New Medium-Term Management Plan

OX-2026

Okabe Transformation 2026
Okabe Co., Ltd. (Stock Code: 5959)
February 19, 2024

Update March 1, 2024
Corrected the underlined parts

Future figures stated in financial forecasts and elsewhere in this material are forward-looking statements
based on currently available information and involve risks and uncertainties. Investors are therefore
asked not to make investment decisions based solely on these forecasts. Please note that actual results
may differ materially from the forecasts due to various key factors. These factors that may impact actual
results include economic circumstances surrounding the Company’s business domains and fluctuations inforeign exchange rates against the U.S. dollar and other currencies.

INDEX
01 Vision Corporate Vision
 Concept behind Vision Materiality

03 Outline of OX-2026
 Awareness of the External
Environment Positioning of the New MediumTerm Management Plan Outline of Business Strategy
 Basic Policy for Financial
Strategy Numerical Management Targets

02 Review of Previous
Medium-Term
Management Plan Results

04 Business Strategy
 Construction-Related Products
in Japan Construction-Related Products
outside Japan
 Performance Targets by
Segment
 Implementing Human CapitalManagement

05 Corporate Value Enhancement
Strategy Analysis of Present Status and Factor
Analysis Towards Reaching 1 or More in PBR Investment plan
 Addition of Shareholder Return
Indicator
 ESG Targets
 Medium-Term Targets in Major KPIs

2

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Okabe Corporate Vision 2040
Management Philosophy

Contributing to society by providing safety and security
Okabe Corporate Vision 2040

Up to now, and into the future,
we are striving to be a global solutions provider that provides safety and security in the livesof people around the world by cultivating Creativity × Connectivity × People Power as amanufacturer of earthquake-resistant construction materials that support construction.
Management Strategy

OX-2026 (Okabe Transformation 2026), a new medium-term management plan3

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Concept behind Vision
For over 100 years since our founding, we have been selecting what we should maintain and what weshould change in line with the times.

Up to now, and into the
future,we are striving to be a
global solutions
provider that provides
safety and security inthe lives of people
around the world bycultivating Creativity

× Connectivity ×
People Power as amanufacturer ofearthquake-resistantconstruction materials
that support
construction.

One thing that we have valued is Creativity.
We will strive to be a company that supports the safety and security of buildings and people through ourcreative technological capabilities.
We will continue to utilize new technologies to create solutions for the automation of construction work,
zero emissions, and more.
Another thing is Connectivity.
This represents the power to connect with people, which is created through communication withcustomers, shareholders/investors, subcontractors/suppliers, employees, and local communities, andthe power to connect critical components and materials used in construction sites to enhance safety.
Yet another is People Power.
As stated in our corporate creed, “We will endeavor to cultivate human resources for sustainable
development,” and “The Group will be a workplace that employees will not regret devoting their lives
to,” we believe that the foundation of everything we do lies in “People Power,” and this will remainunchanging even in 2040.
Underlying these three strengths is our desire to “contribute to society by providing safety and security.”
While we envision various changes in our external environment, we are committed to being a company
that can contribute to a sustainable society as a member of the global community so that the global
environment and humankind can change for the better.

4

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Okabe Group’s Materiality
Category

S

SocialE

Environment

G

Governance

Type of activities

Creating a sustainable
society through safety
and security

Environmental
considerations andresource conservation

Improving managerialsoundness andtransparency

Materiality

1

Increasing severity of earthquakes, heavy rains,
and other disasters

2

Changes in construction business environment

3

Declining population and aging society of Japan

4

Personal relationships and human capitalmanagement

5

Climate change and global warming

6

Achieving environmental conservation,
decarbonization, and resource recycling

7

Maintenance of marine resources

8

Strengthening of governanceTarget SDGs

5

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Results under Previous Medium-Term Management Plan
 Net sales, profit and other figures remained above the targets on the whole until FY2022. However, profit declined significantly for FY2023.

FY2021 results

FY2022 results

FY2023 results

Net sales

64,829 million yen

76,854 million yen

78,152 million yen

Operating profit

4,334 million yen

5,271 million yen

4,082 million yen

Ordinary profit

4,726 million yen

5,471 million yen

4,303 million yen

7.3%

7.1%

5.5%

Profit2,627 million yen

3,848 million yen-5,472 million yen

ROE

4.4%

6.0%

-8.5%

Ordinary profit ratio While capital investment is falling below the planned figure for the three years from 2022 to 2024, strategic investment has been higher.
Three-year investment plan

FY2022 results

FY2023 results

Achievement rate (at thelapse of two years)

Capital investment

11.0 billion yen

0.8 billion yen

1.8 billion yen

2.6 billion yen (24.3%)

Strategic investment(including M&A)

10.0 billion yen

7.7 billion yen

0.2 billion yen

7.9 billion yen (79.1%)

Total

21.0 billion yen

8.5 billion yen

2.0 billion yen

10.5 billion yen (50.4%)

6

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Awareness of the External Environment
Socialinfrastructure Growth in public investment amid the intensification of disasters and deterioration of
infrastructure in Japan
 Existence of infrastructure projects that drive the construction market in North America
 Rising demand in ASEAN and elsewhere due to delays in infrastructure development
 Increase in capital investment for achieving carbon neutrality

Low birthrate andaging populationDX Decreases in population and in the construction workforce, spread of inflation andacceleration of the fall in the birthrate and aging of the population
 Climbing demand for labor-saving that will help shorten construction periods Climbing demand for automated, unmanned operation and other operations using digitaltechnologies and changes in the construction industry through DX

Market demands

 Actions for management with an awareness of capital cost and share prices (to swiftly reach
1 in PBR)

Diverse society Diversification of work styles, learning styles and lifestyles and respect for diversity
7

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Positioning of the New Medium-Term Management Plan
Towards realizing Okabe Corporate Vision 2040
Maintain the profit level while quickly responding to changes in the external environment with a view to continuous growthin corporate value and define the next three-years as a period of transformation for establishing a new revenue base15.0 billion yen
Place a foundation for new growth
Focus on reinforcing the managementfoundations

Trend in operating profit

A period of transformationfor establishing a newrevenue base

5.0 billion yen

2017

2018

NEXT100
Exciting Future

2019

2020

2021

2022

2023

NEXT100 – PHASE2
NEXT100 – PHASE2.1

2024

2025

2026

2040

OX-2026
Okabe Corporate Vision 2040

8

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Outline of Business Strategy
Customer-centric initiatives

Promote digital transformation(Prioritizing the development of a system to solve customers’
problems and the implementation of initiatives to solve them) Innovate the main systems andtransform business processes

 Develop products that will solve issues facedby customers and society Develop new products and create new
businesses to meet emerging needs
 Establish a Product & Solution Planning
Department that will specialize in constructionin Japan Offer solutions suitable for the North Americanand ASEAN markets to accelerate global
expansion of the construction business Launch a business focusing on blue carbon in
the marine business

Carry out (and enhance)sustainability management

 Promote digital transformation to differentiate
the Group from its competitors, create new
business opportunities and consider andimplement initiatives that will increase sales
 Establish an IT Strategy Department

Provide solutions to address material
issues in Japan and overseas, review its
business portfolio, and concentrate
management resources in attaining
sustainable growth

Implement human capital management and strengthen the foundation of management
 Set challenging non-financial key performance indicator (KPI) targets, especially for KPIs related to human capital,
and work to achieve them Improve governance of overseas subsidiaries

10

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Basic Policy for Financial Strategy
Future revenue and capital structures Endeavor to quickly achieve an ROE ratio that exceeds the cost ofcapital (i.e. 8% or more).
 Reduce shareholders’ equity (to an equity ratio of approximately 50%)on the basis of the operating profit target through the business strategy
with a view to continuously increasing the return on capital.

Shareholder returns policy
Future revenue
and capital
structures

Operating profit
2021

2022

2023

2026

2028

 Pay attention to the dividend on equity(DOE) ratio as a principal indicator ofshareholder returns for the purpose ofincreasing the stability of dividends andstrive to improve their level in themedium- and long-term future.

Payoutratio

30% ormore(as a roughguide)DOE

To be raisedin themediumand longterm future

Equity capital

ROE

2021

2022

2023

2026

2028

4.4%

6.0%

-8.5%

6.0%

8.0% or more11

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Shareholder
returns

Consolidated financial results andreturn on capital

Numerical Management Targets under the OX-2026
FY2022 results

FY2023 results

FY2024 targets

FY2025 plan

FY2026 plan

76,854 million yen

78,152 million yen

70,000 million yen

72,500 million yen

75,500 million yen

5,271 million yen

4,082 million yen

4,100 million yen

4,700 million yen

5,000 million yen

6.9%

5.2%

5.9%

6.5%

6.6%

Profit3,848 million yen-5,472 million yen

2,800 million yen

3,120 million yen

3,320 million yen

ROE

6.0%

-8.5%

4.7%

5.4%

6.0%

Net sales
Operating profit
Operating profit
marginFY2022 results
Payout ratio
DOE

FY2023 results

FY2024 targets

FY2025 plan

FY2026 plan

29.5%

－

49.5%

Under consideration

1.8%

1.8%

2.2%

Under consideration
12

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Construction-Related Products in Japan
Customer-centric initiatives(Million yen)

Net sales Innovate and strengthen the sales structure and build
organized one-stop sales operations
 Reconstruct a structure to ensure a swift and accurate
response to customers’ needs

47,100 Offer new products and services that prioritize theresolution of issues faced by customers and society

2024

48,20049,500

2025

2026

2025

2026

Operating profit
Promote digital transformation

 Carry out DX to provide customers with new additionalvalue Improve business processes and increase theirproductivity

2024

13

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Construction-Related Products outside Japan
Customer-centric initiatives
Customer-centric
initiatives

U.S.

 Improve the logistics and production systems to swiftly answer
customers’ needs
 Provide new products and services
16,300Indonesia

 Conduct marketing based on an accurate understanding of thegrowing needs of customers
 Build a business foundation for OKABE GALLERY, a newly
launched store that deals in building materials, and carry out
new endeavors(Million yen)

Net sales

17,6002024

18,710

2025

2026

2025

2026

Operating profit

Implement human capital management

 Develop and secure overseas personnel and constructa pool of human resources

2024

14

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Performance Targets by Segment
FY2024 targets

70,000Net sales- Temporary building andformwork products

7,300

7,500

7,600

- Civil engineering products

Total

7,500
21,00011,30047,1007,800
21,50011,40048,2008,000
22,30011,60049,500- Building products and materials

16,30017,60018,710Total

16,30017,60018,710

6,600

6,700

7,290

4,100

4,700

5,000

3,530
570

4,080
620

4,240
760

5.9%
4,400
2,800
4.7%

6.5%
4,800
3,120
5.4%

6.6%
5,100
3,320
15
6.0%

- Building structural products

Operating profit
Construction-related products
Diversification business

Operating profit margin
Profit
ROE

75,50068,210

Diversification business

Ordinary profit

72,500

FY2026 plan

65,800- Building materials

Overseas

FY2025 plan

63,400Construction-related products

Japan(Million yen)

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Implementing Human Capital Management
Management Philosophy
Contributing to society by providing safety and security

Okabe Corporate Vision 2040
Up to now, and into the future,
we are striving to be a global solutions provider that provides safety and security in the lives of people around the world by cultivating
Creativity × Connectivity × People Power as a manufacturer of earthquake-resistant construction materials that support construction.

Diverse human resources working for the Okabe Group = A source of new value creation
Secure humanresources

Improveengagement

Offer the environment andopportunities for development

Health and productivity
management

Invest in human resources proactively to boost corporate value

16

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Analysis of Present Status
PBR stayed below 1. The current ROE level fails to reach the level of the cost of shareholders’ equity sought by themarket.
ROE (%)PBR (times)
8.0%

1.2

7.0%

Cost of shareholders’ equity:
6% to 7%

1.0
6.0%
0.8

5.0%

0.8

4.6%

4.0%

0.6

0.6

0.6

0.4

0.5

0.5

6.0%

5.9%
4.4%

3.0%
2.0%

0.2

0.0

1.0%

2019

2020

2021

2022

2023

0.0%

-8.5%
2019

2020

2021

2022

2023

17

02 Review of Previous MediumTerm Management Plan

01 Vision

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Analysis of Factors for Poor ROE (DuPont Analysis)
Increase profitability and streamline the balance sheet to achieve an ROE level that is higher than the cost of shareholders’ equity promptly

ROE (%)
10.0%

Average in the manufacturing industry:
Approx. 7% to 10%

8.0%

Total asset turnover rate

7.0%
6.0%
5.0%

6.0%

5.9%
4.6% 4.4%

4.0%
3.0%
2.0%
1.0%
0.0%

2019

2020

2021

2022

-8.5%

2023

Financial leverage

9.0%

Profit margin (%)

6.0%

5.1%

4.0%

Degree of priority

5.0%

4.3%

4.1%
Average in the
manufacturing industry: 4% to 6%

High

2.0%
0.0%

-7.0%
2019

1.00

0.40

2021

2022

2023

Average in the manufacturing industry: 0.8 to 1.0

0.80
0.60

2020

0.74

0.71

0.71

2019

2020

2021

0.78

0.81

2022

2023

Medium

0.20
0.00

2.20
2.00
1.80
1.60
1.40
1.20
1.00

Average in the manufacturing industry: 2.0 to 2.2

High
1.54

1.53

1.53

1.54

1.50

2019

2020

2021

2022

2023

18

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Trends in PBR, Market Capitalization and Shareholders’ Equity
Market capitalization

Shareholders' equity

PBR

70,000

1.4

1.2

1.2

1.0

60,000

0.9

1.0

1.0

0.8

50,000

0.8

0.8

0.6

40,0000.6

30,000

0.5

0.5

0.4

20,0000.2

10,0000

0.6

PBR (Times)

Market capitalization and shareholders’ equity (million yen)

80,000

2014

2015

2016

2017

2018軸ラベル2019

2020

2021

2022

2023

0.0

19

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Trends in Net Sales, Operating Profit and EBITDA
90,0008,716

Net sales

8,161
7,284

7,008

7,101

5,527
4,844

50,000

5,349

8,000

7,193
6,508

6,343

6,327

60,00030,00068,98563,19060,917

5,294
4,334

65,40963,12764,8294,082
76,854

7,000
6,000

5,271
4,496

64,785

6,907

6,429

40,00068,0459,000

78,152

5,000
4,000
3,000

20,0002,000

10,000

1,000

0

2014

2015

2016

2017

2018軸ラベル2019

2020

2021

2022

2023

0

Operating profit and EBITDA (million yen)

Net sales (million yen)

EBITDA (= operating profit + depreciation + goodwill amortization)

8,237

80,00070,000Operating profit

20

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Towards Reaching 1 or More in PBR
Growth investment

Capital cost management
 Swift achievement of 8% in ROE
 Optimization of our businessportfolio Presentation of long-term strategy
 Proactive disclosure of
ESG-related information

Maximize Corporate Value Capital investment
 M&A
 R&D
 Investment for growth in the
United States

Strengthening
shareholder returns
 Payout ratio of 30% or more Introduction of an indicator for DOE
 Purchase of treasury shares

Financial health21

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Investment Plan
We will invest a total of 21 billion yen during the three-year period from 2024 to 2026 with a view to realizing Okabe
Corporate Vision 2040.
Major investments planned include strategic investments, investments in human capital and those in activities related to DX
and decarbonization.

Capitalinvestment

Approx. 10 billion yen• Replace production
facilities• Invest in decarbonization• Invest in DX and others

Strategic
investment
M&A

Human capital
investment• Carry out M&A projects chiefly in theareas of construction-related products
businesses in and outside Japan andin business areas helpful tosustainability management.

• Increase personnel expenses(by 5% to 7% per year)• Expenses for training and others

Approx. 10 billion yen

Approx. 1 billion yen

Total investments during the three-year period: 21 billion yen

2201 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Addition of Shareholder Return Indicator
In addition to the payout ratio target of 30%, we will pay attention to the dividend on equity (DOE) ratio as another mainindicator of shareholder returns in order to boost stability of dividends and strive to improve its level in the medium- and longterm future.
Payout ratio

DOE/ROE (%)

DOE

ROE

Payout ratio (%)
60.0

20.0

15.7 42.9

15.0

10.0

26.09.9

2.4

41.4

41.7

29.4
8.8

31.0
15.5

5.0

0.0

49.5

2.5

2.3

6.5

2.7

5.6

2.3

5.9

2.4

4.6

1.4

36.9

40.0

29.5

4.4

1.6

30.0
20.0

6.0

1.8

4.7

1.8

2.2

10.0
0.0
-10.0

-5.0

-10.0

50.0

軸ラベル

-21.1

-20.0

-8.5

-30.0
2024
(forecast)23

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

ESG Targets

E

Environment

S

SocialG

Governance Continuously reduce greenhouse gases by, for example, developing environmentally friendly
products and methods
 Reduce environmental impacts by reviewing production processes and others Launch a blue carbon business to step up efforts towards carbon neutrality.

 Develop new products and methods to address intensification of earthquakes, rainfall and otherdisasters
 Work on diversity and inclusion and on health and productivity management to realize humancapital management
 Conduct educational CSR activities and take part in regional communities for regional contribution

 Establish corporate governance with high effectiveness to build a structure that can swiftly respondto changes
 Continuously improve risk management across the Group, including overseas subsidiaries
 Carry out corporate activities with fairness and high transparency to practice compliance24

01 Vision

02 Review of Previous MediumTerm Management Plan

03 Outline of OX-2026

04 Business Strategy

05 Corporate Value
Enhancement Strategy

Medium-Term Targets in Major KPIs
Materiality
1 Increasing severity of earthquakes, heavy rains,
and other disasters
2 Changes in construction business environment
3 Declining population and aging society of Japan

Major KPIs
Sales of products that contribute to earthquake
resistance, etc. (structural equipment products)
Sales of products that contribute to slope
reinforcement, etc. (civil engineering products)

Million yen

11,555

12,400Million yen

3,390

3,600

Million yen

2626

CO2 emissions (Scope 1 and 2) total

t-CO2eCalculation in progress

CO2 emissions (Scope 3) total
Number of seaweed seedlings shipped that will
be helpful to CO2 absorption and fixation

t-CO2eRatio of female managers
Ratio of employees taking childcare leave
Number of employees with disabilities

Products

Seedlings

185

Ratio of Outside Directors%

Ratio of female Directors
Ratio of Outside Directors on the Audit &Supervisory Committee

%
%

75.0

Number of used plastic D cones recycled

Target SDGs

10
10
100
16
600
Down 9.5% or more
year on year

Down 4.0% or more
Calculation in progressyear on year

2,749
970
41.7
8.3

Total recycled waste volume

8 Strengthening of governance

FY2026 targets

10 in the full year

Number of IT-related qualifications held
Investment in social and community
contribution activities

5 Climate change and global warming
6 Achieving environmental conservation,
decarbonization, and resource recycling
7 Maintenance of marine resources

FY2023 results

9
Contractual relationship: 5
Universities Cooperative relationship: 6
4.7
%
41.7
%
11
People95
Qualifications

Number of new products launched
Number of universities participating in joint
research

4 Personal relationships and human capitalmanagement

Unit

Tons
Thousand* For details about the KPIs, refer to the Collection of Financial and Non-Financial Data on the Sustainability webpage of our website.

2,000
3,396

(+5% year on year)

50 or more

3000

1/3 or more
16.725