Medium-termManagement Plan
GGP24
(GLOBAL GROWTH PLAN 2024)– From Change to Growth

February 10, 2022

I. Sustainability Vision

AGENDA

II. Medium-term Management Plan GGP24– From Change to Growth/ Review of the Previous Medium-termManagement Plan
/ Business Strategy/ Financial and Capital Strategy/ Environmental, Social, and Governance
Response22

I. Sustainability Vision3

Corporate Philosophy

Improving the World through Technology

Technology Taking
Flight to Create
ChangeOur management philosophy at Suncall is “Technology taking flight to create change,” andthe Company is forging ahead dramatically on this basis.

Technology Taking
FlightCreate Change

Suncall would not exist if it were not for theCompany’s unique technologies

We are taking the lead in transforming theworld
4Suncall’s Mission–Purpose

Improving the World through Technology

Second growth phase(Entry into electronic informationand communications segment)
First growth phase(Establishment of automotiverelated business)

Managing global big datawith extremely small
technology

No compromise– Creating products for thevehicles to which we entrust
our lives

1943
Foundation
Founded in Kyoto, which was not
subjected to bombing, in order to develop
and manufacture valve springs for aircraft
engines
Spring manufacture
During the war, produced from materials
transferred from the military’s Kokura
factory, which had been brought in bysubmarines from German

Motor/electric components(electric vehicle products)

Current
positionStartup phase

FutureRollers

HDD suspensions

New environment andenergy materials“Bamboo charcoal”

Transmission
components
Enginecomponents
Safetycomponents

Optical connectors

Demand willcontinue to grow

Medical care

Coiling machine at the time
(Photo of Kyoto headquarters)5

Suncall’s Mission–Purpose

ProblemSocial issues faced by
the Company
 Grand transformation of the automotive
industry to achieve carbon neutrality (inparticular, the rapid expansion of automobile
electrification)
 Explosive growth in demand for cloudstorage capacity caused by thedevelopments of 5G, IoT, and the digitalsociety Growing desire for lifelong health in the aging
society, and buildout of medical care systems

Challenges faced bycustomers
 Automotive-related products segment
Shortening of the development and design
periodIncreasing need for highly precise
detection of large currents
 Electronic information and communications
segment
As hard disk drive capacity continues toincrease, suspensions with higher
precision are required.

The Company’s
Strengths
 Integrated production from materials to
products
We carry out integrated production frommaterials to products, based on our plastic
processing for metals (including bending,rolling, die casting, and drawing) and
precision processing technologies.
 This makes the following possible for eachof our products:• Flexible design support• Support for producing large varieties of
products in small lots
• Low material loss ⇒ Realization of low
costs We also have micro fabrication technology
using in-house design of dies and jigs forhard disk drive suspensions, which require
the ultimate level of precision as industrial
products.
 We create products in the fields of medicalcare, and environment and energy, which
can contribute directly to achieving carbon
neutrality and responding to the aging
population.
• Joint development of a walking assist robot(Orthobot) with the Kyoto University’s COI
program• Manufacture of bamboo charcoal with minimal
CO2 emissions by using superheated steam

6

New Medium-termManagement Plan
Automotive-related products segment
Sizable growth in demand for various types ofvehicles including electric vehicles, hybrids, andplug-in hybrids is creating increased needs forhighly precise current detection. We will meetthese needs by developing bus bars, shunt
sensors, and shunt on bus bars and launchingthem in the electronic vehicles market.
We will play a role in achieving carbon
neutrality in the automotive industry, andstrive to expand sales.
Electronic information and communications
segment
We continue to carry out capital investment in
the hard disk drive suspension business toaccurately meet customer demand, and will
strive to further increase customer satisfaction
through stable supplies and cost reductions.
In the communications-related business, thedata centers, telecommunications, and wirelessmarkets will continue to grow due to strong 5Grelated and IoT-related demand, and we will
work to increase sales by strengthening our
product development capabilities andexpanding our sales network for all thesemarkets.

Suncall’s Core Technologies–Precision Plastic Processing Technology

Plastic Processing

Plastic processing is a method for forming metals and othermaterials into the desired shape by applying force to them. It
is more energy and resource-efficient than other processing
methods.

Precision shaped wire using
our shaped wire drawing
and rolling methods

Automotiverelated
Business

Bus bars for electricvehicles using ourforming processing
technology

Environment
EnergyElectronic
Information andCommunications
Segment

MedicalCare
Equipment

HDD suspensions that combine
leaf springs created using ultraprecision dies with assembly
technology

In-house dies forwire drawing

Creating new businesses fusing different technologies
7

Walking assist robot“Orthobot”

Suncall Precision Components Are Used in Variety of Applications
Automotive-related Products Segment
Materials-related business/copper wire for valve springs:
precision shaped wire
Suncall’s cores that support
integrated production
We use a wide range of unique
technologies in this corebusiness. We are pioneering
new domains through safety,
security, and high-quality.

(1) Valve springs

Motor and electric components

Enginecomponents

Top-class market share in Japan
Integrated production from materials toprocessing enables high-quality andhigh-durability that can withstand
100 million compressions.

(3)(2) Ring gears / drive plates(1)(4) (2)
Transmission
components
Safetycomponents(4) Bus bars
Each designed to suit unit shapes
The main focus of the future of
wiring(4) Shunt on bus bars

Top-class market share in Japan
Our proprietary metal
processing technology achieves
high precision.

A bus bar integrated sensor with builtin feature to measure voltage whiletransmitting current
Also supports high current such as inlithium-ion batteries(3) Spiral springs forseatbelts(4) Fuse sensors
A next-generation sensor that
destructively interrupts energizedparts when an overcurrent is
detected(4) Motor cores/stator cores

We achieve comfort byenabling calibration of
precision torques by
manufacturing from materials.

Components that form the core of themotor
We achieve high productivity throughautomated integrated production.

8

Suncall Precision Components Are Used in Variety of Applications
Electronic Information and Communications Segment

Key devices
in product groups whose demand is expected to be increased
by future expansion of 5G/IOT and increasing remote work

HDD suspensions

Data centers

HDD

Supporting extreme levels of precision
requirements for HDD magnetic heads withpositioning at the level of 10s of nanometers

Printer-related products

Rollers

Printers

Communicationsrelated products
Opticalconnectors

Torque limiters
Spring clutches

Worldwide top market
share by supplying long,lightweight, and highprecision shafts
9

OpticaladaptorsDevelopment of Next-generation Businesses

Internal rotating shaft: low-pressure side
External rotating shaft: high-pressure side

High-pressure
turbineLow-voltage shaft electric motor
connected directly to engine

Response to
Automobile
Electrification

Used by Locomo Up Nishioka

Low-pressure

turbine㈱IHI様技術報告書より

Source: IHI Corporation’s technical reports

Development
FieldsMedicalCare Equipment

Environment
Energy10II. Medium-term Management Plan GGP24– From Change to GrowthKey Strategies and Quantitative Targets of GGP24
Acceleration of an effective strategy to create a business portfolio for 2030

Business Strategy
Growth business related to electricvehicles and electrification- Grow sales globally and develop intonext-generation main business• Offer mass production of bus bars and shunt on bus bars tomeet needs for electric vehicles• Expand sales of products for electric vehicles andelectrification in Europe, China, and the U.S.

Growth business related to electronic
information and communications

Existing automotive-related
products segment- Achieve dramatic growth and pursue profit growth- Respond to changes in industry structure andimprove earnings strength• Continuously make capital investment and enhance
production efficiency to meet customer demand• Enhance suspension production capacity to meet demand forlarge-capacity hard disk drives• Develop communications- and printer-related products, andimprove production efficiency through process improvements• Validate market growth rate and profitability on an individual
product basis• Focus on improving earnings strength of existing projects bythoroughly managing earnings on an individual product basis• Consider optimizations of production and sales locations

Capital Strategy

Balance sheet managementwith an understanding of appropriate capital structure••

Maintain payout ratio at 75% until ROE exceeds 9% in order to prevent a buildup of equity capital
Investment decisions with a thorough awareness of cost of capital

Net sales

Quantitative
targets of GGP24

Operating income margin

63.0 billion yen 7.1%
12

ROE

9.0%

Review of GGP21 (Financial Results)
Net sales

Operating incme

Net income

Unit: Millions of yen

Operating income margin

47,60050,00 045,812

GGP21
We did not meet our target of over 50.0 billion
yen in net sales, having failed to reach our initialsales targets for some products due to the
spread of COVID-19 and the major impact of the
reduced automobile production caused by thesemiconductor shortage. With the impacts
having run their course, we expect to reachrecord net sales for this fiscal year.
We did not reach our target operating income
margin of 6.5% due to a decline in profitability,
caused in part by upfront investments in HDD
suspensions and automotive LED components,and soaring costs for raw materials,
transportation, and energy. We expect to returnto profitability for this fiscal year.

500 0

GGP21

42,354

40,140

7.4%

40,00 0400 030,00 0

300 0

3.2%
20,00 0

200 0

1.4%
10,00 0

100 0

0

0

FY2018FY2019FY2020

FY2021(Forecast)-3.2%-10,000

13-1000

Review of GGP21 (Key Strategies, etc.)
Key Strategies
Strategy

Review

Evaluation

Continued investments inhigh-demand fields of corebusinesses

Continued to invest in valve springs and spiral springs for seatbelts
Failed to meet the sales plan target△

Investment of management
resources in high-growthfields

Accelerated investment in growth of hard disk drive suspensions• Launched nearline mass production and invested in increased production capacity• Developed next models○

Cultivation and expansion of
next-generation main business(1) New products to support electric vehicles and electrification: developed current
sensors, and expanded applications to trucks, driverless transportation vehicles,
solar power, and others. Also began mass production of shunt on bus bars forNorth America.
(2) Medical care: Launched sales of Orthobot (walking assist robot), but failed tomeet plan△

Other Quantitative Targets
TargetPayout ratio of 30 to 40%(Minimum target: 20 yen)

Investment in growth(16.0 billion yen)

Review

Evaluation

Although financial performance slumped due to the spread of COVID-19,
maintained the minimum payout target of 20 yen.

○

(1) Increased production capacity for hard disk drive suspensions amid restrictionsat production bases due to the spread of COVID-19(2) Built production lines for next-generation main businesses, such as bus bars,
shunt on bus bars, and automotive LED components○

14

Results from GGP21 and Continuing Challenges

Business field

ResultExisting automotiverelated products
segment

 Increased production capacity of wire for valve
spring and cultivated new customers
 Expanded fields with high demand such as motor
cores and stator cores Improve profit structure with long-term view
(Optimize production and sales locations,improve logistics)

 Developed current sensors, and expanded
applications to trucks, driverless transportation
vehicles, solar power, and others Began mass production of shunt on bus bars forNorth America
 Began mass production of automotive LED
components
 Began sales of walking assist robot (Orthobot)

 Enhance development and production systems

 Enhanced production capacity to meet nearline
customer demand Further increase customer satisfaction throughstable supplies and cost reductions

 Triggered change aimed at reforming ourbusiness portfolio⇒ Achieve growth in next Medium-termManagement Plan GGP24

 Strengthen examination of business andinvestment plans with awareness of capitalcost Manage balance sheet with an understandingof appropriate capital composition

Growth business related
to electric vehicles andelectrification(Next-generation
business)

Growth business related
to electronic
information andcommunications(HDD suspensions)OverallContinuing challenge

15

GGP24 Medium-term Management Plan
(April 2022–March 2025)

Basic Policy of GGP24 (April 2022–March 2025)

Policy of GGP24 – From Change to Growth
Acceleration of an effective strategy to create a business portfolio for 2030
Shareholder value
 FY ending March 2025: Net sales of 63.0 billion yen, operating incomeof 4.5 billion yen (operating income margin: 7.1%), and net
income of 3.5 billion yen Set ROE target for the final fiscal year at 9.0%, and ensure that it
consistently exceeds the cost of capitalBusiness strategy and portfolio strategy
 Growth business related to electric vehicles and electrification: Grow sales globally anddevelop into next-generation main business Growth business related to electronic information and communications: Achieve
dramatic growth and pursue profit growth Existing automotive-related products segment: Respond to changes in industry
structure and improve earnings strength

Financial and capital strategy
 Investment decisions with a thorough awareness of cost of capital Balance sheet management with an understanding of appropriate capital structure Maintain payout ratio at 75% until ROE exceeds 9% in order to prevent a buildup ofequity capital

Environmental, social, and governance system
 We have established the SDGs Promotion Committee and will search for business
opportunities that address sustainability issues.
 We are strengthening management oversight by increasing the number of
independent outside directors.

17

Position of GGP24
FY2024FY2030Global Growth Plan 2024
Accelerate an effective strategy to create a businessportfolio for 2030

From Change to Growth• Net sales: 63.0 billion yen• Operating income margin: 7.1%
• Promote management with awareness of return on capitaland balance sheet management in order to consistently
exceed ROE of 9.0%
• Launch reforms of business portfolio• Boldly invest management resources in growth fields• Ensure recoupment of invested capital

FY2021

Pursue optimization of ourbusiness portfolio• Application of related technologies
and new businesses• Create added value

Previous Medium-termManagement Plan

70000

63,000

60000

50000

47,600

4,500

40000

20000

10000

3,500

ROE
2.0%

30000

650

ROE
9.0%

710

0

FY2030
FY2021(Forecast)
Net sales (Millions of yen)

FY2024
Operating income (Millions of yen)

Net income (Millions of yen)

18

GGP24 (April 2022–March 2025) Numerical Targets

FY2021(Forecast)Index
Net sales

Growth rate

Return on capital

Returns toshareholders

FY2024(Target)47,600 million yen

63,000 million yen

Operating income(margin)

650 million yen(1.4%)

4,500 million yen(7.1%)Net income

710 million yen

3,500 million yen

ROE (%)

2.0% (expected)

9.0%

Dividend payout of 30% of
net income up to 2.5 billion
yen, and 40% of net income
above 2.5 million yen

Maintain payout ratio at
75% until ROE exceeds 9%

Dividend payout ratio

19

Future Outlook for Business Segments toward 2030
Growth business related to electric vehicles
Existing automotive-related
and electrification, and growth business related products segment
to electronic information and communications
Products related to electricvehicles and electrification(bus bars, current sensors, etc.)
Optical and printer-related products

Hard disk drive suspensions

Existing products(valve springs, wire for valve spring, ring gears, etc.)

Others47.6 billion yen

37%

63%

FY2021 Forecast

52%

48%

FY2024 Target
2064%

FY2030 Target

36%* Percentages represent
proportions of net sales

Business Strategy

Business Strategy

B usiness Strategy Policy

K ey Strategies

Acceleration of an effective strategy to create abusiness portfolio for 2030 that will enable sustainablegrowth1.

Accurately identify business opportunities and growthfields of each business, make highly effective
investments with an awareness of capital cost, andensure that we achieve profitability on the upfront
investments we have made to date

2.

3.

22

Growth business related to electric vehicles andelectrification
Grow sales globally and develop into nextgeneration main business
Growth business related to electronic informationand communications
Achieve dramatic growth and pursue profit growth
Existing automotive-related products segment
Respond to changes in industry structure andimprove earnings strengthGrowth Business Related to Electric Vehicles and Electrification, and GrowthBusiness Related to Electronic Information and Communications: Key Strategies
Growth business related to electric vehicles and electrification

1- Grow sales globally and develop into next-generation main business• Sizable growth in demand for various types of vehicles including electric vehicles, hybrids, and plug-in
hybrids is creating increased needs for highly precise current detection. We will meet these needs bydeveloping bus bars, shunt sensors, and shunt on bus bars and launching them in the electronic
vehicles market.
• Medium- to long-size bus bars using the Company’s plastic processing for metals and precision
processing technologies have been newly adopted for use in electric vehicles and hybrids by two
Japanese automakers. We will promote their adoption for other vehicle models.
• We have begun to mass produce and supply shunt on bus bars for electric vehicles in North America.
We will expand sales of shunt on bus bars in Europe, China, and the U.S. together with shunt sensors
for high-precision current detection, which we have started to deliver in Japan.
• Moving forward, we will accelerate global mass production by further enhancing our development
system and collaborating with Marubeni-Itochu Steel Inc., in order to develop the electrification-related
business into a next-generation main business.

2

Products for electric vehicles
EV等電動化製品
andelectrification
Printer-related
products
プリンター関連

HDD suspensions
HDD用サスペンション
Communications-related
Unit: Millions of yen
通信関連
products

Othersその他

33,00029,20024,500Growth business related to electronic information and communications- Achieve dramatic growth and pursue profit growth
Hard disk drive suspension business

3,000

17,600[9.1%]• The remarkable growth of cloud computing in recent years is expected to increase data storage
volumes at a rate of nearly 20% per year. We expect growth to accelerate even more in the postpandemic world.
• Customer demand for large-capacity hard disk drives, called “nearline drives,” remains strong,particularly in data centers for such uses as growth of IoT and storage of video data.
• The Company continues to carry out capital investment in the hard disk drive suspension business andpursues higher efficiency by strengthening its production technology capabilities to further increasecustomer satisfaction through stable supplies and cost reductions.

2,100[7.2%]

900[3.7%]

Communications-related business• Further growth driven by strong 5G-related and IoT-related demand is forecasted going forward in the
optical information and communications industry’s three main application markets: data centers,
telecommunications, and wireless.
• We will work to increase sales by strengthening our product development capabilities and expanding
our sales network for all these markets.

Printer-related products• The Company is the only manufacturer that can supply three types of rollers: solid shafts, TUBE shafts,
and resin-coated TUBE shafts.
• We forecast that increased demand for remote work will drive sales growth. We will improve our pricecompetitiveness through such means as process improvements and automation.

23

(300)
[(1.7)%]Net Operating
sales income

Net Operating
sales income

Net Operating
sales income

Net Operating
sales income

FY2021(Forecast)

FY2022

FY2023

FY2024

Growth Business Related to Electric Vehicles and Electrification:
Changes in the External Environment

Outlook for progress on
automobile electrification

Electrification isaccelerating

By 2030, 34% of vehicles will be electrified
2020 Forecast

2021 Forecast

2020

2025

2030

2020

2025

2030

Ratio of engine-less vehicles

2%

4%

9%

3%

14%

21%

Ratio of vehicles with engines(including hybrids and plug-in hybrids)

98%

96%

91%

97%

85%

79%

EV

Plug-in hybrids

PHV

Hybrids

HV

Internal combustion
engine automobiles

ENG

96%

FCV

0%

EV

3%

PHV

1%

HV

4%

ENG

92%

【Data Source: FOURIN & Marklies】

24

83%

2025
FCV

1%

EV

13%

PHV

3%

HV

7%

ENG

76%

Vehicles withengines

Electric vehicles

2020

Vehicles withengines

FCV

Vehicles withengines

Electrified
vehiclesNumber of vehicles sold(100 millions of vehicle)

Fuel cell vehicles

Electrified
vehicles24%

76%Electrified
vehicles
34%
2030
FCV

1%

EV

20%

PHV

3%

HV

10%

ENG

66%

Growth Business Related to Electric Vehicles and Electrification:
Electrification Components
We focus on developing product lines that support high current
applications from shift to electric vehicles.
In addition to products for electric vehicles, we also expect growth in thefields of industrial equipment and batteries.
Automobile electrification components

Vehicle-mounted/industrial equipment/energy equipment, unit wiring, current detection

Shunt on bus bars withconnectors

Bus bars

Shunt sensor modules

USM modules

batteries use one current sensor, and inverters use three to six.
Roles and features of current sensors Drive
The shunt method takes up less space than the hall method, and can detect with high precision.

Mounted vehicle

Auxiliary battery

Drive battery

Drive inverter

Current sensing method

ISS*

HV/EV

Shunt method

Hall method

Number ofunits used

○

○

○

○

1

 Uses current sensor to monitor 12V lead battery
 Monitors current with main objectives of detecting remaining
battery charge, lifetime, and dark current

○

○

○

1

 Uses current sensor to monitor xEV drive battery
 Increased accuracy expands scope of battery use.

○

(Underdevelopment)○

3 to 6

Roles and features of current sensors

 Input/output current sensing to control xEV drive inverter Because it is connected directly to drive control, requires
higher detection precision and response speed than the two
above.
* ISS: Idling stop system

25

Growth Business Related to Electric Vehicles and Electrification:
Bus Bar Sales Forecast
16.7
Starting in FY2022, two Japanese automakers haveadopted new mass-produced bus bars (for electricvehicles and hybrids).

15.8
14.6

Large increase
We have received an increasing number of new inquiries
from other manufacturers in Japan, as well as
manufacturers of motorcycles and construction equipment,
and are currently responding.

7.6

7.5
5.5

5.3

FY2019 2020年度
FY2020 2021年度
FY2021 2021年度
FY2021 2022年度
FY2022 2023年度
FY2023 2024年度
FY20242019年度Actual
実績

Actual
実績

Initialplan Estimate
当初計画
見通し

Plan

計画

Plan

計画

Plan

計画

Unit: 100 millions of yen

26

Growth Business Related to Electric Vehicles and Electrification:
Creation of Current Sensor BusinessWe have begun to mass produce and supply shunt on bus bars for electric vehicles in North America.
We have a large increase in prototypes, including OEM and Tier 1 in Europe, Japan, and China, and thenon-vehicle mounted field.

Exhibitions in Germany and Tokyo27

Growth Business Related to Electronic Information and Communications:Trends in Hard Disk Drive Market

Demand for nearline hard disk drives will tend to grow going forward in
response to the significant growth in demand for cloud storage capacity
12

3

Advances in 5G, IoT, and DX
are expected to drive explosive
growth in demand for cloudstorage in the global market

Data storage and processing
services are centrally managed
in data centers and requirelarge-capacity storage

Demand for nearline harddisk drives will grow further
compared to our forecast in
March 2021

Data storage capacity demand
10,000

65.5%

8,000
46.3%

6,000

Hard disk drive capacity demand

50.5%
44.0%
44.5%

70%

4,000

60%

3,500

50%

3,000

40%

2,500

1,500

20%

2,000
0

SSD/NAND/ODD/Tape/Others

Back: Forecast in March 2021

2,000

30%

4,000

Vertical bar: Current forecast

NL

1,000

10%

500

0%

0

■Enterprise

HDD

An exabyte (EB) is a unit of measurement for data. 1 EB is 1,000,000,000,000,000,000 bytes.
Source: Techno Systems Research Co., Ltd.

28

■NL

■3.5” ATA

■2.5 MobileGrowth Business Related to Electronic Information and Communications:
Enhancement of Production Capacity of Nearline Hard Disk Drive Suspensions

an approximate three-fold increase in

The plan incorporates
production capacity compared to FY2018.

The Company’s production capacity plan for nearline drive suspensions

300

280

150

100

FY2018FY2021

FY2024FY2025■ Production capacity setting FY2018 production capacity level as 100

29Other Next-generation Business Initiatives (1):Promotion of Medical Care Business
Walking assist robot

Conducted public relations activities
at exhibition and other booths

OrthobotThe 37th Scientiﬁc Meeting of the Japanese Society of
Prosthetics and Orthotics

Orthobot is a robot that helps patients learn to walk, brought to market throughjoint research and development with Kyoto University. Orthobot is currently in use
at rehabilitation centers in Japan.
Orthobot is currently not only being used at rehabilitation centers, but has beenused at senior and other care facilities as well. Next fiscal year, we plan to releasea new smaller, more lightweight version.

30(October 23–November 20, 2021)

The 5th Annual Autumn Scientific Meeting of theJapanese Association of Rehabilitation Medicine(November 12–14, 2021)

The 5th Healthcare Robot Exhibition(Organizer: Hokkaido Healthcare Robot Association; September 28, 2021)

Other Next-generation Business Initiatives (2):Promotion of Environment and Energy-related BusinessBamboocharcoal
Grows by absorbing CO2

 Developed by the Company, and currently in use as coating material for instrument
panels and interior touch panels in domestically produced automobiles
 Using abandoned bamboo groves which have absorbed CO2 as the raw material,
superheated steam is used to turn the bamboo into charcoal without burning it. Thistakes the product beyond the realm of “carbon neutral” to “carbon fixation.”

Fixes (reduces) the absorbed
CO2 into other products

Development for applicationin multiple fields is ongoing
Application for capacitors(under development)

Electrodeplate

Laminate pack
* Prototype capacitor currently under consideration for mounting
in the Company’s walking assist robot

Used as instrument panel coating

Converted to
charcoal withoutburning31

Other Next-generation Business Initiatives (3):Development of New Products

Aerial ultrasonic sensor* Under development

can detect positioning information and shapes
 We are developing an aerial ultrasonic sensor that can identify the position of
obstacles. It works by using an aerial ultrasonic transducer as a phased array,enabling the sensor to simultaneously detect the distance and direction of an
obstacle, which was not possible in the past.

Features By reducing the arrangement interval of the transducers to half ofthe sound’s wavelength, we are able to radiate sound waves in
only the intended direction.
 We have created a phased array that is able to operate stably byusing non-resonant transducers.
 We are able to radiate sound waves with sharp directionality.

Applications
 Obstacle detection by autonomous robots
 In-cabin monitoring in automobiles
 Room monitoring at hospitals, care facilities, and others

32

Existing Automotive-related Products Segment: Key Strategies
Existing automotive-related products segment

01
3

Precisionfunctional
精密機能材料
materials

Respond to changes in industry structure andimprove earnings strength•••With sizable growth in demand for electric vehicles forecast, we will be able to maintainthrough 2030 the scale of our existing automotive-related products segment (consistingof the main products of engine parts and precision-functioning transmission parts).
We will focus on improving earnings strength of existing projects by thoroughly managing
earnings on an individual product basis.
We will continue to invest in the seatbelt business and other safety equipment-related
products, as high demand is expected to continue.

30,00030,400Precisionfunctional
精密機能部品components
Unit: Millions of yen

30,10030,000

Validate market growth rate and profitability on an individual productbasis in existing automotive-related products segment

Market growth rate
(net sales)

Growing businesses
These are also important
products for electric vehicles,
and the market growth rate
will increase. We will aim togrow these businesses with
an awareness of return on
capital.

Seatbelts
Bodies1,100

Brakes950

Transmissions

Restructureand ensureprofitability[4.3%]

1,500[5.0%][3.2%]

Businesses to improve profitability
Engines[3.6%]

1,300

Return on invested
capital (ROIC)33

Net Operating
sales income

Net Operating
sales income

Net Operating
sales income

Net Operating
sales income

FY2021(Forecast)

FY2022

FY2023

FY2024

Existing Automotive-related Products Segment:
Approach to Engine and Transmission Parts

Consider optimization of production and sales locationsin anticipation of decrease starting in 2030
Our main products use multiple production locations, with the aim of local production and local consumption.
We will first accelerate improvements to global profitability, while leveraging this advantage.

(1) Valve springs and valve cotters(2) Ring gears and drive plates

Items

Status/matters to be addressed

Items

Status/matters to be addressed

Sales trends

Maintain market share and sales until 2030

Sales trends

Maintain profits as sales slightly decline

Production
bases

Five locations (two in Japan, one each in the U.S.,
China, and Thailand)

Production
bases

Six locations (one each in Japan, the U.S., Mexico,and Thailand, and two in China)

Matters to beaddressed• Analyze strengths and weaknesses byintegrating cost composition by production base
• Optimize through comparison of equipment,
specifications, and takt time
• Identify matters to be addressed at each base,and roll out globally (e.g. automation, central
purchasing of materials, and improving logistics
costs and processes)

Matters to beaddressed

34• Optimally allocate production to each location
based on capacity and status of orders• Improve profits by using alternative materials• Advance negotiations to reflect increases in steel
material prices in sales prices

Overall:Expansion of Sales Channels by Leveraging Channels of Major Shareholders
Expand into regions with high potential utilizing the channelsof Marubeni-Itochu Steel Inc. and ITOCHU Corporation.

EUROPECHINAAMERICA

JAPAN

ASIA

Marubeni-Itochu Steel Inc. became an investor as of March 2021.
- Pursue synergy by procuring materials for existing products and expanding sales of our products, mainly for electricvehicles in China
We have partnered with ITOCHU Corporation to expand sales of our products for electric vehicles in Europe and the U.S.
35

Financial and Capital Strategy

Financial and Capital Strategy
 Reform our business portfolio with an awareness of improving return on capital Manage balance sheet with the aim of optimizing excessive shareholders’ equity
 Maintain payout ratio at 75% until ROE exceeds 9% to prevent a buildup of equity capital Restructure and strengthen
existing businesses

Profit growth Improve profit margins throughcost reductions

Improve
profitability

Increase
corporate value

 Increase total shareholder
return and share price:
Consistently achieve tradable

share market cap of 10.0
billion yen
 FY ending March 2025:

ROE exceeding 9%

 Develop businesses in growthdomains Reform our businessportfolio with an awarenessof return on capital

Optimization ofmanagement
resources

Return toshareholders

 Actively invest in corebusinesses and personnel
 Convert to agile personnel
placement Maintain payout ratio at

75% until ROE exceeds 9%

Manage balance
sheet

Investments
and M&As

 Prevent a buildup ofequity capital Effectively utilize leverage37

 Consider using interest-bearing
debt for M&As Investment decisions with athorough awareness of cost ofcapitalCapital Investment Expenses in GGP24
 We have met the investment plan ahead of schedule, mainly for hard disk drive suspensions,from the initial plan in GGP21 of 16.0 billion yen.
 In GGP24, we will make strategic investments to reform our business portfolio with awarenessof return on capital.
2016-2018
Medium-term Management Plan
(Millions of yen)

GGP24

GGP21

10,000Strengthened foundation and expand
automotive-related business

Actively invested in suspension
business

Make strategic investments withawareness of optimum portfolio

9,000

9.8 billion yen

17.1 billion yen

16.2 billion yen

8,000
7,000

Electronic information and communications segment and next-generation businesses

Some made aheadof schedule

Existing automotive-related products segment
Others

5,978

6,000

7,000

6,000
5,900

5,143
5,000
4,000

3,935
2,997

2,925

FY2017FY2018

3,000

3,300

2,000
1,000
0
FY2016FY2019FY202038

FY2021

FY2022

FY2023

FY2024

Main Strategic Investment Policies in GGP24

GGP24
Investment field

Aim of investment

Estimated amountin GGP24

HDD suspensions• Expand production capacity to meet customer demand• Support production of next models• Introduce equipment for automated appearance inspections

Approximately
6.0 billion yen

Relating to nextgeneration main
businesses• Establish mass production system for products supporting electrification(shunt sensors and shunt on bus bars), and develop new products

Approximately
1.5 billion yen• Improve availability and efficiency of system infrastructure• Environment-related investments

Approximately
1.0 billion yen

Environmental
improvement andenhanced governance

M&As to ensure technologies, people, and production bases needed to expand products supporting
electrification and hard disk drive suspensions (under consideration).

39

Approximately
2.5 billion yen

Shareholder Return Policy

Trends in dividends per share (yen)Promote management with anawareness of return on capital andbalance sheet management tocontinuously exceed 9% ROE
Maintain the policy
until 9% ROE is attained
Change from the conventional policy ofstable dividends to aggressively
implementing return to shareholders inorder to prevent a buildup of equity capital

19.00

20.00

20.00

As set forth in the next
Medium-term Management
Plan, maintain payout ratio at
75% until ROE exceeds 9%

20.00

FY ended
FY ended
FY ended
FY endingending2018年度
2019年度 2020年度
2021年度 FY
2022年度March 2019 March 2020 March 2021 March 2022 March 2023

（予想）

FY ending
2023年度March 2024

FY ending
2024年度March 2025

(Forecast)40

Cash Allocation

Cash in (financing)
Creation of cash flow

Cash out (allocations)Utilization of interestbearing debt

Investment in growth

Return to shareholders• Strategic investment,
including M&As

3-year operating cash flow

• Capital investment

19.0 to 20.0 billion yen

expenses

16.0 to 18.5 billion yen

Surplus funds

Return toshareholders (payout)

Interest-bearing debt

Maintain payout
ratio at 75% until
ROE exceeds 9%

Consider use when
making strategic
investments

41

Environmental, Social, and Governance Response

Environmental, Social, and Governance Response (1):Initiatives to Strengthen Corporate Governance CodeEvaluation of effectiveness of the Board of
Directors using third parties(Considering implementing this one time within
period of Medium-term Management Plan)

2023–2025
Increase ratio of independent
outside directors to one third

Strengthen
corporate
governance

June 2023
General Meetingof Shareholders• Enhance ESG disclosure• Begin TCFD compliance2023
Increase the number of
independent outside directors
to three

2021
2020

June 2022
General Meeting of Shareholders
Establishment of the SDGs
Promotion Committee

Transition to a company with
an Audit and Supervisory
Committee

2018
Evaluation of effectiveness of the Boardof Directors(Conducted via in-house questionnaire)2015■ Items to be implemented

Respond to corporate
governance code

■ Implemented items
43

Environmental, Social, and Governance Response (2):Establishment of the SDGs Promotion Committee

Currently, the committee is consolidating and streamlining issues regarding
climate-related risks of our business activities and revenue opportunities

Purpose Identify CSR and sustainability issues
 Establish the Groupwide systems
 Consider initiatives with an awareness of consistency between management issues
and sustainability issues
Representative Director and CEO

Committee
Members

Role ofCommittee

Sales Department
Development Department
Product Strategy Office

Production Business Department
Administration Department

 Positioned as an advisory committee for improving quality of discussions by the Boardof Directors and Management Council
 Consolidates and streamlines the Company’s sustainability initiatives
 Maintains consistency of climate-related and other risks with management strategy,
management issues, etc.
44

Environmental, Social, and Governance Response (3):Key SDGs that the Company is Working on
Organizing materiality that leads to value creation, and materiality thatserves as infrastructure for business continuity
Materiality

Response to climatechange• Contribute to carbon neutrality throughdevelopment of electric vehicle products• Solve issues through development andapplication of technology(Next-generation business: bamboo charcoal,etc.)• Adopt manufacturing lines that reduce
environmental impact

Contribute to a safe andsecure social life

• Reduce risk of automotive accidents throughour products

Contribute to the aging
society• Contribute to the era in which people live to
100 through products such as our walking
assist robot

Hire diverse workforce• Hire mid-career employees• Hire female employees and foreign nationals• Aim to adopt “Kurumin” by the end of FY2022

Respect human rights• Create rewarding working environment byimproving the working environment in eachcountry, developing human resources, andrespecting human rights

Materiality that leads tovalue creation

Materiality that serves as
infrastructure for business
continuity

The Company’s initiatives

Realize corporate
management that
supports sustainablegrowth• Thorough compliance and risk management• Enhance corporate governance

45

Relation to SDGs

Environmental, Social, and Governance Response (4):
Increasing the Number of Independent Outside Directors/Policies to Ensure Diversity
At the General Meeting of Shareholders in June 2022, we plan to appoint an additional independent outside director.
Our target is for one third of the Board to consist of independent outside directors by the General Meeting of
Shareholders in June 2023.
To create the best director composition, we are studying skill matrix as a tool to list and evaluate knowledge, experience, skills, and other qualities of eachdirector from an objective viewpoint. We plan to include this information in the convocation notice of the General Meeting of Shareholders in June 2022.

■Independent outside directors ■Internal and outside directors
Current ratio of independent
outside directors

18%

Ratio of independent outside
directors at the General Meetingof Shareholders in June 2022

25%

Ratio of independent outside
directors at the General Meetingof Shareholders in June 2023

33%

Policy for ensuring diversity (formulated on February 10, 2022)
We plan to appoint anadditional independent
outside director as of June
2022.
Three in total

We will actively hire new female
employees and hire mid-career
female employees as candidates
for management positions.
We will employ foreign nationals
with the aim of global
management.

We will create company
environment that facilitateswork by female employees,
and obtain Kurumin
certification by the end of
FY2022.

46

We will hire mid-career
employees with diverse
experience.

[Notice]
The materials for today’s briefing include statements regarding the Company’s
performance outlook and future plans and policies. Please ensure that you comply
with the Financial Instruments and Exchange Act and other laws and regulations
when trading stock, etc. In addition, forward-looking statements in the materials areprepared based on currently available information and include factors of known andunknown risks and uncertainty. Accordingly, the Company’s actual performance,business activities, and financial position may differ significantly from thesestatements. Please note that the Company has no obligation to announce or disclose
updates or revisions to these forward-looking statements.