TIRE BUSINESS

Sumitomo Rubber Industries14SPORTS BUSINESSM-FIL seriesFISCAL 2005 RESULTSenjoyed a positive reaction.Sales in the Sports business were down Overseas, sales of the SRIXON brand’s4.6% year on year to ¥54,748 million. golf clubs and balls were strong in their leadingmarkets in North America, Europe, AsiaOperating income dropped 24.7% to ¥8,305million.and Australia. The XXIO brand golf club alsoIn an effort to address a broad cross sectionof needs, the SRI Group introduced golf Korea.experienced a significant upswing in Southclubs in different price ranges and for a varietyof purposes including the premium XXIO FISCAL 2006 OUTLOOKPRIME, the mid-priced HI-BRID ADFORCE The SRI Group anticipates an increase inand the SRIXON 505 series for competition Sports business revenues in fiscal 2006. Theuse. Despite the Group’s efforts, overall Group plans to expand sales of its fourthgenerationXXIO, ALL NEW XXIO golf clubssales confronted difficult conditions. Enteringa second year since the release of the thirdgenerationof the Group’s hit XXIO golf lineup in the face of expected stagnant con-and bolster the Diacluster RIM tennis racketclubs, sales experienced a decline.ditions in the sports market in Japan.In the golf ball market, the Group proactivelybrought three new products to market: par with the fiscal year under review due toOperating income is forecast to remain on athe new XXIO utilizing state-of-the-art nanotechnology,the SRIXON Z-UR providing rates and soaring raw material prices.fluctuations in foreign currency exchangedynamic flight for greater distance and theSRIXON Z-URS with a softer responsive feel.Sales of tennis balls maintained a highmarket share. The SRI Group released thenew M-FIL series and the Diacluster RIMseries to its lineup of tennis rackets andTOPICSLAUNCH OF FOURTH-GENERATION ALL NEW XXIO INCORE XXIO BRANDThe SRI Group commenced sales ofthe ALL NEW XXIO series in January2006. The ALL NEW XXIO is thefourth series in the Group’s coreXXIO golf brand. Since its initiallaunch in 2000, the XXIO brand hasenjoyed great popularity and is a keydriver of increased earnings in theSports business. In order to providean easier swing and increase distance,the Group took steps to renewproduct performance and structure.From a regulatory perspective*, theGroup provides a variety of clubs thatoffer both high repulsion and regulatorycompliance. In this manner, the ALLNEW XXIO series strives to satisfy alltypes of user needs.*The Japan Golf Association (JGA) willchange the rules in connection with thespring-like effect (SLE) of golf clubheads and particularly for drivers from2008. Accordingly, high-repulsion golfclubs that exceed a certain SLE levelwill be adjudged non-compliant.NET SALES(Billions of yen)63.164.0OPERATING INCOME(Billions of yen)11.058.957.46.413.58.019.215.28.354.710.02.501 02 03 04 054.001 02 03 04 05Operating Income Ratio (%)