Mid-term Management Plan
FY2019-2021
MORIROKU HOLDINGS COMPANY, LTD.
Presentation Material for Financial ReportContents

1. Group Philosophy and Long-term Vision

Page; 2-3

2. Summary of Mid-term Management Plan
(FY2019-2021)

Page; 4-9

3. Major Points of Mid-term Management Plan Page; 10-171Moriroku Group Management Philosophy and Long-term Vision
Management
Philosophy
Contribution to “Future Society"1. To a comfortable and clean society

ActionGuidelines

2. To a society where people can move safely
3. To a prosperous living and a healthy life

Long-term Vision
and Strategy ; MI 400Mid-term Business Plan
Business Structural Reform
to be a 400-year Company
Realize a Sustainable Society
CSR-conscious Corporate Activities

1. Creating an environment where employee
can work with enthusiasm and safety
2. Constructive dialogue with shareholders
and investors
3. Social value; Protecting the global
environment and contributing to theenrichment of people‘s lives
4. Customer value; Providing products andservices that meet customer needs
2Long-term Vision
Management
Philosophy

Moriroku Group will create high value with its future-oriented
creativity and advanced technologies, while contributing to the global society.

Long-term vision

MI 400 : Moriroku Innovation 400

Mid-term plans

MI 400 1st Stage
Business founded1663

2nd Stage

Business Structural Reform to be a 400-year CompanyDec. 2017
Listing on TSEFirst Section

400-year Company

Aiming to be a global corporate group that
contributes to society through proprietary technologies

FY 2019-2021

FY2013-2021

FY2022-2030

2063
3

Summary of theMid-term Management Plan
(FY2019-2021)

Policy of the Mid-Term Management Plan
SloganMOVING FORWARD WITH MI400

Building a management base that can win global markets by anticipating changes in the businessenvironment, creating new businesses, and continuing to take on the challenge of innovation

2021

Three Basic Strategies
1) Strengthening of management base;Enhancement of corporate value as a listed company•

Accelerate business innovations by strengthening the global management base•Responding to changes in the global environment and contributing to a prosperous lifestyle•

Optimize the business portfolio and build the foundation for new businesses

2) Value added creation;
Development and commercialization of new technologies to innovate the mobility society•

Challenge to new technologies and products for next-generation mobility(Collaboration with group companies and partner companies)

3) Business structural reform;
Realizing a new business foundation that meets future society's needs•

To establish new production technologies that anticipate changes in the environment•

Acceleration of business globalization and localization
5

Mid-term Management Plan; Goal and Performance Indicators

KGI (Key Goal Indicator)

Target Indicators
Performance Targets(FY2021)Net sales

200 billion yen or more

Operating Income Margin

5.0% or more

Budgeted exchange rate
1USD = 110 JPN

ROE

9.0% or more

Stable Returns

Shareholder Return Ratio

30% or more

Strategic Investment
3 years total

Factor for achieving KGIKPI (Indicator)

10 billion yen to strategic business

KPI (Key Performance Indicator)
FY2018 Result

FY2019 Plan

FY2021 Plan

122.3 billion yen

115.0 billion yen

120.0 billion yen

7.5 billion yen

7.5 billion yen

8.5 billion yen(Margin)(6.2%)(6.5%)(7.1%)Net Sales

67.2 billion yen

71 billion yen

85 billion yen

Operating Income(Margin)1.1 billion yen

1.5 billion yen

2.5 billion yen(1.8%)(2.1%)(2.9%)Net Sales

Resin-treated
Product Business Operating IncomeChemicals
Business

35 billion yen

Investment

6Mid-term Management Plan: Sales and Operating Income
Sales (billion yen)

Operating Income (billion yen) / Margin (%)■ Chemicals business■ Resin-treated product business

6.5%

1.8%

2.1%

7.1%

4.8%

205.0
189.5

6.2%

1.7%

2.9%

186.0

172.2
67.2

11.0

85.0
71.0

67.3

8.6

9.0

1.1

1.5

7.5

7.5

FY2018Result

FY2019
Plan

2.5

6.3
1.1
104.8

122.3

115.0

120.0

8.5

5.0

FY2015Result

FY2018ResultFY2019
Plan

FY2021Plan

FY2015ResultFY2021Plan
7

Consolidated Net Sales by Region (FY2019 : FY2022)
Sales by Geographic Segment

JPN

189.5
billion yen

NAASIAOTHERS

205
billion yen

Major points for the increase in sales
Resin-treated product business
THI: Expanding orders for local models by reinforcing R&D
NA: Slightly reduce in the U.S. due to changes in production models

26%

35%

27%

Increasing production in Mexico due to the start of productionof new models

33%

Chemicals business
CHN: Expansion of business in inland areas
ASEAN: Strengthening sales activities at new Indonesian bases

39%

40%

Business expansion in the consumer products (Multi-layer film)
JPN: Strengthening manufacturing businesses(Original resin compounds, Consignment of chemical synthesis)

FY2018ResultFY2021Plan

8

Capital Expenditures, Depreciation and R&D Expenses
Investment
FY16-18
Result

FY19-21
Plan

CapitalExpenditures

31 billion yen

35 billion yen

R&D expenses

7.5 billion yen

8.7 billion yen

Total

38.6 billion yen

43.7 billion yen

SI: Early Settlement accounts and strengthening of governance

Depreciations

23.1 billion yen

27 billion yen

RD: Strengthening R&D in Japan, North America, China and Thailand

SI: Strategic Investment / RD: R&D Expenses
SI: Expansion of sales to new customers
SI: New production line for multi-layer film with new technology
SI: Improvement of production efficiency (automation, AGV)

Outline of investment / R&D bases by region
RD: China (Guangzhou) and Thailand (Bangkok)
New CAE and R&D functions

RD: North American R&D (Ohio)
RD: R&D Center, (Moka)
NA original model planning
Development for plastic body

SI: Integrate global core IT systems
start at 12 sites in Asia by 2022
China, Hong Kong and Singapore
Thailand, the Philippines and Indonesia
SI: New plant for high-performance multilayer films(Shikoku Kakoh Co., Ltd., Kagawa Prefecture)

SI: Expansion of the Mexican plant
start in October 2020 (under construction)
SI: New large parts painting line at Suzuka Plant
start in January 2020 (under construction)
9Major Points ofMid-term Management Plan

Strategic Items: Strengthening of Management Base
Strategy

Accelerate Business Innovations by strengthening the Global Management BaseThree Major Targets
1.Creating a working environment in which employees can grow andplay an active role•Introduction of a new personnel system based on the group HR policy(to be implemented in FY2019)•

Working environment where employees with diverse values can enhance the job career

2. Strengthening governance functions to optimize the group as a whole•

Strengthening internal governance and business continuity management•Establishment of a group compliance system and steady operation

3. ESG management•Solving global society issues through higher-dimensional CSR practices and business

11Strategic Items: Strengthening the Management Foundation
Strategy

Responding to Changes in the Global Environment and contributing to a Prosperous Lifestyle

Investing management resources in five fields throughthe Resin-treated Product Business and the chemicals business

Living environment

Mobility

Information,communications andelectronic materials

Fine chemicals

Medical and healthcare

Contribution to “Future Society"1.

Contributing to a comfortable and clean society

2.

Contributing to a society where people can move safely

3.

Contributing to a prosperous living and a healthy life
12

Strategic Items: Strengthening the Management Foundation
Strategy

Optimize the Business Portfolio and build the Foundation for New Businesses■ Mobility Business Strategy
Operating Income (Ratio)
Resin-treated Product BusinessEconomic value evaluation of business
Sales growth rate

Growth is expected,
Increase profitability- Information, and electronics- Living environment

Good profitability andgrowth potential
Accelerate our business- Mobility business5 billion yen(4.8%)

7.5 billion yen(6.2%)

8.5 billion yen(7.1%)FY2015Result

FY2018ResultFY2021Plan

Higher profitability by high-efficiency production
Determine profitability

Strategic Review
Change to thebusiness structure

Profitability is good,
Want to grow in themedium to long term.

- Medical healthcare- Fine chemicals

ROIC

Portfolio Optimization(selection and concentration)••

Promote automation globally (robots and AGV)
Improving efficiency through investment in factories
such as automated warehousing (Guangzhou, Thailand)

Development of proprietary technology products••

Expansion of highly profitable businesses throughunique light weight technologies
Strengthen production system to expand businesswith new customers (VW)■ Strategies for the Medical Healthcare Business•

New plant for high-performance multilayer films(Shikoku Kakoh Co., Ltd.)New products widen new transactions and increases profitability

13

Strategic Items: Creating added Value
StrategyTechnologies and products for next-generation mobility

Through our unique processing, materials, and chemical technologies
Providing value that exceeds customer expectations globally
MORIROKU GROUP
MI 400 (2019-2030)

Chemicals businessResin-treated Product Business

Compound production

Molding production

Development of functional resin materials

Development of lightweight parts

Related business

Automotive materials
Related business

Providing solutions to secure mobility
Development of high-rigidity, lightweight parts

Contributing tofuture society

Automotive parts

14

Strategic Items: Creating added Value
Strategy

Technologies and products for next-generation mobility

Challenge to the whole resin body (light weight)

To the whole body

From T Zone to Belt-line

Living needs

Lightweight

Practical realization from 2023 to 2026

T zoneOther category parts

Further Strengthen

New Product Development
Utilizing our expertisedevelopment of instrument panels

Strengthening the developmentof new products
Accelerating efforts to reduce weight
Establish mass-production technology

Proposals for center panel
including side and rear section

Solution for weight reduction
Resinization of the whole body
CFRP (carbon fiber reinforced plastics)
Parts strategy to meet the needs ofliving interior for automatic driving
15

Strategic Items: Business Structural Reform
Strategy

New Production Technologies that anticipate Changes in the Environment- Expansion of sales to other automobile manufacturers- Expansion of share in automobile parts industry

Business expansion with VW
Started mass production of new models
at the Mexican plant at FY2020
90% or more

FY19.3 (Result)
Share of Net Sales
ConsoleMexican business sales
4 billion yen

Spoiler

FY18.12 Result

FY21.12 Plan

Side Sill16

Strategic Items: Business Structural Reform
Strategy

Acceleration of business globalization and localization

Focus on China and Asia,
which are expected to grow.
China

Start of operation
Wuhan 2nd plantin 2018

Sales results and plans in China and Asia
49.5 billion yen

FY15
ResultResin business

ChinaIndia

India

Expansion of sales ofautomotive Parts
in Chengdu Chemicals business

VietnamStart of operation
India 2nd plantin 2018
Resin business

Philippines

Expansion of sales offine chemicals andelectrical chemicals

Thailand

FY18
Result56 billion yen

FY21
Plan

Expansion of sales ofprocessed foods
and resin materials

Chemicals business

Development of
new parts using
unique technologies

Resin businessAcceleration offactory automation
using painting robot

Resin business

Chemicals business

ThailandExpansion of
packaging materials
and films business

17
Chemicals businessMI 400 : Moriroku Innovation 400
Aiming to be a global corporate group that
contributes to society through proprietary technologies

Precaution
This material was prepared to help you understand us and is not intended to solicit investment in us. This document
is prepared with care to ensure accuracy, but it does not guarantee completeness. We shall not be liable for any
failure or damage caused by the information in this document. The forward-looking statements and forecasts
contained in this report are based on information available at the time of preparation, and include potential risks
and uncertainties. Accordingly, actual results may differ from the forward-looking statements referred to or stated in
the forward-looking statements due to various factors such as changes in the business environment.