May 25, 2022へFURUKAWA CO.,LTD. This document contains forward-looking statements that reflect the Company's judgments based on us assumptions. The Company makes no guarantees or promises regarding the certainty, s, or implementation status of such statements 1 Greetings from President & Representative Director Minoru Nakatogawa. 1. Today’s Summary 2. FURUKAWA CO., LTD. Group’s vale creation process 3. Financial Results for the FY2021 & Financial Forecasts for the FY2022 (Consolidated) 4. Next Medium-term management plan, climate change, decarbonization initiatives 5. Topics Appendix
1. Today’s Summary
■Financial Results for the FY2021
- Net sales of ¥199 billion (up ¥39.3billion YoY), operating profit of ¥7.7 billion (up ¥2.1 billion YoY). - Net sales increased in all segments both in the machinery business and materials business. - Operating profit was down in the industrial machinery segment and UNIC segment, but profit was recorded in the rock drill segment, which was in the red in the previous fiscal year. Also, three segments in the materials business increased profits, resulting in a profit increase in the consolidated results.
■Financial Forecasts for the FY2022
- Net sales of ¥209.5 billion (up ¥10.4billion YoY), operating profit of ¥7 billion (down ¥0.7 billion YoY). - Net sales are expected to increase except for the rock drill segment and the real estate business. - Operating profit is expected to decrease due to the absence of expected price gains from the impact of metal price fluctuations in the metals segment.
■ Next Medium-term Management Plan, Climate Change, Decarbonization
Initiatives
- the medium-term management plan 2025 is scheduled to be announced in FY2023. We also aim to improve our ESG rating score in the FTSE with the aim of becoming an ESG index stock. - We will progressively disclose risks and revenue opportunities related to climate change in line with the TCFD framework by implementing our response to the CDP. - For electricity, which accounts for about 80% of CO2 emissions, Scope 1 and 2, we intend to switch to electricity derived from renewable energy sources and promote carbon neutrality, including non-electricity, which accounts for about 20% of CO2 emissions. In addition, in order to achieve net zero emissions, we will promote Scope 3 calculations and consider measures to absorb CO2 through the use of company-owned forests.
△ FURUKAWA COMPANY GROUP
4
Based on the Group's management philosophy, we have evolved and developed our copper mine development technology into a variety of technologies, with machinery and materials at the core of our business. We have positioned the machinery business as one of our core businesses, and now, through marketing management that incorporates a CSV perspective, we aim to create not only corporate value but also social value and continue to be a company that is needed by society. A  EUROKEWE COmpensat 5
【Financial Results】

【Financial Conditions】

△ FURUKAWA COMPANY GROUP
Recorded gain on bargain purchases due to stock acquisition in Yamaishi Metal Co., Ltd., Recorded gain on sale of investment securities (¥4 billion) in the previous fiscal year. Expenses corresponding to the progress of demolition work on the Furukawa Osaka Buildings. 7

△ FURUKAWA COMPANY GROUP

Operating  profit  (Unit: Million yen)
- Regarding factors for increase and decrease for the FY2021 results [Net sales] - Increased due to sales from large projects, bridges, and other work in line with volume.
[Operating profit]
- Decreased due to lower sales of material machinery parts and overhauls.
[Bridge projects] - The construction of the upper part of the No.3 elevated bridge  on the Tokai-Kanjo Expressway Daian No.2 (Inabe City, Mie Perf.) - The replacement construction of the pedestrian bridge in front of Kameido Station (Kouto-ku, Tokyo), etc. [Large projects] - Enclosed hanging conveyor (SICON®) for construction of the Shin-Kobotoke Tunnel on the Chuo Expressway, etc.
- Regarding factors for increase and decrease for the FY2022 forecasts
[Net sales]
- overall sales are expected to increase due to increased revenue from pumps, sewage plant extended transfer facilities and other pumping equipment, and bridges. [Operating profit] - increase due to higher sales. - Ref: Features, destinations, market share, etc. of the main products
Pumps
[Features] Pumps products superior in the durability and abrasion resistance which was amassed through mine development. [Destinations] shield tunnel construction sites,
Material machinery
[Features] Supports section plants including machine manufacturing and sales. Quarries, limestone mines, steel works, etc. [Destinations]
Infrastructure division
[Features] Comprehensive capability to undertake all the processes from the design of construction work to its execution. [Destinations] [Attention] [Market share] EURUKEWereOffe Crushers New construction of steel bridges, Construction of conveying earth and sand, etc. More and more companies are using belt conveyors instead of dump trucks to transport earth and sand. Inquiries are increasing.
- Inquiries about belt conveyors are increasing as a method of conveying earth and sand that contributes to social issues. We are strengthening information gathering from consultants, general civil engineering general contractors, and offshore civil engineering general contractors with the aim of adoption for new dam construction and restoration work for national land resilience and disaster prevention and mitigation, as well as for river flood control work. Number of current inquiries and consultations New dam construction: 2, Dam function restoration: 3, River flood control: 2, Tunnel construction: 5, Other projects: 4 Enclosed hanging belt conveyor (SICON®) for the Sakaigawa-Kanamori retention basin project (Machida City, Tokyo) Ref.: Recent orders - Materials handling facilities for Onahama port international bulk terminal: approx. ¥6 billion - Enclosed hanging belt conveyor (SICON®) for the Sakaigawa-Kanamori retention basin project (Machida City, Tokyo): approx. ¥1 billion - Enclosed hanging belt conveyor (SICON®) for the construction of the Chuo Shinkansen No.1 metroporlitan area tunnel (Kita-Shinagawa industrial zone): approx. ¥0.8 billion - Enclosed hanging conveyor (SICON®) for construction of the Shin-Kobotoke Tunnel on the Chuo Expressway: approx. ¥0.6 billion - Belt conveyor for the construction of the Hokkaid Shinkansen Sasson tunnel: approx. ¥0.4 billion, etc. SICON® is a registered trademark of ContiTech Transportbandsysteme GmbH. - Aiming to win orders for sectional plants centered on crushers in material machinery. We are aiming to win two new orders for steel slag manufacturers and cement manufacturers in the FY2022. [Order 1] Steel slag manufacturers Section plant with two crushers and eight screens [Order 2] Cement manufacturers Section plant with two crushers, one grinders and four screens Crushers (Cone crushers) GEOPUS C3
Net sales (Unit: Million yen)
Operating  profit  (Unit: Million yen)
+0.1 billion -1,324 - Regarding factors for increase and decrease for the FY2021 results [Net sales]  Japan: ¥13.2 billion, Overseas: ¥17.6 billion - Net sales increased both in Japan and overseas. (Japan: up ¥0.9 billion, Overseas: down ¥5.7 billion) Especially, overseas mainly in North America, where demand for construction machinery is strong, in addition to the increase due to the weaker yen. Sales of hydraulic crawler drills increased in North America, the Middle East, Africa, and Southeast Asia, while sales of hydraulic breakers increased in Europe and North America. [Operating profit] - Increased due to higher sales. - Regarding factors for increase and decrease for the FY2022 forecasts [Net sales]  Japan: ¥12.1 billion, Overseas: ¥17.3 billion - Increase due to higher product prices and a weaker yen but expect a decline in overall sales due to a decrease related to tunnel drill jumbos because of delays in the construction schedule. [Operating profit] - Increase due to product price hikes and yen depreciation, despite the negative impact of lower sales. - Ref: Features, destinations, market share, etc. of the main products
Hydraulic crawler drills
Accurate and speedy drilling technology suitable for the rock conditions. [Features] [Destinations] [Attention]
Tunnel drill jumbos
Many proven results in mountain tunnel and large tunnel constructions. Mountain tunnel construction sites, Dam headrace construction sites, etc. [Features] [Destinations] [Market share] Hydraulic breakers Wide range of models from small to super large size. High-quality and high-striking power. Strip mine such as  quarries, etc. Civil engineering work and at construction sites, etc. [Features] [Destinations] [Market share] Hydraulic breakers A EURUKEWE COMPENY GROUP Hydraulic crawler drills Strip mine such as limestone mines, etc. Infrastructure work in overseas, etc.

Continue its transformation from focus on volume to focus on profit
Japan - Concentrating on sales models and executing product sales strategies tailored to the market. - Concentrate our sales efforts on large-sized machines for hydraulic breakers and on small-sized machines for hydraulic crushers, which are attachment products. Further strengthen our recurring revenue model, including maintenance and parts sales, in addition to the main unit itself. - Implement price revisions for products and parts. - The capture rate of parts sales is high, we will promote regular replacement of critical parts.
Overseas - Strengthen sales by focusing on models in Europe and the US as markets
to attack.
- Expand sales of large-sized machines for hydraulic crawler drills and hydraulic breakers in North America. - Expand sales of medium to large-sized machines for hydraulic breakers in Europe. - Implement price revisions for products and parts. - Expand parts sales by making the use of genuine parts mandatory during warranty periods.
- Create a crushed stone market and transform our dealer policies in Southeast Asia
- As a measure to induce customers to switch from pneumatic drills to hydraulic crawler drills, we developed and launched an attachment drill that is easy to work with and affordable. In addition to Indonesia, we plan to expand our sales to other Southeast Asian countries to promote the switch to hydraulic drills. So far: Pneumatic drills => Hereafter: Attachment drills => Future: Hydraulic crawler drills - Continue to consider consolidation of sales subsidiaries in China, India, and Latin America. Attachment drill - LCS (Life Cycle Support) has lagged behind in building an overseas service system and will strengthen its organizational structure to make up for the delay.
Net sales (Unit: Million yen) (Forecast)
Operating  profit  (Unit: Million yen)
(Forecast) - Regarding factors for increase and decrease for the FY2021 results [Net sales]  Japan: ¥22 billion  Overseas: ¥6.2 billion - In Japan decreased mainly due to delays in crane erection due to truck production cutbacks caused by parts procurement difficulties, despite a recovery in investment appetite among wide-area rental companies and others. - Overseas, despite a decrease in shipments of mini-crawler cranes in North America due to a shortage of construction materials and other factors, overall sales increased due to higher shipments of UNIC cranes in China and other factors. (Japan: down ¥0.6 billion, overseas: up ¥1.1 billion)
[Operating profit]
- Decreased due to a worsening cost ratio caused by price hikes in steel and other raw materials, as well as soaring ocean freight costs. - Regarding factors for increase and decrease for the FY2022 forecasts [Net sales]  Japan: ¥22.4 billion  Overseas:¥6.6 billion - Increase, despite the impact of Russia's invasion of Ukraine and price increases for steel and other raw materials, as we anticipate a gradual recovery in the second half of the fiscal year from the impact of truck production cuts and other factors, as well as a recovery in the North American market.
[Operating profit]
- Remain at the same level as the previous year due to the impact of raw material price hikes and other factors, despite an increase in income from higher sales.
- Ref: Features, destinations, market share, etc. of the main products
UNIC cranes
[Features] Wide range of models such as various boom lengths etc. which correspond to customer needs. Construction and civil engineering sites, material handling, rental companies, etc. [Destinations] [Market share] UNIC cranes AS FURUKAWA COMPANY GROUP
Mini-crawler cranes
Show the power in narrow ground, rough ground and indoor worksites. Narrow or rough ground such as a graveyards, etc. Indoor worksites, etc.
UNIC carriers
[Features] Wide range of models such as car transporter type, heavy machine transporter type, etc. [Destinations] Car dealer, transportation company, road construction company, etc. [Market share] [Market share] [Features] [Destinations]

Japan
- expand sales of mini-crawler cranes, etc.
- Expand sales of mini-crawler cranes, residential cranes, ocean cranes, etc., which are not affected by truck production cutbacks due to the shortage of semiconductors and other factors
- Seek to increase our market share of products for which demand is stable.
- For regions where the market share for UNIC cranes is low, we will work to raise the level of the market share by holding safety seminars and promoting the radio-controlled performance unique to UNICs, etc. - For UNIC carriers, we will increase the market share by expanding sales of flat-type carriers.
Overseas
- The impact of Russia's invasion of Ukraine.
- Strengthen sales to Europe, the US, Southeast Asia, and the Middle East, as sales to Russia, which accounts for about 30% of our overseas sales, are difficult due to the impact of Russia’s invasion of Ukraine.
- strengthen our sales, product, and technical service capabilities.
- Developing a new mini-crawler crane for Europe and the US to be introduced. - Promote large-size truck-mounted cranes manufactured by Taian Furukawa for emerging countries in Southeast Asia, the Middle East, etc. - Expand and enhance training tools for dealers, conduct training, and develop and strengthen human resources. Large-size truck-mounted cranes manufactured by Taian Furukawa
△ FURUKAWA COMPANY GROUP

Net sales (Unit: Million yen)
Operating  profit  (Unit: Million yen)
- Ref: Features, destinations, market share, etc. of the main products
Electrolytic copper
[Features] It has been responsible for supplying electric copper since founding, and produce 70,000 tons a year. Electric wires, copper elongation products, home appliances, communication equipment, automobiles, etc. [Destinations] [FY2023] we have terminated the consignment contract with Onahama and have reached a point of drastic review of the consignment smelting business. Reduce exports which are unprofitable.
A EURUKOWE COMPANY GROUP
- Regarding factors for increase and decrease for the FY2021 results
[Net sales]
-  Increase due to higher overseas market prices, although sales volume will decrease due to a gradual reduction in electrolytic copper production as a result of a review of the ratio of consignment smelting costs. Copper: up ¥24.5 billion (Volume: down ¥3.4 billion, Unit price: up ¥27.8 billion) Gold: up ¥1.6 billion(Volume: up 1.1 billion, Unit price: up 0.6 billion)
[Operating profit]
- Increased due to an improvement in the balance of consignment smelting income and expenses resulting Impact of metal price fluctuations on

- Regarding factors for increase and decrease for the FY2022 forecasts
[Net sales]
- Increase as stated, mainly due to higher metal prices and a weaker yen. Copper: up ¥2.0billion (Volume: down ¥0.8 billion, Unit price: up ¥2.9billion) Gold: up ¥5.8 billion (Volume: up ¥4.6 billion, Unit price: up ¥1.1 billion)
[Operating profit]
- Decrease due to the absence of expected price gains from metal price fluctuations, although we expect an improvement in the consignment smelting balance. down ¥0.9 billion (Consignment: up ¥0.2 billion, Price gains: down ¥1.2 billion) - Terminated the consignment contract with Onahama Smelting and Refining Co., Ltd. and have reached a point of drastic review of the consignment smelting business. (Detail on the next page.)
- Terminated the consignment contract with Onahama Smelting and Refining Co., Ltd. and have reached a point of drastic review of the consignment smelting business. Resolved to terminate the consignment contract with Onahama Smelting and Refining Co., Ltd. to consign approx. 34% (approx.24,000 tons) of its annual copper production. (Disclosed on May 12, 2022)
[Metals segment going forward]
- The only contract smelter will be the equity method affiliate Hibi Kyodo Smelting Co., Ltd. - Copper production in FY2023 is expected to be about 46,600 tons per year. Due to domestic sales of about approx. 40,000 tons per year, can now be significantly reduce exports, which are unprofitable. =>We believe that this will enable us to secure profitability in terms of profit and loss on consignment. Based on the same assumptions as the forecast for the FY2022, operating profit in the metals segment will improve from ¥0.0 billion to ¥0.4 billion, as shown in the right table. On a consolidated basis, the operating margin will improve from 3.3% to 4.4%.
[Changes in the profit structure of smelting companies]
- In recent years, ore purchase condition income has been disadvantageous to smelters due to instability in supply and demand against the backdrop of China's strong demand for ore purchases, and it is difficult to expect a significant improvement in the ore purchase condition income in the future. (In part 1 of the figure will decrease) - On the other hand, smelting costs in part two of the figure are on the rise due to increased investment in environmental measures and facility maintenance and renewal, their depreciation burden, and soaring operating expenses such as electricity and heavy oil costs. (In part 2 of the figure will increase) - As a result, smelting costs have exceeded revenues from ore purchase terms and conditions, and the previously existing revenue has become a deficit structure in recent years. (In part 3 of the figure will decrease, become a deficit)

Figure of earnings structu

A EURUKEWE COMPENY GROUP

Net sales (Unit: Million yen)
Operating  profit  (Unit: Million yen)
- Regarding factors for increase and decrease for the FY2021 results
[Net sales]
- Increased due to increased demand for crystal products for semiconductors and coils for automotive applications, stable demand for high-purity metallic arsenic for compound semiconductors, and increased demand for aluminum nitride for use in thermal management components and semiconductor manufacturing equipment components, among others. [Operating profit] - Increased due to higher sales.
- Regarding factors for increase and decrease for the FY2022 forecasts
[Net sales]
- Remain flat year on year, with continued strong demand expected for high-purity metallic arsenic and aluminum nitride.
[Operating profit]
- Decrease slightly due to higher electricity and raw material prices for crystalline products.
- Ref: Features, destinations, market share, etc. of the main products
High-purity metallic arsenic
[Features] we have been mass-producing the world's purest high-purity metal arsenide at 99.99995% (7N5). We also boast the global top share. [Destinations] PC, smartphones, infrared luminous parts, red LD and LEDs, etc.
Aluminum nitride
The heat-dissipating materials, high thermal conductivity, insulation, heat uniformity, corrosion resistance, was made by our proprietary technologies such as molding, sintering and processing. [Destinations] Semiconductor manufacturing equipment components, high-power LEDs, resin-based heat-dissipation sheets, etc. [Market share] [Features] [Full production] Awareness as an excellent heat-dissipating materials is spreading, and full production continues due to  growing demand. We are investing in increased production. High-purity metallic arsenic
Net sales (Unit: Million yen)
Operating  profit  (Unit: Million yen)
- Regarding factors for increase and decrease for the FY2021 results
[Net sales]
Sales of cupric oxide increased due to higher unit prices, resulting from the rise in copper price, and strong demand for use in substrates, while sales of cuprous oxide increased due to higher copper prices, despite lower demand for use in repair vessels due to the impact of COVID-19.
[Operating profit]
- Increased due to higher sales.
- Regarding factors for increase and decrease for the FY2022 forecasts
[Net sales]
- Sales of cupric oxide to increase due to continued strong demand for use in substrates and the effect of higher copper prices. We also expect an increase in overall sales.
[Operating profit]
- Decrease overall due to the impact of deterioration in the cost ratio of cuprous oxide caused by higher raw material prices and other factors, although cupric oxide is expected to increase due to higher sales.
- Ref: Features, destinations, market share, etc. of the main products
Cuprous oxide
[Features] Antifoulant for ship-bottom paints to prevent barnacle build-up. [Destinations] Ship-bottom paints manufacturer. [Market share]
Cupric oxide
High precision plating raw materials used for oxidation catalysts or printed circuit boards such as PC, etc. Packaged boards (for PC and server processors), etc. [Destinations] [Features] [Features] [Destinations] [Basic material]
Sulfuric acid
uses the sulfur roasting method to produce sulfuric acid with very little impurity, and can be used as a food additive. Each industry such as chemicals, electronic devices, steel, food
Demand is always stable as an indispensable basic material for each industry. [Full production] Increased demand for package boards due to the miniaturization and high performance of electronic devices. Full production with existing equipment. Considering increasing production investment. Cuprous oxide
A EUROKEWE COMPeNSION

- Aim to sustainably expand our machinery business. Progress was made in the industrial machinery segment and UNIC segment in accordance with the basic strategies of the medium-term management policy 2022. In the rock drill segment, where the basic strategy has been revised, a fundamental review of overseas operations has made progress. - Industrial machinery segment is seeing an increase in projects and inquiries, as it seeks to move away from being a mere equipment manufacturer, including an increase in inquiries for belt conveyors and material machinery section plant construction projects. - Rock drill segment, as part of a review of its overseas structure, the Company changed its strategy by terminating local production of unprofitable hydraulic breakers in China and launching an attachment drill as part of its market development efforts in Southeast Asia. - UNIC segment, we promoted the development of large-size truck-mounted cranes, for which demand is increasing in overseas markets, and worked to expand our product lineup from small to large cranes to establish a foothold for sales expansion in the Asia and Middle East regions.
As part of the sustainable development of our machinery business, we acquired Yamaishi Metal Co., Ltd.,
which possesses powder manufacturing technology.
- By incorporating the metal powder handling technology and know-how of Yamaishi Metal, we will strengthen the development of the Group's powder metallurgy technology centered on molding, sintering, and heat treatment technologies, aiming to create key components and materials for machinery products with excellent sliding resistance, impact resistance, and high thermal conductivity. This is expected to differentiate us from our competitors, and further add value. - As for the metals segment, a drastic review of the consignment smelting business has been completed. At the end of March 2023, the consignment smelting contract with Onahama Smelting and Refining will be terminated, and the Company will further focus on its core machinery business. - Due to the decrease in copper production in the metals segment, we expect to be able to significantly reduce unprofitable overseas exports and ensure the profitability of the consignment smelting business. - The impact of metal price fluctuations on profit and loss can be reduced by terminating the contract with Onahama Smelting & Refining. focus on the machinery business to increase the absolute amount of operating income, thereby reducing the profit/loss impact of the metals division.
Vision for 2025 (ideal image for 150th anniversary of foundation) lev əts10q100" uoit Become a corporate group that leverages its reputation for category leadership and uniqueness to deliver growth. (Established November 6, 2015) Targeting consolidated annual operating income/ regularly in excess of ¥15 billion\
We have divided our Long-Term Management Plan "Vision for 2025" into 3 phases. we have set milestones for PDCA at phase 1&2 and are rolling out a Medium-Term Management Plan as an important tool for achieving our 2025 vision. Although we will promote our business activities by following the PDCA cycle, preconditions are changing, including the spread of new COVID-19 infections, Russia's invasion of Ukraine, and raw material shortages due to the shortage of semiconductors. considering incorporating these changes into the next Medium-Term Management Plan. =>The next Medium-Term Management Plan, which will take an ESG perspective important for the Company's long-term growth and provide direction for business growth strategies, capital policies, etc., will be formulated

▲ EURUKEWe o

- We intend to enhance the disclosures required for ESG ratings, and to strive
for inclusion in the FTSE index issues.
This spring, we were selected as a component stock of the FTSE Blossom Japan Sector Relative Index, which is used by the GPIF as an index. We will strengthen our ESG initiatives and disclosures required by the FTSE Blossom Japan Index and FTSE 4Good Index, which have stricter selection criteria. The FTSE ESG rating score for 2021 was 2.5 overall, but by 2025, the 150th anniversary of the Company's founding, we aim to achieve an overall score of 3.3 or higher and become an index stock.
FTSE Russell ESG rating score Aim to inclusion in the FTSE Blossom Japan Index
- Approach to climate change and decarbonization and our efforts.
Regarding our response to disclosures based on the TCFD and equivalent frameworks.
- We will gradually move forward with disclosures in line with the TCFD framework by using our responses to the CDP regarding risks and revenue opportunities related to climate change. First, we will implement early responses to CDPs that have not yet been responded to.
Efforts toward decarbonization (carbon neutrality, and net zero)
- We are currently developing a plan to implement CO2 reductions in line with the government's announced CO2 reduction targets of a 46% reduction in CO2 emissions by FY2030 compared to FY2013 and achieving carbon neutrality by FY2050. - Regarding carbon neutrality, we are considering converting electricity, which accounts for about 80% of our CO2 emissions (FY2020 CO2 emissions 20,903t | Scope 1&2), to electricity derived from renewable energy sources. We will aim for early disclosure, including plans to reduce CO2 emissions from non-electricity sources, which account for about 20% of our CO2 emissions. - As for net-zero emissions, we are proceeding with Scope 3 calculations and considering measures to absorb CO2 through the use of Company-owned forests, etc., with the aim of achieving net-zero emissions in the future. - We will also contribute to the realization of a decarbonized society by providing products, technologies, and services that are highly effective in reducing greenhouse gas emissions.
Ex.1) Belt conveyors (Industrial Machinery Segment)
=>belt conveyors can be used as an alternative to dump trucks for transporting earth and sand, thereby, contributing to the reduction of CO2 emissions in tunnel excavation, regulating reservoir development, dam function rehabilitation, and other construction projects.
Ex.2) UNIC crane (UNIC Segment)
=> The new control system of the UNIC crane reduces engine speed by up to 47%, reducing diesel oil consumption by up to 40% and contributing to a reduction of CO2 emissions by up to 40%.
- Selected for the first time as a component of the FTSE Blossom Japan Sector Relative Index.
FTSE Russell, a global index provider, has selected the Company as a component of the FTSE Blossom Japan Sector Relative Index for the first time. The Index was selected among 1,391 brands Japanese company as a component of the FTSE Japan All Cap Index, as ESG evaluation 50% or higher and ESG rating 2.0 or higher in each sector.
- Selected for the first time as one of the 2022 Health & Productivity Stock Selection.
Selected for the first time as one of the 2022 Health & Productivity Stock Selection, which selects companies from the TSE listed company with particularly outstanding health management initiatives that consider employee health management from a managerial perspective and strategically implement them. (Based on the results of the health management survey which conducted by the Ministry of Economy, Trade and Industry, it was selected based on one company in one industry from the listed companies with the top 20% of health management.)
- Other external evaluations
- Nikkei SDGs Management Survey 2021 Three-star rating in the Nikkei SDGs Management Survey 2021, which rates companies' commitment to the United Nations Sustainable Development Goals, SDGs.
- DBJ Environmental Rating Loan
DBJ Environmental Rating Loan from the Development Bank of Japan, which gave the Company the highest rating of particularly advanced in its commitment to environmental considerations for the seventh consecutive year since 2015. △ FURUKAWA COMPANY GROUP
- Formulated the Furukawa Company Group Basic Policy on Sustainability Initiatives.
In order to enhance the value of the Furukawa brand through marketing management that incorporates a CSV perspective, and to increase corporate value by implementing business operations that take into consideration the Group's CSR/ESG issues, we have formulated the Furukawa Company Group Basic Policy, and began implementing it on December 1, 2021. At the same time, we are strengthening and expanding our system for promoting sustainability activities and other initiatives.
Basic Policy
The Furukawa Company Group has positioned efforts toward sustainability as one of its most important management issues. In addition to contributing to help realize a sustainable society, the Group is committed to achieving sustainable growth and increasing mid-to-long-term corporate value by establishing a robust corporate foundation for growth and resolving social issues through its business.
- Framework for Promoting Sustainability
Established Sustainability Promoting Meeting in order to vigorously strengthen sustainability initiatives. The meeting will also work closely with the Risk Management Committee, which deal with enterprise risk management, and respond to any changes in the business environment and strengthen the Group's management base. [Furukawa Company Group's Approach to Sustainability] Strengthening and expanding the enterprise risk management system
【State of Capital Investment (Consolidated)】
【State of Depreciation and Amortization (Consolidated)】 Depreciation and amortization
4,100 Acquisition of buildings in the Real Estate Business, etc. Head office relocation work costs in the Other, etc. 【State of Research and Development Expenses (Consolidated)】 Research and Development Expenses
1,164 1,336 1,300 Increased due to construction of a new office building at Oyama Works, etc. Increased due to the establishment of new medical waste disposal facilities (Expansion of incinerator, Total approx. ¥2.6 billion from FY2022 to FY2024) at Gunma Kankyo Recycle Center Co., Ltd., etc. Increased due to the establishment of aluminum nitride production equipment (Total approx. ¥0.9 billion) in the Electronics Segment, etc. △ FURUKAWA COMPANY GROUP

【State of Metal Products, Foreign Exchange Rate (Consolidated)】

<About copper production> we have been reviewing our consignment ratio at the joint smelter and have been gradually reducing our copper production from 88,004 tons per year in FY2017. Copper production after FY2023 is expected to be about 46,600 tons per year, due to terminate the consignment contract with Onahama Smelting and Refining Co., Ltd. (At the end of Mar. 2023)
【State of Employee (Consolidated)】

△ FURUKAWA COMPANY GROUP

(Billion yen) (%) 14 12 10 304 8 6 4 2 0
(*) Interest-bearing debt-to-EBITDA ratio＝Interest-bearing debt (Term end) / (Operating income + Depreciation and amortization) A  FURUKAWA COMPANY GROUP
△ FURUKAWA COMPANY GROUP

△ FURUKAWA COMPANY GROUP

URUKEWE COMPENYABO
Thank you for your understanding and continued support. URUKAWA CO.,LTD.
Statements about future predictions contained in this document are based on various factors—including forecasts, expectations, assumptions, plans, acknowledgments, and evaluations—that derive from information currently at hand. Actual business conditions and activities involve various known and unknown risks and uncertainties and can be affected by them. Accordingly, forward-looking statements and suggestions based thereon may differ significantly from actual outcomes. Known and unknown risks and uncertainties than can potentially affect future forecasts are described in the Company’s Annual Report, Financial Statements and in the Business Risks section of the Company’s corporate website. However, such risks and uncertainties are not limited to those described therein. Consequently, the Company cannot promise or guarantee the achievement of key performance indicators[ (KPIs)] or forecasts, nor of future results, as described in this document. Irrespective of actual results, moreover, the Company is not obligated to update the content of this document after its release date, and does not have a policy to do so. The purpose of preparing this document is to help shareholders, other investors, and the like obtain a better understanding of the Company’s management policies and information, not to solicit any equity investments, including the purchase or sale of the Company’s shares. Investors are asked to take responsibility for final investment decisions in light of the aforementioned points. Please take responsibility when using this document. The Company bears no responsibility for erroneous or defective information contained in this document, nor of changes in [key performance indicators/KPIs] or forecasts, nor of any other losses caused as a result of using this document.
△ FURUKAWA COMPANY GROUP
Intentionally Blank
- Expedite growth and further improve profitability. - Disclosed May 25, 2020 *May 25, 2021 corrections Page 4 Addition Page 7-8 A FURUKAWA CO.,LTD. This document contains forward-looking statements that reflect the Company’s judgments based on various assumptions. The Company makes no guarantees or promises regarding the certainty, completeness, or implementation status of such statements. △ FURUKAWA COMPANY GROUP 1

1. Vision for 2025 "FURUKAWA Power & Passion 150"
2. Positioning of “Medium-Term Business Policy”
3. Management Policy
(1) Company wide strategy (2) Increase the value of the Furukawa brand through “marketing-based management” that incorporates CSV perspectives (3) Contribution to the SDGs through “marketing-based management” that incorporates CSV perspectives (4) Increase corporate value by emphasizing business practices that reflect CSR/ESG issues recognized and to be solved by the Group (5) Basic strategies and priority issues by segment (6) Product development system (7) Strengthen and expand our human resource base (8) Actively promote investments to increase corporate value (9) Establish a robust corporate foundation 2
May 8, 2020 partially revised (Under lined)
Become a corporate group that leverages its reputation for category leadership and uniqueness to deliver growth. <Policy for achieving the vision> Increase the value of the Furukawa brand through “marketing-based management”(*1) that incorporates CSV(*2) perspectives. Sustainable expansion of the machinery business Strengthen and expand our human resource base Actively promote investments to increase corporate value Establish a robust corporate foundation(*3) Aiming for FY2025(150 anniversary of foundation) Targeting consolidated annual operating income regularly in excess of ¥15 billion. (*1) Marketing-based management incorporating CSV: This means incorporating marketing into the core of management to provide products and services recognized as valuable in markets, as well as to resolve issues and problems faced by customers, with the aims of increasing corporate value and achieving sustained growth. It also reflects the Group achieve the Sustainable Development Goals (SDGs) and othervise resolve various social issues, including such domestic issues as building national resilience and the declini population, and thus help realize a sustainable society. (*2) Creating shared value (CSV): This is a management framework that enables_companies to co-create social value and corporate value by tackling social, environmental, and other issues. ('3) At the time of partial revision( May 8, 2020), we will work diligently to "Increase corporate value by emphasizing business practices that reflect CSR/ESG issues recogn by the Group." which is one of the "Establish a robust corporate foundation" 3
Vision for 2025 (ideal image for 150th anniversary of foundation) lsv əts10q100" noits:
  "əมlsv lsiวิร" bus Become a corporate group that leverages its reputation for category leadership and uniqueness to deliver growth. (Established November 6, 2015) Targeting consolidated annual operating income regularly in excess of ¥15 billion
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(1) Companywide strategy
“Expedite growth and further improve profitability.”
Under Medium-Term Business Policy 2022, with the aim of realizing Vision for 2025, we will work to increase the value of the Furukawa brand by advancing marketing-based management, which has been redefined to incorporate CSV perspectives. We will also strengthen our ability to find and solve problems in the field and our ability to produce innovation. Targeting sustained growth, meanwhile, we will “Strengthen and expand our human resource base,” “Actively promote investments to increase corporate value,” and “Establish a robust corporate foundation.” Under Medium-Term Business Plan 2019, we built foundations for renewed growth. By making all-out efforts to solidify these foundations, we will work to “Expedite growth and further improve profitability.” Sustainably expand the Machinery business, step up alliances and M&As, emphasizing business practices that reflect CSR/ESG issues recognized. In particular, we will continue striving to “Sustainably expand the Machinery business”— positioned as a core business under Medium-Term Business Plan 2019—in order to clearly identify priority investments and growth businesses. We will also step up alliances and M&As to achieve discontinuous growth. In addition, we will work diligently to “Increase corporate value by emphasizing business practices that reflect CSR/ESG issues recognized and to be solved by the Group.”
△ FURUKAWA COMPANY GROUP
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We will generate corporate value by providing infrastructure, products, technologies, and services that help solve social issues. At the same time, we will continue striving to create social value building social infrastructure and realizing a safe, environmentally friendly, and prosperous society. Marketing–based management incorporating and redefining CSV, this means incorporating marketing into the core of management to provide products and services recognized as va changing markets, as well as to resolve issues and problems faced by customers, with the aims of increasing corporate value and achieving sustained growth. It also reflects intention to achieve the Sustainable Development Goals (SDGs) and otherwise resolve various social issues, including such domestic issues as building national resilience and working-age population, and thus help realize a sustainable society.
Of the 17 SDGs, we are focusing particular attention on achieving Goal 11 (“Make cities and human settlements inclusive, safe, resilient and sustainable”) and Goal9 (“Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”). We will also strive to create social
(4)Increase corporate value by emphasizing business practices that reflect CSR/ESE issues recognized and to be solved by the Group One policy as part of our Vision for 2025 states our commitment to “increase corporate value by emphasizing practices that reflect CSR and ESG issues recognized and
Basic strategy We will continue our strategy of “Increasing our involvement in section plant construction projects and expanding our contractor business, including large-scale projects for both the public and private sectors, in order to transition from a standalone machinery manufacturer, strengthen our engineering capabilities, and enhance our business foundation in the domestic market," and thus establish a solid growth trajectory.
Priority issues
- Attract new orders by providing technical proposals for section plant construction projects and other projects. - Cultivate demand for SICON® enclosed hanging conveyors. - Strengthen earnings foundation by capturing replacement demand for pumps and material machinery. slurry pump SPL e-Performance Belt Conveyors designed for the Tokyo Outer Ring Road project SICON® Enclosed Hanging Conveyor designed for the Sakaigawa–Kanamori retention basin project (Machida City, Tokyoj SICON® is a registered trademark of ContiTech Transportbandsysteme GmbH
Basic strategy Strengthen our Life Cycle Support (LCS) capabilities, reinforce our earnings foundation for drill products (blast hole drills and drill jumbos), tap new markets, and launch new products to increase profits.
Priority issues
- Strengthen and rebuild overseas marketing capabilities. Reinforce overseas business foundation for blast hole drills. Create overseas business foundation for drill jumbos. - Build business models using Life Cycle Support (LCS). Strengthen stock business by providing various services that benefit customers' businesses (extended warranty, full maintenance, proposals for using ICT-based operation support systems to enhance work efficiency, etc.). - Further enhance lineup of products that contribute to safety and efficiency at tunnel excavation sites, such as fully automatic drill jumbos and automatic rock bolters.
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Basic strategy Secure stable income from domestic sales and expand income from overseas sales, by promoting advanced functions and higher added value in order to strengthen our competitiveness; advancing the stock business; and reinforcing our overseas product, sales, service, and technological capabilities.
Priority issues
- Reap benefits from capital investment in Sakura Works and promote further automation. - Strengthen competitiveness by increasing functionality and higher added value of UNIC cranes, mini crawler cranes, and UNIC carriers; develop new functions and options meet diversifying applications. - Expand overseas sales network and enhance sales capabilities of dealers. - Reinforce our service system. UNIC products active overseas Sakura Works
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Metals
Basic strategy Conduct drastic review of contracted smelting and refining business.
Priority issues
Identify profitability and future potential of contracted copper smelting business. Electrolytic copper
Electronics
Basic strategy Promote growth of strategic products and launch new strategic products.
Priority issues
- Aluminum nitride: Utilize high-value-added firing technology to expand business; develop products with high levels of thermal conductivity and toughness. - Diffractive optical elements (DOEs): Utilize microfabrication technology to increase applications to sensors (in addition to laser processing) in order to expand sales channels. - Hybrid coils: Provide product samples in order to emphasize high design flexibility. Aluminum nitride Purpose/ components for semiconductor manufacturing equipment(such as heater) and substrate materials
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Chemicals
Basic strategy
products Expand income from existing products and start commercializing and fostering newly developed
Priority issues
- Existing products
Sulfuric acid: Strengthen differentiation by emphasizing high-quality sulfuric acid products - Newly developed products Metallic copper powder: Enhance product quality, establish mass production and sales systems, and expand sales channels by providing product samples Metallic copper powder Purpose/ Conductive paste
Real Estate
Basic strategy
Secure stable income from Muromachi Furukawa Mitsui Building and effectively utilize Furukawa Osaka Building and other real estate owned by the Group.
Priority issues
Decide future plans for Furukawa Osaka Building. Muromachi Furukawa Mitsui Building (commercial name: COREDO Muromachi 2) Nihonbashi Muromachi, Chuo-ku
Basic strategy Turn development themes into products and businesses that directly contribute to Group operating companies; activate capabilities to find and solve problems in the field in order to improve productivity, which is essential for manufacturers.
Priority issues
- Commercialize products under development, such as fully automatic drill jumbos. - Promote development of solid electrolyte materials and mass production technology for all-solid-state batteries. - Strengthen training of engineers to lead the next generation through full-scale deployment of engineer development program. - Reduce environmental impact during mechanical system product development: Convert power load reduction (achieved through weight reduction and efficiency improvement) into CO2 reduction equivalent; set reduction targets for each main product; follow up using PDCA cycle.
(7)Strengthen and expand our human resource base
Basic strategy Build a motivating company that encourages individual employees to maximize their abilities and create new value.
Priority issues
- Develop human resources. Undertake drastic review of education system. - Promote Health and Productivity Management. Reduce total working hours per year, promote diverse workstyles, and improve health examination/re-examination rates. - Promote diversity. Promote employment of female planning staff and people with disabilities, and actively hire foreign employees. - Improve working environments. Review and maintain working environments that can address emergencies; strongly promote operational reforms.
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1 Capital investment plan*10 to support stronger manufacturing capabilities We will make capital investments mainly in the Machinery business (positioned as our core business) In the Rock Drill Machinery segment, we started a capital investment plan aimed at increasing the production capacity of the Takasaki Works and other facilities. We decided to postpone and reassess capital investment from the second stage in light of this segment's business performance and other factors.
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Alliances and M&A
We will consider and enter alliances and M&A with peripheral companies that fill the gaps and create continuity in our existing Machinery business, as well as with companies engaged in the fourth pillar of our Machinery business. Capital investments mainly in the Machinery business △ FURUKAWA COMPANY GROUP
We will make individual investment decisions while paying attention to profitability and taking into account risks and capital costs associated with each investment. We will also step up efforts to improve efficiency and profitability. At the same time, we will pursue overall optimization of business resource allocations and improve corporate value by incorporating cost of capital in our business portfolio management.
Corporate Value Improvement Process
Bubble Chart Aiming for Business
Portfolio Identification & Visualization
Illustrating the three performance indicators of each business segment onto the graph below enables the corporate value creation status of each business segment to be identified and visualized. Improving ROE Improving corporate value Corporate value creation power* (= ROIC – WACC) Corporate value creation power* 5 *5 Both “Corporate value creation power” and “Amount of corporate value created/year" are terms coined by Furukawa Co., Ltd.
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ROE Profitability Net income margin #ffciency Leverade Financial leverage Profitability improveme Efficiency improvement
△ FURUKAWA COMPANY GROUP
(9) Establish a robust corporate foundation: Capital strategies: Pursue optimal capital structure based on rating strategy
Allocation of operating cash flows
We will “actively promote investments that that contribute to increased corporate value” while aiming to establish a robust financial foundation. At the same time, we will endeavor to make optimal allocations of cash flows in consideration of shareholder returns.
Dividends
Our policy is to return profits to shareholders in the form of dividends appropriated from retained earnings. Specific dividend amounts are based on consolidated profits/losses. With the exception of special profit/loss circumstances, we endeavor in principle to pay annual cash dividends of ¥50.00 per share with a consolidated payout ratio of 30% or higher. In this way, we strive for stable, continuous shareholder returns.
Treasury stock purchase and cancellation
With respect to purchase and cancellation of treasury stock, our policy is to properly consider all relevant factors, including share price movements, capital efficiency, and cash flows.
*Rating strategy:
By FY2025 (ending March 2026), the final year of Vision for 2025, we aspire to achieve a financial soundness vision that will enable us to obtain a credit rating of BBB+ (or higher), which is one notch above the current rating issued 9 by a Japanese rating agency. To this end, we will continue striving to improve our financial soundness. (*) Debt-to-equity ratio: Interest-bearing Iiabilities (fiscal year-end) / Shareholders' equity (fiscal year-end) (*) Interest-bearing debt/EBITDA ratio: Interest-bearing debt (fiscal year-end) / [Operating income + Depreciation
(9) Establish a robust corporate foundation: Increase corporate value by emphasizing business
practices that reflect CSR/ESG issues recognized and to be solved by the Group
We will formulate medium-term CSR targets (fiscal 2020 to 2022) and develop a PDCA cycle of planning, execution, evaluation and improvement.
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