Medium-Term Management Plan
FY2024-FY2027

May 15, 2024

Index• Corporate Philosophy• Long-Term Vision 2030
• Positioning of this Medium-Term Plan
• View on External Business Environment• Review of Previous Medium-Term Plan (FY2021-FY2023)• Key Themes of this Medium-Term Plan
• Numerical Targets• Capital Allocation• ESG & Sustainability Initiatives

1

Corporate Philosophy

Overall Concept

Mission

PolicyMotto

Focus of our business

The starting point and guiding
principles for corporate activities

Our mission

Global contribution in variousfields through technology

Our objectives

What we are aiming for infulfilling our mission

Our action
guidelines
Our core values

Creating the future with human and technical resources

Contribute to the world with roll-to-roll technology

Create the best with the latest technology
Achieve the highest reliability with the best productsManagement that values job satisfaction and personal
motivation

2

History of Value Delivery
Achievement of high added value through roll-to-roll processing in cutting-edge fields of the times
Accumulating technology and know-how through this process.

Historical changes in segment products and sales

EnergyLithium-ion batteriesDisplay

Adhesive tape
Decorative film
Food packaging film

4004020020100100 Thin and uniform high-precision
coating Drying specific to material andapplication

Electronic substrate
Multilayered ceramic capacitors
Materials dry film
Flexible printed circuit boards
Polyimide film（¥bn）

300
30

Coating technology

Polarizing adhesive film for FPD
Functional film for FPD
Electronic paper

Electronicmaterials
Householdproducts

Fuel cells◆1970s～Magnetictape

Ability to contribute to customers’
productivity

Carbon prepreg
Ink ribbon◆Late 1980s～◆Late 1970s～
Video tape becomespopular in households
Significant growth inmagnetic tapes

Manufacture of a wide rangeof products from everyday
household goods todecorative sheets forbuildings◆2000s～Demand for LCD panels,
mainly flat screen TVs, grows

Coating industry enters electronicmaterials field
Business domains expand withproliferation of various electronic
devices such as mobile phones

Our strengths/competitive
advantages

Sales surpass◆2010s～¥40bn
Lithium-ion battery market
expands rapidly as the shift to EV
progresses amid the global
decarbonization trend

Sales surpass¥20bn High speed operation × larger size
 Stable operation and high yield

Customer base/delivery track record
 Technical proposals at Technicum* Joint development with the world’s
top companies

Sales surpass¥10bn* Technicum R&D testing facility

70

72

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02

04

06

08

10

12

14

16

18

2022 （FY）

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Long-Term Vision 2030: What We Aim to Become

Global leader in coating machines～ Enhance corporate value by establishing a stablerevenue base ～ Cutting-edge fields: No. 1 market share in energy and electronic materials
 Globalization through expansion of overseas network from sales tomanufacturing to maintenance Contribute to industrial development and the global environment
through coating technology

4Long-term Vision 2030: Numerical Targets

Net sales

60bn¥

Operating Income Margin

12.0%

ROE

Stable10.0%
5Positioning of this Medium-Term Plan
The target of this medium-term plan is to establish a business base to enable long-term growth

FY2030Net sales: ¥60.0bn
ROE: 10%
FY2027
Net sales: ¥51.0bn
ROE: 7.5%
FY2023
Net sales: ¥46.9bn
ROE: 6.5％

Establish business baseGlobal leader in coatingmachines

Long-term Vision 2030『Core principles』
1

Strong push toward
standardization/mass production

2

Enhancing customer service
structure

3

Continued strengthening ofglobal development

4

Pursuing smart factory
technologies

5

Business development thatembodies market needs

6

Expanding human capital

6

View on External Business Environment
Aim to successfully seize business opportunities while remaining mindful of risks
Industry 4.0
Macroenvironment

Climate change
countermeasures

Resource depletion

Geopolitical risk

Consider policy direction tailored to conditions in each region: Europe, which is leading the shift to EVs, China, which is driving the market, and North
America/Japan, which are following behindPursue technological reform for DX (including smart technology) and carbon neutrality while cooperating with government and corporations

Global difficulty of procuring energy resources and materials due to geopolitical factors including country risk, wars, and disputes

In the energy field, further acceleration of domestic and international moves to achieve carbon neutrality by 2050＞

– Longer-term expansion prospects in the lithium-ion battery market from the shift to EVs mainly in Europe, China, and North America

Business
opportunities– Government’s policy for the storage battery industry also promotes strengthening of domestic foundations and development of next-generation
battery technologies
In the electronic materials field, increase in mobile devices and in electronics usage in industrial equipment along with expansion in the semiconductor
and capacitor market– Further increase in demand for electronica materials for DX/GX applications– Government also firming up its policies due to recognition of the importance of the semiconductor and digital industries

Business risks



Optical film used widely in the electronics field, so solid demand likely to continue

Recent slowing in the growth of the EV market

Drive to achieve carbon neutrality moving more slowly in Japan than the rest of the world

Uncertainty on energy policies in each country (subsidies, infrastructure, etc.)

7Review of Previous Medium-Term Plan (FY2021-FY2023)
Earnings trends

Main initiatives

Previous medium-term plan(¥bn)

37.9

42.4

Sales in otherfields

25.8

13.0

21.1

25.0

 Improve productivity

46.9

35.1

Sales in energyfield2020

202120222023 （FY）

OIM

9.9%

10.5%

7.3%

6.9%

ROE

5.9%

9.5%

6.4%

6.5%

– Strengthen productivity management structures across thecompany via computer systems upgrades– Boost headcount in line with increased business scope・End-FY2023 headcount: +37 vs. end-2020
 Strengthen organizational structures to raise customer satisfaction– Establish development division to pursue development projects in
new fields such as digital twinning technology– Establish customer support division to enhance after-sales services
and maintenance Complete phase 2 of Kizugawa factory＞

Unresolvedissues

Diversify earnings streams to improve
profitability
Further improve production capacity to tackle
increased order backlog and longer lead times,
strengthen organizational structures

 Identify and secure demand in non-energy fields such as electronic materials
 Establish an after-sales service structure centered around the customer support
division Pursue measures to shorten lead times, including normalizing use of production
management systems
 Enhance organizational and HR structures and focus on rapid impact from newpersonnel8

Key Themes of this Medium-Term Plan

Support sustained increase in corporate value

Establish business base

2. Expand supply capabilities
1. Diversify revenue streams

Shorten lead times, esp. for design, toexpand group-wide production capabilities

Identify demand in diverse fields including energy
and strengthen after-sales service structure

３. Improve organizational capabilities
Futureproof organizational structures andimprove HR and organizational capabilities

9Key Themes: 1. Diversify Revenue Streams
1-1. Identify demand in numerous fields

1-2. Establish after-sales service structure

Aim to diversify and stabilize revenue base by strengthening new
fields and identifying demand to respond to changes in the external
environment

Respond to customer needs by establishing after-sales service businessmodel and enhancing total support structure

Initiative details

Initiative details

 Reenergize existing fields: Target project acquisition, including replacement demand, infields where we have accumulated technologies and customer
networks, including electronic materials and optical film
 Move into new fields– Next-generation energy field: Actively pursue project responsiveness and in-housedevelopment– Develop businesses to match market needs: Pursue further joint development with customers at Technicum
including application of technologies built up in cutting-edge
fields Establish business model– Create standardized menus: Create standardized menus based on past performance andcustomer demand surveys– Establish business scheme: Establish a business scheme to turn previously one-off after-sales
services into a stable revenue stream Create team of specialists: Develop and formulate a team of specialist engineers dedicated toafter-sales services, particularly in marketing and design Develop and foster company partnerships: Aim to create tie-ups with partner companies and enhance service
structures10

Key Themes: 2. Expand supply capabilities
2-1. Shorten lead times

2-2. Expand production capabilities

Tackle increased order backlog and longer lead times to create greater
efficiency in working capital by eliminating bottlenecks in the entire
process, achieving greater overall efficiency, and pursuing enhanced
functionality and capability

Shorten lead times and expand group-wide production capacity tocope with increased order backlogInitiative details

Initiative details

 Design: Increase efficiency in the design process by centralizing past
design-related data and utilizing computer systems
Pursue frontloading via reform of organizational structures

 Automation and labor saving：Aim to realize smart factories by promoting DX compatibility
across the entire group Design～component procurement～production：Reduce adjustments and rework between processes via
thorough process control
 Expand functions and capabilities for each process：Expand functions and capabilities for each process by utilizing
computer systems, increasing the number of subcontractors, andincreasing headcount Strengthen ties with partner companies: Increase the number of partner companies and improve
production efficiency through collaboration and cooperation
 Consider and plan new plants：Plan and study possibilities for new plants to increase
production capacity in the future in line with increased orders andstronger after-sales service structure Utilize M&A：Continue to explore M&As in both upstream and downstream
directions

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Key Themes: 3. Improve organizational capabilities
3-1. Enhance and strengthen organizational structures

3-2. Build a business base to increase corporate value

Strengthen HR recruitment and development and shift to more efficientorganizational structures in order to realize our long-term growth
direction

Continuous and dynamic focus on strengthening the earnings structure,internal structures and infrastructure, and governance that will serveas the foundation for medium- to long-term corporate growth

Initiative details

Initiative details

 Hire specialist personnel：Continuously increase headcount, including the number ofelectrical and mechanical designers, field engineers, etc.

 Improve profitability and reduce costs：Review the manufacturing system to strengthen the revenue
structure by creating high added value for in-house processing,automating and reducing manpower, and improving operational
efficiency through the use of data accumulated over many years

 HR development and technical succession：Develop specialist personnel by sharing knowledge, holding
study sessions, and implementing technical succession
programs run by senior employees, and work to turn young
employees into competitive personnel at an early stage Optimize organizational structures and personnel deployment：Improve company-wide productivity by optimizing theorganization and personnel for each process, reviewing projectand meeting bodies, promoting inter-departmental
collaboration, and utilizing computer systems.

 Strengthen business foundations and initiatives：Systematization, DX, standardization, management accounting,and review of personnel structure.
 Strategic investment for longer-term growth：Aggressive investment for corporate growth in areas such as new
facilities, core technology, digital technology, and human capital Corporate governance: Continue to focus on revitalizing the Board of Directors,
accelerating decision-making, and ensuring transparency as key
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Numerical Targets
Aim to strengthen business competitiveness, including in after-sales services, while remaining consciousof profitability and capital efficiency
FY2023 actual

FY2027 medium-termplan targets

Net sales¥46.9bn¥51.0bn

After-sales services¥1.6bn¥3.5bnOperating income¥3.2bn¥4.1bn

ROE

6.5％

7.5%

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Plans by Business Field
Maintain market presence in the energy field while identifying and capturing new demand in other fields

Direction for each business field

Sales by business field
Volatility in the energy sector has increased due to uncertain market conditions. Based on aconservative outlook for sales in the energy sector, we will aggressively target demand in othersectors.

Energy field*Weighting within all-company sales in parentheses¥46.9bn16（3%）
36（8%）
66（14%）¥51.0bn

20（4%）
35（7%）

90（18%）90（18%）

Electronic materials, optical film, other existing fields


275（54%）

Leveraging our accumulated technology and know-how to aggressively capture demand
utilizing our domestic and overseas customer network in order to diversify revenuestreams

After-sales services
351（75%）

Despite temporary fluctuations in demand, the market is expected to grow over themedium to long term, and we will pursue sales activities while closely monitoring thebusiness environment
With an eye to strengthening order-taking capabilities over the medium to long term, wewill also undertake some subcontracting for ancillary equipment associated with the main
business
We will prepare for commercialization of next-generation batteries after lithium-ionbatteries

Steadily increase after-sales services, which will lead to acquisition of renewal demand,by strengthening organizational structures (including those of overseas subsidiaries),
response capabilities, and service content
These services will lead to diversification of the company's revenue streams andacquisition of renewal demand, and will therefore contribute to stabilization of thebusiness in the futureOthers

FY2023 actual

FY2027 target

Plant seeds for long-term growth through business development in new value-added
fields, M&A, etc.

14Capital Allocation
While maintaining a sound financial position, we will raise funds flexibly and prioritize allocation of funds to investments necessary for growth

Growth investment
Operating CF

Growth investment
around ¥3bn～

Strategic alliances andshareholder returns
around ¥3bn～
External
borrowingDividends

Cash anddeposits

Core investment
around ¥2bn～Strategic alliances and shareholder returns
Strategic alliances for growth, such as for increasing production capacity, securing stable supply of criticalcomponents, and acquiring human resources
If strategic alliances are not formed, we will make high priority growth investments or flexibly implement
shareholder returns to meet appropriate ROE levels in order to improve P/B ratios

Dividends
Dividends will be paid at a DOE of 3.5% or a payout ratio of 60%, whichever is higher
Take a flexible approach to share buybacks to improve capital efficiency and shareholder returns,
while securing the necessary funds for investment in growth and comprehensively taking into accountfinancial conditions, the share price level, and other factors

Core investment
Revenue

Enhance production structure and boost capacity, including at the global level
Strengthen digital twinning/smart factory technologies and DXAllocate funds to US after-sales services and other growth and human capital investments that willcontribute to increase in corporate value

Invest in infrastructure upgrades at existing plants (such as buildings and equipment)

Expenditure
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ESG & Sustainability Initiatives
Aiming to solve social issues through our business and fulfil our responsibilities as a company

EnvironmentContribute to the lithium-ion battery field and next-generation solar cell development

Extending the service life of facilities by strengthening the maintenance business

Reduce CO2 emissions through the use of solar power generation

Contribute to the development and spread of various electronic devices that are indispensable fordaily lifeEnhance HR development and training, such as training by rank and planned on-the-job training fortechnical acquisition.

Create an environment that allows flexible working styles through diversification of work patterns

Revitalize local communities

Contribute to local communities through official partnership agreements with B-League's Bambitious
Nara and J-League's Nara Club, sponsorship of local welfare activities, etc.

Increase corporate value for all stakeholders

Diversify revenue streams with an eye to the future, make strategic and concentrated investments,and strengthen non-financial initiatives

Improve management transparency and efficiency

Energize the Board of Directors, accelerate decision-making, and ensure transparency

Contribute to the global environment through ourbusinessContribute to the global environment in ourbusiness activities
Contribute to people’s lives through our businessSocialGovernance

Actively invest in human capital

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Disclaimer
This document provides information intended solely to help readers’ understanding of HIRANO TECSEED CO., LTD.
Thus, we have no intention to solicit or encourage investment for securities or financial products mentioned in this document. Also, readers are advised that thisdocument is not a disclosure document or statement of financial performance as required by Japan’s Financial Instruments and Exchange Act, Act on Investment Trusts
and Investment Corporations, related cabinet orders, cabinet office ordinances or rules, the rules governing companies listed on the Tokyo Stock Exchange, or any
other applicable rules.
This document contains forward-looking statements, including forecasts of financial position, results of operations, and business-related matters, as well as statements
related to the plans and goals of the management of HIRANO TECSEED CO., LTD. There are a number of known and unknown risks and uncertainties that can cause its
actual results or performance to differ materially from any explicit or implicit forecasts contained herein. These forward-looking statements also rest on a number ofassumptions with regard to our present and future management strategies, as well as the political and economical environments in which we will conduct its futurebusiness operations.
Although the information contained in this document is the best available at the time of publication, no assurances can be given regarding the accuracy, certainty,validity or fairness of this information and we are not responsible for any error or inaccuracy in the information or data contained herein.
The content of this document can be modified or withdrawn without prior notice.

15 May , 2024
Contact:
General Affairs Division HIRANO TECSEED Co., Ltd .
https://www.hirano-tec.co.jp/en/contact/
Tel: +81-745-57-0681

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