P.11 Message from the President and CEO

11 Introduction

Message from President and CEO

Q8.

How will you evolve your people and organization as sources of competitive advantage in the AI era?

How we use AI has itself become a source of competitive advantage. AI has dramatically enhanced our ability to gather and analyze information, transforming both the quality and speed of our decision-making. However, it is ultimately people who must master AI and make the final decisions. The challenge, therefore, lies in how to combine human experience and expertise with digital technology and AI. DAIS, which I mentioned earlier, is based on this same thinking. When it comes to AI and our people, I often say that, in the end, what matters most is the quality of our people. Specifically, this means people with the ability to build relationships of trust with business partners, engage with those around them, inspire others with a vision, and listen with empathy while understanding other peopleʼs viewpoints. I believe these uniquely human qualities will become even more important as AI continues to evolve. In the end, success in our business comes down to whether customers and partners see us as people and a company they want to work with. Even in the age of AI, people will ultimately remain the source of our competitive advantage. To maximize our peopleʼs potential, our organization must also evolve. As I mentioned earlier, “self-direction and self-discipline” are critical to each organization. This is because people on the frontlines, who understand their businesses best, must make self-disciplined decisions and determine the best path to growth. In FY2024, we abolished our division and product-based organization and replaced it with a strategic business unit (SBU) structure. An SBU is a business unit that operates under a unified strategy. We established a system in which SBU managers articulate their own strategies, and frontline teams can make self-disciplined decisions and execute them. In addition to these organizational reforms, we overhauled our budgeting system in FY2025. We felt that under our previous budgeting system, achieving the budget itself had become the goal. We therefore shifted our focus from meeting the budget to achieving growth. Through these organizational and system reforms, a culture of aiming for higher levels of growth is steadily taking root across each of our organizations. However, changing systems alone is not enough to embed this mindset throughout our organizations. I continue to host SHINGO CAFÉ, which I mentioned earlier, as a way of communicating my own thinking directly to employees. In July 2026, we held the 80th SHINGO CAFÉ. At these sessions, I engage with employees as equals and share my thoughts in response to their questions and suggestions. Participants often say things like, “Now I understand what that part of the medium-term management plan really meant. It makes sense to me now.” Simply communicating a strategy down through the chain of command does not convey its true intent. I believe a strategy only becomes an organizational strength once people truly understand it and put it into practice in the field. Through this ongoing dialogue, we will evolve into an organization where every individual thinks autonomously and continually takes on new challenges.

Q9.

Finally, could you tell us about your commitment to sustainably enhancing corporate value?

The Sumitomo Corporation Group is supported by a diverse range of stakeholders around the world. That is precisely why we will continue engaging in dialogue with them. We aim to strike a balance between growth investments, shareholder returns, and financial soundness, while pursuing both social and economic value as we steadily deliver profit growth and improve capital efficiency. During a recent conversation with Miho Takagi, a former Japanese national speed skater, I was particularly struck by her words: “Standing still means going backwards.” The same applies to companies. If we rest on our past successes, we will fall behind relative to others as external conditions change. I believe that people and organizations that continually take on new challenges rather than standing still will enable us to become “No. 1 in Each Field.” Medium-Term Management Plan 2026 is merely a milestone on our growth journey. The Sumitomo Corporation Group will continue undergoing transformation as it strives to become “No. 1 in Each Field” and achieve sustainable growth in corporate value. We are committed to realizing our corporate message, “Enriching lives and the world.”