2022-2023

ReportYear ended December 31, 20220

Omoshiro-okashiku
Joy and Fun

The corporate motto of HORIBA is Joy and Fun.
We believe taking 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,will increase our satisfaction in life andallow us to enjoy our lives even more.

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

Day One, our starting line
HORIBA, which began as a small factory in Kyoto, has earnestly explored analysis and measurement technologies that
contribute to scientific development, and developed unique products and solutions.Over the past 70 years, we have gatheredcolleagues from different countries and regions as our founding spirit and corporate motto of “Joy and Fun” resonate with them.
This has made us a global company where diverse human assets can let their colors shine. Since its inception, the HONMAMON
analysis and measurement technologies we have built up through our pursuit of unrivaled excellence, have earned a high level oftrust as the HORIBA brand and supported research in cutting-edge fields around the world.

The anniversary logo is designed to evoke animage of HORIBA’s five business segments
mixed together as we push towards the nextstage. Its outline is inspired by the symbol ∞,to express our company’s infinite possibilities,
the number “70” angled upward to the right by
70 degrees represents our steady growth.





Established
HORIBA RADIOLABORATORY

01




Created corporate motto“Joy and Fun”  

 

 

02

Strive to reach the next stage
through “HONMAMON*”technologies and people inthe changing world
Atsushi Horiba
Chairman & Group CEO

A year in which HORIBA demonstrated
its strengths leading to significant results
2022 turned out to be a year of increasing
instability in international politics and social
conditions. This was triggered by Russia’s
invasion of Ukraine, accelerating global
inflation that included soaring energy
prices, and the depreciation of the yen.
HORIBA’s business was also affected by
procurement prices and delays in parts andmaterials such as electronic components.

The success of global collaboration within HORIBA in 2022 resulted toachieve significant growth. Now, HORIBA has the challenge of rapidly
progressing to the next stage in sight. We will not fail to seize this opportunity towork toward further enhancing our corporate value.

CEO MESSAGE

70°

However, even under these challenging
conditions, HORIBA posted record highs insales, operating income, ordinary income,and net income attributable to owners ofparent (net income) for the fiscal year
ended in December 2022. Thus, wesecured an operating profit margin of
17.0% (up 2.7 percentage points
year-on-year).

We saw a significant increase in
semiconductor segment sales due to abooming semiconductor market, as well as
increased revenue and profits in theProcess & Environmental and Scientificsegments. As a result, we achieved thetargets for operating income and net
income set forth in our Mid-Long Term
Management Plan, MLMAP2023 a year
ahead of schedule. We were only able toachieve this level of performance amongworldwide difficulties because our groupcompanies in Japan and overseas
collaborated globally to increase supply
capacity and accordingly to minimize theimpact on customers.
I believe this is one of our majorachievements in 2022.

“HONMAMON”
Technologies and Human assets*HONMAMON: HONMAMON is a Japanese word, used especially often in KYOTO, where HORIBA is located. The word describes authenticity and excellence.

03

04

CEO MESSAGE“HONMAMON”
HORIBA’s strengths include
comprehensive capabilities
and agility
Since our founding HORIBA has been proud tobe a R&D-oriented company committed tonurturing HONMAMON technologies. As for our
global growth, we have also focused on linking
functions such as production, sales, andmanagement in a well-balanced manner andon a global scale. I also believe that HORIBA’s
strength lies in its comprehensive capabilities
which allow us to organically integrate various
functions and flexibly handle diverse customers
and markets.
To improve the comprehensive capabilities of acompany, it is vital to maintain close
collaborative relationships with suppliers. We
have built strong relationships of trust bytreating HORIBA’s suppliers not simply as
vendors, but collaborating with them as partnercompanies. We take the time to continuallycommunicate with partner companies andalways consider mutually beneficial methods
and measures. Thanks to this, shipments to
HORIBA from partner companies have rarely
been delayed, even when the impacts ofbusiness cycles have made procurement
difficult. We always collaborate closely withpartner companies on technology as well.
This includes adopting an approach where wecreate basic technologies in-house, thenoutsource design and production to trusted

05Technologies andHuman assets

partner companies. We increase ourcomprehensive capabilities by valuing mutual
trust and constant communication based on
HONMAMON technologies. I want us tocontinue to be a company that can flexibly
meet the customer expectations.
HORIBA has made its presence known
through high-end analysis and measurement
equipment used primarily in research anddevelopment. At the same time, we have
expanded our business portfolio and gained
opportunities for significant growth byapplying our technologies in different fields.
We are also starting to see new business
opportunities for industrial applications in Bio& Healthcare, which is one of the focus areas
identified in MLMAP2023. HORIBA has morethan 30 years’ experience in the medical
business centered around the sale ofhematology analyzers. In recent years, wehave expanded into the field of Life Scienceby uniting this with scientific analysis
equipment technology. We are also
cultivating human assets who will leaddevelopment of cutting-edge technology, andhave high expectations for future growth.

06

CEO MESSAGE“HONMAMON”

The timing of investment is momentary, affinity withthe corporate culture is the key to success
Since the late 1990s, HORIBA has grown by
actively accepting attractive technologies orcompanies with superior technical prowess into
the group through investment, including
corporate acquisitions. In the future, suchstrategic investments will become increasingly
important. We will develop our business inseveral fields without being partial to any single
business, and continue to generate cash even in
the midst of economic ups and downs. The solid
financial foundation that HORIBA has built up so
far will definitively become a major strength.
I also believe that, rather than things like
performance that are easy to evaluate, themost important aspects in assessing acompany are its invisible corporate culture andvalues. One of the things that makes acorporate acquisition successful is
understanding of and affinity for one another’s
corporate culture. HORIBA has grown throughmergers and acquisitions by not missing thechance to seize opportunities that present
themselves from time to time. Jobin Yvon
(current HORIBA FRANCE SAS) is a prestigious
company in the field of optical spectroscopythat joined HORIBA in 1997. It boasts a history
longer than HORIBA’s, stretching back 200
years. In this way companies from around theworld, with excellent technologies and histories,
are breathing new life into HORIBA and adding
value to the entire group.

Weaving together diverse human assets and technologies– Unfading value like Kumihimo*1–
HORIBA celebrated its 70th anniversary in
2023. In January, approximately 2,700
HORIBARIANs*2 mainly in Japan, out of theroughly 8,500 employees at our groupcompanies, gathered under one roof for acommemorative ceremony. Many
representatives from overseas groupcompanies participated as well to celebrate
the 70th anniversary with us.
The commemorative ceremony was planned
and run entirely by HORIBARIANs, mainly
younger members. I’m sure that planning an
event for thousands of people andincorporating fresh ideas on their own was aninvaluable experience for the HORIBARIANs

involved. Also, when considering the future of
the company, it is not possible to envision the
future simply by extrapolating from our present
state. A new dimension of thinking is required.
Gaining knowledge is important, but being
creative even more so. We have been planningand carrying out various events, including
anniversaries, on our own since our company’s
foundation. We believe it contributes to humanasset development by providing opportunities
for HORIBARIANs to build flexible creativity.

At HORIBA, we view our employees as
valuable assets. That is why we use the words“human assets” rather than “humanresources”. However, a company that relies onjust one person or a few people withexceptional abilities as its human assets
cannot grow. Diverse and unique
HORIBARIANs working together as a team iswhat produces great results.
Weaving together diverse human assets and
HONMAMON technologies, like the braided
cords that are a part of traditional Japanese
crafts, has enabled HORIBA to develop*1 Kumihimo: Kumihimo is traditional Japanese braiding using cords. The braiding technique has been used inJapan for over 1,300 years and its uses range from kimonos to modern fashion and accessories.

numerous products and services. As we
pursue cutting-edge technologies, we aim to
be a company that creates value like that of
traditional crafts—value which does not fadeeven after many years. We look forward to yourcontinued understanding and support in 2023.
May 2023

Atsushi Horiba

Chairman & Group CEO*2 HORIBARIANs: All HORIBA workers are regarded as family and called HORIBARIAN as a nickname.
Kumihimo

07

08

Report 2022-2023
CONTENTS

Motto
01 Corporate“Joy and Fun”

03

CEO
MESSAGEHORIBA’s
measurementbusiness

11
11

13

HORIBA’s wide range oftechnologies and theirdevelopment

HORIBA
23 SEMICONDUCTOR

25
SPECIAL
DIALOGUE

EXTERNAL
DIALOGUE

37 CFO MESSAGE
41 Corporate

Governance

46 List ofManagement
Members

Guide
51 Investors’
Business overview

51
53
54

09 Editorial Policy
Editorial Policy
We create the HORIBA Report to gain theinterest of institutional investors who take along-term perspective, and to allow them toattain a better understanding of HORIBA. We
also believe that HORIBA’s stakeholders canobtain benefits stemming from our growth, andthat they take the same long-term perspective
as institutional investors.
We want to provide our stakeholders with a tool
to help understand HORIBA.
That tool is the HORIBA Report.
■ Regarding our use of the term “human assets”

HORIBA considers employees to be valuable assets and refers
to them as “human assets” in principle.

■ Regarding our use of the term “owners”(shareholders)

HORIBA fully recognizes the importance of its shareholders andfrequently 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.

09

to realizing a
17 Contribution
carbon-neutral society
various R&D
19 Providing
solutions in new automotive

20

area

HORIBA will never stop
combustion measurement

our business in
21 Advancing
the bio/life science fieldsemiconductor
29 Expanding
business opportunities bycross-segment approach■ Market share in the HORIBA ReportMarket shares stated in this report are HORIBA’s estimates as of
fiscal 2022.

■ Change in revenue recognition standard

HORIBA, Ltd. and its domestic consolidated subsidiaries had formerly
recognized revenue mainly on a shipping-date 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 the relevant contracts.
The amounts in or before fiscal 2015 are not retrospectively revised.

31
31
33
35

Contributing to Society
through HORIBA-style
Management
HORIBA’s value creation cycle
Various initiatives focused onhuman assets
HORIBA approach to sustainability■ Disclaimer regarding future plans and forecasts

This HORIBA Report contains certain statements describing futureplans, strategies, and performance forecasts of HORIBA, Ltd. andits affiliated companies. These statements reflect forecasts
estimated on management’s assumptions and beliefs based on theinformation available as of April 30, 2023. Actual performance may
differ due to unforeseen circumstances in the operating environmentand other factors.

55
56
57

HORIBA’s five measurementbusinesses
Automotive segment
Process & Environmental
segment
Medical-Diagnostic segment
Semiconductor segment
Scientific segment

58 Corporate Data
59 Financial Data
Widevariety

WebsiteRange ofTargetReaders

HORIBA Report2022-2023■ Regarding the importance and comprehensiveness of

information in the HORIBA Report 2022-2023

We have selected financial and non-financial information that we
believe to be of high importance for inclusion in the HORIBA Report2022-2023.
For more detailed information, please see our website.
The PDF version of the HORIBA Report 2022-2023 is also available
through our website.

Limited
Summary

Contents

Details and data

HORIBA Report

IR information
Web Link

CSR information
Web Link

10

HORIBA’s measurement business

HORIBA’s wide range of technologies and their development
Three fields HORIBA is taking on

HORIBA’s measurement business

Energy & Environment

Samplehandling
Technology for handling samples subject toanalysis and measurement

Helping to transform the energy
network toward the realization of asustainable society

Automotive
Blood glucose analyzers

Process &Environmental

Water quality analysis
and examination
systems

Raman
spectrometers

Spectroscopic
ellipsometers

Semiconductor

Constant volume
samplers

Liquid analysis

Chemicalconcentration
monitors*

MedicalDiagnostics

Gas flow control

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

Technology to instantly andprecisely measure and control
the flow of fluids

HORIBA
core
technologies

Spectroscopic
analysis

Selected based onamount of sales

Technology to analyzematerials by using ultraviolet
light, visible light, andnear-infrared light

Infraredmeasurement
Technology toanalyze components
in gases in real time

Particle analysis

Fluorescence andabsorbance
spectrometers

Stack gasanalyzers*

Emissionmeasurement
systems*

Air pollution
analyzers*
Automatichematology
analyzers

Emission measurement
systems*Datahandling
Digitalization technology for analyzing the

HORIBA’s measurement technology began with electrochemical pH meters.
results of analysis and measurement
Since then, we have expanded the analysis targets to include liquids, gases, and solids,
while accumulating various analysis and measurement technologies using infrared rays and
X-rays, and the like. We are also developing control technologies in addition to our analysis and measurement technologies. We
utilize products born out of our core technologies, as well as advanced sample handling and data handling technologies that flexibly
meet customer demands, to ascertain the changing needs of the market. HORIBA will continue to enhance the synergy between our
resources to bring our customers the superior value produced by measurement technologies.

11

In order to build a sustainable society, we need an optimalenergy network with a circular series of processes comprisingenergy production, storage, and consumption.
HORIBA aims to help transform the energy network through awide array of measurement technologies, from materials analysis
to plant monitoring, and fuel cell evaluation to the development of
next-generation mobility.

Bio & Healthcare

Elemental
analyzers

Technology to measureparticles (diameter, number,weight, and components)

Nanoparticle-size
distribution analyzers

Scientific

Mass flow controllers* Products using multiple core technologies

Supporting research in bio/lifescience to preserve healthy,safe, and secure lifestyles
As medical infrastructure expands to serve a growing society,the needs of patients and medical sites are diversifying. Thismeans that more efficient medical services are required.
HORIBA will continue to provide products and services that
help to solve societal challenges such as the aging of society,healthcare cost control, efforts towards preventative medicine,
centralization of medical care in specialized hospitals,
decentralization of medical care through local examination andtreatment, and avoiding pandemics.

Materials & Semiconductor
Supporting advanced information
technology that is essential toachieving new daily lifestyles
As individuals use online communications more, telecommunications
systems expand, and IoT permeates society, vast amounts of data
are being generated. This is drastically increasing the need foranalysis solutions like machine learning, and demand for information
storage. Moreover, the importance of the semiconductor industry is
growing as society comes to live with COVID-19.
We will support changes in semiconductor technology, likeminiaturization and multi-layering, and contribute to thesemiconductor production processes required for the stableproduction of higher-performance semiconductors.

12

HORIBA’s measurement business

EXTERNAL
DIALOGUE

Supporting all industries with
our unique technologies we havebuilt up over time

HORIBA promotes cross-segment in its three fields, and is using the technologies we have built up thus
far to develop new businesses. Professor Emi Osono of Hitotsubashi University and HORIBA, Ltd.
President Masayuki Adachi discuss HORIBA’s business strategy and vision for the future.

evaluation equipment such as that used to evaluate thewater electrolysis equipment essential to clean hydrogenproduction, through HORIBA FuelCon GmbH in Germany.
And demand is growing in Europe, where efforts to achievecarbon neutrality are accelerating.
Meanwhile, the overall picture of how the world will
generate, store, and use energy from here out is yet to besettled. At HORIBA, we are taking a flexible approach ona global scale in the field of Energy & Environment. This
includes the utilization of hydrogen and ammonia, and theefficient use of electricity in electric vehicles, in addition toenergy from conventional combustion.
Osono: I think something that makes HORIBA different,is that while it is a global company located in Japan, itscenter is not necessarily in Japan. The local circumstancesin Europe, the United States, and Japan are reflected
to a considerable extent in the energy blueprints for the
future drawn up by each. The fact that HORIBA has groupcompanies rooted in each region is a great strength
because it allows you to ascertain global trends in abalanced manner from multiple perspectives.

Special Feature

Adachi: Businesses that only take a Japanese perspective
may not survive. I believe that taking a flexible approachon a global scale is the correct choice from a long-term
perspective.

Emi
Osono
Professor, Hitotsubashi
University Business School,
School of International
Corporate Strategy

Osono: This is the first time President Adachi and I havetalked like this since our interview about the Porter Prize*1(April 2020). Societal challenges such as global warming
have become more pronounced now compared to when
you received the Porter Prize, and we have entered a periodof major change in the industrial structure. What kind ofchanges have you made at HORIBA?
Adachi: At HORIBA we are advancing our Mid-Long Term
Management Plan, MLMAP2023 formulated in 2019. In
MLMAP2023 we define three fields*2 that are setting thepace on global megatrends. One of these, Energy &Environment, includes the Automotive Segment business forwhich we won the Porter Award.

Osono: You could also rephrase this as, “When the future
is uncertain, you should keep multiple options open.” If you
think that one of the options may become a global trend andunfold in a big way, it makes sense to keep as many options
as possible. Since HORIBA promotes cross-segmentation,
investments related to energy can be used not only in the
Automotive Segment, but in the Process & Environmental
and Scientific Segments as well. Thus, a business strategy ofmaintaining various options is very attractive.

Masayuki
AdachiDoctor of Engineering
President & COO

Osono: The automotive industry currently finds itself
transitioning to electric vehicles, however not all vehicles inall countries can be immediately switched to EVs. As weutilize electricity produced by renewable energy, the trend of
utilizing energy from conventional combustion as a “bridge”
will be essential to the energy transition.
Adachi: While the number of products aimed atmeasurement and control of combustion in applications
such as engines has fallen from its peak, there is still
demand and HORIBA will continue to handle them. At thesame time, we are also putting our efforts into products
related to hydrogen, which is gaining attention as a
new energy source. HORIBA manufactures and sells*1 Porter Prize: Awarded to Japanese companies that have achieved and maintained superior profitability in a particularindustry by implementing unique strategies. It was established in July 2001 by the Hitotsubashi University
Business School, School of International Corporate Strategy. HORIBA, Ltd. received the award in 2005 for its
engine measurement system equipment business. See the link on the right for an article about this interview.

Web Link(Japanese only)

Adachi: HORIBA operates our business on a segment basis,and each of our five segments has come to generate solid
profits. On the other hand, so-called vertical divisions haveappeared as a side effect of segmentation. There is no suchthing as a final form or correct answer when consideringorganization and strategy. In fact, if I had to name a correct
strategy, it would probably be to keep changing. The answers
lie in continually taking on challenges through trial and error.

If the right answer has been determined, then that is probably
because someone else had already gotten to it. I think thatthe history of HORIBA shows that it is worth taking on achallenge because you do not know the answer, and thattaking on challenges leads to flourishing. This is so evident
that we joke within the company that HORIBA is lucky.
Osono: If you look into the background of interesting
business models, you will find cases that started by chance.
Then someone within the company takes a bird’s-eye viewof the initiative, attaches meaning, and decides to adopt it as
a business. These choices add up and result in the successstories we find in textbooks. There are not many companies
like HORIBA, where initiatives start from the ideas ofindividuals or the spirit of “Joy and Fun.” I think we should
appreciate the fact that your starting point is already unique.
Adachi: I always tell HORIBARIANs that, “I want you tobroaden your perspective to consider the social value of thethings you are working on, and freely take on challenges.” I
want them to take on challenges with the conviction that “thisis necessary for society, people, and the Earth.”
Osono: Many societal issues are becoming clear
around the world. I think that HORIBA technology is anindispensable part of their solutions. For instance, simulation
is indispensable for manufacturers trying to reduce theenvironmental impact of production. And it is only because
measurement technologies exist that they are able to conductadvanced data measurement, verification, and analysis.
Adachi: It is true that HORIBA considers itself amanufacturer of analytical and measurement instruments.
But I also feel that we can be too strictly bound by theword “analysis.” In fact, we have become a key company
responsible for the measurement technologies that enablemeasurement and control in industry. HORIBA possesses
technologies that hold the potential to measure and control
the molecules that comprise substances. Devices which
utilize these technologies could allow many industries tomeasure and control substances at a previously invisible
molecular level. We recognize the value in this, and willtake a cross-segment approach to transcend that barriers
between businesses. Talking about this gets me excited,
because it will take the way measurement and control isthought about in industry to a completely different level.

Click!

*2 Three fields: Energy & Environment, Bio & Healthcare, and Materials & Semiconductor. Defined as one of our priority
measures in the “Market Oriented Business” section of MLMAP 2023.

13

14

HORIBA’s measurement business

When the future is uncertain, HORIBA has
multiple options. Business strategies that
contain multiple options are very attractive.

EXTERNAL
DIALOGUE

Emi Osono
Professor, Hitotsubashi
University Business
School, School ofInternational
Corporate Strategy

Emi Osono received her MBA from The George Washington University
School of Business, and her PhD after completing a post doctorate programat the Hitotsubashi University Graduate School of Business Administration
Faculty of Commerce and Management. She taught as a visiting lecturer(full time) in the MBA program at Waseda University’s Business School(Graduate School of Asia Pacific Studies), and as a full-time lecturer andassociate professor at Hitotsubashi University Business School’s School ofInternational Corporate Strategy before assuming her current position.
She is currently a temporary member of the Industrial Structure Council at
the Ministry of Economy, Trade and Industry, serves as a board member forTokyo Marine Holdings, as an advisory board member for Citigroup Japan
Holdings G.K., and is on the Steering Committee for the Porter Prize.

Special Feature

Emi Osono
Osono: Overcoming that barriers between segments is
actually a very daunting challenge. Did HORIBA make anyorganizational changes, or adopt or change any systems?
Also, how are you promoting a cross-segment approach at
your overseas group companies?
Adachi: HORIBA, Ltd. has carried out significant
organizational reforms over the past few years, and I believethat the dramatic changes in the world due to the COVID-19
pandemic gave a boost to our cross-segment approach.
The pandemic continues to change society, and the things
required of companies have changed significantly as well.
We cannot just keep doing what we’ve been doing all along.
We kept noticing places where we could be doing a lot
more. A rising sense of crisis spurred the company’s shift to across-segment approach wherever possible.
And at our overseas group companies, a very interestingchemical reaction had been taking place even before
the COVID-19 pandemic. For example, HORIBA FRANCE
SAS had originally been focused on the Automotive andProcess & Environmental segments. This company becamea multi-segment company when it merged with the former
HORIBA Jobin Yvon SAS, which was focused on the
Scientific Segment, in 2017. After the merger, both sides
were exposed to a new corporate culture, as well as different
methods of production and ways of approaching customers.
This enabled the company’s employees to view the businessfrom a new perspective.
Osono: So, without any instructions from headquarters, theyborrowed aspects of each corporate culture and developed
a new cross-segment approach on their own. Usually when
two organizations become one through a merger or the like,their corporate cultures do not blend together naturally.
Even though these were both group companies, it is a very
interesting result.
Adachi: I think this is because when HORIBA Jobin Yvon
SAS merged with HORIBA FRANCE SAS, 20 years had
already passed since it became a part of HORIBA in 1997.
I believe it is precisely because they became a member of
HORIBA in both name and substance that this surprisingsense of unity emerged following the merger. In France it isvery important to build relationships of trust between people
in business. When HORIBA acquires a company, we value
the human assets it has. We also fully utilize HORIBA’s
global sales and service networks to enable the acquired

Global Spread of Business Locations and Technological Development in Three Fields
HORIBA Test Automation Ltd.
HORIBA MIRA Ltd.
HORIBA Europe GmbHHORIBA INSTRUMENTS(SHANGHAI) CO., LTD

HORIBA FuelCon GmbHHORIBA Tocadero GmbH

EuropeHORIBA FRANCE SASHORIBA Europe Research Center
HORIBA FRANCE SAS
Lille Office

HORIBA India Private Ltd.
Technical Center
HORIBA India Private Ltd.
Nagpur Factory

15

HORIBA Instruments Incorporated
Canton OfficeAmericas

HORIBA Instruments Incorporated
Houston Office

Asia

HORIBA ABX SASHORIBA Instruments Incorporated
HORIBA New Jersey
Optical Spectroscopy CenterJapan

HORIBA Instruments Incorporated
HORIBA Reno Technology Center
HORIBA, Ltd. (Kyoto)
HORIBA STEC Co., Ltd. (Kyoto)
HORIBA Instruments
HORIBA Advanced Techno Co. Ltd. (Kyoto)
Brasil Ltda.
HORIBA Techno Service Co., Ltd. (Kyoto)

HORIBA, Ltd. Biwako Factory
HORIBA BIWAKO E-HARBOR (Shiga)
HORIBA STEC, Co., Ltd. Aso Factory (Kumamoto)…Energy & Environment…Bio & Healthcare…Materials & Semiconductor

company to grow. We also spare no effort in getting people tounderstand our corporate culture of “Joy and Fun.” And we
carefully cultivated a trusting relationship with HORIBA Jobin
Yvon SAS. This approach to corporate acquisitions helps
the acquired company to understand they can receive greatvalue by becoming a member of HORIBA.
Osono: That is the ideal form of corporate acquisition.
Companies that make others think “we would like to bebought by them” have the greatest advantage in corporate
acquisitions. This is what many companies should aim for.
Adachi: I am truly happy to hear that.
Osono: Well, 2023 is the final year of MLMAP2023. What are
you thinking and moving towards as you approach the next
Mid-Long Term Management Plan?
Adachi: I believe that the three fields identified in
MLMAP2023 will become more distinct in our next Mid-Long
Term Management Plan. I also want technologies to be
utilized in normal development activities regardless of thesegment. In other words, our goal is for the term
“cross-segment” not to be used within HORIBA.
The molecular measurement and control technologies I mentioned
earlier have the potential to be used in various situations in the Life
Science market on which HORIBA is focusing on. In pharmaceuticals
manufacturing there is a movement similar to the so-called “fablessfoundry” manufacturing distinct to the semiconductor industry, which
divides up the work of planning, designing, and producing
products. In other words, pharmaceuticals companies and Contract
Development and Manufacturing Organization (CDMO) in thepharmaceuticals industry are beginning to split up the development
and manufacture of drugs. HORIBA believes it can provide
molecular measurement and control technologies not just fordevelopment by pharmaceuticals companies, but for CDMOs as
well. In this way, we can contribute to vaccine production and drug
quality testing, for example.

during corporate acquisitions and the way you work toensure permeation of your corporate culture. Your Mid-Long
Term Management Plan looking five to ten years into the
future also seem to be functioning well.
Adachi: We engage in analysis, measurement, and control in
the fields of science and industry. That is to say, I think that in
the realms of physical and scientific technology, you areallowed to take the time to work on things carefully. Near-term
profitability is important, but I believe that it is even more
important to determine the long-term benefits to society,people, and the Earth.
Osono: While there are investors who look at a company
from a short-term perspective, I think it is important to be able
to properly communicate your company’s timeline. If you canconvincingly explain how much time is needed to create
value in the industries your company is involved in, I thinkinvestors will properly evaluate your firm.
Adachi: Fortunately, the number of HORIBA owners(shareholders) who take a short-term perspective is limited. I
feel that the world is becoming more interested in corporate
sustainability than pursuing short-term profits, and that moreinvestors are taking a long-term perspective.
Osono: Investors evaluate companies based not only on
their performance at that time, but also on future growth andvalue creation. For a company engaged in what seems at firstglance to be an unassuming B to B analysis andmeasurement business, I sense that the source of yourbrilliant ability to create value lies in HORIBA’s corporatemotto of “Joy and Fun.” That wording is genius. With yourunique corporate culture, I hope you will continue to tackle
various challenges in the future.
Adachi: Thank you very much. We will move forward steadily
and carefully, with confidence. We look forward to yourcontinued support for many years to come.

I am proud to say that HORIBA’s technologies can contributeto both research and development, and production, at
pharmaceuticals manufacturers. Pharmaceuticals
manufacturers have made huge investments for long time inareas such as messenger RNA research. This is why they
were able to develop and manufacture vaccines for
COVID-19 in about a year. In the same way, we also continue
to spend time on research and development. We have beenable to establish advanced technologies that contribute tosociety, people, and the Earth, because we have taken time
to work on each one.

(Conducted in February 2023)

Osono: This goes along with what you just said, but I get the
impression that HORIBA approaches everything from along-term point of view. This is reflected in how you build trust

We have been able to establish advanced
technologies that contribute to society,people, and the Earth, because of our deep
and thorough research and development.

Masayuki Adachi
16

HORIBA’s measurement business

H2

Europe is on the cusp of adopting hydrogen energy throughout society, as efforts to reach carbon neutrality accelerate.
With this in mind, manufactures have begun to mass produce the electrolyzers that will generate hydrogen by utilizing renewable energy, leading
to an uptick in demand from HORIBA FuelCon GmbH for electrolyzer development evaluation systems and production inspection systems.
Meanwhile, HORIBA FRANCE SAS is participating in projects in France, where the government is taking the lead in building a decarbonizedsociety, by supplying HORIBA FuelCon GmbH products, and other HORIBA Group analysis and measurement equipment.
The entire HORIBA Group is coming together to help bring about a hydrogen-based society.

HORIBA bands together to expand
the hydrogen energy business
Building
strongrelationships
withcustomers

HORIBA FuelCon’shydrogen energy business
HORIBA FuelCon GmbH forms the core of
HORIBA’s hydrogen energy business. In
2022, they began full-scale operation of their
new facility, HORIBA eHUB, which boasts a
7,000 m2 production area that is five times
larger than their existing facilities. They plan toinvest even more in human assets, androughly triple their existing production
capacity by the end of 2023.

Supported establish the
HORIBA Institute for
Mobility andConnectivity² (HIMaC²) atthe University ofCalifornia, Irvine (UCI).

y
erg
en

AminesGases forCO2 removal

a
th
rou
on
i
t
a
gh C
O SeparContributing tomonitoring of various
gases generated during
each stage of thechemical absorption
method.

CO2

Exhaustgas
pretreatment

Low concentration
gas monitoring

Exhaustgases

Trace gas analyzer

Amine
Solution
Monitoring

Absorption
tower

Heat
exchanger

Regeneration
tower

CO2
CaptureAminesChemical absorption method using
amine solution is widely employed toseparate and capture CO2

Process Raman/
fluorescenceanalyzers

Used to monitor thecondition of the amine
solution and determine
when to change it or
inject more.

AminesAmines2

MonitorexhaustGases

The fuel cell manufacturer Symbio SAS partners
with HORIBA on test bench for construction of
one of the largest new plants in France.
(Left in photo)
Edoardo Bassano, Managing
Director of CRMT SAS(Right in photo)
Laurent Fullana, President of
HORIBA FRANCE SAS

Globalpartnerships

Fuel cell and waterelectrolyzer
evaluation systemsndgPhilippe Rosier, CEO of Symbio SAS

Credits: © CRMT, 2020

nMulti component
gas analyzer

in
ut
rib
Cont

High
concentration
gas monitoring

HORIBA

Hydrogen

HORIBA FuelCon GmbH is participating in the
H2Giga Project, spearheaded by the German
Federal Government, due to its advanced
water electrolysis evaluation technology.

General-purposehydrogen gas
analyzers

e use of hy
dro
o th
t
g
ge
it n

Con
tri
bu

Special Feature

Battery evaluationequipment

Ca
ptur
e

Energy & Environment

Contribution to realizing a carbon-neutral society

Outdoor type pH/electricalconductivity analyzers

Providing analysis and measurement solutions forcarbon recycling

Exhaustgases,etc.

HORIBA’s Carbon
recyclingtechnology(Separation andCapture)Separation
andCaptureAchievinga carbonneutralsociety

HORIBA FRANCE SAS signs strategic
agreement with CRMT to collaborate onhydrogen-based mobility solutions.

Carbonrecycling

Chemicals

Basicsubstances

Utilization(CCU)• Syngas, suchas carbonmonoxide orhydrogen• Methanol, etc.

OthersMinerals

Fuels

Concrete products,
etc.
Biofuels, etc.

Directutilization

Storage(CCS)

Dry ice, etc.

Independently created by HORIBA based on
documents from the Agency for Natural Resources
and Energy.
https://www.enecho.meti.go.jp/committee/council/basic_
policy_subcommittee/035/035_004.pdf

e-fuels*1*1 e-fuels: Synthetic fuels created from hydrogenmade using renewable energy

Carbon recycling technologies are gaining attention as a way to capture and utilize CO2 resources. CO2 that has been separated and captured
through carbon recycling is also beginning to be used in various ways. One of these ways is to create e-fuels. E-fuels have the advantage ofbeing able to be used as-is in existing fueling infrastructure and internal combustion engines.
The use of CCUS*2 to separate and capture CO2 is expanding, and HORIBA can provide various solutions at each step in CCUS processes.
HORIBA will contribute from various angles as we make further progress towards achieving a carbon neutral society.

*2 CCUS: Carbon Dioxide Capture, Utilization and Storage

17

18

Energy & Environment

HORIBA’s measurement business

Mobility Solution Business

Service Lifecycle Management

Providing various R&D solutions in
new automotive areaThe automotive industry is accelerating its development of next-generation mobility solutions that will lead to societal
transformation. And automotive manufacturers are responding to various technological demands, such as
electrification, connected vehicles, and autonomous driving.
HORIBA plans to contribute to the future mobility of society by providing broad solutions that support vehicle
development in new automotive areas like electrification, autonomous driving, and cybersecurity.

Developing real-world simulation systems for autonomous driving /ADAS* sensor evaluation
HORIBA is developing vehicle evaluation solutions for autonomous driving and ADAS features in the field of autonomous driving, where
regulations are eventually expected to be introduced. In 2022, the National Traffic Safety and Environment Laboratory adopted ourreal-world conditions simulation systems for evaluating autonomous driving and ADAS sensors.
These systems can be used to reproduce conditions that occur in the real-world, allowing researchers to even more accurately validate
the safety of ADAS.
* ADAS: Advanced Driver-Assistance Systems

Special Feature• Reproduce rainy conditions to measure and evaluate environment recognition performanceon public roads during bad weather• Efficiently and quantitatively evaluate the limits of sensor performance
1

1

Environment simulator that can
reproduce five levels of rainfall, frommist, through rain, to heavy rain*

HORIBA has been an overwhelming presence in the field of combustion measurement.
But global trends towards carbon neutrality are putting automotive manufacturers under pressure to support electrification.
In the meantime, society still has need of internal combustion engine vehicles, and there is steady demand formeasurement equipment at development sites.
Most of our MEXA Series Emission Measurement Systems are still in operation, so we will continue our combustion
measurement business with a multifaceted approach that includes updating, prolonging the life of, and recycling these devices.

Generously supporting the use of existing emission measurement
systems and development labs during the transition to electric vehicles
Multifaceted approachensures development lab
availability

2

HORIBA MIRA Ltd.

Equipment that can simulate
actual driving conditions on a
dynamometer in order to test
ADAS operation (steerable
four-wheel chassis dynamometer)

Supporting automotive development
through close partnerships with
manufacturers around the world

UpgradeAdding new functions

Upgrading to the latest equipment for
use into the future as well

RecycleIntroducing equipment with the latest
specifications

Removing individual parts

Engineering

Certification
Local
and
specifications
standards
testing
testing

UK-based automotive companies●●

Non-UK-based automotive companies●●

Automotive startups●●

Automotive suppliers●●

Material manufacturers●

Benchmarktesting

●
●

●

●
●

Emission Measurement Systems
Monitoring combustion control in engines
through emission measurement

We have shipped roughly 8,000 MEXA Series units since the year 2000,
and most of these are still in operation.

The European Commission announced Europe’s next-generation emission regulation, Euro 7, in November 2022.
It subjects all vehicles to regulation concerning the emission of pollutants such as ammonia and dust generated
by wear on brakes and tires, and it is expected that the content of these regulations will be stricter than ever.
Orders to HORIBA’s emissions business have been recovering since bottoming out in 2020, and we expect the
introduction of Euro 7 to further accelerate this trend.
Convenient
location●●—MEXA—

Managing stock of repair parts

Increased emission business demand due to adoption of Euro 7

HORIBA MIRA Ltd. provides diverse solutions to a wide array of automotive manufacturers
on a global scale. These start with vehicle development engineering, and include
certification, compliance with standard-based testing, and local specifications testing.
We have various projects underway with companies developing next-generation mobility
solutions, and are working with firms such as the UK’s Viritech, Israel’s REE, and Türkiye’s
TOGG to contribute to the development of next-generation mobility.
HORIBA MIRA’s Customers

ModifyPlan to maintain functionality byprolonging operation life

* 20 to 100 mm/h of rainfall

2

19

HORIBA will never stop
combustion measurement

Contributing to conventional power plant efficiency to meetincreasingly intense demand for electricity—ENDA—• Contributes to addressing challenges faced by thermal power
plants, such as ensuring safe operation, supplying stableelectric power, and improving power generation efficiency

Process control system forexhaust gas processing
installed in facilities such as
power plants• Supports power generation process efficiency with flue gas
desulfurization system and flue gas denitrification systemmonitoring

Stack gas analyzers

20

HORIBA’s measurement business

Bio & Healthcare

Advancing our business in the bio/life science field
Providing a wide range of analysis, measurement,
and control solutions from researchand development through production

Expanding our business to pharmaceuticals
manufacturing processes
Pharmaceutical development is becoming longer and more complex, and development costs are steadily
increasing. In light of this, pharmaceuticals manufacturers are accelerating to outsource drug manufacturing
to CDMOs* in order to concentrate their efforts on clinical development and drug discovery. In the samevein, we expect HORIBA products to be used in various aspects of the pharmaceutical manufacturing
process. HORIBA is helping to improve yield in pharmaceutical company and CDMO manufacturing
processes through technical capabilities that have contributed to research and development by global
pharmaceutical manufacturers.
* Contract Development and Manufacturing Organization:

Analysis and measurement in cutting-edge research
Industry R&D departments

Research institutes

Strengthen field of expertise
Fluorescence andabsorbance
spectrometers

Research
institutes

Cells andbiologicalsampleanalysis

Special Feature

Pharmaceutical business processes

Pharmaceutical companies—R&D—

Industry R&D
departments

Manufacturing
processes

Expanding ourbusiness to
manufacturing
processes
Toward molecular-levelmeasurement andcontrol

Contract manufacturing ofpharmaceuticals(CDMO)

Product process evaluation andmanufacturing process monitoring

Providing high-end
analysis andmeasurement
equipment such as
Raman
spectrometers

Smallmolecule
drug
analysis

Raman imaging
systems

Benchtop pH/
water quality meters

Bioreactors(culture vessels)

Conductivity sensors
for cleaning in place

pH/DO
control

Perform real-timemonitoring to help
improve yield

Pharmaceutical companies—marketing and sales—

Water
managementforpharmaceuticalproduction

Manufacturing processes

Grow into new areas

Pharmaceutical market

Many HORIBA products are employed by research institutions and corporate R&D departments, and the area is one
where HORIBA has proven its strength.
We are leveraging the technologies and brand power that we have built up in this field to expand our business into
the new area of industrial manufacturing processes. In this field, molecular level measurement and control are
increasingly required by manufacturing processes. HORIBA can fully meet these needs because we possess a levelof technology that allows us to measure and control the molecules which make up materials. Because HORIBA
provides analysis, measurement, and control solutions, we remain the optimal partner in a wide range of fields, fromresearch and development to manufacturing.

21

A company that contracts development and manufacturing of pharmaceuticals.

Nanoparticle-size
distribution analyzers

Mediumcomponentmonitoring
Process Raman/
Fluorescence analyzers

Microbial rapid inspction devices

22

HISTORYHORIBA1980
Launched the PD Project with the aimof developing particle detection
systems to enter the semiconductor
measurement market

Semiconductor
HORIBA built an extensive business network in the semiconductor industry from an earlystage. In 1985 Japan took top market share in the world semiconductor market. That year,
we exhibited at the world’s largest semiconductor manufacturing equipment industry
exhibition, SEMICON WEST 85, in San Francisco USA.

who was a leading researcher on cleanrooms for semiconductor manufacturing andelectronics industrial applications. And in 1989, we received the prestigious Inoue

Harushige Award together with Prof. Ohmi. Then, in 1990, president and CEO of Horiba,

Commercialized in-line chemical
concentration monitor, the CS220

maintain its presence in the semiconductor industry is that we have used our network

within the industry to continually provide high-value-added products to the leading-edgeof the semiconductor market.

Even when business conditions in one segment have been sluggish, we have been able toflexibly utilize management resources to continue investment in each segment and achievesustainable growth. As we have continually striven to maintain and improve ourcompetitiveness in the rapidly changing semiconductor market, our semiconductorbusiness had grown to become the most profitable of HORIBA’s businesses. At present,

our primary products for the Semiconductor segment are mass flow controllers, chemical
concentration monitors, and particle detection systems. But now we are focused on
creating businesses that will become future pillars of the company.

HORIBA will continue to contribute to the development of the semiconductor industry byproviding high-quality solutions for semiconductor manufacturing processes.

Reticle/mask
particle detection
systems

Chemical concentration monitors

23

Signed agreements with Ferran Scientific(March) and FuGasity (April)
Began developing mass flow controllers that
apply the pressure-related technologies ofboth companies
Established development site in Reno,
Nevada, USA

Opened Fukuchiyama Technology Center topursue higher accuracy and reliability of fluid
measurement and control necessitated byminiaturization and high integration ofsemiconductor devices
Expanded HORIBA STEC’s Aso Factory
Established HORIBA Reno Technology Center,strengthening our development capabilities in
the U.S., where many semiconductor
production equipment manufacturers areconcentrated, and enabling us to rapidly
respond to customer needs

Completed construction of (then) STEC’s
Aso factory to meet increasing demand formass flow controllers

Delivered prototype in-line chemical
concentration monitor to meet the need forstrict control of wafer cleaning solution
concentrations

1995

Ltd. and STEC Inc., Atsushi Horiba, was elected to one of the Board Members of the

global semiconductor industry association SEMI. The reason HORIBA has been able toOpened sales office in Sunnyvale, California
to expand business in the U.S.

1989

1992

HORIBA also took part in joint research with Professor Tadahiro Ohmi of Tohoku University,

Completed first particle detection system,
the PD-200

1985

1988
Received the Harushige Inoue Award,
together with Professor Tadahiro Ohmiof Tohoku University and others, forjoint development of the ultra-clean gas
supply system proposed by Prof. Ohmi

Semiconductor manufacturers recognize its
impressive performance

1982

1984
Exhibited at world’s largest
semiconductor manufacturing
equipment industry exhibition,
SEMICON WEST 85

Released mass flow controller, SEC-L/H, thatcan precisely measure and control flow rate

1999

Atsushi Horiba appointed to Board of Directorsof SEMI, a global industry association that
integrates the entire supply chain for electronics
manufacture and design

2003

2007

Opened HORIBA Technology Center as adevelopment site in Silicon Valley(Santa Clara, California)

2013

2015

Opened HORIBA Advanced Technology Center toconsolidate cleanroom functions dispersed
between different HORIBA Group locations, andpromote integrated manufacturing fromdevelopment to production

2018

2021

Established Optical Smart Sensing division at
HORIBA STEC CO., Ltd., to develop HORIBA’svarious sensing technologies for thesemiconductor market

Mass flow controllers

24

HORIBA Semiconductor
SPECIAL DIALOGUEHORIBA, Ltd.
Executive Vice Chairman &Group COO

D. Horiba: At present, our main productin the semiconductor segment, MFC gains
60%* market share worldwide. Meanwhile,
we entered the semiconductor market
with the introduction of MFC and particle
detection systems. Can you look back on
the evolution of the semiconductorbusiness in HORIBA?
Saito: In early 1980s, HORIBA wasmaking strides to enter the semiconductor
market and initiated the ‘PD Project’ in1982 for the development of system torapidly detect particles on Reticle2(photomasks). In 1984, we successfullycompleted the first particle detection
system, the ‘PD-200’.
Koishi: We started to develop andmanufacture MFC for the semiconductor
market at the same period. Originally,
when HORIBA STEC was named by“Standard Technology”, we rolled out the
MFCs to equip on standard gas
generators which were used forcalibration of air pollution analyzers.
Saito: At that time, we used to purchase
MFCs from overseas manufacturers,
however we achieved success inindependent development of the first MFC
made in Japan.

DIALOGUE

D. Horiba: So, HORIBA didn’t develop
MFCs specifically for semiconductor
production equipment at the very
beginning.

Hideyuki Koishi
HORIBA, Ltd.
Director

HORIBA STEC Co., Ltd.
Director(Former President)

Dan Horiba

HORIBA, Ltd.
Senior Corporate Officer
HORIBA STEC Co., Ltd.
President

25

Mass flow controller1 (MFC) is one of the main products of
HORIBA semiconductor business.
Our MFC business has grown to expand market share and drive overall HORIBA
performance, even in the face of the cyclicality known as the‘Silicon Cycle’ in the semiconductor market.
HORIBA STEC Co., Ltd, (hereinafter HORIBA STEC) our leading group company in thesemiconductor business, is responsible for the development, manufacturing, and salesof MFC. Under the leadership of Juichi Saito and Hideyuki Koishi, and with Dan Horiba
taking over as the company’s president from 2023, they looked back on their journeyand discussed the future direction of the company.

Saito: We determined that the MFC wedeveloped for the standard gas
generators could also be applied in thesemiconductor manufacturing process.
Upon developing MFC that could
accurately measure and control gas flow
rates, semiconductor manufacturers
recognized our innovation, and it becamea catalyst for the growth of our

D. Horiba: That is to say, HORIBA’s MFC
business grew up together with Japanese
semiconductor production equipment
manufacturers. But today overseas
equipment manufacturers account for alarge share of the HORIBA’s shipments.
Saito: Unfortunately, Japanese
semiconductor device manufacturers
were unable to adapt to market changes
such as the rapid expansion of
production capacity, gradually lost market
share to the U.S. and South Korean
manufacturers and slipped from theirposition as industry leaders. As a result,semiconductor equipment manufacturers
in the U.S. and South Korea significantly
grew. However, in the field ofsemiconductor manufacturing equipment,
Japanese manufacturers have also
leveraged their strengths, and our MFC
business now exists in a balanced
landscape. During the era of 200mm
wafers3, HORIBA’s MFC, like Japanese
semiconductor device manufacturers,
held the top position worldwide. However,as the industry transitioned to 300mm
wafers, both Japanese semiconductor
device manufacturer and HORIBA foundthemselves falling behind in the race toadopt new technological developments,
resulting in HORIBA competing for thethird position in global market.
D. Horiba: Nevertheless, we haveregained the top share* of the global
MFCs market again.
Saito: When we experienced a significant
drop in market share, we initiated a new
project with the goal of developing unique
MFCs unlike anything else in the market.
Koishi: Different type of MFC is employeddepend on the type and flow rate of gas
used. As entered into 300mm era, wewent on to develop MFCs that could easily

We successfully
followed the trendsof the next era throughceaseless upfront
investments focused on
development.
Juichi Saito

HORIBA, Ltd.
Executive Vice Chairman & Group COO

JUICHI SAITO

Juichi Saito

Concentrate all
HORIBA technologies
into the semiconductor
manufacturing process
to show the presencein the industry

The History of ourMain Product, Mass
Flow Controllers

semiconductor business. In the 1980s,
many Japanese semiconductor
production equipment manufacturers
grew, and Japanese IC manufactures
became world leaders using thosemanufacturing equipment, our MFC took
pride in playing a significant role in thisachievement.

change the type and flow range of gas
used, or so-called “multi-range, multi-gas
compatible MFCs”. We released the
SEC-Z300 series, and then the SEC-Z500
series in 2003, which came to be adopted
as standard by semiconductor production
equipment manufacturers.
D. Horiba: Pressure MFCs are thenintroduced to the market.
Koishi: A series of contracts were signed
in 2003 with Ferran Scientific and FuGasity
in the U.S., which led to the developmentof a new concept MFC based on thepressure-related technologies owned byboth companies.

*All are HORIBA’s estimates

26

HORIBA Semiconductor
for 3D NAND4 flash memory led toincreased complexity in the etching5
process and a rising demand forequipment. While the epitome ofsemiconductor manufacturing equipment
had long been represented by CVD6
(Chemical Vapor Deposition), the rise of
3D NAND technology quickly madeetching equipment the new trendsetter.
D. Horiba: The 3D NAND production
process requires etching equipment
capable of drilling narrow contact holes7
in wafers. The fact that this equipmentused HORIBA MFCs was made it a big
driver of growth.
Saito: Even during challenging times
when we lost market share, we
continued to invest in R&D andintroduced unique technologies, allowing
us to lead the new technology trend.

When the 2016
Kumamoto earthquake
threatened the continued
existence of our Aso Factory,
I was very moved byeveryone’s encouragement.
Hideyuki Koishi
HORIBA, Ltd.
Director
HORIBA STEC Co., Ltd.
Director (Former President)

Saito: We acquired the intellectual
property rights to the technology from thecompany in Reno called “FuGasity” andwelcomed their engineers to join us. The
tangible and intangible assets formed thebasis for HORIBA’s current research anddevelopment site in the U.S., the
HORIBA Reno Technology Center.
Koishi: Development of pressure-type
MFCs moved forward in the U.S., but
production was carried out in Japan. The
Japanese design team took the lead in
moving the MFCs towards mass
production, and collaborated with Reno
members to make considerable changes
to the internal design of the product.
However, this presented major difficulties.
It was around 2010 that we managed togenerate business income utilizing thetechnology adopted in 2003.
Saito: During this period, the rapid
digitization of society led to an explosive
increase in data volume, which, in turn,drove the rapid advancement of flash
memory storage capacity. The demand

27

Driving HORIBA’s
Semiconductor
Business
D. Horiba: Looking back at the history of
our semiconductor business, we can seethat overseas business development was
critical for business expansion.
Saito: When I was stationed in
Sunnyvale California in mid 1980s, thesize of our business was very small.
Therefore, I took care all customers in the
U.S. on my own, and I spent about halfof my week traveling by plane. At thattime making international calls to Japanwas very expensive. I had no choice but
to solve problems on my own, I
sometimes spent days in a customer’s
clean room.
Koishi: My first assignment was in
Taiwan. My task was mainly service
maintenance, and I spent every day
working in clean rooms at customer.
There were many challenges at the time. I
repaired damaged units at site instantly.
Sometimes I took back them to the office
for repair and returned to customer site
the next morning.
During overseas assignments, every time
I returned to Japan, I could feel thechange of our original place in Japan. It
was interesting experience to get asharper sense against the evolution
thanks to overseas assignment.

Saito: “Standard Technology” wasoriginally established through joint
investment by multiple companies. As thecompany gradually grew, in 2005, itcame fully under HORIBA Group as
HORIBA STEC. Balancing HORIBA
culture with maintaining the originalStandard Technology culture posed a
different set of challenge than businessexpansion. I believe this was the periodthat HORIBA STEC changed the most.

resume production as soon as possible.
The head quarter provided generous
support to achieve the recovery. Our
sales team also made effort to explain thesituation to customers, and negotiate tomaintain relationship with customers.
Many customers reacted to support usby adjusting their own production plan
and waiting for deliveries from us, insteadof switching to competitors. I strongly felt
the support from everyone.

D. Horiba: I’m sure you have faced
challenging situations during your time insenior management. Can you sharesome of the most memorable incidents?
Saito: Undoubtedly, the 2009 Lehman
Shock was a pivotal moment. The
sudden drop in orders was completely
unexpected. Simultaneously, we faced
many quality issues, which forced us into
staff reductions. The memories of thosechallenging times still linger as bitter
experiences. Nevertheless, it was thoseexperiences that brought our hearts
together as one, and I believe it isbecause of that unity that we have thestrong HORIBA STEC andsemiconductor business we have today.
D. Horiba: Quality and delivery time areimportant in any industry, but I have
impression that there is even strict
requirements from customers insemiconductor market.
Saito: One day, we received strong
complaint from customers regarding
delay. At the time, Hideyuki Koishi, who
was vice president at the time, took thelead in conducting an investigation,
reported the results to customers, andtaking steps to address the issue. As vicepresident, he took the lead himself insolving the problem. The fact senior
management showed great agility
brought high reputation from customers.
Even when faced tough requirements,
sincere response can create trust withcustomers and enable us to become“partner”. This is just one example, butthere were many similar experiences thathave reinforced our trust.
Koishi: I must share you about the
response at HORIBA STEC to the 2016
Kumamoto earthquake during myassignment as a president. HORIBASTEC’s Aso Factory was faced a survival
crisis, but I was struck by the
HORIBARIANs at the factory having
stood up for recovery. Many
HORIBARIANs whose own houses weredamaged in the earthquake still came into get the factory running again and

The Future of the
Semiconductor
Business
Saito: In January 2023, Dan Horiba, you
took over the role of President of
HORIBA STEC from Hideyuki Koishi. Dan
Horiba, as the new president of HORIBASTEC please share your thoughts on how
you intend to lead the company and our
semiconductor business.
D. Horiba: Recently actions to deploy
HORIBA’s various technologies in thesemiconductor market has been taking
shape. At the same time, we need toaccelerate the deployment of MFCs inother business field as well which means
horizontal deployment of our MFC
business. We have been good at
responding steadily to the customers
requirement at the forefront of thesemiconductor market. This is due to thesense of responsibility which each
HORIBARIAN at HORIBA STEC has
approached their work, and has madeour MFC business what it is today.
However, I think that rolling out our MFC
business to other business fields will
require us to look for an entirely new
approach. I would like to take current
leveling-off situation positively in thesemiconductor market and take new
initiatives with agility.
Koishi: For a long time, we have been
trying to keep our MFC business lessthan 80% to the semiconductor market
and increase 20% or more to othermarkets. However, when thesemiconductor business becomes busy,
everyone tends to become too focusedon semiconductors. It is important tosomehow exercise restraint in this regard.
It may be necessary to go back to thebasics of how we handle fluid control
technology, and reconsider our businessitself.
Saito: Reflecting on our past, it becomes
evident that it was the establishment ofoperations in Reno that contributed tothe strength of our current MFC
business. Looking ahead, we believe thatthe need for such technology
development hubs will arise not only inJapan and the U.S. but also in Europe,
China, India, and other regions. As
market diversification continues, having
development hubs tailored to the specificrequirements of each market will further
fortify our business.
Koishi: We have been gathering
exceptionally talented employees both inJapan and globally, both in terms oftechnology and sales. We look forward totheir continued involvement in the overallsemiconductor business moving forward.
D. Horiba: Customers’ expectations fortechnological innovation are growing, notonly for the fluid control technology that is
HORIBA STEC’s core competence, but
for HORIBA’s various other technologies
as well. I promise further development of
the MFC and semiconductor businesses
which both of you and other senior
members has developed. At the sametime, I also promise to clarify our vision
for the next stage.
(Conducted March 2023)

Expectations are
growing not just for
fluid control technology,
but for HORIBA’svarious othertechnologies as well.

DAN HORIBAHIDEYUKI KOISHISPECIAL DIALOGUEDan Horiba
HORIBA, Ltd.
Senior Corporate Officer
HORIBA STEC Co., Ltd.
President

Terminology
1. Mass flow controller: A component used in semiconductor manufacturing processes to precisely
control the flow of gases or liquids in supply lines
2. Reticle: A glass plate engraved with a circuit pattern and used when etching circuits in silicon wafers
with lithography equipment in the semiconductor production process
3. Wafer: Material used as a substrate for semiconductor manufacturing
4. 3D NAND: Vertical loading of memory elements on a semiconductor substrate to increase memory
density
5. Etching: Forming precise irregularities in semiconductors
6. CVD : Equipment for depositing thin films of approximately 10 nm to 1,000 nm on the surface ofsemiconductors
7. Contact hole: A hole for passing through a conductor to connect the wiring on the upper and lower

28

Expanding semiconductor business opportunities by cross-segment approach

Bringing HORIBA products toall processes in thesemiconductor industry
Semiconductor production
processes that require
both improved productivity
and reduced
environmental impact

Key components and equipment in the semiconductor
production process

Production
equipment

Mass flow controllers and chemical concentration monitors are our primary products that have built a solid position in
the market as indispensable components in semiconductor production equipment. Demand is also increasing forplasma emission monitors which detect the end point of the etching process, and particle detection systems used toremove foreign matter from wafer surfaces in the production process.
Reticle/mask particle
detection systems

Facilities
Mass flow
controllers

Chemical concentration monitors

Cleanrooms

Cleanrooms

Special Feature

Materials & Semiconductor

HORIBA’s measurement business

Facilities

R&D

As semiconductor devices become smaller and more highly
integrated, manufacturers seek higher levels of atmosphericcleaning inside cleanrooms, and consider contamination ofequipment and materials by AMC* to be a problem.
HORIBA’s AMC monitoring systems make the contaminationlevel in cleanrooms visible through automatic and continuous
measurement.
This helps to increase semiconductor production yields.
*Airborne Molecular ContaminantContinuous monitoring for smart factories

Highly sensitive
silica monitors

R&D

Gel-filled
self-cleaning pH
electrodes

Process laser gas
analyzers

29

In the rapidly growing semiconductor industry,
reducing the environmental impact ofmanufacturing plants is an urgent issue.
HORIBA is helping advance smart factories
with continuous monitoring provided byexhaust gas measurement and water quality
monitoring technologies cultivated in our
Process & Environmental Segment.

Contributing to R&D through film thickness and
CMP slurry evaluation

We provide a wide range of high value-added solutions, from mass flow
controllers and chemical concentration monitors—whose deep integration in
production processes has achieved overwhelming market share—to cleanrooms
and facilities in production plants, as well as research and development.
HORIBA’s products contribute to the sustainable growth of the semiconductor
industry which supports modern society.

Infraredthermometers

Monitoring airborne molecular
contaminants (AMC) in cleanrooms

AMC
monitoring
systems

Production
equipment

HORIBA’s semiconductor business is growing in-step with our customers.

Plasma emission
monitors

Spectroscopic
ellipsometers

Many high-end HORIBA analysis andmeasurementequipment are used in the field of researchand development. These include spectroscopic
ellipsometers used to evaluate the thickness and qualityof films in the film-forming process, and centrifugal
nanoparticle analyzers used to evaluate CMP slurry*.
Centrifugal nanoparticle
analyzers*Chemical mechanical polishing (CMP) slurry

30

RIBA-styleHO     Contributing to Society through
HORIBA-style Management

HORIBA’s value creation cycle

Value creation through technology
and diversity of human assets
HORIBA supplies products with analysis and measurement technologies, which provide solutions to social issues.
Technology and human assets support our business.
HORIBA will partner with customers to contribute to building a better society and generating greater social value.

HORIBASoc
ivalu aleSolutions tosocial issues— Contributing to the SDGs*

Creating value by expanding business that addresses
various social issues

Priority
Measure(HORIBARIANs)

nd
o
y
e
b
and

1

Sample handling
Data handlingCore
technologies

SDGs related toour three priority
measures

Measurement
technologies

HORIBA approach tosustainabilityalSoci eulavCreating social value

Go!

Human
AssetsVarious initiatives focused onhuman assets

HORIBA’s value creation cycle

Priority
Measure2

Priority
Measure3

Solution development

Measurementbusinesses*“SDGs” refers to the Sustainable Development Goals unanimously adopted by the United Nations General Assembly in 2015.

Government agencies

Sales/
MarketingCorporate
value

Measurementbusinesses

HORIBAHORIBA

Priority
Measure1

Priority
MeasureMLMAP2023

2

Mid - Long Term Management Plan

Priority
Measure3

HORIBA’s
Customers

Customers

Field services

31

Automotive manufacturers
Automotive component
manufacturers

Manufacturers

Thank you!

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

Please see the Investor’s
Guide on page 51 for more on
Measurement businesscustomers.

Semiconductor production
equipment manufacturers

Rese

arch

Semiconductor
production equipment
manufacturers

instit

ution

s

Corp
or
valu atee

ate
por
Cor lueav

Small- to medium-sized
hospitals & physiciansin private practice

Solution Provider BeyondLife Cycle Management

Electric powercompanies
Universities

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

HORIBA Core Values

The Next Stage of Super Dream TeamTo enhance the organizational structure that fosters resilient humanassets, which are the driving force of all business operations

Hello

Customersatisfaction
level

Corp
ora
valu tee32

RIBA-styleHO     Contributing to Society through
HORIBA-style Management

HORIBA’s value creation cycle

Various initiatives focused onhuman assets

HORIBA approach tosustainability

Various initiatives focused on human assets

Various measures to support theactivities of HORIBARIANs

The driving force behind business growth is the power of people. At HORIBA, we view our employees as
valuable assets and have continuously striven to maximize the individuality and skills of HORIBARIANs.
Going forward, we are committed to putting our corporate motto of “Joy and Fun” into concrete practice,
while also building structures that allow each and every employee to shine.

HORIBAHORIBA COLLEGE

The BlackJack Project
HORIBA launched the BlackJack Project in 1997 with the purposeof changing employee awareness and behavior. To date, morethan 13,000 project themes have been registered. Employees
themselves select themes to tackle from many questions and issues,
such as improving work efficiency, developing human assets, andstrengthening organizational capabilities. Then they determine how
things ought to be, and work toward organizational reform. Every
year, we hold BlackJack World Cup to select the best themes ofprojects from each country. This provides an opportunity to report
the results, and the motivations behind them, to the management
team. It also plays an important role in sharing our corporate culture,experience, and knowledge across HORIBA globally.
Nine people from six countries wereselected for the 2022 World Cup.
The project at our headquarters inJapan won the gold prize for the
first time in five years.

HORIBA COLLEGE
HORIBA COLLEGE allows HORIBARIANs to determine what
programs they need, become lecturers themselves, andshare their skills and experience within the company. Eachparticipant asks themself, “What do I need to learn now?”
This ensures that know-how continues to be passed on
efficiently and systematically, and builds a foundation for thegrowth of many HORIBARIANs.

Basic human resources policies
Open and Fair
We ensure that important information and rules are shared
openly so that there is free communication within the company.
We provide fair opportunities for uniquely individual and diverse
human assets to challenge themselves.

Point-added policy

Promoting diversity
HORIBA launched our Stained Glass Project in 2014. This project portrays
the company as a beautiful stained glass picture; each employee is a pieceof stained glass with a unique color, shape, and size. We have inherited aculture that allows people to exhibit diverse personalities and talents, andbelieve that creating a suitable working environment for diverse people will
create new value and lead to enhanced global competitiveness. We are also
working to organically connect senior management, worksite employees,
and the Human Resource Division, hold workshops for thinking about work
styles and careers, change employee awareness through exchange withother companies, introduce systems that increase flexibility in working
hours and location, and other initiatives.

HORIBA's point-added policy doesn't confer any points
unless an employee takes on challenges, even if they havenot necessarily failed in their endeavors. Points are conferred
for taking on challenges. If successful, further points areconferred. This system supports and recognizes ambitious
human assets, while valuing the start-up mindset.

Two-way communication
Information is not conveyed, it is shared. We employ various
mechanisms, including global gatherings where ideas are
directly voiced to management and birthday gatherings for
employees, to remove the barriers of position andorganization. This helps us to achieve true reciprocal
communication.

HORIBA’s five pillars of omoi *We firmly hold and implement the five pillars of omoi, toensure each and every employee can personally attain ourcompany motto of Joy and Fun.
“Omoi” means an emotional feeling, passion, thoughts,
enthusiasm, desire, aspiration, ambition, commitment,
mission, and objective. We encourage our employees to havethe following “Omoi,” which is the essence of acting on “Joyand Fun” through their work.

• To be a part of a collaborative community, atthe forefront of new ideas and creations.
• To achieve goals and make life memorable byfostering the highest intellectual potential.
• To reach across the globe to expand learningthat captures key business developments,
wherever they occur.
• To be proud of sharing what I do and what
HORIBA delivers.
• To be helpful to the world and its people.
* The Japanese word omoi is used in English as well, to engendershared values among global employees.

The FUN HOUSE, where HORIBACOLLEGE lectures are held, is a
training facility that employees will
want to visit. Located in a valley ofabundant nature and greenery, itaims to provide participants withtrue value. We offer a program
intended to transform participant
knowledge in a first-classenvironment where all five senses
are engaged.

Deployinghuman asset development
measures globally
We implement various measures such as our Career Challenge Systemthat achieves optimal personnel rotation and allows HORIBARIANs
to achieve their own career autonomy and fulfill their desires, throughopen recruitment within the company. Moreover, as we aim to produce
even greater numbers of global leaders, we are pushing forward withpersonnel development measures that bring out the abilities of each
HORIBARIAN. This includes promoting our GHE (Global HORIBARIAN
Exchange) Program for international human asset exchange, whichforms the core of our personnel development efforts.

Establishing a working group toenvision the future.
We regularly hold HORIBAHIROBA (town square) events thatact as a place for dialogue andcreate opportunities to take thefirst steps towards tacklingchallenges.
Winnie Ho Xin Ni, who was dispatched from HORIBA, Ltd. to HORIBA ABX SAS
on the GHE Program (back row, third from left)

33

34

RIBA-styleHO     Contributing to Society through
HORIBA-style Management

HORIBA’s value creation cycle

Various initiatives focused onhuman assets

Hamburger

HORIBA approach tosustainability

HORIBA approach to sustainability

Promoting comprehensive company-wide initiatives
Approach to
Sustainability

The HORIBA set forth the HORIBA Corporate Philosophy under the corporate motto“Joy and Fun.” It expressed our basic position on improving corporate value in four areas:business operations, customer responsiveness, responsibility to shareholders and investors,
and HORIBARIANs. The HORIBA Corporate Philosophy is also part of the HORIBA
Sustainability Policy. By conducting business in accordance with this policy, we aim toincrease our corporate value and contribute to the realization of a sustainable society.

HORIBA Corporate Philosophy and
Code of Ethics
The HORIBA Corporate Philosophy spells out HORIBA’s
mission in society, and the Code of Ethics outlines eight
guiding principles for doing business. These include
respect for human rights and environmental issues.
Both are written in English and form the basis of
HORIBA’s approach to sustainability.

HORIBA sustainability framework

Board of Directors

Signatory tointernational initiatives
United Nations Global Compact (UNGC)HORIBA, Ltd. has supported the initiativesof the United Nations Global Compact since
we became a signatory in 2012 through theagreement of senior management.

HORIBA

GlobalCollaboration

Place for discussion among
responsible parties
Take the lead in initiatives related to sustainability
Deliberate on matters discussed in forums such as ESG
workshops● Held once a quarter, in principle●— HORIBA Group Sustainability System

Place for discussion among
those engaged in actual work●

Handle with
Headquarters
Functions

Place to learn about trends in sustainability

Held once a month, in principle

rthIncreasing global collaboration

Taking a bidirectional approach tosustainability

Share information within the company, conduct education,and take practical action

Click!

Top-down
approach●●

Web Link
Click!

Sustainability Committee●

Web Link

Code of Ethics

HORIBA established the HORIBA Group Sustainability System in October 2022 inorder to promote initiatives for global sustainability.
It is composed of 16 members selected by the management of group companies inJapan and overseas, and holds global discussions about sustainability.
The kick-off meeting was held online and split into three parts, in the Americas,
Europe, and Asia.
As a global corporation, HORIBA regularly reviews our stance on sustainability.

y, people, and th
t
e
i
ee
oc
s
a
r

HORIBAHORIBA Corporate Philosophy

Place to report to top executives

Fo●

Bottom-up
approach

ESG Workshops

Place for global consultation andinformation sharing
●
●
●

Newly
establishedin October
2022

Attended by representatives from group companies around the world
Sustainability initiatives discussed
Meetings held as necessary

HORIBA Group Sustainability System

We disclose the detailed information related to sustainabilityon the HORIBA website.
https://www.horiba.com/int/company/social-responsibility/home/35

GlobalCollaboration

Held online kick-off
meetings for eachworld region

Web Link
Click!

36

CFO MESSAGE

We intend to further increase corporate value
by pursuing profit through existing businesses
while continuing to invest in growth.
Results of HORIBA– Looking back on the year
ended December 31, 2022 –In fiscal 2022, sales increased by 45.8 billion yen(20.4%) year-on-year to 270.1 billion yen. This was due
to factors such as increased capital expenditure bysemiconductor manufacturers, which significantly
increased our sales to semiconductor production
equipment manufacturers. Thanks to the increase insales and depreciation of the yen, operating income
increased by 13.7 billion yen to a total of 45.8 billion
yen (up 43.1% year-on-year). Sales, operating income,ordinary profit, and net income attributable to ownersof parent all set new records, and ROE reached 15.4%.
In accordance with these results, we decided toprovide a dividend of 245 yen per share for fiscal 2022,
our highest dividend ever. HORIBA has adopted apolicy of setting its total shareholder return ratio, which
includes dividends and share buybacks, to about 30%
of consolidated net profit.
We intend to pursue profit through existing businesses
while continuing to invest in long-term growth. We also
aim to further increase corporate value, and provide
sustainable dividends to owners (shareholders).

Net income and ratio of net income toshareholders’ equity (ROE)
Net income attributable to owners of parent (left)

HORIBA’s basic financial policy(%)

35,00034,072
15.4

14.3
11.5

25,00010.2
20,000

7.8

8.4

8.9

22,313

16,281

15,000

7,396

8,999

10.0

7.6

8.0

13,1886.0

15,481

12,882 12,962
10,00021,311

9.3

14.0
12.0

11.2

10.0

16.0

10,589
4.0

5,000

2.0
0

0

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Dividend payments and total return ratio

Point

02

We conduct proactive investment, with which we
expect to lead to future corporate value.
Additionally, each group company and eachbusiness segment sets and manages its own
capital efficiency targets to maximize HORIBA’s
corporate value.

Continuous
investment fromlong-term
perspective

Flow ofcash

Stable financial baseWe have obtained an “A” rating from
Rating and Investment Information, Inc.
and “A+” from Japan Credit Rating
Agency, Ltd. for our 5th and 6th unsecured
corporate bonds, based on our ability togenerate stable cash flow.

Generating profit
by providing
high-value-added
products andservices globally

Shareholder return

Point

01

03

Link shareholder return to earnings growth

Maintain high ROE

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

As stated in our Mid-Long Term Management Plan, MLMAP2023,
HORIBA aims to achieve ROE of 10% or more in 2023. ROE is one ofour most important management metrics.

Total return ratio (right)
Including commemorative dividends
and share buybacks

Dividend per share (left)Commemorative dividend (left)
(Yen)

(%)

250

245

Target 30% in
total return ratio

200

150

120

Change in dividend policy*
in fiscal 2013 and after

150

90

150

145
130

Approach tocontinuous
investment

116
100

50

Business
operation basedon balanced
management

Improve capitalefficiency to maximize
corporate value

Point

Financing andShareholder return

Businessmanagement

Return on equity (ROE) (right)(Million yen)

30,000Cash flow

Basiccapital policy

50

60
28.2

67

70
30.6

35.4

30.0

30.4
28.8

27.4

27.6

26.8

60

90

85

30

0

2013

2014

2015

2016

2017

2018

2019

2020

Capital expenditure

Approach to M&A

We believe that continuous R&D
investment is the source of ourcompetitiveness, and we invest theequivalent of 10% of our sales in R&D
even during recessions, when many
companies reduce their investment.
And this has allowed us to increase
market share when demand has
recovered.

Regardless of short-term declines in
asset efficiency, we invest for the
future from a medium- to long-term
perspective. In recent years, wehave continued to make high-level
investments to continue to respondto changes in the market
environment, while still scrutinizing
each investment project.

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.

29.7

0

2012

Investment in R&D

2021

Tree of indices of asset efficiency

2022*In fiscal 2013, we switched from a non-consolidated dividend payout ratio, which is basedon non-consolidated net income at HORIBA Ltd., to a total return ratio, which is based on
HORIBA’s consolidated net profit.

Formula:

HORIBA Premium Value

Performance
evaluation

Monitoring

Cost of capital*

Value Driver
Net
sales

Cost ofsales

Selling,
general andadministrative
expenses

New sales channel
development
New product launchWorking capital

Examples of activity
targets by segment

Masao OkawaーOperating income

Utilization

BudgetingManaging Director andGeneral Manager ofFinance and Legal Division=

Fixed assets

Inventory optimization
Lead time reduction
Early collection of accounts receivable*Cost of capital: Invested capital × In-house rate of cost of capital. We apply a unique benchmark that is based on HORIBA’s WACC and comparable with operating income inconnection with our cost of a capital target. Currently, we conduct this evaluation by applying the same rate to all regions and businesses and monitoring degrees of improvement.

37

38

CFO MESSAGE

Company growth and cash management
In 2020, COVID-19 spread rapidly around the world, andthe global economy went into crisis mode. To prepare forsuch crises, HORIBA borrowed 20 billion yen from the bankto increase our level of cash on hand. Interest rates are
currently rising as inflation accelerates in many countries dueto the global increase in energy prices and difficulties withprocurement. However, since we borrowed beforehand, we
have been able to control cost for financing.
In addition, we believe it is crucial to increase on-handliquidity in order to increase working capital as thebusiness expands, make strategic investments such as
acquisitions, and respond to temporary funding needs inthe event of an emergency. Until now, HORIBA has
obtained capital from business expansion and continued
to make investments based on this capital, including
acquisitions. We have also made continuous investments
in companies following acquisition. Strategic investment isalso essential to business expansion in the three fields
identified in our Mid-Long Term Management Plan,

Region-centric global operations

MLMAP2023. And we expect the scale of investment tobe larger than ever.
On the other hand, we should not make investments thatblindly seek to expand without thought for profitability.
HORIBA has grown by acquiring technologies we do nothave and that are directly adjacent to the technologies we
do possess. Going forward, we will continue tocomprehensively evaluate whether investments areworthwhile in the long run. Plus, an increase in slow moving
inventory and stagnant account receivable will end up
weakening the company’s financial base. We aim to build arobust financial structure and pursue asset efficiency while
taking advantage of our solid financial base. HORIBA willcontinue to make appropriately timed investments promptlythat contribute to growth. To this end, the finance division iscoming to play an increasingly important role for things likescrutinizing investment projects and managing cash flows.
We will continue to contribute to the company’s growthfrom a financial perspective.

Cash Flows / Cash and Deposits(Million yen)
160,000

Operating cash flow

120,000

Repaid corporate
bonds, but borrowed
more funds from bank.

40,00020,0000-20,000

Repaid long-term loans, etc.
-40,000

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

In addition to the continuous generation of operating cash flow, the balance of cash and deposits gradually
increased due to improvements in capital efficiency and strategic financing. As of the end of 2022, the balanceof cash and deposits came to 139.8 billion yen—four times higher than in 2012. In order to continue to promptly
make appropriately timed investments that contribute to growth, we will continue striving to build a robust
financial structure.
39

HORIBA actively promotes communication between
headquarters and the management of our overseas
locations primarily through global meetings (Global
Strategy Meeting/Global Budget Meeting) held twice ayear. In 2022, we utilized online communication tools andinvited some of our overseas senior management toJapan for the first time in two and a half years, where weheld meetings in a hybrid format that blended real-world
and online interactions. Participants were able tocommunicate face-to-face not just during meetings, butduring meals and social gatherings after meetings as well.
The experience reaffirmed the importance of such
communication.

HORIBA’s global matrix management

In the finance division, all CFOs at overseas locations arepeople from that country or region. And we build regionalorganizations capable of taking autonomous action rooted
in the local area. Developments like the spread of
COVID-19 and Russia’s invasion of Ukraine are making
the international situation increasingly complex. However,Management
functions

Production
and services

Sales

Plan and executebusiness strategies

Auto
P&E

Medi

Regional
control

R&D

Semi
Scientific

Japan

Asia

Americas

EuropeCommunication with investors

Acquired HORIBA MIRA Ltd.andmade strategic investments such as
construction of HORIBA BIWAKO
E-HARBOR in Biwako Factory.

2012

we will utilize the internal group network we have built up
thus far to overcome difficult situations and provide
appropriate support for business transformation.

Cash and bank deposits

Reduced external borrowing and improved capitalefficiency by establishing local financial subsidiaries
and providing intra-group loans.

100,000

60,000Financial cash flow

Issued new corporate bonds in anticipation of
corporate bond redemption, repayment of long-termloans, and strategic investments.

140,000

80,000Investment cash flow

HORIBA’s global operations are region-centric and respect
the independence of each affiliate. This is why it isimportant for local management to understand HORIBA’s
policies and culture as they carry out operations.

HORIBA conducts IR activities in line with our IR Activities
Policy, determined by the Board of Directors in February
2016. It clearly explains, not only our management
policies and conditions, but our corporate culture. By
working hard to secure the understanding of owners(shareholders), we hope to earn their continued support
as HORIBA fans.
Since the first quarter of 2020, we have held financial
results briefings for investors and analysts online due tothe impact of COVID-19. In 2022, as a full-fledged
recovery from the pandemic began to come into sight, we
held the financial results briefings in a hybrid format, witharound 10 investors and analysts participating in-personat the showroom in the HORIBA Tokyo Branch Office andaround 70 joining online. After the briefing, senior
management had the opportunity to interact directly withinvestors and analysts who visited the Tokyo office andwere able to realize the benefits of holding an event
in-person for the first time in a long while. In the future, wewill leverage the strengths of both real-world and online
interaction, and continue to value building better
relationships with investors and analysts by facilitatingsmooth communication.

Please see our website for our IR
Activities Policy (Japanese only).

2023 is the final year of MLMAP2023. As the technologies
and customer requirements in each field continue to
evolve at a rapid pace, I believe it is important to correctly
understand and evaluate how HORIBA will change andprogress through MLMAP2023.
We will propel our business forward in a way that allows
us to flexibly demonstrate HORIBA’s capabilities in various
industries, without being bound to any particular segment.
We aim to continuously improve our corporate value incooperation with all of our stakeholders.
May 2023

Web Link
Click
here!

40



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 the business environment,(2) improve its managerial monitoring of performance, and (3) enhance compliance-related
arrangements. These objectives have the aim of establishing a world-class governancestructure. At the same time, we are committed to establishing 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 and medium-to long-term
improvement in corporate value.

General Meetingof Shareholders

Corporate governancestructure diagram

Audit &
Audit &
Supervisory Supervisory
Board Members:
Board(Auditors) Number who are external

3

Appoint/
Dismiss

auditors: 2 (1 female)Appoint/
Dismiss

Nomination Remuneration
Committee

Coordinate

Independent auditor

Appoint/
Dismiss

Corporate governance system

Audit
Reply

Board of Directors(Directors)

Consult

9

Directors:

Number who are
non-executive & independent
directors: 3 (1 female)

ReportReport, etc.

HORIBA has adopted a type of organization defined in the Companies Act
as a Corporation with Audit and Supervisory Board. Since its founding in
1953, HORIBA, Ltd. has appointed non-executive directors and audit andsupervisory board members (outside & independent auditors) based on thisorganizational design. The aim of this is to avoid management with aninward-looking bias.

Coordinate

Internal
Auditing

Audit
Coordinate

Coordinate

Financial audit

Compliance Committee
Appoint/Dismiss/Supervise
Audit

IMS*2 Promotion Divisions(Quality, Environmental, Safety & Health,Quality of medical equipment, Business
continuity management)

ReportGroup CEOGroup COO
President

Initiate/Promote

Corporate Officers/
Division Managers

ReportAssist indecision-making

24 in total*

1

Operations Committee
Management
Committee, etc.

Female members: 2
Non-Japanese: 8

DirectDirect business execution

Standards-based
auditsReportReportPromoteReportDirectCommission
business execution

Support/Guide

ReportReport,etc.

Risk Control Committee

Non-executive directors

Group Companies
Inside/OutsideJapannutio ntrol
c
e
co
ex
ss
nal
r
e
e
n
i
Int
Bus

In 2022, the Board met 13 times, had energetic discussions, and madeprompt decisions. HORIBA also introduced a corporate officer system in1998 which enables smooth and agile execution of operations under thesupervision and guidance of directors.

2015

1
Directors: 6

2023

3

Directors: 9

Percentage of non-executive directors
on the Board of Directors

The Audit and Supervisory Board audits and monitors the work of the Boardof Directors in an objective and appropriate manner. To this end, it
cooperates with independent auditors, internal auditors (from the GroupInternal Audit Office positioned directly under the Executive Vice Chairman &Group COO), and non-executive directors.

2015

2023

17%

33%

Director/Audit & Supervisory Board Member skills matrix
Director/
Audit & Supervisory Board Member
nameKnowledge and insight that HORIBA
considers particularly important
Business
Technology
administration

GovernanceThree fields of expertise for Market
Oriented Business as laid out in our
Mid-Long Term Management Plan
MLMAP2023
Energy &Materials &Environment Semiconductor

Bio &Healthcare

Atsushi Horiba
Juichi Saito
Masayuki Adachi
Masao Okawa

HO

RIB

Jo

HORIBA, Ltd. Business Execution Divisions

AC

ya

orp

ora

Op

te

en

nd

Ph

n

an

so

Haruyuki Toyama
Fumihiko Matsuda

ph

dF

air

y/C

od

Tomoko Tanabe

eo

fE

thi

Audit &
Supervisory
Board Members

cs*1 Number of corporate officers*2 IMS: Integrated Management System

41

Jai Hakhu
Hideyuki Koishi

Sustainability Committee

Fu

ilo

Director

Atsushi Nakamine
Keiji Yamada
Sayoko Kawamoto• This skills matrix summarizes the knowledge, insight, and expertise required of the directors responsible for managing the company.
The shaded areas indicate the strengths of each director.
• Governance ensures transparency in management, and targets skills in finance, accounting, and law, which are vital for appropriate disclosure of information to stakeholders.
• All directors have the necessary international management experience required for HORIBA's global operations.
• We review each item as appropriate based on the external environment and company situation.

42

Board ofDirectors

Relationship with owners(shareholders) and investors
Main agenda items in
Board of Directors meetings
With appropriate involvement and advice from non-executive
directors, the Board of Directors freely discusses and exchanges
opinions on matters for resolution, reporting, and matters contributing
to the long-term improvement of corporate value.
The progress of matters resolved by the Board of Directors is reported
on a regular basis, and mechanisms are in place by which directors
can monitor the status of their implementation.

Major matters resolved at and reported to
Board of Directors meetings in 2022
• Investment projects• Business transfers• Financing• Cross-shareholdings• Decisions on executive
personnel matters andremuneration• Resolution on dividends• Sustainability Committee Report• Implementation of the Masao Horiba
Awards• Adapt to stricter export control
regulations• Product quality improvement• Payment of invention rewards• Status of group company management

Matters regularly reported throughout the year
• Progress on matters for resolution
by the Board of Directors• R&D schedules andachievements• Status of sales/production/quality• Organizational
restructuring/major personnel
changes• Business performance

Open general meeting of shareholders

Evaluating the effectivenessof the Board of Directors
From December 2022 to January 2023, we distributed aquestionnaire to all nine directors and to all three audit andsupervisory board members concerning the effectiveness of
the Board of Directors. We received responses from all
twelve people.
The questionnaire contained questions regarding the threeroles and responsibilities of the Board according to BasicRule 4 of the Corporate Governance Code. It asked, “Is theboard adequately involved in directing major courses ofaction,” “Is the board establishing an environment that
supports suitable risk-taking by managerial staff,” and “Is theboard properly fulfilling its roles and responsibilities forsupervision of directors and managerial staff.” Most
responses evaluated these matters as “Adequate” or higher.
In addition, these members evaluated the composition of theBoard (number of members, diversity in terms of gender andnationality, knowledge, experience, ability, etc.) as acceptableat present.
These results were analyzed, evaluated, and reported to theBoard of Directors for discussion.

Director remuneration
At HORIBA, director remuneration is aimed at helping to sustainably increase corporate
value over the long term. The remuneration system is linked to shareholder profits, andis designed to provide a level of remuneration that will attract top managerial talent.
Remuneration for directors consists of base remuneration (regular fixed salary),
earnings-based remuneration linked to the earnings results of each fiscal year, andtransfer-restricted stock-based/post-delivery stock-based compensation linked tomedium-to long-term earnings performance. We set the percentage of eachremuneration based on the maximum limits of remuneration determined by vote at thegeneral meeting of shareholders. In addition, the Board of Directors determines theamount of remuneration for each director in accordance with their position and thescope of their role. Remuneration for non-executive directors, however, consists strictlyof base remuneration (fixed-amount salary), that, given the nature of their assignment, is
not linked to earnings performance. Moreover, the 84th ordinary general meeting ofshareholders held on March 26, 2022, decided to introduce a new stock-based
remuneration system, in lieu of the stock option system, to allocate transfer-restricted
stock and post-delivery stock.
The process for determining director remuneration involves the General Meeting of
Shareholders approving a total compensation amount for directors, then the Board of
Directors deciding on how this is distributed. We also established a voluntary
Nomination and Remuneration Advisory Committee to handle director remuneration. It
consists primarily of independent management members (three non-executive
directors, and two internal directors). This allows us to obtain advice from an
independent standpoint to improve objectivity and transparency in the decision-making
procedures of the Board of Directors.

43

General Meetingof Shareholders

Breakdown of director remuneration(excluding non-executive directors)

Long-term
incentives*Baseremuneration

8%

13%

2022
Director remuneration
ratios(Applies to 6 directors)

Earnings-based
remuneration

Since our 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 greaternumber of owners are able to attend. Afterwards, we host an
informal gathering of shareholders with management. From 2020
to 2022, we called upon shareholders to refrain from attending
the general meeting of shareholders due to the spread of
COVID-19, and also canceled the informal gathering. Instead, we
streamed the meeting online to maintain transparency.

Shareholder returns policy
HORIBA considers one of our most important tasks to be
returning profits to our owners, while still keeping internal reserves
sufficient to maintain a stable management foundation andprovide for expansion of our business. Our basic policy is to makethe total return of shareholders, including cash dividends andshare buybacks, 30% of consolidated net income. We pay
dividends twice a year. In 2022, we paid an interim dividend of 65
yen per share and a year-end dividend of 180 yen per share, for a
total dividend of 245 yen per share. Internal reserves will be used
as working capital for business expansion, investment in facilities
and R&D, and basic funds to improve our balance sheet. This will
be returned to owners through future business development.

Philosophy behind shares held for strategic
purposes other than pure investment
HORIBA believes that collaboration with other companies isnecessary for us to grow sustainably. Toward that end, we decide
what shares to hold based on comprehensive consideration ofmatters including business strategy, the strengthening ofrelationships with business partners, and the maintenance ofrelationships with local communities. Every year, the Board of
Directors confirms whether the amount of shares we hold forstrategic purposes other than pure investment is appropriate.
They also consider whether individual shares are appropriate tohold, by confirming whether they are fit for purpose, and whether
the benefits and risks associated with them are commensuratewith the cost of capital. When we recognize that shares areinappropriate for retention, we consider taking measures such as
share curtailment.

HORIBA has not adopted any anti-takeover measures. Our “Basic
policy on those who control decision-making over the financial
and business policies of HORIBA,” explains our way of thinking
concerning the event that we are faced with a hostile massacquisition of shares. This basic policy was announced in our
Corporate Governance Report.
Please see our website formore information about our
Corporate Governance Report.

Web Link
Click!

Constructive dialogue
We make efforts to clearly explain our corporate policy, financial
condition, and corporate culture to our owners and ask for theirunderstanding and continued support as fans of HORIBA. We
also strive to disclose information based on the perspective offair disclosure, so that various stakeholders have access to thesame quality of information. HORIBA abides by the Basic Policy
for Constructive Dialogue with Shareholders as announced on
our website.
Please see our website for
information about our Basic Policy
for Constructive Dialogue with
Shareholders (Japanese only).

Web Link
Click!

Status of IR-related activities
For analysts and institutional investors■ Financial results briefing: held four times per year
■ Visitations and individualinterviews (within Japan): about 180 times

79%■ Visitations and individual* Starting from 2022 we are introducing a new stock-based
remuneration system which distributes transfer-restricted
stock and post-delivery stock in lieu of stock options.

interviews (overseas):

about 120 times

For individual investors

For more information on director remuneration,please see our Securities Report (Japanese only).

IR Meeting

Web Link

Anti-takeover measures■ Briefings, etc.:

held about two times
per year

Click!

44

List of Management Members(as of April 1, 2023)

Risk management
Risk management system —Three Lines Model

SubmitRisk management system

Board of Directors,
Operations Committee
Management Committee,
Global Committee
Third line
Independent verification capabilities
Group Internal Audit Office(Internal Auditing)Monitoring

Second line
Risk monitoring capabilities
Management departments such as the
Corporate Control Dept., Finance andAccounting Dept., Legal Affairs Dept.,
and Administration Dept.

First line

Monitoring

Primary risk management
Five segments (business departments)

Risk

We have created a risk management structure known as the Three Lines
Model. The first line, HORIBA’s five segments (business departments), provides
active risk management. The second line, management departments, suchas the Corporate Control Dept., Finance and Accounting Dept., Legal Affairs
Dept., and Administration Dept., provides risk monitoring capabilities. And
the third line, the Internal Audit and Group Internal Audit offices, provides
independent verification capabilities. Our business departments andmanagement departments are always aware of the individual business risksboth inside and outside Japan. When appropriate, they report importantmatters at the Global Strategy Meeting/Global Budget Meeting which bring
together the Board of Directors, Operations Committee, Management
Committee, and the management of our locations outside of Japan. This
ensures that senior management can make decisions and share information
in a timely manner. In addition, the Internal Auditing department periodicallymonitors the effectiveness of the risk management system, and the way thebusiness departments and management departments are handling risks,from an independent standpoint. When necessary, it reports its findings to theBoard of Directors and Audit & Supervisory Board.
We also formulated the Basic Rules for Group Risk Management to strengthen ourrisk management system. These rules classify risks into the following categories:
risks for each segment, risks related to business, risks related to development andmanufacturing, and risks related to finance. They also establish the management
system for these risks, and the system of responsibility in the event of a crisis. We
have also established the HORIBA Group Risk Control Committee, which includes
our major group companies in Japan.

The shaded areas of the risk map shown on the rightindicate the risk items that HORIBA has identified as
critical risks.
These critical risks are broadly divided into “risks foreach segment” and “risks for the entire company.” Thecritical risks facing the entire company are listed in thetable on the right. We have also disclosed these risks in
our Securities Report.

Critical risk

He has been invited to serve as a member committees such as the Ministryof Economy, Trade and Industry’s Industrial Structure Council and
Manufacturing Industry Committee, the Cabinet Office’s Advisory Panel on
the Modalities of Government and Administration. He has also served as
Chairman of the Japan Electric Measuring Instruments Manufacturers’
Association and President of the Japan Analytical Instruments
Manufacturers’ Association. At present, he devotes himself to stimulating
industry and the local economy by serving as Vice Chairman of the Kansai
Economic Federation, Vice Chairman of the Kyoto Chamber of Commerceand Industry, and Chairman of the Kansai Science City Construction
Promotion Conference.
He was awarded the L’Ordre National du Mérite (Officier) in 1998 and theL’Ordre National de la Légion d’Honneur (Chevalier) in 2010 by the Frenchgovernment, in recognition of his contributions to the development ofscience, technology, and industry in France. He was also awarded a 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 2019from the Japanese government.

Juichi Saito
Executive
Vice Chairman &Group COO

3
Degree of impact on operations

To identify critical risks, the business and management
departments selected individual risks for HORIBA,
based on the risk items specified in the HORIBA Grouprisk management regulations. They scored each risk ona three-point scale according to its likelihood of
occurrence and the impact on operations.Then, theycreated a risk map by organizing the risk items they hadscored. This was then deliberated on by the HORIBAGroup Risk Control Committee.

45

Chairman &Group CEOHORIBA risk map

Business and other risks

Please see our website formore information about
our Securities Report(Japanese only).

Atsushi Horiba

2• Risks related to the internationalsituation• Risks posed by changes in
performance and financial position due
to acquisitions and alliances

Web Link• Risks related to information security
Click!

1
2
Likelihood of occurrence

3

HORIBA critical risks (Risks facing the entire company)• Risks related to currency exchange• Risks related to intellectual property
rightsJuichi Saito joined HORIBA, Ltd. in 1982. After a few years as an electricalengineer gaining experience designing automotive emission testing systems,
he was transferred to the U.S. where he was in-charge of sales and service
for the Semiconductor and Automotive sectors. He was then assigned to
new product planning for the Scientific and Process & Environmental sectors
at our U.S. headquarters in Irvine. Upon his return to Japan in 1992, heserved as General Manager of Automotive R&D. In 1998, he moved back to
the U.S. and went on to become President of HORIBA Instruments
Incorporated in 2002. In 2004, he moved to HORIBA STEC Co., Ltd., where
he took charge of strengthening the Group’s Semiconductor segment. In
2010, he returned to HORIBA, Ltd., where he was appointed Executive Vice
President in 2013, and Executive Vice Chairman and Group COO in 2018.
Since 2021, he has also been Chairman of Supervisory Board of HORIBA
Europe Holding SASU in France.
In addition, he serves as Chairman of the Japan Electric Measuring
Instruments Manufactures Association, Vice Chairman of the Japan
Scientific Instruments Association, and as President of the Kyoto Scientific
Instruments Association.

1

0

In 1971, Atsushi Horiba joined OLSON-HORIBA Incorporated, a U.S. joint
venture of HORIBA, Ltd. In 1977, he returned to HORIBA, Ltd. after receivinga master’s degree in Electronic Engineering from the University of California,
Irvine Graduate School. He was appointed President in 1992, and has
concurrently served as Chairman, President and CEO since 2005. In 2018,he was appointed Chairman and Group CEO.

• Risks related to rises in raw materials
prices and supply disruptions• Risk of impairment loss for fixed assets• Risks related to pandemics• Risks related to climate change• Risks related to business and humanrights

Masayuki Adachi,
Ph.D.
(Doctor of Engineering)President & COO

Masayuki Adachi joined HORIBA, Ltd. in 1985. He worked to develop new
products for the Engine Measurement Systems Division, before serving as
Department Manager of R&D, General Manager, and Corporate Officer. He
then moved to the U.S. in 2007 as president of HORIBA International
Corporation (now HORIBA Instruments Incorporated (the U.S.)). There heexperienced the difficulties arising from the Global Financial Crisis in the
U.S. After returning to Japan in 2011, he was appointed General Managerof the R&D Division, which directs the R&D departments of all segments.
He joined the board in 2014, and served as President of HORIBA Jobin
Yvon SAS (now HORIBA FRANCE SAS) and Chair of the Management
Supervisory Committee. He became Senior Managing Director of HORIBA,
Ltd. in 2016, and has served as President and COO since 2018. As
President of the Japan Analytic Instruments Manufacturers’ Association,
Chairman of Industry Memberships to Create the Future with RIKEN, andFellow of the Society of Automotive Engineers International, he has
contributed to the advancement of the science and technology related toanalysis and measurement, and to the promotion of science andtechnology in general, as well as industrial and economic development.
46

List of Management Members(as of April 1, 2023)



Masao Okawa
Managing Director  

Masao Okawa joined the Bank of Japan in 1988. Before joining HORIBA,
Ltd. in 2017, he served as General Manager of its Kyoto Branch, Chief
Representative of its Frankfurt Office, and on loan to Harvard Law School(LL.M.) and the Bank for International Settlements (Basel, Switzerland). As
General Manager of Finance and Legal Divisionat HORIBA, he has used theknowledge and global experience in finance and governance he gained at
the Bank of Japan to build a global financial strategy. This included
improving financing efficiency through financial holding companies outsideof Japan, and working to strengthen compliance and corporate
governance.

Haruyuki Toyama
Directors (Non-executive)
Independent Director

Haruyuki Toyama joined the Bank of Japan in April 1982. He graduated from the
University of California 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, andsubsequently 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), and serving as amember 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, he registered as a lawyer in 2015. In the same
year, he became an Outside Director of Hitachi Construction Machinery Co. Ltd.
(scheduled to leave office at the General Meeting of Shareholders on June 26,
2023*). He joined the Iwata Godo law office in 2019 and brings a wealth ofknowledge and experience in the field of international finance. He has been a
Non-executive Director of HORIBA, Ltd. since 2021.

He also actively contributes to the vitalization of economy and industry byserving as a director of the Kyoto Association of Corporate Executives andas a director of the Tokyo Scientific Instruments Association.

*He left office at the General Meeting of Shareholders on June 26, 2023.

Jai Hakhu, Ph.D.

(Doctor of Engineering)

Director

Jai Hakhu built up experience as Vice President at both Rockwell
International Corporation and Varian Semiconductor Equipment Associates
Inc. before working as Corporate Vice President and General Manager
at Intel Corporation. In 2010, he joined HORIBA, Ltd. as an Executive
Corporate Officer. He has been a Director since 2022.

Fumihiko Matsuda, Ph.D.
(Doctor of Medicine)

Directors (Non-executive)
Independent Director

He has held a number of important positions in our group companies outsideof Japan, including Chairman & CEO of HORIBA Instruments Incorporated,
President of HORIBA ABX SAS (France), and Chairman of HORIBA India
Private Ltd. He has also worked as President and CEO of R.C. International
LLC, a Chancellors Roundtable Member at the University of California, Irvine,and on the Board of Directors at both Montpellier University of Excellence(MUSE) and the University of Montpellier (UM). In addition to his extensive
knowledge based on management experience at global corporations, he has
led HORIBA’s Medical-Diagnostic Segment in the United States, France, andIndia, and contributed to various aspects of HORIBA’s global operations.

Hideyuki Koishi
Director

Hideyuki Koishi joined STEC Inc. (now HORIBA STEC Co., Ltd.) in 1985.
Having gained experience in Sales Division at STEC Inc., and in roles suchas Taiwan Branch Manager and International Sales Division Manager, hemoved to the U.S. in 2006 as Executive Vice President of STEC
Instruments Inc.(the U.S.). After returning to Japan in 2010, he served as
Managing Director and Executive Vice President of HORIBA STEC Co., Ltd.
before being appointed President in 2016. He also became President of
STEC Korea, Ltd. that same year. He has served as an Corporate Officer
and Senior Corporate Officer of HORIBA, Ltd. since 2012, and became a
Director in March 2023.
Starting in 2016, he has contributed to the sustainable growth of the global
electronics design and manufacturing supply chain as a member of the
SEMI Japan Regional Advisory Board.

47

Professor Fumihiko Matsuda obtained his Ph.D. in medicine from Kyoto
University Graduate School of Medicine in 1990. After working as an assistantprofessor at the Center for Molecular Biology and Genetics and the Faculty of
Medicine at Kyoto University, he joined the Centre National de Génotypage(CNG) in Evry, France in 1998, as the head of gene identification. He thenreceived a joint appointment as a professor at the Kyoto University Graduate
School of Medicine in 2003, and divided his activities between Kyoto and Parisfor five years as he pursued his research in genomic medicine through the end of
2007. In 2008, he became the director of the Center for Genomic Medicine at
the Kyoto University Graduate School of Medicine, and since 2020, has served
as principal assistant to the president of Kyoto University.
Professor Matsuda has created two spin-off bio-venture companies,
GenoConcierge Kyoto, Inc. in 2018 and RADDAR-J for Society Inc. in 2020. He
serves as a Director (Chief Advisor) of both companies, contributing to active
collaboration between academia and industry. He has been a Non-executive
Director of HORIBA, Ltd. since 2021.
He also devotes himself to cultural exchange between Japan and France
through involvement in artistic and cultural activities. In recognition of hisachievements, contributions, and efforts to date, he received the Chevalier del’Ordre National du Mérite of the French Republic in 2021. In January 2023 he
was appointed Representative Director and Executive Director of the Foundation
Pasteur Japan.

Tomoko Tanabe, M.D.
Directors (Non-executive)
Independent Director

Dr. Tanabe graduated from the Kyoto Prefectural University of Medicine (KPUM)
in 1996. After completing one-year internal medicine internship at the University
Hospital at KPUM, she became licensed to practice medicine in the U.S. where
she moved in 1997. During her 12-year stay in the U.S., she engaged in clinicalmedicine and medical education at the Perelman School of Medicine of the
University of Pennsylvania, and taught at the University of California San Diego
School of Medicine. Upon her return to Japan, she joined the Shinyukai Medical
Group where she was first put in charge of women’s health at Oike Clinic in
2009. She became a member of the board at Shinyukai Holdings in 2010, and in
2018, became the president of the Kyoto Medical Club. She is also currently avisiting professor in the Departments of Physiology and Integrated Physiology at
the Kyoto Prefectural University of Medicine (KPUM), deputy director of Oike
Clinic and head of the Ningen Dock Center. In June 2023, she also became oneof the directors of the Japan Chapter of the American College of Physicians. Dr.
Tanabe was appointed an Audit and Supervisory board member of HORIBA, Ltd.
in 2020, and will serve as a Director from 2023.
Dr. Tanabe believes strongly in a holistic approach to clinical medicine, primarily
focusing on preventive medicine and continuity of care. She also has a keeninterest in promoting the careers of women and works to advance support forchildcare. In 2010, she was one of the five founding members of the Center for
the Promotion of Gender Equality at the Kyoto Prefectural School of Medicine.
48

List of Management Members(as of April 1, 2023)   

Atsushi Nakamine
Audit & Supervisory
Board Member(Standing Auditor)

Keiji Yamada
Audit & Supervisory
Board Member (Outside)
Outside &Independent AuditorAtsushi Nakamine joined HORIBA, Ltd. in 1978. He worked in departments
related to accounting and corporate finance, and built up his career at
HORIBA Europe GmbH in Germany. Since 1995, he carried various projects
to promote new business development, such as business alliance,
acquisition, corporate foundation. In 2001, he became Executive Vice
President & COO of ABX S.A. (now HORIBA ABX SAS (France). He wasappointed a Corporate Officer of HORIBA, Ltd. in 2002, and in 2005,
became President & CEO of ABX S.A. Then, in 2008, he also became
President of the newly established HORIBA Europe Holding SASU (France).
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 serve as an Audit & Supervisory
Board Member in 2020.

Keiji Yamada joined the Ministry of Home Affairs (now the Ministry of Internal
Affairs and Communications) 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 fourterms as Governor of Kyoto Prefecture starting in 2002 and four terms 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 and Advisor to the President (present Special Advisor to the
President) at Kyoto Sangyo University since 2018. He became a member ofthe Board of Directors in 2021.



Executive Corporate
Officer

Takashi Nagano

Chairman of Supervisory Board of HORIBA Europe
Holding SASU in France
Chairman of HORIBA KOREA Ltd. (Korea)
Automotive Board member

Senior Corporate
OfficerGeorge Gillespie, Ph.D.

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

Automotive Board Leader

Dan Horiba

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

Hiroo Chihara

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

Yasuo Yamashita

General Manager of General Administration Division

Hiroshi Nakamura, Ph.D.

General Manager of R&D Division

Toshiya Higashino

President & COO of HORIBA Instruments Incorporated (U.S.)

Laurent Fullana

President of HORIBA FRANCE SAS

Stuart Knight

President of HORIBA UK Ltd.

Rajeev Gautam, Ph.D.

President of HORIBA India Private Limited (India)

Arnaud Pradel

General Manager of HORIBA ABX SAS (France)

Dale Poole

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

Tadao Nakamura

In charge of Process & Environmental business

Hiroyuki Urabe

Director of Sales at HORIBA Europe GmbH (Germany)

Yuko Kimura

Chief Director & President of HORIBA INSTRUMENTS (SHANGHAI) CO., LTD.

(Doctor of Engineering)

Corporate Officers

In 2020, he was appointed an Audit & Supervisory Board Member of
HORIBA, Ltd. He also serves as an outside director at Kawasaki Kisen
Kaisha, Ltd., TOSE CO., LTD., and Nitto Pharmaceutical Holdings, Ltd.
He is the President of the Kyoto Culture Foundation, which engages infinancing and enlightenment activities related to the protection of culturalproperties. It aims to foster more abundant creation and development of
Kyoto culture, which has long been at the core of Japanese culture.

(Doctor of Bio-Technology)

Chief Director & President of HORIBA (China) Trading Co., Ltd.
Chief Director & President of HORIBA Technology (Suzhou) Co., LTD.

Sayoko Kawamoto
Audit & Supervisory
Board Member (Outside)
Outside &Independent Auditor

Sayoko Kawamoto joined AMS Corporation in the year 2000 and now
serves as a Director of the company. In 2010, she also became a Directorof Ayaha Corporation. In 2022, having served as Deputy General Managerof the General Affairs Division and Deputy General Manager of the Business
Management Division, she was appointed to Vice President andRepresentative Director of the company. She was appointed an Audit andSupervisory Board Member of HORIBA, Ltd. in March 2023.
She has extensive experience in management of a corporate group withvarious businesses including retail, manufacturing, real estate, hotels, andgolf courses. She also serves as Director of the Kawamoto Education andWelfare Promotion Association, which aims to foster the sounddevelopment of young people by promoting education in schools andsociety, as well as improving culture and contributing to the development ofeducational administration and enhancing welfare promotion activities.

Declan AllenManaging Director of HORIBA MIRA Limited.(U.K.)

Sal Atzeni, Ph.D.

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

Kentaro Nishikata, Ph.D.

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

Hitoshi Motokawa

General Manager, Finance and Legal Division Responsible for Financial Control(Doctor of Analytical Chemistry)(Doctor of Engineering)

Junior Corporate
Officers

Maki Moriguchi

Masashi Nishimura
Haruhito Mori

Kazuya Tsurumi
Junichi Tajika

49

Deputy General Manager of General Administration DivisionCorporate Officer at HORIBA Advanced Techno Co., Ltd. (Japan)
Deputy General Manager of Energy & Environment Division
General Manager of Energy & Environment Division
President of HORIBA KOREA Ltd. (Korea)

50

Investors’ Guide

Business overview

HORIBA’s five measurement businesses
Automotive
segment

Emission measurement systems

Major products andmarket share of each
(Note: Market share for each product is
HORIBA’s estimate.)

Semiconductor

Scientificsegment

segment

Hematology analyzers

Mass flow controllers

Raman spectrometers

Sales composition
ratio

Global market
share

Sales composition
ratio

Global market
share

Sales composition
ratio

Global market
share

Sales composition
ratio

80%

38%

50%

36%

7%

68%

60%

83%

30%

22%

Chemical concentration monitors

pH meters

Driveline test systems
Global market
share

Sales composition
ratio

15%

3%

• Brake test systems• Fuel cell test systems• Battery test systems

Stack gas analyzers

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

Share ofsegment sales(For all water
quality analyzers)

30%

36%

• Vehicle development
engineering• Water quality analysis and examination systems• Lease andmanagement of R&D
facilities• Air pollution analyzers

13%• Environmental radiation meters• Process measurement equipment• Reticle/mask particle detection systems• Residual gas analyzers• Clinical chemistry analyzers• Vaporizers• Blood glucose analyzers

Medical testing centers

Government agencies
Manufacturers

Development of new gasoline, diesel,
alternative fuel, and electrified powertrains

Measurement of drinking water, wastewater,and gaseous emissions
Monitoring of production process
Research and development

Capital spending and R&D investments
by the automotive industry

80%• Immunology analyzers

Electric power companies

Changes in emission regulations

Sales composition
ratio• Hematology analyzers

Automotive and automotive component
manufacturers
Research institutions
Universities/Government agencies

Certification and quality control of completed
and in-use vehicles

Global market
share• Hematology and CRP analyzers• Testing engineering

Development engineering

51

segment

Market sharein Japan• Engine test systems

Major risks
andopportunities

Medical-Diagnostic

Sales composition
ratio• Emission measurement
for in-use vehicles

Product applications

segment

Global market
share• Onboard emission
measurement systems

Major customers

Process & Environmental

Changes in environmental regulations bygovernment agencies
Developments in energy efficiency
improvement at factories and power
generation plants

Market sharein Japan

Sales composition
ratio

50%

8%

• Water quality analysis• Fluorescenceand examination
spectroscopy/
systems
fluorescence lifetime
spectroscopy• Particle-size distribution
analyzers• Optical components;
spectrometers and• X-ray fluorescence
detectors
analyzers• Gratings• Elemental analyzers

Manufacturers/Research institutions

Small-to medium-sized hospitals

Semiconductor production equipment
manufacturers

Physicians in private practice

Semiconductor device makers

Electric power companies

Diagnostic testing

Controlling flow of gases and liquids,
monitoring cleaning fluid concentrations insemiconductor manufacturing processes

Research and development

Quality control inspections of semiconductors
and LCDs

Criminal forensics

Changes in total healthcare expenditurescaused by changes in population andother factors

Capital spending of semiconductor
manufacturers and others in association withfluctuating demand for semiconductors

Changes in R&D budgets at government
agencies, universities, and research institutions

Changes in medical insurance systems in
different countries

Production trends of manufacturers ofsemiconductor production equipment

Medical checkup

Universities/Government agencies

Product quality testing

Changes in R&D spending and capitalspending for production in the private sector

Automotive

Process &Environmental

Medical-Diagnostic

Semiconductor

Scientiﬁc

P.53

P.54

P.55

P.56

P.57
52

Investors’ Guide

Business overview

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

Process & Environmental segment

2022 results
Sales by region

Sales by business
ECT*2 business 19%

Japan 25%

Americas 12%

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

2022 results
Sales by business
Stack gas analysis
36%

Others
12%2022
Net salesEmissionbusiness54%Europe
42%

Asia
21%

*1 Mechatronics (MCT): measurement instruments for vehicles*2 Engineering Consultancy & Testingbillion yen

120.0

120.0
Planned value set in the Mid-Long Term Management
Plan MLMAP2023, announced in August 2019

15.0

12.0

55.0

40.0

5.8

79.0
63.9 61.2

67.5

6.4
5.0

4.4

4.2

3.5
2.4

0.5

-0

0

*3 HORIBA’s estimate

13

10.0

14

15

16

17

18

19

20

21

-0.6
22

Fore- Planncast ed

0
-1.0

2023

• Increased expenses due to higher procurement prices and investment in growth areas• Growing demand for electrification and hydrogen energy
Segment sales increased due to higher sales in our MCT and ECT
businesses. In terms of profit, we recorded an operating loss owing
mainly to an increase in expenses due to expanded investments ingrowth areas, as well as rising purchasing prices. Meanwhile, we havebegun selling high-precision hydrogen gas measurement equipment
to contribute to the area of hydrogen energy. Demand in Europe isalso growing for electrolyzer development evaluation systems andproduction inspection systems which generate hydrogen for renewableenergy. So, we are strengthening our ability to supply such equipment.
In the area of connected and autonomous driving, we have begun
full-scale operation of our comprehensive development and engineering
facility at HORIBA MIRA Ltd. in the UK. We have established aframework for providing complex simulation testing and engineering
services, and continue to carry out research and development into new
products and services that can respond to the customers’ needs ofdeveloping autonomous driving technologies.



Launched the SPCS* -ONE Solid Particle Counting System*4 SPCS: Solid Particle Counting System

53*5 Dust generated by the wearing of brakes and tires*6 Solid Particle Number

Operating income (billion yen)

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

28.0

3.0

Operating income plan

25.0 2.8
22.5
20.0

2.0

14.7

16.4

19.3 19.5
16.7

16.7 17.4

2.5
2.0

2.1

1.9

2.0

1.7

1.6

1.5
10.0

18.3

20.2

1.6
1.0

1.2
1.0

Fore- Planncast ed

0

13

14

15

16

17

18

19

20

21

22

0

2023

• Accelerated expansion of process measurement business in industrial sectors• Demand related to environmental regulation remained strong
Mainly due to expanded demand for manufacturing process
measurement, sales increased for stack gas analyzers in the Americas
and Japan and water quality systems in Japan and Asia. This led toincreased sales and profits. Meanwhile, in the field of gas
measurement, we have been actively developing automatic
monitoring systems for Airborne Molecular Contamination (AMC) for
use in cleanrooms. We have also developed a measuring device thatuses our original gas analysis technology IRLAM ™ *1 to monitor the

detoxification of gas before it is released into the atmosphere fromsemiconductor production processes. In the area of water quality
measurement, we have released residual chlorine concentration
monitor that enhances food hygiene management, and gel-filled
self-cleaning pH electrodes that make wastewater and sewage
treatment processes more efficient. We will help to reduce the burden
on customers in managing manufacturing processes.
*1 IRLAM is a trademark or registered trademark of HORIBA, Ltd. inJapan and other countries

Launched gel-filled self-cleaning pH electrodes

4

SPCS Series continuously measures solid particles emitted from sources such as vehicle engines. Since its release in2009, it has been used in automotive development sites to continuously meet the measurement needs required by thelatest regulations. This product can effectively measure brake dust, tire dust*5 and particles with diameters of 10 nm or
more (SPN*610), which is being considered for regulation under Europe’s new Euro 7 emission regulation. In addition,
newly adopting our original comprehensive measurement platform, the HORIBA ONE PLATFORM, enables central
management of measurements data from multiple devices. By enabling efficient operation, we are contributing to digitaltransformation (DX) at research and development sites.

Net sales (billion yen)
30.0




49.5

73.3
64.2 62.2 7.6 7.7

81.0

We supply a broad range ofanalytical and measurement
instruments for analyzing air
pollution, water quality, and soil quality.
HORIBA products play an important role inmany industries. They enable themeasurement of gases and the monitoring ofindustrial wastewater in energy and heavy chemicalindustries like electric power, steel, andpetrochemicals. They also allow for management of air
quality of cleanroom and purified water for semiconductoruse, and the monitoring and control of water quality in the
medical, food, and cosmetics sectors. In essence, the analyticaland measurement technology we provide helps to preserve theglobal environment, and leads technological innovation in supportof public safety, security, and health. This is how we are helping toachieve a sustainable society.










Operating income plan

79.6

Asia
25%

Net sales and operating income

Operating income (billion yen)







Net sales (billion yen)

Water quality
36%

Air pollution
16%

Net sales and operating income

80.0

Japan
48%

22.5

 
 
 
 







billion yen

HORIBA’s automotive Emission
Measurement Systems (EMS) holda global market share of 80%*3.
HORIBA provides manufacturer R&D andquality control units with complete testing
and measurement solutions. These include test
systems for engines, chassis, powertrains, brakes,
catalytic converters, batteries, and fuel cells, as wellas electrolyzer development evaluation systems. We arealso actively developing our Engineering Consultancy &Testing (ECT) business, which supports development of
next-generation mobility technologies for applications such as
electrified vehicles, autonomous driving, functional safety, andcybersecurity.

Americas13%
Europe 14%

2022
Net sales

67.5
MCT*1 business
27%

Sales by region

SPCS-ONE Solid Particle
Counting System

In plants with wastewater and sewage treatment facilities, it is particularly important to control the pH of processes thatuse activated sludge*2, in order to make wastewater and sewage treatment processes more efficient. This product is thefirst of its kind to use*3 antifouling technology. It combines photo-catalyst technology (porous titanium oxide) developed
based on insights gained through joint research by HORIBA and Mie University, with HORIBA’s unique technology which
incorporates a UV-LED (ultraviolet light-emitting diode) into the electrode. Together, these produce an antifouling effect.
This greatly reduces the frequency of electrode maintenance, and decreases the workload on customers who previously
had to perform cleaning and calibration work every day. Thus, it helps to address the issue of labor shortage at sites.
*2 A collection of microorganisms that serve to purify water by breaking down dirt in wastewater*3 As glass electrode pH meter (as of October 2022, based on our research)Gel-filled
self-cleaning pH
electrodes54Investors’ Guide

Business overview

Medical-Diagnostic segment
Contributing to healthy lives
through in-vitro diagnostic systems

Semiconductor segment
Contributing to yield enhancement andtechnology innovation in semiconductor
manufacturing processes with HORIBA’s
flow control and measurement
technologies

2022 results
Sales by region

Sales by business
Immunology
7%

Others 2% Americas 22%

Japan 21%2022
Net sales

Hematology
68%

Europe
33%

Asia
24%

40.0

26.0 25.3

31.0

25.8
4.0

4.0

2.8
1.9

1.8

Operatingincome plan

1.3

1.7

-0

0.1

0

-0.4

13

14

15

16

17

18

19

20

0.5
0
Fore- Planncast ed

21

22

2.0

2023

-1.0

• Increased sales of hematology analyzers, clinical chemistry analyzers, and reagents• Promoted the development of new products with the aim of expanding our businessin the global market for our core products
Increased in sales of hematology analyzers in Japan and Asia, as well
as clinical chemistry analyzers and reagents in the Americas, led toincreased segment sales. In terms of profit, although sales of reagentsincreased year on year, an operating loss was recorded owing mainly
to an increase in rising purchasing prices.
During this period, we introduced new models of automatedhematology and CRP*2 analyzers in Japan. This series hold the top
market share in Japan, and is capable of fast, reliable testing. With the

spread of COVID-19, demand has grown for accurate,high-performance testing. We are also working to further expand ourbusiness from hematology analysis to immunology and biochemistry.
*2 CRP: C-Reactive Protein. A type of protein that whose count increases in blood serum when
there is acute inflammation or tissue damage in the body, and thus is a typical marker of
inflammation. In reacts quickly and sensitively to inflammation in cells and tissues, making it
possible to ascertain the degree of inflammation. Moreover, since it decreases rapidly when
the pathological condition improves, it is useful for diagnosing pathologies, offering prognosis,
and observing therapeutic effects.

*HORIBA’s estimate

Net sales (billion yen)
120.0

Operating income (billion yen)
48.0

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

115.0
114.0

100.0

87.0

42.0

80.0

53.3
40.0

0

38.5
77.0

60.0

20.0

40.0

24.1
4.8
13

28.9
6.4
14

35.3

38.8

57.7

15.6 17.0

56.9

28.0

24.0

47.1

16.0

17.7

14.0
9.4

Operatingincome plan

10.7

9.6

Fore- Planncast ed

15

16

17

18

19

32.0

20

21

22

8.0

0

2023

• Expanding capital investment by semiconductor manufacturers significantly increased demand• Demand for mass flow controllers grew for use in solar panel and artificial diamond production
Sales to semiconductor production equipment manufacturers
increased significantly, in response to expansion of semiconductor
manufacturers’ capital expenditures. This led to higher segment sales
and profits. In the meantime, we have been working to increase
response speed performance and improve flow rate accuracy on our
primary products, mass flow controllers. We also saw demand growfor general industrial mass flow controllers equipped on the film

formation equipment used in the production of solar panels andartificial diamonds. So, we are working to strengthen global
deployment. Moreover, we are developing applications for
cutting-edge processes that use reticle/mask particle detection
systems, and enhancing their customization to meet customer needs.

Introduced GR-500 Series Wafer Back Side Cooling System

Released “Yumizen H330 CRP” Automated Hematology and CRP Analyzer

Our automated hematology and CRP analyzers have been at the forefront of global medical care for more than 20 years,
since they were first*3 introduced to the world in 1998. This product allows anyone to easily and consistently measureconstituents in blood with high accuracy and without coming into contact with blood. This helps to reduce the risk ofinfection for healthcare workers. It also comes in a smaller footprint than previous models. Due to our high domestic
market share in the field of automated hematology and CRP analyzers, and our position as a industry pioneer, we canreliably support the needs of the market and help to develop better medical care.
Yumizen H330 CRP, Automated55

Mass flow controllers, used in the
manufacturing process (front-end) ofdevices such as semiconductors, are amajor product in the Semiconductor
segment. Our mass flow controllers boast
leading global market share*, thanks largely to
our cutting-edge flow control technology which
contributes to enhanced yield and miniaturization in
the semiconductor manufacturing process. We intend toprovide solutions for responding to technological advancesin semiconductor manufacturing processes, while supplying
measurement equipment such as chemical concentration
monitors and reticle/mask particle detection systems. This willallow us to establish an important position in the growing
semiconductor industry.





*3 Based on our research (As of June 2022)

Japan
29%

Asia 52%

Mass flow controllers 83%







2.4

2.4

8.0

6.0

21.0

20.0

10.0

40.0

29.7

30.0

25.1

Americas13%

Net sales and operating income

Operating income (billion yen)

Planned value set in the Mid-Long Term Management Plan
MLMAP2023, announced in August 201926.8 27.0 27.4 26.5

Europe6%billion yen













*1 Point of Care Testing (POCT): A general term for testing performed at locations close topatients, such as private practitioner offices, diagnostic clinics, hospital wings, andoutpatient clinics.

Net sales (billion yen)

Gas analyzers 1%
Reticle/mask
particle detection
systems etc.
3%114

Net sales and operating income
HORIBA mainly provides
instruments and reagents(consumables) for blood sample testing
to the global market for in-vitro diagnostic(IVD) systems. Our business model for thissegment is based on recurring revenues
generated from sales of reagents. We aim toensure stable earnings from sales of reagents by
expanding our installed base of medical diagnostic
instruments. In particular, HORIBA’s strength lies in small
and medium-sized hematology analyzers for point of caretesting (POCT)*1 in private clinics and hospital operating rooms,
as well as small-to medium-sized hospitals and testing centers.

Chemicalconcentration
monitors
13%

Sales by region2022
Net sales




 
 
 

billion yen

Clinical chemistry,
Blood glucose
23%

Sales by business







29.7

2022 results

Hematology and CRP Analyzer

Wafer temperature control during the semiconductor production process is extremely important for the consistentproduction of high-quality wafers. Our GR Series Wafer Back Side Cooling Systems are mounted in the line that carries
gas to the chamber, and contribute to precise wafer temperature control through stable accurate pressure control of theheat-transfer gas. In recent years wafer temperature control has become increasingly important, not only for the etchingprocess, but for film formation and ion implantation as well. To meet these needs, we have begun to develop and sell
new products equipped with pressure sensors developed in-house, which can control the pressure of trace gases inhigh-vacuum conditions even better than conventional products.

GR-500 Series Wafer BackSide Cooling System

56

Investors’ Guide

Business overview

Corporate Data

Scientific segment
Supporting HORIBA’s coretechnologies and pioneering
cutting-edge fields

Major shareholders (Top 10)

Corporate information
2022 results
Sales by business
Others 2%

Water quality 8%
Particlecharacterization
11%

Americas 29%

Japan 20%

Molecular &microanalysis
35%




Europe
18%

Asia
33%










Net sales (billion yen)

30.0

25.7 26.1

27.7 27.1 26.8

40.0
4.0

4.0

3.5

29.9

1.3

1,283

3.04

Incorporated

Atsushi Horiba

1,082

2.56

January 26, 1953

The Kyoto Chuo Shinkin Bank

830

1.97

The Bank of Kyoto, Ltd.

828

1.96

270,133 million yen (consolidated)

HORIBA Raku-Raku Kai

810

1.92

(Year ended December 31, 2022)

SMBC Nikko Securities Inc.

770

1.83

HORIBA Employee Shareholding Association

760

1.80

Paid-in capital

0.4

0.2

0.7

17

18

19

20

21

22

• Expanded products sales for semiconductor and life science markets• Accelerated development of new products for process measurement*1 As bench-top energy-dispersive X-ray fluorescence analyzer (as of August 2022, based on
our research)

XGT-9000 Series are X-ray Analytical Microscopes that analyzes the types and amounts of elements contained withinmaterials with high accuracy. This product greatly reduces analysis time due to an improved detector and faster signal
processing using our proprietary algorithm (patented*2). And the XGT-9000 Expert is the first in the world*3 to achieve
analysis from the light element boron (B). Being able to analyze boron, an element that is very difficult to detect with X-rays
fluorescence, means more common elements such as carbon, nitrogen, and oxygen can be analyzed with high sensitivity.
Moreover, in addition to inorganic substances such as metals, this single device is capable of analyzing oxides, nitrides,
and organic substances as well. This saves significant time and space, and boosts the efficiency of materials analysis
during quality control and research and development in a wide array of industries such as materials manufacturing.
*2 Japan Patent No.: 6857174, U.S. Patent No.: 10795031, Europe: patent pending*3 As bench-top energy-dispersive X-ray fluorescence analyzer (as of August 2022, based on our research)

8,737

40.07%

Individual
investors /other

92.66%

Stock Price Trend (Closing price each day)Yen
30,000Independent auditor

Yen
12,000

Nikkei Stock Average(Left scale: Yen)

25,000Tokyo Stock Exchange,
Prime Market
Securities Code: 6856

10,00020,0008,000

15,000

6,000

10,0004,000

HORIBA (Right scale: Yen)
5,000

2,000

0

Head
Office

0

2012

2013

TSR*1 Index

Released XGT-9000 Pro and XGT-9000 Expert X-ray Analytical Microscopes

2.09%

Financial institutions,
Securities companies

Held in March

Stock listingsbasic development of metal film thickness gauges for industry using
X-ray fluorescence, and spectrometers for chemical, pharmaceutical,
and semiconductor processes, to meet demand for process
measurement. We are working to strengthen our customer-focusedengineering capabilities on a global scale, as we expand our business
into new areas such as semiconductors and life sciences.

Other companies

Number of
Shareholders

1.12%

42,532,752

December 31

KPMG AZSA LLC



Number ofshares

33.93%

Sumitomo Mitsui Trust Bank, Limited

2023

Financial
institutions,
Securities
companies

19.65%

Foreigninvestors

Transfer agent
0

Foreign investors 4.12%

Individual
investors /
other

6.35%

Annual Meeting of Shareholders

1.0

Fore- Planncast
ed0Distribution by shareholder
Other companies

Number of employees(As of December 31, 2022)

2.0

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

0.9

16

BBH (LUX) FOR FIDELITY FUNDS- SUSTAINABLE WATER AND WASTE POOL

3.0

Operatingincome plan

1.9

15

3.98

Fiscal closing date

1.9

14

1,682

8,432 (consolidated)

35.0

2.5

20.0

13

National Mutual Insurance Federation ofAgricultural Cooperatives(As of December 31, 2022)

22.9

0.9

7.13

Operating income (billion yen)

36.2

1.2

3,011

12,011 million yen (consolidated)

40.0

10.0

Custody Bank of Japan, Ltd.

2 Miyanohigashi-cho, Kisshoin,
Minami-ku, Kyoto 601-8510 JapanNet sales

Net sales and operating income

25.6

13.89

October 17, 1945

Elemental
analysis
16%

27.0

5,867

Foundedbillion yen

Opticalcomponents
28%

57

Shares (Thousands) Percentage* (%)

The Master Trust Bank of Japan, Ltd.

Head Office

Sales by region

36.2

Mainly due to the expansion of demand for products targeted for thesemiconductor and life-science markets, sales of Raman
spectrometers and optical modules increased. This caused sales andprofits to increase. During this period, we developed and launched an
X-ray analytical microscope that is the world's first*1 bench-top
energy-dispersive X-ray fluorescence analyzer in the world to achieve
analysis from the light element boron (B). In addition, we focused on* Percentages of shares are calculated by deducting our own shares (302,553 shares).

Name of shareholder

2022
Net sales

HORIBA’s analysis technology
began with research anddevelopment that lead to Japan’s firstglass electrode pH meter, and has
expanded to include gas analysis using
infrared light, elemental analysis using X-rays,
and Raman spectroscopy and Fluorescence
spectroscopy using optical technology. These
contribute to R&D activities at the frontline of scientifictechnology and help explore the unknown frontiers ofscience. HORIBA’s analyzers are also used widely in industry
for foreign object examination and active ingredient analysis forpharmaceuticals and foods, defect analysis for electronic
components, as well as analysis in wide areas such as forensic scienceand archaeological surveys. While delivering high-end equipment for
research and development, we are also actively developing products for
manufacturing process monitoring, and supplying analysis andmeasurement technology to a wide range of fields.

As of December 31, 2022

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

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

2018

2019

2020

2021

2022

Cumulative

Cumulative

Cumulative

Cumulative

Cumulative

HORIBA

68.3%

112.0%

94.5%

107.1%

95.6%

TOPIX (including dividends)

82.2%

94.7%

99.3%

109.6%

104.1%

Investment period• The TSR in this table is calculated based on the stock price at the end of the fiscal year

XGT-9000 Pro X-ray
Analytical Microscope• HORIBA’s stock price rose after announcing its full-year financial results for 2022. Our TSR at the end of February 2023
was 118.1%, which is higher than TOPIX (109.7%)

58

Financial Data
Net sales by segment
The fiscal year ended
December 31, 2022 saw thesales increase for the second
year in a row. This wasprimarily due to the continued high level of capital
investment by semiconductor manufacturers.

Eleven-year summary

Accounts receivable (AR) and AR turnover (days)

Million Yen
280,000

Accounts receivable (left)

270,133
Scientific

36,239240,000

224,314210,570
195,399 27,754 200,241

200,000

170,898 170,093
160,000

153,065 27,059

120,000

117,609 22,913
20,40680,00022,40040,00024,153

17,861

13,70926,832
14,71153,30035,38638,82827,447

26,56428,93427,037
16,465

26,11725,738138,136 25,627

25,187
17,433

16,75362,20773,3602016

2017

43,23049,52455,001

2012

2013

2014

2015

29,958114,075 Semiconductor

26,82557,78526,01225,335

19,361

19,50079,656

MedicalDiagnostics

25,882

Process &Environmental

22,541

18,337

20,217

63,913

61,24967,524

2020

2021

2022

Automotive

2019

Although we attained record
high profits for fiscal year
2022, operating cash flows
decreased slightly year on
year due to factors such as anincrease in inventory.
On the other hand, thanks tocareful selection of fixed asset
investment projects, free cash
flows increased by 23.2 billion
yen year on year—the fifth
year in a row.

69,818125
116

40,000

125

117

115

Net income attributable to owners of parent (left)

Return on equity (ROE) (right)

59,877

120

34,072
15.4

20,00022,313102

108

50,87390

16,281

15,00010,00020,00040

10,00020

R&D expenses (left)

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

Million Yen
20,000

%
16.0

7.6

8.0

13,188

6.0

5,000

0

0

2017

2018

2019

Operating cash flow

Million Yen

11,986
8.6 10,774
10,0007.8
7.2
10,092
7.8

12,9332020

2021

Free cash flow

28,287

13,395

15,076

10,0005,504

11,455

18,23623,220

7.6

7.1

8.3

7.2

8.0

7.4

-10,427-15,872-20,000-13,1670-30,000

11,349

9,619
8,794

7,240

6,816

3,743

4,279

4,905

0

Net income per share and net assets per share%

416,74216.0

Net income per share (left)

Net assets per share (right)

Yen

Yen

1,200

5,684

6,000

371,585

360,000

315,133
265,920
231,032 239,657
189,269

207,335

5.0

1,000

328,068

800

3,565
8.6

8.2

8.0

600

6.1

2,700

2,929 3,078

5.3

5.9

5.5

5.2

807

4,217

175

213

250

306

308

4,000

3,000

505

386

4.0
200

4,053

529

2,346

4.1

3,826

3,149

400

5.2

5,000

4,827

12.0

277,368

6.4

153,836

60,000

6,110

7,680

Return on assets (right)

Million Yen
420,000

120,000

7,534

10,44012,5652012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Total assets and return on assets (ROA)-10,745-14,016 -14,662

12,834

10,2399,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

300,000-11,029 -12,367

11,6397,882

0180,000

12,496

11,0013,000

240,000-9,875

15,165
13,796

6.9

14,271

15,120Depreciation and amortization

4.0

5,444

1,580

-8,111

15,871

20,605

8,506

6,965

0

-7,891

14,77033,966

26,63819,53620,00035,268

Capital expenditures

Million Yen
18,00012,000Total assets (left)

32,253

Capital expenditures and depreciation
and amortization

6,000

2022

Investing cash flow

0

0

12.0

13,911

8.1

40,00030,00020,00016,309

2.0

2016

40

15,000

5,000

2015

33,085
28,101

60

40,28934,838 35,717

18,585
16,710
16,254
15,594
15,1834.0

2014

53,11449,251

51,6132012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

R&D expenses and R&D expenses to net sales

12,341

7,396

2013

40,0000

10,589

8,999

80

80

83

45,57388

60

15,000

15,481

12,962

12,88287

80

75

60,000100

75,27287

86

81

55,13937,52010.0

21,311

9.3

8.9

8.4

7.8

11.2

10.0

81

100

30,000

12.0

11.5
10.2

16.0
14.0

30,00025,00085

10752,246 54,771
53,724 112
47,411%35,000-10,000

60,152 59,111 59,121

Days

98

97

140

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Million Yen

2012

Cash flows

80,000

0

2018

14.3

We saw net income attributable to owners of parent
increase for the second year
in a row for the fiscal year
ended December 31, 2022.
This was due to factors suchas the increase in operating
income accompanying theincrease in revenue.
This resulted in an ROE of
15.4%.

Million Yen

160

Inventory turnover (right)

20

81,0420

Net income and returnon equity (ROE)Days

80,00050,00029,753

21,035Inventories (left)

Million Yen

60,00087,00447,191

AR turnover (right)

70,000187,080

56,967

16,75464,251

27,170Inventories and inventory turnover (days)

2,000

367

312

1,000

-30,642-40,000

2012

59

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

0

0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

002012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

60

Financial Data

Eleven-year summary
HORIBA, Ltd. and consolidated subsidiaries

2012.122013.122014.122015.122016.122017.122018.122019.122020.122021.122022.12

Profit and Loss
Net sales(Million Yen)

Operating costs and expenses(Million Yen)

Operating income(Million Yen)

Ratio of operating income to net sales
Net income attributable to owners of parent
Ratio of net income attributable toowners of parent(%)(Million Yen)(%)

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

224,314
192,267
32,046
14.3
21,311
9.5

270,133
224,290
45,84317.0
34,072
12.6

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

371,585
83,717
203,68854.8

416,742
71,326240,065
57.6

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
18,236843

35,268-14,662
20,605-4,04533,966-10,745
23,220-22,447

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

12,496
10,44016,710
7.4

12,565
11,34918,5856.9

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

505.05
4,827.06
150.00807.06
5,684.68
245.00

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

11.2
6.1
29.7
333.1
70.4

15.4
8.6
30.4
71.0
72.8

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

8,205
62.8

8,432
63.9

Financial Position
Total assets(Million Yen)

Liabilities with interest(Million Yen)

Shareholders’ equity(Million Yen)

Shareholders’ equity ratio(%)

Cash Flows
Cash flows from operating activities(Million Yen)

Cash flows from investing activities(Million Yen)

Free cash flow

(Million Yen)

Cash flows from financing activities(Million Yen)

Investments, etc.
Capital expenditures(Million Yen)

Depreciation and amortization(Million Yen)

R&D expenses(Million Yen)

R&D expenses to net sales(%)

Per Share Information
Net income(Yen)

Net assets(Yen)

Dividend(Yen)

Other Indicators
Return on equity (ROE)(%)

Return on assets (ROA)(%)

Consolidated dividend payout ratio(%)

Nonconsolidated dividend payout ratio(%)

Overseas sales ratio(%)

Human Assets
Number of employees
Ratio of employees outside of Japan(Employees)(%)

Notes: The monetary amounts shown are rounded down to the nearest million yen.
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 their revenue recognition method to recognize revenue on a completion-date-of-installation or delivery-date basis
under the terms and conditions of the relevant contracts. The amounts in or before fiscal 2015 are not retrospectively revised.

61

2. As of beginning of the fiscal 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). The amounts in or before fiscal 2017 are not retrospectively revised.

62

Into SpaceHORIBA, 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/int/Sky

Our Living Area

Sea

Depths of The Earth