Market Environment and Business Performance for Fiscal 2016

 continued a moderate recovery thanks to the national government's economic policies and the financial policies of the Bank of Japan, while the financial markets significantly fluctuated with yen appreciation due to the slowdown in economic growth in China and emerging countries and the issue of Brexit. A sense of uncertainty about the future thus remained throughout the year. In the home appliance distribution industry, the prolonged market downturn due to reactionary demand decreases after the end of the eco-point system and the shift to digital terrestrial broadcasting seems to have bottomed out. Under such severe market environment, years of structural reform in Yamada Denki Group have started to yield results steadily and significantly contributed to improving the overall business performance.

Progress in Structural Reform under the New Management System

 Yamada Denki publicized a new management system centering on the Chairman, Vice Chairman and President in January 2016 and started it from April 2016.

 Division of roles among the three representative directors has been clarifi ed. I, as Chairman, take charge of the creation of new businesses. As Vice Chairman, ICHIMIYA promotes the structural reform and implementation of the Medium-term Business Plan, and President-Director KUWANO takes responsibility for existing businesses and human resources development. Efforts under this management system have started to yield results steadily since the latter half of fiscal 2016, and we are feeling confident in the progress of the initiatives conducted in collaboration among the three representative directors.

 Regarding the creation of new businesses, which I take charge of, we have been developing various house-related businesses as total services by organically linking new businesses and existing businesses, while looking for potential growth, dispite facing the anticipated deceleration of growth in the domestic home appliances market. We are expecting a signifi cant business improvement in FY2017 through the promotion of the structural reform and upfront investments based on the original business model to pursue broadening and deepening of the business range as a specialized home appliances merchandiser.

 Vice Chairman ICHIMIYA promotes structural reform in each sector, such as the development of products and stores, and has achieved significant progress. He has succeeded in concluding an agreement on exclusive sales of FUNAI-brand LCD televisions, etc. in Japan. President-Director KUWANO is leading the initiatives to increase sales and improve profit margins through strengthening existing businesses, centering on the sale of home appliances, and to develop human resources including female staff.

Promote Improvements for Achieving Goals Based on the Hands-on Approach

 The market environment surrounding Yamada Denki has been changing rapidly, as the result of declining birthrate and the aging population, population decline, changed generational composition, and increasing use of the Internet. We are facing a significant business turning point with new problems posed by such changes in society. Structural reform has become critical to overcome these problems. The results of the reform are starting to appear, but we have only reached the half-way point. We have made various improvements for solving problems and have reaffi rmed that answers are always found on site. We set up the management slogan for fiscal 2017 as "Achieve goals by thoroughly implementing required policies fully based on the hands-on approach!" We will fi rmly follow this idea and promote the reform steadily.

 In the process of making efforts under this slogan, all staff are required to share information of problems with responsible personnel and cooperate with each other in solving problems. Additionally, such process will facilitate the development of human resources and enable us to achieve minor goals leading to major goals.

Endeavor to Create Social Value through Sustainable Growth

 One of the strengths of the Yamada Denki Group is that we can offer both services relating to products and those relating to expert service and solutions. Fully utilizing the network of group companies, we offer integrated services for a house, covering the range of activities from the sale of a house and home appliances to renovation, insurance, Yamada Family Support, and housing finances in the financial business. What we envisage is lifelong relationships with customers from the cradle to the grave. To reach such goal, we always properly ascertain customers' needs and will actively utilize big data of members' information accumulated for years.

 Regarding the creation of new businesses, which I take charge of, the priority is to be placed on the development of the renovation business, smart house business, financial services business, and various support service business, as well as occasional M&As of these four businesses. Vice Chairman ICHIMIYA and President-Director KUWANO will also steadily promote respective priority measures and we will continue an all-out effort to achieve our goals.

 Continuing efforts to steadily cope with a wide range of challenging problems is the business attitude of the Yamada Denki Group based on its management philosophy. We are committed to making an overall effort for sustainable growth and development as a company group continually taking on challenges for the creation of social value, thereby making a social contribution.