Investors’ Guide FY2021
Year ended March 31, 2022

Japanese GAAP

Leadership in Total Motion Control
Feb 08, 2023

Primary Objectives
HDSI focuses our expertise and management resources on “Total Motion Control”,
developing and producing Precision Control Equipment and Components for a broad range of applications.
HDSI aims to become a world industry leader, as a highly skilled precision engineering expert with pioneering spirit.
HDSI will strengthen our management processes and our flexibility to become a winner in the dynamic business environment.

Schematic Concept of Total Motion Control

Sensors

Speed
Reducers

Controllers

OthersMotorsDrivers１

Management Philosophy
HDSＩ conducts management based on the following management philosophy.
1.Respect for the Individual
HDSＩ aspires to be a company where the rights of every individual employee are respected, and where individuals can pursue a meaningful,cultural, and worthwhile life.
We will make HDSＩ a company that believes in each employee’s aspirations, supports independent activities, creates an environment where
employees can maximize their abilities through work, and where abilities and performance are rewarded.
2.A Meaningful Company
HDSＩ wants to be recognized as a meaningful, superior company which manifests creativity, has personality and distinctive characteristics,
and whose management foundation is based on ceaseless research and development activities and a constant emphasis on quality—acompany where the entire organization finds meaning in making utmost efforts.
3.Coexistence and Co-prosperity
HDSＩ is supported by many different parties including our employees, customers, shareholders, materials and parts suppliers, affiliatedcompanies and trading partners.
We make our best efforts to create attractive products, services, compensation, working environments, and trading relations to satisfy allthese concerned parties.
4.Contribution to Society
HDSＩ broadly contributes to society and industry through our corporate activities as a good corporate citizen. The products and services weprovide directly and indirectly contribute to the betterment of society.
We aspire to be a company that helps to improve the environment and the quality of the communities where we are located.

2

History of Sales（Million ¥）50,000

History of Sales（Non-consolidated basis）

45,00040,00035,000Flat Panel Display
Manufacturing Equipment

30,00025,000

Semiconductor Equipment

20,00015,00010,0005,000

0Demand Drivers
Robotics
Working Machines
71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 '87 88 89 90 91 92 93 94 95 96 97 98 '99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 （FY）

3

Operational Risks
1.Plant and Equipment Investment Trends

Because the majority of HDS Group’s products are sold as components for industrial machinery such as industrial robots, semiconductor
manufacturing equipment, and flat-panel display manufacturing equipment, plant and equipment investment trends have an influence on theoperating performance of the HDS Group.
In particular, for semiconductor and flat-panel display manufacturing equipment industries, while there is large growth from improved
conditions in the semiconductor device and panel markets and from manufacturing technology innovations, an unexpected market contraction
resulting from supply-demand adjustments or other developments could adversely affect the operating performance of the HDS Group.

2.Research and Development Results

The HDS Group develops and puts on the market distinctive, high-value-added products by intensively allocating resources to the researchand development division as a technology and technical skills organization in the motion control field. A delay in the market release or market
penetration of the resulting new products despite the continuous allocation of resources to research and development could adversely affectthe operating performance of the HDS Group.

3.Product Quality

The HDS Group has received ISO9001 certification and otherwise strives to strengthen its quality assurance system to boost customer
satisfaction and gain market advantages. Nevertheless, the emergence of unexpected product defects or other quality issues could adversely
affect the operating performance of the HDS Group.

4.Fluctuations in Foreign Exchange Rates

The HDS Group has two consolidated subsidiaries in the US, one consolidated subsidiary in China, one consolidated subsidiary in South
Korea, and one consolidated subsidiaries in Germany which has nine consolidated subsidiaries in Europe, and we are actively advancing
internationalization in our businesses. Consequently, foreign exchange rate fluctuations sometimes have a negative effect on the businessactivities of the HDS Group. Foreign exchange rate fluctuations also affect the yen-equivalent value of the Group’s assets and liabilities andrevenues and expenses from transactions denominated in foreign currencies, and may have a negative effect on the HDS Group’s operating
results and financial conditions.

5.Retirement Benefits Obligations

Harmonic Drive Systems and some HDSI consolidated subsidiaries have defined benefit pension plans or lump-sum retirement benefit plans.
Revisions of the assumptions for calculating retirement benefits obligations and retirement benefits expenses, changes in the investment
environment for pension assets, and other financial developments could adversely affect the Group’s operating performance and financial
conditions.

6.Other Risks

Changes in the economic and political environment and the occurrence of natural disasters, wars, terrorism, and other unpredictable events
that cannot be avoided by the HDS Group alone could adversely affect the Group’s operating performance and financial conditions.
*The above is a summary version. For full details, please refer to the latest Annual Securities Report “Yukashouken Houkokusyo” ( in Japanese).

4Mid-term to Long-term Management Strategies and Management Targets
Mid-term to Long-term Management Strategies
The Group continues to pursue its unwavering mission of contributing to social and technological innovation through motion control technology,
stated in our fiscal years 2021-2023 medium-term management plan. Market for mechatronics and precision speed reducers, in which weparticipate, is contributing greatly to the emerging social and technological innovation, including electrification of vehicles and surgical robots, andsuch demand will continue to expand. At the same time, as demand for collaborative robots increases amid the worldwide labor shortage, we seehigh growth potential in a mid-and-long term. With the whole group united, we aim for achieving sustainable society through our business, basedon Basic Policy of Sustainability formulated in March 2022. In line with the policies outlined in our long-term vision and medium-term
management plan, we aim to enhance corporate value over the medium to long term by maintaining a balance between defensive and offensive
approaches in our management strategy.
The summaries of the Basic Policy of Sustainability, our Group’s mission, long-term vision, and medium-term management plan are as follows.

Basic Policy of Sustainability
As a technology and skills-based organization in pursuit of Total Motion Control, the HDS Group aims to enhance corporate value and realize asustainable society by contributing to technological innovation for the betterment of society. We intend to achieve these goals based on ourmanagement philosophy comprising four pillars: Respect for individuals, be a meaningful company, coexistence and co-prosperity, andcontribution to society.

Our Group's Mission
To contribute to technological innovation in society through motion control technology

Long-term Vision-In pursuit of total motion control• Take on the challenge of developing new technologies and skills that capture changes in the environment• Achieve QCDS that goes beyond customer expectations• Contribute to creating a sustainable society through corporate activities

5Mid-term to Long-term Management Strategies and Management Targets
Mid-term Management Plan for fiscal years 2021–2023-Toward the Next 50 Years: Moving to a Solid Growth Stage(Basic policies and strategies)(a) Achieve QCDS that meets customer expectations
Q: Quality Control: Zero defects and zero claims
C: Improve productivity and further enhance Value Analysis / Value Engineering
D: Commit to delivery schedule requested by customers
S: Enhance ER activities by speeding up(b) Expand RD, AD, and MT businesses by developing valuable products and enhancing services[RD: HarmonicDrive®]• Create and commercialize new technologies and skills to support next-generation applications[AD: AccuDrive®, HarmonicPlanetary®]• Expand product offerings tailored to regions and various applications through business restructuring[MT: Mechatronics]• Provide products that enable customers to bring their vision to life and further improve problem-solving capabilities(c) Build a business foundation that meets the demands of the times• Promote sustainable management (SDGs)• Develop human resources capable of leading business expansion, and establish personnel systems and work styles that enhance diversity• Execute IT enhancement strategy and implement our own IoT concept• Establish a financial base to support growth and strengthen fundraising capabilities(d) Strengthen coordination and maximize synergies with overseas group companies and institutions• Maximize utilization of management resources at each site
• Maintain and promote proactive research activities with overseas research institutions• Establish a global production system(e) Create new standards that define the next 50 years through outside-the-box thinking• Proactively take on the challenge of discovering new materials, new principles, new mechanisms, and new production methods• Make strategic moves toward developing intelligent mechatronics• Foster a culture that is sensitive to changes in society and accepts variant perspectives

6Mid-term to Long-term Management Strategies and Management Targets
Management Indices Targets
The HDS Group has established the following management indices targets.
- Profit Margin:

At least 20%- Return on Equity (ROE):At least 10%

7

Sales Composition by Application Fields
0.1%

6.5%

0.4%
0.9%
1.7%

（Non-consolidated basis)

Turnover (%) in FY2021
11.5%

3.9%
5.4%
2.9%

51.7%
15.0%

Applications
Robotics

Semiconductor Equipment

Flat Panel Display Equipment

Gearbox for Motor Manufactures

Machine Tools

Optical Devices

Measuring Machines

Printing Machines

Transporter

VehicleOthers8

Semiannual Sales Composition by Application Fields（Non-consolidated basis)

22,094

Million ¥19,02520,000

2,619
1,044
866
1,188

2,202

14,222

15,00010,000

1,575
659
675
702

10,041
1,562
321
487
618

5,000

0

8,070

5,040

1,611
723
1,012

11,657

9,584

730

467

376
1,161

394
1,616

2,804

3,348

First 1period

Second2 period

First period
3Second4 period

FY2020

Semiconductor Equipment
Gear box Motor Manufactures
Optical Devices
VehicleFlat Panel Display Equipment
Machine Tools
Transporter
Others

FY2021

Robotics
Printing Machine
Measuring Machines9Performance Summary Operating Results
During the fiscal year ended March 31, 2022
Future of the world economy remained uncertain during this fiscal year under review due to situations such as the spread of the COVID-19, theworldwide semiconductor shortage, and the Ukrainian situation that broke out at the end of the year. As for the situations concerning orders
received by the Harmonic Drive Systems Group (hereinafter “the Group”), demand recovered notably in China in the second half of the previous
fiscal year. In addition, orders remained high in Japan, the United States and Europe since the beginning of the fiscal year. This is because of thebrisk investment for automation, such as industrial robots chiefly, and large-scale investment for manufacturing equipment which was prompted byvigorous demand for semiconductors. Though some of our customers were forced to adjust production because of the semiconductor shortage
which became prevalent in the second half of this fiscal year, demand for primary applications expanded, and resulted in a record high ¥94,823
million of consolidated orders received, up 127.5% year on year.
Reflecting the sharp increase in demand, we enhanced production capacity in major production sites in Japan, Germany, and the United States,
while minimizing the impact from the spread of the COVID-19. As a result, sales increased in all regions, with our consolidated net sales reaching¥57,087 million, up 54.1% year on year.
Regarding net sales trend by application, net sales for industrial robots surged in Japan and in Europe, among other regions, reflecting the increasein demand to cover perpetual labor shortage with collaborative robots. In addition, expansion of EV-related capital investment mainly in China
increased the sales. Net sales for semiconductor manufacturing equipment also climbed significantly following the strong demand forecast, which
led to voracious appetite for capital investment. Net sales for advanced medical applications such as surgical robots rose reflecting demand
recovery notably in the United States. In contrast, net sales for automotive applications, which rose in the first half of the fiscal year, turned sluggish
in the second half due to production adjustment by customers caused by the semiconductor shortage.
In terms of profit and loss, depreciation cost increased due to the enhancement of production capacity, and manufacturing cost rose due mainly topersonnel increase in the manufacturing sector. Selling, general and administrative expenses also increased reflecting the higher transportation
cost for export and larger allocation for research and development expenses. However, the increase in profit due to increased net sales outweighedthat of the cost, marking 909.3% year-on-year jump in operating profit to ¥8,739 million. In addition, the increase in operating profit resulted in
902.9% jump in profit attributable to the owners of parent to ¥6,643 million.
In terms of net sales by product group, speed reducers totaled ¥47,235 million, up 61.1% year on year and mechatronics products reached ¥9,852
million, up 27.7% year on year. They accounted for 82.7% and 17.3% of the total net sales, respectively.
The fiscal year ended March 31, 2022 marked the first year of the new mid-term management plan (FY03/22–FY03/24). During the period, we
pursued measures set out in the plan.
On the sales front, taking advantage of online sales approaches that took root under the COVID-19 pandemic, we sought to capture orders byenhancing communication with customers, focusing on ways of solving their individual issues, with a particular stress on speeding up our response
time. To meet a rapid upswing in orders, we also focused on close information-sharing with each customer, with a commitment to meeting desireddelivery dates. In the exhibition area, we rolled out new initiatives such as SDG-themed booths, uniforms, and novelty gifts.

10Performance Summary Operating Results
In terms of quality, we reaffirmed our definition of quality as "satisfying customer expectations" and have been working to improve product andoperational quality. In line with increased automation of production lines, we reinforced our quality control framework by digitizing process data. In
addition, we expanded the technical support functions of the customer satisfaction department, striving to raise product quality and enhance ourproblem-solving capabilities. Although the pandemic restricted movements of personnel, we made use of IT tools, endeavoring under our Common
Global Quality initiative to maintain and raise quality at all Group production sites (Japan, Germany, the US, and South Korea).
In terms of R&D, we strengthened coordination between R&D divisions based in Japan and Germany to further develop our Harmonic Drive®
strain wave gearing. At the same time, we focused on joint research with external research institutes, working to develop and commercialize
elements that are potentially essential to next-generation motion control technology. We expanded the size variations of products in our Ultra-Light
Weight (ULW) series and released new products capable of meeting growing demand for weight reduction. Furthermore, we have been involved in
the development of all new robots by major robot manufacturers (more than 20 companies), and are focusing on commercialization that meets theneeds of individual customers.
On the production front, anticipating growing demand for our products, we moved forward with the Group production capacity expansion plan set
out in the previous mid-term management plan. To this end, we decided to invest a total of 6.5 billion yen to boost capacity at the Ariake Factory(Azumino City, Nagano Prefecture), and initiated preparations. We are targeting a 40% increase in monthly production capacity in Japan from thesecond half of 2022, with a goal of producing 130,000 units for industrial machinery and 90,000 units for automotive applications. With aggressive
investment into automation, these new production lines will allow us to promote labor saving and will also digitize a range of data to enable thevisualization of production. Through this, we seek to enhance both productivity and quality.
Positioning the Hotaka Plant as the "mother factory" of our production activities, we will continue to respond flexibly to demand for high-mix, lowvolume production there while pursuing the transfer of advanced skills. We are also taking steps to grow the business going forward. To achieve
efficient distribution of production sites, make effective use of assets, and diversify risks across the Group, we will relocate production of ourmechatronics products to Komagane City, Nagano Prefecture (on the premises of Winbel Co., Ltd.). We have started to expand floor space andtake other preparations, aiming to finish relocating by June 2022.

Performance of reportable segments is stated below:<Japan>Demand for semiconductor manufacturing equipment grew due to increase in demand for industrial robots induced by robust investment for
automation, chiefly in China, and overall high level of capital investment demand for semiconductors. As a result, net sales increased 68.6% year
on year to ¥37,273 million. Segment profit (ordinary profit) rose 147.2% year on year to ¥11,889 million due to increased sales.
<North America>
As normalization from the COVID-19 proceeded, demand for advanced medical applications (surgical robot-related) and semiconductor
manufacturing equipment recovered. As a result, net sales rose 29.1% year on year to ¥6,643 million. Segment profit (ordinary profit) increased
126.3% year on year to ¥701 million.
<Europe>
Normalization of economic activities as noted in the North America segment pushed up demand for industrial robots, among others. Net sales
marked 34.7% year-on-year increase to ¥13,170 million. Segment profit (ordinary profit) totaled ¥171 million, up from the segment loss of ¥920
million a year earlier. This is due to the increase in sales, which absorbed the amortization cost of ¥1,580 million on intangible assets posted at thetime of the acquisition of shares in Harmonic Drive SE.

11

Results ⅰ Net Sales, EBIT
（Consolidated basis)

Net Sales

EBIT

EBIT=Ordinary income + Interest paid － Interest income（Million ¥）（Million ¥）67,80970,00050,751
AVE. 5-yr

60,00054,33957,087

16,00014,00050,00012,00037,48740,00017,18318,00037,034

11,9708,027
AVE. 5-yr

10,00030,000

9,233

8,000
6,000

20,0004,000

10,000

2,000

316
0

2017

2018

2019

2020

2021 （FY）

0

2017

2018

2019

1,434
2020

2021 （FY）

12

Results ⅱ EBIT to Net Sales Ratio, EPS（Consolidated basis)

EBIT to Net Sales Ratio

EPS
（¥）

225.00（%）

35.0

200.00175.0030.0

150.00

25.3
25.0

22.0

100.0083.86

53.20 AVE. 5-yr 69.02

75.00

20.0

13.7 AVE. 5-yr

15.0

16.2

50.00
25.00
0.00

10.0

-25.00

0.8
2017

2018

2019

2020

6.88
2017

2018

2019
-11.38

2020

2021

（FY）

Dividends paid per share

3.9

5.0
0.0

117.62125.00

2021

（FY）

FY

2017

2018

2019

2020

2021

Dividends(¥)

26

38

20

20

21

13

Results ⅲ Total Assets, Equity Ratio（Consolidated basis)

Equity Ratio

Total Assets（Million ¥）140,000
120,000（%）

138,584

142,872
131,848
44,88552,49935,988140,028100

143,289

90

38,11745,872

80

71.7

72.5

73.3

73.5

70

100,000

69.0

60
80,00050

60,00040,00072.0
AVE. 5-yr

86,08597,987

95,859101,91040

97,41730
20

20,000
0

10
2017

2018
Current Assets

2019

2020

2021

0
（FY）

2017

2018

2019

2020

2021

（FY）

Fixed Assets

14Sales Structure by Regions（Consolidated basis)

By Regions

By Regions（Million ¥）（%）

70,00067,809

100.0

13.3

7,554
60,00050,00015,95240,00013,506

6,856

6,092

37,487

5,482
12,63437,44528,12810,00006,240
14,0562017

2018

Domestic

75.0

24.8

13,170
4,555

20,000

12.2

10.0

10.7

26.4

23.1

57,08754,3397,222

30,00011.2

37,034
3,691

6,643

50.0

31,180

25.0

33.7
10.1

5,144

51.8

55.2

Europe2021 （FY）

Other Region

11.6

49.7

54.6

37.5

18,421

2020

13.9
16.6

9,775

2019

North America

10.1

23.5

0.0

2017

2018

Domestic

2019

North America

2020

Europe2021（FY）

Other Region

15

Sales Structure by Product Types（Consolidated basis)

By Product Types

By Product Types（Million ¥）（%）

67,80970,00060,00050,00010,92357,08754,339

9,852

9,695

40,00030,00020,000100.0

37,48737,034

9,456

7,714

17.8

16.1

82.2

83.9

29,319

2019

2020

2017

2018

17.3

79.2

82.7

2020

2021 （FY）

50.0

47,23528,03120.8

75.0

56,88544,643

25.2

74.8

25.0

10,000

0

2017

2018

Reducers

Mechatronics

2021

（FY）

0.0

Reducers

2019

Mechatronics

16

Profitability EBIT to Total Assets Ratio, ROE（Consolidated basis)

EBIT to Total Assets Ratio

（%）

ROE

（%）

50

30

45

25

40
35

20

30
25

15

10

12.0

20

5.7
AVE. 5-yr

8.6

15
10

6.4

5

5

0.2
0

2017

2018

2019

1.0
2020

0

2021

（FY）

-5

10.1

2017

11.2

2018

5.5
AVE. 5-yr
-1.1

0.7

2019

2020

6.9

2021
（FY）

17

Stability Interest Coverage Ratio, Debt / Equity Ratio（Consolidated basis)

Interest Coverage Ratio

Debt / Equity Ratio

Interest Coverage Ratio = Net Cash provided by operating activities / Interest paid-net

Debt / Equity Ratio = interest-bearing debt / total shareholders' equity（Times）（Times）
1,200

0.5

1,000

0.4

800

682.5

0.3

600

231.0
AVE. 5-yr

400

200

92.9

69.0

0.02
0

2017

0.07
AVE. 5-yr

0.1

213.1
97.4

0

0.2

2018

2019

2020

2021

（FY）

2017

0.17
0.07

0.02
2018

0.06
2019

2020

2021

（FY）

18

R&D Investments（Consolidated basis)（Million ¥）

（%）

3,000

2,448 AVE. 5-yr

2,476

2,500

2,444

2,114
2,000

1,500

20.0

3,012

3.9

3.7

2017

2018

2,195
5.9

6.6

2019

2020

R & D Expenditure

Fiscal Year

10.0
5.3

2021

（FY）

0.0

Percentage of Net Sales

2017

2018

2019

2020

2021

Number of R&D persons

111

129

139

144

139

Share of total employees (%）

11.5

11.6

12.7

13.0

12.1
19

Capital Expenditures（Consolidated basis)（Million ¥）25,00023,87620,00015,00010,0009,635 AVE. 5-yr

8,757

7,892
5,690

5,000

1,959
0

2017

2018

2019

2020

2021

（FY)

※ Purchases of tangible and intangible fixed assets

20

Consolidated Balance Sheets（Million ¥）FY2017FY2018FY2019FY2020

FY2021

Current Assets

52,49944,88535,98838,17745,872

Fixed Assets

86,08597,987

95,859101,910

97,417

Tangible fixed Assets

21,30640,85245,50041,991

43,967

Intangible fixed Assets

48,97644,41540,21241,00340,435Investment and other Assets

15,802

12,718

10,146

18,91513,013

Total Assets

138,584

142,872

131,848

140,028

143,289

Total Liabilities

29,86529,59425,12929,96844,433Current Liabilities

13,18015,944

5,127

7,954

14,127Long-term Liabilities

16,685

13,65020,00222,01430,306

Total Net Assets

108,719

113,277

106,718

110,059

98,856

Shareholders’ Equity

88,933

97,07993,192

91,78489,184

Other Comprehensive Income

10,446

6,564

3,435

11,104

9,671

Subscription rights to shares

625

625

625

－

－

8,712

9,008

9,464

7,170

－

138,584

142,872

131,848

140,028

143,289

Minority Interest （Non-controlling Interests)

Total Liabilities and Net Assets

21

Consolidated Statement of Income（Million ¥）FY2017FY2018FY2019FY2020

FY2021

Net sales

54,33967,80937,48737,03457,087Gross profit

25,70330,446

12,003

12,582

22,426

SG&A

13,386

13,821

12,198

11,716

13,686

Operating income

12,316

16,624

▲195

865

8,739

Ordinary income

11,946

17,185

236

1,366

9,108

Net income attributable to owners of parent

7,777

11,322▲1,095

662

6,643

22

Consolidated Statement of Cash Flows（Million ¥）FY2017FY2018FY2019FY2020

FY2021

Cash flow from operating activities

9,233

15,121

10,950

9,555

9,881

Cash flow from investing activities▲8,171▲22,399▲12,537▲4,180▲19,490

Cash flow from financing activities

17,493▲3,271

2,362▲3,611

8,123

95

▲171

▲33

▲108

256

Net increase (decrease) in cash and cash equivalents

18,651▲10,720

742

1,654

▲1,299Cash and cash equivalents at end of year

28,32017,60018,342

19,996

18,767

Effect of exchange rate changes on cash and cash equivalents

23

Share Price Trend
Share Price
HDSI’s Share Price (Closing)

10,000Tokyo Stock Price Index (Closing)
（￥）

（￥）

2,400
9,000
2,100

8,000

Number of shares of common stock

issued and outstanding:
96,315,400 shares (As of March 31, 2022)

Number of shareholders:

9,736 persons (As of March 31, 2022)

7,000

1,800

6,000

1,500

5,000

Market capitalization:¥406,230,130,080 (As of March 31, 2022)

1,200

4,000
900
3,000
600
2,000
1,000

HDSI’s Share Price(Closing)

300

Tokyo Stock Price Index(Closing)

002021/42021/52021/62021/72021/82021/92021/10 2021/11 2021/12

2022/12022/2

Note: TOPIX is a stock index calculated and published for stocks
listed on the Tokyo Stock Exchange (TSE).
Harmonic Drive Systems Inc. is listed on the Standard Market of
the TSE.

2022/324

Investors’ Guide FY2021
Year ended March 31, 2022

Appendix

Results forecasts on this document are based on the management’s decisions for future businessstrategies and performance, and may include risks from the business environment, uncertainties,
and other factors. For this reason, the understanding is that the actual business results may notagree with the business prospects as presented on this document.

Feb 08, 2023

25

Outlook for FY03/23
FY03/23 Outlook
The business environment surrounding the Group remains to be unpredictable primarily due to theworldwide shortage of semiconductors and price hike in raw materials and energy. On the one hand, theGroup forecasts strong demand for applications in industrial robots, collaborative robots, andsemiconductor manufacturing equipment, which is backed by vigorous demand for capital investment
following accelerating electrification of vehicles worldwide, and ongoing capital investment to satisfy
voracious appetite for semiconductors. In addition, opportunity for further growth is likely in the new market
where we have put our focus, such as advanced medical applications (surgical robot-related) andautomotives.
The mechatronics and precision speed reducers handled by the Group are making significant contributions
to technological innovation in society, such as the shift to electric vehicles and surgical robots. Demand inthese areas will continue to grow going forward. Amid worldwide labor shortages, we also anticipate
significant growth opportunities over the longer term stemming from mounting demand for collaborative
robots (co-bots). Guided by the Basic Policy of Sustainability we formulated in March 2022, we will also
work across the Group to pursue activities that help bring about a sustainable society. We will implement
strategies in line with policies outlined in our long-term vision and mid-term management plan, maintaining
a balance between offensive and defensive approaches in our management strategy. By doing so, we aim
to enhance corporate value over the medium to long term.
For the consolidated earnings for the fiscal year ending March 31, 2023, based on the above businessenvironment, the Group forecasts net sales of ¥71,000 million, operating profit of ¥9,800 million, ordinary
profit of ¥10,100 million, and profit attributable to owners of parent of ¥6,700 million.
26

Forecast ⅰ Net Sales, Operating Income（Consolidated basis)

Net Sales

Operating Income（¥ Million ）（¥ Million ）80,00070,00071,00067,80920,00018,00060,00057,087

16,00016,62414,00050,00037,48740,000

Forecast

37,03412,00010,00030,000

8,739

9,800

8,000

Forecast

6,000

20,0004,000

10,000

0

2,000
0

2018

2019

2020

2021

2022 （FY）-2,000

865
2018

2019

-195

2020

2021

2022

（FY）

27

Forecast ii

Operating Income to Net Sales Ratio, EPS（Consolidated basis)

Operating Income to Net Sales Ratio
（%）

25.0

EPS

（¥）
150.0024.5

117.62100.00

15.0

15.3

69.02

13.8

Forecast

50.00

6.88

5.0
0.00

2.3
2018
-5.0

70.28

2019

-0.5

2020

2021

2022

（FY）

2018

2019

-11.38

2020

2021

2022

（FY）

Forecast

Forecast-50.0028Forecast iii

Dividends paid per share（Consolidated basis)

Dividends paid Per share（¥）
40

Dividends paid per share (left axis)

38

Basic Policy on Earnings Distribution
At HDSI, our basic policy is to distribute earnings inaccordance with operating performance.

28

30

20

20

21

20

Forecast

For future business development, internal reserves aremostly invested in such areas as researching anddeveloping new products, expanding and improving
production facilities, and upgrading information
management systems. Internal reserves are also used foragile execution of capital policies.

100

While our general dividend policy is to maintain an annual
dividend payout ratio of 30% of net income attributable toowners of parent, we determine return to shareholders
through comprehensive considerations including dividend
continuity and the maintenance of sufficient internal
reserves.

2018

2019
2018

2020
2019

2020

2021
2021

2022

（FY）

2022

29

Business Activity － Products
Leadership in Total Motion Control
Feb 08, 2023
30

Total Motion Control
Our business Domain

Developing and producing Precision Control Equipment andComponents for a broad range of applications, focus on “Total
Motion Control”

Schematic Concept of Total Motion Control

Sensors

Speed
Reducers

Controllers

OthersMotorsDrivers31

History of Harmonic Drive Systems Inc.
1950 1960 1970
55
64
History

InventedHD

First
Introduced
to Japan

J/V

76

USM+
Hasegawa
Gear Works

1980
79
100%
subsidiaryof USM/
EMHART

1990
Current HDSI

95

2000
98

2010

ISO ISO
9001 14000 (IPO)

Products

Equipments for Optical, Aero, Space and Environment

Semiconductor and Flat Panel Display Equipment

Our
GrowthBefore Dawn

Robotics
Harmonic Concert (Classical music concert)

Community
RelationsHarmonic Lecture Meeting

TRIAD

32

History of Sales（Million ¥）50,000

History of Sales（Non-consolidated basis）

45,000Aerospace
Mobility

40,000

Advance Medical
Technology

35,000Flat Panel Display
Manufacturing Equipment

30,00025,000

Semiconductor Manufacturing
Equipment

20,00015,00010,0005,000

0Demand Drivers

Robotics
Machines Tools

71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 （FY）

33

Sales Structure by Product Types
Turnover (%) in FY 2021

Controller

0.7%
11.0% 15.3%
8.6%（Non-consolidated basis）

HarmonicDrive®
(Component type)

Actuator

64.4%
Planetary Gear

HarmonicDrive®
(Unit type)34

Principle and Advantages of “HarmonicDrive®”
Flexspline

Circular Spline

Wave Generator
The flexspline is deflected by the wave
generator into an elliptical shape, so theflexspline teeth to engage with those of thecircular spline at the major axis and to becompletely disengaged across the minor axis.

A clockwise rotation of the wave
generator causes the flexpline torotate in the opposite direction while
subjecting it to elastic deformation.

When the wave generator rotates
one revolution clockwise, theflexpline moves counterclockwise by
two teeth relative to the circularspline.

Advantage of “HarmonicDrive®”
Compact Design/ Reduced WeightNon-backlash
Hollow Construction
High Reduction Ratio by Single Stage
High Efficiency
High Torque Capacity
High Positioning Accuracy and Repeatability
High Torsional Stiffness
Simple Installation and Assembly
Low Noise and Smoothness operation

35

Features and Benefits “ Compact and Lightweight”
Comprised of just three basic components

Compact and Lightweight

Circular Spline

Flexspline

Wave Generator
36

Features and Benefits “ Zero Backlash”

Clearance between
mated gear teeth

ΘBacklash
1,000mm

Backlash

Backlash

Backlash after 1m

Our Products

0.5 degrees

8.7mm

None

Transporters and Processing
Machinery

0.05～0.25 degrees

0.9mm～4.3mm

Robotics and Semiconductor
Equipment

0～0.02degrees

0～0.3mm

Applications
General Industrial
Machinery37

Feature Applications
Industrial robots
Hayabusa 1. 2 Photograph courtesy of JapaneVTOL

Aerospace Exploration Agency (JAXA)

Robotic Surgical System

Optical-infrared telescope “Subaru”
installed on Mauna Kea on the island of
HawaiiPhotograph courtesy of the National
Astronomical Observatory of Japan,
National Institutes of Natural Sciences

Cobot Photograph courtesy of Techman Robot Inc.

38

Target Segment Image
AccuracyHigh positioning
accuracy
Robotics,
Semiconductor Equipment

Normal positioning
accuracy
Transporters,
Processing Equipment etc.

Emphasis on
power
General Industrial Machinery*This graph is conceptual. The shape, size, and position of images
used do not accurately reflect market size or product positioning.

Price39