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Long-Term Strategic Framework

• The company divided its 2021-2050 growth plan into three phases: the completed 2021-2024 "HOP period", the 2025-2029 "STEP period" leading to the 110th anniversary of founding, and a final "JUMP period" leading to 2050 carbon neutrality goals. The STEP period has two core priorities: scaling capacity to reliably handle 100.0 billion yen in annual revenue, and growing the higher-margin service business from the large installed base of new pumps sold in the HOP period.
• Final STEP period (FY2029) targets: 100.0 billion yen in revenue, 10.0 billion yen in operating profit (10% operating margin), and 10% return on equity (ROE).

Manufacturing Capacity and Productivity Improvements

• Frontloading Process Overhaul: Rapid order growth created bottlenecks: design capacity cannot keep up with increased order volume, and miscommunication between sales and design causes repeated rework that delays schedules, forcing costly overtime and outsourcing. The company has shifted design engineers to frontline sales teams (public, private, and export segments) to finalize customer specifications directly at the sales stage, eliminating inefficient back-and-forth communication. Google Gemini AI is being deployed to support frontline specification locking, to speed up decision-making and create schedule buffer for procurement and production. The goal is to eliminate rework, reduce overall workflow load, and enable the existing organization to handle 100.0 billion yen in annual revenue efficiently.
• Capacity Expansion Initiatives: A new machining plant is under construction adjacent to the company's existing India facility to expand in-house group machining capacity, leveraging India's strong government support for manufacturing and accessible skilled talent. Kyushu Torishima, the company's standard pump production subsidiary, is expanding to independently design and produce boiler feed pumps (previously produced at headquarters) for high-share segments including waste incineration and biomass energy. The company plans to complete several small M&As of existing external machining suppliers that already do work for Torishima, to bring outsourced capacity in-house and capture additional margin.

Service Business Expansion

• New high-tech pump revenue grew from 13.2 billion yen in FY2020 to 35-36 billion yen in FY2024, creating a large installed base for future service growth. The STEP period target is to grow service revenue from 25.0 billion yen to 35.0 billion yen, making up 35% of total 100.0 billion yen revenue and boosting overall profitability. New service facilities are being deployed across high-growth regions: a new service factory in Egypt (first North African base) will launch in 2025; the existing Saudi Arabia service facility is being relocated and expanded to full operation in 2025; new leased service facilities in Qatar and Abu Dhabi are already operational. The company is also expanding service capabilities to support growing order flow in the US and Southeast Asia.

ESG and Product Innovation Alignment

• The company's core materiality priorities align with global sustainability challenges: 1) Energy conservation via Super Eco Pumps (recently awarded the Japanese Minister of Economy, Trade and Industry Prize, the top honor of the national Energy Conservation Grand Prize); 2) Next-generation energy pumps including ammonia pumps (completed successful liquid trial operations in Indonesia) and upcoming hydrogen pump commercialization; 3) Pump solutions for water and food scarcity (over 2,200 desalination pumps ordered in the last decade, with rapidly growing demand expected for both municipal and industrial water supply for hydrogen/ammonia production); 4) Disaster reduction pumps for climate change-fueled extreme rainfall; 5) Data-driven smart solutions: over 20,000 connected installed pumps now support a new paid subscription service launching in FY2025, and 3D printing is being adopted for production, with AI used to shorten R&D timelines.

Shareholder Return

• FY2024 full-year dividend is maintained as planned at 60 yen per share. FY2025 planned dividend is increased to 62 yen per share, maintaining target payout of 35% and 3% dividend yield on equity (DOE). A 1.0 billion yen share repurchase program (representing 2.25% of total outstanding shares) was announced, with repurchased shares to be retired.

• FY2025 consolidated guidance calls for 89.0 billion yen in total revenue, 6.7 billion yen in operating profit (7.5% operating margin), representing a recovery to operating profit levels seen two years prior. Gross margin is not expected to see large improvement as operational changes are still in the early phase, but selling, general and administrative (SG&A) expenses are expected to fall by roughly 1.0 billion yen, driven by lower sales commissions and logistics costs, partially offset by growing personnel expenses. Frontloading and AI adoption are also expected to allow limited headcount growth to support higher revenue.
• Parent segment guidance projects both revenue and profit growth, with improving margin driving the profit increase. Subsidiary segment guidance projects flattish to slightly growing revenue of 33.9 billion yen and operating profit of 3.3 billion yen, accounting for expected slowdown in China, with service business remaining a core growth driver.

1. Parent (Torishima Seisakusho) Segment: Revenue missed the revised 68.0 billion yen plan by 3.8 billion yen, driven by 2.0 billion yen in delayed public sector projects and 2.0 billion yen in delayed export shipments due to third-party causes. Gross margin fell 1.4 percentage points full-year, but recovered to 22.1% in H2 2024 (near the original planned 22.5%), following a 7+ percentage point drop in H1. The segment reported a large full-year decline in profit after failing to recoup H1 losses. 2. Subsidiary Segment: Subsidiaries (led by service businesses, with additional high-tech pump and project operations) achieved revenue growth and profit growth, beating planned results slightly across all business lines. Full-year consolidated operating profit was 5.4 billion yen, down year-over-year and below plan. Orders and revenue hit all-time records, with ending order backlog exceeding 100 billion yen for the first time at 115.4 billion yen. Between FY2021 and FY2024 (the prior HOP planning period), consolidated revenue grew 1.6x from 52.2 billion yen to 86.5 billion yen.

• Rapid order growth over the HOP period created "growing pains": design bottlenecks, workflow misalignment, and delayed schedules forced costly reliance on overtime and unplanned outsourcing, which reduced profitability in FY2024. Failure to successfully implement operational reforms during the STEP period could continue to suppress margins and prevent the company from achieving its 10% target operating margin.
• Public sector revenue can be delayed by third-party issues including labor shortages, construction delays, and project changes, while export revenue can be delayed by customer-side shipping and logistics disruptions, as seen in FY2024's 3.8 billion yen revenue shortfall from these causes. These delays create revenue volatility that can impact short-term performance.
• Global economic slowdown (including the expected slowdown in China) and trade policy changes (such as US tariffs) pose downside risks to subsidiary and international growth in FY2025 and beyond.

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