Securities Code 5208

12th May, 2022

http://www.arisawa.co.jp

Medium-Term Business Plan
（FY2020 － FY2024）

Arisawa Mfg. Co., Ltd.

Management policy

Management policy
On the basis of the motto "Create, Innovate and Challenge",
we pledge to:
Ⅰ create new values and enhance customer satisfaction;
Ⅱ discover customer demands and create new businesses
with our creative technologies;
Ⅲ strengthen corporate structure by improving our quality
and productivity ; andⅣ contribute to solving the social and environmental issues,and realize the sustainable growth.

Arisawa Mfg. Co., Ltd.

1／22

Contents
Ⅰ. Policy of Medium-Term Business Plan 2
Ⅱ. Business Strategy
3～12
Ⅲ. Financial Strategy
13～16
Ⅳ. ESG Strategy
17～22

Business Plan

Ⅰ Policy of Medium-term business plan
Introduce ROIC as a benchmark for business management, and maximize
the company's value with both business strategy and financial strategy.

Business strategy

Financial strategy

Strengthen theprofitability

Improve the capitalefficiency

 Strengthen the earning
management with ROIC Delve into the existingbusiness Create a new businessMaximize
thecompany’svalue

 Change non-businessassets into businessassets Enhance shareholder
returns

Contribute to sustainable societies
Arisawa Mfg. Co., Ltd.

2／22

Contents
Ⅰ. Policy of Medium-Term Business Plan 2
Ⅱ. Business Strategy
3～12
Ⅲ. Financial Strategy
13～16
Ⅳ. ESG Strategy
17～22

Business Strategy

Ⅱ Business Strategy
Enhance the profitability with “Delving into the existing business”
and “Creating a new business”.

Delving into the existingbusiness Development of differentiated productswith the unique technology
 Thorough cost reduction
 Improvement of the production
capability and efficiency

Creating a new business External growth by flexible M&A Internal growth by new productdevelopment using the existingtechnologies● Development of new use and fieldin cooperation with our group companies

Strengthen theprofitability
Arisawa Mfg. Co., Ltd.

3／22

Business Strategy

Ⅱ‐1‐1 Electronic materials segment
Aim for growth in the core business field by two strategies
Delving into the existing business

Enhance the business in mobile field■ Create customer value with unique products
and grow continuously

Medium-Term business plan
As of ’21.5.6
As of ’22.5.12■Develop new products in cooperation
with our group companies, and strengthenbusiness foundation in Asian market

Creating a new business

Develop a business insemiconductor and in-car field■Develop new products andenter a new field■ Expand businesses in growing fields
by enhancing competitiveness ofproduction and technology

Arisawa Mfg. Co., Ltd.

Sales (Million yen)
Annual average growth rate 12.7%（ Plan-based ）29,932 29,768

33,90040,10029,100 29,900 34,700
'21/3

'22/3

'23/3

42,60038,200

'24/3

'25/3

（Actual）（Actual）（Plan）（Plan）（Plan）
Expect an increase in a demand for semiconductor fieldcompared with the figures as of ’21.5.6※No published figure for ’24/3 on ’21.5.6

4／22

Business Strategy

Ⅱ-1-2 Industrial structural materials,
Insulation materials segment

Aim for more growth by developing unique products
Delving into the existing business

Enhance the business intransportation infrastructure field■ In-car ： Differentiation with unique
technologies, new entry into the market■ Aircraft ： Increasing added value by
anticipating needs
Expand the profits in water treatment field■ Creating new demands by developing
high-performance products

Creating a new business

Creating a business in new energy field■ New entry and development forcreating a business in hydrogen energy
and superconducting fieldArisawa Mfg. Co., Ltd.

Medium-Term business plan
As of ’21.5.6
As of ’22.5.12
Sales (Million yen)
Annual average growth rate 12.4%（ Plan-based ）11,072

9,658

10,800 10,800
'21/3

'22/3

10,600

16,10013,000'23/3

13,70012,400

'24/3

'25/3

（Actual）（Actual）（Plan）（Plan）（Plan）
Forecast that a reduction in production for the aircraft industry
is prolonged compared with the figures as of ’21.5.6※No published figure for ’24/3 on ’21.5.6

5／22

Business Strategy

Ⅱ-1-3 Display materials segment
Aim for growth by enhancing unique technology
Delving into the existing business

Enhance the business in high-definition
display for medical use■ Expand the market share in endoscope andmicroscope, and acquire overseas customers

Medium-Term business plan
As of ’21.5.6■ Expand sales channels fortelemedicine and robotic use

Sales (Million yen)

Annual average growth rate 13.8 %■ Meet the needs for higher（ Plan-based ）definition display

Creating a new business

Develop a business in a new field■ Develop use of 3D filter in nonmedical fieldArisawa Mfg. Co., Ltd.

As of ’22.5.12

2,433

3,253

2,400

2,500

'21/3

'22/3

3,500

4,000

3,800

3,300
'23/3

4,800

'24/3

'25/3

（Actual）（Actual）（Plan）（Plan）（Plan）
Expect an expansion of use of 3D filter compared withthe figures as of ’21.5.6※No published figure for ’24/3 on ’21.5.6

6／22

Business Strategy

Ⅱ-2 Priority fields for differentiated products
Priority fields Develop differentiated products with a focus on fields
where growth is expected.
Information
deviceInnovation for IoT
society

Nextgeneration
mobility

Contribution tonext-generationtransportation
machines
Taking on achallenge of newenvironmental
changes

Life science

Existing businessArisawa Mfg. Co., Ltd.

7／22

Business Strategy

Ⅱ-2-1 Information device field
Change in a business environment（ Million units ）

2G/3G

4G

5G

1,500

Logic

50,000Source： Fuji Chimera
Research Institute, Inc.

MemoryRFSensor

40,00030,0001,000

20,000500

10,000
2020

2021

2022

High speed broadband

2023

2024

2025

Increase insensor and camera

02020

Semiconductor
performance increase～

060,000

Demand forecast for
Semiconductor device

～

2,000

Demand forecast for SmartphoneSource：
Arisawa Mfg. estimate （Billion yen）

2023

2026

Expansion ofIoT society

Promotion of development of differentiated products

Arisawa Mfg. Co., Ltd.

FPC materials forhigh frequency wave （5G）

Insulation film forsemiconductor substrate

FPC materials for
micro wiring

Protection film forsemiconductor fabrication
8／22

Business Strategy

Ⅱ-2-2 Next-generation mobility field
Change in a business environment

Conventional

HVPHVEV

FCV

1.5

0.5

0.0

2020

2021

Electric2023

2025

～

0.5～

1.0～

1.00.02030

LightweightSource：
Arisawa Mfg. estimate

Autonomous level forecast
Level02020

Level1

Level22025

Autonomous

Level3～

1.5

Source：Arisawa Mfg. estimate （Billion units）

Car powertrain forecast～（Billion units）

Level42030

Connected

Promotion of development of differentiated products

Arisawa Mfg. Co., Ltd.

Carbon fiber structuralmaterials

FPC materials forhigh speed transmission

Battery-related materials

Hydrogen energy
related materials

H29／22

Business Strategy

Ⅱ-2-3 Life science field
Noticeable environment change

Fields where we can take advantage of our technologies

Water treatment

Disastercountermeasures

MedicalPromotion of development of differentiated products

Arisawa Mfg. Co., Ltd.

Materials for high pressure
water treatment

High-definition display for
medical use

Reinforcing materials for
multiple use

Application product offilament winding
10／22

Business Strategy

Ⅱ-3 Research and development investment
R＆D expenditure

Increase the R＆D expenditure to promote thedevelopment of differentiated products.
Electronics（ Million yen ）Industrial・Insulation

Display

R&D / Sales ratio

4,000
3,000
2,000
1,000
0

1,905

1,926

2,100

2,200300
450

300
500

（ Right axis ）

（%）

2,500

30350
600

2010240513263
477

1,152

1,186

1,350

1,400

1,550

4.3

4.5

4.3

4.0

4.1

'23/3

'24/3

'25/3

'21/3

（Actual）'22/3（Actual）（Plan）（Plan）

400（Plan）

Priority products to be developed
Electronic materials■ FPC materials for high speed transmission■ FPC materials for high frequency wave
（5G）
■ FPC materials for micro wiring■ Materials for semiconductor
Arisawa Mfg. Co., Ltd.

Industrial structural materials
Electrical insulating materials■ Hydrogen energy related materials■ Carbon fiber structural materials■ Materials for high-pressure watertreatment

Display materials■ High-definition display for medical use■ In-car screen materials■ Functional film materials

11／22

Ⅱ-4 Target figures to be achieved within the periodof this Medium-term business plan

Business Strategy

Promote the aforementioned business strategy and set the following figures as the target.

ROIC over 6.0% （2025/3）（ Million yen ）’22/3 WACC 5.76% ＊1

Sales of existing products

100,000
80,00060,00040,00020,0000

Sales of new products

Annual sales growth rate 12.6%

After application of Revenue
Recognition Standard’21/3（Actual）’22/3（Actual）

Sales

44,16543,089Operating Profit

3,170

Operating Margin（%）’23/3（Plan） ’24/3（Plan） ’25/3（Plan）’23.3以降変更要

48,40054,90061,500

3,320

3,400

4,400

5,400

7.2

7.7

7.0

8.0

8.8

NOPLAT

2,314

2,424

2,500

3,200

3,900

Shareholder's equity +Interest-bearing debt

54,55756,85956,00058,20059,900

ROIC（%）＊2

4.2

4.4

4.4

5.6

6.6

Arisawa Mfg. Co., Ltd.

＊1 By our own calculation based on a third party organization’s calculated value＊2 NOPLAT（ Net Operating Profit Less Adjusted Tax ） / （ Shareholder‘s equity + Interest-bearing debt ）12／22

Contents
Ⅰ. Policy of Medium-Term Business Plan 2
Ⅱ. Business Strategy
3～12
Ⅲ. Financial Strategy
13～16
Ⅳ. ESG Strategy
17～22

Financial Strategy

Ⅲ Financial strategy
Improve the capital efficiency by making effective use of cash-flow,
promoting to change non-business assets into business assets andimplementing an aggressive shareholder return.

① Capital investment② Shareholder return③ Strategic investment

Delving into theexisting business

Aggressive return

M＆A・New business Keeping / Expanding therevenue base
 Development for new use

Arisawa Mfg. Co., Ltd.

 Total return ratio : Over 80%  Development of a newmarket by external growth

The dividend ratio is 80%, and Creation of a new businessstock buy-back will be consideredbased on the existing
appropriately by taking financetechnologies
needs into consideration.

Improve thecapital efficiency

13／22

Financial Strategy

Ⅲ-1 Capital investment
Capital investment for development acceleration and expansion of the existing business（Million yen）

8,000

Electronics

Industrial・Insulation

6,200

6,000
4,000
2,000
0

Display

1,600

2,1451,467'21/3（Actual）

298
37343

2,268
1,817

850
85
81285

3,600

Others・Basic research

5,500
150

4,400

2,300150
500

1,000
1,000

2,550

2,200

'22/3

'23/3

'24/3

'25/3

（Actual）（Plan）（Plan）（Plan）

200

16,100 Million yen
Major investment plan (3 years)
Enhancement of production capability(Thinflex, SEMICON-related equipment) 9,500 Million yen
Improvement of production process (Carbon neutrality, promotion of DX)
1,400 Million yen
New product development(Innovation Center, test facility)
5,200 Million yen
Arisawa Mfg. Co., Ltd.

14／22

Financial Strategy

Ⅲ-2 Shareholder return
Implemented an aggressive return of over 80% of Total return ratio
Dividend（ Million yen ） （Left axis）

6,000（Left axis）（Right axis）

35.5

38.0

～

150

100.3

～

60.1
60 %（%）

100

80 %

750
3,173

1,224

1,086

997

1,300

'18/3

'19/3

'20/3

'21/3

(50)
(100)
(150)

'22/3

’18/3

’19/3

’20/3

’21/3

’22/3

Share price（Yen/Share）*

986

793

802

1,000957

Dividend（Yen/Share）

3430

30

3995

Dividend yield （%）

3.4

3.8

3.7

3.9

9.9

Arisawa Mfg. Co., Ltd.＊ Closing price at the end of period

500

3,2042,0000（Right axis）

35 %

3,000
1,000

Target index of Total return ratio

488.6

5,000
4,000

Total return ratio
総還元性向実績

Stock buy-back

15／22

Financial Strategy

Ⅲ-3 Strategic investment
M＆A
Make effective use of cash reserves, narrow down a target
and make a capital investment in a flexible manner.

Innovation Center
Connect to new business opportunities as a co-creation hub for open innovation.

Estimated completion : Mar 2024
Three-story building
Energy-saving friendly design through useof earth thermal, contemporary snow room
and waste heat A/C etc.

Arisawa Mfg. Co., Ltd.

16／22

Contents
Ⅰ. Policy of Medium-Term Business Plan 2
Ⅱ. Business Strategy
3～12
Ⅲ. Financial Strategy
13～16
Ⅳ. ESG Strategy
17～22

ESG Strategy

Ⅳ-1 Materiality to be addressed for our company
Address the resolution of the following materiality and pursue sustainable growth.
Materiality

KGI（ Key Goal Indicator ）Contribution todecarbonized society

・Accomplishment of carbon neutrality by FY2030
・Promotion of energy conservation and resourcesaving・Substitution of alternative energy・Provision of materials for environmental loadreduction

Promotion ofcircular economy

・Reduction of emissions
・Enhancement of supply chain management

Enhancement ofgovernance・Organization with high ethical standards
・Organizational structure having goodcommunication channels

Global goals to be
expected to advance

Development of diverse human・Development of next-generation human resources
resources / Improvement of・Vigorous work environment for all the employees
job satisfaction
Arisawa Mfg. Co., Ltd.

17／22

ESG Strategy

Ⅳ-2 Carbon Neutral Initiatives
Expand the efforts for the improvement of the energy use efficiency andpromote the technological development for production of low-carbon materials
and the use of renewal energy.

Target： To achieve carbon neutrality by FY2030 *（ Published onJun 16, 2021 ）＊Target : CO2 direct emissions (Scope 1) and indirect emission (Scope 2)

Summary of initiatives
 Purchase of renewable energy electricity started (from Jul 2021)
 Purchase of carbon neutral gas started (from Jul 2021)
 Improvement of energy use efficiency(e.g. Waste heat recovery for production equipment, improvement of A/Cand steam equipment) Development of low carbon materials(e.g. Reducing energy in production process, reducing consumption oforganic solvents)
Arisawa Mfg. Co., Ltd.

18／22

ESG Strategy

Ⅳ-3 Contribution to society through development
Select themes which influence customers, society and environment,
and aim for contribution to the society through our business.
Goals for contribution
to society

Important themes
and our contribution
story

Addressing
climate change

Prosperous life forall the people

Resource circulationand efficiency

Renewable anddecarbonized energyLife innovationand safety

Energy saving andresource saving

Contribution to CO2 emissioncontrol by supplying
materials for FCV and EV.
Contribution to developmentof decarbonized energy.

Contribution to therealization of people's healthand prosperous life bysupplying materials forautonomous and medicalfields.

Contribution to energy saving
and resource saving by
supplying materials for EV,
solar power generation, water
treatment and weight saving
for aircraft.

Related global goals

Arisawa Mfg. Co., Ltd.

19／22

Ⅳ-4 Contribution to human rights, procurement
and local communities

ESG Strategy

Respect to human resources, creating a pleasant working environment※Consolidated Enhancement of equal opportunity
 Ensuring diversity (Female manager ratio 12.5% (Mar 2022)→ 20.0% (Mar 2025))
 Maintaining good working conditions and support for health maintenance andenhancement
 Expansion of job categories for employment of people with disabilities
 Enhancement of taking childcare leave and nursing care leave Enhancement of activating human resources by training program

Building sustainable supply chain
 Development of procurement guidelines for suppliers Disuse of hazardous chemical substances

Living together with local communities
 0.5% of net profit of the parent company is returned to local communities(Musical instrument donations to elementary and secondary schools,
Food service contribution to Cambodian pupils (including water supply system)) Social contribution activities(Nearby river cleaning, face shield donation to
medical institutions, utilization of Innovation center)
Arisawa Mfg. Co., Ltd.

20／22

ESG Strategy

Ⅳ-5-1 Corporate governanceImprove the governance system to execute the business plan
Actions to reform (already implemented)
Implemented each action, and proceeded to improve the governance Assessment of the effectiveness of the board of directors by the third party
 Increase in the outside director ratio Ensuring the diversity including gender Introduction of performance-based director's remuneration
 Establishment of the voluntary nomination and compensation committee
Future enhancement points
Further enhance the governance system,
and implement actions to stimulate the board of directors
 Expansion of discussion for subsidiary management
 Enhancement of training for directors and corporate auditors
Arisawa Mfg. Co., Ltd.

21／22

ESG Strategy

Ⅳ-5-2 History of improving corporate governanceFiscalyearItem2014

Board of directors

Board ofauditors

Corporateofficers

InsideOutside

Outsideratio

InSideOutsideInSide(Servedasdirectors)

6225%

121162015

・Issuance of the corporate governance report5229%

121152016

・Self-assessment of the effectiveness of the

5

229%

12115

2017

5229%

12125

2018

5229%

121252019

・Non-renewal of the anti-takeover measures
・Establishment of the nomination andcompensation committee（Voluntary advisorybody）

4

233%

121142020・Assessment of the effectiveness of the boardof directors by the third party
・Introduction of the voting by electromagnetic method

4343%

121142021

・Change of stock awards for directors fromStock Option to Restricted Stock4556%

12104board of directors

Arisawa Mfg. Co., Ltd.

22／22

This material is based on information available at the time of presentation, and contains
forward-looking statements which involve risks and uncertainties that could cause actual
results to differ materially from those presented in the forward-looking statements.
Therefore, there is no assurance that any forward-looking statements in this material will berealized. Final investment decisions should be made at your discretion.

Arisawa Mfg. Co., Ltd.