1 MB]

SUMITOMO ELECTRIC President CEO Masayoshi Matsumoto

Born in 1944 in Hyogo Prefecture, Masayoshi Matsumoto joined Sumitomo Electric in 1967. After serving as General Manager of Chubu District Office, Managing Director and Senior Managing Director, he assumed office of President and CEO in June 2004.

His leisure activities include jogging, reading and art appreciation. Also a seasoned athlete, he played baseball in junior high school and practiced judo in senior high school. In university, he threw the javelin competitively and participated in all-Japan inter-university competitions.

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