Long-Term Vision /
Medium-Term Business Plan(Overview)

Long-Term Vision
Medium-Term
Business Plan Stage Ⅰ
Medium-Term
Business Plan Stage Ⅱ

Nippon Soda Group
Long-Term Vision
“Brilliance through Chemistry 2030”
FY 2021―FY 2030

Vision of Nippon Soda Group

Since its establishment in 1920, Nippon Soda has provided new value to society through chemistry and contributed to the development of society.
The group supports people's everyday lives by delivering a range of chemical products and services to the agricultural, healthcare, environmental, and ICT fields.

Our Mission（Value Creation Process）

Create new value through the power of chemistry and realize increased corporate value through our contributions to society.

Nippon Soda Group Long-Term Vision “Brilliance through Chemistry 2030”

While accelerating the expansion of our high-value-added businesses and the liquidation of unprofitable businesses, we will promote thorough management streamlining and reform our business portfolio to be resilient toward changes in thebusiness environment and to produce stable earnings.
While balancing growth investment and shareholder returns, we aim to increase capital efficiency.

KPIs of Long-term Vision “Our Vision 10 Years in the Future” (Revised May 2023)

We aim to implement management focused on investment efficiency aimed at increasing corporate value.

FY 2030

ROS （OP margin）	10％ or more （FY 2020　5.6％）
ROA （Operating profit ÷ Total asset）	7％ or more （FY 2020　3.8％）
ROE （Profit ÷ Equity）	12％（FY 2020　4.8％） ↑ Revising “ROE 8% or more” the KPI of the long-term vision formulated in February 2020.

Basic Strategy

Through growth investments focused on ROI and thorough structural reforms, we will "Implement reforms toward an efficient business structure. -More than doubling our profit margin-"

Enhancement of cost competitiveness and cost efficiency	Promote expansion of high-value-added businesses and liquidation of unprofitable businesses Pursue thorough streamlining in each department（management, research, production, sales and supply chain）
Expansion of overseas businesses	Promote expansion of existing businesses and the market development of new products and new businesses Target of overseas sales ratio for FY 2030: 40％（FY 2020 result:33％） Consider collaboration with other companies
Promotion of new product development and entry to new businesses	By deepening and fusing proprietary technologies and through synergies created by introducing external technologies, we will improve our core technologies and proactively invest resources. We will create new businesses that envision the customers of the 2020s and beyond.

Review of
Our Previous Medium-Term
Business Plan:
Brilliance through Chemistry StageⅠ
(FY 2021―FY 2023)

Increased profitability and exceeded numerical targets substantially through expansion of high-value-added businesses and review of our business portfolio.

Implemented proactive investments in products and businesses which increase our cashflow generation capability.
Achieved dividend payout ratio of 40% and increased dividends substantially.

Profit increased as overseas sales of agroproducts grew more than expected and due to the exchange rate trended toward a weaker yen.

Numerical Targets and Results

	FY 2020 Results	FY 2021 Results	FY 2022 Results	FY 2023 Results	Target for Stage Ⅰ (FY 2023 Target)	Long-Term Vision KPI (FY 2030)
Net profit(Billions of yen)	6.76	7.36	12.68	16.69	7.00Achieved！	-
Capital investment(Billions of yen)	8.82	7.72	13.11	13.26(34.08 / 3years)	30.00 / 3 yearsAchieved！	-
Shareholder return Dividend payout ratio(%)	35.7%	43.1%	39.6%	40.1%	40%Achieved！	-
Shareholder return Dividend per share(Yen)	80	110	180	240	Minimum of ¥80Achieved！	-
ROE(%)	4.8%	5.1%	8.4%	10.3%	5%Achieved！	8% or more^*
ROS(%)	5.6%	7.2%	7.8%	9.8%		10% or more
ROA（Operating profit÷totalassets）	3.8%	4.6%	5.0%	6.8%		7% or more

* In line with the above results, we have revised the Long-term Vision ROE target (for FY 2030) we formulated in February 2020 from 8% to 12%.

Consolidated financial results

*Calculated on the basis of reverse stock split implemented on October 1, 2018.

Shareholder return

*Calculated on the basis of reverse stock split implemented on October 1, 2018.

Target of
Current Medium-Term
Business Plan:
Brilliance through Chemistry StageⅡ
(FY 2024―FY 2026)

Position as “core stage for reform into a highly efficient business structure” and execute various measures to enhance corporate value.

Basic Objectives

Enhance corporate value through expansion of high-value-added businesses, and structural reform and growth investments that focus on asset efficiency.
Establish and sophisticate core technologies by promoting research technology strategies, and promote the creation of new businesses.

Capital Policy

Proactively implement policies that focus on the balance between growth investments and shareholder returns while considering financial soundness.

Growth investment	Implement investments in products and businesses which increase our cash flow generation capability. Use ¥40.0 billion over three years for new businesses, increasing production capacity and capital investment for maintenance and renewal. Promote business alliances and M&As to enhance and expand existing businesses and peripheral business fields.
Increase capital efficiency	Focus on investment efficiency and appropriately control the balance sheet. Liquidating products and businesses with decreased investment efficiency and conduct thorough investment risk assessment properly. Continue to implement liquidation of cross-shareholding.
Shareholder return policy	Continue stable dividends with a total return ratio target of 50% or more. Implement share buybacks flexibly as a shareholder return policy to complement dividend payments.

Numerical Targets

Despite the materialization of factors for increased costs, such as rising raw material and fuel prices, we will establish increased profitability in Stage Ⅰ, which will lead to increased revenue in Stage III, by promoting the continuous improvement of efficiency in each department.

FY 2026 Numerical Targets
Net income	17.0 billion	FY 2023 16.69 billion (when excluding temporary factors^*: 15.42 billion)
ROE	10％	FY 2023 10.3％ (when excluding temporary factors^*: 9.5%)
Capital investment	Invest ¥40.0 billion over three years （growth investments and investments for maintenance and renewal）
Shareholder return	Continue with stable dividends while targeting a total payout ratio of more than 50% Purchase treasury shares in a timely manner

* Recognition of tax refund from IHARABRAS, an affiliated company accounted for by the equity method (financial impact after tax: ¥1.27 billion)
Assumed exchange rate: US$1 = JP¥130; EU€1 = JP¥140

Action Plan

Chemical Materials	Implement measures to further expand sales of existing products in the healthcare and ICT fields, where growth is remarkable. (1)Healthcare Fields Accelerate sales expansion of the pharmaceutical additive "NISSO HPC“ by targeting the expanding global pharmaceuticals market. The launch of new pharmaceutical additives and expand related to businesses. (2)ICT Field Sales expansion of photoresist material “VP-POLYMER”. Promote development and expansion of sales of functional polymers for electronic materials. Work to develop peripheral fields for pharmaceutical additives, functional polymers, etc. Aim to create new businesses in place of businesses we have withdrawn from in Stage Ⅰ.
Agri Business	Promote the expansion of sales of three new agrochemicals developed in-house (fungicide “PYTHILOCK”, acaricide “DANYOTE” and fungicide “MIGIWA”). Promote overseas development and aim for sales of ¥10.0 billion for the three agrochemicals by 2026. Implement measures to maintain and expand sales of existing products and enhance profitability. Promote measures to expand applications and for generic competition, and maximize profits. Strengthen response to smart agriculture and integrated pest management (IPM), and work to strategically expand agriculture-related peripheral fields.
Other Businesses	Enhance the corporate value of the entire group by promoting business activities that utilize strengths Work to efficiently use the Group’s management resources by strengthening cooperation between each of the Group companies
R&D・Production Technology	Steadily execute research technology strategy “Brilliance through Chemistry 2030”. Work to establish and sophisticate core technologies, and make them the driving force of growth strategies. Create new businesses by 2030, which is the final year of the long-term vision. Work to move to the next phase at an early stage for full-scale development of pipeline agrochemicals currently under development. Aim for commercialization of new materials in the ICT field. Create a highly efficient production structure by strengthen synergy between manufacturing process knowledge and manufacturing know-how, and creating a framework for streamlining work and saving labor.
Initiatives for Environment and Enhancement of Human Capital	Aim to realize a sustainable society and enhance corporate value by reducing the environmental burden rising from business activities and continuously developing our businesses. (1)Target of Current Medium-Term Business Plan: Brilliance through Chemistry StageⅡ(FY 2024―FY 2026) (2)Waste reduction Our human resources boast diverse values and strengths, and to ensure that they can maximize their capabilities, we are striving to promote the creation of workplaces where they can work with a sense of fulfillment and pride. (1)Human Capital Management Vision “Make employees Brilliant” Create a virtuous circle that enhances value creation and a sense of fulfillment by stimulating autonomy and growth and through flexible and efficient workstyles that enable employees to maximize their capabilities.

Roadmap of the Long-term Vision
“Brilliance through Chemistry 2030”

Long-Term Vision / Medium-Term Business Plan

Corporate

Long-Term Vision /Medium-Term Business Plan(Overview)

Nippon Soda GroupLong-Term Vision “Brilliance through Chemistry 2030” FY 2021―FY 2030