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The 15th Medium-Term Management Plan

Looking ahead beyond 2030, we have formulated the 15th Medium-Term Management Plan.

Quantitative targets and overall picture

Quantitative targets

Consolidated net sales ¥10billion or more
Consolidated operating profit margin 5% or more
Policy
Aiming for sustainable growth through wellness branding
Strategy
  1. 1.Contribution to core markets (Wellness)
  2. 2.Strengthening the foundation of business domains
  3. 3.Enhancing Well-being
  4. 4.Contribution to local communities
Slogan
Challenging and leaping forward with Initiative

Medium-Term Management Plan: From "3 Years" to "5 Years"

In the 15th Medium-Term Management Plan, we have set "Beyond 2030" as our discussion theme, looking ahead past the year 2030. As our business undergoes major transformations, the conventional "3-year" period made it difficult to see progress in business conception and design. Therefore, we have shifted to a "5-year" plan to respond to changes more quickly and with higher resolution, particularly for sectors with long development periods like healthcare.

Beyond 2030

Aiming for growth looking ahead past 2030

Definition of Beyond 2030

Discussion Topics for the Medium-Term Management Plan Looking Beyond 2030

A framework for business expansion aimed at maximizing corporate value and achieving sustainable growth by defining the "Wellness Domain" as a core market and fully developing our technological competitive advantage based on our 4 businesses.

Wellness

Definition of wellness

We define the "Wellness Domain" as the areas across a person's entire lifetime—from birth to death—where Asahi Rubber's high-value-added products can contribute to society. Under our policy of "Wellness Branding," we will drive manufacturing and business activities through the lens of wellness.

Historically, we developed businesses across four core markets. We now aim for further growth through a fresh approach to the "Wellness Domain" existing within these markets:

Mobility
Medical
Sports & Health
Living

Ideal vision and the wellness domain

To achieve our quantitative targets, we analyzed our current situation and clarified our current state versus our ideal vision.

We have defined the new domains we have traditionally pursued as the "Wellness Domain," aiming to break into this "New Frontier: Wellness Domain" through unprecedented approaches.

Past

Challenges and potential internal risks identified during the 14th Medium-Term Management Plan acted as a wall, pushing us back whenever we tried to enter new domains.

Past
Ideal vision

Overcoming barriers through three approaches to successfully expand into the wellness domain.

Ideal vision

Relationship between the "wellness sector" and the "four business areas" across the four priority markets

Relationship between the Wellness Domain in the four core markets and the four businesses

Initiatives of the 4 business divisions

Optical Business

Target

Move away from dependence on automotive interior lighting and pioneer new markets

Specific initiatives

  • We view the Wellness Domain as an area that will demand stronger proposal capabilities regarding services, design, and the application of optical technologies.
  • Provide new added value by proposing ODMs that incorporate technologies from other business divisions or combine our tech with other companies' products.
  • Aim to expand market share in automotive exterior lighting, which features high technical difficulty.

Consolidated net sales target

¥2.2billion

Wellness Domain Initiatives
Light that aligns with human senses
Light that aligns with human senses Providing light tailored to people, such as light that aids concentration or provides comfort.
Automotive exterior lighting
Automotive exterior lighting Improving exterior lighting functionality to ensure peace of mind and safety for both drivers and pedestrians.

Medical & Life sciences Business

Target

Leverage our strength in being able to sell medical devices to expand sales locally overseas

Acquired authorization for medical device sales in 2025 (limited to Japan).

Specific initiatives

  • This is a highly focused business within the Medium-Term Management Plan. We will accelerate growth by concentrating resources on advanced diagnostic and therapeutic fields.
  • Strengthen the rollout of medical rubber stoppers for dialysis and ventilators, syringe gaskets for bio/drug discovery utilizing unique coating technologies, and rubber products for closed-system circuits related to medical safety.
  • Promote the expansion of our production system, keeping the expansion of the #2 Fukushima Factory and construction of new factories in mind.
  • Obtain ISO 15378 certification to target entry into overseas markets.

Consolidated net sales target

¥3.1billion

Wellness Domain Initiatives
Syringe gaskets for bio and drug discovery
Research and development for the Medical & Life sciences Business
Syringe gaskets for bio and drug discovery Providing unique coated gaskets specialized for delicate "biopharmaceuticals and next-generation vaccines" to contribute to safe healthcare delivery.

Functional Business

Target

Enhance product added value and expand sales into new domains

Specific initiatives

  • Given the increasing volume of operational tactile rubber products such as switches, we will strengthen BCP (Business Continuity Planning) with a view toward new production sites.
  • Aim to expand sales of Peltier devices by enhancing product value, while driving the development of cooling and power supply core units.

Consolidated net sales target

¥4.3billion

Wellness Domain Initiatives
Eco-friendly power supplies
Eco-friendly power supplies Providing cooling units that reduce the risk of heatstroke during intense heat.
Heatstroke countermeasures
Heatstroke countermeasures Developing module power supply units utilizing eco-friendly energy generation.

Telecommunications Business

Target

Aiming to transition from selling standalone products to delivering high-value solutions and customer experiences

Specific initiatives

  • Contribute to DX (Digital Transformation) in outdoor agriculture and infrastructure sectors, as many of our products exhibit high competitiveness under harsh natural environments.
  • Go beyond just selling rubber-sealed RFID tags; build a system to propose comprehensive solutions that maximize user value, including tag readers and software to collect/analyze data.

Consolidated net sales target

¥0.4billion

Wellness Domain Initiatives
Realizing On-Site DX with IoT in agriculture
Realizing On-Site DX with IoT in logistics
Realizing On-Site DX with IoT Evolving from a component-only business to a solution business centered around rubber-sealed RFID tags, driving DX in infrastructure and agricultural fields.

Overseas initiatives

China region

Objective

Strengthening "local production for local consumption" to build a robust, independent operational base and hedge against geopolitical risks.

Target businesses

Functional Business (DONGGUAN ASAHI RUBBER PRECISION COMPANY LIMITED) and Optical Business (ASAHI TECHNOLOGY(Shanghai)Co.,Ltd.), while aiming for new entry into the medical field.

Ideal vision

To become an indispensable company locally by strengthening cost competitiveness (productivity enhancement), service capabilities, and added value.

Southeast asia region

Objective

Establish a production and supply system in alternative countries to hedge against China-related risks, while solving resource shortage issues.

Target businesses

Functional Business (centered on automotive products) and Medical & Life sciences Business.

Ideal vision

Enable production at partner locations to ensure stable supply.

Action to implement management conscious of cost of capital and stock price

Cost of capital and capital efficiency

While we estimate the cost of equity using the Capital Asset Pricing Model (CAPM), we have set it at 7% after taking into account our long-term business risks, statistical reliability limitations, and uncertainties arising from calculation periods. Our Weighted Average Cost of Capital (WACC) is set at 4%, factoring in the cost of debt. We will consider resetting these figures in the future based on environmental changes.

Comparison of WACC and ROIC

We compare WACC (cost of capital index) against ROIC (return on invested capital index).

Comparison of WACC and ROIC
(As of March 31, 2026)
Goal: Achieve WACC < ROIC If we achieve our quantitative target of a 5% operating profit margin in the 15th Medium-Term Management Plan, ROIC is projected to reach 4.3%. We will track capital returns for each business division to pursue expansion tailored to each sector's characteristics.
Relationship between invested capital and after-tax operating profit to achieve WACC and ROIC

Capital allocation

Over the next five years, we will pursue a dual approach: making growth investments in areas such as healthcare, and delivering shareholder returns—including dividend increases—with an eye toward future capital policy.

Approach to capital allocation
(5-Year Cumulative)

Approach to capital allocation (5-Year Cumulative)

Operating cash flow generation

We will pivot from our historical reliance on the automotive and lighting domains to aggressively pursue "selection and concentration" in growth markets like medical and wellness. We will transition from an OEM-centric model to a high-value-added business, while continuing essential human capital investments such as wage increases and education/training.

Reduction of cross-shareholdings

We will reduce cross-shareholdings to improve capital efficiency and ensure financial health, selling them sequentially while assessing market trends and monitoring liquidity on hand.

Capital expenditures policy

We plan approximately ¥3.5 billion in CapEx to meet production demands for highly competitive existing products. Furthermore,we will evaluate investments for expanding production capacity—including expanding the Second Fukushima Factory and building new plants—with an eye on technological development for new products in the medical and wellness domains.

Shareholder returns policy

Starting from the fiscal year ending March 2027, we plan to increase the annual dividend from ¥20 to ¥24 per share (¥12 interim, ¥12 year-end). We will respond to investor expectations with agile policies linked to earnings growth.

Measures to address PBR Below 1x

By aiming for a 5% operating profit margin, expanding existing products, developing new products, and advancing wellness initiatives across our 4 businesses, we will raise net sales and productivity. This improvement in operating profit margin will increase the net income margin, driving an elevation in ROE. We aim to improve our PBR by achieving these profit targets through both ongoing and forward-looking measures.

Relationship between PBR, ROE, and PER
(As of March 31, 2026)

Shareholder returns & IR information

Our fundamental approach is to increase corporate value and drive share price growth by further expanding our 4 main businesses to improve profitability and enhance metrics such as Earnings per Share (EPS). We believe that raising profitability while remaining being conscious of the cost of capital is essential to boosting overall corporate value.

Please see here for dividends per share.

Dividend philosophy

While balancing growth investments and shareholder returns, we will increase operating cash flow and look into selling cross-shareholdings. We will invest ahead in mass production and new product development. We aim to maintain stable, long-term dividends and expand continuous returns to shareholders in line with profit growth.

Information disclosure via IR

While balancing growth investments with shareholder returns, we will work to enhance operating cash flow while keeping the sale of cross-shareholdings as a viable option. We will also expand our website and social media tools to ensure timely, clear, and transparent disclosure that engages our stakeholders.

Well-being

We are establishing an environment that supports autonomous initiative and the taking on of new challenges by every single employee.

Work-Life Balance

Life Stage Support

We will expand flexible working arrangements and consider initiatives to support employees in balancing their careers with their private lives based on their life stages.

Workplace Environment

We aim to foster an open, transparent workplace environment by facilitating dialogue across different departments and encouraging employee interaction.

Diversification of Incentives

Enhancing the Employee Stock Ownership Plan

We have increased the company matching contribution from 10% to 30%.

New stock grant system

Starting in 2026, we have introduced an ESOP (Employee Stock Ownership Plan) stock grant system for employees.

Community engagement

Local interaction

Through volunteer-led "Yume-iku" (Dream Nurturing) activities, employees visit local kindergartens and elementary schools to hold study sessions and workshops where children can enjoy hands-on activities with rubber. We will also strengthen touchpoints with local residents through initiatives like maintaining flower beds.

Employment support

We will continue our partnership with Type B employment support facilities (welfare centers for persons with disabilities) to promote community contribution.

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