◯ At IR Day in May, I talked about the new business structure created byintegrating AV products such as TVs videos and Audios and the aim toachieve targets by fiscal 2019.

◯ Today I will explain our progress and business strategy.

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◯ Today’s presentation includes 4 points.

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◯ Overall sales for fiscal 2015 are expected to be almost unchanged comparedwith the previous year despite the negative impact of approximately 60.0 billion
yen due to the exit from Plasma TV business.

◯ Expected operating profit of 52.0 billion yen is likely to be achieved on aconsolidated basis, unchanged from the May forecast.

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◯ In Consumer Electronics, we have been focusing on business expansion in
Asia as well as Japan. In particular, refrigerators and beauty products in Asia
are showing favourable sales.
◯ In addition, profitability in the AV business is improving on last year. AP Asia is
expected to be established next April and the preparation for this has been
going smoothly.
◯ As there was excess distribution inventory in air conditioners for household
use in China last year, we have reduced inventory drastically. 1H sales in
China increased significantly from last year due to strengthened production
competitiveness and sales channels as well as rationalization. However, withregard to large scale air-conditioners, we are still working on it in order toimprove profitability.
◯ In Cold Chain, CO2 Refrigerant products are being installed in moreconvenience stores and supermarkets in Asia due to the expansion of ourunique range of CO2 Refrigerant products.
◯ In Devices, profitability particularly in motor business improved significantly as
we have shifted our focus from household use to electronic industrial use.
◯ These were the main 1st half developments.

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◯ However, operating profit ratio in Appliances Company has not yet reached
5%. In order to achieve this target more quickly, we will first establish a morerobust corporate structure in the consumer electronics business andstrengthen premium products in order to improve profitability.

◯ In overseas markets, towards fiscal 2019, we will strengthen sales channels
and networks by focusing on air-conditioners.

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◯ Next, aiming to achieve 2 trillion yen in consumer electronics.

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◯ This chart shows demand in appliances including AV products.

◯ The global demand is expected to be approximately 32.0 billion yen in fiscal
2015. In particular, the biggest growth is in Asia while the composition ratio ofEurope is very large.

◯ Our European business size is currently small. However, we recognize that thekey to growth would depend on the volume increase in Europe.

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◯ Next, composition ratio of sales by region from fiscal 2012 to 2015.
◯ In fiscal 2012, although the volume of Japanese sales was extremely high, itcame down to 37% in fiscal 2015. Meanwhile, the volume of European sales
increased to 17%.
◯ In Japan the volume has come down due to sales decrease in TVs.
◯ In Strategic regions, we are focusing particularly on Asia and aiming ourmarketing from this autumn at wealthy customers.
◯ In Asia, we have been accelerating sales expansion of ‘made in Japan’
products and shifting to the high value-added zone.
◯ In Europe, although the sales composition of AV products such as TVs is still
high, in order to increase the composition of white goods, we have beenstrengthening premium consumer electronics with the collaboration of Gorenje.

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◯ Next, Japan.

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◯ According to Japanese income group by age, savings in 50’s and 60’s arehigh. This proportion is expected to be even higher towards 2018.
◯ We started to work on products for these consumers two years ago, in view of
future products, their preferences and marketing.
◯ That is how ‘J concept’ products were created and they have become
extremely popular since their launch in October. In particular, demand for
vacuum cleaners is so strong that we cannot supply enough products to meetthis demand and full production is expected to continue for some time.
◯ We also started to supply refrigerators and air-conditioners at the end of
November. Although refrigerators are only supplied through specialized
channels, the orders are increasing steadily. When we start to supply toretailers In February, the orders are expected to increase considerably. Taking
into account the current trend, the orders for J concept products will continue
to rise.

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◯ These are ‘J concept’ products.

◯ The specific feature of these air-conditioners is directing warm air (up to 35
degrees) to the feet. This feature was in response to feedback from 30,000
seniors.

◯ With regard to refrigerators, seniors’ priority is keeping vegetables fresh in the
middle compartments of the refrigerator (at the average waist height of 88
centimetres).

◯ Vacuum cleaners are the world’s lightest at 2 kg; there are no other products
as light as this.

◯ This is why customers like our products so much.

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◯ Next, Asia.

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◯ The market size of Asia both developed and advanced countries is expected to
grow undoubtedly.

◯ There are two classes, Next Rich and Middle Class. Although the portion of‘Next Rich’ is only 3%, this accounts for 4.6 million households and demand in
consumer electronics from this class is 560 billion yen.

◯ Middle Class accounts for 28%. This is equivalent to 40 million households
and demand in consumer electronics from them is 540 billion yen.

◯ As total demand of these two groups is approximately 1 trillion yen, we havestarted to focus on these groups for product ranges and marketing since thisyear.

◯ We started the ‘Aspiration marketing’ from October with ‘Japanese hospitality’which non-Japanese manufacturers cannot copy.

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◯ In Asia, there is a strong yearning towards ‘Made in Japan’ products.
◯ First, refrigerators and washing machines were introduced to retailers andspecialized shops as the premier products of ‘Made in Japan’. Loyal
customers who are in the affluent class buy these products.
◯ In order to lock in these loyal customers, we offer thorough after-service andour reputation spreads by word of mouth. We also collaborate with large
developers in the creation of new large-scale residential estates in markets like
Singapore.
◯ Collaboration with local government has allowed our products to be displayedin the showrooms of high-class condominiums.
◯ With regard to caravan cars and roadshows, we are directly promoting our
products to end-customers in the centres of main cities as well as to retailers.
◯ There are also tie-ups with TV programs. For example, we rent out our
products to the cookery programs in Asian countries.

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◯ In order to increase product line-ups and improve sales, we have to increase
the portion of high value-added products.

◯ We also receive requests for lower middle-range products mainly in emerging
markets. As it is difficult to secure profitability from these product ranges, weare taking a major step.

◯ Middle and high-end products are developed in-house while lower middle andlow priced products are developed by ODMs.

◯ In this way, we will improve average prices and improve profitability.

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◯ For this purpose, we have decided to establish AP Asia.

◯ AP Asia, which is not controlled by headquarter in Japan, has unified functions
from research, designing and marketing in order to make quick decisions andrespond to market changes speedily.

◯ Management class has already been deployed and AP Asia will start
operations next April.

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◯ Next Europe.

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◯ In Europe, the average price of white goods is extremely high and this is ahigh-end market.
◯ The demand for built-in kitchens is considerably high and accounts for 40% of
total demand. Based on this, since last year we have been strengthening thebuilt-in business.
◯ In Europe, houses are used for between100 and 200 years with remodellingover the years without constructing new houses. Therefore, the extremely
high-end of built-in kitchens are required which fit to the 100 and 200 years’house. There is demand for 2 million yen of built-in kitchens but they are used
for a long time.
◯ In order to meet such demand, we will strengthen the production range of builtin equipment which includes IH cooking and washing machines at our
microwave oven factory in U.K. In addition, we will collaborate with othercompanies to strengthen our product range, as it is difficult to do everything by
ourselves.

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◯ There is demand for premier zone and built-in equipment in Europe.

◯ In IFA this year, we displayed the products which will be introduced in 2015
and 2016. We promoted built-in equipment as well as the revival of Technics
products.

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◯ The first development in Europe was very high premium products with very
stylish design.

◯ Although those products received good reviews, it was not a profitablebusiness as the production was in China and imported from there.

◯ However, profitability improved significantly as Gorenje supplies theseproducts.

◯ We will collaborate with local companies in other products such as
refrigerators, washing machines and built-in kitchens.

◯ In particular, we have already started specific collaboration with regard tobusiness development for built-in kitchens.

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◯ Another approach is to establish Technics premier brand.

◯ Technics is a very well-known brand with highly positive reviews, especially in
the U.K. and Germany, and there was strong demand for the revival of theTechnics brand.

◯ The revival of Technics was announced at IFA last September and it will be
introduced in December in Europe and next February in Japan.

◯ We will start ‘Technics trucks’, with distribution service (few hundred thousandhigh resolution music) when we launch Technics equipment in the U.K. andGermany.

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◯ Finally, B to B Solution.

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◯ There are differences between Japan, China and Asia in BtoB business.

◯ In Japan, product planning, development, sales and service has been unified
and developing since April this year.

◯ In China, our business includes product planning, development, sales, service
and maintenance in Dalian’s former Sanyo site.

◯ In Asia, manufacturing and sales are main activities. We are working toestablish a similar structure to that in Japan and China, which will becompleted during fiscal 2016.

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◯ In addition to air-conditioners for halls, we develop large-scale air-conditioners
which have been installed in public facilities such as Osaka station in Japan.

◯ In addition, absorption chiller are manufactured in Gunma, Japan. We are oneof the few companies which produces these products in Japan.

◯ We also produce heat pump air-conditioners for gas and supply to schools.

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◯ In cold chains, we have showcases for stores, refrigerators for logistics andrestaurants, etc.

◯ We are the only company which has CO2 refrigerant and remote monitoring
systems.

◯ By leveraging this strength, we are strengthening the product ranges in Japanand China, expanding sales channels as well as strengthening the businessmodel by making use of remote monitoring systems.

◯ On November, 21st we received the first Encouragement Prize of Japanese
Minister of Education, Culture, Sports, Science and Technology, for CO2
refrigerate system in Japan.

◯ We will offer proactively in the future in order to capture Olympics-related
business in large air-conditioners and cold chains.

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o Finally, conclusion.

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◯ We have to think about future global sales channels by taking into
consideration the current trend of yen weakening and optimal manufacturing
sites .

◯ We will complete the creation a stronger structure during fiscal 2016 and aim
to be a global top class appliance company in 2018.

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◯ Thank you for your continuous support.

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