December 8, 2023 (Fri.)PIOLAX, INC.
(Code: 5988)
Yukihiko Shimazu, President
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1

Contents
I.

Progress of Medium-Term Management Plan

1. Management Indicators
2. Growth Strategies(Automotive Business / Medical Device Business)

II. Capital Policy
III. Promotion of ESG Management

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2

Management Indicators - 1
Progress of medium-term management plan (FY23 to FY25)
Sales(¥100 mil.)

Plan

639

630

680

720

Plan
OPR (Plan)

100

39

6.6%

6.8%

87

2023

2024

2022 result

2025

40 42

12.1%

10.0%

Operatingprofit ratio
20%
15%
10%
5%

2023

2024

2025

(FY)

(FY)
(¥100 mil.)
100

50

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0

Net income
Plan

34

2022 result
2022実績

Revision
55

37

31

69

Revision

Disclosure of revision on Nov. 8, 2023
Sales in Japan and the U.S. offset
deteriorated performance in China. With
the benefit of foreign exchange gains, thecompany expects full-year sales andprofits to increase compared to the planand to the previous year.

68

6.3%

0

100
2022 result

Revision
OPR (Revision)

Revised
Revision

584

Revision

Revision

800

Operating profit(¥100 mil.)

2023
2023

(FY)

2024
2024

2025
2025

3

Management Indicators - 2: by Segment<Upward revision factors> Recovery of automobile production. Strong performance inJapan and the U.S. Positive impact of yen depreciation. Progress in cost recovery.
<2nd half forecast> Continued sluggishness in China will be covered by sales in Japanand the N.A. Increase in material, energy and logistics costs are already considered.
Sales
800

Plan

Forecast

592

583

100

Forecast

OPR (Plan)

OPR (Forecast)

39

02022 result

2023

2024

2025

(FY)

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2022 result

11%

40 42

13%

15%

7%

7%

0

Operatingprofit ratio

85
67

Forecast

540

630

670

Plan

Forecast(¥100 mil.)Operating profit(¥100 mil.)

0%

2023

2024

2025

(FY)

4

Management Indicators - 2: by Segment<Sales> Almost in line with the plan.
<Operating income> Down from the plan mainly due to cost increase causedby soaring raw material prices and inventory disposal.
(¥100 mil.)
Plan
44

Sales
Forecast
47 47

3
49

Operating profit
Plan
OPR (Plan)

50

4%

1
2%

2023

2024

2025

(FY)

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2022 result

5%

1
0.5

2%

1%

Forecast Forecast

002022 result

Forecast
OPR (Revision)Operatingprofit ratio
10%2Forecast

50(¥100 mil.)

0.4%

0.2

2023

0%
2024

2025

(FY)

5

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6

Progress of Management Strategy: Automotive - 1
Management strategy andpriority issues

Medium-term management plan

Situations in FY23

1. Product and customer
strategy
・Develop CASE parts andreceive orders
・Diversify customers andproducts
・Maximize profit margin foreach product・Achieve global high quality

Accelerate response to CASE.

Steady sales activities(Explained later)

Sales ratio to non-JPN OEMs in FY25:
17%

1H: 12%

Increase per-car sales for new models
in FY25: +10％ (from former models)

Steady progress for JPN OEMs inJapan

Improve quality through the new QA
system.

Enhancing quality through companywide quality meetings

2. Business strategy
・Discover new businesses
・Reform profit structure

Discover new businesses not confinedto the existing automotive andmedical device businesses.

Continue discovering new businessby MIRAI Business Dept.

Profit structure reform (Invest in
growth areas): reduce fixed costs at
Piolax Japan by ¥1 bil. over 3 years.

Promote fixed cost cut and identify
growth areas to raise profitability of
Piolax Japan.

3. Regional strategy
・Expand sales in North
America and China
・Expand profitability in
ASEAN
・Make strategies forContinental Europe
・Strengthen regional
management functions

Expand sales in N.A. (U.S. andMexico) and China.
Sales ratio of N.A. and China in FY25:
35% each

Sales ratio (FY23 forecast)
N.A.: 42% China: 26%
N.A. sales cover slowing China sales.

New strategies for Continental Europe.
Expand sales to non-JPN (German)
OEMs.

Establish a sales company in the
Netherlands in FY24.

Improve profitability in ASEAN and
India.
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FY25 operating profit ratio: 15%

Operating profit ratio of ASEAN and
India (forecast): 11%7

Progress of Management Strategy: Automotive - 2
Management strategy andpriority issues
4. Growth investment
strategy
・Develop infrastructure in Japan
・Strengthen R&D investment
・Promote DX

5. Management capital
strategy
・Pursue capital efficiency
・Return profits to shareholders
・Promote ESG management

Medium-term management plan

Situations in FY23

Build a new Moka Plant.
FY23: Complete Phase I
construction and start operation.
FY24: Start Phase II construction.
FY25: Complete Phase II
construction and start operation.

Steady progress.
Phase I construction completed in
Dec. 2023 and partial operation in
Jan. 2024.

Strengthen investment in
CASE/new businesses.
R&D to sales ratio in FY25: 1.5%

Accelerate development of CASE
and eco-friendly products.

100% dividend payout ratio from
FY23 to FY25

Dividend increase (disclosed in
Nov.)
Annual dividend forecast isrevised from ¥102 to ¥119 (incl.
¥10 commemorative dividend forthe 90th anniversary of founding)in line with upward revision of net
income forecast.

Promote ESG targets.
・Promote measures toward carbon
neutrality (CN).
・Improve TCFD disclosure.
・Reinforce human capital initiatives.
・Enhance governance.

・Promote measures toward CN in
the supply chain.
・Human capital disclosure.
・Promote diversity.

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8

CASE Products - 1
Progressing development and sales expansion of CASE products【Actions in FY23】
Orders are increasing. FY23 plan will be achieved.
Sales expansion target: Battery-related (70%).
ADAS*-related (10%). e-Axel-* and vibration controlrelated and others (20%).
Enhance relations with candidate new customers.
Plan production at the new Moka Plant.

Sales plan of CASE products
Expanding sales
Sales ¥10 bil.
（¥100 mil.)Expanding
Production at OPR 15%
new Moka Plant100+ ¥1 bil.
¥1 bil.

02022
resultVibration
stopper

Power supply port
Actuator
Bus bar

OthersVibration
control

Reducer
accessories

e-AxelCASE product Battery
sales ¥10 bil.
in FY30

Powertrain
parts

Sensor bracket
2023

2024

2025

・・・

2030

(FY)
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Battery
Gas vent tube

ADAS

Filter¥5 bil.

to be met

Target products

Camera cover

ADAS: Advanced Driver-Assistance Systems
e-Axel: Drive module for EV including motor, inverter andreducer

9CASE Products - 2
Development of products that contribute to
Reducing vehicle weight and the environment
BusbarDegassing valve for EV battery

Dielectric parts made of copper.
By changing the production methodfrom pressing to forming, copper
scrap is significantly reduced.

Secure battery's functions for a certain
period of time in case of its malfunction.
Light weight and easy assembly
without using a bolt.

Damping stopper
Vibration control parts to eliminate
muffled sound in the low-frequency
band.
Light weight using vibration control
material for stop rubber.
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Business Expansion with New Product Lines
Change the name of “Fuel System Parts SBU”
to challenge new product lines
Fluid Controls SBU(As of December 1, 2023)• Respond to the changing needs of customers in the trend of EVs.
• Increase customer understanding and awareness of our unique technologies acquired throughfuel system parts.
• Apply existing technologies and market experience to fluid piping and other related products.

Development and order taking of new parts
New targets• Application to fluid control such as emergency
parts for lithium ion battery and piping for brake andwasher fluid.

• Thermal management＊ for CASE products.
• Connector, joint, and degassing piping technologies
for multiple fluids.

Applytechnologies
cultivated todate to wider
areas

Quick connector

Connecting
joint

Tube assy＊Air conditioning for in-vehicle comfort, cooling of batteries, etc.

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11

Diversification of Customers/Products
Targets for FY25
■Sales ratio of non-JPN OEMs: 17％■Per-car sales for new models: +10%（from former models)
Sales by OEMs

Non-JPN OEMs
JPN OEMs(¥100 mil.)Nissan

800
600
400
200

584
12%
52%

670
17%

Efforts to increase per-car sales
for new models
For our priority models to be sold fromFY24 to FY27, we will promote our
products for EV, e-Power and ADAS whichhave high price contribution and increase
per-car sales by 10%.
Priority target

50%

36%

33%

2022 result

2025 target

0Company A

6 modelsCompany B

2 models

Others4 models(FY)

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12

Capital Investment and Depreciation
Capital investment for future leap forward,
mainly in domestic infrastructure development
Capital investment and depreciation【FY23】

Medium-term plan

New Moka Plant: completionin Dec., operation in Jan.

Start Phase II constructionof the new Moka Plant.
Start construction of the
new head office.
Install eco-friendly
equipment like solar panels.
Consider production
reallocation in the Group.

Infrastructure in Japan (3 years)¥10.1 bil.

Depreciation (Groupsubsidiaries)
Depreciation (Piolax
Japan)

90

Capital investment【FY24 or later】(¥100 mil.)Forecast

Postpone capital investment
in China and Korea bases to
FY24 or later.

Total ¥26.6 billion

70

Infrastructure(Japan)50

Capital investment(Groupsubusidiaries)

30
10

Capital investment(excl. infrastructure)(Piolax Japan)

(10)
(30)
(50)

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2022

2023
plan

2023
forecast
(FY)

2024

2025

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Activities of overseas bases
Diversification of products/customers (non-JPN OEMs)
Europe (U.K. and Germany)・Enhance sales to German OEMs using the German
representative office.
・Establish a sales company in the Netherland in FY24.
・Consider production relocation in Europe.

(¥100 mil.)

500

Sales of overseas basesin the medium-term plan
425

556
Europe380

ASEAN and India

ASEAN,India

・In India, expand the plant, increase sales to Indian OEMs,and enhance response to EV shift.
・Strengthen collaboration among bases in Thailand, India andIndonesia.

China
N.A.

China

・Shift China business strategies due to worsening performance.
・ Enhance sales to Chinese OEMs.
・ Enhance sales to start-up EV makers.

North American (U.S. and Mexico)

・Expand production capacity of the U.S. and Mexico plants.
・Enhance sales to Big 3.
・Enhance sales to VW and Hyundai.
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0

2022

2023
・・・
forecast

2025
plan

(FY)

*Consolidated journalizing (internal transactions)is included.

Only figures of FY23 have been revised.
Those of FY25 have not been changed since
this June. Those of FY24 are being reviewed.

14North America (U.S., Mexico)
Localization &sales expansion to non-JPN OEMs

Sales & operating profit ratio(U.S. & Mexico)■Optimal production
・Promote localization: hose clamps, metal
fasteners, fuel system parts.

20%

150

・Transfer production from the U.S. to Mexico.

■Lower labor cost by promoting
automation and labor saving
Parts to be localized

Result・Big 3 / Hyundai (U.S.) VW (Mexico)(¥100 mil.)■Sales expansion activities for non-JPN
OEMs

0

0%
2022

2023 forecast

Sales in mid-term plan (Left)
Sales forecast (Left)
OPR in mid-term plan (Right)
OPR forecast (Right)

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ChinaShifting China business strategies
In consideration of accelerating EV shift andsluggish JPN OEMs.
1) Change target for sales expansion
・Protect current business + Approach Chinese OEMs
(emerging EV makers)
・Re-establish speedy development system.

3) Revise materials, processes and methods
drastically(3 bases in China)

50%

150

25%

(¥100 mil.)

2) Review development system drastically

Sales & operating profit ratio

・Use low-priced materials for cost competitiveness.

4) Further improve productivity and quality
・Consolidate administrative functions in Shanghai
office.

5) Review production system

・Rebuild production system for cost competitiveness.
・Promote localization.

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0

0%
2022

2023 forecast

Sales in mid-term plan (Left)
Sales forecast (Left)
OPR in mid-term plan (Right)
OPR forecast (Right)

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European Continent
Sales expansion to German OEMs &Establish production system in Europe
Establish a sales company in the Netherland in 2024.
Aim to expand business in Europe where CASE and EV shift are advancing.
Aim to get orders of CASE- and EV-related products
in addition to our mainstay interior parts.
Increase sales from German and other European OEMs.
(Eco-friendly parts are awarded by a German OEM.)
Consider production reallocation in Europe.

Target products

BusbarBattery-, sensor-, and motor-related

Degassingvalve

Vibration
control part

Sonar bracket

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Exhibit at Stuttgart Expo in Germany(Dec. 4 to 6, 2023)

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Infrastructure Development in Japan - 1
Infrastructure development for future growth – New Moka Plant
Construction Phases I and II
Full-scale operation for Phase I area: January 2024
Investment: ¥10.1 billion (FY23 to FY25) – increased due to facility expansion andsoaring material prices
Total floor space: About 28,700 m2 (at the completion of Phase II)
Future plan: Start of Phase II in FY24 for full-scale operation in FY25
<Next-generation plant>
Global mother plant
Next-generation equipment and molding lines
Automated lines with AI and IoT
Effective production through DX
200％ productivity in 2030

Current plant
Phase II

Phase I

Initiatives for carbon neutrality
Increase in production of battery-, ADAS
bracket- and CASE-related products
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Infrastructure Development in Japan - 2
Infrastructure development for future growth – New Head Office
Global Head Office that transmits Piolax corporate bland to the world for along time – Sustainable office
Consolidate functions of head office andYokohama Technical Center.
Promote workstyle reform through working
from home and free address system.
Raise productivity of indirect sections
through infrastructure development.
Create an office that contributes to employee
comfort and job satisfaction.
Sustainable office
ZEB Ready* to be certified
Fully automatic louvers on windows tocontrol outside light and room temperature.
EV parking space may provide power in caseof disaster.
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New Head Office image (Hodogaya, Yokohama)Start of construction: FY24
Completion: FY25
* Buildings that comply with a primaryenergy consumption reduction of 50% ormore from the standard primary energy
consumption, excluding renewable energy,
will be certified.

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20

1H Result and Full-Year Forecast in FY23
1H budget

1H result

2,213

2,267

△54

△58

Sales
OperatingprofitAchieveFY22 result
ment
102.4%
2,150-(Unit: ¥1 mil.)Growth5.4%

100

Full-year
budgetFull-year
forecast

Difference

4,675

4,731

56

50

20

△30

-

<Causes of decrease in profit>• Deteriorated direct material costs due to increased raw material costs• Temporary increase in labor cost to secure personnel for future growth
Analysis of operating profit (y/y)

Analysis of operating profit (vs. budget)(Unit: ¥1 mil.)(Unit: ¥1 mi.)

100
+73

△43

+13
△3

Others-58

2023 1H result△47

Fixed costDirect material

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cost

Operating profit: -158

+34

Marginal profit

Others2023 1H result△3

Fixed costDirect material
cost

Marginal profit

2022 1H result

△185

-54

2023 1H budget-58

Operating profit: -4

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Medium-Term Plan (FY23 – FY25)
1. Introduce differentiated products to specific markets (Differentiation)
2. Speed up launch and enhance lineup of new products
3. Expand overseas sales channels (Strengthen regulatory compliance in each country)
4. Enhance sales network in Japan
5. Respond to digital shift
Medium-term plan (FY23 – FY25)(¥100 mil.)

Sales

50
44

OPR
47

50

49

10%

40

4%

30

2%

2%
0.4%

20
2022 result

5%2023 forecast

0%
2024

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2025
(FY)

: Year to review insurance
reimbursement price22

New Medical Product “SeekMaster25”
Expand share with the new digestive endoscope guidewire
Realize ultimate slipperiness by reducing contact surface
with other medical devices used in combination
by high-ridge coating technologies

Launch in May 2023
in JapanMedium-term sales plan (FY25)

Appeal points■SeekMaster series: ¥440 mil.

Combined Device（Luminal contact image with other medical device)【FY25】
Aim for 36% domestic share by full
lineup of digestive endoscope GW.
*Ref: Estimation from FY21 data by R&D co., Ltd.

Existing product*Contact surface

Piolax new product1. PMD unique technology, high-ridge coating, reduces
friction resistance with other devices: high slipperiness.
2. Low friction resistance improves torque performanceso that GW control by a surgeon is transmitted directly tothe tip.

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Capital Policy - 1
Realization of management conscious of cost of capitaland stock price – toward PBR 1x••

Our capital policy in FY22 was reviewed. Strive toincrease corporate value by practicing efficientmanagement with an awareness of cost of capitaland stock price, while making investments for
growth, with the goal of achieving a positive EVA
spread and a PBR 1x.

3-year capital policy (FY23 to FY25)
Curb the buildup of equity capital
100％ dividend payout ratio
Agile share repurchase/retirement

continue to consider the purchase andcancellation of its own shares to achieve 8% ROE
soon.
Trend of ROIC and WACC
ROIC

PBR

WACC

1.5

8.0%

2.0%
2017

2018

2019 2020
(FY)

2021

2022

Trend of PBR and EVA spread
PBR

EVA spread

EVA spread
（％）

6

1

0

0.5

-6
2017

2018

2019
2020
(FY)

2021

2022

＊From this year, some of the calculation methods for graph indices are revised for unification.

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25

Capital Policy - 2
Dividend
Previous
forecast

To achieve 8% ROE soon
Increase return on capital, enhanceshareholder returns, and control
equity capital oppressively.

Final target: 10% or more

55.00

69.00＊

Year-end

47.00

50.00

Annual

102.00119.00

Dividend and payout ratio
8% or more

(Yen)

100.9%
Dividend
Payout ratio (Right)

150(Forecast)

4.3%

4.5%

3.4%

31%

34%

45

35

45

2019

2020

2021

31%

2019 2020 2021 2022 2023 2024 2025
(FY)

100%

Revision

100%

119＊

0

50%

100
100%
dividend payout ratio

3.3%

0%

100.3% 100%

102＊

3.6%

5.8%

Revisionin Nov.

Interim

ROE trend
10%(Unit: yen)

0%
2022
(FY)

2023

2024

2025

＊ The interim dividend for FY2023 includes commemorative dividendof 10.00 yen for the 90th anniversary of the Company's founding.

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26

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27

E

Efforts for Carbon Neutrality

Introduction of renewable energy
Moka Plant (Tochigi prefecture) and Fuji Plant (Shizuoka prefecture) have started touse renewable energy 100% since April 2023, and Piolax Medical Devices has since
October 2023.
Installation of solar panels
The new Moka Plant will use solar panels to promote
self-sufficiency in renewable energy. We will develop
a supply system that will reduce environmental impact
in the area of life cycle assessment (LCA).
(t-CO2e)
20,000

Solar panels at the new Moka Plant (Image)

Carbon neutral targets and results in Japan
Base

FY23
-13%

FY25
-20%

: CO2 reduction
ratio
FY30
-46%
FY50
-100%

10,000

Forecast
0
2019

2023

Scope 2: indirect emissions (electricity)
CO2 emission limit target (BM: 2019)2025 2030 2035 2040 2050
Scope 1: direct emissions (total)

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FY30: 46% reduction
FY50: 100% reduction(from FY19)* We aim for carbon neutrality by 2050
for Scopes 1 and 2.
* Subject: Piolax and its domestic
group companies* We will analyze overseas groupcompanies for further study as a group.

28

S

Initiatives for Diversity

Diversity-related data

FY21

FY22

FY23 targets

Percentage of female managers

3.5%

3.9％

5% or more

Gender wage differential (Regular workers)ー79.1％*

Decrease from FY22

Percentage of male employees taking
maternity leave

18.2%

55.6％

Increase from FY22

*Gender wage differential: As for managers, 98.3%

Certification of “Kurumin”
On November 9, 2023, we acquired "Kurumin" certification from the Ministry of Health,
Labor and Welfare as a “company supporting child-rearing.“ During the period subject toaccreditation review, we set the following action goals: (1) encourage male employees totake childcare leave, (2) reduce overtime work, and (3) expand internship and otheropportunities. We believe that our achievements in these actions were evaluated and led
to our certification.
Certification of the highest ranking (3 rd stage) of"Eruboshi" as an outstanding company
We will continue our efforts to increase the numberof female managers and develop a workplaceenvironment where anyone can work
Comfortably and play an active role.
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Certification as an “excellent health management
corporation group in 2023” (large corporate
division)
We will continue our support to promote mental
And physical health and realize work-life balanceof all employees, which is one of the most
Important management objectives.

29

G

Strengthening GovernanceAggressive Management
Aiming to enhance corporate value
over the medium to long term

■2023
Review the executive compensation
system. Introduce a performancelinked factor→ Expanded to executive officers■2022
Increase the number of outside directors(3 to 4) (Female directors from 1 to 2)■2020
Assign a female director for the first time
■2019
Establish Nominating and Compensation Advisory Committee■2018
One third of directors are outside directors■2017
Introduce a stock compensation plan for directors■2016
Shift to a company with Audit and Supervisory Committee

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Board of Directors①Female directors: 20%(2 people among 10)②Outside directors: 40%(4 people among 10)

30

END
Forward-looking statements in this document are based on
information available to our company in announcing thefinancial results for the second quarter of FY23 and on certain
assumptions deemed reasonable, and their achievements are
not intended to be promised by our company. Actual results
may differ from these forecasts due to various factors.

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31