Action to Implement Management
That is Conscious of Cost of Capitaland Stock PriceMarch 13, 2024

(C)2024 Toho Titanium Co., Ltd.

Analysis of Current Situation (PBR/Profitability and Cost of Capital) Our PBR has remained stable above 1.0x.
 Our performance is highly volatile due to significant
impact of demand fluctuations, raw material prices,etc. As a result, we have not been able to achieve astable and sustainable profitability (ROE/ROIC) thatexceeds the cost of capital (Cost of Equity/WACC).
 In particular, ROIC has not exceeded WACC exceptin FY2022.
Cost of Capital Assumptions
Risk-Free Rate＝＋

Cost of Equity(CAPM based)
8–10%
Cost of Equity(CAPM based)
8–10%×β The long-term interest rate in Japan is used as therisk free rate B is based on monthly share price over 60 months
and TOPIX returns

Shareholders’Equity Ratio＝＋

Cost of Debt

×

Risk Premium×

1 - Shareholders’Equity Ratio

Weighted Average
Cost of Capital(WACC)
5–7%(C)2024 Toho Titanium Co., Ltd.

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ROIC Targets and Initiatives to Improve ROIC
From the perspective of strengthening business operations conscious ofcapital efficiency, we introduced “ROIC” as a management indicator, aiming
to secure a stable “ROIC” that exceeds “WACC.”FY2025TargetROIC

FY2030Vision

7.0% or more 10.0% or more
Initiatives to Improve
ROIC

1. Earnings expansion, profit margin improvement

2. Effective utilization of assets

 Work to achieve our vision for each business by
2030 and implement business-specific measuresfor expanding earnings and improving profitmargin

 Reduce inventory assets
 Execute capital expenditure effectively(C)2024 Toho Titanium Co., Ltd.

3Vision by Business in 2030

*Announced on May 8, 2023
Top in global sales share oftitanium sponge for aircraft
Ordinary income margin of
10% or more

Net sales of around ¥10 billion

New businesses

Titanium metal

Net sales: ¥170 billion(¥80.3 billion in FY2022)

WEBTi

Ordinary income: ¥25 billion(¥10.5 billion in FY2022)

Chemicals
Top in domestic
sales share of
Medium-Termnickel powder
Management
Ordinary income margin
Plan of
15% or more

Catalysts
Top 3 in global sales share of
PP catalysts
Ordinary income margin of
20% or more(C)2024 Toho Titanium Co., Ltd.

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Business-Specific Measures for Expanding Earnings
and Improving Profit Margin*Announced on May 8, 2023

Titanium metal◆ Optimization of titanium sponge price levels◆ Increase processing margin due to increased production of titanium ingots◆ Increase capacity through partial improvement of titanium sponge equipment (Wakamatsu/Chigasaki Plant)◆ Consider the construction of a new plant that can ensure profitability◆ 30% improvement in labor productivity

Catalysts
Chemicals◆ Improvement of production technology at the Kurobe and Chigasaki Plants (approx. 40% increase compared tocurrent production capacity)◆ Increase production capacity by constructing a new plant (approx. 30% increase compared to current productioncapacity)◆ Aggressive market development by enhancing catalysts performance◆ 30% improvement in labor productivity

New businesses◆ Increase production capacity by starting operation at the fifth plant(approx. 40% increase compared to current production capacity at total completion)◆ Create concrete plans for expansion investments in the next fiscal year (approx. 30% increase compared tocurrent production capacity)◆ 30% improvement in labor productivity◆ Expansion of the WEBTi business◆ Creation of more new businesses(C)2024 Toho Titanium Co., Ltd.

5Action That is Conscious of Stock Price
3540.0%(1) Dividend Payout Ratio
30 yen

30

25

28.9%

28.5%

35.0%

Aim 30.0%
for a dividend payout ratio of around 30%

29.6%

25.0%
201517 yen

20.0%

15 yen15.0%
1010.0%505.0%FY2021
21年度

FY2022
22年度(2) Officer Compensation System

FY2023
23年度見通し
forecast

FY202424年度計画
planFY2025
25年度計画
plan0.0%*Excluding commemorative dividend on 70th anniversary ofthe company’s founding (3 yen) in FY2023

Consider introducing a compensation system that is conscious of not only theshort-term performance, but also the medium to long-term performance(Restricted stock unit, etc.)(C)2024 Toho Titanium Co., Ltd.

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CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This material contains “forward-looking statements” related to future events, such as our expectations on futurebusiness and financial performance and financial conditions, which reflect the management’s views andassumptions derived from information that is currently available and are subject to risk and uncertainties. All
statements other than statements of historical fact are statements that could be considered forward-looking
statements. When used in this material, words such as "believe," "estimate," "expect," "intend," "may," "plan,""project," “target,” “will,” or "would" and similar expressions, as they relate to Toho, are intended as forwardlooking statements.
Many factors could cause the actual results, performance, or achievements to be materially different from any
future performance or achievements that may be expressed or implied by such forward-looking statements,
including, among others,changes in general economic and business conditions,the state of the regulatory environment or political situation,changes in currency exchange rates and interest rates,
introduction of competing products by other companies, lack of acceptance of new products by Toho's targetedcustomers, inability to meet efficiency and cost reduction objectives, changes in business strategy, and various
other factors, both referenced and not referenced in this material. Should one or more of these risks oruncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materiallyfrom those described herein. Toho does not intend or assume any obligation to update these forward-looking
statements.
(C)2024 Toho Titanium Co., Ltd.

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