Friday, June 11, 2021
PIOLAX, INC.
(Code: 5988)
Yukihiko Shimazu, President
All Rights Reserved, Copyright © PIOLAX, INC.

1

Contents
Medium-Term Management Plan (FY21 to FY23)
・Vision・Basic Policies
・Management Strategies
・Priority Measures and Initiatives

All Rights Reserved, Copyright © PIOLAX, INC.

2

Vision, Basic Policies, And Management Strategies

VisionAs a pioneer creating elasticity, widely
contribute to industries and society.

Basic Policies

1. Reform existing businesses.
2. Take on the challenge of new/next-generation
businesses.
3. Strength the management foundation.
4. Actively invest for the future.
5. Promote ESG-based management.

ManagementStrategies

1. Product and customer strategy
2. Business strategy
3. Regional strategy
4. Growth investment strategy
5. Management capital strategy

All Rights Reserved, Copyright © PIOLAX, INC.

3

Business Environment

Medium-Term
Management Plan

Growth Factors

Risk Factors

Continued increase in global automobileproduction
Global automobile production forecast (Unit: 1 million cars)

••••
••

2021

2022

2023

2030

84

8692

105

Accelerated shift to EVs
Strengthen R&D capabilities responding torapid market expansion.
Acquire orders for CASE-compliant products.
Investment in growth foundations
Improve productivity through IoT and DX.
Relocate global production.
Develop domestic infrastructure.
Promote automation and labor saving.
Discovery of new businesses
All Rights Reserved, Copyright © PIOLAX, INC.

••

•

•

•
•
•
•

Reduced production of major customers
Decreased orders for existing Piolax
products due to the shift to EVs
Global economic downturn due to theCOVID-19 crisis
Material supply issues (Soaringprocurement and purchase costs)
Rising labor costs
Turmoil in global logistics
Trade conflicts between the U.S. and China
Foreign exchange fluctuation

4Medium-Term
Management Plan

Management Indicator 1
FY23 Management Indicators

Consolidatedsales

70 billion JPY

502

377

2019
ActualOverseassubsidiaries

5.7 billion JPY
Operating profit ratio: 12%

60%

580

68%

64%

299

370

2020

2021

Actual650

440

Disclosed

2022

2019
Actual

700
66%
465

2023
2020
Actual0105

Operating profit

100(100 million JPY)

(100 million JPY)

100

Sales

625
60%

10.5 billion JPY
Operating profit ratio: 15%

46.5 billion JPY
Overseas ratio: 66%

Overseassubsidiaries
750Consolidated
operating profit

68

54

4054%
3760%

69%60%
2420192020

2021
Disclosed

2022

Actual78

Actual

54%

3747

57

2021

2022

2023

Disclosed

2023

Overseasratio(2023/2019)

625

502

580

650

700

+12%

Operating profit

684054

78

105

+54%

10.9%

8.0%

9.3%

12.0%

All Rights Reserved, Copyright © PIOLAX, INC.

Overseas
Subsidiaries

GrowthRate

Sales
Operating profit ratio

Consolidated

15.0%*1 USD = 105 JPY

5Medium-Term
Management Plan

Management Indicator 2
FY23 Management Indicators
8% or more

ROE(Final target: 10% or more)

Consolidated dividend
payout ratio
ROE trend(JPY)

Final target: 10% or more
10%30% or more

Trend in dividends and dividend payout ratio
Dividend

60

Target:8% orabove

9.9%
8.5%

Commemorative dividend

45.00

45.00

33.33

5.8%

26.67
4.3%

19.8%

45.00

35.00

30.6%

30.8%

21.7%

13.5% 14.9%
0%Dividend payout ratio

45.00
34.2%

40%

Maintain
dividend
payout ratioof30% or more

30%
20%
10%02017 2018 2019 2020 2021 2022 2023

50%

2015

2016

(FY)

2017

2018
(FY)

201920202021(Forecast)

Note: Dividends have been adjusted to the value after the stock split (3-for-1 split of common stock)with Apr. 1, 2017 as the effective date.

All Rights Reserved, Copyright © PIOLAX, INC.

6

Management
Strategy 1

1. Product And Customer Strategies

Aim for further growth by covering the anticipated decline in sales of existingproducts due to the shift to EVs by 2030.
FY23 Targets

Priority Measures and Major Initiatives
Develop and win orders for CASE-

Expand sales of CASE-compliant

compliant products.

products.

Increase orders for new products.

1 billion JPY (FY30: 10 billion JPY)

Diversify customers and products.

Nissan sales ratio

Expand sales to Japanese and non-39% (FY19) ⇒ 36%Japanese OEMs.

Non-Japanese OEM sales ratio

Increase sales per vehicle.

12% (FY19) ⇒ 15%

Maximize a profit ratio by product.

Orders received per new vehicle

Realize global high quality.

+10% (compared to current models)

All Rights Reserved, Copyright © PIOLAX, INC.

7

Management
Strategy 1

Initiatives for CASE-Compliant Products
Piolax products equipped incurrent EVs
Battery-related

FY21: Shift the focus from development to winning orders.
Orders are being secured for EVs to be launched in the future.
Promote development and order-winning efforts through inhouse projects.
Continuously develop products focusing on technologies forboth “metal and plastic” springs, which are our strengths.
Actively invest in development while assessing the effects ofinvestment.
• Major points in the development of CASEcompliant products[Connectivity, electrification, weight saving,sensing, quietness, and movement]• Jointly develop new products and systems
with customers to expand business
opportunities.
• Link to the early acquisition of orders for
current development products.

Sales plan for
CASE-compliant products

10 billion
JPY

Expand orders
toward 2030
Accelerateorder receiving

1 billion JPY
2021

All Rights Reserved, Copyright © PIOLAX, INC.

Cover terminal

2023

2025(FY)

・・・

2030

8Management
Strategy 1

Kakuhan to Japanese OEMs

Orders received per new vehicle:+10% compared to the current models(100 millionJPY)

800

Make proactive proposals in
anticipation of customer needs.
Propose parts made in combination
with plastic and metal technologies,
which are our strengths.
Strengthen price competitiveness byutilizing global network.
Develop and propose environmentalconscious parts.
Reduce the Nissan sales ratio whileraising Nissan sales to diversifycustomers.
All Rights Reserved, Copyright © PIOLAX, INC.

Sales and composition ratio
by OEM

700

625

600

7%

500
400

12%
42%

700
8%
15%

41%

Medical
Non-JPN

300

Japanese

200

Nissan

100

39%

36%

FY19

FY23 Plan

09

Management
Strategy 1

Kakuhan to Non-Japanese OEMs

FY20: Kakuhan slowed down due to the COVID-19 crisis, but
recovered in the 2nd half.
Strengthen group collaboration across overseas sites.
Expand target products.
O&C parts
Fuel system parts, powertrain parts,
fastener parts
FY20: Won orders for the first time from Chinese OEMs for 2K fuelsystem parts that comply with environmental regulations.
Currently promoting the parts in the U.S. and European markets.

Target OEMs and major activities
Target OEM

Major Activity

U.S. Big 3

Mainly O&C parts ⇒ Enhance fuel system parts.

Chinese local

Promote powertrain parts and fuel system parts.

EuropeanTarget German OEMs and Renault.

KoreanTarget Hyundai for fuel system parts.

All Rights Reserved, Copyright © PIOLAX, INC.

Medium-term kakuhan planto non-JPN OEMs

OthersHyundaiKia
ChineseEuropean2020 2021 2022
Actual(FY)2023<FY23>
Non-JPN OEM sales ratio: 15%
Target fuel system partsfor kakuhan

10Kakuhan of Existing ProductsManagement
Strategy 1

Target Kakuhan Products
2K parts (Fuel system parts)

Spring cushion (O&C mechanism parts)

Respond to tightening overseas environmental

Aim for global sales expansion.

regulations.

・Enhance merchantability of glove boxes with・Promote kakuhan in the Chinese market.
・Current production sites: Japan and Korea⇒ Expand production in the U.S. and China
in the futureboth latches and dampers.
・Promote kakuhan to European andChinese OEMs.
・Aim for expanded adoption for EVs/HEVs
with growing demand for cabin quietness.

2K part with improved

・Expand production mainly in North Americaand China.

2K part developed by Piolax

All Rights Reserved, Copyright © PIOLAX, INC.

11Management
Strategy 2

2. Business Strategy

Expand sales of the medical device business as business diversification.
Aim to discover a profitable new business by FY30.
Priority Measures and Major Initiatives

FY23 Targets

Expand the medical device business.

Medical device business・Accelerate development of new<Sales>

products.

FY19: 4.3 billion JPY ⇒ 5.6 billion JPY

・Expand sales in overseas markets.
・Enhance the sales system in Japan inresponse to digitalization.
Discover a new business.
Discover the third business.

All Rights Reserved, Copyright © PIOLAX, INC.

<Operating profit ratio>
FY19: 5% ⇒ 10% or more
<Consolidated sales ratio>
FY19: 7% ⇒ 8%12

Management
Strategy 2

Medium-Term Management Planfor Medical Device Business 1
Sales and operating profit ratio(100 million JPY)

60

Sales (Left axis)

435%

436%

Operating profit ratio (Right axis)

47

51

56
15.0%

11%
6%8%

00.0%

2019 Actual 2020 Actual202120222023(FY)

1. Launch differentiated products to specific markets.
(Differentiation strategy for specific markets)
2. Accelerate launching new products and strengthen new product lineup.
3. Strengthen business expansion overseas.
4. Digital shift ⇚ with/after COVID-19
5. Strengthen domestic sales network.
All Rights Reserved, Copyright © PIOLAX, INC.

13Management
Strategy 2

Medium-Term Management Planfor Medical Device Business 2
Specific Initiatives for the Medium-Term Management Plan

Develop and launch unmet-needs products, focusing on specific
1. Launch differentiatedproducts to specific markets. areas in minimally-invasive treatment such as “catheter treatment(Differentiation strategy forspecific markets)for liver cancer” and “endoscopic biliopancreatic treatment”.

2. Accelerate launching new
products and strengthen
new product lineup.

In order to concentrate development resources on differentiatedproducts, speedily enhance lineup of peripheral commodity
products through OEM supply from other companies, etc.

3. Strengthen businessexpansion overseas.

Gain market shares in the Asia-Pacific region by the Piolax brandand in the U.S. and Europe by OEM brands, focusing on catheter
treatment products for liver cancer and guide wires for
gastrointestinal endoscopes.

4. Digital shift

The digitalization of markets is progressing rapidly due to theCOVID-19 crisis. Establish and operate SFA (Sales Force Automation)
and CRM (Customer Relationship Management) within this fiscal
year, and continuously implement promotional activities utilizing
MA (Marketing Automation).

5. Strengthen domestic sales
network.

Enhance the network of sales agents in each prefecture to collectand provide timely on-site information in normalized non-face-toface sales activities.

All Rights Reserved, Copyright © PIOLAX, INC.

14

Discovery of New Business

Management
Strategy 2

Promote the discovery of a new business that will become the third pillar following
the automobile and medical businesses. Consider collaborative development withother industries by utilizing our "elasticity technologies”.
Development of “myoelectric prosthetic hand”
Trial production through collaboration with theUniversity of Kitakyushu<Concept>

Springs incorporated into
the joints reproduce thefinger movement.

Aim of development<Current product> Heavy and expensive

Too real anduncanny

Cool but heavy
and expensive

Light, inexpensive, and cool prosthetic hand!
All Rights Reserved, Copyright © PIOLAX, INC.

<Prototype>
Carbon material
provides rigidity
while reducing
weight.

15

3. Regional Strategy

Management
Strategy 3

Strengthen the globally efficient earning structure through regional strategy.
Priority Measures and Major Initiatives
Expand sales of North American andChinese sites.
Expand localization.
Expand sales to U.S. Big 3 and Chinese
OEMs.
Expand profitability of ASEAN sites.
Promote automation and labor saving.
Strengthen ties within the region.

Fiscal 2023 Targets
Sales ratio of North American andChinese sites
35% each of total overseas sales
Operating profit ratio of Asian sites(3 ASEAN sites + PK)
Over 25% of total overseas
operating profit

Consider strategies for European
continent.
Strengthen regional supervisory
functions.
All Rights Reserved, Copyright © PIOLAX, INC.

16

Management
Strategy 3

Initiatives by North American Sites
Promote localization and kakuhan to overseas OEMs.

<U.S. and Mexican sites>
conflicts between the U.S. and China).
• Hose clamps, metal fasteners, fuel system parts
Promote kakuhan (to non-Japanese OEMs).
・U.S. Big 3
・Hyundai (U.S.)・VW (Mexico)(U.S. and Mexican sites)

20%

150
(100 million JPY)

Promote localization (Measures against trade

Sales and operating profit ratio0

2019
Actual2020
2021
Actual (FY)

Sales (Left axis)

2022

2023

0%

Operating profit ratio (Right axis)

Expand production and improve productivity.
・2019: Enhanced production capacity throughTarget parts for localization

purchasing an adjacent land/building (PAGeorgia)
・Promote automation and labor saving.
All Rights Reserved, Copyright © PIOLAX, INC.

17

Management
Strategy 3Initiatives By Chinese Sites
Strengthen the sales system.

•••

All Rights Reserved, Copyright © PIOLAX, INC.

Sales and operating profit ratio
Sales
company
established150(3 Chinese sites)

20%(100 million JPY)

•Enhance the sales system.
Improve the added value and enhance efficiency
and governance of each division throughsupervisory functions.
Positioned Shanghai Piolax as a controllingcompany in December 2020.
Strengthen kakuhan.
To European, U.S., Korean, and Chinese OEMs
Develop businesses compliant withenvironmental regulations in China.
Promote kakuhan of fuel system parts and orderwinning for 2K parts.
Started production of powertrain parts at theWuhan Plant in 2020.
ShanghaiStart production of 2K parts at thebranch
Wuhan Plant in FY22.

0

2019
Actual

2020
ActualSales (Left axis)

2021

2022

2023

0%(FY)

Operating profit (Right axis)

New structure in China
Shanghai Piolax(Chinese head office)TianjinbranchGuangzhou
BranchDongguan
Piolax(Production)

Wuhan
Piolax(Production)18

Management
Strategy 3

Initiatives by ASEAN Sites

Improve optimization in the ASEAN region to enhance competitiveness.
Cooperative initiatives by ASEAN sites

FY23 operating profit ratio
by region(Cooperation among 3 sites - PT, PI, and PD)

Conduct activities for optimal production
and specifications.
Consider global purchasing in the region.
Take measures for rationalization throughsystem integration.
Share machine automation technologies.

Asian sites(3 ASEAN sites + PK)

China
39%

Sales and operating profit ratio(PT, PI, and PD)(100 million JPY)

All Rights Reserved, Copyright © PIOLAX, INC.

NorthAmerica
32%

ASEAN
21%

FY23 target operating
profit ratio:
25% or more

<PT>
Center to promote kakuhan in the ASEAN region. 80<PI>Continuously achieve profitability.
Expand sales of environmentally compliant parts.
<PD>
0Achieve profitability.
Promote automation and labor saving.
Kakuhan.

Europe
3%

PK
5%

20%

0%
2019
2020
ActualActualSales (Left axis)

2021(FY)

2022

2023

Operating profit ratio (Right axis)

19

Management
Strategy 44. Growth Investment Strategy

Accelerate investment in production and development to expand sales andinvestment in company-wide productivity improvement to secure profit.
Priority Measures and Major Initiatives

FY23 Targets

Develop domestic infrastructure.

Complete the 1st phase of construction of theConstruct the new Moka Plant.

new Moka Plant.

Strengthen R&D investment.

Investment in FY22 to F23: Approx. 6 billion JPY

Invest in CASE/new businesses.

R&D investment to sales: 1.5%

Promote DX.
• Improve productivity of direct/indirect

1.5%

departments.
0.5%

R&D expense to sales

1.0%

1.5%

1.2%

2019 2020
Actual Actual

・・・

・・・

2023

Company-wide productivity improvement: 10%
All Rights Reserved, Copyright © PIOLAX, INC.

20Management
Strategy 4

Capital Investment And Depreciation
Capital investment for sustainable growth

・FY20: Restrained investment due to the COVID-19 crisis.
・FY21 onward: Introduce automated/labor-saving equipment globally.
・FY22 onward: Develop domestic infrastructure (new Moka Plant).

Medium-term
management plan
Total of 20 billion JPY(100 million JPY)

Depreciation Capital investment

70

Capital investment and depreciation

5030
10(10)(30)(50)

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Non-consolidated capital investment
Non-consolidated depreciation(FY)
Consolidated capital investment
Consolidated depreciation

All Rights Reserved, Copyright © PIOLAX, INC.

PlanPlanPlan

Domestic infrastructure development

21

Domestic Infrastructure Development

Management
Strategy 4

1. New Moka Plant[Expand mother functions and aim for the nextgeneration plant]

・2018: Purchased a land (approx. 33,000 m²)
adjacent to the current plant.
・2020: Suspended the plan due to the COVID-19 crisis.
・2021: Resumed the project activity in earnest.

Total investment: Approx. 6 billion JPY (FY22FY23)

Site for the new Moka Plant

Target:200% productivity
increase in 2030[Future plan]
2018
Purchaseanadjacent
land

2019

2020

Select a CM firm
Relocate somedivisions
Launch Moka
General OfficeSuspend

2021

2022

2023

2025

2030

Develop a basic
concept

Startconstruction

Full-scale
relocation

OperationOperation(2nd phase)(3rd phase)

Start designing

Start operation(1st phase)

2. YTC (Yokohama Technical Center)・August 2018: Relocated temporarily (in Hodogaya-ku, Yokohama).
・2020: Demolished the former YTC building.
・2020: Suspended the plan due to the COVID-19 crisis.
Replan infrastructure development in the Yokohama region in view of“work style reform”, etc.
All Rights Reserved, Copyright © PIOLAX, INC.

Former YTC site22

Management
Strategy 5

5. Management Capital Strategy

Priority Measures and Major Initiatives
Pursuit capital efficiency.
• Improve ROE and promote ROIC-basedmanagement.
Return profits to shareholders.

FY23 Targets
ROE: 8% or more(Final target: 10% or more)
Consolidated dividend payout ratio:30% or more

• Stable dividends
Promote ESG-based management.
• Take carbon neutral initiatives.
• Promote work style reform.
• Strengthen corporate governance.

All Rights Reserved, Copyright © PIOLAX, INC.

23

Management
Strategy 5

Applicable
Major SDGs

Promotion of ESG-Based Management
Materiality

PiolaxESG Vision 2030

Major Initiatives• Energy• Emission into the air• Waste

Corporate activities aiming fora carbon-free society and arecycling-oriented society

・Activities toward carbon
neutral: reduction ofgreenhouse gas and energy
consumption, etc.

• Employment• Occupational health andsafety• Diversity, equal
opportunity

Creation of a vibrantworkplace where employees
can work with a sense ofsecurity

・Promotion of work stylereform・Promotion of diversity・Respect for human rights• Compliance enhancement• Governanceenhancement

・Fair and equitabletransactions and improved
trustworthy relationships
・Stable organizational
management by enhanced
governance・Compliance with modified
corporate governance・Enhanced compliance withrisk management

On January 21, 2021, Piolax received the highest “Eruboshi” certification (three stars) as an
outstanding company based on the Act on Promotion of Women’s Participation and Advancementin the Workplace.
We will continuously make efforts to “expand the number of women in managerial positions” and“cultivate a workplace environment where anyone can work comfortably and play an active role”.
All Rights Reserved, Copyright © PIOLAX, INC.

24

Carbon Neutral Initiatives

Management
Strategy 5

Greenhouse gas emissions by the Piolax group (FY19)
Scopes based on the GHG emission calculation standard/Scope 1: Direct emissions/Scope 2: Indirect emissions/Scope 3: Other indirect emissions... Supply chain including transportation, etc.

Formulate a scenario for carbon neutral in FY21

Impact on global warming
Indirect emissions
Purchased energyDirectemissions

Other indirectemissions
Purchased material services

Purchased electricity,
steam, and heat

Fossil fuelburning

Business trip
Waste

Transportation

Commuting

Lease

Outsourcing

Unit:
1, 000 ton CO²e45

2.6

94+α

Scope 2

Scope 1

Scope 3

All Rights Reserved, Copyright © PIOLAX, INC.

25