Review of Medium-term Management Plan (FY2024-FY2026) November 9, 2023 CMK CORPORATION 1. Look-back/Long-term Vision 2030 2.  Review of Medium-term Management Plan(FY2024-FY2026) – Reason for renewal/Summary/ Upward revision of numerical targets — In-vehicle growth strategy – To strengthen revenue platform – Financial strategy/Strengthening Management base 3. Supplementary information 1.  Look-back/Long-term Vision 2030 Our history ①Since FY2007 when the highest sales in history was recorded, growth has been stagnant long. ②Shrinking production capacity due to consolidation of production bases up to FY2015 ③Reconstruction to establish stable revenue platform starting in FY2016 ■ Sales   ■ Operating income  -○-Operating margin 65> The financial Great East Japan crisis Earthquake. The coronavirus pandemic 1.  Look-back/Long-term Vision 2030 Creation of values we have accomplished so far We have contributed to social creation of values by grasping social issues and providing needed solutions ⇒ Our corporate purpose is to realize a safe and comfortable society by continuously supplying the world's highest level safe and secure print circuit boards that always comply with the new society and its values. PCB for Engine ECU (the world's smallest "ECU on the palm"') Downsizing and higher precision of PCB for ADAS (Integrated antenna) with high- precision circuits From domain type to zone type PCB for integrated ECU with highly advanced functions realized by architecture conversion Our history 2008 2010 2022 2023 World's first PCB for regenerative    World's first inverter/converter/battery control braking system for HEV PCB for mass-produced BEV PCB for new business fields (eVTOL, aeronautical/space, etc.) 1.  Look-back/Long-term Vision 2030 Toward 2030 (What we would like to be) We contribute to new social value creation by fusing mobility and social infrastructure and realization of a safe and comfortable society CMK  Vision2030 ·We contribute to building a safe and comfortable society by continuously supplying the world highest level safe and secure PCBs ·We observe compliance and enhance soundness and transparency of management 1.  Look-back/Long-term Vision 2030 Toward 2030 (Positioning of Medium-term Management plan ) We aim to maximize the corporate value toward 2030 by shifting to new next growth path of "Growth acceleration stage 2030 New growth path FY2025-FY2026 Accelerated Of the growth Sales Operating margin : 10% · Establishment of the growth cycle by increasing net sales from CASE demand Maximization of corporate value FY2022-FY2024 Establishment of the profit base and preparation for the growth •Improving production efficiency through the business structure reform •Shift to high-value added business in the automotive product portfolio Growth that exceeds PCB market forecast by investing intensively in a growth field. 1.  Look-back/Long-term Vision 2030 2. Review of Medium-term Management Plan(FY2024-FY2026) – Reason for renewal/Summary/ Upward revision of numerical targets — In-vehicle growth strategy – To strengthen revenue platform – Financial strategy/Strengthening Management base 3. Supplementary information 2.  Review of Medium-term Management Plan(FY2024-FY2026) Reasons for rreviewing (changes from previous Medium-term Management plan)   b 1.  Major clients' medium-to long-term demand is very strong (higher than estimate) Due to such situations as progress in electrification and actual launch of items for self-driving, medium-to long-term demand is much higher than estimate. 2.  A lot of inquiries from new customers Affected by geopolitical risk aversion in the supply chain, we have even higher customer needs (especially foreign customers) for our new plant in Thailand. 2.  Review of Medium-term Management Plan(FY2024-FY2026) Summary: 1.  In-vehide growth strategy • Sales growth by capturing CASE demands • To increase the ratio of foreign clients • Shift to high-value added business 2. To strengthen revenue platform • Fixed cost reduction by reforming business structure • Productivity improvement by investing in enlargement and automatization • Establishment of new business fields 3. Financial strategy/Strengthening Management base • Capital allocation ・To build digital management base, to strengthen sustainability activities • Improvement of corporate value (to increase PBR) 2.  Review of Medium-term Management Plan(FY2024-FY2026) Upward revision of numerical targets <Medium-term Management Plan> (Nov, 2021) ■■Operating income    ■ EBITDA   ■○■ Operating margin ■ Sales (Billions of yen) <Review of Medium-term Management Plan> (Nov, 2023) ■ Sales  ■ Operating income  ■ EBITDA  ■○=  Operating margin 1.  Look-back/Long-term Vision 2030 2.  Review of Medium-term Management Plan(FY2024-FY2026) – Reason for renewal/Summary/ Upward revision of numerical targets – In-vehicle growth strategy – To strengthen revenue platform – Financial strategy/Strengthening Management base 3. Supplementary information 111 2.  Review of Medium-term Management Plan(FY2024-FY2026) In-vehicle growth strategy (Upcoming trend①) The number of installed ECU is increasing at t the rate that exceeds that of automobile production volume due to complexity of control of self-driving functions, etc. < Volume concept of self-driving level, sensors, cameras, etc.>   <Forecast of automotive production volume and automotive ECU> (Our estimate) Approx. 1.9 times 2.  Review of Medium-term Management Plan(FY2024-FY2026) In-vehicle growth strategy (Upcoming trend②) Distributed Architecture Domain architecture Zone architecture Now
2025
2030
While ECU gains higher functionality, PCBs need more sorts of fundamental technology. 『Upward compatibility of manufacturing technology』 ⇒Expanded needs for build-up PCBs 2.  Review of Medium-term Management Plan(FY2024-FY2026) In-vehicle growth strategy (Business opportunity and target items)
2.  Review of Medium-term Management Plan(FY2024-FY2026) In-vehicle growth strategy (Sales by product) Remarkable shift to portfolio of in-vehicle products where we have a competitive advantage ＜FY2021 vs FY2026＞ Driving control and +20.4 Safety
△5.3
+13% Safety Powertrain
Body Electronics/ △ 14% Climate Control Information and △ 9 % Communication 15 2.  Review of Medium-term Management Plan(FY2024-FY2026) In-vehicle growth strategy (Sales by customers and Sales by type of PCBS) ■■ <FY2021 vs FY2026> Customer portfolio is diversified (To increase foreign sales ratio) Sales amount for foreign customers: +15.3 billion yen Sales Sales ratio +15% Shift to high-value added business (To increase HDI sales ratio) HDI PCBs : +19.0 billion yen Sales Sales ratio  +12% 2.  Review of Medium-term Management Plan(FY2024-FY2026) Reference: PCB Market forecast Our Medium-term Management plan expects for growth that exceeds market forecast. ＜Automotive PCB market forecast vs Our Medium-term-Management plan＞ ＜PCB market forecast vs Our Medium-term-Management plan ＞ 【Automotive PCB market forecast】 2021 vs 2027 CAGR approx. 5.4% 【PCB market forecast 】 2021 vs 2027 CAGR approx. 1.9% ( Our Medium-term Management plan of in-vehicle products)  l 2021 vs 2027 CAGR approx. 8.8% (Powertrain/Driving control and Safety  approx. 16.5%) l Our Medium-term Management plan ) 2021 vs 2027 CAGR approx. 7.8% 2.  Review of Medium-term Management Plan(FY2024-FY2026) In-vehicle growth strategy (potential toward 2030) Medium-to long-term demand (inquiries) for our Thailand plant is very strong, which is 120% of the planned sales of in-vehicle products in FY2026. ＜ Room for investment regarding the new plant in Thailand ＞くCapacity of Thailand plant >
1.  Look-back/Long-term Vision 2030 2.  Review of Medium-term Management Plan(FY2024-FY2026) – Reason for renewal/Summary/ Upward revision of numerical targets — In-vehicle growth strategy – To strengthen revenue platform – Financial strategy/Strengthening Management base 3. Supplementary information 2.  Review of Medium-term Management Plan(FY2024-FY2026) To strengthen revenue platform (Japan)
Japan
■ Improvement measures to establish a revenue platform (so far) • Improvement of marginal profit ratio by promoting insourcing • Cost reduction/Optimization by consolidating and reorganizing production bases (completed at t the end of September, 2023.
■ Future tasks
• Profit maximization of existing production system
■ Future initiatives
• Investment shift to high value-added fields/higher ratio of HDI PCB production (Target item: Integrated ECU for self-driving, etc.) • Creating profits by establishing a new business field • Resilient supply chain (Maintenance of three base supply system, Thailand, China and Japan)
Sales/Operating income/Operating margin
(Billions of yen) ■ Sales  ■ Operating income  ∞─  Operating margin 65.0 FY2021 Results Results Forecast 6.0% o 3.9 FY2022 FY2023 FY2026 2.  Review of Medium-term Management Plan(FY2024-FY2026) New business field growth strategy
2.  Review of Medium-term Management Plan(FY2024-FY2026) To strengthen revenue platform (China)
China
Sales/Operating income/Operating margin
■ Improvement measures to establish a revenue platform (so far) ・100% insourcing will increase marginal profit rate • Yield/Productivity improvement by investing in automation
■ Future tasks
• Risk management in the Chinese market • To strengthen competitiveness of existing production system
■ Future initiatives
• To promote 'fab light' for generic in-vehicle PCBs. • Productivity improvement by investing in enlargement ■ Sales   ■ Operating income  ∞ Operating margin (Billions of yen) 38.0 FY2026 FY2021 FY2022 FY2023 Results Results Forecast (Medium-term Management Plan) 2.  Review of Medium-term Management Plan(FY2024-FY2026) To strengthen revenue platform (Southeast Asia)
Southeast Asia
Sales/Operating income/Operating margin
■ Improvement measures to establish a revenue platform (so far) ■ Sales    ■ Operating income  ∞ Operating margin (Billions of yen) 46.0 • Productivity improvement by ameliorating yield • Sales expansion to foreign clients
■ Future tasks
・Sales expansion to foreign customers • Early decision making as for the new plant second phase investment
■ Future initiatives
• Productivity improvement by automating, enlarging and promoting filmless • Embodiment of contents of the second phase investment FY2021 FY2022 FY2023 FY2026 Results Results Forecast (Medium-term Management Plan) 2.  Review of Medium-term Management Plan(FY2024-FY2026) To strengthen revenue platform (Analysis of changes in operating income) (Billions of yen) FY2023 Due to Operating income  increased/Decreased (Forecast) sales Improved productivity Business structure reform sales prices, Increased FY2026 depreciation  procurement cost Operating income and others cost (Medium-term Management Plan) 1.  Look-back/Long-term Vision 2030 2.  Review of Medium-term Management Plan(FY2024-FY2026) – Reason for renewal/Summary/ Upward revision of numerical targets — In-vehicle growth strategy – To strengthen revenue platform – Financial strategy/Strengthening Management base Supplementary information 3. 2.  Review of Medium-term Management Plan(FY2024-FY2026) Financial strategy (Capital allocation) To create cash stably while maintaining medium-term-to long term financial soundness and continuing growth investment toward CASE demand capture 2.  Review of Medium-term Management Plan(FY2024-FY2026) Strengthening Management base (Growth through digital management base) We realize further strengthening of management base, and to improve productivity and work efficiency, by utilizing digital technology (Speedy/more visualized). * MES: Manufacturing Execution System ■To improve productivity and quality maintenance by making advancement in manufacturing with digital technology, knowledge sharing and utilizing AI. ■ Reduction and optimization of administrative/indirect works by reconstructing the core system 27 2.  Review of Medium-term Management Plan(FY2024-FY2026) Strengthening Management base (Strengthening sustainability activities) ＜ Initiatives for Carbon neutral > We advocate “Smart e-changes NetZero” , and aim at Carbon neutral and proceed.
くDue Diligence activities >
Currently, we are promoting Due Diligence activities. Specifically. to identify impacts on human rights, we are promoting various activities such as making a human rights risk map in terms of seriousness and possibility to occur related to our business operations, supply chain management to prevent negative impacts, establishment of a consultation counter for human rights abuses inside and outside, etc. * Please refer to our website below https://www.cmk-corp.com/csr/doc/CMKReport2023.pdf 2.  Review of Medium-term Management Plan(FY2024-FY2026) Improvement of corporate value (to increase PBR) Status quo: Stock price stays lower than 1 PBR. The problems are profitability lower than capital cost and low growth prospect. ⇒ Management handling toward higher corporate value paying attention to capital cost 2.  Review of Medium-term Management Plan(FY2024-FY2026) Numerical targets (FY2026) Net sales Operating income Operating margin 8.6% ROE Equity ratio Over 996 Around 50% 1.  Look-back/Long-term Vision 2030 2.  Review of Medium-term Management Plan(FY2024-FY2026) – Reason for renewal/Summary/ Upward revision of numerical targets — In-vehicle growth strategy – To strengthen revenue platform – Financial strategy/Strengthening Management base 3. Supplementary information
3. Supplementary information ④ Numerical Targets (Financial targets by region)
3. Supplementary information ⑤-1 CASE and New businesses roadmap Automotive roadmap 2023 2030 2040 C Connected Probe information applicable NAVI V2V communication ACC・ISA Wireless high-speed wireless communication communication system.
Level 4 A Level 5 Autonomous Autopilot driving on the freeway High Driving Automation (freeway) Fully Autonomous Collision damage reduction control for pedestrians and obstacles Optimal collision avoidance control for autonomous drivingのShared Car-sharing Ride-sharing Self-driving taxi On-demand + AI transportation service Electric xEV penetration rate 16% xEV penetration rate xEV penetration rate
80% ※Prepared in our company with reference to the Society of Automotive Engineers of Japan “Technology Roadmap” of "Future vision : 2050 Challenge" New businesses Communication infrastructure Initial 5G 5G Evolution Beyond 5G（６G） ※Prepared in our company with reference to the Ministry of Internal Affairs and Communications  " Beyond 5G Promotion Strategy -6G  Roadmap." 36 Fusion of AI and wireless communications. optimal route guidance Autonomous 3. Supplementary information ⑤-2 CASE and New businesses roadmap
3. Supplementary information ⑥Technology roadmap Our technological innovation FY2023 FY2024 FY2025 FY2026 FY2022 High density Multiple stacked BVH HDI AnyLayer HDI Fine circuit MSAP High-definition circuit MSAP
Trial Mass-production
Mass-production Mass-produced
Trial Mass-production Trial Mass-production ±10%(actual measurement control) ±10%(process guarantee) simulation control Development Trial Mass-production Trial Mass-production AR12
Mass-produced AR21 AR24
Future-related information and descriptions in this material are just forward-looking statements and not guarantees for future achievements (Amounts are rounded, and % is rounded to one decimal place.)