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## Business Results and Forecasts 

Q1: How do you view the JS Group’s business performance for the year ended March 31, 2010? Also, what is your outlook for the year ending March 31, 2011, which is the final year of the medium-term management vision? 

## A1: During the year ended March 31, 2010, we laid the foundation for future growth. In the year ending March 31, 2011, we will do our best to achieve operating income of ¥50.0 billion. 

n the year ended March 31, 2010, we endured an extremely difficult business environment in which new housing starts dropped 25.4% year on year from 1.04 million to 0.78 million. I 

Reflecting this environment, our sales declined 6.1% from the previous fiscal year to ¥982.6 billion. However, thanks to structural reforms we achieved a 1.5% increase in operating income to ¥26.0 billion. I believe this testifies to the fact that the steps we took in the year ended March 31, 2010 have laid the path for future growth. 

I will go into more detail about this later, but a key theme in the context of efforts to improve Group operations in the year ended March 31, 2010 was “Structural Reforms and Synergy Creation.” 

## Three M&As 

We acquired the Asia-Pacific division of American Standard, the global plumbing fixtures brand; leading Japanese kitchen system manufacturer Sun Wave Corporation; and sash competitor Shin Nikkei  Company, Ltd. 

In order to create a group that can generate profits even without growth in Japan’s housing market, we cut costs, reduced SG&A expenses and merged overlapping operations. The thr ee M&As in the year ended March 31, 2010 were conducted to achieve greater results in this context. 

We pushed through reforms in the year ended March 31, 2010, looking at what we could do to make living spaces and living environments better with the Group’s own housing-related products and services. In the year ending March 31, 2011, we will continue to manage the company in a way that balances a defensive approach involving further restructuring with an aggressive one to drive growth. The Japanese government is implementing strategies to improve living spaces, such as introducing the eco-point system for housing. Capitalizing on this, we aim to become a corporate group that can offer a one-stop service for house building materials. Our profit target for the year ending March 31, 2011 is operating income of ¥50.0 billion. 

## The Year Ending March 31, 2011 Targets 

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