Notice: This document is an excerpt translation of the original
Japanese document and is only for reference purposes. In theevent of any discrepancy between this translated document
and the original Japanese document, the latter shall prevail.

Financial Results Presentation Material
for the Year Ended March 31, 2024
And New Medium-Term
Management PlanHAGIWARA ELECTRIC HOLDINGS CO., LTD.
(TSE Prime Market & NSE Premier Market: 7467)

June 3, 2024
© 萩原電気ホールディングス株式会社 2024

Today’s Overview

Financial results summary for FY2024/3
Earnings forecasts for FY2025/3
Review of the previous medium-term management plan “MNV2023”

Basic policies of the new medium-term management plan “MNV2026”
Numerical target plan and key strategy

1

INDEX

Financial results summary for FY2024/3
Earnings forecasts for FY2025/3
Review of the previous medium-term management plan “MNV2023”

Basic policies of the new medium-term management plan “MNV2026”
Numerical target plan and key strategy

2

・Net sales, operating profit and ordinary profit reached record highs for three consecutive periods.

Financial results for FY2024/3

・Profit attributable to owners of parent declined due to the disappearance of a gain on bargain
purchase of ¥670 million on M&A as an extraordinary income recording in the same period of theprevious fiscal year.
(Unit: Millions of yen)

FY2023/3

FY2024/3

AmountRatio

AmountRatio

YoY

Net sales

186,001100%

225,150

100%+39,149+21.0%

Gross profit

18,2149.8%

20,0038.9%+1,789+9.8%

Selling, general andadministrative expenses

11,4896.2%

12,292

5.5%

+803

+7.0%

Operating profit

6,725

3.6%

7,711

3.4%

+986

+14.7%

Ordinary profit

6,417

3.5%

7,221

3.2%

+804

+12.5%

Profit attributable to owners ofparent

4,912

2.6%

4,421

2.0%

(491)

(10.0)%

554.71－458.80－(95.91)－

185

Dividend payout
ratio

+30

－

*1

Earnings per share (Yen)Annual dividends per share
(Yen)

155

Dividend payout
ratio

27.9％

40.3％

*1 The number of issued shares increased YoY due to the exercise of rights to subscribe for new shares. The average number of shares during the period was
8,856,783 shares in FY2023/3 and 9,637,615 shares in FY2024/3.

3

Positive factors for net sales

・Sales increased by 39.1 billion yen (up 21.0%) compared to the previous fiscal year, due to brisk
production and robust demand for capital investment, primarily among customers in the automotive
industry.

Net sales(Billions of yen)

＋30.5

＋6.5
Increase in device
sales (overseas)

186
Increase in device
sales (Japan)

・Increase demand as
automobile production
volume was encouraging
・New applications
・Weak yen

＋1.9

225

Increase insolution sales
・Increase demandprimarily amongcustomers in theautomotive industry

・Increase demand as
automobile production
volume was encouraging
・New applications anduse in additional vehicle
models4

Changing factors for operating
profitOperating profit(Billions of yen)・Operating profit increased by ¥0.9 billion, or 14.7% YoY.
・Although the gross margin declined due to the recognition of inventory valuation losses and afallback from spot profits in the previous fiscal year, operating profit increased thanks to the boost
in profits from increased sales and our reining in of increases in SG&A expenses.

＋3.1

(1.3)
(0.8)

6.7
Increase ingross profit
accompanied
by increased
sales

Decrease ingross profit
due to otherfactors
・Inventory valuation
losses・Fallback from spot
profits

7.7

Increase in
selling, generalandadministrative
expenses・ Increase in laborcosts
・ Increase in System
investment

5

・Net sales increased thanks to higher automobile production output and a greater number ofvehicle models using the products the Company supplies.

Electronic Devices Business:
Financial results summary

・Although the gross margin declined due to the recognition of inventory valuation, segment profit
increased thanks to the boost in profits from increased sales and our reining in of increases in
SG&A expenses.
(Unit: Millions of yen)

FY2023/3
AmountNet sales
Segment profit

FY2024/3
Ratio

Ratio

YoY

158,974100%

196,126

100％＋37,151＋23.4％

4,491

2.8%

5,670

2.9％

＋1,179＋26.3％Net sales

Segment profit and segment profit margin

Millions of yen

196,126

180,000

158,974

150,000
120,000

AmountMillions of yen
6,000

5,670

5,000

4,491
6.0

134,661

103,700

%
8.0

4,000

105,905

3,000

90,0002,000

60,000

2,674
2.6

2,663
2,164
2.0

2.0

21/3

22/3

4.0
2.8

2.9
2.0

1,000

30,000
0

0
20/3

21/3

22/3

23/3

24/3

0.0
20/3

23/3

24/3

6

・In addition to higher automobile production output, other factors driving sales include a greaternumber of vehicle models using the products the Company supplies related to onboard multimedia
and advanced driver assistance systems, as well as new incorporation of its products.

Electronic Devices Business:
Net sales by client (YoY)(Unit: Millions of yen)

(Unit: Millions of yen)

196,126

FY2023/3

Amount158,974
101,284

81,789

5,524
5,448

35,590

AmountRatio

YoY

81,78951.4%

101,284

51.6％＋19,494＋23.8％

TOKAI
RIKA CO.,
LTD.

5,448

3.4%

5,524

2.8％

＋76

＋1.4％

24,605

15.6%

35,59018.1％＋10,985＋44.6％

47,132

29.6%

53,72827.4％＋6,596＋14.0％

158,974ー

196,126

ー＋37,151＋23.4％

Others*1

Overseas*1clients
53,728

Total

23/3

Ratio

DENSO
CORPORAT
ION

24,605

47,132

FY2024/3

24/3*1 Sales to the overseas offices of major customers, including DENSO CORPORATION, have been included in Overseas clients.

7

Electronic Devices Business:
Net sales by region (YoY)

・Sales, mainly sales in Japan, exceeded the previous fiscal year in all areas.
・Although cumulative figures at Singapore and China bases were down year on year, theyrecorded double-digit growth for the fourth quarter.
(Unit: Millions of yen)

(Unit: Millions of yen)

FY2023/3

60,00053,728*1
50,000

AmountFY2024/3

Ratio

AmountRatio

YoY

47,132

24,11240,00023,97430,000Japan

111,84270.4%

142,39772.6%+30,555+27.3％

Asia

23,97415.1%

24,112

12.3%

+138

+0.6％

UnitedStates

19,361

12.2%

24,90812.7%+5,546+28.6％

Europe

3,795

2.4%

4,707

2.4%

+911

+24.0％

Overseas(total)47,132

29.6%

53,72827.4%+6,596+14.0％

158,974ー

196,126

ー+37,151+23.4％

20,00024,90819,361
10,000

0

Total
3,795

4,707

23/3

24/3

*1 Region names represent the Group’s business locations (excluding intragroup transactions).
Financial results included in FY2024/3 Q3 are figures from January 2023 to September 2023 as the fiscal year-end
for the Group’s bases in Singapore, China and the United States is December.

8Technology Solutions Business: ・Although there were inventory adjustments at some customers due to factors such as the stateof the Chinese market, sales remained strong as the Company capitalized on investment demand
Financial results summaryfrom customers in the automotive industry.
・Segment profits declined due to sluggish gross profit growth caused by changes in sales
composition, as well as aggressive investment in development and marketing of next-generation
units.
(Unit: Millions of yen)

FY2023/3
AmountNet sales

FY2024/3
Ratio

Ratio

YoY

27,026100%

29,023100%+1,997

+7.4％

2,234

8.3%

2,040

7.0%

(193)

(8.7)％

Segment profit
Net sales

Segment profit and segment profit margin

Millions of yen
30,00025,000

Amount29,02327,026
24,505

Millions of yen
2,500

%
15.0

2,234

23,7662,0…

21,9242,000

20,000

1,692
1,498

1,500

10.0
1,303

15,0008.3
1,000

10,000

7.1
6.1

5…

20/3

21/3

7.0

5.0

500

5,000
0

0
20/3

21/3

22/3

23/3

24/3

0.0
22/3

23/3

24/3

9

Technology Solutions Business: ・Although sales in the embedded solutions field were sluggish due to inventory adjustments
made by some customers caused by the impact of factors such as Chinese market conditions,
Net sales by business (YoY)
system investments aimed at automation and efficiency were strong.
(Unit: Millions of yen)

(Unit: Millions of yen)

FY2023/3

29,023

FY2024/3

27,026
AmountRatio

Amount

YoY

Ratio

9,352
8,017

13,918

5,090

23/3

SystemSolutions

8,017

29.7%

9,352

32.2％

＋1,335＋16.7％

Embedded

13,91851.5%

13,724

47.3％

(194)

(1.4)％FA Solutions

5,090

18.8%

5,946

20.5％

＋856

＋16.8％

Total

27,026－29,023ー＋1,997＋7.4％

13,724

5,946

24/3

*1 The names of the previous IT, Embedded, and Measurement & FA were changed to the System Solutions,Embedded and the FA Solutions from FY2024/3. The details of each business are as follows.
System: Sale of IT devices, development of apps, development of IoT systems, security measures, etc.
Embedded: Development and manufacturing of industrial computers, sale of industrial embedded computers for machinery, etc.
FA: Sale of measurement devices, inspection equipment and FA devices, development, manufacturing and sale of various
automated and labor-saving manufacturing equipment.

10Technology Solutions Business: ・We capitalized on demand from automotive industry customers for system upgrades andinvestment in building production lines.
Net sales by industry (YoY)(Unit: Millions of yen)

(Unit: Millions of yen)

29,02327,026FY2024/3

FY2023/3

Amount10,141

Amount

Ratio

Ratio

YoY

8,515

14,057

14,154

4,453

4,727

23/3

24/3

Automotive

8,515

31.5%

10,14134.9％＋1,626＋19.1％

FA &Industrial
equipment

14,05752.0%

14,154

48.8％

＋97

＋0.7％

Others

4,453

16.５%

4,727

16.3％

＋273

＋6.1％

Total

27,026－29,023－＋1,997＋7.4％

11

INDEX

Financial results summary for FY2024/3
Earnings forecasts for FY2025/3
Review of the previous medium-term management plan “MNV2023”

Basic policies of the new medium-term management plan “MNV2026”
Numerical target plan and key strategy

12Earnings forecasts for FY2025/3

・We plan to increase Net sales and operating profit in both the Electronic Devices Business andthe Technology Solutions Business.
・We plan to make strategic investments in the final year of our medium-term plan. We also factor
rising interest rates and forex trends into our profit forecasts.

(Unit: Millions of yen)

FY202４/3

FY202５/3(Forecasts)

AmountRatio

AmountRatio

225,150100%

269,000

100％＋43,849＋19.5％

Operating profit

7,711

3.4%

7,900

2.9％

＋188

＋2.4％

Ordinary profit

7,221

3.2%

7,100

2.6％

▲121

▲1.7％

Profit attributable toowners of parent

4,421

2.0%

4,600

1.7％

＋178

＋4.0％

458.80－461.73

－

＋2.93

ー

Net sales

Earnings per share (Yen)

YoY

13

・We changed dividend payout ratio target as 30-40% from the FY2025/3, and plan to the annual
dividend is ¥185 and dividend payout ratio is 40.1% for FY2025/3.

Return to shareholder

Dividend payout
ratio

Annualdividend

Trends in dividends and dividend ratio

YenInc. anniversary
dividend of ¥10

200

185

％

185

50

（Forecast）

180

155

160
140
Inc. anniversary
dividend of ¥5

120

95

100

80
60

70

105

40

105

80

29.7

40.3

100

40.1
（Forecast）

80
32.8

30.4

40

Inc. anniversary
dividend of ¥5

34.2

30

30.6

30.6

30.8

27.9

20
0

20
16/03

17/03

18/03

19/03

20/03

21/03

22/03

23/03

24/03

25/03

14

INDEX

Financial results summary for FY2024/3
Earnings forecasts for FY2025/3
Review of the previous medium-term management plan “MNV2023”

Basic policies of the new medium-term management plan “MNV2026”
Numerical target plan and key strategy

15Given our achievement of plan ahead of schedule even amid changes in the businessenvironment, we have improved our ability to execute action thanks to our implementation ofstrategic scenarios and our new configuration.

Review of the previous medium-term
management plan “MNV2023”
The targets
for the final
fiscal year
(Revised※)

Net sales

Operating profit¥5.0 billion¥170 billion（ ¥ 8 . 3 billion）（ ¥ 2 2 7 . 5 billion）

ROE● Since the plan was first formulated, we haveachieved its initial target ahead of schedule,

8.0％（ 1 0 . 0 ％ or higher ）※Figures in parenthesis are revised targets announced in November 2023

Results(FY2024/3)

Net Sales
250

Operating profit¥225.1 billion（Unit: Billions of yen）

¥7.7 billion
Operating profit

increased customer production volumes andthe impact of the pandemic.

(The management targets for the final fiscal year were achieved
one year earlier than scheduled)
Net sales

despite being affected by factors such as●We believe our basic business policy
was appropriate to the circumstances at

ROE

the time it was formulated, and we have

9.9％
（Unit: Billions of yen）

improved our execution capabilities.

ROE

8.0

200
6.0
150
4.0

100

50

2.0

16

INDEX

Financial results summary for FY2024/3
Earnings forecasts for FY2025/3
Review of the previous medium-term management plan “MNV2023”

Basic policies of the new medium-term management plan “MNV2026”
Numerical target plan and key strategy

17

Awareness of the Business
Environment

As the scale of business expands, the external environment is changing dramatically. Qualitative
improvements through management reforms are urgently needed in order to enhance our corporate value
and evolve to a new stage of growth in response to environmental changes.

When we formulated Make New Value 2023, we declared our intention to enhance
our corporate value and considered measures to achieve that goal, but theenvironment surrounding our company has since changed substantially.

Changes in the external
environment

・ The environment for automobile production and remote work due to the pandemic
・ Changes in the transaction environment with business partners, and a more intensetransaction environment in the device industry
・ The advance of the softwareization of mobility, and growing need for digital transformation(DX) across all industries
・ Exchange rates, investor expectations, and the discerning ability of stakeholders

Although we are ahead of schedule on numerical targets, we must improve our qualityof management and further increase efficiency and profitability in order to achievesustained growth.
・ Evolution of business management
・ Strengthening our execution of key measures to achieve plans

Recognition of issues

・ Creation of a system to maximize group synergy, among others18

MNV2026 Positioning
and Concept

We position this plan as a preparation for evolution to the next stage of growth as well astransformation to a management style that focuses on corporate value enhancement.

FY2024～2026

the Medium-Term Management Plan

FY2027～
the Medium-Term
Management Plan

Implementing reforms

MNV Next

structure to achieve aof our business
new growth stage for

MNV2026

the Hagiwara Electric

An Engineering Solution Partner That Is Connecting Human,
Society and Technology, Through Advanced ElectronicsGroup

FY2021～2023

the Medium-Term Management Plan

Structural reform and

MNV2023

establishment of a business

A Solution Design Company

foundation to prepare for aThat Is Creating the Future Through Advanced Electronics

growth stage thatencompasses changes in

2018
Transition to aholding company
system
A new start
towards our 100th
anniversary

Declaration of
corporate valueenhancement
under our new
configuration◎Building a foundation for growth that will allow us tojump to the next stage◎Growth through reform, execution, and efficiency

the external environment

19

Management Vision
and Aspiration
The society we aim to achieve

Philosophy

Sustainable and prosperous society

Creativity and Ambition

A sustainable society where future manufacturing with cutting-edge
technology supports an affluent society and people enjoy happinessand a sense of fulfillment.

Creativity: All employees adapt to change and continue to create new value
Ambition: All employees continue to strive for further growth without feeling
content with the present conditions

Management Vision
and Aspiration

An Engineering Solution Partner That Is Connecting Human,
Society and Technology, Through Advanced Electronics

value
提供価値
delivered

We will refine the unique strengths of the Hagiwara Electric Group andprovide optimal solutions using cutting-edge innovative technologies thatcombine business strategies with technology strategies.

Key
areas
注力領域

Hagiwara Electric Group’s
areas of expertise
Mobility/manufacturing

Expansion to adjacentindustries
Logistics/robotics

Megatrends & growthmarkets
Energy/smart cities

Values ​we want tocherishUnique strengths ofthe Hagiwara

Mutual empathy andco-creation

Wholesale Business model

Methods of providing
提供方法
services

Solutions-oriented
stance &Business innovation

Professionalism

Solutions-based Business model
Systems Integration Business model
Customized Mass Production Business model

Diversity

Data Platform Business modelManagement foundation
経営基盤・組織風土
Organizational cultureSound and robust
corporate governance toenhance public trust

Capital productivity
management for resource
allocation and advanced
business management

Financial foundation to
support sustainable growth

Human capital managementthat leverages human strengths
to bring out the full potential of
all employees

Independence
and self-reliance20Basic framework of MNV2026

For the next stage of growth for our group, we will once again set "Corporate value enhancement Improving earning power-" as the theme of our medium-term plan, in line with the issues identified in
MNV2023.

Make New Value 2026
Priority policies

Corporate value enhancement -Improving earning power-

Three structural reform
Busi nessstructure

Capi t alproduct i v
ity

Human
capital～Structural reform and establishment of a business foundation to prepare fora growth stage that encompasses changes in the external environment～

Enhance proposal value
through business model
reformReform management with
an awareness of capital
productivity

Maximize employee powerby leveraging humancapitalSix key strategies
Devicesbusinessstrategy

Advancedbusinessmanagement

Solutionsbusinessstrategy

Humanresources
strategy

Businessinnovation
strategy

ESG
promotion

Key management indicator
Net sales¥300

billionOperating profit¥1.1

billionROE

Dividend
payout ratio％ or higher

30～40

11

％

◎ Growth through reform, execution
and efficiency
21

Enhance proposal value
through business model reform

Undertaking the challenge of reforming our business structure with a focus on added
value and profitability.
Strengthening our earning power by offering solutions to societal and customer issues
and obtaining fair profits commensurate with the value we provide.

Solutions-oriented stance (product lineup/
Providingvalue

proposal content/delivery format, and others)
・Expand value-added ancillary development and service
businesses based on a solutions-oriented approach inexisting businesses

The Group’s solutions-oriented
profit structure(conception)

2024年
FY2024/3
3月期

Enhanceproposal value
throughbusinessmodel reform

Building a business model aimed at profitability
Profit・Creating new business models such as data platformbusinesses
conscious・Utilizing our group’s knowledge in device application
nesstechnology, and IoT construction technology, among
othersStimulating business innovation

Promotingco-creation

・Promoting value-added innovation (emergence)
through intra-Group synergies and businesscollaboration with other companies
・Encouraging active use of activity hub of cocreation innovation (established December 2023)

2027年
FY2027/3
3月期

Solutions-based business model

Wholesale Business model

Profit from Solutions-based Business**Figures combining the existing Technology Solutions Business (segment) andthe Solutions-based Business in the Electronic Devices Business (gross profit basis).

22

Reform management with an awarenessof capital productivity

Cost ofcapitalReformmanagementwith anawareness ofcapitalproductivity

Along with business model reform, we are also starting to change our management
style with a focus on capital productivity.

Awareness and implementation of cost of capital・Establishment of an internal management structure
focused on return on invested capital based on a 78% cost of equity

Appropriate business portfolio management

Portfolio

Environmentbuilding

・ Monitoring profitability of key business areas with afocus on business models
・ Establishment and launch of a system that enables astrategic approach to our business portfolio

Accelerating the creation of an environment foradvanced business management
・Sequential renewal of IT systems and formation ofmanagement that focuses on timely capital productivity

Monitoring progress on
medium-term plan
through internalmanagement of KPIs

Appropriate managementof medium- to long-termbusiness portfolio composition

Reflected in corporate
resource allocation andother such areas23

Maximize employee power by leveraging
human capital

Accelerating the cultivation of “creative and ambitious human resources” who will
drive solutions-oriented business model reform, and strengthening the foundation forhuman resources development.
[Practicing human capital management that leverages thehuman strengths unique to the Hagiwara Electric Group]

Human Capital Management Framework(formulated in April 2024)
Managementtargets

Employee activities
for target
attainment

・Maximizing employee performance and synchronizing employee
activities for target attainment with Management targets
・Individual goal management linked to company goals in a scalable
manner•

Implementing innovation activities with universal participation•

Spirit of “independence”•“Promoting ambition and change” × “Work design reform”•

Further improving employee engagement[Introducing ideas and systems for cultivating human resources
and promoting the stimulation of people and organizations]

Human resources system overhaul(starting April 2024)••

Fostering a sense of participation in management among all
employees as we move towards the next stage of growth andaiming corporate operations with the idea that all employees
work together to improve corporate value••

Ambition, fairness, and open thought
Providing diverse opportunities for growth to foster aninnovative mindset and the gaining of experience
Utilizing and cultivating the right people in the right positions to
respond to changes in the business environment
Greater emphasis on performance evaluation based on
expected roles and goal achievement24

INDEX

Financial results summary for FY2024/3
Earnings forecasts for FY2025/3
Review of the previous medium-term management plan “MNV2023”

Basic policies of the new medium-term management plan “MNV2026”
Numerical target plan and key strategy

25

Numerical target

Make New Value 2026
We aim for sales of 300 billion yen and operating profit of
11 billion yen by actively investing in business expansion
and new revenue models
FY2024/3(Results)

Net sales¥225.1 billion

Aiming structural reform and establishment of a business foundation for
a new stage of growth.

We will accelerate expansion and growth investments withappropriate financial leverage to achieve ROE of 11% or higher
ROE

The last FY of MNV2026 (FY2027/3)¥300 billion

11％ or higher
Cost of shareholder's equity
Expansion of Equity Spread＊Equity Spread＝ROE－Cost of shareholder's equity

Cost of capital

OperatingprofitNet sales¥7.7 billion
Operating profit¥1.1 billion

7.0～8.0％
We set a target of dividend payout ratio to 30-40%, andimplement stable dividend payment, considering theratio of dividends to consolidated net assets.
Dividend
payout ratioaround 30%

30～40％
26

Electronic Devices Business Strategy
Business Policy
・Expand the scale of our core business through production materials (semiconductors and electronic components) and contract business・Expandthescopeofourproposalsandservicesthataddresscustomerissuesthroughadeepunderstandingofvehicles,devices,andsystemsandhigh-qualitytechnicalsupport
・Develop and expand the Solutions-based Business, build profitable business models by creating new value, and strengthen earning powerCore businesses
Company foundation
Contribute to customers
and ensure profits throughproduction materials andcontract businessStandardization/efficiency
and infrastructuredevelopment to strengthen
profitability

Make electronics simple

Engineering
service

Ascertain the essence of customer needs

Contribute to customer
solutions and improve earning
power by embodying thecapabilities of an engineering
general contractor

Deepen understanding of cars, devices and systems
High-quality technical support
Provide comprehensive solutions

Semiconductor/ electronic
components

Automotive domain
Global(Generative AI, SFA/CRM,
web, etc.)

Growth businesses

Servicebusiness

Take on the challenge of the
MaaS business using “highprecision location technology +in-vehicle payment platforms”(global products)

Cultivate new products thatwill expand globally, in themass market, and in nonautomotive fields

Manufacturer
functions(image systems, others)

Strengthen our brand power andevolve into an engineeringsolutions partner
New highvalue added
products

Contracted development
Achieve continuous growthEstablish a stable foundation + expand
business scale

Make things
simple withelectronics

Corporate collaboration
andco-creation(group collaboration/
CO-SOU(*1))

Leverage assets accumulated
in the Electronic Device
Business for the
manufacturing business, andcreate revenue sources

Create new value by
combining group assets
and hub activities for intercompany collaboration*1: A business co-creation community based on needs, seeds, and ideas

27

Technology Solutions Business Strategy

Business Policy
・ Promote highly profitable business by solving problems for society and our customers and creating value
・ Launch a data platform business as our fourth pillar, establish a fusion business that leverages the strengths of our three existing businesses,
and take on the challenge of further expanding into new markets and high value-added businesses

An engineering company that supports the creation of future worksite through utilizing data
Leverage our integration capabilities to deliver
manufacturing DX

Contribute to customer value creation throughnew embedded solutions

Create new added value for companies throughdata utilization

Cultivate services and technologies that can be used in a manufacturing
as well as a wide range of related industries, and refine business models
Security

DX service

IT solutions■ Deepen account strategies (selectivity

and concentration)■ Define added value to capture themarket and pursue strategies bydeveloping solutions
・Kanto area and other industries(construction, distribution, among others)
・ Security/Data backup area

IoT platform

IT assessment/
consulting

Data platform■ Provide new value based on data as a service■ Establish a fusion business thatleverages the strengths of our three
existing businesses■ Promote high-value-added businessthrough recurring software licensebusiness

Original products
Board computers

In-house inspection
and measurement
technology

Embedded solutions■ Enter new markets by promoting

collaboration with FA trading companies
with which we can create synergy■ Develop new areas for product development

and production, and expand manufacturer
business by promoting value and expanding
production capacity

Engineering
technologies

FA engineering■ Expand in-house production,a high-value-added business■ Maximize mutual complementarity andsynergistic effects through collaboration
with HAGIWARA ENGINEERING・Reorganization of accounts/area strategies
・Optimal allocation of technical departments

28

Business Innovation Strategies(new business/co-creation activities)

A hub for the Hagiwara Electric Group withnew value creation functions

Business Policy

Hagiwara Innovation
center TOKYO・Create, expand, and deploy businesses based on the Hagiwara Electric Group's unique deep understanding of themobility field・Promote value-added innovation (emergence) through intra-group synergies and business collaboration with othercompanies

Discover business
opportunities for value-added
products by expanding ourwholesale model

Discover engineeringbusiness by utilizing
understanding of the fields ofinspection and onboard
planning

Expansion of value-added products

Development environment & software resale
Architecture & design support /development services

Device NEW
sales

NEW
Developmentenvironment
architecture&design
supportservices

Proposals based on mutual
understanding

ADAS etc.
Inspection
equipment+ Internet & apps

NEW

Vertical integration throughnetwork construction and datautilization + horizontal
expansion of apps
NEW

App provision service

The Company’sequipment
Customer

Customer

New customer

NEW

Development service

PLC

Use &
expansionin otherindustries

Machine tools

NEW

Networking (configuration)

Expand understanding of
automotive electronics

29

We will work to improve operational efficiency and optimize management resources through IT
and DX, as well as accelerate our efforts to shift to a management style that focuses on capital
productivity.

Business Management
Sophistication Strategy
MNV2023

MNV2026

・Establishment of DX promotion activities
・ Sophistication of system infrastructure
・ Sophistication of operations
・Strengthening and speeding up of the group’s management
base
DX implementation

DX implementation

Model creation

Activity deployment

DX implementation
Activity
establishment

Transformation to management that focuses on capital productivity through sophisticationof business management functions
・Assemble IT infrastructure to visualize data and speed up decision-making
・Assemble an investment decision scheme to speed up the decision-making process and accelerate growth・Strengthen supply chain management through standardization and streamlining of logistics management, proper inventory
management, and other measures
Transformation to a systemsdriven new management style・Functional reform projects

Promoting DX ・Start of structuralreformactivities
・Developing scenarios
and acceleratingfor DX promotion and
IT investment
establishing
Content management
・Security enhancement
infrastructure
・Hybrid work
configuration
・Digitalization

Analysis & forecast
Production/
distribution
management

Sales
management

Implementing a management style that focuses oncapital productivity
Capital cost management

Business
investments

Investment

Return・Operational efficiency
・Improved response incustomer service
・Remote support
available

SFA

Personnel
management

Finance ,accounting,funds,
settlement

・Capital structure that balancesfinancial soundness and capitalefficiency
・Strengthening relationships withfinancial institutions

management Financing

Creditors
Futureforecast

Incubation
M&A

Paperlessinfrastructure
configuration

Capital structure (procurement)

・Understanding of appropriate business and financial
risks
Results
・Sophistication of decision-making systems
analysis(investment criteria/monitoring mechanisms)
・Improvement of
the cash conversion cycle (CCC)
Asset
Liabilities
AssetsNet
assetsConstructive
dialogueShareholders

Shareholder return

Business portfolio management
・Resource allocation that considers thebalance between working capital and growthinvestments associated with businessexpansion・Systems-drivenmonitoring enhancement

Recognitionof current
status

Forecasting
andactualization
management

・Implementing stable dividends
while keeping in mind the balance
between growth investments andinternal reserves
・Expanded disclosure information30

Implementation of human capital management to undertake challenges and maximize
performance.

Human Resource Strategy
Employees= assets

Using human capital management that leverages the “human” strengths unique to the
Hagiwara Electric Group to maximize the abilities of all our employees
Our aspirations for human capitalmanagement / overall vision

Taking on the challenge of innovation throughuniversal participation

Corporate value enhancement
Three “innovations”→“SHINKA (typesofevolution)”

Human

Taking on the challenge of
my innovation
Radical fresh
innovation

InventBold and daring
innovation

EvolveFirmly rooted
steady innovation

DeepenGeneral employees

Key players in creativity andambitionManagers
Driving innovation
Executives
Creating an environment for
innovation

Business

Technology

Each individual will “voluntarily” alter their behavior withthe spirit of “independence”“Human” strengths unique to the Hagiwara Electric Group
Broad anddeep knowledge
into mobility-related
technologies andmanufacturing

Two spirits of “independence”

Ability to build trust

Deep understanding

over deep and long-term
relationships withcustomers and partners

Independence

Autonomyof the mobility industry andcustomer needs

Connect and link
oneself

Demonstrate highprofessional ethics

31

Human Resources strategy
HR strategy KGIs and Key strategic themes

Implementation of human capital management to undertake challenges and maximize
performance.

Corporate value enhancement
innovation

HR strategy

Promoting challenges andreformKGIWork design reform

Human capital productivity

Sub KGI Human capital investment/ employee engagement
Key strategic themes

Talent management
Promoting reform through a new personnel system(recruitment, placement, training, evaluation)

Activity Based Working (ABW)
Health Management
compliance

Diversity, Fairness & Inclusion(DFI)

Provide all employees with fair and equal opportunities
suited to their needs, and freely exchange andcombine diverse knowledge
Promote autonomous working styles to suit the situation

Without healthy employees, there is no innovation either
Ensure a strong sense of responsibility as a member of society

32

Continue and deepen our efforts by leveraging the results andactivities of MNV2023.
Accelerate the creation of an internal environment that supports
human resource growth and innovation creation.
Seek out ways to address and respond to new sustainability themes.

ESG Promotion

・Disclosure of sustainability information in
annual securities reports
・Funding through ESG management support
private placement bonds・Acquisition of DBJ health management rating・ Accelerating workplace reform・Health Management Declaration
・Promotion of remote work and free address policy

management

・ Member of the TCFD Consortium
・ Promoting human sources system reform・Commencement of GHG emissions (Scope)
calculation

sustainability

・Endorsement of TCFD
recommendations

・Certification as “Excellent Corporation for
Health Management”

・Establishment of the Sustainability Committee

Deepening・Establishment of a dedicatedsustainability department

Make New Value
2026
Challenge themes↗Scope 1 and 2 reduction targets (minimum 25%

・Publication of TCFD
recommendations on the website

reduction vs. FY2020)↗Stimulation of SDGs activities through open
innovation creation↗Human resource development throughhuman capital management practices↗Promoting human rights due diligence↗Enhancement of ESG information disclosure↗Strengthening of corporate governance・Commencement of CDP replies

・Determination of materiality
・Publication of sustainability content on thewebsite2023

・Training on SDGs adoption
・Review and re-declaration of the General
Business Owner Action Plan

2022
2021

33

【Disclaimer concerning use of this document】
Every effort has been made to ensure accuracy in preparing these materials, but no guarantee is made regarding theaccuracy or completeness of the information.
Performance forecasts and future projections contained herein are based on information available at the time of preparationand contain potential risks and uncertainties. Actual performance may therefore differ significantly from future forecasts due
to various factors such as changes in the business environment.
Hence, no investment decisions should be made based solely on these materials. Furthermore, the Company assumes noresponsibility whatsoever for any damages incurred as a result of the use of these materials.