Nittobo GroupNew Medium-Term Management Plan(FY2024-2027）

Nittobo
May 2024

Review of the Previous MediumTerm Management Plan*(FY2021–2023)* formerly called the Mid-Term Business Plan
Copyright (C) NITTO BOSEKI CO., LTD. All Rights ReservedKey Initiatives for the Previous MediumTerm Management Plan (FY2021–2023)
We steadily implemented four key initiatives, including strategic investment for future
growth, and management foundation reinforcement for the Group as a whole
Growth Strategy Implementation

Management Foundation Reinforcement

・ Actively invested in growth areas
Constructed new Special Glass factory in Taiwan
Constructed new plant for goat-derived antiserain California, USA
Constructed new factory for in vitro diagnostic
reagents in Koriyama City, Fukushima Prefecture
・ Strengthened development of next-generation
low-dielectric glass

・ Improved business portfolio (transfer of thebeverage business)
・ Implemented structural reforms in the textilebusiness・ Streamlined assets through transfer of noncurrent assets
Sold site of former golf driving range
・ Started to introduce DX to improve operational
efficiency and productivity of technology
development/production technology

Action for Environment Issues

Human Resources Development

・ Established a Sustainability Committee
・ Set targets for/promoted reductions in CO2emissions (carbon neutrality)
Introduced internal carbon pricing
・ Endorsed TCFD recommendations
・ Investigated the use of recycled raw
materials
・ Calculated carbon footprint of products (CFP)・ Built system to foster human resources forinnovation (professional/global talent)・ Established support systems forchildcare/nursing care・ Increased ratio of female managers
・ Workstyle reforms (systemization of workingfrom home)
・ Operational reforms (promotion of paperlesswork, etc.)
・ Improved employee engagement

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

3Quantitative Targets and Results for the Previous
Medium-Term Management Plan (FY2021–2023)
Despite soaring demand for Special Glass in the final year of the Medium-Term
Management Plan, earnings fell short of final target
The financial soundness of the Group was maintained

2020年度FY2020
Actual実績

2023年度FY2023
Actual実績

2023年度FY2023
PlanTarget
中計目標

Netsales
売上高

78.7
billion yen
787億円

93.3933億円
billion yen

100.0billion yen
1,000億円

Operatingprofit
営業利益

6.0 60億円billion yen

8.4 84億円
billion yen

14.0
billion yen
140億円

EBITDAEBITDA(EBITDA margin)（EBITDAマージン）

12.3123億円
billion yen
(16%)
（16％）

15.6156億円
billion yen
(17%)
（17％）

250億円
25.0
billion yen
(25%)
（25％）

ROE

8.4%

6.6%

10%

Equity ratio
自己資本比率

53.7%

55.7%

55%

Capital investment

56.8568億円
billion yen

29.5295億円
billion yen

45.0
billion yen
450億円

4 years cumulative
4年累計(M&A含む)

3年累計
3 years
cumulative

3年累計
3 years
cumulative

2.9%

3.8%

6%

0.45 X

0.45 X

0.4 X

設備投資(検収額)(inspected basis)(including M&A)

ROIC
ROIC
D/Eratio
D/EレシオCopyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

4Operating Profit Change Analysis (FY2020 vs FY2023)
Increases in labor costs and soaring electricity and fuel costs had anegative impact from 2021 onward, but rising sales of high-value-added
products such as Special Glass and in vitro diagnostic reagents resulted（Billions of yen）
in profit growth in the final year
8.4
Commodity product sales
Cost down, sales price, etc. ↗

6.0

Labor cost
R&D expenses

3.5Special Glass↗
In vitro diagnostic reagents ↗
Ultrafine yarn, ultra-thin cloth↘
Flat fiber
↘

(2.3)
(0.9)

4.7

(5.4)

2.8

FY20

Reinforcement Depreciation
cost
cost

Raw
material,electric,
fuel cost

FOREX
difference

Added value
products
sales

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

OthersFY235

New Medium-Term Management Plan
(FY2024-2027)

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

Nittobo Group’s Corporate Philosophy andBasic Policies
Corporate Philosophy and basic policies are unchanging
We will forge ahead to realize the Big VISION 2030 determined at the time the previous Mid-TermBusiness Plan was formulated
The Nittobo Group will enhance its value to society as a corporate group byCorporate
helping to create healthy and more comfortable lifestyles, and in so doing
Philosophy
continue contributing to the realization of a more prosperous world.

Nittobo
Declaration

Nittobo Group aims to be the “Best Partner” for society.
Proud that customers trust Nittobo

VisionNittobo Group’s Vision in 2030: Big VISION 2030

We aspire to be a company that gains the trust of all
stakeholders in the pursuit of client satisfaction.
As a corporate group that continues to create global No. 1 niche businesses,
we aspire to contribute to “Environment/Energy,” ”Digital Society,” and”Health/Security/Safety” for realizing a sustainable society

Nittobo Group as Global Niche No. 1
Pinpoint response to needs: we extract the full potential of ideas to uncover latent demand
Development of products indispensable to society:we leverage our technological strengths to also take on the challenge of new fields
We establish a unique positions in product development and deepen our relationships with global clients
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved7

2 Key Points: the New Medium-Term Management Plan
Steadily harvesting the fruits of investment and promoting existing growthstrategies to realize Big VISION 2030
We will steadily harvest the fruits of investments in Special Glass and the medical field
made during the previous Medium-Term Management Plan, and continue to actively
invest for growth to enable us to respond to rapidly expanding new markets

Building new pillars of revenue for the next 100 years beyond 2030
・ Building additional pillars of revenue to follow
Special Glass and medical
・ Unified management of product development,
manufacturing and sales, strengthening ofcustomer perspective
Up to FY2023
Glass Fiber Division
MFG

Medical Division

MFG

Launch of new structure

From April 1, 2024 onward
SALES

SALES

Electronic Materials
Business Division

ProductDevelopment

MFG

SALES

Medical Business Division

ProductDevelopment

MFG

SALES

Composite Materials
Business Division

Product
Development

MFG

SALES

Materials Solution
Business Division

ProductDevelopment

MFG

SALES

Product
Development

MFG

SALES

Basic & Production
Technology ResearchDX

Environmental
Technology

Textile Division

MFG

SALES

Insulation Materials
Business Division

Research & DevelopmentHeadquarters

R&DProductDevelopment

TechnologyDevelopment DivisionCorporate Management DivisionCorporate ManagementDivision

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved8Basic Policy on Divisional Strategy
Taking into account the above 2 key points, each business division will tackle the new MediumTerm Management Plan based on the following approaches
This will be a launching four-year period to sustain stable growth beyond Big VISION 2030

Electronic Materials

Medical•Establish supply systems in areas where market growth can be expected, andcontinue active program of capital investment•In preparation for achieving the targets for FY2030 to realize Big VISION 2030, aimfor steady contributions to earnings from harvesting of previous investments and thefruition of newly developed products

Composite Materials•Materials Solution

Insulation Materials

While digging more deeply in existing business areas, looking ahead to FY2030 andbeyond, we will embrace new ideas to explore future businesses without beingbound by our bundle of existing operations, such as glass fiber and textiles

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved9Company-Wide Quantitative Targets (FY2024-2027)
Net sales target(FY2027)135.0 billion yen

Operating profit target(FY2027)

20.0 billion yen

EBITDA target (FY2027)

32.0 billion yen

ROE

8％ or more (a level consistently exceeding cost of capital)

ROIC

A level exceeding WACC

Capital investment(4 years cumulative)

Approximately 80.0 billion yen

R&D expenses(4 years cumulative)

Approximately 15.0 billion yen

Net D/E ratio

0.4× or lower

Equity ratio

55% or more

Shareholder ReturnPolicy

Our basic policy is to pay a dividend of not less than 55 yen
per share, targeting a dividend payout ratio of 30% ofsteady earnings

Establishing ofincentives for
employees

When operating profit targets are hit on a single-yearbasis, a third bonus will be paid
An additional 0.5 months’ worth will be paid at 12.5 billion
yen, increasing by 0.5 months for every additional 2.5billion yen thereafter
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

10Reference: “Action to implement management that is
conscious of cost of capital and stock price”
In addition to steadily executing the new Medium-Term Management Plan, we will continue
efforts to enhance corporate value

Improve ROE

Appropriate PER level

During the previous Medium-Term plan,characterized by upfront growth investments
centered on Special Glass, ROE trended below
the cost of equity (see below), but by harvesting
the fruits of those upfront investments during thenew Medium-Term Management Plan andfurther promoting growth investments, we aim toachieve a ROE that is consistently above the costof equity.

As well as continuing to rigorously selectinvestments in order to improve the profitabilityof the portfolio, we will promote sustainability
management through strengthened governance,
environmental initiatives, improvements toworkstyles, and other measures.
Through timely and appropriate IR activities, wewill strengthen dialogue with shareholders,potential investors, and others.

Performance during the previous Medium-Term Management Plan
ROIC, WACC

ROE, Cost of equity
10.0%

10.0%

5.0%

5.0%
0.0%

0.0%
FY20

ROE

FY21

FY22

FY23

Cost of equity (rE)FY20

FY21ROICFY22WACCFY2311Issues and Initiativesby Business Division

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

Electronic Materials
VisionPromote the shift to next-generation products and aim for further
improvements in net sales and profitability
Issues and initiatives

1. Harvesting fruits of investments executed during previous MediumTerm Management Plan
・ Steadily bring newly expanded facilities on line and respond to recent
healthy demand.

2. Strengthen measures to address growing demand for Special Glass・ Looking ahead to the future, move forward with further investments toexpand production of Special Glass in Japan and overseas.
3. Strengthen marketing activities and research and development ofnext-generation Special Glass・ Having identified customer needs, develop next-generation Special
Glass (NEZ, V, DXII), and proceed to mass production.
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

13MedicalVision

Become world No.1 in field of plasma proteins and bones
Issues and initiatives

1. Boost global expansion
・ Expand sales in global markets
・ Strengthen cost competitiveness2. Accelerate research and development, and promote new productdevelopment
・ Develop and expand sales of highly original reagents・ Accelerate research and development through the use of DX
3. Strengthen manufacturing and sales at Nittobo America Inc.
・ Maximize profit by pursuing a structure in Japan and the United States for theintegrated production and supply of antigens, antibodies, antisera, and reagents・ Further expand sales of antisera and improve productivity
4. Reinforce foundation
・ Promote joint Japan-United States projects, labor-saving manufacturing, etc.
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

14Composite Materials
VisionWithout being bound by fixed ideas, we will achieve the following targets by
taking on the challenge of changeHigher productivity
Greater costcompetitiveness

Develop products andprocesses that contribute
more widely to society

Build closer relationshipsof trust with customers

Issues and initiatives

1. Improve productivity and strengthen cost competitiveness・ Improve productivity through process reengineering
・ Reduce labor requirements by improving production line through automation, etc.
2. Develop products and explore demand from a customer perspective
・ Achieve speedy response through cooperation between development and sales
・ Explore new applications and acquire new development themes through contactwith customers
3. Develop environmentally friendly products and production processes
・ Develop and sell products that contribute to the environment
・ Introduce melting furnaces with significantly higher energy efficiency and reduced
CO2 emissions, and new technology to make it possible
・ Maximize use of recycled resources to help reduce resource utilization⇒ base product appeal/value on ability to reduce CO2 emissions
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

15

Material Solutions
VisionCreate new businesses through collaboration and flexible thinking that is
not bound by the framework of existing operations
Issues and initiatives

1. Create new businesses
・ Share information and insights between the glass fiber, specialty
chemicals, and textile units
・ Launch collaborative products
2. Create an organization that generates synergies
・ Organizational operation that encourages corporation betweenbusinesses
・ Develop human resources who can make proposals and drive themforward without being bound by existing business areas
3. Acquire new commercial rights in growth areas
・ Make product proposals in growth areas (environment, E&E, functional
products etc.)
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved16Insulation Materials
VisionUtilize external resources as well as those of the Nittobo Group to open
up new markets
Issues and initiatives

1. Take advantage of growing demand for energy-saving
solutions to strengthen sales of high-end products
・ Expand sales of ZEH-compatible products
・ Develop products with Grade 6/Grade 7 thermal insulation ratings

2. Stable supply derived from improved productivity
・ Improve productivity by tightening product lineup
・ Improve processes in production facilities

3. Expand recycled glass raw material resources in response todecline in number of glass bottles recovered・ Develop new composition for glass raw materials
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

17Research and Development

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

Establishing a Technology Development DivisionDevelopmental reorganization of the Research & Development Headquarters established in 2017
Product development functions will be integrated with manufacturing and sales for each division, resulting inenhanced agility
The Technology Development Division has been established to specialize in basic research and production technology,
as well as being responsible for company-wide product development functions

Research &DevelopmentHeadquarters

Product development
Basic research/
production technology

DivisionsNewstructure

TechnologyDevelopment Division

Technology Development Division policy:
Opening up a new future based on three pillars with the objective of realizing the long-term management strategy

1) Ambidextrous development

・ Deepen knowledge by innovating production and technology foundation: strengthen and implement thetechnology foundation that will be required in the future
・ Explore knowledge by utilizing and redefining core technology: sow seeds for/open up new markets
2) Open Innovation
・ Co-create with external partners: respond promptly to increasingly complex social issues
・ Develop human resources and create new themes through exchanges with different industries: freeinnovation activities
3) Digital innovation
・ Tackle digitalization by taking a bird’s-eye view of various business processes including those in technology
development, production sites, and the back office, and use current projects of utilizing MI/AI (implementingAI) to open the way to process innovation (stage before shifting to CPS)
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

19Sustainability(Environment, Human Resources,Governance)

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

Environmental InitiativesAccelerating initiatives to be sure we achieve FY2030 targets
FY2030 targets for the development of products that contribute to theenvironment are scheduled to be set in the first year of the Medium-Term
Management Plan.
FY2030 Targets
1. Reduce CO2 emissions: 30% (compared to FY2013)
achieve net-zero waste glass
2. Reduce glass waste:
3. Develop products that contribute to the environment

CO2 emissions (thousand tons)
400
30% reduction inCO2 emissions

349244200

FY2050
Achieve Carbon Neutrality020132021202220232030

2050

(FY)

(Forecast)
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

21

Environmental Initiatives (Roadmap)
First we will implement individual initiatives aimed at achieving FY2030
milestones(FY)※ CN-GF：An abbreviation of Carbon Neutral-Glass Fiber. Glass fiber that effectively emits
zero CO2 from raw material extraction, through transportation, to manufacturing.

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

22

Human Resources Strategy
Promote initiatives for securing human resources and creating job satisfaction inpreparation for sustainable growth

Securing human resources
Aim for 20% increase globallyby FY2027
・Secureheadcount for
production

・Improve working environment
・Improve productivity and reduceburdens (promote use ofmachinery and automation)

Strengthen
external
recruitment

・Build systems
to enable
people to work
energetically tothe age of 65

Improveretention

Creating job satisfaction
Aim to enhance employee
engagement
・Achieve female manager ratio of 10% by 2030
・Further expand support measures for bothchildcare and nursing care・Promote participation by women in manufacturing
workplacesPromote
DE&I

Supportgrowth・Mental health support
・Introduce healthpromotion program

・Enhance frontline capabilities
・Develop global humanresources
・Foster a culture of learningand reskilling

Promotehealthmanagement

Utilize seniorhumanresources
Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved23

Corporate GovernanceIntroduced performance-linked stock remuneration plan during the period of the previous
Medium-Term Management Plan
We will continue to make ongoing revisions to strengthen the corporate governance systemBoard of Directors operating structure(as of March 31, 2024)Consists of seven members, including four external directors, one of whom is female
Directors are individuals with diverse experiences and skills, with the aim ofencouraging deeper discussions from a broader perspective on management policy,
long-term strategy, etc.

External directors
Those with management experience (the President, the Chairman),those with management experience (the President, technology development)
Attorney (corporate legal affairs, attorney of the state of New York),
Certified Public Accountant (partner of audit firm)

Strengthen the corporate governance structureIntroduced system for holding a briefing before Board of Directors meetings to facilitate
deeper discussions (2016 - )Further enhanced the supervision function of the Board of Directors by introducing anevaluation of the effectiveness of the Board of Directors (2017 -)Introduced performance-linked stock remuneration plan (2022 - )Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved

24Preparing to Achieve the Objectives of
the New Medium-Term Management Plan•

In the Special Glass-related area, in addition to harvesting the fruits ofinvestments made in the past, we will actively focus on investing in new projects
and launching new products, while keeping a close eye on demand•

In medical-related applications, we will accelerate the product development
roadmap that we have brought forward from the previous Medium-Term
Management Plan, while boosting global expansion•

In parallel to this, the organizations of the five business divisions and the twocorporate divisions will unite to work as one on building new pillars of revenue
for 2030 and beyond•

We will carefully maintain the financial soundness of the organization. We will
accelerate efforts to secure and develop human resources, supporting a flexible
approach to tackling the Medium-Term Management Plan•

By making facilities more resilient, moving forward with timely upgrades, andprioritizing operational safety above all, we will create a foundation for growththat will go beyond Big VISION 2030

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved25Note on the Handling of This Document
Numerical forecasts contained in this document were created on the basis ofinformation available to the Company as of the date of the announcement. This
document is not intended to provide any promise or guarantee on the achievement of
future financial results and measures.
Potential risks, uncertainties and other factors that could affect our results ofoperations include, but are not limited to, economic conditions, demand trends,
exchange rate fluctuations and fluctuations in fuel prices.
Unauthorized reproduction or secondary use of this document is prohibited.

Copyright (C) NITTO BOSEKI CO., LTD. All Rights Reserved