FY2023-2025
Medium-term Management Plan
(2023 Medium-term Plan)

May 29, 2023
Nippon Light Metal Holdings Company, Ltd.

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Quality issues

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Reserved.

2

Inappropriate behavior regarding issues related to quality in the Group We sincerely apologize for the serious inconvenience caused to customers and other stakeholders by several
incidents of inappropriate behavior by a Group company, including violation of the standards specified in the
Ministerial Ordinance on Certification of Conformity to Japanese Industrial Standards (JIS) relating to mineraland industrial products and their processing technologies (hereinafter, “the case”).
 The Group established a special investigation committee on June 9, 2021 to investigate the details of thecase, and since then the Group has cooperated in all respects with the committee’s investigation. This
investigation ended up taking considerable time since the scope of the investigation by the special
investigation committee was expanded beyond the JIS-certified subsidiary relating to mineral and industrial
products and their processing technologies, resulting in delays in sharing the investigation results with all
stakeholders. We apologize for this delay.
 On March 29, 2023, we received the Investigation Report from the special investigation committee, and on
the same day a special meeting of the Board was held and measures to prevent the reoccurrence of thiscase were discussed and determined.
 The Group views this case as a management issue and is pursuing management reforms and reinforcing
internal control functions. Going forward, management will take the leading role on initiatives to prevent
reoccurrence, and all of the Group’s officers and employees will implement these measures withconscientious intent. We will not allow our sincere regret over this case and the lessons learned from it todissipate but will ensure that they are shared by the next generation so that we can transform into a corporategroup worthy of the trust of its stakeholders.
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3

Overview of inappropriate behavior from discovery and progress withinvestigation and remedial actions
Inappropriate behavior revealed by investigation
Background and future plans
May 2021

Revocation of JIS certification for Nippon Light Metal
Company’s Nagoya Plant

Total number ofActs
inappropriate ① Manufacturing ② Test and③ Handling of test ④ Reports andacts methods
inspection
and inspection
releasemethods

JIS Certification Violation Investigation Committee
established
June 2021

Special investigation committee established

July 2021

Nikkei Niigata Company’s JIS certification revoked

November 2021 Makeup of special investigation committee adjusted
March 29, 2023 Investigation report received from special investigationcommittee“Results of Investigation on the Group’s Misconduct
Related to Quality, etc. and Prevention of Recurrence,etc.” released
April 27, 2023

Business Transformation Office set up

Mid-June, 2023 First report on progress to be released

Total

Of whichfalsified,
etc.

Total

Total

results

Of whichfalsified,
etc.

Total

Of whichfalsified,
etc.

Total

Of whichfalsified,etc.

Of whichfalsified,
etc.

Total

Status of safety investigation (as of May 23, 2023)
Company inspections and a company assessment
determined that none of these incidents had an
impact on safety
・Status of explanations to customers (4,015
companies): 99% complete

Status of remedial actions（as of May 23, 2023）

Of the 204 cases of inappropriate behavior related to
manufacturing and inspections, remedial actions
have been taken for 201 (measures are currently
being taken for three)
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4

Analysis of causes of Group’s inappropriate behavior
Perspective

Factors

Individual problems

An appropriate relationship between the sales, development,
manufacturing and quality assurance divisions broke down,
and motivation to take inappropriate steps to comply withthe deadline was created.

Weak independence
and effectiveness ofquality assurance
system・Inadequate management
resources
・Problems with management
system at time of orders

Structural problems
attributable to Group’s
history・Negative side of decentralized
corporate group

Problems withcorporate culture

・Climate in which it is difficult toreport problems or employees
are reluctant to do so・Reluctance to “offend”
・Habit of following precedenteven if employee has doubts
・Inadequate awareness ofstandards and rules① Strict deadlines
Motivation

Erroneousjustification② Employees mistakenly justified their behavior with theassumption that it would not hurt the safety of

products③ Lack of restraint and check functions at
workplace④ Lack of independence and authority with quality
assurance functions
Opportunity

Individual
problems⑤ Closed nature and distortions attributable to Group’s
history⑥ These factors acted off of each other so that no one
spoke up about inappropriate behavior, and the
difficulties faced on site were not addressed acrossdivisions and throughout the Group.

・Weak independence and effectiveness of quality
assurance system
・Structural problems attributable to Group’s history
・Problems with corporate culture

Specific content

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5

Company’s establishment of measures to prevent reoccurrence

Pursue management reforms

Reinforce internal control
functions（1） Rebuild Group’s governance system－Strengthen Group affiliation（2） Rebuild relationships between the Company
and Group companies（1） Build and administer effective internal control
system under supervision of Board of
Directors（3） Address management issues and risks within
the Group（4） Cross-sectoral response by sales,development, manufacturing, quality
assurance and other divisions（3） Reinforce information reporting andaffiliations（5） Rebuild the quality assurance system（6） Constant verification（7） Reinforce supervision by Board of Directors（6） Reforms to internal reporting system（2） Reforms of corporate culture（4） Promote activities to strengthen compliance（5） Reinforce internal audit division（7） Utilize external resources
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6

System for future initiatives
Areas indicated as important for
prevention of reoccurrence(special investigation committee)

Initiatives to prevent
reoccurrence

Reforms to perceptions to correct inappropriate behavior
and prevent reoccurrence

Pursue management reforms

Reconfirm legal responsibility for failure to comply with laws
Reforms to awareness so that employees understand theimportance of reporting the truth as it is
Encourage understanding of the emotional burden thatorders to act inappropriately have on employees
Ensure effectiveness of internal reporting system for thesake of changes to the way of thinking

Rebuild quality assurance system for Nippon Light Metal HD
Multiple reporting lines from Quality Assurance
Administration Department
Ensure independence of head of Quality Assurance
Administration Department director
Reinforce functions of Group subsidiary management

Rebuild quality assurance system for Group subsidiaries
Improve position of quality assurance divisions
Hire staff for quality assurance divisions
Update equipment and systems
Reformulate internal rules

Establishment of BusinessTransformation Office(April 2023)

Rebuild Group governance system(strengthen Group affiliations）

General Meeting of
Shareholders

Rebuild relationships between the Company andGroup subsidiaries

Board of Directors

Five other items

President and CEO

Reinforce internal control functions

Executive Committee

Reform corporate culture

Business Transformation
OfficePursue activities to strengthen compliance

Nippon Light Metal Business Group

Reforms to internal reporting system

Toyo Aluminium Business Group

Four other items

Rebuild quality assurance system
Reinforce Company’s quality assurance system
Reinforce quality assurance system for Groupoverall
Augment injection of management resources
into quality assurance functions
Two other items

Special investigative committee’s report materials:
https://www.nikkeikinholdings.co.jp/news/news/p2023032901hd.html

Audit & Supervisory
Board
Audit & Supervisory
Board Member

We aim to complete the 11
preventive measures in threeareas pointed out by the
special investigationcommittee by the completionof the 2023 Medium-term
Plan.

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7

Table of Contents

1. FY2022-2024 Medium-term Management Plan
Background for Revisions to 2022 Medium-term
Plan
2. FY2023-2025 Medium-term Management Plan
2023 Medium-term Plan

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1. FY2022-2024 Medium-term Management Plan

Background for Revisions to 2022 Medium-term Plan
The Group revised the 2022 Medium-term Plan in light of changes in the Group’sbusiness structure and strategic initiatives and began implementing the new 2023
Medium-term Plan.
 Changes to Group structure⇒Transfer of shares in Toyo Aluminium, consolidationof auto parts business and new company Nikkeikin
ALMO Corporation

 Comprehensive initiatives to realize
carbon neutrality
 Initiatives to prevent reoccurrence of
the Group’s Inappropriate behavior
Related to Quality, etc.

External environment
in F22

 Higher geopolitical risks
Risk of prolonged inflation related to restrictions
on imports and exports, exchange rates, and rate
trends⇒Fluctuations in aluminum ingot prices, spike in fueland raw material prices, higher needs for economic
security Risk of prolonged disruption in
supply chain⇒Prolonged disruption in auto and truck production
mainly due to insufficient semiconductor supply

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Table of Contents

1. FY2022-2024 Medium-term Management Plan
Background for Revisions to 2022 Medium-term
Plan
2. FY2023-2025 Medium-term Management Plan
2023 Medium-term Plan

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102. FY2023-2025 Medium-term Management Plan, 2023 Medium-term Plan

(1) Nippon Light Metal Group’s management policy and FY2023-2025
Medium-term Plan
Management principles
Management
policyImportant issues(Material issues)

Contribute to improving people's quality of life and environmental
protection by continuing to create business, focused on aluminum.
Group’s important issues (material issues)Protecting the global environment, providing sustainable value,
happiness of employees, responsible procurement, production
and supply, corporate ethics and governance
FY2023-2025 Medium-term Management Plan, 2023 Medium-term Plan

Medium-termManagement Plan

1. Initiatives for new Team Nippon Light Metal
2. Provide products and businesses that contribute to thecreation of social value

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2. FY2023-2025 Medium-term Management Plan, 2023 Medium-term Plan

Basic policies of 2023 Medium-term Plan
Pursue reforms to further raise corporate value so that we can become acorporate group that provides reliable value to stakeholders and regains thetrust of stakeholders

1. Initiatives for new Team Nippon Light Metal
 Structural reforms to raise Group’s corporate value
 Response to carbon neutrality
 Promote management reforms and reinforce internal control functions

2. Provide products and businesses that contribute to
the creation of social value Provide products and businesses that satisfy customers’ needs
 Provide a range of products and businesses throughout the overall supply
chain lifecycle
 Strengthen Group affiliation systems to solve social issues
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122. Overview of 2023 Medium-term Plan

Basic Policiesー Measures
Basic policies

1

2

Initiatives for
new Team
Nippon Light
Metal

Provideproducts andbusinesses
that contributeto the creationof social value

Measures

Objective (Background)

Structural reforms toraise Group’s corporate
value

Optimal allocation of resources andstructural reforms so that moreGroup synergies can be created

Carbon neutral(risk side)

Bring greenhouse gases down to
net zero by FY2050, down 30% in
FY2030 (compared to FY2013)

Cut CO2, set
KPI, support
for TCFD

Promote management
reforms and reinforce
internal control functions

Top management will take the leadwith a strong commitment toimplementing initiatives

Special investigationcommittee, internal
investigation,
improvement activities

Acquisition of growth
areas
Overseas strategy
Carbon neutral（Opportunity side）

Fiscal 2022

Fiscal 2023

Fiscal 2024

Fiscal 2025

Consolidation of auto parts
business, new company
Group decarbonization strategy; formation of organization,
drafting and implementation of integrated strategy

Integration of functions for procurement,
production and sale of aluminum ingot

Measures to prevent reoccurrence(rebuilding Group governance system,
reinforcing internal audit divisions,reforming corporate culture, etc.)

Auto parts company Nikkeikin
ALMO
・Autos: Rapid growth in eco-friendly Auto parts
US: mass production of auto underbody
cars
Two poles consistingparts (trilateral system)of Japan and China
Expansion of overseas auto
Lighter weight of auto parts, thermal
countermeasures for auto parts,
compatible with method-by-method
cross-organizational approachmarket・Semiconductors: return toproduction in Japan・High need among customers to
reduce CO2 (Scope 3)

US: Increased production for secondary alloys
for auto body structural materials

India: Two bases forsecondary alloys (minority)

India: third base for secondary
alloys (majority)

Japan: thermal insulation panels,
reinforce engineering

Japan: increased production ofthermal insulation panels forsemiconductor clean rooms

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2. Overview of 2023 Medium-term Plan

Basic Policiesー Measures
1. Initiatives for new Team Nippon Light Metal
 Structural reforms to raise Group’s corporate value
 Response to carbon neutrality
 Promote management reforms and reinforce internal control functions

Basic policies

1

2

Initiatives for
new Team
Nippon Light
Metal

Provideproducts andbusinesses
that contributeto the creationof social value

Measures

Objective (Background)

Structural reforms toraise Group’s corporate
value

Optimal allocation of resources andstructural reforms so that moreGroup synergies can be created

Carbon neutral(risk side)

Bring greenhouse gases down to
net zero by FY2050, down 30% in
FY2030 (compared to FY2013)

Cut CO2, set
KPI, support
for TCFD

Top management will take the leadwith a strong commitment toimplementing initiatives

Special investigationcommittee, internal
investigation,
improvement activities

Promote management
reforms and reinforce
internal control functions
Acquisition of growth
areas
Overseas strategy
Carbon neutral（Opportunity side）

Fiscal 2022

Fiscal 2023

Fiscal 2024

Fiscal 2025

Consolidation of auto parts
business, new company
Group decarbonization strategy; formation of organization,
drafting and implementation of integrated strategy

Integration of functions for procurement,
production and sale of aluminum ingot

Measures to prevent reoccurrence(rebuilding Group governance system,
reinforcing internal audit divisions,reforming corporate culture, etc.)

Lighter weight of auto parts, thermal
countermeasures for auto parts,
compatible with method-by-method
cross-organizational approach

Auto parts company Nikkeikin
ALMO

・Autos: Rapid growth in eco-friendly Auto parts
US: mass production of auto underbody
cars
Two poles consistingparts (trilateral system)of Japan and China
Expansion of overseas auto
US: Increased production for secondary alloys
marketfor auto body structural materials
・Semiconductors: return toproduction in Japan
India: second base for
India: third base for secondary
・High need among customers tosecondary alloys (minority)
alloys (majority)
reduce CO2 (Scope 3)
Japan: thermal insulation panels,
reinforce engineering

Japan: increased production ofthermal insulation panels forsemiconductor clean rooms

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2. 2023 Medium-term Plan 1. Initiatives for new Team Nippon Light Metal

Overall view of initiatives
Top management will take the lead in pursuing the following initiatives with a strong
sense of purpose and commitment.

Structural reforms
to raise corporate value
Reforms tobusiness
structure

Consolidationof auto parts
business

Transfer of shares inToyo Aluminium

Formation of
Nikkeikin ALMONew Team
NipponLight
Metal
Carbon neutral
Reducegreenhouse
Gas emissions

Promote management reforms
Reinforce internal control functions
StrengthenGroupaffiliations
Reformcorporate
cultureRebuild
qualityassurancesystem

Supportfor TCFD
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2. 2023 Medium-term Plan 1. Initiatives for new Team Nippon Light Metal

Response to carbon neutrality■Support for TCFD■■Reduce greenhouse gas emissions■Company reductions (Scopes 1 and 2)
Reductions along the supply chain (Scope 3)
Target announced in 2022
30% reduction in FY2030 (compared to 2013)

Task Force on Climate-Related
Financial Disclosures (TCFD)
Expressed support in 2022

Fiscal 2050
Greenhouse gas emissions
Net zero
Green Growth Strategy Office established as the system and organization to pursue
carbon neutrality

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2. 2023 Medium-term Plan 1. Initiatives for new Team Nippon Light Metal

Establishment of Green Growth Strategy Office April 2023
Comprehensive drafting andimplementation of Group’s optimal
decarbonization strategy① Formation of cyclical aluminum material supply system and optimization within Group② Strategy formulation to raise corporate value③ Establishment of road map for realization④ Progress management for plan execution

Green Growth Strategy Office

Drafting of comprehensive decarbonization strategy

Group recycling project team
Reductions in Scope 3 emissions

Response tocarbon neutral
measures

Reduction of
Scope 1, 2
emissions（energy conservation）

Management ofprocurement of
low-carbon
materials

Promotion of
expandedmaterials（horizontal recycling）

Expanded use of
scrap（Upgrades）

Expansion ofareas in which
aluminum isused

June 2023 Reorganization of metal-related divisions

Green technology project teamDrafting, implementation and support for decarbonization R&D
technology development strategy

Consolidation of organizations as the core of efforts to promote carbon neutrality① Consolidation of material procurement, production and sales functions② Reinforcement of scrap procurement, use of Group affiliations, and expansion of
scrap uptake③ Expand business through stable procurement of high-purity materials
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2. Overview of 2023 Medium-term Plan

Basic Policiesー Measures
2. Provide products and businesses that contribute to
the creation of social value Provide products and businesses that satisfy customers’ needs
 Provide a range of products and businesses throughout the overall
supply chain lifecycle
 Strengthen Group affiliation systems to solve social issues
Basic policies

1

2

Initiatives for
new Team
Nippon Light
Metal

Provideproducts andbusinesses
that contributeto the creationof social value

Measures

Objective (Background)

Structural reforms toraise Group’s corporate
value

Optimal allocation of resources andstructural reforms so that moreGroup synergies can be created

Carbon neutral(risk side)

Bring greenhouse gases down to
net zero by FY2050, down 30% in
FY2030 (compared to FY2013)

Cut CO2, set
KPI, support
for TCFD

Top management will take the leadwith a strong commitment toimplementing initiatives

Special investigationcommittee, internal
investigation,
improvement activities

Promote management
reforms and reinforce
internal control functions
Acquisition of growth
areas
Overseas strategy
Carbon neutral（Opportunity side）

Fiscal 2022

Fiscal 2023

Fiscal 2024

Fiscal 2025

Consolidation of auto parts
business, new company
Group decarbonization strategy; formation of organization,
drafting and implementation of integrated strategy

Integration of functions for procurement,
production and sale of aluminum ingot

Measures to prevent reoccurrence(rebuilding Group governance system,
reinforcing internal audit divisions,reforming corporate culture, etc.)

Lighter weight of auto parts, thermal
countermeasures for auto parts,
compatible with method-by-method
cross-organizational approach

Auto parts company Nikkeikin
ALMO

・Autos: Rapid growth in eco-friendly Auto parts
US: mass production of auto underbody
cars
Two poles consistingparts (trilateral system)of Japan and China
Expansion of overseas auto
US: Increased production for secondary alloys
marketfor auto body structural materials
・Semiconductors: return toproduction in Japan
India: second base for
India: third base for secondary
・High need among customers tosecondary alloys (minority)
alloys (majority)
reduce CO2 (Scope 3)
Japan: thermal insulation panels,
reinforce engineering

Japan: increased production ofthermal insulation panels forsemiconductor clean rooms

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18

2. 2023 Medium-term Plan 2. Provide products and businesses that contribute to the creation of social value

Growth areas that Group will focus on
Full mobilization of Group’s strengths to resolve social issues (reductions in
CO2, economy security) and satisfy customer needs
Public facilities, landscaping
and architecture

Automotive
Toyo
Aluminium

Food products and daily
necessities

Other
Transportation

Automotive

Fiscal 2022
results
517bn yen

30％
Auto parts
Electrical machinery, electronics andtelecommunications

Electrical machinery,electronics andtelecommunications

Public facilities,
landscaping andarchitecture Food
products Transportationand daily
necessities

8％
Semiconductor-related
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19

2. 2023 Medium-term Plan

2. Provide products and businesses that contribute to the creation of social value

Consolidation of auto parts business and formation of newcompany

Automotive

Integrate Group’s strengths (materials, manufacturing methods, processing
technology, development) and create the value customers are seeking

October 2023, business consolidation New company, Nikkeikin ALMO, formed■ Air conditioning and heating parts ■Capacitors for car air conditioners■ Main products

Other

30％

Fiscal 2022
results
517bn yen

Electrical machinery,electronics andtelecommunications

Public facilities,
landscaping andarchitecture Food
products Transportationand daily
necessities

8％■Structural parts■
Sunroof guide rails■Powertrain■
Heat dissipation plates for eco-friendly cars

■Underbody parts■
Brake calipers

Suspension

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2. 2023 Medium-term Plan 2. Provide products and businesses that contribute to the creation of social value

Trends in auto industry and Group’s initiatives＜Nippon Light Metal Group’s initiatives＞
New company, Nikkeikin ALMO, formed＜Trends in auto industry＞

Auto industry is shifting to electric cars as
governments take environmental measuresand other Centralization of information,

Auto manufacturers and mega suppliers Drastic shift to electric vehicle development togetherwith massive investments→ Allocation of resources from hardware to non-hardware
Efforts to reduce environmental impact→ One of the options when selecting a supplierThreat of entries from other industries, intensecompetition
Inadequate resources for development and quality
assurance, etc.
→ Dependence on suppliers
Local production, local consumption

Suppliers of auto parts
 Response to requests for new parts for electric cars

→ Increase in number of business consultations→ Development over short period
 Response to larger scale of business consultations→ Secure resources for development and manufacturing,etc.
 Global supply system■ Nikkeikin ALMO Net sales

faster decision-making
 Consolidation of scatteredresources and flexible allocation
 Ability to respond to global
supply Establish and popularize
Company’s brand

Better services
for customers
and higher
corporate
value（Unit: Billions of yen)

Integration synergies 1,000
100.0
32.5
325
F22

370
37.0

500
50.0

Early
F23
F25
F23予想
F25目標
2030年代
2030s
forecasts target
前半

Global Manufacturing and supply system■Georgia, US＜Five factories in Japan＞■ Headquarters, sales■ Manufacturing■Tomakomai■Suzhou,
China■Thailand■Ueda, Nagano(2 factories)■Kambara,
Shizuoka(2 factories)■Shenzhen,
China＜Four factories overseas＞■Tokyo(headquarters)■Osaka ■Hamamatsu

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2. 2023 Medium-term Plan

2. Provide products and businesses that contribute to the creation of social value

Group’s semiconductor-related products

Automotive

Provide diverse products and business for growth opportunities insemiconductor-related industries
Semiconductor manufacturing equipment applications

Other

Fiscal 2022
results
517bn yen

30％

Electrical machinery,electronics andtelecommunications

Public facilities,
landscaping andarchitecture Food
products Transportationand daily
necessities

8％

Applications for clean rooms
for semiconductor factories■Chemicals Division■

Low-dielectric aluminum forsemiconductor manufacturing
equipment

Low-soda aluminum

Processed goods for clean
rooms for semiconductor
factories■Rolled Products Division■

Thick plates for semiconductor
manufacturing equipment

Thick plates

SUS valve for semiconductor
manufacturing equipment

Non-CFC thermal
insulation panels
for clean rooms
for semiconductor
factories

Materials for extruded
products

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2. 2023 Medium-term Plan 2. Provide products and businesses that contribute to the creation of social value

Trends in semiconductor-related market and Group’s initiatives＜Trends in semiconductor-related markets＞
Semiconductor-related demand doubles→ Shortage of 100,000 panels in thermal insulation panel industry
Scale of semiconductor-related market（Unit: 1 trn yen）

100
75

＜Group’s initiatives＞
Construction of system for increased
production of non-fluoron thermal insulation
panels for clean rooms
Nikkei Panel System builds second factory in
Shimonoseki

Existing factory50

Capturedemand for
2020年
2025年
2030年
2030
2025
2020
From METI’s “Semiconductor Strategy”
expansion of
Scale of thermal insulation panel market semiconductor
Scale of market for thermal insulation
factories inpanels for semiconductor-related ●Expand demand in medium term
as interior material for clean roomJapan
clean rooms estimated at
14 billion yen

buildings●Operation of thermal insulation
panel manufacturers at nearly
100% in Japan

Company’s estimates

Second factoryNon-fluoron thermal
insulation panels

Nikkei Panel System＜Net sales＞■for clean rooms■for low-temperature spaces

30.9
309

●Second factory building
about 4,500 ㎡●2.5 billion yen investment● Start construction in 2023
with manufacturing tobegin in 2024
●10% increase in Nikkei
Panel System’s
production capacity●Nikkei Panel System’s
manufacturing sites
Shiga factory, Shimonoseki factory,
Tomakomai factory （Unit: Billions of yen)）
34.0
33.7
３４０
337

Solid demand
FY2022
2022年度FY2023
2023年度FY2025
2025年度Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

23

2. 2023 Medium-term Plan 2. Provide products and businesses that contribute to the creation of social value

Growth business and products
Develop and provide products utilizing the strengths of aluminum as a lightweight material withhigh heat dissipation
Business
Sales growth（％）
MarketGrowth business andCompared to FY22
company and(Unit: Billions of yen)
■ Sales by market domain
domainproduct
division
F23→F25
5,500
550.0
5,300
530.0
5,170
Nippon Light Metal, Fire-resistant heat-dissipating filler
46% increase →517.0
Toyo Aluminium
Otherchemicals（for xEV, etc.）

67% increase

Nikkei MC
Aluminium

US, secondary alloys car body structuralcomponents

2% increase →32% increase

India, third base for secondary alloy
New company (operations to begin in
FY24)(overseas sales ofsecondary alloys)
10% increase →41% increase

Nippon Light
Metals, aluminum
sheetsSheet materials for auto battery cases

12% increase →25% increase

Nikkeikin ALMO
(new company)

Consolidation of auto parts business

14% increase →54% increase

Nippon Light
Metals, chemicals

Low-soda aluminum for semiconductor
manufacturing equipment

58% increase →99% increase

Nippon Light
Metals, aluminum
sheetsThick plates and general materials forsemiconductor manufacturing
equipment and other

12% increase →33% increase

Nikkei Panel
SystemJapan, thermal insulation panels forclean rooms

26% increase →35% increase

Nikkei MC

Automotive Aluminium

Public facilities,
landscaping andarchitecture
Food and daily necessities

Transportation

11%

Electrical machinery,electronics andtelecommunications

8%

Automotive

30%

F22

36%

F23
F23予想

forecasts

F25
F25目標
targetElectricalmachinery,electronics
andTelecommunications(semiconduc
tor- related)

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2. Overview of 2023 Medium-term Plan

Capital investment and R&D expenses
Aggressive capital investment to expand sales and develop new products

Main capital investment into sales expansion and new products
during period of 2023 Medium-term Plan

Unit: Billions of yen
Toyo Aluminium
R&D expenses
Expanded sales and new products112.0
Energy conservation, safety, etc.
Maintenance and updates

120.0

97.2

100.0

15.3

86.5
80.0

20.0

0.0

17.1

7.5
10.3

40.0

2016 Medium-term Plan
F16-18(of which, Toyo
Aluminium)

30.0

16.3

37.6

Depreciation

29.6

12.7

10.7

60.0

Market area

28.3

29.6

2019 Medium-term Plan
F19-212023 Medium-term Plan
F23-2551.0（12.1）

57.9（13.7）

61.0（5.0）

Since the timing of the transfer of shares in Toyo Aluminium has not been set
at this point, Toyo Aluminum’s figures is factored only into FY23 forecasts.

Company

Case

Capital investment
during 2023
Medium-term Plan
(Billions of yen)

Automotive,
Electrical machinery,electronics andtelecommunications(semiconductor)

Nippon Light Metals,
chemicals

New almina products

1.0

Automotive

Nikkei MC Aluminium

Third base in India

1.0

Automotive

Nikkeikin ALMO

New auto parts in
Japan

3.5

Automotive

Nikkeikin ALMO

New auto products forthermalcountermeasures in
Japan

1.5

Automotive

Nikkeikin ALMO

North America autoparts factory

3.5

Automotive

Nikkeikin ALMO

China new auto parts

2.5

Electrical machinery,electronics andTelecommunication(semiconductor)

Nikkei Panel System

Increased production of
non-fluoron thermal
insulation panels in
Japan

2.5

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

25

2. Overview of 2023 Medium-term Plan

Financial targets
Build up a system that can consistently achieve ordinary profit in the 30-40
billion yen range to enable the Group’s sustainable growth
F22

F23

2023
mediumterm plantargetF25

actualforecast

Net sales

517.0

550.0

530.0

Operatingprofit

7.5

17.0

30.0

Ordinary profit

8.9

16.0

30.0

Net sales
600.0

29.5
24.5

50 yen

100 yen

100.0

ROCE

3.2%

5.2%

10.3%

0.0

31.1

26.3

30.0

20.0

16.0

12.7

8.9

6.9

F12

F13

F14

F15

F16

30.0

23.5 24.0 22.9

20.6

200.0

50 yen

31.0%

50.0

40.0

300.0

Annualdividends

41.3%

Net sales

400.0

20.0

43.0%

60.0

500.0

7.5

Total dividend
payout ratio

Ordinary
profitOperating profit

7.2

Profit(Unit* Billions of yen)

F17

F18

F19

F20

F21

F22

10.0

F23

F25

0.0

Forecasts 2023 Medium-

term Plan target

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

26

2. Overview of 2023 Medium-term Plan

FY2025 Financial Targets by segment － Compared to FY2022(Billions of yen)

Net sales
Fiscal 2022
Results

Fiscal 2025
Targets

Aluminum ingot
and chemicals

156.0

180.0

Aluminum sheet
and extrusions

107.4

150.0

Fabricatedproducts andothers

153.2

200.0

Aluminum foil,
powder, and paste

100.4Management,
sharedTotal

Operating profit
Fiscal 2022
Results

Fiscal 2025
Targets

+24.0

10.2

12.0

+42.6

-0.6

9.0

( － ）

+46.8

(+30.6%)

0.1

13.0

+12.9

－

-100.4

1.5

－

-1.5

－

－

－

-3.7

-4.0

-0.3

517.0

530.0

+13.0

7.5

30.0

+22.5

Change(+15.4%)(+39.7%)(+2.5%)

Change+1.8(+17.6%)+9.6(+297.9%)

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

27

2. 2023 Medium-term Plan: Overview by segment

Aluminum ingot and chemicals
Expand heat-dissipating, lightweight products and capture higher demand for autos
overseas to boost operating profit by 18% in FY25 (compared to FY22)
Operating profit(Billions of yen)

Net sales(Billions of yen)

200.0
180.0
160.0

Nikkeikin·chemicals
Operating profit

Nikkei MC Aluminium

180.0
160.0

156.0

20.0
18.0
16.0

140.0

Aluminum, chemicals (Nippon Light Metal, chemicals)

Secondary alloys (Nikkei MC Aluminium) Expand sales of fire-resistant heatdissipating filler for xEV (aluminumhydroxide) Increased sales of low-soda aluminum forsemiconductor manufacturing equipment

 Japan: Capture auto body structural materials for EV
and electric car part material US: Increased sales of applications for auto bodystructural parts
 Thailand: Capture growth in number of autos sold
 China: Expand sales of applications for EV parts andmaterials
 India: Third base newly built (Company majority),
operations started
35.0

50.0

14.0

120.0
100.0

10.2

80.0

10.5

12.0

12.0
10.0
8.0

60.0

6.0

40.0

4.0

20.0

2.0

0.0

0.0

F22

F23
F25 Targets
Forecasts

40.0

37.9

39.7

45.0

30.2

27.6

China

China

30.0

Thailand

20.0

Over
seas

13.9

US

Thailand

Over
seas

15.3

US

10.0

Japan 13.7

0.0

Sales
Billions of
yen/year

F22

F23
F25
Forecasts Targets

Sales
volume1000
tons/year

F22

Japan

14.9

India
China
Thailand

US
Japan

Over
seas

19.0

16.0

F23 Forecasts F25 Targets

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28

2. 2023 Medium-term Plan: Overview by segment

Aluminum sheet and extrusions
Capture high-revenue products and new product types on back of recovery in thick plates for semiconductor
manufacturing equipment and applications for autos and trucks to improve operating profit by about 10 billion yen
by FY25
Extruded products
Nippon Light Metal, sheets
Net sales
Operating profit（Nikkeikin Aluminium Core Technology）(Billions of yen)(Billions of yen)

Other
Nikkeikin
Aluminium Core Technology
Nippon Light Metal, plates
Operating profit

200.0
180.0

18.0

150.0

160.0
140.0
120.0

20.0

16.0

53.0

14.0

107.4

105.0

41.5

12.0

100.0

 Stabilize revenue foundation due to recovery in sales oftruck body applications
 Capture expanded sales, new products and new demand
for autos, such as EV, focused on Japan, China and US（Heat dissipation and underbody parts）

73.0

45.4
52.7

10.0

9.0

80.0

6.0

40.0

4.0

0.5

20.0

-0.6

F22

F23 Forecasts F25 Targets

54.4

8.0

60.0

0.0

 Demand recovery and expansion from correction insemiconductor-related products and capture ofhigh-revenue products
 Expand sales of battery materials for autos, secure
new product types in Japan and overseas and newcustomers

2.0
0.0

Sales
Billions of
yen/year

F22

F23 Forecasts F25 Targets

Sales
Billions
ofyen/year

F22

F23 Forecasts F25 Targets

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

29

2. 2023 Medium-term Plan: Overview by segment

Fabricated products and others
Following sales price revisions, capture restored demand for truck bodies and demand on recovery ofsemiconductor production in Japan and other to generate 13 billion yen in operating profit in FY25
Net sales(Billions of yen)(Billions of yen)

Nippon Fruehauf
250.0

150.0

Nikkei Panel System

Operating profit

25.0

182.0

200.0

200.0

153.2

20.0

15.0

13

100.0

7

50.0

Nippon Fruehauf

Nikkei Panel System Recovery in earnings due to steadyrevisions to sales prices to counter spikein raw material and fuel prices
 Capture restored demand for trucks, aswell as demand for EV and electric carsand demand spurred by 2024 problem
 Higher sales in service and maintenance
field
74.0

 Increased sales of thermal insulation panels
for clean rooms by capturing demand forfactory expansions and demand sparked byreturn of semiconductor production toJapan Compatibility with larger projects, including
food processing factories, andreinforcement of engineering

Operating profit

54.4

64.9

10.0

30.9

33.7

34.0

5.0

0.1
0.0

F22

F23 Forecasts

F25 Targets

0.0

Sales
Billions of
yen/year

F22

F23 Forecasts

F25 Targets

Sales
Billions of
yen/year

F22

F23 Forecasts

F25 Targets

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

30

2. Overview of 2023 Medium-term Plan

Factors behind changes in ordinary profit － Fiscal 2022→Fiscal 2025
F23 recovery in truck body, auto and semiconductor-related applications, improved profits offsetting
spike in fuel and material prices→ F25 Profit growth on growth areas and new products such as auto- and semiconductor-related

Fiscal 2022
Results

Fiscal 2025
Targets＋21.1 billion yen
-11.6

30.0

Other

Sales priceSales
volume8.9

New products

＋18.5

＋4.5

-4.3
Purchased products＋14.0

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

31

2. Overview of 2023 Medium-term Plan

Shareholder returns■Basic policy■

Return profits to all shareholders, comprehensively taking into account the maintenance of consolidated earnings and a soundfinancial foundation for the medium to long term, while also reinforcing the financial system and management foundation(shareholder returns based on stable dividends).

■Total dividend payout ratio■ 「30% or higher」
Interim

120
100

80

80
60
40

30

40

50

60

20
0

50
30

F12

F13

F14

F15

F16

80
40
40

90

90

50

50

40

40

Year-end

100

85
65
65

45

50

10

40

（Unit: yen）

40

50
40
10

F17

F18

F19

F20

F21

F22

F23

Planned Forecast

F25

FY23 Mediumterm Plan target

We will strive to manage business with a focus on improving PBR by raising profitability through implementation of themeasures in the 2023 Medium-term Plan, overhauling the business structure and improving capital efficiency.
The Company carried out a share consolidation at a ratio of 1 share for every 10 shares of common stock on October 1, 2020,
and the dividend amount per share prior to FY2019 (fiscal year ended in March 2020) takes into account the effect of thisshare consolidation
Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

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チーム日軽金として、異次元の素材メーカーへ
Team NLM – Groundbreaking Innovator of Aluminum and Beyond33Supplemental materials

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34

Supplemental materials

Trends in overall demand for aluminum products in Japan
400
350
300
250

000 ・・・Average during period(1000 tons)
315
266

316

312

302

200
150
100
50
0

4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1
Fiscal 2020
Fiscal 2021
Fiscal 2022
Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

35

Supplemental materials

Elements and sensitivity
Fiscal2021
Results

Aluminum
ingot

378

Fiscal2022
Results

408

Fiscal2023
Forecasts

Sensitivity to ordinary profit

400

Assuming a 10 yen/kg
increase-0.5 billion yen/year

140

Assuming 10 yen
appreciation-0.5 billion yen/year

95

Assuming a USD10/BBL
increase-0.6 billion yen/year(yen/kg)

Exchange
rates

113

135

(JPY/USD)

Dubai crude(USD/BBL)

78

93

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

36

Supplemental materials

Financial results for the fiscal year ended March 31, 2023
– compared with the same period in previous fiscal year

(Billions of yen)

Fiscal 2021
Results

Fiscal 2022
Results

Net sales

486.6

517.0

Operating profit

22.2

7.5

Ordinary profit

22.9

8.9

Profit attributable toowners of parent

16.8

7.2

(-57.0%)

ROCE

8.7%

3.2%

-5.5p

Dividends per share

85 yen50 yen-35 yenChange+30.4(+6.2%)-14.7(-66.0%)-14.0(-61.4%)-9.6

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

37

Supplemental materials
Financial results for the fiscal year ended March 31, 2023
Factors behind changes in ordinary profit – compared with the same period in previous fiscal year

Fiscal 2021
Results-14.0 billion yen
+12.8

-8.3

(Billions of yen)

-15.7

-2.7
8.9

Other

Purchased
products

Sales priceNew products-0.1
Sales volume

22.9

Fiscal 2022
Results

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

38

Supplemental materials
Financial results for the fiscal year ended March 31, 2023
Segment information – compared with the same period in previous fiscal year

(Billions of yen)

Net sales
Fiscal 2021
Results

Fiscal 2022
Results

127.6

156.0

Aluminum sheet
and extrusions

113.9

107.4

Fabricatedproducts andothers

153.4

153.2

Aluminum foil,
powder, and paste

91.7

100.4

Management,
shared

－

－

486.6

517.0

Aluminum ingot
and chemicals

Total

Operating profit
Fiscal 2021
Results

Fiscal 2022
Results

+28.4

13.0

10.2

-6.5

7.5

-0.6

-8.1

-0.2

3.8

0.1

-3.7

+8.7

1.6

1.5

(-3.3%)

-3.7

-3.7

±0

22.2

7.5

-14.7

Change(+22.2%)(-5.7%)(-0.2%)(+9.5%)－+30.4(+6.2%)

Change-2.8(-21.7%)(―)(-98.4%)-0.1(-66.0%)

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

39

Supplemental materials

Financial results of key companies for the fiscal year ended March 31, 2023
(Billions of yen)

Fiscal 2021 Results
Nippon Light Metal(Parent)
Toyo Aluminium(Consolidated)
Nikkei MC Aluminium(Consolidated)
Nippon Fruehauf(Consolidated)
Nikkeikin Aluminium CoreTechnology(Consolidated)
Nikkei Panel System(Consolidated)

Fiscal 2022 Results

Net sales

OperatingprofitOrdinary
profitNet sales

OperatingprofitOrdinary
profit

137.6

6.5

10.0

155.3

2.9

7.2

92.0

1.5

2.3

100.8

0.9

2.5

84.2

3.9

4.3

103.8

2.3

2.8

60.4

-1.6

-1.5

54.4

-5.4

-5.4

52.8

2.6

2.7

52.7

-1.3

-0.9

28.6

3.3

3.5

30.9

4.1

4.1

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40

Supplemental materials

Full-year financial results forecasts and dividend forecasts for the fiscal year
ending March 31, 2024
(Billions of yen)

Fiscal 2022
Results

Fiscal 2023
Forecasts（May 15）

ChangeNet sales

517.0

550.0

+33.0

Operating profit

7.5

17.0

+9.5

Ordinary profit

8.9

16.0

Profit attributable toowners of parent

7.2

7.5

(+4.1%)

ＲＯＣＥ

3.2%

5.2%

+2.0p

Dividends per share

50 yen50 yen±0(+6.4%)(+125.5%)+7.1(+80.6%)+0.3

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

41

Supplemental materials

Factors behind changes in ordinary profit for the fiscal year ending March 31, 2024
– compared with the same period in previous fiscal year

Fiscal 2022
Results

Fiscal 2023
Forecasts（May 15）+7.1 billion yen
+11.9

-5.4
-5.7

Other

Sales priceNew products

Sales volume

8.9

Purchased products

+5.4

16.0

+0.9

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

42

Supplemental materials

Segment information – compared with the previous year
(Billions of yen)
Net sales
Fiscal 2022
Results

Fiscal 2023
Forecasts

Aluminum ingot andchemicals

156.0

160.0

Aluminum sheet andextrusions

107.4

105.0

Fabricated products
and others

153.2

182.0

Aluminum foil,
powder, and paste

100.4

103.0

Management,
shared

－

－

Total

517.0

550.0

Operating profit
Fiscal 2022
Results

Fiscal 2023
Forecasts

+4.0

10.2

10.5

-2.4

-0.6

0.5

+1.1

+28.8

0.1

7.0

+6.9

+2.6

1.5

3.0

+1.5

-3.7

-4.0

-0.3

7.5

17.0

+9.5

Change(+2.6%)(-2.2%)(+18.8%)(+2.6%)－+33.0(+6.4%)

Change+0.3(+2.9%)(―)(+97.6%)(+125.5%)

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

43

Supplemental materials

Forecast of consolidated financial results of key companies for the fiscal year ending
March 31, 2024
(Billions of yen)

Fiscal 2022 Results

Fiscal 2023 Forecasts

Net sales

OperatingprofitOrdinary
profitNet sales

OperatingprofitOrdinary
profitNippon Light Metal(Parent)
Toyo Aluminium(Consolidated)
Nikkei MC Aluminium(Consolidated)
Nippon Fruehauf(Consolidated)
Nikkeikin Aluminium CoreTechnology (Consolidated)

155.3

2.9

7.2

160.6

4.1

6.6

100.8

0.9

2.5

104.8

3.2

3.3

103.8

2.3

2.8

106.9

2.3

2.6

54.4

-5.4

-5.4

64.9

0.1

0

52.7

-1.3

-0.9

54.4

-0.6

-0.5

Nikkei Panel System

30.9

4.1

4.1

33.7

4.3

4.3

(Consolidated)

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

44

Supplemental materials

Cash Allocation
Cash Allocation Diagram
2016 mid-term
management plan

OperatingCF

97.0

billion yen

51.0

billion yen

Investing CF

Operating
CF

-49.6

-15.5

billion yen
Reinforcing
the financial
foundation-31.9

billion yen

78.0

Depreciation

billion yen
Shareholder
returns

Research
investment
17.0
billion yen

Research
investment
18.2
billion yen

Research
investment15.6
billion yen

Depreciation

2023 mid-term
management plan2019 mid-term
management plan

Operating
CF

91.9

57.9

billion yen

Investing CF-73.4

Depreciation

61.0

billion yen

billionyen

Investing CF-96.0

billion yen

billion yen

billionyen
Shareholder
returns

Funding, etc.

billion yen

billion yen-15.2

Reinforcing thefinancial foundation-3.3 billion yen

30.0

Shareholder
returns-12.0

billion yen
The timing of the transfer of shares in Toyo Aluminium iscurrently undecided and has only been factored into
forecasts for FY23 .
Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

45

Supplemental materials

Equity Ratio and D/E Ratio(times)

（％）
1.8
40

2.0

1.8
1.6
1.4

30
20

26.6
25.0 25.5

35.6

28.8 0.9

37.2

0.8

39.0 39.6

0.7

0.7

37.6 38.1 39.0

0.8

0.8

0.8

41.5

43.4
1.5

1.0

0.8

0.7
0.5

10
Equity Ratio (%)

0

D/E Ratio (times)

F12 F13 F14 F15 F16 F17 F18 F19 F20 F21 F22 F23

Forecasts

F25

0.0

Medium-termplan target

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

46

Supplemental materials

Overseas sales and operating profit
Overseas sales(Billions of yen)
140.0
120.0

Overseas operating profit(Billions of yen)

China

114.7

Thailand

US

Other

126.0

36.0

80.0

40.0
20.0
0.0

127.0

21.8
34.0

China

Thailand

US

Other

8.0

Toyo Aluminium

7.5

6.0

100.0

60.0

Toyo Aluminium

1.5
4.0

3.6

1.5

2.0

0.5
0.7

3.0

28.0
34.0

40.0

22.4

26.0

33.0

F22

FY23 forecast

FY25 target

0.0

-2.0

0.3
1.1

1.1

1.4

-0.7

F22

FY23 forecast

FY25 target

Copyright Nippon Light Metal Holdings Co.,Ltd All rights Reserved.

47

Supplemental materials

Non-Financial targets: KPIs for material issues
The Five Material Issue
ThemesProtecting the global
environment

Providingsustainable value

Happiness of
employees●Reducing greenhouse gas emissions from company
activities (scope 1, 2)●Reducing greenhouse gas emissions in the supply
chain (scope 3)●Action on climate change (TCFD)●Responding to water stress●Preventing environmental pollution●Efforts to expand the use of renewable energy●Developing and providing low-carbon products andservices●Promoting a recycling-oriented economy and society●Developing and providing robust infrastructure●Contributing to the stable supply of food
●Shaping the future through innovation●Total scope 1 and 2 emissions (per unit of sales/Japan only) FY2021: 1.58 tons CO2/million yen●Total scope 3 emissions (per unit of sales/Japan only)
FY2021: 4.51 tons CO2/million yen●Number of environmental incidents and complaints
FY2021: 3 environmental incidents and 7 environmental complaints●Growth rate of sales of products for eco-friendly vehicles (Japan)●Rate of purchase of external scrap●Number of lost-time injuries FY2021: 15 in Japan●Occupational health and safety●Developing a fulfilling workplace●Diversity & inclusion●Securing and cultivating human resources

Responsible procurement,●Providing safe and secure products and services
production and supply●Protecting and respecting human rights●Developing a stable supply chain●A resilient value chain that is flexible to changes

Corporate ethics andgovernance

Key Performance Indicator (KPI)

Material Issues●Strengthening governance●Reinforcing the compliance framework●Percentage of childcare leave taken by male employees FY2021: 18.5% (Japan)● Percentage of managers that are women FY2021: 5.4% (consolidated)●Number of employees who received next-generation management training FY2021: 13 (Japan)
Percentage of managers who received managerial training FY2021: 100% (Nippon Light Metal Co., Ltd.)●Percentage of major suppliers that responded to a questionnaire survey to check that they understand and have approved
our CSR procurement policy FY2021: 35%●Number of prompt reports FY2021: 15●Number of self-assessments conducted by the Board of Directors FY2021: 1●Number of times an opportunity to inspect business locations, etc. was provided to Outside Officers●Percentage of managers or employees who found our whistleblowing system reliable
FY2021: 46% of managers and 29% of general employees●Rate of provision of compliance training FY2021: 11%
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48

Notes on this document
1. This document is intended to provide information on future management strategies, and not to solicit the purchase or sale of the marketable securities issued by the Company.
2. The forward-looking statements, including future trends and earnings estimates, are not historical facts and involve risks and uncertainties, and therefore do not guarantee future performance. Actual
financial results may differ materially from the estimates due to various factors, including unpredictable changes in economic conditions. Significant factors that may affect actual financial results
include but are not limited to the economic climate surrounding the Group, social trends, and changes in the Group’s relative competitiveness in line with the demand trends for the products andservices provided by the Group.
3. The matters described in this document reflect the views of the Company at the time of its preparation and are subject to change without prior notice.
4. The Company shall assume no responsibility for any damage resulting from the use of this document.

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