May 10, 2016

2020 Mid-Term Business Plan

‒ “Change ourselves and bridge to the future! 2020 Mid-term” ‒

Theme of the 2020 Mid-term Business Plan for the Fujikura Group

Masahiko Ito, President & CEO

Fujikura Ltd.

Become a company that holds future promise

and will continue in the future

based on high earning power and the power

of strong “metabolism”

as a company that creates value for customers!

1

Table of Contents

1. Reflecting on the 2015 Mid-term

Business Plan

2. 2020 Mid-term Business Plan

3. Business Strategy by Segment

4. Policy on Shareholder Return

2

3

1. Reflecting on the 2015

Mid-term Business Plan

Net

Sales

Operating

Margin

Net

Sales

Operating

Margin

Power Systems 190.0 212.7

Telecommunication Systems 145.0 151.4

Power & Telecommunication Systems 335.0 5.4% 364.1 4.3%

Electronics Business*1 145.0 6.0% 161.2 7.5%

Automotive Products 110.0 5.5% 135.9 1.7%

Real Estate Business 10.0 50.0% 10.7 50.4%

Other 4.0 -25.0% - -

New Business Development Area - - 6.6 -44.2%

Total for Company 650.0 6.3% 678.5 4.8%

2015 Mid-term Plan FY2015 ResultsIn-house Company Names

(Units: Billions of yen, %)

671.9 5.3%Excluding new businesses not included in the 2015 Mid-term Plan

*1 After the damage incurred by the flood in Thailand, the only revision made to the Mid-term Plan was to Electronics. The initial plan was 190 billion yen, 6.8%.

Final fiscal year of the 2015 Mid-term Plan: Ratio of operating income to net sales, 80% achieved

4

(1) 2015 Mid-term Results

Restructure the business Set-up & conduct checks of locations in

Japan and overseas

Clarify business responsibilities

・Collaborate with Mitsubishi Cable Industries, Ltd., consolidate sales locations in Japan, and consolidate distribution locations in Japan・Introduce an in-house company system

High-profit company

5

Accelerate global development

Pave the way to the future & break into new markets Environment & energy

Cloud communication

Medical, nursing care, & healthcare

・Establish a new business promotion center・Commercialize the fiber laser

Expand infrastructure-related business overseas

Establish a global business promotion structure

・Launch the EPC business in Myanmar・Establish the company in Indonesia and

Brazil・Expand and strengthen the automotive

business Establish a tri-regional structure

Corporate R&D

(Fujikura research)

Strengthen unified group management and improve efficiency

Establish a foundation to support optimal management for the company as a whole

Promote efficiency through IT use

Establish the environment for global utilization of personnel

・Continuing to work on this

Power &

Telecommunication Systems

Company

Electronics

Business

Company

Automotive

Products

Company

Growth Strategy & Key Measures

1

3

2

Transit points on the way to becoming a high-profit company during the 2015 Mid-term Plan

Strategic Goals (Actual Results)

Net Sales: 650 billion yen 678.5 billion yen

Operating Margin: 6.3% or higher 4.8%

4

(2) Progress on Growth Strategy & Key Measures and Issues

6

2. 2020 Mid-term Business Plan

Changing Business Environment

The economic downturn in China is having a spill-over effect on the global economy

Spread of Free Trade Agreements and equalization of global economies

Sense of stagnation in Abenomics in Japan

Spread of evaluation of ESG (Environmental, Social, & Governance aspects of business) and the increasing impact on corporate value

Issues to Resolve

Further enhance earning power and achieve sound growth

Speed up new business creation by strengthening “metabolic” power

Improve responses to ESG issues

Prepare for a major disaster, BCP/BCM

7

(1) On Formulating the 2020 Mid-term Business Plan

The Fujikura Group will contribute to the creation of value for customers by using

"Tsunagu" (connecting) technologies.

• “Utmost importance on profitability” to ensure sound growth

Growth Strategy & Key Measures in the 2020 Mid-term Business Plan

Basic Policies on the

2020 Mid-term Business Plan“Change ourselves and bridge to the future! 2020 Mid-term”

• Build a company that creates value for customers by accelerating “metabolism”

• To secure sustainability, establish corporate governance

and enhance reputations of environment and social aspects.

• Management reform &business structural reform

• Speed up new business creation

• Open innovation• Developing deeper ties with

strategic customers

Corporate

Philosophy

(Mission)

2020 Mid-term Plan

Business Strategy Goals

8

Fujikura’s DNA: “Tsunagu” (connecting) technologies

(2) Policy on the 2020 Mid-term Business Plan

Developing deeper ties with strategic customers

Mine strategic customers, and－ work to achieve greater business growth

－ seize new business opportunities

Speed up new business creation

Strengthen the structure for promoting new business

Key areas－ Automotive-related

－ Industrial machinery

－ Medical devices

Open innovation Supply the missing pieces of portfolios and value chains and create new value

for customers.

Speed up technology development, business development, and business growth

Management reform &business structural

reform

Response to a Corporate Governance Code

Improve the quality and speed of decision-making in a diverse range of

businesses

Strengthen the management base

Become a company that holds future promise and will continue in the future based on high earning power and the power of strong “metabolism”

as a company that creates value for customers!

9

(3) Growth Strategy & Key Measures

• Net sales: 900 billion yen

• Ratio of operating income to net

sales: 7.0% or higher

• ROE: 10% or higher

• D/E ratio: 40:60 (0.66 times)

Goals to be achieved in FY2020

10

(4) 2020 Mid-term Business Strategy Goals

900.0810.0

690.0678.5

63.050.0

28.032.6

7.0%6.2%

4.1%4.8%

Operating IncomeNet SalesRatio of Operating Income to Net Sales

FY2020: Ratio of operating income to net sales 7.0% or higher;

Net sales 900 billion yen

Net Sales and Ratio of Operating Income to Net Sales

(Billions of yen)

million yen)

・・・・ ・・・・

11

(5) Management Goals: Net Sales and Ratio of Operating Income to Net Sales of

Consolidated companies

FY2015

Results

FY2016

Forecast

FY2018

Goal

FY2020

Goal

ROE (%) 5.4 7.1 9.0 or higher 10.0 or higher

Exchange rate (JPY/USD)

[Average rate]120.16 110.00 110.00 110.00

Copper base (market price, ¥Thousands/ton)

[Average during period]677 550 550 550

12

Implement a growth strategy that takes balance in the business portfolio into consideration

By Segment: Composition of Net Sales and Operating Income

FY2015 Results

(Final year of the 2015 Mid-term Plan) FY2020 GoalFY2016 Forecast

Net sales: 690.0 billion yen Net sales: 900.0 billion yen

Operating income: 28.0 billion yen

(Ratio of operating income to net sales: 4.1%)Operating income: 63.0 billion yen

(Ratio of operating income to net sales: 7%)

Net sales: 678.5 billion yen

Operating income: 32.6 billion yen

(Ratio of operating income to net sales: 4.8%)

Power &Telecommunication

Systems52%

Electronics Business26%

Real Estate2%

Power & Telecommunication

Systems53%

Electronics Business24%

AutomotiveProducts

20%

Real Estate2%

Other▲9%

Power &Telecommunication

Systems48%

Real Estate17%

AutomotiveProducts

7%

Electronics Business37%

Other1%

AutomotiveProducts

19%A

imin

g a

t th

e 2020 M

id-t

erm

P

lan

Other1%

Power &Telecommunication

Systems49%

Electronics Business29%

Real Estate1%

AutomotiveProducts

20%

Other1%

Other▲5%

Power &Telecommunication

Systems44%

Real Estate15%

AutomotiveProducts

14%

Electronics Business32%

Power &Telecommunication

Systems49%

Real Estate7%

AutomotiveProducts

15%

Electronics Business29%

Other0%

(5) Management Goals: By Segment

Exec

uti

on

of

the

Gro

wth

S

trate

gy

13

678.5

900.0

FY2015

Results

FY2020

Goal

Power &Telecommunication

Systems

+70.9

+44.1

Other

+2.7

Electronics Business

AutomotiveProducts+103.8

Net Sales

(Billions of yen)

vs. FY2015: +221.5

(5) 2020 Mid-term Business Plan: Factors Behind Changes in Net Sales

14

32.6

63.0

FY2015

Results

FY2020

Goal

Net increase inAutomotive

Products+15.0

+7.4

Net increase inElectronics

Business

+5.9

Net increase inPower &

TelecommunicationSystems

+2.0

New Business,

Other

Operating Income

vs. FY2015: +30.4

(5) 2020 Mid-term Business Plan: Factors Behind Changes in Operating Income

(Billions of yen)

15

Total cumulative capital investment during the 2020 Mid-term Business Plan: 200 billion yen invested in growth areas

Final Fiscal Year of the 2020 Mid-term Business Plan: Total Cumulative Capital Investment, Net Sales, and Operating Income by Segment

2020 Mid-term PlanTotal Cumulative

Capital Investment200 billion yen

73.0

64.0

31.0

15.017.0

Electronics Business32%

Automotive Products

16%

Real Estate

7%

Total Companyin Common

8%

Final Fiscal Year of the 2020 Mid-term PlanNet Sales & Operating Income

49% 49%

29% 29%

20% 15%

1% 7%1% 0%

Net Sales Operating Income

Power & Telcommunication Systems Electronics Business

Automotive Products Real Estate

Other

Power &Telecommunication

Systems37%

70.0

86.0

11.0

23.0

10.0

Electronics35%

Automotive Products

12%

Real Estate

5%

Total Company in Common

5% Power &Telecommunication

Systems43%

2020 Mid-term PlanTotal Cumulative

Depreciation200 billion yen

OtherOther

(5) 2020 Mid-term Business Plan: Capital Investment

16

3. Business Strategy by Segment

151.4 150.0

210.0

212.7 213.3

0

225.0

364.1 363.3

4.3% 3.4%

7.1%

Strengthen the EPC business

Enhance proposals of solutions

Maximize the benefits of integrating industrial cable and wire

Finish restructuring the metal cable business

Telecommunication Systems

Expand business to FTTx and data centers

- Launch products that differentiate the company on an ongoing basis

Maintain a firm hold on our top level global ranking in the optical fiber business

- Expand sales of high-performance fiber and improve productivity

Continuously introduce new models and improve the profitability of the fusion splicer business

Expand fiber laser sales

Power systems

Expand and grow business globally

Generate innovation

Complete restructuring

Net Sales

(Billions of yen)

Power systems

Telecommunication Systems

Ratio of Operating Income to Net Sales

FY2015Results

FY2016Forecast

FY2020Goal

17

435.0

(1) Power and Telecommunication Systems Company

97.2123.4

190.0

50.0

30.6

29.2

25.0

34.8

161.2

265.0

180.1

7.5%

5.0%

6.8%

OtherConnectors

FPCRatio of Operating Income to Net Sales

26.1

Manage with the main focus on “quality”

Achieve growth by staying closely connected to strategic customers(both existing and new)

Expand business aimed at automotive market

Deepen relationships with main customers

- Respond quickly and efficiently, and reinforce the structure

Expand the automotive FPC business

- Pursue automotive quality

Respond rapidly to technological innovations by customers

FPC

Reinforce response to business with main customers

- Automate and reduce labor to an absolute minimum

Expand business aimed at automotive market

Seek out industrial machinery/FA business

- FA, welding equipment, vehicles, overseas expansion

Connector

Net Sales

FY2015Results

FY2016Forecast

FY2020Goal

Use selection and concentration in product groups

Enhance development of composite products based on connectors

Other

18

(2) Electronics Business Company

(Billions of yen)

Automotive Products

Focus on main customers in expanding business

- Expand the number of new customers(in the process of jointly developing customers with multiple companies)

Strengthen the profit structure

- Move into lower cost areas (transfer production)

Improve monozukuri skills (improve quality and control labor costs)

- Pursue automation and IT use

Configure a structure for all of Fujikura

- Environmental response (EV-related products, etc.)High voltage, aluminum, etc.

- New technology aimed at achieving high functionality (automatic driving, etc.)Thin wiring modules, E-BOX, etc.

Net Sales

New Business Creation

Achieve solid growth based on the wire harness business

Generate new business aimed at the future of the automotive market

135.9131.4

180.0

1.7%2.9%

5.4%

Ratio of Operating Income to Net Sales

19

(3) Automotive Products Company

(Billions of yen)

FY2015Results

FY2016Forecast

FY2020Goal

Key measures in the 2020 Mid-term Business Plan

- Select & concentrate R&D themes

- Build a global research structure

- Pursue open innovation

- Develop human resources skilled in development from a commercially minded perspective

20

Strengthen the core technology base that supports “Tsunagu” (connecting) technologies and secure a competitive edge

Anticipate social changes and customer needs in the five business domains and accelerate metabolism of these through the generation of new businesses

Make use of global human resources

Key Measures

Invest 90 billion yen

in R&D expenditures over five years

Advance “tsunagu” technologies that will create the future of an environmentally friendly, information-based society:

2D/3D wiring & sensing

Automotive products

Optical telecommunication network components

Medical devicesFiber laser equipment

High-temperature superconductors

Three core technology bases and five business domains

FiberlasersImage

fibers

Medical & industrial equipment

Tel

eco

mm

un

ica

tio

n

Electronics

Energy

AutomotiveProducts

FPC

Optical fiber

Optical connectors

Optical fusion splicer

Optical fiber line components

Optical devices

Optical fibers

Optical Cables

Electroniccomponents

Membrane SW

Millimeter wave modules

Planarwiring

Optical

Heat pipes

Sensors

Connectors

Electronic wires

High-temperature superconductors

Automotivewire harnesses

Coaxial cable

Industrial wiring

Electrical wire & cable

Embedded PCB

(4) R&D

21

4. Policy on Shareholder Return

Take balance into consideration in distributing profits

Make key investments in growth businesses

(to achieve the next stage of growth)

Improve financial status (equity ratio, D/E ratio)

Be flexible about acquiring the company’s own shares

22

Increase earnings per share

Implement stable dividends

(1) Basic Policy on Profit Distribution

Base shareholder return on providing stable dividends on a consistent basis

Dividends per share

– FY2014: 7.0 yen per share (Actual)

– FY2015: 8.0 yen per share (Forecast)

– FY2016: 10.0 yen per share (Projection)

23

Dividend payout ratio of 20% or higher

(2) Shareholder Return

Please note:

This document is a compilation of Fujikura’s management policies (intentions) from FY2016 through FY2020. Projections for sales,

profits, and other factors in future fiscal years quantify the intentions of Fujikura in regard to investment and incorporate market

decisions based on the latest available data, including projections for FY2016. Future results may differ as a result of changes in the

business environment and other unforeseeable factors.