The path to our "Long-term vision" is laid out in our long-term management plan SG-Vision 2030 (hereinafter "SG-Vision 2030"), which we disclosed in 2021. In this plan, we have set ourselves the goal of reaching the following standards as a corporate group.

In the first phase, SG-2023, we set the management theme of "transformation" and have been pushing forward with our vision of a company where stakeholders will say, "ShinMaywa has changed recently."
During this period, the global economy was hit hard by the spread of COVID-19. However, looking back at the performance of [SG-2023], our sales in fiscal 2021, the first year of the plan, exceeded the previous year's results and operating profit remained at the same level, once again highlighting that many of our Group's businesses form part of social infrastructure.
Social activity has since recovered, but inflation has accelerated in a short period of time, and our Group's current operating profit margin is below 5% due to factors such as soaring raw material prices and rising labor and transportation costs due to labor shortages. We need to take immediate measures to address the sluggish profit margin, which indicates our competitiveness, and a major factor for this stems from Special Purpose Truck segment, which is the core of our profits. Going forward, we will continue to take concrete measures, including price revisions.
In this context, we felt the theme of [SG-2023], [Transformation], as the Industrial Machinery and environmental systems segment, which had not received much attention until now, grew significantly, and we received many questions and voices of expectation regarding this segment. The main player in this leap is the rise of KOREA VACUUM LIMITED, which joined the group through M&A in 2018. The company manufactures equipment necessary for the manufacturing process of lithium-ion batteries installed in EVs (electric vehicles), and has responded well to the demands of customers who are planning capital investments for automotive batteries in response to the future spread of EVs. It has been five years since the company joined the group, but looking back on the M&A we carried out based on the quality of the company's products and its high adaptability to the global market, we feel that the decision at the time was correct.
In addition to this, although we have only just begun, at my own initiative we have established a New the Business strategies Headquarters at the head office as an organization dedicated to creating and launching new businesses. We have also started a new business idea generation activity hosted by this organization, in which employees will participate, and these efforts demonstrate both inside and outside Head Office our determination to work company-wide on the creation of new businesses, a long-standing challenge. This is also part of the "transformation" that will take us out of our current situation.
Furthermore, we have been able to continue paying dividends to our shareholders based on the dividend payout ratio we initially announced during the period of [SG-2023].

The theme of the second phase, SG-2026, is "Expansion." The three phases leading up to the lofty goals set out in SG-Vision 2030 are called "Transformation," "Expansion," and "Leap Forward," and SG-2026 will be the crucial three-year period leading up to the final phase, "Leap Forward."
Our sales for the fiscal year ending March 2024 (FY2023) were 257 billion yen. To reach the target level of [SG-Vision 2030], we must raise this by about 1.5 times. In addition, although we have not indicated the target level of operating profit here, improving profitability is a major proposition in addition to increasing sales. We will strive to increase operating profit, ROE, and ROIC, which were unachieved in [SG-2023], and first achieve the targets of [SG-2026] in order to meet the expectations of our stakeholders.

Currently, we are working towards these six policies in [SG-2026].

It is essential that we put these six policies into practice while being aware of the interrelationships between them in our management strategies, and this is diagrammed in the "Value Creation Process."
We would like to demonstrate how we will realize our expansion based on this "value creation process" by achieving the following management targets.

The source of growth is the revitalization of business activities - focusing on "Exploitation" and "Exploration" -

For our core businesses, we will focus on the following points to expand earnings. We will advance discussions regarding the current and future value of each business and product (business portfolio), and will focus on "deepening" our existing businesses while identifying growth investment targets.

Focus points by segment (partial excerpt*)

Segment	Focus points
Special Purpose Truck	Making component devices intelligent → Creating new added value Expanding the scope of special purpose truck subscription business Expanding sales of component products overseas
Parking Systems	Strengthening support for CASE using ShinMaywa Parking Support App ”SPASA”" Expand sales of remote-controlled automated aircraft passenger boarding bridge Diversification of parking facility maintenance service business (social infrastructure, industrial equipment, etc.)
Industrial Machinery & Environmental Systems	automatic wire processors: Automated product development for high-speed communication cable processing Vacuum technology: Development of peripheral equipment for EV manufacturing equipment, expansion of existing product variations Environment-related: High added value and labor saving through application of original AI / IoT technology
Fluid	Stormwater countermeasures: Expanding the scale of measures against heavy rain and flooding Sewerage sector: Energy conservation, after-sales services in response to social changes, and introduction of digital transformation technologies Strengthening competitiveness in Asia by utilizing production bases in Thailand
Aircraft	Civil aircraft: Research into new composite materials and recycled materials → product development Amphibian: Stabilizing revenue and strengthening operational support by launching a project-based business (PBL)-related business Appealing to future customers using the fixed-wing unmanned aerial vehicle (UAV) (developed in-house)

*For more detailed information, please refer to the explanatory materials  "Medium-term Management Plan [SG-2026] "" posted on the " Presentation of Financial Results " page of this website.

• Presentation of Financial Results

In addition, as for the "exploration" activities aimed at creating new businesses, centered around the New the Business strategies Headquarters mentioned earlier, we are promoting over 10 themes, including those that have already been announced during the [SG-2023] period and those that are currently being evaluated for commercialization, by assigning a main person to each. It is said that the probability of a new business succeeding is "one thousand and three," and we do not believe that it will be easy to create new sources of revenue, but we will work tenaciously to envision the realization of Long-term vision and present "new businesses" that will support our group.

New business themes that have already been announced

theme	Summary and key points
Small-scale distributed water circulation system	As a measure to combat the aging of sewerage infrastructure and depopulation, we are collaborating with WOTA Co., Ltd. to promote the introduction of small-scale decentralized water treatment infrastructure.
Hydrogen supply chain business	Working with Frein Energy Co., Ltd. to promote the spread of hydrogen transportation and storage flows using organic hydride technology.

To be a corporate group that is widely recognized by society
- Always together with our stakeholders -

In our newly announced "Value Creation Process," we have set out a management stance that is more conscious of the stakeholders with whom the Group has contact.
Our "Management philosophy" is the fundamental philosophy of our management, and expresses the reason for our group's existence, our purpose, and our mission. As a waypoint on the way to our goal, our "Long-term vision" shows where we want to be in 2030. These were established on the occasion of our 100th anniversary, but we realized that while they each express our will, they lacked a perspective that addresses our stakeholders.
Therefore, in the process of formulating [SG-2026], we reviewed our "value creation process" and clearly indicated "value provision to stakeholders and important issues."

Value provided by the Group and points of focus

Stakeholders	Value Proposition	Points of focus
Customers	Continue to contribute to solving issues facing customers with our technologies, products, and services	Customer Satisfaction quality Delivery
Employees	Provide opportunities for employees to autonomously take on challenges and an environment in which capabilities of the individual can grow with the organization	engagement Career Development Promoting D&I Health and Safety
Business Partners	Achieve co-existence and co-prosperity with business partners through fair transactions and equal partnerships	CSR Risk Assessment Fair price negotiation
Shareholders	Strive to improve management through dialogue with shareholders, and aim to maximize corporate value	Improving shareholder value Dialogue with shareholders and investors
Local communities and Society	Solve issues facing local communities and society through our business activities to develop togethe	Conclusion of a regional comprehensive partnership agreement Creating jobs for people with disabilities

Our group's livelihood is manufacturing, and in addition to the added value of our products, one of our strengths is the support system we have in place within the group to ensure that our customers can use our products with confidence every day. In addition, we are proud to be on par with other companies in our industry that specialize in a wide range of fields that do not fit into the category of "transportation equipment manufacturing.
In this environment, we have demonstrated the value of our existence by gathering management resources for our business activities and meeting the expectations of our customers, but in the face of increasing social demands from various quarters, and as a corporation listed on the prime market of the Tokyo Stock Exchange, we are committed to being a company that is always needed and expected through our daily activities, valuing our contacts with our customers. We are committed to being a company that is always needed and expected by you through our daily activities. We intend to reward our stakeholders by practicing the points of attention and focus indicated here and realizing the contents described in the Value Provision section.
In May 2024, we submitted our remedial measures to the Tokyo Stock Exchange, and we are currently working to put them into practice. We are currently working to put these measures into practice. Please refer to the message from the Director, Managing Executive Officer and General Manager of the Finance Department at Kume.

Pursuit of Management philosophy- What I value -

So far, I have explained our "Long-term vision" looking toward 2030 and the management plans leading up to it -- SG-Vision 2030, SG-2023, and SG-2026. All of this is possible only if the SG Group is a company that can earn the trust of our customers and other stakeholders.
The "Corporate principles Mission Statement," "Action guidelines," and "Code of conduct" are shown at the base of the "Value Creation Process" diagram because it is assumed that the corporation and each and every employee working there will follow these.
In this context, we deeply regret the fact that the Japan Fair Trade Commission conducted an inspection of Parking Systems Division in September 2023, and we apologize for causing concern to our stakeholders. We would like to take this opportunity to apologize for the prolonged anxiety this has caused.
As it has been reported that multiple companies are under investigation in this case, it is likely that it will take some time before the results of the investigation become clear. We are currently fully cooperating with the Fair Trade Commission's investigation, and have once again committed everyone in the group to practicing our "Corporate principles," "Action guidelines," and "Code of conduct," while also working to further strengthen our risk management system. In addition to responding when fraud or scandals are discovered, we intend to place the utmost emphasis on preventing them from occurring.
It's been eight years since I became president, and I feel that the current society is changing more drastically and at a faster pace than any other era I have experienced. In this context, I have consolidated my own beliefs and the thoughts of my executives into the current SG-2026 and "Value Creation Process" to provide an unwavering foundation. While cherishing our history, we will strive to be a corporate group that can sprout new businesses to achieve sustainable growth and that all stakeholders can look forward to in the future, so we would appreciate your continued guidance and support.