May 12, 2023
Company name: Furukawa Co., Ltd.
Name of representative: Minoru Nakatogawa, President and Representative Director(Securities code: 5715; TSE Prime Market)
Inquiries: Osamu Miyazaki, Senior Executive Officer, General Manager for Management
Strategy, Corporate Planning Department(Telephone: +81-3-6636-9501)

Medium Term Business Plan 2025: Complete Realization of Vision for 2025
At its meeting held today, the Board of Directors unveiled the Company’s “Medium TermBusiness Plan 2025: Complete Realization of Vision for 2025” (hereinafter, “Medium TermBusiness Plan 2025”). The plan, covering the period from April 2023 to March 2026 (FY2023–2025), represents the final phase in the Company’s quest to realize its Vision for 2025. Details
are shown below.
1. Review of Medium Term Business Policy 2022
Under Vision for 2025, our aim is to build a robust earnings foundation base that is not overly
dependent on the performance of the Metals segment and transform ourselves into a new
Furukawa Company Group. Under Medium Term Management Plan 2019 (Phase 1), we
positioned the Machinery business as our core business with the slogan, “Sustainably
expand the Machinery business.” We also made a major shift in our management direction
aimed at business restructuring to build an optimal business portfolio.
In Phase 2, we found it difficult to predict medium to long term business conditions due tohigh levels of uncertainty, with no indication about when the COVID-19 pandemic would
subside. Accordingly, we decided it would be inappropriate to announce medium to long term
performance indicators as commitments, so instead of announcing Medium Term Business
Plan 2022 (Phase 2) we formulated and announced Medium Term Business Policy 2022.
Therefore, we leveraged Phase 2 as an opportunity to strongly reinforce our corporate
structure and focus on a quick recovery of the Group’s performance working on key priorities
and we made significant progress in resolving key issues. In particular, the Rock Drill
Machinery segment strengthened and rebuilt its overseas marketing capabilities andachieved a V-shaped recovery in earnings as a result. In the Metals segment, meanwhile, we
terminated our entrusted copper smelting contract with Onahama Smelting and Refining
Co., Ltd. Furthermore, in the Real Estate business, we reached the final stage inconsiderations aimed at realizing the future vision for the former Furukawa Osaka Buildingsite.
In Phase 2, consolidated operating income trended upward and recovered to its pre-COVID19 level, amounting to ¥5.5 billion in FY2020, ¥7.7 billion in FY2021, and ¥9.0 billion in
FY2022. On the other hand, return on equity (ROE*1) reached 8.9% in FY2020, when we
posted a ¥4 billion gain on sales of investment securities. (This was higher than the 8% ROE
level recommended in the Ito Review.) However, it subsequently declined to 6.9% in FY2021
and 6.2% in FY2022 (as announced in Consolidated Financial Results for the Fiscal Year
Ended March 31, 2023).
1

2. Positioning of Medium Term Business Plan 2025
The business environment surrounding the Furukawa Company Group has entered an eraof so-called VUCA (volatility, uncertainty, complexity, and ambiguity), which in a nutshell
makes it difficult to envisage the future. Under Medium Term Business Plan 2025, however,
we will build on the foundation we established in Phase 2, when we reinforced our businessstructure and enhanced profitability. Accordingly, we have positioned the period of the plan
as a period for “Complete Realization of Vision for 2025.” During the period, we will continue
solidifying our foundation for the future beyond Vision for 2025.

3. Medium Term Business Plan 2025: Business Policy and Plan

(1) Expand and strengthen initiatives to realize management that is conscious of cost ofcapital and stock priceSince FY2017, the Furukawa Company Group has calculated the cost of capital on aconsolidated basis and for each business segment. We also set return on invested capital(ROIC) as a hurdle rate for ensuring our “corporate value creation power*2” and have beenworking to realize cost-conscious management by reviewing our business portfolio, capital
investments, alliances involving equity participation, and M&A investment decisions.
However, we have not been able to achieve a corporate value creation power that meets
market expectations. Accordingly, the price-to-book ratio (PBR), also known as the “value
creation barometer,” has been below 1x for six consecutive years since FY2017, and swiftly
getting PBR higher than 1x is a key management priority.
Under Medium Term Business Plan 2025, therefore, we will expand and strengthen
specific initiatives to enhance our corporate value creation power with the aim of achieving“sustainable growth and medium to long term enhancement of corporate value*3.” We will
also strive to achieve a PBR of more than 1x as soon as possible by further improving
information disclosure and engaging in active dialogue with investors so we can obtain an2

appropriate market evaluation.
The following is a summary of specific initiatives that we will expand and strengthen toenhance our corporate value creation power.
Achieving
Increase profit through growth strategy
ROE of◆ Achieve consolidated operating profit of approx. ¥13 billion in FY2025
approx. 8%• Sustainably expand the Machinery business, positioned as a corebusiness, to a new level• Review and strengthen our business portfolio and visualize ourbusiness (product) portfolio strategies within each business segment*4 toimprove profitability and identify low-profit businesses (products)
Improve capital efficiency◆ Reduce strategic shareholdings*5
Streamline and optimize equity capital◆ Shareholder return• Consider increasing dividends and paying interim dividends,
aiming for annual dividends of at least ¥50 per share in principle and aconsolidated total return on equity*6 of 3% or higher• Aim for share buybacks of approximately ¥1 billion each fiscal year
Diminishing Appropriately disclose effective information related to reduce noncost offinancial risks and emphasize active dialogue with investors
capital*7◆ Pursue initiatives for sustainability◆ Invest in non-financial capital (R&D, intellectual property, humancapital, DX)
Reduce financial risks
Pursue optimal capital structure with rating strategy at the core*8• Achieve financial soundness worthy of rating upgrade to A- or
higher- Debt-to-equity ratio*9: 0.5x range- Interest-bearing debt/EBITDA ratio*11: 3x range(2) Growth strategy (concentrate management resources on Machinery business to increase
returns)
Basic policies◆ The Group’s basic policy is to practice “marketing-based management*10” thatincorporates CSV perspectives. Accordingly, our business plan focuses on strategies that
help us create “social value” by improving social infrastructure and realizing a safe,
environmentally friendly, and prosperous society.
◆ In the Machinery business, positioned as the core business, we will develop
infrastructure that helps address social issues in such areas as preventing and mitigating
disasters, which are increasing due to climate change. We will also provide products,
technologies, services, and other solutions to ensure safe and secure workplaces forworkers and help resolve labor shortages.

3

Business plan for the Machinery business (center of our growth strategy)◆ In the Industrial Machinery segment, we will target increased sales of material
machinery, including pumps and crushers, as well as belt conveyors and other equipment
for large-scale domestic infrastructure projects, such as bridges.
◆ In the Rock Drill Machinery segment, we will build an “FRD model” to achievecustomer success*11 throughout the product life cycle. In the UNIC Machinery segment,
we will expand earnings through overseas sales while securing stable earnings in Japan.
◆ We will devote 70% of cumulative capital investment to the Machinery business, withthe aim of that business accounting for 50% or more of consolidated net sales and 80% ormore of consolidated operating profit in FY2025. To achieve discontinuous future growth,
we will step up efforts related to alliances and M&As.

(3) Earnings plan
Basic policy◆ Step up efforts to improve ROE
We will make individual investment decisions with attention to profitability, taking into
account risks associated with the investment and cost of capital, while stepping up efforts
to improve efficiency and profitability. In addition, by deploying a business portfolio
management system that utilizes cost of capital, we will optimize overall allocation ofmanagement resources to achieve sustainable growth and increase corporate value overthe medium to long terms.
PERFORMANCE INDICATORs for FY2025*12
Consolidated operating profit
Approx. ¥13 billion
Return on equity (ROE)
Approx. 8%(4) Capital policy
Policies on financial strategy◆ We will continue seeking to establish a robust financial base enabling us to raise thenecessary funds regardless of financial conditions.
◆ Pursue optimal capital structure with rating strategy at its core
In FY2025, the final year of Vision for 2025, we envisage a level of financial soundness
that will prompt Japanese rating agencies to raise their ratings to A- or higher, from thecurrent BBB+. To this end, we will continue striving to improve our financial soundness.
Image of financial soundness in FY2025
Debt-to-equity ratio
0.5x range
Interest-bearing debt/EBITDA ratio
3x range
Shareholder return policies• Policy on dividends
We will consider increasing annual dividends and paying interim dividends, prioritizing
investments to achieve sustainable growth and enhance corporate value over the medium
to long terms. In principle, we aim to pay annual dividends of ¥50.00 per share or higher
with a consolidated total return on equity of 3% or higher.
• Policy on share buybacks/cancellations
We will consider share buybacks and cancellations from time to time, taking into accounttrends in stock prices, capital efficiency, cash flows, and other factors. We will aim forshare buybacks of approximately ¥1 billion each fiscal year.
4Policies on reducing strategic shareholdings• With regard to strategic shareholdings, each year we carefully examine the purpose of
our holdings and whether the benefits and risks associated with each holding arecommensurate with the cost of capital. At the same time, the Board of Directors examines
the appropriateness of continuing to hold shares after a comprehensive review that
includes both qualitative and quantitative aspects.
• We will strive to reduce holdings of shares deemed to be no longer necessary by sellingthem as appropriate.
• We will continue disclosing the ratio of strategic shareholdings to consolidated net
assets as an indicator of our progress in reducing such shareholdings.

(5) Sustainability initiatives
Under the basic policy shown below, we have established a set of medium term
sustainability goals (FY2023–2025) and will develop a plan–do–check–act (PDCA) cycle toachieve those goals.
Basic policy◆ The Furukawa Company Group has positioned efforts toward sustainability as one ofits most important management issues. In addition to contributing to help realize asustainable society, the Group is committed to achieving sustainable growth andenhancing medium to long term corporate value by establishing a robust corporate
foundation for growth and resolving social issues through its business.
Efforts to realize our basic policy• Proactive sustainability: Resolve social issues through businessIn addition to enhancing the value of the Furukawa brand through “marketing-based
management” that incorporates CSV perspectives, the Group will create corporate value
and contribute to the creation of social value by developing infrastructure and providing
products, technologies, and services that help to resolve social issues.
• Defensive sustainability: Establish a robust corporate foundation for growth
In order to establish a robust corporate foundation for growth, the Group will strengthen
and expand its enterprise risk management system and enhance corporate value byemphasizing business practices that reflect CSR/ESG issues recognized and to be solvedby the Group.

5

Initiatives to address “Materiality (Key Issues) *13

6

Addressing decarbonization• We will revise our current CO2 reduction plan to include CO2 reduction measures at
each production site.
• We will implement a carbon-neutral declaration that includes the use of electricity
derived from renewable energy sources. To achieve the declaration’s goals, we will work
to complete a roadmap by FY2025.
Climate-related disclosure• To make disclosures in line with the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD), we will first initiate scenario analyses in the
Metals segment and Rock Drill Machinery segment, which have the largest sales, andexpress our support for the TCFD’s recommendations.
• Then, we will enhance disclosure of climate-related information in other segments as
well.
Inclusion in SRI/ESG indexes and improving our external ESG-related evaluations*14• We regard inclusion in SRI/ESG indexes and external evaluations as important ways
to monitor the progress of the Group’s ESG-related initiatives. With this in mind, we will
make ongoing improvements by stepping up ESG-related initiatives through ourbusiness and other means while appropriately disclosing information and pursuing active
dialogue with investors.
We will also enhance our disclosure content to earn inclusion in the FTSE Blossom
Japan Index, which has stricter selection criteria than the FTSE Blossom Japan Sector
Relative Index.

(6) Review of business portfolio
Basic policies◆ We will calculate cost of capital for each of our seven business segments and plot threefactors—X axis: corporate value creation power; Y axis: compound annual growth rate
(CAGR) of sales; and bubble size: corporate value created/year*15-on a bubble chart toaccurately visualize our business portfolio. We will then conduct a four-quadrant analysis
based on growth potential and corporate value creation power and make rational businessdecisions that are not overly influenced by history or preconceptions.
◆ Furthermore, we will visualize the business (product) portfolio strategy within eachbusiness segment and work to improve profitability and identify low-profit businesses(products).

7

Status of review• In the Metals segment, we conducted a fundamental review of our entrusted copper
smelting business and subsequently terminated our entrusted smelting contract with
Onahama Smelting and Refining Co., Ltd., on March 31, 2023. At the same time,
Furukawa Metals & Resources Co., Ltd., transferred all its shares in Onahama Smelting
and Refining to Mitsubishi Materials Corporation.
• In the Rock Drill Machinery segment, we are making smooth progress in liquidating
our subsidiaries in Panama and China in order to strengthen and rebuild our overseas
marketing capabilities.
• In the Real Estate business, we will work to determine a future vision for the site of theformer Furukawa Osaka Building with the aim of solidifying our earnings foundation for
the future.
• On October 3, 2022, we transferred our casting business from Furukawa Castec Co.,
Ltd., to Furukawa C&F Co., Ltd., through an incorporation-type demerger. Our aim here
was to improve the profitability of the casting business and enhance casting technology,
quality, productivity, and morale. Furthermore, supervision of the casting business wasshifted from Furukawa Industrial Machinery Systems Co., Ltd., to Furukawa Co., Ltd.

8

(7) Allocation of management resources
Basic policies◆ We will provide stable and continuous returns to shareholders, prioritizing thefollowing investments to achieve sustainable growth and enhance corporate value overthe medium and long terms.
• Make capital investments to support enhanced manufacturing• Invest in R&D to help resolve social issues• Invest in intellectual property to ensure competitive advantage• Invest in human capital to create a rewarding company• Invest in DX to accelerate growth strategies and business transformation• Invest in alliances and M&As to achieve discontinuous future growth• Invest in sustainability initiatives, such as decarbonization, environmental impact
reduction, and respect for human rights in the value chain◆ The funds for these investments—targeting sustainable growth and improved
corporate value over the medium and long terms—will come from retained earnings andcontinuous cash flows. Regarding funds for investments in alliances and M&As targeting
discontinuous growth, we will use the most appropriate means of financing, including
asset sales (such as sales of strategic shareholdings) and other options as necessary.
1) Allocation of operating cash flows
Basic policy◆ While aiming to establish a robust financial base, we will make capital investments toachieve sustainable growth and enhance corporate value over the medium to long terms.
We will also endeavor to allocate operating cash flows in consideration of shareholder
returns.
Consolidated operating cash flows (3-year cumulative total)
Capital investments
Growth investments
Maintenance and renewal
Allocation image
Dividends
Share buybacks
Reduction of interest-bearing debt

¥40 billion¥20 billion¥10 billion¥10 billion¥7 billion¥3 billion¥10 billion

2) Capital investments
Basic policy◆ Capital investment plan to support enhanced manufacturing
Our capital investments will center on the Machinery business, which is positioned as
our core business.
Capital investments (3-year cumulative total)
Machinery business
Allocation image
Materials business
Other

9

¥20 billion¥14 billion¥5 billion¥1 billion

3) R&D investments
Basic policy◆ We will promote the commercialization and industrialization of development projects
that help resolve social issues. At the same time, we will revitalize our on-site capabilities
to improve productivity, which is indispensable as a manufacturer.
Key priorities• Develop automation technology aimed at labor savings• Develop materials and mass production technology for solid electrolytes used in allsolid-state batteries• Develop machinery-related products and technologies that deliver higher efficiency andlighter weight and otherwise help reduce environmental impact• Effectively utilize DX• Fully deploy our Engineer HR Development Program to step up development ofengineers who will lead the next generation
4) Investment in intellectual property
Basic policies◆ We regard intellectual property (IP) activities as an important part of our management
strategy and will develop systems that utilize IP information to secure a competitive
advantage.
◆ We will properly assess the value of our entire business, including IP, based on thetechnology rights of each operating company in the Group.
Key priorities• Revitalize IP activities (discovery, acquisition, maintenance, and utilization of rights) toenable us to visibly evaluate our technological capabilities, which are the source ofcompetitiveness as a manufacturer• Assess the value of the industrial property rights we hold in order to utilize themeffectively• Collect and analyze patent information and formulate corporate strategies accordingly• Effectively operate within the IP landscape*16105) Investment in human capital
Basic strategy for investment in human capital◆ Create a rewarding company where all employees can maximize their abilities andcreate new value
Human resource development policy• For the Group to resolve social issues through its business activities and achievesustainable growth and increase corporate value, it is essential to develop humanresources with a variety of personalities. To this end, we are committed to developing adiverse workforce capable of acting autonomously and willing to embrace the challengeof creating new value.
Indicators/targets related to HR development policy(Ratios calculated for Company-registered employees, except where noted)🔶

Indicator/target Latest result

Hire diverse human resources
Ratio of women among new graduates hired for general
positions (Company-registered employees hired inJapan)
Female manager ratio (consolidated)
Ratio of new hires in management/general positions whoare experienced20%

13.00% Join in FY2023

3%

3.33% March 31, 2023

40%

43.75% Joined in FY2022

Ratio of employees with disabilities (among consolidated
Adoption ofsubsidiaries subject to employment ratio system forstatutory
persons with disabilities)
employment rate🔶

Applicable period

2.49% FY2022

Develop human resources who are willing to take on challenges and act autonomously

Training hours per year
Number of trainees per year

1,500 hours
843.6 hours FY2022
3,600 persons 2,506 persons FY2022

11

In-house environmental improvement policy• The Group is committed to creating comfortable workplaces where diverse humanresources can perform their duties safely and efficiently while maintaining a rewarding
and healthy work environment.
Indicators/targets related to internal environment(Ratios calculated for Company-registered employees)
Ratio of male employees taking childcare leave
Ratio of employees returning to work after childcare
leave
Ratio of employees receiving health checkups
Anomaly observation rate
Recognition as Health and Productivity Management
Organization

12

Indicator/target Latest result

Applicable period80%

72.20% FY2022

100%

87.50% FY2022

100%
Age 40 and over:Less than50%
Under age 40:
Less than 30%
Obtain “White
500” certification

99.96% FY2022
61.20% FY2021
45.40% FY2021
×Year 2023

6) Investment in DX
Basic policy◆ We will promote DX to support accelerating the Group’s growth strategy andoperational reforms that reflects market needs and supports reliable and attractive
manufacturing and value creation.
Key priorities• Establish a Groupwide DX promotion system spearheaded by the DX Promotion
Committee (Established in April 2023)• Promote DX based on the three pillars of manufacturing (Monozukuri), servitization(Kotozukuri), and operational reforms

137) Investment in alliances and M&As
Basic policy◆ We will consider and enter alliances and M&As with peripheral companies that fill thegaps in our business and create continuity in our existing Machinery business(complementing Industrial Machinery segments ,the Rock Drill Machinery segment and
UNIC Machinery segment), as well as with companies that will form the fourth pillar of
our Machinery business.
Key priorities• Continue pursuing sustainable expansion in our core Machinery business and step up
efforts targeting alliances and M&As to realize discontinuous future growth• Continue seeking synergies from recent M&A (acquisition of shares in Yamaishi Metal
Co., Ltd., making it a subsidiary) and promoting sales through alliance (aimed at
generating demand for SICON® enclosed hanging belt conveyors for urban and other civilengineering projects)(8) Basic strategies and key priorities issues by segment
1) Machinery business[Industrial Machinery]
Basic strategy◆ Further strengthen our engineering capabilities*17 and promote cross-departmental
initiatives and DX to move away from being a standalone equipment manufacturer; build
a business foundation in the domestic market by pursuing the United Nations
Sustainable Development Goals (SDGs) and working on infrastructure development
projects that help resolve social issues (such as disaster prevention/mitigation)
Key priorities• Strengthen product competitiveness and promote proposal-based sales to win orders for
section plant*18 construction projects (pumps, material machinery)• Establish earnings base through stock businesses*19 (pumps, material machinery),including by utilizing customer information management to enhance services• Generate demand and promote sales of SICON® enclosed hanging belt conveyors[Rock Drill Machinery]
Basic strategy◆ Build a FRD model enabling customers to achieve success throughout the productlifecycle
Key priorities• Establish FRD model in Japan
Strengthen Life Cycle Support*20 business- Strengthen sales of parts and consumables- Commercialize support program for blast hole drills*21- Establish trade-in resale business (tunnel drill jumbos, crawler drills)• Emphasize centralized sales and production- Overseas: Cultivate North American market for large blast hole drills and step up
development of attachment drills*22 as frontline machines for developing the Southeast
Asian quarry market (hydraulic machinery)- Japan: Strengthen sales in the quarry market and deepen our presence in the14

demolition equipment market through concentrated sales of small hydraulic crushers
and concentrated rollout of demolition equipment in the Tokyo Metropolitan Area
- Production: Reduce costs through centralized production, enhance quality (tominimize complaints), and shorten lead times[UNIC Machinery]
Basic strategy◆ Enhance competitiveness by increasing product functionality and added value andimproving service systems for domestic business while strengthening product, sales, andservice technology capabilities for overseas business, with the aims of securing stableearnings from domestic sales and expanding earnings from overseas sales
Key priorities• Japan: Strengthen competitiveness by increasing the functionality and added value of
UNIC cranes and UNIC carriers and expand sales of mini-crawler cranes and ocean
cranes (cranes for ships), which do not depend on trucks• Overseas: Develop mounted cranes (large models) and new mini-crawler cranes,
expand sales network, and strengthen sales capabilities of dealers• Reinforce product development system and promote R&D to address the electrificationof trucks• Promote further automation, quality improvement, and cost reductions at the Sakura
Works• Strengthen our service system
2) Materials business[Metals]
Basic strategy◆ Make efforts to optimize the entrusted smelting business
Key priority• Pursue profitability and stabilization of the entrusted smelting business[Electronics]
Basic strategy◆ Expand business in strategic products to increase earnings
Key priorities• Aluminum nitride ceramics*23: Increase production capacity to reinforce sales• Optical products: Develop and commercialize special optical material products; increase
sales of diffractive optical elements (DOEs) for laser processing• High-purity metallic arsenic: Establish stable supply system that reflects market needs
as a category leader• Coils: Develop products and expand sales in growth areas to bolster earnings

15

[Chemicals]
Basic strategy◆ Increase earnings from existing products and nurture and expand newly developed
products
Key priorities• Existing products- Sulfuric acid: Strengthen differentiation by emphasizing high-quality sulfuric acid
- Cupric oxide: Capacity enhancement to increase sales• Newly developed products- Metallic copper powder: Expand sales channels by developing new applications
3) Real estate business
Basic strategy◆ Stabilize earnings from Muromachi Furukawa Mitsui Building (commercial name:
COREDO Muromachi 2) and effectively utilize other real estate holdings, including siteof former Furukawa Osaka Building
Key priority• Determine and promote future vision for former Furukawa Osaka Building site

16

<Reference>
Segment performance[Net sales]
FY2022 results※

Machinery BusinessIndustrial MachineryRock Drill Machinery
UNIC Machinery
Materials Business
MetalsElectronics
Chemicals
Real Estate
Other
Total

81,658
17,94335,752
27,961
126,804
111,424
6,926
8,454
2,056
3,671

100,500
24,00039,00037,50082,00063,500
9,000
9,500
2,000
4,500

18,842
6,057
3,248
9,539
△44,804△47,924
2,074
1,046
△56
829

214,190

189,000△25,190[Operating profit]
FY2022 results※

Machinery BusinessIndustrial MachineryRock Drill Machinery
UNIC Machinery
Materials Business
MetalsElectronics
Chemicals
Real Estate
Other, Adjustment
Total(¥ millions, rounded down)
FY2025 scenario
Difference(¥ millions, rounded down)
FY2025 scenario
Difference

6,093
1,515
3,030
1,547
2,309
1,276
500
532
835
△206

10,700
3,000
3,700
4,000
1,900
500
700
700
600
△200

4,607
1,485
670
2,453
△409
△776
200
168
△235
6

9,031

13,0003,969[Underlying assumption]
FY2022 results※
Exchange rate (¥/USD)

FY2025 assumptions
135.5

135

* Figures in brackets represent actual results for FY2022 (as disclosed in “Consolidated Financial Results for the
Fiscal Year Ended March 31, 2023 ”).

17

<Note>General note: In this document, we describe “FY202x” as the year starting April 1, 202x, andending March 31 in the following year.
*1. The Furukawa Company Group utilizes “ROE Tree for Corporate Value Creation” (see below)
to improve ROE.

*2. “Corporate value creation power” is a term coined by the Company meaning ROIC - WACC.
*3. The process for achieving sustainable growth and increasing corporate value over the
medium to long terms is shown below.
[The value creation process of the Furukawa Company Group]18*4. Visualization of business (product) portfolio strategies within each segment
To examine business (product) portfolio strategies within each business segment, we use a fourquadrant analysis with bubble charts for visualization. Profitability is based on the “net marginal
profit ratio” before allocation of fixed costs by business (product).

*5. Strategic shareholdings = Total amount of investment shares (in the Consolidated Balance
Sheets) held for purposes other than pure investment (includes unlisted shares, but excludes
shares in nonconsolidated subsidiaries and affiliates) + Shares deemed to be held for such
purposes*6. Consolidated total return on equity (%) = [(Total dividends paid + Total share buybacks) /Total average Consolidated shareholders’ equity] x 100*7. Diminishing cost of capital: It is generally considered that “the cost of capital, one of thecomponents of WACC, will diminish through stabilization of the β value and adjustment of
individual market risk premiums as the risks faced by companies decrease and expectations forthe future increase.”*8. Pursue optimal capital structure with rating strategy at the core: This initiative is designed
to enable us to utilize interest-bearing debt to the extent that it does not carry excessive financial
risk. By improving our ability to explain how we use the Consolidated Balance Sheets to investors
and gaining market confidence accordingly, we can expect the cost of capital to decrease.
*9. Interest-bearing debt used in this calculation does not include lease obligations.

19*10. “Marketing-based management” that incorporates CSV perspectives: Creating shared value(CSV) is a management framework that enables companies to co-create social value andcorporate value by tackling social, environmental, and other issues.
The Group will help achieve the United Nations Sustainable Development Goals (SDGs) bypracticing “marketing-based management” that incorporates CSV perspectives and creating“social value” by improving social infrastructure and realizing a safe, environmentally friendly,
and prosperous society.

*11. Customer success: As the term implies, this is the concept of helping customers succeed
through products and services. Under this concept, a company proactively thinks about the
future of its customers and provides relevant advice and support, including identifying customer
issues and proposing plans that can be fulfilled by using the company’s products and services.
*12. PERFORMANCE INDICATORs for FY2025: Among PERFORMANCE INDICATORs for
FY2025, those for consolidated operating profit and ROE do not account for alliances and M&As.
The assumed exchange rate for the PERFORMANCE INDICATORs is ¥135/US$1.
*13. Materiality (Key Issues): In addition to identifying new Materiality (Key Issues) related tosustainability initiatives, we have outlined our philosophy system and the roadmap for its
realization (see below) and positioned Materiality (Key Issues) related to sustainability
initiatives as an important part of our management strategy.

20

*14. Inclusion in SRI/ESG indexes and our external ESG-related evaluations
SRI/ESG indexes that include the Company’s stock
FTSE Blossom Japan Sector Relative Index (Furukawa Co., Ltd., selected for inclusion on
March 31, 2022)
The FTSE Blossom Japan Sector Relative Index, created by global index provider FTSE
Russell, reflects the performances of Japanese companies that have shown relatively highlevels of ESG responses in their respective sectors. It is designed to be sector-neutral.
The FTSE Blossom Japan Sector Relative Index is widely used to create and evaluatesustainable investment funds and other financial products.
External evaluation
Health and Productivity Management
Organization
Under the Certified Health & Productivity
Management Outstanding Organizations
Recognition Program, operated by the
Ministry of Economy, Trade and Industry(METI), Furukawa Co., Ltd., was certified
as a Health & Productivity Management
Outstanding
Organization(largeenterprise category) in 2019, 2020, 2021,
and 2023.
In 2017 and 2022, the Company was
given a White 500 crown (given to the top
500 corporations in the large enterprise
category), but unfortunately was notselected in 2023.

21

Future response
We aim to reacquire ourWhite 500 crown (given to
the top 500 corporations in
the
large
enterprise
category).

External evaluation
Health & Productivity Stock Selection
The Company was selected for the 2022
Health & Productivity Stock Selection as apublicly listed company that strategicallyhandles employee health management
fromamanagement
perspective.
Unfortunately, we were not selected in
2023.
Kurumin
Based on the Act on Advancement of
Measures to Support Raising NextGeneration Children, Furukawa Co., Ltd.,
has received “Kurumin” certification as acompany that supports child-rearing on
two occasions (FY2017 and FY2022).
Nikkei “SDGs Management” Survey
In the 4th Nikkei “SDGs Management”
survey (November 2022), which rates
companies’ efforts to achieve the United
Nations Sustainable Development Goals(SDGs), we received 3.0 stars for the fourthconsecutive year.
Nikkei “Smart Work Management”
SurveyWe received 2.0 stars in the 6th Nikkei“Smart Work Management” survey(November 2022), which selects leading
companies that strive to revolutionize
productivity through work-style reform.
CDP Climate Change 2022
Score: D (information disclosure level)

Future response
We will strive to bereincluded in the Health &Productivity
Stock
Selection.

We will aim for our third“Kurumin” certification as
a company that supports
child-rearing.

We will aim to continuously
receive 3.0 stars or higher
in the Nikkei “SDGs
Management” survey.

We will aim to achieve 3.0
stars or higher, which willallow us to use the starcertification logo.

We will aim to increase ourscore by stepping up efforts
to reduce greenhouse gas
emissions and mitigate
climate change risks.

*15. Corporate value created/year = Corporate value creation power x Invested capital“Corporate value created/year” is a term coined by the Company. It refers to the total corporate
value created in a year from invested capital.
*16. IP landscape: When determining their management and business strategies, companies
conduct analyses that incorporate IP information into their management and businessinformation. The results (overview of the current situation, future prospects, etc.) are shared with
top executive and business managers, who obtain feedback and hold discussions andconsultations for planning and consideration.
*17. Engineering capabilities: The ability, as part of the sales process, to use experience,technology, and knowledge as tools in order to make optimal proposals to customers based on
consideration of a comprehensive balance of all factors, including functions, costs, operating
environment, and safety.
22

*18. Section plant: Part (section) of an entire facility (plant) devoted to a specific function (suchas conveying or processing).
*19. Stock business: Refers to after-market business (sales of spare parts, maintenance services,used product trade-ins and sales, etc.) and rental business, as opposed to flow business (productsales), which is more susceptible to economic fluctuations. We are working to continuously
expand and strengthen our stock business, which generates relatively stable earnings.
*20. Life Cycle Support: Providing and supporting optimal management services to reduce thecost of machinery ownership and operating costs as much as possible throughout its entire life
cycle (machine selection and delivery, operation and maintenance, major repairs andreconditioning, and disposal and replacement).
*21. Blast hole drill: A machine that drills holes for blasting and is used for relatively large-scale
blasting in mines, quarries, civil engineering works, and the like. We refer to crawler drills, downthe-hole drills, and rotary drills used on the ground surface as “blast hole drills.”*22. Attachment drill: Drill attached to the tip of a hydraulic excavator arm and operated using
the excavator’s hydraulic pressure. The combination of a hydraulic excavator (with wide drilling
range thanks to long reach and swivel function) and our HD709 attachment drill (highperformance hydraulic drifter with damper) promises a significant improvement in productivity
compared with pneumatic drills. By marketing this attachment drill at a relatively low price, weplan to create future customers for hydraulic crawler drills in the Southeast Asian quarry market.
*23. Aluminum nitride ceramics: This is an abbreviation of aluminum nitride (AlN) ceramics,
the commercial name of a product handled by Furukawa Denshi Co., Ltd.

Inquiries
Public & Investor Relations Section, Corporate Planning Department, Furukawa Co., Ltd.
Telephone: +81-3-6636-9501

23

[Cautionary Notes regarding Forward-Looking Statements]
This document contains forward-looking statements including forecasts, expectations,assumptions, plans, acknowledgements and evaluations regarding the Company and the Group.
These statements are based on the information the Company has obtained as of the publication
date and on assumptions the Company believes are reasonable. The forward-looking statementsin this document and their implications may differ materially from actual results because theassumptions of the Company and the conclusions that it has reached are subjective in natureand the business environment and business activities are subject to latent risks anduncertainties. Latent risks and uncertainties that may affect the Company’s forward-looking
statements are explained in, but not limited to, the Company’s Annual Securities Reports andthe “Business Risks” section of the Company’s corporate website.
Therefore, the Company does not promise or warrant the attainment of performance indicators,
forecasts, or future operating results described herein. Furthermore, the Company does notundertake any obligation to update any statements in this document after its publication,
irrespective of new information, future events or otherwise.
You are cautioned to use this document at your own discretion. The Company is not obliged to
warrant the reliance, accuracy, integrity, completeness, or timeliness of the information herein,or to bear responsibility for any damages arising as a result of using this document.
This document has been prepared solely for information purposes, for better understanding of
the Company’s business policies and management operations. This document is not a solicitationof investment in securities. Accordingly, you are cautioned not to place undue reliance on thisdocument when you make an investment decision. The Company does not bear any
responsibility for your decision regarding your investments.

24