Message from Top Management

□ Message to Shareholders

We would like to express our sincerest gratitude to all of the shareholders who have continued to support us.
We would like to report our business results for fiscal year 2021 (73rd fiscal year) andthe initiatives taken by our group.

□ Business Situation and Outcomes

The global economic environment in the current fiscal year has been characterized by a recovery trend in economic activity along with the spread of vaccinations. However, inaddition to prolonged supply chain problems such as container shortages in marine transportation and shortages of electronic components, especially semiconductors, many countries have raised policy interest rates due to rising inflationary pressures.
Furthermore, Russia's invasion of Ukraine has sharply increased uncertainty about the economic outlook.

Under these circumstances, the Group has promoted measures focused on cash flow, such as improving profitability through innovation in development, manufacturing, and sales, appropriate inventory management, reduction of assets held, and a drastic review of fixed costs. In addition, in view of the prolonged COVID-19 pandemic, we have been reforming our work styles and exploring new management styles under the new normal, such as sales activities utilizing the Internet.

In the the design and measurement equipment business and the 3D printer business, the MUTOH Package for educational institutions, which provides total services from CAD to 3D output, has been commercialized through new collaboration between the two businesses, and will be marketed as a solution to meet the needs of digital education. In addition, we consolidated the manufacturing of our main products at the Suwa Plant (Nagano Prefecture), promoting reforms to improve quality and reduce costs by integrating quality and production management and procurement and leveling production.

Meanwhile, in the large-format inkjet printer business, our core business, two models (XpertJet 1341SR Pro and XpertJet 1641SR Pro) equipped with a new head and compatible with eco-solvent ink were sequentially launched in the global market from September 2021, and have been highly evaluated for their high image quality and highspeed with excellent cost performance.

VerteLith™, our first in-house developed RIP software (software for outputting data to large format inkjet printers), launched in January 2020, has been recognized for its high performance in text and image processing as well as its enhanced features that simplify and streamline the entire workflow for users. In January 2022, the European Digital Press Association, an association of European print magazines, presented VerteLith™ the EDP Award 2021 in the workflow technology category, which awards the best-rated digital printing product or technology in each category, beating out RIPs from other specialized and established vendors for its enhanced functionality.

As a result of the above, net sales for the current fiscal year were ¥15,848 million (up12.0% year-on-year) and operating income was ¥541 million (compared to a loss of ¥564 million in the same period of the previous year), a significant recovery from the same period of the previous year, which was greatly affected by the spread of new coronavirus infection.
Ordinary income totaled ¥743 million (compared to a loss of ¥291 million in the same period of the previous year), mainly due to a recovery in operating income as well as equity in earnings of affiliates. Net income attributable to shareholders of the parent company was ¥773 million (compared with a net loss of ¥1,200 million in the same period of the previous year), mainly due to a ¥679 million gain on sales of fixed assets recorded as extraordinary income, a ¥246 million impairment loss recorded as extraordinary loss, and a total of ¥362 million in income taxes and income tax adjustments.

The full-year forecast for the fiscal year ending March 31, 2023 is subject to the risk of delays and stagnation in procurement, production, sales, and logistics, as well as rising prices, due to the invasion of Ukraine by Russia, problems in suppliers' parts supply and marine transportation delays due to the COVID-19 pandemic. The Group will work on business structure reform with the most important task to improve full-year operating income/loss by continuously increasing revenue and establishing a stable profit base.
As a result of the above, we project net sales of ¥16,100 millio, operating income of ¥400 millio, ordinary income of ¥400 million, and net income attributable to owners of the parent of the company of ¥100 million.

We greatly appreciate your support and ask for your continued assistance and cooperation.