Translation – Original text in JapaneseMedium-Term
Management Plan
Chori Innovation Plan 2025
(CIP2025)~FY2023-FY2025~

April 28, 2023

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Medium- to Long-term Initiatives
Corporate Philosophy
Chori’s History

VISION2030: The Company We Aspire to Be
Chori Innovation Plan 2022 Progress of KPIs
Chori Innovation Plan 2025 KPIs
Positioning and Background of Chori Innovation Plan

蝶理株式会社 CHORI CO., LTD.

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Medium- to Long-term Initiatives

Corporate Philosophy

Corporate Philosophy
As members of the global community,
we will work for the betterment of society.
We take pride in being fair and sincere,and in continuing to offer superb service
in order to deliver superior customer satisfaction.

Corporate Slogan(We are) Making your dreams come true

蝶理株式会社 CHORI CO., LTD.

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Medium- to Long-term Initiatives

Chori’s History
Solid management since the formulation of the Reborn Management Plan in 2003
Global business development centered on the Fibers, Textiles, and Garments
Business, Chemicals Business, and Machinery businesses(Billions of yen)

2021

200

Makes STX Company Limited a subsidiary
Reaches ¥10.0 billion in ordinary profit

2003
180

160

Launches the Reborn Management Plan
⇒ Focuses on structural improvement
and core businesses

2015(The Company
We Aspire to Be)

Makes Miyako Kagaku Co.,
Ltd. a subsidiary in alarge-scale M&A

1991
Bubble economy bursts⇒ Falls into a deficit;
Net sales of ¥755.5 billion
120(record high), but large losses infinancing and real estate

Achieving
VISION2030

140

2004

Becomes a
consolidated
subsidiary of
TORAY
INDUSTRIES, INC.

100
80
60
40

2014
Relocates Tokyo
head office toShinagawa

1974-1975

Furtherbreakthroughs
toward 2030

Oil crisis
Falls into a deficit

1948
Established20
Ordinary profit
0
A Period of Growth

1948

1975

A Period of Breakthrough Resultsand Leaps Forward

A Period of
Setbacks

2003

A New Stage2017
蝶理株式会社 CHORI CO., LTD.

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Medium- to Long-term Initiatives

VISION2030: The Company We Aspire to Be

Sustainability
A company that can coexist
in harmony with society andcontribute to the realizationof its sustainable andprosperous future.

Well-being

VISION 2030
The Company
We Aspire to Be

A company that contributes
to the well-being of eachstakeholder and provides
employees with a rewardingand enjoyable workplaceenvironment.

Net Sales¥400.0 billion

Innovation
A company that canconstantly generate higher
levels of profit bydeveloping new businesses
through continuous
innovation andinvestment in growth areas.

Net Profit before
Income Taxes¥20.0 billion
蝶理株式会社 CHORI CO., LTD.

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Medium- to Long-term Initiatives

Chori Innovation Plan 2022 Progress of KPIs
Laid a foundation for a new stage(consistently delivered ordinary profit at the ¥10.0 billion level)
Achieved all KPIs planned for FY2022
Ordinary profit and net profit both hit new record highs
Unit: billions of yen

Net sales

FY2020results

FY2021
results

FY2022
results

FY2022plan

3-year3-yearcumulative results cumulative plan

¥216.2¥284.1¥329.4¥280.0¥829.7¥720.0Ordinary profit

¥4.7

¥10.3

¥12.4

¥11.0

¥27.4

¥27.0

Net profit attributableto owners of parent

¥1.2

¥6.8

¥8.1

¥7.3

¥16.2

¥17.8

ROA
(ordinary profit basis)

4.1%

8.4%

9.0% 8% or higher

－

－

ROE
(net profit* basis)

2.2%

11.0%

11.8% 11% or higher－－* Net profit attributable to owners of parent
End of FY2019 Equity ¥57.2 billion

Ongoingchallenges

Equity ratio 50.0%

Expansion ofbusiness revenue

End of FY2022

Sustainability
response

Equity ¥72.2 billion

Management
structure suited to
the new stage(human capital, DX)

Equity ratio ¥50.4%

Risk management

蝶理株式会社 CHORI CO., LTD.

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Medium- to Long-term Initiatives

Chori Innovation Plan 2025 KPIs

Targets for increasing corporate value
Financial targets
FY2025 plan

¥360.0 billion¥16.0 billion

Net sales
Net profit before income taxes
Net profit attributable to owners of parent¥11.0 billion

ROA (net profit*1 basis)

7% or higher
12% or higher
Approx. 10%

ROE (net profit*1 basis)
ROIC*2

Non-financial targets*1: Net profit attributable to owners of parent*2: ROIC (Return on Invested Capital)= Operating profit after income taxes / (Equity + Interest-bearing debt)

Expand our line of environment-friendly SDG-oriented products
Increase the percentage of women among career-track hires and employees who have transferred to careertrack positions to over 30%
Increase the percentage of male employees taking childcare leave
Increase the percentage of women in management positions

Continue to acquire certification as an outstanding organization under the Ministry of Economy, Trade andIndustry’s Certified Health & Productivity Management Outstanding Organizations Recognition Program
Invest approximately ¥5.0 billion in DX measures, including the adoption of SAP software
蝶理株式会社 CHORI CO., LTD.

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Medium- to Long-term Initiatives

Positioning and Background of Chori Innovation Plan

Chori Innovation Plan
<Positioning>

Roadmap to a new stage, with CIP2025
as the final destination.
CIP2019

CIP2022

CIP2025

FY2019FY2022

FY2025¥1.9 billion¥3.2 billion¥4.5 billion¥0.6 billion¥2.5 billion

ASADA U CO., LTD.,
Kozakura Shokai Co., Ltd.

STX

around 20%

25％ or higher

30％ or higher

Trends in ordinary profit¥7.0 billion¥8.7 billion¥12.4 billion¥16.0 billion

Trends in net profit before income taxes¥7.2 billion¥9.3 billion¥12.8 billion¥16.0 billion

Priority measures and KPIs

Consolidated management
centered on global business
Overseas subsidiaries,
trends in ordinary profit

M&A effect*
Subsidiaries through M&A

Shareholder returns
Trends in dividend payout ratio

FY2016¥1.2 billion¥0.3 billion¥4.0 billion
30％ or higher
DOE of 3.5%
or higher*Ordinary profit of M&A subsidiaries - Amortization of goodwill, etc.

蝶理株式会社 CHORI CO., LTD.

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2Outline of the New Medium-Term Management Plan
Chori Innovation Plan 2025 (FY2023-FY2025)
Basic Policy and Basic Strategy
Basic Strategy 1
Promote consolidated management centered on our global business
Basic Strategy 2

Develop sustainable businesses that adapt quickly to the changing
business environment

Basic Strategy 3

Promote ESG management E: Environmental
Promote ESG management S: Social

Basic Strategy 3

Promote ESG management G: Governance
Shareholder Returns
Basic Strategy 3

Business and Management Transformation through DX
蝶理株式会社 CHORI CO., LTD.

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Outline of the New Medium-Term Management Plan (CIP2025)

Basic Policy and Basic Strategy
Basic strategy promotion ⇒ Corporate value improvement
Basic Policy

A corporate group that continues to evolve and change on a global scale,underpinned by its exceptional capabilities and expertise

Basic strategy 1

Basic strategy 2

Basic strategy 3

Promote consolidated
management centered on
our global business

Develop sustainable businesses
that adapt quickly to the changing
business environment

Promote ESG management

Business and management transformation through DX
蝶理株式会社 CHORI CO., LTD.

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Outline of the New Medium-Term Management Plan (CIP2025)
Basic
Strategy 1

Promote consolidated management centered on our global business

Strengthening and expansion of overseas business<Key points of strategy>

Strengthen operating base at major overseas business sites
Review and brush up business portfolio
Strengthen overseas profitability
Integrate operations as a specialized group through Group synergy

Trade volume*(billions of yen)

260.0
227.2

Human capital investment
and redeployment＆
Development of next-generation products
Expansion of existing products
FY2022

FY2025（CIP2022）（CIP2025）* Trade volume: Import sales + Export sales + Overseas sales

蝶理株式会社 CHORI CO., LTD.

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Outline of the New Medium-Term Management Plan (CIP2025)

Develop sustainable businesses that adapt quickly
to the changing business environment

Basic
Strategy 2

Responding to fast-paced change in the era of VUCA** Volatility, Uncertainty, Complexity, Ambiguity<Key points of strategy>

Take a bird's-eye view of business risks and respond flexibly
New development and business investment
M&A

Diversification of global supply chains

Proactive business investment
in growths areas and regions

EuropeGreater
China
Asia &
Middle East

Pandemics+ others

North America &South andCentral America

Extremeweather

Conflicts

Develop suppliers to meet
diversifying customer needs

Growth areas: environment,
health and comfort, global

Market entry

Turn changes in the global supply-demandComplement strengthened areas with businessbalance into opportunities

investment and M&A
蝶理株式会社 CHORI CO., LTD.

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Outline of the New Medium-Term Management Plan (CIP2025)
Basic
Strategy 3

Promote ESG management
E: Environmental

Achieve a sustainable and prosperous society
and coexist in harmony with society
Climate change
Aim for carbon neutrality by 2050 in the Chori Group
Implement measures based on TCFD recommendations
Category

Results of CIP2022

New initiatives in CIP2025

GovernanceRegularly reported and discussed at Board of
Directors’ meetingsSpecialized committees to study and promote
specific measures to be taken

Strategy

Analyzed under 2℃ and 4℃ scenarios

Brush up scenario analysis, including 1.5℃ scenario

Riskmanagement

Organized risks related to climate change

Promote and strengthen establishment throughout
the Group

FY2020 emissions: 1,705 (t-CO2) (Scope 1, 2, 3
Indexes(Category 6: Business travel, 7: Employee
and targets commuting)). Small amount of emissions. Ongoingregular inspections

Continue calculation and disclosure of Scope 1-3
results, aiming for carbon neutrality by 2050

More environmentally friendly products
Expand sales of environment friendly SDGs products such as ECO BLUE, a recycled polyester fiber made fromused plastic bottles, and biodegradable resin, etc. Aim for sales of ¥50.0 billion in FY2025 (2.5 times the
FY2022 level)⇒Implement initiatives aimed at realizing a circular economy
蝶理株式会社 CHORI CO., LTD.

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Outline of the New Medium-Term Management Plan (CIP2025)
Basic
Strategy 3

Promote ESG management
S: Social

Ensuring the well-being of stakeholders
Human resource development
Ensure well-being= Be company that provides employees with a rewarding and enjoyable workplace environment

1 Invest in human capital

2 Boost engagement“Nurture people, and develop with them”

Achieving work that is rewarding

Diversity & inclusion

Effective two-way communication

Enhancement of recruiting capabilities

Creation of a better working environment

3 Promotion of health and productivity management

Respect for human rights⚫ CSR-Based Procurement Surveys conducted regularly⚫ Strengthening initiatives with ESG-conscious companies

Establishing a sustainable supply chain
蝶理株式会社 CHORI CO., LTD.

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Outline of the New Medium-Term Management Plan (CIP2025)
Basic
Strategy 3

Promote ESG management
G: Governance<Transition to Stronger Governance>

2016

2018

2020

2021

2022

Strengthening ofAudit Function

Promotion ofDiversity

Strengthening ofGovernanceTransition
to Prime Market

Transitions to a
Company with an Audit
and Supervisory
Committee

Management
Transparency and
Fairness

Appoints a female
director

Institutes theGovernance Committee

Increases the ratio ofoutside directors on the
Board of Directors tomore than one-third

Implements measures
based on TCFD
recommendations

Corporate GovernanceCompliance

Risk Management

Strengthening governancethrough the GovernanceCommittee

Focus on reinforcing corporate
ethics and zero complianceviolations

Strengthening risk
management capabilities

Awareness of cost of capitaland stock priceContinuing to develop internal
whistleblower system andconducting internal training
sessions and surveys

Systematizing and managing
risks and strengthening risk
sensitivity

Enhanced dialogue withshareholders and investors to
improve PBRStrengthening product safety
and quality assurance systems

Strengthening response to
emerging market risks andgeopolitical risks
蝶理株式会社 CHORI CO., LTD.

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Outline of the New Medium-Term Management Plan (CIP2025)

Shareholder Returns
Basic Dividend Policy
Provide stable and continuous dividends while securing appropriate funds forinvestments in basic profitability and growth strategies
Dividend policy: Consolidated dividend payout ratio of 30% or more and dividendon equity ratio (DOE) of 3.5% or more (from FY2023)<Trends in dividends>

Dividend per share( )：Consolidated dividend payout ratio

Basic earnings per share

DOE ratio of 3.5% or higher(FY2023~)

Consolidated dividend
payout ratio ofup!

Dividend
per share (¥)

30% or higher

Consolidated dividend

140

up!

120
100

Consolidated dividend

40

¥105

25% or higher（32%)

payout ratio around 20%

¥59

80
60

payout ratio of

¥33

¥34

¥36

¥24 （22%) （20%) （21%)

¥40

¥60

¥84

Basic
earnings per
share (¥)

400

（30%)

¥63

300

（25%)
（31%) （26%)

200

¥37

（21%)

（73%)

（20%)

100

20

0

0
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017* FY2018 FY2019 FY2020 FY2021*Includes commemorative dividend of ¥10

FY2022

FY2025（Plan）
蝶理株式会社 CHORI CO., LTD.

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Outline of the New Medium-Term Management Plan (CIP2025)

Business and Management Transformation through DX

Promotion of DX strategy: defensive and offensive perspectives
SAP introduction project CARAT launched in April 2022
(full-scale operation from FY2025)
CARAT (Company-wide business transformation project)
Chori Accelerate Renovation Achievement Transformation
CIP2025

Post-CIP2025

Introduction of SAP & Creation of
DX management structure

Utilization of SAP & Improvement ofcorporate value

Defensive DX

Offensive DX

Business transformation andstandardization

Realization of flexible management
resistant to change

Data-driven management andestablishment of a platform
for the use of data

Strengthening of sales
competitiveness through use of dataDX human resource development anddiversity

Business model reform
蝶理株式会社 CHORI CO., LTD.

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3
Outline of Strategies by Business
Strategies by Business (1) Fibers, Textiles, and Garments
Strategies by Business (2) Chemicals

蝶理株式会社 CHORI CO., LTD.

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Outline of Strategies by Business

Strategies by Business (1) Fibers, Textiles, and Garments

Continue to enhance the strengths of “GLOBAL ONE STOP CHORI”
And expand business in growth sectors<Business strategies>●Reinforce our proprietary business model

Segment profit(billions of yen)

7.5

5.1

・Global One Stop Chori:
Supply chain development from upstream to downstream
・Expansion of semi-industrial/semi-commercial business scheme:
Strengthen material development and proposal capabilities
・Regional development●Ensure stable growth in the three areas of materials, products andresources
・Materials: Optimized positioning of raw materials (yarn and cotton) and textiles
to meet customer needs
・Products: Evolution of products and distribution by integrating product output
and market entry
・Resources: Proposal-based sales responding to changes in the automobile,
hygienic materials, and construction materials markets●Expand business in growth sectors (environment, health and comfort)
・Environment: Establishment of a rational circular economy from raw materials
to finished products
・Health and comfort: Establishment of a sportswear project across the Textile
Division and the Fibers, Textiles, and Garments Business to generate synergy●Continue to grow the business across the globe
・Establishment of a stable supply chain and expansion of production
and sales in optimal locations
・Sales of parts and materials from China to Japan, capturing of domestic
demand in China, and utilization of high value-added products・Strengthening of functions and expansion of sales through collaboration withleading partner companies in East Asian countries

FY2022(CIP2022)

FY2025（CIP2025）●Pursue exceptional levels of functionality and expertise and further
set ourselves apart from the competition
・Brand marketing of BLUE CHAIN
蝶理株式会社 CHORI CO., LTD.

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Outline of Strategies by Business

Strategies by Business (1)Fibers, Textiles, and Garments: Products and Features
Total business development, from upstream handling of raw materials and midstream handling textiles andmaterials to downstream handling finished products
Fiber Raw Materials Dept.
<Products> Synthetic raw materials,
polyester yarn, nylon yarn
<Features> Develops products forapparel and material applications inJapan and overseas

Automotive Materials and Fabrics
Dept.
<Products> Raw materials for vehicles andmaterials, upholstery for seats in cars
<Features> No. 1 market share in Japan

Career Apparel & Workwear Dept.
<Products> Suits, uniforms, medical wear
<Features> Engaged in planning andmanufacturing operations for the above
products

Apparel Dept.
<Products> Ladies’ and men’s fashion<Features> Integrated global SCM fromplanning to distribution

Technical Textiles Dept.

Performance Apparel Dept.

<Products> Hygiene materials,
household materials, construction
materials, automotive parts<Features> Handles products made ofhigh-performance nonwoven fabrics<Products> Sportswear, innerwear, etc.
<Features> Focuses on golf wear andathletic wear

Textile-Fabric Dept.
<Products> Fabrics for sportswear,
traditional garments worn in the Middle
East, etc.
<Features> Engaged in everything frommaterial proposals to product proposals

蝶理株式会社 CHORI CO., LTD.

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Outline of Strategies by Business

Strategies by Business (2) Chemicals
Develop new businesses through continuous innovation<Business strategies>

Segment profit(billions of yen)

8.8

9.5

● Promote consolidated management centered on our
global business・Organizational management to create new businesses,
expansion and utilization of human capital・Deepening of cooperation with affiliates and overseas
business sites● Establish environmentally conscious businesses thatoffer high levels of functionality and profitability inplace of existing sub-standard businesses
・Development of products that enable us to take initiative
・Key fields: (1) Electronics, batteries, semiconductor materials,
nonferrous metals (2) Healthcare (3) Food materials (4) Greenbusiness (5) Digital integration● Develop frameworks and product domains that are
resilient to charges in market and economic conditions
・Markets: Explore new products, customers, markets, and needs
・Supply Chain: Acquire new raw materials and sources of supply
・Organization: Achieve a new organization that is market-driven
and is suited to the next stage of growth

FY2022(CIP2022)

FY2025（CIP2025）● Strengthen cooperative efforts with China, India,
South Korea, and countries in Southeast Asia andSouth America
・Dispatch of representatives and increase in local staff
蝶理株式会社 CHORI CO., LTD.

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Outline of Strategies by Business

Strategies by Business (1)Chemicals: Products and Features
Create unique business models in functional and specialized raw materials, fields, and markets
Performance Chemicals Dept.
<Products> Urethane materials, resinrelated products, etc.
<Features> Expansion to overseas
integrated chemical manufacturers, etc.

Inorganic Fine Materials Dept.
<Products> Inorganic chemicals, glassmaterials, nonferrous metals, etc.
<Features> Expanding business tomajor domestic glass manufacturers,
etc.

Fine Chemicals Dept.
<Products> Pharmaceutical and agrochemicalintermediates, functional intermediates<Features> Expanding business topharmaceutical and agrochemical
manufacturers, semiconductor materials
manufacturers, etc.

Life Science Dept.
<Products> Food additives, animal feed
additives, health food materials, etc.
<Features> Engaged in food-related
business

Industrial Chemicals Dept.
<Products> Electronic componentsrelated products, phosphoric acid<Features> Expanding business to major
electronic component manufacturers, etc.

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Making your dreams come true

Forecasts for operational performance, as well as future
predictions described in this document, were preparedbased on information available as of the day on which thisdocument was released.
This document in no way guarantees the contents andoperational performance of the company in the future.