Shinwa Co., Ltd.

Mid-term Corporate Plan
FY2025/3-FY2029/3©Shinwa Co.,Ltd.All Rights Reserved.

Contents

01

02

Capital Policies

Purpose1

Procurement and allocation of cash

13

Company overview

2

Basic policy regarding capital policies

14

Initiatives to improve PBR

15Social Issues and Shinwa Group’s Value Propositions
Social issues to address
Shinwa Group’s value propositions

03

04

Shinwa Co., Ltd.

3-4
5

Overview of the Mid-term Corporate Plan
Position of the Mid-Term Corporate Plan

6

Targets of the Mid-Term Corporate Plan

7

Targets and initiatives in individual businesses

8-9

Priority areas during the Mid-Term Corporate
Plan period

10-12©Shinwa Co.,Ltd.All Rights Reserved.

05

Creating a Sustainable Society
Shinwa Group and sustainability

16

ESG initiatives

17

Human capital management policy

18

01
Shinwa Co., Ltd.

©Shinwa Co.,Ltd.All Rights Reserved.

Purpose

Protecting livesand supporting
the future
The products and services offered by the Shinwa Group are
all directly connected to users’ lives and daily lives.

The purpose of our existence is to offer products andservices that can be used safely, adding value andsafeguarding lives and daily lives.
We aim to consistently provide value to help
communities thrive and individuals leadfulfilling
lives, thereby contributing to a sustainablesociety.

©Shinwa Co.,Ltd.All Rights Reserved.

1Company overview
Trade nameShinwa Co., Ltd.

Head office

Kaizu-shi, Gifu

Representative

Kurio Noritake, President and Representative
Director

Establishment

September 1977

Share capital

153 million yen

Business structure

Logistics
Equipment Business

Number of employees 143 (as of March 31, 2024)

3.69

Securities code

billion yen

3447 (Standard Market of the Tokyo Stock
Exchange and Premier Market of Nagoya StockExchange)

History
1977

Shinwa Shoten begins its business operations.

1978

Starts selling Jack Base scaffolding materials.

1988

Develops Shinwa Catcher. Enters the system scaffold market.

2003

Establishes the Logistics Equipment Division.

2018

Listed on the Tokyo Stock Exchange and Nagoya Stock Exchange

2024

Acquires the shares of a major scaffold construction company,
making it a Group company

Forecast for FY2024/3

12.67

billion yen

Scaffold
Equipment Business8.98
billion yen©Shinwa Co.,Ltd.All Rights Reserved.

2

02
Social Issues and Shinwa
Group’s Value Propositions©Shinwa Co.,Ltd.All Rights Reserved.

Social Issues to Address (1) Aging of Social Infrastructure
Percentage of infrastructures that were built over 50 years ago

Projections for infrastructure maintenance and management expenses
Preventive maintenance(trillion yen)

Breakdown maintenance12.3 trillion yen* The figures provided are maximum estimated values for both of them.

1250%

1053%

6.5 trillion yen

85.2 trillion yen

35%

618%
0%

4
March 2020

March 2030

March 2040

The age of more than half of all infrastructure* isestimated to exceed 50 years in March 2040.
* 730,000 road bridges, 11,000 tunnels, 46,000 river management facilities, 480,000 km of sewer pipes, and 61,000 harbor facili ties

FY2018FY2023

FY2028FY2038FY2048

Infrastructure maintenance and management require significant
and continual investment for both preventive and corrective
maintenance.

Source: “Present State and Future of Social Capital Aging” on Infrastructure Maintenance Information,a website of the Ministry of Land, Infrastructure, Transport and Tourism

Maintaining infrastructures to support essential functions for lives and society, especiallypreventive maintenance and management, is a crucial aspect of the Fundamental Plan for
National Resilience. Long-term strategic business investments are expected to continue.

©Shinwa Co.,Ltd.All Rights Reserved.

3

Social Issues to Address (2) Decreasing Numbers of Construction Workers
Employees

Nominal construction investment amountInvestment618(trillion yen)70.3 trillion yen

568

80.0

Employees(10,000 persons)600

4.79 million people
504

503

70.0

494

66.4

60.0

50.0

56.8

500

400

Construction investments amounted to 70 trillion yen inFY2023.
They have been on an upward trend since FY2010.
In contrast, the number of construction workers has beendecreasing. The average number in 2022 was 4.79 million.
Construction workers are aging at a faster rate compared toworkers in other industries.

56.6
51.6

There will be improvements in social institutions to secure
workers, including limiting working hours and increasing wages.
41.9

More efficient construction work is required.
2002

2005

2010

2015

2020

2023 (Year)

Source: Labor Force Survey of the Ministry of Internal Affairs and Communications, and Estimate ofConstruction Investment FY2023 of the Ministry of Land, Infrastructure, Transport and Tourism©Shinwa Co.,Ltd.All Rights Reserved.

4

Shinwa Group’s value propositions

Development ofproducts that can beused by workers
without special skills or
physical strength

Development ofproducts that can beused safely anywhere
for a wide range of
construction projects,
including the building ofdetached houses andinfrastructures

The Shinwa Group will work・ Aging of social infrastructure
・ Changes in construction work
environments

Shinwa Group
Products andservices that improve
efficiency atconstruction sites
Ability to handle a wide
range of operations,
including sales, rentals,
and equipmentinstallation services

Social issues to beaddressedas one to contribute tosolving issues and・ Preparing for major disasters

continue to grow.

・ Environmental considerations
・ Surging raw materials prices

Fulfill our purpose of protecting lives and supporting the future
in order to address social issues and achieve growth for the Group©Shinwa Co.,Ltd.All Rights Reserved.

5

03
Overview of theMid-term Corporate Plan

©Shinwa Co.,Ltd.All Rights Reserved.

Overview of the Mid-term Corporate Plan
Sale of scaffolding equipment

Period of the Mid-term Corporate Plan

Target for FY2029/3

Scaffolding service

20.0

logistics equipment

Lay foundations for steadyand rapid growth
We aim for consistent growth rather than a sudden jump.
We plan to broaden our business horizons,
create synergies, and enhance them.

billion yen

Target for FY2027/3

17.5

billion yen

Target for FY2025/3

16.0

billion yen

Period for pursuing long-term themes

Accelerate growth and expand
the business areas
We aim to transform our businesses and generate
new value across different businesses, thereby
achieving substantial growth.

Period of the Mid-term
Corporate Plan

Period for pursuinglong-term themes©Shinwa Co.,Ltd.All Rights Reserved.

6Target in the Mid-term Corporate Plan

123Profit target

Revenue target

The last period of theMid-term Corporate Plan

The last period of theMid-term Corporate Plan

20.0

Operating profit

2.4
3.0
billion yen

EBITDAbillion yen

ROE target
The last period of theMid-term Corporate Plan

8.5

%billion yen

Forecast for FY2024/3

Target for FY2025/3

Target for FY2027/3

Forecast for FY2029/3

12,67816,00017,50020,000

700

1,600

1,900

2,400

EBITDA (million yen)

1,3112,300

2,500

3,000

EPS (yen)

29.46

71.91

90.51

114.57

ROE

2.7%

6.4%

7.4%

8.5%

Revenue (million yen)

Operating profit (million yen)

Payout ratio

40% or more

40% or more

©Shinwa Co.,Ltd.All Rights Reserved.

7Targets and Initiatives in Scaffolding Equipment Division

15,640(Million yen)

Revenue target for FY2029/3

15,00013,28015,64012,158million yen 10,000
8,981

Overview
Manufacturing, sale, and rental of scaffolding equipment used atconstruction sites

5,000

Scaffolding equipment installation services at construction sites
Measures■

Increase sales of infrastructure products■Develop high value-added products and services and promote
their sales

0

Expand use of wedge binding type scaffolding through equipment
installation services

The revenue targets from the fiscal year ending March 2025 include planned revenue in construction-related businesses (approx. 1.2 billion yen in each year).

■■

Forecast for FY2024/3

Target for FY2025/3

Target for FY2027/3

Target for FY2029/3

Strengthen the rental business©Shinwa Co.,Ltd.All Rights Reserved.

8Targets and Initiatives in Logistics Equipment Division4,360
4,220

Revenue target for FY2029/3(Million yen)

4,360

4,000

million yen

Overview

3,697

3,842

3,000

2,000

Manufacturing, sale, and rental of customized transportation andstorage equipment for various industries, and ancillary services
Manufacturing, sale, and rental of multi-purpose logistics equipment

1,000
Measures■

Offer solutions, leveraging our development capabilities andexpertise. Expand the service areas■

Provide products at low costs and with short delivery times,
leveraging our manufacturing and trading capabilities■

0Forecast for FY2024/3

Target for FY2025/3

Target for FY2027/3

Target for FY2029/3

Expand the rental business©Shinwa Co.,Ltd.All Rights Reserved.

9Priority Area (1) Suspended System Scaffolds for Bridges
Three out of four
Overall infrastructures
Road bridges

road bridges areover 50 years old.

When comparing the speed of aging among overall social infrastructure, the aging ofroad bridges is fast.
Aging road bridges require immediate preventive maintenance.

50%

The use of suspended system scaffolds is increasing in bridge
construction work on national roads under the directsupervision of the Ministry of Land, Infrastructure, Transportand Tourism.
■ The use of suspended system scaffolds was specified for abridge project by Nippon Expressway Company.
■0%March 2020

March 2030

March 2040

Source: “Present State and Future of Social Capital Aging” on Infrastructure
Maintenance Information, a website of the Ministry of Land, Infrastructure,
Transport and Tourism

Scaffolding market
The Company has formed alliances with a major domestic scaffold
leasing company and a bridge construction firm and entered thebridge repair market.
■ The Company aims to quickly promote the use of suspended systemscaffolds to improve safety and efficiency and boost sales byutilizing its manufacturing capabilities and the sales channels andexpertise of its business partners.
■

35.0

Bridgerepairs

billion yen(The Company’s estimate)©Shinwa Co.,Ltd.All Rights Reserved.

10

Priority Area (2) Scaffolding Installation Services■

Construction investments remain steady. Meanwhile, the number of construction
workers is decreasing, and they are aging.

■

The prices of construction materials have been rising overall for a considerable
amount of time, and there is a significant change in customers’ attitudes towards
procuring scaffolding equipment.

Scaffolding installation market

463.6

Domestic

billion yen

Source: An estimate for FY2022 by a research firm
contracted to provide the Company with research

Leading scaffold manufacturer

One of the nation’s leading
scaffolding installation
service providers

From manufacturing to installation
Building a strong value chain
Tokai 3prefectures©Shinwa Co.,Ltd.All Rights Reserved.

47.0

The Group aims to expand its market share in sales and installation
services and to create new scaffolding and construction services.

billion yen
11Priority Area (3) Strengthening the Logistics Business and Expanding into New Areas

Strengthening ofexisting domains

Expansion intonew areas

Strengthening the revenue base

Labor-saving

Offer low costs and short delivery times toincrease repeat projects

Begin selling AGVs (automatic guidedvehicles) and providing consulting services
Capture the demand for labor-saving inwarehouse operations

Expansion of rental business
Form alliances with leading companies toexpand the rental business

Logistics
Equipment
Business

Overseas development
Develop our system to provide products and services
by leveraging our experience in delivering logistics
equipment overseas

Pursuing the convenience

Actively expending into new areas

Enhance the e-commerce site and develop othersystems to procure equipment through simple andconvenient procedures

Discover needs for transporting and storing
specialized goods and offer new value tofurther expand business areas

We will offer solutions in response tochanging social issues.
©Shinwa Co.,Ltd.All Rights Reserved.

12

04
Capital Policies©Shinwa Co.,Ltd.All Rights Reserved.

Procurement and allocation of cash
Cash inflows (procurement)

Cash outflows (allocation)
Investments in the five fiscal years

Cash provided by operating activities
in the next five fiscal years

7.0

billion yen to

8.0

billion yen

2.0

billion yen or more

Plan to invest in replacing equipment, expanding business sites, and acquiring rental assets

Shareholder return in the five fiscal years

2.0

billion yen to

3.0

billion yen

Repayment of interest-bearing liabilities

Interest-bearing liabilities

Additional investment

Will actively utilize interest-bearing debt while considering the balance between
interest-bearing debt and equity capital.

Will actively invest in attractive M&A opportunities.

©Shinwa Co.,Ltd.All Rights Reserved.

13

Basic policy regarding capital policies

1ROE target

2

The last period of the Mid-term
Corporate Plan

8.5%Dividend payout ratio
target40% or more

ROE targets in the Mid-term Corporate Plan

Targets for annual dividend per share

(％)

(Yen)

1050
40

7.5

30
520
2.5
1000
Forecast for
FY2024/3

Target for FY2025/3

Target for FY2027/3

Target for FY2029/3

Target for FY2025/3

Target for FY2027/3

Target for FY2029/3©Shinwa Co.,Ltd.All Rights Reserved.

14

Initiatives to improve PBR

Initiatives

Indicator

Increasing profitsImproving ROE(return on equity)
Creating value for themedium to long term

Shareholder returns
Increasing PER
Implementing ESG andsustainability practices

Fostering growth expectations

Achievements

Boosting the stock
price
Improvement of PBRReducing capital cost

©Shinwa Co.,Ltd.All Rights Reserved.

15

05
Creating a Sustainable Society©Shinwa Co.,Ltd.All Rights Reserved.

Shinwa Group and sustainability
The growth of the Shinwa Group’s business is linked to thesustainable growth of society.
Manufacturers

SupplyDemolition

On siteProducts can be used
間 for a long period if
repeatedlythey are maintained properly.

Our products are mostly madefrom iron, which is recyclable.

Users
Products are used in a variety ofconstruction sites to support thesustainability of society, including sites for
detached houses and infrastructure.

Products that reach the end of theirlife cycle are scrapped andtransformed into raw iron materials.

Recycling

Storage andMaintenance

躍Use©Shinwa Co.,Ltd.All Rights Reserved.

16

ESG initiatives

Environment

SocialGovernanceContributing to asustainable society

Work style reform andpromotion of diversity

Transparent and soundcorporate management

Development of products that help reduce
environmental impact, an efficient supply ofproducts to industries that operate in a carbonneutral manner

Promoting businesses that aim to addresssocial issues

Effective governance(Appointment of outside directors, etc.)

Strengthened human resource development

Initiatives to reduce CO2 emissions(Vehicle electrification, emissions monitoring)

Improvements to the workplace environment

Constructive dialogues with investors(promoting investor relations)

Reducing waste(improving the yield rate, going paperless)Promoting diversity and inclusion
Supporting regional revitalization

Sustainable growth and an enhancement of corporate value©Shinwa Co.,Ltd.All Rights Reserved.

17

Human Capital Management Policy
Creating a dynamic and energetic company by effectively utilizing and energizing
human resources

Creating a work
environment with a culture
and activities that
employees can take pride in

A cheerful atmosphere thatenables employees to live
vivaciously

Sustainable improvement ofcorporate value

Creating a company
where employees
work for a long time

Creating ideal
employees and anideal organization
Human resource development◼ Developing the next generation of employees◼ A system for training employees to demonstrate theirfull potential, and fair.
◼ Performance-based personnel evaluation

Organizational development◼ Building a work environment that allows
employees to work energetically◼ Implementing a compensation plan that increases
job satisfaction◼ Events and benefits that help revitalize the organization

DE&I◼ Empowering employees regardless of their race orgender◼ Building systems to support diverse human resources◼ Creating workplaces where employees cancollaborate with each other©Shinwa Co.,Ltd.All Rights Reserved.

18

Cautionary note
The plans, forecasts, strategies, and other forward-looking statements in this document are based on
information available at the time of preparation and inherently involve risks and uncertainties.
Due to the risks and uncertainties, actual results may differ from the projections and forecasts in this30-7, Bushigawa, Hirata-cho, Kaizu-shi, Gifu

document.

Corporate Planning Dept.

The information concerning companies or groups outside the Company is quoted from public information

Tel / +81-584-66-4436

and elsewhere. The Company does not verify in any way or guarantee its accuracy, appropriateness.

E-mail / ir@shinwa-jp.com©Shinwa Co.,Ltd.All Rights Reserved.