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Ichiro Tsuge, President & CEO

I want to take this opportunity to express my sincere gratitude to our stakeholders, including shareholders and other investors, for their continued support of ITOCHU Techno-Solutions Corporation (CTC). I became the president and CEO on . In fiscal 2019, the second year of the three-year Medium-Term Management Plan – Opening New Horizons –, which establishes the vision “Take responsibility for the evolution of the IT industry, as the industry's leading company,” CTC made strong progress toward achieving the targets in the Plan. Here I will report on progress and explain key initiatives for fiscal 2020, the final year of the Medium-Term Management Plan.

Market conditions and business results in fiscal 2019

The business environment remained generally strong, as IT investment recovered in the manufacturing and distribution sectors in the information service industry, due chiefly to a high level of corporate earnings and an improvement in the employment situation.

In its financial results, the CTC Group recorded a year-on-year increase in revenue and income in fiscal 2019, achieving higher results than initially expected. In addition to revenue and all income or profit items, orders received and the order backlog also rose to a record high after the management integration of ITOCHU Techno-Science Corporation and CRC Solutions Corporation in . ROE also moved upward to 12.6%, exceeding the 12% target set in the Medium-Term Management Plan, and reaching a record high after integration.

Progress in the Medium-Term Management Plan and key initiatives for fiscal 2020

The Medium-Term Management Plan developed in reveals the fields CTC is trying to venture into in an era in which IT will play a more important role than ever before, by leveraging its own strengths. In fiscal 2020, CTC will continue to implement measures to open new horizons toward the achievement of the Plan.

New Horizons

Horizon 1 Go Upwards!
Challenge Business Transformation

Progress in fiscal 2019
Provided CTC DX Solution for Retail, which comprehensively supports the realization of smart stores utilizing new technologies such as AI and IoT, jointly with ITOCHU Corporation.

Key initiatives in fiscal 2020
Actively promote the enhancement of the DX business and business application development using new technologies and methods.

Horizon 2 Go Forwards!
Sharpening our Advantages

Progress in fiscal 2019
Received orders for network building projects for 5G services from telecom carriers.

Key initiatives in fiscal 2020
Aim to further expand 5G-related businesses and focus on Lift, the process of moving systems owned by customers onto cloud computing platforms, and Shift, the process of adapting them to the cloud systems.

Horizon 3 Go Outwards!
New Coverage, New Region in Globe

Progress in fiscal 2019
Acquired two Indonesian IT companies to further expand business in the ASEAN region.

Key initiatives in fiscal 2020
Strengthen the framework for overseas business, cooperate with start-ups, and actively expand the development of open innovation-style businesses, including venture funds.

Horizon 4 Consolidate Footholds!
Stabilize Management Infrastructure

Progress in fiscal 2019
Established the ITOCHU Techno-Solutions Future Foundation for the purpose of fostering the IT skills of the next generation of young people. In addition, drafted the CTC Environmental Declaration, an environmental target aiming to achieve zero CO2 emissions by contributing to measures to prevent global warming and the achievement of the Sustainable Development Goals (SDGs).

Key initiatives in fiscal 2020
Make ongoing efforts to strengthen the management and governance of the Group and further enhance shareholder returns.

Message to Shareholders

CTC recognizes the return of profits to shareholders as an important management issue and has increased the year-end dividend for fiscal 2019 by 3 yen from the initial forecast, to 30.5 yen. As a result, combined with the interim dividend of 27.5 yen, the annual dividend has increased 8 yen from the previous fiscal year, to 58 yen. This is the 11th consecutive year that the dividend has increased, and the consolidated payout ratio has become 47.1%. CTC plans to pay an annual dividend of 63 yen per share for fiscal 2020.

CTC will meet shareholders’ expectations by continuing to make efforts to sustainably enhance its corporate value, and I ask for your continued support.

Ichiro Tsuge
President and Chief Executive Officer

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