Happy New Year!

Let's review the way the global economy looked last year. The US economy was showing signs of an underlying slowdown, but internal demand pulled the market up, and it has since rallied strongly. The European economy has also seen a healthy upswing in exports, and shows momentum towards a gentle recovery, while Asia's economy as a whole is also shifting into growth. In Japan, despite fears of a surge in the price of crude oil and other raw materials, the strong euro and the weak yen have acted as a following wind for export industries, and a basic trend towards recovery continues in the background.

Amidst these economic conditions, we at Konica Minolta have rigorously made efforts to raise our performance, and in our interim results for the year to March 2007, we have been able to exceed our original forecasts for both sales and profits. The structural reform we carried out with the aim of scaling down our photo imaging operation went according to plan, and our efforts to strengthen our operations, mainly in the sectors of office equipment and optics, have steadily borne fruit.

Last year, the Konica Minolta Group proclaimed its intent to transform itself into a top contender in the industry, and unveiled "FORWARD 08," its new medium-term business plan. The fundamental policy behind this plan is to leverage the group's collective resources to achieve growth and build a new corporate image.

This year, we shall be forging steadily ahead with our "genre-top strategy," which is aimed at accelerating growth even further in the equipment/services business group and the component business group, thus establishing a presence in the top group in each of our business fields. Market conditions and competition tend to become increasingly tough, but we intend to make great strides nonetheless.

In addition, it will become even more vitally important for companies to gain trust and respect of society. By promoting corporate social responsibility (CSR) programs, we shall continue working hard to win society's recognition as an essential group of companies, and to increase our corporate value.

In my view, the most important requirement for attaining corporate growth and increasing corporate value is "self-transformation free of preoccupation with past successes." Today's most successful companies have reached their current position by constantly reinventing themselves, and taking on new challenges, throughout their history. Having taken on a new challenge of its own, Konica Minolta too must cease to dwell on past successes and adopt the habit of "aggressive transformation."

In all the business areas in which Konica Minolta is active, a rapid transformation is taking place from digital to networked technology. Because of this rapid change, new opportunities are opening up. This means that we should be alert to such changes, increase our speed, and link it up with the activities of our own companies. Under the banner of our corporate slogan, "the essentials of imaging," the Konica Minolta Group is going to establish itself in the public awareness as a truly global company leading the market in the field of imaging.

Besides wishing you the best of health and happiness this year, I would like to assure you that your continued support for the Konica Minolta Group will be greatly appreciated.