Shaping the future with“tsunagu” technology
Fujikura Ltd.
1-5-1, Kiba, Koto-ku, Tokyo 135-8512

https://www.fujikura.co.jp/eng/Editorial Policy

Foreword

Basic Policy
In editing Fujikura Group Integrated Report 2023, we focused on giving shareholders, investors, and other stakeholders
an understanding of initiatives targeting sustained growth of the Fujikura Group from multiple perspectives.

Reference Guidelines○ IFRS Foundation International Integrated Reporting Framework○ GRI (Global Reporting Initiative) Sustainability Reporting Standard

Naoki Okada

Representative Director, President and CEO○ METI (Ministry of Economy, Trade and Industry) Guidance for Integrated Corporate Disclosure andCompany-Investor Dialog for Collaborative Value Creation

Detailed Information Concerning Account Settlement
Please see Financial Data for details about FY2022 settlement of accounts.
https://www.fujikura.co.jp/eng/ir/index.html

Scope of Report
Target period : April 1, 2022 to March 31, 2023 (Includes some content from after April 2023)
Target organization : Fujikura Ltd. and the Fujikura Group

Forward-looking Statements

We publish the Fujikura Group Integrated Report to help shareholders, investors, and otherstakeholders to understand what type of company the Fujikura Group is, the future vision we target,
and the value we provide to society.
Since it was founded in 1885, the Fujikura Group has contributed to the growth of society inthe energy, telecommunications, electronics, automotive , and many other sectors through ourenterprising spirit and our position as “Fujikura, a technology leader” as our DNA. A wide rangeof technological innovations will presumably take place as the world continues to undergo majorchanges. I think the purpose of the Fujikura Group is to create exceptional value for our customers
around the world using “tsunagu” (connecting) technologies.
The three-year Mid-term Management Plan announced in May 2023 positions the three areas ofInformation Infrastructure, Information Storage, and Information Terminals as core business areas. We
will strive to create value for customers through our position as a technology leader, mainly in theseareas. We also formulated Sustainability Targets 2025, which sets out four themes, adding Financial/
Future (F) to the existing ESG (Environmental (E), Social (S), and Governance (G)) elements, and will
provide value to all stakeholders through initiatives aimed at realizing a sustainable society.
I hope the Fujikura Group Integrated Report helps everyone to understand Fujikura Group initiatives
better and will provide an opportunity for dialog with our stakeholders. I ask for your greater
understanding and continuing support of the Fujikura Group in the future.

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Fujikura Group Integrated Report 2023

The financial forecast and descriptions relating to future predictions for Fujikura Ltd. and its consolidated subsidiaries containedin this report describe the outlook at the time of editing, and include latent risks, uncertainties and other factors. Therefore, these
forecasts are not a guarantee of future performance, and results may vary widely due to various important factors.

CONTENTS
Foreword

2

Contents / Editorial Policy

3

Source of Value Creation
Fujikura Group Corporate Philosophy (MVCV)

4

History of “Fujikura, a technology leader”

6

Value Creation Performance
Power & Telecommunication Systems Business

42

Electronics Business

44

Automotive Products Business46

Real Estate Business48

Basic Policy on Sustainability Management

50

The “Tsunagu” Connecting Technologies that Support Our Lives 10

Non-financial Highlights

52

Message from the CEO

12

To Achieve Carbon Neutrality

54

Value Creation Model

18

Identifying Climate Change-related Risks and Opportunities 56

Three Competitive Advantages

20

Being a Leader Driving Value Creationand the Strategy
Mid-term Management Plan

22

Message from the CTO

28

R&D, Intellectual Property, and Quality Control

32

Message from the CFO

36

Financial Highlights

40

Expansion of Environmentally Friendly Products

58

Human Resource Development

60

Supply Chain

64

Special Initiatives of the Fujikura Group
Fujikura Kiba Millennium Woods

66

Supporting Fujikura Gakuen

68

Value Creation Platform
Corporate Governance

70

Interviews with Outside Directors

76

Top Management

80

Corporate Profile

82
Fujikura Group Integrated Report 2023

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Source of Value Creation

Fujikura Group Corporate Philosophy (MVCV)The only way to create these new paths is to provide a value experience exceeding our customers’ imaginations.
To exceed our customers’ imaginations, we must be fully aware of the issues our customers face,and consider everything from their points of view.

Finally, the key factor in following this path is for each of us to proceed virtuously as a member of society.

Standards of Conduct
Show interest proactively
S

Exceed expectations
E

L
Let’s
always think about how to provide valuetthat
exceeds expectations

Let’s be open to diverse opinions and create new ideas
L
Drive change
D

Let’s be bold in trying something differentL

We dedicate ourselves to providing exceptional products and solutions,earning our customers’ trust and contributing to society.
We proactively seek better ways to solve customer issues using our products, skills, and services.
By doing so, we deliver value that fulfills customer needs and thus contributes to solving social issues and building a better society.

VisionFujikura’s vision is to be the most trusted partner in our markets.
We want our customers to reach out to us first with their issues and concerns.
We can ensure this by building trust through consistently fulfilling our promises and working together with our customers as their partner of choice.
With credibility built over time, we can create a better tomorrow for our customers.

We strive to become the leading player in our markets by utilizing our “tsunagu” technologies,
and tirelessly developing innovative and useful products and solutions.
We strive to always be the pioneers in our field and to have a positive impact on society.
We realize this through being aware of changes in the world. In addition,
we continuously develop products and solutions that meet the existing and potential needs of our customers.

Each individual within the company will endeavor to become an essential player,
thus developing a team that can truly help Fujikura make its mark on the world stage.
Everyone in the Fujikura Group understands our common goal and plays his/her part in achieving it.
With everyone working together as one, the Fujikura Group competes on the world stage.

Core Value
Customer Satisfaction “Are you doing enough to ensure customers are perfectly satisfied?”

Aspire firstA

Take ownership with integrityTLet’s be professional and accountable for our own actions
L

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Fujikura Group Integrated Report 2023

Change “Are you willing to take up challenges to drive progress?”
In order to respond to ever-changing social and customer needs, each of us will challenge current norms and values.
By doing so, every one of us is accountable for creating changes for the better in people, organizations, products, and solutions.

Value Creation Platform

Customer satisfaction refers not only to satisfying external customers and consumers, but also internal customers such as fellow employees.
We consider internal and external customers’ viewpoints, think about how to truly fulfill each need, and then reflect this in our products and services.

L
Let’sstart with our aspirations and work backffrom those to calculate what the next action should beSpecial Initiatives of the Fujikura Group

Embrace different opinions
E“Tsunagu” technology refers to the Fujikura Group’s unique set of capabilities (including skill and knowledge).
Through the application of our technology, we create opportunities to connect people, information and power sources.

Value Creation PerformanceL
Let’s
proactively take an interest in social andmmarket trends and reflect on our work

The Fujikura Group’s mission is to create exceptional value for our customers around the world using“tsunagu” (the Japanese word meaning “connecting”) technologies.

Being a Leader Driving Value Creation and the Strategy

To be fully aware of the issues our customers face and consider everything from their points of view,
we must strive to acquire a broad range of knowledge and information as highly-active, flexible,
and open-minded teams.

MissionSource of Value Creation

Since the start of our 3rd Era in 2005, we have striven to create new paths based on the Group Corporate Philosophy, MVCV.
In a society that is undergoing dramatic transformation, the Fujikura Group resolves to create new paths with renewed
strength, in order to become a company with the potential to continue long into the future.

Collaboration “As a Fujikura associate, are you driven to work together with others to deliver
the best possible result for our company?”
In the Fujikura Group, each one of us acknowledges individual differences and talents.
We encourage and support one another’s efforts.
As a whole, we strive to create products and solutions that meet the existing and potential needs of customers through cross-organizational cooperation.
Fujikura Group Integrated Report 2023

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Source of Value Creation

The History of “Fujikura, a technology leader”

The DNA of the Fujikura Group

Zenpachi Fujikura, Founder

Tomekichi Matsumoto, first President

Tomekichi Matsumoto, who was the youngest brother of the founder, Zenpachi Fujikura, helped Zenpachi byresearching rubber-insulated wiring.
When Zenpachi died, Tomekichi formed a company from Zenpachi’s sole proprietorship as his successor andestablished Fujikura Electric Wire & Rubber Co., Ltd. in 1901. Tomekichi’s vigorous efforts contributed to steady
growth of the electric wire business and he established Fujikura as the technology leader the company still is today.
Fujikura Electric Wire Corporation (now Fujikura Ltd.) was established in 1910, when the electric wire business was
spun off due to the need to expand the electric wire business.

Harukichi Nakauchi

Harukichi Nakauchi was the blood brother of Zenpachi Fujikura but was adopted into the Nakauchi family.
He helped Zenpachi with the electric wire business, improved manufacturing machines, and made othercontributions to the development of manufacturing technology.
Harukichi researched electric insulation paper and punched tape for transmission, which they had to source fromoverseas at the time, and took part in the development of insulation paper made in Japan, among other things.
He worked with partners to support management of company since its founding.
In his later years, Harukichi undertook charitable projects and established Fujikura Gakuen facility for mentallychallenged children and adults on Izu Oshima island in 1919, as the starting point for social contributions.
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Fujikura Group Integrated Report 2023

1932

1935

Five large braiding machinesimported from the USA by
Zenpachi Fujikura

44 kV triple-core SL cable supplied to the Yamaguchi
Prefecture Electric Power Bureau (a first in Japan)

Patent acquired on Fujikura’s proprietaryhigh-frequency coaxial cable

Beginning1885 Zenpachi Fujikura founded the company and began manufacturingsilk and cotton insulated winding wires in Kanda-Awajichō1887 Zenpachi Fujikura imported five large braiding machines from the USA
1888 Began manufacturing Tokyo wires, paraffin wires and lamp cords andresearching rubber-insulated wires

Laying the Foundations of Fujikura1893 Company began manufacture of first rubber-insulated wires in Japan1901 Fujikura Electric Wire & Rubber Co., Ltd. established,began producing rubberized fabric1910 Fujikura Electric Wire Corporation established1919 "Fujikura Gakuen", a special facility for mentally-challenged
children and adults, established on Izu Oshima island

Founding location: Kanda-Awajichō Plant

Post-earthquake Recovery and Technological Advances
1923 Head office and plant relocated to Fukagawa where it was totally
destroyed by fire in the aftermath of the Great Kanto Earthquake(Rebuilt the following year)
1931 Began manufacturing “Fujikousen” electric wire for aircraft
1932 44 kV triple-core SL cable supplied to the Yamaguchi Prefecture
Reconstructed Fukagawa Plant
Electric Power Bureau (a first in Japan)
1935 Patent acquired on the Fujikura’s proprietary high-frequency coaxial cable1941 Began manufacturing aluminum wire
1943 Began manufacturing Fujikura-type 100 kW coaxial cables

Fujikura Group Integrated Report 2023

Value Creation Platform

An engineer who built the starting point for social contribution andsupported business development

1887

Special Initiatives of the Fujikura Group

Inherited the aspirations of Zenpachi andestablished the foundation for “Fujikura, a technology leader”

Known for its technology, Fujikura has contributed to the creation of an abundant society by
establishing electric power and communications infrastructure

Value Creation Performance

The history of Fujikura began in 1885 when Zenpachi Fujikura began manufacturing silk andcotton insulated winding wires. Zenpachi foresaw the advent of the age of electricity when he saw
the electric light from an arc light debuted on Nihonbashi Avenue and it sparked his interest inelectricity.
Zenpachi operated a braiding business in Kanda-Awajichō at the time and embarked on theelectric wire business because that braiding resembled the braiding technique for electric wire
insulation.
Zenpachi, who had also begun researching rubber-insulated wires, worked to expand the businesswith Harukichi Nakauchi and Tomekichi Matsumoto and contributed to the development of society
by using advanced technology to provide the world with more reliable products.

1885- The Beginning

Being a Leader Driving Value Creation and the Strategy

Demonstrated originality and ingenuity,and made the effort to continually make progress

Source of Value Creation

Since its establishment in 1885, we have placed importance on outstanding technological strengths, the ability to respondto social changes, and long-term relationships of trust with customers, based on our “enterprising spirit” and standing as"Fujikura, a technology leader", which we have passed on as the DNA of the Fujikura Group.
The world will undergo major changes in society in the future too and a wide range of technological innovations will take place.
We should find opportunities in such societal changes and technological development. The Fujikura Group will continue tocreate value for customers and contribute to society through our “tsunagu” (connecting) technologies.

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Source of Value Creation

The History of “Fujikura, a technology leader”

2005- 3rd Phase of Reinvention

Expansion into the power and telecommunication systems and diversification leading to current business
Strengthened our technological footing while pressing forward with globalization and new businesses

Set forth a long-term vision and pursued further technological development and market access

1985

1999

Japan’s first OPGW (Optical Fiber Composite
Overhead Ground Wire) developed

World’s first core alignment optical fiber fusion
splicer developed

500 kV CV cable supplied for the cable line
between Shin-Keiyo and Shin-Toyosu Substations

2005 120th anniversary; adoption of new management principles: MVCV (Mission, Vision, Core Value); andestablishment of America Fujikura Ltd. to manufacture and sell electrical components for telecommunications
and automotive applications
2007 Shattered the critical current world record with an Yttrium-based oxide superconducting wire2008 Spanish wiring harness manufacturer becomes a wholly owned subsidiary of Fujikura and changes corporatename to Fujikura Automotive Europe S.A.U.
2009 Began manufacturing fiber lasers

Numazu Plant upon completion2013 Introduced in-house company system through reorganization
2015 The VAD method was recognized as a prestigious IEEE milestone

Sakura Plant upon completion

Fujikura Group Integrated Report 2023

2017 Transitioned to a corporate structure with an Audit & Supervisory Committee
2018 Released optical cable with the highest fiber count in the world (6,912-fiber
Wrapping Tube Cable® (WTC®))
2019 Joined the RE100 global corporate renewable energy leadership initiative

Suzuka Plant upon completion

1992 Changed corporate name from Fujikura Electric Wire Corporation to Fujikura Ltd.
1993 Delivered 500 kV CV cables and Hokkaido-Honshu optical fiber integrated submarine cables
1998 Supplied world’s largest 500 kV DC OF submarine cables to Kansai Electric Power Co., Inc. and J Power(Electric Power Development Co., Ltd.)
1999 500 kV CV cable supplied for the cable line between Shin-Keiyo and Shin-Toyosu Substations
2000 Established optical component manufacturer, Fujikura Fiber Optics Vietnam Ltd., in Vietnam
2001 Commercialized and began marketing FTTH optical fiber products
2003 Established Fujikura (Shanghai) Trading Co., Ltd. as a general import/export business in China

82016 The Fujikura Group declared complete recovery from floods in Thailand
Established Fujikura Group Long-term Environmental Vision 2050

2020 Fujikura’s cold plates used in the Fugaku supercomputer
Formulated 100-Day Plan to turn around operations
Began selling new 90R series of mass fusion splicers
2021 Abolished in-house company system through reorganization
Established the electronic components company, Fujikura Electronic
Components (Thailand) Ltd.

Fukagawa Gatharia redevelopment project

Value Creation Platform

Era of Globalization and New Technologies

2010 Established Fujikura Electronic (Thailand) Ltd. by unifying seven Thai group companies
Completed ‘Fukagawa Gatharia’ (Fukagawa re-development project); opened Fujikura Kiba Millennium Woods
Bio-Garden
2011 Great East Japan Earthquake, and Fujikura Group’s manufacturing bases
damaged by floods in Thailand

Era of Turbulence and Trials
1974 Began inspecting optical fiber base materials manufactured by the CVD method
1979 Began manufacturing FPCs (Flexible Printed Circuit boards)
1980 Developed single-mode optical fusion splicers
1981 Japan’s first OPGW (optical fiber composite overhead ground wire ) developed
1984 Established local subsidiary Fujikura (Thailand) Ltd.
1985 100th anniversary of Fujikura’s founding, developed the world’s first core alignment
optical fiber fusion splicer
1987 Successful fabrication of oxide superconducting wires, and completion of
the Optical Electronics Laboratory
1988 Developed world's first multi optical fiber fusion splicers Established local
subsidiary Fujikura Europe Ltd. in the UK

2023
Increased production of rare-earth-based
high-temperature superconducting tapes
for small fusion power plants

Special Initiatives of the Fujikura Group

1945 Complete destruction of Fukagawa plant during bombing of Tokyo(Rebuilt the same year)
1949 Delivery of Japan’s first 24-core TV camera cables to NHK(Japan Broadcasting Corporation)
1954 Numazu plant completed
1957 Began manufacturing wiring harnesses
1958 Established Tama Fujikura Gakuen
1965 Completion of the Sakura plant and beginning of manufacturing of printed circuits
using a die stamp method
1970 Suzuka plant completed

2020
Began selling new 90R series of mass
fusion splicers

Value Creation Performance

Post-war Era of Recovery & High Growth

2018
Released optical cable with the most cores in
the world (6,912 cores Wrapping Tube Cable®
(WTC®))

Being a Leader Driving Value Creation and the Strategy

1981

Source of Value Creation

1945- 2nd Phase of Reinvention

2022 Moved to the Prime Market on the Tokyo Stock Exchange
2023 Increased production of rare-earth-based high-temperature superconducting
tapes for small fusion power plants
Established Fujikura Kiba Millennium
Woods bio-Garden

Fujikura Group Integrated Report 2023

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Source of Value Creation

The “Tsunagu” Connecting Technologies that Support Our Lives
The Fujikura Group uses the “tsunagu” (connecting) technologies it has developed through electrical wire and cablemanufacturing since its founding in 1885 to provide products for people’s lives and society in a wide variety of areas. Our
goal is to realize a “Mirai” (future) society that is comfortable and sustainable.
Source of Value Creation
Being a Leader Driving Value Creation and the Strategy
Value Creation Performance
Special Initiatives of the Fujikura Group

Data Centers

Connectors for industrial
robotsElectronic equipment

SWR®/WTC®

Automotive

Electronic
wire

EV Charging
connector

EnergyMedicalACSR

Image fibers

power cables
60 GHz millimeter wave
wireless communication
module10

Fujikura Group Integrated Report 2023

Optical fiber fusion
splicer

FPC

Wiring harnesses

Control cable

Value Creation Platform

PlantsSmall oxygen
sensors
CMOS
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Source of Value Creation

Message from the CEO

Source of Value Creation

We create value for customers andcontribute to resolving societal issues through“tsunagu” (connecting) technologies

Being a Leader Driving Value Creation and the Strategy

Naoki Okada

Representative Director, President and CEO

Steering Toward the Sustainable Growth Phase as “the New Fujikura”
of management and Group employees, who worked as one
team on the many measures.
One of the key measures raised in the aforementioned 100Day Plan was strengthening Group governance. Nevertheless,as 2023 began, we discovered that a company director
who was the CEO of a U.S. subsidiary was suspected ofmisappropriating real estate and other company assets
for personal use and immediately launched an internal
investigation. An outside law firm was retained to conduct theinvestigation from an independent perspective and ensure
objectivity and fairness. The results of that investigation
revealed that the director had caused the U.S. subsidiary toacquire the land and buildings mentioned above under false
pretenses and used them personally over a certain period oftime. The director who was the object of this investigation
resigned from all positions held as a director of Fujikura and at
the U.S. subsidiary in May 2023.
We recognize two main factors as the causes of thisincident. The first was that authority over business decisions
and management was concentrated in the former director.
The other factor was the lack of effective checks on theformer director in the U.S. subsidiary at that time. To prevent
recurrence, we are making changes to the concentrationof authority in a specific officer in the U.S. subsidiary,strengthening the Group governance system and internal rules
at each operating company, and are educating officers andemployees, among other measures.
While the impact of this incident on the Group’s consolidated
financials is limited, we take the results of this investigation
seriously and are steadily implementing the abovementioned
measures to prevent recurrence. Once again, we apologize
for the great concern and trouble this caused shareholders,investors, and everyone involved.

Value Creation Performance
Special Initiatives of the Fujikura Group
Value Creation Platform

In FY2022, the Fujikura Group achieved record highs in both
net sales and operating income amid a complex businessenvironment beset by persistent increases in raw material
prices and supply shortages. Demand grew, mainly in our coretelecommunication systems business, and the weak yen also
contributed to performance.
In the Power&Telecommunication Systems Business,we
successfully executed our business strategy focused on the
optical connection solutions business, revolving around SWR Ⓡ/WTC Ⓡ *1 innovative optical cable, and captured demand forestablishing communication infrastructure mainly in Europe
and the U.S. and adding data center capacity accompanying
the growth in global data traffic. This resulted in substantial
growth in both sales and profit. The Electronics Business also
saw strong demand for flexible printed circuit (FPC), where
we have made progress on utilizing Fujikura’s strengths toshift our strategy to obtaining orders for high value-added
products, in addition to strong demand for connectors. The
Automotive Products Business faced considerable challenges
from an increase in the cost of launching products for new
vehicle models in North America, in addition to the negative
impact from surging transport and personnel costs.
In FY2019, the Fujikura Group posted a net loss of 38.5 billion
yen, the largest loss since it was founded. Chastened by thesevere deterioration in performance at the time, we resolutely
undertook structural reform of our businesses, which we
named the 100-Day Plan in FY2020-FY2021. During FY2021,
we completed the goals of this plan to push ahead to a rapid
recovery in each business through management restructuring,
strengthening Group governance, and unreserved selection
and concentration of existing businesses. We then embarked
on a sustainable growth phase as “the new Fujikura” in April
2022. I consequently think the strong performance in FY2022
is proof of the fruition of the concentrated efforts by members*1 An abbreviation of Spider Web Ribbon®/Wrapping Tube Cable®. An optical cable product developed by Fujikura that achieves the insertion of optical fibers at a high density in cables having a small-diameter.

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Fujikura Group Integrated Report 2023

Fujikura Group Integrated Report 2023

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Source of Value Creation

Message from the CEO

FY2022 was positioned as the entrance into the sustainablegrowth phase and a new structure was established withthe executive officer positions of Chief Financial Officer(CFO) and Chief Technology Officer (CTO), in addition to myposition as CEO. Under this structure, the CFO and CTO
handle financial affairs, which requires extensive professional
knowledge, and formulation of the strategies for technology
and development, respectively, while I propel company-wide
strategy as CEO.
When I reflect on the past year, I can already see a numberof achievements from this new management structure. For
example, involving the CFO in the process of discussing
whether or not to go ahead with investment projects
clearly defines the financial discipline, and forecasting theinvestment recovery period and projected earnings with ahigh degree of accuracy is enabling more rational decisions.
CFO is certainly an essential position for achieving stable

The business environment surrounding the Fujikura Group isincreasingly uncertain, beset by intensified conflict between the
U.S. and China, the prolonged invasion of Ukraine by Russia,

growth and building a solid financial structure while making
effective use of limited management resources.
The CTO ascertains all technology and R&D Fujikura
possesses, from development of basic and advanced
technologies under direct supervision of headquarters to
product development by each business unit,. This essential
position is responsible for the company-wide technology
strategy. In FY2022, the CTO took the lead on sorting out
the competitive advantages of and issues with Fujikura’s
technologies and clarified the areas of technology that weshould work on over the medium to long term, while viewing
Fujikura’s wide range of business areas from a panoramic
perspective. This is accelerating the metabolism of change
in each business and steady progress is consequently
being made on building the framework for creating newtechnologies and new businesses.

*2 Extremely large data centers either built by a business operator who needs massive data processing and storage or built under the assumptionthat they will be leased to business operators who provide cloud services, etc. on a global scale.

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Fujikura Group Integrated Report 2023

In addition to such FTTx applications, Fujikura is also taking
steps to capture business for hyperscale data centers, thedemand for which is increasing in Japan and overseas whereorder inquiries are strong. Hyperscalers cut back on large-scale
investment due to temporary inventory adjustments to adapt
to stay-at-home demand during the COVID-19 pandemic.
However, demand is now back on a path to growth and we areeyeing a rebound in growth over the medium to long-term.
The Middle Eastern, Asian, and Oceanian regions are promising
future markets. We see the 2025 Mid-term Management
Plan period as a time to “prepare” and will engage in steadymarketing to appeal the TCO*3 reduction benefits and otheradvantages.
The Fujikura Group is one of only a few manufacturers that can
provide total optical connection solutions, including everythingfrom manufacturing to installation, peripheral equipment andcomponents, construction, and maintenance, in addition tothese innovative optical cables. We also have a line-up of
optical fiber fusion splicers, in which we claim top global market
share, and many other components in addition to connectors.
Continuing steady growth of this business as a business pillar isanticipated during the 2025 Mid-term Management Plan period.
We are building a new SWR® plant on the grounds of Sakura
Works to accommodate global growth in demand and plan tocommence operation in 2025.
*3 TCO: Total Cost of Ownership, including construction

Electronics Business
The electronic components and connectors of the FujikuraGroup are used in a wide range of industries, including PCs
and smartphones, wearable devices, data centers, andmedical equipment. This highly profitable business utilizes thebasic and core technology groups of the Fujikura Group and isincreasing our presence in the market. We are expanding thisbusiness by meeting the need for high density, high-definition,
multifunctional products with our advanced manufacturing
technology and by partnering with corporate customers tocontribute to the creation of cutting-edge applications.
We will use Fujikura’s unique technologies to respond to theincreasingly faster pace of technological innovation of productgroups in the areas of Information Storage and Information
Terminals. Control over ultrafine-diameter CMOS camera
modules for use in endoscopes used in medical equipment
and other advanced products has been transferred from the
R&D Unit and we will work full-force on attracting customers
for these products.

Fujikura Group Integrated Report 2023

Value Creation Platform

on the innovative optical technology of the Fujikura Groupand high-speed wireless communication technologies willplay a main role in contributing to the formation of an ultraadvanced information society in the late 2020s.
Meanwhile, many countries have established a seriesof hyperscale data centers*2 due to the proliferation andexpansion of cloud services, social media, generative AI,
and other technologies in recent years. Information Storage,
the second area specified, is a business area targeted at
this rapidly growing market. We will continue to be heavily
involved in the design and the construction of data centersto store massive amounts of data through Fujikura’s uniqueelectronic component and ultra-high-density optical wiring
technologies.
Information Terminals, the third area, targets areas that
include smartphones and PCs, virtual and augmented reality(VR/AR) headsets, and next-generation vehicles (connectedc a r s ) . We a i m t o u s e t h e h i g h - d e f i n i t i o n e l e c t ro n i ccomponents and wiring and mounting technology Fujikura
possess to achieve innovation in information terminals andgrowth in profit.
We will endeavor to manage our businesses in a wellmodulated manner, mainly in the three areas above, andcreate value for customers while also contributing to society.

The competitive advantage of the Fujikura Group, compared toother companies in the same industry in Japan, is having widelydispersed operations in the U.S., Europe, China, and othercountries. This is a strength because another region can provide
cover even when the market in a certain country or region
shrinks temporarily. SWR®/WTC® optical cable commercializedusing technology developed by Fujikura is also the core of thisTelecommunication Systems Business. Major communications
providers in the UK as well as the London Undergroundhave opted to use SWR®/WTC® to install 5G communication
networks. This has increased Fujikura’s presence and we are
now focusing on expanding this business on the European
continent and in the U.S. The optical fiber network penetrationin Japan has reached 99% and is nearly complete. However,the penetration rate has only reached 40% to 50% in someareas of Europe and the U.S. and there is still much room for
growth. In Europe and the U.S., existing underground conduits
in many regions are jam-packed with other cables. Thin, ultrahigh-density SWR®/WTC® can increase fiber capacity without
rebuilding or building new conduits so this can contribute tolower construction costs and a lower environmental impact.
During the 2025 Mid-term Management Plan, we plan to launch
new products that are compliant with safety and other standards
in the European region. We will also respond to the need for
products that are thinner diameter, smaller size , and are multicore through continuous technological innovation.

Special Initiatives of the Fujikura GroupIn May 2023, we announced the 2025 Mid-termManagement Plan, a three-year medium term plan ending in
FY2025, to achieve sustainable growth of the Fujikura Groupand further enhance corporate value.
The plan targets growth to around 820 billion yen inconsolidated net sales, 22% growth in operating income
to 85 billion yen compared to FY2022, and an operating
margin exceeding 10% during the plan period, stemmingfrom the core businesses of the Telecommunication Systems
Business and the Electronics Business. The major business
policies established are to make liberal use of basic and coretechnology groups and position “Information Infrastructure”,“Information Storage”, and “Information Terminals” ascore business areas where we can use our “tsunagu”(connecting) technologies to contribute to the realization ofadvanced information society in a future where all things areconnected. Our goal is to concentrate investment in thesethree areas and be a highly profitable corporate group thatis able to sustain a sufficient operating margin over the longterm.
Information Infrastructure is an area involving the platform
to support a smart society where AI, IoT, and other digitaltechnologies have penetrated to every corner of people’s
lives and industry. I think optical connection solutions based

Telecommunication Systems Business

Value Creation Performance

Overview of the 2025 Mid-term Management Plan

increases in the price of raw materials and energy, and other
unsettling factors. I will talk about the medium to long-term
forecasts for our main business markets and our main strategy.

Being a Leader Driving Value Creation and the Strategy

Medium/Long-term Market Environment Forecast and Main Strategy
Source of Value Creation

Achievements from the New Management Structure

15

Source of Value Creation

Message from the CEO

generation high-end vehicles. We will strive to transform into aphysically fit organizational structure while engaging in activities
to obtain orders with a focus on profitability.
The Fujikura Group has already begun joint developmentwith multiple customers aimed at new markets createdby CASE and are planning to create new businesses withmillimeter wave (mmWave) modules for connecting to highspeed, high-capacity wireless communications services and
FPCs for battery monitoring. We are also actively working to
identify businesses based on the projection that the market forsuper fast EV charging, roadside communication equipment
and related devices will expand along with the proliferation ofelectric vehicles.

Creation of New Businesses That Can Contribute to a Sustainable Society

diverse employees can contribute effectively, regardless ofnationality, gender, age, or which company they came from.
We also plan to revise the personnel and work systems toaccommodate a more diverse workforce with a changing senseof values and strengthen the human resource development
system. The Fujikura Group especially focuses on growth inoverseas markets as a key strategy, so we recognize the needto put more effort into hiring and developing globally versatile
human resources. Because the human resource strategy is
deeply tied to business strategy, we are engaging in a series of
discussions on implementing more strategic measures while
maintaining a panoramic view of the Group as a whole.

Passing on Our Enterprising Spirit and Standing as “Fujikura, a technology leader” as Our DNA
The Fujikura Group started as sole proprietorship foundedby Zenpachi Fujikura in 1885. Shortly before founding thecompany, Zenpachi and his wife made hair accessories called
Negake by hand in their home. One day in 1884, Zenpachi
saw the dazzling electric light from an arc light on Nihonbashi
Avenue in Tokyo and, foreseeing the advent of the age ofelectricity, used the hair accessory manufacturing technology
to produce electric wire. When I first heard about this episodewhich led Zenpachi Fujikura to launch an electric wire business,
I was impressed by the enterprising spirit exhibited.
Every time society has undergone a major change sincethat time, Fujikura has innovated or applied its characteristic
technologies to quickly commercialize new products to
respond to those changes. In other words, we can say thatthe enterprising spirit of the founder has been passed down in
the Fujikura Group over 138 years. We have been able to talkabout “Fujikura, a technology leader” for many years, owing
to our history of differentiating our products from those ofcompetitors by continuing to refine our unique technologies.
We therefore decided to name “enterprising spirit” and “Fujikura,a technology leader”,which are elements of our DNA, when
we put together the 2025 Mid-term Management Plan. I think
we should prioritize rebuilding Fujikura brand as a technology
leader to achieve sustainable growth.
The world will undergo major changes in social structurein the future too and we should develop a wide range ofinnovative technologies. This process of change is precisely
what provides the opportunity to utilize the outstanding
technologies of the Fujikura Group. I think the purpose andsignificance of the Fujikura Group will continue to be thecreation of value for customers and contribution to society
through Fujikura technologies that connect people, information,energy, and opportunities. My personal motivation is to develop
businesses with a good balance between earning power andsocial participation, and pass these on to the next generation.
I also intend to make sure that we are certain to achieve thesustainable growth phase.
If we can achieve the financial and sustainability targets in the2025 Mid-term Management Plan, the Fujikura Group should
evolve into a corporate group brimming with future potential
with even higher earning power. I invite all of our stakeholders
to look forward to the fruition of the various measures set forthin the 2025 Mid-term Management Plan.
The Fujikura Group will continue to contribute to thedevelopment of an advanced information society while passing
on our enterprising spirit of taking on new challenges andour position as “Fujikura, a technology leader” in pursuing
advanced technology, as our DNA. I ask all of our shareholders
and investors for your continued support.

Fujikura Group Integrated Report 2023

Value Creation Platform

Fujikura Group Integrated Report 2023

It goes without saying that human resources are the driving
force behind achieving the numerical targets for the 2025 Midterm Management Plan and the Long-term Environmental
Vision, and the thought “without human resources, there isno growth” is ever present in my mind. My ideal is to create avirtuous cycle in which the growth of each and every employee
brings about growth as a company and enhances corporate
value which, in turn, leads to higher motivation and engagementof each employee. We will provide strong support as a company
to assist employees in independently building their careers andactively taking on bold challenges to achieve that.
In the future, we will work to build an organization where

Special Initiatives of the Fujikura Group

16

issues involving climate change and energy and I think they aregood opportunities to create new businesses.
The use of high-temperature superconducting materials in
nuclear fusion power generation is anticipated in the future. The
reactors are carbon neutral because they use deuterium takenfrom seawater for fuel. This is said to be an ideal energy sourcethat also offers a high degree of safety. The superconducting
devices currently used widely employ low-temperature
superconducting materials that require liquid helium for cooling.
However, the rare-earth-based superconducting tape Fujikura
is developing is promising technology that does not use liquid
helium. This is promising technology from the perspective of
not needing expensive helium, which the Russian invasion of
Ukraine has made difficult to obtain, and we look forward to
rapid commercialization. The superconducting materials we aredeveloping demonstrate top world class performance.
Fiber lasers are a type of solid-state laser that uses opticalfibers for the amplification medium. They are used to transmit
optical energy, in ultra-fine processing, and in welding andcutting, among other uses. Fiber lasers are highly energyefficient compared to other processing methods and help toreduce the impact on the environment.
Super fast charging technology increases battery capacity
in electric vehicles and addresses the need for rapid chargers
with higher output. In 2023, the Fujikura Group introduced aliquid-cooled connector cable for rapid chargers ahead of othercompanies. We are currently developing products with evenhigher output chargers in sight.
The Fujikura Group is also focusing on the Innovative
Optical and Wireless Network (IOWN) concept of NTT andviews this as a project that will change the world. It naturally

Plans to Create an Organization Where Diverse Human Resources Can Contribute
Effectively and Strengthen the Development System

Value Creation Performance

As a company that operates its business on the world stage
with over 50,000 employees in the consolidated Group, theFujikura Group is deeply involved in infrastructure in various
countries and regions. We also have a lineup of numerous
environmentally friendly products. I think these products likely
offer hidden potential to make a significant contribution to theformation of a recycling-oriented society.
I think two things are needed to contribute to the sustainable
development of society and solve social challenges fromthe standpoint of the global manufacturing industry. They
are implementing sustainable management and developing
products that are useful in building a sustainable society.
For the former, we formulated Fujikura Group Long-term
Environmental Vision 2050 in 2016, set four challenges forachieving carbon neutrality, beginning with zero CO2 emissions
from plants in 2050, and established a roadmap to accomplish
them. The new SWR® plant I just mentioned is one example
of practical implementation of sustainable management.
The goal is to achieve net zero CO emissions from the time
the plant begins operating in 2025, through a combinationof installation of solar panels on the roof, in-house power
generation, energy conservation, and purchasing energy. The
five-year Sustainability Targets 2025 (FY2021–FY2025) also
add “Financial/Future” to ESG perspectives in determining theimpact that the environment and society have on corporate
performance.
For the latter, we have designated the three key areas ofhigh-temperature superconducting materials, fiber lasers, andsuper fast speed charging technology, and are accelerating
commercialization with an eye toward Beyond 2025. Each ofthese is promising technology that will contribute to solving

communications year after year. We are also participating inNTT’s forum and have begun developing the multi-core fiberand connectivity components needed by the concept.

Being a Leader Driving Value Creation and the Strategy

Over the past several years, the Automotive Products
Business has continued to struggle as the COVID-19 pandemic
and accompanying shortage of semiconductors caused
automotive manufacturers to reduce production volume.
Meanwhile, the automotive industry is undergoing a once-ina-century transformation represented by CASE (Connectivity,
Autonomous, Sharing and Electrification) and the FujikuraGroup views this as a new business opportunity.
During the 2025 Mid-term Management Plan, we will first work
to improve sales and profit in wiring harnesses and provide
solutions to customers that include peripheral equipment. The
Group is taking the initiative to develop complex wiring harness
products that only Fujikura can provide, targeted at next-

offers performance capable of processing a large amountof information without delay, and the concept is directlytied to resolution of the societal problem of increasing
electricity consumption accompanying the growing volume of

Source of Value Creation

Automotive Products Business17

Source of Value Creation

Value Creation Model

OutcomeEnhancement of
the Fujikura brand

Customers, Shareholders,and Employees

OutputWhat we deliver to society
Evolving & Developing
Existing Businesses

Business Process(Forecasting)Source of value creation

Information Infrastructure
Contribute to the construction of
information and communication
infrastructure to realize an advanced
information society

Fujikura Group corporate philosophy MVCV

Inputs for business activities

Rapid materialization of next-generation technologies and products“Tsunagu” (Connecting) Technologies

Core technology
groupsBasictechnology
groupsDesigntechnology

Processing andassembly technology

Manufacturing
equipment design

Precision processing
technology

Inspection
technology

Material analysis
technology

Manufacturing
technology&

Building deep relationships oftrust with customers andsuppliers

Natural Capital
Minimizing negative impact on the
global environment, in line withthe long-term vision

18

Fujikura Group Integrated
Report2023
フジクラグループ
統合報告書
2023

Analysis technology

tu

rin

g

○High-definition electronic components andwiring and mounting technology

Contributes to the development of
nuclear fusion technology andthe solution of energy issues

nt
me

ure

Organizational culture capable ofresponding to change

Ma

ia
ter

ls

Three Advantages Providing
Competitive Superiority

2030 Vision○ Controlling all GHG emissions○ Responding to the risks of climate change

Stakeholders Impacted

Superconducting Wire

AI technology

Pr
oc

ac

Issues Recognized○ Global Environment

Fiber Lasers
High energy efficiency contributes toenergy conservation in metal
processing, etc.

Society

Value Created○ Abundant lifestyles through an advanced
information society○ Improving labor productivity through HealthManagement

Issues Recognized○ Ethical supply chain management○ Ascertaining & responding to social trends

Electric Vehicles
Super fast charging technology
contributes to the proliferation ofelectric vehicles

Stakeholders Impacted○ Suppliers, societyLong-term
Environmental
Vision 2050

Achieving the medium andlong-term vision andcontributing to a sustainable
society

Value Creation Platform

Social Relationship CapitalufInformation Terminals(Backcasting)an

Developing human resources tolead innovation and fostering aculture to facilitate leadership

Possessing excellent customers andbuilding strong relationships of trust○Unique electronic component andultra-high-density optical wiring technologies

Contribute to the evolution of high-speed,
high-capacity and high-function
information terminals

Sustainability
Targets 2025

Global Environment

Value CreatedControl technology

Ability to Respond toLong-term
Relationships of Trust Societal Changes
M

Human Capital○ Customers, shareholders, and employees○ Contribution to transition tocarbon neutrality○ Product lifecycle

Accessing New Areas of BusinessIntellectual Capital
Concentrating investment in key
areas where Fujikura’s leadershipin technology is necessary

Stakeholders Impacted

Special Initiatives of the Fujikura Group

Prioritizing occupational health andsafety while engaging in rigorously
selected capital investments

Sale
s/P
os
t-s
al

Manufacturing Capital

Technological Strengths○ Maintaining & strengthening
competitiveness○ Evaluation in the capital markets

Value Creation Performance

Investment in growth businesses
while also carefully managing
earnings and assetseIssues Recognized

Information Storage

Contribute to the construction ofdata centers

nt
me
lop
ve
De

Financial Capital

Res
ea
rch

-up
w
llo
fo

○Optical cabling solutions based on
innovative optical technologies andfuture high-speed wireless communication
technologies

Value Created○ Sustainable growth of Fujikura○ Creation of customer value

Mid-term
Management
Plan

Being a Leader Driving Value Creation and the Strategy

Based on the Mission, Vision, and Core Values (MVCV),
which constitute the corporate philosophy of the Fujikura Group,
we will work to achieve sustainable growth of
the Fujikura Group and a better society byusing our “tsunagu” (connecting) technologies to work withour customers as one team and solve
the problems of our customers and of society.

What we strive forSource of Value Creation

The Fujikura Group contributes to customer value creation and society
through our “tsunagu” (connecting) technologies.

Input

Impact“Tsunagu” (connecting) solutions to solve
the problems of a comfortable and sustainable“Mirai” (future) society

Working with customers as a team to provide solutions

Fujikura Group Integrated Report 2023

19

1
Source of Value Creation

TechnologicalStrengths

Three Competitive Advantages

1

TechnologicalStrengths

Technological Strengths

Long-term Relationships of Trust with Customers“Tsunagu” (connecting) technologies to solve social problems

We work with the customer as one team to provide solutions

The Fujikura Group is using its “tsunagu” (connecting) technology platform as a base forpursuing initiatives aimed at resolving social problems.
We aim to develop our businesses by solving environmental problems, energy problems, andother social problems, and are actively pursuing development of new technologies and new
products, mainly in the energy and telecommunication systems, and the electronic products
and connector areas.

2Long-term
Relationshipsof Trust

Customers
Consultation on new
product development,
etc.

2Provision of solutions
and stable supply

Technology Platform

3

2
Long-term
Technical
Area/ Product Group
Relationshipsof Trust

Optical fiber

Opticalconnectors

Informationtransmission

Sensors
Advanced opticaldevices

Connect

Fusionsplicing
High-density
optical cable
Ultra-finecoaxial

CoaxialCore technology groups

Electronic
connectors

High-current
connections

Wiringharnesses

High-densityHiwiringg

Planar wiring
components

Solid wiring parts

Design technology

Superconducting
wire rod

Conductors andinsulators

Electric cables

M
Manufacturing technology

AI technology
Precision
processing
technology

Control
technology

Inspection
technology

Material
analysistechnology

3

The ability to maintain resilience developed by overcoming diﬃculties

Ability to Respond toSocietal Changes

The Fujikura Group has always succeeded in recovering from the numerous disasters it
has experienced. Our high degree of unyielding resilience in the face of difficulties is apart of Fujikura’s DNA. The major flooding in Thailand in 2011 is a symbolic example ofthis. Although the flooding also dealt a devastating blow to Fujikura Group manufacturinglocations, all Group employees demonstrated their strong will to restore operations andrecover. Their teamwork led to a declaration of complete recovery in 2016. We also owe our
success in recovering to the longstanding deep relationships of trust with our customers,
who gave us another chance at doing business with them.

Analysistechnology

Flooded Plant in Thailand

20

Fujikura Group Integrated Report 2023

Value Creation Platform

Basic technologies

Ability to Respond to Manufacturing
equipment
Societal Changes
designAbility to Respond to Societal Changes

Fiber laser

Processing andassembly technology

3

Fujikura’s concept for building relationships of trust

Ability to Respond toSocietal Changes

Energytransmission

Heat transfer
devices

Search out the latent needs of our customers’
end-users and society and develop products
and services demanded by the public.

We are working to ensure sustainablegrowth of the Fujikura Group and create abetter society by finding solutions to issues
experienced by customers and society. We
accomplish this by making customer value
creation part of the business activity cycle.

Special Initiatives of the Fujikura Group

Millimeter wave
Fiber devices

Fujikura Group

Value Creation PerformanceLong-term
Relationshipsof Trust

The Fujikura Group integrates sales, business
units, manufacturing, and development
to provide products that meet the needsof customers. The Group builds strong
relationships with customers and works withcustomers as one team to provide solutions
by meeting the needs and exceeding the
expectations of customers. We call this“customer value creation.”Being a Leader Driving Value Creation and the Strategy

TechnologicalStrengths

1
Source of Value Creation

The Fujikura Group recognizes three competitive advantages it has for using its outstanding technologies andknowledge gained through “tsunagu” (connecting) technologies to successfully provide optimal solutions forsocial problems. These three advantages are 1) technological strengths, 2) long-term relationships of trust withcustomers, and 3) ability to respond to societal changes.

Declaration of complete recovery in 2016
Fujikura Group Integrated Report 2023

21

Being a Leader Driving Value Creation and the Strategy

Mid-term Management Plan

An Enterprising Spirit and“Fujikura, a leader of technology”
as the DNA of the Fujikura Group

Fujikura was founded by Zenpachi Fujikura in 1885. When Zenpachi saw the electric arc light, he foresaw the age of electricity
the time. This technological strength was precisely what enabled the independent Fujikura Group to survive competition with thecompanies that were part of the conglomerates. I think an enterprising spirit to take on new challenges and standing as “Fujikura,a technology leader” comprise the DNA of the Fujikura Group. Innovation in a wide range of technologies will take place as theworld continues to undergo major changes. I think there will always be opportunities to utilize the outstanding technologies ofSource of Value Creation

and began manufacturing electric wire using the technology for negake, a women’s hair accessory which he was producing at

the Fujikura Group in places where such societal changes and technological progress are taking place. We will continue to place
importance on an enterprising spirit and the company’s standing as “Fujikura, a technology leader,” create value for customers,
and contribute to society through Fujikura Group “tsunagu” (connecting) technologies during this Mid-term Management Plan.

In the advanced information society of the future, each person will presumably possess an information terminal
and wearable devices of the augmented/virtual reality (AR/VR) glasses will replace smartphones. Vehicles, serving
as information terminals, will also be equipped with sophisticated communication functions and automated driving
will be made a reality, supported by data from monitoring the area around vehicles for safety and security. Each
information terminal will communicate back and forth with other terminals or be connected to other terminals throughcommunication infrastructure, and will also work together in a sophisticated manner. It goes without saying that
low latency, high-capacity telecommunication systems are essential in order to realize such a sophisticated digitalsociety.
The Fujikura Group has set three areas— Information Infrastructure, Information Storage, and Information
Terminals—in which we can use our “tsunagu” (connecting) technologies to contribute to the realization ofadvanced information society in a future where all things are connected.

We will steadily implement the policies of the Mid-term Management Plan and manage the business in an even sharpermanner. While the automotive wiring harness business will be restructured and downsized through a process of selection
and concentration, we will strive to expand the telecommunication systems and electronics business, which we see asareas of growth. Growth to around 820 billion yen in net sales in FY2025 is forecast for the Fujikura Group as a whole. The
focus is on improving profitability rather than overly relying on growth in scale and we will target operating income of 85
billion yen, and an operating margin exceeding 10%.

Net Sales

Operating Income(Billion yen)(Billion yen)
TOTAL

85.0（10.3%）

TOTAL

825.0

TOTAL

800.0

TOTAL

Information
Infrastructure
Information
Infrastructure“Tsunag u”
C o nnecti ng
Techno l o g i es

Information
Terminal

Information
Terminals
We will contribute to the evolution ofhigh-speed, high-capacity and highfunction information terminals throughhigh-definition electronic components
and wiring and mounting technology.
We also see next-generation vehicles as
information terminals and will contribute to
the realization and evolution of CASE.

22

Fujikura Group Integrated Report 2023

TOTAL

70.0（8.8%）
TOTAL

330.0

305.0

288.6

Telecommunication
Systems Business60.0（7.8%）

Telecommunication
Systems Business

50.0

Electronics Business
Automotive Products
Business
Power Systems
Business
Other

174.4

190.0

200.0

167.0

150.0

135.0

Automotive Products
Business
Power Systems
Business

40.0

Real Estate BusinessElectronics Business

Real Estate Business
Other

37.5

20.0

24.0

3.0
3.5
5.0

3.0
3.0
5.0

2023*

2024

2025

USD = 130 yen

USD = 120 yen

USD = 120 yen

Value Creation Platform

Through optical cabling solutions
based on innovative opticaltechnologies and future highspeed wireless communication
technologies, we will contributeto the construction of informationand communication infrastructure
to realize advanced informationsociety.

Information
Storage

We will contribute to theconstruction of data centersto store massive amounts ofdata through unique electronic
component and ultra-high-density
optical wiring technologies.

770.0

18.5
120.7

125.0

125.0
10.8
8.6

12.0

12.0

18.0

23.0

2023※

2024

2025

USD = 130 yen

USD = 120 yen

USD = 120 yen

2.1
4.3

Exchange rate

-0.5

Special Initiatives of the Fujikura Group

Information
Storage

Value Creation Performance

Performance Targets

Being a Leader Driving Value Creation and the Strategy

Core Business Areas in the Mid-term Management Plan

*Numerical targets at the time the Mid-term Management Plan was announced

Fujikura Group Integrated Report 2023

23

Being a Leader Driving Value Creation and the Strategy

Mid-term Management Plan

Information Terminals

High-capacity information and communication infrastructure is essential for building an information society and we think
the optical cabling solutions based on innovative optical technology of the Fujikura Group and future high-speed wirelesscommunication technology can contribute to building the infrastructure for an advanced information society.

■ Providing optical cabling solutions targeted at the proliferationof optical networks in countries around the world(Mainly in the U.S. and UK at present, and targeting
expansion to the next promising markets in the Middle East
and Asia in the future)

SWR®/WTC® Sales by Region
Japan

EuropeOther

Core count *Business Opportunities for and Creation of Value for Society by the Fujikura GroupU.S.

■ Electronic products for the whole range of digital devices (PCs, tablets, smartphones, wearable devices, AR/VR, etc.)

Responding to Rapid Technological Innovation with Fujikura’s Unique Technology■ Using high-speed wireless communication technology torealize an advanced digital society in the future

Information Terminals
PCs

Tablets

Smartphones

2021

Millimeter wave module

2022

2024

2023

2025

Ultrathin Coaxial Assy

AR/VR

Connected
cars

Ultra Small connectors

DronesSurveillancecamerasValue Creation Performance

Membrane switches

Wearable
devices

Being a Leader Driving Value Creation and the Strategy

Business Opportunities for and Creation of Value for Society by the Fujikura Group

Information terminals, themselves, will presumably become more sophisticated to better handle the large volumes of data
sent through information and communication infrastructure at high speeds. We think the high-definition electronic components
and wiring and mounting technology of the Fujikura Group can also contribute to the evolution of high-speed, high-capacity,and high-function information terminals in this area. We also see next-generation vehicles as information terminals and think
our electronic products and telecommunication systems technology can also be used extensively in such vehicles.

Source of Value Creation

Information Infrastructure

FPC（Fiscal year）* Refers to the total length of optical fibers inserted in optical wrapping tube cables (WTC)

MEMS semiconductor sensors

High-performance Heat Pipe

Special Initiatives of the Fujikura Group

Information Storage

Film sensor

In the area of Information Storage, as larger volumes of data are used as big data in the future, we think we can contributeto the evolution of data centers that store this data through the unique electronic component and ultra-high-density opticalcabling technologies of the Fujikura Group.

Business Opportunities for and Creation of Value for Society by the Fujikura Group■ Ultra-high-fiber-count SWR®/WTC® and optical cabling solutions between data centers

12f

16f

24f

12c

16c

Opticalmulti-coreconnectors

24c
FPC for battery monitoring

MMC

MPO

MMC

MPO

MMC

Electronics

MPO

Mobility■ Electronic products for data centers, mainly HDD and thermal products

R&D
HDD
connectors

High-capacity
HDD carriage

Value Creation Platform

SWR
multi-core■ Electronics and information system products for theachievement and evolution of CASE

Server Cooling
Thermal Products

TeelecommTelecommunication
systems

Millimeter wave modules
Optical harness

24

Fujikura Group Integrated Report 2023

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25

Being a Leader Driving Value Creation and the Strategy

Mid-term Management Plan

DX

Superconducting wire rod

Fiber laser

One purpose of DX is to systematize sophisticated business management and management of profitability; in other words,
data-driven management. We will simultaneously pursue manufacturing DX along with management DX, and will strive to makeFujikura highly profitable through the use of DX in data-driven management and manufacturing.

Data-driven Management

Manufacturing DX

Increase sophistication of manufacturing
using digital technology

Introduction of Advanced ERP
More sophisticatedbusinessmanagement

Rapid visualizationof profit

Inventory
management
Budgetmanagement

Integration of information among the head office, locations,and business units through a common global platform

Electric vehicles

Other

Digitally based
technology
Sensing technology

Historical analysis

Use of AI,
optimization ofimage processing
and production
conditions

Manufacturingexpertise
Hunches and tips on
quality requirements

Management PC

Scoring(Low volume)

Edge PC

Offlineadvanced analysis

Being a Leader Driving Value Creation and the Strategy

During the 2025 Mid-term Management Plan, we will steadily continue to plant the seeds for Beyond 25, after the 2025 plan.
We think carbon neutral initiatives provide an especially good opportunity to create new businesses. At present, we anticipate
new businesses in superconductors, nuclear fusion, fiber lasers, and electric vehicles in this area.
The application of superconducting wire rod to nuclear fusion is anticipated. While the timing for achieving this is still in the
future, it is expected to be technology that offers a radical solution for energy and environmental challenges once achieved,
and we will continue to work on this steadily. Fiber lasers are a combination of the Fujikura Group’s optical technologies. They
contribute to energy conservation in metal and other types of processing due to their high energy eﬃciency and are expected
to contribute to solving energy challenges and achieving carbon neutrality through optical energy transmission and otherapplications in the future. In electric vehicles, batteries will need to have higher capacity to enable vehicles to travel longer
distances and this will also increase the charging capacity needed. Our super fast charging technology will shorten charging
time and we will contribute to achieving carbon neutrality by contributing to the proliferation of electric vehicles.

Source of Value Creation

Targeting Realization of a Sustainable Society

Product planning
Development/Design

Materials

Procurement

Production

Manufacturing

HR

Finance

Sales

Device A[Sensing]

Customers

Real-time monitoring(Quality prediction)

Value Creation Performance

Prototypes

Suppliers

High-speedcompilation(High volume)Compilation
Data useof history
Work improvements(low volume)
Predictive maintenanceDevice B[Sensing]

MaintenanceContributes to the advancement of nuclear
fusion technology and to the resolution ofenergy challenges

High energy efficiency contributes to energy
conservation in metal and other types ofprocessing

Super fast charging technology contributes
to the proliferation of electric vehicles

New SWR® Plant at Sakura Works

The Fujikura Group employs unique technology to achieve its mission to “create exceptional value for our customers aroundthe world using “tsunagu” (connecting) technologies,” stated in the Fujikura Group Corporate Philosophy (MVCV). Believingthat ESG embodies our corporate philosophy, we formulated Sustainability Targets 2025 and will pursue the initiatives in it.
See P. 50 for more information on Sustainability Targets 2025.

There is a strong awareness of GX and DX at the new SWR® plant being built at Sakura Works, which is one example of suchinitiatives. The plant is being designed and built based on the concept of using about half the amount of energy for the samelevel of production volume. We are also installing solar panels for in-house power generation and purchasing renewable energy
for the shortfall in electric power. Likewise, on the DX side, we are preparing to be a more competitive plant by employing
digital management of operations and quality, and using AI to achieve high productivity.

GX

Plan for Achieving Carbon Neutrality at the Plant
CO2
emissions(if no action
is taken)

Roadmap to Zero CO2 Emissions to Accomplish Fujikura Group Long-term Environmental Vision 2050
2030

Reduce of CO2 emissions
from the Company itself(Reduction of at least 33% compared to FY2020)

2030

Scope3

Reduce of CO2 emissions fromthe supply chain(Reduction of at least 15% compared to FY2020)

Switch more than 45% ofelectricity consumption to
renewable energy

Value Creation Platform

Carbon neutrality is also a source of competitiveness.

We set numerical targets for GX in the roadmap for Fujikura Group Long-term Environmental Vision 2050 as initiatives targetedat achieving carbon neutrality and will continue to work to achieve these targets through a combination of energy conservation,
in-house power generation, and purchasing renewable energy/energy credits. We will also work to reduce CO2 emissions
throughout the entire supply chain.

Scope1,2

Production site

Special Initiatives of the Fujikura Group

Green Transformation (GX) and Digital Transformation (DX)

Stakeholders

Reduction from energy conservation

Reduction from in-house
power generation
Reduction
fromNet emissions
energypurchases

02050
Image of new SWR® plant when complete

See P. 54 for Fujikura Group Long-term Environmental Vision 2050.

26

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27

Being a Leader Driving Value Creation and the Strategy

Message from the CTO

Using the Technology Platform to Enhance Our Ability to Create New Products and Businesses

Value Creation Performance

Technology Platform

Tatsuya Banno

Optical fiber

Opticalconnectors

Millimeter wave

Representative Director, Director, and CTO

Fiber devices

Informationtransmission

Sensors

Focusing on Technology Management in Line with the Direction of the 2025 Mid-term Business Plan

28

Fujikura Group Integrated Report 2023

It has been a little more than a year since I assumed thisposition, and this was also the time for formulating the midterm management plan ending in FY2025. During this time, I
have worked to align the four key elements mentioned above
to the direction of the 2025 Mid-term Management Plan. I
organized the advantages provided by “tsunagu” (connecting)technologies of the Fujikura Group and issues through indepth discussions with the CEO, CFO, and members in eachbusiness unit. The results of these discussions were used tobuild the “technology platform”, which systematizes our basic
and core technology groups, and the technical areas/productgroups that we should work on. based on the future vision foreach business and societal and market trends. This platform
was announced in May 2023.

Fusionsplicing
High-density
optical cable
Ultra-finecoaxial

CoaxialCore technology groups

Electronic
connectors

High-current
connections

Wiringharnesses

Planar wiring
components

Solid wiring parts

Design technology

Fiber laser

Energytransmission

Heat transfer
devices

High-densityHiwiringg

Superconducting
wire rod

Conductors andinsulators

Electric cables

M
Manufacturing technology

Processing andassembly technology
Basic technologies
Manufacturing
equipment
designAI technology
Precision
processing
technology

Control
technology

Inspection
technology

Material
analysistechnology

Value Creation Platform

In April 2022, the Fujikura Group established the position ofChief Technology Oﬃcer (CTO) for the first time, and I assumed
this position. As CTO, I am well-versed in the competitive
advantages and issues of the Group’s technologies andunderstand that it is my responsibility to formulate and pursue
technology strategy. To support Group management fromthe technological perspective as CTO of the Fujikura Group, I
focus on what I regard as four key elements: 1) Management oftechnology for the Group as a whole, 2) Strengthening productcapabilities through collaboration between each business unit
and the Production Engineering Unit 3) Creating a frameworkfor generating new technologies and new businesses, and 4)
Building a governance structure for R&D and transformation oforganizational culture.

Advanced opticaldevices

Connect

Special Initiatives of the Fujikura Group

Technical Area/ Product Group

Being a Leader Driving Value Creation and the Strategy

and assembly technology, and Manufacturing technology.
Design technology refers to refractive index distribution
design for optical fibers, circuit design technology for ICs andantennas for millimeter wave (mmWave) applications, andother engineering/design elements. Processing and assembly
technology indicates the technology for thinning the glass
diameter of optical fibers , forming circuits on multilayer FPCs,
and other elemental technologies that give concrete form to
products. Manufacturing technology indicates the technology
to manufacture high-quality and cost-competitive products.
The bottom tier contains the basic technology we havedeveloped. The seven basic technologies shown in the
diagram below are the fundamental and common technologies
to the Fujikura Group. We utilize these technologies eﬃciently
and effectively to create and innovate core technologies andintroduce new products and services to the market in the four“technology areas” designated in the top tier.

This technology platform also provides a framework forcontinuously leveling up our ability to create new products andnew businesses through the cooperation of the Research and
New Business Development Unit, the Production Engineering
Unit, and R&D departments in each business unit.
The top tier of this platform defines the technology areasthat Fujikura should pursue and the product groups that wewill provide for markets, based on social issues and market
trends. In the technology areas, four sub-fields are definedsuch as Information transmission and the Power transmission
which Fujikura has pursued since it was founded as wellas the Connect area which connects optical and electricaldevices individually or mutually and the High-density wiringarea which enables miniaturization of many kinds of electronic
devices and increases ﬂexibility in design.
The middle tier includes the core technology groups thatshould be refined through our R&D activities. In this tier, we
set three types of technology: Design technology, Processing

Source of Value Creation

Pursuing a Technology Strategy
based on the Technology
Platform

Analysistechnology

Fujikura Group Integrated Report 2023

29

Being a Leader Driving Value Creation and the Strategy

Message from the CTO

We also selected the three key R&D themes of Next
generation optical communication, Next generation energy,
and mmWave applications to pursue over the three yearsof the 2025 Mid-term Business Plan, by taking into accountthe affinity with the social demands and Fujikura’s business

Ultra-high-density optical wiring,
Optoelectronic fusion
Optical functional devices

Next-generation Energy

Millimeter wave
Applications

Multi-corefiber
In the next-generation energy area, we plan to develop
practical applications of high-temperature superconducting

30

Fujikura Group Integrated Report 2023

High-temperature superconducting wire rod

In mmWave applications, we are making progress ondevelopment and commercialization of communication
devices that use the mmWave frequency band for wirelessbase stations in optical communication networks. The useof mmWave will make downsized antennas possible on
both the transmitting and receiving side, and also enables
communication at higher speeds and capacity thanconventional wireless communications. Because mmWaves arehighly directional (straight-line), they require advanced design
called beam forming to control the signal in a specific direction.
Since mmWave can send pinpoint signals in the required
direction by beam-forming control, it is regarded as high-the Fujikura Group in the form it exists today is how wecontinually took on the challenge of developing new products
to meet the newly identified needs of society and continuously
engaged in a process of metabolizing change. Mr. Okada,
our CEO, set the goal of rebuilding our brand as “Fujikura,a technology leader” in 2022. I intend to accomplish thisimportant mission in my position as CTO.

Value Creation Platformdomains.
Next-generation optical communication is an area oftechnology that responds to the increasing need for highspeed, high-capacity, low-latency communication infrastructureaccompanying the massive volume of data circulating aroundthe world as well as the need to reduce electricity consumption.
Ultra-high-density optical wiring and optoelectronic fusion are
key themes. The development of multi-core fibers with multiple
cores inserted in one glass optical fiber is accelerating. We will
use the optical-related technology we have accumulated overmany years to solidify our position as a top leader.

The Fujikura Group has a wide range of business areas andthe core technologies are present in every product group.
However, the problem was that these technologies were
only being used in a specific business unit in many cases.
I therefore began building a framework for sharing the coretechnologies in a specific group throughout the whole group,and mutually utilizing them in each business unit as common
technologies.
I also think a framework for collaborating with external
startups and research institutions is essential for creating newtechnologies and businesses. One example of such frameworkis the Advanced Research Core (ARC) laboratory establishedin 2019 to perform cutting-edge basic research. At ARC, we
nurture the “seeds” that will provide value to society in the
future, in collaboration with universities in the U.S. and top
academic institutions worldwide.
Another area I am focusing on is developing the technicaltalent to create new technologies and new businesses, aswell as building a governance system for commercialization. I
am therefore introducing an innovation management system
to align these efforts with the business strategy and reduce
the uncertainty inherent in R&D, while respecting the individual
ideas and ways of thinking.
We have long been able to talk about Fujikura as atechnology leader. I think the source of the technologicalcapabilities we have developed is a sense of urgency tosurvive and be successful. Since all of our rival competitors
are strong, we can hardly survive or be successful unless wecreate products that can differentiate Fujikura by narrowing
our R&D targets down, It is fair to say that what createdSpecial Initiatives of the Fujikura Group

Next generation wireless communication
Sensors

Embarking on Building a Framework That Enables Core Technology to be
Shared and Used Mutually Company-wide

Value Creation PerformanceSuperconducting applied products
Optical energy transmission

technology needed for mmWave devices, including beam
forming; have shipped samples to customers who arecommunication carriers; and are now working on multiple
projects such as joint proof-of-concept testing with nextgeneration transportation infrastructure developers forpractical applications.
In recent years, we have put effort into R&D on CMOS image
sensors and other medical products, and have obtained acertain measure of success in these as a new business by lastyear. We therefore transferred control over medical products
to a business unit in FY2023 to grow these products as anindependent business.

Being a Leader Driving Value Creation and the Strategy

Next-generation OpticalCommunication

technology, where we posses top world-class properties, to theareas of nuclear fusion power generation and electric aircraft.
Nuclear fusion power generation is drawing interest as power
generation technology that generates no CO2 emissions. In thisarea, the use of high-temperature superconducting rod in thedevelopment of technology for nuclear fusion power generation
has become quite active in recent years. While developmentof this technology is expected to take some time before it isput into practical use, a huge amount of high-temperature
superconducting tape will be needed from the R&D stage
onward. We regard our high-temperature superconducting
technology as an important area where the Fujikura Group cancontribute to resolving global environmental issues, and we willcontinue to work on establishing manufacturing technology thatwill dramatically improve tape performance and productivity.
That will accelerate the practical application to nuclear fusion
power generation. We will also contribute to the resolution ofenvironmental and energy challenges by creating products
such as liquid-cooled cables and connectors that enable super
fast charging of electric vehicles.

efficiency and energy-saving communication, compared toconventional communication using microwaves, which radiatesignals in all directions.
We have already completed development of the basic

Source of Value Creation

R&D Themes Focused on During the Three Years of 2025 Mid-term Business Plan and Progress on These Themes

Fujikura Group Integrated Report 2023

31

Being a Leader Driving Value Creation and the Strategy

R&D, Intellectual Property, and Quality Control

This section will introduce advances in some of the key R&D themes Fujikura is focusing on in the 2025 Mid-termManagement Plan—High-temperature superconducting wire rod (future energy solutions), mmWave communication modules(millimeter wave applications) and multi-core fibers (future optical communication solutions) and Material Informatics which isone of the seven basic technologies.

High-temperature Superconductors

Fujikura Group Integrated Report 2023

The developed devices are currently being provided as samples and are receiving favorable reviews from communications
equipment manufacturers and business operators.
The technology developed for PAAM was recognized for its advanced features and it was therefore awarded the APMC Prizeat the Asia-Pacific Microwave Conference, APMC 2022, one of the major international academic conferences.

The APMC Prize is awarded to the most outstanding paper in the conference. The paper that received the prize
was authored by eight people, including Chihiro Kamidaki from the Electronic Technologies R&D Center as leadauthor. This paper describes the latest technical achievements for the power amplifier used in PA AM and its
performance. The paper was given high reviews for achieving high output while curbing an increase in power
consumption and reducing distortion of mmWave signal, and for making it possible to use smaller IC chips in
PA AM.
Our PA AM using this technology will make it possible to produce small 5G base stations with high performanceand low power consumption.
Fujikura will continue efforts to develop products to make 5G networks even faster, with higher capacity.
Fujikura Group Integrated Report 2023

Value Creation Platform

32

High-temperature superconducting wire rod

60 GHz mmWave wireless communication module

Special Initiatives of the Fujikura Group

High-temperature superconducting wire rod

28 GHz phased array antenna module (PAAM)

Value Creation Performance

Fujikura is engaged in research and development, manufacture, and sale of rare-earth-based high-temperature
superconducting wire rod. Fujikura’s high-temperature superconducting wire rod has excellent mechanical properties andcritical current characteristics in low-temperatures and high magnetic fields, promising for use in various industrial equipment
such as superconducting magnets.
In February 2023, Fujikura supplied superconducting wire rod to Commonwealth Fusion Systems (CFS) in the U.S. for proofof-concept testing of the world’s first nuclear fusion reactor and announced that Fujikura will pursue expansion of production
capacity for the future. Compared to conventional power generation, nuclear fusion power generation does not generate CO2
emissions and the resources for power generation are abundant in seawater. Furthermore, it is said to have excellent safety
features and is a promising technology that will provide radical solutions to energy and environmental challenges.
In the trial nuclear fusion reactor that CFS is attempting to create using high-temperature superconductors, high mechanicalstrength as well as high current characteristics in ultra-high magnetic fields are required for superconducting wire rods. Basedon the technological advances cultivated over many years, Fujikura has established mass production technology for hightemperature superconducting wire rod that meets these characteristics. The size of the superconducting magnets for the
nuclear fusion reactor is dramatically reduced compared to conventional magnets by using Fujikura's rare-earth-based hightemperature superconducting wire rods that can generate ultra-high magnetic fields.
Fujikura will expand its production capacity of superconducting wire rods and will continue to contribute to the realization ofa carbon neutral society in the future through various kinds of advanced superconductor devices by seizing the opportunity
presented by this supply of superconducting wire rods.

Being a Leader Driving Value Creation and the Strategy

Communication carriers around the world are now adopting millimeter wave (mmWave) for their 5G networks. The roll-out ofmmWave is progressing especially in the U.S. and leading telecommunications providers are expanding mmWave networks
and use cases (outdoors, indoors, repeater/relay, etc.).
Fujikura is developing various mmWave products such as a 28 GHz phased array antenna module (PAAM) that generates
and controls high-frequency beams in the 5G network base stations. Fujikura is also developing a 60 GHz mmWave wirelesscommunications module and other wireless components such as filters for mmWave.

Source of Value Creation

Millimeter-Wave Wireless Technology

Research and Development

33

Being a Leader Driving Value Creation and the Strategy

R&D, Intellectual Property, and Quality Control

Multi-core Optical Fiber Solutions

Respecting and Protecting Intellectual Properties
Fujikura engages in business operations fully respecting the intellectual property rights of others. Based on this policy, R&D
divisions and IP divisions work together to regularly evaluate connections between Fujikura’s products and technologies andthird party industrial property rights. Specifically, information on patents of third parties in Japan and overseas that relates to
R&D division research themes is regularly shared internally, and expert investigators are assigned to IP divisions to support
investigations by R&D divisions. A number of lawyers employed by the company are also involved in determining the technicalscope of products. In addition, we ask outside experts for their judgement when necessary. We also created a set of guidelines
on copyrights and holding seminars and distribute it internally for employees to ensure we respect the copyrights of third
parties.
We take appropriate actions under the law to protect our patent rights, design rights, and trademarks from unauthorized use.

Fundamental Policy on Intellectual Property Activities

2. Fujikura takes appropriate actions as required, such as taking legal actions against third parties in case of the infringementof patent, including design patent, trademark, and other intellectual property rights owned by Fujikura.

125μm

Cross-section of an optical cable with four-core multi-core fiber

Cross-section of a mass multi-core fiber (MCF) connector

Materials Informatics (MI)34

Fujikura Group Integrated Report 2023

MI Conceptual Diagram

Quality Control

Material design
What to design?

Computational science
Data science
Measurement and analysis
What is happening?

Process design
How to design?

To make sure that cases of unsuitable quality never happen again, we will focus on quality as the root of management. We willcontinue to take steps to prevent recurrence from the dual aspects of corporate governance reform and increasing awarenessof quality compliance based on the Fujikura Quality Policy, our company-wide policy that provides guidelines on quality
compliance.
We will continue to maintain independence of the Quality Control Unit, conduct internal audits to strengthen and build on thequality compliance system, configure a system that eliminates human operation by computerizing information related to quality
at each location, and make sure that everyone is familiar with the whistleblowing system as elements of corporate governancereform.
Since 2019 we have held a Quality Pledge Day to raise awareness of quality compliance, when all Group employees pledge toprevent a recurrence of unsuitable quality. We conduct quality compliance training for all Group employees and are reinforcing
dialog between top management and frontline employees to foster a culture of making sure that these mistakes are neverrepeated.
Fujikura Group Integrated Report 2023

Value Creation Platform

To enhance product characteristics and ensure reliability, we needto have material technology that provides new functions for materials
used and draws out the material characteristics to the maximum
extent. In the past, such material development was performed
through a process of trial and error that relied on the experience andknowledge of the researcher. However, shorter development periods
are now demanded. Materials informatics (MI) is drawing interest forthat reason.
MI is an approach which actively uses computational science anddata science in the development of materials. Material technology
includes the technical elements of material design, process design,
measuring and analysis, It is therefore necessary to employ
appropriate data analysis techniques for them. Fujikura has positioned
MI as a basic material technology and is applying it to a wide rangeof products. For example, we succeeded in cutting cable sheathdevelopment time to around one-quarter the time normally taken byusing Bayesian optimization. We will continue to improve MI utilization
techniques to build our manufacturing technology platform andcontribute to society.

4. Fujikura conducts intellectual property training on a regular and ad hoc basis to raise awareness of protecting and respecting
intellectual property throughout the Fujikura Group. In addition, Fujikura holds an annual intellectual property event to share
information on its own intellectual property activities and to provide an opportunity to listen to lectures by outside experts forthe purpose of enlightenment.

Special Initiatives of the Fujikura Group

3. Fujikura has a system in which business units, research and development units and intellectual property units cooperateeach other across the units so that intellectual property strategies will be strongly linked to the solution of business issues.
Specifically, Fujikura regularly holds internal conferences specialized in intellectual property in which members fromeach unit participate in order to align intellectual property strategy with its business strategy, and to clarify and share theinformation of Fujikura's patent position in comparison with other companies in each business field for the further purposeof strengthening Fujikura's patent position.

Value Creation Performance

1. Fujikura strives to maintain and enhance its predominance on business by obtaining patents, including design patents, andother intellectual property rights for inventions and other intellectual property resulting from research and development.

Being a Leader Driving Value Creation and the Strategy

Development of communication networks using optical fibers began in the 1970s and is an essential element for our social
infrastructure. NTT began providing the first generation of its Innovative Optical and Wireless Network (IOWN) service in March2023 as a next-generation communication network with higher capacity and lower latency. We expect the market requirements
for even lower latency and higher capacity communications to expand more and more toward the second and third generation
IOWN service in the future. Multi-core optical fibers, which pack multiple cores into a single optical fiber, are regarded as apromising approach to meet the requirements for advanced communications.
Fujikura is working to develop four-core multi-core optical fibers (4c-MCF) with the standard cladding diameter of 125 mm,
which is compatible to general single-mode fibers, as a practical application. We performed a test installation using highdensity optical fiber cable (SWR® & WTC®) containing 288 4c-MCF fibers (1,152 cores) and verified that this could be installedwith sufficiently low transmission loss. These results were announced at international academic conferences. We are also
developing a fan-in/fan-out conversion component to connect multi-core fiber to conventional single-mode fiber and a mass
multi-core fiber (MCF) connector to connect multiple MCFs at once. We will continue to contribute to the realization of nextgeneration communication networks that make low latency and high capacity possible.

Source of Value Creation

Intellectual Property and Quality Control

35

Being a Leader Driving Value Creation and the Strategy

Message from the CFO

Formulation of Capital Allocation Policy in the 2025 Mid-term Management Plan

Kazuhito Iijima
Director and CFO

Record High Profits Owing to Successful Structural Reforms anda Tail Wind From the Market Environment

Cash generation by improving supply chain management
30.0

billion yen

36

Fujikura Group Integrated Report 2023

FY2021, combined with a global expansion in demand fortelecommunication and electronic components, led to a
V-shaped recovery in performance.
We earned record high profits in FY2022, supported bya favorable market environment and boosted by the weakyen. In the case of the Fujikura Group, however, a highpercentage of products manufactured in Japan and the restof Asia are sold to customers in Europe and the U.S. andexchange rates always affect performance significantly.
We should not feel a sense of relief at present. Whileperformance is good, I think we need to diligently prepare
for rapid changes in the business environment.

105.0
billion yen
Capital investment
vestment
Operating cash flow

Shareholder return

141.3

billion yen

Strengthen
gthen
financial position< 2020—2022 Total >(Results)

Strategic
Investment

Cash generation

6.4

billion yen

Operating cash flow

83.5

billion yen

40.0

Shareholder return

75.0

Strengthen
ngthenfinanciall position

billion yen

Investment
Breakdown

Other
5

Telecommunication
Systems
+
AFL

105

45

17

-Business investment-DX-GX

billion yen

billion yen

DX and GX

Capital investment

51.4

billion yen

30.0

220.0
billion yen(Equity-to-assets
sets ratio: 50%)

Real EstatePower Systems
Automotive
Products

3
5
6

Value Creation Platform

I assumed the position of Chief Financial Oﬃcer (CFO) in
June 2023. I have been continuously involved in the Finance& Accounting Division since I joined the company in 1989
and have developed professional knowledge of finance andaccounting. Appointed just as the switch to the sustainablegrowth phase is happening, I feel both the weight of
responsibility and an immense sense of satisfaction.
After posting a record high net loss in FY2019, the FujikuraGroup shared a strong sense of urgency throughout theGroup and has pursued drastic reforms in the management
and business structure. The results from various measures
implemented under the 100-day plan in FY2020-

Special Initiatives of the Fujikura Group

01.Growth Investment/Focused investment in three core areas of growth markets
02.Strategic Investment/Invest flexibly in new businesses
03.Shareholder Return Policy/Secure a payout ratio of 30%
04.Ensuring Financial Health/Maintain equity-to-assets ratio at 50%

Value Creation Performance

Mid-term Capital Allocation Policy

Being a Leader Driving Value Creation and the Strategy

and other strategic areas. This budget will be used forflexible investment, including M&A, to secure the facilities
and personnel that is lacking if, for example, practicalapplications of technology for nuclear fusion reactors andother technology in the superconductor area are developed
faster than anticipated. I think the resources for thisstrategic investment will be covered by cash generated from
improvements in supply chain management in addition to
the foreseeable obtainable cash ﬂow mentioned above. Morespecifically, we will strive to improve the cash conversion
cycle by finding ways to shrink inventories, establishingappropriate settlement terms for accounts payable, andother efforts.
To ensure financial soundness, we will continue to reduce
net interest-bearing debt and grow net assets. Net interestbearing debt has been reduced from over 200 billion yen
during the previous mid-term management plan to justunder 100 billion yen at the end of FY2022 and we intend tohalve it again. Net assets showed a rebound in the equityto-assets ratio to 41% at the end of FY2022 and we intend
to increase it to at least 50%.

In the 2025 Mid-term Management Plan, we formulated
a mid-term capital allocation policy that will form the coreof our future financial strategy. Reflection on FY2019,
when we engaged in advance investment exceeding
verified obtainable cash flow, was the underlying reason
for formulating this policy. Under the new policy, we firstestimated cash ﬂow over three years based on our current
business portfolio and then considered how to allocate
it among capital investment, shareholder return, andstrengthening financial soundness.
In 2025 Mid-term Management Plan, we allocated 105
billion yen over three years to capital investment in further
growth of existing businesses. We intend to make timely
investments in Telecommunication Systems, Electronics,
and Automotive Products where technological innovation
is progressing as symbolized by CASE (Connectivity,
Autonomous, Sharing and Electrification), three areas where
we anticipate steady growth, while keeping the investment
and recovery cycle in mind.
We have also prepared a budget of an additional 30
billion yen for strategic investment in new businesses

Source of Value Creation

Targeting balanced businessgrowth under the mid-term
capital allocation policy

24Electronics(Billions of yen)

< 2023—2025 Total >(Mid-term Plan)

Strive to increase corporate value by balancing financial soundness with growth investments.
Fujikura Group Integrated Report 2023

37

Being a Leader Driving Value Creation and the Strategy

Message from the CFO

weighted average cost of capital (WACC). Fortunately, thePBR rose to over 1x* after the 2025 Mid-term Management
Plan was announced and I think this shows a certain degreeof appreciation of our plan. There are three important steps
to lower the cost of capital. First increase earning power,
then improve asset efficiency. These first two steps will
reduce the cost of financing by improving ratings.
Although the Fujikura Group was rated “A” by Rating
and Investment Information, Inc. (R&I) for many years, thefinancial loss in FY2019 resulted in a rating downgrade to“A-.” I think steady implementation of the measures set forthin the 2025 Mid-term Management Plan will boost our rating
again.
*PBR as of September 30, 2023

ROIC

Operating Margin
after Sales
and Taxes

SG&A
Expense Ratio

Business portfolio
management
Sharp investment ofmanagement resources

Working
CapitalTurnover(days)

Fixed Asset
TurnoverRatio

Improving CCC*1 bypromoting SCM*2

Individual Initiatives to Reduce WACC

(Optimal)Capital Structure

Debt Ratio

Shareholders’ Equity
Ratio

2023

50

2024

2025 (Forecast)Financing Costs

Debt Cost

Equity Cost

Dividend payout ratio: 30%

Strengthen financial position

Group Capital Policy

Improve rating

I place importance on communication in accomplishing
my work as CFO and will first prioritize continuing to focus
on enhancing communication with overseas stakeholders
as we expand our businesses globally. Next, I will increase
opportunities for engaging in dialog with the business units
to help each business increase its value from a finance
perspective. Third, I will also engage in close mutualcommunication with the Corporate Management Unit andReal Estate Business Unit that I am in charge of. My fourthpriority is to engage in deeper dialog with outside directors(members of the Audit and Supervisory Committee) toinvigorate Board of Directors meetings and strengthen
governance.
I will continue to explain the above initiatives aimed atensuring financial soundness and investment in growth ineasily understandable terms, and work diligently to makethe Fujikura Group worthy of even higher evaluation by ourdiverse group of stakeholders.

Value Creation Platform

Cost Ratio

Invested Capital
Turnover Ratio

45

Special Initiatives of the Fujikura Group

Individual Initiatives to Improve ROIC

64

Focusing on Communication with Stakeholders

Development of systems andinfrastructure to
WACC
promote initiatives(Weighted average cost of capital)by business units(Return on invested capital)

Dividends Per Share at a Dividend Payout Ratio of 30% (Yen)

Value Creation Performance

ROIC-WACC

Although Fujikura has long set a standard dividend payout
ratio of 20%, the financial loss in FY2019, among otherfactors, resulted in zero dividends for a period of two
years. This caused a great deal of concern and trouble
for shareholders. Dividend payouts were finally resumed
at the end of FY2021 and were restored to the pledged
level in FY2022, when we declared record high dividendsof 30 yen per share, owing to the increase in profitability.
The recent improvement in financial condition led us toraise the dividend payout ratio to 30% in the 2025 Midterm Management Plan. This of course was made possible
because our calculations indicate progress on financial
improvement even with a higher dividend payout ratio, basedon the aforementioned capital allocation policy. However,considering recent conditions, 30% is not a level that willallow us to rest on our laurels. If we can become a company
that is prepared to earn an operating margin exceeding
10% on a consistent basis in the near term, I think we willcertainly also be able to raise dividends, buy back shares,
and thereby provide additional returns to shareholders.

Being a Leader Driving Value Creation and the Strategy

While earning power is rebounding, the stock price has
been stagnant and the price-to-book ratio (PBR) has
remained around 0.7 to 0.8 over the past several years.
When I examined the reason, I arrived at the conclusion that
Fujikura Group performance is variable and has not gained
the confidence of the stock market in sustained profitability.
We therefore incorporated specific capital cost-conscious
measures in the 2025 Mid-term Management Plan. These
measures include efforts to reduce the cost ratio and SG&A
expense ratio, improve the cash conversion cycle and othermeasures mentioned above to improve return on invested
capital (ROIC), as well as efforts to optimize capital structure,
reduce financing costs, and other measures to reduce theDividend Payout Ratio Raised to 30%; Also Considering Greater Shareholder Returns

Source of Value Creation

Focusing on Capital Cost-Conscious Management*1 Cash conversion cycle*2 Supply chain management

38

Fujikura Group Integrated Report 2023

Fujikura Group Integrated Report 2023

39

Being a Leader Driving Value Creation and the Strategy

Financial Highlights

Profit Attributable to Owners of Parent(Millions of yen)

(Millions of yen)

800,000

740,052
661,510 678,528 653,795

600,000

710,778

806,453
70,163672,314590,980643,736

80,000(Millions of yen)

39,101 40,891

40,000

ROE
（%）

30

670,35020.40

2060,000Source of Value Creation

Net Sales/Operating Income

16.66

20,00010

200,000

32,632 34,230 34,343
20,34525,07538,28827,67940,00001,453 -38,510 -5,369

0.67

0

24,422-3.41-10
20,000-20,000
-20

3,346

0
2013
Net Sales (left axis)

2014

2015

2016

2017

2018

2019

2020

0
2021

2022

-40,0002018 2019 2020 2021 2022

(Fiscal year)2018 2019 2020 2021

(Fiscal year)

10,772 Millions of yen
1.34 %

Free Cash Flow

Net Income Per Share(Millions of yen)

(Yen)

Other

60,0008,146 Millions of yen
1.01 %

50,00050,726

48,406

Automotive Products Business

100
50

30,000

FY2022 Net sales
Millions of yen

Electronics Business

197,287 Millions of yen
24.46 %

5.09

0Power & Telecommunication
Systems Business

434,388 Millions of yen
53.86 %

20,00010,000-100

0 -2,387-10,000(Fiscal year)

Capital Expenditures

570,051 Millions of yen

2018 2019 2020 2021 2022

Research and Development Expenses(Millions of yen)

(Millions of yen)

60,00020,00055,785

17,466 17,297

50,000Other

306,856 Millions of yen
Asia

127,300 Millions of yen

40

Fujikura Group Integrated Report 2023

FY2022 Net sales

806,453

Millions of yen

Japan 29.31%
236,402 Millions of yen(Fiscal year)

15,00016,496 16,413

Value Creation Platform

Overseas 70.69%-136.58-150
2018 2019 2020 2021 2022

Net Sales by Region

-19.5

-50

10,70015,03040,00030,00020,000Special Initiatives of the Fujikura Group806,453148.27141.85150

58,08840,000U.S.

(Fiscal year)

Value Creation Performance

Real Estate Business

135,895 Millions of yen

2022

Operating Income (right axis)

Net Sales by Business

155,860 Millions of yen
19.33 %

-20.89-30

Being a Leader Driving Value Creation and the Strategy

400,000

30,141

10,00017,736 16,214 15,720

5,000

10,00000
2018 2019 2020 2021 2022

(Fiscal year)2018 2019 2020 2021 2022

(Fiscal year)

Fujikura Group Integrated Report 2023

41

Value Creation Performance

Power & Telecommunication Systems Business

Unit Overview

Networks continue to evolve in a quest for faster, higher capacity
connections. The Fujikura Group continues to be the front-runner in opticalsupport for this goal. We were also the first in the world to develop opticalcable (SWR®/WTC®) that achieves high fiber density in a slim cable. Opticalfiber fusion splicers are used to connect optical cables around the world. The
optical cabling solutions of the Fujikura Group are contributing to building
optical network infrastructure.

Global Data Communication Volume● Optical fiber● Optical cable● Optical connection equipment andcomponents● Optical components● Optical fiber fusion splicer● Network equipment● Engineering■ Data communication volume will increase 15 times over the ten-year
period from 2020 to 2030.
■ Greater use of generative AI and other technologies will result incontinued growth in the future.

Market/Industry Trends■ The data center market continues to grow at a high rate.
■ Many countries continue to invest in infrastructure for FTTx/5G.

59

15x

60
50

（2020̶2030）

40
30
20
10
0

4
2020

2022

2024

2026

2028

2030

Growth Strategy (Medium and Long-term Targets)○Building a global supply chain○Optical cabling solutions including everything from opticalfibers, optical cables, and optical connectors to optical fiber
fusion splicers

Target business expansion through optical cabling solutions based on innovative optical technology.

W

Further penetrate the strategic markets in Japan, the U.S., and UK, and develop new markets in Europe and Asia

Weaknesses

Strengths○Growth of the data center market supporting generative AI andother technologies○Supply chain disruption due to heightened geopolitical risk

○Establishment of FTTx/5G networks in many countries○Continual surge in the cost of energy and materials

Differentiation through innovative technology

Threats

Opportunities®
®
■ Reducing TCO* through SWR /WTC having differentiable technology■ Providing solutions matched to the region and purpose of use (air blown installation method, flame-retardant cable)

Special Initiatives of the Fujikura GroupT■ Efforts to make cables thinner diameter and smaller size, with a higher fiber count■ Plug & Play connection solutions that do not require skilled installation

GraphsNew SWR® plant to increase competitiveness

Net Sales

Operating Income /Operating Margin (%)

Net Sales (Billions of yen)

Operating Income (Billions of yen)

354.9

327.8

*TCO: Total cost of ownership, including construction

Total Assets (Billions of yen)

Operating Margin (%)

269.6

353.6

■ Carbon neutral■ Manufacturing DX■ Improving productivity and increasing capacity through innovative manufacturing technology

Total Assets

272.9

284.7

247.4 248.4

9.9

305.9
7.1

Addressing Societal Challenges (Environmental Issues)

43.1

5.9

5.0

25.2
17.8

18.1
1.4

2018 2019 2020 2021 2022
(Fiscal year)

Value Creation Platform

434.4

Value Creation Performance○Optical cable technology achieving high density in a slim cabl

070

Source: Sur vey of Trends in Areas of Interest,
Japan Electronics and Information Technology Industries Association (JEITA)

SWOT Analysis

S

Global Communication Volume Forecast

Being a Leader Driving Value Creation and the Strategy

fiber development and manufacturing technology that provides the backbone

Main Products

Zettabytes (ZB, 1021 bytes)

Providing Solutions for Building Infrastructure Platforms

Source of Value Creation

Market Environment

4.62018 2019 2020 2021 2022
(Fiscal year)2018 2019 2020 2021 2022

Fujikura provides optical cabling solutions that meetthe needs of the market for thinner, smaller cables witha high fiber count through development of innovativetechnology and contribute to building the infrastructure
to support an advance information society.

We will introduce state-of-the-art manufacturing
technologies in the new SWR ® plant to builda h i g h l y p ro d u c t i v e p l a n t w h i l e re d u c i n genvironmental impact and achieving carbon
neutrality.

(Fiscal year)*Figures for the Power & Telecommunication Systems Business

42

Fujikura Group Integrated Report 2023

Fujikura Group Integrated Report 2023

43

Value Creation PerformanceElectronics Business

Market Environment

Targeting Sustained Growth in Core Business Areas
In the Electronics Business, we target sustained growth through Fujikura’s unique
technologies, mainly in the areas of information storage and information terminals, core
With top customers as our partners, we are providing our advanced technology inelectronic components, connectors, and flexible printed circuit boards (FPC) to meet theneed for high-density, high-precision, high-function products and expand the business. We
are also working to enter the automotive electronic products market for CASE (Connectivity,● FPC● Electronic Wire
● HDD components● Sensors● Thermal solutions● Membranes● Connectors

Autonomous, Sharing and Electrification) and other aspects of the once-in-a-century

Data Centers

Medical Equipment and Wearable Devices■ Data communication is expected to become faster andincrease in capacity due to advancements in data centers ,5G/6G, and satellite communication.

■ We expect an increasing need for slim, high-density products
to make equipment smaller and higher density as thewearable device and medical equipment markets grow.

Smartphones

Vehicles■ While we expect demand to rebound due to theproliferation of 5G in emerging countries, we expect
demand to be level over the long term due to a longer
replacement cycle.

■ We anticipate an increasing need for new electronic
products that meet the need for safety and security,
automated driving, and electric vehicles.

transformation the automotive industry is undergoing.

Industrial Equipment

SWOT Analysis■ Growth is anticipated due to continued capital investment in semiconductors and expansion in the electric vehicle,
DX, and robot areas.

Strengths

Opportunities○Difficulty in securing human resources due to an aging society
with fewer children being born (Response) Develop humanresources by introducing an educational system to strengthenties with suppliers and overseas locations

W○Ability to propose complex products that combine a broad
variety of products○Use of Fujikura’s overseas production locations and othergeographical strengths continually provide stable supply○Companies in emerging countries entering competition○Global supply chain issues○Expansion of the market for electronic products that address
CASE in the automotive market

T○Demand for high-end information terminals in a digital society
as data centers expand along with evolution of 5G/6G and AI○Strong industrial equipment and FA markets as plants areautomated, smart factories are created, and robots are
introduced○Division of the international community due to prolonged
conflicts○Switch to economic blocks■ Striving to expand sales of complex products that add high value through our high-density and high-definition processing technologies, which
are Fujikura’s strengths in the information terminal market including smartphone, wearable devices, and VR headsets, and in the medical equipment
market, where products are becoming increasingly smaller and higher functioning

Expansion of business in the data center market■ Use the precision processing technology and cooling technology of the Fujikura Group to expand business in a data center market
driven by AI technology

Threats

Addressing the CASE segment of the automotive market

GraphsNet Sales

Operating Income /Operating Margin (%)

Net Sales (Billions of yen)

Operating Income (Billions of yen)

199.9

197.3

Operating Margin (%)■ Seeing the once-in-a-century transformation of CASE in the automotive market as an opportunity and providing optimal solutions
to customers from Fujikura’s diverse range of electronic products

Total Assets
Total Assets (Billions of yen)

27.6

178.5

158.4

147.8

Expansion of sales in the industrial equipment market
131.4 135.0 137.1

14.0
13.8

■ Positioning the industrial equipment market as a strategic market and striving to expand sales by introducing products that havebeen differentiated through new development■ Targeting business expansion utilizing our highly reliable connecting technology, a strength of the Fujikura Group, to achieve
innovation in manufacturing through DX and growth in the industrial robot area

Value Creation Platform

185.1 178.3

Repeatedly cycle through the metabolism of change in ongoing product development and gain access to new markets and new customers.

Differentiation through products that add high value in the information terminal and medical equipment markets

Weaknesses○Creation of new opportunities to make equipment smaller andhigher density as the wearable device and medical equipment
markets grow

Growth Strategy (Medium and Long-term Targets)Special Initiatives of the Fujikura Group

0○Business expansion in the automotive market(Response) Expand sales in the automotive sensing market

Value Creation Performance

S○Ability of the Fujikura Group to propose solutions that matchthe needs of our customers by using our strengths in
high-quality and high-precision processing technology tocreate products, enabling us to contribute to the creation ofvalue in our customers’ products

Being a Leader Driving Value Creation and the Strategy

business areas of the Fujikura Group.

Main Products

Source of Value Creation

Unit Overview

8.3
4.9
4.5

2018 2019 2020 2021 2022
(Fiscal year)

44

Fujikura Group Integrated Report 2023

-1.1

Addressing Societal Challenges (Environmental Issues)

7.7

2.4

-2.0
2018 2019 2020 2021 2022
(Fiscal year)2018 2019 2020 2021 2022
(Fiscal year)

We will strive to minimize the impact on the environment by reducing CO2 emissions through the essential measures of energy conservation,
in-house power generation, reducing water usage in plants, and by reducing, reusing, and recycling materials, in line with Fujikura Group
Long-term Environmental Vision 2050.
Fujikura Group Integrated Report 2023

45

Value Creation Performance

Automotive Products Business

Unit Overview

Providing Solutions to Automotive Industry which isunder Transformation Period

Trends in Markets/Areas

Shift to Electric Vehicles● Wiring harnesses (WH)

■ The semiconductor supply-demand issues, which had createda bottleneck in global vehicle production over the past several
years, are steadily improving■ The ripple effect on demand in reaction to the inability tosupply vehicles in time is expected to persist in the European,
U.S., and Japanese markets.

■ As electric vehicles rise to the forefront of the market, electricvehicles account for the majority of new vehicles producedby manufacturers in Europe, the U.S., China, and Korea,
excluding Japan. In China in particular, which is the largest
market, there has been a switch in hot-selling vehicles toelectric vehicles from Chinese manufacturers, and the market
share of foreign manufacturers is falling across the board.
■ We need to keep an eye on the trend in electric vehicle sales,
along with how fast charging stations expand.

● Electrical components

Sales in 16 Countries in Asia, North & South America and Europe. We globally manufacture●High-voltage wiring harnesses forelectric vehicles

vehicle’s neural network and blood vessels.,●EV charging cables

With the cooperation of other business units, we are pursuing and developing new
integrated products and/or solutions by marshalling all Fujikura Group elementary
technologies and capabilities to meet our customers’ needs and expectations during thisonce-in-a-century transformation period for automotive industry.

Growth Strategy (Medium and Long-term Targets)

SWOT Analysis

Strengths○Strong relationships with customers cultivated over many years
by providing them with a vast range of high quality products

W○The existence of other business units that possess advanced
basic technologies that can be used in vehicles○A stable supply structure that utilizes our overseas production
locations and other geographical strengths○Investment in automating wiring harness assembly work to
adapt to the decline in the labor force○Development of versatile human resources capable to respondbusiness globalization

Weaknesses○Vehicle innovation through CASE (Connectivity, Autonomous,
Sharing and Electrification)○ Entrance into electric vehicles from different industries

Opportunities

T○A decline in the labor force due to development in low-cost
countries○Rising labor costs due to inflation

Threats■ The automotive industry is right in the middle of a once-in-a-century transformation from CASE (Connectivity, Autonomous,
Sharing and Electrification) and other technologies. We will apply optical fiber, wireless, millimeter wave modules, and othertechnologies to develop next-generation wiring harness systems to handle high-speed communication and electronic power
control systems.

Contributing to a carbon neutral society through electric vehicles

Net Sales

Operating Income /Operating Margin (%)

Net Sales (Billions of yen)

Operating Income (Billions of yen)

Total Assets
Total Assets (Billions of yen)

96.2

155.9

149.3

-2.1

121.9 121.3

72.3

-3.0
-2.8

62.3

73.0

76.0

Addressing Societal Challenges (Environmental Issues)

-4.2

-3.2
-4.1

-3.7
-4.6
-5.6

2018 2019 2020 2021 2022
(Fiscal year)

Fujikura Group Integrated Report 2023

■ As the trend toward electric vehicles advances rapidly, we are working on development of EV charging cables for charging
infrastructure with multiple customers involved in this.
■ The greatest weakness of electric vehicles compared to conventional internal combustion engines is the charging time. Improving
charging efficiency could improve charging time to a level where it is comparable to fueling time. We will play a supportive role incontributing to the proliferation of electric vehicles and the realization of a carbon neutral society.

Value Creation Platform

Operating Margin (%)

46■ Impacted by lockdowns in various areas due to the spread of COVID-19, demand-supply issues for semiconductors arising from
that, and the Russian invasion of Ukraine, the automotive industry saw problems emerge upstream and downstream in the supply
chain. This destabilized customers’ operations and consequently caused destabilization of operations in the Fujikura Group.
■ In response to this, we will strive to steadily restore earning power and improve profitability by pursuing structural reforms evenmore vigorously than before.
■ We will work with top customers of the Automotive Products Business to develop next-generation wiring harness systems byapplying products and technology from the electronics business and information and communication business.

Initiatives in vehicles as information terminals

Graphs

154.1

Improving profitability by reinforcing earning power

Special Initiatives of the Fujikura Group0Str engthening ear ning power and incr easing pr esence amid the global tr ansfor mation.
Value Creation Performance

S

Being a Leader Driving Value Creation and the Strategy

Main Products

The Automotive Products Business has a total of 39 facilities for Manufacturing, R&D, andand sell wiring harnesses and other electrical distribution systems which are analogous to a

Source of Value Creation

Market Environment-6.62018 2019 2020 2021 2022
(Fiscal year)2018 2019 2020 2021 2022
(Fiscal year)

The proliferation of electric vehicles is accelerating towardrealizing a carbon neutral society. We are working as a team withcustomers on power source management technology, system
optimization, and using technology to make products slimmer
and lighter to develop lighter vehicles.

Super fast EV charging cables that apply the technology wehave cultivated in industrial cables are making it easier to use
electric vehicles. We will work to establish the infrastructure in
addition to electric vehicles to realize an electric vehicle-basedsociety and contribute to realization of a sustainable society.

Fujikura Group Integrated Report 2023

47

Value Creation Performance

Real Estate Business

Market Environment

Maximizing Use of Assets and Maintaining Stable Revenue
We are eﬀectively utilizing the former plant site next to Fujikura headquarters to expand our real estate business. Redevelopment began

There are plans to continue to complete construction on large new buildings in the future, and vacancy rates in the city center willremain high from the impact from telecommuting and diversification of other workstyles. We therefore expect to see a downward trend
in rental rates.

Source of Value Creation

Unit Overview

in 1998, and we are operating a real estate leasing and management business, mainly for five office buildings and two commercial
located within 4 km of the Marunouchi district in central Tokyo, and has ﬁnancial institutions and many other excellent tenants.
The basic policy of Fujikura’s real estate business is to utilize long-held land eﬀectively and increase revenues and proﬁt. We plan toGrowth Strategy (Medium and Long-term Targets)increase tenant satisfaction through systematic investment and improvement to maintain and increase the value of currently ownedbuildings and facilities, and maintain a high occupancy rate for rental units over the medium and long term.

■ One commercial building is currently being built at Fukagawa Gatharia and is scheduled for completion in FY2024.
■ To maintain stable revenue and profit, continue increasing the value of existing office buildings and aim to contribute to our tenant’s
employees and the local community by constructing new buildings.

SWOT Analysis

Image of new North Plaza building when complete in FY2024

S○Close to the city center (Otemachi and Marunouchi) and to thenearest station. A large area equipped with infrastructure.

W

Strengths

Introducing
new technology
and achieving
smart building
management

Maintenance of theinterior environmentof the facility andachieving laborsavings by using
cleaning robots

Introducing solar
power generation

Rapid detection ofincidents or trouble
through ITV image
analysis technology

Weaknesses○Increasing the value of the entire area through construction of
new buildings○Increasing the value by improving disaster prevention andreducing CO2 emissions

Opportunities

T○Deterioration in profitability due to a decline in the level of rental
rates

Threats

Fukagawa Gatharia Christmas lights
GraphsCooperating on local seasonal eventsand contributing to the local community

Net Sales

Operating Income /Operating Margin (%)

Net Sales (Billions of yen)

Operating Income (Billions of yen)

Total Assets
Total Assets (Billions of yen)

42.8
10.9

10.9

10.9

10.8

5.0
46.1

5.4

5.2

47.7

47.7

5.1

47.2

5.0

42.1

39.8

38.4

Value Creation Platform

Operating Margin (%)

11.3

Special Initiatives of the Fujikura Group0○It has been 20 years since the property was developed andsigns of age and deterioration have begun to appear.
Renovation costs are expected to increase in the future.

Value Creation PerformanceContributing to the local community by constructing new buildings and providing new value, mainly in the medical area

Being a Leader Driving Value Creation and the Strategy

buildings. The office buildings have a total leasable office space of around 100,000 m2. This property offers the advantage of being

37.6

46.3

Addressing Societal Challenges (Environmental Issues)
2018 2019 2020 2021 2022
(Fiscal year)

48

Fujikura Group Integrated Report 2023

2018 2019 2020 2021 2022
(Fiscal year)2018 2019 2020 2021 2022
(Fiscal year)

We are working to develop communities that use less energy to realize a low-carbon society.
Adding greenery in the area will contribute to the local community.
Fujikura Group Integrated Report 2023

49

Value Creation Performance

Basic Policy on Sustainability Management

Main Results for FY2022

The Fujikura Group established Sustainability Targets 2025 (FY2021–FY2025) based on the Fujikura Group Corporate
Philosophy (MVCV) and is pursuing sustainability targets. These targets were set from the dual perspectives of environmental
and social materialities, and financial materialities. They are also linked to the long-term visions set forth by the Fujikura Group(the 2030 Vision and Fujikura Group Long-term Environmental Vision 2050).

Sustainability
Theme

Corporate Philosophy

Double materiality
perspectives
Also consider thefinancial impact inaddition to the
CSR perspective

Four Sustainability ThemesF

Achieving the 2030 Vision (CSV)

E

Pursuing Fujikura Group Long-term
Environmental Vision 2050

S

Developing a pool of humanresources with
globally versatile talentG

Strengthening corporate
governanceF

Solve problems in a comfortable
and sustainable “Mirai” (future)society by providing “tsunagu”(connecting) solutions and thereby
continuously enhance corporate
value■ Identified new technologies and business areas

Use data and digital technologies
to improve the efficiency of existing
businesses and create new
business models■ DX at manufacturing sites

E

Achieve FujikuraGroup Long-term
Environmental
Vision 2050

S

Develop a Pool of
Human Resources
with Globally
Versatile Talent

Sustainability Targets 2025 is categorized into four themes, collectively called ESGF for Environmental, Governance, Social, andFinancial/Future. Financial/Future has three action items, Environmental has five, Social has three, and Governance has five. We
evaluate the annual targets and results in terms of achieving the FY2025 targets, and disclose progress toward the targets in theannual Integrated Report and on our corporate website.

• Promoting digital transformation (DX)E

compared to the 8% reduction target (for the Group)[Challenge 1]
Zero CO 2 emissions at plants by
2050• Response to TCFD recommendations

S• Innovation in job satisfaction• Diversity & inclusionG• Improving functioning of Board of Directors• Improving Group governance• Strengthening supply chain management• Comprehensive security export control

50

Fujikura Group Integrated Report 2023

Strengthen
Corporate
Governance•A chieved extensive energy savings and reduction in electricity use• E xplored and implemented innovative manufacturing that minimizes energy
consumption• U sed in-house power generation, purchased electric power derived fromrenewable energy sources, and proceeded with environmental value on a
cost-minimum basis• Drafted a revised version of the HRM Vision through a process that involved
employees in roundtables with the labor union, etc.
• Held career design seminars focused on specific age ranges• Introduced video learning services for gaining knowledge and expertisein business skills, in addition to making the online English conversation
program permanent•P ercentage of women employees: 15.4% (Fujikura)Manage with an awareness oftransparency and value creation• Pursuing Fujikura Group Long-term
Environmental Vision 2050 (pursuing the fourchallenges)• Putting philosophy (MVCV) into practiceDevelop human resources capableof active contribution globally

Diversity & inclusionG• Development of human resources capableof active contribution globally• Used AI to automate control of manufacturing equipment•E mployment rate for people with disabilities: 2.67% (domestic)•W omen as a percentage of new hires (Corporate planning career track): 29.4%(Fujikura)• E stablished and are implementing an educational program for the
management-track pool of human resources• P roduced managers from the management-track pool of human resources■ Held the Fujikura Group Partners Meeting online tocommunicate with suppliers
Supply chain management(including responsible mineralsourcing)

Value Creation PlatformF• Further expansion of environmentallyfriendly products• Rolled out membrane circuit inspection and other AI inspection laterallySpecial Initiatives of the Fujikura Group

Each of us must follow an ethical path as a member of society.

• Achieving the 2030 Vision• B egan supplying high-temperature superconducting wire rod to CFS, a
company developing nuclear fusion in the U.S.

■ Achieved a 24% reduction in emissions vs. FY2018,

Strive to contribute to a sustainable society and enhance corporate value

Details of Sustainability Targets 2025

• Received an award for an outstanding paper on milli meterwave (mmWave)
development at a major international academic conference. Also partneredwith AVNET to develop and sell a 5G mmWave evaluation/development system

Value Creation Performance

Putting the
Fujikura Group
Corporate
Philosophy(MVCV) into
practice

Value of Existence

Realize the 2030
Vision (CSV)and Maximize
Business
Opportunities

Main Results for FY2022 (partial excerpt)

Being a Leader Driving Value Creation and the Strategy

Overview of Sustainability Targets 2025

Priority Measure

Source of Value Creation

Views on Sustainability Targets 2025•E
 xplained the management plan, Fujikura Group Basic Procurement Policy,
and CSR Procurement Guidelines• Implemented a CSR procurement self-assessment questionnaire andprocurement division survey•P rovided information on the importance of human rights due diligence on
responsible mineral sourcing and in the rest of the supply chain, and on
response to climate change

Fujikura Group Integrated Report 2023

51

Value Creation PerformanceNon-financial Highlights(Thousand t-CO2)(t-CO2/100 million yen)

58.5

400

248

159

140

125

100

123

Intensity based on net sales(right axis)

45

197
117

40,00020,00020,000

0

0

15

0
2019

2020

CO2 Emissions by Scope(Thousand t-CO2)

2021

2022

(Thousand t-CO2)

Scope1

22

Scope2
FY2022

Scope2257

257

FY2022

1,833*Includes transmission loss
from electrical cablein Category 11: Use of Sold Products

Scope3

Scope319,808*Includes Category 11

1,554

Scope 1: Direct greenhouse gas (GHG) emissions
from the Company itself(fuel combustion and industrial processes)
Scope 2: Indirect emissions from use of electricity,heat, and steam supplied by othercompanies
Scope 3: Indirect emissions other than Scope 1
and Scope 2 emissions(emissions from other companies related
to the activities of the Company)

2019

2020

2021

2022

(Fiscal year)

4,679
71,696●Polyethylene

12,233●PVC

16,391●Aluminum

4,723●Steel3,298

Energy(Gigajoules)

2,778,056
Water resources●Tap water

194,562●Industrial water

854,655●Groundwater52(tons)

Fujikura Group Integrated Report 2023

1,116,157

11,564 11,428 11,283 11,201 11,335

Power & Telecommunication
Systems Business

2018

2020

2021

2022 (Fiscal year)

（%）

（%）

60

3.00

56.1

2.75

2.67

40
2.50

27.0

2.39

18.8
2.25

3.4

2.22

2.43

2.29

7.6
2.00

2018

OUTPUT

2019

2019

2020

2021

2022

(Fiscal year)

2018

2019

2020

2021

2022 (Fiscal year)* Number of male employees taking childcare leave ÷ Number of employees whose spouses have given birth × 100●Optical ﬁber cables

GHG emissions●Electrical wires and cables●CO2 from energy sources 117,582(tons)●Electronic equipment
components●CO2 from productdistribution●Automotive components

Waste●Industrial wiring●Waste generated●Manufacturing of cableconnector components, etc.

●Of which, ﬁnal disposal

94

Chemical substances(tons)

20,972

Lost Time Accident Rate (Fujikura)

CDP Climate Change Score(Rate)(Score)0.4

0.34(tons)

8,119●PRTR* releases andtransfers
1●VOC* emissions
2

A

41

A-

A-

0.3
B
0.2

A-

A-

B

B

B-

15

*1 PRTR: Pollutant Release and Transfer
Register*2 VOC: Volatile Organic Compounds

0.38

0.37

Value Creation Platform●Copper

Electronics BusinessSpecial Initiatives of the Fujikura Group●Silicon tetrachloride

13,498 14,018 13,505 12,022 11,674

Percentage of People with Disabilities Employed(Japan)0(tons)

Automotive Products
Business

Trend in Percentage of Men Taking Childcare Leave(Fujikura)*

Environmental Impact Accompanying Business Activities (Japan)

Raw materials

29,201 27,691 27,895 30,604* Full-time employees as of fiscal year-end

20

Manufacturing

Real Estate Business* Full-time employees as of fiscal year-end*Excludes Category 11

Category 11 accounts for a high percentage of emissions in Scope 3 and it is difficult to know the reduction status for other categories.
We have therefore included two types of graphs, one with Category 11 and one without. * Calculated within the scope of approved science-based targets (SBT)

INPUT

30,861

Other

Value Creation Performance

22

20,087

2018(Fiscal year)

CO2 Emissions by Scope (excluding Category 11, Scope 3)

Scope140,0001,295 1,275
1,221 1,298 1,128
10
14
21
17
18

* CO2 emissions are the total of Scope 1
and Scope 2 for consolidated Group.

30

0
2018

60,00053,717 52,434 54,762

Being a Leader Driving Value Creation and the Strategy

216

200

57,228 55,936

Group emissions overseas (left axis)

42.6
243

(No. of people)

Group emissions in Japan (left axis)

52.7

300

257

(Group) Employees by Business*(No. of people)

60,000

60

57.9

56.9

Group Employees*

Source of Value Creation

Trend in Domestic/Overseas CO2 Emissions (Scope 1 and Scope 2) and Intensity Based on Net Sales (Group)

C
0.1
D
0

0
2018

0
2019

2020

2021

D2022

(Fiscal year)

2018

2019

2020

2021

2022

(Fiscal year)

Fujikura Group Integrated Report 2023

53

Value Creation Performance

To Achieve Carbon Neutrality

Challenge

1

Challenge

Symbiosis between
plant workers and nature

Challenge

2

Challenge

4

Minimize use of water atplants and wastewater
management
Effective use of resources
and resource cycle

2030

2030

Reduce CO2 emissions from the Company itself

Scope1 and Scope2

Scope3(Reduction of at least 33% compared to FY2020)

Reduce CO2 emissions from the supply chain

Switch to renewable energy for more than(Reduction of at least 15% compared to FY2020)

45% of electricity used

TOTAL

(Thousand tons)

1,996

TOTAL

1,815

2000

Reduction in CO2 Emissions from the Company Itself

TOTAL

1,634

15%

reduction

Energyconservation

1500

1,650

Main Initiatives

History of Initiatives on Climate Change
Apr. 1992

Long-term Environmental Vision 2050
Challenge 1

Promoting use ofrenewable energy

Pursuing decarbonizationof the supply chain

Jul. 2012

Apr. 2013

Revised Fujikura Group Global Environmental
Charter (added preservation of biodiversity)

Sep. 2013

Became a signatory of the UN Global
Compact

Apr. 2016

Jul. 2017

Began responding to CDP questions
on water and the supply chainof CO2 emissions was outlined to achieve that and we are pursuing concrete

Apr. 2019

Joined the Japan Climate Leaders’Partnership (supporting member)

Sep. 2019

Affirmed the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations

Oct. 2019

Joined RE100

May 2023

Became a participating company
in the GX League

Jul. 2023

Obtained approval of science-basedtargets (SBT)

To achieve carbon neutrality, we plan to expand initiatives to our supply chain in
addition to pursuing initiatives in Fujikura and its Group companies. The FujikuraGroup obtained approval of its science-based targets (SBT) in July 2023.

Promoting use of renewable energy
The Fujikura Group has joined the RE100 and is targeting use of renewableenergy for 100% of electricity used in business activities. We aim to reachour target of 100% renewable energy use for electricity in 2050 by setting
45% in 2030 and 90% in 2040 as interim goals.

54

Fujikura Group Integrated Report 2023

346

289

2020

2025

232
2 0 3 0 (Fiscal year)

Carbon dioxide (CO2) emissions (thousand tons)

Scope1,2
Scope1,2○Purchase reasonably priced environmental credits andrenewable energy

Reduction of CO2
emissions fromthe supply chain○Pursue resource reuse○Pursue supply chain
decarbonization

Reduction in the carbon
footprint of products○Perform life cycle assessments○Calculate emissions for individual products
by integrating DX○Develop environmentally friendly products

Reduction of Total CO2 Emissions (Target and Results for FY2022)
24%

FY2022 target:
Reduction of at least 8%
Compared to FY2018

reduction(entire Group)
Scope2

281

Scope1 + Scope2:
314,000 tons of CO2
Scope1

measures such as energy conservation and use of non-fossil fuels.

Pursuing decarbonization of the supply chain

reduction

Purchasingenergy

2018

2022

33

* Numbers include the offset from environmental credits(Thousand t-CO2)

See Fujikura Group Environmental
Management Activity Guidelines
under Environmental Policy andTargets on our corporate website
for other environmental targets andindicators.
https://www.fujikura.co.jp/eng/esg/environmental/index.html

Main Initiatives in FY2022
Green Transformation (GX) Project Launched
In April 2022, Fujikura launched the GX Project as an internal cross-organizational project. The project is the pillar for activities
to achieve Long-term Environmental Vision 2050 Challenge 1, Zero CO2 emissions at plants by 2050. We are pursuing thefollowing activities to achieve carbon neutrality under the three themes of (1) energy savings from development of innovative
manufacturing and other activities and reduction of CO2 emissions through in-house power generation and purchasing energy, (2)reduction of CO2 emissions from the supply chain, and (3) reduction in the carbon footprint of products.

Fujikura Group Integrated Report 2023

Value Creation Platform

Jul. 2016

Formulated Fujikura Group
Long-term Environmental Vision 2050

One of the challenges set in Fujikura Group Long-term Environmental Vision
2050 is net zero CO2 emissions at plants by 2050. A roadmap toward reduction

Formulated 5th version of
the Fujikura Environmental Management
Action Guidelines (FY2016-FY2020)

0

Scope3* Scope 3,
not including
Category 11

Special Initiatives of the Fujikura Group

Obtaining approval ofscience-based targets (SBT)

Zero CO2 emissions at plants

Began responding to CDP Climate Change
Questionnaire

1,402
33%

500

○Actively roll out conventional energysaving activities

In-house power ○Introduce renewable energy through power purchaseagreements (PPA)
generation

1,526

1000

○Develop innovative manufacturing to increase
productivity and business competitivenessValue Creation Performance

Zero CO2 emissionsat plants

Established Fujikura Group Global
Environmental Charter

2050

Being a Leader Driving Value Creation and the Strategy

3

Zero CO2 emissions at
plants by 2050

Roadmap to Zero CO2 Emissions

Source of Value Creation

The Four Challenges in Fujikura Group Long-term Environmental Vision 2050

55

Value Creation Performance

Specifying Climate Change-related Risks and Opportunities

Risks

Source of Value Creation

The Fujikura Group is working to specify the risks and opportunities that could materialize in the process of transitioning to a
low-carbon economy. We are analyzing what kind of impact climate change will have on growth of Fujikura Group businesses,
based on the long-term forecasts of international research institutions (OECD, IPCC), social concerns, and requests forresponse to climate change from customers. Specified risks are re-evaluated as needed.

Opportunities
Climate Change Risk

Future Response[Policy/Legal Risk]• Increase in demand for power, especially electric power
demand, mainly in developing countries due to economic growth,urbanization, population growth, and other factors• Stricter CO2 emissions regulations in various countries throughthe introduction of a carbon tax, etc.
- Trial calculation of ﬁnancial impact from a carbon tax• Demands from customers and the countries Fujikura operates
in and obligation to reduce greenhouse gas emissions and ourcarbon footprint[Technology Risk]• Disruption of existing technology

Short Term/
Medium Term

[Market Risk]• Following the roadmap to 100% renewable energy, move
forward with extensive use of energy savings, introduction ofrenewable energy, credits, and other tools based on FujikuraGroup Environmental Long-term Vision 2050

Energy• Response to the Act on Promoting the Elimination of Utility
Poles (disaster prevention, etc.)• Strengthening response by joining the RE100 and aﬃrming
TCFD recommendations, and regularly monitoring andresponding to ESG rating indicators• Exponential growth in data distribution, storage, and analysis
volume due to the advancement of digitalization• Changes in demand for products and services

Telecommunication
Systems• Rising raw material prices and diversification of suppliers fromclimate change-related factors• Diversification of both power supply and demand forcompanies, individuals, etc., and increase in renewable energy
use under the 2º C scenario• Concern over the increase of natural disaster under the 4º C
scenario• Pursuing use of renewable energy in business activities (athead oﬃce, plants, etc.)• Temporary increase in capital investment cost from climate change
countermeasures requested by customers or the community• Power supply stabilization, increased eﬃciency, and progresson energy savings under the 2º C scenario through the use ofdigital technology• Rapid expansion in new service businesses that use digitaltechnologies such as big data, IoT, 5G, and AI• Advancement in CASE/MaaS• millimeter wave (mmWave) (wireless communication)[Reputation Risk]• Demands for information disclosure on and response to climatechange by customers, investors, and various rating organizations

Electronics[Acute Risk]• Impact on operations from flooding, a large typhoon, or othernatural disaster- Impact on business results if a production facility is damaged
and this reduces operating capacity or requires equipment
restoration, etc.
- Impact on production plans due to partial severance of the
supply chain→ Fujikura Group companies suffered massive damage fromflooding in Thailand in 2011, and it took ﬁve years to recover(Physical risk)Long-term[Chronic Risk]• Health considerations for employees who work in the area of
operation due to a rise in the temperature, or other changes• Securing the safety of employees due to an increase in theamount of rainfall• Impact on operations from a future rise in sea level

56

Fujikura Group Integrated Report 2023

[Energy Sources]
Products related to highly eﬃcient electrical power systems• Promotion of digital technology use[Resilience]Strengthening the resilience of social infrastructure such as
electrical wire and cable[Products/Services]
Roll out of solutions mainly for high density, small-diameter
optical cable (SWR®/WTC®)[Markets]
Expansion of Green-related products• Products for highly eﬃcient IT systems• Promotion of digital technology use• Strengthening the resilience of communication lines as social
infrastructure• Pursuit of R&D to respond to CASE

• Entrance into medical products• Promotion of digital technology use• Increase in automotive electronic components• Expansion of Green-related products• Increase in mmWave-capable components• Increase in demand for industrial and automotive connectors

Automotive• Increase in wiring harnesses accompanying increase inelectronic components

Products• Advancement of move to electric vehicles under a 2º C scenario• Increase in demand for lighter wiring harnesses• Pursuit of R&D to respond to CASE
• Combining knowledge of the automotive products businesswith the telecommunication systems, energy, and otherbusinesses to generate new businesses related to electricvehicles• Strengthening response to automotive components otherthan wiring harnesses and electric vehicles• Expansion of Green-related products- Domestic locations that will be aﬀected by flooding or a risein sea level are the head oﬃce, FUJIKURA HIGH OPT Co., Ltd.
(Kiba, Koto-ku, Tokyo), Numazu Copper Refining and RollingCo., Ltd. (Kanayaizumicho, Shimada City, Shizuoka Prefecture),
and NISHI NIPPON ELECTRIC WIRE & CABLE CO., LTD.
(Kasugaura, Oita City, Oita Prefecture)*Survey of government hazard maps

Expansion of Green-related products• Increase in industrial robots

CASE advances• Slope face maintenance around oﬃce sites and response tohigh tides and tsunami at plants near the ocean

Medium Term/[Products/Services]

Real Estate

Promotion of digital technology use• Need to consider the positive environmental impact of ZEB andother measures, etc.

Value Creation Platform

4ºC Scenario

Proliferation and expansion of renewable energy• Lighter wiring harnesses•Disaster preparedness/prevention response for affected
locations- We used the lessons learned from the damage caused by the2011 flooding at FETL in Thailand and implemented measures
such as diversifying locations and building a flood wall near thebusiness , from the perspective of BCP[Markets]

Special Initiatives of the Fujikura Group• Concerns over response to natural disasters under a 4º C
scenario

Opportunities

Value Creation Performance

2ºC Scenario(Migration risk)• Demand to minimize energy consumption during productmanufacturing or use renewable energy

Social Trends

Individual Businesses

Being a Leader Driving Value Creation and the Strategy

Type• Securing and maintaining tenants that demand environmental
friendlinessFujikura Group Integrated Report 2023

57

Value Creation Performance

Expansion of Environmentally Friendly Products

Green-related Products
The Fujikura Group performs a product environmental assessment at the product planning, development, and design stages toassess the environmental friendliness of a product and improve environmental performance. Products that meet the standards
are approved as Green products or Green Mind products. We are screening and registering 60 or more of these products ayear.

Spider Web Ribbon® (SWR®) and Optical Cable Using SWR®

Purpose of use

High-density optical cable for FTTx and large-scale data centers

Environmentallyfriendly

SWR®, in which single optical fiber strands
are intermittently bonded, forms a ribbon-likeconstruction that can easily be reshaped. As aresult, the slot protection used when bundlingfibers into a cable is no longer needed andwe were able to reduce the outer diameter
and weight of the cables themselves by up to60%.
We were also able to include a higher fibercount in cables using SWR ® by reducing
the diameter of fiber strands from 250μm to200μm, without increasing the outer diameterof the cable. This also reduced the weight. We
also used the same fiber pitch for 250μm and200μm fibers, which made fusion splicing ofboth possible. This contributes to improved
productivity during installation work.

Green-related Products
Number of Fujikura Group Products Registered as
Environmentally Friendly Products (Green-related Products)

Green Products
Products and services that improved
environmental performance remarkably fromthe perspectives of resource and energy savings,
decarbonization, etc.

Green Mind Products

Products approved from 2011 to March 2023

4,115

Of which, Green products
As of March 2023

23

Green-related product sales asa percentage of total net sales

57％

FY2022 results

Reducing the Environmental Impact During Manufacturing and Transport
1,728 Fiber-count ribbon loose tube optical fiber cableBenefits

58

Percentage reductionin amount ofplastic used in product56

Fujikura Group Integrated Report 2023%

Percentage reduction
in electricity consumption
due to improvementin product manufacturing efficiency

78%

Percentage reduction
in wood material used
for a wooden drum that issmaller in diameter

23%

Percentage reduction
in CO2 emissions
due to improvementin transport efficiency

47

Developed WTC®, a new slot-less cable structure,
which made the cables substantially smaller indiameter and lighter

Smaller diameterand lighter
Example: 300-count fiber
Finished outer diameter:
Reduced from approx. 21 mm to approx. 13 mm
Estimated mass: Reduced from 280 kg/km to 135 kg/km

Conventional type
Optical ﬁber cable with ribbon slots

New type
Small-diameter high-density optical ﬁber cable

Rack-mountable Optical Connector Termination Cabinets

Purpose of use

Optical connector termination cabinets equipped with optical cables for data centers

Environmentallyfriendly

Outer diameter:Φ23.0 mm
Weight: 356 kg/km

Can easily be reshaped so there
is no need for a slot structure

Fujikura successfully developed an optical termination cabinet that accommodates high density and is easy
to maintain. This termination cabinet enables storage of 1.5x the number of optical fiber cords comparedto similar products of other companies and contributes to resource conservation. Normally, when a cabinet
is simply packed to high density, it makes it
harder to insert and remove cables. However,the use of a sliding mechanism for theconnector trays has made it possible to easily
and safely insert and remove connectors
without making maintenance more difficult.
The use of SWR®/WTC® has also made it
possible to use smaller-sized cables and has
The use of a sliding mechanism for
Densely packed optical cords make it
increased the number of fibers that can beconnector trays increases the number
diﬃcult to insert and remove connectorsof fibers that can be inserted without
inserted in racks and pass through ducts.

Value Creation Platform

Outer diameter:Φ31.5 mm
Weight: 749 kg/km

Ribbon-shaped in
the normal shape

Product name1,728 Fiber-count Wrapping Tube Cable® (WTC®)

Comparison

SWR®/WTC® is contributing to
reduction in environmental impact
through cables that are lighter andsmaller in diameter, streamlining of
the manufacturing process, and use ofsmall-diameter drums.

Cannot be shaped so theymust be protected by slots

Single-count ﬁbers are bonded intermittently

Special Initiatives of the Fujikura GroupThe Fujikura Group established the Green-related product approval system to pursue development of environmentally friendly
products from the perspective of protecting the global environment. The Green Product Management Committee screensproduct environmental assessment check sheets submitted by each business unit and registers those that score at or above acertain level on the standards as Green-related products. The product environmental assessment check sheet was formulated
in 2011 and is updated on a regular basis. A member of the Research and Development Unit is appointed as chairperson of
the Green Product Management Committee and committee members are selected from each unit. We have adopted the TypeII environmental labelling specified in ISO 14021 for approval of Green-related products.

Single-count ﬁbers longitudinallybonded and bundled

New ribbon ﬁber (SWR®)

JIS C 6838:2020: Intermittently bonded structure

Value Creation Performance

Products and services assessed as achieving higher
environmental performance than conventional
products on the environmental impact
assessment

Cumulative Number of Products
Registered as Green-related Products

Conventional ribbon ﬁber

Being a Leader Driving Value Creation and the Strategy

Product nameSource of Value Creation

Environmentally Friendly Products

making maintenance more diﬃcult%

Fujikura Group Integrated Report 2023

59

Value Creation Performance

Human Resource Development

The Fujikura Group firmly believes that increasing the value and engagement of human resources creates value for society andwill lead to the maximization of corporate value. We will continue to create an organization where employees can gain goodexperience. Investing in human resources is theme we should make our top priority as the Fujikura Group achieves sustainablegrowth and we will strive to achieve well-being both for our company and our employees by implementing the measures andinitiatives necessary in the four cornerstones of human resource management, below.

Increasing the value and engagement of human resources

Four Cornerstones of Human Resource Management

2

Pursuit of diversity andinclusion

Support for building
careers

Company

Development of humanresources capable of active
contribution globally

Employees

Experience job satisfaction
and generate innovation

3
4

Number of
employees

Creating an organization
where each individual
can play an essential role

Average years of
employment

Men

Women

2,028

369

(84.6%)(15.4%)

18.5

16.9

Results and Targets (Fujikura)

Indicator

Percentage of new hires
who are women(Corporate planningcareer track)
Percentage of womenin managerial positions

Evaluation and treatment

Action Plan for Promoting the Advancement of Women

Treatment according to
the role played,
contributions, and results

We are working to foster an internal culture that will increase the number ofwomen in management. This not only includes eliminating concerns that women
who are in positions just under management level have in building their careers. It
also includes the simultaneous effort to change the mindset on the management
side and encourage systematic development and promotion of women.

Respect for human rights, occupational health and safety, and health management

Pursuing Flexible Workstyles
Telecommuting System
The existing work-from-home rules were revised in January 2021 to adapt to the new normal and we expanded the scope for which thesystem is used. We expanded the system mainly by eliminating the limit on the number of days employees can telecommute, expanding
eligibility, and paying a telecommuting allowance.

One employee’s
perspective as awoman

FY2021

FY2022

TargetAdministrative

45%

80%

At least 50% every year

Technical

7%

7%

At least 10% every year

3.9%

3.9%

5.6% (by FY2025)(1) Holding seminars on diversity management(2) Considering ways to create a framework that will encouragesystematic development and promotion(3) Providing opportunities for interacting with diverse role models(4) Sending employees out to interact with others in a different industry

Catinean Andreea

Manager, Automotive Products Planning Division, Automotive Products Business Unit
I joined Fujikura in 2012. After gaining experience in procurement and logistics in the Global Procurement
Planning Division of the Automotive Products Business unit, I had two children and took maternity andchildcare leave while working in the Automotive Products Planning Division and returned to my current positionin 2021. My current work mainly involves proﬁtability management and I frequently engage in exchanges withthe accounting divisions at European locations. I am working shortened working hours from 10:00 a.m. to 4:30
p.m., but also participate in meetings at night on rare occasions due to the diﬀerence in time zones. Although
my eldest child is now in elementary school, my youngest child is in nursery school and still requires a lot of
work, so it is extremely helpful to be able use a hybrid workstyle of coming into the oﬃce and working fromhome. The system for taking time oﬀ in hourly increments also enables me to successfully manage both workand childcare. I carefully manage my schedule and take care to communicate closely with work colleagues toaccomplish results in limited work hours. I ﬁnd my current work very fulﬁlling and can take on new challenges
such as responding to the situation in Ukraine, the semiconductor shortage, and other aspects of the dizzying
pace of change in the external environment and learning more about management, ﬁnance, and accounting. I
want to become a management professional in the future while balancing work with raising my children.

Fujikura Group Integrated Report 2023

Value Creation Platform

Fujikura strives to create an environment where employees can demonstrate their abilities while utilizing their individuality,
regardless of differences in race, nationality, gender, sexual orientation, gender identity, age, disability, sense of values, faith,religion, or other attributes. We strive to provide a range of workstyles that respect the needs of our employees and pursue
flexible workstyles to adapt to change in global conditions or circumstances specific to each country as we work to increase
the value and engagement of our human resources

Fujikura Group Integrated Report 2023

Employee Status (Fujikura) * As of March 31, 2023

Assignment of the rightpeople to the right places

Diverse Human Resources and Workstyles

60

Fujikura has positioned promoting the advancement of women as key diversity and inclusion measure. To enhance corporate value, we
strive to foster a culture in which all employees cooperate and work together while respecting one another, regardless of gender, and which
welcomes new ideas and makes it easy to generate creative ideas.

Special Initiatives of the Fujikura Group

Foundation

Creates an organization
where employees can gain
good experience

Promoting the Advancement of Women

Value Creation Performance

1

Diverse human resources
and workstyles*Such work is not permitted when there is a need to avoid long working hours to fulfill the obligation to consider safety, and when it would make it diﬃcult to fulfill the obligation toprotect confidentiality, avoid competition, and faithfully fulfill work obligations.

Being a Leader Driving Value Creation and the Strategy

Contributing to a sustainable society through “tsunagu” (connecting) technologies

Rules on side jobs and concurrent work were established in January 2023. Employees can engage in side jobs or concurrent work undercertain conditions*, provided they obtain permission from the Company in advance. Eight employees have submitted requests in the threemonths since this system was introduced. The main side jobs include work such as consulting, creating and managing websites ande-commerce sites, work that utilizes the employee’s qualifications and expertise, and a family business. Our position is that employees take theinitiative and responsibility for engaging in such work outside of working hours. We encourage employees to build their careers in diverse ways
and are striving to foster an organizational culture which encourages employees to take on challenges.

Source of Value Creation

Side Jobs and Concurrent Work

Basic View on Human Resource Management61

Value Creation Performance

Human Resource Development

FY2022 Training Programs
Training by grade level
Mandatory training

Fujikura strives to create a workplace that makes it easy for anyone to work and provide an even better environment for achieving abalance between childcare and work, regardless of one’s gender. We are actively encouraging men to take childcare leave, which will
also help to solve social problems such as consciousness of gender roles, fewer children being born, and a decline in the working
population. Initiatives in FY2022 included publishing a Handbook on Childcare Leave for Men for managers and male employees,
providing training through fathers' classes and managers' training on managing childcare leave for men to foster a culture thatmakes it easy to take childcare leave. In FY2022, 56% of men took childcare leave and the average leave taken was 34 days.

Training for
new Groupcompany presidents

One employee’s
perspective on
taking childcare
leaveManagers

Assistant Manager, Laser and Photonics Research Department

Information security

Training forsecond-year
employees
Training
for new
employees

Managerial Talent Development
Since 2019, Fujikura has been managing
a pool of managerial talent selected
mainly by members of management andHuman Resources & General Affairs. The
purpose of this pool is to continuously
develop management candidates for the
next year and the year after that. Those in
the pool are provided training and given
experience to generate a stable supply of
management candidates.

62

Fujikura Group Integrated Report 2023

Succession Plan Scope

Pool Scope/Purpose

CXO

CXO

Corporate Officer

Grade 1
Corporate Officer

Nextfiscal year

Pool 0(CXO candidates)

Grade 2
General Manager
Head of Division,
General Manager ofa Center

Fiscal year
after next

Pool 1(Grade 1
successor
candidates)

Next
fiscal year

Grade 3GeneralManager ofDepartment

Candidate selection

Pool 2(Grade 2
successor
candidates)

Grade 4
Senior Manager ofGroup

Candidate selection

Pool 3(Future top
management
candidates)

Initiatives to expand the number ofsuccessor candidates forimportant positions
Specify position-based candidates
and provide individual intensive
training measures with theenvisioned position in mind andequip for promotion
Initiatives to create a deeper poolof managerial talent over the
medium term
Accelerate growth through early
selection and provision ofopportunities to develop
skills/acquire experience

Assignment of the Right People to the Right Places
A career challenge system was introduced in 2016. Under this system, an employee can take the initiative to apply fortransfer to a specified position. We encourage each employee to exercise independence and expect the creation of anautonomous organization to lead to innovation. Moreover, because Fujikura operates its businesses globally, there is a highneed for employees to learn the local commercial practices in each country and region. We are providing an environment thatenables employees to gain experience by being stationed overseas from an early point and are focusing on developing humanresources capable of actively contributing globally.

Value Creation Platform

We have established an autonomous training program to support employees in building their own careers. Under this program,
employees can voluntarily opt to take advantage of the learning opportunities they need to build their own career. Fujikura is also
pursuing initiatives aimed at providing opportunities for employees to think independently about their own careers. In addition tolaunched career-design training by grade level, everyone who has been promoted to a planning professional and members of HR
management meet with employees to discuss their careers.

Subcontracting Act

Special Initiatives of the Fujikura Group

Support for Building a Career

Training by
age range

Elective
training

Talent-based pool

Creating a green curtain at the head office

Export management
TOEIC cost
Training subsidization
Professional
and Japanesefortraining External
employees online language
Insider trading
within training
stationed English training
a division
overseas conversation
program
Corruption prevention

ComplianceFujikura Cube Ltd., special subsidiary for promoting
the employment of people with disabilities
Fujikura Cube Ltd. actively employs people with disabilities. It was established on the grounds of Fujikura’s Sakura
Works in November 2015 as a wholly owned subsidiary of Fujikura Ltd. with the mission to be a company whereanyone can actively contribute. Fujikura Cube launched its business in greening and cleaning operations in April 2016,
and was accepted as a “Special Subsidiary” in June 2016. It has gradually expanded the scope of its business sincethen, and is providing support services to various companies in the Fujikura Group in the areas of work on greening
the premises and environmental conservation, cleaning and maintaining company housing and singles dormitories on
the premises, printing business cards, administrative support services, foliage plant rental services, laundering plantuniforms, farming/cultivation and sale of farm produce, horticulture, and processing and manufacturing on consignment.

Quality

Position-based pool

The Fujikura Group is actively working to employee people with disabilities and establish a work environment from theperspective of fulfilling our social responsibilities and achieving normalization (mutual support of people with disabilities). We aremaking progress on improving the work environment in the entire Group to make it easy for people with disabilities to work. Our
goal is, of course, to achieve the legally mandated employment rate, which was raised to 2.3% in March 2021, as well as fulfill
our social responsibilities and achieve normalization. The legally mandated employment rate for FY2022 was 2.67% (in Japan).

Intellectual property

Onlinetraining
video
service

Position Management(Selection of successor candidates)

Employing People with Disabilities

Managerial
talentdevelopment
programValue Creation Performance

I took about one month of childcare leave from March 2023 when my first child was born. The number of mypeers and junior colleagues taking childcare leave is increasing and I had almost no concerns because I had
heard others talk of their experiences beforehand. I thought taking leave was good because it improved myscheduling skills as well as my housework and childcare skills. Although I did housework before the baby wasborn, during leave I was in charge of the milk, diapers, putting the baby to sleep, taking the baby for checkups, meals, wash, and other tasks and managed to master the basics. I met with my superior upon returning
to work and was able to consult him on my workstyle following my return to work, based on the interview
sheet. This reassured me. I was very grateful that the company had established a support system and that mysuperior understood what it takes to care for a child.

Planning
professionals

Other

Internal reporting(whistleblowing)

Contracts
andlegal basics

Tomohisa Endo

Training by division

Harassment
prevention

Training for
new Group
Senior managers
New manager
training

Global humanresource development

Being a Leader Driving Value Creation and the Strategy

Training for
new corporate officers

Training for all levels
Careerdesigntraining

Source of Value Creation

Encouraging Men to Take Childcare Leave

Management
Optional
development
menu-based
training
training(selection-based)

Evaluation and Treatment
In Fujikura’s personnel system, we have introduced a system of evaluating and compensating employees according totype of job position and role. Nationality, gender, or being a new hire or mid-career professional play no role in promotion
and treatment. We also emphasize equity in evaluating personnel to establish an environment where each employee candemonstrate their abilities to the fullest extent.

Fujikura Group Integrated Report 2023

63

Value Creation Performance

Supply Chain

Supplier Assessment System

Fujikura Group Basic Procurement Policy

4. Environmental Preservation

The Fujikura Group regularly provides a CSR procurement self-assessment questionnaire and a procurement department survey
to the main suppliers in our supply chain to ascertain the actual status of CSR activities in the supply chain. We share informationon the results of the survey with our suppliers in the form of feedback. The main question topics in the survey are listed below.

64○ Corporate governance relating to CSR○ Environment○ Information security○ Human rights○ Fair corporate activities○ Supply chain○ Labor○ Quality and safety○ Coexisting harmoniously with local communities

Fujikura Group Integrated Report 2023

Dynamic
improvement
activitycycle● Revise rules and standards
IO

N

Assistance (handle complaints, correct)
Education/Awareness

CH

E● Confirm current status andsort out issues● Exchange opinions withinvestors, experts, etc.

Dialogue/Consultation (stakeholder engagement)
Information disclosure

Compliance with laws, regulations, and rules concerning respect for human rights
Respect for human rights in all business activities

Specification of Envisioned Human Rights Risks and Regular Close Scrutiny
The Fujikura Group uses international guidance on human rights, customer surveys, and the questionnaires of ESG ratingorganizations to identify potential human rights risks in business activities and closely scrutinize them on a regular basis.
Envisioned Human Rights Risks Relating to Fujikura Group Business Activities

Business Activities

Procurement

Manufacturing

Sales

Human Rights
Risks

Child labor, forced labor, abuse of power,
discrimination, non-payment of wages,
unfair dismissal, health and safety, etc.

Occupational health and safety,
labor-management relations,foreign workers, freedom of association,harassment, etc.

Infringement of human rights
due to product quality andsafety or unintentional use, etc.

Stakeholders

Suppliers, local community

Group employees

Customers, local community

Impact on
Businesses

Impact on stable procurement andrisk of customer losses

Decline in engagement

Damage to brand value

Identifying Risks

Communication with suppliers or
conducting surveys through Partners Meetings

Use of internal reporting system,
internal audits by an expert division,and response to RBA audit
from customers

Ascertaining trends
in proposed legislation
relating to human rights

Fujikura Group Integrated Report 2023

Value Creation Platform

CSR Supply Chain Surveys

DN● Specify envisioned humanrights risks● Perform assessment using
customer audit responses,
ESG rating institution survey
items, supplier surveys, etc.

Special Initiatives of the Fujikura GroupAs corporate globalization has accelerated in recent years, the corporate social responsibility (CSR) demanded in corporate
procurement activities is becoming increasingly important. Fujikura and the Fujikura Group regularly hold internal meetings
on CSR where they explain related laws and regulations and share information on compliance, supplier management, andother initiatives. They also consider themes that should be shared with all suppliers as ESG themes increase, including theimportance of human rights due diligence on conflict minerals and other aspects of the supply chain, and information relating
to response to climate change. These meetings are strengthening the skills of staff members in charge of procurement. The
Fujikura Group Partners Meeting is also held every year as a venue for engaging in direct dialog with our suppliers. We areworking to maintain CSR procurement through the entire supply chain by communicating with suppliers directly to help themunderstand CSR procurement in the Fujikura Group.

A

T

Fujikura Group CSR Procurement Structure

Based on the Fujikura Group Policy on
Human Rights, the Fujikura Group takes
steps internally to address human rights
issues when they emerge through thecompany’s internal reporting system
and Partners Meetings with suppliers.
We are building a human rights due
diligence system according to the processdescribed in the UN Guiding Principles on
Business and Human Rights.

● Formulate together with the
Sustainability Targets 2025
and the relevant divisions

AC

1. Contribute to corporate profits through fair and impartial procurement activities
2. Maintain and enhance society’s trust in the Fujikura Group by complying with laws and regulations and maintaining confidentiality.
3. Maintain strict discipline and earn trust within and outside of the Group as an even-handed procurement team member.
4. Prevent breach of trust and improper actions.

Practicing Human Rights Due
DiligenceO

Fujikura Group Procurement Purchasing Division Code of Conduct

Respect for Human Rights

K

Fujikura Group companies strive to maintain an environmental
management program designed to minimize the impact on theenvironment together with our suppliers in order to contribute topreservation of global environment and realization of sustainable
society.

Value Creation Performance

Fujikura Group Companies faithfully and honestly protect suppliers.
We always endeavor to develop collaborative, mutually-beneficial
relationships with suppliers based on mutual trust. We do notdisclose any information obtained through business with suppliersto third parties without prior consent.

Fujikura Group companies comply with not only relevant laws
and regulations but also conduct transactions in accordance withbusiness ethics and social norms in the countries and regions where
we are doing business.

C

2. Collaborative Relationshipwith Suppliers Based on Mutual Trust

3. Compliance with Laws, Regulations and Social Norms

PL

Fujikura Group companies open doors worldwide for suppliers.
We will provide equal opportunity with potential suppliers andencourage free competition. We evaluate them through fair andsound assessment process for price, quality, delivery, stable supply,
technological competence and reliability.

The promotion and penetration of CSR procurement requires direct dialogue with suppliers. The Fujikura Group hosts the
Fujikura Group Partners Meeting in Tokyo and Shanghai every year to obtain the understanding and cooperation of suppliers
and work toward CSR procurement across the entire supply chain.
At the Partners Meeting, the Fujikura Group's management plan and procurement policy are explained to the suppliers
who participate. Through the distribution of CSR procurement guidelines, suppliers are encouraged to participate in the
Fujikura Group's procurement activities and we ask for their understanding and cooperation. In recent years, we have shared
the importance of responsible mineral sourcing and other aspects of human rights due diligence in the supply chain, andinformation on response to climate change and other ESG themes with suppliers.

Being a Leader Driving Value Creation and the Strategy

1. Fair and Impartial Trade

Partners Meeting

Source of Value Creation

The businesses of the Fujikura Group are supported by all of our suppliers, who are the business partners that supply us withraw materials, components, and equipment.
The Fujikura Group established the Fujikura Group Basic Procurement Policy to build strong relationships of trust with our
suppliers through fair, impartial, and honest procurement activities. We also established the Fujikura Group Procurement
Purchasing Division Code of Conduct to strictly control our own actions.
In addition to this, each group company in Japan participates and regularly conducts educational sessions on the
Subcontracting Act and is continuing compliance efforts.

The Fujikura Group introduced a supplier assessment system in FY2016 to establish an appropriate supplier structure by
fairly and impartially evaluating suppliers from the standpoint of quality, cost, delivery, development, and management. We are
currently expanding the scope of our implementation, and are building deeper partnerships with highly rated suppliers.

65

Special Initiatives of the Fujikura Group

Fujikura Kiba Millennium Woods

Bird’s Eye View
Source of Value Creation

Walking path around the water’s edge (Koto-ku)

Upper pond

Lower pond
Features

Built in 2010
Area: 2,200 m2
Limited to native
species

Communication with Local Residents

Fujikura’s Resolve to Protect Biodiversity

Created as a Symbol of the Local Community

Wildlife and Plants in Fujikura Kiba Millennium Woods

Plants● 73 species native to the Kanto area;
500 tall and medium-sized trees,
2,000 shrubs● 35 grass, moss, and aquatic plant species;
approx. 15,000 plants

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Fujikura Group Integrated Report 2023

Fish

● Limited to fish, shrimp, andshellfish in the Arakawa watershed● Approximately 800 fish of 10 different
species were released; there are now around
1,300 fish

Birds

● Around 20 species,
including the common kingfisher,brown-eared bulbul, and spot-billed duckInsects● Over 50 species of dragonflies,
butterflies, and other insects spotted

We received the Award of Excellence (large company division) for the first time in the 2020
Environmental Human Resource Development Company Awards sponsored by The Ministry of
the Environment and the Environmental Consortium for Leadership Development (EcoLeaD).
This award was given in recognition of the aforementioned kinds of environmentally-friendly
production activities, efforts toward employee education, and other comprehensive initiatives,and activities to promote biodiversity in cooperation with the local area and government, as
represented by the Fujikura Kiba Millennium Woods. The 2020 Environmental Human Resource
Development Company Awards recognize companies which support activities to nurture andproduce personnel to lead environmentally-friendly company activities. It is based on the Act on
the Promotion of Environmental Conservation Activities through Environmental Education.

Certiﬁcate of Commendation

Registration as a Good Edo-Midori Green Area by the Tokyo Metropolitan Government andParticipation in Biodiversity Alliances
In 2017, Fujikura Kiba Millennium Woods was registered as a good green area under the Edo-Midori Green
Area Registration. This system restores the environment suitable for the creatures of Tokyo, including wildlife
such as insects and birds, by planting vegetation (native species) naturally distributed in Tokyo on the premisesof buildings, etc. Fujikura was registered because of its participation in the Edo Green Restoration Program, aproject to plant native species being implemented by the Tokyo Metropolitan Government as a public-private
partnership, where relevant industries join together to formulate measures for spreading native species in Tokyo.
The Fujikura Group is participating in the Ministry of the Environment 30by30 alliance for biodiversity and istargeting registration in the World Database on Other Effective Area-based Conservation Measures (OECM).
We have also affirmed the Keidanren Initiative for Biodiversity Conservation and are working to preserve andimprove biodiversity.
Fujikura Group Integrated Report 2023

Value Creation Platform

When we redeveloped the grounds of our head office in November 2010, we opened a biotope and garden called Fujikura
Kiba Millennium Woods next to our head office in response to requests from local schools and citizens for more greenery andthe increasing interest in biodiversity.
The name, Fujikura Kiba Millennium Woods, incorporates the hope shared with everyone in the Kiba area of Koto-ku that theabundance of nature will persist in the future for 1,000 years.
Fujikura Kiba Millennium Woods covers 2,200 m2 and contains two ponds and a river that connects them, a floating island,
walking paths, and other features. We gave preference to native species in designing it to replicate the abundant forests andwoods that existed in the Musashino plateau several hundred years ago, as a space dedicated to wildlife. The woods have now
grown enough for the chicks of the spot-billed duck and the common kingfisher to fly out of their nests.

Fujikura Given the Award of Excellence in the 2020 Environmental Human Resource
Development Company Awards from the Ministry of the Environment

Special Initiatives of the Fujikura GroupThe Fujikura Group is keenly aware of the close relationship between its business activities and the global environment, andhas set the goal of being a corporate group that is good for both people and the environment and strives to make every effort
to protect the global environment. All living things live by mutually supporting one another either directly or indirectly, andour lives and lifestyles are supported by the many blessings generated through biodiversity. The Fujikura Group formulated“Roadmap 2030: A Long-Term Vision for Biodiversity” in January 2013 and is pursuing initiatives aimed at increasing awarenessof protecting biodiversity.

Use for nature education activities for local children Use for graduate school classes

Value Creation PerformanceSee “ Fujikura-Kiba Millennium Woods, a Symbol of Fujikura’s Resolve to Protect
Biodiversity and the Local Community ” on our corporate website for more information.

At Fujikura Kiba Millennium Woods, we place importance on active
communication with employees and members of the community.
The woods are mainly used for educational activities to raise
environmental awareness among employees, nature education for
local preschools, kindergartens, and elementary schools, as well as
for graduate school classes and government-sponsored ecologicaltours.

Being a Leader Driving Value Creation and the Strategy

Open path67

Special Initiatives of the Fujikura Group

Supporting Fujikura Gakuen

Support is provided through fundraising donations, volunteer activities, and product sales, which also contribute to fostering theright mindset (thinking, action, and belief) for each individual employee.

Purchase of
Fuji Café
products
within the GroupOn-site sale ofFuji Café
products

Supporters club(wage deductions)

Fujikura Gakuen
Circle of Support

Our support of Fujikura Gakuen forms part of the Fujikura Group’s social contribution activities. The goal is to support its users,
namely children with cognitive disabilities, in developing physically and mentally in a wholesome manner and gaining essential skills
for living independently in the local community while preserving their dignity.

Participationin events(founding festival,
Christmas)

Works donations

Employeedonation drive

Special Initiatives of the Fujikura Group

What Is Fujikura Gakuen?
Fujikura Gakuen, a social welfare corporation, was founded on June 7, 1919 in the town of Motomachi in Izu Oshima. Harukichi
Nakauchi, the blood brother of the founder Zenpachi Fujikura, donated a sizable amount of his personal assets (currently worth
approximately two billion yen) and 40,000 tsubo of land (approx. 132,000 m2) in Izu Oshima and buildings to establish the school andresidence for mentally handicapped children and adults. Today, Fujikura Gakuen has facilities on Izu Oshima and in the Tama area
(Hachioji City). These facilities have around 100 workers who provide 24-hour care and education to approximately 130 individuals.
Since its inception, the Fujikura Group has made donations as a company and individual Fujikura employees have also
donated their own money to support operation of the organization. The support provided to Fujikura Gakuen is considered the
focal point of the Fujikura Group’s social contribution activities, and this support will be sustained going forward.

Vending
machines
donations

Seconding officers

On-site Sale of Fuji Café Products

Fujikura Sakura Works conducts fundraising
activities in support of Fujikura Gakuen. Sakura
Works will continue its supporting activities in the
future.

Located in Izu Oshima, Fuji Café is a living assistance center wherestudents of Fujikura Gakuen undergo vocational training to gain
independence. The Fuji Café exhibition and sale, which features products
made by Fuji Café (pound cakes, cookies, etc.) for sale to employees, hasbeen hosted at the Fujikura head office and Nishi Nippon Electric Wire &Cable with ongoing support.

Fujikura Gakuen in Izu Oshima

Established 1919
68

Fujikura Group Integrated Report 2023

Facilities 2 locations** Izu Oshima, Tama area (Hachioji City)

Fuji Café, operated by Fujikura Gakuen

No. of clients Approx. 130

Value Creation Platform

Presenting Donations from the Works

Group Company Donations

Harukichi Nakauchi,
founder of Fujikura Gakuen

Value Creation PerformanceGroup company
donationsBeing a Leader Driving Value Creation and the Strategy

Corporate
donations

Source of Value Creation

Main Supporting Activities

Many Fujikura Group companies, including
Fujikura Ltd., make donations. The entire FujikuraGroup considers the support provided to Fujikura
Gakuen to be the focal point of our social
contribution activities, and this support will besustained going forward.
Head office

Nishi Nippon Electric Wire & Cable Co., Ltd.
Fujikura Group Integrated Report 2023

69

Value Creation Platform

Corporate GovernanceFujikura adopted the organizational form of a company with an Audit & Supervisory Committee. This organizational form waschosen to enable agile, effective business operation by delegating substantial authority from the Board of Directors to executive
directors and enable thorough deliberation by multiple outside directors who are independent of company management andpossess extensive expertise in a wide range of areas.
Fujikura has therefore adopted the effective corporate governance structure described below for the sustainable growth phrase.

Operational Execution Structure

Establishment of a System of Internal Controls by Executive Directors and Audits by the Audit and Supervisory Committee
Executive directors are in charge of business divisions
they are assigned by the Board of Directors and supportingorganizations for business divisions, corporate divisions,or Group companies overseen by them or by an executive
officer under their control. They assume responsibility forcompliance with and implementation of Fujikura’s system
of internal controls. As members of the Board of Directors,
which makes decisions on the system of internal controls,
executive directors also assume responsibility for theappropriateness of the internal control system.
The Audit and Supervisory Committee supervises
compliance with and implementation of the system ofCorporate Governance Structure

Fujikura adopted a system of appointing a Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Technology
Officer (CTO), based on resolutions of the Board of Directors. The CEO (who may also be referred to as “Director, President
and CEO” below) serves as the CEO of the corporate group consisting of Fujikura and its subsidiaries (hereafter, collectively
referred to as the “Fujikura Group” while each subsidiary will be referred to as a “Group subsidiary”). The CFO is a person withultimate responsibility for the area of finance which requires an extremely high level of expertise, while the CTO is a person withultimate responsibility for the area of technological development, which similarly requires an extremely high level of expertise.
This sort of triumvirate with the CEO at the top and whose functions being supplemented by the CFO and CTO enables
Fujikura to operate its business based on more effective and sophisticated management decisions.

70

Audit & Supervisory Committee

ReportCooperate

Cooperate

Audit andSupervisory
Committee OfficeInternal
Audit
Department

Risk Management
Committee

When making decisions on the following matters concerning the nomination of directors, the Nominating Advisory Committee,
an advisory body to the Board of Directors (having an outside director as Chair and outside directors as the majority ofcommittee members), verifies the fairness and appropriateness of the Board of Directors’ decision-making process.

Whistleblowing System● Draft proposals for resolutions of the General Meeting of Shareholders concerning election and dismissal of directors● Successor plans ● Criteria for election and dismissal of directors ● Criteria for of independence for outside directors

External Reporting Point(Law Office)Fujikura Group Integrated Report 2023

Directors not serving as
Audit and Supervisory
Committee Members

Cooperate

Internal Reporting Point

Director,
President &CEO

ReportSustainability
Strategy Council

Management
Innovation
Committee

Independent
Business
Subsidiaries

Inquiry
ReportRemuneration
Advisory
Committee

Director and
CFO

Director and
CTO

Business
Management
Real Estate

New BusinessR&D
Quality Control

Value Creation Platform

Nomination and Remuneration of Directors

Nomination
Advisory
Committee

Board of Directors

Executive
Officers Meeting

Corporate Officer

Corporate Officer

Telecommunication
Electronics
Automotive
PowerManagement
Strategies
Corporate
GovernanceCorporate Staff

Special Initiatives of the Fujikura GroupThe Audit & Supervisory Committee consisted of five committee members in total as of the close of the Annual General Meetingof Shareholders held for the fiscal year ended March 31, 2023. These included one full-time internal director and four outside
directors who are independent of Fujikura’s management.
The Audit and Supervisory Committee Office was established and is staffed with exclusive, full-time personnel as theorganization which supports the activities of the Audit and Supervisory Committee, at its direction. (Meetings held in FY2022: 19)

Following the Shareholders' Meeting for the 175th Fiscal Period

General Meeting of Shareholders

Accounting Auditors

Audit & Supervisory Committee

internal controls concerning the performance of duties byexecutive directors. The Committee therefore audits thatstatus of compliance and implementation in Fujikura andin Group companies, as needed. In addition to checking
and verifying the contents of information provided by the
executive side, the Audit and Supervisory Committee
requests direct explanations from executive directors
and others responsible for execution. As members of theBoard of Directors, which makes decisions on the system
of internal controls, Audit and Supervisory Committee
members also assume responsibility for the appropriatenessof the internal control system.

Value Creation Performance

The total number of Directors at the close of the Annual General Meeting of Shareholders held for the fiscal year ended March
31, 2023 was nine, consisting of four outside directors (all of whom were Audit and Supervisory Committee members) andfive internal directors. The outside directors who make up nearly half of the Board of Directors are independent of Fujikura’s
management and possess management experience and expertise in finance, accounting, legal matters, and other areas. Theseoutside directors with diverse insights and expert knowledge thoroughly discuss important matters concerning the company’s
management (e.g., formulation of medium and long-term strategy, business portfolio restructuring) with internal directors at theBoard of Directors meetings and make decisions based on such discussions.
The Board of Directors comprises three executive directors and six directors who do not execute business. The Chairperson of
the Board of Directors who does not execute business presides over the proceedings of the Board of Directors meetings as its
chair to strengthen the Board of Directors’ oversight function. (Meeting held in FY2022: 15)● Director remuneration and the system for determining the amount thereof● The amount of remuneration for each director

Being a Leader Driving Value Creation and the Strategy

Board of Directors

When making decisions on the following matters concerning remuneration of directors, the Remuneration Advisory
Committee, an advisory body to the Board of Directors (having an outside director as Chair and outside directors as the
majority of committee members), verifies the fairness and appropriateness of the Board of Directors’ decision-making process.

Source of Value Creation

Basic View on Corporate GovernanceFujikura Group Integrated Report 2023

71

Value Creation Platform

Corporate GovernanceCommittee Activities

Stock-based compensation

Description

Composition

Nomination
Advisory
Committee

Advisory body to the Board of Directors established with the
purpose of ensuring the objectivity and transparency ofdecision-making processes related to the nomination ofcandidates for Directors.

Chairperson: Yoji Yamaguchi, Director*
Members: Hamako Hanazaki, Director*1;
Keiji Yoshikawa, Director*1; andNaoki Okada, Representative Director, President and CEO

6

Remuneration
Advisory
Committee

Advisory body to the Board of Directors established with the
purpose of ensuring the objectivity and transparency ofdecision-making processes related to the remuneration for
Directors.

Chairperson: Keiji Yoshikawa, Director*1
Members: Yoji Yamaguchi,Director*1;
Kozo Meguro, Director*1; andNaoki Okada, Representative Director, President and CEO

7

Management
Innovation
Committee

Committee that examines and promotes streamlining ofmanagement resources (including governance) and optimizing
business portfolio.

Chairperson: Naoki Okada, Representative Director, President and CEO
Composed of executive directors andcorporate officers

23

Sustainability
StrategyCouncil

Council that promotes the necessary activities for sustainablecorporate management, such as formulating sustainability targets
from a perspective of environmental, social, and financial
materiality

Chairperson: Naoki Okada, Representative Director, President and CEO
Composed of executive directors andcorporate officers

3

Risk Management
Committee

Committee established to verify the Company’s businessexecution system and execution status from the perspective ofrisk (including compliance), to prevent and evaluate losses, toformulate policies, and to share the contents of the said policies.

Chairperson: Naoki Okada, Representative Director, President and CEO
Composed of executive directors andcorporate officers

19(including the Group
Crisis Management Committee)

Number of Meetings Held*21(2)Total Amount of Director Remuneration

Director Remuneration(1)Policy on Determining Remuneration of Directors

A fixed amount of compensation is allocated for the monitoring and supervision functions of each director, according to his/her rank and grade.
Short-term performance-linked compensation
Compensation ranges from 0% to 200% of the basic compensation set by rank and grade, according to corporate performanceand performance of the division the director is in charge of, and performance is based on certain indicators (operating margin,
ROE, ROIC). These indicators are used because they easily reflect management policy, strongly correspond to shareholder
return, and are highly compatible with the Fujikura’s growth strategy. The targets for indicators of short-term performancelinked compensation in the fiscal year under review were the abovementioned indicators calculated from the consolidated fiscal
year plan for FY2021, which was approved by the Board of Directors at the end of FY2020. The degree to which these targets
were achieved, compared to the indicators calculated from the consolidated fiscal year results for the same year, is measured todetermine amount to be paid in short-term performance-linked compensation in the fiscal year under review.
72

Fujikura Group Integrated Report 2023

Total Amount of
Remuneration

Basic Compensation

Directors not serving as Audit &Supervisory Committee members

261

175

56

Directors serving as Audit &Supervisory Committee members

30

25

5

Directors serving as Audit &Supervisory Committee members

67

67(excluding outside directors)(outside directors)

Number of Directors
Remunerated

6
directors

30

1
directors
5
directors

Notes: 1. None of the directors not serving as Audit & Supervisory Committee members are outside directors.
2. The numbers above include one director not serving as an Audit & Supervisory Committee member and retired due expiration of the term as director upon conclusion of the 174th General Meeting of
		 Shareholders held on June 29, 2022.
3. The targets and results for the main indicators of short-term performance-linked compensation in the fiscal year under review are shown below.

■ Performance-linked CoefficientType of Indicator

Target(Consolidated business plan for FY2021)

Performance(Consolidated business results for FY2021)

Consolidated Operating Margin

3.3％

5.7％

Consolidated Rate of Return on Equity (ROE)

3.9％

20.4％

4. Performance-linked compensation for directors serving as Audit & Supervisory Committee members was determined as directors serving as Audit & Supervisory Committee members, based on theperformance results during the time period in FY2020 during which they were directors not serving as Audit & Supervisory Committee members.
5. Because the remuneration of individual directors not serving as Audit & Supervisory Committee members is determined according to the procedure outlined in the Policy on Determining Remuneration of
Directors mentioned in 1, above, the Board of Directors judges the determination made for the fiscal year under review to be in line with that procedure. The Board of Directors arrives at that judgment after
receiving a report from the Remuneration Advisory Committee, which has verified the impartiality and appropriateness of the process for determining the performance of each director, the appropriateness of
the level of remuneration based on the market, the remuneration structure, and the specific amount of remuneration.
6. The Audit & Supervisory Committee receives the report from Audit & Supervisory Committee members who have attended the Remuneration Advisory Committee meeting on the remuneration of individual
directors not serving as Audit & Supervisory Committee members for the fiscal year under review. After discussion, the Audit & Supervisory Committee concluded that the Remuneration Advisory Committee
process for determining the remuneration of directors not serving as Audit & Supervisory Committee members was appropriate, and no special declarations needed to be made in the General Meeting of
Shareholders, based on the provisions in the Companies Act.
7. Matters concerning approval of director remuneration by the General Meeting of Shareholders:(1) The amount of remuneration for directors not serving as Audit & Supervisory Committee members was set at a maximum of 600 million yen a year at the 169th General Meeting of Shareholders held on
June 29, 2017. Stock-based compensation, a separate allocation from cash remuneration, was set at maximum of 120 million yen a year and the number of shares was set at a maximum of 285,000 sharesa year (outside directors are not eligible to receive shares) at the same annual General Meeting of Shareholders. There were nine directors not serving as Audit & Supervisory Committee members (of which,none were outside directors) at the conclusion of this annual General Meeting of Shareholders.
(2) The amount of remuneration for directors serving as Audit & Supervisory Committee members approved at the 174th General Meeting of Shareholders held on June 29, 2022 is a maximum of 150 million
yen a year (including compensation of outside directors of a maximum of 100 million yen a year). There were six directors serving as Audit & Supervisory Committee members (of which, five were outside
directors) as of the conclusion of this annual General Meeting of Shareholders.

Fujikura Group Integrated Report 2023

Value Creation Platform

Basic compensation

Total Amount of Compensation by Type
Performance-linked
Stock-based
Compensation
Compensation

Director Category

Special Initiatives of the Fujikura Group

When the Board of Directors determines the policy on remuneration and the amount of remuneration for directors not serving as
Audit & Supervisory Committee members, it makes such decisions after these matters have been reported on by the Remuneration
Advisory Committee, which is an advisory body to the Board of Directors (chaired by an outside director and comprised of the director
in charge of human resources and three outside directors).
The policy on determining the specifics of remuneration for individual directors is explained below.
In addition to handling a large variety of products, Fujikura operates its business globally, and director duties are also highly
complex and varied. Our basic policy is that director remuneration should be at a level appropriate for outstanding human resources
who are capable of accomplishing such duties. We have therefore classified director remuneration into the following three specificcategories based on the survey results from multiple research groups, mainly on listed companies, and have established a system of
remuneration based on objective indicators and evaluation, while also strengthening the link to performance.

(Millions of yen)

Value Creation Performance*1 Outside director *2 Number of meetings held in FY2022

Being a Leader Driving Value Creation and the Strategy

Name

Source of Value Creation

The Fujikura Group has established and is operating the following voluntary committees.

This is a system that provides compensation to directors in the form of common shares of the Company, apart from basic
compensation and short-term performance-linked compensation. This system is mainly intended to enhance the motivationof directors to contribute to an increase in corporate value of the Company by placing directors in a position to enjoy theadvantage of a rising share price as well as to bear the risk of a falling share price, thereby sharing the advantage anddisadvantage of such fluctuations with shareholders.
In principle, directors not serving as Audit & Supervisory Committee members receive the shares when they retire from theposition of director.
Variable compensation linked to performance and stock prices (short-term performance-linked compensation and stockbased compensation) is expected to be around 40% of total director remuneration, at maximum.
Remuneration of non-executive directors shall consist only of basic compensation in a fixed amount, according to the role ofeach director. No short-term performance-linked compensation or stock-based compensation will be paid.
The policy on determining remuneration of directors who are Audit & Supervisory Committee members and the amount ofthat remuneration is to set the basic compensation based on the market environment and the responsibilities they bear. The
remuneration of individual directors who are Audit & Supervisory Committee members is determined through discussion by the
directors who are Audit & Supervisory Committee members, within the scope of the maximum remuneration approved by theGeneral Meeting of Shareholders.
This policy is determined by directors who are Audit & Supervisory Committee members.

73

Value Creation Platform

Corporate Governance

Policy and Procedure for Nominating Candidates for Director

The skill matrix below maps the skills the Company considers necessary to achieve the targets in the 2025 Mid-term Management
Plan against the skills possessed by each director and corporate officer.
Executive
Non-executive Management

Planning

Personnel

Governance

GlobalFinanceandAccounting

R&D

Engineering

Legal Affairs
andComplianceBusiness
Experience*

GenderDirectors (asterisks indicate outside directors independent of Company management)
Non-executive

C

Male

Naoki Okada

Executive

I、S、C

Male

Tatsuya Banno

Executive

I、S、C

Male

Kazuhito Iijima

Executive

Koji Naruke

Non-executive

Male

I、T

Hamako Hanazaki＊ Non-executive

Male
FemaleNon-executive

Male

Yoji Yamaguchi＊

Non-executive

Male

Kozo Meguro＊

Non-executive

Male

Corporate Officers (those not serving as directors)
I、S、T

Executive

Keiko Shindo

Executive

FemaleYuki Mori

Executive

Male

Noriyuki Kawanishi

Executive

I、S

Male

Junji Fukuhara

Executive

S、T

Male

Shuichi Nasu

Executive

T、C

Male

Tetsuya Mangyoku

Executive

Male

Male

Analysis and Evaluation of the Effectiveness of the Board of Directors
To improve the effectiveness of the Board of Directors, Fujikura conducts an annual survey of all its Directors on the adequacyof the Board meetings as a conference body (e.g., time, frequency, management of meeting proceedings, minutes), adequacyof its agenda items (e.g., timing, importance, volume of information),
performance of the Board members (e.g., participation in discussions), and the structure of the executive office.
Fujikura continues making improvements on the issues raised in the survey. More specifically, Fujikura has taken the following
actions:
1) Improve various meeting materials and provide explanations to outside directors to enhance deliberations by the
Board of Directors

2) Strengthen the structure to enable prediction, analysis, and investigation of risks, and rapid response when a riskmaterializes, to avoid or mitigate losses incurred in business operations

3) Review the agenda criteria for the Board of Directors meetings

Through these actions, Fujikura has improved the Board’s structure to enable the Board to mainly discuss mediumand long-term management strategy and other important issues

Value Creation Platform* Up to 2 items considered major skills may be indicated with ○.
* Business Experience shall cover the business areas noted in the 2025 Mid-term Management Plan:“I”: Information Infrastructure
We contribute to the establishment of telecommunication infrastructure to help realize the digitalized society, through the use of optical cabling solutions basedon innovative optical technology and future high-speed wireless communications technology.
“S”: Information Storage
We contribute to the creation of high-capacity components and the establishment of data centers that can store vast amounts of data through the use of uniqueelectronic component technology and ultra-high-speed/high-density optical cabling technology.
“T”: Information Terminals
We contribute to the evolution of high-speed, high-capacity, and high-functionality information terminals through the use of high-precision electronic components
and wiring/mounting technology. Moreover, conceiving automobiles as information terminals, we contribute to the realization and evolution of CASE (Connected,
Autonomous, Shared, Electric).
“C”: Carbon neutrality
Because carbon neutrality initiatives are an opportunity for business creation as we prepare for the realization of a sustainable society, we will promote thecommercialization of our superconductor and other technologies.

In Fujikura, when the Board of Directors proposes the nomination and dismissal of directors not serving as Audit &Supervisory Committee members (excluding outside directors) to be decided by the General Meeting of Shareholders, it
submits a proposal after these matters have been deliberated by the Nomination Advisory Committee, which is an advisory
body to the Board of Directors (chaired by an outside director and consisting of the Director, President & CEO, the director
in charge of human resources (who is concurrently serving as Director, President & CEO), and three outside directors). The
Nomination Advisory Committee deliberates on the standards for director nomination and the reasons given by the Boardof Directors for nominating each candidate, including their performance. The committee confirms that the decision-making
process for the candidates proposed by the Board of Directors is fair and appropriate, and reports the results of suchdeliberations to the Board of Directors.
The Board of Directors makes a decision on the proposal to nominate directors for referral to and election by the General
Meeting of Shareholders based on this report.

Special Initiatives of the Fujikura GroupToru Hamasuna

Procedure for Selecting Candidates for Director

Value Creation Performance

Keiji Yoshikawa＊

For Fujikura to achieve sustainable growth as a manufacturing company, we need to formulate a strategy based on establishinga strong financial base and advanced technological capabilities. We must build a system that allows full and sufficient discussion
in Board of Directors meetings to enable Fujikura to make decisions on important matters that are central to the direction of andgrowth strategy for our company. Fujikura selects human resources who are capable of formulating and pursuing companywide strategy from a panoramic perspective for executive director positions. For non-executive director positions, we selecthuman resources who are capable of properly and aptly supervising or providing advice on important matters that are central to
Fujikura’s direction and growth strategy and business operation.

Being a Leader Driving Value Creation and the Strategy

Masahiko Ito

Policy on Selecting Candidates for Director

Source of Value Creation

Directors and Corporate Officers Skill Matrix

As future challenges, the Board is required to further improve its medium- and long-term strategic discussions. Meanwhile,the noticeable increases in the frequency and deliberation time of the Board meetings have highlighted the needs for preparing
briefing materials with a clearer focus on key discussion points and for earlier information provision to directors so that
discussions can take place more efficiently.

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Value Creation Platform

Interviews with Outside Directors
Business portfolio management and human resource development
aimed at rebuilding Fujikura as a technology leader

Hamako Hanazaki

Keiji Yoshikawa

Career summary
1996 Registered as an attorney-at-law
2004 Established Akao-Hanazaki Law Office (current Kita-Aoyama Law Office) (to present)
2019 Outside Director, Member of the Audit and Supervisory Committee of the Company (to present)

Career summary
1973 Joined Nippon Sheet Glass Co., Ltd.
2012 Representative Executive Officer, President and CEO of Nippon Sheet Glass Co., Ltd.
2015 Adviser of Nippon Sheet Glass Co., Ltd. (Retired)2021 Outside Director, Member of the Audit and Supervisory Committee of the Company (to present)

Attorney-at-law

Concurrent positions○Member of the Intermediary Committee of Nuclear Damage Compensation Dispute Resolution Center○Non–full-time Inspector of Secretariat of Reemployment Surveillance Commission, Cabinet Office○Director of General Incorporated Foundation Jyutaku Kinyu Fukyu Kyokai (Housing Finance Popularization Association)

In 2019, when I assumed the position of outside director, the Mid-termManagement Plan was abandoned and the 100-Day Plan was implemented
the next year. The benefits from that plan emerged in 2022. I feel thehardships endured by all members of management and employees bore fruit.
However, quality problems were confirmed at subsidiaries and while
progress is being made on quality compliance, there is still room for
improvement.
Deficiencies in the internal controls of America Fujikura Ltd. (AFL Group)

were found at the end of the fiscal year. Because the CEO of AFL was also a
director of Fujikura, this was a high-level, serious issue in terms of governanceand the Audit & Supervisory Committee regards this in an extremely serious
light. However, this incident was detected through the overseas internalreporting system. It therefore indicates that the internal reporting system
is functioning globally and I appreciate that point. I will continue to use thisopportunity to make recommendations aimed at further strengthening
governance.

subsidiary scale and operations, and building a highly effective governancesystem in a form that best suits each subsidiary. For example, the corporate
functions in the head office could be used appropriately to support a
subsidiary that has limited resources. We need to consider the optimal
system capable of ensuring effective internal controls based on the specificcharacteristics of each Group company.
Steady progress is being made on activities aimed at building thegovernance, risk, and compliance (GRC) and internal control (IC) systems.
I am looking forward to seeing the Fujikura Group overcome the issues
mentioned above and become a more resilient company.

Assessment of Mid-term Management Plan Formulation Process

In terms of issues, I feel a system is needed to ensure strong compliance.
This should be accompanied by a change in mindset and culture for all
frontline employees and management and I will continue to support themin accomplishing this. I also recognize the importance of strengthening theaudit system and would like to have the Internal Audit Department workorganically with the Audit & Supervisory Committee.

Message to Shareholders, Investors, and Fujikura Group Employees
Fujikura directors recognize the importance of Group governance. I wantto point out that directors continue to engage in robust debates aimed atstrengthening governance and that the governance of Fujikura is steadily

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4

evolving. I will continue to support them as they work to strengthen Group
governance.

In the two years since I became an outside director, I have increased thedepth of my understanding of the nature of Fujikura’s businesses.
I am still deepening my understanding of the businesses through means
such as engaging in discussions with corporate officers and visiting a
subsidiary in the U.S. last year.
Outside directors are selected for their necessary expertise in the
management of Fujikura and they each call on their special expertise inadvising management. I utilize my experience in being a manager myself
and take care to provide advice on the business strategies formulated by

the executive side from a medium and long-term perspective.
For example, I provide insights to the executive side on importantmanagement matters such as selecting key businesses and placing
importance of diversity as a global company.
Business portfolio management and human resources are the particularareas I am focusing on. Recognizing the extreme importance of these two
are themes to management, I also provided clear advice on these two areas
during formulation of the new mid-term management plan.

2

FY2023 Activity Goals
In addition to business portfolio management and human resource
development, I also think it is important for each individual employee todevelop a career plan and take on challenges of pursuing their plan. I
therefore would like to continue to keep these three points in mind as I
provide advice to the executive side.
Fujikura experienced a substantial deterioration in performance in 2019and subsequently accomplished a strong recovery in performance after
implementing the 100-Day Plan. The company implemented quite painfulreforms during this period. The frontline employees suffered considerable
damage due to these reforms and I think there is a need to look after them. It
is important for members of management to listen to the opinions of frontline
employees. Moreover, it is the frontline employees who best understandwhat is happening on the frontlines, so I am advising management todelegate authority to them and raise the level of frontline operations.
Human resource development is an extremely important management issue
at any company, and I feel there is also a great deal of room for improvement
at Fujikura. It is extremely important to increase employee motivation andI think this will lead to the development of human resources. It is also
extremely important to have a public relations strategy to convey the appealof Fujikura. The retention rate will also increase if Fujikura communicates ina way that resonates with employees, makes them feel they want to work at
Fujikura, provides workstyles that are suited to the personal career plans of
those working, and is a company where employees can grow. I think there
are many things that need to be done to accomplish that.

Assessment of Mid-term Management Plan Formulation Process
During formulation of the new mid-term management plan, I spenta considerable amount of time discussing it with corporate officers inthe basic direction alignment phase. However, I recognize that, while
formulation of the plan is also important, implementation of the plan is thephase that we should contribute to. As outside directors, we recognize
the importance of our role in improving the quality of the Check (C) part of3

the PDCA cycle. As progress is made on implementing the 2025 Mid-termManagement Plan, I want to offer advice from the perspective of a manager
on what should be done when some problem arises. The word “steering”
comes to mind, and I want to assist with course correction when a problem
is encountered and help steer the company in a better direction.

Message to Shareholders, Investors, and Fujikura Group Employees
I have experience as the president of a manufacturing company andhave also been involved in the management of a considerable number ofcompanies as a management consultant and outside director. Fujikura has
a presence in the markets it has entered that makes the brand “Fujikura,

1

4

Value Creation Platform

I give high marks to the 2025 Mid-term Management Plan for delineating
a vision that will tie into the next mid-term management plan and providing
a description that gives stakeholders a sense of management leadership
under the new structure.
Outside directors also participated in the process of considering anddebating the plan. I want to continue providing supervision and support as
the 2025 Mid-term Management Plan is implemented.

3

Reflections on FY2022 Activities

Special Initiatives of the Fujikura GroupI likewise think strengthening Group governance is an issue. Authority
was concentrated in the CEO of AFL at the time and the fact that the
CEO possessed authority over personnel matters made it difficult forother officers to voice their objections. The findings indicated that thisresulted in inadequate governance. I think it is important to create a systemand organization with functioning governance at subsidiaries to achieve
improvement.
We need to create an organization which establishes checks and balances
for the entire Group and can guarantee the independence of each officer aswell as a system in which head office audits function properly.
However, this will require taking into consideration the differences in○Outside Board Director of Kansai Paint Co., Ltd.
○Outside Director of AEON DELIGHT CO., LTD.

Value Creation Performance2

FY2023 Activity Goals

Concurrent positions

Being a Leader Driving Value Creation and the Strategy

1

Reflections on FY2022 Activities

Source of Value Creation

Strengthening internal controls and Group governancea technology leader” appropriate. It possesses top-notch technology andtechnology that people dream about, and has outstanding engineers. I willcontinue to advise Fujikura on utilizing those strengths to achieve further
growth and realize the medium and long-term visions.
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Value Creation Platform

Interviews with Outside Directors
Focusing on further reinforcing monitoring tostrengthen Group governanceYoji Yamaguchi

Kozo Meguro

Career summary
1978 Joined The Mitsui Bank, Limited (currently Sumitomo Mitsui Banking Corporation)2008 Standing Corporate Auditor of Sumitomo Mitsui Financial Group, Inc. (Retired in 2014)
2021 Outside Director, Member of the Audit and Supervisory Committee of the Company (to present)

Career summary
1984 Joined Chuo Accounting Office Audit Corporation
2006 Representative Partner of PricewaterhouseCoopers Aarata (Currently PricewaterhouseCoopers Aarata LLC)
2013 Established MEGURO & Co. (to present)
2021 Outside Director, Member of the Audit and Supervisory Committee of the Company (to present)

While there are lingering issues in Fujikura Printed Circuits Ltd. (FPCL) and
the Power Business, which were split off, I think they are off to a pretty goodstart. As an outside director from a financial institution, I take care to provide
advice that will reinforce the determination of company management fromthe perspective of having seen the management of many companies andwill continue to employ that approach in the future.

reforms that keep pace with that change, with a sense of urgency.
Actively utilizing M&A, business alliances, and other external resources isalso an effective way to accelerate the speed of commercialization. I wantto provide advice that will be the optimal solution among the many ways toachieve this.
When I look at the external environment, I sense that the tide is changing
in the Telecommunication Systems Business and other businesses.
Because Fujikura’s core business is greatly affected by infrastructure, it
is extremely important to project infrastructure investment. I would likethe company to closely follow economic trends and other aspects of thebusiness environment for that reason.

Assessment of Mid-term Management Plan Formulation Process

Fujikura’s future in terms of where the company should invest strategicallyand which businesses to focus on more.
For example, while developing fiber lasers and other new businesses into
future pillars is an important theme, I would like the company to thoroughly
discuss the means for achieving rapid commercialization and profitability,
selecting which possibilities to commercialize, and investing efficiently andstrategically.

Message to Shareholders, Investors, and Fujikura Group Employees
I feel Fujikura has overcome the crisis and has developed a stronger
foundation. CEO Okada frequently says that “differentiation is just a
difference in time.” I think these humble words are characteristic of anengineer who conveys the importance of how to speed up and continue
to create new technologies. Fujikura possesses remarkable technological

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4

strengths traditionally. It also has abundant talent to support those strengths
and, in my view, it is a company that possesses the energy to create newthings. In the future, I want to continue to actively advise Fujikura on how
to use the strengths it possesses to increase the speed and precision ofcommercialization and improve effectiveness.

2

FY2023 Activity Goals
In my view, monitoring is a basic element of Group governance used
to verify whether the activities of each business organization are alignedwith the overall objectives of the Group, the current internal and external
environments, and are being implemented in a reasonable manner. The
three pillars to ensure the comprehensiveness and reliability of Group
information are:1) Concentration of financial and other important data in the parent company
The comprehensiveness of data is not the only important factor. It isalso important to integrate the data of the parent company and Group
companies and share it.
2) Internal controls and internal audits
Internal audits do not only cover various business and accounting rules
and the existence of control procedures; they also audit whether thoserules and procedures are actually being implemented. However, internal
controls, by nature, limit management fraud.
3) Audit & Supervisory Committee and external audits
It is easy to understand that mutual checks and balances and theexistence of an organization that is independent of management

provide the foundation for 2). These first function effectively when theywork as one. I think we learned a great deal from the recent case in
the U.S. about the harm done when mutual checks and balances in a
management organization do not work as they should. I am actuallysensing strong movement toward improvement.
Even amid the recent AFL incident, progress is being made in thecompany monitoring system on pursuing structural reforms and subsequent
continuance. The continuous evaluation of business units, subsidiaries,
and investments based on the financial numbers is producing certain
results in pursuing company portfolio management, in particular. We arein the process of expanding the scope of monitoring to corporate assets
in the entire Group, including cash, effective use of resources, customers,competitors, suppliers, and others outside of the company, and information
on market trends. Further improving the sophistication to monitor SDGrelated and other non-financial information is an issue that I look forward toseeing accomplished.
This fiscal year, I want to focus on improving internal controls and further
increasing the sophistication of the monitoring system, in particular.

Assessment of Mid-term Management Plan Formulation Process
The 2025 Mid-term Management Plan is the successor to the basic
framework for the growth phase last year. However, the cornerstones of
the core Telecommunication Systems Business are the European and
U.S. markets, so the plan emphasizes the importance of integrated
management with the U.S. subsidiary and profit-oriented, efficientmanagement. To achieve that, business units are engaging in a more
active, concrete, and systematic process of internal business selection
and concentration. I also think we cannot overlook the role of the midterm management plan as a bridge to the next mid-term and long-term
management plans, which will have next-generation technology at their core.

Message to Shareholders, Investors, and Fujikura Group Employees
The development of next-generation technologies and products will be adecisive factor in determining the survival and growth of the company overthe medium to long term. The point is how to link optical, superconducting,

3
4

Value Creation Platform

I give the new mid-term management plan high marks for emphasizing
efficiency and profitability. If I were to indulge my preferences, I would
confess I wanted a little more specificity on new businesses, but I
recognize that the three years of the 2025 Mid-term Management Planare very important for Fujikura to climb to a new stage. The 2025 Midterm Management Plan provides a strategic investment budget of 30 billion
yen and I think the use of this investment budget is highly significant for3

through business efficiency. However, the discovery of improper asset
transactions and other acts by one former member of management at a
Fujikura Group U.S. subsidiary, America Fujikura Ltd. (AFL), also made it ayear of problems in Group governance that will linger in the years ahead.

Special Initiatives of the Fujikura GroupTo achieve further growth in the future, I think it is very important for
Fujikura to clearly detail the timeline for business reforms.How to approach
the process of selection and concentration of businesses is anotherimportant theme. During that process, I think Fujikura should strengthen
the creation of new business pillars in particular. The Telecommunication
Systems Business is currently the main business and Fujikura has
succeeded in growing the company by also shifting sales areas from Japanto overseas. However, each of those areas will likely reach saturation atsome point so generating the sprouts that will become the next businesspillars during this new mid-term management plan is a big challenge.
The speed of change in the external environment is accelerating
remarkably and I am conveying the importance of implementing business

FY2022 is the year in which Fujikura was able to produce results as awhole and begin to anticipate the years ahead under the basic strategy, thepillars of which are putting the Telecommunication Systems Business at thecore of the roadmap to growth and profit-oriented business management

Value Creation Performance2

FY2023 Activity Goals

1

Reflections on FY2022 Activities

Being a Leader Driving Value Creation and the Strategy

1

Reflections on FY2022 Activities
As a whole, I can say that 2022 was the year that Fujikura’s
turnaround transformed into a counteroffensive. The company achieved
considerable success following the reforms from the 100-Day Plan,
which inflicted considerable pain. I think each unit really worked hard.
The Telecommunication Systems Business in particular lifted up the entire
company along with AFL, although part of this was due to yen weakness.

Certified Public Accountant

Source of Value Creation

Anticipating rapid commercialization targeting further growth inan age of volatility, uncertainty, complexity, and ambiguity (VUCA)

nuclear fusion, and other technologies Fujikura possesses to existingproducts and increase product sophistication. I think that depends on how
employees utilize their own abilities.

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Value Creation Platform

Top Management

Source of Value Creation

Directors / Member of the Board

Director, Member of the Audit andSupervisory Committee
Newly Appointed

Chairperson of the Board of Directors
Reappointed

Director, Member of the Audit and Supervisory
Committee (Outside Director, Independent Officer)
Reappointed

Keiji Yoshikawa

Director, Member of the Audit and Supervisory
Committee (Outside Director, Independent Officer)
Reappointed

Value Creation Performance

Masahiko Ito

Hamako Hanazaki

Naoki Okada

Representative Director, President and CEO
Reappointed

Yoji Yamaguchi

Director, Member of the Audit and Supervisory
Committee (Outside Director, Independent Officer)

Kozo Meguro

Director, Member of the Audit and Supervisory
Committee (Outside Director, Independent Officer)
Reappointed

Corporate Officers Other than Members of the Board/Project Leader of Structural reform task force
Toru Hamasuna

Keiko Shindo

Yuki Mori

Noriyuki Kawanishi

Junji Fukuhara

Shuichi Nasu

Tetsuya Mangyoku

Masataka Mito

Head of the Corporate Strategy Unit
Head of the Corporate Governance Unit
General Manager, Corporate Strategy Planning Division General Manager, Legal Department

Head of the Telecommunication Systems Business
Unit

Head of the Automotive Products Business Unit
Value Creation Platform

Head of the Production Engineering Unit

Head of the Electronic Components & Connector
Business Unit

Head of the Corporate Staff Unit
General Manager,Human Resources &General Affairs

Project Leader of Structural reform task force,
special appointment by the CEO
General Manager,Power Systems Division

Global Corporate Officers
Representative Director,Director and CTO
Responsible for Research and New Business Development Unit
Responsible for Corporate Quality Management Unit
Reappointed
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Fujikura Group Integrated Report 2023

Kazuhito Iijima

Director and CFO
Responsible for Corporate Management Unit
Responsible for Real Estate Business Unit

Jason Peng

Gordon Tan

Jenny Hui

Vichan Kumthonkittikul

President of Fujikura America,Inc.

CFO of Fujikura Hong Kong Ltd.

CFO of Fujikura Asia Limited.

Special Initiatives of the Fujikura Group

Reappointed

Tatsuya Banno

Being a Leader Driving Value Creation and the Strategy

Koji Naruke

Takaaki Habu

President of Fujikura (China) Co., Ltd.

Vice President of Fujikura Electronics (Thailand) Ltd.

Newly Appointed
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Value Creation Platform

Corporate Profile

Stock Information (as of March 31, 2023)

Company name : Fujikura Ltd.

Capital : 53.1 billion yen (as of March 31, 2023)

1. Authorized shares: 1,190,000,000

Founded : February 1885

Head oﬃce : 1-5-1, Kiba, Koto-ku, Tokyo 135-8512

2. Issued Shares: 295,863,421 (including 19,457,854 treasury shares)

Established : March 1910

3. Major Shareholders

The Master Trust Bank of Japan, Ltd. (Trust Account)

53,732

19.44

Custody Bank of Japan, Ltd. (Trust account)

19,108

6.91

Taiju Life Insurance Company Limited

10,192

3.69

Sumitomo Mitsui Banking Corporation

8,456

3.06

Custody Bank of Japan, Ltd.(Sumitomo Mitsui Trust Bank,Limited
Retirement Benefit Trust Account)

6,777

2.45

Dowa Metals & Mining Co., Ltd.

6,564

2.37

The Shizuoka Bank, Ltd.

5,789

2.09

PT Fujikura Indonesia

BNYM AS AGT / CLTS NON TREATY JASDEC

5,739

2.08

Fujikura Electronics Vietnam Ltd.

THE BANK OF NEW YORK MELLON CORPORATION 140044

3,838

1.39

Fujikura Employees Shareholding Association

3,730

1.35

Thailand

FUJIKURA HIGH OPT Co., Ltd.

Fujikura Electronics (Thailand) Ltd.

Fujikura Solutions Ltd.

DDK (Thailand) Ltd.

DDK Ltd.

Fujikura Automotive (Thailand) Ltd.

Tohoku Fujikura Ltd.

Fujikura Electronic Components (Thailand) Ltd.

Nishi Nippon Electric Wire & Cable Co., Ltd.
Numazu Copper Refining and Rolling Co., Ltd.
Fujikura Shoji Co., Ltd.
Fujikura Precision Ltd.
Fujikura Automotive Asia Ltd.
Suzuki Giken Co., Ltd.
SHINSHINRO CABLE CO.,LTD.
Fujikura Logistics Co., Ltd.
Fujikura Business Support Co., Ltd.
Fuji Materials Ltd.
Yonezawa Electric Wire Co., Ltd.
FiberTech Co., Ltd.
Optoenergy, Inc.
Fujikura Printed Circuits Ltd.
Fujikura Energy Systems Ltd.

Fujikura Asia Ltd.

Fujikura Fiber Optics Vietnam Ltd.
DDK VIETNAM Ltd.
Fujikura Automotive Vietnam Ltd.
Fujikura Korea Automotive Ltd.

EMEA (Europe, Middle East, and Africa)
Fujikura Europe Ltd.
Fujikura Automotive Europe S.A.U.

External Evaluation
FTSE4Good Global Index Series
A series of stock indices developed by FTSE Russell, a company in the London Stock Exchange Group (LSEG). FTSE Russell
evaluates the sustainability of major companies in countries around the world from the three ESG (environmental, social, andgovernance) perspectives and selects companies having outstanding performance overall as components of each index.

Fujikura Automotive Europe GmbHFujikura Automotive Romania S.R.L.

FTSE Blossom Japan Sector Relative Index (from April 2022)

Fujikura Automotive MLD S.R.L.

* Selected as a Government Pension Investment Fund (GPIF) ESG Index
Configured by FTSE Russell, this index reﬂects the performance of Japanese companies that demonstrate strong relative
performance in Environmental, Social, and Governance practices in each sector.

Fujikura Automotive Czech Republic, s.r.o.

FUJIKURA COMPOSITES Inc.

Fujikura Automotive Ukraine Lviv,LLC

FUJIKURAKASEI Co., Ltd.

Fujikura Automotive Morocco Tangier, S.A.S.

FTSE Blossom Japan Index (from June 2017)

Fujikura Automotive Morocco Kenitra, S.A.S.

*Selected as a Government Pension Investment Fund (GPIF) ESG Index
Developed by FTSE Russell, this index consists of Japanese company stocks deemed outstanding from the perspectives ofEnvironment, Social, and Governance practices.

Fujikura (China) Co., Ltd.

Americas (North, Central, and South America)

Fujikura Electronics (Shanghai)Co.,Ltd.

America Fujikura Ltd.

DDK (Shanghai) Co., Ltd.

Fujikura America, Inc.

Fujikura FiberHome Opto-Electronics Material Technology Co., Ltd.

AFL Telecommunications LLC

Fujikura Zhuhai Co., Ltd.

Fujikura Automotive America LLC

Fujikura Automotive Guangzhou Co., Ltd.

Fujikura Automotive Mexico, S. de R.L. de C.V.

Fujikura Hong Kong Ltd.

Fujikura Automotive Paraguay S.A.

Fujikura Hong Kong Trading Limited
Fujikura Group Integrated Report 2023

Value Creation Platform■ Equity method affiliates

China

82

Supplemental notes: 1. The numbers presented in “Number of Shares Held” are based on the list of shareholders.
2. There were 19,458,000 treasury shares in addition to the shares listed above on the record date.

Special Initiatives of the Fujikura Group

Fujikura Dia Cable Ltd.

East, South, and Southeast Asia

Value Creation Performance

Shareholding
Composition (%)

Name of Shareholder

Being a Leader Driving Value Creation and the Strategy

Number of Shares Held(Thousands)

Main Consolidated Subsidiaries (as of March 31, 2023)
Japan

Source of Value Creation

Corporate Profile

S&P/JPX Carbon Eﬃcient Index* Selected as a Government Pension Investment Fund (GPIF) ESG Index
This index was jointly developed by S&P Dow Jones Indices and Japan Exchange Group, Inc. Companies in Japan that
disclose sufficient environmental information and companies in Japan that are highly carbon efficient are selected for this index.

Fujikura is a signatory to the UN Global Compact.
WE SUPPORT
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