SWCC Group Report

Integrated Report 2023

Into the New Paradigm

M o re Pro f i ta b l e
M o re R e si l i e nt
M o re Po w e rf ul
M o re Wi d e l y

SWCC Corporation
Sustainability Promotion Department, Corporate Strategy Div.
1-14, Nissin-cho, Kawasaki-ku, Kawasaki City, Kanagawa 210-0024,
Japan (2F, JMF-Bldg. Kawasaki 01)
TEL. +81-44-223-0521 FAX. +81-44-223-0549
The information contained in this report is current as of September 2023.
Reproduction or reprinting of this report without permission is prohibited.

SWCC website

SWCC Corporation

Introduction

We are SWCC GroupIn April 2023, our Company was reborn as SWCC Corporation.
In addition to further strengthening and deepening our three core businesssegments of Energy and Infrastructure Business, Electrical Equipment and

The SWCC Group is Opening the Door to a New Era

More Profitable

More Powerful

Transforming Our Corporate Cultureand Business Model

Transforming Our People
that is linked with our management strategy.

in line with the SWCC Purpose.

We aim to be a diverse and talented group of people

Through growth investments,
we will expand into new fields andComponents Business, and Communications and Industrial Devices Business,

The SWCC Group will promote a human capital strategy

We will accelerate our growth strategy

MoreProfitabletransform ourselves into a solution-oriented company.

who can respond to the changing times.
For details, please refer to pg.

25 to 26.

For details, please refer to

we will also boldly transform ourselves to achieve sustainable growth.

pg.

21 to 22.

Transformation

More
Resilient

We will report to our stakeholders on the current state of SWCC andMorePowerful

the company that we are aiming to become in the future.

Taking on the challenge of creating further corporate

More Resilient

More Widely

Strengthening Our Financial Foundation

Expanding into New Markets and
New Business Areas

We will improve return on capital by deepening
ROIC management and strengthen our financial

value and moving into a new growth trajectory

foundation by accumulating profits.
For details, please refer to pg.

22 to 24.

More Widely

To open up next-generation business areas,
we will create new advantagesfor SWCC by mixing existing businesses andnew business areas together.
For details, please refer to pg.

1

27 to 28.

4

Key Transformational Concepts

2Introduction

SWCC Purpose

In line with changing our corporate name to SWCC, we have formulated
the SWCC Purpose to become a company that creates new value in
response to the changing times.
Our Thoughts Behind the SWCC Purpose
We’re here to face the challenges resiliently in this changing world.

Innovating new ideas today.
Becoming the norms of tomorrow.

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

Social Background
SWCC is asked to change values and contribute to therealization of a sustainable society. In addition to maximizing
economic value, we will continue to pursue solutions to societal
issues and sustainable growth.

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 abrighter future.

Change/Transformation
SWCC will move into and out of the growth phase through structuralreforms. We aim to change into a new version of SWCC by maintaining
spirit of challenge without fear of change, raising the level of earning
power through ROIC management, and aggressive investment beyond
existing frameworks such as M&A and in-house ventures.

We’re here to face the challenges resiliently in this changing
world. With our brilliant technology, strong passion andsympathetic thoughts, we ensure the highest quality andreliability of our products.

Social Contribution

and wire for infrastructure,

For 87 years since its establishment, SWCC has been involved ininfrastructure through its products and has continued to serve society,which is a source of great pride for SWCC. In order to contribute to society
in the future as well, we will continue to address social issues (renewableenergy, the labor shortage issue, etc.) and improve reliability in quality.

but also with our new products

Strong passion and sympathetic thoughts, we will never stop
challenging for a brighter future.

and services to enrich our planet,
we will never stop challenging for a brighter future.

Human Capital
The source of SWCC’s growth is our human resources. By promoting theutilization of diverse human resources, development of human resources who
are not afraid to change, and creation of rewarding jobs and workplaces, we
aim to become a corporate group in which employees are highly engaged.

Innovating new ideas today.
Becoming the norms of tomorrow.

Value Creation
SWCC will apply the technologies and the know-how we have cultivated overmany years to new markets and new fields to create new value and common
sense for the future. While maintaining the spirit of challenge since ourfounding, we will promote reforms such as making a shift from selling goods
to selling services and changing to become solution-oriented manufacturer.

34

Introduction

Trajectory of Value Creation

Trajectory of Value Creation Leading Up to the Birth of SWCC

1936～

2000s～

1970s～
Dynamic Growth Phase5

On April 1, 2023, SWCC Showa Holdings Co., Ltd. merged with SWCC SHOWA CABLE SYSTEMS CO., LTD. and SWCC SHOWA UNIMAC
LTD. to form SWCC Corporation. Since our establishment in 1936, we have been supplying the world with products, primarily electric wires
and cables, aiming to be a company that supports everyone's daily life through product for infrastructure. The new SWCC Group will not limit
itself to the activities of the past. We will also work to become a company capable of providing many solutions by challenging more difficult
social issues using our technology and ideas.

2023
Maturation Phase

Start as the SWCC Group

SWCC originated from theestablishment of SHOWA ELECTRIC
WIRE AND CABLE CO., LTD.

Developing a series of
initiatives to lead the cableindustry forward.

Utilizing our unique technologies
to enter new fields in addition to
deepening our existing businesses

Structured as a holding company,
we developed next-generation markets
with our own brands.

Aim to create further corporate value
through more strategic group management.

In 1936, SHOWA ELECTRIC WIRE AND
CABLE CO., LTD., SWCC’s predecessor,
was spun off from the electric wire divisionof Tokyo Electric Company (currently
Toshiba Corporation). We introduced theworld’s most advanced German-maderolling mill ahead of other companies, andstarted manufacturing and selling electric
power and communication cables at our
Kawasaki Plant (Kanagawa Prefecture).

In the 1940s and 1950s, the Company wason a steady growth trajectory as a result of
being listed on the Tokyo Stock Exchange,technological alliances with overseas
companies, and expansion of production
bases. In 1969, we introduced General
Electric Company’s (GE) dip forming system
for the first time in Japan to pursue thequality of oxygen-free copper and to save
space in our manufacturing facilities.

In the 1970s, we developed products that
met the needs of the times, such as
superconducting wires for maglev trains andheat rollers for electronic copiers. In 1985,
we also entered the laminated rubber isolator
market, which are now indispensable forseismic isolation systems, by making use oftechnologies derived from electric wires.

In 2006, the Company shifted to a holding company structure andchanged its name to SWCC SHOWA HOLDINGS CO., LTD. We started todevelop our own brands such as the SICONEX® line-up of compact
electric power equipment products and high-performance oxygen-freecopper MiDIP®, and strengthened our response to new markets that also
contribute to solving social issues, including the strengthening of power
infrastructure, the electrification of automobiles, and other solutions.
In the 2000s, we further developed ouroverseas business operations that westarted in the 1990s.

The Company has reorganized its Group management structure
and changed its name to SWCC Corporation. After ourconsolidated subsidiaries SWCC SHOWA CABLE SYSTEMS CO.,LTD. and SWCC SHOWA UNIMAC LTD. were merged, we
transitioned from a pure holding company to an operatingcompany in order to accelerate the speed of strategic planningand execution. By using SWCC, the four letters that have beenused for many years as an abbreviation of the Group’s name, asa new trademark, we will maintain the corporate brand we havecultivated so far, renew our image, and accelerate corporatetransformation and growth for the future.

》Value Creation that Supports Social Innovation》Value Creation that Supports Social Innovation● Since its establishment, the Company has been manufacturing power cables andcommunication cables, supporting the construction of social infrastructure● Using our unique rubber blending technology, we produce seismic isolation andvibration control components that protect lives and property from earthquakes● Started manufacturing optical fibers in anticipation of the full-fledged arrival of
the information age● Provision of electronic equipment that plays a leading role in OA and precision
devices that serve as core elements of copy machines● Provision of high-quality copper-silver alloy wire in cutting-edge fields
such as mobility, medical care, and robotics● Developed e-Ribbon® rollable ribbon for mass installation of opticalfibers in data centers● Developed SICOPLUS® to meet thechallenges of the electric power market,
which requires maintenance andenhancement of construction technology● Developed a superconducting cable systemthat contributes to the effective use ofgenerated electricity

6

Introduction

Business and Presence

Business Activities and Sources of Value Creation

SWCC’s Business Areas and Strengths

Energy and Infrastructure
Business

Electrical Equipment andComponents Business

The core business of the SWCC Group which createssocial infrastructure

Leading the era of high-speed, high-capacity
communications with a variety of solutions

Through the Energy and Infrastructure Business, our core business,
we have been supplying the world with products, primarily electric
wires and cables, since our founding to support social infrastructure.
We also offer a wide range of products that connect power plants tohomes as well as products that protect people’s lives andinfrastructure from disasters such as earthquakes and fires.
The SWCC Group pursues high-quality products and solutions that
support the new era by adapting power cables, power equipment
products, and seismic isolation products to the needs of the times.
We are developing solutions in the electric power market based on our
SICOPLUS® strategy with our core product SICONEX®.

In addition to communication cables essential for telecommunications,
we provide devices for a wide variety of fields including wire harnesses used
for the internal wiring of household appliances and electronic equipment,
parts for copiers, and cables for factory automation applications.
By collaborating with domestic and overseas Group companies and partnercompanies, we use the latest production technologies to develop various
products. We live in an era where people are connected with people, people
are connected with things, and things and connected with things
everywhere. We will leverage our wealth of technologies and experience topromote higher quality and higher added value in a variety of device
solutions to support the evolution of a connected society.

Communication andIndustrial Devices BusinessAccelerating the evolution of the world by utilizing
the advantages of our proprietary technologies

Developing growth markets that bring innovation tosociety

We are taking on the challenge of establishing dominant positions ingrowing markets with our high-quality performance material
technologies at the core. (MiDIP®, an oxygen-free copper produced by
Japan's only dip forming system, is highly regarded in the automotive
field, and copper-silver alloy, which offers high strength, highconductivity,) and bending resistance, is highly regarded in the
medical care field. SWCC will continue to strengthen our productcompetitiveness not only in domestic market but also in overseas
markets. Through Group-company collaboration, we meet customers’
expectations and demands while innovating quality, cost, and speedby bringing all three together.

We offer creative products utilizing our core technologies in growth fields
such as automotive, factory automation, medical care, AI, and robotics. In
the automotive field, where the shift to electric vehicles and autonomous
driving is progressing rapidly, we have developed aluminum cables forautomobiles, wireless power transfer coils, and high-speed transmission
cables. In the future, we will expand our range of products fornext-generation bullet trains and promote efforts toward thecommercialization of superconductor products. In collaboration with otherbusiness segments, the New Business segment is developing high added
value products and solutions not bound by existing frameworks andcustoms to create new possibilities for the SWCC Group.

New Business

SWCC’s Presence
Net sales(100 million yen)
2,500
2,000

Operating income/Operating income margin

Net income attributable to owners of parent/ROE

Total assets/Shareholders’ equity/ Shareholders’ equity ratio■Operating income■Net income attributable to owners of parent■Total assets ■Shareholders’ equity

120

1,772

1,992
1,711

2,091

1,617

60
1,000
500

2018

2019

2020

2021

2022

There were increases in shipments due to stable demand from the domestic
electric power infrastructure and stable demand from the construction-related
sector (Energy and Infrastructure Business) in Japan. Although there was adecrease in shipments due to the impact of automobile production cutbacks, partly
due to the impact of rising copper prices, net sales increased 5.0% year on year.
Scope of data: The former SWCC Showa Holdings Co., Ltd. and its consolidated subsidiaries

7

100

100
80

1,500

0

Operating income margin (%)

86
66

76

5.0%

4.7%

5.0%

(100 million yen)

105

3.8%

40

40

20

20

0

2018

2019

2020

2021

2022

In addition to stable demand for domestic power infrastructure, thedomestic construction-related industry (Energy and Infrastructure
Business) saw improved earnings and stable demand due to theintegration of manufacturing and sales of joint ventures, and operating
income increased 4.3% over fiscal 2021, despite the impact of reduced
automobile production on earnings (Electrical Equipment and Components
Business) and other factors.

94

94

0

55

46

13.5%

2018

50

17.7%
14.7%

2019

15.0%

11.4%
2020

900

2022

In the current consolidated fiscal year, net income attributable to owners of
the parent increased slightly from FY2021 as a result of the aforementioned
increase in operating income as well as a gain on the return from theretirement benefit trust despite the recording of a settlement payment andbusiness structure improvement expenses.

1,242

28.1%

600
300

2021

1,474

1,500
1,200

80
60

Shareholders’ equity ratio (%) (100 million yen)

1,800

120
100

5.0%

ROE (%) (100 million yen)

0

1,225

32.3%

349

396

2018

2019

1,567

1,295

36.7%
476

2020

39.5%
583

2021

43.1%
675

2022

Total assets increased mainly due to an increase in fixed assets caused byan increase in inventories due to the impact of soaring copper prices andan increase in investment securities due to the return from the retirement
benefit trust. Although we paid dividends to our shareholders, we recorded
a net income of 9.4 billion yen, resulting in an increase in shareholders’equity and a shareholders’ equity ratio of 43.1%.

8

Introduction

Management Philosophy

Editorial policy
This is a report to stakeholders on the medium- and long-term valuethat the SWCC Group provides through its business activities towardrealization of an enriched human society. The 2023 edition presents
an image of the corporate entity that the SWCC Group wants tobecome through the newly formulated SWCC Purpose, value
creation, four transformations, business activities, and sustainability
management initiatives.
■ Period of the Integrated Report

SWCC Group’s Philosophy Structure

Purpose

VisionManagement Philosophy・
・
・
・
・
・
・
・The SWCC Group strives to be trusted

On April 1, 2023, the Company took a new step forward in a
new corporate form: SWCC Corporation. Under the name“SHOWA ELECTRIC WIRE AND CABLE”, which people havebeen familiar with for 87 years since our founding, we haveconnected social infrastructure with electric cables at the core.
From here on, we will support a sustainable society withvarious solutions. In addition, we have formulated the SWCC
Purpose along with our change in corporate structure.
“Innovating new ideas today. Becoming the norms of
tomorrow.” This year’s Integrated Report begins with theinformation on the thoughts behind the SWCC Purpose,
information on the new SWCC way and then provides details
on the progress of the mid-term management plan and the
deepening of sustainability management. I hope that thisIntegrated Report will help deepen your understanding of theCompany and look forward to your continued support of the
SWCC Group in its new form.

constantly challenge ourselves tochange● Reporting, communication, and● We act with the courage to breakconsultation are done promptly

away from customs that do not fit
the times● When a problem arises, we willpromptly resolve it, analyze the truecause, and prevent recurrence

Noriyuki Shiga
September 2023
SWCC Corporation Fellow
General Manager of Sustainability
Promotion Department, Corporate Strategy Division

Greetings
Greetings ...................................................................... 11
SWCC Group’s Value Creation Story
Value Creation Story .................................................... 17
Value Creation Process................................................ 19
Message from Officers of the Corporate
Strategy Division .......................................................... 21
More Profitable (Transforming Our Corporate
Culture and Business Model)● We think and act proactively on ourown without being bound by precedentor waiting for instructions● We are always aware of compliance and are● We value the trust of our customers

committed to performing work and actions that
we can proudly tell our customers and family
members about

and respond with sincerity and care

● We will create a rewarding working environmentMore powerful (Transforming Our People)
Message from the Officer in Charge of Researchand Development ......................................................... 27
More Widely (Expanding into New Markets and
New Business Areas)
Strategies and Progress by Business Segment ......... 29
Energy and Infrastructure BusinessElectrical Equipment and Components BusinessCommunication and Industrial Devices Business
Expanding Business Domains ..................................... 35
Sustainability Management
Sustainability Promotion .............................................. 37
Materiality ..................................................................... 38

Being Friendly to Our Earth ......................................... 43
Our Partnership to Work Together .............................. 45
Helping Our People Shine............................................ 47
Our Governance for a Better Company....................... 49

Thinking before acting

for each and every employee by always
remembering to be considerate of others

9

Editorial Policy and Table of Contents........................ 10

Round-table Discussion among Outside Directors .... 57
Forward-looking Statements

Management Team (Introduction of Officers) ............. 61

The Company’s current plans and strategies and our outlook
for the future in this Integrated Report are based on information
currently available to us that we consider to be reasonable atthis time, and involve risks and uncertainties. Actual results
may differ from those predicted by the forward-looking
statements due to various factors.

Financial and Management Information
Financial/Non-financial Highlights............................... 63
Key Financial Data for the Past 11 Years.................... 65
Consolidated Financial Statements............................. 67

Financial and Management Information

SWCC Way (code of conduct)・・・・・・・・・Realize value creation through swiftness, being
passionate about our work, and thinking before acting

an important management resource
and act with an emphasis on speed

SWCC Group’s Philosophy Structure ........................... 9Creating Our Future...................................................... 41

Vision・・・・・・・・・・・・・・・・・・・・・・・・・SWCC aims to become a solution-oriented manufacturer!

● We are not afraid of failure and

SWCC’s Current Businesses and Presence ................. 7

Sustainability Management

SWCC Way● We are always conscious of time as

History of Value Creation and Innovation...................... 5

Message from the Officer in Charge of
Human Resources ........................................................ 25
From the publisher on issuance of the SWCC Group
Report, Integrated Report 2023

Passion

SWCC Purpose............................................................... 3

More Resilient (Strengthening Our Financial
Foundation)

Management
Philosophy

Swiftness

We are SWCC Group ..................................................... 1

SWCC Group’s Value Creation Story

April 1, 2022 to March 31, 2023 (FY2022)■ Scope of the Integrated Report
SWCC Corporation, its consolidated subsidiaries (8 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 2023 (next scheduled publishing date: September 2024)■ Other
The company brochure, annual securities report, and other company
information are available on the SWCC Group’s website.

Introduction

Greetings

The SWCC Group strives to be trusted

Contents

Share and Investor Information/Company Profile ...... 69

10

Greetings

Looking Back on the Five Years Since Becoming President

The SWCC Group is Opening the Door to a New Era

Invested capital and ROIC

■ Interest-bearing debt (left axis) ■ Shareholders’ equity (left axis)(100 million yen)

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

Pre-introduction three-year average:

2018

3.2%

2019

2020

2021

Post-introduction
four-year average:

2022

-4.0%

Financial and Management Information

11

ROIC (right axis)

Introduced ROIC Began restructuring

1,400

Into the New Paradigm

Invested capital (left axis)

Sustainability Management

President and Representative Director

SWCC Group’s Value Creation Story

SWCC Corporation

support the reform.
In terms of business governance, we have changed
from a structure that has prioritized individual
management of affiliated companies to a management
structure centered on business segments so that thebusiness can be seen from the market. We decided to
manage our business from the perspective of the market,
not from the products we offer.
This kind of management reform began in earnest in
FY2019. FY2020 was a difficult period due to the impactof the COVID-19 pandemic. However, management
reforms had already progressed to a certain extent and aflexible production system centered on businesssegments had been functioning, allowing us to achieve acertain level of profit.
One of the things that I place importance on when
thinking about management is numbers. My experience
as an engineer taught me that all results are in thenumbers. When you do not achieve the numbers you
expect, your way of thinking and efforts are wrong.
Therefore, it is important to always look at the latest
numbers to see if you are heading in the right direction.
With this in mind, I have been committed to making surethat people throughout the Company understand thecurrent status of our business in numerical terms.
Although the results of numerically-oriented management,such as the introduction of ROIC management, havebeen steadily showing results, there is still some way togo. I would like to further promote management that aims
to enable both employees on the front lines of businessand executives involved in management decisions tograsp the figures they need to see in real time and withthe accuracy required, and to be able to make immediate
course corrections in response to the businessenvironment.

I became President of the Company in June 2018.
At that time, the Company was on the verge of gettingout of a prolonged slump in business performance due tothe large losses it incurred in FY2015. However, due to its
weak financial position, we were in a situation where we
needed to further increase the speed of management
reform to achieve a true recovery in businessperformance.
Until then, I had served as a director of an affiliatecompany as well as an Executive Officer and Director of
the Company. However, I felt a variety of challenges inGroup management reform and was very frustrated that it
did not proceed as I expected. When I was asked to
become President, I felt that I was entrusted with themission to “We must first transform the governance ofdecision-making.” I am the first female President of theCompany since the founding and also the first president
who has a background in research and development, so I
understood that I was recommended to become thePresident with an expectation that reform would be
different from the reforms of the past.
As President, I started by reviewing our financial data tosort out and identify issues. I thought, “We must firsttransform the governance of decision-making” in order tosolve these problems. This is because in order for acompany to formulate a mid-term management plan andachieve management reform, it is necessary to have astrong will on the executive side to lead the reform and asystem of the Board of Directors to support andsupervise it. To this end, we changed the institutional
design from a company with a board of statutory auditors
to a company with an audit and supervisory committee,
giving the executive side the authority and responsibility
to reform with a sense of speed, and having outside
directors with the supervisory function and authority to

Greetings

Bouncing with new corporate brand,
advancing into a new growth.

7.1%

12

Greetings

Mid-Term Management Plan

New Company Name, New Management Structure, and What
We Will Strive to Achieve through the New SWCC Purpose

11
13

which can be said to be the result of promoting change, thetheme of the plan. In mid-term management plan Change &Growth SWCC 2026, which started in FY2022, the word“growth” is included in addition to “change.” Growth meansthat we must become a better company and that the next

Operating income margin・・・・・・・・・・・・・・・・・・ 7% or over
ROIC・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 10％ or over*Note: ROIC target was revised on May 12, 2022.

step is to create a new phase of growth.
Under the previous mid-term management plan “Change
SWCC 2022,” we introduced ROIC management, reviewed
our business portfolio based on this change, and adopted apolicy of increasing profit margins while maintaining
Group-wide sales to a certain degree. As a result, we areselling, withdrawing from, and shrinking businesses with low
profitability as well as relocating them overseas. The next
goal should be to expand our business scale and increase
market capitalization while using ROIC as an indicator. To
make this happen, we need to reach an operating income
performance target of 15 billion yen in FY2026 as well as an
operating income performance target of 20 billion yen and
ROIC of 10% in FY2030.
In 2019, we introduced ROIC management, broken down
into an ROIC tree for each business, and have been working
on improvement drivers at the frontline level. I would like for
the Company to achieve its goals by swiftly moving throughthe PDCA cycle for each initiative.
Looking at our three core businesses as examples, theFinancial and Management Information

We achieved the performance targets of the previous
mid-term management plan “Change SWCC 2022” inFY2021, one year ahead of schedule. The Company
achieved an operating income margin of 5% and operating
income of 10 billion yen by improving its financial position,

Operating income・・・・・・・・・・・・・・・・・・・・・・・ 15 billion yen

Sustainability Management

Business Environment and Progress of Mid-Term Management Plan
“Change & Growth SWCC 2026”

Net sales・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 215 billion yen

SWCC Group’s Value Creation Story

The new company name, SWCC, is an abbreviation ofShowa Electric Wire & Cable Co., Ltd., the name that weused for a long time. In addition, all senior executives madethe decision for us to make this transition in the hope that theCompany will develop new businesses without being limited
to the electric wire business in the new era so that theCompany will continue to grow sustainably. We are proud of
the fact that we have supported infrastructure through ourelectric wire business during our 87-year history and would
like to grow while taking on the challenges of the new world
by utilizing the core technologies we have developed in thatfield. In order not to limit our potential by calling ourselves an“electric wire company,” we decided to use the newcompany name which expresses our hope for the next 10 to
20 years and beyond.
As the new SWCC sets sail, we have decided to establish
the SWCC Purpose, which explains how our Company
connects with society and the future. The SWCC Purpose,
which opens with the phrase “Innovating new ideas today.
Becoming the norms of tomorrow.”, was not created in a
top-down manner but was the result of discussions over a
period of about six months among employees of various
departments, occupations, and ages who gathered fromacross the Group. We are currently in the process of deeply
disseminating the SWCC Purpose throughout the Company,
and the members that were involved in formulating it are
visiting bases nationwide talking about its message. Hearing
the real voices of colleagues at SWCC, who are in the sameboat as I am, expressing their thoughts on their work and lifein the SWCC Purpose seems to resonate with each andevery one of our employees and help them to make it theirown.
However, just because we have established the SWCC
Purpose does not mean that all employees can immediately
head in the same direction and foster a sense of unity. It willtake a certain amount of time for the SWCC Purpose to takeroot within the Group to serve as a guideline for SWCC for
overcoming the high uncertainty of the times and achieving
sustainable growth.

FY2026 performance targets

Greetings

Before I talk about the new name of the Company, I would
like to talk about the transition from a holding company
structure to an operating company structure that took placein April 2023 when the company name was changed. This is
one of the reforms that I wanted to implement since
becoming President.
As for our size in terms of number of employees, the
SWCC Group employs about 2,400 people in Japan andabout 4,000 people in total when including employees at ouroverseas bases. In addition, considering the scale of earningof each business and the overlapping business areas ofseveral subsidiaries, the question of adopting a holding
structure arises. As is well known, a holding structure
consists of several operating companies under a pureholding company. Although this is effective for managing
each company and keeping track of earnings, it often causes
problems such as centrifugal forces often being at work andhigh management costs, and also makes governance more
complicated. When I assumed the position of President, I
wanted to change the structure of the Company. Since werecently made progress in improving our financial position,
we have transitioned from a pure holding company to an
operating company.

Change & Growth SWCC 2026

promotion of businesses that solve social issues by utilizingcore value (high value-added strategic products) has alreadyproduced growth buds in various businesses.
In the electric power business, we are promoting abusiness model focusing on the SICONEX® brand of electric
power equipment that responds to the demand for
decarbonization of society and the renovation of aging social
infrastructure. In addition to being lightweight and very easy
to install, SICONEX® is eco-friendly and safe because it does
not use insulating oil and has a high level of seismic
resistance against large earthquakes. In addition, we offer
value such as labor saving and simplification of construction
work to address the labor shortage. It can be said that theelectric power business will surely contribute to society fromthe perspective of the spread of renewable energy, which isa national issue, and power grid enhancement.
In terms of contributing to a decarbonized society, thebusiness for xEVs (electric vehicles) is promising. SWCC has
been producing oxygen-free copper through continuous
casting for many years and delivering it to customers underthe brand name MiDIP®. In addition, magnet wire, which ismade by copper wire drawing and covered with highperformance insulation, is used for xEV motors and inverters.
It is clear that demand for environmentally-friendly vehicles
will increase in the future. As part of the mid-term
management plan, we plan to expand our magnet wirebusiness for xEVs, evolve from a current wire rod
manufacturer to magnet wire manufacturer, and shift to abusiness model with a higher degree of processing quality
and higher profit margins.
By constantly monitoring investment efficiency indicatorssuch as ROIC and WACC and rolling out mid-term
management plan “Change & Growth SWCC 2026,”
we hope to better ensure the achievement of our goals.

1214

Greetings

I am always aware that my mission is to enhance thecorporate value and shareholder value of the SWCC Group.
Our Group is still in the process of management reform,
and there is room for further improvement of our financial
foundation and profit growth in the future. Since we also
have businesses that contribute to solving social issues andare useful to people, I believe that we can concentrate ourresources in such areas and expect growth through the
expansion of businesses centered on our core technologies.
I will continue to promote our growth strategy, deepen
communication with our shareholders and investors, andfulfill my responsibilities as a corporate manager. At present,
there is a strong demand for corporate management thatemphasizes equity value, as, for example, evidenced by the
Tokyo Stock Exchange’s request for improvement measuresfor companies with P/B ratios below 1x. At the financial
results briefing for the fiscal year ended March 31, 2023, we
provided an analysis of the current state of the Group and its
initiatives for future growth as measures to realize
management with an awareness of the cost of capital. In
FY2023, we will revise our mid-term management plan inorder to ensure that it is solid. I would like to actively
communicate the growth story of the SWCC Group throughthe plan.
In addition to being a manager, I am also an engineer.
Before you know it, technologies in uncharted areas where

workplaces based on the results of employee questionnaires
and promoting the use of childcare leave by male employees.
Women's empowerment is not equivalent to diversity. All
employees, regardless of gender, age, or nationality, can talkwith each other from the same standpoint to build a better
company. I would like to see the Company realize theessence of diversity in the SWCC Group.
From the perspective of sustainability, it is also necessary
to match business strategies with human resource
strategies. Based on the concept of placing the right people
in the right jobs, we will continue to promote theconcentration of human resources in strategic businesses,
career recruitment, and acceptance of overseas personnel,
but we must also look ahead to a time when humanresources will be in short supply. To overcome this, we will
actively promote labor saving and robotization of production
using IoT. In addition, we need to make drastic progress intransforming our operations through DX and AI. This will be
led by the Digital Innovation Promotion Office which waslaunched in 2020.
“G” (governance) is a management issue that I have been
most conscious of since being appointed President, and myapproach to governance in management reform is as I
mentioned at the beginning. In addition, I believe that one of
the most important aspects of “G” should be an outside
perspective. This is because the value of a company isdetermined by outside parties such as shareholders andother investors. When we listen to various opinions throughSR and IR activities, we see business possibilities and risks
from points that are significantly different from those within
the Company. Therefore, I believe that the presence ofoutside directors on the Board of Directors has value in
day-to-day management. We have people with various
specialties and corporate management experience, such as
investment, manufacturing technology, sales, overseas
business, and IT, who participate in management as outside
directors. Serving as President as well as Chairman of theBoard of Directors. I feel that meaningful discussions havebeen stimulated by the opinions of the Outside Directors
based on their diverse knowledge, leading to appropriate
management decisions.

the world’s engineers are ruthlessly competing will be usedby people around the world as the norm. This is the greatest
joy for researchers, engineers, and others who create things.
“Innovating new ideas today. Becoming the norms of
tomorrow.” I ask for your continued support as we will aim
to further create corporate value and stock value while firmly
conveying to everyone the SWCC Group’s future challenges.

SWCC Group Purpose

Innovating new ideas today. Becoming the norms of tomorrow.
In line with changing our corporate name, the SWCC Group formulated the SWCC Purpose to

Sustainability Management

The most important matter to the SWCC Group issustainability management. Based on this approach,we have established KPIs for ESG initiatives and arepromoting them.
With regard to “E” (environment), we have been promoting
the Group Voluntary Action Plan on the Environment(Voluntary Plan) since 1993 and are fulfilling our corporate
responsibility by setting numerical targets for reduction of
CO2 emissions, reduction of waste, and effective use ofwater resources, which we are continuously working toachieve. In business, we are developing products that lead todecarbonization, such as high-performance magnet wires
used in xEVs. Therefore, I believe that we can also contributeto the preservation of the global environment by expanding
such businesses.
We must also strengthen our factory infrastructure in orderto ensure our own continued operations. Based on thisapproach, we will renovate each of our production sites in
anticipation of natural disasters, which have become
increasingly severe in recent years, and promote measures
to ensure that we can fulfill our responsibility to support
infrastructure and ensure the safety of our employees andtheir families in the event of a disaster.
For “S” (society), the importance of initiatives focusing on
human resources is increasing. Against the backdrop of ashrinking workforce and intensifying competition for humanresources, managers are faced with the question of how
SWCC can become an attractive company that allows its
limited human resources to work safely with peace of mind
while highly motivated and demonstrating a high level of
performance. I would like to deepen mutual communication
between management and employees so that they canunderstand the Company's strategy and approach, andprovide growth opportunities that employees seek to makethe Company a rewarding place to work. I think it is also
necessary to promote diversity in order to improveengagement. Although the ratio of female employees andfemale managers in the SWCC Group is still low, we have adiversity promotion project under the direct control of the
President in which we conduct activities to foster mindset
through the introduction of various work styles and seminars.
In addition, we are promoting the creation of comfortable

SWCC Group’s Value Creation Story

Message for our stakeholders

Greetings

Basic approach to sustainability management

convey the message that we will create new value in response to the changing times.
Through our businesses, we will contribute to the creation of a better and more sustainable future.

Based on our Purpose, we will sustainably create corporate value and shareholder value

Target for FY2030

45%

50%

Realization of carbon neutrality

Reduction of final waste disposal volume(baseline year: FY2018)

80%

85%

Achievement of zero final disposal volume

Reduction of water usage(baseline year: FY2018)
Renewable energy adoption rate
Female empowerment (baseline year: FY2020)
Ratio of female managers/section managers and above

11
15

Target for FY2050

Target for FY2025

CO2 emissions reduction(baseline year: FY2013)

20%

50%

Promotion of sustainable use of water

Business Strategy● Optimize business portfolio● Establish investment and profit

30% or more
Target for FY2026

8%/10%

contribution timeline● Create a growth strategy for eachbusiness

Financial Strategy● Cash allocation● Further improve capital efficiency● Maintain and improve financial soundness

and provide returns to shareholders

Non-financial Strategy● Promote a human capital strategy

that supports sustainable growth● Contribute to the realization of a

Financial and Management Information

Various KPIs related to ESG initiatives

With a minimum ROE of 10%,we aim to achieve a ROIC of 10% or more, P/B ratio of 1x or more,and dividend of 120 yen or more as soon as possible

decarbonized society

1216SWCC Group’s Value Creation Story

Value Creation Story
In April 2023, our Company was reborn as SWCC Corporation.
In addition to further strengthening and deepening our three core business segments ofEnergy and Infrastructure Business, Electrical Equipment and Components Business,
and Communications and Industrial Devices Business,
we will also boldly transform ourselves to achieve sustainable growth.

The Company We Want to Be

Business Portfolio Transformation

Change & Growth

Current Businesses

Change●●Energy andInfrastructure
Business

Electrical
Equipment andComponents
Business

High-performanceoxygen-free copper
MiDIP®

●

Copper alloys●

Various types ofmagnet wires●

Litz wire●

Optical fiber cables●

LAN cables●

Wire harnesses●

Heat rollers for copiers●

Zero trust security●

SWCC Smart Stream●

Superconducting
cable system

Further increase in structural reforms

Transition to growth phase

Increase profitability throughpenetration of ROIC management
Value chain reform and business modeltransformation through DX
Strengthen corporate governance system

Promotion of social solution-oriented businesses
Shift of business portfolio focusing on growth businesses
Transition to growth phase by expanding investments

New Business

17

Five Materiality Themes

01

02

03

The Value We Want to Bring to Society
SWCC will provide value that contributes
to a sustainable society through its
unique products and services.

Sustainability management that supports reforms
Communication
and Industrial
Devices
Business

We aim to be a corporate group that
continuously enhances corporate value by
leveraging the advantages we havecultivated through a variety of products,
primarily wires and cables. In order tocreate new value that will lead to a better
future, we will continue to pursue products
and services that enhance customer trust,environmentally-friendly products, andcorporate value that is trusted createdthrough sound business activities.

04

05

Our future

Our earth

Our partnership

Our people

Our governanceOur future

Our earth

Our partnership

Our people

Our governance● Aiming for a safe and prosperous
society, we will support social
infrastructure by taking measuresagainst intensifying natural disasters andthe worsening deterioration of buildings
and equipment.
● We will promote the use of renewableenergy, the shift to electric vehicles, andsafe and comfortable autonomous
driving, which will lead to the realizationof a decarbonized society, the goal of all
mankind.
● We will develop our business with a view
to solving problems in the fields ofeducation and medical care, which are
indispensable for people's rich andhealthy lives, as well as a shortage ofworking populations due to the advent ofa declining birthrate and aging society.

Financial and Management Information●

GrowthValues of the SWCC Group

Sustainability Management

Extra high-voltage cables
Electric power equipment
parts (SICONEX®)● Overhead power lines● Industrial wires andcables● Fire extinguishing/
prevention cables● Electrical materials● Seismic isolation, vibration
control and isolation

SWCC 2026

SWCC Group’s Value Creation Story

Mid-Term Management Plan

The SWCC Group will create newvalue for a better future(SWCC VISION 2030)

Greetings

Creating for
the Future

18

SWCC Group’s Value Creation Story

The SWCC Group leverages the strength of its accumulated capital to create value for the future throughits business.
The value created by SWCC in the energy, device, communications, and other fields that support economic
and social activities is shared with all stakeholders. This value creation process is a continuous cycle aimed at
maximizing corporate value.

Value Creation Process

Financial capital

Human capitalStrength (s) High capital efficiency with an ROE of more than 10%
Issue (s)Financial constitution resilient to market fluctuations,further profitability improvement, and ensuring
investment capacity

Social and relationship capitalStrength (s) Human resource management (health andproductivity management)
Issue (s)Next-generation management training, D&I

Equipment capitalStrength (s) Broad customer baseIssue (s)Strengthening of relationships withstakeholders

Intellectual capital・ Cables and connectors that support the power infrastructure
・ Industrial wires and cables used in various factories and buildings
・ Seismic isolation devices that protect life and property fromearthquakes

Natural capitalStrength (s) Ability to develop businesses that
contribute to the environment
Issue (s)Contributing to the reduction ofenvironmental impacts

SICONEX®

Exce
ed
cu
sto
m

・ Optical fiber cables for broadband infrastructure trunk lines
・ Optical LAN cables used in offices
・ Precision devices that serve as important parts of copiersand printers

Optical cable

r st

ra

st

in v es t m e nt

Sta

bl

e
yg

ne

Human Resource Capabilities are
the Foundation for Business Evolution

Employees
An environment in which diverse
human resources can work healthily,safely, with peace of mind, and findtheir work rewarding

Local communities
LAN cable

Solutions Business・ The ability to perform high-voltage power cable connection
work is maintained and enhanced using SICOPLUS®,a system for performing cable connection work
・ e-Ribbon® rollable ribbon enables high-density and efficientwiring installation in area with limited space in data centers

Contribute to solving local issues
through corporate management inwhich there is a high awareness ofsocial contribution

Global Environment
Promote group-wide environmental
management to reduce theenvironmental impact of the entire
value chain

Financial and Management Information

gt h

h re

Stable and continuous shareholder
returns based on sustained growth incorporate value

Rollers for copiers

te

re n

ug

Energy and Infrastructure Business, Electrical Equipment and Components Business,
Communication and Industrial Devices Business, and New Business19

Oxygen-free copper

sh

e ou

The
SWCC Groupwill create newvalue for abetter future

Shareholder and Other
Investors

Communication and Industrial Devices Business

ca

Iden
tify
cu
s

・ Oxygen-free copper wire for electricvehicle motors
・ Copper alloy wire provides highstrength and high conductivity

Contribution to business operations
by providing products and services
that can be used reliably

Sustainability Management

Refin

hro

General-purpose wires

Electrical Equipment andComponents Business

tions
cta
pe
ex
er

er
m
to

ues
iss

Coexistence and co-prosperity bornfrom mutual trust through fair andequitable transactions

Customers
Seismic isolationequipment

Business Model

Business partners

SWCC Group’s Value Creation Story

Strength (s) Development capabilities and branddevelopment SICOPLUS®, MiDIP®,
and FLANTEC®
Issue (s)Development of next-generation
strategic productsPlants (Sagamihara, Mie, Sendai)
Factories (Aichi and Ibaraki)
Watarida Engineering Center

Energy and Infrastructure Business

Value for Stakeholders

Greetings

Products Created by Our Businesses

Management capital

e-Ribbon®

20

SWCC Group’s Value Creation Story

More
Profitable

Message from Officers of the Corporate Strategy Division

Transforming into a Solution-oriented Manufacturer

Managing Executive Officer
In charge of Management Strategy

Executive Officer
In charge of Capital Strategy

We Will Accelerate Our Growth Strategy in Line with
the SWCC Purpose

On April 1, 2023, SHOWA ELECTRIC WIRE AND CABLE
transitioned from a pure holding company to an operatingcompany and was reborn under a new company name,
SWCC. Together with changing our corporate name, the
SWCC Group formulated the SWCC Purpose to convey themessage that we will create new value in response to thechanging times.
The SWCC Purpose serves as a guidepost for reaching
the goals set forth in the mid-term management plans“Change & Growth SWCC 2026” and “SWCC VISION 2030,”
conveying the Company’s aspiration for growth strategies
such as expansion into new markets and new businessareas by transitioning into the growth phase.
To transition into the growth phase, we have alsoestablished a new Corporate Strategy Division to accelerate
our efforts to become a more profitable corporate group bypromoting financial, business, and sustainability strategies as
an integrated unit.

The SWCC Group is currently promoting a new growthstrategy while transforming its business portfolio andcorporate culture. First, business areas are categorized into
four quadrants based on market, product/service andwhether it is an existing or new business area. In addition,for each category, we set investment criteria such as profit
targets, the timing of the start of contribution to profit, andthe period of return on investment, and select investment
projects while prioritizing them. Among these categories,
growth investments will be made in the following categories
in which we are gradually entering and expanding into:
Existing Technologies x New Markets, New Technologies x
Existing Markets, and New Technologies x New Markets.
We will develop business into new fields through M&A andinvesting in start-up companies.
Growth investments will also include investments inoverseas markets, including cross-border M&A and joint
ventures with overseas companies for businesses that we
believe have a greater affinity for developing new areas ofbusiness in overseas markets.
It goes without saying that we will also achieve steadyorganic growth in our existing business areas while
aggressively investing in increased production and R&D.

Increase Market Share

New Technologies x Existing Markets

New ProductDevelopment

Growth Investment
New Market
Development

Diversification

Existing Technologies x
New Markets

New Technologies x
New Markets● Copper products for the mobility field● Development of components forthe semiconductor market● Development of new markets andnew businesses for wire harnesses● AVR® Provision of solutions for the
medical care and education fields
through the utilization of AVR®

More
Resilient
Strengthening Our Financial Foundation

Deepening ROIC Management for Taking the Next Step
Improving Return on Capital by Deepening
ROIC Management
The SWCC Group incorporated ROIC into its management in
FY 2019 and has been promoting ROIC management thatemphasizes not only P/L indicators but also the balance
sheet. The average ROIC over the four years since adopting
ROIC management has improved to 7.1% (3.8% before
adoption), a significant achievement. We will continue tofurther evolve ROIC management into a form of managementthat emphasizes the balance sheet and cash flow.
When ROIC management was adopted in FY2019, we
identified low-profit businesses and decisively implemented
various structural reforms to improve ROIC. Moving forward,
in addition to structural reform of unprofitable businesses, wewill focus on achieving improvement targets by lowering the

ROIC tree to the frontline level in each business segment withthe aim of raising the earning power of the overall business.
Through these initiatives, we will strengthen not only
profitability but also cash flow generation capabilities, suchas improving the cash conversion cycle by optimizing
inventories.
The essence of ROIC management is to lower WACC andobtain an ROIC spread. Reducing the cost of shareholders’equity, which is one of the components of WACC, will leadto the expansion of the ROIC spread. In addition tostrengthening our financial constitution, the beta value
used in calculating the cost of shareholders’ equity has
been decreasing in recent years. We believe it is important
to maintain an appropriate WACC level by controllingthe balance between shareholders’ equity andinterest-bearing debt.

Financial and Management Information

Expanding into New Business Areas throughGrowth Investments● Maintenance and servicing of sensing
technology applications● Collaborative partnerships for electric
power construction projects

Sustainability Management

21

SWCC Aims to Reach Even Higher Heights

Existing Technologies x
Existing Markets

SWCC Group’s Value Creation Story

Toshiharu Kamijo

Products, Technologies, and Services

Greetings

Tetsuo Komata

Categorization Based on the Four Quadrants of the Growth Strategy

Markets

Transforming Our Corporate
Culture and Business ModelIn conjunction with aggressive growth investments, the
SWCC Group will evolve to become a solution-oriented
manufacturer by looking at the entire value chain andcreating business models with higher added value.
The SWCC Group is promoting the SWCC Smart Stream
Business as part of its efforts to take on the challenge of new
businesses, and is working to develop new solution services
that integrate the Group’s technologies and data with DX.
For example, the SWCC Group is already developing an
educational program that incorporates DX, allowing trainees
to gain experience at virtual work sites in the area of power
cable connection work, an area where the SWCC Group has
know-how. Furthermore, we aim to apply this technology to
the medical care field and other fields.
In April 2023, we launched an in-house venture system asa mechanism to make it possible to propose new ideas thatare not bound by existing businesses.

22
12

SWCC Group’s Value Creation Story
At present, there is a growing demand for measures to realize
management that takes into account cost of capital and stock
price. The SWCC Group is also pursuing a financial strategy
with a PBR of 1x or more by securing an ROIC spread with theaim of achieving management with higher capital efficiency.
While PBR is broken down into ROE and PER, the SWCC
Group’s ROE has risen due to the success of our ROIC
management. It has been at a level above 10% since the fiscal

year ended March 31, 2018 and was 15.3% in the fiscal year
ended March 31, 2023. Our ROE is high compared to the 8%
indicated in the Ito Report and higher than other companies inthe same industry. On the other hand, PER remained at a low
level. By further reducing the cost of shareholders’ equity andclarifying the growth strategy, we aim to raise the expected
profit growth rate and raise PER.

Changes in Return on Capital (ROE/ROIC)

Introduced ROIC
Began restructuring(billion yen)

12
10
8

7.4%

20.0%

17.7%
15.3%

15.0%

13.5% 14.7%
12.3%

10.0%

11.4%

7.4%

Equity spread

Cost of shareholders’ equity

0.0%

7.3%
5.4%

6.0%
7.4%
3.6%

5.6%
WACC

6.3%

7.1%

ROIC spread

2.0% 0.7%-29.5%FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

0.0%

ROE (Return on Equity)

Strengthening Our Financial Base by
Accumulating Profits

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

0-10%
FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

(2)

-15%

(4)

-20%

(6)

Pre-introduction four-year average:

Post-introduction four-year average:

-25%

(8)

ROIC: 3.8%
ROE: 0.9%

ROIC: 7.1%
ROE: 14.7%-30%-29.5%-35%(10)
Operating income■

Net income margin■

ROIC (return on invested capital)■

ROE (return on equity)

ROIC (average at the end of each period)■

further enhancing our shareholders’ equity while steadily
improving profitability as set forth in the mid-term
management plan. This will help reduce financing costs anddiversify financing method. We will continue to further
strengthen our financial base through sound financial
discipline.

Aiming to Reach a Market Capitalization of
100 Billion Yen
The SWCC Group has set a market capitalization target of
100 billion yen after achieving a P/B ratio of 1x or moreduring the mid-term management plan period extending to
FY2026. With regard to capital policy, we will control thebalance sheet, raise funds, and allocate cash based on
capital efficiency with the aim of increasing corporate value
over the medium to long term. In particular, we will improve
capital efficiency by reviewing non-business assets such as
cross shareholdings and idle real estate. With regard to cash
allocation, we are working to allocate appropriate cash
allocation to growth investment, human capital investment,
research and development investment and shareholder
returns. With regard to shareholder returns, our basic policy
is to provide stable and continuous returns, taking into
account our financial base and cash flow conditions. The
dividend per share was 50 yen per share for the fiscal year
ended March 31, 2022 and 60 yen per share for the fiscal
year ended March 31, 2023. In the fiscal year ending March
31, 2024, we plan to increase the dividend to 75 yen andstart paying an interim dividend. The dividend payout ratio is
expected to exceed 30%.

(unit: billion yen)

Operating income

FY2020
performance

FY2021
performance

FY2022
performance

FY2023 target

FY2026 mid-term
management plan target

7.6

10.0

10.5

10.7

15.0

(4.7%)(5.0%)(5.0%)(5.0%)(7.0%)Net income

5.0

9.4

9.4

7.0

10.0

Dividend per share (yen)

20.0

50.0

60.0

75.0

120～

Dividend payout ratio

12.0%

16.0%

19.1%

32.0%

35%～

Shareholders’ equity

47.6

58.3

67.5

72～

90～

36.7%

39.5%

43.1%

45%～

50%～

79%

67%

61%

50%～

～50%

(operating income margin)

Shareholders’ equity ratio
DE ratio

PBR 1x or more
Marketcapitalization

100 billion yen

Together with Our Shareholders and Other
Investors around the WorldThe SWCC Group holds IR and SR meetings withinstitutional investors and shareholders not only in Japan but
also around the world. Through overseas roadshows, we
actively communicate our financial strategies, growthstrategies, and initiatives for corporate transformation topromote deeper understanding. In addition, the questions
and requests that we receive at such events are provided to
management as feedback and reflected as much as possible
in IR activities and information disclosure. The SWCC Groupwill enhance the dissemination of financial and non-financial
information more than ever before, and through IR/SR
activities that are closely tailored to shareholders andinvestors, will lead to the enhancement of corporate andshareholder value.

Financial and Management Information

23

0%

Sustainability Management

The basic policy of the SWCC Group’s financial strategy is tostrengthen its financial base by enhancing its equity capital,
focusing on the accumulation of profits from business
operations. The Company’s earnings recognition over the
past several years has led to a reduction in interest-bearing
debt, and in its most recent financial results, the equity ratio
improved to 43.1% and the debt-to-equity ratio to 61%.
Shareholders’ equity has accumulated reaching 67.5 billion
yen. We aim to acquire a credit rating of A- or higher by

5%

3.6%

-5%

■

■

10%

7.1%

2
7.6%

8.0%

4.0%

7.6%

6.3%

SWCC Group’s Value Creation Story

5.0%

4

10.0%

7.3%

5.6%

Greetings

SWCC’s ROIC

SWCC’s ROE

0.7%

15%

11.4%

5.4%

6

20%

15.3%

14.7%

13.5%

12.3%

17.7%

24

SWCC Group’s Value Creation Story

Transforming Our People

Human Capital Strategy Framework

Although many of the SWCC Group’s personnel are diligent
and reserved when viewed individually, I believe that they

Mid-Term Management Plan
Change & Growth SWCC 2026

Human resources development andutilization of external personnel

Further increase in structural reforms totransition to growth phase

Fair and impartial system (results based)(operating income margin of 7% or more;
ROIC of 10% or more)

Shift from changing our business portfolio
to changing our human resource portfolio

Futoshi Yamaguchi
Managing Executive Officer
In charge of Human Resources

also have the dexterity to flexibly adapt to the structuralreforms and changes in the business environment that havetaken place over the past few years. However, I recognizethat there is still room for improvement in their ability to set
their own goals for the future and work toward achieving
them. We need to develop leaders who have foresight and asense of balance, are not afraid of change or risk, and have aspirit of challenge. In order to secure the human resources
necessary for our growth and development from a limited
number of people, we need to improve the accuracy of ourtraining. We have developed a succession plan to nurture thenext generation of executives and leaders, and are promoting
a development program that connects young employees,
mid-career employees, managers, and Executive Officer
candidates. These programs have been in operation forseveral years and have produced some results, including
preparing Executive Officer candidates who have alreadyserved as Executive Officers.
In addition, human resource development requires not only
learning opportunities but also opportunities to experience
success in which they can actually demonstrate their abilities.
In succession plan training programs, participants also makerecommendations to management, link excellent ideas withactual commercialization and systemization. Proposers ofideas are then entrusted with related operations. We also
invite young employees to participate in projects under the
direct control of the President, providing opportunities fordiverse human resources to realize their ideas. However,when participating in a project while also performing one’s
primary work duties, the workload increases so appropriate
support is required. In order to secure time to focus on newvalue creation, we are promoting measures such as the
adoption of shared services, improving operations, andteleworking.

1. Promote the utilization of diverse human resources
2. Human resources development for the future
3. Improve engagement

The SWCC Group formulated the SWCC Purpose toconvey the message that we will create new value
in response to the changing times

Human Resource Portfolio Transformation
The basic concept behind our human resource portfolio is toplace the right people in the right jobs. We will work to breakaway from a mindset that tends to just fill vacancies, and tochange our human resource portfolio so that it can change
flexibly in line with the transformation of our business portfolio
into high-value-added businesses, which is being promoted
under our mid-term management plan “Change & Growth
SWCC 2026”. As a first step, we are working to visualize
human capital so that it is possible to understand where
human resources with what skills and experience are locatedwithin the Group. Since the system has already been
introduced, I want to see us achieve its effective operation assoon as possible.

Fair and impartial evaluation/treatment system
The Company is promoting the introduction of a treatment
system that is linked to the results of our work. Starting withmanagerial positions, we have expanded the system toinclude career-track positions and in FY2023 we expanded it
to include standard work positions. Next, we are also
considering including skilled workers at manufacturing sites.
Although it is not easy to measure and reward the work
performance of skilled workers who are responsible for
accurately performing their assigned tasks according toprocedures, we will explore a new approach to performance
evaluation that appropriately recognizes their efforts andfurther motivates them. We will develop an evaluation systemthat is fair, impartial, and satisfactory for evaluating job typebased performance.

Human Resource Recruitment and Utilization ofExternal Personnel
As competition for human resources intensifies, ourrecruitment activities must change as well. In order to evolve
into new areas, we will look more aggressively than ever at

Human resources development for the future
Training
Education that encourages a mindset
to take on challenges by receiving
Training
external
stimuli

Numerical target

Improve engagement

hiring external personnel and enhance the practice of hiringby job type targeting human resources that can be
immediately effective and highly specialized human resources
with skills in specific areas such as DX. In addition, since werefrained from hiring during a period of sluggish businessperformance, we are facing a situation where the workforce
in their late 30s to 40s is shrinking. Therefore, when following
the conventional career step process, there is concern that
there may be positions that may not function properly due toa shortage of human resources. To address this concern, we
will eliminate the seniority-based personnel system andintroduce a position skipping system in which employees canbe promoted to become senior staff or managers at an earlystage. Through such efforts, we will respond to a new career
step process, including the timing of the implementation oftraining programs.

Corporate Management That Leverages Diversity
The Group’s diversity initiatives have progressed frompromoting women’s empowerment to promoting diversity,
which creates opportunities and systems for employees todemonstrate their abilities regardless of age, gender, or
nationality. Currently, we are focusing on efforts to raiseawareness about unconscious bias (unconscious prejudice
and discrimination) among employees. However, in order tomake essentials of diversity to take root, I would like to see
the Company instill awareness about taking advantage of thebenefits of diversity. For example, the diverse knowledge,
experience, and wisdom of diverse personnel circulate in a
fluid manner throughout the Group as a result of personnel
rotations. If such a mechanism works, I believe that it will
revitalize various workplaces, allowing both individuals andthe Company to grow together.
We will continue to promote diversity to support thegrowth of the Group and strengthen human capitalmanagement.

Average hours of training per year per employee: 4 times longer than FY2021 by FY2026

Opportunities
Provide a place to realize the ideasof diverse human resources

Workstyle
improvement
Secure time to work on newvalue creation

Financial and Management Information

11
25

Innovating new ideas today.
Becoming the norms of tomorrow.

Sustainability Management

Human resources development for the future

Shift toward a highly effective
human capital strategy

SWCC Group’s Value Creation Story

With the SWCC Purpose as the driving force, the Group isdeveloping a human capital strategy that is linked with ourmanagement strategy. In FY2022, we established “Helping
our people shine” as one of our materiality themes with
“Promote the utilization of diverse human resources,”“Human resources development for the future,” and “Improveengagement” as courses of action to support the effort.
Among them, we believe that the answers to “Helping ourpeople shine” are concentrated in “Improve engagement.”
We will increase employee engagement and make it a driving
force for corporate transformation by making various
measures related to human resources functionsynergistically, such as recruiting, providing educational
opportunities, and reforming work styles to support our
growth strategy.

Clarification of the
management strategy

Establishment of materiality themes

Toward the Development of a Highly Effective Human
Capital Strategy
Human Capital Management and Materiality

Clarification of the
SWCC Purpose

Greetings

MorePowerful

Message from the Officer in Charge of Human Resources

1226

SWCC Group’s Value Creation Story

Message from the Officer of the Research & Development HQMore Widely

Improving Our Core Technologies to Improve
Our CompetitivenessYuichi Morishita
Fellow, In charge of Technology Planning,
R&D, and Intellectual Property Strategy

I will introduce distinctive examples of and basic strategies behind SWCC’s research and development, which is focusedon the future of not only existing markets but also unknown markets and society as a whole as we refine manufacturing
technologies and incorporate the latest digital technologies.

New Technologies × Existing Markets

Bringing Copper-silver Alloy,
One of Our Core Technologies,
to New Markets

Solving Issues Associated with
Realizing a Decarbonized Society
Using New Technologies

High-strength, high-conductivity
copper-silver alloy wire, which has aproven track record in the mobility
field for its use in seat heaters, etc., is
one of the SWCC Group’s important
core technologies. We are further
advancing our copper-silver alloy
wire technology to enter thesemiconductor market, which is a new
field for us. High-strength,
high-conductivity copper-silver alloy
wire is best suited to be used asprobe pins used during inspections ofsemiconductor devices, which keepincreasing in transistor capacity.

In order to achieve a decarbonizedsociety, the SWCC Group has beenworking on the deployment of our
superconducting cable system, which
the Group has been working on formany years, in social infrastructure.
Superconductivity is the ultimate
energy-saving technology that
achieves zero electrical resistance,
minimizing power transmission loss.
Using this superconducting systemtechnology, we are advancing thedevelopment of technologies that willcontribute to the realization of carbon
neutrality.

Copper-silver alloy structure(immediate after casting)

Copper-silver alloy wire structure
After heat
treatment
and drawing

Tensile strength (MPa)

Copper-silver
alloy from SWCC

Utilizing AVR® (Advanced Virtual
Reality), a proprietary new technologyof the SWCC Group, we aredeveloping and demonstrating
experiential content to expand into
new market areas. We are proposing
and providing content for new markets
including education, medical care, andentertainment by taking advantage ofthe characteristics of spatial sharing
using AVR® which allows users toexperience as if they were in one
space by synthesizing people at a
distance or people filmed in advancein 3D, without the need for large-scaleequipment or VR goggles.

The SWCC Group has also started an activity called “IPLandscapes: Intellectual Property” to create value based on
our core technologies. Using IP landscapes, we utilize andanalyze information contained in intellectual property such as
patents to propose business and technology strategies.
Through these IP landscapes, we can see the position of ourtechnologies from an intellectual property standpoint and use
them to gain business advantages, create new businesses,
or search for collaborative partners.

Open Innovation for New Manufacturing
In addition to creating new businesses with new technologies,
the SWCC Group is evolving its R&D approach to become
more data-driven. As part of this effort, we have established adevelopment process for high-performance copper alloy

Organizational Structure and New Strategies
Focusing on Next-generation Markets
In response to the once-in-a-century change in the mobility
market, the SWCC Group has been promoting
solutions-based businesses through the manufacture of
in-vehicle heater wires, litz wires, and coated flat squarewires for busbars for electric components designed for xEVs
(electric vehicles). Since research and development activities
were conducted separately in each business segment, thedistribution of development resources has become an issue.
However, from April 2023, development functions havebeen consolidated at the Mobilities Development Center,
accelerating the launch and sales expansion of new products
through synergies between products.

SWCC’s Core Technologies
Material technologies

Design technologies

Analysis/Evaluation
technologies

Process technologies

DX technologies

Non-ferrous metals
application technology

Electrical property
control technology

Material analysis
technology

Non-ferrous metal
processing technology(Advanced Virtual Reality)

Coating material
technology

Seismic isolation, vibration control,and isolation technologies

Structural
analysis technology

Coating/Cable
processing technology

Superconductor
technology

High frequency
evaluation technology

Casting/
Molding technology
Bonding/
Joining technology

Other typesof silver alloys

Conductivity (%IACS)

11
27

Creating Experiential Content
Using DX Technology

Terminal processing
technology
Light propagation
technology

AVR® Technology

IoT network technology(Internet of things)

Financial and Management Information

Structure with a different silver
concentration takes on a
fibrous appearance

New Technologies × New Markets

Sustainability Management

Existing Technologies × New Markets

Create and Strengthen New Businesses Using
Intellectual Property Information

SWCC Group’s Value Creation Story

Businesses that Open the Door to the Future

Headed for a new stage of growth, SWCC is engaged inresearch and development to lead business expansion into
new markets and new areas with its Vision “SWCC aims tobecome a solution-oriented manufacturer!” In addition topromoting the development of basic and fundamental
technologies that will serve as seeds leading to
next-generation technologies, new products and new
businesses, we are further strengthening common
fundamental technologies such as analysis, evaluation,and parsing technologies, which are common fundamental
technologies of the SWCC Group. In addition, we arepromoting the acquisition of intellectual property and the useof this information to make business proposals. In this way,while strengthening our in-house development system, weare strengthening our core technologies and promoting
business creation as we incorporate open innovation.

through joint development with the National Institute ofAdvanced Industrial Science and Technology (AIST). By
utilizing process informatics to find the optimal manufacturingmethod for the developed material in the shortest possible
time, we aim for efficient development by AI that does not rely
on trial and error. The goal of data-driven R&D is to increasebusiness competitiveness by increasing speed.

Greetings

Expanding into New Markets
and New Business Areas

Creating Future Value by Combining Technology and Markets

1228

SWCC Group’s Value Creation Story

Strategies and Progress by Business Segment
Future Business Outlook

Energy and Infrastructure BusinessIn this business segment, we have increased sales of cables, connection materials, and installation work based on the advantages of
SICONEX® (connectors for high-voltage power cables), our brand of strategic products, to the expanding electric power market basedon demand for renewable energy such as power grid reinforcement and offshore wind power. In order to capture demand as themarket expands under the Japanese government’s strategic plan, we will develop growth strategies from both product and humanresources. With the completion of the full lineup of SICONEX® products with voltage capacities ranging from 66 kV to 275 kV, we will
finally proceed with the development of products capable of supporting extra-high voltages. In regard to human resources, we will
strategically secure construction personnel as future construction capacity shortages are expected to become a bottleneck forbusiness growth due to the declining workforce in the cable connection construction sector. Taking into account the growing demand
for renewal of aging thermal power plants and the expected construction of substations in the onshore interconnected sections oflarge-scale offshore wind power generation, we will shift our in-house construction staff from performing 66/77 kV range work to thehigher value-added extra-high voltage construction field. We will continue to leverage the competitive advantage of our products andservices to steadily supplement demand in the expanding electric power market and aim to expand our business performance.

We support social infrastructure by providing a wide variety of electric power
infrastructure solutions that connect power plants to homes as well as products andservices that protect lives and infrastructure from disasters such as earthquakes and fires.
The Energy and Infrastructure Business Segment comprises three businesses. The first is the electric power infrastructurebusiness, which provides total solutions for electric power infrastructure system networks connecting power plants to homes,
including cables and equipment as well as their installation and maintenance. The second is the construction wire business,
which provides general-purpose electric cables essential for electrical wiring inside buildings and fire cables to supply power
to disaster prevention equipment in the event of a fire. The third is the seismic isolation and vibration control business, which
provides products necessary to ensure the safety of people and minimize damage to buildings and infrastructure networks incritical facilities such as high-rise buildings, hospitals, and distribution warehouses in the event of an earthquake.

Managing Executive Officer and Chief of Energy and Infrastructure Business Segment

Yukio Kawase

Progress of growth businesses■Mid-Term Management Plan (FY2022 to FY2026)

SICOPLUS® strategy (electric power infrastructure business)

Seismic
isolation/other
Disasterprevention

Seismic isolation equipment, etc.

A de facto standardization strategy that takes advantage of product superiority
SICONEX , our strategic product, boasts a market share of more than 70% (as of FY2022) in the substation and private sectors due toits product advantages such as its lightweight, compact design, ability to shorten construction time, and simple joint design. In February
2023, a plug-in type extra-high voltage 275 kV smart aerial terminal connection was put into practical use and a full product lineup
supporting voltages from 66kV to the extra-high voltage of 275 kV was completed. We will continue to leverage the superiority of the
products, to make them the de facto standard in the substation market, and thereby expand our market share.
[Plug-in structure]

Voltage: 275 kV

Voltage: 154 - 66 kV

Currently being usedin the market

Smart aerial
commercializationin 2022

Aerialwire

From 2016: 154 kV DM aerial

From 2019:
Smart gas/oil

From 2000: Smart terminal

SwitchFrom the 1990s: Type T terminatorType T terminatorSmartterminal
Switch

cable

Smart
terminal

cable

cable

cable

Aerialwire

Plug-in type extra-high voltage 275 kV
smart aerial terminal connectors

Efforts to secure orders through a partner strategy for construction companies based on local production for local
consumption

Self-operated
wire

Distributed system
Smart city

Our
construction
personnel

Career Cultivation & Solution
Center for Field Installation

Wind
power
generation Storage
battery

Electric
vehicleNetwork power transmission system
Aerial/underground wires

Self-operated
wire
Large wind farm/offshore wind power

Large-demand customer

Introducing education program to increase installation personnel

Alliance with Exeo Group, Inc.

Invested capital turnover ratio
FY2026 targets
Invested capital -10%(compared with FY2022)

Effects of DX adoption

Inventory turnover period

Inventory turnover period(Manufacturing Department)

Cost reduction(profit contribution)

Trade notes and accounts receivable
turnover period (Sales Department)

CCC

Mid-Term Management Plan Rolling Points
With regard to the impact of the national policy (theJapanese government's renewable energy transmission
network development plan: Investment of around 6 to
7 trillion yen) on the electric power infrastructure business,
which was not announced at the time of the formulation of
the current mid-term management plan announced in
2021, we believe it is necessary to review the matter witha view to the upside in the future because demand for
SICONEX®, our strategic product, is expected to increase.

2020

2021

2022

FY2021
performance

FY2022
performance

FY2026target45 days

42 days

36 daysー

0.5 billion yen 1.0 billion yen

85 days2023

Period of the mid-term management plan(estimated at the time of plan formulation)

Power market CAGR: 5–10%
Company net sales CAGR: Target of 12%2024

82 days2025

2026

72 days
to 2030

Addition

Power plant renovation and expansion

AdditionTransmission and substation network maintenance, revenue cap

Rolling

Large-scale offshore wind power investment

Rolling

Interconnection of large-scale renewable energy power systems

Renovation of aged equipment
Stabilization of renewable energy systems

Future business environment outlook—Tailwinds and headwinds

Partnercompanies

Electricity distribution system

Smart house

29

Construction
companies
nationwide

electric power construction projects

ROIC
FY2026 targets
ROIC 8%(+4.4% comparedwith FY2022)

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

Main KPIs
Gross margin by product type
(Manufacturing Department)
Warehousing/transportation expense ratio(Administration Department）

66/77 kV

Homeelectricity
generation

Number oforders that it
is possible
to receive

Large plant

Large solar
power station

Solar power
generation

ROIC target and main KPIs for the coating wire businessSpecial voltages

Biomass
electricity
generation

population and low birthrate• Increased business opportunities in area ofconnection of renewable energy systems●Investment in expansion: 4.8 billion yen●Investment in renovation: 4.2 billion yen

154 kV

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

Thermal power station

Electric power cables, construction,equipment parts, and maintenance

275 kV

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

60 Hz

General-purpose wires • Future decline in construction demand due to aging

Cumulative capital expenditure total

Extra high-voltage

In the power market, which is expected to keep growing in the future due to various national policies, we are executing a strategy designed tosecure installation personnel.
At the Career Cultivation & Solution Center for Field Installation located in the Sagamihara Plant, by introducing our proprietary education
curriculum using DX educational materials such as AVR® and through actual practice in a simulated cable tunnel, instead of the on-the-job
training programs that predominated in the past, we can train skilled installation personnel in a short period of time, providing them with basic
knowledge and skills. We have secured personnel from all over Japan who have studied at the center as electric power construction partners.
The network of local production for local consumption construction company partners is already expanding from Hokkaido to Okinawa,
enabling us to secure orders without bottlenecks in our construction workforce with an eye on the “2024 problem.”
SICOPLUS® Collaborative partnerships forFrequency converter station
50 Hz

Market outlook

Electric power infrastructure

Ratio of profit to net sales

Product Features 1. Implementation of products pre-assembly at the factory (this shortens the construction period (construction shortened by about 30%) and improves reliability)
2. Implementation of plug-in type system for power cable connections (results in labor saving and simplification of construction work)

Hydroelectric power station

billion yen

Efforts to improve profitability of construction-related business (Showa Furukawa Cable Co., Ltd. coated wire business)
In the construction-related business, which accounts for approximately 40% of Group sales, we will further improve business efficiency
through ROIC management. In FY2022, business improvement activities such as the introduction of DX with ROIC as an indicator
contributed to a significant improvement in profit margin. We will continue to promote this initiative to further develop business.

DM aerial
terminalSmartterminal

8.0

Initiatives to Achieve Mid-Term Management Plan Targets
Cables areplugged in

From 2004: 66 kV DM aerial

Transformer
Smartterminal

Power
lines

billion yen

National Policy andExpansion of Net Sales

Power
lines

97.9

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

63％

Operating income

Decarbonization®

Completion of full product lineup

31％

Growth drivers

FY2026 targets
Net sales

SWCC Group’s Value Creation Story

With the SICONEX® connector for environmentally friendly high-voltage power cables using innovative insulation technology at its core,
we will capture vigorous demand in the electric power market backed by the national strategy through the SICOPLUS® strategy, whichadds sustainable human resource development programs.

6％

Tailwinds

Timing of profit contribution from tailwinds･ Implementation of plans to replace aging thermal power plants through the introduction of a revenue cap system･ Announcement of a plan for the development of a wide-area power transmission network (expansion of renewable energy)･ Continued demand for power infrastructure strengthening as a disaster countermeasure･ Demand for replacement of aging thermal power plants will increase from FY2025. We expect to receive project orders gradually from 2024
･ Profit contribution related to large-scale offshore wind power is expected to start in FY2026･ Demand for power infrastructure strengthening as a disaster countermeasure has already started contributing to profits. Long-term demand is expected to continue

Headwind events

Responses to headwind events･ Soaring energy and transportation costs･ Shortage of construction workers (declining birthrate and aging
population, the “2024 problem,” etc.)

・Continued efforts to revise sales prices and reduce costs
・Develop strategy for the cable connection work system SICOPLUS® that adds efficiency,
labor-saving, and sustainable personnel training programs to connection technology

Construction personnel training using AVR®

30

SWCC Group’s Value Creation Story

Strategies and Progress by Business Segment
Future Business Outlook

Electrical Equipment and Components Business

By expanding our line-up of highly competitive products and investing in boosting output, the Electrical
Equipment and Components Business will continue along the path of expanding earnings in tandemwith advances not only in automobiles, but also in various CASE (connected, autonomous, shared,
electric) mobility technologies. Heading toward FY2026, the final year of the mid-term management
plan, we will shift to a business model that offers a higher level of processing quality and higher profit
margins by utilizing the brand power of MiDIP®, a high-performance oxygen-free copper. At the sametime, we will actively expand into new markets that have high growth potential.
Specifically, this segment will develop products including composite conductor products for the
air mobility market and probe pins for the semiconductor testing equipment market to build a highvalue-added and highly profitable business model looking at new markets and new business areas.
We will also promote production innovation projects to support new business models. The segment
will prepare for the automation of its manufacturing processes aiming to start automation in FY2026.

The Electrical Equipment and Components Business is contributing to theaccelerating shift to xEVs in order to help realize a decarbonized society
through the manufacture and sale of high-performance products for eco-cars.
This business segment comprises three businesses: the high-performance product oxygen-free copper businessfeaturing MiDIP®, which is manufactured using Japan’s only “dip forming system,” highly conductive, and resistant tohydrogen embrittlement; the other high-performance products business, which provides heater wires made from copper
alloy and superfine flat wires for electronic components and is moving forward with efforts to improve production
efficiency and increase manufacturing capacity through integrated production at the Sendai Plant; and thegeneral-purpose products business, which supplies products for heavy electric machinery and industrial equipment.

Progress of growth businesses

Managing Executive Officer and Chief of Electrical Equipment
and Components Business Segment

In-vehicle product line-up that contribute to the accelerating shift to EVs■ Targets for final year of mid-term management plan
(FY2022 to FY2026)

High-performance oxygen-free copper MiDIPxEV proliferation®

Fine flat magnet wires
The automotive 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 thein-vehicle market, we will expand sales of magnet wires for reactors by introducing
revolutionary furnaces that deliver high thermal efficiency and are 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.

Lifestyleinfrastructure

Significant cut
in energy usage

CO2 emissions
reduction

31

MiDIP®

Oxygen-freecopperTough-pitch
copperOxygen content

◎

○

△

Conductivity

◎

○

○

Ease of processing(bendability, fine wires)

◎

○

△

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
and performance

What SWCC can do ...
Manufacture of copper-silver alloy wires that are fine,strong, and offer excellent conductivity thanks to
know-how accumulated from research on metals(No. of times) Strength comparison with pure copper Bare wire (φ0.1 mm) was used
1,000

70 times

500
100
0

16％

Market outlook

Cumulative capital expenditure total

Oxygen-free copper(MiDIP®)・ Accelerated shift to eco-cars (xEVs) and risingdemand for high-performance magnet wires
・ Increasing needs for products that are highly
effective for reducing CO2 emissions

Initiatives to Achieve Mid-Term Management Plan Targets

Copper alloy wires (heater wires)

Number of bends before
the wire breaks

What SWCC can do ...

billion yen

Pure copper

Demand is expected to increase for oxygen-free copper andflat magnet wires for vehicles with the recovery of xEV demand
expected from FY2024 onward.
Using ROIC as an indicator, we will shift our portfolio to
products for high value-added mobility and electronic
components to enhance our lineup of products that provide us
with a significant competitive advantage, and will also establish
a high-speed, high-quality production line that is effective in
reducing CO2 emissions to strengthen our manufacturing
capabilities and realize the creation of efficient manufacturing
processes.
Mid-Term Management Plan Rolling Points
Based on the xEV market forecast reports and customer
forecasts, we expect a rapid recovery in demand fromFY2025 onwards. Utilizing the brand power of MiDIP®, ahigh-performance wire material, we aim to shift to a businessmodel that offers a higher level of processing quality and higher
profit margins. We also plan to enter the semiconductor testing
equipment market and the mobility market, including the air
mobility market, and increase our business performance by
expanding the number of our sales partners and productlineup.
Future business environment outlook

ROIC

Main drivers of improvement
Expand sales of high-value-added products
GVA rate(for automotive applications)(technology and sales departments)

Net sales
Operatingincome margin

Price pass-through through the introductionof the fuel surcharge system(business planning and sales departments)
Fixed
manufacturing
cost percentage
Invested capitalturnover ratio

Review production system in response to demandfor xEVs and introduce high-efficiency equipment(manufacturing and production engineering departments)

Trade notes andaccounts receivable
turnover period

Review customer payment terms(sales departments)

Inventory
turnover period

Adjust inventory in accordance withproduct shipment volumes (business planningand manufacturing departments)

Shipment volume by high-performance product (base of 100% (pre-COVID-19))
Rapid recovery
periodDeclaration of State of Emergency
Outbreak and spread of COVID-19

Motors, inverters, transformers, etc.
Requirement of broad line-up of
high-performance.products
What SWCC can do ...
Manufacture of flat magnet wires that
employ MiDIP® to deliver high output,
voltage resistance, and heat resistance

Drive motors
Requirement of slimline,
highly efficient materials areto make vehicles lighter

2.6

53％

・ Expansion sales of high-performance products
for vehicles by reinforcing production structureHigh-performance
product oxygen-free ・ Strengthening of production structure for magnet
copperwires for electronic components
・ Strengthening of efforts toward CO2 emissions reduction● Investment in expansion: 3.4 billion yen ● Investment in renovation: 3.2 billion yen

Uses and characteristics of high-performance products in the xEV field
High-performance magnet wires (flat magnet wires)

Operating income

xEV
proliferation
Copper alloys

billion yen

Growth drivers

xEV
proliferation

FY2026 targets
Net sales

61.4

Other high-performance
products

Copper-silver alloy wires
High-performanceoxygen-free copper MiDIP®

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 asheater 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.

Oxygen-free copper (MiDIP®)

31％

General-purpose magnet wires

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

Copper-silver alloy wires

General-purpose
products

SWCC Group’s Value Creation Story

Environmentally-friendly vehicles are powered by motors instead of engines, but to reduceenergy consumption and extend the distance that can be traveled on a single charge,
lightweight, high-output motors and materials are required. High-performance oxygen-freecopper MiDIP® is manufactured using Japan’s only “dip forming system,” and is a high-grade
oxygen-free copper wire with copper purity of 99.99% or higher and oxygen content of lessthan 10 ppm. It is highly conductive and resistant to hydrogen embrittlement and therefore
used as a material for magnet wires in motors.

Takashi Yamamura

300％
250％
200％
150％

10 times

1000％

2 times
1.5 times

800％
600％
400％

1.5 times

200％

100％
0％
−200％

50％
0％

FY
2019

FY
2020

In-vehicle magnet
wires (left axis)

FY
2021

FY
2022

MiDIP®
(left axis)

FY
2023

FY
2024

Heater wire(left axis)

FY
2025

FY
2026

−400％

High-performancemagnet wires (right axis)—Tailwinds and headwinds

Tailwinds

Timing of profit contribution from tailwinds

・Increase in magnet wire usage and business opportunities due to the accelerated shift to xEVs
・Promotion of the electrification of non-automotive mobility products
・Expansion of the semiconductor product market due to the proliferation of
CASE (connected, autonomous, shared, electric) mobility technologies

・Growing demand for high-performance magnet wires in Europe. Investment to increase production capacity to start in FY2023
・Sales of high-performance magnet wires in the mobility market, including the air mobility market, are expected to expand in FY2026
・Entry into the semiconductor market with our probe pin products to start in FY2023. We plan to launch these products in Taiwan
and Europe

Headwind events

Responses to headwind events

・Further soaring material prices (copper and resin)
・The rise of Chinese car manufacturers in the Japanese market

・Expansion of the surcharge system for electricity and varnish costs
・Promotion of expansion to OEMs in Japan・Application of new technologies to other fields▶Mobility fields such as air mobility ▶Expand into the semiconductor and robotics fields

Copper-silver alloy

32

SWCC Group’s Value Creation Story

Strategies and Progress by Business Segment
Future Business Outlook

Communication and Industrial Devices BusinessIn this business segment, all departments, such as the cable, wire harness, and roller departments,
operate globally. We recognize that the role of this business segment is to firmly establish the SWCC
brand around the world.
Until now, we have grown by providing high-quality products to Japanese manufacturers withbases mainly in China and Vietnam as a proposal-oriented and response-oriented business thatsolves customers’ problems through products. However, in the future, in addition to retaining
existing customers, we aim to further expand our business performance by developing a broader
market, such as industrial equipment and automotive applications, while building partnerships withlocal companies as a manufacturer with a “demand-optimized quality system” that enables flexible
production systems, processes, and designs to meet diverse market and customer needs.

SWCC is supporting the era of high-speed, high-capacity communications with a variety ofdevice-based solutions. We will leverage our wealth of technologies and experience to promote
higher quality and higher added value to support the evolution of a connected society.
The Communication and Industrial Devices Business segment consists of three businesses: thecommunication cable business, which supplies fiber-optic cables for long-distance communicationand LAN cables for short-distance communication; the wire harness business, which produces thewire harnesses and electric wires used for the internal wiring of household appliances; and theprecision device business, which provides roller products that are fitted inside copiers and printers.

Progress of growth businesses

Managing Executive Officer and Chief of Communication
and Industrial Devices Business Segment

Yoshinao Kodama

Full-scale deployment of FLANTEC LAN cables for in-vehicle use®

■Mid-Term Management Plan (FY2022 to FY2026)

Connected/Autonomous Driving

Wire harnesses

Officenetwork

IoT/M2M
network

Wire harness businessWe have established a three-base structure with two bases in China and one in Vietnam backed by a demand for geopolitical risk
diversification. With a production method that realizes high efficiency and labor saving through automation and a high local procurement
rate built in response to the COVID-19 pandemic, we will focus not only on home appliances but also on the markets for industrial
equipment and automobiles, which are expected to expand in the future.

Structural reforms to date
1. Diversification of production bases
2. Promotion of local procurement andlocal production for local consumption(Jiaxing and Dongguan FY2022 local
procurement rate: 74%)

New plant launched operations in January 2022

China

Vietnam

DongguanHung Yen
Vietnam

33

Jiaxing

DONGGUAN SHOWA INTERCONNECT
PRODUCTS CO., LTD.

High efficiency and labor saving are
realized through automation
Plant expansion/relocationin April 2023

SWCC SHOWA VIETNAM INTERCONNECT
PRODUCTS CO., LTD.

Communication cables

42％

4.5

billion yen

Market outlook

Cumulative capital expenditure total• 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

LAN cable●Investment in expansion: 2.4 billion yen●Investment in renovation: 1.4 billion yen

Initiatives to Achieve Mid-Term Management Plan Targets

FLANTEC is a brand name comprised of “F” (meaning “First,” “Fast,” “Future,” and“Fuji”), “LAN”, and “TEC” (meaning “technology”).

JIAXING SHOWA INTERCONNECT
PRODUCTS CO., LTD.

42％

Comfortenhancement

For home appliances,industrial devices, etc.

Data center
networkbillion yen

Operating income

Copier rollers, etc.

®

China

42.8

• Tap new markets through development ofhigh-speed communication cables• Expand overseas production by launchinga new structure for the wire harness business• Accelerate local production and consumption throughrestructuring of the precision device business

5G IoT

Total
floor area:
Approximately
Reduced electricity
35,000 m2
costs and CO2
emissions byintroducing
photovoltaic power
generation

Total
floor area:
Approximately
5,700 m2

In the communication cable business, we will take advantageof the efficient production system resulting from thereorganization of domestic bases in fiscal 2022 to develop new
products and establish a system for proper inventory
management in response to market demand.
In the optical cable business, we aim to secure a high GVA
ratio by expanding sales of rollable ribbon cables with unique
technologies in overseas markets where the FTTx market is
expected to expand.

ROIC

Invested capitalturnover ratio

Mid-Term Management Plan Rolling Points

Fixed manufacturing
cost percentage

Clarify the concept of the manufacturing base to
reduce material and transportation costs(Manufacturing Department and Material Department)

Inventory
turnover period

Reduce number of inventory turnover months
and lead times(Sales Department and Manufacturing Department)

Fixed asset
turnover ratio

Improve production efficiency by consolidating
manufacturing facilities as a result of restructuring(Manufacturing Department and Production Engineering Department)

Change in the ratio of production bases before andafter structural reforms

Taking advantage of the structural reforms we have undertaken
to date which are “Diversification of production bases,”“Promotion of local procurement and local production for local
consumption,” and utilization of a “production method thatrealizes high efficiency and labor saving through automation,”
we will enter the local market for wire harnesses for home
appliances as well as the industrial equipment and vehicle
markets, which are expected to expand in the future, with theaim of expanding our business performance.

Future business environment outlook

Main drivers of improvement
Promote high value-added product sales
GVA rate(Cat.6A, e−Ribbon®, etc.)(Sales Department and Technology Department)

Operatingincome margin

China

JiaxingJIAXING SHOWA INTERCONNECT
PRODUCTS CO., LTD.

Vietnam Dongguan

VietnamVietnam

FY
2019

Hung Yen

China…CameraFY2026 targets
Net sales

Workstyle
improvement

Japan

Tailwinds
In 2021, Ministry of Land, Infrastructure, Transport and Tourism
announces that it will be mandatory install rear-view cameras,
etc. to confirm the immediate rearward position of the vehicle
when backing up

Mobility

Growth drivers

16％

Precision devices

SWCC Group’s Value Creation Story

In 2021, the SWCC Group’s LAN cable business was integrated
into the new brand FLANTEC®, and full-scale deployment of LAN
cables for in-vehicle use will start in FY2023.
In addition to the office network market, which we have beenoffering services in with advanced technology, this brand aims todevelop its business into new markets such as industrial networks
in the expanding FA field and high-speed transmission forautomobiles. In fiscal 2023, we will begin sales of FLANTEC® LAN
cables for in-vehicle use, and in line with the expansion of the
ADAS market, we will develop high-speed Ethernet technologies
including high-precision cameras that realize autonomous driving
at level 4 or higher.

DONGGUAN SHOWA INTERCONNECT
PRODUCTS CO., LTD.
Net sales performance
SWCC SHOWA VIETNAM
INTERCONNECT
billion yen
PRODUCTS CO., LTD.

9.2

FY2026China

Net sales target

18.0 billion yen—Tailwinds and headwinds

Tailwinds

Timing of profit contribution from tailwinds

・ Increase in communication capacity due to promoting the use of AI and IoT・ Increase in opportunities to enter new markets, such as the in-vehicle market
・ Demand for high-performance home appliances is increasing due to theadvancement of the social environment and living standards

・ As communication capacity increases in educational settings and offices, there is a
growing demand to replace LAN cables with LAN cables that support faster datatransmission speeds. Demand is expected to continue.
Inquiries
from local automotive manufacturers are increasing. We expect this to contribute・
to our business performance during the period of the mid-term management plan.
・ In addition to increasing the functionality of general home appliances, demand forhigh-performance products such as ENE-FARM fuel cells is expected to contributeto earnings during the period of the mid-term management plan.

Headwind events

Responses to headwind events・ Cost impact caused by supply chains in underdeveloped emerging countries (materials and logistics)
・ Rise of local wire harness manufacturers (increase of business expansion through technological improvements)
・ Economic slowdown in China

・ Promote operational efficiency by unifying production management and quality assurance systems that differ from country to country
・ Shift the business model from providing “high quality only” to a “demand-optimized quality system.”・ Improve the local procurement rate of materials through collaboration with customers

34

SWCC Group’s Value Creation Story

Expanding Business Domains

Cloud ID Management Service to Help Promote DX

Pushing DX Promotion within the SWCC Group Forward

DX Promotion/Axio Corporation

Digital Innovation Promotion Office
To cope with the declining workforce and to institute workstyle reform, the SWCC Groupis moving forward with efforts to lighten workloads and improve productivity byautomating operations and saving labor through the digitalization of each value chain.
Regarding DX, the Digital Innovation Promotion Office, which reports directly to the
President, provides internal consulting services as the overall department in charge, andworks with the DX leader in each section, such as manufacturing, procurement, logistics,
and sales, to implement DX for the Group as a whole. As for “Innovating new ideas today. Becoming the norms of tomorrow,”which is part of the SWCC Purpose, we believe that DX promotion is a low-cost and efficient way to achieve our goals for change.
In order to achieve this change, we will adhere to our decentralization strategy* and maximize DX value by utilizing information andtechnology obtained from IT and DT while adjusting the balance between top-down and bottom-up strategies.
Stories of our success in the area of DX will not be confined to the SWCC Group but will be shared externally. Expanding into
other industries will lead to new businesses for the Group.
* Decentralization strategy: A strategy that decentralizes authority and decision-making within an organization from a centralized form.

IT promotion

DT promotion

DX promotion

Policy (Strategy)

Policy (Strategy)

Policy (Strategy)

Aiming to eliminate the digital divide andincrease literacy, we contribute to thediscovery and education of humanresources while promoting the transition
to next-generation IT tools.

We will expand the application of digitaltechnology by visualizing managementthat incorporates data analysis, andimprove the value created by digital
innovation.

We will clarify the definition of DX anduse specific examples to transformbusiness styles, organizational work
styles, and individual career styles
through the power of digital innovation.

Plan/Future Action

Plan/Future Action

Plan/Future Action

We will shift from a theme-driven
promotion method to a people-driven
promotion method, aiming tocontinuously increase the number of IT
promotion collaborators, and implement
measures to promote the spread of themethod with the goal of increasing thenumber of collaborators by 1.5 times fromthe current level to 180 by March 2024.

By performing advanced analysis of data
accumulated by various digital tools andpresenting the necessary information to
the people who need it when they need it,
we will promote the optimization of the
behavior of companies, organizations, andindividuals.

We will demonstrate both internally andexternally successful examples of how
we can do things that we previously
considered to be impossible and raise
the level of DX promotion from point toline, line to plane, and plane to body.

and reviews of account and authority management, andconsider cybersecurity measures. Automating ID management
and fundamentally reviewing operational management for the
ever-increasing number of cloud services is an urgent issue forthe relevant departments to promote DX.
To help solve these issues, Axio Corporation offers Keyspider,a cloud ID management service. Axio Corporation, which has
long had a division specializing in ID management anddeveloping systems for integrated authentication platforms, isshifting its business model from contract development to aservice business that provides cloud services. In order to sharethe challenges of using cloud services and to let people know
about the various services we offer, we will actively participate
in real-world exhibitions this year. Believing that the shift fromproducts to services, experience, understanding, and empathy
are important, we will raise awareness of our services andcommunicate the benefits of introducing the services bycommunicating with visitors at exhibition venues.

*1 Information-technology Promotion Agency, Japan DX White Paper https://www.ipa.go.jp/publish/wp-dx/index.html (in Japanese only)*2 SaaS: Abbreviation for Software as a Service. A service that allows software in the cloud to be used over the Internet

Axio Corporation Exhibit at Japan IT Week Spring 2023
At the Axio booth, staff provided visitors withinformation on various ID management services,primarily on Keyspider

SWCC Group’s Value Creation Story

Policies, Plans, and Future Actions of the Digital Innovation Promotion Office

The Information-technology Promotion Agency, Japan (IPA)
regularly publishes the DX Whitepaper*1, which summarizes theefforts of Japanese companies that are promoting DX.
According to “DX Whitepaper 2023”,the latest version of the
publication, promoting DX requires the development of IT
systems that can quickly respond to changes in the businessenvironment, strengthening competitive domains by linking
internal and external systems, and data utilization and analysis
that meet business needs. The development of IT systems
required for the promotion of DX, especially cloud services,
also referred to as SaaS*2, are now being introduced for various
applications in many companies due to the advantages they
provide such as immediate availability and low initial cost.
At the same time, system administration departments withincompanies are faced with increasingly complicatedmaintenance tasks such as the creation, addition, modification,and deletion of user ID accounts, resulting in a marked
increase in operation-related burdens. In addition, from theperspective of information security, we must ensure theconfidentiality, integrity, and availability of data, implement rules

Please visit the web address below for details
about the exhibition.
https://www.axio.co.jp/colum/2023/230424.html

Progress by DX promotion theme
Department

Description

State of progress

1

Forecast of shipments
and inventories ofgeneral-purpose wires

Theme

Production
management
departments

Analysis of the shipment and inventory volume trends for general-purpose
electric wires and utilization of results data to automate manufacturing
process planning and visualize production and inventory planning by using AI

Currently being
implemented

2

Analysis of Kaeruya
e-commerce (EC) site
access information

Sales
departments

Analysis of access information for Kaeruya, an online commerce site forcables, for marketing research purposes

Currently being
implemented

3Internal ChatGPT(chatbot)All departments

Introduction of internal ChatGPT for work

Currently being
implemented

Manufacturing
departments

Utilizing past occupational accident data, machine learning and text mining
methods are used to predict accidents and prevent them from occurring

Currently being
implemented

Central management and visualization of data required for logistics-related
departments
Visualization of information on price trends and trends in materials such ascopper, PVC, and PE

Quality assurance
digitalization
Building of a digital
ROIC tree

Logistics
departments
Material
departments
Human resources
departments
Quality assurance
departments
Accounting
departments

Currently being
implemented
Currently being
implemented
Currently being
implemented
Currently being
implemented

Process informatics
development

Technology
departments

5

Medium term forecast
for health and safety
risks
Logistics-related
digitalization

6

Material price forecasts

7

Engagement analysis

4

8
9
10

35

Utilization of AI to analyze employee satisfaction surveys
Visualization of information such as external complaint information
Utilization of AI to collect and analyze data for building a digital ROIC tree
Utilization of AI to support and optimize development processes

In planning
In planning

VTuber Activities Serve as a New Means of Information Transmission—Expectations for young talent
Axio Corporation has established several in-house project
activities. One of these initiatives, the Corporate Value
Improvement Project, is promoting initiatives that are useful for
corporate branding and product promotion activities while
fostering a culture of taking on challenges and sharing what isfun. As part of these activities, we started VTuber *3 activities in
February 2023, mainly among young employees. VTubers use atechnology called motion capture, allowing them to moveanimated characters in real time with rich expressions by linking
them to human facial expressions. We have adopted “Shiori
Akutagawa” as the official VTuber character of Axio and utilize
this character for product PR activities at exhibitions. We aim tocreate PR activities through the use of VTuber videos andinformation dissemination via social networking services thatpeople find easy-to-understand and are familiar with.
*3 VTuber (Virtual YouTuber): A person who posts videos or live streams in theform of an animated character.

Axio Official VTuber

Product Introduction Video Featuring
VTuber “Shiori Akutagawa”
https://youtu.be/cnpwedPN2ys

36

Sustainability Management

Sustainability Promotion

Materiality (Key Issues)

Organizational Structure

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 thathave a significant impact on both the Company and stakeholders,We surveyed approximately 300 items from various international social issues such as SDGs and frameworks
related to CSR (Corporate Social Responsibility) and sustainability, and selected 40 social issues, taking into
account their relevance to the Company.

STEP

Verifyingstakeholder
expectations

STEP 1 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 recognized them as being important for the stakeholders.

STEP

Selectinghigh-priority
social issues

ReportIssues directions

Sustainability Committee
Chairperson: President and Representative Director(Group CEO)
Vice Chairperson : Officer in charge of sustainability
Secretariat: Sustainability Promotion Department

ReportSharesinformation

Issuesdirections

2

Risk Management Committee

3

STEP

4

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

Formulating
materiality,
indicators,
and KPIs

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

High-priority social issues

Field● Value our connections with local communities and the value chain in the spirit of “empathy,” “coexistence,” and● 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

Society

Environment and Society(Technology)

People

4.0
4.0

5.0

6.0

7.0

8.0

9.0

10.0

Importance for the Company

Complementary social issue items

Measures for solving issues

2

Greenhouse gas emissions

Environment

3

Sustainable consumption andproduction

Environment

Although water is essential for manufacturing, we will work to reduce water usage as we recognizethat it is a sustainable resource.

Environment

Promote resource recycling through the 3Rs for waste to reduce the final disposal (landfill) volume.

Society(Technology)
Society(Technology)

We recognize that we are expected to contribute to the environment-friendly electric power
infrastructure and the xEV field, and will work to solve these issues through the development,
manufacture, and sale of related products.

5
6Reduction of chemical substances
and waste
Creation of resilient infrastructure
and promotion of innovation
Realization of resilient andsustainable cities

7

Gender equality

Society (People)

8

Rewarding work

Society (People)

9

Human resources development

Society (People)

Based on the recognition that these are issues that should be prioritized as social issues,
we will implement the following measures.
･ In view of the current situation where there is room for improvement in the ratio of female employees and female managers in
the Group, we aim to create a comfortable working environment for all employees through diversity and inclusion initiatives.
･ Aim to create safe and rewarding work and workplaces by improving engagement and preventing occupational accidents･ Review and enhance training systems and promote human resource development
10µm

Society(Community)･ Promote activities that contribute to the local community in order to build a good relationship with the local community.
･ In order to resolve social issues, it is important to strengthen communication and relationships with partner companies.
We will work to resolve issues through our basic approach to social responsibility that we should fulfill together with our
suppliers, and through questionnaires on the Supply Chain Sustainability Promotion Guidelines, guidelines which ask fortheir understanding and support.

11 Significant impact on businessGovernance

The Company considers the enhancement and strengthening of its corporate governance system to be an importantmanagement issue and is working to further strengthen its auditing and supervisory functions, centered on the Audit
and Supervisory Committee. The involvement of independent outside directors with the Board of Directors andcommittees shall be used as an indicator for monitoring corporate management.

12 Product and service safety

GovernanceEngagement with local

10 communities

Community

Information and labeling for

13 products and services

37

5.0

We will work on the following measures in order to prevent global warming.
・Promote development, manufacture, and sale of products that contribute to the spread ofsustainable clean energy
・Conduct thorough energy conservation and introduce renewable energy sources to reduce CO2
emissions generated by the Group

Environment
Governance

6.0

GovernanceIn order to gain the trust of stakeholders, we recognize that it is essential to provide high-quality and safe products
and services. Therefore, we will focus on carrying out the following measures.
･ Reduce failure costs in order to improve quality･ Collect and analyze customer opinions through customer satisfaction surveys, and improve the problems identified

Financial and Management Information

Technology

7.0

Spread of sustainable clean energy

4“co-prosperity”

8.0

Sustainability Management● Promote the spread of clean and green energy and strive to protect the global environment

Impact on management
9.0

1

sustainable and prosperous future society.
● Provide customers with high-quality products and services through superior technology and innovation

10.0

High-scoring social issue items

Basic Policy
Through trust and innovation, the SWCC Group aims to solve social issues and improve corporate value to create a

We comprehensively evaluated the social issues from twostandpoints of the “importance for the Company” based on
the contents 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.

Importance for the stakeholders

1

SWCC Group’s Value Creation Story

Understanding,integrating, andconsolidatingsocial issues

STEP

Board of Directors

identify priority issues, and formulates specific action indicators and
KPIs for each theme. We will continue to review our key issues on aregular basis, for instance, in parallel with the formulation of the
mid-term management plan.

Greetings

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.

Based on the Group’s management philosophy, we havestrengthened our sustainability structure and established theSustainability Promotion Office in April 2022 as well as theSustainability Committee in July 2022 in order to conductsustainable corporate operations from the perspectives of theenvironment, society, the economy, etc.

38

Sustainability Management

Materiality
We grouped high-priority social issues into five items by similar field.
By contributing to the resolution of these social issues pursued by the international community, we will strive to enhance our corporate value and realize a sustainable society.

[Category] ThemeOur future

Our earth[Community]

Our partnership

Our people

Our governance

39

Reduce greenhousegases through relentlessefforts and responses

Sales ratio of products related toxEV (electric vehicles)

13%

In-house introduction rate ofrenewable energy

6%

CAGR (compound annual growth rate)of SICONEX® products

18%
compared to FY2021

Number of patent applications

70

Greenhouse gas (CO2) emissions

37% reduction(Scope 1 + Scope 2)

compared to FY2013

Target(year of achievement)(FY2026)

30% or over
(FY2025)

12% or over

(FY2022 to FY2026)

45% reduction

compared to FY2013(FY2025)80% reduction

Water usage

In order to conduct sustainable businessactivities, it is necessary to build good
relationships with local communities.
In order to resolve social issues,
it is important to strengthencommunication and relationships withpartner companies.

Value connections anddevelop alongside local
communities

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

Cooperate with the value
chain in the spirit of empathy,
coexistence and co-prosperity

Supply Chain Sustainability
Promotion Guidelines
questionnaire score

3.8 points

4.5 or higher

Recognizing that these areissues that should beprioritized as social issues,
increasing diversity andinclusion initiatives andincreasing engagement willlead to securing talented
human resources andimproving productivity, which
in turn will lead to thepromotion of transformationand growth of the Company,
and will lead to the realizationof an unprecedented growthstage.

Promote the utilization ofdiverse human resources(Diversity & Inclusion)

Ratio of female managers(section managers)

6% (2.8％)

8% (10％)

Human resources
development for the future

Average hours of training per year
per employee

1.4 times

4 times higher
compared to FY2021

We will strengthen
governance, risk
management, andcompliance in order tooperate without damaging
corporate value.
By promoting these
initiatives, we can gain thetrust of our stakeholders.

Improve engagement(create rewarding work
and workplaces)

Monitor corporate
management

Provide good-quality
and safe products
and services

compared to FY2018

20 donations/activities

compared to FY2021

compared to FY2018(FY2025)

20% reduction

compared to FY2018(FY2025)
Higher thanthe previous year

5% increase(FY2026)(FY2026)

55 or higher

Lost time injury frequency rate

0.68

0.23 or lessAttendance rate of independent
outside directors at Board of Directors
meetings and committee meetings

100%

75% or over

Failure costs due to quality

Customer satisfaction

10% reduction

Contribute to the mitigation of
global climate change bycontributing to theenvironmental response of ourown company and that of ourcustomers and business
partners.

・We will be able to develop
businesses that respond totransition risks related to climatechange.
・We can gain social credibility as
a company that is proactive inenvironmental measures.

Contributing to the realization ofsustainable communities willlead to the revitalization of local
communities.

A strong local presence will
increase awareness of the SWCC
brand and earn additional trust.

Provide continuous and equal
employment opportunities tomany individuals and increase
their willingness to work.

Increasing the value of humanresources will enable us toincrease the value of thecompany, which will stimulate
business and ensure stablecorporate activities.

We will continue to provide
value to society as a good
corporate citizen through soundmanagement.

By strengthening governance andensuring sound management, we
will be able to increase corporate
value in a stable and sustainable
manner.

(FY2026)

46

Engagement score

With its competitive advantages,
the Company is able to develop
new markets and seize new
business opportunities.

(FY2026)

Use limited water resources
effectively

9% increase

The development of key
technologies to solve social
problems will lead to a more
affluent society and improve
people’s lives.

100 or more

Final waste disposal volume

compared to FY2018

Impact on business

20% or over

Promote the recycling of all
resources with the collective
strength of the Group

75% reduction

Impact on society(FY2026)(every year)(each year)

50% reduction

compared to FY2021

compared to FY2021(FY2026)

4.2

Score higher
than theprevious year

Financial and Management Information[Governance]

Create resilient infrastructure
for the future society

FY2022 performance

Sustainability Management[People]It is important to play a rolein the supply chain and value
chain for the environment. In
addition, delays inenvironmental measures
have a significant impact on
business management, suchas the occurrence ofadditional costs andreputation risks.

Spread sustainable clean
energy through superior
technology and innovation

Indicator and KPISWCC Group’s Value Creation Story[Environment]

There are social issues thathave a significant impact on
both our company and our
stakeholders.
We will strive to enhanceboth social value andcorporate value through ourcore business.

Action policy

Greetings[Technology]

Specific reason40

Sustainability Management

Our future

Existing Technologies × New Markets
Information Utilization-Based Intellectual Property Strategy[Category] Theme[Technology]

Our future

Action policy

Spread sustainable clean energy
through superior technology
and innovation

Target (year of achievement)

Sales ratio of products related to xEV(electric vehicles)

20% or over (FY2026)

In-house introduction rate ofrenewable energy

30% or over (FY2025)

CAGR (compound annual growth rate)of SICONEX® products

12% or over
(FY2022 to FY2026)

Number of patent applications

100 or more (FY2026)

New Technologies × Existing Markets

We identify market trends and market players to serve as sales
information and identify the strengths and weaknesses of ourCompany and other companies to serve as technical information.
As patent information, we distribute the patents of other companies
with technical problems and their solutions (invention points) serving
as axes.
We plan to create a patent portfolio by combining this informationand exploring areas where the Company can gain an advantage inbusiness.

■ Promotion of Innovation
Utilizing IP landscapes leads to the creation of new businessproposals. Innovation is also promoted through the normalization of
producing new business ideas in abundance.

● Patent portfolio creation

SolutionmeasuresIssuesB
CTechnical
information

Sales
informationAa b c d e

New Technologies × New Markets
Efforts for Developing Metal Materials

SWCC completed the world’s first proof of concept of a tri-axial
superconducting cable system installed in an actual system at a
private-sector plant. In this proof of concept, the power transmission
loss was significantly reduced by taking advantage of zero electricalresistance, which is a feature of superconducting cables, and theenergy required for cooling the superconducting cables was

As social change accelerates, there is a need to accelerate the speed of metal material development in order to improve metal performance andcreate new materials.

significantly reduced by using the cool temperature of the plant,
confirming a high energy saving effect. These results were highly
evaluated by various customers, and the company received the
Excellent Business Award, one of the NEDO Energy Conservation
Technology Development Awards. In the future, we will aim for early
deployment of the technology in social infrastructure.

■ Utilization of Computational Science
By applying computational science (first-principles calculation) tomaterials design, it becomes possible to optimize alloy compositions
and heat treatment conditions in a short time, which required many
experiments in the past. We will utilize these efforts to promote rapid
development.

● Material design
inspection

Tri-axial superconducting cable system proof of concept

10µm

10 μm

SEM image of metallic materialand crystal orientation● Process informatics system

Input ofaccumulated
data

Model derived fromaccumulated data

Output of
optimalsolution

Financial and Management Information

In order to optimize manufacturing conditions for metallic materials
in a short period of time, we are working on the development ofprocess informatics, a method that optimizes the prediction of
manufacturing conditions through the use of AI. This initiative
shortens the development period that previously required a longamount of time by reviewing and reusing the data accumulated by
the Company. We are promoting the early completion of thistechnology.
Its development is being conducted jointly with the National
Institute of Advanced Industrial Science and Technology (AIST). We
are strengthening our technological advancements anddevelopment capabilities to realize more efficient and sustainableproducts by maximizing the use of computational and information
science so that we can respond quickly to customer needs.

Sustainability Management

Energy Saving Technologies and a Superconducting Cable System for a Sustainable Society■ Utilization of Information Science

41

SWCC Group’s Value Creation Story

Create resilient infrastructure
for the future society

Indicator and KPI■ Patent Portfolio Creationin which other companies have not developed technologies as wellas fields where they highly focus on technologies.
Greetings

We are thoroughly committed to the efforts that SWCC can take for helping realize a sustainable society. We will
pursue the creation of unique value that contributes to solving social issues such as decarbonization and the declining
birthrate and aging population issue by combining our core and new technologies with the needs of the market.

We utilize various types of information to create a patent portfolio inline with our business portfolio. We plan to file patent applications ina strategic manner and create a patent portfolio by visualizing fields

Receives the Excellent Business Award at the NEDO Energy Conservation Technology
Development Awards

42

Sustainability Management

Our earth■ 7th Voluntary Environmental Action Plan (FY2021 to FY2025)
We are promoting the 7th Voluntary Environmental Action Plan as along-term vision set forth in the Medium- and Long-Term
Environmental Plan “Green Plan 2050” and to serve as short-termtargets for achieving 2030 targets. The 7th Voluntary Environmental

Action Plan, which applies to all of the Group’s business locations inJapan, sets global warming prevention, effective use of resources,and effective use of water resources, as Group materiality issues.

7th Voluntary Environmental Action Plan
TargetFY2022 performance

Energy saving (CO2 reduction)

Reduce CO2 emissions (Scope 1 + Scope 2）by 45%
by FY2025, using FY2013 results as a reference.

37% reduction compared to
FY2013 results

SWCC recognizes that identifying and addressing climate change-related risks and opportunities is an importantmanagement issue. The entire Group is advancing initiatives with the goal of achieving carbon neutrality by 2050.
[Category] Theme

Action policy

Indicator and KPI[Environment]

Reduce greenhouse gases throughrelentless efforts and responses

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

45% reduction compared to FY2013(FY2025)

Promote the recycling of all resources
with the collective strength of the Group

Final waste disposal volume

80% reduction compared to FY2018(FY2025)

Water usage

20% reduction compared to FY2018(FY2025)

Our earth

Use limited water resources effectively

Target (year of achievement)

Reduction of waste discharged

Reduce the amount of waste discharged at all sites by
20%*3 by FY2025, using FY2018 results as a reference.

18% reduction compared to
FY2018 results

Promotion of recyclingof resources

Reduce the final waste disposal (landfill) volume
at major production sites by 80%*4 by FY2025,
using FY2018 results as a reference.

75% reduction compared to
FY2018 results■ Declaration of Support for the TCFD Recommendations and Information Disclosure
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
and opportunities in line with the TCFD recommendations.
Details are available on our website.

Reduction of water usage

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

9% increase compared to
FY2018 results■ Medium- and Long-Term Environmental Plan “Green Plan 2050”
the Medium- and Long-term Environmental Plan “Green Plan 2050”
based on the concept of achieving carbon neutrality by 2050,
established a long-term vision, and set 2030 targets.

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

Target for FY2030

Long-term vision (2050)
・Realize products that do not emit CO2/carbon neutral products
・Create products that resolve environmental issues

Effective use of resources

Reduce final waste disposal volume by 85%*1 comparedto the baseline year (FY2018) results

・Promotion of sustainable use of resources
・Achievement of zero final disposal (landfill) volume

Reduce water consumption by 50% compared tothe baseline year (FY2018) results

・Promotion of sustainable use of water resources*1: The target has been raised as the initial target of 50% has already been achieved▶Specific measures to achieve CO2 emission
reduction targets and carbon neutrality
・Further promotion of energy-saving(upgrading equipment, reviewing manufacturingmethods through technology conversion,and applying capital expenditure standards thattake CO2 emissions into account)・In-house energy creation (introduction of solar power
generation)
・Procurement of non-fossil energy (gas and electricity)
・CO2 emissions trading (compensating for shortages)

43

CO2 emissions

45%

50%

reduction

reduction

Efforts suchas energysavingEfforts suchas energysavingRealizationof carbon
neutrality

EnergysavingRenewableenergy*2
CO2 emissions trading

FY2013 (baseline year)

FY2025

FY2030

Reduce greenhouse gases through relentless efforts and responses

FY2050Application of capital
expenditure standards
that take CO2 emissions
into accountOffsetting increased
production volume by
improving production
efficiency*2: Includes in-house energy
creation (solar power
generation, etc.) andprocurement of non-fossil
energyThe amount of CO2 emissions at our main manufacturing bases inJapan decreased by 37% compared to FY2013 results. Energy
consumption per unit decreased due to business restructuring,
renewable energy adoption, and the deepening of energy
conservation, but emissions were on par with FY2021 due to anincrease in production volume. Since the same production volume
increase factor is also expected in FY2023, we have set a reduction
target of 37%, the same as the FY2022 target. We will work tofurther introduce high-efficiency equipment and renewable energy
as measures to achieve our targets.
●In-house introduction rate of renewable energy
In FY2022, the renewable energy introduction rate of renewableenergy was 6% partly due to solar power generation at the Aichi
Factory. In FY2023, we will continue to plan the introduction of solar
power at other sites and consider the procurement of non-fossil
energy.
●FY2022 CO2 Emissions (Scope 3)CO₂ emissions in the supply chain in FY2022 are as follows. Since
the largest amount of emissions are associated with the purchase ofmaterials, we are working to reduce material-derived emissions withthe understanding and cooperation of our suppliers.

CO2 emissions(1,000 t-CO2)

GHG Protocol Scopes for Calculation

8.8

Scope 1 (fuel use)*5

40.5

Scope 2 (electricity use)*5

Scope 3478.3

Category 1

Purchased goods and services

Category 2

Capital goods

Category 3

Fuel and energy-related activities notincluded in Scope 1 and Scope 2

9.7

Category 4

Upstream transportation and distribution

4.1

Category 5

Waste generated in operations

1.8

Category 6

Business travel

0.8

Category 7

Employer commuting

0.9

Category 9

Downstream transportation and distribution

15.4

0.1
21.8

Category 12 End-of-life treatment of sold products*5: All bases in Japan

CO2 emissions(1,000 t-CO2)■Scope 1 (fuel use)
■Scope 2 (electricity use)
■Scope 3 Category 1■Scope 3 Category 2■Scope 3 Category 3■Scope 3 Category 4■Scope 3 Category 5■Scope 3 Category 6■Scope 3 Category 7■Scope 3 Category 9■Scope 3 Category 12

Promote the recycling of all resources with the collective strength of the GroupThe final waste disposal (landfill) volume in FY2022 was reduced by
75% compared to the FY2018 results, achieving the FY2025 target(50% reduction). In FY2022,although business restructuring and theincrease in activity volume had an impact, the thermal recycling andmaterial recycling of waste plastic progressed significantly, whichwere factors in the significant progress in resource recycling.

In FY2023, production volume is expected to increase further,creating a concern about increased waste volume. However, since
we achieved the target for FY2025, we set a new target for FY2023
for an 80% reduction compared to FY2018.

Use limited water resources effectively
The amount of water used in fiscal 2022 increased by 9%compared to FY2018 results. The increase was caused by higher
production volumes and increased use of cooling water during
manufacturing due to the extremely hot summer. In contrast, theimproved accuracy of the water consumption survey that has been
conducted since FY2021 has enabled us to identify areas of leakage

and unnecessary water use, which has led to the study of effective
measures to reduce water consumption.
Although production volume is expected to increase further in
FY2023, we will reduce the amount of water used by promoting thecirculation of factory cooling water.

Financial and Management Information

Global warming prevention

Reduce CO2 emissions by 50% compared to thebaseline year (FY2013) results (Scope 1＋Scope 2)

Effective use of water
resources*3: The target has been raised as the initial target of 5% has already been achieved

Sustainability Management

https://www.swcc.co.jp/jpn/news/detail/2022/news_4023.html

We are working to solve social issues through business andenvironmental activities that give higher consideration to ESG and
Sustainable Development Goals (SDGs). In FY2020, we formulated

Effective use of water
resources

SWCC Group’s Value Creation Story

Group to protect the environment. The Environmental Philosophy,
Basic Policy, FY2023 Priority Topics for Environmental Activities,
and organization structure are posted on our website.

https://www.swcc.co.jp/jpn/sustainability/esg/environment/management.html

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 torevenue opportunities. Based on the recognition that identifying andaddressing these climate change-related risks and opportunities is an

Effective use of resources●FY2022 CO2 Emissions (Scope 1 + Scope 2)

Efforts to Conserve the Environment (Environmental Management)
Through trust and innovation, the SWCC Group aims to solve social
issues and improve corporate value to create a sustainable andprosperous future society. Based on this basic policy, we haveestablished an annual environmental policy and are working as a

Global warming prevention

Greetings

Category

Environmental goal44

Sustainability Management

Supplier Relations (Supply Chain)■ Basic Policy● SWCC Group Procurement Policy

The SWCC Group has formulated the SWCC Group Procurement
Policy and endeavors to establish a good cooperative relationshipwith suppliers to provide a stable supply of value-added products.

Target (year of achievement)■ Conducting Sustainability Questionnaire Surveys

Value connections and develop
alongside local communities

Higher thanthe previous year
5% increase[Community]

Based on societal demand, the SWCC put together the basic ideaof social responsibility that should be fulfilled together with suppliers
and our requests as the Supply Chain Sustainability Promotion
Guidelines.
The SWCC Group conducts a questionnaire survey on major
suppliers regarding the status of their Sustainability initiatives. As of
FY2022, 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, theenvironment, fair corporate activities, quality and safety, information
security, supply chain, and coexistence with local communities, isevaluated on a 3-point scale of 1 point, 3 points, and 5 points.
When analyzing results by category, “Quality and safety” scoredhighest, with many suppliers receiving perfect scores. However, justas in last year’s survey, challenges remain in “Corporate governancerelated to CSR,” “Human rights,” and “Coexistence with local
communities.” Next, we will examine the results of the survey inmore detail, and then give feedbacks to suppliers on the results andconduct interviews with them to gain a more precise understandingof their circumstances. Especially with those suppliers with B and C
grades, we will provide support for improvement, and have themestablish a PDCA cycle, and thereby instill our sustainability
procurement policy and improve their level in cooperation with suchsuppliers. The SWCC Group will continue conducting thesustainability survey and engaging in efforts to build a sustainablesupply chain, which includes addressing the above mentioned
challenges.

Our partnership

Cooperate with the value chain
in the spirit of empathy,
coexistence and co-prosperity

Supply Chain Sustainability Promotion
Guidelines questionnaire score

4.5 or higher (FY2026)

Customer Relations (Quality Management)■ Basic Policy

Quality Management System

The SWCC Group values trust, prioritizes compliance above all else,and responds to society and the times by continuing to evolve into abetter company. Based on this basic policy, we have established anannual quality policy as well as priority topics, and are working as aGroup to protect the environment. The FY2023 quality policy andPriority Topics in Quality Assurance Activities are provided on our
website.

SWCC Group Management Council

SWCCBoard of Directors

SWCC Quality Supervision Department (Quality Control Management Office)Quality Control Working Group
Chairperson: Officer in charge of quality supervision,
Secretariat: Quality Control Management Office
Quality control supervision departments of each group company
SWCC, SFCC, Fuji Electric Cable, Axio, SDS, Logis Works,
Shoukou Equipment, Showa Science, and STEC

https://www.swcc.co.jp/jpn/sustainability/esg/society/customer.html

Operating departments of each company

Relations with Local Communities
The SWCC Group strives toinstill a high awareness of social
contribution among employees,
and carries out a wide range ofworthwhile activities through its
products and services andactions of its employees toachieve a sustainable society.

Duration of survey

June 2023

June 2022

Number of suppliers surveyed

130 suppliers

43 suppliers

No. of survey questions
Average score (on a 5-point scale)

114

114

4.0 pts

3.8 pts

Starting in FY2022, we will increase the number of surveys where the survey will
be conducted so that we can conduct surveys and followups on a wider scope.
Analysis of the FY2023 questionnaire revealed that 86% of suppliers are of thelevel sought by the SWCC Group (i.e., have a grade of A or higher) in the overall
evaluation. It was 70% in FY2022, reflecting a significant improvement.

● Percentage breakdown by grade
Percentage breakdownby grade (FY2023)■ S (average of 4 points or more)■ A (average of 3 points or more)■ B (average of 2 points or more)■ C (average of less than 2 points)

Percentage breakdownby grade (FY2022)■ S (average of 4 points or more)■ A (average of 3 points or more)■ B (average of 2 points or more)■ C (average of less than 2 points)C

4%(5 suppliers)

B

Respondents:

10%

130 suppliers(13 suppliers)

AS

27%(35 suppliers)

59%(77 suppliers)C

9%(4 suppliers)

B

Respondents:

21%

43 suppliers(9 suppliers)

A

S

17%

53%

(7 suppliers)(23 suppliers)● Average scores by category

FY2023

FY2022

I. Corporate governance related to CSR
II. Human rights

IX. Coexistence withlocal communities

Actions According to Assessment Category
Sendai Plant

Sagamihara Plant

Mie Plant

In order for juniorhigh school students
to think about themeaning of working
and their future, we
conducted
workplace-based
experiential learning.

Sagamihara Plant employees
participated in environmental
conservation awareness activities ata birdwatching event sponsored by
the Society for the Environmental
Improvement in Sagamihara (SWCC
serves as an administrative
company for the organization).

The local youth baseball tournament was held for the 15th timewith a total of 500 players and their families participating in theheated matches. A portion of the plant’s stockpiles (60 foodrations) was donated to the Inabe City Council of Social Welfare
to help the local community. In support of the INABESDGs4T
project run by Inabe City, a workshop to make clip motors washeld for 20 elementary school students and their parents toexperience the 4Ts (Touch, Think, To make, and, Tell).

To be a company correctly understood, trusted, and sympathizedwith by all stakeholders, including shareholders and investors,
SWCC has developed the Disclosure Policy to 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”) establishedby the Tokyo Stock Exchange. However, information that affects
investment decisions is actively disclosed on a constant basis inaccordance with the Group’s “SWCC Group Rules on Information
Disclosure,” even if the information is not subject to the Timely
Disclosure Rules. Also, we have also established a “quiet period”
before each financial results announcement to prevent the leakageof financial results information and ensure fairness. We refrain fromcommenting or answering questions on our financial results during
the quiet period.
Dialogues with shareholders and investors includes the General
Meeting of Shareholders, financial results briefings for institutional
investors and analysts, dialogue with institutional investors in Japanand overseas, and factory tours. We hold events to deepen
understanding of our Company and strive to communicate withmore investors through our management team. In particular,
theme-based briefings are attended by the President, businesssegment managers, and outside directors, and are held on selected
themes that are of greater interest to investors.
Various event reports as well as opinions and questions received
from investors are posted on our website as content to deepen
understanding of our Company.

Assessment
Category

Number of
suppliers

S (average of
4 points or more)77

A (average of3 points or more)

35

B (average of2 points or more)

13

Provide feedback on scores and requests for
improvement by the next timeC (average of lessthan 2 points)

5

Exchange opinions and implement support for
improvement after a meeting

Actions for improvement
Provide feedback along with averages ofall suppliers and charts for score rates bymajor category

VIII. Supply chain

VII. Information security

VI. Quality and safety■ Green procurement
Recognizing that it is a fundamental duty of humans living today topass on our precious Earth to the next generation in a healthy state,
we do our best to make purchases that pay due consideration tothis 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:* Refer to our website for details

https://www.swcc.co.jp/jpn/sustainability/esg/society/client.html

III. Labor

1

IV. The environment

V. Fair corporate activities

Products and packaging that consider thefollowing 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 technologies
・Presentation of specific efforts

Financial and Management Information

Shareholder and Investor Relations

45● Sustainability Questionnaire Survey Results

Sustainability Management

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

SWCC Group’s Value Creation Story

Action policy[Category] Theme

Greetings

SWCC believes that partnerships with stakeholders are the foundation for sustainable growth. Each employee
engages in business with a high awareness of the importance of building good relationships with stakeholders andcontributing to local communities.

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 relationshipwhere 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.

46

Sustainability Management

Improve engagement (create rewarding work and workplaces)
The SWCC Group aims to improve engagement so that eachand every employee can perform their jobs well.
We believe that engagement is not a natural occurrence but
rather a result of the relationship between the Company andthe individual.

Action policy

Indicator and KPITarget (year of achievement)[People]Promote the utilization of diverse human resources(Diversity & Inclusion)

Ratio of female managers(section managers)

8% (10%) (FY2026)

Human resources development
for the future

Average hours of training per year
per employee

4 times higher
compared to FY2021(FY2026)

Engagement score

55 or higher (FY2026)

Lost time injury frequency rate

0.23 or less (every year)

Our people

Improve engagement(create rewarding work and workplaces)

Health and Productivity Management and Workstyle Reform● Improving health literacy● Achieving work-life balance● Stimulating communication

The Companies has the “duty of care” to create a safe
workplace whereas employees have the “duty ofself-care” so that they can work healthily. The SWCC
Group promotes health and productivity management
aiming to create workplaces where employees canwork in good physical and mental health.

By creating a work-life balance, we are
implementing the following measures tocreate opportunities for personal fulfillment
and self-growth.

In today’s diverse society, many different people arework together. By creating a workplace environmentthat facilitates internal communication, we will
increase psychological safety and establish anorganizational culture that makes it easy for
employees to express their opinions and proposals.

(improvement of work environments and self-care)

Ensuring implementation of occupational healthactivities: Expanding interviews with occupational
physicians, and promoting health guidance incooperation with public health nurses and healthinsurance associations● Hygiene subcommittee activities: Health promotion
activities with participation of Group employees(health seminars, sporting events, etc.)●(creation of comfortable workplaces)

Promotion of annual paid leave acquisition, reductionof overtime work (implementation of no overtimeday), and promotion of telework flextime● Enhanced benefits: Discount services for leisure,sports, childcare, and nursing care support,
introduction of health promotion application,
introduction of Thanks Points, various groupinsurances (comprehensive welfare insurance, GLTD
(group long-term disability income insurance)), etc.
●

Promote the utilization of diverse human resources (Diversity & Inclusion)

2■ Diversity Promotion Project● Placing the right people in the right jobs

● Evaluation system review

We promote the creation of a workplace
where employees can play an active role byencouraging motivation through assignmentsthat match their abilities and human qualities.

We are reviewing the evaluation system sothat the Company and employees canmutually recognize each other’s needs andvalues.

Utilization of a human resource
information database● In-house recruitment system, job
challenge system, in-house venturesystem●positions, moving toward a system that allows motivated employees
to aim for career advancement. As of FY2022, the ratio of female
managers was 6%, and 2.8% of section managers and above werefemale. We will continue to implement initiatives targeting female
employees with the aim of steadily achieving our FY2026 target.
In April 2023, the project was renamed the Diversity Promotion
Project as male participants were added. With the addition of new
perspectives, we will strengthen our efforts to promote malechildcare leave in addition to existing initiatives.

Personnel System Reform (Evaluation and Growth)●3

Switching conventional offices to free-address
system offices, increasing the Company’s
number of mobile PCs, in-house Wi-Fi
expansion, and utilization of satellite offices● Promotion of communication using T-tools(M365, web meetings, chat tools, use ofsmartphones with the functionality of
conventional business phones, etc.)●

Competency evaluations and 360-degree
evaluations● Restructuring of the evaluation system sothat it is appropriate and designed forchanges in society, various industries, andoccupations● Human resources development(strengthening organizational capabilities)
We aim to be a company where each individual works
voluntarily with a sense of responsibility and a senseof mission and where anyone can grow personally.
Department heads and employees share goals
and follow-ups are performed regularly● Education and training in line with career plan(succession plan, line manager training,
mid-level employee training, etc.)● In-house award system, improvement activities,
and results presentations● Encouragement of personal development(qualification acquisition, seminar participation,e-learning programing of choice, etc.)●

Common Will of the Company and Our Employees

The common will and empathy between the Company and employees leads to a reaffirmation of the value of work for each individual. The SWCC
Group will change its organization with a sense of unity in the face of even more intense changes in social conditions in the future.

● Sharing our management philosophy, purpose, and company policies
The President presents briefings on financial results and policies at each Group site and hold dialogues with employees
Information sharing is promoted through in-house publicity, such as SWCC videos made available via the Company intranet and workplace signage● System IDs are assigned to all employees to promote IT environment improvement so that it is easy to carry out work tasks●●

Human resources development for the future

47

1

Renewal of training content for line section
managers (enrichment of content by utilizing
360-degree feedback survey results)

2

Providing opportunities to improve work skills
and self-learning by providing e-learning
accounts for use

3

Promote visualization of training hours related toindividual education activities (study sessions,safety education, etc.) conducted within thedepartment, grasp the status of training
activities in the department, and promote theimplementation plan of study sessions

Lost time injury frequency rate
In accordance with the Sustainability Basic Policy, the SWCC Groupaims to create rewarding jobs and workplaces as a materiality
theme. In order to create rewarding jobs and workplaces, it isfundamental to ensure security and safety, and necessary toeliminate occupational accidents.

● Initiatives and results
We have established the Safety Management Office, which is under the direct control of the President and oversees the safety and healthmanagement of the Group.
● The Manufacturing Training Center was established and opened in April 2023 to provide training for new employees, follow-up education, andstep-up education. The first activity conducted by the center was safety and health education for new employees in FY2023.
● Management began health and safety inspections, with top management personally visiting sites to confirm actual conditions and to provide
opportunities for exchanging opinions with employees.
● FY2022 performance
Target: Lost time injury frequency rate of 0.23 or less (1 case) Result: Lost time injury frequency rate of 0.68 (3 cases)●● Future issues and outlook

Financial and Management Information

We consider human resources to be one of our most importantmanagement resources. In order to solve various social issues in theworld, we actively provide educational and training opportunities thatencourage individuals to voluntarily improve their abilities. Currently,
we have set the KPI for human resource development for “Human
resources development for the future” as “Average hours of training peryear per employee,” and set a specific numerical target, quadrupling
the average annual training hours for FY2026 compared to FY2021.
Efforts are being made to achieve this target through quarterly
fixed-point observation of performance. The average annual training
hours in FY2022 was 16.3 hours, an increase of 1.42 times from 11.5
hours in FY2021. The increase in FY2022 was due to the improvementof the content (increase in the number of training days) of job-specifictraining for young employees, such as training for new employees andtraining for third-year employees. For FY2023, we will work to provide
further education and training opportunities by establishing the threepoints on the right as concrete measures.

Sustainability Management

We launched the Female Empowerment Project “SWCCarat” in April
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 evenmore actively in the workplace. We aim to increase the ratio of
female managers to 8% and female section managers to 10% by
FY2026. In FY2022, we held age-specific training, exchange
meetings across generations and divisions, and awareness-raising
events for female employees. It was a new initiative, but one of theemployees who participated said, “Although I felt uncomfortable andanxious about the initiative being focused only on women, I was able
to understand its significance since there are few female managers
as a social situation and reality, and was glad that I participatedbecause I could interact with people I do not normally interact with.
It made me feel positive.” As a result, a gradual change inconsciousness is occurring. In April 2023, we created a system for
employees to transfer from operational positions to career-track(diversity promotion)

SWCC Group’s Value Creation Story[Category] Theme

1

Greetings

Viewing human resources as human capital, SWCC seeks to maximize their value to enhance corporate value over the
medium to long term. We are actively promoting measures to create a rewarding workplace, such as promoting the useof diverse human resources and internal systems to support challenges and growth.

In addition to the stress checks and employee satisfaction
surveys that have been conducted for many years, we began
measuring engagement scores through the engagement
survey in FY2021 and are implementing measures to improveengagement by reflecting employee feedback.

We will expand the health and safety activity diagnoses started at each of our business sites to each of our Group companies to visualize safety
activities and improve them.
● The Manufacturing Training Center serves as a venue for a wide range of education in areas such as health and safety, quality, and improvement.
●

48

Sustainability Management

Our governanceMonitoring Corporate Management—Risk Management■ Risk Management

Target (year of achievement)

Monitor corporate management

Attendance rate of independent outside directors at
Board of Directors meetings and committee meetings

75% or over(each year)[Governance]

Our governance
Provide good-quality andsafe products and services

Failure costs due to quality

50% reduction comparedto FY2021 (FY2026)

Customer satisfaction

Score higher than theprevious year (every year)

ReportIssuesdirections

Sustainability Committee

Sustainability Promotion
Department

ReportIssues directions

Risk Management Committee

Audit and Supervisory
Committee

Audit/advise

Business Administration Dept.

ReportAudit
Department● Major Identified Risks■ Failure costs due to quality

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 throughidentification, analysis, and evaluation of risks. Specifically, we quantitatively analyze the risks listed by each group company by quantifying them. Based on this, we identify
risks that could have a significant impact on the Group as major risks. In addition, since we have defined materiality based on the Sustainability Basic Policy, we are taking
measures to address major risks Company-wide by adding correlations to them and risks recognized by the Head Office.
Risk category

Materiality

Details of identified risks
໐ Changes in prices of copper, which is the key raw

Changes in raw
material andenergy prices

material

・Our future
・Our earth໐ Changes in prices of petrochemical products such aspolyethylene໐ Fluctuations in electricity procurement prices໐ Fluctuations in city gas procurement prices

໐ Suspension of operations, shutdown of logistics

functions, and other problems at manufacturing sites
caused by the following disasters:・ Natural disasters such as massive earthquake,
typhoon, and flooding
・ Accidents such as fire

Failure costs (with FY2017 as 100%)Natural disasters

・Our earth

100
90
80
70
60
50
40
30
20
10
0

Pandemic—

໐ Impact of COVID-19

Supply chain
disruptions andbreakdowns

・Our
partnership໐ Stoppages and delays in the supply of raw materials

FY2017FY2018FY2019FY2020

FY2021

FY2022■ Customer satisfaction

due to supply chain disruptions and breakdowns

໐ The emergence of quality issues(faults and defective

improvements. We assume that this is because the period during which
the survey was conducted coincided with the period during which pricepass-through was implemented in response to soaring raw material andenergy prices. In FY2023, we will strive to improve customer satisfaction by
providing even more detailed explanations and gaining the understandingof our customers while making even greater corporate efforts.

Quality issues

・Our
governanceRoot cause analysis

Measures to prevent recurrence

Response going forward

In response to the fact that some of the Group
products manufactured and sold in the past
had been tested using a test method different
from the test method established withcustomers, a special investigation committee
was established on July 21 2021 and an
investigation was carried out. The results of theinvestigation and measures to prevent
recurrence were announced on October 29,
2021. Subsequently, the investigation was
continued and the results were announced on
January 20, 2023.

・Organizational and systemic factors such as
inadequate establishment of systems to prevent
tampering and long-term employee retention
・Environmental factors related to quality control
operations, such as a shortage of personnel inthe quality assurance department and anincrease in workload
・Subjective and individual-based factors related
to managers and employees that caused a lackof compliance awareness・Internal control factors that did not allow
inadequate quality to be quickly ascertained

We have introduced a risk reporting
system that establishes reporting routes
to top management such as introductionof a management system formeasurement data, enhancement of the
independence and supervisory functionof the quality assurance department,
implementation of personnel rotation andoptimization of personnel, establishmentof awareness of quality compliance, andformulation and dissemination of basic
compliance policies.

The internal investigation team hascompleted its investigation into
inadequate quality control. Moving
forward, we will work to restore
confidence in our Group and its
products by strengthening our quality
control system and thorough quality
audits through enhanced governanceto ensure that the aforementioned
preventive measures are
implemented and that such an
incident does not occur again.

・Significant impact on our performance if shifting costs to
product prices is difficult or loss occurs due to a dramatic
drop in market prices

・Formulated Business Continuity Plan (BCP) to ensure smooth initial
response against anticipated risks
・Made systematic investments to strengthen infrastructure equipment at
manufacturing sites
・Purchased fire and other insurance

・Huge impact on performance due to substantial restrictions
in planned production activities caused by prolonged
deterioration of social infrastructure functions due to power
shortages, logistics delays, and other problems

Shrinkage of the market caused by prolonged
・Actions taken by the COVID-19 Emergency Response Center (confirm safety ・pandemic and constraints in business activities
of employees, prevent infection within and outside the company, etc.)
caused by significant impact on our financial position
・Built a business continuity system that uses online tools, etc.
and results of operations
・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

・Monitoring by the Quality Control Management Office and audits by the
Audit Department
・Ensured thorough quality control and prevent violations through thepromotion of the digitalization of quality assurance
・Rolled out a group-wide education program
・Purchased liability insurance

・Compensation for damages and product liability claims
arising from quality issues
・Damage to trust and reputation from quality issues

・Fostered group-wide compliance awareness and strengthened the system
concerning the tax systemof checks by the Legal Department
໐ Risk of violating obligations under contracts or・Implemented training and workshops concerning compliancetransactions with business partners or others
・Worked to detect any violations through the use of the internal reporting໐ Loss of trust due to behavior by officers or employees
systemthat is unacceptable based on social norms

・Disciplinary measures, sanctions, or other penalties
imposed by regulatory authorities
・Possibility of claims for damages or demands for the
cessation of transactions from business partners and otherrelevant parties
・Damage to trust or reputation due to being consideredlacking in compliance awareness・Strengthened our response to environmental 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 orbusiness results from delays in responding to environmental
and climate change issues
・Decline in profitability due to ballooning manufacturing costsin the medium and long term

・Promotion of diversity management through the Diversity Promotion Project・Extension of retirement age and introduction of the elective retirement age
system・Enhance the practice of hiring by job type targeting human resources thatcan be immediately effective since they possess required specialized skills,
and highly specialized human resources, etc.
・Job challenge system and in-house recruitment system for placing the rightpeople in the right jobs
・Next-generation business leader candidate training
・Various seminars and rank-based job training
・Expansion of training to include safety training at the Manufacturing
Training Center・Significant impact on business performance due toorganizational constraints and loss of business opportunities

໐ Risk of violating laws, regulations, and rules

Compliance・Ourgovernance

Environment andclimate change

・Our earth・Ourpartnership

Measures for Dealing with Inappropriate Quality Control of Group Products
Overview and background

Remaining risks

Securing anddeveloping humanresources໐ Impact on business from delays and other problems

in responding to environmental and climate change
issues໐ Growing cost of reducing CO2 emissions

໐ Impact on business continuity due to difficulties in・Our people

passing on manufacturing skills

໐ Impact of missed growth opportunities onachievement of performance targets

Financial and Management Information

The SWCC Group conducts customer satisfaction surveys to provide
high-quality, safe products and services and to improve customer
satisfaction. Through the survey, we asked respondents to answer
questions regarding product quality, price, and delivery time, as well as
sales and technical support systems and sustainability using a 5-point
scale. As a result of FY2022, we received many requests for priceproducts)
໐ Manufacturing and selling products that violate
product standards, laws, regulations, oragreements with customers

Major initiatives
・Enhanced management by the Group Procurement Division
・Reduced inventory through planned, stable procurement
・Shifted costs to product prices
・Hedged risk of copper price fluctuation by utilizing futures trading, etc.
・Utilization of fixed-price contracts for city gas
・Introduction of photovoltaic power generation facilities using the PPA model

Sustainability Management

Initiatives and results
Since FY2018, we have been working to reduce failure costs due toquality. Since that time, failure costs have steadily decreased eachyear. Currently, we are working to achieve the target of reducing
quality-related failure costs by 50% in FY2026 compared to FY2021.
In FY2022, we decreased quality-related failure costs by 10%
compared to FY2021 with the figure continuing to decrease. We willfurther strengthen our efforts to achieve this target.

Future issues and outlook
In the future, we will work on four key themes: 1. Deepen knowledge andreform our culture related to quality, 2. Promote the digitalization of inspection
results and pass/fail judgment operation, 3. Reduce failure costs due toquality issues, and 4. Pass on high-quality manufacturing throughstandardization and human resource development. In addition, in cooperation
with the Manufacturing Training Center, which was established in FY2023,
we will implement co-education to improve the quality of operations andrealize the provision of high-quality, safe products and services.

SWCC Group’s Value Creation Story

Operating Departments and Administrative Departments

Provide good-quality and safe products and services

Reason for initiative
Since FY2018, the SWCC Group has been working to improve
quality by introducing the concept of failure costs. In order topromote our management philosophy “The SWCC Group strives tobe trusted”, we will plan, develop, and design products and build aquality assurance system for all processes from product planningand development, design, manufacturing, inspection, and delivery toenhance customer trust.

49

Audit

Board of Directors
ReportIndicator and KPICollaborates/
shares information

Action policy[Category] Themewith the Risk Management Committee and full-time Audit and Supervisory
Committee members, and discuss and consider responses.
Regarding risks related to the environment, society, and governance, we
collaborate and share information with the Sustainability Promotion
Department, which is the secretariat of the Sustainability Committee. The
Sustainability Committee examines how to respond to Company-wide risks
and opportunities, and reports the details of deliberations to the Board of
Directors on a regular basis (at least twice a year).

Greetings

In order for SWCC to be a Group that promotes sound business activities and creates trusted corporate value,
we continue to work on the establishment and further strengthening of a corporate governance system that ensurestransparency and fairness in corporate management.

The SWCC Group carries out group-wide risk management based on threelines of defense: operating departments (first line), administration
departments (second line), and audit departments (third line). Specifically,
the Risk Management Committee, which is chaired by the Group CEO andcomposed of the Company’s executive officers and fellows, evaluates risks
and discusses countermeasures implemented by the operating
departments, manages the progress of risk management plans and risk
measures, and reports to the Board of Directors. Furthermore, we are
striving to strengthen our group-wide risk management system, which isessential for the continued development of our businesses. We established
the Risk Management Office within the Business Administration Department
as a risk control department. The office supervises risk management of theentire Group, which includes handling administrative operations of the Risk
Management Committee, formulating rules and guidelines, providing
training, and monitoring risks. Furthermore, in order to swiftly respond torisks that occur on a regular basis in business divisions and administrative
divisions, we have introduced the Risk Report System, which provides risk
information to the Risk Management Division promptly when a risk event
occurs. In the event of an emergency or serious event, we share information50

Sustainability Management■ Information Security
The SWCC Group has established its Information Security Policy,
and revises its countermeasures against cyber-attacks, 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. Our information security

Corporate Governancepolicy is provided on the SWCC Corporation website as Information
Security Policy.
URL：https://www.swcc.co.jp/jpn/security/index.html● FY2023 Initiative Plan

We provided training on information security to all employees
in the Group, including officers, from December 2022 toFebruary 2023. In FY2022, we created a CSIRT system, andfrom FY2023, we will respond to risks with a new system.

In the past, e-mail training has been conducted to reduce thenumber of e-mails that are opened. In FY2023, we plan to
conduct e-learning training on how to deal with attack-typee-mails, how to respond when an e-mail is opened, and how
to report. In addition, we plan to diagnose devices connectedto the Internet to strengthen security.

Based on our Purpose “Innovating new ideas today. Becoming thenorms of tomorrow” and Management Philosophy, in which the
keyword is “trust,” our basic policy for corporate governance is toconduct activities with the recognition that speeding up andstreamlining management as well as enhancing relevant monitoring■ Changes in Governance
2006

Year
Organizational design

2016

2020

2023

13

14

10

7

7

7

7

Directors

9

10

7

7

7

7

7

Outside directors

0

2

2

3

3

3

4

Auditors

4

4

3

ー

ー

ー

ー

3
・Appoints outside
directors(from June 2015)

ー

2

ー

ー

・ Establishes Nominating
・ Strengthens authority
・ Establishes Chairmanof the Board ofCommittee
of executive officers
Directors (April 2020)(from December 2018)(April 2019)
・ Establishes Compensation ・ Establishes Group CEO ・ Implements restricted(June 2019)
share-based
Committee
remuneration plan(from December 2018)
・ Abolishes position of・ Starts evaluating effectiveness directorof the Board of Directors
・ 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 purpose of 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 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

Nominating andCompensation
Committee

ReportRisk Management
Committee

Collaborates

Supervise

Board of Directors
President and Representative Director

Recommend

Audit

Audit, etc.

Audit and Supervisory Committee

ReportSustainability
Committee

Group CEO

ExecuteAudit Control DivisionInternal audit
Audit

・Strengthening of the Group’s strategic functions
・Streamlining of Group management functions
・Further strengthening and deepening of thebusiness segment system

Strategic Functions

Corporate Officer
・ Group management supervision, quality supervision
・ China Business governance reform・ Management Strategy, Investment Strategy, IR, Group
company management
・ Overseas Business, Wire Harness Business・ Capital strategy, sustainability, risk management, legal affairs
・ Smart Stream Business, Electric Power System Strategy
・Promotion of quality and SDGs
・DX, Digital Innovation

Business Segment Management Council

Business Segment Management Council

Business Segment Management Council

Chief of Energy and Infrastructure
Business Segment

Chief of Electrical Equipment andComponents Business Segment

Chief of Communication andIndustrial Devices Business Segment

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

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

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

・Mobility Business Strategy

Management ・Human resources, general affairs, and shared services ・Sales coordination, material procurement ・Technology Planning, R&D, and Intellectual Property Strategy
・Information security, cybersecurity
・Production technology, health and safety, Manufacturing Training Center
Functions ・Finance, accounting, and auditing
Business management

Financial and Management Information

In addition, we are working to raise awareness of complianceeducation at training sessions on laws and regulations that areclosely related to our business, such as the Antitrust Act, theSubcontract Act, and the Construction Business Act, and at
rank-based training sessions.
In addition, we operate a Group-wide internal reporting system(Compliance Hotline) by establishing contact offices internally andexternally (an attorney’s office). We prepare a system to prevent
compliance violations and detect any that occur.
The SWCC Group is committed to enhancing and ensuring
compliance through continuation of these initiatives.

Sustainability Management

Shareholders’ MeetingGroup Management Council (Executive Officers Meeting)■ Complianceー・ Changes to operatingcompany (April 2023)
・ The Nominating Committee
and the Compensation
Committee were merged toestablish the Nominating andCompensation Committee(June 2023)

SWCC Group’s Value Creation Story

3
・Changes toholding company

Compliance/risk management

As the SWCC Group considers compliance as an important facet ofour management foundation, our Legal Department plays a central
role in implementing various initiatives within the Group to ensurecompliance with laws and regulations and to establish corporate
ethics.
In FY2022, we formulated a new basic compliance policy tocoincide with the establishment of the Company in its new form. It
serves as a roadmap for us to act as officers and employees of the
SWCC Group so that we can be trusted by society in general.
Compliance awareness is fostered by disseminating and thoroughly
implementing this policy.

2022

Total number of officers

Topicsin scale and intensity, but also to localized torrential rain, lengthy
periods of rain, etc. due to training. To prepare for disasters such asthese, we have prepared a flood response timeline determining“what action 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 in advance ofthe disaster occurring.
Furthermore, during the COVID-19 pandemic, we have centralized theGroup’s communication system in order to combat its spread. In
addition, as a company involved in infrastructure, we facilitatedteleworking and staggered working hours at sales locations andoffices, while our manufacturing and business sites continued businessactivities by carrying out exhaustive infection prevention measures.
To date, we have continued to improve the remote work
environment and actively promoted its operation through theintroduction of extension smart phones, converting to a
non-territorial office system at the Head Office headquarters office,expansion of mobile PCs and office Wi-Fi, promotion of web
conferencing systems, use of satellite offices, introduction of
workflow, and adoption of Company-wide chat tools.
In FY2023, we will continue to prepare for business continuity in theevent of an emergency and aim to improve operational efficiency bypromoting diverse work styles as a sustainable company.

2019

Company with a Audit and Supervisory Committee (from June 2019)

Accounting Auditor

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 duringbusiness activities. We must similarly restore operations in a quick
and planned manner to continue business. For that reason, during
non-emergency times, we steadily work on BCM (BusinessContinuity 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 FY2022, we promoted the strengthening of business sites in the
BCM system that has been established at each of our sites inJapan, conducted facility inspections, implemented preliminary
measures based on the plan, and verified the effectiveness of thesystem through periodic drills. We are also reviewing the BCP
manual in conjunction with changes related to group organizationalchanges and personnel transfers. 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, and carried out activities to enable each site tooperate 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 of rainfall
are being recorded across Japan due not only to typhoons growing

2018

Company with a board of statutory auditors (to June 2019)

Outside auditors■ BCM (Business Continuity Management)functions are universal challenges for all companies. The SWCC
Group is committed to actively developing a system required toensure appropriate operations of the Group while fulfilling its
corporate social responsibility (CSR).
Greetings● FY2022 Initiative Results■ Basic Approach

Group companies

51

52

Sustainability Management■ Initiatives by the Board of Directors and Each Committee■ Policy on the Structure of the Board of Directors
President

Board of Directors FY2022 Held 21 times

InsideOutsideComposition (FY2022) Composition (FY2023)

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.

3 directors

2 directors

4 directors who are
Audit and Supervisory
Committee members

5 directors who are
Audit and Supervisory
Committee members

Meeting Activities● Reported and deliberated on the progress of the mid-term management plan and the status of business execution
during the fiscal year under review● Reported and deliberated on M&A to strengthen the business portfolio in light of the business environment and competition● Reported and deliberated on the status of dialogues with shareholders (investors) through IR activities, etc.
● Reported and deliberated on compliance and risk management issues for the entire Group● Reported and deliberated on initiatives to address sustainability issues, including environmental initiatives● Reported and deliberated on the evaluation of the effectiveness of the Board of Directors (questionnaire survey basedon advice from external organizations)

Directors’ Skill Matrix
Takayo Hasegawa Dongcheng Zhang

Name

Audit and Supervisory Committee FY2022 Held 18 times
Composition (FY2022) Composition (FY2023)

To audit and supervise the execution of directors’ duties through monitoring and verification of the internal
control system and effective cooperation with an accounting auditor, the internal audit department, and otherdepartments, in accordance with the audit policy and plans set forth by the Audit and Supervisory Committee.

4 directors

5 directors

Meeting Activities● Formulation of audit policies, audit plans, etc. ● Evaluation of accounting auditors and determination of
appropriateness of reappointment● Preparation of audit reports

Composition (FY2022) Composition (FY2023)

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 with the Board of Directors.

3 directors

●

●

●

●

●

Sustainability

●

●

●

●

●

●

●

Sales

●

Overseas business●

SkillsNote: Abolished in June 2023

To deliberate the determination of the remuneration system and program and individual remuneration amounts for
directors, executive officers, and others, and return a report based on consultation with the Board of Directors.

5 directors● Reviewed officer remuneration system, deliberated on the amount of remuneration for the next fiscal year,
and reported to the Board of Directors about those activities.

Sustainability

Establishes Nominating and Compensation Committee (June 2023)
Composition (FY2022)

●
●

●
●

●

Reasons for selection

4 directors＿

Directors possessing robust knowledge and experience in issues such as the environment, society, andstrengthening 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 experiencein the business, based on the SWCC Purpose.

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

Composition (FY2023)
Sales

Composition (FY2022) Composition (FY2023)
1 chairperson
17 committee
members

Overseas business1 chairperson
14 committee
members

Accounting and financeAccounting & Finance Directors possessing robust knowledge and experience related to accounting and financeare 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).

Sustainability Committee FY2022 Held 2 times

53

Purpose and authority

Composition (FY2022) Composition (FY2023)

To strengthen the sustainability structure with the aim of conducting sustainablecorporate operations from the perspectives of the environment, society, and theeconomy, based on the SWCC Group’s management philosophy.

1 chairperson,
14 members

Directors with solid knowledge and experience in technology are required to create products of appropriatequality, conduct a wide range of research and development including basic research, create new businessmodels, and promote DX.

1 chairperson,
11 members

Financial and Management Information

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

Risk Management Committee FY2022 Held 2 times

To further enhance the SWCC Group’s corporate governance system by supervisingcompliance and risk management of the entire Group and continuing to identify andcorrect issues thereof.

●

Corporate management＿

Meeting Activities

Purpose and authority●

Sustainability Management

Composition (FY2022) Composition (FY2023)

The Nominating and Compensation Committee deliberates and report on such matters upon consultation with theBoard of Directors on matters related to nominations, such as the nomination of candidates for directors andexecutive officers, and succession planning, and on matters related to compensation, such as the determinationof the structure and systems for directors and senior management and the amount of individual compensation.

●

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 mid-term
management plan “Change & Growth SWCC 2026.”

Purpose and authority

Purpose and authority

Takashi Togawa●● Follow-ups on the next-generation management executive candidate development plan
● Deliberations on how to proceed with the performance review and the results of the evaluation

Compensation Committee FY2022 Held 6 times

Minako Nishimura

Reasons for Selection (by skill)＿

Meeting Activities

Takashi Mukuno●

Technology

Purpose and authority

Seiichiro Ichikawa

Corporate management

Accounting and financeNote: Abolished in June 2023

Yuji Sakakura

SWCC Group’s Value Creation Story

Purpose and authority

Nominating Committee FY2022 Held 6 times

Based on the above policy, the Board of Directors, in addition toexperience in corporate management, is required to acquire
knowledge and knowledge related to sustainability in order to further
promote initiatives to resolve social issues, the Company selects
persons with abundant knowledge and experience in fields such as
international, accounting, finance, and technology in a well-balancedmanner.
The skills required for the Board of Directors will continue to bereviewed in accordance with changes in management policies andstrategies.

Greetings

Purpose and authority

Our basic approach to corporate governance is based on the SWCC
Purpose, which is to guide the SWCC Group’s raison d’etre andmanagement and employees in their efforts to move forward
together, and on the recognition that the speed and efficiency ofmanagement and the accompanying enhancement of monitoring
functions are universal corporate challenges. In accordance with thispolicy, we appoint people as directors who exhibit excellent characterand insight, and can supervise and manage the Company. It is also
our policy to have members with diverse backgrounds to cover awide range of knowledge and expertise that we consider important to
our Company.

Technology

54Sustainability Management■ Evaluation of the Effectiveness of the Board of Directors● Percentage Breakdown of Remuneration
The percentage of fixed remuneration, performance-linked remuneration, and remuneration to grant restricted shares that make 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.
FY2020 Remuneration
Maximum of 20% of
fixed remuneration

Fixed remuneration

80%

16%

Paid as 25% of performancelinked remuneration

4%

FY2021 Remuneration
Maximum of 20% of
fixed remuneration

Fixed remuneration

77%

15%

Paid as 50% of performancelinked remuneration

8%

FY2022 Remuneration■ 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 committeethat includes independent outside directors. Furthermore, the Boardof Directors determined that directors’ individual remuneration for thecurrent fiscal year was in line with the decision-making policy because

Fixed remuneration

it was confirmed that the method for determining remuneration details
and the decided remuneration details were consistent with saiddecision-making policy and recognizing the report from thecompensation committee. The level of directors’ remuneration, etc. is
set with reference to other companies’ standards based on surveys
conducted by an external professional organizations. In addition, thecompensation structure for directors (excluding Directors who are

69%

Percentage

Fixed
remuneration

100

This consists of a basic remuneration and additional job-based remuneration that is dependent on the director’s duties andresponsibilities. Basic remuneration shall be based on the position, importance, and difficulty of the position.

Annual target indicator(long-term incentive
compensation)

17.5

Percentage*2 Payment rate

Company performance ・Operating income

15%0-150%

Company performance ・ROIC

15%

0-150%

ESG-related ・Internal adoption rate of renewable energy ・Greenhouse gas (CO2) emissions ・Lost-time injury frequency rate

5%0-110%

A certain percentage of the fixed 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 and Supervisory Committee members) are not paid the
remuneration to grant restricted shares.

Note 1 The percentage of annual performance-linked remuneration is based on the assumption that the payment rate is 100%.
Note 2 The annual target indicators, company performance and ESG-related percentages, are based on the assumption that the payment rate is 100%.

55

35% of fixed remuneration

66%

23%

Paid as 50% of performancelinked remuneration

11%

FY2024 Remuneration (planned)
Fixed remuneration

40% of fixed remuneration

62.5%

25%

Paid as 50% of performancelinked remuneration

12.5%

Fixed remuneration

Performance-linked remuneration

Remuneration to grant restricted shares■ Payment Schedule
Monetary remuneration combining fixed and performance-linked
remuneration in FY2023 shall be paid in equal amounts each month starting
the first month of FY2023. Remuneration to grant restricted shares shall be
paid by the month following the 127th Ordinary General Meeting of
Shareholders, under the condition that the director has been appointed orreappointed at said meeting.

Monetary remuneration for fixed remuneration in FY2024 shall be paid
evenly on a monthly basis starting from the beginning month of FY2024.
Monetary remuneration for performance-linked remuneration, which isconsideration for business execution in FY2023, shall be paid at the end ofJune 2024, when the 128th Ordinary General Meeting of Shareholders will
be held.

■ 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 (Group CEO), Takayo Hasegawa, within the total amount of
directors’ remuneration established at the Shareholders’ Meeting, under thecondition of considering factors such as the report by the Compensation
Committee, policy for deciding remuneration of directors and others
established by the Company, and the assessment results based on theperformance 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 thevoluntary compensation committee that includes independent outside
directors, compliance with the policy on deciding remuneration of directors
and others established by the company, and assessment results based on
the performance reviews of directors conducted by the voluntary
nominating committee, majority of which comprises independent outside
directors. Measures are in place to ensure that decisions are not madearbitrarily and that authority is properly exercised.

The reason the President and Representative Director was delegated isthat it was determined that said person has thorough knowledge of matterssuch as the environment that surrounds the Company and its businessconditions, and is suitable for making assessments that take into accountthe 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 amountestablished at the General Meeting of Shareholders, in accordance with
Paragraph 3, Article 361 of the Companies Act of Japan.
Matters concerning the determination of remuneration, etc. for individual
directors in FY2024
Unlike in FY2023, individual remuneration for individual directors (excluding
directors who are Audit and Supervisory Committee members) in FY2024
will be determined by the Board of Directors after deliberation by the
Nominating and Compensation Committee within the total amount of
remuneration for directors determined at the General Meeting of
Shareholders.

Financial and Management Information

The monetary amount of annual performance-linked remuneration, which is a short-term incentive remuneration, is determined fromthe Company performance indicators and ESG-related indicators according to the degree of achievement of operating income and
ROIC forecasts announced at the beginning of the fiscal year, specifically, the degree of achievement of the internal adoption rate ofrenewable energy, greenhouse gas (CO2) emissions, and lost-time injury frequency rate.
The remuneration indicators, formulas, and annual performance-linked mechanisms, etc. are as follows.
1. Company performance indicators
Paid based on the operating income achievement ratio (A) and ROIC achievement ratio (B). The details are as follows.
• Operating income achievement ratio (A)= (current operating income outlook ÷ current operating income target) x 100%
• ROIC achievement ratio (B) = (current ROIC outlook ÷ current ROIC target) x 100%
2. ESG-related indicators
Paid based on the number of items achieved among internal adoption rate of renewable energy (C), greenhouse gas (CO2)emissions (D), and lost-time injury frequency rate (E).
3. Reasons for selecting indicators
The operating income achievement ratio, a company performance indicator, has been set as an indicator of profitability, and the
ROIC achievement ratio has been set as an indicator of capital efficiency. With regard to ESG-related indicators, we identify social
issues that have a significant impact as materiality, identify priority issues, and formulate specific action policies, indicators and
KPIs for each theme. Among these themes, we have set the internal adoption rate of renewable energy, greenhouse gas (CO2)emissions, and lost-time injury frequency rate as ESG-related indicators that we consider particularly important.
It has been determined that achieving these targets will lead to improving mid- to long-term corporate value.
4. Formula
Annual performance-linked remuneration = fixed remuneration x (degree of achievement of annual targets in company
performance (A x 50% + B x 50%) + degree of achievement of ESG-related annual targets (degree of achievement according to
the number of items achieved among C, D, and E))
5. Annual targets in company performance(percentage and mechanisms)

Restricted
share-based
remuneration

Fixed remuneration

Description

*1

35

10%

Sustainability Management

Performancelinked
renumeration

21%

Paid as 50% of performancelinked remuneration

FY2023 Remuneration● Efforts to Build a Business Foundation—Corporate GovernanceType

Maximum of 30% of
fixed remuneration

SWCC Group’s Value Creation Story

the Board of Directors after appropriate feedback was provided to
the Board of Directors on the status of dialog with shareholders(investors) through IR activities and other means. In addition, we
also received evaluation results such as sufficient communication
between inside directors and outside directors. Therefore, as theresults for each evaluation item were mostly favorable, it wasdetermined that, on the whole, the Board of Directors is functioning
appropriately and that its effectiveness is ensured.
On the other hand, issues related to the efficient operation of theBoard of Directors in order to improve the effectiveness of the Boardof Directors, issues related to the mechanism for the internal audit
department to properly report directly to the Board of Directors andthe Audit and Supervisory Committee in order for the of the Board of
Directors and the Audit and Supervisory Committee to function, andissues related to deepening discussions on investment in humancapital and intellectual property, etc.
In the future, the Company’s Board of Directors will take prompt
action on such issues after due consideration based on thiseffectiveness evaluation, and will continue to make efforts toenhance the functions of the Board of Directors.

shareholders for as long as possible. The remuneration structure
encourages management initiatives from both short-term andlong-term perspectives to appropriately reward results. Since
directors who are Audit and Supervisory Committee members are
responsible for the supervisory function of management and are notin a position to be responsible for business execution, only fixed
remuneration excluding incentive remuneration is paid.

Greetings

We conduct analysis and evaluation of the effectiveness of theBoard of Directors each fiscal year to verify that the Board functions
properly. Specifically, based on the answers to the questionnaire forall 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.
Analysis and evaluation during the current fiscal year wereconducted in the following manner with the advice of an external
institution. First, we conducted a survey targeting all directors who
are members of the Board of Directors. Anonymity was ensured byresponding directly to an external institution. The questionnaire wasadministered from several perspectives, including the operation,
composition, and deliberations of the Board of Directors.
The results of the evaluation showed that the frequency of Boardof Directors meetings was appropriate, that discussions were notformal but open, lively, and constructive, and that sufficient
discussions were held to determine management strategies andplans with an awareness of profitability and capital efficiency. In
addition, evaluation results were obtained, such as the fact thatsufficient discussion was conducted as a matter for deliberation by

Audit and Supervisory Committee members) consists of three typesof compensation: Fixed compensation; annual performance-linked
compensation as short-term incentive compensation, which isvariable compensation; and restricted stock compensation as
long-term incentive compensation, which is intended to provide an
incentive to continuously increase the Company's corporate value
and to realize further value sharing between directors and56

Sustainability Management

New corporate structure

Round-table Discussion among Outside Directors

Sakakura

The four outside directors and Audit & Supervisory Committee members who support SWCC’s corporatetransformation and growth strategy from a management monitoring standpoint spoke from their own
perspectives about their assessment of the current situation and the challenges they facein further increasing value.

In April 2023, we changed our corporate

structure from SWCC Showa Holdings to an operatingcompany structure (SWCC), which was a verystraightforward and good measure from a governance
perspective. The significance of the holding structure haddiminished as structural reforms to strengthen the financial
Greetings

structure have progressed, so I believe it was time toreassess the situation. In addition, along with the change inthe corporate structure, I think that it is also significant that inconjunction with the change in corporate structure SWCC
has begun to move toward becoming a Company withapproximately 4,000 employees of the entire group that havea common awareness in line with the SWCC Purpose.

issues without distraction, helping to improve the

Ichikawa

effectiveness of the Board of Directors by providing a timely

What is valuable about the SWCC Purpose isthat it was created in-house and not adopted from anexternal source. Next, it is important to consider how to carry

Minako Nishimura

Seiichiro Ichikawa

Yuji Sakakura

Takashi Mukuno

Outside Director, Audit andSupervisory Committee Member

Outside Director, Audit andSupervisory Committee Member

Outside Director, Audit andSupervisory Committee Member

Outside Director, Audit andSupervisory Committee Member

Contributing to the promotion of Change & Growth from a neutral standpoint
and by utilizing professional expertise

purpose in employees at production sites. This is something

Sakakurathat I advised when I was briefed on the SWCC Purpose andremuneration, SWCC is also undertaking reforms aimed at

I see that it is proceeding well. The key to sustainable growth

creating an effective system under the Nominating andis whether the SWCC Purpose creates a Company where

Remuneration Committee. A performance-linked

there is a sense of unity at each production site. There is still

remuneration system, such as the granting of restricted

room for improvement in that area, and I think it will be anshares, was introduced from the perspective of shareholders

issue for the future.

and management. In addition, with the emphasis placed on

Effectiveness of the Audit and Supervisory
Committee and Board of Directors
Sakakura

What is expected of an Outside Director

monitor and supervise management execution from theperspective of corporate governance, and to contribute tomedium- to long-term enhancement of corporate value by
utilizing their experience and knowledge. From my career as
CFO in the finance department of a general trading company
and at an independent M&A advisory company, I believe that
I am expected to make proposals on financial strategies,
capital policies, and M&A strategies for growth.
Ichikawa I have gained experience working mainly in the
production department of a beer manufacturer. In addition todevelopment, quality control, engineering and productsustainable corporate growth, we are also implementing
measures to reflect ESG-related indicators in executive
compensation.
Ichikawa

We are just getting started with the use ofdevelopment. I use this knowledge to monitor and supervise

an audit and supervisory committee as part of our

ESG-related indicators and officers’ remuneration. Currently,

management operations in a wide range of areas and to offer

organizational design. As an Audit and Supervisory

the indicators are the rate of in-house adoption of renewable

our opinions and recommendations. I am also involved inCommittee member, I play both the role of Ddirector andenergy, greenhouse gas emissions, and lost time injury

dealing with quality issues and support appropriate

Aauditor but feel that I am able to work in an organic mannerfrequency rate, but the weight and content of these

improvement efforts.

thanks to the work of full-time Audit and Supervisory

indicators will change in accordance with the demands of

MukunoCommittee members and secretariat staff. In the past,society. With SWCC’s unique ESG perspective, for example,

manufacturer that focused on B2B where I was involved indomestic businesses were the main subject of audits, but

the business growth of SICONEX® and SICOPLUS®, which

management planning, intellectual property/legal affairs, andsince the COVID-19 pandemic has subsided, we willaddress the needs of the electricity market for amarketing operations. For a total of 16 years, I have beenenhance audit activities also targeting overseas businesses,

decarbonized society, could be considered as indicators.

responsible for the management of overseas subsidiaries inincluding businesses in China and Vietnam, in the future.

Sakakura

Europe, the U.S., and China. Based on these experiences, I

Ichikawa

discussions have been held on topics such as the term ofwould like to make recommendations in terms of pursuing a

Supervisory Committee is very straightforward in how it

office of the President and the qualifications required, and thebusiness model utilizing SWCC’s elemental technologies

operates. Committee members are able to have substantive

SWCC’s basic approach to the succession plan has been

based on an analysis of domestic and international businessdiscussions because we can provide information openly

finalized. The appointment of a manager needs to beconditions and trends of other companies in the industry,

within the Company. I very much appreciate the fact that theconsidered from a variety of perspectives, including not only

and creating mechanisms to establish such a model.

discussions held by the committee with outside directors arebusiness performance but also leadership, foresight, andNishimura I am expected to make proposals that makenot formal.

execution abilities. With regard to the CEO in particular, it isuse of my experience in human resource development andSakakura

career development, my insight as a corporate manager, andof outside directors in various situations and tries togrow the Company sustainably and increase shareholder

my IT field-based knowledge. Although this is my first time

incorporate them. Although the Executive Management

value.

working in the wire and cable industry, I would like to use my

Council is the decision-making body on the executive side,

Ichikawa

experience in human capital to support SWCC reforms thatoutside directors also attend meetings and actively provide

This is because it is meticulously planned and steadily

are being strongly promoted under President Hasegawa.

opinions and advice rather than mere observers in an effort

implemented from the development plan. Since candidates

to support decision-making. In addition, the Company also

are narrowed down through a clearly defined process,holds management retreats* where all executive officers andI believe that it is possible for shareholders to selectthose with higher ranks discuss important management

successors that are clear and without anxiety.

I have worked for a long time at a material

I have the impression SWCC’s Audit and

SWCC is a company that listens to the opinions

With regard to the appointment of directors,

necessary to think about what succession should be like to

I feel that SWCC’s succession plan is wonderful.

Financial and Management Information

production, I have been involved in research and

SWCC adopted the system of a company withIn regard to officer nomination andSustainability Management

Sakakura The roles required of outside directors are to

Nominating and Compensation Committee activities

SWCC Group’s Value Creation Storyout the process of instilling purpose, including instilling

grasp of the Company's important issues.

* Management retreats: Retreats where all directors (including outside directors), executive officers, and fellows participate in intensive and constructive discussions on various management
issues of the SWCC Group

57

58

Sustainability Management

For increasing the corporate value of
SWCC and achieving sustainablegrowthIchikawa

I would like to touch upon the quality

management system as a foundation for further growth. Overthe past two years, SWCC has been improving its quality
management system which was initiated due to quality
problems at Group companies. Inappropriate behavior is said
to occur when three things come together: opportunity,

Results of management reform and futuretransformation

motivation, and justification. At SWCC, efforts to reduce
opportunities for inappropriate behavior through digitalizationof operations, to increase flexibility in personnel allocation,of our management reforms in FY2019. During this period,

and to prevent motivation and justification from being created

EBITDA, which is the basis for calculating corporate value,

through the project to instill quality awareness, areincreased by approximately 1.5 times from the 9 billion yen

progressing smoothly. As an Outside Director, I have seenlevel at the end of March 2019 to the 14 billion yen level at

improvement activities, and I think things are changing in a

the end of March 2023. Shareholders’ equity ratio improved

positive direction. Although it may be difficult to establish asignificantly from 28.7% to 43.7% and the debt-to-equity

quality system overnight, I would like to help so that reforms

ratio improved significantly from 1.34 to 0.61. As a result of

can be made as quickly as possible.

these management reforms, the Company was able to

Nishimuraincrease shareholder return, which was a major achievement.

SWCC has expanded the scope of initiatives for diversity in

However, in the VUCA era, which is rapidly changing andhuman resources from promotion of women’s participation

I would now like to talk about human capital.

Ichikawa DX is needed in the field, especially at production

Ichikawa

increase our growth potential. For example, I believe thatsites. Labor shortages are predicted, especially due to theimportant. Once human resource development has ceased,order to increase human resource diversity in the future,

improving productivity and operational efficiency through theaging of skilled workers, making it difficult to acquire humanthe repercussions will be felt five to ten years later. Based on

although it is important to recruit human resources, SWCC

promotion of DX is an important issue.

resources and pass on know-how. This is absolutely

past reflections, I feel it is a good thing that the Board ofmust be an entity that applicants want to work for. I would

Mukunounavoidable, so I think it is necessary to immediately start DX

Directors is talking about how investment in education

like to actively make proposals for the creation of a company

at production sites.

should not be cut even if business conditions worsen.

where employees can be active and shine in their own ways

SWCC’s sustainability management

Challenges to achieving Change & Growth

failure of DX depends on each employee. There are also

Sakakura SWCC is a company that manufactures

Sakakura

great expectations for digital talent placed in each workplace,products that support the foundation of social infrastructure.

growth, I believe it is necessary to review the businessstage, it will be a great strength to create a growth vision andbut it is necessary to change the mindset so that all

Therefore, sustainability is required as a company to continue

portfolio through further penetration of ROIC management

story that anticipates the needs of society, and continue toemployees feel that DX promotion is their own work rather

to provide innovative and high-quality products thatand a shift to high-profit businesses. Although SWCC offers

realize that vision, thereby increasing the number ofthan the work of others.

contribute to solving social issues. In order to achieve this,highly competitive products such as high-performance

shareholders who can be called fans of the Company overNishimura

we must become a creative technology group with creativity

magnet wires, I think it is necessary to increase the profit

the long term. I look forward to working with the Directors,

aspect is the use of digital technology to improve andand a challenge spirit that anticipate needs. In order for thismargins of these products. As part of future business

Executive Officers, and many other employees to further

streamline operations, and the other is to create new value

to happen, I would like employees to actively interact with theinvestments, I think it is necessary to consider M&A thatenhance the corporate value of SWCC, which is developing

through digital technology. As Mr. Mukuno stated, the key tooutside world and make serious efforts to increase their own

increase added value, such as expanding the scope ofbusinesses necessary for the society of the future, and toaccelerating these efforts and achieving success is to have amarket value.

business downstream, not only in Japan but also inhelp as many people as possible understand the importancestrong awareness of the importance of promoting DX among

Ichikawa I completely agree. I believe that value creation

Southeast Asia and other regions overseas.

of SWCC.

all Group employees. I would like to have as much contact

for the future cannot be achieved only within SWCC.

Mukunoas possible with the employees on the front lines and keep a

Although we have already started doing this in various ways,

share a more practical way of thinking in light of my own

close eye on how awareness of DX is spreading to each andthere are also ways to actively interact with outside parties,

experience. In many cases, the key to business in China,

every one of them.

promote open innovation, and enhance our development

Vietnam, and Southeast Asian countries is to build

capabilities through value creation.

relationships with central and local governments and major

Nishimura

local companies. In addition, it may be necessary to utilize

Since SWCC is now in the midst of a period ofchange in its group management structure, this is an evenbetter time than usual to pursue operational standardizationand efficiency by making full use of DX. The success or

third-party products and services, such as being required toresources. At SWCC, institutional reforms and investments inpropose solutions as technology packages. I believe that wehuman capital are being made in human resource

can expect significant growth if we can develop strategies

development and environmental improvement respectively.

and tactics tailored to local conditions by considering

However, we would like to contribute to improvements fromalliances with other companies and M&A, as well as

various perspectives, including system design and measuresstrengthening human resources and organizations at

to increase employee motivation so that the job challenge

overseas bases.

performance-based approach that allow employees to takeIn order for SWCC to take a leap to the next

In terms of overseas businesses, I believe I cansustainable growth is the power of SWCC’s humansystem and evaluation and treatment system incorporating a

Sakakura

Financial and Management Information

As you both have said, the source of

new challenges.

Sustainability Management

There are two aspects to corporate DX. One

In order for SWCC to achieve continuous

so that SWCC will be perceived as a company that takes on

SWCC Group’s Value Creation Story

to promotion of diversity and is making steady progress. In

difficult to predict, we must continue to reform in order toInvestment in human capital is extremely

Greetings

Sakakura Four years have passed since the full-scale start

the jobs they want become more effective.

59

60

Sustainability Management

Management Team (Introduction of Officers)
Director, Audit and Supervisory Committee Member (as of June 27, 2023)

Takayo Hasegawa

Director
Senior Executive Officer

Outside Director
Audit and Supervisory Committee Member

Outside Director
Audit and Supervisory Committee Member

Dongcheng Zhang

Takashi Mukuno

Minako Nishimura

Assistant to President

Supervising Group Management

In charge of China Business Governance
ReformIn charge of quality supervision

Career summary

Career summary

Career summary

Apr. 1984
June 2013
June 2018
Apr. 2019

Apr. 1993
June 2015
June 2017
Apr. 2019
Apr. 2021

Apr. 1981

April 1983
December 2018
June 2023

Apr. 2020

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
June 2023 Director, Senior Executive Officer of the Company (to present)

Joined Asahi Kasei Kogyo Co., Ltd.
(currently Asahi Kasei Corporation)
Aug. 2008 President, Asahi Kasei America, Inc.
Apr. 2021 Senior Executive Officer, Asahi Kasei Corporation and General
Representative for China
Apr. 2022 Advisor, Asahi Kasei Corporation (to present)
June 2023 Outside Director (Audit and Supervisory Committee Member)of the Company (to present)

Outside Director
Audit and Supervisory Committee Member

Outside Director
Audit and Supervisory Committee Member

Director
Full-time Audit and Supervisory
Committee Member

Yuji Sakakura

Seiichiro Ichikawa

Takashi Togawa

Career summary

Career summary

Apr. 1974 Joined Nissho Iwai Corporation (current Sojitz Corporation)
June 1999 President and Representative Director of Nissho Iwai
Securities Co., Ltd.
May 2006 Director and Chief Financial Officer of GCA Corporation
June 2020 Outside Director (Audit and Supervisory Committee Member)of the Company (to present)

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 the Company (to present)

Apr. 1980

Joined Tokyo Shibaura Electric Co., Ltd.
(current Toshiba Corporation)
June 2011 Director of the Company
June 2014 Executive Managing Director of the Company
June 2020 Director (Full-time Audit and Supervisory Committee Member)of the Company (to present)

Note: In each career summary, “the Company” refers to SWCC Corporation

Executive Officer (as of April 1, 2023)
Managing Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Executive Officer

Futoshi Yamaguchi

Tetsuo Komata

Yukio Kawase

Kiyoshi Otake

Nobutaka Imai

Toshiharu Kamijo

In charge of human resources, general affairs,
and shared services

In charge of Management Strategy,
Investment Strategy, IR, and Group company
management

Chief of Energy and Infrastructure Business
Segment
President and Representative Director ofShowa Furukawa Cable Co., Ltd.

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.
Chairman of FUQING SHOWA PRECISION ELECTRONICS CO., LTD.

In charge of finance, accounting, and auditing

In charge of capital strategy, sustainability,
risk management, and legal affairs

Managing Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Yoshinao Kodama

Takashi Yamamura

Kazuhiko Inoue

Nobuyuki Sema

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
In charge of Mobility Business Strategy

In charge of sales coordination and material
procurement

In charge of Smart Stream Business andElectric Power System Strategy

Financial and Management Information

61

Managing Executive Officer

Sustainability Management

Career summary

Joined Fujitsu Limited
Representative Director, Next Story Co., Ltd. (to present)
Outside Director (Audit and Supervisory Committee
Member) of the Company (to present)

SWCC Group’s Value Creation Story

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

Greetings

President and Representative Director,
Chairman of the Board of Directors
Group CEO62

Financial and Management Information

Financial Highlights

Non-financial Highlights

Net sales
2,500
2,000

1,772

2,091

1,992
1,711

1,617

■ Operating income

Operating income margin(%)

86

76

66

5.0%

5.0%

5.0%

4.7%

2020

2021

2022

There were increases in shipments due to stable demand from the domestic electric
power infrastructure and stable demand from the construction-related sector(Energy and Infrastructure Business) in Japan. Although there was a decrease in
shipments due to the impact of automobile production cutbacks, partly due to theimpact of rising copper prices, net sales increased 5.0% year on year.

(Persons)

6,000

2018

2019

2020

2021

2022

5,461

5,000

5,356

2,097

4,000

0

New recruits (%)(Persons)

55

56

60

5,127

2,009

4,723
1,889
1,625

4,979

1,943

3,364
2018

3,347
2019

50

3,090

3,184
2020

2021

3,098
2022

49

44

40

19%

17%

36

19%

30
20

1,000

0

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

12

10
0

2018

7%

11

13

2019

2020

2021

2022

We are steadily recruiting female career-track positions every year, both as new
graduates and as career hires, and working to retain them , and through the careerdevelopment support and awareness-raising activities for female employees
conducted by SWCCarat, we are striving to create an environment that enables
diverse work styles and to further recruit and retain female employees.

Scope of data: The former SWCC Showa Holdings Co., Ltd. and its consolidated subsidiaries

Scope of data: The former SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable
Systems Co., Ltd.

Net income attributable to owners of parent/ROE

Invested capital/ROIC

Number of non-Japanese employees (domestic)

Percentage of annual paid leave taken■ Net income attributable to owners of parent■ Invested capitalROE (%)(100 million yen)

1,000

94

94

100
80
60
40

55

46
13.5%

14.7%

20
0

2018

50

2019

17.7%

15.0%

11.4%
2020

850

7.6%

7.3%

1,031
7.1%

6.3%

950
900

(100 million yen)

ROIC(%)

914

5.6%
817

2021

2022

817

1,500
1,200
900

1,242

1,225

28.1%

600
300
0

349

1,295

32.3%

36.7%

396

476

1,474

1,567

2018

2019

2020

2021

583

43.1%
675

2022

2019

2020

2022

2018

2019

63.2%

68.0%

60.0
50.0
40.0
30.0
20.0
10.0

2018

2019

2020

2021

0

2022

2020

2021

2022

Scope of data: The former SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable
Systems Co., Ltd.

Research and development expenses/Capital expenditure

Greenhouse gas emissions

Industrial waste landfill rate

■ Research and development expenses ■ Capital expenditure(CO2 emissions at our main manufacturing bases in Japan ■Scope1 + ■Scope2） (Thousand ton-CO2)(100 million yen)

80

80.0

70

50

42

40

43

40

64.5

60.0

29

30

0

70.0

63

58.6

50.0

11

13

14

2018

2019

2020

2021

14
2022

Research and development expenses decreased slightly compared to
FY2021. Capital expenditure decreased significantly compared to FY2021,
due in part to the stabilization of domestic and overseas manufacturing
capital expenditure despite the continued strengthening of the manufacturing
infrastructure through the restructuring of domestic business sites.
Scope of data: The former SWCC Showa Holdings Co., Ltd. and its consolidated subsidiaries

2.33%

2.5

51.1

45.5

45.5

40.0

2.0
1.5

30.0

13

(%)

3.0

1.52%

1.33%

1.0

0.48%

20.0
0.5

10.0
0

2018

2019

2020

2021

2022

In FY2022, energy consumption per unit of energy decreased due tobusiness restructuring, renewable energy adoption, and the deepeningof energy conservation, but emissions were equal to FY2021 levels due
to an increase in production volume.
Scope of data: Major production sites of domestic Group companies

0

2018

2019

2020

2021

0.39%
2022

The industrial waste landfill rate for FY2022 improved 0.39% over
FY2021 due to the promotion of waste plastic recycling. The amount oflandfill waste will be reduced by 75% from the FY2018 level, achieving
the target for FY2025. Although an increase in waste is expected in
FY2023 due to increased production and restructuring, we set a newtarget for FY2023 for an 80% reduction compared to FY2018.
Scope of data: Major production sites of domestic Group companies

Financial
Overview

FY2022 Financial Results—Key Points

The Group’s net sales for the current fiscal year were 209.111 billion yen (up 5.0% compared with FY2021). Although there were decreases inshipments due to the impact of reduced automobile production, there were increases in shipments due to stable demand from the domestic
electric power infrastructure and stable demand from the construction-related sector in Japan. Operating income was 10.474 billion yen (up4.3% compared with FY2021) and net income attributable to owners of parent was 9.41 billion yen (up 0.6% compared with FY2021) partly due
to the effect of improving earnings from the integration of manufacturing and sales of joint ventures.
Total net assets on a consolidated basis were 156.65 billion yen, an increase of 9.293 billion yen from the end of the previous fiscal year.
Current assets increased 3.338 billion yen mainly due to an increase in inventories, and fixed assets increased 5.955 billion yen mainly due to anincrease in investment securities. Total liabilities decreased 163 million yen from the end of the previous fiscal year to 88.26 billion yen. Current

liabilities decreased 1.299 billion yen mainly due to a decrease in notes and accounts payable-trade, while non-current liabilities increased 1.135
billion yen mainly due to an increase in deferred tax liabilities. Total net assets were 68.39 billion yen, an increase of 9.457 billion yen from theend of the previous fiscal year. This was mainly due to recording net income attributable to owners of parent of 9.41 billion yen.
Cash and cash equivalents on a consolidated basis increased 679 million yen from the end of the previous fiscal year to 3.958 billion yen at
the end of the current fiscal year. As in the previous fiscal year, loans payable increased due to an increase in working capital due to a surge inraw material prices. However, cash flows generated from operating activities (4.163 billion yen) and proceeds from sales of property, plant andequipment were allocated to investments for the future maintenance and growth of the business scope (4.931 billion yen for the acquisition of
fixed assets) and dividends to shareholders (1.492 billion yen).

Financial and Management Information

Total assets increased mainly due to an increase in inventories causedby the impact of soaring copper prices, and an increase in fixed assets
due to the return from the retirement benefit trust. Although we paid
dividends to our shareholders, we recorded a net income of 9.4 billion
yen, resulting in an increase in shareholders’ equity and a shareholders’equity ratio of 43.1%.

67.7%

Scope of data: The former SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable
Systems Co., Ltd.

20

2021

0

70.0

73.2%

The percentage of employees taking paid leave, which decreased due to the COVID-19
pandemic, improved as the COVID-19 pandemic subsided, and in FY2022, thepercentage of employees taking paid leave recovered to a level higher than the
pre-COVID-19 level. In the future, we will set a target of 75% or higher as one of ourhealth KPIs and aim to further increase the rate of acquisition through regular monitoring.

10

2018

29

70.0%

We are actively recruiting foreign employees to incorporate diverse perspectives
and values such as culture, religion, and language into our Company. In order tofurther strengthen the Group’s new overseas business development, which is set
forth in the medium-term management plan, we will make every effort to recruit
excellent foreign talent.

60

39.5%

27

(%)

80.0

Sustainability Management

1,800

25

26

5

Total assets/Shareholders’ equity/Shareholders’ equity ratio(100 million yen)

25

26

10

As previously noted, despite an increase in operating income, ROIC
decreased by 0.6 points from FY2021 due to a large increase in invested
capital, including an increase in working capital due to soaring copper
prices and investments such as expansion of domestic manufacturing
facilities.

Shareholders’ equity ratio (%)

30

15

836

In the current consolidated fiscal year, net income attributable to ownersof the parent increased slightly from FY2021 as a result of theaforementioned increase in operating income as well as a gain on the
return from the retirement benefit trust despite the recording of asettlement payment and R-PJ based business structure improvement
expenses.

■ Total assets ■ Shareholders’ equity

35

20

800
750

(Persons)

SWCC Group’s Value Creation Story

Compared with the previous fiscal year, the number of employees of the Groupremained flat in Japan and decreased overseas due to a combination of factors,
such as improved productivity at some manufacturing sites and a decrease inorders received. We will continue to strive to maintain an appropriate number of
employees for the sustainable growth of the Group.

Scope of data: The former SWCC Showa Holdings Co., Ltd. and its consolidated subsidiaries

In addition to stable demand for domestic power infrastructure, the domestic
construction-related industry (Energy and Infrastructure Business) saw
improved earnings and stable demand due to the integration of
manufacturing and sales of joint ventures, and operating income increased
4.3% over FY2021, despite the impact of reduced automobile production on
earnings (Electrical Equipment and Components Business) and other factors.

120

63

15%

21

17

Greetings

2019

Number of female employees■ Overseas

7,000

2,000

20

2018

■ Domestic

3,000

3.8%

40

500

105

100

100

60
1,000

(100 million yen)

120

80

1,500

0

Number of employees

Operating income/Operating income margin(100 million yen)64

Financial and Management Information

Key Financial Data for the Past 11 Years
FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Net sales

169,798

183,289

181,693

169,712155,232

168,186

177,174

171,142

161,697

199,194

209,111Gross profit

18,503

19,561

18,161

17,72820,09921,646

21,71823,73321,75925,35725,804

Selling, general and administrative expenses(17,376)(17,009)(16,925)(16,778)(15,865)(15,370)(15,077)(15,123)(14,168)(15,318)(15,329)

1,126

2,552

1,236

949

4,234

6,276

6,640

8,609

7,590

10,03910,474

(363)

(520)

Fiscal Year
Consolidated Results of Operations (millions of yen)

(1,090)(1,060)

(965)

(852)

(841)

(805)

(669)

(184)

(271)

(208)

(644)

(83)

(415)

(476)

(2)

248

484

263

44

11

260

(304)

(202)

36

(75)

(36)

19

37

(138)

(847)

1,236

384

(1,461)

2,446

4,892

5,603

7,864

7,765

9,882

10,393

Net income attributable to owners of parent(6,365)195

228(9,151)

1,976

3,737

4,569

5,465

4,966

9,353

9,410

Comprehensive Income(5,866)

1,600

3,213

(11,195)

2,938

5,722

2,314

4,584

8,628

11,332

10,782

Depreciation

3,169

2,947

3,489

3,699

2,928

2,877

3,011

3,099

3,183

3,345

3,497

Capital expenditure

3,812

4,460

4,998

3,983

3,244

3,391

2,944

4,186

3,969

6,303

4,282

Research and development expenses

1,247

1,097

1,238

1,045

927

1,046

1,119

1,255

1,276

1,414

1,378

Cash flows from operating activities

5,385(1,208)

5,624

4,545

7,842

6,804

6,901

8,696

8,882

428

4,163

Cash flows from investing activities(3,913)(4,567)(2,027)(3,846)(2,218)(4,051)(3,552)(4,144)(3,358)(1,519)(3,547)

Cash flows from financing activities

(718)

4,734

(3,493)(2,289)(6,506)(3,295)(2,970)(4,879)(5,661)

64(85)

Cash and cash equivalents at end of year

8,223

7,604

7,968

6,282

5,192

4,603

4,721

4,225

4,086

3,279

3,958

Total assets

136,890

140,371

138,023

123,069

119,528

123,518

124,165

122,521

129,460

147,356

156,650

Total net assets

35,34933,57836,921

25,72428,65533,47735,62839,981

48,16958,932

68,390Interest-bearing debt

57,177

62,10558,96357,482

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

41,177

Shareholders’ equity

35,05733,281

36,61625,371

28,15032,85734,94339,57647,56858,27367,505

Net income(206.55)

6.33

7.43

(296.98)64.14

123.93153.22

183.27166.49313.43315.01

Total net assets

1,137.62

1,080.04

1,188.29

823.37913.601,101.71

1,171.66

1,327.04

1,594.63

1,952.73

2,259.11

Dividend

0.00

0.00

0.00

0.00

0.00

5.00

7.00

15.00

20.00

50.00

60.00

Dividend payout ratio (consolidated basis)

-

-

-

-

-

4.0%

4.6%

8.2%

12.0%

16.0%

19.1%

Operating income margin

0.7%

1.4%

0.7%

0.6%

2.7%

3.7%

3.8%

5.0%

4.7%

5.0%

5.0%

ROA (Return on assets)

−0.6%

0.9%

0.3%

−1.1%

2.0%

4.0%

4.5%

6.4%

6.2%

7.1%

6.8%

ROE (Return on Equity)−16.8%

0.6%

0.7%−29.5%

7.4%

12.3%

13.5%

14.7%

11.4%

17.7%

15.0%

Shareholders’ equity ratio

25.6%

23.7%

26.5%

20.6%

23.6%

26.6%

28.1%

32.3%

36.7%

39.5%

43.1%

DE ratio

163%

187%

161%

227%

183%

149%

134%

107%

79%

67%

61%

Overseas sales ratio

12.2%

13.2%

13.4%

11.2%

11.5%

11.8%

9.7%

8.2%

9.2%

9.2%

9.9%

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

Information on Consolidated Cash Flows (millions of yen)

SWCC Group’s Value Creation Story(1,042)(398)

Greetings

Operating income

Consolidated Financial Position (millions of yen)

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 FY2012.

65

Financial and Management Information

Key Financial Indicators (consolidated basis)

Sustainability Management

Per Share Information (consolidated basis) (yen)

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 FY2018.
Figures for fiscal 2017 are ones after this accounting standard has been applied retrospectively.

66

Financial and Management Information

Consolidated Financial Statements
Consolidated Balance Sheet(Millions of yen)

FY2021(Millions of yen)

FY2022

FY2021ASSETSLIABILITIESCurrent assets:

Current liabilities:
3,357

4,037

Trade notes and accounts payable 26,674

Notes receivable - trade

11,79010,361

Current portion of bonds payable

Accounts receivable - trade

39,696

41,524Contract assets

1,245

800

Merchandise and finished goods

11,665Work in process
Raw materials and supplies
Other

Total current assets

60

60

Short-term debt

26,18928,549Other accounts payable

10,187

9,337

13,139Accrued income taxes

1,929

913

8,360

8,645

Provision for loss on construction contracts

68

110

6,021

6,377

Contract liabilities

1

33

6,569

7,158

Provision for business structure improvement expenses

232

10

(12)

(12)

Provision for product repair costs

190－

88,69392,032

4,805

5,166

Fixed assets:

Total current liabilities

69,040

9,272

9,422

Bonds payable

9030

Machinery, equipment and tools (net)

7,237

7,900

Long-term debt

Tools, furniture and fixtures (net)

1,090

1,228

Deferred tax liabilities

Land

22,382

22,155

Deferred tax liabilities related to land revaluation 4,155

1,445

1,026

Net defined benefit liability

791

940

Total property, plant and equipment 41,428

41,733

Other

976

706

Other

Intangible assets

1,340

1,488

Investments and other assets:

12,011

11,885

59

1,495
4,161

Total long-term liabilities

18,084

19,220Total liabilities

88,42488,2607,790

16,297

Deferred tax assets

740

529

Shareholders’ equity:

Net defined benefit asset

6,193

3,441

Common stock

24,221

24,221

Other

2,032

2,049

Capital surplus

5,704

5,887

Allowance for doubtful accounts

(863)

(922)

Retained earnings

18,321

26,239Total investments and other assets: 15,893

21,395

Treasury stock

(900)

(865)

58,66264,618

Total shareholders’ equity

47,34755,483

147,356

156,650

Total assets

NET ASSETS

FY2022

209,111
183,30725,804
15,32910,474
122
173
263
－
454
1,014
520
138
131
49
256
1,094
10,393
2,644
782
211
3,638
485
374
244
67
67
36
1,275
12,756
1,559
1,513
3,072
9,684
273
9,410

Unrealized holding gains on other securities

1,518

6,850

6,845

Foreign currency translation adjustments 2,226

3,077

1,114

580

Total accumulated other comprehensive income 10,926

12,021Remeasurements of defined benefit plans

658

885

Total net assets

58,932

68,390Total liabilities and net assets

147,356

156,650

Non-controlling interests

FY2022

Income before income taxes and non-controlling interests 11,312
3,345
Depreciation and amortization

12,756
3,497
244
(211)
58
41
(190)
102
(295)
520
171
374
485
67
67
(2,644)
(782)
(263)
45
(1,905)(1,340)80(637)(1,398)
8,846
497
(522)
(728)
(485)
(3,443)
4,163

Loss (gain) on sales of investment securities－(41)

Increase (decrease) in allowance for doubtful accounts

728

Loss on impairment of fixed assets

Increase (decrease) in reserve for construction loss

(0)

Increase (decrease) in provision for product repair costs(99)

Consolidated Statement of Comprehensive Income (Millions of yen)
FY2021
Net income
9,461
Other comprehensive income:93
Unrealized holding gains on other securities
1
Variance of land revaluation
725
Foreign currency translation adjustments
566
Remeasurements of defined benefit plans
484
Share of other comprehensive income of affiliates in equity method
1,871
Total other comprehensive income
Comprehensive income
11,332Comprehensive income attributable to
Owners of parent
11,221
Non-controlling interests
111

59

Increase (decrease) in provision for net defined benefit liability
Interest and dividend income(175)

Interest expense

363

Foreign exchange (gain) loss

278

Business structure improvement expenses

879－

Settlement payments
Loss on termination of retirement benefit plans－－

Loss (gain) on sales of investment securities－
Loss (gain) on sales of fixed assets (2,266)(484)
Equity in loss (earnings) on equity-method
Gain on return of retirement benefit trust

Decrease (increase) in trade receivables(8,853)

Decrease (increase) in inventories(4,899)

Increase (decrease) in trade payables

3,860

Decrease (increase) in other current assets(731)

Increase (decrease) in other current liabilities

(459)

Other

(496)

Sub-total

2,315Interest and dividends received

239

Interest paid

(366)

Business structure improvement expenses paid
Settlement payments(453)

Income taxes paid－
(1,306)428

Cash flows from operating activities
Cash flows from investing activities

Payments for purchase of investment securities (254)118
Proceeds from sales of investment securities
Payments for purchase of property, plant and equipment (4,565)
Proceeds from sales of property, plant and equipment 3,495
Payments for purchase of intangible assets (302)(Increase) decrease in short-term loans receivable (12)1
(1,519)Cash flows from financing activities

FY2022

Increase (decrease) in short-term bank borrowings

1,375

9,684

Proceeds from long-term debt

6,523

Repayment of long-term debt

(6,805)

783
(5)
613
(534)
240
1,098
10,782

Redemption of bonds(60)

Purchase of treasury stocks(1)

Income from payments from non-controlling interests
Cash dividends paid
Other
Cash flows from financing activities

－
(596)
(370)
64

Effect of exchange rate changes on cash and cash equivalents 219
Net increase (decrease) in cash and cash equivalents (807)

10,505
276

(111)
222
(4,487)
1,284
(443)
(32)
20
(3,547)

Cash and cash equivalents at beginning of year

4,086

Cash and cash equivalents at end of year

3,279

1,721
6,550
(6,619)
(60)
(3)
128
(1,492)
(309)
(85)
149
679
3,279
3,958

Financial and Management Information

Variance of land revaluation

735

FY2021
Cash flows from operating activities

Other
Cash flows from investing activities

Accumulated other comprehensive income:(Millions of yen)

Sustainability Management

Investment securities

Total fixed assets

67

70,339Long-term liabilities:

Property, plant and equipment
Buildings and structures (net)

Other

FY2021
Net sales
199,194
Cost of sales
173,837
Gross profit
25,357
Selling, general and administrative expenses
15,318Operating income
10,039Other income:98
Interest income
77
Dividend income
Equity in gain of affiliates
484
37
Foreign exchange gain
269
Other
967
Total other income
Other expenses:
363
Interest expense
Foreign exchange loss－
162
Loss on disposal of fixed assets
179
Loss on settlement of derivatives
418
Other
1,123
Total other expenses
Ordinary income
9,882
Extraordinary income:Gain on return of retirement benefit trust－
2,266
Gain on sales of fixed assets
41
Gain on sales of investment securities
2,308
Total extraordinary income
Extraordinary losses:
Settlement payments－
879
Business structure improvement expenses
Loss on impairment of fixed assets－
Loss on termination of retirement benefit plans－
Loss on evaluation of investment securities－
Merger related expenses－
879
Total extraordinary losses
Income before income taxes and non-controlling interests 11,312
Income taxes - current
2,707
Income taxes - deferred(857)
Total income taxes
1,850
Net income
9,461
Net income attributable to non-controlling interests
108
Net income attributable to owners of parent
9,353

Consolidated Statement of Cash Flows

SWCC Group’s Value Creation Story

Allowance for doubtful accounts

24,858(Millions of yen)

Greetings

Cash and time deposits

FY2022

Consolidated Statement of Operations

68

Financial and Management Information

Share and Investor Information (as of March 31, 2023)

Company Profile (as of April 1, 2023)

Status of Stock

Company Profile

Principal Shareholders (Top 10)

Total Number of Authorized Shares
70,000,000 shares
Total Number of Issued Shares
Number of Shareholders

Corporate Name

SWCC Corporation

Date of Establishment

May 26, 1936

Common stock

24,221 million yen

6,680

22.3

Custody Bank of Japan, Ltd. (Trust Account)

4,065

13.6

BNP PARIBAS LUXEMBOURG/2S/JASDEC/FIM/
LUXEMBOURG FUNDS/UCITS ASSETS

Head Office

JMF-Bldg. Kawasaki 01, 1-14, Nissin-cho, Kawasaki-ku, Kawasaki-City, Kanagawa 210-0024, Japan

1,230

4.1

Number of Employees

4,201

JX Nippon Mining & Metals Corporation

979

3.2

Stock Exchange Listing Tokyo Stock Exchange, Inc. (TSE Prime Market) “SWCC (5805.T)”

Fukoku Mutual Life Insurance Company

892

2.9

Lines of Business

JPMorgan Securities Japan Co., Ltd.

608

2.0

Manufacture and sale of Wires and cables, power equipment components, flat magnet wires, opticalfiber cables, rollers for information equipment, seismic isolation and vibration damping materials,
vibration damping rubber, etc.

GOLDMAN SACHS INTERNATIONAL

519

1.7

End of Fiscal Year

March 31, every year

THE BANK OF NEW YORK MELLON 140044

510

1.7

Custody Bank of Japan, Ltd. (Trust Account B)

401

1.3

JP MORGAN CHASE BANK 380646

315

1.0

12,789* Besides the above, there are 945,577 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 ofissued shares.

Distribution of Shares by Type of Ownership
Distribution of Shareholders by Number of Shares HeldDistribution of Shares

Total

30,826,861 shares

12,789Domestic●

SFCC Corporation●

FUJI ELECTRIC CABLE CO., LTD.

●

AXIO Corporation●

SDS Corporation●

LOGIS-WORKS CO., LTD.

●SHOUKOU EQUIPMENT INDUSTRY CO., LTD.

●SHOWA SCIENCE CO., LTD.

●STEC (SHOWA TECHNICAL CORPORATION)

Production Sites in Japan
Sendai Plant(SWCC, FUJI ELECTRIC CABLE CO., LTD.)

Sagamihara Plant(SWCC)
Kofu Factory

Yamamoto Factory (SWCC)(FUJI ELECTRIC CABLE CO., LTD.)

Ibaraki Factory (SFCC)

Aichi Factory(SWCC)

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

Overseas

Mie Plant(SWCC, SFCC)■ Individuals and others

20%■ Less than 100 shares 16%■ Foreign investors

28%■ 100 shares or more

62%●

SWCC SHOWA (SHANGHAI) CO., LTD.

●

SWCC SHOWA (VIETNAM) CO., LTD.

●JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD.

●DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD.

Overseas Production Sites

42%■ 500 shares or more

■ Other companies in Japan7%■ 1,000 shares or more 10%●

FUQING SHOWA PRECISION ELECTRONICS CO., LTD.

■ 5,000 shares or more●

SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD.

●

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

●

FUTONG-SHOWA ELECTRIC WIRE & CABLE (TIANJIN) CO., LTD.

JiaxingHangzhou●

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

Fuqing●HUA HO ENGINEERING CO., LTD.

2%

(yen)

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

TianjinDongguanHanoi CitySHOWA-TBEA (SHANDONG)CABLE ACCESSORIES CO., LTD.

Shandong

Hong
Kong
Hung Yen Province

JIAXING SHOWA INTERCONNECT
PRODUCTS CO., LTD.
Shanghai

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

SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD.

March 2021

September 2021

March 2022

September 2022

March 2023

Financial and Management Information

3%

10%

Stock Price Movements

69

SWCC SHOWA (H.K.) CO., LTD.

■ Financial institutions■ Securities companies

0●

Sustainability Management

Total

Principal Group Companies (as of April 1, 2023)

SWCC Group’s Value Creation Story

The Master Trust Bank of Japan, Ltd. (Trust Account)

Greetings

30,826,861 shares

Number of shares held Percentage ofshareholding (%)(Thousand shares)

Name of shareholders

SWCC SHOWA (VIETNAM) CO.,LTD.

70