May 13, 2024
Company:
Representative:

Harmonic Drive Systems Inc.
Akira Nagai, President,
Representative Director(Code number: 6324 Tokyo Stock ExchangeStandard Market)
Contact:
Akira Maruyama, Representative
Director
Makiko Ono, Executive Officer
Phone:+81-3-5471-7810

Notice Regarding New Medium-term Management Plan for Fiscal Years 2024-2026
Harmonic Drive Systems Inc. (hereinafter “the Company”) hereby announces that the Company formulated a
medium-term management plan for the three years starting fiscal year 2024, fiscal years 2024-2026. The outlineof the plan is as described below.
◼ Targets and Results of the Medium-term Management Plan (FY2021-FY2023)
During the period under the previous medium-term management plan for fiscal years 2021-2022
announced in May 2021, the demand for products, mainly in applications for industrial robots andsemiconductor manufacturing equipment, remained at a high-level due to factors such as a recovery ofinvestment in automation which had been on hold, affected by the global spread of COVID-19, and anincrease of capital investment led by a rising demand for semiconductors.
The Harmonic Drive Systems Group (hereinafter “the Group”), under the basic policy of QCDS
“Providing value that meets customer expectations,” has engaged in quality improvement and cost andlead time reduction by ensuring production transformation, such as production capacity enhancement by
mainly’ investment in factory automation, stable component procurement through building robust supply
chain structure, and digitalization of production management to ensure an appropriate response to anincreasing demand for our products.
In the business environment of the Group in fiscal year 2023, the Group faced a severe situation with thesignificant drop of orders due to cautious behavior being observed in capital investments in China’s
manufacturing and semiconductor industries as well as slower inventory adjustments of our products bycustomers. Sluggish orders led to the lower operating rates of production plants in Japan. However, theCompany considered this a unique opportunity to further improve productivity and quality of our products
to be ready for future demand increases and has proactively engaged in restructuring and improvements.
Net sales and the amount of profit for fiscal year 2023 fell below the plan; however, the Company has
engaged in establishing a foundation for coming expansion of demand.
FY2023 (Targets)
Amount(Million yen)

Ratio toNet Sales (%)

FY2023 (Results)
Amount(Million yen)

Ratio toNet Sales (%)

Net Sales
70,000100.055,796100.0
Operating Profit
15,00021.4
1240.2
Profit (loss) attributable to10,50015.0(24,806)–owners of parent** Loss attributable to owners was ¥24,806 million yen due to the recording of ¥28,159 million ofimpairment losses of intangible assets related to Harmonic Drive SE, a consolidated subsidiary.
1◼ Our Vision and Materiality
The Group promotes its unwavering mission of contributing to social and technological innovation throughmotion control technology. The market for mechatronics and precision speed reducers, in which weparticipate, is contributing greatly to the emerging social and technological innovation, including
electrification of vehicles and surgical robots, and such demand is expected to continue to expand. At thesame time, with the acceleration of automation, demand for collaborative robots in addition to a newmarket for “humanoid robots,” is expected to increase amid the worldwide labor shortage. To properlycapture these growth opportunities, the Group aims to further strengthen its business foundation by newly
formulating a new medium-term management plan (fiscal years 2024-2026). We also reevaluatedmaterialities considering them as important issues to achieve our vision.

◼ Medium-term Management Plan
Considering value creation and transformation to be the two key factors to achieve our mission and value,
the Group strives for solving issues to be addressed according to its basic policies set on three pillars: 1)
what we are striving to do, 2) what is necessary for that, and 3) sustainability.

2◼ Medium-term Management Plan for Fiscal Years 2024-2026 Targets (Consolidated)
FY2023 (Results)

Net Sales
Operating Profit
Profit (loss)
attributable toowners of parent

FY2024 (Forecast)

FY2026 (Plan)

Amount(Million yen)

Ratio to Net
Sales (%)

Amount(Million yen)

Ratio to Net
Sales (%)

Amount(Million yen)

Ratio to Net
Sales (%)

55,796
124

100.0
0.2

58,500
2,700

100.0
4.6

90,00015,000100.0
16.7(24,806)

–

2,000

3.4

11,000

12.2◼ Target Management Indicators
Towards realizing sustainable growth and long-term enhancement of corporate value, the Group has newly
added ratio of operating profit to net sales of 15% or more and a ratio of net sales to EBITDA of 25% ormore as a “cash generation ability indicator” for net sales as indicators in the medium-term management
plan (fiscal years 2024–2026) as the Group’s important management indicators. As an important financialindicator, in addition to return on equity (ROE), ROIC is a new indicator. Assuming that a comparable
capital cost (WACC) is at approximately the 9% level, setting a target of return on equity (ROE) and ROIC
at 10% or more, we aim to improve return on capital through conducting management aware of theoperational efficiency of invested capital.
◼ Dividend Policy
The Company sets a consolidated dividend payout ratio of 30%, and aims to sustainably increase theamount of dividend through profit return reflecting consolidated business performance.
* The contents contained herein are based on information available to the Company and various assumptions
for the future at the time of the announcement of the document, and are not a guarantee of achievement of themedium-term management plan.

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