Message from the President

Progress of medium-term management plan for 2021-2023
Nippon Seiki Group has advocated the management

ers' supply chains intact. Also, in parallel with maintaining

vision at our medium-term management plan started in

the supply chain, we worked on group-wide efforts to

2021 that promotes changes into “lean corporate

reduce logistics costs and improve costs, and as a result

structure” as well as “Facing the future Challenge ＆Change for 2030”.

11

we were able to escape from an operating deficit in fiscal
2021. In fiscal 2022, we achieved 275.7 billion yen of

In addition, we have proclaimed again the following

sales revenue, which exceeded the published value at

written statement “aiming to be a total solution company

the beginning of the period and were able to turn thethat provides safety, security, and excitement to peoplebusiness into a surplus of 2.8 billion yen of operatingaround the world through technology”.

income.

Looking back on last year, although the influence on

Being appointed as the company president from June

the pandemic of the new coronavirus gradually shrank,

2020, the speed of change has globally accelerated such

we were significantly affected by the global tightening ofas the pandemic of Covid19, Russian invasion ofelectronic components such as semiconductors and the

Ukraine, rising global prices and interest rates, and rapid

resulting production adjustments and reductions in

depreciation of the yen. Symbolized by “CASE” andautomobiles and motorcycles. Yet, our group continued“MaaS” the automobile industry is now in the midst of ato build trust by making frantic efforts to keep our custom-

revolutionary period of 100 years.

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Having a ﬁrm axis as an organization,

02
Nippon Seiki Group's Value Creation Process

we will work to realize a proﬁt structurethat is less susceptible
to changes in external environments.

03
ESG Initiatives

04

change into a “lean corporate structure” aiming togroup. Also at sales subsidiaries, shared services andconstruct a strong management foundation by having ancompact operations that integrate management functions

axis as an organization. “Lean corporate structure” is the

between subsidiaries need to be accelerated. The

state of continuing PDCA cycles for maximizing added

second is to improve the local procurement rate of parts

value without depending on sales as well as minimizing

at factories around the world and reduce transportation

fixed costs. Our group suffered a big blow of a decline inand packaging costs. Currently, most subsidiaries

sales due to the coronavirus pandemic and the tightreceive parts supplied from our head office. But we willsqueeze on semiconductors. Then what we realized wasindicate the local procurement rate that each subsidiary

the need for an earnings structure that is less susceptible

should aim for as a KPI and will work to strengthen our

to fluctuations in sales due to changes in the external

system to accelerate this goal.

environment. Therefore, we are to work on various

Last year, thanks to the measures by lean manage-

measures in order to realize the “lean corporate

ment which contributed to the business recovery, we

structure” as our slogan.

turned a good profit. We will continue to vigorously

For lean management, the first is to improve the ratio

05
Company data

personnel ratio at the subsidiary factories across the

Financial Statements

In such an era of change, our group is promoting thepromote lean management in fiscal 2023.

of selling, general and administrative expenses to sales.
Specifically, reducing sales management personnel
costs and expenses, and optimizing direct and indirect

Next Page

Nippon Seiki Integrated Report12Message from the President

Initiatives for business recovery

Product development with new value

We recognize that further performance improvement is

In order to increase profitability over the medium tonecessary to meet the expectations of our stakeholders,long term, we are developing products with new value

especially our shareholders, for our group. We will workby leveraging the technological capabilities that ourto establish a lean corporate structure and improvegroup has cultivated. At the "Human and Automotive

profitability throughout the company.

Technology Exhibition" in May 2023, we exhibited our

For items that we recognize as important manage-

new product "Windshield Display" for the first time.

ment issues for our group, we name them as “focus

The windshield display is a product that has a liquid

theme” and tackle them as in-house projects steered by

crystal embedded in the black area at the bottom of aan executive officer in charge as a project leader. Among

car's windshield to display information such as speed

these focus themes, I would like to introduce two things

and warnings. By combining it with the Head Up

positioned as particularly important measures. The first

Display, we can create a safer and more secureis "improving costs in the automotive business." We

driving environment with less blurring of the driver's

operate and establish daily cost improvement activity

line of sight while driving.

processes, promote VA (Value Analysis)/VE (Value

In order to expand the business of Head Up

Engineering) for products under development and mass

Display that help prevent traffic accidents, we areproduction, and promote local procurement. The second

also developing a “retrofittable combiner-type Headis "reducing design costs by reorganizing the design

Up Display'' targeting cars without options and usedbase." We are working to shift resources to low-costcars. Unfortunately, Head Up Display is not yet

design bases and foster local engineers.

well-known in Japan, so we hope that this “retrofitta-

We are also working to resolve issues in each region
in a project format. In Europe, we are firmly promoting a

ble Head Up Display'' will help end users feel morefamiliar with Head Up Display.

profitability plan and aiming to transform our structure

Also by utilizing our group's sensor sensing

into a profitable one. We view the Indian region as atechnology, we developed the guidance systemfuture growth market and are working to ensure future"Holfee" for mini excavators (excavation construction

profitability by creating a medium-term roadmap andmachines), and started selling the product frompromoting cost reductions.

December 2022. Holfee is a guidance system that

Moreover, we are promoting digital transformationtransmits information on the target depth and slope of(DX) of our operations and are working to build a system

excavation to the operator's smartphone at the site ofthat will quickly lead to business improvements byground excavation. We believe that this is a socially

digitizing indirect operations and data analysis of income

significant product that will help solve the laborand expenditure status.

shortage and technology inheritance issues in theLast year, in light of the fact that we had to postpone

construction industry these days, and we hope that it

our business target of 5% operating profit margin to one

will improve the work efficiency at civil engineering

year, which was originally scheduled for fiscal 2023, weand construction sites, and that its use and dissemi-

will speed up decision-making and implementation

nation will expand.

and continue these measures to improve profitability.

Windshield Display

13

Nippon Seiki Integrated Report

01

continue working in a healthy and energetic manner.

Our group considers responding to climate change

activities of our group to achieve sustainable devel-

as one of our important managements issues andworks to reduce our environmental impact in ourcurrent medium-term management plan. Initiatives
industry, which is the core business of our group, areunavoidable social issues and have an impact that

“Nippon Seiki Group’s human rights policy” wasenacted in February 2023. In order for all business
opment, we need to continue to meet the demands ofa global society that fulfills our responsibility torespect human rights. We reiterate our group's

02

stance on human rights and will strengthen andNippon Seiki Group's Value Creation Process

towards carbon neutrality in the automotive parts

Overview of Nippon Seiki Group

Responding to climate change
and human capital management

expand our human rights initiatives by establishing
this policy.

can affect the sustainability of the business itself.
In response to increasing social demand forachieving carbon neutrality, we have been proceeding with research and development of carbon neutral
meters as part of our efforts to reduce the environmental impact of our products. We have developed acarbon neutral concept meter that uses biomass
material mixed with rice resin and recycled resin, and03

Carbon Neutral Meter

ESG Initiatives

the product is currently in the evaluation stage. We
are also working to reduce the usage of the total
amount of raw materials by pursuing miniaturization
and weight reduction.
Another important management issue is an investment in human capital, which is essential to increasing corporate value over the medium to long term. We
believe in the way of thinking that “human resources
are our most important management resource” andrecognize that developing autonomous thinkers
and act on their own) is an extremely importantmanagement issue.
Our management vision “Challenge & Change”
embodies the will of all of us to aim for personal
growth by having a mindset of taking on challenges
without fear of change. We will work to promote
diversity so that everyone can demonstrate theirindividuality and abilities and play an active role,
regardless of age, gender, race, nationality, or disability. In order to foster such "spirit of challenge" andzational culture, we are promoting various environmental improvements and currently reviewing our
personnel system.

These will be scheduled to begin

operation from next year. We aim to promote healthmedium-term business plan for the next three years.
Under the new plan, in addition to improving
profitability, we will formulate a capital policy with aneye toward improving capital efficiency as well as04

reviewing our shareholder return policy. By doing so,
we aim to develop our business over the medium tolong term and maximize shareholder value.
In the next medium-term management plan,“Contribute to the prosperity of society by providing
high-value products and services from the customer's
perspective” being our group management philosophy in mind, our focus will remain unchanged: toproduce high value-added products and services byrefining, evolving, and developing our technology. In

05

addition, we will strive to further improve corporate
value with fostering a corporate culture that takes on

Company data

"diversity" as part of our corporate culture and organi-Now, our company is working on creating a

Financial Statements(people who are self-disciplined, think by themselves,

Toward the next medium-term
management planchallenges as well as the change of lean management. We appreciate your continuous understanding
and support of our group.

management and improve work-life balance andRepresentative Director President

strive to create a system that allows our employees to

President Executive Director

Nippon Seiki Integrated Report14

Sustainability Policy

Nippon Seiki Group
Sustainability Policy
We will pursue the realization of a sustainable society by solving social issues and emphasizing dialogue with all stakeholders through corporate activities that balance social and economic value based on our management philosophy andgroup vision.

Realization of Management philosophy
Implement sustainability management & provide circular economy

Capitalinvestment

Creation of economic value

Creation of economic value

Environment

Perceptual
support・Financial capital・Human capital・Intellectual
capitalDevelopment ofESG
measures・Social andrelational capital・Natural capital・Manufacturing

Socialcapital×

Evolution ofcore
technologies

Governance

Providingtotalsolution

Solving social
issuesLifestyleinnovation

Contribute to
SDGs

Stakeholder engagement: customers, local communities, business partners, shareholders, employees[ Shared value creation framework adopted by Nippon Seiki Group ]Nippon Seiki Group will work to realize the development goals of SDGs while taking an Outside-In
Business Approach to contribute to society throughits core business, based on the concept of CSV(Creating Shared Value), which aims to achieve bothbusiness development and solutions to social issues
by leveraging our strengths.

Social(outside)
Expansion of stakeholders

Outside-In
Business Approach

New products/services
for "future customers"

Development of
new products andservices based on
solutions to social
issuesCustomers

Existing products/services
for "existing customers"
Market in

Product out

Starting point ofsocial issues（inside）

Expansion of products & services

15

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Relationship of Our CSR Important Themes and SDGs 17 Objectives
The figures in the table are those related to the activities of our group from the 169 targets (1.1-17.19) of the SDGs.

ESG

Important CSR theme
3.6

To reduce the burden on drivers
due to the evolution of HMI

3.6

11.2
11.2

9

Reduction of materials by reducing
the size and weight of products

02

9.4

Solutions to regional issues throughcollaboration between service businesses

12.8
9.b

Creation of new service businesses

6.3
6.6

Environmental Management System

7.2
7.3

8.7

9.4

11.6

12.5

13.1
13.2

Global warming prevention[electric power]

7.2
7.3

Prevention of global warming[heavy oil]

7.2
7.3

11.6

13.1
13.2

Prevention of global warming[city gas]

7.2
7.3

11.6

13.1
13.2

Water conservation(water supply and sewerage)

6.6

03
12.5

9.4

12.5

Develop eco-friendly products

9.4

12.8

3.9

14.1

12.4

6.3

Promotion of green procurement

7.2
7.3

Measures against climate change(CO₂ emissions)

7.2
7.3

12.4

8.7

Emergency Response(Strengthening BCP Response)

13.1
13.2

11.6

13.1
13.2

11.b

13.1

14.3

5.c

8.5
8.7

Work-Life Balance / Reform ofwork style /employee satisfaction

5.4

8.3
8.5

04

10.2

17

3.4
3.d

14.4

Society

Increasing productivity amid declining
birthrate and aging workforce

8.1
8.3

Occupational Health and Safety
Management Systems

8.2
8.5

9.1

4.4

13.3
9

Quality Management System

16.2/16.3
16.4

8.3
8.9

5.1

9.2

10.2

12.b

13.1

15.1

Company data

4.1
4.7

Contributing to the Community(Global & Domestic)

05

17

8.7

Supply chain management

17
17

Governance16.1/16.3
16.5

Compliance

9.c

Information Security

16.3
16.5

Corporate Governance /Internal Control System

Our group's efforts

17

Financial Statements

Diversity Inclusion / Human Rights /Gender/Disabled

Fostering and Education of Personnel
with Autonomous Thinking

15.1

15.1
15.4

6.6

Conservation of biodiversity

ESG Initiatives

Environment

11.6

Circular economy

Health management

15.1

13.1
13.2

Reduction of Waste Emissions /Reuse / Recycling

Chemicals / Management ofchemical substances in products

Nippon Seiki Group's Value Creation Process

Business activities

Improving Safety by Increasing
the Number and Rate of HUDs Used

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Nippon Seiki Integrated Report

16

Value creation process

The essence of a company is the creation of common values. Our group will make use of a variety of capital (management resources) topromote our business and enhance our corporate value by providing value to our customers, shareholders, investors, employees, communities and other stakeholders. Created value increases capital and establishes the foundation for further development.

Business Model for solving social issues(creation of positive impact)

Capital to Use

Financial CapitalSound financial base with sufficient capital interms of both quality and quantity

Human capitalsolutions to meet

specialized technologies

Accumulation of capitalthrough business
operations and internalbusiness circulation

Intellectual capital

Ability to respond to customer needs throughadvanced manufacturing technologies accumulated through this specialized know-how

Wide range of highly

customer needs

Corporate culture that emphasizes Change,
Diversity, Health and Challeng

To accumulate comprehensive strengthand advanced expertise as a manufacturing company, and to collaborate within thegroup
Integration of diverse functions and capital
expenditure

Providing

Customer
Input

Collaboration forcustomer-oriented proposals
OutputRelationship
Continual improvement ofprofessional services

Social and affiliated capital
Excellent and Strong global customer network

Natural capitalManagement Foundation Supporting
Business Models

・Governance ・Risk management ・Compliance

Environment, ecosystem, and ecology

Manufacturing capital
Facilities, equipment, and infrastructure
for manufacturing products and providing
services, etc.

Social and economic environment
Geopolitical changes in the political economy, an increase in new
areas of automotive industry CASE response, an increase in safety
demands, expectations for high-value-added products, reforms in
car ownership, the prolongation of the low interest rate era, andcorporate governance reforms

Circulation andMateriality

17

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki GroupStrengthening and Strengthening
Sustainable Expansion of Operations

Five Business Pillars■Resin Compound business

02

Realization of the SDGs

■Automotive components business■Consumer products business

Creating value for society

Nippon Seiki Group's Value Creation Process

To Stakeholders
Maximizing the value
provided

Customers■Automobile sales business■Service BusinessBusiness

03
ESG Initiatives

Key word for business

Employees▶ Global▶ Manufacturing▶ Network

Shareholders▶ Regional▶ RetailSociety
Economy04

Creation of common value [CSV]

Financial Statements

Improvement of affluence

Society

Improvement of well-being

NatureMaintaining stocks of natural capital

Conversion to capital

Financial capital / Human capital /Intellectual capital / Social and
Affiliated capital / Natural capital /Manufacturing capital

05
Company data

Expansion of CapitalManagement

Nippon Seiki Integrated Report18

Materiality
Extremely Important

Materiality-specific process- In selecting materiality In order for a company to carry out sustainable
activities, it is necessary to coexist organically interms of its impact on society and corporate value.
The impact of the matrix on social contribution on
the vertical axis and corporate value on thehorizontal axis are divided into four major categories

Compliance area in a soft law
・Peace and fairness, elimination of inequality and fair trade
・Support for poverty, human rights, NGOs, and NPOs
・Gender equality
・Conflict prevention, poverty and the eradication of hunger
・Global environment (ocean, atmosphere, and forests)
・Innovation of Industrial Fundamentals
・Safe and secure mobility society

Compliance area in a soft law

・Professional volunteers to contribute to society

At present, these are issues that are not yet
sufficiently addressed or new issues that need tobe addressed as social contribution activities.

・Ethical business (ethical consumption, corporate style)Compliance area in a hard law
There are many issues that have been addressedso far. It is an indispensable and important matterthat serves as the foundation for our corporate
activities.

Impact materiality area

Stakeholder communication area

Social Impact

The Group's social and business-oriented impact
materiality is grouped into two categories: social
issues to be solved through business activities,
and social issues to be solved in response to the
expectations of stakeholders.

We are still working to this end and will continue todo so in the future.

Compliance area in a hard law
・Legal compliance, governance, risk management

Important・Employment creation, education and training,
occupational health and safety

・Energy saving, recycling

Important19

Nippon Seiki Integrated Report

01
Overview of Nippon Seiki Group

Impact Materiality
Social issues that should be resolved through the five in-house businesses
Automotive Component Business

Consumer Parts Business

Providing a Safe and Secure Car Life

Innovation of technology baseRealization of a circular economy❶ traffic accidents Prevention❶ Proposing and providing comfortable lifestyles❶ Responding❷ To respond to, propose, and provide new lifestyles❷ Proposing❸ environmental conservation:❸ environmental conservation:

Improvement of visibility of HUD and meters,
popularization and penetration of HUD products❹ Sustainable supply chains:

MineralGreen Procurement, Responsible
Procurement and BCP*

❹ Conservation: Use recycled materials

Mineral■Promoting the spread of HUD, which contributes
to the prevention of traffic accidents throughside-sight driving

Comfortable
Products
through■Providing
Relationships with OEM Manufacturing of High
Quality, High Performance and High Reliability■Build a business (recycling business) that
responds to climate change related fields throughtechnological innovations in the materials field■Improvement of mountability of HUD in cars by
miniaturizing HUD to promote HUD■We propose and provide new products that
respond to social and industry changes andneeds, such as the corona outbreak, thedeclining birthrate and the aging of society, andthe digitalization.

■Improving customer satisfaction in a wide rangeof fields, including high-performance resins andclean resins (acquisition of management system
certification, expansion of sales to new business
partners)■Safe driving and the pleasure of driving by
reducing the burden on drivers (HMI evolution,
integrated cockpit development, development of
next-generation sensors)［ ▶P21-22 ］［ ▶P23-24 ］［ ▶P25-26 ］

Automotive Sales Business

Service Businesses

Realization of a well-being car life

Realization of a well-being and the creation of effective time03

❶ To offer ease of use and comfort (pursuit of convenience and comfort)

needs

ESG Initiatives❶ To propose and promote new sales in response to social changes and social

02

Energy conservation by contributing to theweight reduction of products

Nippon Seiki Group's Value Creation Process

Energy saving by weight reduction (compact
and thin), use of recycled materials❸ Conservation: Use recycled materials

thematerials solutions that take theenvironment into consideration(Development of New Products)

Energy conservation through downsizing andweight reduction

Green Procurement, Responsible
Procurement and BCP*

to and contributing totechnological advancement of customers(easy-to-use products)❷ environmental conservation:❹ Sustainable supply chains:

Plastic Compound Business❷ Eliminating complications and solving problems (promotion of efficiency)❷ Improving the quality of life of customers❸ Providing Risk Preparation and Reliability❸ Close relationships with local communities and contributing to them

❹ Close relationship with the local community, contribution to the local community,❹ Customer Satisfaction and Improvement of Convenience (Collaboration withand new lifestyle proposals

Other Industries, Creation of Subscription Opportunities)■Offering products and services that respond to changes in society (mobility
society), and offering various opportunities for sales and use of mobility■Outsourcing business processes Efficiency of society through BPO (Business
Process Outsourcing)■Development and expansion of one-stop services for community-based car life(new cars, used cars, services (inspection, inspection) and insurance)■Support for digital transformation (DX) of customers and society■Realizing affluent lifestyles by proposing new services tailored to local［ ▶P27-28 ］［ ▶P29-30 ］

Social issues to be solved in response to stakeholder’s ecpectation

・Fostering the Next Generation Leaders andRaising Awareness・Diversity
・Occupational Health and Safety

・To ensure product quality
・Improving productivity
・Sustainable supply chain
・Responding to Climate Change
・Energy conservation and recycling［ ▶P37、41-42 ］

04

Coexistencewith Society

Governance /Compliance

・Promotion of health management
・To contribute to and interact with local
communities

・Promotion of compliance and compliance・Compliance with the Compliance Action
Guidelines
・Enhancement and evolution of information
security management
・BCP*Business Continuity Plan management
・Intellectual Property Protection

Monozukuri /Environment［ ▶P33-36,38 ］［ ▶P39-40,44 ］

Financial Statements

Utilization of
Human resources［ ▶45-48 ］※ BCP：Business Continuity Planning

Stakeholder communication area
・Donations and volunteers

Company data・Employee engagement

05

・Health management

・Disaster prevention support, cleanup activities, and tree-planting activities
・Nagaoka fireworks, folk dance flow, and support for NPOs

・Regional exchange programs (soccer classes, on-site visits)

Extremely Important

Impact on Corporate Value
Nippon Seiki Integrated Report20

Nippon Seiki Group Business
Automotive parts businessWe continue producing our products by accurately conveying the continuously changing information to the driver, pursuing theimprovement of convenience and comfortability, and paying meticulous attention to every single part. With our eyes focused on
the environmental changes and technology progressions, we will play our role of protecting people’s safety and security, runningas the top leader of meter developers.

01

Strength ofAutomotive parts business

Accumulated
long-standing
development know-how

Meters and sensors for vehicles and motorbikes being produced

Comprehensivenessand adaptability tocustomer requirement

and sold worldwide: this is the core business of our group. In recent
years we have focused on HUD (Head Up Display), which projects

Automotive parts
business

information such as speed and navigation onto the windshield in acar. We also supply substrate mounting service for other in-car parts
makers.
Various information can be monitored by the sensors, and they
are conveyed to a driver through optimized forms shown on themeters. In this way, we contribute to safety drive and, at the same

3STRENGTHS
Globalproduction network

Technologicalcapacityof expanding
business fields

Footprint of eachregion worldwide

Optical technology for HUD,
Global substrate mounting
experiencestime, create the impression of driving.

02

Overview of the fiscal year endingin March 2023

Sales have recovered to 2019 levels due to the reduction in the impact of the newSales

coronavirus. Although we were affected by production adjustments by automakers(million yen)

due to a shortage of parts, including semiconductors, and soaring logistics and

250,000

parts material costs, we have been working on strengthening profitability through200,000

measures such as stable production by securing safety stocks and optimization of

150,000

logistics.

100,000

In the automotive parts business, which is our group's main business, we have

50,000been continuing to work on improving profitability. We are striving to build a system

0that can generate stable profits by flexibly responding to changes in the external

216,483
170,818

March 2022

March 2023

environment, such as promoting VA (Value Analysis) / VE (Value Engineering),
reforming business processes, suppressing design and development costs, andreviewing product packaging specifications.

Operating Profit(million yen)

1,179

2,000
0

Achievable SDGs
goals throughthe activity-2,000-4,000-6,000-5,857

March 2022

21

Nippon Seiki Integrated Report

March 2023

01

External Environment

Opportunities

Risks■Popularization of integrated cockpits■Acceleration of the movement toward reorganization of the■Increasing demand of EMS due to electric vehicles■Change in consumer sentiment (from possession to sharing)■Tightening the regulations of supporting device for safety drive■Expansion of demand for vehicles and motorbikes in newly
developing countries

Overview of Nippon Seiki Group03

vehicle industry and cross-industrial alliance■Increased competition in market due to software-computerized
vehicles■Taking in new entrants from consumer electronics industry

02

Growth strategy

Bearing in mind the supply of safety and security to the society,activities for end users (drivers). In addition, not only producing

we work on maximizing customer satisfaction in each businessoutside Japan, but we will accelerate to form a localized volume

domain: meters, HUD, sensors, and in-car EMS.

production process including production design and procuringparts. Electric vehicles are expected to be expanding in theof integrated cockpits in-cars, as well as the reinforcement of

future; with our quality and adaptability which have been cultivat-

cost competitiveness of meters for motorbikes in India/ASEAN

ed in the in-car industry, we continue to progress the coreregions. In order to further popularize Head Up Display, we willtechnologies such as expansion of in-car EMS business andstrengthen our competitiveness by developing compact andproduct developments by the combination of sensors andsimple specifications and increase awareness through PR

systems.

03
ESG Initiatives

As for meters, we will drive forward the technical development

05

Nippon Seiki Group's Value Creation Process

04

KPI
FY2023 target

7% reduction

15% reduction[2] Number of next-generation sensors/new sensors developed

2 items

4 items[3] Number of patent applications (meter related)

57 items

63 items

4.97% applied (recycled PP materials used)

10%[1] HUD volume (compared to previous year)[4] Recycling rate of meter resin parts

04
Financial Statements

FY2022 results

TOPIC
Developing products that contribute to
reducing traffic accidents

Developing products that contributeto solving social issues

We exhibited the Windshield display, our new product, at the
Automotive Engineering Exposition held in May, 2023. This
product reflects the display on the black part at the bottom of thewindshield and is characterized by better visibility with less eye
movement than conventional meters. This reduces the time whichtakes to recognize information, contributing to improved safety.
Our group will continue to contribute to reducing traffic accidents.

We have developed Holfee, aguidance system for small-sized
excavators that utilizes oursensing technology.
"Holfee" is a guidance systemthat helps solve labor shortages
andtechnology
inheritanceissues in the constructionindustry. At the ground excavation site, information on thetarget excavation depth andslope is conveyed to workers,
which helps in construction work.

05

Nippon Seiki Integrated ReportCompany data

2D handy
machine guidance22

Nippon Seiki Group Business
Consumer parts business
As for consumer parts business, we have made use of the technologies cultivated in the in-car business, and have been developing, producing, and selling products such as home appliances, office equipment, controllers for industrial equipment, and operation units as interfaces between human and machinery.

01

Strength ofConsumer parts business

Expansion of
our own brandApplicable to propose
technology-mix from our own
technologies/OEM

We efficiently, smoothly, and comprehensively support customers
under the partnership by supplying “optimizing” technology thathave been cultivated to meet customer needs. With our technology

Consumer parts
business

cultivated by the in-car parts business as well as continuous
process from designing to production, we meet various customers’
requests globally and supply reassuring products with excellent
quality, performance, and reliability. New value combined withproduction/technology based on the current business performance

3STRENGTHSBusiness
Cross-proposals
experiences withamong products, techmajor manufacturers
nologies, and customers
of assembled products

will be supplied aggressively together with our own branding
development.

02

Think outside the existing
business framework for newvalue-added proposals

Long term relationshipwith OEM

Overview of the fiscal year endingin March 2023

In the fiscal year ending in March 2023, both sales and operating income increased
significantly due to the alleviation of the impact of the reduction in production of our
products affected by the global tightening of semiconductors and electronic compo-

Sales(million yen)

25,000nents in the previous period. Although sales increased in the previous period

20,000compared to the year before, due to the semiconductor shortage, some models

15,000were unable to keep up with the increase in customer orders. However, as the parts

10,000procurement environment improved, the backlog of deliveries from the previous

5,000

period was cleared and sales increased significantly. As sales increased, profits0

also increased, resulting in increased sales and profits in the fiscal year ending

19,41912,444

March 2022

March 2023

March 2023.
In the future, we will endeavor to achieve even more stable production bystabilizing deliveries and proposing ways to shorten the supply chain by leveraging
our group's production network.

Operating Profit(million yen)

1,349

1,500

Achievable SDGs
goals throughthe activity

1,000
500
138
0

23

Nippon Seiki Integrated Report

March 2022

March 2023

01

External Environment

Opportunities

Risks■Changes in global strategies of home appliance and office■Post-Covid-19 demand trends

equipment makers■Acceleration of all-electric home

■Change in roles of office equipment (Expansion of multifunction machine)■Change in home appliance demand due to climate change

Overview of Nippon Seiki Group03■More strict regulations of environment and energy conservation worldwide■Decrease in home appliance sales due to economic fluctuations overseas■Stabilization of parts procurement

Growth strategy
production/sales business for our flagships: air-conditioners

such as sales, development, design and production, we aim toand operation panels for office equipment, in addition to the

supply values that can contribute to maximize the value, to bemarketing promotion, we will try to expand the business to ourmarket-oriented high quality, and to improve QOL to our custom-

existing customers. We also aim to enlarge our business domain

ers. Making use of sensing technology and data analyzing/appli-

by utilizing our group assets which have been developed by thecation technology, which are our core technology, we will develop

worldwide production sites/processes and in-car parts business-

new products grasping the change of customer demand in thees. As for new market development and new product develop-

future. Accordingly, we intend to expand the business not only inment, we will defy the boundaries of the current business andthe BtoB but also in the BtoC domain, and further increase

existing products: we will fuse together with various fields,

customer satisfaction.

customers, and technologies to propose newly value-added

By the increase of profitability as well as the expansion of03
ESG Initiatives

By improving quality as well as productivity of all the processes

05

Nippon Seiki Group's Value Creation Process

0402

products.

KPI
04
FY2023 target[1] Number of orders received in the new domain

2 items

1 item[2] Number of new products introduced into the market

2 items

1 item released

Financial Statements

FY2022 results

TOPIC
Development of air quality sensor productsHome appliance manufacturers, who are our group’s customers,
are promoting local production overseas since the air conditioning equipment market is expandingaround the world due to climatechange and economic development inemerging countries. To follow thismovement, our group will utilize theproduction network cultivated throughour automotive parts business topropose optimal production locations
to our customers.

In 2021, we launched a CO2Lamp that detect and display indoor
carbon dioxide concentration. We are currently developing a
product that displays "air quality" including other components by
utilizing our sensing, analysis, display, and communication
technologies.

Nippon Seiki Integrated Report05
Company data

Expansion of utilizing overseas production bases

24Nippon Seiki Group BusinessResin compound business
Developing coloring business on high-performance resin materials of transparent resins (for vehicles, LED lighting, lenses,
medical use, etc.).
Expanding our business in Japan, Thailand, China, etc. Our main customers are major chemical manufacturers.

01

Strength ofResin compound business

Quality oftransparent resin
Long-range accumulated
production know-how oftransparent resin

In resin compound business, the sales of high functional plastic
materials and high value-added products like optical products withsuper low foreign substances utilized by the advantage of ourResin compoundbusiness

strengths are further promoted acceleratingly for constructing astable revenue base. We will try to contribute to maximizing customer’s product values by meeting the needs of light-weight vehicle
body (as the replacement of metal to plastics) due to the global
environmental change as well as proposing the solutions for the use

Clean production
environment to realize
lower foreign objectsof environmentally-friendly plastic materials.

02

3STRENGTHS
To meet small lot
requests by flexible
production system

Production under clean
environment
To be able to undertake
several inspections

To be able to meet various
customers’ requests

Overview of the fiscal year endingin March 2023

In the fiscal year ending in March 2023, although sales exceeded the previous
period, profits decreased due to a decrease in orders for materials for highvalue-added optical lenses, an increase in orders for low-value-added items, andthe impact of soaring electricity rates.
In the future, we will develop film materials that take advantage of our strengths intransparent, low-contamination materials, materials for medical care, food, andSales(million yen)

10,0008,727

March 2022

March 2023

7,500
5,000

cosmetics that require a high level of quality control management, and highly

2,500

functional materials equipped for automobiles in anticipation of the electrification of0

automobiles. We will focus on expanding sales for those materials. We will strive to

8,626

secure a stable earnings base by increasing the ratio of high value-added products.
Operating Profit(million yen)

500
400

Achievable SDGs
goals throughthe activity

300

Nippon Seiki Integrated Report

158

200
100
0

25

421

March 2022

March 2023

01

External Environment

Opportunities

Risks■Technologies of transparency and lower foreign objects, and■Unstable orders of in-car applications■Extensive makers and large number of deals with trading■Increase in oil prices and rising utility costs

environment
companies■Expansion of using recycled products

Overview of Nippon Seiki Group03■Unstable orders of optical products■Market slowdown for final products■Increased demand of highly functional resin due to the trend oflight weight in electric vehicles

Growth strategy

We will engage in quality improvements as well as the promo-

our group.
In the future, light-weight vehicle body due to proliferation of

products and services mainly driven by “transparency, cleanli-electric vehicles will be required. In addition to this, the needs forness, and small-lot productions” which are the Nippon Seiki

high functional resins having its functions of thermal resistance,

Group’s strengths. As for quality improvements, we will differenti-

light resistance, and impact resistance as the replacement of

ate from our competitors by the promotion of acquisition of theheavy-weight glasses and metals will be risen. Therefore, we will

certifications such as GMP and HACCP that are known as

maintain the current market share of clean resin in optical lenses

controlling systems for maintaining safety and quality for medical

and will also penetrate into the high functional resin market inproducts and foods, and consequently, customer satisfaction will

which the demand is expected to grow.

be improved. In terms of recycling activities, one is to obtain the

The worldwide demand for resin compounds has further risen.

items of contract manufacturing from customer’s recycling

In this circumstance, we will continuously evolve ourselves byactivities. The other is to expand the use of recycling products inutilizing our strengths and drive into new markets.

03
ESG Initiatives

tion of recycling activities in order to maximize the values of our05

Nippon Seiki Group's Value Creation Process

04

02

KPI
FY2023 target[1] Number of new business partners for clean items(including GMP-required items)

2 companies

3 companies[2] Promotion of individual company’ s recycling efforts(reduction of waste materials)

17 tons reduction

34 tons reduction

04
Financial Statements

FY2022 results

TOPIC
Promotion of ISO22000 acquisition

05
Company data

We are focusing on new order expansion for medical care andfood materials, and plan to obtain ISO22000 certification in
March 2024 in order to meet thehigh-quality demands of ourcustomers. We will continue tosupply safe and reliable resinmaterials by establishing a
manufacturing and management
process that is of higher quality
and is cleaner than the normal
resin compounding process.

Expansion of outsourced processingof bio and recycled materials
The number of inquiries andprototypes has been increasing
due to the increasing demandfor bio and recycled materials.
We are focusing on the technological development of biomaterials, as we anticipate that themarket will grow significantly
and social demands will also
increase in the future.

Nippon Seiki Integrated Report26

Nippon Seiki Group Business
Car sales businessGroup companies conduct new and used car dealership,
car-rental and car-sharing businessGroup companies

HONDA Yonrin Hanbai
Nagaoka Co., Ltd.
Sales business for HONDA carsin Niigata

01

Niigata MAZDA
Co., Ltd.

Sales business for MAZDA carsin Niigata

CAR STATION Niigata
Co., Ltd.

Sales and used-car business for
SUZUKI / DAIHATSU cars in Niigata

Strength of
Car sales business

Operations of TIMES CAR in Niigata(Car-rental and car-sharing business)

Ability to makecustomer-oriented
proposal
Understand customer’s
needs and provide
customer satisfaction morethan expected

Our market widely covers all areas of Niigata prefecture. We havean overwhelming number of customers, and our financial base isstrong and stable.

MAZDA mobility
Niigata Co., Ltd.

In addition, we have been tackling to strength-

en after-sales service as well as to construct a next generation of

Car sales businesssales system utilizing the Internet and digital technology next

3STRENGTHS

generation type sales system. As a professional team fostered by

Branding powerof products

the ample education system, these are aiming for obtaining customer satisfaction more than expected.
For solving several problems in our society, we always try to

Abundant
human resources
Consolidating
professionals ofservices by a fulfilling
educational system

Dealing with a lot of major
makers throughout theprefecture

create new values by foreseeing the movement of the future market
demand as well as social values, applying community-based andcustomer-oriented sales approach, and being innovative.

02

Overview of the fiscal year endingin March 2023
Sales

Although the impact of the new coronavirus has been mitigated, the global(million yen)semiconductor shortage continues, and even if we receive new car sales orders

25,000(contracts), customers continue to have to wait for delivery, resulting in chronically

20,000long delivery times. However, in order to make up for delays in the supply of new

15,000cars, each company in our group focused on strengthening used car sales, car

10,000maintenance, car insurance, and commission income, as well as improving

5,000

operational efficiency and streamlining operations, resulting in increased sales and0

profits. The production situation of automakers has finally improved over the past

22,427

23,402

March 2022

March 2023

two years, and as electrification and subscriptions continue to advance, we areworking on developing new ways to purchase cars, making forward-looking
investments, and developing human resources.

Operating Profit(million yen)

1,200
1,000

957

1,090

800

Achievable SDGs
goals throughthe activity

600
400
200
0

27

Nippon Seiki Integrated Report

March 2022

March 2023

01

External Environment

Opportunities

Risks■Arrival of a new form of perception by CASE

■Market shrinkage due to lower population of juvenile■Active new function development and new sale method
development■Great alternative business opportunity due to EV paradigm■Dealer reorganization movement by car manufacturers■Top-ranked core earning power nationwide■Influenceshortageofinternational

conflicts,

andsemiconductor■Concerns about delay in following up infrastructure and regulations■Concerns about the unpopularity of job seekers in this industry

Growth strategy

The arrival of a new form of perception by CASE as well as a

and accelerate alliance deployment, and try to enhance

new lifestyle led by decreasing population, digitalization andfunctionalities that we lack, and to gain additional regions where

Covid-19 pandemic are now asking us to find matching services.

we supply our services.

In these circumstances, we will establish our business scale andFurthermore, our group is trying to evolve the business andits domain in the vehicle sales business. Furthermore, we willbusiness format of car dealerships, which are about to undergo

endeavor to raise the degree of customer satisfaction for eachmajor changes in the CASE era. We will promote the creation ofand every customer.

a conglomerate that combines the automobile sales businessand other industries, and not only sell and maintain cars, but also

will acquire and establish new businesses by the hybrid deploy-

improve experiential customer satisfaction through synergies

ment: the investment for restructuring stores located in advanta-

with our group's businesses. We will propose and provide ageous places and consumer lock-in by IT. We will exploit M&A

well-being lifestyle centered on cars to each and every customer.

03
ESG Initiatives

In terms of the expansion of business scale and domain, we

05

02
Nippon Seiki Group's Value Creation Process

04■Increase the burden of investment to CASE

Overview of Nippon Seiki Group03

KPI
FY2022 results ※1

FY2023 target ※2[1] Residual value sales ratio

29%

35%

[2] Core revenue coverage ratio

102%

Aim for over 100%, exceeding the previous year's results[3] SG&A sales ratio

19.9%

Compared to previous year’s results -1point[4] Indirect personnel ratio

27.7%

Compared to previous year’s results -1point

Financial Statements※1 Group dealer best value

04※2 Each group dealer companies

TOPIC
Niigata Mazda “Joetsu store” renovatedas a new generation store

05
Company data

Niigata Mazda “Joetsu Store'' was renovated into a new generation store with a new Mazda concept in January 2023. We aim tofurther improve our brand power by creating a comfortable
service and hospitality space in a highly visible showroom with astrong presence by taking advantage of this new construction
renovation. In addition, we will
strive to further improve thequality of after-sales service by
expanding the number ofservice factories that conduct
vehicle inspections and otherinspections.

Joined the franchise chain “Car Seven”,
a used car purchasing store, and opened its
first store in Joetsu City in Niigata prefecture.
Car Station Niigata joined as amember of the ”Car Seven”
franchise chain (FC), a major
used car purchasing store brand,
and opened its first store, “Car
Seven Joetsu Store'' in April
2023. We aim to expand ourused car business by strengthening car purchase utilized with thecompany's “Safety Declaration''brand strength.

Nippon Seiki Integrated Report28

Nippon Seiki Group Business
Service businessIn order to meet various needs, Nippon Seiki Group have deployed the following two service businesses: Nissei Service Co., Ltd.
dealing with logistics, insurance agencies, advertising agencies, and food services; NS Computer Service Co., Ltd. dealing withinformation system development, networking, and software and hardware development.

01

Strength ofService businesses

Sales force andperformance toend-users

Our service businesses have provided wide ranging services for the

Wide-ranging service
globally and locallycustomers worldwide as well as in the domestic Niigata prefecture.
We offer optimized solutions to meet customer needs from wide

Service businessbusinessranging system configurations. To maximize customer satisfaction,
we promote the communications and operation improvements byforeseeing the market needs and social values in the future. Our
know-hows from various service businesses can create new values
and then we will try to offer both profitability and social
problem-solving.

02

Businessdevelopment
based on technology

3STRENGTHS
Stable financialbase and group
network

Optimized proposals fromthe variety of system forms
to meet customer needs

Create new values
from Nippon Seiki’s
know-how

Overview of the fiscal year endingin March 2023

Sales decreased due to a decrease in cargo volume in the logistics business
affected by production adjustments in the automobile industry as well as a difficult
environment in the food service business. In addition, sales in the IT-related

Sales(million yen)

10,000business dropped compared to the previous fiscal year, when demand for services

8,000

for local governments was very strong. However, profit increased thanks to the

6,000

increase of the highly profitable BPO business, making a significant contribution to

4,000

profits.

2,000

We will continue to strengthen our earnings base by providing new products andservices that more closely reflect customer needs in response to social situations,

0

7,689

March 2022

7,064

March 2023

and by strengthening functions across the entire value chain.
Operating Profit(million yen)

800
600

Achievable SDGs
goals throughthe activity

Nippon Seiki Integrated Report

588

400
200
0

29

520

March 2022

March 2023

01

External Environment

Opportunities

Risks■Arrival of new lifestyle due to post-corona virus■Demand of deoxidation in logistics services■Social needs for sustainable business development■Changes in industrial labor structure■Change of consumer’s lifestyle■Socioeconomic productivity and hospitality & society■Changes in energy supply structure■Concerns about the unpopularity of job seekers in this industry

02
Nippon Seiki Group's Value Creation Process

04

Overview of Nippon Seiki Group03

Growth strategy

While market needs for services are diversifying, we will respond

In order to respond to changes in business content in the new

to our customers' BPO (business process outsourcing) needs bynormal era, we will propose BPO services to private companies

maximizing our strengths and deciding the areas where weand local governments in the information system services

should move into using innovation streams and comprehensively

business domain more than ever. We will provide our customers

integrating existing technologies and functions.

with value such as effective use of human resources, concentration on core operations, and high-quality business processing by

the supply amounts of existing products and services, and try tovisualizing problems and issues through the operation of the

expand the business by developing new products, exploring new

systems we developed. We aim to solve social and regional

agencies, and reinforcing sales activities. By grasping the needs

issues and contribute to the realization of a more prosperousof now and the future in a timely manner, we will endeavor tosociety by expanding BPO services.

03
ESG Initiatives

As for food services and retailing businesses, we will maintainsolve local and social problems.

05 KPI
FY2023 target[1] BPO sales of individual demand

1,452 million yen

1,500 million yen[2] BPO sales of public demand

1,866 million yen

2,000 million yen[3] Retail products service

2 models released

2 models released

54 companies

380 companies[4] Number of distributors nationwide

04
Financial Statements

FY2022 results

TOPIC
Business partnership with Osppoc Co., Ltd.,a third-sector company in Niigata prefecture

Our group's logistics subsidiary, Nissei Service, is currently
constructing a new logistics warehouse in Nagaoka City, where
our head office is located. The warehouse is scheduled to begin
operations in June 2024. We will consolidate our logistics basesin the Nagaoka area toimprove efficiency, and aim
to expand our business bystrengthening our logistics
service proposals to acquire
not only our group products
but also cargo from outside
the group.

In February 2023, NS Computer Services, an information
services subsidiary of our group, concluded a business partnership agreement with Osppoc Co., Ltd. (headquarters: Tokamachi
City, Niigata Prefecture). Through this business partnership, we
will introduce systems for
local governments andprivate companies, expand
operation and maintenanceservices,andimprove
operational efficiency bysharing technology andknow-how.

Nippon Seiki Integrated Report05
Company data

Construction begins on a new distribution
warehouse in Nagaoka City.

30