2020-2021

ReportYear ended December 31, 2020

The corporate motto of HORIBA is“Joy and Fun.”
We believe that if we take interest and pride in the workthat occupies so much of our lives,and in the workplaces where many of us spend
a large part of each day, then our satisfaction in life will increase,
and we will be able to enjoy our lives
even more as a result.

01

HORIBA Repor t 2020-2021

02

Confront headwinds with continual investment
for growth by balanced management

Atsushi Horiba
Chairman & Group CEO

2020 was a year when we were underan extremely difficult businessenvironment due to the global spread of
COVID-19. HORIBA responded to thisdifficult situation with strong andcontinuous efforts and human resource
capabilities, and as a result, an
operating income margin of 10.5% wasachieved (up 0.1 point from theprevious year), which is the almost
same result as 2019, despite sales,
operating income, ordinary income, andnet income, for the fiscal year ended
December 2020 not reaching theprevious year’s results.
HORIBA has achieved growth throughbalanced management by flexibly
utilizing management resources andcontinually investing in each segment.
By owning five business segments indifferent markets, the group as a whole
was able to secure a surplus even in the2008 global financial crisis, because
Scientific and Medical-Diagnostic
covered the decline in the Automotive

and Semiconductor segments. The
same is true even now when HORIBA is
greatly impacted by COVID-19. Many
industries are stagnant, and especiallythe prospect of the automotive industry,
which is undergoing a majortransformation, is also extremely
uncertain. On the other hand, demand
for semiconductors is increasing
worldwide, and HORIBA’s
Semiconductor segment also secured
significant increases in sales and profits
in 2020 and led the performance of theentire group. Targeting various
industries in this way is particularly
effective in emergency situations.
I recognize that changes in the businessenvironments surrounding HORIBA will
accelerate and be more intense thanever before, and thus HORIBA willcontinue to promote balanced
management as a way of managementthat can flexibly respond to changes,
even in the face of headwinds.

Textbooks do not teach everything.
Read the current trend withtechnology and intuition.
    

032020 was the year when the world was forced to make big changes
and, at the same time, we reconsidered what HORIBA’s strengths are.
Based on the world’s top-level basic technology and the ideas andskills of each person who can utilize that technology, HORIBA has
begun to create new value in various fields more than ever.
We will open up these turbulent times with a sense of crisis and theability to read changes in the current situation.

HORIBA Repor t 2020-2021

04    

Our Strengths are from“HORIBA as a provider of technology”
Today, various social issues are
emerging, and the world is changing
drastically, as shown in digitaltransformation and the mobility
revolution. I recognize these changes incurrent trends as opportunities.
Energy-related issues are an example;
HORIBA can provide various solutions,which are brought from all thetechnologies we possess, in allprocesses of “generation,” “storage”
and “utilization.” In the energy market, itis necessary to think about businessdevelopment from a new perspective,
beyond the boundaries of segments,
and it may take time to reach a certain
business scale. However, HORIBA’s
current main product, the emission
measurement systems, was originallydeveloped as a device for analyzing
human exhalation, and it was a productthat found new value by changing the
viewpoint.
Providing products using practicaltechnology born from solid basic
research is still HORIBA’s strength.
Furthermore, we will not only provide
measurement technologies as devices,05

but also proactively propose solutions,
including the skills possessed byengineers, as a strength. HORIBATechno Service Co., Ltd., which
recently established a new head officebuilding, is participating in the analysis
project of samples brought back fromthe asteroid Ryugu by the asteroid
explorer Hayabusa2, but this analysis isby no means easy. In order to identify
substances without damaging thesample, high-precision measurement
equipment and highly skilled engineers,
who can analyze it, are mandatory. I feelhonored that HORIBA was invited tothis project not only because wepossess the technology to manufacture
the world’s top level measurement
equipment, but also because theabilities of HORIBARNs* are highly
regarded.
By refining our strengths in this way, I
am convinced that the markets in which
HORIBA can contribute will expand
infinitely.
* HORIBARIANs: All HORIBA workers are regarded as family
and called HORIBARIANs as a nickname.

HORIBA Repor t 2020-2021

06    

Flexibility, not simply following textbooks,
is necessary to predict changes
One of my concerns is the spread of theperception that “acting according to
textbooks is excellent” in the Japanese
education field. In such education, it isdifficult for students to acquire the ability tothink and act creatively based on theknowledge learned. Without the power tothink and act on your own, you can onlychange the model of existing products, and it
may be difficult to create unique products
from scratch. I think that you can accumulate
the power to predict changes and refine yoursense of business by building a database ofexperiences inside yourself from various
experiences other than textbooks.
From management’s point of view, I thought
the tide of the business environment hadchanged even before the spread of
COVID-19, and thus I was not surprised somuch by the change in the current situation.
This is because management cannot be
controlled according to logic and textbooks.
The role of management is to look ahead, set
the direction of business and the company,
and lead the organization by utilizing thesense and wisdom gained from experiences
and learning.
In 2020, physical movement and interactions
with people were severely restricted, but wewere able to manage group companies
globally by utilizing online communication
tools introduced in 2019. In Japan, the Good
Place work system, which was introduced in2019 by developing the traditional
telecommuting system, also supported us towork flexibly and efficiently in a remoteenvironment. As the top of management, I
believe that continual investment in company
growth with an eye on the future is important,both in normal times and in difficult businessenvironments.
07

HORIBA expects diverse human resources toshine in their own places, like stained glassthat shines in a variety of ways. HORIBA’s
significant power is from human resources
who can play their roles by exerting theirabilities, such as people who achieve results
as a team through management skill andwho pursue new technologies thoroughly.
The reason why we were able to continue ourbusiness, despite the severe impact of the
spread of COVID-19, is that HORIBARIANs
have been showing leadership in their own
responsibility and always aiming for thehighest level. Many of them learned that new
approaches and challenges, which are not an
extension of the past, are necessary when ina crisis, and put that into practice. For
example, the semiconductor business, which
is currently the sole driver of businessperformance, had previously experienced adifficult situation in which the semiconductor
market itself was temporarily sluggish, andoperations were drastically reduced. HORIBA
continued to invest in the semiconductorbusiness despite such a severe businesssituation. We believe that the unconquerable
spirit of HORIBARIANs, who enduredifficulties, and the trust in the company,
which continues to invest even in difficult
circumstances, have led to the remarkableprogress of the semiconductor business
today.
A sense of crisis is what each employee feels
seriously when work cannot be done as
usual. HORIBARIANs, who can always ask
themselves to take new approaches andchallenges with a sense of crisis, propose
new approaches, and boldly take onchallenges, are the driving force to grow
HORIBA significantly.

Go back to the basics because of this turbulent time
While I recognize the advantages of the
maneuverability and efficiency ofcommunicating online, I am very interested
in the fact that voices from group companies
all over the world have been raised statingthat face-to-face communication is also
important. Casual conversations andexchanges of ideas in post-meetingin-person gatherings, which were held every
time before the online meetings wereintroduced, played an important role inbuilding relationships of trust. It is a great
asset for HORIBA that many HORIBARIANs
recognize that these occasions are important.
By combining the values of both online andface-to-face, I believe that society willchange to an era where 1 + 1 = 2 is not the
only case, but also the case is to spread to
3 and 4. HORIBA has the foundation to
respond to such changes and already
implements various activities. In thisturbulent time, we will return to the spirit of
the corporate motto “Joy and Fun” andcreate corporate value by leveraging thestrengths of HORIBA that we have built up
so far. I ask for your continued
understanding and support in 2021.
April 2021

Atsushi Horiba

Chairman & Group CEO

HORIBA Repor t 2020-2021

08

01 Corporate motto “Joy and Fun”
03 CEO message
10 Editorial policy
11 President message
13 HORIBA supports the supply ofsemiconductors
15 Business outline:

Semiconductor / Scientific /Medical-Diagnostic

2020-2021

Report21 Keywords for innovation:
Diversity and Total Optimization
25 Business outline

Automotive / Process & Environmental

29 Promoting business collaboration
31 Broadening of our service business
33 COO message
35 HORIBA’s management• Regarding our use of the term “owners” (shareholders)

HORIBA fully recognizes the importance of its shareholders and frequently refers to them as“owners.”• Regarding our use of HORIBA and HORIBA, Ltd.

In this HORIBA Report, the HORIBA Group of companies is described as“HORIBA” and the parent company as “HORIBA, Ltd.”• Market Share

Market shares stated in this report are HORIBA’s estimates as of fiscal 2020.

• Change in Revenue Recognition Standard

HORIBA, Ltd. and its domestic consolidated subsidiaries had formerly recognized revenue
mainly on a shipping basis. However, starting from fiscal 2016, HORIBA, Ltd. and its domestic
consolidated subsidiaries changed their revenue recognition method to recognize revenue on
a completion-date-of-installation or delivery-date basis under the terms and conditions of therelevant contracts. The amounts in or before fiscal 2015 are not retrospectively revised.

• Disclaimer regarding future plans and forecasts

This HORIBA Report contains certain statements describing future plans, strategies, andperformance forecasts of HORIBA, Ltd. and its affiliated companies. These statements reflect
forecasts estimated on management’s assumptions and beliefs based on the information
available as of April 30, 2021. Actual performance may differ due to unforeseen circumstancesin the operating environment and other factors.

Regarding the importance and comprehensiveness of
information in the HORIBA Report 2020-2021
We have selected financial and non-financial information that we believe to be ofhigh importance for inclusion in the HORIBA Report 2020-2021.
For more detailed information, please see our website.
The PDF version of the HORIBA Report 2020-2021 is also available through our website.

HORIBA’s value creation cycle

HORIBA Report

Technology / Human Resources

41 CFO message
45 HORIBA and ESG Investing
47 Corporate Governance
51 List of management members
55 Financial Data

Widevariety

WebsiteIR information
Web Link

Range ofTargetReaders

HORIBA Report
2020-2021

CSR information
Web Link

Limited
Summary

Contents

Details and data

59 Investors’ Guide

09

HORIBA Repor t 2020-202110

We confirmed the progress of “cross segment.”
COIVD-19 has drastically and quickly changed the world. However I believe that the three main fields: Energy
and Environment, Materials and Semiconductor, and Bio and Healthcare will not disappear as long as we liveon the earth. These three fields are defined in the “Market Oriented Business,” of our Mid-Long Term
Management Plan “MLMAP2023.” We will approach these fields with a “cross-segment” initiative to promotebusinesses by cross-fertilizing the resources of our five business segments. While we had recognized theimportance of this approach and put it forward even before we formulated MLMAP2023, I see it penetrating
into our organizations deeply along the lines of the radical changes of our business circumstances.

HORIBA will provide
invaluable solutions to ourcustomers with ourcross-segment
technologies andcustomization skills.
           

Masayuki Adachi(Doctor of Engineering)President, HORIBA, Ltd.

While 2020 was a difficult year for HORIBA in terms offinancial results, we carried through our businessdirection. HORIBA engages in business fields which areessential for the world, and can be expected to grow nomatter how our society changes in the future.
HORIBA aims to continue providing values to society by
applying our full capabilities.

Decarbonization is a clear goal of the society, and attention is focused on the electrification of vehicles.
However, it is clear that the electrification cannot be implemented only within the framework of theautomotive industry. We need to think about the “generation,” “storage” and “utilization” of energy; in otherwords, the energy supply-chain from the perspective of overall optimization. HORIBA has been developing
various products and technologies which contribute to the deployment of the new energy flow, especially ahydrogen society. Our perspective is not only for the vehicle power sources, but extends to measurement
and control for stationary fuel cells and hydrogen generation processes. Our “Energy & Environment” field isbased on such concept, and being the form of business we are aiming for with cross-segment initiatives.

Tough demands from customers are
the excellent business opportunities.
HORIBA continues to focus on “high added value.” We provide solutions that customers can trust and rely
on, and do not focus too much on price competition. I believe that HORIBA exists today as a result of
pursuing “customization” in order to be close to our customers, and has been able to build relationships oftrusts where our customers believe that “HORIBA is inseparable partner.”
The second priority measure of MLMAP2023, “Solution Provider Beyond Life Cycle Management,” aims tofurther enhance our business model by combining conventional product sales with full time service of the
product life span. While responding to the strict demands of our customers, new businesses can be
discovered. Cross-segment activities are effective in creating a virtuous cycle through such customization.
Since 2020, we have launched various cross-organizational projects such as the Bio/Life Science Project, theIndustrial Solution Project and the Hydrogen Energy Project. For example, members of the Bio/Life Sciences
Project have been deeply involved in the research field of institutes or companies. Moving their perspectivefrom the research field to the industrial manufacturing can be a culture shock for them. However, such“cultural exchange” expands the solutions we can provide to customers, and eventually creates new value.
Now that social changes are accelerating, we will be left behind if we work on business expansion only byourselves. Forming alliances with external companies and organizations to leverage our various strengths canbe seen as one approach to customization. Regarding industry-industry collaboration between companies,
we announced in 2020 a collaboration with Shimadzu Corporation, which is also in Kyoto, to develop andsell “LC Raman” products. The collaboration between HORIBA and Shimadzu, which are often seen ascompetitors, seems to have had a strong impact on the industry. In fact, the strengths of both companies areclearly complementary, and by combining these, we can provide new solutions.
Regarding industry-academia collaboration, we have established “HORIBA Institute for Particle Analysis in
AIST TSUKUBA,” located in the National Institute of Advanced Industrial Science and Technology (AIST),
where we aim to develop the world’s highest level of particle analysis. We hope that we will establish ascheme to commercialize technologies from academia, and that industry-academia collaboration, which isactive in other countries, will expand further in Japan.

We will continue to meet the expectations of our customers by adjusting to the raipd changes, and providing
our value in HORIBA way.

April 2021

11

HORIBA Repor t 2020-202112
Mass flow controllers

Globalmarket share*60%* HORIBA’s
estimate

Perform precise control of gas andliquid supply lines in semiconductor
manufacturing processes
Globalmarket share*

Chemical concentration
monitors

HORIBA supports the
supply of semiconductors

Driving growth in business forthe semiconductor market

Advancing Optical Smart Sensing (OSS) technology

HORIBA’s balanced management that has
nurtured the Semiconductor segment
Even when the business environment is weak in one
segment, HORIBA has been able to agilely leverage its
management resources to continue investing in eachsegment and achieve sustainable growth. In thesemiconductor industry, with its volatile market, wehave continuously maintained and enhanced ourcompetitiveness to grow the sector into a business thatis our greatest source of profits.

2.6(9.8%)

Semiconductor

MedicalDiagnostic

2.5

Scientific

5.3

Established Standard
Technology Inc.
(currently HORIBASTEC Co., Ltd.)

13


Standard Technology
launch of mass flow controller
Entry into semiconductor
marketOpening of US
sales office forsemiconductorbusinessEstablished a dedicated OSS department
in HORIBA STEC, Co., Ltd. a major groupcompany in the Semiconductor segment

billion yen





Completion of
HORIBA STEC
Aso factory

Completion of
the chemical
concentration
monitorMeasurement equipment used inwide-ranging applications(8.4%)

Process gas monitors

Endpoint monitors

billion yen

Gas monitors(8.1%)


Introduction ofpressure-method
flow control
technology

Reticle/mask
particle
detectionsystems
X-ray fluorescenceanalyzers

1.4(12.1%)





billion yen

History of business in the semiconductor market

Working to actively utilize the sensing
technologies HORIBA holds globallyfor applications in the semiconductor market

In-situ gas analyzers

Parentheses indicate sales
ratio by segment(6.3%)
MedicalDiagnostic

Automotive

R&D
expenses
by segment

billion yen

• Contribution to productivity improvement in semiconductor manufacturing processes• Utilization of big data in control process management for semiconductor production equipment

billion yen

3.5



Perspectives on the utilization of Optical Smart Sensing Technology

Scientific

Semiconductor

At present, the major products of the Semiconductor
segment are mass flow controllers and chemical
concentration monitors. Under MLMAP2023, we are focusing
our efforts on creating a third cornerstone of the business.
To accelerate this activity, we established a new project thatconcentrates HORIBA’s technologies and its global humanresources across sites and businesses. By utilizing thesensing technologies that we have developed, we will provide
solutions for new areas of semiconductor manufacturing
processes and will contribute to the development of thesemiconductor industry.

Development ofsensing technologies for thesemiconductor market

HORIBA develops diverse applications for semiconductor manufacturing processes (dryprocess, wet process, lithography), R&D, quality control, water quality measurement for thepure water used in processes and wastewater treatment, and more.
As miniaturization and 3D integration progress in semiconductors, more precise
measurement and control are required in manufacturing processes.
We utilize fluid control, liquid analysis, spectroscopic analysis, and other core technologies toprovide chemical concentration monitors, particle detection systems, and mass flow
controllers that achieve high-speed, high-precision gas supply.

Process &Environmental* HORIBA’s
estimate

Perform highly precise and stablemeasurement of concentrations ofchemicals used in processes andin cleaning in semiconductor
manufacturing         

Automotive

80%

Concentrating HORIBA’s
technologies to tackle
new areas

Spectroscopic
ellipsometer

Process &EnvironmentalIntroduction ofresidual gas
analyticaltechnology







Opening of
Fukuchiyama
Technology Center

Opening of
HORIBA Advanced
Technology Center

Opening of
HORIBA Reno
Technology Center (US) HORIBA Repor t 2020-2021

14

Business
outline

MLMAP2023 

2020 results
Sales breakdown

Sales by region

Gas analyzers 1%

Chemicalconcentration
monitors
9%

Reticle/mask
particle detection
systems 1%

Americas 13%

Europe
5%

Japan
32%

56.9
billion yen

Semiconductor
segment          

Asia 50%• Increase in capital expenditures by semiconductor
manufacturers and recovery in demand
Sales and profits increased as sales to semiconductor production
equipment (SPE) manufacturers increased in response to arecovery of semiconductor manufacturer’s expenditure driven by
an increase in demand for semiconductor associated with the
expansion of telework, digital business and other factors. During
the year, we strove to maintain and grow our market share bylaunching sales of mass flow controllers tailored to cutting-edge
SPE, as well as chemical concentration monitors and otherproducts. In addition, we continued to collaborate with
universities and research institutions as part of efforts to expand
the range of core technologies that will be essential in the future.

Net sales (billions of yen)

77.0

Operating income plan for 2023

17.0

60.0

17.7

57.7
53.3

56.9



Contributing to yieldenhancement and technology
innovation in semiconductor
manufacturing processes withHORIBA’s flow control andmeasurement technologies

15

Mass flow controllers, used in the manufacturing
process (front-end) of devices such as
semiconductors, are a major product of the
Semiconductor segment. We have a leading global
market share*, largely on the strength of our flow
control technology that enables yield enhancement
and miniaturization in the semiconductor
manufacturing process. We will provide solutions
for responding to technological advances in thesemiconductor manufacturing process, in addition
to measuring equipment such as chemical
concentration monitors, and establish an important
position in the growing semiconductor industry.
* HORIBA’s estimates

20.0

35.3
24.1

24.6

An increase in processing volume at data centers andpenetration of Artificial Intelligence (AI) and the Internet of Things(IoT) have significantly boosted demand for semiconductors andthe range of their use. In addition, advances in technology andproduction process, such as miniaturization and 3D-integration
semiconductor production processes, have significantly
impacted demand for SPE. The latest semiconductor
manufacturing processes require advanced gas flow control, anddemand for highly precise flow control is expected to continue.

Capital expenditure trends for SPE and semiconductor
manufacturers may have an impact on business in the
Semiconductor segment due to technological changes insemiconductors and semiconductor manufacturing, as well as
rapid demand fluctuations for semiconductors. To mitigate theserisks, we are putting bases geographically close to customers,
collecting the most current information such as the trend of
capital expenditure, and building a structure for strengthening
development that swiftly tackles market needs.

Matrix of the semiconductor manufacturing process market and HORIBA’s technologies
Semiconductor manufacturing line
DeviceLogic IC

9.4

15.0

10.0

10.7

5.0

11

12

Cleaning

Flow control

Deposition

MeasureResponsibility
as a supplier

LithographCombineEtching

Generate

Mass Flow
Controller

14

15

16

17

18

19

20

Example of a connected thermal flow splitter (6 channels)
Master Controller
MuCube
Gas
panel

Flow

Flexible production
structure
Substantive humanresources andequipment

As a supplier of key components for SPE, HORIBA believes that our
mission is to hone our technologies and provide stable supply, while
responding to technological advances in semiconductor
manufacturing processes such as miniaturization and
3D-integration. In addition, as a data generator that provides
analytical and measurement equipment, we believe that we cancontribute to more efficient predictive maintenance in manufacturing
processes by creating the data needed for machine learning.

Real Time Interferometric Process Monitor

Vapor Concentration
Monitor

2023(Plan)

Customized solutions through modularization

Master Controller
MuCubeProduction
and supply

Measurement demand in semiconductor process chambers and HORIBA’s products

013Marketrequirements

The growing use of telecommunications by individuals and the spreadof the IoT have generated enormous volumes of data, dramaticallyincreasing the demand for information storage and the need foranalysis such as machine learning. Against the backdrop of thisrobust final demand, production volume of the logic ICs needed for
information processing and the memory ICs needed for information
storage has grown, and the SPE market continues to expand.

4.8
2.2

0

Memory IC

20.0

HORIBA’s technologies

Manufacturing
equipment

9.6

6.4

17.8
4.9



28.9

38.8

Flow Ratio
Controller

Capacitance
Manometer

Pressure
Controller

Mass Flow
Controller

Hub






We provide customized solutions of modularized mass flow
controllers that precisely control gas and liquid supply lines in eachtype of manufacturing process. It is possible to control the
proportions of process gas fed into chambers in the manufacturing
processes for semiconductors, displays, solar cells, and otherproducts. We are contributing to process efficiency gains throughsolutions customized to the challenges customers face.

PlasmaDiagnosis
End-point
Monitor

Mixed Injection
SystemMass Flow
Controller billion yen

14.0

47.1
40.0

Operating income

Risks and opportunities

Operating income (billions of yen)

Planned value set in the Mid-Long Term Management
Plan “MLMAP2023,” announced in August 201915.6

 billion yen

Medium-term market trends

Net sales and operating income
80.0

Sales

Evolve the company into a comprehensive supplier that provides high-value-added solutions
for all semiconductor manufacturing processes, from R&D to aftermarket services.

2020
Net sales

Mass flow controllers 89%

Bubbler

Direct Injection
SystemCompact Process
Gas Monitor

Non-contact
Infrared
ThermometerEnd-point
Detector
Compact Baking
SystemBack Side Wafer Cooling System

Accompanying the advances in materials
and the increasing complexity ofsemiconductor manufacturing processes
due to progress in miniaturization and
3D-integration, demand is growing formeasuring and controlling flow, pressure,concentration, plasma, and the likearound the process chambers used insemiconductor manufacturing. By
supplying components such as mass
flow controllers, one of HORIBA’s
mainstay products, in addition toproviding solutions that combine modules
and subsystems, we are contributing to
productivity improvements and solving
other challenges.
Our website has details
on products by application.
(in Japanese only)

Web Link
Click!

HORIBA Repor t 2020-2021

16

Business
outline

MLMAP2023 

2020 results
Sales breakdown
Water quality
analysis 8%

Sales by region
Japan
23%

Americas 28%

Other 4%
Molecular &microanalysis
34%

2020
Net sales

26.8
billion yen

Scientificsegment

Particlecharacterization
10%
Optical components 28%

Elemental
analysis16%

Europe
21%

Asia
28%

• Sluggish corporate R&D investment• Expanded sales of high-value-added products
tailored to customer needs
Sales decreased due to the stagnation of corporate activities
affected by the spread of COVID-19; however, profit increased
because sales of optical modules for the semiconductor market
increased in addition to cost reduction. During the year, we
strengthened our external collaboration, including a joint projectwith Shimadzu Corporation and joint development with the
National Institute of Advanced Industrial Science and Technology.
Through these efforts, we strove to expand our business areas.
Furthermore, by increasing the number of products in the Bio and
Healthcare field, we worked to expand new markets.

40.0

25.6



Supporting HORIBA’s coretechnology and generating theleading edge of scientifictechnology

17

HORIBA began its history with the R&D leading toJapan’s first glass electrode pH meter. HORIBA’s
analyzers contribute to R&D activities at the frontlineof scientific technology exploring the unknown
frontier of science by analyzing gases with infrared
light, elements with X-rays, and molecular structureswith Raman spectroscopy and Fluorescence
spectroscopy. Also, HORIBA’s analyzers are widelyused in fields such as basic research, forensic
science, archaeological surveys, foreign object
examination and defect analysis forpharmaceuticals, foods, and electronic components.
Additionally, the Scientific segment develops basic
measurement methods and core technologies foranalytical instruments, which play key roles inproviding new technologies to the four otherbusiness segments of HORIBA.

20.0

22.0

27.0

25.7 26.1

27.7 27.1 26.8

35.0

1.4

1.2

10.0



3.0

0.9

13

0.4

14

0.2

15

16

Spectroscopy technology development &new manufacturing base (France)
Major productNanoparticle
measurement

Measurement equipment

High-end products

FranceAdvancedresearch

Customized
products

UnitedStatesElectrochemistry
Particle-size
distribution

Markets

Academia/

General-purpose
products

Industrial
processes

Japan
Components

Inline solutions for industry processes

0.7

17

18

19

20

2023

(Plan)

Strengthening development and manufacturingof state-of-the-art spectroscopy technology.
Base expansion and relocation in January 2021

Raman microscope
LabRAM Soleil TM

Raman
spectrometry

New businessApproachFieldsBusinesscreation in
the Scientificsegment

Advancedmaterials/
Bio &Healthcare

Businesscreation throughcross segment
activities

Energy/Semiconductors/
Environment

1.0

0

12

Given that analyzers used in the physical and chemical
sciences for R&D, quality control, and similar applications are
our mainstay products, demands fluctuate with changes togovernment and private sector R&D budgets, as well as
capital expenditures for manufacturing, all of which have thepotential to impact business in the Scientific segment. To
mitigate this risk, we are strengthening coordination within thegroup and providing our diverse analytical and measurement
technologies to industries where we expect to grow, namely
pharmaceutical manufacturing, semiconductor manufacturing
processes and so on.

1.3

0

11

With global demand for solutions to social issues,
expectations are rising for cutting-edge technological R&D in
the fields of “Energy & Environment” “Bio & Healthcare” and“Materials & Semiconductors.” In addition, as customer needs
diversify, we forecast increased demand for customized
solutions. We also expect that the role for analytical andmeasurement equipment manufacturers will expand fromsupplying devices to delivering data solutions. HORIBA willmeet demand quickly along with the changing market
environment and provide our diverse products and solutions.

X-ray

0.9
0.9

 billion yen

Risks and opportunities

Fluorescenceand absorbance
spectrometry

2.0

1.9

Operating income

Medium-term market trends

Technologies Global human resources

22.9
20.4

 billion yen

Apply the core technology cultivated as a founding business in the megatrend market.
Maximize synergy while leading “HORIBA as a provider of technology” in cooperation withother segments.

Existing business

3.5

30.0

Sales

HORIBA is leveraging the core technologies we have amassed globally and providing diverse solutions ranging from industrial
fields to cutting-edge high-end research.

4.0

Planned value set in the Mid-Long Term Management
Plan “MLMAP2023,” announced in August 2019   

The Scientific segment’s business model

Operating income (billions of yen)

Operating income plan for 2023





Net sales and operating income
Net sales (billions of yen)

Against the rising importance for thefields of advanced materials and bio
and life science research, demand has
been increasing for Raman
spectrometers used in applications
such as the analysis of components insubstances and the analysis ofmolecular structure. HORIBA willdevelop and deliver even higher quality
products as we lead the market in
Raman spectrometers.

Controller
X-ray
tube

Apply
membranematerial

Batteries

We offer total analytical andmeasurement solutions, staring
from R&D of battery materials to
production control, battery
performance testing, and support
for developing electric vehicles.

Semiconductors

We offer analytical solutions
covering each aspect of R&D, andquality control, spanning wafers insilicon and compound
semiconductors to device
development.

Life
Sciences

We offer various analytical andmeasurement solutions, such as
customized technology forevaluation of pharmaceuticalprocesses, to enable high-quality
continuous manufacturing.

Analyzer

Example of an inline film
thickness analysis solutionBasematerial

Contributing to target markets

Film material

Opticalcomponents

DetectorPC

Roller direction

In the manufacturing processes within various industries, demand is increasing for
new solutions that contribute to automation, labor savings and the increasing useof composites. In order to improve production efficiency and detect defective
products in manufacturing processes, we leverage our analytical and measurement
core technologies, which have been cultivated by the Scientific segment andengineering capabilities from other segments, which are able to respond to various
markets, to industrial manufacturing; such as customized in-line solutions to ourcustomers’ manufacturing processes.

HORIBA Repor t 2020-2021

18

Business
outline
MLMAP2023 

2020 results
Sales breakdown

Sales by region

Immunology 8%
Other 2%

Japan
26%

Americas 19%

2020
Net sales

21.0
billion yen

MedicalDiagnostic
segment

Clinical chemistry,
Blood glucose
18%

Hematology
72%

Europe
35%

Asia
20%

• Test volume at hospitals decline accompanying thedrop in the number of patients who visit hospitals• Diagnostic systems and test reagents show a trend of
gradual recovery
The number of tests performed at hospitals decreased as the
spread of COVID-19 led to a decrease in the number of patients
who visit hospitals. Consequently, sales fell for diagnostic systems
and test reagents, and a sales decline and operating loss wererecorded. During the year, we enhanced and expanded our
product lineup, strove to expand sales for the micro-blood analysis
system business acquired from ROHM Co., Ltd. in 2018, andworked to build up our business inside and outside Japan.

Net sales and operating income
Operating income (billions of yen)

Net sales (billions of yen)
40.0

Operating income plan for 2023

30.0

26.8 27.0 27.4 26.5
23.4
20.0

2.4

10.0


19

In the global market of in-vitro diagnostic (IVD)
systems, HORIBA provides instruments andreagents for blood sample testing throughout theworld. The segment’s business model is based onrecurring revenues generated from sales ofreagents. We aim to ensure stable earnings by
expanding our installed base of medical diagnostic
instruments. In particular, HORIBA’s strength is insmall and medium-sized hematology analyzers forpoint of care testing (POCT)* in clinics and satellites
in hospitals such as operating rooms, as well as
small-to medium-sized hospitals and commercial
laboratories.
* Point of Care Testing (POCT): A general term for testing performed at
locations close to patients, such as private practitioner offices, diagnostic
clinics, hospital wings, and outpatient clinics.

25.1

2.4

4.0

4.0

2.8
1.9

2.0

1.8
1.3

1.7
0

0

-0.4

11



6.0

21.0

2.4

12

13

14

8.0

26.0 25.3

22.4

3.1

Contributing to a healthy life
through in-vitro diagnostic
systems

40.0

Planned value set in the Mid-Long Term Management
Plan “MLMAP2023,” announced in August 2019

15

16

17

18

19

20

-1.0

2023

(Plan)



     

Sales billion yen

Expand the product portfolio from small-scale analyzers to large-scale ones, and accelerate
global business expansion. Realize further business expansion in the field of IVD.

Operating income billion yen

Medium-term market trends

Risks and opportunities

Global population rises mainly in emerging countries andhealthcare costs are generally getting high. In developed
countries, there is an increasing demand for high-precision,
efficient medical devices, so as to realize more efficient medical
services. Moreover, in Japan and other developed countries,
medical cost control and preventive medicine initiatives are
moving forward in response to the aging society. There is acentralization of medical treatment at specialized hospitals and at
testing centers that collect large numbers of test specimens, aswell as decentralization occurring through regional medical
treatment. Needs are increasing in each of these directions, and abipolar division of testing is expected to advance.

Since hematology analyzers are our mainstay products, increasing
price competition and other market environment changes may
have an impact on business in the Medical-Diagnostic segment. In
addition, the spread of COVID-19 has led to a decline in thenumber of tests performed at hospitals accompanying the drop in
the number of patients who visit hospitals, and it is possible that
this impact may be prolonged. To mitigate these risks, we arestrengthening information coordination within the group andpromoting new products and business expansion in response tomarket demands and the trends of our competitors. Within thiscontext, we differentiate ourselves from our competitors andenhance our competitiveness through efforts to launch products
other than our mainstay hematology analyzers as well as continue
collaboration with other companies.


Social issues and business opportunities in the in-vitro diagnostic systems market
Shared issues

Societal phase
Developing
countries

Contagious
diseasecountermeasures

Limited access to
medical treatment
Improvement ofpublic health
Changes in medical
treatment demand
Reform of medical
systemsDrug-resistantbacteria
countermeasures
Developed
countries

Market forecast

Business opportunities
for HORIBA• Development andexpansion of medical
infrastructure

Business expansion in
emerging markets

Individual issues

Progressing of
aging society
Soaring medical costs• Centralization andexpansion of testing

Provision of solutions
that enhance
testing efficiency• Growth of demand forindividual diagnostics• Progress in preventive
medicine

Business expansion
in POCT markets
close to patients• Proper management andutilization of testing data

Medical infrastructure will expand and change in line with the development of society. In emerging countries, first, new medical infrastructure
will be introduced, and it will gradually expand. In developed countries, the testing market is undergoing a bipolar division, with thecentralization of testing for greater per-unit efficiency advancing against a backdrop of medical cost reductions occurring at the same time as
decentralization and localization of testing for rapid diagnostics and routine handling of chronic illnesses. Patients’ needs are diversifying as
well, and the provision of medical care tailored to individual patients is expected to progress.
HORIBA has strengths in private practitioner-oriented testing equipment used close to patients, while also providing solutions for improving
efficiency with large-sized hematology analyzers. We will continue to offer products and services that help resolve issues in society.

Accelerating expansion of the clinicalchemistry businessA global network for productdevelopment and reagent production
United States

Launch of our automated clinical chemistry
analyzer in North America

Multi-function anduser-friendly, in a compact
machineYumizen C1200 AutomatedClinical Chemistry Analyzer

Clinical Chemistry Analysis is one of themost important discipline in IVD market.
It allows to measure various clinicalchemistry components inside the specificspecimen such as blood serum, plasma
and urine. By entering the market for
automated clinical chemistry analyzers, weare able to enhance and expand our lineupof clinical chemistry products and meet
the broad range of needs of customers.
We plan to accelerate our business effortsin small- and medium-sized hospitals andcommercial laboratories, and contribute to
testing efficiency.

Development/production
base (Clinical chemistry
reagents)

Japan

France

MedTest DX, Inc. and Pointe Scientific, Inc. sites

In January 2021, we acquired MedTest Holdings, Inc. (U.S.), whichdevelops, manufactures, and sells reagents for clinical testing. In the
Mid–Long Term Management Plan “MLMAP2023,” we aim to increase
net sales in the clinical chemistry business to 6.0 billion yen. By
establishing a development and manufacturing structure for clinicaldiagnostic reagents in the U.S., the largest market in the clinicalchemistry business, this acquisition will give us a three-base structure(Japan, France, and the U.S.) to strengthen our development
capability on a global level.

Development/production
base (Systems/Reagents)
Medium/large productdevelopment technologies

India

Production base
(Reagents)

Development/production
base (Systems/Reagents)
Small product development
technologies

China

Production base
(Systems/Reagents)

Brazil

Production base
(Reagents)

HORIBA has medical business bases in countries around the world andsupplies products globally. We have built a reagent production structurethat allows us to stably supply test reagents, which are consumables, inregions of large-volume use. We will accelerate new productdevelopment to meet market needs and, leveraging our global network,
will aim to expand our business in the continually growing IVD market.
HORIBA Repor t 2020-2021

20

g y tio n
st of for orm
ag
e s

r sif

                Div e
ic a

tio

n

fp




ri m

Thermal power
generationarye

Renewableenergyconsumption, major innovations are also occurring in the

Hydrogen power
generation

HORIBA Institute for Mobility and Connectivity2

Promote innovationthat targets

energy is being promoted globally. This movement can be seen aschanges in energy consumption methods. In terms of energyof

Nuclear power
generation

Today, decarbonization is widely touted and the efficient use ofsources, which has relied heavily on fossil fuels, in addition toDnergy sources

Lithium ion
batteries

Hydrogen storage
fuel cells 
innovation that advances diversification of primary energy

fi c
si er
r
ive enUrban energy
networks



andNext-generation
mobility

automotive industry.

It is important to consider methods that enable optimum energy

In August 2018, we concluded a support agreement with the Universityof California, Irvine to establish the HORIBA Institute for Mobility andConnectivity, and it has begun operations in part. Working with thisinstitute at the center, we plan to tackle social issues from thestandpoint of next-generation energy networks and of mobility withinthat area, and will create businesses in the categories of energy
efficiency, environment, and safety.


(1) Development of Automotives, fuel supply chains, and mobility
systems that do not emit pollutants(2) Construction of a system that integrates zero-emission vehicles
with next-generation power grids incorporating a high ratio ofrenewable energy

supply and assemble various power sources as powertrains formobility. In the midst of the progress of both energy and mobility
diversity, the necessity to know the position of total optimization(3) Creation of next-generation transportation systems that cansense surrounding conditions and communicate withtransportation and energy infrastructure

is increasing more than ever.

HybridvehiclesInternal combustion
engine vehicles

Plug-in hybrid
vehiclesnificatio of power
s
r
tra
ve
ins
Di

Connected/autonomous driving

HORIBA supports building
social systems
with total optimization

Fuel cellvehiclesBattery electricvehiclesAnother major category of mobility innovation isconnected and autonomous driving. An era iscoming in which new value is created in mobility
through the analysis and utilization of data
generated by the connection of numerous vehicles
to networks.




21

In terms of efficient use of energy
on a global scale, improving
efficiency in every process ofenergy generation, conversion,storage, and consumption isimportant.

aoKeywords for innovation:

Taking into account stableenergy supply and otherinfrastructure aspects, it isnecessary to consider the properuse of powertrains according totasks and locations.

HORIBA Repor t 2020-202122

                Generate, store, and utilize energy intelligently

HORIBA supports building social systems
with total optimization

HORIBA FuelCon
products

Stack gas analyzer(Improvement of power
plant efficiency)

In addition to the monitoring ofenvironmental impacts associated withpower generation, we also provide
measuring equipment used inprocesses for producing hydrogen, forwhich consumption is
expected to grow

Fuel cell
test systems(Development offuel cells)(Analysis and evaluation ofbattery material components)

RenewableenergyProcess
measurement
equipment(Management of
petroleum refining process)Hydrogen storage
fuel cells

Hydrogenstorage

Nuclear power
generation

HydrogenstationBattery test systems

(Development of batteries)

Thermal power
generation

Hydrogentanks

HORIBA FuelCon
products

Hydrogenproduction(reformer)

Analysis of hydrogen distribution andhydrogen volume that cause embrittlement
in metals used for storage

Lithium ion
batteries

Monitoring of purity of refined hydrogenin real timeHigh-precision measurement of
impurities during hydrogen refining

Evaluation of waterelectrolysis
cell performance

Hydrogen power
generation

Glow Discharge
Optical Emission
Spectroscopy(Evaluation of performance andefficiency of water electrolysis
cells in hydrogen production)(Evaluation ofhydrogen embrittlement)

Building a system forenergy that is born fromwater and returns to water

Gasoline/hybrid vehicles

Smart houses(Measurement ofpollutants)

Engine emission
measuring systems(Improvement of internal
combustion engine
performance)

Offices andfactories
Efficiency of energy consumption isadvancing. We will provide datanecessary for efficiency improvements
through analytical and measurement
technologies.

Compressedhydrogen trailer

Electric vehicles
Fuel cell vehicles

Air pollution
analyzers

Water quality meters(Measurement of industrial
wastewater)

Four-wheel drive
test systems

Mass flow controllers(Response to growing
demand for semiconductors)(Development ofvehicles)Fuel cell
test systems(Evaluation of fuelcell systems)

23

R&D of energy storage technologies
is accelerating worldwide. We willcontribute through measurement
technologies forcusing on battery
material development andevaluation.

Raman spectrometers

Hydrogenproduction



HORIBA FuelCon
products

HORIBA has various measurement technologies for the wide
spread of hydrogen energy, which is spotlighted as clean
energy, and supports the realization of a sustainable society.
HORIBA Repor t 2020-2021

24

Business
outline
MLMAP2023 

2020 results
Sales breakdown

Japan
28%

Americas 11%

ECT* business13%

   Sales by region

2

Medium-term market trends

Emissionbusiness
65%

Europe
34%

Asia
27%

*1 Mechatronics (MCT): measuring instruments for vehicle*2 Engineering Consultancy & Testing• Depressed capital expenditures by automotive-related
manufacturers• Pursued efforts to address new regulations andadvanced vehicle technology
Sales and profit decreased due to the stagnation of corporate
activities affected by the spread of COVID-19. During the year, welaunched new applications that respond to RDE (Real Driving
Emissions) and contribute to automotive development efficiency. In
addition, we proceeded with development including evaluation andtesting systems for electrified vehicles and connected autonomousvehicles (CAV), while working to expand new products and services
required for next-generation mobility development.


Opening a comprehensive testing facility
to support CAV development

Progression of emission standards
by region/country
Corporate Average Fuel Efficiency (CAFE)(continue tightening fuel efficiency
standards also consider LCA adoption)

RDE regulation
take effect

Europe Euro 6b

Net sales and operating income
Net sales (billions of yen)Japan

Operating income (billions of yen)

120.0

120.0

15.0

Planned value set in the Mid-Long Term Management
Plan “MLMAP2023,” announced in August 2019

12.0

Operating income plan for 2023
80.0
25

73.3

49.5

CO2 emission: 95 g/km

38.6
2.8

HORIBA’s automotive Emission Measurement
Systems (EMS) are used by national certification
bodies throughout the world and hold a global
market share of 80%*. HORIBA provides the world’s
leading automotive manufacturers with complete
test and measurement solutions, including test
systems for engines, chassis, powertrains, brakes,
and catalysts. We are also able to respond to
wide-ranging demand in the Engineering
Consultancy & Testing (ECT) business, offering awide variety of products and services ranging fromthe development of batteries for electrified vehicles
to autonomous driving technology, in addition toproviding vehicle performance testing and R&Dexpertise.
* HORIBA’s estimates* HORIBA’s estimates

55.0

43.2
5.8
4.4

4.2

12

13

64.2 62.2 7.6

79.6

81.0

10.0

63.9

7.7
6.4

5.0

4.4
3.5

0

0

11



14

15

16

18

19

20

2023

(Plan)

Strengthening business to respond to
upcoming emission regulations

SMART SOLUTIONSFOR CLEANER AIR

RDE+, a new application in response to
RDE regulations

Explore the future

17

Automotive Test Systems | Process & Environmental | Medical | Semiconductor | ScientificWith HORIBA’s proprietarymeasurement algorithm,
on-road tests can be accurately
replicated inside chassis test
cells and similar facilities. This
allows to shorten thedevelopment period andeventually to reduce the costs.
We will contribute to ourcustomers for the front-load
development processes.

37.5% reduction
against 2021

15% reduction against 2021

RDE regulation
take effect

PN (Particle Number) regulationcommence

Year 2018 regulation

LEV Ⅲ (PM 1 mg/mile regulation)

LEV Ⅲ California

U.S.

LEV Ⅳ

Physical vehicle testing

China IV

China

India
Simulation testing

HORIBA’s strategies under changes ofenvironment for vehicle development

2.4

Regulation ofeach country

Euro 7

Post-new longterm regulation

Tier 3 Federal

In 2021, we opened and will expand
ASSURED CAV, a comprehensive facility
to provide full-scale support ranging fromengineering of CAV to physical vehicle
testing. The facility enables to carry out
evaluation and verification of the vehicle
controllability and safety in order to realize
autonomous driving technology. Beyond
that, this makes it possible to perform not
only physical vehicle testing but also
simulation tests in virtual space.

Sophistication of vehicle technology

40.0 billion yen

There are possibilities of impacts on the Automotive segment fromfuture changes to emission and fuel economy standards, in addition
to fluctuations in R&D by automotive manufacturers. To mitigate
these risks, we will continually collect the most up-to-date
information released by government agencies, while also working toadapt to regulations and develop and deliver the emission
measurement systems required for the development of emission
reduction technologies. In addition, against the backdrop of rising
global demand for electified vehicles, we will expand production
capacity for battery and fuel cell testing systems, which are
expected to see market growth. We will also expand R&D
engineering capabilities to offer comprehensive support ranging fromengineering of CAV to physical vehicle testing, so as to strengthen
our business foundation to respond to wide-ranging demand.

Euro 6d

Providing powerful support forthe optimization of vehicle
testing and acceleration
in automotive development

Operating income

Risks and opportunities

Against a background of globally tightening environmental
regulations, the automotive industry is moving ahead with
development of next-generation mobility that will lead to cleanercars and social transformation. The measuring instrument
market is expected to continue growing to meet technologicalrequirements for emission reduction, electrification, andconnected and autonomous driving. Moreover, in response to
the increasing burden placed on automotive-related
manufacturers by more complex development processes,
demand is expected to remain strong for high-precision
analytical and measurement equipment and for measurement
solutions that offer development efficiency and verification
process improvement.

billion yen

segment billion yen* Emissions, energy efficiency, CAV, data management for overall vehicle-related development

63.9

Automotive

Sales

Provide the best applications in four business* areas. Establish a position as a vital partnerin the automotive development field by solving the challenges that customers face.

2020
Net sales

MCT*1 business22%

Present

Becomes

Progress ofelectrification andintelligence

Further expansion of
the scope of R&D andtesting

Till nowPresent

Development of basic
performance andfunctions

Requirement for new
testing conditions
Diversification of testing conditions

Emission and fuel economy standards are tightened, electrification isaccelerated, and CAV technologies are progressed. Under thesecircumstances, automotive R&D workplaces are facing the need tosolve multiple challenges simultaneously. Furthermore, improvement ofefficiency in R&D processes is becoming an urgent issue, alongside
the workstyle changes led by the spread of COVID-19.

China Ⅴ
China Ⅵ a

China Ⅵ b

New regulation

RDE regulation
take effect

Bharat Stage Ⅳ equivalent to Euro 6
Bharat Stage Ⅵ

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Sources: Graph by HORIBA based on materials of the Ministry of Economy, Trade and Industry;
Ministry of Land, Infrastructure, Transport and Tourism; Japan Automotive Manufacturers
Association Inc.; and others

Testinglaboratories
On-roadUsing our analytical and measurement technologies, HORIBA is
integrating on-road, laboratory and simulation test fields and isproviding solutions that expand applications. As a next-generation
mobility development partner, we are supporting customers’ front-load
development and boost the efficiency of development processes.

HORIBA Repor t 2020-2021

26

Business
outline

MLMAP2023 

2020 results
Sales breakdown


Sales by region

Stack gas analysis
31%

Other
14%

Japan
54%

Americas 12%
Europe 12%

18.3
billion yen

Process &Environmental
segment

Water quality
analysis 37%

Asia 22%• Robust demand from environmental regulation, mainlyin the public sector• Capital expenditures were postponed in the private
sectorSales and profit decreased due to the stagnation of corporate
activities affected by the spread of COVID-19, despite robust
demand for public investment against the backdrop of tightening
environmental regulations globally. During the year, we launched new
products in the fields of gas analysis and water quality analysis. In
addition, we expanded our data management business to contributeto customers’ environmental measures by developing software whichenables to monitor environmental data collected in real-time.

30.0

Planned value set in the Mid-Long
Term Management Plan “MLMAP2023,”
announced in August 2019

2.5
20.0

2.0
1.6
14.7

14.5

16.4

19.3 19.5
16.7



We supply a broad range of analytical andmeasurement instruments for analyzing air
pollution, water quality, and soil quality. We play animportant role in gas measurement and monitoringof industrial wastewater in the energy and heavy
industries such as electric power, steel, andchemical industries; purified water management for
medical and semiconductor use; and water quality
monitoring and control for food, as well as
cosmetics fields. In essence, HORIBA’s analyticaland measurement technology contributes toleading technological innovation, which supports
public safety, security, and health in addition to
global environmental preservation. We contributeto achieving a sustainable society.

10.0

16.7 17.4

Since demand for environmental products such as air andwater pollution analyzers will increase or decrease due totrends in environmental laws and regulations issued bygovernment agencies and R&D and investment trends ofprivate companies, there is the possibility of an impact on theProcess & Environmental segment depending on future
demand fluctuations. To mitigate these risks, we arestrengthening information coordination within the group andunderstand global trends in environmental regulations, while
expanding our product lineup, such as products used in areas
other than the field of environmental regulations.


Changes in measurement needs

Increased awarenessof global environmental
preservation

Product sales/Repair/Maintenance
Developing
countries

1.0

0

0



12

13

14

15

16

17

18

19

20

2023

Emerging
countries

Developed Countries

Demand for measurement of emissions sources at the endpoints ofproduction and manufacturing processes

Demand for measurement within production and manufacturing
processes to contribute to improvement

Approaches to environmental regulations

Industrial process improvement

Needs

Respond to local needs

Contributing to efficiency gains at sewage
treatment plants

Gas

Improveairpollution

Enhance localizationof production andengineering

China• Reinforcement of low-concentration
exhaust emissions regulations• Expansion of VOC*1 regulations• Subdivision of atmosphericmonitoring zones

India• Designation of industrial pollution• Obligation to measure theenvironment• Environmental compliance of thermal
power generation

Bring successful businessmodels to other countries

Water

Improvewater
quality

Develop businesswith local partners

Example of HORIBA’s solution in use at a sewage
treatment plant
HC-200NH*1 VOC: Volatile Organic Compounds

27

Developed
countries

Emerging Countries (Southeast Asia, etc.)(Plan)At sewage treatment plants, microorganisms
are used to purify water, while equipment,
called blowers, is used to supply the large
volumes of air needed to break down organic
matter. A considerable amount of electric
power is required to run these operations;however, using an ammonia nitrogen meterwith online connectivity allows for precise
control of air supply, which contributes toreducing power consumption and CO2
generation.

High productivity/Optimization/Data management

Phase of social growth

1.0

11

Phase for improving the environment
Approaches to environmental regulations

1.6

1.2

Contribution to productivity
improvement

Phase for improving
industrial processes

SDGs
The Paris
Agreement

2.0

18.3

1.6

1.5

3.0

 billion yen

The Paris Agreement on controlling climate change and theSustainable Development Goals (SDGs) were adopted in 2015.
Awareness of environmental conservation is growing on a global
scale. Emerging countries are facing requirements to comply
with regulations and environmental improvement, and strong
demand is anticipated. In developed countries that have matureenvironmental regulations, there is potential for productreplacement demand as well as for growth in the field of
manufacturing and production process improvements aimed at
improvement of quality and economic efficiency. HORIBA willmeet the diverse demand brought about by changes in thegrowth phases of society.

2.8

2.0

1.7

13.7

HORIBA helps monitor global
environmental preservation, andproduction and quality
management processes

28.0

Operating income plan for 2023

Operating income

Risks and opportunities

DemandOperating income (billions of yen) billion yen

Medium-term market trends

Net sales and operating income
Net sales (billions of yen)

Sales

Provide various solutions in the global market ranging from approaches to environmental
regulations to improving production efficiency. Aim to grow into an organization that isrequired for measurements related to the global environment.

2020
Net sales

Air pollution
analysis 18%

China• Local industry-academia-government collaboration• Respond to treatment processes
and regulations for drinking water
and wastewater

India• Respond to expansion of monitoringenhancement items, such as BOD*2• Adopt and systematize local
specifications

Industrial
process
measurement

Electronic
industry/marketNew measurement solutions
for manufacturing andproduction processes

Higher productivity
in the petrochemical
sectorImprove combustion
efficiency inpower plants

Capture demand forfactory-related water
quality/gas measurement

Comprehensive
support insemiconductor
manufacturing

Hakaru EXpress

Data
management

Realize a skill
transfer and reduction
in manpower infacility management*2 BOD: Biochemical Oxygen Demand

HORIBA Repor t 2020-2021

28

Promotion of business collaboration

Active personal contribution to society

Promoting businesscollaboration  








HORIBA’s
approach to industryacademia collaboration

Activities of management members outside the company are
noted in the list of management members beginning on p. 51.

Contributing tosociety byconnecting
advanced research
to industry
HORIBA’s
approach to industryindustry collaboration

Combining
companies’ uniquestrengths to create
new solutions

Establishment of HORIBA
Institute for Particle Analysis
in AIST TSUKUBA (HIPAA)• Develop airborne particle measurement technology to address the tighteningof environmental regulations• Develop measurement and evaluation systems for advanced nanomaterials
that contribute to the strengthening of industrial competitiveness• Create synergies and develop young human resources for innovation throughpartnering research laboratories

New
Initiatives

Start of collaboration with
Shimadzu Corporation

HORIBA is advancing R&D through open innovation that crosses the advanced analytical andmeasurement technologies and material evaluation technologies of the National Institute of Advanced
Industrial Science and Technology (AIST) and of HORIBA, Ltd. We will undertake the practicalapplication of systems that enable world-class particle measurement, contributing to the resolution ofenvironmental issues to protect the health and safety of people and to the development of thenanomaterials that are expected to underpin innovation.

HORIBA has concluded a basic contract for thedevelopment and sales of LC Raman, a measurement
instrument system that combines the High Performance
Liquid Chromatography (HPLC) of Shimadzu
Corporation and the Raman spectrometer of HORIBA.
Expansion of categories thatutilize life science technologies

Online exchange of thoughts on
open innovation,
unstopped by the pandemic(photo, top right)
Kazuhiko Ishimura (President, AIST)(bottom right)
Takashi Usuda(Vice-President, AIST
Director General, National Metrology Institute of Japan)(top left)
Masayuki Adachi(bottom left)
Kentaro Nishikata(General Manager, Research & Development Division,
HORIBA, Ltd.)

Development at HORIBA Europe GmbH (Germany) and became CEOof MIRA Ltd. (now HORIBA MIRA Limited) in the U.K. in January 2009.
He was appointed CEO of HORIBA MIRA Limited in July 2015 andExecutive Chairman in 2019. In the same year, he was appointed as
GLOBAL ATS BOARD LEADER (currently GLOBAL AUTOMOTIVEBOARD LEADER), which leads the automotive business of HORIBA.





New
Initiatives








A sense of urgency is important in
expanding business into the bio-lifesciences and other new fields.
HORIBA is strengthening
industry-academia collaboration andindustry-industry collaboration by
utilizing the networks built withhigh-quality research and educational
institutions and companies whichboast original technologicalcapabilities.

Doctor George Gillespie, Senior Corporate Officer of
HORIBA and Executive Chairman of HORIBA MIRA Limited.
(U.K.) has served as President of the Society of Motor
Manufacturers and Traders (SMMT) in the U.K. since 2019.
He provides leadership across various areas related toGeorge Gillespie (Doctor of Engineering)mobility and maintains the international competitiveness of Previously held senior roles with Ricardo plc (U.K.) and Schenck AG(Germany), he worked as Vice President in Strategic Productthe U.K. automotive sector.

PharmaBatteryenergy(photo, left) Teruhisa Ueda (President & CEO, Shimadzu Corporation) (right) Masayuki Adachi

Segregation & collection ofcomponents in mixture

Integrated software

Raman spectrometer

Segregation Collection

Control & analysis

Measurement

Genetics

Polymers

Vaccines

Petrochemicals

Viruses*Job titles are shown as of 1st Feb., 2021.
Cellularbiology

Cosmetics

Promotion ofcollaboration in the
Bio/Life Science
Project
29

We established the Bio/Life Science Project in 2020 to strengthen our approach to the bio and life sciencemarket. In the same year, we took part in a project which developed a simple and rapid antibody test chipsystem for COVID-19, and was headed by AIST as the representative institution.
Starting with this project, HORIBA will offer its unique technologies to sites engaging in drug development
analysis and R&D in order to establish businesses related to bio and life science.

Foods

High Performance Liquid
Chromatography (LC)Raman spectrometer

Microorganisms

Need for new technologies in
the categories of materials and energy
HORIBA Repor t 2020-2021

30

Broadening of our service businessSupporting the growth of HORIBA

Broadening of
our service business

MLMAP2023
Mid - Long Term Management Plan

Providing high-quality services to customers can be seen as the front line of sales, as it helps create a cycle in whichcustomers use HORIBA products continuously.
HORIBA’s business is not only to sell products, but also to provide high-value-added supports to custmers. Thisbusiness model will solve various issues of customers, such as field services, contract analysis, joint development,
calibration business and testing business using advanced equipment.

Brand
New

Completion of a new office building for
HORIBA Techno Service Co., Ltd.

Priority
measures
    

Always With You- Aiming for establishment a business model focused on solution
proposals and data management
Mission01

Maintenance service using operational data

Accurate facility
management

We offer solutions that enhance the efficiency of customers’ testing
facilities overall, including monitoring of product operational data andnotification of maintenance scheduling.

- Core site of the service business -

We constructed a new office building for HORIBA Techno Service Co.,
Ltd. under the concept of “Always Here With You,” an expression of
our aim to stay close to our customers and other stakeholders. We
consolidated several functions in the building, including training
facilities, calibration facilities, and Analytical Solution Plaza, whichplays a part in supporting our service business.
We also expanded functions for quickly responding
to customer inquiries, particularly concerningtechnologies.
From this new office building, we plan
to strengthen our field service
system across the globe.

Parts-Comprehensive serviceRepair

Mission02

Maintenance

We provide the “All in One Plan” that comprehensively proposes productmaintenance and inspection services for customers in Japan. By installingmonitoring kits in equipment, we can monitor the operating status of theequipment all time and to detect anomalies before components fail in order toreduce downtime. We collect information on the usage status of our products
into monthly reports, and propose support that is tailored to customers’ usage
status. This contributes to the improvement of the measurement process, whichenables the long-term use of products in their best condition.
Newly offer
added-value

Consulting that utilizes measurement data

HORIBA aims to analyze measurement data itself and provide consultingthat proposes solutions to customers.


Our service “HAKARU Express” collects and manages data and delivers water
quality measurement reports on behalf of our customers. Under this service, we
install equipment owned by HORIBA in customers’ facilities, and subsequently
provide total support for everyday management, fixed asset management,
annual inspections, preparation of regular reports to administrative agencies, andmore, for fixed monthly fees. This business aims to resolve labor shortages andother problems facing modern society through the use of data management.
Through it, we will solve on-site issues in environmental management.

Expect elucidation of the mystery of the origin of asteroids,
the birth of the solar system, and the birth of life
Hayabusa2: Participation in sample analysis project

u
o
y
ith

w
s
y
wa

Al

We opened the Analytical Solution Plaza where people can freely gather and exchange information on
analysis, crossing the boundaries between technical areas. Leveraging the analysis and measurement
know-how that we have accumulated since our establishment, we provide a wide range of supports forcustomers’ analysis and measurement, with assured quality based on our abundant track record.

31

HORIBA Techno Service Co., Ltd. took part in the initial project to analyze sand, stones, andother samples collected from the asteroid Ryugu by the asteroid explorer Hayabusa2 of theJapan Aerospace Exploration Agency (JAXA). Using our X-ray fluorescence analyzers, we will
perform non-destructive and non-contact analysis of the chemical composition of the samples
to investigate the origin of Ryugu. By doing so, we will help to turn a new page for humanity.

The role of HORIBA(photo, from right)
Hisayoshi Yurimoto (Leader Chemical Analysis Team; Professor,
Hokkaido University)
Hiroo Chihara (President and CEO, HORIBA Techno Service Co., Ltd.)HORIBA will use X-ray analytical microscopes toperform elemental measurement and opticalobservation, and will analyze the samples’
component elements and their composition
ratios. Along with equipment that enables
non-destructive, non-contact handling of minuteamounts of samples, we will provide
high-precision trace analysis by HORIBA
analytical engineers with specialized knowledge.

(Illustration: Akihiro Ikeshita)

Asteroid Ryugu• An unknown rock, located 340 million kilometers from the earth.
• Ryugu retains information on the early formation stages of thesolar system, and is considered to be an asteroid rich in organic
matter and water.
• Hayabusa2 took 5.4 grams of sample from the asteroid.

HORIBA Repor t 2020-2021

32
    

Our “Headquarters” exist
around the world.
This is HORIBA’s advantage.

Juichi Saito
Executive Vice Chairman &Group COO

2020 was a year when HORIBA was under thesituation where physical movement wassignificantly restricted and was asked how weshould be as a Global company in terms ofmanagement and communication.
HORIBA will continue taking on various challenges
for further growth.

The unique global management at HORIBA

Creating a stage for HORIBARIANs to feel “Joy and Fun”

The spread of COVID-19 gave HORIBA a chance to thinkagain about how we should be as a global company.
Symbols of HORIBA’s global management, “Global
Strategy Meeting and Global Budget Meeting” at which
managements from all around the world gather was forced
to be held online in 2020.
As a result, I was pleased that the number of participantsof meetings increased compared to previous ones. On theother hand, the volume of information that we gained waslimited, because the volume of conversation exchanged
other than meeting room decreased. We need toreconsider advantages and disadvantages of online
communication. However, as a member of management,
I always try to keep my door open in any ways in order togive a helping hand, and at the same time, I want toobtain fresh information to know what is going on the field.

With our Mid-Long Term Management Plan
“MLMAP2023,” we are trying to create new
businesses which go beyond the existing businesssegments. This is the idea that new business
opportunities will emerge by changing the view from a
two-dimensional perspective of the businesssegments to a three-dimensional one called“cross-segment.” In order to achieve this strategy,
HORIBARIANs themselves need to have interests inand experience various things not only what they aregood at. There are many companies within the
HORIBA group, each of them has its own
characteristics, and thus it easily enables
HORIBARIANs to gain this kind of experience
compared to other companies. In order to provide thisbenefit to everyone, I would like to promote optimal
human resources allocation by looking at the entire
group of companies from a bird’s-eye view and tooffer them stages where they can perform at their best.

HORIBA’s business and technical core bases exist aroundthe world, while most Japanese companies establish bothof their Headquarters and these bases inside Japan. It canbe said that HORIBA is an aggregation of companies with33

a diversity of technologies and strengths under the
corporate motto“Joy and Fun.” Consequently, we could
recognize that HORIBA has each“Headquarters” in many
places like an image of spreading around the world, andthis is HORIBA itself with all in one piece.
This is HORIBA’s unique organizational structure: there aremany organizations that can take leaderships and each ofthem tries to work hard together. Under suchcircumstances, I think that we need to re-define the role ofeach group company.
We are expecting that the global business will accelerate
and, therefore, we need to increase the number of
employees who can communicate not only in English as acommon language in the world, but also in local
languages. We need to think how we should fit theoperations in each region to the site, while headquarters inJapan gains accurate information.

HORIBA’s most important asset is human resources
and they are the origin of our strengths. As a memberof management, I have emphasized “communication”
amongst HORIBARIANs. At the same time, talking tothem individually will lead to passing on HORIBA’s
corporate culture to the next generation.
The way to develop human resources is not one.
Management needs to think whether each employee
will be responsible for global management or will be a
specialist in specific technology and skill. I willcontinue to take on all kinds of challenges to createorganization where HORIBARIANs can truly feel “Joyand Fun” through their work by offering the plan for
their career, which fits their life individually.
April 2021

HORIBA Repor t 2020-2021

34

Valuing technology and human resources

HORIBA’s Value Creation Cycle

iademllaborationa-ac nt coyr
st nme
u
d er
ov

I
g n

Value creation throughtechnology and diversity ofhuman resources
HORIBA supplies products with analytical and measurement technologies,
which provide solutions to social issues.
Technology and human resources support business.
HORIBA will be a partner of customers to contribute to building
a better society and generating greater social value.

Research
institutions

anSemiconductor
Production
equipment
manufacturers

Data managementten

Creating economic value

d
n
o
y
d be

Government
agenciesSoldev utio
elo npm

Creating social value

Solutions tosocial issues

aboration
Collh society
wit

HORIBA’s Management

Universities

Customers* Please see page 59 for more on
Measurement businesscustomers.

• Automotive
manufacturers• Automotive component
manufacturers

Nee

Small- to mediumsized hospitals &physicians in private
practice

AutomotivevainElectric powercompaniesOpe

MeasureMedicalment
Diagnostics
businesses

Scientific

Ma

Semiconductor

Field service

Creating social value

rk

tin

e

(HORIBARIANs)

Contributing to the SDGs*g

Creating value by expanding
business that addresses
various social issues

MLMAP2023

SDGs related to the three priority measures

Mid - Long Term Management Plan

Creating economic value
High value-added products that gain
a top-level market share
Global business withmore than 1,000 products of various kinds
Profit generation(Maintained an operating income level above 10%)

Business growth supported bycontinuous investment
35

so

ty

no

Process &EnvironmentalCore
technologies

Talents

Manufacturers

f
ds o

ci e

n

R&
D

Measurement
technologies

tio

n

Sales

PRIORITY
MEASURE1

PRIORITY
MEASURE2

PRIORITY
MEASURE

3

Market Oriented BusinessTo develop analysis and measurement solutions, utilizing HORIBA’s
core technologies, in the leading three business fields of megatrends
Three fields • Energy & Environment • Bio & Healthcare • Materials & Semiconductor

Solution Provider BeyondLife Cycle Management

To support customers’ businesses from all aspects,
from installation to replacement

HORIBA Core Values“The Next Stage of Super Dream Team”

To enhance the organizational structure that fosters resilient humanresources, which are the driving force of all business operations* “SDGs” refers to the Sustainable Development Goals unanimously
adopted by the United Nations General Assembly in 2015.

HORIBA Repor t 2020-2021

36

H
O
RIB
A’
S
Tech
nolo
g
i
e
s
HORIBA’s measurement

HORIBA’s Management

Valuing technology and human resources

technology

a
tic
ly

HORIBA’s measurement technologies
began with electrochemistry-based pH
meters. Since then, we expanded thescope of analysis of our products
including liquids, gases, and solids while
we accumulated various analyticaltechnologies that use infrared rays, X-rays,
and the like. During this time, the analyticaland measurement needs of the market
changed and expanded, frommeasurements at production sites to areas
such as global environmental
conservation, efficient usage of energy,
health care, and the pursuit of safety andsecurity. In response to these changes,
HORIBA has developed and provided theanalytical and measurement instruments
required by the times, backed by the coretechnologies we have established.

Infraredmeasurement
Technology toanalyze components
in gas in real time

Stack gasanalyzers

Gas flow control

Particle analysis

Samplehandling

Air pollution
analyzers

Technology to measureparticles (diameter, number,weight, and components)* selected based onamount of sales

Spectroscopic
ellipsometers

Spectroscopic analysis
Technology to analyzematerials by using
ultraviolet light, visible light,
and near-infrared light

Liquid analysis

2021

Optical/Spectroscopic Measurement Technologies for Life Science

2019

Advanced Analytical and Measurement Technologies for an Efficient Control System to
Maximize the Performance of Electric Power and Battery Usage

2018

Advanced Analytical and Measurement Technology in the Semiconductor Manufacturing Process

MedicalDiagnostics
Data
handling

Raman
spectrometers

Fluorescence andabsorbance
spectrometers

Technology to measurecomponents in, or characteristics
of, liquids, such as pH, sodium,acids, alkalis, and glucose

We founded the Masao Horiba Awards in 2003 as part of our hope to give back to the researchers
in the analytical and measurement industry that have buttressed our growth to date. By supporting
young researchers and engineers inside and outside Japan who are steadily working on thecreation of analytical and measurement technologies, we are encouraging the further developmentof this research field, which in turn contributes to the further deepening of industry-academia
collaboration and the acceleration of innovation.

* Due to the spread of COVID-19, the Masao Horiba award in 2020 was postponed to 2021

Hematology
analyzers

Nanoparticle tracking
analysis systems

HORIBA
core
technologies*

Our approach to business collaboration is
also introduced on page 29

Process &Environmental

Mass flow
controllers

Technology tomeasure andinstantly control theflow of fluids

HORIBA continues to strengthen and passdown core technologies within thecompany and promote collaboration withexternal parties, in order to realize open
innovation and proactively create newtechnologies and businesses.

37

Automotive

Elemental
analyzers

Since the establishment of HORIBA, andup to today, collaboration with universities
and research institutes has supported thedevelopment of our technology.

Recent themes
for theMasao Horiba
AwardsEmissionmeasurement
systemsAna

A wide range oftechnologies and theirdevelopment

rs,
cto
e
t
de
ts, etc.
nem ts,
tru gensn al i reSemiconductor
Blood glucose
analyzers

Sy
st
m em
et at
ho iz
ds atio, d n,
at m
a m eaan sure
ag me
em nt
ent

Chemicalconcentration
monitors
Water quality analysis
and examination
systems

Scientific

HORIBA’s technology has grown while always facing the thought (omoi) of “how can we develop something that benefits people and theEarth?” Starting with the first electrochemical-based glass electrode pH meter made in Japan, HORIBA developed mass flow controllers
and emission measurement systems, both of which have large market shares. In other words, we have developed products andapplications required by society, as if a tree grows branches and leaves with the core technology of analysis and measurement as roots
and trunk. Going forward, we will continue to strengthen the synergies of the resources we hold in our five businesses. Also we willtransform into a company which accelerates innovation with measurement technologies, while utilizing acquisitions centered ontechnology and human resources, and industry-academia-government / industry-industry collaboration.
HORIBA Repor t 2020-2021

38

HORIBA’S
Human
Resources
Initiatives for the human

HORIBA’s Management

Valuing technology and human resources

External
evaluation

resources that drive growth
The strength of people is the driving force to achieve business growth. At HORIBA, we use
the phrase “talents” to convey that our employees are our most important assets. As
represented by our BlackJack Project and Stained Glass Project, we have continuously
striven to maximize the individuality and skills of our employees. Going forward, throughunique HORIBA human resource strategies, we are committed to putting our corporate mottoof “Joy and Fun” into concrete practice, while also building structures that allow each andevery employee to shine.

Measure

Measure

We have been selected as a Nadeshiko
Brand, which is jointly decided by the
Ministry of Economy, Trade and Industry
and the Tokyo Stock Exchange, for the third
consecutive year since 2019. In addition,
for the fifth year in a row, we wererecognized as a “2021 Certified Health &Productivity Management Outstanding
Organizations Recognition Program (White
500),” which is jointly promoted by the
Ministry of Economy, Trade and Industry
and Nippon Kenko Kaigi.

Supporting robust
organizational
strength

Measures to foster
human resources

Measure2021 Certified Health & Productivity
Management Outstanding
Organizations Recognition Program(White 500)

In 2012, HORIBA’s top management issued its
Physical and Mental Health Promotion
Declaration. Inclusion in the 2020 Health andProductivity Stock Selection Program was
granted out of recognition for various initiatives
conducted in pursuit of this declaration’s goals.

Helping diverse
personalities andabilities shine

The Stained Glass Project

Since 2007, we hold Blackjack World Cup annually to select the best themes ofprojects from each country and provide a venue to report the results and the
motivations behind them to the management team. In 2020, the event was held
remotely for the first time, and a U.S. project won first place. In the midst of the spreadof COVID-19, project members changed their awareness and behavior, and contributed
to a significant increase in production and quality improvements for detectors for
medical equipment manufacturers. Those who participated in the activity are proud ofwhat they accomplished in their activities, which assisted hospitals and helped savemany lives, and have fostered the HORIBA spirit.

Aiming to produce more global leaders, HORIBA is promoting
the Global HORIBARIAN Exchange (GHE) Program as thefoundation of our human resource development measures.
HORIBARIANs from around the world, who have “omoi,” seek
opportunities to take on challenges and expand their activities
by experiencing diverse cultures and environments.

With regard to our initiatives to promote
diversity, we received high marks in the
categories of integrating diversity into
corporate strategy, governance,
improvement of company-wide
environments and rules, and change inbehavior and awareness of employees.

The BlackJack Project
HORIBA launched the BlackJack Project in 1997 with the purpose of changing
employee awareness and behavior. To date, more than 11,000 project themes havebeen registered. Employees themselves decide on themes from many questions andissues, such as improving work efficiency, developing human resources, andstrengthening organizational capabilities, set the ideal form, and work onorganizational reform. We believe that this method of “bringing out behavioral
changes and establishing them” will be a part of HORIBA’s corporate culture.

Fostering “omoi”
and have it
flower globally

Nadeshiko Brand

Along with our promotion of changes in work styles, such as theGood Place Work System (remote work system) introduced to all
Group companies in Japan in 2019, on-site working groupmembers make proposals to top management on diversity issues
and continue activities to realize these proposals. We will help ourdiverse human resources demonstrate their individual strengths
and will pursue job satisfaction and comfortable working
environments, represented by our corporate motto, “Joy and Fun.”

Keegan McWilliams-Ward of HORIBA
Instruments Incorporated (U.S.) has been
in Japan on the GHE program since 2020.
By leveraging his opportunity to take onchallenges in the R&D sector in Japan
where interactions occur free fromsegment limitations, he continues to growinto a person who drives the developmentof next-generation products.

Web Link
Click!

The dedicated website for the Stained Glass Projectprovides details of HORIBA’s unique approaches
to supporting our human resources.

Provide a stage for HORIBARIANs
to be active throughthree coordinated measures
Basic human resources policies
Open and Fair
We ensure that important information and rules are shared
openly so that there is free communication within thecompany.
We provide fair opportunities for uniquely individual anddiverse human resources to challenge themselves.

HORIBA’s
five pillarsof “omoi*”
39

Point-added policy

Two-way communication

HORIBA’s point-added policy doesn’t confer any points, even
if there is no failure, unless an employee takes on challenges.
Points are conferred for taking on challenges. If successful,
further points are conferred. This system supports andrecognizes ambitious human resources, while valuing thestart-up mindset.

Information is not conveyed, but rather it is shared. In order toremove the barriers of executives and organizations, andachieve true reciprocal communication in the process, weemploy various systems, such as global gatherings whereideas are directly voiced to management, as well as birthday
gatherings for employees.

For each and every employee to personally attain our company motto of “Joy and Fun,” we firmly hold and implement five omoi:• To be a part of a collaborative community, at the forefront of new ideas and creations.
• To achieve goals and make life memorable by fostering the highest intellectual potential.
• To reach across the globe to expand learning that captures key business developments, wherever they occur.
• To be proud of sharing what I do and what HORIBA delivers.
* The Japanese word “omoi” is used to engender shared values among global employees.
• To be helpful to the world and its people.
HORIBA Repor t 2020-2021

40

CFO MESSAGE

Balanced management – diverse business portfolio      
HORIBA is maximizing
corporate value throughinvestments with long term
perspective and initiatives
to improve asset efficiency.

HORIBA started its business as an R&D oriented start-up company, and we promote balanced
management which consists of a portfolio of five business segments which use our wide variety oftechnologies. By developing business in various markets, HORIBA is able to generate steady profits, evenif business risks materialize in a specific segment which faces a down-cycle of demand or economic
stagnation. In addition, we would like to utilize our core technologies and sales channels to meet market
needs more by going beyond existing business segments and country borders.
We recognize that the negative effects from the spread of COVID-19 have not come to an end yet, andthat the world economy is still in some sense in a “crisis mode.” It is important to increase liquidity of cash
in order to be ready for crisis management and retain funds to make strategic investments timely. We will
maintain our financial resilience that makes it possible to support business proactively and sustainably
under the market environment which is undergoing complex and rapid changes.

Basic capital policy

Masao Okawa

Managing Director andGeneral Manager of General Administration Division

Point

1

Point

Link shareholder returnto earnings growth

Maintain high ROE
As stated in our MLMAP2023, HORIBA
aims to achieve ROE at 10% or more in
2023. ROE is one of our mostimportant management metrics.

Results of HORIBA Group– Looking back on the year ended December 31, 2020 –In fiscal 2020, sales decreased 13.1 billion yen to 187.0 billion yen (down 6.6% year-on-year). Sales tosemiconductor production equipment manufacturers increased in response to a recovery ofsemiconductor manufacturers’ capital expenditures; however, sales decreased in the Automotive
segment, mainly due to the stagnation of corporate activities affected by the spread of COVID-19. On the
profit side, operating profit decreased 1.2 billion yen to 19.6 billion yen (down 5.8% year-on-year) due todecreased sales, although we implemented some measures to save expenses.

Japan

Americas

EuropeChina

Business management
Business operation
based on balanced
management

Yen
150

75

33.3
23.6

38.3

41.1

30.2

32.1

38.4
27.8
45.0

34.9
27.5
44.5

34.1
27.4
39.5

31.0

28.2

0

Sales
(BJPY)

41

56.5

65.0

65.9

62.1

57.6

2016

2017

2018

2019

2020

Target 30%
in total
return ratio

90

60

170.0

195.3

210.5

200.2

187.0

130

13

17

2009

2010

60

67

90

60

50

2012

2013

90

70

2014

27.6
2015

35.4

30.0

30.6
26.8

2011

120

85

28.2

30

0

%

150

145

116

120

40

25

(including commemorative dividends
and share buybacks)

Change in dividend
policy in fiscal
2013 and after

50

33.2

We conduct proactive investment, which is
expected to result in creating future corporate
value. Additionally, each group company andeach business segment sets and manages its
own capital efficiency targets to maximize
HORIBA’s corporate value.

Relationshipwith stakeholders

Point

3

Stable financial baseWe have obtained an “A” from
Rating and Investment Information,
Inc. and “A+” from Japan Credit
Rating Agency, Ltd. as ratings forour 5th and 6th unsecured
corporate bonds.

Point

Generating profit byproviding high-value-added
products andservice globally

Total return ratio (right)

Dividend per share (left)Commemorative dividend

Asia (excluding Japan and China)

%

19.6

Improve capitalefficiency to maximize
corporate value

Continual investment
from long-term
perspective

Flow of cash

3

1

Point

2

Shareholder return

Dividend payments and total return ratio

100

25.2

We set total return (the combination of dividend
payments and share buybacks) to shareholders
as approximately 30% of consolidated net
income. This payout ratio reflects due
consideration given to ensuring stable
management and retaining earnings as capitalfor aggressive business development.

Point

Cash flow

In accordance with these results, it was decided that a dividend of 90 yen per share as shareholder
returns for the fiscal year ended December 31, 2020. HORIBA has adopted a policy of setting its total
shareholder return ratio, which includes dividends and share buybacks, to about 30% of consolidated net
income. We intend to increase corporate value through business growth and continually provide returns
to all of our owners (shareholders).
Change in the geographical sales mix

2

2016

28.8

27.4
2017

2018

2019

2020

30

0

Approach to continual investment
Investment in R&D

Capital expenditure

Approach to M&A

We have invested 10% of sales in
R&D continually, even in recessions
where many companies reduce theirinvestment, and that has allowed us
to increase market share when
demand recovered. We believe that
continual R&D investment is thesource of our competitiveness.

Regardless of short-term declines
in asset efficiency, we invest for the
future from a medium- to long-term
perspective. While high-level
investments continue to respond tochanges in the market
environment, we aim to maximize
return on investment in the next
few years, taking the asset turnoverratio and cash flow for each
investment project into account.

From a long-term perspective, we
are making friendly acquisitions ofentities that have unique
technologies, which complement,or have potential synergies with,HORIBA’s technology portfolio.
Internal department of legal,
intellectual property, and financefunctions are actively involved ininvestment processes such as due
diligence.

In fiscal 2013, we switched from a non-consolidated dividend payout ratio, which
is based on non-consolidated net income at HORIBA, Ltd., to a total return ratio,
which is based on HORIBA’s consolidated net income.

HORIBA Repor t 2020-2021

42

CFO MESSAGE

Progress of investment for mid-term growth

Region-centric operation

In the mid-long term management plan MLMAP2023, we aim to expand business in growing markets. While
we faced a difficult situation in 2020, we continued to make aggressive investments for the future. We
implemented large strategic investments, such as the new office of HORIBA Techno Service Co. Ltd. as theheadquarters of our service business, a new facility in China to strengthen local engineering capabilities, andexpansion of the HORIBA FuelCon GmBH factory in Germany to respond to increasing demands for battery
and fuel cell test systems. We will utilize these investments utmost and will contribute to generating cash flows
and expanding profits.

HORIBA’s global operation is region-centric and respects independence in each affiliate. Local CFOs are
hired there, and we build regional organizations rooted in the local area and enable them to operateautonomously. Region-centric operation becomes more important under the spread of COVID-19. We think
the structure which HORIBA has built so far has worked effectively in terms of investment management or
so. Regarding communication with headquarters, we utilized the online communication tools that we had
introduced. At the same time, we followed up on important regional issues by monitoring KPIs carefully. In
addition, we strengthened credit risk management and control in the regions where bankruptcies or so haveincreased.

On the other hand, we have reviewed of our investments in more detail and, if necessary, adjusted in such a way
to reduce unnecessary cost. When we face headwinds, we need to focus more on projects which will contributeto future growth and invest intensively in them. The responsibility of the finance function has been increasing.
Major investments in recent years

Energy & Environment

Materials & Semiconductor

Investing in R&D and facilities in order to respond to demand for new
automotive technologies, such as electrification, autonomous driving,and so on. Also, strengthening local engineering capabilities to fulfil
demand for environmental measurement in emerging countries.




Acquired ECT* (U.K.) business for the Automotive segment

Investments

Investments

Investing in production facilities to supply products with stable qualityand deliver them in a timely manner while responding to volatile
demands from the semiconductor market, and also investing in R&D tofollow the quick changes in semiconductor production technologies.

Acquired battery and fuel cell testing system business andexpanded the factory (Germany)
Established comprehensive verification facilities to support
autonomous vehicle development (U.K.)

Established HORIBA Advanced Technology Center (Japan)

Expanded the Aso factory of HORIBA STEC Ltd. (Phase 5) (Japan)Transferred Optical Spectroscopy Center to strengthen
R&D and production (U.S.)

HORIBAs’ global matrix management

Management functions

Promotion of global operation
HORIBA has promoted autonomy in business
operation in each global region. We plan andexecute business strategy based on Regional
Strategy Units, which are subdivisions of businesssegments and regions. Global meetings at boththe management level and the functional level areheld to create a spirit of one company.

Production and services
Sales

Regional
control

R&D

Auto

Plan and execute the strategy
P&E
Medi
Semi
Scientific

Japan

Asia

*ECT: Engineering Consultancy & Testing

Bio & Healthcare
Investing in R&D and facilities to enhance our market position in the
bio and healthcare fields. Also, investing in the IVD (in-vitro
diagnostics) area to expand business.
Acquired nanoparticle tracking analysis system business (U.S.)
Transferred and expanded the factory for Raman
spectroscopy meters (France)Acquired clinical chemistry reagent business (U.S.)

Americas

Investing to develop from a business model centered on equipment sales
to one providing services such as instrument maintenance and data
management. Also investing in entities in emerging markets.

EuropeInvestments

Investments




Corporate

Launched ERP systems at all group companies

Built new office which is the headquarters of the service
business (Japan)

Building a new facility in Shanghai (China)

HORIBA Premium Value
In order to improve asset efficiency, we utilize HORIBA Premium Value, which is incorporated into
organizational KPI processes, such as budgeting, monitoring, and evaluating business performance. In case
HORIBA Premium Value is negative for an affiliate or a segment, we analyze the factors and reasons behind it,
implement measures and policies to improve HORIBA Premium Value, and monitor and follow it up vigilantly.
In the meantime, we are in the phase where investment has to be implemented in order to respond to thedrastic changes in the market. Even if the HORIBA Premium Value is negative in the short term, we aim toincrease HORIBA Premium Value in the medium- to long-term. We put priority on long-term sustainable
developments and, as such, we take reasonable consideration for that the introduction of HORIBA Premium
Value will not hamper investment.
Tree of indices of asset efficiency

HORIBA Premium Value

FormulaOperating income

Utilization

Value Driver
Net sales

Budgeting

Cost of capital*

Costof salesSelling, generalandadministrative
expensesWorking
capitalFixed assets

Examples of activity targets by segment

New saleschannel development
Performance
evaluation

Monitoring

Lead time reduction
Inventory optimization

New product launch

Early collection of
accounts receivable

Online meeting with the CFOs of groupcompanies in European countries
We hold online International Controllers’ Meetings
every quarter by region. In the past, the meetings
were held once a year and the global CFOs gatheredin Japan.

Aim to increase corporate value sustainably
I think that the purpose of HORIBA is “Joy and Fun,” which is our corporate motto. HORIBA respects thediversity and independence of each HORIBARIAN, and each HORIBARIAN works with the spirit of “Joy andFun,” so that great products, instruments and services will be developed. At the same time, through analysis
and measurement, our products, instruments and services create economic value and contribute to global
environmental protection and social development. It is vital to develop and sustain the above mentioned
positive cycle, and to increase our corporate value sustainably. We also recognize that it is an important
responsibility of the company to offer rewarding works, to facilitate comfortable working environments, andto pursue work styles that suit the various circumstances surrounding HORIBARIANs, such as infectious
disease control, eldercare, and childcare. At the same time, we need to manage risks from the point of viewof health and safety as well as to respect human rights.
In January 2021, we articulated “Code of Ethics,” which is established as the global rule. This stipulates themissions and responsibilities of all HORIBARIANs in the world, including respect for the fundamental humanrights and voluntary and proactive efforts for environmental issues. The Code was drafted in English toencourage deeper understandings globally, so as to unify the “omoi” of diverse human resources.
We aim to increase corporate value sustainably by implementing various policies and through investmentswith long-term perspective and initiatives to improve asset efficiency.
April 2021

* Cost of capital: Invested capital × In-house rate of cost of capital. We apply an original benchmark that is based on HORIBA’s
WACC and comparable with operating income in connection with our cost of a capital target. Currently, evaluation isconducted by applying the same rate to all regions and businesses and monitoring degrees of improvement.

43

HORIBA Repor t 2020-2021

44

HORIBA and ESG InvestingS

G
Governance

EEnvironment

In order to meet the expectations of our stakeholders, all HORIBARIANs implement various activities to achievebusiness growth in each field under the corporate motto “Joy and Fun,” while understanding the concepts of
ESG investment and the Sustainable Development Goals (SDGs) proposed by the United Nations.
The various stakeholders of HORIBA can be benefitted from our growth.
HORIBA has proactively disclosed not only financial information but also non-financial information, which is“invisible values.” We believe that both types of information will bring value to ESG investors and the many
people who expect companies to respond to the SDGs.

Au
tom
otiv
EnProc evir e
Me onmss &dice
al- ntalDiagSe
mic nost
ics
on
du
cto
Sc
r
ien
tific

Society

HORIBA and ESG InvestingThe HORIBA Group set forth the “HORIBA Corporate Philosophy” as its basic position on corporate activities, under the
corporate motto “Joy and Fun.” Based on these, HORIBA introduced the original “Code of Ethics” as a guiding standard toassist the company in realizing sustainable development, going forward.Then, HORIBA reviewed and refreshed the “Code of
Ethics” from the perspective of the challenges that we should take on a global organization.

Main points of the new “Code of Ethics”:• a standard for behaving as a “good corporate citizen” with leadership by
top management• compliance with laws, regulations, etc.
• contributing to society by providing excellent products and services• creating rewarding and amenable workplaces• respect for human rights of all people• formulated in English to help deepen understanding on a global,
group-wide basis
Code of Ethics

HORIBA Corporate
Philosophy

Web Link

Au

Web Link
Click!

tom

S

G
ance

GovernE
Environment         

Au
tom
otiv
EnProc e
vir esMe onms &dice
al- ntal
Dia
gn
Se
os
mic
tic
s
on
du
cto
Sc
r
ien
tific

SocietyG
GovernaS

HORIBA Advanced Techno, Co., Ltd., which conducts water quality measurement-related business, has “Protect water quality
around the world” as its mission statement. In 2020, we held web seminars from April to May for all 300 employees to further
promote this mission within the company and to think about how we can contribute to the SDGs.
The seminar was an opportunity for us not only to recognize how much our current products contribute to theenvironment, but also to gain a deep insight into what we need to do to differentiate ourselves, such as bymaking our products and business style with more environmental consciousness. About 30 people who agreed
with this purpose started a project named “Project Colors,” and five teams and one special team were formed.
They hold 30 workshops a year and promote activities based on each theme below.

nceSocietyE
EnvironmentotivP
En roc evi es
Me ronms &dice
al- ntal
Dia
gn
Se
os
mi
tic
co
s
nd
uc
tor
Sc
ien
tifi
c

Click!

    
(1) Internal educational activities: “fostering” awareness of the SDGs
(2) Activities through education: fostering children’s interest in water andincreasing partners(3) Creating concept models and worldviews for a splendid future:environmentally-conscious manufacturing(4) Going paperless: eliminating all paper(5) Promotion of joyful recycling: cradle to cradle

In addition, the special team worked on the theme of “Water cycle game - let’s learn
about water with ‘Joy and Fun’”

Fivebusinesses

Organizational
structures

Talents

45

BrandsTechnologies

Customers

Invisible values

If we are to achieve on-going corporate growth, we must
aim to improve financial metrics such as net sales andprofits, while at the same time taking care of ournon-financial values, such as talents and technologies.
HORIBA considers its brands, organizational structure,
talents, technologies, and customers to be invisible values
and invests in them continuously.

Detailed information regarding
HORIBA’s CSR activities can be foundon our website:

Web Link
Click!

Signatory to international initiatives
United Nations Global Compact (UNGC)HORIBA, Ltd. supports the initiatives of the United Nations
Global Compact since we became a signatory in 2012 throughthe agreement of top management.

HORIBA Repor t 2020-2021

46

Corporate GovernanceAppoint/

Dismiss
Audit
and Supervisory
Board Members: 3

Corporate governancestructure diagram

General Meetingof Shareholders

Coordinate

Appoint/
Dismiss

Point 2

Point 1

We have appointed audit andsupervisory board members (outside &independent auditors) since theestablishment of the company in 1953.

Choose to be a
Corporation with Audit
and Supervisory Board
Supervise/
MonitorInternal Auditing

Point 2

2020

1
Directors: 6

Reply

er
Int

l

na

l

tro

n
co

2015

3

17%

Directors: 8

Operations Committee/
Management
Committee, etc.

Board of Directors

Directors: 8

Select/Dismiss
Business Execution
Instructions

ReportDiscuss/
ReportNumber who are non-executive& independent directors:
3 (1 female)

2020

38%

Sales
and marketingTechnology
and R&D

Governance

Coordinate

mm

o
nC

o

oti

om
Pr

e
itte

es

lin

e
uid

air

RI

,
BA

Ltd

SR

.C

Ltd

public-sector grants, subsidiaries, etc.

*3 Number of corporate officers*4 HORIBA, Ltd. Risk Control Committee: deliberates on issues related to risk
management and approves relevant measures.

Appointment of non-executive directors
New non-executive directors were appointed at the General Meeting of Shareholders in March 2021.
Non-executive
director(Reappointment)

Legal affairs

.

Co

4

d F cal G
an
hi
n
e
Et
Supervise,/OpFemale members: 2;
A
y
H
h
B
Business
non-Japanes: 6
n/O
RI
op
Execution
Fu
HO
os
l
d
i
e
an
Ph
tte
Coordinate
te
oy
mi
a
J
r
m
Promote
o
o
e
rp
tte
nC
e
mi
tio
Co
tte
i
o
m
m
BA
Co
rom
om
RI
rol
lP
C
t
O
o
n
r
n
H
nt
Co
tio
*1 Committees, etc.: referes to conferences and committees established and
Co
isk
mo
al
R
o
registered based on the “Regulations Concerning Conferences and
n
r
r
A
P
e
t
B
Committees,” such as the Group Promotion Committee for Management of
R
In
RI
S
O
Public Subsidies, and the Safety and Health Committee.
C
H
A
B*2 Statutory audit, and auditing of export control, legal affairs, fixed assets,
RI
3

HO

Strengths of HORIBA’s Board of Directors
Globalbusiness

Corporate Officers/
Division Managers 22in total*

e*

tte
mi

om

lC

o
ntr

sk
Ri

Consult/Proposeenc
lia ittee
p
m m
Co om
C

Report Principles

We have been
employing a corporate
officer system since
1998.

Representative
director

The Audit and Supervisory Board performs objective and appropriate auditing and monitoring of the work of the Board of
Directors, in cooperation with independent auditors, internal auditing (Group Internal Audit Office, which is positioned
directly under Executive Vice Chairman & Group COO), and the non-executive directors.

Industryknowledgessinetions
Buecu
Ex

Point 3

Reportnit

Committees,
etc.*1

ReportSupervise

In 2020, the Board met 12 times, had energetic discussions, and made prompt decisions. In addition, HORIBA
introduced a corporate officer system in 1998 to make smooth and agile execution of operations under the supervisionand guidance of directors.

47

Direct and
Order

2

*

ng
ori

Mo

Supervise

ReportCorporate governance system

Management
strategies

Coordinate

Supervise

HORIBA has adopted the type of organization defined as a “Corporation with Audit and Supervisory Board” in the
Companies Act. Based on this organizational design, HORIBA, Ltd. has appointed non-executive directors and audit andsupervisory board members (outside & independent auditors) since its founding in 1953 to avoid management from an
introverted approach.

Leadership(Quality, Environmental, Safety & Health,Quality of medical equipment, Business
continuity management)

Remuneration
Advisory Committee

Percentage of non-executive directors
on the Board of Directors

Non-executive directors

2015

Integrated Management System(IMS)

Consult

Supervise/
MonitorAppoint/
Dismiss

Financial Audit(Group Internal Audit Office)We have appointed non-executive
directors since the establishmentof the company in 1953.

Basic Policy on Corporate Governance
Based on the corporate philosophy of “Open and Fair,”
HORIBA has pledged to (1) establish an organizational
structure that promptly responds to changes in thebusiness environment, (2) improve its managerial
monitoring of performance, and (3) enhancecompliance-related arrangements. These objectives havethe aim of establishing a world-class governancestructure. At the same time, we are committed toestablishing good relationships with all stakeholders,
including owners (shareholders), customers, employees,
and local communities. In addition to proper information
disclosure, we seek to promote constructive dialogue with
our owners, contributing to our sustainable growth andmedium- to long-term improvement in corporate value.

Independent
auditorNumber who are outside &independent auditors: 2 (1 female)Financeandaccounting

Sawako Takeuchi
Doctor of Engineering,
Doctor of Economics

Non-executive
director

Haruyuki Toyama

Non-executive
director

Fumihiko Matsuda
Doctor of Medicine

Reasons for appointment

Reasons for appointment

Reasons for appointment

She has been appointed again in order for the
management of HORIBA to benefit from her
specialized knowledge in management
engineering and international experience inEurope, an important base for HORIBA business
operation.

He was newly appointed in order for the
management of HORIBA to benefit from his expert
knowledge as a corporate lawyer, together withhis extensive experience and expertise in the fields
of international banking and financial affairs.

He was newly appointed in order for the
management of HORIBA to benefit from hisaccumulated specialized knowledge in viruses,
immunity, genomes and other areas of the medical
field, extensive management skills through Chief
Advisor to the President for Academic Affairs andinternational experience in France.

HORIBA Repor t 2020-2021

48

Corporate GovernanceEvaluation of the Board of Directors’ effectiveness

Relationships with owners (shareholders) and investors

From December 2020 to January 2021, we distributed to all eight directors and to all three audit and supervisory board members aquestionnaire concerning the Board of Directors’ effectiveness, and received responses from all eleven persons.
The questionnaire contained questions regarding the three roles and responsibilities of the Board according to Basic Rule 4 of the Corporate
Governance Code. Most responses evaluated these matters as “Adequate” or higher. In addition, matters discussed by the Board andcomposition of the Board (number of members, diversity in terms of gender and nationality, knowledge, experience, ability, etc.) were
evaluated as no problem at present. A number of opinions were also received concerning briefings held before and after Board of Directors
meetings. These included “I think opportunities, which non-executive directors can ask persons in charge of departments about current
issues and proposals before the Board of Directors meetings, are effective to fulfill their duties” and “I think the advance briefings andexplanations of industry trends for non-executive directors and audit and supervisory board members (outside & independent auditors) areuseful for us to understand the content of discussions, so I hope these will continue.”
The results were compiled, analyzed, evaluated, and reported to the Board of Directors for discussion.

Directors’ Rremuneration
Remuneration for directors consists of base remuneration (periodic fixed-amount salary), earnings-based remuneration linked to the earnings
results of each fiscal year, and stock options linked to medium- to long-term earnings performance. The percentage of each remuneration isset after the maximum limits of remuneration is resolved at the general meeting of shareholders. The amount of remuneration for eachdirector is determined by the Board of Directors in accordance with the position and the scope of the director. Remuneration for
non-executive directors, however, consists strictly of base remuneration (fixed-amount salary), that, given the nature of their assignment, is
not linked to earnings performance.
Remuneration for directors (not including non-executive directors) for 2020 was 690 million yen in total.
Regarding directors’ remuneration from fiscal 2021 onward, we established the Remuneration Advisory Committee with independent
management members as its main constituent members (three non-executive directors), so that we obtain advice from an independent
standpoint in order to improve objectivity and transparency in the decision-making procedures of the Board of Directors.
Breakdown of directors’
remuneration(excluding non-executive directors)

Base remuneration

20%

Earnings-based remuneration

71%

Stock options

9%

Total directors’ remuneration

Main agenda items in Board of Directors meetings
With the appropriate involvement of andadvice from non-executive directors, theBoard of Directors freely discusses andexchanges opinions on matters for resolution
and reporting, as well as matters that
contribute to the long-term improvement ofcorporate value.
The progress of matters resolved by the
Board of Directors is reported on a regularbasis, and mechanisms are in place bywhich directors can monitor the status of
their implementation.

Major matters resolved at and reported to
Board of Directors meetings in 2020
• Investment projects• Corporate alliances• Financing• Cross-shareholdings• Decisions on executive personnel
matters and remuneration• Resolution on dividends• Analysis and evaluation of the Board of
Directors’ effectiveness• Implementation of the Masao Horiba
Awards• Progress on matters forresolution by the Board of
Directors• R&D schedules andachievements• Status ofsales/production/quality• Product quality improvement• Organizational
restructuring/major personnel
changes• Payment of invention rewards• Business performance• Strengthened export control regulations• Status of group company management

49

Matters regularly reported
throughout the year

Open general meeting of shareholders

Since its initial stock listing in the second section of the Osaka Securities Exchange in 1971,
HORIBA has held the annual general meeting of shareholders on a Saturday so that a large
number of owners are able to attend the gathering, and an informal gathering event withmanagement is held afterwards. Regarding the 2021 general meeting of shareholders, wecalled upon shareholders to refrain from attending, and did not hold the informal gathering due
to the spread of COVID-19. Instead, we streamed the meeting online to maintain transparency.

The philosophy behind the shares we hold for strategic purposes
other than pure investment

HORIBA believes that collaboration with other companies is necessary for us to growsustainably. Toward that end, we make determination on the holding of shares after
comprehensively considering matters including business strategy, the strengthening ofrelationships with business partners, and the maintenance of relationships with local
communities. Every year, the Board of Directors confirms whether the amount of shares wehold for strategic purposes other than pure investment is appropriate. In addition to that, theconformity of holding individual shares are verified, by confirming whether they are appropriate
for the purpose of holding and whether the benefits and risks associated with them arecommensurate with the cost of capital. When shares we hold are recognized as inappropriate
for retention, we will review response measures such as share curtailment.

Anti-takeover measures

HORIBA has not adopted anti-takeover measures. We reviewed the “Basic policy on the
persons to control decision making over the financial and business policies of HORIBA,” which
was announced in our Corporate Governance Report.

Constructive dialogue

HORIBA abides by the “Basic Policy for Constructive Dialogue with Shareholders” asannounced on our website. We make efforts to explain our corporate policy, financial condition,and corporate culture to our owners based on the perspective of “fair disclosure,” and ask fortheir understanding and continued support.

Please see our website for moredetails regarding our Corporate
Governance Report.
(in Japanese only)

Web Link
Click!

Please see our website for moredetails regarding our“Basic Policy for
Constructive Dialogue with
Shareholders.” (in Japanese only)

Web Link

Status of IR-related activities
For analysts andinstitutional investors

Financial results briefing: held four times per year
Visitations and individual interviews (within Japan): about 250 times
Visitations and individual interviews (overseas): about 80 times

For individual investors

Held about two times per year

Click!

Risk management and compliance
HORIBA stably executes its business through the appropriate management and control of risks related to operations. We have built a risk
management system that sets the preservation of managerial resources and the increase of corporate value as key issues for management.
The Board of Directors, Management Committee, Operations Committee, and HORIBA Risk Control Committee discuss issues related torisk management and approve measures to mitigate these. The latter committee includes members from primary group companies inJapan and aims to strengthen systems for risk management and compliance. We have also established a Compliance Committee thatcooperates with the Risk Control Committee and is responsible for raising awareness of compliance and deliberating related matters, aswell as adjudicating internal reports, responding to these, and issuing corrective recommendations.
HORIBA established a “HORIBA Corporate Philosophy” and, in January 2021, “Code of Ethics” as the one of the global rules, andstrengthens the risk management system and compliance system for the entire group. Regarding risks related to each business segment,
development and manufacturing, and finance, we have established rules such as the Board of Directors rules, group risk management
basic rules, group compliance management rules, and group company management rules, in order to clarify the risk management system
and its responsibilities in the event of a crisis, and are implementing detailed risk management. The group company management rules
clarify decision-making authority when making strategic investments including acquisitions both domestically and internationally, as well as
responsibilities for reporting when legal, financial, human resource, and other management risks become apparent, and this enables us tomonitor this area closely.
To facilitate early detection and correction of illegal acts, we also established an internal reporting system that includes a lawyer consultation
service, as well as an internal e-mail reporting system. In addition, to mitigate and prevent risks that involve personal information protection,
export controls, and other laws and regulations related to business, and to strengthen our crisis response systems, we implement varied
education and training as necessary, and work to enable people from top-level managers to employees to recognize their own roles andact appropriately with responsibility.

HORIBA Repor t 2020-2021

50

List of management members

Board of Directors
Audit & Supervisory Board Members
Corporate Officers(As of April 1, 2021)



Masao Okawa
Managing Director

Atsushi Horiba
Chairman & Group CEO

In 1971, Atsushi Horiba joined OLSON-HORIBA Incorporated,
a U.S. joint venture of HORIBA, Ltd. In 1977, he returned to
HORIBA, Ltd. after received master’s degree on Electronic
Engineering from Graduate School of University of California,
Irvine. He was appointed to President in 1992, and concurrently
served as Chairman, President and CEO since 2005. In 2018,he was appointed to Chairman and Group CEO.
He has been invited to serve as a member of official
government committees, including the Ministry of Economy,
Trade and Industry’s Industrial Structure Council and
Manufacturing Industry Committee, and the Cabinet Office’s
Advisory Panel on the Modalities of Government andAdministration. He also devotes himself to realizing industry andthe local economy by serving as Chairman of the Japan Electric
Measuring Instruments Manufacturers’ Association, Presidentof the Japan Analytical Instruments Manufacturers’ Association,
Vice Chairman of the Kansai Economic Federation, and Vice
Chairman of the Kyoto Chamber of Commerce and Industry.
In recognition of his contribution to the development of science,technology, and industry in France, he was awarded theL’Ordre National du Mérite (Officier) in 1998 and the L’Ordre
National de la Légion d’Honneur (Chevalier) in 2010 by Frenchgovernment. He was also awarded Doctor Honoris Causa
degree by the University of Montpellier, France in 2015 andreceived the Order of the Rising Sun, Gold Rays with Neck
Ribbon in 2019 by Japanese government.
51

Juichi Saito

Executive Vice Chairman & Group COO

Juichi Saito joined HORIBA, Ltd. in 1982. After a few yearsof experience designing automotive exhaust gas test system
as an electrical engineer, he was transferred to the U.S.
operation where he served as an applications engineer,service engineer and project engineer for Semiconductorand Automotive fields in Silicon Valley and Michigan. Then he
was assigned as a new products planning for Scientific andProcess & Environmental fields at the U.S. headquarters in
Irvine. Upon his return to Japan in 1992, he served several
important management positions including General Manager
of Automotive R&D. In 1998, he moved to the U.S. again
and became responsible for the U.S. operation. In 2004 hemoved to HORIBA STEC Co., Ltd. and became the leader of
Semiconductor segment of the group. In 2010 he returned
to HORIBA, Ltd., appointed as Executive Vice President in2013, Executive Vice Chairman and Group COO in 2018.
He serves Vice Chairman of the Japan Electric Measuring
Instruments Manufactures Association and the Japan
Scientific Instruments Association.

Masayuki Adachi(Doctor of Engineering)President & COO

Masayuki Adachi joined HORIBA, Ltd. in 1985. He worked on
the development of new products for the Engine Measurement
Systems Division. He served as General Manager andCorporate Officer, and subsequently moved to the U.S. in 2007
as president of HORIBA International Corporation (present
HORIBA Instruments Incorporated) where we tackled against
the difficulties of the Global Financial Crisis in the U.S. After hereturned to Japan in 2011, he was appointed to General
Manager of R&D Division, which steers the R&D department of
all segments. He was appointed to the member of the board in
2014, and after serving as President of HORIBA Jobin Yvon
SAS (present HORIBA FRANCE SAS) and Senior Managing
Director of HORIBA, Ltd., he was appointed to President &CEO in 2018.
As Vice President of the Japan Analytic Instruments
Manufacturers’ Association, Chairman of the Japan
Environmental Technology Association, and Fellow of theSociety of Automotive Engineers International, he has
contributed to the advancement of science and technology
related to analysis and measurement, and to the promotion ofscience and technology as well as industrial and economic
development.

Masao Okawa joined HORIBA, Ltd. in 2017. He has designed global
financial strategies as well as has enhanced compliance and corporate
governance, leveraging his global experience and expertise of financeand governance.
Previously, he served for almost 30 years at the Bank of Japan,
including the General Manager of Kyoto Branch, the Head of Legal
Division, and the Chief Representative of Frankfurt Office.
He also serves as a director of the Kyoto Association of Corporate
Executives and as a director of the Tokyo Scientific Instruments
Association, actively contributing to the industrial and regional societies.

Takashi Nagano
Director

Takashi Nagano joined HORIBA, Ltd. in 1985. He engaged insoftware development for the Engine Measurement Systems
Division. After serving as Manager and General Manager of theEngine Measurement Planning & Development Department, hemoved to Germany in 2003 as President of HORIBA Europe GmbH.
He was appointed to Corporate Officer in 2005, Senior Corporate
Officer in 2006. After returning to Japan in 2011, he was appointed
to General Manager of the Sales Division, which oversees the sales
departments of all segments. He was appointed to as a Director in2016 after serving as CEO of HORIBA Europe GmbH and Presidentof HORIBA KOREA Ltd. Since 2018, he has been a member of the
GLOBAL AUTOMOTIVE BOARD, which oversees the automotive
business. In this way, he has contributed to the international
automotive industry for many years.
HORIBA Repor t 2020-2021

52

List of management members

Board of Directors (Non-executive)

Audit & Supervisory Board Members
Atsushi Nakamine joined HORIBA, Ltd. in 1978. He was engaged in accounting, corporate

After completing her doctoral studies at the University of Paris, Sawako Takeuchi served for six
years as Deputy Director of the Master of International Business Graduate Program at Ecole
Nationale des Ponts et Chaussées, one of the oldest and most prestigious Grandes Ecoles inFrance. After returning to Japan, she worked as Chief Economist at the Long-Term Credit Bankof Japan, Research Institute. In 1998, she moved to the School of Engineering at the Universityof Tokyo as an Associate Professor, where she earned two doctorates in engineering and ineconomics, and made research achievements in the fields of industrial engineering and urban
development. Later, she was appointed as Invited Professor at Kyoto University. In 2011, she
was requested by the Ministry of Foreign Affairs of Japan to become the President of the Japan
Cultural Institute in Paris, where she played a role in cultural diplomacy.

Sawako Takeuchi(Doctor of Engineering,
Doctor of Economics)

Director (Non-executive), Independent Director

Haruyuki Toyama

Director (Non-executive), Independent Director

Fumihiko Matsuda(Doctor of Medicine)

Director (Non-executive), Independent Director

Since 2016, she has been an Non-executive Director of HORIBA, Ltd. She was also appointed
as an Outside Director of SAXA Holdings, Inc in 2019. By utilizing her deep knowledge of music
and western civilization, she teaches liberal arts as an Invited Professor at Tokyo College ofMusic. She was awarded the Ordre National du Mérite (Chevalier) and Ordre des Arts et desLettres (Chevalier). Besides, she was acknowledged the professional license of Urasenke Sado
(Japanese way of tea).
Haruyuki Toyama joined the Bank of Japan in April 1982. He graduated from the University ofCalifornia School of Law (LL.M.) in 1988 and became a Visiting Scholar at Harvard Law School
in 1989. He served as the Alternate Executive Director for Japan of the International Monetary
Fund (IMF) from 2000, and subsequently held a number of other positions at the Bank of Japan,
including General Manager of the Okayama Branch, Associate Director-General of the Payment
and Settlement Systems Department, Director-General of the Financial Markets Department,
General Manager for the Americas, and Director-General of the International Department. During
his tenure at the Bank, he was involved in a number of international activities, including
secondments to the U.S. Federal Reserve Board (FRB) and the European Commission (EC), andserving as a member of the Bank for International Settlements (BIS) Committee on Payments
and Market Infrastructure and Markets Committee. He also served as a lecturer on Financial
Laws at the Graduate School of Hokkaido University. After leaving the Bank in 2014, heregistered as a lawyer in 2015. In the same year, he became an Outside Director of Hitachi
Construction Machinery Co. Ltd. He joined Iwata Godo law office in 2009 and brings a wealth ofknowledge and experience in the field of international finance. In 2021, he was appointed as
Non-executive Director of HORIBA, Ltd.
Professor Fumihiko Matsuda obtained his Ph.D. in medicine from Kyoto University Graduate
School of Medicine in 1990. After working as an assistant professor at Center for Molecular
Biology and Genetics and Faculty of Medicine, Kyoto University, he joined Centre National deGénotypage (CNG) in Evry, France, as the head of gene identification. Since holding a joint
appointment as a professor of Kyoto University Graduate School of Medicine in 2003, he divided
his activities between Kyoto and Paris for his research in genomic medicine to the end of 2007.
In 2008, he became the director of Center for Genomic Medicine at Kyoto University Graduate
School of Medicine. Professor Matsuda created two spin-off bio-venture companies,
GenoConcierge Kyoto, Inc. in 2018 and RADDAR-J for Society Inc. in 2020, and serves as a
Director (Chief Advisor) of these two companies, contributing to active collaborations between
academia and industry. He was appointed as Non-executive Director of HORIBA, Ltd. in 2021.
He also devotes himself to cultural exchange between Japan and France through involvement incultural and art activities. In recognition of his achievements, contributions, and efforts to date,he was nominated the Chevalier de l’Ordre National du Mérite of the French Republic in 2021.

finance department worked in HORIBA Europe GmbH in Germany. In 2001, he became
Executive Vice President & COO of ABX S.A. (present HORIBA ABX SAS (France)). He wasappointed as Corporate Officer of HORIBA, Ltd. in 2002, In 2005, he became President &CEO of ABX S.A. and President of the newly established HORIBA Europe Holding SASU in
2008. After returning to Japan, he served as General Manager of Group Production
Management and Division Manager of the IT & BPR Center of HORIBA, Ltd., and has been a
Substitute Audit & Supervisory Board Member since 2018. He was appointed to an Audit &Atsushi Nakamine

Supervisory Board Member in 2020.

Audit & Supervisory Board Member(Standing Auditor)

Keiji Yamada
Audit & Supervisory Board Member(Outside & Independent Auditor)

Tomoko Tanabe
Audit & Supervisory Board Member(Outside & Independent Auditor

Keiji Yamada joined the Ministry of Home Affairs (present the Ministry of Internal Affairs andCommunications) in 1977. He retired after serving as Director of the Cabinet Legislation
Bureau, Director of the Kyoto Prefecture General Affairs Department, and Vice Governor of
Kyoto Prefecture. He served four terms as Governor of Kyoto Prefecture from 2002 and fourterms as President of the National Governors’ Association from 2011. He has been a
Professor at the Department of Interdisciplinary Studies in Law and Policy, Faculty of Law andAdvisor to the President (present Special Advisor to the President) at Kyoto Sangyo University
since 2018, and a member of the Board of Directors since 2021.
He was appointed as an Outside Director of Kawasaki Kisen Kaisha, Ltd. in 2019 and was
appointed as an Audit & Supervisory Board Member of HORIBA, Ltd. in 2020.
He is the President of the Kyoto Culture Foundation and is engaged in financing andenlightenment activities related to the protection of cultural properties with the aim ofcontributing to the creation and development of affluent Kyoto culture, which is positioned in
the center of Japanese culture.

Dr. Tanabe graduated from the Kyoto Prefectural University of Medicine (KPUM) in 1996. Aftercompleting an one-year internal medicine internship at the University Hospital at KPUM, shebecame licensed to practice medicine in the U.S. where she moved to in 1997. In New Yorkshe completed her medical residency in addition to serving as chief resident at the Beth Israel
Medical Center. She then pursued a fellowship in medical education at the Perelman School of
Medicine of the University of Pennsylvania. In 2004 she held the dual position of assistantprofessor in general internal medicine, and associate clerkship director at the University ofCalifornia San Diego School of Medicine. Upon her return to Japan in 2008, she joined the
Shinyukai Medical Group where she was first put in charge of women’s health at Oike Clinicand became a member of the board of the Shinyukai Holdings in 2010. In 2018, she became
the president at Kyoto Medical Club. In 2021, she was awarded the title of visiting professor by
the Kyoto Prefectural University of Medicine. Dr. Tanabe was appointed as Audit andSupervisory board member of HORIBA, Ltd. in 2020.
Dr. Tanabe believes strongly in holistic approach to clinical medicine, primarily focusing on
preventive medicine and continuity of care. She also has a keen interest in promoting the
careers of female physicians and researchers. In 2010, she was one of the five founding
members of the Center for the Promotion of Gender Equality at the Kyoto Prefectural Schoolof Medicine.

Corporate Officers
Executive Corporate Officer

Corporate Officers

Jai Hakhu

Tadao Nakamura

Chairman of HORIBA Instruments Incorporated (U.S.)(Doctor of Engineering) President of HORIBA ABX SAS (France)
Chairman of HORIBA India Private Limited (India)

Senior Corporate Officers
Hideyuki Koishi

President of HORIBA STEC Co., Ltd. (Japan)

George Gillespie

Executive Chairman of HORIBA MIRA Limited. (U.K.)(Doctor of Engineering) Automotive Board Leader

53

Hiroo Chihara

President of HORIBA Techno Service Co., Ltd. (Japan)

Dan Horiba

President of HORIBA Advanced Techno Co., Ltd.
(Japan)Arnaud Pradel

Chief Director & President of HORIBA INSTRUMENTS(SHANGHAI) CO., LTD.
Chief Director & President of HORIBA (China) Trading Co., Ltd.
Chief Director & President of HORIBA Technology(Suzhou) Co., LTD.
General Manager of HORIBA ABX SAS (France)

Toshiya Higashino President & COO of HORIBA Instruments Incorporated (U.S.)
Yasuo Yamashita

Deputy General Manager of General Administration Division

Dale Poole

Executive Vice President of HORIBA Instruments
Incorporated (U.S.)

Hiroshi Nakamura President of HORIBA Europe GmbH (Germany)(Doctor of Engineering)

Junior Corporate Officers
Akio Kinoshita

Responsible for Technology of Automotive Board

Ken Mitera

Executive Vice President of HORIBA Instruments
Incorporated (U.S.)

Rajeev Gautam

President of HORIBA India Private Limited (India)

Hiroyuki Urabe

President of HORIBA KOREA Ltd. (South Korea)(Doctor of Engineering) Deputy General Manager of Automotive New
Business Development, Sales Division(Doctor of
Bio-Technology)

Narihiro Oku

Responsible for Next IVD Technology Project, Medical
Business Division

Hitoshi Motokawa

General Manager, General Administration Division
Responsible for Financial Control

Hideyuki Nishibun

General Manager of Global Business Strategy Divisionof HORIBA Techno Service Co., Ltd. (Japan)

Masashi Nishimura

General Manager, Production Division, HORIBA
Advanced Techno Co., Ltd. (Japan)

Haruko Nozaki

Principal of HORIBA COLLEGE, CSR

Tsukasa Satake

Research & Development Division, Tokyo based

Yuko Kimura

Administration Division, Responsible for China business

HORIBA Repor t 2020-2021

54

Financial data
Eleven-year summary

HORIBA, Ltd. and consolidated subsidiaries

2010.122011.122012.122013.122014.122015.122016.122017.122018.122019.122020.12

Profit and Loss
Net sales(Millions of yen)

Operating costs and expenses(Millions of yen)

Operating income(Millions of yen)

Ratio of operating income to net sales
Net income attributable to owners of parent(%)(Millions of yen)

Ratio of net income attributable to owners of the parent(%)

118,556
106,256
12,299
10.4
7,927
6.7

123,456
108,549
14,906
12.1
8,664
7.0

117,609
105,857
11,751
10.0
7,396
6.3

138,136
124,402
13,733
9.9
8,999
6.5

153,065
135,851
17,214
11.2
10,5896.9

170,898
151,526
19,372
11.3
12,8827.5

170,093
151,593
18,49910.9
12,962
7.6

195,399
168,565
26,834
13.7
16,281
8.3

210,570
181,731
28,83813.7
22,31310.6

200,241
179,325
20,916
10.4
15,481
7.7

187,080
167,385
19,694
10.5
13,1887.0

137,290
17,12884,01961.2

144,649
18,35890,232
62.4

153,836
18,08399,24864.5

189,269
24,577
114,20960.3

207,335
28,412
123,92459.8

231,032
45,227
129,58156.1

239,657
47,153
132,65455.4

265,920
42,496150,282
56.5

277,368
44,516
161,36258.2

315,133
73,889170,95354.3

328,068
80,376
177,96454.3

11,964-2,8219,143-1,028

6,954-6,145809
855

13,395-7,891
5,504-3,304

15,076-8,111
6,965
2,324

11,455-9,875
1,580-273

14,770-30,642-15,872
12,843

15,871-10,427
5,444-451

28,287-13,167
15,120-9,044

19,536-11,029
8,506-3,24026,638-12,367
14,271
19,21532,253-14,016
18,236
843

4,033
4,523
9,480
8.0

4,670
4,146
10,060
8.1

7,882
3,743
10,092
8.6

7,680
4,279
10,7747.8

11,001
4,905
11,986
7.8

16,3096,110
12,341
7.2

13,796
6,816
12,933
7.6

11,6397,534
13,911
7.1

10,2397,240
15,183
7.2

12,834
8,794
16,254
8.1

15,1659,619
15,594
8.3

187.46
1,986.77
17.00

204.882,133.44
40.00

174.872,346.45
50.00

212.76
2,699.88
60.00

250.282,928.82
67.00

305.73
3,078.40
70.00

307.74
3,148.70
85.00

386.303,565.00
116.00529.24
3,826.44
145.00367.094,053.30
130.00312.584,217.45
90.00

9.7
5.9
9.1
30.3
63.8

9.9
6.1
19.5
30.5
60.3

7.8
5.0
28.6
37.5
61.1

8.4
5.2
28.2
48.9
64.9

8.9
5.3
26.8
38.5
69.0

10.2
5.9
22.9
35.1
69.3

10.0
5.5
27.6
46.7
66.8

11.5
6.4
30.0
53.8
66.7

14.3
8.2
27.4
50.7
68.7

9.3
5.2
35.4
46.4
69.0

7.6
4.1
28.8
52.3
69.2

5,202
55.7

5,448
56.6

5,530
57.0

5,787
57.9

5,965
58.4

6,831
62.3

7,149
62.0

7,399
61.6

7,943
62.3

8,288
62.5

8,269
62.4

Financial Position
Total assets(Millions of yen)

Liabilities with interest(Millions of yen)

Shareholders’ equity(Millions of yen)

Shareholders’ equity ratio(%)

Cash Flows
Cash flows from operating activities(Millions of yen)

Cash flows from investing activities(Millions of yen)Free cash flow

(Millions of yen)

Cash flows from financing activities(Millions of yen)

Investments, etc.
Capital expenditures(Millions of yen)

Depreciation and amortization(Millions of yen)

R&D expenses(Millions of yen)

R&D expenses to net sales(%)

Per Share Information
Net income(Yen)

Net assets(Yen)

Cash dividends(Yen)

Other Indicators
Return on equity(%)

Return on assets(%)

Consolidated dividend payout ratio(%)

Nonconsolidated dividend payout ratio(%)

Overseas sales ratio(%)

Human Resources
Number of employees(People)Ratio of overseas employees(%)

Notes: The Japanese Yen amounts are rounded down to the nearest million.
1. HORIBA, Ltd. and its domestic consolidated subsidiaries had formerly recognized revenue mainly on a shipping basis. However, starting from fiscal 2016, HORIBA, Ltd.
and its domestic consolidated subsidiaries changed its revenue recognition method to recognize revenue on a completion date of installation basis or a delivery datebasis under the terms and conditions of the relevant contracts. The amounts in or before the fiscal 2015 are not retrospectively revised.
2. As of beginning of the fiscal year 2019, HORIBA, Ltd. and its consolidated subsidiaries apply the Partial Amendments to Accounting Standards for Tax Effect Accounting(ASBJ Statement No. 28, February 16, 2018). These accounting standards applied retroactively for figures prior to the fiscal year 2018.The amounts in or before thefiscal year 2017 are not retrospectively revised.

55

HORIBA Repor t 2020-2021

56

Financial data
Eleven-year summary

Net sales by segment
We saw sales decline for thesecond consecutive year in the

Accounts receivable (AR) andAR turnover (days)

Millions of yen

240,000

210,570

200,000

195,399

year ended December 31, 2020.
This was due to a decrease in

170,898 170,093
160,000

153,065

sales in businesses other thanthe Semiconductor segment,

138,136
120,000

whose sales increased in
response to expansion ofsemiconductor manufacturers’
capital expenditures.

118,556 123,456 117,609
20,82580,00020,40623,48522,40014,55813,70935,751

38,67843,23049,52455,001

2010

2011

2012

2013

2014

11,78727,037

26,832

25,18727,447

26,564

16,754

16,75364,251

62,20773,360

2015

2016

2017

17,433

16,465

14,711

187,080

26,012
19,361

79,656

Scientific

Semiconductor

25,335
19,50020182019

37,52040

63,913

Automotive

10,000

20

15.0

11.5
9.7

10.2

9.9

15,0007.8

10.0

16,281

8.4

12,88212.0

12,962

15,481

10,5898,664

9.0

13,188
7.6

0

2013

Millions of yen

2014

2015

2016

Operating cash flow

40,0002017

0-10,000

2019

Free cash flow

6,954

-2,821

5,504

15,076
11,455

14,770

6,965

7.2

7.6

8.1

%

Millions of yen

12.0

18,00010.0

15,000-8,111

15,871

6.0

2.0

0

6,000

315,133

8,506

265,920

250,000

231,032-10,427-11,029 -12,367-13,167-14,016

5.9

Yen

600

5.9

5.5

529 4,053
480

8.0

3,078

2,133
240

4.1 4.0-30,642
2013

2014

2015

2016

2017

2018

2019

2020

1,987
187

2,346

205

386

2,700

367
306

213

3,149

2,929

3,600

308

312
1,800

250

175

900

2.0

50,000-40,000

2,700

360

Yen

4,500

4,217

3,826

3,565

10.0

5.2

Net income per share (left)
Net assets per share (right)

12.0

277,368

6.0

5.3

4,905

0

6.4

5.2

6,816

8,794
7,240

328,068

8.2

6.1 153,836

144,649
5.0
100,000 137,290%
14.0

239,657

207,335
189,2694,670

3,000 4,033 4,146
4,279
3,743

120

2012

7,534
6,110

7,680

Net income per share andnet assets per share

Total assets (left)
Return on assets (right)

350,000

9,619

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total assets and return on assets
Millions of yen

12,834

10,2399,000

018,236-30,000

2011

11,63912,0002010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

150,000-9,875-15,8722010

15,165

11,0017.1

300,000

14,271

15,1205,444-20,000

Capital expenditures
Depreciation and amortization

16,3098.3 8.0

3,000

200,000-7,891002010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

4.0

1,580

809

-6,14520

13,796
7.2

26,63819,536

9,143

10,774 7.8
10,06010,0929,000 9,480

2020

32,25328,28720,00010,0002018

Investing cash flow

30,00013,395

10,0004,523

011,964

15,594

6,000

7,396

2012

12,933
7.8 11,986 12,341

8.0

60

40

13,9118.6

80

35,717

7,882

3.0

2011

28,101

49,251 100
98

40,28934,838

6.0

8,999

5,000

2010

8.1

12,0009.3

8.9

15,18315,00022,313

75

97

120

Capital expenditures anddepreciation and amortization

R&D expenses (left)
Ratio of R&D expenses to net sales (right)

18,00026,28881

45,573 87
86
80

Days

20,0000Millions of yen

81
33,08574
24,8432010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

%

85
76

30,000

16,25420,00050,00080

20,0002020

55,13951,61340,00050,873

Process &Environmental

81,04260,000100

10818,337

14.3

7,927

57

102

60

Return on equity (ROE) (right)

25,00010,000In the fiscal year ended December
31, 2020, we pushed ahead withinvestments in areas that we
position as drivers of medium- tolong-term growth, including theconstruction of a new building at acore base of our service business,the construction of a new facility in
China, and the expansion of ourplant for electric vehicle
measurement-related equipment.
During this period, there was a
year-on-year increase in operating
cash flow, mainly due to thecollection of trade receivables,and free cash flow amounted to a
positive 18.2 billion yen.

53,724 112

R&D expenses andR&D expenses to net sales

Net income attributable to owners of the parent (left)

ROE finished at 7.6%.

Cash flows

120

Inventories (left)
Inventory turnover (right)

Millions of yen

107

0Millions of yen

mainly owing to a decline insales and operating income.

116

60,152 59,111 59,121

115

30,000second consecutive year for theyear ended December 31, 2020,

117

52,246 54,771
47,41139,37540,000125

MedicalDiagnostics

21,035

Net income attributable to owners of the parent and ROE
to the parent decrease for the

112

116

36,4260

We saw net income attributable

125

60,00050,00047,191
56,96728,93424,15357,785140

70,00026,82538,82835,386

17,861

27,67653,30022,913

27,17026,11725,73825,627

24,69422,51440,00022,04027,05927,754

Trade notes and accounts receivable (left) Days
AR turnover (right)

Millions of yen

200,241

Inventories and inventory turnover (days)002010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020002010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

HORIBA Repor t 2020-2021

58  

Automotive
segment

Emission measurement systems

Major products andmarket shares
Note: Market shares quoted
are HORIBA’s estimates.

Global market
share

Share ofsegment sales

80%

44%

Driveline test systems
Global market
share

15%

Share ofsegment sales

4%• Automotive emission
analyzers• Onboard emission
measurement systems• Engine test systems• Brake test systems• Fuel cell test systems• Battery test systems• Vehicle development
engineering• Testing engineering• Lease andmanagement of R&D
facilities

segment

Stack gas analyzers
Market sharein Japan

Share ofsegment sales

50%

31%

Medical-Diagnostic
segment

Hematology analyzers
Global market
share

Share ofsegment sales

7%

72%

H-1 series of industrial water
quality analyzers
Market sharein Japan(Total of water quality
analyzers)

20%

Semiconductor
Mass flow controllers
Global market
share

Share ofsegment sales

60%

89%

Chemical concentration monitors

Share of segment
sales

Global market
share

Share ofsegment sales

80%

9%

(Total of water quality
analyzers)

37%• Water quality analysis and examination systems• Air pollution analyzers• Environmental radiation meters• Process measurement equipment

Scientificsegment

segment

Raman spectrometers
Global market
share

Share ofsegment sales

30%

21%

pH meters
Market sharein Japan

Share ofsegment sales

50%

8%

• pH meters• Hematology and CRP analyzers• Hematology analyzers• Immunology analyzers• Clinical chemistry analyzers• Blood glucose analyzers• Reticle/mask particle detection systems• Residual gas analyzers• Vaporizers• Particle-size
distribution analyzers• X-ray fluorescenceanalyzers• Elemental analyzers• Fluorescence
spectroscopy/fluorescence lifetime
spectroscopy• Optical components;
spectrometers anddetectors• Gratings

Major
customers• Automotive manufacturers• Automotive component manufacturers• Government agencies• Electric power companies• Government agencies• Manufacturers• Medical testing centers• Small-to medium-sized hospitals• Physicians in private practice• Semiconductor production equipment
manufacturers• Semiconductor device makers• Manufacturers/Research institutions• Universities/Government agencies• Electric power companies

Product
applications• Development of new gasoline, diesel, and hybrid
powertrains• Certification and quality control of completed vehicles• Inspection of in-use vehicles• Measurement of wastewater and gaseousemissions• Monitoring of environmental pollution• Diagnostic testing• Medical checkup• Controlling flow of gases and liquids,
monitoring of cleaning fluid concentrations insemiconductor manufacturing processes• Quality control inspections of semiconductors
and LCDs• R&D• Product quality testing• Criminal forensics

Major risks andopportunities• Changes in emission gas regulations• The automotive industry’s capital spending and
R&D investments• Changes in environmental regulations bygovernment agencies• Developments in energy efficiency
improvement at factories and power
generation plants• Changes in total healthcare expenditurescaused by changes in populations andother factors• Changes in medical insurance systems in
different countries• Capital spending of semiconductor
manufacturers and others in association withfluctuating demand for semiconductors• Production trends of manufacturers ofsemiconductor production equipment• Changes in R&D budgets at government
agencies, universities, and research
institutions• Changes in the private sector’s R&D spending
and capital spending for production

P.27

P.19

P.15

P.17

P.25
59

Process & Environmental

HORIBA Repor t 2020-2021

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Corporate information

As the World War II came to a close in 1945, ourfounder, Masao Horiba, established HORIBARadio Laboratory with the aim of continuing the

research he had done at university. Later, in 1953,

he established HORIBA, Ltd. on the strength of thesuccess of manufacturing Japan’s first glass

Head office

2 Miyanohigashi, Kisshoin, Minami-ku Kyoto 601-8510 JapanFounded

October 17, 1945

Incorporated

January 26, 1953

Net sales

187,080 million yen (Consolidated)

Fiscal 2020

Paid-in capital

12,011 million yen (Consolidated)

As of December 31, 2020

startup, HORIBA began as an R&D-oriented

Number of employees

8,269 (Consolidated)

As of December 31, 2020

Fiscal closing date

December 31, annuallyemphasized expertise, and has since rolled out a

Annual Meeting of Shareholders

Held in March

Transfer agent

Sumitomo Mitsui Trust Bank, Limited

electrode pH meter. Started in Kyoto as a student
company that pursued unique technology andwide variety of products in the market.

1945

1950

HORIBA RADIOLABORATORY wasestablished.

HORIBA pioneers the first glass
electrode pH meter
manufactured in Japan.

Globalization has progressed greatly since Atsushi

KPMG AZSA LLC

Securities Code: 6856

Major shareholders

As of December 31, 2020

Name of shareholders

Shares (Thousands)

Percentage* (%)

The Master Trust Bank of Japan, Ltd.

3,463

8.21

60% of whom are non-Japanese, under the

Custody Bank of Japan, Ltd.

3,048

7.22

National Mutual Insurance Federation of Agricultural Cooperatives

1,682

3.99

Atsushi Horiba

1,041

2.47

THE KYOTO CHUO SHINKIN BANK

830

1.97

The Bank of Kyoto, Ltd.

828

1.96

HORIBA Raku-Raku Kai

827

1.96

HORIBA Employee Shareholding Association

743

1.76

SSBTC CLIENT OMNIBUS ACCOUNT

687

1.63

Dan Horiba

641

1.52

corporate culture represented by the corporatemotto “Joy and Fun.” The entrepreneurship, whichhas prevailed since HORIBA’s founding, has been

passed down globally, and the company has built
relationships of mutual support and trust even

Acquired MIRA, Ltd. (now HORIBA MIRA Limited.)in the U.K.

Tokyo Stock Exchange, First Section

Independent auditor

Horiba became president in 1992, and today, morethan 8,000 people have gathered at HORIBA, over2015

Stock listings

overseas, where the backgrounds and cultures arecompletely different from those of Japan.

     * Percentages of shares are calculated by deducting own shares (335,478 shares).

Stock Price Trend

HORIBA operates its business in five segments: Automotive, Process & Environmental, Medical-Diagnostics,
Semiconductor, and Scientific, and has over 1,000 products in various markets. HORIBA’s business ischaracterized by a variety of products in small quantities and global expansion. We have a top-level global market
share for emission measurement systems, which are indispensable for automobile development; mass flow

Foreign investors

Yen
30,000Yen
12,00025,00010,000

Nikkei Stock Average (Nikkei 225) (left)
20,0008,000

15,0006,000

controllers, which are necessary for semiconductor manufacturing; and Raman spectroscopic analyzers, which areused in many academic institutions and laboratories. We grow our business by providing customized analyticaland measurement instruments and services to our customers based on a wide range of core technologies.

10,000

4.5%

Financial
institutions,
Securities
companies

1.3%

Japanese companies

2.3%

Breakdown ofTypes of
Shareholders(7,532 in total)

4,000

Individual investors

HORIBA (right)

Number ofGroup companies(As of December 31, 2020)

Percentage ofoverseas sales(Year ended December 2020)

Percentage of
non-Japanese employees(As of December 31, 2020)

5,000

2,000

0

0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

TSR*
1 year

49

69

%

62

Investment period%

3 years

5 years

Cumulative /Annual Rate

Cumulative

Annual Rate

Cumulative

Annual Rate

HORIBA

117.0%

148.9%

103.0%

166.3%

140.9%TOPIX (including dividends)

98.1%

117.5%

96.6%

111.2%

116.6%* Total Shareholders’ Return: Total return on investment that combines capital gains and dividends

61

91.9%
Japanesecompanies

Individual investors

6.2%

Foreigninvestors

32.0%

18.9%
Breakdown ofOwnership
among
Shareholders(42,532,752
shares in total)

Financial institutions,
Securities companies

42.9%

HORIBA Repor t 2020-2021

62

HORIBA, Ltd.

2 Miyanohigashi, Kisshoin, Minami-ku
Kyoto 601-8510 Japan
Phone: +81-75-313-8121

E-mail: ir-info@horiba.com
https://www.horiba.com/en_en/