Financial Results for the Fiscal
Year Ended March 2021
Presentation Material

May 25, 2021

This document contains forward-looking statements that reflect the Company’s judgments based on
various assumptions. The Company makes no guarantees or promises regarding the certainty,
completeness, or implementation status of such statements.
1

Contents
1. Financial Results for the FY2021 (Consolidated)
2. Financial Forecasts for the FY2022 (Consolidated)
3. Outlook for the Formulation & Announcement of the New
Medium-term Management Plan
4. Strengthening of the Group’s Business Structure to be
Achieved in FY2022・FY2023
5. Plan to Achieve Carbon Neutrality
6. Ref. Medium-term Management Plan 2023（Supplementary Material）
2

1. Financial Results for the FY2021 (Consolidated)【Financial Results】
End of Mar.
2019

End of Mar.
2020

End of Mar.
2021

VS 2020
DifferencesalesMilliony e n

174,116

165,215

159,702-5,513Operatingi n c o m e

Mi l l i o n
y e n

8,915

8,693

5,592

-3,100Operating margin

%

5.1

5.3

3.5

-1.8

O r d i n a r y
i n c o m e

Mi l l i o n
y e n

8,235

8,135

6,773

-1,361

Profit attributable toowners of parent

Million
y e n

4,654

4,431

7,468

3,036

Net

20,000Net Sales(Million of yen)

200,000
Operation Income(Million of yen)

【Financial Conditions】

174,116
165,215
159,702

End of Mar.
2020

To t a l A s s e t sMillionNet Assets

MillionCapital adequacy
r
a
t
i
o

%

N e t
p e r

a s s e t s
s h a r e

ROE

209,697

End of Mar.
2021

218,275

15,000Difference

150,000

8,578

77,966

94,364

16,397

36.0

42.0

6.0

100,000

8,915

10,000

8,693

5,592
5,000

50,000Y e n%1,926.32

2,348.53

422.21

5.8

8.9

3.1

0

0
Mar. 2019

Mar. 2020

Mar. 2021

3

Affected by the Expansion of COVID-19
Segment
Affected by the expansion of COVID-19 infection
infection

Machinery

Industrial

The impact was limited, although there was some suspension andpostponement of construction work.

Rock Drill

Shipments decreased in Japan due to lower machine utilization and suspended purchases.
No impact on demand for tunnel drill jumbos.
Overseas, with the exception of China and some other countries and regions, economic activity was stagnant due torestrictions on behavior and other factors, and customer companies remained reluctant to purchase machinery throughout
the year.

U

The impact in Japan was noticeable in the Tokyo metropolitan area, with orders being sluggish due to the postponement oftruck deliveries, suspension and postponement of construction work, and postponement of investment by rental companies.
However, demand for trucks entered a recovery trend in the second quarter, and orders for UNIC cranes were flat from theyear‐before level.
Overseas, the results in Southeast Asia were significantly affected by COVID‐19. Shipments of UNIC cranes decreased
there. Shipments of mini crawler cranes decreased in Europe and the US due to the impact of interrupted construction work.

N

I

C

Materials
Other

M e t a lOverseas market prices for electrolytic copper plummeted toward the end of the fiscal year ended March 2020 due to theprospect of a slowdown in the global economy, but turned up substantially in the fiscal year under review due to
expectations of an economic recovery, the supply of vaccines, and the start of vaccinations. Demand for electric wires andcopper products remained flat YoY from the third quarter onward due to the recovery of production in the automobile
industry, but domestic demand for electrolytic copper decreased significantly.

Electronics

Demand for crystal products and coils decreased due to the impact of production activity in the automobile industry andother sectors, but there was a recovery trend in the second quarter and thereafter.

Chemicals

Demand for sulfuric acid decreased due to inventory adjustments by customers.

Real Estate

the commercial facility in the Muromachi Furukawa Mitsui Building (COREDO Muromachi 2) was temporarily closed
following the declaration of a state of emergency in April last year. After the facility resumed operations, the number ofvisitors declined compared to the normal state.

※As for the details of the impact of COVID‐19 on each segment's performance, etc., please refer to Business and Other Risks on page 10 of the Summary of Financial Results for
the Fiscal Year Ended March 2021.

4

Financial Results by Segment (Consolidated)（Unit：Million yen）

Net Sales

FY2020MachineryI n d u s t r i a l
R o c kD r i l lU
NICMaterials

FY2021

82,691
23,237
27,66331,791
79,366

68,635
16,682
24,14927,80488,203-14,056-6,555-3,513-3,987
8,836

s67,14976,0948,945

E l e c t r o n i c s
C h e m i c a l s
Real Estate
Other
Total

5,506
6,710
2,386
771
165,215

5,741
6,367
2,107
755
159,702

235
-343
-278
-15
-5,513

M

e

t

a

l

Operating
IncomeMachineryI n d u s t r i a l
R o c kD r i l lU
NICMaterial
M e t a l s
E l e c t r o n i c s
C h e m i c a l s
Real Estate
Other
Adjustment
Total

FY2020
7,343
3,208
142
3,992
776
301
-35
510
735
-94
-68
8,693

FY2021
3,968
2,113-1,324
3,180
1,040
499
161
380
736
-82
-71
5,592

FY2021Comparison to
the previous
fiscal year

LME Copper Price

6,879＄/Ton

1,019＄/Ton

J P Y r a t e pe r U S $106.1Yen/＄-2.7Yen/＄

Difference

Difference-3,374-1,094-1,467
-812
264
197
196
-130
0
12
-2
-3,100

Backlog of orders in the Industrial Machinery Segment
FY2021
Backlog of orders¥ 9.8 Billion

Comparison to
the previous
fiscal year

¥ 1.0 Billion

・Constructing a new bridge of Yamashiro Sports Park Joyo Line
(Kyoto Prefecture)・Sealed hanging conveyor (SICON® ) for the construction of the
Chuo Shinkansen 1st metropolitan area tunnel(Kitashinagawa
Industrial Zone). etc.
Impact of metal price fluctuations on operating profit in the Metals segment

FY2021Comparison to
the previous
fiscal year

Operating Income¥490 million¥190 million

Include price effects¥1.51 billion¥1.01 billion

Copper(¥940 million)(¥940 million)

Gold(¥460 million)(¥-40 million)
52

Increase/Decrease in Earnings by Segment (Consolidated)
Operating Income

Net Sales
Billionyen

Copper ¥+6.5billlion

Overseas -2.4billion(Shipments of hydraulic crawler drills decreased mainly inSoutheast Asia. Etc.)（Volume -1.2billion, Unit cost ¥+7.5billin）(Volume +0.3billion, Unit cost ¥+1.9billion),
etc.

Shipments of UNIC cranes decreased inSoutheast Asia. So did those of mini crawler
cranes in North America.

Chemicals

Overseas -1.0billion

Electronics(Decreased YoY in reaction to active orders in theprevious year, which had been supported by a rush indemand ahead of a partial revision to the mobile
crane structural standards and a rush in demand prior
to the enactment of the exhaust emission standards
for light trucks.)

MetalsDomestic -2.9billion+0.0billion+0.1billion-0.8billion+0.1billion+0.1billion

UNIC

UNIC

(Closure of the Furukawa Osaka
Building.)-1.4billion

Rock Drill

Real Estate-0.2billion

Real Estate, Other

ChemicalsIndustrial

Decreasein demandfor sulfuric
acid andcoppersuboxide.

-0.2billion

Real Estate, Other-1.0billion

Industrial

Electronics

MetalsRock Drill

Increase due toincrease in sales-0.3billion+0.2billion

Falls in sales
because oflarge‐scale
projects had
been completed
in the previous
fiscal year

Overseas market price increase which
offset a decline in profit in thecontracted business caused byworsened purchasing conditions

High-purity metallic arsenic& aluminum nitrides
increased, crystal products
decreased, coils were flat.

-6.5billion-3.9billion

Exchange rate 106.1(¥/＄)(YoY -2.7)

Decrease due todecrease in sales

Gold ¥+2.4billion+8.9billion-3.5billion¥5.5billion-3.1billion（down35.7%）

Decrease due todecrease in sales

Decrease due todecrease in sales
Decrease due todecrease in sales

FY2021 Results(Shipments of hydraulic crawler drills, hydraulic breakers,
and hydraulic crushers decreased, Drill jumbos increased.)¥8.6billion

FY2020 Results

Domestic -1.0billion

FY2020 Results

Billionyen¥159.7billion-5.5billion（down3.3%）

FY2021 Results¥165.2billion

Sales and income increased in Metals segment & Electronics segment, but Sales and income decreased in 3 Machinery
segment & Chemicals segment.
significantly increase operating income from the forecast of JPY2 billion which announced in August last year.

6Consolidated Income Statement(Unit:Million yen)

FY2020Net sales
Cost of sales(Gross profit)
Selling, general and administrative expenses
Oprerating income
Non-operating income

FY2021

Difference

165,215
138,940
26,275
17,582
8,693
1,595

159,702137,508
22,194
16,601
5,592
2,749-5,513-1,431-4,081-980-3,100
1,154

772
218

749
179

-22
-38

-

355

355

-

702

702

Dividend income
Interest income
Share of profit of entities accounted for using
equity method
Exchange margin
Reversal of allowance for the tenant moveout compensation cost
Other
Non-operating expenses
Interest Expenses
Control cost of Suspended mines
Exchange loss
Other
Ordinary income
Extraordinary income

264

-

-264

340
2,153
512
715
553
372
8,135
701

762
1,568
456
769
342
6,773
4,105

421
-584
-55
54
-553
-29
-1,361
3,403

Gain on sales of investment securities

20

4,078

4,058

Other
Extraordinary losses
Loss on retirement and sale of fixed assets
Loss on revaluation of investment securities
Demolition cost of leasing building
Other
Profit before income taxes
Income taxes
Income taxes adjustment
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

681
1,555
143
1,029
382
7,280
1,425
1,213
4,641
209
4,431

26
971
151
730
89
9,907
2,172
65
7,670
201
7,468

-654
-584
7
-1,029
730
-292
2,626
746
-1,148
3,028
△8
3,036

Mainly turnaround Hibi Joint Smelter.
(Recorded investment loss in the previous
fiscal year)
Recorded return of the allowance due tothe end of negotiation for tenants to moveout of Furukawa Osaka Building in theprevious fiscal year.

Improvement of foreign exchange gains
and losses.

Sold investment securities for effective
use of assets and restoration of financial
health.

The gain on the sale of Furukawa Daimyo
Building (Fukuoka) was recorded by ¥583
million in the previous fiscal year.
Recorded investment securities valuation
loss due to decline in stock prices in theprevious fiscal year.
The cost of demolition work progress ofthe Furukawa Osaka Building.

7

Consolidated Balance Sheet(Unit: Million yen)
End of Mar. 2020

End of Mar. 2021

Difference

Current assets

85,72588,6252,900

Non-current assets

123,971

129,649

5,678

89,83889,817

-20

361

341

-20

33,77139,4905,719

209,697

218,275

8,578

Current liabilities

52,55547,839-4,716

Non-current liabilities

79,17576,071-3,103

131,730

123,910-7,819

Shareholders' equity

71,01876,373

5,355

Capital stock

28,20828,208--2

2

Retained earnings

44,50750,025

5,518

Treasury stock-1,697-1,862-165

Total accumulated othercomprehensive income

4,525

15,396

10,871

Non-controlling interests

2,423

2,594

171

Total net assets

77,966

94,364

16,397

Total liabilities and net assets

209,697

218,275

8,578

AssetsProperty, plant and equipment
Intangible assets
Investments and other assets
Total assets

Increased cash and cash equivalents,
Decreased notes and accounts
receivable-trade, etc.

Increased investment securities due torose on stock price, etc.

Liabilities

Total liabilities
Net assets

Capital surplus

Decreased electronically recorded
obligations-operating, account payable,
retirement benefit liability, etc.
Increased valuation difference on
available-for-sale securities,
remeasurements of defined benefit plans,etc.

■Interest-bearing debt

(Unit: Million yen)

End of Mar.
2020

Short-termLong-term
Total

8,570
61,84270,412End of Mar.
2021

Difference

8,436
61,246
69,683

-133
-596
-729

8

2. Financial Forecasts for the FY2022 (Consolidated)【Financial forecasts】(Unit: Million yen)

(Unit: Million yen)

End of Mar.
2021

End of Mar.
2022
(Forecast)Differences a l e s

159,702

184,400

24,697I n d u s t r i a l

Operating income

5,592

6,600

1,007

R o c kO r d i n ar y i n com e

6,773

6,600

-173

N e t

Net sales

End of Mar. 2021

End of Mar. 2022
(Forecast)

Machinery

68,635

76,1007,464

16,682

18,7002,017

D r i l l

24,14928,3004,150

I27,804

29,1001,295UProfit attributable toowners of parent

7,468

Annual dividend

50 yen3,600
50 yen- Sales and Operating income increased.

C

Material-3,868－N

Difference

88,203

105,500

17,296M e t a l s

76,09492,70016,605

Electronics

5,741

6,400

658

Chemicals

6,367

6,400

32

Real Estate

2,107

2,100

-7

Other

755

700

-55

Total

159,702

184,400

24,697

End of Mar. 2021

End of Mar. 2022
(Forecast)- Ordinary profit will decrease slightly YoY, as there were the foreignexchange gains in the previous year.

Operating Income- Profit attributable to owners of parent is also expected to decrease YoY, as there was

Machinery

the gain on the sale of investment securities in the previous year.

End of Mar.
2021

End of Mar.
2022
(Forecast)Difference

LME Copper Price

6,879＄/Ton

8,000＄/Ton

1,121＄/Ton

JPY rate per US$

106.1 yen/＄

108.0 yen/＄

1.9 yen/＄Operating income increase annually about ¥100 million due to ¥1 week to US dollar.
- Increase about ¥60 million in Machinery business (mainly Rock Drill)- Increase about ¥40 million in Metals segment

3,968

6,300

2,331

I n d u s t r i a l

2,113

2,200

86

R o c kD r i l l

-1,324

750

2,074

I

3,180

3,350

169

1,040

-100

-1,140M e t a l s

499

-700

-1,199E l e c t r o n i c s

161

200

38

C h e m i c a l s

380

400

19

Real Estate

736

650

-86

Other

-82

-180

-97

Adjustment

-71

-70

1

5,592

6,600

1,007

U

Regard to exchange rate sensitivity

DifferenceN

C

Material

Total

9

Increase/Decrease in Earnings by Segment FY2022
Operating Income

Net Sales¥184.4billion+24.6billion (up15.5%)

Billionyen

higher sales, which will offset an
expected increase in expenses resulting
from the resumption of sales activities

Gold +5.0billion(Volume+4.4billion, unit price+0.5billion)(Assuming a gradual demand
recovery from COVID-19.)

FY2021 Results

FY2022 Forecast

The loss was recorded in
the black from theprevious year.

Real Estate
Increased costs such as
repair costs, etc.

Same as the previous year when it
was highly profitable by bridges.

Real Estate, Other

ChemicalsElectronics

Metals(Assuming a gradual demand
recovery from COVID-19
infections.)+2.0billion+0.0billion

Rock Drill

Domestics +0.1billion
Overseas +1.1billion+.00billion+.00billion-.0.1billion

Industrial

Increased due to bridge
construction and otherlarge-scale projects

Real Estate, Other+2.0billion

Metals

+0.4billion

ChemicalsElectronics

UNIC

Rock Drill

Industrial+1.2billion

Decrease caused by the worse
purchasing conditions for copper
concentrate and we expect no profit fromthe fluctuations in metal prices(1.5billion)
as we enjoyed it in the previous year.

UNIC+16.6billion(YoY+1.9)-1.1billion+0.1billion+0.0billion+0.6billion-0.0billin

FY2021 Results

Exchange rate 108.0 (¥/＄)

Other

Increased
demand ofcrystal productand coils¥6.6billion+1.0billion (up18.0%)

BillionProfit is expected to increase due toyenCopper +11.2billion(Volume+0.2billion,Unit price+10.9billion)

Domestics +1.0billion
Overseas +3.1billion¥5.5billion

FY2022 Forecast¥159.7billion

Sales will increase on the assumption that they will show a gradual recovery from the drop in demand due to theimpact of COVID‐19. Profit is expected to increase due to higher sales mainly in the 3 machinery segment.
10State of Capital Investment, Depreciation and Amortization, Research and Development
Expenses (Consolidated)【State of Capital Investment (Consolidated)】
Capital Investment

Machinery BusinessEnd of Mar.
2019
4,421

End of Mar.
2020
4,123

(Unit: Million yen)

End of Mar.
2021
2,637

End of Mar.
2022
(Forecast)
3,800

Industrial Machinery

269

404

1,253

2,700

Rock Drill Machinery

2,386

2,782

437

300

UNIC Machiner y

1,765

936

946

800

Material Business

375

1,229

827

700

O

t

h

e

r

645

585

679

800

T

o

t

a

l

5,442

5,938

4,144

5,300

Increased due toconstruction of a new officebuilding at Oyama Works.

【State of Depreciation and Amortization (Consolidated)】
Depreciation andAmoritization

3,473

3,589

3,879

4,000

【State of Research and Development Expenses (Consolidated)】
ResearchandDevelopment
E x p e n s e s

1,504

1,177

1,164

1,300
11

State of Metal Products, Foreign Exchange Rate, Employees (Consolidated)【State of Metal Products, Foreign Exchange Rate (Consolidated)】
End of Mar. 2019

End of Mar. 2020

End of Mar. 2021

End of Mar. 2022
(Forecast)€/pound

287.6

265.8

312.0

362.8

＄/ton

6,341

5,860

6,879

8,000

J P Y r a t e p e r U S $(average for fiscal year)

110.91108.74106.06108.00

Production and marketing of
Furukawa Metals & Resources Co., Ltd.

End of Mar. 2019

End of Mar. 2020

End of Mar. 2021

End of Mar. 2022
(Forecast)

Copper output (t)81,346

77,06974,38673,746

Copper sales volume (t)85,146

83,864

81,99882,320O verseas market
price of copper( a A v e r a g e )<About copper output>
we plan to reduce copper output gradually from 88,004 ton/year at FY2018. As the first step, we
have already reviewed the ratio of our consigned copper production at the joint smelting works.

【State of Employee (Consolidated)】

Number of consolidated employee (Persons)

End of Mar. 2019

End of Mar. 2020

End of Mar. 2021

2,757

2,755

2,752

VS End ofMar. 2020
difference-312Long-term Performance〔Consolidated Financial Results〕
Net sales
Operating income
Ordinary income
Profit attributable to ow ners of parent(Unit: Million yen)

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023(Forecast)

200,749
16,89815,613
17,554

213,426
14,407
12,9408,595

161,857
2,303
993-5,917

142,925
1,597
111
585

165,638
2,821
1,231
563

157,566
2,154
1,268-1,659165,539
3,363
2,763
2,976

163,026
6,886
6,150
3,976

172,544
8,925
6,603
9,793

161,799
7,988
6,227
5,056

149,829
6,545
7,202
4,254

167,695
7,820
8,105
4,774

174,116
8,915
8,235
4,654

165,215
8,693
8,135
4,431

159,702
5,592
6,773
7,468

184,400
6,600
6,600
3,600

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023(Forecast)

67,795
14,11933,046
20,629100,656
84,753
9,364
6,538
2,936
1,154
―
28,206200,749

75,841
17,33137,49721,012
112,796
97,519
8,751
6,525
2,758
1,294
―
20,735
213,426

62,63915,83629,427
17,37580,17568,786
5,568
5,820
2,386
1,204
―
15,452
161,857

44,313
12,783
20,386
11,14282,12871,132
5,969
5,025
2,043
854
3,692
9,893
142,925

47,025
10,65523,88012,49092,203
79,979
7,147
5,076
1,577
785
15,0409,004
165,638

53,19812,94924,143
16,105
77,917
68,114
4,615
5,187
1,233
766
14,874
9,576
157,566

56,852
12,89423,30520,651
88,026
77,944
4,987
5,093
1,058
753
15,0783,770
165,539

71,111
18,527
26,842
25,741
90,162
78,684
5,381
6,096
1,013
739
―
―
163,026

75,99016,71230,91028,367
93,27081,513
5,743
6,013
2,535
747
―
―
172,544

72,232
14,92630,07627,22985,644
74,192
5,477
5,973
3,045
876
―
―
161,799

66,803
14,041
26,97925,78278,96867,853
5,816
5,298
3,074
983
―
―
149,82973,453
15,87130,19927,381
89,987
77,334
6,307
6,344
3,338
916
―
―
167,695

77,58017,97130,372
29,23792,72280,067
6,527
6,127
2,999
814
―
―
174,116

82,691
23,237
27,66331,791
79,366
67,149
5,506
6,710
2,386
771
―
―
165,215

159,702

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Segment Performance〔Net Sales〕
Machinery
Industrial
Rock Drill
UNIC
Material
MetalsElectronics
Chemicals
Real Estate
Other
Paints(*1)
Fuels(*2)
Total(Unit: Million yen)

68,635
16,682
24,14927,80488,20376,094
5,741
6,367
2,107
755

〔Operating Income〕
Machinery
Industrial
Rock Drill
UNIC
Material
MetalsElectronics
Chemicals
Real Estate
Other
Paints(*1)
Fuels(*2)
Adjustment
Total

76,10018,70028,30029,100105,500
92,700
6,400
6,400
2,100
700
184,400(Unit: Million yen)

5,901
72
3,120
2,708
10,925
8,837
1,386
701
839
-301
―
-114
-351
16,898

6,837
837
3,702
2,297
7,661
6,206
984
470
749
-228
―
-430
-181
14,407

1,733
767
255
710
229
23
4
201
706
-304
―
202
-264
2,303

-3,022433-2,584
-870
3,985
3,224
657
104
1,128
-376
-19
-29
-69
1,597

-566
-29
-350
-186
3,044
1,494
1,279
269
635
-92
-93
-56
-49
2,821

1,970
708
333
928
325
308
-234
251
356
-93
-329
-13
-60
2,154

FY2023(Forecast)

2,923
778
-67
2,212
324
282
-262
304
219
-63
65
-28
-78
3,363

5,333
1,851
341
3,141
1,695
1,503
-123
315
-43
-60
―
―
-39
6,886

6,551
1,711
1,225
3,614
1,770
1,449
52
267
776
-130
―
―
-42
8,925

5,882
1,037
2,217
2,627
983
1,154
-368
197
1,276
-72
―
―
-80
7,988

3,580
104
897
2,578
1,870
1,738
17
114
1,265
-126
―
―
-44
6,545

5,083
1,005
1,782
2,295
1,648
867
330
451
1,339
-196
―
―
-55
7,820

6,567
2,088
1,689
2,789
1,396
581
407
406
1,163
-147
―
―
-64
8,915

7,343
3,208
142
3,992
776
301
-35
510
735
-94
―
―
-68
8,693

3,968
2,113
-1,324
3,180
1,040
499
161
380
736
-82

-71
5,592

6,300
2,200
750
3,350
-100
-700
200
400
650
-180
―
―
-70
6,600

7,855
83.10

7,104
100.246,554
109.935,215
120.13

5,154
108.426,444
110.856,341
110.915,860
108.74

6,879
106.068,000
108.00*1 Withdrew from the Paints business by transferring shares of Tohpe Corporation in March 2013.
*2 Withdrew from the Fiels business by transferring shares of Furukaw a Commerce Co., Ltd. in October 2012.
Notice: By applying "Accounting standards for disclosure of segment information, etc." (FY2012), w e replace and display the figure for FY2011.

LME copper price(US$/ton)
JPY rate per US$

6,970
118.03

7,584
114.285,864
100.54

6,101
92.85

8,139
85.71

8,485
79.07

13

Intentionally Blank

Contents
1. Financial Results for the FY2021 (Consolidated)
2. Financial Forecasts for the FY2022 (Consolidated)
3. Outlook for the Formulation & Announcement of the New
Medium-Term Management Plan
4. Strengthening of the Group’s Business Structure to be
Achieved in FY2022・FY2023
5. Plan to Achieve Carbon Neutrality
6. Ref. Medium-term Management Plan 2023（Supplementary Material）
14

3. Outlook for the Formulation & Announcement of the New
Medium-Term Management Plan
Creation "Corporate value"and "Social value"

Vision for 2025
(ideal image for 150th anniversary of foundation)

Become a corporate group that leverages its
reputation for category leadership anduniqueness to deliver growth.
(Established November 6, 2015)

Targetingconsolidated annual
operating income
regularly in excess of¥15 billion

M e d i u m - t e r mManagement Plan etc.

Phase

Phase 1

Phase 2Phase 3Time period

FY2018-2020

FY2021-2023

FY2024-2026

Positioning

Built foundations
for renewed growth

Expedite growth and further
improve profitability

Complete realization of
Vision for 2025

Designation

Medium-Term
Management Plan 2019

Medium-Term
Management Policy 2022

Medium-Term
Management Plan 2025

Approx. ¥8.5billion [¥8.6billion*]

We postponed announcement of MediumTerm Management Plan 2022 and instead
decided to formulate/ announce
consolidated performance forecasts foreach single fiscal year.

We will consider disclosing theplan when we announce ourresults for fiscal 2023.

Perfo
rman
ce
indic
ators

OperatingincomeＲＯＥ

Approx.6-7% [5.8%]

15

Medium-Term Management Plan & PDCA Cycle
We have divided our Long-Term Management Plan "Vision for 2025" into 3 phases, set the milestones for PDCA(Non publishable) at phase1&2 inadvance, and have used each Medium-Term Management Plan as an important tool to achieve our Vision for 2025 by rolling the plans.
We positioned FY2021 and FY2022 as a period for carefully assessing changes in values, lifestyles, business models, and others caused by COVID‐19,
vigorously promoting the strengthening of our business structure, and focusing on an early recovery of the Group's business performance.

PeriodFY2018-2020

Positioning

Building foundations forrenew ed grow th

Phase 2Phase 3

FY2021-2023

FY2024-2026

Expedite grow th andfurther improve profitability

Complete realization of
Vision for 2025

Goals

Phase 1

Milestones

Phase

Milestones*1 Milestones for PDCA(Non publishable)：Numerical for PDCA(Non publishable) in advance was rolling the plan when publish Medium-Term Business Plam.

Medium-Term Management Plan 2019(announced publicly)
Rolling Medium-Term Plan (PDCA)

Backcasting+

Rolling Medium-Term Plan (PDCA)

Medium-Term Management Policy 2022
(announced publicly)

3-year rolling method
Announce consolidated performance
forecasts for each single fiscal year+
Milestones

Rolling Medium-Term Plan (PDCA)
Rolling Medium-Term Plan (PDCA)+
Effective PDCA

Medium-Term Management Plan 2019(announced publicly)Long-Term Action Plan (to be implemented steadily through PDCA cycle of medium-term action plans)

16

Management & Financial Indicators(Billion yen)
16

（%）

14

12

8.9

12
10
8

10

5.8

5.9

8
Profit of over 15
billion yen stably

6
4
2

6.5

Financial
Indicator

6
4

8.6

5.5

2
0

0

Management
Indicator

14

ROE

Operating Income

ROE double
digits level

FY2016(Base year forcomparison)

FY2019FY2020

FY2025Image¥6.5 billion¥8.6 billion¥5.5 billion

Regularly in excessof ¥15 billion

5.9%

5.8%

8.9%

Double digits level

Debt / Equity ratio

0.9 times

0.9 times

0.8 times

Approx. 0.6～0.7
times

Interest-bearing debtto-EBITDA ratio

7.6 times

5.7 times

7.4times

4 times level

Operating
IncomeROE

Issuers rating

BBB

BBB

BBB

BBB+以上

（JCR）

（JCR）

（JCR）

（Japanese rating firm）(※) Debt / Equity ratio＝Interest-bearing debt (Term end) / Equity (Term end)(※) Interest-bearing debt-to-EBITDA ratio＝Interest-bearing debt (Term end) / (Operating income＋Depreciation and amortization）

17

Segment Performance[Preconditions]

FY2017(Results)

FY2018(Results)

FY2019(Results)

FY2020(Results)

FY2021(Results)

FY2022(Forecast)

JPY rate per US$

108.4 YEN/USD

110.9 YEN/USD

110.9 YEN/USD

108.7 YEN/USD

106.1 YEN/USD

108.0 YEN/USD

LME copper price

5,154 USD/t

6,444 USD/t

6,341USD/t

5,860 USD/t

6,879 USD/t

8,000 USD/t

Differ to announce “Mid-TermBusiness Plan 2022".
Formulate & announce
Forecast every single year.

(Unit: Million yen. Rounded down to million yen)

Net Sales

FY2017(Results)

FY2018(Results)

FY2019(Results)

FY2020(Results)

FY2021(Results)

FY2022(Forecast)

FY2023(Undecided)

66,80373,45377,58082,691

68,635

76,100-Industrial

14,041

15,871

17,971

23,237

16,682

18,700-Rock Drill

26,97930,19930,372

27,66324,14928,300-UNIC

25,782

27,381

29,23731,79127,804

29,100-78,96889,98792,722

79,366

88,203

105,500-

Metals

67,853

77,33480,067

67,14976,09492,700-Electronics

5,816

6,307

6,527

5,506

5,741

6,400

-

Chemicals

5,298

6,344

6,127

6,710

6,367

6,400

-

3,074

3,338

2,999

2,386

2,107

2,100

-

983

916

814

771

755

700

-

149,829

167,695

174,116

165,215

159,702

184,400-

Machinery

Material

Real Estate
Other[Total]18

Operating Income Trends by Segment
We postponed announcement of Medium-Term Management Plan
2022 and instead decided to formulate/ announce consolidated
performance forecasts for each single fiscal year.

Operating Income

FY2017(Results)

FY2018(Results)

FY2019(Results)

FY2020(Results)(Unit: Million yen. Rounded down to million yen)

FY2021(Results)

FY2022(Forecast)

FY2023(Undecided)

3,580

5,083

6,567

7,343

3,968

6,300

-

(*Composition ratio)

(53%)

(63%)

(72%)

(83%)

(69%)

(92%)

-

Industrial

104
897
2,578
1,870

1,005
1,782
2,295
1,648

2,088
1,689
2,789
1,396

3,208
142
3,992
776

2,113
-1,324
3,180
1,040

2,200
750
3,350
-100

-

*Composition ratio)

(28%)

(20%)

(15%)

(9%)

(18%)

(-%)

-

Metals

1,738
17
114
1,265
(19%)
-126
6,590
-44
6,545

867
330
451
1,339
(17%)
-196
7,875
-55
7,820

581
407
406
1,163
(13%)
-147
8,980
-64
8,915

301
-35
510
735
(8%)
-94
8,761
-68
8,693

499
161
380
736
(13%)
-82
5,663
-71
5,592

-700
200
400
650
(9%)
-180
6,670
-70
6,600

-

Machinery

Rock Drill
UNIC

Material

Electronics
Chemicals
Real Estate*Composition ratio)

Other(Sub Total)
Adjustment[Total]*The formula for composition ratio is ratio to the excluded amount of Other & Adjustment from Total

19

4. Focus on Strengthening Our Company's Structure for FY2022 and FY2023
Strengthening our company's structure for FY2021 and FY2022 (Especially strengthen and rebuild its overseas marketing capabilities in Rock
Drill Machinery segment, fundamental review of the contracted smelting business in the Metals segment, realize a future concept of the Furukawa
Osaka Building in the Real Estate business.) which we have positioned as a period to focus on the early recovery of our group's performance.

- Strengthen and rebuild its overseas marketing capabilities in the Rock Drill Machinery segment
We will clarify our strategies by product and region, and drastically review and implement
them, including the reorganization and consolidation of our overseas subsidiaries.

- Ensure selection and concentration
Establishment of priority regions :Hydraulic breakers →Europe and the US
Highly evaluate the functions and performance of our original structure .

Tunnel drill jumbos →Southeast Asia
Expected infrastructure demand for tunnels and others.

Engage in intensive sales after the model selection
Review the model composition of hydraulic crawler drills,
focus on models with high superiority

Review current structure :In line with the establishment of priority regions, the current structure of 7 overseas subsidiaries will be
reviewed, reorganized, and consolidated.
20

4. Focus on Strengthening Our Company's Structure for FY2022 and FY2023
Strengthening our company's structure for FY2021 and FY2022 (Especially strengthen and rebuild its overseas marketing capabilities in Rock
Drill Machinery segment, fundamental review of the contracted smelting business in the Metals segment, realize a future concept of the Furukawa
Osaka Building in the Real Estate business.) which we have positioned as a period to focus on the early recovery of our group's performance.

- Strengthen and rebuild its overseas marketing capabilities in the Rock Drill Machinery segment- Strengthen our hydraulic crawler drill business by promoting lifecycle support approaches
By promoting the use of the ICT‐based operation support system, which is
attached to hydraulic crawler drills and catches information on operation,
we will improve the accuracy of predicting replacement demand for hydrauliccrawler drills and strengthen sales of new vehicles and components.

- Promote the development of new commercial channels for overseas
sales of drill jumbos
We will strengthen our relationships with overseas general contractors
and others to enhance our overseas project channels.
we will promote marketing management more strongly than ever, notonly overseas but also in Japan, and implement the business strategiesof the Medium‐Term Business Policy 2022.
We will also review the strategies.

21

4. Focus on Strengthening Our Company's Structure for FY2022 and FY2023
Strengthening our company's structure for FY2021 and FY2022 (Especially strengthen and rebuild its overseas marketing capabilities in Rock
Drill Machinery segment, fundamental review of the contracted smelting business in the Metals segment, realize a future concept of the Furukawa
Osaka Building in the Real Estate business.) which we have positioned as a period to focus on the early recovery of our group's performance.

■fundamental review of the contracted smelting business in the
Metals segment
We will continue to reduce the production volume of electrolytic
Copper as we recognize that the business feasibility of contracted
smelting is severe due to the sharp fluctuation of earnings.
FY2018 about 88,000ton/year->FY2021 about 74,000ton/year->FY2023 Plan to reduce at least about 70,000ton/year

Onahama Smelter

Hibi Joint Smelter

Although the Metals Segment is the Company’s original business, we will not be bound by it and will continue
to make further efforts to review it.

■Realize a future concept of the Furukawa Osaka Building in the Real Estate Business
The Furukawa Osaka Building was closed in December 2019, and demolition work is currently underway.
We will continue to study the future plans for this building.

We have positioned the 2 years from FY2021 as a period
to focus on the early recovery of the Group's businessperformance by strengthening our business structure.

22

5. Regard to Carbon neutrality
Our group aims for realizing carbon neutrality toward a decarbonized society and takes this initiative as an opportunity to practice marketing
management. We will contribute to the realization of the carbon‐free society by providing products, technologies, and services that are highly
effective in reducing carbon dioxide and other greenhouse gas emissions.

■Regard to the Group's carbon dioxide emissions
Annual emissions of about 22,000 tons by businesses
although we have machinery and materials plants, the amount of energy inputthat generates greenhouse gases is small, and the absolute amount of CO2
emissions is also small.
(This is an overwhelmingly low amount in comparison with non‐ferrous metals smelters.)absorbs about 8,000 tons of carbon dioxide per year from the forests
we own in Japan
We will continue to reduce CO2 emissions from our business activities by reducing energy consumption
through the introduction of new equipment and more efficient production processes at each of ourplants, and we hope to achieve carbon neutrality by further increasing the absorption amount of CO2
by our forests.
■we will contribute to the realize a decarbonized society by providing products, technologies,
and services that are highly effective in reducing greenhouse gas emissions.
Ex.1: Belt conveyors (Industrial Machinery segment)- From the perspective of decarbonization, we believe that the use of belt conveyors
instead of dump trucks in tunnel excavation, construction of control reservoirs, andremoval of sediment from dams will contribute to the reduction of CO2 emissions.

Ex.2: Hydraulic crawler drills (Rock Drill Machinery segment)- It can help reduce CO2 emissions from customers using them because they shorten the operating time due tothe increased drilling speed achieved by the higher output of hydraulic drifters and the advanced functions of the control system.
*We have already achieved a 35% reduction in CO2 emissions for medium‐sized machines under the current Tier 4 exhaust gas emission regulations compared to
the Tier 2 regulations ended 2006, and we are aiming for a 45% reduction under our current plan.

23

Thank you for your continuous understanding and support.

24

Forward-Looking Statements
This material contains information about the Furukawa Company Group’s future prospects. Such information, which
is based on information (predictions, anticipation, assumption, plan, recognition, evaluation, etc.) currently available
to our group that our group deems to be reasonable at the time this report was prepared. Actual businessenvironment and business activities were affected by various potential risks, uncertainty factors. Therefore,
forecasts regarding future performance or contents was suggested by it may differ significantly from the forecasts.
The potential risks or uncertainty factors will affect to future prospects is not limited to that is described in businessrisks, etc. in the securities report or summary of financial results or website of Furukawa Co., Ltd..
Therefore, It does not commitment or guarantee the achievement of management indicators and forecasts as
milestones and future performance.
In addition, regardless of the actual results, we don’t have obligation to update the contents in this material fromtime to time, and also we don’t have its policy after the time of publication.
The purpose of this material is to understand our business policy, management information etc. and is notintended to solicit investment in securities issued by Furukawa Co., Ltd.
Based on the above points, please make the final decision on investment is judged by your own risk.
Please use this material at the user’s responsibility. Even if you suffer damage due to use this material which havethe error and defects in the information, change in management indicators and forecast figures etc., we are notresponsible at all.

6. Appendix“Medium-Term Management Policy 2022”- Expedite growth and further improve profitability. -Disclosed May 25, 2020
*May 25, 2021
corrections Page 4
Addition Page 7-8This document contains forward-looking statements that reflect the Company’s judgments based on various assumptions. The Company
makes no guarantees or promises regarding the certainty, completeness, or implementation status of such statements.

1

“Medium-Term Management Policy 2022” Contents
1. Vision for 2025 ”FURUKAWA Power & Passion 150”
2. Positioning of “Medium-Term Management Policy”
3. Management Policy(1) Company wide strategy(2) Increase the value of the Furukawa brand through “marketing-based
management” that incorporates CSV perspectives(3) Contribution to the SDGs through “marketing-based management”
that incorporates CSV perspectives(4) Increase corporate value by emphasizing business practices that reflect
CSR/ESG issues recognized and to be solved by the Group(5) Basic strategies and priority issues by segment(6) Product development system(7) Strengthen and expand our human resource base(8) Actively promote investments to increase corporate value(9) Establish a robust corporate foundation21. Vision for 2025 ”FURUKAWA Power & Passion 150”
May 8, 2020 partially revised (Under lined)

Vision for 2025 “FURUKAWA Power & Passion 150”
Become a corporate group that leverages its reputation for category leadership and uniqueness to deliver growth.

<Policy for achieving the vision>
Increase the value of the Furukawa brand through “marketing-based management”(*1) that incorporates CSV(*2) perspectives.

Sustainable
expansion of themachinery business

Strengthen andexpand our humanresource base

Actively promote
investments to increase
corporate value

Establish a robust
corporate foundation(*3)

Aiming for FY2026(150 anniversary of foundation)
Targeting consolidated annual operating income regularly in excess of ¥15 billion.
(*1) Marketing-based management incorporating CSV: This means incorporating marketing into the core of management to provide products and services recognized as valuable in changing
markets, as well as to resolve issues and problems faced by customers, with the aims of increasing corporate value and achieving sustained growth. It also reflects the Group’s intention toachieve the Sustainable Development Goals (SDGs) and otherwise resolve various social issues, including such domestic issues as building national resilience and the declining working-age
population, and thus help realize a sustainable society.
(*2) Creating shared value (CSV): This is a management framework that enables companies to co-create social value and corporate value by tackling social,environmental, and other issues.

(*3) At the time of partial revision( May 8, 2020), we will work diligently to “Increase corporate value by emphasizing business practices that reflect CSR/ESG issues recognized and to be solvedby the Group.” which is one of the “Establish a robust corporate foundation”

3

2. Positioning of “Medium-Term Management Policy”
Creation "Corporate value"and "Social value"

Vision for 2025
(ideal image for 150th anniversary of foundation)

Become a corporate group that leverages its
reputation for category leadership anduniqueness to deliver growth.
(Established November 6, 2015)

Targetingconsolidated annual
operating income
regularly in excess of¥15 billion

M e d i u m - t e r mManagement Plan etc.

Phase

Phase 1

Phase 2Phase 3Time period

FY2018-2020

FY2021-2023

FY2024-2026

Positioning

Built foundations
for renewed growth

Expedite growth and further
improve profitability

Complete realization of
Vision for 2025

Designation

Medium-Term
Management Plan 2019

Medium-Term
Management Policy 2022

Medium-Term
Management Plan 2025

Approx. ¥8.5billion [¥8.6billion*]

We postponed announcement of MediumTerm Management Plan 2022 and instead
decided to formulate/ announce
consolidated performance forecasts foreach single fiscal year.

We will consider disclosing theplan when we announce ourresults for fiscal 2023.

Perfo
rman
ce
indic
ators

OperatingincomeＲＯＥ

Approx.6-7% [5.8%]

4

3. Management Policy(1) Companywide strategy“Expedite growth and further improve profitability.”
Under Medium-Term Management Policy 2022, with the aim of realizing Vision for 2025, we will work
to increase the value of the Furukawa brand by advancing marketing-based management, which has
been redefined to incorporate CSV perspectives. We will also strengthen our ability to find and solve
problems in the field and our ability to produce innovation. Targeting sustained growth, meanwhile, wewill “Strengthen and expand our human resource base,” “Actively promote investments to increase
corporate value,” and “Establish a robust corporate foundation.” Under Medium-Term Business Plan
2019, we built foundations for renewed growth. By making all-out efforts to solidify these foundations,
we will work to “Expedite growth and further improve profitability.”

Sustainably expand the Machinery business, step up alliances and M&As,
emphasizing business practices that reflect CSR/ESG issues recognized.
In particular, we will continue striving to “Sustainably expand the Machinery business”—
positioned as a core business under Medium-Term Business Plan 2019—in order to clearly
identify priority investments and growth businesses. We will also step up alliances andM&As to achieve discontinuous growth. In addition, we will work diligently to “Increase
corporate value by emphasizing business practices that reflect CSR/ESG issues recognized
and to be solved by the Group.”5(2) Increase the value of the Furukawa brand through “marketing-based management” that incorporates CSV perspectives
We will generate corporate value by providing infrastructure, products, technologies, and services that help solve social issues. At the same time,
we will continue striving to create social value building social infrastructure and realizing a safe, environmentally friendly, and prosperous society.

[Value creation process of Furukawa company group]“marketing-based management” that incorporates CSV perspectives:
Marketing-based management incorporating and redefining CSV, this means incorporating marketing into the core of management to provide products and services recognized as valuable inchanging markets, as well as to resolve issues and problems faced by customers, with the aims of increasing corporate value and achieving sustained growth. It also reflects the Group’s
intention to achieve the Sustainable Development Goals (SDGs) and otherwise resolve various social issues, including such domestic issues as building national resilience and the declining
working-age population, and thus help realize a sustainable society.

6（3）Contribution of the SDGs through “marketing-based management” that incorporates CSV perspectives
Of the 17 SDGs, we are focusing particular attention on achieving Goal 11 (“Make cities and human settlements inclusive, safe, resilient and sustainable”)
and Goal9 (“Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”). We will also strive to create social
value by building social infrastructure as stated in “The Furukawa Company Group’s Value Creation Process” (please see pages 2–3), while realizing a safe,
environmentally friendly, and prosperous society.

SDGs with High Contribution Levels (◎: Especially Important; 〇: Important)Segment

Main Products, Technologies,
and Services

Industrial
Machinery○
Pumps

Rock Drill
Machinery
UNIC
Machinery

Belt conveyors

◎

◎

◎

○

◎

◎

○

◎

◎

◎

◎

◎

◎

◎

◎

○

◎

Steel bridges and steel
structures○

Tunnel drill jumbos Hydraulic crawler Hydraulic crushers
drillsUNIC cranes

Mini crawler
cranes◎

Ocean cranes○

MetalsElectrolytic copper○

Electronics
High-purity
metallic arsenic

Coils

Sulfuric acid

Aluminumsulphate

Optical components(lenses)○

Chemicals○◎

Ferrous sulfate

7

（4）Increase corporate value by emphasizing business practices that reflect CSR/ESG issues recognized andto be solved by the GroupOne policy as part of our Vision for 2025 states our commitment to “increase corporate value by emphasizing practices that reflect CSR and ESG issues recognized andto be solved by the Group” as a core foundation of management. We also clarified the relationship between ESG, CSR priority issues and relevant major SDGs.

ESG Section

E(Environmental)

CSR/ESG Priority Issues

Major Related SDGs

Promote environmental
protection activities

Offer products and services that satisfy
customers

S（Society）

Build fair and impartial business
relationships and relationships ofreciprocal trust with business partners
Promote social contribution activities
Realize comfortable working environments for
employees and give them fair evaluationand treatment
Build a meticulous group governance system

G（Governance）

Communicate with shareholders andother investors
Strengthen compliance8（5）Basic strategies and priority issues by segment: Industrial Machinery
Basic strategy

We will continue our strategy of “Increasing our involvement in section plant construction projects and expanding our contractor business,
including large-scale projects for both the public and private sectors, in order to transition from a standalone machinery manufacturer,
strengthen our engineering capabilities, and enhance our business foundation in the domestic market,” and thus establish a solid
growth trajectory.
Priority issues- Attract new orders by providing technical proposals for section plant construction projects and other projects.
- Cultivate demand for SICON® enclosed hanging conveyors.
- Strengthen earnings foundation by capturing replacement demand for pumps and material machinery.

GEOPUS C3 cone crusher

High efficiency energy saving
slurry pump
SPL e-Performance

SICON® Enclosed Hanging Conveyor designed for the Sakaigawa–Kanamori retention basin project (Machida City, Tokyo)

Belt Conveyors designed for the Tokyo Outer Ring Road project

SICON® is a registered trademark of ContiTech Transportbandsysteme GmbH.

9

（5）Basic strategies and priority issues by segment: Rock Drill Machinery
Basic strategy

Strengthen our Life Cycle Support (LCS) capabilities, reinforce our earnings foundation for drill products(blast hole drills and drill jumbos), tap new markets, and launch new products to increase profits.
Priority issues- Strengthen and rebuild overseas marketing capabilities.
Reinforce overseas business foundation for blast hole drills.
Create overseas business foundation for drill jumbos.

- Build business models using Life Cycle Support (LCS).
Strengthen stock business by providing various services that benefit customers’ businesses (extended warranty, full maintenance,
proposals for using ICT-based operation support systems to enhance work efficiency, etc.).

- Further enhance lineup of products that contribute to safety and efficiency at tunnel excavation sites, such as fully
automatic drill jumbos and automatic rock bolters.

Customer

Operation support systems

F-MICAS

FRD-NetDistributors &Service stores
Hydraulic Crawler Drill in operation at overseas quarry site

LCS

Furukawa
Drill Jumbo in operation at overseas tunnel excavation site10

（5）Basic strategies and priority issues by segment: UNIC Machinery
Basic strategy

Secure stable income from domestic sales and expand income from overseas sales, by promoting
advanced functions and higher added value in order to strengthen our competitiveness; advancing thestock business; and reinforcing our overseas product, sales, service, and technological capabilities.
Priority issues- Reap benefits from capital investment in Sakura Works and promote further automation.
- Strengthen competitiveness by increasing functionality and higher added value of UNIC cranes, mini crawler
cranes, and UNIC carriers; develop new functions and options meet diversifying applications.
- Expand overseas sales network and enhance sales capabilities of dealers.
- Reinforce our service system.

UNIC products active overseas

Sakura Works

11

（5）Basic strategies and priority issues by segment: Materials, Real Estate
Chemicals

MetalsBasic strategy

Basic strategy
Conduct drastic review of contracted smelting and refining business.

Expand income from existing products and start commercializing and fostering newly developed
products

Priority issues

Priority issues
Identify profitability and future potential of contracted copper smelting business.

- Existing products
Sulfuric acid: Strengthen differentiation by emphasizing high-quality sulfuric acid products- Newly developed products
Metallic copper powder: Enhance product quality, establish mass production and sales
systems, and expand sales channels by providing product samples

Metallic copper powder
Purpose/ Conductive paste

Electrolytic copper

Real EstateElectronics
Basic strategy

Basic strategy

Promote growth of strategic products and launch new strategic products.

Secure stable income from Muromachi Furukawa Mitsui Building and effectively
utilize Furukawa Osaka Building and other real estate owned by the Group.

Priority issues- Aluminum nitride: Utilize high-value-added firing technology to expand
business; develop products with high levels of thermal conductivity andtoughness.
- Diffractive optical elements (DOEs): Utilize microfabrication technology toincrease applications to sensors (in addition to laser processing) in order toexpand sales channels.
- Hybrid coils: Provide product samples in order to emphasize high design
flexibility.
Aluminum nitride
Purpose/ components for semiconductor
manufacturing equipment(such as heater) andsubstrate materials

Priority issues
Decide future plans for Furukawa Osaka Building.

Muromachi Furukawa Mitsui Building(commercial name: COREDO Muromachi 2)
Nihonbashi Muromachi, Chuo-ku

12

（6）Product development system
Basic strategy

Turn development themes into products and businesses that directly contribute to Group operating companies; activate
capabilities to find and solve problems in the field in order to improve productivity, which is essential for manufacturers.
Priority issues- Commercialize products under development, such as fully automatic drill jumbos.
- Promote development of solid electrolyte materials and mass production technology for all-solid-state batteries.
- Strengthen training of engineers to lead the next generation through full-scale deployment of engineer development program.
- Reduce environmental impact during mechanical system product development: Convert power load reduction (achieved throughweight reduction and efficiency improvement) into CO2 reduction equivalent; set reduction targets for each main product; follow
up using PDCA cycle.

（7）Strengthen and expand our human resource base
Basic strategy

Build a motivating company that encourages individual employees to maximize their abilities and create new value.
Priority issues- Develop human resources.
Undertake drastic review of education system.
- Promote Health and Productivity Management.
Reduce total working hours per year, promote diverse workstyles, and improve health examination/re-examination rates.
- Promote diversity.
Promote employment of female planning staff and people with disabilities, and actively hire foreign employees.
- Improve working environments.
Review and maintain working environments that can address emergencies; strongly promote operational reforms.

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（8）Actively promote investments to increase corporate value
1

Capital investment plan*10 to support stronger manufacturing capabilities

We will make capital investments mainly in the Machinery business (positioned as our core business)
In the Rock Drill Machinery segment, we started a capital investment plan aimed at increasing the production capacity of the Takasaki Works and otherfacilities. We decided to postpone and reassess capital investment from the second stage in light of this segment’s business performance and other factors.

2

Alliances and M&A

We will consider and enter alliances and M&A with peripheral companies that fill the gaps and create continuity in our
existing Machinery business, as well as with companies engaged in the fourth pillar of our Machinery business.
Industrial
Machinery

Rock Drill

Manufacturing and sales ofpumps, material machines(crushers, etc.), environmental
preservation equipment, steel
bridges, belt conveyers andheat-resistant/wear-resistantcastings
Related contract works

Manufacturing and salesof Hydraulic breakers,
Hydraulic crushers,
Hydraulic crawler drills,
tunnel drill jumbos,
mining drill jumbos, etc.

UNIC

Manufacturing and salesof UNIC cranes, Mini
crawler cranes, Ocean
cranes, UNIC carriers,
etc.

Alliances andM&A

Machinery Business

Capital investments mainlyin the Machinery business

Consider and enter
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経営基盤の整備：（9）Establish a robustROE向上に向けた取り組みの強化・浸透
corporate foundation: Strengthen efforts to increase ROE
We will make individual investment decisions while paying attention to profitability and taking into account risks andcapital costs associated with each investment. We will also step up efforts to improve efficiency and profitability.
At the same time, we will pursue overall optimization of business resource allocations and improve corporate value by
incorporating cost of capital in our business portfolio management.

15

経営基盤の整備：（9）Establish a robustROE向上に向けた取り組みの強化・浸透
corporate foundation: Strengthen efforts to increase ROE

ROEProfitability

Efficiency

Leverage

Net income margin

Total asset turnover

Financial leverage

Profitability
improvement

Efficiency
improvement16

経営基盤の整備：（9）Establish a robust corporateROE向上に向けた取り組みの強化・浸透
foundation: Capital strategies: Pursue optimal capital structure based on rating strategy
Allocation of operating cash flows
We will “actively promote investments that that contribute to increased corporate value” while aiming to establish a robust
financial foundation. At the same time, we will endeavor to make optimal allocations of cash flows in consideration ofshareholder returns.

Dividends
Our policy is to return profits to shareholders in the form of dividends appropriated from retained earnings. Specific dividend amounts are basedon consolidated profits/losses. With the exception of special profit/loss circumstances, we endeavor in principle to pay annual cash dividends of¥50.00 per share with a consolidated payout ratio of 30% or higher. In this way, we strive for stable, continuous shareholder returns.

Treasury stock purchase and cancellation
With respect to purchase and cancellation of treasury stock, our policy is to properly consider all relevant factors, including
share price movements, capital efficiency, and cash flows.

*Rating strategy:
By fiscal 2026 (ending March 2026), the final year of Vision for 2025, we aspire toachieve a financial soundness vision that will enable us to obtain a credit rating of
BBB+ (or higher), which is one notch above the current rating issued 9 by aJapanese rating agency. To this end, we will continue striving to improve ourfinancial soundness.
(*) Debt-to-equity ratio: Interest-bearing liabilities (fiscal year-end) / Shareholders’ equity (fiscal year-end)(*) Interest-bearing debt/EBITDA ratio: Interest-bearing debt (fiscal year-end) / [Operating income + Depreciation

Financial Soundness VisionDebt-to-equity ratio*

0.6–0.7 times (range)

Interest-bearing
debt/EBITDA ratio*

4 times (range)

Issuer rating

BBB+ or higher(Japanese rating agency)（9）Establish a robust corporate foundation: Increase corporate value by emphasizing businesspractices that reflect CSR/ESG issues recognized and to be solved by the GroupWe will formulate medium-term CSR targets (fiscal 2021 to 2023) and develop a PDCA cycle of planning, execution, evaluation and improvement.

17Intentionally Blank