This document has been translated from the Japanese original for reference purposes only. In the eventof any discrepancy between this translated document and the Japanese original, the original shallprevail. RIKEN TECHNOS CORPORATION assumes no responsibility for this translation or for direct,
indirect or any other forms of damages arising from the translation.

RIKEN TECHNOS CORPORATION

Three-year Medium-term Business Plan
May 20, 2022

Previous three-year medium-term business plan

Generating Greater Value Together!

Aiming to become the leading provider of comfort for all living spaces

1Overview of previous three-year medium-term business plan
Management policy

MORE VALUE TO ALL 2021: Generating Greater Value Together!

Numerical targets

Five key challenges

Consolidated
basis

1

Intensifying Global Management and Generating Synergies

2

Improving the Capacity to Generate Revenues and Profits
through Strategic Thinking

3

Realizing a Production Structure that Reflects the ThoroughPursuit of Efficiency

4

Contributing to a Sustainable Society

5

Strengthening Corporate Foundations through Management
Emphasizing Human Resource Development and GovernanceFY ended March 2022
(final year of the plan)

Net sales

115 billion yen

Operating profit

8.5 billion yen

Ordinary profit

8.5 billion yen

Net income

5 billion yen

ROS

7.0％

ROE

8.0％

Aiming to become the leading provider of comfort for all living spaces

2Summary of results of previous three-year medium-term business plan(numerical performance)
billion yen

Net sales

115.0

FY ended March2022 (actual)

109.9

Consolidated financial results

Relative to
plan

ROS

120

-5.1
-4.4%

ROS

8.5

6.3

100

Net income

7.1%-26.0%

7.0%

5.7%

80

-1.3%

8.5

6.9

-1.6
-19.0%

5.0

3.9

-1.1
-21.2%

ROE

12.5

88.2

-

Ordinary
profit

15.0
109.9

98.8

97.8

-2.2

8.0%

7.1%

Net sales (billion yen)

Operatingprofit

ROE

6.2%

5.7%

7.5

6.0%

5.9%
5.6%

40

20

5.0

5.8

5.6

6.3

5.3

3.9

3.2

3.1

3.1

Summary

6.3%

60

-0.9%
-

10.0

6.4%

0

• Net sales and each measure of profit in the final year of
the medium-term business plan were the highest ever.

2.5

0.0
FY ended
March 2019

• However, the plan was not achieved due to the impact of
COVID-19 and soaring raw material prices.
Aiming to become the leading provider of comfort for all living spaces

FY ended
March 2020

Net sales
売上高

FY ended
March 2021

Operating

営業利益
profitFY ended
March 2022

Net income
当期純利益
3

Operating profit / net income (billion yen)

FY ended March2022 (plan)

Five key challenges and outcomes (1)1Intensifying Global Management and Generating Synergies

Enhanced the level of management of overseas sites- Global administration progressed in each division
based on an organization aware of global
management issues.
- Rolled out the Riken Standard for manufacturing
globally.
- Enhanced the sophistication of the governance ofoverseas subsidiaries.

2

Demonstrated global synergies- Acquired a compound business from Asian third party.
- Completed production structure optimization in ASEAN(began expanding compound production facilities inThailand and Vietnam).
- Acquired business related to ICE-µ thermal barrier film
for automobile window glass.

Improving the Capacity to Generate Revenues and Profits through Strategic Thinking
Strengthened sales of high value-added products

Efficiently boosted profits- Expanded the lineup and sales of RIKEGUARD- Promoted shared administrative operations to reduce
infection control products.
costs and pursued the integration of subsidiaries’ IT
systems.
- Acquired ACS assets and expanded into the electricalmaterials field.
- Increased Group management efficiency andstrengthened development/sales capabilities through- Collaborated with a design subsidiary to improve
the absorption of Riken Fabro Co., Ltd.
marketing in new markets.
Aiming to become the leading provider of comfort for all living spaces

4Five key challenges and outcomes (2)3Realizing a Production Structure that Reflects the Thorough Pursuit of Efficiency
Enhanced production efficiency

Strengthened global manufacturing- Expanded deployment of automatic control ofproduction.

- Reduced production costs through Group-wide
productivity improvements.

- Expanded deployment of predictive management
systems.

- Harnessed the Internet to generate manufacturing
process innovations globally.

- Pursued DX (digital transformation) in
manufacturing.

- Reduced energy losses by modifying utilities
equipment.

4

Contributing to a Sustainable Society- Revamped the CSR Report as the “Blue Challenge
Report” and published an educational booklet for
employees globally.
- Established a Sustainability Policy and Sustainability
Committee/Environment Committee.

- Began selling RIKEGUARD film.
- Brought biomass compound RIKEBIO to market.
- Launched a recycling business.

Aiming to become the leading provider of comfort for all living spaces

5Five key challenges and outcomes (3)5Strengthening Corporate Foundations through Management Emphasizing Human
Resource Development and Governance

Developed talent who can shine on the global stage.

Strengthened Group governance.

Realized sustainable management that takes into consideration all stakeholders.
- Promoted those with overseas business experience
to management and administrative positions.
- Selected young employees for assignment tooverseas offices.
- Revised the mid-level personnel training system.
- Introduced the ‘Professional System’ to make betteruse of human resources.

Undertook web-based training.

- Established a Corporate Governance Policy.
- Strengthened risk management.
- Strengthened Group governance.

Provided training for new managers.
Aiming to become the leading provider of comfort for all living spaces

6Summary of results of previous three-year medium-term business plan
(investment etc.)
Total capital investment during the period of the three-year medium-term business plan: 12.4
billion yen (medium-term plan figure: 14.5 billion yen)

Unit: billion yen (includes maintenance)

Fiscal year

Major capital investments

TotalamountR&D
expenses

FY ended
March 2020

Domestic elastomer facilities expansion
Thailand IT system upgrade
Capital investments to improve efficiency

4.3

1.5

FY ended
March 2021

Expansion of R&D centers
Capital investments to improve efficiency

4.4

2.3

FY ended
March 2022

New plant / expansion of medical use
production facilities in Thailand
Commencement of installation of trial
production machines at R&D centers
Capital investments to improve efficiency

3.7

1.9

Aiming to become the leading provider of comfort for all living spaces

7

New three-year medium-term business plan

Challenge for innovation

Aiming to become the leading provider of comfort for all living spaces

8Overview of new three-year medium-term business plan
RIKEN's strengths / business model

Mission (= raison d'etre)◆ Ability to deliver what customers
want to global, blue-chipclientele

We are a challenger that harnesses the power of science to improve the qualityof life and to create a safe, affluent society. We continuously provide new value
and satisfaction to people, companies and society through our original andsuperior formulations and manufacturing technologies of multiple resins.

◆ Strong technical capabilities- Formula design technology- Kneading technology- Calendering film forming
technology

RIKEN's (medium- to long-term)
environment
Plastic reduction movement
Growing environmental awareness
Digitalization trend
Progress with EVs

Long-term vision
Aiming to become the leading producer of comfort for all living spaces
Strategy 1

Strategy 2Strategy 3

Strategy 4

Intensify global
management andgeneratesynergies.

Stay ahead ofcustomers’
expectations.

Take on thechallenge toward
new businesses
and products.

Contribute tosolvingenvironmental
and social issues.

Strategies to grow existing businesses

Strategies or measures that support Strategies 1-4

Shrinking domestic market
Growth in Asia

Strategies for future growthIntellectual property (R&D)
investment

DX investment
Capital investment /manufacturing

Human
resources
investment

Aiming to become the leading provider of comfort for all living spaces

Governance9Management indicators(billion yen)billion yen
FY ended
March 2022

FY endingMarch 2025

(actual)(plan)

Consolidated

14
120

109.9

ROE

12
8.0%

135.0

Operating profit

6.3

8.5

Ordinary profit

6.9

8.5

Net income

135.0
ROS

100

109.9

Net sales

140

3.9

7.1%

10
6.3%

5.7%

80

8
60

6

5.0
8.5

40

ROS
ROE
Overseas sales ratio

5.7%
7.1%
47.8%

6.3%
8.0%
More than50%

Assumptions• Naphtha price: 61,000 yen planned for FY ending
March 2025
• Exchange rate: 114 yen/USD

6.3
20

0

FY ended
2022年3月期実March 2022
(actual)績

Aiming to become the leading provider of comfort for all living spaces

2

FY ending
2025年3月期計March 2025
(plan)
画
Operating profit
営業利益

6.0
%

4.0
%

4

5.0

3.9

Net sales
売上高

8.0
%

Net income
当期
純利益

10

0

2.0
%

0.0
%

Strategy 1: Intensify global management and generate synergies.
RegionASEAN

Portfolio by region

Markets

Net sales for the fiscal year ended March 2022

Global Japanese companies(most important region)

Strive to capture an overwhelming market sharein ASEAN and to increase the number of field inwhich we hold the leading share throughtargeted allocation of corporate resources.

Japan
Strive to be a leader inindustry restructuring.

India andwestward
Develop markets in
India and westward.

• Expand globally with a focus on
automotive and medical.

North America• Establish dominant market
share among Japanesecompanies in ASEAN

Make capital
investments targeting
improving production
efficiency.

Local non-Japanesecompanies.

China• Capture non-Japanese users in
ASEAN by harnessing our
supply chains in Thailand,
Indonesia, and Vietnam.

Optimize portfolio.

North
America15%
Other Asia9%
109.9 billion yen

Increase sales through an
ASEAN-focused strategy.
(Plan to increase ASEAN
ratio to 27% and achieve
an overseas sales ratio of
50% in the fiscal year
ending March 2025)

Measures in each division to support the global strategy• Establish Global
Procurement Dept.
• Build global database.

Expand R&D centers.

Establish a
production/supply structure.

• Coordinate purchase orders
and production orders
between sites.

Global human resources
development/hiring

ASEAN
24%

North
America15%
Other Asia
8%135 billion yen

Further reinforce global cross-functional management by each division.

Global purchasingDX• Implement SFA/CRM forbusiness efficiency andinformation sharing.

Global quality
management structure

Aiming to become the leading provider of comfort for all living spaces

Japan
52%

ASEAN
27%

Japan
50%

+10 billion yen

Net sales for the fiscal year ending March 2025

11

Strategy 2: Stay ahead of customer’ expectations.

<Advance ahead><Reinforce strengths>
Understand exactly what the customer wants andquickly provide a solution.
⇒ RIKEN TECHNOS business model

Acting aheadof time• Anticipate/develop potential customer
needs and propose solutions.
• Analyze the market beyond the supply
chain to identify future needs.

Stay aheadof customers.

Systems/measures to support business model and its development
Improve sales capabilities.

Improve development capabilities.

Improve sales information gathering/analysis
skills.
• Conduct market analysis beyond the supply chain.
• Implement Sales Force Automation (SFA) and Customer
Relationship Management (CRM) to visualize and sharecustomer/industry data.

Develop sales personnel to support the businessmodel.
• Educational measures to improve product knowledge/market
analysis skills.

Speed up solution delivery.
• Increase development speed by installing a new film trial production
machine.
• Propose newly developed products by integrating materials
technology and film-forming technologies.
• Employ materials informatics to speed up the establishment of
optimal formulations.

Reinforce structures.
Further improve ability to serve film customers with the establishmentof the Film BU.

Aiming to become the leading provider of comfort for all living spaces

12Strategy 3: Take on the challenge toward new businesses and products.
Challenge of developing new products and newmarkets.
• Build new business pillars that go beyond geographic
expansion and meeting customer needs.
• Establish a structure that can fully utilize RIKEN's
technological strengths (formula design technology,
kneading technology, calendering film forming
technology).
• Establish a structure, methodology, and culture thatgenerate new products.

Set direction for new products.
• Develop new businesses and products (e.g., biodegradable,
biomass, recycled compounds) to meet the needs for carbon
neutrality and SDG attainment.
• Develop environmentally friendly products in the foodpackaging field.
• Create markets by combining functions.
• Produce films/sheets of newly-developed compounds.

Take measures to support new product/new business development.
Develop new products.
Perform development in house.

Identify and work with external partners.

Reorganize R&D centers.
Invest in R&D, IP, and human capital.
Reduce formula maintenance costs
through formula modularization,
consolidation of raw materials, etc.

Rebuild corporate culture to create new
businesses/new products (i.e., establish aculture of taking on challenges).

Promote technology transfer andopen innovation under TLOs with
universities and other research
institutions.

Pursue open innovation by
converting some R&D centers into
open laboratories.

Explore M&A opportunities targeting new businesses/IP.

Encourage new ideas by ensuring diversity in human resources.
• Endeavor to utilize new ideas from women, foreigners, mid-career hires, etc.
• Hire diverse talents and promote them to management positions.
Aiming to become the leading provider of comfort for all living spaces

13Strategy 4: Contribute to solving environmental and social issues.
Develop and expand sales of environmentally friendly products.
Expand sales of environmental materials.
• RIKEGUARD, RIKEBIO, etc.

Expand sales of PVC (polyvinyl chloride) and TPE(thermoplastic elastomer).
• Salt (a natural material) accounts for about 60% of the raw material for
PVC and has less environmental impact than other general-purpose
resins made from 100% petroleum-derived raw materials.
• In contrast to rubber, TPE production does not require a vulcanization
process. Molding requires less energy and generates less CO2. TPE is
also lighter than synthetic rubber and can be recycled.

• Market environmentally friendly
materials such as rubber substitutes
and paint substitutes.

Reinforce implementation structures and pursue various activities.
Sustainability Committee
To further incorporate stakeholders' expectations into corporate activities, we have established the Sustainability
Committee chaired by the President & CEO as a function linking the front lines and management.

Respond to climate change
issues.
Take action with the goal of
becoming carbon neutral by
2050.

Contribute to the realization of a circular
economy.
• Acquire recycling technologies and installequipment.
• Devise a mechanism for product recalls.

Contribute to society.
• Replace equipment with moreenergy efficient versions.
• Use renewable energy.

• Contribute to the local communities in which
factories are located.
• Contribute to society, starting with theSDGs.

Tackle human rights issues.
• Ensure fair and proper trading throughout the
supply chain.
• Select suppliers based on criteria thatencompass the SDGs.

Respond to diversity.

Aiming to become the leading provider of comfort for all living spaces

14

I Transportation (TR)Net sales / Operating profit(Million yen)

50,000Transportation

6,000

39,00040,00032,4573,600

30,00020,00042,500

3,050

2,737

4,000

2,000

10,0000

FY ended March2022 (actual)

FY ending March2023 (forecast)

Net sales

FY ending March2025 (plan)

Operating profit

Focus areas
Wire harnesses

Aiming to become the leading provider of comfort for all living spaces

0

Molded parts forautomobiles
15

I Transportation (TR)◆Wire harnesses
•
•

•
•

Compound use by Japanese wire harness manufacturers by region
and the Company’s sales of compounds for wire harnesses(billion yen)

Secure deals with Japanese companies (secure deals
in the expanding ASEAN and India markets).
Expand sales of thin-walled electric wires.

Bring competitive grades to market.

30
25
20
15

Expand sales to non-Japanese companies.

100

FY ended March2022 (actual)• Expand sales of functional materials (increase adoption
in functional parts, promote material conversion andrubber substitution, and expand overseas).
• Bring biomass compounds and recycled compounds tomarket.

ASEAN
China

FY ending March2023 (forecast)

North America

20

0.4

0

FY ending March
2025(plan)

Other(Based on our own
research and forecasts)

Japanese automakers' production volume
and sales of compounds for automotive molded parts◆Molded parts for automobiles• Expand sales of molding and sealing materials (increase
adoption by major Japanese parts manufacturers andexpand overseas).

Japan

60

12.8

0.4

0.3

80

40

11.7

10.1

5

Market growth: +14%
Net sales: +27%

100

20.6
2.4
5.1

18.6
2.1
4.5

16.2
1.8
3.9

(1,000 tons)

97

88

85

(million vehicles)(billion yen)

22.47

16

23.37

25.76 25

Market growth: +15%
Net sales: +41%

20

Net sales

15

Number ofvehicles produced

12
8

4

10.0

12.0

14.1

10
5

(Based on our own
research andforecasts)

00
FY ended March2022 (actual)

Aiming to become the leading provider of comfort for all living spaces

FY ending March2023 (forecast)

FY ending March2025 (plan)16

II Daily Life & Healthcare (DH)Net sales / Operating profit(Million yen)

Daily Life&
Healthcare

40,00033,5006,000

35,40030,68830,0004,000
20,000

1,856

2,500
1,600

2,000

10,0000

0
FY ended March2022 (actual)

FY ending March2023 (forecast)

Net sales

FY ending March2025 (plan)

Operating profit

Focus areas
Medical use

Rubber substitutes

Aiming to become the leading provider of comfort for all living spaces

Environmental
materials
17

II Daily Life & Healthcare (DH)Global dialysis circuit sales volume and medical compound sales◆ Medical use (PVC)(billion yen)

12

•
•

Cultivate Japanese companies as customers bydrawing on the supply chains at our three ASEAN sites.
Capture non-Japanese companies as customers byleveraging our high quality and stable supply capacity,
an essential attribute for medical products.

372

346

4

5.4

For medical applications, add functionality to the baseof highly-hygienic properties, thereby promoting the
adoption of rubber substitutes.
In lifestyle and industrial materials, develop new
functional materials and offer environmental
friendliness, thereby promoting the adoption of rubber
substitutes.

••

Dialysis circuit
sales volume*(* Source: “2019 Medical Life
Science,” Fuji Chimera
Research Institute)

0.3 0
FY ending March2025 (plan)(10k tons/year)(billion yen)

4

20

20

21

Market growth: +6%

25

Net sales: +107%

20

Net sales

15

2

2.9
1.4

1.7

FY ended March2022 (actual)

FY ending March2023 (forecast)

10

Rubberconsumption

5

0

0

◆ Environmental materials•

FY ending March2023 (forecast)

Overseas

150

Domestic medical and industrial rubber consumption
and the Company’s compound sales◆ Rubber substitutes

•

0.2

0

Domestic

300

7.8

6.4
0.2

Net sales: +45%

450

6.6

5.6

FY ended March 2022
(actual)

•

433
8.1

8

Market growth: +25%

(Million sets)

FY ending March2025 (plan)

Source: Japan Rubber
Manufacturers
Association※出典：日本ゴム工業会

Expand use of biomass compound RIKEBIO to multiple
applications.
Bring compounds filled with natural products to market.
Develop and launch 3R-compliant materials.

Aiming to become the leading provider of comfort for all living spaces

18

III Electronics (EL)Net sales / Operating profit (Million yen)
40,0004,000
29,00030,000Electronics

25,00021,49320,00010,000

2,000

1,000

1,100

FY endingMarch 2023
(forecast)

FY endingMarch 2025
(plan)439

0

0
FY ended March2022 (actual)

Net sales

Operating profit

Focus areas
Electric power andindustrial wires

Telecommunications

Aiming to become the leading provider of comfort for all living spaces

Optical film

19III Electronics (EL)◆ Electric power and industrial wires

Sales volume of electric wires for domestic electric power and construction electricity
and the Company’s sales of compounds for electric wires and electrical materials peripheral components(billion yen)

<Domestic>
22.5• Expand sales by leveraging our quality control, stablesupply, and raw material procurement capabilities.
18.0• Expand use of ACS resin products beyond proven products
to peripheral components for electrical materials for social 13.5
infrastructure.
<Overseas>• Expand supply of wire materials for electric power andindustrial purposes in ASEAN.
• Formulate a sales strategy for the electrical materials
peripheral components market and venture into that market.

◆ Telecommunications(1,000 tons)

348

343

365

400
Market growth: +6%

16.5
0.7

Net sales: +51%

300

12.5
10.9

9.0

0.4

4.5

10.5

0.5

Electrical materials
peripheral components

200

Electric power andindustrial wires

15.8
12.0

100

0.0

Sales volume forelectric power andconstruction electricity

0
FY ended March2022 (actual)

FY ending March2023 (forecast)

FY ending March2025 (plan)

Source: Japanese Electric Wire &Cable Makers' Association

Sales volume for domestic electric power and construction electricity
and the Company’s sales of compounds for electric wires and electrical materials peripheral components<Domestic>• Improve material performance and expand sales channels
for robot and FA cables.
• Pursue control performance with formulation andprocessing technologies; develop new products.
• Seize the opportunity of increased production of eco-cars
and expand sales of automotive FFCs.
※出典：日本電線工業会資料<Overseas>• Cultivate the telecommunications and mobility markets.
• Formulate a sales strategy for the automotive FFC market
and venture into that market.

(billion yen)

10

243

230

(1,000 tons)

247

250
Market growth: +7%

8
6

6.7

6.8

7.1

200

1.7

1.8

1.9

150

4

100

Net sales: +6%

Telecommunications andmobility
Robotics and FA

2

5.0

5.0

5.2

0

50

Telecommunications

0
FY ended March2022 (actual)

FY ending March2023 (forecast)Aiming to become the leading provider of comfort for all living spaces

FY ending March2025 (plan)

Source: Japanese Electric Wire &Cable Makers' Association

20

III Electronics (EL)◆ Optical film

Optical film market and the Company’s optical film sales(Million m2)(billion yen)
<Displays>
4.0
300 Market growth: +16 to 40%• Expand sales through differentiation in quality and solutions that
Net sales: +100%
250
3.5
stay ahead of the expectations of existing customers.
250
227
216
• Expand adoption through new applications for large mobile
3.0
Optical film
200
signage.
2.5<Automotive thermal barrier film / Automobile resin windows>
Displays *2.0
150• Expand sales of thermal barrier film by strengthening the sales
Automobile
1.5
3.0
100
capabilities of our distributor network in the ASEAN market
windows*
through exhibitions and well-prepared provision of sales promotion 1.0* Based on our own research
1.7
1.5
50
For the display market,
tools.
0.5
11
forecasts of head-mounted,
1410
automotive, signage, medical,• In the realm of automobile resin windows, which contribute to0.00
and industrial. (Mobile is not
FY
ended
March
FY
endingMarch
FY
endingMarchweight reductions, capture new adopters by offering solutions
included.)
2022 (actual)2023 (forecast)
2025 (plan)
based on the integration of multiple optical technologies.

Contributes tovehicle weight
reduction
Aiming to become the leading provider of comfort for all living spaces21

IV Building & Construction (BC)Net sales / Operating profit (Million yen)

Building&
Construction

40,00030,0004,000

25,15427,40020,00028,000

3,000

2,000

1,400

1,131

840

10,0000

1,000

FY ended March FY ending March FY ending March2022 (actual)2023 (forecast)
2025 (plan)
Net sales

Operating profit

Focus areas
Construction film

Housing and building
materials

Aiming to become the leading provider of comfort for all living spaces

220IV Building & Construction (BC)◆ Construction film
<PVC adhesive wall covering film>• Increase industry share through differentiation in designs,
functions, and services that stay ahead of customer
expectations.
• Expand sales in the field of wrapping film for construction
materials.
<Olefin base film for printed construction materials>• Enhance product appeal and expand sales by
anticipating end-market needs.
<Overseas>• Capture demand through melamine matching incollaboration with a design subsidiary.

◆ Housing and building materials

Floor area of new domestic non-housing construction
and the Company’s sales of construction film
(Million m2)(billion yen)
15

45

44

10

48

9.3

8.5

8.3

1.0

1.0

7.5

7.4

FY ended March2022 (actual)

FY ending March2023 (forecast)<Overseas>• Draw on our network of sites in ASEAN to develop themarket for rigid PVC; bolster our lineup in Thailand withproven rigid PVC materials.

Market growth: +9%
Net sales: +9%40

Domestic

1.0

5

8.3

0

30

Overseas

20

Floor area of newdomestic nonhousing construction(Source: Data from the
Research Institute ofConstruction andEconomy)10
FY ending March2025 (plan)

Construction market investment
and the Company’s sales of compounds for housing and building materials(billion yen)

<Domestic>• Capture increased demand for energy conservation in the
housing industry.
• Promote high functionality in elastomer compounds topromote environmental friendliness and rubber substitution.

50

60

59

62

(Trillion yen) Market growth: +5%
65
Net sales: +19%

15

10

10.3
1.3

5.0

12.0

12.3

1.7

1.8

5.5

5.5

Domestic

45
North America
building materials

25

5

4.0

4.8

5.0

FY ended March2022 (actual)

FY ending March2023 (forecast)

FY ending March2025 (plan)

0Construction market
investment

5

Aiming to become the leading provider of comfort for all living spaces

ASEAN building
materials(Source: Construction
Economic Report No.
73, ©RICE)

23

All segments
Net sales / Operating profit / ROS
Actual resultsfor FY ended
March 2022

billion yen

Net sales for the fiscal year ended March 2022

FY ending March 2025
Variance

Plan

Net sales

32.5

42.5

+ 10.0+ 30.9%TR profit

Operating

2.7

3.6

+ 0.9

+ 31.5%

ROS

8.4%

8.5%

+ 0.0%-Net sales

30.7

35.4

+ 4.7

+ 15.4%

DH profit

Operating

1.9

2.5

+ 0.6

+ 34.7%

ROS

6.0%

7.1%

+ 1.0%-Net sales

21.5

29.0

+ 7.5

+ 34.9%Operatingprofit0.4

1.1+ 0.7 + 150.6%

ROS

2.0%

3.8%

+ 1.8%-Net sales

25.2

28.0

+ 2.8

+ 11.3%

BC profit

Operating

1.1

1.4

+ 0.3

+ 23.8%

ROS

4.5%

5.0%

+ 0.5%-Net sales

109.9

135.0

+ 25.1+ 22.8%Operatingprofit

6.3

8.5

+ 2.2

+ 35.1%

5.7%

6.3%

+ 0.6%-

Consolidated

EL

ROS

Portfolio by segment

BC,25.2 ,
23%EL,
21.5 ,
20%TR,
32.5 ,
29%

109.9 billion
yenDH,
30.7 ,
28%BC,
28.0 ,
21%EL,
29.0 ,
21%

We will focus inparticular on growing
the relatively profitable
TR segment, which
includes functional
components.

TR,
42.5 ,
32%
135 billion
yenDH,
35.4 ,
26%

Net sales for the fiscal year ending March 2025

Aiming to become the leading provider of comfort for all living spaces

24

Investment
Strategic direction• Allocate operating cash flow generated during the period of this medium-term business plan to investments for growth.
Domestic Overseas
FY ending March2023

4.8 billion yen
FY ending March2024

7.7 billion yen
FY ending March2025

7.0 billion yen
Three years total

19.5 billion yen

2.8

2.0

billion yen

billion yen

4.4

3.3

billion yen

billion yen

Major projects
 Expansion of manufacturing facilities at Thai manufacturing site Expansion of manufacturing facilities at Vietnam manufacturingsite
 Domestic IT system investment in IoT, RFID, etc.
 Capital investments to improve efficiency
 Expansion of manufacturing facilities in Thailand, Vietnam, and theUS Capital investments to improve efficiency
 Addition of new elastomer line

Investment in facilities, systems, etc. over 3 years:
19.5 billion yen (previous medium-term businessplan:12.4 billion yen (original plan:14.5 billion yen))Comparison of investment amounts underprevious and new medium-term business plans(billion yen)

20

7.0

15

5.3

1.7

billion yen

billion yen

12.5

7.0

billion yen

billion yen

 Expansion of domestic and overseas manufacturing facilities
Domestic IT system investment
 Overseas quality control system investment
 Addition of new elastomer line

Domestic

10

50Total R&D expenses:
5.7 billion yen
1.7 billion yen for FY ending March 2023
1.9 billion yen for FY ending March 2024
2.1 billion yen for FY ending March 2025

Strategic investment
Actively consider technology acquisitions,
equity investments, and M&A to pursue
new businesses.

Aiming to become the leading provider of comfort for all living spaces

Overseas

2.4

10.0

Previous medium-termbusiness plan

12.5

New medium-termbusiness plan

7 billion yen to be invested by overseas
subsidiaries, compared to 2.4 billion yen under theprevious medium-term business plan (proportion of
investment will rise from 19% to 36%)
⇒ Investment focused on overseas growth25

IP strategy
IP creation through in-housedevelopment

Strengths
Ability to deliver what customers want forblue-chip clients with global operations

Strong technicalcapabilities• Further reinforce strengths through reorganization of R&D
centers.
• Create SDG-related IP.
• Implement measures to create IP.

Open and closed strategies• Formula design technology• Kneading technology• Calendering film forming
technology• In the case of IP such as formulas, formulations, andtrademarks, preserve rights through patent applications andtrademark registrations (open).
• Create IP through open innovation (open).
• Preserve rights with a focus on ASEAN, the main battleground.
• Continue to protect production technology through secrecy(closed).

Status of patents

IP acquisition through M&A• Patents held by the Company (as of March 31, 2022)
430 in Japan, 237 overseas• Percentage of the Company’s patents subject toobjections: 7.8% (Japan average: 0.57%)⇒ Patent with deterrence

Build an environment of competitive advantage
and strengthen our pricing power.

Aiming to become the leading provider of comfort for all living spaces

26

Human capital
Intensify global management andgenerate synergies.

Human resources required to
execute global businessstrategies

Secure human resources (hiring)⚫ Strengthen mid-career recruitment.
⚫ Strengthen recruitment of new
graduates.

Stay ahead of customer
expectations.

Take on the challenge of new
businesses and products.

Human resources withanalytical skills and strategic
perspectives

Human resources with diverse
viewpoints

Reassignment of human resources
and improvement of efficiency⚫ Get new hires up and running at an⚫ Assign personnel capable ofearly stage; provide additional training
strengthening our global business.
for select groups.
⚫ Pursue DX etc. to achieve labor⚫ Introduce a “post-challenge” systemsavings.
(i.e., make unfilled posts open to applications from employees) .
⚫ Offer overseas training, language
training, and site manager education.

Human resources development

Proactive investment in hiring, development, and training of human resources
Fostering a corporate culture and creating mechanisms that enable diverse human resources to play an active role
Promotion of diverse human resources to management positions(proportion of management positions occupied by diverse human resources)(Current status)⚫ Women⚫ Foreigners⚫ Mid-career recruitment(March 31, 2025)

2.0%
0.7%
30.5%

Aiming to become the leading provider of comfort for all living spaces

7.0%
3.0%
40.0%
27

Capital policy
We will strive to achieve a consolidated dividend payout ratio of around
35% and to pay stable dividends, duly accounting for future business
investment and capital adequacy.

Dividend
policyPayout ratio and dividend trend
40.0%

40

35.0%

31.2%
28.8%

30.0%
25.0%

36.4% 35

33.3%

30.4%

29.5%

24.0%

30

15

20.0%
15.0%
10.0%

11

12

14

16

16

30%⇒35%25
20

19

Review of consolidated dividend payout ratio

19

10
5

FY ended FY ended FY ended FY ended FY ended FY ended FY ending
March
March
March
March
March
March
March
2017
2018
2019
2020
2021
2022
2023

0

* For FY ending March 2023, in accordance with our new
dividend policy, we forecast an annual dividend of 19
yen per share and a payout ratio of 36.4%.

IR-related measures• Enhance sustainability/environmental disclosure.
• Expand methods of dialogue withshareholders/investors.
• Also make disclosures in English.

Aiming to become the leading provider of comfort for all living spaces

28

Disclaimer

Plans, projections, strategies, and other statements that are not historical facts
presented in this document constitute forward-looking statements based on
information available at the time of preparation and involve various risks anduncertainties. Actual results may differ significantly from these projections due tochanges in the business environment and other factors. Furthermore, information
presented in this document concerning companies other than our company or ourgroup companies is based on publicly available information. We do not guarantee
the accuracy of such information.

For inquiries, please contact:
webmaster@rikentechnos.co.jp
Administrative Division / Corporate Planning Division

Aiming to become the leading provider of comfort for all living spaces

29