May 11, 2022
To whom it may concern:

Company name:Name ofrepresentative:

Nippon Sanso Holdings Corporation
Toshihiko Hamada
Representative Director, President CEO(TSE Code: 4091, Prime Market of the TSE)
Takayoshi Umehara
General Manager, Public Relations
Phone: 81-3-5788-8513

Contact person:

Notice of formulation of “NS Vision 2026” medium-term management plan
Nippon Sanso Holdings Corporation (President CEO: Toshihiko Ha mada) announces
today that it has formulated a new medium-term management plan called “NS Vision
2026: Enabling the Future” for the four-year period ending with FYE2026.
1. Background to the formulation of “NS Vision 2026: Enabling the Future”
From FYE2018 to FYE2021, under its previous medium-term management plan
“Ortus Stage 2,” the company achieved several key results, including:• Expanding its presence and advancing its globalization efforts throughacquisitions of European businesses and U.S. HyC O* businesses• Expanding its electronics gas business in East Asia
• Broadening its production capabilities and expanding its business in the U.S.
and Asia
Additionally, in October 2020, the company transitioned to a pure holding company
structure.
Now, as Nippon Sanso Holdings Corporation, the company is guided by its Group
Philosophy, “Proactive. Innovative. Collaborative. Making life better through gastechnology,” and its Group Vision, “We aim to create social value through innovative
gas solutions that increase industrial productivity, enhance human well -being andcontribute to a more sustainable future,” as it operates industrial gas businesses in
31 countries and regions around the world—divided into four major global areas—
along with its Thermos business, which provides products for more enjoyable
lifestyles in over 120 countries around the world.
To help make its Group Vision a reality, the company has now formulated “NSVision 2026: Enabling the Future,” its first medium-term management plan released
after its transition to a pure holding company structure.
*“HyCO” stands for hydrogen (H 2 ) and carbon monoxide (CO), which are separated fromnatural gas and other gases through a technology called Steam Methane Reforming (hereafter“SMR”) and other equipment. The HyCO business provides large-scale supply of H 2 and CO tocustomers in oil refining and petrochemical industries by way of a pipeline.

12. Overview of “NS Vision 2026”“NS Vision 2026” is based on a “Four global regions + Thermos” management
structure. In addition to financial KPIs, it contains new non -financial KPIs as well,and is designed to reinforce and develop the Group ’s comprehensive capabilities
through five focused fields.
(1) Five focused fields① Sustainability Management
 Environment: Focusing on continued reduction of greenhouse gases
emitted as part of the Group’s business activities, broadening the Group’s
environmental contribution product and service offerings, reducing
emission of waste products, and conserving water resources Society: Achieving security and safety for stable supply, increasing trust
in products and services, operating human rights initiatives, and securing
diversity in human resources Governance: Expanding compliance promotion activities and increasing
penetration② Exploring New Businesses Toward Carbon Neutrality
 Providing value through business: Contribution to greenhouse gas
emissions reduction in client industries through environ mental
contribution products and technologies
 Technological development: Initiatives to develop technology for oxygen
combustion, CO 2 recapture, hydrogen provision, and supporting thecreation of a circular economy; coordinated enhancement with strategic
partners
 Improving communication: Improved capabilities for communicatingwith external parties and coordinating internally regarding Groupinitiatives③ Total Electronics
 Relationship of trust with customers: Proposing and providing the quality
and new products and solutions customers demand Improving global customer support capabilities: Enhancement of existing
businesses supplying the electronics industry (electronic materials gas
supply, construction and installation of gas supply equipment andfacilities) in response to growing global demand Strengthening supply chain management: Enhancements from productmanufacturing to inventory management adjoining customer sites④ Operational Excellence Proactive mutual complementation and coordination: Sharing, expanding,and making best use of individual businesses’ history, commercial
practices, and strengths
 Refinement of management resources: Management that builds andrefines competitive superiority in each business’s market⑤ DX Initiatives
 Digital value chain: Advancing business models through digital data
coordination, analysis, and use; creating new business value and client2

experiences to improve client satisfaction, productivity, and employee
satisfaction
 Enhanced IT security: Expanding operational and administrative
structures from a BCP perspective(2) Strategies by Segment (Industrial Gas Businesses)
As well as sharing and addressing the five focused fields described above, theGroup’s four regional industrial gas businesses will address region -specificoperational challenges.
◆ Gas business in Japan: Enhance new products and services forelectronics, and expand gas application solution businesses◆ Gas business in the U.S.: Expand plant network, grow on-site business,
pursue greater business density through distributor M&As
◆ Gas business in Europe: Focus on resilient markets like medicine andfood, invest in acquiring gas applications technology in line with clientneeds, expand business footprint◆ Gas business in Asia & Oceania: Win large-scale onsite projects, expand
ASU capabilities, win HyCO projects, launch new products, and expand
sales area. Additionally, work toward transitioning to a new, agile
operational structure based on four sub-segments: Southeast Asia andIndia, East Asia (Electronics), East Asia (Industrial Gas), and Oceania.
(3) Strategies by segment (Thermos business)
As the Group’s only B2C business, the Thermos business will pursue strategies
including new products, enhancement of its kitchen product line, expansion of
directly operated stores and electronic trading, and initiatives to expand its
presence in overseas markets.
(4) Financial KPIs
In response to the uncertainty in the global economy, revenue and core operating
income are expressed as ranges.
Results
Objectives for
final FY of plan
(FYE2022)(FYE2026)
Revenue (billion JPY)
957.1
975 to 1,0001Core operating income102.7125 to 135(billion JPY)
EBITDA margin 2
20.4%
≥24%
3
Adjusted net D/E ratio
0.94
≤0.74
ROCE after Tax
4.8%≥6%
1. Core operating income: A figure calculated by separating losses and gains arising from
non-recurring factors (non-recurring items) from operating income. “Non-recurring items”
includes structural reform costs (business reduction/withdrawal, special reti rement
payments), losses due to disasters and major accidents, and other items (disposal of idle
properties, etc.).
2. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization ): Income
calculated by adding depreciation expenses and write -offs to core operating income. Interest
3

rates, tax rates, and depreciation expenses differ by country/region, but this indicator showsincome with those differences kept to a minimum.
3. Adjusted net D/E ratio: A ratio serving as an indicator of financial st ability, calculated asfollows: (Net interest-bearing debt – Equity-type debt)/(Parent company shareholders’equity + Equity-type debt).
“Equity-type debt” is the company’s internal term for the 50% of the amount produced byhybrid financing (250 billion JPY) recognized as “capital” by rating agencies.
4. ROCE after Tax (Return on Capital Employed after Tax): An indicator of profitability
calculated as [NOPAT: Core operating income after tax (+ Dividends received)] ((Coreoperating income – Investment gains and losses from equity method included in core
operating income) × (1 – Effective tax rate) + Investment gains and losses from equity
method included in core operating income + Dividends received) / [Capital employed](Interest-bearing debt + Parent company shareholders’ equity).

(5) Non-financial KPIs
Objectives for final FYof plan

Reduction rate of total GHG
emissions 5
GHG reduced emissions throughenvironmental contribution products
offersLost time injury rate (consolidated) 6
Rate of female employees
Rate of female management posts
Rate of receiving compliance training(FYE2026)

Reference:Long-term
objectives(FYE2031)

18%

32%

Lower GHG emissions
through environmental
contribution products
offerings> NSHD Group GHG
emissions
≤1.6
≥22%
≥18%
100%

25%
22%

5. Reductions objectives are set for this year based on the corrected results from FYE2019,
in which the Group’s purchase of its Europe business was completed.
6. Lost time injury rate: An indicator of occupational accident frequency calculated as(Number of employees involved in an accident causing lost time) ÷ (Total work hours) × (1million hours).

4

NIPPON SANSO HOLDINGS

2022/5/11

NIPPON SANSO HOLDINGS CORPORATION

Medium-term Plan Key Strategies (FYE2023 – FYE2026)

Medium-term Management Plan Policy
Medium-term Management Plan Name

Medium-term Management Plan Slogan

We formulated our first medium-term management plan, NS Vision 2026,
after the establishment of Nippon Sanso Holdings in October 2020 with the vision that,“We aim to create social value through innovative gas solutions
that increase industrial productivity, enhance human well-being
and contribute to a more sustainable future.”
Under the four global regions + Thermos business structure,
we established five strategies:
Sustainability Management, Exploring New Business toward Carbon
Neutrality, Total Electronics, Operational Excellence, and DX Initiatives.
We will strengthen the group’ s comprehensive capabilities
and achieve further growth to provide a bright and comfortable future
for people, society, and the Earth.

1

NIPPON SANSO HOLDINGS

2022/5/11

Characteristics of Nippon Sanso Holdings Group
What we are aiming for
Nippon Sanso Holdings Group spreads over 31 countries
and regions around the world
The way of thinking that is important in the group▷▷Safe and reliable supply of industrial gas to all industries
In the thermos business, we propose a comfortableand eco-friendly lifestyle for people and society

What are the characteristics of our system?
Industrial gas is a business located in a consumption area
System to organize operating companies at each pole of the group
4 global regions + Thermos business structure2©2022 NIPPON SANSO Holdings Corporation All rights reserved.

Structure of NS Vision 2026
Focused Fields
of NS Vision 2026

©2022 NIPPON SANSO Holdings Corporation All rights reserved.

Regional
Business Strategy

Numerical Target

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NIPPON SANSO HOLDINGS

2022/5/11

Sustainability Management: Concept
We will strive to engage in dialogue and collaboration with our stakeholders and aim to continuously enhance our corporate value bycontributing to a sustainable society.

Environment

Safety & Quality

HR▷

Resource-recycling society▷

Process safety and security▷▷

Harmonizing with environment▷

Community based▷▷

Reduce environmental impact▷“Selling gas is selling safety”▷

Respect people and their rights
Work worthwhile for eachand every employee

Compliance▷▷

In a sincere and fair manner
International/regional rules
and the laws

Quality management
and assurance

Nippon Sanso Holdings Corporation has signed the United Nations Global Compact (UNGC) advocated by the United Nations andwas registered as a participant on January 18, 2022.

©2022 NIPPON SANSO Holdings Corporation All rights reserved.

4

Exploring New Business toward Carbon Neutrality: Action PlanGaining “quick-win” CN projects▷

Join/Gain CN project in Steel/Glass/Ceramics/Aluminum/non-ferrous market▷

HyCO projects for a hydrogen society with internal training to sales rep

R&D development and strategic partners▷

Join various CN projects and share among the Group▷

Find potential strategic partners▷Put more resources into dedicated R&D themes such as combustion technology etc.

External/Internal communication▷Establish communication platform▷Enhance our presence through proactive efforts such as posting CN activities on SNS©2022 NIPPON SANSO Holdings Corporation All rights reserved.

53

NIPPON SANSO HOLDINGS

2022/5/11

Total Electronics: Action Plan
We have a long history in the semiconductor materials and gas business.

Global supplier in semiconductor ecosystem▷▷

Offering robust/updated quality assurance,
new product and technology solutions
Leverage and enhance our existing group capabilityand solutions

6©2022 NIPPON SANSO Holdings Corporation All rights reserved.

Operational ExcellenceGroup Goals

Action PlanGroup Goals

1Fostering a group-wide productivityimprovement mindset
through Operational Excellence Day events2

Early realization of output by horizontal development
effect ofof overover¥ ●●100million¥ 56billion
of best practices of operating companies

Cost reduction
Cost reduction effectin total
forfor
4 years.
in total
4 years.

3

Promotion of standardization andoptimization of operations
throughout the group by sharing best practices©2022 NIPPON SANSO Holdings Corporation All rights reserved.

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NIPPON SANSO HOLDINGS

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DX Initiatives: Action Plan
1 Focus on Digitization & Digitalization efforts
2 Prioritize the three fieldsCustomer Engagement

Employee Engagement

Operational Excellence

3 Initiatives by regional management
4 DX dedicated organization in the group8©2022 NIPPON SANSO Holdings Corporation All rights reserved.

Targeted Group KPI - Summary
Revenue

Environment

JPY 975-1,000 Billion*

Reduction rate of total GHG emissions (Base year: FYE2019)18% :FYE2026

32% :FYE2031

Core Operating Income
JPY 125-135 Billion*

EBITDA Margin

Financial
KPIs
FYE2026

GHG reduced emissions through environmental contribution products offers
Lower GHG emissions
through environmental contribution
products offerings≥24%

Safety ManagementJapan, the U.S., EU, A&O,
Thermos:

Lost Time Injury Rate

≥17~33%≤1.6
FYE2026

Adjusted net D/E Ratio≤0.7* Due to the uncertainty in theglobal economy, revenue andcore operating income areshown in range.

GHG emission＞ NSHD GroupFYE2026

Group:Compliance

Rate of receiving
compliance training

ROCE

≥6%

©2022 NIPPON SANSO Holdings Corporation All rights reserved.

100%
FYE2026

HR

Rate of female employees

NonFinancial
KPIs≥22% :FYE2026
25% :FYE2031
Rate of female
management posts≥18% :FYE2026
22% :FYE2031

95