Midterm Corporate Strategy（2024-2026）~Innovation and Challenge,
and to the Next Stage~
NPR-RIKEN GroupContents01

Group Philosophy

02

Company Logo

03

Business Environment

04

Midterm Corporate Strategy

05

Quantitative Target・Capital Strategies

06

Business Strategies101. Group Philosophy01

MissionVisionBuild the competencies and capabilities to sustain our present and future

Create innovation through the blending of people and technology
while continuing to embrace change.
‘Circles’ of Trust : We will enhance corporate value by respecting our relationships
with our stakeholders and by providing high-quality products and solutions.

Value‘Circles’ of Growth : The company and employees will grow together by all
employees recognizing and respecting each other’s values and by continuing to take on
new challenges.

‘Circles’ of Social Harmony : We will strive to solve social issues related to living
conditions and the environment wherever we operate.
2

02. Company Logo

Philosophy behind the company logo
The company logo embodies NPR-RIKEN’s strong desire to takeon new challenges to fulfill our mission, Build thecompetencies and capabilities to sustain our present andfuture.
NPR-RIKEN logo with two triangular pyramids
The two triangular pyramids, which convey stability andinnovation, represent RIKEN and Nippon Piston Ring, as well as
the three values of NPR-RIKEN’s management philosophy.

Overlapping of the two triangular pyramids represents the newenergy that will be generated by the two companies working
together, and the new future is expressed in this shape. The
color is a bright, transparent blue that conveys sustainability.
303. Business Environment
Business environment outlook

Forecast of ICE & EV global production

Million cars/year

ICE production (HEV, PHEV, range extender, etc.)
EV production (FCV etc.)

120210080

3160

ICE production will reach its peak in2024-2027
Automobile production volume declined by
20% due to the COVID pandemic. Since
then, overall production volume has been
recovering, but ICE production has not
returned to the pre-pandemic volume
and the shift to EVs has accelerated.
2 ICE production is expected to reach its
peak in 2024-2027
3 EVs are expected to exceed 30% ofproduction by 2030

140Facing this once-in-a-century transition,
we will enter into a new stage throughthis business consolidation

200
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: LMCA G LVPTF - Data - Quarter 4 2022 (Release date January 31, 2023)
Note: YR2030 is our forecast404. Midterm Corporate Strategy- ‘Innovation’ and ‘Challenge’, and to the New Stage 1. Generate synergies throughconsolidation
Completely merge in FY 2026
Transform to a robust cost structure
Implement synergies through integration ofresources and capabilities of bothcompanies

2. Reform business portfolio
Consolidation
Synergies×Growth of NewBusiness

Establish next core and new productbusinesses in non-ICE fields, and increase
the sales ratio
Improve profitability in existing ICE fields

3. Strengthen sustainability management and develop a foundation for growth
Strengthen carbon neutral initiatives

Improve employees engagement anddevelop employees training strategy

Advance Corporate Governance

Promote diversity

Establish safe and secure workplace

Contribute to local communities
505. Quantitative Target・Capital Strategies
Business consolidation(Scheduled)Today～2023

Sales
162,000 million yen
Ordinary profit ratio 6.5%
ROE
5.1%

2024~2026‘Midterm Management Policy
Period’180,000 million yen
Ordinary profit ratio 8.0%
ROE
8.0%
Sales

~2030
‘2030Vision’

200,000million yen
Ordinary profit ratio
10.0%
ROE
10.0%
Sales

(Sum of both companies, ROE: FY2022 results）

CapitalStrategies

Strategic cash allocation to enhance our corporate value
Active investment on capital expenditure, M&As, and R&D expenditures totransform business portfolio
Improve ROE and further enhance shareholder returns (raise total payout ratio)
Improve stock price with the aim to realize PBR of 16

06. Business Strategies
Reorganize business portfolio to achieve sustainable sales and profit growth
Increase profitability

Increase sales to become corebusiness

Piston Ring Business

Fundamental BusinessWin a higher share in this businessand earn stable profits continuously

Increase profitability

Expand this business throughaggressive investment

Marine and industrial, heavy-duty
commercial, and aftermarket

Sintered products, engineered plasticproducts, piping products, casting
components and precision components

Existing businesses in growth areas,
new products businesses

Steady, long term demand for markets such as aftermarket andindustrial applications.
This business consolidation will expand the source for stableearnings.

Next Core Business

Allocate management resources to next
core/new products businesses toincrease sales and profits in the midand-long-term.

Expand human capital base to support business growth by increasing investment in
human capital as well as utilizing our diversified human resources.
Decrease sales ratio of ICE parts for passenger cars

7