Contribute to 5G society
MEC COMPANY LTD.
Securities code: 4971

March 23, 2024

Note : This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.
Briefing session for shareholders 2024

FYE12/2023 Summary
Business environment
In fiscal 2023, although inventory adjustments for PCs, smartphones, displays, tablet PCs, etc.
have run their course, demand for electronic devices will remain weak against the backdrop of
weak personal consumption. Data centers, which were performing well until Q3 2022, prioritizedinvestment in cutting-edge fields over traditional fields due to limited budgets.

Summary of financial results
YoY decrease in sales and profits
Sales and profits decreased due to the business environment. Although the market bottomed out
in Q1 2023 and has been on a recovery trend, the degree of recovery has been slow.

Major chemical
CZ︓Down Weak demand for related electronic equipment.

V-Bond︓Down Although there are signs of recovery in automobile production, it is still affectedby smartphones.
EXE︓Increase Completed inventory adjustments for relate electronic equipment.

SF︓Down Weak demand for related electronic equipment.

Briefing session for shareholders 2024

1FYE12/2023 Results
Unit : million yen

FYE12.2023

FYE12.2022
Results

Results

YOY(%)

16,32914,020-2,309-14.1%

Chemical sales

16,042

13,764-2,277-14.2%

Operating income

4,004

2,492

-1,511

24.5%

17.8%

-6.7ppt

4,246

2,683

-1,563

26.0%

19.1%

-6.9ppt

3,064

2,304-759-37.7%-36.8%-24.8%161.22

122.29--Net sales

Operating profit margin
Ordinary income
Ordinary profit margin
Net income
Net income per share

Briefing session for shareholders 20242

FYE12/2024 Forecast
FYE12/2024
1H

Amount(million yen)

Full-year

Profitratio

YOYchange(%)(%)

Amount(million yen)

Profitratio

YOYchange

(%)

(%)

Net sales

7,850

-

26.6

16,300-16.3

Operating income

1,300

16.6

55.0

3,000

18.4

20.3

Ordinary income

1,350

17.2

34.6

3,100

19.0

15.5

950

12.1

-11.7

2,150

13.2

-6.7

50.73

-

-

114.82--

Net incomeNet income pershare(yen)In the first half of FY2023, special profits have been recorded due to the transfer of land andbuildings at the Nishinomiya factory.(549 million yen)

Briefing session for shareholders 2024

3

Corporate profile（As of December 31, 2023）

Company name

MEC COMPANY LTD.

Head quarters location

3-4-1, Kuise Minamishimmachi, Amagasaki, Hyogo 6600822, JAPAN

Date of establishment

May 1, 1969

Business activities

R&D, production and sales of chemicals, equipment andrelated materials used in the production of PCBs andelectronic components.

PresentativePresident and CEO

Capital594,142,400 JPY

Net sales

14,020 million JPY (Consolidated)

Stock listing

Tokyo Stock Exchange Prime Market
Securities code: 4971

Number of employees

454 persons (Consolidated)
263 persons (Non-consolidated)

Kazuo Maeda

Briefing session for shareholders 2024

4

Shareholder composition(number of shares owned)
Jun. 2022

%

Dec.
2022

%

Jun. 2023%

Dec. 2023%

Individuals

５,705,803

28.4

7,411,266

36.9

5,139,472

25.6

5,551,958

27.7

financial
institutions

7,028,129

35.0

6,052,129

30.2

7,682,329

38.36,466,029

32.2

domesticcorporations

1,625,306

8.1

1,642,663

8.2

1,633,196

8.1

1,605,916

8.0

f o r e i g n
corporations

4,163,540

20.7

3,736,113

18.6

3,807,883

19.0

4,841,354

24.1

securities
companies

652,5423.3

333,107

1.7

626,371

3.1

423,924

2.1*% is rounded to the second decimal place.
*Does not include treasury stock.

Briefing session for shareholders 2024

5

Trends in Total Dividends,
Consolidated Dividend Payout Ratio
Medium-term goal(consolidated payout ratio): 30%6030.9
22.5

40
20

260Yen35

12/'20

強み

12/'21

Acquisition of treasury stock Jun. 2023 286,000 shares Dec. 2018 200,000 shares Mar. 2017 200,000 shares Mar. 2016 140,000 shares Nov. 2015 500,000 shares Feb. 2009 300,000 shares

36.8

27.9

40
30

45

12/'22

39.2

45

45
売上推移

12/'2320
100

12/'24(Forecast)％

Shareholder benefits
100 or more shares QUO CARD 1,000 Yen
1,000 or more shares QUO CARD 2,000 Yen※Target shareholders who own 100 or more shares (1unit) of the Company's stock listed or recorded in theshareholder register as of December 31 of each year

Briefing session for shareholders 2024

6Motto, Management Philosophy

Enjoy your work
Visionary Technology
Reliable Quality
Meticulous Service
The MEC group will contribute to the creation of a prosperous anddiverse society and sustainable environment, inspired by anunconventional approach based on the principles of "Visionary
Technology", "Reliable Quality" and "Meticulous Service", thereby
creating and fostering value at various interfaces through our global
activities.

Briefing session for shareholders 2024

7

What is MEC ?
MEC develops and sells chemicals used in the manufacture ofprinted circuit boards and parts.
Melt the surface of metal (Mainly copper) and add value.
Exclusive share in the process of melting copper for organic
package substrates.
Approximately 10% of consolidated sales are invested in R&D, andR&D personnel are 1/3 of non-consolidated employees.
We can provide products of the same quality at any production sitearound the world.

It's not a substrate manufacturer
It doesn't carry out plating
Briefing session for shareholders 20248MEC Sales Trend'69 Started as a chemical technology consulting company in Kita-ku, Osaka'70 Started manufacturing chemicals for electronic substrates（Million yen）
18,0005G/IoT/AI/
Autonomous
driving/DX/GX

16,000'22 Shift to Prime Market

Chemicals substances
for smartphone boards andelectronic parts

14,00012,000Chemicals for
PKG boards in PCs'07 Listed on the First Section of TSE
10,000‘95 star selling CZ'03 Listed on the Second Section of TSE

8,000'01 Listed on NASDAQ Japan (now JASDAQ),
6,000
4,000
2,000
0

Financial crisis of ‘07-’08

Diffusion ofelectronic equipment

The collapse of IT bubbleThe collapse of the bubble economy
The Great HanshinAwaji earthquake of‘95

The Niigata
Prefecture Chuetsu
Earthquake of ‘04

Briefing session for shareholders 2024

The Great East Japan
Earthquake of ‘119Bases
Overseas

Factory

2017〜
Head office(Amagasaki)(Amagasaki, Hyogo)
R&D center andAmagasaki factory

Est. 1992

MEC EUROPE [Belgium]

Head office (Higashihatsushima)(Amagasaki, Hyogo)
R＆D center

Est. 2001

MEC SUZHOU
1993〜

MEC

（Japan）

Est. 2002

MEC ZHUHAI

Est. 2017

MEC THAILAND

2020〜

Nagaoka factory(Nagaoka, Niigata)

Sales office(Tachikawa,Tokyo)
1974年〜

MEC HONG KONG
（Image）

Est. 1990

MEC TAIWAN

Kitakyushu factory(Kitakyushu, Fukuoka)
Scheduled to operate in 2025

Briefing session for shareholders 2024

10

MEC’s Chemicals Bring Abundance
into Life

Recipe from R&D▸
Products made by MEC▸▸PCBs manufactures
Parts manufactures

Briefing session for shareholders 2024

11

Fields where MEC can Play an ActiveRole５G
IoT
MobilityServers
Supercomputers- Adhesion Enhancing Technology- Micro-interconnect Patterning Technology
Satellites- Selective Etching TechnologyPCs

Smartphones
Tablet PCs

Factory Automation
Robots

Display

Briefing session for shareholders 202412

Consolidated full-year performance trends
Net Sales(Million yen)

15,03816,00014,00012,00010,0008,000
6,000

11,956

3,939
2,949

Operating Income

Net Profit

16,329
4,004
3,064

2,370

16,30014,020(Million yen)
5,000
4,500
4,000

2,492
2,304

3,000
2,150

1,595

3,500
3,000
2,500
2,000
1,500

4,000

1,000

2,000

500

00
12/'2012/'21

12/'22

12/'23

Briefing session for shareholders 2024

12/'24（Forecast）

13

Sales composition
Percentage of sales by item

Sales and ratio by regional
segment
Million yenThailandJapanEurope
Other570

Chemical

5,544

896
Machinery

Materials

12/
’23

CZ
ratio

Hong Kong/ Zhuhai

1,717

12/
’23

TaiwanChina(Suzhou)

2,620

2,671

Briefing session for shareholders 202414

Growth keywords and steps to sales expansion

5G

Increase in global demand• Generations of communication

for semiconductors

methods

IoT・AI

Huge investment bysemiconductor• Everything is connected to theinternet and artificial intelligence isapplied to information processing

manufacturers

Huge investment by PKG
board manufacturerVehicle• Driving assist system• EV(Electric Vehicle)

Sales expansion for MEC

Briefing session for shareholders 2024

15

The New Factory

Kitakyushu Plant(tentative name)

Image

Location: 10 Koyomachi, Wakamatsu-ku, Kitakyushu City, Fukuoka Prefecture
Site area : 29,889 ㎡
Start of construction: April 2024（planned）
Total investment: Approx. 4 billion yen (including land acquisition costs）
Investment plan: Own funds and dept financing (planned)
Production capacity: Approx. 30,000t/year（planned）
Number of newly hired employees: 10 to 20（planned）
Commencement of operations: July 2025（planned）
Briefing session for shareholders 2024

16

MEC’s Core Technologies

Creating and Fostering Value at
Various Interfaces
Roughen the surface, andphysically improveadhesion
Pattern formation
Selective etching
Treat the surface, andchemically improveadhesion
Briefing session for shareholders 202417

Examples of Major Chemical
Applications and Final Products
Major chemical

Characteristic

Final products

Adhesion improver mainly for PKG
substrates.
A copper surface treatment agent
that enhances adhesion between
copper and resin.

Infrastructure (5G-related,data centers, etc.) and highfunction devices (PCs,smartphones, tablet PCs, etc.)

Adhesion improver mainly for
multilayer substrates.
A copper surface treatment agent
that enhances adhesion between
copper and resin. Not used for PKG
substrates.

Smartphones, cars, etc.

Anisotropic etchantEtching agent for COF substrates.
Fine wiring can be formed throughsubtraction.

TV and PC monitors, etc.

Selective etchantEtching agent with selectivity tocopper.

Tablet PCs, etc.

Super-roughening typeadhesive enhancement

CZ series

Adhesion improvers for
multilayer substrates

V-Bond series

EXE series

SF series

Briefing session for shareholders 2024

18What is PCBs ?
PCBs are used in all fields:household appliances,
communication equipment,
medical equipment, airplanes,automobiles and industrialequipment.
MEC develops and provides
chemicals and machines usedduring the manufacturing
process of PCBs which areessential to our living.
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19

Low

Level of technical difficultyHigh

Areas in which MEC has strengths
Acquired high share
PKG

Example: Servers, PCs, Smartphones

HDI

Expanding market share

High-density
multilayer board

Multilayerboard

Flexible board
Double-sided board

Example: Smartphones
Example: Supercomputers

Low share
Example: Digital cameras, Car navigation
systems, PCs, Automobiles

Expanding market share
Example: HDD, Smartphones, Automobiles
Example: White goods, Automobiles,
Televisions

Low share
One-sided board

Example: White goods, Televisions

Production volume
Briefing session for shareholders 202420

Package Substrate (PKG)

IC Chip
Bump
PKG

Bump

PKG Cross-section image

Semiconductors follow the nm rule
Electronic substrates follow the μmrule
1 mm = 1,000 μm
1 mm = 1,000,000 nm

Briefing session for shareholders 2024

21

PKG Substrate and CZ

1.1mm
処理前
Before PKG Substrate is necessary for
mounting semiconductors.
 MEC’s CZ series produces unique, superfine surface roughness by soft-etchingcopper surfaces, when hot-melt resin isforced into the roughened surface andsolidifies, a strong bond is achieved due tothe “anchor effect.”
Briefing session for shareholders 2024

処理後

After22

Inside the computer
PKG board underMemorycooling fan

This distance slows down the process
PKG Cross-section
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23

Evolution of the PKG substrateSi Die

One PKG
One Si Die

PKG

Mounting multiple
semiconductors

Chiplet
Si DieSi DiePKG

EMIB(Embedded Multi-die Interconnect Bridge)

Si DieSi DieSi bridge
PKG

CoWoS

(Chip on Wafer on Substrate)

Si DieSi DieSi

EFB(Elevated Fanout Bridge)

Si DieSi DieSi bridge

interposer

PKG

PKG
Copper pillar

PKG size is big and layers are increase.
Briefing session for shareholders 2024

24

CZ series roadmap
Minimum Line Width [µm]60CZ-8100

40
CZ-8101

20

CZ-8201

CZ-8401+AP series（Chemicaladhesion
promoter）

Under development（Chemical adhesion
promoter）

01995
2000
*Source: JPCA
2021 PWB2005
Roadmap.

CZ-8100 1.5μm

2010

CZ-8101 0.7μm

2015

2020

CZ-8201 0.3μm

Briefing session for shareholders 2024

2025

2030

2035
Year

CZ-8401 0.1μm

25Aiming to expand the business domain
Creation of newbusinessTechnicaltrend

Electronic board
manufacturingmarketApplication
development ofexisting technology

Briefing session for shareholders 2024

26

Securities code :4971

MEC COMPANY LTD.

2030 Vision
Phase 1

Medium-term Management Plan
（2022ｰ2024)

February 22, 2022

Note : This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

Positioning of the Medium-term Management Plan
Aiming to achieve sustained growth andoptimize corporate value over three three-year
medium-term management plans toward ourenvisioned company image in 2030

2028–2030
2025–2027
2022–2024
Phase１

Phase32030
VisionPhase2Medium-termManagement Plan28

Corporate Image to be Achieved

Become a truly global company thatcreates new value with visionarytechnology

Continue to be an R&D-based company

Present an image as a visionary
AI company

29Quantitative Targets of the Medium-termManagement Plan

2024 quantitative targets (consolidated)
Operatingmargin

At least

20%

ROE

At least

10%30Creating and Fostering Value at
Various Interfaces
This presentation includes forward-looking statements (such as predictions
and business forecasts) made in March 23, 2024. These statements areassumptions based on information available at the time, and they are subject
to risks and uncertainties. Actual results or events could differ substantiallyfrom those forecasted in such statements due to a plethora of variables.

https://www.mec-co.com/en/
Our website contains a variety of information, including press releases,
shareholder communications, sustainability reports, corporate governancereports, and more. Please take a look.

Briefing session for shareholders 202431