This is an English translation of an excerpt of the flash report of the financial results issued in Japanese.
The figures for these financial statements are prepared in accordance with the accounting principles based on Japanese law.

July 12, 2024

For Immediate Release
Company name: Suminoe Textile Co., Ltd.
Representative: Teppei Nagata, President(Securities Code: 3501, Prime Market, TSE)
Contact: Hiroaki Usugi, Managing Director,
General Manager, Corporate Planning Department(Telephone: +81-6-6251-6803)

Notice Regarding Formulation of the Medium-to Long-term Management Targets
for the Latter Three-Year
Suminoe Textile Co., Ltd. (hereinafter, “the Company”) hereby provides notification that it has formulated the“SUMINOE GROUP WAY 2025-2027 STEP Ⅱ” for the latter three-year from the fiscal year ending May 31, 2025 to thefiscal year ending May 31, 2027 in accordance with the Medium-to Long-term Management Targets “SUMINOEGROUP WAY 2022-2024-2027” announced in July 2021.

Details
1. Subject Period
Three-year from the fiscal year ending May 31, 2025 to the fiscal year ending May 31, 2027
2. Positioning of the Medium-to Long-term Management Targets
In July 2021, we established Medium-to Long-term Management Targets “SUMINOE GROUP WAY 2022-20242027” to increase sales of products that meet social needs and promoting global management, and to grow in the future
through the combined efforts of all Group employees, based on the ESG management.
In the first three years of the “SUMINOE GROUP WAY 2022-2024 STEP Ⅰ” from the fiscal year ended May 31,
2022 to the fiscal year ended May 31, 2024, we have steadily planted “Sow the seeds” for the future. For the latter threeyear “SUMINOE GROUP WAY 2025-2027 STEP Ⅱ”, which covers the fiscal year ending May 31, 2025 to the fiscal
year ending May 31, 2027, is positioned as a period in which we will steadily raise the level of our true capabilities.
By promoting the “SUMINOE GROUP WAY 2025-2027 STEP Ⅱ”, we aim to achieve sustainable growth andfurther enhance our corporate value.
*For details of the Medium-to Long-term Management Targets “SUMINOE GROUP WAY 2025-2027 STEP Ⅱ”,
please refer to the attached document.

Risk information concerning the prospects for future performance stated in this material
The forward-looking statements in this document regarding the Company’s future plans, strategies, etc. are basedon a reasonable judgment that is predictable at this point, and actual results may differ due to various factors in the future.

1 / 1

Medium- to Long-term Management Targets“SUMINOE GROUP WAY 2022-2024-2027”
Review of SGW STEP I (2022-2024) and policy for SGW STEP II (2025-2027)

Introduction / Contents

From Suminoe Textile Co., Ltd. to

SUMINOE Co., Ltd.

Our trade name will be changed in December 2024, with the aim of accelerating global expansion and enhancing
non-textile areas. We will further strengthen the movement for transformation.
* This trade name change is subject to approval of the “Partial Amendments to the Articles of Incorporation” at the 135th Annual General Meeting of Shareholders scheduled for August 29, 2024.

01

Role of Medium- to Long-term Management Targets inthe long-term vision

P.02

02

Review of Medium- to Long-term Management Targets
STEP I (2022-2024)

P.07

03

Policy of Medium- to Long-term Management Targets
STEP II (2025-2027)

P.10

04

Cost of Capital and Shareholder Returns

P.20
1

01
Role of Medium- to Longterm Management Targets
in the long-term vision· Transformation of SUMINOE GROUP· Overall Picture of Medium- to Long-term Management Targets· The future we aim for and the initiatives to achieve it· To create the future we aim for2

Role of Medium- to Longterm Management Targets
in the long-term vision

Transformation of SUMINOE GROUP

Since its establishment in Sumiyoshi, Osaka, in 1883,
as a pioneering interior manufacturer, the SUMINOEGROUP has provided customers with a wide range oftextile products and expanded its business domain
while responding to the needs of the times.
In 2024, we are entering a new turning point.

3Role of Medium- to Longterm Management Targets
in the long-term vision

Overall Picture of Medium- to
Long-term Management Targets

4Role of Medium- to Longterm Management Targets
in the long-term vision

The future we aim for and the initiatives to achieve it

Vision The future we aim for

Our initiatives

To set a “new comfort
standard” in harmony withthe times and the earth tocreate delightful lifestylesof the future.

We promote the enhancement of product lineups and humanresources development, and expand our manufacturing andsales sites, with the aim of reinforcing our global optimal supply
system.

Accelerating global expansion

Based on the core technologies that wehave cultivated to date, and with thecreativity to flexibly envision the ideal
space, we will create new value that willchange society.

Enhancing non-textile areas
We create value for “all kinds of spaces” by utilizing ourfundamental core technologies, including those not limited to
textiles.

Establishing the SUMINOE brandFrom Suminoe Textile to SUMINOE. We will establish a newcorporate image that is not only in Japan or in the textile
industry but also on a global scale.

Diversification of business risks and horizontal
deployment of technologies among three segments
Fundamental
core
technologies● Textile and knitting production technology ●Coating technology●Recycled polyester yarn-making technology ●Lamination technology●Functionalization technology●Hard cotton processing technology

Ability to change with market needs
Traditional brand power5Role of Medium- to Longterm Management Targets
in the long-term vision

To create the future we aim for

What innovations can wecontribute to space?
Sharing this vision
throughout the Group, we
have promoted the “ShinMirai (lit. new future) Project”
since 2022.

Sharing and disseminationof the Philosophy
We conduct Group-wide training regularly
to ensure that the Group Philosophy is fully
understood.

Cross-departmental and sharing

Cross-departmental communication“Tsunagu-wa-cation”

“Tsunagu-meeting,” a roundtable meeting for
President and officers of the Administration
Headquarters to talk with employees groupedby age bracket.

2050 Backcasting
Project
Multiple teams formed withmembers appointed bymanagement to lead the next
generation will expand thepossibilities of the SUMINOEGROUP by utilizing our coretechnologies and through cocreation with different industries.
CUBE Smart House withsensors and digital fabricFabric for growing
plantsTextile revolution to create asociety where no one is left
behind in the event of a disaster6

02
Review of Medium- to Long-termManagement Targets STEP I (2022-2024)· Medium- to Long-term Management Targets· Results and future tasks

7

Review of Medium- to Longterm Management Targets
STEP I (2022-2024)

Medium- to Long-term Management Targets

To ensure “change” for the future,
we have formulated the Medium- to
Long-term Management Targets.
This plan, called SGW (SUMINOEGROUP WAY), spans six years in
two phases and is already underway.

8

Review of Medium- to Longterm Management Targets
STEP I (2022-2024)

Results and future tasks

Make steady efforts to “sowthe seeds” for the future
Net sales and operating
income achieved the plan

SGW STEP I plan and results
FY2024 plan

Net sales (million yen)

93,490 103,478

Operating income (million yen)
Operating margin (%)

3,300
3.5

FY2024 plan

FY 2024 results

3,300
3.2

ROE (%)
Capitalinvestment(3-year total: million yen)

Automotive Textiles
Strengthen capability for proposals throughinformation sharing across businesses.

Strengthen the management base and increase
profits in North and Central America.

Enhance proposals to foreign manufacturers andincrease sales of new products.

FY2024 results

2.9
10,000 10,953
6.6

Future tasks

Traffic Facilities

Increase profits by optimizing and streamlining the
production system.



Expand sales by developing and increasing salesof functional products.

Achievements

Interior Fittings

Achieved profitability at the North and Central American baseby restructuring the production systems of U.S. and Mexican
subsidiaries (achieved profitability at all overseas bases for
Automotive Textiles)
Implemented appropriate price pass-through
Increased recognition of the high environmental performanceof ECOS® series, eco-friendly carpet tiles, under thehorizontal recycling system
Expanded the space design business

Increase recognition of the SUMINOE brand.



Implement strategies to recover sales ofhousehold products.

Expand from existing businesses and productcategories.

Established a synthetic leather factory to sow the seeds for
new development
Worked to expand recognition as a global supplier in the
North and Central American market, which resulted inreceiving orders from foreign manufacturers

Effective use of human resources and production
facilities at our Vietnam base.








Functional Materials

9Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

03· Priority Themes· Policy of each Business > Automotive Textiles > Traffic Facilities > Interior Fittings > Functional Materials· Policy for Technology Development· Three-year Consolidated Income and Expenditure Plan
· Materiality

10Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Priority Themes
Improvingprofitability

By pursuing five priority
themes while steadilyraising the level of ourtrue capabilities, we aim
to achieve our target
rate of return by thefiscal year ending May
31, 2027.

Automotive Textiles ▶ P.12

Enhancing
non-textile
areas

Traffic Facilities ▶ P.13

Target rate of return
Operating margin

ROE

5.0 % 8.0 %Furtherstrengthening
globalexpansion* ROE exceeding cost of capital

PBR

1.0 times* Improvement of corporate value
Interior Fittings ▶ P.14

Functional Materials ▶ P.15

Strengthening
management
base

Branding

11

Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Policy of Automotive Textiles

Tasks
 Strengthen capability for proposals through information sharing

across businesses.
 Strengthen the management base and increase profits in North andCentral America.
 Enhance proposals to foreign manufacturers and increase sales of
new products.

Accelerating global
expansion

Enhancing non-textileareas

By adding the Vietnam base to ourcurrent 11 overseas bases in six
countries for the Automotive
Textiles business, we will further
strengthen our globally optimized
supply system while working toincrease the recognition of the
SUMINOE brand overseas, which
will lead to expanded sales forforeign manufacturers.

The target of 10 billion yen in synthetic
leather sales for the fiscal year ending
May 31, 2027 was achieved in the fiscal
year ended May 31, 2024. Goingforward, with a synthetic leather factoryin Mexico added as a new growthengine, we will work to strengthen ourcompetitiveness by securing stableorders and optimizing/streamlining our
production system.

PolicyWe will pave the way for improved profitability by updating
our global strategy and advance investments for full-scale
growth of our operations in North and Central America toincrease our presence in overseas markets.
 Develop a proposal system for synthetic leather and further
increase orders.
 Obtain new orders and expand sales for one-of-a-kindproducts, such as decorative fabric materials for car seats.
 Find new customers through technical and designpresentations.

Markettrends

Recovery from the deterioration of social and economic activities
caused by the COVID-19 pandemic and shortage of semiconductors
Fluctuations of exchange rates, and soaring raw material prices andlabor costs
Spread of the perspective of SDGs



Population decline in the medium to long term
Expansion of new demand, such as practical application of
MaaS, a next-generation transportation service

12Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Policy of Traffic Facilities

Tasks
 Increase profits by optimizing and streamlining the

production system.

▶Three-year Plan for Automotive Textiles and Traffic Facilities

 Expand sales by developing and increasing sales offunctional products.

PolicyAs a market leader holding the top market share for over a
century, we are committed to technological innovation
while preserving traditional Japanese culture andtechniques.

 Ensure an efficient and stable production system.
 Establish a safe and appropriate management system fortechnologies and know-how.
 Create new markets through collaboration with otherbusinesses.

MarkettrendsRecovery from the deterioration of social and economic activities caused by the
COVID-19 pandemic and shortage of semiconductors
Fluctuations of exchange rates, and soaring raw material prices and labor costs
Spread of the perspective of SDGs



Population decline in the medium to long term
Expansion of new demand, such as practical application of
MaaS, a next-generation transportation service

13

Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Policy of Interior Fittings

Tasks
 Increase recognition of the SUMINOE brand.
 Implement strategies to recover sales of household▶Three-year Plan for Interior Fittings

products.

PolicyTaking pride in being an industry pioneer, we will work toenhance the profitability of existing businesses and create
new value.
 Discover new demand and differentiate ourselves from othercompanies.
 Actively expand market into mid- to high-end zones.
 Strengthen sales by improving logistics efficiency in response tomarket changes.
 Create synergy with the space design business.

MarkettrendsChanges in society due to external factors
End of the COVID-19 pandemic
Weakened supply chains

Decrease in new housing starts
Concentration of office and commercial facility construction in
urban areas

14

Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Policy of Functional Materials

Tasks
 Expand from existing businesses and product categories.
 Effective use of human resources and production▶Three-year Plan for Functional Materials

facilities at our Vietnam base

PolicyAs a source of technology to be deployed throughout the Company,
we will work to develop new functions such as smart textiles andfoster new growth businesses.
 Promote product development in response to social issues
and market needs.
 Reinforce development in new areas for the next generation,such as smart textiles.
 Optimize operations at the Vietnam base throughcollaboration with other businesses.
 Develop applications of our unique materials and processing
technologies and expand the scope of applications to otherfields.

Markettrends

Changes in consumer needs and purchasing trends
due to climate change and lifestyle changes after the
COVID-19 pandemicFluctuations of exchange rates, and soaring raw material prices
and labor costs
Spread of the perspective of SDGs

15

Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Policy for Technology Development

We will strengthen our research and technological capabilities, based on theenhancement of Group strengths and human resource development. We will
“Bringing innovation to all kinds of spaces” to meet various needs that exist
around the world.

Enhancement &integration
Enhancementof Group
capabilities

Absorption
processing
technology

Flameretardant
technology

Resincompounding
technology

Create synergies by promoting communication
among Group companies.
Visualize intellectual property throughout the
SUMINOE GROUP.

Processing
technology

Cultivatehumanresources.



Analysis
evaluation
technology＋

NEW

Promote sharing of technologies and quality throughvisualization of development cases and data.
Create video manuals for measuring equipment topromote general use.

Create new and intellectual property-linked
core technologies.


Reorganize testing operations, existing development
operations, and new development operations, and train relevant
employees.
Actively recruit overseas personnel and mid-career personnel.

16Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Three-year Consolidated Income and Expenditure Plan (1)Net sales by base

FY2024FY2025

FY2026FY2027(million yen)

Results

Plan

Plan

Plan

Net sales

103,478

105,300

Operatingincome

3,300

3,300

4,200

5,000

Operatingmargin

3.2%

3.1%

4.0%

4.6%

Ordinary
income

3,668

3,400

4,200

5,000

Profitattributableto owners ofparent874

1,500

Exchange rate
1 dollar145.31144.00

STEP I and STEP II
Comparison of final year

FY2024(%)(Amount)(million yen) Results+5.3%+5,521

Net sales 103,478+51.5%+1,699Japan+36.3%+1,3312,100

2,600 +197.3%+1,725131.00125.00106,000 109,000

FY2025

FY2026FY2027

Plan

Plan

Plan

STEP I and STEP II
Comparison of
final year(%)

(Amount)

105,300 106,000 109,000+5.3%+ 5,52167,793

68,900 71,100 73,000+7.7%+5,207

North andCentralAmerica

18,46918,700 17,300 18,700

+1.2%

+230

China

8,098

8,000

7,800

7,900

(2.5%)

(198)

Asia

9,116

9,700

9,800

9,400

+3.1%

+282

17

Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Three-year Consolidated Income and Expenditure Plan (2)Breakdown by segment
FY2025

FY2026FY2027

Results

Plan

Plan

Plan

Net sales

62,80064,18063,62065,080+3.6%+2,279Segment income

4,427

4,610

5,130

5,540

+25.1%+1,112

Net sales

37,142

38,04038,79040,030+7.8%+2,887

Segment income

946

1,000

1,130

1,360

+43.7%+413

Net sales

3,127

2,650

3,090

3,390

+8.4%

+262

Segment income

(66)

(180)

90

170

―

+236

Net sales

407

430

500

500

+22.7%+92

Segment income

76

90

130

170

+123.3%+93

Segment income(2,083)(2,220)(2,280)(2,240)―(156)

Net sales

103,478

105,300

106,000

109,000+5.3%+ 5,521

3,300

3,300

4,200

5,000

+51.5%+ 1,699(million yen)
Automotive Textiles
and Traffic Facilities

STEP I and STEP II comparisonof final year

FY2024

Interior Fittings

Functional Materials(%)(Amount)

Other

Adjustment

Total

Operating income

18Policy of Medium- to Longterm Management Targets
STEP II (2025-2027)

Materiality

We identified our materiality based on the issues in the Medium- to Long-term Management Targets,
which were derived from international standards regarding social responsibilities and sustainability,
and through interviews with and surveys on stakeholders both inside and outside the Company.

19

Cost of Capital andShareholder Returns

04· Policy· Initiatives to exceed cost of capital· Cash allocation· Enhancing IR activities· Returns to shareholders

20

Cost of Capitaland Shareholder
Returns

PolicyAction to Implement Managementthat is Conscious of Cost of
Capital and Stock Price
Analysis of current situation

Cost of equity: 5 to 7%
Calculation method:
Calculated using CAPM, risk-free rate (approx. 1.0%) + beta
value × market risk premium (approx. 6.0%)
The risk-free rate is based on domestic long-term interest
rates, and the beta value is calculated in-house.

PolicyROE: 8%

ROIC: 8%

(FY2027 target)(FY2027 target)

PBR: 1.0 times

WACC: 4%

(FY2027 target)(FY2027 target)

Dividend payout ratio: 38%(From FY2025)

Trends in ROIC/ROE

ROE: 2.9% (FY2024 result)
ROE continues to remain below cost of capital,
and PBR continues to be below 1 times.

PBR: 0.5 times (FY2024 result)

Exceeding the cost of equity (5 to 7%)

21

Cost of Capitaland Shareholder
Returns

Initiatives to exceed cost of capital

Initiatives to increase
corporate value above costof capital
Based on the premise of realizing value
creation that exceeds market expectations,
we will make thorough efforts to improve
profitability and capital efficiency and utilizefinancial leverage, with the aim of achieving
an ROE of 8% or more.

Improvingprofitability.

Increase profits in North andCentral America.

Reducing
expenses.

Improve profitability of Interior
Fittings business.

Improve financial
structure.

Adjust cash and deposits andborrowings to appropriate levels.

Optimization of
inventory.

Management with inventory
turnover.

Utilization of fixed
assets.

Improving utilization rate ofproduction facilities.

Utilization ofinternal reserves.

Returns to shareholders andinvestment in human capital.

Initiatives to improve ROE

Improving profitability
Effective use of assets
Use of financial leverage

22

Cost of Capital andShareholder
Returns

Cash allocation

Creating cash flows
Operating CF
FY2025 to FY2027:
11.0 billion yen

Liquidating assets
Reduction of cross shareholdings
Utilization of idle assets

Capitalinvestment/M&A

8.0 billion yen
Restructuring coresystems

0.5 billion yen
Investment indevelopment
Human
investment

Effective use oftreasury stock
Shareholder
returns

23

Cost of Capitaland Shareholder
Returns

Enhancing IR activities

Further enhancing
dissemination of informationand dialogue
We will continue to proactively
communicate IR-related information by
updating the content of the Integrated
Report and our website regarding oursustainability activities.
Also, by increasing opportunities tocommunicate with shareholders andinvestors, such as IR interviews andcompany information briefings, we aim
to gain greater understanding of ourGroup and ensure transparency.

Enhancing communication through IR activities






Increase the number of briefings for individual and institutional
investors.
Upgrade disclosure materials.
Support for disclosure in English
Actively communicate information using websites and social media.
Increase recognition through PR activities.

Opportunities for dialogue with shareholders and investors

Financial results briefings for institutional
investors and analysts
Small meetings
One-on-one meetings
Briefings for individual investors

The number ofsessions
increased about
three times thatof 2019.

24

Cost of Capitaland Shareholder
Returns

Returns to shareholders

We believe that returning profits to shareholders is an
important management issue.
We will continue to ensure stable dividend payment andproperly allocate the surplus, taking into consideration thetrends in business performance.

PolicyPolicy on
on shareholder returns
shareholder
returns
StableStable shareholder
shareholderreturns
returns
Dividends
Dividendsare
arebasicallybasically paid
paidtwice
twiceaayear,asasinteriminterimand
andyear-end
year-end
01
01 year,dividends.
dividends.

ExceptExceptininunforeseen
unforeseencircumstances,
circumstances,suchasasaasudden
suddendeterioration
deteriorationin
inthe
the
02
02 suchbusinessbusinessenvironment,
environment,dividends
dividendswill
willbemaintained
at aatminimumof 70
per share.
be maintained
a minimumofyen
70 yenNumber of shareholders

per share.
Continuous
Continuous expansion
expansion ofof returns
returns

Profit per share (yen)Dividend per share (yen)The
Thepayout
payoutratio
ratiowill
willbeberaisedraisedfrom
from33%33%to
to38%.

(Plan)
Number of shareholders
Profit per share (yen)aim
at aiman annualdividendof 140 of
yen
for
38%.
We
at an annual
dividend
140
03
03 We
FY2027.
yen for May 2027.
will continue to offer a shareholder special
04 We
We willplan
continue
to offer aourshareholder
benefitthat includes
own products.
benefit program that includes our
04 special
own products.

Dividend per share (yen)25Note on forward-looking statements
The forward-looking statements in this document regarding
the Company’s future plans, strategies, etc. are based on areasonable judgment that is predictable at this point, andactual results may differ due to various factors in the future.

26