Integrated Report 2023
For the Fiscal Year Ended March 31, 2023

Contents
SHIBAURA MACHINE's Story
02

04
06
08
10
12
14

Our Starting Point

Message from the Chairman
Our History

38

Value Creation Process

43

Eight Technological Platforms

42

 HIBAURA MACHINE Products —S
Supporting Manufacturing

44

Message from the PresidentManagement Strategy
20
24
28

 edium-Term Management Plan
M
“Management Reform Plan”

New SHIBAURA MACHINE Long-Term Vision 2030
Message from the CFO

Special Feature
SHIBAURA MACHINE’s Value Creation
30

36

Strengths Honed Over More Than 80 Years

Management Message
16

Sustainability Management of
SHIBAURA MACHINESpecific Initiatives in the Value Creation Process

48
52
58

Sustainability Management of
SHIBAURA MACHINE
Human Resource Strategy
Intellectual PropertySupply Chain Management
Environment

Discussion among the Chairman andOutside Directors

SHIBAURA MACHINE’s Corporate GovernanceBoard Members

Management Strategy by Company
60
62
64

Metal & Plastics Industrial Machine Company
Machine Tools Company

Control Systems Company

Corporate Data
66
68
70

Financial and Non-Financial Highlights
10-Year Financial Data (Consolidated)
Corporate Information

Editorial Policy

We have published our Integrated Report 2023 to help a wide range of stakeholders better understand our initiatives aimed at thelong-term, sustained enhancement of corporate value. The report has been compiled with an emphasis on factors that are particularly
important for corporate value creation, including management strategies and environmental, social, and governance initiatives.

Also, we have referred to the Integrated Reporting Framework of the International Financial Reporting Standards (IFRS) Foundation and
the Ministry of Economy, Trade and Industry’s Guidance for Collaborative Value Creation.

The HRS-500 master gear hobbing machine, completed in 1953

Looking to the Future
Manufacturing Products Never Seen Before

SHIBAURA MACHINE’s founder Kametaro Fujishima had a deep passion forrealizing domestic production and building the world’s No. 1 manufacturer.

Passed down from generation to generation, this passion has become part of our corporate DNA.
We continue to welcome and overcome challenges, thereby supporting society’s infrastructure.

Integrated Report 2023

01

SHIBAURA MACHINE’s Story
Our Starting Point

Our founder Kametaro Fujishima embarked on an ambitious initiative that led directly to thecorporate culture we subsequently developed.
In 1913, prior to the Company’s founding, Japan’s first turbine ship became stranded off the coast of South America.
The accident was caused by the ship’s imperfectly manufactured reduction gears. When the high speed rotation of
the steam turbine was reduced to match the rotational
speed of the screw, the load concentrated on one tooth,which consequently broke. Upon learning that the poor
quality of the gears was the cause, Fujishima resolved tocontribute to the development of Japan’s shipbuilding
industry by making the world’s best machine tools for the
manufacture of reduction gears. The decision reflected his
understanding of how crucial the development of shipping
was to Japan as an island nation.
In 1938, SHIBAURA MACHINE was founded with the mission of achieving domestic production of machine tools,
which Japan had to import from Europe and the UnitedStates at the time. Following an order issued by President
Fujishima, in 1951 the Company launched a concerted
effort to make the world’s most precise gears. In 1953, wecompleted the HRS-500 master gear hobbing machine, themain operation of which was milling the master gears ofhobbing machines for ship reduction gears. From then on,
we relentlessly pursued ever-higher levels of precision. As aresult, the seventh iteration of the master worm wheel
achieved the world’s highest precision with a maximum
cumulative pitch deviation of four thousandths of a millimeter. Even today, this level of precision remains unsurpassed anywhere in the world. Large hobbing machines
equipped with high-precision worm wheels manufacturedby the HRS-500 master gear hobbing machine have beenused for milling the large reduction gears of numerous shipturbines. In 2009, HRS-500 was certified as part of Japan’s
Mechanical Engineering Heritage by the Japan Society of
Mechanical Engineers. Since our first groundbreaking
achievements, each and every one of our employees has
inherited a pioneering spirit that makes the “impossible”
possible through untiring research and effort. Moreover,
our mindset is precisely what enables us to do what others
cannot and thereby solve an array of issues.

Our Starting Point
S i n ceFounder

Kametaro Fujishima

02

Integrated Report 2023

1938

Founder of SHIBAURA MACHINE, born in 1886
After joining Shibaura Engineering Works Co., helped
establish and became president of Shibaura Machine
Tool Co., the predecessor of SHIBAURA MACHINE
Established the foundations of SHIBAURA MACHINE byrolling out numerous state-of-the-art machine tools,
including master gear hobbing machinesCorporate Principles Connected to
the Founding Spirit
Corporate Identity

We will contribute to maximizing value forour customers around the world.
Basic Management Policy

Adapting to the times and innovating

We remain a company which adopts the latest technologies, adapts,
and innovates without fear of change.

Customer satisfaction which exceeds expectations

We not only meet expectations, but also achieve customer satisfaction
which exceeds expectations.

Contributing to society by helping to create infrastructure
We take pride in our involvement in the industrial base andbenefiting society everywhere.

Developing human resources for the next generation
We will continue to nurture people who are responsible,
take pride in their work, and develop their skills.

Appreciation, inspiration, and passion

We aim to share the excitement of creating solutions while remaining thankful
to our customers, business partners, and families.

Integrated Report 2023

03

SHIBAURA MACHINE’s Story

Message from the Chairman

Message fron the Chairman

We will continue progressing on our pathto 2030, sprouting and then reaping theharvest of the seeds we have sown.
Overcoming These Confusing Times
The global situation is growing more uncertain due tovarious mounting geopolitical risks, coupled with concerns
about inflation and economic slowdowns. Meanwhile,
companies need to navigate cautiously as economic andsecurity interests grow more intertwined and the emergence of generative AI redraws the technological landscape. Companies are also being called on to ascertain the
directions technology will take and the industrial structurefrom a global perspective.
SHIBAURA MACHINE is committed to its Management
Reform Plan (a medium-term management planannounced in February 2020 and ending in fiscal 2024).
This plan aims to transform the Company into an organization that can overcome uncertainty in an age when longterm forecasting is difficult. The essence of the plan is todevelop the wherewithal to sense change, and then apply
our limited management resources flexibly to transform

Expecting the Seeds to Sprout

SHIBAURA MACHINE conducts management in an “ambidextrous” manner, meaning we consistently enhance theperformance and quality of existing products while exploring potential new products and also realizing innovation
through the combination of existing technologies andproducts.
Long-Term Vision 2030 embraces a business portfolio
strategy of concentrating management resources on

04

Integrated Report 2023

the organization and leverage our dynamic capabilities,
maximizing output. The reforms we have implemented todate have yielded visible results. One notable example isour removal of organizational barriers by transitioning froma system of business units to an in-house company system.
Our objective was to make human resources more fluid,
starting with the manufacturing divisions, thus enabling us
to respond to increasing product demand. Moving beyond
manufacturing, next we will extend this sort of flexibility to
the design and sales functions, making us a “truly fluid”
organization. Backcasting from there, we will build an organization capable of concentrating management resources
flexibly on design, manufacturing, and sales before productdemand even emerges. The New SHIBAURA MACHINE
Long-Term Vision 2030 (Long-Term Vision 2030) serves
as our roadmap.

high-value-added products while withdrawing from lowprofitability businesses. Continuing to enhance existing
businesses, we will also direct our efforts toward four
key themes: energy and the environment, increased laborproductivity, AI/IoT, and new materials. To focus these
themes, we have established the R&D Center, which consolidates the Company’s intellectual property. Of the four
themes, “energy and the environment” is particularlyimportant as it cuts across all our subsidiaries. Under thistheme, we are making steady inroads in the areas of energy
creation, storage, and saving. In AI/IoT, we are putting inplace the infrastructure for “SHIBAURA DX (digital transformation),” which can simulate 99.7% of all processes invirtual space through the use of digital twins. When overseeing and supervising operations, I pay special attention
to the balance between “enhancement” and “exploration.”In the upcoming medium-term management plan currently
being formulated by the executive team, I expect to see our“exploration” efforts bear fruit and be harvested. Given the
projected decrease in domestic demand, we will need tostep up our globalization efforts even further.
I urge the executive team to consistently reassess theirdecision-making process. Flexible decision-making isessential in a rapidly changing external environment. Thatsaid, by consistently documenting and verifying overall
processes—whether they were successful or not—we cancheck the validity of our decision-making and increase thelikelihood of success in future decisions.

SHIBAURA MACHINE’s Undaunted
Determination
Outside directors represent our shareholders, and theirviews are particularly important now that our shareholder
composition has seen a significant change. We appreciate
the sharp insights from our outside directors, who bringexpertise from diverse industries, offer suggestions related
to shareholders’ interests, and help us identify challenges
from different perspectives. I am grateful for their efforts tothoroughly understand our business and provide incisiveobservations from a shareholder perspective.
To maintain our value in society, our management
approach must adhere to the Japanese management concept of sanpo yoshi (business that is good for the buyer,
the seller, and society). For example, by offering productsthat help reduce environmental impact and preserve theEarth’s environment, at the same time enhancing customer
satisfaction and returning profits to our shareholders, we
aim to share benefits and value with all stakeholders.
Achieving such a balance requires good communication
because developing products such as extrusion machines
for lithium-ion battery separator films takes time (for us,
more than 20 years). To gain shareholders’ understandingof and support for our long-term initiatives, we need toprovide detailed explanations and strive to meet ourplanned objectives each quarter.

Yukio Iimura
Chairman

When we announced the Management Reform Plan in
2020, I said that under this plan I expected us to demonstrate our commitment and achieve results. I am convincedthat President Sakamoto, along with each of the Company’s
executives and employees, shares this determination andwill continue to support SHIBAURA MACHINE as we advanceunwaveringly in accordance with the social mission outlined in our since in our founding: “helping key industries
overcome challenges.”August 2023



Chairman

Integrated Report 2023

05

SHIBAURA MACHINE’s Story
Our History

SHIBAURA MACHINE
Always Benefiting Key Industries
19 3 019 4 019 5 0Changing Times and Business Evolution
1930s to 1940s
From military demand to postwar
reconstruction

Development of large machine tools andconcentration on the textile industry

A double column type planingmachineA textile machine

As a company aligned with national policy, we manufactured
numerous large machine tools. In the post-war period, the textile industry helped drive the recovery of Japan’s economy.
Catering to this industry, we focused on applying coretechnologies for machine tools to the manufacture of such textile machinery as raw nylon yarn manufacturing equipment
and spinning machines.

19 6 0197 01970s to 1980s
Oil shocks and globalization

1950s to 1960s
High economic growthConcentration on heavy industry and thedevelopment of molding machine operations

The HRS-500 master gear
hobbing machine

A 65mm single screw extrusion
machineDemand for large machine tools recovered due to the floweringof heavy industry. We supported the shipbuilding industry bycompleting the first domestically produced master gear hobbing
machine. Further, our efforts to meet customer needs throughthe use of technical competence established in the field ofmachine tools resulted in the development of a series of molding machines that now form the basis of our core businesses.

19 8 0

Active forays into overseas markets

Our U.S. subsidiary

Our subsidiary in Singapore

During an era of global economic turmoil caused by the oilshocks and other factors, the Company established a numberof local subsidiaries in major overseas markets. Thanks to rigorous marketing, sales and service capabilities, overseas sales
increased.

Response to a Changing Industry Structure

Munitions

Machine tools

1953

Machine tool production started

5-m master gear hobbing machine completed

1946

Moldings

Energy, shipbuilding, and steel

Textiles

1938

1956

Mold production started

Artificial silk production
machineExtrusion machines
Injection molding
machines

Die casting machines

Printingpresses06

Integrated Report 2023

1945

Sheet-fed offset printing
machine produced

1955

Primary fiber
processing machine

1952

First plastic extrusion
machine model completed

Gantry-type NC plano mirror MG-24/14A completedExpanded to radiator-grill
mold and automotive moldbusiness

1977

Electronic controls

1945

1970
1968

Plastic mold completed

High-precision
machine tools

Textile machinery

Automotive

TOSNUCtransferred from
Toshiba Corporation

RIM bumper mold

1982

High-precision flat
polygon mirror generator
UFG-200P completed

1980

Programmable logic
controller (PLC) PMC-5
completed

1960

Secondary fiber processing
machine1979

Magnetic tapeproduction machine(coater) completed

1956
1953

1987

1981

First injection molding
machine (preplasticating
method) completed

Japan’s first hydraulic die castingmachine completed

Extra-large injection molding
machine IS5000DN completed

1982

1963

HydraulicTechnology partnership forhydraulic equipment
equipment
Semiconductor
manufacturing equipment

1972

Food machinery

Magnesium hot chamber die
casting machine DHM-300
completed

1966

1987

1977

Electron beam drawing
machine EBM-100/105H
developed

1983

Offset rotarypress completed

Draft beer automatic fixed
quantity dispensing machinecompleted

U-series hydraulic control
valve completed

1981

World’s fastest print
speed offset rotary press
OA-4B2T-800D completed

Coffee MasterSDM-10A completed

Working in close partnership with customers, SHIBAURA MACHINE has provided solutions that the Company is
uniquely qualified to realize. Through the provision of machines for the manufacture of products that support
society’s infrastructure, we have helped develop society and enrich day-to-day life.

19 9 0

20 0 02 010

1990s to 2000s
Collapse of Japan’s asset-inflated bubble economy, global economic downturn triggeredby the bankruptcy of the Lehman Brothers, and the beginning of a low-growth era

2010s to present
Digitalization, toward the realizationof a sustainable society

From processing to molding and the creationof new businesses

An electric injection
molding machine

A micro-pattern
imprinting machine

Our plant in China

2020–FUTURE

Strengthening of the global supply chain andconversion to businesses that combine products and services

Our plant in India

In response to an economic recession, we advanced selection and concentration, divesting ourfood machinery and offsetting rotary press businesses. Meanwhile, the Company strengthened its
molding machine business and established a production base in China. We also created a new
business by combining ultra-precision machine tool technologies and molding technologies.

Our plant in Thailand

We strengthened our global supply chain through the establishment of plants in India andThailand. By capitalizing on our technological prowess and digital transformation, we will convert
to businesses focused on providing high-value-added combinations of products and services thatsolve the issues of key industries and help to realize a sustainable society.

IT and electronics

High-precision optical glass 1993
High-precision optical glass
mold press machine andmold press machine GMP-211
micropattern imprinting
developed
machine2005

Micro-pattern imprinting
machine ST50 completed

2015

2003

High-precision asphericgenerator ULC-100F(S)completed 0.1 nm control

Linear motor
drive completed

Injection molding machine controller
INJECTVISOR-V21 completed

1996

SCARA robot business transferredfrom Toshiba Corporation

2001

Electric injection molding
machine EC series developed

2000

Hybrid swing systemdevelopment started

1990

Sectional drive system rotogravure printing press GSN series
developed

Beer server controller
HBS completed

1999

2016

Vertical boring andturning mill TMD-C
series completed
Addition of sliding
surface specifications

2019

2014

2022

Double column
type machining
center MPC-H
completed

Optical glass molding press machine
Die molding transfer system (large
aperture) GMP-207-9S completed

2016

High-precision 5-axis machining center
UVM-700E(5AD) completed

2018

Injection molding machine controller
INJECTVISOR-V70 completed

2022

SCARA robot
THE 1000
completed2018

Ultra-high-torquetwin-screw extruder
TEM-37SX completed

2018

All-electric injection molding All-electric injection
machine EC280SXII molding machine EC-SXIII
EC550SXII completed
series completed

Die casting machine DC350R-M/H/
EM/EH completed

2007

2020

Compact cartesian
coordinate robot BA-C
compact arm completed

High-cost-performancetwin-screw extruder
TEM-58SSG completed

1998

Hybrid die castingmachine DEC150MT
developed

2011

2014

High-precision
coating unit (CR)developed

1998

Automobiles and aircraft

Double column type
machining center
MPJ-2640M
completed2001

Industrial robots

Optics and nanotechnology

2014

1994

High-speed double column type die-sinking
machine MPF-2140B completed

Utilization of digitaltransformation

2015

Transfer of stocks

2020

Electric clamping die castingmachine DC1300R-E completed

2020

Transfer of stocks

2001

Offset rotary press transfer
to businessTransfer to business

Integrated Report 2023

07

SHIBAURA MACHINE’s Story

Strengths Honed Over More Than 80 Years

We have accumulated uniquestrengths through a consistentcorporate stance dating back to
the philosophy of our founder.
By combining and establishing reciprocal relationships among strengths honed overmany years, SHIBAURA MACHINE has provided value that only it can realize. We willcontinue enhancing these capabilities to unleash even greater potential.

Technological
Capabilities

Strengths
Customer
Relationships

08

Integrated Report 2023

Solution
Capabilities

Strengths

Strengths

Strengths

Technological Capabilities

SHIBAURA MACHINE has always placed the utmost importance on its technological capabilities
and the engineers who underpin them. Also, by building the equipment needed—even if theequipment is the first of its kind—and delivering a wide variety of customized products, wehave gained technological capabilities in many different fields. This innovation-focused
P.10–11
process has led to the formation of eight technological platforms.
Based onthese platforms, we are developing and manufacturing advanced machines across a broad
range of industries. In evolving a business model that combines products and services, ourtechnological capabilities will be a major asset.

Solution Capabilities

The Company has been able to resolve a variety of issues by providing solutions it is uniquely
qualified to realize, alongside leveraging strong relationships with customers. As companies
continue transforming their business models to address social issues, technological needs are
expected to increase. We will realize solutions by detecting social trends more quickly,
identifying new issues, and finding countermeasures, and also by leveraging the expertise andtechnological capabilities that our businesses have garnered. Taking advantage of our strength
as a solutions provider, we will work with customers to help address social issues, thereby
remaining an entity with an important role to play in the creation of a new society.

Customer Relationships

Although rarely used directly by consumers, the machines that we produce are used to solve
our customers’ issues, which in turn helps to address social issues. We have developed longterm relationships of trust with customers during the process of providing large customized
machines with relatively long life cycles and in collaborating closely with customers to realize
products suited to particular needs. Going forward, the long-term relationships of trust we
have built with customers through intensive collaboration will give us an advantage as wetransform our business model.

Integrated Report 2023

09

SHIBAURA MACHINE’s Story

Eight Technological Platforms

Eight Technological Platforms

Developing and Manufacturing an Array of Advanced Industrial
Equipment

1

Realizing one-stepadvanced accuracy

Professional
manufacturing,assembly, andmeasuring
technologies

2

Supporting
diversified
application fields

Designingtechnologies
for processing
and molding
machinery

3

Application
ExampleAround the world, key industries engaged in the manufacture of aircraft, ships,
railcars, automobiles, and generators use components that range in size fromseveral meters to several tens of meters. To manufacture these components,
machines as large or larger than the components are required. SHIBAURA
MACHINE has developed the knowledge to design ultra-large, high-precision
machine tools as well as the craftsmanship to realize these designs through the
manufacture and measuring of large-scale components and the high-precisionassembly and measurement of machines.

Application
ExampleCustomizing
technology

4

Material
technology

Illustration

Transverse

Longitudinal

Diagonal

Use of an extrusion machine (film production equipment) to stretch film toa high degree of precision in the longitudinal, transverse, and diagonal directions

Additive Manufacturing Equipment

Realization of New Manufacturing and Integration with All Kinds of Product Technologies

Mass-produced components are generally manufactured by molding processes that use metal molds, suchas plastic molding and die casting. While these manufacturing methods offer excellent productivity for mass
production applications, they are not suitable for small-lot production of a large variety of products or for prototyping, due to the time and cost required to fabricate molds. Additive manufacturing equipment is attracting attention as a new
manufacturing method that solves this problem.This equipment forms three-dimensional objects by layering materials insequence and then using chemical reactions such as melting and sintering. Our product lineup includes large metal additive
manufacturing machines, which we have created by combining technologies for manufacturing large high-precision machines,
laser and thermal technologies, and our expertise in materials. Based on our metal additive manufacturing equipment, we areoffering new manufacturing methods that realize mass customization—which cannot be achieved with traditional manufacturing methods—and that can also form complex three-dimensional structures to create new functionality.

Application
ExampleMaximizing machine
performanceFilm Stretching

High-Performance Film That Can Be Stretched Freely and with High Precision in Longitudinal,
Transverse, and Diagonal Directions

Special films are used in optical and battery applications, such as for digital
devices. These films require precise stretching and shrinking in the vertical, horizontal, and diagonal directions to achieve high performance. By combining
SHIBAURA MACHINE’s film conveying technology and high-precision control technology, we have succeeded in the continuous production of specialized films,
stretching and shrinking them in the desired directions with precise control.
Reference:Special Feature P.30–33

Application
ExampleIntegrative

Large-Scale Processing Technologies

Technologies for the Manufacture of Large-Scale, High-Precision Machines

Joining Technology

Joining Different Materials through a Knowledge of Materials and Machine Tool Control Technology

Technology for joining dissimilar materials can help create metals etc. with different functions. These can be used when and where appropriate to achieve higher
levels of functionality and produce high added value.
Different materials are joined by producing frictional heat, which softens
adjacent surfaces and allows them to mix. The rigidity and robustness of
SHIBAURA MACHINE’s machine tools and the Company’s control technology
ensure stable joins.

Tools
JointsLoad

Direction of travel
Rotation

Non-joining property

10Integrated Report 2023

Eight Technological Platforms

1
5

Realizing one-stepadvanced accuracy

Professional manufacturing, assembly, and measuring technologies
Optimized for eachmachine group

Control, mechatronics,
and IoT technology

5

Optimized for eachmachine group

Control,mechatronics,
and IoT
technology

6

Supporting
high-precision

Slide androtation7

Based onunderstanding oftarget material

Moldingtechnology
originated frommolding2
6Application
ExampleSupporting diversified
application fields

Designing technologies
for processing andmolding machinery
Supporting high-precision

Slide and rotation

3
7

Integrative

Customizing technology
Based on understanding oftarget material

Molding technology
originated from molding

4
8

Maximizing machine
performance

Material technology
Using heat, light, and vacuum

Nano-processing
technology

Collaborative Robots

Control Technologies That Coexist and Coordinate with People

In developed countries, working-age populations are declining due to aging populations. Consequently, demand is increasing for robots that enable the automation of
production and allow people to engage in more creative activities. Meanwhile,industries are increasing mass customization and the manufacture of large varietiesof products. As a result, there are still numerous tasks that require human skills.
SHIBAURA MACHINE’s offerings include collaborative robots, which coexist
and coordinate with people. Given the intelligence to understand people and theirsurroundings, these robots control force and movement speed so as not to harm
people. For this reason, our robots can work in the same environments as people,
alongside people, and in partnership with people.

Application
ExampleHigh-Precision Positioning

Nanometer-Level Ultra-High-Precision Control

High-precision lenses of many different shapes are used in increasingly sophisticatedand high-resolution smartphone cameras as well as in the sensors and headlightsthat are helping make automobiles safer and more intelligent. The manufacture ofthese high-precision lenses requires high-precision machine tools. We provide ultraprecision processing machines that boast world-leading levels of precision .
Incorporating control and manufacturing technologies for moving objects on a nanometer level, these machines are capable of controlling objects and moving them 0.1
nanometer (one-10 billionth of a meter). This is so precise that, for example, movement by a single atom is possible.

Application
ExampleThe precision to control objects andmove them 0.1 nanometer

Precision so advanced that movementby the space of one atom is possible

Injection Molding Technology

Quality Improvement and Use of Ultra-Fine Air Bubbles to make Resin Molded Products Lighter

Automobiles are essential to modern society. Using strong and lightweight plastic
molded materials can make automobiles more lightweight and help us realize a decarbonized society. SHIBAURA MACHINE’s injection molding machines use foam molding
technology that injects micro bubbles into the plastic. This reduces the weight of plastic items and increases strength, simultaneously boosting quality and performance.
Measuring just 100 micrometers (0.1mm) in diameter, these bubbles are packed tightly
into molded resin products, reducing the weight of automotive parts by 30% or more.
Reference:Special Feature P.34

Cross section of a conventionallymolded resin

Cross section of a foam-molded resin

8

Using heat, light,

and vacuum

Nano-processing
technology

Application
ExampleRoll-to-Roll Transfer Technology

High-Precision Patterned Film with Film Transport and Liquid Control

Televisions, smartphones, and other items have grown thinner and lighter as we havelearned how to replace components that were previously made of thick plastic or glass
panels with components made out of film and achieve the same level of functionality.
Similarly, we believe that incorporating functions into films can enhance the functionality and performance of LCD and solar panels. SHIBAURA MACHINE’s high precision
processing and control technologies allow films to be transported precisely and liquid
applied to films. Our transfer technologies also enable the application of functional
patterns at the nanometer level, resulting in new types of functionality.

Fine functional patterns at thenanometer level

Integrated Report 2023

11

SHIBAURA MACHINE’s Story
Value Creation Process

Continuing to Contribute to Key Industries

I N P U T
Helping Key Industries Develop through

SHIBAURA MACHINE’s Cycle for Increasing Value
Human
Capital02

Combinations of products andservices that leveragetechnological capabilities

Intellectual
CapitalManufactured
Capital01

Issue detection

Integrated Report 2023

Solution
Capabilities

03

Resolution ofcustomer issues

04

Deeper relationships withcustomers and know-how
accumulation

NaturalCapital12Strengths
Customer
Relationships

Social and
Relationship
CapitalFinancial
CapitalTechnological
Capabilities

01 Issue detection

03 Resolution of customer issues

02 Combinations of products and services

04 Deeper relationships with customers

Detecting potential issues ahead of time anddesigning solutions

that leverage technological capabilities

Adding intangible value to products through selfimprovement and utilization of internal and external
resources

Solving issues by providing value that not only meets
but exceeds customer expectations

and know-how accumulation

Improving satisfaction of customers to deepen
relationships with them and accumulate know-howthat leads to the creation of new valueIn accordance with its Corporate Principles, SHIBAURA MACHINE will partner with customers worldwide and solve
their issues by utilizing technological capabilities to create combinations of products and services. Furthermore,
we will work with customers to address the issues faced by global society.

By deepening our relationships with customers through the provision of high-value-added solutions, we will continue driving a powerful virtuous cycle that sustains corporate value growth.

O U T P U T

OUTCOME

Our products

Injection molding machines, Die casting machines,
Extrusion machines, Machine tools, High-precision machine
tools, Industrial robots, Control systems

O U T C O M E

Resolving issues faced by key industries

Addressing social
issuesContributing to the SDGs

Examples of industries to which we contribute

Automotive, Rechargeable battery, Renewable energy,
Smartphone, Food packaging materials,
High-speed rail, Aircraft
1 Realizing GHG*-reduced products,

3 Improving efficiency of and

2 Realizing resource-saving and4 Improving performance of and

1 Realizing robots that can

3 Upgrading and spreading water

2 Realizing autonomous

4 Upgrading and spreading

1 Realizing new materials that

3 Upgrading and evolving

2 Spreading next-generation

4 Upgrading and spreading

technologies, and materials
energy-saving technologies

symbiotically coexist with humans

production lines

provide novel functions

communications (5G / 6G)* greenhouse gas

spreading energy creation

spreading energy storage devices

purification technologies

sterilization technologies

weight-saving technologies
intelligent devices

Climate change andresource scarcity

Rapid urbanization andchanges in population
structures

Advancements intechnology

Integrated Report 2023

13

SHIBAURA MACHINE’s Story

SHIBAURA MACHINE Products —Supporting Manufacturing

SHIBAURA MACHINE Products —Supporting Manufacturing

By capitalizing on its eight technological platforms, SHIBAURA MACHINE delivers differentiated value that meets
customers’ demanding standards in an extensive range of industries.
For details, please visit our website.
Shibaura Machine near You
Product Information

1
4
1

Automotive Industry Engine

11

4

5

1

2

2
7

2

9

6

7

4
1

3

8

1 Separator film for battery
2 Fuel cell material forelectric vehicles

4 Water pump bracket

1 Turbo impeller

5 Oil pump bracket

2 Crank shaft

6 Front case

3 Clutch housing

7 Rack housing

4 Engine block mold

8 Transmission case
9 Oil pan

2
1

1

1

2

11

1

3

14

3

14

6

3
6

13

7

15

1

2

1

5

2

14 14 Headlight reflector

3 Interior decoration material

15 15 Clearance lamp

7 Bumperheat-resistance resins

13 13 Headlight lens

2 Tireelastomer sheet

4 Forming sheet

1 Side mirror housing
2 Brake caliper

8 Door trim
9 Pillar

10 Rear garnish

1 Door trim mold3 Headlight case

2 Frame mold4 Steering body

3 Bumper mold

5 Seat frame

4 Wheel6 Wheel5 Constant velocity universal

7 Sub frame

1 Switch

Interior

2 Dashboard

3 Console box

1 Steering wheal

41 Lamp covers and other5 Rocker molding
6 Over fender2

11 11 Lamp cover

12 12 LED diffusion lens

4 Rear fender

5

4

1

6

2 Sunroof

3 Door glass

4

8

5

Body

1 Cowl louver

1 Oil separator

11 Battery case

3 Valve body

15

2

3

10 Engine block2 Head cover

1212

1 Engine head cover
2 Intake manifold

11
13

1

2

10

9

3

https://www.shibaura-machine.co.jp/en/product/index.html

1

10

2

https://www.shibaura-machine.co.jp/en/technology/familiar/

joint

6 Copper plate

1 LCD, OLED display materials
2 Printed board

1 Instrument panel mold

1 Car navigation system
2 Head-up display

3

Injection Molding Machines

Die Casting Machines

Extrusion Machines

These machines mold plastic by injecting heatedmolten plastic into metal molds, which is thencooled and hardened.

These machines cast products by applying highpressure to molten aluminum and magnesium
and injecting it into molds.

These machines form plastic by extruding heatedmolten plastic through extrusion ports and thencooling it by the use of air or water. Depending on
the shape of the extrusion ports, the plastic isformed into sheets or hose shapes.

14

Integrated Report 2023

Smartphone Industry Camera module lens

Mold for plastic
housingCapacitor film /Oriented polypropylene film

Mold for magnesium
housing

Plastic film for LCD panel
Retardation film,
Polarizing film

Production line of automatic screw tightening
systemLED light sourceSeparator film forlithium-ion batteries

Mold for LCD light guide plateRoll mold for optical sheet andoptical film

Energy Industries 

Separator film for lithium-ion secondary batteries
Backsheet and sealing material for solar cells

Food-Related Industries Heat-resistant tableware made of plant-based resin

Tableware fortoddlers

 or tube plate of the heat exchanger, boilerF
For rotation part of the wind millPlastic sheet for food packaging

Highly functional containers for long-term foodpreservation and other purposes

Machine Tools

High-Precision Machine Tools

Electronic Controls

These machines mainly cut and grind metal workpieces into the required shapes. They are also
called mother machines because they are indispensable in the manufacture of machines.

As types of machine tools, our high-precision
machine tools are suitable for cutting and grinding optical and medical components that call for
ultra-high-precision nanometer-level processing.

Our industrial robots include horizontal multiarticulated (SCARA), cartesian coordinate, painting, and vertical multi-articulated robots.
SHIBAURA MACHINE’s electronic controls are used
in a diverse range of equipment and include servo
systems, FA controllers, and linear motors.
Integrated Report 2023

15

Management Message

Message from the President

Shigetomo Sakamoto
President
Chief Executive Officer
Chief Operating Officer

Message fron the President“Management Reform Plan” Pursuing Fundamental Principles 

After joining the Company as an engineer, I gained experience in various roles—in overseas assignments as well as
stints in the planning department, sales department, andfactory manager. A consistent approach sustained me
throughout these experiences; I have maintained the mindset of an engineer who designs blueprints based on fundamental principles and proceeds with tasks in a calm andmethodical manner, all aimed at achieving the desired
output.
SHIBAURA MACHINE is characterized by having many
diligent employees who carry out their assigned tasks
assiduously. As a machinery manufacturer, I believe weshould cherish this important corporate culture. However,in addition to an individualistic work approach, I have no
doubt that our culture has retained some inward-looking
and conservative aspects. As a result, our efficiency is lower
than our peers’. As such, we positioned our March 2017
departure from the Toshiba Group as a turning point. In
February 2020, we launched the Management Reform Plan,a medium-term management plan ending in March 2024
that aims to respond naturally to the broad-ranging
demands of general shareholders. Recognizing the needto significantly change some practices that have become
ingrained after 80 years, I and the rest of the management
team have consciously set aside our personal interests andfocused on resolving organizational inefficiencies in accordance with fundamental principles.
16

Integrated Report 2023

One pillar of these reforms was our transition from asystem of business divisions to an in-house company
system. Under the former system, responsibilities for revenues were blurry and the organization siloed and rigid, so wereorganized our seven business divisions into three in-housecompanies. These companies are responsible for their own
profitability and, in addition to financial performance, they
determine their own investments, cash flows, and personnel. To improve asset efficiency, the companies have integrated formerly dispersed production sites alongsidestreamlining overlapping procurement and R&D functions.
Our global approach focuses on offering high-value-added
products in Japan, while in highly cost-competitive markets, such as China and India, we produce low-mix, highvolume standardized products and maintain high local
procurement ratios for parts and materials. This approachof locating production in the most suitable regions helps
insulate us from the impact of foreign exchange fluctuations and boosts production efficiency. In addition, we utilized part of the Sagami Plant site to jointly commercialize
a logistics facility through a business alliance with Mitsui
Fudosan Co., Ltd. We also built a management accounting
system to make business management more visual byhelping us to accurately understand the effects of investments. We introduced a sales management system to sharesales information beyond in-house companies. These multifaceted efforts to improve efficiency produced tangible
results in fiscal 2022.

We will push forward with a strong determination
to solve any remaining challenges and drive
bolder transformations than ever before toachieve significant leaps in the future.

Steady Progress on Transformation in Fiscal 2022 

As in fiscal 2021, sales and profits both rose year on year
in fiscal 2022. Although we experienced difficulties in sourcing parts and materials, and procurement costs rose, we
benefited from yen depreciation. I think our performance
was due in large part to our own efforts based on theManagement Reform Plan. Many of our products have longproduction lead times, so there is always a risk that higher
procurement costs after orders are received will put pressure on profit margins. For this reason, our Production
Center, which is responsible for optimizing procurement
Company-wide, works to promptly communicate information about cost fluctuations to the sales team and reflect
this in selling prices. This system has been functioning effectively since fiscal 2021. In June 2022, a new assembly line
for high-precision machine tools started up at the Gotemba
Plant. We also made steady progress on streamlining thenumber of control systems, as maintenance costs had been
weighing down profitability.

Our transition to an in-house company system proved
extremely effective at increasing the manufacture of extrusion machines that produce separator films for lithium-ion
batteries (lithium-ion battery separator film productionlines). To meet the growing demand, we have increased
production from two lines per month to four. The Molding
Machine Company has also reallocated personnel to production lines, greatly improving its profitability. In addition,
under the head office’s authorization, some personnel havetransferred between in-house companies. This humanresource mobility is a major reason we have been able tomeet growing demand without increasing the number of
employees.
We intend to leverage the results of these reforms as afoothold to achieve further growth beyond fiscal 2023.

Lithium-ion Battery Separator Film Production Lines as a Driving Force 

In fiscal 2023, we expect to surpass the quantitative targets
set in the Management Reform Plan. The main basis for thisoutlook is our backlog of orders for extrusion machines,
which was more than ¥150.0 billion as of the end of March
2023. The backlog was particularly high for extrusion
machines related to lithium-ion battery separator film production lines. From fiscal 2023, we will see the full-fledged
effects of recognizing revenue from sales of lithium-ion battery separator film production lines.
Demand for automotive batteries is expanding due topolicies aimed at electric vehicles (EVs) becoming themainstream in new car sales, primarily in Europe, theUnited States, and China. Dividing the period between now
and 2030 into three stages, we have already addressed
demand in the first stage, which focuses on quantitative

expansion. We are now transitioning to demand in thesecond stage, which we believe will focus on higher added
value. Battery separator film production lines require complex coordination between various devices with different
functions and high precision in the film itself, so the barriers to entry are high. At this stage, competition mainly
exists among three companies, us included. We differentiate ourselves by being the only company that can provide
a full line of manufacturing equipment, from extruders towinders, all designed in-house. We aim to stand out in themarketplace by offering turnkey solutions that enable theearly launch of manufacturing lines capable of producing
the quality our customers demand. Looking ahead, we
believe the third stage of demand for automotive batteries
will be characterized by the gradual proliferation ofIntegrated Report 2023

17

Management Message

Message from the President

solid-state batteries. Although it is difficult to predict theexact timing, we anticipate that lithium-ion batteries willremain dominant until at least 2030.
Currently, strict “rules of origin” in North America requirea significant portion of automotive parts to be sourced
within the region. As a result, Japanese and South Korean
automakers are actively establishing or expanding EV
assembly lines in the United States. We plan to explore

Steppingstones into India 

As a manufacturer of industrial machinery, we have playeda leading role in providing the foundations for manufacturing, even overseas, as industrial infrastructures undergo
significant changes. In keeping with this spirit, in 2012 weacquired an injection molding machine manufacturer inIndia and started local production. India is currently experiencing remarkable economic growth, and the country’s
population is expected to surpass that of China by 2023*.
India is entering a stage of rising disposable incomes.
Accordingly, we expect expansion in the markets for household appliances, building materials, containers, and automobiles, which will in turn attract the attention of global
manufacturers, including Japanese automakers. Our policy
is to strengthen our business foundation by steadilyenhancing our capacity to produce injection molding
machines, leveraging our accumulated local management
expertise.

market opportunities and mitigate geopolitical risks byexpanding lithium-ion battery separator film productionlines in the United States, as well as in Europe and India.
While lithium-ion battery separator film production lines
serve as a growth driver on the product front, on a regional
level we see the Indian market as a key driver of mediumto long-term growth.

In the second half of fiscal 2023, we have begun operations at a new plant in India capable of manufacturing
small, medium-sized, and large hydraulic injection molding
machines. The new factory will raise our annual production
capacity from 1,200 units to 3,200, and we will prepare forfurther growth by expanding capacity to 4,000 units. We arealso considering the possibility of starting to produce small
electric injection molding machines, as we anticipate risingdemand for electric injection molding machines, which
offer higher molding quality and lower power consumption
than hydraulic injection molding machines. We envision
leveraging this factory, which will have the highest production capacity for our injection molding machines, as a hub
to expand sales of competitively priced, high-value-added
injection molding machines from India to markets in the
Middle East, Africa, and Europe.

* “World Population Prospects 2022,” United Nations

Reconfiguring Our Portfolio with a View to 2030 

The Management Reform Plan is progressing as expected,
but many challenges remain. Because we engage in B2B
business, we need to continue providing what our customers demand in a way that meets their needs. However, amanufacturer-driven approach persists; our efforts to transition to a business flow based on input from the sales
force are a work in progress. This change is an example of
how we are transforming our corporate culture, which weare committed to achieving over time. When considering
our business portfolio, we also need to provide whatcustomers need at the right time, so we must allocate
management resources more strategically to growing
businesses. In fiscal 2023, we will implement profitability

improvement measures for each business, focusing on
highly profitable projects for large-scale machine tools,
where profitability is typically low. We will also shift humanresources more boldly into high-growth businesses like
extrusion machines, while simultaneously reducing fixed
costs in stagnant businesses and expanding our growthbusinesses. Through these measures, we will enhance theoverall efficiency of our business portfolio.
Under our next medium-term management plan, whichstarts in fiscal 2024, we will aim to surpass the record
profits the Company achieved in fiscal 2006, propelling it
toward a new stage of growth. To realize this goal, we
will explore bolder portfolio restructuring options.

Poised to Capture the Megatrends The decarbonization of society is a megatrend we can help
to achieve through our unique technologies as we work torealize the New SHIBAURA MACHINE Long-Term Vision
2030. Putting the environment at the core of our business
18

Integrated Report 2023

domains, we will offer various high-value-added products
to support customers who are working toward a decarbonized society, while simultaneously improving our
profitability.

Among renewable energy sources, the global adoptionof offshore wind power is expected to be particularly pronounced. In this field, machine tools that facilitate thehighly precise machining of large parts, such as swivel
shafts, can help improve power generation efficiency.
Meanwhile, battery technology is growing more importantin areas beyond EVs, such as for the energy management
side of renewable energy. We expect demand for battery
separator film production lines will continue to expand
accordingly. In keeping with the automotive industry trend
toward connected, autonomous, shared, and electric(CASE) vehicles, our molding machines can contribute to
the transition from steel to aluminum, resin, carbon fiber,and other materials that reduce weight, extending cruising
ranges. In this way, we hope to contribute to a decarbonized society throughout our entire supply chain.
It is difficult to predict what alternative fuel, such as
electricity or hydrogen, will become the mainstream technology in the future, but we can focus our comprehensive
capabilities flexibly in either direction. Our lithium-ion

battery separator film production lines meet needs related
to EVs, while our die-casting machines are useful for newenergy vehicles (NEVs) that require engines. In countries
such as Japan and China, where falling birthrates are causing the working-age population to shrink, we plan to provide robots that can help automate assembly processes
and other tasks.
The New SHIBAURA MACHINE Long-Term Vision 2030
calls for us to anticipate (sense) the challenges customers
face and incorporate software that will help us optimize
production management and maintenance—adding value
to our products through the provision of services. We are
striving to transform our business model from sellingstandalone products to one that combines products andservices. Under SHIBAURA DX, we will generate such value
by leveraging digital technology. The R&D Center is steadily
working to develop the necessary framework, and we
expect to demonstrate specific directions and achievements under our next medium-term management plan.

Maintaining a Sense of Urgency 

We have prioritized the reform of our revenue structure
and avoided making merely superficial adjustments in
response to disclosure requests related to environmental,social, and governance (ESG) factors and the Sustainable
Development Goals (SDGs). However, having made some
progress on revamping the revenue structure, now we
intend to clearly incorporate ESG into our management
and focus on transparent disclosure, beginning with thenext medium-term management plan. In June 2023, we
expressed our support for the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD),
and we are preparing to disclose information in line with
the TCFD’s recommended framework.
SHIBAURA MACHINE has benefited from its steadyreform efforts, as well as from market tailwinds. We recognize, however, that lithium-ion battery separator film production lines may become less important in the long term.

Therefore, we need to retain a sense of urgency, remaincommitted to transforming our profit structure and culture
based on fundamental principles, and sow seeds for the
future.
I would like to ask our shareholders, investors, and otherstakeholders for their continued support and guidance.
August 2023

President

Chief Executive Officer

Chief Operating Officer

Integrated Report 2023

19

Management Strategy

Medium-Term Management Plan “Management Reform Plan”

Medium-Term Management Plan
“Management Reform Plan”

The SHIBAURA MACHINE Group’s business environment is becoming increasingly uncertain due to the effects fromthe COVID-19 pandemic, trade friction between the United States and China, and ongoing geopolitical risks. To adapt
to this business environment and transform into a new corporate group that prevails in the coming era, we will continue implementing the Management Reform Plan, a medium-term management plan announced on February 4,

2020, and concluding in fiscal 2023. Under the plan, we aim to transform into a highly profitable company. We willconduct management reforms centered on reorganization, invest in growth areas, and implement financial strategies to improve capital efficiency (ROE).

Framework of the “Management Reform Plan”
Management reform centered on reorganization

Specificmeasures(i)	Transition from a business unit system, stemming from which numerous inefficiencies arose, to an in-housecompany system and thereby realize overall optimization(ii)	Establish an R&D Center and Production Center for integrated Companywide enhancement of production
efficiency, quality, cost, and delivery(iii)	Reassign personnel and launch a voluntary retirement program to optimize resource allocation and reduce
fixed costs

Promotion of growth investments aimed at expansion of purposes to fields
expected to grow in the future(iv) Promote growth investments aimed at expanding applications in fields expected to grow in the future

Investment
plan / Financial
strategies

Implementation of financial strategies aimed at improving of return on equity (ROE)(v)	Allocate cash on hand to investments toward transforming into a highly profitable company andenhance profitability and capital efficiency

Progress toward the Quantitative Targets in the Management Reform Plan

In fiscal 2023, we plan to exceed our quantitative targets under the Management Reform Plan for sales and operating profit,
and we will continue to implement various measures to this end.

Performance Forecast
for Fiscal 2023

Quantitative Targets
for Fiscal 2023 under theManagement Reform Plan
20

Integrated Report 2023

Sales

¥180.0 billion

Operating profit¥15.0 billion

Operating profit ratio

8.3%

Achieve an Exceed
expectations

Sales¥135.0 billion

Operating profit¥10.8 billion

Operating profit ratio

8.0%

Increase in Sales of Lithium-ion Battery Separator Film Production Lines

The demand for lithium-ion batteries, which power electric vehicles (EVs), is growing dramatically as the introduction ofelectric vehicles progresses amid a worldwide trend toward decarbonization. SHIBAURA MACHINE lithium-ion battery separator film production lines, which manufacture separator film, a component of these batteries, is seeing a significant rise inorders. We expect lithium-ion battery separator film production lines to boost sales substantially in 2023, leading to sales of¥180.0 billion (up 46% from fiscal 2022), operating profit of ¥15.0 billion (up 160%), and an operating profit ratio of 8.3%.
We are stepping up our plans to cater to expected ongoing growth demand for lithium-ion battery separator film production lines. By fiscal 2024, we are targeting monthly production capacity of six lines, up from the current four.

Target: Production of 6 lines / month
Currently

By fiscal 2024

Production of 4 lines /month*

Production of 6 lines /month** Full line

Lithium-ion battery separator
film production line
(total length exceeds 100m)

Operating Performance

Operating profit
ratio: 8.3%

(Billions of yen)

1.4

200.0

150.0

3.6
100.0

50.0

116.7
9.1

2.0

29.6

77.2

3.5

7.3
20.8

64.3

0

–50.0

FY2019(Results)

1.3

92.6

FY2020(Results)

0.3

1.5

107.7
9.2
23.6

4.2

75.5

123.1

180.0
12.3

15.0

26.6

12.0

10.4
27.3
85.9

5.7

16.0

8.0

141.5

4.0

0

FY2021(Results)

Net sales (left axis): Net sales of metal & plastics industrial machines
Net sales of machine tools
Operating profit (right axis)
Note: The net sales of respective segments include intersegment transactions.

FY2022(Results)
Net sales of control systems–4.0

FY2023(Forecast)
Net sales of others

Elimination

Integrated Report 2023

21

Management Strategy

Medium-Term Management Plan “Management Reform Plan”

Progress on Management Reform Plan Initiatives

We are engaging in organizational reforms to transform ourselves into a highly profitable company. This reorganization was
accompanied by the realignment of domestic and overseas production bases and the introduction of voluntary retirement.
Also, we introduced a human resource system that enables diversified employee compensation and career development,
as well as the utilization of diverse expert personnel. Moreover, we made management reform and business management
more visible. To increase production of injection molding machines, we are establishing a new plant in India, which is slated
to commence operation in the second half of fiscal 2023.

First halfBusiness
restructuring

FY2020
Second halfFirst half

FY2021
Second halfFirst half

FY2022
Second half

Reorganization (establishment of an in-house company system, the R&D Center, and the Production Center) two headquarters structure,Ain Tokyo and Numazu

Businessmanagement

 losing an overseas affiliate
C(UK sales and service
company)First half

FY2023
Second halfAbsorption-type merger of a domestic affiliate(FUJISEIKI CO., LTD.)

Construction and operation of a management accountability system (make business management more visible)

Technology(DX)

Operation of a new 3D-CAD systemI ntroduction ofvoluntary early
retirement

Personnelrelated
Management
reformIntroduction of a new HR system (for managers)
Introduction of a new HR system (for union members)
Sales activity management system

Overseas transfer of the production of small injection molding machines (from Japan to China and Thailand)
Integration of manufacturing divisions of injection molding machines and die casting machines (from Numazu to Sagami)

Plant
reorganization

Overseas transfer of the production of SCARA robots (from Japan to China)

Prepare / design / build○ Operation of new Indian Plant○ Start of logistics facility business

Expansion of Indian Plant

To meet the higher demand expected from India’s rapidly growing market, we will
establish a new plant within our site with the aim of increasing production capacity formedium- to large-sized hydraulic injection molding machines and small hydraulic injection molding machines. Also, we will consider the production of electric injection molding machines to capture demand for conversion from hydraulic machines to electricmachines, which is rising due to a growing need to decarbonize. (The plant is slated
to commence operations in the second half of fiscal 2023.)
Increase of medium- to large-sized machines(In particular, for the automobile industry)

Growth in the markets of automobiles, white goods, building
materials, and containers is expected due to population
increase.
J apan’s automakers are expected to enter India’s market.

Increased production of medium- to large-sized hydraulicinjection molding machines

22

Projected path in India (expansion)

Demand to switch from hydraulic machines toelectric machines

Led by the medical / container industry andJapanese automobile manufacturers
Rate of electrification
FY2021 11.5% ⇒ After 10 years 20pts.UP (31.5%) forecast

Start production of small electric injection molding machines

Current production capacity of 1,200 units per year ⇒ Aim to increase to 3,200 units per year.
(Maximum annual production capacity of 4,000 units)
Integrated Report 2023

Looking Ahead to the Next Medium-Term Management Plan
Contribute to and Expand Business in Areas Affected by Megatrends

To further expand our business, we will respond to megatrends (climate change and resource scarcity, demographic
shifts, and technological advancements) through technological innovation. In the renewable energy sector, as society
works to decarbonize, we will focus on expanding our offshore wind power business. In the EV sector, we will strive toenhance our business involving secondary batteries. As Japan’s falling birthrate causes the working-age population toshrink, we will actively pursue business expansion in automation and labor-saving technologies, including robotics.
Additionally, as global investment shifts from China, we will also prioritize India’s growing market.
ESG management
Enviroment

Decarbonized society

Falling childbirth

RenewableenergyOffshorewind power

EVs

Secondarybatteries

Working-age
population decline

Automation,
labor savings

Energy price hikes

Rising prices

Largestpopulation in
the world

Growth markets

Increasing
investment in India

China

Shift

5th largest
GDP(expected to
be 3rd by 2027)

Higher labor costs
Rising cost of
production

Contributing to Decarbonization

In the next medium-term management plan, we believe concern for the environment will remain at the core of ourbusiness domain. For example, our products contribute in fields such as renewable energy, secondary batteries, lightweight vehicles and autonomous driving, and recycling. We will provide high-value-added products that contribute toa decarbonized society, and, in the process, we aim to expand our business.
Concern for the environment at the core of our business domain

Product examples:

Examples of products
manufactured:

Renewable energy

Power transmission
and charging
Secondary batteries(for EVs, for storing
electric power)

On board

CASE(more lightweight /autonomous driving)

Waste

Recycling・Turbines
・Rotating shafts

・Separator films
・Battery assembly lines

・Foam and carbon fiber molding
・Lightweight vehicle components
・Autonomous driving sensor lenses

・Chemical recycling

Machine tools

Lithium-ion battery
separator film production lines
Industrial robots

Injection molding machines
Die casting machines
High-precision machine tools

Extrusion machines

Integrated Report 2023

23

Management Strategy

New SHIBAURA MACHINE Long-Term Vision 2030

New SHIBAURA MACHINE Long-Term Vision 2030
On March 5, 2020, we announced New SHIBAURA MACHINE Long-Term Vision 2030. We formulated this long-term
vision to ensure sustained growth beyond fiscal 2023, the final fiscal year of the Management Reform Plan.

Long-Term Vision 2030: Our Ideal Role and Four Overriding Strategies

Setting out our ideal role, Long-Term Vision 2030 calls on
us to address social issues and enhance corporate value
through outstanding technological innovations that help
the global manufacturing industry adapt to megatrends.
In line with this vision, we believe that our social mission—and the way to sustainably enhance corporate value—isto assist key industries in overcoming the challenges of a
new era.

Under Long-Term Vision 2030, we aim to transform intoa highly profitable company that continuously secures ROE
above 10.0%. To achieve this target, we will move forward
based on four overriding strategies: evolving our businessportfolio, developing new businesses that combine products and services and thereby increase profitability andearnings opportunities, growing overseas sales, and fostering personnel to support our technological platforms.

New SHIBAURA MACHINE Long-Term Vision 2030 (Outline)
Management Reform Plan toward the
New SHIBAURA MACHINEFY2019Long-Term Vision 2030 (Our Ideal Role)FY2023

FY2030Address social issues and enhance corporate value through outstanding technological innovations
that help the global manufacturing industry adapt to megatrends

Megatrends

New SHIBAURA MACHINE

Climate change and resource scarcity
Rapid urbanization changes in
population structures
Advancements in technology

Current

Technologicalinnovation

FutureIndividual sales of industrial machinery

Added value of combining products
and services(Monetization of processes and knowledge)(Breaking away from in-company management,enhancing M&A)

Four Directions of Long-Term Vision 2030
Business portfolio strategy (clarification of focus areas and reduction / withdrawal fields)

Improve profitability and expand profit opportunities through new businesses combining products and services
Expand overseas sales

Human resource strategy that supports technological platforms

24

Integrated Report 2023

Developing New Businesses That Combine Products and Services and Thereby
Increase Profitability and Earnings Opportunities

We will increase profitability and earnings opportunities by not just selling products that meet customer needs but creating
businesses that combine products and services to solve customer issues, such as increasing the efficiency of productionplans and assets and enhancing environmental friendliness.
Overall Policy
Selling of productsCompany-Specific Policies

Selling of products andservices

High-value-added
machines

Commodity machines

Company that responds to challenges such as customer
production planning, improvement of asset efficiency, andenvironmental responses

Adding of value through a digital transformation of selected models

Active investments in growth markets and high-value-added domains

Customers’ production stages
SHIBAURA
MACHINE(Present)

Addition of“service”
business

Prototype / initial production

Full-scale production

Increased production

Aging of equipment

Individual sales of industrial machinery → Business selling products
Industrial machinery maintenance / service

Sharing (our sharing factory and equipment)

Prototyping

Small-lot production

Provide services in all of our customers’ production stages

Sales of restored machines (used purchases / resales)
Production increase

Participate in and expand profit opportunities from start to finish of production stages

Evolving Our Business Portfolio (Strategies for Respective In-House Companies)

We will clarify priority fields and fields in which we reduce business or withdraw from and actively invest in growth markets
and high-value-added fields.
High-value-added / Market expansion areas

Machine
Tools
Company

Metal &
Plastics
Industrial
MachineCompany

Control
Systems
Company

New
Business

Focus on specific domains by model selection
EnergyAircraft

OpticsDevicesNew• Multifunction machines• Ceramic cutting machines

Expand / Enhance• Large machines• Special,
dedicatedmachines• High-precision
machine tools

Injection molding machines and die casting machines
Expand local production for local consumption overseas• Engineering solutions

Automobiles

Resource-saving• Dissimilar material joining machines

Extrusion machines
investment

Business expansion through• High-pressure continuouspresses (batteries, etc.)• Reactive extrusion
machines (biomass, etc.)• Extrusion
machines• Collaborative robots• AMR*• Robots• Servo motors,
controllers

EnergyDevices

New materials

Specialize in external sales and strengthen engineeringsolutions
Automation

Labor saving

Establish technology for adding new functions via surface
structure control
Automation

Devices• Injection
molding
machines• Die castingmachines

Reduce / Withdraw

・Small and generalpurpose machines

DX (Digital transformation)

Basic policy

・Domestic productionof standard hydraulicmachines
・Conical-type
extruders・NC, controllers(utilizing of externalalliances)• Film casting equipment: Electronic circuit market(next-generation communications)• Coaters: High-performance films, devices market(batteries, ceramic capacitors, optical components,
etc.)• Imprint equipment: Water purification and sterilization
market (Deep-UV LEDs)* Autonomous Mobile Robot

Integrated Report 2023

25

Management Strategy

New SHIBAURA MACHINE Long-Term Vision 2030

Evolving Our Business Portfolio (Expanding Existing Businesses)

We will continue to expand and strengthen existing businesses to provide added value through a wide range of products
and help address social issues. Amid the global trend toward decarbonization, we offer a variety of products that can contribute to decarbonization initiatives.

Contributing to reducing greenhouse gases
Power generation and storage
High-pressure continuouspress machines

Enhanced productivity through continuous
processes

New materials

Resource-saving

Reactive extrusion machines

Injection molding machines andDie casting machines

Biomass

Weight saving and recycling

Creation of new materials via continuous
reaction of naturally occurring raw materials

Realization of lightweight andhigh-strength parts

SE: solid electrolytes

Rechargeable batteries
All-solid-state batteries

CFRP parts

Wood plastics

Aluminum car
frames

Source: FY2018 NEDO Advanced Battery and Hydrogen
Technology Department Results Report
Meeting (B1-03) LIBTEC Materials

Evolving Our Business Portfolio (Creating New Businesses)

Through the provision of film casting equipment, coating machines, and imprinting equipment that add new functionality
through surface structure control, we will enable our customers to generate profits. We will differentiate ourselves by realizing new added value.

Realizing the addition of new functions via surface structure control
Electronic circuits

Film casting equipment

High-performance films andElectronic devices
Coating machines

Healthcare
Imprint equipment

Function improvement via adding dissimilarmaterials to surfaces

Function improvement via coating dissimilarmaterials to surfaces

Function improvement via adding fine shapes
to surfaces

Next-generation communications

Batteries, ceramic capacitors, andoptical components

Water purification and sterilization

Laminated wiring boards

High-performance separator films

Deep-UV LEDs

Separator

Anode material

Source: Website of Shin-Asahi Electric Ind. Co., Ltd.

26

Integrated Report 2023

Cathode material

Source: JST New Technology Presentation Meetingsmaterials

Growing Overseas SalesAt the time of formulation New SHIBAURA MACHINE Long-Term Vision 2030, The SHIBAURA MACHINE Group’s overseas sales
account for more than 50% of Companywide net sales. However, overseas sales of machine tools account for around 30% of
our machine tool sales, a small share given that, on average, industry peers sell around 60% of their machine tools overseas. We will heighten overseas machine tool sales as a percentage of machine tool sales by reducing general-purpose
machines and focusing on fields where we can realize a competitive advantage, such as large machines and high-precision
machine tools.

Milan

C
 hina Plant(Shanghai)
Shenzhen

Chennai

ChicagoShanghaiTaipei

MexicoHanoi

I ndia Plant(Chennai)

BangkokSão Paulo

Thai Plant

Total of 45 overseas locations

Singapore

12 local sales subsidiaries /3 local manufacturing subsidiaries

Jakarta(As of March 31, 2023)

Fostering Personnel to Support Our Technological Platforms

The R&D Center and the Production Center, which were newly established in April 2020, will consolidate basic technologies
that are laterally distributed among in-house companies as well as train and assign specialists to support SHIBAURA
MACHINE’s technological platforms. Further, we will utilize external resources by forming industry–academia collaborations
and other external alliances and also by hiring people who have advanced professional skills.
R&D Center
Integrate basic technologies ina cross-company way

Metal & Plastics Industrial
Machine Company

Machine Tools Company

Industry–academia collaborations(external alliances)

Production Center

Train and assign
specialists
Control Systems Company

New BusinessHighly professional recruitment

Integrated Report 2023

27

Management Strategy

Message from the CFO

Rather than relying on tailwinds topropel us forward, we will retain oursense of urgency as we pursue reforms
and look to the next stage.

Hiroaki Ota

Director
Executive Operating Officer, Chief Financial Officer
In charge of Corporate Strategic Planning Division andCorporate Administration Division

In Dedicated Pursuit of Our Goals

In fiscal 2022, the third year of the Management Reform Plan,
our medium-term management plan, we benefited from anincrease in electric vehicle-related capital investment. As aresult, orders for our lithium-ion battery separator film production lines increased in China, and we recognized a portion ofthese orders as revenue. As for injection molding machines,
decarbonization led to an increase in orders for medium-sized
and large all-electric injection molding machines in North
America. In India, growing consumer demand prompted
higher orders for hydraulic injection molding machines. In
machine tools, North American demand for large machine
tools for energy industries expanded. As a result, net sales rose
approximately 14% year on year. Despite the impact of sharply
higher material prices, operating income grew around 36%,

buoyed by the higher sales and the impact of yen
depreciation.
Our business is highly susceptible to economic fluctuations.
Since the start of the Management Reform Plan, rather thanusing the external environment as an excuse, we have sharedwith our management team and employees our dedication toachieving the goals we set. Of course, we also have a responsibility to the shareholders and investors who have supported
us. From that perspective, I am critical of our results for fiscal
2022. Although sales and profits did rise, we fell short of our
upwardly revised performance forecast. The main reason wasa delay in sales of extrusion machines, caused by the spread of
infections and travel restrictions following the lifting of China's
zero-COVID policy. We deeply regret our lack of foresight.

Progress on Improving Profitability and Capital Efficiency

The Management Reform Plan focuses on transforming the
profit structure, mainly through reorganization. By fiscal 2023,
the plan targets an 8.0% operating margin and ROE of 8.5%.
Originally, we had planned to reduce fixed costs by ¥1.9
billion through voluntary retirement and ¥1.4 billion fromlower procurement costs. However, due to difficulties faced
in procuring materials since fiscal 2021, we now expect
procurement costs to rise by around ¥3.5 billion. That amount,plus the ¥1.0 billion in additional procurement costs we hadalready anticipated for fiscal 2023, leads us to now expect a¥4.5 billion increase in procurement costs by fiscal 2023.
Procurement costs are therefore likely to be some ¥6.0 billion
higher than we had initially planned. To recover from this, wewill continue to pursue further productivity improvements andnegotiate higher selling prices. For products that have longproduction lead times, it is difficult for us to ask customers toaccept higher selling prices that reflect our higher procurement costs. Large-scale machine tools and lithium-ion battery
separator film production equipment are examples of such

28

Integrated Report 2023

products. To combat this situation, we aim to boost profitability through ongoing organizational reforms, such as ensuring
our transition to an in-house company system is functioning
effectively. We manage the profitability of each in-house company by focusing on operating income and the operating
margin. We also prioritize ROA to confirm each in-house company’s standalone profitability. As part of this effort, we arealso pursuing an efficiency of human capital that is notreflected in the balance sheet. For example, by shifting personnel to extrusion machines that feature lithium-ion battery lines
separator film production lines, we can meet growing demand
without increasing the number of employees. This move helps
improve the profit structure by lowering fixed costs formachine tools, where profitability remains low.
In a bid to meet our ROE targets, we aim to improve ourcash conversion cycle and maximize the utilization of landand other assets. We will also invest in high-profit businesses
to bolster the overall efficiency of our assets.

In fiscal 2023, we expect toexceed the Management

Net Sales / Operating Income (Fiscal 2023)(Billions of yen)

Net sales

Reform Plan’s quantitative
targets for net sales,
operating income,Operating profit

Profit ratio
8.0%

and the operating margin.

(Billions of yen)

209.2

Profit ratio
8.3%

180.0
135.0

Orders

15.0

140.7

10.8
69.7

Management
Reform Plan

Performance
forecast

Management
Reform Plan

Performance
forecast

End ofﬁscal 201984.2

End ofﬁscal 2020

End ofﬁscal 2021

End ofﬁscal 2022

Fiscal 2023 Performance Forecast and Shareholder Returns
Orders on hand as of the end of March 2023 totaled ¥209.2 billion. Of this amount, orders for extrusion machines—mainly
lithium-ion battery separator film production lines—accountedfor ¥154.4 billion. On this basis, for fiscal 2023 we anticipate net
sales of ¥180.0 billion, up 46% year on year; operating incomeof ¥15.0 billion, up 160%; and an operating margin of 8.3%, up
3.6 percentage points. These figures overshoot theManagement Reform Plan’s quantitative targets for net sales,
operating income, and the operating margin.
We expect net income to grow ¥11.6 billion year on year, to¥18.0 billion, and we plan to increase our dividend per sharefrom ¥107.5 in fiscal 2022 to ¥140.0 in fiscal 2023. At net incomeof ¥18.0 billion, this would put our dividend payout ratio at
18.8%, which is below the 40% target in the Management
Reform Plan. However, this net income includes gains from anequivalent exchange of land related to the establishment of
the Sagami Logistic Center, and these gains will all be

Upholding Our Sense of Urgency

The current economic situation is growing more uncertain,
and as our overseas sales ratio rises, we must be ever morevigilant about geopolitical risks. However, from a medium- tolong-term perspective, we see various opportunities amid thesignificant changes in the industrial structure. As an example,
the automotive industry is trending toward electric vehicles,
and our technologies can meet industry needs to produce
batteries and make vehicle bodies ligherin weight.
In this context, our frank assessment is that demand forlithium-ion battery separator film production lines, which we
had expected to be a driving force, is expanding beyond theassumptions we first made when formulating the Management

allocated toward the acquisition of equity in the Sagami
Logistic Center building. Accordingly, we will base the dividend
amount for fiscal 2023 on a profit distribution benchmark of¥10.0 billion, after deducting the proceeds from the sale.
Additionally, to focus on total shareholder return, we will consider the proactive acquisition of treasury stock as needed.
We will continue to allocate cash on hand to strategic
investments, including manufacturing equipment, technology
development, and human capital. In fiscal 2023, we plan
capital investment of ¥6.4 billion, including investment in the
new India Plant (but excluding the acquisition of the Sagami
Logistic Center mentioned earlier). However, we have not yet
completed any M&A transactions. We are committed to only
conducting acquisitions that align with our strategic objectives, meet reasonable valuations based on hurdle rates, anddemonstrate a clear path to sustainable business growth,
including PMI, after the acquisition.

Reform Plan. However, we need to do more than just attribute
success in this area to favorable market conditions. Rather, wemust ensure we complete our unfinished tasks. Profitability insome businesses has not improved sufficiently, and our overall
reform of the business flow, starting from sales-oriented efforts
that require a change in mindset, is still a work in progress.
As we continue to tackle challenges, we must retain our senseof urgency and strive to connect our initiatives to the next
medium-term management plan.
In these endeavors, we would like to ask our shareholders,investors, and all our other stakeholders for their continued
guidance and encouragement.

Integrated Report 2023

29

Special Feature

SHIBAURA MACHINE’s Value Creation

Specific Initiatives in the Value Creation Process

SHIBAURA MACHINE’sValue Creation

Specific Initiatives in the Value Creation Process (1)SHIBAURA MACHINE views its mission as supporting the development of key industries and contributing tofuture society. We have developed and manufactured various products to meet the changing needs of each era.
The Company strives to anticipate the challenges customers will face and works to resolve those issues

through its combinations of products and services that leverage technological capabilities. The trust we gain
with this approach leads to a cycle of further issue detection, contributing to the resolution of social issues.

In this section, we look at specific initiatives in the value creation process, focusing on lithium-ion battery

separator film production lines. These lines comprise extrusion machines, which are a key product of our Metal &Plastics Industrial Machine Company. Orders for these lines are growing substantially, owing to rising demandfor electric vehicles (EVs) as part of the trend toward decarbonization.

02

Combinations of products andservices that leveragetechnological capabilities

01

Technological
Capabilities

Issue detection

Strengths

Solution
Capabilities

Customer
Relationships

03

Resolution ofcustomer issues

04

Deeper relationships withcustomers and know-how
accumulation

Contributing to the development of key industries
SHIBAURA MACHINE VALUE-UP CYCLE
For details on the value creation process, please see30

Integrated Report 2023

P.12–13.

Deeper Relationships with Customers andKnow-How Accumulation 
02
01

03
04

The Company entered the extrusion machine business in 1952 with the completion of its firstplastic extrusion machine, used to coat wires with nylon. Amid the infrastructure boom supported by Japan’s period of high economic growth, we developed and provided molding equipment for the PVC pipes used to distribute water. To meet expanding market demand as living
standards rose, we provided equipment for molding plastic food packaging containers and construction materials. The 1990s saw the widespread adoption of LCD TVs and mobile devices,which required plastic components for high-precision optics. In recent years, we have developed
and provided equipment for molding specialized plastic sheets and films, which are crucial components in solar panels and lithium-ion batteries. In the process, we have strengthened our longstanding customer relationships with various industries and accumulated expertise that
contributes to the creation of new value.

Length of time dealing with customers (extrusion machine business field)
Industry

Specific examples

Infrastructure
Construction materials
Automobiles
Food products
Daily items, sanitation
Optics VC pipesPWire sheathing

Sound insulation walls
Plastic cardboard
Bumpers
Engine compartment parts
Rice containers
Beverage bottle labels
Paper diapers
Packaging films

 iquid crystal televisions
LSmartphones
Separator films
Storage batteries

Batteries
EnergySolar panels

1950

1960

1970

1980

1990

2000

2010

2020

Issue Detection 
02
01

03
04

When lithium-ion batteries were first commercialized, Japan stood at the forefront of lithium-ion
battery manufacturing. Building on its accumulated expertise in precision film molding for optical applications and other areas, the Company was able to anticipate customer issues andrespond to their needs. As a result, for the past 30 years, we have been developing productionlines for separator films, which are a key component of lithium-ion batteries. Initially, we provided customers with the individual pieces of equipment that make up separator film productionlines. However, as lithium-ion battery manufacturing expanded worldwide, we recognized theneed to offer full separator film production lines as a turnkey business that could get manufacturers up and operating swiftly. Since then, we have been accumulating technologies related to fulllines. Our full-line turnkey business aligns with the needs of film manufacturers, including newmarket entrants, and has led to annual orders of nearly ¥100.0 billion.

Integrated Report 2023

31

Special Feature

SHIBAURA MACHINE’s Value Creation

Specific Initiatives in the Value Creation Process

Combinations of Products and Services That
Leverage Technological Capabilities 

Separator films are an essential component of lithium-ion batteries, as they insulate the positive
and negative electrodes and ensure ion permeability. In addition, they provide a shutdown function that blocks the flow of ions between the electrodes and safely stops the battery from functioning in the event of an abnormality. To ensure a battery’s durability, separator films require
high strength, including puncture resistance.
Given that separator films have a significant impact on battery performance, it is important forfilms themselves to be highly uniform and homogeneous. This requires having advanced technology in the manufacturing equipment used for separator film production.
Lithium-ion battery separator film production lines consist of a collection of equipment withvarious functions, from extrusion machines to winders. Advanced technical expertise is required
for each device in the separator film production process.

02
01

03
04

Lithium-ion Battery Separator Film Production Lines (More Than 100m Long)
1

Twin-Screw Extruder

6

WinderStretching films at extremely low tension
allows us to wind even thin films stably
and without wrinkles.

To create the micropores that allow lithium ions to pass between thepositive and negative electrodes, twin-screw extruders are used to melt
the raw materials and produce a uniform, homogeneous mixture fromthe raw materials polyethylene resin and oil.
Uniform and homogeneous mixing is an essential part of producing
high-performance separator film.

1
2
3
4
5

2

4

6

Expanded
view

4

5

Extractor/Dryer

Extractor/dryer perform the essential process of
forming micropores in the film. This allows for thepassage of lithium ions, which shapes the performance and safety features of lithium-ion batteries.

The Company uses proprietary design and manufacturing processes to tailor the layout of components and ensure its equipment meets customer
needs. Our extractor/dryers use volatile solvents toefficiently extract the oil mixed in with the resin anduniformly dry it to create high-quality porous materials with consistent quality.

32

Integrated Report 2023

Transverse Direction
Stretching Machines

Horizontal stretching makes
films thinner and stronger.
Once a heating furnace warms
the film sufficiently and to a
uniform temperature distribution, the film is stretched horizontally using clips.

An equipment configuration specialized for separator
film facilitates a high degreeof stretching, allowing for the
production of high-quality andhigh-performance productswith high puncture strength.

3Machine-Direction
Stretching Machine

These machines are used in
the process of thinning andstrengthening the film, stretching it longitudinally between
rolls that rotate at different
speeds. By simulating anddesigning optimal heating andcooling temperatures, roll diameters, and placement, we use
sophisticated manufacturing
approaches to achieve a highpercentage of stretch.

T-Die,
Casting Machine

Films are produced using ahigh-precision mold called aT-die, which is designed witha flow path optimized toeach customer's needs.
T-dies employ the manufacturing technologies we havehoned in optical film molding to form films with no
thickness irregularities. After
extrusion from the T-die, thefilm is cooled in a castingmachine to ensure highly
uniform thickness.

To achieve this, castingmachines are designed withroll diameters and placement
optimized through simulations, and high-performancefilms are realized throughhigh-precision manufacturing.

SHIBAURA MACHINE’s Strengths (1)The Ability to Provide Full Lines

Separator film production lines consist of equipment with multiple functions, each of which requires a high degree of technological expertise. The specifications and functions that facilitate interplay between equipment are also crucial. The
Company has an advantage here because it designs and manufactures all of these devices, including those used in extraction and drying—the most vital process in the production of separator films. This enables the optimization of specifications
and functions among devices. As a result, among major equipment manufacturers, we are the only company that can provide full separator film production lines.

SHIBAURA MACHINE’s Strengths (2)Shrink Tenter (Vertically Relaxed Horizontally Stretching Machines)
for High-Quality Film Stretching

Another unique strength lies in the Company’s “shrink tenter.” These machines produce
high-quality stretched film by allowing for further relaxation in the vertical direction whenfilms are stretched horizontally.
When stretching film in the horizontal direction, a phenomenon called the “bowing
effect” occurs, causing the film to bow in the vertical direction. Replacing the horizontal
stretching machine with shrink tenter helps suppress the bowing effect, controlling thermal
shrinkage in both the vertical and the horizontal directions. This allows for the production ofhigh-quality films suitable for various battery structures, such as laminated batteries forautomotive applications, which are experiencing expanding demand.

Conceptual image

Film

Bowingphenomenon
occurs duringlateral stretching.

Shrink tentersuppresses
the bowing
phenomenon.

Resolution of Customer Issues 
02
01

03
04

The Company combines its technicalexpertise in various areas to help

resolve customer and social issues.

Resolution of Customer Issues

The widespread adoption of EVs requires highquality lithium-ion batteries that enable improved
driving range and safety. One crucial component ofthese batteries is their separator film, which needs
to be extremely thin and produced in large quantities. The Company leverages its expertise in diverse
fields to address this challenge by offering customers full lithium-ion battery separator film production lines that can quickly be brought online.

Resolution of Social Issues

The mass production of lithium-ion batteries has contributed to the widespread adoption of EVs, as well as
consumer electronic devices such as smartphones,
notebook PCs, and tablets. These batteries also play arole in providing a stable power supply through thestorage of renewable energy. By enriching people’s
lives and contributing to the reduction of CO2 emissions, we are helping to resolve social issues.

Integrated Report 2023

33

Special Feature

SHIBAURA MACHINE’s Value Creation

Specific Initiatives in the Value Creation Process

Specific Initiatives in the Value Creation Process (2)Here, we introduce other examples of specific initiatives in the value creation process

High-Precision Technologies Creating a Safe Society

The Company has engaged in R&D focused on high-precision machining since 1977. We have aimed to differentiate ourselves
and add value by increasing the precision of machine tools. The cameras used for advanced safety devices and autonomous
driving in automobiles are products that could not have been imagined when we first began, more than 50 years ago.
However, our ultra-precise machining methods have enabled us to produce such high-precision, high-efficiency optical components. We have done so by anticipating and then addressing the challenges our customers face, embracing their visions
for the future, and conducting research in collaboration with domestic and international research institutions.
We help to protect people’s lives through the widespread adoption of advanced safety devices in automobiles and createa society that is easy to live in thanks to the automated driving of automobiles.

01

Issue detectionMore precise
optical components

02

Combinations of products andservices that leverage technologicalcapabilities

Higher-resolution, higher-efficiency
machining of optical components

03

Resolution of customer issues

Protect human life
Create an amenable living
environment

High-precision machine tools

Helping to Realize a Decarbonized Society with Molding Technologies
and Recycling

Even before the concept of a decarbonized society began attracting attention, the Company was engaging in collaborative
research with customers and research institutions, in Japan and overseas, in the interests of conserving resources and savingenergy.
By using foam molding technologies in injection molding machines, we have reduced weight, increased strength, anddecreased resource use in automotive components such as door trim by creating micro-bubbles inside molded plastic products. Furthermore, through super high-speed injection molding technologies in die casting machines, we have decreased
weight and reduced resource use in automotive subframes, making them thinner and stronger. We have also developed recycling technologies, which help reduce CO2 emissions throughout the cycle of automobile manufacture, usage, and disposal.

01

Issue detection

Lighter andstronger automotive
components

02

Combinations of products andservices that leverage technologicalcapabilities

Reduced weight and enhanced
strength of automotive interior andexterior parts and decreased use ofresources

Injection molding
machines (foam molding
technologies)

34

Integrated Report 2023

Die casting machines(super high-speed
injection)

03

Resolution of customer issues

Curtailed CO2 emissions

A Safe and Comfortable Society Made Possible by Collaborative Robots ThatWork Together with People

The Company has been conducting research on industrial robots that work in place of humans, helping to secure a workforce
in a society where the working-age population is shrinking and promoting a more enriching and creative way of working andliving. Based on the concept of “thinking and working together,” we have developed intelligent, collaborative robots that help
keep humans away from danger, shift human activities toward more creative endeavors, and provide system engineeringsolutions utilizing robots in customers’ manufacturing processes and in-factory logistics. Our goal is to realize new ways ofworking and living. By developing technology that helps humans and robots to coexist, we contribute to the realization of asafer and more livable society.

01

Issue detection

Workforce needed toreplace people

02

Combinations of products andservices that leverage technologicalcapabilities

Robots that not only replace people,
but also think andwork with them

03

Resolution of customer issues

Realization of a society inwhich it is easy to live andwork in new ways

Dual-arm collaborative robots

Machine Tools Helping to Realize Highly Efficient Power Generation anda Decarbonized Society

The Company works to make machine tools more precise and efficient, aiming to improve the efficiency of turbines used in
all types of power generation, creating new techniques, and meeting the customers’ expectations.
We have developed highly efficient ultra-large machine tools with a composite structure that minimizes setup changes
when machining parts for large turbines. Additionally, we have achieved high-precision machining of complex shapes
through attachments and methods that simplify the machining process. This has allowed us to maximize power generation
efficiency and contribute to the reduction of CO2 emissions. Furthermore, we are facilitating the widespread adoption of new
power generation technologies using small-scale nuclear, hydrogen, and ammonia fuels in response to recent energy security issues, and in the aim of realizing a decarbonized society.

01

Issue detection

Larger and more complexly
shaped components for
power generation

02

Combinations of products andservices that leverage technologicalcapabilities

Machining of large parts withhigh precision, high efficiency, andcomplex geometries

Ultra-large
machine tools

03

Resolution of customer issues

Diffusion of new power generation
technologies and the realization ofa decarbonized society

Double column type
machining centers

Integrated Report 2023

35

Sustainability Management of SHIBAURA MACHINE

Sustainability Management of SHIBAURA MACHINE
As a supporter of manufacturing worldwide, the SHIBAURA MACHINE Group will address social issues and enhance

corporate value through outstanding technological innovations that help the global manufacturing industry adapt tomegatrends. We conduct business activities in countries and regions around the world.

To leave a rich global environment for future generations and contribute to the sustainable development ofsociety, we will make sustainability considerations the drivers of business management and continue to take into
account the viewpoints of all our stakeholders around the world, including customers, shareholders, investors,
suppliers, business partners, employees, and local communities.

Fundamental Policy of Sustainability

Pursuant to our corporate principles, we are committed to realizing a sustainable society and increasing
corporate value by solving the issues of customers throughout the world using our technological strength,and by contributing to the development of key industries.
 e address global social issues with outstanding technologies our company possesses to solve the issues andWat the same time increase corporate value.

 e strengthen our supply chain, taking into account the environment and human rights, which contributes toWsustainable use of resources.
We realize fair and highly transparent business management.

Sustainability Advancement System

Board of Directors
ReportSupervise, direct

Sustainability Committee
Chair: President
Members: Executive officers who are also directors

Secretariat

Corporate Planning DivisionCorporate Administration Division,
head office divisions
ReportSupervise, direct

In-house companies, head office divisions,affiliated companies

Production Center
ReportSupervise, direct

In-house companies, head office divisions,affiliated companies

R&D Center
Coordinate
In-house companies, affiliated companies

Recommendations are made to executive bodies to ensure that the SHIBAURA MACHINE Group’s activities help sustain
the development of the Group and society and to ensure that these activities earn appropriate evaluations from stakeholders.

36

Integrated Report 2023

E

Themes of Sustainability Management Initiatives
Item

ThemesCustomers

Engineering
Quality and safety
Services

Suppliers andbusiness
partners

Shareholders
and investorsS rocurement from businessP
partners who are promoting
environmental preservation
activities
Prevention of transactions with
antisocial forces nhancing investor relations
Eand stakeholder relations
activities
Having more dialogues withinstitutional investors

Initiatives for Major Action Plans in FY2022

Issued SHIBAURA MACHINE Engineering Review(vol. 29), featuring initiatives concerning energy and theenvironment, in January
Set up a VR room and verified a virtual design review

Continued three “milk run” routes covering 31 suppliers
in total
Promoted electronic data interchange system
registration(44 companies newly registered)

When concluding contracts, concluded memoranda ofunderstanding on the prevention of transactions with
antisocial forces (20 companies)

Conducted dialogues with domestic and overseas securities analysts and institutional investors (191 times)
Participated in an investor relations conference

Held plant tours themed on lithium-ion battery separator film production lines, hosted small meetings
Issued Integrated Report 2022
Fostered personnel who can think and act
independently

Conducted training for junior employees andperformed follow-up training

Employees

Local
communities

 uman resource development
HDiversity
Safety and healthContributions to local
communities
Support for technical education
Coexistence with local
communities

Introduced external e-learning as a reskilling option

Utilized telecommuting system and remote working

Encouraged employees to take childcare and nursing
care leave
Promoted mental and physical health by developing
our occupational safety and health management
system (OSHMS), conducting various types of healthand safety related-education, and advancing healthand safety initiatives

Held lectures on advanced manufacturing engineering(15 times)
Volunteered for environmental beautification activities,
conducted beautification activities around plants,
conducted blood drives
Participated in TABLE FOR TWO activities

Participated in activities held by external environmentalorganizations (17 organizations)
Reduced environmental impact

E Environment

 trengthening the environmenS
tal management system
Reducing environmental load
Addressing climate change
Pollution control

Implemented initiatives addressing the environmentrelated Sustainable Development Goals (SDGs)

G GovernanceG

Major Action Plans in FY2023

Publish technical bulletins to provide customers withinformation on technology and new products
In addition to virtual design reviews, create an environment to simulate current demonstration status

Launch injection molding machine subscription service(United States)
Promote efficiency of supplier milk runs and transport
between factories
Promote the electronic data interchange system
Work to reduce environmental impact through periodic
environmental surveys of suppliers
Engage in dialogue with shareholders and institutional
investors
Enhance and expand disclosure
Consolidate input from shareholders and institutional
investors and utilize this information in corporate
activities
Foster personnel who can think and act independently(at all levels)
Enhance employee engagement

Promote reskilling (independent career development)
Support diverse working styles
Continue to develop safe personnel and create a safeand healthy organizational culture to ensure occupational safety and promote mental and physical health
Provide opportunities for hands-on activities that foster
an attractive work and career outlook in children, whowill be the future of manufacturing
Contribute to the local community and environmentand raise awareness of beautification
Participate in activities held by external environmentalorganizations (17 organizations)
Reduce environmental impact

Promote goals linked to the environment-related SDGs

Moved forward with the 2nd Environmental Action Plan
(2021–2025)

Move forward with the 2nd Environmental Action Plan
(2021–2025)

Conducted education to promote eco-driving

Conduct education to promote eco-driving

Promoted the introduction of eco-cars to theCompany-owned fleet

Continued efforts to make operational status ofCompany-owned vehicles visible

Implemented an evaluation on the effectiveness of theBoard of Directors

 urther strengthening of theFGroup’s governanceRigorous management of risk
and complianceS

Educated all employees on the SHIBAURA MACHINEGroup Code of Conduct

Established an attorney’s office as an external contact
to serve as an independent third party for the in-house
whistle-blowing system
Provided all employees with compliance training on
procurement law, anti-bribery, and whistleblower
protection systems

Promote the introduction of eco-cars to theCompany-owned fleet

Strengthen guidance by visualizing operational status
of Company-owned vehicles
Implement an evaluation on the effectiveness of theBoard of Directors
Implement measures to ensure awareness of the
SHIBAURA MACHINE Group Code of Conduct

Provide various sorts of training for all employees

Integrated Report 2023

37

Sustainability Management of SHIBAURA MACHINE

Human Resource Strategy

With passing on skills and technologies to the next generation, acquiring new skills and technologies, and fostering globallycompetent personnel as its main aims, the SHIBAURA MACHINE Group is developing and acquiring personnel who will
underpin the Group’s advancement.
Basic Policy on Human Resource Strategy

Under the Management Reform Plan, a medium-term management plan ending in fiscal 2023, we have reorganized by introducing an in-house company system and establishing an R&D Center and a Production Center. We are advancing such initiatives with our sights set on becoming a corporate group which responds to megatrends in global manufacturing industry
with innovative technology, which is the goal of Long-Term Vision 2030. To respond to an ever-changing external environment, we are placing particular emphasis on strengthening human resources by seeking personnel who have insight intoand expertise in new aspects of R&D, digital transformation strategy, production technologies, and sales as well as in suchcorporate areas as planning, human resources, and finance. At the same time, we are reforming workstyles and increasing
diversity with a view to achieving sustained enhancement of corporate value by retaining personnel, improving productivity,and encouraging innovation.
In addition, as a corporate group with bases worldwide, we have established a global policy on human resources. Whileadvancing global strategies through the promotion of a common Companywide human resource strategy, we operate localized regional human resource systems that are tailored to suit the institutions and business practices of the countries andregions where we have bases.
Global Human Resource Policy
Our human resource systems reflect the history, culture, laws, and regulations of each country and region, and the differences between these systems must be properly understood and recognized.
The SHIBAURA MACHINE Group shall establish human resource systems that appropriately reflect the circumstances ofeach country and region based on the following fundamental principles.

1. The diverse values of individuals shall be recognized, and individuality and privacy shall be respected.
2. Each person shall be assessed and treated fairly and impartially. Discriminatory language related to race, religion, nationality, mental or physical disability, age, or sexual orientation or gender identity shall not be permitted. Acts of violence orsexual harassment shall not be permitted.
3. Efforts shall be made to create safe, healthy, and comfortable work environments.
4. The design and administration of respective systems shall be conducted in a manner that is satisfactory to employees.
Human Resource System

Aiming to realize Long-Term Vision 2030, we have introduced a human resource system that enables diversified employeecompensation and career development as well as the utilization of diverse expert personnel.
Grade System

Grade System

Appropriately reflects
employees’ growth stages andjob performances
Determining promotion
and demotion
Determining assessment
criteria

Determining
compensationlevelsCompensation System

Providing compensation
linked to results andperformance

38

Integrated Report 2023

Reflecting incompensation

Assessment System

Appropriately measuresrequired results, abilities,
and skills and encourages
employee growth

Enabling appropriate compensation andlong-term development by redefining criteria
for promotion and demotion and by linking
positions and roles to gradesEstablishing specialist positions as well as
promoting the development of specialists
and the external hiring of talented specialists

Compensation
SystemProviding compensation commensurate withresults and performance by appropriatelyreflecting roles and resultsCompensating talented specialists in accordance with market compensation levels
without setting an upper limit on suchcompensation

Assessment
SystemEstablishing assessment items corresponding to the definitions of respective grades

E

Hiring

We hire personnel based on two main approaches: theconventional mass hiring of new graduates (the continuation of membership-type employment) and the mid-career
hiring of personnel with the skills needed to realize ourmanagement and business strategies. Our mass hiring of
new graduates is people-centered. We focus on selecting
students who exhibit leadership and an overseas orientation, regardless of their gender or nationality. We conduct
training and job rotation with the expectation that, after
being with SHIBAURA MACHINE for five or ten years, these
employees will lead the Company forward.
Meanwhile, our mid-career hiring mainly entails job
based recruitment. To adapt to an ever-changing external
environment, we have set out a policy of hiring specialists
not only in our mainstay field of mechanical engineering
but also in physics, chemistry, information engineering,
and a wide range of other academic fields. Moreover, ourhiring under this policy is focused on new areas related to
IT and energy. For highly skilled professionals, we haveestablished a flexible salary system that is distinct from thesalary system for career-track employees.

S

G

Number of New Hires and Employees (Non-Consolidated)(Employees) 
120

1,772

(Employees)
2,000

1,796
1,654

1,664

1,683

1,500

90

14

6

13
60

76

73
30

23

1,000

46

500

22

59
30

0

2018

2019

New graduate hires (left axis)
Total employees (right axis)

2020

2021

2022

(FY)

0

Mid-career hires (left axis)

Stepped-Up Investment in Human Resources under the Management Reform Plan

Strengthening of core technologies

Acquisition of control software engineers

Strengthening of operating resources

Increase in overseas sales personnel

Acquiring of new technologies
Strengthening of recruitment

Acquisition of IT and IoT personnel to promote the transition to smart factories
Advancement of a recruitment plan reflecting the priorities of highly-skilled professionals

Human Resource Development

Our basic policy is to both address future social issues and enhance corporate value by fostering personnel who can think
and act independently and take the initiative to develop their own careers.
Engineer Training
The SHIBAURA MACHINE Group provides engineer education for mid-career and junior engineers, who will be theleaders of the future. Our training improves skills directly
related to work by covering a wide range of topics, frombasic technology acquisition and computer-aided design
education through to the acquisition of certification as aprofessional engineer. As well as providing training on
design and technical drawing, we ensure that our engineers acquire other essential skills and knowledge related
to marketing strategies, languages, and basic manufacturing, thereby developing personnel who can play activeroles in many different fields.

Reskilling
As workstyles diversify and technologies progress, industry
is undergoing fundamental structural changes. To ensurethat our workforce has the new knowledge and skill sets
necessitated by these changes, we have begun reskilling
employees.
Educating Global Human Resources
We have two programs aimed at cultivating humanresources capable of thriving in the global market: Global
Production Engineer Education and Global Human
Resources Development Education. One of the educational
objectives is to foster connections across organizations andcreate horizontal relationships among participants undergoing training at the same time.

Integrated Report 2023

39

Sustainability Management of SHIBAURA MACHINE

Basic Policy on Respect for Human

Basic Policy on Respect for Human
SHIBAURA MACHINE established the SHIBAURA MACHINE Group Code of Conduct pursuant to which it will respect fundamental human rights and diversity and provide support in the realization of a work–life balance.
We abide by the laws and regulations of all countries and regions, understand international norms regarding humanrights, and respect fundamental human rights. We do not tolerate child labor or forced labor.

I f any violation of fundamental human rights happens in the SHIBAURA MACHINE Group, we will take appropriate action.
If any supplier is found to be violating fundamental human rights, we will require it to take remedial action.
We hold ongoing dialogues with relevant stakeholders in order to respect human rights.

 e provide an environment in which employees can work creatively and eﬃciently, supporting them in the realization ofW
a work–life balance.
We endeavor to realize a working environment that is safe and pleasant to work in.
Diversity and Inclusion Initiatives

The SHIBAURA MACHINE Group is working to promote diversity so that employees with diverse personalities can fully demonstrate their abilities.
Promotion of the Employment of Diverse Personnel
We promote employment based on personal skills and qualiﬁcations, not on gender, nationality, age, or the like, thus ensuring the assignment of the right personnel to the right positions.
 hildcare and Family Care Support Programs andC
Their Uses
In the past ﬁve years, all eligible female employees havetaken childcare leave, 100% of whom returned following
the conclusion of such leave. Other mechanisms for supporting work–life balance include shorter working hours,
overtime exemption upon request, and leave entitlement
carryovers that, since fiscal 2019, can be used for shortterm family care purposes.

Persons who took childcare
leave (male employees inparenthese)
Percentage of those
returning from childcare
leave

Persons who took familycare leave

Persons who used the shortworking hour program(for childcare) ork Environments Conducive to Child-Rearing andW
Long-Term Employment
In ﬁscal 2022, the average length of service of employees
was 19.4 years (19.3 years for men and 20.6 years for
women),* a testament to the long periods of service thatcharacterize the Company.
* SHIBAURA MACHINE Co., Ltd., non-consolidated

40

Integrated Report 2023

Fiscal yearPersons who used the shortworking hour program(for family care)

Fiscal year

Resignees (female employees in parentheses)

2018

2019

2020

2021

(Persons)

2022

9（2）

9（5） 10（7） 18（14） 25（21）

100％

100％

100％

100％

100％

0

1

0

0

0

10

9

3

6

10

0

0

0

0

0

The data includes domestic affiliates.

2018

2019

2020

2021

(Persons)

2022

43（7） 30（6） 19（1） 54（8） 54（9）The data includes domestic affiliates.

E

S

G

Work–Life Balance

The SHIBAURA MACHINE Group carries out various initiatives to create working environments in which all employees cantake pride in their work.
Activities

Childcare and familycare leave system

Promotion ofplanning and taking
annual paid leave

We offer our employees various forms of support
so that they can fulfill their childcare and family
responsibilities with peace of mind.

Registration at
public entities inrelation to genderequality(%)

Taking annual paid leave in a planned manner is
encouraged. For example, we have introduced asystem for taking leave on important occasions(birthdays, etc.) as well as a system that allows fortaking leave as required, including leave in halfday increments and leave for three consecutive
days (or leave for two consecutive days twice at
different times).

100.0

100.0

100.0

80

100.0

61.0

50.0

60
40

24.4

22.5

18.0

20

4.7

0

2018

Men

43.8

18.4

13.9

Women

56.8

2019

2020

2021

2022

(FY)

Including domestic affiliates.

Combined average

Average Annual Overtime Hours and Percentage of Paid Leave
Taken (Non-Consolidated)(Hours)

We have a contact point for consultation on
harassment issues and provide education toprevent cases of harassment in order to create
comfortable workplaces free from harassmentof any kind (sexual, power, etc.).

In Numazu, Shizuoka Prefecture, where its
Numazu Plant is located, the Company has registered both a declaration endorsing gender equality (throughout Shizuoka Prefecture) and as apromoter of gender equality (in Numazu City).

100.0
100

Specific forms of support available:
Maternity leave, extended leave for childcare,nursing care leave, extended leave for family care,family care leave, and shorter working hours

A system for using accumulated paid leave forAccumulated reservelong-term recuperation, self-enlightenment, or
leave
volunteer activities
Setting a contact
point for reportingcases of harassment

Percentage of Childcare Leave Taken

250

225.9

200

66.0

150

67.2

140.9
56.2

(%)
100
80

73.5
62.9

60

100

40

50

20

0

  

197.2

196.6

218.7

2018

2019

2020

2021

2022

(FY)

0

Average annual overtime hours (left axis)
Percentage of paid leave taken (right axis)

Health and Safety

As health and safety form the foundation of business management, the entire SHIBAURA MACHINE Group will make a concerted effort to step up health and safety initiatives with the aim of establishing workplaces where all employees can workwith peace of mind.
Development of Health and Safety Activities
The Group proactively conducts health and safety activities
with the aims of creating working environments that aresafe and comfortable and realizing zero industrial
accidents.
 romoting Occupational Safety and Health
P
Management Systems
Recognizing that health and safety are integral to corporate
activities, based on a commitment to preventing industrial
accidents and the spread of infectious diseases, and to promote employee health, we have acquired JISHA OSHMS*
certiﬁcation for our plants.
The OSHMS techniques are also applied at all Group
companies to improve their health and safety
management.

Lost Time Injury Frequency Rate (Non-Consolidated)
2.0

1.5

1.16

1.0

0.35

0.5

0.00

0.00
0

2018

0.31

2019

2020

2021

2022

(FY)

* JISHA OSHMS: Occupational health and safety management system approved by theJapan Industrial Safety & Health Association

Integrated Report 2023

41

Sustainability Management of SHIBAURA MACHINEIntellectual Property
Basic Approach

The SHIBAURA MACHINE Group’s corporate principles state that “We will contribute to maximizing value for our customers
around the world.” Under this management philosophy, we aim to achieve “the resolution of social issues and the enhancement of sustainable corporate value” by addressing customer issues. Our intellectual property strategy is one of the foundations of this aim. The R&D Center, responsible for our intellectual property strategy, works closely with the Research andDevelopment Division and each in-house company to create, protect, and strategically utilize intellectual property.
Our Research and Development Division’s Intellectual
Property Department manages intellectual property
across the SHIBAURA MACHINE Group.
We have dedicated Intellectual Property Department
personnel assigned to each Product Development
Department, where they provide support in researching, creating, acquiring, formulating, and maintaining
intellectual property rights.
In addition, Intellectual Property Department personnel participate in the important meetings of each ProductDevelopment Department to develop and support intellectual property strategies based on technology strategies.

Intellectual Property Management System Structure

Product Development Department

Research andDevelopment Division

Intellectual Property Management System

Intellectual Property Department

Strengthening Intellectual Property Capabilities

Based on the “Eight Technology Platforms” described on
P.10–11 , the Company engages in the development
and manufacture of advanced industrial equipment
across a wide range of sectors. By evolving our businessmodel to combine products and services, we sustain ourstrengths and continue to hone our expertise.
We protect the proprietary technologies generated
from these efforts as intellectual property rights, and wehave amassed a robust portfolio. We also ensure proper
management of these intellectual property rights andcontinuously strive to strengthen our intellectual property
capabilities through periodic reviews and by reconfiguring
the portfolio in line with technological advancements.

Strengthening Intellectual Property Capabilities

Products
Eight technology
platforms

Promotion of thebusiness model

Review andrestructuring

Combinationof products andservices

Eight technology
platforms

New portfolio

Portfolio

Protection and Utilization of Intellectual Property

During product development, we confirm other companies’ intellectual property rights, such as patents. When
conducting external lectures or submitting articles toindustry magazines, we ensure the use of third-party
copyrights, among other activities. Furthermore, we
actively protect intellectual property generated throughresearch and development with patents and actively utilize them in our own products. As of April 1, 2023, wehold 2,180 patents, trademarks, and other intellectual
property rights in Japan and internationally.
42

Integrated Report 2023

Intellectual Property Rights Held
(Rights)
2,500
2,000
1,500

2,180
798
1,382

2,169
819
1,350

2,301
892
1,409

1,000

2,131
878
1,253

2,180
926
1,254

500
0

2019.4

Japan

Overseas2020.42021.42022.42023.4(Month and year)

E

S

G

Supply Chain Management

The SHIBAURA MACHINE Group’s Procurement Department is committed to promoting three major aspects of CSR procurement: environmental preservation, procurement standards, and compliance.
The SHIBAURA MACHINE Group’s Material Procurement Policy

SHIBAURA MACHINE Group’s Basic Principles
1.	We comply with laws and ordinances and conform tosocial norms.
2.	We offer both current and prospective suppliers(“suppliers”) equal opportunities for business.
Green Procurement

The SHIBAURA MACHINE Group is committed to promoting
green procurement, which involves sourcing environmentally friendly products, components, materials, and raw
materials, with the aim of passing on a healthy environment to the next generation.
On the environmental front, we have established theGreen Procurement Guidelines and set evaluation andCompliance

We have set down the basics of our purchasing activities in
the Purchasing Management Regulations, and we educate
all Group company employees on how to comply withthese regulations.
Our main initiatives are as follows.
■ Conduct compliance education (five times in fiscal 2022)■ Hold internal audits on procurement(eight times in fiscal 2022)■ Participate in external workshops(including online workshops)
Global Procurement

We have established a global procurement network tocentralize procurement information from our overseas production sites and identify the most suitable items for procurement in terms of delivery timing, quality, and price. We
Initiatives for Reducing Human Rights Risks

In line with its Policy for Responsible Mineral Procurement,
the SHIBAURA MACHINE Group is committed to fulfilling its
corporate social responsibility by actively working to avoid
the use of conflict minerals, which have been identified asproviding funds for armed groups involved in human rights
abuses, such as human trafficking, forced labor, child labor,

3.	We engage in socially responsible procurement in cooperation with our suppliers.
4.	We ensure our procurement activity with our suppliers isbased upon mutual understanding and trust.

judgment criteria related to the SHIBAURA MACHINEGroup’s policies and procurement. We revised the Green
Procurement Guidelines in April 2020, reviewing and adding
to the list of environment-related substances, and we conduct procurement activities that consider the latest environmental concerns throughout the entire supply chain.

We offer training on essential aspects of the Subcontract
Act, centering on people who are involved within procurement. We provide guidance on improvements and measures for achieving CSR procurement in accordance withsocial rules and without any irregularities. We also conduct
risk management training as part of our Company-wide risk
management efforts.

aim to reduce costs by implementing a local sourcing
system in the East Asian and Southeast Asian markets,and by utilizing an optimal procurement network.

and environmental destruction, in the Democratic Republicof Congo and its neighboring countries where mineralssuch as tin, tantalum, tungsten, and gold are mined.
If we confirm a possibility that conflict minerals arebeing used, we ask suppliers to disclose relevant information and cooperate in efforts to stop such usage.

Integrated Report 2023

43

Sustainability Management of SHIBAURA MACHINE

Environment

In accordance with its Corporate Principles and Code of Conduct, the SHIBAURA MACHINE Group will meet its corporatesocial responsibility by actively contributing to the creation of a sustainable environment through compliance with laws andregulations, the provision of environment-friendly products, and the advancement of initiatives to reduce the environmental impact of the Group’s business activities.
SHIBAURA MACHINE Group’s Environmental Policy

Basic Policy
1.	We will actively contribute to the creation of an environment that will be passed on to the next generation in a healthy
state as a corporate social responsibility (CSR).
2.	We comply with all applicable international, regional, and national standards, laws, regulations, agreements, industry
guidelines, and Company rules related to the environment.
3. We contribute to society by developing and offering excellent environmentally conscious products.
4. We strive to reduce the environmental impact of our business activities, in order to protect biodiversity and ecosystems.
Strengthening the Environmental Management System

Since 1996, when we obtained ISO 14001 certiﬁcation for the Numazu Plant, we have been consolidating and enlarging thescope of certiﬁcation to cover other production centers, sales centers, and Group companies in Japan as part of concertedGroupwide efforts, in addition to strengthening our environmental management system. Regarding overseas operations, we
obtained ISO 14001 certiﬁcation for the Shanghai Plant in 2004, for the Chennai Plant in 2012, and for the Thai Plant in 2015.
In fiscal 2017, we completed document revisions to reﬂect ISO 14001:2015.
Environmental Action Plan

The SHIBAURA MACHINE Group established the 2nd Environmental Action Plan, a ﬁve-year medium-term plan spanningfiscal 2021 to fiscal 2025, as well as a long-term plan up to 2030. These plans were prepared with reference to the COP21
international agreements and trends in Japan and overseas, and cover our overseas production facilities as well. Under theplans, the key medium-term themes are to clarify how products contribute to the environment and to strengthen our global
management. Below is a summary of the progress we made under the 2nd Environmental Action Plan in fiscal 2022.
Global warming
prevention

Making productive
use of resources

Initiatives (Indicators)

Reduction in CO2 emissions intensity(t/hundred million yen)

Reduction in waste emissions (t/hundred million yen)

Chemical substances Reduction in chemical emissions(kg/hundred million yen)management

Biodiversity conservation (ecosystem network)

Green management

Overseas

44

Renewable energy(utilization of solar power and untapped energy)
Scope 3 initiatives(analysis of upstream and downstream impacts)

Consideration of global Environmental Management
System (EMS) (strengthening of collaboration withoverseas subsidiaries)

Percentages in parenthesis are the decreases compared with the fiscal 2013 reference year.

FY2022
Achievements
1.88（–32%）

0.231
4.33

FY2023 Targets
1.82（–34%）（–33%）

0.229（–33%）

0.120 （–65%）（–44%）

4.35（–44%）

4.00 （–48%）

1.38 （–50%）

Participation in Mount
Fuji environmental
conservation activities

Participated in Mount
Fuji environmental
conservation activities

Participate in Mount Fuji environmental conservation activities

Analyzed downstream
impacts

Analyzed downstream
impacts

Strengthen environmental burden
reduction activities

Generated 0.1% ofelectricity consumed
Monthly reporting

Generate 0.1% ofelectricity consumed

Generate more than 20.0% ofelectricity consumed

Monthly reporting

Investigate external infrastructure,
conduct in-house investigationsof overseas environments, anddevelop environmental leaders
at overseas plants

Strengthening management and reducing environmen- Analyzed environmental Analyze environmental
tal load (management upgrading)
impacts
impacts

Integrated Report 2023

Long-Term Objectives to be
Achieved by FY2030

Strengthen management and promote reduction of environmental
burdenE

S

G

Initiatives Aimed at Achieving the Environmental Action Plan

～
～

～
～

Prevention of Climate Change
Reduction in CO2 Emissions Intensity
In fiscal 2022, CO2 emissions intensity was 188 tons of CO2(t/¥ billion)
(%)
2.76
emissions per ¥1.0 billion, a 32% reduction compared with0
3.0
that of fiscal 2013.
2.05
1.88
1.82
2.0
–20
–26
In fiscal 2022, we reduced operating hours by changing
–32
1.38
–34
the temperature settings of the turbo chillers in the air con1.0–40
ditioning systems at our large plants and further converted–50
the ceiling lights at the Numazu Plant to LEDs.
0
–60
2013
2021
2022
2023
2030
(FY)
Aiming to reach our long-term fiscal 2030 target, we will(reference year)(target)(target)lower CO2 emissions by utilizing solar power generation
Intensity (left axis)
Percentage decrease compared with reference year (right axis)
and other renewable energy sources. Specifically, we will
install solar panels in accordance with the reorganization of plants set out in the Management Reform Plan.

～
～

～
～

Effective Utilization of Resources
Reduction in Waste Emissions Intensity
In fiscal 2022, waste emissions intensity was 23.1 tons of(t/¥ billion)
(%)
waste emissions per ¥1.0 billion, a 33% reduction com0.5
0–24
pared with that of fiscal 2013.
0.345
0.4
–20
–33
–33
Fiscal 2022 initiatives to reduce waste emissions
0.260
0.3
0.231
0.229
–40
included reducing waste plastic during production testing
0.2–65
of extrusion molding machines and promoting the digital
–60
0.120
0.1
preparation and storage of documents.
0
–80
(FY)
2013
2021
2022
2023
2030
Aiming to reach our long-term fiscal 2030 target, we will(reference year)(target)(target)lower waste emissions through a range of measures. For
Intensity (left axis)
Percentage decrease compared with reference year (right axis)
example, at the product design and development stage, wewill take into consideration waste emission volumes. At the manufacturing stage, we will reduce packaging materials
through the introduction of common components and through the minimization of component numbers, and we will introduce returnable boxes for the convenience of components.

～
～

～
～

Management of Chemicals
Reduction in Chemical Emissions Intensity
In fiscal 2022, chemical emissions intensity was 433.0 kilo(kg/¥ billion)
(%)
grams of chemical emissions per ¥1.0 billion, a 44% reduc10.0
0
7.70
tion compared with fiscal 2013.
8.0–10
Fiscal 2022 initiatives to reduce chemical emissions
5.00
6.0
–20
4.35
4.33
4.00
included a change of paint that reduces the amount of
4.0
–30
–35
diluting solvents.
–44
–44
2.0
–40
Aiming to reach our long-term fiscal 2030 target, we will
–48
–50
0
(FY)
2013
2021
2022
2023
2030
lower chemical emissions through a range of measures. For(reference year)(target)(target)example, at the product design stage, we will endeavor toIntensity (left axis)
Percentage decrease compared with reference year (right axis)
eliminate the use of paint. At the manufacturing stage, we will
adopt the latest environment-friendly paints, improve the efficiency of painting processes through the utilization of AI robots,and promote the utilization of optimal volumes of paint.
Water Resource Initiatives

The SHIBAURA MACHINE Group Environmental Policy calls for us to contribute to the creation of an environment that will bepassed on to the next generation in a healthy state, comply with laws and regulations, develop and provide environmentallyfriendly products, reduce the environmental impact of our business activities, protect eco-systems, promote the effective
use of resources and energy, and actively engage in environmental preservation activities.
Water is a precious resource that is essential to our daily lives and business activities. Recognizing that water is a limited
and important resource, and based on the SHIBAURA MACHINE Group Environmental Policy, we will help to secure sustainable water resources by engaging in environmental conservation activities focused on the effective use of water, appropriate
wastewater management, and prevention of water pollution.
Integrated Report 2023

45

Sustainability Management of SHIBAURA MACHINE

Environmental Considerations in Product Development

CO2 emissions at the product use stage account for the majority of CO2 emissions over the entire life cycles of SHIBAURA
MACHINE products. Therefore, improving the energy-saving performance of our products and reducing CO2 emissions
during the product use stage is effective in reducing the environmental impact of our products.
Examples of Environmentally Conscious Products

Die Casting Machine DC400R2-EM

To reduce load on the hydraulic pump, thismachine uses an electrically driven clamping mechanism. Also, the high-response
servo motor drive reduces power consumption by shortening cycle timethrough high-speed mold opening andclosing and stopping intermediate moldclamping.

Double Column Type Machining Center MPC-H
High-speed rotating spindles are typically
mist-lubricated, but this machine uses
greased bearings for the spindles to eliminate the need for the air used in mist lubrication. This shortens air compressor
operating time and reduces power
consumption.

Developing Environmentally Conscious Products and Reducing Potential Impact on the Environment
When developing new environmentally conscious products, we perform product assessments to estimate and reduce
the products’ potential impact on the environment. These development activities are conducted pursuant to the Design
Guidelines for Environmentally Conscious Products, which incorporate product design guidelines and consideration of
the 3Rs (reduce, reuse, and recycle). When a product is completed, an application for environmentally conscious productcertiﬁcation is ﬁled for assessment, and, if the product is certiﬁed, it is registered as an environmentally conscious product.
Further, all registered environmentally conscious products undergo a life cycle assessment pursuant to SHIBAURA MACHINEGroup standards. This assessment encompasses raw materials, manufacture, transportation, use, recycling, and disposal.
Moreover, certain of these products are compared with previous models to calculate volumes of CO2 emissions reduction.** The amount of CO2 emissions that is considered to have been reduced by replacing a previous model with an environmentally conscious product with a better energy-saving
performance

Environmental Load from the Entire Supply Chain
Since ﬁscal 2015, we have estimated and calculated CO2 emissions from our entire supply chain*1 in accordance with theguidelines of the Ministry of the Environment.*2*1 Out of the 15 categories, categories 8, 10, 13, 14, and 15 are not applicable to our line of business.
*2 Basic guidelines regarding the calculation of GHG emissions from the entire supply chain

Results for Fiscal 2021

Results for Fiscal 2022
79.4 93.5 kt-CO2

Upstream
Scope 35.2

2.3 kt-CO2

24.0

40.2 kt-CO2

2.7

1.8 kt-CO2

CATEGORY 2

1.5

1.4 kt-CO2

CATEGORY 4
Transportation,delivery (upstream)

1.1

1.1 kt-CO2

CATEGORY 6

0.9

0.8 kt-CO2

114.8

141.1 kt-CO2

Capital goods

Business trips

CATEGORY 1
Purchased goods
and services
CATEGORY 3
Fuel / energy
related activities
CATEGORY 5
Waste frombusiness activities

SHIBAURA MACHINE
Group

0.0

0.0 kt-CO2

Scope 2 (Electricity consumption)

705.1

700.6 kt-CO2

0.4

0.4 kt-CO2

Scope 1 (Fuel consumption)

841.8

Scope 318.8 21.0 kt-CO2

2.7 2.7 kt-CO2

CATEGORY 7
Commutation of
employees

Downstream

21.5

865.8 kt-CO2

23.7 kt-CO2

705.5

CATEGORY 9
Transportation,delivery (downstream)
CATEGORY 11
Use of soldproducts
CATEGORY 12
Disposal of soldproducts

701.0 kt-CO2

Endorsing the TCFD Recommendations

We have announced our endorsement of the TCFD* recommendations.
Going forward, we will continue to disclose information in accordance with
the TCFD’s recommended framework.

* TCFD stands for the Task Force on Climate-related Financial Disclosures, which was established to consider how to disclose climate-related information and manage the response offinancial institutions. The TCFD recommends that companies and organizations disclose information on climate-related risks and opportunities.

46

Integrated Report 2023

E

S

G

Environmental Data

Input and Output Graphs

Energy Consumption by Fiscal Year

Electricity Consumption by Fiscal Year(in 10,000 kWh)

(GJ)

800,000

8,000

521,949 549,648 536,762 516,033

600,000

432,187474,964 498,231

6,000

400,000

4,000

200,000

2,000

0

2016

Domestic

2017

2018

2019

2020

(FY)

2022

Overseas

Service Water Consumption by Fiscal Year(in 10,000 m3)
180

2021

141 145

122

135

118

2016

2017

Overseas

5,073

2018

4,065

2020

4,457

4,678

2021

2022

100

3,206 3,431

98.0 92.6

86.0

80

75.4

2,000

40

1,000
0

2016 2017 2018 2019 2020 2021 2022

Domestic

Overseas(FY)

Domestic Soot and Dust Emissions by Fiscal Year
(t)

0

(t)

1.6

0.03 0.03

1.2

0.02

1.0

0.01

0.01

(t)

0.89

0.80

0.90 0.83 0.88

(FY)

Domestic BOD*1 Emissions by Fiscal Year

0.3

1.62

1.46

2.5
2.0

1.13 1.21 1.11 1.19

1.5

1.0
0.5

2016 2017 2018 2019 2020 2021 2022

(FY)

*1 BOD (Biochemical oxygen demand): The volume ofoxygen consumed when organic material is decomposed by microorganisms in water

2016 2017 2018 2019 2020 2021 2022

(FY)

0

0.15

0.12

1.0
0.8

1.48 1.40

0.6

0.98

0.4

0.5

0.2
2016 2017 2018 2019 2020 2021 2022

(FY)

(t)

2.01
1.49 1.45 1.46

2016 2017 2018 2019 2020 2021 2022

Domestic N-hex*3 Emissions by Fiscal Year

1.0

0

0.19

0.1

(t)

1.85

0.28

0.22

0.2

Domestic SS*2 Emissions by Fiscal Year

(t)

2.0

0

0.49

0.4

0.2

2016 2017 2018 2019 2020 2021 2022

(FY)

0.5

0.4

0.00

Overseas

0.58

0.6

0.6

0.01

0

0.95

2016 2017 2018 2019 2020 2021 2022

Domestic Sulfur Oxide Emissions by Fiscal Year

0.8

0.02

1.5

0

Domestic

1.31

1.4

0.02

Overseas(FY)

Domestic Nitrogen Oxide Emissions by Fiscal Year

0.03

0

20
2016 2017 2018 2019 2020 2021 2022

Domestic

0.04

65.9 65.9
43.6

60
60

(FY)

(t)

2,703

3,000

2019

120

4,070 4,153
3,775
3,588

4,896

Chemical Emissions by Fiscal Year

(t)

4,000

120

Domestic

5,177

Waste Emissions by Fiscal Year
5,000

133 141

0

4,912

(FY)

*2 SS (Suspended substance): Particles that have diameters of two millimeters or less and which are floatingin water

0

0.79

0.68

0.56

0.61

0.56

0.63 0.67

2016 2017 2018 2019 2020 2021 2022

(FY)

*3 n-hex (Normal Hexane Extractable Substance Content)
Substances extracted from water with the chemicaln-hexane, such as oils and detergents that are difficult
to volatilize.

Integrated Report 2023

47

Sustainability Management of SHIBAURA MACHINE

Discussion among the Chairman and Outside Directors

Kiyoshi Sato

Yukio Iimura

Chisa Hayakawa

Mr. Sato has served as president and CEO and vicechairman of the Board of Tokyo Electron Limited. He
has been an outside director of the Company sinceJune 2017. Mr. Sato currently chairs the Nomination
Advisory Committee and is a member of theRemuneration Advisory Committee.

Previous positions include general manager of the
Headquarters of Engineering Division, as well as
chairman and CEO of the Company. Mr. Iimura was
appointed chairman in 2017. He has also chaired
the Japan Machine Tool Builders’ Association, towhich he has served as senior advisor since 2021.
Mr. Iimura is a member of the Nomination andRemuneration advisory committees.

Ms. Hayakawa’s previous positions include manager of theInvestor Relations Group and general manager of the
Financial & Accounting Department of Calbee, Inc. Since
2023, she has served as executive officer and CFO, Asia
Oceania Region, of Calbee. Ms. Hayakawa is a certified tax
accountant and a securities analyst (CMA). Since June
2020, she has served as an outside director of the Company
and is a member of the Nomination Advisory Committee.

Outside director

Chairman

Outside director

Discussion Among the Chairman andOutside Directors
This section features a frank exchange of opinions concerning SHIBAURA MACHINE’s corporate culture,

management plans, issues to be resolved, and dialogue with the stock market among the Company’s chairman,
Yukio Iimura, and outside directors Kiyoshi Sato and Chisa Hayakawa.

SHIBAURA MACHINE’s Corporate Culture

Sato When I was appointed outside director in June 2017, I
read about the Company’s history. I learned about the founder,
Kametaro Fujishima, who strove tirelessly toward the goal of
making machine tools domestically in Japan and eventually
succeeded in creating world-class products that could be
introduced to the rest of the world. This story resonated with
me. Although my background is in a different type of product—
semiconductor manufacturing equipment—I am very familiar
with taking on global challenges through Japanese craftsmanship. I believe that the passion for manufacturing and thesense of mission to contribute to the development of coreindustries are part of the underlying corporate culture that hascontinued to flow through SHIBAURA MACHINE during
its long history.
Hayakawa I can certainly sense the Company’s strong determination and pride in the technological expertise and manufacturing capabilities it has amassed through tackling all sorts

48

Integrated Report 2023

of machinery-making challenges. It is possibility to see theCompany’s potential to create products that can help solve
future societal issues, including environmental problems.
Sato Over its long history, the Company has amassed
unique strengths, but some issues have accumulated as well.
Continuing with hidebound work practices can become inefficient as the operating environment changes. At the same time,enacting change is difficult and time-consuming whenconventional practices have become deeply rooted within theorganization. SHIBAURA MACHINE has faced just this sortof challenge.

Hayakawa When speaking with employees, it is clear thatmany identify as craftspeople and have the distinctively calmand serious demeanor often associated with that ilk. That may
be considered a defining characteristic of the Company’s culture. It seems to be, too, that a strong desire to create good
products may have a flip side—a lack of desire to focus on
profits.
Iimura You have both raised some salient points. There haveoften been occasions where we would enthusiastically take on
the challenge of building complex and sophisticated specialized machinery, only to find that the orders did not generate
profit. While the Company still has a tendency to rely on its
ability to create and desire to contribute to core industries
without giving due consideration to profits, we are consciousof changing this mindset. Honestly speaking, however, it is difficult to break away from deeply ingrained practices that haveexisted for over 80 years under a specific major shareholder.

Medium-Term Management Plan
“Management Reform Plan”

Sato Toshiba was that major shareholder, and when the
Company left the Toshiba Group in 2017, rather than Toshiba
putting your shares on the market, you purchased thoseshares, right?
Iimura Yes. After conducting a share buyback in 2017 andrelaunching as an independent machinery manufacturer, we
recognized the need to clearly demonstrate our path forward
to the stock market. As a result, we launched a new mediumterm management plan, starting in fiscal 2019. The feedback
we received from our outside directors, including Mr. Sato,suggested that we should make the plan more effective andestablish KPIs that were easier for shareholders to understand.
We took this feedback into consideration and we refined ourapproach and developed the current medium-term management plan, the Management Reform Plan, a medium-term
management plan ending in fiscal 2023.
Sato The Company had been consistently falling short of thenumerical targets set in the medium-term management plans.
It was hard to imagine how the stock market would agree positively to the Company falling far short of its targets in its first

medium-term plan as an independent company. I remember
being harshly criticized from the outside directors.
Hayakawa Despite the prolonged impact of the COVID-19
pandemic, as well as dramatic changes in the internationalsituation, depreciation of the yen, and soaring raw material
prices, the Company has outlined a path to reach the goals set
in the final fiscal year of the Management Reform Plan. While
we benefited from the tailwind of rising demand for extrusion
machines for lithium-ion battery separator film, it is also clearthat the Company is becoming more resilient and flexible inadapting to the rapidly changing business environment.
Sato That’s right. At the start of the Management Reform
Plan, the Company set its numerical targets as an operating
margin of 8.0% and ROE of 8.5%. Shortly after the plan’s
launch, the Company saw one change after another in its operating environment. I give high marks to the operations thatenabled the Company to overcome those challenges. I am very
pleased that the Company is on track to meet the expectationsof the shareholders who have supported our plan.
Iimura As you mentioned, in the past, we thought a rollingplan that was revised as the business environment changed
but the Management Reform Plan is different, in that we arepositioning its initial targets as commitments. We have also
asked the executive team to commit to our targets for fiscal
2023, the plan’s final year.
Hayakawa While growth in demand for lithium-ion battery
separator film production lines is currently in the limelight, atthe same time, we are working to ensure that overall improvements to SHIBAURA MACHINE’s structure are on track. At Board
meetings, we receive monthly progress reports on KPIs fromthe executive team. The Company has also implemented a
remuneration system that is closely linked to the targets set in
the Management Reform Plan, which I think reflects its determination to meet those goals.

Introducing a Stock Compensation Plan
to Better Link Pay to the Company’s
Consolidated Operating Performance

Iimura In the past, we followed our parent company’s policy,
where remuneration was not closely linked to performance.
However, we introduced a new remuneration system in 2020,
when we launched the Management Reform Plan. This system
divides compensation into three components: basic compensation, performance-linked compensation in the form of cash
bonuses, and stock compensation. The performance-linked
cash bonuses align with the performance targets of theIntegrated Report 2023

49

Sustainability Management of SHIBAURA MACHINE

Discussion among the Chairman and Outside Directors

Management Reform Plan: the operating margin and ROE.
Stock compensation has been broken down into service-based
restricted stock (compensation paid in stock in return for ongoing service) and performance-based restricted stock (stock paid
as compensation if the targets of the Management Reform Planare met in its final year). The latter type of remuneration will not
be paid if the Company falls short of its targets by even 0.1%.
Changes to the remuneration system require the approval of
the Remuneration Advisory Committee, of which Mr. Sato is amember. I recall the proposal being repeatedly sent back andre-submitted to the committee after being told that the plan
was still too “loose” and that it needed to be tightened up.
Sato Ms. Hayakawa referred to a “lack of greed to focus on
profits.” To address this issue and align the Company withshareholders’ interests, I am certain that introducing a performance-based remuneration system for executives is a goodidea. Without a doubt, this system will contribute towardachieving the goals set forth in the Management Reform Plan. I
hope to see operating performance and compensation rising
together in a virtuous cycle.

Issues that Need to Be Resolved to Makea Leap Forward

Iimura While I appreciate the kind words from both of you, I
also recognize that there are still numerous challenges to beaddressed. Focusing our management resources on lithiumion battery separator film production lines has yielded positive
results, but we still need to resolve underlying issues in otherin-house companies and products. For example, althoughmachine tools were profitable in fiscal 2022, the level of profitability has been extremely low. Additionally, as the market
transitions from vehicles with internal combustion engines toelectric vehicles, we need to explore new business opportunities for die casting machines. As our outside directors have frequently pointed out, we must also address the crucial task ofdeciding on our next pillar of business following lithium-ion
battery separator film production lines.
Hayakawa Chairman Iimura frequently comments that after
seeds are sown, it takes more than 20 years for them to bear

fruit, and that the Company’s success in lithium-ion battery
separator film production lines is no mere fluke. However, initial plans did not anticipate the current magnitude of thegrowth in demand for these machines. If the structural reforms
outlined in the Management Reform Plan had progressed as
expected, the operating margin for the final fiscal year might
have been significantly higher than the 8% range.
Sato Previously, I served as president of a company thatmade semiconductor manufacturing equipment. Because weeffectively had just a single product, performance was constantly affected by the supply and demand swings of the “silicon cycle.” In contrast, SHIBAURA MACHINE has a diverse
product portfolio that helps to mitigate the volatility of performance in response to changes in the business environmentand serves as the foundation for long-term sustainability. If theCompany had focused excessively on selection and concentration, it would not have been able to quickly establish a production system for lithium-ion battery separator film productionlines. That said, with the market for injection molding
machines having been lackluster for more than six months, theCompany cannot justify leaving business in this area
untouched. The Company needs to constantly monitor suchbusinesses and be strict in its approach.
Iimura We are also a manufacturer of industrial machinery.
One of the goals of the Management Reform Plan is to increase
the mobility of our management resources by breaking down
barriers between machines. This should help us minimize theinefficiencies caused by having diverse models and, conversely, maximize the benefits of the plan.

What We Should Focus on WhenInteracting with the Stock Market

Hayakawa From the perspective of investor relations, which
is an area I have been involved in for many years, it seems theCompany is not enough of explaining how a diverse businessportfolio can be effective in making corporate value more sustainable. For example, I believe the Company could garnermore investor support for its long-term growth story if it would

50

Integrated Report 2023

clearly explain the strengths of each business it has built up
during its long history, such as talented personnel and technologies, as well as their future potential.
Sato Focusing on a scenario that highlights investing in andfurther enhancing the Company’s strengths over the medium
to long term can increase market expectations and confidence
in the Company’s ability to further improve profitability and astable cash flow. To enhance confidence in this way, theCompany will need to continue strengthening its governance.
One aspect of governance is boosting the efficiency of management. In this area, I can offer my insights based on myexperience in a semiconductor manufacturing equipment
company. Another aspect of governance is a commitment tobalancing corporate sustainability with initiatives such as contributing to climate change mitigation. This is an area where
Japanese companies excel, and the Company can successfully
achieve this balance through responsible management.
However, it is clear that expectations toward companies are
increasing, particularly for formal initiatives to address ESG
disclosure.
Hayakawa Certainly, comprehensively responding to formal
requests from outside a company can boost its market evaluation, but such moves need to be accompanied by effectiveness.
I think the Company should focus on what is truly important inenhancing corporate value.
Iimura Based on our “Environmental Action Plan,” we have
set long-term goals for fiscal 2030, such as reducing CO2 emissions. It would be counterproductive for us to spend money
trying to boost our third-party evaluations if profitability suffers as a result. We have received suggestions from outside
directors that we should respond properly to requests thatneed to be addressed, but we have not received any suggestions on what we should pursue formally.

Looking to the Next Medium-Term
Management Plan

Sato As you say, if the Company tries to do more than it has
the global capacity to achieve, operational efficiency will inevitably decline. I believe the Company should prioritize allocating resources so it can reduce GHG emissions through its coreproducts. I understand that "contributing to a decarbonizedsociety" will be a major theme of the next medium-term management plan. As global competition increases, I think theCompany needs to become even more agile and accelerate
both management and manufacturing. By doing so, I believe it
is possible for SHIBAURA MACHINE to achieve an operating
margin of 10% and become one of Japan’s leading companies.
Hayakawa In the next medium-term management plan, I
expect the goals to be set even higher. I believe SHIBAURA
MACHINE has the potential to improve efficiency and growth at
the same time. As market capitalization increases, the Company
will attract interest from new investors. Accordingly, I hope theCompany will foster a cycle of engaging with these investors
and enhancing its corporate value.
Iimura Ms. Hayakawa, I greatly appreciate your insightfuladvice. Showcasing your expertise as an investor relations
professional, you consistently provide accurate guidance withreal-life examples regarding communication with investors.
Mr. Sato, I also value your extremely helpful opinions, leveraging your extensive experience in the rapidly changing world ofsemiconductor manufacturing equipment to maximize profits.
In addition to these two, our other outside directors also provide valuable insights based on their respective backgrounds,
contributing crucial opinions during our Board meetings. We
sincerely express our gratitude to them. Your feedback has
helped us realize there are still areas where the Company can
improve, particularly when it comes to our focus on profitability. We deeply appreciate the insights and opinions of ouroutside directors, and we will continue to listen to them attentively as we strive to bring about a true transformation for
Shibaura Machine. We appreciate your continued guidance.
Thank you very much for today.

Integrated Report 2023

51

Sustainability Management of SHIBAURA MACHINESHIBAURA MACHINE’s Corporate GovernanceCorporate Governance Reforms

We split off from the Toshiba Group in March 2017. After that point, we adopted a “company with committees” governance structure that includes an Audit and Supervisory Committee. We continue to further strengthen corporate governance, such as byincreasing the number of outside directors.
Composition of
the Board of
Directors

2

OutsideSeparatedbusinessmanagement
and execution
Outside directors

2013

Introduced an executive officer system

2013

Appointed outside directors

Directorcompensation

2015
2015

2018

Increased number ofoutside directors to
one third of the total

Established a Nomination Advisory
Committee
Established a Remuneration
Advisory Committee

Inside5

Fiscal 2022

(Including two outside directors
who are Audit and Supervisory
Committee members)

2013

Committees(advisorycommittees tothe Board of
Directors)

7

OutsideInside6

2016(Including one director who is
an Audit and Supervisory
Committee member)

2023

2019

Moved from being a company with a board of corporate auditors to a “company withcommittees” governance structure that includes an Audit and Supervisory Committee

2019

Made outside directors the majority
2020

Appointed a female outside director

2020

Appointed an outside director to chair the
Nomination Advisory Committee

2020

Introduced a stock compensation plan

2020

Appointed an outside director to chair theRemuneration Advisory Committee

To learn about our basic approach to corporate governance, see our Corporate Governance Report. (Japanese only)https://www.shibaura-machine.co.jp/jp/ir/library/cg/

Corporate Governance System

To ensure effective corporate governance, we have adopted a“company with committees” governance structure that
includes an Audit and Supervisory Committee. Three Audit
and Supervisory Committee members, of whom two are outside members and one is a full-time member, coordinate with
the Internal Auditing Department, which conducts day-to-day
audits of internal operations; attend the Management Strategy
Meeting, the Management Meeting, and other important

meetings; and state opinions as required. In addition, sevenoutside directors, who constitute a majority on the Board of
Directors, utilize their expertise and business experience toensure the rationality of the Company’s decision-making andenhance the supervision of directors’ execution of duties.
Further, the executive officer system clearly separates management oversight from business execution, thereby accelerating and increasing the efficiency of decision-making.

1 Board of Directors
The Company’s Board of Directors comprises nine directors (excluding directors who are Audit and Supervisory Committee members),of whom five are outside directors, and three directors who are Audit
and Supervisory Committee members, of whom two are outside
directors. As well as regular monthly meetings of the Board of
Directors, extraordinary Board meetings are convened as required. In
addition to deliberating, making decisions, and reporting on the stipulations of statutory laws and regulations and the Company’s Articles
of Incorporation as well as important business matters, the Board of
Directors develops the internal control system and ensures its
effectiveness.

Furthermore, the Company has designated the seven aforementioned outside directors as independent officers.
Also, the Nomination Advisory and Remuneration Advisory committees have been established as advisory committees to the Boardof Directors. The former deliberates on matters concerning theCompany’s directors and other important personnel matters, while
the latter deliberates on the remuneration of the Company’s directors, excluding directors who are Audit and Supervisory Committee
members, with both committees reporting their findings to theBoard of Directors. Further, both of these committees are chaired byoutside officers.

52

Integrated Report 2023

E

2 Management Strategy and Management Meetings
The Management Strategy and Management meetings are both held
monthly to deliberate, report on, and determine management policies and strategies as well as to deliberate, make decisions, andreport on important matters related to business execution.

A udit and Supervisory Committee (Progress of Measures toStrengthen Audit Functions)
The Company’s Audit and Supervisory Committee has three members, of whom two are outside directors and one is a full-timemember. By attending meetings of the Board of Directors and otherimportant meetings, Audit and Supervisory Committee members,
who have voting rights, are able to audit and supervise the execution of duties by directors. In addition, the Audit and Supervisory
Committee coordinates with the accounting auditor and theInternal Auditing Department to audit business management.

Board ofDirectors

Appoint / Dismiss

Supervise

Executive Officers
Business / Staff Divisions

Accounting Auditor

Consult

SupportNomination
Advisory Committee

Remuneration
Advisory Committee

Audit and Supervisory
Committee Office

Cooperate

Audit

Instruct

ReportConduct
internal audit

ReportAudit

Instruct

Corporate Auditing
Department

Appoint / Dismiss

Cooperate

Reply

Cooperate

Audit /
Supervise

ReportInstruct / Direct

Report / State opinions

Audit and Supervisory Committee

Appoint /Dismiss

Chairman of theBoard / President(Chief Executive Officer)

Audit

Supervise

Appoint / Dismiss /Supervise

5 Accounting Auditor and Lawyer
The Company has engaged Ernst & Young ShinNihon LLC to conduct
fair, appropriate accounting audits. In addition, the Company
receives timely advice from a consulting lawyer when legal decisions
are required.

General Meeting of Shareholders

Appoint / Dismiss

G

4 Internal Auditing Department
The Internal Auditing Department verifies the legality and appropriateness of business activities, reports audit results to the representative directors, and provides guidance if there are any mattersrequiring improvement. Further, the Internal Auditing Department
comprises 12 members and is under the direct control of therepresentative directors. The Internal Auditing Department sharesinformation with the Audit and Supervisory Committee and theaccounting auditor in a timely manner, submits reports to the Audit
and Supervisory Committee as required, and promotes mutual
coordination with the committee.

3Corporate Governance System

S

ReportBusiness / Staff Divisions Led by Affiliates
Instruct

ReportAffiliates (Japanese / Overseas Offices)

Policy on the Appointment of Directors

At present, the Company’s Board of Directors comprises nine
directors (maximum of 12 directors), excluding directors who
are Audit and Supervisory Committee members, and three
directors who are Audit and Supervisory Committee members(maximum of five directors). Seven of the directors are outside
directors, and two of the outside directors are Audit andSupervisory Committee members.
Further, with respect to the skills that are particularly important for the achievement of the current medium-term management plan, in addition to conventional abilities in the areas ofbusiness management, sales, and technological specialization,
the Company emphasizes the appointment of directors who
have financial expertise and an ability to communicate effectively with stock markets. Moreover, to ensure sound,sustainable growth while increasing the competitiveness of its
businesses, the Company has sought a balance of knowledge,
experience, and ability in the overall composition of the Boardof Directors. Accordingly, the Company has appointed a range ofexperts as outside directors, including individuals with extensive
experience in corporate management, attorneys with expertisein compliance and corporate legal affairs, a certified public
accountant with expertise in financial accounting, and specialists in investor relations.
In addition, the Company has established the Nomination
Advisory Committee, which is chaired by an outside director,
and the majority of its members are outside officers. This committee deliberates on the appointment of directors and reports
its findings to the Board of Directors.

Integrated Report 2023

53

Sustainability Management of SHIBAURA MACHINE

Reasons for the Appointment of Outside Directors
Name

Years ofService

Attendance at Board of
Directors’ Meetings

Kiyoshi Sato

Independent

6

15 of 15 (100%)

Seigo Iwasaki

Independent

5

15 of 15 (100%)

Hiroshi Inoue

Independent

4

15 of 15 (100%)

Kazumine Terawaki

Independent

4

15 of 15 (100%)

Chisa Hayakawa

Independent3

15 of 15 (100%)

Akifumi Imamura(Audit andSupervisory
Committee Member)

Independent2

15 of 15 (100%)

Independent

Newly
appointed

ー

Shigeo Ogi(Audit andSupervisory
Committee member)

Reasons for Appointment

Kiyoshi Sato’s character and expertise are impressive. He was appointed as an outside director and an
independent officer based on the expectation that he will ensure duties are being executed appropriately by providing recommendations and proposals in light of the extensive experience and expertise
he gained while serving as an officer for other companies, including executive positions in businesses
overseas.

Seigo Iwasaki’s character and expertise are impressive. He was appointed as an outside director andan independent officer based on the expectation that he will ensure duties are being executed appropriately by providing recommendations and proposals in light of the extensive experience and expertise he gained while serving as an officer for other companies.
Hiroshi Inoue’s character and expertise are impressive. He was appointed as an outside director andan independent officer based on the expectation that he will ensure duties are being executed appropriately by providing recommendations and proposals in light of the extensive experience and expertise he gained while serving as an officer for other companies.

Kazumine Terawaki’s character and expertise are impressive. He was appointed as an outside director
and an independent officer based on the expectation that he will ensure duties are being executed
appropriately by providing recommendations and proposals in light of the extensive experience andexpertise he gained while serving as a public prosecutor, an attorney and an outside officer for othercompanies.
Chisa Hayakawa’s character and expertise are impressive. She was appointed as an outside director
and an independent officer based on the expectation that she will ensure duties are being executed
appropriately by providing recommendations and proposals in light of the extensive experience andexpertise she gained through performance of a wide range of operations in her capacity as a certified
tax accountant and a securities analyst.

Akifumi Imamura’s character and expertise are impressive. He was appointed as an outside director
who is an Audit and Supervisory Committee member and an independent officer because it is anticipated that he will provide a broad range of audit-related opinions that reflect the extensive experienceand expertise he gained while serving as an attorney and as an outside officer for other companies.
Shigeo Ogi has an impressive character and knowledge, and we expect that he will be able to put his
extensive experience and knowledge gained as a certified public accountant and an outside officer forother companies to good use. Accordingly, we have appointed him as an outside director who is anindependent officer.

Compositions of the Board of Directors and the Nomination and Remuneration Advisory Committee, as Well as Meetings Held and Attendance
Name

Position

Yukio Iimura

ChairmanAkiyoshi Kobayashi

Director, Executive Operating Officer

Shigetomo Sakamoto
Hiroaki Ota

Kiyoshi Sato

Seigo Iwasaki
Hiroshi Inoue

—
—

—

—

(Chair) 100% (2/2 times)

Outside Director

100％ (1/1 times)

100％ (2/2 times)

Outside Director

Hiroshi Takahashi—

Outside Director

100％Outside Director(Audit and Supervisory Committee Member)

100％ (2/2 times)

Outside Director(Audit and Supervisory Committee Member)

100％ (3/3 times)—

Outside Director

Director(Full-Time Audit and Supervisory Committee Member)

Shigeo Ogi—

Director, Executive Operating Officer
Chief Financial Officer,

Outside Director

Akifumi Imamura

Remuneration Advisory Committee

100％ (2/2 times)

President, Chief Executive Officer,
Chief Operating Officer

Kazumine Terawaki
Chisa Hayakawa

Nomination Advisory Committee—(1/1 time)—(Chair)100% (3/3 times)

100％ (3/3 times)—

100％ (3/3 times)————

Note: In fiscal 2022, Chisa Hayakawa replaced Hiroshi Inoue on the Nomination Advisory Committee.

Agenda Items

Nomination Advisory Committee

1. Personnel matters related to the Company’s directors
2. Personnel matters related to the Company’s representative
directors and executive directors
3. Plan for training candidates for the position of director
4. P ersonnel matters related to the Company’s executive officers
5. P ersonnel matters related to the Company’s the chief executive
officer, the chief operating officer, and the chief financial officer
6. Establishment, revision, or abolition of important rules andregulations related to each of the preceding items
7. Other important personnel matters on which the Board of
Directors seeks advice

54

Integrated Report 2023

Remuneration Advisory Committee

1. The Company’s system for the compensation of directors
2. Specific amounts of compensation for individual directorsof the Company, excluding directors who are Audit andSupervisory Committee members
3. Establishment, revision, or abolition of important rules
and regulations related to each of the preceding items
4. Other important director compensation matters on which
the Board of Directors seeks advice

E

Matrix of Directors’ Skills
Name
Yukio Iimura

Position
Chairman

GenderPresident, Chief Executive Officer,
Chief Operating Officer

MaleHiroaki Ota

Director, Executive Operating Officer,
Chief Financial Officer

MaleOutside Director

Male

Outside Director

Male

Outside Director

Male

Outside Director

Male

Outside Director

FemaleKiyoshiSato

Seigo
Iwasaki
Hiroshi
Inoue

Kazumine
Terawaki

Chisa
Hayakawa
HiroshiTakahashi
AkifumiImamuraShigeo Ogi

Director, Executive Operating Officer

Director (Full-Time Audit andSupervisory Committee Member)

Outside Director (Audit and Supervisory
Committee Member)

Outside Director (Audit and Supervisory
Committee Member)

Corporate
management

Male

Shigetomo
Sakamoto
Akiyoshi
Kobayashi

Areas of Expertise and Experience

Internal
Legal affairs / Finance /control /Compliance Accounting
Governance

M&A /Alliances

Investor
relations /Stakeholder
relations

S

Manufacturing /Development

G

MarketingInternational
experience

Male

Male
Male
Male

Note: The content of the above table does not represent all of the knowledge, experience, and abilities possessed by directors.

Policy on Training Directors

To enhance the knowledge and abilities of its directors andenable them to fulfill their roles and functions, the Company
implements the following training programs. We organize
external training specifically designed for newly appointed
directors. We also organize external training for newly

Shares Held for Purposes Other Than Pure Investment

We believe that cooperative relationships with a range ofcompanies are essential for the expansion and sustained
development of our businesses. The Company’s policy is tohold shares that are deemed strategically necessary basedon comprehensive consideration of importance in terms ofbusiness strategy as well as business relationships withbusiness partners from the perspective of corporate valueenhancement over the medium to long term. Annually, theBoard of Directors verifies the appropriateness of holding
individual shares held for purposes other than pure investment by comprehensively considering such factors as theappointed presidents. Further, we provide outside directors
with opportunities to deepen their understanding of theCompany’s business, finances, and organization. In addition,
training is provided for directors as needed.

purpose of holding shares, the benefits associated withholding shares, risks, and cost of capital.
As a result of such verification, in fiscal 2022 SHIBAURA
MACHINE disposed of all shares of one company and someshares in another company. Also, in exercising our voting
rights, we emphasize the verification of each agenda itemwith respect to the investee’s enhancement of corporate
value over the medium to long term and its stance onshareholder returns, corporate governance, and social
responsibility.

Integrated Report 2023

55

Sustainability Management of SHIBAURA MACHINE

Compensation of Directors

Basic Policies in Relation to the Stock Compensation Plan
The stock compensation plan provides stock compensation to eligible directors— namely, directors other than outside directors ordirectors who are Audit and Supervisory Committee members—toincrease the linkage between the compensation of eligible directors and the medium- to long-term performance of the Company.
It also promotes a shared interest among eligible directors andshareholders, with the aim of providing an incentive to achieve theperformance targets of the medium-term management plan, theManagement Reform Plan, and sustainably enhance corporate
value. The basic policies in relation to the stock compensation
plan are as follows.

(1)	With a view to increasing corporate value over the medium tolong term by transforming into a highly profitable company andsustaining growth, the Company shall provide fixed compensation, in the form of basic compensation, as well as variable
compensation that establishes a sound incentive through the
combination in appropriate proportions of (i) stockbased compensation subject to continuous service, (ii) cash bonuses
linked to short-term performance, and (iii) stock compensation
linked to medium- to long-term performance.
(2)	A strong incentive to achieve performance targets shall beestablished by linking the Company’s medium-term management plan with stock compensation.
(3)	To ensure that directors share with shareholders the benefits
and risks of share price fluctuations, the proportion of stockcompensation shall be increased, and directors shall be
encouraged to hold more shares.
Outside directors: To ensure their independence, all outside directors receive basic compensation but do not receive performancelinked compensation.
Directors who are Audit and Supervisory Committee members:
Such directors only receive basic compensation given their role,
which primarily entails conducting legal compliance audits.

Details of the Stock Compensation Plan(1)	Service-Based Restricted Stock
The issuance and disposal of shares of the common stock of theCompany is conducted every year, in principle, through servicebased restricted stock. Monetary compensation claims are granted
Compensation of Directors in Fiscal 2022
Total Compensation(¥ Million)

to eligible directors based on resolutions of the Company’s Boardof Directors. All said monetary compensation claims are required
to be contributed in kind to the Company as property contributedin kind. Restricted stock is granted based on the number of sharesequivalent to the figure that results from dividing said monetarycompensation claims by a price. This price is determined by the
Board of Directors based on the closing price of the Company’s
shares of common stock at the Tokyo Stock Exchange on the business day preceding the day of the resolution of the Board of
Directors but within a scope of avoiding prices that are unduly
favorable to eligible directors. If trading was not conducted on thepreceding day, the closing price of the most recent business day isused. With respect to the issuance and disposal of shares of thecommon stock of the Company, the Company and eligible directors conclude a service-based restricted stock award agreement.

(2)	Performance-Based Restricted Stock
The performance evaluation period of performance-based
restricted stock is the medium-term management plan’s period,
which is stipulated by the Company’s Board of Directors. After the
performance evaluation period, monetary compensation claims
are granted to eligible directors based on the multiplication of twovalues: the compensation amounts established for the positions ofeligible directors and the degrees of achievement in relation to
performance indicators predetermined by the Board of Directors.
All said monetary compensation claims are required to be contributed in kind to the Company as property contributed in kind.
Restricted stock is granted based on the number of shares equivalent to the figure that results from dividing said monetary compensation claims by a price. This price is determined by the Board of
Directors based on the closing price of the Company’s shares ofcommon stock at the Tokyo Stock Exchange on the business day
preceding the day of the resolution of the Board of Directors but
within a scope avoiding prices that are unduly favorable to eligible
directors. If trading was not conducted on the preceding day, theclosing price of the most recent business day is used. The issuanceand disposal of shares of the common stock of the Company isconducted, in principle, after the end of the last fiscal year of theperformance evaluation period. With respect to the issuance anddisposal of these shares, the Company and eligible directors conclude a performance-based restricted stock award agreement.

Total Compensation by Type (¥ Million)

Service-Based
Restricted Stock
Compensation
22

9

（—）

（—）

（—）

（5）

（19）

（—）

（—）

（—）

（2）

（69）

（—）

（—）

（—）

（7）

Bonuses

221

140

58

(Of Whom, Outside Directors)

（50）

（50）

(Of Whom, Outside Directors)（19）(Of Whom, Outside Directors)（69）

Directors (excluding Audit andSupervisory Committee Members)
Directors (Audit and Supervisory
Committee Members)
Total

56

Integrated Report 2023

37

259

Directors(Persons)

Performance-Based
Restricted Stock
Compensation

Basic Compensation

37

178

—

58

—

—

—

—

22

3

12

E

Makeup of remuneration for directors (excluding directors who are
Audit and Supervisory Committee members and outside directors)(The fiscal year immediately following the conclusion of the medium-term
management plan)*1 Service-based restricted stock*2 Performance-based restricted stock

Internal Controls

Internal Control System
Based on our Corporate Principles, we believe that establishingand operating a system for proper business execution is an important management responsibility. Accordingly, the Group has set
out the Fundamental Policy on Internal Controls and establishedcapabilities to ensure the appropriateness of operations.
In addition, the internal control system is strengthened andenhanced by the Internal Auditing Department and corporate
departments, which independently conduct internal audits to confirm that internal controls are functioning properly.
Governance of the GroupThe SHIBAURA MACHINE Group has established the SHIBAURA
MACHINE Group Basic Governance Policy with the aim of maximizing corporate value by building an appropriate internal control
system for the Group, heightening the efficiency of Group management, and strengthening Group management capabilities whileadvancing the management of risks and compliance. In accordance with this policy, the governance of the Group is being
strengthened and improved.
Management of Risk and ComplianceTo guide its daily business activities and to position human life,
safety, legal compliance, adherence to social norms, and soundEffectiveness Evaluation of the Board of Directors

S

Stock
compensation
Basic compensation

40%

Fixed compensation: 40%

Servicebased*1

10%

Performance-linked
compensation(cash bonuses)

35%

G

Stock
compensation
Performancebased*2

Variable compensation: 60%

15%ethics as first priorities, the SHIBAURA MACHINE Group has established its Corporate Principles and the Code of Conduct. In addition, we have set forth the Risk and Compliance Management
Rules with a view to building, maintaining, and promoting a risk
and compliance management system that actively controls risks
inherent in business activities and ensures highly transparent business management.
Also, we have introduced systems that enable the collection ofsensitive information on risks that would otherwise be challenging
to report through regular channels. For example, we have established a whistleblower system that Company employees, Group
company employees, and temporary employees can use as well asa supply chain whistleblower system for our business partners.

System for the Management of Risks and Compliance
The specific elements of the SHIBAURA MACHINE Group’s system forthe management of risks and compliance are a risk management
officer and the Risk Management Committee, which meets regularly.
In the course of their daily management activities, in-housecompanies, centers, and corporate departments conduct
prognostication, prevention, and self-inspection activities inrelation to risks.

The Company conducts evaluations of the effectiveness of theBoard of Directors with the aim of improving how it functions and,ultimately, enhancing corporate value.
In light of recommendations received from external organizations, we conducted an effectiveness evaluation in the mannershown in the chart below.
In April 2023, a questionnaire was issued to all directors whocomprised the Board of Directors at the time. The anonymity of the

responses was ensured by having them sent directly to an externalorganization. Based on aggregated results reported by the externalorganization, analysis, discussion, and evaluation were conducted
at a meeting of the Board of Directors held in May 2023.
A summary of the results of the aforementioned activities is as
stated below.

Results of Effectiveness Evaluation

Ongoing Tasks

We believe that the Board of Directors is effective on thewhole. Generally positive evaluations were received withrespect to the number of members comprising the Boardof Directors, the number of outside directors relative to
inside directors, prior notification of the schedules andagenda items of meetings of the Board of Directors, ensuring the time necessary for deliberation on the Board of
Directors, communication between inside directors andoutside directors, understanding of agenda items inadvance, coordination among outside directors or Audit
and Supervisory Committee members and the Internal
Auditing Department, and the performance of supervisory
functions by outside directors.

Although the evaluation of the Board of Directors was positive with respect to the provision of feedback on dialogue
with shareholders and investors, stimulating discussion
on ESG and sustainability, further deepening discussion
on follow-up to the management plan and resolution ofissues were recognized as challenges for the future.

Integrated Report 2023

57

Sustainability Management of SHIBAURA MACHINE
Board Members (As of June 26, 2023)

Yukio Iimura
Chairman

Shigetomo Sakamoto
President
Chief Executive Officer
Chief Operating Officer

Akiyoshi Kobayashi

Director and Executive
Operating Officer
Security and Regulation Control
Division General Manager,
Sagami Plant General Manager
In charge of R&D center, andOverall responsibility for
quality assurance

Hiroaki Ota

Director, Executive Operating
Officer
Chief Financial Officer
In charge of Corporate Strategic
Planning Division andin charge of Corporate
Administration Division

Kiyoshi Sato
Outside Director

Seigo Iwasaki
Outside Director

58

Integrated Report 2023

Apr. 1980 Joined the Company
Oct. 2000 Injection Molding Machine Engineering Department Senior Manager of the Company
Oct. 2004 Micro-Pattern Imprinting Device Division General Manager of the Company
June 2006 Director of the Company
June 2008 Headquarters of Engineering Division General Manager of the Company
June 2009 President of the Company
June 2013 President and Chief Executive Officer of the Company
Apr. 2017 Chairman (present position) and Chief Executive Officer of the Company
May 2017 Chairman of Japan Machine Tool Builders’ Association (general incorporated association)
May 2021	Senior Advisor of Japan Machine Tool Builders’ Association (general incorporated association) (present position)

Apr. 1983 Joined the Company
June 2006	Corporate Planning Division General Manager of the Company
June 2009 Director of the Company
June 2010	Tokyo Head Office General Manager of the Company
Oct. 2010	Global Corporate Strategy Division General Manager of the Company
June 2013	Director and Managing Executive Officer, Component Business Unit General Manager, andCorporate Planning Division General Manager of the Company
June 2016	Representative Director and Executive Operating Officer, Compliance Division General Manager, Security andRegulation Control Division General Manager, Corporate Strategic Planning Division General Manager,
Sagami Plant General Manager, and RMO of the Company
Apr. 2017	Machine Tools Business Unit General Manager and Gotemba Plant General Manager of the Company
June 2017	In charge of Corporate Strategic Planning Division and in charge of TQM Promotion Division of the Company
June 2019	Vice President and Operating Officer of the Company
Feb. 2020	President and Chief Operating Officer of the Company (present position)
Apr. 2020	Security and Regulation Control Division General Manager of the Company
June 2021	Chief Executive Officer of the Company (present position)
Apr. 1985 Joined the Company
Oct. 2004	Extrusion Machine Engineering Department Senior Manager of the Company
June 2013	Extrusion Machine Division General Manager of the Company
June 2014	Executive Officer, Advanced Machinery Business Unit Deputy General Manager of the Company
June 2015	Director and Executive Officer, Advanced Machinery Business Unit General Manager of the Company
June 2016	In charge of Control Systems Division of the Company
Apr. 2017	Molding Machinery Business Unit General Manager, Administration Division General Manager, andSagami Plant General Manager of the Company
June 2018	Director and Senior Managing Executive Officer, Corporate Strategic Planning Division General Manager, andEngineering and Quality Division General Manager of the Company
June 2019	Director and Executive Operating Officer (present position) and in charge of Control Systems Division of the Company
Feb. 2020	Compliance Division General Manager of the Company
Apr. 2020	Sagami Plant General Manager (present position), R&D Center General Manager, in charge of
Administration Division, in charge of System Strategy Division of the Company
June 2021	Security and Regulation Control Division General Manager of the Company (present position)
June 2023	In charge of R&D Center of the Company (present position)
Apr. 1984	Joined Mitsui Bank (currently Sumitomo Mitsui Banking Corporation)
Apr. 2001	Joined Daiwa Securities SMBC Co. Ltd. (currently Daiwa Securities Co. Ltd.)
Feb. 2009	Joined GCA Savvian Corporation (currently Houlihan Lokey, Inc.)
Mar. 2014	Audit and Supervisory Board Member of Mezzanine Corporation
Aug. 2014	Audit and Supervisory Board Member of GCA FAS Co., Ltd. (currently G-FAS Corporation)
Feb. 2015	CFO and Managing Director of GCA Savvian Corporation (currently Houlihan Lokey, Inc.) Director of
GCA Savvian Singapore Private Ltd. (currently Houlihan Lokey Advisers Singapore Private Limited)
Mar. 2015	Director, CFO and Managing Director of GCA Savvian Corporation (currently Houlihan Lokey, Inc.)
Apr. 2017	Managing Director of GCA Corporation (currently Houlihan Lokey, Inc.)
Apr. 2020	Executive Operating Officer of GCA Partners Corporation (currently Houlihan Lokey, Inc.)
June 2020	Director of the Company
Aug. 2020	Director, Chief Financial Officer, Executive Operating Officer, in charge of Corporate Strategic Planning Division(present position)
June 2022	In charge of Corporate Administration Division of the Company (present position)

Apr. 1979 Joined Tokyo Electron Limited
Apr. 2003 Senior Executive, president’s office of Tokyo Electron Limited
June 2003 President and CEO of Tokyo Electron Limited
Apr. 2009 Vice Chairman of the Board of Tokyo Electron Limited
June 2011	Director of Tokyo Electron Limited Chairman of Tokyo Electron America, Inc.
Chairman of Tokyo Electron Europe, Ltd.
Nov. 2013 President of TEL Solar AG
June 2016 Audit and Supervisory Board Member of Tokyo Electron Yamanashi Limited
June 2017 Outside Director of the Company (present position)
June 2019 Outside Director of Mazda Motor Corporation (present position) Outside Director of Inabata & Co., Ltd.

Mar. 1969
July 1988
Mar. 1996
Mar. 2000
Mar. 2001
Mar. 2006
Jan. 2011
May 2014
June 2015
Jan. 2018
June 2018
Mar. 2020

Joined SHIZUOKA GAS Co., Ltd.
General Planning Group Leader of SHIZUOKA GAS Co., Ltd.
Director of SHIZUOKA GAS Co., Ltd.
Managing Director of SHIZUOKA GAS Co., Ltd.
Senior Managing Director of SHIZUOKA GAS Co., Ltd.
Representative Director and President of SHIZUOKA GAS Co., Ltd.
Representative Director and Chairman of SHIZUOKA GAS Co., Ltd.
Outside Director of STAR MICRONICS CO., LTD. (present position)
Outside Director of Murakami Corporation (present position)
Director and Special Adviser of SHIZUOKA GAS Co., Ltd.
Outside Director of the Company (present position)
Special Adviser of SHIZUOKA GAS Co., Ltd. (present position)

Hiroshi Inoue
Outside Director

Kazumine Terawaki
Outside Director

Chisa Hayakawa
Outside Director

Hiroshi Takahashi
Director(Full-Time Audit andSupervisory Committee
Member)Akifumi Imamura
Outside Director(Audit and Supervisory
Committee Member)

Shigeo Ogi

Outside Director(Audit and Supervisory
Committee Member)

Apr. 1963 Joined Tokyo Broadcasting System, Inc.
June 1993 Director of Tokyo Broadcasting System, Inc.
June 1996 Managing Director of Tokyo Broadcasting System, Inc.
June 1997	Senior Managing Director of Tokyo Broadcasting System, Inc.
June 2001	Vice President and Representative Director of Tokyo Broadcasting System, Inc.
June 2002	President and Representative Director of Tokyo Broadcasting System, Inc.
Oct. 2004	President and Representative Director of Tokyo Broadcasting System Television, Inc.
June 2006 Outside Director of Tokyo Electron Limited
Apr. 2009	Chairman and Representative Director of Tokyo Broadcasting System Holdings, Inc.
(currently TBS HOLDINGS, INC.) Chairman and Representative Director ofTokyo Broadcasting System Television, Inc.
Apr. 2012	President of The Japan Commercial Broadcasters Association (general incorporated association)
Apr. 2016	Honorary Chairman and Director of Tokyo Broadcasting System Holdings, Inc. (currently TBS HOLDINGS, INC.)
		Honorary Chairman and Director of Tokyo Broadcasting System Television, Inc.
June 2018	Executive Advisor of Tokyo Broadcasting System Television, Inc.
June 2019 Outside Director of the Company (present position)
Apr. 1980 Prosecutor of Tokyo District Public Prosecutors OfficeJan. 2014 Director-General of Public Security Intelligence Agency
Jan. 2015 Superintending Prosecutor, Sendai High Prosecutors Office
Sept. 2016 Superintending Prosecutor, Osaka High Prosecutors Office
Apr. 2017 Retired from his post of Superintending Prosecutor, Osaka High Prosecutors Office
June 2017	Lawyer registration (Tokyo Bar Association), joined Satoshi Suzuki Law Office (currently Shin Bell Law Office)(present position)
Feb. 2018 Outside Corporate Auditor of Kewpie Corporation (present position)
June 2018 External Audit and Supervisory Board Member of The Shoko Chukin Bank, Ltd. (present position)
June 2019	Outside Director of the Company (present position) Outside Audit and Supervisory Board Member ofKajima Corporation (present position)

Apr. 1991 Joined Sanyo Securities Company Limited
Mar. 1998 Joined FANCL CORPORATION
July 2009 Joined Calbee, Inc.
Apr. 2011 Investor Relations Group Manager of Calbee, Inc.
Apr. 2013	Executive Officer and Investor Relations Department General Manager of Calbee, Inc.
Apr. 2014	Corporate Planning Department General Manager and Investor Relations Department General Manager ofCalbee, Inc.
Apr. 2016	East Japan Sales Department Deputy General Manager of Calbee, Inc.
Apr. 2017	East Japan Sales Department General Manager of Calbee, Inc.
Apr. 2019	Financial & Accounting Department General Manager of Calbee, Inc.
June 2020	Outside Director of the Company (present position)
Apr. 2021	Financial & Accounting Department General Manager and Investor Relations Department General Manager ofCalbee, Inc.
Mar. 2022	Outside Director of Milbon Co., Ltd. (present position)
Apr. 2022	Managing Executive Officer and CFO of Calbee, Inc.
Apr. 2023	Executive Officer and CFO, Asia Oceania Region of Calbee, Inc. (present position)
Apr. 1985 Joined the Company
June 2010 Finance Division General Manager of the Company
June 2013 Executive Officer and Planning Division Deputy General Manager of the Company
June 2016	Corporate Strategic Planning Division Deputy General Manager and Corporate Planning Department Senior
Manager of the Company
June 2017	Corporate Strategic Planning Division General Manager of the Company
June 2018	Full-Time Audit and Supervisory Board Member of the Company
June 2019 Director (Full-Time Audit and Supervisory Committee Member) of the Company (present position)

Apr. 1982 Lawyer registration (DAIICHI TOKYO BAR ASSOCIATION)
Apr. 1989 Partner Lawyer of Atago Law Office
May 2003 Partner Lawyer of Greenhill Law and Patent Office (present position)
Apr. 2005 Vice-President of DAIICHI TOKYO BAR ASSOCIATION
June 2005 Outside Audit and Supervisory Board Member of JBCC Holdings Inc.
June 2011	Outside Audit and Supervisory Board Member of Itoham Foods Inc.
Apr. 2016 Outside Audit and Supervisory Board Member of ITOHAM YONEKYU HOLDINGS INC.
June 2016 Audit and Supervisory Committee Member / Outside Director of JBCC Holdings Inc. (present position)
Mar. 2020 Outside Audit and Supervisory Board Member of Otomo Logistics Service Co., Ltd. (present position)
June 2021 Outside Director (Audit and Supervisory Committee Member) of the Company (present position)
Mar. 2023 Outside Audit & Supervisory Board Member of KYOWA Co., Ltd. (present position)

Nov. 1974
Aug. 1979
July 1990
July 1997
Dec. 2015
June 2016
June 2020
June 2020
June 2023

Joined Deloitte Haskins & Sells LLP Accountant Office (currently Deloitte Touche Tohmatsu LLC)
Registered as a certified public accountant
Partner, Tohmatsu & Co. (currently Deloitte Touche Tohmatsu LLC)
Senior Partner, Tohmatsu & Co. (currently Deloitte Touche Tohmatsu LLC)
Established Ogi Certified Public Accountant Office (present position)
Outside Audit and Supervisory Board Member of Nippon Soda Co., Ltd.
Outside Director (Audit and Supervisory Committee Member) of Nippon Soda Co., Ltd.
Outside Audit and Supervisory Board Member of ALCONIX CORPORATION (present position)
Outside Director (Audit and Supervisory Committee Member) of the Company (present position)

Integrated Report 2023

59

Management Strategy by Company

Metal & Plastics Industrial Machine Company
Overseas Sales Ratio

Net Sales

Metal & Plastics Industrial Machine Company

With “molding” as its key word, the Metal & Plastics Industrial Machine(M&P) Company is engaged in businesses focused on injection molding
machines and extrusion machines for molding plastic resins as well as
die casting machines for casting aluminum and magnesium. Primarily
used in the automotive industry, M&P Company’s products also contribute to a wide range of other fields, including the telecommunications,
optics, medicine, and food fields.

¥70.7¥85.9 billion

70％billion82％

FY2022

FY2022Main Products
Injection molding machines
Die casting machines

Twin-screw extruders

Injection molding machine(EC3000SXIII)

Sheet and Film production unit

Performance Summary

Amount of Orders Received / Net Sales(Billions of yen)

154.9

160

123.8

120
80

77.2
63.7 64.3
63.1

75.5

145.6 141.5(Billions of yen)

13.5

15

(%)
12

9.5
85.9

10

5

4.9
3.7

4.9
1.8

3.6

8

5.4
4.6

4

1.1
2019

Amount of orders received

2020

2021

Net sales

2022

2023 (forecast) (FY)Business Overview

Injection Molding MachinesWe have leveraged the extensive expertise accumulated sincebuilding our first injection molding machine in 1956, along withthe latest technology, to provide products and services that meet awide range of needs in various industries, including the automotive manufacturing, medical, and information and communication
sectors. We are committed to realizing a decarbonized society andcontributing to automation and labor savings through the development of high-value-added products and systems, creating value
for our customers. With production facilities in four locations, inJapan and overseas, we are striving to build a brand trusted globally among our customers and society at large.
Die Casting Machines

Since introducing Japan's first domestically produced die castingmachine in 1953, we have utilized our experience and technological expertise to gain the top share of the Japanese market for die
casting machines. We provide die casting technology and equipment that leverage the latest injection and control technologies.

60

Film production Unit
(SFPU-55136XW)

Operating Profit / Operating Profit Ratio

40
0

Die casting machine(DC400R2-EM)

Integrated Report 2023

0

2019

Operating profit (left axis)

2020

2021

2022

2023 (forecast) (FY)0Operating profit ratio (right axis)

By fully utilizing the light weight, high rigidity, and recyclability ofaluminum die-cast products, we contribute to the development of
rapidly growing electric vehicle (EV) technologies and further
advances in the automotive market.
Extrusion Machines

The M&P Company is a pioneer in the area of twin-screw kneading
extruders. We manufacture production equipment covering all
extrusion product processes—from upstream operations throughto downstream operations. For plastic products, we offer twinscrew kneading extruders, sheet manufacturing equipment, film
manufacturing equipment, coaters, and roll-to-roll equipment. We
have been moving forward with the development of leading-edge
technologies in relation to lithium-ion battery separator film production lines, an area that is seeing a rapid growth in demand. We
are also developing advanced technologies for film manufacturing
equipment for the optical, food packaging, 5G, medical industries,
coating, and imprinting. Through such initiatives, we will contribute to the realization of next-generation technologies.

Strengths

 lobal supply chain centered on four locations in Japan andGoverseas
Solutions business structure comprising global sales and service
locationsIn-house production technology for large cast parts and control
devices for our products
Full line of sheet and film production equipment

Opportunities

Growing need for environment-friendly materials with a view toachieving carbon neutrality
Accelerating investment in the transition to EVs
Increasing demand for energy savings and renewable energy
Utilization of our base in India, where the economic environmentis favorable

Weaknesses ispersal of resources due to diverse product lineup
D
High degree of reliance on specific markets for die castingmachines
Exchange rate fluctuation risk associated with high percentageof overseas sales

S W
O T

Threats

Growing trend toward plastic-free products due tomarine pollution caused by plastic waste
Impact of soaring energy costs on prices of materials
Decline in applications for internal combustion engines due tothe shift to electric vehicles
Emergence of new technologies related to rechargeable
batteries, including all-solid-state batteries that can replacelithium-ion batteries

Business Management With production facilities in Japan, China, Thailand, and India, andthrough sales and service bases around the world, we are developing a solutions business to help realize a decarbonized society.
The automotive industry, which is the M&P Company’s primary
domain, is undergoing a value shift toward vehicles characterizedby connectivity, autonomous, sharing/subscription, and electrification (CASE) and an accelerating focus on carbon neutrality. One
notable example is the increase in electric vehicles (EVs), which is
prompting demand for high-performance storage batteries. We
specialize in lithium-ion battery separator film production lines,
which are needed for these batteries. We also make injection
molding and die casting machines, which are essential for turning
bioplastics and other materials that help reduce environmental
impact into plastic and aluminum parts, and provide them as turnkey systems that contribute to automation and labor savings. We
aim to be the world leader in molding and casting products andservices, optimizing the experience and maximizing the value ourcustomers gain from using our products.

Value Creation 

Fiscal 2022 measures and results o meet the growing demand we anticipate from the rapidlyT
expanding Indian market, we have increased our production
capacity for hydraulic injection molding machines and expanded
a new plant in India with the aim of manufacturing electric injection molding machines there.
To meet the rise in orders for lithium-ion battery separator film
production lines, we have expanded our production system’s
capacity to four lines per month as of the end of September 2022.

TopicsInjection molding machine(EC3000SXIII)

Initiatives for fiscal 2023 and beyond

We will promote the use of energy-saving technologies aimed at
decarbonization, and offer product development and systemengineering support that contributes to automation and laborsavings.
We will further expand our production capacity to meet robust
demand for lithium-ion battery separator film production lines.

Development of an Ultra-Large, All-Electric Injection Molding
Machine Contributes to the Realization of a Decarbonized SocietyWith the growing number of batteries in EVs, demand is growing to reduce theweight of automobiles, improving their driving range. Accordingly, demand has
risen for large-scale production equipment to manufacture large plastic components such as car backdoors and bumpers. In response, we have developed a
new ultra-large, all-electric injection molding machine with a clamping force of
3,000 tons.
By adding electric-powered, ultra-large injection molding machines to our
lineup, which offers superior energy-saving performance compared to hydraulicmodels, we simultaneously meet the needs of our customers and contribute to
the realization of a decarbonized society.
Integrated Report 2023

61

Management Strategy by Company

Machine Tools Company

Net Sales

Machine Tools Company

The Machine Tools (MT) Company contributes to the advancement ofindustries around the world by manufacturing, selling, servicing, andretrofitting high-precision machine tools in a wide range of fields,
including natural energy; social infrastructure; the manufacture of equipment for automobiles, railroads, ships, airplanes, and other forms oftransport; construction machinery; die, mold, and component machining; high-precision molding for the lenses of smartphone and vehiclemounted cameras; and glass lens molding.

Overseas Sales Ratio¥13.5¥27.3 billion

billion22％

49％

FY2022

FY2022Main Products

Double column type
machining centers
Boring machines

High-precision aspheric andfree-form surface grinders

Double column
type machining center(MPC-H)

Performance Summary

Amount of Orders Received / Net Sales

Operating Profit / Operating Profit Ratio(Billions of yen)(Billions of yen)

40

1.0

29.6
30

22.8

20

20.8
17.4

28.7
26.1 27.3 26.7 26.6
23.6

0.3

1.0

2019

2020

2021

2022

2023 (forecast) (FY)Business Overview

To help customers maximize value, the MT Company will establish
commercial operations to manufacture, sell, service, and retrofit
machine tools for a broad range of industries, from large machine
tools that serve as the “mother machines” with which machine tool
manufacturers produce their products, through to high-precision
machine tools that are required worldwide for the manufacture of
optical components.
Machine Tools

We support manufacturing infrastructure through the products wemarket, which include ultra-large machine tools for the energy
field, social infrastructure, industrial machinery, and machine
tools; double column type machining centers and horizontal
boring and milling machines for the automotive industry, transportation equipment, and construction machinery; large, verticalboring and turning mills for renewable energy power generationequipment and aeroengines; bridge type multipurpose machines;
horizontal high-speed machining centers for machining aircraft
Integrated Report 2023

0

－1.0

6

3.8

3

2.0

0

0.0

－0.5

Amount of orders received
Net sales
Note: Net sales, operating income, and the operating margin include intersegment
transactions.

62

0.5

（％）

1.0

0.5

0

10
0

High-precision aspheric andfree-form surface grinder(ULG-100D (5A))

Boring machine(BTD-110S.R16)

－3

–4.0
–0.8
2019

Operating profit (left axis)

2020

2021

2022

2023 (forecast) (FY)Operating profit ratio (right axis)－6

components; and roll grinding machines used in the high-precision
grinding of mill rolls for steel.
High-Precision Machine Tools

The Group contributes to the advancement of leading-edge markets by providing high-precision aspheric surface grinders used in
making the molds of lenses for smartphone and vehicle-mounted
cameras and endoscope lens die machining; high-precision opticalglass molding press machines used in making molding lenses
for vehicle-mounted, security, and mirrorless cameras; and highprecision slicing machines used in slicing semiconductor wafers.
Retrofitting Business

Available for our machines and machines manufactured by othercompanies, retrofitting is an environment-friendly method ofextending the life cycles of existing machines and improving theirproduction efficiency and precision.

Strengths

Weaknesses echnical capabilities for the specifications of ultra-large,
T
special-purpose, and custom products
Ability to develop world-class technologies that enableleading-edge nano-order processing
Resources that enable production of ultra-large products
through to high-precision products

Opportunities

 ow percentage of overseas sales
LDispersal of resources due to diverse product lineup

Increasing demand for systemization and the introductionof IoT to save labor and improve productivity
Increasing investment in new environment-friendly infrastructureand energy
Growth in new demand accompanying the shift to electricvehiclesS W
O T

Threats

 trengthening of export control regulations
STechnological progress of manufacturers in emerging countries

Business Management 

Many customers want to heighten their production efficiency byminimizing the movement of personnel through the introductionof labor-saving measures, unmanned operations, and remote
maintenance, and we must maintain capabilities for catering
immediately to such customers. Accordingly, we will analyze
customer needs and continue optimizing our product portfolio.
Further, by circulating customer feedback in-house and setting
benchmarks, we will advance the development and marketing ofproducts aimed at realizing the SDGs. For large machine tools, we will
foray into fields where infrastructure projects are driving growth, suchas automobiles, aircraft, energy, and environmental initiatives. As forregions, in addition to the mainstay regions of North America andChina, we will strengthen our presence in India and Europe to raise
the percentage of exports and increase the scale of our business. In
addition, through the “SHIBAURA DX” initiative—which is transforming our entire manufacturing process and making it more efficientby leveraging advanced technologies in such front-end processes
as marketing and design—we will evolve the large special-purpose
machines that are our forte into machines with high levels of efficiency that are comparable with those of general-purpose machines.

Value Creation 

Fiscal 2022 measures and results e moved forward with the development and commercializaW
tion of a large, five-axis multipurpose machine for use in windand hydroelectric power generation, aerospace, and other fields.
High-precision machining typically requires advanced skills
and expertise. However, we have developed a high-precision
machine tool that uses automation and multi-axis synchronizedmachining to produce high-value-added parts without the needfor skilled workers.

TopicsDouble column type machining center(MPC-H)We will continue to hone our world-class technologies for highprecision machining and step up the development and sales ofhigh-precision machine tools for advanced businesses, such as
smartphones, automotive optical components, and semiconductors. Also, we will increase the scale of the high-precision machine
tools business by adding Europe’s precision components market
to our current overseas markets—which are dependent on China—
and by entering new medical markets.

Initiatives for fiscal 2023 and beyond

We will contribute toward the realization of the SDGs by developing a wide-stroke boring machine. This product, which harnesses
the superior characteristics of horizontal boring machines, can beused to machine parts for offshore wind power generators, larger
models of which are expected come into use in the future.
CASE is the current keyword for technological innovation in theautomotive industry. We will contribute to the development of
next-generation automobiles by leveraging the technologies andknowhow we have cultivated in high-precision micromachining.

Development of a High-Speed, Five-Axis Double Column TypeMachining Center Contributing to a Decarbonized Society

We have developed a high-speed, five-axis double column type machining
center to focus on the production of large die-casting and plastic molds, which
are key to the advancement of EV technology. Interchangeable attachmentsallow these machines to handle a wide range of rough and finish machining
processes. This arrangement facilitates high-precision machining with minimalerrors and reduces processing time. Additionally, by minimizing the number ofsteps during finish machining, the machine shortens the time required for subsequent polishing. For these reasons, we expect the new machining center tocontribute to the widespread adoption of EVs and the transition to a decarbonized society.
Integrated Report 2023

63

Management Strategy by Company

Control Systems Company

Net Sales

Control Systems Company

As well as unique development competence that realizes constant evolution and optimization, the Control Systems (CS) Company has adaptability that is based on a thorough knowledge of all kinds of manufacturing
sites. We use these advantages to contribute to automation, labor-saving,and efficiency improvement in a wide range of operations at manufacturing sites, including assembly, inspection, and conveyance. Also, throughthe creation and expansion of control solution businesses in the global
market, we are contributing to the realization of a sustainable society.

Overseas Sales Ratio¥1.1

billion¥8.6 billion

14％

7％

FY2022

FY2022Main Products
Industrial robots

Servo systems, Linear motors
FA controller

Engineering solutions

Industrial robot(THE1000)

Performance Summary

Amount of Orders Received / Net Sales(Billions of yen)
14.0

9.1

10.5
7.0

10.6
9.2

6.4

6.1

7.3

9.0

1.2
0.6

–0.4

–0.5

–0

–0

4.6

4.6

0.4

0.4

（％）
6

2.4
0.3

2019

2020

2021

2022

2023 (forecast) (FY)Business Overview

We develop various types of industrial robots, including SCARA,
cartesian coordinate, painting, and vertical multi-articulated
robots. Our robots are used for numerous conveyance and assembly applications at the manufacturing sites of smartphones andelectronic devices, EV batteries, and automotive components. In
response to the increasing diversity and complexity of work, weare also currently developing collaborative robots, intelligent
robots, and IoT-enabled robots. Used in a wide range of equipment, our servo systems maintain high precision and stable

Integrated Report 2023

–1.2

3
0

–0.6

Amount of orders received
Net sales
Note: Net sales, operating income, and the operating margin include intersegment
transactions.

64(Billions of yen)

0

3.5
0

Controller (V70)

Operating Profit / Operating Profit Ratio
12.3

10.4
9.1

Servo system(NCBOY-120)

–3

2019

Operating profit (left axis)

2020

2021

2022

2023 (forecast) (FY)–6

Operating profit ratio (right axis)

performance even in harsh environments and improve cycle timeby reducing settling time. Meanwhile, in engineering solutions weprovide automation systems best suited to solving the various
issues that our customers face, including the designing of production line automation as well as production line labor-saving andacceleration. Also, over many years, for our own products, we havedeveloped and manufactured high-performance controllers, which
help heighten the performance and functionality of machine tools
and various types of molding machines.

Strengths

 ontrol technology knowhow cultivated in many different areasCinside and outside the Company
Servo technology capable of nano-order operations
Robot control technology cultivated through the commercializationof SCARA robots since their earliest days
An overseas production system that enables local production
and local utilization of robots

OpportunitiesI ncreasing need for unmanned and labor-saving systems
Growing demand for semiconductor manufacturing equipment due
to the spread of 5G and 6G next-generation telecommunications
Rising demand for new robots due to the shift to EVs
Increasing demand for servos due to the expansion of electrificationin various industries

 ispersal of resources due to high-mix,Dlow-volume productionDependence on specific customers

S W
O T

Business Management With regard to industrial robots, we will start full-scale productionof SCARA robots at our plant in China to increase our share of thecountry’s market. In particular, we will strive to win orders frommajor EV-related customers for the THE800 and THE1000, which
are new models, and TS5000, which is a new controller. In thedomestic market, the CS Company will collaborate with the M&P
Company and the MT Company to develop robot-enabled system
packages that meet demand for the automation of pre- and postprocesses. Further, we are marketing dual-arm collaborative
robots—which have been developed from a market-oriented perspective—and are establishing the value of these products. We willfurther increase the scale of servo system sales by providing products and services that facilitate the introduction of EVs, which is set
to become a trend in various industries going forward. Also, theCompany will expand the engineering solutions business by meeting the increasing demand for in-plant logistics through the construction and selling of logistics conveyance systems, which

Value Creation 

Fiscal 2022 measures and results

We relocated production, from Japan to our plant in China, of
the THE800 and THE1000. These large, highly portable SCARA
robots cater to the need for manufacturing equipment for electric vehicle rechargeable batteries.
We have expanded our system engineering business by cultivating new customers through the introduction of palletizing equipment and cardboard unpacking equipment for in-factory
logistics and by expanding sales of composite molding systems.

TopicsWeaknesses

Threats

Restrictions due to stricter standards and regulations
for safety and information security in each country
Lengthening of delivery times and higher costs for components
and materials, including semiconductor components

incorporate palletizing and depalletizing equipment as well as
equipment for the automatic unpacking of cardboard packages.

Initiatives for fiscal 2023 and beyond

In October 2023, we launched the RIDRS series of dual-arm collaborative robots (humanoid, SCARA type).
In proposing composite molding systems compatible withcarbon fiber reinforced plastic—which help realize lighter-weightautomobiles—we will expand system packages that use robots
to meet needs related to the automation of processes.

Development of a Dual-Arm Collaborative Robot That Shares a
Workspace with People

In October 2023, we launched a dual-arm collaborative robot, which we developed to work alongside people and save space and labor requirements.
This space-saving robot can be used for applications including transportation, assembly, and inspection of small parts, such as batteries, and large parts,
such as automobile bumpers.
By minimizing the number of jigs required and being able to work alongsidepeople in a way conventional industrial robots could not, we expect theserobots to find applications in tasks that were previously impossible to automate.
Dual-arm collaborative robots
Integrated Report 2023

65

Corporate Data

Financial and Non-Financial Highlights

Consolidated Financial Highlights
Orders Received / Net Sales / Sales per Employee(Billions of yen)

191.6

200

164.2
35.3
150

30.0
88.6 92.6

100(Millions of yen)

107.7

2020

2021

100

123.1

36

75

2022

(FY)

24

50

12

25

0

0

Orders received (left scale)Net sales (left scale)
Sales per Employee (right scale)

（％）

5.7

6.0

6

4.7

4.2

71.2
51.7
55.9

25

2020

2021

(FY)

Overseas sales ratio (right axis)

Net Worth / Return on Equity(Billions of yen)

83.5

82.1

90

（％）

89.1

12

7.5

8

4.6

4

0

0

0.4

2020

Operating profit (left axis)

2021

2022

(FY)

0

Operating profit ratio (right axis)

–3.4

–30

2020

Net worth (left axis)

Dividend per Share / Dividend Payout Ratio

（％）

199.3

2021

2022

(FY)

Return on equity (right axis)

Capital Investment / Research and Development Costs(Billions of yen)

100

4.0

75

3.0

3.1
150

48.6
100

75.0

2020

Dividend per share (left axis)

66

Integrated Report 2023

2021

2.7
2.2

107.5
40.3

50

0

0

2

0.3

200

2022

4

2.0

(Yen)

75

50

30

0

100

69.3

66.1

60

3.9

4.0

（％）

85.4

Overseas sales (left axis)

Operating Profit / Operating Profit Ratio(Billions of yen)

(Billions of yen)

48

40.5

50

0

Overseas Sales / Overseas Sales Ratio

2022

Dividend payout ratio (right axis)

(FY)

50

2.0

25

1.0

0

0

1.8

1.7

Capital investment

2020

2021

Research and development costs

2.1

2022

(FY)

–4

Non-Financial Highlights
Employees / Non-Japanese Employees (Consolidated)(Persons)

（％）

4,000

40

3,081
3,000

3,049

27.7

29.0

3,037
29.2

2,000

1,000

0

2020

Employees (left axis)

2021

2022

(FYE)

Ratio of Woman in Management Positions /Ratio of Female Employees (Consolidated)

（％）

16

30

12

20

8

10

4

0

0

Non-Japanese employees (right axis)

12.9

12.9

4.8

4.8

2020

2021

Ratio of woman in management positions

Acquisition Rate of Paid Leave (Non-Consolidated)

(FYE)

2022
Ratio of female employees(in 10,000 kWh)
5,000

100

4,065

73.5
56.2

5.4

Electricity Consumption

（％）

75

13.0

4,457

4,678

4,000

62.9

3,000

50
2,000
25

0

1,000

2020

2021

2022

(FY)

0

Domestic

Service Water Consumption

2021

Overseas

133

(t)

141

(FY)

2022

CO2 Emissions / Emissions Intensity(in 10,000 m3)
150

2020

(t/Billions of yen)
4.0

28,000118
21,00020,836

22,13623,3693.0

100
14,000

2.25

1.88

2.05

2.0

50
7,000

0

Domestic

2020
Overseas

2021

2022

(FY)

0

1.0

2020

CO2 emissions (left scale)

2021

2022

(FY)

0

Emissions intensity (right scale)Integrated Report 2023

67

Corporate Data

10-Year Financial Data (Consolidated)

Management Performance
Net sales
Gross profit
Gross profit / sales (%)
Operating profit
Operating profit / sales (%)
Ordinary profit
Ordinary profit / sales (%)
Net profit (loss) in this term attributable toparent company shareholders
Net profit (loss) in this term attributable toparent company shareholders / sales (%)
Amount of orders received
Financial Position
Total assets
Net worth
Net worth ratio (%)
Interest-bearing debt
Important Financial Indicators
Total asset turnover (number of turnovers)
Return on assets (ROA, %)Return on equity (ROE, %)Cash FlowsNet cash provided by (used in) operating
activities
Net cash provided by (used in) investing
activities
Free cash flow
Net cash used in financing activities

Cash and cash equivalents at end of year
Net Sales by Region
Japan
North America
Asia Pacific
OthersTotal sales
Overseas sales ratio (%)
Capital Investment, Depreciation, Researchand Development Costs
Capital investment
Ratio of capital investment to net sales (%)
Depreciation
Ratio of depreciation to net sales (%)
Research and development costs

Ratio of research and development costs
to net sales (%)
Shareholder Returns
Total amount of dividends
Dividend payout ratio (%)
Per Share Information
Number of shares* outstanding at endof period (thousand shares) excluding
treasury stocks
Net income per share
Dividend per share

FY2013

FY2014FY2015FY2016

113,062
31,581
27.9
4,625
4.1
6,501
5.7

124,373
33,639
27.0
4,788
3.8
6,542
5.3

117,259
32,254
27.5
3,806
3.2
4,966
4.2

111,327
31,977
28.7
4,473
4.0
5,406
4.9

3.9

3.5

4.1

1.6

4,444

4,312

Integrated Report 2023

1,776

120,221

124,754

120,021117,021

148,680
84,217
56.6
16,596

159,549
93,66958.7
17,213

156,346
93,345
59.7
16,909138,373
77,12055.7
14,890

0.78
3.1
5.4

0.81
2.8
4.8

0.74
3.0
5.1

0.76
1.2
2.1

3,024

(457)

2,781

9,948

(1,509)(1,281)

2,252(2,983)(1,684)(774)(1,761)(19,089)

1,515(1,739)

5,034

6,965

41,27940,20842,932

46,87019,25544,3352,600
113,062
58.5

51,891
22,77847,084
2,618
124,373
58.3

53,07820,75441,0902,336
117,25954.7

47,811
19,993
41,5391,983
111,327
57.1

1,766
1.6
1,840
1.6

2,193
1.8
1,965
1.6

1,547
1.3
1,756
1.5

1,335
1.2
1,730
1.6

30,060

1,551

1,663

1,668

1,648

1,140
25.7

1,216
28.2

1,824
38.0

1,636
101.1

152,029

152,025

152,021

120,690

7.5

8.0

12.0

12.0

1.4

29.23

1.3

28.36

* The Company executed a one-for-five consolidation of shares of common stock effective from October 1, 2018.

68

4,806

1.4

31.61

1.5

11.87

FY2017

FY2018FY2019116,862
33,150
28.4
4,640
4.0
6,982
6.0

117,405
32,912
28.0
3,834
3.3
5,573
4.7

116,761
33,459
28.7
3,529
3.0
3,825
3.3

4.3

3.5

6.3

5,016

4,079

7,338

FY2020Millions of yen

FY2021

FY2022

92,63524,904
26.9
381
0.4
872
0.9

107,777
32,515
30.2
4,236
3.9
4,544
4.2

123,197
38,809
31.5
5,765
4.7
5,279
4.3

(3.1)

3.5

5.2

(2,898)

3,725

6,441

128,139

134,501

94,224

88,619164,277

191,653

148,763
81,334
54.7
14,390150,724
83,19755.2
14,390154,283
87,01856.4
14,390134,296
82,152
61.2
14,390166,989
83,51550.0
14,217205,100
89,11843.5
14,011

0.81
3.5
6.3

0.78
2.7
5.0

0.77
4.8
8.6

0.64
(2.0)
(3.4)

0.69
2.4
4.6

0.66
3.5
7.5

6,813

(2,176)

5,312

192

11,299934

2,892(3,669)(1,344)

10,035(3,921)(2,102)(1,493)

19,772(1,537)(1,785)(1,964)(4,956)25,085(1,264)(563)(2,108)(2,277)371

30,79825,59248,01142,41751,71050,85546,356
18,49050,496
1,518
116,86260.3

49,29818,99846,142
2,964
117,405
58.0

55,393
14,91345,043
1,410
116,76152.6

40,85014,841
36,070872
92,63555.9

36,49017,06653,214
1,006
107,777
66.1

37,76922,586
61,903
938
123,197
69.3

4,687
4.0
2,049
1.8

1,195
1.0
1,868
1.6

1,741
1.5
1,781
1.5

1,799
1.9
1,755
1.9

1,810
1.7
1,952
1.8

2,160
1.8
2,167
1.8

1.6

1.6

2.0

2.4

2.6

2.5

1,899

1,689
33.7

1,835

1,810
44.4

2,378

2,051
28.0

2,218

4,810
−

2,771

3,127

1,811
48.6

2,597
40.3


120,682

24,13624,135

14.0

45.0

85.0

41.57

169.03304.0624,14624,154

199.3

75.0

(120.05)

154.27

Yen

24,162266.63
107.5

Integrated Report 2023

69

Corporate Data

Corporate Information(As of March 31, 2023)

SHIBAURA MACHINE CO., LTD.

Company NameTOKYO HEADQUARTERS	2-2, Uchisaiwaicho 2-Chome, Chiyoda-ku, Tokyo 100-8503, Japan
TEL: 81-(0)3-3509-0200 FAX: 81-(0)3-3509-0333

Headquarters

NUMAZU HEADQUARTERS	2068-3, Ooka, Numazu-shi, Shizuoka-ken, 410-8510, Japan
TEL: 81-(0)55-926-5141 FAX: 81-(0)55-925-6501
FoundedDecember 1938
Established March 1949

Date of Establishment
Capital¥12,484 million

Number of Employees

Consolidated: 3,037 (Non-Consolidated: 1,683)

Stock-Related Information
Stock ticker code

6104

Stock listing

Prime Market, Tokyo Stock Exchange

Shareholder registryadministrator

Sumitomo Mitsui Trust Bank, Limited

Minimum trading unit

100

Aggregate number ofauthorized shares

72,000,000

Aggregate number of outstanding shares issued(As of March 31, 2023)

Number of shareholders(As of March 31, 2023)

26,977,106(including treasury stock: 2,814,565)

11,129 (increase of 432 people from the endof the previous fiscal year)

Distribution of Shares by Shareholder Type
3.20％

As of March 31,
2023

29.14％The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
GOLDMAN SACHS INTERNATIONAL
Shizuoka Bank, Ltd.

Shibaura Machine Employee Stock Ownership Association
BNYM AS AGT/CLTS NON TREATY JASDEC
Mitsui Sumitomo Banking Corporation

Shibaura Machine Suppliers’ Stock Ownership Association
MSIP CLIENT SECURITIESMorgan Stanley MUFG Securities Co., Ltd.

Foreign institutions and individuals

9,335,988 shares

Individuals and others (including treasury shares)

7,861,489 shares

Financial institutions

Other Japanese companies

Number of shares held
(thousands of shares)

3,753
1,939

Integrated Report 2023

8,085,077 shares
864,021 shares

830,531 shares

Securities companiesPercentage of shares held
(%)

15.53

8.03

1,496

6.19

580

2.40

596
552
536
504
481
435

Notes: Although Shibaura Machine holds 2,814,565 treasury shares, it is not included in the above list of major shareholders.
The percentage of shares held is calculated after deducting treasury shares.

70

34.61％
29.97％

Major Shareholders (As of March 31, 2023)
Shareholder name

3.08％

2.47
2.28
2.22
2.09
1.99
1.80

Domestic Offices and Plants（ Headquarters
 OKYOT
HEADQUARTERS
 UMAZUNHEADQUARTERSTOHOKU BRANCHCHUBU BRANCHKANSAI BRANCHKYUSHU BRANCHTAKASAKI OFFICEHAMAMATSU
OFFICE

Branches and Business Offices

Plants）

2-2, Uchisaiwaicho 2-Chome, Chiyoda-ku, Tokyo 100-8503,
Japan
2-11-2, Yaotome, Izumi-ku, Sendai-shi, Miyagi-ken 981-3112,
Japan

5-307, Kamiyashiro, Meito-ku, Nagoya-shi, Aichi-ken 465-0025,
Japan
Mainichi-Intecio Bldg., 3-4-5, Umeda, Kita-ku, Osaka-shi,
Osaka 530-0001, Japan

48 Tukasawa Bldg., Takasago-cho, Takasaki-shi, Gunma-ken
370-0047, Japan

5-6-25, Takaokahigashi, Naka-ku, Hamamatsu-shi,
Shizuoka-ken 433-8117, JapanNUMAZU PLANT

2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, JapanGOTEMBA PLANTSHIBAURA MACHINE (SHENZHEN) CO., LTD. (CHINA)SHIBAURA MACHINE TAIWAN CO., LTD. (TAIWAN)

Southeast
Asia

1-120, Komakado, Gotemba-shi, Shizuoka-ken 412-0038, Japan

Domestic Affiliates267-2, Nishi-sawada, Numazu-shi, Shizuoka-ken 410-0007,Japan

SHIBAURA MACHINEENGINEERING CO., LTD.

131, Matsumoto, Mishima-shi, Shizuoka-ken 411-8510,
Japan

TOEI ELECTRIC CO., LTD.

SHIBAURA MACHINE (SHANGHAI) CO., LTD. (CHINA)SHIBAURA MACHINE (THAILAND) CO., LTD. (THAILAND)SHIBAURA MACHINE SINGAPORE PTE. LTD. (SINGAPORE)
PT. SHIBAURA MACHINE INDONESIA (INDONESIA)SHIBAURA MACHINE VIETNAM COMPANY LIMITED (VIETNAM)
SHIBAURA MACHINE INDIA PRIVATE LIMITED (INDIA)

Europe andAmericas4778-1 Takasu-cho, Onomichi-shi, Hiroshima-ken 729-0141,
Japan

4-29-1, Hibarigaoka, Zama-shi, Kanagawa-ken 252-0003, Japan

Manufacturing Offices）

SHANGHAI SHIBAURA MACHINE CO., LTD. (CHINA)

East Asia

2-3-23 FMT Enokida Bldg., Hakata-ku, Fukuoka-shi, Fukuoka-ken
812-0004, Japan

5-17-5 Midorii, Asaminami-ku, Hiroshima-shi, Hiroshima-ken
731-0103, JapanSAGAMI PLANT（ Sales and Service Offices

2068-3, Ooka, Numazu-shi, Shizuoka-ken, 410-8510, Japan

HIROSHIMAOFFICE NOMICHIOOFFICE

Overseas Affiliates

 HIBAURA MACHINE MANUFACTURING (THAILAND) CO., LTD.
S
(THAILAND)SHIBAURA MACHINE COMPANY, AMERICA (U.S.)SHIBAURA MACHINE MEXICO, S.A. DE C.V. (MEXICO)SHIBAURA MACHINE DO BRASIL COMERCIO DE MAQUINAS LTDA.
(BRAZIL)SHIBAURA MACHINE EUROPE S.R.L. (ITALY)SHIBAURA MACHINE EUROPE S.R.L. (ITALY)SHIBAURA MACHINE（SHENZHEN) CO., LTD.
(CHINA)SHIBAURA SEMTEK CO., LTD. 2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, JapanSHIBAURA SANGYO CO., LTD. 2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, JapanSHANGHAI SHIBAURA
MACHINE CO., LTD. (CHINA)SHIBAURA MACHINE（SHANGHAI) CO., LTD.
(CHINA)SHIBAURA MACHINEMEXICO, S.A. DE C.V.
(MEXICO)SHIBAURA MACHINECOMPANY, AMERICA(U.S.)SHIBAURA MACHINETAIWAN CO., LTD.
(TAIWAN)SHIBAURA MACHINEVIETNAM COMPANY
LIMITED (VIETNAM)

KYUSHU BRANCHTAKASAKI OFFICECHUBU BRANCHKANSAI
BRANCHTOHOKU BRANCHTOKYO HEADQUARTERS
SAGAMI PLANT

GOTEMBA PLANT
NUMAZU HEADQUARTERS
and NUMAZU PLANT
HAMAMATSU OFFICESHIBAURA MACHINE
INDIA PRIVATE LIMITED (INDIA)SHIBAURA MACHINE(THAILAND) CO., LTD.
(THAILAND)SHIBAURA MACHINESINGAPORE PTE. LTD.
(SINGAPORE)

PT. SHIBAURA MACHINEINDONESIA (INDONESIA)SHIBAURA MACHINEMANUFACTURING (THAILAND) CO., LTD.
(THAILAND)SHIBAURA MACHINE
DO BRASIL COMERCIO
DE MAQUINAS LTDA.
(BRAZIL)ONOMICHI OFFICEHIROSHIMA OFFICE

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Integrated Report 2023

71

Integrated Report 2023

2-2, Uchisaiwaicho 2-Chome, Chiyoda-ku, Tokyo
100-8503, Japan
TEL: 81-(0)3-3509-0200
URL https://www.shibaura-machine.co.jp/en/

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