UACJ : Fourth Mid-term Management Plan for Fiscal 2024 to 2027 Summary

FY2024 to FY2027

Fourth Mid-term Management Plan

Summary

Building and connecting for a lighter world

May 13, 2024

UACJ Corporation

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Contents

1. Review of Previous Mid-Term Management Plan
2. UACJ VISION 2030
3. Fourth Mid-Term Management Plan Overview
4. Shareholder Return Policy

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1

1. Review of Previous Mid-Term Management Plan

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1. Review of Previous Mid-Term Management Plan

Review of the Third Mid-Term Management Plan: Major Financial Targets and Basic Policies

Achieved most financial/action targets thanks to completing structural reforms as well as profit contributions from overseas businesses

• Basic Policies

• Major Financial Targets

Complete structural reforms

(to Mar 2023)

Strengthen foundations for growth

Promote

global

sustainability

• Profit improvement target of ¥21 billion (BM: FY2019)
• Lower break-even point 10% from FY2019 to FY2022
• Consolidate manufacturing bases completed and optimal manufacturing system built up
• Reduce D/E ratio (from 1.7 in FY2019 to 1.3 in FY2022)
• Reduce director and executive officer headcount
• Invest in North American can stock and automotive areas
• Decide to make recycling-related investments in Japan, the U.S., and Thailand
• Strengthen partnerships/collaboration with customers to create a circular economy in aluminum
• Expand and achieve profit in priority activity areas
• Establish a foundation for sustainability activities
• Form company-wide working groups by theme in environmental domains to strengthen initiatives

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Financial	FY2023 plan	FY2023 results
indicators	targets
Net sales	¥700 billion ¥892.8 billion

Business profit	¥32.7 billion	¥43.4 billion
Business profit	4.7 %	4.9 %
margin
ROE	7.5 %	5.3 %
ROIC*1	6.0 %	7.5 %
Debt-equity ratio*2	1.2 or less	1.0

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*Assumptions for plan: ¥110/US$; LME = US$2,050/t; Crude oil (Dubai) = US$60/barrel
*1	ROIC is calculated based on pre-tax business profit	3
*2	Debt-to-equity ratio excludes subordinated loans

1. Review of Previous Mid-Term Management Plan

Review of the Third Mid-Term Management Plan: Highlights

Varied reforms have further boosted domestic & overseas business earnings

Complete

structural reforms

• Lower break-even point
• Establish optimal production system
• Business selection and concentration
• Reduce director and executive officer headcount

Reform

price-setting structure

• Introduce energy surcharge system
• Scheme for passing on rising logistics costs
• Increase roll margins due to price hikes and environmental investments

Expand overseas

business

earnings contribution

• TAA: Significant revenue expansion
• UATH: Factory launch, profit expansion
• UWH: Strategic investment

Business profit					(billion yen)
from FY2018 to FY2023
			29.9		43.4
13.7	20.9	14.6		21.3
FY2018	FY2019	FY2020	FY2021	FY2022	FY2023
© UACJ Corporation. All rights reserved.					4

2. UACJ VISION 2030

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2. UACJ VISION 2030

Ideals in the UACJ Group's Long-term Roadmap, UACJ Vision 2030

Building a sustainable world by using aluminum to reduce environmental impact

	Flat
	rolled
	products	Extruded
Solid		products
customer		Automo
base			-tive
			parts
Group's	Diverse
processing and
foundations	Foil
machining
	capabilities
Human
resources			Casting
			and
Technology Corporate			forging
culture	Three-country

supply Processed

network goods

Basis for Safety, quality, business compliance and activities corporategovernance

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	Provide
Create added-	solutions for
value products	issues facing
	society

Material Issues

Driving a circular economy in aluminum

Addressing climate change

Conservation, restoration, and nurturing of nature

(Nature-positive)

Respect for human rights

Instilling diversity, equity, and inclusion (DE&I)

Backcasting

UACJ VISION 2030

• Provide products that contribute to societal development by capturing demand in growing industries and markets
• Enhance aluminum materials to bring economic benefits to communities worldwide
• Develop all-new products and business models that offer solutions for challenges facing society
• Helping to reduce environmental impact throughout product life cycles

Mobility		Lifestyles and		Environment and
	healthcare		energy

Contribute to efficient	Provide beneficial	Reduce emissions and
and user-friendly	products for daily life
facilitate recycling
transportation	and work
		6

2. UACJ VISION 2030

UACJ Vision 2030 Financial Targets

	FY2030 target	(Reference)
	Initial announcement (May 2021)

Net sales	¥1.1 trillion or more	¥800 billion or more
		(Revising ingot price / forex assumptions)
Business profit	6% or more	6% or more
on net sales
	(Operating margin on net sales)
ROIC	10% or more	10% or more
(Calculated based on pre-tax
business profit)		(Calculated based on pre-tax operating income)
ROE	10% or more	10% or more

(Assumptions)

LME ($/ton)	2,200	2,100
Forex (yen/$)	140	104

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7

2. UACJ VISION 2030

UACJ VISION 2030 Major Non-Financial Targets

	FY2030 target
Driving a circular economy	UACJ recycling rate
in aluminum	80%
	Reduction rate of CO2 emissions 30%
Addressing climate change	(Scope1 and 2, vs. FY2019, intensity basis)
Reduction rate of Scope 3 emissions 30%
	(Category1, vs. FY2019, intensity basis)

Conservation, restoration, and nurturing of nature

(Nature-positive)

Respect for human rights

Instilling diversity, equity, and inclusion (DE&I)

Occupational health and safety

Product quality assurance

Reduction rate of water withdrawal

25% or more

(vs. FY2020, intensity basis)

Rate of conducting human rights DD

100%

Percentage of women in management positions

15%

Number of serious workplace accidents

Maintaining zero

Number of serious quality defects

Zero

*Please see the website for other indicators and details.https://www.uacj.co.jp/english/ir/policy/long_term_vision.htm	8

3. Fourth Mid-Term Management Plan Overview

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