Live Green &Grow Strong
Makita Report 2024
Year Ended March 31, 2024

Long-term Target

Strong Company
Management Policy/Quality Policy

1
Makita strives to exist
in harmony with society

Makita values its customers

a company that observes laws and regulations,acts ethically and never allows
intervention of the anti-social organizations

a market-driven company

3

4

Makita is managed in a consistentand proactive manner
a company that strives to exist in perpetuity byadhering to a sound profit structure

1

2

Makita Report 2024

Valuing a stalwart corporate culture,
Makita encourages each individual toperform to his or her highest levela happy company

Makita has set itself the goal of contributing to the creation of a sustainable
society and consolidating a strong position in the industry worldwide as a
global supplier of a comprehensive range of tools for creating comfortable
homes and living environments that includes cordless power tools,­battery-operated outdoor power equipment and pneumatic tools.

Table of Contents

Management for Sustainable Growth

Makita’s Sustainability Management

3 President’s Message

29 Progress of Sustainability Management
30 Society (Disclosure of Human Capital, etc.)

Makita’s Value Creation

35 Environment

9 Value Creation History		39 Initiatives in Line with the TCFD Recommendations

11 Value Creation Process

45 Corporate Governance

13 Makita’s Strengths

		49 List of Directors

15 	Evolving into a Supplier of a Comprehensive Range of
Cordless Products

		51 Messages from Outside Directors

17 Contributions to Solving Social Challenges

Corporate Data

21 Financial & Non-financial Highlights

55 10-Year Summary23 	Message from the Director of
the Administration Department

57 Stock Information
58 Corporate Data

27 Business Overview

About This Report
Editorial Policy

Reporting Period FYE 2024

The Makita Report is published with the objective of presenting the Company’s initiatives for creating value over

(April 1, 2023 to March 31, 2024)

the medium- to long-term in a way that integrates both financial and non-financial information. In preparing the

However, information from outside of thisreport, information that is particularly important for the Company’s value creation was compiled concisely,

period is reported when it is appropriate to­referencing international frameworks such as those of the International Financial Reporting Standards Foundation

the presentation of past circumstances and(IFRS). Please see the Company website (https://www.makita.biz/) for more information. Also, financial

data as well as recent examples.

­information, environmental information, and governance information is presented in detail in the Additional
Information, Earnings Release, and Fact Sheet in the Investor Relations section of the Company’s website,

Issued: August 2024

Environmental Report, and the Corporate Governance Report, respectively.
This report covers 54 companies, including Makita Corporation and its 53 consolidated subsidiaries (as ofMarch 31, 2024), but some of the information reported only covers Makita Corporation.

Disclosure System Diagram
Main Content

Financial
Information

Non-financial
Information

Periodic Report

Latest Information• Annual Securities Report• Financial Results• Fact Sheet• Environmental Report• Corporate Governance
ReportMakita Report

Makita’s website

Caution Regarding Forward-looking Statements
In this report, forward-looking statements are about future performance and are based on the Company’s judgment derived from the information available atthe time of its preparation. Please understand that a number of important factors could cause actual results to differ materially from those presented in the­forward-looking statements.

Makita Report 2024

2

Management for Sustainable GrowthPresident’s Message

To evolve into “a Supplier ofa Comprehensive Range of Cordless
Products,” we will focus on pioneeringsuch new fields of business as cordless
OPE while increasing returns byinvesting in efficiency and working
to achieve coexistence and mutual­prosperity with all stakeholders.
Makita’s Strengths Shine Even Brighter in Times of Market Difficulty
The Makita Group’s FYE 2024 performance was impacted
by decreased production and inventory reductions in­reaction to stagnant housing investment due to fiscal
tightening policies around the world as governments
scrambled to curb inflation. Nevertheless, operating
profit recovered to ¥66.2 billion, about 70% of ourpeak performance. During the COVID-19 pandemic—
which had driven the adoption of stay-at-home­lifestyles—higher demand drove production. A sudden
decline in demand as the market returned to normal
resulted in inventory growing to a record high in
September 2022. However, we then cut back production
in response to market changes and reduced inventory toappropriate levels by the end of FYE 2024. Cash flows
from operating activities were ¥237 billion, enabling us topay back increased borrowings.
We expect that the market for cordless power tools
and cordless OPE will remain flat as the trend of stagnant
housing investment due to high interest rates continues
in Europe and North America, and FYE 2025 will besomewhat unpredictable. On the other hand, we believethat demand will remain strong and resilient for tools

3

Makita Report 2024

that help address social ­challenges like environmental
issues and labor shortages. Over the medium term, we
will increase returns on invested capital by expanding
our lineup with such p­ roducts as the 40Vmax battery series,
high-power, high-voltage models, and by investing tostrengthen our brand and improve efficiency.
Focus on Supporting Our Customers Even in Hard Times
Makita has a history of turning adversity into strength byharnessing its employees’ talents during difficult times in
the market, as shown in our recent inventory optimization.
Whenever disasters like earthquakes or floods occur, one of
the Group’s deeply rooted strengths is that we are always
ready to provide support. Makita began its journey as a
power tool manufacturer in 1958 offering portable electric
planers, and in 1959 its work to help to address reconstruction demand in the wake of “Ise Bay Typhoon” marked
a major ­turning point for the Company. Cordless power
tools are crucial for building infrastructure and are usedby essential workers—our ­customers—making themessential in times of disaster. We have built strong relationships of trust with our c­ ustomers by providing stable service

PRESIDENT’S MESSAGE

President,
Representative Director

Munetoshi Gotoand quick responses to restoration and reconstruction
efforts. In addition, we have established an internal first
response system to be used in the event of a disaster.
While our factories furnish products, our sales­department is responsible for providing swift customer
service at our bases. We place the utmost importance on
our customers and the market, and when society faces
difficulties, Makita’s mission is to help solve them.
Emphasize Persistance, Coexistence, andMutual Prosperity with Our Stakeholders
A strong feature of our business model is that we haveestablished roots in communities all over the world andprovide complete services in every region where wework. Our corporate culture prioritizes permanence rather
than radical change and we have long maintained
a business model that enables us to work with our­customers and give them peace of mind. This aligns withthe origin of the Makita brand, which centers on­achieving coexistence and prosperity together with all
our stakeholders, especially our customers.
The corporate culture we have cultivated comes fromthe philosophy of Jujiro Goto, who transformed Makita
into a power tools manufacturer, and our code of conduct
for employees. Grounded in Mr. Goto’s philosophy, “Don’t
be angry, arrogant, panic, mope, or give up,” we strive toprovide every Makita employee with the opportunity to
exercise his or her talents. As a leader, I will guide Makita
toward achieving its long-term goal of being a “Strong
Company.” To achieve this goal, I always value theCompany’s Management Policy/Quality Policy: 1. Makita
strives to exist in harmony with society; 2. Makita values
its customers; 3. Makita is managed in a consistent andproactive manner; and 4. valuing a stalwart corporate­culture, Makita encourages each individual to perform to
his or her highest level.

Makita Report 2024

4

Management for Sustainable GrowthPresident’s Message

Business Model and Unique Development and Design Capabilities
The Makita Group’s growth is driven by the shift to­cordless power tools and, furthermore, by the expansionof range of cordless products, including OPE and cleaning equipment, utilizing its proprietary charging system
and motor technology. Our cordless product batteries
handle different voltages depending on the application,
meaning that one battery can be used with multiple
products. In 2005, Makita was the first in the industry tolaunch a professional-use ­cordless impact driver, TD130D
using a lithium-ion battery, and since then we havec­ ontinued to expand our lineup of cordless products
every year.
Cordless products accounted for only 29% of revenue
in FYE 2014, but this figure had risen to 54% as of FYE
2024. At the same time, the proportion of sales revenue
attributable to OPE and equipment other than cordless
power tools grew steadily, demonstrating our progress
towards becoming “a Supplier of a Comprehensive
Range of Cordless Products.”

Proportion of Cordless Products, OPE, and Other Equipment in Consolidated Revenue(Million yen)(%)

900,000

54

60

741,39140

600,000

29

300,000

24

20

2024

(FYE)

15
0

2014

Consolidated revenue

2015

2016

2017

Cordless products (%)

2018

Makita Report 2024

2020

2021

2022

2023

0

OPE and other equipment (%)

Reason Behind Strong Growth in High-powered
40Vmax Products
Over the past few years, we have been working tostrengthen the lineup of products in the high-powered
40Vmax battery series launched in 2019 and haveachieved solid results. After we launched this series, werealized that it was a good fit for the current market
environment. On-site labor shortages have led to risinglabor costs, driving up demand for efficiency, andMakita’s high-powered technology offers a perfectanswer for this issue. With 40Vmax products, it is now
possible to tackle heavy-duty tasks that were previously
impossible with conventional cordless tools due to­insufficient power. We have discovered a new market for
highly efficient, high-powered cordless tools and so we

5

2019

are focusing on product development with a healthy
optimism that this range will drive our growth forthe future.
We are planning to develop 40Vmax products for the
resource and energy industries as well as for disasterrecovery and preparedness. The market for the resourceand energy industries is particularly large, and our
40Vmax products are already being used for installingand maintaining solar panels as well as in many otherapplications. To differentiate ourselves from our competitors, we must add new technologies to further enhance
our customer-­oriented services. At this time, 40Vmax
batteries can be used with more than 200 ­models (inJapan, as of April 2024), but we plan to expand into newmarkets going forward.

within certain categories which enable them to develop
specializations and gain knowledge within their category.
One of our challenges going forward is the recruitmentof even more competent technology development­engineers. Our development department in Japan­currently employs around 1,000 people, up from around
700 six or seven years ago, and there has been a particularincrease in designers in OPE development with electronic
control expertise. We have established development
centers in both Korea and Tokyo that specialize in­electronic control to help us secure skilled personnel andstrengthen Makita’s development.

Taking on a New Challenge of Cordless OPE
We expect our existing cordless power tools business tomature, and our strategy for the future is to increase
returns by improving efficiency and expanding cordless
OPE. OPE made up over 10% of our total sales revenue in
FYE 2024, while growth has accelerated in recent years
thanks to cordless OPE. As with the shift to electric­vehicles, the shift to cordless OPE may take some time,
but society as a whole is steadily progressing toward
decarbonization, so we will work to solve environment
problems when we can. To effectively meet our customers’
needs for efficient labor and improved productivity, we willtake a steady approach by streamlining our businessmodel to generate cash so that we can invest both timeand capital. Cordless OPE is still in ongoing development,
and it is our intention to take the time needed to­continuously pioneer new businesses, just like we didwith cordless power tools.
Past and Present OPE BusinessWe first entered the OPE business in January1991 withthe acquisition of Sachs Dolmar GmbH in Germany, andwe later strengthened operations through a business
partnership with Fuji Robin Industries Ltd. (which wasmade into a wholly owned subsidiary in August 2007),
but our market share was stagnant. In 2009, when our
performance worsened during the financial crisis, we
expanded our OPE product lineup to create a second pillar of business in addition to cordless power tools.
However, our engine-powered OPE products were notable to get an edge over their competitors, and the profit
margin was relatively low. Since the COVID-19 pandemic, we have taken advantage of the opportunities­presented by stay-at-home demand and the benefits ofcordless OPE, and have ­significantly expanded our cordless OPE lineup, focusing on our high-powered 40Vmax

battery series. In this way, we have been working to
identify further customer needs. In 2022, we decided to
end production of engine-powered products, and weare now focusing our management resources on cordless OPE.
The OPE market is several times bigger than the one
for cordless power tools. The largest proportion of the­professional market consists of engine-powered tools,
but we expect a widespread shift to cordless due to environmental and other concerns. The market for cordless
OPE is currently thought to mainly comprise DIY users, but
the market for professionals is anticipated to grow in the
future as well. Also, when new customers such as young
craftspeople and women ­purchase OPE, they tend toprefer cordless tools over engine-powered, and Makita ishighly regarded in this area.
Thus far, our cordless OPE demand has mostly been
supported by DIY users. Going forward, we intend to
expand sales to professionals. However, simply making
equipment rechargeable is not enough to increase a
product’s appeal to professional customers. We need tolaunch cordless OPE with specifications superior to thoseof engine-powered products and ­utilize our global service network rather than just waiting around for the shift
to cordless to happen on its own. In addition, we will
work to enhance the brand power of our cordless OPE.
We are slowly expanding our market with an eye on­professionals, but our immediate challenge is a limited
product lineup, so we plan to further increase sales inthis area by expanding the product lineup for professionals.
In ­addition, we have invested in production and logistics
facilities for cordless OPE and have already ensured­sufficient capacity, so I believe we are ready to handle
a ramp-up in production.

Makita Report 2024

6

PRESIDENT'S MASSAGE

Continue Reinforcing Development and
Design Capacity
Our product development and design processes
are characterized by the responsibility that individuals
are entrusted with. During development, the designer
is responsible for a given product from design tolaunch, so that the designers can gain insight and get­motivated to make a better product by responding tocustomer feedback.
Fulfilling the market needs and selling the products
also leads to their job satisfaction and happiness. Our
designers ­continuously develop and design products

Management for Sustainable GrowthPresident’s Message

Issues and Initiatives Aimed at Increasing Returns on Investment
Makita has never been a company that dramaticallychanges its business style. Rather, it has always focusedon providing practical services that are closely alignedwith our customers’ needs. However, it is also true thata pioneering, innovative image could help attract newcustomers. It is my conviction that once a customer
becomes aware of how good Makita’s products are, they
become a lifelong supporter. To achieve that, we need tobe creative to attract younger customers in the first place.
I believe one way to attract new customers is to develop
products that employ new technologies, but improving
our technology is not enough; we need to invest in
branding and other areas as well to increase our appeal
for customers. Because of our deep roots in each region
we operate in, there are some risks. To reduce such risks,
we intend to invest in our business infrastructure. Recent
capital expenditure includes increasing our overall­service capacity by expanding our logistics facilities andbases, but I believe that the most effective way of maximizing our returns is investing in our IT infrastructure to
improve efficiency. To sum up the above, I believe weshould focus on investing in new technologies, ­creating
systems that improve efficiency, and ­accelerating­customer acquisition.

In good market conditions, it is obvious that higher
production capacity contributes to higher returns. We
need to establish a unique system that increases returns
through efficiency even in less favorable conditions. I
believe that Makita’s durability is most evident when themarket is in a trough.
Top Management’s RoleMy role is to identify areas for future investment and­create a corporate culture in which employees think­strategically about what we should be investing in.
Across Makita, we work every day to improve andstreamline various processes, from development to­production and sales, even if it is only shaving one­second off from a process. Although it is important tobuild up improvements incrementally through frugality
and resourcefulness, if significant improvements in­efficiency can be realized quickly and deliver a proportionate return on investment, we should invest accordingly.
Thus, I would like to foster a corporate culture in which
employees, including managers, think strategically
about what they should do to increase management
speed in view of efficiency and returns and proactively­support the necessary investments.

Sustainability Activities and Makita’s Strategy
Three years have passed since the establishment of the
Sustainability Committee in 2021. One of the greatest
resulting impacts was making data on our GHG emissions from our business activities transparent. This hashelped us to better understand where to begin ourefforts to reduce GHG emissions to net zero by FYE 2040
and across the entire supply chain by FYE 2050. Every­relevant department has a representative who participatesin the Sustainability Committee, ensuring that the importance of reducing GHGs is commonly understood byemployees, and that everyone works to do so in their own
area of responsibility. Although we are currently working
to fully comprehend the figures and discussing internally
how to proceed, we are already starting to see potential

7

Makita Report 2024

for energy conservation and the use of renewable­ nergy. We are also installing solar panels at our basesearound the world, which is in line with our BCP.
Environmental Initiatives to Strengthen Makita in
the Medium to Long Term
Since 2022 when we set “reducing environmental
impact” and “contribution to affluent communities anddaily lives” as material issues for the Company, we havepositioned the active development of cordless products,
including cordless OPE, as a priority initiative. I believethat Makita can demonstrate its strengths througha wide range of environmental responses, including­promoting the elimination of plastic and increasingand have been sent to work overseas (or for training) asa KPI for our human resources. My role as the top executive is to create an environment in which each individual
can utilize their talents, and to ensure that compensation is proportional to performance. It is important togive our employees responsibilities and create a culture
in which they can thrive. To achieve that, we need tohave fair, equitable evaluation systems in place and implement. Furthermore, I believe that good governancerelates to human ­capital, and I will strive to maintain thisawareness. Any governance failure harms stakeholders,and it takes time to regain trust. Good governance is­crucial to the long-term sustainability of the Company.

Management Initiatives that is Conscious of Stock Prices
Recently, we summarized the Makita Group’s policy on
implementing management that is conscious of cost ofcapital and stock price, in line with the directive of theTokyo Stock Exchange for companies listed on the Prime
Market. Makita’s stock price is currently above a PBR of
1.0 times, but it has declined from its previous peak. To
raise the PBR, we need to improve capital efficiency andreduce the cost of equity.
Our cordless products will help resolve our­material issues and increase our corporate value while
the focus of our growth strategy will be on expanding
professional-use high-added-value products range­centered on 40Vmax batteries and differentiating ourselvesfrom our competitors with our strong sales and service
network around the world. To improve capital efficiency,
we believe it is important to improve returns by investingin efficiency. We will work to improve capital efficiency,
including ROE, through such measures.
To reduce the cost of equity, we must reduce­performance fluctuations by formulating and executing­strategies that enable us to quickly adapt to changes inthe business environment. In the medium to long term,
we expect a globally growing call for sustainability­disclosure, including from the European Corporate
Sustainability Reporting Directive (CSRD). We will
respond to these requests promptly in line with humancapital management. These efforts must be fully understood through dialogue with shareholders and investors,
and we view this as a priority issue going forward.

The Makita Group’s continued success is thanks to thecoexistence and prosperity gained through the supportof our stakeholders and how we have grown together,which will never change in the future. Meeting the
expectations of all our stakeholders, including­shareholders, will further strengthen our operations.
We would appreciate your continued supportand encouragement.

Makita Report 2024

8

PRESIDENT'S MASSAGE

battery recycling. I view these efforts as effectively promoting the Company in the medium to long term. By
promoting our environmental sustainability, including
active development of cordless products, we will bothcontribute to the realization of decarbonization as wellas increase Makita’s corporate value.
We have also set “strengthening the managementbase” as a material issue. As part of this, we strive toboost our human capital, and I believe we need to promote human resource development that can support
operations globally. To realize global sustainable growth,
we have set the percentage of employees comprisingthose who have joined Makita within the past five years

Makita’s Value Creation

Value Creation History

Continuously Evolving to Meet the Needs of
the Times and Our Customers
Makita began in 1915 as a repair and sales company handling such items as lighting equipment, electricmotors, and transformers. Since then, we have pursued expansion on a global scale, evolving to overcome
challenges while meeting the needs of our customers and the times. By leveraging our strengths, including
a worldwide network of sales and service bases, we will continue to evolve, becoming “a Supplier ofa Comprehensive Range of Cordless Products” and achieving further growth. Moving forward, Makita will
ensure the provision of products and services that accurately meet the needs of our customers and thetimes and thereby achieve sustainable growth.

Highlights of Makita’s Evolution

1958-59
Overcoming Adversity, Becominga Power Tool Manufacturer
The recession following the Korean War caused a slump insales, and developing original products became an­important management issue. After much trial and error,
in 1958, the first Japanese-made portable electric planers
were launched with the catchphrase “20 times more
­efficient than a human.” The electrification of this productwas well received, and perfectly met the needs of­carpenters nationwide amid a boom in construction
demand. On the tailwind of the planers’ popularity, in
1959, the Company decided to withdraw from the electricmotor business and become a power tool manufacturer.

1970
Taking the First Step toward
Overseas Expansion
As Japan began to see a slowing of the rapid pace of
postwar economic growth, Makita established its firstoverseas subsidiary, Makita U.S.A. Inc. in the U.S., with thegoal of expanding exports. In a fierce market crowded withcompetitors, including major power tool manufacturers,
we had some difficulties at first. However, we developed
a finely tuned sales strategy that reflected the value weplace on being close to customers, and our products’
excellent cost performance along with our high quality
after-sales service earned high evaluations. As a result,
we were able to successfully penetrate the North
American market.

Social Changes and Makita’s History of Evolution

1910Japan’s modernization

SocialChanges

1950-

1970-

Japan’s rapid postwar
economic growth

Globalization of the economy
triggered by two oil shocks• Arrival of the construction boom

• Companies expanded overseas

Began repairing and ­selling lighting
equipment, electric motors,
transformers, and other products

Released Japan’s first ­portableelectric planer

Began building a finely-tuned salesand ­service network thatspans the globe

1915 Mosaburo Makita founded Makita

1958 Released the 1000 portable electric1970 Established Makita U.S.A. Inc.,• Increased demand forelectric power

Makita’s Historyof Evolution

Electric Works (proprietorship) in
Nagoya, Japan
1938 Incorporated the proprietorshipand established Makita ElectricWorks, Inc.
1945 Moved to the present location in
Sumiyoshi-cho, Anjo City, to­accommodate World War II­related evacuations

9

Makita Report 2024

planer, Japan’s first such domestically
produced tool
1959 • Decided to convert to a power tool
manufacturer• Shipped the 1300 hand-held electric
planer to Australia, our first exportof power tools
1962 Changed company name to
Makita Electric Works, Ltd.

our first overseas subsidiary1980 Started production of power tools
in Canada,* our first overseas
production site

* Production terminated in January 20091991 Changed company name to
Makita CorporationPerformance
Revenue (Bar Graph)
Operating Profit (Line Graph)

Revenue(Consolidated)¥741.4(Billion yen)

800
200

billion(FYE 2024)

2005-

600
150

Moving toward Becoming “a Supplier ofa Comprehensive Range of Cordless Products”
for Sustainable Growth with Society
In 2005, Makita was the first in the industry to launch
professional-use cordless power tools with lithium-ion
batteries. In recent years, the world has seen a rise in
the severity of such social issues as labor shortages andenvironmental problems. We are now taking steps toevolve into “a Supplier of a Comprehensive Range of
Cordless Products,” aiming to achieve our long-termgoal of being a “Strong Company” and to resolvea wide range of social issues while balancing the­sustainable growth of the Company.

400
100

200
50

2000Discovering the sustainable society concept• Heightened interest in ­environmental issues
and strengthening measures to prevent
global warming•G rowing demand for energy conservationand efficiency

2010-

0

2020-

Toward a diverse,­inclusive society

Realizing a sustainable
society• Adoption of SDGs leads toglobal efforts towarda sustainable society• Acceleration of initiatives torealize decarbonization

First in the industry to launch professional
cordless tools with lithium- ion batteries
Realized longer battery life and more­compact, light tools

End production of engine-powered products to accelerate shift tocordless products (away from engines)
Launched a varied lineup of cordless products that contribute to theresolution of social issues

2005 Launched the TD130D cordless impact

2015 100th anniversary ofdriver, our first lithium-ion battery tool

Makita’s founding
2019 Launched the Li-ion
40Vmax series

2022 • Discontinued engine-

powered products• Established the Electronic
Control Development
Center (Tokyo Office)Makita Report 2024

10

Makita’s Value Creation

Value Creation Process
With the long-term goal of being a “Strong Company,” we identified important social challenges that weshould address as priority material issues. Striving to help solve these social issues through our business­activities, we are actively developing cordless products and offering robust services that leverage our­worldwide network of sales and service bases.
We believe that further developing our strengths by solving social challenges will differentiate us fromother companies and serve as the foundation for sustainable growth.

Sustainable Growth

Input

Business Model

Financial capital• Equity attributable to owners¥868.2 billion¥196.6 billion17,66914,2285,816

Social capital•Number of sales and service bases  Japan 129 (as of April 2024)   Overseas Approx. 50 countries• Number of countries where Makita
sells products Approx. 180• Quality and service at the core of
the Makita brand

Manufacturing capital• Plants 8 countries(including those in Japan)• Capital expenditures ¥17.9 billioncduucuct
prorodod nddd
nsiveep pr kaan n
EExExtxetteennsisvive twoorokrrk aneww
RRRooobbbuuusststtbbbaaasseseenneet t• Number of employees Number ofoverseas employees 
Number of
female employees / / / eies siesg
ggi ogHuman capitalbeleaadddiniinnggg bbaaattttetteryrychc a
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er hr
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tor te chno gi g
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chnnlool n
In haarrggi
ol o
ha
ch
Development

Makita’svalue chain
Sales
and services

t tl
ilni
rer lineneeuup
re pepa up ppa airi s
ir sr ysyste
ystestemmmProduction

rpoprordou dudcuti ct
cotinoiosn s
nyssytysestm
etemm• Cash and cash equivalents

ddids is I I
isc cof the parent

alapl
b
o
b
GGl lboal
GloIntellectual capital• R&D costs ¥14.3 billion• Number of patents and utility model
registrations held 4,683

Platform Supporting Makita

Natural capital• Energy usage 180,203 MWh

Sustainability Management

pp. 29-54•W ater usage 102,477 m3(non-consolidated)(Fiscal year ended March 31, 2024)

11

Makita Report 2024

Management Policy/Quality Policyp. 1Long-term
TargetStrong Company

Makita has set itself the goal of contributing to the creation of sustainable society and consolidating a strong
position in the industry worldwide as a global supplier of a comprehensive range of tools for creating­comfortable homes and living environments, including cordless power tools, battery-operated outdoor
power equipment and pneumatic tools.

for Makita

Output

Evolving into a Supplier ofa Comprehensive Range of
Cordless Products pp. 15-16

Outcomes
Society, including Customers• Reducing environmental impacts• Boosting work efficiency andproductivity• Early recovery from disasters• Peace of mind during times of disasterp. 20

Shareholders and Investors• Medium- to long-term enhancementof corporate value• Returns to shareholders
Total payout ratio 
Operating profit ratio 
EPS Material Issues to Prioritize pp. 17-19

58.0%
8.9%
¥162.13• Enhancement of information disclosure
Meetings with shareholders
and investors 
221(Fiscal year ended March 31, 2024)
pp. 23-26

Employees
Reducing
environmental
impactContribution
to affluent
communities
and daily lives

Strengthening
the management base

• Contributing to decarbonization• Contributing to a resource-recycling society• Improving onsite work efficiency
and productivity• Supporting early recovery from disasters• Offering peace of mind during timesof disaster• Respect for human rights• Employee development, safety,
and health• Thorough compliance• Strengthening corporate governance• Workplaces where diverse humanresources can work with passion
and enthusiasm• Systems that create an environment
supportive of employees’
self-driven growth
Average length of service offemale employees 
16.8 years(non-consolidated)
Percentage of female managers

17.4%(Makita Group, consolidated)
pp. 30-34

Business Partners• Realization of fair, equitable,transparent, and honest transactions• Sustainable supply chain throughCSR procurement
p. 34

Makita Report 2024

12

Makita’s Value Creation

Makita’s Strengths
Makita has set itself the long-term target of becoming a “Strong Company” and is striving to contribute to
the creation of a sustainable society and consolidate a strong position in the industry worldwide as a
global supplier of a comprehensive range of tools for creating comfortable homes and living environments,
including cordless power tools, battery-operated outdoor power equipment, and pneumatic tools.
On the financial side, it is Makita’s basic policy to maintain a business structure that is resilient in theface of unforeseen changes in the business environment while working to both sustainably enhance­corporate value and secure stable dividends for our shareholders and investors.

Development
In 2005, Makita was a pioneer in selling professional-grade
electric power tools utilizing lithium-ion batteries, and thisprovided the catalyst for our launch of a number of new­cordless products that utilize our industry-leading battery
charging/discharging technologies and motor technologies.
Makita’s provision of the industry’s preeminent lineup of
products is the direct result of proactive development overa broad range of product categories, including cordless­products that provide alternatives to AC products with powercords and engine-powered products. Moreover, batteries areavailable in several voltages for various applications and eachbattery can be used with a range of our products, making
high compatibility and a rich product lineup one of our major
product strengths.
In recent years, we have been expanding and enhancing
our cordless products beyond power tools to include outdoor
power equipment (OPE); cleaning equipment such as cleaners;
and products with utility for outdoor activities and times ofdisaster when power sources are difficult to come by such ascooler & warmer boxes and microwaves.

With production bases in eight countries (Japan, China,
Romania, Thailand, the U.K., Brazil, the U.S., and Germany),
approximately 90% of Makita products on a productunit basis are manufactured overseas. By maintaining­production bases in major regions around the world, we are­positioned to not only promptly address currency, disaster,geopolitical, and other risks but to quickly meet changes indemand in each region. In recent years, we have been working
to increase production capacity in anticipation of sales­expansion and the further multipolarization of
global production.

In addition to taking advantage of the persistent ingenuityof employees in our factories, we are adopting and utilizing
cutting-edge technology, such as IoT and robotics, to build
a framework that can efficiently manufacture consistently
high-quality products anywhere in the world, regardless ofthe experience or intuitive understanding of individual workers.
By deploying and sharing our ingenuity and know-how related
to thorough waste elimination at every factory, we are­continuing our efforts to pursue an even more advanced levelof craftsmanship to ensure stable and profitable manufacturing
even in a changing cost and demand environment.

Production

Sales and Services
Makita operates 129 sales and service bases in Japan (as ofApril 2024) in addition to directly managed sales bases insome 50 countries overseas, allowing the execution of­finetuned sales and services. One of our strengths lies in our
industry-leading sales and service network around the world,
where we provide customer- and community-based services.
Moreover, Makita’s policy is to maintain inventories of­products and repair parts at each location to ensure theprompt and stable provision of products and services, and to
be ready to respond to supply chain disruptions. We are able
to contribute to efficiency and productivity gains for customers,
which helps us build trusting relationships. In addition, by

13

Makita Report 2024

using this network to gather feedback on our products andservices from customers throughout the world, we can­understand their needs and incorporate them into plans for
new products and services.
In recent years, sales of cordless OPE, which are physicallylarger than power tools, have been growing worldwide, andwe have proceeded by establishing new and expanded­distribution bases, and establishing bases close to the­cordless OPE market. With the foundation for customer­service completed, going forward we will continue to fully
utilize our existing locations to enhance our services.

JapanEuropeNorth America

Share of
Revenueby Region

16.6%
48.1%
12.7%

Asia
(excluding Japan) 6.2%
Central andSouth America

(FYE 2024)

Oceania

6.7%
7.6%

 he Middle East
T
and Africa

2.1%

Overseas

Overseas andDomestic
Production(Product Unit Basis)(FYE 2024)

91.7%

Domestic

8.3%

Non-JapanesePower Tools Share of
Revenue by
Product Category(FYE 2024)

Outdoor Power
Equipment,
Household andOther Products 

54.5%
24.4%

 arts, RepairsPand Accessories  21.1%

Breakdown of
Employees by
Nationality(FYE 2024)

80.5%

14,228 people

Japanese

19.5%

3,441 people

Makita’s Global Network

Makita Corporation Head Office
Sales Subsidiary Branches

Sales and Production Subsidiaries

Service Centers

Production Subsidiaries

Technology Development Subsidiary

Sales Subsidiaries

Procurement Subsidiaries

Makita Report 2024

14

Makita’s Value Creation

Evolving into a Supplier of a Comprehensive Range of Cordless Products

Having started out as a manufacturer of power tools, we are now striving to evolve into “a Supplier ofa Comprehensive Range of Cordless Products.” To this end, we will leverage the battery charging/­
discharging and motor technologies we have cultivated through cordless power tools to expand our­cordless product lineup such as cordless outdoor power equipment (OPE), cleaning products, disaster­preparedness and rescue products besides power tools.
For OPE, engine-powered units were once the standard. However, in recent times there has been a shift
toward cordless products in step with growing awareness of climate change. Cordless OPE emits no
exhaust gas during use, makes less noise, and produces little vibration and thus has the potential togreatly help in addressing major social issues like climate change. We are strengthening our cordless OPEwith an eye to eventually establishing it as a pillar of our business alongside cordless power tools.
Because Makita’s cordless products run on batteries, they can be used anywhere, even without a powersource. This also makes them easier to maneuver since there is no power cord, so they can be used fora wide range of applications, including cleaning and post-disaster reconstruction.
Going forward, we will continue to expand our lineup of cordless products, promoting the shift towardbattery-powered products rather than the engine-powered and thereby helping to solve social issues.

Merits of Cordless Products
Products generate zero exhaust gas (during use),
produce less noise and vibration than
engine-powered products

The elimination of a power cord improves work
efficiency and makes them easier to use

Eliminates the tripping hazard of power cords andotherwise helps prevent jobsite accidents

Helps improve work efficiency with no needfor a power outlet

Reduces
environmental
impact andfacilitates progress
towards
decarbonization

15

Makita Report 2024

Improves safety,
comfort andconvenienceBusiness Description
Power Tools
Makita power tools are used in many settings, such as residential andlarge-building construction sites, factories, and a variety of other locations.
Since becoming the first company in Japan to manufacture and sell portableelectric planers in 1958, we have dedicated ourselves to the development oftechnology to enable better approaches that include drilling, fastening, cutting,polishing, and more. We are responding to the diverse needs of customers witha robust lineup of products embodying our advanced technological expertise.
Outdoor Power Equipment (OPE)
In the outdoor power equipment category, which includes lawn mowers,
grass trimmers, chainsaws, and blowers, we are focusing on developing
cordless products that, in addition to such merits as being lightweight andquieter, making them easy-to-handle for people from all walks of life, produce zero exhaust emissions. Makita is contributing to decarbonization byproactively developing cordless OPE that can be used by professionals foreven heavy-duty tasks.
Cleaning Products
Makita’s cordless products play important roles in building maintenancetasks beyond construction sites, such as in offices, shops, and warehouses.
We are expanding our product lineup to better meet the needs of­professionals, including developing products with strong suction power,
durability, and excellent mobility.

Disaster Preparedness and Rescue Products
Makita’s highly durable, highly powered cordless products are also used in
post-disaster reconstruction. In contrast to engine-powered products,
cordless products are easy to start and can be used both indoors andunderground as they do not emit exhaust, making them advantageous in
rapid disaster reconstruction. We also offer products that support daily lifein the wake of a disaster, such as our Cordless Cooler & Warmer Box and­microwave oven.
Parts, Repairs, and Accessories
Accessories (including consumable parts such as saw blades and whetstones)
can significantly impact work quality and efficiency. Makita provides
a ­lineup of long-life accessories optimized for work tasks. In addition, ournetwork of businesses in each part of the world facilitate rapid and stablerepairs and parts supply, enabling us to contribute to improving our­customers’ production and work efficiency.

Makita Report 2024

16

Makita’s Value Creation

Contributions to Solving Social Challenges

Material Issues and SDG Initiatives
Makita has identified material issues that should be prioritizedfrom among the various social issues. Through our business,
we will contribute to the achievement of the SDGs by working
to resolve challenges related to these issues.

Material Issue Identification Process
Priority material issues were identified through the following process.

1

Identification of Issues

2

Based on the evaluation items of
ESG evaluation organizations, theSDGs, and dialogue with shareholders
and investors, we identified material
issues as well as stakeholder­expectations and social trends.

Drafting

3 Material Issue Identification

Based on the identified issues,c­ urrent management concerns, andthe business environment, theSustainability Committee Secretariat
prepared a draft outlining theCompany’s material issues.

Based on the draft prepared by
the secretariat, the Sustainability
Committee discussed and decided
on the final draft, which was­subsequently approved by the
Board of Directors.

Makita’s Material Issues
Materiality

E

S

Reducing
environmental
impactContribution toaffluent communities and daily
lives• Contribute todecarbonization• Contribute toa resource-circulating
society• Improve work efficiency
and the productivity offield operations• Support early recovery
from disasters• Offer peace of mind
during times of disaster• Exercise respect forhuman rights

Strengthening
the management
base

G

17

• Provide for employee
training, safety, andhealth• Ensure compliance• Strengthen corporate
governance

Makita Report 2024

Specific Key Initiatives• Active development of cordless OPE to
replace engine-powered products• Utilization of renewable energy andenergy conservation• Promotion of the elimination of plastic• Engagement in battery recycling• Active development of cordless products• Expansion of sales and service base­network with close ties to customers
and communities• Expansion of logistics functions andproduction capacity• Maintenance of a stable inventory thatwill not run out in times of emergency• Ensure thorough consideration of humanrights throughout the supply chain• Development of human resources andpromotion of diversity and inclusion• Ensure employee safety and health• Ensure awareness of and ensure­compliance with laws and regulations• Further improvement of the effectivenessof the Board of Directors

SDGs Contributions

Materiality in Relation to Businessare utilizing our industry-leading battery charging/­

Makita has set being a “Strong Company” as its long-cordless OPE and thus helping to realize decarbonization.

term goal. To achieve this goal and realize a sustainable

discharging and motor technologies to promote the use of
In addition, our product lineup is steadily expanding,society, we are identifying the material issues describedwith the proportion of revenue accounted for by

previously and working toward their resolution. Of these­cordless OPE product sales growing from about 60% inmaterial issues, we have positioned the active develop-

FYE 2020 to about 90% in FYE 2024.

ment of cordless OPE as a priority initiative under E:
Reducing environmental impact. Under S: Contribution
to affluent communities and daily lives, we have posi-Contribution of Cordless OPE Product Sales to Revenue
FYE 2020

FYE 2021

FYE 2022

FYE 2023

FYE 2024

59%

66%

75%

80%

88%

tioned the active development of cordless products andexpansion of our community-based and fine-tuned salesand ­service network as a priority initiative.
We have recently been focusing on products that use
E: Reducing environmental impact throughhigh-powered 40Vmax batteries, which can achieve thecordless products

same power and feel as engine-powered products, andEngine powered equipment has long been the conven-

we are seeing a continually increasing shift fromtional standard, particularly in OPE; however, recent

engine-powered to cordless products in the OPE market.

years have seen increasing recognition that exhaust

To further grow our cordless OPE business, we will

fumes exert a negative environmental impact. According­continue to strengthen our high-quality products to

to materials published by the California Air Resources­satisfy our professional customers, based on the battery

Board, using an engine-powered lawn mower for one

charging/discharging technologies and motor technologies

hour produces the same amount of air pollutants as

we have cultivated with our cordless power tools.

­driving a car for 300 miles (approximately 480 kilometers).

By actively developing and expanding sales of cordless
OPE, we strive to contribute to the realization of­decarbonization and connect this with the further
growth of Makita.

Products that Reduce Environmental Impact

UB003C
Battery Powered Blower(International Model)
Source: https://www.power.com/community/green-room/blog/
next-step-toward-electrification-everything?langcode=en

A cordless model with the same
power as a 50 mL engine and canbe in use for a long time.

In California, starting on January 1, 2024, sales of all
small internal combustion engines and similar tools arebanned. Similar restrictions are gaining momentum
around the world.
With engine-powered products facing such restrictions,cordless products offer a solution. Cordless products
emit zero emissions during use, thereby helping reduce

UC022G/UC027G series
Cordless Chainsaws
This series offers the same ­powerfulfeel and acceleration as a 35 mL
engine-powered model, but ismuch more lightweight.

environmental impact.
Against this background, Makita ceased production ofengine-powered products in March 2022. Furthermore, we

Makita Report 2024

18

Makita’s Value Creation

Contributions to Solving Social Challenges

S: Contribution to affluent communities and daily

customers, so it is essential to have a system for fast andlives through cordless products

stable repair and logistics to contribute to work efficiency

Cordless products offer more advantages thanand productivity at worksites. In addition, having

a reduced environmental burden thanks to zero gas­sufficient inventory at every base enables us to provide

emissions. Traditionally, power tools have almost always

products and services quickly in the event of a disaster,

had AC cords, but because our rechargeable products

contributing to early recovery.

are cord-free , they are much easier to use and more

We will expand our network of bases to support our­efficient to work with. Switching from AC-powered

activities in local communities aimed at the realization

products to cordless products helps to preventof sustainable societies around the world.

­power-cord related tripping and other accidents.

We believe we will both differentiate ourselves from

Cordless products contribute to affluent communities

other companies and contribute to resolving socialand daily lives by improving work efficiency andissues by further refining our cordless product­productivity at construction sites around the world.

­development and sales and service systems, thereby

In addition to these advantages, 40Vmax battery-­powered products are characterized by their high power­taking us one step closer to our long-term goal of beinga “Strong Company.”

and durability, and can perform tasks that are difficult
with conventional cordless products. These can beincreasingly used in an ever-wider range of applications.
One such example is at disaster reconstruction sites.

Products that Contribute to Affluent Communities
and Daily Lives

High-powered 40Vmax battery products are capable ofefficiently crushing rubble and cutting rebar, enabling
swift recovery.
Makita’s cordless products, including those poweredwith 40Vmax batteries, have a number of advantages
that give them an edge over AC and engine-powered
products at disaster sites. These advantages include theirability to function on battery power when no electricalsource is available; their ability to function even in

HM004G
Cordless Breaker
AC products are the mainstream
for 30kg breaker, but even though
this model is cordless, it has more
power than AC products. Because
there is no power cord, this modelis easy to handle and facilitateshighly ­efficient work.

low-oxygen environments, which engine-powered­products cannot; and their utility indoors, underground,and in other enclosed spaces because they do notemit exhaust.
Alongside the advantages of cordless products, ourefforts to contribute sustainably to solving social issues aresupported by our global network of sales and service bases.
With sales bases in a number of countries and regions
around the world and a stable inventory of both­products and repair parts, we are able to conduct sales
as well as services such as swift repair and logistics.
Broken tools and being unable to promptly supply­products causes delays and reduced efficiency for our

19

Makita Report 2024

CE003G/CE004G
Cordless Power CutterThis lightweight and compact
model offers high-speed, powerful
cutting, and, unlike engine-­
powered models, emits zero
exhaust gases, so it can be usedindoors or underground.

Value Offered to Society, Including Customers

01

02

Cordless OPE emits zero exhaust during use andcontributes to decarbonization. Furthermore, in
addition to not emitting exhaust gas or otheratmospheric pollutants, cordless OPE is quieter
than engine-powered equipment and hasa ­significantly lower environmental impact.

In addition to the unique merits of cordless­products—including improving safety, convenience,and comfort for customers—Makita contributes toefficiency and productivity gains for customers byproviding prompt and stable repairs and logistics­services leveraging our robust network of bases.

Reducing Environmental
ImpactBoosting Work Efficiency
and Productivity

03

04

Makita products are indispensable for building
infrastructure and play a vital role in disaster recovery.
Utilizing our robust network of bases to promptly
and stably deliver cordless products and services
that contribute to efficiency and productivity
gains, we support early recovery from disasters.

During times of emergency, batteries for cordlessproducts can function as backup power sources.
For example, batteries used in cordless cleaners
and the like can also be used to power radios andlighting equipment. Also, with a USB adapter, thesebatteries can charge smartphones and add an extra
degree of peace of mind if a disaster occurs.

Early Recovery from
Disasters

Peace of Mind During Timesof Disaster

Aiming for Coexistence and Mutual Prosperity with Stakeholders
A Worldwide Network of Bases Supporting the Makita Brand
Reconstruction demand from the Ise Bay typhoon in
1959 was a major catalyst for Makita’s development
as a power tool manufacturer, and this instilled in us
the awareness that we must always stand in supportin times of disaster. When a disaster occurs somewherein the world, we actively support our customers, andwhen the office in charge of the disaster-stricken area
reports the situation to the Head Office, the status of
support activities for our customers is included in thereport. This attitude permeates every corner of theCompany. The source of the Makita brand’s strength
is the trust we have built by standing with our

supported by our network of finely tuned offices
around the world.
In recent years, climate change has resulted in­frequent typhoons, torrential rains, and other natural
disasters that have caused extensive damage in many
parts of the world. We will always stand in support intimes of disaster, and we aim to grow together withsociety by staying close to our stakeholders, including
our customers, and working together to overcome
difficult times, as well as by utilizing our finely tuned
network of offices to quickly and stably provide products
and services useful in disaster reconstruction.

­partners through difficult times. This source is

Makita Report 2024

20

Makita’s Value Creation

Financial & Non-financial Highlights

Financial
Revenue

Operating Profit & Operating Profit Ratio(Million yen)

(Million yen)

800,000

741,391

700,000

80,000600,000

60,000500,000

40,000400,000

20,000

0

2020

2021

2022

2023

2024

(%)

25.0

100,000

0(FYE)

66,169

20.0
15.0

8.9

10.0
5.0

2020

Operating profit

2021

2022

2023

2024

0
(FYE)

Operating profit ratio

Revenue declined 3.0% year on year to ¥741,391 million as a resultof sluggish residential demand in various countries and investment
restrictions in the architecture and construction markets.

Operating profit increased 134.3% to ¥66,169 million as a result ofsuch factors as Group-wide progress in inventory reduction and theelimination of waste from business operations as well as an improvement in the cost-of-sales ratio thanks to exchange rate fluctuations.
Operating profit ratio increased by 5.2 points year on year to 8.9%.

Profit Attributable to Owners of the Parent

ROE(Million yen)(%)

80,00012.0
10.0

60,0008.0

43,69140,000

4.0

20,000
0

5.3

6.0

2.0
2020

2021

2022

2023

2024

0
(FYE)

2020

2021

2022

2023

2024

Profit attributable to owners of the parent increased 273.3%­year-on-year to ¥43,691 million.

ROE increased 3.8 points year on year to 5.3% thanks to increased
profit attributable to owners of parent.

R&D Costs

Capital Expenditures(Million yen)

(Million yen)

14,31415,00060,00010,00040,0005,000

20,000

0

2020

2021

2022

2023

2024

R&D costs decreased 4.0% year on year to ¥14,314 million.

21

Makita Report 2024

(FYE)

0
(FYE)

17,851

2020

2021

2022

2023

2024

(FYE)

Capital expenditures decreased 54.3% year on year to ¥17,851­million yen. This is mainly attributable to warehouse reconstruction
at the Okazaki Plant, as well as the construction of the Romania
warehouse and of new office buildings in Finland and Estonia.

Non-financial
Production Output and Unit Sales

Number of Employees(Million units)

60.00

22,00050.00

20,000

31.09

30.00

16,00023.36

14,00020.00
017,66918,000

40.00

2020

2021

Production Output

2022

2023

2024

0
(FYE)

2020

2021

2022

2023

2024

(FYE)

Unit Sales

Production output declined 11.3% to 23.36 million units year on year
as a result of a cooling demand environment and inventory reductions.
With the impact of a stagnant demand environment, unit sales
decreased 14.5% to 31.09 million units.

The number of employees decreased by 1,135 from the end of theprevious fiscal year to 17,669, mainly due to production cuts to
reduce inventory at manufacturing subsidiaries.

Increasing Presence of Female Employees

Greenhouse Gas Emissions (Scopes 1 and 2)(t-CO2)(t-CO2/100 mil. yen)Femaleemployees

80,00020.0

FYE 2031 targets

15.0

44,83610.0

FYE 2041 targets

5,816
Femalemanagers

Percentage offemale employees

40,000

7.7

Percentage offemale managers

232

57,07160,000

32.9%

17.7%

20,000

5.0

0

0

2023

Emissions

2024

(FYE)

t-CO2

Virtually
zero

Intensity per unit of revenue

Domestically, female employees have an average of approximately
17.4 years of service and have been active in a variety of departments
over long periods of time. Overseas, Makita has numerous female
employees in management positions who are demonstrating a wide
range of abilities in their respective fields.

With the goal of achieving virtually zero greenhouse gas emissions(Scopes 1 and 2) by FYE 2041, we are actively utilizing ­renewableenergy and engaging in thorough energy-saving ­activities.
Greenhouse gas emissions (Scopes 1 and 2) decreased by 12.9%
from the previous ­fiscal year to 57,071 t-CO2.

Water Usage

Waste Emissions(m )(m /100 mil. yen)33400,000

100.0

300,000

75.0

56.0
200,000

31.9

100,000
0

201,913

102,477
2020

2021

2022

2023

2024

50.0
25.0
0
(FYE)

（t）

(t/100 mil. yen)

25,0008.0

10.0

30,00020,00015,00013,727

10,000

3.7

5,000
0

2,992
0.9
2020

2021

2022

2023

2024

6.0
4.0
2.0
0
(FYE)

Water usage (Left axis)

Intensity per unit of revenue (Makita Corporation)

Waste emissions (Left axis)

Intensity per unit of revenue (Makita Corporation*)

Water usage (Left axis)

Intensity per unit of revenue (Overseas production subsidiaries)

Waste emissions (Left axis)

Intensity per unit of revenue (Overseas production subsidiaries)

We carry out monthly monitoring of water usage at business bases
and strive to reduce water usage. Although water usage decreased
due to reduced unit production output, intensity per unit of revenue
for Makita Corporation rose 18.1% year on year to 31.9 m3/100­million yen and for overseas production subsidiaries remained ata similar level to the previous year at 56.0 m3/100 million yen.

We are striving to reduce our final disposal volume of waste by thoroughly sorting waste in order to promote recycling. Final disposal volume
of waste generation decreased due to reduced unit production output,
with intensity per unit of revenue for Makita Corporation* remaining at
a similar level to the previous year at 0.9 tons/100 million yen and for­overseas production subsidiaries falling 7.3% to 3.7 tons/100 million yen.
* Applicable only to the Head Office, Okazaki Plant, and Nisshin Office.

Makita Report 2024

22

Makita’s Value Creation

Message from the Director of the Administration Department

By steadily securing ROE thatexceeds the cost of equity and­creating a rewarding work
­environment, we will realize ourlong-term goal of being a “Strong
Company” and ­maximize­shareholder value.

Director, Corporate Officer,
General Manager of Administration Headquarters

Yukihiro Otsu

Basic Finance and Capital Policy
Previously, the Makita Group operated under the understanding that good results naturally
emerge through the execution of strategies. However, after the rapid changes in earnings
environment during the COVID-19 pandemic, Makita began to feel the need for a more s­ trategic
management approach that includes securing asset efficiency while ensuring appropriate­production and inventory management along with global human resource development.
Against this backdrop, we have created a finance and capital policy aimed at expanding
the equity spread by reducing the cost of equity while securing a stable ROE of 8%–10%that exceeds the cost of equity at 6%–8%. As the general manager of the Administration
Headquarters, I believe that it is my responsibility to restore ROE back to the 8%–10% range
we achieved before FYE 2022. In addition, we must simultaneously implement humanresource development as well as diversity and inclusion, and achieve our long-term goal ofbeing a “Strong Company” by creating a work environment in which employees are comfortable and motivated.

23

Makita Report 2024

FYE 2024 Results and FYE 2025 Forecast
FYE 2024 consolidated net revenue decreased 3.0% year

For FYE 2025, we forecast consolidated net revenue ofon year to ¥741.4 billion, while operating profit increased¥710 billion, operating profit of ¥75 billion (operating

134.3% year on year to ¥66.2 billion (the operating profit

profit ratio of 10.6%), and profit attributable to owners ofratio was 8.9%). Revenue increased in Japan, Europe, andthe parent per share of ¥189.57.

Central and South America, but in North America andAsia it saw substantial decreases. The considerable rise inoperating profit was largely driven by an improvement in
the cost ratio due to impact of the weakened yen andreductions in transportation and materials costs offsetting

Revenue Trends(Million yen)739,260 764,702 741,391

800,000

reduced sales and production. As for cash flows, reflecting
inventory optimization efforts, net cash provided by

492,617

operating activities increased by ¥192.7 billion year on
year to ¥237.1 billion. Thus, after subtracting net cash

608,331600,000

400,000

used in investing activities of ¥25.6 billion, free cash
flows reached ¥211.5 billion, and cash and cash equivalents at the end of the fiscal year were ¥196.6 billion. The

200,000

equity ratio rose to 82.2% (from 70.0% in the previous

0year), and our balance sheet remained strong.

2020

2021

2022

2023

2024

(FYE)

Initiatives to Improve ROE
Makita’s goal is to maintain ROE at a level that exceeds

10% by continuing to steadily optimize inventory andthe cost of equity. We have discussed ROE and the cost of

production, eliminating waste in operations, andequity internally for a while, but considering how import-­improving our efficiency.

ant it is to send a message to the stock ­market, we decided
to publish our approach and ­initiatives relating tothese subjects.
Before FYE 2022, our ROE was stably in the 8%–10%

ROE
(%)

range, but in FYE 2023 it dropped to 1.5% before evening

12out at 5.3% in FYE 2024. When we broke down ROE, our10

total asset turnover rate and financial leverage were­stable, but decreased profit margins caused it to decline.

6

was not caused by decreased earnings power, but rather

4

by a reduction in production to optimize inventory along2

forward, we aim to return to ROE to approximately

8.3

9.2

8

However, we believe that this temporary decline in ROE

with increased transportation and materials costs. Going

10.1

0

5.3

1.5

2020

2021

2022

2023

2024

Makita Report 2024

(FYE)

24

Makita’s Value Creation

Message from the Director of the Administration Department

Cash Allocation
For the past five years, of total operating cash flows of

As I mentioned, Makita has made large capital¥299.7 billion yen, we have used ¥211.1 billion yen (70.4%­expenditures over the past few years in anticipation ofof operating cash flows) in the form of capital expenditures

increased demand for cordless OPE, and we believe that

focused mainly on growth investments to generate demand

we now have a sufficient supply capacity with ourfor cordless OPE. Also, considering geopolitical risks, we­production and logistics bases.

have been proactively securing logistics warehouses andWe will continue investing in facilities with an eye to fur-developing bases to disperse our production, which wasther improving efficiency, pursuing IT-related growth invest-

previously centered in China. Our Thailand plant, establishedments, and making environmental investments. We will also

in 2011, has expanded its plant building as our principal

optimize our allocation of operating cash flows while­production base for the Asia market. Our Romanian plant­maintaining a healthy balance with shareholder returns.

started production in 2007, and has been expanding its­production capacity with the aim of increasing local produc-

Cash Allocation (FYE 2020 to FYE 2024)

tion for local consumption in Europe, and its total output
exceeded 50 million units in September 2023. Thanks tothese efforts, we have already secured production capacity
capable of generating more than ¥1 trillion in consolidated

Capitalexpenditures¥211.1 billion

net revenue and have established a supply structure that will

Operatingcash flows¥299.7 billion

be able to meet future increased demand .
In addition, we have raised our dividend payout ratio andimplemented a stock repurchase program, enabling us toreturn ¥83.7 billion to our shareholders.

Shareholder
returns¥83.7 billion

Dividends¥73.7 billion
Treasury stock repurchases¥10.0 billion
Other¥4.9 billion

Business Opportunities and Risks
The Company’s strengths include the Makita brandproducts. Another opportunity lies in future demand

backed by high-quality products and swift, finely tuned

related to building and c­ onstruction due to lower interest

services, robust technology and product development

rate policies in Europe and the United States, andcapabilities led by lithium-ion batteries and a strong

demand related to disaster restoration due to increasingly­balance sheet that enables us to supply short ­delivery

severe natural disasters. We are also considering thetimes and offer a vast lineup of products. Thanks to theimpact of urbanization in developing countries as well as

ongoing shift away from engine-powered to cordlessinfrastructure investment in developed countries. At the

products, we are now seeing an array of business oppor-

same time, we are monitoring the business environment

tunities in the OPE market, which is several times larger

by, for example, keeping an eye on political risks related

than the power tool market that has long been ourto US trade tariffs targeting China, China’s huge production

focus. We are also in the process of ­creating new

capacity, and the rising costs of various materials.

demand by launching new 40Vmax battery-powered

Strengthening Human Capital and Diversity & Inclusion
Investing in human capital is common sense in corporate

organization with employees with varied experiences

management. To secure excellent employees, we need to

and ways of thinking can help create new values. To

establish a corporate culture in which everyone thrives,

achieve this, we have set “provide for employee training,

regardless of gender or nationality. I believe that ansafety, and health” as one of our material issues. We have25

Makita Report 2024

set and have been monitoring three KPIs to increase

seminars for female employees on career development.

effectiveness. We want our employees to experience

Makita’s Head Office is located in Aichi Prefecture, but

working overseas at a young age so that they can learn

with the opening of the Electronic Control Development

about different cultures and business practices in otherCenter (Tokyo Office) in Shinagawa, Tokyo, we are now

countries, think about things from a global perspective,

able to improve our recruitment efforts for excellent

and gain the confidence to act on their own. Recently,

engineers in the Kanto region, so we can continue to

we have hosted external lecturers to hold in-housedevelop attractive products.

Approach to Shareholder Returns
Our basic approach to shareholder returns is to pay anannual dividend of at least ¥20 per share and maintaina total payout ratio of at least 35%. The dividend per

Cash Dividends per Share/
Dividend Payout Ratio and Total Payout Ratio
(Yen)

72
69
(30.2%)(30.2%)

80

share in FYE 2024 was ¥57, an increase of ¥36 year on
year, and the dividend payout ratio was 35.2%. When we
include the treasury stock repurchases with an upper

60

57
58.0%(35.2%)

53(30.1%)

limit of ¥10 billion, which concluded on July 7, 2023, thetotal payout ratio is 58.0%. The purpose of the treasury

40

stock repurchases was to increase shareholder profits
through flexible capital policies and improved capitalefficiency, but we are also considering implementing

21(48.7%)

20

stock repurchase program that considers the stock pricelevel and PBR, among other factors.

0

2020

2021

2022

2023

2024

(FYE)

Note: Figures in parentheses indicate dividend payout ratio

Investor Engagement
We hope to gain the support of our shareholders andinvestors through active dialogue about our growthstrategy to achieve our long-term goal of being a “Strong
Company.” We are striving to improve shareholder value
by reflecting their feedback in our management, such asconcerns about cash allocation and capital efficiency.
Moreover, we will maximize Makita’s corporate value by

p. 26

steadily implementing our growth strategy and will
simultaneously strengthen our organizational capabilities
by improving employee satisfaction and motivation totake on new challenges while promoting our sustainability

57
58.0%

activities. We would like to ask for your continued support.

2024 (FYE)

Makita Report 2024

26

Makita’s Value Creation

Business Overview

Market Environment

Future Strategies

Interest rates have remained high despite the easing of

Expanding Our Cordless Lineup

inflation, resulting in a sluggish building and construc-

Makita is further expanding its lineup in accordancetion market worldwide. At the same time, measures towith its goal to be “a Supplier of a Comprehensive

counter climate change have become increasingly

Range of Cordless Products.” In power tools and cordless­serious, with trends toward energy saving andoutdoor power equipment (OPE), we are actively replacing­energy-generating buildings, the spread of EV charging

AC products that have power cords and engine-powered

equipment, and the shift from engine-powered to

products with cordless products. In addition, we are­cordless vehicles all gaining momentum while aroundexpanding the range and applications for cordlessthe world demand grows for highly efficient tools that­products that use our batteries, introducing models withassist with labor shortages. We therefore expect thatapplications not only for worksites but also for outdoor

the demand for environmentally friendly products

work and in times of disaster when it is difficult towill remain strong, creating favorable conditions forsecure power sources. Such products include cooler &the Company.

warmer boxes and microwaves as well as cleaning

Amid this environment, we aim to achieve sustainablegrowth by evolving into “a Supplier of a Comprehensive

equipment for such uses as building maintenance.
In particular, demand for cordless OPE is expected toRange of Cordless Products” by leveraging and further

grow as the trend toward decarbonization intensifies,

refining our strengths, including our extensive cordlessand we will further augment our lineup with products

product lineup and finely tuned sales and service network.

that provide the same level of usability as engine-­
powered products.

Fiscal Year in Review
In FYE 2024, countries around the world implemented
money tightening policies in response to inflation andinterest rates remained high, resulting in stagnant­housing investment. Revenue decreased 3.0% from FYE
2023, due to the impact of weak global housing
demand and limited investment in the architecture andconstruction markets, particularly overseas. Operating
profit increased 134.3% from FYE 2023 due to an
improved cost-of-sales ratio thanks to such factors as
reduced transportation costs and exchange rate effects.
In FYE 2024, we chose waste elimination and inventory
reduction as Company-wide keywords, and everyone
worked together toward these goals across all aspects
of internal operations.
With regard to inventory, reduction, we reflected on
the sudden shift in demand following the COVID-19
pandemic and the resulting buildup and turned to IT tomake inventory information, including that of overseas
bases, available Group-wide. The new system was fully
up and running by the end of FYE 2024 and has enabledthe Head Office to monitor inventory status across theGroup, including at overseas sales bases. We will continue
to promote systems that enable this Groupwide.

27

Makita Report 2024

Utilizing Human Capital
As Makita continues to expand its business globally, we
believe it is important to have a global, diverse workforce capable of carrying on this growth into the future.
To ensure optimal human capital utilization, we have set
indicators for the following: the swift training of new
human resources to be competitive, the promotion of
women’s advancement, and the encouragement of
employees to use childcare leave. Through our efforts toachieve these goals, we will create an environment inwhich diverse human resources can play an active role
globally, regardless of gender, leading to Makita’s­sustainable growth. For details, please see pages 30-34.

Management That Takes the Cost of Capital and Share Prices into Consideration
Until FYE 2022, the Company’s ROE hovered aroundIn addition, although the share price declined after

8%–10%, generally exceeding the estimated shareholders’September 2021, when demand and the associatedcost of capital of around 6%–8%. In FYE 2023, a decreasebusiness growth slowed due to the COVID-19 pandemic,

in sales volume due to a rapid change in the demand

it has since returned to pre-pandemic levels. Althoughenvironment and excess inventory led to ROE falling to

our PBR remains higher than 1, it is on a downward trend in

1.5%, and in FYE 2024 ROE remained below the cost ofline with the stagnant movement of the share price.

shareholders’ capital at 5.3%.
Unit

FYE 2019

FYE 2020

FYE 2021

FYE 2022

FYE 2023

FYE 2024

Revenue

Millions of yen

490,578492,617608,331739,260

764,702741,391

Operating profit

Millions of yen

78,30564,046

88,46491,72828,246

66,169Operating profit ratio

%

16.0

13.0

14.5

12.4

3.7

8.9

ROE

%

9.9

8.3

10.1

9.2

1.5

5.3

Stock price at end of year

Yen

3,855

3,315

4,745

3,935

3,280

4,270

PBR

Unit

1.8

1.6

2.0

1.4

1.2

1.3

Policies and Targets for Improvement
We will expand the equity spread by improving ROE, which is presently below the cost of shareholders’ capital,
and maintaining it at a stable 8%–10%, the level prior to FYE 2022, while simultaneously reducing the cost ofshareholders’ capital.

Issues to Be Addressed
Based on the above targets, we will address the following issues.
1. Improve ROE• Improve profitability and capital efficiency by achieving­inventory reduction targets• Improve operational efficiency across all departments and­comprehensively reduce costs through waste elimination• Strengthen profitability by differentiating ourselves fromour competitors by expanding our lineup of high-value-added­products for professionals that utilize 40Vmax batteries aswell as by leveraging our robust network of bases to provide
high-quality after-sales services

2. Reduce Cost of Shareholders’ Capital• F ormulate and implement business strategies to ensure appropriate responses tochanges in the environment•P romote sustainability management andhuman capital management•S upport investor understanding throughIR activities

Makita Report 2024

28

Makita’s Sustainability Management

Progress of Sustainability Management

Makita has been implementing sustainability initiatives in order to grow sustainably together withsociety. The Sustainability Committee was established in 2021 to support these efforts, and in 2022
we were able to newly identify important material issues requiring special priority. Please see pages
17 to 19 for more information about Makita’s material issues.
We will contribute to the realization of a sustainable society, including decarbonization, by further
strengthening our efforts in this area.

Basic Policy on Sustainability

1

As a global supplier of a comprehensive range of tools for creating comfortable homes and living environments, Makita will focus on solving environmental problems and other social issues through our main­business, and work to achieve a sustainable society.

2

Makita aims to develop in harmony with society by promoting corporate ethics and compliance, respect forhuman rights, protection of the environment, quality assurance, responsible procurement activities, etc. In particular, we consider carbon neutrality and other environmental problems to be issues of the highest importance.

3

Makita will engage in highly fair and transparent corporate management, thereby building strong­relationships of trust with all our stakeholders.

Sustainability Promotion
Our long-term target as a “Strong Company” is to­contribute to the creation of a sustainable society andconsolidate a strong position in the industry worldwide
as a global supplier of a comprehensive range of tools
for creating comfortable homes and living environments,
including cordless power tools, battery-operated outdoor
power equipment, and pneumatic tools.
The most significant initiative we have undertaken
to achieve a sustainable society is the evolution to“a Supplier of a Comprehensive Range of Cordless
Products” and the promotion of rechargeable lithium-ion
batteries. Utilizing battery charging/discharging andmotor technologies cultivated through the developmentof power tools, we are promoting the use of rechargeable batteries starting with cordless outdoor power
equipment (OPE) and a wide variety of other products.
Moreover, through our international network of sales
and service bases, we hope to contribute to reducing
the burden on the global environment and improving
work efficiency and productivity at worksites aroundthe world.
Among the social issues that we have been focusing
on for many years are those pertaining to the environment. In recent years, typhoons and other wind andflood disasters have become more frequent, and theimpact of climate change on society is growing.
Decarbonization is becoming even more critical for­companies, so in 2021 we established the Sustainability
Committee, chaired by the President, as a structure to29

Makita Report 2024

promote initiatives at Makita for carbon neutrality andother sustainability issues. The Sustainability Committee
deliberates on sustainability-related policies, targets,measures, and other matters. In FYE 2024, the Sustainability
Committee deliberated and reported on the progress ofcarbon neutrality initiatives, including on GHG emission
reductions, and the committee also leads the promotionof such initiatives across the Company as a whole.

Sustainability Committee

Board of Directors
Submission of
proposals
ReportMonitoring
Supervision

Sustainability Committee
Committee Chair: President
Vice Chairs:
General Manager of Quality Headquarters,
General Manager of Administration Headquarters
Committee members:
Department heads of major divisions

Makita’s Sustainability Management

Society (Disclosure of Human Capital, etc.)

Makita is expanding its global business and has created an environment in which
diverse human resources can play active roles regardless of race or gender. Goingforward, Makita will continue to actively promote initiatives and working environments that enable diverse human resources to make the most of their abilities while
fulfilling its responsibilities as a global company by ensuring respect for human rights
and implementing CSR procurement in order to grow together with society.
Please see the Makita website (https://www.makita.biz/sustainability/#sec_social) for more information about our social initiatives.

Basic Approach to Human Resources
Since Makita’s expansion into the U.S. in the 1970s, theCompany has pressed forward and proactively growninternationally. In 2005, we launched our lithium-ion
battery-powered professional-use cordless tools aheadof the competition and, more recently, with environmental issues growing into an important theme globally,

Human Resource Strategies
Indicators for Human Capital• Efficiently training newly hired human resources tobe competitive as quickly as possible• Promoting women’s advancement• Encouraging employees to take childcare leave

we have been working toward evolving into a supplierof a comprehensive range of cordless products by shifting from engine-powered to battery-powered products.
This ability to flexibly respond to global market environment changes is the source of Makita’s growth. What
supports our growth is nothing other than the talents ofthe people working at Makita. “Don’t be angry, arrogant,panic, mope, or give up.” These are the words of Jujiro
Goto, who along with founder Mosaburo Makita built
this company and transformed it into “a power tools­corporation.” Grounded in this personal philosophy of
Mr. Goto, we strive to provide each and every Makita
employee with the opportunity to exercise his or
her talents.
Moving forward, Makita will comprehend changes in
the global market environment and strive to grow withdemand. To this end, we will advance the activities ofdiverse human resources and globalize Makita.

Efficiently Training Newly Hired Human
Resources to be Competitive as Quickly as Possible
Makita is expanding its business on a global scale, andmany of its employees have experience temporarily
working or training abroad. As of March 31, 2024,
approximately 26% of employees, excluding thoseworking at the Research and Development Headquarters
or Domestic Sales Headquarters, have worked overseas
on temporary transfers. For Makita to continue to growsustainably, it is essential that newly hired humanresources (both new graduates and mid-career employees)with diverse values gain international experience earlyon and receive training to be globally active. We areworking to achieve the target we have set of 20% of
employees sent for overseas training or temporary­transfer having worked at Makita (non-consolidated) for
five years or less by March 31, 2030.

Mr. Jujiro Goto’s personal philosophy

Makita Report 2024

30

Makita’s Sustainability Management

Society (Disclosure of Human Capital, etc.)

In FYE 2024, the number declined temporarily because

Promoting Women’s Advancement

the majority of young employees sent overseas who

Makita is working to create an environment that ishave been working at Makita for five years entered their­comfortable for women to work in and allows humansixth year. At the same time, we introduced a short-term

resources with diverse values to demonstrate their­overseas training system, so an increasing percentage­abilities to the fullest. As a result, the average length ofof our workforce now has overseas training experience.

female employees working at Makita in Japan is actually

After finishing the training, they spend several months

slightly higher than that of their male counterparts.

to a year in Japan on preparation, which leads to

We have set a target for the future to increase the­successful subsequent overseas assignment.

percentage of female managers at Makita (non-­To achieve our target, we will utilize short-term

consolidated) to at least 3% (10 or more people) by FYE­training programs to increase the number of young

2030, so that every female employee can play a more

employees who are eligible for overseas work.

active role, and we are advancing our efforts to achieve
this target.

Indicators

In FYE 2024, we held the Women’s Career Design
FYE 2022 FYE 2023 FYE 2024 FYE 2030

Percentage of employeestransferred overseas(or sent for training) thathave worked at Makita forfive years or less

Seminar over two sessions for interested female­employees. Seminar participants reflected on their lives,

17%

14%

12%

identified their strengths and unique abilities, and20%­created action plans for the future. At the second­session, Ayumi Ujihara, Outside Director, spoke on stage,
sharing her perspective as an experienced working

Initiatives for Achievement

woman about such subjects as looking at things• Proactively accepting internships and building­positively, enjoying work, and networking.

­relationships with university laboratories to lay theParticipants said that this was a good opportunity togroundwork for hiring excellent human resources

think deeply about their own career development, and• Launching short-term overseas training programs

we will continue to implement measures to promote theto enable more young employees to gain

active participation of female employees.

overseas experience• To foster international career development andincrease motivation amongst young employees, we
held a roundtable discussion with employees withoverseas work experience and shared the content in
the Company newsletter.

Reference
New Hires
(%)

350
300

31

28

212

200

15

8.5

8.9

6.3

50
0

25
20

150
100

35
30

289

263

250

32

10
5

2022

2023

2024

0

(FYE)

Newly hired employees
Percentage of new hires in the workforce
Percentage of employees that have worked at Makita for five years or less31

Makita Report 2024

Encouraging Employees to Take Childcare Leave

Indicators
FYE2022
Percentage ofFemaleManagers

0.7%(2 people)

FYE2023
1.0%(3 people)

FYE2024

FYE2030

1.3%(4 people)

3.0%(10 or more
people)Creating a rewarding environment that allows humanresources with diverse values to balance work and­family is vital to Makita’s continuing growth. We have
put in place a childcare leave system and a childcare
reduced-working-hours system. In recent years, theInitiatives for Achievement­percentage of women who use these systems has• Creating systems that allow flexible work styles, suchremained high, but theas through the expansion of the childcare reduced­percentage of men using

working-hours systemthem has room to improve.

• Actively recruiting female new hires

Therefore, we have set a• Encouraging women to take the exams for promo-­target of having at least 90%

tions to leadership and management positionsof eligible male employees at
Makita (non-consolidated)
use the childcare leave

Reference­system by FYE 2030 and are

Average number of years working at Makita by gender/
Percentage of women in leadership positions(year)

25
20

2.3(20 people)

2.2(19 people)

2.3(20 people)

17.0 16.8 16.8 16.3 17.4 16.1

working toward achieving
this goal.

(%)

2.5
2.0

15

1.5

10

1.0

5

0.5

Indicators
FYE 2022 FYE 2023 FYE 2024 FYE 2030
Percentage of male
employees using
childcare leave system

8%

25%

49%

90% ormore

Initiatives for Achievement

0

2022

2023

2024

Average number of years working at Makita for women (years)
Average number of years working at Makita for men (years)

0

(FYE)

• Making information on childcare leave available toworkplace managers to promote the creation ofan environment that encourages employees to use
childcare leave

Percentage of women in leadership positions (%)

ReferenceFYE 2022 FYE 2023 FYE 2024
Percentage of female employees
using childcare leave system

92%

100%

100%

Makita Report 2024

32

Makita’s Sustainability Management

Society (Disclosure of Human Capital, etc.)

Human Resource Training Systems

Human Resource Development at the China Plant

Supporting Growth through Training andInterviews with Supervisors

Makita is actively engaged in human resource development

In Japan, we carry out stratified training (tailored toencourage continuous growth through proactive train-

match each employee’s career stage) for new employees

ing at all levels, including leadership development andall the way through mid-career management candidates.

problem-solving training for managers. In addition,

Similarly, we maintain programs encompassing other­safety training and legal and regulatory training areforms of training, including on-site factory training, as­provided to those above a certain rank, and Japanesewell as correspondence training, part of which is paid for

language study sessions are held for those who plan toby the Company. Some promotion and advancement

go to Japan for training or those who wish to receive

evaluations entail management-related training, such as

Japanese language training.

at our China plant, the core of our production base. We

interview exercises with subordinates, to measure andprovide feedback on the individual’s management skills,
thereby helping to improve management andHuman Resource Education System at the China Plant
Training for each level­leadership skills.
In addition, employees regularly set targets at the
beginning of each fiscal year and meet with their­supervisors to discuss these results. We are committed
to supporting individual development, and supervisors
provide feedback to employees as appropriate during
interviews and give them opportunities to discuss the
future. Base salaries are determined by the previous
year’s evaluations and bonuses (twice yearly) fluctuate

GeneralemployeesNew
employeesNew
employeetrainingTeam
leader,Assistantteam
leaderAssistantmanager

Sectionmanager

SeniormanagerTraining for each roleOn-the-job
training

Legal and regulatory training
Safety training
Japanese language study sessions

according to semiannual evaluations and Company­performance in order to motivate employees.

Diversity & Inclusion Promotion

Education System Diagram

Makita believes the value of a company lies in being a

33

Makita Report 2024

Factory training

Overseas operation training

Sales training/repairs training

Training for new
employees

Rated training

2nd year of
employment
1st year of
employment

nationality, or disability, hold each other in mutual
respect, and are able to maximize their individual abilities in order to fully and actively contribute. Therefore,
we strive for fairness in hiring, assignments, promotions,and other aspects of human resource management,eliminating distinctions based on gender or other attriEnvironmental and safety & health education

Education concerning the Code of Ethics and compliance

Education for trainers/
promotion exam evaluators

SupportAll

CommonCareer plan training

Basicplace where all employees, regardless of age, gender,

Education by
Job Category

Communication education (self-development courses related to languages, business skills, specialized fields, etc.)

Exam for promotion

GeneralTraining for management leaders

Management

Training for newly appointed supervisors

Coaching training

Exam for
Grading/ Education by Level
Promotion

Cross-industrial
exchange training

Job Type

butes. In the Guideline to the Code of Ethics for Makita,
which serves as a code of conduct for all Officers andemployees of the Makita Group, we are working toensure that diverse human resources are able to actively
contribute. Our statement declaring respect for individual diversity is but one example of this commitment.

Securing the Safety and Healthof Employees

conduct that harms individual dignity. All employees,

Ensuring the safety and health of employees is also key

Ethics for Makita once a year without fail. This also

to sustainable growth of a corporation. We are imple-­covers overseas subsidiaries and we thoroughly emphasize

menting a variety of initiatives to ensure both sustainable

respect for human rights across the entire Group.

growth and the safety and health of our employees.

including part-time employees, are provided with information and training about the Guideline to the Code ofFurthermore, since we believe that it is important tofulfill our social responsibility for recognizing human

Safety and Health Activities

rights not just for ourselves but alongside all of the

Safety and Health Committee activities are conducted at­businesses in our supply chain, the Guideline to theeach business site in Japan and are based on a safety

Code of Ethics for Makita also stipulates that fulfillment

plan that is developed annually. Safety patrols of theof social responsibility and respect for human rights

working environment as well as hazard prediction(including working to eliminate child labor and forced­activities* and “Hiyari-Hatto” (near-miss) activities arelabor) are selection criteria for business partners.

conducted at each workplace and reported to the­committee with recommendations for improvement,
thereby creating a safer and more secure workplace.

CSR Procurement

There were 12 occupational accidents in Japan in FYE

Makita is striving Company-wide to deliver safe,

2024, none of which required 4 or more days of absencehigh-quality products to our customers to ensure thatfrom work. Going forward, we will continue to strive tothey can enjoy peace of mind when using its tools. In

prevent occupational accidents by providing thoroughworking to achieve this objective, we consider it import-

health and safety training and taking measures toant not just to comply with relevant laws and regulations

reduce hazards in the workplace.

but to conduct transactions with business partners fairly,* Activities aimed at preventing occupational accidents by identifying potential­hazards in specific workplace tasks and identifying the types of hazards that could
cause workplace accidents, and then eliminating unsafe employee behavior andunsafe work environments.

equitably, transparently, and honestly and to strive tobuild relationships with them as partners as well as topromote procurement activities focusing on social­concerns, including the environment, human rights,

Mental and Physical Health Support­corruption prevention, and proper hiring practices. We

In Japan, we are making Company-wide efforts tostipulate this in our Master Transaction Agreement andensure the mental and physical health of our employees

Basic Policy on Procurement. One pillar of this effort isby conducting stress checks, interviewing employees

our pursuit of responsible procurement activities, includ-

who work long hours, and providing in-house influenza

ing conducting annual surveys of the environmental

vaccinations. In addition, we distribute fan jackets andprotection activities of our business partners to, forhave installed water dispensers at the Okazaki Plant as

example, monitor environmental systems acquisition.

a measure against overheating. As for stress checks,
results are analyzed by workplace, and industrial physicians provide feedback to the person in charge of eachdepartment to encourage workplace improvements. We
are striving to improve employee mental health througha series of workplace improvements.

Respect for Human Rights
The Guideline to the Code of Ethics for Makita, which

Basic Policy on Procurement
1. Compliance with laws and regulations andsocial codes
2. Consideration given to reducing environmental
impacts
3. Provision of fair and equitable transaction
opportunities
4. Coexistence and co-prosperity based on
mutual trust

outlines the conduct expected of all Group Directors andemployees, clearly recognizes “respect for human rights”
and stipulates the importance of respecting all funda-

Please see the Company website(https://www.makita.biz/sustainability/social/03/) for details.

mental human rights and prohibiting discrimination and

Makita Report 2024

34

Makita’s Sustainability Management

Environment

We promote environmental management with the aim of achieving both­environmental protection and sustainable business growth. We have been actively
engaged in environmental protection activities based on the principles and aims
set forth in our Environmental Policy, established in 1998. Since 2022, we havebeen further strengthening our efforts by positioning contributing to­decarbonization and a resource-circulating society as our material issues.
For more information on our environmental initiatives, please visit the Makita website (https://www.makita.biz/sustainability/#sec_
environment) and read the Environmental Report (https://www.makita.biz/sustainability/report/#sec02).

Environmental Vision
The “Go Green” slogan symbolizes Makita’s commitment to continually providing new value as acomprehensive international supplier of tools. We hope to always remain a company that maintains a steady eye on society, challenging ourselves to create a “sustainable recycling- oriented
society” that harmonizes the environment with the economy.

Environmental Policy
Basic Principles
As a global supplier of a comprehensive
range of tools for creating comfortable
homes and living environments, Makita isaiming to conduct a wide range of environmental protection activities in order tocontribute to a sustainable society and theconservation of biodiversity.

Policies
1. Enforcement of environmental administrative
structure
2.Continuous improvement
and pollution prevention
3. Compliance with applicable laws and regulations

4. Establishment and review
of objectives and aims
5. Reduction of environmental burden
6. Disclosure

Please see the Makita website for the full text of our policies (https://www.makita.biz/sustainability/environment/01/).

Environmental Management
Makita has run its own environmental management sys-

ISO 14001 Certifications (As of April 2024)

tem since 1998. For the purpose of leveraging that sys-Japan

tem as a tool for mitigating environmental burdens, our

Aichi
Prefecture

Head Office, Okazaki Plant, Nisshin Office
Makita (China) Co., Ltd.

Head Office and Okazaki Plant first received ISO 14001

China

certification in 2007. Since then, our Nisshin Office andThailand

Makita Manufacturing (Thailand) Co., Ltd.

U.S.

Makita Corporation of America

Brazil

Makita do Brasil Ferramentas Elétricas Ltda.

U.K.

Makita Manufacturing Europe Ltd.

Germany

Makita Engineering Germany GmbH

Romania

SC Makita EU SRL

all of our overseas production bases have received thecertification and are now operating environmental management systems. We promote the protection of theenvironment at all of the business bases listed here andcarry out activities, such as Internal Environmental
Audits and environmental education, based on therequirements of the certification.

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Makita Report 2024

Overseas
Production
Bases

Makita (Kunshan) Co., Ltd.

Contributions to Decarbonization

GHG Emissions (Scopes 1, 2, 3) (FYE 2024)

Toward the realization of decarbonization, we are devel-

Scope 1oping products that contribute to solving environmental

Scope 2 

(0.9%)

problems and promoting environmentally friendly busi-

3.99

Scope 3 

(98.6%)

Category 1 (32.2%)

million t-CO₂

Category 4

(9.0%)

Category 11 

(54.9%)

ness activities. In addition, we have set reduction targets
for greenhouse gas (GHG) emissions reduction. Pleasesee page 44 for details.

(0.5%)

Categories 2, 3, 5,
6, 7, 12

(2.5%)

Notes: 1. Of the 15 categories in Scope 3, categories 8, 9, 10, 13, 14, and 15 havebeen excluded from calculation.
2. The figures in parentheses above are percentages of the total of Scopes 1
through 3, with 3.99 million t-CO2 as the denominator.

Initiatives in Our Business Activities

Energy Conservation

To reduce GHG emissions in our business activities, we

Our efforts toward reducing GHG emissions include

are actively utilizing renewable energy and conserving­pursuing efficiency gains for energy-consumingenergy where possible. In addition, to raise environmental­equipment used in our offices by, for example, ­installingawareness among employees, we conduct educational

LED lighting and high-efficiency equipment (AC units,

activities, including distributing energy-saving promotional­compressors, manufacturing machinery, etc.). In FYE

materials to employees and making regular inspections

2024, the total annual power consumption of our Headto check energy-saving responses undertaken at offices

Office, Okazaki Plant, and Nisshin Office decreased byand plants.

343,523 kWh compared to the previous year due to ourswitching to LED tubes, and improving AC units andUtilization of Renewable Energy

compressor efficiency.

We are working to reduce GHG emissions through suchmeasures as installing photovoltaic panels. In FYE 2024,

Switching to Environmentally Friendly Materials forphotovoltaic panels were installed at our overseas loca-

Products and Packaging

tion in Estonia. Photovoltaic panels were also installed in

To contribute to carbon neutrality, Makita is promoting

Japan at the shipping building at the Okazaki Plant asinitiatives to use biomass materials in the manufacture

well as in the Head Office.

of a portion of its products. Furthermore, in FYE 2022

We plan to continue installing photovoltaic panels at
our facilities in Japan and ­overseas and to switch torenewable energy sources for electricity used at our

we began switching from conventional to biomass­plastic bags in our product packaging.
To help reduce waste plastic across society, in addition

offices and other facilities. In FYE 2024, we introduced

to biomass materials, we are introducing recycled resin

renewable energy at our sites in Chile and New Zealand.

materials and started using bags and cases made from

In addition to photovoltaic p­ anels, some sites in Germany

these materials in FYE 2024.

and other countries have installed geothermal heating
and cooling systems and are working to reduce GHG
emissions through the use of renewable energy.

Makpac Type 2 (A-60517)
By using recycled resin materials, we reduced the amount of
raw materials used as well as GHG emissions.

Estonian branch

Okazaki Plant

Makita Report 2024

36

Makita’s Sustainability Management

Environment

Contributions through Our Products

gas during use, contributes significantly to the realiza-

Since Makita brought to market the world’s first profes-

tion of decarbonization, we are focusing on this as our

sional-use power tools employing lithium-ion batteries

next pillar of business in addition to power tools. To

in 2005, we have been expanding our lineup of cordless­further this goal, we terminated the production of

products and, in recent years, actively replacing

engine-powered products.

engine-powered products with cordless models, espe-

We will continue to focus our management resources

cially in the area of cordless outdoor power equipmenton the development, production, sale, and service of(OPE), where engine-power is mainstream.

cordless products and accelerate the transition from

Reflecting increased awareness of such environmental

engine-powered to cordless products with equivalentissues as climate change, the impact of exhaust fromperformance, thereby contributing to the realizationengine-powered products has become a major issue.

of decarbonization.

Because Makita’s cordless OPE, which emits no exhaust

UN001G Cordless Pole Hedge Trimmer

DCU601 Battery-Powered Wheelbarrow

This model offers the same high power as our 23mL engine­version, thanks to its 40Vmax battery. This allows powerfulpruning of large branches from high places.

This battery powered wheelbarrow is equipped with anelectric lift. This model makes transport work easier, emits
zero exhausts, is environmentally friendly, and is easy to use.

Contributions to a Resource-Circulating Society
Makita is committed to using limited resources effectively and contributing to the realization of a resource-­circulating society.
Battery Recycling

Battery Collection in JapanAs “a Supplier of a Comprehensive Range of Cordless
Products” and as a company that supplies a large volume
of batteries, we believe that, for the sake of environmental
protection and the effective utilization of resources,

Users
Deposit usedbatteries

Makitacollection
point

Recycler
JBRC collectsbatteries­collecting used batteries is a crucial task. By building andimplementing collection systems in a host of countries andregions in accordance with local laws and regulations,

Retailers

we are working to promote resource recycling.
Initiatives in Japan

Initiatives in Germany

We are a member of the Japan Portable Rechargeable

In Germany, battery manufacturers and the German

Battery Recycling Center (JBRC) and, based on the Act

Electro and Digital Industry Association (ZVEI) estab-on the Promotion of Effective Utilization of Resources,

lished the non-profit Stiftung GRS Batterien in 1998,

have registered our Head Office and domestic sales

which operates the joint battery collection system used

offices as collection points.

by Makita.

37

Makita Report 2024

In December 2021, Stiftung GRS Batterien and Makita

Switch from plastic to paper bags

Werkzeug GmbH (Germany) signed an industry agreement in the power tools sector. The two are working toincrease the collection rate of used lithium-ion batteries
and promote recycling by installing collection boxes
exclusively for lithium-ion batteries at home centers andother power tools retailers.

Hook and bit sets

Promoting the Elimination of Plastic

Environmentally Friendly Design

Due to concern about global environmental pollution in

Our approach to environmentally friendly products

the form of plastic waste in the oceans and amid social

began with an assessment of our products in 1992. In

efforts to reduce the consumption of single-use plastics,

1993, we created Makita’s Global Environment Charter,

we are working to cut back on the volume of single-use

and the active development of environmentally friendly

plastics in our product packaging and thereby contributeproducts began.

to the realization of a sustainable society and the preser-

When designing new products, we focus on improv-

vation of biodiversity. In addition to simplifying packaging,ing energy efficiency, reducing weight, and extending

from FYE 2021, we have been reducing the use of plastic

service life. We also check to see if the materials utilizedbags by devising better packaging materials. We plan toin each part of our products are recyclable and, more

further promote the elimination of plastic in the future.

often than required by the specifications of our internal
regulations, opt for materials that are environmentallyfriendly. In this way, we are continuously developing

Suspension of plastic bags (devising internal materials)

Grip with plastic bag

tools that can be recycled.

Elimination of plastic bags bydevising better internal
packing materials

TOPICSWe are actively involved in reducing our environmental impact and are also
working with local authorities. We plan to reform and improve the work styleof the forestry industry through collaboration between local authorities,
which aim for forestry that does not bring excess CO2 and is friendly to theforest environment, and Makita, which aims to replace engine-powered units
with cordless products. By working together with the public and private­sectors to solve social issues, we will steadily advance our efforts to realize
a sustainable society.

Makita Report 2024

38

Makita’s Sustainability Management

Environment

Initiatives in Line with
the TCFD Recommendations

As the effects of climate change on society, such as
high winds and flooding, increase in frequency andseverity, the role of companies in achieving­decarbonization is becoming more important.
Accordingly, we view climate change issues asa high-priority management challenge.
To this end, we are focusing on OPE that does notemit exhaust gas during use and are actively working
to reduce GHG emissions by striving to reach thegoal of virtually eliminating GHG emissions from ouroperations by FYE 2041.
Recognizing the importance of these efforts aswell as engaging in dialogue with our stakeholders
regarding the impact of climate-related risks andopportunities on our business and other activities,
we endorsed the recommendations of the Task Forceon Climate-Related Financial Disclosures (TCFD) in 2021.

Governance
Chaired by the President, the Sustainability Committee,

Board of Directors

which promotes Company-wide efforts to address­sustainability issues through business activities, wasestablished in 2021.
The committee considers climate change to be one of
the most important sustainability issues and deliberates
on policies, measures, and plans to reduce GHG emissions.
The Sustainability Committee reports and submits
proposals on important matters to the Board of
Directors, which deliberates on these matters and makes
decisions in the course of monitoring and overseeing
the Company’s climate-related risks and opportunities

Monitoring and supervision of climate-related risks
and opportunities
Submission of
Proposals/
ReportMonitoring/
Supervision

Sustainability Committee
Committee Chair: President
Vice Chairs: General Manager of Quality Headquarters,
General Manager of Administration Headquarters
Committee members: Department heads of major divisions

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Makita Report 2024

Strategy
1. Determining Risks and Opportunities
In identifying climate-related risks and opportunities that could affect our business, we have used climate change scenarios from the International Energy Agency (IEA), the Intergovernmental Panel on Climate Change (IPCC), and otherorganizations to organize our views into (1) a 1.5°C to 2°C worldview in which decarbonization progresses and (2) a 3°C
to 4°C worldview in which warming proceeds as it is now. The following is a summary of the results.

Global Decarbonization• Tighter GHG emissions regulations, higher carbon prices• Energy conservation and energy generation in buildings, expansion ofsolar panels, and widespread use of EV charging facilities

1.5–2°C• Shift from fossil fuel to electric engines

Major Drivers
Affecting Makita’sbusiness

Both Scenarios• Expansion of building and construction market

World Continues on Current Path
• Increasing frequency and severity of wind and flood disasters

3–4°C• Increased preparedness and disaster awareness for wind and flood disasters• Decreased productivity of outdoor labor due to increased heat stress

Based on these worldviews, we have identified our climate-related risks and opportunities and qualitatively assessed them.
Risks
Type

Category
Large

Small

Risk
Increased operating costs based on own GHG emissions

Rising carbon price/energy conservation and
Policies and low-carbon regulations
regulations

Increased procurement costs of raw materials, energy, etc.
Increased capital expenditures to enhance energy efficiency
Increased renewable energy procurement costs

Transition

Technology

Battery regulations

Increased battery procurement costs

Product technology
developmentcompetition

Increased development costs for technologies and products with­superior environmental performance (including portability and­operational efficiency)

Competition to develop
next-generation battery
technology

Increased development costs for next-generation batteries with­superior capacity, voltage, life, safety, etc.

Relevant
PeriodPossibility

Short tomediumterm
Short term

Large

Medium tolong term

Short tomediumterm

Large

Increased procurement costs due to increased battery demandMarketReputation

Physical

AcuteIncreased procurement costs due to increased demand for
Changes in market prices s­ emiconductors

Increased disclosure
requests
Increased frequency andseverity of wind andflood disasters

Short term
Large

Increased transportation costs due to decarbonizationof transportation

Short tomediumterm

Reputational damage due to inferiority of information disclosure­compared to other companies

Short term

MediumShort term

MediumPhysical damage to our offices and facilities
Losses due to business interruption
Losses due to supply chain disruptions

Note: Risk onset timing: Short-term: up to 3 years; Medium-term: over 3 years to 10 years; Long-term: over 10 years

Makita Report 2024

40

Makita’s Sustainability Management

Environment

Opportunities
Category

Type

Large
Energysources

Products
and services
Transition

MarketPhysicalResilience

Small

Opportunity

Relevant Period Possibility

Increased carbon prices

Decrease operating costs by reducing GHG emissions tobecome carbon neutral

Short tomedium term

Product technology­development competition

Differentiation from competitors’ products through the­development of products with superior environmental­performance (including portability and work efficiency)

Short term

Competition to develop
next-generation battery
technology

Differentiation from competitors’ products through the­development of next-generation batteries with superior­performance

Medium tolong term

Energy conservation andlow-carbon regulations

Market expansion and product demand increase due to a shift
from engine-powered to cordless products

Changes in the building
and construction market

Increase in demand for products associated with ZEB*1/ZEH*2­conversion of buildings, installation of solar power generationequipment, and EV charging facilities, etc.

Increased disclosure
requests

Improve reputation through enhanced disclosure information

Rising temperatures,climate change, andextreme weather

Increase in demand for products in line with increase in DIY
demand due to longer time spent at home

Short tomedium term

Increased frequency andseverity of wind and flood
disasters

Expansion of the disaster readiness market, increase in productdemand, and contribution to recovery and reconstruction in
the affected areas

Short term

Rising temperatures

Increase in demand for products to improve working­conditions in hot environments

Short tomedium term

Large

Large

Large
Short term
Medium
Large

Large

Note: Opportunity onset timing: Short-term: up to 3 years; Medium-term: over 3 years to 10 years; Long-term: over 10 years*1 Net Zero Energy Building   *2 Net Zero Energy House

2. Scenario Analysis and Setting Themes
We conducted scenario analyses on the following four themes that we rated as “highly important” and evaluated theirprobable impact on our business, strategy, and finances through 2050, taking into account the effect on our business
operations, relevance to our business strategy, and the level of interest of our stakeholders.
3. Results of Scenario Analyses
Theme 1 (Opportunities): Change in demand for cordless OPE due to decarbonization of OPE
Opportunities
under the Theme• In the OPE sector, emission regulations are being introduced and strengthened.
• Demand for cordless OPE is expected to grow as the shift from engine-powered to cordless OPE progresses against a backdropof further tightening regulations and changing consumer preferences towards decarbonization.

AnalysisAssumptions• Baseline (as-is scenario) for market expansion calculated based on market forecast information for the OPE sector• For the OPE sector, data for the below 2°C scenario is based on IEA scenario data* assuming a shift to EVs in the automobile sector

Analysis Results• The market for cordless OPE is expected to expand under the as-is scenario due to the expansion of the OPE market, but underthe below 2°C scenario, we expect the market to expand significantly due to the shift from engine-powered to cordless systems.
• We expect sales to grow at the same rate as the market growth, and, if our market share can be increased, we can expect further
sales growth.

Future Opportunity
Acquisition
Measures• Actively develop cordless OPE that can replace engine-powered OPE• Strengthen sales and service capabilities by expanding the sales and service network• Expand logistics and production capacity in anticipation of increased OPE sales and products handled* Reference: IEA’s “Global EV Outlook 2021.” It is assumed that the shift from engine-powered to rechargeable systems in the OPE sector will progress at a slower rate than the shift
to EVs in the automobile sector.

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Makita Report 2024

Theme 2 (Opportunities): Change in demand for power tools as the building and construction market expands

Opportunities
under the Theme• Expansion in the global building and construction market is expected to increase demand for power tools.
• The demand for power tools is expected to increase as more energy-saving (i.e., renovation of existing buildings) and energy-­
creating (i.e., installation of photovoltaic panels) construction approaches are taken to further decarbonization, and as the­number of EV recharging facilities increases.

AnalysisAssumptions• Increased demand for power tools is anticipated due to a growing volume of building and construction work globally• Baseline (as-is scenario) for power tools sales calculated based on statistics on the size of the building and construction market• The amount of energy-saving and energy-creating construction work in buildings and the installation of EV charging facilities topromote decarbonization is based on data from the building and construction industry and IEA scenario data (below 2°C scenario)

Analysis Results• Sales of power tools are expected to grow under the as-is scenario, but are expected to expand significantly more under the
below 2°C scenario due to an increase in the amount of energy-saving and energy-creating construction work and installation of
EV charging facilities.
• Among them, cordless power tools with excellent work efficiency are expected to see increased use in the building and­construction market.

FutureOpportunity
Acquisition
Measures• Develop power tools based on market trends, in particular, proactively develop cordless power tools that contribute to reducing
environmental impact by improving work efficiency• Strengthen sales and service capabilities by expanding the sales and service network• Expand logistics functions and production capacity in anticipation of sales growth

Theme 3 (Risks): Risks associated with lithium-ion batteries (procurement costs, rise of next-generation batteries withhigher performance)
Risks under
the Theme• The growing demand for lithium-ion batteries (LiB) in the automotive and energy industries is expected to lead to fluctuations in
LiB procurement costs.
• The competitive environment is expected to change with the emergence of high-performance next-generation batteries.

AnalysisAssumptions• Baseline (as-is scenario) LiB unit price calculated with reference to the market forecast information on LiB unit prices• Based on historical data on LiB raw material costs (lithium, nickel, and cobalt), set raw material costs that will soar if demand for
LiB increases (below 2°C scenario)

Analysis Results• Under both the as-is scenario and the below 2°C scenario, LiB unit prices are expected to decline over the medium to long termagainst a backdrop of planned production increases by battery and materials manufacturers. If the supply-demand balance of
LiB raw materials is disrupted by greater than expected demand for EVs and storage batteries, etc., LiB unit prices may soar, but
the long-term impact is expected to be negligible.
• Although it is difficult to predict the market for next-generation batteries, we expect the competitive environment to changeover the medium to long term as next-generation batteries become more widespread and emerge in our product areas as aresult of the traction of the EV market.

Future Risk
Countermeasures• Build long-term relationships with battery suppliers• Pursue research and development for the launch of products using next-generation batteries

Theme 4 (Risks): Risk of increased operating costs due to higher carbon prices
Risks under
the Theme• Operating costs are expected to increase due to the introduction of carbon pricing such as carbon taxes and emissions trading
schemes as well as increases in carbon prices.

AnalysisAssumptions• Establish long-term GHG emission reduction pathways based on GHG emission reduction plans toward carbon neutrality and
IEA scenario data, etc.
• Establish costs for GHG emission reduction measures, etc.
• Estimate future carbon prices based on IEA scenario data and compare to the above measure costs

Analysis Results• The cost of actively reducing GHG emissions, including the use of renewable energy, will be less expensive than the carbon pricebased on GHG emissions if GHG emission reduction measures are not actively pursued.

Future Risk
Countermeasures• Procure renewable energy electricity, and introduce and expand solar power generation for own consumption• Further improve energy efficiency of business activities• Promote commercial-use EVs

Makita Report 2024

42

Makita’s Sustainability Management

Environment

4. Future Policies and Initiatives
We have qualitatively and quantitatively assessed and understood the impact of climate change on our business operations, strategy, and finances and have confirmed not only that our products are financially resilient to climate change as
they contribute to climate change mitigation and adaptation but that our business strategy is feasible and sustainable.
Among our products, we believe that our cordless products, which feature safety, convenience, improved comfort,and zero emissions during use, will play a particularly important role in contributing to climate change mitigation andadaptation. In addition, although not included in the previous section (3. Results of Scenario Analyses), under the as-is
scenario, in which wind and flood disasters are expected to become more frequent and severe, it is important to ensure
a prompt and stable supply of cordless products so that recovery and reconstruction efforts in the affected areas are­supported, and we will continue to build a system to achieve this. We will continue to contribute to society and work toachieve sustainable growth by promoting initiatives to become “a Supplier of a Comprehensive Range of Cordless Products.”
5. Plans for the Transition to Decarbonization
In 2005, we were the first in the industry to market professional cordless power tools that use lithium-ion batteries, andwe have since been strategically transitioning from traditional products to cordless products. In addition, the Company
has set a goal of reducing GHG emissions from its operations to virtually zero by FYE 2041, and is actively working
toward this end.
We are aiming to ensure and improve the effectiveness of these mitigation measures. We will set relevant indicatorsand targets, and we will supervise our performance, progress and achievement under them in line with climate change
governance. In addition, the transition plan will be regularly reviewed and updated. We will also strategically work to
capture and maximize opportunities for decarbonization in our transition plan.

Overview of the Transition Plan to Achieve the 1.5°C Target

Climate Change
Mitigation

Reducing GHG
Emissions• Achieve virtually zero GHG emissions (Scopes 1 and 2) by FYE 2041
• Medium-term target: 50% reduction from FYE 2021 levels by FYE 2031

Elimination of Engine
Powered Equipment• Increase the OPE electrification ratio (FYE 2024 result: 99.2%)

Capture and Maximize Opportunities

Strategic implementation of the following measures based on the results of scenario analyses• Active development of cordless products (including cordless power tools and OPE)
• Expansion of sales and service network• Expansion of logistics functions and production capacity in anticipation of sales growth

Risk Management
We hold annual Disclosure Committee meetings to identify and scrutinize risks in our business activities as well as toevaluate and manage risks related to climate change. The details of climate change risks and opportunities are assessed
and managed under the Sustainability Committee.
Recognizing that climate change is one of the most important external environmental risks we face, the Board of
Directors discusses the impact of climate change on management and determines management strategies and­measures that will contribute to decarbonization.
We will further strengthen our climate change response by solidifying our systems and operations for managing theseclimate-related risks.

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Makita Report 2024

Indicators and Targets
Targets related to GHG emissions
The Makita Group has set goals to reduce GHG emissions from its own business activities (Scopes 1 and 2) to virtuallyzero by FYE 2041 and from its entire supply chain (Scope 3) to virtually zero by FYE 2051. The mid-term target for Scopes
1 and 2 is to halve the FYE 2021 level by FYE 2031.
Targets and results related to GHG emissions (t-CO₂)
FYE 2021 Results
Scopes 1 and 2
Scope 3

FYE 2031 Targets

FYE 2041 Targets

FYE 2051 Targets

89,673

44,836

Virtually zero

6,006,569——

Virtually zeroNote: Please see page 36 for GHG emissions in FYE 2024.

To achieve the above goals, we will steadily implement initiatives to reduce GHG emissions through the use of renewable energy and other means.
Indicators for the electrification of OPE
As described in the scenario analysis for “Theme 1 (Opportunities): Change in demand for cordless OPE due to decarbonization of OPE,” the transition from engine-powered to cordless OPE is progressing in line with progress towarda ­decarbonized society. We have set the electrification (elimination of engine-powered equipment) ratio as an indicatorand are striving to increase this ratio. In addition, Makita has discontinued production of all engine-powered­products, including OPE.
Indicators and results related to the electrification ratio* of OPE
FYE 2020 Results
86.1%

FYE 2021 Results

FYE 2022 Results

88.5%

FYE 2023 Results

90.9%

91.9%

FYE 2024 Results
99.2%* Based on sales volume, including both AC products with power cords and cordless products

We will continue to promote the proactive development of cordless OPE that can replace engine-powered OPE in order
to contribute to solving environmental problems, particularly climate change issues.

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Makita’s Sustainability Management

Corporate Governance

Makita strives to strengthen and enhance corporate governance in order to increase
corporate value and earn the trust of shareholders and other stakeholders.
For more detailed information on corporate governance, please see the relevant section and the Corporate Governance Report on
Makita’s website (https://www.makita.biz/sustainability/governance/01/).

Basic Philosophy on Corporate Governance
Makita believes that the most important issue is to achieve unending development together with its various stakeholders. In
order to achieve this, we have established a Management Policy/Quality Policy and are working to strengthen and enhance ourcorporate governance. From this perspective, we will work to maintain and improve the fairness and transparency of our­management by striving to enhance management transparency and management checking functions as well as to proactively
and promptly disclose information.

Steps Taken to Strengthen Corporate Governance
2005

June
Appointed Outside Directors

2006

June
Discontinued retirement allowance plan for
Directors and Audit & Supervisory
Board Members

2009

June
Introduced the Corporate Officer system

2011

June
Appointed two non-Japanese Corporate Officers

2015

June
• Increased the number of Outside Directors• Introduced stock-compensation-type stock option

2019

June
Introduced a restricted share compensation
system2020

DecemberEstablished the Nomination and Compensation
Committee

2021

June
• Transitioned to a Company with an Audit &Supervisory Committee• Increased the number and ratio of Outside
Directors
(One third of Directors are Outside Directors)

2023

June
Appointed a female Outside Director( Discontinued upon the introduction of a restricted sharecompensation system in June 2019)

Schematic Diagram of Makita’s Corporate Governance Structure (as of June 26, 2024)
General Meeting of Shareholders
Appointment/Dismissal

Nomination
andCompensation
Committee

Consultation/
Delegation
AdviceMonitoring/
Supervision

Appointment/Dismissal

Board ofDirectors
Directors(Excluding Directors who are Audit &Supervisory Committee Members)

Submissionof Proposals/
ReportAppointment/
Dismissal/
Supervision

President

Sustainability Committee(Promoting Carbon Neutrality, etc.)

Appointment/
Dismissal

Corporate
Officers

Corporate
Officer, General
Manager of
Administration
Headquarters

Audit/
Supervision

Audit & Supervisory
Committee

Collaboration

Directors who are Audit &Supervisory Committee Members
Support

Audit

Audit & Supervisory Committee
Staff Office

ReportDisclosure Committee

ReportInternal Audit Division

Audit
Accounting Audit

Corporate Divisions
Group Companies

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Makita Report 2024

Internal Control Audit

Accounting
AuditorPrincipal Organizational Structures
Chairman/Committee Chairs

Members

Internal Directors Outside Directors

Meetings Heldin FYE 2024

Board of Directors

Munetoshi Goto (President,
Representative Director)

14

9

5

12

Nomination andCompensation Committee

Masahiro Sugino (Outside Director)

5

2

3

4

Audit & Supervisory
Committee

Mitsuhiko Wakayama (Director, Standing
Audit & Supervisory Committee Member)

4

1

3

14

Proportion of Outside Directors in Each Organization
Internal

Outside

Men

Women

Nomination andCompensation
Committee

Board of Directors

35.7% (7.1%)

Audit & Supervisory
Committee

75% (25%)60%

Note: The numbers in parentheses above show the proportion of women.

Skills Matrix

Name

Nomination
andIndependent
Corporate
Compensation
Management
Committee

Expertise
Overseas
Experience

Sales/
Marketing

Production/It/
Development Procurement/ Sustainability
Digitalization
Quality

Finance &Accounting

Legal
Affairs

Munetoshi
Goto
Tetsuhisa
KanekoTakashiTsuchiya
Masaki
YoshidaTakashi
Omote
Yukihiro
Otsu
Yoshihisa
Inuzuka
Hideyuki
KawaseMasahiro
SuginoCommittee
Chair

Takahiro
Iwase
Mitsuhiko
Wakayama
Shoji
Inoue
Koji
Nishikawa
Ayumi
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Makita’s Sustainability Management

Corporate Governance

Overview of the Corporate Governance
Structure

Audit & Supervisory Committee

Board of Directors­necessary. The Audit & Supervisory Committee audits

A regular meeting of the Board of Directors shall be heldand supervises the execution of duties by the Directors,

once a month and extraordinary meetings shall be held

and investigates the status of business and assets bywhenever necessary. The Board of Directors, as theattending important meetings and hearing reports in­decision-making body for management, decides onaccordance with its stipulated audit policies and division

important management matters, including decisions onof duties. The Audit & Supervisory Committee also

management policies and business plans, the conclusion

appropriately exercises its right to express opinions onof important agreements, and the establishment of

the nomination and compensation of Directors (excluding­subsidiaries in accordance with the Regulations of the

Directors who are Audit & Supervisory Committee

Board of Directors, in addition to matters stipulated by

Members). With the objective of ensuring the smoothlaws and regulations and the Articles of Incorporation,

execution of audits by the Audit & Supervisory Committee,

and supervises the execution of operations. Outside

Makita established the Audit & Supervisory Committee

Directors are appointed from among those who have

Staff Office, comprising dedicated support personnel.

The Audit & Supervisory Committee meets oncea month and also holds extraordinary meetings asa wealth of experience and broad insight in corporate

In order to strengthen the effectiveness of audit andmanagement and those who have a wealth of experi-

supervisory functions, one standing Audit & Supervisoryence and insight in various fields, including finance,

Committee Member has been appointed. Three Outsideaccounting and legal affairs, and are responsible for

Directors who are members of the Audit & Supervisory

strengthening corporate governance by providing

Committee have been appointed, one of whom is an­opinions as appropriate from an independent perspec-

attorney-at-law and the other two are certified public

tive with no risk of conflict of interest with generalaccountants who have many years of experience andshareholders. Additionally, Makita has hired several

expertise in their respective fields. Makita considers

Directors with abundant business experience at overseas

these individuals capable of performing highlybases, which adds diversity to the Company.

­specialized audits from an independent perspective.

Nomination and Compensation Committee

Corporate Officers

In consultation with the Board of Directors, theWe have introduced a Corporate Officer system to facilitate

Nomination and Compensation Committee carries out

the proper implementation of the Group’s strategy andsuch tasks as deliberating and advising on policies

strengthen our business execution structure, and we are­concerning the nomination of Representative Directors

striving to engage in flexible and efficient business opera-

and Directors,* matters concerning the appointment oftions. As of July 2024, Makita has 17 Corporate Officers, andRepresentative Directors and Directors,* matters

three of these Corporate Officers are non-Japanese.

­concerning the succession plan for the President,­policies concerning decisions on the details of individual

Three-Way Auditing Systemcompensation for the Directors,* and, as delegated by

The Audit & Supervisory Committee, the Internal Audit

the Board of Directors, makes decisions on the details of

Division, and the Accounting Auditor collaborate,individual compensation for the Directors.*­exchanging information and opinions as necessary. The* Excluding Directors who are Audit & Supervisory Committee Members

Audit & Supervisory Committee meets regularly with the
Accounting Auditor to receive reports and explanations ofMain Deliberations in FYE 2024

audits and review results, as well as to exchange informa-• Nomination and compensation policies for Officers

tion and opinions. In addition, the Audit & Supervisory• Determination of individual compensation

Committee itself conducts audits of the Group, including its• Officer appointments

subsidiaries, cooperating with their internal audit divisions.

• Succession planning for the President

Along with auditing results, the Audit & Supervisory
Committee receives reports from the internal audit divisions
on the status of the establishment of internal control­systems throughout the Company and exchanges

47­information and opinions with said divisions.
Makita Report 2024

Director Selection Policy andDecision-Making Processes

Director Compensation

Policy(Excluding Directors who are Audit & Supervisory

The Board of Directors as a whole possesses a good

Committee Members)­balance of knowledge, experience, and ability, and

The Board of Directors, after consultation with andstrives to maintain both diversity and an appropriate size

receiving advice from the Nomination and Compensation

as well as to keep the ratio of Outside Directors at more

Committee, determines the decision-making policy onthan one-third.

the details of individual compensation for Directors

Internal Directors*

Appoint persons with the ability to formulate
and execute management strategies based on
their own experience and insight, including a
wealth of experience in the Company’s operations

Outside Directors*

Appoint persons with extensive experience andbroad insight in corporate management

Directors Who
Are Audit &Supervisory
Committee
Members

Appoint persons with internal and external work
experience and a wealth of experience andinsight in various fields, including finance,accounting and legal affairs, ensuring that atleast one of them possesses the required wealthof experience and insight in each field, i.e.,
finance, accounting and other fields* Excluding Directors who are Audit & Supervisory Committee Members

Compensation for Directors(excluding Directors who are Audit & Supervisory
Committee Members). Compensation for Directors(excluding Directors who are Audit & Supervisory
Committee Members) consists of monthly compensation,bonuses, and restricted share compensation. Intended
to incentivize Directors, the latter two forms of compensation comprise a consolidated performance-linked
bonus aimed at motivating efforts to improve businessperformance and a restricted share compensation­system aimed at motivating efforts to increase sharevalue and enhance corporate value.
Monthly
Compensation

Process
Directors(Excluding Directors Who
Are Audit & Supervisory
Committee Members)

Candidates are determined by the Boardof Directors, reflecting advice on candidates compiled by the Nomination andCompensation Committee, and appointed
at the General Meeting of Shareholders

Directors Who Are
Audit & Supervisory
Committee Members

Candidates are determined by the Boardof Directors with the consent of the Audit& Supervisory Committee and appointed
at the General Meeting of Shareholders

Determination

Monthly
Compensationfor each Director on the effectiveness of the Board of
Directors. The results of analyzing the FYE 2024 effec-

Total
AmountIndividual

The Nomination and Compensation
Committee is delegated through a resolutionof the Board of Directors to determine the­allocation of bonuses to Directors based on
performance, position, and other factors.

Bonusesof its composition, operation, supervisory function, andresponse to shareholders and stakeholders, and that theeffectiveness of Makita’s Board of Directors is ensured.
By providing an open comment item for each questionin the survey, we are aiming to collect more specificfeedback, opinions, and suggestions on the effectivenessof the Board of Directors. For example, the survey for FYE
2024 furnished us with opinions and suggestions on how

The Nomination and Compensation
Committee is delegated through a resolutionof the Board of Directors to determine theamount of monthly compensation for each
Director within the limit on compensation
resolved by the General Meeting of
Shareholders based on business results,­position, employee salary increases, andother factors.
As is the case for dividends from surplus,
bonuses are based on profit attributable toowners of the parent per share (basic) after
adjusting for special factors, and the Board of
Directors determines the total amount ofbonuses based on a certain formula following
consultations and advice from the Nomination
and Compensation Committee, submitting theamount for resolution at the General Meetingof Shareholders.

Makita conducts an annual self-evaluation questionnaire

generally functions appropriately from the perspective

Restricted Share
Compensation** Not applicable to Outside Directors

Evaluation of Effectiveness of
the Board of Directors

tiveness evaluation indicated that the Board of Directors

Bonuses*

Restricted Share
Compensation

After consulting and receiving advice from theNomination and Compensation Committee,
the Board of Directors determines the­allocation of restricted share compensation to
Directors based on position and other factors.

to improve effectiveness and helped us identify issues toaddress in the future, such as a need to strengthen the
input of Outside Directors and increase the flexibility ofBoard meetings by introducing remote technology.
Makita Report 2024

48

Makita’s Sustainability Management

Corporate GovernanceCompensation for Directors Who Are Audit &Supervisory Committee Members

Total Amount of Compensation (FYE 2024)

The full amount of compensation for Directors who are
Audit & Supervisory Committee Members is fixed com-

Category of Officer

Directors (Excluding
Audit & Supervisory
Committee Members)(Excluding Outside
Directors)

285

98

154

34

9

Directors (Audit &Supervisory Committee
Members)

15

15

—

—

1

Outside Officers

28

28

—

—

6

pensation so that their independence from management
can be ensured; the specific amount is decided throughdiscussion among the Directors who are Audit &Supervisory Committee Members.

Total Amounts of Each Type ofCompensation (Million yen)

Total Amounts ofCompensation(Million yen)

Base
BonusesCompensation

Number of
Eligible
Restricted
Directors
Share
Compensation

List of Directors
Position

Name

Number of Company
Shares Held

Attendance at Board of Directors’Meetings (Audit & Supervisory
Committee meetings)(As of March 31, 2024)

President, Director*

Munetoshi Goto

100% (12 of 12 meetings)

475,377

Director, Managing Corporate Officer,
General Manager of Research andDevelopment Headquarters

Tetsuhisa Kaneko

100% (12 of 12 meetings)

25,812

Director, Corporate Officer, General Manager
of Domestic Sales Headquarters(Concurrently in charge of the Osaka Area)

Takashi Tsuchiya

100% (12 of 12 meetings)

21,412

Director, Corporate Officer, General Manager
of Production Headquarters

Masaki Yoshida

100% (12 of 12 meetings)

13,932

Director, Corporate Officer, General Manager
of International Sales Headquarters

Takashi Omote

100% (12 of 12 meetings)

11,452

Director, Corporate Officer, General Manager
of Administration Headquarters

Yukihiro Otsu

100% (12 of 12 meetings)

11,452

Director, Corporate Officer, General Manager
of Purchasing Headquarters

Yoshihisa Inuzuka

—

7,000

Director, Corporate Officer, General Manager
of Quality Headquarters

Hideyuki Kawase—

10,000Outside Director

Masahiro Sugino

100% (12 of 12 meetings)—

Outside Director

Takahiro Iwase

100% (12 of 12 meetings)

1,100

Director (Standing Audit & Supervisory
Committee Member)

Mitsuhiko Wakayama

100% (12 of 12 meetings)(100%, 14 of 14 meetings)

10,800Outside Director (Audit & Supervisory
Committee Member)

Shoji Inoue

100% (12 of 12 meetings)(100%, 14 of 14 meetings)

600

Outside Director (Audit & Supervisory
Committee Member)

Koji Nishikawa

92% (11 of 12 meetings)(100%, 14 of 14 meetings)

400

Outside Director (Audit & Supervisory
Committee Member)

Ayumi Ujihara

90% (9 of 10 meetings)(100%, 10 of 10 meetings)—* Representative Directors
Notes: 1. T he Company provided notification on Mr. Masahiro Sugino, Mr. Takahiro Iwase, Mr. Shoji Inoue, Mr. Koji Nishikawa, and Ms. Ayumi Ujihara to the Tokyo Stock Exchange
and Nagoya Stock Exchange as being Independent Directors appointed by the Company, in accordance with the rules and regulations of each exchange.
2. The status of Ms. Ayumi Ujihara after her appointment on June 28, 2023 is shown.
3. Holdings of less than 100 shares through Makita’s stock ownership plan are not included in the number of Company shares held.

49

Makita Report 2024

Reasons for Appointing Outside Directors
Name

Reason for Appointment

Masahiro Sugino

He has participated in the management of LIXIL Group, including INAX, for many years and has a thorough knowledge of corporate
management, based on which he currently provides useful opinions on the management of the Corporation from a broad perspective.
We expect him to utilize his wealth of experience and broad insight for the management of the Company from an independent perspective.

Takahiro Iwase

He has participated in the management of core companies of the Toyota Group, including TOYOTA MOTOR CORPORATION, for many
years and has a thorough knowledge of corporate management, based on which he currently provides useful opinions on the­management of the Corporation from a broad perspective. We expect him to utilize his wealth of experience and broad insight forthe management of the Company from an independent perspective.

Shoji Inoue

He has extensive knowledge and expertise gained through his practice as attorney at law, and expresses his opinions from that­perspective. We expect that he will reflect his wealth of experience and expertise in auditing and supervising the Company’s­management from an independent perspective.

Koji Nishikawa

He has extensive knowledge and expertise in corporate accounting audits as a certified public accountant, and expressed his­ pinions from that perspective. We expect that he will reflect his wealth of experience and expertise in auditing and supervising theoCompany’s management from an independent perspective.

Ayumi Ujihara

She has extensive financial and accounting knowledge and expertise as a certified public accountant as well as abundant experience in audit
work at global corporations that allows her to bring a new perspective and offer beneficial opinions. We expect that she will reflect
her wealth of experience and expertise in auditing and supervising the Company’s management from an independent perspective.

Strategic Shareholdings
The Company holds shares of various companies, including

Strategic Shareholdings at the End of the Fiscal Yearclients and associates in business relationships, for­strategic purposes from a medium- to long-term­perspective, based on the criteria of whether or not theshares are beneficial for business execution, such as
strengthening relationships with clients and business
partners. In addition, the Board of Directors regularly

Number of issues
Balance sheet
amounts(Million yen)

FYE
2020

FYE
2021

FYE
2022

FYE
2023

FYE
2024

49

49

45

45

45

20,21330,693

20,942

21,17029,090examines the economic rationality and other factors ofeach individual stock based on the significance of­holding the stock and the capital cost and verifies theNote: The increase in the amount recorded on the balance sheet from FYE 2020 toFYE 2021 and FYE 2023 to FYE 2024 was due to an increase in the market valueof strategic shareholdings as a result of a rise in stock prices.

appropriateness of such holding from a medium- tolong-term perspective. As a result of the verification, we
will consider selling stocks for which the appropriatenessof holding is not recognized, and work to reduce theamount. Most recently, at its meeting on June 26, 2024,
the Board of Directors completed its review of the­situation as of March 31, 2024.

Makita Report 2024

50

Makita’s Sustainability Management

Corporate Governance
Messages from Outside Directors
Ready to Put Profits on
a V-Shaped Track
Outside Director

Masahiro Sugino
Brief profile
Appointed to the position of Makita Outside Director in June 2015. Outside Director
Sugino has an intimate knowledge of corporate management gained through many
years of involvement running the LIXIL Group, including INAX Corporation. He­currently serves as Chair of the Nomination and Compensation Committee.

In FYE 2024, how successful was the Company in implementing
measures in line with the keywords, “Eliminating Waste andInventory Optimization?”
Along with continued adjustments in production throughout theyear, Makita was able to make necessary reductions in personnel andpare down the excess procurement of parts and materials while
simultaneously creating a production system in line with theCompany-wide “Eliminating Waste and Inventory Optimization”­policy, resulting in a significantly improved cost-of-sales ratio. The
company was also able to restore the operating profit ratio to 8.9%
by ­pursuing customer-oriented sales activities and reducing the costof sales and general expenses while minimizing distribution inventory. I think the recovery in operating profit is particularly noteworthy.
Through collaborative efforts spanning engineering, manufacturing,and sales, we were able to strengthen our profit structure and bringtotal inventory down to an appropriate level.
From a management perspective, do you think that Makita has
strengthened its structure enough to be able to handle a recovery in demand?
Amidst a difficult demand environment over the past year, while theCompany continued reducing production to optimize its inventory
levels, it also made thoroughgoing efforts to eliminate waste,­resulting in an improved cost structure, reduced cost-of-sales ratio,
and sustained management efficiency. Therefore, I believe that
Makita has made good progress in strengthening its profit structureand feel it is in position to get profits back on a V-shaped recovery
track with improved demand. Moving forward, the Company will

Makita Should Make theMost of its great Teamwork
Outside Director

Takahiro Iwase
Brief profile
Appointed to the position of Makita Outside Director in June 2021. Outside Director
Iwase has an intimate knowledge of corporate management gained through many
years of involvement in the Toyota Group, including TOYOTA MOTOR CORPORATION.

For FYE 2025, the Company-wide keyword will be achieving“Optimization”. What efforts do you think will be needed on
the manufacturing side?
Reflecting Makita’s long-term goal of being a “Strong Company,”“Optimization” was chosen as a Company-wide keyword for FYE
2025, and all departments have been working together to promote
this concept. I believe that teamwork is one of Makita’s strengths,
one that enables the Company to push ahead toward its goals
through interdepartmental collaboration. I have been involved withthe manufacturing department for many years, and from that­perspective, I believe we need to continue increasing productivity
through improvements in the overall efficiency of how equipment,
space, people, and time are used.

51

Makita Report 2024

continue focusing on maintaining appropriate inventory levels whilefurther strengthening sales through the development overseas markets and creation of demand. In addition, Makita will direct efforts
into product development to meet such demand. I hope that byimplementing even more Company-wide productivity measures,
Makita will further ensure the resilience of our profit structure against
demand fluctuations.
What role does the Nomination and Compensation Committee
play in enhancing Makita’s corporate value?
Many consider corporations to have a duty toward society. Investors
expect strong governance and they especially demand transparency
in decision-making processes affecting the nomination of candidates
for directors and director compensation. Makita has risen to these
expectations by establishing the Nomination and Compensation
Committee, with Outside Directors making up the majority, tostrengthen governance and ensure transparency while also enhancing
corporate value. This committee discusses and determines policy
related to the nomination of candidates for directors and director
compensation and submits its conclusions to the Board of Directors
for approval. I believe that improving this committee’s effectivenesswill further enhance governance, leading to growth and increased
corporate value at Makita.
What additional efforts do you think should be made so that
Makita achieves its long-term goal of being a “Strong Company?”
One of Makita's strengths is that it has customers all over the world
and, based on a thorough "customer first" management philosophy,
it is able to develop proactive management that can flexibly respondto changes in the demand environment everywhere it does business.
In this context, it is important to pursue further progress in the cost
structure reform and profitability strengthening efforts that havebeen undertaken over the past year. At the same time, in order tofurther develop markets, I would like to see Makita further hone its
strengths in product development and improvement technologies
that proactively address market needs. I believe that contributing todecarbonization through Makita’s expanded cordless products,­contributing to a sustainable, diverse society, and implementing ESG
management that further increases our social value, will help Makita
truly become a “Strong Company.”

To this end, it is important for the three heads of manufacturing,production technology, and production to work together to visualize
issues, continually make improvements on an everyday basis, anddemonstrate on-site, tangible, observable management between
departments and workplaces towards these efforts.
What efforts do you think will be necessary to cultivate humanresources and improve productivity for manufacturing?
From the management perspective, the company needs to continue
to raise wages and improve employee engagement to ensurea ­sustainable future. One key to achieving this is improving­productivity across all indirect departments.
Productivity is defined as production output volume divided by
input volume. To improve productivity, Makita must consider how
to minimize input (the denominator) and maximize output(the numerator).
In my experience, minimizing input means eliminating the needfor redoing work and completing work in-house, while maximizing
output means creating new added value through work we are
already doing and getting to know the customer even better willbe critical.
I am looking forward to seeing Makita make the most of its
strengths through excellent teamwork oriented toward realizing theconcepts encapsulated in its Company-wide keywords.

Further Refine Makita’s
Robust Business Structure
Outside Director
Audit & Supervisory Committee Member

Shoji Inoue
Brief profile
Appointed to the position of Makita Outside Director (Audit & Supervisory Committee
Member) in June 2021. Outside Director Inoue has extensive knowledge and expertise
gained through his practice as an attorney at law and he audits and supervises theCompany based on such experience.

How would you evaluate Makita's global governance? Whatstrengths would you like the Company to utilize and whatissues should be addressed to achieve its long-term goal ofbeing a “Strong Company?”
During interviews with departments as an Audit & Supervisory
Committee Member, it was surprising to learn that a significant
number of people in almost every department have international
work experience. Makita truly sends a lot of employees abroad.
Makita’s global governance is ensured by this high number of staff
sent from Japan to overseas subsidiaries to support management. In
other words, I believe its governance is achieved by ensuring­collaboration with the local staff.
Maintaining both management and governance overseas withdifferent corporate cultures is quite difficult, but Makita’s Japanese
staff have managed to do so to an excellent standard. I also believe

Makita’s System Enables Us to
Quickly Understand Important
Management Issues

that having staff cultivated in such an international environment
supports Makita's global governance as well as its long-term goal ofbeing a “Strong Company.” I hope that this strong corporate culture
will continue to be refined.
How would you evaluate the efforts being made to improve theeffectiveness of the Board of Directors?
Makita’s chair of the Board of Directors typically reports on global
social and market conditions and discusses the direction Makita
should take. Based on reports from each department, a question andanswer session is held and opinions are exchanged, including with
Outside Directors. I think this demonstrates that the Board of Directors
effectively fulfills both its supervisory and management functions.
To further enhance the Board’s effectiveness, it must continue tofunction as a team, and I believe communication between eachmember is essential for this. As a member of the legal community,
I would like to promote communication within the Board as well as
monitor risks from a third-party perspective.
How would you evaluate the activities of the Nomination andCompensation Committee?
Makita’s Nomination and Compensation Committee was establishedin December 2020, and I have been a member of the committee
since June 2023. Outside Directors make up the majority of the­committee, and the chair is also an Outside Director. At the committee
meetings, Internal Directors explain agenda items in detail anddeliberations on these items are thorough. This process is sufficiently
objective, and I believe that the committee is fulfilling its function as
an advisory body to the Board of Directors.

Appointed to the position of Makita Outside Director (Audit & Supervisory Committee
Member) in June 2023. Outside Director Ujihara has an intimate knowledge offinance and accounting gained through many years of involvement in audits of global
companies as a certified public accountant.

What efforts do you think should be made to improve the­effectiveness of the Board of Directors?
I think it would be beneficial to focus on seeing and hearing things
directly on-site. During operational audits I have carried out as an
Audit & Supervisory Committee Member, I have spoken directly withthe heads of each department within the Company, and I have also
audited business sites abroad. These activities have made me eager
to further improve my understanding of Makita, contribute to theeffectiveness of the Board, and assist in efforts to enhance theCompany’s corporate value. When I conduct accounting audits asa certified public accountant, it is necessary to step back and evaluate
the Company objectively, and, as an Outside Director, I would also
like to take external stakeholders’ perspectives into account.

What comments or suggestions have you offered during Boardof Directors meetings that were based on your own experience?
My impression of Makita’s Board of Directors is that the none of thedirectors, internal or outside, have any hesitation in asking questions
and exchanging opinions. Internal Directors report on their areas of
responsibility at every Board meeting. Makita has a wide range ofinternational operations, and directors actively visit business sites tocheck on things in person, reporting to the Board on their conclusions.
I think this system allows us to quickly understand important­management issues.
Personally, over the past year I have applied my experience working
with a number of companies as a certified public accountant to ask
questions and make suggestions, focusing on efforts to improve
Makita’s financial position, such as in matters relating to compliancesystems, internal controls, and inventory reductions.

What are your thoughts on promoting women’s advancement?
I believe that a work environment in which female employees canwork comfortably is a workplace that benefits everyone. Makita’s
target is 3% or more female managers by FYE 2030, and theCompany has already begun working towards this goal.
I attended a Women’s Career Design Seminar that was held inMarch 2024, and the participants exchanged lively discussions.
During operational audits, I also had the opportunity to speak withfemale employees in multiple departments, and I felt that many ofthem were very talented.
In order for female employees to gain motivation and demonstrate their abilities, it is necessary to communicate with them in all
work areas.
I believe that the key to the promotion of women's advancement
is for the Company to consider the support that should be provided
according to their needs and take action.

Outside Director
Audit & Supervisory Committee Member

Ayumi Ujihara
Brief profile

Makita Report 2024

52

Makita’s Sustainability Management

Corporate GovernanceDialogue with Shareholders
and Investors

Code of Ethics for Makita, which outline the conduct

The Director, Corporate Officer, and General Manager ofinterest, complying with relevant laws and social

Administration Headquarters has general oversight over­standards, properly disclosing information, respecting

dialogue with shareholders and investors. The IR depart-human rights, restricting gifts and incentives, prohibiting

ment and the finance, legal, and internal audit depart-

bribes, and prohibiting unfair business transactions.

ments collaborate with each other, reviewing and sharing

Employees are provided with regular information anddisclosure information and preparing disclosure materials,

ongoing training about Makita’s Code of Ethics andto facilitate constructive dialogue with shareholders.

Guideline to the Code of Ethics for Makita. In order to

In addition to individual dialogues with shareholders

expected of Group officers and employees, stipulate theimportance of ethical conduct, avoiding conflicts ofinstill an awareness of the importance of compliance,

and investors, we hold a briefing session for each

employees are given an Ethical Compliance Survey,­quarter’s financial results. Twice a year (at the end of thewhile new hires and newly appointed managers areinterim period and at the end of the fiscal year), the­provided with compliance training.

president gives a presentation, with presentation

In order to minimize, pre-empt, quickly discover, and­materials published on our website. The ratio of shares

resolve conduct in violation of the Code of Ethics, Makita

held by foreign institutions and individuals is over 40%,

has established regulations regarding a Corporate Ethics

so the Company actively discloses information in English,

Helpline (Internal Reporting) in addition to an internal

including its financial statements, timely disclosure

hotline as well as an external contact for employees­documents, notices of convocation of the generalmaking reports. We have also established a point of­meeting of shareholders, materials for financial results­contact on the Company website for receiving externalbriefings, Corporate Governance Reports, and Company

feedback and suggestions related to accounting, internal

publications (corporate profile, integrated reports suchcontrol, and audits. Thorough measures are taken inas this report, and environmental reports). The Company

accordance with the regulations to protect whistleblowers

also translates major items (consolidated financial

so that they do not incur any disadvantage for reporting­statements and notes, business risks, etc.) from its

to the Corporate Ethics Helpline. If necessary, the con-­annual securities report.

tent of the reports is also shared within the Company,

In FYE 2024, in addition to quarterly financial results
briefings, management held 21 meetings with share-and steps are taken to remedy and prevent recurrenceof the matter in question.

holders and investors. In addition to this, we actively
engaged in dialogue with shareholders and investors
through individual meetings with IR staff and participated

Status of Internal Audits

in conferences sponsored by securities firms. Also, we

As an independent organization in charge of theanalyzed the exercise of voting rights at shareholders’Group’s internal audits, the Internal Audit Division has

meetings and provided necessary feedback to manage-a staff of more than 10 and conducts the internal audits

ment on the opinions of shareholders and investors

necessary to maintain management soundness. Results

obtained through dialogue to ensure sustainableof audits are reported to the Audit & Supervisory

growth and enhance corporate value over the medium

Committee and to management personnel. Furthermore,

to long term.

we have built a framework for making timely and­appropriate revisions when inadequacies in the internal

Compliance

control system are discovered through internal audits.

Makita upholds a philosophy of “striving to exist in

Risk Management­harmony with society,” an approach it applies uniformly
and that is reflected in our Management Policy/Quality

Makita strives to identify and manage risks with

Policy. As such, we thoroughly ensure that officers anda ­material impact on business activities while also

employees comply with legal, regulatory, and ethical­pursuing a commitment to being a company that isprinciples. Makita’s Code of Ethics and Guideline to the­resilient to crises.

53

Makita Report 2024

Makita’s Disclosure Committee, which identifies andAmidst concern in recent years over the occurrence ofinvestigates risks in the Group’s business activities, holds

major earthquakes and other natural disasters, Makita

annual meetings. These meetings are attended by repre-

recognizes that being able to respond to disasters issentative Directors, the Director in charge, Standing

a critical issue. Makita has formed a Fire & Disaster

Audit & Supervisory Committee Members, and General

Management Committee comprising Directors and theManagers of the Internal Audit Division and respective

heads of relevant divisions and has formulated disaster

departments of the Company.

prevention regulations with this committee at the

Each Director exercises authority and takes responsibility­center. These disaster prevention regulations and otherfor implementing the Group-wide risk management

measures, which are reviewed regularly, define steps forframework in their own division, and also reports to thedisaster prevention, emergency response measures, andBoard of Directors when a situation occurs that is

disaster recovery efforts. Similarly, these regulations and­material to business management. In each division,

measures outline a business continuity plan (BCP) for­regulations and guidelines are stipulated and followed

times of disaster. The target organizations and scope ofin order to carry out risk management necessary forthis plan are also reviewed as necessary.

quality control, disaster prevention, capital utilization,and the like.

Risks & Opportunities Relevant to Makita
Relevant Risks &Opportunities
Changes tothe social climate/market environment

Details
Risk• Deterioration of the market environment due to worsening economic conditions, social disorder,­enactment or changes to laws and regulations, and the like

Opportunity• New demand accompanying environmental changes such as labor shortages and the post-COVID-19“new normal”

Risk• Performance deterioration due to large-scale natural disasters, such as earthquakes, floods, fires, and so on• Drastic performance deterioration due to natural disasters in Japan and/or China, where our core­business operations are concentrated

Natural disasters
Opportunity

Risk• Increased demand for products and services that contribute to early recovery from natural disasters andpeace of mind in times of disaster• Loss of competitive strength

Global competition
Opportunity

Risk

Technology & products
Opportunity

Risk

Procurement• Decline in new product development able to meet changing market needs• Delays in product development attuned to market prices• Large-scale recall(s) due to unforeseen product defects; damage liability lawsuit(s); major decline inbrand trustworthiness• Improved brand strength due to delivering customer satisfaction• Demand creation and acquisition of growth opportunities through new products• Production shortages and rises in production material costs• Delayed launch of new product sales due to component suppliers not meeting Makita’s requirements,
or due to taking too long to meet those requirements

Opportunity• Improved competitive strength and profits due to stronger relationships with suppliers and/or
discovering new suppliers

Risk• Loss of major customer(s) and a corresponding loss of opportunities to unlock sales channels• Deterioration of the financial position of customer(s)Relationships withmajor customers
Opportunity

Environment(incl. climate change)• Improved profitability from consolidating competitive superiority• Increased sales due to stronger relationships with major customer(s)Risk• Strengthening/adoption of regulations related to global warming, climate change, and so on

Opportunity• Increased demand for environmentally friendly products that contribute to decarbonization

Makita Report 2024

54

Corporate Data

10-Year Summary(For the years ended March 31)(Million yen)

U.S. GAAPNet sales

2015

2016

2017

2018

¥ 414,718¥ 423,623¥ 414,999¥ 477,298

IFRS
Revenue

Domestic

67,74068,44574,381

82,575

Overseas346,978

355,178

340,618

394,723

Operating income

71,90564,67662,564

79,762

Operating profit

Income before income taxes

68,394

61,49264,73879,678

Profit before income taxes

Net income attributable to
Makita Corporation

45,307

41,61544,78254,755

Profit attributable to owners of
the parent

Net cash provided by (used in)operating activities¥  35,894¥  34,188¥   63,351¥  33,294

Net cash provided by (used in)operating activities

Net cash provided by (used in)investing activities(20,096)(6,573)(5,015)(14,811)

Net cash provided by (used in)investing activities

Free cash flows

15,79827,61558,33618,483

Free cash flows

Net cash provided by (used in)financing activities(12,017)(18,719)(9,495)(17,743)

Net cash provided by (used in)financing activities

Capital expenditures

Domestic
Overseas

Capital expenditures¥  12,124¥  11,769¥  13,222¥  14,149

Depreciation and amortization

8,619

9,284

8,943

9,917

Depreciation and amortization

R&D costs

9,117

9,593

10,13910,894R&D costs

Total assets¥ 575,328¥ 558,024¥ 597,249¥651,031

Total assets

Net working capital

358,245362,675

374,297

415,979

Net working capital

Total Makita Corporation
shareholders’ equity

486,021479,752

502,170

551,939

Equity attributable to owners of
the parent

5,030

2,225

6,597

3,544

Interest-bearing debt

Per share amounts(Yen)

Earnings per share (basic) net income attributable to Makita
Corporation common shareholders¥  166.89¥  153.30¥  164.96¥  201.70

Total Makita Corporation
shareholders’ equity per share

1,790.33

1,767.26

1,849.88

2,033.16

Cash dividends applicable tothe year per share

118.00101.00100.0061.00

Other data

Interest-bearing debt

Per share amounts
Profit attributable to owners of
the parent per share (basic)
Equity attributable to owners of
the parent per share
Cash dividends applicable tothe year per share

Other data

Ratio of operating income to
net sales

17.3%

15.3%

15.1%

16.7%

Ratio of operating profit
to revenue

ROE

9.8%

8.6%

9.1%

10.4%

ROE

ROA

8.3%

7.3%

7.8%

8.8%

ROA

84.8%

Ratio of equity attributable to owners of the parent tototal assets

Total Makita Corporation shareholders’ equity ratio tototal assets

84.5%

86.0%

84.1%

Average number of shares
outstanding

271,472,428 271,468,232 271,463,676 271,465,951

Average number of shares
outstanding

Number of shares issued
excluding treasury shares

271,469,736 271,466,522 271,460,572 271,467,928

Number of shares issued excluding
treasury shares

Employees

13,835

14,784

15,344

16,137

Employees

Notes: 1. Earnings per share (basic) net income attributable to Makita Corporation common shareholders and profit attributable to owners of the parent per share(basic) are computed based on the average number of shares outstanding
2. Figures are rounded up/down to the nearest million yen.
3. On April 1, 2017, Makita conducted a 2 for 1 stock split of its common shares. Earnings per share (basic) net income attributable to Makita Corporation common shareholders, total Makita Corporation shareholders’ equity per share, average number of shares outstanding, and number of shares issued excluding
treasury shares were calculated assuming that the stock split was also conducted in prior years. Cash dividends applicable to the year per share show theactual amount of the dividend before the stock split.

55

Makita Report 2024

(Million yen)

2018

2019

2020

2021

2022

2023

2024

¥ 477,298¥ 490,578¥ 492,617¥ 608,331¥   739,260¥   764,702¥   741,391

82,575

92,129100,697

113,048

118,050

122,978

123,222394,723

398,449

391,920495,283

621,210

641,724

618,169

80,23178,30564,046

88,46491,72828,246

66,16979,86579,91966,00887,19992,48323,88764,01754,94355,75047,73162,01864,77011,705

43,691¥   34,191¥   23,155¥   57,310¥   64,537¥ (103,660)¥   44,430¥   237,086(15,708)(15,329)(30,506)(42,913)(27,891)(37,680)(25,619)

18,483

7,826

26,804

21,624(131,551)

6,750

211,467(17,743)(8,231)(22,931)(23,036)

52,62680,970(191,277)¥   15,045¥   23,867¥   44,409¥   49,855¥   59,937¥   39,088¥17,851

10,783

11,271

12,05813,881

17,63921,72524,754

10,924

11,258

11,601

12,78314,145

14,903

14,314¥ 654,841¥ 680,250¥ 674,564¥ 812,878¥1,007,497¥1,099,351¥1,055,808

398,355

402,335

381,090

418,530

460,794

461,846548,160

554,046

572,748571,275

657,855

746,344769,247

868,156

3,544

11,96019,737

16,45596,462

203,615

40,316(Yen)¥   202.39¥   205.37¥   175.80¥   228.41¥   238.54¥    43.11¥   162.13

2,040.93

2,109.83

2,104.01

2,422.80

2,748.64

2,832.89

3,227.06

61.00

62.00

53.00

69.00

72.00

21.00

57.00

16.8%

16.0%

13.0%

14.5%

12.4%

3.7%

8.9%

10.4%

9.9%

8.3%

10.1%

9.2%

1.5%

5.3%

8.8%

8.4%

7.0%

8.3%

7.1%

1.1%

4.1%

84.6%

84.2%

84.7%

80.9%

74.1%

70.0%

82.2%

271,465,951

271,467,574

271,502,528

271,524,393

271,530,966

271,539,104

269,484,912

271,467,928

271,467,057

271,516,990

271,527,124

271,532,459

271,541,846

269,023,899

16,137

16,42417,09018,624

20,23318,804

17,6694. ROE is calculated based on the following:
U.S. GAAP: Net income attributable to Makita Corporation ÷ ((Total Makita Corporation shareholders’ equity at the beginning of period + Total Makita
Corporation shareholders’ equity at the end of period) ÷ 2) × 100
IFRS: Profit attributable to owners of the parent ÷ ((Equity attributable to owners of the parent at the beginning of period + Equity attributable to owners of
the parent at the end of period) ÷ 2) × 100
5. ROA is calculated based on the following:
U.S. GAAP: Net income attributable to Makita Corporation ÷ ((Total assets at the beginning of period + Total assets at the end of period) ÷ 2) × 100
IFRS: Profit attributable to owners of the parent ÷ ((Total assets at the beginning of period + Total assets at the end of period) ÷ 2) × 100

Makita Report 2024

56

Corporate Data

Stock Information(As of March 31, 2024)

Breakdown of Shareholders

Securities Code

6586

Stock Market
Listings

Tokyo Stock Exchange(Prime Market)
Nagoya Stock Exchange(Premier Market)

Total Number of
Shares Outstanding

Number of
Shareholders

Financial institutions
and securities firms
94,801 (33.9%)
Individuals and others
30,080 (10.7%)

Number of shares(1,000 shares)

Common shares 280,017,520(including treasury shares of
10,993,621 shares)

Foreign institutions
and individuals
115,149 (41.1%)

280,018

Other domestic
companies
28,994 (10.4%)

18,200Treasury shares
10,994 (3.9%)

Major Shareholders (Top Ten)
Number of Shares Held Ratio of Shareholding(1,000 shares)
(%)

Name
The Master Trust Bank of Japan, Ltd. (Trust account)

37,313

13.86

Custody Bank of Japan, Ltd. (Trust Account)

13,925

5.17

Maruwa, Ltd.

8,638

3.21

MUFG Bank, Ltd.

8,426

3.13

BNYM AS AGT/CLTS NON TREATY JASDEC

6,424

2.38

Makita Cooperation Companies’ Investment Association

5,921

2.20

Sumitomo Mitsui Banking Corporation

5,800

2.15

Nippon Life Insurance Company

5,353

1.98

National Mutual Insurance Federation of Agricultural Cooperatives

5,102

1.89

STATE STREET BANK WEST CLIENT – TREATY 505234

4,088

1.51

Note: The ratio of shareholding is calculated based on the total number of outstanding shares (excluding treasury shares) as of the end of the fiscal period.

Share Price Trend(Yen)(Million shares)

6,000

30

5,000

25

4,000

20

3,000

15

2,000

10

1,000

5

35

7,000

0

2014/4

2015/4

Share price (left axis)

2016/42017/42018/4

2019/42020/42021/42022/42023/32024/30

Trading volume (right axis)

Notes: 1. O
 n April 1, 2017, Makita conducted a 2 for 1 stock split of its common shares. For ease of comparison, the share price is the value after taking thestock split into account.
2. The share price is the closing price at the end of each month.

57

Makita Report 2024

Corporate Data

Corporate Data
(As of March 31, 2024)

Corporate Name

Makita Corporation

Head Office

3-11-8, Sumiyoshi-cho, Anjo, Aichi 446-8502, Japan
Telephone: +81 566 98 1711

URL

https://www.makita.biz/

Date of Founding

March 21, 1915

Date of
Incorporation

December 10, 1938

Paid-in Capital

24,205,610 thousand yen

Description ofBusiness

Production and sales of electric power tools, outdoor power equipment, pneumatic tools andhousehold equipment

Financial Year-end

March 31

Representative
Director

President Munetoshi Goto

(As of June 26, 2024)

Accounting Auditor

KPMG AZSA LLC

Consolidated
Revenue

741,391 million yen (fiscal year ended March 31, 2024)

Number of
Employees

17,669(Consolidated basis)

Consolidated
Subsidiaries
Principal
Consolidated
Subsidiaries

53

Sales subsidiaries

Sales and production subsidiary

Makita U.S.A. Inc.

Makita (China) Co., Ltd.

Makita (U.K.) Ltd.

Production subsidiaries

Makita Werkzeug GmbH (Germany)

Makita (Kunshan) Co., Ltd.

Makita France SAS

SC Makita EU SRL (Romania)

Makita Oy (Finland)Technology development subsidiary
Makita Engineering Korea Co., Ltd.
Procurement subsidiary
Makita International Procurement Co., Ltd.
(Taiwan)

Makita Report 202458

www.makita.biz