いま、 あ た らnew
し いideas
ことを
。いつ
か、あた
ま え にofなtomorrow.
ることへ。
Innovating
today.
Becoming
theり norms

Towards Realization of Management that is Conscious of the Cost of Capital

2023年5月12日
May
12, 2023

TSE Prime5805
5805
東証プライムAnalysis of Current Situation (1): Changes in Profitability Improvement through Structural
Reforms Based on Capital Efficiency
Profitability, ROE and ROIC have improved steadily since the introduction of ROIC and the start of structural reforms in FY 2019.
Reorganization of major domestic production bases andwithdrawal from unprofitable businesses

ROE(%)FY2019: SWCC SHOWA UNIMAC LTD.made a wholly-owned subsidiary
FY2020: Tamagawa Electric Cable merged into SWCC SHOWA UNIMAC LTD.
Sold the rubber wire business
Dissolved DAIJI
FY2021: Transferred the anti-seismic and anti-noise business to Showa Science
Showa Recycle merged into LOGIS-WORKS CO., LTD
Reorganized the domestic production bases for communication cables
and dissolved Aomori Showa Electric Cable
Sold the Ebina Factory
FY2022: Integrated SFCC’s construction-related manufacturing and sales
businesses<Profit Improvement Results>

FY2020

Cumulative
total

FY2021

FY2022

1

1

2

3

3

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

3

3

3

9

5

7

7

19

3

8

11

Total (Unit: 100 million yen)

8

14

22

44

ROIC(%)

30
20

12.3
7.4

10

5.4

0

Introduction of ROIC
Start of structuralreforms

13.5

7.3
14.7

8.0

7.6
17.7

6.3

15

7.1 7.0
6.0

11.4

5.6

5.0
4.0

3.6

-10

3.0

-20
-30
-40

2.0

-29.5

1.0

0.7
FY2015FY2016FY2017FY20184-year average before introduction

3.8%

FY2019FY2020

FY2021

FY20220.0

4-year average after introduction

7.1%

2

Analysis of Current Situation (2): Changes in Market Valuation
Both PER and PBR are improving due to higher capital earnings, but PBR has not reached the 1x recently.
The need to enhance disclosure regarding the Company's growth story in order to improve the market valuation is recognized.
(Unit: times)
16.00
14.00

Changes in PER
140

13.41

9.79

10.00
7.67

6.00

5.51
4.59

5.99

6.02 80

1.02
1.0
0.84

0.86

100

1.1
0.96

0.94

120

12.00

8.00

Changes in PBR(Unit: times)

0.76

0.77

0.9
0.8
0.7

4.00

60

2.00

40

0.6

20

0.5

0.00
-2.00
-4.00

-2.12

0
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

0.6

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

0.4

3

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

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

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

Financial Strategy● Promotion of businesses that solve social issues● Cash allocation● Optimization of the business portfolio● Further improvement of capital efficiency● Investment and profit contribution timeline● Maintain and improve financial soundness andshareholder returns

Non-Financial Strategy● Promotion of human capital strategies that
support sustainable growth● Contribution to a decarbonized society

4

Business Strategy: Promotion of Businesses that Solve Social Issues
Leverage core value (high value-added strategic products) to promote businesses that solve social issues in the decarbonisation market

Electricity Infrastructure Business(SICOPLUS®)

Major social issues
to be approached

Current market (revenue base)
Demand for renewal of the aging electricity gridTransformer aging distribution
260 units peryear(replacement or
new construction)

Environment & Energy● Realization of carbon neutrality● Increased power consumption

Disaster Prevention andInfrastructure● Aging social infrastructure● Occurrence of large-scale natural
disasters

Education and Human
Resource Development● Decrease in the working population● Lack of a remote educational
environment

Future market (2025 onwards)
Development of a renewable energy electricity grid

(6~7 trillion yen market size)

Transformers reaching
their replacement dateduring the period of our
Medium-Term
Management Plan

Source: Organization for Cross-regional Coordination of Transmission
Operators, Japan “Aggregation of Electricity Supply Plans for FY 2023”

Product
Strategy
Human
Resources
Strategy

Promoting de facto standardization in the substation market by leveraging
product advantages such as light weight and compactness, reduced installation
time, and simple joint design

Promotion of universal design, strengthening the system for increasing production, creating a full
lineup including ultra-high voltage

Expanding alliances with educational and cooperative companies through the Construction Human Resources Development Center

5

Business Strategy: Promotion of Businesses that Solve Social Issues
Leverage core value (high value-added strategic products) to promote businesses that solve social issues in the decarbonisation market
xEV Business (high-performance magnet wires)

Major social issues
to be approached

Environment & Energy● Realization of carbon
neutrality

Current market (revenue base)
Expand the performance of the xEV-related business centered on the highperformance oxygen-free copper MiDIP® that is manufactured using a DIP
forming method that is unique in Japan.

Life & Mobility● Environmental pollution caused by internal combustion
engine vehicles

Future market (2025 onwards)
Shift to a more profitable business model of highly-processed products that leverages thestrength of the MiDIP® brand. Expand sales destinations and the product lineup to promote therealization of electrification, automated driving and comfortable interior of vehicles.

Shift to a more profitable business model
Drive motor
Thin and high-efficiency materials are required to reduce vehicle weight

Oxygen-freecopperOxygencontent

Wire rod manufacturer

Tough pitch
copperSheetcopperHigh performanceoxygen-free copper
MiDIP ®

(Bending,
thinness)

Flat wire(bare)

Increase the added value
by adding magnet wire
processing to thestandalone wire rod

Electricalconductivity
Processability

Magnet wire manufacturer

Wire rod

Our current main field

Vehicle manufacturer

Enameled flat wire
(insulated)

Increase production
capacity fivefold
FY2026 Target

Field to focus on in the future6

Business Strategy: Optimization of the Business Portfolio
We aim to generate further profits by promoting concentrated investment in growth-driving and core businesses and by promoting the structural reform of the businesses. We will also
develop businesses for new markets and domains based on our core technologies. We will expand our business through open innovation, internal ventures and M&A.

Large

New market and new domain
business
Including M&A as growthMarketgrowthpotential

investment

Growth-driving businesses

Business investment

5-year total for FY2022 - FY2026

Decarbonization-related /international expansion

Smart Stream

Electricity infrastructure business (SICOPLUS®)

For mobility and semiconductor markets

xEV Business (high-performance magnet wires)

Developing new markets and new domains for

Investment in business

Overseas business (wire harness)enhancement and DX withwire harnesses

a focus on growth-driving
businesses

Restructured businessCore business

Improve capital efficiency

Social infrastructure

General-purpose magnet wires and wire rods

Construction-related business (SFCC’s coated wires)

31.0 billion yen
Growth investment

20 billion yen

Communication cables for domestic market (FLANTEC®)
e-Ribbon® Business

Small

Business profitability

Large

7

Business Strategy: Investment in Increased Production for Growth-Driving Businesses
and Profit Contribution Timeline
Overseas expansion

Decarbonization-related
Strategic Products
Growth Strategy

SICOPLUS®
Renewal of aging substations andpromotion of renewable energy introduction
Total
investment
2.4 billion yen

Investment inincreased
production
Profitcontribution
Timeline

Total
investment
2.7 billion yen

OperatingincomeCAGR9％

Intensive
investment period

FY2022

FY2023High-performance magnet wires
Promotion of xEVs
OperatingincomeCAGR19％FY2024FY2025

Total investment in increased production

FY2026FY2022 FY2023 FY2024 FY2025 FY2026

FY2030Operating income from high-performance magnet wires
Total investment in increased production

Total
investment
2.1 billion yen

OperatingincomeCAGR33％

FY2023

FY2025Intensive
investment period

Intensive
investment period

SICOPLUS Operating income

Wire harnesses
Enter the industrial device and automotive markets andpromote China Plus One

FY2022

FY2024FY2026

Overseas wire harness business operating income
Total investment in increased production

8

Business Strategy: Business Investment Aimed at Achieving the Medium-Term Business
Plan and Profit Contribution Timeline
Profit plan

Business investment
5-year total for FY2022 - FY2026

160

Growth investment

31.0 billion yen

R&D

120

Reorganization of production bases and facility
renewal<Breakdown>
Production capacity expansion: 12.0 billion yen
Reorganization of production
bases and facility upgrades:

12.2 billion yen

Research and Development:

2.0 billion yen

Operatingincome 10.5
billion yen

100

Production Capacity Expansion

80
60

DX investment, environmental
investment, others:
4.8 billion yen
Growthinvestment

billion yen

140

DX investment, environmental investment, others

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

Operatingincome 154020.0 billion yen

20

FY2022

FY2023

FY2024FY2025

FY20260

FY2022

FY2026

9

Financial Strategy: Cash Allocation
Appropriately allocate generated cash to the strengthening of core businesses, growth investment in newmarkets and business domains, and returns to shareholders.
Cash generation
Five years from FY2022 to FY2026

Generation of operating
cashflow
61.7 billion yen or more

Cash Allocation Strategy
Business investment
Investment in businessenhancement and DX with afocus on growth-driving
businesses
31.0 billion yen
Growth investment in newmarkets and businessdomains
20 billion yen

Shareholder returns

Stable and continuous
dividends through balancewith growth investments
10.7 billion yen

10Financial Strategy: Further Improvement of Capital Efficiency
ROIC by business segment has been established from FY2022. It is broken down in an ROIC tree and disseminated to the operational level of eachdepartment through the use of the company newsletter, etc., and will be thoroughly utilized in the review of business portfolio optimization and investment
decisions. (The following is an excerpt from an article in the fall issue of the company newsletter)

E Business

D Business

Target for FY2026: Company-wide ROIC 10% or more
C Business

FY2022 Results: Company-wide ROIC 7.1%
Segment ROIC: E Business = 8.7%; D Business = 6.9%
C Business = 5.9%
ROIC Formula
Company-wide ROIC = Operating income after tax / invested capital (equity capital + interest-bearing debt)
ROIC by Business = Operating income after tax / invested capital (working capital + fixed assets)

11

Financial Strategy: Maintain and Improve Financial Soundness and Shareholder Returns
We will maintain and improve our financial soundness and aim to achieve a dividend of 120 yen or more assoon as possible, while maintaining a balance with growth investments.
70,000Interest-Bearing Debt and DE Ratio

60,00057,482

140

227

50,00051,419183 48,994

46,65742,303

134

37,689 39,171

41,17720,000

61

19.1
16

60

12

50.0

4

20

FY2016FY2017FY2018FY2019FY2020Interest-bearing debt (millions of yen)

FY2021

FY2022DE ratio (%)

0.0

0

75

35.0

20.0

60

15.0

50

8.2

40

10,000FY2015

120

25.0

150.0

100.0

67

35

100

ｂ

79

40.0

30.0

80

107

30,000032

200.0 120

149

40,000

Dividend per share and dividend payout ratio

250.0

Target for the final
year of the mediumterm management
plan

0

0

5

FY2015FY2016FY20174.6
7FY201815FY2019Dividend per share (yen)

10.0

20

FY20205.0
FY2021

FY2022E

FY2023E

FY2026E

0.0

Dividend payout ratio (%)

12Non-Financial Strategy: Promotion of Human Capital Strategies that Support Sustainable Growth (1)[Human Resources Portfolio Management]

In promoting structural reforms and transitioning to the growth phase,the following measures are being promoted in order to respond to changes
in the required human resource skills.

● Strengthen job-based recruitment
Strengthen the recruitment of the necessary human resources with specificskills for immediate results and highly specialized human resources.

Operating income per employee and numberof employees
10,000

235

9,000

198
176

8,000
7,000

● Expand systems to match the needs of the Company and employees
In order to realize the placement of the right person in the right job, the job
challenge system and internal recruitment system will be expanded and enhanced.

6,000● Establish a compensation system that encourages challenges

4,000Transition to a compensation system that more appropriately reflects the efforts
and achievements of employees who take on challenges.
● Shift human resources to growth businesses

3,000Intensive allocation of human resources to strengthen growth businesses.

249

5,000

2,000

148
132

4,757

Furthergrowth
phase

250

200

150

ｂ
4,494 4,352 4,319
4,280 4,201

100

50

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

0

All employees (persons)Operating income per employee (10,000 yen)13

Non-Financial Strategy: Promotion of Human Capital Strategies that Support Sustainable Growth (2)[Diversity Management]

Women's Participation Promotion Project Initiatives

We are promoting the creation of diversity-oriented systems andorganizations with the aim of being a highly competitive company
that can flexibly respond to the changing needs of customers.
● From a "Women's Participation Promotion Project" to a "Diversity
Promotion Project”
The project, which was launched in April 2021, has added male members from April
2023 to promote efforts to raise awareness of unconscious bias.
● Promote the taking of childcare leave, etc. that is not limited to women
Promotion of an understanding of childbirth and childcare through theestablishment of a personnel system and in-house training programs.

To create an environment wherethe values and individuality ofeach employee is valued andthey can fully demonstrate theirabilities and shine
・ An event co-sponsored with Keidanren, the Cabinet Office, and theMinistry of Education, Culture, Sports, Science and Technology to nurture
female junior high and high school science and engineering students.
In March 2023, a lecture introducing case studies from the Company was given
at the request of the Cabinet Office in recognition of our innovations, such as
attracting customers through local governments.

● Started social media
campaignsｂStarted strengthening
recruitment throughInstagram, which isfamiliar to the younger
generation. Videoviews exceeded
100,000.

● Extend the retirement age and introduce an optional retirement
systemCreation of an environment in which experienced and seasoned employees
can work with confidence.

14

Non-Financial Strategy: Contribution to a Decarbonized Society
Under the Green Energy Project, the company aims to achieve carbon neutrality by 2050 by implementing various measures, including the introduction
ofrenewable energy atdomestic and overseas manufacturing bases, promotion of procurement of non-fossil energy, and the introduction of highefficiency, energy-saving equipment using new technologies.
CO2 emissions

Renewable energy
introduction ratio(%)

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

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

Initiatives to introduce renewable energy at
manufacturing sites

100%*Compared to FY2013

90%

70,00037% CO₂
reduction*

60,00045%

50% CO₂

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

50,00040,000

Domestic Scope 1 & 2

30,00040%

30%

20,000<Details of Initiatives>*

reduction

reduction*

renewableenergyintroduction

80%
70%
60%
50%

10%
FY2030FY2050

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

FY2025Endorsement of TCFD
Recommendations

Annual emissions reduction of 956 t-CO2
Equivalent to approximately 20% of annual
electricity use

Introduction of carbon neutral city gas
Reduction of approximately 30% of fuelderived CO₂ emissions(approx. 13,000 t)

ｂ

40%

20%

10,000
FY2022Introduction of renewable energy
through the PPA model

Mie Plant30%

renewableenergyintroduction

0
FY2013

Aichi Factory0%

Achieve carbon neutrality

China Jiaxing Factory

Sendai Plant

Introduction of renewable energy
through solar power generation

Introduction of renewable energy
through solar power generation

Annual emissions reduction of 728 t-CO2
Equivalent to about 40% of annual electricity
use

Annual electricity sales equivalent to
50 million yen

15Appendix

16

Held Asset Utilization Initiatives"Construction plan for a complex at the Sagamihara Plant site."

March 31, 2023 Press Release

In the process of streamlining and consolidating ourmanufacturing bases and production lines, theCompany plans to construct a complex with aheight of approximately 36 m, five stories above
ground, a building area of approximately
18,000m2, and a total floor area of approximately
80,000 m2 on a 33,000 m2 plot facing the road on thesouth side of the Sagamihara Plant site (115,000 m2)
for the purpose of effectively utilizing the site after
demolition and removal of the relevant factorybuilding.
In addition to being used primarily as a logistics
warehouse, a portion of the building will be used as
an incubation center, which our Group will also
occupy, and tenants such as a daycare center andother facilities that will be available to employeesof the businesses and local residents are being
considered.
*Daiwa House Industry will propose and oversee the project, and Fuyo
General Lease will construct the complex as the owner. Construction isscheduled for completion in July 2026.

17

The purpose of the SWCC Group

SWCC’sPurposeInnovating new ideas today.
Becoming the norms of tomorrow.

We have established a purpose in conjunction
with our name change, with the message of
responding to the changes of the times andcreating new value.

We’re here to face the challenges resiliently in this changing world.
With our brilliant technology,
strong passion and sympathetic thoughts,
we ensure the highest quality and reliability of our products.
Not only with our traditional cable and wire for infrastructure,
but also with our new products and services to enrich our planet,
we will never stop challenging for a brighter future.

18

Organizing our Purposes and Issues
Issue

Purpose sentence

Creating Value

・Return to the spirit of challenge at the time of the company's founding
・Shift from a manufacturer of products to a manufacturer of solutions Innovating new ideas today.
・Expansion into new markets and new areas by leveraging technology and Becoming the norms of tomorrowknow-how cultivated over many years

Social context

・Changes in values and Contributing to the Realization of a
Sustainable Society（Maximize economic value <solving social issues and sustainable growth）

Contribution tosociety・ Pride in infrastructure business that has been connected for 87 years With our brilliant technology, strong(business continuity)
passion and sympathetic thoughts,
・ Addressing new social issues (renewable energy, workforce
we ensure the highest quality andshortages, etc.)
・Increased confidence in quality
reliability of our products.

Change andTransformation

・Transitioning from a stagnant period of structural reform to a growthphase and out of it
Not only with our traditional cable・Fostering a spirit of challenge without fear of change
and wire for infrastructure,
・ Raise the level of "earning power" through further penetration andbut also with our new products andestablishment of ROIC management
・ Aggressive investment outside of existing frameworks (M&A, internal services to enrich our planet,
ventures)

Human capital・Promoting the utilization of diverse human resources
・In-house systems that support a challenging spirit to cope with change and we will never stop challenging for abrighter future.
transformation
・Increase engagement by creating rewarding jobs and workplaces

We’re here to face the challenges
resiliently in this changing world.

19

"SWCC's Direction" Driven by the Purpose
Showa Electric Wire and Cable

SWCC Showa
Holdings

00

00

ＳＷＣＣ
300

VISION
2030

Change＆Growth
2026

250

Net sales
Operating income

20.0 billion
yen

15.0 billion
yen00

10.6 billion
yen

200
150

10.5 billion
yen

Creating new value with the Purposeas the driving force

00

ROIC 10% or more, PBR 1x or more,dividend amount 120 yen or more

00

50

Not only with our traditional cable
and wire for infrastructure.

0

2030

Challenging towards tomorrow's new norms.
2026

1936
1969
1977
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1980
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1989
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2007
2008
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2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Since 1936, we have been connecting the norms of the past and today.
0

100

-50

20

https://www.swcc.co.jp

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