May 24, 2019
Topy Industries, Limited

Topy Industries Group’s New Medium-Term Management Plan:
Growth & Change 2021 (G&C 2021)～ For the Completion of G&C and Future Growth ～The Topy Industries Group has formulated and launched the medium-term management plan
“Growth & Change 2021” (G&C 2021) covering the period from fiscal year 2019 to fiscal year
2021.
1. Review of the Previous Medium-term Management Plan: Growth & Change 2018 (G&C2018)
Under the previous medium-term management plan that was launched in fiscal year 2016, theTopy Industries Group aimed for sustainable growth by accelerating global business developmentwith the Automotive & Industrial Machinery Components Business as a growth driver. Net sales
exceeded the planned numerical target thanks to the conversion of Ring Techs Co., Ltd., amanufacturer of steel wheels, and Asahi Tec Corporation, a manufacturer of aluminum wheels,
into subsidiaries, in addition to the completion of the global supply system of steel wheels forpassenger vehicles and the steady capturing of demand for construction machinery and miningmachinery, which stayed on a track to recovery during that period. Steady progress was also madein building the foundation for new businesses such as synthetic mica and crawler robots. However,profits did not achieve the targets due to the significant impact of transient issues and increasing
costs as a result of the rising prices of sub-materials, such as graphite electrode for steel making
and alloy iron.
2. Positioning of the New Medium-term Management Plan: Growth & Change 2021 (G&C2021)
In the series of medium-term management plans with the slogan of “Growth & Change” since
fiscal year 2012, the Group has been continuing to promote global “Growth” and “Change” toachieve a highly profitable business structure. Given that the long-term trend of expanding
overseas demand and contracting domestic demand remains unchanged, the Group positions G&C
2021 as the final stage of G&C.
3. The Basic Principle of G&C 2021
The Group will work to expand its cash flow creation capabilities for future growth with “Forthe completion of G&C and future growth” as a basic principle, putting priority on increasing theearnings power of businesses that were enhanced under G&C 2018. At the same time, the Groupwill aim for sustainable growth beyond the 100th anniversary of the Company’s foundation in
2021 by continuing to work on the development of new businesses and products that will meetcustomer and social needs.

14. Key Themes in G&C 2021
(1) Increase in earnings power
The Group will increase the earnings power of the Automotive & Industrial Machinery
Components Business and the Steel Business, its core businesses, by focusing on operating
profit. The Group will reap the results of growth measures implemented in G&C 2018 andpromote measures based on customer needs, the strengths and weaknesses of the Group, andthe further cost reduction of the entire value chain in response to the expanding corporatesize.
(2) Manifestation of the Group synergies
The Group will promote the following measures to maximize synergistic effects with RingTechs Co., Ltd. and Asahi Tec Corporation, which joined the Group in fiscal year 2018.
(Synergistic effects with Ring Techs Co., Ltd.)
Optimization of domestic and overseas production systems in response to falling domestic
demand for steel wheels for passenger vehicles, and the improvement of costs andproductivity through the standardization of design, technologies and purchase.
(Synergistic effects with Asahi Tec Corporation)
Mutual sales expansion of steel wheels for passenger vehicles and aluminum wheels
globally, including the U.S. and Europe, and the improvement of costs and productivity
through the standardization of design, technologies and purchases.
(3) Enhancement of strategic products
For synthetic mica, which is a basic ingredient in cosmetics, the Group will capture
demand that is expected to grow in Japan and overseas by utilizing the production capacitythat increased in G&C 2018. For crawler robots, the Group will make a full-scale entry into
the market where demand is expected to increase on the back of the labor shortage by
positioning crawler robots as an automated guided vehicle (AGV), differentiated fromexisting tire-system vehicles.
In the Automotive & Industrial Machinery Components Business, the Group will
accelerate the development of lightweight wheels that will meet needs of automotive
manufacturers for lighter body weight and promote the development of wheels that will
pursue high-quality design. In the Steel Business, the Group will further deepen themanufacturing and processing technologies of deformed section steel, which is the Group’sstrength, and differentiate its new product TACoil® by increasing its size.
(4) Taking on the challenge of innovation
The Group will strengthen its product and technology development capabilities by
increasing research and development expenses to take on challenges for the future bypolishing its proprietary technologies. The Group will also promote smart factories byutilizing IoT at the production site to strengthen manufacturing. In addition, the Group willsecure and cultivate human resources who will take a leading role over the next 100 years byfocusing on the creation of a creative workplace through continuous efforts for activities toimprove job satisfaction and promote diversity, which were successful in G&C 2018.

2(5) Further strengthening of the management foundation[E] The Group will aim for manufacturing at eco-friendly and environmentally conscious
production plants and bases.
[S] The Group will promote the provision of products that will contribute to society andregional contribution activities.
[G] The Group will work to strengthen the governance system that aims to prevent andminimize risks.
5. Quantitative goals and numerical target plants in G&C 2021(1) Quantitative goals
ActualTargets for
performance in
FY2021FY2018Operating profit to net sales
2.6%
5.0%
Return on equity (ROE)
6.5%
8.5%
Return on assets (ROA)
3.2%
5.7%
Debt-equity ratio
0.72
0.52

Change+2.4 points+2.0 points+2.5 points△0.20 points(2) Numerical target plans (in billions of yen)

Net sales(Overseas sales ratio)
Operating profit
Profit attributable to owners of parent

Actualperformance in
FY2018
286.2
(29%)
7.5
7.1

Targets for
FY2021

Change320.0
(33%)
16.0
11.0+33.8(+4 points)
+8.5
+3.9

・The Topy Industries Group plans to spend approximately 37.0 billion yen as a maintenanceinvestment over the three years and other growth strategy investments of approximately
15.0 billion yen.
6. Principal measures in G&C 2021
(1) Production and sales structural reforms in the wheels for automobiles business
The Group will aim to optimize the production system with Ring Techs Co., Ltd. in
response to declining domestic demand for steel wheels and maximize synergistic effects
with Asahi Tec Corporation through production and sales alliances in response to increasing
domestic and overseas demand for aluminum wheels. In addition, the Group will capture
globally growing demand and increase its earnings power by strengthening thecompetitiveness of production sites through focused investments and continuousimprovement. The Group will also promote the development of attractive products by
responding to the needs of automotive manufacturers for lighter body weight and thedissemination of electric vehicles (EV).

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(2) Sales expansion of strategic products in the Steel Business
The Group will expand the sales volume of strategic products, fully utilizing thecutting-edge steel plants and taking advantage of the Group’s strength of a wealth of products,
including its proprietary deformed section steels such as mast rails for forklift trucks andsegment members for tunnel construction, as well as TACoil®, Japan’s first newly deformed
reinforcing bar product.
(3) Full-fledged commercialization of new areas
Synthetic mica, which is a basic ingredient in cosmetics, is valued for its superiortransparency and safety. The Group will expand sales of colored synthetic mica in Japan andoverseas which feels comfortable to skin, by adding them to the wide variety of theproduction lineup.
Given that crawler robots have proprietary functions such as the ability to overcome great
differences, run on bad roads and travel automatically and autonomously, the Group will
make a full-scale entry into the market where demand is expected to increase on the back of
the labor shortage by positioning the crawler robots as an AGV in place of existingtire-system vehicles.

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