Review of Operations Plumbing  Fixtures Business Fiscal Year Results Note: Estimated share includes Sun Wave JS Group Corporation Annual Report 2010 28 The JS Group focused on increasing  sales through full model changes for  popular sanitary ware, but weak sales  of bathroom units and kitchen systems  because of sluggish collective housing  construction starts dragged down sales  to ¥282.8 billion. However, operating  income increased to ¥8.4 billion thanks  to cost-cutting initiatives and other  factors. The acquisition of American  Standard will be instrumental to our  efforts to expand operations overseas. (¥ billion) 400 200 300 100 0 310.9 291.7 2008 2009 282.8 2010 (¥ billion) 15 10 5 0 14.5 3.8 2008 2009 8.4 2010 3.0% 4.7% 1.3% ■  Operating income  ■  Operating income ratio Operating Income and  Operating Income Ratio Net Sales  [Situation in Japan] Products/  Product Brands Market  Position Main Competitors Product and Service Conditions (Year Ended March 2010) Product Sales (¥ billion) Sanitary Ware ■ $_{ }$Inax Industry No. 2 (Estimated  market share  approx. 40%)* ■ $_{ }$TOTO $^{■}$  Panasonic Electric  Works We positioned the super water-saving  SATIS  toilet featuring  a 5-liter flush (“ECO5” function) as an important strategic  product and aggressively worked to increase sales. As a  result, even though business conditions worsened in Japan,  sanitary ware sales totaled ¥88.4 billion (down 3.3% year on  year), a fairly strong showing. Bathroom Units ■ $_{ }$Inax ■ $_{ }$Tostem ■ $_{ }$Sun Wave Industry  No. 1 (Estimated  market share  approx. 31%)* ■ $_{ }$TOTO $^{■}$  Panasonic Electric  Works ■ $_{ }$Takara Standard The JS Group concentrated on winning orders to counter  steeply declining condominium construction starts and  price competition fueled by the entry of many new   companies in the field, but bathroom unit sales decreased  13.8% year on year to ¥86.6 billion. Focusing on enhanc- ing earnings power, we shifted production of bathroom  units from Tostem to Inax as part of efforts to maximize  business efficiencies. Kitchen Systems ■ $_{ }$Sun Wave ■ $_{ }$Tostem ■ $_{ }$Inax Industry  No. 1 (Estimated  market share  approx. 28%)* ■ $_{ }$Takara Standard ■ $_{ }$Cleanup $^{■}$  Panasonic Electric  Works ■ $_{ }$TOTO ■ $_{ }$Yamaha ■ $_{ }$Nasluck In the kitchen systems field, growth prospects are favorable  amid emerging demand for kitchen renovations. The field is  crowded with specialty manufacturers, however, and other  housing equipment companies are entering the business,  which is intensifying competition. In addition, demand for  condominiums has slumped, depressing sales further. As a  result, kitchen system sales decreased 11.2% year on year  to ¥43.6 billion. Washstand  Cabinet Units ■ $_{ }$Inax ■ $_{ }$Tostem ■ $_{ }$Sun Wave Industry  No. 1 (Estimated  market share  approx. 35%)* ■ $_{ }$TOTO ■ $_{ }$Takara Standard $^{■}$  Panasonic Electric  Works Mirroring conditions for other plumbing fixtures, business  conditions were severe, leading to a 9.5% decrease year on  year in sales of washstand cabinet units to ¥24.4 billion. We  took important steps to optimize business and strengthen  earnings power, including transferring production of wash- stand cabinet units from Tostem to Inax. 150 100 50 0 97.7 91.4 2008 2009 88.4 2010 150 100 50 0 110.7 100.4 2008 2009 86.6 2010 150 100 50 0 50.1 49.1 2008 2009 43.6 2010 150 100 50 0 28.0 26.9 2008 2009 24.4 2010 * Company surveys * Yano Research Institute, 2008 surveys * Yano Research Institute, 2008 surveys * Yano Research Institute, 2008 surveys