2013 New Year's Greetings from the President, Masatoshi Matsuzaki
- Reorganizing Our Business Management System In Order to Achieve Strong Growth -

I have great pleasure in offering you my best wishes for the New Year.

In the global economy in 2012, as in 2011, the debt problems of the countries of Southern Europe cast their shadow not only over the European economy, but also the economies of the developed and developing nations, and economic growth was lower than projected at the start of the year. The strength of the yen against the euro and the US dollar had a considerable impact on Japanese industry, including Konica Minolta. While Barack Obama was re-elected as President of the United States, new leaders were appointed in France, China, South Korea and lately, Japan, all in the course of one year. Despite the hopes raised by the new Abe administration's avowed intent to implement measures to restore the Japanese economy to its former strength, we are aware that 2013 offers little hope of a marked recovery, either in the European economy, where fiscal reconstruction is the main theme, or the global economy in general.

In these economic circumstances, 2012 saw the Konica Minolta Group execute various measures aimed at attaining growth. In the Business Technologies Business, which is our strongest area, we pursued bold business alliances and M&As in the field of production print. Meanwhile, in the office equipment field, we moved away from a business model centered on sales of multi-functional peripherals (MFPs), and actively forged ahead with purchasing IT companies in various countries and regions of the West, with a view to gaining the ability to provide services such as offering IT-based improvements to our corporate customers' business processes. Besides implementing a structural reorganization spanning our business companies in order to grow our Industrial Business, we actively pursued business alliances and M&As in this field as well.

We also achieved a good deal in terms of social contribution activities. In Japan, our newest hires made visits to middle schools and high schools and held “outreach sessions” in the form of science lessons. Designed to get children interested in science, this initiative was extremely well received by teachers and pupils alike. Overseas, we donated a planetarium projection system to the Chilean city of San Pedro de Atacama. Using its latest observation results, this city renowned for space observation and research will enable visitors an immersive view of outer space. The continuous, steady effort typified by these initiatives won due recognition, and in September 2012, Konica Minolta made its first appearance on the Dow Jones Sustainability World Index.

Fiscal 2013 is the final year of our three-year medium-term business plan, G PLAN 2013. In April this year, we shall be implementing a reorganization of our business management system with the aim of overcoming the challenges contained in this plan. Konica Minolta Holdings (hereinafter “HD”), which is currently a pure holding company, will absorb 7 group companies and become a company engaging directly in business operations. The main objectives of this reorganization are as follows:

First, to strengthen the company's managerial power with regard to Business Technologies Business operations, which make up over 70% of our sales. HD will become integrated with the business companies, thus strengthening strategic functions, business management functions, cost reduction and other functions.

Second, to utilize business management resources in a strategic and agile manner. This means establishing a system that is able to prioritize group-wide synergy and greater effectiveness rather than ideas optimized for individual companies, and to allocate management resources swiftly to growth areas.

Two year ago, Konica Minolta set “Giving Shape to Ideas” as its Communication Message. This message was about realizing our customers' ideas, and manifesting those ideas in a practical form. In accordance with this message, our aim for 2013 is to deliver products and services optimized to our customers, thereby contributing to the creation of a better society, and becoming a company that is supported and regarded as essential by society.

This year, as ever, your continued support is greatly appreciated.