Furukawa Electric Group FY2023 Financial Results andProgress of the 2022-2025 Medium-term Management Plan
(2025 Mid-term Plan)

May 13, 2024
Hideya Moridaira President
Koji Aoshima

Corporate Vice President andGeneral Manager of the Finance & Accounting Division

Furukawa Electric Co., Ltd.
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This presentation materials are created for the purpose of providing information on Furukawa Electric’s activities for shareholders,investors, and members of the media.
Forward-Looking Statements
Projections of future sales and earnings in these materials are “forward-looking statements.”
Management offers these projections in good faith and on the basis of information presently available.
Information in these statements reflects assumptions about such variables as economic trends and currency exchange rates.
Forward-looking statements incorporate known and unknown risks as well as other uncertainties that include, but are not limited to, the following
items.
• Economic trends in the U.S, Europe, Japan and elsewhere in Asia, particularly with regard to consumer spending and corporate expenditures.
• Changes in exchange rates of the U.S. dollar, euro, and Asian currencies.
• Furukawa Electric Group’s ability to respond to rapid advances in technology.
• Changes in assumptions involving financial and managerial matters and the operating environment.
• Current and future trade restrictions and related matters in foreign countries.
• Changes in the market value of securities held by the Furukawa Electric Group.
Due to the above factors, actual sales, earnings, and other operating results may differ significantly from forward looking statements in thesematerials. In addition, following the release of these materials, Furukawa Electric Group assumes no obligation to announce any revisions toforward-looking statement in these materials.

Copyrights
Furukawa Electric Co., Ltd. retains copyrights and other rights involving these materials. Copyright and otherwise reusing these materials in any way
without prior consent is prohibited.

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2

FY23 Financial Results and Progress of the 2025 Mid-term PlanI.

FY23 financial results and FY24 forecasts

II. Progress of the 2025 Mid-term Plan
1. Recognition of the current situation
2. Progress of priority measures

Today’s
Agenda(1) Maximizing revenues in existing businesses(2) Building a foundation for creating new businesses(3) Strengthening the foundation for ESG management
3. Business portfolio optimization and allocation of management
resources
4. Management targets (Financial targets)

Appendix
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3

I.

FY23 financial results and FY24 forecasts

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4

FY23 financial results highlights◼ Net sales and income declined year on year, but up from previous forecasts（JPY billion, JPY/kg, JPY/USD）Net Sales

OperatingincomeOrdinary
incomeNet income
attributable toowners of theparentFY22
1
Results*

FY23
Previous
forecasts*2

a1,066.3

15.4

FY23
Results

YoY
3change*bｃChange fromprevious
forecasts

c-a

c-b

1,040.0

1,056.5

5.0

17.3

4.0

11.2

10.3

(9.8)

(4.3)

(7.0)

＋16.5

＋6.2

＋6.3

15.9

0.0

6.5

(9.4)

＋6.5

Average copper price

1,209

1,243

1,262

+52

+19

Average exhange rate

135

144

145

+9

+1

2

* Announced on February 8, 2024

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(Comparison with last year)(Comparison with previous forecasts)【Increased】 Electronics & Automotive
Systems【Decreased】 Infrastructure【Increased】 Infrastructure【Increased】 Electronics & Automotive
Systems, Functional Products【Decreased】 Infrastructure【Increased】
Infrastructure, Electronics & Automotive
Systems, Functional Products

Increased interest expense
Decreased foreign exchange gain

Extraordinary income for the previous FY:
Gain on sale of equity interest in consolidated
subsidiaries (JPY10.8 billion), etc.

*1Restated only the FY2022 financial results following the start of voluntary application of the International
Financial Reporting Standards (IFRS) at the equity method affiliate UACJ Corporation(Refer to the Appendix for details)*3 Impact of deconsolidation of TOTOKU : Net sales JPY (12.2) billion, Operating income: JPY (2.3) billion

5

FY23 results - P/L summary（JPY billion, JPY/kg, JPY/USD）

FY22
Results*1

FY23
Previous
forecasts*2

a

b

FY23
Results

YoYchange*3

Change fromprevious
forecasts

c

c-a

c-b

Breakdown of changes（Full year YoY）

1,066.3

1,040.0

1,056.5

(9.8)

+16.5

See page 7

15.4

5.0

11.2

(4.3)

+6.2

See page 8（Margin）

1.4%

0.5%

1.1%

(0.4)

+0.6

Interest revenues/expenses

(5.2)

-

(7.4)

(2.1)

-

Profit/loss in equity method affiliates

3.6

-

6.3

+2.7

-

Foreign exchange gain/loss

1.7

-

(0.1)

(1.8)

-

17.3

4.0

10.3

(7.0)

+6.3

（Margin）

1.6%

0.4%

1.0%

(0.6)

+0.6

Extraordinary income/loss

10.7

9.9

9.8

(0.9)

(0.1)

Income taxes

Net sales
Operating income

Ordinary income(10.3)-(11.6)(1.3)-

Net income attributable to noncontrolling interests

(1.7)

-

(2.0)

(0.2)

-

Net income attributable toowners of parent

15.9

0.0

6.5

(9.4)

+6.5

1.5%

0.0%

0.6%

(0.9)

+0.6

Average copper price

1,209

1,243

1,262

+52

+19

Average exhange rate

135

144

145

+9

+1

（Margin）

2* Announced on February 8, 2024

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・Extraordinary income: (2.7)[17.6 → 14.9]
・Extraordinary loss: +1.9[(7.0) → (5.1)]*1Restated only the FY2022 financial results following thestart of voluntary application of the International Financial
Reporting Standards (IFRS) at the equity method affiliate
UACJ Corporation (Refer to the Appendix for details)*3 Impact of deconsolidation of TOTOKU :Net sales JPY (12.2) billion
Operating income: JPY (2.3) billion

6

FY23 results - Breakdown of changes in net sales(JPY billion)

(9.8)

0

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7

FY23 results - Breakdown of changes in operating income(JPY billion)

(8.5)

(4.8)

+9.8

0

*Including foreign currency exchange

Communications Solutions : (18.7)
Automotive Products & Batteries : +9.2
Electronics Component Material : (1.4)
Functional Products : +2.0
Others : +0.4

Communications Solutions : (1.7)
Automotive Products & Batteries : (2.0)
Electronics Component Material : (1.2)
Others : +0.1

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Communications Solutions : +1.2
Automotive Products & Batteries : +3.8
Electronics Component Material : +2.3
Functional Products : +1.6
Others : +0.9

Price optimization/Cost reductions +6.9
Impact of lower operating volumes (5.7)

8

FY23 Results
Net sales & Operating Income by Segment◼ Infrastructure

YoY change: Decreased operating income on lower net sales
Change from previous forecast Overperformed(operating income):

Infrastructure

Communications
SolutionsOperating income

Net Sales(JPY billion)

FY22
Results*FY23
Previous
forecasts

FY23
Results

a

b

323.9

265.0

217.6

160.0

YoY
changeChange fromprevious
forecasts

c

c-a

c-b

278.2

(45.7)

+13.2

168.0

(49.7)+8.0(+) Increase profits / (-) Decrease profit

FY22
Results*FY23
Previous
forecasts

FY23
Results

YoYchangeChange fromprevious
forecasts

d

e

f

f-d

f-e

(13.5)(11.3)(19.9)

+2.2

8.6

6.5

(14.5)(13.0)(19.5)+1.5

YoYchangeChange fromprevious
forecasts

Decreased income on lower revenue

Overperformed(-) Prolonged inventory adjustments,
restrained investment and project delays
by customers in the Americas(-) Productivity impact of lower operating
volumes(+) Increased revenue(+) Sales price optimization(+) Reduced fixed cost(+) Increased orders from recovering data
center related demand
Decreased income on higher revenue

Energyinfrastructure

106.3

105.0

110.2

+4.0

+5.2

2.1

1.0

1.7

(0.4)

+0.7

Generally as forecast(-) Large-scale projects delay to next fiscal
year and beyond(-) Increased depreciation expenses(-) Product compensation costs were incurred(+) Strong demand of functional power cable(Rakuraku aluminum cableⓇ, etc.)*Announced on February 8, 2024

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*Announced on February 8, 2024

9

FY23 Results
Net sales & Operating Income by Segment◼ Electronics &Automotive Systems

YoY change: Increased operating income on higher net sales
Change from previous forecast Overperformed(operating income):
Operating income

Net Sales(JPY billion)

Electronics &Automotive
Systems

Automotive
Products& Batteries

FY22
Results*1FY23
Previous
forecasts

FY23
Results

a

b

610.3

660.0

337.4

395.0

YoY
changeChange fromprevious
forecasts

c

c-a

c-b

653.7

+43.4

(6.3)

379.8

+42.4

*2
(15.2)(+) Increase profits / (-) Decrease profit

FY22
Results*1FY23
Previous
forecasts

FY23
Results

YoYchangeChange fromprevious
forecasts

d

e

f

f-d

f-e

15.5

18.7

+14.0

+3.2

4.7

1.5

13.0

15.6

+14.2

+2.6

YoY
changeIncreased income on higher revenue

Overperformed(+) Increased in automobile production(+) Improvement effects
・Improve productivity and reduce air
expenses by stabilizing customers’
production plans
・Sales price optimization(+) Lump-sum income from
customers due to market
fluctuations(+) Impact of foreign currency
exchange(-) Product compensation costs were incurred(-) Slowdown for Japanese OEM operating in
the Chinese market
Decreased income on higher revenue
Electronics
Component
Material

273.0

265.0

273.9

+1.0

+8.9

2.5

3.1

(0.1)

+0.6

(-) Product compensation costs
were incurred

Generally as forecast(-) Demand for electronics-related products
declined(+) Sales price optimization(+) Limited fixed expenses

1* Announced on February 8, 2024

*2

3.2

Change fromprevious
forecasts

1* Announced on February 8, 2024

Impact of elimination of intra-company transactions adjustment

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FY23 Results
Net sales & Operating Income by Segment◼ Functional Products

YoY change (excluding special factor*1): Increased operating income on higher net sales
Change from previous forecast Generally as forecast(operating income):(JPY billion)

Net Sales
1

Operating income
1(+) Increase profits / (-) Decrease profit

FY22
Results* FY22
Results(Excluding
special factor)*2FY23
Previous
forecasts

FY23
Results

YoYchangeChange fromprevious
forecasts

FY22
Results* FY22
Results(Excluding
special factor*)*2FY23
Previous
forecasts

FY23
Results

YoYchangeChange fromprevious
forecasts

a

a'

b

c

c-a’

c-b

d

d’

e

f

f-d’

f-e

YoY
changeIncreased income on higher revenue

Change fromprevious
forecasts

Generally as forecasts(+) Strong demand for generative AI andrenewable energy related products
Functional Products

126.5

114.2

120.0

115.4

+1.2

(4.6)*

3

4.2*2Announced on February 8, 2024

1.8

5.0

5.5

+3.7

+0.5

*2Announced on February 8, 2024

*1 Deconsolidation of TOTOKU from FY22Q4 : Net sales JPY (12.2) billion, Operating income: JPY (2.3) billion*3 Effect of elimination of consolidated net sales due to differences in fiscal year-ends (Jan-Dec) of overseas subsidiaries

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11

FY23 results - B/S summary(JPY billion)

Current assets

End of 22Q4*

End of 23Q4

Change

a

b

b-a

486.8

517.8

+30.9

Cash and bank deposits

47.4

48.9

+1.5

Notes and accounts receivable trade

229.6

245.7

+16.2

Inventories

172.3

183.6

+11.4

Non-current assets

446.6

467.2

+20.6

Property, plant and equipment

269.3

278.6

+9.4

Intangible assets

20.2

20.3

+0.0

Investments and other assets

157.1

168.3

+11.2

Total Assets

933.5

985.0

+51.5

Current liabilities

381.0

400.9

+19.9

Non-current liabilities

223.3

226.1

+2.7

Total Liabilities

604.4

627.0

+22.6

Shareholders' equity

283.5

284.7

+1.3

18.2

43.4

+25.2

27.4

29.9

+2.5

Total Net assets

329.1

358.0

+28.9

Total Lianbilities and Net
assets

933.5

985.0

+51.5

Interest-bearing debt

323.8

333.0

+9.2

Net interest-bearing debt

276.4

284.1

+7.7

Capital ratio

32.3%

33.3%

+1.0

0.9

0.9

(0.1)

5.5%

2.1%

(3.4)

Accumulated othercomprehensive income
Net income attributable tonon-controlling interests

NET D/E ratio
ROE

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Inventories
Increased by JPY 11.4 billion (including the impact of foreign currency exchange and copper
prices of JPY +8.4 billion)
Projects and construction planned to be recorded as net sales in the future＊Decreased by JPY10.6 billion compared to Q3

Property, plant and equipment & Intangible assets
Increased by JPY9.4 billion• Impact of CAPEX and depreciation: JPY+2.6 billion• Impact of foreign currency exchange: JPY +11.5 billion• Impact of deconsolidation: JPY (5.2) billion

Total assets
Increased by JPY 51.5 billion• Impact of foreign currency exchange: JPY +34.4 billion• Impact of new consolidation: JPY +0.5 billion

Other comprehensive income
Increased by JPY 25.2 billion
Foreign currency translation adjustments: JPY +15.7 billion(impact of yen depreciation)*Restated only the FY2022 financial results following the start of voluntary
application of the International Financial Reporting Standards (IFRS) at theequity method affiliate UACJ Corporation (Refer to the Appendix for details)

Free cash flow
FY22

FY23

JPY+14.8
billion

JPY + 7.1
billion12

FY24 Forecast Highlights◼ Increase in sales and profit at each stage
Establish forecasts based on the fact that semiconductor and optical cables markets slowly improve from thebottom in FY23, and stable automotive production plans（JPY billion, JPY/kg, JPY/USD）

FY23
Results

FY24
Forecasts

YoYchangeabb-a

1,056.5

1,080.0+23.5

Operating income

11.2

25.0

+13.8

Ordinary income

10.3

20.5

+10.2

Foreign exchange loss

Net income
attributable toowners of the parent

6.5

13.0

+6.5

Extraordinary income for the previous fiscal year:
Partial sales of overseas listed securities, etc.

Average copper price

1,262

1,155

(107)

Average exhange rate

145

140

(5)

Net Sales

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(Comparison with last year)

13

FY24 Forecasts - P/L Summary（JPY billion, JPY/kg, JPY/USD）

FY23

FY24

Results

Forecasts

YoYchangeabb-a

Breakdown of changes（Full year YoY）

1,056.5

1,080.0+23.5

See page 15

11.2

25.0

+13.8

See page 16（Margin）

1.1%

2.3%

+1.3

Interest revenues/expenses

(7.4)

-

-

Profit/loss in equity method affiliates

6.3

-

-

Foreign exchange gain/loss

(0.1)

-

-

10.3

20.5

+10.2

（Margin）

1.0%

1.9%

+0.9

Extraordinary income/loss

9.8

4.0

(5.8)

Income taxes(11.6)--Net income attributable to noncontrolling interests

(2.0)

-

-

Net income attributable toowners of parent

6.5

13.0

+6.5

0.6%

1.2%

+0.6

Average copper price

1,262

1,155

(107)

Average exhange rate

145

140

(5)

Net sales
Operating income

Ordinary income（Margin）

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14

FY24 Forecasts - Analysis of Changes in Net Sales(JPY billion)

＋23.5

0

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15

FY24 Forecasts
Breakdown of the Changes in Operating Income(JPY billion)

+13.8

0

Communications Solutions : JPY+3.2 billion
Energy Infrastructure : JPY+2.3 billion
Automotive Products & Batteries : JPY+3.2 billion
Electronics Component Material : JPY+0.7 billion
Functional Products: JPY+5.9 billion
Others : JPY+0.3 billion*including foreign
currency exchange

Increase in personnel expenses in other fixed
expenses : JPY(7.1) billion

Communications Solutions : JPY(0.3) billion
Energy Infrastructure : JPY(0.1) billion
Electronics Component Material : JPY(0.4) billion
Functional Products: JPY(0.6) billion
Others: JPY+0.1 billion

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Communications Solutions : JPY+7.3 billion
Energy Infrastructure : JPY+1.0 billion
Automotive Products & Batteries : JPY+5.4 billion
Electronics Component Material : JPY+1.8 billion
Functional Products: JPY+2.3 billion
Others : JPY(0.6) billion

16

FY24 forecasts - net sales and operating income by segment
JPY billion

Net sales

Operating income(Reference)

FY22
Results

FY23
Results

FY24
Forecasts

a

b

c

323.9

278.2

290.0

+11.8

8.6

(11.3)

(2.5)

+8.8

Communications Solutions

217.6

168.0

175.0

+7.0

6.5

(13.0)

(6.0)

+7.0

Energy infrastructure

106.3

110.2

115.0

+4.8

2.1

1.7

3.5

+1.8

610.3

653.7

650.0

(3.7)

4.7

18.7

21.0

+2.3

Automotive Products &Batteries

337.4

379.8

385.0

+5.2

1.5

15.6

16.5

+0.9

Electronics Component
Material

273.0

273.9

265.0

(8.9)

3.2

3.1

4.5

+1.4

Functional Products※

126.5

115.4

135.0

+19.6

4.2

5.5

10.0

+4.5

Service and Developments, etc.

31.7

31.6

30.0

(1.6)

(2.1)

(1.9)

(3.5)

(1.6)

(26.1)(22.4)(25.0)

(2.6)

0.1

0.1

0.0

(0.1)

1,066.3

1,056.5

1,080.0

+23.5

15.4

11.2

25.0

+13.8

114.2

115.4

135.0

+19.6

1.8

5.5

10.0

+4.5

Infrastructure

Electronics & Automotive Systems

Elimination of intra-company transactions

Total

YoY change

FY22
Results

FY23
Results

FY24
Forecasts

YoY change

c-a

d

e

f

f-e

*2

JPY/kg
JPY/USD

FY22
Results

FY23
Results

FY24
Forecasts

Averagecopper
price

1,209

1,262

1,155

Averageexchange
rate

135

145

140

※Reference

Functional Products(Excluding special factor*1 on FY22)*1Deconsolidation of the TOTOKU from FY22Q4

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*2 Substantially increase revenue excluding impact of changes in copper prices

17

FY24 forecasts - operating income by segment
Operating income of main segments
JPY billion

Segments

Sub-segments

Infrastructure

Communications
Solutions

FY22
Results

6.5

Income image compared to the last half

FY23 Results

FY24 Forecasts

H1

H1

H2

(13.0)(6.0)

EnergyInfrastructure

2.1

Electronics &Automotive
Systems

Automotive
Products &Batteries

1.5

Electronics
Component
Material

3.2

Functional Products(Excluding special factor*)

2.3

1.8

Consolidated total(Include special factor*, service anddevelopments segment, elimination)

15.4

renewable energy products (weighted in the second half)• Moderate economic recovery in China+0.9 • Stabilization of automobile production plans• Increase in models equipped with aluminum wire harnesses

4.5+1.4 • Electronics-related business recovered (second half of
FY24)• Improvement of product mix

2.5

10.0

+4.5 • Gradual recovery in demand for semiconductors and harddisk-drive related products• Strong demand related to generated AI

3.4

11.2
(4.6)

+1.8 • Increase in domestic sales related to extra-high voltage and• Capture demand, including new customers, bystrengthening the production and sales structure

13.3

5.5
2.1

3.5

16.5

3.1
0.6

+7.0 • Demand recovering

4.4

15.6

Premise of FY24 forecasts

(6.0)
(6.9)

1.7
(2.6)

H2

YoY
change

25.0

+13.8

15.8

*Deconsolidation of the TOTOKU from FY22Q4

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18

Net Sales and Operating Income by Segment

1-(1) Infrastructure (Communications Solutions)
FY24_Forecasts(JPY billion)

FY22
ResultsaIncrease in net sales and income
FY23
Resultsb

FY24
Forecastsc

YoYchangec-b

Net sales

217.6

168.0

175.0

+7.0

Operatingincome6.5(13.0)(6.0)+7.0
Premise of business environment【Factors affecting profits】(+) Increase operation and improve productivity
in line with recovery in demand for opticalfiber & cable in North America(+) Increase orders of data center related
products(-) Increase in fixed costs due to recovery indemand＞＞Fiber & cable

FY24_H1

FY24_H2

Recovery in demand

Optical device/
Networking related
products in Japan＞＞

Elimination of customers' inventory adjustments
Cable demand through BEAD*1 programs

Demand for the data center market
Weighted heavily in the second half

Key points••

Shift from general-use products to high-value-added products and solutions
Develop new customers and strengthen production and sales structure in the data center and
FTTx market
Rollable ribbon cable

Networking systems*2

ITLA*3/DFB*4*1 Broadband Equity Access and Deployment Program*2 Fiber To The x (generic term for communications service networks using optical fiber)*3 Integrated Tunable Laser Assemble*4 Distributed Feedback Laser

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19

Net Sales and Operating Income by Segment

1-(2) Infrastructure (Energy Infrastructure)
Increase in sales and income

FY24_Forecasts(JPY billion)

FY22
Resultsa

FY23
Resultsb

FY24
Forecastsc

YoYchangec-b

Net sales

106.3

110.2

115.0

+4.8

Operatingincome

2.1

1.7

3.5

+1.8

【Factors affecting profits】(+) Large-scale projects such as domestic extrahigh voltage cables and renewable energy
submarine lines(+) Functional power cable (Rakuraku aluminum
cableⓇ, etc.) and transmission and distribution
components(-) Increased fixed cost such as depreciation and
R&D expenses

Premise of business environment＞＞

FY24_H1

FY24_H2

Japan extrahigh voltage
Submarine
lines

Demand such as domestic renewal and renewable energy projects/construction projects concentrated in the second half

China

Moderate economic recovery

Functional power
cable/components

Steady demand

Key points•

Secure orders with a focus on profits, and optimize sales prices
Domestic underground extra-high voltage power cable••

Renewable energy projects

Increase cable manufacturing and installation capacity
Increased sales by promoting marketing activities
Rakuraku aluminum cableⓇ

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Transmission and distribution components

20

Net Sales and Operating Income by Segment

2-(1) Electronics & Automotive Systems (Automotive Products & Batteries)
FY24_Forecasts(JPY billion)

FY22
ResultsaIncrease in sales and income
FY23
Resultsb

FY24
Forecastsc

YoYchangec-b

Net sales

337.4

379.8

385.0

+5.2

Operatingincome

1.5

15.6

16.5

+0.9

【Factors affecting profits】(+) Slight increase in automobile production(-) Increase fixed cost such as depreciation
and R&D expenses

Premise of business environment＞＞

FY24_H1

FY24_H2＞＞

Automotive
Products

Customer production plans are generally stable
Slight increase in automobile production
Increase in the number of models equipped with aluminum wire harnesses

Batteries

Both automotive and industrial sales concentrated in the second half

Key points•

Develop products and respond to autonomy for the electric vehicle market
Aluminum wire harness (including high-voltage products)

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21

Net Sales and Operating Income by Segment

2-(2) Electronics & Automotive Systems (Electronics Component Material)
FY24_Forecasts(JPY billion)

Decrease in sales and increase in income

FY22
Resultsa

FY23
Resultsb

FY24
Forecastsc*Real sales increase excluding the impact of changes in copper prices

YoYchangec-b(Reference: Average copper price JPY/kg)*

Net sales

273.0

273.9

265.0

(8.9)

Operatingincome

3.2

3.1

4.5

+1.4

【Factors affecting profits】(+) Recovery of demand for electronics
related products(+) Improvement of product mix

FY22
Results

FY23
Results

FY24
Forecasts

1,209

1,262

1,155

Premise of business environment＞＞

FY24_H1＞＞

FY24_H2

Demand for automotive-related products are firm(-) Increase fixed cost such as
depreciation

Recovery in electronics-related demand

Key points•

Promote and expand sales of high-value-added products

Heat-resistant oxygen-free copper strips(for power semiconductors/heat dissipation components)•
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Ribbon cable and ultra fine flat wire(for 5G telecommunications)High performance products(resistance materials)

Optimize sales prices and withdraw from low-margin products

22Net Sales and Operating Income by Segment

3 Functional Products
FY24_Forecasts

Increase in sales and income*(JPY billion)

FY22
Results

FY22
Results(Excluding
special factor)

FY23
Results

FY24
Forecasts

YoYchange

a

a’

b

c

c-b

Net sales

126.5

114.2

115.4

135.0

+19.6

Operatingincome

4.2

1.8

5.5

10.0

+4.5

* special factor : the effect of deconsolidation of the TOTOKU from FY22Q4

Premise of business environment【Factors affecting profits】(+) Demand recovery and elimination inventory of
adjustments in the supply chain(+) Favorable demand for generated AI＞＞

FY24_H1＞＞

FY24_H2

Moderate recovery in global demand for smartphones, PCs. and HDD related products

Gradual elimination of inventory adjustments in the supply chain
Generated AI-related investments continue to be brisk(-) Increase fixed cost such as depreciation and R&D
expenses

Key points•

Continue to increase sales of high value-added products for data center andrenewable energy markets

Tape for semiconductor
process•
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High performance heatdissipation and cooling products

Aluminum blanks for HDD

Copper foil for highfrequency circuit boards

Establish a manufacturing structure to meet the growing demand for generated
AI and semiconduc​tor-relate​d​ products

23

CAPEX, Depreciation & amortization and R&D expenses■ Continue the activities directed at increasing business profits and realizing future growth【R&D expenses】
Continue to invest in R&D aimed at future growth【CAPEX】
Make appropriate investments in line with market
trends(JPY billion)

*FY23

FY22
FY23
Previous
Results Forecasts Results(JPY billion)

YoYchangeChangefromprevious
forecasts

FY24
Forecasts

YoYchangeFY22
Results*FY23
Previous
Forecasts

FY23
Results

YoYchangeChangefromprevious
forecasts

a

b

c

c-a

c-b

d

d-c

23.3

26.0

24.5

+1.2

(1.5)

26.0

+1.5

a

b

c

c-a

c-b

d

d-c

CAPEX

43.8

43.0

39.0

(4.8)

(4.0)

48.0

+9.0

Depreciation andamortization

39.1

39.0

39.0

(0.1)

(0.0)

41.0

+2.0

R&D expenses

FY24
YoY
Forecasts change*Announced on November 9, 2023

*Announced on November 9, 2023

FY23 Results : JPY39.0 billion
Service &Communications Solutions
Developments,
etc. 12%
Infrastructure
25%
EnergyInfrastructure
Functional
Products
23%Electronics &Automotive Systems
40%
Electronics Component
Material

Automotive Products &Batteries

FY24 Forecasts : JPY48.0 billion
Service &Developments, etc.
17%

Communications
Solutions

Infrastructure
32%
Functional
Products
13%

EnergyInfrastructure

Electronics &Automotive Systems
38%
Electronics Component

FY23 Results : JPY24.5 billion
Service &Developments, etc.
19%
Functional
Products
8%Electronics
Component Material

Service &Developments, etc.
21%

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Communications
Solutions

Communications
Solutions

Infrastructure
52%

Electronics &Automotive Systems
21%

Material

Automotive Products &Batteries

FY24 Forecasts : JPY26.0 billion

Functional
Products
8%Electronics
Component Material

Electronics &Automotive Systems
22%

Automotive Products &Batteries

Automotive Products &Batteries
EnergyInfrastructure

Infrastructure
49%

EnergyInfrastructure24II. Progress of the 2025 Mid-term Plan

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1. Recognition of the current situation

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26

1. Recognition of the current situation◼ Overall demand is recovering in FY24. While the recovery timing and size are expected to be careful,we will steadily capture the opportunities for earnings growth in the second half, leading to FY25.
Operating income of main segments repost page 18
JPY billion

Segments

Sub-segments

Infrastructure

Communications
Solutions

FY22
Results

6.5

FY23 Results

FY24 Forecasts

H1

H1

H2

(13.0)(6.0)

EnergyInfrastructure

2.1

Automotive
Products &Batteries

1.5

Electronics
Component
Material

3.2

Functional Products(Excluding special factor*)

1.8

Consolidated total(Include special factor*, service anddevelopments segment, elimination)

15.4

+1.8

FY25
16.5

+0.9

4.5

+1.4

10.0

+4.5

3.4

11.2
(4.6)

3.5

2.5

5.5
2.1

+7.0

13.3

3.1
0.6

(6.0)

4.4

15.6
2.3

H2

YoY
change

(6.9)

1.7
(2.6)

Electronics &Automotive
Systems

Income image compared to the last half

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More than JPY58.0
billionIncluding special factor*
JPY4.2 billion

25.0
15.8

Operating incometarget+13.8*Deconsolidation of TOTOKU from FY22Q4

27

1. Recognition of the current situation
FY22(2nd year of the 2025 Mid-term Plan)⚫

Automotive market recovered, and thesemiconductor/ US optical cable markets deteriorated
Yen steadily weakened against the US dollar, anddomestic consumer prices rose

⚫ Strong market for AI related products, and semiconductor/ US
optical cable markets will recover⚫ Increased political/ economic uncertainty, and greater market
volatility⚫

Although steady progress was made in the initiatives
to improve earnings capability, further improvements
need to be made in response to the changing businessenvironment⚫
⚫

Business
environment ⚫
Status ofbusinesses

Toward FY2025

Enhance the ability to respond to risk through scenario planning
Promote transition to a profit structure that is not affected by the market
environment

Communications Solutions

Sales declined due to the rapid market deterioration andprolonged downturn

Shift to high-value-added products, acquire new customers andstrengthen the sales & manufacturing structures

EnergyInfrastructure

Japan extra-high voltage underground cable projects andindustrial power cable were firm

Continue to accept orders with a focus on profit, and strengthen
the business foundation based on medium to long-term growth

Automotive
Products &Batteries

Automobile production plans stabilized, and production
volumes increased. Progress was made in improving
productivity and optimizing sales prices

Develop products and respond to autonomy for the electricvehicle market

Electronics
Component
Material

Although automotive products recovered, electronics
related demand was weakContinue and strengthen the initiatives to improve the productmix and optimize sales prices

Functional
Products

Although demand was weak overall, generative AI related
products drove the financial results

Quickly respond to the market recovery and growth (prepare theproduction system and develop next-generation products)

Financialresults

Although the results fell below the initial forecast, Automotive
Products & Batteries and Functional Products recovered and grew,
and the Communications Solutions business appears to havebottomed

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Connect the initiatives aimed at increasing earnings to tangible results(Target set in 2025 Mid-term Plan remains unchanged)28

2. Progress of priority measures

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29

2. Progress of priority measures
Despite severe performance in FY23, steady progress was made in the priority measures in
the 2025 Mid-term Plan toward PBR of more than one at an early stage

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2. Progress of priority measures(1) Maximizing revenues in existing businesses
In the Communications Solutions business, initiatives aimed at improving earnings are being
conducted
We are aiming to increase profit through stable earnings in the Automotive Products & Batteriesbusiness and further growth in the Functional Products business
More than 6%

ROIC

3.7%

More than 58.0

3%
2.3%

Operatingincome(JPY billion)

25.0
15.4
11.2

FY22 Results

FY23 Results

FY24 Forecasts

FY25 Targets

Communication Solutions

Energy Infrastructure

Automotive Products & Batteries

Electronics Component Material

Functional Productspart of the TOTOKUService and Developments, etc.
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2. Progress of priority measures(1) Maximizing revenues in existing businesses
Making steady progress in the initiatives for each business. In addition, increase profits bygrowing AI and data center markets
Power cablesystems

Existing

Markets

New

New businesses to be realized by 2030

Enhance under the2025 Mid-term Plan

Wire harnesses

Growing the number ofordersExpansion of the
manufacturing facilities
and installation capacity

Launching and sales
expansion of new products
Satisfying new customer
specifications
Establishment of stable supply
system(start of mass production at new
factories in FY25)

AI and data center markets

Thoroughly
enhance

Optical fiber andcable• Optical fiber & cable・光ファイバ・ケーブル• Power cable systems
・電力ケーブルシステム• Wire harnesses
・ワイヤハーネス• Tape for semiconductor
・半導体製造用テープ

Shift to high-value-added
products and solutions

process

Existing

Development and sales
expansion of aluminumand high-voltage
products

Tape for semiconductor process

New

Developing new clients

Opticalcomponents
Strengthen manufacturing
structure and expansion of
DFB and ITLA

Heat radiation andcooling systems
Development of highperformance,
differentiated products
Provision of totalsolutions

Products
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32

2. Progress of priority measures(1) Maximizing revenues in existing businesses-Communications Solutions

Demand is expected to recover.
Capture growing demand by improving product mix and strengthening the production andsales structureMarket outlook
Optical cable inNorth America
Central and SouthAmerica
Opticalcomponents

Data center: Continued favorable performance
Telecom: Gradual recovery from second half of FY24
Full scale recovery from FY25
(including impact of BEAD)

Data Center, Enterprise: Steady
Telecom: Uncertain recovery

Initiatives aimed at increasing sales
Product
mix/
Sales⚫ Capture the strong data center demand⚫ Steady capture of carrier demand, including
BEAD projects⚫ Expansion of high-value-added productportfolio

Manufac-turing⚫ Strengthen employment system inpreparation for a recovery in orders⚫ Continue to improve productivity⚫ Strengthen manufacturing system for coreproducts (ultra-multi-core cable, FTTx *3
products, DFB*4, ITLA*5)

Recovery and growth from FY24 centered ondata centers

Sales of our optical fiber and cable

General purpose products
BEAD*1/BABA*2
High value added products and solutions

2023
Results2025
Forecasts

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＊1 Broadband Equity Access and Deployment Program＊2 BABA: Build America Buy America Act＊3 Fiber To The x＊4 Distributed Feedback Laser＊5 Integrated Tunable Laser Assemble33

2. Progress of priority measures(2) Building a foundation for creating new businesses
Making progress in the initiatives aimed at creating
new businesses

Main initiatives
B5G/6G• Promoting the development
Photonicsof next-generation signal
electronics
light sources and integrated
convergencedevices

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Super
Conductors• Invested in Tokamak Energy• Strengthening production
system for wire rods

Infrastructure
laser• Expanding the scopeLifesciences• Expansion of unique
technologies into the medical
field

Green
LPG

• Construction of a bench plantfor demonstration

34

2. Progress of priority measures(3) Strengthening the foundation for ESG management
Steady progress toward achieving sustainability targets
FY23

Although some indicators such as employee engagement scores did not achieve the target, theother indicators should be achieved
Set new targets for some indicators
GHG emission reduction ratio:
Change the baseline year

Employee engagement scores:
Set consolidated targets

FY24

GHG emissions (Scope 1, 2)(1,000 tons CO2e)
1,000
900
800
700

Old target

Sustainability
target600

Nonconsolidated

FY23
Result

65*

63

500

FY24
Target

FY25
Target

New target

400

New target

300

Consolidated

200

76

77

80

100
0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

expected

FY25

Revised
2030
Environmental
targets

FY22
Result*Survey covers only indirect departments

Aim to achieve all of the sustainability indicators and targets set in the 2025 Mid-term Plan

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35

3. Business portfolio optimization andallocation of management resources

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36

3. Business portfolio optimization andallocation of management resources

Implementing initiatives to optimize business portfolio
Appropriate resource allocation
and business management basedon the management indicator(ROIC,FVA*) are firmly established

Steady progress in businessportfolio transformation

Continue efforts to improve thefinancial situation and generate
cash<Projects in Progress>• Improve Cash Conversion Cycle

Improved profitability: 2 projects,
growth strategy: 2 projects, etc.

• Reducing asset holdings, etc.

<Projects implemented>•

Consolidation of MFOPTEX Co., Ltd.

•

Transfer of interests in Essex Furukawa
Magnet Wire LLC•

Sale of shares of the TOTOKUELECTRIC CO., LTD.

•

Integrating the manufacturing businessof general-purpose wire for theconstructi​on/electri​c​ sales market into
Showa Furukawa Cable Co., Ltd.

•

Consolidation and closure of opticalfiber & cable manufacturing bases*FVA(Furukawa Value Added) : Value added to invested capital
Arranged EVA for us and introduced it as an internal control
indicator in FY2022.

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37

3. Business portfolio optimization andallocation of management resources
Basic policy on shareholder returns
The Company's basic policy is to provide stable and continuous returns to shareholders and to link
dividend payments to business performance, with a target of 30% of net income attributable to owners of
the parent

Dividends for FY23 and FY24
■ For FY23, the dividend of JPY 60 per share will be issued■ For FY24, we plan to issue a dividend of JPY 60 per share
Annual dividend per share (JPY)
80
60

60

60

FY21

FY22

FY23(planned)

FY24(forecast)

FY25(forecast)

Net income attributable toowners of the parent

JPY10.1 billion

JPY15.9 billion*

JPY6.5 billion

JPY13.0 billion

More than
JPY37.0 billion

Dividend payout ratio

41.8%

35.4%

64.9%

32.5％

30% (target)*Restated only the FY2022 financial results following the start of voluntary application of the International Financial Reporting Standards (IFRS) at the equity method affiliate UACJ Corporation (Refer to the Appendix for details)

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38

4. Management targets (Financial targets)

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39

3. Management targets (Financial targets)

FY25 financial targets remain unchanged
FY22 (Results)

FY23 (Results)

FY24 (Forecasts)

FY25 (Targets)

ROIC (after tax)

3.7％

2.3％

3％

More than 6%

ROE

5.5％*

2.1％

4％

More than 11%

Net D/E ratio

0.9

0.9

0.8

Less than 0.8

Capital ratio

32.3％*

33.3％

34%

More than 35%

Net sales

JPY1,066.3 billion

JPY1,056.5 billion

JPY1,080.0 billion

Operatingincome

JPY15.4 billion

JPY11.2 billion

JPY25.0 billion

Net income attributableto owners of the parent

JPY15.9 billion*

JPY6.5 billion

JPY13.0 billion

Average copper price(JPY/Kg)

1,209

1,262

1,155

1,085

Average exchange rate
(JPY/USD)

135

145

140

110

More than
JPY 1,100.0 billion
More than
JPY 58.0 billion
More than
JPY 37.0 billion*Restated only the FY2022 financial results following the start of voluntary application of the International Financial Reporting Standards (IFRS) at the equity method affiliate UACJ Corporation (Refer to the Appendix for details)

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40

Thank you very much for your attention

All Rights Reserved, Copyright© FURUKAWA ELECTRIC CO., LTD. 2024

Appendix

All Rights Reserved, Copyright© FURUKAWA ELECTRIC CO., LTD. 2024

42

Appendix
•
•
•
•
•
•
•

FY23 Net sales and operating Income by segment
FY22-25 Net sales and operating Income by segment
FY23, 25 ROIC by segment
FY22-25 cumulative Capital expenditure and R&D expenses
Sustainability indicators and targets
Changes from FY23 (P/L, B/S)
Segment and business unit

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43

Appendix
FY23 Net sales and operating Income by segment(JPY billion)

Net sales

Operating income

FY22
Results

FY22
Results(excluding
special factor)

FY23
Previous*
forecasts

FY23
Results

YoYchangeYoY change(excluding
special factor)

Change fromprevious
forecasts

a

a'

b

c

c-a

c-a’

c-b

323.9

323.9

265.0

278.2

(45.7)(45.7)+13.2

8.6

Communications Solutions

217.6

217.6

160.0

168.0

(49.7)(49.7)+8.0

Energy infrastructure

106.3

106.3

105.0

110.2

+4.0

+4.0

610.3

610.3

660.0

653.7

+43.4

Automotive Products &Batteries

337.4

337.4

395.0

379.8

Electronics Component
Material

273.0

273.0

265.0

Functional Products

126.5

114.2

Service and Developments, etc.

31.7

Infrastructure

Electronics & Automotive Systems

Elimination of intra-company transactions

Total

FY22
Results

FY22
Results(excluding
special factor)

FY23
Previous*
forecasts

FY23
Results

YoYchangeYoY change(excluding
special factor)

Change fromprevious
forecasts

a

a'

b

c

c-a

c-a’

c-b

8.6

(13.5)(11.3)(19.9)(19.9)

+2.2

6.5

6.5

(14.5)(13.0)(19.5)(19.5)

+1.5

+5.2

2.1

2.1

1.0

1.7

(0.4)

(0.4)

+0.7

+43.4

(6.3)

4.7

4.7

15.5

18.7

+14.0

+14.0

+3.2

+42.4

+42.4

(15.2)

1.5

1.5

13.0

15.6

+14.2

+14.2

+2.6

273.9

+1.0

+1.0

+8.9

3.2

3.2

2.5

3.1

(0.1)

(0.1)

+0.6

120.0

115.4

(11.1)

+1.2

(4.6)

4.2

1.8

5.0

5.5

+1.3

+3.7

+0.5

31.7

30.0

31.6

(0.2)

(0.2)

+1.6

(2.1)

(2.1)

(2.0)

(1.9)

+0.2

+0.2

+0.1

(26.1)(26.1)(35.0)(22.4)

+3.8

+3.8

+3.8

0.1

0.1

0.0

0.1

+0.0

+0.0

+0.1

1,066.3

1,054.1

1,040.0

1,056.5

(9.8)

+2.5

+2.5

15.4

13.1

5.0

11.2

(4.3)

(1.9)

+6.2

*Announced on February 8, 2024

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*Announced on February 8, 2024

44

Appendix
FY22-25 Net sales and operating Income by segment(JPY bilion)

Sales
Infrastructure

FY22 results
Operatingincome

Ratio

Sales

FY23 results
OperatingincomeRatio

FY24 forecasts
OperatingSales
income

Ratio

Sales

FY25 targets
Operatingincome

Ratio

323.9

8.6

2.7%

278.2

(11.3)(4.0%)

290.0

(2.5)

(0.9%)

360.0

16.0

4.4%

Communications
Solutions

217.6

6.5

3.0%

168.0

(13.0)(7.7%)

175.0

(6.0)

(3.4%)

230.0

11.5

5.0%

Energy Infrastructure

106.3

2.1

2.0%

110.2

1.7

1.6%

115.0

3.5

3.0%

130.0

4.5

3.5%

610.3

4.7

0.8%

653.7

18.7

2.9%

650.0

21.0

3.2%

590.0

23.5

4.0%

337.4

1.5

0.4%

379.8

15.6

4.1%

385.0

16.5

4.3%

330.0

16.5

5.0%

273.0

3.2

1.2%

273.9

3.1

1.1%

265.0

4.5

1.7%

260.0

7.0

2.7%

Functional Products

126.5

4.2

3.3%

115.4

5.5

4.8%

135.0

10.0

7.4%

165.0

19.5

11.8%

Service andDevelopments, etc.

31.7

(2.1)

(6.6%)

31.6

(1.9)

(6.0%)

30.0

(3.5)

(11.7%)

40.0

(1.0)

(2.5%)

1,066.3

15.4

1.4%

1,056.5

11.2

1.1%

1,080.0

25.0

2.3%

1,155.0

58.0

5.0%

114.2

1.8

1.6%

115.4

5.5

4.8%

135.0

10.0

7.4%

143.3

15.3

10.7%

Electronics &Automotive Systems
Automotive Products& Batteries
Electronics
Component Material

Total(Reference)
Functional Products(Excluding special factor*)*Deconsolidation of the TOTOKU from FY22Q4

JPY/kg, JPY/USD
Average copper price
Average exchange rate

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FY22

1,209
135

FY23

1,262
145

FY24

1,155
140

FY25

1,085
110

45

Appendix
FY23, 25 ROIC by segment
Steadily optimize the business portfolio, and aim to achieve ROIC of at least 6% by FY25
Furukawa Electric (group total) and each sub-segment (FY23 actual ➡ FY25 target)

FY23●Total●Energy Infrastructure●Communications Solutions●Automotive Products & Batteries ●Electronics Component Material●Functional Products*1*1 Deconsolidation of the TOTOKU from FY22Q4

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FY25

Vertical ↑ : Sales CAGR*2 (FY22 - 23→FY22 - 25)
Horizontal → : ROIC
Bubble○ : NOPAT※Negative value for the white balance of the bubble＊2

FY25 net sales are adjusted to foreign exchange average of FY24 forecast

46Appendix
FY22-25 cumulative Capital expenditure and R&D expenses●Capital expenditure●R&D expenses
Service andDevelopments, etc.

Functional
Products

Communications
Solutions

JPY180.0
billionService andDevelopments, etc.

Functional
Products
EnergyInfrastructure

Electronics Component
Material

Electronics
Component Material

Communications
Solutions

JPY100.0
billionAutomotive Products &Batteries
Automotive Products &Batteries【Major Priority Areas】

EnergyInfrastructure＊Shaded areas are for FY24 and 25
Existing businesses

New businesses

Communications Solutions●●Optical fiber and cable (Rollable ribbon (RR) cable, etc.), Optical devices●Networking systems●Photonics-electronics convergence, hybrid lasers

Energy Infrastructure●●Longer cable lengths

Automotive Products & Batteries●●Wire harnesses (Including BCP related responses)●Steering rollconnectors(SRC), Peripheral monitoring radar

Functional Products●Tape for semiconductor process, Data center related products●Data center related products

Service and Developments, etc.

●Renewal of Group core business systems, Shared facilities● Life science, social infrastructure DX

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Appendix
Sustainability indicators and targets
FY23 : Steady progress in the second year of target management
FY24 : Environment-related and engagement score targets changed
FY23 Targets

FY23 Results

FY24 Targets

FY25 Targets

Revenue
Opportunities

Create businesses that solve social issues
Consolidated
Sales ratio of environmentally friendly products
Open, Agile, Innovative / Build partnerships with various stakeholders

66%

66％ (Expected)

68%

70%

R&D expense growth rate for new businesses (compared to FY21)

Consolidated

Implementation rate of IP landscaping for strengthening the businesses
and themes for creating new businesses*1

Consolidated

125％
45%

121％
77％

125%
100%*2

125%
100%

E Develop business activities that consider climate change
GHG emissions reduction rate (Scope1,2)

Consolidated

Ratio of renewable energy use to total consumption

Consolidated

Risks

Compared to FY17

Compared to FY17

Compared to FY21

Compared to FY21(21.2％)
12%(46％) (Expected)
31％ (Expected)(14.0%)*3
25%(18.7%)

63(76:Consolidated)
5.4％
49％

77*4
6%
30%

80
7%
30%

100％
65％
100％

100%
70％
100％

100%
100％
100％

S Strengthen human capital management and organizational execution abilities
Non65
Employee engagement scoresconsolidated Consolidated
Non5%
Ratio of female managers
consolidated
NonRatio of career track hiring among total new staff hiring
30%
consolidated(managers, generalist, specialist)*5
G Build a governance system to strengthen risk management
Ratio of follow-up on risk management activities for all risk domains
Ratio of SAQ implementation based on the CSR Procurement Guidelines
for major suppliers
Implementation rate of human rights training for managerial positions*6

Consolidated
Consolidated
Consolidated

100％
40％
100%

30%

*1Target themes set in FY22 *2Target on FY25 moved forward *3Reflect the revised environmental target 2030 *4Change to consolidated target *5Maintain around 30% in each fiscal year *6Maintain 100% in each fiscal year

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Appendix
Changes from FY2023 – P/L◼ UACJ Corporation (equity method affiliate) started voluntary application of the International
Financial Reporting Standards (IFRS)As a result of the above change, the financial results for FY2022 have been restated(JPY billion)

FY22

Net sales

1,066.3

1,066.3

15.4

15.4

（Margin）

1.4%

1.4%

Interest revenues/expenses

(5.2)

(5.2)

Profit/loss in equity method affiliates

6.0

3.6

Foreign exchange gain/loss

1.7

1.7

19.6

17.3

（Margin）

1.8%

1.6%

Extraordinary income/loss

10.7

10.7

Income taxes

Operating income

Ordinary income(10.7)(10.3)Net income attributable to non-controllinginterests

(1.7)

(1.7)

Net income attributable toowners of parent

17.9

15.9

1.7%

1.5%

（Margin）

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Appendix
Changes from FY2023 －B/S
◼ UACJ Corporation (equity method affiliate) started voluntary application of the International Financial
Reporting Standards (IFRS)As a result of the above change, the financial results for FY2022 have been restated(JPY billion)

Current assets

End of 22Q4

End of 22Q4

486.8

486.8

Cash and bank deposits

47.4

47.4

Notes and accounts receivable trade

229.6

229.6

Inventories

172.3

172.3

Non-current assets

448.0

446.6

Property, plant and equipment

269.3

269.3

Intangible assets

20.2

20.2

Investments and other assets

158.5

157.1

Total Assets

934.8

933.5

Current liabilities

381.0

381.0

Non-current liabilities

222.8

223.3

Total Liabilities

603.8

604.4

Shareholders' equity

280.6

283.5

23.0

18.2

27.4

27.4

Total Net assets

331.0

329.1

Total Lianbilities and Net
assets

934.8

933.5

Interest-bearing liabilities

323.8

323.8

Capital ratio

32.5%

32.3%

0.9

0.9

6.1%

5.5%

Accumulated othercomprehensive income
Net income attributable tonon-controlling interests

NET D/E ratio
ROE

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Appendix
Segments and Business Divisions
Segment

Sub-segment

Business Division
Optical Fiber and Cable Products

Communications
Solutions
Infrastructure

FITEL Products
Broadband Solutions Business

Energy Infrastructure

Power Cable
Industrial Cable & Power Cable Accessories

Automotive Products

Automotive ProductsElectronics & Automotive& Batteries

Batteries

Systems

Electronics Component

Electric Conductor (including fine magnet wire)

Material

Copper & High Performance Material Products
AT & Functional Plastics

Functional Products

Thermal Management Solution & Products
Memory Disk
Copper Foil

Service and Developments, etc.

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