Securities Code 5208

29th Oct, 2020

http://www.arisawa.co.jp

Medium-Term Business Plan
（FY2020 － FY2024）

Arisawa Mfg. Co., Ltd.

Management policy

Management policy
On the basis of the motto "Creation, Innovation and Challenge",
we pledge to:
Ⅰ create new values and enhance customer satisfaction;
Ⅱ discover customer demands and create new businesses
with our creative technologies; andⅢ strengthen corporate structure by improving our quality
and productivity.

Arisawa Mfg. Co., Ltd.

1／17

Contents
Ⅰ. Policy of Medium-Term Business Plan 2Ⅱ. Business Strategy
3～11
Ⅲ. Financial Strategy
12～14
Ⅳ. SDGs, Corporate Governance
15～17

Business Plan

Ⅰ Policy of Medium-tem business plan
Introduce ROIC as a new benchmark for business management, and maximize
the company's value with both business strategy and financial strategy.

Business strategy

Financial strategy

Strengthen theprofitability

Improve the capitalefficiency

 Strengthen the earning
management with ROIC Delve into the existing
business
 Create a new businessMaximize
thecompany’svalue

 Change non-businessassets into businessassets
 Enhance shareholder
returns

Contribute to sustainable societiesArisawa Mfg. Co., Ltd.

2／17

Contents
Ⅰ. Policy of Medium-Term Business Plan 2
Ⅱ. Business Strategy
3～11
Ⅲ. Financial Strategy
12～14
Ⅳ. SDGs, Corporate Governance
15～17

Business Strategy

Ⅱ Business Strategy
Enhance the profitability with “Delving into the existing business”
and “creating a new business”.

Delving into the existingbusiness Development of differentiated productswith the unique technology
 Thorough cost reduction
 Improvement of the production
capability and efficiency

Creating a new business External growth by flexible M&A
 Internal growth by new productdevelopment using the existingtechnology● Development of a new use and field in cooperation with
our group companies

Strengthen theprofitability
Arisawa Mfg. Co., Ltd.

3／17

Business Strategy

Ⅱ‐1‐1 Electronics raw materials segment
Aim for growth in the core business fields as two strategies■ Create customer value with unique products
and grow continuously■Develop new products in cooperation

Sales (Million yen)with our group companies and60,000

move forward with overseas expansion

50,000

Annual average growth rate 6.8%

Creating a new business

Develop a business insemiconductor and in-car field30,000■Develop new products and20,000

enter a new field

10,000■ Expand businesses in growing fields
by enhancing competitiveness ofproduction and technology

Arisawa Mfg. Co., Ltd.

29,76530,700

'20/3

'21/3

035,600（ Actual ） （ Forecast ）40,000～40,000～Delving into the existing business

Enhance the business in mobile field

'23/3

'25/3

（ Plan ）（ Plan ）4／17

Business Strategy

Ⅱ-1-2 Industrial raw materials, Insulation materials segment
Aim for more growth by developing unique products
transportation infrastructure field■ In-car ： Differentiation with uniquetechnologies, new entry to the market■ Aircraft ： Increasing added value by
anticipating needs

Sales (Million yen)

25,000

Annual average growth rate 14.7%

19,200

Expand the profits in water treatment field 20,000
15,000Develop a business in insulation materials

10,000■ Focus on high thermolysis and14,30011,959

11,100

'20/3

'21/3

5,000

superconduction

Arisawa Mfg. Co., Ltd.

0（ Actual ） （ Forecast ）～Creating a new business■ Creating new demands by developing
high-performance products～

Delving into the existing business

Enhance the business in'23/3'25/3（ Plan ）（ Plan ）5／17

Business Strategy

Ⅱ-1-3 Display materials segment
Aim for growth by enhancing unique technology
display for medical use■ Expand the share in endoscope and microscope,and acquire overseas customers■ Expand sales channels for

Sales (Million yen)

5,000

telemedicine and robotic use■ Meet the needs for higher

Annual average growth rate 3.5%
4,000
3,000

Develop a business in a new field

2,000

3,100

2,9002,700■ Develop next-generation in-car display
materials and new pasting technologies 1,000■ Develop a new touchless sensor display
and expand its sales channels

Arisawa Mfg. Co., Ltd.

0'20/3'21/3（ Actual ） （ Forecast ）～Creating a new business

definition display

3,427

～

Delving into the existing business

Enhance the business in high-definition

'23/3

'25/3

（ Plan ）（ Plan ）6／17

Business Strategy

Ⅱ-2 Priority fields for differentiated products
Priority fields

Develop differentiated products with a focus on the fields
where growth is expected.

Information
deviceInnovation for IoT
society

Nextgeneration
mobility

Contribution to
next-generationtransportation
machines
Taking on achallenge of newenvironmental
changes

Life science

Existing businessArisawa Mfg. Co., Ltd.

7／17

Business Strategy

Ⅱ-2-1 Information device field
Change in a business environment（ Million units ）Demand forecast for Smartphone

2,000

Source：Arisawa Mfg. estimate （Billion yen）

2G/3G

4G

5G

50,000Source： Fuji Chimera
Research Institute, Inc

Demand forecast for
Semiconductor device
LogicMemory

RFSensor

40,0001,500

30,0001,000

20,000500
0～10,0000
2019

2020

2021

High speed broadband

2022

2023

2024

Increase insensor and camera

2019

Semiconductor
performance increase

2020

2025

Expansion ofIoT society

Promotion of development of differentiated products

Arisawa Mfg. Co., Ltd.

FPC materials forhigh frequency wave （5G）

Insulation film forsemiconductor substrate

FPC materials for
micro wiring

Protection film forsemiconductor fabrication
8／17

Business Strategy

Ⅱ-2-2 Next-generation mobility field
Change in a business environment

Conventional

HVPHV

EV

FCV

1.5

0.0
2020

2025

Electric

2030

2035

～

0.5～

0.5～

1.0～

1.0

Level00.0
2040

LightweightSource：Arisawa Mfg. estimate

Autonomous level forecast

2020

Level1

Level22025

Autonomous

Level3～

1.5

Source：Arisawa Mfg. estimate （Billion units）

Car powertrain forecast～（Billion units）

Level42030

Connected

Promotion of development of differentiated products

Arisawa Mfg. Co., Ltd.

Carbon fiber structuralmaterials

FPC materials forhigh speed transmission

Battery-related materials

In-car screen materials

e9／17

Business Strategy

Ⅱ-2-3 Life science field
Noticeable environment change

Fields where we can take advantage of our technologies

CORONAVIRUS

Water treatment

MedicalDisastercountermeasures

Infection
prevention

Promotion of development of differentiated products

Arisawa Mfg. Co., Ltd.

Materials for high pressure
water treatment

High-definition display for
medical useReinforcing materials for
multiple use

Touchless sensor display
10／17

Business Strategy

Ⅱ-3 Research and development investment
Increase the R＆D expenditure to promote thedevelopment of differentiated products.

R＆D expenditure

Electronics（Million yen）

Display

Industrial・Insulation

R&D / Sales ratio（ Right axis ）

（%）

2,650

30300
450300
55020

1,700

1,800

4.6

4.1

4,000

1,000
0371
336
1,367

300
400
1,500

4.5

4.9

'20/3

'21/3

'23/3

'25/3

（Forecast）（Plan）（Plan）（ Actual ）～2,000

2,074

2,450

2,200～

3,000

40100Priority products to be developed
Electronics raw materials■ FPC materials for high speed transmission■ FPC materials for high frequency wave
（5G）
■ FPC materials for micro wiring■ Materials for semiconductor
Arisawa Mfg. Co., Ltd.

Industrial structural materials
Electrical insulating materials■ Battery-related materials■ Carbon fiber structural materials■ Materials for high-pressure water
treatment

Display materials■ High-definition display for medical use■ In-car screen materials■ Touchless sensor display

11／17

Contents
Ⅰ. Policy of Medium-Term Business Plan 2Ⅱ. Business Strategy
3～11
Ⅲ. Financial Strategy
12～14
Ⅳ. SDGs, Corporate Governance
15～17

Financial strategy

Ⅲ-1 Financial strategy
Improve the capital efficiency by making effective use of cash-flow
and promoting to change non-business assets into business assets.
① Capital investment② Shareholder return③ Strategic investment

Delving into theexisting businessStable/Aggressive return

M＆A・New business Two-tier dividend
 Fixed dividend (20yen) + Performancebased dividend Share repurchase： To
consider appropriately
 Total return ratio : Over 60% Researching options which
maximize the synergy withthe existing business New product development
based on the existing
technologies

 Keeping / Expanding therevenue base
 Development for new use

Improve thecapital efficiency
Arisawa Mfg. Co., Ltd.

12／17

Financial strategy

Ⅲ-2 Capital investment
Capital investment for keeping and expanding the existing business（Million yen）

3,000

Electronics

2,300

2,168
2,000
321

1,000

Industrial・Insulation

156
217

250

Display

200

2,500

2,300

2,200
300
100

Others

200
100

500

150
150

150
150

600

1,474

1,650

1,700

1,500

1,600

'20/3

'21/3

'22/3

'23/3'24/3（Actual）（Forecast）（Plan（Plan）（Plan）

09,300 Million yen
Major investment plan (4 years)

Enhancement of production capability
Improvement of production process
New product development
Arisawa Mfg. Co., Ltd.

4,300 Million yen
1,000 Million yen
1,150 Million yen
13／17

Financial strategy

Ⅲ-2 Target figures to be achieved within theperiod of this Medium-term business plan

Promote the aforementioned business strategy and financial strategy, and set the following figures as the target

ROIC over 6.0% （2025/3）’20/3 WACC 5.35% ＊1（ Million yen ）Sales

100,000
80,00060,00040,00020,0000(Million yen)～～

Annual sales growth rate 8.6%

’20/3（Actual）’21/3（Forecast）’23/3（Plan）’25/3（Plan）

Sales

45,97045,30053,60063,100Operating Profit

2,762

2,400

3,700

5,100

6.0

5.3

6.9

8.1

NOPLAT

2,025

1,750

2,700

3,700

Shareholder's equity +Interest-bearing debt

54,49354,75056,70060,000

3.6

3.2

4.8

6.3

Operating Margin（%）

ROIC（%）＊1＊1 By our own calculation based on a third party organization’s calculated value＊2 ROIC（Return on invested capital）＝NOPLAT（ Net Operating Profit Less Adjusted Tax ） / （ Shareholder‘s equity + Interest-bearing debt ）Arisawa Mfg. Co., Ltd.

14／17

Contents
Ⅰ. Policy of Medium-Term Business Plan 2
Ⅱ. Business Strategy
3～11
Ⅲ. Financial Strategy
12～14
Ⅳ. SDGs, Corporate Governance
15～17

SDGs・GovernanceⅣ-1 Sustainable Development Goals（SDGs）
Select themes which influence customers, society and environment.
Then aim for contribution to the society through our business.
Goals for contribution
to society

Addressing
climate change

Prosperous life for Resource circulationand Efficiencyall the people

Renewable ・Life innovation ・decarbonized energy Safety
Important themes
and our contribution
story

Contribution to CO2emission control bysupplying materials for
FCV and EV.
Contribution to development of decarbonizedenergy.

Contribution to therealization of people's healthand prosperous life bysupplying materials forautonomous and medical
fields.

Energy saving ・Resource saving

Contribution to energy saving
and resource saving by
supplying materials for EV,
solar power generation, water
treatment and weight saving
for aircraft.

Related global goals

Arisawa Mfg. Co., Ltd.

15／17SDGs・GovernanceⅣ-2-1 Corporate governanceImprove the governance system to execute the business plan
Actions to reform (already implemented)
Implemented each action, and proceeded to improve the governance Assessment of the effectiveness of the board of directors by the third party
 Increase in the outside directors rate Introduction of performance-based director's remuneration
 Establishment of the voluntary nomination and compensation committee
Future enhancement points
Further enhance the governance system,and implement actions to stimulate the board of directors

 Further increase in the outside directors rate Ensuring the diversity including gender Enhancement of the effectiveness of the voluntary nomination andcompensation committee
Arisawa Mfg. Co., Ltd.

16／17

SDGs・GovernanceⅣ-2-2 History of improving corporate governanceFiscalyear

Item

2014

Board of directors

Board ofauditors

Corporateofficers

InsideOut
side

Outsiderate

InSideOut
sideInside(Servedasdirectors)

6225%

12116

2015

・Issuance of the corporate governancereport5229%

121152016

・Self-assessment of the effectiveness ofthe board of directors

5229%

121152017

5229%

121252018

5229%

121252019

・Non-renewal of the anti-takeovermeasures・Establishment of the nomination andcompensation committee（Voluntaryadvisory body）

4233%

121142020・Assessment of the effectiveness of theboard of directors by the third party
・Introduction of the online voting by
shareholders

4343%

12114

Arisawa Mfg. Co., Ltd.

17／17

This material is based on information available at the time of presentation, and contains
forward-looking statements which involve risks and uncertainties that could cause actual
results to differ materially from those presented in the forward-looking statements.
Therefore, there is no assurance that any forward-looking statements in this material will berealized. Final investment decisions should be made at your discretion.

Arisawa Mfg. Co., Ltd.