Message from the President

Hidekuni Kuroda Representative Director of Board, President and CEO KOKUYO Co., Ltd. Aiming to Realize a Sustainable Society by Seriously Accepting and Confronting Difficult Challenges Facing Customers and Communities

Aiming to Achieve the Goals in our Medium-term Management Plan: "Self-reform Focusing on Value Creation - Value Transformation 2018"

We established the following as our mission statement for the future: "KOKUYO aims to be a Life & Work Style Company that enriches society by providing value through our products and services to enhance customers' creativity and to deliver improvements to their Quality of Life so that they can work, learn and live better." To this end, since FY2016, under the three-year, medium-term management plan "Self-reform focusing on value creation - Value Transformation 2018," we have been working on "operating model reform" that realizes customer-oriented value creation and the "development of sustainable profitability" to enable medium- to long-term sustainable growth.

We were able to finish FY2017, the second year of this plan, with the highest gross margin since our company was listed on the Tokyo Stock Exchange. In terms of our operating margin, we were able to achieve last year's goal (5.0%) one year ahead of schedule, making FY2017 an extremely successful year financially. FY2018 will be the last year of this plan. We plan to review our goals one more time and forge ahead toward achieving them.

Implementing Work Style Reform at Our Own Workplace in the Pursuit of New Work Styles

Societal issues - such as Japan's low birth-rate and ageing population, changes in young people's values (work values), the focus on health and productivity management, and intensifying global competition - are becoming more diversified and complicated. In this context, both private and public sectors are promoting discussion and initiatives related to work style reform. As a company that has always pursued products and services that provide high added value to working people, we have for many years been facing the question of "What kind of unique work style reform can KOKUYO help to achieve?"

In 2017, in order to take our initiatives one step further and foster a corporate culture that draws out value from our employees, we established the Tokyo Shinagawa SST Office. With the goal of re-centralizing and optimizing all management resources, improving efficiency, and seeking a KOKUYO-style work style, all departments are located on a single floor in the new office. By removing physical and psychological barriers between departments to ensure smooth communication and enhanced collaboration, the new office is designed to improve workplace productivity. We believe that the experience of thinking over, trying out, and implementing such work style reform ourselves will lead to suggestions that are beneficial to our customers.

To All Stakeholders

KOKUYO has built its history of more than 100 years by earnestly facing customers' needs as they changed with the times, and finding the solution for each one. This attitude remains the same today, although these are said to be uncertain times as societal issues and corporate business activities have become entangled with increased complexity.

We are committed to continue doing our utmost to work on creating new value that contributes to the realization of a sustainable society, by placing importance on facing issues of both customers and society at large.