Medium-term Management Plan
Seibu Vision 2027
Seibu Electric & Machinery Co., Ltd.
May 15, 2024

Seibu’s Philosophy
Our Purpose

We will humbly explore the essence oftechnology, using it to contribute broadly to
the world with nature as our guide
There is a fine line between humility and servility, and between pride and arrogance. Ourcommitment is: Throughout the highs and lows of business, we will keep our

purpose in our hearts as we make our products with humility and prideand serve our customers. Guided by a belief that mechanized civilizationand nature can coexist, we will contribute broadly to the world.
Basic Management Policy(1) Pursuing “Ultra-precision and Mechatromation*¹” andleading the creation of new, distinctive products(2) Thoroughly implementing the CBS method*² and living
up to our customers’ trust with flexible, quick, andstraightforward proposals and on-time delivery(3) Focusing our sincerity and commitment on quality andcosts, which reflect our mindset and drive sales growth

Guiding Principles(1) Go to the actual place and see for yourself, specificallyquantify—immediately analyzing and immediately
executing(2) If input is hard, output will be easy(3) If you see a tree, look for the branches, think of theforest, and explore the climate*1. Mechatromation: A concept that aims to realize automation by fully leveraging mechatronics and human wisdom*2. CBS method: Cooperate, Build-up & Service
Sales activities based on holding true to genuine technical ideals. The CBS method aims at creating good systems by cooperating with customers based on anunderstanding of their actual needs.

1History of Seibu
Founded in 1927 as Seibu
Each path is creating a new future
1927

Business locations in JapanFounded as Seibu Electric and took over operations of the Kyushu
Factory of Toho Electric, which was an electric machinery factory of Toho
Electric (currently Kyushu Electric Power Co., Inc.)

Sapporo Local OfficeStarted manufacture and repair of electrical machinery and devices(transformers, motors, generators) and electric meters
1939
1945

Sendai Local Office

Reorganized as Seibu Electric MFG. Co., Ltd. (established)
Moved to Koga-machi, Kasuya-gun, Fukuoka Prefecture (currently Koga
City, Fukuoka Prefecture)

1954

Began manufacture and sales of valve controllers (start of Industrial
Machine Business)

1959

Began manufacture and sales of machine tools (lathes) (start of Precision
Machine Business)

1966

Completed first automated warehousing system (start of Distribution
Equipment Business)

1972

Developed world’s first CNC wire EDM

1986

Changed the corporate name to Seibu Electric & Machinery Co., Ltd.
Listed on the Fukuoka Stock Exchange

1991

Adopted business division system

2006

Listed on the Second Section of the Tokyo Stock Exchange

2007

Built new headquarters building and new factory

2012

Formed business/capital alliance with Toyota Industries Corporation

2018

Started valve control stock sales in Thailand

2024

Established U.S. joint venture Seibu America Corporation

2024

Built new precision machines factory and office building in response to anincrease in demand for wire EDM

2027

100th anniversary of theCompany’s founding

Hiroshima
Sales Office

Headquarters/Factory
KyushuSales OfficeOsaka Branch
KyushuService Osaka Service CenterTokyo Service CenterTokyo Branch
Nagoya Sales Office
Nagoya Service

Business locations overseas
Seibu America Corporation
Chicago (U.S.)

Europe*planned

Shanghai (China)*stationed
Shenzhen (China)*stationed
Vietnam*planned
Thailand*stationed

Anniversary

2Seibu’s Business and Value Provision Areas

Seibu is an integrated mechatronics
manufacturer with focus on distribution
equipment, industrial machines, and precision
machines in its pursuit of “Ultra-precision andMechatromation”
We provide one-stop services for processes from basic concept
to design, manufacturing, and after-sales service

43%

36%

Precision
MachineBusiness

Distribution
Equipment
Business

Sales breakdown bybusiness segment (FY2023)

Business

Main products

Features

Value provision areas

Offers integrated logistics
solutions combining softwarewith the Company’s
proprietary technicalcapabilities in building
compact and economicalsystems

Workforce optimization/space saving/energy saving (reducing CO2
emissions), productivity improvement/IoT/digital transformation,
traceability/prevention of misdelivery

Distribution
Equipment
Business⚫ Automated warehousing
systems⚫ FMS systems⚫ Automatic case picking
systems⚫ Conveyor and handlingsystems⚫ Robotics Material
Handling⚫ Valve actuators⚫ Gate actuators⚫ Valve/gate control
systems

Provides valve actuators andgate actuators that are key toenabling lifelines such as
water, electricity, gas, oil,and other energy sources

Industrial
MachineBusiness

Creating
workspaces forpeople and robots

Logistics systems

Valve actuator

Precision
MachineBusiness

Develops wire EDMs withproven pitch machining
accuracy, NC lathes for
precision parts machining,and cutting machines thatenable free-form machining,etc.

6-axis robots

Process streamlining, workforce optimization, energy saving,environmental protection, flood prevention, resource saving, quality,
cost, delivery time, and maintenance technology

Semflex® series⚫ Ultra-precision and highprecision wire EDMs
⚫ Ultra-precision wire EDMs
(oil spec.)⚫ High-precision, compact
NC lathes⚫ Free-form internal
grinding machines

21%

Industrial
MachineBusiness

Large-size chain
gate actuator

Production of high-precision parts, reduction of labor costs

Mainapplications⚫ Logistics⚫ Batteries, electricalequipment⚫ Transportation,

warehousing,wholesale⚫ Machinery⚫ Pharmaceuticals,
chemicals⚫ Food⚫ Government offices(Ministry of Health,Labour and Welfare,
Ministry of Land,
Infrastructure,
Transport andTourism, Ministry of
Defense, local
governments)⚫ Valves and gates⚫ Electrical machinery,
heavy industry,
shipbuilding⚫ Precision molds⚫ Automobiles, aircrafts⚫ Electronics, electricalmachinery⚫ Optics

Ultra-precision wire EDM

High-precision free-form internal
grinding machine3

Vision for Seibu and Positioning of New Medium-term Management Plan “Seibu
Vision 2027”
Seibu Vision 2027

Aim to be a global nichecompany that helps to build asustainable society andenvironment, creating social
value and economic value“Connect with people through superior
technology for a brighter future”

What matters most is to be a company that continues tocreate value for a brighter society.
We will shift to management that focuses on growthand capital efficiency as well as profitability andfinancial soundness, while taking on the challenge of
new businesses and contributing broadly to the world
as we look to the future beyond our 100th anniversary.

Seibu Vision 2027
⚫ Shift to management with a focus
on growth potential and capitalefficiency⚫ Improve P/B ratio; increase
corporate value and stock value⚫ Strengthen management

Challenge 280⚫ Developed models to meet

Challenge 240

overseas demand; cooperated withlocal partners⚫ Increased product capabilities throughquality improvements along withstandardization and cost reduction⚫ Accelerated technology development
and created new products

foundation with an emphasis on
human capital⚫ Increased production capacity atprocessing centers

2024⚫ Strategically promoted
sustainability

2027
100th
anniversary

2024
Building a new wire EDM production plant(scheduled for completion by end of
September)⚫ Expanded sales to China andSoutheast Asia

2018

2021
2021
Developed trans-ship cart loader

2022
Developed four
HP/UP series models

2023®
Developed Semflex VMM-Z

4

01

Review of Previous Mediumterm Management Plan
(Challenge 280)
• Results against numerical targets• Business strategy outcomes andchallenges• Analysis of current situation in terms of
cost of capital and stock price02

Overview of New Mediumterm Management Plan
(Seibu Vision 2027)••••

Basic policy
Quantitative targets
Business strategy
Measures that are conscious of cost ofcapital and stock price

Strategy
03 Business• Distribution Equipment Business:
Targets and basic strategy• Industrial Machine Business:
Targets and basic strategy• Precision Machine Business:
Targets and basic strategy

04 Financial Strategy••••

Financial policy
Capital allocation
Investment plan
Changes in dividend policy

05 Management Foundation••••

Governance
Human resource development plan
Diversity plan
Environmental improvement
activities

Lead Tech Exploration.

Review of Previous Medium-termManagement Plan
(Challenge 280)

Review of Previous Medium-term Management Plan
(1) Results against numerical targets
We steadily achieved our plan and continued to grow in terms of net sales. However, prices ofraw materials and resources soared and despite efforts to pass these on to sales prices and to
cut costs, operating profit margin came under pressure from fiscal 2022 onward.
Operating profit/operating profit
margin (billions of yen/%)

Net sales (billions of yen)
Distribution
搬送機械事業Equipment
Business

Precision
精密機械事業
MachineBusiness

Industrial
産業機械事業
MachineBusiness

その他
Others

26.3

28.5

29.5

6.2
6.2

8.3

10.9

0.5

0.5

9.4

8.9%

2.72
6.0

6.3

12.5

0.5

0.6

6.6

2.16

10.0%
8.7%
2.95

2.53

9.0%
7.4%

7.0%

6.5%

6.7%

FY2021

FY2022

FY2023

13.6

0.5

0.5

FY20212021年度FY2022
2022年度FY2023
2023年度目標 実績
Results
Targets

Targets
目標 Results
実績

目標 Results
実績
Targets

Net sales

8.0%

2.78

2.41

6.6

10.4

Results

margin results

8.5%

12.0

10.9

9.3

Operating profit
営業利益率
実績

margin targets

10.3%
11.3

9.3

Operating profit
営業利益率
目標

Targets

results

9.4%

24.4
8.7

Operating profit
営業利益
実績

targets

31.9
27.0

Operating profit
営業利益目標

ROE (%)FY20212021年度FY2022
2022年度FY2023
2023年度Operating profit/operating profit margin

ROE

FY2023 target: ¥29.5 billion

FY2023 target: ¥2.95 billion/10.0%

FY2023 target:

9.0%

FY2023 result: ¥31.9 billion

FY2023 result: ¥2.78 billion/8.7%

FY2023 result:

6.7%

7

Review of Previous Medium-term Management Plan
(2) Business strategy outcomes and challenges
In addition to achieving our overseas sales targets, we succeeded in expanding the scale of ourmaintenance and service sales and launching products and services for new markets.
Our ongoing tasks are to expand globally aside from China, further strengthen our services,
capture decarbonization demand, and develop new products for growth fields.
As a manufacturing company dedicated to the pursuit of “Ultra-precision and Mechatromation,” we supply the market withproducts and services that help improve productivity and convenience for our customers

Distribution Equipment Business

Basic policyof Challenge
280

Achievements

Industrial Machine Business

Precision Machine Business⚫ Expand orders for ME business by⚫ Aim to break away from depending
strengthening maintenance plansolely on China
proposals⚫ Develop new products for target⚫ Expand disaster preparedness
fields (semiconductors/EVs/medical/
products into private sector demand
forging dies)and gate market⚫ Enhance maintenance and technical⚫ Launch overseas production plant andsupport and strengthen branding
develop products/expand sales
Strengthen management foundation (standardization, CDs, digitalization promotion, human resource* Sales comparisons are with FY2020
development, sustainable management)⚫ Increase profitability of conventional
automated warehouses and develop
new markets⚫ Develop and expand sales of Robotics
Material Handling⚫ Expand sales through proposal-based
services and enhance call centers⚫ New market system sales:+¥0.4 billion⚫ Maintenance and service sales:+¥0.3 billion⚫ Created series of palletizing anddepalletizing products in Robotics
Material Handling⚫ Maintenance and service sales:+¥0.3 billion⚫ Private sector demand/gate market
sales: +¥0.2 billion⚫ Started knock-down production in
Thailand⚫ Sales of high-precision processing
machines for growth fields (EVs,medical, etc.): +¥1.8 billion⚫ Established U.S. joint venture Seibu
America Corporation (April 2024)

Expanded overseas sales (overseas sales ratio in FY2023: 38% (plan: 32% or more))

Futureinitiatives⚫ Boost system construction capability
and speed; respond to an increase inconstruction projects⚫ Address “2024 Problem” (truck
loading/unloading)⚫ Develop sales overseas and enhanceservices⚫ Launch new products for
decarbonization⚫ New initiatives for recurring revenue
business (enhance services)⚫ Consider establishing local production
plants overseas⚫ Strengthen sales and technicalsupport systems in regions otherthan China, and ASEAN, North
American, and European markets⚫ Develop large, high-precision
machines for EV motor core molds
and optical lens industry

8

Review of Previous Medium-term Management Plan
(3) Analysis of current situation in terms of cost of capital and stock price
Although the stock price rose in the previous Medium-term Management Plan period,
the P/B ratio fell below 1.0. We recognize achieving a P/B ratio of 1.0 or more as a
key management issue.
We recognize that ROE has not exceeded our cost of shareholders’ equity, which we recognize asaround 6.0% to 8.0%*. Although net assets have increased due to profit accumulation, backgroundfactors such as soaring raw material and energy prices led to insufficient growth in profit.

ROE* Based on the CAPM model, our cost of shareholders’ equity is calculated as 3.0% to 5.0%. However, we found in our analysis that properly
measuring expected market returns with the CAPM model is difficult due to low liquidity given the low P/B ratio below 1.0. We therefore calculated
the CAPM model-based cost of shareholders’ equity using the beta of a selected peer company.

P/E ratio

The P/E ratio is trending below the industry average. We recognize that we have not managed toadequately communicate our growth strategy, or low liquidity has hindered price formation.
P/B ratio (times)

ROE (%)

Profit (billions of yen)

8
1.0

1,714

6.8

1,800

1,597
1,473

0.9
1,250

0.8

6

1,600

0.85

0.85

915

1,000

6.7

Cost of shareholders’ equity
recognized by the Company
6.0% to 8.0%

1,400

0.74

6.5

6.2

0.81
4

1,200

0.7

2.5
7.4

×

FY2019 FY2020 FY2021 FY2022 FY2023

2.0

÷

1.5

1.9
1.6

1.8

2.0

1.4

1.0
0.5
0.0
FY2019 FY2020 FY2021 FY2022 FY2023

800

0.6

0.62

400

0.5
200

0.4

Net assets (average of beginning andending amounts) (billions of yen)

P/E ratio (actual basis) (times)

600

14

13.3

12

11.6

30.0

29.5

13.1

11.4

27.9
26.4

25.0

0

10

FY2019FY2020

FY2021

FY2022

FY2023Year-end
stock price

915

1,250

1,473

1,597

1,714

8

BPS

1,485

1,691

1,810

1,882

2,023

6

(Unit: yen)

22.4

10.0
Tokyo Stock Exchange Simple Average P/E ratio
for machinery industry*
Prime Market: 21.5, Standard Market: 13.5
(As of March 2024)

FY2019 FY2020 FY2021 FY2022 FY2023* Source: Tokyo Stock Exchange. Based on actual results for the latest fiscal year

24.0

20.0

15.0
FY2019FY2020

FY2021

FY2022

FY20239

Lead Tech Exploration.

Overview of New Medium-termManagement Plan
(Seibu Vision 2027)

Overview of New Medium-term Management Plan (1) Basic policy

Seibu Vision
2027
SloganConnect with people through superior
technology for a brighter future
Lead Tech Exploration
Business strategy

Financial strategy/management foundation⚫ Cost reduction through standardization,
Enhancingproductivity improvement, etc.
profitability of⚫ Strengthening maintenance andexisting businesses
service businessPriority
measuresAccelerating global
expansion⚫ Accelerating the development of
ASEAN, North American, andEuropean markets⚫ Maintaining Greater China market

Taking on⚫ Developing solutions for growth
challenges into newmarkets⚫ Entering decarbonization market
areas

Socialissues that
Seibu helps
solve

Material handling solutions for
improving productivity(Distribution Equipment Business)

Declining workforce,
2024 Problem

Balance sheet
management⚫ Increasing return on assets⚫ Making use of leverage⚫ Reviewing shareholder return policy

Strengthening
managementfoundation⚫ Digital transformation/smart
factories⚫ Governance⚫ Human resource development⚫ Sustainability

Advancement of fluid control
infrastructure(Industrial Machine Business)

Aging infrastructure,
increasingly
severedisasters

Decarbonization,
carbonneutrality

Ultra-precision machining
solutions(Precision Machine Business)

Expansion of high-techindustries (semiconductors, EVs,
aerospace, healthcare, etc.)11Overview of New Medium-term Management Plan (2) Quantitative targets

Seibu Vision 2027

GOAL

¥40.0 billion¥5.2 billion

13%

10%

Net sales

Operating profit

Operating profit margin

ROE

Net sales (billions of yen)

ROE (%)

13.0%

40.
CAGR: 5.8%

26.3

28.5

10.0
%

0

31.9

5.20

10.3%

7.4%

8.7％

6.5%

6.7%

2022年度FY2022

2023年度FY2023

8.5%

2.72

2.41

2.78

0.0
FY20212021年度FY2022
2022年度C280

FY2023
2023年度FY20272027年度
SV2027

FY20212021年度FY2022
2022年度C280

FY2023
2023年度FY20272027年度
SV20272021年度FY2021

C280

2027年度FY2027
SV202712

Overview of New Medium-term Management Plan (3) Business strategy

Through the efforts of each division working independently and incollaboration, we will realize our company-wide business strategies.
(3) Taking on challenges
into new areas(1) Enhancing profitability ofexisting businesses(2) Accelerating global expansion◼ Cost reduction through standardization,
productivity improvement, etc.
◼ Strengthening maintenance and service
business◼ Accelerating the development of ASEAN,
North American, and European markets◼ Maintaining Greater China market◼ Developing solutions for growthmarkets◼ Entering decarbonization market

Distribution
Equipment
Business⚫ Increase profitability of conventional
automated warehouses⚫ Strengthen maintenance services by
expanding locations and thoroughly
proposing inspections and maintenance⚫ Establish overseas sales and service
system in cooperation with trading
companies and machining center
manufacturers⚫ Provide solutions for growth markets(logistics, batteries/electrical, machinery,quasi-drug cosmetics, food industries)⚫ Develop products to solve 2024 Problem

Industrial
MachineBusiness⚫ Maintain a share of public sector projects
in Japan at 80%⚫ Strengthen maintenance services by
expanding locations, securing orderintake for electrification of othercompanies’ products, etc.

⚫ Establish a sales and production base in
Thailand⚫ Expand sales to ASEAN markets⚫ Develop explosion-proof products forhydrogen and ammonia⚫ Develop products with advanced
integrated standalone power modules(solar + battery)Precision
MachineBusiness⚫ Optimize profitability through costpass-through⚫ Enhance quality, maintenance, andtechnical support; strengthen andestablish distributors⚫ Strengthen expansion into ASEAN,
North America, and Europe⚫ Maintain Greater China sales andprofits⚫ Develop solutions to meet needs ofgrowth industries (EVs,semiconductors, lenses, medical,
batteries, aerospace)

Companywide
businessstrategies
Strategies for each division

Strengthening
company-wide
managementfoundation◼ Promote smart factories (visualization using IoT, automation/workforce optimization) to boost productivity and quality andstrictly keep delivery dates◼ Promote company-wide digitalization and digital transformation (ERP, sales support, corporate division) to boost company-wide
productivity

FY2027Company-wide
KPIs

Maintenance services sales:¥7.05 billion

Overseas sales:¥16.4 billion(+¥1.55 billion from FY2023)(+¥4.3 billion from FY2023)

Overseas
sales ratio

40％ or more

New customer/area sales:+¥8.0 billion(Compared to FY2023)

13

Overview of New Medium-term Management Plan
(4) Measures that are conscious of cost of capital and stock price

By implementing the measures of Seibu Vision 2027, we aim to achieve ROEof 10%, increase the P/E ratio, and achieve a P/B ratio of 1.0 or greater.

Improve P/B ratio / Increase corporate value and stock value

Achieve ROE of 10%

Increase P/E ratio

Steadily execute Seibu Vision 2027

Looking ahead beyond our 100th
anniversary

Growth in operating profit and EPS

Long-term growth strategy⚫ Achieve sales of ¥40.0 billion in FY2027⚫ Achieve an operating profit margin of
13% in FY2027

Balance sheet management⚫ Increase return on assets⚫ Make use of leverage⚫ Review shareholder return policy

Seibu
Vision2027
initiatives⚫ Carry out global expansion⚫ Take on challenges into new businesses

Information sharing withshareholders⚫ Enhance corporate website to showcase
the Company‘s strengths⚫ Encourage active disclosure of information

14

Lead Tech Exploration.

Business Strategy

Business Strategy (1) Distribution Equipment Business: Targets and basic strategy◼ Offering “material handling solutions for improving productivity” that precisely capture customer needs
Basicstrategies(1) Increase profitability of conventional automated warehouses anddevelop target markets (logistics, batteries/electrical,
semiconductor, machinery, quasi-drug cosmetics, and food)(2) Expand sales by strengthening proposal capabilities of Robotics
Material Handling solutions(3) Expand sales through proposal-based sales and services andestablish overseas bases

Our strengths◼ Unique solutions backed by unrivaled products in the field of logistics
and warehouse management◼ System enabling one-stop delivery of total system solutions (fromproposal development and manufacturing to construction andservice)◼ Diverse product lineups and extensive experience in support forcustomized specifications◼ Extensive repeat business from loyal customers

Numerical targets
Beverage system forconvenience stores(overhead view)

Existing markets

Main measures and KPIs

New markets

Market development strategy (leveraging ourstrengths to enter new markets)◼ Overseas• Strengthen cooperation with machining center
manufacturers and partner companies todevelop Greater China, ASEAN, and North
American markets◼ Service/renewal• Enhance proposal-based
services‒ Reactivation of businesswith existing customers‒ New inspection contracts• Expand service locations• Establish 24/7 call center◼ Conventional
automated warehouses◼ Contracted/OEM cranes• New cranes,
improvement on special
cranesMarket penetration strategy

Existing products and services

Operating profit margin

12.0%
9.8%

15.5 bn

11.3 bn

Net sales
FY2023
2023年度Diversification strategy (entry into
new fields with growth potential)◼ Total solutions (Robotics Material
Handling)• Proposals, development, and sales expansion
for solving the 2024 Problem‒ Automated truck loading/unloading system‒ Mixed-load palletizing/depalletizing system• Rollouts and sales expansion of automatedcase picking systems for supermarkets andconvenience stores• Development and expansion of sales ofautomation systems for the battery andelectrical machinery industries• Use of AI to boost distribution center
efficiency• Strengthening proposal capabilities throughdigital transformation and human resource
development

New product development strategy (providing
new value to existing markets/customers)

New products and services

FY20272027年度FY2027 targets
Overseas sales
ratio

10% or more
Service business
sales

+25%*

Total solutions(Robotics Material
Handling)+100%*
Production
capacity+40%** Compared to FY2023

16

Business Strategy (2) Industrial Machine Business: Targets and basic strategy◼ Providing sustainable innovation that realizes “advancement of fluid control infrastructure”
Basicstrategies(1) Develop products that support decarbonization and national
resilience(2) Strengthen recurring revenue business to expand maintenanceand servicing business(3) Establish overseas sales and production bases

Our strengths◼ Deep information network for valves and gates; No. 1 share of valve
actuators market in Japan◼ Experience in deliveries to Ministry of Defense ships, which are
increasing in numbers◼ Proprietary drive technology for standalone power modules (solar +battery)◼ Diverse product groups; able to support diverse systems and units◼ Long track record of delivering to Japan’s water and sewerage andgate markets

Existing markets

Main measures and KPIs

New markets

Market development strategy (leveraging ourstrengths to enter new markets)◼ Overseas• Establishment of production
base in Thailand• Research and development ofVietnam and India markets◼ Service/renewal• Enhancement of proposal-based
services• Reactivation of business with existingcustomers, new inspections• Proposal for automation of manual
actuators• Expansion of service locations◼ Water and sewerage• Customer satisfaction improvement throughintensive sales and technical exchange
meetings, etc.
Market penetration strategy

Existing products and services

Numerical targets

Solar-powered motorizedsluice gate actuator
Standalone
power module
Wire rope
winch typeGear racktype

Operating profit margin

17.0％

12.9％

7.5 bn6.6 bnPin racktype

Net sales
2023年度FY2023

Diversification strategy (entry into
new fields with growth potential)◼ Private sector valves• Proposal, development, and sales expansion of
products for new energy (hydrogen/ammonia)• New model valves (compact and lightweight,
improved profit margin)• Development and sales expansion throughacquisition of National Defense Standards for newseries◼ Gates• Proposal, development, and sales expansion ofstandalone power supply products• New model gates (compact and lightweight,
improved profit margin)

2027年度FY2027

FY2027 targets
Overseas sales
ratio

7% or more
Service business
sales

+17%*

Share of public
sector projects in
Japan

Maintain
New product development strategy (providing
new value to existing markets/customers)

New products and services

80%

Private sector
valve sales+40%** Compared to FY2023

17

Business Strategy (3) Precision Machine Business: Targets and basic strategy◼ Offering “ultra-precision machining solutions” that support the high-tech industry
Basicstrategies(1) Develop sales strategies for target regions; break away fromfocusing solely on China(2) Speed up development of new products and new systems for
growth fields(3) Enhance quality, maintenance, and technical support; strengthen
and establish distributors

Our strengths◼ In-house software development◼ Solid reputation in Greater China for ultra-precision machining
technology and reliability◼ Market advantage in ultra-precision machining technology andreliability◼ Manufacturing and development aligned to on-site needs, without
outsourcing customer contact points◼ Collaboration with Distribution Equipment Business, which develops
automation and workforce optimization solutions

New markets
Existing markets

Main measures and KPIs

Market development strategy (leveraging ourstrengths to enter new markets)◼ Overseas (excluding Greater China)• North America: Launch joint venture
Seibu America Corporation• ASEAN: Support relocation from China• Europe: Research market andpartners; expand sales◼ Overseas (Greater China)• Address demand for high-precision
machines (high-end models)• Expand sales of large machines for EVs

Numerical targets

12.0%
HP/UP series large machines

6.7%

17.0 bn

13.6 bn

Net sales
FY2023
2023年度Diversification strategy (entry into
new fields with growth potential)◼ Product development• Develop large, high-precision machines for EVs• Develop high-precision grinding machines forlenses• Pursue proposals, development, and sales
expansion for automation• Develop ultra-precision machines forsemiconductor lead frame processing• Develop models for aerospace (North America)
and medical processing◼ Japan• EDMs: Expand sales of large machines in motor core
mold market• Machine tools: In order to address CASE demand,
expand sales to battery and battery mold market
New product development strategy (providing
Market penetration strategy
new value to existing markets/customers)

Existing products and services

Operating profit margin

New products and services

FY20272027年度FY2027 targets
Overseas sales
ratio (excluding
Greater China)

20% or more
Solutions for
growth industries+10%*
Production
capacity＋50%*

Production
capacity for highend models＋100%** Compared to FY2023

18

Lead Tech Exploration.

Financial Strategy

19

Financial Strategy (1) Financial policy

By focusing our capital allocation on improving corporate value, wewill increase return on assets. By enhancing shareholder returns andusing appropriate leverage, we will optimize the liability and equity
side and improve return on equity.
Balance sheet management for realizing ROE of 10%
Assets side

Liability and equity side

Increasing return on assets

Making use of leverage⚫ Carry out each measure of Seibu
Vision 2027 to achieve our sales
plan and operating profit marginplan⚫ Dispose of or reduce certain cash
and deposits and crossshareholdings with low return on
assets, and redirect funds togrowth investments

Current
assetsNoncurrent
assetsLiabilities

Net assets⚫ When making large-scale
investments or M&As that contributeto profit growth and profitability,
use interest-bearing debt while
paying attention to financial
soundness* When making individual decisions
regarding large-scale investments,
the Board of Directors
comprehensively determines
profitability, growth potential,
scarcity, etc., and explains them tothe market

Enhancing shareholder returns⚫ Enhance dividend policy to 4.0%
DOE. While strengthening
shareholder returns, use profit
accumulation during Seibu Vision
2027 to curb the increase inshareholders’ equity

20

Financial Strategy (2) Capital allocation
Use cash from operating cash flows and improved return on assets tosignificantly increase investment and shareholder returns during Seibu Vision
2027 and use leverage (interest-bearing debt) for large M&A opportunities
Challenge 280 results (FY2021 to FY2023: 3 years)• Business investment of ¥5.6 billion, mainly comprising
approximately ¥3.9 billion of construction of new factorybuildings• Shareholder returns of ¥1.8 billion
Cash in

Seibu Vision 2027 plan (FY2024 to FY2027: 4 years)• Plan for business investment of ¥12.0 billion or more
and shareholder returns of ¥5.0 billion

Cash out

Cash in

Increase returnon assets

Cash out

Use of interestbearing debt andcash on hand
Sale of shares,
improvement ofworking capital, etc.
¥

1.0 billion

Business investment(including JVs and
M&As)¥

Construction of new
precision machinery factory¥3.9 billion

Cash on hand

¥0.4 billion

Operating cash
flows, etc.
¥¥

7.0 billion¥

Business
investment

New factory scheduled to begin
operations in October 2024
Increase production capacity
by 50%

Dividends

Investment of ¥1.6 billion inprocessing center facility contributes
to operating cash flows in Seibu
Vision 2027 plan

5.6 billion

1.8 billion

Payout ratio 30%* Based on the end of FY2023 and holiday adjustments

12.0 billion or
more

Cash flow growththrough businessgrowthOperating cashflows¥

15.0 billion
Dividends¥

5.0 billion

DOE

4.0%

21

Financial Strategy (3) Investment plan

To realize sales and profit plans under Seibu Vision 2027 and pursue
growth beyond our 100th anniversary, we will allocate funds to each of
the three company-wide business strategies as well as tostrengthening management foundation.
◼ Distribution Equipment Business:
Establishment of sales/service bases and JVs

Accelerating
global expansion

Accelerating global
expansion¥1.3

Strengthening
managementfoundation¥3.1
billionbillion

Total

12.0

¥

Taking on
challenges into
new areas¥2.3
billionbillion◼ Precision Machine Business: Establishment ofbases and JVs in the ASEAN, North American,
and European markets◼ Distribution Equipment Business: Use of AI;
development of robotics and AGVs

Taking on
challenges into
new areas(FY2024 to FY2027: 4 years)

Enhancing profitability ofexisting businesses◼ Industrial Machine Business: Establishment ofa production base in Thailand

Enhancingprofitability ofexisting
businesses¥5.3 billion
Strengthening
managementfoundation◼ Industrial Machine Business: Development ofelectric, remote controlled, and explosionproof products◼ Precision Machine Business: Development of
new products for semiconductors, EVs,
medical, etc.
◼ Strengthening production system (including
remainder of ¥2.2 billion for new precision
machine building (out of a total of ¥6.1 billion)and ¥0.9 billion for distribution equipment)◼ Improvement of existing functions and facility
update◼ Smart factories (visualization, automation,
labor saving, decarbonization)◼ Company-wide digitalization and digitaltransformation (ERP, sales support, corporate
division)

22

Financial Strategy (4) Changes in dividend policy
In order to enhance returns to shareholders and achieve ROE of 10%, we aim toachieve DOE (dividend on equity*¹) of 4.0% for dividends from fiscal 2024.
Dividend policy until FY2023

Dividend policy from FY2024

Basic policy is to continue payment of stable dividends

Basic policy is to continue payment of stable dividends

Target payout ratio of

30%

DOE

(Dividend on equity) of approx.

FY2023resolution

Results

Dividends (excluding commemorative dividends)

Payout ratio

DOE

FY2024
forecast
4.0%

4.0%

Seibu Vision 2027 period

4.0%

4.0%

4.0%

4.0 %

100

80

31%

30%

31%

2.2％

33%
31%

3.0 %

¥84.0

2.8％
27%
60

31%

1.9%

2.0%

2.3％

2.2％

2.0%

2.0 %

40

¥40.0
20

¥30.0

¥28.0

¥33.5

¥40.0

¥40.0

¥40.0

1.0 %

0

0.0 %

FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2024FY2025

FY2026FY2027* 1. Dividend on equity = Dividends per share / Consolidated net assets per share at the end of the fiscal year. Results period shows the averages of dividends per
share / consolidated net assets per share at the beginning and end of each fiscal year.

23

Lead Tech Exploration.

Management Foundation

Management Foundation (1) Governance
Basic approach to corporate governanceOur company credo is “Unwavering trust opens the path to tomorrow,” andour purpose is “We will humbly explore the essence of technology, using it tocontribute broadly to the world with nature as our guide.” Our greatest task is
to contribute to the global market and earn its trust, while enabling ourbusiness to prosper. Therefore, our basic approach to corporate governance isto put in place a management system that is highly efficient, transparent, andsound, and to implement measures to maintain it.
We have established a Board of Directors, a Board of Corporate Auditors, aNominating and Compensation Committee, and President Management
Review Meeting, thereby enhancing the fairness and transparency ofmanagement and providing an efficient corporate governance system.

Status of efforts on corporate governanceFiscal year

FY2020

FY2022

Measures

Governance system
Board of Directors
Decides on basic policies for the Company‘s business management
and supervises Directors in the execution of their duties. Consists of
all Directors and all Auditors.
Board of Corporate Auditors
Receives reports on important matters related to audits, discusses
these matters, and makes resolutions. Consists of all Auditors.
Nominating and Compensation Committee
Established to further enhance corporate governance by

Increased the number of independent External Directors
from one to twostrengthening the independence, objectivity, and accountability of

Introduced performance-linked share-based
remuneration system

nominations, remuneration, etc. Consists of three or more members

Decided basic policy on Directors’ remuneration

independent External Directors.

functions of the Board of Directors that relate to Director
selected by the Board of Directors, the majority of which are

Established Nominating and Compensation Committee
Revised remuneration system for Directors

President Management Review Meeting

FY2023Disclosed Board of Directors’ skills matrix

Established to enable the President to confirm the progress of

FY2024Introduced an executive officer systemmanagement, point out issues, and establish measures

Issues to be considered•

Increase ratio of External Directors•

Policy with a focus on diversity of the Board of Directors

appropriately and quickly, and based on these efforts, to strongly
advance management activities. Consists of the President, Directors,
and Auditors. Relevant personnel are also invited to attend themeeting and provide opinions.

25

Management Foundation (2) Human resource development plan

Looking toward achieving net sales targets, we will work on
increasing labor productivity while enhancing personnel.
Targets

150 0

350 000

Sales andservices
130 0

300 000

110 0

250 000

Increase
net sales
peremployee900

200 000700

150 000⚫ Solution
proposals⚫ Strengthening
overseas sales⚫ Sales
optimization⚫ Strengthening
product
planning
Production
capabilities
and⚫ Development
developmentof specialists⚫ Production
optimization

Initiatives
•
•
•

•
•
•

Gathering customer needs
and improving planning andproposal capabilities
Language training, overseas
on-the-job training
Digital transformation of datacollection/utilization and sales
process
Understanding customer
needs and pursuing cuttingedge technology
Improving insights by rotatingeach process
Developing personnel for
promoting digitaltransformation

500

100 000

Sales andservices300

500 00Enhancepersonnel

100

-100

2023

2024

2025

2026

2027

Envisioned target achievement0⚫ Enhancing
overseas
personnel⚫ Optimizing
personnel
assignment⚫ Optimizing thenumber of
Production
production
andpersonnel
development ⚫ Enhancing
development
personnel

•

•

•
•

Hiring and appointing
overseas professionals
Rotating young employees
within business divisions

Responding to increased sales
and expansion of production
facilities
Efforts to hire and retain
experienced personnel

26

Management Foundation (3) Diversity plan
Basic
policyWe aim for our work environment to be a place where employees with diverse senses ofvalue and personalities recognize and respect each other, and where employees enjoy
mental and physical health, make full use of their talents, and find satisfaction in their work.

Promoting the active
participation of diverse
workforce⚫ Company briefings andinternships for female students⚫ Career design training⚫ Career development training

Creating a comfortableworking environment

Building a system forcareer development⚫ Improving long working hours⚫ Annual training, position-specifictraining, training for nextgeneration managers, training fornext-generation executives⚫ Use of various external training
courses (technical training,
language training, digitaltransformation training, etc.)⚫ Training by in-house instructors;
assignment to external training⚫ Human resource development tostrengthen overseas operations⚫ Increasing paid leave utilizationrate⚫ Preventing harassment⚫ Unconscious bias training⚫ Increasing the uptake of parental
leave⚫ Hiring qualified personnel anddigital transformation personnel⚫ Revising and maintaining
regulations and systems⚫ Promoting organizational
understanding, support forbuilding internal networks, etc.

⚫ Improving retention rate

trustedInitiatives

Targets

15%
1.5 times orPercentage of new hires
who are women
Number of female
managers (comparedto FY2023)

Employees who are

more◼ Setting “no overtime day” (oneday a week)◼ Setting target value for number ofdays of paid annual leave taken◼ Regular follow-up interviews withHR (for employees who have been
employed for less than 3 years)

bythose around themTake onchallenges
withcuriosity andpassion

Sense ofresponsibility
as aprofessional

Read ahead
and takeinitiative27

Management Foundation (4) Environmental improvement activities
We recognize that supporting decarbonization is key to our business development. By managing
climate-related risks and opportunities, we adapt our product development and market launches
to changes in the market environment as we work to contribute to a decarbonized society.
Metrics and targets

Governance and risk management

We will promote introduction of renewable energy and reduce GHG

We aggregate climate-related risks and opportunities at our
Company-wide Environment Management Committee, setting
environmental targets according to their importance and urgency,
and carrying out environmental improvement activities.
The status of these efforts is reported to the Company-wide Risk
Management Committee, which comprises Directors and provides
guidance and advice.

•

emissions from the use of electricity at our headquarters to zero by fiscal
2027.

Scope 1:535 t

Gasoline:

250 t

City gas:

84 t

LP gas:

28 tDiesel:

174 t

16%

FY2022 results

3,371 t84%

Scope 2:

2,836 tElectricity:

2,836 t•Board of Directors

Company-wide Risk
Management Committee
Company-wide
Environment
Management Committee

SDGs Promotion
SectionBusiness divisions, departments, business sites, andGroup companies* Disclosure of GHG emissions in accordancewith TCFD recommendations

Product development for decarbonization — examples of
initiatives in private sector valve segment
Explosion-proof
valve actuator

Decarbonization
using hydrogenand ammonia
Risk ofgas
explosion
Steel manufacturing andpower generation••

Increased demand

Amid transition to a decarbonized society, many industries such as steel
manufacturing and power generation have been adopting
decarbonization technologies using hydrogen and ammonia. These
technologies involve handling hydrogen and ammonia, explosive gases,
in high temperature/high pressure environments, giving rise to theneed for valve actuators with high explosion-proof performance.
Using the explosion-proof technology that we have been cultivating formany years, we are developing explosion-proof valve actuators
compatible with hydrogen and ammonia. We perceive shifts incustomer demand as earning opportunities, and will work to strengthen
product competitiveness through decarbonization.

28

All forward-looking statements in this document
are based on the Company’s judgments andassumptions that are made using information
currently available and contain risks anduncertainties. Therefore, actual results may differ
from these forecasts.

Seibu Electric & Machinery Co., Ltd.
Tokyo Stock Exchange Standard Market and Fukuoka Stock Exchange(Securities Code: 6144)
Contact Information: Corporate Planning Department
TEL: +81-92-941-1500
FAX: +81-92-941-1511
https://www.seibudenki.co.jp/ir/