SWCC Group Report
Integrated Report

SWCC SHOWA HOLDINGS CO., LTD.

Ma na ge me n t P h ilo s o p h y“The SWCC Group strives to be trusted”● The SWCC Group will strive to earn the trust of our customers through technology and high-quality products and services.
● The SWCC Group will, through healthy business activities, create corporate value that will earn the trustof 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.

Mis s io n S ta te me n tCreating 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 environmentally friendly products.
● We will create corporate value that will earn trust through healthy business activities.
SW CC Grou p Ma n a g e me n t P o lic y
The SWCC Group has established the following management policies to practice our management philosophy,“The SWCC Group strives to be trusted.”
1. The 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 enthusiasm
of 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. The 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.

All for the Trust

01

SWCC Group ReportC O N T E N TS
History and Future of the SWCC Group
03 History of the SWCC Group04 Launch of SWCC Corporation
A Strategy to Hone Trust and Technology to
Achieve Growth
05 Greetings
11 Special Feature: Declaration of Support for the
15
17
19
21
23
25
27

TCFD Recommendations and Information
Disclosure
Value Creation Process
Financial/Non-financial Highlights
SWCC Group’s Growth Strategy
Energy and Infrastructure Business Segment
Electrical Equipment and Components
Business Segment
Communication and Industrial Devices
Business Segment
New Business Segment
Promotion of DX to Accelerate Improvementof the Group’s Profit Structure
Special Feature: SWCC Smart Stream

28
Efforts to Build a Business Foundation
29 Sustainability Efforts
30 Materiality
33 Efforts to Conserve the Environment
34
35
37
39
40
41
42
44
45
46

Environmental Management
Voluntary Environmental Action Plan
TopicsRelations with Society
Supplier Relations (Supply Chain)
Supplier Relations (Quality Management)
Quality Compliance Initiatives
Shareholder and Investor Relations
Employee Relations (Human Rights,
Employment)
Special Feature: The Female Empowerment
Project
Employee Relations (Safety and Health
Activities)
Relations with Society (Social Contribution
Activities)
Risk Management
Corporate GovernanceRound-table Discussion among Outside Directors
Management Team (Introduction of Officers)

47
50
55
59
Financial/Company Profile Section
61 Results of Operations and Financial Analysis
65 Company Profile
66 Share and Investor Information

Editorial policy
This is a report to stakeholders on the medium- and long-term value that
the SWCC Group provides through its business activities toward therealization of an enriched human society.
● In business activities, business plans for the full fiscal year, SWOT analyses,
target markets, growth strategies, and progress of growth businesses are
introduced for each of the three segments (Energy and Infrastructure
Business, Electrical Equipment and Components Business, Communication
and Industrial Devices Business) of the SWCC Group. The basic strategiesof the New Business Segment and the details of the initiatives of eachbusiness are also introduced.
● CSR efforts are reported from the angles of E (Environment), S (Social), and
G (Governance), based on the framework of seven core subjects thatcompanies should address as social responsibility according to JIS Z 26000.
In addition, the relationship between these initiatives and SDGs (Sustainable
Development Goals) is explained.
■ Period of the Integrated Report
April 1, 2021-March 31, 2022 (FY2021)
However, past and recent activities are included in some cases.
■ Scope of the Integrated Report
SWCC Showa Holdings Co., Ltd., its consolidated subsidiaries (11 domestic
companies, 7 overseas companies), and equity method affiliates (4 overseas
companies)■ Referenced guidelines● IIRC (International Integrated Reporting Council), “International Integrated
Reporting Framework”● GRI (Global Reporting Initiative), sustainability reporting standards● Japanese Standards Association, “JIS Z 26000: 2012 Guidance on social
responsibility”■ Month/Year published
September 2022 (next scheduled publishing date: September 2023)■ Other
The company brochure, annual securities report, and other company
information are available on the SWCC Group’s website.

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

SWCC SHOWA HOLDINGS CO., LTD.

02

History and Future of the SWCC Group

History of the SWCC Group

Becoming a trusted corporate groupthrough “Change SWCC”
Under the management philosophy of “The SWCC Group strives to be trusted,” we have been providing theworld with products centered on electric wires and cables since our establishment in 1936. The diverse
technologies and products we have cultivated over the years are used in a wide variety of fields and in various
places throughout society.
While leveraging this technology, we will promote further reforms and create new history for the SWCC Groupon top of the history that we have built thus far.

1936

SHOWA ELECTRIC WIRE AND
CABLE CO., LTD. is established(Spin off from Tokyo ElectricCompany: the current TOSHIBACORPORATION)

1937

Operations commence in Kawasaki City,
Kanagawa Prefecture (production and sale ofbare copper wire commences)
English trademark is registered (establishment of
SWCC brand)

1938

Production and sale of power and communication cables commences

1947

Production and sale of vibration-isolation rubber mount commences

Operations at the Sendai Plant commence (production ofaluminum wire commences)

1974

SHOWA SCIENCE CO., LTD. is established

1976

STEC (SHOWA TECHNICAL CORPORATION) is established

1979

Production and sale of heat rollers for electronic copier
commences

1986

First delivery of seismic isolation devices

1990

Kawasaki Electric Co., Ltd. (currently SDS Corporation) is establishedHUA HO ENGINEERING CO., LTD. is established as a joint
venture in Kaohsiung City, Taiwan

1949

1991

1950

Construction business (electrical work) commences

TIANJIN SHOWA ENAMELED WIRE
CO., LTD. (currently TIANJIN FUTONG
ENAMELED WIRE CO., LTD.) isestablished in Tianjin, China

1951

1995

Listed on the Tokyo Stock Exchange

Technical Assistance Agreement is concluded with General
Electric Company (GE), USA (polyvinyl formal enameled wires andpower cables)
FUJI ELECTRIC CABLE CO., LTD. is established

AXIO Corporation is established

Operations at the Aichi Factory commence(production of power cables commences)

1996

1952

JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD. isestablished as a joint venture in Zhejiang Province, China

1960

ISO 9001 certification granted through company-wide
integration

Tamagawa Electric Cable Co., Ltd. (currently SWCC SHOWAUNIMAC LTD. Sendai Factory) is established

Operations at the Sagamihara Plant commence (production ofcommunication cables commences)

1967

SHOUKOU EQUIPMENT INDUSTRY
CO., LTD. is established

1968

Operations at the Mie Plant commence(production of magnet wire commences)

03

1972

SWCC Group Report

1997
1998

The entire production division of the Kawasaki Office istransferred

1999

ISO 14001 certification granted at all production sites

2000

FUQING SHOWA CHENGHONG ELECTRONICS CO., LTD.
(currently FUQING SHOWA PRECISION ELECTRONICS
CO., LTD.) is established in Fujian Province, China

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

History of the SWCC Group

2001

UNIMAC, LTD. is established as a joint venture
Capital participation in SWCC SHOWA (H.K.) CO., LTD. in
Hong Kong

2002

SWCC SHOWA (SHANGHAI) CO., LTD. is established in
Shanghai, China

2005

SWCC SHOWA (VIETNAM) CO., LTD. (SVC) is establishedin Hanoi, Vietnam

2006

Corporate separation
Shift to a holding company structure
The company is renamed from SHOWAELECTRIC WIRE AND CABLE CO., LTD.
to SWCC SHOWA HOLDINGS CO., LTD.
Changed head office location to Minato-ku, TokyoDONGGUAN SHOWA INTERCONNECT PRODUCTS CO.,LTD. is established in Guangdong Province, China
LOGIS-WORKS CO., LTD. is establishedCompact electric power equipment products areintegrated under the SICONEX® brand2009

Joint venture in Shandong Province, China
SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO.,LTD. is established in Shandong, China

2011

A business and capital partnership agreement isconcluded with FUTONG GROUP CO., LTD. China
HANGZHOU FUTONG SHOWA WIRE & CABLE MATERIALSRESEARCH CO., LTD. is established as a joint venture in
Zhejiang Province, China
FUTONG-SHOWA ELECTRIC WIRE & CABLE (TIANJIN)
CO., LTD. is established as a joint venture in Tianjin, China

FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD.
is established as a joint venture in Zhejiang Province, China

2017

Changed head office location
to Kawasaki City, Kanagawa
Prefecture
Sale of high-performanceoxygen-free copper wirecommences under the MiDIP®
brand

2018

SWCC DAIJI VIETNAM INTERCONNECT PRODUCTS CO.,LTD. (currently SWCC SHOWA VIETNAM INTERCONNECT
PRODUCTS CO., LTD.) is established in Hung Yen
Province, Vietnam

2019

The SWCC Group changes its status from “a company
with a board of statutory auditors” to “a company with anaudit and supervisory committee”
Business segments are reviewed and group governanceis strengthened
Showa Furukawa Cable Co., Ltd. is established as a joint
ventureLaunch of SWCC Corporation
On April 1, 2023, we will absorb by merger our consolidated subsidiaries, SWCC SHOWA CABLE SYSTEMS CO., LTD. and
SWCC SHOWA UNIMAC LTD., reorganize our management structure from a pure holding company to an operating company, andchange our trade name.

● Regarding the reorganization of the management structure

Since our transition to a pure holding company in April 2006, we have managed the Group under a holding company structure. As originallyintended, management and business operations were separated through the holding company structure, and by tackling management issues suchas structural reforms of existing businesses and improving the financial position while striving for overall optimization from the perspective of groupmanagement, we were able to gain a clearer idea for overcoming these issues.
Against this backdrop, in order to reduce the distance between management strategies and business operations, and to further accelerate thespeed of strategy planning and execution, we will absorb by merger the operating companies SWCC SHOWA CABLE SYSTEMS CO., LTD. and
SWCC SHOWA UNIMAC LTD. and transition from a pure holding company to an operating company in April 2023.

● New trade name: SWCC Corporation

By adopting the four-letter trademark that we have been using for many years as the Group abbreviation for the new trade name, we willrevamp the image of the SWCC Group and further increase our corporate value with an eye on the future beyond the new mid-term
management plan “Change & Growth SWCC 2026” and the 90th anniversary of our founding in 2026, while maintaining the corporate brandthat we have cultivated thus far.

● Shifting towards the creation of further social value and a growth trajectory

After the restructuring, the Company, which will become an operating company, will streamline the shared resources of the entire Group by
improving the efficiency of group management, strengthening strategic functions and rationalizing the management functions, and will further
increase profitability centered on business segments.
In addition, we will further strengthen cross-divisional functions such as research and development, human resources development, andproduction in order to deliver products that support the security, safety, and comfort of people’s lives with reliable quality.
While increasing the profitability of our business, we will streamline and simplify our operations, develop new businesses, search for knowledge,
develop the individuality of all employees, and ambitiously work on reforms and improvements with job satisfaction.
Aiming for new growth strategies, we will continue to push forward with reforms, and work together as a group to earn the trust of our
stakeholders and society at large, and to contribute to the sustainable development of society.

SWCC SHOWA HOLDINGS CO., LTD.

04

A Strategy to Hone Trust and Technology to Achieve Growth

Greetings

We will switch our attention fromrestructuring to growth and create
value for the future.
In view of the success of restructuring in recent years, the SWCC Group now aims toachieve growth by revamping Group management and pursuing new businesses.
In this interview, the CEO reviews our restructuring initiatives to date and explains the
direction targeted in our long-term vision and mid-term management plan.

Takayo Hasegawa
President and Group CEO

SWCC Showa Holdings Co., Ltd.

05

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Greetings

Transformation of the Company until now

Four years of restructuring and improvement of financial condition
The SWCC Group has drawn up a long-term vision, SWCCVISION 2030, for fiscal 2030, and begun implementing afive-year mid-term management plan, Change & Growth
SWCC 2026 (FY2022–2026), as a first step toward achieving
this vision. In explaining the future direction we are aiming
for through this vision and management plan, I would like tolook back on the Company’s transformation so far.
I took up the post of President four years ago in June
2018. My first year in office was a time when I thought a lot
about how this company needed to change, and thisculminated in me setting a new direction for it. I spent six
months until December of that year envisioning what theCompany should look like and making plans to achieve that.
I then identified management issues and put together astructure so that we could launch a full-scale restructuring
drive in fiscal 2019.
At that time, I identified low business efficiency andprofitability as well as fragile financial health as standout
problem areas. I believed that unless these issues wereresolved, it would be impossible to work toward new growthand make major changes to the Company. Therefore, in
fiscal 2019, after clarifying our business portfolio, I introduced
ROIC as a management indicator and worked with the new
management team to do something about businesses whose
profitability was expected to be low.
In the following fiscal year, fiscal 2020, the appearance of
COVID-19 dealt us a heavy blow. However, throughrestructuring efforts, we reoriented the SWCC Group, in
which the individual companies comprising the Group had
exercised a lot of power, toward Group-based managementof each business segment. And by improving efficiency innumerous areas, we made a profit even amid the harshmarket environment. Moreover, in fiscal 2021 ourperformance far outstripped our targets. The fact that atransformation like this could be accomplished at such an
unprecedented speed was down to the tireless efforts of ouremployees, and the way we managed to overcome the trialsof the COVID pandemic through these efforts has instilled
everyone in the Company with confidence.
Having now got on track with restructuring andimprovement of our financial position, we have finallyreached the stage where we can enhance our own growthpotential while creating new value for the future, as declaredin our corporate statement, “Creating for the Future.” Of
course, the SWCC Group’s business is still based on the
manufacture of products that support infrastructure, and ourefforts to provide safety, security, and comfort in daily life andto earn the trust of society will remain at the core of ouroperations. However, we cannot develop and evolve as acompany if we simply stay in the same place. We need toenhance the value we provide to society through the pursuitof new businesses and expand our circle of trust evenfurther.

Invested capital and ROICInterest-bearing debt (left axis)

Shareholders’ equity (left axis)

Invested capital (left axis)(100 million yen)

ROIC (right axis)

Introduced ROIC
Began restructuring

1,400

8.0%

1,200

6.0%

1,000

4.0%

800

2.0%

600

0.0%

400

-2.0%

200

2011

2012

2013

2014

2015

2016

2017

2018

Pre-introduction
three-year average:

3.2%

2019

2020

2021

-4.0%

Post-introduction
three-year average:

6.4%

SWCC SHOWA HOLDINGS CO., LTD.

06

A Strategy to Hone Trust and Technology to Achieve Growth

I myself have long experience as a researcher, and even
now that I have become a corporate manager, I still feel that
I have a researcher’s mindset in my backbone. What thatmeans is that I have the desire to give shape to things that
do not yet exist. That gives me a spirit of challenge, as I am
always thinking about what I should do to turn my ideas into
reality, analyzing the results of my attempts, and pondering
what to do next. The same is true in my management of theCompany. I explore concrete steps I can take to realize myvision for the Company, put them into practice, achieve
results, and craft the next plan while looking at the figures.
Another attitude I have retained since my researcher days
is to always set goals at 110%. I believe it is important todeclare goals that are neither reasonable and within reachnor unrealistic and distant. I think goals should present theopportunity to move up a level by doing one’s best and not
giving up. And I view it as vital for employees to all think
about how to attain the goals, and to then take action
together.

Transition to an operating company and change in company nameEmbodying the intention to make a leap forward from existing businesses
To put into practice the theme of our long-term vision, i.e.,creating value for the future, we will proceed with thereorganization of Group operations. On April 1, 2023, theCompany will absorb its two main operating companies,
SWCC Showa Cable Systems Co., Ltd. and SWCC Showa
Unimac Ltd., and under its new name of SWCC Corporation,
the Company will make the transition from pure holding
company to operating company.
The shift from a holding structure means that we arechoosing a format for Group management that can be
expected to deliver greater benefits in terms of increasing
our value as an enterprise. The change from a holding
structure is based on the current scale of the SWCC Group’sbusiness and the fact that it is not a complex entity thatstraddles other industries, and we have chosen a form ofmanagement that is expected to provide greater benefits
from the perspective of increasing corporate value. Goingforward, it will allow us to consolidate corporate functions
and streamline administrative functions, and to further
accelerate efficiency improvement and speed of execution
while leveraging the Group’s strengths established andstrengthened through the segment-based business structure.

At the same time, by sharing and expanding strategic
functions such as R&D, production technology, and digitaltransformation (DX), which are directly related to
manufacturing and innovation, we will push forward with thecreation of new businesses that straddle multiple segments
and deepen the business of each segment. The SWCC
Group is currently commercializing a construction-related
human resources education program, and I believe that thisreorganization of the Group’s management structure isunavoidable if we are to expand our business in new
directions, including through the provision of such education
services, the operation of a solutions business, and thedevelopment of communication technology and charging
infrastructure in the automotive field.
The change of our trade name to “SWCC Corporation” isintended to change the mindset within the Company to view
us as a new company that aims to leap beyond our existing
business centered on electric cables, and to communicate
this aspiration widely outside the Company to gain
recognition and penetration. As SWCC Corporation, we will
provide greater social value and enhance our own value as
an enterprise.

Group management structure before and after reorganization

Now

Absorption merger(planned)

After reorganization

Pure holding company

From April 1, 2023

SWCC Showa Holdings Co., Ltd.

Domestic
subsidiaries under
direct control
SWCC Showa Cable
Systems Co., Ltd.

Domestic subsidiaries
under direct control
SWCC Showa
Unimac Ltd.

Showa Furukawa
Cable Co., Ltd.

Fuji Electric Cable
Co., Ltd.

Axio Corporation

SDS Corporation

Indirectsubsidiaries
Logis-Works Co., Ltd.
Shoukou Equipment Industry Co., Ltd.
Showa Science Co., Ltd.
STEC (Showa Technical Corporation)
SWCC Showa (Vietnam) Co., Ltd.
Fuqing Showa Precision Electronics Co., Ltd.

07

SWCC Group Report

Operating company
SWCC Corporation

Overseas subsidiaries
under direct control
SWCC Showa (H.K.)
Co., Ltd.

SWCC Showa (Shanghai) Co., Ltd.

Showa Furukawa
Cable Co., Ltd.

Fuji Electric
Cable Co., Ltd.

Overseas subsidiaries
under direct control
Axio
Corporation

SDS
Corporation

Logis-Works Co., Ltd.

Shoukou Equipment Industry
Co., Ltd.

Showa Science Co., Ltd.

STEC (Showa Technical
Corporation)

SWCC Showa (H.K.) Co., Ltd.

SWCC Showa (Shanghai)Co., Ltd.

SWCC Showa (Vietnam) Co., Ltd.
Jiaxing Showa Interconnect
Products Co., Ltd.

Jiaxing Showa Interconnect
Products Co., Ltd.

Indirectsubsidiaries

Indirectsubsidiaries

Dongguan Showa Interconnect
Products Co., Ltd.

Dongguan Showa Interconnect
Products Co., Ltd.

SWCC Showa Vietnam
Interconnect Products Co., Ltd.

SWCC Showa Vietnam
Interconnect Products Co., Ltd.

Fuqing Showa Precision
Electronics Co., Ltd.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Greetings

FY2021 operating environment and response

Leveraging our strengths to offer added value proved successful
Looking back on business conditions in fiscal 2021, copper
prices remained high in the first half of the fiscal year, andprices of petrochemicals and other raw materials also soared.
We therefore worked on improving production efficiency, andfrom the autumn onwards, passed on the higher costs tocustomers by raising prices, having obtained theirunderstanding. In terms of changes in our operating
environment and our responses to them, I think this was themost significant factor.
Regarding the COVID pandemic, an outbreak of infections
in Vietnam hit us especially hard, while in China lockdowns
kept logistics paralyzed. As a result, the adverse effects
extended to our wire harness business, which we had beenendeavoring to expand overseas.
Under these circumstances, the Communication andIndustrial Devices Business Segment struggled in terms of
profits, but the Energy and Infrastructure Business Segment
and the Electrical Equipment and Components Business
Segment saw their profits rise, and as a result, our overall
consolidated operating results showed higher revenues andprofits than we had targeted at the start of the term. In the
Energy and Infrastructure Business Segment, we moved
away from business targeting long-distance powertransmission in favor of total solutions centered on
substations. This is an example of the way the SWCC Group
has shifted to providing added value by leveraging its
strengths, and I feel that our financial results indicate that thisapproach has been successful.
Regarding capital efficiency, ROIC increased to 7.6% in
fiscal 2021 from 6.3% in the previous year. In fiscal 2018,

when we introduced ROIC-based management, ROIC was
5.6%, so we have made considerable strides. Nonetheless, I
believe that company-wide penetration of ROIC-based
management is still insufficient, so we will aim for further
improvement by setting easy-to-understand indicators andtarget figures for each site so that each employee can view
increasing ROIC as part of their job and take action
accordingly.

Using the internal newsletter to increase frontline penetrationof ROIC (summer 2022 issue)

Aims of the new mid-term management plan

Endeavoring to increase operating income by 1.5 times
Our long-term vision, SWCC VISION 2030, sets “operating
income of 20.0 billion yen (operating income margin of 9% orover)” as a performance target for fiscal 2030. This will
constitute a doubling of operating income compared with now(fiscal 2021). In the final year (fiscal 2026) of the mid-term
management plan, Change & Growth SWCC 2026, whichmarks the midpoint on the path to realizing the vision, we aim
to achieve “operating income of 15.0 billion yen (operating
income margin of 7% or over)” and “ROIC of 10% or over.” To

increase operating income to 1.5 times the current level infiscal 2026, we need to grow it by 10% every year for five
years. This is not a level that can be easily achieved, and isan unattainable goal unless we change our current
management structure and enhance profitability by increasing
added value. We must expand the sphere in which we dobusiness from manufacturing, which is what we have always
done, to providing services and offering solutions. We need tocarve out new fields with fresh ideas.

Mid-term Management Plan “Change & Growth SWCC 2026” and SWCC VISION 2030
Basic policies under the mid-term management plan
1. Strengthen profitability of core businesses
2. Create new businesses
3. New development of overseas business
Strategy 1
Strategy 2

Change Continue to build on restructuring efforts
Growth Transition to growth phase

Mid-term Management Plan “Change & Growth SWCC 2026”
FY2026 performance targets
Net sales
215.0 billion yen
Operating income
15.0 billion yen
Operating income margin
7% or over
ROIC
10% or over*

SWCC VISION 2030

Creating value for the future
SWCC VISION 2030
FY2030 performance targets

Net sales
Operating income
Operating income margin
ROIC

220.0 billion yen
20.0 billion yen
9% or over
10% or over*The ROIC target was revised on May 12, 2022.

SWCC SHOWA HOLDINGS CO., LTD.

08

A Strategy to Hone Trust and Technology to Achieve Growth

I am calling for this sort of change in mindset among our
employees and encouraging them to proactively take on new
challenges. Under the Change & Growth SWCC 2026 plan,we will invest 20.0 billion yen, including through M&A, over
five years in new growth business areas. The SWCC Group
has already made many “Changes” and we are now at thestage where we have gained a foothold for “Growth.”
Of course, new businesses will be in the upfront
investment phase for the time being, so the profit growth weare aiming for over the next five years will be achieved
mainly by strengthening the profitability of our corebusinesses, deepening our operations in each segment, andimplementing a “bleed out” strategy (i.e., deploying
technology, products, etc. the Company has accumulated in
new areas). In addition, we expect to see a profit
improvement of approximately 1 billion yen by consolidating
corporate functions and streamlining administrative functions
in line with the reorganization of Group management.
In the area of strengthening the profitability of our corebusinesses, we have positioned improving the profit marginsof the electric wires business in the Energy and Infrastructure

Business Segment and the communications cable businessin the Communication and Industrial Devices Business
Segment as a must-do task. In these segments, we
completed a reorganization of domestic production sites infiscal 2021 and the first half of fiscal 2022, and have already
improved operating efficiency to some extent. But to further
enhance profitability going forward, we intend to pushforward with DX by integrating the entire process from order
receipt to manufacturing and delivery of products tocustomers, and by utilizing AI for forecasting.
In the Electrical Equipment and Components Business
Segment, we will accelerate our shift to high-performance
products for automotive applications and increase production
in anticipation of the expansion of the xEV market in Japan.
In the Energy and Infrastructure Business Segment,
meanwhile, we will continue to focus on delivering totalsolutions centered on substations, and will aim to expand
earnings by deepening the business, such as by running theconstruction-related human resources education program I
mentioned earlier.

Execution of Sustainability Strategy

Improving our ability to respond to risks to achieve sustainable growth
I view contributing to a sustainable society is an important
responsibility for companies to fulfill and a condition for theircontinued existence in the world. At the same time, the
SWCC Group regards sustainability initiatives as presenting
opportunities (and also risks) that can help raise our value as
an enterprise, and has set out a Sustainability Strategy in its
long-term vision and mid-term management plan.
Internally, the CSR Promotion Department, which weestablished in 2019, has taken the lead in implementing
ESG/CSR management and addressing SDGs themes, but
in July 2022, we put in place a new sustainability
management structure with the establishment of the
Sustainability Committee.
In particular, our environmental preservation efforts,
centering on decarbonization, are becoming more and moreclosely related to the SWCC Group’s business, as evencustomers are demanding that action be taken in the supply
chain in the area of product supply. In February 2021, we
formulated the 7th Voluntary Environmental Action Plan
(FY2021–2025) based on the Green Plan 2050, which aims
to achieve zero environmental impact by 2050. Among theenvironmental objectives contained in the Action Plan, we
have already met our target for reduction of CO2 emissions
compared to fiscal 2013, but we will keep raising the bar with
our targets and continue our efforts. We have been also
working hard to reduce the final disposal volume of waste, cut
our water use, and increase the share of renewable energy inthe electricity we consume. In May 2022, we announced ourendorsement of the TCFD (Task Force on Climate-related
Financial Disclosure) recommendations, thereby committing
to disclose information on climate change-related risks andopportunities based on the four pillars of governance,
strategy, risk management, and indicators and targets.
In our efforts to address issues facing society, we place ahigh priority on human resource strategies. We offer
programs for a succession plan to nurture the next
generation of senior executives, a course called Future
Leader Training to turn employees in their 30s into middle
managers, and SD Seminars for young people from acrossthe Group. We have also initiated an education program that
employs DX educational materials to train construction
personnel. And in 2021, we launched SWCCarat, a project to09

SWCC Group Reportpromote female empowerment that is aimed at increasing
the percentage of women in management positions andconducting activities to further their careers. Alongside these
initiatives, we intend to conduct employee engagement
surveys and create a company that draws out the best fromits talent pool.

Expressing the idea of all employees,
not only women, sparkling within SWCC,
by using the word “carat,” a unit of massused for measuring gemstones

As for governance initiatives, we are also focusing on thedevelopment of structures to further strengthen the Group’s
capabilities and on compliance with the Corporate
Governance Code, but we view ensuring proper quality
control as our number-one task. In July 2021, we discovered
inconsistencies in the testing methods used with past
products, so I have launched a project, under my directcontrol, to implement the various corrective measures we
had been presented with. With this project, we are taking
ongoing action to prevent any recurrence and restore trust.
In addition to establishing a digital-driven quality control
structure and making it more rigorous as a mechanism, weare also working to improve our corporate culture by urging
all employees and workplaces to acquire an accurate
understanding of our products and the levels of quality
required.
By executing this Sustainability Strategy, the SWCC Groupwill enhance its ability to respond to various risks and deliver
sustainable business growth.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Greetings

SWCC Group Sustainability Strategy(At time of formulation of long-term vision and mid-term management plan)E

Action for the environment

Implementation of Green Plan 2050
Disclosure based on the TCFD framework
PurposeGoals

Respond toclimate change
risks

Execute strategies based on
the TCFD

Prevent global
warming

Reduce CO2 emissions by
35% in FY2030 comparedwith FY2013*

Use water
resources
effectively

Reduce water use by 50% in
FY2030 compared with
FY2018*We have already achieved the initial target of 35%, so willraise the target to 50%

S

G

Action for society

Corporate governanceUtilization of diverse human resources
Sustainable development

Further reinforcement of the Group’s capabilities
Strengthening and ensuring quality control and audit

Purpose

PurposeFortify and rebuild
the Group
management
structure

Goals
Empower women• 8% women in middle manager
Actively
positionsmanage• 10% women in section leader
diversity
level and higher positions
Utilize senior citizens
Improve the SWCC Next Generation
DevelopBusiness Leader Succession Plan
talentTrain construction personnel using
DX educational materials
Promote health Enhance employee engagement
and productivity using health and productivity
management management strategy maps

Goals
Complete the Groupreorganization and streamline
and optimize management
structures

Harmonize IT and Harmonize personnel
other systems
systems, IT systems, etc.
within the Group throughout the GroupStrengthen
quality control
structures

Restore trust by enhancing
quality control and ensuring
thorough auditing

The SWCC Group’s five materiality themes[Categories] and themes[Technology]

Our future

Action policy
Popularize sustainable clean energy through superior technologies and innovations
Build resilient infrastructure for future society
Reduce greenhouse gas emissions through tireless effort and action[Environment]

Our earth

Leverage the combined power of the Group to promote recycling of all resources
Make effective use of limited water resources[Community]

Our partnership

Value connections and develop in tandem with local communities
Cooperate in creating value chains based on the spirits of empathy, co-existence, and co-prosperity
Promote utilization of diverse human resources (Diversity & Inclusion)[People]Our people

Develop talent for the future
Enhance engagement (create jobs and workplaces that feel rewarding)[Governance]

Our governanceMonitor corporate management
Provide good quality and safe products and services

To our stakeholders

A new step forward as SWCC Corporation
As a company that extends the circle of trust, we in the
SWCC Group are intent on growing together with all our
stakeholders to create a prosperous future.
Looking ahead, as we expand the range of value we
provide, we will also focus on disseminating non-financial
information to help more people understand our initiatives. We
will strive to enhance our value as an enterprise by moreproactively communicating about how we are transforming theCompany, our growth strategies, as well as non-financial
information.

As we take a new step forward under the name of SWCC
Corporation, we hope that all our stakeholders will pay close
attention to and look forward to the challenges we take on.
We are counting on your continued support for many years to
come.

SWCC SHOWA HOLDINGS CO., LTD.

10

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation
SpecialFeatureDeclaration of Support for the
TCFD Recommendations andInformation Disclosure

In May 2022, we announced our support for the recommendations of
the TCFD (Task Force on Climate-related Financial Disclosures).
While climate change poses a risk to business activities, it also leads
to revenue opportunities. Based on the recognition that identifying andaddressing these climate change-related risks and opportunities is an
important management issue, we will proactively disclose informationon the four items of “governance,” “strategy,” “risk management,” and“metrics and targets” that relate to climate change-related risks andopportunities in line with the TCFD recommendations.

● Governance
We have established matters related to sustainability promotion activities, including climate change. The Sustainability
Committee, chaired by the Group CEO and composed of the chiefs of each segment and the presidents of group companies,
deliberates on important matters related to sustainability and reports decisions to the Board of Directors, under the Board of
Directors’ supervisory system.
Regarding the issue of climate change, we have established a system in which the Board of Directors deliberates and decides
on important matters such as environmental policies, and the Sustainability Committee, chaired by the President andRepresentative Director, considers responses to issues that could be management risks and opportunities. Details ofdeliberations are reported to the Board of Directors at least twice a year, and regarding risks, information is shared incooperation with the Risk Management Committee.

● Strategies
Since we have introduced a market-based business segment structure, we have identified risks and opportunities for each of thethree main segments. Moreover, in terms of business impact, we have formulated two scenarios for each business segment: a
1.5°C scenario (realization of a decarbonized society scenario) and a 4°C scenario (progression of global warming scenario),and established a working group consisting of the Group’s environmental supervision department, the chiefs of the target
business segments and external experts to conduct scenario analysis under the following conditions.
Category

Analysis target

Timeline

Qualifying
financial impact

Referencescenario

11

SWCC Group Report

Analysis conditions

SWCC Group’s three major business segments
Energy and Infrastructure Business, Electrical Equipment and Components Business, Communications
and Industrial Devices Business
Short-term: FY2025 In line with the period specified in the 7th Voluntary Environmental Action Plan
Medium-term: FY2030 In line with the period specified in the Medium- and Long-Term Environmental
Plan “Green Plan 2050”
Long-term:
FY2050 In line with the period specified in the Medium- and Long-Term Environmental
Plan “Green Plan 2050”
The magnitude of the impact is scored according to the following criteria, and analyzed
as large, medium or small according to the evaluation score
10: Significant impact on management, 7: Visible deterioration in profit and loss,
Risks
5: Long-term decline in credibility, 3: Decline in credibility when accumulated,
1: Almost no impact
Assumed using the sales scale of the business portfolio targeted for FY2030 described inOpportunities the “SWCC VISION 2030,” which was formulated in conjunction with the mid-term
management plan “Change & Growth SWCC 2026,” as a guideline
Scenario in which policies and regulations are introduced towards the realization of adecarbonized society by 2050, and the global average temperature rise is limited to 1.5°C
1.5°C
above pre-industrial levels
scenario
Reference: IEA Net zero by 2050 scenario, IPCC RCP2.6/SSP1-1.9 scenarios, etc.
Scenario in which policies, regulations, and social initiatives to reduce CO2 emissions do
4°C
not progress, and the global average temperature rises to 4°C above pre-industrial levels
scenario
Reference: IPCC RCP8.5/SSP5-8.5 scenarios, etc.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Efforts to Build a Business Foundation● Image of society under the 1.5°C scenario (if we transition to a decarbonized society)

It is expected that the movement toward decarbonization will advance rapidly, the introduction of renewable energy and the shift to EV will further
accelerate, and raw material prices will rise due to decarbonization and a decrease in oil demand.
Hydroelectric power
generation

Power grid reinforcement and increased
demand for submarine cables due tothe spread of renewable energy

Spread of modal shift

Solar power
generation

Large-scale solar
power generation

Thermal power
generation

Rising prices of copper,
aluminum, steel materials,
etc. due to increased demandcaused by decarbonization

Advancement of digitalization that
contributes to the expansion anddecarbonization of smart cities

Ultra-high voltage networktransmission grid withoverhead andunderground lines

Power distribution
grid

Biomass power
generation
Private power
generation

Introduction of ambitious emission
reduction targets, carbon taxes anddecarbonization-related policies
by various governments

Decentralized grid
smart cities

Private lines

Offshorewind power

Rising plastic prices due to
Network transmission
declining demand for gasoline
Smarthousesgrid with overhead and Electric vehicles
Growing needs for energy saving Large-scale underground lines
Growing need for rapid
Wind power generation
Expansion of distributed powerand efficient use of power
factories
sources such as storage batteries
emission reductions
Storage batteries
and renewable energy
Advances in next-generation
Responding
tovehicle technology and increased
Requests todemand for highly
production of electric vehicles
Increased business partners
Automakers
recyclable products
production of to reduce CO2
Enhanced decarbonization initiatives
electric
emissionsthroughout the supply chain
vehicles: Risks: Opportunities● Image of society under the 4°C scenario (if decarbonization does not progress)
It is expected that efforts toward decarbonization, such as energy saving and renewable energy, will be relatively slow, and physical risks will increase.
Hydroelectric power
generation

Automatic increase in powerand cable demand

Thermal power
generation

No progress indecarbonization, but automaticrise in copper demand

CO2

Modal shift does not
spreadUltra-high voltage networktransmission grid withoverhead andunderground lines

Power distribution
grid

Network transmission
grid with overhead andLarge-scale factories underground lines

Automakers

Still dependent on
fossil fuels

Risks

Solar power
generation

Limited spread of electric vehicles,
engine-equipped vehicles remain
the mainstream

Not much progress
for the spread ofrenewable energy
Production ofelectric vehicles
slows down

Requests to
suppliers to reduce
CO2 emissions arelimitedVarious governments’ policies for emission reduction
targets and carbon taxes remain at limited levels
No progress for smart cities

Increased frequency and intensityof natural disasters such as
typhoons and floods

Deteriorating working
environments due torising temperatures

CO2

Property damage,suspension ofoperations, and supply
chain disruptions due toflooding, etc.
: Risks: Opportunities

From the results of the analysis conducted for the three major segments, the common risks that have a particularly
large financial impact are listed below.

Classification

Policies and regulations Technology Market

Transition risks(1.5°C scenario)

Reputation
Acute

Physical risks(4°C scenario)

Climate change risks

Impact on business

Increase in renewable energy
Strengthening of CO2 ●Response going forward

Timeline*1 Financial impact*2

Chronic

Technological transformation and theMedium/procurement costs and investment indevelopment and implementation of new
long-term
energy-saving equipment
technologies to reduce CO2 emissions in
the company-wide “Green Energy
Introduction of carbon ● Increased operating costs due to theMedium/Project,” which aims to reduce energy
introductionofacarbon
price
in
the
tax
long-term
consumptionatthemanufacturing
stage
Company and the upstream supply chain
Possibility of lost sales opportunities due Recycling of plastic resources, use of●Development of a
Mediumto replacement with highly recyclable
recycled materials, and development ofcircular economy
competing products, etc.
products that are easy to recycle and reuse term
● Rising prices of copper, aluminum and steel Development of alternative materials,
Rising raw material
Medium/diversification of procurement sources● Rising prices of plastics, synthetic
priceslong-term
rubbers, etc.
and shifting costs to product prices
Growing demand for ● Increased costs for response to requests Construction of an internal information
Medium/emission reductions
from business partners to reduce CO2
sharing system and quick response tolong-termfrom business partners
emissionsbusiness partners’ needs
Increased requests for ● Negative impact on corporate value and Regular monitoring and response to
Medium/disclosure of information
funding if proactive disclosure is not
long-term
various evaluation indicators
related to climate change
undertaken● Damage to property such as facilities
Increased frequency
and machineryand intensity of● Delays in raw material procurement and Enhancement of BCM (BusinessMedium/natural disasters suchproduct transportation due to supply
Continuity Management) initiatives atlong-term
as typhoons andchain disruptions
target sites
floods● Decrease in earnings due to suspensionof business until recovery
Deteriorating working
Promotion of various heatstroke
Longenvironments due to ● Deteriorating work environments for
employees
countermeasurestermrising temperatures
emission reduction

Large
Large
MediumMediumMediumMediumMediumMedium*1 (Timeline) Short-term: FY2025, Medium-term: FY2030, Long-term: FY2050*2 (Financial impact) Qualitatively rated on a scale of 1-10 based on our risk evaluation criteria. Assumes that 1 to 3 are small, 4 to 6 are medium, and 7
to 10 are large.

SWCC SHOWA HOLDINGS CO., LTD.

12

A Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation
Opportunities

The results of the analysis conducted on the three main segments are categorized by “degree of impact whentransitioning to a decarbonized society” and “size of our business portfolios.” The highlights focusing on our top
two business portfolios are described below.

Business portfolio

Degree of impact when transitioning to a decarbonized society

Portfolio size as of FY2030*3

Automobile

Large

Large

Electric power

Large

MediumConstruction

MediumLarge

Telecommunications

MediumSmall

Industrial equipment

MediumLarge

ICT

MediumSmall*3 (Portfolio size as of FY2030) Evaluated based on the proportion of sales of the business portfolio expected in FY2030

Classification

Automobile

Opportunities*4

Future image of society● Changes in consumer
preferences● Stricter policies in various

Timeline*5

Financial impact*6

Short- tolong-term

Large

Market● Increased demand for high-performancecountries (carbon taxes, ZEV
regulations, etc.)● Advances in next-generation
vehicle technology (automateddriving, eco-driving assist,storage batteries, etc.)● Rapid expansion of electricvehicle ratio

products for next-generation vehicles
Products and services
demand for oxygen-free copper● Increased
MiDIP® and flat magnet wires for highefficiency motors for xEV vehicles● Increased demand for high-speedtransmission in-vehicle cables that realize
advanced functions for automated driving
Market● Expansion and sophistication of ● Increased demand for high-performance

products for next-generation vehicles
electric power infrastructure andgrowing needs for long-distance Products and services● Increased demand for SICONEX®, whichpower transmission due to theenables weight reduction and shortened
spread of renewable energy andMedium/construction time
Electric power
power storage systems®
long-term● Increased demand for SICOPLUS , a solution● Increased demand for powerbusiness that responds to the expanding
cables due to power gridelectric power market
reinforcement● Growing needs for energy saving ● Increased demand for triaxial superconducting
cables with low power loss that are highlyand efficient use of power
effective in reducing CO2 emissions*4 (Inherent opportunities) Energy and Infrastructure Business, Electrical Equipment and Components Business,
Devices Business*5 (Timeline) Short-term: FY2025, Medium-term: FY2030, Long-term: FY2050*6 (Financial impact) Assumed based on the sales scale of the business portfolio

MediumCommunications and Industrial● Risk Management
The Risk Management Office oversees
risks for the entire Group, including
risks related to climate change. Risks
related to climate change are assessedby the Risk Management Committee
and in-depth research is conducted incooperation with the Sustainability
Committee to evaluate the impact. In
addition, as the opportunities related toclimate changes are also evaluated
together with the risks, the evaluation
results are collected by the
Sustainability Committee and thecontent of deliberations are reported to
the Board of Directors on a regularbasis (at least twice a year).

13

SWCC Group Report

Audit
Board of Directors
ReportReportIssues directions

Sustainability
Committee

Collaborates/
sharesinformation

ReportAudit andSupervisory
Committee

Issues directions

Risk Management
Committee

Risk Management Office

ReportAudit/
adviseAudit Control
Division

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Efforts to Build a Business Foundation● Indicators and Targets
We formulated the medium- to long-term environmental plan “Green Plan 2050” based on the key concept of zero environmental
impact in 2050, and set 2030 targets to achieve our long-term vision for 2050.
Regarding greenhouse gas emission reduction targets, we have set a goal of reducing CO2 emissions (Scope 1 + Scope 2) by
50%*7 by fiscal 2030, using fiscal 2013 as the baseline year, which is also the baseline year for CO2 emission targets set by theJapanese government. Moreover, as a short-term target, the 7th Voluntary Environmental Action Plan, which started in fiscal
2021 as a five-year initiative, has set a target of a 45% reduction*8 by fiscal 2025. In addition, as an initiative to achieve thesetargets, we established the “Green Energy Project*9,” a company-wide project team that aims to further reduce CO2 emissions at
the manufacturing stage, and added a target of increasing the renewable energy introduction rate to 30% or more by fiscal 2025.
*7 Achieved the FY2030 target (35%) in FY2021, and raised the target to 50%*8 Achieved the FY2025 target (25%) in FY2021, raised the target to 45%*9 Green Energy Project
A company-wide project team that considers sustainable energy use in the manufacturing stage. With the Sustainability
Promotion Office as the secretariat, it consists of three working groups: the CO2 Solution WG, the Energy-Saving
Production WG, and the Utilization of Renewable Energy WG.
The mission of each working group is as follows.
● CO2 Solution WG: CO2 capture and reuse, development and implementation of innovative technology● Energy-Saving Production WG: Review of production methods, improvement of equipment, conversion/updating
to high-efficiency equipment● Utilization of Renewable Energy WG: Introduction and utilization of renewable energy

Specific measures to achieve CO2 emission reduction targets and carbon neutrality● Further promotion of energy-saving (upgrading equipment, reviewing manufacturing methods throughtechnology conversion, and applying investment standards that take CO2 into consideration)● Realization of energy creation (in-house energy creation, such as the introduction of solar power generation)● Expansion of the procurement of renewable energy (carbon neutral gas, electric power derived from non-fossil fuels)● Introduction of new technology (capture and reuse of CO2, such as waste heat utilization)● CO2 emissions trading (compensating for shortages)

45%
reduction

CO2 emissions

Efforts such asenergy saving

50%
reduction

Efforts such asenergy saving

Realizationof carbon
neutrality

Formulation of capital expenditure
standards that take CO2 emissions
into account

Energy saving

Offsetting increased production
volume and facility expansion
with further promotion of energy
savingRenewableenergy*CO2 emissions trading
FY2013 (Baseline year)

FY2025

FY2030*Including energy creation(in-house power generation).

FY2050Through dialogue with our stakeholders, we will continue to promote initiatives related to climate change and contribute to
the improvement of corporate value and the development of a sustainable society.

SWCC SHOWA HOLDINGS CO., LTD.

14

A Strategy to Hone Trust and Technology to Achieve Growth

Value Creation Process

Value Creation Model
We will contribute to the achievement of a rich human society.
Through various values that the SWCC Group provides to customers, such as “outstanding technology and highly
reliable products and services,” “safe and stable business activities,” and “solutions to management issues,” we willcontribute to the realization of a rich human society by solving social, environmental, and industry issues incooperation with our customers.

Social problems

INPUT

Environment and energy

Financialfoundation

Realization of carbon
neutrality
Increased power
consumption

Disaster prevention
and infrastructure

Production
innovation

Mid-Term Management Plan

“Change & Growth SWCC 2026”

Aging social infrastructure
Occurrence of large-scale
natural disasters

Core technologies
ROIC
management

Lifestyle and mobility
Vehicle electrification
Coming post-COVID-19 era

Training and humanresources development
Decrease of the workforce
Shortage of remotelearning environments

Medical care and health
Shortage of healthcare
workers
Increase in medical
expenses

Active participation ofdiverse human resources

Strategy 1

ChangePartnerships

Further increase instructural reforms

Strengthening
governanceDX promotion

Nature and theenvironment

Sustainability

15

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Value Creation Process

Economic
value

Socialvalue

SWCC VISION 2030

We create value that connects to the future
Our strengths

Basic Policy
1. Strengthen profitability of coretechnologies
2. New developments of overseas
business
3. Creation of new businesses
Socialproblemsolving
business

Energy andInfrastructure
Business
Representative
brand:Creation of social value

Promotion ofrenewable energy

SICOPLUS®

Electrical
Equipment andComponents
BusinessStrengthening
urban resilience

Representative
brand:

MiDIP®

Strategy 2

Communication
and Industrial
Devices Business

GrowthRealization ofhigh-efficiency
EV motors
Safe andcomfortable
automated driving

Representative
brand:

Transition to
growth phase

Expanded
investment

OUTPUT

FLANTEC®

Portfolio
shift

Solving the labor
shortage

New Business

management (key foundation)

Enhancement of
medical frontContinuous investment for growth
SWCC SHOWA HOLDINGS CO., LTD.

16

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)

2,500
2,000

■Operating income

1,682

1,772

1,711

1,992
1,617

100
80

1,500

60
1,000

76
5.0%

3.8%

3.7%

5.0%

4.7%

20

2017

2018

2019

2020

2021

0

2017

2018

2019

2020

2021

In addition to continued robust demand for domestic power
infrastructure, shipments of high-performance products fordomestic construction-related applications (Energy andInfrastructure Business), and automobiles and electronic
components (Electrical Equipment and Components Business)increased. Net sales increased 23.2% year on year, partly due tothe impact of rising copper prices.

In addition to continued robust demand for domestic power
infrastructure, shipments of high-performance products fordomestic construction-related applications (Energy andInfrastructure Business), and automobiles and electronic
components (Electrical Equipment and Components Business)increased, and operating income increased 32.3% year on year.

Net income attributable to owners of parent/ROE

Invested capital/ROIC■Net income attributable to owners of parent

ROE (%) (100 million yen)

94

100
80
60
40

37

20
0

■Invested capital

ROIC (%)

1,000

120

55

46
12.3%

2017

2018

950

(100 million yen)

7.3%
5.4%

5.6%

807

817

817

2018

2019

6.3%

7.6%
914

900

14.7%

50

13.5%

17.7%
11.4%

2019

2020

850
800

2021

750

2017

836

2020

2021

Net income attributable to owners of parent increased 88.3% year
on year as a result of recording gain on sales of fixed assets
associated with the sale of the Ebina Factory, in addition to theabove-mentioned increase in operating income, despite therecording of business structure improvement expenses.

Invested capital increased due to an increase in working capitalcaused by soaring copper prices and investments to strengthen
manufacturing facilities in Japan and overseas. However, due tothe significant increase in operating income, ROIC improved by
1.3 points year on year.

Total assets/Shareholders’ equity/ Shareholders’ equity ratio

Research and development expenses/ Capital expenditure■Total assets ■Shareholders’ equity

Shareholders’ equity ratio (%)

1,800
1,500
1,200
900

1,235
26.6%

600
300
0

329

1,242

1,225

28.1%

32.3%

349

396

1,295
36.7%
476

(100 million yen)

1,474

■Research and development expenses ■Capital expenditure (100 million yen)
80

39.5%

50

583

30

40

20
10

2017

2018

2019

2020

SWCC Group Report

63

70
60

2021

Total assets increased mainly due to an increase in trade notes
and accounts receivable and inventories caused by the impact ofsoaring copper prices, and an increase in fixed assets caused byinvestments to strengthen manufacturing facilities in Japan andoverseas. Although we paid dividends to our shareholders, werecorded a net income of 9.4 billion yen, resulting in an increasein shareholders’ equity and a shareholders’ equity ratio of 39.5%.

17

66

63

(100 million yen)

100

86

40

500
0

Operating income margin (%)

120

0

42

34

40

29

10

11

13

13

2017

2018

2019

2020

14
2021

Research and development expenses increased slightly year on
year. Capital expenditure increased significantly year on year due
to the strengthening of manufacturing facilities in Japan andoverseas as well as the strengthening of the manufacturing basethrough the reorganization of domestic offices.
Scope of data: SWCC Showa Cable Systems Co., Ltd.

History and Future of the SWCC GroupA 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 female employees

Number of employees■Domestic ■Overseas(Persons)

6,000

5,513

5,000

5,461

2,194

4,000

5,356

2,097

4,979

5,127

2,009

1,943

1,889

3,000
2,000

3,319

3,364

2017

2018

2019

50

44

40

3,184
2020

3,090
2021

The number of employees of the SWCC Group decreased due tofactors such as the dissolution of AOMORI SHOWA ELECTRIC
CABLE CO., LTD. for the purpose of reorganizing domestic basesin the communication cables business. We will continue to strive
to maintain appropriate numbers of employees both in Japan andoverseas.
Scope of data: SWCC Showa Holdings Co., Ltd. and its consolidated
subsidiaries

Number of non-Japanese employees (domestic)

36

33

New recruits (%)(Persons)

55

17%

49
19%

19%

30
20

3,347

1,000
0

■Number of female executives ■Number of female managerial track employees
60

7,000

10
0

11
0%
2017

12

7%

2018

11

13

2019

2020

17
2021

We have been recruiting female employees as managerial track
employees steadily every year, regardless of the form of
recruitment, be it hiring new graduates or hiring immediately
effective personnel in the mid-career recruitment. As we strive toimprove the retention of these female employees, the number offemale employees has been gradually increasing. We willcontinue to work on recruiting and fostering female employees.
Scope of data: SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable Systems Co., Ltd.

Percentage of annual paid leave taken(Persons)

35
30
25

26
22

25

27

26

70.0
60.0

60.8%

67.7%

70.0%

2018

2019

63.2%

68.0%

50.0

20

40.0

15

30.0

10

20.0

5
0

(%)

80.0

10.0

2017

2018

2019

2020

2021

We will continue to hire talented non-Japanese personnel to helptransform the mindset within the Group by including nontraditional perspectives and values within the SWCC Group.
Scope of data: SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable Systems Co., Ltd.

0

2017

2020

2021

Compared to fiscal 2020, when there was a decline in leave
taken presumably due to the operation of special leave newly
established due to the impact of COVID-19 and a decrease insituations to use paid leave, fiscal 2021, a year in which we werein the process of recovering from COVID-19, saw an
improvement in the percentage of leave taken.
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

(%)

3.0

65.2

64.5

60.0

58.6

50.0

2.33%

2.5

51.1

45.5

40.0

2.0

30.0

1.0

1.52%

1.33%

1.5

0.93%

0.48%

20.0
0.5

10.0
0

2017

2018

2019

2020

2021

Although production volume in FY2021 increased compared tofiscal 2020, CO2 emissions were reduced by approximately 11%
compared to fiscal 2020. The reduction can be attributed to anincrease in the ratio of non-fossil fuels in purchased electric
power and city gas, and the results of energy-saving initiatives at
each production site.

0

2017

2018

2019

2020

2021

The industrial waste landfill rate for fiscal 2021 achieved thetarget of 0.5% or less due to progress in thermal recycling ofwaste plastic. We will continue to sort and collect waste toimprove the landfill rate.
Scope of data: Production sites of domestic Group companies

Scope of data: Production sites of domestic Group companies

SWCC SHOWA HOLDINGS CO., LTD.

18

A Strategy to Hone Trust and Technology to Achieve Growth

SWCC Group’s Growth Strategy

Energy and Infrastructure Business Segment
The Energy and Infrastructure Business Segment comprises three businesses. The
first is the electric power infrastructure business, which provides total solutions
spanning power cables, power devices, installation, and maintenance for power
infrastructure system networks covering electricity generation, transmission, anddistribution. The second is the construction wire business, which supplies low-voltage
general-purpose cables, which are indispensable for electrical wiring inside buildings,
and fire extinguishing/prevention cables, which provide power to disaster-prevention
equipment in the event of a fire. And the third is the seismic isolation and vibration
control business, which provides seismic isolation equipment and vibration control
products, which are vital for keeping people safe and minimizing damage to buildings
and infrastructure networks when an earthquake strikes.
Among them, the electric power infrastructure business is driving sales while tapping
demand for connection of renewable energy systems through the implementation of ourunique SICOPLUS® strategy under the Japanese government’s strategic plan. Moreover,in our core business, the construction wire business, we are planning to significantly
improve profitability by promoting digital transformation (DX) and setting ROIC-based KPIs.
Managing Executive Officer
and Chief of Energy and Infrastructure Business Segment

Yukio Kawase■ Targets for final year of medium-term management plan and full-year performance targets
Disaster prevention

Seismic isolation/otherConstruction-related Lifestyle infrastructure

6％

Full-year targets■Net sales Operating income(100 million yen)

FY2026 targets(seismic isolation equipment, etc.)

Decarbonization

31％

Electric power infrastructure

Net sales(general-purpose wires)

865

97.9 billion yen

1,095

FY2021

FY2022 (targets)

68

54

Operating income

8.0 billion yen 63％

Cumulative capital expenditure total● Investment in expansion: 4.8 billion yen● Investment in renovation: 4.2 billion yen
Growthdrivers

1,069
65

FY2020• Improve construction-related profitability through DX• Strengthen the business model for connection of renewable energy systems• Expand line-up of products that resolve social issues, e.g., eco-friendly products

Marketoutlook• Future decline in construction demand due to aging population and low birthrate• Increased business opportunities in area of connection of renewable energy systems■ SWOT analysis (strategic business: SICOPLUS )®

Strengths

Weaknesses❶ Reliable track record and large market share
mainly in transformers for private-sector plants
thanks to highly competitive product line-up❷ High profit margin under a business model thatdelivers proprietary solutions❶ Difficulty in securing installation personnel due
to aging population and low birthrate
Action❶ Step up cooperation with partner companies❷ Speed up training of installation personnel
through the introduction of education system
based on AVR®, etc.

Opportunities

Threats❶ Expansion of the power market under theJapanese government’s strategic plan(renewable energy, renovation of aged
equipment, investment in making electricity
transmission networks more resilient, distributed
power supplies, smart city concept, etc.)❶ Entry of competitors

Strength x Opportunity❶ Further expansion of our share of the power market
based on our track record mainly in private-sector
plants and distinctive business model

Action❶ Make SICONEX® the de facto standard in the
power market (substation field)

SICOPLUS® strategy

SICOPLUS®: A cable, installation, and maintenance solution centered on our SICONEX® (components) strategic productsFrequency
Hydroelectric
154–500 kV system wire
converter station
power station
6–66 kV system wire
50Hz
60Hz
600V–22 kV system wire
Aerial/underground wires forTransformer substation
Thermal power
stationextra-high-voltage network
Large plant
power transmission system
Large solar
power station
Solar power
Biomass electricity
Self-operated
generation
generation
wire
DistributedHomeelectricity
system/smart city
generation
Electricity distribution
Wind power
generation

Smart house
Storage battery
Electric vehicle

Large-demandcustomersystemAerial/underground wires
for network powertransmission system■ Target market and growth strategy for the electric power infrastructure business

Self-operated
wire
Large wind farm/offshore wind power
Alliance with Exeo Group, Inc.
Introducing education program to increase
installation personnel● Target market and future outlook
Within the power market, which comprises substation, distribution, and transmission, our main target market is the substation
field. The power market is expected to expand further under the Japanese government’s strategic plan, including renovation ofaged equipment to make power transmission networks more resilient, expansion of renewable energy demand, construction ofsmart cities, and expansion of power transmission and distribution networks.
19

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

Main components of the power
marketElectricity
transformation
Electricity (incl. private-sector
demand)transmission

Forecast for the power market(prepared by the Company based on various reports)
2017

2018

2019

Promotion of carbon neutrality

2020

2021

2022

2025

Power market CAGR: 5–10% (period of medium-term plan)

Expansion of electricity
transmission networks

Japanese government’s
2 trillion yen strategic plan

Large offshore andonshore wind farms

Increase in proportionof power generated
from renewable sources

Electricity
distribution

2030

Renewable energy market/distributed power market
Market for renovation of aged equipment installed in the 1960s–70s

Transformer substation

Deployment of SICONEX® for baseload in power company and private-sector transformer substation market(Based on our own research)● Growth strategy
Execute strategies for increasing production and securing installation personnel in anticipation of higher demand for our
products and services as the market expands under the Japanese government’s strategic plan
• Cloud installation personnel strategy to hire local talent
We will expand our market share by cooperating with partner companies andWe will grow our share of the substation market by
local installation firms to secure and train installation personnel using our
expanding production equipment and securing
proprietary programs for the efficient education of personnel based on AVR®, etc.
installation personnel based on our SICOPLUS®
• Invest in increased production of the SICONEX® line-up of compact
strategy. We will aim for a CAGR (compound annual
electric power equipment products
growth rate) of 12% by fiscal 2026.
To meet market demand, we will put together a structure that allows for higher
output, and thereby expand sales of our products.
Our share of the substation market• Make SICONEX®, our brand of strategic products, the de facto standard in
FY202174%
the substation market
We will leverage the superiority of the products, i.e., compact/lightweight, quick
FY2026 (forecast)80%
installation, and simple joint design, to make them the de facto standard in the(Based on our own research)
substation market, and thereby expand our market share.
● Capital expenditure plan
Category
Expansion of production equipment

Planned investment

Profit generated

Investment of 2 billion yen by FY2023

Steadily from FY2022■ Progress of growth businesses

Education system utilizing the AVR® system● Electric power infrastructure business
Secure installation personnel by providing our installation education
program SICOPLUS® to partner companies
In the power market, which is expected to keep growing in the future, SWCC
Showa Cable Systems Co., Ltd. is executing a strategy designed to secure
installation personnel.
In May 2021, with the aim of accelerating the rollout of our connection work
solutions business in the power market, we launched a new brand called
SICOPLUS®, which has SICONEX® (connectors for high-voltage power cables), ourbrand of strategic products, at its core. This brand represents an evolution as a newconnection work system that adds efficiency, labor-saving, and sustainable personnel
training programs to connection technology. In addition, the Cable Installation Skills
Development Center, which we established in the same year, started providing
education to installation staff of partner companies in October 2021. The curriculum
ran for six months, and comprised three courses: 66 kV cable handling, RBJ(component for connecting cables) assembly, and SICONEX® assembly, and all theparticipants passed the certification exam. By introducing our proprietary education
curriculum using DX educational materials such as AVR® and through actual practicein a simulated cable tunnel, instead of the on-the-job training programs that
predominated in the past, we can bring up skilled installation personnel with basic
academic abilities in a short period of time. Therefore, we are steadily taking our firststeps in implementing our cloud installation personnel strategy to hire local talent.

Remote system utilizing smart glasses

Remote supporter

Field worker

Sustainable personnel education
Use of DX
educational
materials■ Strengthening the profitability of core businesses● Business restructuring for the new SFCC (coated wire business)
Showa Furukawa Cable Co., Ltd. is a joint sales company for
general-purpose wires for the construction and electricity sales
markets, and began operations in April 2020 as a joint venture
between us and Furukawa Electric Co., Ltd., and in July 2022 itssales operations were integrated into the manufacturing operationsof both our corporate groups.
As a result of this integration, our equity stake has risen from
60% to 80%, and the speed of business restructuring will be
accelerated.
The new SFCC has declared three key pillars for businessrestructuring to be completed as profit doubling plan during theperiod of the mid-term management plan, i.e., fiscal 2022–2026.
1. Increase profitability by offering more convenience andbetter service to customers
2. Establish a production and supply structure that keeps instep with demand
3. Improve business processes through the use of AI and data
With ROIC as a base, we have determined various KPIs, and willproceed with DX and put together a demand-linked production/
supply structure to win in the construction and electricity sales
markets, which lie at the heart of the Group’s business.

SWCC Showa
Holdings Co., Ltd.

Percentage ofshareholding
60% 80%Percentage ofshareholding
40% 20%Training insimulatedfacility

OJT

Furukawa ElectricCo., Ltd.
Furukawa ElectricIndustrial Cable Co., Ltd.

SWCC Showa Cable
Systems Co., Ltd.

Manufacture of general-purpose
wires for construction

Acquisitionof essential
knowledge

Mie Plant
Ibaraki Factory

SFCC

Manufacture of general-purpose
wires for construction(excluding aluminum wires)Transition from being a sales company for general-purpose wires forconstruction to being both a manufacturer and distributor of these wires

Ratio of profit to net sales
ROIC
FY2026 targets
ROIC: 8%(+4.4% compared with FY2022)

FY2026 targets
Breakeven net sales:-20%(compared with FY2022)

Invested capital turnover ratio
FY2026 targets
Invested capital: -10%

Main KPIs
Gross margin by product type(manufacturing department)
Warehousing/transportation expense
ratio (administration department)
Inventory turnover period(manufacturing department)
Trade notes and accounts receivable
turnover period (sales department)(compared with FY2022)

SWCC SHOWA HOLDINGS CO., LTD.

20

A Strategy to Hone Trust and Technology to Achieve Growth

SWCC Group’s Growth Strategy

Electrical Equipment andComponents Business Segment
The Electrical Equipment and Components Business Segment comprises three businesses: thehigh-performance product oxygen-free copper business, which supplies products for eco-cars, theother high-performance products business, which provides superfine flat wires for copper-alloy
heater wires and electronic components, and the general-purpose products business, which
supplies products for heavy electric machinery and industrial equipment.
Among the products we offer, our high-performance oxygen-free copper MiDIP® which is highly
conductive and resistant to hydrogen embrittlement, is driving profit growth for the segment, as
demand for it is expected to expand in tandem with the growth of the xEV (i.e., vehicles with anelectric motor, including HEVs, PHEVs, etc. in addition to pure battery electric vehicles) market.
With vehicle heater wires, we are taking steps to boost production efficiency and manufacturing
capacity by concentrating all production at the Sendai Plant. And as a fresh initiative, we havebegun developing and manufacturing probe pins, and with an eye to the future growth of thesemiconductor testing equipment market, we are taking action to expand their sales. As for magnet
wires for vehicles, we will be expanding sales of flat magnet wires for next-generation drive motors
and reactors by introducing manufacturing equipment that is effective for reducing CO2 emissions.
By expanding our line-up of highly competitive products and investing in boosting output, we willcontinue along the path of expanding earnings in tandem with advances not only in automobiles,
but also in various CASE (connected, autonomous, shared, electric) mobility technologies.
Managing Executive Officer
and Chief of Electrical Equipment and Components Business Segment

Takashi Yamamura■ Targets for final year of mid-term management plan and full-year performance targets
Lifestyle infrastructure General-purpose products

31％

High-performance productoxygen-free copperxEV proliferation

Full-year targets
Operating income■Net sales(100 million yen)

715

FY2026 targets

586

Net sales

61.4 billion yen(general-purpose magnet wires)xEV proliferation

Other high-performance
products(copper alloys)

Growthdrivers

Operating income 53％

2.6 billion yen(oxygen-free copper
MiDIP®)

431

24
16

16％

7

Cumulative capital expenditure total● Investment in expansion: 3.4 billion yen● Investment in renovation: 3.2 billion yen• Expand sales of high-performance products for vehicles by reinforcing production structure• Strengthen production structure for magnet wires for electronic components• Step up efforts to reduce CO2 emissions

FY2020

FY2021

FY2022 (targets)• Shift to eco-cars (xEVs) will accelerate, and demandfor high-performance magnet wires will rise
• Need for products that are highly effective for reducing
CO2 emissions will increase

Marketoutlook■ SWOT analysis (strategic product: high-performance wire materials)
Strengths

Weaknesses❶ Highly competitive line-up of materials for vehicles❷ Strong technological capabilities in manufacturing alloys, which are used in many fields❶ Slowness in downstream development (from wire materials to processed goods)
Action❶ Strengthen partnership strategy for downstream development❷ Introduce new manufacturing equipment that enables production of processed goods to be increased

Opportunities

Threats❶ Further expansion of xEV market❷ Market needs for alloys that are both highly conductive and strong❶ Decline in superiority of product attributes, and emergence of rival products

Strength x Opportunity❶ Investment in renovation and expansion of equipment ahead of market growth❷ Development of new applied products by leveraging the excellent properties of copper alloys

Action❶ Improve the attributes of materials by employing materials informatics (MI) and process informatics (PI)❷ Develop products with customers or partners■ Uses and characteristics of high-performance products in the xEV field
Oxygen-free copper (MiDIP®)

Drive motors

Requirement of slimline, highly
efficient materials are to makevehicles lighter

21

SWCC Group Report

What the SWCC Group can do ...Mass production of oxygen-free copper MiDIP®
MiDIP®
Copper content
Conductivity
Ease of processing(bendability, fine wires)

Oxygen-free copper Tough-pitch copper

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

High-performance magnet wires (flat magnet wires)

What the SWCC Group can do ...

Copper alloy wires (heater wires)

Manufacture of copper alloy wires thatare fine, strong, and offer excellent
conductivity thanks to know-how
accumulated from research on metals

EPS, motors, transformers, etc.
Requirement of broad line-up of highperformance products

What the SWCC Group can do ...

Strength comparison with pure copper

Manufacture of flat magnet wires that employ
MiDIP® to deliver high output, voltage resistance,and heat resistance

Number of bends before the wire breaks(No. of times)

Steering wheel heaters, seat heaters,
and battery heaters

xEVs do not have a heat source, so large numbersof heater wires are needed to maintain comfort andperformance■ Target market and growth strategy forhigh-performance products

Bare wire (φ0.1 mm) was used

1,000

70 times
500
100
0Pure copper Copper-silver alloy

Forecast for the domestic xEV market■ MHEV ■ HEV ■ PHEV ■ EV ■ FCV(Unit: 1,000 vehicles)
FCV● Target market and future outlook
5,000
EV
The target market for our high-performance products is the xEV
PHEV
segment of the automobile market, growth of which is accelerating due
to the impact of global developments and the rise of green energy.
HEV
Although this market will be affected in the short term by supply-chain
MHEV
shocks stemming from the COVID-19 pandemic and the situation with0
Ukraine, it is expected to see expansion over the long run. In fact, in
2030
2035
2019
2025
(forecast)(forecast)(forecast)fiscal 2025 it is set to be around three times larger than it is now.
Source: Prepared by the Company based on various reports)● Growth strategy for high-performance products
To respond to stable demand in the automotive products market and future expansion of the xEV market, we will be increasing
production in phases of our high-performance oxygen-free copper MiDIP®, a high-grade wire material, and high-performancemagnet wires during the period of the mid-term management plan. We will also be aiming for higher earnings.
• Increase production capacity of MiDIP®
Market will have increased
threefold in 2030

To maintain and improve the competitiveness of the brand as a high-performance wire material that is highly conductive and resistant to hydrogen
embrittlement, we will continue to invest in plant and equipment to ensure stable output.

• Increase manufacturing capacity of heater wires for vehicles

We will improve production efficiency by consolidating production at SWCC Showa Cable Systems Co., Ltd. Sendai Plant, and will boost production
capacity by increasing the number of manufacturing lines. We will also start developing and manufacturing probe pins, and expand our solutions
business by leveraging the characteristics of our high-concentration copper-silver alloy.

• Take action to expand our share of the market for in-vehicle magnet wires

We will expand sales of magnet wires for reactors by keeping a lid on capital expenditures and introducing manufacturing equipment that offers highthermal efficiency and is effective for reducing CO2 emissions. We will also launch a project to develop new magnet wires for next-generation,compact, and highly efficient drive motors, with a view to expanding the product line-up.

● Capital expenditure plan
Category
Investment in strengthening MiDIP®
Investment in increasing heater wire production lines

Planned investment
Approx. 2 billion yen by FY2026

Profit generated
Output: Approx. double by FY2026
Manufacturing capacity: Approx. double by FY2026■ Progress of growth businesses (wire materials and magnet wires)● In-vehicle product line-up that can help accelerate the shift to xEVs
• High-performance oxygen-free copper MiDIP®

Environmentally-friendly vehicles are powered by motors instead of engines, but to reduce energy consumption and extend the
distance that can be traveled on a single charge, lightweight, high-output motors and materials are required. High-performanceoxygen-free copper MiDIP® is manufactured using Japan’s only “dip forming system” and is high-grade oxygen-free copper wire withcopper purity of 99.99% or higher and oxygen content of less than 10 ppm. It is highly conductive and resistant to hydrogen
embrittlement and therefore used as a material for magnet wires in motors. Because stable supplies are essential due to increasing
demand as high-performance materials, we will be revamping our production lines to approximately double output capacity by fiscal
2026, the final year of the mid-term management plan, from the fiscal 2020 level.

• Copper-silver alloy wires

Environmentally-friendly vehicles without engines do not have a heat source, so a heater for the vehicle’s interior must be installed
separately. Seat heaters, steering wheel heaters, and other features that make the driving environment comfortable, battery heaters
to improve battery efficiency, and other heaters are incorporated into the design, and our copper-silver alloy wires are excellent for
use as heater wires. Our copper-silver alloy wires have both high strength (1,700 MPa) and high conductivity (70%) at the world’s
top level, as well as excellent flexibility and good solderability. They are also recyclable and do not contain harmful substances,making them environmentally friendly. Copper-silver alloy wires are proving useful in a growing range of fields besides heater wires.
These include semiconductors (probe pins, lead frames, etc.) and advanced medical devices (catheters). We are therefore executing
plans to improve production efficiency through relocation and increase our production lines.

• Fine flat magnet wires

As the only comprehensive manufacturer of magnet wires in Japan that offers fine tothick sized wires, we supply products to a wide range of markets including the heavy
electrical market, in-vehicle market, and electronic devices market. Among them, theautomotive market is expected to experience a rapid shift to environmentally-friendly
vehicles. Given this backdrop, there is growing demand for electrification andelectronification. To respond to the need for highly efficient and reliable magnet wires
in the in-vehicle market, we will expand sales of magnet wires for reactors byintroducing revolutionary horizontal furnaces that deliver high thermal efficiency andare effective for reducing CO2 emissions. We are also launching a project to develop
new magnet wires for next-generation, compact, and highly efficient drive motors,
with a view to expanding the product line-up.

Significant
cut inenergyusage
CO2emissions
reduction

Introduction of energy-saving equipment on themagnet wire manufacturing line at the Mie Plant

SWCC SHOWA HOLDINGS CO., LTD.

22

A Strategy to Hone Trust and Technology to Achieve Growth

SWCC Group’s Growth Strategy

Communication and Industrial
Devices Business Segment
The Communication and Industrial Devices Business Segment consists of threebusinesses: the communication cable business, which supplies fiber-optic cables forlong-distance communication and LAN cables for short-distance communication, thewire harness business, which produces the wire harnesses and electric wires used forthe internal wiring of household appliances, and the precision device business, which
provides roller products that are fitted inside copiers and printers.
In the wire harness business, we are expanding sales of existing products, and in
January 2022 we completed construction of a new factory in Jiaxing, China to meetbooming demand in China and Southeast Asia. We will increase production capacity byaround 2.5 times and drive sales higher. Furthermore, we completed a realignment ofour domestic communication cable operations in April 2022, and we expect the benefitsof this restructuring to continue to be felt in fiscal 2022, as they were in fiscal 2021.
Specifically, we are accelerating the development of new product markets by increasing
business efficiency, improving ROIC, and centralizing development resources.
Managing Executive Officer
and Chief of Communication and Industrial Devices Business Segment

Yoshinao Kodama■ Targets for final year of mid-term management plan and full-year performance targets
Workstyle reform

Precision devices

Communication cables

5G, IoT

16％(100 million yen)

FY2026 targets

Net sales(copier rollers, etc.)

Comfort enhancement

42.8 billion yen

Wire harnesses

Full-year targets■Net sales Operating income

42％

Growthdrivers(LAN cables)25

4.5 billion yen

Cumulative capital expenditure total● Investment in expansion: 2.4 billion yen● Investment in renovation: 1.4 billion yen• Tap new markets through development of high-speed communication cables• Expand overseas production by launching a new structure for the wire harness business• Accelerate local production and consumption through restructuring of the precision device business

Marketoutlook■ SWOT analysis (strategic product: wire harnesses)
Strengths

Weaknesses❶ Relationships of trust built with Japanese home
appliance makers thanks to our high quality and ability
to deliver when required❷ Manufacturing sites in China and Vietnam for local
production and consumption❶ Production efficiency based on a labor-intensive
business model

Opportunities❶ Strong demand for home appliances in China andSoutheast Asia
❷ Advances in harness processing as household
appliances become more sophisticatedStrength x Opportunity❶ Expansion of sales through robust partnerships andstrong technical capabilities

295

Operating income

42％(for home appliances,industrial devices, etc.)

295

270

Action❶ Promote automation at the Jiaxing Plant in China

18

18

FY2020

FY2021• Demand for high-speed communication equipment for 5G services, CASE, etc., will increase• Need for high-quality home appliances will grow as Asia’s share of world GDP expands• Demand for commercial printers will expand significantly

Share of GDP in 2030
U.S.
Eurozone (Note)
China
Japan
India
U.K.
Other

Threats❶ Economic slowdown in China due to factors such as
trade friction❷ Difficulty of procuring materials due to supply chain
disruptions
Action❶ Further expand production facilities in Vietnam❷ Reduce procurement risk by suggesting alternative
components■ Target market and growth strategy for the wire harness business● Target market and future outlook
The main target market for the wire harness business is household
appliances and industrial devices.
In 2030, Asia is expected to account for 60% of the world GDP, andwith strong consumption demand in Asia, the Chinese home appliancemarket is projected to maintain stable growth. Furthermore, Japanesemanufacturers with operations in China are now planning to expand
procurement of wire harnesses in response.

FY2022 (targets)

Total:
111.1 trillion
dollars

China/India

20.2%
12.2%
23.7%
4.4%
10.0%
3.0%
26.4%
33.7%

Source: Prepared based on OECD (2014), Economic Outlook No. 95
Note: The eurozone comprises 15 OECD member countries

Growth in volume of home appliances sold in China
Product
category

Drivers

Penetration rate, replacement
purchases, real-estate market
Large kitchen
Penetration rate,appliances
real-estate market
Small household New innovations, penetration
appliances
rate, replacement purchases
White goods

CAGR
CAGR forecast(2015-2019) (2020-2025)
2.4%

2%―4%

5.1%

4%―6%

7.3%

5%―8%

(Based on our own research)

23

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy● Growth strategy for the wire harness business
1. Expand sales channels: Expand sales channels to encompass manufacturers other than home appliance makers (in-vehicle
devices, office equipment, etc.) and non-Japanese local Chinese manufacturers
2. Broaden the product line-up: Expand the lineup to include convenience store terminals, commercial refrigerators, delivery
vehicles, etc., while maintaining current market share in the home appliance field
3. Increase supply stability: Make supply more stable and boost cost performance by rebuilding supply chains● Capital expenditure plan
Category

Planned investment

Rebuilding the Jiaxing Plant in China and concentrating production there

Completed in FY2021 (approx. 1.6 billion yen)

Profit generated
Production to increase from FY2022■ Progress of growth businesses● Operation of the Jiaxing wire harness plant
The plant went into operation in January 2022 as the SWCC Group’s main
overseas production base.
We increased production capacity by around 2.5 times to meet demand for wire
harnesses for household appliances, industrial equipment, and in-vehicle devices,with the aim of hitting our sales target for wire harnesses of approximately 18
billion yen by fiscal 2026. In fiscal 2021, operations were impacted by the Shanghai
lockdown, but from fiscal 2022 onwards, automation-driven high efficiency andlabor-saving will be delivered, and we will be aiming to increase earnings from ouroverseas wire harness operations.
Going forward, we will add functions to the processing and technology
development center, and aim to enhance added value through, for example,
modularization, and ensure stable supplies of high-quality products to customers.

New wire harness plant in China

Jiaxing, Zhejiang Province(new wire harness plant)
Building floor area

Approx. 15,000 m²

35,000 m²

Jiaxing
Sales target for entire wire harness plant
FY2020: Approx. 10.5 billion yen
FY2026: Approx. 18.0 billion yen (around double)● Before and after restructuring
Reduced the number of domestic sites from four to three, consolidating production at them and delivering improved
efficiency and ROICIn April 2022, we completed our reorganization of domestic
sites for communication cables with total investment of 1.4
billion yen.
With this move, we aim to further improve the efficiency ofthe development and production structure and improve
service to ensure that we achieve the sales target of
approximately 18.0 billion yen for fiscal 2026 set forth in our
new mid-term management plan. Regarding the consolidationof our domestic sites, we have downscaled from four to threesites, excluding Aomori Showa Electric Cable Co., Ltd., andpursued streamlining and efficiency through the optimal
allocation of manufacturing lines. Specifically, we haveassigned the development and manufacturing functions formetal communication cables to the Sendai Plant, our maindevelopment and manufacturing site. Previously, thesefunctions were performed at the Fuji Electric Cable Co., Ltd.
Kofu Factory and by Aomori Showa Electric Cable Co., Ltd.
And alongside the site realignment, we have made progresswith enhancing the resilience of our production bases. These
efforts have included disaster prevention and mitigation
measures for tackling natural disasters such as earthquakes
and torrential rains. The financial benefit of the site
restructuring in fiscal 2021 amounts to around 0.9 billion yen.
From fiscal 2022, under the new structure, we will press
ahead with the development of new products and expect toour earnings to improve even further.

Aomori
Aomori Showa Electric
Cable Co., Ltd.
(dissolved in
December 2021)

Metal communication cables

Switch from three site structure(SWCC Showa Cable Systems
Co., Ltd. Sendai Plant, Fuji
Electric Cable Co., Ltd. Kofu
Factory, and Aomori Showa
Electric Cable Co., Ltd.) to single
site structure (Fuji Electric Cable
Co., Ltd. Sendai Factory).
Yamanashi
Fuji Electric Cable Co., Ltd.
Kofu Factory
LAN cables
Consolidation at Fuji
Electric Cable Co., Ltd.
Kofu Factory, andincrease production
Achieve integrated
production from cables
to processed products
Kanagawa
Fuji Electric Cable Co., Ltd.
Isehara Factory

Miyagi
SWCC Showa Cable
Systems Co., Ltd. Sendai
Plant
Fuji Electric Cable Co., Ltd.
Sendai Factory
Optical fiber cables
Switch from two site structure(SWCC Showa Cable Systems
Co., Ltd. Sendai Plant and Fuji
Electric Cable Co., Ltd. Isehara
Factory) to single site structure(SWCC Showa Cable Systems
Co., Ltd. Sendai Plant).
Logistics site
Consolidation at Fuji Electric Cable
Co., Ltd. Isehara Factory, andincrease logistics capacity

SWCC SHOWA HOLDINGS CO., LTD.

24

A Strategy to Hone Trust and Technology to Achieve Growth

SWCC Group’s Growth Strategy

New Business Segment
In this business segment, we will contribute to society by using core technologies toprovide products that support a smart society in fields other than electric power andcommunications. In the research and development business, we aim to bring newtechnologies to market, while in the information and communication (ICT) business,
we will pursue activities focused on the safe and dependable use of data for therealization of cybersecurity and the soon-to-arrive Society 5.0.

Yoshiaki Higuchi

Executive Officer
and Chief of New Business Segment■ Basic strategies: Information and Communication Technology (ICT) BusinessIn the context of promoting the use of ICT and realizing a digital society, the growth strategies in this business segment comprise
activities in new business areas in the ICT field and a shift to technology expected to be in demand.
With the establishment of the Digital Agency by the Japanese government, various regulations are being reviewed, anddigitalization and DX (digital transformation) will proceed even faster going forward. The settings in which ICT is used are also
expected to become more varied with the use of cloud services and the centralization of data. We will be aiming to create asmart society by offering a range of services.

■ Basic strategies: Research and development business

Since its establishment, the SWCC Group has cultivated coretechnologies, focusing on the electric wire and cable business. These
technologies include metal and resin materials and processing
technologies, as well as the design and evaluation technologies
required for electric power and telecommunications infrastructure.
Going forward, with these technologies as a base, we will institutedata-driven R&D processes that combine accumulated data assets
with AI, and by swiftly proposing new technologies and products thatare more useful to society and are of higher quality, we will aim tonurture new core technologies to support the future of the Company.

Contributing to society through business(information and communication technology (ICT) business)

Simulations
CAE analysis of heat,
flow, and stressPrototypes/
manufacturing
Databases
Materials databases
Testing/analysis data

Evaluation technologies
Structural analysis/
physical evaluationAI
MI • PI

Reviewing security measures and linkages between systems
The shift to a location-independent workstyle in line with the promotion of new workstyles and DX is making it vital to strengthen
security measures. Regarding ID management and passwords, we need to enhance measures against unauthorized accessand information leaks by introducing a multifactor authentication system to ensure individual identification. Also accelerating is
the introduction of sophisticated authentication methods, such as facial recognition systems, in people’s daily lives. In the areaof cloud utilization and security measures, this backdrop is making it increasingly important to connect systems to each other forauthentication and authorization purposes. We are leveraging our strengths in system design and development capability toaddress issues in this area.

Reviewing information infrastructure based on thezero trust approachWith the growing use of cloud services, entities are beginning to review theirmeasures to ensure the security of their entire information infrastructure based on
the zero trust approach (i.e., authorizing execution only in the case of trusted
devices), which replaces the old security model of just protecting the perimeter.
And against this backdrop, a great deal of interest is being shown in the
Keyspider cloud ID management service offered by Axio Corporation.
But with zero trust, ID management alone is insufficient. More action is required,such as putting together security strategies aimed at accelerating DX and exploring
ways of implementing and combining the best and most effective solutions.
25

SWCC Group Report

Website of the Zero Trust Alliance Japan,
which is developing new security strategies:
https://ztaj.jp/

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

The Zero Trust Alliance Japan (ZTAJ) was launched in March 2022 by 19 IT companies that endorse the zero trust philosophy.
Axio Corporation has been involved in the ZTAJ as a board member since the beginning, and has begun working to realize new
security strategies and offer solutions to customers.

Creating smart building environments—Deploying facial recognition for crime prevention
amid a changing business landscapeWith awareness of security and privacy growing, office environments need to bemade even safer. Demand is therefore expected to increase in the realm of social
infrastructure improvement, such as improving usability through the utilization of IoT
and the implementation of robust crime prevention and security measures. Against
this backdrop, the network-related business, which encompasses smart buildings,
remained strong in fiscal 2021 despite the ongoing COVID-19 pandemic.
In this business segment, too, we are responding to the expansion of the rental
office and satellite office markets, which are seeing increasing demand in society, by
supporting the creation of environments that offer value. For example, we offer room
entry/exit control systems based on the latest facial recognition technology. And
going forward, we will use technologies and installation experience cultivated overmany years as a cable manufacturer to create new network infrastructure
environments for society.

Exhibiting at TRONSHOW 2021, one ofJapan’s biggest IoT symposiums(view of the Axio booth)(Facial recognition and room entry/exit
management system from Suprema identifies
individuals even when wearing facemasks)

Contributing to society through business (research and development business)

Brainstorming

IP Landscape initiatives aimed at generating numerous ideas

Newbusiness

Field aField bCore technologies x● About IP LandscapeBased on our understanding of social change, we must work to promote thedevelopment of new business models in existing businesses and the developmentof novel products and technologies to create new value. To advance the coretechnology that the SWCC Group has developed over the years into new spheres,
we run a program called IP Landscape to create new businesses using intellectual
property information and market data. In collaboration with various businesssegments, the program is generating ideas for the development of high addedvalue products and solutions not bound by existing frameworks and customs, andproducing new businesses.

Narrowing down

Field bField cField dField dField e● Current initiatives
An initial phase of brainstorming, when a large number of ideas are generated, is essential if new businesses are to be created. The
team members tasked with coming up with multiple proposals for new businesses are drawn from the intellectual property
department and the technical departments and sales departments relevant to the themes, and the projects are implemented for fixed
periods. Next, the numerous ideas generated are narrowed down after examining the suitability of each one for commercialization.
Going forward, we will continue generating proposals for new businesses that address social issues and customer needs. We
will brainstorm and narrow down, and build a foundation for the creation of new businesses in the future.

Superconducting cable system contributing to the realization of a sustainable, decarbonized society
Superconducting cables are garnering attention as a product that can help
decarbonize society, as electrical resistance is zero, enabling power losses duringtransmission to be dramatically reduced.
In September 2021, we completed the world’s first field testing at a private-sector
plant, and are now preparing to deploy them in social infrastructure with a view toturning them into a commercial product by fiscal 2026.
Hydroelectric
power station

Frequency
converter station
50Hz

Aircraft

60Hz

Extra-high-voltage network
Aerial/underground wires
for power transmission system

Self-operated
wire

Large plant

154–500 kV system wire
6–66 kV system wire
600V–22 kV system wireTransformer substation

Large wind farm/offshore wind power

Distributed system/
smart city

Liquid nitrogen pipeline
Insulationpaper

U-layersuperconductor

Biomass electricity
generation

Electricity distribution
systemAerial/underground wires
for network powertransmission system

Liquid nitrogenpipeline

Flying car

Solar power
generation
Self-operated
wire

Tri-axial superconducting cable

Bullet train

Thermal power
stationLarge solar
power station

Up to 95% cut in power
lost during transmission

Large-demandcustomerW-layersuperconductor

When a 1 km of superconducting cable
is installed in a large plant that uses 30
MW or more of electricity, annual CO2
emissions are reduced by 554 tons.

Home NEDO official YouTube channel
electricity
generation (NEDO Channel)

Smart house
Storage
Electric vehicle battery

V-layersuperconductor

Wind power
generation

Completion of world’s first fieldtesting of tri-axial
superconducting cable system ata private-sector plant

SWCC SHOWA HOLDINGS CO., LTD.

26

A Strategy to Hone Trust and Technology to Achieve Growth

SWCC Group’s Growth Strategy
Pursuing digital transformation (DX) to expedite improvement of the Group’s
earnings structure

To cope with the declining workforce and to institute workstyle reform, the SWCC Group is moving forward with efforts to lighten
workloads and improve productivity by automating operations and saving labor through the digitalization of each value chain.
By implementing various projects, the Group will be acting as one in endeavoring to achieve the goals of the new mid-term
management plan, Change & Growth SWCC 2026, by pursuing DX to ignite change and growth.
● DX execution structure
Regarding the improvement of the earnings structure of each business, because the employees in each workplace haveexperience and expertise, the Digital Innovation Promotion Office, which reports directly to the President, provides internal
consulting services as the overall department in charge, and works with the DX leader in each section, such as manufacturing,procurement, logistics, and sales, to implement DX for the Group as a whole. A DX project has been launched for each value
chain, and action is being taken to boost profitability.
Under direct control
of President

Accounting andfinance

Digital finance8
persons

6

Logistics improvement
project

Office6persons

Capital strategy

Organization-wide humanresources management

Materials
procurement

Human resource utilization

Inventory reduction

Improvement oforganizational capabilities

Low cost

Support for employees

High turnover rate

14

persons

persons10

persons

Logistics

Research anddevelopment

Manufacturing
and assembly

Qualityassurance

Market insights

Digitalization

Digitalization

Inventory data sharing
using smartphones

MI/PI

Smart shift

Smart shift

Open innovation

Process optimization

Visualization

Sales

Coated-wire
DX project

Cloud-based monitoring ofworking hours

Risk management

Quality assurance
digitalization project

Factory

Digital Innovation Promotion Office:
6 persons

Optimal inventory managementwith AI forecasting

4
persons

18 persons

BranchCustomers

Digital sales
EC salesCustomer support

18

persons● Coated-wire DX projectAs a mature business, the coated-wire business is in particular need of earnings-structure improvement, so it has launched a DX
project to deploy IoT in business processes from manufacturing to sales in order to boost operating efficiency and strengthen
profitability. Showa Furukawa Cable Co., Ltd., which handles general-purpose wires, for which manufacturing and sales were
integrated in July 2022, has made production planning and inventory planning visible through the automation of and application of
AI technology to manufacturing process planning, and is aiming to approximately double the ROIC of its business by fiscal 2026.
● Logistics improvement project
Logis-Works Co., Ltd., a company that handles logistics, is pressing ahead with DX to optimize product shipping and make it more
efficient. It is employing data in inventory management and using AI to forecast incoming orders. Specifically, employees enter thevolume of inventory of each product at Logis-Works’ six logistics sites and at production sites into their smartphones, with all
inventory volume management conducted in the cloud. Inventory status and movements of goods are visualized in real time. In
this way, the company is putting together a mechanism for optimal inventory and delivery management. Production and logistics
sites communicate with each other in a timely manner. This helps make the supply of wires, which constitute indispensable social
infrastructure, speedier and smarter.
● Online commerce site for cables (Kaeruya)
Commercial practices have traditionally been characterized by orders
frequently being placed by telephone or fax, and the Kaeruya
e-commerce (EC) site was launched based on the concept that
services need to be matched to an increasingly digital age.
The Kaeruya EC site for wires and electrical materials, which isadministered by SDS Corporation, the SWCC Group’s trading
company, sells around 4,000 different types of cables and products,
which are manufactured by the SWCC Group. It offers a wide variety
of user-friendly features. For example, cable can be purchased in
1-m units, a wealth of technical information is presented, and thecurrent inventory is displayed. The site name, Kaeruya, contains theJapanese word kaeru, which means “frog,” but also means “canbuy,” “change” and “return.” So it embodies the ideas of being able topurchase products, changing conventional business models,changing companies, and returning to basic principles.
Kaeruyahttps://www.sds-kaeruya.com/shop/default.aspx
27

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

SpecialFeature

SWCC Smart Stream

SWCC Smart Stream business—Fusing the assets ofexisting businesses with DX to expand into new fields(Energy and Infrastructure Business Segment)
OUR VISIONThe SWCC Group’s new mid-term management plan, Change & Growth
SWCC 2026, calls for further restructuring (change) and transition to a newphase of growth (growth), so it comprises two strategies. The SWCC Group is
implementing the SWCC Smart Stream business, which combines DX with theassets of existing businesses, such as the wealth of materials data
accumulated over many years and design and manufacturing technologies. It
involves the deployment of new technologies such as AVR® (Advanced Virtual
Reality), which represents an evolution of AR/VR, the shift from theconventional approach of selling goods to a new approach of selling services,and the establishment of footholds in new business domains.

Future action

Nobuyuki Sema
Executive Officer
General Manager of Smart Stream
Business Promotion Office
SWCC Showa Holdings Co., Ltd.

Systems that combine the assets of existing business with DX The SWCC
Smart Stream business aims to develop businesses in new spheres. In theelectric power infrastructure business, aiming for passing on skills, we havealready set up the Cable Installation Skills Development Center in July 2021,
and launched SICOPLUS®, a system for performing cable connection work. And
with the aim of improving human resource education programs and swiftly
equipping personnel with skills, we are moving forward with the deployment of afrontline support system, which employs telecommunications, and a remotesupport system, which allows electronic manuals to be referred to. Furthermore,in December 2021 we made ACW-DEEP Corp., which possesses technology
related to AVR®, a subsidiary, and are developing an education program thatutilizes AVR® to simulate installation and other work in a virtual-reality setting.
The simulation is close to reality, and means that participants do not need to go
out to actual installation sites. We are also considering entry into new markets,
such as medical/welfare facilities and entertainment, by leveraging the sharedspace nature of AVR®.
The SWCC Group will continue with this project, and as it strives to achieve
the goals of the medium-term plan, will pursue various solutions businesses in
new fields.

Electronic manual

Remote support
systemFrontline support
system

Education program
development
Frontline

Application to medical andwelfare fields

SWCC SHOWA HOLDINGS CO., LTD.

28

Efforts to Build a Business Foundation

Sustainability Efforts■ Organizational Structure for Promotion of Sustainability Efforts
Based on the Group’s management philosophy, we have strengthened our sustainability structure and established theSustainability Promotion Office in April 2022 as well as the Sustainability Committee in July 2022 in order to conduct sustainablecorporate operations from the perspectives of the environment, society, the economy, etc.
The Sustainability Committee drafts the Group’s Sustainability Basic Policy, identifies materiality (key issues), promotes
sustainability strategies based on opportunities and risks, and reports and makes recommendations to the Board of Directors
regarding sustainability issues and responses thereto. In principle, Sustainability Committee meetings are held at least once every
six months.
Board of Directors

Issuesdirections

ReportSustainability Committee

Chairperson: President and Representative Director (Group CEO)
Vice Chairperson: Officer in charge of sustainability
Secretariat: Sustainability Promotion Office
Human Resources and General Affairs Coordination Department
Management Strategy and Planning Department
Quality and Environmental Management Office

Energy and Infrastructure Business Segment

Safety Management OfficeElectrical Equipment and Components Business Segment

Group Procurement Division

Communication and Industrial Devices Business Segment

Group Sales Coordination Office

New Business Segment

Overseas Business Department

Issuesdirections

ReportShares information

Risk Management Committee

Department names as of July 2022

■ Sustainability Basic Policy
In addition to strengthening our sustainability structure, we have formulated a Sustainability Basic Policy that serves as the basis
for our activities. Based on this policy, we will practice corporate behavior that responds to various social issues.

Basic Policy
Through trust and innovation, the SWCC Group aims to solve social issues and improve corporate value to create asustainable and prosperous future society.

Overall Image● Provide customers with high-quality products and services through superior technology and innovation.
● Promote the spread of clean and green energy and strive to protect the global environment.
● Value our connections with local communities and the value chain in the spirit of “empathy,” “coexistence,”
and “co-prosperity.”● Promote work styles that make the most of individuality and diversity, and work to improve engagement.
● Foster a good corporate culture by enhancing the humanity and ethics of our officers and employees.
● Five elements of social issues
Technology

Environment
GovernancePeopleSociety
29

SWCC Group Report

Community

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Sustainability Efforts/Materiality

Materiality (Key Issues)■ Formulation Process
In anticipation of the reorganization of the management structure in April 2023, we reviewed the priorities based on the existing
CSR Basic Policy and set materiality as new key issues in August 2022.
In setting materiality, we take four steps to select social issues that have a significant impact on both the Company andstakeholders, identify priority issues, and formulates specific courses of action, indicators and KPIs for each theme. We willcontinue to review our key issues on a regular basis, for instance, in parallel with the formulation of the mid-term management plan.

STEP 1 Understanding, integrating, and consolidating social issues● We surveyed approximately 300 items from various frameworks related to international social issues such as SDGs, CSR(Corporate Social Responsibility), and sustainability, and selected 40 social issues, taking into account their relevance to the
SWCC Group.

STEP 2 Verifying stakeholder expectations● Regarding the social issues selected in STEP 1, we conducted a questionnaire survey for investors, business partners(suppliers and customers), local communities, and employees about their expectations of the Company, and recognizedthem as being important for the stakeholders.

STEP 3 Selecting high-priority social issues● We comprehensively evaluated the social issues from two standpoints of the “importance for the Company” based on thecontents of our vision and management plan and the “importance for the stakeholders” collected in STEP 2. Then, we
identified high-scoring items and complementary items, and determined 13 high-priority social issues.

STEP 4 Formulating materiality, courses of action, indicators and KPIs

● We grouped high-priority social issues into five items by similar field of environment, society, and governance, andidentified them as materiality, establishing themes, courses of action, indicators, and KPIs.

● STEP 3 to STEP 4
10.0

Impact on management

Importance for the stakeholders

9.0

Field

High-priority social issues❶ Spread of sustainable clean energy

8.0❷ Greenhouse gas emissions
7.0❸ Sustainable consumption and production❹ Reduction of chemical substances and waste

6.0❺ Creation of resilient infrastructure
and promotion of innovation

5.0

4.0

Environment❻ Realization of resilient and sustainable cities

Technology❼ Gender equality
4.0

5.0

6.0
7.0
8.0
Importance for the Company

9.0

10.0

People❽ Rewarding work

Society❾ Human resources development

Areas enclosed in a red box: High-scoring social
issue items❿ Engagement with local communities

Red circles: Complementary social issue items⓬ Product and service safety

Community⓫ Significant impact on business⓭ Information and labeling for products
and services

Governance

SWCC SHOWA HOLDINGS CO., LTD.

30

Efforts to Build a Business Foundation

Materiality
We grouped high-priority social issues into five items by similar field,
and determined materiality themes and courses of action for each item.

Being friendly to
Our earthCreating
Our future
The SWCC Group’s
five materiality(key issues)[Category] Theme

Course of action
Spread sustainable clean energy through superior technology and innovation[Technology]

Creating Our future
Create resilient infrastructure for the future society[Environment]

Being friendly to
Our earth[Community]

Our partnership towork together

Reduce greenhouse gases through relentless efforts and responses
Promote the recycling of all resources with the collective strength of the Group
Use limited water resources effectively
Value connections and develop alongside local communities
Cooperate with the value chain in the spirit of empathy, coexistence and co-prosperity
Promote the utilization of diverse human resources (Diversity & Inclusion)[People]Helping Our people
shine[Governance]

Our Governancefor better company

31

SWCC Group Report

Human resources development for the future
Improve engagement (create rewarding work and workplaces)
Monitor corporate management
Provide good-quality and safe products and services

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Materiality

Our partnershipto work together

Helping
Our people shine

Our Governancefor better company

Indicator and KPITarget <year achieved>

Sales ratio of products related to xEV (electric vehicles)

20% or more <FY2026>

In-house introduction rate of renewable energy

30% or more <FY2025>®

CAGR (compound annual growth rate) of SICONEX products

12% <FY2022 to FY2026>

Number of patent applications related to SDGs goals 7 and 11

100 or more <FY2026>

Greenhouse gas (CO2) emissions (Scope 1 + Scope 2)

45% reduction compared to FY2013 <FY2025>

Final disposal rate of waste

50% reduction compared to FY2018 <FY2025>

Water usage

20% reduction compared to FY2018 <FY2025>

Number of fund/material aids for non-profit organizations, etc. and community contribution activities (other than volunteering)

5% increase from the previous year <every year>

Sustainability Procurement Guidelines questionnaire score
Ratio of female executives (section leader positions)Average hours of training per year per employee
Engagement score
Lost time injury frequency rate
Attendance rate of independent outside directors at Board of Directors meetings and committee meetings

4.5 or higher <FY2026>
8% (10%) <FY2026>
4 times longer than FY2021 <FY2026>
55 or higher <FY2026>
0.23 or less every year <every year>
75% or more <every year>

Failure costs due to quality

50% reduction compared to FY2021 <FY2026>

Customer satisfaction

Score higher than the previous year <every year>

SWCC SHOWA HOLDINGS CO., LTD.

32

Efforts to Build a Business Foundation

Efforts to Conserve the Environment

Environmental Management■ Basic Idea
Based on its management philosophy to comply with all applicable rules and regulations, consider 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, andcontributes to building a society capable of achieving sustainable development.

FY2021 Environmental Policy
1. We comply with laws, regulations and other requirements.
2. We will endeavor to continuously improve environmental management systems and environmental
performance.
3. We enhance education and awareness building to raise the environmental awareness of each employee.

FY2021 Priority Topics for Environmental Activities
1. Environmental conservation based on compliance with laws, regulations, ordinances, and otherrequirements, and stricter voluntary management standards
2. Implementation of initiatives to achieve the 7th SWCC Group voluntary environmental action plan andmedium- to long-term environmental targets❶Continuation and strengthening of the reduction of specific energy consumption ❷Reduction of final
disposal volume through the promotion of recycling ❸Formulation and implementation of specificmeasures to reduce water usage from a long-term perspective
3. Enhancement and promotion of environmental education■ Organizational Structure for Promotion of Environmental Management
Environmental management of the SWCC Group is
promoted under the Group management council, and our
Quality and Environmental Management Office, which
serves as the environmental supervision department, rolls
out to each Group company through the Environmental
Management Working Group.
The Group’s environmental policy is developed by the
Quality and Environmental Management Office, deliberated
by the Environmental Management Working Group, anddecided by the Group management council. The Quality andEnvironmental Management Office periodically reviews theGroup’s environmental management activities, sustains andimproves the entire Group’s environmental management,
and drives forward environmental management activities inaccordance with business areas of each Group company
and regional characteristics of each site.

● ISO 14001 certification

Environmental Management Working Group Chairperson: Officer in charge of environmental supervision, Secretariat: Quality and Environmental Management Office
Each Group Company, Site Environmental Management Committee

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

Operating departments of each company

Group company nameYear and monthof certification

SWCC SHOWA CABLE SYSTEMS CO., LTD.

Aug. 2022

SWCC SHOWA (VIETNAM) CO., LTD.

Mar. 2008

FUJI ELECTRIC CABLE CO., LTD.

Dec. 1999

JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD.

Oct. 2004

SWCC SHOWA UNIMAC LTD. SENDAI FACTORY

Mar. 2001

DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD.

Jan. 2009

Overseas

Domestic

SWCC Showa Holdings Board of Directors

SWCC Showa Holdings Environmental Supervision Department (Quality and Environmental Management Office)Year and monthof certification

Group company name

FUQING SHOWA PRECISION ELECTRONICS CO., LTD.

May 2008

SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD.

Dec. 2019

Group company nameYear and monthof certification

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

May 2013

STEC (SHOWA TECHNICAL CORPORATION)

May 2005

SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO., LTD.

Dec. 2010

LOGIS-WORKS CO., LTD.

July 2021● Eco Action 21 certification

33

SWCC Group Management Council

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Efforts to Conserve the Environment

Voluntary Environmental Action Plan
■ Medium- and Long-Term Environmental Plan “Green Plan 2050”
Recognizing that it is our mission to pass on our precious Earth to the next generation in a healthy state, we are working to solve
social issues through business and environmental activities that give higher consideration to ESG and Sustainable Development
Goals (SDGs).
In fiscal 2019, we formulated the Medium- and Long-term Environmental Plan “Green Plan 2050” based on the key concept ofzero environmental impact in 2050, and established a long-term vision and set 2030 targets. For the realization of this long-term
vision and the achievement of these 2030 targets, we set specific targets for each goal in the voluntary environmental action
plan. Specifically, we will divide them into three categories, namely, further promotion of the reduction of CO2 emissions andenergy conservation (low fuel consumption, power saving) in manufacturing processes including the development of newtechnologies, as well as energy conversion at plants, and we will address issues through Group-wide projects.

● Medium- and Long-Term Environmental Plan “Green Plan 2050”
Environmental goal

Target for FY2030

Target for FY2050

Global warming
prevention

Reduce CO2 emissions by 50% compared to thebaseline year (FY2013) results[The target has been raised as the initial target of
35% has already been achieved]

Effective use ofresources

Reduce final waste disposal volume by 50%
compared to the baseline year (FY2018) results●Promotion of sustainable use of resources●Achievement of zero final disposal (landfill) volume

Effective use ofwater resources

Reduce water consumption and wastewater
volume by 50% compared to the baseline year
(FY2018) results●Promotion of sustainable use of water resources●Realize products that do not emit CO or carbon
neutral products●Create products that resolve environmental
2

issues■ 7th Voluntary Environmental Action Plan (FY2021-FY2025)
The SWCC Group established the 7th Voluntary Environmental Action Plan in fiscal 2020 and started a 5-year initiative fromfiscal 2021. Based on this plan, we will pursue business and environmental activities that give higher consideration to SDGs, aswell as address social issues.
The 7th Voluntary Environmental Action Plan, which applies to all of the Group’s business locations in Japan, classifies goals
into the categories of global warming prevention, effective use of resources, effective use of water resources, and other, and foreach category, it outlines management items and attainment targets or indices for the final fiscal year.

● FY2021 Results for the 7th Voluntary Environmental Action Plan
Environmental goal

Global warming
prevention

Effective use ofresources

Effective use ofwater resources

Other

Category

Attainment targets or indices

Results

Energy savings(CO2 reduction)

Reduce CO2 emissions (Scope 1 + Scope 2) by 45%
by FY2025, using FY2013 results as a reference.
[The target has been raised as the initial target of
25% has already been achieved]

38% reduction

Reduction of waste
discharged

Reduce the amount of waste discharged at allsites by 5% by FY2025, using FY2018 results
as a reference.

18% reduction

Reduce the final waste disposal (landfill)
Promotion of
volume at major production sites by 50% byrecycling of resources
FY2025, using FY2018 results as a reference.

70% reduction
Implemented improvements suchas the reuse of packaging
materials and the elimination of
cushioning materials

Reduction of plastic
usage

Based on “Plastic Usage Guidelines.”

Reduction of water
usage

Reduce the amount of water usage by 20%
by FY2025, using FY2018 results as areference.

Enhanced managementof chemical substances

Based on “Green Procurement Guidelines.”

VOC*1 usage reduced by 13%
compared to FY2020 results

Expansion of environmental
contribution products

Based on “Environmental Contribution
Product Guidelines.”

Registered 12 environmental
contribution products

Conservation of
biodiversity

Based on “Biodiversity Conservation
Guidelines.”

Promotion of regional symbiosis andecosystem protection activities

0.1% increase*1 VOC: Abbreviation for Volatile Organic Compounds

SWCC SHOWA HOLDINGS CO., LTD.

34

Efforts to Build a Business Foundation● Environmental goal: Global warming prevention

We will work to reduce CO2 emissions in order to prevent global warming. In fiscal 2021, we achieved our targets forfiscal 2025 and fiscal 2030 with a 38% reduction compared to fiscal 2013 results. Although the amount of production
activities in fiscal 2021 increased by approximately 6% compared to fiscal 2020, CO2 emissions were reduced byapproximately 11% compared to fiscal 2020. The reduction can be attributed to the promotion of energy-saving initiatives
at production sites, as well as an increase in the ratio of non-fossil fuels in purchased electric power and city gas.
In response to this steady progress in reducing CO2 emissions, we have raised the target for fiscal 2030 to a 50%
reduction compared to fiscal 2013, and set a target for fiscal 2025, the final year of the 7th Voluntary Environmental
Action Plan, to reduce emissions by 45% compared to FY2013. In addition, we have added the following indicators to our
7th Voluntary Environmental Action Plan as a measure to achieve our new targets.
Additional
indicators① Increase renewable energy introduction rate to 30% by fiscal 2025
② Promote 100% electrification of company-owned passenger cars to be replaced by fiscal 2025 (electric vehicles: EV, PHV, HV)● Environmental goal: Effective use of resources

We will work to promote resource recycling by reducing waste discharge volume and reducing final waste disposal(landfill) volume. In addition, in the Action Plan, we have established an index of the reduction of plastic usage based on
Plastic Usage Guidelines.
The amount of waste discharged in fiscal 2021 was reduced by 18% compared to the fiscal 2018 results, achieving the
fiscal 2025 target (5% reduction). Factors contributing to this reduction include increased productivity and efficiency
improvements that resulted in a significant reduction in the waste discharge volume generated during manufacturing.
The final waste disposal (landfill) volume in fiscal 2021 was reduced by 70% compared to the FY2018 results,
achieving the fiscal 2025 target (50% reduction). Factors contributing to this reduction include the progress in thermal
recycling of waste plastic and resource recycling.
Although we achieved our fiscal 2025 targets for both waste discharge volume and final waste disposal volume, as with
CO2 emissions, a significant increase in production is expected after 2023, and there is concern about an increase in theamount of waste that will accompany this. Accordingly, we will further promote the sorting and recycling of waste andpromote initiatives to reduce the amount of waste.
As an initiative to reduce plastic usage, we have promoted the reuse and recycling of plastic packaging materials used
for product packaging. In addition, we have reduced plastic usage and simplified packaging by eliminating the plastic
cushioning materials used in product packaging and switching to cardboard-only packaging. These measures are currently being
implemented only for some products, but we will expand them to other products and strive to further reduce plastic usage.

● Environmental goal: Effective use of water resources

Under the 7th Voluntary Environmental Action Plan, we are newly looking at water resources and working towardsustainable water usage. As a measure for this, we will promote the circulation of cooling water and wash water, andmake an effort to use water resources effectively.
The amount of water used in fiscal 2021 increased by 0.1% compared to fiscal 2018 results. In fiscal 2021, we
considered specific measures to reduce water usage in the future and strengthened the monitoring of water usage.
Strengthening the monitoring of water usage has led to the identification of unnecessary water usage and the early
detection of water leakages. From fiscal 2022 onwards, we will promote measures to reduce water usage.

TOPICS 1 Introduction of Carbon-neutral City Gas at SWCC Showa Cable Systems
Co., Ltd. Mie Plant

At the SWCC Showa Cable Systems Co., Ltd. Mie Plant, we have reached
an agreement with TOHO GAS Co., Ltd. on the introduction of carbonneutral city gas, and we have switched part of the city gas used at the Mie
Plant to carbon-neutral city gas for the five years from October 2021 toSeptember 2026. The amount introduced is one million cubic meters per
year, which will contribute to reducing fuel-derived CO2 emissions at the
Mie Plant by approximately 30%. The carbon-neutral city gas that has
been introduced uses carbon-neutral LNG purchased by TOHO GAS Co.,
Ltd. from Diamond Gas International Pte. Ltd., a wholly owned subsidiaryof Mitsubishi Corporation, which offsets the CO2 (carbon offset) generated
in the processes from extraction to combustion of natural gas.

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SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Efforts to Conserve the Environment

TOPICS 2 Introduction of Renewable Energy through the PPA Model at SWCC
Showa Cable Systems Co., Ltd. Aichi Factory

At the SWCC Showa Cable Systems Co., Ltd. Aichi Factory, we concluded
a contract to purchase and consume all the electricity generated by thesolar power generation equipment installed by SMFL MIRAI Partners
Company, Limited. About 20,000 m2 of the roof space of the Aichi Factory isprovided, and SMFL MIRAI Partners Company, Limited has installed solar
power generation equipment with a panel capacity of 2,224 kW there. It will
be possible to supply approximately 2.2 million kWh of electricity annuallyfrom the installed power generation equipment. It is expected that this will
cover approximately 20% of the Aichi Factory’s annual electricity
consumption and reduce CO2 emissions from the Aichi Factory byapproximately 15%. The installation of the power generation equipment has
been completed, and operation began in April 2022.

TOPICS 3 Obtained Highest Rating in the DBJ Environmentally Rated Loan Programfrom the Development Bank of Japan for Third Straight Year

The SWCC Group obtained the highest rating in the DBJ Environmentally Rated Loan Program offered by Development Bank ofJapan Inc. as a company “with exceptionally advanced environmental initiatives.” This is the third straight year since 2019 that
the SWCC Group obtained this rating.
In this rating, the following initiatives were highly evaluated.
1. Aiming to further reduce energy consumption at the manufacturing stage, we established a company-wide project teamcalled the Green Energy Project, and, while setting medium-term goals, we are continuously working to reduce environmental
impact through our business activities, such as by increasing the number of newly registered products that contribute toenvironmental friendliness throughout their life cycle.
2. In fiscal 2021, we started a CSR questionnaire survey for our suppliers, and by implementing
improvement guidance based on the survey results, we are practicing supply chain management thattakes the environment and CSR into account.
3. In order to realize the vision “SWCC VISION 2030,” with the aim of promoting social problem-solving
DBJ Environmentally
Rated Loan Programbusiness, we are working to expand both corporate value and social value by, for instance, promoting
the use of renewable energy and developing the high-voltage power cable connection work system“SICOPLUS®,” which contributes to solving the labor shortage.

TOPICS 4 Showa Improvement Activity Presentation
In order to support such activities as quality improvement, productivity enhancement, health and safety, and environmental
conservation, and to boost employees’ awareness and increase the sophistication of activities, twice per year the SWCC Groupholds an event to present the achievements of activities by workplace circles and improvement projects selected from ouroverseas and domestic sites. The best achievements are reported at companywide conferences and implemented in other areas.
At the Improvement Activity Presentation, teams selected through a global preliminary competition make presentations, and aGrand Prize, Transformation Prize, and Business Management Prize are awarded.
At the Improvement Activity Presentation held in the second half of fiscal 2021, one team from outside Japan and 10 teams
from Japan participated and the team from LOGIS-WORKS Co., Ltd. was awarded the Grand Prize. Some of the plastic sheets
and stretch film used in the SWCC Group’s product packaging were disposed of as waste plastic after unpacking. LOGISWORKS Co., Ltd.’s made efforts to reduce the amount of waste plastic by promoting the collection and recycling of used plastic
sheets and stretch film after unpacking, and this activity that enabled recycling and aimed at environmental conservation and theeffective use of resources was highly evaluated.

Packaging material wrapped around the product drums (black sheets) Recycled plastic sheet

Grand prize-winning team at the 2nd Half FY2021 Showa Improvement Activity Presentation LOGIS-WORKS Co., Ltd.,SWCC SHOWA HOLDINGS CO., LTD.

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Efforts to Build a Business Foundation

Relations with Society

Supplier Relations (Supply Chain)■ 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 in fair 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.

■ CSR Questionnaire
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.
The SWCC Group conducts a survey on major suppliers regarding the status of their CSR initiatives. As of this fiscal year, we
adopted the Self-Assessment Questionnaire (SAQ) prepared by Global Compact Network Japan (GCNJ) for the survey. The
status of all 114 items, including CSR, human rights, labor, the environment, fair corporate activities, quality and safety,
information security, supply chain, and coexistence with local communities, is evaluated on a 3-point scale of 1 point, 3 points,
and 5 points.

● CSR Questionnaire Results
Duration of survey

June 2022

Target50 suppliers

Return rate

86% (43 suppliers)

No. of questions

114

Average score (on a 5-point scale)

3.8 pts

C: 9%(4 suppliers)

Percentage breakdown by grade

Analysis of the questionnaire revealed that 70% of suppliers are of thelevel sought by the SWCC Group (i.e., have a grade of A or higher) in theoverall evaluation.

Average scores by category

IX Coexistence withlocal communities

4.50

I Corporate governancerelated to CSR

4.00

II Human rights

3.50▪ S (average of 4 points or more)
Respondents: S: 53% ▪ A (average of 3 points or more)
43 suppliers (23 suppliers) ▪ B (average of 2 points or more)
A: 17%▪ C (average of 1 point or more)(7 suppliers)

B: 21%(9 suppliers)

VIII Supply chain

3.00
2.50

VII Information
security
VI Quality and safety

III Labor

IV The environment

V Fair corporate activities

Actions According to Assessment Category
Assessment category
Number of suppliers
Actions for improvement
S (average of 4 points or more)
23
Provide feedback along with averages of all suppliers and charts for score rates by major category
A (average of 3 points or more)7
B (average of 2 points or more)
9
Provide feedback on scores and requests for improvement by the next timeC (average of less than 2 points)
4
Exchange opinions and implement support for improvement after a meeting
When analyzing by individual questions, “Quality and safety” scored highest, with many suppliers receiving perfect scores. However, challenges
remain in “Corporate governance related to CSR,” “Human rights,” and “Coexistence with local communities.”
Next, we will examine the results of the survey in more detail, and then give feedbacks to suppliers on the results and conduct interviews with them togain a more precise understanding of their circumstances. Especially with those suppliers with B and C grades, we will provide support for improvement,
and have them establish a PDCA cycle, and thereby instill our CSR procurement policy and improve their level in cooperation with such suppliers.
The SWCC Group will continue conducting the CSR survey and engaging in efforts to build a sustainable supply chain, which includes addressing
the abovementioned challenges.

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SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

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Relations with Society■ Green procurement
Recognizing that it is a fundamental duty of humans living today to pass on our precious Earth to the next generation in ahealthy state, we do our best to make purchases that pay due consideration to this need in our material procurement activities,
and have formulated and released Green Procurement Guidelines to prioritize purchasing products with the smallest impact on
the environment as possible. Furthermore, through our website we put out an open call for proposals for environmentally friendly
products as follows:
1. Products and packaging that consider the following throughout the entire product lifecycle (from resource extraction to disposal).

● Reduction of environmental pollutants● Conservation of resources and energy● Reusability● Recyclability● Use of recycled materials● Ease of disposal

2. Dissemination of information● New environmental technology● Presentation of specific efforts■ BCP Measures in Procurement
Factors such as worldwide disruptions in logistics due to the recent COVID-19 pandemic and natural disasters throughout Japan
have changed the environment surrounding materials procurement, but we are accumulating knowledge by addressing thesechanges and striving to achieve more stable procurement and logistics.
One example is creating a “procurement map” that shows suppliers’ production sites. It helps us respond quickly and consider
alternative materials to procure when a disaster occurs. We work with manufacturing and sales departments to identify “keyproducts,” and every few years we revise the supply system to ensure materials used in those products can be purchased frommultiple regions.

■ Supplier Assessment System
With the aim of strengthening cooperation with excellent
suppliers and improvement activities by identifying issues, we
implement a Supplier Assessment System every year, in whicha wide range of departments, including manufacturing,
technology, quality assurance, research and development,materials, etc., evaluate important suppliers from their own
perspectives. This system has been in place since 2014 and weare striving to further strengthen cooperation by presenting
awards to excellent suppliers.

Excellent Supplier Award

SWCC SHOWA HOLDINGS CO., LTD.

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Efforts to Build a Business Foundation

Customer Relations (Quality Management)■ Basic Idea
Based on its management philosophy to strive to deepen the relationship of trust with customers through offering superior
technology and high-quality products and services, the SWCC Group establishes a quality policy and priority topics annually,
and makes group-wide efforts to improve quality.

FY2021 Quality Policy
1. Thoroughly comply with laws, regulations, and agreements with customers.
2. Achieve rapid technological development, services and manufacturing while working closely with customers.
● Fully demonstrate the Group’s sales capabilities, share customer needs throughout the Group without fail, andpropose new services based on a collaboration between sales, engineering, and manufacturing divisions.
● Achieve manufacturing that prioritizes quality customers can trust.
3. Carry out quality assurance activities to ensure all stakeholders are satisfied, including customers,
employees, and the local community.

FY2021 Priority Topics in Quality Assurance Activities
1. Maintain and improve our quality management system that is trusted by customers.
(Formulate themes that address risks and opportunities and implement a PDCA cycle)
2. Continue and strengthen initiatives to mitigate failure costs from the previous fiscal year.
(Make effective improvements in processes to reduce external complaints and in-process nonconformities.)
3. Achieve manufacturing with stable quality in all processes from the inquiry and order stage to delivery.
(Achieve manufacturing and services that utilize cutting-edge technology)
4. Carry out talent development to pass on and advance high-quality manufacturing expertise.

■ Organizational Structure for Promotion of Quality Management
Quality management of the SWCC Group is promoted under
the Group management council, and our Quality andEnvironmental Management Office, which serves as thequality supervision department, rolls out to each Group
company through the Quality Control Working Group.
The Group’s quality policy is developed by the Quality andEnvironmental Management Office, deliberated by the
Quality Control Working Group, and decided by the Groupmanagement council. The Quality and Environmental
Management Office periodically reviews the Group’s quality
management activities, sustains and improves the entire
Group’s quality management, and drives forward quality
management activities in accordance with the businessareas of each Group company.

SWCC GroupManagement Council

SWCC Showa Holdings
Board of Directors

SWCC Showa Holdings Quality Supervision Department(Quality and Environmental Management Office)Quality Control Working Group
Chairperson: Officer in charge of quality supervision, Secretariat: Quality and Environmental Management Office
Quality control supervision departments of each group company
SWCC Showa Cable Systems, SFCC, SWCC Showa Unimac, Fuji Electric Cable, AXIO, SDS
Operating departments of each company■ Initiatives to Mitigate Failure Costs
The SWCC Group implemented a quality cost approach in fiscal 2018 and has been carrying out quality improvement initiatives
ever since. “Quality cost” consists of preventative costs to prevent nonconformities, assessment costs to evaluate conformity,
and failure costs that incur when there are quality problems (i.e., nonconformities) in
products and services that do not meet requirements. The approach aims to optimize● Failure costs of domestic Group companies
the structure of costs that have incurred and improve quality.
(with FY2017 as 100%)
In fiscal 2021 we carried out activities with the aim of reducing failure costs by 10%
120
100 91compared to fiscal 2020, and achieved a 21% reduction. Looking at the breakdown of100
failure costs, we reduced internal failure costs caused by in-process nonconformities
80
67
that occurred internally by 15% compared to fiscal 2020, but external failure costs due
60
52
41
to customer complaints that occurred outside the company were 43% lower than in
40
fiscal 2020, and improvements have been made to prevent non-conforming products
20
from being released outside the company.
0
2017

39

SWCC Group Report

2018

2019

2020 FY2021

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society■ Quality Compliance Initiatives
In July 2021, we announced inconsistencies in testing with the methods determined with our customers for some products
previously manufactured and sold by our group company SWCC Showa Cable Systems Co., Ltd. We sincerely apologize for thegreat inconvenience and concern that this incident has caused to our customers and other related parties.
In response to the facts and causes identified by a Special Investigation Committee including outside attorneys and an Internal
Investigation Committee, we are working to strengthen the quality control system, thoroughly implement quality audits andcompliance, renew the SWCC Group’s quality culture, and create a system that will not relapse.
As part of this, we have set up the Quality Assurance Digitalization Project (hereinafter referred to as the “Digitalization Project”)
and the Quality-related Knowledge Cultivation Project (hereinafter referred to as the “Knowledge Cultivation Project”) directly under
the president. In the Digitalization Project, we will introduce digital tools to quality assurance inspection operations, improve thereliability of the process, and build a system that centrally manages all data related to quality assurance. Moreover, in the
Knowledge Cultivation Project, we create training tools for the knowledge necessary for manufacturing, quality assurance, design
and technology departments, knowledge about management methods, and knowledge about compliance, and we conduct mobile
training for group employees according to job grade. In addition to these two projects, we are enhancing the oversight of ouroperating departments through quality compliance internal audits conducted by the Quality and Environmental Management Office.
President andRepresentative Director
Issues directions
Quality Assurance
Digitalization Project

Audit Control Division

Supervise

Quality ComplianceInternal Audit(Quality and Environmental
Management Office)

System introduction
Audit

ReportQuality-related Knowledge
Cultivation Project
Training

Operating departments

Image of system configuration
Quality information
management
systemMeasuring equipment

ServerMeasuring equipment

Standard tolerance judgement

Test results report

Mobile training through the Knowledge Cultivation Project

For quality compliance internal audits, we have formed an investigation team that is independent from the operating departments
centered on the Company, and continuously and comprehensively confirm whether there is any inappropriate act related to quality
compliance. Investigation results are reported through the Group management council.
In fiscal 2021, we conducted audits of 10 departments at 4 domestic companies with increased accuracy, including preliminary
written surveys and interviews with workers. As a result of the audits, we identified 48 “items requiring correction.” Although allcases satisfied the requirements of laws and customers, there were inconsistencies with internal rules and there were deficiencies
in the rules themselves, and the audit team followed up on corrective actions to prevent serious inappropriate acts. On the other
hand, if there are cases requiring improvement in terms of quality or issues with the inspection system, securing human resources,
or passing down skills, we present them as “items requiring improvement” and propose proactive improvement initiatives.

SWCC SHOWA HOLDINGS CO., LTD.

40

Efforts to Build a Business Foundation

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 andinvestors 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.
We have also established a “quiet period” before each financial results announcement to prevent the leakage of financial
results information and ensure fairness. We refrain from commenting or answering questions on our financial results during thequiet period.

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

■ Dialogue with Shareholders and Investors
The company convenes the Ordinary General Meeting of Shareholders in June each year, where it receives questions andopinions from shareholders. The Group also strives to distribute financial information and press releases through newsletters forshareholders and the website.
For investors, briefing sessions for analysts are held twice a year (at the end of the second quarter and fiscal year), andvideos of these briefing sessions are distributed. In addition, the Group strives to facilitate communication between a larger
number of investors and our management team by holding small meetings four times a year (every quarter). At these meetings,
we also offer programs to match the themes of interest to our investors, with content such as briefings on each business by thechief of the relevant business segment and ESG briefings attended by outside directors.
One-to-one meetings are also conducted actively, both in Japan and overseas, upon the request of investors, except during
the “quiet period.”

The 126th Ordinary General Meeting of Shareholders

41

SWCC Group Report

Briefing session for analysts

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society

Employee Relations (Human Rights, Employment)
The human resources initiatives under the sustainability strategy outlined in the SWCC Group Mid-Term Management Plan
“Change & Growth SWCC 2026” are as follows.

■ Efforts for Human Resources Development
At the SWCC Group, we have formulated the SWCC Next Generation Business Leader Succession Plan to ensure sustainablegrowth and maintain and build a solid management structure from a medium to long term perspective. We use the following
process to help define our image of the qualities required of corporate officers.

● Next generation business leader selection process

The process applies to two types of candidates: “next generation business leaders” and “future leaders.” Next generation
business leader candidates represent a pool of talent that shows promise to be entrusted to run a Group company now.
Future leaders represent a pool of talent that shows promise to be selected to be next generation business leader
candidates in the next five years or so.
Candidates for the next fiscal year are nominated by the Group CEO by the end of the current fiscal year and chosen
by the Nominating Committee.
● Next generation business leader development process
The following training programs are offered to develop next generation business leaders.
❶ SD Seminar (Showa Director's Seminar, a business management seminar taught by directors)
Note: The SD Seminar has been held since 2017 for select young employees who have been nominated by the businesssegment chief and approved by the Group CEO.
❷ Future Leader Training❸ Next Generation Business Leader Training❹ Cross-industry Networking Training■ Efforts to Promote Health and Productivity Management
Health and productivity management is an 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.
Maintaining and improving the mental and physical health of employees can lead to enhancement of the company’scompetitive strength through improvement in labor productivity and in employee’s creativity by securing a healthy and stable
workforce. Thus, in April 2019, we formulated the SWCC Group health management declaration and disclosed it publicly on our
website. The SWCC Group actively engages in activities to support health as the foundation to creating an environment thatenables every employee to have rewarding jobs and work energetically with healthy minds and bodies.
Specifically, we are engaging in health and productivity management efforts by strengthening cooperation with the SWCC
health insurance association and establishing a group-wide health management organization system that is led by the President.
We have identified issues such as health guidance, passive smoking, infectious disease prevention, overworking, and mental
health, and are moving forward with a wide range of activities to support the health of employees in collaboration with industrial
physicians and public health nurses. 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 (large enterprise
category), jointly selected by the Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi, for three consecutive years.
[Change in awareness to improve health]
We have expanded health services to raise the health awareness of everyone, support healthy activities, and created anenvironment that enables everyone to work healthily and with peace of mind.
[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.
[Promoting the total prohibition of smoking in our company facilities (target for smoke-free declaration: FY2023)]
We have launched measures to provide totally smoke-free workplaces during working hours, based on a mutual understanding
between the views of smokers and non-smokers.
[COVID-19 countermeasures]
We have worked to prevent the spread of COVID-19 through measures such as the establishment of a special leave systemand the distribution of PCR testing kits.

SWCC SHOWA HOLDINGS CO., LTD.

42

Efforts to Build a Business Foundation[Efforts to maintain and promote female health]
We engaged in maintaining and promoting female health through measures such as assistance for gynecological healthchecks and examinations (including cancer screening) and the creation of environments that make it easier to takemenstrual leave (including disseminating information on the program, distributing booklets, etc.).
[Promoting new work styles under COVID-19]
We encouraged flexible and diverse work styles through measures such as the expansion of telework conditions and thepromotion of working at satellite offices.
[Recognized as a Sports Yell Company 2022]
We were selected as a Sports Yell Company 2022 in recognition of our active efforts to implement sports, not just as sporting
competitions but also as a way to improve the health of our employees.
At the SWCC Group, we are engaged in a wide range ofinitiatives centered on key measures based on our healthmanagement declaration.
We will continue to work actively to create workplaces
where all employees can engage in their jobs with healthand vigor.

● SWCC Group’s Organizational Structure for Promotion of Health and Productivity Management
Organization that heads the Group
Group Management Council
Issues directions
on policy

Advises/reports

Safety and Health Working Group
Issues directions
on policy

Sharesinformation

Organization that heads health insurance association
SWCC health insurance association
Issues directions
on policy

Reports activities

Health Management Promotion Committee

Proposes initiatives Collaborates Proposes initiatives

Reports activities

Safety and Health Committee of each region/company
SWCC Group employees■ Efforts for 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 tostrengthen our organizational capabilities while taking advantage of our diversity.

● Programs for Senior Employees

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. Recognizing the need to maintain and improve
motivation to lead to more active participation, in fiscal 2021 we increased career patterns and expanded options toaccommodate diverse work styles by creating multiple career patterns that take into account roles and duties besides theexisting senior employment program.
Career patterns❶ Standard Senior Program (for managerial track employees, skilled workers, and clerical staff) :Standard course for employees who wish to be reemployed after reaching the retirement age of 60, upon agreement
between the company and employee❷ Specialist Program (senior management and senior experts; for managerial track employees, management, andequivalent): New program
Course for professionals with outstanding managerial capabilities and/or specialized knowledge and experience❸ Short-time work, for which second job is permitted (for managerial track employees, skilled workers, and clericalstaff): New program
Course with reduced working hours that permits employees to take a second job for those who wish to broaden theirhorizons❹ Career Change Support Program (for managerial track employees): New program
Course that provides support to establish a life plan for employees who choose to retire and start a second life, suchas starting their own business or becoming reemployed● Female Empowerment

In line with the basic principles of the Basic Act for Gender Equal Society and the Act on the Promotion of Female
Participation and Career Advancement in the Workplace, we launched the Female Empowerment Project “SWCCarat” infiscal 2021. Directly under the control of the President, the purpose of the project is to drive initiatives to enable female
employees to fully demonstrate their individuality and capabilities, and participate even more actively in the workplace.
Under this project, we conducted an awareness survey of female employees in fiscal 2021. Based on the results of thissurvey, we held a lecture by President Hasegawa on envisaging careers for female employees lacking confidence, andsubmitted written requests to the SWCC Human Resources Department and presidents of each Group company on mattersconcerning the personnel system. In addition to being recognized as a leading company for female empowerment under the“SMBC Nadeshiko Loans” offered by the Sumitomo Mitsui Banking Corporation, we obtained “Eruboshi” mark certification
based on the Act on the Promotion of Female Participation and Career Advancement in the Workplace in July 2022.
(Please refer to the Special Feature page in this Integrated Report for details of the project activities.)43

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society

There is still ample room for the SWCC Group to raise the ratio of female employees and the ratio of women in management
positions. In view of this situation, we will engage in initiatives focused on women, actively provide recommendations andsupport for the creation of systems to enable diverse work styles, and implement a range of measures aimed at achieving
comfortable working environments for all employees.
(Female Empowerment Target) By FY2026, achieve:● 8% women in management positions, and● 10% women in section leader level and higher positions(Ratio of Women in Management Positions at the End of Each Fiscal Year)FY2021: 4.8%
FY2020: 3.7%
FY2019: 3.0%

SpecialFeatureThe Female Empowerment Project—Our First Step Towards Organizational Development to Utilize Diverse Perspectives—

Developing our organization by leveraging diversity is a key challenge for us, as we aim
to grow into a highly competitive company that can respond flexibly to a range ofdifferent needs. Due to the nature of the male-dominated wire and cable industry, the
SWCC Group has a low ratio of female employees and suffers from a resulting lack ofwomen in management positions. We also face a scarcity of female engineers in the
SWCC Group’s business domains. In view of this situation, we launched the Female
Empowerment Project (nicknamed “SWCCarat”) in April 2021, directly under the controlof the President. We have embarked on the full-scale implementation of measures forfemale empowerment, aiming for a ratio of women in management positions of 8% anda ratio of women in section leader level and higher positions of 10% by fiscal 2026.
LectureWe have been engaged for some time in enhancing programs to help employees tobalance work with child-raising or nursing. According to the results of the awarenesssurvey conducted under SWCCarat, however, we feel the need to eliminate
SWCCarat
unconscious bias, establish systems to support career development and build networks
A portmanteau of “SWCC”
among female employees, and create ample opportunities for each individual female(the SWCC Group) andemployee to grow and develop with confidence. As an initial awareness-raising activity,“carat,” a unit of weight for
we held a lecture on “Envisaging Your Career” by President Hasegawa. The message
precious stones,
that “we want you to concentrate on grasping the opportunities in front of you and doing
representing employees’
your best, without limiting yourself because you are a woman” resounded with manypotential to shine. The namefemale employees, and provided a good opportunity for them to think about their own
embodies our hope that all ofcareers. In fiscal 2022, we have planned training for each age level, intergenerational
the Group’s employees, notand interdepartmental social gatherings for female employees, and awareness-raising
just women, will radiate theirevents. We will support employees as they learn approaches to the active considerationownbrilliance through theirof careers in management and ways to overcome life-stage changes and difficulties,
work.
and assist in creating environments where they can continue to work with a genuine
sense of mutual growth through various interactions.
We also submitted written requests on matters concerning the personnel system. For example, some of our clerical staff,
who comprise 70% of all female employees, called for better evaluation criteria. SWCCarat requested the Human Resources
Department to further clarify the contribution made by clerical staff and implement systems and other measures to reflect thisin their treatment and remuneration. Revising the evaluation system in this way and clarifying the requirements for changing
career track would create an environment where ambitious employees can take on challenges on an equal basis with others.
At the same time, to enhance organizational strength, it is important to create environments where employees mutuallyrespect the value perceptions and standpoints of their supervisors and other employees around them, and help them tomake full use of their abilities. We will work with the Human Resources Department to enhance systems to respond flexibly
to employee needs, implement training courses to deepen understanding of diversity and build a system for individual followup interviews. In addition to these initiatives, we intend to continue to disseminate information to the local community andproactively recruit women in an effort to expand the absolute number of female employees.
Under SWCCarat, we aim to continue to ensure the opinions of our employees reach the ears of senior management and,
importantly, that they are reflected in action, to create environments that are comfortable and rewarding for all employees,
not only women.
We will promote the following measures.

Supporting Women’s Career Development

Training for each age level
Encouragement for women to actively embrace careers as leadersIntergenerational and interdepartmental networks for female
employees
Follow-up interviews with supervisors

Cultivating and Raising Awareness

Lectures to help raise motivation
Dissemination of information to the local community andparticipation in Riko-challe (supporting the development of female
science students in junior high school and high school)
Endeavor to expand the absolute number of female employees

SWCC SHOWA HOLDINGS CO., LTD.

44

Efforts to Build a Business Foundation

Employee Relations (Safety and Health Activities)■ Basic Idea
To build safe and comfortable workplace environments and expand its efforts to provide society with security and trust, the
SWCC Group promotes safety and health activities by complying with laws and regulations, and internal rules, and based on thepremise that “safety takes precedence over all” as well.

FY2021 Safety and Health Policy
1. Comply with laws and regulations, and internal rules such as work standards and work procedures.
2. Implement thorough education and training drills to raise the safety awareness of each employee.
3. Take proactive measures to prevent accidents.
4. Promote health of both mind and body.

FY2021 Priority Topics for Safety and Health Activities
1. Confirm rules such as work standards and procedures, and check level of compliance.
2. Strengthen education to raise the abilities of section heads and safety supervisors.
3. Accident prevention (efforts to mitigate risks).
① Practice KYT and KYK centered on young and inexperienced employees.
② Conduct patrols based on a check list and make improvements accordingly③ Make rounds of workplaces and enhance safety guidance by supervisors.

■ Organizational Structure for Promotion of Safety and Health Management
In April 2022, we established an independent Safety
Management Office based on our fundamental philosophy that“safety takes precedence over all.” Safety and healthmanagement is now promoted through the Safety Management
Office, which receives instructions from the Group management
council, and rolls out measures to each Group company throughthe Safety and Health Working Group.
The Group’s safety and health activity policy is developed by
the Safety Management Office, deliberated by the Safety and
Health Working Group, and decided by the Group management
council. The Safety Management Office regularly reviews thesafety and health activities of each Group company, andfacilitates problem-solving and accident and disease prevention.
Furthermore, each Group company establishes safety andhealth management systems based on the Industrial Safety and
Health Act and other relevant laws, and carries out safety andhealth activities in accordance with their business areas.

SWCC Group Management Council

SWCC Showa Holdings
Board of Directors

SWCC Showa Holdings Safety and Health Supervision Department(Safety Management Office)Safety and Health Management Working Group
Chairperson: Officer in charge of safety and health supervision,
Secretariat: Safety Management Office

Each Group Company, Site Safety and Health Committee

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

Operating departments of each company■ Current State of Industrial Accidents in FY2021 and Next Steps
The number of industrial accidents in the SWCC Group in fiscal 2021 was as follows: 30 inJapan, including four requiring leaves of absence, and 1 requiring leave of absence abroad. Thisis an increase from fiscal 2020. In terms of age group, the proportion of people involved inindustrial accidents who were 29 years old and under decreased from 46% to 27%, but in termsof group by experience, 43% of those involved had five years of experience or less, andaccident countermeasures for inexperienced workers remain a challenge. At SWCC Showa
Cable Systems Co., Ltd., the activities of the Safety and Health Promotion Offices established infiscal 2020 showed results, such as a reduction in accidents among young workers. However,
the total number of industrial accidents has not decreased, and further prevention activities will
A safety patrol
be implemented. From the perspective of health and productivity management, we have held
regular meetings of the Health Subcommittee from the second half of the fiscal year to promote the “health of both mind and body.”
In fiscal 2022, we established the Safety Management Office as an independent section to strengthen safety and healthactivities across the Group. We also plan to establish a training center aimed at cultivating safety awareness among all employees,
and we will promote safety education and training drills.
45

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society

Relations with Society (Social Contribution Activities)■ Basic Idea
The SWCC Group has formulated a Social Contribution Activity Policy as the basis to widely carry out activities that contribute tosociety. Based on this policy, we will gradually develop an internal foundation for initiatives such as a social contribution support
system, in order to become a company that earns the trust of and inspires stakeholders.

SWCC Group Social Contribution Activity Policy
The SWCC Group strives to instill a high awareness of social contribution among employees, and carries out awide range of worthwhile activities through its products and services and actions of its employees to achieve asustainable society.

■ Introduction of Social Contribution Activities Leave
The SWCC Group introduced social contribution activities leave in May 2022 as part of the Group’s social contribution. Thismeasure is designed to support employees to directly and voluntarily undertake social contribution activities.
Specifically, employees are allowed to take up to five days of accumulated leave*1 per year to participate in activities related to
the five key fields designated under the SWCC Group Social Contribution Activity Policy, as well as external seminars andlectures related to the SDGs and CSR.
*1 Up to 50 days of expired annual paid leave may be accumulated for use under the accumulated leave system
Five key fields

1. Security and safety
2. Environmental
conservation
3. Developing the next
generation
4. Invigoration of thelocal community
5. Technologicalassistance

ExamplesAssistance in disaster recovery
Environmental beautification andconservation activities
Educational activities
Sports volunteering
Participation in community events
Pro bono activities

Definition of social contribution activities● Activities that contribute to enhancing the futuresocial value, and consequently the economic
value, of the SWCC Group in accordance withthe 17 goals defined under the SDGs.
● This contribution may be provided either directly
or indirectly.

Permanent employees of SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable Systems Co., Ltd. (a total of approximately
1,400 employees) are eligible for this leave. We plan to expand the eligibility to include other Group companies in the future.
With the introduction of social contribution activities leave, we aim to encourage and support employees who undertake
concrete initiatives and cultivate a corporate culture that emphasizes social contribution activities.

■ Community Contribution Activities
Volunteer activities to reduce food wastage and assist various users are undertaken through initiatives to deliver food donatedby companies and individuals to these users. At the SWCC Group, we endorse these activities, and have donated items such asconfectionery, emergency food, and masks.
We will continue to actively drive activities to address a variety of social issues.

● SWCC SHOWA CABLE SYSTEMS CO., LTD. Mie Plant and SWCC
SHOWA UNIMAC LTD.
In August 2021, we endorsed the “Food Waste Reduction Initiative”
undertaken by the Inabe City Council of Social Welfare, and donatedconfectionery and masks that had been stored for an emergency.

● SWCC SHOWA CABLE SYSTEMS CO., LTD. Ebina Factory

In January 2022, through the food bank activities of Food Bank
Kanagawa, we donated emergency food that had been stored atfactories closed due to relocation.

SWCC SHOWA HOLDINGS CO., LTD.

46

Efforts to Build a Business Foundation

Risk Management■ Risk Management
Issue directions/Report

As the environment surrounding corporate management
Audit and
SWCC Showa Holdings
undergoes dramatic changes, accurately identifying andSupervisory
Board of Directors
assessing increasingly complex and diverse risks, andCommittee
preparing solutions, are crucial elements in managing acompany. We believe that building a sound risk
Issue directions/
Reportmanagement system and creating and seizing business
opportunities by taking appropriate risks will lead to
Risk Management Committee
sustainable growth for the Group. The SWCC Group carries
Audit Control
Chairperson: Group CEO
Compliance Hotline
out group-wide risk management based on three lines ofDivision
Secretariat:
RiskManagement
Officedefense: operating departments (first line), administration
departments (second line), and audit departments (thirdline). Specific activities are carried out through the Risk
Issue directions/
ReportManagement Committee, in which the Group CEO serves
as chairperson, and directors and executive officers of thecompany and presidents of major operating companies
Group companies
serve as members. Examples of the committee’s activities
include assessing risks, developing risk management plans
and solutions, and tracking progress of risk measuresthroughout the year. The committee’s proceedings arereported to the Board of Directors in a timely manner.
Furthermore, we are striving to strengthen our group-wide risk management system, which is essential for the continued
development of our businesses. We established the Risk Management Office within the Business Management Coordination
Department as a risk control department. The office supervises risk management of the entire Group, which includes handlingadministrative operations of the Risk Management Committee, formulating rules and guidelines, providing training, andmonitoring risks.

● Risk Management Training

In October 2021 we provided risk management training for Group officers andline managers. We welcomed Mr. Kiyotaka Kawasaki, Mr. Taku Ito, and Ms. Yui
Takagi, attorneys at Midosuji LPC Attorneys at Law, as instructors at thetraining. They lectured on issues such as corporate ethics and scandal casestudies, on the themes of “corporate governance” for officers and “compliancerisk” for line managers. We will continue to provide regular training courses onrisks and compliance, and strive to increase employees’ knowledge andawareness of risks.

Risk Management Training● Major Identified Risks

Whether or not any risk falls under a major risk that could have significant impact on investors’ decisions is determined by
the Risk Management Committee through identification, analysis, and evaluation of risks. Specifically, the Committeequantifies risks listed by Group companies in accordance with their level of impact and probability of occurring. Based on
this, the SWCC Group assesses any risk that could have significant impact as a major risk and takes measures against it.
The following have been assessed as major risks.

FY2021 Major Risks
Risk category

Naturaldisasters

Changes in
raw material
prices47

SWCC Group Report

Details of identified risks

Major initiatives

Remaining risks● Suspension of operations, shutdown• Formulated Business Continuity Plan
(BCP) that includes the supply chain toensure smooth initial response against
anticipated risks• Made systematic investments tostrengthen infrastructure equipment at
manufacturing sites• Purchased fire and other insurance• If substantial restrictions in planned
production activities occur, such as
prolonged deterioration of social
infrastructure functions caused bypower shortages, logistics delays,
and other problems, it would have ahuge impact on performance.

● Changes in prices of copper,
which is the key raw material● Changes in prices of• Enhanced management via organizationthat oversees group procurement• Reduced inventory through planned,
stable procurement• Shifted costs to product prices• Hedged risk of copper price fluctuation
by utilizing futures trading, etc.

• If shifting costs to product prices isdifficult or loss occurs due to adramatic drop in market prices, itwould have a significant impact on
our performance.

of logistics functions, and otherproblems at manufacturing sites
caused by the following disasters:• Natural disasters such as
massive earthquake, typhoon,
and flooding• Accidents such as fire

petrochemical products such aspolyethylene

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Risk Management

Risk category

Details of identified risks

Major initiatives

Remaining risks● Impact of COVID-19• Actions taken by the COVID-19
Emergency Response Center (confirm
safety of employees, prevent infection
within and outside the company, etc.)• Built a business continuity system thatuses online tools, etc.

• Shrinkage of the market, disruptionsin the supply chain, and constraints
in business activities caused by thecontinuing pandemic will have asignificant impact on our financial
position and results of operations.

● Stoppages and delays in the• Mitigated risks by diversifying procurement
sources and engaging in multiple purchasing• Thoroughly managed individual
procurement sources (manage risks ofclosure and business discontinuation)• Impact of stoppages and delays in the
procurement of raw materials on
business activities and operating results• Rise in procurement costs resulting
from procurement difficulties● The emergence of quality issues(faults and defective products)● Manufacturing and selling• Monitoring by the Quality andEnvironmental Management Office andaudits by the Audit Control Division• Ensured thorough quality control andprevent violations through the promotionof the digitalization of quality assurance• Rolled out a group-wide education program• Purchased liability insurance• Compensation for damages andproduct liability claims arising from
quality issues• Damage to trust and reputation from
quality issues● Risk of violating laws, regulations,and rules concerning the tax system● Risk of violating obligations under• Fostered group-wide complianceawareness and strengthened thesystem of checks by the Legal Office.
• Implemented training and workshops
concerning compliance• Worked to detect any violations throughthe use of the internal reporting system• Disciplinary measures, sanctions, or otherpenalties imposed by regulatory authorities• Possibility of claims for damages or demands
for the cessation of transactions frombusiness partners and other relevant parties• Damage to trust or reputation due tobeing considered lacking incompliance awareness• Strengthened our response toenvironmental and climate change issues
and actively disclosed related information• Rolled out group-wide environmental
projects• Considered capital expenditure standards
taking environmental response into account• Loss of trust and negative impact on
recruitment or business results fromdelays in responding to environmental
and climate change issues• Decline in profitability due toballooning manufacturing costs in themedium and long term

Pandemic

Supply chain
disruptions andbreakdowns

Quality issues

Compliancesupply of raw materials due tosupply chain disruptions andbreakdowns

products that violate productstandards, laws, regulations, oragreements with customers

contracts or transactions withbusiness partners or others● Loss of trust due to behavior by

officers or employees that is
unacceptable based on social norms● Impact on business from delays
Environmentand climatechangeand other problems in responding
to environmental and climatechange issues● Growing cost of reducing CO2 emissions● Rise in energy-related
procurement costs■ Information Security
The SWCC Group has established its Information Security Policy, and revises its countermeasures against the constantlygrowing risk of cyber-attacks and information leakage, providing annual training for employees based on these. 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 sothat confidentiality, integrity, and availability are ensured to help customers and employees use information assets securely.
We will continue to maintain these guidelines and this environment at all Group companies.

● Information Security System

The IT Strategy Promotion Committee is a committeeorganization consisting of IT administrators of operatingcompanies under the Group’s direct supervision, anddevelops IT security measures, plans and implements
training on security, and proposes investments in security
measures. AXIO Corporation, an operating company under
the Group’s direct supervision, operates the Committee,
assuming responsibility for the building, maintenance, andoperation of IT infrastructure.

SWCC Group Management Council

SWCC Showa Holdings Board of Directors

IT Strategy Promotion Committee
Chairperson: Officer in charge of IT
Group company AXIO
Secretariat: ICT Promotion Department
Build, maintain,
Obtain ISMS certificationand operate an IT
Review and revise the
Receive PrivacyMark certification
environment
Security Guidelines
IT infrastructure/security measures● FY2021 Initiative Results
We provided training on information security to all employees in the Group, including officers, from December 2021 to
February 2022. In September 2021 and March 2022, we conducted email drills on all Group companies in Japan (fakespam was sent to randomly chosen employees to determine whether they were able to take the correct action) as acybersecurity measure against targeted email attacks that have become more sophisticated in recent years. The email drills
we have conducted since fiscal 2020 have resulted in a decrease in the proportion of fake spam email that employees
open, compared to the result of the drill in early days. The rate of computer virus infection relative to the number of spam
emails is also in a declining trend, showing the effectiveness of these email drills.
SWCC SHOWA HOLDINGS CO., LTD.

48

Efforts to Build a Business Foundation● FY2022 Initiative Plan

In fiscal 2022 we plan to provide information security training and conduct two email drills. Previous email drills wereconducted with the aim of reducing the proportion of spam emails that employees open. However, partly due to thesuccessful results of these drills, in the fiscal 2022 drills, we will establish a process to take to deal with any spam email thatthey have opened and system of notification in such a case, and train them to take the proper measures after opening suchan email. Through these initiatives, we plan to progressively improve CSIRT throughout the Group.
The SWCC Group is committed to enhancing and ensuring compliance through continuation of these initiatives.

■ 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 in a quick and planned manner to continue business. For that reason, during non-emergency times, we steadily workon BCM (Business Continuity Management), which is intended to maintain and improve capacity to continue organizational
business.
The Group reviews the disaster prevention system at each site, selects priority business operations within the Group in time of
emergency, and examines strategies and measures to continue business and restore it quickly.
In fiscal 2021, based on the BCM system that we have established at each of our sites in Japan, we conducted facility
inspections in accordance with the plan, took precautionary measures, verified their effects through regular drills, and reviewed the
BCP manual to ensure that it was appropriate for the current situation. We also expanded deliberations on applicable natural
disasters to include typhoons and torrential rains in addition to earthquakes and tsunamis while referring to local hazard maps, andcarried out activities to enable each site to operate more independently in line with its location.
Recent years have seen the frequent occurrence of weather-related disasters. For flooding, in particular, unheard-of amounts ofrainfall are being recorded across Japan due not only to typhoons growing in scale and intensity, but also to localized torrential rain
and lengthy periods of rain. To prepare for disasters such as these, we have prepared a flood response timeline determining “whataction to take and when to take it, in the event that heavy rain is forecast.” We are also reviewing other responses necessary forbusiness continuity, including updating information on disaster forecasts such as the flooding of factory buildings and equipment
and transport network disruptions due to landslides and mudflows, and reflecting this information in our countermeasures inadvance of the disaster occurring.
Furthermore, in order to combat the spread of COVID-19, we have centralized the Group’s communication system related to
COVID-19 around SWCC Showa Holdings Co., Ltd. In addition, as a company involved in infrastructure, we facilitated teleworking
and staggered working hours at sales locations and offices, while our manufacturing and business sites continued businessactivities by carrying out exhaustive infection prevention measures. We also put a teleworking environment in place, which
includes introducing smartphones for the internal phone system, converting to a non-territorial office system, expanding the use ofmobile computers and Wi-Fi, facilitating online meeting systems, utilizing satellite offices, and implementing workflows. And weformulated and carried out the New Business Practice Guidelines to enable business to continue during the pandemic.
In fiscal 2022 we will continue to carry out exhaustive measures to prevent the spread of COVID-19 and strive to promote
diverse work styles and improve operational efficiency even further, with a focus on business continuity in times of emergency.

■ Compliance
The SWCC Group considers compliance to be one of its most important management issues and takes various measuresinternally 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 the Act against Delay in Payment of
Subcontract Proceeds, etc. to Subcontractors and the Construction Business Act, to promote compliance widely.
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.
In fiscal 2021 we worked to boost compliance awareness further by addressing the issues learned from a compliancequestionnaire survey conducted after the previous fiscal year’s sessions and reflecting them to this fiscal year’s sessions andtraining.
The SWCC Group is committed to enhancing and ensuring compliance through continuation of these initiatives.

49

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Risk Management/Corporate GovernanceCorporate 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).

■ Changes in Governance
Year

2006

Organizational design
Total number of officers

2018

2019

2020

2022

Company with an audit and supervisory committee (from June 2019)

13

14

10

7

7

7

9

10

7

7

7

7

0

2

2

3

3

3

4

4

3

—

—

—

—

—

—

Directors
Outside directors
Auditors
Outside auditors

3

3•Changes to holding company

Topics2016

Company with a board of statutory auditors (to June 2019)2•Appoints outside directors(from June 2015)•Establishes Nominating
Committee (December 2018)•Establishes Compensation
Committee (December 2018)•Starts evaluating effectivenessof the Board of Directors•Establishes Chairman of the•Strengthens authority of
executive officers (April 2019) Board of Directors (April 2020)•Establishes Group CEO (June •Implements restricted
share-based remuneration
2019)
plan
•Abolishes position of director•Abolishes advisor system■ 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.
1 By delegating substantial decision-making authority for the execution of business operations to the executive officers, we
aim to increase the efficiency and speed of business execution.
2 Based on the above 1, at the meetings of the Board of Directors, we will further enhance the deliberations on important
themes such as management strategy.
3 The Audit and Supervisory Committee will play a central role in strengthening the auditing and supervisory functions.

● Corporate Governance System Diagram
Shareholders’ Meeting
Supervise

Enhance supervisory function through the establishment of the Nominating Committee, Compensation Committee, and Audit and Supervisory Committee

Nominating
Committee

Compensation
Committee

ReportRecommend

President and Representative Director(Holding Company)

Audit

Audit
Audit and Supervisory Committee
ExecuteRisk Management Committee Collaborates Sustainability Committee

Audit Control Division

Group CEO

Compliance/riskmanagement

Accounting Auditor

ReportBoard of Directors (Holding Company)

Internal audit
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

Chief of Energy andInfrastructure Business
Segment

Chief of Communication andIndustrial Devices Business
Segment

Chief of Electrical Equipment
and Components Business
Segment

Chief of New Business Segment● Supervising Group Management, Supervising Operational Restructuring andGovernance Reforms● Assistant for Supervising Governance Reforms● Supervising Business Management, in charge of Quality and Environment,
Finance Strategy, and Shared Service Preparations● In charge of Management Strategy, Investment Strategy, and Public Relations / IR
● In charge of DX and Cybersecurity● In charge of Overseas Business and Wire Harness Business● In charge of General Affairs, Human Resources, Human Resources Development,
Safety and Health, and Materials Procurement● In charge of Funds Management, Accounting, and Credit● In charge of Sustainability, Legal Affairs, and Risk Management● In charge of Sales Coordination, Sales and Logistics Reform● In charge of Smart Stream Strategy and Electric Power System Strategy

Electric wires,
power cables,
electric power equipment,
engineering,aluminum wires,
electric materials for equipment,
seismic isolation equipment,
vibration control and isolation,etc.

Communication cables,
optically processed products,
electric wires for equipment,
wire harnesses,
precision devices, etc.

Magnet wires,
bare wires,
oxygen-free copper,
copper alloy wires,
electric wires for automobiles,
etc.

Medical,factory automation,and network field

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

Audit

Businessmanagement

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

Other domestic and overseas Group companies

SWCC SHOWA HOLDINGS CO., LTD.

50

Efforts to Build a Business Foundation

Board of Directors FY2021 Held 21 times
Purpose and authority

President

InsideOutsideComposition
3 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.

4 directors who are Audit andSupervisory Committee members

Audit and Supervisory Committee FY2021 Held 17 times
Purpose and authority

Composition

To audit and supervise the execution of directors’ duties through monitoring andverification of the internal control system and effective cooperation with an accounting

4 directors

auditor, the internal audit department, and other departments, in accordance with theaudit policy and plans set forth by the Audit and Supervisory Committee.

Nominating Committee FY2021 Held 8 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 FY2021 Held 7 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 reportbased on consultation with the Board of Directors.

Composition
5 directors**Increased by 1 in July 2022

Risk Management Committee FY2021 Held 3 times
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.

17 committee members

Sustainability Committee: Newly established in June 2022
Purpose and authority
To strengthen the sustainability structure with the aim of conducting sustainable

Composition
1 chairperson

corporate operations from the perspectives of the environment, society, and theeconomy, based on the SWCC Group’s management philosophy.

51

SWCC Group Report

14 committee members

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Corporate Governance■ Policy on the Structure of the Board of Directors
Based on our management philosophy, in which the keyword is “trust”, our basic policy for corporate governance is toconduct activities with the recognition that speeding up and streamlining management as well as enhancing relevant
monitoring functions are universal challenges for all companies.
In accordance with this policy, we appoint people as directors who exhibit excellent character and insight, and cansupervise and manage the company. And in order to strengthen the monitoring function, we require directors to haveexperience running a company, and appoint people with extensive knowledge and experience in a wide range of different
fields including sales, finance, and manufacturing to ensure a well-balanced team. A skill matrix presenting the composition of
the Board of Directors and the knowledge and experience possessed by each director is shown below, together with thereason for selecting each skill.

● Directors’ Skill Matrix
Essential skill
Name

Takayo Hasegawa
Dongcheng Zhang
Guoqiang Hu
Kiyoshi Togawa
Yuji Sakakura
Seiichiro Ichikawa
Takashi Togawa

Corporate
management

●
●
●
●
●
●
●

ESG

●
●
●
●
●
●
●

Industrial
insight●●●

Overseasbusiness

●
●
●
●

Sales

●
●

●

Accounting &FinanceResearch

Manufacturing

●
●
●
●

●

● Reason for Selecting Each Skill
SkillsReasons for selection

Corporate
management

Directors possessing robust knowledge and experience in corporate management, who can promote thesustainable growth of the SWCC Group’s corporate value, are essential to achieve the goals of the midterm management plan “Change & Growth SWCC 2026.”

ESG

Directors possessing robust knowledge and experience in issues such as climate change, sustainability,
and strengthening corporate governance are essential for us to aim to promote a social problem-solving
business, realize a sustainable society and improve corporate value based on our accumulated
technologies and experience in the business, pivoting on the axis of trust as stated in our management
philosophy.

Industrial insightIn order to swiftly grasp the changes in the business environment surrounding the company and achievesustainable growth in areas such as the Energy and Infrastructure Business, Communication and Industrial
Devices Business, and Electrical Equipment and Components Business, directors possessing robust
knowledge and experience in the industries relevant to aforementioned businesses are essential.

Overseasbusiness

Directors possessing experience in overseas business management and robust knowledge andexperience in overseas business environments are essential to sustainably grow overseas businesses.

Sales

Directors possessing robust knowledge and experience in grasping and analyzing market trends andformulating sales strategies are essential to provide high value-added products.

Accounting &Finance

Directors possessing robust knowledge and experience in accounting and finance are essential to
implement growth investment aimed at sustainably enhancing corporate value, as well as promoting
management that will improve capital efficiency based on the key management indicator of ROIC
(return on invested capital).

Research

Directors possessing robust knowledge and experience in a wide range of research and development
activities, including fundamental research, are essential to solve social issues in fields such as theenvironment and energy, disaster prevention and infrastructure, and lifestyles and mobility.

Manufacturing

Directors possessing robust knowledge and experience in product manufacturing technologies andknow-how are essential to manufacture products with appropriate quality.

SWCC SHOWA HOLDINGS CO., LTD.

52

Efforts to Build a Business Foundation■ Evaluation of the Effectiveness of the Board of Directors
We conduct analysis and evaluation of the effectiveness of the Board of Directors each fiscal year to verify that Board functions
properly. Specifically, based on the answers to the questionnaire for all directors, the Board of Directors shares the results of theevaluation and issues found, and holds a constructive discussion on the ideal state of the Board going forward.
This year’s evaluation is carried out from multiple perspectives, such as the composition and operation of the Board of
Directors and agenda items.
To summarize the results of evaluation, it was first determined that the operation of the Board of Directors is being conducted
appropriately by the Chairman of the Board of Directors and deliberations are being held in an atmosphere of candor andopenness. Next, several issues were determined regarding agenda items and other matters, that opinions ascertained from IR
and other activities are sufficiently discussed as agenda items at Board meetings, and that sufficient follow-up has been maderegarding the status of execution and results about the proposals deliberated by the Board. In addition, it was determined that
the Nominating Committee and Compensation Committee are functioning effectively. Therefore, as the results for each
evaluation item were mostly favorable, it was determined that, on the whole, the Board of Directors is functioning appropriately
and that its effectiveness is ensured.
On the other hand, we also recognize that further examination is needed. Regarding the operation of the Board of Directors,
the evaluation revealed that we need to further examine ways to improve effectiveness through more efficient operation andenhance the deliberation of agenda items and other matters related to the broader direction of the company, such as
management strategy, etc. We also need to cultivate deeper discussions on corporate governance. We will continue working to
make improvements.

■ Officers’ Remuneration
The Board of Directors has resolved on the decision-making policy regarding matters such as directors’ individual remuneration.
To ensure independence and objectivity, this resolution was based on deliberation and reporting by the voluntary Compensation
Committee that includes independent outside directors.
Furthermore, the Board of Directors determined that directors’ individual remuneration for the current fiscal year was in linewith the decision-making policy because it was confirmed that the method for determining remuneration details and the decided
remuneration details were consistent with said decision-making policy and recognizing the report from the Compensation
Committee.
The details of the decision-making policy related to matters such as directors’ individual remuneration are as follows.

● Composition of Remuneration
The remuneration for directors (excluding directors who are Audit and Supervisory Committee members) is comprised of a
fixed remuneration and performance-linked remuneration.
Type

Category

Fixed remuneration

This is calculated uniformly based on the following indicators and formula taking into accountthe balance of short- and mid-term target incentives, the maximum amount of which is equal toa certain percentage of the fixed remuneration. Directors who do not perform executive duties(including directors who are Audit and Supervisory Committee members) are not paid
performance-linked remuneration.
❶Indicators:• Operating income achievement ratio (A)= (current operating income outlook ÷ current
operating income target) x 100%
• Mid-term operating income achievement ratio (B)= {(operating income 2 years prior +operating income 1 year prior)÷ (operating income target 2 years prior + operating incometarget 1 year prior)} x 100%
• ROIC achievement ratio (C) = (current ROIC outlook ÷ current ROIC target) x 100%
❷Reasons for selecting indicators:
The operating income achievement ratio and mid-term operating income achievement ratio
have been set as indicators of profitability, and the ROIC achievement ratio has been set as anindicator of capital efficiency. It has been determined that providing incentive to achieve thesetargets will lead to improving mid- to long-term corporate value.
❸Performance regarding indicators:
For this fiscal year, each target set for each indicator has been achieved.
❹Formula
Performance-linked remuneration = Maximum performance-linked remuneration amount × (A ×
40% + B × 30% + C × 30%)

Performance-linked
remuneration

Remuneration to
grant restricted
shares53

SWCC Group Report

Details
This consists of a basic remuneration and additional job-based remuneration that is dependent
on the director’s duties and responsibilities.

Remuneration to grant restricted shares is paid in order to accelerate value sharing between
directors and shareholders. A certain percentage of the performance-linked remuneration is
uniformly paid in the form of remuneration to grant restricted shares.
Directors who do not perform executive duties (including directors who are Audit andSupervisory Committee members) are not paid the remuneration to grant restricted shares.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Corporate Governance● Percentage Breakdown of Remuneration

The percentage of fixed remuneration, performance-linked remuneration, and remuneration to grant restricted shares thatmake up total remuneration are reevaluated by the Compensation Committee each time. Furthermore, the total amount of
remuneration for directors (excluding directors who are Audit and Supervisory Committee members) shall not exceed¥300 million per year. Remuneration for fiscal 2022 shall be paid as follows: performance-linked remuneration shall be
paid up to a maximum of 30% of fixed remuneration, and an amount equivalent to 50% of said performance-linked
remuneration shall be paid as remuneration to grant restricted shares.
Performance-linked remuneration(maximum of 20% of fixed remuneration)

FY2020 Remuneration
Fixed remuneration

FY2021 Remuneration

80%

16%

4%

Remuneration to grant restricted shares(paid as 25% of performance-linked remuneration)

Performance-linked remuneration(maximum of 20% of fixed remuneration)

Fixed remuneration

77%

15%

8%

Remuneration to grant restricted shares(paid as 50% of performance-linked remuneration)

10%

Remuneration to grant restricted shares(paid as 50% of performance-linked remuneration)

FY2022 Remuneration
Fixed remuneration

69%

21%

Performance-linked remuneration(maximum of 30% of fixed remuneration)● Payment Schedule
Monetary remuneration combining fixed and performance-linked remuneration for the fiscal year shall be paid in equalamounts each month starting the first month of the fiscal year. Remuneration to grant restricted shares shall be paid by themonth following the Shareholders’ Meeting of that fiscal year, under the condition that the director has been appointed orreappointed at said meeting.
● Process to Decide Remuneration
The amount of individual remuneration for directors (excluding directors who are Audit and Supervisory Committee members;
the same applies hereinafter in this section) is decided by the President and Representative Director of the company, Takayo
Hasegawa, within the total amount of directors’ remuneration established at the Shareholders’ Meeting, under the condition of
considering factors such as the report by the Compensation Committee, policy for deciding remuneration of directors andothers established by the company, and the assessment results based on the performance reviews of directors.
Objectivity and transparency in the process to decide the remuneration is ensured by consideration of perspectives such as
the reports issued by the voluntary Compensation Committee that includes independent outside directors, compliance with thepolicy on deciding remuneration of directors and others established by the company, and assessment results based on theperformance reviews of directors conducted by the voluntary Nominating Committee, majority of which comprises independent
outside directors. Measures are also taken to ensure authority is exercised properly without arbitrary decision-making.
The reason the President and Representative Director was delegated is that it was determined that said person has
thorough knowledge of matters such as the environment that surrounds the company and its business conditions, and issuitable for making assessments that take into account the directors’ duties and abilities.
The remuneration for directors who are Audit and Supervisory Committee members is decided based on discussion among
directors who are Audit and Supervisory Committee members, within the maximum amount established at the Shareholders’Meeting, in accordance with Paragraph 3, Article 361 of the Companies Act of Japan.

SWCC SHOWA HOLDINGS CO., LTD.

54

Efforts to Build a Business Foundation

Discussion by Outside Directors

We will support the new SWCC in its
challenge to pursue sustainability
management and deliver growth.

Our three outside directors, who come from a variety of backgrounds, namely corporate
management at a manufacturer, finance, and production technology, give their assessmentof the SWCC Group’s operations and talk about their expectations for the future.

Yuji Sakakura

Kiyoshi Togawa

Seiichiro Ichikawa

Outside Director, Audit andSupervisory Committee Member

Outside Director, Chairman of the Audit andSupervisory Committee

Outside Director, Audit andSupervisory Committee Member

Sustainability management as seen froman external perspective
Togawa:Since Ms. Hasegawa took on the role of President
and CEO, restructuring has been ongoing, and at the sametime efforts to pursue ESG management have madeprogress. For example, regarding environmental themes,
awareness of carbon footprints has risen, and we havestarted to see proactive developments such as supplying
eco-friendly materials for EVs. As for human resourcerelated themes, the SWCCarat project to empower women isgetting lots of things done. This fiscal year saw the launch of
the Sustainability Promotion Office, marking the beginning ofa management approach based on sustainability, with theCompany endorsing the TCFD recommendations and setting
up the Sustainability Committee. We outside directors alsojoin the other officers on management retreats*, where wetake part in discussions on sustainability strategy.
For me, when pursuing sustainability management, it’s
important to ask the employees who are putting it into
practice what sort of concrete action they are taking, andhow they are weaving that into initiatives on the frontline.
With the SWCCarat project, I think it’s hugely valuable thatthe people involved are pressing for change internally as
they carry out their work on the frontline.
Sakakura:For a company, the goal of sustainability
management is to achieve sustainable growth anddevelopment of its business, and I think preservation of theearth’s environment and the sustainability of social
infrastructure are given consideration so as to achieve that
goal. To ensure the sustainable growth and development of
the business, what’s important is to take action in the area of
human resources, and in the SWCC Group, what I am
especially focused on is succession planning. The Company
has put in place mechanisms for building up its personnel
foundation. Future Leader Training, which seeks to nurture
not only the next generation of senior managers, but also
candidates for middle-manager posts from among
employees who have been with the Company for about 15
years, is one such example of this. Another is SD Seminar,
which caters to younger employees. I really rate the way thatthe employees who have participated in these programs are
now acting as change makers, driving incremental
improvements on the frontline.
Since last year I’ve been serving as an SD Seminar
lecturer, and when I exchange views with personnel
managers, I tell them about issues with the selection of* Management retreat: Opportunity for all directors (including outside directors), executive officers, and fellows to get together toexchange opinions on the various management issues facing the SWCC Group in a focused and constructive manner

55

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Round-table Discussion among Outside Directors

themes that I have noticed in my work as a lecturer. There isroom for improvement. For example, themes could bechosen that encourage action by younger employees aschange makers. Even so, for some of them, their
participation in the SD Seminar has led them to take steps
that have paved the way to the rollout of new businesses,
such as Kaeruya, an EC site for selling electric wires andmaterials, so I think it’s a really useful initiative.
Ichikawa:Even compared with other companies, I think
succession planning is being conducted to an adequate
degree. Although the initiative has only just got started, I’mlooking forward to the results it produces in the future.
Togawa:When I took up the post of an outside director of theCompany seven years ago, it was impossible to see where
and what sort of human resources existed. Now that Future
Leader Training and SD Seminar have been launched,human capital has become more visible, so going forward it
will be important to think about what sort of tasks to assign
promising people, and what sort of output to require them toproduce.
Sakakura:Even in the SWCC Group, I feel that a senioritybased approach is still deeply rooted in places. So how canthat be swiftly overcome, and transformed into job-centered
motivation, sense of mission, and engagement? Creatingjobs and a company that draw personnel with careers andtalent into the SWCC Group will likely be the key to humancapital-driven sustainability, and I think the chance to do thatis now.
Ichikawa:Meanwhile, in the area of governance, as an
outside director I am paying close attention to how thequality problems that occurred last year are being dealt with.
An investigation committee chaired by an outside attorney
has been set up, and even after reporting its findings, it iscontinuing to investigate the matter. Quality and compliance
audits are also being conducted internally, and I feel that theoverall response has been appropriate and that governancehas proved effective.
At the same time, action is being taken to improve thesituation going forward. For example, quality operations arebeing digitalized to prevent recurrences, the opinions offrontline employees are being heard, and a “knowledge
deepening project” to sit people down and get them talking
about monozukuri (manufacturing) and quality is underway.
And when I visit workplaces, I notice that these sorts ofinitiatives have been truly accepted not just by the higherups but also by young personnel.
Togawa:I also hold the steps you’ve just mentioned in highregard, but I’m concerned that there’s a disconnect between
the management frontline in terms of governanceawareness. Words such as materiality and ESG come first,
and even if mechanisms and structures are put in place,unless people put their heart and soul into them, they are
pointless. More effort is needed to shrink the distance fromthe frontline.
Sakakura:The SWCC Group has a serious culture, and I
feel that sincere effort is also being made in the area ofgovernance, but perhaps Group-based management hascreated a sense of distance from the frontline. I hope that thenext term’s reorganization of the Group to center it on SWCC
Corporation will lead to a greater feeling of unity within theGroup.
Ichikawa:While there are no problems with governancestructures and direction, these days speedy responses are
required, so it’s vital to properly check whether the frontline
side is keeping up with comprehending and absorbing theawareness of the importance of governance on the
management side.

Birth of the new SWCC andfuture governanceTogawa:The SWCC Group has followed a long path as an
old-established electric wire manufacturer, and was once
blessed with a stable market environment and greatcustomers, most of which were large corporations. This led
to the lack of responsiveness in adjusting growth strategy,
which I think was what caused its financial condition to
weaken. Subsequently, discussions took place on how to
restructure the Group to ensure its survival, but the ideas
generated somehow never made it to the implementation
stage. It was only when Ms. Hasegawa took over the reinsthat concrete action started to be taken. A Groupmanagement structure based on business segments was put
in place, and with operating efficiency and profitability
improving, the next topic to come up was whether the holding
company structure was really needed. For outsiders, theholding company acted as a shield for the Group, making it
difficult to peer in and see what was going on at the operatingcompanies. This was the background that led to the recently
announced switch from a pure holding company to an
operating company.
Of course, the ROIC management approach and businessportfolio revamp instituted by President Hasegawa havedelivered spectacular results even under the holding
company structure, with the Group booking its highest profit
on record in fiscal 2021, yet in financial terms, the SWCC
Group is still saddled with numerous health issues. Goingforward, a detailed analysis will need to be conducted to findout the profit margins for each product category and laborproductivity in each business entity and division.
Sakakura:Two years ago, when took up my post as an
outside director of the Company, the first thing I noticed wasthat the Company had a huge number of subsidiaries, eventhough the fields in which it was operating were not all thatdiverse.
President Hasegawa declared her management policy to
be to strengthen core businesses and revamp the businessportfolio through thorough ROIC-based management, andthereby improve financial health, and over the past two
years, she has made steady progress with executing thispolicy. Now the Company is going to transition to an
operating company, and absorb its two main operatingcompanies, SWCC Showa Cable Systems Co., Ltd. and
SWCC Showa Unimac Ltd., but what this really means is thatGroup-based management will be achieved and decisionmaking will be speeded up and made more transparent. I
see that as the true intention behind the move.
Ichikawa:I’ve been working as an outside director since lastyear, and even with the holding structure, my impression has
been that the internal structure of the Group is complicated. I
felt that unless things were sorted out, it would be difficult forgovernance to impact the Group as a whole. So while I don’tknow whether the recently announced new SWCC structure
will get the Group into perfect shape, I hope that it will deliver
a substantial improvement in the SWCC Group’s
governance.
Although some are wary that expanding the powers ofbusiness segment heads will exert a centrifugal force, andcould actually heighten governance risk, because the SWCC
Group is a manufacturer, and its sales teams and frontline
manufacturing personnel are in possession of the mostinformation, making speedy and precise judgements on thefrontline is going to be crucial. In that sense, I believe thatthe benefits from empowering the frontline will be enormous.

SWCC SHOWA HOLDINGS CO., LTD.

56

Efforts to Build a Business Foundation

I want people to think about what they
can do for the Company as theytackle their work.
Kiyoshi Togawa
Became an outside director in June 2015 and has served as Chairman of
the Audit and Supervisory Committee since June 2019. Spent more than
40 years at a chemicals manufacturer, where he oversaw departments
such as sales and corporate strategy. Possessing such profound insight,
he took up the post of Chairman of the Audit and Supervisory Committee,
and in this capacity plays the central role in monitoring the Company’s
management.

Togawa:This reorganization of the Group’s management has
been under discussion by the Board of Directors for about ayear, and for some time I had been of the opinion that theCompany should revert from a holding company to an
operating company, so when the business execution sidecame up with the proposal, I stated my views on how swiftlyand smoothly it would be possible to make the transition.
Sakakura:I had the same opinion as Mr. Togawa, and I feltthat the holding company structure had more or less fulfilled
its original purpose, and that to make the jump to the nextstage of growth, now would be a good time to change it. So I
didn’t have an objections to the proposal.
Ichikawa:I was only able to get involved in the discussions
in the autumn of last year, and to be honest, I didn’t really
understand the situation to begin with. I wondered what they
were trying to do. But later, after the management retreat, I
got a sense of the issues and direction. The transition needs
to be executed swiftly, and at the same time I think it will benecessary to get the frontline employees on board, so thateveryone can bring about the transformation together. Doingthat will also help allay concerns about governance risk
stemming from centrifugal force.
I think financial health will be substantially stabilized, so I
want tenacious efforts to be made to achieve new growth.

Support for formulation of mid-term
management plan and its successful execution
Togawa:As the new mid-term management plan was being
put together, I was involved from the kick-off at the
management retreat, and I was encouraged to express myvarious opinions at each checkpoint of the formulation
process.
My biggest concern was that elements of the old corporate
structure still remain, and that in setting performance targets,
the SWCC Group has not completely freed itself of themindset of building on the products it offers right now. Withchanges in the world becoming increasingly dramatic, andoccurring at an accelerating pace, I felt that the SWCC
Group’s movements are extremely sluggish, so I urged theexecution side to set numerical targets that are as high as
possible and to aim to reach them in a short space of time.

57

SWCC Group Report

Take operating income margin, for example. The initial
discussions centered on targets of 7% or 8% in fiscal 2026,
but I communicated that I wanted them to draw up a planthat would enable more value to be added to products or ashift to higher added-value products to be accomplished, andI asked them to raise their earnings targets.
Sakakura:We outside directors verified the process of
finalizing the plan presented by the execution side, andapproved it after stating our opinions, so naturally I am 100%
confident that the targets can be hit.
The name of the previous medium-term management plan
was Change SWCC 2022, while the name this time isChange & Growth SWCC 2026, and as that name indicates,
the plan is all about pivoting from change to growth. Charles
A. O’Reilly’s innovation theory of “ambidextrous
organizations” presents two concepts, deepening knowledge
and exploring knowledge, and if these are applied to the
SWCC Group, it should deepen existing businesses toincrease added value and grow profits. That’s alreadyhappening, but as for what can be achieved by exploring
Growth, new challenges are essential. When pursuingbusiness lines that the SWCC Group has not built up
experience of, I think it will be essential to craft a growthstrategy that involves great business partners, rather thanthe Company proceeding on its own.
Until now, in existing business domains, there have beencases of the Company forging partnerships and producing
results by deepening the business, but exploration in new
business areas calls for stronger partnerships, which could
mean that the Company’s share of the profits is limited. But
even so, it needs to identify businesses worth pursuing andtake on the challenge of producing new growth. Having
improved its financial health, it is now well positioned for
exploration, and I expect us to see numerous project
proposals come in from outside the Company going forward.
I want the potential of these projects to be swiftly andaccurately evaluated, and then executed, with decisionmaking delegated to personnel close to the frontline in somecases.
Ichikawa:The partnership with ACW-Deep, which has been
made a subsidiary, represents a new field being pursued asa smart stream business. It involves the application of AVR
technology to human resource education programs. The
other day, I had the chance to try it out at the Sagamihara
Plant of SWCC Showa Cable Systems Co., Ltd. The

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Round-table Discussion among Outside Directors

The Company’s financial condition
has been improved, and a structure
for exploring new businesses is
now in place to a sufficient degree.
Yuji Sakakura
Became an outside director and Audit and Supervisory Committee
member in June 2020. Has served as the president of a securities
company and the CFO of an M&A advisory firm. This has equipped
him with expert knowledge and response skills in the areas offinance, capital markets, and M&A, which he employs to audit andoversee the Company’s management and actively offer opinions.

technology is effective for developing installation personnel,
and it’s a truly unique initiative. As a solution for supporting
the installation frontline and addressing the problem of ashortage of installation personnel, which is an issue faced bysociety as a whole, I really hope it produces results.
In addition, as a champion of open innovation, theCompany possesses numerous elemental technologies
developed jointly with research institutes, so we canprobably expect to see some new businesses coming out ofthat over the medium to long term.
Togawa:Efforts to put together mechanisms to aim for future
growth are making steady progress, and a task going
forward will be to narrow the gap between senior
management and the frontline so that these mechanisms
can be put into practice. As Mr. Sakakura said earlier, I thinkit’s important to answer the question of what sort ofmotivation individual employees have as they work. I wantthem to ask not what the Company will do for them, but what
they themselves can do for the Company. And as an outside
director, I will be supporting them in their efforts.

Sakakura:In recent years, the SWCC Group has been
focused on improving its financial health, and in some ways
not much progress has been made in considering capital
policy. The valuation of a company in the stock market does
not depend solely on returning profits through higher
shareholder dividends and the like. The markets also ask
about the company’s philosophy and concrete plansconcerning capital policy. They are focused on that. I would
like to utilize my experience to contribute to discussions on
capital policy from that perspective.
Ichikawa:The Group management structure of the new
SWCC should be fantastic, even when compared to that of
the SWCC Group of the past. I believe that to ensure thisnew structure has soul, communication with the frontline will
be important. This means going out to workplaces andmonitoring how the Company’s policies are being conveyed
and implemented, and providing support for the achievementof the goals of the mid-term management plan and thelong-term vision.

I hope that the new SWCC structure
will improve the Group’s governance.
Seiichiro Ichikawa
Became an outside director and Audit and Supervisory Committee
member in June 2021. Spent many years at a food productmanufacturer, running factories and executing business for the
production technology department. He is expected to use his wealthof accumulated experience and knowledge to contribute tostrengthening the Company’s governance.

SWCC SHOWA HOLDINGS CO., LTD.

58

Efforts to Build a Business Foundation

Management Team (Introduction of Officers)
Directors and Audit and Supervisory Committee Members (as of June 24, 2022)
President and Representative Director,
Chairman of the Board of Directors
Group CEO

Representative Director
Senior Executive Officer

Takayo Hasegawa

Dongcheng Zhang

Supervising Group Management
Supervising Operational Reforms andAssistant to President
Assistant for Supervising Governance Reforms

Governance Reforms

Career summary

Career summary

Apr. 1984
June 2013
June 2018
Apr. 2019
Apr. 2020

Apr. 1993
June 2015
June 2017
Apr. 2019
Apr. 2020

Joined SHOWA ELECTRIC WIRE AND CABLE CO., LTD.
Director of the Company
Representative Director, President and Director of the Company
President and Representative Director, Group CEO of the Company
President and Representative Director, Chairman of the Board of Directors
Group CEO of the Company (to present)

Joined SHOWA ELECTRIC WIRE AND CABLE CO., LTD.
Director of the Company
Executive Managing Director of the Company
Director, Senior Executive Officer of the Company
Representative Director, Senior Executive Officer of the Company (topresent)

Director

Outside Director
Chairman of the Audit and Supervisory
Committee

Guoqiang Hu

Kiyoshi Togawa

Career summary

Career summary

Oct. 1995
May 2008
June 2018
June 2020

Apr. 1971
Apr. 2007
June 2015
June 2018

Joined FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD.
Director of FUTONG GROUP CO., LTD.
Outside Director of the Company
Director of the Company (to present)

Joined Hitachi Chemical Co., Ltd. (current Showa Denko Materials Co., Ltd.)
Senior Vice President and Executive Officer of Hitachi Chemical Co., Ltd.
Outside Director of the Company
Outside Director (Audit and Supervisory Committee Member) of UKC
Holdings Corporation (current Restar Holdings Corporation) (to present)
June 2019 Outside Director (Audit and Supervisory Committee Member) of theCompany (to present)

Executive Officers (as of April 1, 2022)

59

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Futoshi Yamaguchi

Tetsuo Komata

Yukio Kawase

Supervising Business Management, in charge of Quality
and Environment, Finance Strategy, and Shared Service
Preparations

In charge of Management Strategy, Investment Strategy,
and Public Relations / IR

Chief of Energy and Infrastructure Business Segment
President and Representative Director of SWCC
SHOWA CABLE SYSTEMS CO., LTD.

Managing Executive Officer

Managing Executive Officer

Executive Officer

Yoshinao Kodama

Takashi Yamamura

Yoshiaki Higuchi

Chief of Communication and Industrial Devices
Business Segment
President and Representative Director of FUJI
ELECTRIC CABLE CO., LTD.

Chief of Electrical Equipment and Components Business
Segment
President and Representative Director of SWCC
SHOWA UNIMAC LTD.

Chief of New Business Segment
In charge of DX and Cybersecurity

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Management Team (Introduction of Officers)

Outside Director
Audit and Supervisory Committee
MemberOutside Director
Audit and Supervisory Committee
MemberYuji Sakakura

Seiichiro Ichikawa

Career summary

Career summary

Apr. 1974
June 1999
May 2006
June 2020

Apr. 1976 Joined Sapporo Breweries Limited
Mar. 2013 Director (Member of the Board) and Senior Managing Executive Officer of
Sapporo Breweries Limited
June 2021 Outside Director (Audit and Supervisory Committee Member) of theCompany (to present)

Joined Nissho Iwai Corporation (current Sojitz Corporation)
President and Representative Director of Nissho Iwai Securities Co., Ltd.
Director and Chief Financial Officer of GCA Corporation
Outside Director (Audit and Supervisory Committee Member) of theCompany (to present)(Note) “The Company” in the career summary stands for SWCC

Director
Full-time Audit and Supervisory
Committee Member

SHOWA HOLDINGS CO., LTD.

Takashi Togawa

Career summary
Apr. 1980
June 2011
June 2014
June 2020

Joined Tokyo Shibaura Electric Co., Ltd. (current Toshiba Corporation)
Director of the Company
Executive Managing Director of the Company
Director (Full-time Audit and Supervisory Committee Member) of theCompany (to present)

Executive Officer

Executive Officer

Executive Officer

Kiyoshi Otake

Mikio Sugai

Nobutaka Imai

In charge of Overseas Business and Wire Harness Business
Chairman of SWCC SHOWA (SHANGHAI) CO., LTD.
Chairman of SWCC SHOWA (H. K.) CO., LTD.
Chairman of JIAXING SHOWA INTERCONNECT
PRODUCTS CO., LTD.
Chairman of DONGGUAN SHOWA INTERCONNECT
PRODUCTS CO., LTD.

In charge of General Affairs, Human Resources, Human
Resources Development, Safety and Health, andMaterials Procurement

In charge of Funds Management, Accounting, and Credit

Executive Officer

Executive Officer

Executive Officer

Toshiharu Kamijo

Kazuhiko Inoue

Nobuyuki Sema

In charge of Sustainability, Legal Affairs, and Risk
Management

In charge of Sales Coordination, Sales and Logistics
ReformIn charge of Smart Stream Strategy and Electric Power
System Strategy

SWCC SHOWA HOLDINGS CO., LTD.

60

Financial/Company Profile Section

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

FY2012FY2013

FY2014

Net sales

169,798

183,289

181,693

Gross profit

18,503

19,561

18,161

Selling, general and administrative expenses(17,376)(17,009)(16,925)

Consolidated Results of Operations (millions of yen)

Operating income

1,126

2,552

1,236

Interest expense(1,042)(1,090)(1,060)

(184)

(271)

(208)

44

11

260

Equity in earnings (loss) on equity-method
Foreign exchange gain (loss)
Ordinary income

(847)

1,236

384

Net income attributable to owners of parent(6,365)

195

228

Comprehensive income(5,866)

1,600

3,213

Depreciation

3,169

2,947

3,489

Capital expenditure

3,812

4,460

4,998

Research and development expenses

1,247

1,097

1,238

Cash flows from operating activities

5,385(1,208)

5,624

Cash flows from investing activities(3,913)(4,567)(2,027)

Cash flows from financing activities

(718)

4,734

(3,493)

Cash and cash equivalents at end of year

8,223

7,604

7,968

Total assets

136,890

140,371

138,023

Net assets

35,34933,57836,921

Interest-bearing debt

57,177

62,10558,963

Shareholders’ equity

35,05733,281

36,616

Information on Consolidated Cash Flows (millions of yen)

Consolidated Financial Position (millions of yen)

Per Share Information (consolidated basis) (yen)Net income(206.55)

6.33

7.43

Net assets

1,137.62

1,080.04

1,188.29

0.00

0.00

0.00

—

—

—

Dividend
Dividend payout ratio (consolidated basis)
Key Financial Indicators (consolidated basis)
Operating income margin

0.7%

1.4%

0.7%

ROA (Return on assets)

-0.6%

0.9%

0.3%

ROE (Return on equity)-16.8%

0.6%

0.7%

Shareholders’ equity ratio

25.6%

23.7%

26.5%

DE ratio

163%

187%

161%

Overseas sales ratio

12.2%

13.2%

13.4%

Notes:
1. Effective October 1, 2017, the company carried out a 10-to-1 share consolidation of its common stock. Accordingly, net income per share and net
assets per share are calculated assuming that the share consolidation was carried out at the beginning of fiscal 2012.
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.

61

SWCC Group ReportHistory and Future of the SWCC GroupA 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

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

169,712155,232

168,186

177,174

171,142

161,697

199,194

17,72820,09921,646

21,71823,73321,75925,357(16,778)(15,865)(15,370)(15,077)(15,123)(14,168)(15,318)

949

4,234

6,276

6,640

8,609

7,590

10,039

(965)

(852)

(841)

(805)

(669)

(398)

(363)

(644)

(83)

(415)

(476)

(2)

248

484

(304)

(202)

36

(75)

(36)

19

37

(1,461)

2,446

4,892

5,603

7,864

7,765

9,882

(9,151)

1,976

3,737

4,569

5,465

4,966

9,353

(11,196)

2,938

5,722

2,314

4,584

8,628

11,332

3,699

2,928

2,877

3,011

3,099

3,183

3,345

3,983

3,244

3,391

2,944

4,186

3,969

6,303

1,045

927

1,046

1,119

1,255

1,276

1,414

4,545

7,842

6,804

6,901

8,696

8,882

428

(3,846)(2,218)(4,051)(3,552)(4,144)(3,358)(1,519)(2,289)(6,506)(3,295)(2,970)(4,879)(5,661)

64

6,282

5,192

4,603

4,721

4,225

4,086

3,279

123,069

119,528

123,518

124,165

122,521

129,460

147,356

25,72428,65533,47735,62839,981

48,16958,932

57,482

51,41948,99446,65742,30337,68939,171

25,371

28,15032,85734,94339,57647,56858,273(296.98)64.14

123.93153.22

183.27166.49313.44823.37913.601,101.71

1,171.66

1,327.04

1,594.63

1,952.73

0.00

0.00

5.00

7.00

15.00

20.00

50.00

—

—

4.0%

4.6%

8.2%

12.0%

16.0%

0.6%

2.7%

3.7%

3.8%

5.0%

4.7%

5.0%

-1.1%

2.0%

4.0%

4.5%

6.4%

6.2%

7.1%

-29.5%

7.4%

12.3%

13.5%

14.7%

11.4%

17.7%

20.6%

23.6%

26.6%

28.1%

32.3%

36.7%

39.5%

227%

183%

149%

134%

107%

79%

67%

11.2%

11.5%

11.8%

9.7%

8.2%

9.2%

9.2%

SWCC SHOWA HOLDINGS CO., LTD.

62

Financial/Company Profile Section

Consolidated Financial Statements
Consolidated Balance Sheet(Millions of yen)

FY2020(Millions of yen)

FY2021ASSETS
Current Assets:

FY2021

22,36826,674Current liabilities:

Cash and time deposits

4,165

Trade notes and accounts receivable

3,357

Trade notes and accounts payable
Current portion of bonds payable

43,859—60

60

Notes receivable - trade—

11,790

Short-term debt

24,611

26,189Accounts receivable - trade—

39,696

Other accounts payable

9,144

10,187

Contract assets

—

1,245

Accrued income taxes

624

1,929

9,889

11,665

Provision for loss on construction contracts

69

68

Merchandise and finished goods
Work in process

7,130

8,360

Contract liabilities—

1

Raw materials and supplies

4,522

6,021

Provision for business structure improvement expenses

234

232

Other

5,716

6,569

Provision for product repair costs

(13)

(12)

75,26988,693

Allowance for doubtful accounts
Total current assets
Fixed assets:

289

190

Other

5,536

4,805

Total current liabilities

62,93970,339Long-term liabilities:
Bonds payable

150

90

Buildings and structures

6,909

9,272

Long-term debt

11,93912,011

Machinery, equipment and tools

5,982

7,237

Deferred tax liabilities

114

59

Tools, furniture and fixtures (net)

1,145

1,090

Deferred tax liabilities related to land revaluation

4,157

4,155

Land

23,15922,382

Net defined benefit liability

732

791

Property, plant and equipment:

2,500

1,445

Other

1,257

976

Total property, plant and equipment

39,69741,428

Total long-term liabilities

18,351

18,084

Intangible assets

1,357

1,340

Total liabilities

81,29088,42424,221

24,221

Other

Investments and other assets:

NET ASSETS

Investment securities

6,584

7,790

Shareholders’ equity:

Deferred tax assets

1,125

740

Common stock

Net defined benefit asset

4,256

6,193

Capital surplus

5,700

5,704

Other

1,303

2,032

Retained earnings

10,56318,321

Treasury stock

Allowance for doubtful accounts

(133)

(863)

Total investments and other assets:

13,135

15,893

Total shareholders’ equity

Total fixed assets

54,19058,662

Accumulated other comprehensive income:

129,460

147,356

Unrealized holding gains on other securities

637

735

Variance of land revaluation

5,784

6,850

Foreign currency translation adjustments

1,022

2,226

Remeasurements of defined benefit plans

548

1,114

Total accumulated other comprehensive income

7,993

10,926600

658

Total assets

Non-controlling interests

63

FY2020
LIABILITIESSWCC Group Report

(910)

(900)

39,57547,347

Total net assets

48,16958,932

Total liabilities and net assets

129,460

147,356

History and Future of the SWCC GroupA 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

Consolidated Statement of Operations(Millions of yen)

FY2020161,697
139,937
21,75914,1687,590

FY2021
199,194
173,837
25,357
15,31810,039

103
61
248
19
211
269
217
1,129

98
77
484
37
55
—
213
967

398
556
954
7,765

363
760
1,123
9,882

51
24
75

2,266
41
2,308

725
291
93
1,110
6,730
1,756
(187)
1,569
5,161
195
4,966

—
—
879
879
11,312
2,707
(857)
1,850
9,461
108
9,353

Consolidated Statement of Comprehensive Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income:Interest income
Dividend income
Equity in gain of affiliates
Foreign exchange gain
Subsidies for employment adjustment
Reversal of allowance for doubtful accounts
Other
Total other income
Other expenses:
Interest expense
Other
Total other expenses
Ordinary income
Extraordinary income:Gain on sales of fixed assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses:
Loss on impairment of fixed assets
Extra retirement payments
Business structure improvement expenses
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

Net income
Other comprehensive income:Unrealized holding gains on other securities
Variance of land revaluation
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates in equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests

FY20205,161

FY2021
9,461

83
24
(31)
3,339
51
3,466
8,628

93
1
725
566
484
1,871
11,3328,431
196

11,221111

Consolidated Statement of Cash FlowsFY2020Cash flows from operating activities:
Income before income taxes and non-controlling interests
Depreciation and amortization
Loss on impairment of fixed assets
Gain on sales of investment securities
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in reserve for construction loss
Increase (decrease) in provision for product repair costs
Increase (decrease) in provision for net defined benefit liability
Extra retirement payments
Interest and dividend income
Interest expense
Foreign exchange (gain) loss
Business structure improvement expenses
Subsidies for employment adjustment
Loss (gain) on sale of non-current assets
Equity in losses (gain) of affiliates(Increase) decrease in trade notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in trade notes and accounts payable(Increase) decrease in other current assets
Increase (decrease) in other current liabilities
Other
Sub-totalInterest and dividends received
Interest paid
Business structure improvement expenses paid
Extra retirement payments
Proceeds of subsidies for employment adjustment
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of investment securities
Proceeds from sales of investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets(Increase) decrease in short-term loans receivable
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Increase (decrease) in short-term bank borrowings
Proceeds from long-term debt
Repayment of long-term debt
Redemption of bonds
Purchase of treasury stocks
Cash dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(Millions of yen)

FY2021

6,730
3,183
725
(24)
(260)
(5)
(114)
29
291
(164)
398
52
93
(211)
51
(248)
(2,651)
183
3,857
(795)
783
406
12,311
186
(400)
(93)
(184)
203
(3,140)8,882

11,312
3,345
—
(41)
728
(0)
(99)
59
—
(175)
363
278
879
(55)
(2,266)(484)(8,853)(4,899)
3,860
(731)
(459)
(496)
2,260
239
(366)
(453)
—
55
(1,306)
428

(254)
86
(3,253)
316
(263)
(1)
10
(3,358)(254)
118(4,565)
3,495
(302)
(12)
1
(1,519)(4,685)
6,890(6,880)
(60)
(0)
(447)
(476)
(5,661)
(1)
(139)
4,225
4,086

1,375
6,523
(6,805)
(60)
(1)
(596)
(370)
64
219
(807)
4,086
3,279

SWCC SHOWA HOLDINGS CO., LTD.

64

Financial/Company Profile Section

Company Information (as of March 31, 2022)
Company Profile
Corporate Name

SWCC SHOWA HOLDINGS CO., LTD.

Date of Establishment

May 26, 1936

Paid-in Capital

24,221 million yen

Head Office

JMF-Bldg. Kawasaki 01, 1-14, Nissin-cho, Kawasaki-ku, Kawasaki-city, Kanagawa 210-0024, Japan+81-44-223-0520

Number of Employees(consolidated basis)

4,280

Stock Exchange Listing

Tokyo Stock Exchange, Inc. (TSE First Section) “SWCC SHOWA HOLDINGS CO., LTD. (5805.T)”
Note: Moved to the Tokyo Stock Exchange, Inc. (Prime Market) on April 4, 2022.

Line of BusinessHolding company

Fiscal Year End

March 31, every year

Principal Group Companies (as of September 1, 2022)
Domestic• SWCC SHOWA CABLE SYSTEMS CO., LTD.
• SHOWA FURUKAWA CABLE CO., LTD.
• SWCC SHOWA UNIMAC LTD.
• FUJI ELECTRIC CABLE CO., LTD.
• AXIO Corporation

Production Sites in Japan
Sagamihara Plant(SWCC SHOWA CABLE SYSTEMS CO., LTD.)

Sendai Plant(SWCC SHOWA CABLE SYSTEMS CO., LTD.,
FUJI ELECTRIC CABLE CO., LTD.)

Kofu Factory(FUJI ELECTRIC CABLE CO., LTD.)

Sendai Factory(SWCC SHOWA UNIMAC LTD.)• SDS Corporation
Aichi Factory(SWCC SHOWA CABLE•SHOUKOU EQUIPMENT INDUSTRY CO., LTD. SYSTEMS CO., LTD.)

Ibaraki Factory(SFCC)• LOGIS-WORKS CO., LTD.

•SHOWA SCIENCE CO., LTD.
Isehara Factory(FUJI ELECTRIC CABLE CO., LTD.)•STEC (SHOWA TECHNICAL CORPORATION)

Mie Plant(SWCC SHOWA CABLE SYSTEMS CO., LTD., SWCC SHOWA UNIMAC LTD., SFCC)

Overseas•SWCC SHOWA (H. K.) CO., LTD.
•SWCC SHOWA (SHANGHAI) CO., LTD.
•SWCC SHOWA (VIETNAM) CO., LTD.

Overseas Production Sites•JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD.

Tianjin•DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD.

SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO., LTD.
Shandong•FUQING SHOWA PRECISION ELECTRONICS CO., LTD.
•SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD.
•FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD.
•FUTONG-SHOWA ELECTRIC WIRE & CABLE (TIANJIN) CO., LTD.

JiaxingHangzhouJIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD.
Shanghai•SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO., LTD. Dongguan Fuqing•HUA HO ENGINEERING CO., LTD.
Hanoi City

Hong Kong
Hung Yen Province

FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD.
FUQING SHOWA PRECISION ELECTRONICS CO., LTD.
DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD.
HUA HO ENGINEERING CO., LTD.

SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD.
SWCC SHOWA (VIETNAM) CO., LTD.

65

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section
Company Profile/Share and Investor Information

Stock and Investor Information (as of March 31, 2022)
Status of Stock

Distribution of Shares

Total Number of Authorized Shares

70,000,000 shares

Total Number of Issued Shares

30,826,861 shares

Number of Shareholders

Distribution of Shares by Type of Ownership

13,155

Individuals and others 21%
Total

Principal Shareholders (Top 10)

30,826,861 shares

Number of Percentage ofshares held shareholding(Thousand shares)(%)

Name of shareholders

The Master Trust Bank of Japan, Ltd. (trust account)

6,207

20.8

Custody Bank of Japan, Ltd. (trust account)

3,712

12.4

NIHK WMD CLIENT OMNIBUS 10 PER TAX
BNP PARIBAS SECURITIES SERVICES LUXEMBOURG/JASDEC/FIM/LUXEMBOURG FUNDS/UCITS ASSETSENEOS Holdings, Inc.

3,090

10.3

1,315

4.4

979

3.2

Fukoku Mutual Life Insurance Company

772

2.5

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)

434

1.4

THE BANK OF NEW YORK MELLON 140044

429

1.4

GOLDMAN SACHS INTERNATIONAL

365

1.2

JP MORGAN CHASE BANK 380646

353

1.1

Foreign investors

32%

Financial institutions 39%
Other companies in Japan 7%
Securities companies 1%

Distribution of Shareholders by Number of Shares Held

Less than 100 shares 15%
Total

13,155 persons

100 shares or more

63%

500 shares or more

10%

1,000 shares or more 10%
5,000 shares or more

*Besides the above, there are 984,598 shares of treasury stock held by the Company.
*The percentage of shareholding is calculated after deducting the number of treasury
stock from the total number of issued shares.

2%

External ESG Assessment
Newly selected for inclusion in the FTSE Blossom Japan Sector Relative Index

Stock Price Movements
(yen)

2,500
2,300
2,100
1,900
1,700
1,500
1,300
1,100
900
700
0

Apr. 2020

Sep. 2020

Mar. 2021

Sep. 2021

Mar. 2022

From the publisher on issuance of the “SWCC Group Report, Integrated Report 2022”
Thank you very much for reading the “Integrated Report 2022.”
At the SWCC Group, we have strengthened our efforts for sustainability this fiscal year, such as launching the
Sustainability Committee and establishing a new Sustainability Basic Policy. Likewise, in this integrated report, we havepresented information on the Group’s sustainability activities in as much detail as possible, including disclosure based on the
TCFD recommendations and the identification of materiality (key issues). The new “SWCC Corporation” will be born in April
2023. We will continue to convey financial and non-financial information to our stakeholders in an easily understandable
format, and strive to make the Group’s initiatives to solve social issues and enhance corporate value better understood.
September 2022

Toshiharu Kamijo

Executive Officer, General Manager of Business Management Coordination Department
SWCC SHOWA HOLDINGS CO., LTD.

SWCC SHOWA HOLDINGS CO., LTD.

66

SWCC SHOWA HOLDINGS CO., LTD.
Sustainability Promotion Office, Administrative Management Division
1-14, Nissin-cho, Kawasaki-ku, Kawasaki-city, Kanagawa 210-0024, Japan (JMF-Bldg. Kawasaki 01 2F)
Phone: +81-44-223-0521
Fax: +81-44-223-0549