FY2022-2024
Mid-term Business Plan
“Value Creation 2024”

March 28, 2022
PUNCH INDUSTRY CO., LTD.
(Security Code: 6165)

Contents➢Value Creation 2020 Plus Figures and Summary P.02
➢Top Message andPolicies of Value Creation 2024

P.04

➢Value Creation 2024 Management Targets

P. 20◆ In this document, Value Creation is referred to as "VC.”◆ “Net income” refers to “net income attributable to owners of parent.”◆ All figures for the fiscal year ended March 31, 2022 are forecasts, as they are prior
to the announcement of the financial results.

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1

VC2020 Plus Management Figures“VC2020 Plus” covers FY2020 and FY2021 (fiscal years ended March 31, 2021 and March 31, 2022)

450(Unit: Billion JPY)
400

Sales
34.3

350
300
250
200
150

41.0

0.7

36.6

35.3
2.8

29.4
1.1

36.7

1.7

1.9

Operating profit
39.3

40.9

1.9

50
32.4

2.5

70

3.0
30

1.6
0.8

1.1

1.3

1.2

1.7

2.0

0.9

10

0.4

-10

Net income

-30

100
50

-3.4

0
FY14.3

FY15.3

VC15

FY16.3

FY17.3

FY18.3

FY19.3

FY20.3

VC2020All Rights Reserved. Copyright ©2011-2012 PUNCH INDUSTRY CO.,LTD.

-50
FY21.3

FY22.3

Plus
2

VC2020 Plus Summary
In “VC2020 Plus” the Company recorded its highest profit since listing and achieved its management targets.

Establishment of 5-polesales system

Enhance customer-focused◎ Sales growth with the recovery from COVID-19, across China,
Southeast Asia, U.S.A, Europe and Other regions◎ Japan continues to struggle but shows signs of recovery◎ Implemented the transition of employees from manufacturing to sales,

marketingalthough securing customer visits has been an issue due to COVID-19

capabilities◎ Expansion of sales for medical and mask-related items

Optimize the global
production systemand strengthen R&D
Working-style reforms
and human resource
development◎ Undertook the transfer of finished products to the Vietnam factory tostabilize production◎ Steady progress on R&D projects to be undertaken in the next Midterm Business Plan (VC2024)◎ Achieved promotion of diverse working styles through the promotion ofworking from home, etc.
◎ Promoting women’s empowerment and improving employee
engagement, etc.
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3

Top Message “Our Ideal State”

Automation and labor-saving demand as the new growth engine～ Always be the “customer’s first choice” ～Responding to the growing demand for automationand labor saving at manufacturing sites with“‘special order products’ in the FA field”*FA refers to Factory Automation.

Through the continuous development of newtechnologies and services, we will establish a firm
position in the mold and die components business
Enhancing corporate value through SDGs and ESG
solutions to social issues

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4

Priority Initiatives for VC2024
Strengthening ourmanagement foundations

Expansion of new andexisting businesses■ Expanding sales of “special order products” in FA■ Enhancing customer service for ordering system■ Expanding sales network outside Japan and China■ Global sourcing

Priority
initiatives

Strengthening the
production system■ Development of the Group’s production system■ Productivity improvement through automation, laborsaving, etc.

■ P-Bas (new processing method)

Strengthening R&D■ Manufacture and sales of products other than moldand die components■ Strengthening the aerospace field
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Expand Sales of “Special Order Products” in the FA Field
Expanding sales of “special order products” in the FA field by utilizing our expertise in the expanding FA market.
■ Market size of the domestic robotics industry ◼ The future market for the robotics industry is

predicted to grow to 9.7 trillion yen by 2035

(Unit: Billion JPY)

9,708.0

100,000

Services

90,000Agriculture, forestry and fisheries

80,000

Robotics
Manufacturing◼ In the manufacturing sector, which is thefundamental market for us, Punch Group’s
Japan and China operations are strengthening
sales of “special order products” in the FA field

70,00060,000◼ Awareness of external resources such as
business alliances

5,258.0

50,000FA sales

40,0002,853.3

30,00020,00010,0000FY25.3

FY22.3
2.7 bn JPY

1,599.0
1,001.8

1,256.4

1,580.7

2015

2020

2025

2,729.4

5.0 bn JPY

Average growth rate 22.2%

2035

Source: New Energy and Industrial Technology Development Organization (NEDO)All Rights Reserved. Copyright ©2011-2012 PUNCH INDUSTRY CO.,LTD.

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Steps to Expand the FA Field
Applying technological capabilities cultivated through custom-made mold and die components to “special
order products” in the new business FA field➢ Progress to “STEP 2”Business expansion in 4 steps⚫Precision parts, precision jigs
and tools
STEP 1

STEP 2⚫Assembled precision parts⚫Simplified, powered
equipment
STEP 3

STEP 4◼ The Punch Group operates globally ⇒ Many of
our customers’ factories are located all over theworld.

◼ In the ever-expanding FA market, in the future,
expand sales of “special order products” in the
FA field for manufacturing industries other thanthe plastic molds and press dies market.
◼ The Punch Group, with demonstrated strengthin custom-made mold and die components, hasmore than 2,000 processing facilities, which canalso be used for “special order products”
processing in the FA field.

⚫Production line equipment

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Enhancing Customer Service for Ordering System“Improving customer convenience” and enhancing “the customer follow-up system” through refining ordering system,etc.

◼ Refining the current Web ordering system“Punch Net”.
◼ Considering a system that can accept somespecial order products.
Web order rate

FY25.3

FY22.339%

48%*Only in Japan and China*Services launched from January 2022

◼ New service “3D Measurement Partners”
measures product forms, processes andanalyzes the data, investigates the causes ofdefects, and proposes improvement
measures.
◼ Combining expertise cultivated over many
years in the manufacture of mold and die
components, we are now offering this service
to customers who have not yet installed a 3D
scanner or who wish to outsource problem
solving.

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8

Expansion of Sales Network Outside Japan and China
Further “strengthen the 5-pole sales system” implemented in the previous Mid-term Business Plan VC2020 Plus
(Unit: Billion JPY)

Southeast Asia
40
30
20

10

1.7

2.0

FY22.3

FY23.32.6

050
Europe/U.S./Others

FY24.3

FY25.3(Unit: Billion JPY)

30
10
-10

2.7

3.0

FY22.3

FY23.34.0
FY24.3

FY25.3◼ Strengthen sales of electronic devices andsemiconductors◼ Assumes local production for local
consumption utilizing the Vietnam factorySoutheast Asia
FY25.3
FY22.3
2.6 bn JPY
1.7 bn JPY
Average growth rate 14.3%◼ Strengthen sales of medical and other productsin the U.S.
◼ Strengthening relationships with sales agents in
EuropeEurope/U.S./Others FY25.3
FY22.3
4.0 bn JPY
2.6 bn JPY
Average growth rate 14.8%

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9

Global Sourcing
Full utilization of overseas production resources at our own and partner factories◼ Further expansion of production items at theVietnam factory◼ Aiming for sustainable growth of Vietnam
factory

Vietnam factory sales
FY22.3

FY25.3＋35%

Vietnam factory

Overseas factory◼ Effective use of external production resources
overseas◼ Improve the amount of overseas purchases by
the Japan procurement division

Overseas procurement amount
FY22.3

FY25.3＋35%

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10

Development of the Group’s Production System
Improvement of production capacity, technology, and quality at overseas factories and increased
production at domestic factories◼ Capital investment in overseas factories toincrease production◼ Further enhancement of quality improvement
and skill improvement
Malaysia factory

Kitakami factory

Dalian factory

Miyako factory

Overseas factory investment
FY25.3
FY22.30.9
3.0 bn JPY
0.8bn
bn JPYJPY*Cummulative total over 3 years◼ Implement transfer of production items andcapital investment at 4 domestic factories(including group company factories)◼ Increase sales from in-house products toimprove production efficiency.
Japan in-house sales
FY22.3

Hyogo factory

FY25.3＋25%

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11

Productivity Improvement through Automation, Labor Saving, etc.
Improved production efficiency at all 12 Punch Group factories using IT tools◼ Automation and labor saving of in-factory
operations◼ Reduction of failure costs (spoilage expenses)◼ Expansion of production capacity throughcapital investment

China・Punch Industry China(Dalian, Chongqing,
Wafangdian, Wuxi,
Dongguan, Spring)

Malaysia
・Malaysia factoryJapan・Punch Industry Co.,

◼ Strengthening order acquisition by improving
quality and technical capabilities

Ltd. (Kitakami, Miyako,◼ Early response to quotations to secure orders
Hyogo)
・Pintec

Vietnam・Vietnam factory

Production
efficiency rate
FY22.3

FY25.3+ 10%* Production efficiency is calculated by dividing sales from in-houseproducts by headcount of each factory and converting into yen.
* Using the number of personnel involved in production as the
population, differs from consolidated sales divided by consolidated
headcount
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12

Strengthening R&D
Continued development of new technologies for the further growth of the Punch Group➢ Overview of P-Bas (trademark pending)Component
manufacturingin three parts
Bondingcomponentparts
End processing
after bonding➢ Strengthening efforts to develop new bonding
techniques and materials. P-Bas (Punch.
Bonding and sintering): Technology to produce
an ideal cooling circuit by bonding multiple
components machined in sections➢ Outside of P-Bas◼ Started manufacturing and sales of “special
order products” in the FA field other thanmold and die components, and continued
marketing in the future.
◼ Improve the Group’s technological capabilities
by focusing on the aerospace field, which
requires ultra-precision machining.

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13

Strengthening our Management Foundations

Financial strategy⚫ Strengthen “earning power” through ROIC
management⚫ Strengthening of the financial health⚫ Pursuit of optimal capital structure with a focus
on capital cost

Sustainability⚫ Reducing CO2 emissions for decarbonization⚫ Respect for human rights⚫ Strengthening corporate governance⚫Human capital management (human capitaldevelopment and working style reform)

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Sustainable growth

DX promotion⚫ Building new services using IT tools⚫ Business reform through renewal of internal IT
infrastructure⚫ Development of DX personnel

14

DX Promotion
Use of digital technology to address priority initiatives◼ Building new services using IT tools◼ Renewal of internal IT infrastructure◼ Strengthening data maintenance and analysis

Centralized production status monitoring process at each factory◼ Business operation reforms
Fundamental reform of business operations
through automation and labor-saving work
time reductions and the use of IT tools

Quality improvement through 3D measurement data analysis◼ Developing DX personnel to create a common
language for analyzing data items
Securing time for training of DX personnel

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15

Financial Strategy
Strengthen “earning power” through ROIC management, and through growth investment deliver increased
corporate value and stable dividends

NOPAT(Net Operating
Profit After Tax)

Capital cost

◼ Aim to increase corporate value by ensuring
ROIC above cost of capital (WACC) andmaximizing free cash flow.

➢ ROIC
Working capitalInterest-bearing
debt

Fixed assets

Equity capitalUse of funds

Financing

10% and above◼ Achieve medium- to long-term growth by
improving ROE and enhancing shareholders’equity, while maintaining a sound financial
health and striking an optimal balance between
strategic investments for growth and stabledividends.

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16

ROIC Improvement* Support for management innovation projects
Improvement in profitability [after-tax profit improvement]
Sales expansion

Strengthening order acquisition※

New customer development※

Overseas sales expansion

Increase in net operating
profit after tax

Global sourcing
Production efficiency improvement※

Failure cost reduction※

Cost reduction
Operational efficiency improvement ※Improvement in asset efficiency [Improvement of asset turnover ratio]
Timely trade receivable collection

Improvement in working
capital turnover

CCC improvement

Inventory reduction
Appropriate payment due dates

Improvement in fixed asset
turnoverImprovement in tangible fixed asset
turnoverPre-investment checks
Strengthening post-investment
monitoring

Increase in intangible fixed asset
turnoverBusiness reform through IT promotion

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17

Sustainability
Enhancing corporate value through solutions to global environmental and social issues◼ Recognizing that the Punch Group continues tobe affected not only by the businessenvironment but also by the social and global
environment, as shown in the diagram on theleft, and working to enhance corporate value
through the resolution of these issues

Punch
Group
TechnologicalLabor
innovation
shortage
Competition
Poverty/inequality
CirculareconomyGlobalwarming

Business
environment◼ Protecting the global environment throughdecarbonization, waste reduction, reuse, andNoxiousrecycling

Humansubstances
rightsWorking conditions/job satisfaction
SocialBiologicalenvironment
diversity
Global environment◼ Respect the human rights of everyone involvedin the Punch Group and its supply chain◼ Aiming for fair and transparent management
through further strengthening of governanceNumerical targets: under consideration(to be disclosed as soon as formulated)

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Sustainability (Human Capital Management)
Developing the next generation of core personnel, reforming work styles, and improving
employee engagement◼ Covering new hires through to top management,
systematization of next generation core personnel
development system◼ Reduce working hours by improving productivity,and encourage employees to take paid leave◼ Raise the ratio of women in management
positions through training for women leaders, etc.
Total actual work hours
Web-based group discussions

FY22.3

FY25.3
Reduction of 100
hours or more

Working women’s health seminar

Percentage of paid leave taken
FY22.367%

Ratio of female executives
FY22.311%
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FY25.370%
FY25.315%
19

Management Targets for VC2024

00

00

00

1

450

8

50.0

43.5

40.9

39.3

36.6

1.9

35.3
2.8

2.5
0.8

00

Operating profit

Sales

41.0

00

1

(Unit: Billion JPY)

1.3

1.7

32.4

3.0

3.3

4

31
2.1

6

39

1.6

2.0
0.9

5.0

4.0

2

Net income

0

0.4

-2

■ 3-yr cumulative total

00

Capital expenditure 5.0 bn JPY
Depreciation 3.0 bn JPY

-3.4

-4

0

-6
FY17.3

FY18.3

FY19.3

FY20.3

VC2020FY21.3

FY22.3

FY23.3Plus

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FY24.3

FY25.3

VC202420

Numerical Targets for Sales by Region and Industry

00

50

00

“VC2024” covers FY2022 through FY2024 (fiscal600
year ending March 31, 2023 through fiscal year ending March
31, 2025)

550(Unit: Billion JPY)

50

00

50

2.6
1.7

3.0
2.0

4.0
2.6

500
EuropeThe US,
450
andothers

Other

14.0

400
350

25.5

00

(Unit: Billion JPY)

23.7

Southeast
300
Asia

13.0
10.7

250

4.2

00

200

8.0

50

150
China

50

21.0

00

50

14.0

14.8

17.9

100

16.4

5.5
4.4
10.1

8.5

17.6

20.4

Consumerelectronics/
precisionequipment
Electronic
devices/
Semiconductors

500Automobile

Japan 0FY22.3 FY23.3 FY24.3 FY25.3

FY22.3 FY23.3 FY24.3 FY25.3

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21

Timeline for Priority Initiatives (in Order of Slide Presentation)
Policy items

FY22.3

FA salesFY23.3
3.2

Results(Billion JPY)

Results

Results

Results

Results (Increase/decrease %)

－

－

4.0

2.6
－

＋35

－
－

－

0.9

＋35

－

＋25

+3

－

＋10

－

－

11

Reduction in total actual
work hours

Results

▲100

68

－

70

13

－

15

11

Capital investment (inc.
overseas)( Billion JPY)－

67

Ratio of female executives
Results (%)▲30±0Percentage of paid leave
taken
Results (%)

+14

+13

10 and above

Results (hour)+20

FY25.3

ROIC
Results (%)

3.0 (3-year cumulative total)
Results

2.6

FY24.3

Production efficiency
Results－

FY23.3

Japan in-house sales(Increase/decrease %)3.0

Overseas factory
investment(Billion JPY)

48

1.7

Overseas procurement

FY22.3Results

2.0

Vietnam factory sales(Increase/decrease %)

5.0

3.9

Europe/U.S.A./Other sales(Billion JPY)－

Policy Items(Increase/decrease %)4.1

Southeast Asia sales(Billion JPY)

FY25.3

2.7

Web order rate (Japan/China)
Results (%)

FY24.35.0 (3-year cumulative total)

1.1* “Overseas factory investment” and “Capital investment (inc. overseas)” are cumulative figures over three years.
* Figures for FY24.3 are scheduled to be announced on May 2023 after the release of these financial results.
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Reference Materials

Punch Group at a Glance
Establishment

Listing

March 1975
(50th anniversary in 2025)

2012 stock listing2022 Prime Market

Production bases

Japan
4

Overseas8*Share of mold and die components industry (ourestimate)

PUNCH INDUSTRY CO., LTD.

Sales bases
Japan
11

Market share*
World No. 2（Japan No. 2・ China No. 1）

Overseas40

Japan 36%

No. of employees (March 2022)
Japan
1,002

Overseas sales ratio (FY22.3)

Overseas
2,977

Overseas 64%（China 53%）

Corporate GovernanceOutside director ratio 40%(Chairman of the Board of
Directors is an outside director)

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24

Management Structure
Profile of President and Representative Director
Name and date of birth

CareerTetsuji Morikubo

May 2003

Board of Directors

Joined the Company(January 22, 1977)

Feb. 2005

PUNCH INDUSTRY (DALIAN) Co.

Nov. 2012

General Manager, Value Creation
Promotion Office

Apr. 2013

General Manager, Corporate Planning
OfficeApr. 2015

PUNCH INDUSTRY
MALAYSIA SDN. BHD.

May 2016

Executive Officer

Jun. 2018

Director, Senior Executive Officer,
Corporate Strategy

Apr. 2019

Chief Strategy Officer Group Business
Management

Jun. 2019

Representative Director (incumbent)
Executive Vice President

Nov. 2019

President and Chief Executive Officer
in charge of the Punch Industry Group(incumbent)

Directors

Representative Director, President andChief Executive Officer
Chief Executive Officer (CEO)Tetsuji Morikubo

Director, Managing Executive Officer
Chief Operating Officer (COO/Sales)

Yasuhiro Sanada

Director and Senior Executive Officer
Chief Financial Officer (CFO)

Takao Murata

Director and Senior Executive Officer
Chief Operating Officer(COO/Manufacturing)

Akira Takanashi

Director

Susumu Sugita

Outside Director
Chairman of the Board

Yukiko Mitsuhashi

Outside Director

Naruhiko Takatsuji

Director (Audit & Supervisory Board
Member)Minoru Kawano

Directors(Audit &Outside Director (Audit & Supervisory
Supervisory
Board Member)
Board Member)
Outside Director (Audit & Supervisory
Board Member)
Ratio of Outside Directors
4 persons40%

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Yoriatsu Matsue
Tomoo Suzuki

Ratio of Female Directors
1 person
10%

25

Punch Group History
'70
1982

1975
⚫

'80

Establishment, manufacture of drilling pins
for printed circuit boards

⚫

'90

'00

1990

Expansion into plastic mold components(Succeeded in mass production of highspeed steel ejector pins)

⚫

2001

Manufacturing base established in Dalian,
China

⚫

Established sales base in China

1983
Kitakami plant established, started
nationwide sales of mold and die
components
1989⚫ Miyako Punch Industry (now Miyako factory)
established
⚫

'10
2010
⚫

Established sales base in India

2013
⚫

⚫

Panther Sdn Bhd (now Malaysia Punch)becomes a group company
Mid-term Business Plan
“Value Creation 15” started

2014⚫

Listed on the First Section of the Tokyo
Stock Exchange (Listed on the Second
Section of the Tokyo Stock Exchange in
2012)

'20
2016
⚫

2020

Vietnam factory begins full-scale
operations⚫

Sales base established in Illinois, U.S.A.

⚫

Mid-term Business Plan
“Value Creation 2020” started⚫
⚫

Start of Mid-term Business Plan “Value Creation 2020 Plus”
Launch of Management Innovation Project2022⚫ Start of Mid-term Business Plan “Value Creation 2024”⚫ Moved to the Tokyo Stock Exchange Prime Market

2018⚫

Expansion of manufacturing base in
Dalian, China

2019⚫

Started the second phase of the Vietnam
factory

2015⚫

Manufacturing base established in
Vietnam⚫

40th anniversary

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26

Description of the Business
Manufacture and sale of a wide variety of precision mold and die components that are indispensable to theconstruction of molds. The “behind-the-scenes expertise” that enriches your life.

For example, parts like these

Molds and dies

Components

Products

Molds and dies madeof metal to makecomponents quickly,
uniformly, and in large
quantities

Parts needed to form a
product

Various products we
use in our daily lives,
such as automobiles
and consumer
electronics

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27

Punch Group’s Core Products
Plastic mold and die components such as injection molding dies and press die components suchas stamping dies, for a wide range of customers spanning upstream to downstream
manufacturing

Plastic mold and die components

Press die components

Plastic molds are used in the manufacture of many plastic products, including
the exteriors of smartphones and digital cameras. Products are made by
injecting heated, molten plastic resin into a mold mounted on an injection
molding machine, cooling, and solidifying. The Punch Group manufactures andsells the components that make up these molds and dies.

A die is mounted on a press machine (a machine that moves up and down), a
metal sheet is placed between the upper and lower dies, and the pressmachine is operated to produce a product molded by the die. The Punch
Group manufactures and sells the components that make up these molds anddies.

Core productCore productEjector pin

Punch

This part (extrusion pin) is used toseparate the injection-molded productfrom the mold itself and eject it.

Typical parts incorporated in press dies,
these parts are used to make holes inmetal plates and transfer shapes. Our
company name comes from this punch.

Core productCore productCore pin

Holder guide posts

Used to form the product section, theshape of the core pin is transferred. The
core pin forms a void in the productsection or engraving on the productsection.

These parts are used to maintain thecorrect relationship between the upperand lower molds.

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28

Punch Group Strengths and Network
Extensive lineup of versatile catalog products and special order products to meet custom needs
supporting manufacturing across the world
Strengths of the Punch Group

Punch Group Network
Group companies

Sales offices
China• Punch (Dalian) (Dalian Factory, Chongqing Factory)• Wafangdian Punch• Wuxi Punch• Dongguan Punch• Panqi Spring

Providing high customer satisfaction
Catalog products

Special order products

Extensive lineup of
highly versatile standard products

Timely,precisesolutions

Capable of responding
flexibly to custom needs
U.K.
Germany
Korea

A one-stop
production systemwith 2,000 units ofequipment and wideranging support

A customeroriented businessstructure
meticulous, responsive
and capable

High technicalcapabilities
Expertise cultivatedsince the Company’s
founding, and untiring
research anddevelopment

U.S.A.
• Punch Industry U.S.A.

TurkeyThailandTaiwanPhilippines

India• India Punch

Japan• Punch Industry(Kitakami Factory, Miyako Factory,
Hyogo Factory)• Pintec

Australia
Malaysia• Malaysia Punch

Singapore• Singapore Punch

Vietnam• Vietnam Punch• Vietnam Factory

Indonesia• Indonesia Punch

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29

Toward Increasing the Market Capitalization of Tradable Shares
Through increases in the share price and market capitalization, measures to enhance corporate
value, we aim to achieve and further increase market capitalization of tradable shares of 10 bn
JPY, which is the standard for maintaining a Prime Market listing.
Challenges to increasing the market capitalization of tradable
sharesBasic policy for addressing the challenges

Increase in share price through measures toenhance corporate value

Implement capital investment for growth

Strengthen “earning power” through ROIC management
Optimal balance between growth investments and stabledividends

Improving business performance and changing work styles
through DX promotion
Sustained development of new technologies and products

Market capitalization

Ratio of tradable shares

Total market capitalizationof tradable shares

Result of the primary
determination(as of June 30, 2021)

13.4 bn JPY

65.3%

8.78 bn JPY

VC2024
End assumption

Further increase

73.9%1

10 bn JPY or more

1.

Assuming that 2,500,000 new shares were issued through the issuance of the 4th series of share acquisition rights with an exercise price amendment clause by way of third-party allotment andthat all of them were tradable shares

All Rights Reserved. Copyright ©2011-2012 PUNCH INDUSTRY CO.,LTD.

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IR & PR Division, Corporate Strategy Planning Office, PUNCH INDUSTRY CO., LTD. E-mail: info-corp@punch.co.jp
Disclaimer Regarding Forward-Looking Statements
This report contains forward-looking statements regarding Punch Industry’s future plans, strategies, and forecasts. Such statements are not based on
historical fact, but are expectations, estimates, and forecasts based on information currently available. These expectations, estimates, and forecasts
involve many potential risks and uncertainties, including changes to the economy, exchange rate variations, changes in the competitive environment,
the outcome of current or future litigation, or the continued usefulness of capital procurement.
As a result, actual business results may differ materially from these statements. Accordingly, investors are cautioned not to place undue reliance on
forward-looking statements. Punch Industry is not obliged to amend these forward-looking statements based on new information or future events.