Industr y & Mobility Business Area
May 2023
Mitsubishi Electric Corporation

Contents
1.

Executive Summary

2.

Mobility

3.

P3

4.

Industry & Mobility BA
4-1. BA Synergy Strategies

P20

2-1. Execute Structural Reforms

P6

4-2. Corporate Synergy Strategy

P212-2. Direction of Each Business

P7

4-3. FY2026 Financial Targets

P22

2-3. Strengths of Automotive Equipment Business

P8

4-4. The Ideal Form

P23

2-4. Global production strategy

P92-5. Business Operation and Targets for FY2026

P10

Industry
3-1. Business StructureP123-2. Business Assets

P13

3-3. Market Environment and Growth Direction

P14

3-4. Portfolio Strategy

P15

3-5. Cash Flow

P16

3-6. Growth Strategy (1)P17

3-7. Growth Strategy (2)

P18
2

1

Executive Summar y3

E xe c u t i v e S u m m a r y
Aim to achieve revenues of ¥1.7 trillion and an operating profit margin of 14% or more in FY2026 through structural reforms of t he
Mobility business, promotion of growth strategies for the Industry business, and developing synergies across the Industry &Mobility Business Area.

Mobility (Automotive Equipment Business)

・The mobility industry is at a turning point due primarily to the shift to CASE, and increasing competition.
Promote structural reforms and business transformation through business spin off.
・Bolster resilient businesses by leveraging strengths, gain growth again through synergies with partners, andpromptly discontinuing of Businesses with Issues. Aim to achieve revenues of ¥0.7 trillion and an operating
profit margin of 5% or more in FY2026. Build up synergies within the combined Business Area (hereinafter“BA”) and contribute to corporate growth while leveraging the extensive manufacturing capabilities​.
Industry (FA Systems Business)
・Concentrate resources into Key Growth Businesses and new businesses
targeting ”Technological innovation” (digital and carbon neutral) and “Realizing next -generation manufacturing”
as the direction for future growth.
・Aiming for revenues of ¥1 trillion and operating profit margin of 20% or more in FY2026
by acquiring necessary technologies and resources to enable the growth strategies.
CASE：Connected, Autonomous, Shared & Service, Electrified (auto industry trends)

4

2

Mobility5M o b i l i t y ： E xe c u t e St r u c t u r a l Re f o r m s
The industrial structure is rapidly changing, as seen in the shift to CASE. By spinning off Automotive Equipment Business, achieve
structural reforms based on speedy business operation

Aim for regrowth by executing partnering strategy, increasing profitability with a focus on strong businesses, and business
transformation

１

２

３

4

CASE(xEV/ADAS)-related business:

Business leveraging strengths,
such as EPS (resilient business):

Businesses with Issues,
such as car multimedia:

Contribution

to corporate growth businesses:

Grow through synergies with partners

Focus on strengths to increase
profitability

Promptly discontinuing
for business transformation

Apply manufacturing capability andassets to growth areas
EPS：Electric Power Steering products, ADAS：Advanced Driver Assistance System

6

Mobility: Direction of Each Business
Clarify goals for each business and promote prompt structural reforms and business transformation

Portfolio strategy
CASE
Motor

Resilient
Businesses

Our goal*Only main products listed

InverterElectric Power
Steering products

High-definition
Locator

Car mechatronics

Businesses
with Issues
Car multimedia

Injector

Driver monitoring
systemAlternator

Starter

Leveraging power electronics technologies andsensing technologies, cooperate with partners
with potential synergies to achieve regrowth

Reduce costs and enhance efficiency toreallocate resources to high profitableprojects and models
Promptly discontinuing for business
transformation of less profitable businesses,
such as car multimedia

Build up synergies within BA and contribute to corporate growth,
leveraging “manufacturing capability” and “technologies/assets”
7M o b i l i t y : St r e n g t h s o f A u t o m o t i v e E q u i p m e n t B u s i n e s s
Focusing on strong businesses that we develop globally, promote cooperations with partners by leveraging our technological assets
to contribute to corporate performance

Global share
Inverter(since 2001)
10%

Electric Power
Steering products(since 1988)

Alternator(since 1963)

18%

15%

Driver monitoring
systems(since 2018)

EGR (Exhaust Gas
Recirculation) valve(since 1973)

Starter(since 1946)

Technological assets
Possess development and manufacturing capabilities and abundant patents.
24%

16%

14%

Power electronics technologies
Motor control (low loss driving control)
Small power module design(cooling technologies）

Automation and miniaturization technologies
High-speed automation, miniaturizing production
design, composite assemblySensing technologies
Biosensing and high-precision composite
positioning technologies

Processing technologies
Metal mold, iron core press, resin molding,cold forging

Motor technologies
High fill-factor coil winding motors

Production design, prototype evaluation
Processing machine, testing equipment,
trial production system and material analysis

Wireless communication technologies
Development of chip selecting middleware,compatibility with overseas certifications(Research by the Company, as of March 31, 2022)8M o b i l i t y : G l o ba l p r o d u c t i o n s t r a t e g yReallocate resources to high profitable projects and models and optimizing production yards and assets

Global network

Himeji & Sanda
Works

Sales Office(13 location)

Manufacturing Plant(11 location)

Technical Center(8 location)

Mother factories (Himeji Works and Sanda Works） ＋ Global network of 32 bases in 17 countries
Trim production yards at overseas sites to about 40% of current levels by 2027
• Diverting as a production and distribution base for company-wide overseas operations, with a focus on themass production businesses• Contributing to company-wide global growth by utilizing local human resources and accumulated know -how9M o b i l i t y : B u s i n e s s O p e r a t i o n a n d Ta r g e t s f o r F Y 2 0 2 6
Aim for regrowth of CASE business by cooperation with partners with potential synergies
Bolster earning power with well-defined operation of Resilient Businesses and phased termination/ withdrawal of businesses
with issues

Consolidated revenue (Automotive Equipment Business)

Direction of CASE cooperationxEV

Develop synergy from combining our strength, powerelectronics circuit design and motor control, with thegear/chassis matching technologies we lack

Revenue [¥ billion]
1,000

ADAS
Cooperate with partners with whom our proprietary patented
technologies, such as high-definition locators and driving
monitoring, can be utilized, to differentiate systems andenhance comprehensive capability for pitching proposals

Revenue¥700 bn＋

800

850.0

Main Activities

700＋

706.0

CASE

600

・Regrow throughcooperation with partners
・Phased promptly

Targets for FY2026
Overall

816.4

Businesses with
Issuesdiscontinuing of/ withdrawal

400

Extracting
Resilient Businesses

from less profitability business

400＋

200

Resilient
Businesses¥400 bn＋

・Reallocate resources tohigh profitable projects
and models

0Operating profit
margin5%+

8%+

FY2022

FY2023

FY2024FY202610

3

Industr y11

I n d u s t r y : B u s i n e s s St r u c t u r eContributing to manufacturing around the world through effective
businesses offering wide-ranging products, services and solutions
Business Group

ControlandDrive
Products

Product/Service

FA Control
Systems

Other
Control andDrive Products

Processing
Machines

Rotary Motors,
Power Distribution
Control Equipment

Europe
PLC

Servo

CNC

HMI

Inverter

Robot

Laser Processing
MachineRotary Motor

Electric Discharge
Machine

Laser
Processing
Machine for
CFRP 1

Americas

Asia
Metal 3D
Printer

20%

7%

2%

6%

FY2023 Revenue¥843.8 bn

Japan

41%

Power Distribution
Control Equipment

Circular
Digital-Engineering

China
Consulting

India

Software24%

Remote Services*1: Laser processing machine for Carbon, Fiber, Reinforced and Plastics

12

Industr y: Business Assets
The business assets we have accumulated over 100 years of operation are our strength

Technology Assets

Sales & Service Assets

Partner Assets

Customer Assets
PLC

1,080
Smart factories
Real-time control,

companies

390

Motor technologies,
Power electronics technologies

Edge area

companies

4,194
Industrial network

High value-added automation
technologies focused on control
and drives

companies

Sales and service network covering

Partner ecosystems to help meetover 90 countries around the world

the needs of diverse customers

Number of units
in operation

12 million units
Servo

CNC

15 million units
1.1 million units
Number of Installation

50,000 cases
4,200 licenses
Connection with customers cultivatedthrough long term relationships andnumber of units in operation※ As of March 2023

13

Industr y: Market Environment and Growth Direction
Creating comprehensive value by fusing “core components” with “digital technologies” to continue to achieve sustainablegrowth.

Market Environment
Continuous technological innovation

Growth DirectionMore advanced manufacturing technology

Strengthening key growth businesses that drive the function andperformance of manufacturing equipment and production lines

Digital-related

Carbon neutral

High-speed, High-accuracy, Miniaturizationindustries

related industries

and Multifunction

Deepening issues faced by the manufacturing industry

Digital innovation

PLC

Servo

CNC

Realization of next-generation manufacturing
by using digital technologies

Shortage of labor force and skilled workers,

Cloud, Digital twin, AI

Improvement of productivity and quality, andPersisting uncertainty

14

I n d u s t r y : Po r t f o l i o St r a t e g y
Accelerate growth by assigning resources commensurate with business needs and by optimizing the portfolio
Revenue [¥ billion]

FY2023Business

Operating
Profit Margin

Revenue

387

20%+

420+

Operating
Profit Margin

PLC

Key GrowthBusinesses

Servo

HMI

RotaryMotor

New Processing
MachineBusinesses
Other
Businesses
Power Distribution
Control Equipment

Total

Revenue

Operating
Profit Margin

500+

25%+

235+

20%+

193

15%+

205+

15%+

65

5%+

70+

5%+

90+

5%+

225

5%+

235+

5%+

150+

8%+

843.8

16.9%

890

16.1%

1,000

20%+

Inverter

Circular DigitalEngineering
Robot

20%+

BusinessResources

CNC
Processing
MachineResilient
Businesses
Potential andNewBusinesses

FY2024

Revenue

FY2026 Target

PolicyContinuous investment ingrowth to expand businessfurther and maximize operating
cash flow

Strengthen businesscompetitiveness and generate
stable free cash flow by efficientinvestment

Establish a business model byconcentrating investment into
Circular Digital-Engineering

Establishing profitability
exceeding capital cost andreviewing business portfolio

15

Industr y: Cash Flow
Management principles:“Management to achieve business growth by investment” and “Management focused on capital efficiency”
based on a business portfolio that maximizes cash flow over the medium- to long-term.
FY2022-FY2026

Growth Investment ¥423 bn (+74％)

R&D￥178 bn (+25％)

Production Facility

Figures in parenthesis arecomparisons of FY2017 - FY2021.

M&A￥60 bn (+300％)￥185 bn (+115％)

R&D• Strengthen core technologies and components• Utilize the resources and technologies of theAutomotive Equipment Business

Production Facility

Cash flows from

• New factory in Owari-asahi, Aichi (FY2026)

operating• New factory in Pune, India （FY2024）

activities• Expansion of existing production facilities in
China

Cash flows from

M&A

investingactivities

FY2007-FY2011

FY2012-FY2016

FY2017-FY2021

FY2022-FY2026• Strengthen core components• Investment in MOVENSYS (March, 2023)• Strengthen digital technologies and human resources

Portfolio
Management

Focus onC/F and ROIC
Improving Management Efficiency

B/S
Management• Investment in Clearpath Robotics (April, 2023)

16

I n d u s t r y : G r o w t h St r a t e g y ( 1 ) E n h a n c e K e y G r o w t h B u s i n e s s e s
Maximize the value proposition for globally growing industries, such as digital and carbon neutral -related industries.

Key Growth Businesses, Target for FY2026
Revenue [¥ bn]

Profit Margin

500

25%

400

24%

300

23%
Previous target ※

200

100

0

22%

21%

20%

FY2022

FY2023

FY2024FY2026

Core Components for Key Growth Businesses
Revenue￥500 bn+•

Develop next-generation products with cutting-edge functions,performance and scalability by strengthening core technologies.

•

Utilize M&A and strategic investments to gap-fill missing parts.
ex. March 2023 investment in MOVENSYS (South Korea)(Strengthen motion software for servo business)

CAGR (FY2022→FY2026)

8.8%+

Global Collaborative Engineering Centers

Operating profit margin•

25%+※Planned in November 2021

Focus Industries

Establish application development functions outside of Japan to meet
diverse customer needs.
•

April 2022 ： China•

April 2023 ： Europe and India•

After FY2024 ： North America

Stable Global Supply Infrastructure•
Semiconductor

EV

Battery

Radically strengthening production capacity
New Factory in Owari-asahi, Aichi : Servo motor production will start in FY2026.

EMS

New Factory in Pune, India : Inverter production will start in FY2024 and
PLC production will start in FY2026.

Display

Logistics

Food andBeverage

Data Center•

Accelerating localization of production in preparation for risk mitigation ex.
geopolitical and natural disaster17

Industr y: Growth Strategy (2) Establish a Circular Digital -Engineering Business Model
Expand value proposition to customers through services that fuse abundant business assets with manufacturing data.

・ Front loading
Value
proposition to ・ Increasing efficiency and shortening design anddevelopment leadtime
customers
・ Early launch of facilities

Operation and Maintenance

Manufacturing

Design and Development of Manufacturing Systems

・ 24-hour stable operation
・ Shortening cycle time・ Manufacturing not dependent on workers and know-how

・ Remote monitoring, diagnosis and maintenance・ Asset management
・ Maximizing renewal ROI

Services that utilize data
Software/Data

Digitalspace

Manufacturing data
Digital twin

Monitoring

Data collection and analysis

AI

Security

Energy management

Core components

OT
PLC

Technology assets

Realtime control
technology

Customer assets

Number of
installations

Partner assets

Servo

CNC
Power electronics
technology

e-F@ctory:
50,000 cases

Industrial PC

HMI

Motor
technology

Robot

Manufacturing
technology

Number ofunits in operation
e-F@ctory partners : 1,080 companies

Inverter

PLC: 12 million units
Servo: 15 million units
CNC： 1.1 million units

Edgecross partners : 390 companies

SensorMaisart(AI)

Laser Processing
MachineElectric Discharge
MachineClariSense(IoT suite)
Customer
contact

Rotary Motor

Power Distribution
Control Equipment

Communication
technology (5G utilization)

Registered members
on FA Web site
930,000 members

CC-Link partners : 4,194 companies

18

4

Industr y & Mobility BA

19

I n d u s t r y & M o b i l i t y B A ： B A Sy n e r g y St r a t e g i e s
Utilize human resources and technology assets from Mobility’s Automotive Equipment Business to strengthen Industry’s core FA
components. Further strengthen the manufacturing capability for automotive equipment and apply that knowledge to resolving
customer issues.
1. Utilize the Business Assets of theAutomotive Equipment BusinessControl, software and circuit technologies
from the car multimedia business
Abundant engineers with middleware and microcomputer application control know-how

High-speed automated mass production technology
and advanced compact design know-how
Industry-leading Technology & Capability :Motor Design, Testing & Evaluation and Material analysis

4. Develop the Solution Proposal Capabilityof FA systems Businesses

Broaden solution proposal capabilityof FA Systems business
Leverage the Automotive Equipment Business'
production site know-how to solve the diverse
manufacturing issues of customers

2. Strengthening Core Components
of FA Systems Businesses

Developing next generation controllers
Enhancing device connectivity, openness and realtime control.

Expanding the product line-up andglobal manufacturing capability
Strengthening capabilities to meet diverse customer
needs and shorten delivery lead-times.

3． Realize Next-generation Manufacturing for theAutomotive Equipment Business

Introducing cutting-edge FA technology to strengthen
manufacturing

Bolstering earning power of Resilient Businesses by increasing productivity

20

I n d u s t r y & M o b i l i t y B A : C o r p o r a t e Sy n e r g y St r a t e g yProvide one-stop solutions that securely manage OT assets by leveraging our strengths and incorporating technologies fromthird party security specialists.
Customers’ Issues
・ Interested in introducing IoT and DX at sites but concerned about security
・ Already implemented IT security measures but insufficient, and unfamiliar

IT networkwith OT security

Our Solutions

OT network

Provide a one-stop solution spanning from risk assessment to the introduction of
security equipment, its operation and maintenance◆ Combining OT and IT data to strengthen monitoring/analysis for automaticmanagement of OT assets.
◆ Enhancing security measures without having to stop production.
Our strengths- OT risk assessment technology- Secure control equipment, OT
network monitoring and protection
technologies- 24/365 security monitoring services
proven in the IT environment

Security specialists knowledge- Firewall- Remote access

RemoteEWS

D/B

OT network

PLC/DCSSCADA

Server

HMI

maintenance

OT network

PLC/DCS
IOT

G/W

21

I n d u s t r y & M o b i l i t y B A : F Y 2 0 2 6 F i n a n c i a l Ta r g e t s
Targeting to achieve revenues of ¥1.7trillion and an operating profit margin of 14% or more in FY2026, with structural reformsof Mobility (Automotive Equipment Business) and by initiating growth strategies in Industry (FA Systems Business) anddeveloping synergetic strategies across both Industry & Mobility Business Area.

Operating Profit [¥ bn]

Revenue [¥ bn]

250

2,000

225

Mobility

1,800
200
1,600

175

1,400

Mobility

1,200

150
125

Industry

100

1,000

75

800

50
600

Industry

400

25

0

200

-25

0

-50
FY2022

FY2023

FY2024FY2026FY2022

FY2023

FY2024FY202622

The Ideal Form

Mobility

Industry
Contribute totechnologicalinnovation

Realizenext-generation
manufacturing

Solve labor
shortages andskills loss

Contributeto carbon neutral

Providecomfortablemobility
opportunities

Eliminate
traffic
accidents

Support future manufacturing and comfortable mobility with our core components and digital technologies
Strengthen value proposition of core components to
globally growing industries

Growth and expansion with partners who are
expected to create synergies in the CASE area

Establish a
Circular Digital-Engineering business model

Review the business portfolio
to focus on areas with strengths that
address changes in the business environment

Real-time control

Power electronics
technologies

Motor technologies

High fill-factor coil

Monitoring

winding technology

technologies

23