REVISED BUSINESS PLAN

2021-2023

February 22, 2022

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Vision 2023

Recovery, Growth and Diversification

 Strengthening Management Foundation by

 Focus and concentrate resource to future growth market and application in automotive, industrial and
consumer market particularly in decarbonization
 Continuous improvement of business process including digitalization

 Commit to ESG activities for supporting sustainable development goals

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Updated 2023 target numbers is based on Revised

the following reasons.

1. Business Plan FY2021-FY2023 was set in Feb. 2021, aiming to achieve 1,080 oku yen of sales and
70 oku yen of operating income in FY2023. This Business Plan was based on the assumptions
that the market would remain weak in FY2021 as in FY2020 being affected by Covid-19.
2. We have experienced significant changes in our business environment in the past period:
exchange rate deviation, particularly appreciation of renminbi, continued soaring material cost
and energy prices, high logistics expense due to supply chain disruption, etc.
3. Despite those negative factors, we have won many new business especially in the EV/xEV market.
4. We made a rolling forecast for the Business Plan, and accordingly would like to update the target
numbers to achieve in FY2023 to 1,270 oku yen of sales and 75 oku yen of operating income.

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Master Plan Stage I, II, III & New BP Revised
Updated 2023 target numbers (100 Million yen = Oku yen)

Master Plan 2012-2023 2021 2022 2023

BP 2012-2014 BP 2015-2017 BP 2018 ++ New BP 21-23

Stage I Stage II Stage III
Sales: 776 Sales: 901 Sales: 1,270
OP: 33 OP: 62 OP: 75
Stage I: Building a base & Operational restructuring
Stage I
Targets and Results
Sales Target and results: 600 → 776
2012 – 2014
Operating income: 50 → 33
Stage II: Market Development & Growth
Stage II Targets and Results Sales Target and results: 1,000 -> 901
2015 – 2017 Operating income: 50 -> 62
Stage III: Growth & Diversification (Updated 2023 target)
Stage III Targets and Forecasts Sales Target and forecasts: ≥1,000 -> 1,080 ->1,270
2018 – 2023 Operating income: 100 -> 70 -> 75
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Business Plan FY2021- FY2023 Revised

(100 Million yen = Oku yen)

Sales OI 250.00

1270
1,190
1,200.00

1,049 200.00

975 943
900.00 844
150.00

600.00
100.00

75
54 53 55
300.00
35 50.00

28

0.00 0.00

2018 2019 2020 2021 2022 2023

P P
Business Plan 2018 - 2022
New Business Plan 2021 - 2023

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Priority Action Plans FY2021 – FY2023

At the final stage of Master Plan, we continue to grow sales and operating
income. In addition, further expand our target market and products lineup,
and reinforce business foundation.
Market
Automotive: Maximum focus on EV/xEV and become the market leader.
Industrial and Consumer: Focus application related to decarbonization, digitalization, and medical market.

R&D
Development through open innovation with universities and technical alliance for both coil and non-coil
products

Business process
Continuous improvement in efficiency fully utilizing IT system, and minimizing overhead cost

M&A
Continue to search for M&A target for future growth
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Numerical Targets Revised

FY2021- FY2023

Sales 1,270 oku yen

Operating Income 75 oku yen

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Details of Numerical Targets Revised

(100 Million yen = Oku yen)

P/L Statement Original Target Update

Existing M&A Total Existing M&A Total

Business Business
Sales 1,080 * 1,080 Sales 1,270 * 1,270
Operating 70 * 70 Operating 75 * 75
Income Income
KPIs
 ROIC : 6.39%  ROIC : 6.08%
 CCC : guideline 70 days  CCC : guideline 87 days

Plan Assumptions
Exchange rates USD 104.9 Exchange rates USD 114.0
EUR 123.8 EUR 129.9
CNY 16.0 CNY 17.9
Copper price 8,000 USD/ton Copper price 9,400 USD/ton

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Numerical Targets by Market Revised

2021 (100 Million yen = Oku yen)

2021 2023 Target CAGR

20.2%
Automotive 628 825 14.6%
1,049 Industry 209 230 4.9%
19.9%
Consumer Electronics 213 215 1.1%
59.8%
Total 1,049 1,270 10.1%
2023 Target

17.1%

 Automotive: Strong growth in EV/xEV market

18.0% 1,270
 Industry & Consumer: Stable growth in FA, DX, 5G and Decarbonatization
64.9%
related application
Automotive Industry Consumer Elec

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 EV/xEV Market | Business growth

xEV vehicle sales global outlook

Analyst A Analyst B Sumida estimation
4500

4000
Market CAGR (2020-2023) is 27%.
3500
CAGR | 27%
3000

2500
2020 - 2023 Sumida will target to achieve over 20%
of the total Sumida Group Sales in
（10K units)

2000

1500
EV/xEV market in 2023.
1000

500
Sumida will target to grow
approximately 40% CAGR.
0
2018 2019 2020 2021 2022 2023 2024 2025 2030

This graph shows the total number of xEV car sales outlook.
Based on the data provided by institutional analyst A & B, Sumida built our own outlook.

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Automotive Market | Products Focus
ACTUATOR KEYLESS ENTRY SYSTEM
(ABS, Injection coil, Suspension system,
EV battery management system, Market growth will continue.
Industrial hydraulic system ) Number of installations of this system will
Stable growth further grow.
Diversify to industrial application

Charging Station Location of Sumida products EV/xEV

48V Ancillary Units:
Climate Compressor DC/DC
Power Steering HV/ 48V
48 V Battery 12 V Appliance
12 V Battery HV/ 12V Infotainment

Engine
Strong growth
HV Battery
CAGR appx. 40%
Gear box
(400V/ 800V)
Value added through
Modulization
HV Ancillary Units

On Board
Inverter HV
Charger

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Industrial Market – Decarbonization | Medical
Low Voltage Circuit Charging Cable Coil for Bone Diamond Quantum
Solar Energy Breakers (application
< 1.000 V) (E-Car) Growth Stimulator Magnetics Sensor

Solar Inverter

Micro Inverter

Transformer, coil

Development through open innovation with universities and technical alliance for both coil and non-coil
products
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Consumer Electronics Market
5G Digitalization

Support 5G and Digitalization market with our wide variation of products and solutions

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Regional Strategy for Focus Revised

ASEAN North America

 Drive new business development in Business expansion through:
India, Vietnam and Thailand especially
in automotive & industrial market.  Strengthening the function as
technology center targeting EV/xEV
 Expand production location in market
Vietnam in order to support  Further synergy creation among
customers outside of China group companies in NAFTA region
The second factory in Quang Ngai has started
Merger of two U.S. subsidiaries as of Dec. 31,
operations in February 2022 followed by the third
2021
factory which is expected to start operations in
November 2022.

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Strategies on Manufacturing

Made in Market Material Purchasing

 Optimize production location based on  Strengthen centralized purchasing system to reduce
customer locations, material sourcing etc. the purchasing costs.
realizing minimum total production cost Labor cost (DL cost)
CAPEX  Rate of increase of minimum wage is expected to
 Around 70 to 80 oku yen level each year for be as same level as last 3 years.
next 3 years  Cancel out DL cost increase via introducing semi or
Major areas of CAPEX full automation.
 Automotive related Overhead (fixed costs)
 Industrial and Medical related
 Control absolute overhead cost
Plant Expansion
 Efficiency up through digital transformation
 Vietnam Quang Ngai plant – phase III

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Strategies on M&A Activities
Category I Category II Category III
Upstream
New Technology

Coil add Non-Coil

Company Coil Business Passive Components
Company
Customer
Downstream

 Continue to search for, select, and negotiate with the company(ies) to merge and
acquire on a global basis and based on the above 3 categories.

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ESG
Revised

With our business nature, in power-related electronics, we focus our value to society on bringing
solutions that are both designed and manufactured to help achieve global zero emissions goals.

Priorities to achieve this:

1. Targeting specific markets with innovative products/solutions that help in reducing carbon emissions
2. Operational, energy and waste efficiency – optimizing efficiency, utilizing green energy & recycled materials where
possible
3. Working together with our stakeholders to support the 17 UN Sustainable Development Goals

We committed ourselves in July 2021 to set a science-based target for

greenhouse gas emissions reduction through the Science Based Targets
Initiative (SBTi).
Mid-term CSR Goals has been set in November 2021.

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Mid-Term Priorities Areas
Revised

• Energy Efficiency
• Waste Reduction & Recycling
ENVIRONMENT • Adoption of Sustainable Energy
• Sustainable Resource Use
• Prevention of Pollution

• Labour & Human Rights • Social Contribution

• Develop New Technologies &
SOCIETY
Solutions for a sustainable future
• Responsible Supply Chain

• Compliance & Risk Management

• Product Quality & Security
GOVERNANCE • IT Security
• Transparency
• CSR Training & Promotion

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For Further Growth
Sumida Business Principle:Global, Speed, Focus

Global
Act as a Global One in all aspects, including markets, customers,
management staff, organization (e.g. manufacturing)

Speed
Work to be a pro-active company so as to quickly handle a need and make
a decision

Focus
Keep focusing on electronic components, functional modules, and also
work to expand the business domain in non-coil fields
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Financial Plan

• Financial Targets
• Operating profit bridge analysis
• Monitoring KPI
• CAPEX Plan
• Business and Internal control System to support the plan

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Financial Targets Revised

（Millions of yen）

FY2021 Actual FY2023 Target FY2023 Target Update CAGR

announced on Feb. 8, 2021

Sales 104,920 108,000 127,000 10.1%

Operating Income 5,326 7,000 7,500 18.7%

Net Income attributable to
SUMIDA CORPORATION
2,629 3,900 4,500 31.1%

《Forex assumptions》

US$/yen 109.23 104.90 114.00

euro/yen 129.83 123.80 129.90

renminbi/yen 16.89 16.04 17.90

LME Copper price 9,315 8,000 9,400

EV/xEV business drives sales growth

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Operating profit bridge analysis Revised

Profit increase items

OP Selling price increase 3,738

7,500 Sales increase 2,918

5,518
Efficiency 1,955
+2,174 Subsidiary liquidation loss in FY21 415
5,326
4,580 Levevrage of fixed cost 374
A Profit increase amount 9,401

Profit decrease items

Material purchase price increase △ 1,607
Selling price erosion △ 1,496
Asia Welfare & Wage impact △ 907
EU wage impact △ 889
R&D expense △ 769
Rate Impact △ 676
Expense except R&D △ 377
EU flood subsidy in FY21 △ 362
Compensation in FY21 △ 144
B Profit decrease amount △ 7,226
FY2021 FY2023
Act Plan A(Profit increase amount) – B(Profit decrease amount) = 2,174
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Monitoring KPI Revised

FY2023
FY2021 Actual FY2023 Target
Target Update
Cash Conversion Cycle (CCC) 119 days 70 days 87 days

ROIC 5.0% 6.39% 6.08%

WACC 4.9%

EVA spread (ROIC - WACC) 0.1%

ROE 7.4% 10.83% 10.69%

Net D/E ratio 1.20 1.10 1.02

Given chip supply shortages and logistics problems at this time,

higher inventory level is assumed for FY2023 target update.

23
CAPEX Plan Revised

（ Millions of yen)

TOTAL CAPEX

Mid-Term Plan
FY2018- FY2020
(FY2021 - FY2023)

23,304 21,783

【Estimated CAPEX Plan】

2021 2022 2023

6,320 9,484 7,500

The figures include Lease Assets acquisition, which does not appear as CAPEX in Statements of Cash Flows.
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Business and internal control system to
support the plan

1. Global cash management by using Cloud solution

Global cash forecast to manage cash balance
Capturing all the data on bank loans in 7 countries

2. Forex exposure management

Continuous natural hedging (sales cash-in marrying cost/exp. cash-out)
Centrally managing forex exposure at a HK company

3. Internal Control over group companies

Stand-alone financial statements of each subsidiary are not be used to evaluate its performance.
Profitability is controlled by each business unit consisting of several subsidiaries.

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Business and internal control system to Revised

support the plan

4. Global one ERP system implementation in progress
Completed finance module implementation
Other operation modules’ implementation in progress

5. DX status
Extensive utilization of cloud system
Global cash management
Indirect procurement just implemented
AWS migration in progress
Travel arrangement and expense
Video Conference used for years before the Covid-19 pandemic
Electronic approval instead of physical HANKO also used for years

6. Accounting Shared Service Center (new in the update)

Accounting Shared Service Center(ASSC) started its initial operations in China in January 2022.
ASSC will cover 6 Chinese factories first in 2022 and then Vietnam factories in 2023 to improve
productivities.

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Disclaimer Regarding Forward Looking
Statements
Sumida Corporation (referred to as "Sumida") makes this document available for informational purposes only. This
document contains certain “forward-looking statements” which reflect management’s current views and the
assumptions made with respect to specific future events and financial performance. Such statements are based
on currently available information, and by their nature are subject to various risks and uncertainties that could
cause actual results to differ materially from those projected or implied in “forward-looking statements” and from
historical trends.
These risks include but are not limited to domestic and global economic business conditions, successful
execution of our strategy and our ability to realise the resulting benefits, our ability to develop and market new
products, changes in legislation, legal claims, changes in exchange and interest rates, changes in tax rates,
actuarial assumptions, raw materials and employee costs, our ability to restructure our operations, the rate of
technological changes, political, economic and other developments in countries where Sumida operates,
industry consolidation and competition. As a result, Sumida’s actual future results may differ materially from the
plans, goals and expectations set forth in such forward-looking statements. Sumida is under no obligation to, and
expressly disclaims any obligations to, update or alter its forward-looking statements, whether as a result of new
information, subsequent or otherwise.
Sumida is under no liability of any person in respect of any loss and damage which may be suffered or incurred,
or which may arise directly or indirectly in respect of information contained.
All rights, including, but not limited to the copyright, reserved. No part of this document may be reproduced in
any means without the prior written permission of Sumida.

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