Acquisition of Aftermarket Aircraft Spare Part Supplier Werner Aero

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo) through Sumitomo Corporation of Americas has acquired 51% shares of Werner Aero, LLC (Head Office: New Jersey, USA, CEO: Mike Cazaz; hereinafter " Werner ") , an after-market aircraft spare parts supplier who specializes in aircraft end-of-life solutions including aircraft part-out of retired aircraft to sell used serviceable parts for maintenance use.

Although demand in commercial aviation has taken a blow due to COVID-19, IATA (The International Air Transport Association) estimates revenue passenger-kilometers will recover to pre-pandemic levels by around 2023 and growth will continue driven by short and medium haul routes. In addition to this aviation demand recovery, due to the recent material costs rise and a stronger pressure for airlines to reduce costs, demand for used aircraft parts, with price lower than that of new parts, is expected to grow.

For the past 30 years, Werner has built strong relationships with airlines worldwide, alongside their advanced capability of procurement, sales and management of used aircraft and parts. Werner has focused on dealing regional jet and narrow-body aircraft which are used for short and medium haul routes. The group has kept its business secure despite the pandemic through its solid management.

Sumitomo Corporation Group’s aviation business includes entities such as SMBC Aviation Capital, one of the leading global companies in the aircraft leasing industry and SMBC Aero Engine Lease, which is an aircraft engine leasing company. Sumitomo Corporation will apply its credibility, financial resources, alongside its expertise in the aviation market to enhance Werner's business, and also work to exploit operational synergies with the abovementioned and other group entities.

Sumitomo Corporation will expand the aircraft aftermarket parts bussiness to promote the effective use of resources through the reuse and recycling of aircraft parts, and contribute to the sustainable and stable growth of the aviation industry.

Overview of Werner

• Werner is established as a business transferree company for Werner Aero Services, LLC which was established in 1993 and now serves as a pure holding company for Werner.

Sumitomo Corporation’s Material Issues

Sumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to the following material Issues.

Achieving Harmony with the Global Environment

To realize recycling-oriented society and mitigate climate change, we are working to establish frameworks for the efficient use of resources and stable supply of renewable energy. In doing so, we will achieve growth in harmony with the global environment.

Contributing to the Development of Local Communities and Industries

We steadily procure and provide goods and services to meet the needs of people in various countries and regions and contribute to developing industrial platforms. Through these means, we will create a virtuous cycle in which we can grow and develop together with local communities.

Establishing a Foundation for Comfortable and Enriching Lifestyles

We strive to realize more convenient and comfortable lifestyles by providing goods and services for daily use while also responding to needs for high-quality lifestyles in order to support the physical and mental health of people around the world.

Providing Diverse “Accessibility”

We provide diverse accessibility to open up the possibility of creating new value. To this end, we will improve mobility for safe and efficient flow of people and goods, and expand the network connecting information and finance.

Developing Human Resources and Promoting Diversity

In order to create new value and innovation by allowing our diverse personnel to fully exercise their abilities in a variety of fields, we will promote the development and empowerment of human resources, which represent our most important management resources.

Enhancing Governance

We will enhance our ability to draft and implement strategies for achieving sustainable growth and to provide appropriate supervision of these strategies, all while maintaining transparency. In this manner, we will improve management efficiency and maintain sound management.