Furukawa Electric Co., Ltd.
Q1 Financial Results Briefing for the Fiscal Year Ending March 2025
August 6, 2024

[Number of Speakers]

1Koji Aoshima

Director, Corporate Vice President, andGeneral Manager of Finance & AccountingDivisionFurukawa Electric GroupFY2024 Q1 Financial Results
August 6, 2024

Koji Aoshima
Director and Corporate Vice President
General Manager, Finance & Accounting Division
Furukawa Electric Co., Ltd.

© FURUKAWA ELECTRIC CO., LTD.

Aoshima: I am Aoshima from the Finance & Accounting Division. Thank you very much for taking time out ofyour busy schedule today to participate in our financial results presentation. I will now explain the financial
results for Q1 of FY2024 and forecasts for the full year of FY2024.

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Please take a look at page 5. These are the highlights for Q1 of FY2024 financial results.
The Q1 results showed a YoY increase in both sales and profit. Progress is generally in line with the full-year
forecast announced in May.
Net sales were JPY273.6 billion, operating profit was plus JPY3.5 billion, ordinary profit was plus JPY7.1 billion,and profit attributable to owners of parent was plus JPY4.7 billion.
Net sales increased in all segments, operating profit increased in all segments except the Service andDevelopments, etc., and ordinary profit increased mainly due to increased share of profit of entities accounted
for using equity method, in addition to higher operating profit.

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Page 6 shows a P&L summary.
The full-year forecast remains unchanged from that announced in May. The assumption for the exchange rateis also the same as in the May announcement: JPY140 to the dollar. Regarding the Q1 results, net sales andoperating profit will be explained in the increase or decrease factor section on the next page and thereafter.
I will provide other supplementary explanations here.
Share of profit of entities accounted for using equity method increased approximately by JPY3.5 billion YoY.
This was mainly due to increased share of profit of entities accounted for using equity method related to UACJ.
Extraordinary income decreased by approximately JPY4.5 billion YoY, but this was due to the large number ofsales of policy –holding shares in the previous fiscal year. Income taxes decreased approximately by JPY2.7billion YoY, partly due to the recognition of deferred tax assets from tax effect accounting.

3Page 7 shows the factors that contributed to the increase or decrease in net sales.
Net sales were up JPY27.1 billion YoY. The fluctuation in price of unprocessed metals added JPY9.0 billion, theeffect of yen depreciation on foreign exchange added JPY12.9 billion, and the real change excluding changes
in the scope of consolidation, etc., added JPY5.0 billion. The breakdown of the real change was a decrease ofabout JPY10.0 billion in the Communications Solutions, an increase of about JPY7.0 billion in the EnergyInfrastructure, an increase of about JPY1.0 billion in the Automotive Products & Batteries, an increase of about
JPY6.0 billion in the Functional Products, and an increase of about JPY1.0 billion in others and eliminations.,
etc.

4Page 8 shows the factors for changes in operating profit.
The increase in sales added JPY1.0 billion. The breakdown was a decrease of JPY2.9 billion in theCommunications Solutions, an increase of JPY2.0 billion in the Energy Infrastructure, an increase of JPY0.5billion in the Automotive Products & Batteries, and an increase of JPY1.4 billion in the Functional Products.
Raw material & fuel prices, logistics expenses were negative JPY1.1 billion, depreciation expenses werenegative JPY0.7 billion, other fixed expenses were negative JPY1.1 billion mainly due to higher labor costs,
foreign exchange effects were positive JPY1.3 billion due to yen depreciation, and improvement effects werepositive JPY6.9 billion including price pass through, productivity improvement, and product mix improvement.
The overall increase of JPY6.3 billion is mostly due to the improvement effects.

5Page 9 provides an overall view of the operating profit forecast for the full year of FY2024.
We maintain our full-year operating profit forecast for FY2024. First, let me talk about the Q1 progress froman overall perspective. When we announced our annual forecast of JPY25.0 billion in May, we said that H1
would be 30% of the total and H2 would be 70%. The Q1 results were favorable, with progress at about half
the expected level for H1.
I will explain the Q1 progress by sub-segment. The Communications Solutions, Energy Infrastructure, andAutomotive Products & Batteries sub-segments were in line with expectations, while the Electronics
Component Material sub-segment was slightly below expectations due to a delayed recovery in theelectronics market, and the Functional Products sub-segment was above expectations due to strong demand
related to generative AI and data centers.
The arrows indicate the expected increase or decrease in profits in H1 and H2 compared to the previous half.
The arrows in H1 represent the image of H1 of FY2024 relative to H2 of FY2023. We presented a similar imageat the time of the May announcement, and I will now explain the changes we recognize at this time.
In the H1 forecast, the outlook for the Electronics Component Material has changed slightly downward due
to a lower-than-expected recovery in the electronics market, while the outlook for the Functional Products isstronger upward than initially expected. Regarding the arrows for H2, there is no change in the perceptionthat H2 will be up against H1 in all segments.
We will continue to assess the recovery of demand in each segment and the growth of demand related togenerative AI.

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Page 10 shows net sales and operating profit by segment.
The status of sub-segments will be explained on the next page and thereafter, so I will omit the explanation
here.

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Page 11 is about the Communications Solutions.
The Q1 results show a decrease in both sales and profits YoY. The sluggish demand in North America that had
continued since the beginning of FY2023 bottomed out in Q3, but telecom-related demand remained weak in
Q1 of FY2024. Orders for data center-related services are showing positive results, but this has not yet been
sufficient to offset the overall decline in demand, resulting in a decrease in profit.
As shown here, there have been no major changes in our perception of the business environment since theMay announcement.

8Page 12 is about the Energy Infrastructure.
The Q1 results show an increase in both sales and profit YoY. The increase in sales of domestic extra-highvoltage, renewable energy projects, and functional power cable was the main reason for the increase in profit.
There has been no major change in our perception of the business environment since the May announcement.

9Page 13 is about the Automotive Products and Batteries.
The Q1 results show an increase in both sales and profit YoY. The increase in profit was due to improved
productivity at our company, through the stabilization of production at Japanese OEMs, our main customers.
There has been no change in our perception of the business environment since the May announcement.

10Page 14 is about the Electronics Component Material.
The Q1 results show an increase in both sales and profit YoY. Although net sales increased significantly YoY, itwas mainly due to soaring copper prices and the weak yen, so in real terms, net sales were almost the samelevel as the previous fiscal year.
The increase in profit was mainly due to an improved product mix.
In terms of our perception of the business environment, there is no change in our belief that electronicsrelated demand will recover in H2 or later. However, we will continue to monitor the situation closely as there
are signs of a slight delay in the recovery.

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Page 15 is about the Functional Products.
The Q1 results show an increase in both sales and profit YoY. Demand for products related to generative AI
was strong, and the increase in net sales of thermal products and aluminum blanks for HDD contributed tothe increase in profit.
As for our perception of the business environment, investments related to generative AI have continued to
be brisk since last year, and data center-related demand has also been active, driven by generative AI.
Accordingly, inventory adjustments in the supply chain for aluminum blanks for HDD have been resolved
earlier than expected.

12Page 16 shows a summary B/S.
Total assets amounted to JPY972.9 billion, down JPY12.1 billion YoY. Foreign exchange impact from yen
depreciation increased overall assets by JPY15.6 billion. On the other hand, in investments and other assets,
UACJ shares were reclassified from shares of subsidiaries and associates to shares of a non-affiliated company,
resulting in a decrease of approximately JPY30.0 billion.
Shareholders' equity in net assets also decreased by JPY24.3 billion, mainly due to a change in the classificationof UACJ stock holdings, resulting in a total decrease in net assets of JPY18.6 billion. The deterioration in theequity capital ratio and net D/E ratio indicators is due to special factors resulting from changes in theclassification of UACJ stock holdings.

13Page 17 shows capital expenditures, depreciation and amortization, and R&D expenses.
There is no change in capital expenditures, depreciation and amortization, and R&D expenses from the figuresannounced in May. Capital expenditures decreased approximately by JPY1.6 billion YoY. The main reason forthis fiscal year's reduction was the inspection of a large project in Q1 of the previous fiscal year.
Depreciation and amortization increased by JPY0.7 billion YoY, mainly due to foreign exchange effects.
R&D expenses will remain at the same level as in the previous fiscal year.

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Lastly, I will discuss initiatives to optimize our business portfolio.
I will not go into detail, but here is a summary of our recent announcements related to the reorganization.
Although none of them will affect our FY2024 financial results, we will continue our efforts to improve capitalefficiency in order to achieve our Vision 2030 and 2025 Mid-term Plan.
That is all from me.

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