On 4 January, Keita Ishii, President & COO of ITOCHU Corporation delivered his New Year’s message to employees.

First, I would like to extend my heartfelt condolences to the friends, families and loved ones of the people who lost their lives due to the 2024 Noto Peninsula Earthquake that occurred in Noto area of Ishikawa Prefecture on the New Year's Day. I also wish to express my deepest sympathies to all the people who have been affected by the disaster, including people working for FamilyMart in Hokuriku.

As we start the new year, I would like to say a few words to all members of the ITOCHU Group around the world.

Looking at the current economy, the belt-tightening in the U.S. is about to end, and FRB is signaling at the moment that it will cut interest rates three times in 2024. On the other hand, in Japan, Governor Ueda of the Bank of Japan, who took office last year, is looking for the right time to end the negative interest rate policy. It is expected that the interest rate gap between Japan and the U.S. will be reduced and the excessive depreciation of the yen will be redressed. We are accustomed to a deflationary economy and zero interest rates, but we need to grow out of this swiftly, and have a strong awareness of a world with positive interest rates.

This year is also a year of elections, when presidential elections and general elections are scheduled to take place in many countries and regions. I believe that results of the elections will significantly impact the future global economy. The first election is the presidential election in Taiwan, which will take place in January. This will be followed by elections in Indonesia, Russia, South Korea, India, Mexico and European Parliamentary elections. In November, the US presidential election, which attracts attention from all over the world, is scheduled to occur. Above all, it is likely that the results of this US election will greatly influence the direction of the world, including US policies for addressing geopolitical problems, relationship with China, involvement in the Middle East, and stance on decarbonization. If Mr. Trump wins the election, there will be concerns about protectionism and quid pro quo diplomacy under an America First policy as well as radical restrictions imposed on China solely by the US, among other possibilities. While it is also expected that the existing supply chains involving China may suddenly cease to function, it is necessary that we predict change accurately and carefully prepare, including securing other supply sources and formulating contingency plans.

In these circumstances, the Brand-new Deal 2023, our Medium-term Management Plan has finally come to the final corner. Having achieved consolidated net profit of 600.0 billion yen, our initial target, as early as in the first fiscal year of the plan, we have already shifted our focus to the establishment of a stage of our business with revenue of more than 800.0 billion yen, which will be achieved by posting revenue of 800.0 billion yen for the third consecutive year. The current Medium-term Management Plan started during the COVID-19 pandemic, which resulted in many restrictions on activities. Since the COVID-19 pandemic subsided, our business environment has been growing extremely chaotic, with the violent fluctuation of commodity prices, supply chain disruptions and global inflation, which have been caused by the Russian invasion of Ukraine as well as the prolonged stagnation of the Chinese economy, the conflict between Israel and the Islamic group Hamas and other events. However, our revenue has steadily been increasing despite the major changes in the environment. Our earnings platform, which does not rely excessively on resource revenue and is tolerant of economic fluctuations, has been evaluated highly by the market. This and the expectations for our future growth are fully reflected in our stock price. I think that there are two driving forces behind ITOCHU's strong earnings platform.

The first is the solid growth potential of the Division Companies and operating companies. During the period of the current Medium-term Management Plan, record-high profits were achieved by the General Products & Realty Company and the ICT & Financial Business Company in FY2021 and by the Machinery Company, the Metals & Minerals Company and the Energy & Chemicals Company in FY2022. The operating companies have also grown steadily, with 67 of the 232 companies having achieved record-high profits in the first half and the percentage of companies reporting profits having remained as high as 84.1%, among other achievements. I am feeling once again that the sources of our growth are the ITOCHU Group's cohesion, the leadership of management, and further, the insatiable ambition and desire to take on new challenges of all of the employees.
　
The other driving force is hands-on management and the effective investment strategy. DESCENTE, FamilyMart, and HOKEN NO MADOGUCHI have had strong results. This has resulted from not only a mere increase of capital but down-to-earth management improvements, which were implemented steadily by managers entering the front lines themselves to be hands-on in their management. We have also steadily made strategic moves which are expected to begin contributing to revenue next fiscal year, such as an equity investment in Hitachi Construction Machinery, an initiative that we implemented in recent years, taking CTC and DAIKEN Corporation private and securing interests in high-grade iron ores that are the raw material for reduced iron. We would like to continue aiming for the continued enhancement of a stronger earnings platform with hands-on management including the management of the Group and our front-line capabilities, which are our strengths.

This fiscal year, we have also been focusing on initiatives involving non-financial aspects of the business. Each administrative division worked to strengthen it by setting specific targets. As a result, a series of external evaluations included us in the top sogo shosha. First, I will talk about the ranking of the companies that the students graduating in 2024 most want to work for. ITOCHU was ranked first among sogo shosha for the fourth consecutive year in the rankings by all the seven major media firms and ranked first among all industry sectors for the second consecutive year in rankings by four of them. We were also ranked first among sogo shosha and among all industry sectors in all of the latest rankings of the companies that the students graduating in 2025 most want to work for that have already been announced by three major media firms.

Regarding IR-related initiatives, we won a Gold Award in the WICI Japan Integrated Report Award 2023, the fourth consecutive year we have done so, which we believe is most important. We were also selected as the single recipient of the Best Gold Award because our evaluation was outstanding compared to the other winners of the Gold Award. We have also been evaluated extremely highly by three important award programs related to IR websites, having been evaluated most highly among all industry sectors in two of them and ranked second among industry sectors in the remaining one. In relation to ESG, we won the highest award for the third consecutive year in Broadband Security's Gomez ESG Site Rankings. At the same time, in the Sustainability Category of Daiwa Investor Relations Co. Ltd.'s Internet IR Award, we won the Grand Prize, which is the top award among all industry sectors, this fiscal year while we fell behind Mitsui & Co. last fiscal year. In addition to the above, in the Nikkei ranking of companies with high capabilities in legal affairs selected by lawyers, we made a great leap forward from sixth place last year to first place among all industry sectors, the first time we have achieved this. This was reported in an article of The Nikkei newspaper and received great response. Thus, our non-financial initiatives have steadily led to achievements.

Finally, we are in a turbulent era where the things that are common sense today may not be common sense tomorrow. In this era, our true abilities will be tested, but I would like you to be confident. We have overcome environmental changes, taken them as opportunities, and connected them to businesses hungrily, having achieved the "triple crown" in FY2020 and a leap forward to consolidated net profit of 800.0 billion yen during the period of the current Medium-term Management Plan. No matter which way the winds of the economy may blow or the election results may turn, let us resolve once again to regard changes as business opportunities and respond to them agilely, as described by the "A merchant should be water" statement that we have been practicing. And I would like you to aim to be tough merchants who go to the front lines ahead of others, get firsthand information and take other initiatives to ensure a thorough hands-on approach, thereby certainly capturing business opportunities. Let's continue to enhance our corporate value to be the best company in Japan by turning to our customers, carefully capturing the businesses at hand, increasing revenue steadily, attempting to enter the stage of having revenue of more than 800.0 billion yen, and continuing to strengthen the non-financial aspects of our businesses as well, in ITOCHU's own way again in 2024.

I would like to conclude my new year's message by wishing the ITOCHU Group further success and prosperity in business and wishing ITOCHU Group employees across the world and their families good health and happiness in the coming year.