I am Koji Naito, President and CEO of Ushio.
Today, I would like to explain the USHIO Group's second Medium-Term
Management Plan for the three-year period beginning in FY2023.

0Today I will explain the four items listed here.
First of all, I would like to present our Vision 2030, which is our vision for the
USHIO Group in 2030. I will then review the First Medium-Term Management
Plan, followed by the outline of the Second Medium-Term Management Plan,
which is the new three-year plan, and finally, I will explain our business strategy.
First, let me talk about Vision 2030.

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In 2020, when operating income continued to decline after the Lehman
Brothers collapse, we decided to make a once-in-30-years major change inmanagement direction. The first thing we designed was our Vision, which iswhere we want to be in 2030, 10 years later.
Our vision is to be a light solutions company, by growing financial value by
expanding social value. In other words, we try to achieve sustainable growth bysolving future social issues that lie beyond our customers.
In order to achieve discontinuous evolution toward this vision, we decided tomake a major change in our structure and mindset, shifting from autonomous,
individual-optimized Rempo Management to solidarity-based Rempo
Management that emphasizes the optimization of overall performance.

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At the same time, we set our mission "promote the use of light as illuminationand energy to support human well-being and societal growth”. In order torealize our mission and vision, we need to switch to a value creation flow thatstarts from the search for social issues and then searches for optical technology
to solve them.
To this end, we determined that it was essential to shift our business framework,
which was product-centric to market-centric approach, and in 2019, we clarified
value propositions for each market domain.
However, at the time of the First Medium-Term Management Plan, beforechanging the business framework to a market-centric approach, we thoughtthat the first priority was to change the profit structure, and we decided totackle this issue as another attempt to solidify the foundation.
I will explain the specific results later.

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Next, I will discuss the roadmap to Vision 2030.
We made this roadmap with a backcasting mindset to become a light solutions
company by 2030 and achieve our financial targets of JPY250 billion in net sales,
JPY30 billion or more in operating profit, 12% or more in operating margin, and
10% or more in ROE.
First, in the First Medium-Term Management Plan, we shifted to solidarity-based
Rempo Management and promoted structural reforms as an institution to
improve our constitution, and achieved the establishment of a muscular profit
structure.
We have positioned the next stage, the Second Medium-Term Management Plan,
as a period to cultivate growth. We will establish a structure to provide lightsolutions, cultivate growth businesses, revitalize rebuilding businesses, andprepare new businesses to transform our business portfolio. To achieve thesegoals, we plan to strengthen and expand strategic investments.
The Third Medium-Term Management Plan, which is the final stage of the plan,is positioned as a period for delivering the results of the first and second plans.

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I will review the previous medium-term plan, the First Medium-Term
Management Plan.

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This Medium-Term Management Plan, drafted in 2020, was a period ofreattempt to have solid foundation to move toward Vision 2030. During theperiod of this mid-term plan, the global economy slowed down caused by the
spread of COVID-19, which imposed many restrictions on our business andworking environment. In response to these circumstances, we worked on threestrategies shown here: defensive, offensive and unifying strategies.

7In conclusion, we achieved the targets set forth in the plan: net sales of JPY175
billion, operating profit of JPY15.8 billion, and an operating margin of 9.1%.
See the second graph from the right for the operating margin. The operating
margin, our most important KPI, increased by 4.9 percentage points from 4.2%
in FY 2019, a significant improvement of profitability.

8This is the summary of contributing factors to the operating income of FY2022,
as compared to the result of FY2019. Structural reforms made more progress
than planned, but the impact of parts shortages as a business risk was greaterthan anticipated.

9I will explain the financial results by segment.
I would like to talk about performance by segment. In summary, the Light
Source Business and the Optical Equipment Business achieved their targets bychanging their revenue making structure, but the Imaging Equipment Businessfailed to achieve the goal.
In the light source business, although Care222 and solid-state light sources,
which had been targeted as growth businesses, fell short of the plan, reductionof fixed cost was achieved through aggressive implementation of structuralreforms, and the ambitious target of an operating margin of 14.6% for FY2022
was achieved.
In the optical equipment business, although EUV, also positioned as a growthbusiness, entered an adjustment phase and fell short of the plan, we were able
to properly address demand during the period of market expansion for
lithography equipment, resulting in increased sales. As a result, we achieved an
operating margin of 12.4% in FY2022, also an ambitious target.
On the other hand, in the imaging equipment business, although structuralreforms and other measures were implemented, the long-term effects of parts
shortages offset measures to improve operating efficiency. The operating
margin for FY2022 was negative 1.3%, which leaves us with a challenge.

10With respect to the unifying strategy, we have been reforming governance andleveraging our financial strength to enhance overall performance.
Although there are ongoing issues, we recognize that we generally achieved theobjectives of the first Medium-Term Management Plan. We will continue to workon the overall performance evaluation.

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I will now explain the outline of the new Medium-Term Management Plan.

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The basic policy of the new Medium-Term Management Plan is to cultivate
growth toward the realization of Vision 2030.

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To cultivate growth, Ushio recognizes the following megatrends through 2030 inindustrial processes, visual imaging, and life sciences, the target markets for
Ushio's value proposition.
In the industrial processes market, we expect to see a digitally connectedsociety, manufacturing technology innovation and environmental impact
reductions, while in the visual imaging market, we expect to see a greater
emphasis on well-being and, after stay-at-home during the pandemic,
reevaluation of premium experiences outside homes.
In the life sciences market, we recognize that climate change, food and energy
issues, increasing and aging populations, and other issues continue to be among
the many major social challenges that humanity must solve.

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In the midst of these megatrends surrounding the world, the basic policy of theSecond Medium-Term Management Plan is to build a structure to provide lightsolutions and accelerate growth based on a market-centric approach throughreorganization of business domains and rebuilding our strengths.
In order to achieve this, it is also essential to establish management
infrastructure that supports businesses. We will make strategic investments
including M&A, enhance capital efficiency with a focus on growth investments
and in-house stock investment, and pursue ESG management.

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I will explain the financial targets of the new Medium-Term Management Plan.
EBITDA is added as a new KPI, and is determined as the top priority KPI in thecurrent medium-term plan, in light of the expansion of investments including
M&As as an indicator of profit growth.
In 2025, the final year of the three-year period for cultivating growth, net sales
will be JPY220 billion and EBITDA, the most important KPI will be JPY30 billion.
As an indicator of capital efficiency, we aim to achieve a ROE of 8% or more
and a PBR exceeding 1.0 time.

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Next, I will discuss the details of the reorganization of business domains.
Until now, the business segments were structured based on the product-centric
approach, but from this fiscal year, we have reorganized business domains
based on the market-centric approach.
Specifically, we have the industrial processes, visual imaging, and life sciencesbusinesses. In addition, the photonics area, which is expected to contribute tofuture growth in these three businesses, has been separated into a domain, toquickly establish competitive edge.
We will accelerate the provision of light solutions in these four businesssegments and try to create social value in each of these value-proposition areasof the market.

17Here is the product mix included in the new segments. The light source andequipment businesses in the previous segments will be reorganized by marketcentric segments.

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I would like to explain the significance of business domain reorganization.
We recognize that our approach in the past was centered on selling products,
and that the value we provided was limited to creating customer value.
What we want to do is to transform ourselves from a manufacturer that
responds to customers with product quality and performance to a solutions
company by proposing solutions that include processes and after-sales services,not only to our customers but also to social issues beyond that.

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The process to deliver light solutions requires three steps: promoting R&D,
providing solutions, and developing after-sales support. It is essential to rebuild
strengths at each of these steps.
The capability to control light to maximize the characteristics of light to meetthe needs of our customers. The capability to provide light-based solutions to
identify social issues and propose. And the capability to retain light that keeps
the light solutions we provide to our customers sustainable and stable.
We will keep reinforcing these three strengths. To this end, we will pursue
aggressive alliances and M&A opportunities.

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This page shows our business portfolio until 2030 to accelerate growth throughthe market-centric approach.
Industrial processes will be positioned as a core business to promote stableearnings growth, while Visual Imaging will be positioned as a rebuilding
business within the core business and, as I will explain later, will solidify arevenue making structure by establishing solution platform.
In addition, although the scale and profitability of life sciences are still small in
2023, it is a market with high growth potential, and there are many areas inwhich light can be utilized. We will position it as a development business andprepare so that the business size will be comparable to IP and VI.
In order to realize the portfolio for 2030, we will allocate management
resources appropriately and accelerate growth, while also reviewing ourbusiness portfolio on an ongoing basis.

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I will continue with an explanation of the first of the three pillars of building amanagement infrastructure to support our business, which is theimplementation of strategic investments.
In the Second Medium-Term Management Plan, which is designed to cultivate
growth, we will invest more than JPY40 billion over the next three years forbusiness growth, including M&A. In addition, we will aggressively invest in R&D
and human capital in areas of expected growth and productivity improvement.

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We will also accelerate initiatives and measures to improve corporate value.
Based on the framework shown on the slide, we aim to achieve a PBR of morethan 1.0 time during the current Medium-Term Management Plan period,
through ROE improvement and full-fledged promotion of ESG management.

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First, in order to achieve ROE of 8% or more by 2025, we will work on profit
growth and improvement of equity capital.
We intend to achieve ROE of 8% or more by achieving EBITDA from JPY23.6
billion to JPY30 billion for profit growth and equity capital of around JPY200
billion through large-scale shareholder returns.

24About the EBITDA changes, which indicate profit growth during the period of
the Medium-Term Management Plan, we intend to increase profit by JPY6.4
billion through both business growth and expansion of strategic investmentsthat will prepare for the future.
Business growth will be explained in more detail later.

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Next, I will explain capital allocation.
In order to achieve ROE of 8% or more during the Medium-Term Management
Plan period, we will allocate a large portion of our cash flow from operations,sales of financial assets, and interest-bearing debt during the Medium-Term
Management Plan period to equity investments and growth investments during
these three years.
Shareholder returns are expected to be in the range of JPY70 to JPY90 billion
during the Medium-Term Management Plan period. In the first year, we will buy
back JPY30 billion of our own shares. In addition, more than JPY40 billion will beallocated for strategic investments.

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I will explain the full-fledged ESG management initiatives.
During the first Medium-Term Management Plan, we established five
management focuses for Vision 2030, as materiality. In the Second MediumTerm Management Plan, we will clarify non-financial KPI targets and promote
activities to achieve Vision 2030 on both business growth and ESG efforts.

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Here are the identified focus points, the five management focuses and theirgoals for 2030, and the major KPIs in the Second Medium-Term Management
Plan.
Today, I would like to explain our human capital strategy and corporate
governance among them.

28First, the direction of our human capital strategy is global-based human capitaldevelopment, and cultivating human capital with a broad range of academic andtechnological backgrounds and literacy to promote new value creation. Our
focus includes working environment that values diversity and increases
employee engagement.

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I will explain how we are deepening our governance structure. As shown in thechart here, we have been promoting the strengthening of our governance.
We announced that three changes are planned at the start of the second
Medium-Term Management Plan: the revision of the remuneration for executive
officers, the revision of the stock compensation system, and the appointment ofan outside director as chairman of the board of directors.
We will plan further initiatives to realize our Vision 2030.

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Next, I would like to explain about our business strategies.

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First, let me explain the financial targets by business segments. The new
segment figures for FY2022 are for reference only.
As for the IP business, our target is to achieve an operating margin of 16.7%
for FY2025 in order to actively invest to establish the portfolio we try to realize
in 2030.
While the VI business will be driven by replacement demand for digital cinema
projectors and other factors, the operating margin will be 3.3%, partly due to a
decline in lamp earnings, etc. However, by promoting structural transformation
as a rebuilding business, our target is to achieve an operating margin of 8% ormore by 2030.
The LS business aims to achieve an operating margin of over 11% by 2030, andthe period of the Medium-Term Management Plan through 2025 will be a periodof cultivating growth.
The PHS business aims to achieve an operating margin of 6.9% in 2025 throughsales growth and improved mix and productivity.
From here, I will explain the strategies and actions of each business.

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The first is industrial processes.
We contribute to the realization of a convenient and comfortable society
through innovation in manufacturing and improvement of bottlenecks, with anemphasis on solving problems in the manufacturing processes of our clients andmaintaining the value of the services we provide afterwards.

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During the three-year period, we try to grow our business mainly in thesemiconductor market, which is expected to grow over the medium to longterm, and to generate business opportunities by proposing light-based solutions
in manufacturing processes, including those other than semiconductors.
Although the semiconductor market is temporarily slowing down, growth andexpansion are expected in the mid- to long-term from movements such as IoT
and DX.
The trend toward miniaturization and higher performance in semiconductors isessential, and we expect this trend to continue, with cutting-edge IC package
technology supporting this progress. Under such environment, we have four
action plans shown here.

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The first action plan is to secure earnings with growth products forsemiconductor package market.
The market for cutting-edge IC package substrates is expected to grow over the
medium to long term, but at the same time, the pace of technologicalinnovation is rapid and competition is expected to intensify.
In order to seize the opportunity of this demand expansion, we will continue toincrease production capacity of large field stepper for cutting-edge IC package
substrates and direct imaging lithography systems.
In addition, to maintain our competitive advantage, we are promoting
development based on continued adoption in the next-generation processes. Byleveraging our strengths in both lithography and direct image systems, we will
try to increase efficiency by improving customer proposals and optimizing
resources across the entire back-end lithography business.

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The second is to bolster efforts to expand opportunities for EUV light sources forphoto mask inspection over medium and long terms.
The UV lithography market will continue to expand over the medium to longterm, and the commercialization of 3-nanometer and 2-nanometer node will
progress, but the competitive environment in the light source market will
intensify before the establishment of a mass production system for UV mask
inspection.
Although the growth of UV mask inspection is expected to expand amid theprogress of miniaturization, the main challenge is to meet the market demand
for total costs of ownership.
During the current Medium-Term Management Plan period, we will invest in
development to enhance our competitive advantage from a medium- to longterm perspective, specifically, to achieve performance, cost reductions andstable utilization rates, and to work with new customers.

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Thirdly, in various manufacturing areas such as batteries for Electric Vehicles,
building materials, and printing, we will strengthen the provision of light-based
solutions as process proposals based on the functions of light such as heating,surface modification, and adhesion to meet the growing needs for process
innovation against a background of reduced environmental impact.
Finally, in the lamp domain, mainly UV lamps, stable demand is expected,
especially in the semiconductor market, and we try to address such demand bystrengthening our sales customer service.

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Next is the core and rebuilding business, Visual Imaging.
We will support the generation of special spaces in entertainment spaces suchas movie theaters, theme parks, and international events that provide a
premium scape experience and deliver greater presence. To this end, we will
promote solution proposals that include image, lighting, peripheral systems, andservices, aiming to delight people.

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Since visual imaging left some issues unresolved in the previous Medium-Term
Management Plan, we have positioned it as a rebuilding business in the current
Medium-Term Management Plan, and aim to rebuild its business structure toestablish stable profit base by 2030.
In the business environment, we assume in the post-pandemic society it willlead to greater demand for premium experiences and more sophisticated visual
production needs.
In the cinema market, we forecast steady growth in replacement demand for
digital cinema projectors. On the other hand, risks include the increasing use ofsolid-state light sources for projectors and energy issues such as the rising priceof xenon gas. These risks have been incorporated to a certain extent into ourearnings forecasts.
One of the major themes for rebuilding our business structure is to establish asystem to provide one-stop solutions platform. I will explain the details on thenext page.

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One-stop solutions platform means that we provide one-stop services to ourclients to offer premium experiences to their customers, including experienceand production design, video and lighting equipment, system peripherals andsoftware, and support to maintain and improve the efficiency of light production
even after delivery.
We believe that we can further increase the value of our offerings by leveraging
our expertise in advanced imaging production and adding value to our services
for customers while leveraging our partnerships.

41This page presents cinema business environment.
Since replacement demand of projectors is expected to remain strong toward
2030, we will capture demand by reviewing our product lineup andstrengthening our sales structure.
We will also respond to the needs for unmanned movie theaters and provide
solutions to support efficient operations.

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The general imaging market, including public facilities, live events, and themeparks, is further expanding into applications that require large-scale andcomplex staging, and there is an emphasis on added value that incorporates
new technologies and staging.
Ushio will accelerate the development of solutions by strengthening its display
products in addition to projectors, and by utilizing next-generation transmission
technology and expanding support through networks.

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There are several business risks associated with visual imaging, and we try tominimize the impact of these risks by identifying the degree of impact andimplementing countermeasures from the planning stage.
In particular, during the period of this Medium-Term Management Plan, in
addition to the decrease in demand for lamps due to the shift to solid-state lightsources, the effects of the sharp rise in xenon gas prices are expected to have a
temporary impact on earnings through 2023 and 2024. In response, we will
minimize the impact through collection of used products and promotion of
procurement from more than one source.
In addition, we will continue to promote business promotion emphasizingbalance sheet, which we have been promoting since the previous Medium-Term
Management Plan, and will focus on optimizing inventory by refining
Production/Sales/Inventory plans.

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Next is life sciences, an incubation business domain.
While major social issues at the global level are defined by SDGs and otherinitiatives, Ushio recognizes that there are many issues that can be solved withlight, and that this is an area with great potential for growth.
We will support the health of people and the planet through our optical solution
proposals to combat climate change, contribute to food issues, and extend
healthy lifespans.

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We view life sciences as a business that we will incubate from a long-term
perspective.
In order to grow it as a business comparable to IP and VI by 2030, the periodof this Medium-Term Management Plan will be a period for selecting promisingbusiness themes that allow us to propose solutions based on USHIO's opticaltechnology to the three social issues I mentioned earlier, and to prepare for its
growth.
We try to expand business generation from a medium- to long-term perspective
by investing in partnerships, including M&A, for resources, sales channels, andperipheral technologies required for light solutions proposals, such as specialized
human capital.

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In addition to the current business domain of Care222, a technology fordisinfection and virus inactivation, and environmental hygiene solutions utilizing
light deodorization and toxic substance removal technologies, as well as thehealthcare field such as ultraviolet light therapy, the creation of new businesses
will be a major challenge in this path.
To this end, LS Business Division and Business Generation Division will work
together to accelerate generation. The policy for business generation will be
explained later.

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Finally, there is Photonics Solutions, which is a reinforcement and rebuilding
project.
The photonics market, including solid-state light sources, is expected to grow at
a rate of 7 to 11% per year as its characteristics, improvements, andadvancements expand its range of applications. As described in the needs of the
focus markets, the three markets have very high growth potential, including
digital data processing needs for manufacturing, the growing use of personaluse devices, and telemedicine.
We will establish a niche top position by selecting niche and growth potential
applications in the three markets and co-creating value from the development
stage with our advanced customers as we control our advantage light and add
high value like module and sub-system to required quality.

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I will explain our policy on business generation.
Through an ongoing organizational approach with a realistic view of the future,
we will generate and provide sustainable value by promoting innovation to solve
social issues.
As part of this structure, we will accelerate business generation by integrating
the three functions of R&D, marketing, and intellectual property.

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We will develop an organization and human capital that can autonomously
rotate the cycle of business generation and make business generation
sustainable. These are promising candidates as listed here, and we will monitor
and nurture them closely.

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Finally, I would like to summarize our business strategies.
By focusing on market-centric business portfolio reform and shifting from selling
products to proposing solutions, and by placing emphasis on value, we will try
to achieve growth in our core businesses of industrial process and visual
imaging. In life sciences and photonics solutions businesses, we will seize
opportunities in growth markets and create, nurture, and evaluate businesses,
including inorganic businesses, in order to achieve sustainable growth as a lightsolutions company looking to 2030 and beyond.
That is all from me. Thank you very much for your attention.

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