S.T. Corporation
Medium-Term Management Plan
～SMILE 2027～

May 23, 2024

S.T. Corporation

1. Positioning of medium-term management plan

“SMILE 2027”

Agenda

2. Overview of medium-term management plan
“SMILE 2027”~Basic policy and main business strategies
3. Overview of medium-term management plan
“SMILE 2027”~Financial and non-financial targets

1Positioning of medium-term
management plan “SMILE 2027”2

＜ManagementPhilosophy＞
Our management philosophy established at our founding include elements of innovation, human capital,and sustainability. We believe it exactly indicates what we should be doing now.

Corporate Philosophy /Management Philosophy

Sincerity• To fulfill our mission of giving our service to society andearning society's trust, S.T. constantly works to improve its
products, and to create unique products that our customers
can trust absolutely.
• To achieve the company‘s sustained prosperity, S.T. ensures
its workplaces provide an environment where its employees
can earnestly work with hope and pride.
• Always valuing harmony and courtesy, S.T. strives to be thebest company as regards winning the absolute trust of ourcustomers, other concerned people and society at large.
3＜Past Results＞
However, over the past 20 years, we have been unable to create major hit products, resulting in stagnant
sales and stock prices. To realize strong growth again, it is necessary to change our current approach.
Sales and operating profit margin trends
from March 2000 to the most recent period
Revenue(million)

Stock price trends over the past 10 years (with TOPIX)

Operating profit (%)
12％

60,000
Sales growth has been stagnant for about 20 years

11％
10％

50,0009％8％40,0007％
6％30,0005％
4％

20,000

3％
2％

10,00002000/3
01/3
02/3
03/3
04/3
05/3
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
20/3
21/3
22/3
23/3
24/3

1％
0％

4

＜Purpose of the Reborn S.T.
Corporation＞
We have established a purpose newly to clarify our mission of creating a society where people in theworld can live with smiles. We are confident that achieving purpose and ideal state will lead to strong
growth.

Our Purpose

Ideal statein 10 yearsIdeas to touch the heart
for moments with smiles
From a daily necessities manufacturer
to a wellness company

Under our medium to long term growth theme, “Kaori * × Wellness × Global,”
we will go beyond the field of daily necessities to provide products andservices that respond to the values of all people, such as
health-oriented, natural-oriented, and sustainability-oriented, thereby helping
all stakeholders lead healthy, smiling, and fulfilling lives.
* : “Kaori” means Fragrance5

＜Toward the Realization ofour purpose＞
We aim to achieve strong growth again by executing three axes of reform to create new value for theexpanding wellness market by break through the existing wall of daily necessities and channels.

Break through “Wall of Daily Necessities
Manufacturer” and strong re-growth
D2C
B2B
Specialty
shop

Concentrated
investment inpeople, channel
and technology

Toward the Expanding
Wellness Market【Transformation of the value provided by S.T. 】
Elimination of daily “inconvenience”

Peaceful, Healthy Life
“With a Smile“Three Axes of Reform

ChannelElimination ofdaily frustrations

Wall of DailyNecessities
Manufacturer

Value Provided

Reflecting Customer
Review

Activate Employees
and Organizations

User board system toreflect customers’
review

DX and AI to Improve
Productivity / CreateInnovation☆Customer
satisfaction survey☆ Labor productivity
per capita

Trust-Building
Technology
Advancing Aroma
Tech from eliminating
frustrations toWellness☆Intellectual
Property & PatentsCount6

＜Toward Ideal stateof 10 years later＞
We will achieve strong re-growth in three stages of steps. In "SMILE 2027," focuses on re-growth,
especially expanding the foundation enables us to compete in the global market

2nd Stage

1st Stage

3rd StageSMILE 2027

SMILE 2030

SMILE 2033

STEP1

STEP２

STEP3

From Stagnation toGrowth Trajectory① Creating Value throughKaori *× Wellness② Well-balanced business PFstrategy③ Strengthen foundation tosupport sustainable growth④ Trial new business models

Accelerate growththrough aggressiveinvestment• Active investment innew business models
and Overseas• Social Issues Solution
Business

Leap onthe Global Stage• New business model
earnings expansion• Improve profitability ofoverseas• Application andconversion of newmodels

Improving value creation throughtrust-building technology
Step up through M&A
and growth investments
FY2024/3

FY2027/3

FY2030/3* : “Kaori” means Fragrance

FY2033/37

Overview of medium-term

management plan “SMILE 2027”～Basic policy and main business strategies8＜Growth Matrix＞
We classify our businesses into four segments to define strategies and allocate human, material, and financial
resources efficiently, and particularly focus on investing in existing businesses to enhance profitability.
New Technologies
and Products

Existing markets, existing needs

New markets, new needs

Evolution of existing businesses

Generation of new business
Generation new business using CLEAR FOREST
Creation of D2C business
Pilot test of business for solving social issues

Development of Pet-Care into a core business
The Focus of high value-added products and new brandsin Air Care
Investment priority:
High

Investment priority:
MediumOperating income+1.6 billion yen ~Existing technologies
and products

Expansion of existing business

Further strengthening of brand power
Revenue growth through category redefinition
SKU and cost reduction / environmental responsiveness
Investment priority:Low

3-year investment period

Strengthen B2B and overseas

B2B : Shift from Hand Care to ”Kuuki Business”(Air Care)
Overseas : The focus on ASEAN (Thailand)

Operating margin+1pt～

Investment priority:
MediumOperating income+600 million yen ~Strengthening Foundations to Support Sustainable GrowthFinancial
Strategy

Human Resource
Strategy

DX and AI
Utilization

Risk
management

Sustainability

9

＜Evolution ofexisting business＞
We aim to create value supported by our customers in "Kaori*× Wellness". By improving businessefficiency, secure investment resources and strengthen the foundation for sustainable growth.

① Creating Value through “Kaori * × Wellness”: Intensive Investment in Air Care and Pet Care
② Well-balanced business Portfolio strategy: Securing the necessary resources for investment③ Strengthen the foundation for sustainable growth: Clarification human capital and financial strategies* : “Kaori” means Fragrance

10

＜Top Priorities＞
To ensure medium to long term customer support for "Kaori *× Wellness × Global," our primary challenge
is establishing a strong domestic presence and laying the groundwork for global value delivery.

Challenges
surrounding S.T. Corporation

Various impacts on
existing businesses

Top Priority Issues to be resolved◼ Strengthen positioning in thedomestic market➢

Lifestyle Changes

Climate change

Value
Diversification➢➢

Develop new businesses, products and services thatcreate new value
Establish new communication methods with customers
Enhance human resources and financial strategies

Create a foundation to provide value globally* : “Kaori” means Fragrance11

① Creating Value through “Kaori * × Wellness”: Intensive Investment in Air Care and Pet Care

* : “Kaori” means Fragrance12

① Creating value through “Kaori *× Wellness”

Air Care and Pet Care are globally recognized for their strong demand for wellness. With our capabilitiesof technology and channel development, we will create value strongly supported by customers.
S.T. Corporation’s Wellness
Improving mental and physical health of people
by helping them to be "healthy"

Reference：Global Wellness Institute* : “Kaori” means Fragrance13

① Creating value through “Kaori *× Wellness”

We aim to create a new product category beyond "SHOSHURIKI" by adding new wellness-oriented
functions to Air Care, which has evolved from deodorant to aroma, using our “Kaori” * technology.

Evolving Air Care with a Thorough High Value-added Strategy
Increase emotional value and functional value"SHOSHURIKI“
to eliminate worrisome odors
and make you feel comfortable”PREMIUM AROMA”,
a higher grade of quality
aroma

Creation of a new wellnessoriented products category"Deodorant Power
Premium Aroma for Sleep"with S.T. unique “Kaori” *to support a comfortable sleep
technology* : “Kaori” means Fragrance

Expanding globally

14

① Creating value through “Kaori *× Wellness”

We will break out of the boundaries of the conventional Air Care and create new businesses that unleash
the power of aromas, such as solving social issues and “expressing one’s identity with aromas”

Unleashing the power of “Kaori” * through trust-building technologies and ideas
Establishing circular business models to solve wellness issues while living in harmony with nature

Utilizing our technology related toCLEAR FOREST cultivated over many
years for wellness fields

Physical and mental instability(“Yuragi”) of women
Refresh with aroma
The first new business,“Luna Mine”

Using AI to formulate aromas that
express identity“Corporate Fragrance”* : “Kaori” means Fragrance 15

① Creating value through “Kaori *× Wellness”

We believe that Pet’s wellness is the same as owner’s wellness. We will first establish a position in the petcare market by thoroughly pursuing the wellness of cats.

Pet Humanization
We stand by “comfortable and healthy lives of pets and their owners.”

Established a foundation
for cat litter products market

Strengthen lineup ofSpecialized products

Strengthening the support system
for the happiness of cats*Pet-related startup (investment)

16* : “Kaori” means Fragrance

① Creating value through “Kaori *× Wellness”

To gain overwhelming support from customers through Kaori * × Wellness, we will also promote a channel
strategy to strengthen the reach of B2B and overseas markets besides the domestic consumer market.
B2B Business (S.T. PRO CO., LTD. : Air Care)

Overseas (Air Care and Pet Care)

Strengthening direct sales and cultivating
accounts by “Kuuki business”**

Shift from China to ASEAN (Thailand)
Focus on marketing to derive the optimized
solution of product and channel for eachcountry's situation** : “Kuuki” means Air

Directsales

Offices, lodging facilities
hospitals, nursing homes, etc.

Proposal, development, and introductionof unique smells to meet theneeds/situations
Proposal for introduction of commercial
Air Care products (general purpose)
Engage customers directly to understandnew needs and integrate them into ourofferings promptly* : “Kaori” means Fragrance17

② Well-balanced business Portfolio strategy: Securing the necessary resources for investment18

②Well-balanced business Portfolio strategy

To concentrate investment in Air Care and Pet Care, we will enhance cash flow generation capability ofcore businesses and promote restructuring of profit-improving businesses to build a balanced portfolioFocus investment
on strong growth

AIR CareThoroughly strengthen
cash flow generation

CLOTH Care

Identify strategic shiftbased on profitability
and growth potential

THERMAL Care

HOME Care
PET Care

HUMIDTY Care

Hand Care19

②Well-balanced business PF strategy

We will elevate Cloth Care to the next level by highlighting the importance of care of clothing who pauses“the seasonal change of clothing” by offering new solutions to common storage problems.

Responding to theneed for clean storage
Communication tospace by reducing
encourage users whomold and odorshave temporarily
stopped changing
their clothes

Elevate Cloth Care to thenext level20

②Well-balanced business PF strategy

In existing Businesses including Air Care, we will strengthen our brand power to gain more customer loyalty
and we strive for environmental friendliness, cost reduction, and productivity improvement to enhance ourability to generate cash flow.

Furtherstrengthening ofbrand power

Environmental
friendliness and cost
reduction

Productivity improvement
through DX and laborsaving investments

Establishment of newcommunication methods

21

③ Strengthen the foundation for sustainable growth: Clarification human capital and financial strategies

22③Strengthen the foundation to support sustainable growth

By strongly promoting DX to improve labor productivity and creating an environment where all employees
can work together to contribute to customer wellness through the challenge of innovation, we will achieve
improved engagement and sustainable growth.
1. Human resources sought

Human resources who take on the challenge of innovation
2. Improving labor productivity

Improving labor productivity with DX/AI
Creating an environment where people of all ages and genders
can play an active role

Secure and deploy humanresources capable ofinnovation
Human Resource
Development toPromote D&I
Maximize
corporate value
Increased laborproductivity<Operating profit amount per person>

2.8 million yen ⇒FY2023/03

4.8 million yen

Increased Employee
Engagement

FY2027/03
23

③Strengthen the foundation to support sustainable growth

In order to increase corporate value, will strive to improve indicators such as ROE and PBR by improving BSbalance, making investment decisions with an awareness of cost of capital, and improving engagementwith investors and shareholders in our financial strategy.
Components of equity spread-

Clarification of business PF strategy
Considering non-continuous growth investments
including M&A

shareholder
return-Strive to enhance shareholder returns based onstable dividends (DOE 3%)

BS balance
improvement-

Utilize borrowing as necessary when implementing
growth investments such as M&A-

Cost of equity is assumed to be 7%
The hurdle rate for investment decisions is assumed
to be 8-10%-

Improving engagement with investors, shareholders,etc.
Strengthening ESG management

Improved
profitability
Improvementin ROE

Lower costof capital

PolicyCapital cost
assumptions
Non-financial
measures-Measures for realization

Clarification of cash allocation-Strategic investment for growth
Investment to improve productivity

24

③Strengthen the foundation to support sustainable growth

In addition to the operating CF generated during the three-year period of the medium-term management
plan, we will increase corporate value by strategically allocating funds to areas where high added value canbe created, with a view to utilizing cash on hand and borrowing as needed.

Source ofinvestment

Cash allocation policy

Utilization ofborrowing (+α)
Utilization of cashon hand(~3 billion yen)

Policy overview-

Investment to accelerate business growth centered on pet care and aircare fields

Strengthen researchand development-

Strengthen investment in new technology development to improvevalue creation capabilities

Securing anddeveloping humanresources-

Strengthen resource allocation to develop human resources andimprove employee engagement-

Structural reform costs for low-profit businesses, etc.

-

Promote DX investment such as integrated information platform toimprove labor productivity-

Promote capital investment such as labor saving with the aim of
improving productivity and improving safety and quality-Enhance shareholder returns based on stable dividends (DOE 3% as aguideline)

Utilize M&A, etc. necessary fordiscontinuous growth
Investment for
growth in highvalue-addedareas(8 billion yen+α)

Strengthening valuecreation
abilityBusiness portfolio restructuring

Operating CF(11billion yen)

Productivity
improvement
investment(2.5~3.0 billionyen)※The amount in parentheses is the cumulative amount for
the three years from 1978 to 1980.

Promotion of DX
Building a production systemReturns to shareholders(~3 billion yen)25

＜Sustainability response＞
Under the governance structure required of a true public company, we will engage in social andenvironmental initiatives, resolve social issues by contributing to customer wellness, and increasesustainable corporate value.

BusinessSociety

Environment

Shift from existing
businesses to growthbusinesses

Creating an organizationthat can generateinnovation and securing
human resources

Contributing to a
decarbonized society

Governance

Promoting honest and faircorporate governance as atrue public company
Contributing to wellness bystrengthening our ability todevelop products that
resonate with people

Building relationships for asustainable supply chain

Responding to resource
depletion and circular
economy26

Overview of medium-term

management plan “SMILE 2027”~Financial and non-financial targets

27

Financial targets for FY2027

Aim for ROE of 8% in FY2027 through cost-conscious management centered on growth in the pet care andair care businesses.
FY2024FY2027

Revenue

44.5 billion yen

56.6 billion yen+12.1 billion yen(CAGR +8%)

Operatingincome

1.3 billion yen

4.0 billion yen+2.7 billion yen

3.0%

7.1%

+4.1pt

2.6 billion yen

5.5 billion yen+2.9 billion yen

3.9%

8.3%

+4.4ptOperating profit
marginEBITDA

ROE

FY2024 → FY2027

28

FY2027 non-financial targets

Will also strengthen measures in the infrastructure that supports business growth• Climate Change/CO2 (GHG) Emission Reduction Targets： Scope 3 Disclosure• Resource Recycling/Plastic Reduction Targets：Promotion of refill products by major categories※FY2030 Target (Reference)・Eco Mark for Everyone” grant rate for products: 50% or more
・Less than 70% of products only fossil-based virgin plastic used for packaging containers• Improvement of employee satisfaction※Set and achieve targets through engagement surveys◇Feel rewarded for working

71.3% → Target 80％◇Satisfaction with work-life balance

73.3％→Target 80％◇Performance Demonstration Level

81.6％→Target over 85％

・ Ratio of female managers

22.1％→Target 30％
29

Ideas to touch the heartfor moments with smiles

30

がとう・免責文

S.T. Corporation

https://www.st-c.co.jp/【Notes on the business forecasts】 The items included in this material are based on a variety of premises,and do not assure or guarantee that the numerical forecasts and policies herein will be realized.