FURUKAWA CO., LTD.
Financial Results Briefing for the Fiscal Year Ended March 2021
May 25, 2021

[Number of Speakers]

1
Naohisa Miyakawa

President and Representative Director

Presentation
Miyakawa: This is Naohisa Miyakawa, President of FURUKAWA CO., LTD.
Due to the declaration of a state of emergency, we have decided to cancel the briefing of the financial results
for the fiscal year ended March 2021, and to provide a presentation by video recording as we did for thesecond quarter results. Thank you for your understanding.

In today's presentation, I will first explain the financial results for the fiscal year ended March 2021 and thefull‐year earnings forecasts for the fiscal year ending March 2022. Next, I will talk about the outlook for theformulation and announcement of the new Medium‐Term Business Plan as we announced on May 13, when
we notified you of postponing the announcement of the Medium‐Term Business Plan 2022, and thestrengthening of the Group's business structure to be achieved in FY2021 and FY2022. And finally, I will explain
our plan to achieve carbon neutrality.

This is a summary of the financial results for the fiscal year under review.
Net sales totaled JPY159.7 billion, a YoY decrease of JPY5.5 billion. Operating profit was JPY5.5 billion, a YoY
decrease of JPY3.1 billion, and profit attributable to owners of parent was JPY7.4 billion, a YoY increase of
JPY3 billion.
ROE improved by 3.1 percentage points to 8.9%. The details will be explained later.

First, I would like to explain the impact of COVID‐19 on our company. The degree of the impact varied bysegment.
In the Industrial Machinery segment, the impact was limited, although there was some suspension andpostponement of construction work.
In the Rock Drill Machinery segment, shipments decreased in Japan due to lower machine utilization andsuspended purchases, but there was no impact on demand for tunnel drill jumbos. Overseas, with the
exception of China and some other countries and regions, economic activity was stagnant due to restrictions
on behavior and other factors, and customer companies remained reluctant to purchase machinery
throughout the year.
In the UNIC Machinery segment, the impact of COVID‐19 in Japan was noticeable in the Tokyo metropolitanarea, with orders being sluggish due to the postponement of truck deliveries, suspension and postponementof construction work, and postponement of investment by rental companies. However, demand for trucks
entered a recovery trend in the second quarter, and orders for UNIC cranes were flat from the year‐before
level. Overseas, the results in Southeast Asia were significantly affected by COVID‐19. Shipments of UNIC
cranes decreased there. Shipments of mini crawler cranes decreased in Europe and the US due to the impact
of interrupted construction work.
In the Metals segment, overseas market prices for electrolytic copper plummeted toward the end of the fiscal
year ended March 2020 due to the prospect of a slowdown in the global economy, but turned up substantiallyin the fiscal year under review due to expectations of an economic recovery, the supply of vaccines, and thestart of vaccinations. Demand for electric wires and copper products remained flat YoY from the third quarteronward due to the recovery of production in the automobile industry, but domestic demand for electrolytic
copper decreased significantly.
In the Electronics segment, demand for crystal products and coils decreased due to the impact of production
activity in the automobile industry and other sectors, but there was a recovery trend in the second quarterand thereafter.
In the Chemicals segment, demand for sulfuric acid decreased due to inventory adjustments by customers.
In the Real Estate segment, the commercial facility in the Muromachi Furukawa Mitsui Building (COREDO
Muromachi 2) was temporarily closed following the declaration of a state of emergency in April last year. Afterthe facility resumed operations, the number of visitors declined compared to the normal state.
As for the details of the impact of COVID‐19 on each segment's performance, et cetera, please refer toBusiness and Other Risks on page 10 of the Summary of Financial Results for the Fiscal Year Ended March
2021.

Under these circumstances, sales in the fiscal year under review incurred YoY falls in all segments except for
the Metals and Electronics segments. Overall sales in the machinery business decreased by JPY14 billion to
JPY68.6 billion, accounting for 43% of the total consolidated sales of JPY159.7 billion.
Operating profit decreased in all segments except for the Metals and Electronics segments. Operating profit
in the machinery business as a whole totaled JPY3.9 billion, a YoY decrease of JPY3.3 billion, accounting for
71% of the overall operating profit of JPY5.5 billion.
For reference, the backlog of orders in the Industrial Machinery segment at the end of the year was JPY9.8
billion, an increase of JPY1 billion compared to the end of the previous fiscal year. The segment has received
orders for constructing a new bridge in Kyoto Prefecture and a belt conveyor system and other equipment for
tunnel construction for the Linear Chuo Shinkansen Line, a new bullet train line, in Shinagawa Ward of Tokyo.
In addition, the impact of metal price fluctuations on operating profit in the Metals segment was a positive
JPY940 million for copper and a positive JPY460 million for gold, resulting in a JPY1.51 billion increase in profit
due to the price effects.

Next, I will explain YoY increases/decreases in net sales and operating profit and major factors by segment.
Industrial Machinery reported sales corresponding to the volume of finished work on a large‐scale belt
conveyor project, but it incurred falls in sales and profit because most of the work on materials‐related
machinery and large‐scale projects had been completed in the previous fiscal year. However, the amount ofoperating profit, JPY2.1 billion, was the second biggest ever after the record profit posted in the previous fiscal
year.
In the Rock Drill Machinery segment, shipments of hydraulic crawler drills, hydraulic breakers, and hydrauliccrushers decreased in Japan, but sales of tunnel drill jumbos increased due in part to the contribution of fully
automatic drill jumbos, which were launched in June 2020. Overseas, shipments of hydraulic crawler drills
decreased mainly in Southeast Asia. So did those of hydraulic breakers in North America. As a result, sales
declined significantly, and the segment incurred operating loss.
In the UNIC Machinery segment, orders for UNIC cranes were flat YoY as domestic demand for trucks entereda recovery trend in the second quarter. However, segment sales decreased YoY in reaction to active orders in
the previous year, which had been supported by a rush in demand ahead of a partial revision to the mobile
crane structural standards and a rush in demand prior to the enactment of the exhaust emission standards
for light trucks. Overseas, shipments of UNIC cranes decreased in Southeast Asia. So did those of mini crawler
cranes in North America. As a result, both sales and profit decreased YoY, but operating profit of JPY3.1 billion
led the overall machinery business.
In the Metals segment, both sales and profit increased YoY due to a significant rise in the price of electrolytic
copper, which offset a decline in profit in the contracted business caused by worsened purchasing conditions

for copper concentrate and other factors. Excluding the profit of JPY1.5 billion from the positive impact ofprices, the segment would have incurred operating loss of about JPY1 billion.
In the Electronics segment, sales of crystal products decreased YoY and coils were flat, but demand for high‐purity metallic arsenic was strong for use in compound semiconductors. Demand for aluminum nitrides
increased for use in parts for heat countermeasures and components for semiconductor manufacturing
equipment. As a result, the segment saw a YoY sales increase and reported operating profit, in a turnaroundfrom operating loss in the previous fiscal year.
In the Chemicals segment, sales and profit decreased YoY due to a decrease in demand for sulfuric acid andcopper suboxide.
In the Real Estate segment, sales and profit decreased YoY mainly due to the closure of the Furukawa Osaka
Building.
Compared to the forecasts announced in August last year, we were able to significantly increase operating
profit from the forecast of JPY2 billion to JPY5.5 billion. Operating profit in the overall machinery business wasup approximately JPY1.5 billion from the forecasts.

This is the consolidated income statement
Major topics are described as you see. Below operating profit, there were gains related to foreign exchange
rates and on equity in earnings of affiliates. We also reported extraordinary gain from the sale of investment
securities as we dissolved part of our cross‐shareholdings. As a result, profit attributable to owners of parent
increased by JPY3 billion YoY to JPY7.4 billion.

Next is the consolidated balance sheet
Net assets increased by JPY16.3 billion to JPY94.3 billion, due to increases of JPY5.5 billion in retained earnings,
JPY5.9 billion in valuation difference on available‐for‐sale securities, and JPY4.7 billion in accumulated
adjustments for retirement benefits.
Interest‐bearing debt decreased by JPY700 million to JPY69.6 billion. We repaid JPY8 billion out of the JPY10
billion we had raised at the beginning of the fiscal year as working capital in order to respond immediately topossible emergency fund demand amid the COVID‐19 pandemic. We also repaid part of other loans.

Next, I will explain our full‐year earnings forecasts for the fiscal year ending March 2022.
We estimated net sales at JPY184.4 billion, operating profit at JPY6.6 billion, ordinary profit at JPY6.6 billion,
and profit attributable to owners of parent at JPY3.6 billion.
Sales and operating profit are expected to increase YoY, with operating profit for the machinery business as awhole rising JPY2.3 billion to JPY6.3 billion, accounting for 95% of the total forecasted operating profit of
JPY6.6 billion.
Ordinary profit will decrease slightly YoY. There were the foreign exchange gains in the previous year. Profit
attributable to owners of parent is also expected to decrease YoY, as there was the gain on the sale ofinvestment securities in the previous year.
Our assumptions for copper prices, exchange rates, and exchange rate sensitivity are described in the lower
left part.
The Company plans to maintain the dividend at JPY50 per share.

Next, I will explain the factors behind the expected YoY increases/decreases in earnings by segment.
Sales will increase on the assumption that they will show a gradual recovery from the drop in demand due tothe impact of COVID‐19. Operating profit is expected to increase due to higher sales, which will offset an
expected increase in expenses resulting from the resumption of sales activities, mainly in the machinery
business.
In the Industrial Machinery segment, sales are expected to increase due to bridge construction and otherlarge‐scale projects, but operating profit is expected to be flat from the previous year, when highly profitablebridge projects contributed to profit.
The Rock Drill Machinery segment is expected to return to profitability, after it posted operating loss in theyear under review. Sales and profit will increase YoY in Japan and overseas.
The UNIC Machinery segment is expected to see increases in sales and profit in Japan and overseas.
As for overseas demand for the Rock Drill Machinery and UNIC Machinery segments, we expect a full‐scale
recovery in the next fiscal year.
In the Metals segment, we raised our copper price assumption to USD8,000 per ton, up USD1,121 YoY, so
sales of electrolytic copper are expected to increase. We also forecast sales of electrolytic gold will increase
due to a rise in volume. However, we expect a YoY fall in operating profit because profit in the contracted
business will decrease caused by the worse purchasing conditions for copper concentrate and we expect no
profit from the fluctuations in metal prices as we enjoyed it in the previous year.

In the Electronics segment, sales and profit will increase on the assumption that demand for crystal products
and coils will increase.
The Chemicals segment is expected to remain flat.

The actual results for the previous years and forecasts for the current fiscal year for capital investments,
depreciation and amortization, and research and development expenses are shown in the table as you see.
The amount of capital investments significantly increased in the Industrial Machinery segment in the previous
year, mainly due to the construction of a new office building at Oyama Works.

The states of metal products, foreign exchange rates, and employees are shown in the tables below.
In the Metals segment, we plan to reduce copper output gradually. As the first step, we have already reviewed
the ratio of our consigned copper production at the joint smelting works.

Here is the long‐term performance of the Company for reference.
This was the explanation of the financial results and earnings forecasts.

Next, I will explain the 3 items enclosed in the red box, including the outlook regarding the formulation andannouncement of the new Medium‐Term Business Plan.

As announced in the notice on May 13 of the postponement of the announcement of the Medium‐TermBusiness Plan 2022, we had been preparing to announce the Medium‐Term Business Plan 2022, the second
phase of our Vision for 2025, at the same time as the announcement of the financial results in May 2021.
However, the spread of COVID‐19 is continuing in many countries, and there is no indication of when the
pandemic will be brought under control. As a result, the Company has decided not to announce the Medium‐
Term Business Plan because our medium to long‐term business environment is highly uncertain and it isdifficult to forecast the future.
In the year 2025, the Company will mark the 150th anniversary of its founding. The year is the final year of
our Vision for 2025. We will continue to consider announcing the Medium‐Term Business Plan 2025, which
will be the final phase of our Vision for 2025, possibly when we will announce the financial results for FY2022.
For FY2021 and FY2022, we will conduct business operations in accordance with the Medium‐Term Business
Policy 2022 and announce the earnings forecasts for each of the next fiscal years, respectively.

We have divided our Vision for 2025 into 3 phases, set the milestones for PDCA, and have used each Medium‐
Term Business Plan as an important tool to achieve our Vision for 2025 by rolling the plans.
We positioned FY2021 and FY2022 as a period for carefully assessing changes in values, lifestyles, businessmodels, and others caused by COVID‐19, vigorously promoting the strengthening of our business structure,and focusing on an early recovery of the Group's business performance.

Management and financial indicators and their trends are shown here.
We aim to report operating profit of over JPY15 billion stably for FY2025. ROE was 8.9% in the fiscal year
ended March 2021 due to the recording of extraordinary profit, but we aim for higher figures and a double‐
digit level by 2025.
We aim at the debt‐to‐equity ratio at around 0.6‐fold to 0.7‐fold in 2025. We aim at the debt/EBITDA multiple
in the 4 times range. We will strive to improve our financial position, aiming for an issuer rating of BBB‐plus.

This table shows the sales trends by segment after we set our Vision for 2025.

Similarly, this shows the operating profit trends.

Now, I would like to focus on strengthening our company's structure for FY2021 and FY2022, which we havepositioned as a period to focus on the early recovery of our group's performance.
The key issue in the Rock Drill Machinery segment is to strengthen and rebuild its overseas marketing
capabilities. We will clarify our strategies by product and region, and drastically review and implement them,including the reorganization and consolidation of our overseas subsidiaries.
Specifically, we will ensure that selection and concentration are firmly in place. For hydraulic breakers, we will
focus our sales efforts on Europe and the US, where customers highly evaluate the functions and performanceof our original structure. On the other hand, for tunnel drill jumbos, we will take aim at Southeast Asia, where
there is expected infrastructure demand for tunnels and others. In addition, we will review the modelcomposition of hydraulic crawler drills, focus on models with high superiority, and engage in intensive sales
after the model selection.
In addition, in line with the establishment of priority regions, the current structure of 7 overseas subsidiaries
will be reviewed, reorganized, and consolidated.

Next, we will strengthen our hydraulic crawler drill business by promoting lifecycle support approaches. By
promoting the use of the ICT‐based operation support system, which is attached to hydraulic crawler drills
and catches information on operation, we will improve the accuracy of predicting replacement demand forhydraulic crawler drills and strengthen sales of new vehicles and components.
We will also shift from a wait‐and‐see sales stance to an offensive sales stance through proactive approaches,such as preventive maintenance, predictive maintenance, and implementation of preventive maintenance,
and we will instruct our dealers to promote this approach.
We will also promote the development of new commercial channels for overseas sales of drill jumbos. In
addition to developing our own channels, we will strengthen our relationships with overseas generalcontractors and others to enhance our overseas project channels.
In the Rock Drill Machinery segment, we will promote marketing management more strongly than ever, notonly overseas but also in Japan, and implement the business strategies of the Medium‐Term Business Policy
2022. We will also review the strategies as appropriate.

In the Metals segment, the key issue is a fundamental review of the contracted smelting business. We willcontinue to reduce the production volume of electrolytic copper as we recognize that the business feasibilityof contracted smelting is severe due to the sharp fluctuation of earnings affected by copper prices andpurchasing conditions for copper concentrate. In FY2022, we plan to reduce the output to at least 70,000 tons
per year.
Although the Metals Segment is the Company’s original business, we will not be bound by it and will continue
to make further efforts to review it.
The key issue in the Real Estate business is to realize a future concept of the Furukawa Osaka Building. The
Furukawa Osaka Building was closed in December 2019, and demolition work is currently underway. We willcontinue to study the future plans for this building.
We have positioned the 2 years from FY2021 as a period to focus on the early recovery of the Group's businessperformance by strengthening our business structure as I have explained.

Our group aims for realizing carbon neutrality toward a decarbonized society and takes this initiative as anopportunity to practice marketing management. We will contribute to the realization of the carbon‐freesociety by providing products, technologies, and services that are highly effective in reducing carbon dioxide
and other greenhouse gas emissions.
First of all, with regard to the Group's carbon dioxide emissions, although we have machinery and materials
plants, the amount of energy input that generates greenhouse gases is small, and the absolute amount of CO2
emissions is also small, with annual emissions of about 22,000 tons. This is an overwhelmingly low amount incomparison with non‐ferrous metals smelters in the non‐ferrous sector.
On the other hand, our company absorbs about 8,000 tons of carbon dioxide per year from the forests we
own in Japan. We will continue to reduce CO2 emissions from our business activities by reducing energy
consumption through the introduction of new equipment and more efficient production processes at each of
our plants, and we hope to achieve carbon neutrality by further increasing the absorption amount of CO2 by
our forests.
In addition, in order to realize a decarbonized society, we will contribute to the carbon neutrality of ourcustomers by providing products, technologies, and services that are highly effective in reducing greenhousegas emissions.
I would like to introduce 2 examples. Belt conveyors in the Industrial Machinery segment have a track recordof being adopted as a sediment transportation method instead of dump trucks. From the perspective of
decarbonization, we believe that the use of belt conveyors in tunnel excavation, construction of control
reservoirs, and removal of sediment from dams will contribute to the reduction of CO2 emissions.

Meanwhile, hydraulic crawler drills in the Rock Drill Machinery segment can help reduce CO2 emissions from
customers using them because they shorten the operating time due to the increased drilling speed achievedby the higher output of hydraulic drifters and the advanced functions of the control system. We have alreadyachieved a 35% reduction in CO2 emissions for medium‐sized machines under the current Tier 4 exhaust gas
emission regulations compared to the Tier 2 regulations ended 2006, and we are aiming for a 45% reduction
under our current plan.
That is all the explanation for today.
As a supplementary material, we have attached our Medium‐Term Management Policy 2022, which wasannounced last year, and we would appreciate it if you could also review it.
My term as President is now 8 years. As announced on April 28, Director Minoru Nakatogawa has been
appointed as the new President to be elected June 29. I will entrust the remaining half of our Vision for 2025
to the next leader and work together to promote the reforms.
As Chairman, I will naturally support the new President, and I will also focus on each and every issue thatneeds to be solved to realize our Vision for 2025.
I would like to ask our shareholders and investors for their continued support of the ever‐changing
FURUKAWA.
[END]______________