MEDIUM-TERM MANAGEMENT PLAN 2024
UPDATEMay 13, 2022
Meidensha Corporation
Copyright © MEIDENSHA CORPORATION All Rights Reserved.

Table of Contents
1. Medium-term Management Plan 2024
2. Business Strategy Update
3. Promoting Sustainability Management andManagement Ambidexterity
4. Numerical Milestones
5. Cash Flow Allocation
2/14

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

1. Medium-term Management Plan 2024 (1) Vision and Ideal State of Being – Overview –Idealsociety
Vision and Ideal
State of Being• A resilient society where humans live in harmonywith nature• A society that feels safe, prosperous, and exciting• A society where different communities and people
can coexist

Method ofprovision

Managementfoundation/Corporateculture

3/14

ClimatechangeDigitalization
Diversification

Meidensha’s DNA+Honesty, responsibility, social
contribution

DNA that must not be lost

Innovative spirit, independenceWork to build a new society through honesty to the earth, society, andpeople, and through the power of co-creation

Sustainability partner

Value
proposition
Focus areas
toword theideal society

Hypotheticalsocial changes

We will continuously improve our corporate value by solving social issues ahead of others!

Carbon neutrality & wellbeing
RenewableenergySustainableinfrastructure

Solutions and design

Managementfoundation
Corporateculture

Equipment sales
MaintenanceservicesGreen mobility
DX

Smart industry
System sales
Maintenance andmanagement• High transparency and fairness of corporate management• Quality-driven business promotion• Evaluation axis updates (financial and non-financial, priority on short-,medium-, and long-term balance)• Future-oriented, and co-creation approach• A workplace in which diverse personnel can flourish• A vibrant workplace cultureCopyright © MEIDENSHA CORPORATION All Rights Reserved.

ImportantValues
Sustainability

Diversification

Integrity andresponsibility

Future-oriented1. Medium-term Management Plan 2024 (2) Review of the First Year
◆ We devised and started a specigic strategy to achieve the goal.
◆ We face the risk of scheduling delays due to covid-19 and rising material prices,
but we strive to minimize these.
Main achievements● Organization of overseas locations⇒ Acquired Vietstar Meiden, examined review ofoverseas locations● Manufacturing reinforcement

Businessstrategy⇒ Built EV mass-production system (full-scale
production in China to begin in October)

4/14● Expansion of growth businesses andreinforcement of earnings power⇒ Delayed progress in overseas Power T&D business,
mainly in India and Vietnam, due to impacts from thepandemic⇒ Delayed progress in new ozone business● Maintenance and improvement of earnings
base● Stagnation in the Mobility & Electrical
Components business and Railways business● Development of renewable energy business● Response to soaring raw material prices andprolonged component delivery times⇒ Achieved steady growth in domestic
infrastructure business and the electronicequipment business⇒ Replaced Hachiryu Wind Power Station andnewly developed and promoted small- andmedium-sized hydroelectric power plants

Sustainabilitymanagement

Main issues●Actualization of measures andestablishment of targets⇒ GHG* reductions and diversity, etc.

●Organization of foundation for innovation⇒ Organized innovation processes*Greenhouse gases⇒ Sudden changes in industry itself particularly in Mobility
T&S business⇒ Review supply chain⇒ Respond to needs for greater production efficiency andreduced costs●Dialog with employees and measures to furtherunderstanding⇒ Roll out full-scale activities from FY2022 onwards

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

2. Business Strategy Update (1) Changes in Business Environment and Impact on Financial Targets
 The core revenue business has revised its FY2012 target upward.
 On the other hand, the mobility T & S and the railway business, whose market environment
has changed significantly, have been revised downward.
ItemBusinessstrategy

Favorable
semiconductor
market conditions

Improved results inElectronics Products
businesses
Improved share ofField ServiceEngineering business

Stronginfrastructure
demandImproved results inWater Infrastructure
and membranebusinesses

Financial targets revised upwards in line with FY2021
achievements, received order for water membrane project inSingapore, etc.

Decline in customer
investments, risingcommodity prices

Review sales and profitability in Railways, Social Infrastructure
Systems, and Motor Drive Solution businesses
Review strategy progress for new businesses, etc.

Delayed strategy
implementation for overseas
Power T&D business

Strengthen orders in each location, examine reorganization ofoverseas locations

Major slowdown inMobility T&S business

Revise sales forecast downwards. Introduce fixed cost
countermeasures (personnel reshuffling) and business structuralreforms to counter low factory operations rates

Spread ofCOVID-19;
Geopolitical risks
Once-in-acentury mobility
revolution

5/14

Details of update

ImpactAccelerate business expansion initiatives for North American
marketIncreased demand for domestic manufacturers
Expand maintenance stock for semiconductor equipment, etc.

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

2. Business Strategy Update (2) Business Groups
Power Infrastructure
Business Group

Quantitative targets FY2024

Vision for 2030
Become a sustainability partner that offers
stable electric power supplies and arenewable energy business

Orders¥59.5 billion

Net sales¥57.5 billion(2021 result: ¥55.8 billion; 2022 forecast: ¥55.0 billion;
previous announcement: ¥58.0 billion)(2021 result: ¥52.3 billion; 2022 forecast: ¥55.5 billion;
previous announcement: ¥55.5 billion)

Operating income¥1.3 billion(2021 result: -¥1.8 billion; 2022 forecast: -¥800.0 million;
previous announcement: ¥2.0 billion)

Major strategies

 Reinforce manufacturing capabilities for electric power products, expand into newrenewable energy-related product areas Accelerate roll out of domestic renewable energy business (wind power and small- andmedium-sized hydroelectric power) Improve earnings power of key overseas locations (India, Vietnam, US, and Germany),
partially reorganize locations in ASEAN and China
 Improve added value through reinforcement of services (advanced maintenance using
ICT, promotion of O&M business)

6/14

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

2. Business Strategy Update (2) Business Groups
Public, Industrial & Commercial
Sector Business Group

Quantitative targets FY2024

Vision for 2030
Value integrity and responsibility, andcontinuously support social infrastructure
through people, technology, anddigitalization

Orders

¥95.0 billion

Net sales¥94.6 billion(2021 result: ¥95.5 billion; 2022 forecast: ¥83.5 billion;
previous announcement: ¥95.8 billion)(2021 result: ¥94.7 billion; 2022 forecast: ¥87.4 billion;
previous announcement: ¥92.8 billion)

Operating income¥6.1 billion(2021 result: ¥6.1 billion; 2022 forecast: ¥4.0 billion;
previous announcement: ¥5.6 billion)

Major strategies

 Provide solutions and designs to water suppliers and sewage treatment operators
through Water Cloud Computing Service
 Ensure efficient use of management resources and promote public-private
partnerships
 Provide environmentally friendly products and services (water and sewage,railway) Reinforce management of overseas plants and large-scale railway projects

7/14

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

2. Business Strategy Update (2) Business Groups
Field Service Engineering Business
Unit Group

Vision for 2030
Achieve innovation in maintenance throughDX, and contribute to the maintenance ofsafe, secure social infrastructure throughnew solutions and enhanced experiential
value for customers

Quantitative targets FY2024
Orders¥42.0 billion

Net sales¥41.6 billion(2021 result: ¥41.8 billion; 2022 forecast: ¥41.0 billion;
previous announcement: ¥42.0 billion)(2021 result: ¥39.5 billion; 2022 forecast: ¥41.6 billion;
previous announcement: ¥41.0 billion)

Operating income¥6.0 billion(2021 result: ¥5.9 billion; 2022 forecast: ¥6.0 billion;
previous announcement: ¥6.0 billion)

Major strategies

 Further expand one-stop services Expand range of solutions services that prioritize energy-saving and reduced
GHG emissions
 Expand service business for semiconductor manufacturing equipment (orderstarget for FY2024: ¥3.2 billion)

 Quickly develop fully capable engineers (plan for an annual increase of 30engineers, provide locally rooted services, etc.)

8/14

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

2. Business Strategy Update (2) Business Groups
Mobility & Electrical Components
Business Group

Vision for 2030
Achieve an electrification- anddigitalization-driven carbon neutral society
through change-resistant manufacturing
capabilities, and contribute to the spreadof green mobility

Quantitative targets FY2024Orders¥97.0 billion

Net sales¥96.0 billion(2021 result: ¥65.3 billion; 2022 forecast: ¥88.0 billion;
previous announcement: ¥100.0 billion)(2021 result: ¥63.8 billion; 2022 forecast: ¥86.1 billion;
previous announcement: ¥100.0 billion)

Operating income¥7.1 billion(2021 result: -¥200.0 million; 2022 forecast: ¥3.6 billion;
previous announcement: ¥8.1 billion)

Major strategies Electric Motor Solutions: Promote energy-saving and higher efficiency solutions,and proceed with partnership strategies
 Mobility T&S: Propose testing equipment for EVs and reinforce maintenanceservices Electronic Equipment: Retain customers through the provision of products suited
to market needs

9/14

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

2. Business Strategy Update (2) Business Groups
We are struggling with the progress of OEM sales and production, but we will rebuild thesystem to recover from the progress delay and secure sales.
Key initiatives for the EV business Secure nominations: Incorporate load from FY2025 onwards, develop new products for the future Improve and reinforce production capacity: Organize production capacity in China
 Develop new markets and acquire new customers: Develop new markets and acquire new customers toensure stable acquisition of load
<Meiden Hangzhou Drive Technology Co., Ltd.><Historical net sales>
1,000

500

0

Secured more than 90% of nominations inFY2023 and FY2024
Medium-termManagement Plan 2024

Results

1,000（1,000）

500
430 450 470
・・・
（500）
（374）
（385）
（459）

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25FY28*Numbers in brackets are those announced in May 2021

10/14

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

2. Business Strategy Update (3) Overseas BusinessAt the core of offense-minded business strategies are growth strategies.
Defense-minded strategies involve the rebuilding of overseas locations from a
medium- to long-term perspective.
Offense-minded business strategies

Defense-minded business strategies• Generate results from investmentsin overseas Power T&D business• Optimize overseas production
locations and reinforce SCM*

• Launch and expand lineup ofenvironmentally friendly products• Reinforce organizational capabilities→ Mainly Power T&D products• Roll out EV products overseas• Move into new areas and capture
new demand→ Expand sales of VC in the US,etc.
11/14*Supply chain management→ Reinforce financial structure ofoverseas subsidiaries(Reinforce asset and CF management)→ Strengthen corporate governance(Strengthen security export control,etc.)→ Acquire and develop local
management personnel

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

3. Promoting Sustainability Management and Management Ambidexterity
Focus on developing corporate culture and reforming awareness, etc., from FY2022 onwards,and promote behavioral changes.

Main initiatives
Environmentalmanagement

Diversity andinclusion● Upgrade to energy-saving equipment and introduce renewable energy toaccomplish Second Meiden Environmental Vision⇒ Achieved GHG emissions reduction targets for FY2021 (Scope 1 and 2; compared toFY2019) thanks to introduction of renewable energy, etc.
Moving forward, plan for introduction of renewable energy and other initiatives at Kofu
Meidensha and Nagoya Works.
⇒ Promote environmentally friendly design● Through employee NPS®* and employee surveys, review systems and improve
workplace environments to improve engagement*Net Promoter Score

NPS® is a registered⇒ Upgrade general affairs equipment to improve factory workplace environments →trademark of Bain &● Actualize diverse human resource requirements and examine
development policy to achieve sustainability management

Company, Inc., Fred
Reichheld, and Satmetrix
Systems, Inc.

● Create new business themes and promote commercialization through co-creation

Innovation

12/14⇒ Promote partnerships with companies from other industries, change behavior in idea
contests, etc. (from interest to action)⇒ Expand pure ozone business through Meiden Nanoprocess Innovations, Inc.
⇒ Invest in and work with Elmodis to establish asset monitoring service business

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

4. Numerical Milestones (Financial and Non-financial Indicators)
Financialindicators

13/14

Non-financialindicators

Copyright © MEIDENSHA CORPORATION All Rights Reserved.

5. Cash Flow Allocation
Accumulated operating CF for the next 3 years is expected to be between ¥60.0-¥65.0 billion.
In addition to the above, we will implement investment, shareholder returns, and financial
strengthening by reducing and effectively utilizing assets.
FY22–24
Operating margin:
5-6%
FY22–24
Accumulated depreciation
and amortization¥30.0-35.0 billion

FY22–24 Cash flow
Accumulated operating cash flow
¥60.0-65.0 billion
Reduction and effective
use of assets

Net D/E ratio:
0.25–0.30

ROE 6.8%

14/14

General investments& growth investments(Including reduction of crossshareholdings)

FY2021
Net worth: ¥101.9 billion

Stable dividends(Dividend payout
ratio of 30.0%)(FY22–24: Approx. ¥50.0billion)

FY2024
Net worth: ¥120.0 billion
ROE 10.0%

ROIC 4.5%
Copyright © MEIDENSHA CORPORATION All Rights Reserved.

ROIC 8.0%

NotesThe business results and forecasts described in this PPT material are based on Meidensha’s own evaluation ofpertinent information available at the time of publication, and contain latent risks and uncertainties.
Please note that the actual business results may differ from our forecast.