Integrated Report 2023
Fiscal Year Ended December 2022

The state-of-the-art technologies
that pave the way to the future

Nisshinbo Holdings Inc.
2-31-11, Ningyo-cho, Nihonbashi,
Chuo-ku, Tokyo 103-8650, JAPANTEL +81-3-5695-8833
www.nisshinbo.co.jp/english/

Nisshinbo Group Operating Performance

CONTENTS

Based on its commitment to VALUE and its Business Conduct Guidelines,
which are derived from the Corporate Philosophy, the Nisshinbo

Net Sales
Real EstateGroup aims to increase corporate value together with stakeholders

Profileas an Environment and Energy Company group that works to create a

4 The Nisshinbo Group’s ValueCreation Process
6 Portfolio Management andValue Creation Source
8 Three Strategic Business Domains

Nisshinbo Group Corporate Philosophy¥15.4 billion(Billions of yen)

12

Period ended
December 20228

sustainable society.

1 Nisshinbo Group Operating
Performance
2 Nisshinbo Group History

Wireless andCommunications

TextilesChemicals

Precision
Instruments

4¥516.0 billion

0Period ended
December 2022

Change and Challenge!
For the creation of the future of Earthand People.

Profileー Nisshinbo Group Corporate
Philosophy

Operating Income

Others-4-8Micro Devices
Automobile Brakes

Wireless andAutomobile
Chemicals
Real EstateCommunications
BrakesPrecision
TextilesOthersMicro Devices
Instruments

Value Creation
Value Creation

10 Message from the President
16 Nisshinbo Group Financial Strategy

Corporate
Philosophy

18 Key Business Growth Strategy:
Wireless and Communications
22 Key Business Growth Strategy:
Micro Devices

Operating Income/Loss*EPS

Shareholders’Equity Ratio
and ROE(Billions of yen)

(Yen)

（％）

250

50

200

40

25

26 Nisshinbo Group DX Initiatives

Sustainability

¥15.4

20

VALUE

28 ESG Initiatives－
Materiality, Risks and Opportunities

billion15¥121.06150

30 Human Capital, Safety and Quality

Business Conduct
Guidelines

35 Reports Based on the TCFD
Recommendations
38 Outside Director Message
40 Dialogues with Shareholders andInvestors

Pu

42 Corporate Governance

blic

Funda

Entit

y

46 Compliance
48 Board of Directors, Audit &Supervisory Board Members andManaging Officers

Overview of Business Segments
52 At a Glance
53 Wireless and Communications
56 Micro Devices
59 Automobile Brakes
61 Precision Instruments
63 Chemicals
65 Textiles
67 Real Estate

Inn

tio
ova

100

20

5

50

10

0

0

0

n

VALUE
—The value we provide and the approach we take to realize our
Corporate Philosophy• We provide our customers with eco-friendly products and services tocreate a safer and more secure society with integrity.
• We create new value to inspire and satisfy our customers.

• We improve upon our corporate value and meet the expectations of ourshareholders.

2018.12 2018.12 2019.12 2020.12 2021.12 2022.12(adjusted)*Operating income for the fiscal year ended December
2018 has been adjusted to facilitate the year-on-yearcomparison.

Number of Employees

Research andDevelopment Expenses

Greenhouse Gas (GHG) Emissions(Thousands)(Billions of yen)（Thousand t-CO2e）• We hold dear a corporate culture in which our employees can proudly
work with vigor and boldly engage in new endeavors.

Business Conduct Guidelines

20

21

thousandFinancial Statements

74 Key Companies in the Nisshinbo
Group
75 Major External Assessments• Awareness and Concern towards our Environmental Impact

76 Corporate Data

• Boldly Striving Forward

77 Integrated Report 2023 Publication
and Corporate Website Guidance• Quality Communication• Innovation

25

¥25.8

1,000

billion

20

438

15

thousandt-CO2e

500

15

10
10

• Safety is the Basis for Everything• Fair and Transparent Business Practices

30

750

• Thorough-Going Compliance• Respect for Diversity

2018.12 2019.12 2020.12 2021.12 2022.12

2018.12 2019.12 2020.12 2021.12 2022.12

250

5

5

0

0

0

2018.12 2019.12 2020.12 2021.12 2022.12

2018.12 2019.12 2020.12 2021.12 2022.12

2018

2019

2020

2021

2022

1

Data Section

68 Financials Eleven-Year Summary

7.6%

-10

-50

-5

25

• Respect for Human Rights

30

10— Standards of behavior expected of every Group employee

Data Section70		

Cons istent
Integrity

t

42.8%

Overview of Business Segments

47 Risk Management

mental Spiri

ROE

Sustainability

33 Contribution to the Environmental
and Energy Field

Shareholders Equity Ratio

Nisshinbo Group History

The Nisshinbo Group’s mission is to contribute to society through its business activities. In responding

Nisshinbo Group Net Sales (Billions of yen)

to changing social needs and transforming our business portfolio, we contribute to the resolution ofElectronics (Wireless and Communications, Micro Devices)
Automobile Brakes, Precision Instruments, Chemicals, Textiles, Real Estate and Others
600

Wireless and Communications, Micro Devices, as well as the Chemicals businesses, which includes

500

brake friction materials, chemical products, molding products, textiles and other products.

400* Nine months of results due to change in ﬁscal year-end

Profilevarious social issues. At present, the Group aims to further enhance corporate value centered on the

300
200
100
0

Business Portfolio Reforms

2015.32014.32016.32017.32018.32018.12*2019.122020.122021.12

1940–1960

Mid-1960s–1980s

1990s

2000s

2009

2010s

Diversified business to meet postwar demand fordaily commodities

Automobile Brakes businessexpanded amid increasing
motorization

Further business diversification andoverseas expansion buoyed by thestrengthening yen

Focused efforts on the electronics
field in preparation for the arrivalof the information society

Holding company
system adopted

Focused efforts on the Wireless and Communications and Micro Devices businesses

1970

1990

2022.12

Value Creation

1900s

2013.3

Wireless and Communications
Japan Radio Co., Ltd.

1915

• Nippon Radio Telegraph
Manufacturing Co. founded(now Japan Radio Co., Ltd.)1922• Completed Japan’sfirst wireless weather
broadcasting equipment• Completed Japan’s first 500W
vacuum tube transmitter

1939• Completed world’s firstcavity magnetron• Completed Japan’s first digital flight
simulator• Completed Japan’s first ultrasonic depth finder

1949• Developed world’s first onboard
GPS receiver for car navigation• Launched sales of Japan’s firstreal-time signal analyzer

1954• New Japan Radio Co., Ltd., founded

1960

2018

• Delivered world’s first S-band solid-state weather
radar to the Philippines• Achieved top global sharein maritime satellite vessel
communications equipment

1959• Developed world’s first narrow radar bandwidth
9GHz band 300W solid-state radar for vessels

2011

1983

• Completed Japan’s first weather radar

2013• Japan Radio Co., Ltd., and Nagano Japan Radio
Co., Ltd., became consolidated subsidiaries

1971• Nagano Japan Radio Co., Ltd., and Ueda Japan
Radio Co., Ltd., founded2010• ProNav AS became a wholly owned subsidiary2019• NJ Components Co., Ltd., became a wholly owned
subsidiary2020• Developed JM-Watcher II, Japan’s first app notifying
about the approach of nearby vessels

1984• Launched sales of world’s first transistorized loran
receiver• Alphatron Marine Beheer B.V., became a wholly
owned subsidiary

Sustainability

1923

1948

• Developed Japan’s first GPS
receiver for vessels

Micro Devices
New Japan Radio Co., Ltd. (now Nisshinbo Micro Devices Inc.)

1961

1975

2005

• Commenced production ofoperational amplifiers• Became a consolidated subsidiary of Nisshin Cotton
Spinning Co., Ltd. (now Nisshinbo Holdings Inc.)2018• Became a wholly owned subsidiary of Nisshinbo
Holdings Inc.

Overview of Business Segments• Transferred the Microwave Tube Manufacturing
Department from Japan Radio Co., Ltd.

2022

• Nisshinbo Micro Devices Inc. founded

Ricoh Electronic Devices Co., Ltd. (now Nisshinbo Micro Devices Inc.)

1981• Completed construction ofElectronic Technology Development
Center at the Ricoh Osaka plant

1987• Developed power control system ICs

1995• Developed lithium-ion battery
protection ICs

1999

2009

• Developed ICs
for automotive
applications• Developed mobile phone system LSI

2014• D-CLUE Technologies Co., Ltd., became awholly owned subsidiary• Ricoh Electronic Devices Co., Ltd., founded2018• Became a consolidated subsidiary of Nisshinbo
Holdings Inc.

Automobile Brakes, Precision Instruments, Chemicals, Textiles and Real Estate
1907• Textiles: Nisshin Cotton
Spinning Co., Ltd., founded

1944

2011

2015

1946

2014

• Precision Instruments: Nanbu Plastics Co., Ltd.,
became a wholly owned subsidiary• Automobile Brakes: Production of friction materials
started• Automobile Brakes: TMD Friction Group S.A.
became a wholly owned subsidiary• Chemicals: Nisshin Cotton Spinning Co., Ltd.,
commenced operations at the Nishi Arai Plant as achemicals production facility• Textiles: CHOYA CORP. sold• Textiles: TOKYO SHIRTS CO., LTD., became a wholly
owned subsidiary

2017

Data Section• Papers business sold

1958

2018

• Precision Instruments: Established Nihon
Kohbunshikan Co., Ltd., and commenced productionof plastic bobbins• Foundation brakes business sold

Challenges in each era• National modernization and industrialization•Transition in key industries (from textiles to automobiles)•Contributed to Japan’s modernization as acotton textile maker• Supported development of the automotive sector as a specialist supplier offriction materials• Global warming and climate change

Nisshinbo Group’s role2• Helping to create a super-smart society as an Environment and Energy Company group

3

The Nisshinbo Group’s Value-Creation Process

Nisshinbo’s business policy is to realize a super-smart society as an Environment and Energy Company group basedon our Corporate Philosophy. In line with this policy, we have continuously and flexibly changed our businessportfolio with innovations created through collaborations with a diverse range of people and the combination ofvarious technologies.

・ Group Corporate Philosophy
Sustainability management
Outputs

Outcome

ImpactFinancial capital

Products and solutions

Financial results

Mobility developments

EquityROE¥278.4 billion

Wireless andCommunications

Interest-bearing debt

¥146.9 billion

Manufactured capital
Micro Devices

Capital investment

Automobile
BrakesHuman capital
Number of consolidated
employees
Frequency of injuries withlost workdays (Japan)

0.25

Precision
Instruments

Intellectual capital
R&D expenses¥25.8 billion

Chemicals

90

Autonomous driving
advances▶︎ P.6

Infrastructure & Safety
strengthening andimprovements▶︎ P.8Providing solutions to issues
directly facing human society

Environment and Energy
Company group

Analog semiconductor
solutions
Automotive parts
contributing to
improved safety
Telemedicine andnursing care support
Life & Healthcare
improvements

Ability to

Ability to fuseconnect people

technologies

Safe and secure lifestyles

Realizing a
super-smart society▶︎ P.8

TextilesIncrease in female
managers
Diversity

Natural capital
Amount of energy consumed

8.94 million GJ

Real Estate

Water usage

6,176 thousand m

3

4

Shipping safety andadvanceschanges

Data Section

About

Ongoing portfolio

Disaster prevention
solutions

Highly specialized
human resources

Social andrelationship capital
Dialogue with investors
Total individual meetings

Global issues

Overview of Business Segments

21,081 people

Opportunities
and risks

Dividend payout ratio

Communications
infrastructure development¥29.0 billion

Changes in the external environment

Sustainability

41
Overseas sites 87

7.6 %Environmental destruction ▶ Global environmental protection and improvement = Offensive solutions
Extreme weather response ▶ Early warning = Defensive solutions

28.1%

As of December 31, 2022

Domestic sites▶︎ P.8・ Business policies

Value Creation

InputsProfileThe resulting products and services contribute to resolving social issues in our three strategic business domains.

Successful joint
development throughopen innovation
Greenhouse gas
emissions reductions

5

Portfolio Management and Value Creation Source
Improving Profitability throughPortfolio Transformation

The Nisshinbo Group maintains sustainable growththrough ongoing business portfolio transformations. At(Segment proﬁt)present, the key Wireless and Communications and Micro
Devices businesses account for 46% of overall sales. We

30,000Fiscal Year Ended December 2022

25,000

two businesses to 60% or higher by promoting ongoing
business portfolio transformations.

Fiscal Year Ended March 2010
Transition to a holding company structure

Papers

24%

3% 6%

21%

17%

23%

23%

Automobile
Brakes17%40%¥516.0 billion

Electronics

13%

6%

29%

21%
13%

Others¥242.4 billion
TextilesWireless andCommunications

Automobile Brakes,
Precision Instruments,
Chemicals, Textiles,
Real Estate and Others

6%

10%

2,181
776

99

Others

8,947

1,706
4,821

3,879
0

-2,654-2,130-5,000-4,664-535-375-2,65060%

46%Market leader in marine systems
Highly profitable solutions and specialized
equipment
Promoting shift toward high-profit
businesses where global growth isexpected

27%

27,000 vessels

73%

65%

27%

More than 3,000 GT of vessels
operating worldwide
About 37,000 vessels

Core
technologies

Electronic device signal processing and power supply control
technologies
Microwave-related technologies

Earnings
contribution

Competitive electronic devices, high-value-added power modules,
microwave product radar components and sensor products

Opportunities

Rising demand for power modules with advanced functionality for
automotive and industrial equipment applications
Creating demand by integrating electronic device and microwaverelated technologies▼

Vessels with Nisshinbo equipment
About 10,000 vessels
27% share

Share of Nisshinbo Micro Devices lithium
battery protection ICs (single cell)
Applications

Nisshinbo Micro Devices’share*

Smartphones,
video games,
etc.

About 25%

Source: Survey conducted by Nisshinbo Micro Devices
Inc. in 2021

7

Data Section

Earnings
contribution

Ratio of two mainstay
businesses within total
segment profit

Micro Devices

Marine systems market share
10,000vesselsor higher

Overview of Business SegmentsCoretechnologies

Communication network technologies
Sensing technologies
Data analysis capabilities

3.0%

1.4%

Two key businesses

Wireless andCommunications

OperatingmarginOperatingmargin-10,000

Sustainability

Precision
Instruments

Value creation source

6

5,000

17%

Electronics sales ratio

Opportunities

8,719

6,136

Wireless andCommunications,
Micro Devices

Others283

193

10,00010%

Chemicals

21,165

Fiscal Year Ended
March 2010
Transition to a holding
company structure

3,569

Micro Devices

30%

Automobile
Brakes

15,000Fiscal Year Ended
December 2022

Value Creation

Real Estate

Precision Instruments,
Chemicals,
Textiles, Real Estate
and Others

20,000■ Wireless and Communications■ Micro Devices■ Electronics■ Automobile Brakes■ Precision Instruments■ Chemicals■ Textiles■ Papers■ Real Estate■ Eliminations/Corporate

Profilewill raise the contribution to consolidated sales from these(millions of yen)

Three Strategic Business Domains

In reforming its business portfolio, the Nisshinbo Group is working to enhance corporate value by concentrating
and allocating management resources to three strategic business domains constituting promising markets with highpotential for contributing to the resolution of social issues while demonstrating Group competitive advantages.

Operating companies

Strengths and Group synergies

ProfileBusiness domains, major markets and core businesses

Related SDGs

Mobility
Major markets

Operating companies

radar, wireless communications

・CASE

Japan Radio Co., Ltd.

while enhancing technologies relatedCore businesses

JRC Mobility Inc.

to all moving objects on land, sea

・Marine Systems J-Marine Cloud

Nisshinbo Micro Devices Inc.

・Sensor Fusion (e.g., 3D Authentication

Nisshinbo Brake Inc.

and other proprietary technologies,

and air, including autonomous
vessel navigation and advanced
driver assistance systems (ADAS),
to contribute to safety and theenvironment.

Technologies, Erroneous Incursion
Detection)・High-precision Positioning Services

Nisshinbo Mechatronics Inc.
Nisshinbo Chemical Inc.

By linking business segments including Wireless and Communications, Micro Devices,
Automobile Brakes, Precision Instruments and Chemicals, the Nisshinbo Group combined
technologies such as LTE (next-generation high-speed mobile communications standard)

Value Creation

The Nisshinbo Group will integrate

and millimeter wave communications, while refining technologies related to the autonomous
operation of all moving objects on land, sea, air and space, beginning with advanced driverassistance systems (ADAS: Level 2). Among these efforts, our 3D recognition technologies
have already earned a high reputation worldwide for their ability to facilitate autonomous
movement without malfunction regardless of the weather. The addition of AI will enable us
to incorporate predictions of movement for people and objects as we attempt to achievecommercialization. We also aim to create solutions in areas other than vessel navigation by

・Automotive Brakes: Friction Materials

visualizing the ocean using meteorological data and marine resources.

The Nisshinbo Group leverages the

Major markets

Operating companies

technologies and knowledge of each・Disaster Prevention Equipment andJapan Radio Co., Ltd.

Group company related to disasterprevention systems such as weather

Systemsradar, river water level monitoring

Core businesses

systems and total maritime

・Disaster Prevention and Weather

solutions facilitating human safety
and security in a super-smart society.

Nisshinbo Chemical Inc.

To protect people from natural disasters such as river floods, sediment-related disasters,
tsunamis and storm surges, Nisshinbo Group business segments including Wireless andCommunications, Micro Devices and Chemicals collaborate to provide equipment and systems
such as water level gauges and rainfall meters, as well as the telemeters, alarms, sirens andcameras that remotely manage them, while building dam management and other systems bycreating a network with these devices using communication technologies. In disaster prevention
systems including weather radar and river water level monitoring systems, we are developing aServiceswide range of solutions in Japan and overseas, from disaster prevention to disaster prevention

・4G/5G Mobile Network Base Stations

information communication systems that notify residents of dangers by combining weather

・Driving Safety Support System (DSSS)

information with earthquake information obtained from weather radar. With the advantage ofOverview of Business Segments

information services, providing

Nisshinbo Micro Devices Inc.

Sustainability

Infrastructure & Safety

strengths in leveraging Group company technologies and knowledge, we will make use of strong

・Bipolar Plates for Fuel Cells

relationships with government agencies cultivated up to now, and in addition to equipment sales,
we will utilize data obtained from that equipment to create a variety of service solutions.

Life & Healthcare
Major markets

Operating companies

・Medical Equipment

Japan Radio Co., Ltd.

・Nursing Care Equipment

Nisshinbo Micro Devices Inc.

Core businesses

Nisshinbo Mechatronics Inc.

・Portable Ultrasound Analyzers

Nisshinbo Chemical Inc.

Group promotes the developmentof environment- and medicalrelated products incorporating thetechnologies of each Group company.

・System to Monitor People Who Require
Nursing Care・Carbodilite

Nisshinbo Textile Inc.

The Nisshinbo Group promotes the development of environment- and medical-related
products through collaborations among the Wireless and Communications, Micro Devices,
Precision Instruments, Chemicals and Textiles business segments and applying their respective
technologies and knowledge. In terms of medical-related products, for more than 60 years
since the development of ultrasonic diagnostic equipment in 1960, Ueda Japan Radio

Data Section

As an Environment and Energy

Company group, the Nisshinbo

has contributed to the development of ultrasonic diagnostic equipment through contractdevelopment and manufacturing, creating a medical business based on the past cultivationof the world’s top-level ultrasound and wireless communication technologies. Proprietarily
developed handheld ultrasound devices with high-quality images manufactured and launchedby Ueda Japan Radio in December 2020 are driving the expansion of our earnings base in theLife & Healthcare domain amid growing demand in the diagnostic field due to COVID-19.

8

9

Message from the President

Nisshinbo Group Corporate Philosophy

Enhancing Corporate Value

ProfileChange and Challenge!
For the creation of the future of Earth and People.

Increasing Profitability and

Adapting to the changing demands of modern life andsociety and shifting focus to the environment and energy fields
Targeting three strategic business fields

through the Execution ofBusiness Policies

Realize a super-smart society as
an Environment and Energy Company group

Our Growth Strategies

Value Creation

Aiming to increase corporate value
through business policies closely linked to our
Corporate Philosophy

Strategic Business Domains
Masahiro Murakami

President and Representative Director
Nisshinbo Holdings Inc.

demonstration experiments, and with other countries
following the lead of developed nations, the global

Infrastructure & Safety

Life & Healthcare

Weather radar
Disaster prevention
solutions
Alertmarker+ and others

Ultrasound imaging equipment
Medical equipment andhealthcare management
equipment development and othersfrom the perspectives of land, sea and air.
In the Infrastructure & Safety domain, we are alreadySustainability

Aiming to Realize a Super-smart Society
Centered on the Environment

Mobility
Copper-free friction materials
Fuel cell vehicle parts and materials
Marine wireless communicationequipment and otherssociety is also rapidly aging. And rather than connection
by wires, telemedicine requires wireless connectivity.

promoting initiatives that protect human life from

Handheld ultrasound diagnostic devices manufactured

The Nisshinbo Group Corporate Philosophy is“Change

require a considerable amount of time. Amid thesenatural disasters, mainly through Japan Radio sensing

by Ueda Japan Radio will also be taken to the next

and Challenge! For the creation of the future of Earthconditions, we support autonomous driving with sensors

and communications technologies, ICs provided bylevel by enabling them to be used with smartphones

and People.”This philosophy informs our businessas well as camera and radar fusion. There is a limit to

Nisshinbo Micro Devices Inc. and river monitoring

and remote treatments. In the medical field, obtaining

policies that aim to realize a super-smart society as an

how close we can get to preventing accidents duringsystems. However, for Nisshinbo, this is only theregulatory approvals and permits is a time-consuming

Environment and Energy Company group. While there

autonomous driving using only cameras and radar, so

beginning. As the global environment continues toprocess. However, leveraging our strength in achieving

are various segments within the Group, the vector of all

we will work with automakers to create a fusion ofdeteriorate, natural disasters caused by climate change

in-house collaborations between medical devices andour businesses is aligned with the environment. At the

Nisshinbo products, including camera devices, radar

are occurring frequently in many parts of the world. We

wireless and communications technologies will lead toroot of these business activities is our aim of realizing aand ultrasound sensors. Furthermore, cars of the future

will continue to develop business in cooperation withthe realization of a super-smart society able to guarantee

super-smart society centered on the environment. Four

will not be limited to driving on the ground. We are also

local governments making the safety of local residents

human safety and security.

years ago, we defined Mobility, Infrastructure & Safety,

developing radar for transportation drones that fly in the

our top priority, with the ultimate goal of providing

and Life & Healthcare as three strategic business domains

sky, and have already completed collision avoidanceservice businesses that contribute to climate change

in which we will deepen efforts to achieve this aim.

demonstration experiments. Originally, this system was

mitigation and environmental improvements.

developed to support flight safety by ensuring that

Data Section

We chose Mobility both in reference to automobiles,

Review of Fiscal 2022 and Outlook for
Fiscal 2023

Unlike Mobility and Infrastructure & Safety, which arewith which our business has been closely associateddrones would avoid air ambulances. Going forward,

focused on immediate results to current challenges,

In 2022, the conflict in Ukraine erupted amid thefor some time, as well as to encompass vessels,

we plan to create a system leading to safe operations,the third strategic business area, Life & Healthcare,lingering pandemic, bringing higher raw material andaircraft, man-made satellites and other moving objects,

including collision avoidance between drones andis focused on a long-term time horizon of about 10

fuel costs. For the past two years, the Nisshinbo Group

including those in space. Automobiles are a large

communications with the ground using radar. We will

years. Telemedicine is essential in Japan, which is fasthas made efforts to strengthen pricing strategies

market that includes the advance of autonomous driving

continue developing business in the Mobility domain

becoming a super-aging society, as well as China, where

through thorough cost controls, and while we have

10

Overview of Business Segments

transition to autonomous driving is still expected to11Message from the President

unable to provide specific timing and other details out ofyears ago to check the profit margin of each productassumed exchange rate of ¥130 to US$1, we forecast

consideration for the counterparties involved, we engage

and shift to businesses with higher profit margins. While

net sales of ¥557.0 billion, operating income of ¥24.0

in these projects with a seamless approach. Whenit will take a bit more time before results are clearlybillion, ordinary income of ¥27.0 billion and net income

transferring our paper products business, we engaged inseen in the numbers, we are constantly reviewing

attributable to owners of the company of ¥18.0 billion

negotiations with a focus on the conditions and timing

businesses and products as part of management efforts(as of February 10, 2023).

that were best for the target company employees,

to assemble a business portfolio that contributes towhich ended up taking 10 years from decision-making to

improved profitability. Rather than focusing on current

conclusion. The reason we have not announced current

performance, we continuously view the portfolio

when I joined the company, was also said to be a timeplans for the next fiscal year and beyond is because wefrom 5–10 years in the future, and will reorganize it inof uncertainty. Today is no different than the past, inare continuously engaged in these M&A and carveout

response to changes in the environment with efforts thatthat we are always amid uncertainty, upheaval andprojects. We believe the right time to disclose medium-include M&A and carveouts while focusing efforts on theturmoil. Without being swayed by these words, myto long-term goals is after M&A has reached a certain

cultivation of new businesses.

sense is that it is important we take decisive measuresscale, carveouts have progressed to a certain point andto address foreseeable risks and transform ourselves

business portfolio reforms have been implemented to aamid environmental changes while promoting growthcertain extent.

made considerable progress in passing on costs, we

strategies in our mission to contribute to society

were faced with this sudden increase in costs. This had

through business activities.

a particularly large impact on TMD, Nisshinbo Brake’s
European subsidiary, which aggressively promoted
cost pass-throughs, but was unable to pass on all cost

Continuous Engagement in M&A and
Carveout Projects

increases during fiscal 2022, so some results of theseStrengthening Profit Structure through DX
and Creating New Business Models

At the same time, simply using M&A to achieve topline
growth is meaningless. We position ROE and ROIC as

In fiscal 2022, we promoted growth strategies underimportant indicators for strengthening our earnings basethe slogan,“strengthening profitability through businessand increasing asset efficiency. With regard to ROE, I

transformations.”To continue engaging in businessbelieve we must consistently exceed 10%. While we are

activities, safety and health activities are most important,trying to change both the denominator and numerator

followed by continuous improvements. To realize a

From a management perspective, business portfolio

when calculating ROE, it is of fundamental importance toleaner structure, we must constantly strengthen ourtight supplies of electronic components caused sometransformation remains the core of businessincrease profit in the numerator, which we recognize as

structure by steadily promoting continuous onsite

projects, mainly in wireless and communications, to betransformation. Despite making no significant progressthe most important factor in improving PBR.

improvements and drastically changing the businesscarried over to the next fiscal year.

in terms of drastic business portfolio transformations in

Within the Company, I remind employees to“profit

fiscal 2022, we have continuously engaged in M&A andproperly.”An approach whereby we increase sales andformulated based on the assumption that the pandemic

carveout projects. Although the probability of concluding

reduce fixed costs results in many businesses having

will subside but continue to linger, while the current

agreements on these projects is low, and despite being

low profit margins, so we launched an initiative three

Supported development of
automotive sector as a specialist
supplier of friction materials

Helping to create a super-smart
societyas an Environment and Energy
Company group

Mobility

TextilesIn addition to steadily strengthening our profit
structure, we will further accelerate operational efficiency

Targeting specific SDGs where Nisshinbo can make a real contribution while also taking into account all 17 SDGs

Life &
Healthcare●○

Automobile
Brakes●Precision
Instruments●

Wireless andCommunications

●

●

●

Micro Devices

●

●

●

○

Chemicals

●

●

●

○

○

○

○

○

Real Estate

○

○

●
○

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●
Target 3.6

Target 7.3

Target 3.2

Target 3.2: Reduce the infant mortality rate
Target 3.6: Halve the number of global deaths and injuries
from road traffic accidents

Target 7.3: Double the global rate of improvement inenergy efficiency

Target 9.4

Target 13.1

Target 9.4

Target 9.4: Improve sustainability with environmentallysound technologies

Target 13.1: Strengthen resilience to climate-related
hazards and natural disasters

Core SDG objectives and targets in our business12

methods such as those I mentioned earlier.

Data Section

Nisshinbo Group’s contribution

Contributed to Japan’s modernization
as a cotton textile makerBusinesssegments

Infrastructure& Safetyitself as well as the business systems, employing

Overview of Business Segments

The Group’s Contribution

Strategic businessdomains

Sustainability

efforts will be delayed until fiscal 2023. Furthermore,

Looking ahead to 2023, the business plan was

Value Creation

It is said we are now in a time of volatility, uncertainty,
complexity and ambiguity (VUCA). However, the 1980s,

ProfileUkrainian conflict will remain unresolved. Based on an

13

Message from the President

the key point is how well companies value their people.

the improvement activities we have been promoting up

Even if we continue engaging in business focused on theto now. DX does not equal digitalization. How we use

environment (E), we will not be able to maintain business

IT and digital technologies, and the details of“X”areunless we can adequately guarantee the existence ofimportant. One direction we can target with DX is thepeople (S), which are a requirement for a company’suse of digital technologies to enhance software content

existence.

and launch subscription-based services. For example,

Profileenhancements through the use of digital technologies in

The Nisshinbo Group’s underlying principle is“businessis people,”and our focus on valuing people remains

and digital businesses utilizing J-Marine Cloud, which is aunchanged to this day.“People”are not limited todatabase of information collected from the sea and land,

employees, as we also see the importance of engaging

are nearing commercialization. These are precisely thein win-win activities that can benefit all stakeholders.

kind of businesses developed based on manufacturing,Thus, we are very passionate about“people”and focus

and I have high expectations that they will bring about aefforts on education, training and meritocracy. In terms oftransformation of the business itself.

education and training, we promote level-based training

Value Creation

subscriber services for the creation of drone flight plans

systems in parallel with selective human resource

Nisshinbo Group Sustainability Management

development, and encourage each individual to improve

Our mission is to contribute to society through ourmandatory training and self-directed educational efforts.

business activities, so we are not fixated on businesstheir professional literacy through a combination of
At the same time, increasing the number of women
In fiscal 2022, we provided ¥17 per share in bothin management positions is not something that can bescores have also shown improvement. We are also

by providing solutions to changes in the social

achieved overnight, so we continue to engage in efforts

working to make Group companies with comparatively

interim and year-end dividends, amounting to an annual

environment as they occur. This is Nisshinbo’s policy,

to change systems and employee mindsets. In addition

low employee survey scores more aware by showing

dividend of ¥34 per share, an increase of ¥4 per share.

based on the concept of being a public entity, which

to changing existing systems requiring a set number ofthem Group companies with high scores. I often tell

Furthermore, in terms of operating cash flows, as we

contributes to the SDGs.

years of experience before an employee is promoted,

employees“D&I is the starter of innovation, and DX is

are able to secure funds for growth investments, in May

At present, we are developing business centered

we have revised our personnel system to incorporate

the accelerator.”

2022, we announced share repurchases comprisingon the environment to realize a super-smart society

multi-track and transferable functions. Furthermore, wethrough businesses that contribute to the improvement

have expanded the ratio of mid-career hires in career-of failure. We are attempting to cultivate a corporate

price of ¥10 billion, which was executed at the end ofof the global environment. Furthermore, in fiscal 2022,

track positions from around 20% to about 50% andculture that is unafraid of change by conveying the idea

November. In fiscal 2023, we project capital investments

we announced carbon neutrality in 2050 as our mostpromote an influx of diverse human resources in terms of

that“failure is not something to be criticized, but ratherof approximately ¥40.0 billion and R&D investments ofimportant environment-related issue. As part of thisgender, age and other qualities.

forgiven and utilized. A culture that allows failure andapproximately ¥30.0 billion, and plan to increase themakes the most of it will achieve innovations. A culture

annual dividend to shareholders by ¥2 per share.

emissions 50% by 2030 compared with fiscal 2014,
and we have already achieved a reduction of about

Cultivating a Corporate Culture“Unafraid of Change”

that does not allow failure breeds dishonesty.”Thatbeing said, we have no room for leniency when it comesto unlawful conduct, and impose severe punishments

35% toward that goal. As part of these efforts, we havea maximum of 12 million shares at a total repurchase

Overview of Business Segments

process, we set the goal of reducing greenhouse gas

Another important aspect of change is to be unafraid

Message to Stakeholders

seen a more than 40% reduction in greenhouse gas

We have been enhancing diversity and inclusion efforts

for any conduct that violates laws, corporate ethics

While shareholders are the owners of the Company,

emissions from the shutdown of in-house coal-fired

for about three years now, and to ensure these efforts

or public morals. More than 10 years ago, the Group

we believe it important to conduct business andpower generator equipment in Indonesia, the switch

become truly pervasive throughout the Company, I tellestablished the Corporate Ethics Reporting System,

increase value while maintaining an awareness of all

to geothermal power generation and the installation

employees,“First, you must acknowledge that you arewhich has functioned very well thus far.

stakeholders, including customers, employees, businessof solar panels on plant rooftops. We are also on

one of the diverse individuals in our Company.”I am only

track to achieve our 2030 target by switching to gases

one of many diverse individuals in the Company. Whenused in the semiconductor business that have a lower

all employees adopt this perspective, psychologicalenvironmental impact.

partners and local communities. We believe we canShareholder Returns

meet stakeholder expectations by rejecting capitalsafety is created around us, and we can create an

Our basic policy on shareholder returns is, after first

autocratic labor, and instead recognize our mutualorganization where opinions can be expressed openly

prioritizing strategic investments for growth, to pay stableauthorities and responsibilities while cooperating with

to further accelerate“S,”or people-centered initiatives.

and without undue restraint. An organization such as

and continuous dividends, with a target consolidated

each other to maximize profits as overall added value.

Companies comprise people, goods, money and data,

this is more likely to innovate, and this will be reflected

dividend payout ratio of approximately 30%. If sufficient

We hope for your continued support as we work to

but goods, money and data generate value only whenin the Company’s performance. As the D&I philosophy

retained earnings are secured, we consider proactive

increase profitability and enhance corporate value

used by people. People are important to companies, so

has become further entrenched, employee survey

shareholder return measures, including share buybacks.

through the execution of our growth strategies.

14

monopolization, arbitrary management decisions andData Section

As we proceed with environmental initiatives, we want

Sustainability

itself. Rather than fixating on one business, we contribute15

Nisshinbo Group Financial Strategy

Basic Financial Capital Strategy

plan, streamlining consolidated assets and promoting

sales. Through scenario analysis, each business unit has begun

The Nisshinbo Group promotes management emphasizing

sustainability management. Sustainability management isto recognize the risks and opportunities posed by climate

particularly important for improving equity and enterprisechange as issues relevant to their business and measures havespreads. We believe that increased management resilience

been launched to address these issues.

profitability and efficiency while maintaining financial
investment and risks. As we are engaged in a diverse rangeof businesses with the mission of“contributing to society

will reduce the medium- to long-term hurdle rate, which we
put at a WACC of 6%.

to traditional businesses. The Group cannot advance withoutchanging its business and asset profile.
In promoting business portfolio reorganization, we haveintroduced return on invested capital (ROIC) as an important
average cost of capital (WACC) at 6%, and are initially aiming
for ROIC of 8% as an average for the entire Group, after which
we will attempt to increase ROIC even further. Several years
have passed since we introduced ROIC, and we will utilize
it as one criterion for determining business leverage andcontinuity. As our current challenge is to improve profitability,
we believe it necessary to identify and revise the strategies ofbusinesses that are not showing improvement in ROIC.
Even before these ROIC initiatives, we promoted Companywide continuous improvements and cost-control activities,business units and individual products. In line with this policy,
we have also been consolidating and reorganizing overseas
bases. Since 2020, we have used an ROIC tree to clarify
issues that all employees should address and strengthen

Shuji Tsukatani
Director and Managing Officer
Senior Manager of Finance,
Accounting & IT Service Department of Corporate Strategy Center

full-scale introduction of ROIC is intended to refine businessevaluations. In addition to organic growth, up to now wehave been proactively pursuing M&A in key segments suchas Wireless and Communications and Micro Devices toincorporate them as growth businesses. In May 2023, weannounced the acquisition of Hitachi Kokusai Electric shares.
The acquisition value is expected to total ¥37 billion, which
will be financed by bank loans. Debt financing is expected

Funds required for Group-wide working capital and growthgas emissions. At the same time, we have a responsibility toinvestments come mainly from operating cash flows, but

provide the world with system technologies that maintaininterest-bearing debt is also utilized effectively to improve

human safety and protect property from drastic climate

capital efficiency as needed.

changes caused by global warming. For example, the GroupIn allocating resources, we consciously invest in asset-

approximately 0.28x, the same level as in the previous year.

production processes while responding to societal demands
in ways that ensure our products help reduce greenhouse

is involved in weather radar and disaster prevention systems.

light businesses such as Wireless and Communications.

In a future assuming drastic climate change, weather radar

The solutions and marine systems businesses in Wirelesswill quickly predict linear precipitation zones and torrential

and Communications belong to the assembly industry,rainfall, then relay this information to disaster prevention

thus initial investments are lower, with the main focus

systems. Utilizing 5G and IoT technologies, we expect disasterbeing investments in systems and human resources. We

prevention systems will be able to provide more personalized

will transition from businesses that sell products to thoseand detailed evacuation information. We believe resourcesthat utilize the technologies and products we have honedshould be proactively allocated to address inadequate

through manufacturing. As we develop service businesses

software technologies and other areas deemed insufficient for

integrating DX and IoT, we will develop asset-light

this purpose.

businesses. Semiconductors and brake friction materials,
which require relatively large initial investments, tend to bedisadvantageous in terms of asset efficiency, although thiscreates barriers to entry and contributes to business stability.

Shareholder Returns

The determining factor will be whether Nisshinbo can

The Nisshinbo Group aims to continuously increase

continue generating stable cash flows in the future, the key

shareholder value by promoting management that emphasizes

to which will be shortening the investment payback period

profitability and efficiency. We also intend to invest in areas(depreciation period) of about 10 years through improvedthat drive growth, such as R&D, capital expenditures and M&A,

profitability. Increasing asset efficiency will naturally affectaiming to secure even greater support and trust from society

the streamlining of shareholders’equity on the procurement

and stakeholders as an Environment and Energy Company

side. We aim to achieve ROE targets by streamlining

group. An important point in returning profits to shareholders

shareholders’equity while increasing profitability.

is to increase the share price through improved businessperformance.

to maintain the EBITDA/interest-bearing debt ratio at

In principle, there are two distributions per fiscal year:
the interim dividend and the year-end dividend. Targeting a

Response to Climate Change(as of June 30, 2023), dialogue with the target company has

The Nisshinbo Group corporate philosophy is“Change andto provide the stable and continuous distribution of dividends.

been limited due to antitrust law considerations. After closing

Challenge! For the creation of the future of Earth and People.”

Furthermore, if sufficient internal reserves are available tothe agreement, we will engage in thorough discussions with

As climate change has become one of the major threats to

execute future growth strategies, we will consider proactively

the target company regarding the effects of this acquisition

the Earth and its inhabitants, seizing business opportunities

returning profits to shareholders, including share buybacks,

and the pursuit of synergies.

and appropriately responding to the risks posed by climate

taking into consideration stability and dividends on equity (DOE).

change have become important management issues. As partconsolidated payout ratio around 30%, Nisshinbo’s policy is

Based on this policy, in the fiscal year ended Decemberthat we improve our P/B ratio, which is below 1x. We areof these efforts, in fiscal 2021, the Group began analyzing

31, 2022, we increased the full-year dividend per share by ¥4preparing to disclose this information by carefully examining

climate change scenarios in accordance with the Task

(to ¥34 per share) and repurchased ¥10.0 billion in treasury

our business plan so as not to make any hasty decisions. To

Force on Climate-related Financial Disclosures (TCFD)

stock. In the fiscal year ending December 31, 2023, based on

improve the P/B ratio, we are cognizant of the need to gain

recommendations. By fiscal 2022, the Group had completed

earnings forecasts, we plan to increase the full-year dividend

the confidence of the market by clearly stating our businessanalysis on segments accounting for more than 90% of net

per share by ¥2 (to ¥36 per share).

17

Data Section

As the share transfer agreement has yet to be concluded

Furthermore, the Tokyo Stock Exchange has requested

16

industry must strive to reduce greenhouse gases emitted from

Overview of Business Segments

Targeting Improved Asset
Efficiency through the Steady
Promotion of ROIC

awareness of the need to generate operating cash flow. The

Resource Allocation and
Growth Investments

Sustainability

as well as selection and divestment at all levels, including

define initiatives related to climate change. The manufacturing

Value Creationinternal management indicator. We have set the weighted

in the three fields of Mobility, Infrastructure & Safety and Life
& Healthcare as strategic business domains, enabling each tothrough businesses activities,”we are targeting further growththrough business portfolio transformation without adhering

The Nisshinbo Group established and conducts activities

Profilesoundness in preparation for medium- to long-termKey Business Growth Strategy: Wireless and Communications

designs, we cannot see the essential underlying problem unless
we understand what kind of problem the customer is facing in thefirst place. For example, in delivering disaster prevention systems,
dam control systems and other social infrastructure systems, we
provide installation and maintenance services, which enables us tois then incorporated and utilized in subsequent proposals. We willcontinue to steadily enhance our ability to provide customer value
by viewing our technologies from the customer’s perspective andlinking this to proposals.

What kind of expertise in core

field, our subsidiary provides ultrasound imaging equipment thattechnologies have you accumulated

uses ultrasound sensing technology to ascertain the condition

over the years?

of internal organs. Navigational equipment installed on vessels

Radio waves and light are used as means of communication andsensing to extend the range of human activities. However, when
there are obstacles that obstruct the path of radio waves or light,
compensating for the obstructed area becomes a critical point froma technological perspective. Various compensation methods canbe considered, but one of the difficulties of expertise is whether

Our third strength is integration skills combining multiple
technologies. As there are many issues that cannot be resolved
by refining a single technology, the comprehensive combinationof various technologies required to resolve issues from within or
outside the Company enables us to provide the means for resolving

the optimal solution can be provided by comprehensively taking
into account degree of importance, stability and cost, among otherfactors.
Furthermore, as radio waves and light travel in straight lines,
they cannot reach the opposite side of the Earth. Even if there is

C-band Weather Radar: Share within the Ministry ofLand, Infrastructure, Transport and Tourism (MLIT)
and the Japan Meteorological Agency

and satellites to relay radio waves and send them to the required

nothing obstructing their path, it is necessary to use the ionospherearea. In addition to technology itself, expertise is needed to know
how to cover these areas. As an example, although a large numberof mobile phone base stations are installed to cover a given area,

Maximizing Value through CoreTechnologies and a Solutions
Orientation

Market scale

Approx.

¥11.0 billion

JRC

37％

Dam and Weir-related Equipment*: Share within MLIT
Other
companies total
Market scale

Approx.

What are Japan Radio’s strengths?

¥84.0 billion

was communications equipment and radar that contributed*Excluding water intakes and other small facilities

Share within Prefectural Disaster Prevention Systems

to vessel navigation and operation, but the use of wirelesstechnologies not only facilitates communications with remote
Market scaleof waves to visualize what is invisible to the naked eye or light. As

Approx.

the use of wireless technologies is expected to continue expanding,

Our second strength is the ability to provide customer value,
namely, the ability to identify and resolve customer issues. Even
if we are able to resolve a customer’s issues with technical

18

Growth Strategy

How will you achieve growth using theseＱ

strengths? What is your growth strategy?

orientation in all businesses. In other words, our products andcaused by wireless technologies and provide comprehensive

services will become a means to resolve customer problems andservices.

social issues. Depending on how they are used, even parts andmaterials can become solutions that resolve issues.
Social solutions and Offshore solutions have already establishedsensing is to ascertain conditions by emitting radio waves anda certain business scale as our earnings base, and Industrial

analyzing their reflection from the surrounding areas. There is asolutions and Medical and Healthcare solutions will drive futurewide range of needs for sensing applications, including the safe

growth.

navigation of vessels on the sea, self-driving automobiles on land

In the Industrial solutions domain in particular, although weand weather radar in the sky, which we were first to provide in

can see the potential for market growth, the speed of change

Japan. We have expanded the potential uses of sensing from theis rapid and there are many players entering the market, so theperspectives of what and how it is used to see. In the healthcare

key is how to demonstrate superiority while keeping pace with

Aiming to Become a True Solution Business

Other
companies total

28％¥94.0 billion

72％

Oﬀshore solutions［Solutions and Specialized Equipment Business］［Marine Systems Business］

Disaster prevention and mitigation,
traﬃc and defense solutions

Smartship solutions

Infrastructure maintenancesolutionsOﬀshore system solutions

Industrial solutions

Medical andhealthcare solutions［ICT and Mechatronics Business］

4G/5G solutions［New Business］［Medical Equipment Business］

IoT base■ Private 4G/local 5G■ Sensing (radars, ultrasound, images)■ Data analysis infrastructure

Data Sectionsocial issues by using radio waves, ultrasonic waves and other typearea are a great strength.

significance of events.

The basis of our growth strategy is to promote a solutions

JRC

locations but also contributes to the resolution of customer andthe skills and expertise we have cultivated over many years in this

IoT is also leading to DX through the analysis of data collectedby devices and data analysis that creates value by discerning theSocial solutions

Our first strength is in core technologies, including
communications, sensing and data analysis. Our founding businessand more recently, for supporting automatic navigation.

JRC

42％

various social issues based on wireless technologies, as indicatedcultivated three major strengths.

extracting only that wave information necessary for avoiding danger,

technologies and the expertise enabling us to rectify inconveniences

Since our establishment in 1915, we have contributed to resolving
by our company name. Over the course of our history, we haveocean waves not directly required for navigation, or conversely,

Overview of Business Segments

Ｑ

accumulated in this field, such as excluding sensing information on

Sustainability

Takeshi Koarai

Three Strengths

competitive advantages derived from expertise we haveslightly to cover gaps in the area. We have accumulated wirelesspossessed by the sender to the receiver, while the purpose of58％

considerable expertise. We are confident in our outstandingbase stations at unnecessarily high costs, antennas can be tilted

The purpose of communications is to convey information

Representative Director and Senior Executive Managing Officer
Nisshinbo Holdings Inc.
Representative Director, President
Japan Radio Co., Ltd.

and temperatures, while also being cost-effective, which requires

there will still be gaps in that area. In this case, rather than adding

Other
companies total

63％

conditions, including vibrations, oscillations, weather phenomena

Value Creation

issues and demonstrating our substantial strengths.

requires operation under exceedingly adverse environmental

Profileunderstand customer inconveniences and problems. This knowledge

Ｑ

Mobility solutions［Mobility Business］

Data-driven solutions［New Business］

Note: Market scale and shares are Nisshinbo estimates (FY2022)

19

Key Business Growth Strategy: Wireless and Communications

the speed of change. For example, in primary industries such as
fisheries, forestry and agriculture, there might be opportunities tocreate new solutions by focusing on the air, land and sea, including
drones, while in secondary industries such as manufacturing, various
business opportunities are opening up through innovations thattechnologies, the value we provide customers and integration skills
represented by our strengths, and provide solutions that contributeto quantification and the elimination of waste in operations byviewing issues from the customer’s perspective, even in areas thecustomer has not noticed before. In developing solutions, we willcontinue to enhance our strengths, and in areas where we need toreinforce our strengths, rather than insisting on going it alone, wewill seek various forms of collaboration, ultimately leading to thearrangement that best meets customer needs.

Ｑ

How do you plan to increase profitability?

If asked whether our current level of profitability is satisfactory, I
would have to answer no. One of the main reasons is that we areeasily affected by the external environment.
For example, in disaster prevention systems for municipalities,
investment in disaster prevention and mitigation tends to decline forsome time after a disaster has passed. While social infrastructure
as a whole is not in a growth phase due to population decline, it isimportant to steadily continue capturing demand for maintenanceand upgrades, but mass production cannot compensate for
profitability in the one-product-one-order business for government
offices. To reduce costs in systems businesses, we had to take awill focus on providing effective social infrastructure systems in thisgreat potential to expand systems including those for dam control,
for which we hold a 40% share in Japan, to emerging markets inSoutheast Asia and other regions. While we have provided ODA andother development assistance schemes in the past, the challenge
is to reduce costs with a focus on introducing and operating thesesystems through independent efforts in each country. Furthermore,
if we can promote the effectiveness of multi-use social infrastructure
systems for both disasters and peacetime, I believe this will lead togreater demand, so this is something we will consider and develop
going forward.

as an Environment and Energy Company ?

Human Resources
Ｑ

How do you view the human resources
who will drive this growth strategy?

equipment and the trial process prior to full-scale operations, andidentify and resolve issues. To change our organizational culture,

improve profitability by increasing efficiency in these processes.

the development of human resources able to promote solutionsoriented business is an important aspect of the overall Group
Our corporate culture is highly focused on problem-solving, but

individual optimization. In the future, we will consider a subscription-

we tend to solve problems based on technological strengths, whichbased business in which we both sell the system and charge forlimits our perspective on non-technical solutions. The challenge wesystem operation on an ongoing basis. We will also strengthen

face is to create something larger from a broader perspective.
In considering human resource development, while it is importantto nurture experts, there is a limit to how broadly one’s perspective
can be expanded through transfers within the company alone. I

investments and R&D?

In addition to 5G-related investments, AI and other technologies
that utilize digital data are essential for providing the solutions
business comprising the core of our growth strategy. We will invest
in these new communications technologies and data analysis
platforms based on our view that they are indispensable for growth.
With regard to R&D, as there are many areas, such as sensor
fusion, where complex sensing technologies, particularly radar, willdeveloping business that contributes to disaster prevention andmitigation in the face of increasingly severe natural disasters causedby climate change. Second, we contribute to the reduction of CO2
emissions during vessel navigation by collaborating with largecommercial ships that use our sensing technologies and IoT. With
vessels, the shortest and quickest routes do not necessarily leadto optimal fuel efficiency. We believe our Offshore solutions, which
select optimal routes based on fuel efficiency, can make a significant
contribution to emission reductions.

growth strategy.

the general-purpose parts of a system, which tends to be viewed as

What is your approach to growth

As an Environment and Energy Company , we believe we cancontribute through business from two aspects. First, we are

believe the first step in reforming our organizational culture is tocontinuously provide education focused on career development thatenables employees to maintain a constant awareness of their roles
within the overall direction of the Nisshinbo Group. In dialogues
with employees, I encourage employees to change the culture andnot be satisfied with the status quo.

Group Synergies
Ｑ

What are your thoughts about synergies
created within the Nisshinbo Group?

Wireless and Communications and Micro Devices fall underElectronics. In some cases, we have been building cooperative
systems for 30–40 years to create greater efficacy by confining thefunctionality of semiconductor chips, sensors and other devices
into a single small frame. The Group’s Chemicals business is alsoa major strength in terms of the parts and materials we require,allowing us to rethink functionality and performance from amaterials perspective.
The first step in realizing Group synergy is to maintain a constantawareness of Group-wide technologies and know-how as a meansof resolving issues. To this end, we will focus on developing humanresources who can fulfill their roles while being aware of theGroup’
s overall direction, then link this to the creation of value for
our Company and the Nisshinbo Group as a whole.

enable us to achieve what has not been possible in the past, we
will continue research that includes customization efforts.
Communications is an area where standardization prevails,
and there is little room for customization due to the necessityof interconnectivity. However, rather than using standardizing

Overview of Business Segmentsarea. Regarding developments in global markets, we feel there iswhat initiatives does Japan Radio promote

continue to monitor future trends in this critical area.

Sustainability

on sustainability. With investments being made in GX and DX, we

practical use, are an area that is rapidly advancing, and we will

to expand business with a solutions orientation that aims toＱ

Environment and Energy Company group,”

application of light and terahertz frequencies that are not yet in

We will visualize costs incurred in the installation of parts and

Growth Investments and R&D

Given the Nisshinbo Group business policy
of“realizing a super-smart society as an

New communications technologies, including technologies for theorganization for more than 100 years of manufacturing history

to“experiences.”Ｑ

the emergence of circuits able to pass light instead of electricity.

systems efficiency, while also introducing a new backbone system.

profitability itself by promoting business transformation from“things”

Contribution to the Environmental and Energy Field

Value Creation

work and society itself are undergoing substantial changes centeredfrequencies, which are higher than current frequencies, as well as

We must transcend the culture that has been ingrained in our

now possible to customize software while using hardware to coverAt the same time, in the Social solutions domain, the way people

the future, when 5G advances further to 6G, we will see terahertz

scalpel to the way we operate, including improving overall operating

Furthermore, with recent advances in software technology, it is

In October 2022, capital and business alliances were formed with AerosenseInc., a Japanese industrial drone manufacturer.
The aim is to build systems and create information provision services forwide-area surveying, facility inspections and disaster conditions monitoring.

solution with a view to developing it for small base stations. In

Profileinclude IoT systems in factories. We will fully demonstrate our core

Increasing Profitability

products as-is, this is an area where value can be increased withthe addition of slight innovations outside of standardization. For
example, mobile phone base stations provide service to surrounding

Data Section

smartphones, but transmitting data from smartphones requires
either the installation of optical cables or the use of different
radios with frequency bands other than those used for the service
frequency to relay data, but the cost of installing radio equipment
at all base stations would be enormous. In response, we have atechnical solution that divides the same frequency band into relay
and terminal services in a small private network and extends theservice area. We are expanding the range of applications for this20

Disclosed Notice Concerning the Acquisition of Shares of Hitachi Kokusai Electric Inc., on May 31, 2023.
For details, please refer to the news release.
https://www.nisshinbo.co.jp/nish/english/news/pdf/news_20230531_2.pdf

21

Key Business Growth Strategy: Micro Devices

products already advancing to the mass production stage. This
integration has increased the number of manufacturing plants tothree, two of which are engaged in front-end processes, and one inStrengths: Analog Technologies
Ｑback-end processes. Internal projects are underway to incorporate

regard to individual products and customers, we are promoting
cross-selling, including to overseas customers.
Of course, a little more time is required to fully integrate humanresources and other systems. That being said, we deepened
mutual understanding during the pre-integration preparatory phaseand share the same mindset regarding work and how to proceed,
which in my estimate, has led to a smooth integration process. As
the business environment continues to change at a rapid pace, it
We view integration as an opportunity to clarify the positive points
and challenges facing both sides and achieve significant changes.

Position in the Semiconductor Market

Satoru Taji

Director and Executive Managing Officer
Nisshinbo Holdings Inc.
President and Representative Director
Nisshinbo Micro Devices Inc.

Ｑ

integration of these two companies alone, was incorporated withamplify continuous, non-quantifiable physical information (analog

the addition of D-CLUE Technologies Co., Ltd., to the Group insignals) such as sound, light, temperature and human heartbeats,

February 2022. This company has strengths in DSP development

then convert them into digital signals that can be processed byincluding mixed signal LSIs and an integrated development systemcomputers, and conversely, they convert digital signals into analog

comprising modular printed circuit board design to software

signals. In this area, we are particularly strong in signal processing

development indispensable for the provision of solutions. Despite

ICs, including sensor ICs for which the market is expanding,our having previously specialized in single-function devices, withand power supply control ICs, where demands for lower power

the addition of D-CLUE Technologies, we can now substantiallyconsumption and other features are on the rise.

expand business opportunities as an analog solutions provider.

This integration has enabled us to cover the entire flowfrom sensors absorbing analog data in the real world (physicalspace), conversion of that data into digital data for processing
by computers, and computer-processed data fed back again

Market Share (Monetary basis in 2021)
Operational Ampliﬁers

What is your current position in thesemiconductor market and what is youroutlook for the future?
Within the semiconductor industry, analog semiconductors used

1.2%*

two or three U.S. and European companies with sales above

2.7%¥500 billion, and more than 20 companies with sales of ¥100

2.9%*

billion–¥200 billion. Targeting sales of ¥100 billion in 2025, we are

4.5%

in third place among Japanese companies and intend to further
boasting high market share.

Post-integration Progress
Ｑ

It has been more than a year since theJanuary 2022 launch of Nisshinbo Micro
Devices Inc. In the Integrated Report 2022,
you mentioned that you wanted to facilitate
the integration process—what progress has
been made?
and a variety of other areas, and synergies are being created.
Having established a new development flow incorporating thebest aspects of the different development flows and systems
maintained by the former New Japan Radio Co., Ltd., and Ricoh
Electronic Devices Co., Ltd., we have been able to achieve
development efficiencies and increase design quality, with some22

smartphones. We have a more than 20% share of the market for

5.7%
11.4%
4.1%
15.0%

7.4%

8.2%*

16.1%

24.7%

21.4%

7.7%

Nisshinbo
Micro Devices*Japanese manufacturers

9.0%

9.3%*

4.6%*
4.9%*

10.4%
5.2%

8.7%

9.9%
Nisshinbo
Micro Devices

Nisshinbo
Micro Devices

Source: Marketing Eye Co., Ltd.

mobile lithium-ion battery protection ICs.
In addition to semiconductors, we are Japan’s leading company
in microwave-related products, with a commanding 80% share in
the global market for magnetrons, a key component of shipboard
radar. We will further increase the number of competitive products
such as these and expand our business domain beyond vessels
to include satellite communications and highly sensitive motion
sensors.
Furthermore, one of our major advantages is the ability toobtain product feedback and industry trends from semiconductor
users within the Nisshinbo Group, including Japan Radio, Nisshinbo
Chemical and Nisshinbo Brake, and utilize this information invarious industry networks. In Japan, in particular, many customers
place great importance on support systems, with the support
capabilities we have cultivated in Japan constituting a major edge
on overseas competitors.

Ｑ

What is a typical analog solution thatcombines multiple functions?

to even more applications in telecommunications and otherindustries.
Another analog solution for which we received many inquiries

One example is the combined power supply IC for automotive

during the pandemic as a technology contributing to infection

CMOS image sensors announced in January 2022. One feature

countermeasures are touchless sensors facilitating the hands-freeof this product is its ability to suppress noise, which has aoperation of elevators, vending machines and other equipment.

greater impact on sensors with performance enhancements as

Optical technologies used in optical sensors facilitate operation

CMOS image sensors become more sophisticated, resulting in aeven when wearing rubber gloves, and we expect this solution willproduct solution combining conventional low power consumption

be used in a wide range of applications. We are already receiving

technologies with low noise technologies.

inquiries from dentists.

In May 2022, we announced a broadband low-noise amplifier

Furthermore, in terms of solutions incorporating MEMS

(LNA) that supports a wide range of frequencies for devices thattechnologies, we have developed devices used as ultra-compact

require highly accurate positioning information. With an expanded

microphones that are being shipped as new sound sensors for

product lineup that improves the positioning accuracy of GPS andlaptops, smartphones and smart speakers. Solutions using smallother applications by an order of magnitude or higher comparedmicrowave sensors are expanding to a wide range of industries

to conventional products, we expect this technology will spread

and applications as motion sensors used to open and close toilet

23

Data Section

Integration is progressing in development, production, sales

discharging lithium-ion batteries used in electric vehicles (EV) and23.2%

Overview of Business Segments

generation and combustion due to over-charging or over-

11.2%

7.1%

6.2%

Some of our strongest products include operational amplifiers,
protection ICs, which are indispensable for preventing heat

30.9%

1st in Japan
4th in the World

2nd in Japan
4th in the World

4.4%*

5.9%

increase our presence on the strength of numerous product lines

comparators, power supply controls and lithium-ion battery

First Year of the New Company:

16.1%

in a wide variety of IoT devices are a broad industry comprising

LDO

Comparators

2nd in Japan
5th in the World

Sustainability

Increasing Our Presence with
the Three SINKAs Aimed at
Becoming an Analog Solutions
Providerthe last aspect of analog solutions provision not facilitated by the

Analog semiconductors are a general term for semiconductors that

Value Creation

is important that companies and people also continue to change.

processing function referred to as digital signal processing (DSP),

Profilesales, as there was little overlap between the two companies withstrength. Furthermore, in providing analog solutions, the digitalstrengths in analog technologies?

mutual advantages that will lead to improvements at each plant,
and productivity and production quality are on the rise. In terms ofas analog data in physical space. This is a major technological

What are Nisshinbo Micro Devices’Key Business Growth Strategy: Micro Devices

services) with the aim of expanding our production capacity.

and sound an alarm. In 2022, we introduced a mounting line at

Through“evolution,”combining our strengths, we will increase thesubsidiary Nisshinbo Micro Devices AT Co., Ltd., to modularize thevalue we provide to customers, which will lead to higher sales andcombination of sensors and ICs, thereby enhancing our ability to

profit margins. Furthermore, to achieve“renewal”will require our

mass-produce small modules.

strengths in analog technologies, as well as digital technologies,

Human Resource Development
Ｑ

development policies and what specificinitiatives are underway?

processor technologies and the software technologies that drive
both. We must also listen more carefully to customer feedback

Growth Strategy in Light of 2025 Targets
Ｑ

and the problems customers face, strengthening our solutions
mindset and leading to the resolution of customer issues. ThereFor 2025, Nisshinbo Micro Devices is

are many skills required of us and many challenges to overcome,targeting sales of ¥100 billion and an

but above all, we must prioritize and strengthen signal processing
technologies, which include sensing and digital technologies. We

operating margin of 10%. What is yourwill incorporate the knowledge of D-CLUE Technologies Co., Ltd.,

strategy for achieving this growth?

while strengthening modular and software technologies as wellchanged since we first announced these targets in 2021, setting

as our ability to envision usage scenarios from the perspectives of
hardware and software.

Since we are a technology-oriented company, we arestrengthening the development of human resources with so-called
technical and specialized skills, as typified by R&D. For example,
we are considering the introduction of AI technologies as partof our technological development toward becoming an analog
solutions provider, which is one of our business strategies, that
includes both the improvement of technological development
capabilities as well as the internal promotion of DX. From theperspective of technological development, we expect AI to be
used as a tool for implementing AI in solution products anddeveloping new businesses, and from the perspective of theclearly defined numerical targets gives us an initial milestone
toward our goal of becoming a global top 20 company in theinternal promotion of DX, we expect AI to improve technologicalResearch and Development

analog semiconductor industry. At the same time, we want tomove up from our current ranking of third among JapaneseＱ

companies. My sense is that we are moving swiftly forward to

standards and productivity. To this end, we have incorporated an

What are your R&D policies regarding

the development of new products andachieve this goal.

services?

Our growth strategy is driven by the keywords“three SINKAs.”
The first SINKA is“deepening,”which represents efforts to push
our existing strengths even further and dig deeper. The second

An enhanced R&D structure is essential for the promotion of theachieving our 2025 targets in the shortest time possible. We willthen promote further growth through the third SINKA,“renewal,”
which represents our aim of transforming into an analog solutions
provider.

companies while proactively promoting new approaches to R&D.
In January 2023, we completed development of a 0.18-microndevice process and are prepared for mass production onminiaturization lines. We will link R&D enhancements to thecreation of new products.

To achieve“deepening,”in addition to utilizing our own

professions.
also for personnel in sales, marketing, quality assurance, humanresources and management positions to take on the challenge
of learning the specialized skills required in their respective
fields, we have established professional courses within our
Human Resources system to run parallel with promotion courses
for generalists. We will also further expand and enhance the
Human Resources Development Program launched in 2022 tofacilitate new business creation. In addition to human resource
development for new employees and management candidates,
we are creating development systems and programs that provide(companies specializing in front-end processes) and OSATs

ample development opportunities for mid-career employees,(companies specializing in back-end processes and testing

who are expected to grow the most, so that each employee cangain awareness and motivation leading to individual growth andRenewal3) Transform into an analog
solutions provider

Three SINKAs
Evolution

24

Contributions to the Environmental andEnergy Field
Ｑ

How does Nisshinbo Micro Devices

contribute as a member of an Environment

and Energy Company group?
“Low power consumption”and“high efficiency”technologies areboth our strength and our product catchphrase. Almost all our

Combining the strengths shown below around sensors, which
will grow in the future, we will develop sensor AFEs and otherbusinesses mainly for automotive and industrial equipment.

environmental impacts. We will continue to strengthen thisThe strengths of both companies (low consumption, low noise, high precision)
will be further strengthened and widely deployed as a base business in the
consumer, industrial and in-vehicle markets.

Group Synergies
Ｑ

In what ways do you create synergies with
the Nisshinbo Group?

The Nisshinbo Group comprises a diverse range of companies.
Synergies are easily created between our business and Nisshinbo
companies involved in semiconductors and electronics, such as
Japan Radio, Nisshinbo Chemical, Nisshinbo Mechatronics andNisshinbo Brake.
In the area of“sound,”which is one of our strengths, weare engaged in high-precision, high-quality sound operational
amplifiers for audio equipment under the MUSES brand, andwe are also taking on the challenge of creating various new
businesses focused on sound in conjunction with other Group
companies. For example, wouldn’t it be helpful to have predictive
maintenance systems that use sound to rapidly detect cracks intunnels or abnormalities in motors and other equipment? Could
we use sound to detect brake pad wear? Or is it possible to use
sound for the detection of defective products inside factories?
In asking such questions, various ideas are emerging from Group
company networks and knowledge, expanding the areas in which
we can utilize our technologies.
In the healthcare domain, we have begun to develop a new
type of stethoscope business with Ueda Japan Radio Co., Ltd. We
are developing a“super stethoscope”that uses sound processing
to remove the sounds of crying so infant heartbeats can be heard.
In the telemedicine domain, we are engaged in the developmentof a solution combining AI and wireless technologies to create astethoscope equipped with vital sign sensors that, in addition toheartbeats, enables doctors to ascertain blood pressure and other
patient information. In addition, we are working with Nisshinbo2) Develop the signal processing business

1) Strengthen the standard products businessthe Group’s medium-term environmental targets for fiscal 2030.

Textile to jointly develop a new business venture comprisingthroat microphones that use bone conduction to facilitateclear conversations on construction sites and in other noisy
environments.
We will build on our achievements in analog solutions
comprising the core of our“renewal”efforts through synergies
with Nisshinbo Group companies, while further collaboratingwith companies outside the Group to create new businesses andcontribute to the Group as a whole.

products contribute to improved energy efficiency and reduced

Data Section

Deepening・Deploy sensing devices (modules).
・Incorporate control logic (DSP, microcontrollers), shortdistance communications and other technologies
to further increase the value provided tocustomers from the perspectives of
hardware and software.

organizational development.

domestic plants and accelerate decarbonization efforts to achieve

Overview of Business Segments

production lines, we will tap external partners such as foundries

consumption. In the future, we will expand similar initiatives to

Sustainability

dialogues with external educational institutions and venture

strengths and create new things. Both of these are aimed atskills that includes both developers and members of various other
Furthermore, to make it easier not only for developers but

three SINKAs. In addition to conventional R&D, we will deepen

SINKA is“evolution,”which represents efforts to combine our

educational program for the development of personnel with AI

equivalent to approximately 8% of the plant’s annual electricity

Value Creation

Although some assumptions, such as exchange rates, have now

What are your human resource

manufacturing plant building in Thailand, generating electricity

Profileseats, as well as high-precision sensors that detect sleep apnea

concept in an attempt to improve the global environment throughthe use of our products.
In terms of corporate activities, since 2022 we have participatedin a TCFD-compliant project aimed at achieving carbon neutrality
by 2050, which is the stated goal of the Nisshinbo Group. In
fiscal 2022, the first year of this project, we installed solar panels
covering an area of approximately 7,300 m2 on the roof of our25

Nisshinbo Group DX Initiatives: Digital Business Department Business Creation

the framework of existing businesses, they leaned heavily
toward our core business of manufacturing, creating abarrier to the establishment of service businesses.
In the Digital Business Department, DX means creating
Profilecompletely new services and value using digital technologies.
We position IoT, AI, and other digital technologies as ameans for creating services and value.

Ｑ

What is the Digital Business Department’ssphere of activity?

Ｑ

the Digital Business Department is

The Digital Business Department is an organization

position an organization separately from the main business,

Digital Is Only a Means toan EndLeading to the Creation of New
Business by Empathizing with
Customers Facing Challenges

General Manager of Digital Business Department

Group technologies. We must focus on specific targets andconsider what needs to be created. The important aspect isthe objective, and we are moving forward by focusing on a
few themes from the perspectives of what we can achieve
and what kind of technologies we can utilize to achieve
those objectives.
Some of these themes include marine, drones, disasterprevention, healthcare and 5G-related concepts. In thethree years since the Digital Business Department wasestablished in 2020, we have repeatedly conducteddemonstration experiments for the commercialization ofvarious themes, which are then revised on the basis of theinsights and knowledge gained from these experiments. I

What is the Nisshinbo Group’s approachto DX?

Some associate DX with internal efforts to improve
operational efficiency and productivity through digitalization,
but in the Nisshinbo Group, each Group company engages
in individualized digitalization efforts.
Rather than focusing on internal efforts, the Digital
Business Department was established to utilize digitaltechnologies to create completely new services and value
for society. JRC, Nisshinbo Micro Devices and other Group
companies possess a wide range of digital technologies
that are used in a variety of industries. The Digital Business
Department is tasked with the Group-wide integration ofbusinesses that resolve social issues, from the planningstages to marketing, customer proposals and sales.
Before the department was established in 2020, there
were, of course, efforts to bring together technologies anddata held by Group companies in an attempt to createsynergies. However, because these efforts were made within

26

knowledge gained from past efforts and rethinking concepts
from a slightly broader perspective.
At present, there are 11 of us in the Digital Business
Department, many of whom, including myself, are engineers.
In creating new business, the ability to conduct sales on
your own is more important than utilizing new technologies
or planning new businesses. We cannot make advances inthe digital business until we are face-to-face with customers,
identifying the issues confronting them and proposing

prevent collisions and accidents at sea. JRC’s JM-Watcher II
was taken over and gradually improved by our department
to acquire wind direction and speed data in real time whiledisplaying the position information of surrounding vessels

business, which enables me to make proposals that will

to startup companies. As I mentioned earlier, DX anddigital are only means to an end for us. We want to rapidly
increase the number of Group human resources who know
how to create and structure businesses that are in step withthe times in a rapidly changing society.

report. JM-Watcher II was upgraded to JM-Safety, with thetotal number of downloads surpassing 30,000. In April 2023,
MariPro, which manages the safety of workers on offshoresites, was released for marine civil contractor construction

Ｑ

What are the future prospects for the
Digital Business Department?

supervisors, and the overboard fall detection app for

We want to create new businesses in any way we can so

detecting overboard falls, one of JM-Safety’s functions, wasthat the ideas and businesses that emerge from the Digital

released for use by everyone who enjoys marine leisureBusiness Department will be a step forward to the next

activities. In addition, utilizing JRC technologies, we havegeneration of business in each Group company. To thisexpanded services from B2B to B2C, and in the B2B area

end, we must first be able to create new digital businesses

in particular, we will expand our target from large andunique to our department that are not influenced by current

commercial vessels to small- to medium-sized vessels,

business activities, exemplifying innovation for Group

including the development of an app for managing small-companies. Beyond that, if a business can be nurtured

to medium-sized vessels, as we attempt to increase Groupto a certain scale and is expected to grow into a larger

recognition substantially in the world of maritime safety. In

commercial endeavor, we will consider returning thatthese new projects, our department handles the planningbusiness to an operating company within the Group.

and development, with development itself entrusted to JRC

For the past three years, we have been looking outward

and JRC Engineering, while the operation, marketing andto create new digital businesses. Viewing the Group fromsales are handled by the Digital Business Department.

this perspective, we realize that digital applications anddigital data that were taken for granted within Nisshinbo
do in fact have the potential to be transformed into new

visits to customers, and by observing their overall business,
their business can be made more efficient through the digitallearning opportunities that include sending human resources

and providing earthquake and tsunami information in a flash

solutions to customer concerns. I personally make frequent
I can consider the issues they face and which aspects ofMore than learning about digital technologies, in our
department the key is to create business, so we also provide

Ｑ

How will the Nisshinbo Group develop andretain human resources with digital skills?

satisfy customers. The first step in creating new value andWhile each Group company is responsible for developing

services is to empathize with customers facing challenges.

the digital skills of its own human resources, the Digital
Business Department collaborates with Group companies

value. We will continue boldly taking on the challenge ofbringing about global innovations by making know-how andknowledge internally accumulated by Nisshinbo available toother companies without leaking core technologies outside
the Company, as well as by opening up core technologies
and creating synergies with other companies.

by participating in their human resource training sessions
through lectures and presentations. In asking questions suchas“What is DX?”and“Why is DX necessary?”and showing

27

Data Section

digital technologies aimed at launching new digital service

and am engaged in the creation of new value, drawing on

since March 2021. This system was originally developed toindividuals to think.

Overview of Business Segments

Ｑ

assumed the position of general manager in January 2023,

Safety ocean safety protection service smartphone app

discussing technology, we facilitate opportunities for

Sustainability

Yuji Kinoshita

as synergies are not magically created simply by integrating

In the marine-related field, we have deployed the JM-

examples of how new perspectives can create value when

Value Creation

engaged in?

positioned directly under the Chief of the Corporate Strategy
Center. To create something new, it is very meaningful to

What are some of the specific initiatives

Sustainability ̶ ESG Initiatives

institutions of contributing to society through business activities. We are placing ESG at the heart of ourthoughts on corporate management and proactively pursuing ESG initiatives.

Process of Determining Materiality
In February 2015, we identified material issues for the Group in order to clarify issues that required
action to achieve sustainable growth for the Nisshinbo Group’s business together with society.
3. Deliberate and approve at the
Corporate Strategy ConferenceFirst, we identified social issues,

During Group CSR Council

The Corporate Strategy Conference,referring to ISO26000, the fourth

deliberations, we prioritized thechaired by the president ofedition of the GRI Guidelines,

social issues we had identified

Nisshinbo Holdings and comprising

the 10 principles of the UN

from the perspective of their

all managing officers, deliberated the

Global Compact and other social

importance to stakeholders andissues’materiality. After considering

norms. We then evaluated their

their importance to the Nisshinbo

the importance of these social issues

relationship to the Group’sGroup, coming up with a draft

and their relationship to the Group’sbusinesses and identified 22 social

proposal.

businesses, we determined the threeissues for consideration.

material issues indicated below.

Contribution to the
Climateenvironmental
changeand energy
field

Creation ofa safe andsecuresociety

Relationship between Materiality and Global Guidelines

S Social Initiatives

G Corporate Governance

ISO26000

Contribution to theenvironmental and energy
field

Environment

Creation of a safe andsecure society

Human Rights
Labor Practices
Consumer Issues
Community Involvement
and Development
Organizational
GovernanceFair Operating Practices

Global compliance

9. Industry, innovation and infrastructure
Build resilient infrastructure, promote
inclusive and sustainable industrialization,and foster innovation

12. Responsible consumption
and production
Ensure sustainableconsumption and production
patterns

13. Climate action
Take urgent action tocombat climate change
and its impacts

Responses to Opportunities:• Expand EV-related product development andmanufacturing• Capture demand for energy-saving products(e.g., semiconductors, electronic device–related products)• Develop and manufacture millimeter-wave radar waterlevel gauges and capture demand for anti-corrosion
products and services

Human
resources

Occupational
injuries• Occupational injuries due to －lack of education and training• Loss of stakeholder trust
caused by occupational
injuries and accidents－

Quality• Loss of trust, claims fordamages or product recalls
due to quality issues ordefects with products orservices• Use the risk management system to minimize risk
probability and potential impact• Establish a quality assurance team at HD to oversee
quality assurance and product safety activities at Group
companies• Management issues due togreater business diversity• Large number of duplicate
functions among Groupbusinesses• Harness the Group’sdiverse strengths by
integrating businesses/organizations to drive
innovation and increase
resilience to changes in theoperating environment• Reform the business portfolio to align with changes inissues faced by society; improve cash flow
• Improve efficiency by overhauling Group-wideorganizations and outsourcing• Maintain Group integration by consolidating theoversight of Group company management at HD andestablishing financial discipline• Increasing complacency ingovernance• Take risks based on abalance between proactive
and defensive governance• Build on pioneering steps such as the introduction of
the outside director system in 2006, the adoption of theHD system in 2009 and the termination of the advisor/
consultant system in 2017; establish an advanced
governance system that balances managementtransparency with bold risk-taking• Loss of trust and damage
to corporate value causedby legal violations suchas corruption or anticompetitive practices, orby corporate behavior thatdiverges from social norms－• Employ messaging from the president of HD tounderscore the importance of fair business practices• Provide continuous compliance training• Impose severe penalties for misconduct• Appoint outside directors with legal background

Compliance

Fraud/Illegal
conduct

Information
security• Promote the overlap
between the Corporate
Philosophy and the growinginterest in ESG among
younger people, leading tomore hiring opportunities• Develop human rights policies, introduce and promote
human rights due diligence in areas where human rights
risks are high• Establish a human rights group at HD to maintain andraise awareness across the Group• Implement strategic PR activities to improve thecorporate visibility and image• Expand mid-career employment• Retain human resources through career support and aninternal recruitment system• Develop human resources through the establishment ofa training system and expanded e-learning menu items• Conduct risk assessment• Conduct education and training, share accident casestudies across the Group• Financial window-dressing,－accounting irregularities, etc.

• Use the internal control system and the corporate
ethics reporting system to prevent misconduct• Employ regular rotation to prevent misconduct－• Unauthorized disclosureof personal information,customer information ortrade secrets• Adverse impacts on businessin the event of unauthorizedaccess, tampering, data
destruction or loss, leakage
or other damage caused bycyberattacks, etc.

• Conduct continuous training and annual internal audits
to assess information security• Conduct cybersecurity measures and implement
requisite countermeasures while ensuring multi-levelprotection

Data Section

Ensure availability andsustainable management ofwater and sanitation for all

Responses to Risks:• Avoid carbon taxation by reducing greenhouse gas emissions
and energy conservation, and reduce energy costs• Prevent and mitigate property damage and loss ofbusiness caused by flooding• Human resource shortagedue to labor force
contraction• Low motivation and lossof human resources due
to mismatched work
assignments, etc.

SDGs with Close Links to the Nisshinbo Group’s Businesses
6. Clean water and sanitation• Conduct climate change scenario analyses according to
the Task Force on Climate-related Financial Disclosures(TCFD) recommendations

Human rights
issuesBusinessmanagement

Globalcompliance• Growing demand for EVs,
• Increase in raw material
new energy vehicles, smart
procurement costs andmobility and fuel cell–manufacturing costs due torelated products
carbon taxation• Increase in energy costs due • Higher sales of energysaving semiconductors andto requests from customers
electronic device–related
to reduce greenhouse gas
productsemissions• Growing demand for• Increase in costs due todisaster prevention
property damage and loss of
products and services
business caused by flooding
driven by heightened
flood risk

Responses to risks and opportunities• Loss of stakeholder trust and －operational continuity caused
by inadequate consideration
for human rights• Work environment
deterioration caused byharassment and otherhuman right issues

Groupmanagement

G: Corporate Governance

E Environmental Initiatives

SDGs

Opportunities

For risks related to business, please see pages 23–25 of the 180th Securities Report.

28

Overview of Business Segments

Materiality

Risks

Sustainability

2. Prioritize social issues

Major risks andopportunities

Value Creation

1. Identify social issues forconsideration

Materiality

ProfilePeople,”the Nisshinbo Group has since its founding inherited the basic spirit of corporate public

ESG

E: Environmental Initiatives

With its corporate philosophy“Change and Challenge! For the creation of the future of Earth andMateriality and Related Major Risks, Opportunities and Responses

S: Social Initiatives

ESG Initiatives — Materiality, Risks and Opportunities

29

Sustainability ̶ Human Capital, Safety and Quality

Human Capital, Safety and Quality
Basic Concept
more worker-friendly environment by respecting the character and individuality of each employee and placing the right people in the rightjobs. To this end, we respect diversity in all respects, including human rights and hiring, and promote a work-life balance. Nisshinbo also
engages in safety and health activities with the goal of eliminating occupational injuries, and promotes quality assurance activities to improvecustomer satisfaction.

Work-style Reforms

The Nisshinbo Group promotes diversity and inclusion (D&I) activities

The Nisshinbo Group views diversity as its source of innovation

aimed at“cultivating an organizational culture that empowers

and strives to enhance corporate value by leveraging strengths in

employees to speak freely without hesitation and take action.”To

its diversity of business, people and values. Accordingly, we arepromote D&I, we formulated the following targets and KPIs, andpromoting work-style reforms to respect diversity and leverage theare taking measures to spread awareness of D&I throughout theindividuality and capabilities of all employees without interferingGroup, ensure human resource diversity and promote the activein their ability to balance work with child and nursing care, as

participation of diverse human resources.

well as to improve productivity, leading to a sense of fulfillment

・ Disseminate top management messages and implement
measures contributing to the success of diverse human resources
・ Women among overall hires

Respect for Human Rights
The Nisshinbo Group respects the character and individuality of allactivities and initiatives related to business and human rights
with the aim of deepening understanding of diversity and various
human rights issues to prevent all discrimination and human rights
violations. We have established the following KPIs as targets forthese initiatives and are promoting activities accordingly.
・ (Japan) Group human rights training: 100%
(Overseas) Human rights education and training
・ Formulate human rights policy, introduce and promote humanrights due diligence in areas with high human rights risks

harassment and improving communication was conducted for all
employees in Japan based on the results of an employee survey
implemented as part of our overall training.
Furthermore, human rights training was conducted for new
employees as well as mid-career hires throughout the year toenhance understanding with regard to respect for human rights as
the shared intent of the Group.
To fulfill our“corporate responsibility to respect human rights”
adopted by the United Nations, we established the Human Rights
Policy in 2023 and are working toward the implementation ofhuman rights due diligence.
In addition, the“Nisshinbo Group Sustainable Procurement
Basic Policy”and“Sustainable Procurement Guidelines”usedby Group companies clearly indicate our consideration for basic
human rights and the prohibition of child labor, as well as thoroughrespect for human rights throughout the supply chain.

Human Resource Acquisition andDevelopment
The Nisshinbo Group is working to acquire and develop humanthe“business is people”human resources policy and Nisshinbo
Group Human Resources Strategy. Specifically, this entails thedevelopment of management candidates necessary for businesspromotion and stronger efforts to recruit mid-career employees torectify the employee age imbalance.
We have established the following KPIs as targets for these
initiatives and are promoting activities accordingly.

30

In fiscal 2022, training to develop a management mindset;
selective external training to foster managerial knowledge,
approaches and behaviors; and practical workshops to acquirebusiness creation and breakthrough capabilities were provided to		Technical positions:20%

・ Mid-career hires among management:

11%(end of fiscal 2024 target)

Note: Targeting mid-career hires equal to the ratio of mid-career hires among all
full-time employees by 2030.

・ Female manager ratio (end of fiscal 2024 target):6%Note: Aiming to achieve a ratio equivalent to the ratio of female employees
among all full-time employees by 2030.

・ Participation in psychological safety training:

100%

employees in division head or higher positions.
To ensure diversity, Nisshinbo has made specific efforts
to proactively recruit female and non-Japanese employees,
implementing various measures, including a human resource
system facilitating rapid promotion regardless of length of
employment, to attract talented mid-career hires and promote
their active participation. Furthermore, as measures to prevent
young employees from leaving the Company, roundtablediscussions led by senior employees are held with prospective
hires from the initial job offer stage, and human resource managers
conduct follow-up interviews and questionnaires for new hires
during their first three years of employment to promptly detect any
changes and take appropriate measures to help new employees
adjust smoothly to life at Nisshinbo.

Engagement
Valuing its relationship with employees, the Nisshinbo Group is

We have established the following KPI as a target for these

Supporting the Active Participation of
People with Disabilities
Aiming for a work environment where everyone, regardless of
disabilities, respects diversity and can work with enthusiasm, theNisshinbo Group targets a 100% employment rate of persons
with disabilities (ratio of achieving companies) at domestic Group
companies with 43.5 or more employees.
In fiscal 2022, all Group companies in Japan achieved thetargeted employment ratio of people with disabilities.
At Nanbu Plastics Co., Ltd., three employees with disabilities aredemonstrating their capabilities via telework through the Telework
Office Fujieda Ekimae (Shizuoka Prefecture), which has staff that
help monitor their physical condition. Monitoring these employees
ensures their psychological safety and enables them to engage inwork with peace of mind.

Empowering Women

initiatives and are promoting activities accordingly.

Based on the Act on Promotion of Women’s Participation and・ Continue implementing the global survey

formulated the following“General Action Plans”to ensure that

In fiscal 2022, we conducted the first global survey that
included overseas regions. There were 15,680 respondents
and the response rate was 96%, extremely high for a global
survey. Based on the results, we are formulating action plans andconducting activities from the perspectives of assigned company,
workplace and work conditions.

We have established the following KPIs as targets for these
initiatives and are promoting activities accordingly.
・ Annual paid leave utilization:

More than 70%

・ Male employees utilizing childcare leaveamong all male employees:

More than 30%

To provide workplace flexibility, the Nisshinbo Group instituted
teleworking in 2021 and has opened satellite offices. In termsof working hour flexibility, we established staggered start times,
flextime, hourly paid leave and shorter workdays. Furthermore, we
formulated the“General Business Owner Action Plan”to support

working on“engagement”as a key action item to build good
relationships with employees.

comfortably.

Advancement in the Workplace, Nisshinbo Holdings Inc. hasdiverse human resources, including women, can work energeticallyand maximize their abilities. Similar measures are being
implemented by 18 Group companies in Japan.

General Action Plans(Planning period: January 1, 2022, to March 31, 2026)

Goal 1: The proportion of females in the total number of clericalprofessionals is to be more than 50%.
Goal 2: The number of women in supervisory roles will be morethan twice as many as that in fiscal 2021.
Goal 3: Take at least 70% of annual paid leave.

an environment enabling men to easily utilize childcare leave.

The“Tomonin”logo.
This logo is used to promote work environments where
employees can balance work and nursing care.

Safety and Health Activities
The Nisshinbo Group shares the Business Conduct Guidelines“Safety Is the Basis for Everything”with all employees and promotes
health and safety activities with the aim of maintaining andimproving safe and supportive working environments at all businesssites within and outside Japan.
We have established the following KPI as a target for these
initiatives and are promoting activities accordingly.
・ Major workplace accidents: 0 incidents
In fiscal 2022, to maintain zero workplace accidents, we
continued to assess risks associated with work, equipment andchemical substances. To enhance preventive safety efforts, we
provided regular education on the hazards and toxicity of chemical
substances, and complied with the use of appropriate personal
protective equipment to avoid accidents caused by contact withhazardous substances. To improve risk sensitivity among workers
with limited experience, we continued to implement danger
awareness training and other workplace safety activities.
In addition to training conducted at each business office for newhires and employees changing work content, we strive to increasesafety awareness among all employees through skill-enhancing
education for safety and health workers, danger awareness training,
5S activities (sort, set in order, shine, standardize and sustain) andsmall group activities that include danger experience education.

31

Data Section

resources with a focus on future business developments based on

employee age imbalance

50%

a workplace environment in which all employees can work

Overview of Business Segments

as stated in the“Guiding Principles on Business and Human Rights”(executive officers or above) in the future leader program・ Strengthen efforts to recruit mid-career employees to rectify the

New graduates: Clerical positions:to strong competitiveness. Specifically, we are working to create

Sustainability

In fiscal 2022, training with content aimed at preventing power

・Increase the participation rate of senior management posts

50%

in work, and continued active participation, which in turn leads

Value Creation

its employees and promotes training and other awareness-raising

Mid-career: Managers:		

ProfileEach and every employee’s ability is key for companies to contribute sustainably to a diverse and global society. We aim to create a

Promotion Activities for Diversity & Inclusion

Sustainability ̶ Human Capital, Safety and Quality

Sustainability ̶ Contribution to the Environmental and Energy Field

Occupational Injuries
In fiscal 2022, there were no instances of major workplace

three key areas ー personal health, organizational health and safety

accidents (accidents with level seven or higher injuries). The

awareness ー to ensure all employees are fully aware of their safety

frequency of occupational injuries with lost workdays* for the

obligations.

2021. Nevertheless, this compares favorably with the Japanesemanufacturing sector.
*Frequency of injuries with lost workdays = number of employees injured withlost work ÷ aggregate number of working hours × 1 million

Nisshinbo Group (Japan)
Average for Japanese manufacturing industry

1.2

More than 85%
100%

In fiscal 2022, to promote individual health, we made efforts toexercise habits and increase the percentage of people who getcreated a health management report based on employment

18.12

19.12

20.12

21.12

22.12

guidelines and health check items under the Industrial Safety

The Nisshinbo Group conducts regular occupational health

Outstanding Organization 2023: Large Enterprise Category, as well
as a Health & Productivity Management Outstanding Organization
2023: Small and Medium-Sized Enterprise Category.

Inc., labor unions, safety and health management staff representing
sites audit the status of health and safety management in eachbusiness. In fiscal 2022, we conducted audits at 46 manufacturing
sites in Japan and two manufacturing sites overseas. In responseto the spread of COVID-19 infections, onsite audits wereconducted after implementing infection control measures in Japan,
while online document audits were conducted overseas.
At the end of each fiscal year, the results of all audits and checks
analyze potential risks and communicate good practices to thewhole Group as part of workplace health and safety activities in thefollowing fiscal year.

The Nisshinbo Group’s Health Management Policy states that
the
“Nisshinbo Group, through the establishment of an environment
where each individual member can play an active role by promoting
employee health and sound workplace, aims to be a corporate

Medium-Term Environmental Target (to fiscal 2030)
Primary targets

Provide sustainable solutions
Increase ratio of products that
contribute to a sustainable society

Global warming countermeasures
Reduce greenhouse gas emissions

70％ or more of total salesbyContribute to the realizationof a recycling society
Improve the recycling ratio

50％ or more comparedto fiscal 2014

to95％ or more

Water resource
countermeasures
Reduce water usage per unitof salesby

70％ or more comparedto fiscal 2014

Increasing Quality and Customer
Satisfaction
To provide products and services that satisfy customers, Nisshinbo
Group manufacturing and quality assurance divisions in eachbusiness promote activities to improve the quality and customer
satisfaction demanded of each product.
We have established the following KPIs as targets for these
initiatives and are promoting activities accordingly.
・ Product liability law violations: 0 incidents
・ Ascertain and share the status of quality complaints from eachsegment
In fiscal 2022, there were no product liability (PL) law violations

Health Management

Aim to be Carbon Neutralin the Nisshinbo Group. As the determination of claims andcomplaints varies by industry and type of business, we confirm thestatus of each Nisshinbo Group company annually. No companies
have seen continuous increases in the number of complaints overthe last three years. Complaints are trending downward at all Group
companies.

group that is indispensable, at any time, for our society.”To
promote health management efforts across the Group, Nisshinbo
established the Group Health Management Department Meeting,from each Group company and is tasked with coordinating theGroup’s activities. Specifically, the meeting focuses on activities in

Key action items

The 5th Three-Year Environmental Targets

Fiscal 2022 results

Improvement of the sales percentage by the
products that contribute to the development of
the sustainable society

60% or more of total sales

55% of total sales

Reduction of greenhouse gas emissions*1

Reduce by 35% or more compared tofiscal 2014

Reduced 36% compared to fiscal 2014

Reinforcement of the maintenance of biodiversity

Activities in Japan and abroad At morethan 5 new sites

Ongoing activities at two new sites*2

Reduction of water usage per unit of sales

Reduce by 65% or more compared tofiscal 2014

Reduced 78% compared to fiscal 2014

Promote Life Cycle Assessment (LCA)*3

60% or more of total sales

64% of total sales

Reduction of the energy consumption per unit of Reduce by 15% or more compared tosales
fiscal 2014

Reduced 19% compared to fiscal 2014

Reduction of the volume of PRTR*4 substances
emissions per unit of sales

Reduce by 30% or more compared tofiscal 2014

Reduced 42% compared to fiscal 2014

Improvement of recycling rate

Increase the recycling rate to 90% or
more

84% recycling rate

*1 Please refer to Nisshinbo’s Sustainability website for details regarding emissions calculation methodologies.
*2 FY2022 activities started: Japan Radio Co., Ltd. (Japan), and Nisshinbo Micro Devices AT Co., Ltd. (Japan).
*3 Life cycle assessment (LCA): Understanding of environmental load, through the life cycle of a product, from raw materials to production, use and finally to disposal.
*4 PRTR substances: Substances subject to the Pollutant Release and Transfer Register (PRTR) system pursuant to the“Act on the Confirmation, etc., of Release
Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof”for which reports of their amounts ofrelease and transfer must be filed.

For more information, please see the Sustainability section of the Nisshinbo Group website.
https://www.nisshinbo.co.jp/english/sustainability/

32

33

Data Section

which is attended by health management department leaders

The 5th Three-Year Environmental Targets (FY2022–2024)

Overview of Business Segments

are compiled in a comprehensive audit report, which is used toLong-Term Environmental Target (to fiscal 2050)

Sustainability

each business, and health and safety officers from other businesssafer and more secure for people everywhere.

toand safety audits of its manufacturing sites. A monitoring teamcomprising the Health & Safety Group from Nisshinbo Holdings

greatest issues faced by humanity today, such as environmental destruction and natural disasters caused by climate change, to make lifeand Health Act. Continuing on from fiscal 2021 and fiscal 2022,
Nisshinbo was certified as a Health & Productivity Management

Health and Safety Audits

help protect the environment, save energy and create alternative sources of energy, while also providing solutions that address some of theValue Creation

checks, and to reliably meet safety consideration obligations,0.3

act on environmental activities. As an Environment and Energy Company group, we will continue to offer new products and systems that

reduce the smoking rate, increase the percentage of people withhealth, we reduced the average overall health risk value of stress

0.6

The Nisshinbo Group is aiming to increase corporate value as a more united corporate group by realizing its Corporate Philosophy —Impact”as the Group’s Business Conduct Guidelines, we have a deep understanding of environmental behavior and actively engage in and・ Employees receiving full medical examinations
after periodic health checkups:

Basic Concept“Change and Challenge! For the creation of the future of Earth and People.”With“Awareness and Concern toward Our Environmental

sufficient rest through sleep. In terms of promoting organizational

0.9

0.0

initiatives and are promoting activities accordingly.

・ High-risk individuals receiving health guidance:

Frequency of Injuries with Lost Workdays
1.5

We have established the following KPIs as targets for these

Profileoverall Group in Japan was 0.25, increasing from 0.16 in fiscal

Contribution to the Environmental and Energy Field

Sustainability ̶ Contribution to the Environmental and Energy Field

Sustainability ̶ Reports Based on the TCFD Recommendations

Reports Based on the TCFD Recommendations
The Nisshinbo Group’s Greenhouse Gas Emissions Reduction Targets

Target for 2024
(The 5th Three-Year
Environmental Target)
Reduce greenhouse gas
emissions by 35% or morecompared to fiscal 2014

Aim to be
Carbon Neutral
FY2050

Improved Sales Percentage of Products
Contributing to the Development of a
Sustainable Society

Sales of Products Contributing to theDevelopment of a Sustainable Society

Greenhouse Gas Emissions Trends（Thousand t-CO2e）

567

500

▲23％
438

Total sales

200

2021

Fourth phase

2022
Fifth
phase

*1 Refers to“Corporate Governance Structure”on page 42, Corporate
Governance.

6%

Nisshinbo significantly reduced it use of coal, conductedenergy conservation activities, switched to green
electricity from purchased electricity, installed additional
perfluorocarbons (PFCs) and gas abatement equipment in

we anticipate will be significantly affected by risks and opportunities, including the Solutions business within the Wireless and Communications
business and the Automobile Brakes and Chemicals businesses. In fiscal 2022, the Group completed an analysis of its major businesses withproduction activities by targeting the Marine Systems, ICT

Covers 90% of

The Nisshinbo Group total Group sales

Analysis

Fiscal 2021

Solutions business in Wireless
and Communications

Steps of Climate Scenario
AnalysisAutomobile Brakes

1 Assess materiality ofclimate-related risks

Chemicals

2 Identify and define rangeof scenarios

Fiscal 2022

one based on a world in which warming continues (warming

Wireless and Communications
business: Marine Systems, ICT and
Mechatronics, and Mobility businesses

progression scenario: 2.5℃–4℃ scenario) and the other a

Micro Devices

world in which warming is curtailed and a positive shift is

Precision Instruments

under way (decarbonization scenario: 1.5℃–2℃ scenario).

Textiles

3 Evaluate business impacts
4 Identify potential
responses

1. Assess materiality of climate-related risks

the potential to arise in the medium to long term, risks and opportunities were qualitatively evaluated as“large,”“medium”or“small”on shortterm as well as medium- to long-term timelines leading up to 2050. Accordingly, the following table indicates significant risks and opportunities

23%

Dam management systems
Wireless and Communications2%

Non-iron shirts
Textiles2%

Frictionmaterials
and otherproducts
compliantwithantimony
regulations
Automobile
BrakesSales of the products that contribute to the development of asustainable society are growing steadily, accounting for 55% of theassociated with business continuity and the creation of new businesses.
：Wireless and Communications：Micro Devices：Automobile Brakes

Assessment Item
Risk type
Risks
Major
Subcategories
categories
Transition Policy and Carbon
・Increase in raw material procurement and
risks
Legal
price
manufacturing costs due to carbon taxation
Market and Energy mix ・Rising/Falling energy costs due to fluctuations
Technology
in city gas, crude oil and electricity prices
ShiftsCustomer/ ・Rising costs in line with response to GHG reduction requests
from suppliers
marketchangesGroup’s FY2022 sales.

For more information, please see the Sustainability section of the Nisshinbo Group website.
https://www.nisshinbo.co.jp/english/sustainability/

Spread of・Decrease in demand for ICE vehicle parts due to the spread
low-carbon
and expansion of EVs
and energy
savingtechnologies：Precision Instruments：Chemicals：Textiles

Opportunities
・Future operating cost decreases by switching to
renewable energy
―・Increase in demand for related products in line with higher
demand for marine transportation resulting from modal shift
・Increase in sales of brake friction materials due tochange in demand for automobiles
・Increase in sales of insulation materials due to the spreadof ZEB/ZEH
・Increase in sales of cross-linking agents due to risingdemand for cold-drying paints
・Expansion of market for CFRP-related products
contributing to low carbon efforts
・Sales growth of products for environmentally oriented
apparel and environmentally friendly industrial materials
・Increase in demand for EVs, new energy vehicles,
smart mobility and fuel cell–related products
・Sales growth of energy-saving GaN power
semiconductors and electronic device–related
products
・Increase in demand for related products due toexpansion of new offshore wind power generation

Data Section

line with capital investment, and expanded solar power

As the Nisshinbo Group is engaged in a wide range of businesses, we conducted climate change scenario analyses in fiscal 2021 targeting businesses

As the first step in the scenario-analysis, the Nisshinbo Group identified the material risks and opportunities for each of the targeted businesses

Other
contributing
products

measures implemented in each segment.

Main Factors

Overview

using the TCFD final report and relevant external literature on the industry and other relevant topics. As the impacts of climate change havesubstantial 23% reduction from fiscal 2021 due to climate change

34

targets and progress toward their resolution.

increase resilience against future risks. Furthermore, in June 2022,

steps shown on the right for two climate change scenarios,

2030
Medium-termtargetIn fiscal 2022, greenhouse gas emissions were 438,000 t-CO2e, ageneration.

discuss responses to reported climate-related issues and monitor

strategies, we will devise more flexible and robust strategies andOverview of Business Segments¥516.1billion

100
2020

Group in the future, then utilizing them in the formulation of businessClimate change scenario analysis was conducted using the

10%

300

2019

and executive officers, which reports to the Board of Directors, who

the Precision Instruments business and the Textiles business.

Si/semiconductors
Micro Devices

340

2014
Base
year

such as the Corporate Strategy Conference comprising the president

the risks and opportunities that climate change will pose to theand Communications business, the Micro Devices business,

12%

400

0

Responsibility for climate-related issues is entrusted to committees

Disclosures (TCFD) recommendations since fiscal 2021. By identifying

and Mechatronics, and Mobility businesses in the Wireless

Friction materials
and other products
compliant withcopper regulations
Automobile Brakes

▲35％

679
564

respond to risks and opportunities related to climate change.

in accordance with the Task Force on Climate-related Financial

Sustainability

800
592

within the Group-wide governance system* to appropriately

Nisshinbo Group has conducted climate change scenario analyses

Strategy

Reduction of Greenhouse Gas
Emissions600

The Nisshinbo Group established and now operates a mechanism

appropriately to risks posed by climate change, a global issue, theNisshinbo announced its endorsement of the TCFD recommendations.

FY2024700

Believing it important to seize business opportunities and respondValue Creation

FY2030Governance
ProfileTarget for 2030
(The Medium-Term
Environmental Target)
Reduce greenhouse gas
emissions by 50% or morecompared to fiscal 2014

Target for 2050
(The Long-Term
Environmental Target)

Overview of the TCFD Response35Sustainability ̶ Reports Based on the TCFD Recommendations

Risk typePhysicalrisks

4. Identify potential responses

Opportunities

In the future, based on the results of the scenario analysis, all business divisions will minimize risks related to greenhouse gas emissions while

・Increase in demand for disaster prevention
products and services due to increased flood risk
・Increase in demand for air-conditioner parts due tomore frequent use of air conditioning in summer
・Increase in sales of heat-related products (e.g.,cool biz, cool touch)focusing on capturing actual and potential opportunities related to the products and services of each business division over the medium to longterm. In fiscal 2023, the Nisshinbo Group will expand the scope of analysis to all its businesses by conducting climate change scenario analysis
for businesses that have not yet done so.
Business―

Common to allbusinesses

２. Identify and define range of scenarios

Wireless andCommunications

With 2050 as the time axis, the Nisshinbo Group analyzed climate-related risks and opportunities using the warming progression and(Solutions, Marine
Systems, ICT and
Mechatronics, Mobility
businesses)

decarbonization scenarios. The following documents were referenced for the analysis.
Warming Progression Scenario

Decarbonization Scenario
Intergovernmental Panel on Climate

International Energy Agency (IEA)

Intergovernmental Panel on Climate

Change (IPCC)

・Net-Zero Emissions Scenario (NZE)

Change (IPCC)

・Reference Technology Scenario (RTS)・RCP8.5

・Sustainable Development Scenario (SDS) ・RCP2.6 or RCP4.5

・Provide products and services that respond to changes andregulations associated with the promotion of decarbonization

Precision Instruments

・Potential increase in sales opportunities for machine tools for CFRP
materials amid a growing environmental orientation in the supply chain・Potential increase in demand for wind power–related products
amid the ongoing introduction of renewable energy
・Potential for increase in sales opportunities for new energy
vehicle–related products due to higher EV sales, amid declining
sales opportunities for ICE vehicle–related products
・Potential increase in sales opportunities for related products due
to growing demand for air conditioners in line with global warming

・Capture sales opportunities for machine tools for CFRP materials
to meet supply chain environmental needs
・Develop and manufacture wind power generation–related
products in line with the growing introduction of renewable energy
・Develop and manufacture specialized machines for machining
and assembling parts related to new energy vehicles in line withincreasing EV sales
・Develop and manufacture air-conditioning components to meetgrowing demand for air conditioning during summer

Chemicals・Potential increase in demand for cross-linking agents due to risingdemand for cold-drying paints
・Potential increase in sales of insulation materials due to the
spread of ZEB/ZEH
・Potential increase in sales of fuel cell separators in proportion
with fuel cell market expansion

・Capture demand for cross-linking agents due to rising demand forcold-drying paints
・Capture demand for insulation materials due to the spread of ZEB/ZEH
・Capture demand for fuel cell separators in line with the spread of fuel cells
・Provide products and services that respond to changes andregulations associated with the promotion of decarbonization

Textiles・Potential increase in sales opportunities targeting customers with a high ・Capture demand for apparel products that promote
environmental orientation and sales of environmentally friendly products decarbonization, and develop and manufacture environmentally
due to changes in environmental orientation in the supply chain
friendly industrial materials
・Potential fluctuation in raw cotton costs due to climate change, as ・Develop and manufacture heat-resistant clothing
well as increased sales opportunities for heat-resistant products inline with rising temperatures

related products and environmentally friendly products, especially EVs and renewable energy, is expected to increase.

3. Evaluate business impacts
The financial impact on each was summarized together with study results from fiscal 2021 and fiscal 2022. The results are as follows.
：Micro Devices

Category
Carbon price
Energy mix
Customer/Market
changes

Spread of low-carbon
and energy-saving
technologies：Automobile Brakes

Assessment Item
Cost of procuring raw materials from suppliers and manufacturing costs at
plants increased due to carbon taxation
Energy costs fluctuated in line with city gas, crude oil and electricity prices：Precision Instruments：Chemicals

Increase in sales of ship-related products due to increased demand forshipping in line with modal shift
Energy costs rose in line with response to GHG reduction requests fromsuppliers
Increase in sales of brake friction materials due to change in demand
for automobiles
Increase in sales of insulation materials due to the spread of ZEB/ZEH

Risk Management

Increase in sales of cross-linking agents due to rising demand forcold-drying paints

Regarding risks and opportunities related to climate change to which the Group should pay attention, risks are unambiguously ascertained,

Increase in sales of machine tools for CFRP materials due to a greaternumber of companies working to reduce GHG emissions
Increase in sales of products for environmentally oriented apparel andenvironmentally friendly industrial materials
Increase in sales of products related to EVs, new energy vehicles, smart
mobility and fuel cells
Increase in sales of energy-saving GaN power semiconductors and electronic
device–related products
Increase in sales of wind power generation–related components
Increase in sales of related parts due to changing demand for ICE vehicles
Increase in sales of disaster prevention products and services due toincreased flood risk
Increase in sales of air-conditioner parts due to more frequent use of air
conditioners in summer
Decrease in product costs due to lower raw cotton (cotton fiber) prices
Increase in sales of heat-resistant clothing

Severity of extreme
weather events

Increase in costs due to property damage and lost business causedby flooding

Assessment of Impacts* ： ：Positive impact / ：Negative impact
Magnitude of impact： Under ¥1 billion： /¥1–5 billion：/¥5–10 billion：/¥10 billion or more：/(For business impact assessment details, please see“Information Disclosure Based on TCFD Recommendations”on the Group Sustainability website.)36

analyzed and evaluated in each business based on the Risk Management Rules. The persons in charge of each business prioritize risks andhypothesize the magnitude of their impacts on business and future scenarios. This information is comprehensively mapped at the Corporate
Strategy Center and deliberated by the Corporate Strategy Conference and the Board of Directors.

Indicators and Targets
The Nisshinbo Group aims to seize business opportunities related toTarget for 2024 (The 5th Three-Year Environmental Target)

climate change while mitigating risks. To mitigate climate change–

Reduce greenhouse gas emissions by 35% or more compared to fiscal 2014

related risks, we are aiming for carbon neutrality by 2050 andTarget for 2030 (The Medium-Term Environmental Target)

proactively promoting climate change countermeasures such as energy
conservation activities and reduced perfluorocarbon (PFC)* emissions.
*Perfluorocarbon is a fluorine-based greenhouse gas used for dry etching in thesemiconductor manufacturing process.

Reduce greenhouse gas emissions by 50% or more compared to fiscal 2014
Target for 2050 (The Long-Term Environmental Target)
Aim to be Carbon Neutral

For more detailed information, please visit the Sustainability section of the Nisshinbo Group website.
https://www.nisshinbo.co.jp/english/sustainability/

37

Data Section

Average rise intemperature,
precipitation,
weather patterns：Textiles

Assessment of Impacts*
Warming
Decarbonization
Progression
Scenario
Scenario

Overview of Business Segments

・Although demand for brake friction materials is expected to growas demand for automobiles increases, the longer service life ofbrake friction materials might reduce brake repair demand as thepercentage of EVs increases

Sustainability

Automobile Brakes

In the warming progression scenario, while some sites will be affected by flooding and other damage, sales opportunities for countermeasure：Wireless and Communications

・Capture demand for shipping-related products
・Expand development and manufacturing of EV-related products
・Apply energy-saving products (e.g., GaN power semiconductors,
electronic device–related products) to the electric power field・Capture demand for ships supporting offshore wind power
generation
・Develop and manufacture millimeter wave radar water level
meters for disaster prevention, and capture demand for disasterprevention products and services

・Potential increase in sales of smart mobility–related products
・Develop and manufacture smart mobility–related products in line
due to social developments toward a smart mobility society
with the expansion of the smart mobility society, enhance related
Potential
increaseindemandforlow-carbon
andenergy-saving
products
・parts production systems
・Potential increase in flood risks and demand for disaster・Develop and manufacture energy-saving products to meetprevention–related products and services due to frequent
demand for low-carbon and energy-saving products
occurrence of natural disasters・Capture demand for water level gauge sensors in response toincreased risk of flooding

products will increase as temperatures rise, and demand for disaster prevention–related products and services is expected to rise. In the(For global outlook details, please see“Information Disclosure Based on TCFD Recommendations”on the Group Sustainability website.)・Potential increase in ship-related product sales opportunities due
to expanding demand for shipping resulting from modal shift
・Potential increase in demand for EV-related products in line withEV sales growth・Potential increase in demand for energy conservation and energysaving device sales opportunities
・Potential increase in demand for offshore wind power generation–
related products due to increased demand for renewable energy
・Potential increase in flood risks and demand for disasterprevention–related products and services due to frequent
occurrence of natural disasters

Micro Devices

Note: IEA scenarios are based on the latest data available at the time of analysis for each project, and there might be slight differences in conditions and other factors.

decarbonization scenario, countries will tighten emission reduction targets and introduce high carbon taxes, while demand for decarbonization-

Direction of response

・Reduce GHG emissions and save energy to avoid carbon taxes
・Risk of additional costs due to the introduction of carbon taxes andassociated cost increases. Possibility that suppliers will be increasingly and reduce energy costs
requested to reduce GHG emissions and will be forced to respond・Prevent and mitigate property damage and business loss caused
・Potential property damage and loss of business due to increased flooding by flooding

Value Creation

International Energy Agency (IEA)
・Stated Policies Scenario (STEPS)Business impact summary

ProfileAssessment Item
Risks
Major
Subcategories
categories
Chronic
Average・Increased disaster response costs due to storm surge
rise indamage and costs incurred for relocation
temperature, ・Fluctuating product costs in line with raw cotton (cotton
precipitation, fiber) price fluctuations
weatherpatterns
Acute
Severity of ・Property damage and loss of business due to typhoons andtorrential rains
extremeweather
eventsSustainability ̶ Outside Director Message

Guided by the Spirit of“Public Entity”and“Consistent Integrity,”the Company Will
ProfileLeverage Accumulated Technologies andHuman Capabilities to Contribute to Society
as an Environment and Energy Company
Group to Realize a Super-smart Society.

Value Creation

Hiroaki Yagi
Director (Outside Director)

Coming From a World of Continuously
Examining Corporate Pathologies
After being appointed as Public Prosecutor in 1981, I spent 38
Superintending Prosecutor of the Tokyo High Public Prosecutors
Office in 2019. Most of those years were spent in the Public
Prosecutors Offices in Tokyo and Osaka handling financial
and economic crimes such as bribery, bid rigging, fraudulent
accounting and tax evasion, where I focused exclusively on
corporate pathologies. After this, I registered as an attorneyat-law in March 2019, and in June that same year, I became
Cooperation Organization, which provides support for theemployment of foreign personnel. In March 2020, I was
appointed as an outside director at Nisshinbo.
After retiring as a public prosecutor, I have been immersed ina global world, which unlike the domestic focus of my previous
work, constantly surprises me by the nearly simultaneous anddirect impact of events occurring overseas that have the potentialof bringing about drastic changes in the business environment.
However, it would not be worthwhile entering this new world if I
did not enjoy it, and I intend to do my utmost to fulfill my duties
while responding to rapidly changing conditions.

discovered. As a member of the Board of Directors, I will maintain

as a textile company, has expanded with business companies

efforts to establish internal controls and ensure compliance andthat include Japan Radio and Nisshinbo Micro Devices whileproper management.

adapting to changes in society. Furthermore, I learned thatIn the three years since becoming a director, I have had the

Nisshinbo has been proactively promoting portfolio reforms toopportunity to visit plants 2–3 times each year, which has beenfurther meet contemporary needs while also making full use ofvaluable in terms of obtaining site information. During each

M&A methodologies, transforming itself into an Environment andEnergy Company group centered on the three pillars of Mobility,
Infrastructure & Safety and Life & Healthcare targeting therealization of a super-smart society.
Furthermore, when I discovered that the root of thesetransformations was supported by the fundamental spirit of“public entity,”“consistent integrity”and“innovation,”I was
reminded of the Omi merchant saying, sanpo-yoshi , which I am
familiar with as a native of the Kansai region. Sanpo-yoshi is abusiness philosophy aimed at contributing to both the interests ofsellers (companies) and buyers (customers) as well as the wholeof society. This is the core of Nisshinbo’s fundamental spirit,
which is based on the idea of fulfilling its corporate responsibility
by earning profits correctly and satisfying customers, shareholders
and all other stakeholders. As someone who has confronted
corporate pathologies for many years, these words shine likegems and made me an admirer of Nisshinbo, providing me witha strong sense that this is what a company must do to remain
healthy.
profits by any means, including cheating, and the desire to hidefundamental spirit. If Nisshinbo conducts operations without
forgetting this fundamental spirit, it will never go astray.
However, people can be weak, and in a moment of weakness,
the aforementioned desires might rise to the surface. My

To be frank, before I was asked to become a Nisshinbo outside

quickly detect and correct any wrongdoing before it becomes a

director, I was only familiar with the Company name. As I camemajor problem, and to eliminate the desire to take inappropriate

visit, I received extremely earnest and detailed explanations
that have been very useful in helping the Board of Directors toform a more concrete image of sites than before the inspections
were conducted. Through these opportunities, we were able toexperience the diversity of products in each business field within
the Nisshinbo Group, as well as the strength of the technologies
and human resources accumulated over more than a century.

I became an outside director in 2020, the year the pandemic began,
and with the exception of the Board meeting after the General

Nisshinbo’s strength lies in the advanced technologicalcapabilities possessed in each of its business fields, and I have

Shareholders’Meeting, all Board of Director meetings were held

great expectations that the yokokushi strategy—the exchange

online. This appears to have been a major change from previousof technologies and human resources across business fields

years, but being accustomed to virtual Board meetings as I am,emphasized in recent years—will drive Nisshinbo’s further growth.

I honestly did not experience any inconvenience. However, it is

A unique aspect of Nisshinbo is the diversity of its business

undeniable that there will be less non-verbal communication thanfields, and one would be remiss in thinking that each of thesein the past, as the atmosphere can only be understood throughfields, despite their advanced technological capabilities, exist

real-world interactions. To alleviate these concerns, we proactively

independently of one another. I want Nisshinbo to continue

visit Group companies in pursuit of opportunities to maintain close

making great strides in developing new strengths created throughcontact with other inside and outside directors. Furthermore, since

the fusion and utilization of resources in each of these fields.

2022, the Company has made efforts to hold gatherings for outside
directors so we can exchange information that can only be obtained
through real-world interactions.
The Board of Directors consists of five outside directors, including
myself, and two Audit & Supervisory Board Members for a total of

Data Section

their own failures, which is the exact opposite of Nisshinbo’sunderstanding is that internal control management is in place to

38

The Board of Directors Itself Has Also
Undergone Drastic Changes Over the
Past Three Years, Becoming More Openand Transparent

Nisshinbo, which has consistently maintained the principles of

Most corporate pathologies are caused by the desire to earn

Nisshinbo’s“Public Entity,”“Consistent
Integrity”and“Innovation”are Exactly
What Society Needs Right Now

Advanced Technological Capabilities are
Nisshinbo’s Greatest Strength

Overview of Business Segments

President of the Japan International Trainee & Skilled Worker

actions by thinking of what will happen if wrongdoings are

Nisshinbo, which has a more than 100 history since its founding

Sustainability

years in the field of public prosecution until my retirement as

in contact with detailed information online, I realized thatseven members (three of whom are women), comprising a diverse
group of people, each of whom speaks freely at Board meetingsfrom a standpoint independent of the Company. Furthermore, insidedirectors and managing officers share opinions from their respective
points of view, creating a very cheerful and open atmosphere, which
I think is also a reflection of Nisshinbo’s positive corporate culture.

39

Sustainability ̶ Dialogues with Shareholders and Investors

Dialogues with Shareholders and Investors
Dialogues Held and Main ParticipantsA

Related page

The P/B ratio is still
below 1x. How will you
respond to the TSE’srequest?

As stated in the request, rather than a temporary fix, we will
institute comprehensive measures to continuously achieve a
return on capital in excess of the cost of capital and achievesustainable growth. Specifically, over the past two years, wehave worked to increase profits in each of our businesses
through rigorous cost controls and strategic pricing, and in
FY2022, we are starting to see some progress.

Message from the President
P.12“Review of Fiscal 2022
and Outlook for Fiscal 2023”

What are theleading indicators of
performance?

Many of our businesses intersect with the automotive
supply chain, such as Automobile Brakes, Wireless andCommunications in-vehicle equipment, semiconductors andPrecision Instruments. There is a high correlation between
global automobile production volumes and Nisshinbo businessperformance.

What are the strengthsof the Wireless andCommunications
business?

One of its strengths is telemetering systems that automaticallymeasure water levels in dams and rivers, precipitation inwatersheds and a variety of other remote data, collected
automatically via wireless lines and other means. Nisshinbo has
been involved in this field since the 1950s, and as a leading
telemeter company, currently holds approximately 30% of thewater and river information system market.

Will the Wireless
and Communications
business be driven byincreases in defense
budgets?

Before the war, JRC was involved in the development of
shipboard transmitters and receivers for the Navy. After thewar, JRC developed a variety of shipboard communications
equipment for the Maritime Self-Defense Forces, including
shipboard communications equipment, aerial line matchingequipment and receivers for submarines. Currently, thecompany offers products in all areas of land, sea and air,including guidance system–related equipment. In general,the company sees the expansion of the defense budget as a
tailwind for its business.

What are the strengthsof the Micro Devices
business?

Strengths include signal processing ICs, such as sensor
products, the market for which is expanding, and power supply
control ICs, which are increasingly required to achieve low
power consumption. Nisshinbo can provide analog solutions
combining multiple functions.

How does the spreadof EVs impact the
Automobile Brakes
business?

We do not expect installation in new vehicles to disappear due
to reliability and other factors. Furthermore, EVs are about 30%
heavier than conventional vehicles, so the friction materials
used are also larger than in conventional vehicles. At the sametime, the use of regenerative braking reduces the frequency ofphysical braking, so the replacement cycle of friction materials
is expected to lengthen.

In FY2022, the TMD
Automobile Brakes
business posted alarge loss. What is youroutlook for the future?

The deficit in FY2022 was due to sharp rises in raw
fuel, electricity and transportation costs in Europe. TMD
implemented price pass-throughs several times, but there was atime lag, and some of the effects were carried over to FY2023.
TMD has been restructuring for some time by consolidating or
closing plants in various regions, and is expected to return toprofitability once market prices become reasonable. TMD did
in fact move into the black in Q1 of FY2023.

What is your outlook for
the Real Estate business?

The Real Estate business is engaged in leasing and sales
through the redevelopment of former plant sites in Japan.
The company expects to generate about ¥3 billion in annual
operating income from the leasing business going forward.
Large-scale sales projects will mostly end in FY2023.

What is your view on
dividends and sharebuybacks?

Our basic policy on shareholder returns is as follows:(1) Invest in growth strategies(2) Provide stable and sustainable dividends(payout ratio of approximately 30% as a target)(3) Consider share buybacks, etc., after ensuring sufficientretained earnings● Business briefings (semiannual): Directors (business segment representatives), department senior managers● Individual interviews (about 80 times per year): Directors (CFO), IR managers

Shareholder and Investor Details● Japanese institutional investors: 80%; overseas institutional investors: 20%● Medium- to long-term business strategies● Business portfolio orientation● Business models, market environments and competitive advantages in each business● Shareholder returns

Feedback to Management
Details

Shareholder, investor and analyst
comments

As necessary

Individual interview summaries reported via e-mail or othermethods

Analyst reports

As necessary

Analyst report summaries reported via e-mail or othermethods

Every six months

Share price trends and volume reported at management
meetings

Share price, shareholder and stockrelated information

Main comments and requests summarized and reported via
e-mail or other methods

All year

Reported as a management review at Board of Director
meetings

Status of IR activities

Overview of Answers to Questions from Shareholders and InvestorsA

Related page

Nisshinbo is engaged
in multiple businesses,
which one will you focus
on in the future?

All business vectors are aligned with the environment.
Nisshinbo will expand products and services that contributeto reducing environmental impacts. We have positioned the
Wireless and Communications business and the Micro Devices
business as growth drivers. Currently, these businesses accountfor 46% of total sales, but we aim to increase this to above
60% in the future.

Message from the President
P.10“Aiming to Realize aSuper-smart Society
Centered on theEnvironment”

Why don’t you
disclose medium-term
management plans?

Nisshinbo is constantly working to transform its businessportfolio, and has refrained from announcing M&A and carveouts because they are always in process. We plan to announce
medium-term management plans after reaching a certain scaleof M&A and carveouts.

Message from the President
P.13“Continuous
Engagement in M&A and
Carveout Projects”

What KPIs are you
focused on over the
medium to long term?

We position ROE as an important indicator and seek toconsistently exceed 10%. We are making efforts to changeboth the denominator and the numerator when calculating ROE
but basically believe in the importance of numerator = higher
profit.

Message from the President
P.13“Continuous
Engagement in M&A and
Carveout Projects”

40

Data Section

Q

Key Business Growth
Strategy: Micro Devices
P.23“Strength: Analog
Technologies”

Overview of Business Segments

Quarterly

Sustainability

Frequency

Key Business Growth
Strategy: Wireless andCommunications
P.18“Three Strengths”

Value Creation

Main Dialogue Topics

Nisshinbo Group Financial
Strategy P.16“Basic Financial
Capital Strategy”

Profile● Results briefings (semiannual): President and directors (business segment representatives, CFO)

Q

Message from the President
P.15“Shareholder Returns”

41Sustainability ̶ Corporate Governance

Board of Director Duties and Diversity

Corporate Governance Global compliance
its various businesses based on global business management and cash flow management. We follow the Nisshinbo Group corporate
philosophy:“Change and Challenge! For the creation of the future of Earth and People.”To achieve this, we are improving the quality ofcorporate governance and other aspects of our organizational culture. In parallel, we are striving to deliver quantitative growth in earnings andshareholder value, focusing on ROE to improve profitability and placing importance on the share price in management decisions.
By making rapid and bold decisions based on risk-taking in line with our management principles, we are working to enhance management
efficiency while ensuring transparency, as well as improve accountability, act ethically and build a stronger corporate governance structure
founded on our Corporate Philosophy.

Corporate Governance Policy

Matters Concerning the Composition of Governing Bodies
and Organization Management

URL: https://www.nisshinbo.co.jp/english/ir/governance/policy.html

Organizational form

Company with Auditors

Number of directors under the Articles of Incorporation

14

Term of office for directors under the Articles ofIncorporation

governance and related initiatives. By steadily implementing theas needed, we aim to improve the effectiveness of governanceand create a framework for rapid and bold decision-making thatover the medium to long term.

1 yearChairman (except when
concurrently serving as
President)

Chairman of the Board of Directors
Number of directors (including outside directors)

11（5）Outside director appointment status

Appointed

Appoint/
Oversight

Instruct

Board of Management

ReportInstruct

Introduced restricted stock compensation system2021

As a Prime Market‒listed company, in response to
Corporate Governance Code revisions (June2021), the Group began conducting climatechange scenario analyses in accordance with the
Task Force on Climate-related Financial
Disclosures (TCFD) recommendations.

Audit & Supervisory Board

Coordinate
ReportFinancial Auditors

Reappoint

Coordinate

Coordinate

Internal Audit Oﬃcer<Audit functions>Board system. In addition, Nisshinbo has separated decisionmaking and oversight from business execution and adopted amanaging officer system to reinforce those functions.
By transferring responsibility for business execution to managing

10

15（people）

In 2022, to more objectively confirm the effectiveness of theevaluated as functioning effectively, as it comprises inside directors

Board of Directors, evaluations were conducted using thewith extensive business experience and outside directors withknowledge of outside consultants, who conducted questionnaires

specialized knowledge, which facilitates various discussions andand interviews with all directors and Audit & Supervisory Board

efforts toward the following priority issues.

2022 Priority Issues

・Regarding the implementation of various measures contributing to・Facilitate discussions related to priority themes such asincreased efficacy and deeper discussions, the Board Chairman,

results of this analysis. Nisshinbo’s Board of Directors was

sustainability, the business portfolio and management strategies

directors and Audit & Supervisory Board members attempted to・Implement various measures contributing to increased

mutually implement autonomous improvements

efficacy and deeper discussions by the Board of Directors andindependent committees

Status of Response to Priority Issues
・In terms of facilitating discussions related to priority themes,

medium to long term.

5members. The Board of Directors then discussed the compiled

we are improving management efficiency and transparency andGroup’
s sustained growth and enhance corporate value over the0

Evaluating the Effectiveness of theBoard of Directors

officers and strengthening oversight by the Board of Directors,
creating an effective governance structure that will support theof which are women）

2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023

2023 Priority Issues
・Deepen strategic discussions from a broad perspective to strengthenGroup profit structure and promote sustainability management
・Select and thoroughly discuss effective monitoring themes toagenda items related to sustainability management and theensure objectivity and transparency of strategies

business portfolio were proposed

・Strive to ensure two-way communication between directors andexecutive members to effectively monitor strategy execution
43

Data Section

The Group has adopted a Company with Audit & Supervisory

Composition of the Board of Directors
Introduced outside director system and managing
oﬃcer system, reduced term of oﬃce for directors
Number of inside directors
Number of outside directors （（year）
from two years to one

2018

Appoint/Dismiss

Corporate Governance Structure
sections II-1, II-3, II-6 and II-7.

2006

Abolished internal advisor andconsultant system

Audit

Please refer to the Nisshinbo Corporate Governance Policy

・To ensure objectivity in evaluating the eﬀectiveness of the Board of Directors, Nisshinbo asks outside consultants to conduct questionnaires
and interviews with directors and Audit & Supervisory Board members. The consultant s knowledge is also used to analyze the results.

2017

ReportManaging Oﬃcers, Business Divisions, Group Companies

Improvement Eﬀorts in 20222

Accounting audit

Discusses business execution matters

Corporate Governance Reforms

4（2）

Audit

Representative Directors

Diversity
Ratio of women: 18.2%

Corporate Governance Policy formulated,established Remuneration Committee andNomination Committee (both discretionary
bodies), started evaluating eﬀectiveness of Boardof Directors

Report<Business execution functions>

Independence

2016

Four Audit & Supervisory Board Members(including two independent outside audit &supervisory board members)

expertise of each Board member are listed in the Skill Matrix on page 50.

Ratio of Outside Directors: 45.5%

Abolished takeover defense measures

Audit

Discuss/
Reportare independent outside directors (including two women). The skills andOverview of Business Segments

Nomination Committee
Remuneration Committee

Composition of the
Directors

2015<Decision-making and oversight functions>

Recommend

2023, the Board of Directors was composed of 11 directors, of which fivedecision-making. In this manner, the Company aims to achieve greater

5

Appoint/Dismiss

11 directors (including ﬁve independent outside directors)of Directors, as well as the skills of each Board member. As of March 30,

risk and works to achieve governance that is focused on quick and bold

5

General Shareholders' Meeting

Board of Directors

experience, knowledge, expertise and other skills required for the Board

decision-making. At the same time, the Company fearlessly confronts

Number of Audit & Supervisory Board Members underthe Articles of Incorporation

Number of outside corporate auditors designated as
independent officers

Appoint/Dismiss

Nomination Committee, which includes outside directors, deliberates the

directors and the board help to monitor business execution andNumber of outside directors designated as independent
officers

Number of Audit & Supervisory Board Members(including outside members)

Corporate Governance Structure

greater diversity in areas such as gender and nationality. Furthermore, theand management of internal control and risk management systems,

Sustainability

contributes to sustained growth and increased corporate value

corporate value, and who enhance the composition of the board throughshareholders’intentions within the board. By overseeing the preparation

Value Creation

Nisshinbo Corporate Governance Policy at https://www.nisshinbo.co.jp/english/ir/governance/policy.html

principles of the policy and revising and improving its content

ability to realize the Company’s Corporate Philosophy and increase

fiduciary duty to shareholders and thus strive to appropriately reflect

for shareholders.

Corporate Governance Report at https://www.nisshinbo.co.jp/nish/ir/governance/pdf/governance/c_governance_en.pdf

Policy, which clearly states our basic thinking on corporate

management experience, have the necessary firm commitment andDirectors and the Board of Directors recognize that they have aaccountability to stakeholders, increased profitability and higher returns▶ Details regarding Nisshinbo corporate governance are as follows.

We have formulated the Nisshinbo Corporate Governancemanagement talent as candidates for directors who possess outstanding

ProfileNisshinbo is aiming to increase corporate value over the medium to long term as an Environment and Energy Company group by operating42

the lines of environment and energy, the Board of Directors selects

II-1 and II-4.

Basic Stance

AdviseTo promote the globalization of each Nisshinbo company along

Please refer to the Nisshinbo Corporate Governance Policy sections

Sustainability ̶ Corporate Governance

Remuneration for Directors and Senior Managers

Dialogue with Shareholders
Remuneration for directors comprises basic remuneration

Please refer to the Nisshinbo Corporate Governance Policy section II-2.

(monthly payment) and bonuses and stock-based remuneration

Please refer to the Nisshinbo Corporate Governance Policy section III-2.

To increase transparency and objectivity in processes for(restricted stock compensation plan), both of which are set within

determining remuneration, Nisshinbo has established athe maximum limits approved by the General Shareholders’Remuneration Committee as an advisory body for the Board of

Meeting. Stock-based remuneration for each role is set within

Directors. As of March 30, 2023, the committee comprised theseparate maximum limits for amounts and shares determined bypresident and five outside directors. The committee chairman isresolutions of the General Shareholders’Meeting. However, outside

selected by members of the committee.

directors receive only basic remuneration (monthly payment) andPlease refer to the Nisshinbo Corporate Governance Policy

retirement benefits are not paid to directors. Remuneration for

sections III-1 and III-3.

Remuneration for Directors and Auditors (fiscal period ended December 2022)

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

35

Basic remuneration(Fixed)Bonus(Performance-linked)

Restricted stockcompensation plan

149

70

19

Outside directors and outside Audit &Supervisory Board members

62

35

Stakeholder Engagement
line with the aims of our VALUE commitment, we work hard
to resolve any issues by emphasizing dialogue with customers,
shareholders, employees and all other stakeholders connected to

Nisshinbo recognizes that continuous dialogue with stakeholders

the Nisshinbo Group.

is key to supporting sustained growth in corporate value. In

Remuneration breakdown (millions of yen)238

dialogue.

at communicating with shareholders and investors, actively

̶

Total
number of payees

8̶

Stakeholder Engagement Initiatives
Stakeholder

Customers

Examples of approaches (ﬁscal 2022 activities)● Corporate website and social media ● Exhibitions ● Online seminars

Key department/site

Marketing/Engineering● Activities aimed at increasing customer satisfaction (95 items) ● CM

2

● General Meeting of Shareholders (one time)

62

̶

̶

● Results brieﬁngs (two times) ● Business brieﬁngs (two times)

7

Shareholders/
Investors● Individual meetings with institutional investors and analysts (about 80 times)● IR tools (e.g., Integrated Report, Sustainability website, Shareholder newsletter)

Corporate
communications
Sustainability

Notes: 1. Total maximum remuneration for directors: No greater than ¥400 million per year (Employee salaries of individuals simultaneously appointed as employee and director are not included in
payments to directors. Directors are also eligible to receive compensation through a restricted stock compensation plan, up to a maximum value of ¥40 million per year.)
2. Total maximum remuneration for members of the Audit & Supervisory Board: No greater than ¥70 million per year
3. The Company had 11 directors (including five outside directors) and four Audit & Supervisory Board members (including two outside members of the Audit & Supervisory
Board) as of March 30, 2023.
4. The actual amount of bonus payments reflects degree of achievement regarding performance targets such as net sales, pretax profits, operating cash flow and other indicators related to
the Group or businesses remitted at a fixed rate according to position.

● Online information for shareholders and investors● Global Group internal newsletter (four times), Intranet

Selection and Dismissal of Directors andSenior Managers
Please refer to the Nisshinbo Corporate Governance Policy section II-2.

and dismissing directors, Nisshinbo has established a Nomination
Committee as an advisory body for the Board of Directors. As of
March 30, 2023, the committee comprised the president and five

● President town hall meeting with employees (10 days, total of 38 times)

outside directors. Regarding senior management, directors andexecutive officers, the Nomination Committee informs the Boardof Directors of candidates based on prescribed criteria. If reasonsfor ineligibility arise with respect to senior management, directors
or executive officers, their dismissal or removal is reported to the

Employees

Board of Directors.

shareholder rights is not impeded and will take appropriate
measures to fully protect shareholder rights. The Company will
shareholders and investors and ensure the appropriate operationof the General Shareholders’Meeting.
The Company has set out a policy for cross-shareholdings.
In line with that policy, it regularly assesses the purpose andeconomic rationale for cross-shareholdings based on capital costs
and other indicators.
Shares with diminished strategic value are sold incrementally44● Employee health fair event (10 times)

Health Management
Department● Internal whistleblower system (six cases)

Corporate Ethics
Department

All departments● Factory tours, work experience (11 times), workshops (30 times, 560 people)

Changes in Cross-Shareholdings

Regional
communities(Stocks)

100
80(¥61.5 billion)

66

60(¥69.1 billion)

63

Business sites● Participation in projects to protect biodiversity(¥46.9 billion)

55(¥45.7 billion)

52(¥30.2 billion)

49

40

Suppliers● Spread awareness of sustainable procurement basic policies

Procurement Division● Sustainable procurement surveys

200● Cleaning activities

Data Section

implement various measures related to communication with

Diversity● Disaster prevention, BCP and other emergency drills (15 times)

Please refer to the Nisshinbo Corporate Governance Policy section III-2.
The Company shall ensure that the exercise of minority● Global survey (one time)● Improvement proposal meetings (31 times)

Protecting the Rights and Ensuring theEqual Treatment of Shareholders

Corporate
communications

Overview of Business Segments

To increase transparency and objectivity in processes for selecting

and systematically.

Value Creation

Classification

Total remuneration(millions of yen)disclosure outside the Company and various types of direct

Profilemanaging officers is based on the same policies and procedures.

The director in charge of IR supervises numerous measures aimed

engaging in IR activities that include accurate and fair information

2018.122019.122020.122021.122022.12NGOs, NPOs,
government
agencies● Various donation activities

Business sites

45

Sustainability ̶ Risk Management

Compliance

Risk Management

Based on Public Entity and Consistent Integrity—the fundamental spirit of Nisshinbo’s Corporate Philosophy—the Group’s mission is

Risk Management System

to act with fairness and integrity to contribute to society through its business activities. To achieve our mission, we have formulated

The Nisshinbo Group has established a risk management system, shown in the diagram below, to appropriately address businessBusiness Conduct Guidelines in order to win trust from the public through fair and honest business activities.

risks and minimize any losses associated with those risks.

ProfileSustainability ̶ Compliance

Risk Management Structure

Corporate Ethics Committee andCorporate Ethics Reporting System

Ensuring Business Confidentiality

Nisshinbo has established a Corporate Ethics Committee to handle

prevent any leak of confidential information such as intellectual

all compliance matters across the Group.

property, technologies and expertise disclosed during the productNisshinbo has also established a Corporate Ethics Reporting
suspected or actual legal violations. Group employees andexternal parties can submit reports to the system. Group
employees can report their concerns internally to the Corporate

design and development stage and across all points of the supply
chain.
We also conduct annual internal audits to check whether theGroup’s trade secrets are being managed appropriately.

Ethics Committee or directly to an outside corporate attorney. All

Sustainable Procurement Basic Policy

information provided by whistleblowers is treated in the strictest

Nisshinbo has formulated the Nisshinbo Group Sustainableof confidence, and every effort is made to protect whistleblowers
from unfair treatment. The Corporate Ethics Committee takes
appropriate steps to deal with issues raised by reports.

Compliance Education
conducts compliance training for different employee levels andwork sites and provides training to employees prior to overseas
assignments.
From the fiscal year ended March 2017, we added annualcompliance training for manager-grade employees in the Group to
our list of KPIs in order to raise awareness about compliance. We
also created a compliance training manual for managers in both
Japanese and English to be used in training sessions across the
In addition, compliance training is provided at each subsidiary inaccordance with conditions in each country, region and industry.

Initiatives to Prevent Corruption
In recent years, countries worldwide have been reinforcing
regulatory systems and stepping up efforts to prevent and expose
bribery and corruption. Nisshinbo has created a Corruption
Prevention Guidebook, which includes information about
responding to related regulations overseas. The guidebook
is distributed to all subsidiaries, including overseas Group
companies. In addition to information about Article 18 of Japan’sUnfair Competition Prevention Act (prohibition of provision of illicit
profit, etc., to foreign public officials, etc.), the guidebook provides
prevent corruption, such as the United Nations Convention Against
Corruption (UNCAC), OECD treaties on preventing corruptionof overseas public officials in international transactions, the U.S.
Foreign Corrupt Practices Act (FCPA) and its related guidelines,
and the U.K. Bribery Act. Nisshinbo updates the guidebook asnecessary and uses it as part of its corruption prevention measuresin the Group.

46

Appoint

1. To strictly observe all legal obligations and social norms
2. To always pursue business in a sound and fair manner

Risk management
general manager
Risk Management
Oﬃce

Internal risksMonthly
review

ClimatechangeBusiness portfolio
Capex/R&D
Attract/train
human resources
Regulatory Governance, etc. Changes inframework
Conﬁrmrisk
management
statusindustrial
structure

Operating environment

Identify risks for entire Groupand verify response measures

Conﬁrmrisk
management
status

3. To properly manage all information
4. To give due consideration to protection of the environment
5. To respect all basic human rights
6. To strive for a secure and healthy living and working
environment
7. To aim to ensure the quality and safety of all products andservices
We are working to extend our sustainable initiatives across theentire supply chain by asking suppliers to adhere to our principles
in those seven areas.

Board ofManagement

Board ofDirectors

Verify major risks and risk developments, discuss responses

Report on status of urgent and high-priority risks

Note: HD means Nisshinbo Holdings Inc.

Risk Management Structure

management (BCM) across the entire Group, organically linking

The Nisshinbo Group established the“Nisshinbo Group Crisis

initial response systems with business continuity planning (BCP).

Management Regulations”to respond promptly in the event of anearthquake, fire or other emergency.
Furthermore, to prepare for large-scale earthquakes andother emergencies from the perspective of business continuity,
the Group conducts annual information communication training
necessary for confirming the safety of employees and quickly
recovering from disasters. A“safety confirmation and emergency
contact system”was developed and introduced to confirm safety
quickly and reliably.

Disaster Prevention System
Self-defense fire brigades have been established at Nisshinbo
Holdings and major Nisshinbo Group companies, with inspectionsof fire protection equipment and firehose training conducted
regularly.
We have also conducted annual disaster prevention inspections
for more than 50 years to strengthen response capabilities
immediately after a disaster and improve our initial response
system. Furthermore, we are deploying business continuity

Information System
The Group is promoting the transition of its major systems to thecloud with the aim of preparing for large earthquakes and otherdisasters, as well as realizing safe operations 24 hours a day, 365
days a year.

Personal Information Protection
To properly manage important information pertaining tocustomers, employees and others, Nisshinbo conducts regularinternal audits annually in accordance with internal rules andregulations in an effort to realize continuous improvements. In
conjunction with the launch of Japan’s My Number system, we
also formulated and enforced Rules for Handling Specified Personal
Information.
In addition, the Nisshinbo Privacy Policy is published on our
corporate website.
Please see Key Risks and Opportunities on page 29.

47

Data Section

information about international treaties and laws designed toquality assurance.

Political/
economic

Instruct

Implement
PDCA

External risks

review

Person with ultimate
responsibility= President of HD

environmental protection, human rights, health and safety, andIdentify and evaluate risks,develop appropriate responses

Overview of Business Segments

Group.

areas: legal compliance, fair trade, information security,

Presidents and key
personnel from HD
and core operatingcompanies

Formulate plan for new ﬁscal year

Sustainability

To ensure fair and honest business practices, the Nisshinbo Group

Procurement Basic Policy, clarifying its stance on seven specificNisshinbo Holdings
Risk Management(HD)
Committee
Japan Radio
Nisshinbo Micro Devices
Nisshinbo Brake
Nisshinbo Mechatronics
Nisshinbo Chemical
Nisshinbo Textile
AnnualValue Creation

System to rapidly identify and prevent any reoccurrence ofNisshinbo signs non-disclosure agreements with suppliers toSustainability ̶ Board of Directors, Audit & Supervisory Board Members and Managing Officers

Board of Directors, Audit & Supervisory Board Members and Managing Officers（As of March. 30, 2023）

Board of Directors
ProfilePresident and Representative Director

Number of Company’s shares held: 75,050 shares
Board of Directors meeting participation:
Attended 16/16 meetings
Apr. 1982: Joined the Company

Apr. 2008: Managing Officer, Senior Manager of Corporate
Governance Department of Corporate Strategy Center,
Senior Manager of Human Resources & Administration
Service Department of Business Support Center (served
concurrently) and General Manager of Property Management
Department of the Company (served concurrently)
Apr. 2009: Deputy Chief of Business Support Center(served concurrently), Senior Manager of Corporate
Strategy Department of Corporate Strategy Center(served concurrently) and Senior Manager of Finance,
Accounting & IT Service Department of BusinessSupport Center of the Company (served concurrently)
June 2010: Director and Chief of Business Support
Center of the Company (served concurrently)
Jan. 2012: Responsible for Property Management
Department of the Company

June 2014: Chief of Corporate Strategy Center of
the Company (served concurrently)
June 2015: Director and Senior Executive
Managing Officer of the Company

June 2016: Representative Director and Senior
Executive Managing Officer of the Company
June 2018: Vice President and Representative
Director of the Company

Mar. 2019: President and Representative Director of
the Company (to the present)

Number of Company’s shares held: 7,938 shares
Board of Directors meeting participation:
Attended 16/16 meetings

Apr. 1982: Joined Japan Radio Co., Ltd.
Apr. 2010: General Manager of TechnicalDevelopment Department of Research andDevelopment Headquarters of Japan Radio Co., Ltd.
Apr. 2011: Director of Laboratory of Research andDevelopment Headquarters of Japan Radio Co., Ltd.
Apr. 2012: Executive Officer and General Manager ofResearch and Development Headquarters of Japan
Radio Co., Ltd.
June 2012: Executive Officer and Director ofLaboratory of Japan Radio Co., Ltd.
Apr. 2017: Executive Officer and Deputy General
Manager of Technical Headquarters of Japan
Radio Co., Ltd.
June 2017: Director, Executive Officer, General
Manager of Technical Headquarters, and Executive of
Research and Development of Japan Radio Co., Ltd.
Apr. 2019: Director, Executive Officer, General
Manager of Technical Development Headquarters, andExecutive of Business Creation of Japan Radio Co., Ltd.
Mar. 2020: President and Representative Directorof Japan Radio Co., Ltd.
Mar. 2021: Director and Senior Executive
Managing Officer of the Company
Mar. 2022: Representative Director and Senior
Executive Managing Officer of the Company(served concurrently, to the present)

Director and Executive Managing Officer

Director (Outside Director)

Director (Outside Director)

Director (Outside Director)

Satoru Taji

Kazunori Baba

Naoko Tani

Richard Dyck

Yuki Ikuno

Board of Directors meeting participation:
Attended 13/13* meetings

Number of Company’s shares held: 25,680 shares

Board of Directors meeting participation:
Attended 16/16 meetings

June 1975: Assistant Professor at Harvard
University
Sept. 1976: Assistant Professor at The Ohio
State University
Dec. 1976: Chief of Tokyo Representative
Office of Government of U.S. State of Ohio
Aug. 1978: North Pacific Sales Manager ofSpecial Material Business Unit of General
Electric Japan Ltd.
Dec. 1982: Representative Director of Teradyne K.K.
Sept. 1988: Vice President of Teradyne, Inc.
Mar. 1999: Representative Director of TCS
Japan K.K.
Sept. 2008: Chairman and Director of Alphana
Technology Co., Ltd.
Feb. 2009: Representative Director of TGK
K.K. (to the present)
Jan. 2010: Director of Mattson Technology, Inc.
Mar. 2013: Representative Director of
Levitronix Japan K.K.
Mar. 2023: Outside Director of the Company(to the present)

Apr. 1986: Joined Salomon Brothers Asia Limited
Sept. 1994: Joined Bankers Trust Asia Limited
Jan. 1996: Managing Director, Bankers Trust
Asia Limited
July 1999: Joined Deutsche Securities Limited(currently Deutsche Securities Inc.)
Managing Director, Fixed Income Division,
Deutsche Securities Limited
May 2007: Joined UBS Securities Japan Ltd.
(currently UBS Securities Japan Co., Ltd.)Managing Director, Investment Banking
Division, UBS Securities Japan Ltd.
May 2020: Hitotsubashi University Business
School, School of International Corporate
Strategy
Visiting Lecturer
Nov. 2022: Hitotsubashi University Business
School, School of International Corporate
Strategy
Visiting Associate Professor (to the present)
Mar. 2023: Outside Director of theCompany (to the present)

Number of Company’s shares held: 4,545 shares

Apr. 1981: Joined Ricoh Company, Ltd.
Apr. 2008: General Manager, Imaging System
LSI Development Center, Ricoh Electronic
Devices Co., Ltd.
Apr. 2014: Ricoh Group Director and Deputy
General Manager of Electronic Device Division
Oct. 2014: Director, Ricoh Electronic Devices
Co., Ltd.
Apr. 2015: Group Executive Officer, Ricoh
Company, Ltd.
President, Ricoh Electronic Devices Co., Ltd.
Jun. 2018: Director, New Japan Radio Co., Ltd.
Mar. 2021: Managing Officer of the Company
Jan. 2022: Executive Managing Officer of theCompany
President, Nisshinbo Micro Devices Inc. (tothe present)
Mar. 2022: Director and Executive Managing
Officer of the Company (served concurrently,
to the present)*Mar. 2022 Since appointment as director

Chief of Corporate Strategy Center
Board of Directors meeting participation:
Attended 16/16 meetings

Apr. 1983: Joined the Company
Apr. 2009: Managing Officer, Senior
Manager of Corporate Governance
Department of Corporate Strategy Centerand Senior Manager of Human Resources& Administration Service Department of
Business Support Center of the Company(served concurrently)
June 2013: Deputy Chief of BusinessSupport Center of the Company
June 2014: Director and Managing Officer of
the Company
President and Representative Director of
Nisshinbo Textile Inc.
June 2016: Executive Managing Officer of theCompany
Mar. 2019: Director and Executive Managing
Officer (to the present), and Chief ofCorporate Strategy Center of the Company(to the present)

Number of Company’s shares held: 0 shares

Apr. 1978: Joined Suntory Limited
June 1980: Joined Marcom International Inc.
Sept. 1985: Joined SEMI Japan
Apr. 2001: Joined Semiconductor Portal, Inc.
Director of Semiconductor Portal, Inc.
Nov. 2002: Representative Director of
Semiconductor Portal, Inc.
June 2007: President and Representative
Director of Semiconductor Portal, Inc. (to thepresent)
Mar. 2021: Outside Director of theCompany (to the present)

Number of Company’s shares held: 0 shares

Number of Company’s shares held: 0 shares

Sustainability

June 2012: Director, Executive Managing Officer and
Deputy Chief of Corporate Strategy Center of theCompany (served concurrently)

Takeshi Koarai

Director and Executive Managing Officer

Value Creation

Masahiro Murakami

Representative Director and Senior Executive
Managing Officer

Audit & Supervisory Board Members

Director (Outside Director)

Director (Outside Director)

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Yasuji Ishii

Shuji Tsukatani

Keiji Taga

Hiroaki Yagi

Toshihiro Kijima

Kenichi Morita

Atsushi Yamashita

Noriko Ichiba

Number of Company’s shares held: 18,065 shares

Board of Directors meeting participation:
Attended 15/16 meetings

Board of Directors meeting participation:
Attended 16/16 meetings

Board of Directors meeting participation:
Attended 16/16 meetings

Board of Directors meeting participation:
Attended 16/16 meetings

Apr. 1973: Joined Japan Development Bank
(currently Development Bank of Japan Inc.)
Oct. 1999: General Manager of Urban Development
Department of Development Bank of Japan Inc.
June 2002: General Manager of General Affairs
Department of Development Bank of Japan Inc.
June 2004: Executive Director of Development
Bank of Japan Inc.
Oct. 2008: Director and Executive Managing
Officer of Development Bank of Japan Inc.
June 2009: Vice President and Representative
Director of Tokyo Ryutsu Center Inc.
President and Representative Director of TRC
Service Co., Ltd.
June 2013: President and Representative Directorof Tokyo Ryutsu Center Inc.
Director of TRC Service Co., Ltd.
June 2017: Chairman and Director of DBJ AssetManagement Co., Ltd.
June 2018: Adviser of DBJ Asset Management
Co., Ltd.
Mar. 2019: Outside Director of the Company (tothe present)

Apr. 1981: Appointed as Public Prosecutor
Jan. 2007: Special Investigation Directorof Tokyo District Court Public Prosecutors
OfficeDec. 2015: Chief Prosecutor of Tokyo
District Court Public Prosecutors Office
Sept. 2016: Deputy Prosecutor-General ofSupreme Public Prosecutors Office
July 2018: Superintending Prosecutor ofTokyo High Public Prosecutors Office
Mar. 2019: Registered as attorney-at-law (tothe present)
June 2019: President of Japan International
Training Cooperation Organization (JITCO)(currently Japan International Trainee &Skilled Worker Cooperation Organization)(to the present)
Mar. 2020: Outside Director of the Company(to the present)

Mar. 1990: Joined New Japan Radio Co., Ltd.
(currently Nisshinbo Micro Devices Inc.)
Apr. 2005: General Manager of Accounting Department,
General Affairs Division of New Japan Radio Co., Ltd.
Apr. 2011: Managing Officer and General Manager ofCorporate Planning Department, General Administration
Headquarters of New Japan Radio Co., Ltd.
June 2012: Head of General Administration
Headquarters of New Japan Radio Co., Ltd.
Apr. 2014: Executive Managing Officer and Deputy
General Manager of Electronic Device Division of
New Japan Radio Co., Ltd.
June 2015: Director, Managing Officer and Deputy
General Manager of Electronic Device Division of
New Japan Radio Co., Ltd.
Apr. 2016: General Manager of General Administration
Headquarters of New Japan Radio Co., Ltd.
Apr. 2018: Director, Executive Managing Officer
and General Manager of Business Divisions of New
Japan Radio Co., Ltd.
Sept. 2018: Representative Director and Presidentof New Japan Radio Co., Ltd.
Mar. 2021: Managing Officer of the Company
Jan. 2022: Representative Director, Senior
Executive Managing Officer and General Manager
of Corporate Administration Headquarters of
Nisshinbo Micro Devices Inc.
Mar. 2023: Standing Auditor & Supervisory Board
Member (to the present)

Oct. 1992: Joined Deloitte Touche Tohmatsu
International (currently Deloitte Touche
Tohmatsu LLC)
July 1997: Joined Tadao Kato Accounting Office
Aug. 1999: Joined Taiyo Audit Corporation(currently Grand Thornton Taiyo LLC)
May 2000: Registered as Certified Public
Accountant (to the present)
Nov. 2002: Established Ichiba Certified Public
Accountant Office
Representative of the Office (to the present)
Aug. 2008: Registered as Certified Public Tax
Accountant (to the present)
Oct. 2008: Established UPRISE Certified Tax
Accountant’s Co.
Representative Partner of UPRISE Certified Tax
Accountant’s Co. (to the present)
July 2022 Supervisory Director of Ichigo Office
REIT Investment Corporation (to the present)
Mar. 2023: Outside Audit & Supervisory Board
member (to the present)

Deputy Chief of Corporate Strategy Center
Number of Company’s shares held: 16,865 shares
Board of Directors meeting participation:
Attended 16/16 meetings

Apr. 1988: Joined the Company
Apr. 2011: Managing Officer and General Manager
of Production of Friction Materials Division of
Nisshinbo Brake Inc.
Apr. 2013: Executive Managing Officer, Senior
Manager of Strategy Office (served concurrently),
and General Manager of Product Division (served
concurrently) and Engineering Division of Nisshinbo
Brake Inc. (served concurrently)
June 2013: Director and Executive Managing
Officer of Nisshinbo Brake Inc.
Jan. 2015: Director, Executive Managing Officer and Senior
Manager of Brake R&D Division of Nisshinbo Brake Inc.
Apr. 2015: Vice President and Director of Nisshinbo
Brake Inc.
June 2015: Managing Officer of the Company
June 2017: President and Representative Directorof Nisshinbo Brake Inc. (to the present)
Mar. 2019: Director and Managing Officer of theCompany (served concurrently, to the present)
Mar. 2023: Chairman and Director of Nisshinbo
Brake Inc. (served concurrently, to the present)
Deputy Chief of Corporate Strategy Center of theCompany (to the present)

48

Senior Manager of Finance, Accounting & IT
Service Department of Corporate Strategy Center
Board of Directors meeting participation:
Attended 16/16 meetings

Apr. 1986: Joined the Company
Jan. 2014: Senior Manager of Finance andAccounting Group of Finance, Accounting &IT Service Department of Business Support
Center of the Company
June 2015: Senior Manager of Finance,
Accounting & IT Service Department of
Business Support Center of the Company
Apr. 2018: Managing Officer and Senior
Manager of Finance, Accounting & IT Service
Department of Business Support Center of
the Company
Mar. 2020: Director and Managing Officer of
the Company (to the present)
Apr. 2020: Senior Manager of Finance,
Accounting & IT Service Department ofCorporate Strategy Center of the Company(to the present)

Number of Company’s shares held: 0 shares

Number of Company’s shares held: 0 shares

Number of Company’s shares held: 16,730 shares

Audit & Supervisory Board meeting
participation: Attended 15/15 meetings
Apr. 1979: Joined the Company
Apr. 2007: Managing Officer and Deputy General
Manager of Paper Products Division of the Company
Apr. 2009: Director, Managing Officer, General
Manager of Strategic Planning Department,
General Manager of Specialty Paper Division of
Nisshinbo Paper Products Inc.
June 2010: Managing Officer and Deputy
General Manager of Business Development
Division of the Company, Director and Senior
Executive Managing Officer of Nisshinbo
Chemical Inc.
June 2012: Vice President, Director of Nisshinbo
Chemical Inc.
June 2013: Director of the Company, General
Manager of Business Development Division of
the Company, President and Representative
Director of Nisshinbo Chemical Inc.
June 2016: Executive Managing Officer of the Company
Mar. 2019: Standing Auditor & Supervisory
Board Member (to the present)

Number of Company’s shares held: 15,245 shares

Number of Company’s shares held: 0 shares

Audit & Supervisory Board meeting
participation: Attended 15/15 meetings
Apr. 1988: Registered as an attorney-at-law(to the present), joined Tanaka & Takahashi
Law Office
May 2001: Joined Clifford Chance Law Office
May 2011: Joined K&L Gates LLP
Oct. 2014: Joined Sonderhoff & Einsel Law
and Patent Office (to the present)
Mar. 2019: Outside Audit & Supervisory
Board member (to the present)

Number of Company’s shares held: 0 shares

49

Data Section

Director and Managing Officer

Overview of Business Segments

Director and Managing Officer

Sustainability ̶ Board of Directors, Audit & Supervisory Board Members and Managing Officers

Expertise and Experience Required of Nisshinbo Directors (Skill Matrix)

Managing Officersof expert perspectives, and incorporating diversity into the Board of Directors enables Nisshinbo to
realize highly effective governance.

Skill

*

Name

Management
experience

International
experience andknowledge

Businessand industry
knowledge●●

Takeshi Koarai●●

President

Masahiro
Murakami*
Senior Executive
Managing Officer

ESG

Technology andinnovation

Legal and risk
management

Finance andaccounting

Takeshi Koarai*
Executive Managing Officers●●

Satoru Taji*

Kazunori Baba*
Managing Officers

Yasuji Ishii*●

Executive Managing Officer

Makoto Sugiyama

Value Creation

Masahiro Murakami

ProfileSelecting the skills required for directors to supervise and guide various businesses from a variety

Senior Manager of
Sustainability Development
Department and Human
Resources and Administration
Service Department,
Corporate Strategy Center

Shuji Tsukatani*●●

Kazunori Baba●●

Yasuji Ishii●●

Keiji Taga

●

●

●

●

●

●

●

●

●

●

Managing Officer

Managing Officer

President,
Nisshinbo Mechatronics Inc.

Managing Director,
Nisshinbo Singapore Pte. Ltd.

Toshihiro Masuda●

Hiroaki Yagi

Naoko Tani●

*Concurrent board member●

President,
Nisshinbo Textile Inc.

President,
Nisshinbo Chemical Inc.

Managing Officer

Managing Officer

Ikuo Takahashi

●

●

●

●

Nobuyuki Adachi●

General Manager, Business
Development Division●●

Makoto Ashida

General Manager of Legal
Affairs Group, Human
Resources and Administration
Service Department,
Corporate Strategy Center

Yasuki Hattori
President,
Nisshinbo Brake Inc.

Data Section

Yuki Ikuno●

Managing Officer

Kaoru Murata●

Managing Officer

Richard Dyck

Managing Officer

Kazuo Saito

Overview of Business Segments

Shuji Tsukatani●●

Sustainability

Satoru Taji

*Up to four major skills are listed for each Board member. Not all skills are represented.

50

51

At a Glance
The Nisshinbo Group is made up of seven distinct businesses—Wireless and Communications,
Micro Devices, Automobile Brakes, Precision Instruments, Chemicals, Textiles and Real Estate. Nisshinbo
supplies high-value-added products that meet customer needs, driven by innovation born out of thebusiness collaboration and portfolio reorganization that has kept the Group aligned with changing needs.

Others¥10.8 billion 2.1%

Wireless and Communications¥150.3 billion 29.1%

Real Estate¥11.1 billion 2.2%

Japan Radio Co., Ltd.
The Wireless and Communications business supplies communication and navigation equipment with world-leading reliability
to users in the shipping sector. It also provides various disaster prevention systems, such as dam and river management

Net Sales

TextilesMicro Devices¥516.0 billion¥85.3 billion

Period ended( December
2022 )

Chemicals¥12.6 billion 2.5%

systems and weather forecasting systems. In addition, JRC Mobility Inc., which was established in 2018 to develop the

16.5%

Group’
s business in the mobility field, provides ITS* products and other existing automotive and commercial wirelessValue Creation¥38.3 billion 7.4%

products, and is pushing ahead with new products that will help realize autonomous driving.
*Intelligent Transport Systems: Systems that use data processing technology to solve traffic issues such as accidents and congestion

Automobile Brakes

Precision Instruments¥153.6 billion 29.8%¥53.6 billion 10.4%

Wireless and Communications

Wireless andCommunications

ProfileNet Sales Composition by Segment

Overview of Business Segments

Related SDGs

▶︎ P.18 Key Business Growth Strategy: Wireless and Communications

P.53

Main business areas

Engages in the solutions business (including disaster prevention systems andweather radar), as well as marine systems and mobility businesses.

Sustainability

Marine systems ▶ Marine radar and communications equipment
Solutions and specialized equipment▶ Disaster prevention systems and weather radar
ICT and mechatronics ▶ Power supplies, large-format copiers
Medical equipment ▶ Probes for ultrasound diagnostic equipment, oscillators for catheters
Mobility ▶ GPS receivers, ITS equipment for vehicles

Micro Devices

Chemicals

P.56

Main business areas

Main business areas

analog semiconductors and other

Semiconductor devices, SAW filters andpower management ICs, etc.

electronic devices, supported by
microelectronics technologies.

P.59

The Nisshinbo Group is the world’s
Friction materials▶ Disc pads and brake linings

global supplier using its network

52

Bipolar plates for fuel cells
Fine carbon products

Shirts▶ Dress shirts, casual shirts and fabrichigh-quality“Made by Nisshinbo”
dress shirts, uniforms and other

Real Estate

Textiles▶ Uniform fabric and casual fabric

P.67

Data Section

P.61

Main business areas
Manufactures molding products forhome appliance and automotive
applications and supplies
processed precision automotive
parts and customized production
equipment for customers
worldwide, primarily in Asia.

made from natural cotton; supplies

products to markets worldwide.

covering key markets worldwide.

Precision Instruments

Thermal insulation products

P.65

Mainstay business is products

leading maker of brake friction
expanding its presence as a true

TextilesCarbodilite high-performance chemical additive

Main business areas

Main business areas

materials by market share; now

Manufactures a range of highly
promising products in theenvironmental and energy fields,such as Carbodilite, a modifier
for biodegradable plastics andwaterborne resins, and bipolar
plates for fuel cells.

Overview of Business Segments

Working to expand sales ofAutomobile Brakes

P.63

Main business areas
Molding products
Precision parts processing including parts forelectronic brake systems (EBS)
Customized production equipment

Procures funds to support the
Nisshinbo Group’s growth strategy

Sales▶ Housing lots

by effectively utilizing idle plantsites and other real estate assets
arising from business restructuring.

Leasing▶ ARIO Nishi Arai and other properties53

Overview of Business Segments ̶ Wireless and Communications

Business Results and Strategy
Summary of Financial Results for 2022

operation, and focus efforts on the promotion of Smart Ship content

for global market share expansion by accelerating overseas

in lower sales but higher profit.

development, while expanding sales of offshore wind power

development that includes the cultivation of overseas customers.

In mobility, although overseas commercial wireless salesof ¥150,393 million (down 1.8% year on year after reclassification),

remained strong, sales and profit declined due to lower

and segment profit of ¥4,821 million (down 34.1% year on year

automotive intelligent transport system (ITS) sales resulting fromafter reclassification).
In solutions and specialized equipment, despite higher sales of
airport control simulators, wireless telephone equipment, and othersystems businesses.

information systems in line with the tight supply and demand for

To enhance profitability, we are promoting business portfolio
reforms based on three policies: allocating resources to highly

We will provide value-added onboard equipment that contributes

profitable business areas, taking on the challenge of new businesscustomer production adjustments.

to safe, secure and efficient vessel operations, jointly develop content

layers and increasing the ratio of independently developed products.

Note: In year-on-year performance comparisons, 2021 performance uses
converted values based on new profit recognition standards.

realizing Smart Ship services, and provide functionality and systems

We aim to generate profits through cost structure reforms andfor autonomous and automated vessel operations, which will become

efforts to enhance operational efficiency through the introduction ofeven more necessary in the future.

a new backbone system, DX at all production bases, labor-saving

aerospace and meteorological systems, sales declined due to fewer
large projects for road information systems and water and rivergeneration equipment–related solutions and developing other marine

ProfileIn 2022, the Wireless and Communications business reported sales

security equipment combined with efforts to contain costs resulted

Medium- to Long-Term Business Strategy

J-Marine Cloud, which provides marine data services, is justone example of these efforts. J-Marine Cloud acquired“Innovationand the promotion of supply chain and logistics reforms, as well as
production equipment upgrades to increase productivity.

In the Wireless and Communications business, we are making efforts

Endorsement”certification from the Nippon Kaiji Kyokai (ClassNK)

and upgrades associated with new spurious standards for wirelessto strengthen profitability through business transformations. We will

as an innovative initiative contributing to maritime DX, and we

Medical Equipment

devices. In addition to the impact of lower sales, higher expenses

carry out business portfolio reforms, thoroughly identify and dispose

expect the use of this service to expand in the market going forward.

In medical equipment, we will take on the challenge of developing

related to personnel and experimentation and research resulted inof low-profit businesses, and shift toward high-profit businesses,

Furthermore, to promote advancements in marine mobility, Nisshinbo

unique, needs-oriented products and create a corporate structure

significantly lower profit than in fiscal 2021.

while implementing cost structure reforms and creating innovation

also participates in the University of Tokyo social collaboration

with potential for growth and profitability through enhanced

and business transformations through the use of digital technologies.

course“Maritime and Ocean Digital Engineering.”This initiative

marketing capabilities. In terms of growth strategy businesses, in the

Furthermore, we will take on the challenge of collaborations, co-aims to ensure productivity and improve reliability in the design andfield of portable ultrasound diagnostic equipment, we are focusing

and other small and medium-sized vessels, as well as land-based

creation, demonstration experiments and other initiatives with

development process of increasingly sophisticated vessels and land-

efforts on improving our ability to develop original products, including

radio equipment for fisheries and other systems.

business partners through the proactive use of data and DX whilebased support systems.

the expansion of Handy Echo system offerings, while developing

In marine systems, sales and profit increased due to strong
sales of equipment for new-build vessels, European workboats,

In ICT and mechatronics, despite flagging demand for payment
terminals and other ICT products, sales and profit remained on parwith fiscal 2021 due to higher demand for office equipment overseas.

Marine Systems
In terms of a global growth strategy in marine systems, we will

Additionally, in transitioning to a stable profit structure, we aim tobusiness through independently designed products. In the fields ofgenerate profits by improving operational efficiency through digital

prevention, prognosis and medical systems, we are expanding thetechnologies and enhanced sales and service capabilities.

digital healthcare business by enhancing the functionality of systems,
including those used to monitor people in need of nursing care.

ultrasound diagnostic equipment and analysis equipment declined

improve profitability in the commercial vessels segment, increase

Solutions and Specialized Equipment

in line with tight electronic component supplies and demand,

market share in the small and medium-sized vessels segment,

To steadily capture demand in existing businesses and expand

we are focusing efforts on creating business opportunities throughlaunch sales of system equipment leading to autonomous vessel

our business domain in government offices, private demand andthe proactive promotion of ODM and the ongoing provision of high-overseas business fields, we aim to enter adjacent fields and markets

value-added products.

changes to the sales mix and higher sales of transducers andFurthermore, in our mainstay medical analysis equipment business,

Sustainability

In medical equipment, although sales of general-purpose

aiming to provide solutions that are truly valuable to customers.

Value Creationelectronic components, as well as subdued demand for compliancethrough alliances and M&A. In aiming for business domain expansion,
Sustainability Initiatives

In the Wireless and Communications business, Nisshinbo contributes to disaster prevention and mitigation through the provision of
weather radar, management systems for dams and rivers, and other solutions in response to increasingly severe disasters caused byclimate change. We will continue leveraging our extensive track record and proprietary wireless and communications technologies tobecome a true solutions vendor that provides security and safety to society.

5G and LTE Initiatives

Plan for National Resilience, we will utilize ICT and IoT for river

In Japan, business utilizing data based on IoT infrastructure isbasin management measures and aging infrastructure and facilities
countermeasures that include strengthening observation systems
and improving the accuracy of forecasts for torrential rains and other
weather events. We will utilize robotics and drone technologies;
make efforts to enhance the provision, collection and communicationof evacuation-related information through smart devices; enter the
infrastructure maintenance business through the promotion of DX

Net Sales(millions of yen)Segment Profit

22.12

21.12 (reclassified)

22.12

Marine systems

33,15935,844

Marine systems

797

1,633

Solutions andspecialized equipment

70,122

68,989

Solutions andspecialized equipment

5,053

3,227

ICT and mechatronics

23,08423,000

ICT and mechatronics

149

260

Medical equipment

7,645

6,552

Medical equipment

103

354

Other businesses

4,615

4,286

Other businesses

793

98

JRC Mobility

17,528

14,629JRC Mobility

587

(593)

(168)

(158)

7,314

4,821

Eliminations, retirement benefits
and other adjustments(3,023)(2,908)Eliminations, retirement benefits
and other adjustments

Total

153,130

150,393

Total

54

and IoT. Furthermore, we will focus efforts on effectively expanding
business and enhancing profitability by strengthening cooperation
with Group companies and partner companies while attempting toincrease efficiency through the digitalization of all business process
operations.

ICT and Mechatronics
In the ICT business field, we aim to expand business in new layers

to grow significantly. We will further expand business by leveraging
experiment verifications using Japan Radio Co., Ltd. Nagano Plant
local 5G radio stations, joint research with customers and knowhow acquired through onsite demonstration experiments to provide
total solutions creating high customer value leveraging our strength ininfrastructure wireless technologies.
Overseas, we are developing private LTE mainly in the public
safety domain focused on Europe and the United States. Goingforward, we will strive to expand this business while developing
measures aimed at increasing customers involving the use of overseas
and other bases with a focus on 5G business developments. We
will further expand business by providing sophisticated and optimal
solutions that include LTE-Box and high-quality video call applications
that meet customer needs.

Data Section

21.12 (reclassified)(millions of yen)business; and establish an information services business utilizing ICT

expanding substantially, while the use of local 5G is also expected

Overview of Business Segments

Provision of Disaster Prevention Solutions

based on the Five-Year Acceleration Measures for the Fundamental

and new domains by developing communication equipment products
for next-generation smart meters and IoT environment monitoring
systems. In the mechatronics business field, we aim to acquire
new business opportunities by promoting the commercialization ofsmart factories and digging deeper into our customer base. In thecomponents business field, we will focus on solidifying the foundation

55

Overview of Business Segments ̶ Micro Devices

Business Results and Strategy

Micro Devices

Summary of Financial Results for 2022

Medium- to Long-Term Business Strategy

In 2022, the Micro Devices business reported sales of ¥85,329

Under the themes of promoting competitive electronic device

million (up 11.2% year on year after reclassification) andbusinesses and expanding the microwave business and profit

segment profit of ¥8,947 million (up 113.4% year on year aftergeneration, Nisshinbo Micro Devices Inc., will strengthen existing

reclassification).

base businesses while attempting to develop higher value-added

Nisshinbo Micro Devices Inc.
In the Micro Devices business, Nisshinbo has created new value in audio equipment, automotive and industrial devices, ICT
and other fields, drawing on its competitive advantages in analog semiconductors and microwave technologies. In January2022, a merger was concluded between the former New Japan Radio Co., Ltd., and the former Ricoh Electronic Devices

The global business environment remained uncertain withsignal processing and power module products. Furthermore, wesoaring resource prices due to the situation in Ukraine, rising

will offer new analog solutions by increasing the quality of analog

inflationary pressures, and sharp exchange rate fluctuations, while

semiconductors, microcontrollers and other hardware, as well as

supply chain disruptions resulting from China’s zero-COVID policy

the software and AI that control them, as we pursue the provisioncaused a widespread slowdown in market conditions.

of value to customers.

As a result, in the mainstay electronic device business, theend of pandemic-related stay-at-home demand and a sluggish

Merger Synergies

equipment and healthcare.

consumer market caused a slowdown in sales of smartphones,

In the first year of the merger, we are making steady progress

Related SDGs

PCs, white goods and other consumer products. At the same time,in reaching new customers through cross-selling. In terms of

demand remained high for automotive and industrial equipment

development, the technological strengths possessed by bothproducts, especially in the U.S. and Chinese markets, due to global

companies have created an efficient development flow facilitating

semiconductor shortages. Sales of products for EV power supplies

the steady development of products providing new customer

and sensors, semiconductor manufacturing equipment, battery-value. Through personnel exchanges between the two companies’

related and other production equipment expanded.

production sites, the sharing and implementation of improvementcompanies to create new, high-value-added products and solutions businesses in the areas of automotive CASE, industrial▶︎ P.22 Key Business Growth Strategy: Micro Devices

case studies has also effectively led to business performance

were affected by delays in the provision of electronic components

contributions from the perspective of production. Furthermore,

and longer lead times, recovery efforts including the buildup

we are promoting a shared definition of the“Quality NISD”brandof parts inventories, the securing of alternative procurement

throughout the Company and the creation of a system facilitatingroutes and the shortening of construction schedules, as well as aquality education, QMS and customer support that integrates

loosening of tight supply and demand conditions, led to a recovery

quality know-how accumulated by both companies up to now.

in production from the second half of the fiscal year. In electron
tube and radar-related products, demand for replacements of2023 Semiconductor Market Outlook

vessel maintenance parts and OEM sales grew steadily, as satellite

The semiconductor market as a whole is expected to slow down

communication–related product sales to South Korea and North
America increased substantially.
and energy costs, the impact of the weaker yen combined with thesteady progress of efforts to pass on costs resulted in significantly
higher operating income.

in 2023. Although demand for analog semiconductors, which
account for the majority of our electronic devices, is expected toremain relatively firm, we will take measures to anticipate changes
in demand, eliminate order backlogs caused by the inability of
production to keep pace with demand, expand new sales andadjust selling prices.

Note: In year-on-year performance comparisons, 2021 performance uses
converted values based on new profit recognition standards.

Net Sales
21.12 (reclassified)

22.12

Nisshinbo Micro
Devices (former New
Japan Radio)

50,72486,543（former Ricoh Electronic
Devices）

27,748—Eliminations, goodwill
amortization, etc.

(1,713)

Total

76,759Segment Profit(millions of yen)

21.12 (reclassified)

22.12

Nisshinbo Micro
Devices (former New
Japan Radio)

2,799

9,189

（former Ricoh Electronic
Devices）

1,665—(1,214)

Eliminations, goodwill
amortization, etc.

(271)

(242)

85,329

Total

4,193

8,947

Data Section

56(millions of yen)

Overview of Business Segments

Although both businesses were affected by surging raw material

Sustainability

In the microwave business, although procurement activities

Value Creation

Co., Ltd., resulting in the creation of Nisshinbo Micro Devices Inc. Nisshinbo will combine the technologies held by both

ProfileOverview of Business Segments

57

Overview of Business Segments ̶ Micro Devices

Electronic Devices

we will strengthen the production and sales matching system throughIn electronic device products, we will focus on signal processing (SP)fixed order manufacturing management, reduce inventories and operate

and energy management (EM).
The signal processing IC includes sensor product lines that will
combine signal processing ICs with microwave sensors while aiming
to provide modules and even solutions from conventional single IC
provision. With EM, a power control system IC required for a wide range
of devices, we aim to develop high-value-added power module products
such as PMIC and IPM for power supply control system ICs amid risingdemands for low power consumption and highly precise functions.
Targeting a wide range of markets, including automotive, industrial
equipment and consumer products, we will strengthen the planningand development of customer-oriented, high-performance ASIC andconsumer products, we provide products including touchless sensors
that facilitate the societal changes necessitated by COVID-19. We will
also accelerate planning and development to expand the market forelectronic stethoscopes and other products in the healthcare field. In
this way, we will establish a stable business portfolio through the wellbalanced expansion of products in these four markets.
To improve profitability, we will reduce production outsourcing
costs. In the wafer process (pre-process), we will mass-produce 0.18μm
CMOS achieving miniaturization with a high withstand voltage process
at the Yashiro Plant (Hyogo Prefecture) and going forward, promote
process (post-process), we will proceed with in-house testing andassembly of products manufactured at subsidiaries in Saga Prefecture
and Thailand, while expanding the use of low-cost outsourced
semiconductor assembly and testing (OSAT) overseas. Furthermore,

profitability by improving production efficiency. We will also makeefforts to increase sales by creating an increased production system forelectron guns, which are in high demand. In satellite communication
components, we will strive for stable production of transmitter andreceiver products for VSAT (small ground station) system terminals,
which are performing well. Furthermore, we will upgrade existingproduct models, develop high-power transmitters for base stations
anticipated to have high added value and develop new markets.
In microwave sensors, we will launch sales of millimeter-wave
band (60 GHz) products. We will also accelerate the developmentof easy-to-use sensors compatible with IoT, including integration
with electronic device packaging technologies, composite sensor
technologies combined with other sensors, and control and signal
processing technologies to extract required data from signals andreduce power consumption. We will respond to a wide range ofcustomer requests by enhancing our technical capabilities to support
the design and development of systems using sensors.
Despite some signs of improvement in parts procurement, supply
conditions remain unstable. In expectation of further procurement
difficulties, we will enhance parts procurement capabilities based on a

Nisshinbo Brake Inc.
Nisshinbo is a global supplier with world-class development capabilities in the field of friction
Brakes business is to address the specific requirements of each market and customer with threebusinesses—Nisshinbo Brake, TMD Friction Group and Saeron Group—aiming to meet global
automaker needs for optimum parts procurement as the world’s leading friction materials company.

parts procurement strategy focused on market trends that will lead tostable production. Furthermore, we will enhance price competitivenessby expanding production at our Thailand subsidiary, which will lead toexpanded sales.

Business Results and Strategy
Summary of Financial Results for 2022

Sustainability Initiatives

In line with Nisshinbo Group medium-term environmental targets, the Micro Devices business targets a 38,000-ton reduction in GHG
emissions by 2030. In the first year of the merger, we attempted to proactively promote mutual personnel exchanges and opened an
NSID Farm near the Kawagoe Plant, creating a work environment where people with disabilities can work comfortably in an effort topromote the employment of people with disabilities.

In 2022, the Automobile Brakes business reported sales ofand assembled products businesses in response to the sharp rise in¥153,643 million (up 11.8% year on year after reclassification) andraw material costs in Europe. However, skyrocketing inflation, along

segment profit of ¥4,664 million (a deterioration of ¥7,637 million

with tight energy supply and demand caused by the situation incompared with the previous fiscal year after reclassification).

Ukraine led to a significant increase in losses.

Global automobile production, which significantly affects theAutomobile Brakes business, experienced a mild recovery in

Note: In year-on-year performance comparisons, 2021 performance uses
converted values based on new profit recognition standards.

2022 despite additional impacts from the situation in Ukraine and

Key Products

China’
s zero-COVID measures due to a partial easing of automotive
semiconductor shortages. However, the price of steel and other raw
materials and energy costs continue to rise in several regions.
Under these conditions, Nisshinbo Brake Group sales increased
and its market share improved due to a recovery in orders from
Electronic devices

Microwave products

major customers and new orders for copper-free (less than 0.5%)
friction materials. However, soaring raw material and energy costs

Industrial equipment products

Satellite communication system

The number of ICs per vehicle continues to increase

Nisshinbo has a diverse lineup of products toamid the shift to vehicle electrification and advances

meet customers’needs: operational amplifiers

components

in autonomous driving technology. ICs are now

that play a key role in improving the sensing

needed for a growing array of applications, from car

precision of encoders, which support movement

audio to power control units, which support basic

in industrial robots; PMICs that support stable,

vehicle functions, electric power-assisted steering

low-noise operation of various industrial

and battery management systems, as well as

equipment; and analog front-end ICs that

sensors that are integral to parking assist systems,

optimally integrate industrial equipment functions.

collision avoidance and prevention systems and

VSATs* are satellite ground stations that play a
crucial role in satellite-based Internet connectivity,

put downward pressure on profit, with profit declining at Chineseand South Korean subsidiaries that manufacture products forJapanese, U.S. and Japan-affiliated customers. Even so, profitability
recovered at our China subsidiary, which manufactures products

data transmission and telephony. New Japanfor South Korean and North American customers, while profit atRadio is Japan’s only supplier of key components

our subsidiary in Thailand remained on par with fiscal 2021 due tofor VSATs and one of only a handful of suppliers
worldwide. It has the top share in the global
market.
*Very Small Aperture Terminals

a recovery in automobile production in the ASEAN market. We arenegotiating with customers to pass on cost increases through sales
prices.

Medium- to Long-Term Business Strategy
Market Environment and Business Strategy
Global automobile production has not yet returned to pre-pandemic
levels, but there were signs of improvement in the shortage of
automotive semiconductors in some regions beginning in thesecond half of 2022, and operations of automobile manufacturers
are expected to gradually return to normal. Despite concerns that
automobile demand might decline due to economic slowdowns andother factors, we might further sales growth in this business throughthe launch of copper-free friction materials, and have received neworders for these products in Japan, the United States and China.
To expand sales of copper-free friction materials, we will optimize
our global production system and make capital investments
while monitoring actual orders. In anticipation of labor shortages,
particularly in developed countries, we will also proactively
59

Data Section

Automotive products

58

The TMD Group, for which Europe is its main market, increased
sales with aggressive price pass-throughs in both the aftermarket

Overview of Business Segments

Climate and D&I

autonomous driving.

Related SDGs

materials, which are key components in automobile brake systems. Our strategy in the Automobile

Sustainability

the in-house production of high value-added products. In the assembly

In electron tubes and radar components, we will attempt to increase

Automobile Brakes

Value Creation

ASSP products for automotive and industrial equipment applications. In

Microwave Products

Profileexpand markets for operational amplifiers and IoT. We will attempt to

production management systems efficiently.

Overview of Business Segments

Overview of Business Segments ̶ Automobile Brakes

with excellent noise and vibration suppression during braking.

Company has decided to integrate its three Chinese subsidiaries

Anticipating changes in demand for friction materials due to thein order to address operational risks associated with strengthened

way automobiles will be used going forward, Nisshinbo is focusing

environmental regulations and to streamline operations. Moving

efforts on the research and development of products that are highly

forward, the company will promote rationalization through thecompatible with electronically controlled braking.

transfer of functions and equipment, among other measures.
At the same time, in the aftermarket business where the TMD

In product development, we are working to improve productand digitalization, incorporating a new PDCA cycle with data-driven

production systems. In the assembled products business, where

R&D using AI into development. To support these efforts, we have

we have been formulating a business revitalization plan, production

launched an educational program to cultivate human resources withat plants in France and Leverkusen was terminated in 2022,

digital skills with data scientists at the top.
Furthermore, we are setting our own targets for achieving
zero CO2 emissions by 2050 while engaging in the research andcost competitiveness through the promotion of optimized local

development of materials and manufacturing processes. Throughproduction utilizing the Romania plant, among other efforts.

internal Nisshinbo Group collaborations, we are also promoting

downward pressure on profits, Nisshinbo Brake Inc. and the TMD
Group will continue firmly negotiating with customers to pass on
cost increases through sales prices.

research on undercarriage sensing focused on vehicle safety andautonomous driving.

regional characteristics and level of each base, we have recently

In addition to existing efforts promoted in accordance with thematerials, thus we expect demand for repair parts to decrease in
the long run. On the other hand, parts for new passenger cars must
be durable enough to withstand long-term use, realizing stablebraking force through coordination with electronically controlled
regenerative braking. In addition, in response to the enhanced

begun promoting DX initiatives incorporating improvement activities.
Efforts focused on automation and labor-saving in manufacturing
processes, efficient production management using ICT and IoTtechnologies, visualization of facility operation status and predictive
facility maintenance, and quality control using AI cameras havebeen successful in increasing profitability and improving productquality. We are cultivating a Company-wide culture of improvementby sharing knowledge gained at each base through regularimprovement activity presentations.

Business Results and Strategy
Summary of Financial Results for 2022

the automotive field caused by a shortage of semiconductors andIn 2022, the Precision Instruments business reported sales of

unprofitable businesses, which began in 2021. As a result of these¥53,655 million (up 13.3% year on year after reclassification)

factors, sales and profit increased in the molding products business.

and segment profit of ¥776 million (up 16.4% year on year after

Note: In year-on-year performance comparisons, 2021 performance uses
converted values based on new profit recognition standards.

reclassification).
In precision parts for automobiles, despite higher sales driven
by firm orders for electronic brake systems (EBS), an increase indepreciation and amortization and other expenses held profit tosilence of the vehicle, there are demands for high-quality products

the same level as in fiscal 2021. Following the launch of mass
vehicle electrification and autonomous driving, the mass production
and sales of MKC2, an even smaller and lighter version of thissame product, started off strong. In September 2022, Nisshinbo

Copper-free Friction Materials

Comprehensive Precision Machining (Gurgaon) Private Ltd. was

In the United States, where environmental regulations are being tightened, the sales and assembly in new vehicles of friction material

established as a joint venture with Continental AG (Germany) to

products containing more than 0.5% copper content will be prohibited from 2025 onward. Copper-free (less than 0.5%) friction

manufacture and sell EBS valve blocks in Gurugram, India. This

materials, which Nisshinbo Brake Inc. has been developing for some time, have garnered a strong reputation among auto manufacturers
and are gaining market share on the back of an increase in new orders.

new company is making concerted efforts to prepare for the startof mass production in the fourth quarter of 2023. At Nisshinbo
Precision Instrument & Machinery Hiroshima Corporation, despite

Net Sales
21.12 (reclassified)

22.12

48,94856,701

Segment Profit

Nisshinbo Brake(millions of yen)

21.12 (reclassified)

22.12

3,206

2,072

TMD

93,332104,058

TMD

(223)

(6,566)

Eliminations, etc.*(4,825)(7,116)

Eliminations, etc.*

(10)

(170)

Total

137,455

153,643

Total

2,973

(4,664)

manufacturer diesel engine exhaust shutter valves and exhaust gas
circulation valves, profit declined due to an increase in depreciation
and amortization expenses and manufacturing costs.
In molding products for automobiles and air-conditioning
equipment, Chinese government mandated lockdowns in Shanghai
led to significantly curtailed operations at our bases in China, while
semiconductor shortages and other factors led to lower sales in theBusiness/Product Identification and Closeout
The Nisshinbo Mechatronics Inc. molding products businessand Nanbu Plastics Co., Ltd., are optimizing production bases toefficiently capture global demand leading to the realization of higher
profits. In the molding products business, we are implementing strict
cost management to identify unprofitable products and intensify
cost-reduction activities, advancing reasonably priced proposals tocustomers to improve profitability.
With the aim of liquidating unprofitable businesses, the Nanbu
Plastics Group has filed independent legal debt restructuring
procedures stipulated by local laws at its Indonesian subsidiary,
where production was terminated in 2021 and liquidation of thecompany is in process. The Nanbu Plastics Group Guangzhou
subsidiary in China also terminated production in March 2022 andcompleted liquidation procedures in December that same year.
The Nanbu Plastics Group will continue to identify and dispose of
unprofitable businesses, allocating management resources to highvalue-added businesses and improving profitability.

automotive field. However, home appliance–related product orders
increased at bases in Japan, Thailand and India. The Nanbu Plastics
Group saw firm demand in the healthcare and housing equipment
fields, but sales fell sharply due to customer production cutbacks in*Including amortization of intangible fixed assets at TMD

60

61

Data Section

Nisshinbo Brake(millions of yen)higher sales driven by the launch of mass production of auto

Medium- to Long-Term Business Strategy
Overview of Business Segments

production in 2021 of the next-generation model MKC1 supporting

Sustainability Initiatives

other components. Steady progress was made toward reorganizing

Sustainability

system that reduces wear on conventional mechanical brake friction

precision metal parts processing for the automotive sector and parts molding and processing for thedevelop these businesses globally, centered on Asia.

Plans are under way for electrification and autonomous driving‒energy (regenerative braking) when braking by using an electric drive

Related SDGs

to meet the specific needs of customers. We work closely with subsidiary Nanbu Plastics Co., Ltd., to

Improvement Activities and Efforts toEnhance CompetitivenessGlobal improvement activities are the foundation of management.

manufacturers. HEVs, BEVs and other electric vehicles accumulate

Utilizing various areas of expertise accumulated over more than 70 years, this segment is focused on
automotive and home appliance sectors. The segment also makes customized production equipment

Toward the Spread of Electrification
and Autonomous Driving
related next-generation vehicles and new brakes at finished vehicle

Nisshinbo Mechatronics Inc.
Value Creationtransferring products to other plants. We will continue to enhance

Although soaring raw material and utility costs are putting

Precision Instruments

performance and efficiency through further advances in simulation

Group operates, we will continue to strategically strengthen

and we have made progress toward integrating production by

Overview of Business Segments

Profilemake investments related to automation and labor saving. The

Overview of Business Segments ̶ Precision Instruments

Expanding the Automotive EBS Valve Block BusinessIn the Mobility domain, we will accelerate the development of

In 2015, Nisshinbo Mechatronics and major German automobile

molded products with integrated wiring functions combining In-Moldparts manufacturer Continental AG established NisshinboContinental Precision Machining (Yangzhou) Co., Ltd., in Jiangsu
and sales of EBS valve blocks. In September 2022, a new joint
venture was established in Gurugram, India, to expand productionof automobile EBS valve blocks. In India, where the economy isgrowing rapidly, the production of automobiles and motorcycles is
expanding, and the demand for EBS is expected to grow. Throughour partnership with Continental AG, we will continue to work

technologies.
In the Life & Healthcare domain, we will develop and launch
new products using super engineering plastics offering excellent

ChemicalsProfileProvince, China, and have steadily increased the production

Printed Circuits (IMPC®) based on injection molding and electronics

Overview of Business Segments

biocompatibility and other properties, as well as products that
contribute to preventive, prognostic and regenerative medicine in
the healthcare field. In the home appliance and housing equipment
field, we will develop fans for air-conditioning equipment and highly
airtight and insulated window frames for comfortable living spaces

Nisshinbo Chemical Inc.

and energy conservation.

Accelerating New Product Developments andMarket Launches

new businesses by developing products for a sustainable society,this segment is working to develop products that help protect the environment andincluding renewable energy and social infrastructure.

make life more comfortable. Our environment- and energy-related products include

In the Infrastructure & Safety domain, we will work to create

Drawing on a broad base of expertise and intellectual property in the chemical field,

Accelerating new product developments and market launches is anbipolar plates for fuel cells and Carbodilite, a functional material that increases

important focus of Nisshinbo’s efforts.

the durability and chemical resistance of biodegradable plastics and water-based

Related SDGs
Value Creation

toward the development of this business.

resins, which have minimal environmental impact. We are prioritizing the investmentof management resources in these promising growth areas.
Sustainability Initiatives

Increasing the Sales of Sustainable Products and Reducing GHG Emissions to Achieve the SDGs

Business Results and Strategy

In the Precision Instruments business, we are promoting awareness programs for employees to facilitate understanding anddissemination of the SDGs through the identification of materiality and the formulation of priority action items. Additionally, we seewind power generation–related components and the machine tool business for CFRP materials as growth opportunities, and areenvironmental KPI targets.

communications, cloud services and telework, as well as growth

In 2022, the Chemicals business reported sales of ¥12,673 million

manufacturing equipment due to supply chain reorganization(up 13.7% year on year after reclassification) and segment profit ofefforts triggered by semiconductor frictions between the United¥2,181 million (up 4.9% year on year after reclassification).

States and China. In the second half of the year, concerns of a

In bipolar plates for fuel cells, amid a surge in global fuel cell

Net Sales(millions of yen)Segment Profit

22.12

Precision parts

12,446

16,259Precision parts

Molding products

39,092

41,871

Molding products

Eliminations, etc.
Total

(4,161)47,377(4,475)53,65521.12 (reclassified)

Eliminations, etc.
Total

22.12

223

158

1,257

1,465

(814)
666

(847)
776

conditions in Ukraine and accelerating global inflation.

sales increased on expanding demand for fixed applications

Note: In year-on-year performance comparisons, 2021 performance uses
converted values based on new profit recognition standards.

overseas. At the same time, profit declined due to the developmentof manufacturing technologies focused on the mass production of
in-vehicle applications.
In functional materials Carbodilite, although the impact of soaring
chemical raw material, transportation and energy costs amid

Enhancing Production Capacity and Accelerating
Development of Fuel Cell Separators

was minimized by passing on costs, changes in the product mix

As the global movement toward carbon neutrality accelerates,

resulted in higher sales and lower profit. Amid global efforts toaddress environmental issues, sales of waterborne cross-linking
agents for food packaging materials, adhesives and other agents.
Sales of pulverized modifiers for biodegradable plastics declined
due to a downturn in the European market, where the outlook has
become increasingly uncertain because of the situation in Ukraine.
In thermal insulation products, despite the impact of skyrocketing
material costs amid a decline in bio-carriers for wastewater
engineering projects due to shrinking public budgets and difficulties
in the global procurement of chemical industry products, sales andincome increased on expanded orders for undiluted solutions in linewith increased demand for prefabricated refrigerators, clean rooms,
exterior wall materials and other products.
Sales and profits of glass-like carbon products increased amid

Automotive headlight components

62

Fans for residential andcommercial air conditioners

growing semiconductor demand driven by the spread of 5G

fuel cell demonstration experiments are expanding for a variety
of applications. Nisshinbo continues to receive a substantial
number of inquiries, especially for fixed applications such as
power supplies for use during emergency and normal operations.
We are also working with several leading manufacturers todevelop bipolar plates for fuel cells in automotive and otherapplications. In addition, we have recently received inquiries formarine applications and are working on development with aleading manufacturer. The 2022 decision to expand the plant andinstall a new line is proceeding as planned, and in 2023, we havecommenced full-scale preparations for building construction andequipment installation. In preparation for the commercializationof in-vehicle and in-vessel applications and the coming increasein demand, we will focus on the automation of production
processes and the development of next-generation products while
establishing a mass production system and reducing costs.

63

Data Section

treatment at properties in Japan and overseas, fewer civil

Automotive EBS
valve block

Medium- to Long-Term Business Strategy

difficulties in the global procurement of chemical industry products

agents increased in line with the solid performance of coating

Key Products

market slowdown increased against the backdrop of deteriorating

development driven by the movement toward carbon neutrality,

Overview of Business Segments

21.12 (reclassified)(millions of yen)in orders of parts comprising capital investment in semiconductor

Sustainability

promoting various activities that include increasing the sales ratio of sustainable products and reducing GHG emissions to achieve our

Summary of Financial Results for 2022

Overview of Business Segments ̶ Chemicals“Carbodilite”Functional Materials
Contributing Solutions to Environmental Issues

products that enable the extension of track maintenance work

Environmental awareness is growing globally in the face of marine

cycles, as well as orders for large overseas properties.

In the anti-vibration field, we will work to increase orders forIn the water treatment field, in Asia, we will promote a

caused by volatile organic chemical substances (VOCs) and other

differentiation strategy in the Chinese market leveraging theenvironmental challenges. Demand for Carbodilite is rising as aadvantages of Japanese brand power and strong technologicalmaterial indispensable for the spread of biodegradable plastics thatdevelopment capabilities, while in Japan, we will develop newcontribute to resolving environmental issues, water-based paints

products that meet market needs, acquiring orders in the private

and coating agents, and high-performance electronic materials. At

wastewater field and expanding into the water purification tankpresent, Nisshinbo is enhancing product development and sales

market.

channel expansion targeting environmentally friendly products. We

Furthermore, to provide new high-value-added products, wewill accelerate sales of water-based and pulverized Carbodilite,

will expand our business domain through the development ofspecifically in the rapidly growing environmental and energy markets

new products other than thermal insulation, including those that

where Carbodilite is undeveloped.

contribute to infrastructure safety measures.

Nisshinbo Textile Inc.

sophisticated demands for Carbodilite performance. By developing

Long-Term Growth Expected in Glass-Like Carbon Products

high-value-added products that meet these needs and engaging

Although volatility will continue in the market for semiconductors,

expand our sales channels.

the main application for glass-like carbon products, the spread of
CASE and the Metaverse are expected to drive long-term growth.

Differentiating and Increasing the Added Value ofThermal Insulation Products
In thermal insulation products, we will work to expand business by
maintaining and expanding civil engineering base solutions and hard
blocks constituting core products, as well as by launching highly
generation energy, we are developing high-performance insulationmaterials for supply chain transportation and storage facilities.

to grow due to supply chain disruptions triggered by economic
friction between the United States and China and subsequent

textile industry with its state-of-the-art technologies and high quality. Nisshinbo subsequently
expanded its business globally in the fields of spinning, weaving, processing, sewing andapparel, and today possesses some of the world’s most advanced technologies in productdevelopment and production. Nisshinbo is currently working to increase global sales of the
APOLLOCOT brand by mobilizing its sophisticated textile processing technologies.

investments in additional capacity to recover from semiconductor
shortages. In particular, we will focus on the advanced
semiconductor segment, which is the driver of capital investments insemiconductors; meet demands for advanced materials; and target
business growth by providing key materials that support the mass
production of miniaturization processes.

Sustainability Initiatives

Business Results and Strategy
Summary of Financial Results for 2022

Medium- to Long-Term Business Strategy

In 2022, the Textiles business reported sales of ¥38,334 million (up 16.2%

Rebuilding Business Profitability

year on year after reclassification) and segment profit of ¥99 million (anIn the Textiles business, under the slogan“promoting sustainability

improvement of ¥1,145 million year on year after reclassification).

Contributing to Provide Solutions to Environmental Issues through Separators and Functional Materials
In the Chemicals business, we supply separators for fuel cells, which are attracting attention as a technology facilitating carbon
water-based resins, and provide solutions to environmental issues through a variety of other products.

Net Sales(millions of yen)

21.12 (reclassified)

22.12

Environment and energyrelated products*

9,668

10,838Carbon products, etc.

1,730

2,138

Eliminations, etc.

(249)

(304)

11,14912,673In the shirts segment, sales of APOLLOCOT shirts and other formstabilized products were robust due to a recovery in the dress shirt
market, with cost reductions at the Indonesia production base also
contributing to the sales increase and profit recovery. At TOKYO SHIRTS
CO., LTD., sales were on par with fiscal 2021 due to fewer stores in line

Segment Profit(millions of yen)with the closure of unprofitable stores, while operating profit, althoughstill in the red, improved significantly year on year due to an increase in

21.12 (reclassified)

22.12

1,723

1,666

Carbon products, etc.

358

515

uniforms, although uniform fabric order volumes are recovering, profit

Eliminations, etc.

(2)

(1)

declined due to a delay in passing on cost increases caused by soaring

2,079

2,181

Environment and energyrelated products*

Total

the gross profit margin resulting from the curtailment of discount sales
and the effect of fixed cost reductions through store consolidations. In

raw material costs and the sharply depreciating yen. In developedmaterials, although sales of MOBILON yarn for pantyhose increased
year on year as the resumption of human movement provided more

*Fuel cell bipolar plates, Carbodilite, insulation materials

opportunities to wear stockings, sales and profit declined with the end of

Key Products

special demand associated with MOBILON tape for medical face masks
in the United States, as well as a prolonged slump in sales of non-woven
Overseas, our Indonesian subsidiary saw a significant increase in bothsales and profit thanks to firm orders of form-stabilized products forJapan, the expansion of global sales and efforts to reduce plant expenses.
At our Brazilian subsidiary, despite raising sales prices in response tosoaring raw cotton costs, factory expenses rose due to production
adjustments in response to deteriorating market conditions in the second

Bipolar plates for fuel cells

64

Carbodilite

Bio-carriers: APG

half of the fiscal year, resulting in higher sales and lower profits.
Note: In year-on-year performance comparisons, 2021 performance uses
converted values based on new profit recognition standards.

development of highly functional products that consider theenvironment, health and comfort. We will make further advances in
non-iron APOLLOCOT shirts that contribute to energy conservationand drive sales growth, while focusing efforts on expanding market
share and increasing profitability through the development and salesof added value products providing stain-resistance, coolness andother new functionality. Furthermore, we will make efforts to reduce
costs by implementing thorough cost controls, comprehensively
revising raw materials and manufacturing processes, and promoting
inventory reductions in an attempt to improve cash flows.

Business Transformation in Response to Market Changes
Since 2021, TOKYO SHIRTS CO., LTD., has been consolidating stores
to reduce expenses, and going forward, it will reorganize storesbased on a scrap-and-build policy with consideration for regional
characteristics while strengthening measures aimed at increasing
sales per store. It will expand store services linked to online sales
and shift to a business model based on e-commerce (EC) and onlinemerge-offline (OMO).
In the Oikos business, we are developing seedling pots andmulch sheets for agricultural material applications that utilize
Oikos’biodegradable characteristics. Leveraging our environmental
advantages, we will develop new sales channels while promoting
structural reforms and reducing costs through the use of cotton waste
and reused cotton (in-process recycling) and labor-saving inspections.
65

Data Section

fabrics for cosmetics.

strategies to rebuild profit structure,”we will accelerate theOverview of Business Segments

neutrality, manufacture Carbodilite, a functional material that is being promoted to improve the function of biodegradable resins andTotal

Since its founding in 1907 as Nisshin Cotton Spinning Co., Ltd., Nisshinbo has led the Japanese

Sustainability

flame-retardant products. In addition, with the proliferation of next-

The semiconductor production equipment market is also expected

Related SDGs

Value Creation

In Japan, Europe and the United States, there are increasingly

in proactive marketing that includes untapped markets, we will

TextilesProfilepollution caused by microplastics, global warming, air pollution

Overview of Business Segments

Overview of Business Segments ̶ Textiles

Creating a Circular Economy Business

Nisshinbo will continue to develop applications that contribute to

As a sustainable business development in the areas ofthe“environment”and“health,”including biodegradable scrubbing“environment”and“health,”Nisshinbo is taking on the challengeof creating a circular economy business integrating textile andimmobilize antimicrobial agents and other substances in cotton
products.

Real Estate

Profilechemical technologies. The“shirt rebirth project”adopted by thematerials and substitutes for binders derived from petroleum that

Overview of Business Segments

New Energy and Industrial Technology Development Organization(NEDO) Feasibility Study Program aims to establish a resource
recycling system to create recycled cellulose fiber from discarded
shirts. In the“cellulose nanofiber utilization project,”cotton
waste generated in the manufacturing process is converted into
nanofibers and combined with fiber processing technologies todevelop proprietary functional processing agents. Going forward,

Nisshinbo Holdings Inc.
Related SDGs

Value Creation

Nisshinbo’s Real Estate business redevelops properties that have become vacant because ofbusiness changes at Group companies. Income from those activities is used to fund the Group’s

Sustainability Initiatives

growth strategy, such as launching new businesses and expanding global operations. Income is

Responses to Global Environmental Issues

generated from two main sources—property leasing and the sale of housing lots. Nisshinbo has

In the Textiles business, the 2021 shutdown of NIKAWA TEXTILE in-house coal-fired power generator equipment (switch to thepurchasing of electricity), and the 2022 transition to geothermal power at three bases in Indonesia, resulted in a 65% reduction in 2022
GHG emissions compared to fiscal 2014. In terms of water consumption, Nisshinbo Indonesia and business sites in Japan are working

actively developed the housing lot sales business since 2009, when the Group moved to a holding
and operating company structure.

to reduce water consumption through the reuse of wastewater from production activities.

Business Results and Strategy(millions of yen)

21.12 (reclassified)
32,998Segment Profit

22.12
38,334(millions of yen)

21.12 (reclassified)

22.12(1,045)99

Going forward, we will promote the effective utilization of real estate

In 2022, the Real Estate business reported sales of ¥11,179 million

aim of securing long-term, stable rents and improving profitability in(down 28.2% year on year after reclassification) and segment profit

the housing lot sales business. We plan to continue generating stableof ¥8,720 million (down 7.1% year on year after reclassification).

earnings by focusing on the projects shown below.

In the housing lot sales business, despite sales of residential

The first handover of commercial land from the former

land conducted in Hamamatsu, Shizuoka Prefecture, and Okazaki,

Hamamatsu factory site (Shizuoka Prefecture) was completed in

Aichi Prefecture, sales and profits declined compared to the2022, with the second handover is scheduled to be made in 2023.

Tokyo, and residential land was sold in Kitajima, Tokushima

For the redevelopment of the former Miai Plant site (Aichi
Prefecture), we will continue sales of all 357 detached homes.

Prefecture, and Higashiomi, Shiga Prefecture. At the same time,

Regarding the redevelopment of employee housing in Nishiarai

leasing operations in the property leasing business were firm for(Tokyo) as rental condominiums, construction of Phase 1 (50 units)land, office buildings and commercial facilities.

was completed and leasing has begun, with Phase 2 (149 units)

Note: In year-on-year performance comparisons, 2021 performance uses
converted values based on new profit recognition standards.

leasing slated to commence in April 2024.
We have commenced redevelopment of the former Notogawa
factory site (Shiga Prefecture) as 129 condominium units, with

Medium- to Long-Term Business Strategy

plans to launch sales in 2023.

In 2023, we expect to continue securing high profits as in thecondominium units on the site of the former Japan Radio Co., Ltd.,previous fiscal year. Leasing operations in the property leasing
business were firm for land, office buildings, commercial facilities

Oikos Fabric

Mobilon/Elastomer

Our Apollocot shirts, developed with the

Oikos nonwoven fabrics employ the

Mobilon is a type of spandex (polyurethane elastic fiber)full capabilities of Nisshinbo Textile Inc.,

spunlace manufacturing method, whichdeveloped by Nisshinbo Textile using proprietary technologies.

have been highly appraised by customers

uses water jets to finish fibers in a

Leveraging its soft touch when stretched and ability toas next-generation non-iron shirts, and the

sheet format. These extremely safe

maintain shape, the range of applications continues to expand

technology is being extended to other items

and hygienic ecological materials areinto a variety of categories including clothing and materials.

as well, such as handkerchiefs, business knit

used in a wide range of fields, from

Our elastomer is a thermoplastic polyurethane material

shirts and cotton business pants.

cosmetics and household sundries toalso developed using proprietary technologies. Thanks to its

industrial applications.

excellent elasticity, flexibility and durability, it is used widely inapparel, face masks and other industrial materials.

66

and other properties, while sales of land and other properties are
ongoing in the housing lot sales business.
The Real Estate business will continue to fulfill its role as a

Seifu Dormitory (Tokyo). Development and construction work
began in 2022, with leasing scheduled to start in 2024.
In addition, at the Shibaura Nissin Building (Tokyo) owned by
Nisshinbo Urban Development Co., Ltd., we are moving forwardwith construction plans for rental condominiums (115 units) in

source of funds to help Nisshinbo attain its management targets.

collaboration with a major housing manufacturer.

Net Sales

Segment Profit(millions of yen)

Data Section

Non-Iron Shirts Apollocot

We are moving forward with plans to construct 50 rental

Overview of Business Segments

previous fiscal year in which condominiums were sold in Mitaka,

Key Products

and property reconfiguration throughout the entire Group with the

Sustainability

Net Sales

Summary of Financial Results for 2022

(millions of yen)

21.12 (reclassified)

22.12

21.12 (reclassified)

22.12

15,57011,179

9,388

8,720

67

Financials

Eleven-Year Summary
2013.03

2014.032015.032016.032017.032018.032018.122019.122020.122021.122022.12¥450,693¥494,350¥523,758¥533,989¥527,274¥512,048¥416,221¥509,661¥457,051¥510,643¥516,085

175,308

187,743

209,116

205,368

190,852

193,621

̶

̶

̶

̶

̶

Wireless and Communications

̶

̶

̶

̶

̶

̶

90,427

152,213

144,312155,085

150,393

Micro Devices

̶

̶

̶

̶

̶

̶

53,77765,286

61,141

77,37485,329Automobile Brakes

118,849

148,699

161,887

165,037

146,062

154,205

135,008

131,338

114,827

138,295

153,643

Precision Instruments

24,52028,65528,60829,52560,68764,91862,21965,42951,41955,76953,655Chemicals

8,150

8,810

8,138

8,285

9,483

11,285

8,173

9,391

9,577

11,083

12,673

Textiles

54,73654,63051,07360,12755,84254,64043,66049,50533,957

34,47938,334Papers30,524

31,686

31,28032,58532,648

̶

̶

̶

̶

̶

̶

Real Estate

15,367

10,567

9,246

8,358

8,084

8,406

4,237

11,655

20,27915,584

11,179Other Businesses

23,23923,56024,41024,704

23,61624,97318,72024,844

21,53922,974

10,879Operating Income (Loss)

13,394

13,175

13,744

12,617

4,890

15,086(2,506)

6,482

1,248

21,78915,435Net Income (Loss) Attributable to Owners of theCompany

6,418

9,012

13,694

10,776

3,575

26,352(7,183)(6,604)

13,541

24,817

19,740Equity¥242,623¥276,865¥306,938¥284,472¥275,753¥290,434¥264,849¥252,536¥242,068¥272,632¥278,498

Total Assets

551,933

611,311

678,486

651,793646,288

651,959622,381

617,528

581,204

604,799

616,274

Capital Expenditures

20,12319,89636,90922,86230,50530,10327,19932,38725,87026,48229,016

Depreciation and Amortization

18,96921,48623,111

22,571

22,264

22,183

19,816

24,955

22,12523,16525,088Net Cash Provided by Operating Activities¥ 34,095¥ 26,075¥ 37,120¥ 39,566¥ 26,768¥ 32,415¥ 15,495¥ 26,249¥ 42,590¥ 39,828¥19,586

Net Cash Provided by (Used in) Investing Activities(10,973)(19,862)(21,271)(22,793)(31,429)(1,798)(20,723)(21,759)(6,321)(16,767)(11,693)

Net Cash Provided by (Used in) Financing Activities(24,073)(2,321)(6,238)(9,044)

3,595(34,785)

11,936(10,065)(24,230)(30,819)(8,888)22.52¥ 160.59¥ (43.26)¥ (39.45)

¥

81.38

¥ 149.08¥121.06

Operating Results (millions of yen)

Electronics

ProfileNet Sales

Value Creation

Financial Position (millions of yen)
Sustainability

Cash Flows (millions of yen)¥

Shareholders’Equity

1,198.67

1,369.78

1,634.07

1,472.26

1,444.94

1,659.29

1,457.26

1,431.35

1,375.19

1,556.01

1,679.53

15.00

15.00

15.00

30.00

30.00

30.00

30.00

30.00

30.00

30.00

34.00

Shareholders’Equity Ratio

37.9

39.1

38.2

35.9

35.5

41.2

40.1

38.6

39.4

42.8

42.8

Return on Assets (ROA)

1.2

1.5

2.1

1.6

0.6

4.1

(1.1)

(1.1)

2.3

4.2

3.2

Return on Equity (ROE)

3.2

4.0

5.5

4.4

1.5

10.6

(2.8)

(2.7)

5.8

10.2

7.6

Payout Ratio

40.8

29.1

18.7

44.2

133.2

18.7

̶

̶

36.9

20.1

28.1

Cash Dividends

36.74

¥

51.60

¥

80.33

¥

67.93

¥

Key Ratios（%）

Notes: 1. In the fiscal year ended March 2017, Iwao & Co., Ltd., was merged with Nisshin Toa Inc., both of which are consolidated subsidiaries. The apparel textile operations of Iwao & Co., Ltd.,
included in the Other Businesses segment were reclassified under the Textiles business segment as a result. Figures from the fiscal year ended March 2013 have been adjusted to reflect thischange.
2. The Group’s elastomer operations were transferred from the Chemicals business to the Textiles business in the fiscal year ended March 2016. Figures from the fiscal year ended March
2015 have been adjusted to reflect this change.
3. The Company changed its fiscal year-end from March 31 to December 31, effective from the fiscal period ended December 31, 2018.
4. The electronics business segment was separated into Wireless and Communications and Micro Devices as part of adjustments to earnings management classifications in the fiscal period
ended December 2019.

68

69

Data Section

Net Income (Loss) Attributable to Owners of theCompany

Overview of Business Segments

Per Share（yen）

Financials

Consolidated Balance Sheet

Consolidated Statement of Profit or Loss

December 31, 2022 and 2021

Thousands of U.S.
Dollars (Note)

Millions of Yen

ASSETS

2022

2022

2021

¥

45,09280¥

42,5962,344$

334,015593

Receivables:
Trade notes

18,007

17,556

133,385

Trade accounts

92,557104,277

685,607

Unconsolidated subsidiaries
and affiliates

1,846

675

13,674Other

Inventories
Other current assets
Total current assets

3,208

7,357

23,763

(780)

(720)

(5,778)

149,402

122,841

1,106,681

15,624

7,227

115,733

325,036

304,153

2,407,673

PROPERTY, PLANT AND
EQUIPMENT:Land

33,81834,364

250,504

Buildings and structures

166,533

162,797

1,233,578

379,800

359,175

2,813,333

Construction in progress

6,629

6,708

49,104

Other

17,935

13,989132,852

Total

604,715

577,033

4,479,371

Accumulated depreciation(426,611)(404,284)(3,160,081)

Net property, plant, andequipment

178,104

172,749

1,319,290

37,78052,631

279,852

Investments in and advances
to unconsolidated
subsidiaries and affiliates

33,99631,709251,822

Deferred tax assets

13,1709,984

97,556

Goodwill

1,258

3,304

9,319

Other

26,93030,269199,481

113,134

127,897

838,030¥ 616,274¥ 604,799$ 4,564,993

Total investments andother assets
TOTAL¥ 59,345

439,593

30,000222,222

Current portion of long-term
debt

46,1806,356

342,074

Payables:Trade notes

25,00423,255

185,215

Trade accounts

44,94842,631

332,948

83

13

615

12,443

11,926

92,170Accrued expenses

18,041

17,491

133,637

Accrued income taxes

3,320

3,432

24,593

Other current liabilities

20,19024,233

149,555

259,554

200,391

1,922,622

Unconsolidated subsidiaries
and affiliates
Other

Total current liabilities
LONG-TERM LIABILITIES

10,85453,97280,400Liability for retirement benefits

42,381

51,984

313,933

Deferred tax liabilities

9,990

11,00174,000

Other long-term liabilities

14,997

14,819111,089

Total long-term liabilities

78,222

131,776

579,422

Total liabilities

337,776

332,167

2,502,044¥516,085¥510,643$3,822,852

COST OF SALES

400,737

395,1612,968,422

115,348

115,482

854,430

99,913

93,693740,097

15,43521,789114,333

2,164

1,649

16,029(1,680)(1,144)(12,444)

813

1,105

6,022

3,657

2,674

27,089(10,259)

Gross profit
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Gain on sales of property, plant, and equipment
Equity in earnings of an unconsolidated subsidiaries and affiliates(1,385)(1,619)Gain on sales of securities

7,278

2,418

53,911Business structure improvement expenses(931)(4,617)(6,896)

Loss on impairment of long-lived assets

Other—net

INCOME BEFORE INCOME TAXES

27,73827,699205,467

Capital surplus

18,87819,882

139,837

Retained earnings

196,754

193,9211,457,437(13,240)(15,953)(98,074)

Total shareholders’ equity

230,130

225,549

1,704,667

3,015
76,46725,75822,896

190,800

37,533

5,067

4,273

Deferred

777(7,565)

5,756

5,844

(3,292)43,28919,914

26,188

147,511

174

1,371

1,289

¥ 19,740¥ 24,817$ 146,222

Yen

U.S. Dollars¥121.06¥149.08

$0.90

34

30

0.25

Total income taxes

PER SHARE OF COMMON STOCK:Net income
Cash dividends

Accumulated othercomprehensive income:

641
1,107

Current

NET INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY

Treasury stock—at cost,
12,081,848 shares in 2022
and 12,552,280 shares in
2021

407
10,323

INCOME TAXES:NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

Common stock—authorized,
371,755,000 shares; issued,
169,120,014 shares in 2022
and 179,042,894 shares in
2021

Consolidated Statement of Comprehensive Income (Loss)
Years Ended December 31, 2022 and 2021

Net unrealized gain (loss)
on available-for-salesecurities

16,70225,813

123,719

Deferred gain (loss) on
derivatives under hedge
accounting

(62)

5

(459)

Millions of Yen
2022

NET INCOME¥19,914

Thousands of U.S. Dollars(Note)

2021
2022
Thousands of U.S. Dollars¥26,188$147,511(Note)
Millionsof YenOTHER COMPREHENSIVE INCOME (LOSS):
31

(68)

7

(504)

Foreign currency translation adjustments

7,875

6,893

58,33325,563

Postretirement liability adjustments

1,855

3,772

13,741

33,512

249,037

Equity in earnings of unconsolidated subsidiaries and affiliates

682

1,224

5,052

70

125

519

1,229

11,927

9,103

14,67813,446

108,726

278,498

272,632

2,062,949¥21,143¥38,115$156,614

13,5296,014

100,214

Postretirement liability
adjustments

3,451

1,680

33,620Stock acquisition rights
Noncontrolling interests

Deferred (loss) gain on derivatives under hedge accounting

Total other comprehensive income
COMPREHENSIVE INCOME(67,519)

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:¥604,799 $4,564,993

Owners of the Company¥19,848¥35,723$147,022

Note: The translations of Japanese yen amounts into U.S. dollar ($) amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥135 to $1, theapproximate rate of exchange at December 31, 2022.

Noncontrolling interests

1,295

2,392

9,592

70

¥ 616,274

Net unrealized (loss) gain on available-for-sale securities

71

Data Section(9,115)

Foreign currency translation
adjustments

TOTAL

NET SALESNET INCOME

EQUITY:
Shareholders’ equity:

Total equity

2022

Other income (expenses)—net

Long-term debt

Total

2021

Overview of Business Segments

INVESTMENTS AND OTHERASSETS:¥ 41,054 $

30,000

Short-term bank loans

2022

2022

Commercial paper

Thousands of U.S. Dollars(Note)

Sustainability

Machinery, equipment andtools

Investment securities

2021

Millions of Yen

Value Creation

Allowance for doubtfulreceivables

2022

Years Ended December 31, 2022 and 2021

ProfileTime deposits

LIABILITIES AND EQUITYCURRENT LIABILITIES:CURRENT ASSETS:
Cash and cash equivalents

Millions of Yen

Thousands of U.S.
Dollars (Note)Financials

Consolidated Statement of Cash Flows
Years Ended December 31, 2022 and 2021

Millions of Yen
2022

Thousands of
U.S. Dollars (Note)
2022

2021

Segment Information

Years Ended December 31, 2022 and 2021

2022

OPERATING ACTIVITIES:￥ 22,896$ 190,800

Income taxes—paid(1,601)(10,998)(11,859)

Depreciation and amortization

25,08823,165

185,837

Amortization of goodwill

2,122

1,334

15,719Adjustments to reconcile net income to net cash
provided by (used in) operating activities:

Sales to externalcustomers

Total¥ (5,863)¥516,085¥ (5,731)¥ 15,435

174,644

82,099156,344

78,88012,244

41,871

39,24135,733(4,782)616,274

Depreciation andamortization

4,067

4,341

8,851

4,718

348

1,407

833

220

303

25,088

Increase in property,
plant, and equipment
and intangible assets

5,072

4,989

11,141

5,002

541

683

1,177

31

380

29,016

Wireless andCommunications

Micro Devices

Automobile
BrakesPrecision
Instruments

Chemicals

TextilesReal Estate

Other
Businesses

Eliminations/
Corporate

13,600(7,590)9,588(56,223)

Total adjustments(6,172)

16,932(45,719)¥155,085¥77,374¥138,295¥55,769¥11,083¥ 34,479¥15,584¥22,974

Net cash provided by (used in) operating activities

19,58639,828145,081

946

1,089

25

565

160

23

1,383

1,867

Proceeds from sale of property, plant, and equipment

2,096

1,852

15,526

Proceeds from sale of investment securities and investments in and advances tounconsolidated subsidiaries and affiliates

9,242

5,596

68,4592021

Changes in operating assets and liabilities:

Increase (decrease) in payables
Other—net(22,399)(20,112)(165,919)

(222)

(118)

(1,644)Purchase of investment securities and investments in and advances to unconsolidated
subsidiaries and affiliates

Net cash provided by (used in) investing activities
FORWARD

Sales to externalcustomers
Intersegment sales ortransfers(284)

18,237(3,701)(21,274)(11,693)(16,767)(86,615)¥¥ 23,061

7,893$

58,466

625

2,698

4,630

Repayment of long-term debt

(7,020)(28,149)(52,000)

Increase (decrease) in short-term bank loans—net

16,602

5,280

122,978

Cash dividends paid

(5,291)(4,994)(39,193)

Purchase of treasury stock(10,003)(3)(74,096)

Increase (decrease) in other long-term liabilities(730)(6,867)(4,921)(21,289)(8,888)(30,819)(65,837)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

3,487

1,655

25,830NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

2,492(6,103)18,459CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

42,596

48,699315,526

4―30¥ 45,092¥ 42,596$ 334,015

Net cash provided by (used in) financing activities

INCREASE IN CASH AND CASH EQUIVALENTS RESULTINGFROM MERGER WITH UNCONSOLIDATED SUBSIDIARIESCASH AND CASH EQUIVALENTS, END OF YEAR

72

¥510,643(6,058)―¥156,031¥78,463¥138,320¥56,334¥11,243¥ 34,502¥16,967¥24,841¥(6,058)¥510,643

7,815¥ 4,292¥¥716¥ 2,054¥ (1,023)¥ 9,389¥

133¥(5,145)¥ 21,789

175,886

75,312

148,70971,824

11,311

38,09937,58232,757

13,319604,799

Depreciation andamortization

3,935

3,966

7,726

4,417

330

1,361

915

226

289

23,165

Increase in property,
plant, and equipment
and intangible assets

4,701

4,236

9,879

4,511

1,378

562

1,783

85

(653)

26,482

Wireless andCommunications

Micro Devices

Automobile
BrakesPrecision
Instruments

Chemicals

TextilesReal Estate

Other
Businesses

Eliminations/
Corporate

Consolidated$1,114,022$632,067$1,138,096$397,445$93,874$283,956$ 82,807$ 80,585$―$3,822,852

5,948

8,993

74

2,911

1,615

200

10,23013,459(43,430)―$1,119,970$641,060$1,138,170$400,356$95,489$284,156$ 93,037$ 94,044$(43,430)$3,822,852$

35,711$ 66,281$ (34,548)

$

5,748

$16,163$733$ 64,593$

2,104$(42,452)$ 114,333

1,293,659

608,141

1,158,104

584,296

90,696

310,156

290,674

264,689(35,422)4,564,993

Depreciation andamortization

30,12632,15665,56334,9482,578

10,422

6,170

1,630

2,244

185,837

Increase in property,
plant, and equipment
and intangible assets

37,57036,95682,52537,052

4,007

5,059

8,719

230

2,815

214,933

Segment assets

3,558

Other:

2022

Thousands of U.S. Dollars (Note)

Sales:
Sales to externalcustomers
Intersegment sales ortransfers
Total
Segment profit (loss)
Segment assets
Other:

73

Data Section(927)(2,874)

Other—net―¥

Segment profit (loss)

FINANCING ACTIVITIES:
Proceeds from long-term debt¥

Overview of Business Segments

2,462(2,872)

Decrease (increase) in time deposits—net
Other—net

Consolidated

Sales:Total

INVESTING ACTIVITIES:

Purchase of property, plant, and equipment

Millions of Yen

Sustainability

7,387

Other:

Value Creation

1,836

―

284

Loss on impairment of long-lived assets(170,548)(5,863)¥12,696(2,215)(5,432)

1,817

¥

(775)

(23,024)

1,381¥12,560(299)

Decrease (increase) in inventories

27¥ 8,720

Loss (gain) on sale of property, plant, and equipment, net

73,274218

99(34,133)(9,536)393¥(1,189)9,892

10¥516,085¥38,361(4,608)Decrease (increase) in receivables

1,214

―

¥12,891

Segment assets

467

803

¥

¥ 2,182

1,022

36¥10,879776

14,881

63¥11,179¥54,048

2,922

Loss on write-down of investment securities and investments in and advances tounconsolidated subsidiaries and affiliates¥38,334¥

3,725(53,911)¥12,673¥153,653

138(2,418)¥53,655¥ (4,664)

2,009(7,278)¥153,643¥86,543

Interest and dividends income

10,259¥85,329¥ 8,948

Segment profit (loss)

1,619¥150,393

Consolidated

4,821(4,800)1,385Real Estate¥151,196(27,089)

178

Loss (gain) on sale of investment securities and investments in and advances tounconsolidated subsidiaries and affiliates, net

TextilesEliminations/
Corporate¥(2,674)(648)

Increase (decrease) in liabilities for retirement benefits

Chemicals

Other
Businesses

Intersegment sales ortransfers(3,657)

Provision for business structure improvement

Precision
Instruments

Sales:

Provision for (reversal of) doubtful receivables

Equity in losses (earnings) of unconsolidated subsidiaries and affiliates

Micro Devices

Automobile
BrakesProfile¥ 25,758

Income before income taxes

Millions of Yen
Wireless andCommunications

Key Companies in the Nisshinbo Group

Major External Assessments(As of June 1, 2023)

ESG Index

External Assessments of
ESG Activities

MSCI ESG RATINGS
Headquarters

FTSE Blossom Japan Sector Relative Index

Main Products and Services

Japan Radio Co., Ltd.

Japan

Disaster prevention systems,
mobile communications equipment

JRC Mobility Inc.

Japan

Automotive radar, ultrasound sensors

Japan

Electronic devices, microwave products

Nisshinbo Brake Inc.

Japan

Automobile brake friction materials

TMD Friction Group S.A.

EuropeAutomobile brake friction materials

Saeron Automotive Corporation

South Korea

Automobile brake friction materials

Nisshinbo Automotive Manufacturing Inc.

USA

Automobile brake friction materials

Nisshinbo Somboon Automotive Co., Ltd.

Thailand

Automobile brake friction materials

Nisshinbo Saeron Changshu Automotive Co., Ltd.

China

Automobile brake friction materials

Nisshinbo Mechatronics Inc.

Japan

Molding products,
automotive precision parts

Nanbu Plastics Co., Ltd.

Japan

Molding products

Nisshinbo Precision Instrument & Machinery Hiroshima Corporation

Japan

Automotive precision parts

FTSE Russell (trading name of FTSE International Limited
and Frank Russell Company) certifies that Nisshinbo
Holdings, Inc., has met the requirements for inclusionin the FTSE Blossom Japan Sector Relative Index basedon the results of a third-party survey and has become
a constituent of this index. The FTSE Blossom Japan
Sector Relative Index is widely used to create andevaluate sustainable investment funds and other financial
products.

● Wireless and Communications● Micro Devices
Nisshinbo Micro Devices Inc.
● Automobile Brakes

Received a 3-star overall rating in the Sixth Nikkei
Smart Work Management Survey

MSCI Japan Empowering Women (WIN) Index
THE INCLUSION OF NISSHINBO HOLDINGS INC.
IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR
INDEX NAMES HEREIN, DO NOT CONSTITUTEA S P O N S O R S H I P, E N D O R S E M E N T O R
PROMOTION OF NISSHINBO HOLDINGS INC.
BY MSCI OR ANY OF ITS AFFILIATES. THE MSCIINDEXES ARE THE EXCLUSIVE PROPERTY OF
MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICEMARKS OF MSCI OR ITS AFFILIATES.

Sustainability

Location

Received a 4-star overall rating in the Nikkei’s2022 SDG Management Survey

Value Creation

Company

CDP Climate Change 2022
CDP Water Security 2022

ProfileTHE USE BY NISSHINBO HOLDINGS OF ANY MSCIESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”)
DATA, AND THE USE OF MSCI LOGOS, TRADEMARKS,SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT,RECOMMENDATION, OR PROMOTION OF NISSHINBOHOLDINGS BY MSCI. MSCI SERVICES AND DATAARE THE PROPERTY OF MSCI OR ITS INFORMATIONPROVIDERS, AND ARE PROVIDED ‘AS-IS’ AND
WITHOUT WARRANTY. MSCI NAMES AND LOGOS ARE
TRADEMARKS OR SERVICE MARKS OF MSCI.

Highly rated in the Toyo Keizai CSR Company
Rankings (2023)● Precision Instruments

China

Automotive precision parts

ThailandMolding productsContinental Automotive Corporation

Japan

Automotive precision parts

Japan

Urethane products,
high-performance chemical products

Selected as a“Company Taking on the ZeroEmission Challenge”by the Ministry of Economy,
Trade and Industry (METI)● Chemicals
Nisshinbo Chemical Inc.
● Textiles
Japan

Shirt fabric, developed materials

NISSHINTOA IWAO INC.

Japan

Textile productsTOKYO SHIRTS CO., LTD.

Japan

ShirtsNisshinbo Do Brasil Industria Textil Ltda.

BrazilTextile spinning

PT. Nikawa Textile Industry

Indonesia

Textile spinning and weaving

PT. Nisshinbo Indonesia

Indonesia

Textile weaving and dyeing

Japan

Real estate operations

Nisshinbo Singapore Pte. Ltd.

Singapore

Group company support

Nisshinbo Business Management (Shanghai) Co., Ltd.

China

Group company support● Real Estate
Nisshinbo Urban Development Co., Ltd.

2023

Sompo Sustainability Index

Selected as a 2023 Certified Health & Productivity
Management Outstanding Organization

Data Section

Nisshinbo Textile Inc.

SOMPO Sustainability Index

Selected as a“Kurumin”Certified Child-Rearing
Support Company● Other

74

Overview of Business Segments

Nisshinbo-Continental Precision Machining (Yangzhou) Co., Ltd.
Nisshinbo Mechatronics (Thailand) Ltd.

S&P/JPX Carbon Efficient Index

75

Corporate Data

Integrated Report 2023 Publication(As of December 31, 2022)

FoundedFebruary 5, 1907

Composition of Shareholders

Common Stock¥27,737 million (US$205 million)

Treasury stock

3105

Number of shares per
trading unittransformation as we pursue our mission of contributing to society through business activities.
Accordingly, the report introduces the strengths and growth strategies of our mainstay Wireless
and Communications and Micro Devices businesses. Regarding sustainability, the report includes

and others

23.2%

Foreign institutions

Other Japanese

25.5%

institutions

17.6%

messages from outside directors, as well as environmental and social initiatives that support our
growth strategy.
In creating this report, departments responsible for report creation and senior management shared
feedback on Integrated Report 2022 from institutional investors, incorporated their opinions from the

Major Shareholders(As of December 31, 2022)
Number of shares held Shareholding ratio(Thousand shares)（％）

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

100 sharesThis report aims to deepen stakeholder understanding of the Nisshinbo Group’s business

21,399

13.6

Fukoku Mutual Life Insurance Company

9,000

5.7

Custody Bank of Japan, Ltd. (Trust Account)

6,470

4.1

Teijin Limited

5,264

3.3

initial planning stages to ensure the report reflects the voice of the market, and collaborated with therelevant departments to improve report content as described above. I attest that the editing process
and published content are appropriate and honest.
My hope is that this report aids in understanding the Nisshinbo Group’s medium- to long-term value
creation capabilities.
Masahiro Murakami

President and Representative Director

Business year

January 1 to December 31

Shareholder record date

December 31(June 30 for interim dividend)

STATE STREET BANK AND TRUST COMPANY 505001

5,116

3.2

Total shares authorized

371,755,000 shares

CITY INDEX ELEVENTH CO., LTD.

4,146

2.6

169,120,014 shares

DFA INTL SMALL CAP VALUE PORTFOLIO

2,848

1.8

“International Integrated Reporting Framework,”Value Reporting Foundation (VRF)“Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues
for Collaborative Value Creation,”Ministry of Economy, Trade and Industry (METI)

for dividends

Treasury stock

Transfer agent(As of December 31, 2022)

12,081,800 shares

Shikoku Chemicals Corporation

2,600

1.6

Mitsubishi UFJ Trust and Banking

THE BANK OF NEW YORK MELLON 140044

2,462

1.5

Chiyoda-ku, Tokyo 100-8212, Japan

Japan Wool Textile Co., Ltd.

2,282

1.4

(As of December 31, 2022)
Corporation: 1-4-5, Marunouchi,

Nisshinbo Holdings Inc.

Guidelines Used to Prepare the Report

Sustainability

Total shares issued

Value Creation

Stock code

24.4%

Japanese individuals

Basic Stock Information
Electrical equipment

institutions

2.2%

38,501

SectorJapanese financial

Securities firms

Head Office
2-31-11, Ningyo-cho, Nihonbashi, Chuo-ku,
Tokyo 103-8650, Japan
Shareholders

Thank you for reading the Nisshinbo Group Integrated Report 2023.

7.1%

ProfileEmployees
Parent Company 224
Subsidiaries
20,857
Total
21,081“Sustainability Reporting Standards,”Global Reporting Initiative (GRI)

		

（%）

Nisshinbo Holdings Inc.

180.0

TOPIX

Overview of Business Segments

Total Shareholder Return (5-Year Period)

Corporate Website Guidance

160.0

Sustainability

140.0

Investor Information

120.0

・ Financial results・ Integrated Report/

100.0

・ Securities Report

Annual Report・ Presentation materials

80.0

・ Corporate Governance・ Environment
・ Social
・ Governance

Report, etc.

60.0
40.0

Data Section

20.0
0.0

17.3

18.3

18.12

19.12

20.12

21.12

22.12

（％）

18.3

18.12

19.12

20.12

21.12

22.12

Nisshinbo Holdings Inc.

131.3

80.1

102.0

78.3

92.1

103.9

TOPIX

115.9

102.1

120.6

129.5

146.0

142.5

Note: Share price index trends including dividends (March 31, 2017 = 100)76

77