Financial Results for the Fiscal Year 2022

Medium-Term Management Plan

May 13, 2022
IDEC CORPORATION
Securities code：6652
Copyright IDEC Corporation. All rights reserved.

1

Financial
Results
the Fiscal
Overview
of Fiscal forYear Ending
March 31,Year2022 2022

Copyright IDEC Corporation. All rights reserved.

2

Overview
Both net sales and profit made a record high.
Operating income margin of 13.7%, annual dividend of JPY100 withthe addition of anniversary dividend of JPY20.
Net
Sales

Income■Net sales

JPY 70.8 billion (YoY 1.3 times)– As the demand for capital investment of manufacturing industry transferred in a too
exceeded and high level, sales of all regions and all product segments moved strongly.

■Operating income

JPY 9.7 billion (YoY 2.4 times)■Ordinary income

JPY 10.4 billion (YoY 2.5 times)■Net income

JPY 7.9 billion (YoY 2.8 times)– Profit improved significantly YoY due to sales improvement and cost rate decrease.
Dividends■Annual dividend of JPY100 with the addition of anniversary dividend of
JPY20. (Dividends payout ratio is 37.9%)

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3

Consolidated performance [Consolidated statement of income] -1(Unit: million yen)
※Round down to themillions

FY2021
ActualFY2022

Sales ratio

Plan

Sales ratio

ActualSales ratio

YoY

Net sales

53,983100.0%

69,000100.0%

70,789100.0%+ 31.1%Gross operating
income22,78342.2%

29,50042.8%

30,31042.8%+ 33.0%SG&A

18,742

34.7%

20,30029.4%

20,63829.2%+ 10.1%

Operating income

4,041

7.5%

9,200

13.3%

9,672

13.7%

+139.3%

Ordinary income

4,104

7.6%

9,200

13.3%

10,39814.7%+153.4%

Net income attributable toshareholders of parent
company

2,803

5.2%

6,900

10.0%

7,896

11.2%

+181.7%

Earnings per
share(EPS)(before diluting) (JPY)

92.83

－

230.04－246.12－+ 171.29

USD-yen rate (JPY)EUR-yen rate (JPY)
Copyright IDEC Corporation. All rights reserved.

106.10121.88108.00128.00112.40129.91

+6.30
+8.03
4

Changing factors of consolidated operating income
Operating income increased by approximately 5.6 billion yen YoY due to sales
increase, cost rate decrease and impact of exchange, etc.
(unit: million yen) *Round down to the million+6,220+330
Cost rate
decrease- 1,280
SG&A
increase＋360
Impact ofexchange

9,672

4,041

Sales
increase

FY20212021年3月期
Copyright IDEC Corporation. All rights reserved.

FY2022
2022年3月期
5Consolidated performance [Consolidated statement of income] -1
 Recorded the gain of approximately 0.9 billion on sale of idle assets in Japan.
(Unit: million yen)*Round down to the millions

FY2021

FY2022

4,104

10,398

7

911

430

-

3

22

Subtotal

440

933

Loss on liquidation of business214-

Others

79

61

293

61

Profit before income taxes

4,251

11,270Net income attributable to shareholders of parent company

2,803

7,896

Ordinary profit
Gain on sale of non-current assets
Gain on sale of investment securities

Extraordinary income
OthersExtraordinary losses

Subtotal

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6

Consolidated performance [Consolidated statement of income] -2(Unit: million yen)
※Round down to themillionFY2021

FY20224Q (Jan. to Mar.)

1Q (Apr. to Jun.)

2Q (Jul. to Sep.)

ActualSales ratio

ActualActualSales ratio

Net sales

14,845100.0%

17,270 100.0%

17,585100.0%

Gross operating income

6,263

42.2%

7,300

42.3%

7,619

SG&A

4,981

33.6%

4,999

28.9%

Operating income

1,281

8.6%

2,300

Ordinary income

1,454

9.8%

Net income attributable
to shareholders ofparent company

1,213

8.2%

Earnings per
share(EPS)(before diluting) (JPY)

40.47

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Sales ratio

3Q (Oct. to Dec.)

ActualSales ratio

YoY

17,399 100.0%

18,533100.0%+24.8%

43.3%

7,514

43.2%

7,876

42.5%

+25.8%

5,066

28.8%

5,173

29.7%

5,398

29.1%

+ 8.4%

13.3%

2,552

14.5%

2,340

13.5%

2,477

13.4%

+93.4%

2,436

14.1%

2,586

14.7%

2,468

14.2%

2,906

15.7%

+99.8%

1,799

10.4%

1,727

9.8%

1,776

10.2%

2,592

14.0% +113.6%

60.01

57.58

ActualSales ratio

4Q (Jan. to Mar.)

59.22

89.37

7

Net sales and operating income margin (per quarter)(Unit: million yen) *Round down to the millions

Net sales

Operating income margin

FY2019Copyright IDEC Corporation. All rights reserved.

FY2020

FY2021

FY20228

Sales by region(Unit: million yen)
*Round down to themillions (Sales ratio)

FY2021

FY2022YoYJapan

YoY ＋25.4%

Japan

24,638(45.6%)

30,904(43.7%)+25.4%

Overseas

29,344(54.4%)

39,885(56.3%)+35.9%

Americas8,509(15.8%)

11,532(16.3%)+35.5% As the demand of semiconductor-related,
automobile-related, machine tool, androbot industries, etc. has recovered
significantly
andexpanded
rapidly,
received order of main industrial switches
increased at the too exceeded level, andthe sales expanded.

8,869(16.4%)

11,747(16.6%)+32.4%

Overseas

Asia Pacific

11,965(22.2%)

16,604(23.4%)+38.8%

Total

53,983(100.0%)70,789(100.0%)+31.1%EMEA(Europe, Middle East,
Africa)Copyright IDEC Corporation. All rights reserved.

YoY ＋35.9%

 As the recovery of demand has
progressed in China and other Asia
Pacific countries, Americas, and EMEA,
sales of each product segment increased.

9Sales by region (per quarter)(unit: million yen) *Round down to the millions

FY2019Copyright IDEC Corporation. All rights reserved.

FY2020

FY2021

FY2022

10

Sales by products(Unit: million yen)
*Round down to themillions(Sales ratio)

FY2021

FY2022

Industrial Switches

25,054(46.4%)

33,191(46.9%)

Industrial Relays &Components

9,803(18.2%)

Automation &Sensing

YoY

Industrial Switches
Sales expanded in all regions due to the rapid expansion of
the demand for capital investment.

+32.5%

Industrial Relays & Components

13,625(19.2%)+39.0%

Sales of control relays have moved strongly in main
Americas and China.

8,203(15.2%)

9,958(14.1%)+21.4%

Safety & Explosion
Protection

6,513(12.1%)

8,908(12.6%)The demand for programmable logic controllers andoperator interfaces has recovered rapidly in Japan,
Americas, and EMEA.

+36.8%

Safety & Explosion Protection

Systems

3,516(6.5%)

3,742(5.3%)+ 6.4%The demand for capital investment has recovered
steadily, and sales of Japan and overseas increased.

891(1.6%)

1,363(1.9%)+53.0%

53,983(100.0%)70,789(100.0%)+31.1%

OthersTotal

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Automation & Sensing

Systems
Sales of control panels for semiconductor and liquid
crystal manufacturing equipment increased in Japan.

OthersSales of environment and energy-relating business haverecovered in Japan.
11

Sales by products (per quarter)(Unit: million yen) *Round down to the millions

FY2019Copyright IDEC Corporation. All rights reserved.

FY2020

FY2021

FY202212Order received(Unit: million yen)
*Round down to themillions

FY2021
Amount of order
received

FY2022
Backlog

Amount oforder received

YoY

Backlog

YoY

Japan

29,163

5,789

46,304+58.8%

18,048+211.7%

Americas

9,187

1,895

14,641+59.4%

5,060+167.0%

8,754

3,150

14,912+70.3%

6,708+112.9%Asia Pacific

10,7593,368

18,594+72.8%

8,048+139.0%Total

57,864

14,203

94,452+63.2%

37,866+166.6%EMEA(Europe, Middle East,
Africa)Copyright IDEC Corporation. All rights reserved.

13Order received (per quarter)
FY2021(Unit: million yen)
*Round down to
the millions

FY20224Q (Jan. to Mar.)

1Q (Apr. to Jun.)

Amount oforder
received

Amount oforder
received

Backlog

Backlog

2Q (Jul. to Sep.)

3Q (Oct. to Dec.)

4Q (Jan. to Mar.)

Amount oforder
received

Backlog

Amount oforder
received

Backlog

Amount oforder
received

Backlog

Japan

8,663

5,789

11,257

8,941

11,712

12,448

12,204

16,06911,12918,048Americas

2,582

1,895

3,530

2,537

3,875

3,520

3,547

4,459

3,688

5,060

(Europe, Middle
East, Africa)

2,359

3,150

3,891

4,309

4,613

5,923

2,677

5,853

3,730

6,708

Asia Pacific

4,069

3,368

4,114

3,939

4,350

4,801

4,003

5,345

6,125

8,048

Total

17,675

14,203

22,795

19,72824,551

26,694

22,432

31,727

24,67337,866EMEA

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14Order received (per quarter)(Unit: million yen) *round down to the millions

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15

Consolidated balance sheet
Highlights of assets

Highlights of liabilities

Highlights of net assets







Intangible fixed assets decreased while
inventory assets, trade receivables, cash,
and deposits increased. So, total assets
increased by 6.71 billion yen compared tothe end of previous FY.

(Unit: million yen)
*Round down to the millions

Borrowing decreased while trade
payables and income tax payable, etc.
increased. So, total liabilities increased
by 0.81 billion yen compared to the endof previous FY.

FY2021

FY2022

Due to the increased of earned
surplusandforeigncurrencytranslation adjustment, net assets
increased by 5.9 billion yen comparedto the previous FY.

YoY

Current assets

39,81547,171+7,355

Fixed assets

48,43647,789- 647

Current liabilities

18,95921,660+2,700Non-current liabilities

26,18024,291- 1,889

Net assets

43,11149,008+5,897

Total assets

88,252

94,960+6,708

Shareholders’ equity ratio

48.7%

51.2%

+ 2.5%

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16

Consolidated cash flow statement
Cash Flows by operation activities

Cash Flows by investing activities

Cash Flows by financing activities







It was 9.65 billion yen increased byapproximately 2.21 billion yen YoY due tothe payment of income tax, etc. and theposting of net income before tax.

(Unit: million yen)
*Round down to the millions

Due to the acquisition of fixed assets
and the expenses for business transfer
while the sales of fixed assets, etc., it
was -1.39 billion yen decreased byapproximately 1.76 billion yen of
expenses.

FY2021

It was -8.58 billion yen due torepayment of borrowings and expenses
including dividends.

FY2022YoY

CF from operation activities

7,443

9,652

+2,208

CF from investing activities-3,147-1,386+1,761

Free cash flows (FCF)

4,295

8,265

+3,970

CF from financing activities-3,672-8,578-4,905

Cash and cash equivalents at end of period

15,00915,203+ 194

Capital expenditures

3,567

2,503

-1,063

Depreciation and amortization

2,981

3,264

+ 283

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17

Forecast for the Fiscal Year 2023

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18

Consolidated business forecast for FY2023(Unit: million yen)
*Round down to the millions

FY2022
ActualFY2023

Sales ratio

Forecast

Sales ratio

YoY

Net sales

70,789100.0%

74,500100.0%＋ 5.2%

Gross operating income

30,31042.8%

32,50043.6%+ 7.2%

SG&A

20,63829.2%

21,70029.1%+ 5.1%

Operating income

9,672

13.7%

10,80014.5%+11.7%

Ordinary income

10,39814.7%

10,80014.5%+ 3.9%

7,896

11.2%

7,500

10.1%

- 5.0%

ー250.88ー

Net income attributable toshareholders of the parent
company

Earnings per share(EPS)(before diluting) (JPY)264.12

USD-yen rate (JPY)112.40120+7.60

EUR-yen rate (JPY)129.91130+0.09

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Consolidated business forecast for FY2023(Unit: million yen)
*Round down to the millions

FY2022

FY2023

ActualForecast

YoY

Industrial Switches

33,19135,500+ 7.0%

Industrial Relays & Components

13,625

14,500+ 6.4%

Automation & Sensing

9,958

9,100

- 8.6%

Safety & Explosion Protection

8,908

9,800

+ 10.0%

Systems

3,742

4,500

+ 20.2%Others

1,363

1,100

- 19.3%70,78974,500+ 5.2%

Domestic sales

30,90432,000+ 3.5%

Overseas sales

39,88542,500+ 6.6%(Ratio of overseas sales)

56.3%

57.0%

Total

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20

Expected dividends for FY2023
 FY2022：Annual dividend of JPY100 with the addition of anniversary dividend of JPY20.
(Dividends payout ratio is 37.9%)
 FY2023：Expected annual dividends is JPY100.
(Expected dividends payout ratio is 39.9%)20

Anniversary
dividend

50
40

Year-end
dividends

40

Interimdividends

25

25

FY20212021年3月期

FY2022
2022年3月期

50

FY2023
2023年3月期

Forecast（予想）
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21

Outline of the New Medium-Term Management Plan
(FY2023 to FY2025)

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22

Table of Contents - New Medium-Term Management Plan

1. Review of the Former
Medium-Term Management
Plan

5. Product Strategy

2. New Medium-Term
Management Plan Initiatives

7. Initiatives for Improving
profitability

3. Target Industries

8. Medium-Term Plan

4. IDEC Group’s New Concept“HMI-X”

9. Measures for Finance andInvestment

6. Regional Strategy

10. ESG Initiatives

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23

New Medium-Term Management Plan

SloganNet Sales and Operating Income Margin(Unit: JPY1 billion)

70.8

80.0

74.5

54.0

16.0%

14.5%
13.7%

7.5%
FY2021

FY2022

Net sales (bn yen)

FY2023

FY2024FY2025(plan)(plan)(plan)

Operating income margin

Copyright IDEC Corporation. All rights reserved.

The long-term goal is to achieve an operating profit margin of 20%
The target for FY2025 is to achieve 16% or more
FY2022
Results

FY2023 Plan

FY2025 Plan

Net sales

JPY70.8 billion

JPY74.5 billion

JPY 80 billion or more

OperatingincomeJPY9.7 billion

JPY10.8 billion

JPY13 billion or more

Operatingincome margin

13.7％

14.5％

16% or more

ROIC

9.2％

10.0％

10% or more

ROE

17.2%

14.5%

15% or moreEPS

JPY263

JPY250

JPY300 or more

（Growth ratio >5％/year）

24

1. Review of the Former Medium-Term Management Plan
Long-term
visionTarget for FY2023 (final FY)
Net sales

Evolve into a truly global company

Ratio of overseas sales
Operating income margin

Major results

JPY100 billion
60% or more
15% or more

Review
Due to trade friction between the U.S.
and China, and the impact of COVID 19,
sales did not reach the target level.
However, profitability is expected toremain at the target level.

Challenges

GrowthStrategies

 Expanded business by APEM and Welcat, etc.
joining the IDEC group
 Expanded into the Indian market
 Formed alliances with other companies,
established IDEC ALPS Technologies

 Strengthen group synergies
 Further develop the Chinese and Indian markets,and capture target industries
 Build and develop technical sales organization

Improved
Profitability

 Strengthened price management
 Restructured production sites (transfer andclosure) Consolidated the number of part items

 Review unprofitable products and consolidate
products and parts
 Supply parts that meet needs of markets around theglobe Build a global logistics system

Human
resource
strategy Introduced a new personnel system
 Established “The IDEC Way”
 Conducted the engagement survey

 Reform the personnel system based on theengagement survey
 Reform the company culture, and further promote“The IDEC Way”

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25

1. Review of the Former Medium-Term Management Plan
— IDEC’s approach to technology —(FY2018 to FY2023)

Concluded a strategic partnership with ez-Wheel (France)
Technology: AGV, AMR solutions

2022

Established a joint-venture company
IDEC ALPS Technologies Co., Ltd with Alps Alpine Co., Ltd.
Technology: in-vehicle sensing, in-vehicle HMI

2021

Factory solutions business transferred from Squse Inc. to
IDEC Factory Solutions Co., Ltd
Technology: Automation, systemization

2019

Concluded a strategic partnership with Weidmüller (Germany)
Technology: Push-in

2018Tokyo Sensor joins IDEC group
Technology: Pressure-sensitive sensors

2017

APEM (France) and Welcat joins IDEC group
Technology: Switches with high environment resistance, joysticks,
handy terminals, and RFID devices.

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26

2. New Medium-Term Management Plan Initiatives

Framework for the New Medium-Term
Management Plan Take into account megatrends and identify and leverage key technologicaland market changes rather than simply expand IDEC’s current business.

 Differentiate from competitors by providing applications that leverage
IDEC's strengths to target specific industries, and work towards
achieving customer success.
 Develop a solution business that delivers more value to our customers
in addition to our component business.
 Develop business with the focus on HMI and Safety, which are IDECGroup’s strengths.
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27

2. New Medium-Term Management Plan Initiatives

IDEC’s role in light of megatrends
Megatrends

Societal challenges

IDEC’s role
 Enhance digitization with IoT devices.

Advance of Digitalization& Automation

 Rapid sharing of information
 Rapid technology innovation

Demographic Changes

 Aging population
 Rise of the middle class Establish a safe workplace for all bydeveloping innovative safety solutions.

Geopolitical Changes

 Unstable political conditions
 Geopolitical power shifts
 Increase in pandemic risk

 Create products and solutions for rapidly
evolving markets such as mobility.

Climate Change

Advances in diversity
Copyright IDEC Corporation. All rights reserved.

 Climate change Scarcity of natural resources
 Gender and age diversification
 Emerging Generation Z Enhance productivity via automation
technology and solutions.

 Reduce carbon footprint and design
products which are environmentallyfriendly.
 Develop new HMI interface solutions
that promote ANSHIN and well-being.
 Respond to diverse needs throughcustomization.
28

2. New Medium-Term Management Plan Initiatives
VisionMissionPioneer the new norm for a safer
and sustainable world.

To create the optimum environment
for humans and machines.

SloganFour Basic Strategies
Promote Growth Strategies

Improve Profitability

 Strengthen sales based on technical problem-solving

 Optimize production systems and processes to reduce
costs and inventory and to improve lead times

 Accelerate product development and launch products
based on regional and industry needs

 Review and optimize SG&A costs

 Expand business in China, India and other focus markets, Identify and consolidate unprofitable products andEnhance the Management Base

Enhance ESG initiatives

Business
expansionother focus markets, including
and through M&A
and alliances in China, India andbusinesses
M&A and alliances Promote fair work practices

Promote initiatives to reduce environmental impacts

 Strengthen the business structure by promoting PMI
and rigorous management of key projects

Promote diversity

 Promote digital marketing at the global level

Improve management transparency and efficiency
Create Well-being through Safety and ANSHIN technology
Improve product quality and manufacturing capabilities

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29

3. Target Industries
 Focus on Machine tools and Automotive industries as well as AGV, AMR, andRobots which have high growth potential
 Strengthen approach towards end users and system integrators in addition tomachine manufacturers.
 Improve competitiveness by proactively proposing solutions to various industries

AGV・AMR

Robotics

Automotive

Machine Tools

Elevators

Semiconductors

Special Vehicles

Food andPackaging

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30

4. IDEC Group’s New Concept “HMI-X”

 The business domain is changing from interfaces to moreinteractive control in an environment where humans andmachines collaborate.
 In the future, demand will increase for optimized
environments, including spaces where people and machines
coexist, to achieve safety, ANSHIN, and well-being forpeople.

By taking advantage of our Safety DNA and further
evolving the conventional HMI, we will promote the
new concept HMI-X, which centers around people

Control in a environment where
people and machines are isolated.
Copyright IDEC Corporation. All rights reserved.

Control in an environment where
human and machine collaborate.
31

4. IDEC Group’s New Concept “HMI-X”
Solution examples of the new concept “HMI-X”
Components
Provide information on
product specifications

Solutions Offer solutions as a package
by providing the optimal
product based on knowledgeof safety and application
types.
 Packages with improved
hardware & software for
specific applications
 Full setup of users’ systems

IDEC’s Solutions
Leverage IDEC's core technology to explore
potential demand and create new value.
Implement software for
specific applications

Gather on-site informationfrom remote areas

Ex. Robotics, vehicles

Ex. Transportation
applications, etc.

Copyright IDEC Corporation. All rights reserved.

Realize market-specific
NEW HMI

Provide a friendly environment
where people and machines
work in harmony

32

5. Product Strategy

Focus on providing solutions for HMI and Safety / ANSHIN products withhigh sales growth rates, high market shares, and high profitability（Unit: JPY100
million)

Sales growth rate in FY2017
Switches Target CAGR of 5 to 7% for HMI and safetyrelated products

Safety and1.7 times
2.6 times explosion
protection332

 Create new market opportunities through
HMI Innovation
 Deploy products to maximize the strengths of
IDEC and APEM

297

273

251

64

69

67

65

2018/3

2019/32020/32021/3282
129

 Expand the safety portfolio
 Provide solutions for HMI, safety, software,and IoT-Connected53

2017/3892022/3■Industrial Switches ■Industrial Relay & Components ■Automation &Sensing ■Safety & Explosion Protection ■Systems ■Others

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33

Develop solution business focusing on HMI, safety and ANSHIN HMICreate new opportunities through HMI Innovation■Develop and deploy new products and NEW HMI products that are in demand by target industries

New HMI: Touchless switches for non-contact applications, safety commander…
HMI for target industries: Handy controllers for AGV, AMR and robotics etc.
Custom HMI: Customized products for special customers etc.

 Safety, ANSHIN Become a global safety company■Expand the product portfolio to deploy total solutions to target industries■Increase safety product variations (Safety 2.0) to support collaborative safety environments■Develop and deploy new products to realize safety and ANSHIN by IDEC ALPS Technologies

 IoT-Connected Realize solutions by leveraging IDEC’s (unique) strengths■Promoting “Compact IoT” proposed by IDEC. MQTT, LTE, and remote IO systems, etc.
■Strengthening solution capability by expanding sensing product lineup with IAT

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34

6. Regional Strategy
 Increase presence and expand business in new (emerging) economies
 Strengthen safety and problem-solving solutions in mature markets
 Leverage Digital Marketing on a global basis
Americas Strengthen solution sales in IDEC and
APEM’s core markets
 Expand business in target industries bystrengthening automation product portfolio.
 Develop new customers and expand sales
through the use of digital marketing

EMEA

Japan

 Further strengthen IDEC product sales byleveraging APEM‘s distribution network
 Move up the value chain and grow the HMI/ safety solution business in key industries
 Promote international regulations andstandardization

 Promote solutions for target industries byadvancing technical sales solutions
 Restructure distribution channels
 Achieve efficiency and increase sales bypromoting digitalization

China, Taiwan, Hong
Kong

 Increase local product development in China
to meet local needs
 Increase profitability through local production
and local consumption
 Achieve efficiency and increase sales bypromoting digitalization
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Asia-Pacific Expand business and increase presence inIndia Build relationships with local partners in sales
and production
 Expand local manufacturing, and promote local
production and local consumption

35

6. Regional Strategy
Strengthen initiatives in the Chinese and Indian markets,
which have high growth potential(Unit: JPY100 million)

Growth rate of sales in FY2017

As i a - P a c i f i c

2.0 times Target CAGR of over 7% in the Asia-Pacific region166 Promote local development and production in China

 Strengthen sales channels through strategic
partnerships, etc. in India

124

125
108
120

85

2017/3

2018/3

2019/32020/32021/32022/3■Asia-Pacific ■Japan ■Americas ■EMEA
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36

6. Regional Strategy
Strategy in China[Initiative Policy]
Develop an autonomous business structure,including development, manufacturing and sales, based on local needs

PromoteGrowthStrategies

Improve
Profitability

 Establish a highly efficient sales system and strengthen solution sales Accelerate product development based on local needs, and strengthen productvariations by collaboration with partners
 Improve customer service levels, including strengthening the sales support andtechnical systems

 Improve competitiveness through promoting drastic cost reductions
 Shorten delivery LT and reduce costs through local manufacturing of key products
 Expand sales territories, strengthen the management structure, reinforce andStrengthen the
educate human resources.
Management
 Strengthen digital infrastructure, including use of digital marketing and promotion ofBase
e-commerce
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37

6. Regional Strategy
Strategy in India[Initiative Policy]
Increase awareness as a HMI and safety manufacturer
and expand the market share of major products

PromoteGrowthStrategies

 Restructure the distributor network and expand reach to new areas
 Increase awareness as a safety manufacturer through seminars/events
 Recruit knowledgeable local staff and build an organization

Improve
Profitability Improve efficiency by building local supply chain
 Promote cost reduction via local procurement and manufacturing.

Strengthen the  Build strategic partnerships and strengthen channels in local regions
Management
 Shorten delivery time by building an optimal supply-chain structure
Base
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38

7. Initiatives for Improving Profitability

1. Reduce inventory and delivery lead-time■Promote structural reforms by reorganizing production sites, optimizing logistics
and production operations, and upgrading legacy systems

2. Promote strategic cost-reduction initiatives■Reduce manufacturing costs through automation and labor-saving■Reduce costs by VA/VE■Reduce fixed costs by promoting business reforms

3. Optimize product offering and pricing■Consolidate unprofitable products and businesses, and further strengthen pricemanagement■Consolidate materials, parts, and products with APEM

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39

8. Medium-Term Management Plan The long-term goal is to achieve an operating income margin of 20%,and over 16% operating Profit in FY2025 with over 80 B JPY of sales Target CAGR: 5% or more (overseas: 6% or more).
FY2022 Results

FY2023 Plan

FY2025 Plan

Net sales

JPY70.8 billion

JPY74.5 billion

JPY80 billion or more
（Growth ratio >5％/year）

Operating income

JPY9.7 billion

JPY10.8 billion

JPY13 billion or more

Operating income
margin

13.7％

14.5％

16% or more

ROIC

9.2％

10.0％

10% or more

ROE

17.2%

*1

14.5%

15% or moreEPS

JPY264*2

JPY250

JPY300 or more

*1: ROE excluding the impact from the extraordinary income in FY2022; is approx. 15%.
*2: EPS excluding the impact from the extraordinary income in FY2022; is approx. JPY221.

Copyright IDEC Corporation. All rights reserved.

* ROE = net income ÷ equity* ROIC = NOPAT ÷ invested capital40

9. Measures for Finance and Investment
Investment for growth in the medium to long term

Invest for
GrowthFormer Medium-Term Plan

New Medium-Term Plan Investment in M&A and alliances
APEM (HMI), Welcat (Automation), Tokyo Sensor (Safety) and
Squse (System) joined IDEC group Investment in new products: Investment in the
HMI/Safety/Automation field Establishment of a new company: Sales subsidiary in India,
IDEC ALPS Technologies

 Investment in M&A and alliances• M&A and alliances for enhancing safety business,
AGV industries, software, and engineering fields• Strengthen partnerships in China and India
 Invest in new products: Proactively invest in new HMI
and safety Sites and equipment:• Introduced automation and labor-saving systems• Restructured production sites and established new logistics sites
in China, Taiwan and EU
 Investment in human resources: Invested in the developmentof human resources
Strengthen theInvestment in DX: Implement Digital marketing platform
Management
Introduced Teams to the entire company, updated the personnelBasesystem Investment in sustainability:
Installed solar power (Hyogo, Aichi, Gifu, Taiwan, etc.)

Improve
Efficiency

Shareholder
Returns

 Measures for returns:• Continuous dividend with dividend payout ratio between 30
and 50%• Acquisition of treasury stock in a timely manner according to
the stock price level

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 Sites and equipment:• Increase production sites, introduce automation andlabor-saving systems• Optimize sites
 Investment in human resources: Invest to develop
global human resources Investment in DX: Update ERP, introduce supply-chain
planning system, arrange a talent management system
 Investment in sustainability:
Install solar power, develop eco-friendly products

 Measures for return:• Continuous dividend with dividend payout ratio between
30 and 50%• Acquire treasury stock in a timely manner according to
the stock price level4110. ESG Initiatives
Contribute to Realizing a Low-Carbon
and Circulating SocietyPromote initiatives that address climate change as animportant management issue
Established the Environment Enhancement Department andassigned a Senior Executive Officer in charge of theenvironment in 2021 to further strengthen our environmental
efforts.
Expressed our support for the TCFD in 2021, addressed thescenario analyses of climate-related risks and opportunities
based on the TCFD guidance between 2021 and 2022, anddisclosed the information.

Related SDGs

Medium-term targets by FY2025 (based on FY2020)
Reduce CO2 emissions
Reduce industrial waste
Increase ratio of eco-friendly
products in total new products(cumulative)

24%
24%
More
than 60%

Vision for 2030 concerning climate change Contribute to reducing the environmental
impact of customers and society through theuse of the IDEC Group’s technologies andproducts
 Reduce CO2 emissions by the IDECGroup’s use of renewable energy*Decision making and supervision of the submitted items by the CSR committee are conducted twice a year.

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42

10. ESG Initiatives
Further Enhancement of Human Capital
Related SDGs

Promote efforts to tackle issues such as the enhancement of human management system, promotion of diversity
and inclusion, and workstyle reform that were extracted from the results of the engagement survey (employees’
awareness survey).
Aim to appoint fifteen or more female managers* by FY2025(including women in a leadership position with subordinates)
IssuesCopyright IDEC Corporation. All rights reserved.

Major initiatives taken up to FY2022

Initiatives to be taken from FY2023 and beyond

43

10．ESG Initiatives
Further Enhancement of Governance
Related SDGs








Ratio of outside directors(As of May 31, 2022)

Ratio of female directors(As of May 31, 2022)

Distribution of tenure periods(As of May 31, 2022)

Assign the majority of directorships to outside directors,
63<3 years:
1 female≧10 years:
8 maleoutside directors
internal directors
3 directors
3 directors
and secure further diversity based on the skill matrix.
Percentage ofRatio ofRatio ofdirectors forfemale directors
outside directors<3 years
To promote stable and long-term credibility and value ofthe company, continue the initiatives for improving thedirectors’ effectiveness based on the results of their
3-9 years:
performance evaluations.
3 directors
CSR Committee
Identify high-risk events based on a risk map, andregularly conduct risk-monitoring activities to keep track
Risk Management Committeeof risk-reduction initiatives.
Identify “Nankai Trough earthquakes” as one of the highBCP Preparatory
Risk-Monitoringrisk events, promote BCP formulation, and raise internal
Hotline contact
Subcommittee
Subcommittee
awareness of disaster prevention in order to prepare for
Set risk-reduction targets.
natural disasters.
Risk
monitoring
activities

Implement risk-reduction efforts.
Conduct risk-assessment surveys.
Review the risk map and identify high-risk events.

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44

References

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45

Improve Capital Efficiency
 Assume capital costs to be around 6%, and promote business operations based on the ROIC
exceeding it.
 Realize the maximum returns for invested capital through optimal capital policies
Operatingincome
ROIC

NOPAT

×

÷

Effective
tax ratio

ROE
Invested
capitalFinancialleverage6%

 Reduce costs
 Reduce SG&A

 Cash conversion cycle (CCC) Production efficiency / Capacity
utilization
 Fixed-asset turnover÷EquitycapitalCopyright IDEC Corporation. All rights reserved.

Capital cost

 Expand sales

 Optimum D/E ratio（Optimum capital structure) Reduce capital costs

46

Incorporated to Major ESG Indexes
 FTSE Blossom Japan Sector Relative Index
 SOMPO Sustainability Index (FY2022)
 S&P/JPX Carbon Efficient Index

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47

Safety Initiatives
Promote worldwide activities to create well-being beyond safety

Approved the Global Coalition for Safety and Health at Work, established on the initiative of the ILO(International Labour Organization), and participated in corporate task force promotional activities
Approved and registered the Vision Zero campaign* for industrial health and safety, which ISSA under
ILO promotes, for the first time in Japan（*This is an approach to pursue “safety, health, and well-being” within IDEC on the initiative of top
management.）

The second Vision Zero Summit took place in Japan in May 2022, where IDEC’s employees madepresentations on IDEC-related cases. Seven presentations in total were given.
IDEC conveyed the message that we aim to pursue and achieve the world’s best safety, ANSHIN, andwell-being through our world-leading collaborative safety technology and business.

An example of presentation content at the Vision Zero Summit

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48

Disclaimer
This material contains our plans and performance forecast, which we have planned andexpected in accordance with available information as of May 13, 2022.
Therefore, actual performances may vary from aforementioned plans and expectedvalues due to unforeseeable events and factors.
The original language is Japanese in financial results materials. The English version istranslated into the original Japanese version. In the case of any discrepancy between the
English translation and the Japanese original, the latter shall prevail.
IDEC CORPORATION
Strategic Planning Department
TEL ：+81-6-6398-2505
FAX ：+81-6-6398-2587
E-mail : yasuyuki.ogawa@idec.com

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49