May 15th, 2025

ASAHI YUKIZAI CORPORATION

　We at ASAHI YUKIZAI CORPORATION are currently implementing the mid-term business plan that was started in fiscal 2021 (“GNT2025”): Fiscal 2025 is the final year for the plan. We have already begun formulating a new mid-term business plan which will start in the coming fiscal year, whose with the outline expected to be announced around November 2025. Prior to its announcement, we hereby would like to inform you of the overview of the vision we aim to and our business policy, along with the numerical targets concerning the new mid-term business plan we are currently formulating.

　In the new mid-term business plan, we are planning to include our policy on cash allocation and our plan for utilizing our intangible property, as well as contents concerning the businesses with a focus on capital cost efficiency.

Outline of the new mid-term business plan

　With our mission of “Supporting customers’ manufacturing process with valued solutions,” we aim to achieve growing and expanding business to raise the corporate value. Taking advantage of the designing technology, production technology, manufacturing power, quality control, engineering potential, capacity to meet the customers’ needs and others which have been cultivated over eighty years of providing solutions to customers, we will grow on a global scale to achieve net sales of 120 billion yen, operating profit of 20 billion yen, ROIC of 10% and ROE of 15% in fiscal 2030.

　We position the period up to fiscal 2030 as the preparatory period for a leap in the future and will remain positive in growth investment such as those in construction of new plants and development of new products, along with those for increasing business efficiency through digital transformation and for human capital, while paying due attention to the capital costs. Simultaneously, we will realize the business growth and expansion through expanding business including inorganic growth and implementing portfolio strategies with various activities.　We assume that operating profit will grow only moderately during the period before the growth investment begins to contribute to business results increase; however, we will carry out the business portfolio strategy in which optimal allocation of managerial resources, conversion into highly profitable businesses along with maximization of growth opportunities and diversification of risk are considered, so that we will maintain firm the profitability of existing businesses and, with regard to the businesses in which we have already invested, we will create cash steadily.

　Regarding the cash allocation, we will carry out investment for future business expansion and will flexibly return profits to shareholders and purchase our own shares as treasury stock with the rough target of 50% of total payout ratio under the new policy for returning profits to shareholders. In relation to the influence the investment for growth will have on operating profit or ROIC, we will raise the profit ratios and efficiency of invested capital by controlling the ROIC by the business division respectively and will make the invested capital optimally balanced by considering the financial soundness while making use of liabilities, to raise the ROE. In and after fiscal 2030, in anticipation that the effects of investment for growth will be felt, net sales are targeted at 200-billion-yen, operating profit at 40 billion yen, ROIC at 13% and ROE at 18% in around 2035.

Major policies in business divisions are mentioned below.

In the valve & piping systems division:

[1]We will increase production capacity by promoting digital transformation and automation and will promote construction of new plants with improved quality level and cost competitiveness, so that we will become more competitive in the global markets and expand sales of thermoplastic valves.

[2]For the semiconductor-related industry, which has been growing rapidly, we will actively expand DymatrixTM products having strength of high-precision flow control and low dust-generation technologies, along with the innovative products for pure-water production lines, so that we will reinforce and expand our production system to strengthen new earning power.

[3]In the Japanese domestic markets, we will increase the opportunities to provide solutions to customers to raise customer satisfaction by reinforcing the sales companies that supply anti-corrosion solutions and its cooperation with the engineering division and will aim to increase repeat customers and acquire new ones.

In the resin division:

[1]We will endeavor to raise the operating rate and productivity at new plants both in Japan and overseas, in order to stably supply high value-added products designed for semiconductor-related industries, which make use of our strength in low-metal technology, synthesis technology and refining technology. In addition, we will promote the expansion of the range of the use of products by further improving the line-up of new electronic materials other than phenolic resin to meet the needs from the growing semiconductor markets and to become more competitive, so that we will further expand profits and increase profitability.

[2]For the casting industry, we will promote development and sales expansion of high functional resins that makes it possible to promote sophistication and to reduce weight and, at the same time, we will raise the profitability by optimizing the manufacturing system.

[3]Regarding overseas business, we will pursue new growth opportunities by positioning India as the most important area, following China in which we have been promoting business expansion.

N.B.: It is possible that the numerical targets may be revised following the changes in the market environment surrounding our company as well as in the situation of geopolitical risks.

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