FURUKAWA CO., LTD.
Financial Results Briefing for the Fiscal Year Ended March 2024
May 30, 2024

[Number of Speakers]

3
Minoru Nakatogawa
Koichiro Konno

Ryohei Akutagawa

President and Representative Director
Director & Senior Executive Officer,
General Manager, Corporate Planning
Department
Deputy General Manager, Corporate
Planning Department, Manager, Public &Investor Relations Section

Presentation
Akutagawa: After explaining the financial results for the fiscal year ended March 2024 and the forecast forthe current fiscal year, Mr. Nakatogawa, President and Representative Director, will explain the progress of
the Medium-Term Business Plan 2025, followed by a Q&A period.
Nakatogawa: I am Nakatogawa, President of FURUKAWA CO., LTD. Thank you for taking time out of yourbusy schedule to attend our financial results briefing today.
We have undergone significant changes since our founding in 1875, and now our core business is machineryand materials, and we will celebrate our 150th anniversary in 2025. We will continue to enhance our IR
activities so that our investors can better understand our company.

In the first half of today's presentation, I will explain the financial results for the previous fiscal year and thefull-year forecast, and in the second half, I will explain the progress of the Medium-Term Business Plan 2025.

The YoY changes for the fiscal year ended March 2024 are as follows: Net sales decreased by JPY25.9 billion
to JPY188.2 billion, operating profit decreased by JPY0.5 billion to JPY8.5 billion, ordinary profit increased by
JPY1 billion to JPY10.3 billion, and profit attributable to owners of parent increased by JPY9.8 billion to JPY16
billion.
The financial positions are as shown. The forecast for the fiscal year ending March 2025 will be explained later.

The progress of the management indicators adopted in our Medium-Term Business Plan 2025 is as shown
here. ROE increased due to a significant increase in profit attributable to owners of parent, and the D/E ratio
was 0.4x, exceeding the level we should have aimed for. Capital policy will be explained in the latter part ofthe presentation.

Next is the income statement. Net sales and operating profit will be explained in detail by segment later.
Equity in earnings of affiliates was a loss in the fiscal year ended March 2023 due to deteriorating performanceof Hibi Kyodo Smelting, which was in its regular biennial repair year, but recorded a profit in the fiscal year
ended March 2024, and ordinary profit increased by JPY1 billion YoY to JPY10.3 billion.
Although a loss on the transfer of Cariboo Copper shares was recorded as an extraordinary loss, a gain on
sales of fixed assets of JPY13.4 billion was recorded as an extraordinary gain, mainly due to the transfer of a
portion of co-ownership of the former Furukawa Osaka Building site and other land, and a gain on sales ofinvestment securities resulting from the sale of strategic shareholdings was also recorded, and profit
attributable to owners of parent increased by JPY9.8 billion YoY to JPY16 billion, a significant increase.

Next is the balance sheet. Fixed assets increased by JPY27.3 billion. This was due to a JPY12.6 billion increase
in investment securities included in investments and other assets, reflecting a rise in the share price of listed
stocks, and a JPY12.5 billion increase in long-term accounts receivable, mainly due to the recording ofproceeds from the transfer of a portion of co-ownership of the former Furukawa Osaka Building site and otherland in others. As a result, total assets increased by JPY27.1 billion to JPY259.8 billion.
Net assets increased by JPY27.2 billion to JPY133.2 billion.
Interest-bearing debt totaled JPY58.3 billion, a decrease of JPY4.4 billion, despite the issuance of bonds forthe first time in about 23 years to diversify funding sources.
As for consolidated cash flow, cash flow from operating activities was positive JPY10.4 billion due to profit
before income taxes, and cash flow from investing activities was positive JPY1.9 billion due to proceeds fromsales of property, plant and equipment and proceeds from sales of investment securities, despite purchase ofproperty, plant and equipment. Cash flow from financing activities was negative JPY8.4 billion due torepayment of borrowings and payment of dividends, although there were proceeds of JPY5 billion from theissuance of bonds.

By segment, net sales increased in the rock drill machinery and the chemicals segment, but overall sales
decreased as the metals segment, which terminated its entrusted smelting contract with Onahama Smelting
and Refining at the end of March 2023, experienced a significant decline in sales due to a drop in production
volume.
Net sales of the overall machinery business increased by JPY0.4 billion to JPY82 billion, and those of the overallmaterials business decreased by JPY26.4 billion to JPY100.3 billion.
Operating profit increased in the rock drill machinery, metals, and chemicals segments, but decreased mainlyin the industrial machinery, UNIC, and electronics segments, resulting in an overall decrease in operating
profit. Operating profit of the overall machinery business decreased by JPY0.3 billion to JPY5.6 billion, andthat of the overall materials business increased by JPY0.4 billion to JPY2.7 billion.
Although net sales are expected to increase mainly in the industrial machinery, UNIC, electronics, andchemicals segments, overall net sales for the full year are expected to decrease due to a lull in demand in therock drill machinery segment, which was strong in the previous fiscal year, and a decline in sales in the metals
segment due to lower production volume.
Operating profit is expected to decrease in the rock drill machinery and the metals segment but is expected
to increase mainly in the industrial machinery, UNIC, and the electronics segments, and overall operating
profit is also expected to increase.
The actual and assumed exchange rates and copper price and exchange rate sensitivity are shown in the table.
In the current fiscal year, we expect another extraordinary gain on the sale of investment securities resulting
from the sale of strategic shareholdings and forecast profit attributable to owners of parent of JPY14 billion.

The graphs show changes in results by segment. The upper graph shows YoY change in net sales, and thelower graph shows YoY change in operating profit.
Details of the machinery and materials businesses will be explained later. In the real estate business, bothsales and profits declined in the fiscal year ended March 2024 due to lower office rents and tenant
replacements, but for the fiscal year ending March 2025, we forecast an increase in both sales and profits
based on an expected rise in office occupancy rates.

I will explain the details by segment. The bottom of the page is for reference, which describes thecharacteristics, destinations, market share, and others of the main products of each segment. Please take alook at it when you have time.
This page is about the industrial machinery segment. For the fiscal year ended March 2024, net sales were
down JPY2.3 billion. Material machinery sales were on a par with the previous year, while in the contractor
business, bridges and belt conveyors posted higher revenues with volume-based sales, but pump equipment
posted lower revenues, especially due to a significant decline in environmental product.
Operating profit was down JPY1.1 billion, with a significant decrease in material machinery due to additionalcosts incurred as a result of plant construction delays. The order backlog was JPY15.8 billion, up JPY1.6 billion
YoY, with orders received in material machinery, bridges, and belt conveyors as noted.
For the fiscal year ending March 2025, we forecast an overall increase in net sales of JPY3.5 billion, with asignificant increase in material machinery sales, as well as in pumps, pump equipment, and bridges, in addition
to a large-scale project for belt conveyors.
Operating profit is expected to increase by JPY1.5 billion due to the increase in sales, with no additional cost
incurred for material machinery, which was the case in the previous year.

This is about the rock drill machinery segment. For the fiscal year ended March 2024, net sales increased by
JPY0.2 billion in Japan and JPY2.6 billion overseas. Domestic sales increased due to an increase in shipmentsof auxiliary parts for hydraulic crawler drills and other equipment and an increase in orders for maintenancebusiness. Overseas, overall sales increased due to a significant increase in shipments of hydraulic breakers
and large hydraulic crawler drills, especially in North America, where hydraulic crawler drill sales reached arecord high, as well as in the Middle East and Africa, where shipments of hydraulic crawler drills increased,
and the weaker yen also had the effect of increasing sales.
Operating profit increased by JPY1.1 billion, a significant increase due mainly to increased sales in North
America, as well as the effect of yen depreciation and other factors.
For the fiscal year ending March 2025, we expect net sales to be flat in Japan and down JPY2.4 billion overseas.
In Japan, the trend of reluctant purchases of hydraulic breakers for rental use has bottomed out, and sales ofhydraulic crushers and hydraulic crawler drills are also expected to increase, but sales of tunnel drill jumbos
are expected to decline due to lower shipments, and overall sales are expected to be flat from the previous
year.
Overseas sales are expected to fall sharply due to a lull in demand, especially in North America, which isexperiencing a reactionary decline from the previous year's advance, and overall segment sales are forecasted
to decline by JPY2.4 billion. Operating profit is expected to decrease by JPY1 billion mainly due to lower sales
in North America.

Next is the UNIC segment. For the fiscal year ended March 2024, net sales were up JPY1.4 billion in Japan anddown JPY1.5 billion overseas. In Japan, truck production delays are recovering, and the number of trucks
supplied increased compared to the previous fiscal year, leading to an increase in shipments of UNIC cranes
and higher sales. Overseas sales decreased due to lower shipments to China, Southeast Asia, Europe, etc.
Overall, sales decreased by JPY100 million.
Operating profit decreased due to a worsening cost ratio as a result of continued product shipments before
price hikes in response to soaring prices of steel and other raw materials.
For the fiscal year ending March 2025, net sales are expected to increase due to an increase in shipments
resulting from an increase in truck production in Japan, and orders for UNIC cranes are expected to increase.
Overseas sales are expected to increase due to stronger sales in Europe, the US, Southeast Asia, and the
Middle East. Overall, we expect an increase in revenues. Operating profit is expected to increase due to theincrease in sales as well as the completion of product shipments before the price increase.

Next is the metals segment. For the fiscal year ended March 2024, net sales decreased by JPY26.7 billion. Dueto the termination of the entrusted smelting contract with Onahama Smelting and Refining at the end of
March 2023, electrolytic copper production decreased by 21,924 tons from the previous year to 48,262 tons
and sales volume decreased, resulting in a decrease in sales.
Operating profit increased by JPY0.6 billion due to marginal gains from the effects of metal price fluctuations
and an improvement in the balance of entrusted smelting.
For the fiscal year ending March 2025, we forecast a decrease in net sales because we expect electrolytic
copper production to decline by 1,661 tons YoY to 46,601 tons, resulting in a decrease in sales volume.
Operating profit is forecasted to decrease due to the expected deterioration of the balance of entrusted
smelting as a result of worsening ore purchase conditions and the absence of price gains/losses from metal
price fluctuation effects that existed in the fiscal year ended March 2024.

Next is the electronics segment. For the fiscal year ended March 2024, net sales were down JPY100 million,
with high-purity metallic arsenic sales flat YoY despite the bottoming out of the market cycle for compound
semiconductors, and coil sales increased due to a recovery in automobile production. Sales of crystal products
declined significantly due to the impact of inventory adjustments by customers, while sales of aluminum
nitride ceramics declined significantly due to sluggish demand for components used in semiconductor
production equipment. Operating profit decreased due to lower sales in crystal products and aluminum
nitride ceramics.
For the fiscal year ending March 2025, we expect sales of high-purity metallic arsenic to increase due tomarket recovery, sales of crystal products to increase as inventory adjustments by customers will ease in H2
and thereafter, and sales of aluminum nitride ceramics will increase due to a recovery in demand forsemiconductor production equipment components, resulting in an overall sales increase of JPY900 million.
Operating profit is expected to increase by JPY100 million due to the increase in revenue.

Next is the chemicals segment. For the fiscal year ended March 2024, net sales were up JPY0.4 billion, withcopper oxide sales flat YoY due to lower demand for package substrates for PCs, smartphones, and servers,
despite higher unit prices resulting from higher copper prices and price revisions, and cuprous oxide sales up
due to higher copper prices and price revisions, in addition to strong demand for ship bottom paints, andoverall sales increased. Operating profit increased mainly due to higher sales of copper oxide.
For the fiscal year ending March 2025, we forecast an overall increase of JPY200 million in net sales, with sales
expected to increase due to the gradual recovery in demand for copper oxide and other products. Operating
profit is expected to remain flat YoY due to the impact of higher raw material costs.

Next, the status of capital investment, depreciation, and R&D expenses is as described. In the industrial
machinery segment, the Gunma Kankyo Recycle Center, which treats medical waste, underwent an
incinerator expansion totaling approximately JPY2.8 billion from FY2022 to FY2023. The construction of the
expansion has been completed and commercial operation started in April 2024.
In the fiscal year ending March 2025, the Company plans to invest a total of JPY8.5 billion in facilities, including
the construction of the installation plant in Nagano Prefecture and others in the UNIC segment, the renewalof facilities at Oita Mining in the metals segment and sulfuric acid manufacturing facilities in the chemicals
segment in the materials business, and the acquisition of a rental building in Osaka in the real estate businessin others.

Pages 16 through 17 are for reference information, which we hope you will review later.

I will continue with an explanation of the progress of the Medium-Term Business Plan 2025.
The two pillars of our efforts to increase corporate value are the achievement of an ROE of around 8% andthe reduction of the cost of capital, as announced in our Medium-Term Business Plan 2025.
The red boxed areas indicate items where we have made further progress in our efforts.

This section explains the reduction of strategic shareholdings. In February and May of this year, we set andannounced specific targets related to the policy of reducing strategic shareholdings in the Medium-TermBusiness Plan 2025 of last May. We will reduce our strategic shareholding (including shares deemed to beheld) as a percentage of consolidated net assets to less than 20% by the end of March 2025.
Although the Company's strategic shareholdings have been sold and reduced each year, they rose to 40.8%
at the end of March 2024 due to the rise in the share prices of listed stocks toward the end of the fiscal year.
The plan for FY2024 is to sell approximately JPY15 billion, and the strategic shareholdings will be reduced toless than 20% by the end of March 2025. The amount of approximately JPY15 billion is an estimated amountcalculated based on the stock price of the relevant securities at the end of March 2024, and includes
uncertainties due to future stock price fluctuations and other factors.
As for the use of funds generated by the reduction of strategic shareholdings, we are to increase the target
amount of share repurchases over three years from about JPY3 billion to about JPY5 billion under the MediumTerm Business Plan 2025. Moreover, in addition to growth investments such as M&A, we plan to use the funds
for environmental investments related to carbon neutrality and environmental preservation. The roadmap
toward carbon neutrality will be developed and announced by the end of FY2024, one year ahead of schedule.

This is about shareholder returns. In principle, we follow the stated dividend policy, but for the fiscal year
ended March 2024, we have increased the year-end dividend by JPY5 from the previous forecast to JPY55. For
the fiscal year ending March 2025, we plan to increase the annual dividend by another JPY5 to JPY60,
consisting of an interim dividend of JPY30 and a year-end dividend of JPY30. This is the first time in 16 years
that the Company will pay an interim dividend.
As explained earlier, the Company intends to change the target amount of share repurchases fromapproximately JPY1 billion to JPY1.5 billion to JPY2 billion per fiscal year, and to increase the total amount ofshare repurchases from approximately JPY3 billion to approximately JPY5 billion over the three years of theMedium-Term Business Plan 2025.

This is a bubble chart of the earnings plan. We compared the FY2023 results with the FY2025 image, the final
year of the Medium-Term Business Plan 2025. In terms of FY2023 results, the rock drill machinery segment
achieved the goals of the Medium-Term Business Plan 2025 ahead of schedule due to strong performance inNorth America and the impact of the yen's depreciation. The industrial machinery and UNIC segments saw adecrease in profits in FY2023, and the gap with the Medium-Term Business Plan 2025 is widening.
Progress in the machinery business, which we have positioned as our core business, will be explained on thenext and subsequent pages.

The upper left corner of this page shows the bubble chart presented in the Medium-Term Business Plan 2025,
comparing the FY2021 results to the FY2025 image by product. The size of the bubbles represents the imageof the amount of operating profit.
Below left is a bubble chart compared to actual results for FY2023. Of these, in terms of products with large
bubbles and large discrepancies between the FY2023 results and the FY2025 image, I will explain the main
measures.
First is the industrial machinery segment. As for material machinery, we are aiming to expand market shareand increase stock with the GEOPUS series of strategic machines to meet the demand for renewal of aging
equipment. Specifically, in crushers, we identify issues at crushers that affect the productivity of ourcustomers and propose the introduction of strategic machines. As a stepping stone to the introduction of
crushers, the Company is also building relationships with new customers by introducing a new type of screen.
By region, we have established a base in FY2023 to expand our market share from 10% to 15% in West Japan,
where we have a low market share, and we are strengthening our sales structure in the Chugoku and Shikoku
regions by increasing personnel, and we have selected targets mainly for replacing other companies' machines.
In East Japan, where we have a proven track record, we maintain a 20% market share and have alreadyselected targets for further replacement of our own and other companies' machines and new installations.
For the future, we aim to build a new business model utilizing IoT technology, such as monitoring machinecondition, promoting preventive maintenance, and supporting productivity improvement.
In light of the additional cost incurred in FY2023 due to construction delays at material machinery, theCompany will implement strict risk management through a segment-wide matrix organization.

Next is the belt conveyor. We will promote the belt conveyor as a problem-solving sediment conveying
method that can contribute to the 2024 problem and CO2 reduction.
Inquiries for projects related to the construction and renewal of dams and river flood control are increasing.
The total estimated value of the project is approximately JPY10 billion, based on the specific inquiries that are
currently emerging, and we aim to win orders for these projects in FY2024 and FY2025.

Next is the rock drill machinery segment. Regarding blast hole drills, we launched a machine with a semiautomatic drilling function in 2023 to solve the shortage of operators accompanying the shortage of labor inJapan. We will contribute to solving our clients' problem of difficulty in securing skilled operators.
Overseas, we will continue concentrated production and sales in North America. The western base wasestablished in FY2023 to reduce transportation time and costs, strengthen price competitiveness, and also, toenhance sales to explosion crushers. In FY2024, we expect a lull in demand as a reaction to the large increasein the previous year, but we anticipate a recovery in demand in 2025.
In Southeast Asia, we are working to foster a market for hydraulic crawler drills to create a market for crushedstone. Specifically, we introduced the attachment drills, which is the first machine to guide from pneumatic
to hydraulic for the creation of a crushed stone market directly linked to infrastructure investment, and wonorders in five countries in FY2023, mainly in Indonesia. We will further strengthen demonstration activities
and the development of new dealers, and in the future, we aim to create a crushed stone market in Southeast
Asia as the third market following North America and Europe.

In the area of hydraulic breakers, in Japan, we are concentrating on developing super-large hydraulic breakers
for the demolition market in the Tokyo metropolitan area, and we will strengthen our presence in the
demolition market by increasing our market share of super-large breakers in the Tokyo metropolitan area.
Overseas, in addition to expanding sales of super-large breakers in North America, we will expand sales ofhydraulic breakers in the major European markets of France, the UK, Italy, and Germany, and develop demandin Eastern Europe with a view to the reconstruction of Ukraine.
For auxiliary parts, we will promote sales of auxiliary parts by strengthening free-of-charge inspections andpurpose-specific maintenance proposals in line with the status of machines in operation and customer
requests. In addition, we have established a western base in North America in FY2023 and will strengthen ourcustomer support business through a fixed price maintenance program for hydraulic breakers and otherproducts, and by strengthening our immediate delivery system.
As for maintenance services, we have established an operating company in 2023 to directly provide
maintenance services for blast hole drills and products in the North Kanto region. It will also serve as a place
to develop and strengthen our mechanic personnel.
In addition, to support customers' productivity improvement (customer success) through the operation
support system, we will launch two paid services in FY2023: Report Delivery, which analyzes operation data
based on the data obtained from the operation support system and delivers reports; and Drill Operation,
which analyzes drilling operation data and provides guidance on improving drilling operation efficiency. We
will strengthen the development and sale of these intangible services that support the success of customers'
businesses and support our customers throughout their life cycle.

Finally, this is the UNIC segment. With regard to UNIC cranes, we are working to expand sales in Japan ofsuperior products such as joystick-type radio-controlled cranes, to reflect cost increases in selling prices, toimprove our mounting system, and to respond to the future shift to electric truck vehicles, strengthening ourdevelopment system.
Truck production fell due to the COVID-19 pandemic and parts shortages, but as you can see, regular truck
registrations are recovering. However, the delivery time for the front-end process of crane installation, truck
production, and body machining has lengthened considerably, from two to three months before COVID-19 toaround one year now, which has affected crane mounting. It is expected to take the entire year of 2024 forthis to be resolved, and we will continue to closely monitor the situation.
Overseas, in addition to expanding sales of large and super-large UNIC cranes in the Southeast Asian andMiddle Eastern markets, we will build a network of dealers by upgrading dealers in existing regions andestablishing dealers in future markets and expand the functions of models sold and develop new products forthe future.

As for mini-crawler cranes, in Japan, we will cultivate the market and increase sales with new electric minicrawler cranes for overseas markets, which are scheduled to be launched in FY2024, and also start nationwide
sales of cranes for residential construction in FY2024.
Overseas, we are expanding sales of the new electric mini-crawler crane (UM325C) launched in Europe,
increasing sales of large mini-crawler cranes in North America, and cultivating demand in Southeast Asia by
preparing demo equipment at dealers and strengthening promotions.
We plan to introduce a new flat-type model of UNIC carrier in FY2024, which will help us to increase our sales
share. That is all for the explanation.
Through a growth strategy to take our core machinery business to a new stage of sustained expansion, we
will increase profits, improve capital efficiency by reducing strategic shareholdings, and streamline andoptimize shareholders' equity by increasing shareholder returns. Thus, we will continue to aim to achieve ROEof around 8% and also work to reduce the cost of capital.
In addition, we will strive for appropriate information disclosure and active dialogue with investors to obtainsufficient evaluation from the market to enhance our corporate value and achieve a P/B ratio of over 1x assoon as possible.
I would like to ask all of our shareholders and investors for their continued support of FURUKAWA CO., LTD.

Question & Answer

Shibata [Q]: This is Shibata from SBI SECURITIES.
First, overall, I am aware that external factors and internal human resources, as well as other factors, have led
to an irreversible increase in costs recently. Could you explain how to cover cost increases through price passon or improvement of the mix, and what you would do to counteract the cost increase including specificexamples?
The second is about the metals segment, which I believe has changed the stage since the entrusted contract
with Onahama Smelting and Refining was terminated. However, the current situation in spot TC/RC is quite
bad. Could you explain how you are looking at the metals segment from the viewpoint of business continuity,etc.?
As for the third question, could you give us some more background on the segments whose profits have
moved more strongly this fiscal year than last? The first is rock drill machinery segment, and the second isindustrial machinery segment. Could you tell us a little more, for example, with rock drill machinery segment,
is North America getting worse off all at once?
Nakatogawa [A]: First, how do we respond to the irreversible increase in costs? We purchase raw materials
and parts from our suppliers, and we have to proceed with our business based on the idea that the prices ofthese items will never go down again. So, one of the issues is how to absorb such costs.
As a matter of fact, yesterday, there was a debriefing on product development, where we discussed how todesign for higher productivity, how to reduce costs by making parts, simply put, lighter, etc. There are manymeasures to be taken, and first they must be done from the development stage. And I think that what hasgone up is naturally going to be passed on.
Specifically, the good performance of rock drill machinery segment last year was due in large part to the factthat price pass-through proceeded smoothly. Conversely, as for UNIC, although prices were raised to pass on
cost prices, orders (before the price increase) were concentrated. In addition, truck deliveries were poor, andit was difficult to clear the backlog of orders, which had a negative impact.
We will raise the prices of each product this year as necessary. Specifically, for UNIC products, we have alreadyissued a notice that the prices will be raised during H1, and we would like to reflect this in the cost priceincreases.
Second, regarding metals segment, the situation for TC/RC is not good. This is one of the reasons why we haveset a very tight budget for this fiscal year. However, since we have integrated our (entrusted smelting)operations with Hibi Kyodo Smelting, we have been able to procure and sell products quite efficiently,
including raw materials. We would like to continue to further increase our profits in this area for the time
being, after clearly assessing the situation.
For exporting of electrolytic copper and sulfuric acid, which are surplus to domestic demand, was not very
profitable, so we reduced the amount of exports to zero or considerably less. So, I think we can say that the
profitability of this aspect has also improved.
As for the performance of this fiscal year, first I would like to talk about rock drill machinery segment. As I
explained earlier, North America was the driving force behind the growth in the last fiscal year. Looking at thecurrent situation in North America, our view is that the situation is relatively steady. There has been no decline.

However, since there was a considerable volume of shipments in FY2022 and FY2023, we are taking a firmview that the market will inevitably take a step back or wait and see. Of course, there is also the uncertain
factor of the presidential election.
However, this is a one-time event in FY2024, and we will continue to implement various measures in FY2024
and FY2025, including measures for the western base, etc., so we believe that we will be able to expand thebusiness.
In the industrial machinery segment, there was an unexpectedly large additional cost, resulting in a large
negative balance, and the results did not reach the initial plan. In addition to the elimination of this factor, as
I mentioned earlier, material machinery projects have been coming out a lot, and we are expecting conveyors
and bridges to bear fruit here as well.
In the previous fiscal year, the order scheduled for February or March, was extended into the next fiscal year,
etc., and some of the sales associated with the percentage-of-progress method were not recorded, and we
expect those to be positive again this fiscal year.
Shibata [Q]: As for the smelting of the metals segment, even if TC/RC did not go up at all, and even if the
deficit were to continue for a long time in the future, would you take a wait-and-see approach? Or, if it
becomes too difficult to continue the business, is there an option to cut out the business, which would be
difficult because there are probably some customers?
Nakatogawa [A]: Of course, as the management of the Company, if it is not viable as a business, it is only
natural to consider whether or not to cut it out as a business.
However, although TC/RC this year is considerably worse than last year, we are still managing to make a profit
even under the current circumstances. If the situation changes in the future, we will naturally have to make abusiness decision as to whether or not to continue the business.
Shibata [Q]: In industrial machinery segment, looking at the status of orders from customers in material
machinery and bridges, is it safe to say that there is a high degree of certainty that you will be able to receive
orders for these items this fiscal year?
Nakatogawa [A]: Though some of them are inevitably long-term projects, orders are also increasing, and webelieve that industrial machinery’s figure is highly reliable.
Ozaki [Q]: This is Ozaki from Daiwa Securities.
On page 19, you have indicated a tree of initiatives to enhance corporate value. Could you tell us how you, as
President, are currently evaluating the progress of these initiatives, and what your perception of futurechallenges is?
In particular, I have the impression that the increase in profits from the growth strategy has not reached thetarget. What is your current assessment of each of these measures?
The second point, is that the machinery business is not growing profitably. Could you tell us what thechallenges are in terms of external factors, then demand factors, competition factors, and internal factors
including your company's costs? I would appreciate a general comment on the background of this slight delay
in profits growth in the machinery business.
Nakatogawa [A]: First, I would like to talk about initiatives to enhance corporate value. In order to achieve
ROE of around 8%, the main issue will be how to achieve the growth strategy.

However, operating profit was JPY8.5 billion in the previous fiscal year, and the budget for this fiscal year isonly a slight addition to that amount, which I think is very insufficient. Therefore, we believe that there arestill many things in our future strategy that are insufficient, or that we need to make changes. This is the
Medium-Term Business Plan 2025, but we would like to consider the situation, including the possibility of
updating or changing the current plan, based on our understanding of the current situation.
We regret that we may have been too late in our decision to reduce our strategic shareholdings. However,
we would like to bring the rate down to less than 20% by end of March 2025, and continue to reduce it beyond
FY2025.
Then the machinery business. The achievement of the final goal of this Medium-Term Business Plan, depends
on how we can grow the machinery business. As you say, the figures (the previous year’s financial results andthis fiscal year forecasts) are not as expected.
The biggest factor, after all, is the inability to make profits and revenues that exceed the considerable costs
involved. Both industrial machinery segment and UNIC machinery segment still have a cost structure, andeach business segment continues to work on cost reduction and price pass-on.
As for rock drill machinery segment, as I mentioned earlier, we are working to further expand our business in
new markets and in North America, and we are determined to achieve the goals of the Medium-Term Business
Plan.
However, the current situation is quite difficult, and we would like to take another look at our future growthstrategy and carefully refine it.