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Message from the President

Photo: Masaaki Ishida

Thank you for your guidance and support for our company.

As the world's leading manufacturer of environmental test chambers, which are essential to the development of advanced technology, ESPEC has been developing business globally. In 2015, we announced our long-term vision "ESPEC Vision 2025," which clarified what the Company should aim for 10 years from now. The consolidated financial targets in the vision call for the Company to achieve sales of over ¥60,000 million in fiscal 2025, operating income of ¥6,000 million or more, and an operating income ratio of at least 10%.

In fiscal 2016, the Company strived to increase sales in overseas markets by further strengthening Group collaboration. At the same time, we worked on strengthening our sales activities in the automotive market in which the development of eco cars, such as electric vehicles, and automated driving technology is accelerating. In terms of consolidated results, net sales increased 1.2% compared with the previous fiscal year to ¥39,507 million, while operating income decreased 7.9% to ¥3,243 million due to deterioration in the cost of sales ratio, mainly reflecting changes in the sales mix. Profit attributable to owners of parent decreased by 7.3% to ¥2,233 million.

Fiscal 2017, the year ending March 31, 2018, marks the final year of the medium-term management plan "Progressive Plan 2017," which will pave the way for ESPEC to realize the long-term vision "ESPEC Vision 2025." The Company's consolidated financial targets for fiscal 2017 are net sales of ¥44,000 million or more and operating income of ¥4,400 million or more (representing an operating income ratio of at least 10%). The current targets for net sales and operating income both exceed the corresponding targets laid out in the medium-term management plan. The Company will strive to further expand sales in overseas markets through the synergies of the ESPEC Group, and will work to expand business domains targeting growth and strategic markets such as food and drug fields centered on automobiles and pharmaceuticals. In addition, the Company will focus on improving profitability by reforming the design and production of customized products that have tended to increase in recent years.

Regarding the annual dividend for fiscal 2017, ESPEC has been aiming to boost shareholder returns and achieve a dividend payout ratio of 40%. We plan to pay an annual dividend of ¥50 per share (a payout ratio of 42.3%), which includes a commemorative dividend of ¥2 to mark the Company's 70th anniversary.

In closing, I would like to thank our shareholders for their continued and steadfast support.

Masaaki Ishida President & Representative Director

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