May 31, 2022

The Fourth
Mid-term Management Planof the Nihon Parkerizing GroupContentsrd Consolidated
Consolidated
3rd Mid-term Management Plan and the Group’s Strengths
Review of the 3

 Achievement of key financial targets (numerical targets) Review of the 3rd mid-term management plan (key policies) Market outlook and business direction
 Strengths of the Nihon Parkerizing Group

Consolidated
4th Mid-termManagement
PlanPlanthe
4th Consolidated
Mid-term
Management
Positioning of the Group’s the 4th mid-term management plan Overall view of the 4th mid-term management planSpecifying the key issues (materiality) of the Group
Six key issues

Six key issues and its initiatives in the mid-term planBasic policies in the 4th Consolidated mid-term plan
Growth strategies to achieve our Vision2030
Chemicals/processing/equipment businesses Cultivating existing markets and developing new businesses  Expanding global business









Enhancing research and development
Strengthening quality control and quality assurance
Improving profitability of existing businesses
Initiatives for corporate innovation
ESG and SDGs initiatives
Initiatives for achieving carbon neutrality
Development and sale of environmentally friendly products
Capital investment plans
Basic policy on capital and shareholders returns
Consolidated numerical targets

Reference materials
 Financial highlights
 List of main affiliated companies

2Review of the Consolidated 3rd Mid-term Management Planand Strengths of the Nihon Parkerizing Group3

Achievement of Key Financial Targets (Numerical Targets)
While the results for the period ending March 2022 (the final year of the 3rd mid-term management plan)
improved compared to the preceding year, we were not able to achieve the numerical targets due to adverse
effects of factors such as the COVID-19 pandemic, the fall in auto output due to the shortage of semiconductors, the rising prices of raw materials, and Russia’s invasion of Ukraine.
A

B

C

D

C–D

March 2020

March 2021

March 2022

March 2022

ActualActualActualTargetDifferences

119,028

99,918

117,752

133,500-15,748

Operating income

12,601

10,681

13,37019,000-5,630Ordinary income

15,723

14,197

17,00322,000-4,997Sa

Sales
140,000
120,000
100,000
80,00060,00040,000le（Unit: million yen）

売上高
営業利益
経常利益
当期利益
99,79318,046
15,393
10,142

102,514

17,453
14,8509,975

129,207
109,063

17,921
15,766
10,320109,569

18,77916,934
12,228114,840

2014/3

2015/3

2016/32017/3

119,028

117,752

17,984
12,721

15,72317,023
11,4242018/3

2019/317,003
14,19720,00015,00010,681

13,370

9,449

9,999

9,046

2020/32021/3

12,601

30,00025,00020,13020,000035,00099,91820,750

Income2022/3

10,0005,000
04Review of the 3rd Consolidated Mid-term Management Plan (Key Policies)
The business base is halfway to being strengthened. For sustainable growth, it isessential to transform to a leaner corporate structure, develop highly functional,
next-generation high-value-added products and services, expand overseas business,and expand the revenue base by developing new fields.

Results
Growth strategies
to win in global
competition

Optimization ofGroupmanagement
Governanceinnovation

Issues Group collaboration in Vision2030
 Ensured safety and profitability in
COVID-19 pandemic
 Strengthened business ties in Japanand overseas
 Ongoing recruitment of non-Japanesepersonnel

 Develop new markets/fields
 Develop environmentally friendly products
and services
 Improve profitability of existing businesses Enhance quality control system
 Improve productivity of administrative andmanagement work Enhanced structure for supporting
Group companies in Japan andoverseas Build the optimal supply chain
 Review global manufacturing structure Increase personnel exchanges within Group Further improve Group collaboration

 Introduced executive officer system
 Strengthened Group governance andcompliance Build a system for promoting sustainabilityoriented management
 Enhance risk management structure on aGroup level Improve capital efficiency

5Market Outlook and Business Direction
Economic environment
 In the medium to long term, we will face drastic changes in the business environment surrounding our Group due to a sharp
increase in the production of electric vehicles, a fall in vehicles with internal combustion engines, and an increasing number of
new materials as alternatives to steel as society aims for carbon neutrality.

 In addition, the impact of the COVID-19 pandemic is waning, and business results are recovering. However, the businessoutlook remains uncertain due to factors such as the decrease in auto output resulting from a shortage of semiconductors,
supply chain disruptions due to the invasion of Ukraine, the rising price of fuel and raw materials, and the depreciation of theyen.

Social issues
 Global warming
 Environmental
destruction

 Health and welfare Poverty

Changes in the market and technology
 Development of nextgeneration vehicles
 Development of newmaterials that arealternatives to steel

 Development ofalternative technologies
 More stringent
environmental
regulations

Business direction for the GroupWe will strengthen the business fundamentals by cultivating existing fields throughhorizontal deployment, reactivation of existing business, and improving profitability fornow. At the same time, we will develop new markets and fields over the next ten years.
 Develop products and services for growing markets such as electric vehicles, electrical/electronics, and life
sciences Develop/explore new fields outside the auto and steel industries
 Expand global rollout
 Develop products and services that contribute to reducing the environmental load and SDGs
 Further strengthen the management to improve profitability and the corporate structure

6

Strengths of the Nihon Parkerizing Group ❶The Group provides a wide range of products and services to diverse industries

The Nihon Parkerizing Group has enhanced its technical capabilities in the field of metal surface treatments over many
years. Currently, we develop and provide customers with technology that adds a diverse range of functions to the surface of
substrates. For example, they include sliding property, thermal resistance, wear resistance, insulation, conductivity,hydrophilicity, water repellence, heat dissipation, insulation, and joining of dissimilar materials.

Chemicals

Processing

Equipment Paint base Metal rust prevention
 Lubricating coating Rolling oil
 Rust preventive oil Electroless Ni plating Other functional coatingchemicals Conversion coatings
 Salt bath nitriding
 Gas carburizing, carbonitriding
 Gas soft nitriding
 Electroless nickel plating Solid lubricant
 Other processing Pretreatment equipment
 Waste water treatment
equipment Coating equipment and robots
 Paint booths, air makeup
 Powder coating
 Conveyor systems
 Other standard items andconsumables

Aero
space
Auto

Batteries
Electricalappliances

RubberEnergyElectricalmachinery

Brewing

nonferrous
Agricultural
Machinery
MetalsElectronics
Glass

Tools

Steel

Steel
furniture

Machinery

Beveragecans

Building
materials

Chemistry

MedicalFood

Railways
Construction
Machinery7

Strengths of the Nihon Parkerizing Group ❷Founded in 1928, Nihon Parkerizing expanded into Taiwan in 1965 and has sincedeveloped its business globally. It has manufacturing bases in 12 Southeast Asia, China,
Europe, and North America. Our network allows us to meet the needs of our customers
swiftly and efficiently.

Technical
expertise

Wide range of
products and services

Workingclosely
with customers
Always on your side

Globalrollout

Network spanning
12 countries

Utilizing the Group’s capabilities
to provide solutions for social issues
globally
8

The 4th Consolidated Mid-term Management PlanPositioning of the 4th consolidated mid-term management plan
Corporatephilosophy

We are contributing to the effective use of limited resources on planet Earth,creating new value of resources through surface modification of all kinds ofmaterials, preserving the global environment, and realizing an affluent society.

To create new value and contribute to
the creation of a sustainable society
through surface modification technology

Sustainability-oriented
management
Growthstrategies+

Solvingsocialissues+Corporateinnovation

Foundation to March 2022

April 2022 to March 2025

To March 2031

First growth stage
focusing on metal surface treatments

Building a foundation forachieving our Vision2030

Ensure the Group’s continued growththrough solving social issues and gaining
the trust of customers and society
10Overall View of the 4th Consolidated Mid-term Management Plan
The 4th consolidated mid-term management plan specifies the key issues that are apriority for the Group to tackle and establishes a base for realizing our Vision2030
by focusing on growth strategies, solving social issues and corporate innovation.

Corporatephilosophy

Key issues (materiality) for the Nihon Parkerizing GroupThe 4th Consolidated mid-term management plan
Contributing to solvingsocial issues

Growth strategies toachieve our Vision2030

Corporate innovation

11

Specifying the key issues (materiality) of the GroupWe have specified six key issues that are a priority for the Group as we aim to realize asustainable society. The entire Group will promote sustainability-oriented management, actively
seeking solutions for social issues through our business activities.
High value-added products and services
for customers around the world
Ensuring a safe and secure
workplaceCreating a richer society throughsurface modification technology

Creating social value
through businessNihon ParkerizingGroup

日本パーカライジング

Meeting the requirementsof society
Initiatives to ensure
the continuing integrityof the Group

Creating a corporate culture that
respects diverse values andturns them into “strength”
Taking responsibility forcreating a sustainable society

12Six key issues（1/2）
As a specialist in surface modification, we will actively seek solutions to social
issues to create new value and continue to grow and develop together with society.
Key issues (materiality)

1

Creating a richer society throughsurface modification technology●Developing new products and technology that is environmentally friendly

We have been developing new products and services such as various chemicals for electric vehicles and lighter materials. These chemicals do notcontain harmful chemical substances, equipment that reduces the environmental load and low-temperature treatment technologies. We will reduce
the load in our customers' manufacturing processes with the technologies above and contribute to preserving the environment.

●Developing new fields making the most of surface modification technology

By utilizing our technical expertise in surface modification to develop new fields through expanding into non-metal, multi-functional and newmarkets, we will contribute to resolving a wide range of social issues.

●Promoting open innovation

We will promote joint research with various companies and research institutions, academia and government in Japan and overseas to engage intechnical development from a new perspective and create new value.

2 High value-added products and services for customers around the world
We will strengthen our research and development, production and quality control systems, creating a globalorganization that can swiftly supply high added-value products and services that meet the needs of society andcustomers, providing solutions that contribute to solving social issues faced by our customers throughout the world.

3 Ensuring a safe and secure workplace
We will continue to work on minimizing dangerous and hazardous operations in manufacturing and processing processes toimprove safety and engage in safety education and health promotion initiatives to create safe and secure working environments
for all people working in the Group.
13

Six key issues（2/2）
4 Creating a corporate culture that respects diverse values and turns them into strengths●Utilizing diverse human resources

We will realize a workplace that utilizes the talents of all people who work in the Group and createsa workplace where people feel motivated and fulfilled. To achieve the goal above, we will promote
diverse working styles, recruit and train global human resources, and promote the recruitment of
women, people with disabilities, non-Japanese people, mid-career and senior worker.

●Respect for human rights

We continue to respect human rights, establish rules to prohibit discrimination and harassment and build good industrial relations to create a
corporate culture that respects the rights of all people in all countries and regions.

5

Taking responsibility for creating a sustainable society●Building a sustainable supply chain

We will build cooperative relationships with customers and suppliers,
engaging in initiatives to build systems to manage resources, production,and supply to realize a circular society and build a sustainable supply chain.

●Contributing to reducing the environmental load

We will contribute to reducing emissions of CO2 and other greenhouse gases and hazardous chemicals, wastewaterand industrial waste reduction, renewable energy utilization, and other initiatives to reduce the environmental load.

6 Initiatives to ensure the continuing integrity of the Group●Faithful and honest corporate management

To achieve sustainable growth and improve mid to long-term corporate value, we aim to ensure full disclosure of information, including non-financial
information, and good communication with all stakeholders, including shareholders, as part of our transparent management.

●Improving risk management

We will conduct appropriate risk assessments to identify various risks anticipated in business and build a system to manage risks according to risk
level to reduce the risk of accidents and disasters and respond to changes in the business environment.
14

Six key issues and key initiatives in the mid-term management plan
Together the Group will tackle the key issues as we aim for a sustainable society
Key issues (materiality)

Main initiatives in the 4th Group mid-term management plan1Creating a richer society
through surface modification technology

 Development and sales of products to reduce the environmental load
 Development and sales of products for electric vehicles
 Expanding application of surface modification technology into new markets other than the auto and steel
industries

2

High value-added products and services forcustomers around the world

 Research and development in fields other than metal rust prevention treatments
 Development of products and services that contribute to SDGs
 Strengthening quality control and the quality assurance system to ensure the supply of high-quality products
and services

3 Ensuring a safeand secure workplace Safety and environmental initiatives on a Group level Initiatives to eliminate occupational and traffic accidents Eliminating dangerous and hazardous work, and continuously improving the work environmenta corporate culture that respects diverse
4 Creating
values and turns them into strengths

 Recruitment of women, people with disabilities, non-Japanese, mid-career and senior workers
 Increase ratio of women in management
 Establish a working style and workplace environment that enables a diverse workplace to flourish

5 Thorough management of chemical substances in products
 Ensure100% compliancebysupplierswiththeGreenProcurementGuidelines, andcontinuouslyreduceenergy intensity.
 Promotion of initiatives for stable procurement and stable supply through multi-sourcing and business
continuity planning (BCP).

Taking responsibility
for creating a sustainable society

to ensure the continuing integrity
6 Initiativesof the Group Standardization of key Rules at each company to strengthen Group governance Continue Group-wide initiatives on education and awareness of compliance Building a close relationship and collaboration with all stakeholders

Contributing to the achievement of Sustainable Development Goals (SDGs)

15

Basic policy in the 4th Consolidated mid-term management plan
To achieve our Vision2030, the Group will cultivate existing business, develop new
business and expand global business in all segments, work to find solutions toenvironmental problems and other social issues, and increase our corporate value.
Growth strategies
to achieve our Vision2030
 Cultivate existing business Develop new business Expand global business Strengthen research and development
 Strengthen quality control and quality
assurance Improve profitability of existing
business
 Examine potential M&A

Contributing to solving social issues
 Expanding sales of environmentally friendly
products
 Research and development related to SDGs
 Appropriate management of chemical
substances Initiatives to reduce the environmental load
 Respect for human rights

Corporate Innovation
 Strengthening Group governance Promoting diversity
 Developing global human resources
 Digital transformation

16

Growth strategies to achieve our Vision2030/Chemicals segment

Achieve the top share of sales globallyin the surface treatment chemicals market!
Find solutions for environmental issues by improving energy efficiency, developing and commercializing
chemicals that contribute to decarbonizing society, and chemicals that reduce the environmental load, such as
chromium-free chemicals. Develop new businesses globally in various fields such as electrical/electronics,
non-ferrous and life sciences.

 Product development for electric vehicles(Durability, sliding property, improving energy efficiency through insulation, improving functionality)

 Developing new markets other than the auto and steel industries(Electrical/electronics, non-ferrous metals, life sciences, and more) Expanding sales of environmentally friendly products(Chromium-free, phosphorous-free, reducing sludge, reducing load of wastewater treatment) Development and sales of diverse functional coatings other than metal
surface treatment chemicals
 Expanding business in overseas～ Providing surface treatment chemicals, the latest knowhow, and technical support in a variety of industrial fields ～Electronics

Aerospace

Non-Ferrous

Transport
Machinery

Construction
materials

Metal Processing
rust prevention

Steel

Medical17

Growth strategies to achieve our Vision2030/ Processing segment

Gain worldwide recognition
and be the most reliable partner to our customers.
Strengthen ties with mega-suppliers targeting essential parts for electric vehicles (BEV, HEV, PHEV) as
demand will continue to increase in this area, further strengthening business ties in Japan and overseas toreactivate business in existing fields and develop new fields globally to reinforce our business foundation.

 Respond to requirements of next generation automobiles
 Gain orders for key parts for electric vehicles (BEV, HEV and PHEV)(sliding property, insulation, wear resistance, etc.)
 Develop applications for next generation automotive technology(Anti-glare, heat dissipation, dissimilar material joint, etc.)
 Develop new business other than automotive(construction machinery, construction, robots, aerospace, etc.)
 Strengthen sales operations at key overseas bases (Thailand, North America) and gaincustomers other than Japanese companies
 Expand services that reduce the environmental load (low temperature treatments, etc.)
 Reactivate existing fields through lateral deployment and in-house production～ Adding diverse functions to contribute to reducing the environmental load ～Highly efficient
Energy saving
Resource saving
Highly functional
18

Growth strategies to achieve our Vision2030/ Equipment segment

As a general engineering company with our chemicals business,
we provide solutions for customers in various industries,
from automotive to general industry.

We will expand business in the growing overseas markets and develop IoT equipment control systems andenvironmentally friendly products to differentiate ourselves from our competitors and increase profits, building
a foundation for sustainable growth.

 Increase added value through joint selling of equipment and chemicals(Zirconium conversion coating, CHEMICON) Develop and commercialize IoT equipment management systems andenvironmentally friendly products(PARKER LEAPS, DRYCUBE, etc.)
 Expand sales of high value-added products (Ionics products etc.)
 Enhance equipment maintenance business Expand business in growing markets overseas～ Regardless of equipment scale and industrial field, we provide turnkey solutions
required for painting and surface treatments ～Pretreatment

E-coatPainting
robot

Powder coating
equipment

Painting booth
Air makeup unit

Ovens

Conveyorsystems

Wastewater
treatment

Quality andproduction
controlPrefabricated booth
Filters
consumables

19

Cultivating existing markets and developing new fields
Image① Develop products and services for growing fields such as electric vehicles,
electrical/electronics, non-ferrous, and life sciences② Horizontal deployment, reactivating business, expanding overseas

Vision2030
Newbusinesses

Processing

Equipment

ChemicalsNewbusinesses

1
2

Existing
markets

Processing

Equipment

Existing
markets
Chemicals

Maintain existing business20

Expanding global business
Expand business in key markets, including Japan, China, Thailand and North America.
Explore markets and share information to expand in overseas markets
China
Europe Expanding processing
business into Europe Increasing market share inChina Developing demand from
non-Japanese customers

 Expanding local production
 Strengthening technicalsupport system Enhancing support to Group
companies

Japan Expanding sales ofenvironmentally friendly
products

 Developing new businesses Strengthening research anddevelopment

 Increasing Group collaboration

North America
India
 Cultivating existing markets
 Studying new markets andgathering information

Southeast Asia

 Studying market and gather
information with the aim of
expanding the processing
business

 Increasing share in auto market
 Developing demand from nonJapanese customers

 Developing businesses other than
auto and steel
 Strengthening technical support
system21

Strengthening research and development
Promoting R&D to develop new businesses

 Develop environmentally friendly products (chromium-free, phosphorous-free, reducing sludge,
reducing load of wastewater treatment, and more) Develop products and services for EV parts (sliding property, durability, wear resistance, andinsulation to improve energy efficiency) Diversify technical development in fields other than metal corrosion prevention treatments

Function (examples)

Application (examples)

Heat dissipation⇔heat shielding

Engine parts, heat sink, roofing materials

Insulation⇔conductivity

Motor parts, electromagnetic shielding material,
electrical system materials

Adhesion⇔detackification

Rubber, resin-metal composite materials, adhesivematerials, laminates

Hydrophilicity⇔hydrophobic, oilrepellent

Heat exchangers, stain resistant wall materials

Low friction⇔high friction

Power train, clutch, slide rail

Hardening⇔softening

Sliding parts, forging parts

Rust conversion⇔Repair andrustproofing

Weathering steel, repair materials for building
materials

Other

Anti-fingerprint steel sheet

Adding diverse functions toa variety of substrates

CRL expansion plan (opening scheduled for 2024)

Knowledge

Why & What

• Core of a technology-driven company
Seek the reasons why and build original
surface treatment mechanism  Enhancefoundations of research .

Innovation

How to develop• Create new core technologies, expand
composite equipment• Take up the challenge of entering new markets,
introduce facilities and equipment required forparticipation in new business

Collaboration

Who to who

Production

Real to do• Fusion of different technical fields• Collaboration with Group companies andcustomers, joint creation(Introduce joint development space productivity
evaluation equipment）• Predicting risk of defects from lab development
to production patch-up• Prior checks using productivity evaluationequipment online

22

Strengthening quality control and quality assurance
The entire Group will strengthen quality control and quality assurance to provide
products and services that have the trust and satisfaction of our customers.

Chemicals business Promote quality assurance initiatives through the risk management system
 Standardize processes in our factories on a global level Continuously implement quality education such as through Quality
Strengthening Months, etc.
 Strengthen internal audits and training of internal auditors
 Study utilization of IT in quality control, such as by using QR codes, etc.

Processing business Strengthen global quality control system
 Standardize quality control manuals on a global level Further improve quality and eliminate quality risks through change point
management and skill management
 Automate of factory equipment and introduce the latest testing equipment
 Improve equipment maintenance and control system using IT
23

Increasing profitability of existing businesses
We will strengthen the profitability of existing businesses in the mature Japan market.

Chemicals business Review global production system Optimize global supply chain

Equipment business Reduce costs by standardizingwork Improve R&D efficiency byintegrating the R&D center andexperiment center

Processing business Enhance collaboration between
Group companies in Japan andoverseas Automate factories, increase
productivity through IoT

Improving productivity inadministration
 Group-wide initiatives to improveadministrative efficiency, and shift
to high value-added administration
 Improve productivity throughwork style innovation and digitaltransformation24

Initiatives for Corporate Innovation
Strengthen the management foundation to ensure sustainable growth by promoting corporate
innovation throughout the Group, strengthening Group governance, nurturing diverse and global
human resources, and increasing productivity.

Strengthening Group governanceStrengthening compliance and risk management on a Group level
Further increase collaboration and sharing of information within the Group to increase
revenue

Global human resources Personnel exchanges between affiliates in Japan and overseas
 Expansion of overseas training

Diversities
 Recruitment of many nationalities, genderless, mid-career and senior worker employment
 Increase ratio of women in management

Digital transformation
 Establishing IT infrastructure, promoting digitalization, unification of Group systems
 Using IoT in sales, production and quality control
25

ESG and SDGs
As a specialist in the field of surface modifications, we will implement various
initiatives to meet society's expectations.
Environment
 Aim for carbon neutrality (cut power consumption, utilize renewable energy sources, install photovoltatic power generation)
 Develop environmentally friendly products (chromium-free, phosphorous-free, reduced sludge, reduced load ofwastewater treatment) Reduce emission of hazardous substances (consider wastewater treatment and industrial waste disposal)
 Right control of chemical substances Green procurement
 Reduce water consumption

Social Conflict minerals
 Promote diversity (Recruitment of women, people with disabilities, non-Japanese, mid-career, senior workers)
 Develop new technology through industry-academia collaboration
 Create a comfortable working environment Safety and environmental initiatives
 Contribute to local community

Governance Management focusing on capital efficiency, with a mid to long term target ROE of 10％ or greater Build sustainability-oriented systems on a Group level
 Strengthen compliance26

Aiming for Carbon Neutrality
Nihon Parkerizing Group has been working to create a sustainable society since its foundation, under the
corporate philosophy of “contributing to preserve the environment and create a richer society.” In theformulation of our 4th mid-term management plan, we have set the following target for cutting CO2 emissions
to accelerate our environmental initiatives. In this mid-term management plan, in addition to
cutting CO2 emissions in the manufacturing and processing stages, we will expand sales of products(PALLUCID, PULS) that contribute to cutting CO2 on a life-cycle assessment (LCA) base and expand the use ofrenewable energy sources.

Nihon Parkerizing’s target
Aim to achieve carbon neutrality by 2050
Cut CO２ emissions (Scope1+2) by 30% (compared to 2020) by 2030
Note: Cut CO2 emissions by at least 5% (compared to 2020) by the end of the 4th mid-term management planKg

CO2 emissions per unit of sales（kg-CO2/million yen）

700
600
500

552

572

585

2030 ▲30% cut

562

400

409

300

Achievecarbonneutrality

200
100
0

2050

2018

2019

2020

2024

2030

2050

27

Development and sales of environmentally friendly products
Engagement in environmental preservation on a global level is a priority for ourmanagement, and we will work hard to develop environmentally friendly products.
Functional treatment for hot-dip galvanized steel sheet (PALCOAT series)
For application on hot-dip galvanized steel sheet used construction and vehicle
undercarriages that require high corrosion resistanceFunctional treatment for electrogalvanized steel (PALCOAT series)
For application on galvanized steel used for electrical appliances etc.

 Does not contain phosphorous, nickel and manganese. Reduction in heavy metals
compared to zinc phosphating treatment.
 Sludge generated cut to 1/10th or less
 Does not require surface conditioning stage, making the line shorter and cutting
wastewater treatment cost, as well as contributing to a reduction in CO2 emissions on
an LCA base

 Zero waste!!
Environmentally friendly, single
process, roll-on water-based
lubricant Low treatment temperature
contributes to cutting CO2 emissions
in our customers’ manufacturing
processes.
 Cuts CO2 emissions on an LCA base28

Capital Investment Plans
In addition to the usual investments (maintenance/renewal), we anticipate investing an
additional 8,000 to 15,000 million yen per year in equipment and facilities, including the
expansion of the CRL (approx. 6,500 million yen), renewal of aging factories, and updating
and integration of IT systems throughout the Group. (M&A separate)(単位：百万円)

16,000

1st mid-term plan
28,300 million yen

2nd mid-term plan
25,100 million yen

3rd mid-term plan
18,200 million yen（3 year total）（3 year total）（3 year total）

4th mid-term plan
30,000-35,000
million yen（3 year plan）
Image

14,00012,00010,02010,0008,000

10,539
7,933

7,791

8,668

8,536

8,974

6,000

4,742

4,514

2021/32022/3

4,000
2,000
0

2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32023/32024/32025/329

Basic policy on capital and shareholder returns
Capital policy

 Maintain a balanced capital structure, considering capital efficiency and financial soundness
 Set a mid to long term target ROE of 10％ or greater, and focus on capital efficiency in management
 Consider capital investment and M&A with own capital as source of funds.

Shareholder returns

 Increasing shareholder value through stable and continuous dividend payments and the effective useof retained earnings
 Aim for a consolidated payout ratio of around 30%. ( As it is considered that investment funds for
growth and the safety of the financial base have been secured to a certain extent, we will pay
dividends exceeding our target ratio for the time being. ) We will actively buyback shares.

90.00
80.00

60.0%

Transition in dividend amount

52.0%
50.0%

70.00
60.00
50.00
40.00
30.00

30.4%
19.8%

21.9%

30.7%
40.00

23.4%
24.00

26.00

20.00
10.00

11.00

11.00

13.00

14.00

7.50

10.00

10.00

11.00

11.00

12.00

13.00

2016/32017/3

2018/3

2019/32020/３2021/３2022/３

16.50

10.00

9.00

22.00

30.0%

期末配当-記念（円）
期末配当-普通（円）

23.00
2.00

20.00

0.00

20.2%

40.0%

27.00

20.0%

中間配当（円）
配当性向（連結）

10.0%
0.0%
30

Consolidated numerical targets(Unit: million yen)N e tMarch 2022

March 2025

ActualPlan

ChangeS a l e s

117,752

130,000+12,248

Chemicals

46,63156,000+9,369Processing

44,82052,000+7,180Equipment

23,91420,000-3,914

O

r

2,387

2,000

-387

Operating income

13,37016,900+3,530Ordinary income

17,003

19,500+2,497theOperating income
to sales ratio

11.4%

13% or more-

Ordinary income tos a l e s r a t i o

14.4%

15% or more

-

R

5.8%

8-10% or more

-

O

E

31

Reference materials

Financial results highlights(Unit: million yen)

Mar 2014

Mar 2015

Mar 2016

Mar 2017

Mar 2018 Mar 2019

Mar 2020

Net sales

99,793

102,514

109,063

109,569

Operating income

15,393

14,85015,766

Ordinary income

18,046

17,453

Net income attributableto parent company
shareholders

10,142

Operating income to net
sales ratio

Mar 2021 Mar 2022

114,840

129,207

119,028

99,918

117,752

16,934

17,984

17,023

12,601

10,681

13,37017,921

18,77920,75020,13015,723

14,197

17,003

9,975

10,32012,22812,721

11,424

9,449

9,999

9,046

15.4%

14.5%

14.5%

15.5%

15.7%

13.2%

10.6%

10.7%

11.4%

Ordinary income to net
sales ratio

18.1%

17.0%

16.4%

17.1%

18.1%

15.6%

13.2%

14.2%

14.4%

Ordinary income to total
assets ratio

11.5%

9.9%

9.5%

9.7%

10.0%

9.2%

7.2%

6.5%

7.6%

ROE

11.1％

9.4%

8.9%

10.2%

9.7%

8.2%

6.7%

6.8%

5.8%

Shareholders’ equity
ratio

59.5％

61.1%

61.5%

62.5%

62.9%

64.2%

66.1%

68.8%

70.0%

33

Main affiliated companies （As of March 31, 2022）
China

Japan

■ Parker Surface Technologies (Shanghai)■ Parker Engineering (Shanghai)■ Kanigen (Shanghai)■ Guangzhou Parkerizing■ Foshan Parker Surface Modification■ Rizhao Parker Surface Treatment■ Shenyang Parkerizing■ Shanghai Parkerizing■ Wuhan Parkerizing Chemical■ NihonParkerizing■ ParkerEngineering■ ParkerProcessing■ HamamatsuNetsushori Kogyo■ KomatsuParkerizing■ OitaParkerizing■ JapanKanigen■ KyodoYuso■ OzekiKagaku■ HokkaidoParkerizing■ ParkerGikenKogyo■ PaltecTest Panels■ MillionChemicals■ ParkerCorporation■ ParkerNetsushoriKogyo■ Yugen■ GreenTechno

U.S.A
Korea
■ Dae Han Parkerizing■ Parker Trutec■ Parker Trutec MMI■ Parker Engineering America■ Delamin Nitriding Salts U.S.

Belgium■ PI of Europe

India

Taiwan■ Nihon Parkerizing (India)■ Parker Engineering India■ Chung Jih Metal Treatment Chemicals

Philippines

Thailand■ Philippine Parkerizing■ Thai Parkerizing■ PARKER SURFACE TECHNOLOGYASIA PACIFIC CO., LTD.
■ PET Trading■ Parker Engineering (Thailand)■ Kanigen Thailand

Mexico■ Parker Trutec Mexicana

Vietnam■ Vietnam Parkerizing■ Vietnam Parkerizing Hanoi■ Parker Processing Vietnam

Indonesia■ PT Nusantara Parkerizing■ Parker Metal Treatment Indonesia■ Parker Engineering Indonesia

Malaysia■ Nihon Parkerizing Malaysia■ Our company or subsidiary■ Affiliated companies

34

Transforming a diverse rangeof surfaces with chemistry