Live Green &Grow Strong
Makita Report 2022
Year Ended March 31, 2022

Long-term Target

Strong Company
Makita has set itself the goal of contributing to the creation of sustainable society and consolidating a strong
position in the industry worldwide as a global supplier of a comprehensive range of tools for creating comfortable homes and living environments, including cordless power tools, battery-operated outdoor power
equipment and pneumatic tools.

Management Policy/Quality Policy

1

2

3

4

Makita strives to exist
in harmony with society

Makita values
its customers

Makita is managed ina consistent andproactive manner

Valuing a stalwart
corporate culture,
Makita encourages eachindividual to perform to
his or her highest levela company that observes
laws and regulations, acts
ethically and never allows
intervention of theanti-social organizations.

a market-driven company.

a company that strives
to exist in perpetuity byadhering to a soundprofit structure.

a happy company.

1

Makita Report 2022

Table of Contents

3

Business Summary

5

Financial & Non-financial Highlights

7

Makita’s Value Creation History

9

Chairman’s Message

11

President’s Message

15

Makita’s Value Creation Process

17

Value Creation Process Explained
17 Material Issues
19 Makita’s Strengths in the Value Chain
21 Contribution to Solving Social Challenges

About This Report
Editorial Policy
The Makita Report is published with the objective of presenting the Company’s initiatives
for creating value over the medium- to long-term in a way that integrates both financial
and non-financial information. In preparing the report, information that is particularly
important for the Company’s value creation was compiled concisely, referencing interna-

25

Business Review

27

Risks & Opportunities

Company website (https://www.makita.biz/) for more information. Detailed financial

28

Environment

information, environmental information, and governance information are presented,

37

Stakeholder Relations

Library), the Environmental Report, and the Corporate Governance Report.

41

Systems to Support Enhancement ofCorporate Value—Corporate Governance
46 Messages from Outside Directors

tional frameworks such as those of the Value Reporting Foundation (VRF). Please see therespectively, in the Investor Relations section (under Additional Information in the IR
This report covers 53 companies, including Makita Corporation and its 52 consolidated
subsidiaries (as of March 31, 2022), but some of the information reported only covers
Makita Corporation.

47 List of Directors

Reporting Period FYE 2022 (April 1, 2021 to March 31, 2022)

49

Message from the Financial Officer

However, information from outside of this period is reported when it is appropriate to51

11-Year Summary

53

Stock Information

54

Corporate Data­present past circumstances and data, and recent examples.

Caution Regarding Forward-looking Statements
In this report, forward-looking statements are about future performance and are based on
the Company’s judgment derived from the information available at the time of its preparation. Please understand that a number of important factors could cause actual results todiffer materially from those presented in the forward-looking statements.

Makita Report 2022

2

Business Summary

Supporting the Creation of an Affluent Society on
a Global Scale
As a global supplier of a comprehensive range of tools for creating comfortable homes and­living environments, Makita supports the creation of an affluent society on a global scale. To thisend, we are striving to solve social issues and contribute to the realization of a sustainable society
by making a wide variety of products cordless and expanding our finely-tuned sales and service
network while developing our business close to our customers.

Business Description
Power Tools

Makita power tools are used in many settings, such as
residential and large-building construction sites andfactories. Since becoming the first company in Japanto manufacture and sell portable electric planers in
1958, we have dedicated ourselves to daily technologicaldevelopment to enable better approaches to work that
includes drilling, clamping, cutting, grinding, and more.
We are responding to the diverse needs of customers
with a robust lineup of products embodying ouradvanced technological expertise.

Outdoor Power Equipment, Household andOther Products

In the outdoor power equipment category, which
includes lawn mowers, grass trimmers, chainsaws, andblowers, we are focusing on developing cordless products that are lightweight, low noise, and easy-to-handle
for people from all walks of life, as well as emitting zero
exhaust, thereby also contributing to the realization of
decarbonization. Makita’s household product line
includes the Cordless Cooler & Warmer Box, Cordless
Kettle, and other items that fulfill key roles during outdoor activities or even at times of disaster.

Parts, Repairs and Accessories
Accessories (including consumable parts such as saw
blades and whetstones) have a significant impact onwork quality and efficiency. Makita provides a lineupof long-life accessories optimized for work tasks.
Additionally, we have a network of businesses in eachpart of the world to allow for rapid and stable repairs andparts supply, which enables Makita to contribute toimproving its customers’ production and work efficiency.

3

Makita Report 2022

Makita’s Global Network
Makita operates 127 sales offices in Japan (as of April 2022), and directly managed sales bases in some 50
countries overseas, allowing us to carry out fine-tuned sales and services in approximately 180 countries.
In addition to the one in Japan, we have plants in seven countries overseas and currently produce about
90% of our products overseas. By maintaining production sites and sales offices with ample inventories at
locations around the world, we are able to ensure the swift and stable supply of our products.

Makita Corporation Head Office
Sales Subsidiaries

Sales and Production Subsidiaries

Sales Subsidiary BranchesService Centers

Production Subsidiaries
Technology Development Subsidiary

North America

16.0%
47.7%
15.2%

 sia
A
(excluding Japan)

6.6%

 entral andCSouth America
Oceania

5.6%
7.0%

The Middle East
and Africa

1.9%Japan
EuropeShare of
Revenueby Region(FYE 2022)

Overseas andDomestic
Production(Product Unit Basis)(FYE 2022)

Power Tools(FYE 2022)

Outdoor Power
Equipment,
Household andOther Products

25.6%

Parts, Repairs
and Accessories

17.3%

Domestic

83.9%
Non-Japanese

57.1%
Share of
Revenue by
Product Category

93.0%
7.0%
Overseas

Breakdown of
Employees by
Nationality(FYE 2022)

16,973 people

16.1%
Japanese

3,260 people

Makita Report 2022

4

Financial & Non-financial Highlights

Financial
Revenue

Operating profit & operating profit ratio(Million yen)

(Million yen)

800,000(%)

100,000

739,260

91,72825.0

700,000

80,000600,000

60,000500,000

40,00010.0

400,000

20,000

5.0

0

2018

2019

2020

2021

2022

0
(FYE)

20.0

12.4

2018

Operating profit

2019

2020

2021

2022

15.0

0
(FYE)

Operating profit ratio

Against the backdrop of robust tool demand for construction sites, both
domestic and overseas sales were strong, resulting in a 21.5% year-onyear increase in revenue to ¥739,260 million, a record high for the fifth
consecutive year.

Although the cost-of-sales ratio worsened due to an increase in transportation costs, operating profit increased 3.7% year-on-year to ¥91,728
million, marking a record high for the second consecutive year. The­operating profit ratio was 12.4%, down 2.1 percentage points from theprevious year.

Profit attributable to owners of the parent

ROE(Million yen)(%)

70,00012.0

64,7709.2

10.0

60,0008.0

50,0006.0
40,0004.0

30,000
0

2.0
2018

2019

2020

2021

2022

0
(FYE)

Income tax expenses totaled ¥27,146 million with an effective tax rate of
29.4%. As a result, profit attributable to owners of the parent increased
4.4% year-on-year to ¥64,770 million, reaching a record high for the second consecutive year.

2018

2019

2021

R&D costs

Capital expenditures(Million yen)

(FYE)

59,93760,00014,145

2022

Despite the increase in profit attributable to owners of the parent, ROE
declined 0.9 percentage points from the previous year to 9.2%, reflecting the increase in equity attributable to owners of the parent.

(Million yen)

15,0002020

50,00010,00040,00030,0005,000

20,00010,000

0

2018

2019

2020

2021

2022

0
(FYE)

To promote the use of rechargeable lithium-ion batteries, we focused on
expanding our lineup of cordless products, including the 40Vmax series,
and R&D costs increased 10.7% year on year to ¥14,145 million.

5

Makita Report 2022

2018

2019

2020

2021

2022

(FYE)

Capital expenditures totaled ¥59,937 million, up 20.2% from the previous fiscal year, as a result of efforts to increase production capacity andestablish and expand distribution centers, including the construction ofa new factory in China, an additional factory building in Thailand, and a
distribution center in Saitama Prefecture.

Non-financial
Production output

Number of employees(Million units)

60.00

22,000

50.05

50.00
40.00

18,00030.00

16,00020.00

14,000

0

2018

2019

2020

2021

2022

20,23320,000

0

2018

(FYE)

2019

2020

2021

2022

(FYE)

As a result of the strong sales situation and efforts to increase production to meet demand in various regions, production output increased
26.4% year-on-year to 50.05 million units, reaching a record high for thesecond consecutive year.

Reflecting strong sales conditions, the number of employees increased
by 1,609 from the end of the previous fiscal year to 20,233.

Increasing presence of female employees

Greenhouse gas emissions (Scope 1, 2)(t-CO2)

Femaleemployees

6,999
Femalemanagers

Percentage offemale employees

25.0

78,89980,00034.6%
Percentage offemale managers

220(t-CO2/100 mil. yen)

100,000

17.9%

20.0

Fiscal 2030 targets

60,00015.0

44,83640,00010.7 10.0

Fiscal 2040 targets

20,000

5.0

0

0

2021

Emissions

2022

(FYE)

t-CO2

Virtually
zero

Intensity per unit of revenue

Domestically, female employees have an average of approximately 17.0
years of service and have been active in a variety of departments overlong periods of time. Overseas, Makita has numerous female employees
in management positions who are demonstrating a wide range of­abilities in their respective fields.

With the goal of achieving virtually zero greenhouse gas emissions(Scope 1, 2) by fiscal 2040 (FYE 2041), we are actively utilizing renewableenergy and engaging in thorough energy-saving activities. Greenhousegas emissions (Scope 1, 2) decreased by 12.0% from the previous fiscal
year to 78,899 t-CO2.

Water usage

Waste emissions(m3)(m3/100 mil. yen)

400,000

100.0

317,185

300,000

75.0

52.8
200,000

50.0

117,000

100,000
0

21.8
2018

2019

2020

2021

2022

25.0
0
(FYE)

(t/100 mil.
yen)

30,000(t)29,957 10.0

25,0008.0

20,0005.0

15,000

4.0

10,000

5,907

5,000
0

6.0

1.1
2018

2019

2020

2021

2022

2.0
0
(FYE)

Water usage (Left axis)

Intensity per unit of revenue (Makita Corporation)

Waste emissions (Left axis)

Intensity per unit of revenue (Makita Corporation*)

Water usage (Left axis)

Intensity per unit of revenue (Overseas production subsidiaries)

Waste emissions (Left axis)

Intensity per unit of revenue (Overseas production subsidiaries)

We carry out monthly monitoring of water usage at business bases andstrive to reduce water usage. Although water usage in FYE 2022
increased given our strong sales, intensity per unit of revenue for Makita
Corporation fell 17.7% year on year to 21.8 m3/100 million yen and foroverseas production subsidiaries fell 31.2% to 52.8 m3/100 million yen.

We are striving to reduce our final disposal volume of waste by thoroughly sorting waste in order to promote recycling. Although final­disposal volume of waste on FYE 2022 increased given our strong sales,
intensity per unit of revenue for Makita Corporation* fell 15.3% year on
year to 1.1 tons/100 million yen and for overseas production subsidiaries
fell 18.2% to 5.0 tons/100 million yen.
* Applicable only to the Head Office, Okazaki Plant, and Nisshin Office.

Makita Report 2022

6

Makita’s Value Creation History

Continuously Evolving to Meet the Needs of
the Times and Our Customers
Since our founding, we have pursued expansion on a global scale by adapting to meet the needs of ourcustomers and the times. We will continue to leverage our strengths, including a worldwide network ofsales and service bases, and evolve into “a Supplier of a Comprehensive Range of Cordless Products” forfurther growth. By doing so, Makita will continue to provide products and services that accurately meetthe needs of our customers and the times and thereby achieve sustainable growth.

1958
1915

Mosaburo Makita founded
Makita Electric Works (proprietorship) in Nagoya, Japan

Released the 1000 portable electric
planer, Japan’s first such domestically­produced tool

1959

1970

Established Makita U.S.A. Inc.,
our first overseas subsidiary

1991

Changed company name to
Makita Corporation

1980

Started production of power
tools in Canada,* our firstoverseas production site

1938

Incorporated the proprietorshipand established Makita ElectricWorks, Inc.

• Decided to convert to a power tool
manufacturer• Shipped the 1300 hand-held electric
planer to Australia, our first export ofpower tools

1945

1962

1910-

1950-

1970-

1990-

Founded in a time ofincreased demand forelectric power

Overcoming adversity,transforming into a
power tool manufacturer

Renewed corporate
image to become a comprehensive supplier

1915

1958-59

Developing Overseas
Markets as the First Step
Towards Becoming
a Global Company

Taking advantage of the­electricity boom of World War I,
when demand for electricity
surged, Mosaburo Makita
founded Makita Electric Works(proprietorship) and began
repairing and selling lighting
equipment, electric motors,
transformers, and other products.

The recession following the
Korean War caused a slump insales, and developing original
products became an importantmanagement issue. After muchtrial and error, in 1958, the firstJapanese-made portable electric planers were launched withthe catchphrase “20 times more
efficient than a human.” The
product was well received andfulfilled the needs of building
carpenters nationwide. In 1959,
the Company decided to withdraw from the electric motor
business and become a power
tool manufacturer.

Moved to the present location in
Sumiyoshi-cho, Anjo City, toaccommodate World War II related evacuations* Production terminated in
January 2009

Changed company name to
Makita Electric Works, Ltd.

1970
Makita established its first overseas subsidiary, Makita U.S.A. Inc.
in the U.S., with the goal of
expanding exports. In a fierce
market crowded with competitors, including major power tool
manufacturers, we had some difficulties at first. However, wedeveloped a finely tuned sales
strategy, and our products’ excellent cost performance along with
our high quality after-sales service earned high evaluations. As
a result, we were able to successfully penetrate the North
American market.

1991
With power tools the mainstayof the Company’s business,
Makita renewed its corporate
image with the aim of evolving
into a comprehensive supplier ofall housing-related equipment,
including cordless outdoor
power equipment (OPE) andwoodworking machinery, inorder to meet the needs of awide range of customers. The
symbol and company namelogotype were all renewed toexpress the Company’s determination to move forward to­create a new Makita.

Makita’s Value Creation
7

Makita Report 2022

Revenue(Consolidated)¥739.3

Overseas and Domestic Production (Product Unit Basis)billion(FYE 2022)

FYE 2000Overseas

53.6%

FYE 2022

Domestic

46.4%

Overseas

93.0%

Domestic

7.0%

Overseas and Domestic Revenue

FYE 2000Overseas

75.8%
2005

Launched the TD130D cordless
impact driver, our first lithium-ion
battery tool

2015

100th anniversary of Makita’sfounding

FYE 2022

Domestic

24.2%

Overseas

84.0%

Domestic

16.0%

2022

Discontinued engine-powered
products

2019

Launched the Li-ion 40Vmax
series

2000-

2010-

2020-

Introduced the world’s
first professional-use
power tools powered bylithium-ion batteries

Renewing our commitment to the next 100
years on the 100th anniversary of our founding

Discontinued production of engine-powered
products to further contribute to solvingsocial issues

2005

2015

Makita was the first in the industry to launch professional cordless power tools that use
lithium-ion batteries with highenergy density. Embraced byprofessionals, the lithium-ion
batteries have realized longer
battery life and lighter weightand enabled more compact tools.

Makita reached the major milestone of 100 years in business.
We renewed our determination
to continue to evolve and growto become a company that will
endure for the next 100 years.
We continued to work on theevolution toward “a Supplier ofa Comprehensive Range of
Cordless Products” as a major
pillar of our efforts for future
growth, and by expanding ourlineup of cordless products, weare contributing to solving social
issues, including decarbonization.

History2022
In light of the growing need for cordless products that help
address concerns related to labor shortages and the environment, which have become serious social issues worldwide,
the Company terminated production of engine-powered
products in order to concentrate management resources andaccelerate the transition to cordless products.

Makita Report 2022

8

Chairman’s Message

Chairman,
Representative Director

Masahiko Goto

Striving to be a “Strong Company” byadapting to environmental changes whileleveraging the strengths of a global company

9

Makita Report 2022

Achieving sustainable growth by responding flexibly to changes in
the market environment
The future is electric. In the age of electricity, motors are

established our first full-scale overseas local production

essential—this is what our founder had in mind when heplant in the United States in 1984, following this withstarted the Company in 1915. In 1958, amid a recession

another in the U.K. in 1989. Competitiveness was greatly

and increased competition in the aftermath of the Korean

enhanced by the establishment of a plant in China in 1993,

War, the Company became the first in Japan to producewith which we established a model of producing in

portable electric planers, and in the following year it trans-

emerging countries and selling in developed countries,

formed from an electric motor company to a dedicatedand we aggressively expanded overseas production. In

manufacturer of power tools. Japan’s rapid economic

2005, Makita introduced the world’s first profession-

growth was complemented by a construction boom as theal-use cordless power tools using lithium-ion batteries.

country became more affluent, and power tools sold well.

In more recent years, with environmental issues grow-Starting with its entry into the U.S. market in 1970, whening into an important theme, we have evolved into “athe rapid pace of economic growth in Japan was begin-

Supplier of a Comprehensive Range of Cordless Products”

ning to show signs of slowing, the Company expanded itsthat includes not only cordless power tools, but also cord-sales channels overseas by leveraging its price competitive-

less outdoor power equipment (OPE) and other cordlessness. Then, as price competitiveness declined due to the

products. This continued flexibility in responding to chang-

sharp appreciation of the yen in the late 1970s and thees in the market environment has remained the jumping

emergence of the bubble economy in the 1980s, we

off point for our sustained growth.

Becoming a “Strong Company” through unstoppable globalization
Makita’s core strength is its strong overseas presence,

postings and business trips. The most difficult commu-

which it has achieved through aggressive expansion,

nication in a global company can be that between head-with production facilities in eight countries and directly

quarters and overseas. At Makita, however, due to ourmanaged sales and service offices in approximately 50

globally aware employees, we are able to understand andcountries. We have been quick to enter regional

handle overseas problems smoothly. Many of our engi-­markets, and we do not easily pull back from a market

neers and designers also have overseas experience, so

and give up. Factors other than production and sales

they can immediately understand what customers areare important for power tools and OPE. In addition tolooking for. The same is true of our factories, and thisafter-sales service, among the Company’s strengths is

globalization of our human resources is another of

its large inventory, which ensures it is always ready to

Makita’s major strengths.

meet the demands of distributors, and its logistics capa-

In the current climate, I sometimes hear people saybilities, which are always in place to respond immedi-that globalization is over, but with economies inexorably

ately to orders. If there is no follow up after a product’s

becoming more global, companies are needing to con-release, trust will disappear quickly. As our sales offices

stantly adapt. Until now, we have enjoyed a surplus ofare also service centers, we have been able to build up

goods and deflation; however, as the global population

the Makita brand as a customer- and community-­

continues to grow, a shortage of goods, resources, andoriented company by responding immediately to any

inflation is likely. In an age of surplus goods, sales powercomplaints or when repairs are needed as well as byis key. In contrast, in an age of “if you can’t make a prod-

delivering orders faster than rival manufacturers. We

uct, you can’t make a profit,” purchasing power andmaintain a large inventory because it is essential to sup-­production capability are more important than ever.

porting this kind of service system, and we believe weMakita will continue to adapt to changes in the envi-

can continuously keep inventory moving because of theronment and leverage its strengths as a global company

brand power we have developed.

in order to develop into an enduring “Strong Company.”

We are a strong global company thanks to the overseas experience of many of our managers, including
Makita Report 2022

10

President’s Message

Aiming for Sustainable Growth as a Supplier ofa Comprehensive Range of Cordless Products

FYE 2022 in Review
Sales were robust both in Japan and overseas during

each plant to diversify procurement sources, total

FYE 2022.

­production output increased significantly compared

Although stay-at-home demand boosted theCompany’s sales in the previous fiscal year, it appears towith the previous year, and the entire Company worked
together to meet demand in every region.

have settled down. On the other hand, in addition toInventories have also increased, and it is important to

the resumption of economic activities, demand for con-maintain ample supplies at each sales and service loca-

struction site use products remained strong due totion to ensure that our product deliveries are prompter

changes in lifestyles since the onset of the COVID-19

than those of other companies and to handle repairs as

pandemic, the spread of EV charging facilities, andquickly as possible as part of our customer- andincreased investment in response to environmental­community-based system. Our products are indispens-issues in recent years in such areas as eco-renovation. Inable to infrastructure development, and maintaining

addition, sales of cordless outdoor power equipment

inventories is essential to ensuring continued service in(OPE), a focus of the Company, were also strong.

times of emergency or disaster. Every one of our busi-

The fiscal year under review was affected by a short-ness decisions is based on the concept of assuring

age of goods and logistics disruptions. However, thanks

improved convenience for our customers, and this con-to the cooperation of our suppliers and the efforts of

cept, in turn, is the basis for our stocking of inventory.

Handling Shortages of Goods and Logistical Disruptions
Upcoming challenges include dealing with shortages ofmoving forward. Factories and sales companies must

goods and disruptions in logistics, which will directlybuild systems capable of coping with the delivery delays

affect competitiveness.

and other changes that are becoming the norm. ThisThe shortage of goods is likely to continue into thenormalization of shortages will transform corporate

long term. This is because the need to address environ-behaviors. We are choosing to take action because any

mental issues is creating an enormous volume of newcompany that views this as a transitory matter anddemand that will take time to resolve. In other words,

ignores change will not survive into the future. As partcompanies must respond to shortages as recurring chal-of our efforts, we have decided to establish a joint ven-

lenges, rather than as one-time events. In addition toture company specializing in semiconductor trading to

the multipolarization of the supply chain, technologicalensure the stable procurement of semiconductors.

collaboration will gain greater importance for suppliers

11

Makita Report 2022

President,
Representative Director

Munetoshi Goto

Logistical disruption is another major challenge. In

state of multipolarization to efficiently maximize out-

response, we have been promoting multipolarization

put. In response to increasing transportation costs, weby producing various models at multiple factories towill implement initiatives to improve transportation

reduce risk. We will examine and improve the current

efficiency.

Cordless OPE is the Next Pillar of Our Future Business in Addition toPower Tools, Aiming for Further Growth
Our focus on cordless OPE has also led to increased

We continued to aggressively introduce new prod-sales to professionals looking to replace engine-­

ucts, improving battery and motor performance andpowered products. Embracing environmental friendli-

promoting the switchover to cordless models. The use

ness, these professionals often require environmentallyof 40Vmax batteries has increased the number offriendly replacements for engine-powered products.

high-power cordless products that are comparable to

Makita Report 2022

12

President’s Message

engine-powered products. As a result, a positive cycle

once again we are finding that customer conveniencehas emerged in which sales of these new products areencompasses not only product performance, but thewinning good reviews that, in turn, prompt new sales.

effort required to prepare and clean said product.

Because engine-powered products require time-con-

By analyzing sales trends resulting from strong sales,suming preparation and cleanup, we have been able to

we have identified new customer requirements andcultivate demand among older consumers who choose

areas needing improvement, such as for more power,

to switch to cordless products because of their ease of

longer battery life, better in-hand balance, and lineup

use and maintenance. Moreover, the ease of use andvariety. We will aim for further growth as we build

time-saving features of our cordless OPE are attracting

OPE into the next pillar of our future business infirst-time purchasers among those for whom a lack of­addition to power tools.

access to OPE has kept them working manually. Thus,

The Road to Becoming “a Supplier of a Comprehensive Range of
Cordless Products”
Makita is well on its way to becoming ”a Supplier of aand camping applications. Products in this genre canComprehensive Range of Cordless Products.” However,also play an active role in disaster preparedness andgiven regional differences, we will first make sure that

response, so we will also consider their potential

our power tools are well-regarded by professionals insocial contributions.

all regions. For example, in emerging countries, tradi-

We will continue expanding our lineup of cordlesstional cordless power tools are not yet fully recognizedproducts while enhancing our service system tofor the improvements in usability they offer over AC

increase our market share in each region. In addition,

products with power cords. We are confident that wewhile we have been expanding our investment inwill overcome this barrier through the introduction of

growth, mainly in OPE, we intend to move to a stage

the high-power 40Vmax series. We hope to provide

where we can continue to make necessary investments

new value by proving that our products get the job

while ensuring that we reap the full benefit of said

done faster.

investments and will scrutinize our expenditures to thisOutside of our focus on OPE, our lineup of cleaners

end. In particular, we expect material and transporta-and other products used in building maintenance istion costs to continue to rise, and we will work to

steadily increasing. We also expect growth in the new

address this aspect of our business. Every effort to makegenre of outdoor use and camping gear, where require-products as small and lightweight as possible and toments can be demanding. Many such products are

reduce waste at every stage of manufacture will reduce

adapted from items originally intended for professional

not only costs, but also energy consumption and otherconstruction site use and we are pursuing productenvironmental burdens, which we believe will lead todevelopment while taking into consideration outdoor

positive results.

Promoting Sustainability Management Toward Carbon Neutrality
We have been contributing to the realization of decar-

will further promote sustainability managementbonization by replacing our products with cordless mod-throughout the Company through the Sustainability

els that generate zero emissions during use. As society

Committee, established in 2021 and which I chair, toaccelerates its movement towards decarbonization, we

speed our transition toward carbon neutrality.

13

Makita Report 2022

As a specific initiative, we have set a target to reducewith our stakeholders regarding climate change issues, wegreenhouse gas (GHG) emissions from our own businesshave endorsed the recommendations of the Task Force on

activities to virtually zero by fiscal 2040 (FYE 2041), and are

Climate-related Financial Disclosures (TCFD) and madeactively working to reduce GHG emissions. Furthermore,­disclosures. Moving forward, we intend to further

recognizing the importance of proactive communication

strengthen our environmental initiatives.

High Social Significance as a Driving Force for Becoming
a “Strong Company”
Our businesses are playing a role in solving such social

Looking forward to the next 100 years of businessissues as the realization of decarbonization, infrastruc-expansion, we believe that even if pandemics, wars, andture development, and addressing labor shortages, andthe economic turmoil they entail suddenly strike, we will

we are deeply connected with our stakeholders

be able to prevail if we maintain mobility and flexibility

through our comprehensive hands-on response. We

based on our strong relationships with our stakeholders,

believe it is essential that each employee is aware of the

including investors, suppliers, and employees.

high social significance of our businesses in order for

We will continue to strive toward sustainable growththem to feel a sense of fulfillment in their work andas a Supplier of a Comprehensive Range of Cordlessmotivated to take on the challenge of growth. Thus, we

Products and the realization of our long-term goal of

believe it is important to create an open workplace

being a “Strong Company.”

where employees can engage in lively discussions andhave their voices heard by management.

We would like to ask all of our stakeholders for theircontinued support and encouragement.

Makita Report 2022

14

Makita’s Value Creation Process

Leading the
Way with
Cordless

Comprehensive
LineupMakita’sStrengths
P. 19-20
Sales andServices
NetworkGlobalExpansion

Input

As a global supplier of a comprehensive range of tools for creating
comfortable homes and living environments, Makita provides
power tools, outdoor power equipment, and a wide range ofcordless products to contribute to affluent communities and daily
lives on a global scale. In addition, Makita is helping realize a sustainable society by working to solve environmental and othersocial issues through its business, including the development of
eco-friendly products.

Material Issues P. 17-18

Business Model P. 19-20

Financial capital• Equity attributable to ownersof the parent
¥746.3 billion• Cash and cash equivalents¥71.1 billion

Reducing
environmental
impactDevelopment

Human capital• Number of employees 20,233   Number of overseas employees  16,973   Number of female employees 

6,999

Social capital• Number of bases   Japan 127 (as of April 2022)   Overseas Approx. 50 countries• Number of countries where Makita sells
products Approx. 180

Manufacturing
capitalContribution
to affluent
communities
and daily lives

Makita’svalue chain

Sales
and
services

Production

Strengthening
the management base

• Capital expenditures ¥59.9 billion

Platform SupportingIntellectual capital• R&D costs ¥14.1 billion

Natural capital

ESG
Management Policy/• Energy usage 225,011 MWh•W ater usage 117,000 m3 (non-consolidated)(Fiscal year ended March 31, 2022)

Sustainable Growth

Makita’s Value Creation
15

Makita Report 2022

Strong Company
Long-term Target

Makita has set itself the goal of contributing to the creation of sustainable­society and consolidating a strong position in the industry worldwide as a global
supplier of a comprehensive range of tools for creating comfortable homes andliving environments, including cordless power tools, battery-operated outdoor
power equipment and pneumatic tools.

OutputSocial Challenges P. 21-24

Value for Stakeholders

Decarbonization

Society, including Customers

Plastic waste
Promoting the elimination of plastic P. 36

Air pollution

Cordless
products

Network offinely tuned
bases/Promptand stablerepairs anddistribution

Noise

Contribution tocommunities anddaily lives
Labor shortages
Frequent natural
disasters/disasterreconstruction
Occupational safety
Comfortable outdoor work

Makita•R educing environmental
impacts•B oosting work efficiency andproductivity•E arly recovery from disasters•P eace of mind during timesof disasterP. 20

Shareholders and Investors•M edium- to long-term enhancement of corporate value•R eturns to shareholders
Dividend payout ratio 
30.2%
Operating profit ratio 
12.4%
EPS 
¥238.54(Fiscal year ended March 31, 2022)

P. 49-50

Employees•W orkplaces where diverse
human resources can work with
passion and enthusiasm• I mprove employee skills
and motivation
Average length of service of female
employees 17.0 years

P. 37-40

Management
Quality Policy

P. 28-48

P. 1

Business Partners•S ustainable supply chain
through CSR procurement
P. 40

for Makita

Process

Makita Report 2022

16

Value Creation Process Explained

Material Issues

Makita has been implementing sustainability initiatives in order to grow sustainably together with­society. The Sustainability Committee was established in 2021 to support these efforts, and in 2022 wewere able to newly identify important material issues requiring special priority. We will contribute to therealization of a sustainable society, including decarbonization, by further strengthening our efforts inthis area.

Basic Policy on Sustainability

1

2

3

As a global supplier of a comprehensive range of tools for creating
comfortable homes and living
environments, Makita will focus
on solving environmental problems
and other social issues throughour main business, and work toachieve a sustainable society.

Makita aims to develop in harmony
with society, by promoting corporate
ethics and compliance, respect forhuman rights, protection of the environment, quality assurance, responsible
procurement activities, etc. In particular,
we consider carbon neutrality andother environmental problems to beissues of the highest importance.

Makita will engage in highly fair
and transparent corporate­management, thereby building
strong relationships of trust withall our stakeholders.

Sustainability Promotion
Our long-term target as a “Strong Company” is to­contribute to the creation of a sustainable society andconsolidate a strong position in the industry worldwide
as a global supplier of a comprehensive range of tools
for creating comfortable homes and living environments,
including cordless power tools, battery-operated­outdoor power equipment and pneumatic tools.
The most significant initiative we have undertaken toachieve a sustainable society is the evolution to“a Supplier of a Comprehensive Range of Cordless
Products” and the promotion of rechargeable lithium-ion
batteries. By utilizing the battery charging/discharging
and motor technologies cultivated through the development of power tools, we will promote the use ofrechargeable batteries not only in cordless power tools
but also in cordless outdoor power equipment (OPE)and a wide variety of other products. Moreover, throughour international network of sales and service bases, wehope to contribute to reducing the burden on the global
environment and improving work efficiency and productivity at work sites around the world.
Among the social issues that we have been focusing
on for many years are those pertaining to the environment. In recent years, typhoons and other wind andflood disasters have become more frequent, and theimpact of climate change on society is growing.
Decarbonization is becoming even more critical forcompanies, so we established the Sustainability
Committee in 2021 (which met three times in FYE 2022),
chaired by the President, as a structure to promote initiatives for carbon neutrality and other sustainability
issues. The Sustainability Committee deliberates on­sustainability-related policies, targets, measures, andother matters, and leads the promotion of initiatives
across the Company as a whole.

Sustainability Committee

Board of Directors
Submission of proposals
ReportSustainability Committee
Committee Chair: President
Vice Chairs:
General Manager of Quality Headquarters,
General Manager of Administration Headquarters

Material Issues
17

Makita Report 2022

Monitoring
Supervision

Committee members:
Department heads of major divisions

Material Issues and SDG Initiatives
We have identified material issues that should be prioritized from among the various social issues. Through ourbusiness, we will contribute to the achievement of the
Sustainable Development Goals (SDGs) by working toresolve challenges related to these issues.

Material Issue Identification Process
Priority material issues were identified in the following process.

1

2

3

Identification of Issues

Drafting

Material Issue Identification

Based on the evaluation itemsof ESG evaluation organizations, the SDGs, and dialogue
with shareholders and investors,
we identified material issues aswell as stakeholder expectations
and social trends.

Based on the identified issues,
current management concerns,
and the business environment,
the Sustainability Committee
Secretariat prepared a draft
outlining the Company’s­material issues.

Based on the draft prepared by
the secretariat, the Sustainability
Committee discussed anddecided on the final draft, which
was subsequently approved by
the Board of Directors.

Material Issues
Materiality

E

S

G

Specific Key Initiatives

Reducing
environmental
impact• Contribute to­decarbonization• Contribute to a resource-­
circulating society•Active development of cordless OPE to
replace engine-powered products•Utilization of renewable energy and energy
conservation•Promotion of the elimination of plastic•Battery recycling

Contribution
to affluent
communities
and daily lives• Improve work efficiency andthe productivity of field
operations• Support early recovery fromdisasters• Offer peace of mind during
times of disaster•A ctive development of cordless products•E xpansion of sales and service base­network with close ties to customers
and communities•E xpansion of logistics functions and­production capacity•M aintenance of a stable inventory that will
not run out in times of emergency

Strengthening
the managementbase• Exercise respect for humanrights• Provide for employee­training, safety, and health• Ensure compliance• Strengthen corporate­governance•E nsure thorough consideration of humanrights throughout the supply chain•D evelopment of human resources and­promotion of diversity and inclusion•E nsure employee safety and health•E nsure awareness of and ensure­compliance with laws and regulations• F urther improvement of the effectivenessof the Board of Directors

SDGs Contributions

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18

Value Creation Process Explained

Makita’s Strengths in the Value Chain

With an integrated framework covering development, production, sales, and services across a global network closely aligned with markets and consumers, we are committed to providing high-quality, attractive
products and services that satisfy our customers around the world. We will continue to evolve to createsocial value by leveraging the strengths of our value chain.

Development

Production

In 2005, Makita was a pioneer inselling professional-grade electric
power tools utilizing lithium-ion
batteries. Since then, we havelaunched a number of new cordless products that utilize our­industry-leading battery charging/discharging technologies and motor technologies. Makita is providing theindustry’s preeminent lineup of products that is the
direct result of proactive development over a broad
range of product categories, including cordless products that provide alternatives to AC products withpower cords and engine-powered products. Moreover,though the products that can be used differ dependingon the type of battery, one battery can be used with arange of our products, making high compatibility and arich product lineup one of our major product strengths.
In recent years, we have been expanding andenhancing our cordless products beyond power tools
to include outdoor power equipment (OPE); cleaning
equipment such as cordless cleaners; and products withapplications that extend beyond the worksite such as
cordless cooler & warmer boxes, kettles, lighting equipment, and radios with utility for outdoor activities andtimes of disaster when power sources are difficult tocome by.

With production bases in eight
countries (Japan, China, Romania,
Thailand, the U.K., Brazil, the U.S.,
and Germany), approximately 90%
of Makita products on a productunit basis are manufactured overseas. By maintaining production bases in major regions
around the world, we are positioned to not only
promptly address currency, disaster, geopolitical, andother risks but to quickly meet changes in demand ineach region. In recent years, we have been working toincrease production capacity in anticipation of sales
expansion and the further multipolarization of
global production.
In addition to taking advantage of the persistentingenuity of employees in our factories, we are adopting and utilizing cutting-edge technology, such as IoT
and robotics, to build a framework that can efficiently
manufacture consistently high-quality products anywhere in the world, regardless of the experience or
intuitive understanding of individual workers. As­production expands, ensuring consistent efficiency infactories and stable quality are unavoidable challenges.
By pursuing cutting-edge production technologies,
developing proprietary Makita robots tailored to our
production floors, and deploying and sharing mass
­production techniques and know-how at every factory,
we are continuing our efforts to tackle an even moreadvanced level of craftsmanship.

Strengths• Utilize industry-leading battery charging/discharging­technology and motor technologies• The most extensive lineup in the industry(Lithium-ion battery series: 674* models)• Highly compatible, one battery can be used for many
Makita products* Models for domestic use as of April 2022

Challenges and Initiatives• Develop cordless products to replace AC products withpower cords and engine-powered products• In particular, actively develop cordless OPE that contributes to decarbonization and provides the same usability asengine-powered OPE• Further expansion of the cordless product line

19

Strengths• Production bases in 8 countries• Stable quality and efficient production system that utilizes
cutting-edge technology• Shared production technology among factories, including
mass production techniques and know-how
Challenges and Initiatives• Increase production capacity in light of the further multipolarization of global production and sales expansion• Maintain and enhance production efficiency and quality

Makita’s Strengths in

Makita Report 2022

Development

Makita’s
Value Chain

Sales and Services
Makita operates 127 sales and service
bases in Japan (as of April 2022) inaddition to directly managed sales
bases in some 50 countries overseas,
allowing the execution of fine-tuned
sales and services. One of our strengths
lies in our industry-leading sales and service network
around the world, where we provide customer- and­community-based services. Moreover, each location maintains an extensive inventory of products and repair parts,
which enhances our resilience against supply chain disruptions and ensures prompt and stable provision of products
and services. We are able to contribute to efficiency andproductivity gains for customers, which helps us build trusting relationships. In addition, by using this network to gather
feedback on our products and services from customers
throughout the world, we can understand their needs andincorporate them into plans for new products and services.
In recent years, cordless OPE, which are physically larger
than power tools, have been growing worldwide, and weare now actively working to maintain and improve our services by establishing new and expanded distribution bases,
and establishing bases close to the cordless OPE market.

Strengths• Customer- and community-oriented sales structure with theindustry’s best network of sales and service bases(127 sales offices in Japan, directly managed sales offices inabout 50 countries overseas)• Extensive inventory for fast and consistent product and service
availability• Products and services planned utilizing feedback obtained
from customers worldwide
Challenges and Initiatives• Further enhancement of sales and service network• Enhancement of distribution functions in anticipation of thehandling of large products and an increase in the ­volume ofgoods to be distributed

Sales
and
services

Production

Value Offered to Society,including Customers
1

Reducing environmental impacts

Cordless OPE emits zero exhaust during use and contributes to decarbonization. Furthermore, in addition to notemitting exhaust gas or other atmospheric pollutants, they
are quieter than engine-powered equipment and havea significantly lower environmental impact.

2

Boosting work efficiency and productivity

In addition to the unique merits of cordless products—
including improving safety, convenience, and comfort forcustomers—Makita contributes to efficiency and productivity gains for customers by providing prompt and stablerepairs and logistics services leveraging our robust networkof bases.

3

Early recovery from disasters

Makita products are indispensable for building infrastructure
and play a vital role in disaster recovery. Utilizing our robust
network of bases to promptly and stably deliver cordlessproducts and services that contribute to efficiency and­productivity gains, we support early recovery from disasters.

4

Peace of mind during times of disaster

During times of emergency, batteries for cordless products
can function as backup power sources. For example, batteries used in cordless cleaners and the like can also be used
to power radios and lighting equipment. Also, with a USB
adapter, these batteries can charge smartphones and add
an extra degree of peace of mind if a disaster occurs.

the Value Chain

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20

Value Creation Process Explained

Contribution to Solving Social Challenges

We will continue contributing to the realization of a sustainable society by solving social challenges suchas environmental issues through our products and services. We will work to evolve into “a Supplier ofa Comprehensive Range of Cordless Products,” extending beyond cordless power tools to include cordlessoutdoor power equipment (OPE), and cordless cleaning and outdoor products, by continuing to expand
our range of convenient, environmentally friendly cordless products. At the same time, we will strengthen­systems for promptly and stably providing services such as repair and distribution by building a networkof sales and service bases that is finely tuned to each location around the world and will also strive to­realize decarbonization and reduce workloads in worksites worldwide.

Environment
Decarbonization
Plastic waste
Promoting the elimination of plastic
Details on P. 36

Air pollution

Cordless products

Network offinely tuned
bases/Promptand stablerepairs anddistribution

Noise
Contribution tocommunities anddaily lives
Labor shortages
Frequent natural
disasters/disasterreconstruction
Occupational safety
Comfortable outdoor work

Society21

Makita Report 2022

Cordless Products
Makita, which has grown as a manufacturer of power tools, is now­working to evolve into “a Supplier of a Comprehensive Range of Cordless
Products.” This evolution entails leveraging the battery charging/discharging as well as motor technologies we have amassed through ourpower tool development to promote the use of rechargeable batteries ina wide array of products, including OPE in addition to power tools.
Cordless products feature improved safety, convenience, and comfort forcustomers as well as zero emissions during use, low noise, and low vibrations. They also help to solve social issues, such as labor shortages in theworkplace. Among these products, cordless OPE, which we are promoting as a replacement for engine-­
powered equipment, helps realize decarbonization amid mounting awareness of
Merits of Cordless Products
climate change. The use of OPE also con• Improve work efficiency and ease of use due to absence of power cords
tributes to “Climate Action,” one of the•H elp prevent onsite accidents, for example, by eliminating such tripping
hazards as power cords
goals set by the SDGs. Going forward, we• I ncrease work efficiency in locations where it is difficult to secure
will continue contributing to the eliminaa power sourcetion of engine-powered equipment and•P roduce zero emissions, low noise, and low vibrations during use, fromswitching away from engine-powered equipment
shift to cordless products by expanding ourrange of cordless products.

Network of Finely Tuned Bases/Prompt and Stable Repairs
and Distribution
Makita has continued to expand its network of sales and service bases inlocations around the world and is working to reinforce the sales and service
system. With bases in each country and region, our large inventories of
products and parts for repairs facilitate the provision of services, including
prompt and stable repairs, and distribution in addition to sales. By developing a service system that offers prompt and stable repairs and distribution, we play an essential role in improving our customers’ workplace
efficiency and productivity as the inability to use tools due to malfunction
and the inability to acquire needed products promptly leads to work delays
and reductions in efficiency. In particular, despite restrictions on cross-border movement during the COVID-19
pandemic, Makita has been able to help local communities by delivering products and services promptly andreliably thanks to its bases in various countries and regions worldwide. As an essential business we were permitted to continue our business activities in many regions even under lockdown. Moreover, our products and­services, which are essential for affluent urban development and lifestyle development are also contributing to“sustainable cities and communities,” one of the goals of the SDGs. The expansion of our network of bases that
support activities embedded in local communities will lead to the realization of a sustainable society rightaround the world. Going forward, we will strive to further strengthen our service system, including the enhancement of distribution functions in anticipation of the handling of large products and the expansion of sales.

Makita Report 2022

22

Value Creation Process Explained

Contribution to Solving Social Challenges

By leveraging our cordless products and our network of finely tuned sales and service bases, we will­contribute to solving various social issues and grow together with society.

Environmental Contributions
We are contributing to the realization of decarbonization byreplacing conventional engine-powered OPE with cordlessproducts that emit zero emissions during use. As awareness ofenvironmental issues grows, demand for cordless OPE is
expected to increase. We are strengthening cordless OPE as
the next pillar of our future business in addition to power
tools. Making products cordless ensures no exhaust gas emission containing air pollutants, and the low noise level of such
equipment compared to the engine-powered equipment also
contributes to a lower environmental impact. Please see
pages 28–36 for details.

Aiming for Coexistence and Mutual Prosperity with Stakeholders
A Worldwide Network of Bases Supporting the Makita Brand
Reconstruction demand from the Ise Bay typhoon in 1959 was a major catalyst
for Makita’s development as a power tool manufacturer, and this instilled in us
the awareness that we must always stand in support in times of disaster. Whena disaster occurs somewhere in the world, we actively support our customers,
and when the office in charge of the disaster-stricken area reports the situation
to the Head Office, the status of support activities for our customers is includedin the report. This attitude permeates every corner of the Company. The sourceof the Makita brand is the trust we have built by standing with our partners

Portable electric planer

through difficult times. This source is supported by our network of finely tuned offices around the world.
In recent years, climate change has resulted in frequent typhoons, torrential rains, and other natural disasters thathave caused extensive damage in many parts of the world. We will always stand in support in times of disaster, and we
aim to grow together with society by staying close to our stakeholders, including our customers, and working together
to overcome difficult times, as well as by utilizing our finely tuned network of offices to quickly and stably provide products
and services useful in disaster reconstruction.

23

Makita Report 2022

Social Contributions
Through its robust network of bases, Makita contributes to communities
and daily lives around the world by selling and servicing power tools andOPE used at construction sites in approximately 180 countries. Makita’s
products are indispensable for building infrastructure and are an essential part of our contribution to affluent communities and daily lives.
Labor shortages present challenges for construction sites worldwide.
Makita’s cordless power tools are helping address labor shortages byactively replacing the AC products with power cords that were the previous norm with more efficient cordless versions. In addition to the cord-free advantages of efficiency and easeof-use, cordless products help prevent accidents in the field, such as tripping over power cords, and can beused in situations where it is difficult to secure a power source. In addition to these advantages, we offer
prompt and stable repair and logistics services that take advantage of our network of finely tuned sales andservice bases, thereby contributing to improved efficiency and productivity at worksites, which, in turn,­supports comfortable urban development and encourages early recovery from disasters, a more frequent
occurrence due to ­climate change. Our cordless products include radios, lights, and other products that are
useful in times of disaster as well as fan jackets and other products that help protect against the heat, providing
peace of mind and improving the comfort of outdoor work.

TOPICS
Disaster Preparedness Initiatives
We have installed photovoltaic panels at some locations so that we canrespond quickly and stably to customer requests for sales and repairs in
the event of earthquakes, windstorms, and flooding, frequent occurrences in recent years. We are currently installing more photovoltaic
panels, especially in domestic sales offices, and have installed photovoltaic panels in several locations in FYE 2022. By reducing greenhouse gas
emissions through the use of renewable energy, we will reduce the environmental impacts that lead todisasters, and by ensuring business
continuity in the event of a disaster,we will build a system that enables
us to provide sales and service to
our customers in times of need.
Photovoltaic panels at the Gifu branch

Makita Report 2022

24

Business Review

Market Environment
Despite earlier uncertainty in the economic climate
caused by the spread of COVID-19, demand for tools foruse on construction sites has remained strong as economic and social activities are normalizing. Moreover,
trends toward energy-saving and energy-generatingbuildings and the spread of EV recharging facilities havebeen picking up against a backdrop of rising environmental awareness in recent years, providing favorable
conditions for environmentally friendly products anddriving demand for cordless systems to replace

Fiscal Year in Review
Although demand associated with stay-at-home lifestyles, which boosted sales in FYE 2021 due to COVID19, has gradually dissipated, in FYE 2022 demand fortools for use on construction sites remained strong, andwe were able to increase sales by firmly capturing thisdemand. Sales of cordless outdoor power equipment(OPE), the Company’s main focus, were also robust, andrevenues grew 21.5% compared to FYE 2021 and 50.1%
compared to FYE 2020, reaching record highs. Productionengine-powered systems. However, the outlook remains
somewhat clouded due to the shortage of goods anddisruptions in supply chain logistics, rising prices, andthe growing global tensions centered on the Ukraine
conflict, which could cool the demand environment.
Amid this environment, we aim to achieve sustainablegrowth by evolving into “a Supplier of a Comprehensive
Range of Cordless Products” by leveraging and further
refining our strengths, including our extensive cordlessproduct lineup and finely tuned sales and service network.

output also reached a record high, and the Company
took steps to meet demand in each region.
On the profit side, although the cost-of-sales ratio
increased and the operating profit ratio decreased due
to soaring transportation costs, including ocean freightcharges, operating profit increased 3.7% compared to
FYE 2021 and 43.2% compared to FYE 2020 due toincreased revenues.

Revenue Trends by Region (FYE 2022)
Country/region

Percentage change*

Trend

Japan

+4.4%

Revenue increased 4.4% year-on-year to ¥118,050 million due to strong sales of both power tools andOPE, including lithium-ion batteries and other products.

Europe+24.7% (+17.7%)

While demand associated with stay-at-home lifestyles has slowed down, demand for tools for use on
construction sites and sales of cordless OPE remained strong, resulting in a 24.7% year-on-yearincrease in revenue to ¥352,470 million.

North America+23.4% (+15.8%)

Sales of power tools were strong due to strong housing demand, and cordless OPE sales also increased,
resulting in a 23.4% year-on-year increase in revenue to ¥112,248 million.

Asia+25.1% (+17.7%)

Despite the resurgence of COVID-19 in various countries, which affected sales activities, sales in Taiwan
and Southeast Asia were strong, resulting in a 25.1% increase in revenue from the previous year to¥49,196 million.

Central andSouth America+42.0% (+34.7%)

While inflation accelerated in many countries, sales activities to reliably capture firm tool demand
resulted in a 42.0% year-on-year increase in revenue to ¥41,765 million.

Oceania+24.9% (+14.4%)

Despite the impact of COVID-19 lockdowns in major cities, revenue amounted to ¥51,579 million, up
24.9% from the previous year due to strong demand for tools for use on construction sites.

Middle East andAfrica+20.5% (+14.3%)

Despite the continuing unstable political and economic situation, revenue increased 20.5% year-onyear to ¥13,952 million, capturing the demand for tools for use on construction sites in various countries.

Consolidated Total+21.5% (+15.5%)

Due to strong sales both in Japan and overseas, revenue increased 21.5% from the previous year to¥739,260 million, reaching a record high for the fifth consecutive year.

* Figures in parentheses are based on local currency.

25

Makita Report 2022

Future Strategies and Outlook
Expanding Our Cordless Lineup
Makita is further expanding its lineup of cordless­products in line with its goal to be “a Supplier ofa Comprehensive Range of Cordless Products.” In power
tools and OPE, we are actively replacing AC productswith power cords and engine-powered products withcordless products. In addition, we are expanding therange and applications for cordless products using
our batteries, introducing models useful not only forworksite applications but also outdoors and in times ofdisaster when it is difficult to secure power sources, suchas cooler & warmer boxes, and radios, as well as cleaning equipment such as cordless cleaners used for­building maintenance.
In particular, demand for cordless OPE is expected
to grow as the trend towards decarbonization intensifies, and we will further augment this lineup with­products that provide the same level of usability asengine-­powered products.
Increase Production and Logistics Capabilities
As we move forward as “a Supplier of a Comprehensive
Range of Cordless Products,” the need for greater production capacity and logistics capabilities has been
growing in urgency as we expect that our current capacity will be insufficient. Accordingly, in recent years, wehave been working to increase production capacity inanticipation of sales expansion and the further multipolarization of global production, to this end constructing
a new plant in China, which was completed in FYE 2022.
In addition, the completion of the logistics warehouse at
the German plant has allowed us to expand the production
space and increased production capacity.
We have also been working to strengthen distribution
in anticipation of an increase in the volume of cordless
OPE products, which are larger than regular power tools,
by establishing and expanding distribution warehouses
in various regions. In FYE 2022, we established a new
distribution center in Kazo, Saitama Prefecture, in Japan,
further improving our service capabilities. Overseas, we
also worked to strengthen our service system by establishing and expanding logistics bases in several countries.
We will continue to enhance production capacity andlogistics capabilities to ensure a system that enables us
to supply products and services to our customers
promptly and stably, thereby refining our strengths incustomer- and community-based finely tuned services
and maintaining and improving our global competitive
advantage.

Implementing Digital Transformation
With the construction of new sites and the expansion offactories, labor shortages will be an ever-present challenge. In addition to focusing on the recruitment andtraining of human resources, we are actively investing indigital transformation to improve productivity. For
example, sales offices in Japan are computerizing clericalwork, including the use of electronic storage of vouchersand paperless faxes, to improve operational efficiency
and customer response time. Also, to improve IT services
for overseas customers, we are enhancing the functionsof our specialized website for distributors to improve
convenience and operational efficiency. Furthermore,
we are building a Content Management System (CMS)
to centrally manage product-related information, thereby establishing the necessary infrastructure to improve
IT services for customers and to expand capacity in ourinternal operations.
As the risk of cyber attacks and other attacks increases, global security measures are also becoming animportant issue in implementing digital transformation.
In addition to identifying weaknesses and assessing risk
levels at each site, we are working on measures todetect cyber attacks early, prevent further illicit activity,and ensure that business can be resumed quickly even if
an attack occurs. The security team in Japan works closelywith local staff at every base to create a security systemthat does not depend on the skills of local IT staff, thereby creating a system that allows each base to maintainand improve security on a constant basis.

E.D.P. Systems Department(Head Office)
Security team

Collaboration

External
professional
contractors

Collaborationand monitoring

Local
base

Local
base

Local
base

Local
base

Makita Report 2022

26

Risks & Opportunities

Risk Management
Makita strives to identify and manage risks with a material impact on business activities, while also pursuing ourcommitment to being a company that is resilient to crises.
Makita’s Disclosure Committee, which identifies andinvestigates risks in the Group’s business activities, holds
annual meetings. These meetings are attended by representative Directors, the Director in charge, Standing
Audit & Supervisory Committee Members, and General
Managers of the Internal Audit Division and respective
departments of the Company.
Each Director exercises authority and takes responsibility for implementing the Group-wide risk management framework in their own division, and also reports
to the Board of Directors when a situation occurs that ismaterial to business management. In each d­ ivision,­regulations and guidelines are stipulated and followed

in order to carry out risk management necessary for
quality control, disaster prevention, capital ­utilization,and the like.
Amidst concern in recent years over the occurrence ofmajor earthquakes and other natural disasters, Makita
recognizes that being able to respond to disasters isa critical issue. Makita has formed a Fire & Disaster
Management Committee comprised of Directors andthe heads of relevant divisions and has formulated disasterprevention regulations with this committee at the­center. These disaster prevention regulations and othermeasures, which are reviewed regularly, define steps fordisaster prevention, emergency response measures, anddisaster recovery efforts. Similarly, these regulations andmeasures outline a business continuity plan (BCP) fortimes of disaster. The target organizations and scope of
this plan are also reviewed as necessary.

Risks & opportunities relevant to Makita
Relevant risks & opportunities
Changes tothe social climate/market environment

Details
Risk

Opportunity• Deterioration of the market environment due to worsening economic conditions, social disorder,
enactment or changes to laws and regulations, and the like• New demand accompanying environmental changes such as labor shortages andthe post-COVID-19 “new normal”

Risk• Performance deterioration due to large-scale natural disasters, such as earthquakes, floods, fires,and so on• Drastic performance deterioration due to natural disasters in Japan and/or China, where our corebusiness operations are concentrated

Opportunity• Increased demand for products and services that contribute to early recovery from natural disasters
and peace of mind in times of disasterNatural disasters

Risk• Loss of competitive strength

Global competition
Opportunity

Risk

Technology & products
Opportunity

Risk

Procurement

Makita Report 2022

• Improved brand strength due to delivering customer satisfaction• Demand creation and acquisition of growth opportunities through new products• Production shortages and rises in production material costs• Delayed launch of new product sales due to component suppliers not meeting Makita’s
requirements, or due to taking too long to meet those requirements• Improved competitive strength and profits due to stronger relationships with suppliers and/or
discovering new suppliers

Risk• Loss of major customer(s) and a corresponding loss of opportunities to unlock sales channels• Deterioration of the financial position of customer(s)Opportunity

27• Decline in new product development able to meet changing market needs• Delays in product development attuned to market prices• Large-scale recall(s) due to unforeseen product defects; damage liability lawsuit(s); major decline inbrand trustworthiness

Opportunity

Relationships withmajor customers

Environment(incl. climate change)• Improved profitability from consolidating competitive superiority• Increased sales due to stronger relationships with major customer(s)Risk• Strengthening/adoption of regulations related to global warming, climate change, and so on

Opportunity• Increased demand for environmentally friendly products that contribute to decarbonization

Environment

Initiatives for the TCFD Recommendations

As the effects of climate change on society, such as highwinds and flooding, increase in frequency and severity,
the role of companies in achieving decarbonization is
becoming more important. Accordingly, we view climatechange issues as a high-priority management challenge.
To this end, we are focusing on cordless outdoor power
equipment (OPE) that does not emit exhaust gas during
use and are actively working to reduce greenhouse gas (GHG) emissions by striving to reach the goal of virtuallyeliminating GHG emissions from our operations by fiscal 2040 (FYE 2041).
Recognizing the importance of these efforts as well as engaging in dialogue with our stakeholders regarding
the impact of climate-related risks and opportunities on our business and other activities, we endorsed the­recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) in 2021.

GovernanceIn 2021, the Company established a Sustainability
Committee, which met three times in fiscal 2021 (FYE
2022). Chaired by the President, the committee promotes Company-wide efforts to address sustainability
issues through business activities.
The committee considers climate change to be one of
the most important sustainability issues, and deliberates
on policies, measures, and plans to reduce GHG emissions.
The Sustainability Committee reports and submits
proposals on important matters to the Board of
Directors, which deliberates on these matters and makes
decisions in the course of monitoring and overseeing
the Company’s climate-related risks and opportunities.

Board of Directors
Monitoring and supervision of climate-related risks
and opportunities

Submission of proposals
ReportMonitoring
Supervision

Sustainability Committee
Committee Chair: President
Vice Chairs: General Manager of Quality Headquarters,
General Manager of Administration Headquarters
Committee members: Department heads of major divisions

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28

Environment

Strategy
1. Determining Risks and Opportunities
In identifying climate-related risks and opportunities that could affect our business, we have used climate change scenarios from the International Energy Agency (IEA), the Intergovernmental Panel on Climate Change (IPCC), and otherorganizations to organize our views into (1) a 1.5°C to 2°C worldview in which decarbonization progresses and (2) a 3°C
to 4°C worldview in which warming proceeds as it is now. The following is a summary of the results.

Global decarbonization• Tighter GHG emissions regulations, higher carbon prices

1.5–2°C• Energy conservation and energy generation in buildings, expansion ofsolar panels, and widespread use of EV charging facilities• Shift from fossil fuel to electric engines

Major drivers
affecting Makita’sbusiness

Both scenarios• Expansion of building and construction market

World continues on current path
• Increasing frequency and severity of wind and flood disasters

3–4°C• Increased preparedness and disaster awareness for wind and flood disasters• Decreased productivity of outdoor labor due to increased heat stress

Based on these worldviews, we have identified our climate-related risks and opportunities and qualitatively assessed them.
Risks
Type

Category
Large

Small

Risk
Increased operating costs based on own GHG emissions

Rising carbon price/energy conservation and
Policies and low-carbon regulations
regulations

Increased procurement costs of raw materials, energy, etc.
Increased capital expenditures to enhance energy efficiency
Increased renewable energy procurement costs

Transition

Technology

Battery regulations

Increased battery procurement costs

Product technology
developmentcompetition

Increased development costs for technologies and products with­superior environmental performance (including portability and­operational efficiency)

Competition to develop
next-generation battery
technology

Increased development costs for next-generation batteries with­superior capacity, voltage, life, safety, etc.

Relevant
periodPossibility

Short tomediumterm
Short term

Large

Medium tolong term

Short tomediumterm

Large

Increased procurement costs due to increased battery demandMarketReputation

Physical

AcuteIncreased procurement costs due to increased demand for
Changes in market prices ­semiconductors

Increased disclosure
requests
Increased frequency andseverity of wind andflood disasters

Makita Report 2022

Large

Increased transportation costs due to decarbonization of transportation

Short tomediumterm

Reputational damage due to inferiority of information disclosure­compared to other companies

Short term

MediumShort term

MediumPhysical damage to our offices and facilities
Losses due to business interruption
Losses due to supply chain disruptions

Note: Risk onset timing: Short-term: up to 3 years; Medium-term: over 3 years to 10 years; Long-term: over 10 years

29

Short termOpportunities
Category

Type

Large

Small

Energysources

Products
and services
Transition

MarketPhysicalResilience

Opportunity

Relevant period Possibility

Increased carbon prices

Decrease operating costs by reducing GHG emissions to becomecarbon neutral

Short tomedium term

Product technology­development competition

Differentiation from competitors’ products through the development of products with superior environmental performance(including portability and work efficiency)

Short term

Competition to develop
next-generation battery
technology

Differentiation from competitors’ products through the development of next-generation batteries with superior performance

Medium tolong term

Energy conservation andlow-carbon regulations

Market expansion and product demand increase due to a shift
from engine-powered to cordless products

Changes in the building
and construction market

Increase in demand for products associated with ZEB*1/ZEH*2­conversion of buildings, installation of solar power generationequipment, and EV charging facilities, etc.

Increased disclosure
requests

Improved reputation through enhanced disclosure information

Large

Large

Large
Short term
MediumRising temperatures, climate Increased demand for products in line with increased DIY demandand extreme weather
due to longer time spent at home

Short tomedium term

Increased frequency andseverity of wind and flood
disasters

Expansion of the disaster readiness market, increase in productdemand, and contribution to recovery and reconstruction in theaffected areas

Short term

Rising temperatures

Increased demand for products to improve working conditions in
hot environments

Short tomedium term

Large

Large

Note: Opportunity onset timing: Short-term: up to 3 years; Medium-term: over 3 years to 10 years; Long-term: over 10 years*1 Net Zero Energy Building   *2 Net Zero Energy House

2. Scenario Analysis and Setting Themes
We conducted scenario analyses on the following four themes that we rated as “highly important” and evaluated theirprobable impact on our business, strategy, and finances through 2050, taking into account the effect on our business
operations, relevance to our business strategy, and the level of interest of our stakeholders.
3. Results of Scenario Analyses
Theme 1 (Opportunities): Change in demand for cordless OPE due to decarbonization of OPE
Opportunities
under the theme• In the OPE sector, emission regulations are being introduced and strengthened.
• Demand for cordless OPE is expected to grow as the shift from engine-powered to cordless OPE progresses against a backdrop offurther tightening regulations and changing consumer preferences towards decarbonization.

Analysisassumptions• Calculate a baseline (as-is scenario) for market expansion based on market forecast information for the OPE sector• For the OPE sector, data for the below 2°C scenario is based on IEA scenario data* assuming a shift to EVs in the automobile sector

Analysis results• The market for cordless OPE is expected to expand under the as-is scenario due to the expansion of the OPE market, but underthe below 2°C scenario, we expect the market to expand significantly due to the shift from engine-powered to cordless systems.
• We expect sales to grow at the same rate as the market growth, and if our market share can be increased, we can expect further
sales growth.

Future opportunity • Actively develop cordless OPE that can replace engine-powered OPE
acquisition• Strengthen sales and service capabilities by expanding the sales and service network
measures• Expand logistics and production capacity in anticipation of increased OPE sales and products handled*R eference: IEA’s “Global EV Outlook 2021.” It is assumed that the shift from engine-powered to rechargeable systems in the OPE sector will progress at a slower rate than the shift
to EVs in the automobile sector.

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Environment

Theme 2 (Opportunities): Change in demand for power tools as the building and construction market expands
Opportunities
under the theme• Expansion in the global building and construction market is expected to increase demand for power tools.
• The demand for power tools is expected to increase as more energy-saving (i.e., renovation of existing buildings) and energy-­
creating (i.e., installation of photovoltaic panels) construction approaches are taken to further decarbonization, and as the­number of EV recharging facilities increases.

Analysisassumptions• Increased demand for power tools is anticipated due to a growing volume of building and construction work globally• Calculate a baseline (as-is scenario) for power tools sales based on statistics on the size of the building and construction market• The amount of energy-saving and energy-creating construction work in buildings and the installation of EV charging facilities topromote decarbonization is based on data from the building and construction industry and IEA scenario data (below 2°C scenario)

Analysis results• Sales of power tools are expected to grow under the as-is scenario, but are expected to expand significantly under the below 2°C
scenario due to an increase in the amount of energy-saving and energy-creating construction work and installation of EV
charging facilities.
• Among them, cordless power tools with excellent work efficiency are expected to see increased use in the building and­construction market.

• Develop power tools based on market trends, in particular, proactively develop cordless power tools that contribute to reducing
Future opportunity
environmental impact by improving work efficiency
acquisition• Strengthen sales and service capabilities by expanding the sales and service network
measures• Expand logistics functions and production capacity in anticipation of sales growth

Theme 3 (Risks): R isks associated with lithium-ion batteries (procurement costs, rise of next-generation batteries withhigher performance)
Risks under
the theme• The growing demand for lithium-ion batteries (LiB) in the automotive and energy industries is expected to lead to fluctuations in
LiB procurement costs.
• The competitive environment is expected to change with the emergence of high-performance next-generation batteries.

Analysisassumptions• Calculate a baseline (as-is scenario) of LiB unit price with reference to the market forecast information on LiB unit prices• Based on historical data on LiB raw material costs (lithium, nickel, and cobalt), set raw material costs that will soar if demand for
LiB increases (below 2°C scenario)

Analysis results• Under both the as-is scenario and the below 2°C scenario, LiB unit prices are expected to decline over the medium to long termagainst a backdrop of planned production increases by battery and materials manufacturers. If the supply-demand balance of LiB
raw materials is disrupted by greater than expected demand for EVs and storage batteries, etc., LiB unit prices may soar, but thelong-term impact is expected to be negligible.
• Although it is difficult to predict the market for next-generation batteries, we expect the competitive environment to change overthe medium to long term as next-generation batteries become more widespread and emerge in our product areas as a result of
the traction of the EV market.

Future risk
countermeasures• Build long-term relationships with battery suppliers• Research and development for the launch of products using next-generation batteries

Theme 4 (Risks): Risk of increased operating costs due to higher carbon prices
Risks under
the theme• Operating costs are expected to increase due to the introduction of carbon pricing such as carbon taxes and emissions trading
schemes as well as increases in carbon prices.

Analysisassumptions• Establish long-term GHG emission reduction pathways based on GHG emission reduction plans toward carbon neutrality and IEA
scenario data, etc.
• Establish costs for GHG emission reduction measures, etc.
• Estimate future carbon prices based on IEA scenario data and compare to the above measure costs

Analysis results• The cost of actively reducing GHG emissions, including the use of renewable energy, will be less expensive than the carbon pricebased on GHG emissions if GHG emission reduction measures are not actively pursued.

Future risk
countermeasures• Procure renewable energy electricity, and introduce and expand solar power generation for own consumption• Further improve energy efficiency of business activities• Promote commercial-use EVs

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Makita Report 2022

4. Future Policies and Initiatives
We have qualitatively and quantitatively assessed and understood the impact of climate change on our business operations, strategy, and finances and have confirmed not only that our products are financially resilient to climate change as
they contribute to climate change mitigation and adaptation but that our business strategy is feasible and sustainable.
Among our products, we believe that our cordless products, which feature safety, convenience, improved comfort,and zero emissions during use, will play a particularly important role in contributing to climate change mitigation andadaptation. In addition, although not included in the previous section (3. Results of scenario analyses), under the as-is scenario, in which wind and flood disasters are expected to become more frequent and severe, it is important to ensure a
prompt and stable supply of cordless products so that recovery and reconstruction efforts in the affected areas are supported, and we will continue to build a system to achieve this. We will continue to contribute to society and work toachieve sustainable growth by promoting initiatives to become “a Supplier of a Comprehensive Range of Cordless
Products.”
5. Plans for the Transition to Decarbonization
In 2005, we were the first in the industry to market professional cordless power tools that use lithium-ion batteries, andwe have since been strategically transitioning from traditional products to cordless products. In addition, the Company
has now set a goal of reducing GHG emissions from its operations to virtually zero by fiscal 2040 (FYE 2041), and isactively working toward this end.
We are aiming to ensure and improve the effectiveness of these mitigation measures. We will set relevant indicatorsand targets, and we will supervise our performance, progress and achievement under them in line with climate change
governance. In addition, the transition plan will be regularly reviewed and updated. We will also strategically work to
capture and maximize opportunities for decarbonization in our transition plan.

Overview of the Transition Plan to Achieve the 1.5°C Target

Climate change
mitigation

Reducing GHG
emissions• Achieve virtually zero GHG emissions (Scope 1 and 2) by fiscal 2040 (FYE 2041)• Medium-term target: 50% reduction from fiscal 2020 (FYE 2021) levels by fiscal 2030 (FYE 2031)

Elimination of enginepowered equipment• Increase the OPE electrification ratio (fiscal 2021 (FYE 2022) result: 90.9%)

Capture and maximize opportunities

Strategic implementation of the following measures based on the results of scenario analyses• Active development of cordless products (including cordless power tools and OPE)
• Expansion of sales and service network• Expansion of logistics functions and production capacity in anticipation of sales growth

Risk Management
We hold annual Disclosure Committee meetings to identify and scrutinize risks in our business activities as well as toevaluate and manage risks related to climate change. The details of climate change risks and opportunities are assessed
and managed under the Sustainability Committee.
Recognizing that climate change is one of the most important external environmental risks we face, the Board of
Directors discusses the impact of climate change on management and determines management strategies and­measures that will contribute to decarbonization.
We will further strengthen our climate change response by solidifying our systems and operations for managing theseclimate-related risks.

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32

Environment

Indicators and Targets
Targets related to GHG Emissions
The Makita Group has set goals to reduce GHG emissions from its own business activities (Scope 1 and 2) to virtually zeroby fiscal 2040 (FYE 2041) and from its entire supply chain (Scope 3) to virtually zero by fiscal 2050 (FYE 2051). The­mid-term target for Scope 1 and 2 is to halve the fiscal 2020 (FYE 2021) level by fiscal 2030 (FYE 2031).
Targets and results related to GHG emissions (t-CO₂)
Fiscal 2020
(FYE 2021) results

Fiscal 2030
(FYE 2031) targets

Fiscal 2040
(FYE 2041) targets

Scope 1, 2

89,673

44,836

Virtually zero

Scope 3

6,006,569——

Fiscal 2050
(FYE 2051) targets

Virtually zeroNote: Please see page 34 for GHG emissions in fiscal 2021 (FYE 2022).

To achieve the above goals, we will steadily implement initiatives to reduce GHG emissions through the use of renewableenergy and other means.
Indicators for the electrification of OPE
As described in the scenario analysis for “Theme 1 (Opportunities): Change in demand for cordless OPE due to decarbonization of OPE,” the transition from engine-powered to cordless OPE is progressing in line with progress toward a decarbonized society. We have set the electrification (elimination of engine-powered equipment) ratio as an indicator and are
striving to increase this ratio. In addition, Makita has discontinued production of all engine-powered products,­including OPE.
Indicators and results related to the electrification ratio* of OPE
Fiscal 2018
(FYE 2019) results

Fiscal 2019
(FYE 2020) results
80.6%

Fiscal 2020
(FYE 2021) results
86.1%

Fiscal 2021
(FYE 2022) results
88.5%

90.9%

* Based on sales volume, including both AC products with power cords and cordless products

We will continue to promote the proactive development of cordless OPE that can replace engine-powered OPE in order
to contribute to solving environmental problems, particularly climate change issues.

Environmental Initiatives
We promote environmental management with the aim of achieving both environmental protection andsustainable business growth. We have been actively engaged in environmental protection activities basedon the principles and aims set forth in our Environmental Policy, established in 1998. We will further
strengthen our efforts by positioning contributing to decarbonization and a resource-circulating society
as our new material issues.
For more information on our environmental initiatives, please visit the Makita website and read the Environmental Report.

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Makita Report 2022

Environmental Vision
The “Go Green” slogan symbolizes Makita’s commitment to continually providing new value as a comprehensive international supplier of tools. We hope to always remain as a company that maintains
a steady eye on society, challenging ourselves to create a “sustainable recycling-oriented society” that
harmonizes the environment with the economy.

Environmental Policy
Basic Principles

Policies

As a global supplier of a comprehensive range of tools
for creating comfortable homes and living environments,
Makita is aiming to conduct a wide range of environmental protection activities, in order to contribute to having
sustainable society and conservation of biodiversity.

1. E
 nforcement of environmental administrative structure
2. C ontinuous improvement and pollution
prevention

3. Compliance with applicable laws and regulations
4. E
 stablishment and review
of objectives and aims
5. R
 eduction of environmental burden
6. Disclosure

Please see the Makita website for the full text of our policies.

Environmental Management
Makita has established and run its own environmental management system since 1998. For the purpose of leveraging
that system as a tool for mitigating environmental burdens, our Head Office and Okazaki Plant first received ISO 14001
certification in 2007. In later years, our Nisshin Office and all of our overseas production bases received the certification
and are now operating environmental management systems. We promote the protection of the environment at all ofour business bases mentioned above and carry out activities, such as Internal Environmental Audits and environmental
education, based on the requirements of the certification.

GHG Emissions (Scope 1, 2, 3) (FYE 2022)

Contributions to Decarbonization
Toward the realization of decarbonization, we aredeveloping products that contribute to solving environmental problems and promoting environmentallyfriendly business activities. In addition, we have set
reduction targets for greenhouse gas (GHG) emissions reduction. Please see page 33 for details.

Scope 1 

(0.3%)

Scope 2 

(0.8%)

Scope 3 

7.34
million t-CO₂(98.9%)

Category 1 (32.6%)

Category 4 (23.0%)

Category 11  (39.9%)C ategories 2, 3, 5,
6, 7, 12

(3.4%)

Notes: 1. Of the 15 categories in Scope 3, categories 8, 9, 10, 13, 14, and 15 have been
excluded from calculation.
2. The figures in parentheses above are percentages of the total of Scope 1
through 3, with 7.34 million t-CO2 as the denominator.

Initiatives in Our Business Activities
To reduce GHG emissions in our business activities, we are actively utilizing renewable energy and conserving energy
where possible. In addition, to raise environmental awareness among employees, we conduct educational activities,
including distributing energy-saving promotional materials to employees and making regular inspections to check­energy-saving responses undertaken at offices and plants.

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34

Environment

Utilization of Renewable Energy
We are working to reduce GHG emissions throughsuch measures as installing photovoltaic panels.
Overseas, photovoltaic panels have been installed atseveral locations, including in Italy. In Japan, photovoltaic panels were newly installed at several sales
offices during FYE 2022. We plan to continue installing photovoltaic panels at our facilities in Japan andoverseas and to switch to renewable energy sources
for electricity used at our offices and other facilities.
In addition to photovoltaic panels, some sites inGermany and other countries have installed geothermal heating and cooling systems and are working to reduce GHG emissions through the use ofrenewable energy.

We will continue to focus our management resourceson the development, production, and sale of cordlessproducts and accelerate the transition from engine-­
powered to cordless products with equivalent­performance, thereby contributing to the realizationof decarbonization.

Contributions to a
Resource-Circulating Society
Photovoltaic panels at theKagoshima sales office

Photovoltaic panels at the Mobara
sales office

Energy Conservation
Our efforts toward reducing GHG emissions include
pursuing efficiency gains for energy-consuming
equipment in our offices by, for example, installing
LED lighting and high-efficiency equipment (ACunits, compressors, manufacturing machinery, etc.).
In FYE 2022, the total annual power consumption of
our Head Office, Okazaki Plant, and Nisshin Officedecreased by 221,877 kWh compared to the previous year by switching to LED tubes, upgrading AC
units, and improving compressor efficiency.

Makita is committed to using limited resources effectively
and contributing to the realization of a resource-­
circulating society.
Battery Recycling
As “a Supplier of a Comprehensive Range of Cordless
Products” and as a company that supplies a large ­volume
of batteries, we believe that, for the sake of environmental protection and the effective utilization of resources,
collecting used batteries is a crucial task. By building andimplementing collection systems in a host of countries
and regions in accordance with local laws and regulations,
we are working to promote resource recycling.

Initiatives in Japan
Contributions through Our Products
Since Makita brought to market the world’s first­professional-use power tools employing lithium-ion batteries in 2005, we have been expanding our lineup of
cordless products and, in recent years, actively replacing
engine-powered products with cordless models, especially in OPE, where engine-power is mainstream.
Reflecting increased awareness of such environmental
issues as climate change, the impact of exhaust fromengine-powered tools has become a major issue.
Because Makita’s cordless OPE, which emits no exhaustgas during use, contributes significantly to the realization of decarbonization, we are focusing on this as ournext pillar of business in addition to power tools. To­further this goal, we terminated the production ofengine-powered products.

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Makita Report 2022

We are a member of the Japan Portable
Rechargeable Battery Recycling Center (JBRC) and,based on the Act on the Promotion of Effective
Utilization of Resources, have registered our Head
Office and domestic sales offices as collection points.
Battery Collection in Japan

Users
Depositusedbatteries

Makitacollection
point

Retailers

Recycler
JBRC
collects
batteries

Switch from plastic to paper bags

Initiatives in Germany
In Germany, battery manufacturers and the German
Electro and Digital Industry Association (ZVEI) established the non-profit Stiftung GRS Batterien in 1998,
which operates the joint battery collection systemused by Makita.
In December 2021, Stiftung GRS Batterien and
Makita Werkzeug GmbH (Germany) signed anindustry agreement in the power tools sector. The
two are currently working to increase the collection
rate of used lithium-ion batteries and promote recycling by installing collection boxes exclusively forlithium-ion batteries at home centers and otherpower tools retailers.

Promoting the Elimination of Plastic
Due to concern about global environmental pollution in
the form of plastic waste in the oceans and amid social
efforts to reduce single-use plastics usage, we are working to cut back on the volume of single-use plastics in
our product packaging and thereby contribute to therealization of a sustainable society and the preservationof biodiversity. In addition to our existing efforts to simplify packaging, from FYE 2021, we have been reducing
the use of plastic bags by devising internal materials andswitching to environmentally friendly materials such as
paper and biomass plastic bags. In FYE 2022, we willswitch from plastic bags to biomass plastic bags, anddomestic factories have gradually started switching tothese materials from in July 2021. Overseas plants havealso been progressively switching to biomass plastic
bags, and the equivalent of 220 tons of plastic per year
has been converted into biomass plastic bags. We plan
to further promote the elimination of plastic in the future.

Suspension of plastic bags (devising internal materials)

Grip with plastic bag

Elimination of plastic bags bydevising internal materials

Hook and bit sets

Environmentally Friendly Design
Our approach to environmentally friendly products
began with an assessment of our products in 1992. In
1993, we created Makita's Global Environment Charter,and the active development of environmentally friendly
products began.
When designing new products, we focus on improving energy efficiency, reducing weight, and extending
service life. We also check to see if the materials used ineach part of our products are recyclable and, more often
than required by the specifications of our internal regulations, opt for materials that are environmentallyfriendly. In this way, we are continuously developing
tools that can be recycled.

TOPICSWe are actively involved in reducing our environmental impact and are also working with local
authorities. We plan to reform and improve thework style of the forestry industry through collaboration between local authorities, which aim for forestry that does not bring excess CO2 and is friendly
to the forest environment, and Makita, which aims
to replace engine-powered with cordless products.
By working together with the public and private
sectors to solve social issues, we will steadily
advance our efforts to realize a sustainable society.

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36

Stakeholder Relations

Makita is committed to growing with society by actively promoting diversity and inclusion and fostering
human resources who will lead the future, as well as fulfilling its responsibilities as a global company byensuring respect for human rights, implementing CSR procurement, and dialogue with shareholders
and investors.

Stakeholder Relations
Respect for Human Rights
The Guideline to the Code of Ethics for Makita, which
outlines the conduct expected of all Group Directors andemployees, clearly recognizes “respect for human rights”
and stipulates the importance of respecting all fundamental human rights and prohibiting discrimination andconduct that harms individual dignity. All employees,
including part-time employees, are provided with information and training about the Guideline to the Code of
Ethics once a year without fail. This also covers overseas

subsidiaries and we thoroughly emphasize respect forhuman rights across the entire Group.
Furthermore, since we believe that it is important tofulfill our social responsibility for recognizing humanrights not just ourselves but alongside all of the businesses in our supply chain, the Guideline to the Code of
Ethics for Makita also stipulates that fulfillment of social
responsibility and respect for human rights (including
working to eliminate child labor and forced labor) areselection c­ riteria for business partners.

Employee Relations
Fostering Human Resources
What supports our growth is nothing other than the talents of the people working at Makita. “Don’t be angry,
arrogant, panic, mope, or give up.” These are the wordsof Jujiro Goto, who along with founder Mosaburo
Makita built this company and transformed it into“a power tools corporation.” Grounded in this personalphilosophy of Mr. Goto, we strive to provide each andevery Makita employee with the opportunity to exercise
his or her talents.
Inside Japan, we carry out stratified training (tailoredto match each employee’s career stage) for new employees all the way through mid-career management candidates. Similarly, we maintain programs encompassing
other forms of training, including on-site factory training, as well as correspondence training, part of which ispaid for by the Company. Some promotion andadvancement evaluations entail management-related
training, such as interview exercises with subordinates,
to measure and provide feedback on the individual’s
management skills, thereby helping to improve management and leadership skills. In addition, employees

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Makita Report 2022

regularly set targets at the beginning of each fiscal year
and meet with their supervisors at least twice a year to
discuss these targets and results. We are committed tohuman resource development and provide feedback to
employees as appropriate during interviews and givethem opportunities to discuss the future with theirsupervisors. Base salaries are determined by the previous
year’s evaluations and bonuses (twice yearly) fluctuate
according to semiannual evaluations and Company­performance in order to motivate employees.
Human Resources Capable of Being Active Globally
Because being able to field human resources capable ofworking on the global stage is key to Makita’s successful
business engagement around the world, we proactively
provide opportunities for young employees to be stationed at overseas locations. Such postings include overseas operation training, which allows young employees
to acquire skills through on-the-job training. Employees
can grow significantly by working in management environments that offer challenges different to those foundin Japan.

Education System Diagram
Education byjob category

Environmental and safety & health education

Education concerning the Code of Ethics and compliance

Career plan training
Factory training

Sales training

Training for new
employees

2nd year of
employment
1st year of
employment

Grading exam

All

Overseas operation training

SupportCorrespondence education (self-development courses related to languages, business skills, specialized fields, etc.)

CommonEducation for trainers/
promotion exam evaluators

Training for newly appointed supervisors

Exam for promotion

GeneralTraining for management leaders

ManageBasic

Education by level

Coaching training

Exam forgrading/promotion

Cross-industrial
exchange training

Job type

Human Resource Development at the China Plant
Makita is actively engaged in human resource development at our China plant, the core of our production
base. We encourage continuous growth through proactive training at all levels, including leadership development and problem-solving training for managers. In
addition, safety training and legal and regulatory training are provided to those above a certain rank, andJapanese language study sessions are held for those
who plan to go to Japan for training or those who wish
to receive Japanese language training.
Human Resource Education System at the China Plant
Training for each level

GeneralemployeesNew
employeesNew
employeetrainingTeam
leader,Assistantteam
leaderAssistantmanager

Sectionmanager

SeniormanagerTraining for each roleOn-the-job
training

Legal and regulatory training
Safety training
Japanese language study sessions

Diversity & Inclusion Promotion
Makita believes in the value of a company being a place
where all employees, regardless of age, gender, nationality, or disability, hold each other in mutual respect, andare able to maximize their individual abilities in order tofully and actively contribute. Therefore, we strive for fairness in hiring, assignments, promotions, and otheraspects of human resource management, eliminating distinctions based on gender or otherattributes. In the Guideline to the Code of Ethics
for Makita, which serves as a code of ­conduct
for all Officers and employees of the Makita
Group, we are working to ensure diverse
human resources are able to actively contribute.
Our statement declaring respect for individual
diversity is but one example of this commitment.

employees in Japan is now roughly the same as that ofits male employees. At present, the Makita Group has
more than 200 women in management positions actively
supporting our global business in many divisions.
Currently, we are working to increase the number offemale managers in Japan, and our general business

Increasing Presence of Female Employees
Makita is dedicated to establishing a work environment in which female employees can actively
participate with peace of mind. As a result, theemployment longevity of female Makita

Makita Report 2022

38

Stakeholder Relations

owner action plan based on the Act to Promote Women’sParticipation includes the following specific initiatives.

Medium- to Long-term Initiatives for the Future
Encourage women to apply for examinations
for promotion to the supervisory level,a s­ tepping stone to the managerial levelEncourage women to attend mid-career­planning seminars
Actively recruit women for new graduate andmid-career positions

Average Employment Longevity (Domestic) (FYE 2022)
Male employees

System Users (FYE 2022)
Childcare leave programChildcare reducedworking-hours system

54 people (including 9 men)
100% of employees return towork after childcare leave

51 people (including 1 man)

Hiring of Non-Japanese Employees
Approximately 80% of Makita Group employees are
hired overseas and we also recruit international students
in Japan to diversify our human resources. In addition, as
a company that emphasizes a local, on-site business­philosophy, we have, for many years, placed weight on
having diverse employees who can help localize ourbusiness practices. Evidence of this philosophy in action
can be found in the value placed on the contributions of
non-Japanese employees, including four employees ofoverseas subsidiaries promoted to Corporate Officer
positions at Makita Corporation as of July 2022.

Female employees

16.8 years

17.0 years

Percentage of Non-Japanese Corporate Officers

Ensuring Employee-friendly Workplaces

To ensure diverse employees are able to pursue their workwith a sense of purpose, we offer a childcare leave program,a childcare reduced-working-hours system, and other programs as part of our active efforts to improve the work environment. The number of men using the childcare leave
program has been increasing in recent years.

Securing the Safety and Healthof Employees
Ensuring the safety and health of employees is also key
to sustainable growth. We are implementing a variety of
initiatives to ensure both sustainable growth and thesafety and health of our employees.
Safety and Health Activities
Safety and Health Committee activities are conducted ateach business site in Japan and are based on a safety planthat is developed annually. Safety patrols of the working
environment as well as hazard prediction activities* and“Hiyari-Hatto” (near-miss) activities are conducted ateach workplace and reported to the committee withrecommendations for improvement, thereby creatinga safer and more secure workplace. There were 36 occupational accidents in Japan in FYE 2022, of which 4
required 4 or more days of absence from work. We will
strive to prevent occupational accidents by providing

39

Makita Report 2022N
 on-Japanese
4 people (21%)

21%J apanese
15 people (79%)

thorough health and safety ­training and taking measures
to reduce hazards in the workplace.
* Activities aimed at preventing occupational accidents by identifying potential hazards in specific workplace tasks and identifying the types of hazards that could
cause workplace accidents, and then eliminating unsafe employee behavior andunsafe work environments.

Mental and Physical Health Support
In Japan, we are making Company-wide efforts toensure the mental and physical health of our employees
by conducting stress checks, interviewing employees
who work long hours, and providing in-house influenza
vaccinations. In addition, we distribute fan jackets andhave installed water dispensers at the Okazaki Plant asa measure against overheating. As for stress checks,
results are analyzed by workplace and industrial physicians provide feedback to the person in charge of eachdepartment to encourage workplace improvements. We
are striving to improve mental health through a series of
workplace improvements.

Preventing COVID-19
As preventive countermeasures against COVID-19 inJapan, we require each employee to check their temperature every morning, wash their hands frequently,
wear a mask from the time they leave home in themorning to when they leave work in the evening, maintain social distancing in the workplace, and ensure regular ventilation. If an employee develops a fever, cough,or other signs of feeling unwell, we ask that they refrainfrom coming to work and we increase ventilation andsanitize shared spaces. In addition, we also administeredworkplace COVID-19 vaccinations. We will continue­trying to ensure the safety and health of customers,
employees, and their families as we maintain our business activities and take ample measures to prevent the
spread of infections.

Business Partner Relations
CSR Procurement
Makita is striving Company-wide to deliver safe,
high-quality products to our customers to ensure thatthey can enjoy peace-of-mind when using our tools.
In working to achieve this objective, we consider it
important not just to comply with relevant laws and regulations but to conduct transactions with business partners fairly, equitably, transparently, and honestly and to
strive to build relationships with them as partners aswell as to promote procurement activities focusing onsocial concerns, including the environment, humanrights, corruption prevention, and proper hiring practices. We stipulate this in our Master Transaction
Agreement and Basic Policy on Procurement.
One pillar of this effort is our pursuit of responsible
procurement activities, including annual surveys of theenvironmental protection activities of our business partners, such as monitoring environmental systems acquisition.

Basic Policy on Procurement
1. Compliance with laws and regulations andsocial codes
2. Consideration to reducing environmental impacts
3. Provision of fair and equitable transaction
opportunities
4. C oexistence and co-prosperity based on
mutual trust

Please see the Company website for details.

Shareholder and Investor Relations
Dialogue with Shareholders and Investors
The Director, Corporate Officer, and General Manager of
Administration Headquarters has general oversight overdialogue with shareholders and investors. The IR department and the finance, legal, and internal audit departments
collaborate with each other, reviewing and sharing disclosure information and preparing disclosure materials,
to facilitate constructive dialogue with shareholders.
In addition to individual dialogue with shareholders
and investors, we hold a briefing session for each quarter’s financial results. Twice a year (at the end of theinterim period and at the end of the fiscal year), thepresident gives a presentation, with presentation materials published on our website. The ratio of shares held
by foreign institutions and individuals is over 30%, so
the Company actively discloses information in English,
including its financial statements, timely disclosure documents, notices of convocation of the general meetingof shareholders, materials for financial results briefings,
Corporate Governance Reports, and Company publications (corporate profile, integrated reports, and environmental reports). The Company also translates major
items (consolidated financial statements and notes,
business risks, etc.) from its annual securities report.
In FYE 2022, in addition to quarterly financial results
briefings, management held 31 meetings with shareholders and investors. In addition to this, we actively
engaged in dialogue with shareholders and investors
through individual meetings with IR staff and participation in conferences sponsored by securities firms. Also,
we analyzed the exercise of voting rights at shareholders’meetings and provided necessary feedback to management on the opinions of shareholders and investors
obtained through dialogue to ensure sustainablegrowth and enhance corporate value over the medium
to long term.

Makita Report 2022

40

Systems to Support Enhancement of Corporate Value—
Corporate Governance

Makita strives to strengthen and enhance corporate governance in order to increase corporate value andearn the trust of shareholders and other stakeholders.

Basic Philosophy on Corporate Governance
Makita believes that the most important issue is to achieve unending development together with its various stakeholders. In order to achieve this, we have established a Management Policy/Quality Policy and are working to strengthen
and enhance our corporate governance. From this perspective, we will work to maintain and improve the fairness andtransparency of our management by striving to enhance management transparency and management checking­functions as well as to proactively and promptly disclosing information.

Steps Taken to Strengthen Corporate Governance
2005

June
Appointed Outside Directors

2006

June
Discontinued retirement
allowance plan for Directors
and Audit & Supervisory
Board Members

2009
2011

2015

June
• Increased the number of Outside Directors• Introduced stock-compensation-type stock option( Discontinued with the introduction of a restricted share compensation system
in June 2019)

June
Introduced the Corporate
Officer system

2019

June
Introduced a restricted share compensation system

2020

DecemberEstablished the Nomination and Compensation Committee

2021

June
• Transitioned to a Company with an Audit & Supervisory Committee• Increased the number and ratio of Outside Directors

June
Appointed two non-JapaneseCorporate Officers( One third of Directors are Outside Directors)

Schematic Diagram of Makita’s Corporate Governance Structure (as of June 28, 2022)
General Meeting of Shareholders
Appointment/Dismissal

Nomination
andCompensation
Committee

Consultation/
Delegation
AdviceMonitoring/
Supervision

Appointment/Dismissal

Board ofDirectors
Directors(Excluding Directors who are Audit &Supervisory Committee Members)

Submissionof Proposals/
ReportAudit/
Supervision

Appointment/Dismissal/
Supervision

President(Promoting Carbon Neutrality, etc.)

Corporate
Officers

Corporate
Officer, General
Manager of
Administration
Headquarters

Audit & Supervisory
Committee

Collaboration
Accounting Auditor

Directors who are Audit &Supervisory Committee Members
Support

Audit

Audit & Supervisory Committee
Staff Office

ChairmanSustainability Committee

Appointment/
Dismissal

ReportDisclosure Committee

ReportInternal Audit Division

Audit
Accounting Audit

Corporate Divisions
Group Companies

41

Makita Report 2022

Internal Control Audit

Principal Organizational Structures
Chairman/Committee Chairs

Members

Internal Directors Outside Directors

Meetings held
in FYE 2022

Board of Directors

Masahiko Goto (Chairman, Representative Director)

15

10

5

12

Nomination andCompensation Committee

Masahiro Sugino (Outside Director)

5

2

3

5

Audit & Supervisory
Committee

Mitsuhiko Wakayama (Director, Standing Audit &Supervisory Committee Member)

4

1

3

14*

* Includes the number of Audit & Supervisory Board meetings held prior to the transition to a Company with an Audit & Supervisory Committee.

Proportion of Outside Directors in Each OrganizationI nternalO utside

Nomination andCompensation
Committee

Board of Directors

33%

Audit & Supervisory
Committee

75%

60%

Skills Matrix

Name

Nomination
andIndependent
Corporate
Compensation
management
Committee

Expertise
Overseas
experience

Sales/
marketing

Production/IT/
Development procurement/ Sustainability
digitalization
quality

Finance &accounting

Legalaffairs

Masahiko
Goto
Munetoshi
Goto
Shinichiro
TomitaTetsuhisa
KanekoTomoyuki
Ota
TakashiTsuchiya
Masaki
YoshidaTakashi
Omote
Yukihiro
Otsu
Masahiro
SuginoCommittee
Chair

Takahiro
Iwase
Mitsuhiko
Wakayama
Akira
Kodama
Shoji
Inoue
Koji
Nishikawa

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Systems to Support Enhancement of Corporate Value—Corporate Governance

Overview of the Corporate Governance
Structure
Board of Directors
A regular meeting of the Board of Directors shall be held
once a month and extraordinary meetings shall be held
whenever necessary. The Board of Directors, as the­decision-making body for management, decides onimportant management matters, including decisions on
management policies and business plans, the conclusionof important agreements, and the establishment of­subsidiaries in accordance with the Regulations of theBoard of Directors, in addition to matters stipulated bylaws and regulations and the Articles of Incorporation,and supervises the execution of operations. Outside
Directors are appointed from among those who havea wealth of experience and broad insight in corporate
management and those who have a wealth of experience and insight in various fields, including finance,accounting and legal affairs, and are responsible forstrengthening corporate governance by providing opinions as appropriate from an independent perspectivewith no risk of conflict of interest with general shareholders. Additionally, Makita has hired several Directors
with abundant business experience at overseas bases,
which adds diversity to the Company.
Nomination and Compensation Committee
In consultation with the Board of Directors, theNomination and Compensation Committee carries out
tasks such as deliberating and advising on policies concerning the nomination of Representative Directors andDirectors,* matters concerning the appointment ofRepresentative Directors and Directors,* matters concerning the succession plan for the President, policies
concerning decisions on the details of individual compensation for the Directors,* and, based on delegationfrom the Board of Directors, makes decisions on thedetails of individual compensation for the Directors.** And etc., excluding Directors who are Audit & Supervisory Committee Members

Main Deliberations in FYE 2022

Nomination and compensation policies for Officers
Determination of individual compensation
Officers appointments
Succession planning for the President

Audit & Supervisory Committee
The Audit & Supervisory Committee meets once amonth and also holds extraordinary meetings as necessary. The Audit & Supervisory Committee audits and43

Makita Report 2022

supervises the execution of duties by the Directors, andinvestigates the status of business and assets by attending
important meetings and hearing reports in accordancewith its stipulated audit policies and division of duties. The
Audit & Supervisory Committee also appropriately exercises
its right to express opinions on the nomination and compensation of Directors (excluding Directors who are Audit &Supervisory Committee Members). With the objective ofensuring the smooth execution of audits by the Audit &Supervisory Committee, Makita established the Audit &Supervisory Committee Staff Office, comprising dedicatedsupport personnel.
In order to strengthen the effectiveness of audit andsupervisory functions, two standing Audit & Supervisory
Committee Members have been appointed. Three
Outside Directors who are members of the Audit &Supervisory Committee have been appointed, and theOutside Director who is a standing Audit & Supervisory
Committee Member has many years of experience infinancial institutions and expert knowledge of finance.
The two Outside Directors who are non-standing Audit& Supervisory Committee Members have many years ofexperience and expert knowledge as an attorney-at-law
and a certified public accountant respectively. Makita
considers these individuals capable of performing highly
specialized audits from an independent perspective.
Corporate Officers
We have introduced a Corporate Officer system to facilitate the proper implementation of the Group’s strategy
and strengthen our business execution structure, andwe are striving to engage in flexible and efficient­business operations. As of July 2022, Makita has 19
Corporate Officers, and four of these Corporate Officers
are non-Japanese.
Three-Way Auditing System
The Audit & Supervisory Committee, the Internal Audit
Division, and the Accounting Auditor collaborate,exchanging information and opinions as necessary. The
Audit & Supervisory Committee meets regularly with the
Accounting Auditor to receive reports and explanationsof audits and review results, as well as to exchange
information and opinions. In addition, the Audit &Supervisory Committee itself conducts audits of theCompany, including its subsidiaries, cooperating with
their internal audit divisions. Along with auditing results,
the Audit & Supervisory Committee receives reports
from the internal audit divisions on the status of theestablishment of internal control systems throughout
the Company and exchanges information and opinionswith said divisions.

Director Selection Policy andDecision-Making Processes
PolicyThe Board of Directors as a whole possesses a good balance of knowledge, experience, and ability, and strives
to maintain both diversity and an appropriate size aswell as to keep the ratio of Outside Directors at morethan one-third.

Internal Directors*

Appoint persons with the ability to formulate
and execute management strategies based on
their own experience and insight, including a
wealth of experience in the Company’s operations

Outside Directors*

Appoint persons with extensive experience andbroad insight in corporate management

Directors who
are Audit &Supervisory
Committee
Members

Appoint persons with internal and external work
experience and a wealth of experience andinsight in various fields, including finance,accounting and legal affairs, and that at least
one of them is required to have a wealth ofexperience and insight in finance, accounting
and other fields* Excluding Directors who are Audit & Supervisory Committee Members

Director Compensation
Compensation for Directors(Excluding Directors who are Audit & Supervisory
Committee Members)
The Board of Directors, after consultation with and receiving advice from the Nomination and Compensation
Committee, determines the decision-making policy on
the details of individual compensation for Directors(excluding Directors who are Audit & Supervisory
Committee Members). Compensation for Directors(excluding Directors who are Audit & Supervisory
Committee Members) consists of monthly compensation, bonuses, and restricted share compensation.
Intended to incentivize Directors, the latter two forms ofcompensation comprise a consolidated performance-linked bonus aimed at motivating efforts toimprove business performance and a restricted sharecompensation system aimed at motivating efforts toincrease share value and enhance corporate value.
Monthly
compensation

Bonuses*

Restricted sharecompensation** Outside Directors are not eligible

Process
Directors(excluding Directors who
are Audit & Supervisory
Committee Members)

Candidates are determined by the Boardof Directors reflecting advice on candidates compiled by the Nomination andCompensation Committee, and appointed
at the General Meeting of Shareholders.

Directors who are
Audit & Supervisory
Committee Members

Candidates are determined by the Boardof Directors with the consent of the Audit& Supervisory Committee and appointed
at the General Meeting of Shareholders.

Determination

Monthly
compensation

Evaluation of Effectiveness of the Boardof Directors
Makita conducts an annual self-evaluation questionnaire for each Director on the effectiveness of the Boardof Directors. The results of analyzing the FYE 2022 effectiveness evaluation indicated that the Board of Directors
generally functions appropriately from the perspectiveof its composition, operation, supervisory function, andresponse to shareholders and stakeholders, and that theeffectiveness of Makita’s Board of Directors is ensured.
On the other hand, it was pointed out by the Outside
Directors that there is room for improvement withregard to the advance distribution (delivery) of deliberation materials and advance explanations for meetings ofthe Board of Directors, so we worked on the further
improvement of effectiveness by bringing forward the
distribution of deliberation materials and expanding
advance explanations by the secretariat of the Board of
Directors to Outside Directors.

The Nomination and Compensation
Committee is delegated through a resolutionof the Board of Directors to determine theamount of monthly compensation for each
Director within the limit on compensation
resolved by the General Meeting of Shareholders
based on business results, position, employee
salary increases, and other factors.

TotalamountAs is the case for dividend from surplus, bonuses
are based on profit attributable to owners of theparent per share (basic) after adjusting for special
factors, and the Board of Directors determines thetotal amount of bonuses based on a certain formula following consultations and advice from theNomination and Compensation Committee andsubmits the amount for resolution at the General
Meeting of Shareholders.

Individual

The Nomination and Compensation Committee
is delegated through a resolution of the Boardof Directors to determine the allocation of
bonuses to Directors based on performance,
position, and other factors.

Bonuses

Restricted sharecompensation

After consulting and receiving advice from theNomination and Compensation Committee, theBoard of Directors determines the allocation of
restricted share compensation to Directors
based on position and other factors.

Compensation for Directors who are Audit &Supervisory Committee Members
The full amount of compensation for Directors who are
Audit & Supervisory Committee Members is fixed compensation so that their independence from management can be ensured; the specific amount is decided
through discussion among the Directors who are Audit& Supervisory Committee Members.
Makita Report 2022

44

Systems to Support Enhancement of Corporate Value—Corporate GovernanceTotal Amount of Compensation (FYE 2022)

Category of officer

Totalamountsof compensation(Millionyen)

Total amounts of each type of compensation (Million yen)Basecompensation

Bonuses

Restricted
share compensation

99

222

36

Number of
eligible
Directors

Directors (Excluding
Audit & Supervisory
Committee Members)(Excluding Outside
Directors)

357

Directors (Audit &Supervisory Committee
Members)(Excluding Outside
Directors)

11

11

—

—

1

Audit & Supervisory
Board Members(Excluding Outside Audit& Supervisory Board
Members)

4

4

—

—

1

Outside Officers

35

35

—

—

7

11

Note: The above table includes Directors and Audit & Supervisory Board Members
who retired during FYE 2022.

Compliance
Makita upholds a philosophy of “striving to exist in harmony with society,” an approach it applies uniformly
approach and that is reflected in our Management
Policy/Quality Policy. As such, we thoroughly ensure that
officers and employees comply with legal, regulatory,
and ethical principles. Makita’s Code of Ethics andGuideline to the Code of Ethics for Makita, which outline
the conduct expected of Group officers and employees,
stipulate the importance of ethical conduct, avoiding
conflicts of interest, complying with relevant laws andsocial standards, properly disclosing information,
respecting human rights, restricting gifts and incentives,
prohibiting bribes, and prohibiting unfair business transactions. Employees are provided with regular information and ongoing training about Makita’s Code of Ethics
and Guideline to the Code of Ethics for Makita. In order
to instill an awareness of the importance of compliance,
employees are given an Ethical Compliance Survey,
while new hires and newly appointed managers are provided with compliance training.
In order to minimize, pre-empt, quickly discover, andresolve conduct in violation of the Code of Ethics, Makita
has established regulations regarding a Corporate Ethics
Helpline (Internal Reporting) in addition to an internal
hotline as well as an external contact for employees
making reports. We have also established a point of contact on the Company website for receiving external
feedback and suggestions related to accounting, internal control, and audits. Thorough measures are taken in
the regulations to protect whistleblowers so that they
do not incur any disadvantage for reporting to the45

Makita Report 2022

Corporate Ethics Helpline. If necessary, the content of
the reports is also shared within the Company, and steps
are taken to remedy and prevent recurrence of the­matter in question.

Status of Internal Audits
As an independent organization in charge of theGroup’s internal audits, the Internal Audit Division isstaffed by more than 10 personnel and conducts theinternal audits necessary to maintain managementsoundness. Results of audits are reported to the Audit &Supervisory Committee and to management personnel.
Furthermore, we have built a framework for making
timely and appropriate revisions when inadequacies in
the internal control system are discovered through­internal audits.

Strategic Shareholdings
The Company holds shares of various companies, including clients and associates in business relationships, forstrategic purposes from a medium- to long-term perspective, based on the criteria of whether or not theshares are beneficial for business execution, such as
strengthening relationships with clients and business
partners. In addition, the Board of Directors regularly
examines the economic rationality and other factors ofeach individual stock based on the significance of holding the stock and the capital cost, and verifies the appropriateness of such holding from a medium- to long-term
perspective. As a result of the verification, we will consider
selling stocks for which the appropriateness of holding is
not recognized, and work to reduce the amount. Most
recently, at its meeting on June 28, 2022, the Board of
Directors completed its review of the situation as ofMarch 31, 2022.
Strategic Shareholdings at the End of the Fiscal Year

Number of issues
Balance sheet
amounts(Million yen)

FYE 2018

FYE 2019

FYE 2020

FYE 2021

FYE 2022

52

51

49

49

45

33,29824,566

20,21330,693

20,942

Note: The increase in the amount recorded on the balance sheet from FYE 2020 toFYE 2021 was due to an increase in the market value of strategic shareholdings
as a result of the rise in stock prices.

Messages from Outside Directors

Serving as an Independent Outside Director to
Maintain Stable, Sustainable Management
Outside Director
Brief profile

Masahiro Sugino

Appointed to the position of Makita Outside Director in June 2015. Outside
Director Sugino has an intimate knowledge of corporate management
gained through many years of involvement running the LIXIL Group, including INAX Corporation. He currently serves as Chair of the Nomination andCompensation Committee.

Evaluating the Corporate Governance Structure
In December 2020, Makita established its
Nomination and Compensation Committee, which I
chair as Independent Outside Director. Then, in June
2021, Makita transitioned to a Company with an
Audit & Supervisory Committee. I believe that theCompany’s corporate governance structure, including management transparency, is enhanced by the
inclusion of five Independent Outside Directors.
In addition, since the appointment of President
Munetoshi Goto in June 2017, the differentiation of
the roles he and Chairman Masahiko Goto play has
been progressing, adding depth to management
decision-making. I have confidence in the management decision-making process and its transparency,
and I feel that the Nomination and Compensation
Committee as well as I and my fellow Independent
Outside Directors will play increasingly importantroles in maintaining stable, sustainable management
into the future.
Makita’s Strengths Seen through the Lens ofManagement Experience
Makita serves a huge global market through its management with a wide range of customers around theworld. This gives the Company a great deal of room for
demand expansion. At the same time, a significant positive factor for the business demand risk factors thatcause sales to increase or decrease are dispersed,­mitigating the impact of management risk.
One of Makita’s major strengths is its comprehensive
customer-first policy—demonstrated by its aggressive
product development, extensive product lineups, ability
to step up production without worrying about runningout of stock, healthy inventory, and record of capital
expenditures on logistics functions—which permeates
the Company. I believe Makita has been able toincrease its market share because it has hewed to thisapproach despite the COVID-19 pandemic, and this has
allowed it to outpace the product supply delays­suffered by other companies.

Challenges in Maintaining Sustainable Growth
I believe that the only way for Makita to achieve sustainable growth in the future is to further increasecustomer satisfaction by adhering to its customer-­oriented management policy. Therefore, it is essential to step up measures to enhance product lineups,
secure production capacity before it is needed, andimprove supply and service systems by strengthening the distribution base network. In addition, theCompany must continue to pursue ongoing humanresource enhancement measures like humanresource development and leadership training tocontinuously increase the capacity of each department. Moving forward, Makita will reinforce
Company-wide organizational and interdepartmental
communication skills.
Contributing to a Sustainable Society andAchieving Sustainable Growth
The purpose of corporate management is to ensure
a company contributes to and serves society. It is thenatural obligation of a business to secure profits andreturn profits to society (e.g., by paying taxes). The
top priority should not be to secure short-term profits, but to contribute to the maintenance of a sustainable society through its business, which will
ultimately lead to its own sustainable growth.
To achieve this, Makita’s top priority is to contribute to the environment. In addition to theCompany’s current focus on cordless outdoor power
equipment, we are focusing on making an evengreater commitment to reducing environmental
impact. Specifically, Makita must thoroughly reducegreenhouse gas emissions and strive in all areas ofdevelopment, production, sales, and service toensure that it achieves its reduction targets. These
efforts will enhance the Company’s social standing
and contribute to the improvement of its mediumto long-term business performance. It is necessary tocontinue to monitor Makita’s reduction activities
and their effects over the medium to long term.

Makita Report 2022

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Systems to Support Enhancement of Corporate Value—Corporate Governance

Messages from Outside Directors

Monitor Rapid Changes in the Social Environment andMaking Sure Our Direction for the Future is Right
Outside Director
Brief profile

Takahiro Iwase

Appointed to the position of Makita Outside Director in June 2021.
Outside Director Iwase has an intimate knowledge of corporate management gained through many years of involvement in the Toyota Group,
including TOYOTA MOTOR CORPORATION.

I believe that Makita’s corporate governance is functioning properly, as management decisions are
made from the perspective of all stakeholders,
including shareholders, investors, business partners,
local communities, and employees. In particular, theCompany is characterized by a balance between
effective oversight by Independent Outside
Directors and auditing by the Audit & Supervisory
Committee as well as strong top-down decision
making that is flexible and efficient.
At the Board of Directors meetings, each departmental supervisor delivers a solid monthly report on
the execution of operations, and there is free andvigorous questioning based on these reports, allowing for a proper understanding of the respective
department’s challenges and responses amid thechanging environment. I have been impressed by
the speed with which top management has beenable to articulate executive direction in light of several events that have had a significant impact on global
economic activity during the Board of Directors’ discussions. As an Independent Outside Director, I offer
opinions and topics for discussions from the perspective of promptly handling changes in the social

environment and making adjustments to ensure theCompany stays on course into the future.
Makita’s ability to develop markets and consistently expand its development, production, sales, andservices on a global scale makes it not only an industry leader, but also one of the best manufacturing
companies in Japan. “A company is only as good as
its people,” to borrow a phrase, and Makita’s excellence is the result of its global human resource development capabilities, which are the foundation of its
corporate strength. It is important that Makita­continues to further strengthen this capability.
The current climate makes risk management in
the broadest sense increasingly important for the
future. In addition to disaster preparedness, thismanagement includes supply chain redesign, carbon neutrality, and other environmental initiatives
as well as compliance with increasingly complex
global laws and regulations. I believe that the key toaddressing these challenges is strong leadership,
strengthening the strategic planning and promotion
structure, and creating a framework for execution,
auditing, and supervision.

List of Directors
Name

Attendance at Board of
Directors’ meetings

Number of the Company's shares
held (as of March 31, 2022)

Chairman, Director*

Masahiko Goto

100% (12 of 12 meetings)

2,524,121 Shares

President, Director*

Munetoshi Goto

92% (11 of 12 meetings)

471,087 Shares

Director, Corporate Officer, General Manager ofPurchasing Headquarters

Shinichiro Tomita

100% (12 of 12 meetings)

18,901 Shares

Director, Corporate Officer, General Manager ofResearch and Development Headquarters

Tetsuhisa Kaneko

100% (12 of 12 meetings)

24,501 Shares

Position

47

Makita Report 2022

Position

Name

Attendance at Board of Directors’ meetings(Audit & Supervisory Committee meetings/
Audit & Supervisory Board meetings)

Number of theCompany's shares held
(as of March 31, 2022)

Director, Corporate Officer, General Manager of
Quality Headquarters

Tomoyuki Ota

100% (12 of 12 meetings)

18,801 Shares

Director, Corporate Officer, General Manager ofDomestic Sales Headquarters

Takashi Tsuchiya

100% (12 of 12 meetings)

20,101 Shares

Director, Corporate Officer, General Manager of
Production Headquarters

Masaki Yoshida

100% (12 of 12 meetings)

11,721 Shares

Director, Corporate Officer, General Manager ofInternational Sales Headquarters

Takashi Omote

100% (12 of 12 meetings)

10,041 Shares

Director, Corporate Officer, General Manager of
Administration Headquarters

Yukihiro Otsu

100% (12 of 12 meetings)

9,441 Shares

Outside Director

Masahiro Sugino

100% (12 of 12 meetings)—

Outside Director

Takahiro Iwase

90% (9 of 10 meetings)—

Director (Standing Audit & Supervisory
Committee Member)

Mitsuhiko Wakayama

Outside Director (Standing Audit & Supervisory
Committee Member)

Akira Kodama

Outside Director (Audit & Supervisory
Committee Member)

Shoji Inoue

Outside Director (Audit & Supervisory
Committee Member)

Koji Nishikawa

100% (12 of 12 meetings)(100% (14 of 14 meetings))

9,500 Shares

100% (12 of 12 meetings)—(100% (14 of 14 meetings))
100% (12 of 12 meetings)(100% (14 of 14 meetings))

500 Shares

100% (10 of 10 meetings)—(100% (10 of 10 meetings))* Representative Directors
Notes: 1. The Company provided notice on Mr. Masahiro Sugino, Mr. Takahiro Iwase, Mr. Akira Kodama, Mr. Shoji Inoue, and Mr. Koji Nishikawa to the Tokyo Stock Exchange andNagoya Stock Exchange as being Independent Directors appointed by the Company, in accordance with the rules and regulations of each exchange.
2. Based on the resolution at the 109th Ordinary General Meeting of Shareholders held on June 25, 2021, the Company transitioned to a Company with an Audit &Supervisory Committee. The Board of Directors met 12 times, the Audit & Supervisory Committee met 10 times, and the Audit & Supervisory Board met 4 times before thetransition to the Company with an Audit & Supervisory Committee. Mr. Mitsuhiko Wakayama, Mr. Akira Kodama, and Mr. Shoji Inoue attended 10 meetings of the Audit &Supervisory Committee and 4 meetings of the Audit & Supervisory Board. Mr. Takahiro Iwase and Mr. Koji Nishikawa were newly appointed at the 109th Ordinary General
Meeting of Shareholders held on June 25, 2021.
3. Holdings of less than 100 shares through Makita’s stock ownership plan are not included in the number of held shares of the Company’s.

Reasons for Appointing Outside Directors
NameAppointment reason

Masahiro Sugino

He has participated in the management of LIXIL Group, including INAX, for many years and has a thorough knowledge of corporate management, with which he currently provides useful opinions on the management of the Corporation from a broad perspective. We expect him to utilize his wealth of experience and broad insight for the management of the Company from an
independent perspective.

Takahiro Iwase

He has participated in the management of core companies of the Toyota Group, including TOYOTA MOTOR CORPORATION, formany years and has a thorough knowledge of corporate management, with which he currently provides useful opinions on the
management of the Corporation from a broad perspective. We expect him to utilize his wealth of experience and broad insight forthe management of the Company from an independent perspective.

Akira Kodama

He has many years of experience at financial institutions and specialized knowledge of financial matters, and has provided useful
opinions from his professional perspective. We expect that he will utilize his wealth of experience and broad insight in auditing
and supervising the Company's management from an independent perspective.

Shoji Inoue

He has extensive knowledge and expertise gained through his practice as attorney at law, and expressed his opinions from thatperspective. We expect that he will reflect his wealth of experience and expertise in auditing and supervising the Company's management from an independent perspective.

Koji Nishikawa

He has extensive knowledge and expertise in corporate accounting audits as a certified public accountant. We expect that he will reflect
his wealth of experience and expertise in auditing and supervising the Company's management from an independent perspective.

Makita Report 2022

48

Message from the Financial Officer

Maintain a Strong Financial
Base in Pursuit of Becoming
a “Strong Company”
Director, Corporate Officer,
General Manager of Administration Headquarters

Yukihiro Otsu

FYE 2022 in Review
In FYE 2022, stay-at-home demand during the COVID-19
pandemic calmed down but remained stronger than
expected as, with the waning of the pandemic, demand
for the “new normal” set in, as well as new demand thatreflected new investments aimed at addressing environmental issues and restarting businesses. With a shortageof goods and logistics disruptions, it was a year of struggle to see how far we could go in ensuring a solid supply
to meet demand. Nevertheless, revenue increased 21.5%
year-on-year to ¥739,260 million. Despite the significant
impact of higher transportation costs, operating profit
increased 3.7% year on year to ¥91,728 million, with bothrevenue and operating profit reaching record highs.
In line with our basic policy of investing in growth inanticipation of need, we have been working to establish
and expand our distribution bases and increase production capacity around the world over the past several
years. The current logistics situation, with goods being
held up at ports and at sea is a case in point. Despite thegoods having already been manufactured they areunavailable and in order to maintain an uninterrupted
supply of products, inventories must be kept somewhat
large. Moreover, with sales up significantly compared to
two years ago, we believe that our efforts to increase production capacity to meet a large increase in demand have
paid off in terms of production and that our investment
in a distribution warehouse has also paid off in terms of
distribution. This is how our policy of investing in growth
has proved effective to date with regard to both production and logistics, and we believe that we have been able
to build a relationship of trust with our customers by­providing them with a reliable supply of products and­services even amid volatile global market conditions.
Although we have been investing at a high level for
growth, while we plan to continue investing as necessary, we will adjust the level of capital expenditure
downward as we start seeing the results of the investments already made. Also, although we are currently
increasing inventory to counteract logistics disruptions,
we expect inventory levels to gradually normalize oncethe disruptions subside.

Production Output by Region

Trends in Capital Expenditures(Million yen)

(Million units)

60.00

59,93760,000

50.05
39.59

40.00

20.00

0
Japan

49

40,000

1.42

31.11

30.58

1.05

1.09

21.79

20.13

17.78

1.24
4.14
2.89
2018

1.34
5.12
2.90
2019

1.02
5.77
3.08
2020

EuropeNorth America

Makita Report 2022

1.87

28.72

31.48

1.07

24.88
1.19
9.06
3.04
2021
Asia

20,000
1.43
11.76
3.51
2022

0
(FYE)

Central and South America

2018

2019

2020

2021

2022

(FYE)

Basic Approach to Financial Management
Makita’s basic financial policy is to maintain a robust
financial structure able to withstand unexpected changes
in the business environment, including those related toforeign currency and geopolitical risks. Our ability to
improve convenience for customers is an important
aspect of our competitiveness, and we believe maintaining
a robust financial structure is essential to our becoming
a “Strong Company” as well as our ongoing execution ofnecessary and timely investments aimed at increasing
customer convenience, even in times of adversity.

Promoting Returns to Shareholders
Makita’s basic policy is to distribute profits in accordancewith business performance, taking into consideration
the need to balance investment for sustainable growth,and enhancement of corporate value, as well as financial soundness to prepare for a variety of risks. We determine the amount of dividends to be paid each fiscal yearwith the lower limits on cash dividends applicable to theyear per share and the consolidated dividend payout
ratio set at 10 yen per share and 30%. We paid a 72 yen
per share annual dividend for the period, an increase of
3 yen from the previous fiscal year, reflecting the strong
business performance.

With transportation and material costs continuing torise, current conditions are posing difficulties in terms of
profit. Nevertheless, we will continue to review operations and work to reduce costs by eliminating even thesmallest measure of wastefulness, passing on rises inprices to customers when necessary. By simultaneously
strengthening such initiatives as streamlining businessprocesses through digital transformation, we will strive
to maintain profitability over the long term and enhance
corporate value.

Cash Dividends Applicable to the Year per Share/
Dividend Payout Ratio
(Yen)

72
69
(30.2%)(30.2%)

80

60

62
61
(30.2%) (30.2%)

53(30.1%)

40

20

0

2018

2019

2020

2021

2022

(FYE)

Note: Parentheses indicate dividend payout ratio

Strengthening Shareholder andInvestor Engagement
Through active dialogue with our shareholders andinvestors, we hope to deepen their understanding of
our long-term vision and growth strategies. In recent
years, stakeholder interest has grown to include ESG
issues and SDGs (Sustainable Development Goals) inaddition to financial information, and we have received
many inquiries on these topics, so we are well aware of
the need for effective communications. Accordingly, we
have set greenhouse gas emission reduction targets anddisclosed information based on the recommendationsof the Task Force on Climate-related Financial
Disclosures (TCFD), which we have endorsed. We havealso worked to expand the content of the integrated
Makita Report.

Regarding opinions and requests received through IR
activities, we will strive to maximize corporate value by
giving feedback to management, sharing issues, andreflecting upon them in our management.
We believe that the understanding of our shareholders
and investors is essential if we are to steadily implement
the measures needed for our long-term development.
We will continue working to become a “Strong
Company” while listening sincerely to the feedback ofour shareholders and investors. We appreciate your­continued support.
For detailed financial information, please refer to the Investor Relations section(under Additional Information in the IR Library) of the Company’s website.

Makita Report 202250

11-Year Summary(For the years ended March 31)

U.S. GAAP

2012

2013

2014

2015

2016

2017

¥ 295,711¥ 309,630¥ 383,207¥ 414,718¥ 423,623¥ 414,999

Domestic

53,17556,55566,01967,74068,44574,381

Overseas

Net sales

242,536

253,075

317,188346,978

355,178

340,618

Operating income

48,51645,36654,914

71,90564,67662,564

Income before income taxes

46,96345,691

56,974

68,394

61,49264,738Net income attributable to Makita Corporation

32,49731,07638,45345,307

41,61544,782

Net cash provided by (used in)operating activities¥   8,622¥  38,364¥  41,686¥  35,894¥  34,188¥   63,351

Net cash provided by (used in)investing activities(4,500)(15,414)(20,084)(20,096)(6,573)(5,015)

Free cash flows

4,122

22,95021,602

15,79827,61558,336(12,707)(10,650)(7,365)(12,017)(18,719)(9,495)

Net cash provided by (used in)financing activities¥  13,481¥  11,481¥  11,417¥  12,124¥  11,769¥  13,222

Depreciation and amortization

7,237

7,542

8,622

8,619

9,284

8,943

R&D costs

7,603

8,396

8,720

9,117

9,593

10,139

Capital expenditures¥ 383,256¥ 440,974¥ 519,121¥ 575,328¥ 558,024¥ 597,249

Net working capital

223,045

266,950

310,750

358,245362,675

374,297

Total Makita Corporation shareholders’ equity

321,253

373,543435,934

486,021479,752

502,170

2,363

1,703

4,163

5,030

2,225

6,597

Earnings per share (basic) net income attributable to Makita
Corporation common shareholders¥  118.39¥  114.46¥  141.65¥  166.89¥  153.30¥  164.96

Total Makita Corporation shareholders’equity per share

1,183.25

1,375.89

1,605.80

1,790.33

1,767.26

1,849.88

72.00

69.00

91.00

118.00101.00100.00

Ratio of operating income to net sales

16.4%

14.7%

14.3%

17.3%

15.3%

15.1%

ROE

10.3%

8.9%

9.5%

9.8%

8.6%

9.1%

ROA

8.6%

7.5%

8.0%

8.3%

7.3%

7.8%

Total Makita Corporation shareholders’ equity
ratio to total assets

83.8%

84.7%

84.0%

84.5%

86.0%

84.1%

Total assets

Interest-bearing debt

Per share amounts

Cash dividends applicable to the year per share

Other data

Average number of shares outstanding
during the term

274,489,367 271,496,178 271,481,657 271,472,428 271,468,232 271,463,676

Number of shares issued excluding
treasury stock

271,501,036 271,491,854 271,475,252 271,469,736 271,466,522 271,460,572

Employees

12,563

12,68012,804

13,835

14,784

15,344

Notes: 1. Earnings per share (basic) net income attributable to Makita Corporation common shareholders and profit attributable to owners of the parent per share(basic) are computed based on the average number of shares outstanding during the term.
2. Figures are rounded up/down to the nearest million yen.
3. On April 1, 2017, Makita conducted a 2 for 1 stock split of its common shares. Earnings per share (basic) net income attributable to Makita Corporation common shareholders, total Makita Corporation shareholders’ equity per share, average number of shares outstanding during the term, and number of sharesissued excluding treasury stock were calculated assuming that the stock split was also conducted in prior years. Cash dividends applicable to the year per
share show the actual amount of the dividend before the stock split.
4. ROE is calculated based on the following:
U.S. GAAP: Net income attributable to Makita Corporation ÷ ((Total Makita Corporation shareholders’ equity at the beginning of period + Total Makita
Corporation shareholders’ equity at the end of period) ÷ 2) × 100
IFRS: Profit attributable to owners of the parent ÷ ((Equity attributable to owners of the parent at the beginning of period + Equity attributable to owners of
the parent at the end of period) ÷ 2) × 100
5. ROA is calculated based on the following:
U.S. GAAP: Net income attributable to Makita Corporation ÷ ((Total assets at the beginning of period + Total assets at the end of period) ÷ 2) × 100
IFRS: Profit attributable to owners of the parent ÷ ((Total assets at the beginning of period + Total assets at the end of period) ÷ 2) × 100

51

Makita Report 2022

(Million yen)2018
¥ 477,298
82,575
394,723(Million yen)

IFRS

2018

2019

2020

2021

2022

¥ 477,298¥ 490,578¥ 492,617¥ 608,331¥   739,260

Domestic

82,575

92,129100,697

113,048

118,050

Overseas

Revenue

394,723

398,449

391,920495,283

621,210

79,762

Operating profit

80,23178,30564,046

88,46491,72879,678

Profit before income taxes

79,86579,91966,00887,19992,48354,755

Profit attributable to owners of the parent

54,94355,75047,73162,01864,770¥  33,294

Net cash provided by (used in)operating activities¥   34,191¥   23,155¥   57,310¥   64,537¥ (103,660)(14,811)

Net cash provided by (used in)investing activities(15,708)(15,329)(30,506)(42,913)(27,891)

18,483

Free cash flows

18,483

7,826

26,804

21,624(131,551)(17,743)

Net cash provided by (used in)financing activities(17,743)(8,231)(22,931)(23,036)

52,626¥  14,149¥   15,045¥   23,867¥   44,409¥   49,855¥   59,937

9,917

Depreciation and amortization

10,783

11,271

12,05813,881

17,63910,894R&D costs

10,924

11,258

11,601

12,78314,145¥651,031

Total assets¥ 654,841¥ 680,250¥ 674,564¥ 812,878¥1,007,497

415,979

Net working capital

398,355

402,335

381,090

418,530

460,794551,939

Equity attributable to owners of the parent

554,046

572,748571,275

657,855

746,3443,544

11,96019,737

16,45596,462

Capital expenditures

3,544

Interest-bearing debt

(Yen)

Per share amounts¥  201.70
2,033.16
61.00

(Yen)

Profit attributable to owners of
the parent per share (basic)¥   202.39¥   205.37¥   175.80¥   228.41¥   238.54

Equity attributable to owners of
the parent per share

2,040.93

2,109.83

2,104.01

2,422.80

2,748.64

61.00

62.00

53.00

69.00

72.00

Cash dividends applicable to the year
per share

Other data
16.7%

Ratio of operating profit to revenue

16.8%

16.0%

13.0%

14.5%

12.4%

10.4%

ROE

10.4%

9.9%

8.3%

10.1%

9.2%

8.8%

ROA

8.8%

8.4%

7.0%

8.3%

7.1%

84.8%

Ratio of equity attributable to ownersof the parent to total assets

84.6%

84.2%

84.7%

80.9%

74.1%

271,465,951

Average number of shares outstanding
during the term
271,465,951 271,467,574 271,502,528 271,524,393

271,530,966

271,467,928

Number of shares issued excluding
treasury stock

271,532,459

16,137

Employees

271,467,928 271,467,057 271,516,990 271,527,124
16,137

16,42417,09018,624

20,233Makita Report 2022

52

Stock Information(As of March 31, 2022)

Breakdown of Shareholders

Securities code

6586

Stock market
listings*

Tokyo Stock Exchange (First Section)
Nagoya Stock Exchange (First Section)

Total number ofshares outstanding

Common shares 280,017,520(including treasury stock of
8,485,061 shares)

The number ofshareholders

Financial institutions
and securities firms
102,654 (36.7%)
Individuals and others
29,472 (10.5%)

Number of shares(1,000 shares)

Foreign institutions
and individuals
109,788 (39.2%)

280,018

14,768Other domestic
companies
29,619 (10.6%)*D ue to the market restructures of the Tokyo Stock Exchange andthe Nagoya Stock Exchange, the Company moved from the First
Section to the Prime Market and the Premier Market, respectively,
on April 4, 2022.

Treasury stock
8,485 (3.0%)

Major Shareholders (Top Ten)
Number of shares held Ratio of shareholding(1,000 shares)
(%)

Name
The Master Trust Bank of Japan, Ltd. (Trust account)

43,192

15.90

Custody Bank of Japan, Ltd. (Trust Account)

12,291

4.52

Maruwa, Ltd.

8,638

3.18

MUFG Bank, Ltd.

8,426

3.10

The Bank of New York Mellon as Depositary Bank for DR Holders

7,791

2.86

Makita Cooperation Companies’ Investment Association

6,198

2.28

Sumitomo Mitsui Banking Corporation

5,800

2.13

Nippon Life Insurance Company

5,353

1.97

BNYM AS AGT/CLTS 10 PERCENT

4,172

1.53

National Mutual Insurance Federation of Agricultural Cooperatives

4,109

1.51

Note: The ratio of shareholding is calculated based on the total number of outstanding shares (excluding treasury stock) as of the end of the fiscal period.

Share Price Trend(Yen)(Million shares)

6,000

30

5,000

25

4,000

20

3,000

15

2,000

10

1,000

5

35

7,000

0

2012/42013/4

Share price (left axis)

2014/4

2015/4

2016/42017/42018/4

2019/42020/42021/42022/30

Trading volume (right axis)

Notes: 1. On April 1, 2017, Makita conducted a 2 for 1 stock split of its common shares. For ease of comparison, the share price is the value after taking thestock split into account.
2. The share price is the closing price at the end of each month.

53

Makita Report 2022

Corporate Data
(As of March 31, 2022)

Corporate Name

Makita Corporation

Head Office

3-11-8, Sumiyoshi-cho, Anjo, Aichi 446-8502, Japan
Telephone: +81 566 98 1711

URL

https://www.makita.biz/

Date of Founding

March 21, 1915

Date of
Incorporation

December 10, 1938

Paid-in Capital

24,205,610 thousand yen

Description ofBusiness

Production and sales of electric power tools, outdoor power equipment, pneumatic tools andhousehold equipment

Financial year-end

March 31

Representative
Directors

Chairman Masahiko Goto
President Munetoshi Goto

Accounting Auditor

KPMG AZSA LLC

Consolidated
Revenue739,260 million yen (fiscal year ended March 31, 2022)

Number of
Employees(consolidated basis)

20,233

Consolidated
Subsidiaries

52

Principal
Consolidated
Subsidiaries

Sales subsidiaries

Sales and production subsidiary

Makita U.S.A. Inc.

Makita (China) Co., Ltd.

Makita (U.K.) Ltd.

Production subsidiaries

Makita Werkzeug GmbH (Germany)

Makita (Kunshan) Co., Ltd.

Makita France SAS

SC Makita EU S.R.L. (Romania)

Makita Oy (Finland)Technology development subsidiary
Makita Engineering Korea Co., Ltd.

Makita Report 202254

www.makita.biz