Message from the President

Summary of Business Results for the Fiscal Year Ended March 31, 2023During the first half of the current fiscal year (April 1, 2023 to September 30, 2023), the Japanese economy showed signs of a moderate recovery as socioeconomic activities normalized, driven by the easing of behavioral restrictions related to the transition to the new type 5 coronavirus infection. However, the outlook remained uncertain due to the continued depreciation of the yen in response to divergent monetary policies at home and abroad, concerns about a slowdown in overseas economies, and the continued escalation of raw material and energy prices amid geopolitical issues.
In this business environment, during the second year of our medium-term management plan "VISION 2030 Stage 1," the Gunze Group persistently pursued initiatives under the four pivotal strategies of "Creation of New Value," "Capital Cost-focused Management," "Environmentally Responsible Management," and "Evolution Corporate Constitution”.
By segment, the Functional Solutions business was challenged by a slowdown in demand for films due to rising prices and increased raw material and fuel costs. In the medical business, sales of new Bioabsorbable products and expansion in China progressed smoothly, although sales of medical lasers were sluggish. In the apparel business, profitability improved as sales recovered and price revisions, including those for higher value-added products, were implemented. In addition, the Lifestyle Creations business performed well, benefiting from the easing of behavioral restrictions.
Outlook for the Future

In the Functional Solutions Segment, in the plastic films business, the company will actively introduce new eco-friendly products and promote the full-scale operation of the Circular Factory™ (resource recycling factory) and the establishment of a recycling center, which will serve as the foundation for our transformation into a circular manufacturer. In addition, the company will promote production innovation through horizontal application of digital technology, while strengthening overseas sales expansion in the U.S., China, ASEAN countries, etc. In the Engineering Plastics Business, in addition to expanding the market share of products for the mainstay office automation market, the company will work to expand sales of products for health and medical care and industrial equipment, including capital investment.
In the Medical Business, through reorganization aimed at strengthening the business foundation, the company will establish a system to increase production of suture reinforcement materials and artificial skin, and accelerate business expansion by strengthening sales in the U.S. and China and continuously developing new products.
In the Apparel segment, through organizational restructuring aimed at improving competitiveness based on integrated corporate strength, the company will further expand sales through the DtoC route in the e-commerce channel and company-operated stores, which are growing in line with changes in consumer behavior, and actively promote cooperation with other companies to expand into the lifestyle market and expand sales of women's intimate apparel through differentiated new products. In terms of production, the company will strive to expand sales through automation and global optimization. In terms of production, the company will strengthen our cost competitiveness through automation and the establishment of a globally optimized production system, and will gradually promote the Net Zero Factory Plan, which consists of achieving near-zero CO2 emissions through the use of renewable energy and unmanned lines (in some areas) at our main factories in Japan.
In the Lifestyle Creations Segment, the company will promote the improvement of profitability of commercial facilities and strengthen property-specific management with a focus on investment efficiency. In the green business, we will actively engage in environmental business to capture demand for greening for the Osaka Expo and other events, and to reduce CO2 emissions. In the sports club business, we will expand our school business, provide distinctive services tailored to regional and business characteristics, and develop new business categories.
We would like to ask our shareholders for their continued support and encouragement.

June 2023