Medium-Term
Management Plan
(FY2022–2024)

May 13, 2022
Hirata Corporation

1

Looking Back on Medium-Term Management Plan
(FY2018–2020)2

Medium-Term Management Plan (FY2022–2024)

2

1

Looking Back on Medium-Term Management Plan
(FY2018–2020)2

Medium-Term Management Plan (FY2022–2024)3

Outline of Previous Medium-Term Management Plan (FY2018–2020)
Group Slogan

Targets for final
fiscal year (2020)

Hirata is striving to become the Top Integrator of Production Systems for Our Global Customers➢ Consistently achieving consolidated net sales
above 100 billion yen➢ Targeting operating income margin of 10% or more

Net sales (Billions of yen)
Operating profit ratio

100

50

Aims of
FY2018–2020
Medium-Term
Management
Plan➢ Expansion of scale (net sales and profit) to ensure
growth potential➢ Improvement of profit structure to ensure
management stability
Item

Basic strategies

Strengthening order-receiving/production/
development systems

Content of plan
Amount of capital investment 15 billion yen
R&D expenses 5 billion yen➢ Construction of new plant in response to an increase in orders andproduction in growing markets➢

Utilizing M&A and strategic alliances as means for our growth strategy

Deepening and expanding existing business
Acquisition of new regions and customers in the EV and semiconductor fields

Venturing into growth markets
Establishing mass production business andcommercialization

Corporate governance-related initiatives

Mass production: Move to mass production by modularizing individual design
products
Commercialization: Development and sales promotion of single item goods➢➢➢

Newly establishing a department specializing in Group compliance
Improving reporting routes for cases of misconduct and emergencies
Improving IT infrastructure and understanding and strengthening
information security
4

Review of Management Indicators, Basic Strategies, etc.
of FY2018–2020 Medium-Term Management Plan
TargetNet sales
Operating profit ratio
Capital investment
R&D expenses

Review of FY2018–2020
Plan’s strategies, etc.

FY2019FY2020100 billion yen

77.3 billion yen

65.6 billion yen

65.3 billion yenー

67.0 billion yen

10% or more

8.1%

4.2%

7.7%

ー

5.7%

4.13 billion yen

2.58 billion yen

3.16 billion yen

9.87 billion yen

1.47 billion yen

1.16 billion yen

1.0 billion yen

0.86 billion yen

3.03 billion yen

1.02 billion yen

Cumulative total

15 billion yen
Cumulative total

5 billion yen

Basic strategies

Tasks/Challenges

Strengthening orderreceiving/production/
development
systems-Promotion of commercialization of key
components-New business-related investment-Development of organizational management
system and internal rules to promote
investment development-Supplementing of existing resources to promotebusiness strategies

Deepening andexpanding existing
business/Venturing
into growth markets-Expansion of business scale insemiconductor transfer field-Accumulated achievements as a top-tiermanufacturer for both major and start-up
companies in EV field-Expansion of compatible processes bydevelopment of elemental technologies ingrowth fields (EVs/semiconductors)-Thorough management of project profitability-Expanded and upgraded lineup of ECO
electric series products (to a total of 61 types)
for which a Hirata-developed, compact, highefficiency DC brushless motor was adopted-Further expansion and upgrade of lineup of
ECO electric series products with HIRATA BLUE
MOTOR* as their core technology

Corporate governancerelated initiatives

Reference:
FY2021FY2018Results (FY2018–2020)

Establishing mass
production business
andcommercialization

Three-year
cumulative
total

FY2018–2020 Medium-Term Management Plan

Review of Management
Indicators-Standardized registration of ECO electricseries products by top-tier automobile
manufacturers-Clarification of issues by evaluating
effectiveness of Board of Directors’ meetings-Introduction of delegation-type corporate
officer system-New Compliance and Internal Control
Department-Enhancing the performance of theinvestment/R&D plan promotion system-Technological developments that meetcustomer needs-Strengthening of collaborative system between
Group companies-Expansion of business scale by developing newsales channels for ECO electric series products

Recognition ofManagement Issues
Further strengthening of ourtechnological advantages andprofitability are issues
For current strengtheningof profitability-Investment in key technologies toincrease profitability and efficiency ingrowth markets (EV/semiconductor
fields), strengthening of humanresources, and active collaboration withoutside companies that does not limit us
to in-house resources-Sharing of values, organizational
strengthening, and strengthening ofcooperation to enhance Plan’s feasibility* HIRATA BLUE MOTOR is a registered trademarkof our company.

For strengthening of management
bases that underpin
long-term sustainable profitability-Enhancement of Board of Directors’ meeting
discussions regarding medium- to long-term
management strategies, etc.
-Strengthening of internal control systems andrisk management systems, including those ofGroup companies-Formulation of Hirata Group policy andexpansion of specific initiatives relating tocontributions to a sustainable society-Promotion of digitalization in operations
and plants in response to accelerating
pace of digitalization
5

1

Looking Back on Medium-Term Management Plan
(FY2018–2020)2

Medium-Term Management Plan (FY2022–2024)

6

Positioning of Medium-Term Management Plan (FY2022–2024)
Mission Statement: “We courageously pursue technological innovation while contributing to the betterment ofmankind, development of individuals and enhancement of our company’s capabilities.”

Basic Policies(1) Business expansion in growth markets(2) Strengthening competitiveness as a global company(3) Strengthening of ESG management initiatives(4) Realization of management in line with new normal era

Priority Measures
Thorough profitability
management thatutilizes DX

2022

Growth strategy for
EV-related equipment
business

Growth strategy forsemiconductor-related
equipment businessInitiatives for
new businesses

2024

Sustainableimprovement
in corporate
value

人技幸献
Jin – Gi – Kou - Ken

To make everyone involved in Hirata content
and contribute to society by means of technology

Transformation to competitive management structure
As a group, establish management bases and work to expand business in growth markets while securing profit from existing businesses
7Basic Policies and Measures
Strengthen profitability(1) Business expansion in growth markets
Recognition of EV and semiconductor markets as
growth markets-Review of business portfolio-Concentrate resources, promote growth in EV fieldof the automotive-related equipment business andthe semiconductor-related equipment business-Efforts to create new businesses and expand
business areas(2) Strengthening competitiveness as a global
company
Global support-Optimization of development and production systems
within the Group-Strengthening of cooperation within the group
Business initiatives-Thorough profitability management that utilizes DX-Strengthening of product competitivenessStrengthening of management bases(3) Strengthening of ESG management initiatives
Improving corporate value through ESG management-Formulation of basic sustainability policy-Building of a promotion system-Identify materiality (important issues), visualize
goal-setting and initiatives-Appropriate information disclosure and enhanced
dialogue with stakeholders(4) Realization of management in linewith new normal era
Initiatives for DX-Virtual commissioning utilizing an emulator-Utilization of new technologies (XR, AI, etc.)*-Remote meetings/maintenance* XR: “Cross reality.” A general term for technologies, such as VR and AR, that can perceive things that do not exist in reality by fusing the virtual world with the real world.

8

Basic Policies(1) Business expansion in growth markets(2) Strengthening competitiveness as a global company(3) Strengthening of ESG management initiatives(4) Realization of management in line with new normal era

9Positioning of Medium-Term Management Period for Each Business
自動車関連設備イメージ
Thorough selection and concentration of existing businesses,
positioning new半導体関連設備イメージ
biologicalgenetic resource business as one that will present new challenges

Resource concentration
Automotive-related equipment(EV-related)

Semiconductor-related
equipment
Existing
businessesNewbusiness

Existing×business

Social issues
Reduction ofenvironmental impact
DX= Growth markets

FPD-related
equipmentHomeappliancerelated
equipment

Industrial
robotsPursuit of efficiency

Transfermachines/
Automated
warehousesystems

Medical,chemistryand physics
devices

Automotiverelated
equipment(internal
combustionrelated)

Continuing business

Biological genetic resource
business

Building internal systems
toward commercialization
Business that will present
new challenges
10Growth Plan by Business Segment
Expand profitability and sales growth rate of automotive- andsemiconductor-related business segments to drive Group profitsHigh

FY2018–2021 actual average

FY2024 plan

Sales growth rate

Automotiverelated

Semiconductorrelated

Other automated,labor-saving
equipment/Other
Low

Profitability (operating income margin)
Note: The bubble on the starting point side of the arrows represents the average value for the past four business years(FY2018–2021), and the bubble on the ending point side represents the FY2024 plan.
The size of the bubble indicates the scale of sales. This business growth plan is based on the product categoriesof the new disclosure segments, which have changed from FY2022.

High

11

Background to Positioning as Growth Markets
To concentrate resources on EV- and semiconductor-related equipment businesses,
business areas in which market growth potential is high and Hirata’s strengths can be leveraged
EV market

Values-Worldwide number of EV unit sales
CAGR: 24% (2021–2030)-Car manufacturers
Increase in capital investment-Willingness to achieve the well-beingof everyone involved in the Hirata Group

Semiconductor market-Forecast size of global
semiconductor-related market
CAGR: 8.6% (2020–2030)-Increase in volume of semiconductors
for installation in EVs

Marketgrowthpotential

EV-related equipment business

Hirata’sstrengths

Technical know-how and achievements-Ability to realize the needs of our customers
Automobile assembly lines
Semiconductor transfer equipment
Home appliance lines, etc.
-Information power through global
bases/engineers/business partner
relationships, etc.

Semiconductor-related equipment business

Strengthening of the battery field

Realization of optimal production system(1) Selection of specialized process(2) Development and improvement of key devices(3) Strengthening of product appeal through standardization(4) Clarification of target customers(5) Active collaboration with outside companies
that does not limit us to in-house resources(6) Review of human resource allocations(1) Clarification of target areas(2) Introduction of new production control system(3) Increased production capacity
Increased number of manufacturing staff
Expansion of production area
(4) Efforts to adopt EFEM standardization

12

Strategies and Measures in Battery Field of EV-related Equipment Business (1)Market potential

Strengths✓ Covers major areas, such as batteries,
gearboxes and rotors

Global base

EV global unit sales forecast
Note: ZEVs (BEVs and FCVs), PHEVs
40
millionunits✓ Abundant delivery record of EV-related
equipment to major European and U.S.
automobile manufacturers✓ One-stop solutions, from concept proposal
to design, production start-up, andmaintenance services
North America

Europe19
millionunits
3.1
millionunits

EV-related equipment-compatible category

China/Taiwan

5.6
millionunits

2020 2021

2025

2030

In 2030, EV vehicles expected to account for approximately
30% of new vehicle sales on a global basis

Southeast Asia
Note: The national flags markthe locations of our bases

IGBT

InverterGear BoxEDU

Equipment area underpinned by wealthof achievements/standardization

Battery Module

Battery Pack

LIB Charge
Discharge

Equipment area specialization, such as
standardization efforts

Source: BloombergNEF

Specific initiatives
Lithium-ion battery manufacturing
capacity forecast

Strengthening of the battery field(1) Selection of specialized process
Charging/discharging systems (cell manufacturing processes), module manufacturing
processes, battery pack manufacturing processes(2) Development/improvement of key devices
Development of solution products by engaging in customer development projects
Promotion of addressing by establishment of internal rules for development projects(3) Strengthening of product appeal through standardization
Assembly system for module manufacturing processes and battery pack manufacturing
processes(4) Clarification of target customers(5) Active collaboration with outside companies that does not limit us to in-house resources
Source: BloombergNEF(6) Review of human resource allocations
13

Strategies and Measures in Battery Field of EV-related Equipment Business (2)Aiming to expand business by developing and improving key devices in various battery manufacturing processes,
incorporating them into the production systems of each process, and adding them as standard products.
Specialized processes

Development and improvementof key devices

Strengthening product appeal
through standardization

Chargers/Dischargers

Standardize charge/discharge
system in cell manufacturing
process and provide as a productCharging/discharging
systems in cellmanufacturing
processes

Improvement ofAutomated Warehouses

Dual Head Wire
Bonding Machine

All processes ofmodulemanufacturing
processes
AGV
Improvements

All battery pack
manufacturing
processes

Plant Simulation(Software)Standardize entire module
manufacturing process systemand provide as a productStandardize entire battery pack
manufacturing process systemand provide as a product14

Strategies/Measures for Semiconductor-related Equipment Business
Strengths

Market potential
Global semiconductor-related
market size forecast

Examples of systems

Wide range of capabilities, from wafertransfer to PLP process transfer

Load
port

140
120

11
9

100
80
60
40

20

5
4
44

6
5

55

7
6

Vacuum
robot

EFEM

The market is expected to expand over the
medium to long term as EVs and industrial
IoT devices become more widespread.

Atmospheric
robot

100

Electric
gate valve

60

Aligner✓ Extensive lineup of components✓ Technical capabilities to realize idealtransfer systems (concept, design,
processing, instrumentation, assembly,
inspection, maintenance)

02020 2021 2022

半導体

2030

製造装置

材料・部材

Unit: US$10 billion, Source: Based on various data, including JEITA, Ministryof Economy, Trade and Industry (The composition ratio of semiconductors,
manufacturing equipment, and material parts is assumed to be the same until
2030, based on the Ministry of Economy, Trade and Industry’s Strategy for
Semiconductors and the Digital Industry [Outline], dated June 2021.)◼ Miniaturization requirements:
The low-cost miniaturization needs of the semiconductor
industry, which aims to reduce the size and improve
efficiency of chips, are driving the growth of the industry.
Advanced mounting (3D packaging) is progressing evenin post-processes.
◼ Carbon neutrality requirements:
As a supplier selection criterion, TSMC requires
semiconductor device manufacturers to save 20% by 2030
(20% reduction in the amount of chemical materials, such as electricity, water,and gas, used per semiconductor chip)◼ Capital investment trends:-Response to US-China trade dispute
TSMC’s Chinese customer HiSilicon (a subsidiary of Huawei)
has been subject to tightened U.S. export restrictions, andwhile sales to China have declined, a new 5nm process
semiconductor production plant has been newly established in
Arizona, USA. Announced the establishment of a new
semiconductor production plant with Sony Semiconductor
Manufacturing Corporation in Kumamoto-Semiconductor manufacturer trends
TSMC, Intel, Samsung, SMIC and other companies areplanning record-high capital investment in response toincreased demand, and production capacity is expected to
expand further.

Glossary of Terms◼
◼ EFEM: Located in front of process equipment thatprocesses wafers and panels, transfers wafers andpanels between containers and process equipment in a ◼
clean environment.
◼ Vacuum robot: Vacuum-compatible wafer transfer robot ◼
◼ Atmospheric robot: Atmospheric wafer transfer robot◼

Load port: A device that delivers wafers into various
processing devices.
Electric gate valve: An electric device that maintains avacuum state
Aligner: Wafer positioning device
PLP process: A process in which a large number of chips
are placed on a square substrate that is larger than a wafer.
PLP stands for Panel Level Packaging.

Specific initiatives
Realization of optimal production system(1) Clarification of target areas
Review of organizational structure of related departments in line with clarification(2) Introduction of new production control system(3) Increased production capacity
Approximately 25% increase in manufacturing personnel in semiconductor-related business
Expansion of production area, approximately double in size(4) Efforts toward adoption of EFEM standard products

15Efforts toward Creation of New Businesses and Business Area Expansion
Aiming to create new businesses and expand existing businesses

Efforts toward commercialization related tobiological genetic resource research

Accelerate entry into new areas in existing businesses
by utilizing open innovation

Conducting thorough analysis of synergistic effects
and full-scale examination of M&A with an awarenessof the integration process to maximize post-acquisition
integration effects
16

Efforts in Biological Genetic Resource Research (1)Continue to work on R&D utilizing biological genetic resources (mainly plant genetic resources)
Effective use of biologicalgenetic resources＋

Started joint R&D with Argentina’s National Instituteof Agricultural Technology (INTA) in search for andutilization of plant genetic resources (2019)
Started joint R&D with Indonesian Agency for
Agricultural Research and Development (IAARD) in
search for and utilization of plant genetic resources(2020)

Provision of added value
through proprietary analysis
technology＝

Proposals for healthcare
industry and otherapplications

Functional foods/Supplements
Declining birthrate and aging population= Improvement of infertility
Diet/anemia
Osteoporosis
Eye strain
Cold sensitivity
Improvement of large intestine function

Drug development field
1. Improvement of memory/
cognitive ability
2. Improvement of neurologicalsymptoms (easing of pain)
3. Improvement of kidney function
4. Improvement of liver function

General food field
Add value

Dairy/Marine
aquaculture fields
Improved quality ofPrediction of biosynthetic pathway of glycoside at position 3 ofcompound feed ingredients
gossypetin (flavonol) and isolation of flavonoid 8-hydroxylase withgossypetin synthase activity from model Legume plant (Lotus japonicus).

Provision of feed/
raw materials
Add value17

Efforts in Biological Genetic Resource Research (2)Completion of world’s most advanced laboratory in biological genetic resource researchwith a view to business developments that utilize algae and plants
Potential possessed by algae and plants

Contribution to a sustainable society■Features as CO2 absorbers
Absorb CO2 and perform photosynthesis
CO2 absorption efficiency is tens of times
higher than that of gramineous plants■Water purification ability
Can recover nitrogen and phosphorus

Versatility as a resource■Jet fuel■Animal fish feed
■Food
■Supplements■Cosmetics■Pharmaceuticals

Strengthening R&D system

Around 2023, R&D laboratory will commence
full-scale operations✓ Construction of biogenetic resource R&D labs at headquarters/
Kumamoto plant
Complete with R&D area of approx. 1,500 m2✓ Accelerate R&D by strengthening R&D system within the Company✓ Build a promotion system for commercialization
Conceptual image of biogenetic resource research lab

18

Basic Policies(1) Business expansion in growth markets(2) Strengthening competitiveness as a global company(3) Strengthening of ESG management initiatives(4) Realization of management in line with new normal era

19

Efforts to Strengthen Hirata’s Competitiveness as a Global Company
Implementing Group management, such as strengthening cooperation within the Group, to create synergistic effects for each business.
In each business, we will work on profitability management by utilizing DX and thereby enhance our competitiveness.

Global response

Optimization of development/production systems within the Group-Consideration of local procurement in China, North America and Europe-Optimization of development/production systems (development in Japan, local production for local consumption system
by local procurement and production)-Examination of global procurement

Strengthening of cooperation within the Group-Optimization of cooperation by clarifying the cooperation system between each business division and each affiliated company-Building a system for sharing sales information, etc. as a group-Redefining the positioning and functions of affiliated companies-Efforts to develop global human resources

Business Initiatives

Thorough DX-based profitability management system-Promotion of front-loading activities
Cooperation between departments at inquiry/sales stages and implementation of resource management
Implementation of 3D design, implementation of pre-verification by emulator

Strengthening of product competitiveness-Development to ascertain needs
Implementation of solution sales and product development by participating in customer development projects
Utilization of external resources through collaboration-Standardization to earn income
Strengthening of product appeal by product standardization
20

Basic Policies(1) Business expansion in growth markets(2) Strengthening competitiveness as a global company(3) Strengthening of ESG management initiatives(4) Realization of management in line with new normal era

21Relationship between Hirata Group Philosophy and Corporate Value
Implementing initiatives to achieve both business growth and the resolution of social issues,
putting ESG management into practice while bringing about improvements in corporate value

Emphasis on three value areas to improve corporate value
Improvement ofenvironmental value

Increased economic
valueContributing to the spread ofsustainable social infrastructure
through Hirata’s businesses

Aiming to remain a global company
with diversity of human resources andthe ability to respond to change

Stakeholders

Sustainability Basic Policy
The Hirata Group aims to make everyone involved inour company content and to contribute to the buildingof a sustainable society.
To that end, based on the founding spirit
encapsulated in our Mission Statement—and throughthe spirit of respect for people and the provision of
products and services that show our consideration for
the global environment—we will ensure managementtransparency and soundness while working toachieve both business growth and the resolution ofsocial issues.

Include our shareholders, investors, employees, customers,
business partners and local communities

Medium-Term Management
Plan/Business Activities

Materiality (important issues)

Sustainability Basic Policy
MissionStatement

Improvement ofsocial value

Management
Philosophy

Based on materiality (important issues),
specific management plans, business plans

Based on our basic policy, our 10 areas ofmateriality (important issues)
Based on our Corporate Philosophy,
basic thoughts with regard to
improvements in corporate value andsustainability initiatives

Purpose and aims of the
Hirata Group22

Hirata Group Materiality (Important Issues)
Concerning the Hirata Group’s materiality, we will implement specific action plans
during this Medium-Term Management Plan and contribute to solving social issues.
CategoryE

Theme

I. Response to
climate change

II. Building of asustainable societyS

10 areas of materiality (important issues)

Contributing to the spread ofsustainable social infrastructure
through Hirata’s business1.

Reduction of environmental impact
by our company and in the supply chain2.

Contribution to carbon neutrality
through products and services

Relevant SDGs

3.

Creation of new customer needsin accordance with social changes

Keywords

Green Market

4. Response to progress of digitalization

Green Product5. Securing and training human resources

Green Factory

III. Making the bestuse of people

6. Creating diverse, safe and secure workplaces
7. Improvement of product safety and quality

IV. Strengtheningof our managementfoundation

8. Supply chain management

9. Enhancement of corporate governanceG
10. Risk management

Aiming to remain a global company withdiversity of human resources and theability to respond to change
Relevant SDGs

Keywords

Diversity
Well-being
23

Contribution to Carbon Neutrality by Means of Our Products
Hirata’s all-electric transfer system brings about contributions to carbon neutrality
by reducing the environmental impact of customer plants
Features of all-electric transfer system
Focus on high power consumption of air compressors in customer plants

Green Market
By introducing the all-electric transfer system equipped with our in-house developed
DC brushless motor, pneumatic equipment is no longer required and leads to significant
reductions in electricity usage, CO2 emissions, and running costs

Product lineup

Green ProductGreen Factory

Effects ofreduction
No need for air compressors

75%

75%
・・

・・

reduction*
Reduced power
consumption

・・

reduction*
・・

CO2
emissions

Expanding and upgrading product lineup*Compared with
our previous products

24Basic Policies(1) Business expansion in growth markets(2) Strengthening competitiveness as a global company(3) Strengthening of ESG management initiatives(4) Realization of management in line with new normal era

25

Efforts to Realize Management Adapted to New-Normal Era
Leveraging digital technologies to transform entire businessBusiness DX-Virtual commissioning using an emulator-Utilization of new technologies (XR/AI)-Remote meeting/remote maintenance-Digitization of forms/use of cloud computing-Visualization of plant operational status

Examples of initiatives in business activities
Sales

Design/Development

Management/
Procurement
Quality
Assurance

Manufacturing/
Assembly

Sales
logistics

Effects of initiatives
Installation
work/
Attendance at
operations

Maintenance

Virtual commissioning
3D material
Presentation/
SE*1
VR assembly
processes

Conducting of
VR factory tours

VR training

Implementation of
3D design
Emulator verification

Remote DR*2

*1 SE: Simultaneous Engineering*2 DR: Design Review

Expand value provided
by promoting DX
Quality
improvement/
Early production

Expeditedeliveries

Expansion of
non-face-to-facecontacts

Safetyimprovements

Emulator test run
Remote meetings/
maintenanceImprovements inwork efficiency

26

Management Targets

27

Management Targets (1)In final year, aiming for net sales of 100 billion yen and operating income of 10 billion yen,neither of which was achieved in previous Medium-Term Management Plan

FY2021 Results

Final year of Medium-Term
Management Plan (FY2024)

67.0 billion yen

100 billion yen

3.8 billion yen

10.0 billion yen

Operating profit ratio

5.7%

10.0%

ROE*

5.1%

11.0%

Net sales
Operating profit

Secured ROIC that exceeded the cost of capital (WACC)
and improved capital efficiency* ROE assumed as (Increase in retained earnings for each fiscal year) = (Profit attributable to owners of parent) - (Dividend payment [Note] dividend payout ratio 20%)28

Management Targets (2)Aiming for the numerical values given in the table below, centered on automotive EV-related equipment
and semiconductor-related equipment businesses, which are regarded as growth markets.

(Numerical Plan by Segment)
FY2024 plan
Net sales

Automotive-related

Semiconductor-related

Other automatic
labor-saving
equipment/OtherTotal

40 billion yen

40 billion yen

20 billion yen

100 billion yen

Operating profit

2 billion yen

6 billion yen

2 billion yen

10 billion yen

Operating profit
ratio

5%

15%

10%

10%

Investment to strengthen
production/development
capacity

Capital investment inbiogenetic resource R&D

6 billion yen

4 billion yen(Capital Investment Plan)
Investment plan
Total overthree years of
Medium-Term
Management Plan

IT system-related
investment

1 billion yen

Total

11 billion yen
29

The views, outlooks and forecasts in these materials have been determined by the Company based on the information available at the time of their
preparation, and there is no guarantee of the accuracy of that information. Due to a variety of contributory factors, including changes in thebusiness environment, future business results may differ from the information contained in these materials.

30