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Satoshi Masumura President and Chief Executive Officer

Satoshi Masumura
President and Chief Executive Officer
June 2021

Looking back at fiscal 2020, how do you view operating results from the perspective of sales and profits?

In fiscal 2020, the global economy experienced significant stagnation due to the COVID-19 pandemic. In this environment, net sales of the Takasago Group declined 1.4% year on year. Looking at results by segment, while products for air freshener and hand soap remained strong in the Fragrances segment, products for beverages remained weak in the Company and the subsidiaries in Japan in the Flavors segment. In the Aroma Ingredients segment, menthol, our mainstay product, remained weak, and in the Fine Chemicals segment, pharmaceutical intermediates also remained sluggish.
In terms of profits, on the other hand, operating profit increased 136% year on year, and ordinary profit and net income attributable to owners of parent also rose.
A fall in raw material prices from the previous fiscal year and the strong performance of the Fragrances segment at overseas subsidiaries, as well as a fall in some expenses due to the impact of the COVID-19 pandemic contributed to the increase in profits.
In fiscal 2021, the economy is expected to improve, albeit moderately, as countries seek a balance between containing COVID-19 and encouraging economic activity, but considerable uncertainty is expected to remain.
Net sales of the Takasago Group are expected to remain nearly flat, increasing 0.4% year on year. Profits are expected to decline given the return of some expenses, which decreased in the fiscal year under review due to measures to prevent COVID-19, and an increase in R&D spending and selling, general and administrative expenses for future growth.

Please describe your Corporate Philosophy, Corporate Mission and Vision 2040.

The wording of "Contributing to Society through Technology" is a universal principle of the Takasago Group, and it has been the Corporate Mission that has supported us for 100 years since our founding. However, having recently reached the significant milestone of the 100th anniversary of our founding, we have incorporated the identity of Takasago in our Corporate Mission to change it to the new wording of "create new value through innovation rooted in kaori (aroma)" and changed the existing Corporate Mission to a Corporate Philosophy.
Vision 2040 is a vision for the Takasago Group in 2040-20 years from now-which all employees around the globe can empathize with and aim for, based on the Corporate Philosophy and the Corporate Mission.
We have expressed the concept of Vision 2040 using the slogan "Care for People, Respect the Environment." In aiming to create a more enriched society in which everyone can excel, we use the word "care" to express the idea of always standing in the other person's shoes and thinking with them. We hope that Takasago International Corporation will remain a company that creates a future where people can be well physically, mentally and socially. Needless to say, we cannot manufacture goods if we do not consider human health and the global environment.
The four items following the slogan express these ideas in more specific terms, each showing our attitude as a company, and as individual employees.

Please describe the three-year mid-term management plan which begins in fiscal year 2021.

We have named our new three-year mid-term management plan, beginning in FY2021-the 101st year since our founding-the New Global Plan-1 (NGP-1). The NGP-1 consists of Three Basic Directions, Five Pillars and Seven Priority Issues.
The Three Basic Directions are expanding growth overseas, improving profit in Japan and promoting sustainability.
In the past, our profit structure depended on generating stable profits in Japan at a time when profits overseas were not stable. In recent years, however, both net sales and operating profit have been growing consistently at our overseas bases, and they support the business performance of the Group as a whole.
In the NGP-1 period, we will aim to continue achieving growth in overseas markets.
The Japanese market is not expected to see significant growth, and in recent years this has continued to pose a challenging situation in terms of profits.
Despite significant growth overseas, however, domestic sales still account for 40% or more of total sales, and we therefore aim to improve profit in Japan to make it a region that plays a role as a base for generating stable earnings.
In addition, promoting sustainability is one of our basic policies from the perspective of achieving Vision 2040, and achieving business growth in the long term.
The Five Pillars are the same as in the previous Mid-Term Management Plan. During that period, results were greatly affected by soaring raw materials prices in the second year, and in the third year, we were unable to address and solve issues amid the COVID-19 pandemic. In this environment, we will continue to address these pillars in NGP-1.
Based on the Three Basic Directions and Five Pillars, we have chosen Seven Priority Issues that we should address in order to advance towards Vision 2040. These are issues that we addressed in our previous mid-term management plan, One-T, and should deepen in NGP-1.
The Tagasago Group will continue to grow by setting Vision 2040 based on a new Corporate Mission.
We aspire to share the Group’s determination to achieve further growth with shareholders and we look forward to their continued support on a long-term basis.