’24 Mid-Term Business Plan
(FY2024-FY2026)©2024 Mitsuboshi Belting Ltd.

May 14, 2024

Introduction

Introduction

In May 2022, we announced FY2030 “Target Position“ and revised our “ ’21 Mid-Term Business Plan” amid the COVID-19
pandemic. Through this revision, we adopted a capital policy strongly focused on enhancing corporate value, working on
improving profitability and the balance sheet. In the face of an unpredictable business environment due to infectious diseases,
supply chain disruptions, inflation, rising resource prices, and increasing geopolitical risks, we steadily implemented various
measures. As a result, our market capitalization increased from 66 Bil. yen at the end of March 2022 to 145.2 Bil. yen at theend of March 2024, by 2.2 times in two years. Although the surrounding environment is expected to remain increasingly
unclear and uncertain, we continue to establish a resilient corporate structure, and aim to achieve FY2030 “Target Position.““ ’24 Mid-Term Business Plan” marks the second phase toward FY2030 “Target Position.“ The previous plan focused onstrengthening our business foundation, while the current plan positions itself as a period of accelerated growth. This year issaid to be the "Year of Midsize Companies,“ and the Japanese government is supporting the development of such companies.
We, as a midsize company, see the current situation as an excellent opportunity to accelerate growth and pursue the earlyattainment of FY2030 “Target Position.“

Based on our basic philosophy of “To give attentive consideration to both humanity and nature,” we promote the creation of acompany that is able to contribute to the achievement of a sustainable society through our business activities and strive toachieve management that is trusted by all stakeholders.

©2024 Mitsuboshi Belting Ltd.

2

Table of Contents

Table of Contents

01

Philosophy System of Mitsuboshi Belting

p.04

02

FY2030 “Target Position“

p.05

03

Review of ’21 Mid-Term Business Plan

p.06

04

’24 Mid-Term Business Plan

p.08

05

Initiatives to Enhance Corporate Value

p.09

06

Individual Business Strategies

p.13

07

ESG Initiatives

p.18©2024 Mitsuboshi Belting Ltd.

3

Philosophy System of Mitsuboshi Belting

Philosophy System

We act with pride in how we stand today and look forward to the future based on our corporate philosophy, ‘To give attentive consideration
to both humanity and nature, ’ to contribute to society by supplying goods of high performance, high precision, and high quality, with thecollective strength of our group employees aiming to be a company that supports people’s comfortable lives with the power of KAGAKU(“chemical & science”).

Corporate Philosophy
Our Value

To give attentive consideration to bothhumanity and natureManagement Principle

Our Mission

Our Vision

To contribute to society by supplying goods of highperformance, high precision, and high quality
A company that supports people’s comfortable lives
with the power of KAGAKU(“chemical & science”)
Company Motto

Our Commitment

To act with pride in how we stand today andlook forward to the futureGroup Code of Conduct©2024 Mitsuboshi Belting Ltd.

4

FY2030 “Target Position”

FY2030 “Target Position“

Establish a resilient corporate structure
100 Bil. yen
Operating profit 13 Bil. yen
Net sales
Profitability

Capitalefficiency

Shareholder
returns
Capitalinvestment

ROE

10%

Capital policies to enhance
corporate value over the medium
to long term

Human
resource
strategy

Cultivate human resources topromote transformation

ESG

Contribute to the achievement of asustainable society(enhance social and economic value)©2024 Mitsuboshi Belting Ltd.

• Strengthen core business structure, further increase profitability• Invest in new growth areas to enable continuous growth→Develop eco friendly products and strengthen sales structure
M&A, Open innovation• Strengthen financial position, then pursue higher capital efficiency• Conduct research that will lead to the achievement of a sustainable society,develop high-performance, high-precision, high-quality products with nextgeneration functionality, proactively invest in production systems• Increase shareholder returns after securing resources for growth investment• Reinforce human resources structure, training programs, and workplaceenvironments to facilitate maximum utilization of “people’s” abilities• Cultivate a “corporate culture” that stresses new thinking that respects
diversity and a spirit of challenge that is not afraid of transformation• Proactively address environment-related social issues→”Toward carbon neutrality by 2050”
FY2030 CO2 emission reduction target: 46% from FY2013(Scope 1 & 2 emission from eight main domestic locations)

ESG evaluation: Obtain top rank under global criteria
5

Review of '21 Mid-Term Business Plan

’21 Mid-Term Business Plan⚫

While our revenue benefits from the depreciation of yen, the belt sales for aftermarket which has higher margins are impacted by inventory
adjustments, resulting in operating profit falling short.

⚫

CO2 emissions have been significantly reduced due to proactive efforts towards decarbonization initiatives.

FY2023

Profitability

Net sales
Operating profit

Capitalefficiency
Capitalinvestment

ROE

KPI target

80.0
8.3

8%

Sell cross-shareholdings at least

Net sales

Bil. yen (at least 11％)

Operating profit

1.5

3-year capital investment budget

7.6

ESG

Estimated
Exchangerates©2024 Mitsuboshi Belting Ltd.

Bil. yenBil. yen (9.2％)

Bil. yen in FY2021-FY2023

ROE%
Sold cross-shareholdings

23.0 Bil. yen

3-year capital investment budget

65%
Dividend payout ratio (FY2022): 100%
Dividend payout ratio (FY2023): 100%
CO2 emission reduction target:
at least

KPI results

84.0
7.7

Bil. yen

Dividend payout ratio (FY2021):

Shareholder
Returns

FY202322% vs. FY2013

1USD=115 yen
1EUR＝125 yen

1.5 Bil. yen in FY2021-FY2023
22.8 Bil. yen

64.9%
Dividend payout ratio (FY2022): 100.4%
Dividend payout ratio (FY2023):
99.8%
Dividend payout ratio (FY2021):

CO2 emission reduction target:

35%* vs.FY2013

CDP ‘C’ for FY2021 → ’ B’ for FY2023 （2 notch up）
FTSE 1.4 as of June 2021 → 2.8 as of June 2023

1USD=144.6 yen
1EUR＝156.8 yen*Using some of the Scope 1 & 2 emission factors for FY2022
from eight main domestic locations.

6

Review of '21 Mid-Term Business plan⚫
⚫

’21 Mid-Term Business Plan

Our sales target is achieved mainly because automotive parts and construction materials expanded.
In FY2023, transmission products sector (for general industrial use) experienced a decline due to inventory adjustments in belt
aftermarket and the economic slowdown in China and Europe.

Revenue by industry (unit: Bil. yen)
82.9
74.9
64.9
0.5
5.7
3.1
3.5

0.5
5.4
3.7
3.9

0.5
5.1
4.0
4.2

Target

80

84
0.6
7.3
3.5
4.8

1.0
6.3
3.9
4.2

29.1

32.3
31.5

29.5
25.0

27.1

FY202031.9

FY202136.8

FY202233.1

38.7

FY2023

Automotive parts

Transmission belt (general industry)

Conveyor belt

Plastic products

Construction materials

Electric materials©2024 Mitsuboshi Belting Ltd.

7

’24 Mid-Term Business Plan - KPIs for FY2026⚫

’24 Mid-Term Business Plan

Set the following KPIs for the accelerated growth period towards achieving FY2030 “Target Position.“
FY2023

Profitability

Net sales

84.0
7.7

Operating profit

Capitalefficiency
Capitalinvestment

Shareholder
Returns

ROE

FY2026KPI result

7.6%

Cross-shareholdings sold

Bil. yen

Net sales

Bil. yen (9.2％)

Operating profit

1.5 Bil. yen

3-year capital investment amountROE(FY2021-FY2023）

22.8 Bil. yen

91.5
10.5

Bil. yen

9%

Cross-shareholdings sold

Bil. yen (11.5％)

5.0 Bil. yen

3-year capital investment budget(FY2024-FY2026）

20.0 Bil. yen（excluding M&A)

5.4%
(Dividend per share at least 180 yen)
DOE target

Dividend per share

KPI target

99.8%

approx.

Repurchase of treasury stock FY2024-FY2026

ESG

Estimatedexchange rate

CO2 emission reduction target vs FY2013

35 %3.0 Bil. yen

Scope 1 & 2 emissions from eight main domestic locations※

1USD= 144.6 yen

CO2 emissions reduction target vs FY201340%

1USD=130 yen※Based on figures from the emission reduction results of FY2022©2024 Mitsuboshi Belting Ltd.

8

Initiatives to Enhance Corporate Value

Initiatives to Enhance Corporate Value⚫ Engage in improving profitability and evolving balance sheet management to enhance corporate value

Strengthen humanresource strategy

Enhancing Corporate Value

Promotedigitalization

Profitability
increase

Balance sheet
management

Enhance technologicaldevelopment

Introduce employee stock ownership plan
Promote talent management (visualization of talent)
Conduct training (reskilling, training internal IT staff)
Create a workplace with employee engagement(environmental improvements,
health management, work style reform, alignment with Philosophy System)⚫ Promote DE&I, and fostering new ideas and cultural transformation
through use of outside human resources

⚫
⚫
⚫
⚫

Improve productivity through AI implementation
Streamline indirect departmental tasks
Speed up new product development and reduce workload
Extract and resolve key issues through new cost management systems⚫ Utilize technological assets⚫ Promote Green transformation (development of eco friendly
products and methods focusing on decarbonization-related technologies)⚫ Advance open innovation

Optimizebusiness portfolio⚫ Advance M&A strategy⚫ Construct business portfolio analysis systems⚫ Balance total cost reduction and BCP through the reorganizationof production plants and logistics hubs

Promote co-creation
business strategy⚫ Promote co-creation business focusing on customer value
Please refer to pages 13-17 for individual business strategies

Growth investments
for strengthening thebusiness foundation⚫ Establish innovative production lines⚫ Restructure production and logistics (Phase 2)⚫ Invest in new markets, digital transformation , R&D and M&A⚫ Promote decarbonization⚫ Upgrade aging facilities and buildings

Improveasset efficiency
Shareholder
returns©2024 Mitsuboshi Belting Ltd.

⚫
⚫
⚫
⚫

⚫ Reduce cross-shareholdings⚫ Improve cash conversion cycle⚫ Maintain stability in dividends, with a target DOE of approx. 5.4%
(dividends per share of at least 180 yen)
⚫ Repurchase treasury stock flexibly utilizing surplus funds
taking into consideration comprehensive factors such as the business environment
9

Examples of Initiatives to Enhance Corporate Value

Initiatives to Enhance Corporate Value

Promote co-creation
business strategy

Strengthen humanresource strategy
Workplace environment improvement(New building at Shikoku Plant)

Labor environment improvement &2024 logistics issue countermeasures(Automated warehouse at Nagoya Plant)

Enhance technologicaldevelopment
Eco friendly products

LNG Satellite(Shikoku Plant)

Promote digitalization
Optimizebusiness portfolio

Growth investment(India New factory)©2024 Mitsuboshi Belting Ltd.

Water resource conservation factory(New building at Shikoku Plant)

Solar panels (Kobe Plant)

10Management conscious of cost of capital and stock prices (ROE > Cost of Equity)
Initiatives to Enhance Corporate Value⚫
⚫

In May 2022, Mid-Term Business Plan was revised, and management conscious of cost of capital and stock prices.
Market capitalization increased from 66.0 Bil. yen at the end of March 2022 to 145.2 Bil. yen at the end of March 2024,
by 2.2 times in two years.

Changes in ROE・PBR
As of March 2024
1.80

ROE : 7.6%
PBR : x1.35

ROE
10％

10.0%

1.60
1.40

8.0%

1.00
1.00

PBR

ROE

1.20

0.80

0.60
5.0%

0.40
FY2018FY2019FY2020

FY2021

FY2022

ROE©2024 Mitsuboshi Belting Ltd.

FY2023

Cost of equity capital

FY2026

FY2030

PBR

11Cash allocation (FY2024-FY2026）

Initiatives to Enhance Corporate Value

Cash outflow

Cash inflow

Investment for growthandstrengthening business foundation

30.0 Bil. yen※

Operating CF

45.0 Bil. yen
Shareholder returns (dividends)

Investment securities

5.0 Bil. yen
Surplus cash
Cash
on
hands

5.0 Bil. yen

10.0 Bil. yen

M&A and Open innovation, etc.
Repurchase of treasury stock

Working capital

27.0 Bil. yen©2024 Mitsuboshi Belting Ltd.

Allocation for
flexible use

15.0 Bil. yen※ Calculated on a payment basis.
Does not match with the capital investment
amount (20.0 Bil. yen).

12

Individual Business Strategies

Basic Policy©2024 Mitsuboshi Belting Ltd.

Individual Business Strategies

Promote Co-creation Business Model focusing on customer value

1. Automotive parts

2. Industrial machinery

3. Construction materials

4. Electronic materials, Development products,
and new sectors
13

1. Automotive parts

Individual Business Strategies⚫ Aim to achieve a sales increase of 10 Bil. yen by expanding sales into electric vehicle compatible products, products for two-wheeled and multi-purpose fourwheeled vehicles, and aftermarket, significantly surpassing the anticipated decrease in sales of approximately 6 Bil. yen due to the halving of production of
conventional Internal Combustion Engine (ICE) four-wheeled vehicle in FY 2030 compared to FY 2019.

Sales
Increase
Target

Major
Initiatives

Strategy

EPS Timing belt◼

Respond to electrification
Contribute to environment•••

Multi-purpose
４-wheel vehicles

Expand sales of high value-added system products for accessory drive(for M-HEVs).
Expand sales of products for electrification of 4-wheeledvehicle control equipment (EPS, PSD)
Expand sales of rear-drive products for 2-wheeled vehicles,
multipurpose 4-wheeled vehicles, and personal mobility

Existing
products+1.0～2.0 Bil. yen
38.7

Bil. yen

1.9

27.1

EV parts

40.0

Bil. yen

5.5

Bil. yen

0.5◼

Expand sales to global
aftermarket•

Expand sales to overseas 4-wheeled and 2-wheeled vehicle
aftermarket, focusing on developing countries

36.8

34.5

26.6

Review of ’21 Mid-Term Business Plan✓✓

In the first half, sales were stagnant due to COVID-19 pandemic and component shortages such as semiconductors.
In FY2023, sales increased due to the recovery of automobile production and the growth in sales of products for electricunits for four-wheel vehicles. Additionally, the effect of the weaker yen contributed to sales exceeding the target.

©2024 Mitsuboshi Belting Ltd.

FY2020

FY2023

FY202614

2. Industrial machinery

Individual Business Strategies⚫ Aim to enhance our global market share and brand strength by accurately grasping various customer needs and timely engaging productdevelopment in the changing socio-economic environment.

Sales
Increase
Target

Major
Initiatives

Strategy

Large-scale agricultural machineryTransmission
Conveyor belts
Engineering plastic+5～6 Bil. yen

43.5

Factory Automation robot◼

Support for foodbusinesses/industry•

Develop and expand sales of high value-added products for agricultural
machinery and food-related industries◼

Respond to labor shortage•

Develop and expand sales of products for robots and logistics equipment◼

Respond togreen transformation•

Develop and expand sales of eco friendly products using biomass-derived,
recycled, and other eco friendly materials◼

Respond toenergy conservation••◼

Expand sales in the global
aftermarket

37.8
31.6

4.5
Bil. yen

3.5
Bil. yen

3.1

Bil. yen

5.3

4.8

3.5

Develop high-efficiency products
Develop and expand sales of high performance engineering plastic materials,
structural foam products as alternatives to metals and other materials

33.7
29.1
•

Expand sales to overseas aftermarket

25.0

Review of ‘21 Mid-Term Business Plan✓✓In FY2021 and FY2022, sales grew at a pace exceeding the plan. In FY2023, we faced challenges such as inventory
adjustments in belt aftermarket and the impact of China's economic slowdown, resulting in the shortfall of our targets
Start the development of eco friendly products for the next generation(targeting general industry, conveyor belts, andengineering plastics)©2024 Mitsuboshi Belting Ltd.

FY2020

FY2023

FY202615

3. Construction materials

Individual Business Strategies⚫ Contribute to solving societal challenges such as energy conservation and longevity, preservation of the natural environment, and infrastructuredevelopment through our products, systems and installation work in the building, in civil engineering waterproofing and water shielding markets.

Strategy

Sales
Increase
Target

Major
Initiatives
rooftop waterproofing
construction

Industrial landfill◼

Respond to improvement ofworking environment•◼

Respond to solutions forresidential environment issues•

Expand sales of energy saving and long-lasting products and systems
in the building exterior market◼

Respond to conservation of thenatural environment•

Undertake water shield installation work for prevention of environmental
pollution and expand sales of related products.
Expand sales of materials for water purification and treatment facilities
Expand sales to biodiversity protection markets such as biotope, greening
promotion

Respond to infrastructure
improvement•◼

Civil waterproofing
Building waterproofing
Water shields

7.3

Develop waterproofing and water shield systems and expand sales of
product in response to labor shortages

億円

Bil. yen

0.5

5.7

7.3

億円

Bil. yen

1.1

億円
Bil. yen

3.1
•
•

•

2.7

4.1

Expand sales of water shield materials and related products for agricultural
reservoirs and river flood control
Undertake waterproofing works for water and sewage facilities, and roadmaintenance works

3

3.7
2.1

Review of ‘21 Mid-Term Business Plan✓✓

In civil engineering water shield construction, there was a significant increase due to multiple large-scale projects.
The acquisition of the civil waterproofing business and the advance demand resulting from the construction industry issues
in 2024 contributed to the sales growth.

©2024 Mitsuboshi Belting Ltd.

FY2020

FY2023

FY202616

4. Electronic materials, Development products, and new sectors

Individual Business Strategies⚫ Consider the new value and societal changes born from digital innovation as business opportunities and will try to provide products that
contribute to the advancement of the information and electrification society.
⚫ Accurately grasp customer and market needs, and develop, produce and sell Highly unique electrochemical materials.

Sales
Increase
Target

Major
Initiatives

Strategy

Conductive, resistive,
and insulation pastes

Electronic materials

Metallized substrate
products◼

Respond to informatization•

Develop and expand sales of metallized substrate products contributing to theadvancement of next-generation mobile communication systems.

◼

Respond to electrification•

Expand sales of various conductive pastes contributing to improvement ofthermal management in electronic circuit boards and packages, and toenhancement of performance and reliability of semiconductors and passive
electronic components◼

Respond to energy andresource conservation
Respond to reducing
environmental impact•

Expand sales for unique products and solutions supporting the design anddevelopment of applications leading to energy and resource conservation•

Expand sales of silver nanoparticle-based sintering pastes for bonding that
contribute to the replacement of lead solder in semiconductor and component
mounting◼

Development products
and new sectors

◼

1.07

Bil. yen+0.4～0.6 Bil. yen

0.57
0.45

Bil. yenBil. yenCreate new business by effectively utilizing technological assets

Review of ‘21 Mid-Term Business Plan
✓ (Electronic materials)
Despite of the unstable demand caused by semiconductor shortages, the impact of China’s COVID-19
policies and its economic slowdown, we had the record high sales with the growth areas such as
passive electronic components and next-generation mobile communication systems.

©2024 Mitsuboshi Belting Ltd.

FY2020

FY2023

FY202617

ESG Initiatives

ESG initiatives

Our materiality
Reduction of GHG (Greenhouse Gas) emissions

CO₂emissions
100

▲35％

90

▲40％

80

▲46％

70
60
50

40
FY2050 target

30

carbon neutrality

20
10
0

2013

2023 2026

2030

2050

Create a robust corporate governance structure
Implementation period
Initiatives
March
2021
Nomination and Remuneration Advisory Committee established
June
2021
Restricted stock compensation with transfer restrictions introduced (for directors and executive officers)
First female Director takes office, at least 1/3 Directors are Outside Directors,
June
2022
Director‘s term changed from 2 years to 1 year
Executive compensation system revised to further contribute to the improvement of medium to long-term
2024
July
(planned) performance©2024 Mitsuboshi Belting Ltd.

18

Note to future-oriented statements•

The forward-looking statements in this document, including performance forecasting, are based on currently available
information and assumptions considered reasonable by us and do not guarantee our future financial results. Actual
results may differ greatly from the forecast figures depending on various factors.

•

Please refrain from relying entirely on this as the sole basis for investment decisions. Additionally, please note that future
projections may be subject to change without notice. We do not assume any responsibility for the outcomes resulting

from the use of the information in this document.
•This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

©2024 Mitsuboshi Belting Ltd.