ANNUAL REPORT 2018
YEAR ENDED MARCH 31, 2018

01

HEL
NEW
WOR

LLO!
LO!
W
RLD.

02

03 03

Overview

Business Review

Business Review

Basis for Growth

Basis for Growth

Financial Information

Financial Information

Corporate Information

Corporate Information

heThe
auto
industry
is about
to undergo
a majortransformation
as researchandanddevelopment
intointo
auto
industry
is about
to undergo
a majortransformation
as researchdevelopment
areas
such
as autonomous
driving,
sharing
electrification
continue
to progress.
To swiftly
reas
such
as autonomous
driving,
carcarsharing
andandelectrification
continue
to progress.
To swiftlyndand
flexibly
respondto theaccelerating
paceof change,
Sumitomo
Electric
is strengthening
its its
flexibly
respondto theaccelerating
paceof change,
Sumitomo
Electric
is strengthening
development
capacityof in-vehicle
components
andandsystemsusing
intelligent
transportsystems
development
capacityof in-vehicle
components
systemsusing
intelligent
transportsystems
ITS),
which
connect
people,vehiclesandandsociety.
WeWewillwillcontinue
to leadthethewaywayin contributing
to to(ITS),
which
connect
people,vehiclessociety.
continue
to leadin contributing
safe,
secureandandcomfortablenext-generation
motorized
society.
a safe,securecomfortablenext-generation
motorized
society.

Overview

HELLO
HELLOTOTOAASAFE,
SAFE,SECURE
SECUREAND
ANDCOMFORTABLECOMFORTABLE
NEXT
NEXT--GENERATIONGENERATIONMOTORIZEDMOTORIZEDSOCIETY.
SOCIETY.

04 04

HELLOHELLOTOTOAASOCIETY
SOCIETYWITH
WITH
AN
ANADVANCEDADVANCED
ELECTRICAL
ELECTRICALINFRASTRUCTURE.
INFRASTRUCTURE.

TheThe
world
world
faces
faces
rapidlyrapidly
increasing
increasingenergyenergydemanddemandandandenvironmental
environmental
problems
problems
primarily
primarily
in inemerging
emerging
economies.
economies.
AcrossAcrossthetheglobe,
globe,
there
there
is an
is increasing
an increasing
environmental
environmental
consciousness
consciousness
andandheightenedheightened
expectations
expectations
for forthethesafesafe
andandsecuresecuresupplysupplyof energy.
of energy.
AgainstAgainstthisthisbackdrop,
backdrop,
Sumitomo
Sumitomo
Electric
Electric
looks
looks
to attain
to attaina societya societythatthathashasin placein place
advanced,advanced,high-quality
high-quality
power
power
infrastructure
infrastructure
throughthroughthetheconstruction
constructionof systemsof systems
thatthatleverageleverage
renewable
renewableenergyenergyto itsto fullest
its fullest
extentextentandandthroughthroughproduction
productionof powerof power
cablescablesandandother
otherrelatedrelatedproducts.
products.
05 05

Overview

Overview
Business Review

Business Review
Basis for Growth

Basis for Growth
Financial Information

Financial Information
Corporate Information

Corporate Information

06 06

HELLOHELLOTOTOAASUPERSUPER--SMART
SMART
SOCIETY.
SOCIETY.
As As
Sumitomo
Sumitomo
Electric
Electric
finds
finds
ourselves
ourselvesin thein theFourthFourthIndustrial
Industrial
Revolution
Revolution
throughthroughthetheadvancement
advancementof IoTof IoT
andandAI, AI,
information
information
andandtelecommunications
telecommunications
infrastructure
infrastructureis anis extremely
an extremely
importantimportantpart
partof supportingof supportingsocialsocialchangechangeandandcreating
creating
additional
additional
value.
value.
WeWe
arearecommitted
committed
to theto thedevelopment
developmentof technologies
of technologies
thatthat
willwill
supportsupporthigh-speed
high-speed
opticalopticalaccessaccessandand5G 5G
wirelesswirelessconnectivity,
connectivity,
responding
responding
to various
to various
needs
needs
from
from
all around
all aroundthetheworld
world
andandcontributing
contributing
to ato asuper-smart
super-smart
societysociety
where
where
all people
all people
cancanlivelivea comfortablea comfortable
life.life.

07 07

Overview

Overview
Business Review

Business Review
Basis for Growth

Basis for Growth
Financial Information

Financial Information
Corporate Information

Corporate Information

08 08

09

To Our Stakeholders

Basis for Growth
Financial Information
Corporate Information

markets. Moreover, with regard to electronic wires and irradiation
tubes, we will accelerate the reinforcement of global production
and marketing.
In the environment and energy segment, we will strengthen the
manufacturing of power cables, and further proceed with cost
reductions and quality improvement. We will also endeavor to
improve profitability by winning orders for both domestic andinternational large-scale power cable projects and capturing someof the increased demand related to the renewal of outdated
facilities. In addition, we will continue to expand our marketing offlat magnet wires for motors used in electric vehicles, and also
focus on expanding business related to renewable energy andsmart grids, while taking advantage of the integrated capabilitiesof the Sumitomo Electric Group, including Nissin Electric Co., Ltd.
and Sumitomo Densetsu Co., Ltd.
In the industrial materials segment, with regard to cemented
carbide tools, we will strive, more than ever before, to capture
domestic and international demand by increasing production
capacity. In addition, we will strengthen our development andmarketing of new products for the machining of difficult-to-cut
materials for not only the main automotive field but also the fieldsof aircraft and energy. We will also work to further strengthen thedomestic and international supply of sintered components, andfocus on expansion of the global production and marketing ofprestressing steel strands and precision spring steel wires.
In research and development activities, we will make efforts tocreate new businesses and products that are original and excel in
profitability. This includes the acceleration of developing redox
flow batteries, concentrator photovoltaic systems, and Power Line
Communication applications, with the aim of establishing a newelectricity/energy infrastructure, and the commercialization ofsuperconducting products, magnesium alloy products, water-treatment systems, devices for next-generation communication network,and large-capacity data transmission cables. Taking a long-term
perspective, we will leverage the Group’s strengths to develop
new products in response to society’s needs, including advanced
traffic safety systems and searching for new materials with new
functions.

Business Review

In these circumstances, we will continue to operate based on the
Sumitomo Spirit and the Sumitomo Electric Group Corporate
Principles, and strive for further evolution of SEQCDD (safety,
environment, quality, cost, delivery, and development & research).
We will accelerate efforts particularly for further reinforcement of
the corporate structure, globalization, and prompt commercialization of products, and devote ourselves to the realization of“VISION 2022,” the medium-term management plan launched in
FY2018, by marshalling all of the forces of the Sumitomo ElectricGroup. To this end, we will pursue the following strategies in eachof our business segments.
In the automotive segment, striving to become a mega supplierwith wiring harnesses as its core, we will accelerate the development and marketing of high-voltage wiring harnesses andbattery-related products designed for electric vehicles,
high-strength aluminum wiring harnesses that are light and excel
in durability, and electronic components and connectors forhigh-speed communication corresponding to electronic control of
automobiles. In addition, aiming to expand our market share foroverseas customers, we will strengthen our product development
capabilities through reinforcement of cooperation within the
Sumitomo Electric Group and collaboration with other companies,in anticipation of popularization of electric vehicles, automateddriving, and connected cars, and work to further expand ourbusiness. Sumitomo Riko Company Ltd. will endeavor to extend its
marketing efforts by taking advantage of sales and development
bases that extend globally in the field of automotive anti-vibration
rubbers and hoses, and also work on developing new products fornext-generation vehicles.
In the infocommunications segment, we will continue to capture
global demand for optical fiber cables, 100 Gbps high-speed
optical devices, and Gallium Nitride (GaN) devices for mobile
phone base stations. We will also proceed further with the marketing of ultra-low loss optical fibers for submarine cables andultra-high-fiber-count optical fiber cables for data centers. In
addition, we will focus on responding to the increase in demandfor optical fibers and next-generation optical/electronic devices,in line with an increase in communication data volume as a resultof the development of a fifth-generation mobile communications
system, expansion of video streaming services and cloud services.
In the electronics segment, with regard to FPCs for mobile
devices, we will continue to focus on global marketing, in addition
to thorough quality improvement and cost reductions. Furthermore, by taking advantage of the integrated capabilities of theSumitomo Electric Group, we will work to ensure the launch of
new products that are ultrathin, highly precise and highly heat
resistant, and to expand our business in the automotive and other

Overview

In FY2017 the global economy showed stable growth on the whole, as indicated by, for example, expansionary trends continuing in the U.S.
and signs of recovery in Europe and China. The Japanese economy also continued to show a moderate recovery due to an increase inexports and capital expenditure. Owing to such factors as the effects of U.S. economic policy and geopolitical risks, however, the outlook
continues to be unpredictable.
Regarding the business environment for the Sumitomo Electric Group, because of an increase in production of automobiles by carmakers,
mainly overseas, the demand for wiring harnesses, powder alloys, and sintered components showed steady growth, and the demand for
infocommunications products, such as optical fiber cables, also grew. In this environment, the consolidated financial settlement for FY2017
saw revenue increase from the previous fiscal year, as net sales amounted to 3,082,247 million yen (previous fiscal year: 2,814,483 million
yen, up 9.5%). As for profit, due to such factors as the achievement of cost reductions for flexible printed circuits (FPCs) for mobile devices,in addition to an increase in demand, operating income was 173,139 million yen (previous fiscal year: 150,503 million yen, up 15.0%), ordinary
income was 195,010 million yen (previous fiscal year: 173,872 million yen, up 12.2%), and profit attributable to owners of the parent was
120,328 million yen (previous fiscal year: 107,562 million yen, up 11.9%), with each of them showing a year-on-year increase.

September 2018

Osamu Inoue
President and COO

10

FOUNDED
FOUNDED

R&DR&D
EXPENSES
EXPENSES

121
121 117.7
117.7
YEARS
YEARS
AGOAGO¥¥BILLIONBILLION

SinceSince
its founding
its foundingin 1897,
in 1897,
the Sumitomo
the Sumitomo
Electric
Electric
Group
Group
has hasFromFrom¥48.5¥48.5
billionbillion
in FY2002
in FY2002and ¥73.2
and ¥73.2
billionbillion
in FY2007,
in FY2007,
the theexpanded
expandedand developed
and developed
its businessits businessdomaindomainby developing
by developing

Sumitomo
Sumitomo
Electric
Electric
Group
Group
continues
continues
to invest
to invest
in R&D.
in R&D.
We We

proprietary
proprietary
technologies
technologies
based
based
on copper
on copper
wire manufacturing
wire manufacturingpromotepromoteinnovation,
innovation,
regardingregardingthe great
the greatchangeschanges
underwayunderwayin intechnology
technology
and challenging
and challenging
new business
new businessfields.fields.

societysocietyand theandenergy
the energy
sectorsectoras growth
as growth
opportunities.
opportunities.

OVERSEASOVERSEAS
SALES
SALES
RATIO
RATIO

BUSINESS
BUSINESSOPERATIONSOPERATIONS
IN IN

59.7
59.7

40
40

%%

COUNTRIESCOUNTRIES

FromFrom
26.8%
26.8%
in FY2002
in FY2002
and 40.6%
and 40.6%
in FY2007,
in FY2007,
our overseas
our overseas

The Sumitomo
The Sumitomo
Electric
Electric
Group
Group
has been
has been
proactive
proactivein pursuingin pursuingshareshareof salesof sales
now now
surpasses
surpassesthat thatof domesticof domestic
sales.sales.
We We

businessbusiness
expansion
expansion
overseas.
overseas.
Our products,
Our products,
popularpopularwith with

continue
continueto manufacture
to manufacture
products
products
that thatare trusted
are trusted
aroundaroundcustomers
customers
worldwide,
worldwide,
are madeare madearoundaroundthe world.
the world.

the world.
the world.

BUSINESS
BUSINESSLOCATIONSLOCATIONSWORLDWIDEWORLDWIDECONSOLIDATEDCONSOLIDATEDEMPLOYEESEMPLOYEES

286
286 250
250
OVER
OVER

11

11

THOUSAND
THOUSAND

FromFrom
115 locations
115 locations
in FY2002
in FY2002
and 182
andin
182
FY2007,
in FY2007,
we will
we will

PeoplePeopleare thearebackbone
the backboneof ourofbusiness.
our business.
We have
We have
startedstartedto tocontinue
continue
to enhance
to enhance
our businessour businessby increasing
by increasing
businessbusiness

actively
actively
promotepromoteglobalization
globalizationof theof humanthe human
resources
resources

relationships
relationships
with customers
with customers
aroundaroundthe world.
the world.

employed
employedin groupin group
companies
companies
in Japanin Japanand overseas.
and overseas.

3

NET
NET
SALES
SALES

Overview
Business Review

Business Review

Basis for Growth

Basis for Growth

Financial Information

Financial Information
Corporate Information

Corporate Information¥¥

TRILLION
TRILLION

Overview

OVER
OVER

12

12

Net sales
Net sales
havehave
grown
grown
steadilysteadilyfromfrom¥1.5 trillion¥1.5 trillion
in FY2002
in FY2002and ¥2.5and ¥2.5
trilliontrillionin FY2007.
in FY2007.
We We
continue
continue
to betoanbe
industry
an industry
leaderleaderin theincreation
the creationof newof newbusinessbusinessmodelsmodelsthat that
anticipate
anticipatechangeschangesin thein themarketmarketenvironment.
environment.

PROFILE
PROFILEandandHISTORYHISTORY
Since
Since
being
being
foundedfoundedin 1897,
in 1897,
the Sumitomo
the Sumitomo
Electric
Electric
Group
Group
has built
has built
a strong
a strong
historyhistory
overover
these
these
120 years.
120 years.
In keeping
In keeping
withwiththe Sumitomo
the Sumitomo
businessbusinessspirit,spirit,we have
we havealwaysalwayspursuedpursuedthe most
the most
advancedadvanced
technology
technologythat that
underpins
underpins
the foundations
the foundationsof societyof society
and andindustryindustryin everyin everyera, andera, and
havehave
providedprovidedsupportsupportfor thefor development
the developmentof modernof modern
Japan.
Japan.
Today,
Today,
the fields
the fields
in which
in which
we areweactiveare active
spanspanthe globe,
the globe,
and andwe weare usingare usingour ourcapabilities
capabilities
to help
to help
resolve
resolvesuchsuchissuesissuesas theas rapid
the rapid
urbanization
urbanizationof emerging
of emerging
countries
countries
and andwe provide
we provide
increasingly
increasingly
sophisticatedsophisticatedinfrastructure
infrastructure
in developedin developed
countries,
countries,
as we
asare
we called
are called
uponuponto maketo makea broadera broader
contribution
contribution
to social
to socialprogress.
progress.

1890s
1890s

1890s
1890s

In 1897,
In Sumitomo
1897, Sumitomo
Electric
Electric
was founded
was foundedas Sumitomoas Sumitomo
CopperCopperRolling
Rolling
Works,
Works,
marking
marking
the beginningthe beginningof of
the Company’s
the Company’s
history.
history.
The Company
The Company
began
began
by by
manufacturing
manufacturing
coppercopperelectric
electric
cables,cables,contributing
contributing
towardtowardthe development
the developmentof domesticof domestic
production
productionof high-voltageof high-voltage
undergroundunderground
power
power
transmission
transmission
cables,cables,whichwhich
had all
had
been
all been
imported
imported
up toupthatto thattime.time.

In 1922,
In 1922,
the Company
the Company
succeededsucceededin manufacturing
in manufacturing
and laying
and laying
a submarine
a submarine
cablecablefrom from
NiihamaNiihama
in
in
Ehime
Ehime
Prefecture
Prefecture
to Shisakajima.
to Shisakajima.
At 21 Atkm,
21itkm,wasit wasthe longest
the longest
cablecableof its oftype
its typein theinworld.
the world.
Buffeted
Buffetedby violent
by violent
storms,storms,the cable
the cable
used usedin thisindifficult
this difficult
project
project
was dogged
was dogged
by faults
by faults
causedcausedby droppingby dropping
resistanceresistancein theininsulation
the insulation
and requiringand requiring
repeated
repeated
repairs.
repairs.

Photo by
Photo
courtesy
by courtesyof Sumitomoof Sumitomo
Historical
Historical
Archives
Archives

Photo by
Photo
courtesy
by courtesyof Sumitomoof Sumitomo
Historical
Historical
Archives
Archives

1900s
1900s

1910s
1910s

1910s
1910s

Develops
Develops
contact
contact
wires.wires.
The first
Thegeneration
first generationof thisof thisproduct
product
was supplied
was suppliedin 1916in to
1916
thetoCity
the of
City
Tokyo,of Tokyo,the present-day
the present-day
TokyoTokyo
Metropolitan
Metropolitan
Government.
Government.
SinceSince
then,then,in additionin addition
to supplying
to supplying
domestic
domestic
railways,railways,
the Company
the Company
also suppliedalso supplied
the entire
the entire
TaiwanTaiwanHigh High
Speed
Speed
Rail network,
Rail network,
whichwhich
began
began
operatingoperatingin 2007.
in 2007.
In thisInway,
this weway,contribute
we contributeto theto thedevelopment
developmentof theofrailways
the railways
that arethatindispensable
are indispensablefor daily
for daily
life. life.

Photo by
Photo
courtesy
by courtesyof Toei ofTransportation
Toei Transportation

13

13

1920s
1920s

1920s
1920s

1930s
1930s

1940s
1940s

1930s
1930s

1950s
1950s

1930 1930
saw thesawstart
the startof theofResearch
the Research
Division,
Division,and andthe development
the developmentof newof newproducts
products
accelerated.
accelerated.
The product
The productlineuplineupof theofcurrent
the current
mainstaymainstaybusinesses
businessesof theofGroupthe Group
werewerebuilt built
on technology
on technology
born born
at atthis time.
this time.

The The
strength
strengthof ourof Group
our Group
lies in
lies
a in
deep
a deepunderstanding
understandingof customerof customer
needs
needs
acrossacrossa widea widerange
range
of industries,
of industries,
includingincludingautomotive,
automotive,
information
information
technology,
technology,
electronics,
electronics,
environmental
environmental
energyenergyand andindustrial
industrial
materials,
materials,
and andin drawing
in drawing
together
together
and andprovidingprovidingsolutionssolutionsfor these
for these
industries.
industries.
We manifest
We manifest
this strength
this strength
throughthrough
repeated
repeated
efforteffortand andinnovation
innovation
to remain
to remaina vitala vitalpresence
presence
for allforourall stakeholders
our stakeholders
aroundaroundthe world.
the world.

We continue
We continue
to moveto moveahead
ahead
with withprojects
projects
that that
supportsupportsocialsocial
infrastructure
infrastructure
both bothin Japanin Japanand overseas,and overseas,
includingincludingdemonstration
demonstration
tests tests
performed
performed
jointlyjointlywith Hokkaido
with Hokkaido
Electric
Electric
Power
Power
Co., Inc.
Co.,atInc.
theatMinami
the Minami
Hayakita
Hayakita
substation
substationfor oneforof
one ofthe world’s
the world’s
largestlargestredoxredox
flow flow
battery
battery
installations,installations,and andwork workby thebyCompany
the Company
and subsidiaryand subsidiary
J-Power
J-Power
Systems
Systemson theondesign,
the design,
manufacture,
manufacture,
cablecablelaying,laying,servicing
servicingand maintenanceand maintenanceof a transmissionof a transmission
cablecablesystemsystemprovidingproviding
unbrokenunbrokenlinks links
betweenbetweenthe UK
the UK
and Belgium.
and Belgium.

Corporate Information

Recently
Recently

Financial Information

Recently
Recently

Basis for Growth

2010s
2010s

Business Review

A communication
A communication
network
network
project
projectin Nigeria
in Nigeriathat that
was awarded
was awarded
to theto Company
the Company
by theby Nigerian
the Nigerian
Ministry
Ministryof Communicationsof Communicationsin 1976
in 1976
was atwasthat
at thattime time
unprecedented
unprecedented
anywhere
anywherein theinworld:
the world:
the thelargestlargesturbanurban
telephonetelephone
network
network
construction
construction
work workorderordertakentaken
on byona singleby a single
company.
company.
Three-hundred
Three-hundred
JapaneseJapanese
employees
employees
and 2,000
and 2,000
local people
local people
workedworkedon thison project,
this project,whichwhich
took took
11.5 years
11.5 years
to gotofrom
go fromorderorder
to completion.
to completion.

2000s
2000s

Corporate Information

1970s
1970s

1990s
1990s

Overview

1980s
1980s

Financial Information

1970s
1970s

The electric
The electric
wiringwiringused usedin wirein harnesses
wire harnesses
in carsinis
cars
typically
is typicallymademadeof copperof copper
becausebecauseof itsof
superior
its superior
conductivity,
conductivity,
but thebutGroup
the Groupdeveloped
developed
new aluminum
new aluminumalloy alloy
wireswires
that thathave havethe same
the same
conductivity,
conductivity,
thoughthoughonly only
half thehalfweight.
the weight.
The aluminum
The aluminum
harnesses
harnesses
mademadefrom fromthesethesewireswires
were werepositively
positively
received
receivedby bothby bothdomestic
domestic
and overseas
and overseas
auto auto
manufacturers,
manufacturers,
and haveand have
now now
beenbeen
adoptedadoptedfor aforlarge
a largenumbernumberof models,of models,thus contributing
thus contributing
to reduced
to reduced
vehiclevehicleweights
weights
and cost.
and cost.

Basis for Growth

60s
1960s

In 1982,
In 1982,
the Company
the Company
succeededsucceededin thein the
single-crystal
single-crystal
synthesis
synthesisof a diamondof a diamondwith witha diametera diameterof 6 ofmm
6 (1.2mm carats).
(1.2 carats).
It was
It waslistedlisted
in thein1984
the 1984
editioneditionof theofGuinness
the Guinness
BookBook
of Recordsof Records
as theas world’s
the world’s
largestlargestsynthetic
synthetic
diamond.
diamond.
In 1989,
In 1989,
we began
we began
volumevolumeproduction
productionof largeof large
single-crystal
single-crystal
synthetic
synthetic
diamonds
diamondsof aroundof around
1 cm. 1 cm.

2010s
2010s

Business Review

In 1969,
In 1969,
we began
we beganmakingmakingflexible
flexibleprintedprintedcircuits
circuits(FPCs).
(FPCs).
This technology
This technology
mademadeaasignificant
significant
contribution
contribution
to thetospreadthe spreadof ofportable
portableelectronic
electronic
devices,
devices,such assuch
modernas modernsmartphones
smartphones
and notebook
and notebook
PCs. PCs.

1980s
1980s

Overview

1960s
1960s

14

14

Financial Highlights
Sumitomo Electric Industries, Ltd. and Consolidated Subsidiaries
Thousands of
U.S. dollars

Millions of yen

FY20177FY2016*FY2015FY2014FY2013

FY2017For the Year:

Mar. 31, 2018

Mar. 31, 2017

Mar. 31, 2016

Mar. 31, 2015

Mar. 31, 2014

Mar. 31, 2018

Net sales¥3,082,247¥2,814,483¥2,933,089¥2,822,811¥2,568,779$29,012,114

Operating income

173,139

150,503

143,476

134,457

120,058

1,629,697

Profit before ioncome taxes

193,337

167,792

154,859

167,067

123,833

1,819,814

Profit attributable to owners of the parent

120,328

107,562

91,001

119,771

66,7481,132,605

Capital expenditures*1

171,110

183,693

167,282

148,213150,823

1,610,599

Depreciation and amortization

146,098

134,532

134,371

126,663

113,271

1,375,169

R&D expenses

117,735

115,155

110,839

105,604

99,5201,108,198¥3,017,303¥2,903,584¥2,742,848¥2,925,785¥2,554,819$28,400,819

492,567

510,989

457,145

550,839

534,641

4,636,361

1,764,086

1,626,502

1,561,289

1,646,913

1,379,912

16,604,725

Net cash provided by operating activities¥239,573¥209,233¥240,779¥153,509¥147,705$2,255,017

Net cash used in investing activities(174,265)(194,829)(117,387)(86,888)(174,102)(1,640,296)

Net cash provided by (used in) financing activities(66,795)(4,763)(115,912)(64,037)

113(628,718)

At Year-End:Total assets
Total interest-bearing liabilities
Total net assets*2

Cash Flows:

Yen

Per Share Data:

U.S. dollars

FY2017FY2016*FY2015FY2014¥154.29¥137.61¥114.73¥151.00¥84.15$1.4527FY2013

FY2017

Profit attributable to owners of the parent*

3

Basic

152.88137.24

−

−

−

1.439

4

Cash dividends*

46.00

40.00

35.00

30.00

22.00

0.433

5

Owner’s equity*

1,973.95

1,814.90

1,715.28

1,804.34

1,499.76

18.580

5.6

5.3

4.9

4.8

4.7

Profit attributable to owners of the parent/
net sales (%)

3.9

3.8

3.1

4.2

2.6

Operating income/invested assets* (ROIC)(%)

7.9

7.2

6.8

6.5

6.6

Return on owner’s equity (%)

8.1

7.7

6.5

9.1

5.9

Owner’s equity ratio (%)

51.0

48.7

49.6

48.9

46.6

Current ratio (Times)

1.8

1.7

1.8

1.7

1.6

R&D expenses/net sales (%)

3.8

4.1

3.8

3.7

3.9

DilutedFinancial Indexes:
Operating income/net sales (%)

6

Note : All dollar figures herein refer to U.S. currency. Yen amounts have been translated, for convenience only, at the rate of ¥106.24 to U.S. $1.00, the approximate exchange rate prevailing on
March 31, 2018.
*1 Capital expenditures are recorded as property, plant and equipment.
*2 See page 55.
*3 From the year ended March 31, 2014 to the year ended March 31, 2016, there were no potentially dilutive common shares.
*4 Cash dividends per share for the year ended March 31, 2017 include a 2-yen distribution as commemorative dividends for the 120th anniversary.
*5 Owner’s equity is the sum of total shareholders’ equity and total accumulated other comprehensive income.
*6 Invested assets = total assets - interest-free liabilities*7 Effective from the fiscal year ended March 31, 2018, the Company has applied “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries, etc. for Consolidated Financial Statements” (ASBJ PITF No. 18, revised on March 29, 2017) and “Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity
Method” (ASBJ PITF No. 24, revised on March 29, 2017). The financial data and indexes for the year ended March 31, 2017 have been adjusted retrospectively to apply the changes inaccounting policies.

15Basic Stance on Compliance
Net Sales

Operating Income/Operating Income Ratio(Billions of yen)(Billions of yen / %)2,823 2,933

2,814

5.6

3,082
4.7

2,569

4.8

Profit Attributable to Ownersof the Parent

5.3

4.9

(Billions of yen)

173
120

151

120
108

143

134

120

Overview

91
67

2014

Automotive
Infocommunications
Electronics

2015

2016

2017 (FY)

Environment and Energy
Industrial Materials
and Others

2014

2015

2016

2017 (FY)

2014

2015

2016

2017 (FY)Operating Income
Operating Income Ratio

Owner’s Equity /Return on Owner’s Equity(Billions of yen / %)2013

Free Cash Flows

Basis for Growth

Invested Assets / ROIC

2013

(Billions of yen)(Billions of yen / %)

1,915
6.6

2,198
6.5

2,018
6.8

2,257
7.9
2,140
7.2
1,190

1,431
1,361
9.1

1,416

1,539

123

8.1
7.7

5.9

67

65

6.5

-26
2014

2015

2016

2017 (FY)

Invested Assets
ROIC

2013

2014

2015

2016

2017 (FY)

2013

2014

2015

2016

2017 (FY)

Owner’s Equity
Return on Owner’s Equity

R&D Expenses

Basic Profit Attributable to
Owners of the Parent per Share

(Billions of yen)

(yen)

184
167

171

100

106

111

115

118
154.29151.00148

Corporate Information

Capital Expenditures(Billions of yen)

151

Financial Information

14

2013

Business Review

2013

137.61114.73

84.15

2013

2014

2015

2016

2017 (FY)

2013

2014

2015

2016

2017 (FY)

2013

2014

2015

2016

2017 (FY)16

Business Strategy
VISION 2022 Mid-term Management Plan: Overall Concept
Contributing to a better society by leveraging our expertise in connectivity and transmission technologies throughconcerted efforts of the entire group.

Net Sales¥

3.6
TRILLION

17

Operating Income¥

230
BILLIONROIC

ROE

OR MOREOR MORE

9%

8%

VISION 2022 Growth Strategy
Enhancement and Expansion of Five Business Segments
Sumitomo Electric Group continues to strive for growth in five business segments focusing on Mobility, Energy, and Communications
fields as well as materials, products, and solutions supporting these fields. We aim to grow every segment by strengthening revenue
bases and improving capital efficiency and to achieve a balanced business portfolio.

Further Growth Through Innovation

Overview

In the wake of dramatic changes in the automobile industry together with the renewable energy revolution and exponential growth in data usage
worldwide, Sumitomo Electric Group will achieve further growth by enhancing innovation building on the diversity in technologies and businessexpertise we have cultivated over the years, developing and offering new technologies, products, and services toward a better society.

Our Priorities
Taking “SEQCDD*” one step further

・Aim for “the world’s top safety company”
・Create “strong factories” by continuous improvement (kaizen)
・Share technologies and best practices among group companies worldwide*SEQCDD: S (Safety), E (Environment), Q (Quality), C (Cost), D (Delivery), D (R&D)

Creation andEnhancement of
Leading
Technology

・Continue to enhance core technologies from materials to processes
・Innovation that anticipates change in the automotive and energy fields and exploitscommercialization opportunities with agility
・Challenge ourselves to create innovative technology that encourages social reform

The Three Bases■ Consolidating Our
Manufacturing Base andBusiness Quality
Maintaining and building secure,safe, clean, reliable, and efficient
production systems.

■ Developing Personnel
Strengthening basic competence
through group-wide education andfostering professional humanresources through practical education.

Human Resources andOrganization Base
■ Promoting Diversity
Management(realizing our Global HRM*
Policy)■ Building a global common
infrastructure for humanresources and organization

Financial Base
■ By reinforcing our corporate
structure, we strive to build
on a robust financial footing.
・We aim to keep our shareholders'equity ratio at 50%
・We aim to increase dividend
payout ratio to approximately 40%

Corporate Information

Manufacturing BaseFinancial Information

・Work to increase market share with global customers
・Create new business models that anticipate market changes
・Enhance the efficacy of our marketing efforts

Basis for Growth

Increasing
Global Presence

Business Review

Enhancement of
Manufacturing
Capabilities*HRM: Human Resource Management

The Sumitomo Spirit and The Sumitomo Electric Group Corporate Principles
With the Sumitomo Spirit and The Sumitomo Electric Group Corporate Principles, we can contribute to society
through all of our business activities and enrich the public good and our environment.

18

Review of Operations
Sumitomo Electric operates in five segments: Automotive, Infocommunications, Electronics, Environment and Energy,
and Industrial Materials and Others.

Segment

Net Sales
Net Sales

Automotive¥1,632.0

billionShare of net sales

51 %Net Sales

Infocommunications¥220.3billionShare of net sales

7%

Net Sales

Electronics¥246.3billionShare of net sales

8%

Net Sales

Environment
and Energy¥718.0billionShare of net sales

23 %Net Sales

Industrial Materials
and Others

19¥343.1
Share of net sales

11 %billionBusiness Overview

Main Products

The Sumitomo Electric Groupis a global supplier of wiring
harnesses and anti-vibration
rubber, as well as safe,
comfortable and environment-friendly automotive
components and systems.
The Company also supply
traffic control systems.

• Wiring harnesses• Anti-vibration rubber• Automotive hoses• Car electrical equipment• Traffic control systems

Building on its communication
cable technologies accumulated for more than 100 years,
the Sumitomo Electric Groupsupplies products and systems
that support today’s Internet
services such as optical fiber
cable, opto-electronic devices,
gigabit Ethernet-passive
optical network (GE-PON),
and other devices.

• Optical fiber cables• Telecommunication cables
and equipment• Fusion splicers• Optical/wireless devices suchas optical transceivermodules/wireless communication devices• Network system products
such as access network
equipment (GE-PONs, content
delivery networks,CATV-related products, traffic control)• Compound semiconductors

Using its proprietary
materials technologies, theSumitomo Electric Groupsupports the increasing useof electronics devices insociety through a diverse
range of products such as
electronic wires, flexible
printed circuits, other highly
functional wiring materials
and fluorine resin products.

• Electronic wire products• Metallic material forelectronic parts• Electric-beam irradiation
products• Flexible printed circuits• Fluorine resin products• Micro filtration membrane
moduleSince its inception, theSumitomo Electric Group has
helped underpin modern
daily life through its energy
transmission business,
supplying products such as
cables for power distribution,
railway trolley wires, and wire
coils used in home appliances, automobiles, and otherapplications.

• Electric conductors• Power transmission
wires/cables/equipment• Magnet wires• Air cushions for railroad
vehicles• Power systems• Equipment such as substationequipment/control systems• Charged beam equipment
and processing• Electrical/power supply workand engineering,
porous metals

Through the manufacture of electric
wire and cable, the Sumitomo
Electric Group has developed andbuilt up proprietary technologies
and products that underpin industry
and society. Its cutting tools havecontributed to greater efficiency inmanufacturing and its sintered partsand special metal wires are used in
automotive and a wide range ofother industrial fields.

• Tensioning materials forprestressed concrete• Precision spring steel wires,
steel tire cords, cemented
carbide tools• Diamond and CBN tools,
laser optics, sintered powder
metal parts• Semiconductor heatspreader
materials• Grinding tools• Tungsten and molybdenummaterials• Heat sinks

Automotive
Performance in FY2017 and forecast for FY2018
As a result of capturing global demand for wiring harnesses, automotive electronic parts,
and anti-vibration rubber products, net sales rose by ¥118.7 billion (7.8%) year on year to ¥1632.0 billion.Despite ourcost reduction efforts on a global scale, operating income declined ¥1.8 billion (1.8%) year on year to ¥96.8 billion, due
impact of price reduction. For FY2018, we forecast net sales of ¥1,700 billion and operating income of ¥96.0 billion.

(Billions of yen)(Billions of yen / %)Wiring Harnesses
Others1,488 1,542(Billions of yen)

Operating Income
Operating Income Ratio

1,513

1,632
89

R&D Expenses
and Capital Expenditure89

R&D Expenses
Capital Expenditure

99

97
76

2014

2015

2016

2017 (FY)

2014

5.7

2015

6.5

2016

5.9

2017 (FY)

77

64

76
68

71

2014

2015

2016

77
72

2017 (FY)FY2017 result¥1,632 billion

FY2018 target¥1,700 billion 4.2%

UP

Operating Income
FY2017 result

FY2018 target¥96.0 billion 0.8%

DOWN

Initiative in FY2018

Corporate Information¥96.8 billion

Financial Information

Net Sales

Basis for Growth

6.0

Business Review

Operating Income
and Operating Income Ratio

Net Sales

Overview

to an increase in the initial investment cost for launching new anti-vibration rubber products as well as the negative

1.Accelerating the development and commercialization of products related to neighborhood electric vehicles and high-speed communication.
2.Strengthening the development capability of new products through collaboration within the Group andstrategic alliances with business partners.
3.Promoting sales of aluminum harnesses to customers outside of Japan by strengthening global production control through the acquired business of Sumitomo Riko Company Limited.

20

Infocommunications
Performance in FY2017 and forecast
for FY2018
As a result of aggressive marketing for optical fiber cables, net sales rose by ¥22.1 billion (11.1%) year on year to ¥220.3
billion. Due to the decrease in demand for optical devices, operating income declined to ¥18.6 billion, down ¥2.9
billion (13.5%) year on year. For FY2018, we forecast net sales of ¥220.0 billion and operating income of ¥19.0 billion.

Operating Income
and Operating Income Ratio

Net Sales(Billions of yen)(Billions of yen / %)Fiber·Cable / Accessories
Optical & Electronic Devices
Access Network Equipment
Semiconductors
Others172

R&D Expenses
and Capital Expenditure

185

198

(Billions of yen)

Operating Income
Operating Income Ratio

29

R&D Expenses
Capital Expenditure

24
10.8

220

22
6.4

8.4
19

15

2017 (FY)

2014

17
14

17

18

13

12
2.2
4

2014

2015

2016

2017 (FY)

2014

2015

2016

2015

2016

2017 (FY)Net Sales
FY2017 result¥220.3 billion

FY2018 target¥220.0 billion 0.1%

DOWN

Operating Income
FY2017 result¥18.6 billion

FY2018 target¥19.0 billion

2.2%

UP

Initiative in FY2018
1.Capturing demand in the global market: optical fibers and cables, 100 Gbps optical devices, and GaN
HEMTs (Gallium Nitride High Electron Mobility Transistors) for wireless infrastructures.
2.Promoting sales: optical fibers used in submarine cables, ultra-high-fiber-count optical cables and theirrelated accessories used in data centers, and 10G-EPON (10 Gigabit Ethernet PON) products.
3.Accelerating the development: ultra-low loss optical fibers, high-functional products for optical cabling,ultra-high definition (4K/8K) video transmission equipment, STB (Set-Top Box), and next-generation optical and wireless devices.

21

Electronics
Performance in FY2017 and forecast
for FY2018
Despite our sales promotion efforts for electronic wires and FPCs (Flexible Printed Circuits) used in mobile devices,
net sales declined by ¥4.8 billion (1.9%) year on year to ¥246.3 billion due to the segment reorganization.
previous fiscal year, owing to the progress made in cost reductions for the FPC.
For FY2018, we forecast net sales of ¥230.0 billion and operating income of ¥7.0 billion.

(Billions of yen)(Billions of yen / %)FPCs
Semiconductors
Fine Polymer
Electronic Wires
Others292

R&D Expenses
and Capital Expenditure(Billions of yen)

Operating Income
Operating Income Ratio

R&D Expenses
Capital Expenditure

34

312
251

29

10
246

5

5

3.3

2.2

15

4

3

3

3

2014

2015

2016

2017 (FY)

-1 1
2015

2016

2017 (FY)

2014

2015

2016

2017 (FY)11

FY2017 result¥246.3 billion

FY2018 target¥230.0 billion 6.6%

DOWN

Operating Income
FY2017 result

FY2018 target¥7.0 billion

29.6%

UP

Initiative in FY2018

Corporate Information¥5.4 billion

Financial Information

Net Sales

Basis for Growth

1.9

-4.4

2014

Business Review

Operating Income
and Operating Income Ratio

Net Sales

Overview

Operating income totaled ¥5.4 billion, an increase of ¥16.3 billion compared to the operating loss of ¥10.9 billion in the

1. FPC:・Accelerating quality improvement, cost reduction, and sales promotion.
・Developing ultra-thin, fine-pitch, and high-heat-resistant FPCs and expanding our revenue base byentering/exploring/fostering new markets.
2. Electronic wire:・Seizing marketing opportunities in the automotive and electronic businesses.

22

Environment and Energy
Performance in FY2017 and forecast
for FY2018
Under the influence of increased demand in Sumitomo Densetsu Co., Ltd., as well as the price hike of copper, net salesrose by ¥96.6 billion (15.5%) year on year to ¥718.0 billion and operating income by ¥3.3 billion (15.9%) year on year to¥24.1 billion. For FY2018, we forecast net sales of ¥780.0 billion and operating income of ¥26.0 billion.

Operating Income
and Operating Income Ratio

Net Sales(Billions of yen)(Billions of yen / %)Copper Wire Rods
Electric Power Cables
Magnet Wires & Others
Sumitomo Densetsu
Nissin Electric

637

660

621

2016

2017 (FY)R&D Expenses
Capital Expenditure

24

718

27

21
3.3

3.4

13
2.1

2015

(Billions of yen)

Operating Income
Operating Income Ratio

14

2014

R&D Expenses
and Capital Expenditure

2014

24

26

20
14

15

16

16

2014

2015

2016

2017 (FY)

2.0

2015

2016

2017 (FY)Net Sales
FY2017 result¥717.9 billion

FY2018 target¥780.0 billion 8.6%

UP

Operating Income
FY2017 result¥24.1 billion

FY2018 target¥26.0 billion

7.8%

UP

Initiative in FY2018
1.Enhancing profit from the electric power cable business:

・Completing ongoing large scale projects, acquiring new orders for power cable projects, and capturing
demand for power cable replacement in Japan.
・Further strengthening production capacity and competitiveness in cost and quality.

2.Promoting sales of rectangular magnet wires for electric vehicles.
3.Expanding renewable energy-related business in coordination with Sumitomo Densetsu Co.,Ltd. and Nissin
Electric Co., Ltd.

23

Industrial Materials
and Others
Performance in FY2017 and forecast
for FY2018
By expanding sales channels mainly for cemented carbide tools and sintered parts,
sales rose by ¥39.2 billion (12.9%) year on year to ¥343.1 billion and operating income by ¥7.7 billion (37.5%) year on(Billions of yen)(Billions of yen / %)Special Steel Wires
Sintered Parts
Hard Metal
A.L.M.T.
Others317

312(Billions of yen)

Operating Income
Operating Income Ratio

304

343

19

20

2016

2017 (FY)R&D Expenses
Capital Expenditure

2014

2015

8.2

24

6.7

2016

2017 (FY)

8

8

8

8

2014

2015

2016

2017 (FY)¥343.1 billion

FY2018 target¥380.0 billion 10.7%

UP

Operating Income
FY2017 result

FY2018 target¥32.0 billion

13.6%

UP

Initiative in FY2018

Corporate Information¥28.2 billion

Financial Information

Net Sales
FY2017 result

29

25

22

Basis for Growth

6.2

2015

28

23
7.2

2014

R&D Expenses
and Capital Expenditure

Business Review

Operating Income
and Operating Income Ratio

Net Sales

Overview

year to ¥28.2 billion. For FY2018, we forecast net sales of ¥380.0 billion and operating income of ¥32.0 billion.

1.Cemented carbide:・Capturing demand in emerging economies, such as China and India.
・Expanding marketing targets from our current automotive industry to non-automotive industries.

2.Sintered parts: Establishing strengthened global supply systems for increased production capacity.
3.A.L.M.T.: Implementing intensive cost reduction and investing in growing markets.
4.Prestressed concrete steel wires and steel wires for spring:
Establishing global production systems and expanding sales capacity.

24Expanding Business on the World StageThe Sumitomo Electric Group is expanding marketing bases and establishing an optimal production base structurearound the world to respond more precisely to growing global demand driven by emerging economies. As a result,sales for the Company and its consolidated subsidiaries outside Japan (overseas sales) totaled ¥1,838.8 billion in
FY2017, an increase of ¥185.1 billion over the previous fiscal year. Overseas sales were 59.7% of total sales on a consolidated basis, a year-on-year increase of 0.9%.

395

Number of Consolidated Subsidiaries and Equity-Method Affiliates(As of March 31, 2018)

69

Europeand Others

169
Asia

48

109
Japan

25

AmericasAmericas

Asia

Sales in the Americas in FY2017 increased by ¥23.8 billion

Sales in China increased by ¥42.0 billion year-on-year to ¥521.4

year-on-year to ¥518.5 billion, or 16.8% of all consolidated sales.

billion, or 16.9% of all consolidated skills. In other Asian mar-

Meanwhile, sales for consolidated subsidiaries (to external cus-

kets, sales increased ¥87.9 billion to ¥438.9 billion, accounting

tomers) rose by ¥24.1 billion year-on-year to ¥512.3 billion,

for 14.3% of total sales on a consolidated basis. Sales for con-while operating income decreased by ¥4.3 billion to ¥20.1

solidated subsidiaries (to external customers) in Asia, includ-billion. Operating income generated in the region was 11.5% of

ing China, totaled ¥881.1 billion, an increase of ¥127.7 billion

total consolidated operating income.

from the previous fiscal year. Operating income also increased¥9.0 billion year-on-year to ¥80.4 billion.
Overview

Europe and Others
Sales in Europe and other regions in FY2017 came to ¥360.1
billion, or 11.7% of total consolidated sales. Compared with theBusiness Review

previous fiscal year, this was an increase of ¥31.4 billion. At thesame time, sales for consolidated subsidiaries (to external customers) rose by ¥20.8 billion to ¥327.4 billion. Operating
income was ¥2.0 billion, down ¥3.3 billion. Operating income
generated was 1.1% of total operating income on a consolidated
basis.

Segment Information by Geographic Area

(Billions of yen)(Billions of yen)

Europe and Others
Asia
Americas

346

360
344

Japan
Europe and Others
Asia
Americas

329

1362
1208

806

876

830

960
293
671

403

495

526

495

518
396

2013

2014

2015

2016

1249

2017 (FY)

2013

185
761
482
2014

1274

185
818

516
2015

1266
307

327

753

881

488
2016

512
2017 (FY)

Currently, the Sumitomo Electric Group employs around 250,000 people in diversified technologicaland regional occupations in over 40 countries. It is essential for us to make full use of all of our resources if we are to survive and thrive amid global competition in terms of technology, products and business model. It is also vital to secure and mobilize highly talented human resources to support our business. The Group has long emphasized the importance of human resources, as stated in the Sumitomo
Spirit. In September 2011, the Group compiled the Global Human Resource Management Policy, clearlylaying down its basic human resource policy. This policy explicitly commits Sumitomo Electric to further accelerating the globalization of human resources and organizational systems and providing training for fostering global players and leaders and career opportunities regardless of nationality, race, ethnicity, religion or gender. The policy has been widely promulgated internally and externally. We are promoting specific policies for cross-border personnel exchange and training, and for compilation of
global guidelines for personnel development.

Corporate Information

Global Human Resource Management Policy

Financial Information

298

716

Basis for GrowthGeographical Segment Sales

Overseas Sales

26

Research & Development
In line with our commitment in the Sumitomo Electric Group Corporate Principles to build technical expertise, realizechanges and strive for consistent growth, we focus on growing business areas and develop original businesses andnew products with strong earnings potential. Anticipating future technological needs, we are committed to identifying
and developing new research areas that will drive next-generation growth. In FY2017, ended March 31, 2018, consolidated
R&D expenses totaled ¥117.7 billion.

R&D Expenses by Segment

Number of Patent
Applications by Region(Billions of yen)

Automotive
Infocommunications
Electronics
Environment and Energy
Industrial Materials and Others

62.1

64.4

Japan
Outside Japan

70.9

68.4

71.8

3,156

15.2

16.9

16.9

18.3

12.6
4.6
12.6

3.9
14.2

3.4
14.5

3.4
16.0

3.3
16.0

7.6
2013

Topics

7.9
2014

8.0

7.6
2015

2016

2,205

2,869

2,412

2,726

2,588

2,511

2,888

2,085

3,505

8.3
2017
(FY)

2013

2014

2015

2016

2017
(CY)

Participation in the Virtual Power Plant Construction and
Demonstration Project – Toward the Realization of a New
Electricity Supply and Demand System

Sumitomo Electric is participating in a project in collaboration with other companies in Japan that aims to optimize
energy use across society and further introduce renewable energy sources into the power grid. Conventionally, electric
power supply and demand have been balanced on the supplier side by adjusting output from the power generationequipment itself. However, in a virtual power plant (VPP) system, by applying Internet of Things (IoT) technology toconsumer devices scattered throughout the power system to enable collective control, the consumer side adjusts
demand and supply of electricity – it is as if the VPP functions as a single electricity generation plant.

The Benefits of a VPP System

・Reduction of energy costs for consumers
・Expansion of revenue sources
・Further expansion of renewable energy
・Improvement in value of electric vehicles (EVs)Specific Initiatives■ Testing remote control charging of electric vehicles
As part of the VPP Construction and Demonstration Project, Sumitomo Electrichas joined with Nissan Motor Co., Ltd. and Kansai Electric Power Co., Inc.
(KEPCO) to start testing remote control charging of EVs.

27

EVs at a KEPCO officeSumitomo Electric Launches High Quality SiC Epitaxial Wafer" EpiEra™"

Corporate Information

TopicsSuccess of Ultra-high Capacity Optical Fiber Transmission
Breaking the World Record by a Factor of Five and Reaching a
10 Petabits per Second.

Financial Information*1 Multi-parameter and zone controlled SiC growth technology (MPZ):
Sumitomo Electric's SiC growth technology that adjusts various parameters depending on the area and time zone utilizing simulation andmonitoring techniques. Parameters include temperature, pressure, gas reactions, and others.
*2 Defect-free area (DFA):An area with no surface defect or basal plane dislocation (BPD) on the wafer surface.
*3 Surface defect:
Morphological irregularity on the epitaxial layer surface. It impacts the device yield.
*4 Basal Plane Dislocations (BPD):
Dislocation generated on the basal plane in an SiC single crystal. It impacts the long-term device reliability.

Basis for Growth

Sumitomo Electric Industries, Ltd. has launched a high quality SiC epitaxial wafer,
EpiEra™, which attains a more than 99% defect free area in a wafer. Power devices
are semiconductor devices used in a wide range of applications such as powertransmission, trains, automobiles, and electric appliances. They are increasingly
required to offer higher efficiency at lower energy consumption. Utilizing its
Multi-Parameter and Zone control technology (MPZ™*1) and 30-year experiencein compound semiconductor development, Sumitomo Electric has succeeded indeveloping a high-quality SiC epitaxial wafer, EpiEra™, and entered mass production
stage. EpiEra™ has achieved an industry-leading 99% defect-free area (DFA*2),
eliminating surface defects*3 and Basal Plane Dislocations (BPD*4). This improves
quality, stability and reliability in customers’ products.

Business Review

TopicsOverview

In a first for Japan, sixty electric and plug-in hybrid vehicles owned by KEPCO and general customers have been
fitted with newly-developed EV switches to enable remote control charging. Based on the EV information obtained
through the linkage with the Nissan Telematics service, KEPCO’s VPP server and Sumitomo Electric’s EV server determine
available charging capacity and through the EV switch, charge the Nissan EV remotely. In addition, tests assuming
real-world operation using a smartphone app to confirm availability of EVs by owners were conducted. The dataobtained on such aspects as EV usage and charging control was collected and analyzed to evaluate the use of EVs as
power sources for the VPP. In line with initial expectations, this trial confirmed that the operation of the VPP is possible.
KEPCO in its role as a power company, Sumitomo Electric as a manufacturer of automotive equipment, and automobile
manufacturer Nissan are working together to achieve a low-carbon transportation future and a stable electricity
supply as EVs become widespread and will continue to conduct demonstration testing to accumulate technical knowledge
by linking the VPP system and information collected from EVs.

KDDI Research Inc., and Sumitomo Electric Industries, Ltd., announced that its success of ultra-high capacity opticalfiber transmission experiment which has broken the world record of transmission capacity through a single opticalfiber (2.15 petabits/second) and achieved 10.16 petabits/second with the multicore, multimode optical fiber, whichenables 114 space multiplicity. With the transmission capacity of 10 petabits/second, data for 25,000 Blu-ray disks (50GB/both sides) would be transmitted in one second, or 100 million people can simultaneously communicate at 100
megabits. The mobile communication system after 5G requires innovations both in wireless technologies and in networkand optical fiber transmission technologies that support them. Our new technology would be expected to be a key
technology that will support broadband and a low latency mobile communications system after 5G and will provide
new experiences and services.

28Basis for Growth

Corporate Governance
Basic Policy for Corporate Governance2. Current Framework for Internal Audits andAudits by Audit & Supervisory Board Members

The consistent basic policy of the Sumitomo Electric Group is

The Company receives three types of audits—Audit & Supervi-

to continue to make a positive contribution to society throughsory Board members’ audits, internal audits, and accounting

the pursuit of fair business practices, aligned with the Sumito-

audits—to ensure the legality and appropriateness of its busi-

mo Spirit and the Sumitomo Electric Group Corporate Princi-

ness management. In the Audit & Supervisory Board members’

ples. While maintaining this basic stance, the Group is working

audits, five Audit & Supervisory Board members, three ofto ensure transparent and fair management based on soundwhom are outside auditors, inspect the performance of thecorporate governance, and to determine and implement inno-

Board of Directors in business execution, supported by thevation-focused growth strategies that make the most of opera-

corporate auditor assistants (the Office of Audit & Supervisory

tional resources, recognizing that these endeavors are import-

Board members).

ant for both sustaining growth and increasing corporate value
over the medium to long term.

1. Overview of the Corporate Governance
System and Reasons for Adopting It

3. Outside Directors and Outside Audit &Supervisory Board Members
Sumitomo Electric has three outside directors for the purposeof improving the supervisory function of the Board of Directors

Sumitomo Electric chose to adopt an Audit & Supervisoryfrom an external standpoint, as well as increasing the transpar-

Board system since the roles of such a board and its members

ency and objectivity of management. To enhance its superviso-

under this system are clearly intended for ensuring sound man-ry system and ensure that management is conducted appropri-

agement. With the Board of Directors, executive officers, andately and within the scope of the law, the Company has three

Audit & Supervisory Board members clearly specified, theoutside Audit & Supervisory Board members—the majority ofCompany intends to pursue sustainable growth and increase its

its Audit & Supervisory Board members—with diverse perspec-

corporate value over the medium and long term according totives and broad areas of expertise.

the following basic principles.
• Under the Audit & Supervisory Board system, the Company’s

Outside Directors

Board of Directors is responsible for making decisions on the

Hiroshi Sato

execution of business and supervising those operations. To

Executive Advisor, Kobe Steel, Ltd.
From June 2016, Director of the Company
Reasons for election: His extensive experience andhigh degree of knowledge in all aspects of corporate
management derived from his involvement with acompany engaged in a range of business domains,
including materials (primarily steel), machinery andenergy.

enable the Board of Directors to make sound decisions onimportant matters that could affect the future course of theCompany, and to effectively carry out its supervisory duties,
deliberations on particular matters, such as investments, arelimited to those of high importance. Management decisions
are implemented while placing importance on deliberations
on the medium-term management plan and fiscal year plans,
as well as analysis of the results for each fiscal quarter.
• When carrying out its supervisory duties, the Board of Directors pays serious attention to the opinions of independent
officers, particularly outside directors, to ensure a more independent and objective standpoint. To help make the Board of
Directors more effective, the Company established an adviso-

Michihiro Tsuchiya
Corporate Advisor, Mitsubishi Tanabe Pharma
Corporation
From June 2018, Director of the Company
Reasons for election: His rich experience and deep
insight into all facets of corporate management
derived from his experience at a company that
expanded its business activities globally.

ry committee responsible for decisions regarding the nominations and remuneration of directors and executive managers,

29

chaired by an outside director and comprised of a majority of

Christina L. Ahmadjian

outside directors.

Professor, Graduate School of Business Administration, Hitotsubashi University
From June 2018, Director of the Company
Reasons for election: Her extensive experience andability to offer a global perspective on corporate
management and corporate governance, her field of
research as professor at Hitotsubashi University.

Outside Audit & Supervisory Board Members
Ikuo Yoshikawa

Director, Kyushu Financial Group, Inc.
Former President, Toyota Motor Corporation
From June 2013, Audit & Supervisory Board Memberof the Company
Reasons for election: His extensive experience andsuperior insight into all aspects of corporate management stemming from his involvement over many
years with a company that expanded its businessactivities globally.

Certified Public Accountant (CPA)
From June 2018, Audit & Supervisory Board Memberof the Company
Reasons for election: His high degree of knowledgeof the field of accounting derived from his extensive
experience over many years as a CPA and his
research into accounting in his capacity as university
professor.

Overview

Katsuaki WatanabeMichiko Uehara

Basis for Growth

Sumitomo Electric Group’s
Corporate Governance Structure

The Sumitomo Electric Corporate Governance Guidelines are available
online : http://global-sei.com/company/governance.html

General Meeting of Shareholders
Appointments / Dismissals

Audit &
Supervisory Board

Accounting
Audit

Audit &
Supervisory Board
Members

Chairman of theBoard of Directors

Management
Conference

President

Accounting
Auditors
Cooperation

R&D Unit

Affiliates inJapan and Overseas

Production Units

Affiliates inJapan and Overseas

Cross-Sectional Risk Management
Activity, etc.
Corporate Staff
Group

Audit

Internal Auditing
Department

Corporate Information

Sales Units

Affiliates inJapan and Overseas

Financial Information

Audit

Board of Directors

Business Review

Attorney at Law
From June 2016, Audit & Supervisory Board Memberof the Company
Reasons for election: Her extensive experience andhigh degree of knowledge in relation to corporate
law, including compliance, derived from her work in
the judicial system as a judge and attorney.

Risk Management Committee

Compliance Committee

Corporate Environment Committee

Information Management Committee

CSR Committee

30

Basis for Growth

Directors, Audit & Supervisory Board Members
and Executive Officers(As of June 28, 2018)

Directors

Audit & Supervisory Board Members

1

Masayoshi Matsumoto : Chairman & CEO

Satoru Ogura : Audit & Supervisory Board Member

2

Osamu Inoue : President & COO

Akira Hayashi : Audit & Supervisory Board Member

3

Mitsuo Nishida : Executive Vice President

Katsuaki Watanabe : Audit & Supervisory Board Member*

4

Nozomi Ushijima : Senior Managing Director

Michiko Uehara : Audit & Supervisory Board Member*

5

Makoto Tani : Senior Managing Director

6

Yoshitomo Kasui : Senior Managing Director

7

Junji Ito : Managing Director

8

Akira Nishimura : Managing Director

9

Hideo Hato : Managing Director

Ikuo Yoshikawa : Audit & Supervisory Board Member**Mr. Katsuaki Watanabe, Ms. Michiko Uehara and
Mr. Ikuo Yoshikawa are Outside Corporate Auditors.

8

10 Masaki Shirayama : Managing Director
1 1 Hiroshi Sato : Director*
12 Michihiro Tsuchiya : Director*
13 Christina L. Ahmadjian : Director**Mr. Hiroshi Sato, Mr. Michihiro Tsuchiya and
Ms. Christina L. Ahmadjian are Outside Directors.

31

12

6
11

4

1

5
2

10

9

7
13

3

Overview
Business Review
Basis for Growth
Financial Information

Executive Officers
Yutaka Nishide : Executive Officer

Mitsuhiro Goto : Executive Officer

Toshiaki Kakii : Managing Executive Officer

Kikaku Tokumaru : Executive Officer

Hiroshi Hayami : Executive Officer

Tetsuya Hayashi : Managing Executive Officer

Saburo Narahashi : Executive Officer

Toshiyuki Sahashi : Executive Officer

Shigeru Nakajima : Managing Executive Officer

Hiroshi Shikata : Executive Officer

Masataka Inoue : Executive Officer

Yoshihiro Matsushita : Managing Executive Officer

Hiroshi Iwano : Executive Officer

Hidetoshi Saito : Executive Officer

Takafumi Uemiya : Managing Executive Officer

Takaaki Yamamoto : Executive Officer

Hidetoshi Ishiguro : Executive Officer

Kenichi Urushibata : Managing Executive Officer

Nobuyuki Kobayashi : Executive Officer

Koji Niikura : Executive Officer

Masahiro Kobayashi : Managing Executive Officer

Hiroshi Kiyokawa : Executive Officer

Tomoaki Nagano : Managing Executive Officer

Yoshiyuki Ogata : Executive Officer

Yasuyuki Shibata : Managing Executive Officer

Soichiro Seki : Executive Officer

Yuichi Sano : Managing Executive Officer

Hisashi Togawa : Executive Officer

Corporate Information

Yasuhiro Miyata : Managing Executive Officer

32

Basis for Growth

Risk Management
Basic Policy for Risk Management
Sumitomo Electric has established the Risk Management Committee, which is chaired by the president and promotes measures thatmitigate risks associated with our business activities such as risks related to safety, disasters, quality and the environment. A crisis
management system is formed by the Risk Management Office to promptly and properly manage risks coming to the surface based on
our basic policy of risk management.

Risk Management System

Basic Policy of Risk Management■Impact on business performance, maintenance of quality and safety■Social responsibility to ensure stablesupply■Maintenance of favorable relations withstakeholders such as customers, suppliers, shareholders/investors, local communities and employees■Continuous compliance with laws andcorporate ethics■Statements in the Sumitomo Spirit, theSumitomo Electric Group Corporate
Principles and the Sumitomo ElectricGroup Charter of Corporate Behavior

Board of Directors

Company-wide Committees

Management Conference

Compliance Committee
CSR Committee

Risk Management Committee

Public Relations Committee

Risk Management Steering Committee

Environment Committee

Risk Management Office

Corporate Staff Group

Risk manager
Legal, Public Relations, Accounting, Information Systems,
Procurement, Logistics, Safety & Environment,
Plant & Production Systems Engineering

Business Units, Sales Units,
Research & Development Unit
Divisions

Risk manager

Affiliates

Risk manager

Risk manager

Business Continuity
As part of the Company's risk management efforts, Sumitomo Electric developed Business Continuity Plans (BCPs) to ensure that ourimportant and core businesses can continue even in the event of natural disasters, pandemics, and unexpected accidents, and that we
can swiftly resume operations should they be interrupted. Since then, we have improved the plans on a regular basis. To confirm theeffectiveness of the plans, we will continue to promote practical drills and training programs.

Protection of Personal Information
In accordance with its Personal Information Protection Policy, Personal Information Protection Rules and other rules, Sumitomo Electric
properly deals with the personal information of customers, business partners and employees handled in the course of its business while
complying with laws, regulations and other standards relating to the protection and use of personal information. We also formulated therules for handling specified personal information in November 2015 to ensure that such information is handled properly in accordancewith laws and regulations and to prevent leakage and other problems. In addition, we revised the aforementioned policy and rules in May
2017 in response to the full implementation of the amended Act on the Protection of Personal Information.

Strengthening of Our Information Security Management System
To better manage information security, the Company drew up the Information Security Policy in October 2003. This policy is used topromote maintenance and to improve the Group global security management system as well as to establish security countermeasure
standards related primarily to internal information systems, to prevent information leaks from our information systems and for risk
management. Furthermore, in October 2016, based on the idea that maintaining a high level of security for the Company's products is asocial duty, the SEI-CSIRT Office started operations to oversee the information security of the entire Group, working on initiatives tofurther strengthen the information security management system that covers the Company's products and production plants.

33

Basis for GrowthCompliance
Basic Stance on Compliance
Compliance with laws and regulations and maintenance of our corporate ethics form the core of Sumitomo Electric’s management andare part of our social responsibility. At the same time, they are the absolute foundation of the Company’s continued existence anddevelopment.
In response to the on-site investigation by the Japan Fair Trade Commission (JFTC) in June 2009 concerning optical fiber cables andrelated products, we have taken corrective action out of recognition of the seriousness of the matter, including the exhaustive complianceorder to identify and eliminate conduct that violates the Act. Additionally, we have conducted intensive training, enforced Competition
Law Compliance Regulations and established a system to ensure the administration and management of the Regulations by specializedorganizations in order to reinforce competition law compliance by the entire Group.

The Sumitomo Electric Group has established the Compliance Committee, chaired by the president, as an organization that promotes
measures necessary to develop and further strengthen its compliance system. The committee engages in various activities, including
preparing and distributing the Sumitomo Electric Group Compliance Manual and organizing compliance training seminars. In addition,
the committee identifies and analyzes group-wide compliance risks, disseminates preventive measures, and monitors complianceactivities implemented by each division and subsidiary.

4. Competition Law Compliance System

The Code is a statement of our shared values and the standards

The Compliance & Risk Management Office has been set upof conduct that are expected of each of us. It describes thewithin the Corporate Staff Group to investigate suspicious

fundamental principles and key policies that govern how webehavior involving the Group, including cartels and bid rigging,conduct business. The Code applies to all Company employees,

as well as to implement compliance education based on theofficers, and directors, at every level.

Competition Law. In partnership with dedicated organizations
within each business unit, or with the Competition Law Compli-

2. Compliance Education

ance promotion leaders, this office manages and monitors thestate of compliance based on the Competition Law Compliance

To check compliance risks, ensure implementation of preven-

Action Guidelines, including rules restricting contact with com-

tive measures, as well as enhance and spread awareness ofpetitors in the same industry.

compliance, the Compliance Committee organizes regulartraining seminars for all officers and managers every year. New

5. Anti-bribery Compliance Systemwith training seminars. At overseas consolidated subsidiaries, a

Sumitomo Electric introduced an anti-bribery program in Aprilbusiness code of conduct in line with local laws is being intro-

2013 to enhance its anti-bribery compliance system on a global

duced along with compliance training.

scale. This program has established rules on bribery-related
issues, including ban of bribery, as well as ex ante approval and3. Speak-Up System

ex post report on gifts, donations and offering entertainment,in the Bribery Prevention Compliance Policy in response to theWe have established the Speak-Up System, which enables

recent tightening of regulations on bribery of domestic andemployees to directly report and consult on potential compli-

foreign public officers in the US, Europe and emerging markets.

ance-related issues, so as to identify and resolve such issues by

One bribery prevention manager is appointed in each unit toourselves at an early stage. In addition to the Company's com-build a system to apply the rules.

Corporate Information

employees and newly promoted personnel are also provided

Financial Information

1. Code of Conduct

Basis for Growth

Initiatives to Deepen Awareness of ComplianceBusiness Review

Compliance Committee

Overview

with the Antimonopoly Act and prompt recruitment of outside experts to conduct studies into other infringement behavior, if any, inpliance staff, a law firm has been appointed as an external contact in the Speak-Up System. To address issues reported
ducts investigation and takes necessary action. Sumitomo Elec-

6. Awareness of Compliance among
Overseas Group Companies

tric instructed Group companies in Japan to establish their own

We are also committed to the development of the compliancein-house consultation contacts. At the same time, Sumitomosystem among group companies overseas in line with theElectric positions outside contacts in its Speak-Up System as

globalization of our businesses. Sumitomo Electric has intro-

those for the entire Sumitomo Electric Group.

duced the Business Code of Conduct (BCC) to overseas con-through this System, the Compliance Committee swiftly con-solidated subsidiaries based on the local legal systems and also
provides compliance training seminars for local managers.

34

Financial Information

Management’s Discussion and Analysis
With the expanding US economy and signs of recovery in the EU and China, the global economy generally remained strong in the 2017consolidated fiscal year ended on March 31, 2018. Meanwhile, the Japanese economy also continued to show signs of moderate recovery due to an increase in exports and capital expenditure. However, with the effects of US economic policies and geopolitical risks, theoverall economic outlook remains unpredictable.
As for business conditions surrounding the Sumitomo Electric Group, demand for wiring harnesses, powder alloys, and sintered components continued to grow strongly primarily in overseas markets due to an increase in automobile production by carmakers, and thedemand for infocommunications products such as optical fiber cables also grew. Against this backdrop, consolidated net sales for
FY2017 came to ¥3,082.2 billion (a 9.5% increase on ¥2,814.5 billion in FY2016). In addition to increased demand, factors such as cost
reductions in flexible printed circuits (FPCs) saw operating income come in at ¥173.1 billion (an increase of 15.0% over ¥150.5 billion in
FY2016), ordinary income at ¥195 billion (rising 12.2% from ¥173.9 billion in FY2016), and profit attributable to owners of the parent at¥120.3 billion (an increase of 11.9% over ¥107.6 billion in FY2016). In short, every profit category posted a year-on-year increase.

Automotive

Environment and Energy

As a result of active efforts to capture global demand for

In addition to an increase in demand from Sumitomo Densetsu

wiring harnesses, automotive electronic parts, and anti-vibra-

Co., Ltd., the effect of rising copper prices saw net sales cometion rubber, net sales rose ¥118.7 billion (7.8%) to ¥1,632 billion.

in at ¥718.0 billion, an increase of ¥96.5 billion (15.5%). Operat-

While progress was made in cost reductions at global produc-

ing income rose ¥3.3 billion year-on-year to ¥24.1 billion. Thetion bases, in addition to the effect of a decline in prices, there

operating income margin rose by 0.1 percentage points to 3.4%.

was an increase in costs for launching new anti-vibration

Orders received for plants and installation work reached ¥305.7

rubber products, causing a decline in operating income of ¥1.8

billion, an increase of ¥12.7 billion (4.3%) from the previous

billion down to ¥96.8 billion year-on-year. The operating

fiscal year.

income margin fell by 0.6 percentage points to 5.9%.

Infocommunications

Industrial Materials and Others

Sales of optical fiber cables continued to expand, leading to

Due to expanding sales of mainly cemented carbide tools andnet sales of ¥220.3 billion, an increase of ¥22.1 billion (11.1%)

sintered components, net sales increased by ¥39.2 billion

year-on-year. Due to a decrease in demand for optical devices,(12.9%) to ¥343.1 billion. Operating income rose ¥7.7 billion

operating income was ¥18.6 billion, a decline of ¥2.9 billion. The

year-on-year to ¥28.2 billion. The operating income margin

operating income margin dropped by 2.4 percentage points toimproved by 1.5 percentage points to 8.2%.

8.4%.

Electronics
While sales of electronic wires and FPCs for mobile devices
continued to expand, the reorganization of certain segments
saw net sales fall ¥4.8 billion (1.9%) to ¥246.3 billion. Progressin cost reductions across the Company in FPCs resulted in an
improvement in operating income, which stood at ¥16.3 billion,up ¥5.4 billion year-on-year (a loss of ¥10.9 billion in previous
fiscal year). The operating income margin improved by 6.5
percentage points to 2.2%.

35

Cashflows
The consolidated fiscal year-end balance of cash and cash equivalents was ¥180.1 billion, a year-on-year increase of ¥106 million (0.1%).
Net cash provided by operating activities increased by ¥30.3 billion from the previous fiscal year to ¥239.6 billion. This was the resultof factors such as fluctuation in working capital being subtracted from profit before income taxes of ¥193.3 billion as well as depreciation and amortization of ¥141.4 billion–that is, a cash flow generated by business activity totaling ¥334.8 billion.
Net cash used in investment activities was ¥174.3 billion (a decrease in expenditures of ¥20.6 billion). This was due, among other
Meanwhile, free cash flow, calculated by deducting net cash used in investment activities from net cash provided by operating activities, was ¥65.3 billion (up ¥14.4 billion on the previous fiscal year).

Overview

factors, to capital expenditure driving purchases of property, plant, and equipment of ¥172.0 billion.

Cash flow from financing activities was ¥66.8 billion (a decline of ¥4.8 billion from the previous fiscal year). This was due to repaymentof loans payable and payment of dividends.

Net Sales(Billions of yen)(Billions of yen / %)(Billions of yen / %)Operating Income
Operating Income Ratio

3,082

4.7
120

4.8
134

4.9

5.3
151

143

5.6
173

9.1
120
5.9

6.5

7.7
108

8.1
120

91

67

2014

2015

2016

2017
(FY)

Overseas Sales /Overseas Sales Ratio

2017
(FY)

59.7
59.5 58.8 1,839
1,746
1,654
1,647

6.6
1,915

2015

2016

2017
(FY)

2013

2013

2014

2015

2016

2017
(FY)

Capital Expenditures /Depreciation and Amortization(Billions of yen)

Invested Assets
ROIC

58.3

2014

2016

Capital Expenditures
Depreciation and Amortization

6.5

6.8

2,198

2,018 2,140

2014

2015

7.2

2016

7.9
2,257

151
113

2017
(FY)

2013

148
127

2014

167

184

134

135

2015

2016

171
146

Corporate Information

2013

2015

(Billions of yen / %)Overseas Sales
Overseas Sales Ratio

1,417

2014

Invested Assets / ROIC(Billions of yen / %)

55.2

2013

Financial Information2013

Basis for Growth

2,569

2,823 2,933 2,814

Profit Attributable to Owners of the Parent
Return on Owner’s Equity

Business Review

Profit Attributable to Ownersof the Parent /Return on Owner’s Equity

Operating Income /Operating Income Ratio

2017
(FY)

36

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Company Information
Sumitomo Electric Industries, Ltd. (As of March 31, 2018)

PRINCIPAL SHAREHOLDERS

HEAD OFFICE (OSAKA)

HEAD OFFICE (TOKYO)

57,1 28

7.32

Akasaka Center Building, 1-3-13, Motoakasaka,
Minato-ku, Tokyo 107-8468, JapanThe Master Trust Bank of Japan, Ltd.
(trust account)

50,897

6.52

ESTABLISHED

Nippon Life Insurance Company

24,703

3.1 7

SUMITOMO LIFE INSURANCECOMPANY1897

15,556

1.99

NORTHERN TRUST CO. (AVFC)
RE SILCHESTERINTERNATIONAL INVESTORSINTERNATIONALVALUE EQUITY TRUSTNUMBER OF EMPLOYEES
Consolidated: 255,133
Non-Consolidated: 5,100

14,472

1.86

DOMESTIC WORKS

STATE STREET BANK WEST CLIENT TREATY 505234

14,3991.85

Osaka Works

Japan Trustee Services Bank, Ltd.
(trust account 5)

1-1-3, Shimaya, Konohana-ku,
Osaka 554-0024, Japan
Main Products:
Electric conductors, electric power cables,
power line construction and engineering,
information systems, control systems,
high-frequency products, hybrid products

14,129

1.81

Japan Trustee Services Bank, Ltd.
(trust account 9)12,283

1.57

STATE STREET BANK AND TRUSTCOMPANY 505225

1 1 , 358

1.46Japan Trustee Services Bank, Ltd.
(trust account 1)

1 0, 521

1.35

Total

225,452

28.9

Itami WorksSHARE PRICE RANGE

Financial Information

1-1-1, Koyakita, Itami,
Hyogo 664-0016, Japan
Main Products:
Special steel wires, powdered alloys,
sintered powder metal products, diamond products,
compound semiconductors

(Yen)
2,200
2,000

Yokohama Works

1,800
1,600
1,400

Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.
2017

COMMON STOCK
Issued: 793,940,571 shares

NUMBER OF SHAREHOLDERS
59,512

BREAKDOWN OF SHAREHOLDERS
Financial Institutions

317,590 thousand shares
40.00% (Shareholders: 202)2018

Corporate Information

1, Taya-cho, Sakae-ku,
Yokohama 244-8588, Japan
Main Products:
Optical fiber cables, telecommunication cables,
optical connectors, optical fiber fusion splicers,
optical amplifiers, optical transmission components

Basis for Growth

Japan Trustee Services Bank, Ltd.
(trust account)

Business Review

Shareholding
Percentage(%)

Overview

Number of
Shares held(Thousands)

5-33, Kitahama 4-chome, Chuo-ku, Osaka 541-0041, Japan

Securities Companies

STOCK EXCHANGE LISTINGS
Three domestic stock and securities exchanges:
Tokyo, Nagoya, and Fukuoka
Ticker Code: 5802

22,307 thousand shares
2.81 % (Shareholders: 64)

Other Corporations

35,848 thousand shares
4.51% (Shareholders: 647)

Individuals and Others

SHAREHOLDER REGISTER MANAGER
Sumitomo Mitsui Trust Bank, Limited.
1-4-1, Marunouchi, Chiyoda-ku, Tokyo, 100-8233, Japan

88,418 thousand shares
11.14% (Shareholders: 57,798)

Foreign Investors

315,922 thousand shares
39.79% (Shareholders: 800)

Treasury Stock

13,856 thousand shares
1.75%

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