April 11, 2024
Mitsubishi Electric Corporation

Summary of the Q&A at the Sustainability Briefing (Institutional Investors / Analysts)
Date and Time: Tuesday, March 26, 2024 from 10:00 a.m. to 11:30 a.m.
Venue:
Head Office of Mitsubishi Electric Corporation (Online briefing)
Respondents:
Kei Uruma, Representative Executive Officer, President & CEO
Satoshi Takeda, Executive Officer, CSO
Q. Regarding Circular Digital-Engineering, the area of the factory automation systems business comes to mind as
a typical example, but what other businesses and business models can be considered for its application?
A. In the building systems business, we have already developed services that utilize data, such as remotemonitoring of the operational status of elevators during an earthquake to automatically restore their operation.
In the railway-related business, in cooperation with railway companies, we are working to detect abnormalities
and prevent problems by acquiring and monitoring train running data and other data. In addition, in powerrelated business, we are developing a solution for monitoring renewable energy generation status andoptimizing power distribution among multiple locations, as one of its E&F (Energy & Facility) solutions. First,
we will expand the scope of data acquisition from equipment, collect data in the digital space, and link it to thedevelopment of equipment and solutions in order to realize Circular Digital-Engineering. (Uruma)
Q. Sustainability-related products include FA Systems, Air Conditioning System & Home Products business andpower equipment products such as transformers, and global demand for them is increasing. I understand that
Mitsubishi Electric mainly supplies products to the domestic market at present, but are you considering overseas
expansion in the future?
A. We do not have any particular plans for aggressive overseas expansion of the transformer business. We recognizethat it will be difficult to continue to generate added value in this business and link it to corporate growth. Whileorders for transformers for high-voltage for power systems are growing, orders for distribution transformers arestable, so we will consider how we can increase the value of Mitsubishi Electric’s business in the future. (Uruma)
Q. When it comes to addressing social challenges through the provision of systems and solutions rather thanequipment alone, such as multi-region EMS and ZEB Solutions, Mitsubishi Electric may not yet be large
enough in terms of IT services and other areas. How will Mitsubishi Electric fill this gap as it aims to become
a Circular Digital-Engineering company?
A. Circular Digital-Engineering has two cores. The first consists of the analysis of component usage data and the useof that data to evolve the components themselves. The second consists of the utilization of them to provide newsolutions. One of the challenges in providing these solutions is the lack of human resources with digital skills. InApril last year, we established the "DX Innovation Center" in Yokohama as a base to promote the development ofnew technologies centered on cloud technology and AI. Human resource development and reskilling of engineers
are being addressed at the center, and we plan to expand the center this year. With the center at the core, we intend
to strengthen the software part of our Circular Digital-Engineering activities. (Takeda)
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Q. You have published KPIs related to Diversity, Equity & Inclusion (DE&I), but I would like to know if you have
any KPIs further broken down or commitments on a fiscal year basis.
A. No KPIs have been set on a fiscal year basis. For the past two and a half years, we have been working ontransforming internal communication, centering on the transformation project, “Team Sousei (Creation).” Wefeel that there have been significant changes among the senior management through town hall meetings anddialogues with the divisions under their control. The transformation project is scheduled to be dissolved inMarch 2025 as originally planned. During the remaining one year until the dissolution date, each division willtake the initiative to change what needs to be changed, aiming at becoming a self-driven organization, and thetransformation project will play a supporting role. Ongoing initiatives are necessary for transformation, andafter the dissolution of the project, the Sustainability Innovation Group will play a central role in this effort.
(Uruma)Q. What are Mitsubishi Electric's strengths in data analysis compared to its competitors? What are the challenges
and what do you want to complement by developing human resources in the future?
A. Data has value only when the meaning it possesses is analyzed. Mitsubishi Electric has accumulated experiencein applications, and we believe that collaboration between data engineers and application engineers will give
us an advantage. The challenge is that there are not enough data engineers who have both the latest technologicalskills and a proven track record. The key to developing these engineers is to secure and train data engineers
who can collaborate with other engineers who are well-versed in each business, so initiatives to develop a
collaborative environment are also important. (Takeda)
Q. Mitsubishi Electric already has IoT platforms like ClariSense, but I would like to know how that is related toVille-feuille and the other IoT platforms you introduced today.
A. Each business has a different IoT platform, and we are currently aiming for a state where each platform can be
flexibly linked through an Application Programming Interface (API) and other means. We believe that by doing
so, the value of having businesses in multiple fields will fully emerge. Ultimately, we hope to provide added
value by exchanging data across business divisions. (Takeda)
Q. Regarding the diversification of human resources, why is it necessary for management to utilize women andnon-Japanese people and how can they be utilized in management? I do not see any problem with Japanese men
occupying managerial positions in what are generally called large companies, including Mitsubishi Electric,
considering the current situation and corporate culture, but are you aware of any related risks?
A. Until now, senior management has been dominated by men who have been with Mitsubishi Electric for a longtime, but we believe that this has made it difficult to detect developments outside the company in a timely
manner. Since I assumed the position of president, the company has promoted a woman and the person fromoutside the company to the position of executive officer, and this has had the effect of invigorating discussion
at board meetings. I believe that having people in senior managerial positions who have firsthand experience
with mega-trends and developments, regardless of nationality or gender, will help us to enhance our thinking.
(Uruma)2

Q. Regarding resources and capabilities for data utilization, will data engineers be assigned to business divisions orwill they be assigned to a specialized organization that will be linked across the entire company? Also, whenproviding upstream services, such as Circular Digital-Engineering, I think that something similar to consulting
proposals will be necessary, but will the resources for such proposals be assigned to business divisions or to a
specialized organization? I would like to know about the assignment of human resources.
A. The "DX Innovation Center" is the horizontal link across the entire company. Although reskilling and hiring
should be done across the entire company, business divisions will ultimately be responsible for developing
the employees, since value cannot be generated unless it is combined with the expertise of each businessdivision. Rather than providing products, data, and solutions separately, we would like to accumulateknowledge so that each business division can propose solutions comprehensively, starting from solutions tocustomer's challenges. (Takeda)
Q. Do you use an internal or external server for data analysis?
A. Our data will be stored in a data center owned by Mitsubishi Electric. On the other hand, in the case of collaboration
with a customer, we will store data in an appropriate location upon consultation with the customer. (Takeda)
Q. Since Mitsubishi Electric’s strength lies in components, I believe that you should focus on components rather thansystems and solutions like e-F@ctory in your efforts to address social challenges, but what is your management
approach?
A. We believe that data is important for addressing social challenges through our business. Until now, most of ourbusiness has been selling off components, but we would like to evolve our components by analyzing and utilizing
the data that comes out of the components we deliver to our customers. In this process, we will consider how wewant to be 10 years from now. In some cases, we will evolve existing businesses in order to transform them intoa Circular Digital-Engineering company, while there is also a possibility that we will add new businesses to ourportfolio that are necessary for addressing social challenges. (Uruma)
Q. You mentioned that you will incorporate outside knowledge in terms of human resources, such as open innovationand job-based hiring, but what is the current ratio of new graduates to mid-career hires? Will you take any measures
to increase mid-career hires in the future?
A. The ratio of mid-career hires in the recruitment plan for FY2025 is approximately 48%. Mid-career hiring is avaluable means of securing human resources and will be steadily increased as needed. Regarding promotion to
managerial positions, we do not distinguish between new graduates and mid-career hires but rather evaluate eachindividual. As for female mid-career hires, we need to consider how we can help them understand the attractive
features of Mitsubishi Electric, given the small number of female employees we have had so far. (Uruma)
Q. Regarding the Circular Digital-Engineering business, I believe that a major challenge in utilizing data is to obtaincustomers' consent for data provision. How will you deal with this challenge?
A. In order for us to receive data from customers, we need to gain their understanding of the benefits of doing so. For
example, in the case of the railway-related business I mentioned earlier, we explain to customers that we want to
use the data for preventive maintenance, and we ask them to provide us with the data after they have understoodthe benefits of doing so. (Takeda)
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Q. In response to tight power demand, I think there is a demand for the renewal of power equipment, such as cleantransformers. How does Mitsubishi Electric perceive this situation?
A. Demand for power equipment is growing worldwide. Demand is increasing, including in areas such as reducing
the power consumption of data centers. However, sustainable business will be difficult if we only continue
conventional business that requires improvement in the performance of equipment such as power efficiency, so
we will respond firmly to this demand. (Takeda)
Note: This document has been translated from Japanese original for reference purpose only. In the event of any discrepancy between
this document and the Japanese original, the original shall prevail.

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