Midterm Management Plan
(FY2024 to FY2026)

Advancing to the Next Stage
with Unified Strengths and Experience

February 14, 2024

Contents

1

Corporate Profile

2

Business Environment

3

Midterm Management Policy

4

Business Strategy

5

Capital / Financial Strategy

６

Sustainability Management

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2

Corporate Profile
RIKEN CORPORATION and Nippon Piston Ring Co., Ltd. have merged.
Trade Name
Head Office Address

NPR-RIKEN CORPORATION
8-1, Sanbancho, Chiyoda-ku, Tokyo

Location of Main
office Functions(Tokyo main office) Sanbancho-Tokyu Bldg. 3F, 8-1, Sanbancho, Chiyoda-ku, Tokyo 102-0075(Saitama main office) 5-12-10, Honmachi Higashi, Chuo-ku, Saitama City, Saitama 338-8503

Representative

Representative Director, Chairman and CEO Yasunori Maekawa
Representative Director, President and COO Teruo Takahashi

Established
CapitalOctober 2, 2023 (Riken: 1927, Nippon Piston Ring: 1934)
5,061 million yen

Employees

Consolidated: 7,076 (as of December 2023)

Description ofBusiness

Automobile and industrial machine parts business (engine, transmission, drive, and chassis parts, etc.)
Other business (piping products, thermal engineering products, EMC-related products, etc.)

Fiscal Year End

March 31

Securities Code6209 (TSE Prime Market)

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3

Corporate Profile - Global network
NPR-RIKEN Group
Consolidated
sales ratio(present)

Domestic:

Overseas:

50％ 50％Consolidated:

RIKEN CORPORATION

Nippon Piston Ring
Co., Ltd.

Domestic
affiliates:

Overseas
affiliates:

15

19

Consolidated
No. ofemployees(present)

7,076
Domestic: Overseas:

3,864 3,212

Companies
accounted for using
the equity method:

5
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4

Corporate Profile - Group philosophy

Mission Build the competencies and capabilities
to sustain our present and future

Vision Create innovation through the blending of people
and technology while continuing to embrace change.
 ‘Circles’ of Trust :We will enhance corporate value by respecting
our relationships with our stakeholders and by providing high-quality
products and solutions.

Value ‘Circles’ of Growth :The company and employees will growtogether by all employees recognizing and respecting each other’s values
and by continuing to take on new challenges.

 ‘Circles’ of Social Harmony :We will strive to solve social issues
related to living conditions and the environment wherever we operate.

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5

Corporate Profile - Company logo
 Philosophy behind the company logo
The company logo embodies NPR-RIKEN’s strong
desire to take on new challenges to fulfill our mission,
Build the competencies and capabilities to sustain
our present and future.
 NPR-RIKEN logo with two triangular pyramids
The two triangular pyramids, which convey stability andinnovation, represent RIKEN and Nippon Piston Ring,as well as the three values of NPR-RIKEN’s
management philosophy.

Overlapping of the two triangular pyramids represents the
new energy that will be generated by the two companies
working together, and the new future is expressed in thisshape. The color is a bright, transparent blue that conveys
sustainability.
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6

Business Environment■ Automotive market
Forecast of ICE & EV global production

Unit: Million
units/year：ICE Production (including HEV, PHEV, range extender, etc.)：EV Production (including BEV and FCV)

120・ICE Production will reach its peak in
2024-2027.
- BEV ratio is expected to exceed 30%
in 2030.
- On the other hand, the idea of
replacing all gasoline-powered vehicles
with EVs is being reconsidered.

100
80
60
40
20
0

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Source: NPR-Riken’s estimation based on various data

[Overall]・Auto manufacturers are continuing to shift theirresources to BEVs
- Increase in demand for cost reduction and needof development support- Promotion in reducing parts and modularization
・ Progress in development of hydrogen-powered andalternative fuel-powered engines
・ Acceleration of development of technology for
CASE
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[Global market]
・ China:
Increase in BEVs & HEVs for passenger cars
Increase in diesel & CNG vehicles forcommercial vehicles
・ India: Third largest market in the world
・ Europe and U.S.: Environment
protection measures intensifies, while there is a
setback in the drive toward replacing all
gasoline-powered vehicles with EVs.

7

Business Environment■ Markets related to NPR-RIKEN Group・ Marine: Market expansion due to economic growth and increase in the use of alternative fuel・ Semiconductor: Market expansion continues. Semiconductor manufacturing equipment market is also expected to
expand over the long term.

・ Construction: Steady investment in energy conservation measures while demand for housing falls due to population
decrease. Demand in prefabricated components for housing is rising due to a labor shortage in the construction industry.
・ Robot: Broadening usage of robots, reflecting labor shortage (in fields such as medical treatment and services)・ Medical treatment: Progress in medical equipment and advance in surgery technique■ Sustainability

・ Growing social demand for promotion of sustainable business management- Decarbonization (climate change) measures ⇒ Japanese government: Aiming to realize carbon neutrality by 2050,
which is also a request from the car makers.
- Overall environment protection measures (waste disposal, water resources, bio-diversity, etc.)- Diversity, equity & inclusion (DE&I), respect for human rights- Strengthening and visualization of activities related to policy for human assets and human resources development- Strengthening of corporate governance■ Digitalization

・ DX: Progress in activities to enhance business competitiveness through business process reform
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8

Midterm Management Policy- ‘Innovation’ and ‘Challenge’, and to the New Stage 1. Generate synergies throughconsolidation
Completely merge in FY2026
Transform to a robust cost structure
Implement synergies throughintegration of resources &capabilities of both companies

2. Reform business portfolio
Consolidation
Synergies
×Growth of
New Business

Establish “next core” and new
product businesses in non-ICE
fields, and increase the sales ratio
Improve profitability in existing ICE
fields

3. Strengthen sustainability management and develop a foundation for growth
Strengthen carbon
neutral initiatives

Improve employees
engagement and develop
employees training strategy

Advance Corporate
Governance

Promote “Diversity,
Equity, & Inclusion”

Establish safe and secure
workplaceContribute to local
communities※DE&I: Diversity, Equity, & Inclusion
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9

Midterm Management Policy - Quantitative goal
Business
consolidation(scheduled)2023

2024 to 2026
‘Midterm management policy
period’2030‘2030 Vision’Sales: 200 billion yen

Sales: 167 billion yen
Ordinary profit ratio: 7.5%
ROE: 5.6%

Sales: 180 billion yen

Ordinary profit ratio: 12% or more

Ordinary profit ratio: 9% or more

ROE: 10% or more

ROE: 8% or more

*Sum of both companies (estimate)◆Realization of a higher return on equity (ROE) than cost of equity by tackling businessportfolio reform, synergy creation, and balance sheet optimization➡ Promotion of strategic cash allocation to improve corporate values■ Active investment to transform business portfolio (capital investment, M&A, R&D)
■ Further enhance shareholder returns➡ Achieving net profit that enables the above goals by promoting financial strategies etc.
➡ Reduction of cost of equity through steady execution of midterm strategy and enhancement of
IR activities
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10

Business Strategy
Reorganize business portfolio to achieve sustainable sales and profit
growthIncrease profitability

Piston Ring
Business
Win a higher share in thisbusiness and earn stable profits
continuously
Heavy-duty commercial,industrial, aftermarket andmarineFundamental
Business
Increase profitability
Sintered products, engineered
plastic products, piping products,
casting components andprecision components

Increase sales to becomecore business

Next Core Business
Expand this business throughaggressive investment
Existing businesses in growth areas,
new products businesses Allocate management resourcesto next core/new products
businesses to increase sales
and profits in the mid-and-longterm.

 Steady, long term demand for markets such as
aftermarket and industrial applications.
This business consolidation will expand thesource for stable earnings.
 Expand human capital base to support business growth by increasing investment in
human capital as well as utilizing our diversified human resources.
 Decrease sales ratio of ICE parts for passenger cars
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11

Business Strategy - Numerical target
Increase
profitability

Piston ringbusiness

FY 2023 (estimate)World’s No. 1 supplier
Sales expansion of engine-remaining
non-passenger car* products*Engines for heavy-duty commercial, industrial,
aftermarket and marine

Synergy effect ⇒ Improved profitability



Fundamental
business

Offsetting the engine production
decrease by expanding shares in
specialty areas
Improving profitability throughrationalization and product portfolio
review

Increase sales to becomecore business

Next core business

Sales

64.9 bil. yenSwift business expansion by
reinforcing resources
Business expansion in growth areas(semiconductor, electric, promoting
CN)
Business expansion through M&As

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67.5 bil. yen

Operatingprofit ratio7%


FY 2026 target

10％ or moreSales

79 bil. yen

80 bil. yen

Operatingprofit ratio

5%7％ or moreSales

5.8 bil. yen

18 bil. yen

Operatingprofit ratio

4%

10％ or more
12

Business Strategy - Business portfolio reform
Consolidated sales by business
Next core business
Fundamental
business

Piston ring business
2023

2024

2025

2026

Midterm management plan・ Business portfolio reform・ Synergy creation

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2030

2030 Vision
・ Next core business will become anew pillar

13

Business Strategy - Piston ring business
IssuesPiston ringbusiness

Increase
profitability Shrinking market: Maintain and expand sales, and improve
profitability
 Enhancement of cost competitiveness Promoting efforts to achieve carbon neutrality and taking thelead in improving next-generation engine functions

Basic policy

World’s No. 1 supplier of piston rings

Reliable solution provider
Synergy creation and substantial productivity improvement
Broader product line-up and fast development speed
Innovative product technology to achieve carbon neutrality(hydrogen and alternative fuel etc.)

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14

Business Strategy - Piston ring businessBusiness prospects
Passenger cars
Diversification of energy
sources
Spread of EVs
Shrinking market
Aftermarket

1.5-billion-unit*, sound market*No. of automobiles owned in the world

Business strategy








Strengthening responses by overseas bases
Through the integration of production technologies of
the two companies, improve profitability by pursuingcost reduction, building an optimum production system,
utilizing resources efficiently, and promoting
automation

Concentrating resources on promising customers andmarkets

Sales expansion by technologies
applicable to new fuel (methanol,

Heavy duty commercial andindustrial
ICE will remain as the main driving force
Demand is levelling off/slightly increasing

MarineIncrease in newly built ships
Acceleration in new fuel technology
Increase in cargo movements atsea (replacement demand)

Selective sales expansion, targeting
engines that will remain and building
a solution-providing sales force
Use of hydrogen/alternative
fuel-powered engine test facilities
Promotion of collaboration between
industry and academia or between industries

ammonia, and hydrogen)

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Enhancing the efficiency of the
production and development system

15

Business Strategy - Fundamental business
Precision machinedparts
Fundamental
business

Sintered products

Casting components

For automobiles andindustrial machines

Precision components

Increase
profitability
Piping products
For construction & industry

IssuesEngineered plastic
products

The biggest pipe fitting company in the domestic
market by the acquisition of Former JFE Pipe
Fitting Mfg. Co., Ltd. (currently NIPPON PIPE
FITTING CORPORATION)
Increasing presence of Reinforcing Bar Joints

 Shrinking market ・・・ Maintain and expanse sales and improve profitability
 Enhancing cost competitiveness

Basic policy

Precision machined parts: To become the world’s niche top supplier
Piping products: To improve presence in the construction field To identify and dive deep into competitive market product segments
 To improve cost competitiveness by raising productivity and optimizing production
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16

Business Strategy - Fundamental businessBusiness prospects
Precision machined parts businessSpread of EVs- ICE parts
Demand hitting the ceiling- Other than ICE parts
Demand expanding acrossthe world

Piping products-

Domestic demand gradually fallingas population decreases- Increase in renewal demand- Labor shortage of plumbers⇒ Increase in needs of piping
equipment and materials, andprefabricated components forhousing that could lead to laborsavingBusiness strategy
 Sintered products: Expansion of sales of valve
seat inserts and further cultivate products forheavy duty commercial and industrial engines
 Engineered plastic products: Development of new
products in addition to seal rings for automotivetransmissions, for which NPR-RIKEN has thelargest market share Casting components: Reinforcement and businessexpansion of Indonesian base and optimization ofdomestic production
 Precision components: Introducing products that
auto makers produce in-house (camshaft) andlaunching new products by utilizing existing
technologies

 Sales expansion with Riken ( brand) +Nippon Pipe Fitting ( brand) Expansion of piping prefabrication business

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17

Business Strategy - Next core business
By combining existing technologies and external resources, expand businessportfolio for the next generation.
Thermalengineering

Development, production, and sale of heating elements
indispensable for semiconductor manufacturing

EMC

Development and sale of equipment and products forsecuring electromagnetic compatibility to protect
electronic devices from receiving or having an influence
on radio wave

METAMOLD

Metal powder injection molding for production of highdensity, high-strength parts with complicated shapes

New products
and newbusiness・ Electric unit products: Development of small, lightweightmotors for industrial, nursing, and medical robots
・ Highly functional engineered plastic products: Sales
expansion in next-generation mobility and robot markets
・ Noise countermeasure products: Expansion of noise
countermeasure products by utilizing the technology
cultivated from EMC products. Also applicable for “CASE”
・ Medical equipment : Expansion of biocompatible material
to medical equipment that is embedded inside a human body

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18

Business Strategy - Next core business
Thermal engineering
Next corebusiness

Increase sales tobecome corebusiness• Development, production, and sale of original heating elements andsupply heater units and industrial furnaces that uses them
• Applicable in a wide range of fields of industry (esp., for semiconductor
manufacturing equipment-related)

Heating element

PYROMAX™

Heater unit

PYROMAX SUPER™

Industrial furnace (PYRORIK™)

Heating furnace

Examples of products of SHINWA VANES CO., LTD.

Baking furnace

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Mica heater

Jacket heater

19Business Strategy - Next core business
Basic policy
Develop and prepare a full-lineup of heater units for semiconductor
manufacturing equipment
Reinforcing development and production capability applicable for carbon
neutrality (CN)Business prospects
Heater units for semiconductor
manufacturing equipment
Production of semiconductor
manufacturing equipment increasing
as semiconductor industry expands

Promoting CN projects(conversion of combustion heat into
electrical resistance heat)- Delivery of heater unit prototypes for
multiple CN projects

Business strategy

A full line-up for variety of usages and temperature
 Use of SHINWA VANES CO., LTD. (acquired in FY
2023)



Developing heater units and enhancing production
capacity

Securing competitiveness through substantial
improvement of QCD
 Promotion of cost reduction through process
improvement and acceleration of development of
low-cost, long-life heating elements



Substantial reinforcement of production capacity,
including new factory construction

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20

Business Strategy - Next core business
EMC
Next corebusiness• Development and sale of anechoic chambers and radio wave absorbers
necessary for EMC tests*

Increase sales to • Provide extensively for the anechoic chamber, from design and construction
become coremanagement to after-sales services
business• Wide-range of customers including auto makers and electronic device manufacturers
Anechoic chamberRadio wave
absorber*EMC (Electromagnetic Compatibility) test: Test to confirm whether wave (noise) emitted by electronicequipment is not affecting other equipment and whether wave emitted by other equipment does not lead tomalfunctions for the equipment
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21

Business Strategy - Next core business
Basic policy
Sales expansion and improvement of added value of anechoic
chambers and reinforcement of related businessBusiness prospect

Business strategy

Sound business environment supported by market

Sales expansion of anechoic chambers andradio wave absorbers- Progress in CASE and development ofcommunications technology- Revision of industry’s related standards



Growing demand for construction of newanechoic chambers or renovation of existing ones↓
Growing demand for equipment related todemonstration measurements

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

Receiving orders for anechoic chambers mainly
from automotive industry (A full scale supply
including related facilities)
Proposing and receiving orders for maintenancebusiness and renovation work
Expansion of sales export
Developing technologies to get ahead of various
standards and new technologies

Promotion of new business Related equipment, countermeasure material,measurement service, etc.

22Business Strategy - Next core business
METAMOLDTM (*)
Next corebusiness

Increase sales tobecome core business• Metal injection molding (MIM) products applicable to parts
with complicated shape that are used in a wide range ofindustries including automotive, aerospace, industrial, andmedical equipment

Features of MIM products

Example of use: Information & communicationequipment, OA equipment, power tools, goods forleisure-time amusement, automobiles, precision
instrument & medical equipment, musicalinstrument etc.
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 Enable low-cost production ofparts with complicated shape Allow flexibility in design
 High-density and high-strength
Superb mechanical properties,
corrosion resistance, magnetic
properties
Allow various type of postprocessing
 High dimensional accuracy(*) METAMOLD is a registered trademark in Japan for metal
powder injection molding products of NPR.

23

Business Strategy - Next core business
Basic policy

Substantial enhancement of order-acquiring abilities

Substantial improvement of important requirements (speed, cost, quality, material proposal,
etc.)
Concentrate resources on specialty fields and build a sales force that dive deep into
customers’ needs
Preparation for sales expansion in overseas markets

Business prospects
FY 2023 annual sales of world’s MIM market:
About 4 billion dollars (about 590 billion yen)

Business strategy
Sale Efficient marketing customized forthe target
 Reinforced research for overseas
markets

CAGR (2018-2029): 10.7%
Source：Secondary Sources, Expert Interviews and QYResearch, 2023

Growing demand for molded parts in the medical
and defense industry that require high precision

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 Speeding up trial production andmass production
Development  Reinforcing new material
development structure& production
 Thorough cost reductions
 Strengthening collaboration withoverseas firms

24Business Strategy - Next core business
New product and new business
Next corebusiness

Increase sales tobecome core business Electric unit products
 Highly functional engineered
plastic products Noise countermeasure products
 Medical equipment products

Basic policy

Speeding up development through integration of
NPR-RIKEN technologies and expanding new
products and new business

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25

Business Strategy - Next core businessElectric unit products
Background ofdevelopment

Developed productsSuper flat actuator

3D pressed powder
magnetic core

■ Labor shortage will be a serious problem inJapan in 2025 onwards as aging of society
progresses.
■ Markets for industrial, nursing, and medical
robots and for small mobility equipment, areexpected to expand.

Resin strain wave gear

Axial gap motor■Keywords for development:
Small and lightweight
Small, flat actuators and lightweight strain
wave gear (metal → engineered plastic) are
under development.

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26

Business Strategy - Next core businessHighly functional engineered
plastic products
Background ofdevelopment

Developed products
Plastic gear

Compact actuator

Millimeter wave radar case

Inverter parts for electricvehicles■ Expansion of products utilizing NPRRIKEN’s experience in engineered plastic
products■ Expansion of markets for next-generation
mobility equipment, such as electricvehicles, and robots■ Keywords for development:
Lightweight and joining different materials
Utilizing technology to join different
materials together
Products that replace metal by engineered
plastic are under development
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27

Business strategy - Next core business
Noise countermeasureproducts
Background ofdevelopment■ Expansion of noise countermeasure products
by cultivating technology from EMC business

Developed products

Noise suppression
sheetRadio wave absorbing
sheet

Clamp nano crystal
core

Holder assembly core

■ Countermeasures against electromagnetic
interference is essential for autonomous
driving of automobiles and the spread of 6G
communication. Demand for materials withsuch measures is expected to expand.
■ Keywords for development:
Improved installation
Materials resistant to electromagnetic
interference that are easy to install aredeveloped.

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28

Business strategy - Next core business
Medical equipment
products
Background ofdevelopment■ Society of decreasing birthrate and aging
population, advanced medical treatment, andprogress in medical equipment■ Keywords for development:
Safe, secure bio-material
NiFreeT TM (*)■ Products that are to be embedded in a humanbody over a long period are under development.
MIM for medical use■ Medical equipment products for surgery areavailable at low price.

Developed products
NiFreeT TM

For cardiac
pacemaker

MIM for medical use

For
stent

3D molding

3D molding■ Application to medical equipment products
tailor-made for patients.
(*) NiFreeT: Original alloy made of titanium and tantalum etc. formedical use. Have high biocompatibility with nickel-free andnonmagnetic properties.
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29

Business Strategy - Creation of synergy
Early realization of business integration synergy
Sales synergy
Expansion of market share of existing
business• Utilize each others’ brand power• Utilize each others’ sales network• Expansion of product line-up
Providing various solutions• Aggregation of development, analysis,
and evaluation resources• Establishment of sales force that
proposes technologies• Applicable for hydrogen and alternative
fuelCreation and commercialization of new
products• Strengthening new productdevelopment structure• Integrating next core businesstechnologies• Shifting resources to new product fields

Cost synergy
Business divisions

1.4 bil. yen

Reduction of production cost

• Mutually complement each other’s
technologies• Integrate product specification• Pursuit cost reduction through production
technology integration• Procurement cost reductions through jointpurchases• Aggregation of logistic bases• Production optimization at domestic andoverseas bases

Management division

1.6 bil. yen
Corporate function integration

Synergy effect:

3 bil. yen/year
FY 2026 target:
Operating profit+ 3 billion yen/year

IT infrastructure integration
Reduction of other SG&A expenses

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30

Capital/Financial Strategy - Resource control
Promotion of strategic investment in growing areas and humaninvestment for new value creation
Strategic investment

Growthinvestment

Capitalinvestment

 Installing equipment with an awareness ofreinforcement of cost competitiveness Reducing investment due to optimization of
production system
 Active investment in CN-related projects
 Investment judgment based on capital cost

M&A

Research &development
(R&D)

Human
investment

 Reinforcement and expansion of businessportfolio Build a profit base for the future Differentiation of existing products and active
allocation to growing areas, such as new
product or business development
 Development and commercialization of low fuelconsumption technology, hydrogen engine, andbiofuel, which contributes to CN Shifting personnel to growing areas
 Conversion of human skill through re-skilling Human resource development and introductionof new system to reinforce DE&I* initiatives

Growth investment(including M&A)of 3
40 bil. yen *Total
years(Capital investment: 20.4 bil. yen
over past 3 years)of 3
15 bil. yen *Total
years*Strategic investment: 3 bil. yen(addition)*Ongoing base: 12 bil. yen
Improvement of employee
engagement.
Building an environment where
diverse people can play an active part
Ability development*DE&I: Diversity, Equity, & Inclusion

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31

Capital/Financial Strategy - Cash allocation
Appropriate allocation of generated cash for further growth andshareholder return
Cash outflow

Cash inflow
Asset sales(cross-shareholdings etc.)

3 bil. yen

Strategic investment

Operatingactivities
CF:
60 bil. yen

Return toshareholders:
20 bil. yen

 Stable and continuous return to shareholders
 Dividend payout ratio: 40% or more (currently
about 30%)
 Total payout ratio: 70% or more (average of 3
years)
 Purchase of treasury stocks: 10 billion yen

R&D: Up 3bil. yen Resource allocation to growing areas（3 billion yen rise from current level)

Growthinvestment






(capital
investment)(M＆A)

Expand business portfolio
Maintain and expand profit baseDX-related investment
Environment related investment to reduce CO2

40 bil. yen

Slated for midterm management plan period: FY 2024 to FY 2026
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32

Capital/Financial Strategy - Return to shareholders
Enhance capital efficiency and shareholder return, as returning profit
to shareholders is an important business issue

Basic
policyReturn toshareholders Continue providing dividend with stability, taking into
consideration the balance between investment for growth andimprovement of corporate value, and soundness of finance Conduct shareholder return including flexible purchase oftreasury stocks, while being conscious of capital efficiency andtotal payout ratio Dividend payout ratio: 40% or more (currently about 30%)
 Total payout ratio: 70% or more (average of three years,
currently about 30%)
DOE of around 3% in FY 2026
*Target period: FY 2024 to FY 2026

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33

Capital/Financial Strategy- Reform measures aimed at raising stock priceTo achieve PBR of 1 by improving ROE, reinforcing return toshareholders, and promoting sustainability management
Strategic
investment
・ Strategic capital
investment (newbusiness area,
rationalization,
decarbonization,
etc.)
・ R&D investment
・ M&A
・ Human capital

Profit growth
Improve investors expected growthrate・ Business portfolio reform・ Achieving sales target
・ Achieving targeted ordinary profit ratio
・ Improving profit through businessstrategy execution

Balance sheet optimization
・ Reducing inventory (reduction ofrequired working capital)
・ Asset sales and use of surplus funds
・ Use of interest-bearing debt
・ Operating with capital efficiency in mind

Reinforcing shareholder
return・ Stable dividend based on dividend
payout ratio of 40% or more・ Total payout ratio of 70% or more
(average of three years)(implement agile share repurchase)

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Improving
ROE/PER
ROE > Cost ofequityAchievingtarget ROE
of 8%

Improvingcorporate
value
Raising stock
price(PBR x1 or
more)

Promotion of sustainability
management(carbon neutrality, etc.)
Improvement of IR/SR
Continue to conduct dialogue with investors
and shareholder survey

34

Sustainability Management
Promote sustainability management to support sustainable growth ofcompany and society
Six major items for sustainability management
Environment

Reinforcement of carbon neutrality initiatives
Promotion of DE&I*

Society*DE&I: Diversity, Equity, & Inclusion

Contribution to local community
Governance

Humancapitalinvestment

Improvement of corporate governanceImprovement of employee engagement andhuman resource development strategy
Creation of safe and secure workplace

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35

Sustainability Management
Sustainability target (KPIs)
Item

Benchmarks●GHG emissions

Compared with FY 2013 result● Female manager ratio

FY 2022 results:
1.7% (domestic)
5.8% (consolidated)●Acquisition rate ofpaternity leave

FY 2022 result:
15.3% (domestic)● Ratio of those practicing
code of conduct(New code of conduct● Investment in humanresource development for
employees

FY 2026 target
Down 39% (consolidated)(2030: Down 51%)

3％ or more (domestic)
7％ or more (consolidated)
50％ or more (domestic)

established in FY 2023)

80% or more(consolidated)

Compared with FY 2022 result＋30％ (consolidated)

Target for employee engagement is to be set separately.
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36

Sustainability Management
Reinforcement of carbon neutrality initiatives
GHG emissions reduction target
Scope 1 & 2
2013
(BM)

Scope 32026
Down 39%
2030
2030
Down
Down 51%
51%
2050
Carbonneutrality
achieved

2013

2026

2030

Main measures to reduce total GHG
emissions

Change cupola to electric furnace

Renewal of facilities and equipment (to enhance efficiency)Introduction of solar power generation

Development of small wind power generation systemProcuring and switching to renewable energy

Purchase of green power certificate etc.



Utilizing J-Credit scheme (carbon offset)

Introduction of solar power
generation

Small wind power generation
system2050

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37

Sustainability Management
DE＆I*DE&I: Diversity, Equity, & Inclusion

Increasing female managers
ratio

Active employment of women

Reinforcement of training and promotion

Creation of workplace environment where

Improvement of paternity leaveacquisition ratio

Enriching various styles of workCreating an environment that is easier for
employees to take childcare leave

employees can live up to their full potential

Aim to make further improvement by 2030

Contribution to local community
Elimination of non-native plants
along riverbed(Mexico base)Supporting sports activities forpeople with disabilities

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Disaster recovery assistance38

Sustainability Management
Improvement of corporate governanceFurther reinforcement and expansion of governance structure to
improve corporate values
Thorough compliance
Code of conduct of NPR-RIKEN grouptranslated into six languages and distributed to
employees at all bases.
Ensuring thorough compliance through regulartraining
Structure of board of directors that
ensure diversity
To ensure diversity, increasing the ratios of outside directors andfemale/foreign directors is under consideration.
Current ratios(as of February 2024)

Outside directors: 38％
Female directors: 8% (foreign directors: 0)

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39

Sustainability Management
Improvement of employee engagement and human resource
development strategy
Indexes suitable for NPR-RIKEN will be set from the various viewpoints ofmotivation, awareness of contribution, and psychological safety with goals set as
early as possible.
Human resource portfolio
linked with businessstrategy

Building a corporate culture

Supporting proactive,
independent careerdevelopment

where people can takechallenges

DE＆I

A new system isunder consideration*DE&I: Diversity, Equity, & Inclusion

Creation of safe, secure workplace
Creation of safe, secure workplaces where every employees can work vigorously
and lively
Promote health and productivity management, promote education on safety, and improve work environment
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40

[Notes on descriptions regarding the future]
The prospects and strategy written in this document are based on thepresent business environment, and the actual performance may differ if thebusiness environment changes in the future.

*This document is a translation of the Japanese original.
If there are any discrepancies between this document and the Japaneseoriginal, the Japanese original will prevail.