TOP MESSAGE

June 29, 2023

Dear All,
We would like to thank all of our stakeholders for your continued support of the SANYEI group.

Looking back at the fiscal year ended March 31, 2023, since the domestic economy in Japan started to move from the protracted COVID-19 pandemic to a new living lifestyle in the COVID-19 environment, the Company managed to achieve a significant improvement in earnings by capturing the demand recovery trend to increase revenue, and by working on structural reforms in the business to successfully reduce costs.

However, on the other hand, the environment remains unstable due to such factors as the prolonged situation in Ukraine, the impact of higher raw material prices, fluctuations in the currency exchange rates, and the rampant inflation in global. Under these circumstances, the Group has recognized that it is essential to continue strengthening and reviewing the business structure since the company identifies the fiscal year ending March 31, 2024, as a year for solidifying the foundation to make its profitability to be sustained.

As mentioned above, the three years of the COVID-19 pandemic were an important period for the company to manage the rapidly growing uncertainties surrounding our supply chain, including procurement of raw materials, manufacturing, logistics, sales, and foreign exchange rates. The overall balance of the Group's business portfolio deteriorated, and the extreme decline in consumer spending revealed the fragility of the management strategy of focusing on sales and expanding the store assets with a high break-even point.

At the same time, however, the Company was able to reconfirm within this period the universality of the values of "health and the environment," which have been the Group's longstanding theme, and the importance of "monozukuri" (manufacturing), which has been the Group's predominant strength from the past.

Also, we have announced "the formulation of the medium-term management strategy" that contains the Company's long-term vision on May 23, 2023.
We aim to establish a strong presence in the lifestyle goods sector, focus on improving profitability, and achieve an ordinary profit of at least 4 billion yen (ordinary profit margin of at least 7%) by the end of the decade, and position our medium-term management strategy "SANYEI 2025" is a milestone toward achieving this goal.

The following four measures are specific priorities for responding to changes and consolidating a new phase of growth.

First, we will continue to review the Group's business structure and business portfolio.

Second, we will promote new initiatives promptly.
We will achieve a sense of speed as a company that is unique to trading based on a supply chain and does not have a large infrastructure. Also as we explained last year as our growth driver, we will expand the Internet business and strengthen in developing overseas markets in terms of both production and sales.


Third, we will enhance "work-life balance."
We will further improve the working environment. As a company that handles daily necessities, we believe that we must enhance the work efficiency and productivity of our employees, who are also consumers, as well as enrich their lives.

Fourth, we will strengthen governance.
We will further enhance both our offensive and defensive governance systems by improving the earning capability of each individual and organization, and establish our position as a sustainable company.

Furthermore, we consider it important to contribute to the realization of a sustainable society, and we aim to enhance our corporate value by responding specifically and sincerely to the recent expansion of social demands to reduce environmental burdens, and to become even more of a sought-after company by initiating the branding of "SANYEI".

The COVID-19 pandemic is finally beginning to settle down, bringing about a further acceleration of changes in the world. As a company with the business domain of lifestyle goods, we reconfirm the corporate philosophy of "Zui-en," which we have held since our founding, and reaffirm the commitment to our corporate vision: "Enhancing health and enriching life through lifestyle goods". We will proactively promote new initiatives promptly by having perspectives of only as employees but also as consumers.

Once again, We sincerely appreciate all of our stakeholders for your continued support and encouragement of the SANYEI Group.

Yours Sincerely,

President & CEO
MASAKI MIZUKOSHI