MORITO CO., LTD.

8th Mid-term Management Plan Update
Where innovation is the norm

Prime Market of TSE: 9837
January 2024

© 2024 MORITO CO., LTD.

Keep making a big differencein the world with small parts

Where innovation is the norm

© 2024 MORITO CO., LTD.

01

To become a global niche top company

Where innovation is the norm

© 2024 MORITO CO., LTD.

02

What we can do with parts
we can do for a sustainable society

Where innovation is the norm

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Summary of 8th Mid-term Management Plan Update

Situational analysis<Outcome of initiatives implemented>
1. Improved profit margin as a result of businessrestructuring
2. Opportunities created and costs cut during the
pandemic
3. Improved PBR (see graph on the right)

Historical Stock Price and PBR
Stock
price

1,295 JPYPBR

799 JPY
612 JPY

641 JPY

758 JPY

Establishing a lean profit structure
Initial financial targets to be achieved earlier
than projected<Issues>
1.Specific growth strategies foreach business2.Investment for future growth
3.Management aiming at PBR of
1 or higher
 Realize ROE exceeding costof equity

Action plan
 Investing with an eye to growth under the next mid-term plan Moving Rideeco® forward

Boost capital investments, new businesses, and B2C / Build IT infrastructure and invest in
human capital / Expand manufacturing function

 Growth strategies for existing businesses
Local production for local consumption and Asia strategies / Increase global market share

8th Mid-term Management Plan update
 Revised financial targets upward Use the run-up to FY2026 to pave the way
toward accelerating growth in the future

Where innovation is the norm

Financial targets[FY2026]
Net sales: 60,000 million JPY
Operating profit: 3,000 million JPY, ROE: 6.5%

[Our vision for FY2030]
Net sales: 80,000 million JPY
Operating profit: 5,000 million JPY, ROE: 8.0%

© 2024 MORITO CO., LTD.

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Basic Policy of the Updated Mid-Term Management Plan

Build a global
earnings base andmanagement system

Revampmanagement
structure andsow seeds forincreasing profit

7th Mid-termManagement Plan

Period for building
a businessstructure designed
to weather the
COVID-19 pandemic

Establish a lean profit structure+
Aggressively invest for the future

8th Mid-term Management Plan

Increase both the
top line and profit
marginOur vision for FY2030
Net sales:
80,000 million JPY
Operating profit:
5,000 million JPY
ROE: 8.0%

Bring net
sales up to
100,000
million JPY

8th Mid-term Management Plan (5 years)

Net sales
Operating profit(Million JPY)

Targets

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Current Status and Vision for 2030 by BusinessNet sales

Increase bothprofit margin andbusiness size

2030
Efforts focused on
North American
operations

ApparelFocus on improving
profitability while
increasing business
size

Expand efforts toincrease profit marginand efficiency

2030

Create new corebusinesses

2030
Product

2030

New

Transportation

ProductⓂ*

Operating profit ratio* Product Ⓜ is a business added to the Morito Group’s operations as a result of an acquisition, etc. See the next page for specific company names.

Where innovation is the norm

© 2024 MORITO CO., LTD.

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(FYI) Group Companies by Segment

Product BusinessTransportation Business

MORITO APPAREL CO., LTD.

MORITO JAPAN CO., LTD.

MORITO AUTO-PARTS CO., LTD.

MATEX INC.

ACE INDUSTRIAL MACHINERY CO., LTD.

Japan

Apparel Business

MANEUVERLINE CO., LTD.

*Product Ⓜ

CANVAS CO., LTD.
MORITO SCOVILL HONG KONG CO., LTD.
MORITO SHANGHAI CO., LTD.

Asia

MORITO TRADING (THAILAND) CO., LTD.
MORITO (SHENZHEN) CO., LTD.
MORITO DANANG CO., LTD.

Europe & theU.S.

MORITO (EUROPE) B.V.
MORITO SCOVILL MEXICO S.A. de C.V.
MORITO SCOVILL AMERICAS, LLC

Where innovation is the norm

MORITO NORTH AMERICA, INC.

© 2024 MORITO CO., LTD.

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The 8th Mid-Term Management Plan
(Running through FY2026)

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Efforts over the Past 5 years (FY2019 – FY2023)
Initiatives centered on structural reforms, such as a company split, revived sales and profit margins
that had been affected by COVID-19, and we expect to achieve the initial targets of 50,000 million yen
in net sales and 2,500 million yen in operating profit earlier than projected.

Made capital investment toimprove production
efficiency

Started developing a local
procurement network ineach country with country
risks in mind

In-house logistics
centers went into fullscale operation

Split into a pureholding company andan operating company

Gained new business
opportunities during
the pandemic

Announced the 8th Mid-termManagement Plan
Period for building a business structure
designed to weather the COVID-19 pandemic(2-year extension for achieving financial targets)

Morito Scovill Americas, Ace
Industrial Machinery,
Morito Scovill Mexico, and Morito
DanangAdopted the DOE targetof 4.0% for shareholder
returns

Split the largest
operating company andwithdrew from
unprofitable businesses

Introduced a personnel
evaluation system with
CCC in mind

Launched the Rideeco®
environmental initiative

Raised awareness about
profitability andinventory managementof operating companies

Net sales

Operating profit(Million JPY)

Where innovation is the norm

© 2024 MORITO CO., LTD.

09

Financial Target Update
Focus on increasing our top line, in addition to keeping the recently improved profit margin up.
Aim to further expand the scale of operations.

Net sales

Operating profit

3,000
million JPY

60,000
million JPY+10,000 million JPY(+20.0%)48,500
million JPY+500 million JPY(+20.0%)50,000
million JPY

2,400
million JPY

2,500
million JPY

Operatingprofit ratio:
5.0%2023 results

Where innovation is the norm

2026 initial target

2026 revised target

2023 results

2026 initial target

Operatingprofit ratio:
5.0%

2026 revised target© 2024 MORITO CO., LTD.

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Overview of the Growth Strategy for Achieving the 8th MidTerm Management Plan

Growth potential

Develop new fastenermaterials

Make capital investments for
kitchen appliance-related business

Increase production
in ASEAN
Locally produce apparelaccessories for local consumption

Work on Rideeco® and otherenvironmental initiatives

Focus on B2C business･52 BY HIKARUMATSUMURA・YOSOOU®

Apparel Business
Product BusinessTransportation BusinessCommon to all businesses

Increase market share for inhouse brand shoe careproducts (is-fit®, etc.)

New apparel businesses
Locally procure automotive
interior components

Streamline sales routes

Profitability

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Growth Strategy 1 [Rideeco® Environmental Initiative]

Rideeco® is the Morito Group’s initiative to develop environmentally friendly products
launched in fiscal 2021. We work to create new value so we can pass on our beautiful
planet and its resources to future generations as we join hands with people andcompanies across all industries who share this same dream.

Recycling unwanted materials to create new value and contribute to sustainability
Recycling discarded fishing nets

Recycling fabric scraps

Ride for Eco:
It sums up our commitment tosustainability.

Relation
Build relationships and collaborate
with various businesses andindustries to create new value,

Initiative

Removing debris from discarded fishing nets

Upcycling items used by sports
teams

take action to build a sustainable
society instead of being a
bystander,

Devotedevote our wisdom not only to the
pursuit of short-term profits but
also to the future of society,
Energyand act with perseverance andenergy.

▶ Rideeco® website

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Growth Strategy 1 [Environmental Initiatives]

5,000(Million JPY)

Expand businesssize and makeRideeco® astandard Morito
product line

1,000

20

2021

Project launch

51
2023

Planning anddevelopment2026 target

2030 target

Commercialization and wider adoption

 Develop and sell products using discarded fishing nets
 Develop and sell ASUKAMI® made with fabric scraps fromapparel factories
 Develop upcycled products in collaboration with sports teams

Where innovation is the norm Develop new materials that meet
Rideeco® standards
 Boost overseas sales© 2024 MORITO CO., LTD.

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Growth Strategy 2[Local Production of Apparel Accessories for Local Consumption]
We will eliminate quality differences between regions and supply Morito quality products
from all over the world. In response to customer needs, we will select production sites
and minimize transportation distances to achieve sustainable and efficient production
and supply.
Current main sales channels for snap fasteners

Production control at each site = Quality differences

Production

China (Shenzhen)

Procurement

China (Shanghai)/Hong Kong

Sales

Customers in Europe &the US/factories in Asia

Japan

USA (Georgia)

Morito’s operatingcompanies in Japan
Customers in North America

Customers in Japanand overseas

Future main sales channels for snap fasteners

Ensure Japan quality across the globe

Maintain current
scale/enhance production
efficiency

Production China (Shenzhen)

Vietnam(Danang)

Procurement

China (Shanghai)/Hong Kong

ASEAN
locations

Sales

Customers in
Europe & the US
Factories in Asia

Customers in
Europe & the US
ASEAN factories

Where innovation is the norm

Upgrade sewing
equipment
Install snap fastenerproduction line

Respond to
ASEAN
procurement
needs andgeopolitical risks
of Western brands

USA(Georgia)

MexicoCustomers in North
America/factories in
Latin America

Enhance production
efficiency across the
board

Japan
(Key location)

Expand sales
channels in Latin
America and tomeet the needsof NorthAmerican brands

Morito’s operatingcompanies in Japan

Establish new
R&D bases forfasteners

Customers in Japanand overseas© 2024 MORITO CO., LTD.

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Growth Strategy 3[Product Business’ Kitchen Appliance-related Services]

Overview of kitchen appliance-related services

 Capital investment to improve
operational efficiency

Ace Industrial Machinery Co., Ltd. provides a rental service for various filters used incommercial kitchen exhaust ducts, including filter exchange, delivery, and cleaning
services. The company also offers kitchen exhaust hood cleaning services, helping
restaurant operators to realize a comfortable working environment and mitigate the riskof fire.

 Automating company plants andinstalling state-of-the-art cleaningsystems at each location

Areas where grease filters are installed
Exhaust ductFire damper
Filter housing (V-bank)
Oil hose Expansion of service coverage

Oil cupHood

Filter Kanto, Kansai, Hokkaido, Chugoku,
Shikoku, etc.
Grease filter

 Expanding comprehensive
maintenance services designed
to realize a safe and comfortableenvironment

A grease filter is installed at the inlet of the exhaust duct in restaurant kitchens.
It reduces grease build-up in the ducts and the risk of fire.

 Restaurants, supermarkets, food factories,
hotels, etc.
In-house plant equipment

Where innovation is the norm

Automatic filter cleaning and drying with an automaticallycontrolled crane© 2024 MORITO CO., LTD.

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Investment Strategy

Existing investments and equipment retention

Operating CF
7,000 million JPY
±20%

1,200
million JPY

Growthinvestment
New product development expenses

500 million JPY

Initiatives to reduce environmental impact

500 million JPY

Capital investments (Ace Industrial Machinery, Morito Scovill Americas,

600 million JPY

Morito Danang, Morito Scovill Mexico)

Strengthening B2C

300 million JPY

Building data infrastructure and enhancing BI functions 500 million JPY

Cash on handExternal
procurement

Investment in human capital

100 million JPY

M&A

5,000
million JPY

Shareholder returns

6,000
million JPY*Total investments over 3 years up until FY2026

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Investment Strategy

M&A policy[M&A]

1. Niche top company

2. Group synergies

Low risk

Acquired in 2014: GSG FASTENERS, LLC(now Morito Scovill Americas, LLC)

3. Stable earnings base

Increasing global share
Affiliate for apparel, footwear, and bag materials

Acquired in 2014:
Matex Inc.

Expanding manufacturing functions
Manufacturer of resins, metals and fibers for automobile interior
components and apparel materials

PriorityStrengthening B2C business
High-end brand offering high added value such as functionality,
design, durability, etc.

High risk
Where innovation is the norm

Entering a new market

Acquired in 2018:
Maneuverline Co., Ltd.

Residential space, healthcare,and service companies© 2024 MORITO CO., LTD.

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Corporate Strategy

Up to
FY2023[IT Strategy]

Implement initiatives focused on developing foundational information systems and invest in optimal IT functions

Management information
systems Build systems to efficiently shareand manage the group’s
management information
 Establish a data analysis
platform for data collaboration
among group companies

Up to
FY2026

Business processing
systems
 Introduce online B2B orderingsystem Introduce and use PSI planning Use RPA

Ensure high-precision analysis
and efficient management ofgroup companies

Realize efficient one-stop
operations, including everythingfrom ordering to distribution, andestablish a streamlined inventory
management system

Combine management
information, businessprocessing, andfoundational systems
to create added value
for the entire group

Foundational information
systems
Build common infrastructure forthe entire group with a safe,
secure and stable environment

Up to
FY2030

Where innovation is the norm

Strengthen BCP and ability torespond to changes that may arise
due to business expansion, etc.

Accelerate growth of business size and profitability through speedy management© 2024 MORITO CO., LTD.

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Corporate Strategy [Human Capital]
We will implement various measures to improve the value of human assets across thegroup by hiring and developing talent, assigning the right people to the right jobs, andutilizing them among group companies.

Morito Group Human Resource Management Policy

Human resource development
 Implement compliance seminars, training for newly appointed
managers, correspondence courses to improve employees’skills, and leadership development programs for selectedcandidates

We have developed the Morito Group Human Resource
Management Policy in order to ensure that all group companies,
including overseas companies, are on the same page.

Safety and security
 Provide mental health stress checks and psychological safety
workshops
 Conduct disaster drills and implement employee safety
confirmation system in the event of a disaster

Human
resource
development

Recruitment

Compensation
and benefits

Evaluation

Morito Group
Human Resource
Management PolicyLabormanagement

Placement
and careers

Diverse ways of working
 Carry out diversity project activities
 Women’s empowerment: Set a numericaltarget for female manager ratio Encourage male employees to takechildcare and related leave▶ More information

Where innovation is the norm

<Percentage of women in
managerial positions>

18.2
%

2023

21.5
%

2026
targetIncrease employee satisfaction and engagement
 Conduct employee satisfaction surveys to create anorganizational culture that enables employees to reach
their full potential and work toward their goals
 Analyze survey results, make improvements, andimplement various measures to increase engagement© 2024 MORITO CO., LTD.

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Corporate Strategy[Capital Policy and Financial Strategy: Overview] Expand business through aggressive growth investment (see p. 16 for details of investment
strategy)
 Optimize capital structure by utilizing interest-bearing debt
 Continue shareholder return and control net assets
Target B/S structure
Current B/S

Cash anddeposits

Use cash generated by
improved CCC, effective use
and sale of assets, etc. forinvestment

Liability

Liability

Cash anddeposits
Reduction

Interest-bearing
debt

Interest-bearing
debt

AssetsNet assets

Higherstock
priceMarketcapitalization

Net assets

Marketcapitalization

AssetsUtilization

Use it for future
investments in businessexpansion, including M&A

Continue shareholder return and control net assets
Basic dividend policy: Target a dividend payout ratio of 50%
and DOE ratio of 4.0%, and buy back shares whenevernecessary and cancel them appropriately

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Corporate Strategy[Capital Policy and Financial Strategy: Situational Analysis]

Historical EPS

Historical Stock Price and PBR

ROE and Cost of Equity

1,295 JPY
83.1 JPY

Estimated to be in the mid-6% range at present

35.6
62.2 JPY
799 JPY

51.4 JPY

51.2 JPY

5.9%

758 JPY
612 JPY 641 JPY

15.6

17.2 JPY 12.5

12.2

4.8%

0.90

15.6
0.67

0.52

0.52

4.3%

4.3%

0.55
1.5%

2019

2020
EPS

2021

2022

2023

2019

PER

Situational analysis
Improved profit structure as a result ofstructural reforms and revised shareholder
return policy• EPS has increased• PBR has increased to almost 1• ROE has increased to almost 6.0%

Where innovation is the norm

2020

2021
PBR

2022

2023

Stock price

2019

2020
ROE

2021

2022

2023

Estimated cost of equity

Challenge
We must improve return on equity (ROE)
since it is lower than the cost of equity.

© 2024 MORITO CO., LTD.

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Corporate Strategy[Capital Policy and Financial Strategy: Measures to Realize Management Conscious of Cost of Capitaland Stock Price]

Maximizing corporate value
Increase PBR (market capitalization)

Growth in sales and operating profit ratio
FY2026: Net sales of 60,000 million JPY
Operating profit ratio of 5.0%

Net Sales andOperating Profit Ratio

FY2026: ROE of 6.5% or more

ROIC and WACC

Changes in ROE Components
3.2%

3.5%

1.26

1.26

1.26

2020

2021

3.1%

4.6%

Estimated to be in the 5% range at present

3.7%

40,72745,987

43,636

48,47848,529
1.2%
1.40

2.1%

2019

Improving capital efficiency
Target dividend payout ratio of 50% or more/DOE
ratio of 4.0%, Utilize interest-bearing debt

5.1%

4.4%

3.8%

Improving ROE

2020

2021

Net sales

2022

2023

Operating profit ratio Investing for growth of existing businesses
 Improving operating profit ratio Investing in new businesses (including
M&As) Expanding manufacturing functions
 Investing in human capital

Where innovation is the norm

2019

1.26

3.3%

3.1%

3.8%

4.3%

2022

2023

1.7%

Net income ratio

2022

2023

Net sales/
shareholders’ equity

 Improving net income ratio Promoting sustainable management
 Buying back shares whenever necessary Improving CCC
 Leaner B/S

2019

2020
ROIC

2021

WACC

 Maintaining financial health Adequate financial leverage
 Reducing WACC
 Stable and sustainable shareholder returns
 Appropriate allocation of management
resources© 2024 MORITO CO., LTD.

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Shareholder Returns
We regard returning profits to shareholders as one of the most important management issues, anddetermine the amount of dividends based on the following policy, taking into consideration
investment projects and financial conditions (net assets, etc.).

Dividend payout
ratio of 50% or more

Realize stable andcontinuous
dividend payments

Standard of adividend on equity(DOE) ratio of 4.0%

in relation to profit
attributable to owners ofparent is the standard(on a consolidated
basis)* In a fiscal year with a significant fluctuation in after-tax profit
attributable to owners of parent due to special factors suchas extraordinary income or losses, the dividend amount will
be determined in consideration of the corresponding impact.

Continue to consider buying back shares whenever necessary
and canceling them appropriately

Dividend History

2020

2021

2022

2023

2024 (forecast)

Annual dividend per share (JPY)

18.0

26.0

32.0

55.0

58.0

Dividend payout ratio (%)

104.8

50.6

51.4

66.2

67.1

DOE (%)

1.5

2.2

2.4

3.9

4.0

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Financial Targets
FY2023 results

FY2026 targets

Our vision for FY2030

Net sales

48,500 million JPY

60,000 million JPY

80,000 million JPY

Operating profit

2,400 million JPY

3,000 million JPY

5,000 million JPY

Total assets

51,400 million JPY

Increase via growth investment

Net assets

38,400 million JPY

Maintain current level via
shareholder returns

Interest-bearing debt

1,400 million JPY

Increase due to use for
growth investment

Equity ratio

74.7%

Decrease due to use ofinterest-bearing debt

ROE

5.9%

Payout ratio

66.2%

DOE

3.9%

Performance

Assets/ROE

Shareholder returns

Growth investment

Where innovation is the norm

Share repurchase

470 million JPY

Investment amount

540 million JPY

6.5%

8.0%

Decrease due to profit growth
4.0%

4.0%

Consider buying back shares
whenever necessary
8,700 million JPY* Total for the FY2024 –FY2026 period

Increase growthinvestment© 2024 MORITO CO., LTD.

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Disclaimer
This handout has been prepared only for information purposes and is not intended tosolicit investment.
Although this handout is made with extreme care, its completeness cannot be
guaranteed.
We assume no responsibility whatsoever for any damages resulting from the contents.
The financial results forecasts and forward-looking statements in this presentation are
made with information known as of the day of presentation and contain some potential
risks and uncertainties.
Therefore, please be aware that the content of the forecasts may differ significantly from
actual results, due to various factors such as changes in the business environment.

Contact
MORITO CO., LTD.

Executive Corporate
Planning Dept.

4-2-4, Minami Honmachi, Chuo-ku,
Osaka 541-0054 Japan
E-mail: ir@morito.co.jp

Where innovation is the norm

© 2024 MORITO CO., LTD.

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Where innovation is the norm

Where innovation is the norm

© 2024 MORITO CO., LTD.

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