Nitto Boseki : Notice Regarding Nittobo Group's New Medium-Term Management Plan (FY2024-2027) （545KB）

May 9, 2024

Press Release

Company name: Nittobo (registered as Nitto Boseki Co., Ltd.)

Representative: Hiroyuki Tada, Representative and Chief Executive Officer

(Securities Code: 3110, TSE Prime Market)

Contact: Nobuko Tame, General Manager, Corporate Communication Dept. (Tel: [phone])

Notice Regarding Nittobo Group's New Medium-Term Management Plan (FY2024-2027)

Nittobo (the "Company") announces that, having commemorated its 100th anniversary in 2023, the Company has formulated its new 4-yearMedium-Term Management Plan (FY2024-2027) in preparation for achieving Big VISION 2030, the Nittobo Group (the "Group")'s long-term vision for 2030, in order to achieve the next 100 years of sustainable growth. An overview is presented below.

1. Review of the Previous Medium-Term Management Plan (FY2021-2023)

During the three years of the previous Medium-Term Management Plan (formerly called Mid-Term Business Plan), we steadily implemented four key initiatives, including strategic investment for future growth, and management foundation reinforcement for the Group as a whole.

* Carbon foot print

After entering the final year of the Medium-Term Management Plan, a sharp recovery in demand for high- value-added glass yarn and cloth made a contribution to results, but earnings fell short of targets. Nevertheless, the financial soundness of the Group was maintained.

	FY2020 ACT		FY2023 ACT		FY2023 Target
Net Sales	78.7 billion yen		93.3 billion yen		100.0 billion yen
Operating profit	6.0 billion yen		8.4 billion yen		14.0 billion yen
EBITDA	12.3 billion yen		15.6 billion yen		25.0 billion yen
（EBITDA Margin）	(16%)		(17%)		(25%)
ROE	8.4%		6.6%		10%
Equity ratio	53.7%		55.7%		55%
Capital investment	56.8 billion yen		29.5 billion yen		45.0 billion yen
(based on acceptance)
	4 years cumulative		3 years cumulative		3 years cumulative
	(including M&A)
ROIC	2.9%		3.8%		6%
D/E ratio	0.45×		0.45×		0.4×

2．Overview of the New Medium-Term Management Plan (FY2024-2027)

The Group's Corporate Philosophy is to enhance its significance by striving to create healthy and comfortable lifestyles, and thereby continue to contribute to the realization of prosperous communities. In accordance with this basic policy, we have designated Big VISION 2030 as the Group's long-term vision for 2030, and aspire to become a corporate group that continues to create global No.1 niche businesses, and that contributes to "Environment/Energy" "Digital Society," and "Health/Security/ Safety" for realizing a sustainable society.

＜Nittobo Group as Global Niche No. 1＞

• We extract the full potential of ideas to uncover latent demand, and respond to pinpoint needs.
• We leverage our technological strengths to also take on the challenge of new fields and advance the development of products indispensable to society.
• • We establish a unique positions in product development and deepen our relationships with global clients.

Execution over the new Medium-Term Management Plan will pivot on the following two key points.

1. Steadily harvesting the fruits of investment and promoting existing growth strategies to realize Big VISION 2030
   We will steadily harvest the fruits of investments made during the previous Medium-Term Management Plan in glass fiber for electronic materials and the medical field, and continue to actively invest for growth to enable us to respond to rapidly expanding new markets.
2. Building new pillars of revenue for the next 100 years (launch of new structure)
   In April 2024, the previous three divisions were reorganized into five business divisions in a transition to a new organizational structure.
   In addition to building additional pillars of revenue to follow existing businesses, the launch of this new system will help us unify management of development, manufacturing and sales, and strengthen activities that center the customer perspective.

＜Basic Policy of Each Business Division Strategy＞

〇Quantitative target (FY2024-2027)

Net sales	FY2027 target		135.0 billion yen
Operating profit	FY2027 target		20.0 billion yen
EBITDA	FY2027 target		32.0 billion yen
ROE			8％ or more*
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
		 Our basic policy is to pay a dividend of not
Shareholder Return Policy		less than 55 yen per share, targeting a
	dividend payout ratio of 30% of steady
			earnings
		 When operating profit targets are hit on a
Establishing of incentives for employees		single-year basis, 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 2.5 billion yen thereafter

• a level consistently exceeding cost of capital

○Environmental targets

Accelerating initiatives to resolve environmental issues to be sure we achieve FY2030 targets. 【FY2030 Targets】

1． Reduce CO2 emissions：30% (compared to FY2013)

2． Reduce glass waste ：achieve net-zero waste glass

3． Develop products that contribute to the environment

〇Human resources strategy

Promote initiatives for securing human resources and creating job satisfaction in preparation for sustainable growth.

1．Securing human resources：Aim for 20% increase globally by FY2027

2．Creating job satisfaction ：Aim to enhance employee engagement

○Shareholder return policy

The Company's basic policy is to maintain a capital structure that takes into account the balance between financial soundness and shareholder returns, etc., and the dividend policy for shareholders has been designated one of the most important issues facing management. While continuing to secure profits based on the execution of the new Medium-Term Management Plan, the Company is targeting a dividend of not less than 55 yen per share and a dividend payout ratio of 30% of steady earnings.

(Note on the Handling of This Document)

Numerical forecasts contained in this document were created on the basis of information 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 of operations include, but are not limited to, economic conditions, demand trends, exchange rate fluctuations and fluctuations in fuel prices.