YOTAI REFRACTORIES CO., LTD

FY2021(2020/4-2021/3)

Financial Results
AND

The First Medium-termManagement plan
（2021/4-2024/3）
May 27, 2021

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

FY2021 Financial Results【Consolidated】

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Consolidated income statement
Net sales decreased by 11.6% year-on-year due to decreased in sales volume for steel industry of our main customer.
 Ordinary profit decreased by 26.9% year on year due to factors such as lower production volumes and lower unit sales prices,
despite efforts to reduce costs.
 In the engineering division, net sales increased by 1.6% year-on-year due to an increase in new projects for environmental
equipment and steady construction progress, and segment profit increased by 18.3% due to higher occupancy rates from anincrease in orders.
 An impairment loss of 225 million yen was recorded at YINGKOU NEW YOTAI for equipment related to sintered products due tothe deterioration of market conditions (extraordinary loss).
（millions of yen）


FY 2020
Net Sales

FY 2021
23,55426,654

Operating Profit

Change

2,921

4,017

（Operating Profit Margin）(15.1％)(12.4％)（Ordinary Profit Margin）(15.5％)(12.8％)

2,794

1,845

Ordinary Profit

Profit attributable to ownersof parent
Net Sales
25,00022,236

Ordinary Profit
27,87524,21726,65423,554

5,000
4,000

15,0003,000

10,000

2,000

5,000

1,000
'17.3

'18.3

'19.3

'20.3

'21.3

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

0▲11.6%▲1,096▲27.3%▲1,113▲26.9%▲949▲34.0%

Profit attributable to owners of parent（millions of yen）
6,000

20,0000(7.8％)(10.5％)（Net Profit Margin）（millions of yen）
30,000

3,021

4,134

▲3,100（millions of yen）
4,000

5,224
4,134

3,663

3,021

2,013

2,794

2,625

3,000
2,000

3,610

1,845

1,374

1,000

'17.3

'18.3

'19.3

'20.3

'21.3

0

'17.3

'18.3

'19.3

'20.3

'21.3

2

Change in operating profit【Consolidated】

4,017（millions of yen）

Cost reduction＋1,203

Decreased insales volume▲1,374

Increased
fixed cost
due toproduction
volumedecrease▲104

Increased
engineeringprofit+109
Decreased
unit sales
prices▲696

2,921
Decreasedsales volume
in Chinese
subsidiary▲234▲1,096 millions of yen

FY2020

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

FY2021

3

Refractories
Net sales decreased by 14.2% to 19,089 million,
segment profit decreased by 24.6% to 3,609 million year-on-year.
Net sales（millions of yen）

25,00020,00018,313Specific efforts

Net sales（Quarterly）
23,972
20,02922,2602020.3
5,738（millions of yen） 5,962

6,000

4,853

19,0892021.3

5,325
5,235
4,929
4,855
4,452

4,000

15,00010,000casting block X-Series and installationof equipment to reduce the workload ofmanual molding operations.

2,000

'17.3

'18.3

'19.3

'20.3

'21.3

Segment profit
6,000
5,000

1Q

2Q

1,500

4,787

4,208

2020.3（millions of yen）

3,609

4,000
3,000

0

3Q

4Q

Segment profit （Quarterly）
5,857（millions of yen）

2,671

2,000

1,000

press of over 1,500 tons to improve
quality and production efficiency.

 Expansion of equipment for sintering

5,000
0

 Decided to install a high-pressure

1,306
882

1,248

782

2021.3

1,151

1,082
978
967

 Expanding sales of dry-typemonolithic refractories suitable for
improving the workplaceenvironment.

 Expansion of domestic and overseas

sales of bend-resistant setter andwrap correction setter.

500

1,000
0

'17.3

'18.3

'19.3

'20.3

'21.3

0

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

1Q

2Q

3Q

4Q

4

Engineering
Net sales increased by 1.6% to 4,465 million,
segment profit increased by 18.3% to 699million year-on-year.

（millions of yen）

5,000
4,000

3,923

Specific efforts

Net sales（Quarterly）

Net sales
4,188

3,902

4,394

4,465

（millions of yen）

1,500

1,000

3,000
2,000

2020.3

1,089
1,051
1,026

2021.3

1,307 1,322

1,251

1,010

803



500

1,000
0


'17.3

'18.3

'19.3

'20.3

'21.3

（millions of yen）

700

631

0

634

541

699
591

（millions of yen）

2Q

3Q

4Q

400

150

300

100

200

2020.3

2021.3

237

250
200

500

152

158

189
136

Shortening the construction period
by using newly developedmonolithic refractories.
Actively develop supervisory
operations for overseas markets.
Improvement of on-site
capabilities through periodic safety
and skills training.
Systematic and sustainale
recruitment of human resources tocreate a vigorous work
environment.

148

155
115

50

100
0

1Q

Segment profit（Quarterly）

Segment profit

600



'17.3

'18.3

'19.3

'20.3

'21.3

0

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

1Q

2Q

3Q

4Q

5

Consolidated balance sheet（millions of yen）

FY2020

FY2021

ChangeIncrease/Decrease Factors

Current assets

27,44827,921+473

Cash ＆ Deposits ＋3,184
Receivables ▲1,097
Raw materials ＆ Supplies ▲880

Fixed assets

6,994

7,474

+480

Investment securities +601
Buildings and structures +227

Total assets

34,44335,396+953

Current liabilities

5,875

4,967

▲908

Fixed liabilities

1,334

1,396

+62

Total liabilities

7,209

6,364

▲845

Total net assets

27,23429,032+1,798

Total liabilities ＆net assets

34,44335,396+953

Equity Ratio

79.1%

82.0%

+2.9pts

ROE（Return on Equity）

10.7%

6.6%

▲4.1pts

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Electronically recorded obligations ▲264
Accounts payable ▲254
Net defined benefit liability +83

Retained earnings ＋1,582
Valuation difference on available-for-salesecurities +356

6

Consolidated statement of cash flows（millions of yen）

FY2020

FY2021

Increase/Decrease Factors

Cash flows fromoperating activities

5,413

4,803

Cash flows frominvesting activities▲1,111▲1,202

Cash flows fromfinancing activities

▲398

▲418

▲8

2

Change incash and cash equivalents

3,894

3,184

Cash & cash equivalents
at end of the year

8,206

11,390Effect of exchange rate change
on cash and cash equivalents

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Income before income taxes 2,788
Decrease in inventories 1,838
Decrease in trade receivables 940
Income taxes paid ▲989
Purchase of property, plant and equipment▲1,113Purchase of investment securities ▲107
Cash dividends paid ▲262

Purchase of treasury shares ▲1307

FY2022 Financial Forecast【Consolidated】

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Financial forecast 【Consolidated】
 Assuming a recovery in demand for steel and electronic parts industry, we expect net sales to increase by

2.7% and ordinary profit to increase by 5.9% year-on-year.

 However, crude steel production volume, which has a large impact on business performance, and raw

material price trends from China are uncertain.

（millions of yen）

FY2021

FY2022 Forecast
24,20023,554

Net Sales

3,100

2,921

Operating Profit（Operating Profit Margin）(12.4％)(12.8％)（Ordinary Profit Margin）(12.8％)(13.2％)(7.8％)(9.1％)

3,200

3,021

Ordinary Profit

2,200

1,845

Profit attributable to owners of parent（Net Profit Margin）

Change
+646

+2.7%

+179

+6.1%

+179

+5.9%

+355

+19.2%Net Sales

Ordinary Profit

Profit attributable to owners of parent（millions of yes）
27,875 26,654
30,000（millions of yen）
6,000
5,224

（millions of yen）
3,610
4,000

25,00024,21723,554 24,200

5,000

20,0004,000

15,0003,000

10,000

2,000

5,000

1,000

0

'18.3

'19.3

'20.3

'21.3

'22.3
（F）

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

0

4,134

3,663

3,021

3,200

3,000

2,794

2,625

1,845

2,000

2,200

1,000

'18.3

'19.3

'20.3

'21.3

'22.3
（F）

0

'18.3

'19.3

'20.3

'21.3

'22.3
（F）

9

Main activities for FY2022(2021/4-2022/3)
The First Medium-term Management plan（2021/4-2024/3）

A period of time to build a system for the realization of the corporate vision.

Basic Strategy・Focused Policy
We will build a management base that supports sustainable growth by investing in people, products,
and information while maintaining high profitability and soundness.
 System Equipment ・ ESG• Optimization of staffing• Promoting Digital
Transformation• Introduction of electric vehicles• Expansion of domestic andoverseas sales offices• Structural Reform of the
R&D Division• Establish a training system
for technical service
personnel

Computer system

RPA、AI-OCR• Updating the core system• Installed a large highpressure press• Installation of RefractorySurface Improvement
Equipment• Expansion of R&D facilities

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

• Reduction of carbon dioxide emissions byreviewing manufacturing processes• Use of renewable energy(Solar and wind power generation)• Establishing a foundation for certification as an
excellent health management corporation• Improving Talent Management• Strengthen the effectiveness of the governancesystem• Use of the Nomination and Compensation
Advisory Committee• Adoption of restricted stock compensation plan10

Sales results and forecast by industries【Non-consolidated】

For Cement

For Steel（millions of yen）

15,00010,000

9,093

10,61012,60911,263

4,000

8,809

3,000

'17.3

'18.3

'19.3

'20.3

0

'21.3

4,064 3,931
3,720

4,164 4,376

2,000

2,000
1,000
'18.3

'19.3

'20.3

'21.3

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

2,646

2,041

2,344

2,010 1,992

1,000

'17.3

'18.3

'19.3

'20.3

'21.3

0

'17.3

'19.3

'20.3

'21.3

FY22
Forecast

For Steel

1,500

1,050 1,096 1,019 1,002
776

For Cement

500

For
Nonferrous

0For
Environment
'17.3

'18.3

FY21

（millions of yen）

1,000

'17.3

3,000

For Electronic parts

3,000

0

2,928 3,027

1,000（millions of yen）

4,000

4,195 4,044
3,953

2,000

For Environment
5,000（millions of yen）

5,000

5,000
0

For Nonferrous（millions of yen）

'18.3

'19.3

'20.3

'21.3

For
Electronic
parts

11

CSR activities
Fulfill our social responsibilities in good faith and develop together withlocal communities.
＜SDGs＞
Life Below Water＜SDGs＞
Life On Land

＜ SDGs＞
Blood Donation

We invited a fishery cooperative and held aSatoumi Class (eelgrass bed restoration
activity) in HINASE plant.

50 Sakura trees were planted in HINASE
plant.

Many employees participate in blood
donation every year.

Under the guidance of thefirefighting union Fire drill

Donation to Ube City's"100th Anniversary ofCityhood Project Fund

Donation of two table
tennis tables to ECEC

Many of our employees are active membersof the fire department. It contributes tofirefighting in the neighborhood.

We made a joint donation with Murakami
Corporation to a project in Ube City, where
many of our customers are located.

Since 2019, we have donated table
tennis tables to ECEC located in our
offices every year.

We are also involved in various other activities to contribute to the development of the local community.
Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

12

The First Medium-termManagement plan

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Financial result trends
 We have been working to achieve sustainable growth and improve profitability by diversifying our clientindustries and responding flexibly and quickly to customer needs.

 In the FY 2021 both sales and profits decreased, because the steel production shocks caused by the

COVID-19 outbreak. However, we were able to achieve results in line with the initial plan by steadily
meeting demand and thoroughly reducing costs.

 There are concerns about the situation of raw materials in China and trends in the steel industry.

Net sales(millions of yen)

Ordinary profit margin

30,00027,87525,00020,41520,00021,716

20,357

20,107

21,123

21,4650

23,554
15.5%
12.8%

7.4%

10,00026,654

18.7%

15.1%

17,787

15,0005,000

22,23624,217

24%

7.5%

5.2%

3.6%

6.4%

6.5%

Covid-19
pandemic
Fluctuations in Chinese
raw material prices

'10.3

'11.3

'12.3

'13.3

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

'14.3

'15.3

'16.3

'17.3

16%

12%

9.1%

7.6%

20%

'18.3

'19.3

'20.3

'21.3

8%

4%

0%

14

Our external environment
Maturity of the refractory market
 Stable domestic demand forrefractories.

 Changes in the business environment,such as deteriorating businessperformance of business partners andsoaring raw material and energy prices.

Rapid development of technology
 Evolution of AI, IoT, and Information

and Communication Technology.

 Skillful use of technology will have asignificant impact on future
corporate value

Demographic change Decline in Furnace Construction

company.

 Decline in working-age populationand shortage of human resources.

Contributing to a sustainable
society Increasing demand to reduce carbon

dioxide emissions and contribute toa carbon-free society Growing demand for ESG and SDGs

Increasing Uncertainty

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

15

SWOT Analysis
Weaknesses

Strengths

Weak connections with blast furnace
manufacturers and delays in overseas
expansion

Independent, not part of any particular group
 High share of refractory bricks
 Wide range of client industries・Stability of businessperformance based on the company

 Extensive experience and know-how in the fields of electric

furnaces, cement, nonferrous, and environment.

 Efficient production system for low volume and high variety
 High profitability and high financial soundness by promoting

thorough rationalization

Business structure dependent on trends in the steel
sectorWeak relationship with blast furnace manufacturers(Low share of monolithic refractories)

Delay in overseas expansion、System not in place

Human resource shortage to develop new fields

 Sales and technical staff work in unison to provide detailed

support.



Opportunities

Threats

Recovery of demand for refractories in specific fields
Business opportunities for engineering business

Declining demand in the refractory market andincreasing demand for ESG and SDGs

Recovery in demand for refractories for the steel, nonferrous, and electronic parts industries.
Refractory demand expected to remain stable incement and environment sectors
Growth potential in engineering business andincreasing need for material and construction packages.







Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Concerns over deteriorating business performance of customers
due to maturation of the domestic market, decline in demand forrefractories from a long-term perspective
Shift in demand from refractory bricks to monolithic refractories.
Soaring raw material prices, dependence on China for raw
material procurement
Reducing carbon dioxide emissions・Growing demand for ESG
and SDGs
16

The direction we should takeExternal environment recognition
Maturity of therefractory market

Our challenges
 Differentiate ourselves from competitors byproviding products and services thatleverage our strengths.

 Increase and train employees to support the

Demographic change

provision of high quality products andservices.

 Establishment of a sustainable low-cost andstable supply system.

Rapid development oftechnology

 Accelerate streamlining and efficiency

Contributing to asustainable society Strengthen management base and risk

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

improvement through the use of AI, IoT, andICT.
response by becoming carbon neutral andpromoting ESG management.

17

Vision of the company
A company that continues to increase its financial and nonfinancial value and improve its corporate value in asustainable manner.
Investment in people, products, and information
to respond to changes in the environment

Maintainprofitability
A company that
responds to changes inthe environment andcontinues to provide astable supply of highquality refractories andservices.

A company that
continues to improveits corporate value ina sustainable
manner in harmony
with society

Promotion of ESG
management

A company thatincorporates ESG into
its management and iscapable of appropriate
business operations
and decision-making
from a long-term
perspective

Strengthen management baseand respond to business
opportunities and risks
Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

18

Relation between vision, philosophy and code of conduct

Newly established "Vision of company" to link the Philosophy
and Code of Conduct for sustainable value creation.
Aiming to be a sincere company that
contributes to society by creating
new technologies and products

Philosophy

Vision

A company that continues to improve its
corporate value in a sustainable mannerin harmony with society
Maintain profitability and Promotion of ESG management

1. Compliance with laws and ordinances

Code of 2. Ensuring environmental conservation
Conduct 3. Ensuring of safety and health 4. Highest quality
5. Lowest cost

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

6. Proper delivery time19Basic policyof the first medium-term management plan
the First Medium-term Management plan（2021/4-2024/3）
Period for establishing a system to realize “Vision of company”.

Basic Strategies and Priority Measures
We will build a management base that supports sustainable growth by investing in people, products,
and information while maintaining high profitability and soundness.

Maintain profitability
12Expand sales byimproving the quality of
products and services
Products

Strengthen low-costand stable supply
systemdifferentiated products that
surpass other companies

procurement of raw
materials and energy

 Development ofSales with technology
 Strengthening oftechnical service
systemCustomer
Service Careful response tocustomers by
expanding sales
officeRaw material procurement

 Strengthen

Rationalization andefficiency

 Aggressive investment

in rationalization
facilities

 Adequate staffing Promotion of DX

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

3
Developing new
sources of revenue
Development System
 Strengthen the productdevelopment system forthe next generation by
restructuring the R & D
systemExternal Cooperation
 Development of new

products based ontechnological exchangewith customers

Promotion of ESG
management
4

Building a management foundation
through the promotion of ESG
Environment

 Construction of manufacturing processes that emit

less carbon dioxide

 Capital investment for energy conservation anddecarbonization

Society Improving employee vitality, organizational vitality,and productivity by promoting health management

Governance Reform of governance system and enhancement ofeffectiveness Enhanced information disclosure and dialogue withstakeholders

20

Positioning of this medium-term management plan in themedium- to long-term strategy
A company that continues to improve its corporate value
Vision of
in a sustainable manner in harmony with society
company
Maintain profitability and Promotion of ESG management

The First Medium-term Management plan

（2021/4-2024/3）

Period for establishing a system torealize “Vision of company”（Sales・Profit）

 Obtain revenue from stable growthfield and core growth field Investment in people, products, andinformation
 Building a management base tosupport sustainable growth Study measures to achieve carbon
neutrality

The Second Medium-termManagement plan
（2024/4-2027/3）

Period of accelerated growth due toreaping of investment

 Earning revenue from stable growthfields and core growth fields as well as
development fields
 Continued investment in people,
products, and information, and further
strengthening of managementfoundation

 Identifying the direction of measuresto achieve carbon neutrality

Current
Point

Stable growth field
Core growth field

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

21

Concept of the business portfolio
Setting KPIs for each field and aiming to build a portfoliothat can withstand environmental changes
Stable growth field（steel）
Sales volume

Expand sales and improve profitability as an important
stable revenue source.
Target KPIStablegrowth fieldSales growth rate（FY2021→FY2024） ＋10%

steelCore growth field（cement, nonferrous, environment）
Aggressively expand sales and improve profitability bycapitalizing on the strengths that have been cultivated.

Coregrowth fieldTarget KPI
 Sales growth rate（FY2021→FY2024）

cementnonferrous＋10％environment

Development
field

Development field（electronic parts）

Build a foundation as a future growth business.

electronicparts

profitability
Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Target KPI
 Sales growth rate（FY2021→FY2024） ＋30％

22

Numerical targetsof the first medium-term management plan
(millions of yen)

FY2021

FY2024

Change with FY2021
AmountRatio

Net Sales

23,55426,000+2,446+10.4%

Operating Profit

2,921

3,500

+578

+19.8%

Ordinary Profit(Ordinary Profit Margin)

3,021(12.8％)

3,600

+579

+19.2%

Profit attributable toowners of parent

1,845

2,400

+555

+30.1%

ROE

6.6%

8%

＋1.4pts―

Consolidated dividend
payout ratio

20.1%

30%

＋9.9pts―(Operating Profit Margin)(Net Profit Margin)

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

(12.4%)(7.8％)(13.5％)(13.8％)(9.2％)

23

(1) Expansion of sales by improving the quality of products andservices
Expansion of sales through a combinationof products, sales, and technologies
 Expanding sales of new high-value-added

products• For steel：Highly corrosion-resistant refractory

Diversification of industrial furnace
inspection methods（Magnesia chromium and chromia refractories）• For cement：Brick for burning zone
• For all fields：Monolithic refractories and unsintered bricks
 Strengthen technology sales and hire more forengineering business• Development of new customers and maintenance of existingcustomers by strengthening proposal-based sales throughtechnical service personnel• Expanding orders for engineering business, for which demandhas been expanding in recent years• Acquisition of sales of refractories in the engineering business Detailed sales support, including expansion of

bases• Increase mobility of sales staff through expansion ofdomestic and overseas sales officesIntroduction of inspection technology through theintroduction of drones, residual measurement devices, etc.

Deepening transactions with customers by utilizing advanced
inspection methods
Development of inspection technology to electric furnace
manufacturers

Recruitment and development of personnel
to support sales growth Recruitment• Aggressive hiring, staffing in growth areas• Diversification of recruiting methods of scouting-type)(mid-career , appointment of external personnel, introductionof scouting-type) Improving employees' skills through training• Improving Talent Management by Creating and
Implementing Skill Improvement Programs• Revision and implementation of personnel evaluation
system through development of human resource
training program• Identifying customer needs and proposing new products
through regular customer visits

Specific capital investment plans• Strengthen customer response capabilities by introducing
sales support systems■Personnel and labor management system

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

■Inspection drone ■Sales support systems

24

(2) Strengthen low-cost and stable supply system
Strengthen low-cost and stable production
system Initiatives in the Manufacturing process• Continuously reduce costs（Factory automation andefficiency improvement, adequate staffing）• Quality improvement through the introduction of a large
high-pressure press, production efficiency
improvement, vertical start-up of newly introduced
equipment Initiative in Logistics process

Establishment of a stable and sustainable
raw material procurement system

Risk diversification by securing diverse procurement
routes, mainly in China.

Stable and low-cost procurement through the use ofChinese subsidiaries
Order
Delivery
Confirmation
quality

Raw material
suppliers

Chinesesubsidiary（YINGKOU
NEW YOTAI）• Pursuit of transportation efficiency
Pricenegotiation

 Company-wide initiatives• Introduction of a core system• Improving business efficiency through the use ofadvanced ICT such as RPA and AI-OCR
Specific capital investment plansTwo methods ofprocurement
Raw material suppliers■Core system

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Dedicated staff
Information
supportsharingImage of procurement
cost

Tradingcompany■Large high-pressure press (over 1,500 tons)■Advanced devices such as RPA and AI-OCR

YOTAI
domestic
plant

YOTAI

Via a trading
company

Direct25

(3) Development of new revenue sources
Structural Reform of R&D Structure

Overseas Expansion

Establish a training system for technical service personnel

Medium- and long-term R&D theme initiatives



Speed up development by enhancing new productdevelopment-related equipment

Study of introduction of surface modification equipment toproducts for electronic parts
New product development based on technologicalexchange with customers
Specific capital investment plans■Tissue analysis equipment■Characterization equipment■Surface modification equipment to products for electronic parts

Deepen existing business partners in fields where ourcompany has strengths, particularly in steel, cement
and electronic parts

Proposals for stable furnace operation and longer
maintenance periods through product differentiation

Development of flexible sales activities for business
partners by establishing overseas sales offices

Development of new agency with mobilityStrengthening sales through SV services in theEngineering Divisionequipment

Basic technology
Fusion of materials andprocesses
Design andDevelopmentof material

Design andDevelopmentof process※Material
evaluation

Technology
Development
Precision
processing
Large plate

Process
analysisAnalysistechnology
development

Complexation
Environmenta
l response

Business
Developmentin each fieldsteel

nonferrous

cementenviro
nment

glass

Electronic
parts※Mixing, molding, sintering and processing
Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

26

(4) Building a management foundation
through the promotion of ESG
E

S Society

Environment

 Introduction of electricvehicles Reduction of CO2 emissions

through introduction of new
power generation facilities

 Development of

manufacturing processes
with low CO2 emissions

 Promotion of development ofmonolithic refractories andunsintered bricks *









G

 Making decisions andPromotion of work style reform andimprovement of motivation by improving
employee treatment

Utilizing the working hour management
system and Improving the working
environment to achieve a work-life balance
Unification and utilization of personnel
information and improvement of talentmanagement

Building the foundation to become an
excellent health management corporation

low CO2 emissions

implementing management
strategies that contribute tosustainable enhancement ofcorporate value

 Establishment of Nomination

and Compensation Advisory
Committee

 Introduction of stock

Contribution to regional revitalization throughcooperation with local communities*Refractories with no sintering process andGovernancecompensation system (RS) Compliance with the Revised

Corporate Governance CodeContribution to SDGs

In line with the key issues set out in the 3-year
Medium-Term Management Plan, we willcontinue our efforts to resolve the 2030 Agenda
for Sustainable Development adopted at the
UN Summit.
Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

A company dormitory completed
in December 2020 (Ako City, Hyogo Prefecture)27

Investment schedules of people, products, information, andother
preparation
2021/4-2022/3

 People
Recruitment
Training
Management

 Products
Introduction of large presses

New productdevelopment facilities
Diversification of Industrial
Furnace Inspection Methods

Reduction of CO2
emission Information

2Q

4Q

execution

2022/4-2023/3

2Q

4Q

2023/4-2024/3

2Q

4Q

Actively recruiting mid-career personnel

Introduce a scout-based recruitment method

Revision and implementation of the personnel evaluation system
Creating and executing skill development programs
Utilization of labor hours management system

Unification and utilization of personnel information
Promotion of health management

Installation of over 1,500 tons of presses

Introduction of tissue analysis equipment

Introduction of characterization equipment
Study of introduction of surface modification equipment to products for electronic parts

Introduction of drones for inspection of industrial furnaces
Installation of solar panels

Introduction of electric vehicles
Improving business efficiency through the use of ICT such as RPA and AI-OCR
Improving customer responsiveness by introducing a sales support system

DX Promotion

Work style reform by introducing a work hour management system
Promotion of talent management by introducing a personnel management system

Improving organizational strength by systematizing constant work in the Engineering
Division Others

Improving operational efficiency and productivity by upgrading core system

M&A investment in related fields, etc.

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

28

Approach to fund allocation（Cumulative Total of 3 Years）
Strengthen the allocation of funds to investments andshareholder returns
Renewal investment
1.4 billion yen

Investment
5 billionyenStrategic investment
2.3 billion yen
IT investment 0.4 billion yen

Others 0.9 billion yen

Shareholder Returns

 Rationalization and efficiency improvement

investment

 Introduction of strategic equipment
 Carbon-free investment
 BCP investment

 Information system investment
 M&A investment, etc.

 Strengthen shareholder returns（Target a consolidated dividend payout ratio of 30%）
 Conduct flexible share repurchases※We will also consider investments other than those mentioned above, after carefully
examining the details and amounts.
Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

29

Shareholder returns

Target a consolidated dividend payout ratio of 30%
Conduct flexible share repurchases

Dividends and Amount of share repurchases
Dividends(millions of yen)Amount of share repurchases

2,500

2,197

2,000
1,500

1,500

1,000
500
0

327
128
199

'14.3

14.3
Annual dividend
per share（yen）
Dividend payout
ratio(consolidated)

219

219

219

263

329

'15.3

'16.3

'17.3

'18.3

'19.3

15.3

16.3

17.3

18.3

19.3

351

'20.3

499
129
370
'21.3

20.3

697
'22.3
23.3
24.3
(Forecast） (Forecast） (Forecast）

21.3

22.3

23.3

24.3

9.0

10.0

10.0

10.0

12.0

15.0

16.0

17.0

32.0

―

―

25.2%

23.8%

23.5%

16.0%

10.1%

9.1%

12.6%

20.1%

31.7%

―

―

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

30

Concept and policy
for reducing carbon dioxide emissions

Work to realize even difficult themes

Manufacturing process for refractory bricks
Raw material
crushing

SizingMixingSpecific themes for considerationL

Switching toelectric vehicles
for sales andindustrial vehicles

Introduction ofrenewable energy
power generation
facilities at plants
and offices

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

The process with the highest
carbon dioxide emissions
Drying andMolding
Inspection
sintering

Difficulty to achieve
Reuse of waste
heat in sintering
process

DeliveryH

Switching to lowcarbon dioxide
fuels in thesintering process

Development ofmonolithic
refractories andunsintered bricks

31Appendix

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Corporate profile
Create the future with our refractories
Trade NameYOTAI REFRACTORIES CO., LTD.

Established

August, 1936

Head Office8-1, NISHIKINAKA-MACHI, KAIZUKA-CITY, OSAKA, 597-0093, JAPAN

Number of
Employees

537 (as of March 31, 2021)

Common Stock

2,654 million yen (as of March 31, 2021)

Our Business

Production and sales of refractories and new ceramics as well as related
engineering business

Philosophy

The Yotai Group aims to be a faithful company that creates new technologies
and products in response to the demands of revolutionary times, enhances
customer satisfaction, and contributes to society and using our unique
technology and passing on the history and experience in long-standingrefractory manufacturing technologies to the next generation.

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

33

History
2021 is the 85th anniversary of the establishment.
OSAKA YOGYO
FIRE BRICK
CO.,LTD.

ACID PHIAL
MANUFACTURING COMPANY

1882
established

YOTAI
REFRACTORIES
CO.,LTD.

1936
1951
1937
1962
1987
established Okayama Clay
Mitsuishi Plant Yoshinaga Plant Company namechangePlant (at present, (at present,
built
the second branch the third branchPartialof Yoshinagaof Yoshinaga
1985
investment
Plant) built
Plant) built
Technical
Research
1938
Laboratory
Hinase Plant built
established
OSAKA YOGYO

2004
1993
Merged with Joint venturecompany "YINGKOUOSAKANEW YOTAIYOGYOREFRACTORY CO.,
CO.,LTD.
LTD." established in
China.（Made awholly owned
subsidiary in 2005）

Limited.

1907
1894
Company Kaizuka
Plant
name
change built

1961
Mizunami
Plant built

1992
Advanced Materials
Laboratory and Kaizuka
Plant relocated.

OSAKA YOGYO
Cement Co.,Ltd.

Osaka Cement
Co.,Ltd.

Sumitomo Osaka
Cement Co.,Ltd.

1926
established

1963
Company
name change

1994
Merged with SUMITOMOCEMENT CO.,LTD.

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

34

Features and strengths

Independent company

Thorough cost management

Strong positionin multiple industries

Pursuit of in-houseproduction

Sincere and agile
customer service

Technical sales
Multi-skilled work

Structure that is not easily affectedby trends in specific industries

Industry-leading profitability

Realize sustainable profit growth
Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

35

Sustainable profit growth
Sustainable growth unaffected by recession in specific industries
Sales Results by industry for FY2021(amount ratio) [non-consolidated] Trend of Sales and Ordinary Profit Ratio[Consolidated]
Amount of Sales（millions of yen）

Ordinary Profit Ratio

30,00027,87526,654
24,21725,00020,00021,716
20,415

20,357

21,123

21,465

15.1%

20,107

17,787

7.4%
3.6%

23,554

20%

15.5%
16%

7.5%

9.1%
7.6%

6.4%
5.2%

6.5%

12%

8%

5,000

4%

0

0%

'10.3 '11.3 '12.3 '13.3 '14.3 '15.3 '16.3 '17.3 '18.3 '19.3 '20.3 '21.3

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Chemistry/Lime 4.0%

Others

1.2%

Steel

Glass 4.0%
Ceramic industry

43.4%

4.1%

Nonferrous

12.8%

15,00010,00022,236

18.7%

Electronic parts 3.9%

24%

7.7%

Cement15.6%
Environment

16.1%

36

Sincere and agile customer service「Sales」「R＆D」「Production」「Technical Service」will provide value
together.

Sales

Sharing customer needs
with each department

Being aware ofcustomer needs byworking closelywith them

Extract
improvementsfrom usage

R＆D

Technical
Service

The developer checks
the usage status of
the developed
product himself

Timely and low cost
manufacturing
Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Pursuing the ideal
form of refractoryfrom a medium- tolong-term
perspective

Develop productsthat anticipate
customer needs

Production

Delivery of various
types and shapes ofrefractories to various
industries(about 50,000 types)

37

Business locations▎YINGKOU NEW YOTAIREFRACTORIES CO., LTD.
（Liaoning, China）

TOKYO Branch
KYUSHU Branch

Head Office

YOSHINAGA Plant

The second branch of
Yoshinaga Plant

NAGOYA Branch
OKAYAMA Branch
MIZUNAMI Plant
HINASE Plant
Technical Research Laboratory
Engineering Division

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

KAIZUKA Plant
Advanced Materials
Laboratory

38

Classification of refractoryClassification

Refractory
bricksAmong refractories with a wide variety of shapes,
such as block and plate. Refractory bricks are usedin the various industries including the electronicparts industry, which is a growing field.

BrandsMain applications

SpinelCementMagnesia-carbon

Steel

Alumina-magnesia-carbon

SteelFire-clay

General purpose

High alumina

General purpose

other

General purpose

Refractory bricks

Monolithic
refractories

Powder-type and rammed earth-type Refractories
Powder-type products are poured after being mixed
with water on-site or sprayed for use. Rammed
clay-type products are pressed or patted for use.

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

Castable

Environmental equipment,

othersteel, general purpose
Monolithic
refractories

39

Disclaimer
Information in this document includes forward looking statements. These forward looking
statements do not guarantee the financial performance in the future, and contain risks anduncertainties. Please kindly note that actual results could differ from these forward looking
statements.

Copyright ©YOTAI REFRACTORIES CO., LTD. All Rights Reserved.

40