Notice Regarding Revision of Medium- to Long-Term Management Targets and Medium-Term Management Plan

Background and Basic Policy of Revising the Medium- to Long-Term Management Policy

SEC Carbon Ltd., considering significant changes in its business environment, abolished its medium- to long-term management vision and medium-term management targets dated May 12, 2023, and newly formulated the medium- to long-term management policy '2030 Make Real' through 2030. The background for this revision includes greater-than-expected fluctuations in demand trends and market conditions, a decline in the effectiveness of the existing medium-term management plan, continued price-to-book ratio below 1, and stagnation of capital efficiency. It was determined necessary to promote growth strategy, capital policy, and strengthening of management foundations as an integrated approach. The basic policy consists of three pillars: 1) strengthening growth strategy; 2) promoting capital policy (aiming for 12% ROE by the fiscal year ending March 2031); and 3) reinforcing management foundation.

Specific Details of Growth Strategy and Capital Policy

The growth strategy includes expanding special carbon products and fine powders, as well as investing in new growth fields such as semiconductor materials and CO2 resource recycling technologies. The capital policy aims to achieve 12% ROE by the fiscal year ending March 2031 by reducing policy-held shares, conducting treasury stock acquisition totaling 7 billion yen over three years, and promoting shareholder returns based on the higher of a full-year dividend of 100 yen or a dividend payout ratio of 30%. Strengthening the management foundation involves enhancing governance and IT infrastructure, and increasing the ratio of outside directors.