Earnings Results
Presentation
for the Fiscal Year Ending March 31, 2024
(110th term)

May 15, 2024
Futaba Industrial Co., Ltd.
（＃7241）

Contents

2

1. Overview of the Fiscal Year Ended March 31, 2024

2. Full-Year Earnings Forecasts for the Fiscal Year Ending March 31, 2025

3. Reference

4. Progress on Medium-Term Management Plan, etc.

© FUTABA INDUSTRIAL CO.,LTD.

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Earning Results Summary

3(Million yen)Sales[including parts
supplied by customers][excluding parts
supplied by customers]

Operating profit

Ordinary profit
Profit attributable toowners of parent

FY3/2024
Results

FY3/2023
Results*

795,802708,072+87,730+12.4%*

449,664

397,225+52,438+13.2%+11,531+150.1%+10,721+138.0%+2,254+21.3%***

19,21318,48912,831(2.4%)(4.3%)(2.3%)(4.1%)(1.6%)(2.9%)

ChangeChange (%)(1.1%)

7,681(1.9%)(1.1%)

7,768(2.0%)

10,576(1.5%)(2.7%)

The figure in parentheses ( ) indicates the ratio to sales. Top: Including parts supplied by customers Bottom: Excluding parts supplied by customers

Exchange rate
(1 USD)144.6 yen

135.5 yen

The Japanese currency fell by
9.2 yen against the U.S. dollar.

*: Record high© FUTABA INDUSTRIAL CO.,LTD.

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Earning Results Summary Breakdown of Sales: Impacts of parts supplied by4customers/materials price/exchange rate fluctuations◆ Sales
FY3/2023
Results
708.0

Sales (excluding parts supplied by customers) Billion yen
Amount of parts supplied by customers

+87.7

346.2

310.8

397.2

FY3/2024
Results
795.8

+52.4

449.6
Excludingexternal factors

+25.8

397.2

Sales
in real terms

423.0• Sales including parts supplied by customers increased
87.7 billion yen.
• Sales excluding parts supplied by customers increased%>
52.4 billion<+22.6
yen.<+3.0%>• Sales in real terms, excluding the effects of changes inmaterials price and fluctuations in exchange rate,increased 25.8 billion yen (6.5%)• Meaning of the term "parts supplied by customers"
Catalysts and other parts supplied for value by customers
Sales prices of products, including parts supplied by customers,
include values of parts supplied by customers and have no impact on
profits• Meaning of the term "changes in materials price"
It means that, due to changes in market conditions, unit purchaseprices of materials and materials costs, which are components of sales
prices, fluctuate by the same amount.
There is no impact on profits because sales and costs fluctuate by thesame amountExternal factors 26.6
Change in materials price

12.8

Exchange rate fluctuations

13.8• Meaning of the effects of fluctuations in exchange rate
It means that, when converting the financial figures of overseas
subsidiaries into yen equivalent, differences arise in exchange rate,
sales, etc. between the previous fiscal year and the fiscal year underreview.

© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedAnalysis of Change in Operating Profit

5
Billion yen
Factors for profit increase
Factors for profit decrease

Change in operating profit: Up 11.5 billion yen (from 7.6 billion yen to 19.2 billion yen)

Increase in profit
due to higher
sales in the
Automotive Parts
Business+8.7

Kaizen+6.9

Changes in
product mix, etc.
+2.3

Impact of
inflation-2.4

Sales pricerevision-1.9

Increase indepreciation-1.0

Decrease inprofit outside
the Automotive
Parts Business-1.1

FY3/2023
Results

FY3/2024
Results

19.2

7.6
Change
Japan

3.0

+6.5

+2.8

+0.8

-1.1

-0.3

-0.7

-1.3

9.8

+6.7

North
America

-0.7

+3.4

+2.3

+0.1

-0.6

-0.7

0.0

-0.3

3.5

+4.2

Europe

1.0

+1.1

+0.3

+0.4

-0.2

-0.3

-0.2

0.0

2.1

+1.1

China

2.6

-2.3

+1.4

+0.9

-0.4

-0.6

-0.1

+0.7

2.2

-0.4

Asia

1.5

0.0

+0.1

+0.1

-0.1

0.0

0.0

-0.2

1.4

-0.1

19.2

+11.5

7.6
© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Contents

6

1. Overview of the Fiscal Year Ended March 31, 2024

2. Full-Year Earnings Forecasts for the Fiscal Year Ending March 31, 2025

3. Reference

4. Progress on Medium-Term Management Plan, etc.

© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedFull-year Earnings Forecast

7
Billion yen

FY3/2025
Forecasts

FY3/2024
Results[including parts
supplied by customers]

740.0

795.8

-55.8

-7.0%

[excluding parts
supplied by customers]

435.0

449.6

-14.6

-3.3%

-3.2

-16.7%-3.4-18.9％

-0.8

-6.5%

Sales

Operating profit

Ordinary profit
Profit attributable toowners of parent

16.0
15.0
12.0

(2.2%)(3.7%)(2.0%)(3.4%)(1.6%)(2.8%)

19.2
18.4
12.8

ChangeChange (%)(2.4%)(4.3%)(2.3%)(4.1%)(1.6%)(2.9%)

The figure in parentheses ( ) indicates the ratio to sales. Top: Including parts supplied by customers Bottom: Excluding parts supplied by customers

Exchange rate
(1 USD)

140.0 yen

144.6 yen

© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedAnalysis of Change in Operating Profit

8

Change in operating profit: Down 3.2 billion yen (from 19.2 billion yen to 16.0 billion yen)
Billion yen

Decrease in profit
due to lower sales in
Decrease in the Automotive
depreciation Parts Business
-5.0
+5.4
Impact of
inflation-2.7

Kaizen+7.7

Factors for profit increase
Factors for profit decrease

Sales pricerevision-2.7

FY3/2024
Results

Changes in
product mix,
etc.
-1.2

Decrease inprofit outside
theAutomotive
Parts
Business
-4.7

19.2

FY3/2025
Forecasts

16.0
Change

Japan

9.8

+1.7

+3.3

-0.7

-1.2

-1.0

-0.4

-2.7

8.8

-1.0

North
America

3.5

+2.8

+1.1

-0.5

-0.5

-0.5

-1.5

-0.3

4.1

+ 0.6

Europe

2.1

+0.6

+0.3

-1.8

-0.5

-0.2

-0.2

-0.1

0.2

-1.9

China

2.2

+2.2

+0.9

-2.0

-0.3

-1.0

+1.0

-1.7

1.3

-0.9

Asia

1.4

+0.4

0.0

0.0

-0.2

0.0

-0.1

+0.1

1.6

+ 0.2

16.0

-3.2

19.2
© FUTABA INDUSTRIAL CO.,LTD.

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Contents

9

1. Overview of the Fiscal Year Ended March 31, 2024

2. Full-Year Earnings Forecasts for the Fiscal Year Ending March 31, 2025

3. Reference

4. Progress on Medium-Term Management Plan, etc.

© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Sales and Operating Profit by Business Segment(including parts supplied by customers)

10(Million yen)

Sales

Japan
Operating profit
Sales

North America

FY3/2023
Results

365,859

305,3489,800(2.7%)

222,877

3,056

Change(1.0%)

172,532

Change (%)+60,511+19.8%+6,743+220.6%+50,344+29.2%+4,229－+6,149+9.0%+1,099+112.7%-18,981-18.6%-410-15.6%-11,783-16.8%-64-4.3%

Operating profit

3,489

Sales

74,480Operating profit

2,075

Sales

83,299Operating profit

2,216

Sales

58,454

Operating profit

1,437

Sales

-9,168-10,659+1,490

193

259

-66

Sales

795,802708,072+87,730+12.4%

Operating profit

19,213+11,531+150.1%

Europe

China

Asia

Consolidation
adjustments

FY3/2024
Results

Operating profit

Total(Note) Figures in parentheses indicate the sales ratio.

(1.6%)-739(-0.4%)

68,331(2.8%)

975(1.4%)

102,281(2.7%)

2,626(2.6%)

70,238(2.5%)(2.4%)

1,502

7,681

(2.1%)(1.1%)* China fiscal year under review: April 30, 2023 to March 31, 2024,
Previous fiscal year: January 31, 2022 to December 31, 2022
© FUTABA INDUSTRIAL CO.,LTD.

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Sales and Operating Profit by Business Segment(excluding parts supplied by customers)

11(Million yen)

Sales

Japan

[excluding parts supplied bycustomers]

Operating profit
Sales

North America[excluding parts supplied bycustomers]

Operating profit
Sales

Europe[excluding parts supplied bycustomers]

Operating profit
Sales

China

[excluding parts supplied bycustomers]

Operating profit
Sales

Asia

[excluding parts supplied bycustomers]

FY3/2024
Results

FY3/2023
Results

225,558

191,772

9,800(4.3%)

111,191
3,489(3.1%)-739(-0.8%)

33,263
(5.0%)

64,1772,216(1.6%)

94,00041,219
2,075

3,056

Change975(2.9%)

72,640(3.5%)

16,6862,626(3.6%)

16,208Change (%)+33,786+17.6%+6,743+220.6%+17,191+18.3%+4,229－+7,955+23.9%+1,099+112.7%-8,463-11.7%-410-15.6%

+477

+2.9%

-64

-4.3%

Operating profit

1,437

Sales

-9,168-10,659+1,490

193

259

-66

449,664

397,225+52,438+13.2%+11,531+150.1%

Consolidation
adjustments

Operating profit

Total[excluding parts
supplied by customers]

Sales
Operating profit

19,213(Note) Figures in parentheses indicate the sales ratio.

(8.6%)(4.3%)

1,502

7,681

(9.3%)(1.9%)* China fiscal year under review: April 30, 2023 to March 31, 2024,
Previous fiscal year: January 31, 2022 to December 31, 2022
© FUTABA INDUSTRIAL CO.,LTD.

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Sales by Customer

12
The figure in parentheses ( ) indicates the ratio to sales (Billion yen)

Including parts
supplied by customers

FY3/2024
Results

FY3/2023
Results

ChangeChange (%)*1 Toyota Group

645.8(81.2%)

544.8(76.9%)+101.0+18.5%

Suzuki68.2(8.6%)

73.8(10.4%)

-5.6

-7.6%

Mitsubishi Motors

22.3(2.8%)

24.3(3.4%)

-1.9

-8.1%

Honda Motor

9.6(1.2%)

10.1(1.4%)

-0.5

-5.0%

*2 Nissan Group

9.5(1.2%)

7.8(1.1%)

+1.7

21.7%

Other

40.1

(5.0%)

47.0(6.8%)-6.8-14.3%

Total

795.8

(100.0%)708.0(100.0%)

+87.7

12.4%

*1 Toyota Group

375.6(83.5%)

321.8(81.0%)+53.7+16.7%

Suzuki22.8(5.1%)

20.5(5.2%)+2.3+11.3%

Mitsubishi Motors

10.4(2.3%)

10.9(2.8%)

-0.5

-4.9%

Honda Motor

6.9(1.6%)

7.2(1.8%)

-0.2

-3.2%

*2 Nissan Group

7.1(1.6%)

5.8(1.5%)+1.3+23.4%

Other

26.5

(5.9%)

30.8(7.7%)-4.2-13.8%

Total

449.6

(100.0%)397.2(100.0%)+52.4+13.2%

Excluding parts
supplied by customers*1. The Toyota Group includes Daihatsu, Hino Motors, etc.

*2. The Nissan Group includes Nissan Shatai.
© FUTABA INDUSTRIAL CO.,LTD.

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Sales Breakdown by Product Category for FY3/2024

Other
Suspension 7.7%
parts
4.8%

Exhaust and fuelsystem parts
50.4%

Sales
795.8 billion yen
Body andinterior parts
37.1%

Suspension
parts
7.6%

13

Other
9.3%
Exhaust and fuelsystem parts
29.7%

Sales
(excluding parts
supplied bycustomers)
449.6 billion yen

Body andinterior parts
53.4%

Comparison of sales breakdowns between sales including parts supplied bycustomers and those excluding such parts
Exhaust and fuel system parts

50.4% → 29.7% (-20.7%)

Body and interior parts

37.1% → 53.4% (+16.3%)© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Contents

14

1. Overview of the Fiscal Year Ended March 31, 2024

2. Full-Year Earnings Forecasts for the Fiscal Year Ending March 31, 2025

3. Reference

4. Progress on Medium-Term Management Plan, etc.

© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Progress on Medium-Term Management Plan, etc.

15

Improve financial condition

Strengthen corporate competitiveness and strength

Risks and opportunities© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

16
<Use>
(1) Shareholder returns

Strengthening earnings capacity and working toincrease free cash flow (FCF)(2) Repayment ofinterest-bearing debt
(3) Investment in growth

FY2022-FY2024 Target
5%

Medium-Term
Management Plan

Operating profit ratio(net sales excluding parts supplied by customers)

4%

50.0

: 2.6% - 5.0%

40.0

3%

30.0
Operating profit ratio*

2%

FCF

20.0

1%

10.0

0%

0.0

-1%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

FCF (billion yen)

Operating profit ratio

Free cash flow (FCF) : 6.0-15.0 billion yen-10.0* Parts supplied by customers included up to FY2021© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

17

Operating profit ratio

Capital expenditures
Profit margin%

Operating profit
Billion yen

25.0

Target in operating profit ratio: 2.6% ‐ 5.0%

5Billion yen

40.0

4.3
4

3.7

20.0

30.0

15.0

3

2.6

2.4

2.2

2.2
1.9

10.0

1.7

1.5
11.2

2016

2017

27.2

1.1

10.0

10.6

8.9

2018

23.0

29.0
25.8
22.7
19.2

1
7.7

2019

34.4

31.9 31.2

16.0

6.7

0.0

2

19.2
1.1

5.0

20.0

2.2

2020

6.1

2021

7.6

2022

2023

2024
Forecast(FY)

0Operating profit
Operating profit ratio (against net sales excluding parts supplied by customers)

Continue activities that lower the breakeven point in
net sales．
Increase efficiency in terms of both variable andfixed costs．

0.0

2016

2017

2018

2019

2020

2021

2022

2023

Capital expenditures (Completion)

2024
Forecast(FY)

Depreciation

To achieve the free cash flow target, set the upper
limit of capital expenditures at 25 to 30 billion yen．
Reduce capital expenditures．

© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

18

Free cash flows
Billion yen

Target in FCF: 6.0 − 15.0 billion yen

60.0

+41.1
40.0
+25.4
20.0
+7.5

+5.2
-2.1

0.0

-1.8

+0.0

-5.5
-20.0

-40.0

2016

2017

2018

2019

Operating CF

2020

2021

2022

Investing CF

2023

2024
(FY)
Forecast

FCF

Seek to improve free cash flows．
Allocate to (1) shareholder returns, (2) repayment
of interest-bearing debt, and (3) investments ingrowth (with a focus on advanced development).
© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

19(1) Shareholder returns(2) Repayment of interest-bearing debt
Dividend
payout ratio(%)

Dividend per share
yen

50

40

45

27.1

25.5
21.9

50
29.4

120.0

40
35

140.0

30

24.4

Equity ratio(%)

Billion yen

22.4

37.2

40

25.8 26.4 26.6 26.8 27.2

30

20
14.1

4.6

12.7

35

10

35

20
98.1

100.0

8.3

84.6

30

0

25

-10

20

-20

81.3

84.9

10

87.7
82.3

0

81.6

80.0

-10
-20

62.0
60.0

-30
-40

15

-30

15

10

10

10

10

10

40.0

-50
-60

-40

10

20.0
5

-70

-50

-80

3
0

2016

2017

2018

End of FY

2019

2020

2021

Interim

2022

2023

2024
Forecast(FY)

Dividend payout ratio

Payout ratio target set around 30%．
Strive to maintain and increase the amounts ofdividends．

-60

0.0

2016

2017

2018

2019

2020

Interest-bearing debt

2021

2022

2023

2024
Forecast

(FY)

-90

Equity ratio

Increase capital efficiency inside the Group to
reduce interest-bearing debt．
The equity ratio stands at approximately 40%.

© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

20(3) Investments in growth(research and development expenses)
Billion yen

6.0

5.0
5.0
4.2

4.4

4.0
3.2

3.3

3.4

3.4

2018

2019

3.2

3.0

2.0

1.0

0.0

2016

2017

Existing development fields

2020

2021

2022

2023

2024
Forecast(FY)

Advanced development fields

Increase the ratio of research and development
expenses to net sales in real terms from around 1%
to a range of 2% to 3%．
Shift from existing fields to advanced fields andnew businesses© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

21

Carry out management with attention to capital cost and share price witha view to quickly reaching a price-to-book-value ratio of 1
➢ Set the ROE target at 10% or higher to boost capital profitability➢ Promote objectives-oriented activities on a region-by-region basis
Share price and PBRNet profit and ROE
Stock price at endof period (yen)PBR (times)
1.5

1,500

ROE
%

Net profit(billion yen)

17.9

20.0

20

1.32
1.23

1.3

9.5

15.0
1.0

15

11.9 11.7

1,250

1,000

10

5.6

10.0

12.8

12.0

0.84
0.74

10.7
0.68

0.8

750

0.59
0.5

0.40

0
-5

6.3
5.0

0.3

5

10.5

10.0

500

0.39

4.1

5.3

4.8

4.0

3.5

250

-10

3.3

-15
0.0

2016

2017

2018

2019

2020

2021

2022

2023

PBR (= Stock price at end of period/BPS)
Stock price at end of period (right axis)

2024
Forecast

(FY)

0

0.0

2016

2017

2018

2019

2020

2021

Profit attributable to owners of parent

2022

2023

2024
Forecast

(FY)

-20

ROE

© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

22

Improvement in breakeven point (Japan)<Daily activities>• Improved productivity• Quality improvement (improvementof defect rates)• Yield improvement

100%<Special activities>
Best practice activities• Improve productivity in pressing• Integrate and suspend production
lines• Improve revenue from interior parts• Increase the competitiveness of
exhaust system parts
2019

2020

2021

Net sales

2022

2023

Breakeven point ratio

2024
Forecast

Seek to be the industry's best inyield and quality and quickly
introduce the best practices globally© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

23

Best practice activities<Improve productivity in pressing><Integrate and suspend production lines>

Improve productivity in transfer pressing
Okazaki: 2,000 t / Mutsumi: 2,000 t, 1,500 t, 800 t

Two-shiftoperation ratio
100%

Number of
production line

90%

600

OkazakiMutsumiNumber of production lines:
down 20%

110％

80%

70%

105％

60%
400
50%

Two-shiftoperation ratio:
up 40% 40%■ Increase andimprovement of SPM

2022

30%

200

20%

* SPM
Stroke Per MinuteOne-shift orzero-shift 10%
operation ratio

Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar

■ Improvement of
frequent stoppages■ Shortening of
preparation time

2023

2024

0

0%
FY2021

FY2022

FY2023

FY2024© FUTABA INDUSTRIAL CO.,LTD.

FY2025All rights reservedImprove financial condition

24(North America) Special project driven by the local top management
Improvement in breakeven point (North America)
100%[Purpose]• Improvement of breakeven points
through earnings structure reforms[Strategy]• Thorough earnings structure analysis• Setting of targets for all expense items andimprovement activities

2019

2021
Net sales(Billion yen)

Operatingprofit

2020

1.6

0.9

Causes of operating loss
• Increase in expenses(Inflation)• Increase in depreciation• (Increase in investment)

2022

2023

Breakeven point ratio

-0.6

-0.7

3.4

2024
Forecast

4.1

Measures to improve the breakeven point• Best practice activities (Application of measures
implemented in Japan)• Appropriate passing on of fixed cost increases(linked to inflation)• Further facilitation of a shift to local procurement

Automation of the supplyof materials for pressing(Best practice activities)© FUTABA INDUSTRIAL CO.,LTD.

All rights reservedImprove financial condition

25(China) Survival strategies with an eye on new phases
Improvement in breakeven point (China)[Background]• Struggling sales of Japanese brand OEMs due tothe rise of Chinese brand OEMs100%

 Decline in the number of vehicles produced
and further intensification of competition

2019

2020

2021

2022

Net sales

2023

2024
Forecast[Strategy]• Further facilitation of a shift to local
procurement• Improved productivity• Application of best practices

Breakeven point ratio[Examples of locally-driven initiatives]

Reduce amounts of materials(Yield improvement)

Automation of assembly lines(Best practice activities)

Pursue of improvements inlogistics

Automation of component supply(Best practice activities)(Best practice activities)© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Progress against Medium-Term Management Plan, etc.

26

Improve financial condition

Strengthen corporate competitiveness and strength

Risks and opportunities© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Strengthen corporate competitiveness and strength Progress in DX

27[Implementation of development process transformation]
Facilitated transformation to create a process in which development is made in a digital space by utilizing
3D data of products, equipment and plants, and implemented activities to reduce the development leadtime by half.
3D digital platform for products and equipment
Development process
Development

Product design

Production facilities

Manufacturing preparation

Mass production

3D data-based collaboration
Use of 3D data,
simulation and AI

Preparation of tooling and equipment throughdigital twin and utilization for simulation

Reflect information necessary for
manufacturing in 3D data

Equipment concept
consideration
Documents forequipment
consideration

Data for 2D-based
equipment

Equipment concept
consideration

In addition,reflect equipment standards

3D-based equipment
concept

3D data-based
collaboration
Design products in consideration of
production process Shortening of lead time and reductionof man-hours and losses

Master 3D data

Feedback on mass
manufacturing issues

Process/equipment planningon a 2D basis

3D-based operation covering
the entire process fromprocess/equipment concept todesign3D-based production processsimulation
Improve the level of advance validation andcompleteness of equipment before installation
 Shortening of lead time and reduction of
man-hours and losses© FUTABA INDUSTRIAL CO.,LTD.

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Strengthen corporate competitiveness and strength Progress in DX

28[Implementation of production process reforms]
Advance activities to reduce production management man-hours by half throughthe creation of a virtual one factory

Logistics

Production
Remote andintensive factory
management

Consolidation of production
management operations

Inventory

Production management man-hours-30%

Progress is being
made as planned.

Intensive control ofproduction management

Shipping

Consolidate the overlapping ofoperations between plants andimprove efficiency by using digitaltechnologies-50%

Make a shift to focus onhigh value-added operations

FY2020

FY2021

FY2022

FY2023

FY2024FY2025• Medium- to long-term
production strategy• Groundbreaking logistics reform© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Progress against Medium-Term Management Plan, etc.

29

Improve financial condition

Strengthen corporate competitiveness and strength

Risks and opportunities© FUTABA INDUSTRIAL CO.,LTD.

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Risks and Opportunities: Impact of BEV Conversion

30<Worldwide New Vehicle Sales Forecast>
・・・

BEV

・・・ Engine-equipped vehicles

Forecast of impact on Futaba
consolidated sales(Excluding automobile-related partsand supplied items)

6%

Approx.
40%

Slightly moreSales
decrease
Projection

than 10%Impact of EVs,
etc.

Exhaust system/
fuel system parts

Sales
decrease
Projectionα%Impact of
GigaCast, etc
Body parts/
Suspension parts

2021

2025

2030

2035

(year)

Source: Created by Futaba Industrial based on Boston Consulting Groupanalysis “Electric Cars Are Finding Their Next Gear (June 9, 2022)”

The number of engine-equipped
vehicles will decrease
BEV conversion will expand rapidly

FY2022

FY2030© FUTABA INDUSTRIAL CO.,LTD.

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Risks and Opportunities - Response to the Adoption of GigaCast

31

Consider providing larger and more integrated components
FutureZone development

Present
Past

Tesla Model Y

Components forsmall-scale assembly

Components for
medium-scale assembly

GigaCast
Indicates half of the productSource: A2MAC1

Components become more complex and larger
Make structure-focused proposals by leveraging
manufacturing capabilities (molding and joining technologies)© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Risks and Opportunities:

32

Sales Expansion - Expanding Sales of Body Parts and Increasing Added Value(1) Zone development(2) Responding to shift to ultra-high tensile
strength steel(Contributes to weight reduction of cars)

Proposals basedon Monozukuri

Solution proposals
by ZoneUtilize CAE and other R&D potential

We will continue to proactively propose structuresthat balance manufacturing with ultra-high tensile
strength steel and performance (CAE:FR impact test).

Front pillar (SPC 1470 MPa)
Planning
concept

Structureplan

Evaluation
andanalysis

DrawingreleaseGreen indicates the effect of the adopted products

Manufacturingconsideration

Reduction of CO2 emissions
Reduction of substances of concern
Weight reduction

Reduced size
Sound muffling
SafetyFront pillar upper outer

New added value

Rail outer

Traditional added value
Front pillar upper innerSmallassembly

Mediumassembly

Large scaleassembly

Rail inner

Finishedcar

Front pillar lower hinge
reinforcement

Cowl side innerFutaba production process

Customer's production process

Front pillar lower outer

Blue: 1470 MPa material, Yellow: 1180 MPa material, Green: Other main body parts© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Risks and Opportunities: Sales Expansion Increasing Share of Exhaust System Products(2) Newly developed product: Modular muffler(1) India: Expand sales by expanding
OEM businessMillionvehicles33

Forecast for OEM in India

Module muffler

Conventional muffler

4
Reduced size

Compact car

Reduceddiameters

Battery

Battery
Large carCompatible with larger
batteries and spacesaving under the floor
Compactcar0Present

2030 Forecast(FY)

MARUTI SUZUKI Annual Integrated Report 2022-23
Forecast by the Company based on SUZUKI
Growth Strategy Briefing for FY2030

BEV

Vehicles with BEV engine (Engine-equipped vehicles: ICE, CNG, HEV, PHEV)

We will launch a team dedicated to driving
localization in India and respond to customer
needs quicker than ever.
Step up efforts to receive orders for exhaustsystems used in new models

Low pressure
loss<Exhaust Pipe layout ofModular Muffler>

Large car

Muffling
performance2

Battery

Battery

Expandable
muffler

Variable
muffler

Order
component

Sound-absorbing
muffler

Resonant
muffler

High-order,
propagating soundFrequency
Air flow noise

20% or more weight reduction,
20% or more muffler volume reduction

We will work to increase market share of our
specialty engine function products (exhaust
pipes, exhaust manifolds and canisters) byusing newly developed products such as
modular mufflers.
© FUTABA INDUSTRIAL CO.,LTD.

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Risks and Opportunities: Sales Expansion Product Development for BEV and HV(1) Development of products for BEV

34(2) Development of hydrogen utilization
technology for HVs
Under development with Chiba University and IHI

Battery

Battery cell

Aim to reduce CO2 emissions by 30% by
realizing ultra lean combustion in theengine through the use of hydrogengenerated in a fuel reformer as a source ofengine ignition
A device that uses a catalyst
to chemically react gasoline to

produce and coolhydrogen

Gasoline

Fuel reformer
FutabaHydrogen

Cooling

The fuel reformer causes the
combustion of ultra-lean
mixture through the ignition

HydrogenMixtureBattery
cooling plate

Large stainless steel
battery casePromote the development of products for
BEVs by utilizing our specialty technologies
such as thermal management, laser welding,and stainless steel stamping.
Currently proposing to OEMs for adoption
from 2027 onwards

Reforming catalyst

Outdoor air

Gasoline

Turbo
IHI

Combustion technology
Chiba University

Secondary
combustion
chamberof hydrogen in the secondary
combustion chamber and firein the main combustion
chamber.

Main combustion chamber

Exhaust air

EnginePromote technological development aimed at
reducing CO2 emissions from existing engine
vehicles by utilizing hydrogen, one of the nextgeneration energy sources© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Risks and Opportunities: Sales Expansion - New Businesses(1) CO2 collection business for logistics trucks

35<Business Proposition Value>

Contribute to the achievement of decarbonization in thelogistics industry, aiming to balance global
environmental sustainability and quality of life.
<Business overview>
A system that separates and collects CO2 emitted during
driving Can be used sustainably as it can be retrofitted andinstalled in existing vehicles.

<Progress in development>
A test run was conducted on a public
street in February 2024.

A traveled distance of 10 kilometers on the public
street was achieved with zero CO2 emissions.

<Co-creation type business development>
Promote Hypothesis Testing with Partner and In-House
Expertise
Material development: University of Tokyo
Demonstration study: SBS Holdings, Inc.
System development: Utilizing in-house knowledge(Vehicle used for the test)(View of the equipment installed)<Promotion schedule>
Item
Description

Business development
Feasibility study (FS)

Product
development© FUTABA INDUSTRIAL CO.,LTD.

ReleaseAll rights reserved

Risks and Opportunities: Sales Expansion - New Businesses(2) Laser weeding machine“Green Food System Strategy” (formulated by the
Ministry of Agriculture, Forestry and Fisheries)<Goal for 2050>
1. 50% reduction in the use of chemical pesticides
2. Increase the area of organic farming efforts by 25%,
to 1 million hectares(3) Woody biomass combustion typephotosynthesis promotion system
Develop a carbon-neutral CO2 application machine thatutilizes woody biomass to replace kerosene-burning
machines.

Contributing to the spread of organic agriculture

Supplying CO2 to greenhouses
Woody biomass
combustion

Purification system

Aim to achieve weeding that does not rely on
people or pesticides

36<Development status>
We started the demonstration of laser eradication on
weeds and autonomous driving.

Blower<Points of development>(1) Enhanced secondary
combustion system significantly
reduces harmful components(2) Further removes soot and harmful
components from exhaust gas
with a purification system<Enhancing industry-academia-government collaboration>

Selected as New Aichi Creative Research andDevelopment Theme in FY2023
Initiatives

Development ofelemental
technologies

System design

Prototypeproduction

Farmdemonstration<Future activities>
Safety evaluation and cultivation demonstration will beverified at public research institutions, with the aim ofearly commercialization.
© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Conclusion

37

We will continue to provide many stakeholders with products and services thatoffer value to society from three perspectives.

Clean & Green represents exhaust system parts that reduce negative impacts on
the natural environment.

Peace of mind represents body/interior parts that protect people from danger andprovide them with peace of mind.

Quality of life represent products and services that increase quality of life (theagleaf system and new businesses)
While envisioning joy and sensation that surpass the expectations and satisfaction ofend users who actually use products, not to mention customers to whom we deliverproducts, under the shared slogan of “Create Beyond” (create beyond the customer’s
expectations), we will continue to provide many stakeholders with products andservices that offer value to society from the three perspectives of the clean & green,
peace of mind and quality of life.

Futaba's Stakeholders
Employees
Their family
members

Customers

Suppliers

Shareholders

Investors

Localcommunities

End users© FUTABA INDUSTRIAL CO.,LTD.

All rights reserved

Futaba Industrial Co., Ltd.
https://www.futabasangyo.com/[Important Notes]
Forecasts and other forward-looking statements about the Company (including its consolidated subsidiaries) contained in this document aremanagement's forecasts based on the information currently available to the Company and involve risks and uncertainties. Therefore,
investors are advised not to make investment decisions based solely on these forecasts.
Please note that actual results may differ materially from the forecasts due to various key factors. Important factors that may affect actual
results include, but are not limited to, economic conditions surrounding the business areas of the Company, its consolidated subsidiaries
and equity method affiliates, market trends, and exchange rates of the yen against the U.S. dollar and other currencies.
All information in this document is the property of Futaba Industrial Co., Ltd. No reproduction, modification, reprinting, transmission, etc., forany purpose, by any means or by any method, is permitted without the Company's prior written approval.
In this document, some figures are shown in billion yen for the purpose of providing a general overview of the Company's businessperformance. The total amount and difference shown in this document may appear to be inaccurate to the billion yen digit because theoriginal figures, which are in millions of yen, are rounded.