Medium-Term Management Plan

New Medium-Term Management Plan

Walk the Talk 2028 Top Message

Over the past five years, we have worked to build a resilient management foundation capable of responding to rapid changes in the external environment by strengthening the earnings base and improving management speed and efficiency.

As a result, we have transformed ourselves into an organization capable of delivering results and have achieved our KGIs. We are deeply grateful for the understanding and support of all our stakeholders.

In launching the New Medium-Term Management Plan this fiscal year, we have realistically recognized that changes in the external environment will become even more intense. To enable timely scenario reviews, agile decision-making, and disciplined execution, we have revised the planning period from the previous five years to two consecutive three-year cycles.

The new plan is positioned as "Building the Foundation for Exponential Growth", with the aim of achieving a market capitalization of JPY 1 trillion at the earliest opportunity. We are fully aware that we are still far from that level today. Over these three years, we aim to close this gap by scaling our business, strengthening our resilience, and above all, developing the human capital that will drive our growth.

To achieve this goal, we will improve capital efficiency and enhance the earnings structure of our existing businesses. At the same time, we will fully leverage our three core functions

- trading, manufacturing, and R&D - to create high added value across the entire value chain in a way that only NAGASE can deliver.

People are the source of all execution capabilities at NAGASE. We position people as our most critical management capital, and by strengthening individual capabilities and harnessing them collectively, we will break through the limits of our organization.

By working together across the Group to execute this plan and fully leveraging our strengths, we will achieve sustainable growth and enhance corporate value.

NAGASE & CO., LTD.

Representative Director and President

１． Review of the Previous Medium-Term Management Plan ACE 2.0

２． Medium-Term Management Plan "Walk the Talk 2028"

Under ACE 2.0, we set an overarching goal to transform our earnings structure and corporate culture, and to advance our "pursuit of quality" through building a strong earnings foundation and fostering a growth-oriented mindset.

Reform of Profit Structure

❶ Pursuit of profitability and efficiency

• Execute company-wide business portfolio

restructuring and resource reallocation

❷ Strengthen existing businesses

• Expand business opportunities through globalization

• Improve productivity of manufacturing businesses and expand value-added through technical innovation

Create sustainable businesses

Reform of Corporate Culture

❶ Pursuit of economic and social value

• Fostering a sustainability mindset, and rigorous monitoring of financial and nonfinancial indicators

  ❷ Pursuit of efficiency

• Deepen awareness of capital efficiency

• Improve productivity of core operations

Strengthen human capital to drive

reforms

Through return-focused management and accelerated decision-making, we implemented various initiatives

to transform into a lean and resilient organization.

As a result, we achieved both KGIs: a sustainable operating profit of JPY 35 billion and an ROE of 8.0% or higher.

550

500

450

400

350

300

250

200

150

KGI ROE8.0%

KGI

Operating profit JPY 35 billion

5.9

7.7

352

6.6

5.9

333

306

6.4

390

8.0

9

8

7

6

5

4

3

2

1

0

447

219

FY2020 FY2021 FY2022 FY2023 FY2024 FY2025

Operating Profit (JPY 100 million) ROE(%)

Operating profit（KGI） ROE（KGI）

We achieved the non-financial targets under our sustainability initiatives. We also established and monitored three financial KPIs to promote return-focused management, resulting in stronger profitability.

• Non-Financial Targets

  Project	FY2025 Targets	FY2025 Results
  Carbon Neutrality	Reduction of Scope 1 and 2 emissions by 37% or more compared with FY2013	Achieved （49.2％）
  Employee Engagement	(Standalone) Engagement survey score: 60 over	Achieved （61.7）
  	(Group) Employee Engagement Survey implementation rate: 100%	Achieved （100％）

• KPI

We shifted our business portfolio from a business-based to a function-based structure, allocating resources to our manufacturing functions (Semiconductor, Food, and Life Science) while restructuring and exiting unprofitable businesses. Through return-focused management, we enhanced profitability and reorganized group companies to reinforce our existing businesses.

Reform of Profit Structure

❶ Pursuit of profitability and efficiency

• Strengthened manufacturing capabilities in Semiconductor, Food, and Life Science

• Acquired Asahi Kasei Pharma's Diagnostics Business, Sachem's Asia Business and Aplinova (Brazilian food ingredient distributor)

• Exited unprofitable businesses, including the North American Color former business and resin compounding business

  ❷ Strengthen existing businesses

• Reorganized group companies in the chemical and bio-related fields

• Improved gross profit margins through return-focused management

  Create sustainable businesses

• Introduced the concept of "Uniqueness" to drive business creation by leveraging the integrated strengths of manufacturing, trading, and R&D capabilities.

Progress in the "Focus Domain"

We actively invested capital in the semiconductor, food, and life sciences areas. We strengthened the Group's manufacturing capabilities and worked to build an earnings base with a clear focus on capital efficiency.

• Focus

• Foundation

  Semiconductor

  【Gross profit of the Focus Domain】

  Food

  491

  Unit: JPY 100 million

  Life Sciences

  424

  235

  3７５

  186

  150

  238

  256

  150

  336

  380

  334

  190

  202

  175

  159

  178

  176

  244 250

  207

  81

  75

  70

  137

  163

  175

  FY2024 Result FY2025 Result FY2026 Forecast

  ・Expanded advanced semiconductor encapsulation materials

  ・Acquired Sachem's Asian business and

  established Nagase Circrea

  ・Launched photoresist developer recycling business

  ・Initiated a procurement coordination business for Rapidus Corporation

  FY2024 Result FY2025 Result FY2026 Forecast

  ・Improved the Prinova Group's

  Nutrition business

  ・Acquired of Aplinova (Brazil)

  FY2024 Result FY2025 Result FY2026 Forecast

  • Acquired Asahi Kasei Pharma's diagnostic enzyme business and established Nagase Diagnostics

  • Strengthened biotechnology R&D capabilities (AI and robotics)

Progress in the "Improve Domain"

We identified target areas and developed and executed improvement plans.

We also reduced losses by exiting businesses and transactions with limited improvement potential and returning commercial rights where appropriate.

Areas for Improvement

Actions taken

【Operating Loss, Equity-Method Losses, Impairment Loss, and Unprofitable Transactions at Subsidiaries】

Unit: JPY million

FY2021 FY2022 FY2023 FY2024 FY2025

△ 135

Losses incurred from the withdrawal

from the thin glass substrate processing business in China

△ 2,048

△ 2,726

Impairment of fixed assets

Loss on valuation of securities

Other

Approx. JPY 9.0 billion loss

Approx. JPY 8.0 billion loss

Approx. JPY 5.0 billion loss

Approx. JPY 5.5 billion loss

Approx. JPY 5.0 billion loss

The Message Embedded in

"Walk the Talk 2028"

What we aim to achieve over the next three years is to bring to fruition the growth strategies

we have pursued under ACE 2.0, while also sowing the seeds for our next stage of growth.

Reflecting our commitment to executing these two priorities, we have named

our new Medium-Term Management Plan

"Walk the Talk 2028".

NAGASE - Contributing to the well-being of people and the planet by solving challenges faced by

our customers and society through materials

Amid a highly uncertain external environment, we will position sustainability at the core of our growth strategy, reｓｔｒｕｃｔｕｒｅ our business portfolio based on materiality, and strive to realize NAGASE's Ideal State

Realization of NAGASE's Ideal State

Ｌａｕｎｃｈ and ｄｒｉｖｅ businesses that address our materiality

Materiality to be addressed

Surrounding societal issues

※In September 2024, we partially revised our materiality, in light of changes in the external environment.

Positioning of the Medium-Term Management Plan

NAGASE's

Ideal State

Exponential Growth

Under ACE 2.0, we have set "pursuit of quality" as our guiding principle, strengthening our

Early achievement of JPY 1 trillion

market capitalization

foundation for transformation and reinforcing

our corporate structure, while shifting toward

Targets

Operating profit: JPY 50.0 billion+

ROE: 9.0%＋

management with a stronger focus on shareholders.

Building the foundation for exponential growth

• Realization of growth strategies

• Build new business pillars for future growth

  ACE 2.0

• Build resilience to withstand transformation

  Results

  Operating profit: JPY 44.7 billion

  ROE: 8.0%

  Building on the foundation established under ACE 2.0, Walk the Talk 2028 marks a phase transition from "structural reform" to "accelerating growth".

  Pursuit of Quality

  • Laid the foundation for transformation

  • Transformed into a lean and resilient organization

  • Shareholder-oriented management

    We will steadily bring our existing growth strategies to fruition, concentrate management resources on creating the next growth driver, and strengthen our resilience and human capital to withstand changes - all with the aim of achieving a market

    capitalization of JPY 1 trillion at the earliest opportunity.

    
    
    

    Three Core Policies of the Medium-Term Management Plan

    With an eye toward evolving into a company worthy of a JPY 1 trillion market capitalization within three years, we will advance three core policies: scaling our business, building resilience, and strengthening the human capital that drives our growth.

    Execution of Growth Strategies

We will reorganize from five to three segments to clarify our business portfolio. This will enable us to fast-track capital allocation to growth areas, reinforce ROIC-based management, and drive a shift toward a more capital-efficient earnings structure

Life & Healthcare Products

Life Sciences

Business Strategy by Segment

We will appoint segment heads for each segment and delegate responsibility and authority to accelerate decision-making, while driving growth through strategies tailored to diverse business environments

FY2028

EBITDA

JPY 23.5 billion Operating profit JPY 2２.０ billion

EBITDA

JPY 21.6 billion Operating profit JPY 17.0 billion

EBITDA

Operating profit

JPY 20.0 billion JPY 1１.０ billion

Ensuring Monetization of ACE 2.0 Growth Strategies

We will steadily execute the growth investments and initiatives planned under

ACE 2.0 while maximizing investment returns to achieve sustained enhancement of corporate value

research facility 17

Creating Uniqueness through One NAGASE

Antioxidant amino acids

Low-glycation technology

Bio-response sensors

Next-generation cooling technology

Biodegradable

SAP

Bio-stimulants

By fully leveraging NAGASE's three functions - trading, manufacturing, and R&D - we will create "Uniqueness": a business model that only NAGASE can offer, delivering high added value across the entire value chain, and evolving it into a key driver of future growth

× ×

Case Study of "Uniqueness"

Case Study 1

Resource Circulation (Disposable Diaper Recycling)

Case Study 2

Extending Healthy Life Expectancy (Sugar Reduction)

Sales Target : JPY 50 billion ～ Sales Target : JPY 45 billion ～

Separation and purification

Separation and purification

Used diapers

Pulp

SAF

Separation and purification

Recycled

diapers

Production

Recycled pulp

Execution of Growth Strategies

Quantitative Roadmap to Exponential Growth

We will prioritize capital allocation to the highly profitable Electronics and Life Sciences segments to achieve a more balanced earnings structure.

In parallel, we will create "Uniqueness" and work to close the gap toward a market capitalization of JPY 1 trillion by growing earnings and improving ROE.

Unit: JPY 100 million

Gross Profit Trends

2,296

1,876

1,146

60%

63%

55%

FY2032

FY2020 FY2025 FY2028 Exponential Growth

ROE 5.9％

ROE 8.0％ ROE 9.0％ ROE 10.0％～