I wish you all a Happy New Year.

Japan enjoyed a longer-than-usual year-end/New Year holiday this year, as was the case last year. I hope that you have been able to refresh your spirits and are ready to begin the New Year today with a renewed mindset. As we start the New Year, I would like to share a few words of greeting with members of the ITOCHU Group in Japan and around the world. Last year, the yen-U.S. dollar exchange rate weakened by approximately \15, from around \105 at the beginning of the year, to around \120 at the end of the year. Stock prices rose higher, with the Nikkei Stock Average increasing from \16,291 to \17,450. This reflected the effect of the Japanese government’s “Abenomics” policies. Incidentally, the Nikkei Stock Average hit a low of \13,885 and a high of \18,030 during 2014, a difference of more than \4,000, indicating a year of significant stock price volatility. It was a year when several negative factors also came to the fore, such as a sharp drop in resource prices, slower economic growth in China, and the impact of the consumption tax hike in Japan. Notably, crude oil prices have started to decrease since last summer, along with the recent fall in metal prices. Overall, resource prices are having a tremendous impact on the business performance of sogo shosha. For now, we will need to consider various matters based on the assumption that these conditions will persist.

The year 2015 marks the final fiscal year of the current medium-term management plan, “Brand-new Deal 2014.” Our first priority is to ensure that we steadily accomplish the current plan’s objectives, including hitting the \300.0 billion net income target for the fiscal year ending March 2015. This will enable us to make a strong start to our new medium-term management plan starting from this April.

ITOCHU first achieved a consolidated net income of \300.0 billion in FY2012, gaining our spot as the third largest sogo shosha. Since that time, we have held on to our position in the top three. However, this “third-place position” should be regarded as simply a point we are passing as we rise among the ranks of the sogo shosha. The instant we feel complacent about being in third place, ITOCHU will start to decline. Rather, we must persistently aim to become the industry’s leading player, and we must always continue to rise to the challenge of hitting high targets. There is still quite a gap in earnings between the top two companies and ITOCHU. On the other hand, currently the business environment surrounding trading companies has been changing dramatically. The essence of these is that the resource market, which had seen a temporary boom, has been calming down. ITOCHU is being affected by this, but the top two trading companies that are more highly dependent on the resource sector are being impacted much more. In recent years, ITOCHU has been focusing on the non-resource sector, with particular emphasis on the consumer-related sector. FY2014 earnings in the non-resource sector have rapidly expanded to approximately \250.0 billion, around 3.3 times the FY2011 earnings in this sector. With the resource boom cooling down, I think now is a good opportunity for us to further capitalize on the strengths of our non-resource earnings and thereby raise our ranking still higher. Our new medium-term management plan, which starts from FY2016, is scheduled to last for three years. During this period, I want ITOCHU to set for itself the clear targets of gaining our places as one of our industry’s leading companies and establishing our position as the company that best represents the sogo shosha.

I am happy to say that ITOCHU is steadily coming up with one idea after another to help achieve these significant targets. Keep in mind, however, that there is a great difference between the results achieved by a person who has a strong belief that they can achieve a goal if they try hard and those of a person who doesn’t expect that they will be able to achieve it. I urge all of you to summon the steadfast spirit and sturdy self-confidence that will enable you to do the good work of the first type of person, with the aim of making ITOCHU the industry leader. If you do so, I am certain we will achieve outstanding results. This year is an extremely important one during which we will start moving quickly with our efforts to become top player of the trading company sector. I ask everyone to boldly take on this new challenge of achieving even better results. Let’s all work together to make this “The era when ITOCHU is number one.”