信 頼 と 限 り な き 挑 戦

Mid-Term Management Plan

Challenge 2024

Rolling Plan 2023
May 15, 2023
Carlit Holdings, Inc.
1

Review of Business Environment: Changes in the Environment

信 頼 と 限 り な き 挑 戦◆ Changes in the external environment that occurred from 2022 to dateSocial and Economic
Environment

Requests for Listed
Companies✓ Prolonged impact on domestic and international economic activity
by COVID-19 Variants✓ Destabilization of the global situation due to prolonged Russian
invasion of Ukraine✓ Requests to improve return on Capital and Market Valuation for thepurpose of increasing PBR✓ Efforts for achieving SDGs by 2030 and advancing ESG Management• The severe Environmental Changes both domestically and internationally
had a Significant Impact on our Business→However, no change in our goal to “become a strong Carlit Group”……..by strengthening our foundation.
2

Concepts and Efforts for Improving ROE

信 頼 と 限 り な き 挑 戦◆ Improving ROE is the starting point and crucial to enhance PBR◆ Systematic implementation of specific actions based on a medium- to long-term value creation story
DuPont Analysis

DriverReturn on salesNet income
Sales

ROE
Net income
Net worth

Total
asset turnover
Sales
Total assets

Financial leverage
Total assets
Net worth

EPS upItems to be considered

Specific Efforts

Profitability improvement
and cost reduction

Operating income ratio up
more than 3%

Growth investments

Off-balance
sheet

Expansion ofshareholder
returns

Realizationof latent profit
Sale of cross-held shares
Practical use of cash
Dividend increase

Administrative integration
Business process review andDX promotion

Establishment of
retirement benefits trust
Reorganization andintegration of subsidiaries

M＆A
Sale of the real estate withunrealized profit
3

Concepts and Efforts for Improving PER

信 頼 と 限 り な き 挑 戦◆ Improving PER, the expected value of profit growth, is also important to enhance PBR◆ The key for improving PER is to reduce the cost of capital through both financial and non-financial efforts, inaddition to formulating and implementing growth strategies
Driverelements
Items for Consideration
Specific Efforts

Optimal capitalstructure
Capital costPER
１ｒ -ｇ（ｒ）

growth rate（ｇ）

Review of the capital anddebt structure
Review of thegrowth strategy
Business Portfolio
Management

Fostering
growthexpectations
Non-FinancialStrategies(ESG)

Ｅ(natural capital,Rolling Mid-Term Management plan
Improvement of unprofitable businesses
through thorough price increases
Intellectual capital investment(Reinforcement R&D bases) and expansion ofproduction facilities(Plant innovation)

decarbonization, biodiversity)

M&A, subsidiary integration

Ｓ(human, intellectual andsocial resources)

Enhancement of development
for sustainable productsＧ(Governance enhancement)

Human capital investment andpersonnel system reform

Strategical response
based on each items

Strengthen IR/SR strategy

Quick decision-making through theintegration of administrative divisions

IR by targeting segment

4Positioning of FY22-23 towards Vision for 2030

信 頼 と 限 り な き 挑 戦◆ Updated ROE targets in the roadmap～ 2021
Roadmap for Operating Incomeand ROE towards 2030

2022 ～ 2024

～ 2027

Mid-Term Management Plan

Stage2
Investment
Promotion

Challenge2024

Stage1 : Strengthen the foundation

6,000

・ Renewal of facilities in the existing businesses → Establishment of a stable profit structure

5,000・ Profit Improvement Implementation → Implement business portfolio management

4,000Stage3

Harvest and Take offROE 12%～

ROE 10%～Aiming to become a "strong" Carlit Group by reforming and growing our business

2,506

3,000

2,000

～ 2030

2,640

2,700

3,000

1,574

ROE 10%
ROE 8%

1,000

ROE 7%02020

2021

2022

2023

2024

2030

5

信 頼 と 限 り な き 挑 戦

The 3% is divided into 3 parts.
◆ Aiming for Carlit Group operating income ratio from 7% to 10%
Group Management Policy for FY2023

Realization of operating margin of 3% or more through "Reform and Growth"to achieve the mid-term management plan "Challenge 2024 "✓ Update theme 1✓ Update theme 2Acceleration of Value Creation

Advancement of ESG management

Stabilizing earnings andimproving profitability

Improvement of humancapital management

Promotion of non-core
asset liquidation

Investment in focus anddevelop areas+1%

shareholder return＋1％

Efforts to decarbonize

Human capital investment(return to employees)＋1％

In the Rolling Plan 2023, The increased 3% profit will be provided in 3 equal parts6

信頼と限りなき挑戦
Earning Trust and Tackling Countless Challenges

無限の可能性をカタチにGiving Shape to Infinite Possibilities
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