Makita Corporation
Additional Information
for the year ended March 31, 2022

General Overview of Business(Partial translation of "YUKASHOKEN HOKOKUSHO"
originally issued in Japanese)

CONTENTS

Management policies and Challenges the company faces…………………………………………………………...2
Risk factors…………………………………………………………………………………………………………..6
Analysis of Financial Position, Operating Results and Cash Flows…………………………………………………10
Production, Orders received and Sales……………………………………………………………………………....15
Research and Development………………………………………………………………………………………….15
Facilities and Equipment…………………………………………………………………………………………….16

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese1【Management policies and Challenges the Company faces】
1. Basic Policies
Makita has set itself the goal of consolidating a strong position in the global power tool industry as a global supplierof a comprehensive range of power tools (mainly for DC type, gardening equipment, air tools, etc.) that assist people increating homes and living environments. In order to achieve this, Makita has established strategic business approaches
and quality policies such as "A management approach in symbiosis with society" "Managing to take good care of ourcustomers," "Proactive, sound management" and "Emphasis on trustworthy and reliable corporate culture as well as
management to draw out the capabilities of each employee." Makita aims to generate solid profitability so that Makita
can promote its sustained corporate development and meet the needs of its shareholders, customers, and employees aswell as regional societies where Makita operates.
2. Target Management Indicators
Makita believes that attaining sustained growth and maintaining high profitability are the ways to increase corporate
value. Makita's specific numerical target is to maintain a stable ratio of operating income to net sales on a consolidated
basis of 10% or more.
3. Medium-to-Long-Term Management Strategy
Makita aims to establish high brand recognition and become a “Strong Company” capable of acquiring andmaintaining the top market share as an international total supplier of power tools for professional use, gardening
equipment, pneumatic tools and other tools in each international region. To achieve these objectives, we will put focus
on maintaining and expanding our efforts to develop new products that guarantee great satisfaction to professional
users, our global production structure realizing both high quality and cost competitiveness at the same time, and thebest marketing and service structure of the power tools industry in Japan and in international regions. Especiallyhaving plenty stock in each region as we have production and sales sites in each country, that realizes not only
marketing but also speedy after-sale service and distribution, and this leads to build the customer relationship.
In order to carry out this management strategy, Makita is focusing its management resources on the professional-use
tool category, while maintaining its strong financial position that can withstand any unpredictable changes in theoperational environment including those related to foreign exchange risk and country risk.
4. Preparing for the Future
In the future, the Makita Group expects that the prospect for the global economy will continue to be uncertain.
Meanwhile, the Group believes that demand for environmental and human friendly tools that contribute to the solutionof social issues, such as the labor shortage and environment conservation by increased efficiency of works, willcontinue to increase further both in emerging and developed countries.
To cope with these assumed conditions, Makita will:・ Strengthen its R&D and product development capabilities, mainly for the technologies of motors andtechnologies for discharge/charge of batteries, to take the initiative in cordless products market;
・ Positioning cordless outdoor power equipment as the next pillar of our future business after power tools, wewill contribute to the realization of a decarbonized society by promoting deep cultivation and development of
the market.
・ We will strengthen the development and sales expansion of new finished goods in new fields such as
cleaning, outdoor activities, and disaster prevention, and work to evolve into a supplier of a comprehensive
range of cordless products.
・ Implement measures to strengthen and improve the efficiency of production, procurement and distribution,
while further upgrading global production bases; and・ Strive to raise its brand power by promoting the establishment of a sales and after-sales service network tooffer community-based and fine-tuned response to needs of customers around the world.
On the basis of these factors, the Group will strive to maintain a solid presence in the industry and contribute toachieve a sustainable society as a global supplier of a comprehensive range of tools for creating comfortable homes
and living environments.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese2(Initiatives for the TCFD Recommendations)
The impact of climate change on society, such as frequent wind and flood disasters, is becoming more serious, andcompanies are playing an increasingly important role in realizing a decarbonized society. Our company views climatechange as an important business issue.
For this reason, our company has prioritized contributing to the solution of climate change issues by, for example,
focusing on cordless outdoor power equipment that does not emit exhaust gas when used. In order to further acceleratethese efforts, we have newly set targets for reducing greenhouse gas (GHG) emissions. We are working on our targets
are to reach net zero emissions by fiscal 2040 (FYE 2041).
In addition, recognizing the importance of dialogue with stakeholders on climate-related risks and opportunities, we
disclosed information for the first time based on the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD).
See our website for more information. (https://www.makita.co.jp/company/sustainability/environment)[Governance]
In 2021, the Company established a Sustainability Committee (which met three times in fiscal 2021 (FYE 2022)),
chaired by the President, to promote Companywide efforts to address sustainability issues through business activities.
The committee considers climate change to be one of the most important sustainability issues, and deliberates onpolicies, 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 ofmonitoring and overseeing the Company’s climate-related risks and opportunities.

[Strategy]
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), andother organizations 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.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese3Based on these worldviews, we have identified our climate-related risks and opportunities and qualitatively assessed
them. For more details, see our website.

Risks
Type

Category
Large

Policiesandregulati
ons

Small

Rising carbon price/energy conservation andlow-carbon regulations

Technology

Product technology
developmentcompetition
Competition to develop
next-generation battery
technology

MarketRelevant
periodPossibility

Short tomedium
term

Large

Short
term

Large

Mediumtolong term

Large

Short tomedium
term

Large

Short
term

Large

Short tomedium
term

Large

Short
term

MediumShort
term

MediumIncreased operating costs based on own GHG
emissions
Increased procurement costs of raw materials,
energy, etc.
Increased capital expenditures to enhanceenergy efficiency
Increased renewable energy procurement costs

Battery regulations

Transition

Risk

Changes in market prices

Increased battery procurement costs
Increased development costs for technologies
and products withsuperior
environmental
performance(including portability andoperational efficiency)
Increased
development
costs
for
next-generation batteries withsuperior capacity, voltage, life, safety, etc.
Increased procurement costs due to increased
battery demand
Increased procurement costs due to increased
demand for semiconductors
Increased transportation costs
decarbonization of transportation

Reputation

Increased disclosure
requests

Acute

Increased frequency andseverity of wind andflood disasters

due

to

Reputational damage due to inferiority of
information disclosurecompared to other companies
Physical damage to our offices and facilities

PhysicalLosses due to business interruption
Losses due to supply chain disruptions

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

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese

4

Opportunities
Type

Category
Large

Small

Opportunity

Relevant
periodShort toDecrease operating costs by reducing
medium
GHG emissions to becometermcarbon neutral
Differentiation
fromcompetitors’
Product technology
products through the development of
Shortdevelopment
products with superior environmentaltermcompetition
performance (including portability andProducts
work efficiency)
and services
Differentiation
fromcompetitors’Competition to develop
Mediumproducts through the development of
next-generation battery
tonext-generation batteries with superior
technology
long term
Transitio
performancenMarket expansion and product demand
Energy conservation and increase due to a shift
from engine-powered to cordless
low-carbon regulations
products
Increase in demand for products
Shortassociatedwith
ZEB*1/ZEH*2
Changes in the building
term
conversion of buildings, installation ofand construction market
Marketsolar power generation equipment, andEV charging facilities, etc.
Increased disclosure
Improved reputation through enhanced
requests
disclosure information
Risingtemperatures, Increased demand for products in line
Short toclimatewith increased DIY demand
mediumand extreme weather
due to longer time spent at hometerm
Expansion of the disaster readiness
Increased frequency and market, increase in product
Short
Physicalseverity of wind and demand, and contribution to recovery
term
flood disasters
and reconstruction in the
Resilience
affected areas
Increased demand for products to
Short toRising temperatures
improve working conditions in
mediumhot environments
term
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
Energysources

Increased carbon prices

Possibili
ty
Large

Large

Large

Medium
Large

Large

[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 managementand determines management strategies and measures that will contribute to decarbonization. We will further strengthen
our climate change response by solidifying our systems and operations for managing these climate-related risks.
[Indicators and Targets]
The Makita Group has set goals to reduce GHG emissions from its own business activities (Scope 1 and 2) to virtuallyzero by fiscal 2040 (FYE 2041) and from its entire supply chain (Scope 3) to virtually zero by fiscal 2050 (FYE 2051).
The mid-term target for Scope 1 and 2 is to halve the fiscal 2020 (FYE 2021) level by fiscal 2030 (FYE 2031). GHG
For more details, see our website.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese

5

【Risk factors】
The following is a summary of some of the significant risks, concerning the business and financial conditions statedin the financial statements, which could affect investors’ decision-making. Additionally, some risks that may becurrently unknown to Makita and other risks that are currently believed to be immaterial, may become material.
Makita’s sales are affected by the levels of construction activities and capital investments in its markets.
The demand for power tools, Makita’s main products, is affected to a large extent by the levels of new housing
construction, demand for household renovations, public investment and private investments. Generally speaking, thelevels of construction activities and capital investment and consumption trends depend largely on the economic
conditions in the market.
As a result, when economic conditions weaken in Japan, Europe, North America, Asia, Central and South America,
Oceania, the Middle East and Africa where Makita conducts business actively, this may have an adverse impact on
Makita’s financial condition and results of operations. Uncertainty of world economic condition may adversely affectconstruction activities and consumption, and Makita’s sales may decrease. Consequently, the ratio of selling, general,administrative and others expense (hereinafter called “SGA expenses”) against net sales may become relatively high,and as a result, profit margin may decrease. Such conditions may require reorganization and restructuring of production
facilities and sales/distribution sites. If a sovereign debt crisis erupts in other country, it may have further adverse
effects on the level of new housing construction, demand for household renovations, public investment and private
investments due to the tightening of credit because of fears of failure of financial institutions or further decrease inpublic spending because of the austerity budget.
Due to the negative impact of the global pandemic on economic activity in each country, it may have an adverse
impact in Makita’s financial condition and results of operations. Even after the spread of the COVID-19 in various
countries, Makita has continued its business activities, including production and sales activities, and has maintained its
supply and service for customers at its production bases and sales companies around the world, taking strict measuresin accordance with the policies of respective governments and local administrative agencies.
Currency exchange rate fluctuations may affect Makita’s financial results.
The functional currency for all of Makita’s significant foreign operations is the local currency. Assets and liabilities
of overseas subsidiaries denominated in their local currencies are translated into Japanese yen at the exchange rate ineffect at each fiscal year-end, and income and expenses are translated at the average rates of exchange prevailing
during each fiscal year. The resulting currency translation adjustments are included in accumulated othercomprehensive income (loss) in shareholders’ equity. Currently, over 80% of Makita’s overall production and sales are
generated overseas and a significant portion thereof is dominated in currencies other than Japanese yen. Consequently,
fluctuations in exchange rates may have a significant impact on Makita’s results of operations, assets and liabilities andshareholders’ equity when translated into Japanese yen.
Makita is affected by fluctuations in the value of the euro, the U.S. dollar and Chinese Renmin yuan, among othercurrencies. The euro and the U.S. dollar are the primary foreign currencies on which Makita bases its foreign sales andthe U.S. Dollar and Chinese Renmin yuan are the primary foreign currencies on which Makita bases its foreign
production.
In an effort to minimize the impact of short-term exchange rate fluctuations between major currencies, mainly theeuro, the U.S. dollar, and the Japanese yen, Makita engages in hedging transactions. However, medium to long-term
fluctuations of exchange rates may affect Makita’s ability to execute procurement, production, logistics and sales
activities as planned and may have an adverse impact on Makita’s financial condition and results of operations.
Rapid fluctuation in exchange rates may give rise to more than expected effects on Makita’s results of operations. In
addition, further depreciation of the Japanese yen against the Chinese Renmin yuan, may have an adverse impact on
Makita’s financial condition and results of operation because significant amount of materials, parts and finishedproducts are imported from China.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese6Makita’s overseas activities and entry into overseas markets entail risks, which may have a material adverse
effect on Makita’s business activities.
The high percentage of overseas sales and production gives rise to a number of risks. If such risks materialize, they
may have a material adverse impact on Makita’s financial condition and results of operations. Such risks include thefollowing:(1) Disadvantageous political and economic factors;(2) Large-scale natural disaster, such as earthquakes, floods and fires;(3) Enactments of and changes in laws and regulations, such as protectionist trade policy or change in tariff policy
affecting markets in which Makita conducts its business;(4) The outflow of technical know-how and knowledge decline due to increased personnel turnover, enabling Makita’scompetitors to strengthen their position;(5) Potentially unfavorable tax systems and tariffs;(6) Terrorism, war, and other factors that lead to social turbulence; and(7) The interruption of or disruption to Makita’s operations due to labor disputes.
Makita faces intense competition in the global market for its power tools for professional use.
The global market for power tools for professional use is highly competitive. Factors that affect competition in themarkets for Makita’s products include the quality, functionality of products, price, technological developments, thepace of new product development, reliability of products, such as safety and durability, the rise of new competitors,
brand images and after-sales service.
While Makita strives to ensure its position as a leading international supplier of power tools for professional use,
there is no guarantee that it will be able to effectively maintain its competitiveness in the future.
If Makita is unable to compete effectively, it may lose market share and its earnings may be adversely affected. In
particular, in the event of a global recession in which demand for goods and services sharply drops, earnings and cash
flows of Makita may be negatively affected by intensified competition and lowered product prices.

If Makita is not able to develop attractive products, Makita’s sales may be adversely affected.
In order to compete effectively, Makita needs to, among other things, provide its customers a diverse product line-up
supported by the development of high-quality and high-performance professional power tools, and build on the
MAKITA brand value maintained and promoted by the effort of a strong world-wide sales and after-sale service
network. There is no assurance that Makita will be able to continue to develop new products across its diverse productline-up. If Makita is no longer able to develop in a timely manner new products that meet the changing needs andcorrespond to market price for high-end, professional users, Makita may not be able to compete effectively, andMakita’s financial condition and results of operations may be adversely impacted.
If the procurement of raw materials used by Makita becomes difficult or prices of these raw materials rise
sharply, this may have an adverse effect on Makita’s performance.
Makita purchases raw materials and components, including silicon steel plates, aluminum, material of plastic, steel
products, copper wire, and electronic parts for production activities. The production plans are dependent on theon-schedule delivery of materials. If Makita is unable to obtain the necessary quantities of these materials, this may
have an adverse effect on production. If delivery takes longer due to the lack of certain elements, epidemic of new
infectious disease and increase in production is difficult, production activity of electric components facing highdemand of emerging countries may not be met. In addition, the change in the element markets, impact on currency
exchange, or rise in labor of the markets may also push up the prices of raw materials and components. In such an
event, if the increase in prices cannot be offset by improvements in Makita’s productivity, other internal cost-cutting
efforts and/or raising the prices of final products, this may have an adverse impact on Makita’s financial condition andresults of operations.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese7Geographic concentration of Makita’s main offices and facilities may have adverse effects on Makita’s businessactivities.
Makita’s principal management functions, including its headquarters are located in Aichi Prefecture, Japan, while theproduction base is located in Kunshan, Jiangsu Province, China. Due to this geographic concentration of Makita’smajor functions, including plants and other operations in certain regions of Japan and China, Makita’s performance
may be significantly affected by the occurrence of major disasters and other catastrophic events, including earthquakes(particularly massive earthquakes in areas such as Kanto, Tokai, Tonankai or Nankai), radioactive contamination,
floods, fires, power outages, and suspension of water supplies.
In addition, Makita’s facilities in China may also be affected by changes in political and legal environments, changes
in economic conditions, revisions in tariff rates, labor disputes, hikes in personnel expenses, epidemics such as
Civid-19 and other factors.
In the event that such developments cannot be foreseen or measures taken to alleviate their damaging impact are
inadequate, it may have an adverse impact on Makita’s financial condition and results of operations.
If any of Makita’s suppliers fail to deliver materials or parts required for production as scheduled, Makita’s
production activities may be adversely affected.
Makita’s purchase activities include those dependent on certain suppliers who cannot be substituted. For example,
when launching new products, sales commencement dates can slip if such manufacturers’ technologies do not satisfy
Makita’s demands or take an inordinate amount of time to satisfy Makita’s demands. This may result in lost sales
opportunities. There is no assurance that Makita would be able to find alternate suppliers, if necessary, that can provide
materials and parts of similar quality and price in a sufficient quantity and in a timely manner. If a supplier cannot
deliver the required quality or quantity of parts on schedule due to reasons including natural disasters, government
regulations, its production capacity or weakened business or financial condition, this may have an adverse effect on
Makita’s production schedules and cause a delay in Makita’s own product deliveries. Any of these occurrences may
have an adverse impact on Makita’s financial condition and results of operations.
If Makita fails to maintain its relationships with its significant customers or if such significant customers reduce
their purchases and sales of Makita’s product, Makita’s sales may be significantly affected.
Although Makita does not have any customer from which it derives 10% or more of its consolidated sales, it has
significant customers in each country. If Makita loses these customers and is unable to develop new sales channels totake their place, or if any such customer faces significant financial difficulties or accumulates a considerable amount of
bad debt, sales to such customers may decline and this may have an adverse impact on Makita’s financial condition andresults of operations. In addition, if significant customers of Makita select power tools from Chinese manufacturers or
select products other than those produced by Makita and sell such products under their own brand instead of Makita’s
products, this may have an adverse impact on Makita’s financial condition and results of operations.
Makita may not be able to protect its intellectual property rights and may incur significant liabilities, litigation
costs or licensing expenses or be prevented from selling its products if it is determined to be infringing theintellectual property of third parties.
In regions significant for Makita’s sales and production, Makita applies for patents, designs and trademarks, andstrives to protect intellectual property rights proactively. However, Makita may not be able to eliminate completely
third party products that infringe on the intellectual property rights of Makita or third party products similar to Makita’s
products. This may have a negative influence on Makita’s results of operations. Moreover, while Makita believes that it
does not infringe on intellectual property rights of third parties, it may be subject to infringement claims from third
parties. When infringement of intellectual property rights is claimed by a third party and becoming trial, Makita may
be required to pay damages or become subject to an injunction prohibiting production and sales of a product. This may
have an adverse impact on Makita’s financial condition and results of operation.
Product liability litigation or recalls may harm Makita’s financial statements and reputation.
Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese8Makita is developing a variety of products including power tools under the safety standards of each country, and is
manufacturing them globally based on the quality standards applicable to each factory. However, a large-scale recall
and a large-scale product liability lawsuit may significantly damage Makita’s brand image and reputation. In addition,
related costs and time incurred through a recall or a lawsuit may affect business performance and financial condition of
Makita if Makita’s insurance policy does not cover the related costs. Accordingly, large-scale recalls and large-scale
product liability lawsuits may have an adverse impact on Makita’s financial condition and results of operations.
If Makita is unable to retain talented personnel, this may have an adverse effect on Makita’s competitivenessand result of operations.
Makita considers the retention and development of talented personnel with the expertise and technological skills tobe critical to its competitiveness. Makita also considers important the development and retention of personnel inmanagement in Makita’s group companies. However, competition in recruiting and retaining global talent requisite fortechnology innovation and management has become increasingly challenging. Given such a labor and social climate,failure of the Makita Group to hire competent employees or develop human resources in accordance with the
management plan or retain experienced employees may have an adverse effect on the business development,
operational results and growth prospects of the Makita Group.
Environmental or other government regulations may have a material adverse impact on Makita’s businessactivities.
Makita maintains strict compliance with environmental, commercial, export and import, tax, safety and otherregulations that are applicable to its business in all the countries and areas in which it operates. In light of theheightened awareness seen across the globe on environmental issues including global warming and climate change,
new environmental or other government regulations designed to decrease environmental impact have been adopted in
all over the world in recent years. Operational results and financial condition of Makita may be adversely affected if
Makita fails to respond to such specifications or terms and conditions, unable to respond in a timely manner, or the costof compliance is greatly higher.
If Makita’s IT operations network halts or malfunctions, Makita’s production and shipment schedule may be
adversely affected.
Makita’s headquarters and its major sales, manufacturing and R&D bases are located in Japan, and its procurement,
manufacturing, sales and product development site are located worldwide. These sites are connected globally throughan operational network. Our service via internet access increases. If Makita’s information network and systems, which
rely on both company networks and systems and third party networks and systems, halt or malfunction due to any
factor, such as natural disasters, wars, terrorist acts, cyber-attack, computer viruses, unexpected intrusion or illegal
operation despite safety measures including security measures or education to employees Makita has undertaken,
Makita may have to delay production and shipments, stop our service or the Company may leak privacy, credit
worthiness and other information such as customer’s personal information and confidential information aboutcompanies and other third parties. This may have an adverse impact on Makita’s financial condition and results ofoperations. In addition, improper use of or accidents involving information network and systems may affect business
operations or reveal confidential or private information, lead to legal liability, lawsuits or monetary damages or damage
on Makita’s reputation or brand images and thereby cause an adverse effect on its operating results.
Fluctuations in stock market prices may adversely affect Makita’s financial statements.
Makita holds certain investments in Japanese equities and investments in trust, and records these investments asshort-term investments and investments on its consolidated financial statements. The value of these investmentschanges based on fluctuations in the quoted market prices. Fluctuations in the value of these securities may have an
adverse impact on Makita’s financial condition and results of operations.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese9【Material contracts】
Not applicable.
【Analyses of Financial Position, Operating Results and Cash Flows】
The consolidated financial statements of the Makita Group are prepared in accordance with International Financial
Reporting Standards (hereinafter “IFRS”). Analyses and discussions of the Company’s Financial Position, Operating
Results and Cash Flows are based on its Consolidated Financial Statements.
This report may constitute “forward-looking statements” based on our assumptions and assessment. The power tools
market where the Company operates may be subject to sudden changes in economic circumstances, demand for
housing, foreign exchange rate, changes in the competition with rival enterprises and other factors. These changes inrisk and circumstances may bring about significantly different results from those described in this report. Accordingly,
the description related to the future is the Company’s own judgment and does not state its reliability.
【Overview of operating results】(1) Overview of operating results for the fiscal year ended March 31, 2022
General Overview
Makita’s principal business is manufacturing and sales of power tools for professional users worldwide. During thisfiscal year, 84% of Makita’s sales were outside of Japan. Makita is affected to a large extent by demand for power tools
worldwide, which in turn is influenced by factors including housing starts, demand for household renovations, public
investment and private capital expenditures.
Net Sales
Makita’s consolidated net sales for FY2022 amounted to 739,260 million yen, an increase of 21.5%, or 130,929
million yen, from FY2021. In FY2022, the average Japanese yen-U.S. dollar exchange rate was 112.39 yen for U.S.
$1.00, representing a 5.9% devaluation of the Japanese yen compared to the average exchange rate in FY2021. The
average Japanese yen-euro exchange rate in FY2022 was 130.55 yen for 1.00 euro, representing a 5.5% devaluation of
the Japanese yen compared to the average exchange rate in FY2021. During the year, the weighted average of theJapanese yen’s devaluation against other currencies was 6.3%. That favorable currency translation effect increased
Makita’s sales by 36,600 million yen. Excluding the effect of currency fluctuations, consolidated net sales would haveincreased by 15.5% or 94,329 million yen in FY2022. Sales quantity increased by 12.6%.
Developed countries in North America and Europe have mature markets for DIY products, and demand for power
tools in developed countries is affected by changes in consumers spending. Demand for power tools in emerging
countries is expected to expand as their economies grow.
Developments in technology have also driven the market for power tools. In particular, in recent years thedevelopment of rechargeable electric tools featuring small, light and high-capacity lithium-ion batteries has resulted in
an increased demand for rechargeable electric tools.
Makita has established a solid presence worldwide with its portable power tools, however, competition isintensifying on a global basis.
Looking at the international economic situation during the fiscal year under review, while economic and social
activities have been normalized, particularly in developed countries, in line with the rollout of the COVID-19 vaccine,the future remains uncertain due to shortages of goods and logistics disruptions in the supply chain, rising prices, theresurgence of infections caused by coronavirus mutations, and the growing international tension surrounding the
Ukraine issue.
Against this backdrop, our group focused its development efforts on expanding its lineup of rechargeable finishedgoods, including power tools and outdoor power equipment, in the "40Vmax Lithium-ion Battery" series, which offers
high power, long life and high durability.
On the production side, we worked to increase production in response to increasing demand and to promote
multi-polarized global production
On the sales side, we focused on increasing the level of the community-based and customer-oriented service
Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese

10

framework in order to further strengthen trusting relationships with customers around the world. We strive to deepenand develop the market centered on cordless products.
In terms of profit, operating profit increased 3.7% year-on-year to 91,728 million yen (an operating margin of
12.4%) due to an increase in revenue, despite higher costs due to higher transportation costs. Profit before tax increased
6.1% year-on-year to 92,483 million yen (a profit before tax rate of 12.5%), and profit attributable to owners of theparent company increased 4.4% year-on-year to 64,770 million yen (a profit rate attributable to owners of the parent
company of 8.7%).
Makita’s management goal is to generate substantial profits and maintain a 10% operating margin (ratio of operating
income to net sales) through sustainable growth on a consolidated basis. Furthermore, as a medium-to-long-term
strategy, Makita aims to enhance its brand value to attain and maintain its position as a leading multinational,
integrated supplier of all types of tools such as power tools for professional use, pneumatic tools and gardening
equipment.
Makita believes that this goal can be attained through the development of new products that bring high satisfaction
to professional users; concerted global production systems targeting both high-quality and cost competitiveness; andthe maintenance of industry-leading sales and after-sales service systems nurtured in Japan and extended overseas. To
implement the foregoing, Makita is working to maintain a solid financial structure that responds well to unexpectedchanges in the business environment, including the risk of exchange rate fluctuations, geographical risks and the risk
caused by the concentration of its management resources and manufacturing facilities.
The global economic situation is gradually returning to normal, and we expect the steady demand in the market ofour products. On the other hand we concern over the durability of the staying-at-home demand occurred in FY2022
and uncertainties about the future.
Review of Performance by Product GroupPower Tools
The power tools group offers a wide range of products such as drills, hammer drills, grinders, cordless impact
drivers and circular saws. These products represent the largest portion of Makita’s consolidated net sales. In FY2022,
sales of power tools increased by 18.5% from the previous fiscal year to 422,076 million yen, accounting for 57.1% ofconsolidated net sales. In Japan, sales of power tools increased by 0.1% to 54,724 million yen, accounting for 46.4% of
domestic net sales. Overseas sales of power tools increased by 21.8% to 367,352 million yen, accounting for 59.1% of
overseas net sales.
New products launched during FY2022 included;
・Cordless Grease Gun that provides high pressure discharge and high discharge rate
・Cordless Plunge Cut Circular Saw that provides stable work by controlling constant rotation
・Cordless Combination Hammer that provides faster drilling-speed than AC 100V machine・Cordless Recipro Saw that provides the fastest speed and overwhelming less vibration
Gardening Equipment, Household and Other Products
Principal products in Makita’s gardening equipment and household products group include chain-saws, brush-cutters,
vacuum cleaners and cordless cleaners. In FY2022, sales of gardening equipment, household and other products
increased by 28.1% to 189,579 million yen, which accounted for 25.6% of consolidated net sales. Domestic sales ofgardening equipment, household and other products increased by 7.3%, to 38,538 million yen, accounting for 32.6% of
total domestic sales. Overseas sales in the product category increased by 34.8%, to 151,041 million yen, accounting for24.3% of total overseas sales in FY2022.
New products launched during FY2022 included;
・Cordless Hedge Trimmer that provides usability more than petrol engine machine・Cordless Grass Trimmer that provides powerful cutting and less vibration comparable to 40ml petrol engine machine・Cordless Vacuum Cleaner that provides strong suction power and quiet performance
Parts, Repairs and Accessories
Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese11Makita’s after-sales services include the sales of parts, repairs and accessories. In FY2022, the sales of parts, repairs
and accessories increased by 22.5%, to 127,605 million yen, accounting for 17.3% of consolidated net sales. Domestic
sales of parts, repairs, and accessories increased by 10.3%, to 24,788 million yen, accounting for 21.0% of domestic
net sales. Overseas sales of parts, repairs and accessories increased by 25.9%, to 102,817 million yen, accounting for16.6% of overseas net sales.
Consolidated revenue by region are as follows:
In Japan, sales of both power tools and outdoor power equipment, particularly lithium-ion battery products, werestrong and increased by 4.4% compared with the same period of previous year to 118,050 million yen.
In Europe, while stay-at-home demand slowed down, demand for tools at active building and construction sites
and sales of cordless outdoor power equipment continued to be strong, resulting in an increase in sales of 24.7% year
on year to 352,470 million yen. Sales in Western Europe increased by 20.3%, in Eastern Europe including Russia
increased by 32.4% compared with the same period of previous year. Excluding the effect of currency fluctuations, net
sales in Western Europe increased by 12.8%, in Eastern Europe increased by 26.4%, and Europe in total, increased by
17.7%.
In North America, sales of power tools accompanied by strong housing demand and sales of cordless outdoor
power equipment were strong, resulting in an increase in sales of 23.4% year on year to 112,248 million yen.
Excluding the effect of currency fluctuations, net sales in North America increased by 15.8%
In Asia, COVID-19 cases increased again in various regions affecting our sales activities, but sales in Taiwan andSoutheast Asia were strong, resulting in an increase in sales of 25.1% year on year to 49,196 million yen. Excluding
the effect of currency fluctuations, net sales in Asia increased by 17.7%.
In Central and South America, inflation accelerated in many countries; however, sales activities to capture solid
demand for tools resulted in an increase in sales of 42.0% year on year to 41,765 million yen. Excluding the effect of
currency fluctuations, net sales in Central and South America increased by 34.7%.
In Oceania, sales increased by 24.9% year on year to 51,579 million yen due to strong demand for tools atbuilding and construction sites despite the impact of lockdowns due to the resurgence of new cases of infection in
major cities. Excluding the effect of currency fluctuations, net sales in Oceania increased by 14.4%.
In the Middle East and Africa, sales increased by 20.5% year on year to 13,952 million yen as the demand fortools at building and construction sites in each country was captured although unstable political and economic
conditions continued. Excluding the effect of currency fluctuations, net sales in Middle East and Africa increased by
14.3%.
Regional Segments
Segment information described below is based on the location of the Company and its relevant subsidiaries. Sales bysegment are based on the locations of the Company or its relevant subsidiaries that transacted the sales and,accordingly differ from the geographic area information provided elsewhere in this document.
We evaluates the performance of all reportable segments using accounting standards generally accepted by IFRS. The
method of calculating operating income for each segment is equivalent to the method of calculating operating incomein the consolidated statement of income, not including interest income and dividends, interest expense, foreignexchange gains and losses, gains and losses on sales of financial assets and valuation gains and losses on financial
assets and liabilities.
Japan Segment
In FY2022, sales in the Japan segment increased by 41.7% on a year-over-year basis, amounted to 536,794 million yen.
Sales to external customers increased by 7.5%, amounted to 141,244 million yen, which accounted for 19.1% ofconsolidated net sales. This was due to strong sales in the domestic market, and increase in intercompany transaction
due to the strong sales all over the world. Due to the increase in transportation cost, operating income ratio decreasedby 2.4 percent point to 5.8% in FY2022 from 8.2% in FY2021. Operating income increased by 0.1%, amounted to31,127 million yen.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese12Europe Segment
In FY2022, sales in the Europe segment increased by 26.3% on a year-over-year basis, amounted to 375,254 million
yen. Sales to external customers increased by 24.7%, amounted to 354,561 million yen, which accounted for 48.0% ofconsolidated net sales. This was due to strong sales corresponding demands for tools at active building andconstruction sites and sales of cordless outdoor power equipment. More increase in net sales than the increase inoperating expenses increased operating income ratio by 0.5 percent point to 10.5% in FY2022 from 10.0% in FY2021.
Accordingly, segment income increased by 32.0%, amounted to 39,399 million yen in FY2022.
North America Segment
In FY2022, sales in the North America segment increased by 24.0%, amounted to 120,367 million yen. Sales toexternal customers increased by 23.5% to 114,635 million yen, which accounted for 15.4% of consolidated net sales.
This was due to the strong sales of power tools accompanied by strong housing demand and sales of cordless outdoor
power equipment. Due to increase in transportation cost affected by logistics disruptions in the supply chain, operating
income ratio decreased by 3.1 percent point to 0.7% in FY2022 from 3.8% in FY2021. Accordingly, segment income isdecreased by 78.2%, amounted to 803 million yen in FY2022.
Asia Segment
In FY2022, sales in the Asia segment increased by 52.6%, amounted to 443,833 million yen. Sales to externalcustomers increased by 22.1%, amounted to 30,823 million yen, which accounted for 4.2% of the consolidated net
sales. This increase reflects the increase of the intercompany transaction due to the strong sales all over the world andthe steady sales in Taiwan and South East Asia. Due to the appreciation of Chinese yen and the impact of risingtransportation cost, operating income ratio decreased by 2.7 percent point to 4.4% in FY2022 from 7.1% in FY2021.
Accordingly, segment income decreased by 6.3%, amounted to 19,408 million yen in FY2022.
Other Segment
In FY2022, sales in the other segment increased by 31.1%, amounted to 98,470 million yen. Sales to externalcustomers increased by 31.5%, to 97,997 million yen, which accounted for 13.3% of the consolidated net sales. This isdue to the good sales. Due to more increase in net sales than the increase in operating expenses operating income ratio
increased by 4.2 percent point to 10.0% in FY2022 from 5.8% in FY2021. Accordingly, segment income increased by
126.7%, amounted to 9,879 million yen in FY2022.
Financial Position
Million yen
2021

2022

Increase/Decrease

Assets812,878

1,007,497

194,619

Liabilities

149,552

254,967

105,415

EquityEquitypershareattributable to owners of
the parent (yen)Ratio of equity attributableto owners of the parent tototal assets (%)

663,326

752,530

89,2042,422.80

2,748.64

325.8480.93%

74.08%(6.85%)

Total assets as of the end of the year increased by 194,619 million yen to 1,007,497 million yen compared to thebalance as of March 31, 2021. This increase was mainly due to the rise in “Inventories” and “Property, plant andequipment.”
Total liabilities increased by 105,415 million yen to 254,967 million yen compared to the balance as of March 31,
2021. This increase was mainly due to the rise in “Borrowings.”
Total equity increased by 89,204 million yen to 752,530 million yen compared to the balance as of March 31, 2021.
Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese13This increase was mainly due to the rise in “Retained earnings.”
Cash Flows
Million yen
2021

2022

Cash flows from operating activities

64,537(103,660)

Cash flows from investing activities(42,913)(27,891)

Cash flows from financing activities(23,036)

52,6265,201(77,583)

148,640

71,057

Increase (Decrease) in cash and cash equivalents
Cash and cash equivalents at end of period

Total cash and cash equivalents amounted to 71,057 million yen, decreased by 77,583 million yen compared to theend of the previous year.
Net cash used in operating activities amounted to 103,660 million yen (net cash provided by operating activities
amounted to 64,537 million yen in the previous year), up 168,197 million yen over the previous year due mainly to anincrease in inventories.
Net cash used in investing activities amounted to 27,891 million yen (42,913 million yen in the previous year), down
15,022 million yen over the previous year, due to decreases in payments into time deposits.
Consequently, free cash flows (the sum of cash flows from operating activities and investing activities) amounted to-131,551 million yen (21,624 million yen in the previous year), down 153,175 million yen over the previous year.
Net cash provided by financing activities amounted to 52,626 million yen (net cash used in financing activities
amounted to 23,036 million yen in the previous year), up 75,662 million yen over the previous year, due to an increasein short-term borrowings.
The main source of liquidity of the Group consists of cash on hand, cash and deposits obtained from business activities,
and borrowing within the credit limit.
Currently, we raise the funds by putting in place the cash management system within the group and we are also
leveraged in order to ensure the enough liquidity as a group.
There were 71,057 million yen in cash and cash equivalents at the end of the current consolidated fiscal year and
128,200 million yen in credit limit, which was partly used 79,674 million yen and unspent 48,526 million yen. There
were 79,674 million yen in short-term borrowings, which was used for our daily business activities.
Part of borrowings is on a variable rate basis, there is no materiality in impact on our profit by the fluctuation inmarket interest ratio as it is all short-term. In terms of average interest rate of borrowings, refer to the note 13.
We have maintained a higher current ratio than before, and at the end of the current consolidated fiscal year, there
were 71,057 million yen in cash and cash equivalents. We expect that these cash and the cash generated by ourbusiness activities will be sufficient for future demand for working capital, capital investment and research anddevelopment, and believe that working capital is sufficient according to the current needs.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese

14

【Production, Orders Received and Sales】
Makita does not present orders received in amount or in quantity because it operates under make-to-stock
manufacturing system.
Production volume, based on selling price, for this fiscal year increased by 186,926 million yen (38.7%) to 669,425
million yen compared to the previous year.
Consolidated net sales for this year increased by 21.5% to 739,260 million yen compared to the previous year.
Because Makita operates in a single business of manufacturing and selling mainly power tools, and has organized asa single business division, no explanations are provided for in the context of business segments.
【Research and development】
As an global supplier of power tools that benefit people’s daily lives and assist in home improvements, Makita
pursues the development of power tools, gardening equipment and pneumatic tools in its own Research andDevelopment division, 1,337 of Makita’s employees are engaged in research and development of technologies in which
Makita has a competitive edge and the development of new products.
Makita regards R&D as a high priority and believes that having a strong capability in R&D is crucial to its
continuing development of high-quality, reliable products that meet users’ needs.
In FY2022, Makita allocated 14,781 million yen (including the development cost that has been capitalized) to R&D,
an increase of 9.6% compared with FY2021. As of March 31, 2022, Makita owned 4,925 patents, utility model
registration and design rights (inclusive of 3,910 patents and utility model registration) in and outside of Japan.
Makita is placing greater emphasis on the expansion of cordless tools running on li-ion batteries. Makita is
expanding lineup of cordless tools such as ones achieved high speed equivalent to engine powered or conventional AC
corded equipment, ones realized further small and light design, and ones enhancing more user comfort in work place.
In the field of outdoor power equipment (OPE), regulation for gas emission has been tightened in accompany withincreasing awareness of health and living environment.
Makita is also placing emphasis on market survey through our global sales channel in order to develop, in a timely
manner, new products that meet the needs for whole users.
New products launched during FY2022 included;
・Cordless Impact Driver that provides comfortable work at any range of load by a new feature
・Cordless Recipro Saw that provides high power more than AC tools with reducing fatigue by less vibration
・Cordless Power Cutter that provides faster cutting speed and less vibration than petrol tools by brushless motor
powered by 2 batteries.
・Cordless Air Duster that provides all kinds of application at site or home use by changing the accessories on head
Because Makita operates in a single business of manufacturing and selling mainly power tools, and has organized as asingle business division, no explanations are provided for in the context of business segments.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese

15

【Facilities and Equipment】(1)Head Office
As of March 31, 2022
Net Book Value (Millions of Yen)
Office Name
(Location)

Content ofFacilities

Buildings

Machinery andEquipment

Land[Square Meters]

Makita Corp
(Anjo, Aichi)

R&D

13,8396,405

251[40,330]

20,495

1,205

Okazaki Plant(Okazaki, Aichi)

Production

18,596

6,560

2,997
[188,269]

28,153921

Nisshin(Nisshin, Aichi)

R&D

1,459

131

1,818
[43,102]

3,408

162

Kanto Distribution Center(Kazo, Saitama)

Distribution

11,088

2,090

1,533
[34,833]

14,711

4

Tokyo Branch(Bunkyo, Tokyo)

Sales point

211

29

57
[323]

297

33

Nagoya Branch(Nakamura, Nagoya)Same as above

213

2

352
[1,238]567

33

Osaka Branch(Kita, Osaka)

Same as above

665

1

69
[335]

735

35

Total

Number of
Employees

Note: Right-of-use assets are included.

(2)Overseas Subsidiaries
As of March 31, 2022
Net Book Value (Millions of Yen)

Number of
Employees (average
number of
temporary staff)

Contents ofFacilities

Buildings

Machinery andEquipment

Land[Square Meters]

Atlanta
U.S.A.

Production

291

347

96
[230,825]

734

141
(259)

Makita (China) Co.,Ltd.

Kunshan
China

Same asabove

15,97014,537808＜220,834＞

31,315

5,070
(506)

Makita (Kunshan)Co., Ltd.

Kunshan
China

Same as
above

2,635

2,720

228
＜87,683＞

5,583

2,029
(205)

MakitaManufacturing
Europe Ltd.

TelfordU.K.

Same as
above

550

584

161
[50,600]

1,295

524
(156)

Makita Engineering
Germany GmbH

Hamburg
Germany

Same as
above

7,092

668

666
[58,366]

8,426

231
(291)

Makita EU S.R.L.
(Romania)
Makita do Brasil
Ferramentas
Eletricas Ltda.
MakitaManufacturing(Thailand) Co., Ltd.

BranestiRomania

Same asabove

12,535

5,323

1,002
[291,166]

18,860

2,488
(353)

PontaGrossa
BrazilSame as
above

1,298

1,609

590
[151,062]

3,497

903
(119)

Sriracha,ThailandSame as
above

1,645

1,999

1,174
[172,436]

4,818

601
(311)

Company Name

Location

Makita Corporationof America

Total(Attention)
1.
2.

＜ ＞ means rental from other than Makita Group.
( ) means average numbers of temporary staff for this Fiscal Year.

Partial Translation of "YUKASHOKEN HOKOKUSHO" originally issued in Japanese16