Furukawa Electric : Integrated Report, Sustainability Book (FurukawaReport2025 en)

FURUKRIIJR ELECTRIC

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ELECTRIC GROUP

FURUKAWA ELECTRIC GROUP INTEGRATED REPORT

Editorial Policy

In our Group, important sustainability information-both financial and non-financial-that contributes to future value is disclosed in the Annual Securities Report. Meanwhile, the Integrated Report, which is primarily intended for investors, serves as a complementary medium to the Annual Securities Report, presenting our value creation story in a more accessible and comprehensible manner.

Accordingly, we believe that this Integrated Report, when read together with the Annual Securities Report, will help readers gain a deeper understanding of our Group's efforts to

achieve sustainable growth and enhance corporate value over the medium to long term.

Non-financial

Value Creation Story

• Integrated Report

• Annual Securities Report

  • Website: For Investors

Financial

In addition, detailed information on our ESG initiatives and various data are disclosed comprehensively on our corporate website content, Sustainability, and in the Sustainability Book, which are intended for a broad range of stakeholders. We encourage you to make use

• Sustainability Book

• Website: Sustainability

  https://furukawaelectric.disclosure.site/en/

  Medium-term management plan, financial and performance information, stock information, various IR materials, etc.:

  https://www.furukawa.co.jp/en/ir/

  Period covered	From April 1, 2024, to March 31, 2025 Note: Includes selected information on initiatives and activities from prior fiscal years and after April 2025.
  Publication timeframe	Issue date: November 28, 2025 (Next Issue Planned: November 2026)
  Target organization	Furukawa Electric Co., Ltd. (Parent company), and its domestic and overseas group companies are covered. When reporting matters limited to specific regions or corporations, the target is clearly indicated.
  Cautionary notes regarding outlooks, etc.	This Integrated Report includes statements concerning the future strategies and earnings forecasts of Furukawa Electric Group. These forward-looking statements are based on information that is currently available to the Group. As it is subject to changes in the business environment surrounding the Group, the actual strategies and business might differ from those projected.

  of these resources as well.

  In this Integrated Report, we have provided links to the relevant sections of the Annual Securities Report (and, in some cases, to the website) on each page, along with clear references to the corresponding information. We hope you will find these resources useful.

  Example: Annual Securities Report Item 2. [Overview of Business] 2 [Approach and Initiatives toward Sustainability]

  (1) Sustainability in general

  
  
  

  Other reports

  Information comprehensiveness (ESG/Finance and Performance)

  • Corporate Governance Report: https://www.furukawa.co.jp/en/company/governance.html

  • Intellectual Property Report: https://www.furukawa.co.jp/en/rd/ip-report/

  • Furukawa Electric Review: https://www.furukawa.co.jp/en/rd/review/

Reference Guidelines

• International Integrated Reporting Framework (The IFRS Foundation)

• IFRS Sustainability Disclosure Standards (The IFRS Foundation)

• SASB Standard (The IFRS Foundation)

• The Guidance for Collaborative Value Creation 2.0 (the Ministry of Economy, Trade and Industry)

• Guidance on Climate-related Financial Disclosure (TCFD) Guidance 3.0 (the Ministry of Economy, Trade and Industry)

Scope of This Report

Contents

About Furukawa Electric Group

Strengthening Management Foundation

1. Furukawa Electric Group/Philosophy System

2. Technological Genealogy and History

3. Business Domains

   Value Creation by Furukawa Electric Group

4. At a Glance, Furukawa Electric Group

5. Top Message

12 Directors' Roundtable: Outside Directors and Representative Director

Strategies to Realize Value Creation

16 Furukawa Electric Group's Sustainability

19 Message from the General Manager of the Strategy Division

22 Feature Article 1 Strategy for expanding earnings in the growing data center market

23 Message from the General Manager of the Finance & Accounting Division

26 Business Strategies

Business Overview and Review of FY2024/Main Products and Services Communications Solutions

Energy Infrastructure Automotive Products & Batteries Electronics Component Material Functional Products

39 Developing Business Activities That Consider Climate Change

41 Strengthening Human Capital and Organizational Execution Abilities

43 Corporate Governance/Group Governance

1. Risk Management

2. Supply Chain Management

3. Human Rights Management

Data

53 Main Financial and Non-financial Data

1. Stock/Dividend Information

2. About Issuing the Furukawa Electric Group Integrated Report 2025

   Business Enhancement and Creation

   The Founder's Thoughts

   Mr. Ichibei Furukawa, the founder of Furukawa Group, said, based on his wish to

   "brighten Japan," that we must

   "value employees, value customers,

   value new technology, and contribute to society."

   Since its foundation in 1884, Furukawa Electric has inherited these words in its DNA and has grown.

   
   
   

   1. Feature Article 2 Creating businesses that solve social issues

      Pursuing challenges in new business domains

   2. Furukawa Electric Group's Digital Transformation (DX)

   3. Research & Development

   4. Intellectual Property

38 Co-creation with Stakeholders

About Furukawa Electric Group

About

Furukawa Electric Group

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

Furukawa Electric Group/ Philosophy System

Furukawa Electric Group Purpose

Core Values

Furukawa Electric Group Vision 2030

Medium-term Management Plan

The Furukawa Electric Group Purpose (hereinafter, the "Purpose") is a statement of the Group's reason for being, which has been established to ensure that the Group is recognized by its various stakeholders as a corporate group that contributes to creating a truly prosperous and sustainable society, to serve as the basis for management decisions, and to ensure that its employees continue to take on challenges with pride. With the Purpose at the top of the structure of the Group's corporate philosophy, it is composed

Purpose:

Our Groupʼs Purpose, as it serves as the basis for our decisions and actions,

is "Composing the core of a brighter world."

Core Values: The values each of us should value:

"Integrity," "Innovation," "Addressing Reality," "Ownership and Speed," "Collaboration"

Vision 2030: Our ideal state in 2030

In order to build a sustainable world and make people's life safe, peaceful and rewarding, Furukawa Electric Group will create solutions for the new generation of global infrastructure combining information, energy and mobility.

Medium-term Management Plan 2022-2025

(2025 Medium-term Plan):

A milestone toward achieving Vision 2030

Road to Vision 2030 -Transform and Challenge-

of "Core Values," the values that should be valued by all employees; "the Furukawa Electric Group Vision 2030," the ideal state we aspire to; "the Medium-term Management Plan," a milestone toward achieving the Vision; and "the Furukawa Electric Group CSR Code of Conduct," which defines the fundamental behavioral standards we should follow. Under this philosophy structure, our Group will contribute to the realization of a sustainable society.

CSR Code of Conduct:

Sets forth the basic code of conduct that we should follow.

2020 2025 2030

Annual Securities Report Item 2. [Overview of Business] 1 [Management Policy, Business Environment, and Issues to Be Addressed]

Website: Furukawa Electric Group Purpose

About

Furukawa Electric Group

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

Technological Genealogy and History

The history of our Group spanning more than 140 years is itself a history of contributing to society through technology. Starting from electrical wires and refined copper, and up to today, we have expanded diverse businesses focused on social infrastructure fields, supporting societal growth and continuously refining our technological capabilities with integrity. Our Group, leveraging the four core technologies developed thus far, will continue to challenge continuous innovation and contribution to society across all areas, including social infrastructure and beyond.

Creating businesses that solve social issues p.33

Metals Polymers Photonics High-frequency

Low dielectric foamed material

Four core technologies

This figure was created with the purpose of clearly conveying to readers the history of our Group, which has developed

by leveraging its strengths in technology. As such, key technologies have been excerpted and edited, and it might differ from precise technical genealogical charts.

Junction box

Wire harness

mal material

Pumping control technology

Submarine cable

Extra-high-voltage cable

Foil Extruded Board

Power cable

Optical signal processing

High-

fr foil

Router

NW Products

equency

Electric

Steering roll connector

Wires Strips Board

Connector

material

Rubber, paper, PVC, PE, PP

Refined

copper

Copper tube

Aluminum

Rakuraku cable system

Communication cable

wire

Planar lightwave circuit technology

Optical passive components

History

Foundation and dawning of a new era

1884

1884−

Opened Honjo Copper Smeltery in Tokyo and Yamada Cable Works in Takashima-cho, Yokohama, and established as a manufacturer of copper alloy products and electric wires

Helping to establish Japan's social infrastructure

1915

1958

1900−

Manufactured Japan's first submarine electric cable, and installed an antenna and feed line on Tokyo Tower

1960− Expansion overseas

1971

1974

Installed a communications network in Bangkok, Thailand, and successfully conducted the world's first field trial of optical fiber cables

2000−

Supporting people and society with diverse proprietary technologies

Website: Furukawa Electric Innovation history

About

Furukawa Electric Group

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

Business domains Our Group leverages four core technologies to develop a diverse range of businesses, with its current main business domains

comprising "Communications Solutions," "Energy Infrastructure," "Automotive Products & Batteries," "Electronics Component

Material," and "Functional Products." Vision 2030 aims at creating solutions for the new generation of global infrastructure combining information, energy, and mobility, and our Group's business domains will continue to evolve and expand in the future.

Functional Products

Service and Developments, etc.

(Including adjustments)

0.8%

Communications Solutions

Providing well-differentiated products through rapid

Optical communications technology that supports safe,

I

c

t

i

o

n

a

l

response capabilities and flexible proposal capabilities

12.2%

n

f

r

a

s

t

r

u

c

t

u

r

e

E

F

P

u

r

n

o

d

u

c

t

s

Percentage

13.9%

secure next-generation infrastructure

11.8%

Electronics Component Material

Leveraging the development capabilities for high-performance materials and contributing to the advancement of electronics technology

27.2%

of consolidated net sales

i

t

o

m

o

t

u

A

&

s

c

i

n

o

r

t

c

e

l

s

m

e

t

s

y

S

e

v

for FY2024*

34.1%

Energy Infrastructure

Supporting social infrastructure through advanced technology development capabilities, installation capabilities, and stable quality

Automotive Products & Batteries

Supporting the future of safer, more confortable mobility by connecting people, vehicles, and the world

* FY2024 figures were restated on May 13, 2025, due to changes in certain business segments and sub-segments, as well as partial changes in head office expenses allocated from FY2025.

• The industrial laser business was transferred from the Infrastructure segment (Communications Solutions) to the Service and Developments, etc., segment.

• Within the Infrastructure segment, the metal wire business was transferred from the Communications Solutions business to the Energy Infrastructure business.

Note: Please also refer to p.27 of this integrated report, "Business Overview Main Products and Services."

About

Furukawa Electric Group

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

At a Glance, Furukawa Electric Group (FY2024)

Consolidated net sales

1,201.8 billion yen

Consolidated operating profit

47.1 billion yen

Profit attributable to owners of parent

33.4 billion yen

Greenhouse gas emissions*1 (Scope 1&2)

417thousand t-CO2e

Number of employees (consolidated)

51,167

Number of group companies*2

127

(as of March 31, 2025) (as of March 31, 2025)

South America, Europe, and others

Colombia, Brazil, Argentina,

U.K., Spain, Italy, Denmark, Germany, Czech, Hungary, Morocco

China (including Hong Kong)

Net sales 119.8 billion yen Greenhouse gas emissions 28 thousand t-CO2e Number of employees 3,357

Number of Group companies 20

*1 Combined total amount for Furukawa Electric, 29 domestic and 59 overseas group companies

*2 Combined total for Furukawa Electric, 116 consolidated subsidiaries, and 10 equity-method associates

Net sales 73.5 billion yen Greenhouse gas emissions 10 thousand t-CO2e Number of employees 2,604

Number of Group companies 19

Japan

Net sales 563.9 billion yen Greenhouse gas emissions 131 thousand t-CO2e Number of employees 11,165

North America, Central America

U.S.A., Mexico

Net sales 153.8 billion yen Greenhouse gas emissions 57 thousand t-CO2e Number of employees 4,866

Number of Group companies 12

Number of Group companies 43

Asia (ex. Japan and China)

India, Vietnam, Thailand, Taiwan, Philippines, Malaysia, Singapore, Indonesia

Net sales 290.7 billion yen Greenhouse gas emissions 191 thousand t-CO2e Number of employees 29,175

Number of Group companies 33

Notes: 1. The number of group companies in Japan includes Furukawa Electric.

1. Net sales by region are based on the location of customers and are classified by country or region.

2. Greenhouse gas emissions by region are based on the location of the companies and are classified and calculated by country or region.

FURUKAWA ELECTRIC GROUP 7

INTEGRATED REPORT 2025

Value Creation by Furukawa Electric Group

About

Furukawa Electric Group

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

Top Message

With our Purpose as the foundation, we will pursue sustainable growth through execution-focused management.

Representative Director and President Furukawa Electric Co., Ltd.

Leveraging our core technologies to promote Purpose-driven management

Originating in copper smelting and electric wire manufacturing, the Group has continued developing a diverse range of products. Over the years, we have added insulating materials for electric wires, optical fibers, and wireless technologies, leading to the establishment of four core technologies-metals, polymers, photonics, and high-frequency. With this technological foundation as a strength, we have continued growing our businesses in step with the changing times.

On the other hand, it is also true that this diverse range of business activities has made it difficult for people to understand what kind of company we are. Within this context, we established the Furukawa Electric Group Purpose in March 2024 to clearly define our reason for being. With our Purpose-"Composing the core of a brighter world"-at the core, we aim to evolve into an indispensable corporate group by promoting management that helps realize a truly prosperous and sustainable society.

We are also actively promoting awareness about our Purpose to ensure it forms the basis of our management. In FY2024, we carried out external communications, including a television commercial highlighting our Purpose. Internally, we held workshops for management both in Japan and at overseas group companies, as well as for regular employees, to deepen awareness, understanding, and empathy for the Purpose. We are creating more opportunities for employees to embrace the Purpose as their own and to see how it connects to their daily work. Meanwhile, the results of an employee survey show that the Purposeʼs awareness level remains insufficient. We recognize this as a medium- to long-term challenge and will continue our efforts moving forward.

FURUKAWA ELECTRIC GROUP 8 INTEGRATED REPORT 2025

Top Message

About

Furukawa Electric Group

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

Achieving the 2025 Medium-term Plan and Vision 2030

Since FY2022, the Group has pursued initiatives under its Medium-term Management Plan 2022-2025 (2025 Medium-term Plan) aimed at enhancing corporate value over the medium to long term. In FY2022 and FY2023, we faced difficult external conditions, including sluggish automotive business performance caused by semiconductor shortages and a slowdown in the telecommunications carrier market, particularly in Europe and the United States. We also struggled to assess growth markets, which further compounded these difficulties.

In contrast, FY2024 marked an important step toward achieving the targets of the 2025 Medium-term Plan. Revenue increased in both the Functional Products business-which includes data center-related products-and the Automotive Products business, while the Communications Solutions business restored its profitability. The data center market is particularly strong. Because high-performance computing devices, such as CPUs and GPUs, generate significant heat in data centers, advanced thermal management technologies are essential to release that heat efficiently. Recognized for their high performance and reliability in meeting these needs, our data center heat radiation and cooling systems have become key drivers of business growth.

In FY2025, the final year of the 2025 Medium-term Plan, we aim to not only firmly achieve our numerical targets but also lay the strategic groundwork for the Furukawa

Electric Group Vision 2030. We regard this as a crucial stage in our management journey. With respect to operating profit,

we expect to fall short by around 5.0 billion yen compared with our original projection of

58.0 billion yen for FY2025 under the 2025 Medium-term Plan. This gap arises mainly from changes in the scope of consolidation, including the exclusion of Totoku Electric Co., Ltd., and Furukawa Battery Co., Ltd. To strengthen our growth areas, meanwhile, we are rebuilding our business portfolio with a view to the future, including through the

acquisition and consolidation of Hakusan Inc. and the former Fujitsu Optical Components Limited*. We believe that these medium- to long-term actions will lead to further growth in the future.

* Now Furukawa FITEL Optical Components Co., LTD.

Sustainable world

2025 Medium-term Plan: Positioning and Priority Measures

Safe, peaceful and rewarding life

Mobiilliity

Energy

Backcasting 2030

IInformatiion

Furukawa Electric Group Vision 2030

Priority measures

Medium-term Management Plan 2022-2025

Initiatives to maximize profits in existing businesses and create new businesses

Current Forward-looking

We view our business portfolio not as something fixed but as a "dynamic" entity that we must continually review in response to changing external settings and social needs. Because optimal conditions change with circumstances, it is important to continually maintain an optimal state. To this end, we need to continuously generate new business opportunities while scaling down or withdrawing from product groups that have fulfilled their roles. In the Vision 2030, we aim to address social issues and create new value in each of or in combination with the following areas: information, energy, and mobility.

To keep this cycle of renewal running in a healthy way, we have been working to build a management structure that balances the need for both "maximizing profits in existing businesses" and "building a foundation for creating new businesses" as stated under 2025 Medium-term Plan.

Top Message

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Business Enhancement and Creation

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Maximizing profits in existing businesses

Data center market

New businesses to be realized by 2030

Enhance under the 2025 Medium-term Plan

Products

Further enhancement

Market

Existing

New

Within our existing businesses, we place the highest priority on improving the profitability of optical fiber and cable and optical components in the Communications Solutions business. In April 2025, we reorganized the optical fiber and cable business, and the Communications Solutions business is showing improving profitability backed by steady demand related to data centers. Our challenge now is to firmly chart a path to growth as we look toward FY2026 and beyond.

Building a foundation for creating new businesses

In building a foundation for creating new businesses, we have positioned life sciences, laser applications, superconductors, and green LPG as priority domains, and our efforts are now beginning to deliver tangible results.

In laser applications, we are working to create new businesses by applying our laser technologies, developed over many years in the field of optical communications, to the industrial sector. For example, we have developed high-power lasers for cutting and welding metals, as well as Infrastructure Laser, a product that removes rust and paint

We are also applying our laser technology for optical communications to the medical field. By making MFOPTEX Co., Ltd., a subsidiary and co-creating with medical device manufacturers and others, we aim to create new value in the life sciences field.

In green LPG, we are developing a technology that converts methane gas generated from livestock-derived organic matter into liquefied propane gas through catalytic action. We are currently constructing a bench plant for verifying the manufacturing process and will begin field demonstrations within FY2025. We expect this technology to play a major role in addressing issues, such as energy challenges and carbon neutrality, and it will grow into a significant business from an ESG perspective as well.

Priority themes in new domains

New businesses to be realized by 2030

Enhance under the 2025 Medium-term Plan

Life sciences

Laser applications

Superconductors

Products

Further enhancement

Market

Existing

New

To accelerate new business creation, we established the Social Design & New Business Development Department as a new organization and have been strengthening it. The Group, which had traditionally been strongly product- and technology-oriented, is now responding to social and market needs with technology through a market-driven approach. This shift has begun to generate and activate seeds of new businesses.

Strengthening the foundation for ESG management and leveraging intangible assets

films from metal surfaces. Because it addresses social issues, such as aging infrastructure, we expect demand for Infrastructure Laser to grow in maintenance applications for

transmission towers, bridges, ships, and railway vehicles.

Under the 2025 Medium-term Plan, we set "strengthening the foundation for ESG management" as a priority measure. To this end, we have sought to address climate

Top Message

About

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Value Creation by Furukawa Electric Group

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Data

change, strengthen human capital, and reinforce governance by transitioning to a company with an Audit & Supervisory Committee.

Leveraging intangible assets is also critically important because such assets serve as a key driving force in promoting ESG management and transforming our business portfolio.

Visualize and utilize intellectual property

Because intangible assets are invisible, they are difficult to grasp, therefore making them "visible" is the first step toward their effective utilization. We are promoting the use of "IP landscaping" as one method of visualizing such assets.

Visualizing intangible assets and using them as intellectual property or industrial property rights, such as patents, is not a new concept, and turning visualization into an effective strategy and maintaining and strengthening it to build a competitive advantage is not easy. Each business division must understand the strengths and characteristics

of its intellectual property, accurately grasp market needs, and manage these assets in ways that help maximize profit. This activity has no end and requires ongoing efforts. We regard it as an ongoing endeavor of "composing the core."

Advance human capital and corporate culture

Looking ahead, human resources will become more important than ever in corporate management. While generative AI and other technologies continue to evolve and streamline operations, it is the potential of people that supports sustainable corporate growth. In this sense, enhancing employee engagement is a major priority for

management. We see our Purpose, mentioned at the outset, as a driver of employee engagement. By fostering a culture where individuals empathize with the Company's reason for being and its direction and can act proactively by leveraging their strengths, we aim to cultivate talent and build an environment where they can make a contribution.

I joined the Company as a process engineer at a time when optical fiber development was accelerating and demand was expanding. Within our open culture, I gained experience by identifying challenges independently and collaborating with colleagues to resolve them. Even before establishing its Purpose, the Group had long embraced a culture of trusting people and empowering them with responsibility. I believe that strengthening human resources requires developing people who can independently pursue their ambitions. Equally important are fostering open dialogue and creating an environment that encourages collaboration.

Practice execution-focused management to

become a corporate group that consistently generates profits

I believe we need to clearly demonstrate our ability to continue generating profits in excess of capital costs, so that we can consistently create value as a corporation. To this end, we introduced an indicator called Furukawa Value Added (FVA). This indicator shows whether we are generating NOPAT that exceeds our cost of capital (invested

capital × WACC) and serves as a gauge for deciding whether to continue, scale down, or withdraw from a business. Our FVA has now shifted into positive territory overall, giving us confidence that the initiatives undertaken so far are beginning to show numerical results.

In addition to discussions about capital efficiency, it is naturally important to take the simpler perspective of whether we are properly generating profits. The key question is, "Do we have a structure that can consistently generate steady operating profit?" Our current operating profit is still only 3%-4%, which is not sufficient, but we are working to raise it toward double digits. In terms of operating profit, we first aim to consistently exceed 50 billion yen annually, with 100 billion yen also in our sights thereafter.

By maximizing profits in existing businesses, creating new businesses (including in new domains), and continuously optimizing our business portfolio, we will become a resilient corporate group that consistently generates profits above a certain level. We have set this vision as our goal for 2030 and, above all, are driving execution-focused management that will make that goal fully achievable.

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Directors' Roundtable: Outside Directors and Representative Director

From Vision to Execution-The Role of the Board in

Driving Business Transformation

Guided by the Vision 2030, which sets out our desired state for 2030, we are now pursuing organizational restructuring and M&As as we enter the execution phase of our business portfolio transformation. In this section, Representative Director Satoshi Miyamoto joins Outside Directors Takashi Tsukamoto and Sayaka Sumida to discuss the Board's role in accelerating this transformation. They also talk about recent initiatives, including changes in the organizational structure to strengthen corporate governance.

Business Portfolio Transformation and the Board's Involvement

Evaluating Transformation Initiatives in the Execution Phase

Miyamoto: Under the Vision 2030, the Group has steadily advanced initiatives in its 2025 Medium-term Plan, including business and organizational restructuring, M&As, and other strategic investments. How do you evaluate these actions to transform the business portfolio?

Satoshi Miyamoto

Representative Director and Corporate Executive Vice President, and

General Manager of Strategy Division

Takashi Tsukamoto

Outside Director

Sayaka Sumida

Outside Director

Directors' Roundtable: Outside Directors and Representative Director

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Tsukamoto: The Vision 2030 sets out the ideal image of our business portfolio, and under the 2025 Medium-term Plan we have taken decisive actions to realize that image. I feel that these efforts are now beginning to produce results. In April 2025, we carried out a

large-scale global organizational restructuring in the Communications Solutions business, including the establishment of Lightera Holding G.K. in the optical fiber and cable products business.

I believe that business portfolio transformation requires decisions and actions that involve risk-taking, as well as a stable management foundation to carry them out. While the Group's performance was difficult at the start of the 2025 Medium-term Plan, it has since recovered, and I feel we have finally entered the stage where we can dynamically execute the Vision we have set out.

Sumida: It is true that our performance was sluggish in the first half of the plan, but in our role as Board members we advised on the need for swift

transformation. Even under those conditions, we steadily took action, and I feel that the pace of business portfolio transformation has accelerated, especially since FY2024 as our performance recovered. By focusing investments particularly in data center-related areas, I feel we are beginning to establish growth drivers for the future and are moving closer to realizing the Vision 2030.

Miyamoto: In the first half of the Plan, in particular, the Company lacked the mindset and framework to fully carry through the transformation, and the Board voiced strong criticism. In response, we introduced

ROIC and other performance indicators and established the Business Portfolio Review Committee, thereby strengthening the standards and discipline for putting transformation into practice. In light of these initiatives, I believe our concrete actions are finally producing results.

Satoshi Miyamoto

Representative Director and Corporate Executive Vice President, and General Manager of Strategy Division

Establishment of Lightera to Show Our Commitment to Transformation

Miyamoto: Among recent moves to review our business portfolio, the organizational restructuring of the optical fiber and cable products business was particularly significant. This led to the establishment of Lightera, which Mr. Tsukamoto mentioned earlier. Until now, the Optical Fiber and Cable Products Division in Japan, OFS Fitel, LLC, in North America and Europe, and Furukawa Electric LatAm S.A. in Latin America leveraged their regional characteristics and strengths to pursue their own business development. However, demand has

been rising for building an optimized global supply chain related to the data center market. The need for fast decision-making from a global perspective has also

increased. In response, we integrated these three units and shifted to a unified business management structure. Tsukamoto: First, I would like to commend this major global organizational restructuring, which was launched with a view to future growth. However, many challenges remain. We must build sales and production systems that can accurately respond to global demand trends and steadily resolve each challenge. I expect the Company to approach this with strong determination and turn it into solid results.

Sumida: I feel the establishment of Lightera conveys a strong message that we are executing management from a global perspective. The Board will continue

monitoring developments closely to ensure this message translates into action.

Miyamoto: Indeed, Lightera represented a concrete expression of the Group's seriousness and determination toward global business management and execution.

However, what we have now is only the "framework" created through organizational restructuring, so the real work starts here. With markets changing quickly, we are determined to seize every opportunity, deliver results, and see this through to completion.

Board of Directors Driving Business Portfolio Transformation

Miyamoto: To accelerate business portfolio transformation, under the 2025 Medium-term Plan we established a "strategic investment limit," through which we have actively pursued M&As and capital alliances. For many years, the Group had not engaged

in discontinuous investment, so we were unable to fully leverage the framework when it was first introduced.

Today, however, its use has advanced, and we are seeing positive changes in internal awareness and behavior

Directors' Roundtable: Outside Directors and Representative Director

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toward growth investments. The Board of Directors has also shared a range of opinions and engaged in active

Strengthening Corporate Governance to Support Transformation

members from six to three might lower the quality of audits. I understand those concerns, but in a

discussions regarding this strategic investment limit.

Tsukamoto: At Board meetings, we repeatedly asked,

large organization like ours, audits are conducted on the basis of internal controls and risk management

"Why not make greater use of the strategic investment limit and take action accordingly?" In management, I always keep in mind the need to make decisions and take action, even if it involves pain and breaking free from constraints. I stated that we should approach business portfolio transformation more aggressively and with genuine determination.

Under these circumstances, we have recently engaged in M&A deals aimed at medium- to long-term growth, starting with capital alliances involving Hakusan Inc. and the former Fujitsu Optical Components Limited*. Our progressive use of the strategic investment limit has built a stronger deal pipeline, enabling us to select the most suitable investments from among multiple options. This is a positive development.

Sumida: Given the broad range of the Group's businesses, capital investments and R&D spending tend to be dispersed, creating unavoidable constraints on the amounts we can allocate. I believe this reflects our history as a B2B company that has long supported social infrastructure, together with our orientation toward sustainable growth along that trajectory. At Board meetings, we repeatedly discussed whether concentrating investments might lead to stronger growth. We also debated how best to use cash

generated from asset sales to make growth investments. Miyamoto: I feel we must continue discussions on optimizing the business portfolio at Board of Directors' meetings going forward.

* Now Furukawa FITEL Optical Components Co., Ltd.

Organizational Restructuring Aimed at Strengthening Oversight

Miyamoto: In June 2025, we transitioned to a company with an Audit & Supervisory Committee aimed at strengthening the Board's oversight function and separating execution from supervision. Could you share your views on the background and process that led to this change in governance structure?

Tsukamoto: The concept of driving transformation by restructuring our organization was not new. However, our transition to a company with an Audit & Supervisory Committee represents the embodiment of President Moridaira's strong resolve and management intent

to reinforce execution. With our business portfolio transformation under way and the Group moving into a growth phase, I believe this transition was done with good timing.

Changing our governance structure is not a mere formality but an important issue that goes to the essence of our organization. That is why I also raised the question, "If we are truly serious about strengthening corporate governance, why not transition to a company with a Nominating/Compensation Committee and other bodies?" Considering this background and process, I believe the decision to change the governance structure and make the transition was the right one.

Sumida: I also feel this change represented a major decision for the Company. Modifying our governance structure sent a clear message that we are determined to change.

On the other hand, I also heard concerns that reducing the number of Audit & Supervisory Committee

systems, whether by statutory auditors or by the Audit & Supervisory Committee. The key is to strengthen collaboration with internal audits, including monitoring

of related systems, to build an audit function appropriate for a global company.

Miyamoto: The change in structure should serve as an opportunity to foster a relationship in which internal and outside directors can deliberate as equals with broad and high-level perspectives. To achieve this, the executive side must further refine its business strategies

and strengthen its execution capabilities, while the Board of Directors must create an environment for intensive discussions with a medium- to long-term perspective.

Sayaka Sumida

Outside Director

Directors' Roundtable: Outside Directors and Representative Director

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I am confident this change in governance structure marks the starting point of a transformation that will take the

steps necessary to strengthen the effectiveness of the Board of Directors. After the governance restructuring,

Expectations and Outlook for Medium- to Long-Term Growth

Group's management capabilities to the next stage.

we must focus even more on high-level, strategic discussions, which I feel will place greater demands on

Quality Discussions to Enhance the Board's Effectiveness

Miyamoto: I would like to hear your assessment of the Board's effectiveness to date. From a broad

perspective, please share your views on such matters as agenda setting, the depth of discussion, and whether the environment enables directors to easily exchange information and opinions.

Sumida: In the annual evaluations of the Board's effectiveness, many critical opinions are raised, and the head outside director conveys these views clearly to the executive side. We are committed to taking any

the capabilities of outside directors.

Miyamoto: To ensure even higher-quality discussions, we on the executive side must also find better ways to provide information and set up forums for discussion. As outside directors, what are your views or requests regarding how we can further improve the quality of these discussions?

Sumida: While I greatly appreciate the sharing of materials and minutes from management meetings, there remains an information gap between us and internal directors. I sometimes feel that the discussion time in Board meetings or opinion exchanges with the executive side are not sufficient. It depends on the issue. When discussing the medium-term management plan, for example, it would be beneficial to hold off-site

Takashi Tsukamoto

Outside Director

meetings and other forums for more focused discussions. Tsukamoto: I would like to raise two points. The first concerns the continued evolution of the relationship between internal and outside directors. To enable high-quality discussions, outside directors must have a deep understanding of the executive side's concerns and the Company's management policies. By gaining accurate knowledge of these matters, outside directors can express their views appropriately, and their comments, which reflect different perspectives, will foster interaction within the Company, enabling truly valuable discussions.

My second point concerns the role of the Board in the age of generative AI. While AI can provide answers to questions, it cannot formulate the right questions. I believe that the ability to raise essential questions that AI cannot replace will determine the quality of Board discussions in the future.

Miyamoto: Finally, could you share your future expectations and outlook from a medium- to long-term perspective?

Sumida: The Group's businesses are largely long-term initiatives related to social infrastructure, and we are currently in a seeding phase with a view toward 2030 and beyond. At the same time, generating cash flow and profits in the near term are essential, and balancing medium- to long-term perspectives with short-term results remains a challenge. As a Board member, I want

to support bold initiatives while maintaining this balance. Tsukamoto: Under the 2025 Medium-term Plan, our performance is recovering, and we have entered the execution phase of our business portfolio transformation.

Looking ahead, I believe constructive discussions with a sharper focus on medium- to long-term growth will

become increasingly important. Moreover, our transition to a company with an Audit & Supervisory Committee

is not simply a defensive measure to strengthen governance. Rather, I see it as a proactive approach that should drive corporate value enhancement, and our responsibilities as outside directors and expectations placed on us are rising accordingly.

Miyamoto: Through this dialogue with both of you, I was again reminded that the Group is now truly entering a growth spiral. Moreover, our transformation under the 2025 Medium-term Plan is making steady progress, and I am confident that by further accelerating this progress, we can chart a solid growth trajectory toward 2030.

We on the executive side will further refine our execution capabilities and work together with outside directors to enhance corporate value in a sustainable manner.

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Furukawa Electric Group's Sustainability

Annual Securities Report Item 2. [Overview of Business] 2 [Approach and Initiatives toward Sustainability] (1) Sustainability in general

Material issues

Important management issues for achievement of Vision 2030

Basic Approach Strategy

Under the Furukawa Electric Group Purpose, we are implementing initiatives aimed at achieving the Vision 2030, with the goal of realizing sustainable growth and enhancing the Group's corporate value over the medium to long term. We have also established this fundamental approach as the Furukawa Electric Group Basic Policy on Sustainability.

Website: Furukawa Electric Group Basic Policy on Sustainability

Governance

The Group has established the Sustainability Committee, chaired by the President and vice-chaired by the General Manager of the Strategy Division. The committee deliberates on issues related to sustainability, including the Group's basic sustainability policy, fundamental

We are promoting ESG management aimed at achieving the Vision 2030, with the goal of realizing sustainable growth and enhancing corporate value over the medium to long term.

We define the important management issues* to be addressed as material issues and identify them from both revenue opportunity and risk perspectives.

* In the Furukawa Electric Group, "material issues" are defined as important management issues to be addressed in order to achieve the Vision 2030, and the term is used with a meaning different from that in the finance and accounting context, where it refers to issues that may affect business

Improve capital efficiency

Vision 2030

Reduce cost of capital

Revenue opportunities

Risks

Furukawa Electric Group

matters concerning material issues, and disclosure of sustainability information; checks

on progress; and submits proposals and reports to the Board of Directors. The Corporate

performance or financial position.

2020 2030

Sustainability Office serves as the secretariat, and the committee is generally convened twice a year. Material issues related to risks are addressed in collaboration with the Risk Management Committee.

In addition, the status of operations related to sustainability-including climate change, human capital, and intellectual property-is reported and shared with the Board of Directors on a quarterly basis. The agenda of the Sustainability Committee and the Management Committee is determined by taking into account, among other things, the results of the evaluation of the effectiveness of the Board of Directors as well as feedback from shareholders and institutional investors. For details of the main discussion topics, please refer to the Annual Securities Report.

Sustainability Promotion System

Material issues of revenue opportunities

We identified "Creating businesses that solve social issues" as indispensable, requiring a transformation from an emphasis on the product-out approach to the market-in and further to the outside-in approach. In addition, we identified the slogans "Open, Agile,

Innovative," which represents the creation of innovation through an active transformation stance and the utilization of intellectual assets, and "Building partnerships with various stakeholders," which expresses co-creation with external parties.

Material issues of risks

We have identified the material issues related to environment, social, and governance that are essential for sustainable growth and transformation.

Material issues of revenue opportunities

Material issues of risks

Collaboration

Creating businesses that solve social issues

Board of Directors

Submits proposals and Submits proposals and

reports reports

Sustainability Committee Risk Management Committee

1

Creating businesses that support next-generation infrastructure

Creating environment-friendly businesses

2

Open, Agile, Innovative

Developing business activities that consider climate change

E

S

Strengthening human capital and organizational execution abilities

G

Building a governance system to strengthen risk management

3

Building partnerships with various stakeholders

Corporate governance

Group governance

Supply chain management

Human rights and labor practices

Furukawa Electric Group's Sustainability

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Value Creation Process Directed at Achieving the Vision 2030

Under the Furukawa Electric Group Purpose, the Group is implementing the 2025 Medium-term Plan, which was

formulated in a forward-looking manner with backcasting from the Vision 2030 and defining FY2025 as an interim milestone. In the 2025 Medium-term Plan, we defined the ideal state in FY2025 for each identified material issue, formulated measures to realize them, and set sustainability indicators/targets to measure the progress. In addition, to realize sustainable growth and enhance corporate value over the medium to long term, we are strengthening and creating businesses with a focus on capital efficiency, while reinforcing our management foundation to reduce the cost of capital.

Strengths and business model of the Furukawa Electric Group The strengths of the Group lie in our four core technologies (metals, polymers, photonics, and high-frequency), our development and proposal capabilities that are not limited to specific markets, and the trust of our customers. We are promoting, under the slogan Open, Agile, Innovative, the reinforcement of the Group's strengths, including the utilization of intellectual assets, and the creation of new business models through co-creation with external partners.

Revenue opportunities (Strengthening and creating businesses) Toward 2025, we aim to stabilize earnings in the information, energy, and mobility areas, achieve growth

by strengthening businesses that address social issues, and contribute to the realization of a society where

information, energy, and mobility are integrated. To expand earnings in each business, we are optimizing investment allocation from the perspectives of profitability and growth potential, and further accelerating

management and decision-making with a greater focus on capital cost, including reviewing the business portfolio.

Looking ahead to 2030, we will seek a step-change in growth through creating businesses that solve social issues, such as businesses that support next-generation infrastructure and environment-friendly businesses.

Risks (Strengthening the management foundation) As a foundation to support ESG management, we will strengthen our initiatives on ESG, including climate change, human capital, and risk management/governance.

Furukawa Electric Group's business model and strengths

4 core technologies*1

capabilities not limited to

Realize a

Realize next-generation infrastructure circular that enjoys universal mobility economy

Realize longer healthy life expectancy

Development and proposal

Opportunities 3

Stabilize profits in information, energy, and mobility Contribute to realizing a society that combines these domains

New business models Reinforce the strengths*2

Become carbon neutral

Businesses that support next-generation infrastructure Environment-friendly businesses

Building partnerships with various stakeholders

Medium-term Management Plan 2022-2025

Financial targets/Sustainability targets

specific markets

T s

rusted by customer

Partnerships with multiple stakeholders

Furukawa Electric Group CSR Code of Conduct

Realize a B5G*3 society

Backcasting

Today

Forward-looking

Risks E

Developing business activities that consider climate change

Risks S Strengthening human capital and

organizational execution abilities

Risks G Building a governance system to Corporate governance Supply chain management

strengthen risk management

Group governance

Human rights and labor practices

Furukawa Electric Group Purpose/Core Values

Revenue

2030

*1 4 core technologies: metals, polymers, photonics, high-frequency

*2 Including enhance utilization of intellectual property

Furukawa Electric Group Vision 2030

*3 B5G: Beyond 5G

Revenue

Opportunities 2

Open, Agile, Innovative

Opportunities 1

Revenue

Leap forward through creating businesses that solve social issues

Social issues

Furukawa Electric Group's Sustainability

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Risk Management Indicators and Targets

For each material issue related to revenue opportunities and risks, we set sustainability indicators (KPIs) and targets, and report and share the status of responses and progress with the Sustainability Committee and the Board of Directors on a semiannual basis. In addition, the General Manager of the Corporate Sustainability Office holds regular dialogues (in principle, twice a year) with

each responsible division regarding the progress as well as the validity of the sustainability indicators and targets. For divisions that are not expected to achieve their targets, the General Manager encourages the formulation and implementation of response and improvement measures.

Integration into the company-wide management strategy (2025 Medium-term Plan) and company-wide risk management

We have also steadily advanced initiatives to integrate sustainability-related opportunities and risks into the Group's overall management strategy and enterprise risk management.

Integration into the overall management strategy

• Established the Business Portfolio Review Committee

• Introduced management indicators (ROIC, FVA*1), incorporating ESG factors

  Integration into company-wide risk management

• Establishment of a company-wide risk management framework*2

  (Risk-related material issues are recognized as important risks from a management perspective and are addressed by the Risk

  Management Committee, which manages risks for the entire Group.)

  *1 FVA: Furukawa Value Added. This indicator is an arrangement of EVA tailored for the Company, introduced in FY2022 as an internal management indicator.

  *2 Please refer to "Risk Management" on p.49 of this Integrated Report.

  With the exception of the employee engagement score and the ratio of female workers in managerial positions, the sustainability indicators for FY2024 achieved their respective targets. For the indicators not achieved, we will analyze the factors and continue to examine and implement necessary measures.

  For details of each indicator, please also refer to the relevant pages of this report.

  Material issue		Sustainability indicator		Scope	Result		Target (Reference value)
  					FY2023	FY2024	FY2023	FY2024	FY2025
  Revenue opportunity	Creating businesses that solve social issues	Sales ratio of environment-friendly products		Group	65.9%	74.0%	66%	68%	70%
  	Open, Agile, Innovative/Building partnerships with various stakeholders	R&D expense growth rate for new businesses	(compared with FY2021)	Group	121%	133%	125%	125%	125%
  		Implementation rate of IP landscaping for strengthening the businesses and themes for creating new businesses		Group	77%	100%	45%	100%*1	‒*2
  Risk	Developing business activities that consider climate change	GHG emissions reduction rate (Scope 1&2)	(compared with FY2017)	Group	-45.4%	-	-21.2%	(-39%)*3	(-42%)*3
  			(compared with FY2021)		-	-34.8%	-	-14.0%	-18.7%
  		Ratio of renewable energy use to total consumption		Group	31.6%	39.6%	12%	25%	30%
  	Strengthening human capital and organizational execution abilities	Employee engagement score*4		Furukawa Electric	63	-	65	-	-
  				Group	76	72	-	77	80
  		Ratio of female workers in managerial positions		Furukawa Electric	5.4%	5.4%	5.0%	6.0%	7.0%
  		Ratio of mid-career hires in total new hires*5		Furukawa Electric	48.8%	54.4%	30%*6	30%*6	30%*6
  	Building a governance system to strengthen risk management	Ratio of follow-up on risk management activities for all risk domains		Group	100%	100%	100%	100%	100%
  		Ratio of SAQ implementation based on the CSR Procurement Guidelines for major suppliers		Group	65%	84%	40%	70%	100%
  		Implementation rate of human rights risk training for managerial positions		Group	100%	100%	100%*7	100%*7	100%*7

  *1 This means that all projects have been implemented with respect to the business enhancement and new business creation themes set as of 2022.

  *2 The target was achieved ahead of schedule in FY2024. In FY2025, we will further develop this into specific business activities.

  *3 Base year in and after FY2024 was updated to FY2021; the reduction target value when applied to the former base year of FY2017 is also shown for reference purposes.

  *4 The scope was expanded to cover all group companies in Japan and abroad in FY2023, and the target was changed from the Company's target to the Group's target.

  *5 New hires represent new graduates and mid-career hires, covering managerial positions, career-track, and clerical positions.

  *6 This means that about 30% will be maintained in each fiscal year.

  *7 This means that 100% globally for each fiscal year will be continued.

  Strategies to Realize Value Creation

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  Timing (including plans)

  Main objectives

  Message from the General Manager of the Strategy Division

  We will continue strengthening our strategic and organizational capabilities to achieve the Vision 2030.

  Satoshi Miyamoto

  Representative Director and Corporate Executive Vice President, and General Manager of Strategy Division

  Three initiatives under the 2025 Medium-term Plan

  
  
  

  Under our current 2025 Medium-term Plan, we are working on maximizing profits in existing businesses with a focus on capital efficiency, building a foundation for

  creating new businesses by strengthening development and proposal capabilities, and strengthening the foundation for ESG management. At the same time, we have introduced several new initiatives for the first time.

  The first is the activities of the Business Portfolio Review Committee. To build an optimal business portfolio, the Committee clarified the positioning of businesses in terms of growth potential and profitability and executed selective capital investments. It also translated this process into concrete actions, including large-scale organizational restructuring in the metal wire business and the optical fiber and cable business. The second initiative is our strategic investment limit, which we are using to pursue M&As and capital alliances. Under the 2025 Medium-term Plan, we set aside up to 50 billion yen for strategic investments and concentrated on discontinuous investments in growth areas, including the data center market, as well as healthcare and other new business domains. The mindset of our business divisions has also shifted significantly toward taking the initiative on capital policies. We will continue accelerating investments in priority areas. The third initiative is the introduction of sustainability indicators and targets. This has enabled us to quantify non-financial activities while managing progress and driving initiatives in tandem with financial measures. Now, in the final year of the 2025 Medium-term Plan, I feel these efforts have begun to yield tangible results.

  Business portfolio review (including main business reorganizations) during the 2025 Medium-term Plan period

  Sale of shares of Furukawa Battery Co., Ltd.	Second half of 2025 (planned)	Corporate governance reform
  Acquisition of shares of Fujitsu Optical Components Limited	April 2025	Growth strategy
  Reorganization of the metal wire business	April and October 2025	Profitability improvement
  Reorganization of the global optical fiber and cable products business	April 2025	Growth strategy and profitability improvement
  Capital/business alliance with Metro Weather Co., Ltd.	February 2025	Growth strategy
  Sale of shares of Fuji Electric Engineering & Construction Co., Ltd. (through a share exchange with Fuji Electric Co., Ltd.)	February 2025	Capital efficiency improvement
  Purchase of shares of Hakusan Inc.	January 2025	Growth strategy
  Conversion of MFOPTEX Co., Ltd., into a consolidated subsidiary	October 2024	Growth strategy
  Decision to withdraw from the reflow tin plating business	July 2024	Capital efficiency improvement
  Partial sale of shares of UACJ Corporation	June 2024	Capital efficiency improvement
  Transfer of interest in Essex Furukawa Magnet Wire LLC	April 2024	Capital efficiency improvement
  Investment in Tokamak Energy Ltd.	January 2024	Growth strategy
  Sale of shares of TOTOKU ELECTRIC CO., LTD.	December 2022	Corporate governance reform
  Integration of manufacturing of general-purpose electric wires for the construction and electric sales markets into Showa Furukawa Cable Co., Ltd.	July 2022	Profitability improvement

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  Value Creation by Furukawa Electric Group

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  Growth strategy toward Vision 2030 and beyond

  FY2025 is the year to solidify the foundation for achieving the Vision 2030. Guided by the Furukawa Electric Group Purpose, we are restructuring our management and giving concrete shape to growth strategies targeting the Vision 2030 and beyond.

  While our growth strategy still requires further refinement, for now we will focus through around 2028 on larger capacity data centers and expansion of energy-saving solutions that support this trend. Positioning the rapidly expanding data center market as a priority area, we will increase investments and sales efforts to expand production capacity for information and communications products, such as optical fiber and cable, and optical components, as well as functional products including heat radiation and cooling systems.

  Looking ahead to 2030, we will increase our focus on contributing to realization of a sustainable society through energy management. With this in mind, we are developing advanced photonics products that can simultaneously realize all-optical networks, such as photonics-electronics convergence, as well as a highly efficient energy society. At the same time, we will step up the supply and installation of extra-high-voltage, submarine,

  and underground cables, particularly for national projects (wide-area interconnection lines) to transmit renewable energy from large power-generation regions to major consumption centers. We will also develop and commercialize superconducting wires essential for the

  practical use of nuclear fusion power generation and next-generation energy solutions like green LPG, while supplying high-voltage components to support the spread of EVs. In these ways, we will help address energy and environmental challenges.

  Looking beyond 2030, we will seek to expand into new businesses by developing laser application products and medical components/devices utilizing metal and photonics technologies to address societal challenges, such as an aging society with declining birth rates and a shrinking workforce.

  Strengthening strategic capabilities and promoting DX and ESG initiatives to accelerate corporate value enhancement

  Strengthening our strategic capabilities

  In the process of shaping our growth strategy, I realized that the Group had a weakness in objectively reviewing its position and refining its business strategy based on market

  perspectives and benchmarking against other companies. To address this, we consolidated and strengthened two functions-market analysis and business strategy review and proposal-within the Strategy Division, essentially creating an "internal activist" capability. The human resources and corporate planning departments are now more deeply involved in

  Business/product development toward achieving Vision 2030

  Composing the core of a brighter world

  Furukawa Electric Group Purpose

  Vision 2030

  Create global infrastructure combining information, energy, and mobility

  Advance information,

  and solve energy related problems

  Mobility

  Energy

  Information

  Global infrastructure

  
  
  

  Phase 3

  Phase 2

  Phase

  １

  
  
  

  Challenge new domains that will create indispensables for people and society

  • Laser applications (Infrastructure Laser, BRACE)

  • Medical components/devices

    (NT wire, optical probes, laser devices)

    Contribute to realization of a sustainable society through energy management (increase data center performance and respond to EV)

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priority businesses. By going beyond conventional capital investment allocation to focus on targeted deployment of talent and improvements in organizational management, they are strengthening our strategy execution ability.

Strengthening human capital and organizational execution abilities To ensure steady execution of our management and business strategies, our top priority is to strengthen human capital and organizational execution abilities. To this end, we are

building a medium-term talent portfolio through succession planning and human resource development programs. We are also working to strengthen recruitment by introducing course-based hiring for new graduates and diversifying career recruitment channels.

At the same time, our organization must provide an environment where employees can grow, feel a sense of purpose, and perform at their best. Accordingly, we are working to help each employee understand the content and significance of our Purpose, which defines our reason for being, and to foster empathy with it. We also provide diverse opportunities for learning and challenge through support for self-directed career development, reskilling measures, and internal open recruitment and secondary job systems.

To monitor the state of our people and organization, we conduct an employee

Addressing climate change

Let me also touch on our climate change initiatives, which are part of our sustainability activities aimed at enhancing corporate value. The Group has set a goal of achieving carbon neutrality across the entire supply chain by 2050. To this end, we are promoting the use of renewable energy and other measures.

In addition to the hydropower facilities owned by domestic group companies, we are installing solar power equipment, contracting renewable energy-derived electricity from utilities, and purchasing renewable energy certificates. Through these initiatives, we achieved our Scope 1 and 2 greenhouse gas (GHG) reduction targets ahead of schedule. We are also working to reduce GHG emissions across the entire supply chain, including Scope 3. To this end, we ask our suppliers for their cooperation in emission reduction through self-assessment questionnaires (SAQs), partner meetings, and the like. We also engage in co-creation with our customers to promote recycling of products and materials.

Building a strong organization through strategic execution and responsiveness to environmental changes

engagement survey every year and operate a PDS (plan-do-see) cycle to further improve our initiatives.

Promoting DX

Driving DX is also indispensable to achieving the Vision 2030. The Group's DX Vision is: "In anticipation of the societal changes leading up to 2030, we are committed to enhancing our corporate value by leveraging digital technologies to revolutionize our business operations and work practices."

Under the 2025 Medium-term Plan, we are focusing particular attention on improving manufacturing (monozukuri) efficiency and leveraging data to deliver fast acting management. At our development and production sites, we are already seeing significant improvements in quality control enabled by AI-based automated image inspection, accelerated development using materials informatics (MI), and real-time production improvements driven by AI. These initiatives are steadily raising the level of our manufacturing (monozukuri) capabilities.

As a foundation for promoting DX, we established a core organization to drive the entire process, from strategy formulation to execution support, while advancing DX talent development and strengthening our group-wide IT infrastructure. We are also focusing on initiatives to apply generative AI across the Group on a daily basis.

The first half of the 2025 Medium-term Plan presented difficult challenges, but I now feel our efforts are bearing fruit and setting us on a growth trajectory. Going forward, we will increase the effectiveness of our strategies to ensure our achievement of the Vision 2030.

To deliver continuous growth beyond 2030, the Group must remain a strong organization capable of adapting to rapid environmental changes. In addition to maintaining an optimal business portfolio that evolves with the environment, we will continue providing products and services that are indispensable to society and build an organization supported by robust governance and a financial foundation that is resilient to change.

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Feature Article

1

Strategy for expanding earnings in

the growing data center market

Sales forecast for the data center market (Overall lineup of data center products)

vs. FY2023

double

More than

Further growth

With respect to maximizing profits in existing businesses under the 2025 Medium-

FY2023

results

FY2024

results

FY2025

forecast

FY2030

forecast

term Plan, we are focusing on the growing data center market and working to expand earnings from our lineup of data center products-such as optical fiber and cable and components in the Communications Solutions business, as well as heat radiation and cooling systems in the Functional Products business. We expect sales of these data center products in FY2025 to more than double compared with FY2023, and we are strengthening these as a growth driver in achieving Vision 2030.

Strategy

1

Optical Fiber & Cable Products and Optical Components

Shift to high-value-added products and solutions and accelerate production expansion

Along with our shift to high-value-added products and solutions, we are advancing technology development, accelerating production, and strengthening sales capabilities by allocating human resources and expanding our product lineup.

In the optical fiber and cable products business, we carried out a large-scale organizational restructuring from a global perspective, including the establishment of

Furukawa Electric Group's lineup of data center products

(Solutions)

Existing technologies

Future

Switches

Optical transceivers

➊ DFB laser chips

For co-packaged optics (CPO)

❺ MPO Multi-fiber cable

➏ MT ferrules

Lightera Holding G.K. As part of our capital policy, we worked to strengthen our business structure, including by making Hakusan Inc. and the former Fujitsu Optical Components Limited* into subsidiaries.

Going forward, we will promote the development and mass production of IOWN-related products. We also project that sales of optical-related products for the data center market (optical fiber and cable products and optical components) in FY2025 will be roughly four

technologies Inter-board

connections (from 2025)

times the level of FY2023.

* Now Furukawa FITEL Optical Components Co., LTD.

➍ ❺ ➏

❸ ❷ ➊

❷ External light sources (ELSFP) ❸ Polarization maintaining fiber ➍ Optical connectors for PIC

Strategy

Heat Radiation and Cooling Systems

❸ Polarization maintaining fiber (PMF)

❺ MPO Multi-fiber cable

Switch-server interconnection

Servers

Cooling

High-speed transmission copper cable

Oxygen-free copper wires

Printed wiring

2 Develop and expand high-performance, differentiated products

To address the issue of increasing heat generated by CPUs and GPUs in data centers, we are developing and expanding high-performance, differentiated products, such as heat sinks and other heat radiation and cooling systems. By building a co-creation framework with

Data center

❽ ❼

➏ Storage

11

10

❼ Heat sinks (air-cooling)

❼ Cold plates (water-cooling)

Materials for copper-clad laminates (CCLs) of multilayer printed wiring boards

board materials

❽ Electrolytic copper foil

major data center customers, we have captured needs more quickly and accelerated product commercialization. As a result, sales of air-cooling heat sinks for the data center market in FY2024 grew to around 3.5 times the FY2022 level.

Going forward, we expect heat sinks to shift from air cooling to water cooling. The Group has already made progress in developing water-cooling heat sinks and other products in response to customer requests, and we plan to begin mass production at our plant in the Philippines

in September 2026. We will continue advancing co-creation with customers to address their needs.

Manufacturing plant for data-center water-cooling modules FURUKAWA ELECTRIC THERMAL MANAGEMENT SOLUTIONS &

PRODUCTS LAGUNA, INC. (Philippines)

FURUKAWA ELECTRIC GROUP 22 INTEGRATED REPORT 2025

Used in the last stage processes in semiconductor manufacturing

➏ Wiring for inductors

HDDs

10 Aluminum blanks for hard disk drive (HDD)

SSDs

11 Tape for semiconductor process

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Message from the General Manager of the Finance & Accounting Division

Striking a balance between growth investments and financial soundness, we will support sustainable growth from a financial perspective.

Koji Aoshima

Representative Director and Corporate Senior Vice President, and General Manager of Finance & Accounting Division

Review of FY2024 Financial Results

In FY2024, the Group made progress in transforming its business portfolio, which began to produce positive results. Consolidated net sales reached 1,201.8 billion yen, up 13.7% year on year. Operating profit rose 321.6% to 47.1 billion yen, and ordinary profit grew 373.1% to 48.6 billion yen. Profit attributable to owners of parent was 33.4 billion yen, up 412.7% year on year. These figures represent high levels compared with our past performance.

By strengthening our supply framework for data center-related products in line with market growth, we posted an improved performance over FY2023. In the Energy Infrastructure business, our earnings were boosted by profit-focused orders, the

concentration of construction projects for extra-high-voltage underground cables in Japan, and continued robust demand for renewable energy projects. In the Automotive Products & Batteries business, we improved production efficiency of wire harnesses on the back of stable customers' production plans, posting operating profit well above 20.0 billion yen and lifting overall group performance. In the Functional Products business, some products, such as tape for semiconductor process and copper foil, fell short of expectations due to

delayed recovery in demand for smartphones, PCs, and other electronics-related markets.

2025 Medium-term Plan management targets Financial targets

FY2025

(2025 Medium-term Plan targets)

FY2022

(Results)

FY2023

(Results)

FY2024

(Results)

FY2025

(Forecast)

6% or more

11% or more

0.8 or less

35% or more

1,100.0

billion yen or more

58.0

billion yen or more

37.0

billion yen or more

1,085

110

Nevertheless, we posted year-on-year increases in both sales and operating profit.

Although business uncertainty has grown since the COVID-19 pandemic, we will continue working to enhance the probability of achieving our financial targets by assessing changes in the external environment and identifying potential risks.

* Partially restated only the FY2022 financial results following the voluntary application of the International Financial Reporting Standards (IFRS) to UACJ Corporation, an equity-method associate.

Sustainability indicators and targets

For details, please refer to "Indicators and Targets" in the "Furukawa Electric Group's Sustainability" section on p.18 of this Integrated Report.

About

Furukawa Electric Group

Message from the General Manager of the Finance & Accounting Division

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

Capital Policy Execution

-Investments for Sustainable Growth and Ensuring a Sound Financial Base-

Under the 2025 Medium-term Plan, our basic policies for capital strategy and cash allocation are to implement well-balanced investment control, ensure the soundness

to be around 10.0 billion yen below the initial plan of 190.0 billion yen under the 2025 Medium-term Plan period. Our R&D spending has progressed largely in line with plan, particularly in the Communications Solutions business, and we are continuing to make focused investments aimed at future business growth.

Capital expenditures and R&D expenses (FY2022-2025 cumulative)

of our financial base, and provide stable and ongoing shareholder returns. By investing

in growth areas while ensuring financial soundness, we aim to achieve sustainable

Capital expenditures

R&D expenses

enhancement of corporate value.

Well-balanced investments

(capital expenditures, R&D expenses, and strategic investments)

We established a 50.0 billion yen strategic investment limit for the period of the 2025 Medium-term Plan. Unlike capital expenditures, this is intended to drive discontinuous growth, including through M&As. Having already executed several strategic investments, our policy is to continue allocating funds flexibly to promising projects that can drive future growth. In line with the basic policies of our capital strategy outlined earlier, we will pursue

As of May 2022

15% 18%

15%

19%

15% 190.0

billion yen*

8%

31%

13%

20%

175.3

billion yen

11%

8%

27%

(Initial plan)

* Revised to 180.0 billion yen in May 2023

As of May 2025

Forecast

As of May 2022

18%

21%

8%

2%

100.0

billion yen

45%

9%

2%

102.5

billion yen

45%

19%

7%

16%

7%

(Initial plan)

As of May 2025

Forecast

agile investments that capture growth opportunities while maintaining financial soundness.

Regarding capital expenditures, we reduced costs and optimized allocation through adjustments to timing, content, and specifications in response to changes in the business environment and a review of our focus areas. As a result, we expect capital expenditures

Business portfolio optimization and allocation of management resources

• Communications Solutions ■ Energy Infrastructure ■ Automotive Products & Batteries

• Electronics Component Material ■ Functional Products ■ Service and Developments, etc.

  
  
  

  Ensuring the soundness of our financial base

  Business operating using management indicators (e.g., ROIC, FVA)

  In addition to net sales and operating profit, the Group sets various other financial targets, such as ROIC, ROE, net D/E ratio, and equity capital ratio, and we apply these indicators rigorously to practice quantitative management across our individual business operations.

  Next generation

  Growing

  High

  8%

  Issues exist

  Low

  Strategic restructuring

  Strengthen Profit base earnings

We place particular emphasis on securing profitability that exceeds the cost of capital. While keeping ROE in mind, we focus on management that emphasizes ROIC,

Average annual sales growth rate

Low

0% Medium

ROIC spread

1.2%

High

a more fundamental indicator of capital efficiency. The key question is how much

About

Furukawa Electric Group

Message from the General Manager of the Finance & Accounting Division

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

value we generate relative to invested capital. By sharing this perspective across both management and frontline operations, we enable more effective decision-making.

To this end, we introduced Furukawa Value Added (FVA), an internal adaptation of EVA, and have promoted its use in the Company as a business management and evaluation indicator alongside ROIC. Because the Group operates a wide range of

businesses, it is extremely important to use and apply common indicators across business divisions and group companies. By introducing FVA, we are instilling initiatives to improve both profitability and working capital throughout the Group. We believe that embedding business operations at the operational level using such management indicators will form a crucial foundation for future management.

Stable and ongoing shareholder returns

Regarding shareholder returns, our basic policy is to provide stable and ongoing returns, with dividends linked to performance and a target payout ratio of 30% of profit

attributable to owners of parent. For FY2024, we paid an annual dividend of 120 yen per share, and for FY2025 we also forecast an annual dividend of 120 yen per share. We will continue striving to achieve our financial targets and deliver dividends in line with our shareholder return policy.

Annual dividend per share

FVA tree

Operating profit

Extraordinary items, etc.

or

Working capital

Non-current assets

Profit attributable to owners of parent

FY2021

(Results)

10.1

billion yen

FY2022

(Results)

15.9

billion yen

FY2023

(Results)

6.5

billion yen

FY2024

(Results)

33.4

billion yen

FY2025

(Forecast)

36.0

billion yen

Payout ratio 41.8% 35.4% 64.9% 25.3% 23.5%

Role of Finance in Achieving Vision 2030

Improving the PBR and equity capital ratio

The financial targets set out in the 2025 Medium-term Plan will, once achieved, enable us to stably maintain a PBR above 1x. By clearly presenting a path toward achieving Vision 2030 and linking it to growth expectations, we believe we can further improve our PBR in the future.

Raising our equity capital ratio is another metric we should keep in mind. This is particularly important in transactions with overseas companies, where the ratio is a key measure of financial soundness and creditworthiness. A high equity capital ratio serves as proof of a company's credibility and supports expansion of business opportunities, so we will continue reducing interest-bearing debt to increase the ratio.

We recognize that the market expects the Group to deliver sustainable growth. To meet this expectation, we must continue making growth investments and steadily generate returns as a result. As General Manager of the Finance & Accounting Division, I believe my role is to clearly demonstrate using concrete figures how we are enhancing corporate value. In pursuing sustainable growth, the Group also places strong emphasis on non-

financial and ESG indicators, and we will keep this in mind from the financial standpoint as well when allocating resources.

In our quest to achieve the 2025 Medium-term Plan and Vision 2030, I will provide firm financial support while maintaining a steady balance between growth investments and financial soundness.

About

Furukawa Electric Group

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

Business Strategies

Business Overview and Review of FY2024

Percentage of total net sales

Net sales/Operating profit

Percentage of CO2 emissions (excl. SF6)

Carbon efficiency (vs. FY2021)

13.9%

(billions yen) (billions yen)

Infrastructure

Communications

• Operating profit

  300

  200

  100

  217.6

  6.5

  168.0 167.0

  30

  20

  10

  1.20

  17.4%

  1.00

  0.80

  0.60

  		0.71
  			0.53 0.50

  1.00

  0 0

  0.40

  Solutions

  -4.0

  -10

  0.20

  -13.0 -20

  FY2022 FY2023 FY2024

  0

  FY2021 FY2022

  FY2023 FY2024

  Infrastructure

  Energy Infrastructure

• Net sales

  11.8%

• Operating profit

  (billions yen)

  106.3

  110.2

  9.8

  2.1

  1.7

  150

  120

  90

  60

  30

  0

  142.1

  FY2022 FY2023 FY2024

  (billions yen)

  15

  12

  9

  6

  3

  0

  1.20

  4.8%

  1.00

  0.80

  0.60

  0.40

  0.20

  0

  1.00

  		0.81 0.77
  						0.36

  FY2021 FY2022

  FY2023 FY2024

  34.1%

  • Net sales

    337.4

    379.8

    409.5

    27.6

    15.6

    1.5

    32.6%

    (billions yen) (billions yen)

  • Operating

    450

    40

    1.20

    0.68

    0.58

    0.50

    1.00

    Electronics & Automotive Systems

    profit

    360 32

    1.00

    Automotive Products & Batteries

    Electronics & Automotive Systems

    Electronics Component Material

• Net sales

  27.2%

• Operating profit

  270

  180

  90

  0

  (billions yen)

  350

  280

  210

  140

  70

  0

  FY2022 FY2023 FY2024

  327.0

  273.0 273.9

  3.2

  5.0

  3.1

  FY2022 FY2023 FY2024

  24

  16

  8

  0

  (billions yen)

  10

  8

  6

  4

  2

  0

  0.80

  0.60

  0.40

  0.20

  0

  18.6%

  1.20

  1.00

  0.80

  0.60

  0.40

  0.20

  0

  FY2021 FY2022

  			0.88 0.84 0.63

  1.00

  FY2021 FY2022

  FY2023 FY2024

  FY2023 FY2024

  12.2%

  • Net sales

    (billions yen) 147.0 (billions yen)

    Functional Products

    Functional Products

• Operating profit

150

120

90

60

30

0

FY2022 FY2023 FY2024

20

16

12

8

4

0

1.20

1.00

0.80

0.60

0.40

0.20

0

1.00

0.66

0.67

0.55

FY2021 FY2022

126.5

115.4

14.1

5.5

4.2

FY2023 FY2024

26.1%

Note: FY2024 figures were restated on May 13, 2025, due to changes in certain business segments and sub-segments, as well as partial changes in head office expenses allocated from FY2025.

• The industrial laser business was transferred from the Electronics & Automotive Systems to the Service and Developments, etc., segment.

• Within the Infrastructure segment, the metal wire business was transferred from the Communications Solutions business to the Energy Infrastructure business.

  About

  Furukawa Electric Group

  Business Strategies

  Value Creation by Furukawa Electric Group

  Strategies to Realize Value Creation

  Business Enhancement and Creation

  Strengthening Management Foundation

  Data

  Business Overview Main Products and Services
  
  

  Optical solutions

  FITEL products

  Broadband solutions

  • Optical fibers (e.g., low-loss, low-bending-loss, low-latency fibers, submarine fibers, specialty fibers)

    
    
    

  • Optical cables in general (incl. rollable ribbon cables)

  • LAN cable

  • Optical connection products (incl. MT ferrules)

  • Fusion splicers

    
    
    

  • DFB lasers

  • Variable wavelength laser modules

  • Laser excitation modules

  • Optical transmission devices

  • Optical transceiver modules

    
    
    

  • FTTH systems

  • Radio systems

  • Network routers

Electronics & Automotive Systems

Infrastructure

Communications Solutions

Related markets and social issues

• 5G/B5G • Carbon neutrality

• Resilient communication infrastructure

Main products and services

Automotive Products & Batteries

Wire harnesses

High-voltage products

Functional products

Electronics & Automotive Systems

Electronics Component Material

Related markets and social issues

• Automotive safety, weight reduction, and electrification

• Carbon neutrality and circular economy

  Main products and services

  • Aluminum wire harnesses

  • Corrosion-proof terminals (Alpha Terminal)

  • Products using flat cables

  • High-voltage wire harnesses, high-voltage junction boxes, high-voltage busbar products, and large-current high-voltage connectors

  • Wire harnesses inside the battery pack

  • Steering roll connectors (SRCs)

  • Lead battery state sensor (BSS)

  • Peripheral monitoring radar

    Related markets and social issues

• xEVs • Data centers and AI servers

• Circular economy • Healthcare

  Main products and services

  Electric conductors

  • Oxygen-free copper wires

    Copper &

    high performance material products

    • Oxygen-free copper strips

    • Copper alloy strips

    • Resistance materials

    • Ni-Ti alloy (medical-use)

    
    
    

  • Copper wires and alloy wires

  • Aluminum wires

  • Fine magnet wires

Infrastructure

Functional Products

Functional Products

Related markets and social issues

• Renewable energy

• Communications infrastructure

• Mobility

Main products and services

At &

functional plastics

• Tape for semiconductor process ● Insulation materials

• Protective conduits for cables ● High-performance foam

• Troughs made from recycled materials

Thermal management solutions & products

• High-performance heat sinks and heat pipes

• 3D vapor chambers

• Thermal dissipation products (e.g., water-cooling modules)

Memory disks

• Aluminum blanks for HDDs

Copper foil

• Electrolytic copper foil for printed wiring boards

• Electrolytic copper foil for batteries

Energy Infrastructure

Related markets and social issues

• Social and next-generation infrastructure

• Renewable energy

• Disaster prevention and mitigation

  Power cable

  Main products and services

  
  
  

  • Extra-high-voltage/high-voltage underground cables (cables, components, installation)

  • Submarine transmission cables (cables, components, installation)

  • Water pipes (incl. installation)

    Industrial cable & power cable accessories

  • Industrial power cables

    
    
    

  • Heat-resistant power cables for vehicles

  • Power cables for ocean research vessels

  • Overhead transmission line accessories

  • Electrical power distribution accessories

  • Other functional products

About

Furukawa Electric Group

Business Strategies

Value Creation by Furukawa Electric Group

Strategies to Realize Value Creation

Business Enhancement and Creation

Strengthening Management Foundation

Data

2025 Medium-term Plan Targets (Net sales/Operating profit, ROIC)

Infrastructure

Communications

Net sales/Operating profit

■ ■ Net sales (left) ■ ■ Operating profit (right)

178.5

167.0

7.5

(billions yen) 235.0 (billions yen)

ROIC (FY2021 results → FY2025 forecast)

Vertical axis: Net sales CAGR*2 15%

(FY2017-2021 →

Solutions

Toshihiko Ota

Corporate Senior Vice President and

240

160

80

18FY2021-2025)

Horizontal axis: ROIC*3

12(FY2021 → FY2025)

Bubble: NOPAT*4,5 (FY2021 → FY2025)

6

10%

5%

General Manager of Communications Solutions Division

0 0 0%

-4.3 - 4.0 -6

Business Environment Analysis

FY2024 results

(announced May 13, 2025)

FY2024 results*1

(after segment reclassification)

FY2025 forecast

(announced May 13, 2025)

-5%

0% 5% 10% 15% 20%

Business environment

Key revenue opportunities

• Increased data traffic worldwide (high speed, large volume, low latency, energy saving)

• Expansion of data centers, widespread use

  Strengths

• Global production network in growing markets

• Differentiation through high-performance products and technologies (e.g., optical fiber and cable, digital coherent and IP network

  *1 FY2024 figures were restated on May 13, 2025, due to changes in certain business segments and sub-segments, as well as partial changes in head office expenses allocated from FY2025.

  • The industrial laser business was transferred from the Infrastructure segment (Communications Solutions) to the Service and Developments, etc., segment.

  • Within the Infrastructure segment, the metal wire business was transferred from the Communications Solutions business to the Energy Infrastructure business.

    *2 CAGR: Compound annual growth rate

    *3 ROIC: Return on invested capital (after taxes)

    *4 NOPAT: Calculated as net income + interest expenses after taxes in accordance with IFRS

    *5 Negative values are displayed as white-filled bubbles.

    of AI technology, B5G, cloud services, and advances in IoT

    Major risks and threats

    • Impact of US tariffs

    • Trade friction between the US and China

    • Supply chain problems

    • Soaring personnel expenses, energy costs and raw material expenses due to inflation

      technologies)

      Challenges

      • While taking into consideration the business environment, maximally utilize the global production network to provide optimum solutions to the market

        Priority Measures in the 2025 Medium-term Plan:

        Maximizing Profits in Existing Businesses with a Focus on Capital Efficiency

        Optical fiber and cable

        FY2024

        FY2025 (final year of the 2025 Medium-term Plan)

        Business environment
        Initiatives

        • Strong demand in the data center market

        • Telecommunications market showing signs of gradual recovery from the latter half of FY2024, but sales remained sluggish, particularly in North America and LATAM

        • Capture robust demand related to data centers and telecommunications

        • Expand the product lineup (including high-value-added products) and strengthen the supply system

        • Strengthen marketing activities and improve manufacturing systems

        • Continued strong growth of the data center market

        • Continued signs of recovery in the telecommunications market

      • Driven by demand for dark fiber

      • BEAD*6 demand outlook unclear

        *6 BEAD: Broadband Equity Access and Deployment Program

        2025 Medium-term Plan: Business Strategy

        Basic policy

        Contribute to "creating global infrastructure combining information, energy, and mobility" as set forth in Vision 2030 by evolving the elemental telecommunications technology accumulated over the years and providing further solutions.

        Main strategies

        Telecommunications domain: Secure a key position in the supply chain and provide high-value-added product solutions that contribute to "energy saving" in data transmission

        Non-telecommunications domain: Provide high-value-added product lineups and services for contributing to the generation, transmission, and detection of data and energy that will lead to "increased safety and quality of life"

        Optical solutions: Capture as much data center demand as possible, build a system for increasing North America cable sales, and expand solution sales

        FITEL products: Capture as much data center demand as possible, expand the lineup in partnership with FFOC, and develop products for CPO

        • Continue promoting sales, expanding production, and broadening solutions for the data center market

        • Establish North American cable sales expansion system

        Sales of optical fiber and cable

        • High-value-added solutions ■ General-use products

        Broadband solutions: Capture as much CATV demand in Japan as possible, and promote co-creation with other companies

        FY2023

        results

        FY2024

        results

        FY2025

        forecast

        
        
        

        Business Environment Analysis

        
        
        

        0

        130.9

        8.9

        9.8

        Business Strategies

        ROIC (FY2021 results → FY2025 forecast)

        Vertical axis: Net sales CAGR*2 15%

        (billions yen) (FY2017-2021 →

        12FY2021-2025)

        6.5

        0%

        3

        40

        5%

        6

        80

        9

        120

        10%

        Horizontal axis: ROIC*3 (FY2021 → FY2025)

        Bubble: NOPAT*4,5 (FY2021 → FY2025)

        About

        Furukawa Electric Group

        140.0

        142.1

        160

        Net sales/Operating profit

        ■ ■ Net sales (left) ■ ■ Operating profit (right)

        (billions yen)

        Infrastructure

        Energy Infrastructure

        Eiichi Nishimura

        Corporate Senior Vice President and General Manager of Energy Infrastructure Division

        2025 Medium-term Plan Targets (Net sales/Operating profit, ROIC)

        Data

        Strengthening Management Foundation

        Business Enhancement and Creation

        Strategies to Realize Value Creation

        Value Creation by Furukawa Electric Group

        
        
        

        FY2024 results

        (announced May 13, 2025)

        FY2024 results*1

        (after segment reclassification)

        0

        FY2025 forecast

        (announced May 13, 2025)

        -5%

        0% 5% 10% 15% 20%

        Business environment

        Key revenue opportunities

    • Rapidly growing demand centered on renewable energy projects

    • Growing demand for products for next-

      Strengths

  • Extensive extra-high-voltage underground and submarine power cable experience in Japan and overseas

  • Development of technology centered on

    *1 FY2024 figures were restated on May 13, 2025, due to changes in certain business segments and sub-segments, as well as partial changes in head office expenses allocated from FY2025.

  • The industrial laser business was transferred from the Infrastructure segment (Communications Solutions) to the Service and Developments, etc., segment.

  • Within the Infrastructure segment, the metal wire business was transferred from the Communications Solutions business to the Energy Infrastructure business.

    *2 CAGR: Compound annual growth rate

    *3 ROIC: Return on invested capital (after taxes)

    *4 NOPAT: Calculated as net income + interest expenses after taxes in accordance with IFRS

    *5 Negative values are displayed as white-filled bubbles.

    generation digital infrastructure(e.g., data centers)

    Major risks and threats

    • Late to secure the personnel needed to expand the business

    • Changes by customers to the timing of large projects

    • Soaring raw material prices

submarine cable

• High-value-added products based on polymer and metal material technologies

  Challenges

• Steadily secure orders for renewable energy projects, and secure manufacturing capacity

• Maximize synergies from the integration of the metal wire business

• Create a more specific plan for expanding the direct current business (wide-area interconnection submarine power cable)

  Priority Measures in the 2025 Medium-term Plan:

  Maximizing Profits in Existing Businesses with a Focus on Capital Efficiency

  Power cable systems

  FY2024

  FY2025 (final year of the 2025 Medium-term Plan)

  Business environment
  Initiatives

  • Japan extra-high-voltage underground cables: Continued market growth due to demand for power cable replacement (OF replacement)

  • Japan submarine cables for renewable energy: Progress in harbor based large offshore wind power projects

  • Japan underground cables for renewable energy: Ongoing expansion of onshore wind and solar power generation projects

  • Increase the ratio of target segments

  • Continue strengthening project management

  • Ensure proper implementation of large-scale projects already on order

  • Advance to the demonstration phase of technology development (elemental technology development phase largely completed)

  • Japan extra-high-voltage underground cables: Continued strong demand for power cable replacement (OF replacement)

  • Japan submarine/underground cables for renewable energy: Growing demand to address carbon neutrality initiatives

    Construction completed and operations started at harbor based large offshore wind power projects Concrete plan for offshore wind power projects in

    2025 Medium-term Plan: Business Strategy

    Basic policy

    Contribute to building safe, peaceful, and rewarding social infrastructure through unique products and technology, and expand the business

    1. Safe: Become carbon neutral in 2050

    2. Peaceful: Disaster prevention and mitigation (town planning for mitigating disasters)

    3. Rewarding: Respond to the aging society and build next-generation infrastructure (people-oriented town planning)

       Main strategies

       Achieve both business expansion and capital efficient management through strategic growth investments in the target segments

       Power Cable target segments: Japan extra-high-voltage underground cables, Japan renewable energy (submarine and underground cables), and overseas submarine cables (Asia)

       general sea areas

       • Continue increasing the ratio of target segments

       • Strengthen cable manufacturing and installation capabilities

    40% 60%

    Changing sales ratio of target segments

    45% 55%

    • Target segments: Japan extra-high-voltage underground cables, Japan submarine and underground cable for renewable energy, and overseas submarine cables in Asia

      Industrial Cable & Power Cable Accessories target segments: Social infrastructure, Japan renewable energy, disaster prevention and mitigation, next-generation infrastructure

    • Other

    FY2021 results

    FY2025 forecast

    About

    Furukawa Electric Group

    Business Strategies

    Value Creation by Furukawa Electric Group

    Strategies to Realize Value Creation

    Business Enhancement and Creation

    Strengthening Management Foundation

    Data

    
    
    

    Electronics & Automotive Systems

    Automotive Products & Batteries

    Teruyoshi Uchida

    Corporate Senior Vice President and General Manager of Automotive Products Division

    2025 Medium-term Plan Targets (Net sales/Operating profit, ROIC)

    Net sales/Operating profit

    ■ ■ Net sales (left) ■ ■ Operating profit (right)

    (billions yen) (billions yen)

    ROIC (FY2021 results → FY2025 forecast)

    Vertical axis: Net sales CAGR*2 15%

    (FY2017-2021 →

    500

    400

    300

    200

    100

    409.5 27.4

    409.5 27.6

    35FY2021-2025)

    345.0

    20.0

    Horizontal axis: ROIC*3

    28(FY2021 → FY2025)

    Bubble: NOPAT*4,5

    21 (FY2021 → FY2025)

    14

    7

    10%

    
    
    

    5%

    0%

    Business Environment Analysis

    0

    FY2024 results

    (announced May 13, 2025)

    FY2024 results*1

    (after segment reclassification)

    0

    FY2025 forecast

    (announced May 13, 2025)

    -5%

    0% 5% 10% 15% 20%

    Business environment

    Key revenue opportunities

    • New emerging demand associated with automobile evolution (xEV and V2X)

    • Spread of xEVs aimed at carbon neutrality,

      Strengths

    • Technological capability to create products that combine the Group's accumulated core technology and automobile technology

    • Eco-friendly product capability to support the

      *1 FY2024 figures were restated on May 13, 2025, due to changes in certain business segments and sub-segments, as well as partial changes in head office expenses allocated from FY2025.

      • The industrial laser business was transferred from the Infrastructure segment (Communications Solutions) to the Service and Developments, etc., segment.

      • Within the Infrastructure segment, the metal wire business was transferred from the Communications Solutions business to the Energy Infrastructure business.

        *2 CAGR: Compound annual growth rate

        *3 ROIC: Return on invested capital (after taxes)

        *4 NOPAT: Calculated as net income + interest expenses after taxes in accordance with IFRS

        *5 Negative values are displayed as white-filled bubbles.

        rising demand for environmental responsiveness, and growing momentum to promote a circular economy across the entire vehicle life cycle

        Major risks and threats

        • Growing geopolitical risks

        • Global disruptions in procurement and logistics networks

        • Sudden changes to customer production volumes

    spread of xEVs, including weight reduction through aluminum wire harnesses (Alpha Terminal) using green energy and contribution to power source management

    Challenges

• Create next-generation products that combine information, energy, and mobility through co-creation with partners

• Promote automation to strengthen BCM compliance and ensure a stable supply of high-quality products in response to local production and local consumption needs

  Priority Measures in the 2025 Medium-term Plan:

  Maximizing Profits in Existing Businesses with a Focus on Capital Efficiency

  Wire harnesses

  FY2024

  FY2025 (final year of the 2025 Medium-term Plan)

  Business environment
  Initiatives

  • Customer production plans stabilizing in general

  • Expansion of vehicle models equipped with aluminum wire harnesses

  • Develop and expand sales of products for the xEV market, including aluminum wire harnesses and high-voltage-compatible products

  • Establish an optimal production system to address customer needs and market changes

  • Customer production plans expected to be on par with previous year

  • Increasing demand for weight reduction and high-voltage systems to expand xEV adoption

    • Win greater orders for aluminum wire harnesses and develop and expand sales of high-voltage products

    • Continue building production systems capable of addressing geopolitical risks and market changes (e.g., multi-site production, shared production lines, automation)

    Ratio of vehicles equipped with aluminum wire harnesses among our orders

    50%

    60%

    
    
    

  • Increased demand for local production for local consumption amid growing geopolitical risks

2025 Medium-term Plan: Business Strategy

Basic policy

As decarbonization accelerates toward becoming carbon neutral, evolve the existing products and create new businesses in response to the requests for low environmental impact and safety, and contribute to power management, light weight, response to safety, and vehicle electrification.

Main strategies

Wire harnesses: Expand the application of aluminum wire harnesses leveraging the superiority and high reliability of the Alpha Terminal, and promote light weight

Steering roll connectors (SRCs): Develop solutions to support high-speed communications and vehicle evolution Lead battery state sensor (BSS): Improve fuel efficiency and power consumption, and secure power source reliability

Radar: Increase adoption of high-performance next-generation products (including response to cybersecurity)/ Enter the construction equipment, industrial vehicle, and traffic infrastructure markets

Sales of wire harnesses

From 70 models in FY2022 to

more than 100 models in FY2025

High-voltage products: Utilize the Company's technological strengths (processing technology and materials capabilities) for the increased use of high-voltage components following the changes to vehicle systems resulting from the shift to high-voltage/large current and EVs

FY2022

results

FY2023

results

FY2024

results

FY2025

forecast