MIDTERM PLAN

Drawing the Future of the Daido Metal Group (Purpose)

What the Daido Group is Aiming to be (Vision)

Summary of Previous Midterm Plan and Issues

Clarification of Fields for the Daido Metal Group

Renaming business segments to achieve the business portfolio we are aiming for in the future,
for a Re-start from FY25

Future Shape of the Daido Metal Group

Longterm Outlook by Business Segment (Sales) 　

1. Further expand presence in the plain bearing industry through pursuit of Group synergy

Strengthen cooperation with overseas partner companies (Thailand and India etc.)

2. Develop new business and grow Life & Frontier business by 2x

3．Increasing profits through the expansion of Marine & Energy business

FY24 Operating profit contribution 20% → increase to 30%

Fundamental Policy for Financial Capital Strategy (FY25-FY30)

1. Improvement of profit margins through strengthening profit-generating capabilities
2. Investment in growth potential areas and returns to our shareholders
3. Control of total assets and reduction of interest-bearing debt through the promotion of balance sheet management

We will focus on improving ROE as a core strategy to enhance corporate value, and prioritize investments for the future and returns to our shareholders as our fundamental policy

Midterm Plan Main KPIs（FY25-FY30）

Cashflow Allocation Plan

• From a medium and long-term perspective, and to improve profitability, we will prioritise stable business management by creating stable business foundations through a reduction in interest-bearing debt etc.
• Once profitability improvements and stable business foundations were ensured, we will consider shareholder returns through flexible buy back share
• Reduce business forecast to be unprofitable in the future, investment allocated to business and organisational restructuring

FY25-FY27 Cash flow Plan

Four Action lines of the Midterm Plan

Action line 1 Structural Reform for Strengthening Profitability

• Eliminating loss making business and strengthening profit management by customer and by product
• Restructure systems for cost reduction through optimization of global production systems and increased efficiency
• Ensure appropriate depreciation standards through reforms to capex control, and strengthen inventory management
• Rebuilding the fundamentals of manufacturing by embodying “Quality is Life” for the new era and thoroughly ensuring Environment and Safety

Action line 2 Refinement of Core Businesses

• Multi pathway strategy for mobility, and strengthen sales of non-engine bearing products (Products for shock absorbers etc.)
• Acquiring anticipated increased demand from main Marine & Energy business customers

Action line 3 Strengthen Next Core and Semi Core Business

• Establish main applications for expansion of Life business and increase price competitiveness
• System structuring of Frontier business
• Smooth launch of the bearing business for offshore wind power plants in the Marine & Energy business

Action line 4 Promote Management Focusing on Non-Financial Capital

• Clarify human capital strategy and gradually shift to new strategy
  (including promotion of DX)
• Strengthen ESG initiatives focusing on increasing sustainability
• Promote “offensive governance” that contributes to increase corporate value
• Strengthen PR activities, make Integrated Report more sophisticated and link to website

Two Main Areas to Strengthen Non-Financial Capital Action line 4

Clarification of Roadmap (During FY25)

Strengthen Human Capital

Establish Personnel System

• Formulation of a Talent Portfolio, Internal
  Career Advancement Plan, Succession Plan etc.
• Review of appraisal system

Reform Way of Working

• Introduce FA system or Self Declaration system etc.

Strengthen Training and Recruitment

• Review of Internship program, Working Conditions
  (Starting Salary and Company Housing System) etc.
• Extend retirement age to secure staff
• Enhancement of the Education Curriculum for
  Young Employees
• Reinforcement of reskilling, Enhancement of
  Education for Mid-Career Recruits

Gradual Implementation (by FY27)

Promote DX- Cultural Reform

Organizational Activation

• Promotion of diversity
  (Recruitment of diverse talent, Promotion of
  personnel transfers within the group etc.)
• Enhancement of measures for women’s active
  participation 　
  (Community for those on childcare leave, Career
  training, Hourly annual leave, Childcare facilities etc.)
• Achieving a positive cycle of organizational revitalization
  through engagement surveys
• Make effective use of health events, 90th anniversary event

Cultural Reform

• Evolve from Top down + Bottom up
  → “Middle up down”
• Appoint people who can think and act independently
  as “Change Agents”

Global Contribution

• Encouraging participation in community events and volunteer activities

Supporting your movement
Supporting all movements and contributing

to
a fulfilling life for people around the world