Financial Results for the 1st-Half of the Fiscal
Year Ending March 31, 2023
November 16, 2022
This presentation contains forward‐looking statements relating to expected
future performance as of November 16, 2022. Such statements are based on
the views and assumptions of company management and involve risks anduncertainties such as changes in the business environment that may cause
the actual results to differ materially from expectations.
Copyright © 2022 Harmonic Drive Systems Inc.

Performance Summaryfor 1H FY03/23

1
Copyright © 2022 Harmonic Drive Systems Inc.

Consolidated results for 1H FY03/23 (Vs. original forecasts)(millions of yen)

Original forecasts(announced May. 13)

1H FY03/23 (actual)

Vs. original forecasts

AmountAmountChangeRate (%)

Percent (%)

Percent (%)

Net sales

35,000100.033,451100.0▲1,548▲4.4

Operating income

5,500

15.7

4,640

13.9

▲859

▲15.6

Ordinary income

5,500

15.7

4,924

14.7

▲575

▲10.5

Net income

3,500

10.0

2,938

8.8

▲561

▲16.0

EPS (yen)

36.36

－

30.74

－

▲5.62

▲15.5

Net income (loss) refers to net income (loss) attributable to owners of parent.

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Consolidated results for 1H FY03/23 (year-on-year change)(millions of yen)

1H FY03/22
Amount1H FY03/23

Percent (%)

AmountYear-on-year change

Percent (%)

ChangeRate (%)

Net sales

26,341100.0

33,451

100.0

7,110

27.0

Operating income

3,527

13.4

4,640

13.9

1,113

31.6

Ordinary income

3,565

13.5

4,924

14.7

1,359

38.1

Net income

2,218

8.4

2,938

8.8

720

32.5

EPS (yen)

23.05

－

30.74

－

7.69

33.4

Capital investment

4,074

－

7,293

－

3,218

79.0

Depreciation

3,933

－

4,420

－

487

12.4

R&D expenses

1,372

－

1,629

－

257

18.8

Net income (loss) refers to net income (loss) attributable to owners of parent.
Depreciation includes depreciation of tangible assets and amortization of intangible assets and goodwill.

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Performance of main group companies in 1H FY03/23(millions of yen)

Net sales

Operating income

Equitystake

AmountHarmonic Drive Systems Inc.

－

24,361

28.0

4,207

12.4

HD Systems, Inc.
(Harmonic Drive L.L.C.) (U.S.A)

100%（100%）

4,570

52.9

491

95.3

Harmonic AD, Inc.

100%

1,223

▲7.4

87

▲48.8

※3

Harmonic Drive Systems(Shanghai) Co., Ltd.

100%

2,450

17.0

253

43.2

※4

Harmonic Drive SE(Germany)

100%

7,789

25.7

1,120

89.6

※2

Year-on-year
Change(%)

AmountYear-on-year
Change(%)*1 For overseas subsidiaries, the fiscal year ends December 31.
*2 Exchange rates: Jan–Jun 2021 1USD = ¥107.69, Jan–Jun 2022 1USD = ¥122.89*3 Exchange rates: Jan–Jun 2021 1CNY = ¥16.66, Jan–Jun 2022 1CNY = ¥18.94*4 Exchange rates: Jan–Jun 2021 1EUR = ¥129.82, Jan–Jun 2022 1EUR = ¥134.25

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Non-consolidated results for 1H FY03/23 (year-on-year change)(millions of yen)

1H FY03/22
Amount1H FY03/23

Percent (%)

AmountYear-on-year change

Percent (%)

ChangeRate (%)

Net sales

19,025100.0

24,361

100.0

5,335

28.0

Operating income

3,744

19.7

4,207

17.3

462

12.4

Ordinary income

3,832

20.1

4,633

19.0

800

20.9

Net income

2,638

13.9

2,889

11.9

250

9.5

EPS (yen)

27.41

－

30.39

－

2.98

10.9

Capital investment

3,676

－

6,277

－

2,600

70.7

Depreciation

1,586

－

1,924

－

337

21.3

R&D expenses

1,005

－

1,173

－

168

16.8

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Non-consolidated net sales by application(millions of yen)
25,00022,09422,50020,00019,02517,5001,909

14,222

15,00012,50010,000
7,500
5,000
2,500
0

10,527
1,362

9,260
1,201

838

613

739
488

522
635

659

321
487
618

866
1,188

2,452
1,716
930
1,186

723
1,012

675
702

1,268

1,044

1,611

1,390

10,041

2,190

24,361

11,657

12,427

9,584
8,070

5,040

672

4,926

3,960

200
1,163

440
1,055

376
1,161

394
1,616

2,804

3,348

3,990

1H

2H

1H

2H

1H

2H

1H

FY03/20

Semiconductor Equipment
Machine Tools
Measuring Machines
VehicleFY03/21

Flat Panel Display Equipment
Printing Machines
Excavation System for the Oil
Other

730

467

Robotics
Optical Devices
Medical Equipment

FY03/22

FY03/23

Gearbox for Motor Manufactures
Transporter
Aerospaces

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Non-consolidated bookings by application (quarterly)(millions of yen)
21,51522,5001,790

20,00018,357

1,222

17,500

1,108
831

15,000

619
959

730
665

19,208
1,679
458
583
757

12,50011,80810,0007,500

10,840

505
2,640

0

1,552
712
483
630

6,729

5,000
2,500

10,744

13,072

21_1Q

Semiconductor Equipment
Printing Machines
Medical Equipment

9,535
992
863
422
726

7,175
932
1,129
400
633

3,860

614

751

3,689

3,623

501
1,943

174
2,048

2,272

21_2Q

21_3Q

21_4Q

22_1Q

22_2Q

Flat Panel Display Equipment
Optical Devices
Aerospaces

Robotics
Transporter
Vehicle130
1,222

Gearbox for Motor Manufactures
Measuring Machines
Other

Machine Tools
Excavation System for the Oil

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Breakdown of year-on-year change in non-consolidated operating income(millions of yen)

Impact of changes
in marginal profit
Higher income ratio, inventory, etc.

+2,964

▲869

4,207
3,744

Higher fixed
Increase in
manufacturing SG&A expenses
costs, etc.

▲1,355

1H FY03/22▲277

1H FY03/23

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Status of consolidated assets(millions of yen)
160,000
140,000
120,000
100,000
80,000143,289
19,92815,584
9,404
954

151,616
17,727

Cash & bank deposits andsecurities

17,619Trade receivables

12,658Inventories
Other current assets

1,269

43,96749,646

Tangible fixed assets

40,43540,684

Intangible fixed assets

13,013

12,009Investments and other assets

March 31,2022

September 30,2022

60,00040,00020,0000

9Copyright © 2022 Harmonic Drive Systems Inc.

Status of consolidated liabilities and net assets(millions of yen)
160,000

143,289

140,000

3,856

120,000
100,000

151,616
10,645Trade payables
Other current liabilities

16,887

20,916Long- and short-termborrowings

15,68816,454

Other fixed liabilities

98,856

99,112

Owned capital

4,488

8,000

80,00060,00040,00020,0000Equity ratio

Equity ratio

69.0%

March 31, 2022

65.4%

September 30, 2022

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Status of consolidated cash flows
1H FY03/22

1H FY03/23

Cash flow from operating activities

4,008

2,298

Cash flow from investing activities▲16,157▲3,275

Cash flow from financing activities

9,353▲2,280339

490

Net increase (decrease) in cash and cash equivalents▲2,455▲2,767

Cash and cash equivalents at end of period

17,541

16,000(millions of yen)

Effect of exchange rate changes on cash and cash
equivalents

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Performance Forecasts for
Full-year FY03/23

12
Copyright © 2022 Harmonic Drive Systems Inc.

Revisions to consolidated full-year earnings forecasts【Versus original forecast】(millions of yen)

Original forecasts(announced May. 13)

AmountRevised forecasts(announced Nov. 8)

Percent (%)

AmountVersus original forecast

Percent (%)

ChangeRate (%)

Net sales

75,000100.0

74,000100.0▲1,000▲1.3

Operating income

13,00017.3

11,00014.9▲2,000▲15.4

Ordinary income

13,00017.3

11,30015.3▲1,700▲13.1

Net income

9,000

12.0

7,500

10.1

▲1,500▲16.7

EPS (yen)

93.49

－

78.67

－

▲14.83▲15.9

Assumed exchange rate for FY03/23 forecasts: 1USD = ¥132.00 1EUR = ¥138.00
Net income refers to net income attributable to owners of parent.

1CNY = ¥19.50

Reason for revisions
 We have revised down our outlook for sales of automotive speed reducers as we now expect production levels at automakers—our customers—to remain below
our initial assumptions due to the impact of semiconductor procurement difficulties and other factors.
 We also lower our profit forecast to reflect the impact of the downward revision to our net sales forecast, higher procurement prices for electronic parts, andother factors.

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Revisions to non-consolidated full-year earnings forecasts【Versus original forecast】(millions of yen)

Original forecasts(announced May. 13)

AmountRevised forecasts(announced Nov. 8)

Percent (%)

AmountVersus original forecast

Percent (%)

ChangeRate (%)

Net sales

55,000100.0

53,000100.0▲2,000▲3.6

Operating income

11,000

20.0

9,500

17.9

▲1,500▲13.6

Ordinary income

11,20020.4

10,00018.9▲1,200▲10.7

Net income

7,500

13.6

6,700

12.6

▲800

▲10.7

EPS (yen)

77.91

－

70.48

－

▲7.43

▲9.5

Assumed exchange rate for FY03/23 forecasts: 1USD = ¥132.00

1EUR = ¥138.00

1CNY = ¥19.50

Reason for revisions
Same as for consolidated forecasts (see previous slide)14
Copyright © 2022 Harmonic Drive Systems Inc.

Consolidated performance forecasts for full-year FY03/23(millions of yen)

FY03/22AmountPercent (%)

FY03/23 (forecast)Year-on-year change

AmountChangePercent (%)

Rate (%)

Net sales

57,087100.0

74,000100.0

16,912

29.6

Operating income

8,739

15.3

11,000

14.9

2,260

25.9

Ordinary income

9,108

16.0

11,300

15.3

2,191

24.1

Net income

6,643

11.6

7,500

10.1

856

12.9

EPS (yen)

69.02

－

78.67

－

9.65

14.0

Capital investment

5,690
8,254
3,012

－

12,400
9,500
3,500

－

6,709
1,245
487

117.9

Depreciation
R&D expenses

－
－

－
－

15.1
16.2

Assumed exchange rate for FY03/23 forecasts: 1USD = ¥132.00 1EUR = ¥138.00 1CNY = ¥19.50
Net income (loss) refers to net income (loss) attributable to owners of parent.
Depreciation includes depreciation of tangible assets and amortization of intangible assets and goodwill.

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Copyright © 2022 Harmonic Drive Systems Inc.

Performance forecasts on main group companies for full-year FY03/23(millions of yen)

Equitystake－

Harmonic Drive Systems Inc.

Net sales
AmountOperating income

Year-on-year
Change(%)

AmountYear-on-year
Change(%)

53,000

28.9

9,500

13.7

HD Systems, Inc.
(Harmonic Drive L.L.C.) (U.S.A)

100%（100%）

11,000

65.2

1,300

70.5

Harmonic AD, Inc.

100%

2,300

▲16.8

100

▲72.7

※3

Harmonic Drive Systems(Shanghai) Co., Ltd.

100%

4,800

18.8

300

12.9

※4

Harmonic Drive SE(Germany)

100%

16,300

22.6

2,400

56.6

※2

*1 For overseas subsidiaries and affiliates , the fiscal year ends December 31.
*2 Exchange rates: Jan–Dec 2021 1USD = ¥109.80, Jan–Dec 2022 1USD = ¥132.00*3 Exchange rates: Jan–Dec 2021 1CNY = ¥17.03, Jan–Dec 2022 1CNY = ¥19.50*4 Exchange rates: Jan–Dec 2021 1EUR = ¥129.89, Jan–Dec 2022 1EUR = ¥138.00

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Non-consolidated performance forecasts for full-year FY03/23(millions of yen)

FY03/22AmountPercent (%)

FY03/23 (forecast)Year-on-year change

AmountChangePercent (%)

Rate (%)

Net sales

41,120100.0

53,000100.0

11,87928.9

Operating income

8,358

20.3

9,500

17.9

1,141

13.7

Ordinary income

8,702

21.2

10,000

18.9

1,297

14.9

Net income

6,545

15.9

6,700

12.6

154

2.4

EPS (yen)

68.00

－

70.48

－

2.48

3.6

Capital investment

4,589

－

9,600

－

5,010

109.2

Depreciation

3,502

－

4,300

－

797

22.8

R&D expenses

2,251

－

2,500

－

248

11.1

Assumed exchange rate for FY03/23 forecasts: 1USD = ¥132.00 1EUR = ¥138.00 1CNY = ¥19.50
Depreciation includes depreciation of tangible assets and amortization of intangible assets and goodwill.

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Factors in year-on-year change in non-consolidated operating
income (fiscal year ending March 31, 2023 forecast)(millions of yen)

Higher income+6,612
Impact of changes
in marginal profit
ratio, inventory, etc.

8,358

▲1,680Higher fixedmanufacturingcosts, etc.

▲2,800FY03/22

9,500
Increase in
SG&A expenses▲990

FY03/23 (forecasts)

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Future Outlook

19
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1. Current business environment

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1-1. Demand for HDSI’s products
Persistent investment demand with a view
toward medium and long-term growthOrders at HDSI to bottom out in 2H

Outlook(millions of yen)

Concerns

Asia

25,000EuropeNorth America
2,572
3,303

20,00015,000
5,000
0

Asia

FY03/23

Consolidated order trend

30,00010,000

Soaring raw materials and rising interest rates
Murky outlook for global economy

1,478
3,016
3,181

746
2,202
2,629

1,242
2,398
4,268

1,509
2,446

1,854
3,065

4,913

4,861

1,049
1,997
4,574

2019/1Q

2019/2Q

2019/3Q

2019/4Q

2020/1Q

2020/2Q

1,093
1,894
6,797
2020/3Q

1,309
2,746

2,551
3,915

4,064
4,658

4,408
17,046

18,601

18,008

10,3862020/4Q

4,110

2021/1Q

2021/2Q

2021/3Q

11,5872021/4Q

3,566
4,266

2,870
5,507

8,393

6,630

2022/1Q

2022/2Q

Capital investment for EVs and semiconductors is expanding, but signs of inventory adjustments are emerging
in the factory automation (FA) industry, particularly for applications targeting the 3C market

Europe The impact of the crisis in Ukraine has been minor, and investment in automation remains firm
North Orders were strong for semiconductor and medical applications, and resumed investment in amusement
America applications

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2.Trends in Main Fields of Application

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2-1. Factory automation robot market forecast
Labor
shortages

Automation demand

Post-COVID
new normal

Marketexpansion

Labor-saving demand

Annual installations of industrial robots 2016 -2021 and 2022* - 2025*
700
600

 Growth rates in the robot market: compact > medium/large Growth rate of precision control speed reducer for compact robots is
expected to exceed 7%‘000 of units

500

517

400
300
200

400

423

391

+7%/on average per year

570

690

394

304
Growth rate of compact
robots

100
0

614

653

2016

2017

2018

2019

2020

2021

2022*

2023*

2024*

2025*

Source: compiled by the Company based on IFR World Robotics 2022

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2-2. Collaborative robot（co-bots） market forecast Demand is accelerating for co-bots as a solution for non-contact demand and labor management
 We have developed a speed reducer equipped with a torque sensor (for a specific company), and our speed reducers have been
adopted in a company’s actuators equipped with torque sensors.
 Going forward, the rollout of co-bots with integrated AI systems should facilitate the adoption of such robots by casual users.
 Are we approaching an era in which humanoid robots will be manning factories?
Collaborative robot global market size (forecast)

150

Source：NEURA Robotics GmbH

Could humanoid co-bots be on the horizon?

‘000 of units

Note: Figures for 2020 are estimates, figures for 2021 and beyond are forecasts, based on the number of units shipped by manufacturers
Source: Compiled by the Company based on "Survey on the Global Market for Collaborative Robots (2020)" published by Yano ResearchInstitute Ltd. on February 12, 2021

+22%/ on average per year

100

107

124

87
50

0

45
(year) 2021

54

2022*

67

2023*

2024*

2025*

2026*

Note: Figures for 2021 are estimates, figures for 2022 and beyond are forecasts, based on the number of units shipped by manufacturers
Source: Compiled by the Company based on "Survey on the Global Market for Collaborative Robots (2021)" published by Yano ResearchInstitute Ltd. on March 28, 2022

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2-3. Anticipating growing demand for humanoid robots
 Demand for humanoid robots is gaining momentum-Tesla has unveiled its “Optimus” robot-Saudi Arabia plans to deploy humanoid robots
in its Smart City Project Relentless pursuit of superior human mobility Harmonic Drive® possesses technologies that
can help make these trends a reality While there are still many hurdles to overcome withrespect to technology, pricing, and ethical concerns,
humanoid robots may become the next “big thing”
after smartphones and EVs

Source : The Goldman Sachs Group, Inc. “Global Automation_ The investment case for humanoid robots”

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2-4. Semiconductor manufacturing equipment and Vehicle
Semiconductor manufacturing equipment
 Semiconductor (memory device) shortages are expected to dissipate from 2H 2022
 Advances in automated driving and the metaverse to drive long-term demand growth
Large-scale investment by major semiconductor companies to continue beyond 2023
 Governments to support the semiconductor industries of their respective countries- China is promoting domestic production of semiconductors- Japan also launched a next-generation semiconductor production company Rapidus

Vehicle: Used in variable compression ratio (VCR) engines
 Achieved improvements in ease of installation, fuel economy, and quietness at high speeds
 This will become the center of Nissan's next-generation engines
 Also used for e-POWER in exclusive power generator engines Semiconductor shortages are keeping production volume flat
Courtesy of
Nissan Motor Co., Ltd.

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2-5. Medical care
Surgical robots
 Very few companies supply parts to the major
manufacturers of surgical robots in Japan, theUS, and Europe, giving rise to a near oligopoly
 HDSI provides total motion control (high-level
integration of Harmonic Drive®, planetary gear
speed reducers, and mechatronics products)
 More companies are joining the field as digitaltransformation gains pace in medical settings
and treatment fields continue to expand

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3. New Applications

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3-1. AviationeVTOL (flying car)
 Electrification of aircraft
CO2 emission reduction, quieter operations
 Our compact and lightweight products are suited to theseneeds
 Top players in eVTOL have entered the commercializationstage
 Aerial travel to suburbs to become more widespreadthanks to aerial ride sharing services What about large aircraft?

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3-2. Amusement
Animatronics
 Harmonic Drive® helps to realistically replicate themovements of people, animals, and fictional creatures
 Major amusement companies are restarting
investments with a view toward society “With COVID”
and “Post-COVID”
 Animatronics products for attractions and shows areactively developed and invested
Source: Harmonic Drive SE website

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3-3. Space3-4. Space: Manned Pressurized Rover to explore lunar surface
Joined research to develop a steering unit as part of the Manned Pressurized Rover joint research project(FY2019–2021) led by the Japan Aerospace Exploration Agency (JAXA) and Toyota Motor Corporation

Source: JAXA, Toyo Motor Corporation

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4. Increasing Production
Capacity

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4-1. Increasing production capacity and enhanced productivity at Ariake Plant
 Completed investment to expand production capacity at Ariake Plant:
total investment of 6.5 billion yen
 Digitize various data and promote introduction of IoT

BeforeIntroductionof AGV

After

Increased production capacity

Increased productivity

Additional 70,000 units

Improve automation and save labor(more than doubled the productivity per
employee from the previous line)(Industrial: 40.000 units; Vehicle: 30,000 units)

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4-2. Increasing Production Capacity
Mar. 2018

Mid-term Management Plan (FY03/19 - FY03/21)

Mar. 2022

Sep. 2022

Mar. 2023

90,00090,00090,00040,00060,00040,00030,00060,00090,00027,00027,00027,000

8,000

8,000

8,000

【Japan】
Head office

Hotoka Plant

56,000
New Plant

Ariake Plant

Vehicle10,000Total fortwo Plants:
130,000【Germany】
Harmonic Drive SE
Limburg Plant

10,000【US】
Harmonic Drive LLC
Peabody Plant

Beverly Plant

3,000

Total: 79,000

3,000台5,500台Total(excl. automotive): 125,000

165,000

32.0%UP

Total

255,000

37.8%UP: 185,000

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5. Providing Value

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5-1. Contributing to energy conservation
Contributing to energy conservation by further reducing size and weight

Creating value withcompact, light-weight
products

Compact equipment
reduces installation space

Compact

・Lighter weight increases speedof movable parts
・Shorter takt time・Higher productivity
Fast

Smaller motors with higher
reduction ratios reduce energy
consumption
Low energy consumption

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5-2. CSF-ULW：Core technology underpins lightweight and flat design
Features bearing with four pointsof contact

Employs resin coverOptimized design (increased
thickness of various parts)

Incorporates fastening technology
suitable for flat and lightweight
designMade of die-cast aluminum38
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5-3. CSF-ULW: Illustration of weight reduction
Achieved approx. 55% reduction in weight comparedto the previous model!
* Applies to Model 8

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5-4. CSF-ULW: Applications of lightweight design

Autonomous mobile
robot (AMR) arm

Power-assist suits

Agricultural robots

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5-5. FHA-mini-ULW：New mechatronics product (reference)
Updated motor magnet materials
and dimensions
Move to plastic cable clamp

Integration of speed reducer part(wave generator) and motor shaft

Employs CSF-ULW unit

Optimized encoder mounting structure

Die-cast aluminum and speed reducer
part (circular spline) created as a single
structure

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Copyright © 2022 Harmonic Drive Systems Inc.

6. Initiatives fora Sustainable Future42
Copyright © 2022 Harmonic Drive Systems Inc.

6-1. Toward a sustainable future First private showcase held jointly by the three market shareleaders in the industry: SMC Corporation, THK Co., Ltd., andMechatronics Exhibition held jointly byHarmonic Drive Systems Inc.)
Three Companies
Dates: August 30–31, 2022
 Presented cutting-edge automation technologies based on a
Venue: Tokyo International Forum
vision for future factory automation (FA) underpinned bycollaboration and the mutual sharing of strengths
Theme: Toward a sustainable future
Visitors: Approx. 1,200 people Objective is to create solutions for customers in areas such aslabor-saving, energy conservation, and carbon neutrality

SMC Corporation booth

THK Co., LTD. booth

HDSI booth43
Copyright © 2022 Harmonic Drive Systems Inc.

6-2. Seeking harmony with the future
We will continue to develop and advance Strain
Wave Gearing, which is a unique and awesome
invention

Our mission
Light
Compact

Hollow

High torqueHigh strength

DevelopHigh accuracy
positioning
New production
methods

Basic Policy of Sustainability (approved on March 25, 2022.）

As a technology and skills-based organization in pursuit of Total
Motion Control, the HDS Group aims to enhance corporate
value and realize a sustainable society by contributing totechnological innovation for the betterment of society. We
intend to achieve these goals based on our management
philosophy comprising four pillars: Respect for individuals, be ameaningful company, coexistence and co-prosperity, andcontribution to society.

Contributeto theAdvance
Efficiency
improvement
Newmaterials

of industrial
society44
Copyright © 2022 Harmonic Drive Systems Inc.

6-3. Our path to sustainability
1970

1980

1990

2000

2020

2010

What should we do based on the ESG activities wehave implemented so far?

2050

・ Construction ofenergy-saving ・ Introduction ofcarbon-free power
factories
・ Solar panels
・ Adoption of LED lighting
in factories
・ Installation of energy-saving
air-conditioning
・Formed a

Activities targeting

・Obtained ISO 14001 certification
・Age ofretirement:
60 years old

・Decided on basic policy for“Green Factories”
・IIDA-KAN museum opens

・65
years
old

・70
years
old

Establishment

・Started Harmonic Lecture Series
・ Equal pay system for direct
and indirect employees
・Started International Symposium・ Internal Control System established・Started Harmonic Concert Series
・IPO
・ Full implementation of・Obtained ISO 9001 ・ Introduction of outside director system
・ Introduction of executive officer system
two days off per week
certification
・Established an Audit & ・ Introduction of Board of Directors
・Started quality-oriented
advisory committee system
Supervisory Board
management

Charter of Corporate Behavior
Management Philosophy

partnershipwith DOYA INC.

to increase

corporate value
45
Copyright © 2022 Harmonic Drive Systems Inc.

Topics in FY2022
April: Introduced CO2-free power at Ariake Plant
June: Harmonic Drive SE obtained the ISO50001 certification
October: CSF-ULW won the Good Design Award
October: Won the Grand Prize at the Monozukuri Grand Prize
Nagano 2022
January: Plan to hold the 37th Harmonic Concert(in Azumino City, Nagano Prefecture)

Copyright © 2022 Harmonic Drive Systems Inc.

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