Progress Report on Our Mid-Term Plan
For 2023 Through 2027

August 2024
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Table of Contents
1. Mid-Term Plan Outline andTrends in Management Indicators
2. Selection & Concentration ofExisting Lines of Business

Efforts for Structural Reforms
Efforts for Business in North America

3. Laying Groundwork for Growing Lines ofBusiness –Living Up to Our PhilosophyTire Business: ACTIVE TREAD Technology
New Business: Commercialization of SENSING CORE
Sports Business: Golf, Tennis
Industrial Business: Vibration Control Dampers,High value-added Medical Rubber Parts21-1. Mid-Term Plan Outline

Steady Companywide Implementation ofMedium-term Plan to Reach Turning Point in 2025
2027
TargetBusinessProfit Rate

ROE
Business Portfolio
Optimization

Selection & Concentrationof Existing Lines of Business
Updating Core Systems &Cultivating DX Talent

D/ERatio
ROIC

Practicing DX Management for Always Agile
Response to Changing Business Environment

7％
10%
0.6
6%

“Be the Change” Project to Reinforce the Foundations of Our Business

2020

2023

2024

2025

2027

Turning Point

Steadily targeting major structural reform projects
Pursue strategic investments to strengthen competitiveness31-2. Trends in Management Indicators

Improvement in management indictors toward 2027
Currently continuing to promote our efforts to achieve our mid-term plan targets
ahead of scheduleBusiness Profit Rate

ROE

2024 Projection

6.7

2024 Projection

2027 Target

7.0

2027 Target

ROIC

6.1
10.0

D/E Ratio

2024 Projection

5.7

2024 Projection

0.5

2027 Target

6.0

2027 Target

0.6

2024 Projection

2024 Projection

6.7％

5.7％
2024 Projection
2027
Target7％2024 Projection

6.1％

2027
Target2027
Target

10％

6％

0.5
2027 Target

0.64

2-1. Efforts for Structural Reforms
Currently promoting structural reforms in around 10 businesses and product lines within the scope

Six businesses and product lines whose estimated timeframe is 2023 to2024 will be steadily estimated by considering various options
Improvement inROIC(At Maximum)*Invested Capital

EstimatedTimeframe※※

6 businesses/
product line

Effects ofbusiness profit
Improvement*＋2.0P

140 billion yen＋20 billion yen

2023 to 2024

Other＋0.5P

40 billion yen＋3 billion yen

2024 to 2025

Total for projects
in scope＋2.5P

180 billion yen＋23 billion yen

Diagram of Profit Improvement（Expected improvement against FY2022）

Estimated so far

Prospectsfor the future200～250

230

Including the effects of thestructural reforms conducted inUSA Factory

85（Unit: 0.1 billion yen)

*Expected
improvement against
FY2022

 Expect to see an improvement of over23 billion yen through the promotion ofstructural reforms
 Resources created bywithdrawal from the businesswere shifted to areas such as
high value-added medical rubberparts and SENSING CORE

Medical rubber parts with
top share in domestic
market Continue to shift resources to growing
businesses in line with theimplementation of structural reforms

52-2. Efforts for Business in North America
In order to maximize the profit in our business in North America,
the business will be estimated within 2024 by considering various
options
Change of profit inNorth America BusinessProfit increase due toincrease in profitable
imported products

Sales
As for our flagship WILDPEAK Series, the sales ofmainly new products in the series have increased.
Sales increase exceeding demand growth
WILDPEAK Series sales amount*

Light truck tires demand*(Year 2019=100）(Year 2019=100）

175
100

Business
profit02019

1081002024 Projection

2019

Based on USA industry demand forecast

2024 Projection*Replacement tires

Production
202420222023
Actual Actual Projection
Results Results

USA Factory is considering various options
while continuously promoting its efforts toimprove the production.

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3-1. Active Tread Technology—Launch of the first product featuring Active Tread Technology—(WM02)

ConventionalAll-season tire〇△〇〇△〇×〇×〇×〇〇〇×〇〇

Highway WinterTire Regulation

Driving*2
AllowedChains must
be installed

Driving
AllowedDriving*2
AllowedTire chain
regulation for allvehicles

Chains must
be installed

Chains must
be installed

Chains must
be installed

Chains must
be installed

Road SurfaceConditionSYNCHRO
WEATHER

Summer tire

Dry road surface〇

Wet road surface〇

Icy road surface〇

Snowy roadsurface
Slushy roadsurface*1(EC204)

Winter tire

(AS1)

World first all-season tire withIce Grip Symbol *3

Quietness, wear performance equivalent
to or better than summer tire *4

 Stimulate demand for replacement of summer tires
 Creating an unprecedented all-season tire market in Japan and expanding themarket size(the market has doubled in size over the past four years in Europe) Introduce the “Certified Store System” to appropriately explain the features andgood performance of the product*1 It is recommended that the WINTER MAX 03 should be installed, when driving on severely snowy or icy road surfaces.
*2 In some areas, driving with all-season tires may not be allowed during seasons when the winter tire regulations are in effect.
*3 Based on our own research*4 Wear performance in comparison with EC204, quietness compared by pattern noise73-1. Active Tread Technology—Announcement of the launch of the first product featuring Active Tread Technology—

Product launch presentation of SYNCHRO WEATHER

Promotion featuring Shohei Otani

After announcement (July 22), the response from retailers
far exceeded expectations
 Pre-orders began on July 23 at directly-managed stores, many reservations
received mainly in the Tokyo metropolitan area
 New dealers asking to join as “Certified Store”
 Evaluation that the new suggested retail price level is commensurate withthe value of the product8

3-1. Active Tread Technology—Future plans for ACTIVE TREAD Technology—

Evolution of the “Water Switch” and “Temperature Switch” of Nextgeneration all-season tires
2023

2024

2027

ACTIVE TREAD
Announcement ofour concept

Launch ofnext-gen all-season tires
featuring ACTIVE TREAD
Technology

Announcement of anevolved version ofSYNCHRO WEATHER

Expansion intooverseas

WaterSwitch

Temperature
SwitchWater
SwitchTemperature
SwitchProgress of ACTIVE TREAD Technology
 Commencement of the development of the third andfourth “Switches”
93-1. Active Tread Technology—Leading-edge research on materials—
 NanoTerasu Synchrotron Light Source(NanoTerasu) has begun its full-scale
operations in April 2024
 The first presentation on the results of theutilization of NanoTerasu was held in MayFuture utilization
 Raise the level of “water switch” of ACTIVE TREAD Technology
 Aiming to improve tire performance through new knowledge by
analyzing mechanisms such as the path and speed of water penetration
into rubber.
TireRoad surface

Observing various waterconditions by irradiating
synchrotron radiation10

3-2. SENSING CORE Commercialization
 Commence the “Tire Replacement Optimization and Vehicle Failure
Prediction Solution Service” with Viaduct Inc. in the first quarter of 2025
 Starting with North America, plan to expand this business to the Japaneseand European markets
2024

2025

2026

2027

Delivery to automobile
manufacturers
Installation toautomobile

Delivery to overseas
manufacturer
Planned Installation to domestic
manufacturer

Failure prediction
business
Provides fleet managementcompanies with algorithmic
services to reduce downtime

Investment
Establishment of baseLaunch ofin North America
business in NorthAmerica

Market expansion
and development

Launch of business inJapan and Europe

 Started proof of concept of “Tire Pressure and Temperature Management Service”
using TPMS with domestic transportation company
 Aim to lead to the development of SENSING CORE and related services
113-3. Sports Business
Golf Business Strengthen sales activities in North America,  New “BiFLEX FACE” technology that expands
focusing on new golf courses
the “sweet spot” in golf clubs to increase Success of professional players - 1.5 times
distance. Inspired from “rebound frame” thatfurther increase flex at impact, synergistic
victories on the European and USA tours
effect increases the ball's initial velocity(change from 1st half previous year) Number of our customers
in North America(Golf balls)

115%“BiFLEX FACE”

Optimizing stiffness by varying theslope of the frame from heel to toeof the club head

“Rebound Frame”

Amplifying flex by integrating thegolf club's face and frame

Differentiating ourselves through technological innovation andmaking steady progress toward becoming a global TOP 3Tennis Business Adopted in Australian Open, No.1 use in ATP Tour
 Adopted in competitions sponsored by Intercollege Tennis
Association (ITA)

Expanding business globally based on the high quality of tennis balls*Excluding competitions governed by NCAA(National Collegiate Athlete Association)

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3-3. Industrial Business
Vibration Control Dampers
No total or partial destruction ofMIRAIE-installed houses in the2024 Noto Peninsula Earthquake*1

High Value-added
Medical Rubber Parts
Top-class domestic market share for
medical applications such as vaccines
for influenza and antibiotics*3

The above photo shows highdamping rubber generating heat
(Red area shows high temperature) Our proprietary high-damping rubber
technology that instantly absorbs vibrationby converting it into heat

 Low elution rubber technology that canreduce the generation of impurities

 Rubber technologies that boast over 90 yearsof durability*2

Future utilization

Future utilization

 Delivery to overseas buildings, etc.
 Promote seismic retrofitting of historicbuildings

Concentrate management resources in theJapanese and Asian markets, and focus onhigh value-added markets with proprietary
rubber technology*1 Within the extent that we are aware of*2 Based on the results of our accelerated deterioration test (For the part of high-damping rubber damper)*3 Based on our own research13

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