FUTABA INDUSTRIAL CO.,LTD.

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Investor Relations

Message from Management

Performance for the fiscal year ending March 31, 2016

During the year ended March 31, 2016, in terms of world economy, the U.S. economy continued the recovery trend, while the European economy showed a modest recovery. However, in Asian region, Chinese economies continued to slowdown, while there has been signs of recovery in Indonesia and the like. The domestic economy has remained at gradual recovery due to the government’s economic measures.

In the automotive industry, which is Futaba’s main customer, North American market remained steadily and European market shows signs of recovery, while Chinese market shows a decrease in growth rate due to the economic slowdown. In the domestic market has been sluggish due to the impact of tax increase on the light car and situation of the market recovery is uncertain.

Under these circumstances, Futaba has been working aggressively on activities such as the review of production systems, the improvement of production efficiency, the promotion of cost improvement, review of supply chain, and review of cost reduction such as logistics cost.

Net sales was 437.6 billion yen (year-on-year increase of 3.5%) and operating income was 3.1 billion yen (year-on-year decrease of 28.5%), ordinary income of 600 million yen (year-on-year 69.9% year), and the net loss attributable to parent company shareholders was 1.1 billion yen ( previous year; net income attributable to parent company shareholders was 1 billion yen) on consolidated financial results.

Forecast for the fiscal year ending March 31, 2017

Our consolidated forecast for the fiscal year ending March 31, 2017 is net sales of 407 billion yen (a year-on-year decline of 7.0%), operating income of 4 billion yen(a year-on-year increase of 28.1 percent) ordinary income of 2 billion yen and net income of 500 million yen (compared to the previous year).

Future effort

In the automotive industry, even though global competition is expected to intensify, further growth is expected in the future. In this environment, Futaba will work on the utilization of core technology into new business fields and strengthening one-of-a-kind technology, while strengthening the basics of Monozukuri, along with the efforts to ensure the quality, further structural reform and promote the manufacturing reform.

(1) Enforcement of the basics of “Safety, Quality, and MONOZUKURI”
(2) Structural reformation and reinforcement of the cost management to secure a stable income
(3) Optimization of facilities and effective distribution of management resources
(4) Further development of core technologies and utilization in new business fields
(5) Reinforcement of human development and organizational capacity.

While working on these issues, we will fulfill our social responsibilities like legal compliance and environmental management and will strive to be a company trusted by all the shareholders.

We wish our shareholders’ continuous understanding and support to Futaba Industrial Co., Ltd. and Futaba Group companies.

June, 2016 Hiroyoshi Yoshiki President

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