FY2023 Financial Results
Tokyo Stock Exchange Prime Market (Securities Code: 7294)

Tsutomu Hiranaka
President & COO
Note:
This is an internal English translation of the Report originally issued in Japanese, created for the convenience of English-speaking readers.
In case of any discrepancies, the Japanese version will take precedence.

Ⅰ. Financial Summary
Ⅱ. FY2023 Results
Ⅲ. FY2024 Forecast

Contents

Ⅳ. New Medium-Term Business Plan
Ⅴ. Shareholder Return(Explained in the new medium-term business plan)

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Ⅰ. Financial Summary

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Financial Summary
FY2023 Results
・Both sales and profits increased and the increase in operating income was 1.4 times YonY, thanks to arise in sales and streamlining efforts.
・Net income fell short due to an impairment loss of 11.8 billion yen related to Chinese market.
・Our financial standing remains stable, supported by properly-planned fundraising strategies.

FY2024 Forecast
・Under the current market trend, consistent production volume at major customers YonY is expected.
・Streamlining efforts will contribute to consistent operating income YonY despite of YSMC* launch costs.
・As we embark on the first year of the new medium-term business plan, we are determined to achieve targets.
* YSMC stands for Yorozu Sustainable Manufacturing Center.

Shareholder Return
・Dividend per share paid at the end of FY2023: 17 yen (+2 yen from the previous announcement)
・Annual Dividend per share paid in FY2023: 30 yen (+5 yen from FY2022)
・Annual Dividend per share planned in FY2024: 31 yen with a dividend payout ratio of 72.0%

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Ⅱ. FY2023 Results

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FY2023 Consolidated Financial Summary (Year-on-Year)
Million yen

FY2022

FY2023Year-on-YearFY2023
Latest Forecast*2

Against Latest
Forecast

160,560

181,468+13.0%

181,000+0.3%

Operating Income

3,088

4,459

+44.4%

3,200+39.3%

Ordinary Income

2,992

4,517

+51.0%

3,200+41.2%Net Income*1

1,422(3,926)--(6,500)

--

Sales

*1

FY2022ANet Income per Share
Exchange Rate Applied

Net income attributable to parent company shareholders *2 Estimated figures as of March 22, 2024

FY2023B

Difference
B-A

59.00 yen(162.07) yen(221.07) yen

131.62 yen/$

140.66 yen/$+9.04 yen/$

Percentage
of Change-+6.9%

 Sales increased attributed to positive impact of higher steel prices and weakening of yen, in
addition to market recovery.
 Operating income witnessed growth thanks to the recovery in production volume in Japan and theAmericas as well as suppressed fixed costs.
 Ordinary income increased as a result of the rise in operating income.
 Net income experienced a decline due to an impairment loss incurred by consolidated subsidiaries.
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Consolidated Sales by Customer (FY2022 vs. FY2023)
200,000

Million yen

181,468
160,560
150,000+3,459（+26.7％）

ToyotaToyota-3,606（-14.3％）

Honda+21,030（+21.4％）

Honda
100,000

NissanNissan50,000

Customer

FY2022

Nissan Gr.*(%)

FY2023(%)

98,112

61.1%

119,14265.7%

Honda Gr.

25,234

15.7%

21,628

11.9%

Toyota Gr.

12,9498.1%

16,4089.0%

Isuzu Gr.

7,814

4.9%

8,181

4.5%

Mazda

3,498

2.2%

4,024

2.2%

VW

2,391

1.5%

3,040

1.7%

Kubota

2,626

1.6%

2,597

1.4%

Mercedes Benz

2,386

1.5%

2,088

1.2%

Suzuki

2,319

1.4%

1,763

1.0%

Subaru

1,418

0.9%

1,722

0.9%

Others

1,813

1.1%

875

0.5%

Total

160,560

100.00%181,468

100.00%* Includes sales to Renault and Mitsubishi

Sales from numerous customers showed a YonY increase.
Notable growth was observed from Nissan & Toyota.

0

FY2022 actual

FY2023 actual

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Analysis of Impact on Consolidated Operating Income (FY2022 vs. FY2023)
Million yen
Expensesfor further
growth701
2,023

Dies andequipment

1,400

Decreased
units in China

1,567

Streamlining
and recovery

632

Others

581

2,827
Sales
increase

3,088
3,088

Transienteffect in
FY2022

Operating income(+1,371）

FY2022 results

4,459

FY2023 results

Operating income has seen an increase, benefiting from a rise in sales, steady
accumulation of streamlining efforts, and recovery of energy costs, etc.
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Sales and Operating Income by Region Before Consolidation Adjustment (FY2022 vs. FY2023)◆Sales120,000

Million yen

Japan

The Americas

Asia+16,725+32.9％+19,379+33.3％(9,895)(16.7)％

77,63367,62280,000Difference% of Change

59,25258,25450,89749,35740,0000◆Operating
Income8,000(83)(5.1)％(177)--％+3,895+170.5％
6,180
2,285

4,000

1,622

1,539

FY2022

FY20230(4,000)

FY2022

FY2023(1,152)(1,329)FY2022

FY2023

Japan: Sales and profits increased, driven by the rise in production in core business and dies & equipment, alongside effective
cost recovery offsetting the hike in costs.
The Americas: A rise in production and favorable FX rates increased sales while profits dropped due to new model launch costs.
Asia: We faced challenges with a decline in both sales and profits due to a decrease in production volume.
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Financial Standing for the Year Ended March 31, 2024
(Million yen）

Mar. 31, 2023 A

Net Worth
Equity Ratio

Mar. 31, 2024 B

63,63066,070

45.0%

46.4%

Difference (B-A)
2,440
--

3.8%
--

Interest-bearing Debt

D/E
ratio

0.52

32,8350.51

33,389554

1.7%

Net Interest-bearing Debt

Net D/E
ratio

0.14

9,217

0.17

11,102

1,885

20.5%

142,257746

0.5%

141,511

Total Assets(Million yen）

FY2022
Full Term A

FY2023Full Term B

Difference (B-A)

Cash Flow from Operating
Activities

2,924

12,531

9,607

328.6%Cash Flow from Investing
Activities(5,164)(11,851)(6,687)--

Cash Flow from Financing
Activities(4,819)(1,741)

3,078--

D/E ratio remains stable based on the properly-planned fund raising.
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(Reference) Consolidated Balance Sheet Summary for the Year Ended March 31, 2024

Million yen

Mar. 31, 2023
A

Mar. 31, 2024
B

Current Assets

72,58275,373

2,791

Fixed Assets

68,92866,884(2,044)

Total Assets

Difference
B-A

Cash & bank deposit(1,330)Notes & accounts receivable
Inventories
Other current assets

4,583(1,555)
771

Tangible fixed assets(4,515)Investments and other assets

2,448

Notes and accounts payable
Electronically recorded
obligations
Short-term debts
Long-term debts due within 1
year
Others647

141,511142,257

746

Current Liabilities

44,39349,815

5,422

Fixed Liabilities

19,677

16,949(2,728)64,071

66,764

2,693

62,961

58,394(4,567)

Other Accumulated
Comprehensive IncomeLong-term debts
Others(3,599)
923

668

7,676

7,008

Non-controlling Interest,

Net income
Dividend payment(3,926)(749)

13,8099,421(4,388)

Total Net Assets

77,43975,493(1,946)

Total Liabilities and Net Assets

141,511142,257

746

Total Liabilities
Shareholders’ Equity

etc.

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Other securities valuationdifference
Foreign currency translation
adjustment

404
7,621
(2,875)
(604)

1,658
5,161

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Ⅲ. FY2024 Forecast

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Consolidated Financial Forecast Summary for FY2024
Million yen

FY2023
Actual A

Sales
Ratio

FY2024
Forecast B

Sales
Ratio

Difference
B-A

Percentage
of Change

181,468

100.0%

180,000

100.0%(1,468)(0.8)%

Operating Income

4,459

2.5%

4,500

2.5%

+41

+0.9%

Ordinary Income

4,517

2.5%

2,750

1.5%

(1,767)(39.1)%

1,050

0.6%

+4,976--Sales

Net Income*1(3,926)--*1 Net income attributable to the parent’s shareholders

FY2023 ActualA

FY2024 Forecast
B

Difference
B-A

Percentage
of Change---

Net Income per Share(162.07) yen

43.04 yen＋205.11 yen

Exchange Rate Applied

140.66 yen/$

140.00 yen/$(0.66) yen/$(0.5)%

 Sales will remain stable YonY, given the non-transparent market environment.
 Operating income will remain at the same level YonY despite YSMC launch costs.
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Consolidated Sales by Customer (FY2023 Results vs. FY2024 Forecast)
200,000

181,468

180,000-1,390（-6.4％）

160,000

Honda
120,000

Million yen

ToyotaHonda
Toyota+5,388（+32.8％）-2,692（-2.3％）

Customer

FY2023

Nissan Gr.*

119,142

Toyota Gr.
Honda Gr.

Nissan40,000

FY2024(%)

65.7%

116,450

64.7%

16,4089.0%

21,796

12.1%

21,628

11.9%

20,238

11.2%

Isuzu

8,181

4.5%

5,010

2.8%

Mazda

4,024

2.2%

4,410

2.5%

VW

3,040

1.7%

3,559

2.0%

Kubota

2,597

1.4%

2,430

1.4%

Mercedes Benz

2,088

1.2%

1,915

1.1%

Suzuki

1,763

1.0%

1,715

0.9%

Subaru

1,722

0.9%

1,641

0.9%

Others

875

0.5%

836

0.4%

Total

181,468

100.00%180,000

100.00%80,000

Nissan(%)*Includes sales to Renault and Mitsubishi

Notable growth is expected in sales to Toyota.

0

FY2023 actual

FY2024 forecast
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Analysis of Impact on Consolidated Operating Income (FY2023 Results vs. FY2024 Forecast)Million yen

YSMC
launch costs

75
1,648

Dies andequipment, etc.

2,112

Decreased
units in China

818
Streamlining
efforts320
Sales
increase

4,500

4,459

Operating income (+41）
FY2023 results

FY2024 forecast

Operating income will remain stable YonY with steady accumulation of
streamlining efforts and recovery of energy costs, etc.
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Sales and Operating Income by Region Before Consolidation Adjustment(FY2023 Results vs. FY2024 Forecast)◆SalesJapan

The Americas

Asia

Million yen(6,216)(9.2)％+7,374+9.5％(7,796)(15.8)％

Difference% of Change

120,000

80,00067,622

77,63385,007

61,40649,357

41,56140,0000◆Operating
Income
8,000(3,683)(59.6)％+1,661--％(439)(28.5)％

6,180

4,000

2,497
332

1,539

1,100

FY2024FY2023

FY20240(1,329)(4,000)

FY2023

FY2024FY2023

 Japan: A decline in both sales and profits is expected due to a drop in sales of dies & equipment and YSMC launch costs.
 The Americas: A rise in both sales and profits is expected thanks to an increase in production volume.
 Asia: A decline in both sales and profits is expected due to a decrease in production volume.
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Capital Investment and Depreciation
Capital Investment by Region

Depreciation by Region

25,000Japan

The Americas

Japan

Asia

The Americas

Asia

20,00015,17915,00012,931
10,246
10,000

9,880

9,814

8,903
7,219

5,000

8,165

6,997

3,367

0

Million yen

FY20

FY21

FY22

FY23

FY24

FY20

FY21

FY22

FY23

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FY24

16

Ⅳ. New Medium-Term Business Plan
Becoming the “Company of preferred choice” for all stakeholders

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1. Review of the Previous Medium-TermBusiness PlanYSP2023—Yorozu Sustainability Plan 2023

Agenda2. New Medium-Term Business PlanYSP2026—Yorozu Sustainability Plan 2026
1) What We Aim to Be and Management Policy
2) Performance Targets

3) Basic Policy and Key Strategies

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1. Review of the Previous
Medium-Term Business PlanYSP2023

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Financial Summary【Overview】
経営方針
Despiteour efforts on resilient management, external factors prevented us from meeting thetargets for operating income ratio and return on equity (ROE).
・ Sales successfully surpassed the target.
・ Operating income ratio fell short due to significant increase in material, resource, and energy costs.
・ Similarly, ROE was impacted by a net loss resulting from an impairment loss on fixed assets.
Operating Income Ratio

Sales
Initial target for FY2023
150 bil. yen

FY2023 actual

Revised target: 160 bil. yen 181.4 bil. yen

127.3

2021

160.5

2022

Initial target for FY2023

5.0%
Revised target: 2.0%

FY2023 actual

2.5 %

181.4

2023

1.6%

1.9%

2021

2022

ROE
Initial target for FY2023

8.0%
Revised target: Nil
1.6%

2.4%

2021

2022

FY2023 actual

Not achieved

2.5%
2023

2023

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Summary of the Strategies (Results)

ESG
Management

We successfully built and paved the way for our growth strategy by prioritizing ESG management, specificallyfocusing on CN initiatives related to climate change measures, adopting new technologies and methods for
EVs, and strengthening our global sales expansion.
Basic Policy

Review and Analysis

Rating

E: Environmental●Surpassed the targets outlined in CN roadmap with proactive disclosure practices

Good

S: Social●Enhanced employee engagement, acquired Platinum Eruboshi, Kurumin, andHealth & Productivity Management Outstanding Organization certificatesGood

G: Governance●Overcame challenges to meet the listing standards for TSE Prime Market

Fair

DX promotion●Implemented individual improvement consistently

Fair

Stable profits●Increased investments in new model launches●Significant divergence occurred between customers’ required volume and our
production capacity in the Chinese market

Fair

New technologies
and methods●Developed innovative lightweight techs with patented products for sales growth●Commenced “collaboration” in development

Good

Sales expansion●Construction completed and operation started at YSMC*●Received orders for EV parts from a diverse range of customers

Good* YSMC stands for Yorozu Sustainable Manufacturing Center.
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Summary of the Strategies (Issues)

Basic Policy

RatingIssues pending fromYSP2023

Category ofpendingactions

In relation to
the New Medium-Term Plan

Good

Fall behind the position as thefrontrunner in comparison

Strengthen

Maintain our “advantages” and support businessactivities

S: Social

Good

Lack of group-wide measures

Go in-depth

Develop individuals and the organization with avision for future social and business structureG:
Governance

Fair

Delay in strengthening financial
strategies

Go in-depth

Respond to demand from stakeholders

DX promotion

Fair

Delay with Horizontal-DX (H-DX)

Recover

Stable profits

Fair

Delay in responding to market andbusiness changes

Go in-depth

Manage the plants with structural reform in mind

New technologies
and methods

Good

Difficulties in creating unique
technologies and new products

Strengthen

Dare to challenge the possibility of expanding
technologies rather than sticking to in-houseproducts and development

Sales expansion

Good

No significant changes in customer
composition

Strengthen

Strengthen business foundation through sales toa diverse range of customers

ESG Management

E:
Environmental

Recover through application to YSMC (model
factory)

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2. New Medium-Term Business PlanYSP2026—Yorozu Sustainability Plan 2026

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231) What We Aim to Be andOur Management Policy

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What We Aim to Be
April 2024▼∥

YSP2023

A “Company resilient tochanges” through sales
expansion and stable profits
with new technologies andmethods based on ESG
management
Management reform (E,S, and G)
Build and pave the way
for our growth strategy▼

YSP2026

Aim to become the “Company ofpreferred choice” for all stakeholders
that supports the age of electrification bytaking an aggressive approach toward
growthMonozukuri reform

Business reform

2040▼

VisionDesire
to be

Aim
to be

Now

2030

March 2027▼

A Company that has earned
the “long-lasting trust” of all
stakeholders by providing “safety,
security, and comfort” of mobility on a
global scale and with best quality

Human talent development

Commit to decarbonization
Implement strategies and strengthen management
and business foundation
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Corporate culture reform

Lead in decarbonization
Build a resilient management/business foundationthat contributes to electrifying the society
25

Management Policy
To become the “Company of preferred choice” for all stakeholders that supports
the electrification era by fulfilling the duties and responsibilities as a member ofsociety and taking an aggressive approach toward growth
Enhance
corporate value

Economic value

Maximize
the two values

Social value

Strengthening of ourbusiness foundation

Strengthening of ourmanagement foundation

Growth and profitability

Overall optimization

Integration

S (society and individuals)
G (governance)

E (environmental)

Financial strategies

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262) Performance Targets

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Performance Targets

Metrics

FY2023 Results

FY2026 Targets

GrowthSales

181.4 billion yen

210.0 billion yen

Profitability

Operating income
ratio

2.5%

4.5%

Efficiency

ROE

–

8.0%

Prerequisite

Exchange rate

140.66 yen

140.00 yen(USD/JPY)

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283) Basic Policy and Key Strategies

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Basic Policy—To become the “Company of preferred choice” for all stakeholders—
Economic value

Social value

Strengthening of Our Business Foundation

Strengthening of Our Management Foundation

Integration of E (environmental) managementand “growth and profitability”

Overall optimization

Creation of new technologies and methods,

1 and sales expansion■ Development of new technologies that contribute to decarbonization and creation of new values through collaboration■ Expansion of sales to a diverse range of customers

2 Improvement of profit structure■ Maximization of profits from new model launches■ Analysis on production site reforms based on customer
production trends in each region

S: Society and individuals

4 —improvement of engagement■ Promotion of health and productivity management■ Implementation of DE&I

5 G: Enhancement of governance■ Strengthening of governance and compliance■ Compliance with appropriate business practices

Monozukuri with our weapon
3 E:—environmental performance

6 Financial strategy■ Continuous efforts for decarbonization in production■ Establishment of a smart factory■ Shareholder return■ Cross-shareholdings

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Strengthening of Our Business Foundation(1) Creation of New Technologies and Methods,
and Sales Expansion■Development of new technologies that contribute to decarbonizationand creation of new values through collaboration■Expansion of sales to a diverse range of customers

Copyright © YOROZU Corporation31

Development of New Technologies That Contribute to Decarbonization
and Creation of New Values Through Collaboration【Strategy 1】 Undertake the challenge of refining our lightweighting technology and expanding the range of our products
The need for uncompromising lightness
and stiffness of suspensions exists
even in the era of electrification

Ultra-hightensile strength
980MPa1180MPa

Application to varied products

New structure

Materials

New stamping
structure

Lighter
Alternative materials
Higher Stamping difficulties
stiffness
Ultimate
designResin

AluminumInterior products

Welding of castings andwrought materials

Arm with a newstamping structure

Unibody
structure

DesignOptimized
structure and method

Ultra-high-tensilematerials

980MPa/1180MPa
Challenge the limit of steel
Different-thickness
structure

780MPa→980MPa

Collar-less

Performance analysis

Different-thickness stamping

Manufacturing
Co-simulation inengineering Optimize

manufacturing process

Beam

Light-weight + cost cut

ArmStamping analysis

Difficulties in stamping
ultra-high tensile materials

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Development of New Technologies That Contribute to Decarbonization
and Creation of New Values Through Collaboration【Strategy 2】 Increase a product’s added value through collaboration
Suspension
memberYorozuSuspension arm

Our expertisein suspension
products
Design/performance analysis
prototype/testing

Full-curlmethodTailoredblank

Business
partners
Material makers

Synergy

Steel makers＋

Core elemental
technology
Press forming/welding
painting/assemblyPart makers ofother industries

Highprecision
weldingtechnique

Inverter

Motor

Transmission

Products with added value for EVs
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(Topics)

Ultra-light weight LOWER ARM jointly developed with Mazda Motor Corporation joins car race
May 24 - 26
ENEOS Super Taikyu Series 2024
Empowered by BRIDGESTONE
FUJI SUPER TEC 24-hour Endurance Race Round 2

Lighter &higher stiffness

23％
lighter

MAZDA SPIRIT RACING
MAZDA3 Bio concept

Ultra-hightensile strength

Durable vehicle that runs on 100% next generation biodiesel
fuel made from hydrotreated used vegetable oil (HVO)(compared to current
product)

Hot-rolled
980MPa thinsheet materials

New structure
Stamping
difficulties

used

New type ofHigh-Argon welding Successful application
adopted・Greater weld strength・Higher resistance tocorrosion

Collaboration

to Lower Arm

Ultimate design

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Development of New Technologies That Contribute to Decarbonization
and Creation of New Values Through Collaboration【Strategy 3】 Develop innovative products for the emerging OEMs of EVs

Actions for the continuously growing EV market【Development strategy】

EV●Create a product catalog
Evolution of
the existing
technologies

Needs of the emerging EV OEMs

●Improve analysis prediction
accuracy●Reduce the period for
production preparation

Super low cost andsuper speedy development

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35

Expansion of Sales to a Diverse Range of Customers【Strategy 1】 Expand sales of EV products for major customers
Nissan, Mitsubishi, Renault (Nissan Gr.)

Toyota (Toyota Gr.)Customer

Sales expansion policy

Nissan/Mitsubishi

Deepen partnership with customer

ToyotaEstablish a solid supply system toexpand sales of EV products

Honda

Participate in next generation vehicle
projects with new technologies/methods

Nissan & Honda

Explore new opportunities throughcollaboration with customers (TBD)

YSMC
Y-OitaY-Tochigi

Honda

Japan
G-YBM
W-YBM

U.S.

China

YMEX
YAGM

Consolidated sales composition

Toyota Gr.

Nissan Gr.

YAT
YAA

MexicoToyota Gr.
9% → 15% or more

Nissan Gr.
Toyota Gr.

60%

55％

<Target: Up 6% or more>
FY2023

FY2026
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Expansion of Sales to a Diverse Range of Customers【Strategy 2】 Venture into new business areas“Establish the foundation” for future growthby addressing new business areas beyond the automotive sector

Non-automotive products

External sales of production equipment

Make products for construction machinery
using over 20 mm thick sheet materials

Develop new businesses by enhancing ourcompetitiveness and technologies(Stamping/welding)

Copyright © YOROZU Corporation37

(2) Improvement of Profit Structure■Maximization of profits from new model launches■Analysis on production site reforms based on customer production trends
in each region

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38

Maximization of Profits from New Model Launches【Strategy 1】 Establish an organizational structure focused on maximizing profits
Enhance CAPDo (C→A →P→Do) cycle through the collective efforts of five departments
M&S/Design/Manufacturing Engineering
Production site/Project Control

・Make use of the cost consolidation
system for lifetime management Mass
productionof project revenue
・Grasp market trends andCheckcustomer needs
・Identify the issues in mass production
projects

・Ensure that the QCDD planis implemented

Advancedevelopment

ActionProduction
preparation

Product
development

Do

Plan

Copyright © YOROZU Corporation

・Stay ahead of customers’ needs
and work on new technologies,
new methods, and lightweighting
・Consider reflecting added value
to the selling price・Be cost conscious and make
optimal investments in a
project’s upstream stage
・Ensure that feedback frommass production projects is
effectively utilized39

Maximization of Profits from New Model Launches【Strategy 2】 Enhance the development of dies and equipment
Reduce the lead time fordie preparation by 40%

Largely improved
initial quality

Strengthened
die production
control

Maximized
die module
structure

Jidoka concept for next generationassembly lines

In-house control
of welding
distortion

・Clarification of issues and the direction to take・Higher versatility and reusability(for next generation models and beyond)Lead time—from designing to shipping
FY202330% reduction in
New model investment– 40%

FY2026

Space required
Manufacturing costs
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Analysis on Production Site Reforms Based on Customer Production Trends in Each Region【Strategy】 Rebuild future strategies through careful monitoring of profits earned at each production site
Production load in regions with multiple plants(compared with FY2019)

Japan
FY19

FY23

FY23

Global

China
FY26

FY19

U.S.
FY19

Consider optimization inregions where multiple plants
are located

FY23

FY26

Mexico
FY26

FY19

FY23

FY26

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More than
one plantin theregionPlan/actualandload balancemonitoring

Only oneplant in theregion41

(3) E: Monozukuri with Our Weapon—Environmental Performance■Continuous efforts for decarbonization in production■Establishment of a smart factory

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Continuous Efforts for Decarbonization in Production【Strategy 1】 Accelerate CN targets to maintain our position as the frontrunner
YSP2023

CO2 emissions
reduction target

YorozuSupplier(Scope 2+1 vs. FY2013)

▼

▼

19％

▼

Toward 2030

YSP202640％(actual）

2040

2030

March 2027

▼

▼

∥

April 2024

May 2021

60％

100％

Scope３Collaboration with suppliers (based on their action plans)Material purchase
Scope2All domestic sites

Electricity

YSMC

Collaboration with Wanouchi town

Green power
Solar generation

Overseas sites

Scope1

CustomerFuelYSMC becoming CN

Existing sites adopting diverse fuels New fuels

Scope３

Lightweight product development + acceleration of EV product order receipt
Product use

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Continuous Efforts for Decarbonization in Production【Strategy 2】 Promote decarbonization in Scope 2 (electricity) and Scope 1 (fuels)YSP2023（Actual）

YSP2026（Target）

Toward 2030
（Target）

19%

40％

60％

19%

39%

57%

Scope1(Fuels)-1%

3%Reduction
Scope
2+1
Scope2Global(Electricity)

Japan

Scope2

63%

100%

←

The Americas

Scope2

21%

36%

72%

Asia

Scope2

9%

32%

46%

Promotion mainly in Japan

PolicyShift to overseas

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Establishment of a Smart Factory【Strategy】 Realization of a model factory at YSMC
DX
Concept

H-DX

Drastic reduction of lead time

(Horizontal)

Collaboration with digital technology to optimize monozukuri process
Total Production System

Outstanding efficiency
in operations

Market survey
Technologicaldevelopment

Order
receipt

Product design
Prototyping
Testing

ProcesssettingDie &equipment
fabrication

Production

Qualityassurance

Shipment

Digital simultaneous process

Big Data ⇒ Visualization & Analysis ⇒ AI
Management
Planning

V-DX (Vertical)

HR & General
Affairs

Finance &Accounting

Cost
Management

Digital transformation in each segment

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Purchasing

Internal Audit

A2D (Analog to Digital)
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Establishment of a Smart Factory【Strategy】 Realization of a model factory at YSMCMarch 2027▼▼▼

YSP2023

H-DX (Horizontal)

IoT/Sensing
Team 1 【Pre-production reform】

A2D (Analog to Digital)

Monozukuri lead time
reduction

Centralized control of costand schedule system setup

Team 2 【Factory reform】

Smart factory

A2D (Analog to Digital)
IoT to see facility status
Digitally controlled factory

Team 3 【Back office reform】

Indirect work reform

A2D (Analog to Digital)
Efficiency in operations
through digitalization∥

April 2024

April 2021

YSP2026

Accumulation of big data/Deep learning

Visualization/AI analysis and projection
Centralized control ofdevelopment data

Realized at YSMCProfit control
Development time control

Centralized "updates" on- production readiness- actual production, and- company management

Centralized control ofplant data
Internal information sharing anddecision making

Communication flow
Database standardization

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It provides clear visibility
for rapid decision
formulation andexecution.

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Strengthening of Our Business Foundation(4) S: Society and Individuals—Improvement of Engagement■Promotion of health and productivity management■Implementation of DE&I

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Improvement of engagement
Company of choice, where everyone feels“I want to continue working at this company” and ”I’m happy to work here”

Improvement of Engagement

Empowerment
Health andproductivity
management

Fostering

DE&I

Hiring
Corporate philosophy and culture

Management and HR strategies

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Promotion of Health and Productivity Management【Strategy】 Create a healthy and engaging workplace

Fostering a healthy and engaging workplace thatempowers every member of Yorozu Group

Employeeengagement reform

Support for healthpromotion

Vibrant workplace
for allWork system

Health awareness promotion

Communication channels

Sense of accomplishment

Lifestyle disease prevention

Stress reduction measures

Enrichment in life

Early detection and treatment

Supportive work environment

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Implementation of DE&I
【Strategy】 Establish a work environment where everyone can fully demonstrate their potential

Yorozu’s DE&I
STEP
１

Building a diversity strategy

STEP
２

Advancing a diversified way of work

Improvement in
the rate of male
employees taking
childcare leave

Diversity
STEP
３
EquityInclusion

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50(5) G: Enhancement of Governance■Strengthening of governance and compliance■Compliance with appropriate business practices

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Strengthening of Governance and Compliance

CSR Activity

Board of Directors
ReportDepartments(Outside Directors,
Nominating and Compensation Committee)

SuperviseRisk, Compliance, Human Rights DD Committee, etc.

① Governance② Compliance③ Risk management

 Effectiveness of the BOD
 Communication withshareholders

 Basic Policy on Internal Control(Design and operational
effectiveness of the system)
 Human rights due diligence Appropriate business practices

 Top eight risks

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Strengthening of Governance and Compliance【Strategy】 Ensure effectiveness of the BOD and foster better communication with shareholders

1

Proactive involvement of Outside Directors

2

Evaluation of the BOD from an outsider’s perspective andformulation of plans aimed at enhancing effectiveness

Enhanceeffectivenessof the BOD

Communication
withshareholders

3Composition of the BOD based on the growth strategy

1Enhancement of IR and SR

2

Resuming the plant tour for shareholders
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Strengthening of Governance and Compliance【Strategy】 Promote human rights due diligence
Human rights due diligence process*Compliant with OECD Due Diligence Guidance① Formulation/disclosure of Human Rights Policy② Remedy③ Monitoring④ Identification of potential risks⑤ Identification and assessmentof impacts⑥ Corrective action⑦ Prevention/mitigation

To be addressed
not only in ourown company but
also in the entire
supply chain⑧ Information disclosure

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Compliance with Appropriate Business Practices【Strategy】 Ensure fair pricing practices
Maintain competitiveness and ensure sustainable growth of the entire supply chain
through fair pricing

Customer Review prices for appropriate selling priceSwiftly pass on the costs reflecting the market
conditions and labor/social costs to the price Review prices for appropriate purchasing
・Comply with laws and regulations
・Discuss with suppliers on a regular basis

 Invest in securing talentand the measures forshojinka (manpower saving),
DX, and carbon neutrality
 Propose and supply
competitive products

Supplier
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(6) Financial Strategy■Shareholder return■Cross-shareholdings

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Basic Idea and Key Strategies
We strive to drive sustainable growth and enhance our corporate value through effective allocation of ourmanagement resources by improving our ability to generate cash flow and heightening capital efficiency.

Improved profitability
Investment for growth

Heightened capitalefficiency
Slimmed balance sheet

Increase in

PBR

Shareholder return
Stable and sustainabledividend payment

YSP2026 Targets
Higher profitability

Operating income ratio

4.5％

Higher capital efficiency

ROE

8.0％

Shareholder return

Dividend payout ratio

35% or above

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Shareholder Return【Strategy】 Return policy in appreciation of shareholders’ support
 Dividend policy
To maintain a dividend per share of at least 31 yen, aiming for a dividend payout ratio of 35% or higher

 Share repurchases
To buy back our own shares agilely and appropriately, considering other investment targets, the level ofcash on hand and bank deposit, business performance, etc.
Dividend per share (yen)Dividend per share
Consolidated dividend payout ratio

53

51

10.2%

2013

ActualForecast

59

58

46

26
20.1%

271.5%

35.5% 35.4%

25

51.6%

25
13

30

31
72.0%

13
35.6% 42.4%

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

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Cross-Shareholdings【Strategy】 Set a reduction target for cross-held shares Cross-shareholding policy• We will hold the shares only for the purpose of strengthening the ties with our suppliers
and only if it is considered necessary for the operation of our business and is expected
to contribute to enhancing our corporate value.
• The significance of cross-shareholding will be comprehensively assessed from theperspectives of feasibility, profitability, and holding risks. Should any of such shares lose
its significance as cross-held shares, we will consider disposing of such shares.

 Reduction target
Quantitative value

Reduce by 10% within the current medium-term plan(based on market value as of the end of March 2024)
Funds acquired through selling of the cross-held shares will beappropriated to buy back our own shares.
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—To become the “Company of preferred choice” for all stakeholders—

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Disclaimer and Copyright
The financial forecasts, future forecasts, strategies and other statements in thismaterial are established based on judgments made within reasonable forecasts,
according to the information available to the company at the time this material was
prepared. However, there are risks and uncertainties in these forecasts, which could becaused by any special circumstances and situations that cannot be foreseen. Therefore,
actual results may differ substantially from these forecasts.
The company is fully committed to disclosing all information that we believe important
to investors. However, please refrain from making decisions based solely on these
forecasts and statements contained in this material.
It is strictly prohibited to reproduce any part of this material in any form, including
photocopying or forwarding, for any purpose without the prior consent of the company.
●Contact
Yorozu Corporation
Person responsible: Norio Hirano, Member of the Board (EVP & CFO)
Contact personnel: Manabu Ozawa, Accounting Group Manager, Accounting Dept.
TEL 045-543-6802
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Copyright © YOROZU Corporation