Presentation on Business Results
for the Fiscal Year Ended March 31, 2018

May 18, 2018
This presentation contains forward-looking statements relating to expected future performance as of May 18, 2018.
Such statements are based on the views and assumptions of company management and involve risks anduncertainties such as changes in the business environment that may cause the actual results to differ materially fromexpectations.
Copyright © 2018 Harmonic Drive Systems Inc.

Performance Summary
for FY 2018/3

1
Copyright © 2018 Harmonic Drive Systems Inc.

Consolidated results for FY 2018/3(versus original forecasts)(millions of yen)
Forecast(announced Nov 9, 2017)

FY2018/3 (actual)

Vs. original forecasts

AmountPercent (%)

AmountPercent (%)

ChangeRate (%)

Net sales

53,000100.054,339

100.0

1,339

2.5

Operatingincome13,00024.5

12,598

23.2

▲401

▲3.1

Ordinary
income12,80024.2

12,228

22.5

▲571

▲4.5

Net
income

7,800

14.7

8,059

14.8

259

3.3

EPS (yen)

85.16

－

86.9

－

1.74

2.0

Net income refers to net income attributable to owners of parent.

2
Copyright © 2018 Harmonic Drive Systems Inc.

Consolidated results for FY 2018/3(year-on-year change)(millions of yen)

FY2018/3

FY2017/3

Year-on-year change

AmountPercent (%)

AmountPercent (%)

ChangeRate (%)

Net sales

30,069100.0

54,339100.0

24,27080.7

Operatingincome

7,813

26.0

12,598

23.2

4,784

61.2

Ordinary
income

7,958

26.5

12,228

22.5

4,269

53.6

Net
income19,732

65.6

8,059

14.8 ▲11,672▲59.2

EPS (yen)

215.42

－

86.90

－

▲128.52▲59.7

Capitalinvestment

4,576

－

8,757

－

4,180

91.3

Depreciation
costs

1,774

－

5,852

－

4,077

229.8

R&D
costs

1,383

－

2,114

－

731

52.9

Net income refers to net income attributable to owners of parent.
Depreciation costs include depreciation cost of tangible assets and amortization cost of intangible assets and goodwill.

3

Copyright © 2018 Harmonic Drive Systems Inc.

Performance of main group companies in
FY2018/3(millions of yen)AmountYear-on-yearchange (%)

AmountYear-on-yearchange (%)－

38,982

45.7

7,788

49.6

(U.S.A)

100%
(51%)

5,509

20.4

241

▲0.4

Harmonic AD, Inc.

100%

2,781

17.0

245

72.8

Harmonic Drive Systems(Shanghai) Co., Ltd.

100%

4,644

105.7

281

―

Harmonic Drive AG(Germany)

74.7%

13,623

19.3

2,044

84.4

Harmonic Drive
Systems Inc.
*2
*5

*3
*4
*6

Net income

Net sales

Equitystake

HD Systems, Inc.
(Harmonic Drive L.L.C.)*1 For overseas subsidiaries, the fiscal year ends December 31.
*2 Exchange rates: FY16/12 1USD = 108.84yen, FY17/12 1USD = 112.19yen*3 Exchange rates: FY16/12 1CNY = 16.37yen, FY17/12 1CNY = 16.63yen*4 Exchange rates: FY16/12 1EUR = 120.33yen, FY17/12 1EUR = 126.67yen*5 Net income of US subsidiaries (consolidated) is after excluding non-controlling interests.
*6. Net income of German subsidiaries (consolidated) is before excluding non-controlling interests .

4

Copyright © 2018 Harmonic Drive Systems Inc.

Non-consolidated results for FY2018/3(year-on-year change)(millions of yen)

Year-on-year change

FY2018/3

FY2017/3
AmountPercent (%)

AmountPercent (%)

ChangeRate (%)

Net sales

26,747100.0

38,982100.0

12,234

45.7

Operatingincome

6,568

24.6

11,016

28.3

4,448

67.7

Ordinary
income

7,233

27.0

11,044

28.3

3,811

52.7

Net
income

5,206

19.5

7,788

20.0

2,581

49.6

EPS (yen)

56.85

－

83.97

－

27.13

47.7

Capitalinvestment

3,453

－

6,523

－

3,069

88.9

Depreciation
costs

1,181

－

1,634

－

452

38.3

R&D
costs

1,355

－

1,368

－

13

1.0
5

Copyright © 2018 Harmonic Drive Systems Inc.

Net sales by application (non-consolidated)(millions of yen)

21,04820,00015,00010,0005,000

017,934

11,848

11,892

2,230

2,326

281
1,122
726

4,671

103
850
650

5,308

12,843

2,123
84
850
615

13,904

2,276

2,230
203
887
968

84
841
820

9,890

6,215

6,310
1,165
1,797
FY18/3 1st half

834
1,317

719
1,349

844
1,383

1,325
1,554

FY16/3 1st half

2nd half

FY17/3 1st half

2nd half

2,575 Others
318

Excavation system

1,137
1,076

Machine tools
Gearbox11,457 Robotics

1,431 FPD equipment
2,237 Semiconductor
equipment
2nd half

Semiconductor equipment
Gearbox for motor manufactures

Flat panel display equipment
Machine tools

Robotics
Printing machines

Optical devices
Excavation system for the oil, etc.

Transporter
OthersMeasuring machines

6

Copyright © 2018 Harmonic Drive Systems Inc.

Factors in year-on-year change in
non-consolidated operating income (FY2018/3)(millions of yen)

Increased
marginal profit
Higher fixedratio, etc.
11,016
manufacturing+215
costs, etc. Higher SG&A
costs

▲1,5286,568▲1,032Higher income+6,793

FY2017/3

FY2018/3
7
Copyright © 2018 Harmonic Drive Systems Inc.

Status of consolidated assets(millions of yen)

133,988

140,000
120,000
100,000
80,00096,78812,096
10,813
3,728

40,00015,816

Trade receivables

6,488
1,624

Other current assets

Tangible fixed assets

43,582Intangible fixed assets

11,78315,706

Investments andother assets

FY2017/3

FY2018/3

14,644
42,62320,0000Inventories

21,306

1,098

60,00029,464

Cash & bank deposits
and securities

8
Copyright © 2018 Harmonic Drive Systems Inc.

Status of consolidated liabilities and net assets(millions of yen)

133,988

140,000
120,000
100,000
80,00060,0003,162

10,05896,78815,504
625
3,034

2,673

Stock option
Non-controlling interests

6,044
15,66615,003
2,345

40,00020,0001,938

Trades payable
Other current liabilities
Long- and short-term borrowings
Other fixed liabilities

55,054Equity ratio
56.9%

99,664Equity ratio
74.4%
Owned capital0
FY2017/3

FY2018/3
9Copyright © 2018 Harmonic Drive Systems Inc.

Status of consolidated cash flows
FY2017/3

FY2018/3

Cash flow from operating activities

7,225

9,233

Cash flow from investing activities▲32,522▲8,171

Cash flow from financing activities

24,64817,493

Effect of exchange rate changes on cash
and cash equivalents

▲121

95

Net increase (decrease) in cash andcash equivalents▲770

18,651

Cash and cash equivalents at end of year

9,668

28,320(millions of yen)10
Copyright © 2018 Harmonic Drive Systems Inc.

Performance Forecasts
for FY 2019/3

11
Copyright © 2018 Harmonic Drive Systems Inc.

Consolidated performance forecasts for
FY 2018/3
FY2018/3(millions of yen)

FY2019/3 forecasts

Year-on-year change
ChangeAmountPercent (%)

AmountPercent (%)

Net sales

54,339100.0

68,500100.0

14,16026.1

Operatingincome12,59823.2

17,400

25.4

4,801

38.1

Ordinary
income12,22822.5

17,600

25.7

5,371

43.9

Net
income

8,059

14.8

11,500

16.8

3,440

42.7

EPS (yen)

86.9－

119.46

－

32.56

37.5

Capitalinvestment

8,757

－

24,000－15,242

174.1

Depreciation
costs

5,852

－

6,500

－

647

11.1

R&D
costs

2,114

－

2,750

－

635

30.0

Assumed exchange rate for FY19/3 forecasts 1USD ＝ ¥105.00 1EUR ＝ ¥130.00 1CNY＝¥16.00
Net income refers to net income attributable to owners of parent.
Depreciation costs include depreciation cost of tangible assets and amortization cost of intangible assets and goodwill.

Rate (%)

12

Copyright © 2018 Harmonic Drive Systems Inc.

FY 2019/3 forecasts for main group firms(millions of yen)AmountYear-on-yearchange (%)

AmountYear-on-yearchange (%)－

50,00028.3

10,000

28.4

HD Systems, Inc.
(Harmonic Drive L.L.C.)

100%
（51%）

6,100

10.4

250

3.5

Harmonic AD, Inc.

100%

2,900

4.3

260

5.9

Harmonic Drive Systems(Shanghai) Co., Ltd.

100%

5,200

12.0

100

▲64.5

Harmonic Drive AG(Germany)

74.7%

15,800

16.0

2,400

17.4

Harmonic Drive
Systems Inc.
*2
*5

*3
*4
*6

Net income

Net sales

Equitystake(U.S.A)*1 For overseas subsidiaries, the fiscal year ends December 31.
*2 Exchange rates: FY17/12 1USD = 112.19yen, FY18/12 (forecast) 1USD = 105.00yen*3 Exchange rates: FY17/12 1CNY = 16.63yen, FY18/12 (forecast) 1CNY = 16.00yen*4 Exchange rates: FY17/12 1EUR = 126.67yen, FY17/12 (forecast) 1EUR = 130.00yen*5 Net income of US subsidiaries (consolidated) is after excluding non-controlling interests.
13*6. Net income of German subsidiaries (consolidated) is before excluding non-controlling interests .
Copyright © 2018 Harmonic Drive Systems Inc.

Non-consolidated bookings by application(quarterly)(millions of yen)
20,00017,985

16,8891,640
62

13,85315,000773
423

18,113
1,780 Others

14,583

1,707

494

310

829

1,581

878
650

1,091

1,239

96

157
564
623

Excavation system
Machine tools
Gearbox957
613

10,000

7,795

6,449
5,000

0

5,964

1,000
7

1,160

433
304

16
377
342

3,141

2,523

469
678

510
729

FY17/3 1Q

2Q

1,176
74
449
471

11,754

768
895

1,029
1,150

1,179

1,241

1,625

1,670

3Q

4Q

FY18/3 1Q

2Q

Semiconductor equipment
Gearbox for motor manufactores
Optical devices
Excavation system for the oil, etc.

10,641 Robotics

7,948

8,652

3,557

9,082

Flat panel display equipment
Machine tools
Transporter
Others

1,114
2,568
3Q
Robotics
Printing machines
Measuring Machines899

FPD equipment
1,903 Semiconductor
equipment
4Q

14

Copyright © 2018 Harmonic Drive Systems Inc.

Non-consolidated Sales by application(by half-year)
23,500(millions of yen)

21,04820,00017,9342,230

15,00011,84810,000

5,000

0

2,230
281
1,122
726

4,671

11,892
2,326
103
850
650

5,308

12,843
2,123
84
850
615

6,215

2,276
84
841
820

318
1,137
1,076

11,457

Others450

Excavation system

1,250
1,200

Machine tools
Gearbox

13,300

Robotics

9,890
6,310

834
1,317

719
1,349

844
1,383

1,325
1,554

FY16/3 1st half

2nd half

FY17/3 1st half

2nd half

Semiconductor equipment
Gearbox for motor manufactures
Optical devices
Excavation system for the oil, etc.

203
887
968

13,904

2,575

2,460

1,165
1,797

1,431
2,237

1,200

FPD equipment

2,500

Semiconductor
equipment

FY18/3 1st half

2nd half

FY19/3 1st half
forecast

Flat panel display equipment
Machine tools
Transporter
OthersRobotics
Printing machines
Measuring machines

15

Copyright © 2018 Harmonic Drive Systems Inc.

Non-consolidated performance forecasts for
FY 2019/3(millions of yen)

FY2018/3

FY2019/3 forecasts

Year-on-year change
ChangeAmountPercent (%)

AmountPercent (%)

Net sales

38,982100.0

50,000100.0

11,017

28.3

Operatingincome11,01628.3

14,100

28.2

3,083

28.0

Ordinary
income11,04428.3

14,300

28.6

3,255

29.5

Net
income

7,788

20.0

10,000

20.0

2,211

28.4

EPS (yen)

83.97

－

103.88

－

19.91

23.7

Capitalinvestment

6,523

－

18,000－11,476

175.9

Depreciation
costs

1,634

－

2,600

－

965

59.1

R&D
costs

1,368

－

1,700

－

331

24.2

Assumed exchange rate for FY19/3 forecasts 1USD ＝ ¥105.00

1EUR ＝ ¥130.00

1CNY ＝ ¥16.00

Rate (%)

16

Copyright © 2018 Harmonic Drive Systems Inc.

Factors in year-on-year change in non-consolidated
operating income (FY 2019/3 forecast)(millions of yen)▲86
Decreased
marginal profit▲1,960
ratio, etc.

11,016+6,20014,100▲1,070Higherfixed manufacturing Higher
costs, etc.
SG&A
costs

Higher income

FY2018/3

FY2019/3 forecast
17
Copyright © 2018 Harmonic Drive Systems Inc.

Sales trend line (non-consolidated)(millions of yen)

50,00038,98240,00030,00050,000Four-year average
28,125mil. yen

26,50023,02923,740

2nd half

26,74721,04820,00011,663

11,892

10,00013,904

11,366

11,848

12,843

FY15/3

FY16/3

FY17/3

17,93423,500 1st half0
1st half

2nd half

FY18/3

FY19/3
forecast
18

Copyright © 2018 Harmonic Drive Systems Inc.

New Mid-term Management Plan
and Long-term Vision

19
Copyright © 2018 Harmonic Drive Systems Inc.

1. Looking Back at the Previous
Mid-term Management Plan
(fiscal years 2015-2017)20
Copyright © 2018 Harmonic Drive Systems Inc.

Targets and actual results of previous Midterm Management Plans (consolidated)(100 mil. yen)

Achievements well above targets(Target)
204

260

290

350

259

282

543

(Actual)
181

210

500
50th anniversary offounding

Long-term Vision
FY2015-17 Plan
FY2012-14 Plan

Established three well-balanced business segments

FY2012FY2014FY2015FY2017FY2018FY202021

Copyright © 2018 Harmonic Drive Systems Inc.

Main factors for achieving consolidated sales
above target
1. Business growth: Sharp rise in demand for use in industrial robots and othermain applications
2. M&A benefits: German affiliate made a subsidiary(mil. yen)

EuropeNet sales by region (fiscal 2017)
Results surpassed targets in the three main regions of Japan,
North America, and Europe

30,00020,00010,0000

Plan

Actual

Asia

Japan

North America

30,00030,00030,00020,00020,00020,00010,00010,00010,0000

Plan

Actual0

Plan

Actual0

Plan

Actual

22

Copyright © 2018 Harmonic Drive Systems Inc.

Revenue targets and results (consolidated)(mil. yen)

Fiscal 2017
Mid-term management plan

ActualVs. original plan

AmountPercent(%)

AmountPercent(%)

IncreaseamountNet sales

35,000100.054,339100.0

19,33955.3

Operatingincome

9,500

27.1

12,598

23.2

3,098

32.6

Current net
income

7,000

20.0

8,059

14.8

1,059

15.1

Cumulative total for three
years of Mid-term Plan
(Planned for fiscal years
2015-2017)

Rate ofincrease

Cumulative total for three
years of Mid-term Plan
(Results for fiscal years
2015-2017)

Capital investment
amount10,00017,630Depreciation andamortization costs

6,000

9,150

R&D costs

4,800

4,902

23

Copyright © 2018 Harmonic Drive Systems Inc.

2. New Mid-term Management Plan
(fiscal years 2018-2020)

24
Copyright © 2018 Harmonic Drive Systems Inc.

Target net sales (consolidated)
New Mid-term Management Plan

1.84X

100,000

100,000

12,50090,00068,50080,00070,00060,00050,00054,33910,3009,695

87,50040,00030,00020,000(mil. yen)

44,64358,20010,0000FY2017FY2018Speed Reducers

FY2020Mechatronics

25

Copyright © 2018 Harmonic Drive Systems Inc.

Net sales targets and main applications in each region(mil. yen)
Europe60,000• Industrial robots• Collaborative robots• Aerospace-related• Semiconductor
manufacturing equipment• Machine tools

40,00020,0000

Asia• Industrial robots• Collaborative robots• Machine tools• Semiconductor
manufacturing equipment

North America

2017

2020

Japan
• Industrial robots• Collaborative robots• Semiconductor manufacturing
equipment• FPD manufacturing
equipment• Service robots• Machine tools

60,00060,00040,00040,00020,00020,00060,000040,000• Aerospace-related• Semiconductor
manufacturing
equipment• Leading-edge medical
equipment• Service robots• Machine tools

0
2017

2020

2017

2020

20,000
0

2017

2020

26
Copyright © 2018 Harmonic Drive Systems Inc.

Revenue targets (consolidated)(mil. yen)
Fiscal 2018 (forecast)Fiscal 2017 (actual)

Fiscal 2020 (planned)

AmountPercent(%)

AmountPercent(%)

AmountPercent(%)

Net sales

54,360100.0

70,000100.0

100,000

100.0

Operatingincome12,59823.2

17,50025.0

26,000

26.0

Current net
income

8,059

14.8

11,50016.4

17,000

17.0

Cumulative total for three years
of previous Mid-term Plan
(Results for fiscal years 20152017)

Cumulative total for three
years of new Mid-term Plan
(Planned for fiscal years 20182020)

Capital investment
amount17,63071,000Depreciation andamortization costs

9,150

25,500R&D costs

4,902

9,450

27

Copyright © 2018 Harmonic Drive Systems Inc.

Trends in main application fields

28
Copyright © 2018 Harmonic Drive Systems Inc.

1. Industrial robots
 Market expected to expand 15% annually even after 2018 (IFR forecast) Changes in China’s industrial structure with Made in China 2025
Worldwide outlook for number of industrial robots sold2016-2020 (forecast)
Approx. 1.8x

60Annual rate: 15.3%
50
43.4

2011-2015
Approx. 1.5x

Units (10,000s)

40

37.9
34.7

Annual rate: 11.2%

30

29.4
25.4

52.1
1.5
5.8
2.5

Other
Rest of Europe
Germany

6.9

North America

4.6

Rest of Asia

5.0South Korea

21.0

China

4.8

Japan

22.1
20

10

0

16.6
0.9
2.4
2.0
2.4
1.3
2.6
2.3
2.8

15.9

2011

2012

17.8

2013

2014

Source: IFR "World Robotics 2017 Industrial Statistics"

2015

2016

2017

2018

2019

2020

(forecast)（予測）(forecast)（予測）(forecast)（予測）(forecast)
（予測）

29

Copyright © 2018 Harmonic Drive Systems Inc.

2. Collaborative robots (co-bots)■ Examples of expanding adoption in manufacturing and service industries■ Becoming drivers of further growthCo-bots market size outlook (sales amount, units)
Sales amount(100 mil. yen)

309

488

800

2,040

2017–2020 (forecast)

6

Approx.
4.3x

CAGR: 62.4%

5

Units (10,000s)

1,265

0.9

4
1.5
3

0.6

2
1
0

0.1
0.2
0.3
0.1
2016

0.2
0.4
0.4
0.2
2017
(actual)
Japan

0.4
0.6
0.7
0.3

1.0

1.9

1.1
0.5

0.8

Source: Fuji Keizai Group, Reality and Outlook ofWorldwide Robot-related Markets 2018: No.1
Factory Automation Robots Market

2018
2019
2020
(forecast) (forecast) (forecast)

Asia

EuropeUSA

30
Copyright © 2018 Harmonic Drive Systems Inc.

3. Service robots
 Robotics technology is playing an active role in medical practice Use of power assistance is expanding in physical therapy clinics and foreasing the burden of carrying heavy objects
 Health insurance applicability to surgery assistance robots is growing

Market forecast for surgical robots

Surgical robots

Power assist suits(US M$)
10
Forecast

8645mm diameter HarmonicDrive®

2
0
2015

2016

2017

2018~2020

Source: IFR "World Robotics 2017 Industrial Statistics"

31
Copyright © 2018 Harmonic Drive Systems Inc.

4. Semiconductor manufacturing equipment■ Investment in layering and miniaturization through capacity increases and highquality■ Growing demand for semiconductors used in artificial intelligence (AI) and virtual
reality (VR)■ Full-scale investment in 5G-related technology■ Increase in server demand due to data explosion, and switch from HDD to SDD(100 mil. yen)

Semiconductor manufacturing
equipment market forecast

Semiconductor market forecast

25,00020,000

Actual

15,00010,0005,000
0Source: WSTS
Source: Semiconductor Equipment Manufacturing Association of Japan

32
Copyright © 2018 Harmonic Drive Systems Inc.

5. LED and OLED manufacturing equipment■ Slowdown in growth of small and midsize OLED panels(lower demand for smaller OLED panels with scaling back of iPhone-X
production)■ Chinese LED and OLED manufacturers continue to invest in production
OLED market forecast

Source: IDTechEX

33
Copyright © 2018 Harmonic Drive Systems Inc.

New Mid-term Management Plan
Basic Policies

34
Copyright © 2018 Harmonic Drive Systems Inc.

Aimed-for corporate structure andindustry position in 2020
Ourbusinessarea

Provision of Total Motion Control

Aimed-forcorporate
structure in 2020

Continue to be without peer in the motion control
industry through provision of high-value products andservices

Aimed-forposition

A trusted actuatormaker having originaltechnology

A leading company inthe precision speed
reducer field

35
Copyright © 2018 Harmonic Drive Systems Inc.

Basic Policies of New Mid-termManagement Plan
50th anniversary of founding
Seizing the rapidly expanding growth opportunities, advance to the next stage

Major increase in global production capacity

Raise the capabilityof each Group
company
Build greater
comprehensive
strength

Improve customer
satisfaction byraising QCDS
capability

Strengthen thebusiness foundation
underlying growth36
Copyright © 2018 Harmonic Drive Systems Inc.

Major increase in global production capacity
1. Roadmap to raising production capacity
1. Strain wave gearing devices
to 2017/01(numeric data is monthly units produced)

Today

to 2021/03
100,000

50,000Japan:
Hotaka Factory (Factory No. 1)
Harmonic
Drive
Systems Inc.

66,00085,000＋

Ariake Factory (Factory No. 2)

100,000
New Factory (Ariake)

Germany:
Harmonic
Drive AG

Limburg Factory

USA:
Harmonic
Drive LLC

Boston Factory

Germany:
Harmonic
Drive AG

30,000 to
50,00010,000＋New Factory

3,000

2. Crossed roller bearings
Japan:
Harmonic
Precision

120,000 to
150,000

Existing Factory

Total 98,000＋

10,000 to
30,000Total 240,000 to
280,000

120,000 to
150,000

60,000＋150,000

New Factory

Limburg Factory

New Factory

10,000＋30,000Total 70,000+

Total 180,000

37

Copyright © 2018 Harmonic Drive Systems Inc.

Major increase in global production capacity
2. Toward capacity of 280,000/month by 2020
We are aiming for higher corporate value by establishing supply capacity to meetgrowing demand and by further building our competitive strength
Plans for boosting production capacity of our precision speed reducers
Approx. 4.4x(monthly, 10,000s)
50.0
Approx. 2.9x40.0

USA:
Harmonic Drive LLC
43.0
43.0

s■ Boston Factory

3.0

on Factory
Germany:
Harmonic Drive AG

5.0

Factory

28.0
28.0

30.0

3.0

■ Limburg Factory

15.0Japan: Harmonic Drive
Systems■ New plants (Ariake, etc.)

5.0
20.0
10.0

10.0

8.5

10.0

10.0

(Current
現在 )By2020 (forecast)
2020まで（予測）After2020 (forecast)
2020以降（予測）

9.8
10.0

0.3

6.1
0.8
5.0

■ Ariake Plant

0.3

1.0
■ Hotaka Plant

0.0
2017/138
Copyright © 2018 Harmonic Drive Systems Inc.

Major increase in global production capacity
3. Productivity improvements
1. Enhancement of automated lines
2. Promotion of multi-skilled workers
3. Unflagging pursuit of improvements in fabrication,assembly, and inspection processes
Ariake Factory

39
Copyright © 2018 Harmonic Drive Systems Inc.

Raising the capability of each Group company
and building greater comprehensive strength
Main manufacturing sites
Crossed roller
bearings

HarmonicDrive®

In JapanHarmonic Drive Systems(Hotaka Factory)(Ariake Factory)• New line: equipment
installation completed• By March 2019, monthly
production of 100,000 units• Production started March2018• By March 2021, monthly
production of 100,000 units

Harmonic Precision(Matsumoto Factory)

Harmonic AD(Toyoshina Factory)• New plant building underconstruction• By March 2023, monthly
production of 150,000
units• Planning phased
investment in new
production equipment inline with demand growth

Germany: Harmonic Drive AG

South Korea: SAMICK
ADM

Overseas

USA: Harmonic Drive LLC

HarmonicPlanetary®

• Plan to acquire land for new plant inBeverly, Massachusetts (artist
rendition of new plant)• Can expand to land adjoining existing plants• Planning phased
investment in new
production equipment inline with demand growth

Copyright © 2018 Harmonic Drive Systems Inc.

40

Basic Policies of Mid-term Management Plan

Improve customer satisfaction by raising QCDS capability■ Normalize and reduce lead time from order to shipment■ Actively develop and market new products■ Build technology proposal strength and support capability

Strengthen the business foundation underlying growth■ Acquire and train human resources in line with sound growth■ Enhance business management platform drawing on IT■ Promote business management with the environment, society, andgovernance in mind

41
Copyright © 2018 Harmonic Drive Systems Inc.

3. Long-term Vision(moves aimed at growth to2030 and to 2050)

42
Copyright © 2018 Harmonic Drive Systems Inc.

Our business areas
Provision of Total Motion Control
Fog computing

Cloud

Big Data/AI

The concept of Total Motion Control
Mechanisms

IoT
Sensors

Speed
reducers

Controllers
ICT

Electric powersources/wirelesspower supply

MotorsOtherelements

Software

DriversRawmaterials
Production andfabrication
technology
43
Copyright © 2018 Harmonic Drive Systems Inc.

Expanding business opportunities■ Growth of Total Motion Control business
Our products are small, light, and high precision,features that will become all the more necessary
going toward 2030 and 2050
Mobility/aerospace
独カール・ツァイス社様提供

Innovation in industry

Co-bots/
service robots

株式会社ダイヘン様提供

Leading-edge
medical equipment(units)Flat panel display
manufacturing equipment
Semiconductor
manufacturing
equipment
Industrial robots

Innovation in life style

Machine tools

1970

1980

1990

2000

2010

2020

・・・

2050 44

Copyright © 2018 Harmonic Drive Systems Inc.

Taking on the challenge of change toinnovative technologies
Futureoriented
moves

As the pace of innovation in society accelerates, we will foster
an institutional climate able to meet changes, with ourantenna raised high and even daring to try creative
destruction

 Deepen and expand joint development activities with SRI International Accelerate development of the Abacus drive and bring to market
 Expand the scope of joint development to other transmissions
 Take on the challenge of, and keep a close eye on, new materials andnew principles
 Promote active access to peripheral technologies
 Promote exchanges with research institutions and other industries
45
Copyright © 2018 Harmonic Drive Systems Inc.

Aim for further growth toward 2030 and 2050

Consolidated sales (100 mil. yen)
Planned204
Actual
181

210

260

290

259

282

1,000

350
300

545

Three well-balanced
business segments

50th anniversaryof founding
FY2012-14 Plan
FY2012 to 2014

Previous Mid-termManagement Plan
FY2015 to 2017

New Mid-termManagement Plan
FY2018 to 2020

MT

MT
AD
RD

RD

To FY2030

AD
To FY2050

46
Copyright © 2018 Harmonic Drive Systems Inc.

The performance targets and other numerical data
presented herein are forecasts based on information
available to the HDS Group at the time this material was
prepared, and are subject to the influence of uncertainties
including those in the economic and competitiveenvironment. Actual performance may therefore differ
materially from the forecasts given in this material.

For more information:
Please contact us as follows for material contents and investor information of all kinds.
Corporate Planning and Finance Division, Harmonic Drive Systems Inc.
Ichigo Omori bldg. 7F, 6-25-3 Minami-Oi, Shinagawa-ku, Tokyo 140-0013 Japan
Email: ir@hds.co.jp
Website: https://www.hds.co.jp/