Structural Reform, Including Reorganization of Operating Companies and Organizational Streamlining

「As a further measure to improve the efficiency of non-operating assets, we will complete the sale of アクシオ, a non-core business, in July 2026.」

「At a meeting of its Board of Directors held on 21 May 2026, the company resolved to transfer all shares it holds in its consolidated subsidiary ㈱アクシオ to 横河レンタ・リース㈱ and entered into a share transfer agreement with 横河レンタ・リース㈱ on 27 May 2026.」

「Proceeding with structural reforms, including closing the Yamamoto Plant, switching to contract manufacturing and streamlining fixed costs」

「Business-structure improvement expenses comprise costs incurred during the current fiscal year in connection with the multi-year, Group-wide Production Site Reorganisation and Reinforcement project aimed at improving the Group's profitability, as set out in the previous Medium-Term Management Plan Change SWCC2022 Rolling Plan (2019) and the current Medium-Term Management Plan Change & Growth SWCC 2026. They mainly comprise costs related to dismantling, removing and relocating business assets, primarily in the Energy and Infrastructure Business and the Communication and Components Business.」

「As a sale of a significant item of property, plant and equipment during the current fiscal year, the company recorded a gain on sale of non-current assets of ¥7,394 million from the sale of land owned by SWCC Corporation in the Energy and Infrastructure Business and other operations.」

「As part of its structural reforms, the Communication Cable Business recorded costs in the third quarter associated with reviewing its optical-fiber manufacturing process.」

「Business-structure improvement expenses comprise costs incurred during the current fiscal year in connection with the multi-year, Group-wide Production Site Reorganisation and Reinforcement project aimed at improving the Group's profitability, as set out in the previous Medium-Term Management Plan Change SWCC2022 Rolling Plan (2019) and the current Medium-Term Management Plan Change & Growth SWCC 2026. They mainly comprise costs related to dismantling, removing and relocating business assets, primarily in the Energy and Infrastructure Business and the Communication and Industrial Devices Business. Business-structure improvement expenses: ¥147 million In addition, the Communication Cable Business recorded costs associated with reviewing its optical-fiber manufacturing process as part of the structural reforms.」

「Business-structure improvement expenses comprise costs incurred during the current fiscal year in connection with the multi-year, Group-wide Production Site Reorganisation and Reinforcement project aimed at improving the Group's profitability, as set out in the previous Medium-Term Management Plan Change SWCC2022 Rolling Plan (2019) and the current Medium-Term Management Plan Change & Growth SWCC 2026. They mainly comprise costs related to dismantling, removing and relocating business assets, primarily in the Communication and Industrial Devices Business.」

「Business-structure improvement expenses comprise costs incurred during the current fiscal year in connection with the multi-year, Group-wide Production Site Reorganisation and Reinforcement project aimed at improving the Group's profitability, as set out in the previous Medium-Term Management Plan Change SWCC2022 Rolling Plan (2019) and the current Medium-Term Management Plan Change & Growth SWCC 2026. They mainly comprise costs related to dismantling, removing and relocating business assets, primarily in the Energy and Infrastructure Business and the Communication and Industrial Devices Business. Business-structure improvement expenses: ¥11 million」

「These are costs incurred during the current fiscal year in connection with the multi-year, Group-wide Production Site Reorganisation and Reinforcement project aimed at improving the Group's profitability, as set out in the previous Medium-Term Management Plan Change SWCC2020 Rolling Plan (2019) and the current Medium-Term Management Plan Change & Growth SWCC 2026. They mainly comprise costs related to dismantling, removing and relocating business assets, primarily in the Energy and Infrastructure Business and the Communication and Industrial Devices Business.」

「The consolidated subsidiary 青森昭和電線㈱, classified under the Communication and Industrial Devices Business, was dissolved on 31 December 2021, and completed its liquidation on 12 January 2023.」

「At a meeting of its Board of Directors held on 29 March 2022, the company resolved to absorb and merge its consolidated subsidiaries 昭和電線ケーブルシステム㈱ and 昭和電線ユニマック㈱ effective 1 April 2023, reorganise its management structure by changing the company from a pure holding company to an operating company, change its corporate name and partially amend its Articles of Incorporation. On 24 June of the same year, it entered into merger agreements with both companies.」

「The consolidated subsidiary 青森昭和電線㈱, classified under the Communication and Industrial Devices Business, was dissolved on 31 December 2021 and is currently undergoing liquidation proceedings. Business-structure improvement expenses comprise costs incurred during the current fiscal year in connection with the multi-year, Group-wide Production Site Reorganisation and Reinforcement project aimed at improving the Group's profitability, as set out in the current Medium-Term Management Plan Change SWCC2020 Rolling Plan (2019) and the next Medium-Term Management Plan Change & Growth SWCC 2026, announced on 4 November 2021. They mainly comprise costs related to dismantling, removing and relocating business assets, primarily in the Communication and Industrial Devices Business.」

「※2 Business-structure improvement expenses comprise costs incurred during the current fiscal year in connection with the multi-year, Group-wide Production Site Reorganisation and Reinforcement project aimed at improving the Group's profitability, as set out in the current Medium-Term Management Plan Change SWCC2020 Rolling Plan (2019) and the next Medium-Term Management Plan Change & Growth SWCC 2026, announced on 4 November 2021. They mainly comprise costs related to dismantling, removing and relocating business assets, primarily in the Communication and Industrial Devices Business.」

「The consolidated subsidiary 昭和リサイクル㈱, classified under the Energy and Infrastructure Business, was absorbed and merged by the consolidated subsidiary ㈱ロジス・ワークス effective 1 July 2021. Business-structure improvement expenses comprise costs mainly incurred in the Communication and Industrial Devices Business for dismantling, removing, relocating and repairing business assets, as part of the Strengthening the Profitability of Core Businesses initiative in the Group's Medium-Term Management Plan Change SWCC2020 Rolling Plan (2019).」

「Business-structure improvement expenses comprise costs related to the reorganisation of development and production sites across the 昭和電線 Group, a measure under the Strengthening the Profitability of Core Businesses initiative in the Medium-Term Management Plan Change SWCC 2022 (Rolling Plan 2019). The company recorded ¥21 million in such expenses during the third quarter of the current fiscal year. The main items were costs related to the removal and relocation of equipment.」

「The consolidated subsidiary ㈱ダイジ, classified under the Communication and Industrial Devices Business, was dissolved on 30 September 2020 and is currently undergoing liquidation proceedings.」

「The consolidated subsidiary 多摩川電線㈱, classified under the Electrical Equipment and Components Business, was absorbed and merged by the consolidated subsidiary 昭和電線ユニマック㈱ on 1 April 2020.」

「In the winding-wire business, the company decided to integrate its domestic manufacturing companies and consolidated them under 昭和電線ユニマック㈱ on 1 April 2020. It will continue implementing business-structure reforms and measures to improve profitability.」

「On 5 November 2019, 昭和電線ユニマック㈱ entered into a merger agreement with 多摩川電線㈱, also a consolidated subsidiary of the company, with 1 April 2020 as the effective date and 昭和電線ユニマック㈱ as the surviving company.」

「In addition, during the second quarter of the current fiscal year, the company entered into a share transfer agreement with Fujikura Ltd. to acquire all shares of ㈱ユニマック, its joint venture with Fujikura Ltd. The company made ㈱ユニマック a wholly owned subsidiary on 1 October 2019 and changed its corporate name to 昭和電線ユニマック㈱.」

「The company has established 3 basic policies for continuing to strengthen its management platform and transitioning to a growth strategy.」

「On 22 May 2018, the company's subsidiary 昭和電線ケーブルシステム㈱ transferred all of its equity interest in its subsidiary 天津昭和漆包線有限公司 to 富通昭和線纜（杭州）有限公司.」

「Following the integration of the power and communications construction divisions within the consolidated subsidiary 昭和電線ケーブルシステム㈱, communications construction previously included in the Communication Systems Business has been included in the Power Systems Business since the first quarter of the current fiscal year.」

「To manage profitability in line with the actual business structure, certain materials transactions previously included in the Wire and Rod Business have been included in the Communication Systems Business since the third quarter of the previous fiscal year. In addition, following the integration of the power and communications construction divisions within the consolidated subsidiary 昭和電線ケーブルシステム㈱, communications construction previously included in the Communication Systems Business has been included in the Power Systems Business since the first quarter of the current fiscal year.」

「As part of its structural reforms, the company has actively implemented measures to improve efficiency, including reviewing production systems and reallocating personnel in the Power Systems Business, Device Business and other operations. The Group also reviewed its holding company functions to promote the basic policies of the Medium-Term Management Plan, namely structural reform and stronger efforts in growth fields. On 1 April 2017, its consolidated subsidiary 昭和電線ケーブルシステム㈱ absorbed and merged with 昭和電線デバイステクノロジー㈱ and 昭和電線ビジネスソリューション㈱, thereby advancing further improvements in productivity through organisational efficiency and strengthening the ability to respond to customer needs by consolidating management resources.」

「At a meeting of its Board of Directors held on 31 January 2017, the company resolved that its consolidated subsidiary 昭和電線ケーブルシステム㈱ would absorb and merge with its consolidated subsidiaries 昭和電線デバイステクノロジー㈱ and 昭和電線ビジネスソリューション㈱, with 1 April 2017 scheduled as the effective date.」

「Although fixed-cost reductions and other measures contributed to improvement, net sales were ¥32.520 billion, down 18.5% year on year, and operating profit was ¥466 million, down 2.8%, due to lower domestic demand from the construction and electrical-equipment distribution sectors and a decline in domestic copper prices. In addition, following a review of product-line management, certain power cables previously included in the Wire and Rod Business have been included in the Power Systems Business from the first quarter of the current fiscal year.」

「Although domestic demand for communication cables remained sluggish, the effect of fixed-cost reductions and other factors resulted in net sales of ¥4.431 billion, down 9.2% year on year, and an operating loss of ¥55 million, compared with an operating loss of ¥155 million in the same quarter of the previous year.」

「The Group will implement specific measures going forward regarding the structural reforms set out below. ① Reorganisation of operating companies and a leaner organisational structure (review of the holding company functions and reorganisation of the Group's operating companies) ② Effective utilisation of assets (optimisation and consolidation of production sites and their allocation, and consideration of ways to utilise idle land) ③ Revitalisation of unprofitable businesses (strengthening interdepartmental coordination and cooperation within the Group, and implementing fundamental reforms, including withdrawal from product lines)」