Introduction

CEO Message

IDEC Report 2024

While there is still a strong sense of uncertainty, we will actively implement operational
reforms to create a corporate structure that is unaffected by external conditions, andcan ensure high profitability.
Shifting to a global mindset is crucial for the future expansion and developmentof the IDEC Group’s business. Overseas net sales account for 70% of our core

Data andCompany Overview

6Accelerating organizational management and awarenessreforms to reborn to a “New IDEC”
Foundation forValue Creation

Toshi K. Funaki

Business Strategy

Chairman and Chief Executive OfficerIn FY2023, there was strong global demand for capital expenditures in the manufacturingindustry, and both net sales and profits reached record highs. However, due to the impact
of disruption to the supply and demand balance since the Covid-19 pandemic, and theseemingly abnormal business conditions of the past two years, the actual market had
not grown as much as our growth in sales.
As a result, inventories increased globally, at distributors, end users, and IDEC
itself, resulting in a significant divergence from actual demand, and a major decline
in both net sales and profits in FY2024. Aside from these external factors, I believethat another factor behind this result was IDEC’s own constitution and organizational
structure that have been unable to keep up with changing times. While we have agood corporate culture that has been cultivated over the course of many years, it canalso have negative effects.
As the market and external environment are undergoing drastic changes, as in thiscase, it is necessary for us to identify the changes, to pause and assess the essenceof the situation, and to either stop, or try to change what we have been doing until now.
This, in my opinion, is the essence of a “mindset for change”.
The situation in FY2025 is likely to remain tough, and we believe that full-fledged
recovery and expansion of our business performance will not begin until FY2026 or later.
However, times of crisis also present opportunities for us to implement reforms for ournext leap forward. The IDEC Group is working together as a whole to ensure that all
employees share this mindset for change, and implement fundamental reforms globally,to transform the company into a highly profitable organization.

Initiatives for
Realization of Vision

Challenging business conditions led to a decrease in
net sales and profits in FY2024, but we are implementing
reforms to make a leap forward

Value Creation Story

While net sales and profits decreased in FY2024, the IDEC Group regards this as an opportunity to implement reforms for its next leap forward,
and is working as one to achieve this transformation. In particular, we believe that shifting to a global mindset is crucial for the future expansion
and development of the IDEC Group’s business, and are accelerating reforms both to our organizational management and mindset in order toreborn to a “New IDEC” and become a truly global company.
By implementing various initiatives on a global basis, we will establish an organizational structure that will enable us to achieve an operating
profit margin of 20% in the long term.

Message

The IDEC Group aims to transform itself into a highly profitable organization by advancing fundamental reforms
globally, and to provide products and solutions that contribute to solving societal issues.

Introduction

CEO Message

Messageproducts, and we expect that ratio to increase further in the future. This means that
it is more essential than ever for us to pursue business strategies that focus on theglobal market, and to actively implement progressive business reforms.
Becoming a global company, in the true sense of the word, is impossible without
the overall optimization from a global and consolidated basis that broadens ourhorizons as far as possible, rather than just the individual optimization of eachGroup company or region. To increase operational efficiency, we are actively sharing
information and encouraging organizational interactions between Group companies,
standardizing and working to thoroughly eliminate redundant operations. We arepromoting exchanges between executives beyond locations, such as our IDEC headoffice, APEM, and in the USA, and restructuring the organization as a whole. Since
we will not be able to survive unless we grow globally, we will continue to devote
ourselves to overall optimization on a consolidated basis.

Value Creation Story
Initiatives for
Realization of Vision

IDEC Report 2024

To address diversified customer needs and societal issues, we aim to increase ouradded value by combining various products and strengthening our proposal ofoptimal solutions.
To strengthen the core products of our solution sales, we will launch new HMI(Human-Machine Interface) and safety-related products, and have also acquired ez-Wheel(France) as part of the IDEC Group. With the acquisition of ez-Wheel, we are seeking tostrengthen our transfer/logistics solutions at manufacturing and logistics sites, where theintroduction of Automatic Guided Vehicles (AGV) and Autonomous Mobile Robots (AMR)
is progressing at an accelerated pace. Since IDEC’s HMI and safety-related products will
be installed and sold as solutions, we can also expect to see significant synergy effects.

Data andCompany Overview

7To strengthen our marketing capabilities leveraging digital transformation (DX), weare conducting market analysis, assessing market size, and collecting and utilizing
data on target customers and applications.
We are also engaged in projects to implement an Enterprise Resource Planning(ERP) platform, which is an integrated core business system, and a Supply Chain
Planning (SCP) system, that will enable supply chain planning globally, which weplan to roll out starting from Japan. With the introduction of these new systems, weaim to consistently manage various business processes and achieve more efficient
operations by ensuring mutual integration among the systems.

Increasing added value through further expansion ofsolutions sales

Foundation for
Value Creation

As part of our efforts to become a more highly profitable organization, we are
optimizing our global production and supply system with an emphasis on efficiency,
and implementing reforms in our manufacturing sites, global procurement, and supply
chain, among other areas.
In addition to in-house production, we will clarify the roles of Electronics
Manufacturing Service (EMS) and outsourcing in our production system to significantly
reduce costs and ensure higher quality, thereby reducing our cost ratio. At the sametime, we will review our global production system with an emphasis on efficiency.
In terms of our supply chain function, we are working to reduce costs and optimize
on a global basis, enhancing our global purchasing, supply chain, and production
capabilities, ensuring a bidirectional supply system that includes APEM.

Improving operational efficiency through DX

Business Strategy

Strengthening global competitiveness through reforms inproduction, procurement, and the supply chain

Introduction

CEO Message

We formulated our long-term vision: Vision for 2050 in 2023. In order to realize thislong-term vision, it is essential for us not only to create economic value through ourbusiness activities, but also to improve social value through sustainability activities.

Pioneer the new norm
for a safer and sustainable world.

50%

FY2051(Target)Carbon neutrality

reduction** Scope1&2, vs. FY2020

Human capital investment

To further strengthen our human resources management, we are working on revising
our personnel systems, implementing multi-faceted evaluations, and enhancing ourtraining structure and global talent management.
We plan to introduce a talent management system in FY2026 to manage
personnel data globally. We will advance the visibility of our human resources andmaximize our organizational capabilities, allowing us to uncover talent and allocate
them appropriately.
Looking to the future, the IDEC Group is seeking the following kinds of individuals.

Have a global mindset
 assion for implementing business reforms and willingnessPto take on difficult challenges

Strengthening governanceOur executive remuneration system was revised in FY2023, and it was applied
in FY2024. KPIs for performance-linked remuneration reflect not only financial
indicators such as operating profit margin and Return on Invested Capital (ROIC),
but also non-financial indicators such as reduction ratio of CO 2 emissions andexternal ESG evaluations.
The Nominating Committee considers and deliberates over the nomination ofcandidates for director, plans to cultivate candidates for the next-generation of top
management and succession plans, and has already begun plans to develop thenext-generation management.
Governance P.43

 lways be conscious of productivity, making continuousAefforts to improve production efficiency

Business Strategy

IDEC will drive the future of manufacturing by creating new possibilities
and establishing new standards that will become the “new norm” oftomorrow’s world. Through our efforts, we envision a safer and a moresustainable world, bringing happiness and ANSHIN for all.

24%

reduction*

FY2031(Target)Initiatives for
Realization of Vision

Vision for 2050

FY2023-2025(Target)Value Creation Story

Advancing sustainability activities aimed at achieving
sustainable growth

Reduction ratio of CO 2 emissions

Message

We have received hundreds of inquiries from automobile manufacturers,
construction machinery manufacturers, AGV and AMR manufacturers, and sales
are expected to increase gradually going forward. Although sales are currently
available only in Europe and Japan, we also plan to expand to other regions suchas the USA in the future.
By strengthening sales of such problem-solving solutions, we will aim to improve
our global competitiveness.

In closingResponse to climate change

8IDEC Report 2024

Data andCompany Overview

Environment P.55

Human Capital P.60

As I mentioned at the beginning, the business environment for FY2025 is likely toremain challenging, but by implementing various initiatives on a global basis we will
establish an organizational structure that will enable us to achieve a cost ratio of 50%,
SG&A ratio of 30%, and operating profit margin of 20% in the long term.
Going forward, we will continue to aim for sustainable growth and improvementof corporate value, to enable us to meet the expectations of our stakeholders.

Foundation for
Value Creation

To achieve carbon neutrality by 2050, we renewed our Environmental Policy—whichsummarizes our corporate philosophy and action guidelines for environmental issues
in April 2024. We have also set CO2 emissions reduction targets toward achievingcarbon neutrality.

We would like to create a company capable of achieving sustainable growth bydeveloping employees who strive to increase their productivity and are unafraid tochallenge themselves without fear of failure.