Global Long-term Management Plan (GLP2026)

The original target of GLP2023 was to achieve 140 billion yen revenue and 27 billion yen operating profit in FY2023. However, we fell short of the target with the actual result of 110 billion yen revenue and 9.0 billion yen operating profit. When we were planning GLP2023 in FY2020 we forecasted the 5G test instrument market should hit the peak in FY2023. This forecast was based on past 3G and 4G peak curves, and mobile operators and smartphone vendors had the same kind of forecast.

However, as we entered the GLP2023 period, 5G business had continued to slow down due to the influences of various challenges such as spread of COVID19, US-China Trade War, parts shortages, and high inflation. As the result, the revenue from 5G related test instruments in FY2023 significantly decreased compared to FY2020. Meanwhile, as we launched businesses in new areas during the three years of GLP2023, we were able to secure revenue of 110 billion yen.

With GLP2026, we aim to achieve the consolidated revenue of 140 billion yen, operating profit of 20 billion yen with the operating margin of 14% in FY2026 by growing the new buds we cultivated in GLP2023 into the business pillars. It is anticipated the T&M market will face a difficult environment in the three years of GLP2026 as it will be the transition period from 5G to 6G, but at the same time, it will be an important milestone for us to become a 200 billion yen company in FY2030. We will accelerate business growth in new areas with the combination of M&A and organic growth, and further, will be ready to capture upcoming demand of the 6G business.

Human resources is a very important factor in order to expand business in the new areas. We will commence Anritsu SKILLs training center (A-SKILLs) from April. In the A-SKILLS, it enables employees to acquire technical and sales skills for general purpose products, and EV/battery related products, hence we double the number of human resources for new areas in three years.

Since 2021, the worldwide smartphone shipments has continued to decline, and the test instrument market for 5G smartphones has been in gradual decline. However, we believe that the market for test instruments related to the 5G utilization field will continue to grow moderately, and as the test instrument market for 5G smartphone recovers we expect the 5G test instrument market to continue until around 2027. In addition, FR3 (7GHz- 15GHz), the candidate frequency band for use in 6G has been determined in WRC-23, and research for the realization of 6G is starting in Korea and the US. 6G is expected to be standardized in 3GPP Release 21 with the aim of starting service in 2030, and we expect the demand for test instruments will start in earnest around 2027.

Generative AI, which emerged in 2023, has driven data center speeds to higher speeds, and upgrading demand from 400GE to 800GE is strong. In addition, demand for 1.6TE speedup is also moving forward. We believe that moves toward network sophistication, such as all-optical networks, will drive test instrument demand for the networks.

Cautionary Statement

All information contained in this release which pertains to the current plans, estimates, strategies and beliefs of Anritsu Corporation (hereafter "Anritsu") that is not historical fact shall be considered forward- looking statements of future business results or other forward-looking projections pertinent to the business of Anritsu. Implicit in reliance on these and all future projections is the unavoidable risk, caused by the existence of uncertainties about future events, that any and all suggested projections may not, come to pass. Forward-looking statements include but are not limited to those using words such as "believe", "expect", "plans", "strategy", "prospects", "forecast", "estimate", "project", "anticipate", "may" or "might" and words of similar meaning in connection with a discussion of future operations or financial performance.

Actual business results are the outcome of a number of unknown variables and may substantially differ from the figures projected herein.
Factors which may affect the actual business results include but are not limited to the economic situation in the geographic areas in which Anritsu conducts business, including but not limited to, Japan, Americas, Asia, and Europe, changes in actual demand for Anritsu products and services, increases or decreases in the competitive nature of markets in which Anritsu sells products or buys supplies, changing aptitudes at providing services, and exchange rates.

You also should not place reliance on any obligation of Anritsu to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise. Anritsu disclaims any such obligation.