2024 New Year's Message from the President (Summary)

Takeyuki Takahashi, President & CEO and Representative Director of MITSUI E&S Co., Ltd., has delivered his New Year's message to all personnel, including those of Group companies. It is summarized below.

As we welcome the year 2024, I would like to offer my best wishes for the New Year.
To begin my New Year's greetings, I would first like to express my deepest condolences to the victims of the 2024 Noto Peninsula Earthquake and Haneda Airport plane collision, and my heartfelt sympathy to all those who were affected by the disaster and those who were involved in the accident.

Last year in May, the classification of COVID-19 under the Act on the Prevention of Infectious Diseases was changed, and our lives are now returning to the way they were before the pandemic. On the other hand, Russia's invasion of Ukraine has now continued for over a year, and the outlook for the global economy has become even more uncertain, with the intensification of confrontations between the US and China and escalating tensions in the Middle East. Looking at abnormal weather conditions such as extreme summer heat and heavy rains that have occurred in various parts of the world, including Japan, it can be said that there is no time to waste in working to create a sustainable society.
In April last year, we transitioned from a pure holding company structure to a business holding company, and made a new start under the company name MITSUI E&S Co., Ltd. Under the new structure, we will integrate business with management to increase cohesiveness and we will also speed up the formulation and execution of strategies to accelerate the implementation of growth strategies.
Nine months have now passed since we began this new system. As we enter the new year, I would like to discuss the current situation of our Group and ask everyone to observe the following points.

The first point is about the current status of our Group.

Last fiscal year was the final year of the Mitsui E&S Group's Business Revival Plan, which began in fiscal 2019. In FY2022 we were able to achieve profitability in terms of operating income, ordinary income, and final profit and loss for the first time in six years and return to paying dividends on common stock. We are finally returning to being a normal, publicly traded enterprise. Under these circumstances, the new MITSUI E&S was launched, and going forward we must continue to show our shareholders, financial institutions, and other stakeholders a newly reborn form as a result. We will work with resolute determination to achieve the profit target of 2023 short-term business plan.

As the second point, I would like to talk about systemic and institutional reforms.

Seeing the timing of the transition to a business holding company as an opportunity to shake up the company, we implemented reforms on various structures and systems.
In June of last year, we transitioned to a company with an Audit and Supervisory Committee, with the aim of making our management team more compact and leaner. As a result, we have been able to improve the speed and agility of our decision-making, and create an environment that facilitates deeper discussions on business strategies and projects that carry risks. We also worked on reforms to our HR system. We overhauled the HR system for the first time in about 20 years (for the first time since 2004). In this latest round of reforms, we have replaced our old HR system that was still characterized by seniority-based HR practices with a more heavily job-based HR system, with a focus on individual roles. Through the development of mechanisms for clarifying how the business performance of each employee is connected to groupwide strategy and for fairly evaluating the results achieved, the current system clearly shows how the results of work done by individual employees helps them to progress to the next career stage. I hope that the growth of each individual and the growth of the company will become firmly linked and connected as a result of this.
The rotation system will begin in earnest this year. I myself have learned much by putting myself in a different environment and I have experienced how an individual's true ability is put to the test when he or she is put in a different environment. In addition to their individual specialties, I hope that, through experiences in difference environment, employees would become human resources which can demonstrate their true abilities.

As the third point, I would like to explain about the early accomplishment of our growth strategy.

Due to dramatic changes in the Company itself and in our business environment, we launched the Mid-Term Business Plan 2023 in FY2022, one year ahead of schedule. The first thing we need to do in this Mid-Term Business Plan is to solidify our immediate footing. In other words, we will further enhance our strengths in the fields of marine engines and port cranes while adding further value from green and digital strategies. It is also important to nurture the third pillar of our operations after marine engines: port cranes. In terms of driving growth businesses, with "green" and "digital" as our keywords, we are also working on the provision of products and services to the next-generation energy supply chain centered on various industrial machinery, entry into the social infrastructure development business as a response to labor shortages, and the maintenance business for each of our products through monitoring.
This year marks our entry into the second half of the Mid-Term Business Plan 2023. We must work in accordance with the growth strategies and grand designs drawn up by each business division, group company, and organizational unit, resolve each priority issue at an early stage, and demonstrate our strengths in a visible form.

Based on these points, I would like to ask all employees to do the following.

The business environment is changing more and more rapidly, so I would like to ask of all employees is to increase creativity and speed. We must work with a sense of urgency to realize ideas, and we must have speed, while maintaining flexible thinking and diverse perspectives that are not bound by existing frameworks. Of course, this requires a solid grand design, and I would like you to all to come up with more ideas for new businesses that can be realized from a market-in perspective.
In order to achieve sustainable growth and increase corporate value, I believe that it is important for each and every one of us to work with passion, energy, and enthusiasm, and for the products and services we provide to contribute to solving social issues.

The next point I would like to make concerns safety and health and compliance.

Safety and health are our top priorities. As I always say, I would like each and every one of you to make a habit of safety awareness in your own work, improve your ability to predict danger, and always put safety first. In addition, I ask that you take care of your own mental health, and also take care of others in your workplace line to enable early detection and appropriate response.

In conclusion

In order to make this a year in which the seeds we have sown with our growth strategy take root and achieve major growth, let's work together to earn the trust of people and contribute to society through engineering and services, with a sense of our mission of delivering solutions to social issues.