Chapter 02

Value Creation

The AP business began in 1959, leveraging our knowledge of aluminum materials acquired through2005-20102011-2022

From sash manufacturer towindow manufacturer

A company committed to
products and manufacturing

Improving Japan’s windows

fastener manufacturing. Since then, we have continued to develop and supply products that meet customer
needs in every era and also provide new value.

An ongoing commitment tomonozukuri

The APW 330, launched in 2009

In 2011, YKK AP’s second president, Hidemitsu Hori, demonstrated our adherence

and began to provide finished window products. The window business brand APW

manufacturing.” We further promoted the window business through our dedicatedArchitectural products businessbegins

The founding of YKK AP

Widespread adoption of aluminumsashes through mass production

Aluminum extruder installed in 1959

Yoshida Shoji Co., Ltd., the company that would eventually become YKK AP,
established in 1957 to undertake the sales and exports of fasteners manufactured
by Yoshida Kogyo K.K. (now YKK). In 1959, the company began aluminum castingand extrusion operations, marking the beginning of YKK Group’s involvement withproducts throughout Japan. In 2008, YKK AP Facade Pte. Ltd. was established in

In 1990, YKK Architectural Products (abbreviated to YKK AP) was founded out
of its parent company, Yoshida Shoji Co., Ltd., as the core company of the YKKGroup’s architectural products business. The first president, Tadahiro Yoshida(currently a corporate advisor), shifted the company from a mass-production/ massmarket product-out approach to a market-in system, which sought to respond todiversifying customer needs. In 2003, all architectural products businesses in
the YKK Group were fully consolidated into one. Business expansion continued
overseas and the structure of the company called YKK AP was built.

society, including the reorganization of our overseas affiliates in FY2020.

1990

EXIMA system sashes for commercial
buildings begin

and sales of aluminum window
1962 Manufacture
sashes begin

2002

The company is renamed YKK AP Inc.

2003

YKK’s Architectural Products Manufacturing Group is integrated into YKK AP Inc. andthe architectural products business of the YKKGroup becomes a fully integrated organization

2003

Sales of SYSTEMA series of system sashes
for non-residential buildings begin

2011 Operations begin at the Saitama MADO (window) Plant

2006 The window business brand APW series is launched2012 Sales of the Venato electronic smart door begin

2007 Value Verification Center established2014 products begin

2008 YKK AP Facade PTE. LTD. established2016 YKK AP R&D Center is opened

2009 Sales of APW 330 vinyl windows begin

2020 business operations of overseas affiliated companies into YKK AP

Sales of the LUCIAS series of exterior

Reorganized overseas AP business and integrated capital relations andof the YKK Machinery & Engineering Group is transferred and the2021 Part“Machinery & Engineering Department” established2023-

Become a Global Leading Company
Through the Evolution of Architectural ProductsFirst overseas plant with an integrated

Corporate Dataand sales of interior aluminum
1961 Manufacturearchitectural products begin

2005 Proclamation to promote insulating glass for residential windows

Initiatives in the Value Chain

The company is renamed YKK Architectural Products Inc. (YKK AP)

and sales of vinyl sashes
1983 Manufacture
beginmarket share. We also established a structure to adapt to a drastically changing

President’s inaugural press conference in May 1990

1990

1976

engineering capabilities of the commercial products business to expand ourSingapore, marking the group’s definitive move into the facade business.

1959 Aluminum casting and extrusion work begin

Our first overseas affiliate,
YKK Industries (Singapore) Pte. Ltd.
(now YKK AP Singapore Pte Ltd), established“MADO (window) Plant” and awareness-raising activities about vinyl windows,
expanded our exterior and remodeling product lineup, and strengthened theBusiness Strategies for Growtharchitectural products. In 1966, the company launched sales of the residential
aluminum product “High Sash.” This helped to popularize aluminum sashes,
which, thanks to the ease of processing and mass production, could meet thelarge-volume residential demand of the high economic growth period. Productdevelopment was also greatly expanded.

Toward a system that responds toneeds

series was launched, driven by a desire to improve windows in Japan. 2009 saw
the launch of the APW 330 vinyl window, which helped spread awareness of theseFoundations Supporting our Business1990-2004

to monozukuri under the policy of “a company committed to products andValue Creation

1957-1989

The Saitama MADO (window) Plant, which began
operations in 2011

The company set out to transform itself from a sash manufacturer to a window

manufacturer. It turned away from its business supplying knockdown style sashes

Messages from Management

Our History of Value Creation

When Akira Uozu assumed the office of president in 2023, a review was conductedof “how we seek to be in 2030 and how we ought to be,” and the vision "Evolution
2030" put forth the goal of “Become a Global Leading Company Through thesystem, YKK Almico Indonesia
1986 production(now PT YKK AP INDONESIA), established

Evolution of Architectural Products.”(100 million yen)

(10,000 units)

6,000

Collapse of the
bubble economy

5,000

200

Domestic new housing starts

Financial Crisis Great East Japan
Earthquake
▼
▼

4,000
3,000

Net sales

High economic growth period

150

100

2,000
50
1,000
0

12

1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

01994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (Fiscal year)

YKK AP Integrated Report 2023

13

Chapter 02

VisionValue Creation

PurposeThe Value Creation Process

Evolution 2030

P5

Become a Global Leading Company
Through the Evolution of Architectural Products

We Build a Better Society ThroughArchitectural Products

Opportunities and Risks

Outcomes

The 6th Mid-term Business Policy

Providing Social Value through Products and Realizing Manufacturing Reform

Health and Comfort/Safety and Security

P21-23■

Climate Change and Disaster
Countermeasures■YKK APʼs
Value Chain

Demographics■

Ecosystem Conservation and Resource
Recycling■

P50-55

Manufacturing and
Logistics

Management
capital

In pursuit of manufacturing anddelivery quality

P16-17

Materiality

Material
Procurement

Financial capital
P20

Human resources to support sustainable growth■Diversity & inclusion■

Fullﬁlling workplace environment

Development and training of human resources tocreate new value

Responsible material
procurement■

Respect for human rights

issues through products and competitiveness■Co-creation with stakeholders■

Generating innovation■

Products/services which continue to solve social issues“Trust/Reliance” to fulﬁll social responsibility■

Fair business practices■

Resilient business foundation■

Co-existence with the environment

services provided by an

In pursuit of greater
installation qualitythat unites manufacturing,

OutputProduct Use

User-friendly andsocial friendly productsIntellectual capitalYKK APʼs Business Segments
Residential Business
Overseas AP Business

Commercial Business

Exterior Business

Foundations Supporting our BusinessCorporate Governance Human Rights and Human Resources
Environmental Management
DX Promotion

ComplianceNet sales

508.6 billion yen

Operating income

17.8 billion yen
37.8%

Rate of sustainable product sales

Social/Relational capital

Natural capital[Employees]

A company that is chosen by a wide variety of individuals for its
management that creates jobs, as well as for the growth andfulﬁllment that it offers to each employee with their diverse skills
and experience through the creation of a comfortable work
environment, investment in employees, and opportunities for
growthInstallation

integrated production system

Creating technologies tosupport monozukuri“Monozukuri” to support resolution of social

Building mechanisms for generating proﬁts together with business
partners and regions, as well as solving environmental issues
throughout the value chain, such as decarbonization and realizationof a recycling-oriented society

High-quality products andResearch, Development
and Veriﬁcation

Manufacturing capital[Society]

Sales

P18

■

[Customers]

Products, solutions and services that meet the demands of society
regarding safety, security, energy conservation, health, easy
installation, disaster prevention, ventilation, and more, based on ashift to high thermal insulation performance and higher added value

Product appeal andproposal capability

sales, and technology

Human capital

P7

Industrial Products Business

P42-49Risk Management

P24-41

Sustainability-related investment (Japan)

2.9 billion yen

Greenhouse gas emissions (Scopes 1 and 2)
Greenhouse gas emissions (Scope 3)

304 kt CO2
1,737 kt CO2

Aluminum: Recycled external products (Japan) *1
Vinyl: Recycled internal products (Japan) *2

27％
28％

Employee engagement (Japan)

49%*1 Ratio of input of recycled materials from the market to the input of aluminum raw materials*2 Rate of internal reuse of internally generated vinyl scraps* Results as of March 31, 2023 or FY2022 unless otherwise noted,
scope of coverage is YKK AP Group (Japan + overseas)

Principles that Support the Value Creation Process

YKK Philosophy ̶ Cycle of Goodness®: “No one prospers without rendering
beneﬁt to others.”

P4-5Management Principle: “YKK seeks corporate value of higher signiﬁcance."
CUSTOMERSSOCIETYEMPLOYEES

14

PRODUCTSFAIRNESSTECHNOLOGYMANAGEMENTYKK AP Integrated Report 2023

15

Chapter 02

Value Creation

YKK takes as its Purpose “We Build a Better Society Through Architectural Products.”

These six types of capital are the source of this cycle of providing value to customers, society, and employees

Manufacturing sites in Japan

Overseas manufacturing sites

Hokkaido Factory

PurposeP5

Namerikawa Plant
Toyama Mizuhashi Factory Kurobe Plant
Kurobe Ekko Plant
Toyama Fuchu Factory
Kurobe Ogyu Plant
Okinawa Factorythrough corporate activities that create high quality products and services.

Hiroshima Factory

opportunities and risks.

YKK AP (SUZHOU) CO., LTD.

Tochigi Factory
Saitama Factory
Saitama MADO (Window) Plant
Kanagawa Factory

Despite the overall increase in operating income in FY2022, we will

related issues. To realize our “Evolution 2030” vision, which aims to achieve
net sales on the order of one trillion yen, we plan to allocate businessresources first to information and other management infrastructure that57.9 %Net assets: 266.0 billion yen / Total assets: 455.8 billion yen

capital efficiency.

YKK AP manufactures products using integrated production at domestic
rooted in various countries and regions under the basic principle ofSmart factory
P41

Environmental Management
P36-40systems and environments in which each and every employee can

24 Overseas: 11
Manufacturing capital investment: 13.8 billion yen
Manufacturing sites — Japan:

Natural CapitalSocial and Relational Capital

Overseas business sites:

195

11 countries/regions

Affiliated companies — Japan: 5 Overseas: 17 (as of August 1, 2023)

promotion as well as research and development into AI, robotics and otherenvironmental burden, through technical innovation. Along with theconservation and effective use of natural capital, we are working to create

environmental value and solve environmental issues at all stages of the
Human resources
strategy
P31-32Evolution 2030
P7

Energy consumption:

161,000 kl

product lifecycle, from research and development to manufacturing,(crude oil equivalent)

Water use: 8.9 million m3

a diverse range of personnel to play an active role.

Raw materials — aluminum: 125 kt, vinyl: 22 kt

Intellectual Capital

Co-creation relationships based on trust and reliance withstakeholders

logistics, installation, use, and disposal. Under the "Evolution 2030" vision,YKK AP aims to reduce its own CO2 emissions by 80% by FY2030 and by

100% by FY2040 (both relative to FY2013), and we will strengthen ourefforts to achieve these goals.

We work with all stakeholders, including employees, customers, business

Creating technology through the challenge of solvingsocial issues
Kurobe, YKK AP’s technology headquarters

trusted by the community and loved by society. We provide opportunities

Verification Center, and the Partners Support Studio, Kurobe City in Toyama

Home to three technical facilities of the YKK AP R&D Center, the Valuefor various forms of dialogue and co-creation to improve our workplaces

Research, development andverification
P50

and operations, as well as the quality of our products. In addition, we areengaged in industry-government-academia-private sector partnership todevelop recycling technologies and mechanisms for vinyl and aluminummaterials.

Recycling of vinyl andaluminum materials
P38-40Prefecture is positioned as YKK AP’s technology headquarters. R&D centers
Global R&D organization: 3 sites
Research and development expenses: 9.3 billion yen
Patents held: 1,418

Information on stakeholder communication is available on our website.
https://www.ykkap.co.jp/company/jp/sustainability/stakeholder/16

equipment for our products. We are also stepping up our efforts in DX

are taking on the challenge of creating new value and achieving zeropartners, and local communities, to continue being a company that isJapan business sites:

engineering technology used to develop and manufacture production

Aiming to leave a better society/environment for the next generation, we

being a manager, and grows strongly together as a group, like a forest thatdevelopment of a fulfilling and pleasant working environment that enable

working to enhance our technological competitiveness through machinery

Creating environmental value at all stages of the lifecycle

Organization,” a company in which every employee has a consciousness of

12,802
Employees overseas: 4,341

manufacturing close to where demand is found. In addition, we are

Corporate Datademonstrate their full potential. The goal is to create a “Forest

Employees in Japan:

YKK AP AMERICA INC.

YKK AP TAIWAN CO., LTD.

technologies for realizing smart factories.

Based on the idea of “autonomy and coexistence,” we work to create

the source of value creation, we will pursue the design of systems and the

Yangmei Factoryand overseas sites, and has established a manufacturing and supply system“Forest Organization” with a shared corporate philosophy

is made up of individual trees. To improve employee engagement, which isPT YKK AP INDONESIA

Initiatives in the Value Chain

Human Capital

growth rates of individual businesses, we will also continue to pursue

Message from the
Financial Officer
P11

Tangerang Factory

Technology capabilities to support an integrated production
system from raw material production to shipping anddelivery

Evolution 2030
P7

forms the foundation of our corporate activities, and then to facilities andhuman resources. While keeping in mind business indicators and the

Bhoruka Extrusions Private Limited

Integrated production system
P18

manufacturing cost reductions to address surging material prices andMysore Factory

Business Strategies for Growthendeavor to improve profitability through continued price revisions andDublin Factory
Macon Factory
Texas Factory
Midwest Factory

Mie Factory

Rokko MADO (window) Factory

Manufacturing Capital

Financial foundations supporting our businessYKK AP CO., LTD.

Foundations Supporting our Business

Financial Capital

Shenzhen Factory

Yamanashi Factory

Okayama Factory
Kyusyu Plant
Kumamoto Kosa Factory

ERIE ARCHITECTURAL PRODUCTS INC.

Suzhou Factory

Niigata Factory

Hyogo Factory

Shikoku Plant

Lakeshore Factory

DALIAN YKK AP CO., LTD.

Value Creation

We aim to achieve sustainable growth by strategically investing capital while assessing business

Equity ratio

Dalian Factory
Tohoku Plant
Miyagi Ohira Factory

Messages from Management

Management Capital as a Base for Value Creation

are also located in Germany and Indonesia to conduct research,development, and verification on a global basis. Furthermore, we are
putting our efforts into strategic management and application of

intellectual assets as well as training and development of employees, withthe aim of improving our competitiveness and brand value through patentapplications and ownership of patent rights.

* Results as of March 31, 2023 or FY2022 unless otherwise noted, scope of coverage is YKK AP Group (Japan + overseas)YKK AP Integrated Report 2023

17

Chapter 02

Value CreationYKK AP continues to provide value to customers, society, and its employees through high-quality products
and services based on its integrated production system, while proactively addressing social andenvironmental issues.

Rate of sustainableproduct sales
P22-23

Materials
We produce materials
in-house: for aluminum,
this involves everythingfrom melting to extrusionand surface treatment,
and for resin, from raw
material blending to
extrusion.

High-performanceglass

DX Promotion
P41

APW vinyl windows series

LD series (China)

No-weld installation

Kantan Door Remo series

GPort Pro Series

YRB-A (Taiwan)

ProTek® (U.S.A.)

A window series using vinyl with high thermal
insulation performance for the frame.

Production equipmentYKK AP produces everything in-house, fromoperating and functional components toscrews and screen netting.

YKK AP has developed its own manufacturing
equipment, production lines, and processcontrol systems, etc., and has deployed them inthe company’s plants in Japan and overseas.

We have a lineup of products that
reduce damage to buildings, indoor
environments, and surrounding
environments caused by wind, rain
(water), snow, lightning, and othernatural phenomena.

A door series that allows new products to
be installed over the existing frame without
breaking the wall.

We are committed to developing productswith higher safety performance by
employing functions and technologies
that work effectively against dislocation,
falls, pinching, collisions, abrasions,catching, locking-in, catching fire,criminal activity and more.

High water-tightness sashes developed as acore product for Taiwan, where typhoon damage
is common.

Hurricane and explosion-proof products targeted
mainly at commercial facilities in the U.S.A.

Health/Hygiene

Safety/Security

Our APW vinyl window series products are produced in our carefully controlled plants,from preparing the glass to manufacturing the components and assembling the windows,
thereby ensuring high performance.

A new flame-free sash installation method that
replaces the conventional welding method byfilling with mortar.

Disaster prevention/
mitigation

We process our own
high-performance andhigh-functioning double
and triple insulating
glass.

Components

A series of aluminum profile thermal insulation
windows with high thermal insulation performancethat can be used in a wide range of areas, fromeastern to northern and western China.

Carport series with industry-leading snow andwind resistance to prepare for increasingly
severe natural disasters.

Processing, assembling, packaging

18

The 6th Mid-term Business Policy
P21

Corporate Data

The cornerstone of YKK AP’s monozukuri: the Integrated Production System

Integrated production
systemP52

We are developing products that shorten installation time, do not involve specificskills or hazards, and are safe to install.

Initiatives in the Value Chain

In addition, an in-house division called Machinery andEngineering is responsible for the development andmanufacture of equipment for making our products. We areworking to further enhance our technical competitivenessthrough seamless and rapid collaboration between the
Machinery and Engineering Department, the Research andDevelopment Division, and the Manufacturing Division.
As part of the “Realization of Manufacturing Reform,” in the
6th Mid-term Business Policy, we will also pursue a shift tosmart factories. We are building new city-based, unattended
production lines that do not rely on human labor, making fulluse of robots as well as AI and other digital technologies.
We believe that our insistence on integrated production
enables us to develop technology quickly, control costs
throughout the supply chain, and guarantee reliable quality.

Easy installation

We are developing products that can contribute to improving the energy-saving
performance of buildings. We are developing products with thermal insulation
performance that meets the energy-saving standards set by various regions inJapan and overseas.

Business Strategies for Growth

YKK AP’s strength lies in its ”integrated production system”
business model, in which the company itself handles
everything from materials, parts, and production equipment toprocessing and assembly.
The glass used for our vinyl windows and other core products
is procured as raw sheets and processed in-house. In addition,
all manufacturing processes, from smelting the raw metal foraluminum and blending the base materials for vinyl, are carriedout in-house at our domestic and overseas manufacturing sites.
Even the development and manufacture of parts, whichconstitute the backbone of our products, is carried out in-house.
We build on our technological development capabilities,
including elemental technologies, to produce metal and plastic
functional parts such as door rollers, screws, and netting forscreens. We also have various types of test and evaluation
functions, ensuring more reliable quality of parts.

Energy conservation

Foundations Supporting our Business

Integrated Production System

indicator. The social value that YKK AP provides can be
categorized into “energy conservation,” “easy installation,”“disaster prevention/mitigation,” “safety/security,” and “health/hygiene,” and we are engaged in business activities that
contribute to a sustainable society by developing a wide rangeof sustainable products that enhance these types of value.

Value Creation

The 6th Mid-term Business Policy
P21

As YKK AP pursues sustainability management, it is identifying
issues and developing technologies while staying attuned to
the needs of its various customers in Japan and overseas. The
6th Mid-term Business Policy calls for “Providing Social Value
through Products and Realizing Manufacturing Reform,” andwe have set the “rate of sustainable product sales” as a key

Messages from Management

Products and services to address social issues

Solving Social Issues through our Strengths
in Monozukuri and our Products

We develop products that contributeto improving the quality of the indoor
environment and creating a hygienic
lifestyle.

Lucias balconies

Balconies with handrails to prevent children
from falling

Natural ventilation windows
(Balance Way)The grid itself is balanced to provide efficientventilation.

YKK AP Integrated Report 2023

19

Chapter 02

Value Creation

Materiality and the 6th Mid-term Management Plan
To drive YKK AP’s sustained growth, we have identified materiality (priority issues) based on our Purpose.

Messages from Management

The 6th Mid-term Management PlanThe YKK Group 6th Mid-term Management Vision

We will promote materiality through the implementation of the 6th Mid-term Management Plan (FY2021FY2024).

●Creativity to Realize a Sustainable Society

Materiality

Providing Social Value through Products and Realizing Manufacturing Reform

Materiality●Diversity & inclusion●Co-creation with stakeholders●Fair business practices●Fullfilling workplace environment●Generating innovation●Resilient business foundation●Talent attraction and development for value creation●Products/services which continue to solve social issues●Co-existence with the environment

Materiality

Promotion departments

Diversity & inclusion

Human Resources Department

Fullfilling workplace environment

Work Style Reform Committee

Talent attraction and development for value creation

CHRO / Human Resources Strategy Office

Respect for human rights

Compliance Committee / Human Resources
Department / Corporate Purchasing Department

Co-creation with stakeholders

Brand Management Committee

Generating innovation

Executive Vice Presidents in charge

Products/services which continue to solve social issues

Business Divisions / Units in charge

Fair business practices

Compliance Committee

Resilient business foundation

CRO / Risk-related committees (5)Co-existence with the environment

Manufacturing Division PJ

Materiality Promotion Working Group3-ministry subsidy scheme
P43,45

Saitama Factory new building
P45

ESG General Meeting

Chair: Akira Uozu (President Representative Director)

E

S

G

Environmental Policy Board Committee
Chair: Akira Uozu (President Representative Director)

New plant for manufacturingresidential vinyl windows(U.S.A.)
P49

Unit: 100 million yen

FY2021(Results)

FY2022(Results)

FY2023(Plan)FY2024(Plan)Net sales

4,463

5,086

5,479

5,440

Operating income

173

178

276

386

Operating income margin

3.9%

3.5%

5.0%

7.1%

*The FY2024 plan is the mid-term plan developed in FY2021.

In order to further grow our business both domestically andinternationally, we have drawn up a record-breaking investment
plan for the 6th Mid-term Management Plan. With respect toChair: Koichi Ebihara (Executive Vice President, Sales & Marketing)Compliance Committee

The 6th Mid-term Management Plan, which began in FY2021,
takes as its core the purpose “We Build a Better Society ThroughArchitectural Products.” The 6th Mid-term Business Policy,“Providing Social Value through Products and Realizing
Manufacturing Reform,” has been developed as a policy tofulfill this purpose.
In FY2022, we achieved net sales of 508.6 billion yen, a record
high for the second year in a row, thanks to the promotion of

The 6th Mid-term Investment Plan

Brand Management Committee<Corporate Governance System>
Oversight Bodies: Board of Directors / Audit & Supervisory
Board / Accounting Auditor

Manufacturing reform by enhancing technological capabilities (Machinery andEngineering (KOKI) integration), platforming & smart factorization / Developing
technologies for achieving carbon neutrality

Message fromthe Financial Officer
P11

Chair: Kosuke Iwabuchi (Director and Executive Vice President,
General & Administration)

Unit: 100 million yen

FY2021(Results)Japan
New plant for manufacturingresidential vinyl windows(U.S.A.)P49

FY2022(Results)

FY2023(Plan)FY2024(Plan)

300

226

201

378

Overseas

37

135

125

92

Total

264

337

503

392

*Note: Based on orders

high thermal insulation windows and strengthening of proposals
in the commercial building renovation field in Japan, as well as
significant growth both in Japan and overseas, especially inarchitectural products for commercial buildings in North America.
Operating income was affected by surging material prices andhigher SG&A expenses in Japan, but increased sales and pricerevisions overseas led to an overall increase.
In Japan in FY2023, we will enhance production equipment
for remodeling products and glass, for which demand is
expected to rise due to the three ministry-supported subsidy
scheme. In the commercial business, we will further strengthen
our competitiveness in the Tokyo metropolitan area bycommencing operations at the new Saitama Factory building.
In North America, we will strengthen our production and supply
systems by establishing supply bases for architectural products
for commercial buildings and commencing operations at a newfactory producing vinyl windows for residential use.

Corporate Data

We have established a promotion department for each materiality
and are stepping up our initiatives accordingly. Furthermore, the
ESG General Meeting, headed by the President, consists of theEnvironmental Policy Board Committee that takes the lead on
environmental topics, the Brand Management Committee that

●Realization of Manufacturing Reform

Initiatives in the Value Chain

PurposeP5

handles social topics, and the Compliance Committee, whichhandles governance. Each is chaired by the President or an Executive
Vice President. The “Materiality Promotion Working Group,” which
reports directly to the ESG General Meeting, conducts materiality
efforts and manages KPIs in cooperation with the ESG General
Meeting and the promotion department for each materiality.

Providing products that meet the demands of society, including safety, security, energy
conservation, easy installation, health, disaster prevention, ventilation, and others

The 6th Mid-term Business Plan

●Respect for human rights

Materiality promotion system●Providing Social Value through Products

Business Strategies for Growth"Trust/Reliance" to fulfill
social responsibility

Foundations Supporting our BusinessWe have established a system for promoting materiality and are further advancing specific initiatives by setting KPIs.

“Monozukuri” to support resolution of social
issues through products and competitivenessProduct appeal & proposal capability / Technology & manufacturing capability / Diverse
human assets

The 6th Mid-term Business Policy

To drive YKK AP’s sustained growth, we have identified materiality (priority issues) for FY2021 based on our Purpose.

"Human Resource" to support
sustainable growth

Value Creation

Technology Oriented Value Creation

capital investment plans, in addition to investments necessary
for business continuity, such as for replacement of aging
equipment and health and safety reasons, we plan to advanceaggressive production expansion and rationalization
investments where the expected returns ensure theinvestment’s rationality.
In FY2023, we plan to invest a record 50.3 billion yen. In
Japan, this will mainly be allocated to increased production,
new product support, and digital-related activities, andoverseas, for construction of a new plant in the U.S.A., with theaim of achieving sustainable business growth and early
generation of investment benefits.

*The FY2024 plan is the mid-term plan developed in FY2021.

The approach and process for identifying materiality is described on our website.
https://www.ykkap.co.jp/company/en/sustainability/materiality/

20

YKK AP Integrated Report 2023

21

Chapter 02

Value Creation

The 6th Mid-term Materiality Targets
Materiality

Initiatives

FY2021(Results)

Indicators

Number of women in management positions ◇1

Diversity & inclusion

Promote an inclusive corporate culture where employees with a diverse range of skills andexperiences respect one another and work together

140

2.29%

2.32%

2.35%

2.50%

68.6%
(86.4％)

69.7%(87.7％)

70.0%

71.0%

Rate of employees who take childcare leave (men) ◇1

53.2%

73.2%

Over 50%

Over 50%

Employee engagement ◇1

51%

49%

65%

70%

15,71417,08318,50020,0009 (195)29

9 (204)32

9 (213)−9 (222)
−

13

17

24

27

Rate of persons with disabilities among employees ◇1

Attract, train, and promote next-generation leaders and invest in the necessary talent forsustainable growth“Value Creation Academy,” the next-generation leader
development program ◇1● Number of participants *Figures in parentheses indicate cumulative number of participants● Number of corporate officers appointed (cumulative total)

Business Strategies for Growth

Number of employees dispatched by the company to obtain
degrees (PhD, MBA, MOT) ◇1

Foundations Supporting our Business

133

Number of employees who obtained qualifications eligible forpublic qualification incentives (cumulative total of employees) ◇1

Development and trainingof human resources to create
new value

Related SDGs

Value Creation

Human resources tosupport sustainablegrowthFY2024(Targets)122* Parentheses indicate the ratio of menʼs to womenʼs wages for senior section managers

Develop a fullfilling workplace environment in which each employee can thrive withmotivation and demonstrate his/her best performance

FY2023(Targets)

113

Ratio of menʼs to womenʼs wages (average) ◇1

Establishment of a fulfilling
working environment

FY2022(Results)

Messages from Management

Extent of Coverage◇1: YKK AP (non-consolidated)◇2：YKK AP Group (Japan)◇3：YKK AP Group (Japan and overseas)

Enforcement of the YKK AP Human Rights Policy in business activities in each country/region
Expand and enhance content of human rights and harassment training

Respect for human rights

Co-creation with stakeholders

Continue to create value through active dialogue with our key stakeholders: customers,society, and employees

Generating innovation

Promote innovation in business concepts and production/business processes from a
medium- to long-term perspective for sustainable growth

Create new value and contribute to the sustainable development of society by taking on thechallenge of solving social issues through our products and services

821

1,184

1,184

1,184

Number of important suppliers for which CSR surveys havebeen conducted (cumulative total) ◇1

48

1,184

1,184

1,184

Customers: Expansion of technical proposal and training options for domestic and overseas business partners
Society: Promote activities that link customer feedback to the development and improvement of products and services and the provision of information
Employees: Promote initiatives to gather a wide range of employee ideas and apply them to our business
Establish programs to develop and create innovative human resources● Establish AP innovation programs and systems to accelerate and promote creation of new business● Develop a foundation for fostering an innovative organizational culture and developing innovative human resources

Rate of high thermal insulation window use (For single-family houses) ◇2

70%

75%

84%

90%

Rate of vinyl window use (For single-family houses) ◇2

31%

31%

35%

40%

38.4％

37.8％

40.6％

39.1％

55
(20)

56
(27)

57
(27)

57
(28)

304 kt CO2

288 kt CO2

275 kt CO2

Rate of sustainable product sales ◇3

Fair business practices

Conduct business activities ethically and with integrity by ensuring compliance with laws,
regulations, and social norms under a global governance system

Number of sites implementing YKK Global Criteria ofCompliance (YGCC) ◇3*Number in parentheses indicates number of sites where internal audits have been conducted

Corporate Data

Products/services which
continue to solve social issues

Number of companies that we have concluded an agreement withregarding the basic transaction principles (cumulative total) ◇1

Initiatives in the Value Chain

Monozukuri to support
resolution of social issues
through products andcompetitivenessAs part of corporate social responsibility, give consideration to human rights not only in thecompany itself, but also in the supply chain and other areas associated with the company

Expand and enhance content of compliance training● Conduct compliance video training and e-learning for all employees

Trust/reliance to fulfill
responsibilities to society

Resilient business foundation

Increase resilience through risk management that enhances management transparency andhonest and fair corporate governance, in addition to responding to unforeseen events

Strengthen the CRO-led risk management system and speed up the response to emergencies
Review BCP on an all-hazards basis● Responses to infectious diseases, major natural disasters, supply chain interruptions, cyber incidents, etc.
● Recovery and operation through reliable management after the BCP is activatedYKK AP CO2 emissions ◇3

Co-existence with theenvironment

Contribute to reducing environmental impact and mitigating and adapting to climatechange by promoting a decarbonized, recycling-based society and expanding sales ofenvironmentally friendly products

Waste output (Manufacturing sites) ◇3* Figures in parentheses represent units of intensity

Water consumption (Manufacturing sites) ◇3* Figures in parentheses represent units of intensity

325 kt CO2
15.9 kt(3.57 t/100 million yen)

9.8 million m3(2,200 m3/100 million yen)

15.4 kt(3.03 t/100 million yen)

8.9 million m3(1,750 m3/100 million yen)

14.3 kt(2.61 t/100 million yen)

8.6 million m3(1,580 m3/100 million yen)

13.9 kt(2.56 t/100 million yen)

8.5 million m3(1,570 m3/100 million yen)

* Sustainable products are defined as architectural products that contribute to achieving the SDGs by solving priority social issues such as energy conservation, easy-installation, disaster prevention/mitigation, safety/security, and health/hygiene*The FY2024 targets are the mid-term targets developed in FY2021.

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YKK AP Integrated Report 2023

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