Financial Results of FY2022 Q2
Presentation Material

November 26, 2022

This document contains forward-looking statements that reflect the Company’s judgments based on
various assumptions. The Company makes no guarantees or promises regarding the certainty,
completeness, or implementation status of such statements.
1

Introduction

Greetings fromPresident & Representative Director
Minoru Nakatogawa.

2

Contents
1. FURUKAWA Company Group’s Value Creation Process

2. Financial Results for the FY2022 Q2 & Financial Forecasts
for the FY2022 (Consolidated)
3. Main Achievements and Issues by Segments
4. Identified Materiality (Key Issues)

5. Topics
6. Reference Materials

Appendix3

1. FURUKAWA Company Group’s Value Creation Process
Based on the Group's management philosophy, we have evolved and developed our copper mine development
technology into a variety of technologies, with machinery and materials at the core of our business.
And now, through marketing management that incorporates a CSV perspective, we aim to create not only corporate
value but also social value and continue to be a company that is needed by society.

42. Financial Results for the FY2022 Q2 &Financial Forecasts for the FY2022 (Consolidated)[Financial Results]
End of Sep.
2021

End of Sep.
2022

Difference

End of Mar.
2023
(Forecast)End of Mar.
2022

VS End of Mar.
2022
Differences a l e sMillionY e n

97,804

104,576

6,771

199,097

209,500

10,402O p er at i ng pr of it

Million
Y e n

3,483

3,372

-111

7,734

7,000

-734

Operating margin

%

3.6

3.2

-0.3

3.9

3.3

-0.5

Ordinary profit

Million
Y e n

4,089

5,219

1,129

8,996

6,900

-2,096

Profit attributable toowners of parent

Million
Y e n

2,311

3,448

1,137

6,477

4,700

-1,777

N e t*The forecast for the fiscal year ending March 2023 remains unchanged from the forecast announced on August
9, 2023, with no change in the total amount of net sales and operating profit. Although foreign exchange gains
are expected, the forecast remains unchanged, due to the unpredictability of foreign exchange fluctuations.
250,000[Financial Conditions]

Net sales (Million yen)
Operating profit (Million yen)

199,097

20,000209,500

200,000

End of Mar.
2022

Total
N e t

assetsa s s e t sMilliony e nMilliony e nEquity-to-asset
R
a
t
i
o
N e t
P e r

a s s e t s
s h a r e

%
Y

e

n

End of Sep.
2022

15,000Difference
150,000

229,727
100,075

245,362102,212

15,634
2,137

42.3

40.4

-1.9

2,505.01

2,602.17

97.16

100,000

97,804

104,576

3,483

3,372

7,734

10,000

7,000
5,000

50,00000
End of Sep. End of Sep. End of Mar. End of Mar.
2021
2022
2022
2023
(Forecast)5Consolidated Income Statement(Unit: Million yen)
End of Sep.
2021
Net sales

Cost of sales(Gross profit)
Selling, general and administrative expenses
Operating profit
Non-operating income
Foreign exchange gains
Other
Non-operating expenses
Interest expenses
Administrative expenses of inactive
mountain
Other
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Other
Extraordinary losses
Loss on valuation of investment securities
Demolition expenses of a rental building
Loss on liquidation of subsidiaries
Other
Profit before income taxes
Income taxes – current
Income taxes – deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

End of Sep.
2022

Difference

97,80485,162
12,642
9,158
3,483
1,668
－
1,668
1,063
217

104,576
91,343
13,232
9,860
3,372
2,975
2,142
832
1,128
248

6,771
6,181
590
701
-111
1,307
2,142
-835
65
30

432

401

-31

412
4,089
107
45
62
725
176
466
－
82
3,470
996
35
2,439
128
2,311

479
5,219
368
362
5
1,187
－
470
348
368
4,399
1,380
-565
3,584
136
3,448

66
1,129
260
317
-57
462
-176
3
348
286
928
383
-600
1,145
7
1,137

Recording of a foreign exchange gainfrom the depreciation of the yen.

Absence of a gain on disposal of disused
articles, etc. recorded in the previous
fiscal year.

Expenses for the progress of demolitionof the FURUKAWA Osaka Building.

Expenses associated with the settlementof two overseas sales subsidiaries inPanama and China in the Rock Drillsegment.

6

Consolidated Balance Sheet & Cash Flow
(Unit: Million yen)

Consolidated Balance Sheet
End of Mar.
2022

End of Sep.
2022

Difference

Increases cash and deposits, andmerchandise and finished goods, etc.

AssetsCurrent assets

96,238113,121

16,882

Non-current assets

133,489

132,240-1,248Property, plant andequipment

90,97690,042-934

Intangible assets

376

339

-36

Investments and otherassets42,13641,859-277

Total assets

229,727

245,362

15,634

Liabilities
Current liabilities

59,85977,57917,720Non-current liabilities

69,79365,569-4,223

129,652

143,149

13,497

Shareholders’ equity

80,57081,205634

Share capital

28,20828,208－2

2

Retained earnings

54,55756,080－1,523

Treasury shares-2,197-3,085-888

Accumulated othercomprehensive income

16,683

17,9791,296

Non-controlling interests

2,821

3,027

205

Total net assets

100,075

102,2122,137

Total liabilities and net assets

229,727

245,362

15,634

Total liabilities

Decreases due to amortization ofbuildings, structures, etc.

Interest-bearing debt

(Unit: Million yen)

End of Mar.
2022

Short-termLong-term
Total

End of Sep.
2022

8,331
57,33965,671

24,34356,03480,378Difference

16,011-1,305
14,706

Expected to decrease to JPY61.5 billion
by the end of March 2023.

Net assets

Capital surplus

Consolidated Cash Flow

(Unit: Million yen)

End of Sep.
2021

End of Sep.
2022

Difference

Cash flows from fnancing activities

1,224-3,148-2,093-7,191-597
11,706-8,4152,551
13,800Cash and cash equivalents

13,973

19,181

5,207

Cash flows from operating activities
Cash flows from investing activities- Consolidated cash flow from operating activities was negative, mainly
due to an increase in inventories and a decrease in payables as a resultof the concentration of copper ore purchases in H1.
- In terms of cash flow from financial activities, we raised short-term loans
for working capital, resulting in a positive cash flow.

7

Intentionally Blank

Financial Results by Segment (Consolidated)（Unit：Million yen）
Net sales

Machinery
Industrial
Rock Drill
UNIC
Materials
MetalsElectronics
Chemicals
Real Estate
Other
Total
Operating profit
Machinery
Industrial
Rock Drill
UNIC
Materials
MetalsElectronics
Chemicals
Real Estate
Other
Adjustment
Total

End of Sep.
End of Sep.
2021
2022
38,65039,933
8,632
7,862
15,41218,003
14,606
14,06757,756
61,96450,33553,903
3,584
3,600
3,836
4,461
1,036
1,067
360
1,610
97,804
104,576
End of Sep.
End of Sep.
2021
2022
2,093
1,882
337
13
404
1,057
1,351
811
1,091
1,175
452
492
228
321
410
361
361
424
-30
-59
-32
-50
3,483
3,372

Difference

1,282
-769
2,591
-539
4,207
3,567
15
624
31
1,249
6,771
Difference
-210
-324
653
-539
84
40
92
-48
62
-29
-18
-111

End of Mar.
VS End of Mar.
2023 (Forecast) 2022 Difference

82,10018,60035,60027,900121,800
106,400
7,000
8,400
2,000
3,600
209,500

5,161
876
4,689
-405
3,636
3,404
-271
503
-115
1,720
10,402End of Mar.
VS End of Mar.
2023 (Forecast) 2022 Difference

5,200
1,500
2,500
1,200
1,300
500
300
500
700
-100
-100
7,000

520
103
1,382
-965
-1,049
-440
-366
-243
-43
-117
-45
-734

End of Sep.
2022

VS End of Sep.
2021 Difference

LME CopperPrice

8,634 $/ton-907 $/ton

JPY rate perUS$134.0 ¥/$

24.2 ¥/$FY2022(Forecast)

VS FY2021
Difference

LME CopperPrice

8,067 $/ton-1,624 $/ton

JPY rate perUS$137.0 ¥/$

24.6 ¥/$

Regard to exchange rate sensitivity.
Operating income increase annually about¥100 million due to ¥1 week to US dollar.
- Increase about ¥60 million in Machinery
business (mainly Rock Drill)- Increase about ¥40 million in Metals segment

82Change in Earnings by Segment (Consolidated)/YoY Comparison
Billion yen

Net sales

209.5 billion+1.6 billion

FY2022 Forecast

Real Estate, Other

ChemicalsElectronics

MetalsUNIC

Exchange rate (¥/$) 112.4→137.0 +24.6

Exchange rate (¥/$) 109.8→134.0 +24.2

Billion yen

Rock Drill

FY2022 Q2Results

FY2021 Q2Results+1.3 billion+0.0 billion-0.8 billion-0.5 billion+0.6 billion+2.6billion+3.6 billion

Industrial

104.6 billion-0.3 billion-0.4 billion+0.9 billion

FY2021 Results

Real Estate, Other

ChemicalsElectronics

MetalsUNIC

Rock Drill

Industrial

97.8 billion

199.1 billion+0.5 billion+3.4 billion+4.7 billion

Operating profit-0.4 billion

7.7 billion

7.0 billion-0.4 billion-0.2 billion

FY2022 Forecast

Real Estate, Other

ChemicalsElectronics

MetalsUNIC

FY2022 Q2Results

FY2021 Q2Results-0.3 billion+0.0 billion-0.5 billion+0.1 billion+0.7 billion+0.0 billion-0.0 billion

Industrial

3.4 billion-0.2 billion-1.0 billion

Rock Drill+0.1 billion

FY2021 Results

Real Estate, Other

ChemicalsElectronics

MetalsUNIC

Rock Drill

Industrial

3.5 billion+1.4 billion

9

Divisional Breakdown (Industrial Machinery Segment)- Main factor of first half results[Net sales] ¥-0.8 billion

First Half (Unit: Million yen)

- Sales of pump plants increased but those of material machinery decreased, and those of bridges
decreased due to differences in the number of construction projects, amounts, and periods ofconstruction. As for large projects, sales of enclosed hanging conveyor (SICON®), for theconstruction of the Shin-Kobotoke Tunnel on the Chuo Expressway, etc. were recorded in linewith the progress, but sales decreased with the completion of the construction of materials
handling facilities for Onahama port bulk terminal.
[Fluid equipment]

Net sales
Operating profit

519

337
8,632

7,642
FY2020 H1

FY2021 H1

7,862

13

[Operating profit] ¥-0.3 billion

FY2022 H1- Decreased due to decrease in sales[Backlog of order] ¥+3.6 billion

Full-year (Unit: Million yen)

- Main factor of full-year forecast[Net sales] ¥+0.9 billion

Net sales
Operating profit

End of Sep.
2022
Backlog oforder¥12.7 billion

vs End of Sep.
2021

¥3.6 billion

Morigasaki Water Reclamation
Center, etc.
[Material machinery]
Crusher plant for Nippon SteelSlag Products, new quarry plantfor Ryukyu Cement, etc.
[Bridges]
Construction of Shimizu IC third
viaduct, etc.

- While sales decreased in material machinery and large projects. Sales are expected to increase in
2,113

1,396

1,500

pumps, fluid equipment, bridges, and environmental products. In addition, the casting business of
this segment was spun off and transferred to a new company on October 3. We expect a decreasein sales in H2 for the casting business as it will be moved to the other segment, but we forecast an
increase in overall sales.

16,682

17,72318,600

FY2020

FY2021

FY2022 (Forecast)[Operating profit] ¥+0.1 billion- Operating profit is expected to increase, mainly due to higher sales of pumps and environmental
products.

- Ref: Features, destinations, market share, etc. of the main products
Pumps
Material machinery[Features][Destinations]

Pumps products superior in the durability
and abrasion resistance which was
amassed through mine development.
Shield tunnel construction sites,
sewage treatment plants, etc.

[Features]Supports section plants including
machine manufacturing and sales.

[Features]

Comprehensive capability to undertake all
the processes from the design ofconstruction work to its execution.

[Destinations]

Quarries, limestone mines, steel
works, etc.

[Destinations]

New construction of steel bridges,
construction of conveying earth andsand, etc.

[Attention][Market share][Market share]
Sewage Pumps

Slurry Pumps

Infrastructure division

Crushers

Belt conveyors attract attention which instead ofdump trucks to transport earth and sand.
Inquiries of Sicon®, an environmentally friendly
enclosed hanging conveyor, are increasing.

10

2

Divisional Breakdown (Rock Drill Segment)
First Half (Unit: Million yen)

- Main factor of first half results

1,057[Net sales] Japan ¥6 billion ¥-0.1 billion, Overseas ¥12 billion ¥+2.7 billion- Domestic sales decreased due to lower shipments of tunnel drill jumbos.
Overseas sales increased due to higher shipments, mainly to North America, and theweaker yen also had the effect of increasing sales.
In addition, shipments of spare parts increased in Japan and North America.

Net sales
Operating profit

404
11,65915,41218,003

FY2020 H1

FY2021 H1

FY2022 H1[Operating profit] ¥+0.7 billion- Operating profit increased, mainly due to an increase in shipments overseas, as well as
an increase in sales due to the yen's depreciation.

-512

Full-year (Unit: Million yen)

- Main factor of full-year forecast

Net sales
Operating profit[Net sales] Japan ¥13 billion ¥-0.2 billion, Overseas ¥22.6 billion ¥+4.9 billion- Sales are expected to decrease slightly in Japan but an increase in overseas sales
mainly due to increased shipments in North America and the weaker yen.

35,60024,14930,9102,500

1,117
FY2020

FY2021

FY2022 (Forecast)[Operating profit] ¥+1.4 billion- Operating profit is expected to increase, mainly due to increased shipments overseas
and the positive effect of the weaker yen.

-1,324- Ref: Features, destinations, market share, etc. of the main products
Hydraulic breakers
Hydraulic crawler drills[Features][Destinations]

Wide range of models from small tosuper large size.
High-quality and high-striking power.
Strip mine such as quarries, etc.
Civil engineering work and atconstruction sites, etc.

[Features]

Accurate and speedy drilling technology
suitable for the rock conditions.

[Features]

Many proven results in mountaintunnel and large tunnel constructions.

[Destinations]

Strip mine such as limestone mines, etc.
Infrastructure work in overseas, etc.

[Destinations]

Mountain tunnel construction sites,
dam headrace construction sites, etc.

[Attention][Market share][Market share]
Hydraulic breakers

Tunnel drill jumbos

Hydraulic crawler drills

Tunnel drill jumbos

112Divisional Breakdown (UNIC Segment)- Main factor of first half results

First Half (Unit: Million yen)

[Net sales] Japan ¥9.5 billion ¥-2.0 billion, Overseas ¥4.6 billion ¥+1.4 billion

Net sales
Operating profit- In Japan, sales declined due to delays in crane mounting caused by truck production delays
and production cutbacks. Overseas, overall sales increased due to increased shipments ofmini-crawler cranes in Europe and the US, and UNIC cranes in Southeast Asia, Oceania
and the Middle East, as well as the positive effect of the weaker yen on sales.

1,351

1,629

811

[Operating profit] ¥-0.5 billion

14,606

13,681

14,067

FY2020 H1

FY2021 H1

FY2022 H1Full-year (Unit: Million yen)

- Operating profit was decreased by ¥0.5 billion, and while overseas profit increased due toincreased shipments and the weaker yen, domestic profit decreased overall due to lower
sales and a worsening cost ratio caused by price hikes of raw materials such as steel products.

- Main factor of full-year forecast

Net sales
Operating profit[Net sales] Japan ¥20.2 billion ¥-1.9 billion, Overseas ¥7.7 billion ¥+1.5 billion

3,180- Sales are expected to recover gradually in Japan in H2 from the impact of reduced truck
production and other factors, but a decrease in sales in H1 will remain.
Overseas sales are expected to increase due to the remaining increase in H1, but overallsales are expected to decrease.

2,165
1,200

27,80428,30527,900

FY2020

FY2021

FY2022 (Forecast)[Operating profit] ¥-1.0 billion- Operating profit is expected to decrease, due to decrease in profit from lower domestic sales
and the impact of raw material price hikes.

- Ref: Features, destinations, market share, etc. of the main products
UNIC cranes
Mini-crawler cranes[Features][Destinations]

Wide range of models such as various
boom lengths etc. which correspond to
customer needs.
Construction and civil engineeringsites, material handling, rental
companies, etc.

[Features]Show the power in narrow ground,rough ground and indoor worksites.

[Features][Destinations]

Narrow or rough ground such as agraveyards, etc.
Indoor worksites, etc.

[Destinations]

Car dealer, transportation company,
road construction company, etc.

[Market share][Market share]
UNIC cranes

UNIC carriers
Wide range of models such as cartransporter type, heavy machinetransporter type, etc.

[Market share]
Mini-crawler cranes

UNIC carriers

122Divisional Breakdown (Metals Segment)- Main factor of first half results[Net sales] ¥+3.6 billion

First Half (Unit: Million yen)
Net sales
Operating profit

492
452

50,33553,90335,249FY2020 H1

FY2021 H1

FY2022 H1Full-year (Unit: Million yen)500

FY2020102,995
FY2021- Net gain/loss from metal price fluctuations – the tableon the right – was positive, with a decrease in profit
for copper and an increase in profit for gold.

- Main factor of full-year forecast[Net sales] ¥+3.4 billion

940

499

76,094

Copper ¥+0.4 billion (Volume ¥-3.4 billion, Unit price ¥+3.8 billion)
Gold ¥+3.1 billion (Volume ¥+1.4 billion, Unit price ¥+1.7 billion)[Operating profit] ¥+0.0 billion-458

Net sales
Operating profit- Net sales increased by ¥3.6 billion, with higher unit prices
offsetting a decrease in the sales volume of copper.
Gold sales increased due to higher volumes and unit prices.

106,400
FY2022 (Forecast)- Ref: Features, destinations, market share, etc.
of the main productsElectrolytic copper
It has been responsible for supplying electriccopper since founding, and produce 70,000 tons
[Features]a year.
Electric wires, copper elongation products, home
[Destinations] appliances, communication equipment,
automobiles, etc.
we have terminated the consignment contract
with Onahama and have reached a point of[FY2023]
drastic review of the consignment smelting
business. Reduce exports which are unprofitable.

FY2022 Q2LME Copper
Price
JPY rate per
US$vs FY2021 Q2

8,634 $/ton-907 $/ton

134.0 ¥/$

24.2 ¥/$Net gain/loss from metal price fluctuations
End of Sep. 2022

vs End of Sep. 2021

Operating profit¥490 million¥40 million

Include price effects¥520 million¥-210 million

Copper(¥-120 million)(¥-740 million)Gold(¥620 million)(¥540 million)- Copper sales are expected to decrease due to lower
volume despite higher unit prices. Gold sales are expected to increase due to higher volume
and unit prices. However, future fluctuations in metal prices cannot be foreseen, so the H2
forecast does not reflect these factors.

[Operating profit] ¥-0.4 billion- Although the weaker yen is expected to improve the balance ofconsignment smelting, price gains from future exchange rate andeven metal price fluctuations are not expected, so the H2 forecast
does not reflect this factor and is set at almost zero.

LME Copper
Price
JPY rate perUS$

FY2022(Forecast)vs FY2021

8,067 $/ton-1,624 $/ton

137.0 ¥/$

24.6 ¥/$- We have reached a point in time for a drastic review of the consignment smelting
business with the termination of the consignment contract with Onahama
Smelting and Refining Co., Ltd. (At the end of March 2023)- From FY2023 onward, operating profit will be secured by reducing unprofitable exports andfocusing on domestic sales. Due to the decrease in production volume, we expect a reductionin the volatility of earnings due to metal price fluctuations.
(*For details, please refer to page 18 of the presentation material for the financial results for the fiscal
year ended March 2022.)

13

2

Divisional Breakdown (Electronics Segment)
321

First Half (Unit: Million yen)
Net sales
Operating profit

228

2,476

3,584

3,600

FY2020 H1

FY2021 H1

FY2022 H1-105- Demand for high-purity metallic arsenic was stable for use in compound semiconductors.
Sales of aluminum nitride increased due to higher demand for thermal management
components and semiconductor manufacturing equipment components.
Sales of coils decreased due to the impact of automobile production cutbacks.

[Operating profit] ¥+0.1 billion- Operating profit increased, with the increase due to higher sales of high-purity metallic
arsenic and aluminum nitride.

- Main factor of full-year forecast[Net sales] ¥-0.3 billion

Full-year (Unit: Million yen)
Net sales
Operating profit- Main factor of first half results[Net sales] ¥+0.0 billion- Net sales are expected to decrease by ¥300 million, with volume declines in high-

666

161

300

5,741

7,271

7,000

FY2020

FY2021

FY2022 (Forecast)purity metallic arsenic and crystal products due to lower demand for semiconductorsin H2. Sales of coils are expected to decrease due to lower volume and other factors,
reflecting lower automobile production.

[Operating profit] ¥-0.4 billion- Operating profit is expected to decrease by ¥0.4 billion, resulting in an operating loss for thefull year due to the impact of higher electricity and raw material prices, in addition to lower
profit due to lower sales in H2.

- Ref: Features, destinations, market share, etc. of the main products
High-purity metallic arsenic

Aluminum nitride[Features]

We have been mass-producing the world's purest high-purity metalarsenide at 99.999995% (7N5). We also boast the global top share.

[Features]

The heat-dissipating materials, high thermal conductivity, insulation, heat
uniformity, corrosion resistance, was made by our proprietary technologies
such as molding, sintering and processing.

[Destinations]PC, smartphones, infrared luminous parts, red LD and LEDs, etc.

[Destinations]

Semiconductor manufacturing equipment components, high-power LEDs,
resin-based heat-dissipation sheets, etc.
Awareness as an excellent heat-dissipating materials is spreading, and[Market share][Full production] full production continues due to growing demand. We are investing inincreased production.
High-purity metallic arsenic

142

Divisional Breakdown (Chemicals Segment)
First Half (Unit: Million yen)
Net sales
Operating profit- Main factor of first half results[Net sales] ¥+0.6 billion

361

410

- The sales of cupric oxide increased due to higher unit prices from higher copper prices andstrong demand for use in substrates. Sales of cuprous oxide increased due to higher unit
prices from higher copper prices and a recovery in demand for ship-bottom paints.

120
4,461

[Operating profit] ¥-0.0 billion

3,836

3,030
FY2020 H1

FY2021 H1- Operating profit declined slightly, with the increase due to higher sales, but also due to higher
raw material prices and other factors.

FY2022 H1- Main factor of full-year forecast[Net sales] ¥+0.5 billion

Full-year (Unit: Million yen)
Net sales
Operating profit

743

380

- Overall net sales expected to increase, with cupric oxide continuing to experience strong
demand for use in substrates and cuprous oxide expected to see a recovery in demand for use
in ship-bottom paints, while higher copper prices will also have the effect of increasing sales.

500[Operating profit] ¥-0.2 billion
6,367

7,896

8,400

FY2020

FY2021

FY2022 (Forecast)- Although an increase in profit is expected due to higher sales, we expect a decrease in profit
due to the impact of a worsening cost ratio caused by higher raw material prices for cupricoxide, cuprous oxide and sulfuric acid.

- Ref: Features, destinations, market share, etc. of the main products
Cuprous oxide
Cupric oxide[Features]

Antifoulant for ship-bottom paints toprevent barnacle build-up.

[Features]High precision plating raw materials
used for oxidation catalysts or printed
circuit boards such as PC, etc.

[Destinations]Ship-bottom paints manufacturer.

[Destinations]

Packaged boards (for PC and server
processors), etc.

Sulfuric acid[Features][Destinations]

Each industry such as chemicals,
electronic devices, steel, foodprocessing, etc.

[Basic material]

Demand is always stable as an
indispensable basic material for eachindustry.

Increased demand for package boards due[Full production] to the miniaturization and high performance[Market share]
Cuprous oxideof electronic devices.
Full production with existing equipment.
Considering increasing production
investment.

uses the sulfur roasting method to produce
sulfuric acid with very little impurity, andcan be used as a food additive.

15

2

Change in Earnings by Segment (Consolidated)/Compared to Previous Forecast (Net Sales)

Net sales

Billion yen+1.2 billion-0.5 billion+0.4 billion-0.3 billion

209.5 billion+0.7 billion

Exchange rate (¥/$) H2 130.0→140.0 +10.0

FY2022 Forecast

Real Estate, Other

ChemicalsElectronics

MetalsUNIC

Rock Drill

Exchange rate (¥/$) 130.0→134.0 +4.0

+0.1 billion

Industrial-0.2 billion

104.6 billion

FY2022Previous Forecast-0.1 billion+0.1 billion-1.6 billion

FY2022 Q2Results

FY2022 Q2Forecast-0.3 billion

Real Estate, Other+1.1 billion

ChemicalsElectronics

Metals-0.2 billion+0.1 billion

Segment

UNIC

Rock Drill

Industrial
104.2 billion

209.5 billion

Main factors of change in sales forecast for the full year.
(Compared to previous forecast announced on August 9, 2022.)

Industrial

Sales are expected to increase in pump plants, but decrease in material machinery due to lower purchasing power in the quarrying industry.
We expect some delays due to large projects. In addition, the casting business was spun off and transferred to a new company on October 3, andsales in H2 from the casting business will be transferred to the other segment, resulting in lower sales in this segment.

Rock Drill

Japan ¥+0.5 billion Sales will increase in tunnel drill jumbos and hydraulic crawler drills.
Overseas ¥-0.4 billion Sales expected to increase in North America but decrease in Europe.

UNIC

Japan ¥-0.2 billion, Overseas ¥-0.3 Sales will decrease slightly both in Japan and overseas due to a decline in shipments of UNIC cranes.

MetalsAlthough higher copper and gold prices are expected to increase revenues, future fluctuations in metal prices cannot be foreseen, so price increases
are not reflected in the H2 forecast.

Electronics

In H2, we expect sales of high-purity metallic arsenic and crystal products to decline due to lower demand for semiconductors.

Chemicals

In H2, we expect a slight increase in sales for each product.

16

Change in Earnings by Segment (Consolidated)/Compared to Previous Forecast (Operating Profit)

Operating profit

Billion yen-0.1 billion

7.0 billion

Exchange rate (¥/$) H2 130.0→140.0 +10.0

FY2022 Forecast

ChemicalsElectronics

MetalsUNIC

Real Estate, Other-0.3 billion-0.3 billion

Rock Drill

Exchange rate (¥/$) 130.0→134.0 +4.0

-0.3 billion

Industrial+0.0 billion

FY2022Previous Forecast+0.0 billion

3.4 billion

FY2022 Q2Results-0.2 billion+0.1 billion

Real Estate, Other+0.5 billion

Chemicals

FY2022 Q2Forecast

Segment

Electronics-0.0 billion-0.3 billion

MetalsUNIC

Rock Drill

Industrial

3.3 billion+0.5 billion+0.5 billion

7.0 billion

Main factors of change in operating profit forecast for the full year.
(Compared to previous forecast announced on August 9, 2022.)

Industrial

Sales and profits will increase at pump plants. In material machinery, lower sales and profits are expected due to large projects.

Rock Drill

The increase in product prices is expected to compensate for the increase in raw material prices, and the change in the exchange rate
to a weaker yen in H2 will also contribute to the increase in earnings.

UNIC

The decrease in profit was due to lower sales, the expected impact of raw material price hikes and other factors.

MetalsProfit increased by ¥0.5 billion in H1 mainly due to higher gold prices. Although the weaker yen is expected to improve theconsignment smelting balance in H2, since price gains from exchange rates and metal price fluctuations are not expected in the future,
the forecast for H2 does not reflect these factors and is set at almost zero.

Electronics

We expect an operating loss in H2 due to lower profit from lower sales and the impact of higher electricity and raw material prices.

Chemicals

The forecasted decrease in profit is due to the impact of a deterioration in the cost of sales ratio resulting from higher raw material
prices for cupric oxide, cuprous oxide, and sulfuric acid.

17

3. Main Achievements and Issues by Segments
Segment

Main achievements

Main issues

Industrial- The orders received for the crusher plant for Nippon SteelSlag Products and the new quarry plant for Ryukyu Cement
as large-scale section plant construction projects.
- In bridge construction, we received a Safety Management
Order Winner Award and a Certification as a Company with
Excellent Construction Performance by Kanto Regional
Development Bureau, Ministry of Land, Infrastructure andTransport for two consecutive years.

- To expand sales of new generation machines of rubber
liner slurry pumps.
- To strengthen sales of steel structure products other thansteel bridges in steel segments.
- To promote sales of SICON®, an environmentally friendly
enclosed hanging conveyor.
- To promote sales for new high-efficiency screens.

Rock Drill- The development of an attachment drill for the quarrying
market in Southeast Asia and its market launch in Indonesia.
- The product lineup of hydraulic crawler drills has been
restructured, and the concentrated production of mainstay
models and the development for commonality of machines
has been initiated.
- We have strengthened development of high value-added
products for tunneling sites, such as fully automatic drill
jumbos and automatic rock bolters.
- The domestic organization has been reorganized for the
purpose of concentrating sales of hydraulic crushers for the
demolition market in the Tokyo metropolitan area.

- Strengthening overseas service systems of LCS, lifecycle
support, such as training drill technicians and dealer supports.
- Formulation of commercialization of customer support
services, such as promoting DX to shift from product sales
to service sales.
- The consolidation of overseas sales subsidiaries.
The dissolution of the sales subsidiaries in Panama andChina was resolved in H1 of FY2022, and efforts areunderway to complete the liquidation.

UNIC- The development of a minor-changed machine, large size,with improved lifting performance for the UNIC crane
G-FORCE series.
- The development of a new disassembly specification formini-crawler cranes.
- The market launch of super-large-sized UNIC crane,
which is in high demand in the Chinese market.

- To reduce production costs and optimize parts procurement
under soaring raw material prices.
- To consider truck electrification.
- To review overseas dealers in regions with weak sales
capabilities and to establish sales routes in untapped areas.
- To support technical training, sales training, etc. for overseas
dealers.
- To review our overseas strategy, including the Russian
market where we have suspended sales.

18

Main Achievements and Issues by Segments

Segment

Main achievements

Main issues

Metals- The decision to terminate the consignment smelting
contract with Onahama Smelting and Refining Co., Ltd.
at the end of March 2023. From FY2023, unprofitable
exports are expected to be significantly reduced.

- Respond to customers who wish to be supplied even after
the termination of the consignment smelting contract with
Onahama Smelting and Refining Co., Ltd.
- Fluctuations in earnings due to international market trends
and ore purchase terms, although the range of fluctuation
will decrease from FY2023 onward compared to FY2022
due to lower production.

Electronics- For aluminum nitride, for which demand is strong, aninvestment of approximately ¥1 billion is being made toincrease production.
- A high-performance aluminum nitride with higher thermal
conductivity than current products is being introduced to themarket.
- Sales of diffractive optical elements, DOE, increased forlaser processing applications.

- To consider further investment to increase production in
anticipation of increased demand for aluminum nitride.
- To study production increase of high-purity metallic arsenic.

Chemicals- Higher sales of sulfuric acid, mainly for use in the
manufacture of chemicals.
- Higher sales of cupric oxide for plating for high-end PCs
and servers.

- Delay in passing on higher raw material prices to products.

19

Rock Drill Segment Strengthening and rebuilding of the overseas marketing capabilities- Market-specific strategy From an emphasis on volume to an emphasis on profit
MarketRegionStrategies / Measures

North America- Expand sales of large machines for both hydraulic crawler drills and hydraulic breakers.
Approximately 80% of the hydraulic crawler drill market and 90% of themarket in the western region of North America is for large machines.
Large hydraulic crawler drills will shift to North American specifications.
- Strengthen our rebuilt hydraulic breaker business and expand salesof parts.
- Decided to establish a logistics and after-sales service base in thewestern region of our sales subsidiary in North America.
Reduce transportation costs and delivery lead time.

Europe- Expanding sales of medium and large-sized hydraulic breakers.
- Expanding the number of dealers from two to four to expand salesof hydraulic breakers in the UK.
The UK is still developing among the four major European markets ofFrance, Italy, Germany, and the UK.
- Hydraulic crawler drills will be focused on the German market.

The market
to be created

Southeast Asia

- As a measure to induce customers from pneumatic drills to hydrauliccrawler drills, the attachment drill, AHD709, was introduced to the market.
- Reorganize and newly establish dealers by the customer segments ofquarry and mining in each country market.

The markets
to consolidate
and eliminate

South America,
China,
India,(Korea)- Decided to dissolve its sales subsidiaries in Panama. (The liquidation is scheduled to becompleted around December 2022.)- Decided to dissolve its sales subsidiaries in Shanghai, China. (The liquidation is scheduled to becompleted around August 2023.)- Considering dissolving the sales subsidiary in India.
- Still assessing the business role of the sales subsidiary in Korea.

The markets
to target20

4. Identified Materiality (Key Issues)- Identified the materiality (key issues) related to sustainability initiatives.
We reviewed the CSR priority issues identified in 2013, and identified 10 materiality key issues based on the Basic
Policy on Sustainability Initiatives established in December 2021, dividing them into proactive CSV issues (3 items)
and defensive CSR/ESG issues (7 items), as described here.
Basic Policy on Sustainability Initiatives
The Furukawa Company Group has positioned efforts toward sustainability as one of its most important management
issues. In addition to contributing to help realize a sustainable society, the Group is committed to achieving sustainablegrowth and increasing mid-to long term corporate value by resolving social issues through its business.
Materiality (key issues) related to sustainability initiatives
Proactive: CSV issues
Resolving social issues through business related to materiality (key issues)- Providing environmentally friendly products, technologies and services.
- Contributing to the resolution of customer issues.
- contributing to the creation of a safe and comfortable society, including infrastructuredevelopment.

Defensive: CSR/ESG issues
Establishing a robust corporate foundation for growth related to materiality’s (key issues)
E(Environment)- Promotion of climate change countermeasures in business activities.
- Promotion of biodiversity preservation activities.

S(Society)- Development of a safe and rewarding work environment that takes health into consideration.
- Recruitment and development of diverse human resources.
- Promotion of management that respects human rights.

G(Governance)- Development of a enterprise risk management system.
- Thorough compliance.

*More information on the materiality identification can be found in the news release on our website.

https://www.furukawakk.co.jp/info/2022/

21

5. Topics- The credit rating obtained from Japan Credit Rating Agency, Ltd. was raised to BBB+
The credit rating obtained from Japan Credit Rating Agency, Ltd. was raised to
BBB+ from BBB on October 7, 2022.
As a result, we have achieved our rating target in FY2025, the last year of our2025 Vision “FURUKAWA Power & Passion 150” of BBB+ or higher.
We will continue to seek to establish a strong financial base to enable us to raise
the necessary funds regardless of financial conditions.

Before thechangeAfter thechangeLong-term issuer
ratingBBB

BBB+

OutlookPositive

StableCP

J-2

J-2 (Deferred)

The reasons for the rating (Summarized from the news release by Japan Credit Rating Agency)
1. In the past, the Metals segment accounted for a large share of profits, but now the machinery business has become the mainstay of theCompany's operations, with many products holding a high market share.
2. Profitability of the Rock Drill segment improved due to a shift in sales strategy from a focus on volume to a focus on profit. The Metals segment is
expected to see a decrease in unprofitable exports due to the end of consignment smelting to Onahama Smelting and Refining Co., Ltd., anda more stable performance due to a reduction in the scale of operations.
In the Industrial Machinery segment, profitability is improving by undertaking all processes from design to construction, and the UNIC segment is
expected to secure a certain level of profit in the future due to its high market share. Thus, the Company is making steady progress instrengthening its earning power, and its financial position is improving compared to previous years, backed by solid profits.
3. Although profits are expected to decline in the fiscal year ending March 2023, performance is expected to improve from the fiscal year ending
March 2024 onward. Profitability in the Metals segment is expected to improve, demand in the UNIC segment is expected to recover over the
medium term, and demand in other segments is generally strong, which will continue to contribute to profits.
4. The Company's financial position has been improving, with the capital adequacy ratio hovering in the 30% range from the fiscal year ended
March 2015 to the fiscal year ended March 2020, but rose to the 40% range in the fiscal years ended in March 2021 and March 2022.
The Company is expected to maintain its ability to generate solid cash flow, and there is little concern that its financial position will deterioratesignificantly.

22

Topics- The third-party evaluations of the Group's products and technologies that help to solve customer needs andsocial issues.
Beginning with the development of copper mines, our group has practiced marketing management to provide products, technologies and services
that help to solve customer needs and social issues based on the technologies that have supported the social infrastructure.
In our continuous efforts, the products and technologies of our machinery business received high evaluations and awards by the third-party.
- The BOLTINGER, a rock bolting machine won the
Infrastructure Technology Development Award andEngineering and the Japan Construction Machinery andConstruction Award (Rock Drill segment)

The BOLTINGER, a rock bolting machine equippedwith a six-meter joint bolt placing device.
(Jointly developed with Taisei Corporation.)- Japan‘s first tunnel drill jumbo using remote technology
won the Japan Construction Machinery andConstruction Award. (Rock Drill segment)

Tunnel drill jumbo using remote technology.
(Jointly developed with HAZAMA ANDOCORPORATION and MAC.)- We have received a Safety Management Order WinnerAward and Certification as a Company with Excellent
Construction Performance for two consecutive years inbridge construction. (Industrial Machinery segment)

Route 17 Shin-omiya Bypass pedestrian bridge.
One of the bridge constructions that were awarded for
Excellent Safety Management Order Winner Award.

- The BOLTINGER, a rock bolting machine, and the robot for installing steel arch supports, both received the Minister of Land, Infrastructure, Transport and Tourism Award at the10th Robot Award. (Rock Drill segment)

The BOLTINGER, a rock bolting machine
equipped with a six-meter joint bolt placing
device.
(Jointly developed with Taisei Corporation.)*For detailed information on each award, please refer to the news releases posted on our website.

The robot for installing steel arch supports.
(Jointly developed with Maeda Corporationand MAC.)https://www.furukawakk.co.jp/info/2022/

23

6. Reference Materials- Approach to climate change and decarbonization and our efforts.
Our response to disclosures based on the TCFD and equivalent frameworks.
- With a phased approach we will move forward with disclosures in line with the TCFD framework by using our responses to the CDP
regarding risks and revenue opportunities related to climate change. We have responded to CDPs from this fiscal year, which had notbeen previously responded to.

Efforts toward decarbonization (carbon neutrality, and net zero)- We are currently developing a plan to implement CO2 reductions in line with the government's announced CO2 reduction targets of a
46% reduction in CO2 emissions by FY2030 compared to FY2013 and achieving carbon neutrality by FY2050.
- Regarding carbon neutrality, we are considering converting electricity, which accounts for about 80% of our CO2 emissions (FY2020
CO2 emissions 20,903t | Scope 1&2), to electricity derived from renewable energy sources. We will aim for early disclosure, including
plans to reduce CO2 emissions from non-electricity sources, which account for about 20% of our CO2 emissions.
- As for net-zero emissions, we are proceeding with Scope 3 calculations and considering measures to absorb CO2 through the use ofCompany-owned forests, etc., with the aim of achieving net-zero emissions in the future.

- Continue to intend to enhance the disclosures required for ESG ratings,
and to strive for inclusion in the FTSE index issues.
We will continue to strengthen our ESG initiatives and disclosures required by the FTSE Blossom Japan Index and FTSE 4Good Index,
which is used by the GPIF as an index.
The FTSE ESG rating score for 2021 was 2.5 overall, but by 2025, the 150th anniversary of the Company's founding, we aim toachieve an overall score of 3.3 or higher and become an index stock.

ESG score

Current(at of March 2021)

2023 rating

2025 rating

2.5

3.0 or higher

3.3 or higher

Aim to be included in the
FTSE Blossom Japan Index
24

Reference Materials[Capital Investment (Consolidated)]
Capital investment
Machinery

FY2020(Unit: Million yen)

FY2021(Q2)(Full-year)

2,637

FY2022(Q2)(Annual forecast)

2,669

3,000

Industrial

1,253

1,703

1,300

Rock Drill

437

247

900

UNIC

946

718

800

Material

827

696

1,700

Other

679

1,413

400

Total

4,144

3,072

4,778

918

3,879

1,931

4,003

2,047

Increased due to the establishment of
new medical waste disposal facilities(Expansion of incinerator, total
approx. ¥2.6 billion from FY2022 to
FY2024) at Gunma Kankyo Recycle
Center Co., Ltd., etc.

Increased due to the establishment ofaluminum nitride production
equipment (Total approx. ¥1.0 billion)in the Electronics Segment, etc.

5,100

[Depreciation and Amortization (Consolidated)]
Depreciation andamortization

Increased due to construction of anew office building at Oyama Works,
etc.

4,100

Acquisition of buildings in the Real
Estate Business, etc.
Head Office relocation work costs in
the Other, etc.

[Research and Development Expenses (Consolidated)]
Research anddevelopment expenses

1,164

738

1,336

712

1,400
25

Reference Materials【Metal Products, Foreign Exchange Rate (Consolidated)】
FY2021

FY2020(Q2)

Overseas market
price of copper(Average)

FY2022(Full-year)(Q2)(Q3,Q4 Forecasts)¢/pound

312.0

432.8

439.6

391.6

340.2

$/ton

6,879

9,541

9,691

8,634

7,500

JPY rate per US$ (Average)

106.06109.80112.38133.97140.00

Production ad marketing of
Furukawa Metals & Resources Co.,

FY2021

FY2020(Q2)(Full-year)

FY2022(Q3,Q4 Forecasts)(Q2)

Copper production (t)74,38635,942

71,14934,78570,146

Copper sale volume (t)81,99838,712

77,40235,51775,866<About copper production>
We have been reviewing our consignment ratio at the joint smelter and have been gradually
reducing our copper production from 88,004 tons per year in FY2017.
Copper production after FY2023 is expected to be about 46,600 tons per year, due to terminate
the consignment contract with Onahama Smelting and Refining Co., Ltd. (At the end of Mar. 2023)【Employee (Consolidated)】
End of Mar. 2021
Number of consolidated employee (Persons)

2,752

End of Mar. 2022
2,804

End of Sep. 2022
2,851

vs End of Mar. 2022
47

26

Reference Materials[Consolidated Financial R esults]
Net sales(Unit: Million yen)

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022(Forecast)

161,857

142,925

165,638

157,566

165,539

163,026

172,544

161,799

149,829

167,695

174,116

165,215

159,702

199,097

209,500

Operating profit

2,303

1,597

2,821

2,154

3,363

6,886

8,925

7,988

6,545

7,820

8,915

8,693

5,592

7,734

7,000

Ordinary profit

993

111

1,231

1,268

2,763

6,150

6,603

6,227

7,202

8,105

8,235

8,135

6,773

8,996

6,900

-5,917585

563-1,659

2,976

3,976

9,793

5,056

4,254

4,774

4,654

4,431

7,468

6,477

4,700

Profit attributable to owners of parent

Segment Performance[Net sales](Unit: Million yen)

FY2008

Machinery

FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022(Forecast)

62,63944,31347,02553,19856,852

71,11175,99072,232

66,80373,45377,58082,691

68,63576,938

82,100Industrial

15,836

12,783

10,655

12,94912,894

18,527

16,712

14,926

14,041

15,871

17,971

23,237

16,682

17,72318,600Rock Drill

29,427

20,38623,88024,14323,305

26,84230,91030,076

26,97930,19930,372

27,66324,14930,91035,600UNIC

17,375

11,142

12,490

16,10520,651

25,741

28,36727,22925,782

27,381

29,23731,79127,80428,30527,90080,17582,12892,203

77,91788,026

90,162

93,27085,64478,96889,98792,722

79,366

88,203

118,163

121,800

Materials
Metals

68,786

71,132

79,97968,114

77,94478,68481,51374,192

67,853

77,33480,067

67,14976,094

102,995

106,400

Electronics

5,568

5,969

7,147

4,615

4,987

5,381

5,743

5,477

5,816

6,307

6,527

5,506

5,741

7,271

7,000

Chemicals

5,820

5,025

5,076

5,187

5,093

6,096

6,013

5,973

5,298

6,344

6,127

6,710

6,367

7,896

8,400

Real Estate

2,386

2,043

1,577

1,233

1,058

1,013

2,535

3,045

3,074

3,338

2,999

2,386

2,107

2,115

2,000

Other

1,204

854

785

766

753

739

747

876

983

916

814

771

755

1,879

3,600

Paints (*1)

―

3,692

15,04014,874

15,078

―

―

―

―

―

―

―

―

―

―

Fuels (*2)

15,452

9,893

9,004

9,576

3,770

―

―

―

―

―

―

―

―

―

―

161,857

142,925

165,638

157,566

165,539

163,026

172,544

161,799

149,829

167,695

174,116

165,215

159,702

199,097

209,500

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Total[Operating profit]
Machinery(Unit: Million yen)

FY2022(Forecast)

1,733-3,022

-566

1,970

2,923

5,333

6,551

5,882

3,580

5,083

6,567

7,343

3,968

4,679

5,200

Industrial

767

433

-29

708

778

1,851

1,711

1,037

104

1,005

2,088

3,208

2,113

1,396

1,500

Rock Drill

255-2,584

-350

333

-67

341

1,225

2,217

897

1,782

1,689

142

-1,324

1,117

2,500

UNIC

710

-870

-186

928

2,212

3,141

3,614

2,627

2,578

2,295

2,789

3,992

3,180

2,165

1,200

229

3,985

3,044

325

324

1,695

1,770

983

1,870

1,648

1,396

776

1,040

2,349

1,300

Metals

23

3,224

1,494

308

282

1,503

1,449

1,154

1,738

867

581

301

499

940

500

Electronics

4

657

1,279

-234

-262

-123

52

-368

17

330

407

-35

161

666

300

Chemicals

201

104

269

251

304

315

267

197

114

451

406

510

380

743

500

Real Estate

706

1,128

635

356

219

-43

776

1,276

1,265

1,339

1,163

735

736

743

700

Other

-304

-376

-92

-93

-63

-60

-130

-72

-126

-196

-147

-94

-82

17

-100

Paints (*1)

―

-19

-93

-329

65

―

―

―

―

―

―

―

―

―

―

Fuels (*2)

202

-29

-56

-13

-28

―

―

―

―

―

―

―

―

―

―

Adjustment

-264

-69

-49

-60

-78

-39

-42

-80

-44

-55

-64

-68

-71

-54

-100

Total

2,303

1,597

2,821

2,154

3,363

6,886

8,925

7,988

6,545

7,820

8,915

8,693

5,592

7,734

7,000

Materials*1 Withdrew from the Paints business by transferring shares of Tohpe Corporation in March 2013.
*2 Withdrew from the Fiels business by transferring shares of Furukawa Commerce Co., Ltd. in October 2012.
Notice: By applying "Accounting standards for disclosure of segment information, etc." (FY2012), we replace and display the figure for FY2011.

LME copper price (US$/ton)

JPY rat per US$

5,864

6,101

8,139

8,485

7,855

7,104

6,554

5,215

5,154

6,444

6,341

5,860

6,879

9,691

8,067

100.54

92.85

85.71

79.07

83.10

100.24109.93120.13108.42110.85110.91108.74106.06112.38137.0027

Thank you for your understanding and continued support.

28

Cautionary Notes Regarding Forward-Looking Statements
Statements about future predictions contained in this document are based on various factors—including forecasts,
expectations, assumptions, plans, acknowledgments, and evaluations—that derive from information currently athand. Actual business conditions and activities involve various known and unknown risks and uncertainties and canbe affected by them. Accordingly, forward-looking statements and suggestions based thereon may differ
significantly from actual outcomes.
Known and unknown risks and uncertainties than can potentially affect future forecasts are described in the
Company’s Annual Report, Financial Statements and in the Business Risks section of the Company’s corporatewebsite. However, such risks and uncertainties are not limited to those described therein.
Consequently, the Company cannot promise or guarantee the achievement of key performance indicators[ (KPIs)]
or forecasts, nor of future results, as described in this document.
Irrespective of actual results, moreover, the Company is not obligated to update the content of this document after
its release date, and does not have a policy to do so.
The purpose of preparing this document is to help shareholders, other investors, and the like obtain a better
understanding of the Company’s management policies and information, not to solicit any equity investments,
including the purchase or sale of the Company’s shares.
Investors are asked to take responsibility for final investment decisions in light of the aforementioned points.
Please take responsibility when using this document. The Company bears no responsibility for erroneous ordefective information contained in this document, nor of changes in [key performance indicators/KPIs] or forecasts,
nor of any other losses caused as a result of using this document.
29

6. Appendix

Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)“Medium-Term Business Policy 2022”- Expedite growth and further improve profitability. -Disclosed May 25, 2020
*May 25, 2021
corrections Page 4
Addition Page 7-8This document contains forward-looking statements that reflect the Company’s judgments based on various assumptions. The Company
makes no guarantees or promises regarding the certainty, completeness, or implementation status of such statements.

1

Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)“Medium-Term Business Policy 2022” Contents
1. Vision for 2025 ”FURUKAWA Power & Passion 150”
2. Positioning of “Medium-Term Business Policy”
3. Management Policy(1) Company wide strategy(2) Increase the value of the Furukawa brand through “marketing-based
management” that incorporates CSV perspectives(3) Contribution to the SDGs through “marketing-based management”
that incorporates CSV perspectives(4) Increase corporate value by emphasizing business practices that reflect
CSR/ESG issues recognized and to be solved by the Group(5) Basic strategies and priority issues by segment(6) Product development system(7) Strengthen and expand our human resource base(8) Actively promote investments to increase corporate value(9) Establish a robust corporate foundation2

Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)

1. Vision for 2025 ”FURUKAWA Power & Passion 150”

May 8, 2020 partially revised (Under lined)

Vision for 2025 “FURUKAWA Power & Passion 150”
Become a corporate group that leverages its reputation for category leadership and uniqueness to deliver growth.

<Policy for achieving the vision>
Increase the value of the Furukawa brand through “marketing-based management”(*1) that incorporates CSV(*2) perspectives.

Sustainable
expansion of themachinery business

Strengthen andexpand our humanresource base

Actively promote
investments to increase
corporate value

Establish a robust
corporate foundation(*3)

Aiming for FY2025(150 anniversary of foundation)
Targeting consolidated annual operating income regularly in excess of ¥15 billion.
(*1) Marketing-based management incorporating CSV: This means incorporating marketing into the core of management to provide products and services recognized as valuable in changing
markets, as well as to resolve issues and problems faced by customers, with the aims of increasing corporate value and achieving sustained growth. It also reflects the Group’s intention toachieve the Sustainable Development Goals (SDGs) and otherwise resolve various social issues, including such domestic issues as building national resilience and the declining working-age
population, and thus help realize a sustainable society.
(*2) Creating shared value (CSV): This is a management framework that enables companies to co-create social value and corporate value by tackling social,environmental, and other issues.
(*3) At the time of partial revision( May 8, 2020), we will work diligently to “Increase corporate value by emphasizing business practices that reflect CSR/ESG issues recognized and to be solvedby the Group.” which is one of the “Establish a robust corporate foundation”

3Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)

2. Positioning of “Medium-Term Business Policy”
Creation "Corporate value"and "Social value"

Vision for 2025
(ideal image for 150th anniversary of foundation)

Become a corporate group that leverages its
reputation for category leadership anduniqueness to deliver growth.
(Established November 6, 2015)

Targetingconsolidated annual
operating income
regularly in excess of¥15 billion

M e d i u m - t e r mBusiness Plan etc.

Phase

Phase 1

Phase 2Phase 3Time period

FY2018-2020

FY2021-2023

FY2024-2026

Positioning

Built foundations
for renewed growth

Expedite growth and further
improve profitability

Complete realization of
Vision for 2025

Designation

Medium-TermBusiness Plan 2019

Medium-TermBusiness Policy 2022

Medium-TermBusiness Plan 2025

Approx. ¥8.5billion [¥8.6billion*]

We postponed announcement of MediumTerm Business Plan 2022 and instead
decided to formulate/ announce
consolidated performance forecasts foreach single fiscal year.

We will consider disclosing theplan when we announce ourresults for fiscal 2023.

Perfo
rman
ce
indic
ators

OperatingincomeＲＯＥ

Approx.6-7% [5.8%]

4

3. Management Policy

Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)(1) Companywide strategy“Expedite growth and further improve profitability.”
Under Medium-Term Business Policy 2022, with the aim of realizing Vision for 2025, we will work toincrease the value of the Furukawa brand by advancing marketing-based management, which has
been redefined to incorporate CSV perspectives. We will also strengthen our ability to find and solve
problems in the field and our ability to produce innovation. Targeting sustained growth, meanwhile, wewill “Strengthen and expand our human resource base,” “Actively promote investments to increase
corporate value,” and “Establish a robust corporate foundation.” Under Medium-Term Business Plan
2019, we built foundations for renewed growth. By making all-out efforts to solidify these foundations,
we will work to “Expedite growth and further improve profitability.”

Sustainably expand the Machinery business, step up alliances and M&As,
emphasizing business practices that reflect CSR/ESG issues recognized.
In particular, we will continue striving to “Sustainably expand the Machinery business”—
positioned as a core business under Medium-Term Business Plan 2019—in order to clearly
identify priority investments and growth businesses. We will also step up alliances andM&As to achieve discontinuous growth. In addition, we will work diligently to “Increase
corporate value by emphasizing business practices that reflect CSR/ESG issues recognized
and to be solved by the Group.”5Appendix “Medium-Term-Business Policy 2022”(2) Increase the value of the Furukawa brand through “marketing-based management”
CSV perspectives(Thisthatis aincorporates
document disclosed
in the past.)
We will generate corporate value by providing infrastructure, products, technologies, and services that help solve social issues. At the same time,
we will continue striving to create social value building social infrastructure and realizing a safe, environmentally friendly, and prosperous society.

[Value creation process of Furukawa company group]“marketing-based management” that incorporates CSV perspectives:
Marketing-based management incorporating and redefining CSV, this means incorporating marketing into the core of management to provide products and services recognized as valuable inchanging markets, as well as to resolve issues and problems faced by customers, with the aims of increasing corporate value and achieving sustained growth. It also reflects the Group’s
intention to achieve the Sustainable Development Goals (SDGs) and otherwise resolve various social issues, including such domestic issues as building national resilience and the declining
working-age population, and thus help realize a sustainable society.

6Appendix “Medium-Term-Business Policy 2022”（3）Contribution of the SDGs through “marketing-based management” that
CSV perspectives(Thisincorporates
is a document disclosed
in the past.)

Of the 17 SDGs, we are focusing particular attention on achieving Goal 11 (“Make cities and human settlements inclusive, safe, resilient and sustainable”)
and Goal9 (“Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”). We will also strive to create social
value by building social infrastructure as stated in “The Furukawa Company Group’s Value Creation Process” (please see pages 2–3), while realizing a safe,
environmentally friendly, and prosperous society.

SDGs with High Contribution Levels (◎: Especially Important; 〇: Important)Segment

Main Products, Technologies,
and Services○

Industrial
Pumps

Belt conveyors

◎

◎

◎

○

◎

◎

○

◎

◎

◎

◎

◎

◎

◎

◎

○

◎

Steel bridges and steel
structures

Rock Drill○

Tunnel drill jumbos Hydraulic crawler Hydraulic crushers
drillsUNIC
UNIC cranes

Mini crawler
cranes◎

Ocean cranes○

MetalsElectrolytic copper○

Electronics
High-purity
metallic arsenic

Coils

Sulfuric acid

Aluminumsulphate

Optical components(lenses)○

Chemicals○◎

Ferrous sulfate

7

（4）Increase corporate value by emphasizing business practices thatAppendix
reflect CSR/ESG
issues recognized“Medium-Term-Business
Policy and2022”
to be solved by the Group(This is a document disclosed in the past.)
One policy as part of our Vision for 2025 states our commitment to “increase corporate value by emphasizing practices that reflect CSR and ESG issues recognized andto be solved by the Group” as a core foundation of management. We also clarified the relationship between ESG, CSR priority issues and relevant major SDGs.

ESG Section

E(Environmental)

CSR/ESG Priority Issues

Major Related SDGs

Promote environmental
protection activities

Offer products and services that satisfy
customers

S（Society）

Build fair and impartial business
relationships and relationships ofreciprocal trust with business partners
Promote social contribution activities
Realize comfortable working environments for
employees and give them fair evaluationand treatment
Build a meticulous group governance system

G（Governance）

Communicate with shareholders andother investors
Strengthen compliance8Appendix “Medium-Term-Business Policy 2022”(This is a document
disclosed in the past.)（5）Basic strategies and priority issues by segment: Industrial
Machinery
Basic strategy

We will continue our strategy of “Increasing our involvement in section plant construction projects and expanding our contractor business,
including large-scale projects for both the public and private sectors, in order to transition from a standalone machinery manufacturer,
strengthen our engineering capabilities, and enhance our business foundation in the domestic market,” and thus establish a solid
growth trajectory.
Priority issues- Attract new orders by providing technical proposals for section plant construction projects and other projects.
- Cultivate demand for SICON® enclosed hanging conveyors.
- Strengthen earnings foundation by capturing replacement demand for pumps and material machinery.

GEOPUS C3 cone crusher

High efficiency energy saving
slurry pump
SPL e-Performance

SICON® Enclosed Hanging Conveyor designed for the Sakaigawa–Kanamori retention basin project (Machida City, Tokyo)

Belt Conveyors designed for the Tokyo Outer Ring Road project

SICON® is a registered trademark of ContiTech Transportbandsysteme GmbH.

9

Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)（5）Basic strategies and priority issues by segment: Rock Drill Machinery
Basic strategy

Strengthen our Life Cycle Support (LCS) capabilities, reinforce our earnings foundation for drill products(blast hole drills and drill jumbos), tap new markets, and launch new products to increase profits.
Priority issues- Strengthen and rebuild overseas marketing capabilities.
Reinforce overseas business foundation for blast hole drills.
Create overseas business foundation for drill jumbos.

- Build business models using Life Cycle Support (LCS).
Strengthen stock business by providing various services that benefit customers’ businesses (extended warranty, full maintenance,
proposals for using ICT-based operation support systems to enhance work efficiency, etc.).

- Further enhance lineup of products that contribute to safety and efficiency at tunnel excavation sites, such as fully
automatic drill jumbos and automatic rock bolters.

Customer

Operation support systems

F-MICAS

FRD-NetDistributors &Service stores
Hydraulic Crawler Drill in operation at overseas quarry site

LCS

Furukawa
Drill Jumbo in operation at overseas tunnel excavation site

10

Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)（5）Basic strategies and priority issues by segment: UNIC Machinery
Basic strategy

Secure stable income from domestic sales and expand income from overseas sales, by promoting
advanced functions and higher added value in order to strengthen our competitiveness; advancing thestock business; and reinforcing our overseas product, sales, service, and technological capabilities.
Priority issues- Reap benefits from capital investment in Sakura Works and promote further automation.
- Strengthen competitiveness by increasing functionality and higher added value of UNIC cranes, mini crawler
cranes, and UNIC carriers; develop new functions and options meet diversifying applications.
- Expand overseas sales network and enhance sales capabilities of dealers.
- Reinforce our service system.

UNIC products active overseas

Sakura Works

11

Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)（5）Basic strategies and priority issues by segment: Materials, Real Estate
Chemicals

MetalsBasic strategy

Basic strategy
Conduct drastic review of contracted smelting and refining business.

Expand income from existing products and start commercializing and fostering newly developed
products

Priority issues

Priority issues
Identify profitability and future potential of contracted copper smelting business.

- Existing products
Sulfuric acid: Strengthen differentiation by emphasizing high-quality sulfuric acid products- Newly developed products
Metallic copper powder: Enhance product quality, establish mass production and sales
systems, and expand sales channels by providing product samples

Metallic copper powder
Purpose/ Conductive paste

Electrolytic copper

Real EstateElectronics
Basic strategy

Basic strategy

Promote growth of strategic products and launch new strategic products.

Secure stable income from Muromachi Furukawa Mitsui Building and effectively
utilize Furukawa Osaka Building and other real estate owned by the Group.

Priority issues- Aluminum nitride: Utilize high-value-added firing technology to expand
business; develop products with high levels of thermal conductivity andtoughness.
- Diffractive optical elements (DOEs): Utilize microfabrication technology toincrease applications to sensors (in addition to laser processing) in order toexpand sales channels.
- Hybrid coils: Provide product samples in order to emphasize high design
flexibility.
Aluminum nitride
Purpose/ components for semiconductor
manufacturing equipment(such as heater) andsubstrate materials

Priority issues
Decide future plans for Furukawa Osaka Building.

Muromachi Furukawa Mitsui Building(commercial name: COREDO Muromachi 2)
Nihonbashi Muromachi, Chuo-ku

12

（6）Product development system

Appendix “Medium-Term-Business Policy 2022”(This is a document disclosed in the past.)

Basic strategy

Turn development themes into products and businesses that directly contribute to Group operating companies; activate
capabilities to find and solve problems in the field in order to improve productivity, which is essential for manufacturers.
Priority issues- Commercialize products under development, such as fully automatic drill jumbos.
- Promote development of solid electrolyte materials and mass production technology for all-solid-state batteries.
- Strengthen training of engineers to lead the next generation through full-scale deployment of engineer development program.
- Reduce environmental impact during mechanical system product development: Convert power load reduction (achieved throughweight reduction and efficiency improvement) into CO2 reduction equivalent; set reduction targets for each main product; follow
up using PDCA cycle.

（7）Strengthen and expand our human resource base
Basic strategy

Build a motivating company that encourages individual employees to maximize their abilities and create new value.
Priority issues- Develop human resources.
Undertake drastic review of education system.
- Promote Health and Productivity Management.
Reduce total working hours per year, promote diverse workstyles, and improve health examination/re-examination rates.
- Promote diversity.
Promote employment of female planning staff and people with disabilities, and actively hire foreign employees.
- Improve working environments.
Review and maintain working environments that can address emergencies; strongly promote operational reforms.

13

Appendix “Medium-Term-Business Policy 2022”（8）Actively promote investments to increase(This
corporate
is a document value
disclosed in the past.)
1

Capital investment plan*10 to support stronger manufacturing capabilities

We will make capital investments mainly in the Machinery business (positioned as our core business)
In the Rock Drill Machinery segment, we started a capital investment plan aimed at increasing the production capacity of the Takasaki Works and otherfacilities. We decided to postpone and reassess capital investment from the second stage in light of this segment’s business performance and other factors.

2

Alliances and M&A

We will consider and enter alliances and M&A with peripheral companies that fill the gaps and create continuity in our
existing Machinery business, as well as with companies engaged in the fourth pillar of our Machinery business.
Industrial
Machinery

Rock Drill

Manufacturing and sales ofpumps, material machines(crushers, etc.), environmental
preservation equipment, steel
bridges, belt conveyers andheat-resistant/wear-resistantcastings
Related contract works

Manufacturing and salesof Hydraulic breakers,
Hydraulic crushers,
Hydraulic crawler drills,
tunnel drill jumbos,
mining drill jumbos, etc.

UNIC

Manufacturing and salesof UNIC cranes, Mini
crawler cranes, Ocean
cranes, UNIC carriers,
etc.

Alliances andM&A

Machinery Business

Capital investments mainlyin the Machinery business

Consider and enter
14

Appendix “Medium-Term-Business Policy 2022”
経営基盤の整備：
ROE向上に向けた取り組みの強化・浸透(This
is a document
disclosed in
the past.)（9）Establish a robust corporate foundation: Strengthen
efforts
to increase
ROE

We will make individual investment decisions while paying attention to profitability and taking into account risks andcapital costs associated with each investment. We will also step up efforts to improve efficiency and profitability.
At the same time, we will pursue overall optimization of business resource allocations and improve corporate value by
incorporating cost of capital in our business portfolio management.

15

Appendix “Medium-Term-Business Policy 2022”
経営基盤の整備：
ROE向上に向けた取り組みの強化・浸透(This
is a document
disclosed in
the past.)（9）Establish a robust corporate foundation: Strengthen
efforts
to increase
ROE

ROE

Profitability

Efficiency

Leverage

Net income margin

Total asset turnover

Financial leverage

Profitability
improvement

Efficiency
improvement

16Appendix “Medium-Term-Business Policy 2022”
経営基盤の整備：（9）Establish a robust corporateROE向上に向けた取り組みの強化・浸透
foundation: Capital strategies: Pursue optimal capital
based disclosed
on rating strategy(Thisstructure
is a documentin the past.)

Allocation of operating cash flows
We will “actively promote investments that that contribute to increased corporate value” while aiming to establish a robust
financial foundation. At the same time, we will endeavor to make optimal allocations of cash flows in consideration ofshareholder returns.

Dividends
Our policy is to return profits to shareholders in the form of dividends appropriated from retained earnings. Specific dividend amounts are basedon consolidated profits/losses. With the exception of special profit/loss circumstances, we endeavor in principle to pay annual cash dividends of¥50.00 per share with a consolidated payout ratio of 30% or higher. In this way, we strive for stable, continuous shareholder returns.

Treasury stock purchase and cancellation
With respect to purchase and cancellation of treasury stock, our policy is to properly consider all relevant factors, including
share price movements, capital efficiency, and cash flows.

*Rating strategy:
By fiscal 2026 (ending March 2026), the final year of Vision for 2025, we aspire toachieve a financial soundness vision that will enable us to obtain a credit rating of
BBB+ (or higher), which is one notch above the current rating issued 9 by aJapanese rating agency. To this end, we will continue striving to improve ourfinancial soundness.
(*) Debt-to-equity ratio: Interest-bearing liabilities (fiscal year-end) / Shareholders’ equity (fiscal year-end)(*) Interest-bearing debt/EBITDA ratio: Interest-bearing debt (fiscal year-end) / [Operating income + Depreciation

Financial Soundness VisionDebt-to-equity ratio*

0.6–0.7 times (range)

Interest-bearing
debt/EBITDA ratio*

4 times (range)

Issuer rating

BBB+ or higher(Japanese rating agency)（9）Establish a robust corporate foundation: Increase corporate value by emphasizing businesspractices that reflect CSR/ESG issues recognized and to be solved by the GroupWe will formulate medium-term CSR targets (fiscal 2021 to 2023) and develop a PDCA cycle of planning, execution, evaluation and improvement.

17Intentionally Blank