Note: This document is a translation of the original Japanese version and provided for reference purposes only.
In the event of any discrepancy between the Japanese original and this English translation, the Japanese original
shall prevail.

New Medium-term Corporate Management Plan

Medium-term Management Plan 2026
FY2024 - FY2026

May 13, 2024

SHIBAURA MACHINE CO., LTD.

1

INDEX

1

Previous Medium-term Corporate Management Plan

Review of “Management Reform Plan”
FY2020 - FY2023

2

New Medium-term Corporate
Management Plan
“Medium-term Management Plan 2026”
FY2024 - FY2026◆ Basic policy◆ Company strategy◆ Corporate strategy* Results forecasts and other descriptions used in this material contain forward looking statements which are basedon information that is currently available and assumptions the Company deems rational. Actual results may vary
due to various changes and factors in the external environment.
* The term "BSF" used in this material refers to "LiB separator film production lines”.
21

Previous Medium-term Corporate
Management Plan

Review of“Management Reform Plan”
FY2020 - FY2023

3

“Management Reform Plan”
Quantitative Targets and Results

Sales
Operatingprofit
Operatingprofit ratio
ROEDividendpayout ratio

FY2019FY2023

FY2023Results

Management Reform Plan
Quantitative Targets

Results

116.7 Billion yen

135.0 Billion yen

160.6 Billion yen

3.5 Billion yen

10.8 Billion yen

13.6 Billion yen

3.0%

8.0%

8.5%

8.6%

8.5%

17.8%

28.0%

Target 40%

52.1%*Note 1

* Note 1) Dividend payout ratio for FY2023 results: Gain on sale of a partial lot on the south side of the Sagami Plant is to beappropriated to the acquisition of proprietary interest of a building established on the transferred land by thetransferee according to the equivalent-exchange method, and therefore it was excluded from net income in this term.
Additionally, the dividend payout ratio was calculated as a total payout ratio which includes treasury stock acquisitions
announced on May 13, 2024.

4

Results and Issues
Strategies/Measures
Business
restructuring
M&A

Plant
restructuring
Productivity
increase

HR system
reformResults

IssuesReinforcing functions
through M&A

Reinforced engineeringsolutions with the acquisitionof POKKA MACHINE Co., Ltd.

Business restructuring

Improved work efficiency throughthe consolidation of functions
and offices for each Company

Numazu Plant
restructuring―

Numazu Plant
restructuring andinvestment plans werepostponed because
priority was placed onbuilding a system forincreasing production toexpand the volume ofsales in response to rising
EV sales and to meetgrowing demand for BSF.

Separation of production
models between domestic
and overseas plants

Increased productivity by shifting
the production of generalpurpose models overseas

Building a system for increasing
production by establishing a
new plant in India

Voluntary early
retirement

Reduced fixed costs

Further increasing sales
per capita

Introduction of a newHR system

Acquired and retained
highly skilled professionals

Boosting recruitment
through branding52

New Medium-term Corporate
Management Plan
“Medium-term Management Plan 2026”
FY2024 - FY2026

Basic Policy

6Positioning of Medium-term Management
Plan 2026
Megatrends (mid- to long-term)
Climate change and resource shortages / demographic changes / technological advancements

FY2024 – FY2026

FY2020 - FY2023

FY2030Medium-termManagement Plan 2026

Management Reform Plan

• Divisional system
 Company system• Newly established R&D
Center and Production Center

Changes in the businessportfolio in line with themarkets• Implementation offinancial strategy

Implement business structurereform300-billion-yencompany

Increase sales volume to
300 billion yen
Consistently achieve sales of 200billion yen

Level up as a highly profitable company
through the well-balanced implementationof offensive and defensive strategies

7Basic Policy of Medium-term Management
Plan 2026
Quantitativetargets
Consolidated
target value for FY2026

Sales

Operating profit marginROE

200.0 Billion yen

10.0%

9.5% or more
(Reference) ROIC 9.0% or more

Ascertain growing markets and change the businessportfolio to maximize overall profit
Policies indicating
business direction

Engineering solutions to help increase customer productivity
Transform to turnkey equipment sales and direct sales
Arrange business infrastructure to make the leap
toward becoming a 300-billion-yen company in FY2030

Fundamental
policies

Implement a human resource strategy in connection
with changes in the business portfolio

Promote ESG management
8Profit/Loss Improvement Waterfall(FY2023  FY2026 Operating Profit)

Profit is assumed to be improved by about 6.4 billion yen compared to FY2023 through theimplementation of cost reduction and other measures, including increasing sales quantities, higher unit
prices, joint procurement and personnel optimization (personnel increase control and reassignment).
Unit:
100 million yen

Operating profit ratio
for FY2023

488.5%
136

Operatingprofit for
FY2023

Cost
reduction

Sales-related
measures2

73

Operating profit
margin for FY2026

10.0%
200

272040

Increase insales
volumePersonneloptimization,
cost control
measures

Increase insales unit
price

Increase in sales
administration
costs due tohigherpersonnel costs,etc.

Reduction inmaterial costs
due toreinforced
joint
procurement

Reduction inlabor costs
due toincreased
productivity

Reduction inhead office
expenses due toreassignmentof personnel, etc.

Operatingprofit for
FY20269

2New Medium-term Corporate
Management Plan
“Medium-term Management Plan 2026”
FY2024 - FY2026

Company Strategy(Strategy by Product Segment)
10

Domains in Medium-term Management
Plan 2026
Environment(carbon-free society)

EnergyWind power
generation

Market size
22: 902GW
30: 2420GW
40: 4337GW

India (growing market)
Power generation(mainly thermal)
Growing populationand industries
20: 378GW
24: 492GW
29: 753GWCGAR 8.8% (in thecoming 5 years)

Machine Tools

Secondary batteries,
Market sizestorage
19: 87.8 B＄batteries
27: 220.0 B＄

Automobiles
Social norms

xEV sales quantity
22: 16,900,000 unit
25: 24,240,000 unit
30: 34,500,000 unit
Injection Molding
Machines
Die Casting Machines

Recycling

Automobiles

Automobile market
20: 2,940,000 unit
22: 4,720,000 unit
30: 6,000,000 unit
Injection Molding
Machines
Die Casting Machines

Consumer goods Growing urban

population ratio
01: 28%
20: 35%30: 40%Extrusion Machines―Machine Tools

Extrusion Machines

xEV

Automation (labor shortage)

Self-driving (sensors)
Market size
21: 1.7 B＄
28: 6.3 B＄

High-Precision
Machine tools

Engineering solutions

Consumer durables andpersonal care products grow as
consumers’ income levels andpurchasing power riseControl Systems

Injection Molding
Machines

Injection Molding
Machines

11

Divide into “Offensive Business” and“Defensive Business”
Offensive business
Re-entry into
untapped regions◼ Europeanmarket

Injection

Extrusion

Precision

Injection Molding
Machines

Extrusion
Machines

High-Precision
Machine tools

Growing markets

Priority market◼ Indian market
Post-growth markets◼ North AmericanmarketGain insight into growing markets and input
management resources to increase the volume ofsales, with the aim to maximize profit amounts

Defensive businessDC

Machinetools

Control

Die Casting
Machines

Machine Tools

ControlSystems

Focus efforts on selling high value-added
products instead of increasing thevolume of sales from the level in FY2023,
with the aim to increase profit margins
12Offensive Business

Injection
Injection Molding
Machines

Management Reform Plan

Medium-term Management
Plan 2026• Downturn of Chinese market• Motivation to invest in the U.S. market
reaching a plateau• Brisk Indian market, establishing a newplant• Achieve cost reduction through the effectsof economy of scale, etc. by manufacturing
the same models at plants around the world• Put the new plant in India on track toincrease production• Capture the recovery of the U.S. market• Handle large resin parts for automobiles• Increasing EV sales• Rapid increase of BSF sales due toExtrusion
strong demand for batteries
manufactured in China
Extrusion• Became the backbone of our GroupMachines

Precision
High Precision
Machine tools• Decreased sales of smartphone lenses(molds) in China• Explore markets primarily in North America
and Europe in view of future risks in China’s
political environment and economy• Focus on the development of products tosupport next generation batteries• Aim to achieve sales of 100 billion yen• Explore markets other than China(North America, Europe and India) bymaking the best use of overseas injection
resources• Explore markets of products other thansmartphone lenses• Aim to achieve sales of 10 billion yen

13Defensive Business
Management Reform Plan

Medium-term Management
Plan 2026

DC• Lower demand for engine blocks due
to increase in EV sales• Produce CD effect through integration
with Injection Molding Machines• Develop technologies to enable gigacasting (establishing low pressurizationtechnology*)

MachineTools• Brisk environment for receiving orders
in the first half of the year
• Slowing down of the environment forreceiving orders as capital investments
reached a plateau• Eliminate waste through full build-toorder production• Capture opportunities to meet thedemand for large Machine Tools withincreasing wind power generation andthe trend toward larger mold for gigacasting• Downturn of Chinese market(general-purpose robots)• Boost system engineering sales
through M＆A and alliances• Promote sales and commercialize dualarm collaborative robots

Die CastingMachines

Machine Tools

ControlControl Systems* Low pressurization technology: The technology to realize, for example, a die-cast molded productwith clamping force of 3500 t, which used to be produced with 6000 t-class clamping force.

14

Changes in Business Portfolio
FY2023 “Management Reform Plan”
85.0* Balloon size indicates business scale.

FY2026 “Medium-termManagement Plan 2026”

85.0

75.0

75.0

65.0

65.0

55.0

55.045.045.0

Growth potential

Growth potential

Extrusion
Machines

35.0

High-Precision
Machine tools

35.0

25.0

25.0

Control
Systems

15.0

Injection Molding
Machines

15.0

High-Precision
Machine tools

Die Casting
5.0Machines

ControlSystems

5.0

-5.0
-15.0 Injection Molding-5 Machines
0Extrusion
Machines

MachineTools-5.0
MachineTools

510

Profitability

Die Casting
Machines-15.0
152025-5* FY2018 is the reference point of growth.

0510

Profitability

15202515

2New Medium-term Corporate
Management Plan
“Medium-term Management Plan 2026”
FY2024 - FY2026

Corporate Strategy(Reinforcing Business Infrastructure)16

Overview of Business Infrastructure
Reinforcing Strategy and Measures
Increasing added value(Improved profit margin)• Portal site
• Controlled management• Direct sales

Reinforcing
system sales

Reinforcing
service business

Sales andservice

CRM

Production(plant) • Global

Global production systeminventory
management

Chinese and Thai plants
New India Plant
Operation
Production
increasemanagement

Production and operation efficiency
Introduction ofnew ERP

Quality management• Quality increase

Businessinfrastructure• Recruitment
PR

Reorganization ofNumazu Plant• Extrusion
MachineTechnical Center• Molding plant• Structural analysis, production manual(using animation)

Reinforcing business infrastructure
Branding

HR strategy

Procurement
function
Global control

New 3D-CAD
Utilization phase

Corporatealliances (M&A)

Research &development

Profitability ofdistribution center

Reinforcing IR• Strengthening
Integration
capabilities• Assignment

ESG management
17

Reinforcement ofCompany-wide Service Business
Clarify profit/loss in services and profit/loss in product segment tomaximize overall profit.
《 Function of company-wide service management company 》• Manages service activities in Japan and other countries under uniform rules• Promotes consolidation of service offices• Pursues operating efficiency by centralizing back-office functions• Manages service profit/loss of the entire GroupMatrix

SHIBAURA MACHINEENGINEERING CO., LTD.
1st phase

3rd phase

Injection and die castingmachine service company
in Japan

Machine tools service
division in Japan(April 1, 2024)

2nd phase

Extrusion/control
service division in Japan

Service division
Product division(SHIBAURA MACHINE only)(parts/service)

Separation

Product/Retrofit division

Overseas division for
Injection/DC/Machine tools
service

Service division(parts/service)

Separation

Overseas affiliates

Product/Retrofit division
18

Reinforcing System Engineering(From Single Unit Sales to System Sales)
Skills transfer issues◼ SCARA robot applications

Shrinking working-age
population

Rising labor costs◼ Automation of postprocessing of injection
molding machines etc.

Customer’s need for turnkey/all process automation
Achieve production systems capable of solving
customer’s issues by integrating internal andexternal technologies focused on control
equipment and robotics

March 1, 2024
Acquired POKKA MACHINE(currently TECHNOLINK CO., LTD.)
Sales/technology/production/service
functions
FY2023FY2026 sales target

FY2030 sales target

5.0 billion yen

10.0 billion yen•

Increase in scale and profits by continuously building up functions through M&A,
alliances and other means•

Launch at the company-wide level (change in sales mindset)

19

Development toward Sustainable Growth ofExtrusion Machines Business◼ Development of solid-state battery for vehicles
Lithium-ion batteries

Structure of solidstate battery

Solid-state battery

Semi-solid battery

Development
project

Separator film is also
used in semi-solidbatteries

Development of next
generation machines(wide and fast)

Developmentproject

Utilization of high-precision
coating machines(Improving the speed and accuracyof existing machines)

Electrode materials mixing device（Batch production ⇒ Continuous production method）

Negative
electrode
layer

Positive
electrode
layerElectrodelayer

Electrodelayer

Currently developing new
coating machines to makethe electrode layer
uniform and stable(during FY2024)

Product composition of Extrusion machines business (Future)
Commencement of mass-production ofin-vehicle solid-state batteries
Sales composition ratio◼

LiB separator film
production lines

Solid electrolyte

New precision coating machines etc.
BSF(Used for semi-solid
batteries and stationary
storage batteries)••TimeUpdates to Extrusion Machine Technical Center(area expansion)Accelerated development in collaboration withR&D Center
20Cash-flow Plan
Unit: 100 million yen

Return to shareholders

150～
Sales CF

100～
300
70
FY2023
Cash anddeposit
balance•

M&A••

Consider borrowing options
depending on the size of contract

Contracts contributing to expansion in the European market
Reinforcing engineering solutions functions
R&D and others•••

516

Extrusion: Developing machines for next-generation
batteries (semi-solid-state and solid-state batteries)
Die Casting: Enabling giga-casting
Injection: Lineup of global strategy products
Capital investment

330••Planned
cash receipt

Aim at 40% return ratio

Provide dividends based on profit andadditional returns or treasury stockacquisitions depending on the state of
cash at hand

Planneddisbursement•••

Renewal of the molding plant (Numazu Plant) to increase
production capacity
Renewal and expansion of the area of Extrusion MachineTechnical Center to develop new machines
Investment in renewable energies, etc. to protect theenvironment
Renewal of the company-wide enterprise system (ERP)
Other21

Policy of Return to Shareholders
Our basic policy is to maintain stable dividends and to distribute profits in line with business performance
while strengthening our management structure to improve profitability.
With regards to retained earnings, we will make strategic decisions on future business development for thepurpose of continuous corporate growth, and effectively invest in production facilities, technologicaldevelopment, overseas expansion, and other areas. We will also continue to return profits to shareholders in
an appropriate manner.
Policy continues
Ratio of return toUnit: 100 million yen
shareholders: about 40%

18

2017

2018

2120192020

14.6 billion yen
for 4 years
26
18

2021

2022

15.0 billion yen
for 3 years

Ordinary dividends

17

Extraordinary
dividends

48

Treasury stockacquisitions

54

Provide dividends based on profit andadditional returns or treasury stockacquisitions depending on the state ofcash at hand

2023

Management Reform Plan

2024

2025

2026

FY

Medium-termManagement Plan 2026

Extraordinary dividends paid in FY2020 were sourced from the proceeds of selling shares of NFT (NuFlare Technology, Inc.).
Treasury stock in FY2023 was acquired in Q1, 2024 taking into consideration the ratio of return to shareholders.

22Increasing PBR◼ Trends in PBR and share prices• Share prices in each FY are six-month moving average prices as of the endof March.
• The highest price in the period on the graph was 5,020 yen on July 3, 2023.
(PBR 1.14)

Share price (yen)

4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

3,333

1,868
0.79

2014

2,190

2,322

2,4230.61

2015

Share price

3,977

Share pricePBR

PBR

2,732

2,589

2.00

3,620

1.60

2,943

1.20

1.18
0.73

2016

0.64

2017

2018

0.76

0.76

0.96

0.80

0.80

0.87

0.40

PBR
2019

2020

2021

2022

0.00
2023

FY

• Maximize overall company profits with strict separation of “Offensive Business” and“Defensive Business” and control through management by policy.
• Improve profits and increase capital efficiency through the permeation of ROIC tree management.
(See next page.)• 2020: Introduced executive compensation and share compensation systems.  More oriented tocompensation linked to share prices (Under consideration for revision).
23

Permeation of ROIC Tree Management
ROIC

Operatingprofit• Explore markets in the U.S., India andEurope• Continue negotiations to raise sales prices

Orders received
Net Sales
Operatingprofit ratio

Cost to sales ratio
Direct selling
cost ratio
Sales administration
cost ratio

Accounts receivable

Inventory

Invested
capitalWorking
capitalTrade accounts
payable• Sell high value-added products(engineering solutions)• Improve profits by reinforcing service
business• Acquire CD by controlling global
procurement• Ensure machine specifications are
confirmed in sales• Injection: Control from Japan thedestinations of machines in global
inventory• Machine tools: Reduce wasteful work-inprogress through full build-to-orderproduction

Advance received

Fixed assets
Other assets/liabilities• Increase production efficiency by updating
molding plants and introducing a new ERP
system• M&A

Set a ROIC target for each product segment and link bonuses for managers andhigher executives to business results.

24

ESG Management

ESG•

Reduce CO2 emission by 50% (in FY2030 compared to FY2013)•Supports TCFD (May 2023)  June 2024 Disclosure•SSBJ  June 2024 Disclosure•

Improve CDP score (evaluation B or higher in 2026)•

Create carbon-neutral products•

Expansion of appointment of foreigners as executive officers•

Increase the ratio of female managers globally•

Continuously achieve targets for the legal employment of persons withdisabilities•

Carry out due diligence on human rights in line with UN guiding principles
on business and human rights and establish a mechanism to remedy
human rights violations.

•Ratio of women on the board of directors(currently 8%*  FY2030: 30% or more) * One female director out of a total of twelve board members•

Revise the executive compensation system (June 2024)25

Contributions to the GlobalEnvironment (Carbon-free Society)Endeavor to expand business scale and increase profit margins by providing
high value-added products that contribute to the global environmentPowerdistribution,
recharging

Embed

Renewable energy

Secondary battery
Storage battery• Turbine• Pivot• Separator film
• Battery assembly line

Machine Tools

BSF, industrial robots

DiscardCASE(reduced weight, self-driving)• Foaming molding /carbon fiber molding• Lightweight car bodies• Self-driving sensor lens

Injection Molding Machines,
Die Casting Machines,
High Precision Machine tools

Recycle• Chemical recycling

Extrusion Machines26

Human Resource Strategy
Basic policy ofMedium-termManagement Plan 2026

Timely review of business portfolio
in response to market fluctuations… possibility of withdrawal or shrinking of business

Rebuild

Facilitate the mobility of internal
human resources

Measures

Training forapplicants
Selective training

Education by class

Improved
performance
Improved
performance

Performance

Education of
global professionals

Education system

Personnel evaluationsystem

Training
Education

newcomerTraining

Improved
performance
Training

Transfer

Transfer /assignment

Assignment Employing mid-career
professionals• Promote women to
executive positions• Employ persons with disabilities

Recommendations ontechnical qualifications

Continued
service
Recruitment PR

Branding

Salary system

Retirement
allowance system

WelfareService years  Focusing on employee’s contribution to the company

Establish and review employment base27

History of
Corporate Governance Reform
Medium-termManagement Plan 2026

Separatedbusinessmanagementand execution

Outsidedirectors

Committees(advisorycommittees tothe board ofdirectors)

Directorcompensation

2013

2013

Introduced executive officer system

Appointedoutside directors

2018

Number of outsidedirectors to one
third of the total

2019

Transferred to a company with an Audit
and Supervisory Committee from acompany with Board of Auditors

2019

Outside directors make up themajority(currently 7outsidel directors and 5 internal directors)

2020

Female outside director
took office2015

Established Nomination
Advisory Committee

2020

Outside director took office as
the chairman of the Nominating
Advisory Committee

2015

Established Remuneration
Advisory Committee

2020

Outside director took office as thechairman of the Compensation
Advisory Committee

2020

Introduced sharecompensation system

Increase the ratio offemale directors(30% or more)

Revise executive
compensation system

28

Shibaura Machine Co., Ltd.
Fukoku Seimei Bldg., 2-2, Uchisaiwaicho 2-Chome, Chiyoda-ku, Tokyo 100-8503, JAPANTEL (03)3509-0444 FAX (03)3509-0336 URL : http://www.shibaura-machine.co.jp

29