Mitsubishi Electric Key Growth Businesses

Factory Automation (FA) Control Systems[PLC, Servo, and CNC]

November 8, 2021
Mitsubishi Electric Corporation©Mitsubishi Electric Corporation

Executive Summary

1

2

FA Systems Division formulates medium-term business plan aiming for sales of800 billion yen or more and operating profit ratio of 17% or more in FY2025.
The FA Control Systems Business, a key growth business for the entire company, aimsfor sales of 400 billion yen or more and an operating profit ratio of 23% or more inFY2025, by focusing management resources.

34Taking “Technological Innovation (digital decarbonization)” and “IntelligentManufacturing” as opportunities for future growth and growth strategies.
Contributing to the solution of social issues, such as decarbonization and labor shortage,
through use of automation technology and energy-saving equipment and solutions atproduction sites.

©Mitsubishi Electric Corporation

2

Contents

1. Business Overview
1-1. Business Structure
1-2. Business Details and Areas
1-3. FY 2021 2Q Result Highlights
1-4. Our Strengths
1-5. Business Management Policy
2. Medium-term Management Plan of Key Growth Businesses
2-1. Our Vision
2-2. Business Environment
2-3. Direction of Business Expansion
2-4. Growth Strategy
2-5. Initiatives to meet Social Challenges©Mitsubishi Electric Corporation

Note
FY 2018 : April 1, 2018 -March 31, 2019
FY 2019 : April 1, 2019 -March 31, 2020
FY 2020 : April 1, 2020 -March 31, 2021
FY 2021 : April 1, 2021 -March 31, 2022
FY 2025 : April 1, 2025 -March 31, 2026
3

1©
Mitsubishi ElectricCorporation©Mitsubishi
ElectricCorporation

Business Overview

4

1-1

Business Structure

Business Structure

Segment

Sub-segment

Energy & ElectricSystems

Social Infrastructure

Industrial Automation
Systems©MitsubishiElectricCorporation
Corporation©Mitsubishi Electric

Key GrowthBusinesses

Building Systems

Building Systems

Factory Automation(FA) Systems

FA Control Systems(PLC, Servo, and CNC)

Automotive Equipment

xEV/ADAS

Information &Communication
Systems

Information
Systems & Service

Electronic Devices

Electronic Devices

Power Semiconductor
Devices

Home AppliancesHome Appliances

Air Conditioning &Refrigeration Systems

Electronic System

ADAS：Advanced Driver Assistance System

5

1-2

Business Details and Areas

Providing a wide range of products, services, and solutions to support customers' manufacturing
ProductBusiness GroupControlandDriveProducts

FA ControlSystems

OtherControl and Drive
Products

PLCServo

CNC (Numerical Controller)

HMI

Inverter

Robot

Processing Machine
Laser Processing Machine

Rotary Motor
Power Distribution
Control equipment

Electric Discharge Machine

RotaryPower Distribution

Motor

Control Equipment

Laser Processing
Machinefor CFRP1

Metal 3D
Printer

Integrated Solution
Consulting

Software

Remote Services*1: Laser processing machine for Carbon, Fiber, Reinforced and Plastics©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric6

1-3

FY 2021 2Q Result Highlights

Demand increased from FY 2020 3Q and further from FY 2021 1Q
FY 2020(¥bn)

2Q

FY 2021

2Q

Demand Growth Factors

Year-on-yearchange％Orders received

281.2

462.8

+181.6165

Type ofbusiness

Digital: Electronics, Semiconductors, 5G, etc.
Decarbonization: EV, Battery, Solar power, etc.

Net sales

272.3

366.7

+94.4

135Region

All regions (especially East Asia)

25.5
63.0
+37.5
［9.4%］ ［17.2%］ ［+7.8pt］

247

Model

All products(especially PLC/Servo/CNC/Processing machine)

Operating profit[Operating ProfitRatio]－By Region(FY 2021 Cumulative 2Q)

Net Sales (¥bn)

Orders Received (¥bn )

226.2

236.6

Europe India
23.1
5.4

201.5

145.5 148.6 143.7

157.5

189.1
177.6

164.3

158.6

144.7
136.5

139.9

152.0

150.1
139.1

132.8

Americas （153%）（179%）
17.2（165%）

163.7

139.5

Japan

Net sales 140.0
Asia
73.5 ¥366.7 billion （113%）（134%）

China
107.4

（166%）

1Q

2Q

3Q

FY 2019©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric4Q

1Q

2Q

3Q

FY 2020

4Q

1Q

2Q

FY2021

1Q

2Q

3Q

FY 2019

4Q*In parentheses: YoY
1Q

2Q

3Q

FY 2020

4Q

1Q

2Q

percentage change

FY 2021

71-4

Our Strengths (1) Technology Asset

Core of our FA products : Control and drive technologies, synergy, and in-house key parts
PLC
CNC

ServoHMI

Edgecross

Sequence
ControlDrives
Control

Edge
Computing

ASIC

AI
MaisartRobotAIPower Electronics
Technology

Real-time
ControlPower Device

Motor Technology

Encoder

Visualization

SoftwareIoT Suite
ClariSense

Motor

Production
Technology
SoftwareInverter

Network
Power Distribution
Control Equipment
Rotary Motor©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric

Network

Processing
Machine8

1-4

Our Strengths (2) Sales and Service Assets

Sales and service network covering the global FA market
Mitsubishi Electric

Sales and Service Network

69 Countries

94 Countries

177 Sites

1,480 Sites +Customer

Manufacturing Equipment
andMachine Tool BuildersEnd Users©Mitsubishi
ElectricCorporationCorporation©Mitsubishi Electric91-4

Our Strengths (3) Partner Assets

Ecosystem with partners to meet diverse customer needs
In-plant Layer

1,058

IT System

Partners to realize
a smart factoryPartners

SI

Equipment

Partners

Partners

486

Software290

Partners
Equipment
and machinery

SI

Edge

Production
Site
Power
ReceivingandDistribution
Facilities

Edge
Computing373

Edge-area
Partners

Partners

Industrial Network
Partners

Partners

RyobankaiPartners for building powerreceiving and distribution facilities

4,004

307

166

Partners

96

Partners

Software

OtherPartners

Partners

3675

2,430

Products480Partners*As of September 2021
©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric101-4

Our Strengths (4) Customer Assets

Connection with customers gained through abundant delivery records and operating units

3,300

35,000Licenses

Cases

Number of Installations(Cumulative)

Number of Units inOperation

PLC

900,000

12 Million

11 Million

Units

Units

ServoCNC

Units(Estimated from shipments
over past 10 years)

Access per day

330,000

680,000

800,000

Members

Customer Connection

Number of registeredmembers of FA web site

Followers

Number ofSocial Media followers*As of September 2021

©MitsubishiElectricCorporation
Corporation©Mitsubishi Electric11

Business Management Policy (1)Growth Target for FY 2025

1-5

FY 2025 Growth Targets : FA System Business
FY 2020

FY 2021

FY 2025

ActualForecast

TargetRevenue¥587.9 billion¥750 billion¥800 billion+

Operating
ProfitMargin

10.5%

16.8%

17.0%+US $106 yen

110 yen105 yenEuro

124 yen

128 yen

115 yenRenmi nbi

15.7 yen

17.0 yen

15.0 yenE xc h a n g e R at e

©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric12

Business Management Policy (2)Portfolio Strategy

1-5

Our FA system business consists of a wide range of products.
Clarify resource input policies for each business segment and accelerate growth.
FY 2020

BusinessProductCategory

Key GrowthBusinesses

Stable Profit
Businesses
IntegratedSolution,
Potential andNew Businesses
Value Recapurting
Businesses andOther Businesses

Operating
ProfitMarginNet Sales(¥bn)

Operating
ProfitMarginNet Sales(¥bn)

265

~20%

355

20%+

14910%+

197

15%+

56~3%

655%+

167~5%

184.5~5%

588

10.5%

750

16.8%

ServoBusinessResourceinput

Net Sales(¥bn)

Operating
ProfitMargin40023%+21015%+

9310%+

1555%+

800

17.0%

CNC

PLCProcessing
MachineFY 2025

FY 2021

InverterHMI
RobotNew
Processing
MachineBusiness

IntegratedSolutions

DistributionControl
Equipment
RotaryMotor

Consolidated Total

OtherBusinessApril 2022 (planned): Establishment of a new industrial
sewing machine company (20% owned by Mitsubishi Electric)©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric13Medium-term Management Plan of2©
Mitsubishi Electric
Corporation©Mitsubishi
ElectricCorporation

Key Growth Businesses

14

2-1

Our Vision

Enriching the lives of people around the world
by contributing to co-innovation with industry
and infrastructure customers
utilizing automation technology©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric15

2-2Business Environment
Our role will become increasingly importantfor technological innovation and the realizationof a sustainable society©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric16

2-2

Business Environment

Our FA business has expanded steadily by providing value
to growth areas. We formulate strategies for growth basedon the business environment.

Technological Innovation(Digital and Decarbonization),Intelligent Manufacturing(¥bn )

Expansion of East Asian Market
Smartphone-related Investment

800700Providing new value &building the business model

Automobiles,Semiconductors,
Display-related Investments

600

Business expansion bycontributing totechnological innovation

500
400

Expansion ofoverseas business

300
200

Expansion ofdomestic business

100

2030

2025

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric2002

2001

0(Fiscal year)
17

2-3

Direction of Business Expansion

Focusing on “Technological innovation (digital and decarbonization)” and “Intelligentmanufacturing” for future business expansion, we will acquire appropriate technology / humanresources and establish a "business driving" structure.

Approach customers who prioritize
technological innovation

Market, customers

Co-creation of Machinery

Delivering New Value toManufacturing Sites

Strengthening

Solutions for Intelligent
ManufacturingNew

Key Growth Businesses

Existing

New

Existing

Providing value

Establish a business structure to drive new value
M&A©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi ElectricAcquire external
human resources

Open innovation

18

2-3

Direction of Business Expansion (Cash Flow)

Our FA business continuously generates stable free cash flow.
We will strengthen growth investments to realize further expansion of operating cash flow.
Cash Flow
M&A, etc.

(¥bn )

Operating cash flow
Investment cash flow
Free cash flow

90.7
60.9

Growth Investment

85.5 80.5
86.0
80.0
56.1

57.9

47.8

55.9

Strengthen Core Components- Intelligent devices and others
Provide Value to GrowthIndustries- Special purpose motors, etc.
Expande Integrated Solutions- Software- Security- Consulting, etc.

15120
Facilities

86 FY 2016 to 2020
R&D

60

¥259 billion

158

30.6

21.6

M&A, etc.

60

FY 2021 to 2025

△29.8 △34.5

2016

2017

©MitsubishiElectricCorporation
Corporation©Mitsubishi Electric△22.1
△37.7

2018

△49.9
2019

Facilities

△30.1

108

¥346 billion

R&D178△6020202021- Servo/CNC production capacity: ¥26 bn- New production facilityin Chubu region: ¥17 bn
2025- Expansion of production facilityin China: ¥13 bn(Fiscal year) - New production facilityin India: ¥3 bn etc.
(There is some overlap in the amounts)
19

2-4

Growth Strategy

Our Growth Strategy
Provide Value toGrowth Industries

Expansion ofIntegrated Solutions

StrengthenCore Components

Strengthening Business Infrastructure

Technology Assets

Sales Service Assets

Key Growth Businesses

Customer Assets

Integrated Solutions, Potential & New Businesses

FY 2020
Actual

FY 2021
Forecast

FY 2025
TargetNet Sales¥265 billion¥355 billion¥400 billion

Operating
Profit Margin~20%20%+23%+©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi ElectricPartner Assets

FY 2020
Actual

FY 2021
Forecast

FY 2025
TargetNet Sales¥56 billion¥65 billion¥93 billion

Operating
Profit Margin~3%5%+10%+20

Growth Strategy (1)Strengthening Core Components

2-4Introducing next-generation products that meet cutting-edge customers’ needs

Product Roles

PLC

ServoCNC

Optimal control ofmanufacturing
equipment andproduction lines

High speed andhigh accuracy controlof manufacturing
equipment

High speed andhigh accuracy controlof machine tools

Growth Strategy

Contribute to technological innovation through co-creation and development with advanced
manufacturing equipment manufacturers,
Strengthen global business structure (manufacturing, development, sales, service, IT)

Core Components

Development of next-generation productswith maximum performance and scalability

Strengthen high-speed and high-accuracy technologies

Next-generation PLC Under development

Released May 2019

Released in July 2021

Field Knowledge

Application development for growth industries

Advanced DigitalTechnologyIntegration with digital technologies such as 5G, AI, and Cloud technologies
5G
Verification test
using PLC
production line
Started in November 2021

©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi ElectricAI

CloudDigital Twin

Cybersecurity
IEC62443-4-1

Applied to 21 products

Started in April 2016

Acquired in May 2021
Released in August 2021

21

Growth Strategy (2)Providing Value to Growing Industries

2-4

Establishing business structure to support customers’ innovation globally
Growth Industries

EVSemiconductor

DisplayEMS

Environmental
ChangeAcceleration of TechnologicalInnovation

BatteryLogistics

Global DiversificationData Center

Food, Beverage,
Medical Care

Normalization of Uncertainty

Strengthening salesorganization forgrowth industries

Expansion of innovation labs
for the global market

Creation of innovation
unique to Mitsubishi Electric

Global 260 +More than 200 engineers

Corporate Research andDevelopment Group(As of September 2021)(Planned for FY2025)

Advanced Technology
R&D Center

April 2021: Dedicated organization established
Optimal proposal
by industry

Customer support foroverseas expansion

Regions:
China, Europe, North America, India

Information Technology
R&D Center

Integrated Design Center

Co-creating to meet the customer's ideal status©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric22

Growth Strategy (3)Expansion of Integrated Solutions

2-4

Providing integrated solutions that leverage our strengths to meet the needs of intelligent manufacturing
Characteristics ofMitsubishi Electric

FA Systems Business
ERP

IT

PLM

Industrial PC

SCM
Digital Twin

SCADAMES

Partner Products

Data Analysis Energy Saving Analysis
and Diagnosis
Partner Products

Edge

Released May 2018 Acquired Aug 2019 Released Aug 2021 Released May 2018 Released Oct 2020

PLCKeyGrowthMotion

KeyGrowthCNC

Key
GrowthEstablished Nov 2017NetworkSoftware

HMI

Partner ProductsReleasedMay19

InverterServoServoSystem

Robot

Partner Products
SensorPower Distribution& Control Devices

Processing
MachinePartner Products
Released May 2019TechnologicalAssets

Real-timeControl
Technology

Power Electronics
TechnologyCustomer
AssetsNo. ofDeliveries

e-F@ctry
35,000©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric

Edge products andIoT platform toconnect IT and OT

MotorsOT(FA)

PartnerAssets

Offering a diversified
product lineup,technology, knowledge
and comprehensive
value as a generalelectronics manufacturer

Motor
Manufacturing
Technology Technology

No. of Units
in Operation

Maisart(AI)

PLC: 11 Million Units
Servo: 12 Million UnitsCNC: 0,9 Million Units

ClariSense

CustomerContact

Capable of dealing
with variety ofcustomer needs
through ecosystemwith our partners

Communication
Technology(5G utilization)

Registered Members on
FA Web Site:
680,000 Members

e-F@ctory Partners: 1,058 companies, Edgecross Partners: 373 companies, CC-Link Partners: 4,004 companies

Integration of digitaltechnology toproduction sites;
e-F@ctory(since 2003)

23

Growth Strategy (3)Expansion of Integrated Solutions

2-4

Accelerate the use of digital technology within the company, establish foundation for DX, andbuild a new business modelInternal Work DXPretreatment using real-time data
analysis in the field, Maisart, etc.

Visualization Level

Precognition(Forecast)Business DX
Digital marketing

Visualization(Improvement)

Digital Marketing Centerestablished in January 2021

Customer

Visualization(Analysis)

FA Web site

Local 5G

Visualization(Visualize)

Sales,
Support

Data
Collection
Facility,
workerLine

Factory

Supplychain

Management

e-F@ctroy Enhancements

Sophisticatedmanufacturing using
digitaltechnologies

Visualization &unification ofmanagement data fortimely management

Digital marketing
infrastructure

UX
Improvement

Providing value
through customer
life cycleEC

Digitalizationof customer
contactsBuilding a circular business model- Digital marketing- EC (FY 2022)
Digitization ofcustomer contacts
InterestConsideration

SoftwarePurchase
TrialDesignSelection

Machinedevelopment

Customer lifecycle
Establishment of new factories
and production lines

Development of global IT infrastructure

Consulting

Utilization

Machinestart-up

Operation

Renewal andfacility capacity increase

improvement Maintenance

Remote services

Standardization and Rectification ofWork Process

Company-wide Initiatives

DX Human Resources andStructrure

Employee Engagement

Top Leadership

Mindset and Human Resources
SystemFoundation for DX Promotion©Mitsubishi
ElectricCorporationCorporation©Mitsubishi Electric24Growth Strategy (3)Expansion of Integrated Solutions

2-4

Creating value throughout the customers’ life cycle using digital technology and field knowledge
Consulting■e-F@ctory (China: since 2014)
Support for automation,
productivity, quality
improvement

Software

Remote Services■iQ Care Remote 4U (Since 2016)■MELSOFT

Total
125 Cases

GENESIS64 (March 2021)

Digital Twin
3D Simulator(August 21)

ProcessingMachine■Data Analysis (Since 2018)
Task definition, data collection
and learning model creation
support by experts
Total~ 10 Cases
Unit consumption management,utility renewal, operationoptimization support by experts
Total
500 Cases

FA Products,Machines©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi ElectricProcessing
MachineSales

RemoteServices

Data Analysis

Energy Saving
Analysis & Diagnosis

Data Analysis Software(May 2018)■Energy Saving (since 1997)

Company wide
IoT platform

End User

Mitsubishi Electric

SCADA(Monitoring & Control)

Eco Adviser(October 2020)

MELSOFT iQ AppPortal for Cloud (Under Development)

Technological Assets (AI, security, etc.)

Management of project files,
drawings, documents, etc.
by purpose

Solution Library■iQ Care Platform (Under Development)
Equipment machine

Mitsubishi ElectricFA Products

manufacturers
Productales

RemoteServices
Foundation

Database

Creation of newvalue atmanufacturingsites25

2-4

Growth Strategy (4)Strengthening Business Infrastructure

Build a solid, stable supply system by increasing production capacity and establishing a
global trilateral manufacturing structure

Mitsubishi Electric
Dalian Equipment Co., Ltd.

Consideration forexpanding existing sites
Dalian No. 4 Factory
Changshu No. 3 Factory

Establish new
production facility
Location: Chubu region
Completion: FY2024
Total floor area: 33,000㎡ +Mitsubishi Electric Automation
Equipment (Changshu) Co., Ltd.

Nagoya Works

Use of internal facility
Start of production: FY2022

Establish new
production facility

Industrial Mechatronics
Systems Works

Location: Talegaon, Pune
Completion: FY2023
Total floor area: 15,000㎡ +Planned
construction site

©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric26

2-5

Initiatives to meet Social Challenges
Provide solutions to social challenges Realize a sustainable global environment
Realize a safe, secure, and comfortable society
through our business efforts■Materially realize
sustainability
Provide solutions
to social challenges
through ourbusinessRealize a sustainableglobal environment

Strengthen our businessfoundation to enable oursustainable growth

Respect for all people

Realize a safe, secure,and comfortable society

1
1Contribute to a decarbonized society
by providing Energy-saving equipment
and solutions for production sites
Example (1)Strengthen corporate
governance and complianceon a sustainable basis

Mobility

Life

Infrastructure

Industry

SDGs Contributing to Achievement

Fiber laser processing machine

Reduction of electricity consumption to 1/3 (comparedto conventional CO2 laser processing machines)

Create a sustainability-oriented
corporate culture

Energy-saving support application“EcoAdviser”
Support for energy conservation measuresthrough automated diagnosis of energy loss
factors with Maisart (AI technology)
Example (2)■Social Challenges
MobilityLife

Zero traffic accidents
Enrich leisure time
HealthComfortable transport Eliminate regional disparities Comfortable life
Eliminate traffic congestion
Improve QOL of mobility impaired people
etc.
Reduce air pollution Build communities
Prepare for infectious diseases
Equal opportunity for education and training
Measures for deteriorating
Prevent global warming
Preserve the ecosysteminfrastructure
Avoid water shortage/ food shortageetc.
Industry and technological innovation
Eliminate poverty/ inequalities
Clean water
Address labor shortage
Response
to uneven distribution
Prepare for man-made threats
and depletion of resources
Prepare for natural disasters

Infrastructure

Industry

Sustainable society©Mitsubishi
ElectricCorporation
Corporation©Mitsubishi Electric2

Contribute to solving social issues through automation technology
Overcoming issues caused bylabor shortages
Robot utilized for automatic tire replacement system(RoboTire, Inc.)
Tire replacement on one vehicle in 15 minutes
Examples27

Cautionary Statement

While the statements herein including the forecast of the Mitsubishi Electric Group are based on assumptions the Group considers to bereasonable under the circumstances on the date of announcement, actual results may differ significantly from forecasts.
Such factors materially affecting the expectations expressed herein shall include but are not limited to the following:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Any change in worldwide economic and social conditions, as well as laws, regulations, taxation and other legislation
Changes in foreign currency exchange rates, especially JPY/dollar rates
Changes in stock markets, especially in Japan
Changes in balance of supply and demand of products that may affect prices and volume, as well as material procurement conditions
Changes in the ability to fund raising, especially in Japan
Uncertainties relating to patents, licenses and other intellectual property, including disputes involving patent infringement
New environmental regulations or the arising of environmental issues
Defects in products or services
Litigation and legal proceedings brought and contemplated against the Company or its subsidiaries and affiliates that may adversely affectoperations or finances
10. Technological change, the development of products using new technology, manufacturing and time-to-market
11. Business restructuring
12. Incidents related to information security
13. Large-scale disasters including earthquakes, typhoons, tsunami, fires and others
14. Social or political upheaval caused by terrorism, war, pandemics, or other factors
15. Important matters related to the directors and executive officers, major shareholders and affiliated companies of Mitsubishi Electric Corporation©Mitsubishi Electric Corporation

28