Basic Management Policy

1. We are dedicated to quality and aim to establish Yokowo as a quality brand by offering the highest quality and eliminating environmentally harmful substances.
2. As a technology-based enterprise, we aim to continually upgrade and refine our antenna, microwave, surface modification material and micro precision processing technologies and actively introduce new technologies to enable us to offer products with improved added value and provide customers with the wide-ranging product capabilities and applied technologies they need.
3. We aim to accelerate taking our business to new levels by pursuing innovation strongly in three key areas: product innovation (to enhance business and product structures), process innovation (to enhance business processes and systems) and personnel innovation (to enhance human resources), and by promoting management innovation (to enhance management and business operation) with a view to future growth in addition.
4. We aim to establish a business framework that is able to respond to the global paradigm shift, the severe business environment and rapid changes in the competitive environment by creating a multi-layered business structure in industry segments, customers, technologies and supply chains.

Medium-term Management Targets

The Yokowo Group has formulated a new medium-term management plan (running from the fiscal year ending March 2024 to the fiscal year ending March 2026), and set out the following indicators as basic medium-term management targets.

Business model reforms to achieve high quality, full-scale growth and the Minimum 10 Minimum 10：Secure a sales growth rate, an operating profit margin, a return on invested capital, and a return on equity of 10% or above.

Medium-term Management Strategy

The Yokowo Group aims to be an ever-evolving company that continues to evolve and grow together with its stakeholders through business and corporate activities that contribute to the sustainability of the global society, with the purpose of “being a good company by employing people and technologies that work for the benefit of society today and tomorrow.”
The outline of the New Medium-Term Management Plan 2024 - 2028 based on this approach is as follows.

Management strategies

1. Strengthening the growth and earnings base in the main markets (automobile, semiconductor inspection, mobile devices, and medical devices)

   1. Explore and promote business evolution themes in the three core businesses (VCCS/CTC/FC).
   2. Implement full-scale business expansion in emerging markets with high growth rates (particularly China, India, and ASEAN).
   3. Optimize the business mix by returning to a growth path in the CTC and FC business.
   4. Expand the MD business (a fourth core business), which is steadily growing.

2. Acquiring new core competence and expanding business domains through collaboration with other companies

   1. Step up initiatives to expand the domains of the four core businesses.
   2. Develop collaboration in the fields of electroforming technology, MEMS processing technology, and optoelectronic fusion technology, and incorporate these technologies internally.
   3. Develop full-scale service-oriented business in parallel with the incorporation of in-house software development capabilities.

3. Embedding ROIC-oriented management

   1. Adopt Return On Invested Capital (ROIC) / Weighted Average Cost of Capital (WACC) at the per-business level and transform into a business structure with more earning capabilities and a higher capital efficiency.
   2. Maintain certain cash levels in anticipation of unexpected situations while pursuing business model transformation and business expansion through M&A activities and alliances, and making efforts to enhance shareholder return through stable dividend growth and share buybacks.

4. Practicing human capital management = management emphasizing human capital and sustainability initiatives

   1. Leverage the abilities and skills of employees for growth of the organization, leading to enhanced corporate value in the medium-to long-term.
   2. Promote sustainability initiatives based on materiality.

Strategies by business

1. VCCS business

   1. Make ongoing improvements to earnings structure by thoroughly reforming cost structures through standardization.
   2. Expand sales in new fields by entering new application domain products associated with the development of EV, SDV* and ADAS.
      * SDV: Softwear Defined Vehicle, A vehicle whose performance is maintained and improved by control software that is updated through two-way communication with the outside world

2. CTC business

   1. Strengthen the ability to supply hardware catering to new test uses through the refinement of the technologies currently maintained, collaboration and co-creation with other companies, and M&A activities.
   2. Evolve into a comprehensive test solution-type vendor using in-house and outside technologies.

3. FC business

   1. Raise competitiveness of core Spring Connector (SPC) products by delving deeper into materials, component processing, and surface modification
   2. Expand business with the market launch of products with added value being the smallest, lightest, and low-cost.

4. MD business

   1. Launch products planned in-house following acquisition of a marketing license for medical devices.
   2. Accelerate contributions to humanity and society through the expansion of an ecosystem in the advanced medical field.

5. Incubation Center

   Implement the following initiatives by searching for and collaborating with partners who prosses technologies that satisfy the needs of customers, rather than staying with existing technologies:

   1. Provide products and solutions that create new markets
   2. Understand needs in global markets and promote business model transformation from selling goods to selling services.
   3. Utilize corporate alliances, M&A activities, and proactive investment in companies engaged in co-creation to supplement the necessary technologies, talent and equipment, and create new business domains and business models.