SWCC Group Report
Integrated Report

SWCC SHOWA HOLDINGS CO., LTD.

All for the Trust

M a nag e m ent Philo so p hy

“The SWCC Group strives to be trusted”● The SWCC Group will strive to earn the “trust” of our customers through high technology and high quality products and services.
● The SWCC Group will, through healthy business activities, create corporate values that will earn the “trust”
of the employees, customers, shareholders and the local community.

● The SWCC Group will, by complying with all applicable rules and regulations and through the prioritizationof safety and the regional environment, conduct “trustworthy” activities.

Mi s sion St a t e m ent“Creating for the Future”
The SWCC Group will create new value for a better future.

● We will create products and services that will earn the trust of our customers.
● We will create earth environmentally friendly products.

● We will create corporate values that will earn trust through healthy business activities.
SWCC G roup M a nag e m ent Po licy
The SWCC Group has established and worked on the following management policies to achieve our management philosophy,“The SWCC Group strives to be trusted.”
1. T he SWCC Group shall give top priority to its customers and develop and provide them with products, technology, andservices that are beneficial for society, environmentally friendly, good quality, and safety conscious, and contribute to
the development of society.
2. The SWCC Group shall comply with all applicable domestic and foreign laws and regulations and act in accordancewith social norms based on ethics.
3. The SWCC Group shall create a bright and pleasant working environment and enhance the autonomy and willingnessof employees based on respect for human dignity.
4. The SWCC Group shall conduct corporate activities based on fair, transparent, and free competition, and secure
appropriate profits.
5. The SWCC Group shall maintain sound and normal relations with politics, government, and the local community.
6. The SWCC Group shall disclose corporate information in a timely and appropriate manner to conduct public relations
activities for its shareholders as well as for the public at large, while strictly managing the acquisition, use, anddisclosure of information.
7. The SWCC Group shall recognize that working on environmental issues is an essential requirement for corporate
activities, and strive to create an affluent and healthy environment.
8. T he SWCC Group shall conduct corporate activities in a sensible manner and respond to anti-social forces andorganizations with a resolute attitude.
9. The SWCC Group shall, as a member of the international community, strive to conduct corporate activities andcontribute to society, while respecting local cultures and practices.

01

SWCC Group Report

Takayo Hasegawa
President and Group CEO

SWCC Showa Holdings Co., Ltd.

Greetings

We will carry on corporate activities
grounded on trust and take on thechallenge of further value creation.
Amid constant and drastic changes in the business environment, we at the SWCC Group
have been steadily implementing our growth strategy based on the mid-term
management plan. Our ideas and current business status, as well as future outlook, areexplained in this interview.
<<Acting on the management philosophy and mission statement>>

Focus on trust as a condition for the company to live on
I assumed the position of President in June 2018, and this is
my third year in the office. Ever since taking office, I havemade it a rule to visit all production sites and offices acrossthe country every year after the Shareholders’ Meeting,discuss management policy and business plans with frontline
employees, and send them messages. While our business is
expected to face difficulties due to the COVID-19 pandemic,
my message this year was to return to the management
philosophy at difficult times.
Our management philosophy states, “The SWCC Group
strives to be trusted,” and we have adopted “All for the Trust”
as our slogan. In both phrases, the keyword is “trust,” whichshows our focus on the concept as a condition for the Groupto live on.
Electric wires and cables are the main products the SWCC
Group manufactures and offers to society. Electric wires andcables are the key parts that support electric power, which is
the most important infrastructure essential for people’s lives
and all industries. The Group serves everyone who uses
electric wires and cables, the whole of society. Our
responsibility is to be a company that can always be trusted
by engaging in healthy business activities and, not tomention striving to maintain the quality of our products tomeet the trust of society.
Not only electric power infrastructure but also seismic
isolation products that protect buildings from earthquakes
and cable products that support advanced technology in theautomobile and medical care fields involve human lives. We
are always aware of the great responsibility associated withthe production and supply of such products. At the sametime, I would like our employees to be proud of thesignificance of the existence of our business to society.
While maintaining a trusted relationship with society, we needto create new value toward a better future and keep moving
forward, instead of staying in the same place. The idea is
embodied in our mission statement, “Creating for the Future.”
By creating new value through products that contribute tofurther development of client companies and conservation of
the global environment, we intend to enhance our corporate
value and share a prosperous future. The statement reflects
such a stance of the company, and indicates our willingness
to keep evolving to gain further trust in response to thechange of times.

SWCC SHOWA HOLDINGS CO., LTD.

02

A Strategy to Hone Trust and Technology to Achieve Growth

As the late Peter Drucker, known as a management guru,
said, “Change or die,” we would be following a path todeterioration and not be able to carry on our business if webecome complacent and fail to carry out constant reform.

Without being bound by past achievements, we will tap into
potential opportunities by broadening our horizon and aiming
for products and solutions with greater added value.

<<Current business environment and overview of fiscal 2019>>

The three pillars of the SWCC Group’s core businesses areconstruction, communication, and electric power. To take an
overview of the current business environment, theconstruction field is returning to its usual state after the
expansion of demand toward the Tokyo Olympic andParalympic Games, which had been scheduled for 2020.
While we continue to expect a certain level of demand for theGroup’s electric wires for buildings and seismic isolation
products, the challenge lies in how we should reform thebusiness to improve profitability as the demand peaks out.
The electric power field continues to expand, supported by
the robust demand for electric power infrastructureassociated with promoting national resilience. The Groupaims to satisfy the needs for various types of electric wire
relevant to the initiatives and strengthen its business modelwith an eye on the renewable energy interconnection
business for decarbonization.
Despite high expectations for the launch of 5G services,demand in the communication field is likely to take time toexpand, with the rivalry between the U.S. and China castinga shadow on the market. Meanwhile, society needs to adopt
the new normal to prevent the spread of COVID-19, ascompanies allow employees to work from home, theschedule for implementation of the GIGA School Concept
driven forward by the Ministry of Education, Culture, Sports,
Science and Technology is moved up, and medical
institutions offer telemedicine services. This is where growing
needs for the improvement of the communication
environment exist. Communication cables and LAN cables
manufactured by the Group are expected to serve thepurpose in response to the increasing capital investment.

Amid the accelerating changes in the business environment,
the Group has been working on a variety of internal reforms
in recent years to enhance adaptability to changes. The
largest of such reforms was the reform of our organizational
structure, where the company reorganized vertical reportinglines which had been based on product lines. Since fiscal
2019, they have been based on the business segments ofenergy and infrastructure, communication and industrial
devices, electrical equipment and components, and new
business operations. At the same time, new organizational
structures based on business segments were introduced in
20 subsidiaries as well. Establishing vertical reporting lines inall companies and shifting from a group management
structure centered around each company to that based on
business segments have enabled us to create a highly
flexible organization and realize more efficient and unified
business operation. Head office departments were also
strengthened to horizontally manage the business segments.
As a result, our consolidated operating results for fiscal 2019saw a substantially greater increase in profit than planned at
the beginning of the term, despite a decrease in net sales
due to the fall in copper prices. Robust performance of theenergy and infrastructure operations and improved
profitability of the communication and industrial devices
operations contributed to the increase.
In addition to the improvement in operational efficiency
achieved through the internal reforms described above, eachand every working-level employee’s understanding of thechallenges that lay ahead to achieve profit growth and thefact that they carried out their work from the management’s
perspective with an eye on operating income margin and
ROIC (return on invested capital) can be considered a driving
force for the favorable results.
As part of business portfolio restructuring in fiscal 2019, we
acquired 100% ownership of Unimac Ltd. (renamed as
SWCC Showa Unimac Ltd. as of October 1, 2019), a joint
venture with Fujikura Ltd., through stock acquisition to
upgrade the organizational structure in the Group for

Overview of Business Reform in 2019

Net Sales/Operating Income (against the previous term and plan)

Group management basedon business segments

Energy and Infrastructure BusinessE stablished a new distributor of general-purpose electric wires forconstruction through joint investment with Furukawa Electric
Decided to sell the rubber wire businessCommunication and Industrial Device BusinessT ransformed the structure of the wire harness business (decision toliquidate Daiji and expansion of business in China)
R eorganized the sites for precision devices (enhancement of domestic
development functions and relocation of production to overseas sites)

Electric Equipment and Component BusinessR eestablished the organizational structure of the company that deals withmagnet wires in response to the shift to environmentally friendly vehiclesD rove forward improvement of production efficiency in response toincreased demand for MiDIP®

New and Other Businesses

Changed the organizational structure of development departments
Started building a smart factory utilizing ITE nhanced new product development in the healthcare field, where more
IT has been introduced

03

SWCC Group Report

Net sales

Operating income(100 million yen)

2,000

1,800

150

1,771

1,730

86

1,600

1,400

66

65

1,200

1,000

1,711

120

90

60

30

Results for
FY2018Initial plan for
FY20190

Results for FY2019
the term ended March 2020

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Greetings

enhanced profitability of the electrical equipment andcomponents operations. In addition, we established Showa
Furukawa Cable Co., Ltd. (began operations on April 1,
2020), a joint venture with Furukawa Electric Co., Ltd., andlaid the foundation for future business expansion by merging
and expanding sales departments in charge of generalpurpose electric wires for the construction and electricalappliances markets.

<<Progress of the mid-term management plan and future outlook>>

impact on the communication field is relatively small.
Nevertheless, some products, such as those for copiers, arelikely to be affected due to temporary disruption of overseas
customers’ supply chains. In fiscal 2020, we expect to see anapproximately 30% decrease in operating income year on
year, based on the assumption that the business will bottom
out in the first quarter and gradually recover from the second
quarter, but the impact will remain until the fourth quarter.
The Group’s core businesses, however, are highly stable,with the three pillars of construction, communication, andelectric power. We believe we can further strengthen
profitability by transforming our operations. In addition,
temporary decrease in construction demand in fiscal 2020and subsequent recovery have been incorporated in the plansince the start. While the COVID-19 pandemic has had anegative impact on the current results as opposed to theachievement in fiscal 2019 that was better than expected, weplan to achieve the targets for the final year of the plan bygetting back on the recovery track from fiscal 2021 as initiallyintended.
Meanwhile, cumulative investment from fiscal 2020 to 2022
of 16 billion yen or more, laid out in the plan, will be made as
we take the impact of COVID-19 pandemic into
consideration. The Group will continue to steadily growoperating cash flow; improve its financial structure by
reducing interest-bearing debt, optimizing the DE ratio, andincreasing the equity ratio; and make necessary investment
for growth to achieve results.
During the remaining three years of the mid-term
management plan, we are determined not only to strengthen

Overcoming the COVID-19 pandemic
with the aim of achieving the targets
We achieved the initial profit target set in the current “Change
SWCC2022” mid-term management plan ahead of schedulein fiscal 2018, the first year of the plan. Taking into accountthe transition to a new organizational structure based on
business segments, we then formulated a rolling plan startingfrom fiscal 2019. The basic policy of the plan states,“strengthen profitability of core businesses,” “create new
businesses,” and “new development of overseas business.”
By implementing the policy, we aim to achieve net sales of
200 billion yen, operating income of 10 billion yen, operating
income margin of 5% or over, and ROE of 10% or over inconsolidated operating results for fiscal 2022.
As stated above, the results for fiscal 2019 saw a
substantially greater increase in profit than planned at the
beginning of the term, and our operating income margin has
already reached 5%. Despite the successful start toward theachievement of the final year targets, we expect to see adecrease in profits in fiscal 2020, the second year of therolling plan, in light of the impact of the COVID-19 pandemic.
It was extremely difficult to predict how the pandemic would
impact the Group’s business. While it has a large impact on
the construction field with delays in construction works on thefrontline and cutting back and review of investment plans, theChange SWCC2022 Measures

1

Strengthen profitability of core businesses

Business structural reformImprove profitability and stabilize production by strengthening
domestic production systems
Business profitability assessment
Improve return on invested capital by introducing ROIC managementD eal with low-margin businesses and withdraw from unprofitablebusinesses
	Promote centralized purchasing and development purchasing
through group procurement
Build Smart Factories utilizing AI and IoT

2 Create new businesses	Create new businesses by Group-wide production, sales, andtechnology project teams
	Develop new products by creating core competencies andelemental technologies and identifying needs
	Promote DX* solutions based on IT technology cultivated bymanufacturer-affiliated IT companies

3 New development of overseas business	Expand the wire harness and electronic wire business and thecopper and magnet wire business
Strengthen the Overseas Governance System*DX stands for Digital Transformation/Digital Innovation.

Contribute to sustainable development of society
through supporting public infrastructures
Mid-Term Management Plan “Change SWCC2022” FY2022 Target
Net sales

200

billion yen

Operating income ROE
Operating income margin

10

billion yen

5% or over10% or over

Mid-Term Management Plan Numerical Target (KPI)(100 million yen)

FY2019Results
1,711
86
78

FY2020
FY2022 Mid-Term
Plan
Management Plan
1,620
2,000
60
100
55
95

VISION
2026
2,100
150
150

66

100

Net sales
Operating income
Ordinary income
Net income attributableto owners of parent
Operating income margin

54

40

5.0%
3.7% 5% or over 7% or over
15 yen15 yen 50 yen or over 120 yen or overDividend/Payout ratio(8.2%)(11.2%) (Approx. 20%) (Approx. 35%)
Interest-bearing debt
423
385 380 or under 300 or under
DE ratio*
107%
90% 70% or under 40% or under
Net assets
400
435 550 or over 800 or overEquity ratio
32.3%
35.0% 38% or over 50% or over
ROE
14.7%
9.7% 10% or over 10% or over
ROIC
7.3%
5.1% 7% or over 9% or over*Debt-to-equity ratio is calculated based on shareholders’ equity.

SWCC SHOWA HOLDINGS CO., LTD.

04

A Strategy to Hone Trust and Technology to Achieve Growth

profitability of core businesses as mentioned above but also
to steadily advance initiatives for the next step forward,
including overseas relocation of production facilities for wire
harnesses and copier parts; enhancement of theorganizational structure of development functions for new
businesses, such as those related to mobility; and making
the Ibaraki Factory a smart factory initiated and led by young
employees.

<<Long-term growth strategy toward FY2026>>

Targeted sales compositionby market

Optimize sales composition
to improve income margin
In the mid-term management plan, we set out “SWCCVISION 2026,” a longer term growth strategy toward our 90th
anniversary in fiscal 2026. This long-term vision defines theideal state the Group should achieve by 2026 as “a company
that can adapt to the environment and maximize corporate
value” and clarifies directions toward the achievement,
consisting of MISSION, VISION, and VALUE.
In SWCC VISION 2026, the current mid-term management
plan is positioned as the second step for growth throughstructural reform. The next mid-term management plan for
the four years from fiscal 2023 will be the third step toward
the realization of stable growth. Under this long-term growth
process, we are determined to both fulfill our social mission
and achieve stable growth toward fiscal 2026.
Strengthening profitability of core businesses and ensuring ahealthy financial structure, which we are currently working on
through the mid-term management plan, will be thefoundation for stable growth that the long-term vision aims at
and will enable us to invest in the expansion into new
business fields. Specifically, we focus on the automobile andindustrial equipment fields and new businesses. SWCCVISION 2026 aims to achieve net sales of 210 billion yen
and operating income of 15 billion yen (operating income
margin of 7%) in consolidated operating results for fiscal
2026. In the portfolio of sales composition, we intend toincrease the automobile field to 25%, the industrial
equipment field to 20%, and new business to 5%.
In the industrial equipment field, our main focus will be on the
medical related market, which is expected to expand. There
are a lot of medical related businesses the Group would be
able to engage in, such as medical robot and disposable

VISION 2026

FY2026FY2018Net sales: ¥177.1 bn
Operating income:¥6.6 bn(Operating income
margin: 4%)

FY2022
Net sales: ¥200 bn
Operating income:¥10 bnNet sales: ¥210 bn
Operating income: ¥15 bn(Operating income
margin: 7%)(Operating income
margin: 5%)

M&A
Automobile
Electric power

14%
17%

Construction
41%
Communication 6%
Industrial equipment 20%
New business
2%

Automobile
Electric power

20%
15%

Automobile
Electric power

Construction
42%
Communication 5%
Industrial equipment 15%
New business3%

Construction
30%
Communication 5%
Industrial equipment 20%
New business5%

product businesses and introduction of advanced IT and DX
to healthcare facilities.
We aim to expand business in the automobile field by taking
advantage of processing technologies for oxygen free copperand copper alloy wire, where our strength lies; meeting thedemand for in-vehicle products for EVs and hybrid cars; andexpanding into downstream areas.
Expansion in the IT field will be the prime focus in new
business operations. In cooperation with AXIO Corporation,
which offers DX solutions in the Group, we will offer products
and services that support a wide range of industries, such as
RPA & AI, next-generation infrastructure, and integrated
certification core operations.
By increasing the proportion of these fields in sales
composition, we aim to reduce relative dependency on thethree pillars of our core businesses (electric power,
construction, and communication fields), optimize portfolio
balance, and improve income margin to achieve operating
income of 15 billion yen (operating income margin of 7%).

New businesses: Expansion of IT business

MISSION

VISION

VALUE

Contributing to people’s
lives with supporting
society with trusted
products and services

Becoming a growing
company that creates
added value through theGroup’s strengths

Discovering customer
needs with “quick,”“passion,” and “thought
and action”

Energy andInfrastructure
Operations

Communication
and Industrial
Devices
Operations

Focus on core technologies

Electrical
Equipment andComponents
Operations

Promote active participation ofdiverse human resources

RPA & AI Operations

Automation of not only routine work but also non-routine work
- Speech recognition and AI-OCR utilization
Integration with full-scale AI system and self-reliant system
Utilization of digitalized business systems

ID

Data collection and analysis using IoT sensors
Utilization of various big data
Next-generation infrastructures and services by 5G and WiFi6

SWCC Group Report

RPA

Security
WiFi6
& 5G

AI
IoT

50% increase in sales

Integrated Certification Core Operations
New Business
Operations

Production Innovation with IT
technology

New user information management for threats and convenience- Cloud certification measures- Biometric certification and SSO
New certification needs- Managing access to IoT devices- RPA scenario control management*DX stands for Digital Transformation/Digital Innovation.

05

Cloud

Promotion of DX* solutions

Next-Generation Infrastructure Operations

Change SWCC2022

25%
15%

FY2018FY2022

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Greetings<<Toward the realization of a sustainable society>>

Toward the promotion andstrengthening of ESG/CSR
management
The SWCC Group established the CSR Promotion
Department in 2019 to reinforce the implementation of ESG/CSR management and responses to the SDGs theme, whiledeveloping a system to ensure that they are promoted
throughout the company.
As f or environmental measures, we have promoted
environmental management based on the international standard
ISO 14001, as our duty as a manufacturer, to implement
measures to reduce CO2 emissions and waste, and saveenergy and resources. We have newly established ourenvironmental plan “Green Plan 2050” to set medium- to longterm goals. We will manage our environmental indicators
toward the achievement of zero environmental impact ultimately
in 2050 while taking measures to prevent global warming andmaking effective use of resources and water resources. Goingforward, in the “procurement reform” which is being promoted
mainly by the Procurement Division, we plan to go beyond justreducing energy costs and carry out procurement that takes
into account our suppliers’ environmental responses.
As for solving social issues and contributing to society, theGroup’s business supports electric power infrastructure and thus
benefits society greatly. We recognize that fulfilling our
responsibilities as a company through the supply of products
such as electric wires and cables is the basis of our relationships
with society. Our Group’s products also realize various types ofsocial value, directly and indirectly, in the form of supporting ourcustomer companies’ businesses. We will continue to focus ourefforts on creating new value, including superconductivity
technology currently under research and development, tocontribute to affluent living and industrial development.
Within the Group, we try to create a working environment
where each employee can make the most of their ability to play
an active role and grow together with the company, through theintroduction of human resources development programs andnew personnel systems, work style reform, and promotion ofdiversity. These efforts of our Group have won high external
acclaim, including acquisition of the “Kurumin certification,”
which targets companies that support child-raising, andcertification as a “Health & Productivity Management
Outstanding Organization 2020 (large enterprise category).”
With regard to strengthening corporate governance, wetransitioned to a company with an audit and supervisorycommittee in 2019 to enhance our governance system. In
addition, we are implementing reforms to improve thetransparency and soundness of management and theeffectiveness of governance, and to contribute to increasing
corporate value, including increasing the number of outside
directors and establishing the Nominating Committee and theCompensation Committee.
Going forward, we will further develop our ESG/CSR
management to contribute to the realization of a sustainable
society by linking our business activities to the SDGs themes,
identifying materiality (key issues), and other initiatives.

<<Building relationships with stakeholders>>

Taking on the challenge ofcreating totally new value
The SWCC Group is engaged in corporate activities rooted
in “trust” as we provide the world with wires and cables that
support electric power infrastructure and seismic isolation
products that protect buildings from earthquakes, in line withthe management philosophy and mission statement
described earlier. Our attitude of living up to that “trust” andcontributing to society through our business activities will
never change in the future.
However, our efforts go beyond just providing safety andsecurity. We will keep on challenging to create totally newvalue by transforming ourselves for the future and executing
a number of initiatives. And we will continue to exist as acompany that can grow, develop, and share future prosperity
together with all of our stakeholders. As a manager, I would
like to proactively communicate our thinking on such changes
both inside and outside the company to convey widely what
the SWCC Group is thinking about and what directions weare aiming at.
In the past, there were times when our business performance
was sluggish and we could not adequately return profits toour shareholders. In our long-term vision “SWCC VISION
2026” and our mid-term management plan “Change
SWCC2022,” we have set numerical targets for the amountof annual dividends and dividend payout ratio, and we arecommitted to increasing the return of profits to ourshareholders. We are determined to provide greater social
returns through the creation of shared value thatsimultaneously realize corporate and social values.
I hope that all of our stakeholders will look forward to the
future growth of the SWCC Group and will continue tosupport us for many years to come.

SWCC SHOWA HOLDINGS CO., LTD.

06

A Strategy to Hone Trust and Technology to Achieve Growth

Financial Highlights Scope of data: SWCC Showa Holdings Co., Ltd. and its consolidated subsidiaries
Net sales

Operating income/Operating income margin(100 million yen)

2,000■Operating income

Operating income margin (%)

1,697
1,500

1,552

1,682

1,772

86

1,711
80

1,000

2.7%

500

20

9
2015

2016

2017

2018

2019

0

0.6%

2015

2016

2017

Net income attributable to owners of parent/ROE

Invested capital/ROIC■Net income attributable to owners of parent■Invested capitalROE (%) (100 million yen)

100

20

ROIC (%)

(92)

46

37

13.5%

12.3%

7.4%

55
14.7%

900

7.3%
5.4%

850

812

-50

2015

807

2016

■Total assets ■Shareholders’ equity

2017

2018

2019

2018

2019

3.6%

700

2015

2016

2017

Shareholders’ equity ratio (%) (100 million yen)

■Research and development expenses ■Capital expenditure (100 million yen)
50

1,231

1,195

1,235

1,242

1,225

42

40

40

34

32
900

07

817

Research and development expenses/
Capital expenditure

1,500

0

817

0.7%

Total assets/Shareholders’ equity/
Shareholders’ equity ratio

300

5.6%

750

(29.5)%

600

2019(100 million yen)

892

800

1,200

2018

950

50

-100

5.0%

3.8%

3.7%

42

40

0

66

63

60

0

(100 million yen)

100

20.6%
254
2015

SWCC Group Report

23.6%

26.6%

282

329

2016

2017

28.1%

32.3%

29

30

20

349

2018

396
10

2019

0

10

9

10

11

2015

2016

2017

2018

13
2019

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Financial/Non-financial Highlights

Non-financial Highlights
Number of employees

Number of female executives■Domestic ■Overseas(Persons)

7,000
6,000

(Persons)

15

5,879

5,000

5,824

5,513

2,294

2,463

5,356

5,461

2,194

2,009

2,097

4,000
3,000

12

3,530

3,416

3,347

3,364

3,319

12

11

9

6

2,000

11

6

7

3

1,000
0

2015

2016

2017

2018

2019

0

2015

2016

2017

2018

2019

Scope of data: SWCC Showa Holdings Co., Ltd. and its consolidated
subsidiaries

Scope of data: SWCC Showa Holdings Co., Ltd. and SWCC Showa
Cable Systems Co., Ltd.

Number of non-Japanese employees (domestic)

Percentage of annual paid leave taken(Persons)

35
30

(%)

80.0

29

70.0

25

25

26

26
22

60.0

56.0%

56.8%

2015

2016

67.7%

70.0%

2018

2019

60.8%

50.0

20

40.0
15

30.0

10

20.0

5
0

10.0

2015

2016

2017

2018

2019

0

2017

Scope of data: SWCC Showa Holdings Co., Ltd. and SWCC Showa
Cable Systems Co., Ltd.

Scope of data: SWCC Showa Holdings Co., Ltd. and SWCC Showa
Cable Systems Co., Ltd.

Greenhouse gas emissions

Industrial waste landfill rate
(Thousand ton-CO2)

80.0
70.0

72.4

(%)

3.0

68.9

65.2

64.5

60.0

58.6

2.33%

2.5
2.0

50.0
40.0

1.29%

1.5

30.0

1.0

20.0
0.5

10.0
0

2015

2016

2017

2018

Scope of data: Production sites of domestic Group companies

2019

0

0.19%

0.16%

0.08%

2015

2016

2017

2018

2019

Scope of data: Production sites of domestic Group companies

SWCC SHOWA HOLDINGS CO., LTD.

08

A Strategy to Hone Trust and Technology to Achieve Growth

SWCC Group’s Growth Strategy

Energy and Infrastructure Business Segment
Business Overview

Electric power infrastructure field

We provide total solutions for electric power infrastructure system networks, from generation to transmission and distribution ofelectricity, including power cables and equipment, as well as their installation and maintenance. In particular, in the area of power
equipment products, we propose downsizing, reduction of environmental impact, shortening of construction period, and laborsaving by capitalizing on the features of SICONEX®, our unique brand, to differentiate ourselves from our competitors andcontribute to the stable supply of energy.

Construction wires field

We offer a wide variety of wires and electrical products for construction, from low-voltage general-purpose wires that are essential
for electrical wiring inside buildings to fire-resistant cables that supply power to fire prevention equipment in the event of a fire. We
provide these products and services in response to our customers’ requests by making full use of our nationwide distribution
network. In the future, we will continue to meet our customers’ needs while promoting business efficiency to respond to the
expected decrease in construction demand in the medium- to long term.

Seismic isolation and vibration control field

We offer seismic isolation devices and vibration control products that are necessary to ensure people’s safety and minimize
damage to buildings and infrastructure networks at large sites in Japan, including skyscrapers, hospitals, and distribution
warehouses, in the event of an earthquake. We will continue to contribute to improving urban resilience by leveraging ourtechnologies for vibration control and rubber molding that we have cultivated over the years.

Basic Strategies

Strengthen Profitability of Core Businesses

In the electric power infrastructure field, we will expand our business by capturing demand for initiatives for building national
resilience and widespread use of renewable energy, as well as enhancing our construction capabilities and new technology,
with our focus on SICONEX®.
In the construction wires field, we will strengthen our profitability by increasing our market share and efficiency through theestablishment of Showa Furukawa Cable Co., Ltd., a joint venture sales company with Furukawa Electric Co., Ltd.
We will improve our competitive strength by integrating the fields of seismic isolation and vibration control as well as
strengthening partnerships.
We will shift our management resources to higher-margin businesses through selection and concentration of businesses.

Main Products and ServicesL ow-voltage wires andcablesH igh-voltage power
cablesE lectric power equipment
and cable accessoriesP ower cable insulationworks
O verhead transmission
and distribution lines
B us ductsF ire-resistant cablesS eismic isolation devices

09

SWCC Group ReportFeatured ProductFeatured ProductFeatured ProductDirect molded typeoutdoor termination

Seismic isolation devices

Fire-proof cables

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

Communication and Industrial Devices Business Segment
Business Overview

Communication infrastructure field

We provide communication cables and other manufactured products that are indispensable in the information and communication
field, where technological innovation is rapidly advancing toward higher speeds and greater capacity. We support the informationsociety that evolves day by day by offering a wide range of products for information and communication networks, from opticalcables for long-distance communication between cities to LAN cables for short-distance communication within offices.

Wire harnesses and wires for equipment field

We provide wire harnesses and electronic wires used in the internal wiring for home appliances and other products. These
products are important components that are likened to human nerves and blood vessels, and we are expanding our business inthe home appliances and electronic equipment markets in China and Southeast Asia, where demand is expected to grow in the
future, through joint creation with our customers.

Precision devices field

We mainly offer roller products that are installed in the image fixation unit of office equipment including copiers and printers. Roller
products are key parts of the image fixation section. We are expanding our business globally together with our partners atdomestic and overseas manufacturing sites by utilizing our new product development capabilities that make full use of the precise
processing technology and rubber technology we have cultivated over the years.
Basic Strategies

Strengthen Profitability of Core Businesses

Optimizing our domestic telecommunication cablemanufacturing sites and developing and expanding
sales of high value-added products
Improving the efficiency of sites in the wire harnesses
field within the GroupNew Developments of Overseas Business

Expanding manufacturing sites for wire harnesses andprecision devices (China and Vietnam)
Establishing a development site in the wire harnesses field
Strengthening cooperation with partner companies in the
precision devices field

Communication and industrial devices net sales ratio by site
Domestic sites

Overseas sites

32%

27%
FY2018FY202273%

68%

Main Products and ServicesO ptical fiber cables

Featured ProductFeatured ProductFeatured ProductO ptical connector devices

Slotless optical fiber
cables

Bending- and oil-resistantCat.6A industrial LAN cables

Ink supply tubes for
inkjet printersM etal communication
cablesE lectronic wires andFactory Automation cables
L AN cables

Example of 4 fiber rollable-ribbon

Single core shape

Bonded partW
 ire harnessesC opier rollers and belts

4-core shape

SWCC SHOWA HOLDINGS CO., LTD.

10

A Strategy to Hone Trust and Technology to Achieve Growth

Electrical Equipment and Components Business Segment
Business Overview

Bare wires field

We manufacture conductors used for wires and cables for the infrastructure market and core wires for magnet wires used in
automotive parts and electronic devices. We also have the technology to process and manufacture copper-silver alloy wires into
ultra-fine sized wires. Copper-silver alloy wires combine the advantages of both silver and copper in terms of high electrical andthermal conductivity. These wires have high strength, high electrical conductivity, and high flexibility, and we are expanding ourbusiness in the markets of the automotive and medical care fields with these wires.

Magnet wires field

SWCC Showa Unimac Ltd., a wholly owned subsidiary of SWCC, is expanding its business as the only comprehensive
manufacturer of magnet wires in Japan that offers fine to thick sized wires, and supplies products to a wide range of markets
including the heavy electrical market, in-vehicle market, and electronic devices market.
The automotive market is expected to experience a rapid shift to environmentally friendly vehicles (hybrids and electric vehicles).
Given this backdrop, there is a growing demand for electrification and electronification. In this field, we are working to develop
materials that improve heat resistance and to improve quality stabilization manufacturing technology to meet the demand for highefficiency and high-reliability magnetic wires in the on-vehicle market.
Basic Strategies

Strengthen Profitability of Core Businesses

Improve efficiency by restructuring the domestic magnet
wire business
Increase earnings by increasing production of highgrade wire rods and developing high-performancemagnet wires to meet the growing in-vehicle demand
Proactive use of open innovation to develop thedownstream strategy of adding processing technology tothe high-performance oxygen-free copper MiDIP® andcopper alloy wires

New Developments of Overseas Business

Global development through cooperation with overseas
partners
Commercialization of fine magnet wires using high-grade
wire rods (oxygen-free copper and copper alloy wires)

Forecast for annual sales of environmentally friendly vehicles
HEV

PHEV

(1,000 cars)

EV

30,00025,00020,00015,00010,000
5,000
0

2012

2014

2016

2018

2020

2022

2024

2026

2028 2030 Year

Sources: Created based on our own forecasts using various data

Main Products and ServicesH igh-performanceoxygen-free copper(MiDIP®)F
 ine flat enamelled wiresC opper-silver alloy wiresS uper heat resistantmagnet wiresL itz wires

11

SWCC Group ReportFeatured ProductFeatured ProductFeatured ProductHigh-performance oxygenfree copper MiDIP®

Fine flat enamelled wires

Copper-silver alloy wires

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

New Business Segment
Business Overview
Since its establishment, the SWCC Group has cultivated coretechnologies, focusing on the electric wire and cable business,
including the materials technologies and metal and resin processing
technologies used in that business, and the design and evaluation
technologies required for electric power and telecommunications
infrastructure. We have consistently engaged in the research anddevelopment of superconductivity technology which is already inpractical use in medical MRIs and other applications.
At the moment, with the practical application of 5G communications
and the widespread use of compact and high-performance sensors,
the mobility field, including automobiles, the smart industry field witha focus on factory automation, and the smart infrastructure field areentering a period of major change. We will capture the needs forthese technological innovations and speedily propose solutions to
support a more comfortable, safe, and secure lifestyle by utilizing
recently developed AI and IoT technologies. At the same time, we
aim to develop the core competencies of the SWCC Group throughthese activities.

Metal materials
Organic materials

AI

IoT

Core technologies
Conductor
processing
technology
Resin molding
technology

MIElectrical design
High voltage/
insulation
High frequency
wave

Open
innovation

Basic Strategies

Mobility field

Mobility

With the advancement of automated and connected driving, the amount of
in-vehicle sensors is increasing, and the amount of wire harnesses used isalso on the rise. We develop and propose thin and high-strength alloy wires
and high-speed communication cables for processing sensor signals athigh speed and without delay to meet the needs for lighter and thinner wire
harnesses and high-speed communication.

Automobiles (EV), railway vehicles, bicycles, drones, unmanned transport

Smart infrastructure

Smart industry field

We are considering providing wiring materials that support high-speed andlarge-capacity networks that are indispensable for telemedicine andmedical information systems, and for high-definition medical imaging
systems used in operating rooms that are becoming more sophisticatedwith 4K/8K resolution. In addition, we are developing technologies for
products required for robotic medical care, robotic nursing care, andadvanced medical equipment to realize next-generation healthcare.

Automotive high-speed communication cables

5G, data centers, energy systems, superconductivity

Smart industry

Industrial, medical, office equipment

Superconducting application systems
Triaxial superconducting
cablesOn-site liquid nitrogen
Cold Evaporator(CE) tank

Liquid nitrogen
circulation

Receives power fromthe on-site main line

Terminal

Liquid nitrogen supply

Low heatpenetration
current lead

Distributes power to the on-site
system or load
Intermediate
joint

Triaxial
superconducting cable

Terminal

Compressor
Nitrogen gas is returned to the on-site gas line

Heat
exchanger

Vacuumpump

11 kV class triaxial superconducting cable systemapplicable to in-plant power distribution

SWCC SHOWA HOLDINGS CO., LTD.

12

Efforts to Build a Business Foundation

SWCC Group’s CSR Efforts
CSR Basic
PolicyOn the axis of “trust” stated in our management philosophy, we aim to realize a sustainable society andimprove corporate value based on our accumulated technologies and experience in the business.
We at the SWCC Group state as the first item of the management policy, “The SWCC Group shall give top

Solutions forSocialProblems

priority to its customers and provide them with products that are beneficial for society, environmentally friendly, good quality and safety conscious, and contribute to the development of society.” Accordingly, we are contributing to solving social challenges through our business activities to boldly achieve our social mission.
The SWCC Group links the CSR policy to the 17 SDGs and rolls out a variety of initiatives to contribute tosustainable development of the environment and society through business activities.

ESG

7 Core Subjects of ISO
26000

CSR Basic Policy (Priorities)

CSR Policy in the Mid-Term Management Plan

Contribution to environmental protection and sustainablesocial development through business activities
Reduction of CO2 and VOC emissions

E(Environment)

Environment

Effective utilization of resources
Promotion of environmentally friendly productdevelopment and commercialization

Expansion of environmentally friendly products and contribution tosociety through products

Action for biodiversity

Expansion of action for biodiversity

Human rights

Promoting diversity to incorporate various perspectives
Promotion of employee work-life balanceand creation of a comfortable working
environment

Labor practices(Social)Enhancing the mental and physical health of employees and promoting a work-life balance
Creating a comfortable working environment by offering a wide rangeof working styles
Continuously improve productivity by automating operations andsaving labor

Promotion of safety and hygiene activities

S

Achievement of targets based on the Group’s voluntary environmental
action plan

Promotion of proactive safety measures and elimination of occupational accidents
Continuous customer satisfaction surveys and feedback on our
response

Consumer issues

Continuous improvement of the effectiveness of the quality management system

Continuous efforts to improve quality and achievement of quality cost
targets
To strengthen monitoring of the quality status of each Group company

Community involvementand development

Contribution to environmental protection and sustainablesocial development through business activities

Fair operating practices

Maintenance of and emphasis on goodcommunication with stakeholders(Governance)

G

13

SWCC Group Report

Organizational
governanceContinuation and expansion of activities to actively engage with local
communities and become a reliable manufacturer
Communication with clients through CSR Procurement Guidelines
Appropriate disclosure of financial information and enhancement of
disclosure of non-financial information

Thorough compliance

Thorough legal compliance and strengthening of monitoring functions

Strengthening of cyber security measures

Establishment and operation of a cyber security system

Management and reduction of criticalrisks in business activities

Risk reduction activities and improving effectiveness through business
continuity management (BCM)

Improvement in transparency throughinformation disclosure

Continued compliance with the Corporate Governance Code andimprovement of its effectivenessEstablishment of Information Disclosure Guidelines and information
disclosure

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s CSR Efforts

The SWCC Group sets annual targets based on the CSR policy and

Identificationof Priority
Issuesevaluates the level of achievement for each fiscal year.
In fiscal 2020, we will engage in CSR activities by identifying priority issues from among the items with higher priority in societal demand andour own targets.
The SWCC Group is a registered Kanagawa SDGs Partner.

Numbers in the table indicate 169 targets of the SDGs.

<<Level of achievement>>: Achieved: Partially achieved

Relevance to SDGs

Level ofachievementin FY2019
11.6
12.4

6.4

13.2

12.2
7.2

9.4

12.5
12.5

4.7

5.4

8.5

3.8

14.1

15.3
15.4

10.3

8.5

9.4

7.1

9.1
9.5

12.8

11.3
12.4

16.6

17.17

16.4
16.5
16.4
13.1

16.6
16.7
16.6
16.7

SWCC SHOWA HOLDINGS CO., LTD.

14

Efforts to Build a Business Foundation

Efforts to Conserve the Environment

Environmental Management
Basic Idea
Based on its management philosophy to comply with laws and regulations, prioritize consideration for safety and the global environment, and expand its activities to earn trust, the SWCC Group establishes its environmental philosophy, as well as annual environmental policy and priority topics, and makes a group-wide effort to engage in environmental conservation activities.

Environmental Philosophy
The SWCC Group recognizes that it is a mission for the Group as a corporate citizen to pass on our precious Earth to
the next generation in a healthy state, strives to conserve the environment through all business activities, and contributes
to building a society capable of achieving sustainable development.

FY2019 Environmental Policy

1. Compliance with laws, regulations and other requirements
We not only comply with laws, regulations, ordinances, and other requirements but also strive to conserve the environment by setting
stricter voluntary management standards.
2. Continuous improvement of the environmental management system
We objectively assess the impact of business activities, products,
and services on the environment and continuously improve the environmental management system.
3. Improvement of environmental performance
We set priority topics and strive to improve the environmental performance of the entire SWCC Group.
4. Enhanced education and awareness building
We enhance education and awareness building to raise the environmental awareness of each employee.

FY2019 Priority Topics forEnvironmental Conservation
1. Promotion of activities for global
warming prevention
2. Promotion of effective use of resources
3. Enhanced management of chemical substances
4. Expansion of environmental contribution products
5. Conservation of biodiversity

Organizational Structure for Promotion of Environmental Management
Environmental management of the SWCC Group is promoted
under the Group management council, and our CSR Promotion Department, which serves as the environmental supervision departments, rolls out to each Group company throughthe Environmental Management Working Group.
The Group’s environmental policy is developed by the CSR
Promotion Department, deliberated by the Environmental Management Working Group, and decided by the Group management council. The CSR Promotion Department periodicallyreviews the Group’s environmental management activities,
sustains and improves the entire Group’s environmental management, and drives forward environmental management activities in accordance with business areas of each Group
company and regional characteristics of each site.

SWCC Group Management Council

SWCC Showa Holdings Environmental Supervision Departments (CSR Promotion Department)
Environmental Management Working Group
Chairperson: Officer in charge of environmental management and supervision,
Secretariat: CSR Promotion Department
Each Group Company, Site Environmental Management Committee

SWCC Showa Cable Systems (Head Office, Sagamihara, Mie, Sendai, Ibaraki, Aichi, Ebina, Watarida)
SWCC Showa Unimac (Sendai) Fuji Electric Cable AXIO SDS SFCC

Operating departments of each company

ISO 14001 certification

Eco Action 21 certification

Year and monthof certification
Head Office, Sagamihara Plant, Ibaraki Factory, Ebina Factory Nov. 1997

Year and monthof certification
AOMORI SHOWA ELECTRIC CABLE CO., LTD. Oct. 2006

Sendai Office

Sep. 1998

STEC (SHOWA TECHNICAL CORPORATION)

May 2005

Mie OfficeNov. 1998

SHOWA RECYCLE CO., LTD.

Apr. 2005

Aichi Factory

Sep. 1999

FUJI ELECTRIC CABLE CO., LTD.

Dec. 1999

SWCC SHOWA UNIMAC LTD. SENDAI FACTORY

Mar. 2001

SWCC SHOWA (VIETNAM) CO., LTD. (SVC)

Mar. 2008

JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD. (JSIP)

Oct. 2004

DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD. (DSIP)

Jan. 2009

FUQING SHOWA PRECISION ELECTRONICS CO., LTD. (SSD)

May 2008

FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD. (FSH)

May 2013

Overseas

Domestic

Group company name

15

SWCC Showa Holdings Board of Directors

SWCC SHOWACABLE SYSTEMS
CO., LTD.

SWCC Group Report

Group company name

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Efforts to Conserve the Environment

Medium- and Long-Term Environmental Targets
Environmental Plan “Green Plan 2050”
The SWCC Group has embarked on a medium- and long-term environmental plan to create a sustainable society, which includes
commitment to the Paris Agreement and contribution to the SDGs. The keyword is zero environmental impact in 2050, and effective use of water resources has been added to global warming prevention and effective use of resources included in the past voluntary action plan. In addition, specific targets for 2030 have been set for each item to realize the long-term vision for 2050.

Zero environmental impact

CO2 emissions
Final disposable volume
Water consumption and wastewater volume

2050

2030
2026

2022

Long-Term Vision (2050)
Global warming prevention
 Realize products that do not emit
CO2 or carbon neutral products C r e a t e p r o d u c t s t h a t r e s o l v eenvironmental issues

120
100

Effective use of resources80 Promotion of sustainable use ofresources A c h i e v e m e n t o f “ 0 ” f o r f i n a ldisposal (landfill amount)

60
40
20
0

Effective use of water resources
Baseline year

2022

2026

2030

 P romotion of sustainable use ofwater resources

FY

TopicsDBJ Environmentally Rated Loan Program
The SWCC Group obtained the highest rating in the DBJ Environmentally Rated Loan Program offered by Development
Bank of Japan Inc. (DBJ) as a company “with exceptionally advanced environmental initiatives.” The Group obtained financing as of January 31, 2020, based on the program.
In the rating, DBJ highly regarded our initiatives in the corebusiness to realize a society with low environmental impact, efforts to establish sustainable supply chains, establishment of
the new business segment to facilitate the development oftechnologies and businesses that contribute to medium- andlong-term solutions for social problems, and efforts to develop
relevant human resources.

At the environmental rating awarding ceremony

Efforts highly regarded by DBJ
Promotion of steady environmental management
Promotion of environmental management as the entire Group through the Environmental Management Committee
Constant activities to promote environmental awareness by utilizing opportunities at the biannual Showa Improvement Activity Presentation
Establishment of good relationships with local communities at each site and constant and active environmental conservation activities
Efforts for thorough legal compliance and permeation of such efforts
Real-time environmental monitoring at each major facility and efforts to improve energy use efficiency by visualizing environmental impact
Efforts for expansion of environmentally friendly products
Identification of environmental contribution products, clarification of numerical targets for registration, and promotion of efforts for expansion
Review of the segment structure to reestablish business foundations and expand growing and new businesses, including meeting moredetailed customer needs
SWCC SHOWA HOLDINGS CO., LTD.

16

Efforts to Build a Business Foundation

Relations with Society

Supplier Relations (Procurement Guidelines)
Basic Idea
The SWCC Group develops its Procurement Policy and endeavors to establish a good cooperative relationship with suppliers toprovide a stable supply of value-added products.

SWCC Group Procurement Policy
The SWCC Group shall:
1. Comply with all applicable laws and regulations along with appropriate social practices, as well as engage infair and equitable transactions.
2. Give top priority to mutual trust with its suppliers and establish a relationship where each is the best partner
for the other.
3. Appreciate stable quality and delivery times, with continued efforts to reduce costs and a constant capacity
for technological development.
4. Procure earth conscious materials.
5. Never accept any inappropriate favors from suppliers.

Development of CSR Guidelines for Supply Chain
Based on societal demand, we put together the basic idea of social responsibility that should be fulfilled together with suppliers
and our requests as the CSR Guidelines for Supply Chain.
We request our suppliers to understand the intended meaning of the guidelines and actively promote CSR. In fiscal 2020, we
will conduct surveys on the status of efforts made by suppliers to familiarize Group members with the Guidelines, and proceedwith efforts to establish sustainable supply chains. We are also requesting our suppliers to carry out activities defined in theguidelines when engaging in product/service procurement and transaction.

Training on Subcontracting Transactions
As part of establishing a good cooperative relationship with suppliers,
we conduct a training session on the Subcontract Act for our Group
companies’ personnel in charge of purchasing. This session has been
conducted on a continuing basis. The session in fiscal 2019 was entitled “Thinking about aspects of the Subcontract Act and examples oftransactions in a question-and-answer format”. It took place 15 times intotal at companies and sites. In this way, we can promote sound andequitable procurement activities as well as ensure thorough dissemination of corporate obligations and prohibitions.
Training on subcontracting transactions

17

SWCC Group ReportA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society

Shareholder and Investor Relations
Information Disclosure Policy
To be a company correctly understood, evaluated, trusted, and sympathized with by all stakeholders, including shareholders andinvestors, the SWCC Group has developed the Disclosure Policy to actively disclose information.
The Group discloses information in accordance with the Financial Instruments and Exchange Act, as well as the Rules on Timely Disclosure of Corporate Information by Issuers of Listed Securities (hereinafter referred to as the “Timely Disclosure Rules”)
established by the Tokyo Stock Exchange. In addition, information that affects investment decisions by shareholders and investors is actively disclosed on a constant basis in accordance with the Group’s “SWCC Group Rules on Information Disclosure,”even if the information is not subject to the Timely Disclosure Rules. We strive for fair and timely information disclosure by avoiding selective disclosure of unpublished important information to a specific institution or individual.

Organizational Structure for IR
In the SWCC Group, the executive officer responsible for the corporate planning department also serves as the executive officer
in charge of IR.
Led by the executive officer in charge of IR, dedicated IR staff in the corporate planning department serve as the contact personnel and exchange information and routinely cooperate with finance and accounting, legal, and CSR departments as necessary. The Group thus strives to enhance dialogue with shareholders and investors.

Dialogue with Shareholders and Investors
The SWCC Group convenes the Ordinary General Meeting of Shareholders in June and hears shareholders’ opinions. The Group also
strives to distribute financial information and press releases throughnewsletters for shareholders and the website.
For investors, briefing sessions for analysts are held and videos are
distributed twice a year (at the end of the second quarter and fiscal
year). In addition, the Group strives to facilitate communication betweena larger number of investors and our management by holding small
meetings four times a year (every quarter).
The 124th Ordinary General Meeting of Shareholders

Briefing session for analysts

SWCC SHOWA HOLDINGS CO., LTD.

18

Efforts to Build a Business Foundation

Employee Relations (Human Rights, Employment)
Efforts to Support the Development of the Next Generation
In light of Japan’s rapidly declining birthrate, and in accordance with the Act on Advancement of Measures to Support Raising Next-Generation Children, which was enacted to develop an environment where children who will lead the next generation of society are bornand raised in good health, the SWCC Group has created an environment that supports
employees in raising children who will lead the next generation, and has established a variety of systems to help them balance work and child-rearing.
Among the companies that formulated an action plan for business owners in accordancewith the Act on Advancement of Measures to Support Raising Next-Generation Children,
those that have achieved the targets in the plan and fulfilled certain standards will obtainthe “Kurumin” mark, a certification from the Minister of Health, Labour and Welfare, as acompany that supports the raising of children. Following the acquisition of the “Kurumin”
mark by our Group company AXIO Corporation in 2018, SWCC Showa Cable Systems
Co., Ltd., one of the main business companies of the SWCC Group, also obtained themark in 2020.
The company’s action plan for business owners is as follows.
The 7th Action Plan for Business Owners (for FY2019, FY2020)* We promote male employees’ participation in childcare (remind everyone that male employees can take childcare leave)* We expand the requirements for the use of accumulated leave (extension of the applicable period of leave to care for a child)* We expand the requirements for the use of accumulated leave (approval of the use of accumulated leave to see a doctor
for patients with cancer or designated incurable diseases)

Efforts for Health and Productivity Management
Health and productivity management is a new management initiative that aims to improve
corporate value and business performance by giving consideration to the health of employees. The concept of the initiative is to consider health management from a management
perspective and strategically put it into practice.
Managing and improving the health of employees can lead to the enhancement of the company’s competitive strength through improvement in labor productivity and in employees’
creativity by securing a healthy and stable workforce. Thus, the SWCC Group is proactively
working on health and productivity management.
Specifically, we have formulated the Group’s health management declaration and announced it on our website. We have established a group-wide health management organization system, including strengthening cooperation with the SWCC health insurance
association, to identify issues. Based on that, we are working on various initiatives including provision of health guidance, measures against passive smoking, infection prevention
measures, measures against excessively heavy labor, and measures to address mental
health issues. In recognition of these efforts, SWCC Showa Holdings Co., Ltd. and SWCC
Showa Cable Systems Co., Ltd. have been certified as a Health & Productivity Management Outstanding Organization 2020 (large enterprise category) jointly selected by the
Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi.
This certification is to honor corporations that are practicing particularly good health management by “visualizing” good corporations engaging in health and productivity management, withthe purpose of creating an environment where corporations are recognized socially by employees, job applicants, related companies, financial institutions, and others as a corporation that is
strategically engaging in health and productivity management initiatives for maintaining its employees’ health from a management perspective.
The SWCC Group’s FY2019 initiatives are as follows.
[Promoting provision of health guidance]
We have tried to improve our employees’ health through measures including provision of health guidance, based on the results of reexaminations and close examinations after regular health checks.
[Efforts on work style reforms]
We have promoted measures including building an environment that is comfortable to work in and supporting the balance
between home and work to improve work life balance.
[Change in awareness to improve health]We will encourage self-care for each individual and line care for executives to create a healthy and safe working environment where they are sound in mind and body and can work with peace of mind.
19

SWCC Group ReportA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society

Education and Training Systems
The SWCC Group operates an education and training system based on the idea that employees’ power is the company’s power,with the aim of developing human resources who can solve all sorts of problems with a wide range of knowledge and abilities toact, who can flexibly adapt to a rapidly changing social environment, and above all, who are trusted by our stakeholders.
The training program common to all departments of the SWCC Group is divided into the following three areas.
Rank-based training
The rank-based training is provided for new employees, mid-level employees, chiefs, and supervisors. For new employees,
mid-level employees, and chiefs, a wide range of matters including knowledge, attitudes, and skills required for them tomove to the next level are incorporated into the educational menu.
For those in the rank of supervisors, training is provided for them to enhance their knowledge and skills related to organizational and human resources management.
Selective training
In order to achieve future growth of our Group, we have expanded our selective
training programs in recent years, especially to develop human resources who willtake charge of future management.
We provide candidates who will lead the next and subsequent generations with the
Next-Generation Development Training, Management Game (MG) Training, and Business English Improvement Program using resources outside the SWCC Group. In addition, we position the “SD Seminar” (S: Showa, D: Departure, Director), which has
been operated since fiscal 2017 as a place for reforming the Group’s corporate culture, fostering a sense of belonging to the Group, and strengthening individual capabilities, as a place for the development of young employees (in the rank of chiefs).

SD Seminar

Liberal arts training
It is also important to raise the level of the Group as a whole through the training of individual employees, and we attach importance to training for the betterment of each individual as well.
Specifically, we provide employees with opportunities to participate in externally held sales training courses mainly for young
sales representatives and offer specialized knowledge acquisition courses in which former employees of the SWCC Group
give lectures on electricity, production technology, and materials.

Diversity Management
The SWCC Group aims to be an organization that flexibly accepts and capitalizes on diverse personalities of employees suchas different attributes and working conditions. We recruit diverse human resources with different backgrounds.
As the labor shortage is expected to worsen due to the decline in the workforce, we will further work on measures to strengthen
our organizational capabilities while taking advantage of our diversity.
Senior employment program
While Japan’s birthrate is declining and its population aging, we operate our senior employment program to provide workplaces for those who are willing to keep working after retirement. This program offers post-retirement employees a variety ofwork styles, such as full-time work allowing them to work for the same length of time as regular employees and short-timework including working fewer hours and days.
People aged from 60 to 65 cannot receive a pension under the amended Employees’ Pension Scheme. We have raised thisgroup’s salaries for the period since fiscal 2018 as a way to maintain and improve their motivation, ensure stable manpower,
and ensure that our technology gets passed down to a new generation.
Reemployment program for former employees who retired for childbirth, childcare, and nursing care
We operate a program to rehire former employees at their request who had no choice but to leave the company due to an
event in their lives such as childbirth, childcare, and nursing care. We are very hopeful that they can make use of the experience and skills they have acquired prior to their retirement.

SWCC SHOWA HOLDINGS CO., LTD.

20

Efforts to Build a Business Foundation

Corporate Governance
Basic Idea
Based on our management philosophy, in which the keyword is “trust”, our basic policy for corporate governance is to conduct
activities with the recognition that speeding up and streamlining management as well as enhancing relevant monitoring functions
are universal challenges for all companies.
The SWCC Group is committed to actively developing a system required to ensure appropriate operations of the Group while
fulfilling its corporate social responsibility (CSR).

Current System
We adopt the system of a company with an audit and supervisory committee as part of our organizational design. The purposeof this adoption is as follows.
By delegating substantial decision-making authority for the execution of business operations to the executive directors,
we aim to increase the efficiency and speed of business execution.
Based on the above , at the meetings of the Board of Directors, we will further enhance the deliberations on important
themes such as management strategy.
The Audit and Supervisory Committee will play a central role in strengthening the auditing and supervisory functions.
Corporate Governance System Diagram
Shareholders’ Meeting
Enhance supervisory function through the establishment of the Nominating
Committee, Compensation Committee, and Audit and Supervisory Committee
Board of Directors (Holding Company)
ReportAudit andsupervise

Nominating Committee Compensation Committee

Risk Management Committee

Audit and Supervisory Committee

Supervise

Recommend

Audit

President and Representative Director (Holding Company) (Group CEO)
Audit Control Division

Compliance/riskmanagement

Internal
audit
Accounting Auditor

Group Management Council (Executive Officers Meeting)Speed up and streamline business execution by reviewing business segments, and strengthening and enhancing the executive officer system
Corporate Executive
Officer

Executive Officer in charge ofEnergy and Infrastructure
Operations Coordination

In charge of Business Strategy &Coordination and Investment Strategy
In charge of Administration Departments
In charge of ICT / Cybersecurity
In charge of Corporate Planning, Public
Relations / IR
In charge of Overseas BusinessIn charge of Construction and Electrical
Appliances, Logistics Reform, and Sales
Coordination
In charge of General Affairs, Legal
Affairs, Human Resources, Human
Resources Development, and Group
Procurement
In charge of Accounting and FinanceElectric wires, power
cables, electric power
equipment,
engineering,aluminum wires,
electric materials forequipment, seismic
isolation equipment,
vibration control andisolation, etc.

Executive Officer in charge ofCommunication and Industrial
Devices Operations
Coordination

Strengthen Group business management and internal
controls by enhancing cooperation with Group companies

Communication
cables, opticallyprocessed products,
electric wires forequipment, wire
harnesses, precision
devices, etc.

Executive Officer in charge ofElectrical Equipment andComponents Operations
Coordination

Audit
Magnet wires, barewires, oxygen-freecopper, copper alloy
wires, etc.

SWCC Group ReportElectric wires forautomobiles, medical,
factory automation,and network field

Businessmanagement

Core operating companies
SWCC Showa Cable Systems, Co., Ltd., SWCC Showa Unimac Ltd., Fuji Electric Cable Co.,
Ltd., AXIO Corporation, SDS Corporation, Showa Furukawa Cable Co., Ltd.

21

Executive Officer incharge of New Business
Operations Coordination

Other domestic and overseas
Group companies

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Corporate Governance

Board of Directors FY2019 Held 19 times

President

Purpose and authority

InsideOutsideComposition
4 directors

To deliberate and decide on matters regarding the management policies and businessexecution of the company and its Group companies, and supervise to ensure that theexecution of directors’ duties is duly and efficiently conducted.

3 directors who are Audit andSupervisory Committee members

Audit and Supervisory Committee FY2019 Held 12 times
Purpose and authority
To audit and supervise the execution of directors’ duties through monitoring andverification of the internal control system and effective cooperation with an accounting
auditor, the internal audit department, and other departments, in accordance with theaudit policy and plans set forth by the Audit and Supervisory Committee.

Composition
3 directors

Nominating Committee FY2019 Held 12 times
Purpose and authority
To deliberate the nomination of candidates for directors, executive officers, and others,
and succession planning and other plans, and return a report based on consultation

Composition
3 directors

with the Board of Directors.

Compensation Committee FY2019 Held 10 times
Purpose and authority
To deliberate the determination of the remuneration system and program and individual
remuneration amounts for directors, executive officers, and others, and return a report

Composition
4 directors

based on consultation with the Board of Directors.

Risk Management Committee
Purpose and authority
To further enhance the SWCC Group’s corporate governance system by supervising

Composition
1 chairpersoncompliance and risk management of the entire Group and continuing to identify andcorrect issues thereof.

10 committee members

Evaluation of the Effectiveness of the Board of Directors
We conduct an analysis and evaluation of the effectiveness of the Board of Directors each fiscal year to verify that the Board functions properly. Specifically, based on the answers to the questionnaire for all directors, the Board of Directors shares the results ofthe evaluation and issues found, and holds a constructive discussion on the future of the Board.
To summarize the results of evaluation for this fiscal year, more and more respondents answered that many of the questionnaire
items that had been raised as challenges were improved compared to the previous survey, including lack of deliberation or discussion on agendas related to major directions of the management strategies, etc., mid-term management plan (including follow-up), risks, etc. We can thus conclude that the results of the various efforts made to improve on those issues are being felt.
On the other hand, we recognize that we need to continue to verify the effects of transition to a company with an audit and supervisory committee, establishment of the Nominating Committee and Compensation Committee, introduction of performance-linked
remuneration, and review of the executive officer system. We are committed to making further improvement in the future.
SWCC SHOWA HOLDINGS CO., LTD.

22

Efforts to Build a Business Foundation

Risk Management
Risk Management
The SWCC Group defines a risk as a potential factor that
impedes the achievement of our management objectives.
Based on the recognition that proper management of risks is
an extremely important management issue, we haveestablished a risk management system in which the Risk
Management Committee plays a central role.
Whether or not any risk is considered to be a major risk that
could have significant impact on investors’ decisions isdetermined by the Risk Management Committee throughidentification, analysis, and evaluation of risks. Specifically,
the Committee analyzes risks listed by the Group companies
by quantifying the risks based on quantitative analysis. On
the basis of the analysis, the SWCC Group evaluates andassesses any risk that could have significant impact as amajor risk.

With regard to major risks, we make it clear who is in chargeof risk management at each Group company. Furthermore,
departments in charge establish rules and guidelines andprovide training and education under the instruction of the
Risk Management Committee, and we have also establisheda system necessary to improve the level of risk management
to ensure that our business continues to develop.
SWCC Showa Holdings Board of Directors
Instructions/
reportCompliance
HotlineInstructions/report

Risk Management Committee
Chairperson: Group CEO
Secretariat: Human Resources Control Division

Audit and Supervisory
Committee

Audit Control
Division

Instructions/report
Group companies

Information Security
The SWCC Group established its Information Security Policy in 2006. Since then, we have taken measures against information
leakage and cyber-attacks as well as provided relevant training for employees.
The SWCC Group recognizes the investment in security as a key management issue and is making proactive efforts on security.
Information Security Policy
We recognize that information handled within the company includes important information on business activities, such as customer
information, management information, technical and production information, and employees’ personal information. Thus, we strive
to comply with laws and regulations and to improve the system and IT environment that enable appropriate management.
In addition, we have formulated Information Security Guidelines and prepared an IT environment with greater reliability so that
confidentiality, integrity, and availability are ensured to help customers and employees use information assets securely. We willcontinue to maintain these guidelines and this environment at all Group companies.
Information Security System
The IT Strategy Committee is a committee organizationconsisting of IT administrators of operating companies under
the Group’s direct supervision, and develops IT security
measures, plans and implements training on security, andproposes investments in security measures.
AXIO Corporation, an operating company under the Group’s
direct supervision, operates the Committee, assuming
responsibility for the building, maintenance, and operation of
IT infrastructure.

SWCC Group Management
Council

SWCC Showa Holdings
Board of Directors

IT Strategy Promotion Committee
Chairperson: Officer in charge of IT
Secretariat: ICT Promotion Department

Group company: AXIO

Review and revise the
Security Guidelines

Obtain ISMS
certification

Build, maintain, andoperate an IT
environment

IT infrastructure/security measures[Major initiatives]
We provide training on information security every year to all employees in the Group, including officers.
We review our training programs every year, constantly taking into account the latest trends including countermeasuresagainst cyber-attacks such as advanced persistent threat emails which have become more sophisticated in recent years.
We constantly review the way we respond to incidents taking into account the latest trends including cyber-attacks, examine
our IT infrastructure and security environment for any deficiencies or problems, revise the Information Security Guidelines,
and plan and examine investments in IT infrastructure.

23

SWCC Group ReportA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Risk Management

BCM (Business Continuity Management)
The SWCC Group must fulfill its social responsibilities, including the responsibility to continue supplying in emergencies by overcoming unexpected situations such as disasters that may occur during business activities. We must similarly restore operations ina quick and planned manner to continue business. For that reason, during non-emergency times, we steadily work on BCM (Business Continuity Management), which is intended to maintain and improve capacity to continue organizational business.
We launched the BCM Development Promotion Committee in fiscal 2016 to review the disaster prevention system at each site of
the SWCC Group, select priority business operations within the Group in time of emergency, and examine strategies and measures
to continue business and restore it quickly.
In fiscal 2019, based on the BCM system established in the previous fiscal year at each of our sites in Japan, we conducted facility
inspections based on the plan, took precautionary measures, and reviewed the BCP manual to ensure that it was appropriate forthe current situation.
In fiscal 2020, we will expand our consideration of natural disasters including earthquakes, tsunamis, damages from wind, flood,and snow in addition to countermeasures against COVID-19 so that each site can operate in a more independent manner.

Compliance
The SWCC Group considers compliance to be one of its most important management issues and takes various measures internally to comply with laws and regulations. Specific measures are planned and formulated mainly at the Risk Management Committee, and then implemented by the Corporate Legal Services Division.
Compliance with antitrust laws is an especially critical and high-priority issue for the SWCC Group. We conduct internal audits
focused on antitrust laws as well as hold sessions for personnel in charge of sales on a regular basis each year. In addition, we
implement compliance training programs during the sessions and rank-based programs (e.g. training programs for new employees and executives) on laws and regulations related to the SWCC Group’s business, such as subcontracting and constructionindustry laws, to promote compliance widely.
Furthermore, we are conducting internal sessions and enhancing quality compliance audits in response to quality fraud issues
that have frequently occurred at many companies in recent years.
The SWCC Group operates a Group-wide internal reporting system (Compliance Hotline) by establishing contact offices internally and externally (an attorney’s office). We prepare a system to prevent compliance violations and detect any that occur.
The SWCC Group is committed to enhancing and ensuring compliance through continuation of these initiatives.

Export Control
The SWCC Group’s basic policy on export control is to comply with export control laws and regulations enacted in Japan and other relevant
countries, and not to illegally export or provide regulated goods and technology, in the interest of maintaining international peace and security.
The Export Control Office provides all employees with advice and guidance on export control operations and technology transfer to overseas locations at Group companies, so that they can properly perform theirduties in accordance with laws and regulations.
In order to comply with export-related laws and regulations, we systematically audit the operation and provide training for our employees to ensurethat they are operating under a unified standard for export controls. We
have submitted the Internal Compliance Program (CP) and Check List
(CL) to the Ministry of Economy, Trade and Industry (METI), which havebeen accepted by METI, and we have been certified as a company thathas maintained a self-management system for security export control.

Export control training

SWCC SHOWA HOLDINGS CO., LTD.

24

Financial/Company Profile Section

Results of Operations and Financial Analysis
Key Financial Data for the Past 10 Years
Fiscal year

FY2010FY2011FY2012

Consolidated Results of Operations (millions of yen)
Net sales

165,512

171,780

169,798

Gross profit

19,51919,261

18,503

Selling, general and administrative expenses(16,985)(17,315)(17,376)

Operating income

2,533

1,945

1,126

Interest expense(1,120)(1,103)(1,042)Equity in earnings (loss) on equity-method

(86)

(63)

(184)

Foreign exchange gain (loss)

(614)

(219)

44

Ordinary income

749

693

(847)

Net income attributable to owners of parent

281

162

(6,365)Comprehensive income

(637)

(201)

(5,866)

Depreciation

4,215

3,279

3,169

Capital expenditure

2,206

2,883

3,812

979

1,248

1,247

Cash flows from operating activities

1,206

111

5,385

Cash flows from investing activities(2,324)(4,299)(3,913)

Cash flows from financing activities

2,903

557

(718)

Cash and cash equivalents at end of year

10,874

7,205

8,223

Total assets

142,370

143,498

136,890

Net assets

35,517

41,77835,349Interest-bearing debt

64,31158,45457,177

Shareholders’ equity

34,58840,69235,057

Research and development expenses
Information on Consolidated Cash Flows (millions of yen)

Consolidated Financial Position (millions of yen)

Per Share Information (consolidated basis) (yen)Net income

11.23

5.73

(206.55)

Net assets

1,377.87

1,320.48

1,137.62

0.00

1.00

0.00

—

15.5%

—

Operating income margin

1.5%

1.1%

0.7%

ROA (Return on assets)

0.5%

0.5%

-0.6%

ROE (Return on equity)

0.8%

0.4%

-16.8%

Shareholders’ equity ratio

24.3%

28.4%

25.6%

DE ratio

186%

144%

163%

Overseas sales ratio

13.2%

11.2%

12.2%

Dividend
Dividend payout ratio (consolidated basis)
Key Financial Indicators (consolidated basis)

Notes: 1. E ffective October 1, 2017, the company carried out a 10-to-1 share consolidation of its common stock. Accordingly, net income per share or net
assets per share is calculated assuming that the share consolidation was carried out at the beginning of fiscal 2010.
2. The company has adopted the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16,2018) since the beginning of fiscal 2018. Figures for fiscal 2017 are ones after this accounting standard has been applied retrospectively.

25

SWCC Group ReportA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section
Results of Operations and Financial Analysis

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019183,289

181,693

169,712155,232

168,186

177,174

171,142

19,561

18,161

17,72820,09921,646

21,71823,733(17,009)(16,925)(16,778)(15,865)(15,370)(15,077)(15,123)

2,552

1,236

949

4,234

6,276

6,640

8,609

(1,090)(1,060)

(965)

(852)

(841)

(805)

(669)

(271)

(208)

(644)

(83)

(415)

(476)

(2)

11

260

(304)

(202)

36

(75)

(36)

1,236

384

(1,461)

2,446

4,892

5,603

7,864

195

228

(9,151)

1,976

3,737

4,569

5,465

1,600

3,213

(11,195)

2,938

5,722

2,314

4,584

2,947

3,489

3,699

2,928

2,877

3,011

3,099

4,460

4,998

3,983

3,244

3,391

2,944

4,186

1,097

1,238

1,045

927

1,046

1,119

1,255

(1,208)

5,624

4,545

7,842

6,804

6,901

8,696

(4,567)(2,027)(3,846)(2,218)(4,051)(3,552)(4,144)

4,734(3,493)(2,289)(6,506)(3,295)(2,970)(4,879)

7,604

7,968

6,282

5,192

4,603

4,721

4,225

140,371

138,023

123,069

119,528

123,518

124,165

122,52133,57836,921

25,72428,65533,47735,62839,981

62,10558,96357,482

51,41948,99446,65742,30333,281

36,61625,371

28,15032,85734,94339,5766.33

7.43(296.98)64.14

123.93153.22

183.271,080.04

1,188.29

823.37913.601,101.71

1,171.66

1,327.04

0.00

0.00

0.00

0.00

5.00

7.00

15.00

—

—

—

—

4.0%

4.6%

8.2%

1.4%

0.7%

0.6%

2.7%

3.7%

3.8%

5.0%

0.9%

0.3%

-1.1%

2.0%

4.0%

4.5%

6.4%

0.6%

0.7%

-29.5%

7.4%

12.3%

13.5%

14.7%

23.7%

26.5%

20.6%

23.6%

26.6%

28.1%

32.3%

187%

161%

227%

183%

149%

134%

107%

13.2%

13.4%

11.2%

11.5%

11.8%

9.7%

8.2%

SWCC SHOWA HOLDINGS CO., LTD.

26

CONTENTS
A Strategy to Hone Trust and Technology
to Achieve Growth
02 Greetings
07 Financial/Non-financial Highlights
09 SWCC Group’s Growth Strategy
		Energy and Infrastructure Business Segment
10		Communication and Industrial Devices
Business Segment
11		Electrical Equipment and Components
Business Segment12		 New Business Segment

The SWCC Group is engaged in activities to support
the Sustainable Development Goals (SDGs).

Efforts to Build a Business Foundation
13 SWCC Group’s CSR Efforts
15 Efforts to Conserve the Environment
		Environmental Management

16		Medium- and Long-Term Environmental Targets
17 Relations with Society	Supplier Relations (Procurement Guidelines)

18
Shareholder and Investor Relations
19 	Employee Relations (Human Rights,
Employment)

21 Corporate Governance23 Risk Management
Financial/Company Profile Section25	
Results of Operations and Financial Analysis

SWCC SHOWA HOLDINGS CO., LTD.

CSR Promotion Department
1-14, Nissin-cho, Kawasaki-ku, Kawasaki-city, Kanagawa 210-0024, Japan (Cube Kawasaki Building 2F)
Phone: +81-44-223-0530
Fax: +81-44-223-0549