Innovating new ideas today. Becoming the norms of tomorrow.

Supplementary Material for the Second Quarter of the Fiscal Year Ending March 2024

November 2, 2023

TSE PRIME: 5805

Contents

1. FY2023 Q2 Overview of Financial Results

2. FY2023 Full Year Forecasts
3. Progress of “Towards Realization of Management that is
Conscious of the Cost of Capital”

2

1．FY2023 Q2 Overview of Financial Results

3

FY2023 Q2 Overview of Financial Results

Business
EnvironmentSupported by the normalization of economic activity, acceleration of wage increases, and accommodative fiscal and monetary policies.

Raw material and energy prices remain high due to the protracted situation in Russia and Ukraine and the weakening yen.

In the automobile-related market, recovery production is in full swing and the EV-related market is also on the road to recovery.

In the electric wire and cable industry, overall demand for electric wires was on a par with the same quarter of the previous year.

The average domestic quotation price for copper increased slightly from the same quarter of the previous year.

The business plan for the current fiscal year is slightly weighted more towards the second half of the year than usual. Q2 results showed sales were down YoY.
[Status of Major Business Fields]

Net sales

Energy Infrastructure: Strong construction-related business compensates for the second-half bias in electric power construction.
Automobiles: Products for EVs bottomed out in Q1, but are in an adjustment phase towards a recovery in demand to "pre-pandemic" levels.
Industrial Devices: Partial drop in pandemic-driven demand.

OperatingincomeWhile progress in electric power infrastructure was heavily weighted toward the second half of the year, as initially expected, earnings increased YoY
due to solid performance in construction-related businesses. In response, the Company upwardly revised its full-year plan.

4

FY2023 Q2 Consolidated Statements of Income
Revised full-year plan upward in anticipation of strong H1 construction-related performance and demand in H2. Aiming forrecord-high operating income and ordinary income.
(Unit: 100 million yen)

FY2022Q2 Actual

FY2023Q2 Actual

YoY%

Progress rate
%

1,023

984

▲39

45.8%

Operating income

43

45

2

38.8%

Operating income
margin (%)

4.2%

4.5%

0.3％

Ordinary income

44

45

1

38.9%

Net income
attributable toowners of parent

37

33

▲4

43.9%

Net salesー

FY2023Full-year plan
(before revision)

2,150（2,150）

115

（107）

5.3%

（5.0%）

115

（106）

75

（70）

5

Key Points of the Financial Results for Q2Q2 YoY Change

Q2 Progress rate

The business plan for the current fiscal year is for lower revenues due to a bias
toward the second half of the year, but higher incomes due to solid performancein construction-related business.

Progress in sales and operating income was stronger than initialassumptions (H1: 30%, H2: 70%), which was biased toward the second halfof the fiscal year.

Net sales(Unit: 100
million yen)

Operating income

Down
3.8%
40

984

FY2023 2Q

Q2
Progressrate

Net sales

2,150

47.8%

45.8%

115※

43.1%

38.8%

30
20

43

45
Operatingincome10

FY2022 2Q

FY19-22
Avg.
progress
rate

Up
3.5%

50

1,023

(Unit: 100
million yen)

Full-year
Plan0

FY2022 2Q

FY2023 2Q*Incomes are upwardly revised figures.

6

FY2023 Q2 Change Factors (YoY)
Change factors for net sales
FY2022Q2+¥1.3 billion -¥1.1 billion
Effect of rise incopper prices¥102.3 billion[Change factors]-¥2.5 billion

Energy andInfrastructure
Business

Energy and Infrastructure Business: -0.8 billion yen
Electrical Equipment and Components Business: -0.4 billion yen
Communication and Industrial Devices Business: 0.1 billion yen-¥1.5 billion
Electronic
Equipment
andComponents
Business

Communication
and Industrial
devices Business

FY2023
Q2-¥0.1 billion
Others

¥98.4 billion

Foreign exchange impact:+0.1 billion yen

Change factors for operating income
FY2022Q2¥4.3 billion+¥0.2 billion-¥0.1 billion -¥0.6 billion+¥0.6 billion+¥0.1 billion
Absence of the
COVID-19
specialdemandIncrease in raw
material andenergy costs

Profitability

FY2023Q2Structural reforms

・Integration of
Increase in selling Improvement Effectproduction and sales
prices and cost
(Product portfolio operations to SFCC
reduction・Restructuring ofshift)
telecommunications¥4.5 billion

1. Net sales
As expected at the beginning of
the fiscal year, sales decreased
YoY due to an adjustment phase indemand for EV products and thedrop in pandemic-driven demand,
while projects were generally
weighted toward the second half ofthe fiscal year.
2. Operating income
Rising raw material and energy
costs are compensated for by
selling price pass-through and cost
reductions.
Income increased YoY due towithdrawal from unprofitableproduct lines and improved
profitability through structuralreforms.

7

FY2023 Q2 Segment Results
While the outlook is for the second half of the fiscal year to be heavily weighted toward the second half of the fiscal
year, as initially expected, construction-related businesses are expected to drive overall performance (accounting
for about 40% of the sales mix). Wire harnesses and precision devices, which are manufactured and sold mainly in
China and Vietnam, were affected by the drop in pandemic-driven demand, but the impact on overall sales waslimited (approximately 7% of the sales mix).
FY2022 Q2Results

FY2023 Q2Results(Unit: 100 million yen)
Net sales● Energy and Infrastructure
Business● Electrical Equipment andComponents Business● Communication and Industrial
Devices Business● Other
Total

539
299
164

Operating income(Income margin %)32(6.0%)

11(3.5%)

5(2.8%)Net sales

536
278
150

Operating income(Income margin %)33(6.1%)

9

Segment sales ratio
Other
2%

General-purpose
products
11%
Other
High-performance products
3%
High
performance
product oxygenfree copper
14%

Outer circle:
Segment
Inner circle: Subsegment(3.1%)

7(4.6%)

22

(４)

20

(４)

1,023

43

984

4.5

(4.2%)FY2023 Q2 Results

Construction
39%

Precision devices
3%
Wire harnesses
4%

Seismic isolation/ Others
2%

Communication
cables8%

Power
Infrastructure
14%(4.5%)

8

FY2023 Q2 Energy and Infrastructure Business
The second half bias in electric power construction will be offset by strong construction related business. Sales decreased and income
increased YoY due to various income improvement efforts, including the effect of integration of construction-related production bases.
Net sales

600(Unit: 100 million yen)300
230 258 266

263 281 270

0

536

Q1

Q2

Q3

60

Q4

(Unit: 100 million yen)
Income Improvement
Effects

Of which, structuralreform effects: approx.
100 million yen

14

17

Q1

12

16

16
Q2

21

FY2022

FY2023

300

66%

200

33

32

30

40

373

373

326

50

70%

69%

Concentration of electric power construction projects
in the second half of the year

24

100

26%

128

25%

137

26% 140

8%

40

5%

29

4%

10
Q3

Q4
FY2021

FY2022

30
20

25

19

80
70

493

400

Operating income

10

539

287 302289 293

FY2021

20

Operating income

500

0

30

Power Infrastructure

Seismic isolation / Others(Unit: 100 million yen)

200
100

Construction

FY20230

FY2021 Q2

FY2022 Q2

1022

FY2023 Q2

90

FY2023 Q2 Electrical Equipment and Components Business
Sales of general-purpose magnet wires for heavy electrical machinery remained steady. On the other hand, demand for products for EVs
was weak compared to the same quarter of the previous year, but left the adjustment phase, with revenue and incomes decreasing YoY.
Net sales

150
100
50

(Unit: 100 million yen)

143 155 1380

152 144 140Q1

146 161

Q2

145

Q3

20
38% 113

FY2022

FY202353%

158 14(Unit: 100 million yen)
High-performance products for EVs are expected to recoverfrom the adjustment phase

10

0

278

122

49%
9%

Operating income

8

299

295

Q4
FY20215

30High performance product oxygen-free copper
Other high-performance products
General-purpose products
Operating income(Unit: 100 million yen)

6

Q1

5

6

7
4
Q2

4

10%

37%

5

3

Q3

11

29

109

11%

31

9

10

54% 160
40% 110

1Q4

FY2021

26

137

FY2022

FY2023

FY2021 Q2

FY2022 Q2FY2023 Q2

100

FY2023 Q2 Communication and Industrial Devices BusinessWire harnesses and Industrial Devices were partially affected by the drop in pandemic special demand, but this was offset by increased sales of communication
cables, the reorganization of domestic production bases and the effect of reasonable price sales. Sales decreased and incomes increased YoY.
200
Net sales(Unit: 100 million yen)

90

69

Operating income

78

70

71

86

80

81

Q1

Q2

Operating income

95

75

Q3

9

(Unit: 100 million yen)
Of which, structuralreform effects:
approx. 60 million yen

Of which, structuralreform effects:
approx. 40 million yen

6
5

2
Q1

3

4

3
Q2

4

164

139

74

Q4
FY2022

FY2023

100

48%

67

34%
31%

8

Q3

0

Q4
FY2021

FY202229%

FY202329

FY2021 Q2

79

10

9
21%

20

55

44

5

5

73
53%

Expand sales of FLANTEC® for installation in
vehicles

4

30

150

FY20210

Precision devices

44%

0

3

Wire harnesses(Unit: 100 million yen)

60
30

Communication cables

43
7

22%

36

5

FY2022 Q219%28

FY2023 Q2

110

FY2023 Q2 Consolidated Results B/S（Comparison with the end of the previous year)(Unit: 100 million yen)

Total assets
Trade receivables
Inventories
Non-current assets
Total liabilities
Trade payables
Interest-bearing debt
Total net assets
EquityEquity ratio (%)
DE ratio (%)

FY2022

1,567
527
282
646

883

249
412

684

FY2023 Q2

1,518
482
293
616

811

241
340

707

Change[Inventories]

Inventories increased to secure stock in anticipation ofdemand growth in Q2 and beyond.

▲48
▲45
12
▲30

[Fixed assets]

▲71
▲7
▲72

Equity ratio increased 2.8 points from the end of theprevious period due to a decrease in total assets.

675
43.1

697
45.9

23
22
2.8

61.0

48.7

▲12.3

Investment securities were sold in accordance with thepolicy regarding cross-shareholdings and decreased.

[Interest-bearing debt]

Interest-bearing debt decreased due to the sale ofinvestment securities and a decrease in working capital.

[Equity ratio][DE ratio]

Interest-bearing debt decreased and shareholder equity
increased, resulting in a 12.3-point decrease from the endof the previous fiscal year.

<Recognition of current issues and future measures>
Although BS showed improvement due to various measures,
inventories increased due to the securing of inventory holdings
in anticipation of soaring raw material prices and demand
growth in Q2 and beyond. Continue to promote improvements
by ensuring inventories at appropriate levels and shortening
debt collection periods.

12

FY2023 Q2
Consolidated Results CF and Capital Investment<Consolidated cash flow>
Operating
CF(Unit: 100 million
yen)

150

Figures in < > indicates yearon-year increase/decrease
100

102

Free CF Financial Balance of cash
and deposits
CF

R&D

40

59

Rationalization and
ICT enhancement

▲ 10

▲ 26

3%

14%

Production Capacity
Expansion

24%

Capital Investment▲ 35

FY2023 Q2

1.8 billion yen＜+20＞＜+112＞＜+39＞＜+151＞△ 100
FY2022 Q2

3%FY2023 Q2

14

0

△ 150

Reduction of environmental
impact, etc.

116

38

50

△ 50

Investment
CF<Capital Investment >Reorganization and strengthening ofproduction bases, facility renewal

56%

▲ 98

＜▲136＞

Operating CF increased mainly due to a decrease in working
capital as a result of improved turnover of accounts receivable.
Investment CF increased due to the sale of policy stock holdings.
Financial CF decreased mainly due to repayment of debt.

Breakdown by Segment
Energy and Infrastructure Business Section

0.7 billion yen

Electrical Equipment and Components Business Section

0.5 billion yen

Communication and Industrial Devices Business Section

0.3 billion yen

Other

0.2 billion yen

13

2．FY2023 Full Year Forecasts

14

FY2023 Full-year Forecasts (After Upward Revision)
H1/H2 Net Sales(100 million yen)

1,200

FY2022 Result

FY2023 Plan

2,100

1,068

1,023

1,000

1,166

(100 million yen)
2,300

984

Full-year Net Sales

Ordinary Income

2,150

2,091

11.5 billion yen

Up
2.8%

1,900

(YoY: 10.6% increase)

1,700

800

H1

1,500

H2

(100 million yen)

H1/H2 Operating Income

120(100 million yen)100

FY2022 Result

FY2023 Plan

70

62
50

100

45

43

110

Net income
attributable toowners of parent
FY2022 Result FY2023 Plan

115
105
Up
9.8%

H1

H2

80

Recordincomes
expected(YoY: 20.3% decrease)

Dividend/
Payout ratio

75 yen/30%(YoY: 15 yen increase)

900

7.5 billion yen

Full-year Operating Income

FY2022 Result

FY2023 Plan

Interim: 35 yen, Year-end: 40 yen
Total: 75 yen

15Revision of full-year plan by segment
Progress in the first half exceeded initial projections due to steady construction-related demand. The full-year profit plan was revised upward in
anticipation of strong demand in the second half of the fiscal year.
(Unit: 100 million yen)

FY2023Results for the first half

Energy and Infrastructure BusinessElectrical Equipment and Components
Business

Communication and Industrial Devices
Business

FY2023

FY2023Full Year Plan

Full Year Plan

(Before revision)(After correction)

Variation

Net sales

536

1,135

1,200

65

Operating income

33

77

86

9

Operating income ratio (%)

6.1％

6.8%

7.2%

0.4%

Net sales

278

660

600

(60)

Operating income

9

15

18

3

Operating income ratio (%)

3.1%

2.3%

3.0%

0.7%

Net sales

150

305

305

0

Operating income

7

19

18

(1)

4.6%

6.2%

5.9%

(0.3%)

Operating income ratio (%)

16

FY2023 Recognition of Business Environment

Forecast

Operating profit

H1

H2

4.5 billion yen

7.0 billion yen(Initial plan: 3.5 billion yen)

(Initial plan: 7.2 billion yen)

35 yen40 yenDividend

Recognition ofBusiness Environment

Construction

Steady demand

Electric power

Second-half bias in power construction

Automobile
Industrial
Devices
Communication
New Business(ICT)

Demand for high-performance products for EVs was in an
adjustment phase in Q1, but gradually recovered from Q2.

Average for time of year
Concentration of electric power projects with strong demand,such as renewable energy system development
Sales expansion through increased production of SICONEX®
High-performance products for EVs are expected to recoverfrom the adjustment phase

Drop in pandemic special demand in the industrial device
business

Factoring in declining demand in China and Southeast Asia

Demand for high-grade LAN expands; FLANTEC® shipments forautomotive applications begin.

Expansion of overseas sales of e-Ribbon® and sales of
FLANTEC® for automotive applications

Average for time of year

ICT in full swing

17

FY2023 Factors for change
Sales Increase/Decrease Factors+¥0.2 billion+¥4.9 billion-¥2.9 billion+¥0.1 billion

Electrical Equipment andComponents Business+¥3.6 billion

Communication andIndustrial Devices
Business

Energy and Infrastructure
Business

FY2022

Sales are expected to increase due to¥215.0 billion¥10.5 billion-¥0.3 billion-¥1.1 billion

Drop in pandemic
special demand+¥1.1 billion

2. Operating income
Rising raw material and energy costs+¥0.2 billion
Structural reform・Integration of SFCC
production bases
Profitability
・Telecommunications
improvement effects(Product portfolio shift) reorganization

Rise in raw material and Selling price passthrough and costenergy costs, etc.
reduction

electric power sectors, despite a
to a drop in pandemic-driven demand.

Operating income increase/decrease factors

FY2022strong sales in the construction anddrop in sales of industrial devices due

Energy and Infrastructure Business Section 1.8 billion yen
Electrical Equipment and Components Business Section 1.7 billion yen
Communication and Industrial Devices Business Section 100 million yen+¥1.0 billion[Change factors]
1. Net sales

Other

Impact of Copper Price Fluctuation¥209.1 billion

FY2023+¥0.2 billion

FY2023

were compensated for by price passthrough. In addition to the effect of
profitability improvement andNew business(ICT)

structural reforms, income is¥11.5 billion

expected to increase due to the fullscale launch of new business (ICT).

18

FY2023 Business Plan by Segment
Electronic Equipment andComponents Business

Energy and Infrastructure Business
Construction

Electric power Infrastructure

Seismic isolation/others

Operating income（

High-Performance Product
Oxygen-free Copper
General-Purpose Products）Operating income margin

（

1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0

（Unit: 100 million yen, %）

100

1,200

1,133

90

782

822

86
(7.2)

77
(6.8)

294

315

57

63

FY2022

FY2023 E

Other High-Performance Products

Communication cables

Wire harnesses

Operating income

Precision Devices

Operating inome

600

581

291

80

400

254

70

300

52 (2.9)60
50

Copper price impact: Net sales up 1.8 billion yen+ Factor ●Profitability improvement through integration of
construction-related manufacturing and sales
businesses●Contribution to sales from investment inincreased production of SICONEX®

100
0

276

FY2022

30

600

500

200

（

）Operating income margin

700（Unit: 100 million yen, %）Communication andIndustrial Devices Business

17

64
245

FY2023 E（Unit: 100 million yen, %）

25

400

20

300

1815
(3.0)
10
5
0

Copper price impact: Net sales up 1.7 billion yen+ Factor●Recovery of high-performance products for EVs
in the second half of the year
●Demand for heavy electric machinery is strong- Factor ●Adjustment phase of high performance products
for EVs in H1）Operating income margin

30
333
158

200
100
0

305
20

18
(5.3)

103

159

18
(5.9)

87

71

59

FY2022

FY2023 E

100Copper price impact: Net sales up 100 million yen+ Factor ● Maximization of the effects of integrating
communication cable production bases● Elimination of China's lockdown- Factor ● Drop in pandemic-driven demand forindustrial devices

19

Energy and Infrastructure Business

Efforts to resolve labor shortages in anticipation of the 2024 problem
With the "2024 problem" of the application of overtime work hour caps looming on the horizon, the Company is promoting labor-saving, manpower-saving, andwork efficiency improvements.
Product

Universal Design Promotion

Skill-less connection method

Free-stripping outer conductor

The introduction ofuniversal design has madecable processing, whichconventionally required
skilled techniques, a skillless process.

Provide products that are easy to handle for the elderly and
women

Lowering ofproduct weight

We were the first in theindustry to review productweights based on theweight reduction needs
highlighted in a survey.

Persons

Sustainable Human Resource Education
Establishment of Construction Human Resource
Development Center

Simulated service
tunnelAVR®

Logistics

Promotion of Logistics DX

Visualization of optimum route and loading capacity

Secured excellent
human resources by
establishing an earlytraining program forengineers (utilization of
DX materials, simulated
facility training,knowledge acquisitionand on-the-job training).

Local consumption market model cloud human resource strategy

Human resources
trained at the above
centers are now
expandingnationwide, from
Hokkaido to Okinawa.
Enables flexible receipt
of orders.

SICOPLUS® Human Resource Cloud

DX of logistics system centered on subsidiary
LOGIS-WORKS. Promoting operational
efficiency in vehicle dispatch management by
sharing the delivery status of distribution centers
nationwide via cloud computing and smartphones.

20

Electrical Equipment and Components Business

Recovery in EVs related demand expected this fiscal year
Shipment Volume Trends by High-Performance Product Category(Estimated with pre-pandemic as 100)260%

● High-performance magnet wires
Thanks to demand from Europe, theincreasing trend has continued since Q1.

220%● Heater wire

Recovery trend toward the second half of the
fiscal year due to the elimination of backloggedinterim inventories and increased production of
EVs.

180%
140%
100%

● MiDIP®

Demand is expected to recover to prepandemic levels in H2 due to the resolution of
the semiconductor shortage and increased EVs
production.

60%
20%

MiDIP®
Heater wires
High-performance magnet wires

21

Communication and Industrial Devices Business

FLANTEC® product lineup by main industries and future growth projections
Expanding business performance in more profitable product areas by leveraging the Company's brand power and technological capabilities with 40% share of
the domestic LAN cable market.

Twisted pair cables for automotive use

The GIGA school concept has led to a significant increasein demand for 10-Gigabit transmission. In addition, therecent increase in communication capacity due to theadvancement of AI and IoT utilization has led to asignificant expansion of replacement demand.

Cat. 8 standard twisted pair cable for LAN
Stable electrical characteristics in the frequency band up to
2,000 MHz – four times that of Cat. 6A. High-speed,large-capacity transmission at 40 Gbps is possible.
Demand is expected to increase for future increases incommunication capacity.

180%
160%
140%
120%

About 2xState of emergency declaration

Cat. 6A standard TPCC® 6A (10 Giga coil)(Estimated with pre-pandemic as 100*)200%
Outbreak and spread of COVID-19

As driver assistance systems become more sophisticated,higher speeds are required in in-vehicle transmission
networks.
Developed twisted pair cables for automotive applications
that enable high-speed transmission. Shipment will
begin in H1.

Sales Growth Trends

1.8x
1.7x
1.5x

100%
80%

FY2019 FY2020 FY2021 FY2022 FY2023EFY2024EFY2025EFY2026E
Building sales

Industry

Mobility

Total* Mobility sales are estimated at 100 for FY2023, as they will be generated from FY2023.

22

FY2023
Consolidated Results CF Forecast and Capital Investment Plan
<Consolidated cash flow>
200(Unit: 100
million yen)
Figures in < > indicates year150
on-year increase/decrease

OperatingCF

Investment
CF180<Capital Investment Plan>

0
△ 50

R&D

135

42

＜▲10＞

6

＜+138＞

7%

14%

100
50

Reduction of environmental
impact, etc.

Free CF Financial Balance of cash
and deposits
CF

40

55

Rationalization and
ICT enhancement＜▲119＞＜+129＞
▲ 35
▲ 45

▲1

2%

FY202227%

FY2023
Capital Investment Plan

6.7 billion yen
Reorganization and strengthening ofproduction bases, facility renewal

＜+15＞
51%

△ 100
△ 150

Production Capacity Expansion▲ 120

FY2023 E

Operating CF in FY2023 will increase due to reduction of working capital
Investment CF will increase due to increased capital investment

Breakdown by Segment
Energy and Infrastructure Business Section

2.5 billion yen

Electrical Equipment and Components Business Section

1.8 billion yen

Communication and Industrial Devices Business Section

1.0 billion yen

Other

1.4 billion yen

23

3. Progress of “Towards Realization of Management that is Conscious of the Cost of Capital”

24Initiatives for Future Growth
SWCC Group Purpose
Innovating new ideas today. Becoming the norms of tomorrow.
In conjunction with changing the Company’s name, the Group formulated our Purpose which contains the message of"responding to the changing times and creating new value.”
We will contribute to the creation of a sustainable and better future through our business.

Create sustainable "corporate value" and "shareholder
value" based on the Purpose

Aiming to promptly achieve ROIC of 10% or more, PBR of 1x or more, and adividend of 120 yen or more, with a lower limit of 10% for ROE.
Business Strategy

Financial Strategy

Non-Financial Strategy● Promotion of businesses that solve social issues
and optimization of business portfolio● Overall financial and capital strategy● Promotion of human capital strategies● Investment strategy and shareholder
return policythat support sustainable growth● Contribution to a decarbonized society

25

Measures and share price trends after the May disclosure of "Towards Realization of Management thatis Conscious of the Cost of Capital"
May 12(Yen) Disclosure(times)

1

2,400

2,300

Stock prices

0.95

PBR

2,200

1,800

2023年5月15日

9/29 Integrated Report publishedMay 15, 2023

0.65

2023年6月15日

June 152023年7月15日

July 152023年8月15日

August 15

2023年9月15日 2023年10月15日

September 15

October 15

Explain the Group's future growth strategy to investors. Archived on the Company website.

0.85

0.7
1,900

Plan Rolling" held

9/11 Sale of Policy Shareholdings

0.75

2,000

9/4 Briefing session on “Key Points of Medium-Term Management

0.9

0.8

2,100

Major initiatives after May 12 disclosure

0.6

Sold some of the Company's policy holdings and reduced its consolidated net
asset ratio to less than 10%.

Discloses the Group's business activities and sources of value creation with a focus
on non-financial information.

11/2 Resolution to pay interim dividends
Resolved to pay a dividend of 35 yen per share of common stock (full-year
dividend of 75 yen planned).

11/2 Initiatives to improve capital efficiency and enhance shareholder
returns through share repurchases

A portion of the funds acquired through capital efficiency improvement
measures (sale of policy shareholdings) will be returned to shareholders.

11/2 ESOP introduction initiatives
Introduced to enhance the welfare program for employees and to provide
incentives to enhance the medium- to long-term corporate value of theGroup.

26

Analysis of Current Situation (1):Changes in Profitability Improvement through Structural Reforms Based on Capital Efficiency
Profitability, ROE and ROIC have improved steadily since the introduction of ROIC and the start of structural reforms in FY 2019.
Reorganization of major domestic production bases andwithdrawal from unprofitable businesses

ROE(%)FY2019: SWCC SHOWA UNIMAC made a wholly-owned subsidiary
FY2020: TAMAGAWA MAGNET WIRE merged into SWCC SHOWA UNIMAC
Sold the rubber wire business
Dissolved DAIJI
FY2021: Transferred the anti-seismic and anti-noise business to
SHOWA SCIENCESHOWA RECYCLE merged into LOGIS-WORKS
Reorganized the domestic production bases for communication cables
and dissolved AOMORI SHOWA ELECTRIC CABLE
Sold the Ebina Factory
FY2022: Integrated SFCC’s construction-related manufacturing and sales
businesses<Profit Improvement Results>

FY2020

Cumulative
total

FY2021

FY2022

1

1

2

3

3

Integration of anti-seismic and antinoise businesses
Integration of SFCC’s manufacturing
and sales operations
Rationalization of magnet wirebusiness
Shifting wire harness businessoverseas
Reorganization of communication
cable production bases

3

3

3

9

5

7

7

19

3

8

11

Total (Unit: 100 million yen)

8

14

22

44

ROIC(%)

30
20

12.3
7.4

10

5.4

0

Introduction of ROIC
Start of structuralreforms

13.5

7.3
14.7

7.6
17.7

6.3

8.0
15

7.1 7.0
6.0

11.4

5.6

5.0
4.0

3.6

-10

3.0

-20
-30
-40

2.0

-29.5

1.0

0.7
FY2015FY2016FY2017FY20184-year average before introduction

3.8%

FY2019FY2020

FY2021

FY20220.0

4-year average after introduction

7.1%

27

Current status analysis (2): Market valuation transition and decomposition of PBR factors
PBR ratios are rising as profitability improves, but are still below 1x recently. In addition, the market is expected to have a low evaluation of theCompany's growth potential based on the level of PER.

Market capitalization, equity capital, PBR

PBR factor decomposition(Millions of yen)(times)80,000Growth rate

1.20
1.02

70,0000.94
0.86

60,000

0.96

0.91

PER
8.49x

1.00

Cost of shareholders'equity

0.84

0.76

0.76

PBR
0.91x

0.80

50,0000.60
40,000Financial leverage

0.60

30,0000.40

Stock prices
2,129 yen

ROE
10.8%

Net profit margin on
sales

20,0000.20

10,0000

0.00
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Q2
Market capitalization

Equity capital

PBR

2Q

BPS
2,331 yen

Total asset turnover* Share prices are closing prices on September 29, 2023.
* All indicators are based on the balance at the end of September.
However, profit ratios are the figures announced for the full year.

28

"Business Strategy" Promotion of businesses that solve social issues and optimization ofbusiness portfolio
We aim to generate further profits by promoting concentrated investment in growth-driving and core businesses and by promoting the structural reform of the businesses. We will
also develop businesses for new markets and domains based on our core technologies. We will expand our business through open innovation, internal ventures and M&A.

Large
Progress

Progress

Introducing AVR® forconnection work
personnel training
Adoption begins in
TaiwanProgress

Start partnerships withlocal companies

Market growth potential
Small

New market and new domain
business

Growth-driving businesses

Including M&A as
growth investment

Decarbonization-related

Smart Stream

Electricity Infrastructure Business

For mobility and semiconductor markets(SICOPLUS®)

Developing new markets and new domains for

EV Business (high-performance magnet wires)

Progresswire harnesses

Expected to complete
investment for production
increase in H2

Progress

Restructured businessCore business

Improve capital efficiency

social infrastructure

Improved
profitability throughDX implementation

Progress

Construction-related business (SFCC’s coated wires)

General-purpose magnet wires and wire

Communication cable (FLANTEC®)

rods

e-Ribbon® BusinessBusiness profitability

Start shipments of FLANTEC®
for automotive applications in
H1

Large

29

"Financial Strategy" Overall financial and capital strategy
Measures

Index

Strengthen earning power
and CF creative capacity
through ROIC management

Our aspirations
PBR1 morethan 1x

Streamlining the balance sheet
and building an optimal capital
structure

Cash Allocation

Value Creation

Evolution into a highly
profitable company

ROIC 10% or more
ROE 10% or more
D/E 50% or lessStability ofmanagement base

Dividend 120 yen or more

Enhancement ofshareholder returns

30

"Financial Strategy" Investment Strategy and Shareholder Return Policy
Appropriately allocate generated cash to the strengthening of core businesses, growth investment in newmarkets and business domains, and returns to shareholders.
Cash generation

Cash Allocation Strategy

5-year period from FY2022 to FY2026

Business investment

Generation of operating
cashflow

Investment in businessenhancement and DX with afocus on growth-driving
businesses

Sale of policy shareholdings
Reduction of non-businessassetsWorking capital reduction

Growth investment in newmarkets and business domains

Shareholder Returns

Stable and sustainable dividends

Human capital and R&D
investment31

Non-Financial Strategy: Promotion of Human Capital Strategies that Support Sustainable Growth◪ Diversity Management

Evaluation by external organizations● From a "Women's Participation Promotion Project" to a "Diversity

Eruboshicertification basedon the Law for the
Promotion of
Women's Successas stipulated by
the Ministry of
Health, Labour andWelfare.

Promotion Project”
・ The project, which was launched in April 2021, has added male members from
April 2023 to promote efforts to raise awareness of unconscious bias.
● Extend the retirement age and introduce an optional retirement system

・ Creation of an environment in which experienced and seasoned
employees can work with confidence.

Operating income per employee and number of employees◪ Increase engagement

10,000● Expand systems to match the needs of the Company and employees

8,000・ In order to realize the placement of the right person in the right job, the job challenge system andinternal recruitment system will be expanded and enhanced.

● Establish a compensation system that encourages challenges
・ Transition to a compensation system that more appropriately reflects the efforts and achievements of
employees who take on challenges.

● Creating a comfortable working environment
・ Promotion of teleworking and flexible work hours. Introduced health promotion app and thanks points.

ｂ

Recognised as an
excellent healthcompany under the
excellent healthcompany recognition
system organised by
the Ministry of
Economy, Trade andIndustry and theJapan Health Council.

284
235 249

9,000
7,000

198

6,000

132 148

5,000

4,757 4,494

4,000

growth

300
phase
250
200

176
All employees (persons)

150

Operating income per employee (10,000 yen)

4,352 4,319 4,280 4,201

4,043

100
50

3,000
2,000

Further

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023E

0*Number of people in FY2023 estimated as at end-September 2023.

32

Non-Financial Strategy: Contribution to a Decarbonized Society
We aim to achieve carbon neutrality by 2050 by implementing various measures, including the introductionof renewable energy at domestic manufacturing sites, promotion of procurement of non-fossil energy,
introduction of high-efficiency and energy-saving equipment using new technologies, and reduction ofmaterial-derived emissions through cooperation with suppliers.
CO2 emissions

Renewable energy
introduction ratio(%)

CO2 emissions
Renewable energy introduction ratio(t-CO2 /year)

80,000<Road Map to Carbon Neutrality by FY2050>

FY2022 Results

100%*Compared to FY2013

90%

70,00037% CO₂
reduction*

60,00045% CO₂
reduction*

50% CO₂● Increase the installation rate of renewable energy at
production sites● Introduce energy-efficient manufacturing equipment● Develop and commercialize new technologies such as
superconductivity applications● Increase the number of registered environmentallyfriendly products● Consider the introduction of internal carbon pricing

50,00040,000

Domestic Scope 1 & 2

30,00020,000

80%
70%
60%
50%
40%
30%
20%
10%

FY2025

FY2030FY2050

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050

FY2022

renewableenergyintroduction

renewableenergyintroduction

renewableenergyintroduction

0
FY2013

40%

30%

6%

10,000<Details of Initiatives>

reduction*

Endorsement of TCFD
Recommendations

0%

Achieve carbon neutrality

Material-derived
emissions arehighest.
In cooperation with
our suppliers, wewill strengthen
reductions in the
future.

33

https://www.swcc.co.jp

The forward-looking statements in this presentation are based on information available at the time of publication and involve potential risks and uncertainties.
Therefore, please be aware that a variety of factors could cause the actual results to differ materially from those projected in the statements.
Such factors that may affect actual results include economic conditions, demand trends, and fluctuations in raw material prices and exchange rates.
Factors that may affect business performance include, but are not limited to, the following.