Mid-term Management Plan

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(FY2021-2023)
Fukoku Co., Ltd.
(5185, First section, Tokyo Stock Exchange)
February 2021

Starting with rubber,brightening the future
Fukoku offers new value based on thetechnological expertise in design, prototyping,validation, and mass production developedsince our founding.

©©Fukoku
Reserved.
Briefing on the Mid-term Management Plan (FY2021–23) Fukoku Co., Ltd. (5185, First Section, Tokyo Stock Exchange) February 2021Copyright
Copyright
FukokuCo.,
Co.,Ltd.
Ltd. AllAll Rights
Rights Reserved.

Agenda2/27

1. Company Profile
2. FY2020 Performance Forecast
3. Mid-term Management Plan

Target

Overview



Initiatives



Policy on Shareholder Returns

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3/27

1.

Company Profile

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1.

Company Profile

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Company Profile
Company NameFoundation
Representative

Fukoku Co., Ltd.
1953 December 24 (68 years since established)
Takashi Ogawa, President

Head office

Saitama, Ageo city

No. of employees

Consolidation 4,981

Parent company 1,230* as of September 30, 2020, except part time workers

Business profile

Production and sales of Rubber products, Metal
products・Plastic products, OA・Electric devices・
Medical devices etc.

Stock exchangeFirst Section, Tokyo Stock Exchange

Capital stock

1,395 Million JPY

No. of issued shares

17,609,130 shares

No. of Shareholders

17,564* as of September 30, 2020

・ Domestic bases- 5 plants, 2business offices
Bases /
Affiliate companies

・ Affiliate companies- Consolidated subsidiaries:
2 in Japan and 15 overseas- Equity Method Affiliated Companies :1 overseas

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1.

Company Profile

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History1953

Dec

Founder, Eiichi Kawamoto established Fukoku
Rubber Industry Co., Ltd.

1956

Apr

Succeeded in developing Wiper blade rubber
technology

1972

Sep

Invested in Sueyoshi Industries Co., Ltd.

1983

Jan

Thai Fukoku Co., Ltd. Was established in Bangkok,
Thailand.

1986

Jan

Changed the company name to
Fukoku Co., Ltd.

1994

Oct

Registered with Japan Securities Dealers’
Association (currently JASDAQ) to list stocks for OTC
market1996

Feb

Invested in Tokyo Rubber MFG. Co., Ltd.

2004

Mar

Stock listed on the 2nd section of the Tokyo Stock
Exchange

2005

Mar

Stock upgraded to the 1st section of the Tokyo
Stock Exchange

2020

Jun

Selected by the METI under the 2020 Global Niche
Top Companies Selection 100 program

2020

Jul

Takashi Ogawa was appointed president

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1.

Company Profile

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Sales（Consolidation）
1,000
100
(1 Billion JPY)

FukokuLtd.
単体 Co.子会社

72.2

Subsidiaries

70.6

75.2

77.9

74.8
62.0

500
50

36.5

35.1

38.7

41.0

39.4
33.0

35.7

35.5

36.5

36.9

35.4

FY20152015年度FY20162016年度FY20172017年度FY20182018年度FY20192019年度

29.0

0

FY20202020年度Forecast

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1.

Company Profile

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Sales per business（FY2019 Consolidation）
Industrial
Hose Equipment
4%5%Functional Parts

Wiper blade rubber

Metal
10%

CVJ boots

Diaphragm

Anti-Vibration Parts

Functional parts
42%

74.8
Billion JPY

Damper pulley

V-rod

Metal

Anti-vibration
39%

Fuel tank

Ultra sonic motor

Propeller shaft

Hose

Industrial Equipment

Printer roller

Viscous mount

Cell culture bag Cell culture medium

Intercooler hose

Water hose

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1.

Company Profile

Sales per region（FY2019 Consolidation）

China
10%
Americas& Europe
12%

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Global network

Korea
9%

74.8

Billion JPY

ASEAN &
India 16%

Japan
53%
Japan
1953
Thailand1983

America
2001

Vietnam
2011

Korea
1987

China
2001

Mexico2014

Indonesia
1997

India
2010

Czech
2014

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1.

Company Profile■ Automotive
industry

Our strengthWorld
Share*（％）

9/27■ Other industries

Wiper blade rubber

Viscous mount(for Construction
Machinery)

Crankshaft damper

50%*our estimation

15%
70%

Diaphragm

Cell culture bag

30%
35%

Piston Seals

Ingot wire-saw
main roller

CVJ boots

17%

12%

30%

Producing many products with a high market share in niche fields
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1.

Company Profile

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Our Strengths
Fukoku has been selected by the Ministry of Economy, Trade and Industry under the 2020
Global Niche Top Companies Selection 100 program that recognizes companies striving tocapture global markets, securing a high market share in niche sectors, and performing goodmanagement.

The examination committee consists ofexternal experts who evaluate andselect companies having:
1. both global share and profit,
2. unique and independent
technology, and3. importance in the supply chain.

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11/272.

Performance Forecast for FY 2020

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2.

FY2020 Performance Forecast

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Business performance trends（Consolidated, Quarterly）（unit: Million JPY）
25,000

Sales
year on year
△17％

62,00020,00010

Operating profit
year on year
△43％

500

5

15,0000

10,000-5

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4FY20181,000

FY2019FY2020-10

Ordinary Profit
year on year
+12％

1,100

500
0

FY2019FY2020Net Profit

1,000

year on year
+93％

600

500
0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4-500-1,000FY2018Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4-500

FY2018FY2019FY2020-1,000-4,000FY2018FY2019FY2020

Faced with the sales decrease due to the corona virus, making every effort to improve corporate
constitution and secure profits
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2.

FY2020 Performance Forecast

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Efforts to improve constitution
 Implementation of reform without sanctuary
120%

Production
process
streamlining(FY2020, non-consolidated )

110%
100%

100
%

90%

Cost
Reduction
Improvingbackoffice work
efficiency

BEP sales ratio

82

80%
Defectreduction%

70%↑Target60%
FY2020 Apr

FY2020 Dec

Continuing improvement activities toward the target
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14/27

3.

Mid-term Management Plan

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3.

Mid-term Management Plan

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TargetConsolidated Sales and Profits（Planned on the most recent revenue basis）
Consolidation（unit: Billion JPY）

Profit ratio

Sales

Operating Profit

100

10

80

80

(％)
10.0

6.8％

8

62

8.0

60

6

6.0

40

4

4.0

20

2

0
FY2018FY2019FY2020

FY2021

FY2022

10.0

7.0％

8
6

8.0
6.0

4

1.8％

2
0
FY2019FY2020

FY2021

FY2022

FY2023

FY2019FY2020

FY2021

FY2022

FY2023

Net Profit

(％)

10.0

10.0

8.0

8.0

6.0
4.0

4.0

2.0

2.0

0.0

0.0
FY20180.0
FY2018

(％)

10

2.0

0

FY2023

Ordinary Profit

0.8％

-2.0
-4.0

4.2％
1.0％

6.0
4.0
2.0

0.0
FY2018 FY2019 FY2020 FY2021 FY2022 FY2023

-2.0
-4.0

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3.

Mid-term Management Plan

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TargetConsolidated sales・Ordinary profit ratio・ROE・Consolidated payout ratio
Forecast

Target(Year ending March 2021)(Year ending March 2024)

Consolidated sales

62.0 Bill. JPY

80.0 Bill. JPY※

Ordinary profit ratio

1.8％

7％

ROE

1.9％

8％

-

30％

Consolidated payout ratio※New product ratio 10％

Dividend amount

Theoretical dividendwith the consolidated payout ratio of 30% (yen)
55
45
35

20

20
10

FY20182018年度FY20192019年度FY20202020年度FY20212021年度FY2022
2022年度FY2023
2023年度

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3. Mid-term Management Plan

Overview

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FY2021 (ending March 2022) to FY2023 (ending March 2024)
Deepening and Developing

Developing
to offer solutions
for global
challenges and to
spread seeds offuture growth• Expanding CASE businesses• Creating life science businesses

Deepening
existing corebusinesses toincrease profit• Strengthening windshield wiper business• Selecting and focusing on overseas
businesses

Maximizing the functions of polymer products (rubber and resins) to keep the earth clean
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3. Mid-term Management Plan

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Overview

Driving business innovation through collaboration
Core technology

Multiple uses

FukokuCustomers

Design of rubbermaterials/profiles
Processing
technologies

Confronted withchallenges

Solutions

Creating new
businesses

Advanced development

Collaboration
Needs
Collaborating with diverse stakeholders
to create new value
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3. Mid-term Management Plan

Deepening Existing Businesses

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Strengthening windshield wiper businessConventional methods require many
steps and much time
FukokuCustomer

Our strengthened methods
accelerate design

Enhanced virtual
design technology

Fukoku Customer
In-house profile design

DesignVirtual design
Enhanced virtual
validation technology

Prototype

Virtual validationPartvalidation

Vehiclevalidation

Correction
Complete

Glass profile validation
Enhanced vehicle
validation technology

Vehiclevalidation
Correction

Streamlined design work
accelerates business expansion
Water thickness
measurement

Enhancing our technology and collaborating with customers to facilitate more efficient business expansion
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3. Mid-term Management Plan

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Deepening Existing Businesses

Selecting and focusing on overseas businesses■ Independent management in priority regions (ASEAN + India)
Current

Independent
management

R&D

R&D

Validation

Validation

MetalmoldingMetalmolding

Procurement

Procurement

Production

Production

Head office(Japan)＋ Productivity(In-house＋ Productivity
processing)＋ Procurement (Increased moldcapability
plants)(M&A with casting
companies)

Production capability＋ Validation
technology(Expanded lab
functions)

Major overseas offices(ASEAN + India)
Time

Shift to speedy, autonomous management at each site

Conceptual image of selection and focus■ Leveraging alliances (Europe)
Building alliances
at each site
Building alliances withspecialized manufacturers
in EU

Optimizing business
Czech plant to beclosed in 2022

Improving our competitiveness and expanding business globally
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3. Mid-term Management Plan

Developing to Offer Solutions for
Global Challenges

21/27

Expanding CASE businesses

Rubber creates a path toward a safe, secure, and comfortable futurein the era of CASE

 Advanced vibration damping rubber
 Vibration damping rubber foraerospace sensors
 Ring type ultrasonic motors for highresolution zoom lens cameras

 Vibration damping rubber for
precision electric devices
 High performance noise reduction
complex rubber
 Vibration damping rubber mounts forconstruction equipment with ICT

 Atomizing devices for sanitary andamenity spaces
 Disturbanced insulator for satellites
 Vibration damping rubber for new
generation mobility

 High function seal rubber for EVs
 Advanced vibration damping rubber
for vehicle motors
 Multi-way coolant flow control valves
for vehicle thermal management

New materials and processing methods for a future full of dreams
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3. Mid-term Management Plan

Developing to Offer Solutions for
Global Challenges

22/27

Creating life science businesses

Rubber creates a path toward a safe, secure, and comfortable future in
the era of health and longevity

 Liquid culture  Cell culture
mediumbag

 Bacterial infection test kit

 Space sterilization atomizer

 Human adipose
derived stem cellconditionedmedia

 Human adipose stromal
cell exosome

 Beauty essence MRI drive motor

New ideas for a future full of dreams
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3. Mid-term Management Plan
Our strengths

Our technologies in polymer chemistry provide individual
solutions for customer-specific challenges■ Base technology■ Solutions

DirectbondingCleanmolding

CoatingMicromolding

Material
designProcessing
Mixing/Kneading,Creating value
Molding,
Machining,&
Polishing

Molds
ProfiledesignSoft materials

Finding solutions
ShockabsorbSimulation

Vibration
controlProfile design

Society & Customers

MarketingFEM
analysis

DesignTranslating needs
into specs

Fatigue
resistance
Sealingfunction

Validation

Chemical analysis

Vehicle validation

Precision part
validation

Vibration validation

Mass production

Enabling mass
production attarget cost

Qualitycontrol

Prototype &
validation

Material
designProcessdesignMaterializing
specifications
Vehiclevalidation

Mixing/Kneading
Chemicalanalysis

Molding

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24/27

3. Mid-term Management Plan
ESG—Environment, Society, and Governance

Aiming to achieve 50%
reduction in manufacturing
waste by 2025

Reducing
CO2 emissions


Setting up the Environment
Project OfficeReducing manufacturing
waste

Reforming HR
system

Diversity

Reforming working stylePromoting the progressof young employeesTraining future operators

Employing older workers

S
SocietyE

Environment

G
Corporate
GovernanceImproving
information provision

Enhancing internal
control

Redesigning the entire
company websiteIR activities

Fulfilling our corporate social responsibility
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3.

Mid-term Management Plan

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TargetConsolidated sales・Ordinary profit ratio・ROE・Consolidated payout ratio
Forecast

Target(Year ending March 2021)(Year ending March 2024)

Consolidated sales

62.0 Bill. JPY

80.0 Bill. JPY※

Ordinary profit ratio

1.8％

7％

ROE

1.9％

8％

-

30％

Consolidated payout ratio※New product ratio 10％

Ordinary Profit

Sales

100

80

80

(％)

10

10.0

7.0％

8

62

Profit ratio

8.0

60

6

6.0

40

4

4.0

20

2

0

0
FY2018FY2019FY2020

FY2021

FY2022

FY2023

1.8％

2.0
0.0

FY2018FY2019FY2020

FY2021

FY2022

FY2023

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3. Mid-term Management Plan Policy of Return to Shareholders

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Principles of dividend policy Starting from interim dividends for FY ending in March 2022
 Dividends continue to be paid regularly based on a consolidated payout ratio of around 30%.
(with an annual dividend of ¥20 per share as the lower limit*)* Subject to change if the business performance should become markedly weaker due to rapid changes in operating environment

Theoretical dividend with theconsolidated payout ratio of 30% (yen)

55
45
35
20

20
10

2018年度FY20182019年度FY20192020年度FY20202021年度FY20212022年度FY2022

2023年度FY2023

Abolishment of the shareholder benefit plan To better benefit shareholders by paying dividends as a direct and fair return, the shareholder
benefit plan with gift items will be abolished as of the record date of March 31, 2021.

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Aerospace

Cloud

27/27

Solar power
generation
Communication
Airplane
Drone

Medical,Long-term
CareWind power
generation

Smart home

EnergyGame,
Haptic devices

HealthdevicesSmart highway

Fukoku will realize "I wish I had it" with ”soft materials”!

LifescienceHumanassistrobot

Inspection kit

Hyper
loop

Linear
motor car

Wheel
chair

Autonomous driving

EV

FCV

Smart agriculture

Smart buildings

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28/27

Starting with rubber,brightening the future
Fukoku offers new value based on thetechnological expertise in design, prototyping,validation, and mass production developedsince our founding.

Note This document contains forward-looking statements including strategies and management plans of Fukoku Co., Ltd.
and its group companies. All statements contained in this document, other than statements regarding past andpresent facts, are forward-looking statements. These forward-looking statements are based on assumptions andjudgments that Fukoku Co., Ltd. and the Fukoku Group have made in light of the information currently available,
and are thus inherently subject to risks and uncertainties. As such, the business environment surrounding us, future
performance, and management results may differ from those presented in this document.
 Any forward-looking statements contained in this document only speak as of the date of this document, and weundertake no obligation to update any information included in this document to reflect new information or future
events after the date of this document.

February 24, 2021
Fukoku Co., Ltd.

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