Management Capital Enhancements and Strengths

We strive to bolster our business foundation through effective use of various forms of capital cultivated since our founding.

	Financial Capital	Human Capital	Manufacturing Capital	Technology and Intellectual Capital
Features	In keeping with our new management policy to achieve an ROE greater than 10% as quickly as possible, we will reduce shareholders’ equity and increase corporate value by expanding shareholder returns backed by our capital holdings and robust cash flow generation capabilities while maintaining financial soundness.	With over 50% of our sales revenue coming from outside of Japan, we have implemented a number of training programs to develop global talent. At the same time, we are concentrating on the development of digital talent that will be indispensable for our transformation into a manufacturing and innovative services company.	Increasing customer satisfaction is the number-one priority for our production divisions. As we strive for this with the high-quality products we produce, we continue to build upon our production structures in areas where demand exists so that we can quickly respond to the needs of customers around the world.	We provide individually optimized products by combining our extensive foundational platform with our expertise and experience in achieving smooth, high-precision linear motion in the rolling guide components of machines.
Supporting data (2025 results)	Equity capital ratio: 55.3% Operating cash flow: ¥42.7 billion Current cash: ¥110.0 billion	Participants in the international trainee system: 2 English lesson participants: 70 Management training program participants: 15	Capital investments: ¥15.4 billion Production facilities: 23 (10 in Japan, 1 in the Americas, 2 in Europe, 4 in China, and 6 in Asia and other regions)	R&D expenses: ¥5.7 billion Intellectual property holdings: Registered: 2,400, Published: 504 R&D facilities: 2 (1 in Japan and 1 in China)
Challenges to overcome	ROE stagnation (-21.7% in 2025) Promotion of management that emphasizes profitability and capital efficiency Continuing to provide appropriate shareholder returns consistent with appropriate levels of shareholders’ equity	Empowering women and promoting diversity throughout the company Developing the next generation of management Implementation of diverse working styles Maintenance and promotion of employee health	Increasing productivity per person Workforce development (DX, operation of robots and automated equipment, and application of technical knowledge to production)	Price competition with similar products in emerging countries
Responses to these challenges (measures being taken)	Structural reform of the industrial machinery business Implementation of an 8% dividend on equity ratio (DOE) (until an ROE greater than 10% is achieved) ¥40 billion purchase of treasury stocks (from December 2024 to March 2025)	Diversity training throughout the company Expansion of training to develop the next generation of management Initiatives for health management	Establishing a 24-hour production structure through the installation of automated equipment Data utilization training and on-the-job training	Further cultivating our core technology of rolling machine components and developing new products Developing FA and IoT solutions based on our extensive data
Related material issues	Strengthening of a sustainable value creation platform	Realization of a diverse and meaningful work environment	Decarbonization and realization of a recycling-oriented society	Creating an affluent society and solving social issues through innovation

*The 2025 R&D expenses, capital investments, and number of production facilities do not include the automotive and transportation business.