Fujikura Ltd.
1-5-1, Kiba, Koto-ku, Tokyo 135-8512
Corporate Communications Div.
Business Planning Dept.
fjk.esg@jp.fujikura.com

Shaping the future with“tsunagu” technology
Fujikura Group

Integrated
Report[Important Points Concerning Forecast]
The financial forecast and descriptions relating to future
predictions for Fujikura Ltd. and its consolidated subsidiaries
contained in this report describe the outlook at the time of editing,and include latent risks, uncertainties and other factors. Therefore,
these forecasts are not a guarantee of future performance, andresults may vary widely due to various important factors.

2022

Foreword

Contents / Editorial Policy
Foreword

2

Contents / Editorial Policy

3

About Fujikura Group

Naoki Okada
Director, President and CEO

43	Power & Telecommunication

5945	Electronic Products and Connector(MVCV)
History

17

Message from the CEO
Message from the CFO
Message from the CTO
Financial Capital/ Non-financial CapitalManagement Plan

31

31 FY2022 Management Plan
33 Sustainability Targets 2025
35 Pursuit of Carbon Neutrality
37 TCFD41	Human Resource Development/
Respect for Human Rights

Basic Policy

53

Corporate Governance
53
59
65

Messages from Outside Directors
Corporate GovernanceTop Management

Special Initiatives of the
Fujikura Group
67
69

71

67

Supporting Fujikura Gakuen
Fujikura Kiba Millennium Woods

Corporate Profile

Detailed Information Concerning
Account Settlement
Please see Financial Data for details about FY2021
settlement of accounts.
https://www.fujikura.co.jp/eng/ir/index.html

Special Initiatives of the Fujikura GroupIn editing the Fujikura Group Integrated Report 2022,
we focused on giving shareholders, investors, and otherstakeholders an understanding of initiatives targetingsustained growth of the Fujikura Group from multiple
perspectives.
• IIRC (International Integrated Reporting Council)
International Integrated Reporting Framework• GRI (Global Reporting Initiative) Sustainability ReportingStandard• METI (Ministry of Economy, Trade and Industry) Guidancefor Integrated Corporate Disclosure and Company-Investor

Fujikura Group
Integrated Report 2022

Research & Development

Editorial Policy

Reference Guidelines

1

51

Corporate GovernanceAll officers and employees of the Fujikura Group are working in unison to continuously stimulate metabolism of change in our businesses to create a new Fujikura. We will contributeto society by linking our outstanding technologies to the creation of value for customers.
I am certain that these efforts will result in our ability to grow along with our customers
and other stakeholders.
Stakeholder expectations concerning the pursuit of sustainable corporate growth andsustainability are increasing with each passing year. Every member of management will
strive to meet the high expectations of all of our stakeholders, and I ask for your greater
understanding and continuing support of the Fujikura Group in the future.

17
23
25
27

Product Introductions, andCommunicating Technical Information

Medium and Long-term Goals

Messages from Management

47 Automotive Products Business
49 Real Estate Business50	Quality Control, Manufacturing DX,

Business Performance

Innovation in a wide range of technologies will take place as the world continues toundergo major changes. I am confident that such societal changes and progress in technology will provide us with opportunities to utilize the outstanding technologies of the
Fujikura Group.

Value Creation Model

Business

Management Plan

Our reason for existing is to use our unique technologies to create value for customers
and contribute to society. I view that as the only path to Fujikura’s survival as a company.

13
15

Systems BusinessMessages from Management

The “Tsunagu” Connecting
Technologies that Support Our Lives
Competitive Superiority

The Fujikura Group’s mission is to “create exceptional value for our customers around theworld using “tsunagu” (the Japanese word meaning “connecting”) technologies” and“dedicate ourselves to providing exceptional products and solutions earning our customers’ trust and contributing to society.” Based on this mission, we have contributed to thegrowth of society and our customers in the telecommunications, energy, electronics, andautomotive sectors.

43

3	
Fujikura Group Corporate Philosophy

11	Three Advantages Providing

On April 1, 2022, I became CEO of Fujikura Ltd.

Business Performance

About Fujikura Group1

Scope of Report
Target period: April 1, 2021 to March 31, 2022
(Includes some content from after April 2022)
Target organization: Fujikura Ltd. and the Fujikura Group

Fujikura Group
Integrated Report 20222

About Fujikura Group

Fujikura Group Corporate Philosophy (MVCV)
Foreword

About Fujikura Group

Since the start of our Third Era in 2005, we have striven to create new paths based on the Group Corporate
Philosophy, MVCV.
In a society that is undergoing dramatic transformation, the Fujikura Group resolves to create new paths withrenewed strength, in order to become a company with the potential to continue long into the future.
• The only way to create these new paths is to provide a value experience exceeding our customers’ imaginations.
•T o exceed our customers’ imaginations, we must be fully aware of the issues our customers face, andconsider everything from their points of view.
•T o be fully aware of the issues our customers face and consider everything from their points of view, wemust strive to acquire a broad range of knowledge and information as highly-active, flexible, and openminded teams.
Finally, the key factor in following this path is for each of us to proceed virtuously as a member of society.

Core Value[Commentary]“Tsunagu” technology refers to the Fujikura Group’s unique
set of capabilities (including skill and knowledge). Throughthe application of our technology, we create opportunities
to connect people, information and power sources.

We dedicate ourselves to providing
exceptional products and solutions, earning
our customers’ trust and contributing tosociety.

We proactively seek better ways to solve customer issues
using our products, skills, and services. By doing so, wedeliver value that fulfills customer needs and thus contributes to solving social issues and building a better society.

Customer Satisfaction“Are you doing enough to ensure
customers are perfectly satisfied?”

Customer satisfaction refers not only to satisfying externalcustomers and consumers, but also internal customers
such as fellow employees. We consider internal and externalcustomers’ viewpoints, think about how to truly fulfill eachneed, and then reflect this in our products and services.

Shaping the future with“tsunagu” technology
Change“Are you willing to take up
challenges to drive progress?”

In order to respond to ever-changing social and customer
needs, each of us will challenge current norms and values.
By doing so, every one of us is accountable for creatingchanges for the better in people, organizations, products,
and solutions.

Collaboration“As a Fujikura associate, are you driven towork together with others to deliver thebest possible result for our company?”

In the Fujikura Group, each one of us acknowledges
individual differences and talents. We encourage and support
one another’s efforts. As a whole, we strive to create products and solutions that meet the existing and potential needsof customers through cross-organizational cooperation.

フジクラグループ[Commentary]

We strive to always be the pioneers in our field and tohave a positive impact on society. We realize this throughbeing aware of changes in the world. In addition, we
continuously develop products and solutions that meetthe existing and potential needs of our customers.

Each individual within the company will
endeavor to become an essential player,
thus developing a team that can truly help
Fujikura make its mark on the world stage.

Everyone in the Fujikura Group understands our common
goal and plays his/her part in achieving it. With everyone
working together as one, the Fujikura Group competes on
the world stage.

Fujikura Group
Integrated Report 2022

1 L et’s proactively take an interest in social and market trends and reflect on ourwork

2 Let’s always think about how to provide value that exceeds expectations
3 Let’s be open to diverse opinions and create new ideas
4 Let’s be bold in trying something different
5 L et’s start with our aspirations and work back from those to calculate what thenext action should be

6 Let’s be professional and accountable for our own actions

2022
Show interest proactively

Exceed expectations

Special Initiatives of the Fujikura Group3

We strive to become the leading player
in our markets by utilizing our “tsunagu”
technologies, and tirelessly developing
innovative and useful products andsolutions.

Standards of Conduct

統合報告書
Corporate GovernanceFujikura’s vision is to be the most trusted
partner in our markets.

We want our customers to reach out to us first with theirissues and concerns. We can ensure this by building trust
through consistently fulfilling our promises and working
together with our customers as their partner of choice.
With credibility built over time, we can create a better
tomorrow for our customers.

Business Performance

Vision[Commentary]

Management Plan

The Fujikura Group’s mission is to create
exceptional value for our customers aroundthe world using “tsunagu” (the Japaneseword meaning “connecting”) technologies.

Messages from Management

MissionEmbrace different opinions
Drive change
Aspire first

Take ownership with integrity
Fujikura Group
Integrated Report 2022

4

About Fujikura Group

History
From Our Founding to Today—The Beginning

Telecommunication
systems

Known for its technology, Fujikura has contributed to the creation of an abundantsociety by establishing electric power and communications infrastructure
Five large braiding
machines imported
from the USA by
Zenpachi Fujikura

1932

44 kV triple-core SL cable supplied to the
Yamaguchi Prefecture Electric Power Bureau(a first in Japan)

1935

Patent acquired on Fujikura’s
proprietary high-frequency
coaxial cable

EnergyTelecommunication
systems

Electronics

Automotive
electronics

Expansion into the power and telecommunication systems and diversification
leading to current business
1981

Japan’s first OPGW
(Optical Fiber Composite
Overhead Ground Wire)*1
developed

1984

Provided coiled cords to connect
keyboards to PCs, and grew to holda 70% share of the global market

Messages from Management

1887

1945

—2nd Phase of
Reinvention

About Fujikura Group1885

Energy1985

World’s first core alignment
optical fiber fusion splicer*2
developed

Management Plan

*1 OPGW: An abbreviation of optical fiber composite overhead ground wire. An overhead cable incorporating optical fibers.
*2 Optical fiber fusion splicer: A machine used to fuse optical fiber cables together.

1901

Fujikura Electric Wire &Rubber Co., Ltd. is established(Representative: Tomekichi
Matsumoto)Fujikura Electric Wire
Corporation is established(Now Fujikura Ltd.)1910* Equity method affiliate

Beginning

Post-war Era of Recovery & High Growth1885	
Zenpachi Fujikura founded the company and began
manufacturing silk and cotton insulated winding
wires in Kanda-Awajichō1887	Zenpachi Fujikura imported five large braiding
machines from the USA
1893	Company began manufacture of firstrubber-insulated wires in Japan1901	Fujikura Electric Wire & Rubber Co., Ltd.
established, began producing rubberized fabric1945	Complete destruction of Fukagawa plant during
bombing of Tokyo (Rebuilt the same year)
1949	Delivery of Japan’s first 24-core TV camera
cables to NHK (Japan Broadcasting Corporation)
1954 Numazu plant completed
1957 Began manufacturing wire harnesses
1958 Established Tama Fujikura Gakuen
1965	Completion of the Sakura plant and beginningof manufacturing of printed circuits using a die
stamp method*3
1970 Suzuka plant completed
1974	Began inspecting optical fiber base materials
manufactured by the CVD method*4
1979	Began manufacturing FPCs (Flexible Printed
Circuit boards) for electronic devices

Laying the Foundations of Fujikura
1910 Fujikura Electric Wire Corporation established1919	
Established Fujikura Gakuen, a special facility formentally-challenged children, on Oshima island
1923	Head office and plant relocated to Fukagawa
where it was totally destroyed by fire in theaftermath of the Great Kanto Earthquake(Rebuilt the following year)
1931	Began manufacturing “Fujikousen” electric wire
for aircraft

Fujikura Group
Integrated Report 2022

Fukagawa Plant being rebuilt following
damage in WW2

Numazu Plant upon completion

Sakura Plant upon completion

Suzuka Plant upon completion*3 D ie stamp method: A wiring circuit pattern is etched into a
die to create a press die. Copper foil is then layered on topof a plastic substrate and pressed while being heated. This
causes copper foil to be pressure bonded to the surface ofthe substrate only in the pattern of the circuit etched into
the die.
*4 CVD method: Chemical Vapor Deposition method.

Post-earthquake Recovery andTechnological Advances
1935	Patent acquired on the Fujikura-type high-frequency coaxial cable1941 Began manufacturing aluminum wire
1943	Began manufacturing Fujikura-type 100 kW
coaxial cables

5

Founding location:
Kanda-Awajichō Plant

Special Initiatives of the Fujikura Group

Fujikura Waterproof FabricCorporation (Now Fujikura
Composites Inc.*)

Primary Endeavors

Corporate Governance

1910

Business Performance

Establishment

Reconstructed Fukagawa Plant

Fujikura Group
Integrated Report 2022

6

About Fujikura Group

History
From Our Founding to Today
Telecommunication
systems

Electronics

Automotive
electronics

Strengthened our technological footing while pressing forward with globalizationand new businesses
1998

500 kV CV cablesupplied for thecable line between
Shin-Keiyo andShin-Toyosu
Substations

Supplied world’s largest 500 kV OF submarine DC cable to Kansai
Electric Power Co., Inc.
and J Power (ElectricPower Development
Co., Ltd.)

2002

Supplied high-speed transmission
cable for connecting servers

Electronics

EnergyTelecommunication
systems

Automotive
electronics

Real estate

Set forth a long-term vision and pursued further technological development andmarket access2007

Critical current record*1
shattered with Yttrium-based oxide
superconducting wire*2

2018

Released optical cable with themost cores in the world (6,912
cores Wrapping Tube Cable®
(WTC®))

Messages from Management

1996

2005

—3rd Phase of
Reinvention

About Fujikura Group

2nd Phase of Reinvention

Energy2020

Fujikura’s cold plates used in
the Fugaku supercomputer

Management Plan

*1 New world record for high performance and length.
*2 Chemical compounds that cause transition to a superconductive state at 90 K or higher.
Business Performance

Primary Endeavors
1992	Changed corporate name from Fujikura Electric Wire
Corporation to Fujikura Ltd.
1993	Tokyo R&D center completed
Delivered 500 kV CV cables and Hokkaido-Honshu opticalfiber integrated submarine cables
1998	Supplied world’s largest 500 kV DC OF submarine cables
to Kansai Electric Power Co., Inc. and J Power (ElectricPower Development Co., Ltd.)
2000	Established optical component manufacturer, Fujikura
Fiber Optics Vietnam Ltd., in Vietnam
2001	Commercialized and began marketing FTTH*2 opticalfiber products
Established Fujikura Electronics Shanghai Ltd. (FESL)2002	Supplied high-speed transmission cable for connecting
servers*1 VAD method: Vapor-phase Axial Deposition Method*2 F TTH is an abbreviation of Fiber to the Home. It is an access method
for linking telecommunication provider equipment to each home via
optical fiber.

2005	120th anniversary; adoption of new management
principles: MVCV (Mission, Vision, Core Value); andestablishment of America Fujikura Ltd. to manufactureand sell electrical components for telecommunications
and automotive applications
2007	Shattered the critical current record with an Yttriumbased oxide superconducting wire2008	Spanish wire harness manufacturer becomes a wholly
owned subsidiary of Fujikura and changes corporatename to Automotive Europe S.A.U.
2009 Began manufacturing fiber lasers
2010	Established Fujikura Electronic (Thailand) Ltd. by unifying
seven Thai group companies; completed ‘Fukagawa
Gatharia’ (Fukagawa re-development project); opened
Fujikura Kiba Millennium Woods Bio-Garden

Manufacturing opticalfiber preforms using
the VAD method

Developed
world’s first multi
optical fiber
fusion splicers

7

Fujikura Group
Integrated Report 2022

Established Fujikura Electronics(Thailand) Ltd.

External view of head office

Fukagawa Gatharia
redevelopment project

Established Fujikura Kiba Millennium
Woods bio-Garden

2011	Great East Japan Earthquake, and Fujikura Group’s
manufacturing bases damaged by floods in Thailand
2013	Introduced in-house company system throughreorganization
2015	The VAD Method was Recognized as a Prestigious IEEE
Milestone*3
2016	The Fujikura Group declared complete recovery fromfloods in Thailand
Established Fujikura Group Long-term Environmental
Vision 2050
2017	Transitioned to a corporate structure with an Audit &Supervisory Committee
Established 2030 Vision2018	Released optical cable with the highest fiber count in theworld (6,912-fiber Wrapping Tube Cable® (WTC®))
2019 Joined the RE100 global corporate leadership initiative
2020	Fujikura’s cold plates used in the Fugaku supercomputer
Formulated 100-Day Plan to turn around operations
2021	Abolished in-house company system through reorganization
Established the electronic components company, Fujikura
Electronic Components (Thailand) Ltd.
2022	Moved to the Prime Market on the Tokyo Stock Exchange

Special Initiatives of the Fujikura GroupEra of Globalization and New Technologies

1980	Developed single-mode optical fusion splicers
Led the world in developing ultra-low OH fibers using the
VAD method*1, an independent technology developed inJapan1981	Japan’s first OPGW (optical fiber composite overhead
ground wire ) is developed
1984	
Established local subsidiary Fujikura Electronics (Thailand) Ltd.
1985	100th anniversary of Fujikura’s founding, developed theworld’s first core alignment fusion splicer
1987	Successful fabrication of oxide superconducting wires,and completion of the Optical Electronics Laboratory
1988	
Developed world's first multi optical fiber fusion splicers
Established local subsidiary Fujikura Europe Ltd. in the UK
Established PCTT Ltd., DDK (Thailand) Ltd. (Began manufacturing FPCs and connectors in Thailand)

Corporate Governance

Era of Turbulence and Trials*3 IEEE Milestone: A program administered by the world’s largest
professional association, IEEE (Institute of Electrical and Electronics
Engineers) which recognizes technological innovations that are at least
25 years old and have received high praise internationally.

Fujikura Group
Integrated Report 20228About Fujikura GroupThe “Tsunagu” Connecting Technologies
that Support Our Lives

Offices andData Centers

Fujikura is involved in ultra-high voltage transmission
systems and many other high capacity power
distribution systems used to provide a stable supplyof electricity from remote areas and improve thereliability of line routes.

We provide the optimal optical cabling system forthe customer’s needs with our extensive line-up of
the latest in optical fiber technology.

Electric power cables

Optical termination racks
and termination cabinets

Households

We are working to commercialize mmWave
communication devices for use in next-generation
high-density high-speed wireless communications in
the 5G era.

We provide a wide variety of electronic components
and solutions that contribute to making smartphones,
tablets, and other peripheral equipment smaller,
lighter, and thinner, such as flexible printed circuits(FPC), micro coaxial cable (MCX), and connectors.

28 GHz mmWave phasedarray antenna module

60 GHz mmWave wirelesscommunication module

Optical fiber mass
fusion splicers

Aluminum conductor
steel-reinforced cables(ACSR)

Opticalconnectors

Control cable

920 MHz band small-diameter LCX (leaky coaxial cable)

FPC

Management Plan

SWR®/ WTC®

5G

Messages from Management

Power
Generation Plants

About Fujikura GroupThe Fujikura Group uses the “tsunagu” (connecting) technologies it has developed through electrical wire andcable manufacturing since its founding in 1885 to provide products for people’s lives and society in a wide
variety of areas. Our goal is to realize a “Mirai” (future) society that is comfortable and sustainable.

Earphone cable connectors

Heat pipe fornotebook PCs

Business Performance

Automotive

Hospitals

QoL Improvers

For industrial equipment, we supply fiber lasers thatcan be used to cut, weld, otherwise process metal,
and various types of products and components
suitable for different purposes in plants.

We are pursuing development of new products
and new technologies that integrate electronics
technology and automotive products technology
to respond to trends such as CASE (Connectivity,
Autonomous, Sharing and Electrification), in addition
to the conventional environmental, safety, andcomfort needs.

We have focused on imaging and miniaturization, which
are core technologies in the medical sector that derivefrom fiber optic and electronic technology, and are working
to expand the electronic medical device business.

We advance medical care and improve healthliteracy by delivering various kinds of solutions foradvanced medical care, and designed for specificareas and occupations, and will thereby contributeto longer healthy life spans and quality of life (QoL).

Corporate Governance

PlantsConnectors forindustrial robots
Automotive
products

Ultra-thin fiberscopeusing image fibers

IVUS* catheter* Intravascular ultrasoundSpecial Initiatives of the Fujikura GroupkW-grade highvoltage fiber laser

WABE Package®, adevice-embedded
board built into thincomponents

Partial discharge
measuring device

9

Fujikura Group
Integrated Report 2022

LILIA live wire sheathfault locator

Rapid charge connector

Seat belt reminder

Ultra-thinendoscope using
CMOS sensor

Compact oxygen sensors
Conventional sensor on the left, newly
developed sensor on the right

Fujikura Group
Integrated Report 202210About Fujikura Group

Three Advantages Providing
Competitive Superiority

Advantage

2

Long-term Relationships of Trustwith Customers

About Fujikura GroupThe Fujikura Group recognizes three competitive advantages it has for using its outstanding technologies andknowledge gained through “tsunagu” (connecting) technologies to successfully provide optimal solutions forsocial problems. These three advantages are 1) technological strengths, 2) long-term relationships of trustwith customers, and 3) ability to respond to social changes.

We work with the customer as one team to provide solutions

Advantage

Technological Strengths

Consultation on new
product development,
etc.

“Tsunagu” (connecting) technologies to solve social problems

Provision of solutions
and stable supply

The Fujikura Group is using its “tsunagu” (connecting) technology platform as a base for pursuing
initiatives aimed at resolving social problems. We aim to develop our businesses by solving
environmental problems, energy problems, and other social problems, and are actively pursuingdevelopment of new technologies and new products, mainly in the energy and telecommunication
systems, and the electronic products and connector areas.

Fujikura Group
Search out the latent needs of our customers’
end-users and society and develop products
and services demanded by the public.

“Tsunagu” (Connecting) Technologies Platform and Markets

Cutting-edge Fundamental Research

Future-oriented R&D• Optical devices• Optical fiber
fusion splicers• Optical
Opticalcomponents
telecommunication • Opticalsystems
connectors• Optical cables• Optical fiber

Platform technologies

Wiring components inelectronic equipment• Electrical wire
• FPC
• Membrane switches• WABE• Connectors

Electrical wires
and cables• Automotive wire harnesses• Industrial wiring• Material technology• Advanced
equipment technology• Observation &analysis technology• Precision processing technology• AI technology• Analyticaltechnology

Advantage

3

Ability to Respond to Social Changes
The ability to maintain resilience developed by overcoming difficulties
The Fujikura Group has always succeeded in recovering from the numerous disasters it has
experienced. Our high degree of unyielding resilience in the face of difficulties is a part of
Fujikura’s DNA. The major flooding in Thailand is 2011 is a symbolic example of this. Although
the flooding also dealt a devastating blow to Fujikura Group manufacturing locations, all Group
employees demonstrated their strong will to restore operations and recover. Their teamwork
led to a declaration of complete recovery in 2016. We also owe our success in recovering to thelongstanding deep relationships of trust with our customers, who gave us another chance atdoing business with them.

Corporate Governance• Coaxial cables• Micro heat pipes• Cold plates

Business Performance• mmWave modules• Energy-harvesting
sensor network
systems

OpticalThermalFiberlasersSuperconductors

Wireless

Open Innovation

Optical sensing
applications• Pressure,oxygenManagement Plan

Fujikura’s concept for building
relationships of trust“Tsunagu” (Connecting) Technologies Platform

Sensors

Messages from Management

1

Customers

The Fujikura Group integrates sales, business units, manufacturing, and development
to provide products that meet the needsof customers. The Group builds strong
relationships with customers and works withcustomers as one team to provide solutions
by meeting the needs and exceeding the
expectations of customers. We call this“customer value creation.”
We are working to ensure sustainablegrowth of the Fujikura Group and create abetter society by finding solutions to issues
experienced by customers and society. We
accomplish this by making customer value
creation part of the business activity cycle.

Special Initiatives of the Fujikura Group

Markets

Telecommunication
systems

Industrial
equipment

Electronics

Medicalequipment

Automotive

EnergyFlooded Plant in Thailand

11

Fujikura Group
Integrated Report 2022

Declaration of complete recovery in 2016

Fujikura Group
Integrated Report 2022

12About Fujikura Group

Value Creation Model
Based on the Mission, Vision, and Core Values (MVCV), which constitute the corporate philosophy of the Fujikura Group,
we will work to achieve sustainable growth of the Fujikura Group and a better society by using our “tsunagu” (connecting)technologies to work with our customers as one team and solve the problems of our customers and of society.

Input

Business Process

OutputOutcome

ImpactWhy we exist

Inputs forbusiness activities

Source of value creation

What we deliver
to society

Enhancement of the
Fujikura brand

What we strive for“Tsunagu” (connecting) solutions
to solve the problems of acomfortable and sustainable“Mirai” (future) society

Customers, Shareholders,and Employees

Financial Capital

Working withcustomers as a team toprovide solutions

Investment in growthbusinesses while also
carefully managing
earnings and assets

Evolving & Developing
Existing Businesses(Forecasting)(R&D)
Rapid materialization of next-generation technologies and products“Tsunagu” (Connecting) Technologies

Intellectual
CapitalPlatform consisting of seven technologies
Wireless

Human CapitalSuperconductors

brandLong-term
Relationships of
Trust

ufa
c tu
rin

Developing humanresources to lead innovation and fostering
a culture to facilitate
leadership

Internal wiring in devices

ThermalPossessing excellent
customers and building
strong relationships oftrust

Ability to
Respond to
Social Changes

Organizational culture
capable of responding
to change(Backcasting)

Building deep relationships of trust with customers and suppliersocu
Materials Pr• Maintaining & strengthening
competitiveness• Evaluation in the capital markets

Stakeholders impacted• Customers, shareholders,and employees

New sustainability
Targets

Global Environment
Value created• Contribution to transition tocarbon neutrality• Product lifecycle

Issues recognized• Controlling all GHG emissions• Responding to the risks ofclimate change

2030 Vision

Stakeholders impacted
Global Environment

Searching out new technologies andbusiness areas

e
rem

nt

Society
Value created• Abundant lifestyles through anadvanced information society• Improving labor productivity throughHealth Management®*

Corporate GovernanceSocialRelationship
CapitalContributing toa society with
next-generation mobility• Wire harnesses,
charging connectors,
and other products forelectric vehicles (EV)

Accessing New Areas of Businessg
Three advantages ofcompetitive superiority

Improving quality of life
(QoL)
• Medical products, etc.

Issues recognizedBusiness Performance

Concentrating
investment in key
areas where Fujikura’s
leadership in technology is necessary

Sensors

lopment
Deve

Electrical wires & cables OpticalUtilization of various
energy sources andefficient management• Electric power,
telecommunication
cables, etc.

• Sustainable growth of Fujikura• Creation of customer value

Management Plan

SalContributing to anadvanced informationsociety• Optical fiber cable,
FPC, connectors, etc.

h&
arc
se
Re

Prioritizing occupational
health and safety while
engaging in rigorously
selected capital
investments

M an

Fujikura contributes to customer
value creation and society through our“tsunagu” (connecting) technologies.

w-up
follo
e
l
sa
sto
/P
es
Technological Strengths

Manufacturing
CapitalValue createdAchieving the
medium andlong-term visionand contributing
to a sustainable
society

Messages from Management

Fujikura Group
corporatephilosophy
MVCV

About Fujikura Group

PurposeLong-term
Environmental
Vision 2050

Natural Capital

Minimizing negative
impact on the global
environment, in linewith the long-term
vision13

Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura Group

Issues recognized• Ethical supply chain management• Ascertaining & responding to social trends

Stakeholders impacted
suppliers, society* Health Management® is a registered trademark of
the non-profit organization, Kenkokeiei.

Fujikura Group
Integrated Report 2022

14About Fujikura Group

Medium and Long-term Goals

Fujikura Group
Corporate
Philosophy(MVCV)

About Fujikura GroupThe Fujikura Group creates value for customers and contributes to society through our unique technologies,
based on our mission to “create exceptional value for our customers around the world using “tsunagu” (theJapanese word meaning “connecting”) technologies,” as stated in our Mission, Vision, and Core Values(MVCV), our corporate philosophy.

2030 Vision

Energy& Industry

Contributing to therealization of anadvanced informationsociety

Efficient management
using a broad range
of energy sources

Life-Assistance

VehicleImproving quality oflife (QoL)

Contributing to asociety with nextgeneration mobility

Messages from Management

Mission

Advanced
Communication

Four Market Areas

Sustainability
Targets 2025
F

Finance &FutureE

Environment

S

SocialG

Governance

Turnaround strategy to move from the operational
turnaround phase to the sustainable growth phase

Long-term Environmental
Vision 2050
Challenge

1

Zero CO2 emissionsat plants by 2050

Pursuit of green transformation (GX)
Challenge

2

Minimize use ofwater at plants
and wastewater
management

Challenge

3

Symbiosis between
plant workers andnatureChallenge

4

Effective use ofresources andresource cycle

Corporate Governance

Core
Value

Continue to create
exceptional value for ourcustomers around theworld using “tsunagu”(connecting) technologies.

Business Performance

VisionFujikura Groupbusiness
environment

Management Plan

Solving the problems of a“Mirai” (future) society

The Four Challenges

Special Initiatives of the Fujikura Group

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Fujikura Group
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Fujikura Group
Integrated Report 2022

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Messages from Management

Message from the CEO
About Fujikura GroupThe new Fujikura has been launched
and is steering toward the sustainablegrowth phase.

business structure in FY2020 and FY2021 that will be
remembered as a momentous event in Fujikura’s history. We reached our goals for the many structural reform
measures in the 100-Day Plan and achieved a V-shaped
recovery in performance owing to steady results in thetelecommunication systems and electronic products
and connector businesses and various other efforts.
Formulation of the mid-term business plan is currently
underway and it will be announced in May 2023.
As the President and CEO, my mission is to steadily
shift to the sustainable growth phase. I think that having
been designated as the leader of a new generation symbolizes the new Fujikura and certainly want to rise tosuch expectations.

Management Plan

I have been involved in the manufacture and development of optical cables since I joined Fujikura Electric Wire
Corporation (now Fujikura Ltd.) in 1986. Subsequently
appointed as senior vice president and head of the
Corporate Strategy Planning Division in April 2020, thenDirector and COO in June 2021, I became Director,
President and CEO in April 2022. As the person leading
the entire Fujikura Group, steering toward the sustainablegrowth phase and decisively launching the new Fujikura, I
have experienced a renewed sense of determination.
Fujikura, which has operated its business continuously for 137 years, posted a record high net loss of
38.5 billion yen in FY2019 and abandoned the 2020
Mid-term Business Plan mid-course. We resolutely
carried out a radical reform of the management and the

Messages from Management

Launching the New Fujikura

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Fujikura Group
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*1 F
 TTH: An abbreviation of Fiber to the Home. It is an access method
for linking telecommunication provider equipment to each home via
optical fiber.
*2 An abbreviation of Spider Web Ribbon®/Wrapping Tube Cable®.

Spider Web Ribbon® (SWR®) refers to opticalfibers attached in a manner resembling a spider’s web.
Bundling these attached fibers into a cable is called
Wrapping Tube Cable® (WTC®). Offering thinner, lighter,and higher density than conventional cables, SWR® is a
strategic product of Fujikura that can reduce installation
construction costs.

Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura Group

Director, President and CEO

cable that adds high value. This has now become astrategic product for Fujikura. Experiencing the eventual
decline of optical cable, where Fujikura possesses hightechnical expertise and for which strong demand wasprojected, taught me that every product and businesshas a lifespan and a manufacturer cannot survive
without continuous metabolization.

Corporate GovernanceNaoki Okada

I think rebuilding our brand as a technology company isimportant in order to achieve sustainable growth. The
phrase, “Fujikura, a technology leader” is something
we have long been talked about internally, and it could
be described as Fujikura’s DNA. At the time I joined
the company, we were taught that the only way for
Fujikura to compete against the mighty competition was
to narrow our focus and succeed through technology. I
think this teaching, “Fujikura, a technology leader” waspresented in words that aptly express the spirit of a challenger who has competed with rival companies throughthe resourcefulness and skills of our employees.
The development of optical cable, which wehave pursued over many years, is an example of this.
Fujikura is proud of the high technical expertise wepossess in optical fiber, which has long led growth.
However, demand declined after use of FTTH*1 became
widespread in Japan and the business environment
turned severe. Amid that environment, we succeeded
in developing SWR®/WTC®*2, a different type of opticalBusiness Performance

Rebuilding Our Brand as “Fujikura as a Technology Company”
Which Constitutes Fujikura’s DNA

18

Messages from Management

Message from the CEO

Goals of Structural Reform Achieved

19

Fujikura Group
Integrated Report 2022

Addition of CFO and CTO to Support
the CEO Function
The new executive structure became operational in April
2022. In addition to my position as CEO, the positionsof Chief Financial Officer (CFO) and Chief Technology

First Step Toward the Sustainable
Growth Phase
FY2022 is an important year in which we embark on thejourney of the new Fujikura. There are currently numerous
external risk factors in the political and economic climate
such as the COVID-19 pandemic, the trend in exchange
rates, the steep rise in copper and other raw material prices and the price of crude oil, the semiconductor shortage,
U.S.-China conflict, and the Russian invasion of Ukraine.
In an environment of increasing uncertainty, it is important
to steadily complete structural reforms and engage inwell-modulated business management in growth areas
to put Fujikura on the path to sustainable growth. We are
currently formulating the mid-term business plan thatwill begin in FY2023. We intend to announce the plannext May, but I will share my thoughts at present on the
direction of initiatives in each division as part of that plan.

• Telecommunication Systems Business Unit
While Japan has nearly completed installation of opticalfiber, the various countries in Europe and the U.S. have
yet to reach a sufficient level of installation. Europe andthe U.S. are putting earnest effort into investing in opticalfiber and other telecommunication system infrastructureaccompanying the launch of 5G service. In addition to thebusiness we have long operated in North America, ourpresence is increasing in the UK where telecommunication providers and the London Underground have opted
for SWR®/WTC® to install 5G communication networks,
and we are also about to expand to the European
continent. In addition to such FTTx purposes, Fujikura isalso taking steps to capture business for hyperscale data
centers, the demand for which is increasing.
SWR®/WTC® is at the core of the optical cabletotal solution business we are putting effort into. We
are using SWR®/WTC® to reduce the total cost forcustomers (including construction costs), and consider it
an environmentally friendly product that will reduce theenvironmental impact from manufacturing, transportingand installing it, compared to conventional cable. Fujikura
is one of the few manufacturers who can provide a totalsolution business for optical fiber that includes everythingfrom the manufacture of optical fiber to installation, theperipheral equipment and parts for maintenance, construction, and performing maintenance. Moreover, Fujikura’s
SWR®/WTC® has made cables thinner and lighter withhigh fiber density, and can increase fiber capacity without
performing additional public works construction. We
provide total solutions by assembling and combining
various components that incorporate advanced technology,
such as the optical fiber fusion splicers we command
top global share of, in addition to connectors. These totalsolutions shorten construction time and can be installed byunskilled workers. We also anticipate steady growth of thetelecommunication systems business as a business pillar
in the next mid-term business plan.

Special Initiatives of the Fujikura GroupThe 100-Day Plan detailed more than 100 action items
and we have resolutely pursued the unreserved selection
and concentration of businesses by reducing fixed costs,
stabilizing business, optimizing the business portfolio, andimplementing various other measures, without designating
anything as off-limits. These measures include injecting resources into concentrated businesses, selling subsidiaries,
being strictly selective in capital investments, consolidatingand eliminating locations, and selling real estate.

We were able to achieve our goals in the operational turnaround phase by implementing the key measures of“strengthening of corporate governance” and “unreserved
selection and concentration of existing businesses” inthe 100-Day Plan. Stated in terms of cost reductions, weachieved 14.5 billion yen in cost reductions in FY2021 andanticipate 16.4 billion yen in cost reductions in FY2022,
compared to the target of 15.0 billion yen (vs. FY2019). We
also sold assets to generate cash and thus generated 21.0
billion yen in FY2021. In FY2021, we posted record highnet income of 39.1 billion yen and were able to resume dividends as a result of these initiatives.

Direction of the Next Mid-term Business Plan

Corporate Governance

Unreserved Selection and Concentrationof Existing Businesses

Record High Net Income in FY2021

Fujikura switched to the corporate structure of a company
with an Audit & Supervisory Committee in 2017 tostrengthen the supervisory function of the Board of
Directors. We have subsequently pursued other measures such as increasing the number of outside directors,
among other measures.
There are currently 11 directors. Four directors,
including myself (as CEO), are in charge of business execution, and the other seven directors (five of whom areoutside directors independent of company management)
have no executive duties and are responsible for thesupervisory function. The five outside directors include
directors who are experienced management, are from afinancial institution, are an attorney, or are a C.P.A. The
current composition of the Board of Directors is the composition needed for the new Fujikura, or in other words,
needed for formulating the next mid-term business plan.

Business Performance

Fujikura resolutely implemented a drastic restructuring ofmanagement, halving the number of directors and corporate officers and establishing the new positions of Chief
Executive Officer (CEO) and Chief Operating Officer (COO)
on April 1, 2021. The management restructuring resulted
in outside directors comprising a majority of Board of
Directors members and further improved the supervisory
function. President Ito (now Chairperson of the Board of
Directors) became the CEO and gave his undivided attention to resolving company-wide management issues andrestructuring our businesses. I (an executive officer at thetime) served as COO in charge of operating performancein all core businesses. This management restructuring was
implemented to clarify the division of responsibilities andagilely carry out unreserved structural reform and pursuitof business to maximize benefits. In terms of the organization, the in-house company system was abolished and a
vertically integrated organizational structure was created byadopting a business unit system directly supervised by the
COO. We also strengthened governance by establishing a
new Corporate Governance Unit.

Supervision by the Board of Directors

Management Plan

Strengthening of Corporate GovernanceIn the telecommunication systems business, we
switched the business model from sales of optical fiber andpreform that relied heavily on China, to a high value-added
optical cable business targeting Europe and the U.S. as themain markets. SWR®/WTC® is at the core of the optical cable total solution business, which encompasses peripheral
equipment and parts, construction, and maintenance.
In the FPC business, we switched to an order-based
strategy of specializing in products that utilize Fujikura’s
technological strengths to add high value. We also built
an efficient structure by restructuring and concentrating
the production and sales functions, which were distributed among multiple companies, in a wholly owned subsidiary to create one corporate group and revive the business.
This restructuring was completed in May 2022 and thebusiness became Fujikura Printed Circuits Ltd.
In the automotive wire harness business, we restructured management of the business in Europe, which had
posed particular problems, and brought it under stronger control by Japan, while also improving the productivity of locations, eliminating unprofitable products, andimplementing other measures. Other structural reforms
were implemented by relocating the production locationin Eastern Europe to North Africa.
In the energy-related business, we have implemented measures to create a streamlined, efficient structure
and revive the business. These measures included consolidating the domestic cable installation business in a Groupsubsidiary, closing electrical cable production locations overseas, and withdrawing from the overseas EPC (engineering,procurement, and construction) business. The Overhead
Transmission Line (OTL) and metal cables business remaining in Fujikura was also split into in a separate company,
Fujikura Energy Systems Ltd., on October 1, 2022.

Messages from Management

In FY2019, Fujikura saw a large decline in revenue in
optical fiber, FPC (flexible printed circuit boards), andautomotive wire harnesses, the three pillars of ourbusiness. Although we focused on profitability rather
than pursuing scale, we were unable to respond agilely tochanging market and customer conditions as a result ofexcessive capital investment. Resources were spread out
in various businesses and this ended up reducing our ability to manage the entire business from a company-wide
perspective. These were the main factors behind thedeterioration. We abandoned the mid-term business plan,
which was scheduled to continue through FY2020, midcourse and formulated the 100-Day Plan to turn around
operations, in September 2020. The plan was narrowed
down to two key measures, “strengthening of corporate
governance” and “unreserved selection and concentrationof existing businesses,” and we have worked to quickly
turn around operations.

of “Fujikura, known for technology” while maintaining abroad perspective on each area.
About Fujikura Group

100-Day Plan to Turn Around Operations

Officer (CTO) were established in Fujikura for the first time.
The CFO and CTO are responsible for formulating andimplementing the financial strategy and technology anddevelopment strategy, respectively, each of which requires
a high degree of expertise. I will pursue company-wide
strategy as CEO under this structure.
A CFO was appointed to build a solid financial structure. We have now transitioned from the turnaround phaseto the growth phase and how to effectively use limited resources is the important issue. Fujikura needs a financial
expert as a director and I think a CFO is needed to specify
and impose financial discipline from an external, objective
perspective. We therefore invited Koichi Takemoto to serveas CFO, as a financial professional.
The CTO is responsible for the company-wide technology strategy. Fujikura operates in a wide range of businesses such as telecommunication systems, automotive,
electronics, energy, and other areas, and is also focusing on new businesses. We nominated Tatsuya Banno toserve as CTO because we wanted him to fulfill the roles ofstimulating business metabolism and rebuilding the brand• Electronic Products and Connector
Business Unit
The FPC business, which was struggling, was split into
a separate company, Fujikura Printed Circuits Ltd., andis now positioned to stabilize the business to a certain
Fujikura Group
Integrated Report 2022

20

Messages from Management

Message from the CEO• Automotive Business Unit

Quality is Corporate Value

Aiming to Achieve Carbon Neutrality in
Fujikura and Contribute Through Our
Businesses
We established Fujikura Group Long-term Environmental

21

Fujikura Group
Integrated Report 2022

Vision 2050 in 2016, and are targeting achievement of
the four challenges to go carbon neutral. As part of thoseefforts, we affirmed the GX (Green Transformation)
League Basic Concept recently announced by the

To Our Stakeholders
Sowing the Seeds to Leave a Better
Business to the Next Generation
Fujikura’s purpose is to create value for customers andcontribute to society through “tsunagu” (connecting)technologies. In light of this, I think my first major role is
to manage the business in a well-modulated manner toenable Fujikura to step onto a path of vigorous growth in
the next mid-term business plan. Having said that, themid-term business plan is only a way-station, and I am
consciously sketching out the growth strategy for the

new Fujikura from a medium and long-term perspective.
I think deeply about whether Fujikura has winningtechnologies and a strategic story, how to create themechanisms and sow the seeds to achieve that, andhow to leave a better business for the next generation.
I want to create the new Fujikura which has dreams andcan grow sustainably while conscientiously discussing
a new structure to achieve that. I sincerely ask all of our
stakeholders for your support as you look forward to thisnew Fujikura.
Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura Group

Initiatives in Sustainability, the Foundation for Sustainable Growth

We will also pursue measures relating to digital transformation (DX) such as establishing data management
infrastructure for the sustainable growth phase. Morespecifically, I want to link data from procurement, manufacturing, sales, and other operating areas to management
accounting and personnel-related back office data toenable business decisions to be made appropriately, evenamid abrupt changes in the business environment.
Fujikura has used DX to achieve innovation in
production in the past through efforts such as theearly introduction of an AI-based automated inspection
system. At present, we have formulated “TrueConnected-Fujikura (TCF)”, a concept for creating
smart factories company-wide as “Monozukuri DX”
and have launched activities aimed at strengthening
monozukuri (manufacturing) capabilities through DX. We
will organically link live data from plants to each levelof management, and achieve timely plant managementand data-driven business management to strengthen
manufacturing capabilities.
Our goal is to strengthen products, services, andour business model and link them to business innovation
based on the needs of customers and society, andestablish the competitive superiority of Fujikura by pursuing various kinds of DX to establish data management
infrastructure and strengthen manufacturing capabilities.

Corporate GovernanceRoughly four years have passed since the disclosure ofcases of unsuitable quality in Fujikura products. In FY2019
we held a Quality Pledge Day in which all Fujikura employees pledged to prevent a recurrence of unsuitable quality
so that these cases are never forgotten, and continue toobserve this day. We are strictly controlling quality basedon the strong conviction that quality compliance is thevery essence of corporate value, including the quality
contracted by our customers. In more specific terms,
this means performing more sophisticated quality audits
and digitizing the quality inspection process, while also
increasing awareness of quality compliance and fostering
an open and honest organizational culture.

The driving force for the sustainable growth phase ishuman resources, more than anything, and I am always
thinking, “without human resources, there is no growth.”
The Group HRM Vision established in 2017 states thateveryone who works in the Fujikura Group is regarded as
an asset, and addresses the vision for the organizationand personnel system, independent career building anddevelopment of employees, and other aspects needed tosucceed in the global business environment. We intend
to revise the content in the future in light of changes inthe business environment and business strategy. The
reason for revision is because I think a complete renewalof personnel policies is necessary in order for Fujikura to
be a company that attracts and retains outstanding talentand is chosen by talented people who will lead value
creation in Fujikura.
I think the growth of each individual employee
brings about growth of the Company and enhances
corporate value. The ideal is creating a virtuous cycle
which increases the motivation and engagement of each
employee even more. To achieve that, I want Fujikura to

Pursuit of DX to Secure Competitive
Superiority

Business Performance

Fujikura integrated the new business promotion function
and the R&D function to advance continuous metabolismof new businesses and established the New Business
Creation and R&D Unit in April 2021. Some examplesof what work we are engaged in to metabolize existing
businesses include development of thinner 80μm fiber,
multiple cores in a single optical fiber, and multicore fibers
useful for low-latency, high-capacity communications.
In new business creation, we are focusing on the threeareas of high-temperature superconductors, wireless, andmedical devices.
High-temperature superconducting materials used
for a wide variety of purposes will also lead to resolutionof the helium shortage. The superconducting devices currently used widely use low-temperature superconducting
materials that require liquid helium for cooling. However,Be a Company Chosen by Leaders ofValue Creation

vigorously support the efforts of individual employees
to independently build their careers and boldly take onchallenges, as a company. We are also formulating succession plans and have launched systems for developing
human resources who will manage the Company in thenext generation. We also need to focus more on developing human resources who can contribute effectively
from a global perspective because growth overseas
is an important strategy. I also want to strengthen the
personnel development system to deepen the affinityof these human resources for Fujikura as their company
and enable them to be highly motivated in applying
themselves to their work.

Management Plan

• New Business Creation and R&D Unit

Ministry of Economy, Trade and Industry and launched
GX projects internally from FY2022. In addition to working
to reduce CO2 emissions from plants by promoting the
introduction of renewable energy, energy conservation,and using non-fossil fuels, Fujikura was selected by the
Ministry of the Environment to participate in the Fiscal
Year 2021 Model Project for Supporting Achievement of
the Decarbonization Targets of the Entire Supply Chains
and we are working to decarbonize our supply chain.
We think it is only natural to reduce our CO2
emissions, and aim to be a company that achieves carbon
neutrality in our own business and is valued by society
for developing numerous products such as SWR®/WTC®,
which contributes to energy conservation and reducing
plastics; wire harnesses and electronic devices that cancontribute to the proliferation of electric vehicles; andhigh-temperature superconductors that resolve the helium
shortage and make nuclear fusion reactors possible.

Messages from Management

The wire harness business is being impacted by
the decline in auto production due to the COVID-19
pandemic and semiconductor shortage. However, theauto market is likely to rebound once these external
factors subside. We intend to steadily implement reforms
aimed at stabilizing the business in the meantime. The
automotive industry is also said to be facing a oncein a century transformation as represented by CASE
(Connectivity, Autonomous, Sharing and Electrification).
Electric vehicles and other next-generation vehicles arebeing introduced one after another, and are equippedwith numerous new electronic components. Fujikura
is already pursuing joint development of high-speed
communications capability, electronic control systems,
and other technologies with multiple customers. We also
expect the market for rapid charging equipment, roadsidecommunications equipment, and other non-vehicle
related electronic components to grow along with theproliferation of electric vehicles, and are actively searchingfor business based on this.

the rare-earth type superconducting tape Fujikura isdeveloping is a high-temperature superconductor that
does not use liquid helium, and we look forward to rapid
commercialization. This is talk of the near future, but
we anticipate use of high-temperature superconducting
materials for nuclear fusion reactors. Such reactors differ
from conventional nuclear power generation in being carbon neutral because they use deuterium and tritium fromseawater as fuel, and are said to be a stable, safe sourceof energy. I have leapt ahead a bit, but high-temperature
superconducting materials are an innovation that will haveconsiderable impact, no matter what it is used for.
In wireless, Fujikura is pursuing research and development to improve the performance and reduce the costof communications devices in the mmWave band. Fifth
generation (5G) telecommunication services require highspeed, high-capacity wireless communication services
using extremely high frequencies known as mmWave.
However, mmWave wireless signals are also prone toattenuation and deterioration from a variety of factors.
Fujikura aims to resolve these problems and develop a
presence in providing total support for mmWave devices.
In the medical field, we aim to contribute to technology for optical sensing applications cultivated throughoptical fiber for telecommunications applications
thus far. In 2021, Fujikura began mass production ofultrafine-diameter CMOS camera modules for use in disposable endoscopes by a medical device manufacturer.
We also anticipate demand for the ultra-compact characteristics of our device-embedded circuit boards for use
in implants and wearables, and expect high-temperature
superconducting materials to be used in MRI machines.

About Fujikura Groupextent. We are working to restore earning power in the
FPC market through advanced circuit printing technology and improvements in productivity.
The electronic products and connector businessother than FPC uses high-precision, intricate assembly
technology. We handle many high margin products inniche markets and will continue to expand our businessdomains further.

22

Messages from Management

Message from the CFO

Director and CFO

While the Company will pivot toward investment ingrowth from FY2022 onward, the basic principle is tocover the capital for such investment with cash generated from existing businesses. We will, of course,
strive to increase earning power to accomplish that.
My own view is that there is much room for
improvement in the cash conversion cycle in terms of
how we hold inventory and other aspects. I am also
thinking about the potential for eliminating the three“M’s” (Muri (unreasonableness), Muda (waste), andMura (irregularities)) in procurement, business flow,
distribution, and other areas of the supply chain fromthe perspective of overall optimization. We have justbegun to survey the actual state of cost management.
Based on the results, I want to determine what partis necessary for a certain goal, where to trim thewaste to achieve that, what we can do to trim thewaste, and incorporate this in a manner that enables
numerical management.
In distribution, for example, the decision onwhether to ship by air or sea involves more than asimple comparison of shipping costs. I think there areprobably many steps that we should take if we think

Fujikura Has Substantial Room for Growth
Finally, we believe that rebuilding the company brandas “Fujikura, known for technology” is an important
issue. Fujikura possesses proprietary technology,
technology not available anywhere else in the world,
and technology that is No.1 in the industry. This is notconceit; Fujikura possesses many technologies thatare recognized by our customers and society. I think
Fujikura is company where there is ample room for
growth in those technologies, depending on how thecompany is managed. I will therefore put forth mybest effort to contribute to formulation of the next
mid-term business plan and make Fujikura a better
company that is valued by all stakeholders even more
highly than it is now, with an immense sense ofsatisfaction in my work.

Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura Group

Fujikura Group
Integrated Report 2022

In FY2021, Fujikura achieved net sales growth of
4.1% YoY to 670.3 billion yen and operating income
growth of 56.8% YoY to 38.3 billion yen. Thisstrong performance came from robust demand for
FTTx and data centers in the telecommunication
systems business and a further increase in the priceof copper, in addition to the results achieved in
the operational turnaround plan. Profit attributableto owners of parent reached a record high of 39.1
billion yen, staging a sharp recovery, owing to gains
on the sale of property, plant, and equipment and a
subsidiary related to energy. The full-year forecast
projects record high sales and operating income of790 billion yen in net sales and 68.5 billion yen in
operating income, and 35.5 billion yen in net income,as of the end of the first half of FY2022. We are
currently formulating the mid-term business plan for
FY2023 to FY2025, and I think it is more important

Revising Financial Strategy from a
Company-wide Perspective

Corporate Governance23

Performance and Shareholder Returns*VUCA: Volatility, Uncertainty, Complexity, and Ambiguity

Business Performance

I was appointed as the new Chief Financial Officer(CFO). Appointed just as the switch from the operational turnaround phase to the sustainable growthphase is happening, I feel both the weight of responsibility and an immense sense of satisfaction. For
many years, I have used my professional expertisein the finance and accounting at a major electronics
manufacturer to work on business reforms, improve
profitability, strengthen financial soundness, andimprove the effectiveness of business management.
I have also played a leading role in M&A. I think I waschosen from the outside for this position because
I am expected to reassess the approaches Fujikura
has taken in the past, utilize those that are good,and change those that are not, without reserve andwithout being caught up in tradition, based on mypast experience.
No business goes smoothly forever and it isextremely important to determine how to acceleratebusiness metabolism and restructure the portfoliowith an eye toward the future in managing a business. I therefore want to also serve as the “Chief
Focus Officer” who sorts out what to focus on
and sets the direction from a financial perspective,
rather than simply taking the title of “Chief Financial
Officer” at face value and serving as a financial andaccounting professional.
Over the past two years, we have kept investment to the absolute minimum necessary during
the operational turnaround phase. Fujikura is now inthe sustainable growth phase where we will actively
engage in well-modulated investment. I consider

one of my main roles to be carefully prioritizing
investments and securing investment capital for the
future while securing ready liquidity and maintaining
other financial ratios.
It is also important act boldly, quit performinginternal work that does not enhance corporate value,and do things that will build muscle. Every company isgoverned by the law of inertia. It takes more strength
to quit doing the things you are accustomed to doing
than it does to begin something new. However, we
will not accelerate business metabolism unless wedo. I am also conscious of my position of responsibility in making such decisions.

In terms of KPI for monitoring corporate value, I
think return on invested capital (ROIC) and indicatorsof financial stability are essential. Even if we logicallyunderstand capital costs, it does not increase
corporate value if we make investment decisions
based on the view that an investment is fine as longas it produces a profit and as long as we recover theinvestment. I want to revise such decision-making
methods from the ground up and set target KPI.
We will pursue improvement in ROIC after we set
the direction for each business, according to theportfolio strategy.
Naturally, we will also diligently monitor financial
stability. However, the sustainable growth phase isa phase in which we will actively seize medium andlong-term business opportunities, so we will consider
setting KPI to strengthen the financial base forengaging in agile investment as needed.
To put it in other words, when business competitiveness increases, the probability of recovering ourinvestment also increases, our ability to generate cash
will improve, and finances will also be stable. That will
reduce the cost of capital and enable us to exceed the
expectations of shareholders and investors. This seriesof actions will enhance corporate value and I therefore
think that we should set KPI from that perspective.

Management Plan

Financial and Focus

In an era where it is so difficult to project the futurethat it is termed VUCA*, it is important to visualize theimpact of changes on Fujikura’s businesses and futurecompetitiveness—basically, the value drivers—inorder to increase resilience and achieve sustainablegrowth. Management is not analyzing performance
results; it is considering the impact from changes
in the environment and taking rapid steps to deal
with them. In other words, I want to make progresson visualizing the value drivers in order to increase
Fujikura’s ability to respond to change and transformthe company’s makeup into one that is not easily
affected by changes in the environment.

Considering KPI from the Dual
Perspectives of Profitability and Stability

Messages from Management

Koichi Takemoto

Visualization of Value Drivers

about the lead time, how inventory is held, allianceswith other companies, and other factors. I want toimprove each aspect, one by one, strengthen businesscompetitiveness, and link this to cash generation.

About Fujikura GroupI concentrate on my role as
the “Chief Focus Officer,”rather than on just myrole as a financial andaccounting professional.

to carefully determine what to do beyond that andoutline a strategy than to engage in initiatives basedon targets for FY2025.
In terms of shareholder return, we declared nodividends in FY2020, but resumed dividends of 10
yen per share in FY2021, and plan to increase dividends by 16 yen to 26 yen per share in FY2022. While
we will invest a substantial amount in growth fromthis point forward, we will maintain financial discipline
as we diligently grow business revenues and provide
stable ongoing returns to our shareholders.

24Messages from Management

Message from the CTO

Director and CTO

Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura Group

Fujikura Group
Integrated Report 2022

Since it was founded in 1885, Fujikura has contributed
to building the infrastructure of Japan through its
original business in electrical wire and cable. We
have always led the world through research anddevelopment of optical fiber and peripheral products
for optical fiber, which replaced electrical wire andbecame mainstream in the 1980s. We are currently
expanding these technologies laterally to electronic
devices and automotive electronic products, and arebuilding a “tsunagu” (connecting) technology platform
consisting of seven areas of research, including
superconductors and other future technologies.
Our research and development mission is toanticipate the needs of the world and develop new
products and technologies. However, this is based on
narrowing our efforts to areas where we can definitively answer the question of “Why Fujikura?” rather
than simply extending our reach with no purpose inmind. We clearly define our technology platform as ameasure of that. Having said that, the management
strategy is formulated based on the needs of theworld, and the technology strategy is formulated
to achieve the management strategy. We should
establish or change the technology platform based onthat, and through that flow stimulate the company’s
metabolism and achieve sustainable growth. R&D is

Fujikura claims “Fujikura, known for technology”
as its brand. To maintain and enhance this brandover the long term, we need to simultaneously
think about how to develop engineers and how to
improve our technology development capabilities asan organization.
To develop engineers, I think it is extremely
important to provide an environment that respects
the free thinking of each individual and enables
them to work on research themes independently. To
further this, we established Advanced Research Core
(ARC) in 2019. ARC is the laboratory responsible foradvanced basic research to develop researchers whocreate technologies that will blossom in 10 years
by envisioning the society 20 years from now. ARC
provides an environment with a flexible work stylethat allows researchers to focus on their true purposeof “creating new things and enriching the world,”
and also provides opportunities for researchers toengage in research and development in universities
and research organizations overseas. By doing so,
we aim to develop highly creative researchers with a
far-reaching, broad view of society.
While respecting the free thinking of eachresearcher, I want to create the mechanisms tosystematically improve Fujikura’s organizational
capabilities in research and development by pursuingdevelopment with a sense of urgency according to atechnology roadmap and focusing on developmentwith an awareness of efficiency and effectiveness.
There is one more thing that is extremely importantto Fujikura, with our limited resources. That is open
innovation and we will actively pursue it with leading
companies, universities, and research organizations inJapan and overseas.

Corporate Governance25

R&D Is Not the End Goal; Business
Strategy Is

Among the technologies that are currently at thecommercialization stage, we are putting extra effort
into high-temperature superconducting tape andmedical products. I also feel that mmWave wirelesshas great potential.
Since rare-earth type high-temperature superconducting materials were discovered in 1987, Fujikura
has been energetically engaged in development. We
have successfully developed high-temperature superconducting tape that features the best performancein the world. As a product that does not use liquid
helium and makes next-generation high-temperature
superconductor equipment possible, rare-earth typesuperconducting tape is promising for equipmentused for new applications in medical treatment andanalysis, industrial equipment, nuclear fusion reactors,
and other areas of the energy sector. In recent years,
I have gained a real sense of the rising expectations
for such high-temperature superconducting tape amid
initiatives to decarbonize society, the helium shortage,
and other changes in the environment. Fujikura is
working to increase the length of high-temperature
superconducting tape and lower the cost even more,
and is preparing for a full-scale market launch.
In medical products, we provide value in miniaturization and imaging, using Fujikura’s planar wiring
technology and optical technology. Fujikura is mass
producing ultra-fine diameter camera modules forendoscopes that use miniature CMOS image sensors
and ultra-compact circuit boards with multi-layer
embedded WABE Packages® on a printed circuitboards with embedded IC chips. We are supplying
these camera modules to a medical device manufacturer. This thin, highly flexible camera module not only
improves the ability to detect lesions, it has made it
possible to use disposable devices and contributes toinfection prevention. I want to continue to expand theuse of Fujikura’s technologies in the medical field in
the future.
We are also targeting commercialization ofmmWave band devices used in 5G high-speed

Business Performance

I was recently appointed as Chief Technology Officer(CTO). I joined Fujikura Electric Wire Corporation (nowFujikura Ltd.) in 1987. After performing research anddevelopment on semiconductor lasers, optical integrated circuits, and other optical devices, I worked on
optical fiber manufacturing technology. I subsequently
launched SWR®/WTC® under Naoki Okada, who is
now CEO, and was put in charge of the telecommunication systems business in FY2021 where I promoted
the optical cable total solution business, with SWR®/
WTC® as the core of the business.
The research and development division I was
first assigned to had very few people. I experienced
the joy of a researcher in building it from the groundup, and experienced the tribulations of proceedingwith everything on my own, down to the last detail.
However, I can say that this built my skill base. Once
optical fiber demand was in full swing, I narrowed theapplication of my expertise to production locations. I
was also involved in the construction of optical fiber
plants, formulating business strategy, and building
relationships with customers and other external
partners.
As CTO, I oversee Fujikura’s many different
technologies. I am conscious of my responsibility
to first gain a deep understanding of where our
superiority lies, and then formulate and implementa technology strategy that will achieve thecompany-wide management strategy. I utilize myknowledge of Fujikura’s technologies from the various
perspectives I have been involved in, from researchand development to commercialization and then to
the stage of growing the business. I would like to use
this precious experience to demonstrate leadership increating the next type of value that customers seek.

Strengthen Our Brand as “Fujikura as aTechnology Company” in Terms of theOrganization and Its Human Resources

Management Plan

Utilizing the Many Kinds of Technology
I Have Worked with

Focus on Stepping up the Level ofHigh-temperature Superconducting
Tape and Medical Products

Messages from Management

Tatsuya Banno

wireless communications with high transmission
capacity. Fujikura has used mmWave antenna designand circuit board manufacturing technology for sometime. We combined these with high-frequency semiconductor (IC) technology licensed from IBM in the
U.S. to develop an mmWave wireless module withan integrated antenna, IC, and filter. We aim to use
this module in 5G base stations using the mmWave
bandwidth and plan to ship samples during FY2022.

About Fujikura Group

Formulating andimplementing a technology
strategy that achieves the
management strategy

not the end goal; business strategy is.
Based on that line of thought, I think one of myimportant roles in research and development as CTO
is to establish gates for each stage of development
and commercialization from basic research onward
to evaluate whether certain requirements have beencleared, decide how to allocate resources to eachstage, and decide whether to proceed through aparticular gate.

26

Messages from Management

Financial Capital
Net Sales/Operating Income(Millions of yen)

(Millions of yen)

740,052
590,980

661,510 678,528 653,795

80,000710,778

672,314 643,736 670,350

60,000(Millions of yen)(%)

39,10140,00020,000400,000

32,632

34,23038,28834,34327,67925,07540,0001,453 -38,510 -5,369

0

24,422-20,000

-20

3,346
2012

2013

2014

2015

2016

2017

2018

2019

0
2020

2021

-40,000
2018

2019

2020

Free Cash Flows

10,879 million yen
1.63%

6,022 million yen
0.90%

50,0002020

2021 (Fiscal year)

million yen
Electronic Products andConnector Business

178,508 million yen
26.63%

141.85150

50,726100

40,00064.36

5030,000

FY2021
Net sales

670,350(Yen)

58,0885.09

020,000Power & Telecommunication
Systems Business

353,635 million yen
52.75%

10,0000-10,000

2018

2019

2020

2017

2021 (Fiscal year)

FY2021
Net sales

670,350
million yen

223,298 million yen

20202021 (Fiscal year)

Capital Investment Expenses

Research and Development Expenses(Millions of yen)

20,00055,785

16,29140,00017,466 17,297

16,496 16,413

15,00042,58830,141

30,00020,000Special Initiatives of the Fujikura Group

Japan 33%

2019

(Millions of yen)

50,000

Other

2018

Corporate Governance447,053 million yen-136.58-150

60,000Overseas 67%-100-3,472 -2,387
2017

Net Sales by Region

-19.5

-50

10,700Business Performance

121,306 million yen
18.10%

Fujikura Group
Integrated Report 20222019Management Plan

60,000Automotive Products Business

27

2018

Earnings Per Share(Millions of yen)

Other

134,051 million yen

20172021 (Fiscal year)

Operating Income (right axis)

Real Estate BusinessAsia-20.89-30
2017(Fiscal year)

Net Sales by Business

202,865 million yen

-3.41

-10
20,000

0

U.S.

0.67

0

6,499

110,137 million yen

8.70

Messages from Management

20,345Net Sales (left axis)

20.40

10

491,118

200,000

30
20

18,359About Fujikura Group

800,000

600,000

ROE

Net Income

10,00017,736 16,214

5,000

10,000
0

0
2017

2018

2019

2020

2021 (Fiscal year)

2017

2018

2019

2020

2021 (Fiscal year)

Fujikura Group
Integrated Report 2022

28

Messages from Management

Non-financial Capital(Thousand t-CO2)

58.5

57.9

56.9

21,455

52.7

159

248

243

(No. of people)(No. of people)

60,000216

111,000

60,00053,717 52,434

125

123

40,000

FY20210
2020

2021 (Fiscal year)

Group emissions in Japan (left axis)

29,201 27,691 27,895 Automotive
Products
Business

20,000Electronic Products

14,691 13,498 14,018 13,505 12,022 and Connector
Business

Scope3

Power &

00
2019

31,481 30,861

587,45630

15

1,103 1,295
1,275
8
1,221 1,298 Other
10
14
17
18 Real EstateBusiness

40,000455,0012018

55,93620,000

140

100

2017

58,422 57,228

Messages from Management

173

257

(Group) Employees by Business*

Scope245

262

Group Employees*

60

300

200

Scope1(t-CO2)(t-CO2/100 million yen)

58.8

400

CO2 Emissions by Scope (Japan)

About Fujikura Group

Trend in Domestic/Overseas CO2 Emissions
and Intensity Based on Net Sales

0
2017

Scope 1: Direct greenhouse gas (GHG) emissions from the Company itself(fuel combustion and industrial processes)
Scope 2: Indirect emissions from use of electricity, heat, andsteam supplied by other companies

Intensity based on net sales (right axis)

Scope 3: Indirect emissions other than Scope 1 and Scope 2 emissions(emissions from other companies related to the activities of the Company)

2019

2020

2021 (Fiscal year)

Systems Business

2017

2018

2019

2020

2021 (Fiscal year)* Full-time employees as of fiscal year-end* Full-time employees as of fiscal year-end

Trend in Percentage of Men Taking
Childcare Leave (Fujikura)*

Percentage of People with
Disabilities Employed (Fujikura)

(%)

(%)

30

3.00

Management Plan

Group emissions overseas (left axis)

2018

11,139 11,564 11,428 11,283 11,201 Telecommunication

27.0
2.75

Environmental Impact Accompanying Business Activities
Manufacturing

2.50

OUTPUT

Raw materials(tons)• Optical fiber cables

GHG emissions• Municipal gas

8,752• Electrical wires and cables• CO2 from energy
sources

123,168• CO2 from productdistribution

3,691

Waste

(tons)

4,405• Copper87,127• Polyethylene

13,649• PVC

11,940• Aluminum

5,250• Steel

1,301

Energy• Electronic equipment
components• Automotive components• Industrial wiring• Manufacturing of cableconnector components, etc.

• Waste generated(tons)

15,099138(Gigajoules)

Chemical substances(tons)

2,817,655• PRTR*1 releases andtransfers

17• VOC*2 emissions

49

0

7.6
1.0
2017

2.12

3.4

(tons)• Tap water

189,246• Industrial water

899,069• Groundwater

1,197,449*1 PRTR: P ollutant Release and Transfer
Register*2 VOC: Volatile Organic Compounds

2018

2019

2020

2021 (Fiscal year)

2018

2019

2020

Lost Time Accident Rate (Fujikura)

CDP Climate Change Score(Rate)(Score)2021 (Fiscal year)

A

0.34

0.37
A-

0.3

0.2

A-

A-

A-

2019

2020

2021 (Fiscal year)

B

B
B-

0.17

C

C

0.1
D

0

0
2017

Fujikura Group
Integrated Report 2022

2017

* Number of male employees taking childcare leave ÷
Number of employees whose spouses have given birth × 100

0

29

2.26

2.00

0.4

Water resources

2.24

2.25

Special Initiatives of the Fujikura Group• Of which, final disposal

2.36

10

Corporate Governance• Silicon tetrachloride

2.63

18.3

Business Performance

INPUT

20

2018

2019

2020

2021 (Fiscal year)

D2017

2018

Fujikura Group
Integrated Report 2022

30

Management Plan

FY2022 Management Plan

2

Switching to the Growth Phase2020 Mid-term Business Plan

Operational Turnaround Phase

Sustainable Growth Phase2020 Mid-term Business Plan

2016

Radical reform of the management& business structure

2019

2022

2023

100-Day Plan Initiatives
The Fujikura Group implemented the following initiatives according to the 100-Day Plan formulated in September 2020
to achieve a rapid recovery. During the plan period, we worked vigorously to implement the more than 100 action
items set in the plan. Since we achieved our goals to a certain extent, we decided to move into the sustainable growthphase from FY2022.

Strengthening governance
Energy business• Transfer subsidiaries• Decide on plan for split-off of energy businessTelecommunication
systems business• Strengthen optical cable total solutions business• Concentrated investments to growing businesses• Consolidation and closure of business sites in Japan and overseas

FPC business• Shift to fields where the Company can utilize its technological capabilities• Rightsizing of business scale• Decide on plan for spin-off of FPC business

Automotive wire harness business• Reorganize business in the European region• Optimize personnel in North America

Other• Selling real estate held, etc.
• Implementing the Special Career Change Support System

Fujikura Group
Integrated Report 2022

BeforerevisionAfterrevision

Director,
President & CEO

Director & COO

Director
Corporate Officer

Director
Corporate Officer

Director
Member of the
Audit and Supervisory
Committee

Director
Member of the
Audit and Supervisory
Committee

Director
Member of the
Audit and Supervisory
Committee

Director
Member of the
Audit and Supervisory
Committee

Director
Member of the
Audit and Supervisory
Committee

Chairperson of theBoard of Directors

Director,
President & CEO

Director & CFO

Director & CTO

Director
Corporate Officer

Director
Member of the
Audit and Supervisory
Committee

Director
Member of the
Audit and Supervisory
Committee

Director
Member of the
Audit and Supervisory
Committee

Director
Member of the
Audit and Supervisory
Committee

Director
Member of the
Audit and Supervisory
Committee:Director Corporate Officer:Non-Executive Director:Independent Outside Director

Director
Member of the
Audit and Supervisory
Committee

Special Initiatives of the Fujikura Group

Initiatives• Managerial reform• Transition to a system of business units by progressively terminating theformer in-house company system

To strengthen the supervisory function of the Board of Directors, a non-executive director was appointed as the chairperson of the Board of Directors in April 2022, thereby enhancing fair and equitable agenda management for the Boardof Directors. Under the new management structure, there are a total of 11 directors, four who are executive directors(corporate officers) and seven who are non-executive directors (one person who serves as a non-executive director
and chairperson, and six Audit & Supervisory Committee members).

Corporate Governance

31

Initiative Type

Business Performance

2025(Fiscal year)

Management Plan

New mid-term business plan
To the growth phase

The positions of Chief Financial Officer (CFO) and Chief Technology Officer (CTO) were established in addition to theChief Executive Officer (CEO) position as the management structure for the new Fujikura, which has embarked on ajourney toward new growth. These positions were added to strengthen management functions and facilitate swifter
decision-making to enable Fujikura to achieve sustainable growth.
During the operational turnaround phase, the authorities of the CEO and Chief Operating Officer (COO) were consolidated and we undertook structural reforms and stabilized core businesses. In the sustainable growth phase from FY2022
onward, we think it is important to formulate a strategy rooted in Fujikura’s strong technological strengths and establish
a sound financial base to support that strategy. It
Beforeis essential to promote human resources who arerevision
Structural Reform
Director, President & CEO
capable of formulating a strategy and executing
Task Force
operations form a company-wide perspective in
Director & COO
Director
Director
addition to possessing advanced expertise and• Industrial• Staff Unit
extensive experience, particularly in finance andElectric Wire
• Corporate Governance Unit
[Core Businesses]• AFL*
Business• Quality Control
technology. The new management structure•
New businesses• Real Estate• Research and Development
will enable the CEO to pursue company-wide
Businessstrategy effectively by having the CFO and CTO*AFL Telecommunications LLC
function to support and augment the CEO function by using their expertise in the financial andAftertechnological aspects of Fujikura’s business.
revision
Director, President & CEO
We will also add a global function to the comDirector & CFO Director & CTO
Directorpany-wide strategy (CEO), financial (CFO), andtechnological (CTO) functions as the optimal• Staff Unit
• Business• Subsidiaries• Core Businesses• New• Corporate
Planning
serving as
structure for Fujikura, which has a high percent• Independent
businesses
Governance Unit
• Finance
headquarters forbusiness• R&D• Quality Control
age of overseas business, to enhance corporate• Real Estate
strategic regions
subsidiaries• Internal Audit
value and achieve sustainable growth.

Messages from Management

The Fujikura Group is determined to steer toward the sustainable growth phase in FY2022.
Fujikura has made steady progress on restructuring the FPC business and energy business announced in Februaryof this year to make a clean switch in phases during FY2022. This fiscal year, we will formulate the mid-term businessplan to begin in FY2023 and aim to build a corporate structure that enhances corporate value through sustainablegrowth. The new mid-term business plan is scheduled to be announced in May 2023.

New Management Structure

About Fujikura Group1

Switching from the Operational Turnaround Phaseto the Sustainable Growth Phase

Director
Member of the
Audit and Supervisory
Committee:Serves as Chairperson of the Board of Directors

Fujikura Group
Integrated Report 2022

32

Management Plan

Sustainability Targets 2025

Views on Sustainability Targets 2025

Main Results for FY2021

The Fujikura Group established Sustainability Targets 2025 (FY2021–FY2025) based the Fujikura Group Corporate
Philosophy (MVCV) and is pursuing sustainability targets. These targets were set from the dual perspectives of environmental and social materialities, and financial materialities. They are also linked to the long-term visions set forth
by the Fujikura Group (the 2030 Vision and Fujikura Group Long-term Environmental Vision 2050).

Sustainability Theme

Achieving the 2030 Vision (CSV)

E

Achieve Fujikura Group Long-term
Environmental Vision 2050

S

Develop a pool of human resources
with globally versatile talentG

Strengthen corporate governance

Strive tocontribute to asustainable
society andenhance
corporate value

F

Each of us must follow an ethical path as a member of society.

Details of Sustainability Targets 2025

Achieve
Fujikura Group
Long-term
Environmental
Vision 2050

Sustainability Targets 2025 is categorized into four themes, collectively called EGSF for Environmental, Governance,
Social, and Financial/Future. Financial/Future has three action items, Environmental has five, Social has three, andGovernance has five. We evaluate the annual targets and results in terms of achieving the FY2025 targets, anddisclose progress toward the targets in the annual Integrated Report and on our corporate website.

• Further expansion of environmentallyfriendly products• Promoting digital transformation (DX)E

• Fujikura Group Long-term
Environmental Vision 2050 (pursuing
the four challenges)•C ontinued to engage in joint research with top academics overseas to develop fundamental technologies.

• Worked to create a smart factory for optical preform.

[Challenge 1]
Zero CO2 emissions at plants
by 2050• Achieved an 18.4% reduction in emissions vs. FY2018, compared to the 4% reduction target. While energy savings contributed to improvement in energy consumption efficiency, lower
operating rates due to the semiconductor shortage also played
a role. Environmental credits for carbon offset were also used.
We will continue to pursue reductions in energy consumption byencouraging further energy savings.

•B egan considering revisions to the HRM Vision.

S

Develop apool of humanresources
with globallyversatile talent

Develop globally versatile
human resources33• Workstyle reform• Diversity & inclusion

Fujikura Group
Integrated Report 2022

G

G

Strengthen
corporate
governance•P repared the structure for career design seminars (by gradelevel) to help employees build their careers independently.
• Provided opportunities for employee growth (expanded seminars
on promotion requirements, strengthened open participation inexternal seminars, began online English conversation sessions,etc.).
•E mployment rate for people with disabilities: 2.5% (vs. a statutory rate of 2.3%).

Supply chain management(including responsible mineralsourcing)•M et with all employees with disabilities to understood the problems they experience and reduce the attrition rate in order tocreate an environment that makes it easy for them to work.

Special Initiatives of the Fujikura GroupS• Introduced AI for automatic external inspection of electronic
components and external inspection of optical cables.

•F inished examining the draft of the human resource development policy.

• Response to TCFD recommendations• Establishing Board of Directors functions• Putting Fujikura Group Corporate
Philosophy (MVCV) into practice• Building Group governance• Strengthening supply chain management• Comprehensive security export control
management

DX at manufacturing sites

Use data and digital technologies to improve the efficiencyof existing businesses andcreate new business models

Diversity & inclusion• Human resources capable of active
contribution globally•P ursued applications of CMOS image sensors for various purposes in light of the increased demand for single-use equipment
to prevent infection risk.

Corporate GovernanceF• Achieving the 2030 Vision•C onfirmed the demand for superconducting tape in the nuclear
fusion market.

Business PerformanceE

Realizing the2030 Vision(CSV) andMaximizing
Business
Opportunities

Solve problems in a comfortable and sustainable “Mirai”(future) society by providing“tsunagu” (connecting)solutions and thereby continuously enhance corporate
value.

• Announced the FutureAccess phased array antenna for 5G
mmWave infrastructure, which achieved the highest standards
in the industry.

Management Plan

Double materiality
Also considered the financial impact
in addition to the CSR perspective

Putting the
Fujikura Group
Corporate
Philosophy(MVCV) into
practice

Four Sustainability Themes

F

Main Results in FY2021 (partial excerpt)
Messages from Management

Existing Value

Priority Measure

Identified new technologies and business areas

Overall Image of Sustainability Targets 2025
Corporate Philosophy

About Fujikura Group

Further Progress on Sustainability Activities•O ffered e-learning as internal education (on SDGs and CSR
procurement).
•P erformed in-person audits of 27 suppliers.
•H eld two Partner’s Meetings online to communicate with
suppliers.

Fujikura Group
Integrated Report 2022

34

Management Plan

Pursuit of Carbon Neutrality

The Four Challenges in Fujikura Group Long-term Environmental Vision 2050
Challenge

Challenge

Zero CO2
emissions at
plants by 2050

Roadmap to Zero CO2 Emissions

2

エネルギー使用量予測
Energyusage forecast

Minimize use ofwater at plants
and wastewater
management

Targeting net zero emissions
省エネや再生可能エネルギーの活用、
based on a combination of energy
炭素クレジットなどを
conservation, use of renewable
組み合わせることでゼロを目指す
energy, carbon credits, etc.

Total COCO₂総排出量
2 emissions volume

Challenge

3

Challenge

4

Effective use ofresources andresource cycle

Main Initiatives
One of the challenges set in Fujikura Group
Long-term Environmental Vision 2050 is
net zero CO2 emissions at plants by 2050.
A roadmap toward reduction of CO2 emissions was outlined to achieve that and weare pursuing concrete measures such asenergy conservation and use of non-fossil
fuels.

To achieve carbon neutrality, we plan toexpand initiatives to our supply chain in
addition to pursuing initiatives in Fujikura
and its Group companies. Fujikura iscurrently engaged in activities aimed at
obtaining SBTi approval.

2030[Short-term]
FY2025:【短期】
2025年度：Reduction of at least 20%
2018年度比以上削減
compared20%
to FY2018[Medium-term]
FY2030:【中期】2030年度：
Reduction of at least 40%
2018年度比以上削減
compared40%
to FY2018

Renewable
導入比率
energyfor45%
45%

2040

2050

(Fiscal year)[Long-term]
FY2050:【長期】
2050年度：
Challenge of net zero total
工場からの総排出量ゼロチャレンジ
emissions at plants

Renewable
導入比率
energyfor90%
90%

Renewable
導入比率
energyfor100%100%

TO P I C

Green Transformation (GX) Project Launched
In April 2022, Fujikura launched the GX Project as aninternal cross-organizational project. The project is thepillar for activities to achieve Long-term Environmental
Vision 2050 Challenge 1, Zero CO2 emissions at plants,
by 2050. We are pursuing the following activities toachieve carbon neutrality.
 ctively participate in climate change initiatives and contribute to achievement of theAsustainable development goals (SDGs) as a member of society.

GX Project
MissionPerform life cycle assessments related to the environment and develop Green-related products.

Special Initiatives of the Fujikura GroupThe Fujikura Group has joined the RE100
and is targeting use of renewable energy
for 100% of electricity used in businessactivities. We aim to reach our target of
100% renewable energy use for electricity
in 2050 by setting 45% in 2030 and 90%
in 2040 as interim goals.

Fujikura Group
Integrated Report 2022

CO 2 reduction
targets set

2025

Corporate GovernancePursuing
decarbonization of
the supply chain
Currently working on
obtaining SBTi approval

35

2020

Business PerformanceLong-term Environmental Vision 2050
Challenge 1

Promoting use ofrenewable energy

総排出量
ゼロ

Renewable energy
reduction targets

Zero CO2
emissions at plants

Net zero total
CO₂
CO2 emissions

Management Plan

Symbiosis
between plant
workers andnatureMessages from Management

1

About Fujikura GroupTo Achieve Carbon Neutrality

 chieve innovative manufacturing that minimizes energy consumption in addition toAextensive efforts to achieve energy savings and reduce use of electricity.
 se co-generation, purchase electric power derived from renewable energy sources, andUproceed with environmental value on a cost-minimum basis.
Pursue reuse of resources and decarbonization of the supply chain.
 ather information on laws and regulations, guidance, and customer trends in eachGcountry and share it internally.

Fujikura Group
Integrated Report 2022

36

Management Plan

TCFDAbout Fujikura GroupSpecifying Climate Change-related Risks and Opportunities
The Fujikura Group is working to specify the risks and opportunities that could materialize in the process of transitioning to a low-carbon economy. We are analyzing what kind of impact climate change will have on growth of FujikuraGroup businesses, based on the long-term forecasts of international research institutions (OECD, IPCC), social concerns, and requests for response to climate change from customers. Specified risks are re-evaluated as needed.

Opportunities

Type

Climate Change Risk

Future Response

IndividualBusinesses[Policy/Legal Risk]• Stricter CO2 emissions regulations in various countries
through the introduction of a carbon tax, etc.
- Trial calculation of financial impact from a carbon tax• Demands from customers and the countries Fujikura
operates in and obligation to reduce greenhouse gas
emissions and our carbon footprint• Disruption of existing technology

2ºC Scenario(Migration risk)
Short Term/
Medium Term

• Demand to minimize energy consumption during productmanufacturing or use renewable energy[Market Risk]• Changes in demand for products and services• Pursuing use of renewable energy in business activities (at head office, plants, etc.)• Strengthening response by joining the
RE100 and affirming TCFD, and regularly
monitoring and responding to ESG rating
indicators• Demands for information disclosure on and response
to climate change by customers, investors, and various
rating organizations

4ºC Scenario
Short Term/
Medium Term

Fujikura Group companies suffered massive damage
from flooding in Thailand in 2011, and it took five years torecover[Chronic Risk]• Health considerations for employees who work in thearea of operation due to a rise in the temperature, orother changes• Securing the safety of employees due to an increase in
the amount of rainfall• Impact on operations from a future rise in sea level

37

Fujikura Group
Integrated Report 2022

• Diversification of both power supply and demand forcompanies, individuals, etc., and increase in renewableenergy use under the 2°C scenario•D isaster preparedness/prevention response
for affected locations- We used the lessons learned from thedamage caused by the 2011 flooding at
FETL in Thailand and implemented measures such as diversifying locations andbuilding a flood wall near the business,from the perspective of BCP• Slope face maintenance around office sites
and response to high tides and tsunami atplants near the ocean-D omestic locations that will be affected byflooding or a rise in sea level are the head
office, FUJIKURA HIGH OPT Co., Ltd. (Kiba,
Koto-ku, Tokyo), Numazu Copper Refining andRolling Co., Ltd. (Kanayaizumicho, Shimada
City, Shizuoka Prefecture), and NISHINIPPON ELECTRIC WIRE & CABLE CO.,LTD. (Kasugaura, Oita City, Oita Prefecture)

Automotive
Products* Survey of government hazard maps

[Energy Sources]
Products related to highly efficient electrical
power systems• Increased concern over natural disasters under the 4°C
scenario• Promotion of digital technology use• Response to the Act on Promoting the Elimination of
Utility Poles (disasters, etc.)

Strengthening the resilience of social infrastructure such as electrical wire and cable• Rapid expansion in new service businesses that use
digital technologies such as big data, IoT, 5G, and AI• Advancement in CASE/MaaS• mmWave (wireless communication)• Increase in industrial robots

Electronics

Expansion of Green products• Entrance into medical products• Increase in automotive electronic components• Increase in mmWave-capable components[Resilience][Products/Services]
Roll out of solutions mainly for high density,
small-diameter optical cable (SWR®/WTC®)[Markets]
Expansion of Green products• Products for highly efficient IT systems• Promotion of digital technology use• Strengthening the resilience of communication lines as social infrastructure• Pursuit of R&D to respond to CASE
• Promotion of digital technology use• Expansion of Green products• Increase in demand for industrial and automotive connectors• Lighter wire harnesses

CASE advances• Pursuit of R&D to respond to CASE

• Increase in wire harnesses accompanying increase inelectronic components• Combining knowledge of the automotive products business with the telecommunication systems, power, and other businesses to generate
new businesses related to electric vehicles• Advancement of move to electric vehicles under a 2ºC
scenario• Increase in demand for lighter wire harnesses

Special Initiatives of the Fujikura Group(Physical risk)- Impact on production plans due to partial severance ofthe supply chain[Products/Services]

Proliferation and expansion of renewableenergyCorporate Governance• Impact on operations from flooding, a large typhoon, orother natural disaster- Impact on business results if a production facility isdamaged and this reduces operating capacity or requires
equipment restoration, etc.

• Power supply stabilization, increased efficiency, and progress on energy savings under the 2°C scenario throughthe use of digital technology• Concerns over response to natural disasters under a 4ºC
scenario[Reputation Risk][Acute Risk][Markets]• Exponential growth in data distribution, storage, and analysis volume due to the advancement of digitalization

Telecommunication
Systems• Rising raw material prices and diversification of suppliers
from climate change-related factors• Increase in demand for power, especially electric power
demand, mainly in developing countries due to economic
growth, urbanization, population growth, and other factors

Business Performance• Temporary increase in capital investment cost from climate change countermeasures requested by customers
or the community

EnergyOpportunities

Management Plan

[Technology Risk]• Following the road map to 100% renewableenergy, move forward with extensive useof energy savings, introduction of renewable energy, credits, and other tools basedon Fujikura Group Environmental Long-term
Vision 2050

Social Trends

Messages from Management

Risks• Strengthening response to automotive
components other than wire harnesses andelectric vehicles• Expansion of Green products

Promotion of digital technology use

Real Estate• Need to consider the positive environmental impact of
ZEB and other measures, etc.

• Securing and maintaining tenants thatdemand environmental friendlinessFujikura Group
Integrated Report 2022

38

Management Plan

TCFDGreen Products

Environmentally Friendly Products

Product name

Spider Web Ribbon® (SWR®) and Optical Cable Using SWR®

Purpose of use

High-density optical cable for FTTx and large-scale data centers

Environmentallyfriendly

Green-related Products
Products and services that notably improved
resource conservation, energy conservation, andother aspects of environmental performance

Green Mind Products
Products and services assessed as achieving higher
environmental performance than conventional
products on the environmental impact assessment

Of which, Green products

23
55%

Can easily be reshaped
so there is no need fora slot structure

Developed WTC®, a new slot-less cablestructure, which made the cables substantially thinner and lighter

Smaller diameterand lighter
Example: 300-count fiber
Finished outer diameter: Reduced
from approx. 21mm to approx. 13mm
Estimated mass: Reduced from 280kg/
km to 135kg/km

Conventional type
Optical fiber cable withribbon slots

New type
Small-diameter high-density
optical fiber cable

Product nameRack-mountable optical connector termination cabinets

Purpose of use

Optical connector termination cabinets equipped with optical cables for data centers

As of March 2022

FY2021 results

Environmentallyfriendly

Fujikura successfully developed an optical termination cabinet that accommodates high density and iseasy to maintain. This termination cabinet enables storage of 1.5x the number of optical fiber cords compared to similar products of other companies and contributes to resource conservation. Normally, whena cabinet is simply packed to highdensity, it makes it harder to insert
and remove cables. However, theuse of a sliding mechanism for theconnector trays has made it possible to easily and safely insert andremove connectors without making
maintenance more difficult. The useof SWR®/WTC® has also made it
possible to use smaller-sized cables
The use of a sliding mechanism for
Densely packed optical cords
and has increased the number ofconnector trays increases the number
make it difficult to insert andof fibers that can be inserted without
remove connectors
fibers that can be inserted in racks
making maintenance more difficultand pass through ducts.

Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura Group

Fujikura Group
Integrated Report 2022

Ribbon-shapedin the normal
shape

Products approved from2011 to March 2022

The Fujikura Group established the Green-related product approval system to pursue development of environmentally friendly products from the perspective of protecting the global environment. The Green Product Management
Committee screens product environmental assessment check sheets submitted by each business unit and registers
those that score at or above a certain level on the standards as Green-related products. The product environmental
assessment check sheet was formulated in 2011 and is updated on a regular basis. A member of the Research andDevelopment Unit is appointed as chairperson of the Green Product Management Committee and committee members are selected from each division. We have adopted the Type II environmental labelling specified in ISO 14021 forapproval of Green-related products.
In FY2021, 54 Green Mind products were registered Group-wide, and around 3,000 current FPC products which
had completed the Restriction of Hazardous Substances (RoHS) compliance process were also registered. This raised
Green-related products (sum of Green Mind products and Green products) to 55% of total net sales.

39

Cannot be shaped so theymust be protected by slots

Corporate GovernanceGreen-related product sales as apercentage of total net sales

3,695Single-count fibers longitudinally bonded and bundled

Business Performance

Number of Fujikura Group Products Registered as
Environmentally Friendly Products (Green-related Products)

New ribbon fiber (SWR®)
JIS C 6838:2020: Intermittently
bonded structure
Single-count fibers are bonded intermittently

Conventional ribbon fiber

Management Plan

Green Products

SWR®, in which single optical fiber
strands are intermittently bonded,
forms a ribbon-like construction thatcan easily be reshaped. As a result,the slot protection used when bundlingfibers into a cable is no longer needed
and we were able to reduce the outer
diameter and weight of the cables
themselves by up to 60%.
We were also able to include
a higher fiber count in cables using
SWR® by reducing the diameter of fiber
strands from 250μm to 200μm, without
increasing the outer diameter of thecable. This also reduced the weight.
We also used the same fiber pitch for
250μm and 200μm fibers, which madefusion splicing of both possible. This
contributes to improved productivity
during installation work.

Messages from Management

The Fujikura Group performs a product environmental life cycle assessment at the product planning, development,
and design stages to assess the environmental friendliness of a product over the product’s entire cycle. We work to
improve environmental performance.
Products that meet the standards are approved as Green products or Green Mind products. We have registered
60 or more of these two types of Green-related products combined, every year thus far. We have also expanded thisactivity to Group companies, expanding to NISHI NIPPON ELECTRIC WIRE & CABLE CO., LTD. in FY2020, and thento Suzuki Giken Co., Ltd. in FY2021. In the future, we will recommend joint activities with each of our other Group
companies and will increase the contribution of environmentally friendly products to Group revenues.

Cumulative Number of Products
Registered as Green-related Products

About Fujikura Group

Expansion of Environmentally Friendly Products40Respect for Human Rights

Development of Human Resources to Support Global Business

Practicing Human Rights Due Diligence

The Fujikura Group thinks it is important to have talent that canoperate effectively globally in order to continually develop highly
innovative and useful products and solutions. Human resource
development activities targeted at this are therefore an importantpillar of management that will pave the way for the Group’s future.
Human resource development involves a continual cycle thatconnects development and evaluation, focused mainly on on-thejob training (OJT) in each workplace, based on the Fujikura GroupHRM Vision. The individual employee and his or her superior
identify and share the individual’s strengths and weaknesses,
and expand on the strengths while improving the weaknesses.
This is a total system of human resource development that links
efforts to further growth.
A career challenge system has also been introduced. It was
built on internal open recruitment that makes it easy for an individual to implement his or her own career plan.

Based on the Fujikura Group Policy on Human Rights,
the Fujikura Group takes steps internally to addresshuman rights issues when they emerge through thecompany’s internal reporting system and Partners
Meetings with suppliers. We are building a humanrights due diligence system according to the processdescribed in the UN Guiding Principles on Business andHuman Rights.

Workplace
OJT

Employee(self-development)

Motivation

Training
Programs

CareerDevelopment
Personnel
SystemFostering a culture that develops
its human resources

Act

Check

Assistance

Dialogue/Consultation

Education/AwarenessInformation disclosure

Participants are recruited internally and sent to training by grade level
conducted by an outside organization(provides an opportunity to interact with other company employees of thesame generation)4) New manager
training

Promotion to management is considered a juncture for the employee toimprove his or her own career and provides an opportunity to think about acareer and life that will continue long into the future.

*OHSMS: Occupational Health and Safety Management System5) Managerial talentdevelopment
programA selective development program to develop candidates for succession toimportant positions and create a deeper pool of managerial talent

20176) Lifelong learning
programs

Life planning seminars for employees who will retire in a few years

We began operating our Occupational Health and Safety Management System (OHSMS*) in FY2010, and acquired
certification under the ISO 45001-2018 standard for occupational health and safety management systems in FY2022
with an integrated framework for Fujikura’s head office and business locations. Each business has effectively incorporated the standard’s requirements to improve operations and efficiency, and we are building a management system forpursuing ongoing improvement to build and foster a safety culture in which all employees mutually educate one anotherby daring to point out one another’s risky actions, and other safety concerns.

Corporate GovernanceOccurrence of Occupational Accidents (Lost time injury/fatality rate)
2018

2019

2020

2021

Fujikura (non-consolidated)

0.18

0

0.34

0.37

0

Electrical wire and cablemanufacturing industry

0.65

0.87

0.23

0.92

0.57

Manufacturing industry

1.02

1.2

1.2

1.21

1.31

Special Initiatives of the Fujikura GroupSpecialized training supervised by the relevant divisions (quality andmanufacturing, intellectual property, legal affairs, labor, accounting)(stakeholder engagement)

Full-scale Introduction of Occupational Health and Safety
Management System

3) Selective training

3. Operational specialist-related
Programs• Exchange opinions withinvestors, experts, etc.

Occupational Health and Safety2) Elective training

Various kinds of training on social responsibilities as a member of thebusiness community (related to fair trade, export control, labor relations, etc.)• Confirm current status
and sort out issues

Compliance with laws, regulations, and rules concerning respect for human rights
Respect for human rights in all business activities

A system is in place to work with supervisors to identify the necessary
knowledge and skills for each career stage and role through a promotion
system and evaluations, to create individual career development plans, andto select from a wide range of training programs suited to individual needs(outside group training, e-learning, correspondence education, etc.)
Examples: Logical thinking, communication skills, problem solving, team andorganizational management, business administration, language, and IT

2. Compliance-related Programs

Fujikura Group
Integrated Report 2022

Dynamic
improvement
activity
cycle

Business Performance* Introduction of Web service to support one-on-one meetings for new employees by
OJT trainers• An onboarding survey is conducted to visualize indicators associated withgrowth, such as the degree of an employee’s growth and internal motivation,
based on the response results from both the OJT trainer and the new employee.

41• Perform assessment using
customer survey responses,
ESG rating institution survey
items, supplier surveys, etc.

(handle complaints, correct)• Group training (group training for employees starting out their career, in
their first or second year with the company (conducted online))• Individual follow-up by OJT trainers

1. Career
Development
Assistance• Specify envisioned humanrights risks• Formulate together with the
new sustainability targets andthe relevant divisions• Revise rules and standards

Program Details

1) Career start-up
assistanceDo

OFF-JT

Human Resource Development Programs
Theme

Plan

Management Plan

Human Resource Development

Messages from Management

Management Plan

About Fujikura GroupManagement Plan

Source: Overview of labor accident trend survey (Ministry of Health, Labor and Welfare)Fujikura Group
Integrated Report 2022

42

Business Performance

About Fujikura GroupPower &
Telecommunication
Systems BusinessBusiness Environment

Providing Solutions for Building Infrastructure Platforms• Optical fiber

Networks continue to evolve in a quest for faster, higher quality, andhigher capacity connections. The Fujikura Group continues to be the front
runner with the No.1 global share in the optical fiber development andmanufacturing technology that provides the backbone support for thisgoal. We were also the first in the world to develop optical cable (SWR®/
WTC®) that achieves high fiber density in a slim cable. We boast thehighest shipments of optical fiber fusion splicers for low-loss connectionof optical fibers in the world and will continue to provide total solutions
for building optical network infrastructure.

• Optical cableNet Sales• Optical fiber fusion splicer• Network equipment• Engineering

327.8

Total Assets

Operating Income (Billions of yen)
Operating Margin (%)

353.6
305.9

Total Assets (Billions of yen)

25.2

261.5 269.5

22.4
6.0

18.1

17.7
5.0

247.4 248.4

272.9

Key Issues in FY2022
In the energy area, the overseas production locations
which had contributed to society by building electric
power infrastructure, mainly in emerging countries,
have fulfilled their roles and we effectively withdrew
from all locations in FY2020. We also withdrew fromthe overseas EPC business* and engaged in a processof selection and concentration of businesses in Japan.
During FY2022, we made steady progress on the split
off of the energy systems business into a separate
company as announced in February 2022, and will
work to stabilize the energy business.
In the telecommunication systems area, we can
expect continued active investments in building FTTx,
data centers, and other communication network
infrastructure along with the demand for 5G, IoT, andother next-generation infrastructure stemming fromthe increase in demand from telecommuting due tothe COVID-19 pandemic. Fujikura’s strategic product,
SWR®/WTC® is highly regarded as the optimal solution
for increasing telecommunication infrastructure capacity due to the product characteristics of being slim,
lightweight, high density, and easy to install. We will
increase manufacturing capacity more and take othersteps to concentrate resources so that we do not missout on this opportunity, and will provide total solutions
for building optical network infrastructure, including
peripheral components.
* EPC business: An abbreviation of Engineering, Procurement, andConstruction. This refers to a business that provides integrated services including electrical wire and cable supply, construction installation design, and execution of construction.

Business Performance

354.8• Optical components

Operating Income /Operating Margin (%)

Net Sales (Billions of yen)

371.7

• Optical installation equipment andcomponents

Management Plan

Main Products

and the U.S., due to the switch to working remotely
and increasing use of the cloud, we need to remain
cautious about steep increases in raw material prices
and stable supply.

Messages from Management

Unit Overview

High growth in demand cannot be expected due to thematuration of infrastructure in Japan. While we expect
the forecast growth in overseas demand for FTTx anddata center investment to continue, mainly in Europe

7.1

5.9
4.5

2017

2018

2019

2020

2021

2017

(Fiscal year)

2018

2019

2020

2021

(Fiscal year)

2017

2018

2019

2020

Corporate Governance

1.4
2021

(Fiscal year)

Social Challenges Faced

43

Fujikura Group
Integrated Report 2022

Improving the efficiency ofcable-laying work for telecommunications infrastructure

Special Initiatives of the Fujikura Group

Maintaining a telecommunications
infrastructure that can handlechanges in lifestyles following the
pandemic

Curtailing the amount of energy
used in manufacturing products

Fujikura Group
Integrated Report 2022

44

Business Performance

About Fujikura GroupElectronic Products
and Connector
Business
Business Environment

The electronic products and connector business manufactures printed
circuits, electrical wire, connectors, and other electronic componentsthat create the delicate “neural network” of compact, highly-integrated
electronic products. The Fujikura Group demonstrates the quality andtechnological strengths cultivated in its global operations over many years
in the total solutions it provides. Such solutions include the optimal FPC(flexible printed circuits) and broad variety of other electronic components
and modules for producing advanced devices such as smartphones andwearable devices that are compact, lightweight, and thin.
We are also working to enter the automotive market with electronic
products for “CASE” and other aspects of the once-in-a-century transformation that the automotive industry is undergoing. We are alreadydeveloping electric power control systems, support for high-speed telecommunications, and more in collaboration with multiple customers.

• FPC

Net Sales• Thermal solutions• Connectors

Total Assets

10.4
5.3

Total Assets (Billions of yen)

13.8
7.7

178.5

175.1

150.0

158.3

147.8

8.3
4.5

As we announced in February 2022, the flexible
printed circuit (FPC) business was consolidated into
one operating entity named Fujikura Printed Circuits
Ltd., a wholly owned subsidiary of Fujikura, in May
2022 to revive and stabilize this business. As wemake steady progress on this organizational restructuring and stable business management, we will also
further hone efforts to improve quality and reinforce
technological strengths which are perpetual tasks,
and shift the business into areas where we canmaintain our competitive superiority.
In the connector business, the optimization• Membranes

Operating Income (Billions of yen)
Operating Margin (%)

199.9

Key Issues in FY2022• Sensors

131.3 135.0

4.9
2.4

-2.2

TOPIC

2018

2019

2020

2021

2017

(Fiscal year)

2018

2019

2020

2021

(Fiscal year)

2017

2018

2019

2020

2021

(Fiscal year)

Social Challenges Faced

45

Fujikura Group
Integrated Report 2022

Accelerating digitalization, andnew lifestyles post-covid

Further improvements in productquality through use of AI, andstronger efforts toward DX

As mobile devices become more compact, thedemand for even smaller FPC connectors grows
stronger. The connectors in the FFA1W Series weredeveloped to meet this demand.
This product has the world’s smallest terminal
pitch at 0.15 mm. The connector has a height of0.55 mm when connected to a flexible printed circuit (FPC). We have maintained high performancethrough our unique locking mechanism and cable
locks, despite the fact that it is the smallest connector in the world. The cable locks on this product also
serve as signal connection terminals and thereby contribute to further miniaturization of wearable devices.

Cable locks

Special Initiatives of the Fujikura Group

Supporting increased functionalityand data transmission speed indevices such as smartphones

World’s Smallest FPC Connector Line-up—The FFA1W Series

Corporate Governance

-1.3
2017

of the production structure through the structuralreforms implemented thus far has stabilized business management. We will strive for sustainablegrowth in the future by entering new market areas.
In the electronic components business, we aim
to accelerate business metabolism and maintainhigh profitability by meeting the need for higher
capacity HDD, providing solutions for heat dissipation, and meeting the demand from expanding data
centers in other ways, to access new markets andcapture new customers.

Business Performance

185.0• HDD components

Operating Income /Operating Margin (%)

Net Sales (Billions of yen)

195.9

• Electrical wireManagement Plan

Main Products

ating digitalization, and growth in capital investment.
However, the surge in COVID-19 infections in China,
mainly in the Shanghai area, and other factors demand
caution concerning the external environment.

Messages from Management

Unit Overview

Many flexible printed circuits (FPC) and connectors areused in smartphones produced by our main customers,
which are seeing continued strong demand. Increased
demand for components used in industrial machineryis also evident, due to new normal lifestyles, acceler-

Product exterior view

Fujikura Group
Integrated Report 2022

46

Business Performance

Automotive
Products BusinessBusiness Environment• Wire harnesses (WH)

Net Sales (Billions of yen)

• Electrical components• Rapid charge cables

Total Assets

Operating Income (Billions of yen)
Operating Margin (%)

Total Assets (Billions of yen)

110.2
157.0 154.1 152.4

-2.0

-2.1

2018

2019

2020

2021

2017

(Fiscal year)

2018

-3.0

72.2

66.2

73.0

TOPIC

-4.6
-3.7

-3.7

2019

2020

Development of Heat Pipe Module to Cool Power Electronics in Vehicles
-5.6
2021

(Fiscal year)

2017

2018

2019

2020

2021

(Fiscal year)

Social Challenges Faced

Shift to electrification of
automobiles

Development and provision of new
products and solutions

Special Initiatives of the Fujikura Group

Once-in-a-century transformationof the automotive industry

Automotive power electronics such as converters, inverters, and rectifiers are generating more and more heatas requirements increase for better driving performance, longer driving distance, and rapid charging. A higher
performing cooling system is consequently needed to improve equipment reliability and lifespan.
We improved the internal structure of the heat pipes widely used for cooling PCs, servers, and otherelectronic equipment at Fujikura, and are developing a heat pipe module capable of cooling power electronics
in vehicles by using heat pipes that feature 20% greater maximum heat transfer capacity than our conventional
products. We have also begun working on thermal designs and prototypes for vehicle equipment manufacturers and auto manufacturers.
Heat pipe
Fujikura will contribute to thedevelopment of next-generation electricvehicles that are safe and environmentally friendly by continuing to improve
Heat exhaust fins
the performance of cooling systems.
Heat receiving plate

Corporate Governance

2017

-3.2

*1 T
 he term “powertrain” refers to the overall drive transmission
system, and it also refers to the electronic components used in thesystem for facilitating vehicle movements such as traveling forward,
turning and stopping.
*2 The term “infotainment” was coined by combining information withentertainment. It refers to products for navigation systems and audiovisual devices mainly in the automotive field.
*3 T he term “lighting” refers to automotive lighting such as headlights,
direction indicators, and cabin lights, etc.

96.1
-2.5

121.9 121.3-3.1

Sharing and Electrification) and other technologies.
Fujikura is already engaging in joint development oftechnologies that support high-speed communication,
electronic control systems, and other technologies withmultiple customers. In the connector business, webegan mass production of a connector for next generation vehicle-to-vehicle communication from FY2021,
and Fujikura Printed Circuits Ltd. will accelerate development in the power train*1 area, in addition to theinfotainment*2 and lighting areas*3.

Business Performance

In the automotive industry, the COVID-19 pandemic
and Russia’s invasion of Ukraine have caused concern
over raw materials procurement and pricing in both the
upstream and downstream segments of the supply
chain. Despite the future uncertainty over inflation andother issues in the automotive industry as a whole,
Fujikura’s earning power has been restored throughthe structural reforms we have pursued thus far. We
continue to move forward on cost reductions by further improving productivity and maintaining consistentquality at each location.
We are expanding sales of products related to theelectronics business to top customers of the automotive products business. Introduction of products to theautomotive market will be a key initiative for the electronics-related business as a whole in the future. The
automotive industry is undergoing a once-in-a-century
transformation from CASE (Connectivity, Autonomous,

Management Plan

In the automotive products business, we have 39 locations in 16 countries worldwide for the manufacture, development, and sale of products
in Asia, North and South America, and Europe. And we continue tostrengthen our production capabilities, including quality.
Our main products include automotive wire harnesses, in-vehicle
LAN, and other total wiring systems. These products support the evolution of mobility, which is accelerating globally
The Fujikura Group is fusing electronics and vehicles to develop
and provide new products and solutions in the automotive industry as it
undergoes a once-in-a-century transformation.

Messages from Management

Main Products

Operating Income /Operating Margin (%)

Sharing and Electrification) and other key themes.
Demand for vehicles that use new forms of energy andfurther progress in the electrification and computerization of vehicles is projected.

Key Issues in FY2022

Unit Overview

Net Sales

About Fujikura Group

While instability in global automobile orders and production accompanying the COVID-19 pandemic andthe semiconductor shortage is evident, the automotive
industry is undergoing a once-in-a-century transformation based on CASE (Connectivity, Autonomous,

Heat source

Image of a heat pipe module used to cool power electronics in vehicles

47

Fujikura Group
Integrated Report 2022

Fujikura Group
Integrated Report 2022

48

Business Performance

Business Performance

Real EstateBusiness

Quality Control, Manufacturing DX,
Product Introductions, and Communicating
Technical Information
About Fujikura Group

Quality Control

Maximizing Use of Assets and Maintaining Stable Revenue

Net Sales

Operating Income /Operating Margin (%)

Net Sales (Billions of yen)

10.8

11.2

10.9

10.9

5.5
5.0
50.2

46.1

5.3

47.7

5.2
47.7

Total Assets (Billions of yen)

5.1

43.3

42.7

42.0

39.7

38.4

47.2

The “True Connected-Fujikura (TCF)” concept of creating smart factories was formulated as a way to achieve digitaltransformation (DX) of manufacturing, and we are beginning activities to strengthen manufacturing capabilities throughDX. Our goal is to organically link live data from the frontlines to each level of management, achieve timely plant management and data-driven* business management by operating the PDCA cycle (Plan, Do, Check, and Act ), and ensurebusiness superiority by transforming products, services, and operating processes.

Business Performance

10.9

Digital Transformation (DX)of Manufacturing

Total Assets

Operating Income (Billions of yen)
Operating Margin (%)

Management Plan

We are effectively utilizing the former plant site next to Fujikura headquarters to expand our real estate business. Redevelopment
began in 1998, and we are operating a real estate leasing and management business, mainly for five office buildings and twocommercial buildings. The office buildings have a total leasable office space of around 107,000 m2. This property offers the advantage of being located within 4 km of the Marunouchi district in central Tokyo, and has banks and many other excellent tenants andcontinues to operate at full occupancy.
The basic policy of Fujikura’s real estate business is to utilize long-held land effectively and increase revenues andprofit. We plan to increase tenant satisfaction through systematic investment and improvement to increase the valueof currently owned buildings and facilities, and maintain a high occupancy ratio for rental units over the medium andlong term.

To make sure that cases of unsuitable quality never happen again, we will focus on quality as the root of management. We will continue to take steps to prevent recurrence from the dual aspects of corporate governance reform andincreasing awareness of quality compliance based on the Fujikura Quality Policy, our company-wide policy that provides guidelines on quality compliance.
We will continue to maintain independence of the Quality Control Unit, conduct internal audits to strengthen andbuild on the quality compliance system, configure a system that eliminates human operation by computerizing information related to quality at each location, and make sure that everyone is familiar with the whistleblowing system as
elements of corporate governance reform.
Since FY2019 we have held a Quality Pledge Day, an event in which all Group employees pledge to prevent a
recurrence of unsuitable quality. We conduct quality compliance training for all Group employees and are reinforcing
dialog between top management and frontline employees to foster a culture of making sure that these mistakes arenever repeated.

Messages from Management

Unit Overview* Data-driven refers to next-generation operating processes such as business decision-making and resolving problems based on the results of analyses
performed by using algorithms to process various kinds of data and big data collection of massive amounts of data.

2018

2019

2020

2021

2017

2018

(Fiscal year)

2019

2020

2021

(Fiscal year)

2017

2018

2019

2020

2021

(Fiscal year)

Social Challenges Faced

49

Fujikura Group
Integrated Report 2022

Product Introductions andCommunicating Technical Information
Fujikura communicates information to our customers and all of our stakeholders.
Fujikura News is published every other month and contains introductions of
Fujikura’s products, technical information, events, and other information. We use
this in sales activities and recruiting as a way to help people learn about Fujikura.

Special Initiatives of the Fujikura Group

Development of communities that use less energy torealize a low-carbon society

Corporate Governance2017

Development of communities capable of sustaining
business activities even during a disaster and rapid
response in restoring residents’ lives

Fujikura Group
Integrated Report 2022

50

Business Performance

Research & Development
mmWave Wireless Technology

ISO 9001: 2015 International Standard Certification Obtained

Current
limiters

Areas in which RE type
HTS can be applied

Superconducting
cablesTransformers

LN22

Wind power

Industrial
motorsAreas in which
Bi type HTS canbe applied
Areas in which
metallic type canbe applied
LHe

Ship motors
Siliconmonocrystal
pullers
MRI

Power storage
facilities
Medicalaccelerators

Fusion(ITER)

Next-generation
fusion reactors

NMR

Magnetic field strength

ISO9001: 2015 certification
obtained

Medical Products
We develop and manufacture functional components for medical devices to help people maintain their health andimprove their quality of life. Last year, we began mass production of an ultrafine-diameter CMOS camera module for use
in disposable endoscopes by a medical device manufacturer. We are also contributing to the miniaturization of wearable
devices and many other solutions by leveraging the ultra-compact characteristics of our device-embedded circuit boards.

Management Plan

Uses a phase shifter equipped with True Time Delay (TTD) circuits capable of highly precise, high-resolution control of beam steering.
The precise control of beam steering provides a high-quality communication environment with no dead spots in the entire base station area.

Operating temperature

Messages from Management

High quality communication environment with no dead spots

Fujikura’s Superconductor Business
Promotion Office obtained ISO 9001:
2015 certification, the international
standard for quality management
systems. Our rare-earth typehigh-temperature superconducting
wire is highly rated by customers inJapan and overseas, and production
volume is increasing year after year.
We will continue to contribute tosociety by providing excellent products made possible by strengthening
our quality management system.

About Fujikura Group

Communications providers worldwide are now using mmWave in 5G networks (both mobile wireless access(MWA) and fixed wireless access (FWA)). The roll-out of mmWave is progressing especially in the U.S. and leading
communications providers are expanding mmWave networks and use cases (outdoors, indoors, repeater/relay, etc.).
Fujikura is developing various mmWave products such as a 28 GHz phased array antenna module (PAAM) that
forms and controls high-frequency beams in 5G network base stations, a 60 GHz mmWave wireless communications module, and mmWave filters.
Compared to microwaves (a few GHz or less) which have been widely used until now, mmWave wireless signals are prone to attenuation and deterioration from a variety of factors. Because of this, the materials, design, andmanufacture of the various devices used in telecommunication equipment require sophisticated technology and acompletely different approach than before. Fujikura is pursuing development of unique technologies that will provide
products of value to the mmWave market.
Fujikura began providing evaluation samples of our FutureAccess™ phased array antenna module in April 2022.
This PAAM operates in the n257 (28 GHz), n258 (26 GHz) and n261 (27 GHz) bands specified in the 3GPP
standard, and is a highly integrated module consisting of a phased array antenna, beam-forming ICs, frequency converter ICs, and filters. Fujikura achieved the following module performance characteristics by optimizing the wholemodule through in-house development of all of these components.

More compact and lower cost
Achieves high power efficiency demanded of a base station and low power consumption.

Dual polarized beams for concurrent transmission and reception
Can support dual horizontal and vertical polarized beams in one PAAM. This contributes to more compact base stations at a lower cost.

Top side

IVUS* catheter* Intravascular ultrasound

WABE* Package®, a device-embedded
board built into thin components* WABE: Wafer And Board level Embedded
Package

Multi-core Optical Fiber

Frequency
converter IC
Combinersize(mm):42.5(W)×42.5(H)×2.5(D)28 GHz mmWave phased array antenna module (PAAM)

Evaluation board installed in PAAM

High-temperature Superconductors
Fujikura is engaged in research and development, manufacture, and sale of rare-earth type high-temperature superconducting wire. This type of superconducting wire is strong and has excellent critical current characteristics in high magnetic
fields. It is promising for use in a wide variety of industrial equipment such as superconducting magnets. In recent years,
there have been advances in development for practical applications in nuclear fusion power generation and electric
aircraft with the goal of achieving a carbon neutral society. Rare-earth type high-temperature superconducting wire is
expected to contribute substantially to the successful development of next-generation nuclear fusion reactors, in particular. Fujikura will continue to contribute to the realization of a carbon neutral future society through further development oftechnology for rare-earth type high-temperature superconducting wire and coil applications, and other applications.

cladding diameter(Step-index type refractive index
distribution)

Special Initiatives of the Fujikura Group

Contribution Toward a Low-Carbon Society

Development of telecommunications using optical fibers began in the 1970s and is an essential element of our social
infrastructure. We expect the need for low-latency, high-capacity communications to become increasingly important
as fifth-generation telecommunication systems (5G) become prevalent. Multi-core optical fibers, which pack multiple
cores into a single optical fiber, are seen as a promising approach to meet the requirements for next-generation opticalfibers. Fujikura initiatives aimed at practical applications include efforts to develop four-core multi-core optical fibers (4cMCF) with the same standard cladding
diameter as 125 μm diameter general
MarkerCore
single-mode fibers. We successfully
developed 4c-MCF with a step-index
Sheathtype refractive index distribution thatcan reduce costs and high density fiber
optic cable (SWR® & WTC®) that uses
this 4c-MCF. We are helping to build the
SWR® & WTC®
high-capacity telecommunication infra(Spider Web Ribbon® &structure of the future by developing
Cladding
Wrapping Tube Cable®)mass production technology for these
4-core multi-core fiber with standard Exterior view of a high-density optical cable using
kinds of MCF.

Corporate Governance

FilterFujikura Group
Integrated Report 2022

Ultra-thin fiberscope using
image fibers

Bottom side
Beam-former IC

51

Ultra-thin endoscope using
CMOS sensor

Business Performance

Fujikura teamed up with GlobalFoundries Inc., the largest IC foundry in the U.S. to provide a stable supply ofhigh-quality products. We have also partnered with Avnet, Inc., the largest electronics trading company in the world,
to provide a development platform and meet other customer needs, and will continue to contribute to the development of social infrastructure through 5G networks.

multi-core fibers

Fujikura Group
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52

Corporate Governance

Messages from Outside Directors

1. Reflections on FY2021

FY2021 was the year in which Fujikura successfully reformed management to complete the operational turnaround phase. New outside
directors were added and I feel opinion exchanges in Board of Directors
meetings became even more spirited and discussions from the management perspective increased. The turnaround into the black was thegreatest achievement of all, but we must be cognizant of the fact that
there were one-time factors involved and that many issues remain.
In regard to the direction of Fujikura’s businesses, the telecommunication systems business is expecting steady growth in the mainmarkets in Europe and the U.S. However this business will require
active decisions on investment to respond to intensifying competition
and abrupt changes in the markets. Because Fujikura was extremely
cautious about investments during the operational turnaround phase
to improve financial soundness, it will be important to make rapid
investment decisions from this point forward. I will continue to keep aclose eye on the energy business following the decision to split it off
as well as the FPC business.

In FY2021, both executive directors and non-executive outside directors
shared a common view of the need to revive Fujikura and I view thisas the year in which all of management shared a common sense ofurgency directed at completing the 100-Day Plan. While it is of course
true of the leadership demonstrated by the executive side, I feel thatthe level of discussion in Board of Directors meetings and elsewhere
has also steadily improved. While the many measures implemented
resulted in a recovery in performance, I want to concentrate even more
on facilitating future growth, without forgetting the pain that accompanied these measures.

2. Toward the Future Growth of Fujikura

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3. Message to Shareholders and Investors
It has been four years since I was elected as an outside director of
Fujikura. Since my appointment, Fujikura has made steady progresson governance through the establishment of internal rules, changes in
the content of discussions by the Board of Directors, and other means.
The new mid-term business plan is scheduled to be announced next
year and it is important for the plan to properly incorporate a multidimensional analysis of the impact that changes in the environment have
had on Fujikura’s businesses and the various risks. While it is difficult
to properly assess risks in the current environment of uncertainty andabrupt changes, I want to contribute to formulation of the new mid-termbusiness plan by using my expertise to provide the necessary advice
and engaging in thorough debate.

Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura GroupI serve as the chairperson of the Nomination Advisory Committee
and have participated in numerous discussions concerning the switch
to the current chief officer (CxO) structure. I have served as an outside director for six years now and intend to conscientiously fulfill myrole as an outside director so Fujikura can continue to develop andgrow during the sustainable growth phase.

Attorney-at-law

Corporate Governance

3. Message to Shareholders and Investors

Hamako Hanazaki

I want to use my expertise as an attorney to strengthen the foundations of governance, risk, and compliance (GRC) during the sustainable growth phase. Fujikura must take the steps needed to further
strengthen corporate governance as required by the revised Corporate
Governance Code. Fujikura has been working to strengthen corporate
functions under the executive structure established in April of this year
and is making progress on projects aimed at establishing GRC and internal control (IC) systems. I therefore want to assist in the establishmentof the internal organizational structure and various rules while maintaining close communication with the executive side. Along with establishing rules, I also think it is important to provide support to incorporate
internal company rules and other rules in the work of each employee.
This is not something that can be accomplished in a single day, so there
needs to be a consistent effort to put time and energy into this.

Business Performance

For Fujikura to achieve sustainable growth, I think it is important tobe aware of two timelines, the short term and the long term. Whilefocusing on current profits, it is necessary to determine what kindof company Fujikura will become in the future, how it will resolve
societal issues, and how it will simultaneously resolve societal issues
while achieving growth of the Company. Companies are being called
up to take long-term action to go carbon neutral and address otherlong-term issues, especially in recent years. I want Fujikura to be
helpful in resolving such societal issues and communicate the factthat it is contributing to the resolution of such issues while also tying
this into stronger earning power. Promoting diversity will also be an
important factor in stimulating innovative ideas and transforming corporate culture. There have been calls for workstyle reform and otherchanges in recent years and Fujikura is making progress on reassessing the relationship between the Company and employees and on
revising the system design. I look forward to seeing Fujikura grasp
these changes in the world and implement the necessary measuresin these areas as well.

2. Toward the Future Growth of Fujikura
Management Plan

Experience in management(manufacturing industry)

1. Reflections on FY2021

Messages from Management

Yoshio Shirai

Embarking on Establishment of Governance, Risk, andCompliance (GRC) in the Sustainable Growth Phase

About Fujikura Group

Being Aware of the Short-term and Long-term
Perspectives to Achieve Sustainable Growth54

Corporate Governance

Messages from Outside Directors

1. Reflections on FY2021

I have actively stated my opinions in Board of Directors meetings andelsewhere from the moment I became an outside director last year. I
personally feel that extremely thorough and in-depth discussions takeplace at Fujikura Board of Directors meetings. Because Fujikura has
a wide range of businesses and technologies, it is important to havehigh quality information as the basis for discussion to make management decisions. I am deeply grateful for the communication withexecutive officers, the Audit and Supervisory Committee Office, andothers on that point.
Fujikura switched to a chief officer (CxO) structure from 2022.
The process of selecting people to serve as chief officers was highly
transparent in terms of the conditions and criteria for selecting people
to serve in those positions.
I intend to continue to provide support so the CEO, CFO, andCTO can fulfill their respective responsibilities and roles as managers.

One year has already passed since I became an outside director lastyear. I regard 2021 as an extremely important year for Fujikura as theCompany aimed to switch from the operational turnaround phaseto the sustainable growth phase. There were times when I voiced
opinions on the execution of the 100-Day Plan and the future direction of management during Board of Directors meetings and othervenues that were hard for management to hear. Fujikura’s Board of
Directors meetings have an atmosphere that also enables outside
directors to actively state their opinions, and through this I strongly
sensed the common understanding among all members of management, including outside directors, that it was time for Fujikura tochange. While change was accompanied by much pain, the coordinated efforts of officers and employees bore fruit and I was delighted
that this resulted in a recovery in performance and the resumption ofdividends in FY2021.

2. Toward the Future Growth of Fujikura

2. Toward the Future Growth of Fujikura

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Fujikura Group
Integrated Report 2022

3. Message to Shareholders and Investors
I feel that the words “austerity and fortitude” have characterizedFujikura over this past year. Fujikura is an extremely reliable company
with high potential in its technological strengths. To communicatethat potential, I think it is necessary to help people understand theessence of Fujikura, which cannot be expressed in financial numbers.
The importance of non-financial information in calculating corporate
value is increasing, so I will continue to make recommendations
aimed at further enhancing disclosure of information on Fujikura.

Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura GroupI want to use my own business experience to support the growthof Fujikura. The importance of ESG in corporate management has
increased in recent years and there are many issues to address,
including Fujikura’s response to going carbon neutral and human capital, and strengthening governance, which is the root of management.
I will continue to actively make recommendations through discussions in Board of Directors meetings and with executive officers sothat I can fulfill my advisory role, rather than simply monitoring thestatus of operational execution.

Experience in Finance

It is important for the new mid-term management plan, which will beannounced in 2023, to clearly detail the direction that Fujikura shouldtake in the future. The outstanding technological strengths honed
by Fujikura have been the sustaining force through different eras
throughout Fujikura’s long history since the company was founded.
While the business structure is currently centered on the telecommunication systems business, I certainly want to see Fujikura identify
and develop new businesses, and utilize its technological strengths inother ways to access new areas.
As I monitor operational execution, I am conscious of the need tooccasionally give management a push from behind, rather than justapplying the brakes. The management structure has switched to achief officer structure, and I look forward to the leadership of the CEOas the top decision-maker on the future of Fujikura, further changes
to create a more robust financial structure by the CFO, and the seedsof Fujikura’s next businesses being sown by the CTO. As one of theoutside directors, I will earnestly endeavor to determine the future
course of the company.

Corporate Governance

3. Message to Shareholders and Investors

Yoji Yamaguchi

Business Performance

I think the sustainable growth phase from this point onward will
require well-modulated management with an awareness of resource
allocation and I am focusing on portfolio management. Fujikura
possesses unparalleled technological strengths and I think there will
be many opportunities to support growth going forward. Having said
that, discussion and consideration of portfolio management froma long-term perspective will be necessary to identify such opportunities. Fujikura plans to announce a new mid-term business planin 2023. However, I would like to recommend discussing portfolio
management based on backcasting from the future vision of society,rather than on the new mid-term business plan. Diversity among themembers engaging in discussion is also important for stimulating
discussion. I look forward to considering the search for and hiring ofmanagement talent from a global perspective in the future.

Management Plan

Experience in management(manufacturing industry)

1. Reflections on FY2021

Messages from Management

Keiji Yoshikawa

Monitoring That Does Not Just Apply the Brakes andOccasionally Pushes Management from Behind

About Fujikura Group

Looking Forward to Discussion of Long-term Portfolio
Management Through Backcasting56

Corporate Governance

Messages from Outside Directors
Reasons for Electing Outside Directors

1. Reflections on FY2021

Keiji Yoshikawa

As the CEO of a global company, Mr. Keiji Yoshikawa has extensive experience and knowledge regarding
corporate management and strengthening corporate governance systems, having led a management
restructuring and built one of Japan’s best corporate governance systems. Mr. Yoshikawa has served as an
outside director of Kansai Paint Co., Ltd. since 2018 and also has experience as a management supervisor.
The Company therefore believes that he is qualified to serve as an outside director.
Mr. Yoshikawa does not have any conflicts of interests with the Company.

Yoji Yamaguchi

Mr. Yamaguchi has considerable knowledge of finance and accounting from his experience serving in a keyrole at a major city bank over many years, and also has extensive experience and knowledge of corporate
management. In 2008, when the survival of individual banks was threatened by the financial crisis, Mr.
Yamaguchi served as a full-time auditor at Sumitomo Mitsui Financial Group and has extensive insight onbusiness audits performed during a time of crisis. The Company therefore believes that he is qualified to serveas an outside director.
Mr. Yamaguchi does not have any conflicts of interests with the Company.

Kozo Meguro
Certified Public Accountant

Kozo Meguro

In addition to his high degree of expertise as a certified public accountant, Mr. Kozo Meguro possesses ample
knowledge in corporate management due to his involvement in numerous corporate accounting audits overmany years. Mr. Meguro also has experience in business audits as an outside auditor, having served as an
outside auditor member at Kyowa Exeo Corporation (now EXEO Group, Inc.). The Company therefore believes
he is qualified to serve as an outside director.
Mr. Meguro does not have any conflicts of interests with the Company.

Fujikura has established the following standards for determining the independence of outside directors.
A person to whom any of the following items currently applies, or has applied within the past three years, and the
spouse or relative within the second degree of kinship of such a person does not have independence.
• A major business partner of the Group*1 or an executive thereof*2• An entity for which the Group is a major business partner or an executive thereof• A shareholder with 10% or more of the total voting rights of the Company or an executive thereof• A person or an executive of an entity that has received substantial monetary compensation or other forms of compensation*3 from the Company or its subsidiary, other than compensation obtained as an outside officer of the Company.
To ensure that the outside directors can allocate sufficient time and energy to the Group’s service, the number ofconcurrent companies at which they may serve as outside directors, including the Company, is limited to four inprinciple.

Special Initiatives of the Fujikura GroupI feel that the recent switch to a chief officer (CxO) structure also sends
a strong message to shareholders and investors. The CEO, Naoki
Okada, has raised the banner of “Fujikura, known for technology” as
the corporate brand and is aiming to utilize Fujikura’s technologies toresolve societal issues and achieve sustainable growth of Fujikura.
I will continue to use my particular expertise as a certified public accountant to provide advice on points such as financial stability
and soundness.

Independence Standards for Outside Directors
Corporate Governance

3. Message to Shareholders and Investors

Business Performance

Hamako Hanazaki

In addition to her high degree of expertise as an attorney-at-law, Ms. Hamako Hanazaki has been involvedin corporate legal affairs for many years and thus has sufficient knowledge of corporate management. Ms.
Hanazaki has participated in discussions of the Board of Directors as an outside director of the Company,and has provided apt opinions concerning legal risks and compliance. The Company therefore believes that
she is qualified to continue serving as an outside director.
Ms. Hanazaki does not have any conflicts of interests with the Company.

Management Plan

Yoshio Shirai

Having served in the role of director at Toyota Motor Corporation, Hino Motors, Ltd., and Toyota Tsusho
Corporation, Mr. Yoshio Shirai has abundant experience and insights as a manager. He also has experience asan outside director, having served in such positions as outside director and Audit & Supervisory Committee
member of Seiko Epson Corporation since 2016. Mr. Shirai has participated in discussions of the Board of
Directors as an outside director of the Company and has utilized his abundant management experience andinsights to provide apt opinions. We therefore believe he is qualified to continue serving as an outside director.
Mr. Shirai does not have any conflicts of interests with the Company.

2. Toward the Future Growth of Fujikura
I have three expectations for the future growth of Fujikura.
The first is the switch to a chief officer (CxO) structure and further
growth of global markets. Fujikura is targeting growth of its telecommunication systems business in overseas markets, mainly in Europe
and the U.S., along with the switch to a new management structure.
I think concrete numbers will be disclosed in the new mid-term business plan next year, but I want to continue to discuss the businessportfolio and allocation of human resources and material resources.
The second expectation is the pursuit of efficient, effective
management to further strengthen the financial base. I want Fujikura
to use the lessons learned from the past to improve management
efficiency without overlooking improvements, no matter how small
they may be.
The third is strengthening monitoring to facilitate decision-making
by management. To respond flexibly in a highly uncertain businessenvironment, I think a mechanism for providing feedback to management is needed along with monitoring the multiple factors that
impact the management of Fujikura by taking a risk-based approach.
I also want Fujikura to ascertain the medium and long-term impact
on business from climate change in recent years and steps taken to
improve the resiliency of the supply chain, among other factors.

Reasons for Electing

Messages from Management

2021 was a turbulent year for all of society due to the responseto the COVID-19 pandemic, the Russian invasion of Ukraine, andother upheavals. I also regard it as a turbulent year for Fujikura, as it
focused on the selection and concentration of businesses to complete the operational turnaround phase. I have participated in Board of
Directors meetings and many other meetings from the moment I waselected last year, and have engaged in many free and open-mindeddiscussions with management. I have strongly sensed the serious
intent to transform Fujikura on many occasions through discussions
thus far. I certainly want to see this serious intent take firm root as
the new culture of Fujikura in the sustainable growth phase.

Name

About Fujikura Group

Using the Risk Approach to Ascertain Impact onManagement from Multiple Perspectives*1 M ajor business partner: A business partner is regarded as a major business partner when 1% or more of the Company’s consolidated net sales arederived from sales to the business partner, or when Company purchases from the business partner amount to 1% or more of the business partner’s
consolidated net sales.
*2 Executive: An executive director or an employee who reports directly to an executive director*3 Substantial compensation: Amounts in excess of ¥10 million per year

57

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Fujikura Group
Integrated Report 2022

58

Corporate GovernanceCorporate Governance
Basic View on Corporate Governance

1 Board of Directors

Corporate Governance Structure

In April 2022, Fujikura adopted an executive structure with a Chief Executive Officer (CEO), Chief Financial Officer

General Meeting of Shareholders(CFO), and Chief Technology Officer (CTO), each of whom are responsible for different roles. The CEO is the chief
executive officer in charge of the corporate group consisting of Fujikura and its subsidiaries (hereafter, collectively

Appoint

Appoint

Appoint

referred to as the “Fujikura Group,” each subsidiary referred to as a “Group company”), and is responsible for forCooperate

an extremely high degree of professional expertise. The CTO is likewise the top person in charge of technology

Audit & Supervisory Committee

development. The adoption of a “three-chief” system with the CEO at the top and the CFO and CTO complement-(6 members: 1 full-time and 5 outside independent members)

Directors Not Serving as Audit &Supervisory Committee Members(5 directors: 1 non-executive director)

ing and supporting the CEO function makes it possible to manage the business based on more sophisticated andeffective business decisions.
Report59

Fujikura Group
Integrated Report 2022

ReportCooperate
Director,
President & CEO
Sustainability
Strategy Council

Risk Management
Committee

Whistleblowing
SystemInternal Reporting
Point
General Manager
of General Affairs
Division

External
Reporting Point
Law Office

Remuneration
Advisory
Committee

Internal
Audit

Quality

Management
Innovation
Committee

Independent
Business
Subsidiaries(FDC, FPCL,
FES)

Director and Director and Director andCorporate
CFO
CTO
Officer

Corporate
Officer

Corporate
Officer

Telecommunication
Systems
Electronic
Components
and Connector
Automotive
Products

Human
Resources
Legal Affairs
Governance

FDC: Fujikura Dia Cable Ltd.
FPCL: Fujikura Printed Circuits Ltd.
FES: Fujikura Energy Systems Ltd.

Management
Planning
Finance
Real Estate

R&D
New BusinessSpecial Initiatives of the Fujikura Group

When the Board of Directors makes decisions on the following matters concerning nomination of directors, theNomination Advisory Committee (composed of a majority of outside directors and chaired by an outside director) verifies the impartiality and appropriateness of the decision-making process, as an advisory body to the Board of Directors.
This committee also participates in the formulation of standards for election and dismissal of directors, successor plans, and standards of independence for outside directors.

ReportReportCorporate Governance

4 Nomination and Remuneration of Directors

Accounting Auditors

The Audit & Supervisory Committee consists of six committee members in total, one full-time internal director andfive outside directors who are independent of Fujikura management. An Audit & Supervisory Committee Office wasestablished as the organization which assists the Audit & Supervisory Committee in its activities, at the direction of
the committee. It is staffed with full-time dedicated personnel.

Audit andSupervisory
Committee
OfficeInquiry

Nomination
Advisory
Committee

Business Performance

Board of Directors (11 directors)

mulating and pursuing company-wide strategy. The CFO is the top person in charge of finance, an area that requires

3 Audit & Supervisory Committee

Management Plan

2 Executive Structure[Establishment of Internal Control System by Executive Directors and Audit by the Audit & Supervisory Committee]
Executive directors are responsible for overseeing the execution of duties by themselves or the corporate
officers they supervise in the business divisions, the business departments supporting those business divisions, or the corporate divisions or Group companies the Board of Directors has put them in charge of. They are
responsible for compliance with and operation of Fujikura’s internal control system. As members of the Board of
Directors, which makes decisions on the internal control system, executive directors are responsible for ensuring the appropriateness of the internal control system.
The Audit & Supervisory Committee supervises the status of compliance with and operation of the internal control system related to the execution of duties by executive directors. Audit & Supervisory Committee
members therefore investigate the status of Fujikura and its Group companies as needed, and check and verify
information provided by the executive side. They may also request direct explanations from executive directors and others involved in execution. In addition to the above, Audit & Supervisory Committee members are
responsible for the appropriateness of the internal control system as members of the Board of Directors, whichmakes decisions on the internal control system.

Messages from Management

Fujikura adopted the organizational form of a company with an Audit & Supervisory Committee to separate thesupervisory and executive functions and enable swift, resolute decision-making on business operation whilestrengthening the supervisory function fulfilled by directors specialized in the audit and supervisory functions.
Following the annual General Meeting of Shareholders held on June 29, 2022, Fujikura adopted a structure with a
total of 11 directors, five who are outside directors (all Audit & Supervisory Committee members) and six who areinternal directors. The outside directors who comprise major of the Board of Directors are independent of Fujikura
management, and are equipped with management experience and expertise in finance, legal affairs, and otherareas. They engage in sufficient discussion of and make decisions on important business matters (formulation of themedium and long-term strategies, revision of the business portfolio, etc.) together with internal directors at Boardof Directors meetings. From FY2022 onward, a director who does not perform an executive role serves as thechairperson of the Board of Directors and takes charge of the agenda for Board meetings. This was implemented tostrengthen the supervisory function of the Board of Directors.

About Fujikura Group

Fujikura decided to embark on the sustainable growth phase from FY2022 onward. Our basic view on corporate
governance for moving forward with the new phase effectively is explained below.

When making decisions on the following matters concerning remuneration of directors, the Remuneration
Advisory Committee (composed of a majority of outside directors and chaired by an outside director) verifies theimpartiality and appropriateness of the decision-making process, as an advisory body to the Board of Directors.
This committee also participates in a disciplined process of determining director remuneration and amount, andin determining the amount of remuneration for individual directors.

(Energy &Telecommunication
Systems)
Subsidiaries
managing
strategic regions(AFL)

AFL: AFL Telecommunications LLC

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60

Corporate GovernanceCorporate GovernanceCommittee Activities

Performance-linked Coefficient
TargetPerformance

Name

Description

Composition

Number of
Meetings Held

Consolidated operating margin

1.8%

3.8%

The body that verifies Fujikura’s operational
execution structure and the status of execution from the perspective of risk (including
compliance), prevents and evaluates losses,
formulates a response policy, and shares information, among other activities

Consolidated rate of return on equity (ROE)

-6.5%

-3.4%

Chairperson: Naoki Okada, Director,
President and CEO
Composed of executive directors andcorporate officers

Nomination
Advisory
Committee

An advisory committee to the Board of
Directors established to ensure objectivity andtransparency in the decision-making processconcerning nomination of candidates for director positions

Five committee members
Chairperson: Yoshio Shirai, Director
Members: Keiji Yoshikawa, Director;
Yoji Yamaguchi, Director; Naoki
Okada, Director, President and CEO;and Masahiko Ito, Director andChairman

8 timesRemuneration
Advisory
Committee

An advisory committee to the Board of
Directors established to ensure objectivity andtransparency in the decision-making processconcerning remuneration of directors

Four committee members
Chairperson: Keiji Yoshikawa, Director
Members: Yoshio Shirai, Director;
Kozo Meguro, Director; and Naoki
Okada, Director, President and CEO

8 times

Sustainability
Strategy Council

The meeting body that pursues the activities
necessary for formulation of sustainability
targets that include perspectives of the ESG +F (Finance and Future) materialities and otheraspects of sustainable company management

Chaired by Naoki Okada, Director,
President and CEO

3 timesManagement
Innovation
Committee

This committee pursues (1) efficient use of management resources (including governance)and optimization of the business portfolio, (2) cost reduction to improve efficiency, and (3)reinforcing sales and purchasing power to increase earning power.
Naoki Okada, Director, President and CEO, is chief of all operations and pursues (1),Tatsuya Banno, CTO, pursues (2), and Koichi Takemoto, CFO, pursues (3).

RiskManagement
Committee

8 times

Note:	When determining the performance-linked compensation of each executive director, we take into consideration the
degree to which the targets for operating margin and return on invested capital (ROIC) are achieved for the division
an executive director is in charge of, in addition to the indicators linked to consolidated performance noted above.

This is a system that provides compensation in the form of common shares of the Company, apart from the monetary compensation in (1) and (2) above. This system is mainly intended to enhance the motivation of directors tocontribute to an increase in corporate value of the Company by placing directors in a position to enjoy the advantage
of a rising share price as well as to bear the risk of a falling share price, thereby sharing the advantage and disadvantage of such fluctuations with shareholders.

Procedure for Determining Remuneration
In Fujikura, when the Board of Directors determines the amount of remuneration for directors who are not Audit& Supervisory Committee members, it makes such decisions after these matters have been deliberated by the
Remuneration Advisory Committee, which is an advisory body to the Board of Directors (chaired by an outside
director and consisting of the director in charge of human resources and three outside directors). The Remuneration
Advisory Committee confirms that the decision-making process for evaluating the performance of each director, theappropriateness of the level of remuneration based on the market, the remuneration structure, and determined thespecific amount of remuneration is fair and appropriate, and reports the results of such deliberations to the Board of
Directors. The Board of Directors makes a decision on the amount of remuneration for directors who are not Audit &Supervisory Committee members, based on this report.

Total Amount of Consolidated Remuneration, etc. for Each Officer
Officer Category(2) Short-term performance-linked compensation
A base amount by rank and grade shall be established reflecting the corporate performance or the performance ofthe divisions under each director’s responsibility. The amount of compensation under this category shall vary within arange between 0% and 200% of the aforementioned base amount, depending on certain indicators (operating profit
ratio, return on equity (ROE), and return on invested capital (ROIC)). These indicators are “indicators that easily reflect
management measures” and “indicators that have a strong correlation with the level of return of profits to shareholders,” and are used because they are indicators which are strongly correlated with the Company’s growth strategy.

Directors (excluding Audit& Supervisory Committee
members and outside directors)

204

142

30

32

5

Directors (Audit & Supervisory
Committee members)(excluding outside directors)

29

25

4

—

2

Outside officers

67

67

—

—

8

Notes:

1. The amount of remuneration for directors who are not Audit & Supervisory Committee members was set at a maximum of 600 million yen a year at
the 169th General Meeting of Shareholders held on June 29, 2017.
2. Introduction of a stock-based compensation system to grant common stock in Fujikura upon retirement as compensation to directors who are not
Audit & Supervisory Committee members was approved at the 169th General Meeting of Shareholders held on June 29, 2017. The amount of suchcompensation approved for one fiscal year is a maximum of 120 million yen and a maximum of 285,000 shares.
3. The amount of remuneration for directors who are Audit & Supervisory Committee members approved at the 169th General Meeting of Shareholders
held on June 29, 2017 is a maximum of 100 million yen a year (including compensation of outside directors of a maximum of 70 million yen a year).

Total Amount of Consolidated Remuneration, etc. for Each Officer
Name

Joseph E.
Gallagher

Special Initiatives of the Fujikura GroupThe portion corresponding to the monitoring and supervision functions of each director, which is a fixed amountaccording to each director’s rank and grade.

Number of Officers
Remunerated

Corporate Governance(1) Basic compensation

Total Amount of Compensation by Type (Millions of yen)
Total Amount of
Remuneration, etc.
Performance-linked
Stock-based(Millions of yen) Basic Compensation
Compensation
Compensation

Business Performance

In addition to handling a large variety of products, Fujikura operates its business globally, and director duties arealso highly complex and varied. Our basic policy is that director remuneration should be at a level appropriate foroutstanding human resources who are capable of accomplishing such duties. We have therefore classified director
remuneration into the following three specific categories based on the survey results from multiple research groups,
mainly on listed companies, and have established a system of remuneration based on objective indicators and evaluation, while also strengthening the link to performance. Variable compensation linked to performance and stock
prices (short-term performance-linked compensation and stock-based compensation) is expected to be around 40%
of total director remuneration.
Remuneration of non-executive directors shall consist only of basic compensation in a fixed amount, according to
the role of each director. No short-term performance-linked compensation or stock-based compensation will be paid.

Management Plan

26 times

Policy on Determining Remuneration

Fujikura Group
Integrated Report 2022

Messages from Management(3) Stock-based compensation

Policy and Procedure for Determining Director Remuneration

61

About Fujikura Group

Type of indicator

Fujikura has established and is operating the following voluntary committees.

Total Amount of Compensation by Type (Millions of yen)

Total Amountof Consolidated
Remuneration, etc.
(Millions of yen)

Officer
Category

190

Director

Company Category

Basic
Compensation

Performancelinked
Compensation

Stock-based
Compensation

Other

Fujikura Ltd.

10

—

—

—

AmericaFujikura Ltd.

45

111

—

25

Note: The total amount of consolidated remuneration is omitted for individuals receiving total consolidated remuneration, etc. of less than 100 million yen.

Fujikura Group
Integrated Report 2022

62

Corporate GovernanceCorporate Governance
Skills Matrix

Policy and Procedure for Nominating Candidates for Director

Executive/
Management
Non-executive

Planning

Personnel

Governance

GlobalFinance andAccounting

Legal Affairs
BusinessEngineering and CompliExperience*
ance

E&I

Male

Japan

A/C

Male

Japan

Male

Japan

E&I
A/C

Male

Japan

○

E&I
A/C

Male

U.S.

○

E&I
A/C
V

Male

Japan

Male

Japan

Female

Japan

Male

Japan

Directors (underlined names are those of outside directors independent of the management of the Company)○

Naoki Okada

Executive○

Koichi Takemoto

Executive

Tatsuya Banno

Executive

Joseph E.
Gallagher

Executive

Shigeo Sekikawa

Nonexecutive

Yoshio Shirai

Nonexecutive

Hamako Hanazaki

Nonexecutive

Keiji Yoshikawa

Nonexecutive

Yoji Yamaguchi

Nonexecutive

○

Male

Japan

Kozo Meguro

Nonexecutive

○

Male

Japan

Female

Japan

Male

Japan

A/C

Male

Japan

L-A
V

Male

Japan

V

Male

Japan

Male

Japan

○
○
○

○
○

○
○
○

○

○
○

○

○

Corporate Officers (those not serving as directors)○○

Keiko Shindo

Executive

Yuki Mori

Executive

Noriyuki
Kawanishi

Executive

Junji Fukuhara

Executive

Shuichi Nasu

Executive○

Tetsuya Mangyoku

Executive

○

○
○
○

63

Fujikura Group
Integrated Report 2022

In Fujikura, when the Board of Directors proposes the nomination and dismissal of directors who are not Audit& Supervisory Committee members (excluding outside directors) to be decided by the General Meeting of
Shareholders, it submits a proposal after these matters have been deliberated by the Nomination Advisory
Committee, which is an advisory body to the Board of Directors (chaired by an outside director and consisting of
the Director, President & CEO, the director in charge of human resources (who is concurrently serving as Director,
President & CEO), and three outside directors). The Nomination Advisory Committee deliberates on the standards
for director nomination and the reasons given by the Board of Directors for nominating each candidate, including
their performance. The committee confirms that the decision-making process for the candidates proposed by the
Board of Directors is fair and appropriate, and reports the results of such deliberations to the Board of Directors. The
Board of Directors makes a decision on the proposal to nominate directors for referral to and election by the General
Meeting of Shareholders based on this report.

Analysis and Evaluation of the Effectiveness of the Board of Directors
To improve the effectiveness of the Board of Directors, an annual survey of all directors is conducted on the effectiveness of the Board of Directors. The survey includes questions on the adequacy of Board meetings overall (time,
frequency, management of meeting proceedings, minutes, etc.), adequacy of agenda items (timing, importance, volume of information, etc.), aspects of Board members (participation in discussions, etc.), and executive office function. Fujikura strives for continual improvement by considering the results of the survey and implementing remedial
measures for any problems. Specific measures include:1) Improving various materials and holding explanatory sessions for outside directors to ensure sufficient
discussion in Board of Directors meetings2) Foreseeing, analyzing, and identifying risks to avoid or mitigate losses if such risks materialize duringbusiness operation and strengthening the system for rapid response when a risk materializes3) R evising the criteria for referring matters to the Board of Directors, and implementing otherimprovements to create a system that makes it possible for the Board of Directors to focus mainly on
discussing medium and long-term business strategy and other important matters in Board of Directors
meetings
Future issues to address include producing materials that provide concise, clear points of discussion and providing information to directors earlier to enable more efficient discussions. This will help address the desire for evenmore extensive medium to long-term and strategic discussion and resolve the consequent increase the frequencyof meetings and time spent on debate this entails.

Fujikura Group
Integrated Report 2022

Special Initiatives of the Fujikura Group* Up to 2 items considered major skills may be indicated with ○.
* “Business Experience” denotes experience in the Company accumulated in the following areas of the business in accordance with the Company’s 2030 Vision.
• A/C (Advanced Communication): This refers to leveraging our engineering capabilities in the Telecommunication Systems business, which includes our greatest
strength of optical wiring solutions, to aim at business areas where we can contribute to the further development of the advanced information society.
• E&I (Energy & Industry): This refers to leveraging our engineering capabilities in fields such as power transmission cables for renewable energy, superconductor
research, and technology for use in industrial machinery, to aim at business areas where we can contribute to the utilization of diverse sources of energy andsystems for their efficient management.
• L-A (Life-Assistance): This refers to leveraging our engineering capabilities in fields such as FPC, connectors, sensors and other electronic components, to aim atbusiness areas where we can contribute to further advances in healthcare and improvements in quality of life (QoL).
• V (Vehicle): This refers to leveraging our engineering capabilities in fields of electronic components, etc., to aim at business areas where we can contribute to thenext-generation mobility society, including the ongoing “once in a century” transformation of automotive technology.

Procedure for Selecting Candidates for Director

Corporate GovernanceNonexecutive

Business Performance

Masahiko ItoManagement Plan

Nationality

For Fujikura to achieve sustainable growth as a manufacturing company, we need to formulate a strategy based on
establishing a strong financial base and advanced technological capabilities. We must build a system that allows fulland sufficient discussion in Board of Directors meetings to enable Fujikura to make decision on important mattersthat are central to the direction of and growth strategy for our company. Fujikura selects human resources who arecapable of formulating and pursuing company-wide strategy from a panoramic perspective for executive director
positions. For non-executive director positions, we select human resources who are capable of properly and aptly
supervising or providing advice on important matters that are central to Fujikura’s direction and growth strategy.

Messages from Management

GenderR&D

Policy on Selecting Candidates for Director

About Fujikura GroupThe following skills matrix shows the skills that directors and corporate officers of Fujikura possess. These areconsidered the main skills currently needed to strengthen the supervisory function and consider the vision for businesses aimed at sustainable growth for Fujikura, which has just embarked on the sustainable growth phase.

64Corporate GovernanceTop Management (as of June 29, 2022)
Directors
About Fujikura Group

Reappointed

Reappointed

Outside Director, Member of the Audit
and Supervisory Committee

Hamako Hanazaki

Keiji Yoshikawa

Yoji Yamaguchi

Kozo Meguro

Outside Director, Member of the Audit
and Supervisory Committee

Management Plan

Naoki Okada

Chairperson of the Board of Directors

Yoshio Shirai

Director, Member of the Audit
and Supervisory Committee

Messages from Management

Masahiko Ito

Shigeo Sekikawa

Director, President and CEO

Outside Director, Member of the Audit
and Supervisory Committee

Outside Director, Member of the Audit
and Supervisory Committee

Business Performance

Outside Director, Member of the Audit
and Supervisory Committee

Corporate Officers Other than Members of the Board/Project Leader

Newly Appointed

65

Fujikura Group
Integrated Report 2022

Director and CTO
Responsible for Research and
New Business Development Unit
Newly Appointed

Joseph E. Gallagher

Director and Corporate Officer
President, AFL Telecommunications LLC.
Reappointed

Noriyuki Kawanishi

Chief of the Corporate Staff Unit
General Manager of Human Resources& General Affairs

Head of the Telecommunication
Systems Business Unit

Junji Fukuhara

Shuichi Nasu

Tetsuya Mangyoku

Head of the Electronic Products &Connector Business Unit

Head of the Automotive Products
Business Unit

Head of the Production Engineering Unit

Masataka Mito
Project Leader, special
appointment by the CEO

Special Initiatives of the Fujikura Group

Director and CFO
Responsible for Corporate Strategy
Planning Unit andReal Estate Business Unit

Tatsuya Banno

Yuki Mori

Chief of the Corporate Governance Unit
General Manager of the Legal Department

Corporate Governance

Koichi Takemoto

Keiko Shindo

Global Corporate Officers
Jason Peng

Gordon Tan

Takaaki Habu

President of Fujikura America Inc.

CFO of Fujikura Asia Ltd.

President of Fujikura (China) Co., Ltd.

Jenny Hui

Vichan Kumthonkittikul

CFO of Fujikura Hong Kong Ltd.

Vice President of Fujikura Electronics(Thailand) Ltd.
Fujikura Group
Integrated Report 2022

66

Special Initiatives of the Fujikura Group

Main Supporting Activities
Support is provided through fundraising donations, volunteer activities, and product sales, which also contribute tofostering the right mindset (thinking, action, and belief) for each individual employee.

Many Fujikura Group companies,
including Fujikura Ltd., makedonations. The entire FujikuraGroup considers the support
provided to Fujikura Gakuen to
be the focal point of our social
contribution activities, and this
support will be sustained going
forward.

Distributing Fuji Café Products at theGeneral Meeting of Shareholders
We distribute cookies made at Fuji Café, which isoperated by Fujikura Gakuen in Izu Oshima, to those
who come to the General Meeting of Shareholders
to help our shareholders understand our efforts insupport activities. Distribution has been suspended
since 2019 due to the COVID-19 pandemic.

Messages from Management

Fujikura Sakura Works conducts
fundraising activities in supportof Fujikura Gakuen. In FY2020,
we were not able to deliver
the collected funds directly tothe business office due to thepandemic, but Sakura Works willcontinue its support activities in
the future.

Group Company Donations

About Fujikura Group

Presenting Donations
from the Works

Distribution to General Meeting of Shareholders attendees

Supporting Fujikura Gakuen
Groupcompany
donations

Corporate
donationsPurchase of
Fuji Café products
within the Group

Distributing
Fuji Café products at
the General Meetingof Shareholders

Fujikura Gakuen Circle of Support

Works
donationsManagement Plan

Our support of Fujikura Gakuen forms part of the Fujikura Group’s social contribution activities. The goal
is to support its users, namely children with cognitive disabilities, in developing physically and mentallyin a wholesome manner and gaining essential skills for living independently in the local community while
preserving their dignity.

Supporters
club
(wage
deductions)On-site sale ofFuji Café products

Established

Employeedonation drive

Volunteering by
new employees

Seconding
officers

Participation in
events(founding festival,
Christmas)

Vending machines
donations

Volunteer Activities of New Employees
Each year, newly hired employees
participate in volunteer activities at Tama
Fujikura Gakuen as part of their new hire
training. These activities enable new
employees to foster bonds with theircolleagues, appreciate the mission of
the Group’s founders, and recognize theimportance of supporting Fujikura Gakuen.

Corporate Governance

Harukichi Nakauchi,
founder of Fujikura Gakuen

Fujikura Gakuen, a social welfare corporation, was founded on June 7, 1919 in the town ofMotomachi in Izu Oshima. Harukichi Nakauchi, the blood brother of the founder Zenpachi
Fujikura, donated a sizable amount of his personal assets (currently worth approximately 2 billion yen) and 40,000 tsubo of land (approx. 132,000 m2) in Izu Oshima for the land and building
to establish the school and residence for mentally handicapped children and adults. Today,
Fujikura Gakuen has facilities on Izu Oshima and in Tama (Hachioji City). These facilities havearound 100 workers who provide 24-hour care and education to approximately 130 individuals.
Since its inception, the Fujikura Group has made donations as a company and individual
Fujikura employees have also donated their own money to support operation of the organization. The support provided to Fujikura Gakuen is considered the focal point of the FujikuraGroup’s social contribution activities, and this support will be sustained going forward.

Business Performance

What Is Fujikura Gakuen?

On-site Sale of Fuji Café Products
Located in Izu Oshima, Fuji Café is a living assistance center where students ofFujikura Gakuen undergo vocational training to gain independence. The Fuji Café
exhibition and sale, which features products made by Fuji Café (pound cakes,
cookies, etc.), has been hosted at the Fujikura head office and Nishi Nippon Electric
Wire & Cable with ongoing support.

1919

Special Initiatives of the Fujikura Group

Facilities

2 locations*No. of clients

Approx. 130
Fujikura Gakuen in Izu Oshima

67

Fujikura Group
Integrated Report 2022

Fuji Café, operated by Fujikura Gakuen* Izu Oshima, Tama (Hachioji City)

Painting (FY2019)

Fuji Café on-site sale at the head officeFuji Café on-site sale at Sakura Works

Fujikura Group
Integrated Report 2022

68Special Initiatives of the Fujikura Group
Wildlife and Plants in Fujikura Kiba Millennium Woods

Fish

Birds

Insects• 80 species native tothe Kanto area;
500 tall and medium-sizedtrees, 2,000 shrubs•L imited to fish, shrimp, andshellfish in the Arakawa
watershed• Around 20 species,
including the common kingfisher, brown-eared bulbul,
and spot-billed duck•O ver 50 species ofdragonflies, butterflies, andother insects spotted• 65 grass, moss, and aquaticplant species;
approx. 15,000 plants• Approximately 800 fish of
10 different species were released; there are now around
1,300 fishCommunication with Local
Residents

Fujikura Kiba Millennium Woods

When we redeveloped the grounds of our head office inNovember 2010, we opened a biotope and garden called
Fujikura Kiba Millennium Woods next to our head office in
response to requests from local schools and citizens formore greenery and the increasing interest in biodiversity.
The name, Fujikura Kiba Millennium Woods, incorporates the hope shared with everyone in the Kiba area of
Koto-ku that the abundance of nature will persist in the futurefor 1,000 years.
Fujikura Kiba Millennium Woods covers 2,200 m2 andcontains two ponds and a river that connects them, a floatingisland, walking paths, and other features. We gave preference

Use for nature education
activities for local children

Business Performance

The Fujikura Group is keenly aware of the close relationshipbetween its business activities and the global environment,
and has set the goal of being a corporate group that is good forboth people and the environment and strives to make every
effort to protect the global environment. All living things liveby mutually supporting one another either directly or indirectly,
and our lives and lifestyles are supported by the many blessings generated through biodiversity. The Fujikura Group formulated “Roadmap 2030: A Long-Term Vision for Biodiversity”
in January 2013 and is pursuing initiatives aimed at increasing
every employee’s awareness of protecting biodiversity.

Fujikura Kiba Millennium Woods
Created as a Symbol of the Local
Community

We received the Award of Excellence (large company division) for the first time in the 2020 Environmental Human
Resource Development Company Awards sponsored by
The Ministry of the Environment and the Environmental
Consortium for Leadership Development (EcoLeaD). Thisaward was given in recognition of the aforementioned kindsof environmentally-friendly production activities, efforts
toward employee education, and other comprehensive initiatives, and activities to promote biodiversity in cooperation
with the local area and government, as represented by the
Fujikura Kiba Millennium Woods. The 2020 Environmental
Human Resource Development Company Awards recognizes
companies which support activities to nurture and produce
personnel to lead environmentally-friendly company activities.
It is based on the Act on the Promotion of Environmental
Conservation Activities through Environmental Education.

Management Plan

Fujikura’s Resolve to Protect
Biodiversity

Messages from Management

Fujikura Given the Award of
Excellence in the 2020 Environmental
Human Resource Development
Company Awards from the Ministryof the Environment (Recognizes
Corporations Promoting Developmentof Environmental Human Resources)

to native species in designing it to replicate the abundantforests and woods that existed in the Musashino plateau several hundred years ago, as a space dedicated to wildlife. The
woods have now grown enough for the chicks of the spotbilled duck and the common kingfisher to fly out of their nests.

At Fujikura Kiba Millennium Woods, we place importanceon active communication with employees and members of
the community. The woods are mainly used for educational
activities to raise environmental awareness among employees, nature education for local preschools, kindergartens, andelementary schools, as well as for graduate school classes
and government-sponsored ecological tours.

About Fujikura Group

PlantsUse for graduate
school classes
Corporate Governance

Bird’s Eye View

Certificate of Commendation

Walking path around the water’s edge (Koto-ku)

Lower
pond
Open path

Features
Built in 2010

Area: 2,200 m2
Limited to native
species

69

Fujikura Group
Integrated Report 2022

In 2017, Fujikura Kiba Millennium Woods was registered as a good green area under
the Edo-Midori Green Area Registration. This system restores the environment
suitable for the creatures of Tokyo, including wildlife such as insects and birds, byplanting vegetation (native species) naturally distributed in Tokyo on the premises ofbuildings, etc. Fujikura was registered because of its participation in the Edo Green
Restoration Program, a project to plant native species being implemented by the Tokyo
Metropolitan Government as a public-private partnership, where relevant industries join
together to formulate measures for spreading native species in Tokyo.

Special Initiatives of the Fujikura Group

Upper
pond

Certified as Edo-Midori Green Area Registration(Excellent Green Area)

Fujikura Group
Integrated Report 2022

70

Corporate Profile
Corporate Profile

Stock Information (as of March 31, 2022)
Capital:Founded:February 1885

Headquarters: 1-5-1, Kiba, Koto-ku, Tokyo 135-8512

Established:

March 1910

53 billion yen (as of March 31, 2022)

1. Authorized shares: 1,190,000,000
2. Issued Shares:

295,863,421 (including 19,456,613 treasury shares)

3. Major Shareholders
Name of Shareholder

Main Consolidated Subsidiaries (as of March 31, 2022)

8,456

3.06

6,777

2.45

Fujikura Automotive (Thailand) Ltd.

Sumitomo Mitsui Banking Corporation
Custody Bank of Japan, Ltd.
(Sumitomo Mitsui Trust Bank, Limited Retirement Benefit Trust Account)
Dowa Metals & Mining Co., Ltd.

6,564

2.37

Fujikura Electronic Components (Thailand) Ltd.

The Shizuoka Bank, Ltd.

5,789

2.09

Fujikura Employees Shareholding Association

4,927

1.78

East, South, and Southeast Asia

State Street Bank and Trust Company 505001

3,476

1.26

JP Morgan Chase Bank 385781

3,411

1.23

DDK Ltd.
Tohoku Fujikura Ltd.

Fujikura Logistics Co., Ltd.
Fujikura Business Support Co., Ltd.

Fujikura Dia Cable Ltd.
Yonezawa Electric Wire Co., Ltd.
FiberTech Co., Ltd.
Optoenergy, Inc.
Fujikura Printed Circuits Ltd.

Fujikura Electronics Vietnam Ltd.
Fujikura Fiber Optics Vietnam Ltd.
DDK VIETNAM Ltd.
Fujikura Automotive Vietnam Ltd.
Fujikura Korea Automotive Ltd.

EMEA (Europe, Middle East, and Africa)
Fujikura Europe Ltd.

(Notes)1. The numbers presented in “Number of Shares Held” are based on the list of shareholders.
2. The Company owns 19,457,000 treasury shares in addition to those noted above. Treasury shares do not include the 602,000 shares held by the trust
account relating to the stock distribution trust established for the stock-based compensation plan for directors (excluding outside directors) and executive officers.

External Evaluation
FTSE Blossom Japan Sector Relative Index (from April 2022)* Selected as a Government Pension Investment Fund (GPIF) ESG Index

Configured by FTSE Russell, this index reflects the performance of Japanese companies
that demonstrate strong relative performance in Environmental, Social, and Governancepractices in each sector.

Fujikura Automotive Europe S.A.U.

FTSE Blossom Japan Index (from June 2017)

Fujikura Automotive Europe GmbH

* Selected as a Government Pension Investment Fund (GPIF) ESG Index

Fujikura Automotive Romania S.R.L.

Developed by FTSE Russell, this index consists of Japanese company stocks deemed
outstanding from the perspectives of Environment, Social, and Governance practices.

Fujikura Automotive Morocco Tangier, S.A.S.
Fujikura Automotive Morocco Kenitra, S.A.S.

FUJIKURA COMPOSITES Inc.

Fujikura Automotive Ukraine Lviv LLC

Fujikura Kasei Co., Ltd.

Fujikura Automotive MLD S.R.L.

Americas (North, Central, and South America)

Fujikura (China) Co., Ltd.

America Fujikura Ltd.

Fujikura Electronics Shanghai Ltd.

Fujikura America, Inc.

DDK (Shanghai) Co., Ltd.

AFL Telecommunications LLC

Fujikura Fiber-Home Opto-Electronics Material Technology

Fujikura Automotive America LLC.

Co., Ltd.

Fujikura Automotive Mexico, S. de R.L. de C.V.

Fujikura Zhuhai Co., Ltd.

Fujikura Automotive Paraguay S.A.

* Selected as a Government Pension Investment Fund (GPIF) ESG Index

This index was jointly developed by S&P Dow Jones Indices and Japan Exchange Group,
Inc. Companies in Japan that disclose sufficient environmental information and companies
in Japan that are highly carbon efficient are selected for this index.

MSCI Japan Empowering Women Index (WIN)This ESG investment index was developed by the major US financial services company,
MSCI. It is composed of Japanese companies that lead their industries from the standpoint of gender diversity through data and diversity initiatives such as the employment
and promotion of women.

Special Initiatives of the Fujikura Group

China

S&P/JPX Carbon Efficient Index
Corporate Governance

Equity method affiliates

Business Performance

Fuji Materials Ltd.

PT Fujikura Indonesia

Management Plan

Shinshiro Cable, Ltd.

Fujikura Asia Ltd.

Messages from Management

3.69

DDK (Thailand) Ltd.

Suzuki Giken Co., Ltd.

20.42
6.81

Fujikura Solutions Ltd.

Fujikura Automotive Asia Ltd.

56,45010,192

Fujikura Electronics (Thailand) Ltd.

Fujikura Precision Ltd.

The Master Trust Bank of Japan, Ltd. (Trust Account)

18,816

FUJIKURA HIGH OPT Co., Ltd.

Fujikura Shoji Co., Ltd.

Shareholding
Composition (%)

Custody Bank of Japan, Ltd. (Trust account)

ThailandNumazu Copper Refining and Rolling Co., Ltd.

Number of Shares Held(Thousands)

Taiju Life Insurance Company Limited

Japan

Nishi Nippon Electric Wire & Cable Co., Ltd.

About Fujikura Group

Company name: Fujikura Ltd.

Note:	Fujikura Ltd.’s incorporation of this MSCI index, and its use of the MSCI logo, trademark, service mark,and index name in this release, does not constitute a sales endorsement, warranty, or support of
Fujikura Ltd. by MSCI. MSCI indices are the sole property of MSCI. MSCI index names and logos aretrademarks or service marks of MSCI and its affiliates.

Fujikura Automotive Guangzhou Co., Ltd.
Fujikura Hong Kong Ltd.

Fujikura is a signatory to the UN Global Compact.
WE SUPPORT71

Fujikura Group
Integrated Report 2022

Fujikura Group
Integrated Report 2022

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