Innovating new ideas today. Becoming the norms of tomorrow.

～ SWCC value creation stories ～Future business growth and capital strategy
December 18, 2023

TSE PRIME : 5805

Speaker

Managing Executive Officer

Executive Officer

Outside Director

In charge of Management Strategy

In charge of Capital Strategy

Member of the Audit Committee Chairman of
the Nomination and Remuneration Committee

Tetsuo Komata

Toshiharu Kamijo

Yuji Sakakura
2

Table of Contents

１．Our growth strategies

２．Our capital strategy

３．Our growth and capital strategy from the perspective of our external directors

3

FY2023 Full-year Forecasts (After Upward Revision)
H1/H2 Net Sales(100 million yen)

1,200

FY2022 Result

1,166

FY2023 Plan

(100 million yen)
2,300
2,100

1,068

Full-year Net Sales

Ordinary Income

1,000

11.5 billion yen

Up
2.8%

1,023
984

2,150

2,091

1,900

(YoY: 10.6% increase)

1,700

800
H1

1,500

H2

FY2022 Result FY2023 Plan

(100 million yen)

H1/H2 Operating Income

FY2022 Result

FY2023 Plan

110

70

62
50

100

45

43

0

H1

H2

7.5 billion yen

Full-year Operating Income

120(100 million yen)100

Net income
attributable toowners of parent

115
105

Recordincomes
expected(YoY: 20.3% decrease)

Dividend/
Payout ratio

Up
9.8%

75 yen/30%

90(YoY: 15 yen increase)

80

Interim: 35 yen, Year-end: 40 yen
Total: 75 yen

FY2022 Result

FY2023 Plan

4

Final year target of the medium-term management plan
Sales and operating income composition ratio / Financial strategy＜ Composition ratio ＞
Energy & Infrastructure BusinessElectrical Equipment andComponents Business

Operating income
8 billion yen

Operating income
2.6 billion yen

29％＜ Financial strategy ＞

17％

53％ 46％

Operating income

30％ 15 billion yen

Growth Investment
Growth investment 20 billion yen
Human capital investment
R&D Expenditure Expansion

Shareholder Returns
To achieve an annual
dividend of at least 120
yen per share by the year
ending March 31, 2027

Improvement of Financial Base and Profitability

Operating income
20％
4.5 billion yen
Communication andIndustrial Devices Business

ROE of 10% or more,
Market capitalization of 100 billion yen or
more, P/B ratio of 1x or more

Cash allocation

Targets for FY2026
Net Sales
215 billion yen

Increase in corporate value

Outside: Sales
Inside: Operating income

Improve capital efficiency
Deepen ROIC/CF
management

Ensure financial soundness
Optimal capital structure,obtaining credit ratings5Business Investment Aimed at Achieving the Medium-Term Business Plan and Profit
Contribution Timeline
Profit plan

Business investment
5-year total for FY2022 - FY2026
160

Growth investment

billion yen

140

DX investment, environmental investment, others

Investment in businessenhancement and DX with afocus on growth-driving
businesses

31.0 billion yen

R&D

120

Production capacity expansion: 12.0 billion yen

Operatingincome 10.5
billion yen

Reorganization of production bases and facility
renewal<Breakdown>

Operatingincome 15

100

Production Capacity Expansion

80

Reorganization of production
bases and facility upgrades:

12.2 billion yen

Research and Development:

2.0 billion yen

60

DX investment, environmental
investment, others:
4.8 billion yen

40
Growth investment（BD Strategy）

20.0 billion yen
20※ BD（Business Development）Strategy
Expand business into new markets and new areas
based on core technologies

0
FY2022

FY2023

FY2024FY2025

FY2026FY2022

FY20266

Growth strategies and investment enhancementin the power infrastructure businessPre-rolling investment plan

Facility capacity before and after completionof investment in increased production< Rolling point >Increased demand for SICOPLUS® is leading toconsideration of the need for additional investment toincrease production

Manufacturing capacity can be doubled
through increased productivity andpersonnel reinforcement
Capacity of
Post-completion
facilities
Equipment capacity
undergoinginvestment inincreased
1.5x
production.

FY2023

FY2024FY2025

Cumulative investment 2.4 billion yen
FY2026

Production efficiency improvement initiatives（ Automatic product dispensing equipment,
Automated warehouses, Unmanned forklifts, etc.)

1000
900
800
700
600
500
400
300
200
100
0

Concentrated
investment Period

FY2022

FY2023

FY22-FY26
Operating profit
CAGR9％FY2024FY2025

FY20267

Growth strategies and investment enhancementin the winding business
Shift to more profitable business models
Wire rod manufacturer

Winding manufacturer

Our current main fields

Fields of future focus

Sheet copperHigh performanceoxygen-free copper
MiDIP ®

Straightedged line

Car maker

Additional investment in increased production ofhigh-performance windings is being considered.

Enamel Straightedged line

Cumulative investment 2.7 billion yen

Target for FY2026
5x increase inproduction capacity

MI

Development of varnishes
compatible with high-speed
baking furnaces

PI

Search for optimum
manufacturing conditions

FY22-FY30
Operating profit

CAGR19％

1000
800

600
400
200
Profit margin

Energy efficiency Equipment installation

2x moreConcentrated
investment Period

1200

Introduction of production
innovation lines

57% cut< Rolling point >increased added
value

Wire
Rods

CO2 emission

Pre-rolling investment plancosts

25% cut

Speed

improvement

３x

Double the0

FY2022

FY2023

FY2024FY2025

FY2026

effectiveness8

Growth strategies and investment enhancementin the communication businessPre-rolling investment plan

FLANTEC® Sales growth trends< Rolling point >（Estimated as 100 before Corona※）

Strong sales of FLANTEC® have led toconsideration of the need for additional
investment to increase production

339%

3.0x

302%
265%

Cumulative investment 1.2 billion yen

228%
191%
154%

1.7x

600

1.5x

500

Concentrated
investment
PeriodFY22-FY26
Operating profit

CAGR13％

400
117%

300
200

80%
FY2019 FY2020 FY2021 FY2022 FY2023EFY2024EFY2025EFY2026E

建販

Industry

Mobility※ Mobility sales are estimated at 100 for FY2023, as it will be
generated from FY2023.

100
0
FY2022

FY2023

FY2024FY2025

FY2026

9

Table of Contents

１．Our growth strategies

２．Our capital strategy

３．Our growth and capital strategy from the perspective of our external directors

10Basic financial and capital strategy
Deepening ROIC
management

Cash generation

Cash Allocation

ROIC

EBITDA

growth investment

WACC

spreadWorking capital
reduction

Operatingcash flow

CCC improvements

Fundraising （D/E)
Business valuation
based on cost ofcapital・ dead capacity control
・ optimum capital structureNon-business asset reduction

・ Policy shares, real estate・ organic・ In organic （M＆A）
Non-financial strategic
investments

・Human capital・Research and development

Shareholder Returns
・Dividend・Stock buy-back11

Balance sheet management
BS-basedmanagement

2023

ROIC ＝ NOPAT÷Clarify what BS is aiming forOperating profit after tax【 Operation 】 【 Raising 】

invested capital

Working
capitalFixed
assetsInterest-bearing
liabilities
Capital
stock

2026

Operational side

Procurement side⚫

Debt financing
commensurate withthe build-up ofshareholders' equity

WACC
reduction

・Profit and loss statement
・Cash flow statement
・Statement of changes in equity⚫

Reduction of working capitalthrough inventory reduction
and shortening of accounts
receivable sites⚫

Investment in growth, shift
from non-business assets

to business assets

Future profits are madefrom BS12

Ensuring financial discipline
・ D/E ratio falls to below 0.5 because of revenue build-up
・ Capital adequacy ratio rising towards 50%

Financial discipline is needed to avoid falling back on the past

Consideration of obtaining a rating➢ Positioned as a financial target to balance growth strategy and financial discipline➢ Diversify funding sources and reduce funding costs→ Acquisition of a rating enables direct financing, such as the issue of bonds or commercial paper→ Basel regulations make the credits of rated companies less credit risky when banks calculate
their capital ratios.

13

Concept of optimal capital structure
Trends in our ROIC
9.0%
8.0%

7.6%

7.3%

7.0%

7.1%

6.3%

6.0%

5.4%

5.6%
ROIC Spread

WACC

5.0%

3.6%

4.0%

3.0%
2.0%

・Current WACC levels range from 4-6%
・ROIC remains around 7%
・ROIC spread of 2% when WACC is set at
5%

1.7%

1.0%

0.8%

0.7%

FY2014FY2015

ROIC（Opening and closing…

0.0%
FY2013

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

・WACC is expected to rise to around 7%
during the medium term
・ ROIC also increased from 7% to 10%
・ ROIC spread to around 3% (1.5x)

14Concept of optimal capital structure
2020
Actual実績
76

2021
Actual実績
100

Operating income ratio（営業利益率）Net income
当期純利益(4.7%)
50(5.0%)
94(5.0%)
94(5.3%)
75(7.0%)
100

Net income per share (yen)
１株あたり純利益（円）

166.5

313.4

315.0

250.7

334.7

Dividend per share(yen)
１株あたり配当額（円）

20.0

50.0

60.0

75.0

120～

Dividend payout ratio
配当性向

12%

16%

19%

30%

35%～

Equity
自己資本
Equity ratio
自己資本比率

476

583

675

730～

900～

36.7%

39.5%

43.1%

45%～

50%～

79%

67%

61%

50%～

～50%

Unit: 100 million yen（単位：億円）Operating income
営業利益

DE ratio
DEレシオ

2022
Actual
実績

2023
Plan
計画
105

2026
Mid-term
中計 Plan
115
150◼ Continuing to reduce β value
through strengthening thefinancial foundation, aiming tolower the cost of equity forshareholders◼ Considering accumulation of equity,
strengthening risk management
systems, and exploring credit
rating acquisition.
◼ Planning to achieve more than 90
billion yen in equity capital by theend of the medium-term plan
period → P/B ratio of 1.2x andmarket capitalization of 100 billion
yen◼ We've reduced interest-bearing
debt to under 50% DE ratio. Goingforward, we'll manage debt
carefully while monitoring WACC.

15

Market valuation transition and decomposition of PBR factors
In addition to improved profitability, various measures implemented in the current financial year have resulted in a PB ratio of more than 1x.
However, it is assumed that the market still does not rate our growth potential highly in view of the level of our PER.

Market capitalization, equity capital, PBR

PBR factor decomposition(Millions of yen)(times)1.13

90,000Growth rate

1.02

80,000

0.96

0.94
0.86

70,00060,0001.20

PER
10.55x

1.00

Cost of shareholders'equity

0.84

0.76

0.76

0.80

PBR
1.13x

0.60

50,0000.60

Financial leverage

40,00030,0000.40

Stock prices
2,681 yen

ROE
10.8%

Net profit margin on
sales

20,0000.20
10,000BPS
2,362 yen0

Total asset turnover

0.00
FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023
2Q

Market capitalisation

Equity capital

PBR* Share prices are closing prices on November 30, 2023.
* The number of treasury shares is also calculated as at end-November.
* Various other indicators are based on end-September balances. However,profits are based on published figures for the full year.

16Enhance Price Book-value Ratio
・ Aim for a PBR of around 1.2x in the near term
・ Achieve high ROE while reducing capital costs andenhancing growth rates

１．ROE
・Maintain ROE at a minimum of 10%
going forward

２．Shareholders' equity cost

⚫ PBR ＝ ROE × PER⚫ PBR ＝ ROE ÷ （１/PER）

・Shareholders' equity cost is the expected
return rate for investors
・Current trend shows a decline in β value・Continue dialogue with investors
・Ensure stable management throughenhanced governance and financial strength

３．Growth rate

⚫ PBR ＝ ROE ÷ （Cost of equity－ growth rate）

・Continue growth investments to increase
profits
・Advance Business Development strategy,
including M&A and new business initiatives

17

Our Approach to Lowering β value
The beta value, determining the cost of equity capital, represents investors' expected rate of return

Factors causing an increase
in beta values

Our Approach・ Stable earnings growth・ Concerns about earnings

volatility

・ Strengthen risk management andgovernance・ Concerns about negative

・ Improvement of financial structure

surprises

・ Maintain financial discipline by acquiring・ information asymmetry

credit ratings, etc
・ Explanation of increase corporate value
18

Cash Allocation ApproachNon-financial strategic
investments

Shareholder Returns◼ Optimal capital structure
・Planning over 500 billion yen in investments during◼ Human capital・ Introduced employee shareholding incentive◼ Dividend
・To consistently implement dividends based on

the midterm through organic (strategic investments)

measures “Incentive 10% → 20%, Shareholding

profits from business operations

and inorganic (M&A) means

Association Support Trust (ESOP)”

・Aiming for leverage effect through increased debt

・Hiring specialized personnel to strengthen

・ Ensuring a dividend payout ratio of over 30%
・ Aiming for a dividend of 120 yen during thealigned with investments

capabilities in areas such as BD strategy where there

medium-term

Growth Investments→

WACC Control◼ Rising PER・The key to maintaining a stable PBR of 1 or more isis a shortage

・Strengthen employee training◼ R&D◼ Stock buy-back・Considering implementation when our own shares・Establish an R&D Headquarters to strengthen

are deemed undervalued

development for next-generation technologies, new・Utilizing purchased treasury stocks for Employee

・Emphasizing the ability to outline a growth story inproducts and new businesses, and develop a common

Stock Ownership Plan (ESOP) and Restricted Stock forboth financial and capital strategy

infrastructure for analysis, evaluation and analysis

executives

an increase in PER・Securing an annual research and development

・Reserved as a capital policy option for future use inbudget exceeding 2 billion yen

the BD strategy

19

"Financial Strategy" Overall financial and capital strategy
Measures

Index

Strengthen earning power
and CF creative capacity
through ROIC management

Our aspirations
PBR
improvement

Value Creation

Evolution into a highly
profitable company

ROIC 10% or more

Streamlining the balance sheet
and building an optimal capital
structure

ROIC spread more than 1.5x
ROE 10% or more
D/E 50% or lessStability ofmanagement base

Dividend 120 yen or more

Cash Allocation

Enhancement ofshareholder returns

20Table of Contents

１．Our growth strategies

２．Our capital strategy

３．Our growth and capital strategy from the perspective of our external directors

21

Self-introduction
Outside Director
Member of the Audit Committee Chairman of the Nomination and Remuneration Committee

Yuji Sakakura

Brief history
Apr.1974 Joined Nissho Iwai Corporation (now Sojitz Corporation)
Jun.1999 President and CEO of Nissho Iwai Securities Co., Ltd
May.2006 Director and Chief Financial Officer of GCA Corporation
Jun.2011 External Auditor of Autobacs Seven Co., Ltd
Mar.2014 External Auditor of Fullcast Holdings Co., Ltd
Jun.2016 External Auditor of UKC Holdings Corporation
Jun.2019 Current Auditor of the YuMi Memorial Foundation for Home Medical Care
Grants, Public Interest Incorporated FoundationDec.2019 External Auditor of Shonan Seminar Co., Ltd
Jun.2020 Current External Director and Audit Committee Member of our company

Role in our company◪ Leveraging experience as a finance executive in a general trading company, leadership in a securities firm, and as the Chief Financial
Officer of an M&A advisory firm, I oversee and supervise our company's management. Contributing to the enhancement of corporate
governance within our group based on my expertise and insights◪ Actively contributing in the Board of Directors discussions on the validity of business and capital strategies, as well as from a governance
perspective◪ Chairman of the Nomination and Remuneration Committee

22

Introduction of ROIC management and results to date
（ Unit ：times）(Unit:100 million yen) Operating profit and EBITDA

FY2020

FY2021

FY2022
Operating profit

Capital adequacy and DE ratio

FY2023E

FY2020

FY2021

Capitaladequacy
ratio

FY2022

FY2023 2Q

DE ratio23

Organisational structure for capital strategy
Conventional SWCC

Current SWCC

Spreading ROIC management

・Weak performanceand heavy relianceon bank borrowing

・Cash from operations
goes to repay interestbearing debt

Improved financial
position due to improved
performance

New financial
strategies
Capital policy needs

Strategic headquarters
・Corporate Strategy Dept
・Corporate Management Dept
・ Sustainability Promotion Dept

➢ Comprehensive review
of business, financial
and sustainability
strategies➢ Assignment of officers incharge of capital
strategy

24Discussion on the capital strategy
Officers' camps(where various topics are freely discussed)

7 April 2023
Issues and directions for financial strategy andcapital policy Discussion based on the briefing by
the officer in charge of capital strategy

30 September 2023
Specific measures for financial and capital
strategy, discussed

・Overall financial capital strategy
・Balance sheet control measures
・Acquisition of own shares・Acquisition of ratings

Board of directors

25 July 2023
Measures to achieve cost of capital and shareprice conscious management

3 August 2023
Sale of policy shares (Sale of major clients)

24 October and 2 November 2023
Acquisition of own shares

25

Changes in shareholder returns
Dividend per share and dividend payout ratio(Unit: Yen/year)

FY2020

FY2021Dividend per share

FY2022

FY2023E（※） ratio
Dividend payout※ Excluding share buybacks.

26

Changes in investor attributes
Changes in shareholder structure (in terms of number of shares held)20%

Mar 2019

28%

3% 9%

40%

（ Of a total overseas 11％）

Sept 2023 1%

67%

6%

7%

19%

（ Of a total overseas 31％）

0%

10%

FUTONG GROUP CO., LTD.

20%

30%

40%

Institutional investors and others

50%

60%

Securities company

70%

80%

Other domestic corporations

90%

100%

Individuals and others

27

Our challenges regarding financial strategy and capital policy
PBR factor decomposition
Growth rate

PER
10.55x
Cost of shareholders'equityPBR
1.13x
Financial leverage
Stock prices
2,681 yen

ROE
10.8%
BPS
2,362 yen

Net profit margin on
sales
Total asset turnover

・ROE is expected to remain above 10% in the
future.
・ PER levels rise but are still low
・ Failure to meet investors‘ growth expectations
・ Clarification and implementation of the growthstory is key
・ Business development strategies, including
new businesses and mergers and acquisitions,are being promoted. Specific results will be
disclosed in the future.

* Share prices are closing prices on November 30, 2023.
* The number of treasury shares is also calculated as at end-November.
* Various other indicators are based on end-September balances. However,profits are based on published figures for the full year.

28Expectations and challenges for SWCC from the perspective of external directors■ Strong leadership to drive structural reforms
Issue : The importance of continued awareness-raising and succession■ Further improvement in earnings of growth-driving
businesses and efforts to create new businesses
Issue : Speed-up to initiatives and flexibility in thinking and acting■ Capital strategy in the growth phase
Issue : Maintain financial discipline, optimise capital structure andenhance shareholder returns
29https://www.swcc.co.jp

The forward-looking statements in this presentation are based on information available at the time of publication and involve potential risks and uncertainties.
Therefore, please be aware that a variety of factors could cause the actual results to differ materially from those projected in the statements.

Such factors that may affect actual results include economic conditions, demand trends, and fluctuations in raw material prices and exchange rates.
Factors that may affect business performance include, but are not limited to, the following.