13

Message from the President

Maxell, Ltd. Integrated Report 2022
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Introduction
Maxell Group’s Basic Management Policy
Table of Contents and Editorial Policy

Driving business reform and organizational reinforcement,
aiming for steady growth through a combination ofexisting business and new product development

History of Innovation
At a Glance
Sources of Value Creation
Value Creation Process
Key Maxell products that provide value to society

1 The Path to Realizing Our Vision
Materialities / Action Plans / KPIs
Message from the President
Message from the Financial Director

Review of Second Year Under MEX23
Medium-Term Management Plan
Sales decreased in fiscal 2022, the second year
covered by the medium-term management plan
Maximum Excellence 2023 (“MEX23”), despite
increased sales of products for the automotive
and semiconductor markets. The decrease wasdue to the downsizing of the projector business,in addition to decreased sales of rechargeable
batteries and BtoC products. MEX23 wasformulated during the COVID-19 pandemic, andambitious targets were set in response to certain
favorable circumstances in place at that time.
Namely, growing sales of consumer lithium-ion
batteries for game devices, and strong sales ofozone anti-bacterial deodorizers. Subsequentchanges in the business environment meant thatsales fell short of targets.
Furthermore, operating profit decreased due
to soaring raw materials costs and the recordingof a one-time cost associated with domestic BtoC
sales business reform. This reform included
reforms of the projector business conducted
through fiscal 2021, which significantly reduced
fixed costs. In February 2023, with the aim ofpursuing further fundamental reform, we signed
a sole distributor agreement with DENKYOSHA
CO., LTD., and transferred our domestic BtoC
product planning, development, and sales
functions to DENKYOSHA. Maxell will in future befocusing on achieving growth primarily throughthe BtoB business.
We expect that sales and profits for fiscal
2023, the final year covered by MEX23, will exceed
results for fiscal 2022. This increase will beachieved by expanding our growth businesses tocover the reduction in revenue from the domestic
BtoC sales business, reflecting soaring raw
materials cost increases in our product pricing
and the positive impacts of business reforms.
Despite this, however, we expect operating profit
for fiscal 2023 to fall significantly below ourinitial MEX23 target. We will continue to focus on
initiatives such as bringing forward the launch ofall-solid-state battery mass production, with aneye to the period covered by our next mediumterm management plan.

FY2022
Results

Keiji Nakamura
President andRepresentative Director

Financial Highlights
Non-Financial Highlights

2 Value Creation Report	Special Feature: All-solid-state batteries and the impact
they will have on society in the 3 focus areas	Value Creation Process by Business Segment, andStrategy Progress Report		 The Current Status of the Business Portfolio Shift, and the Future
		 Energy Segment
		 Functional Materials Segment
		 Optics & Systems Segment
		 Life Solution Segment
Toward the Creation of New Businesses
Consolidation and Enhancement of Sales ForceIntellectual Property that Supports New and Existing Businesses

3 Management Foundation Enhancement
Creating Human Resources and Organizations that Generate ValueFY2023Creating Economic Value through Environmental Activities

MEX23
initial target

Forecasts

Net sales(billion yen)

132.8

125.0

133.0

Operating profit(billion yen)

5.6

12.5

7.5

Operating profit
ratio (%)

4.2

10.0

5.6

ROIC (%)

3.5

Over 7.0

4.8

ROE (%)

6.3

10.0

6.2

USD to JPY
exchange rate (¥)

135

105

130

Reporting Based on TCFD Recommendations
Strengthening Group GovernanceCorporate Governance
Board of Directors
Outside Director Roundtable Discussion

Data Section
Consolidated Financial Information
Maxell Group Network
Corporate Data / Stock Information / External Recognition

14

Message from the President

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Towards the creation of Maximum Excellence

Maximizing profits through efficient allocation of management resources and business replacement
FY2021

FY2022

FY2023

Downsizing of projector business

Domestic BtoC Business Alliance

Brought mass production of
all-solid-state batteries forward⿟ Termination of new projector productdevelopment and termination of salesin Europe and the Americas

⿟Transferred domestic consumer productplanning, development, and sales
functions to DENKYOSHA CO., LTD.

⿟ Transfer of domestic projector sales
rights to IRIS OHYAMA Inc.

maxellIZUMI

Optical discs,
anti-bacterial
deodorizers

Shavers, hairdryers

Product
planning anddevelopment

DENKYOSHA

Maxell Izumi

Sales

DENKYOSHA

DENKYOSHA

Brands/
Products

Maxell, Ltd. Integrated Report 2022

⿟ June 2023: Commenced shipment of
mass-produced batteries⿟ Progressing towards net sales of 30
billion yen in FY2030

Coin type

Ceramic-packaged
type

Bipolar
type

Continuing with portfolio management through comprehensive business and product monitoring

Road map
1st phase: FY2021-FY2023

2nd phase: until FY2026

3rd phase: until FY2030

MEX23

New business launch period

The feature to be realized in 2030

Progress with initiatives in our threefocus areas
We are concentrating business resources on the
3 focus areas of Healthcare, 5G/IoT, and Mobility.
Although we have encountered difficulties withsome of our initiatives in these areas, overall
progress is in line with our envisioned scenario.
In the area of Healthcare, we areconcentrating on medical devices such as hearing
aids and blood glucose monitors, and working
to expand sales by offering high-performancebatteries for use in medical and measurement
equipment. We are also developing all-solidstate batteries, which are entirely different
from traditional batteries and provide entirely
different levels of performance, and are looking
to leverage this to open up markets for types ofequipment that up till now haven’t been poweredby batteries.
In the 5G/IoT area, demand forsemiconductors has been trending downward
since the second half of 2022, and our products

have also been impacted by this. Our underlying
competitiveness in this area is strong, however,
and we expect to achieve steady growth in thelonger term.
In the Mobility area, sales are growing forbatteries used in tire puncture detection sensors.
Demand is also growing for plastic lenses used inautonomous driving system sensors, and we feelthere is further potential in this field.
Within these 3 focus areas, we have identified
13 growth businesses that will drive the future
growth of Maxell, and are working to strengthen
them. We set, as a materiality KPI, “Overall sales
growth ratio of 13 growth businesses in 3 focus
areas: 10% (FY2023 vs FY2021),” and surpassed
that target in fiscal 2022 (sales growth ratio:13%). The net sales weighting of the 3 focus
areas is also increasing. In addition, from fiscal
2022, the New Business Producing Division
has been allocating considerable resources toall-solid-state batteries, aerial image displays(AFIDs), and our “RIC-FOAM” low-pressure foammolding technology.

Introduction
Maxell Group’s Basic Management Policy
Table of Contents and Editorial Policy
History of Innovation
At a Glance
Sources of Value Creation
Value Creation Process
Key Maxell products that provide value to society

1 The Path to Realizing Our Vision
Materialities / Action Plans / KPIs
Message from the President
Message from the Financial Director
Financial Highlights
Non-Financial Highlights

2 Value Creation Report	Special Feature: All-solid-state batteries and the impact
they will have on society in the 3 focus areas	Value Creation Process by Business Segment, andStrategy Progress Report		 The Current Status of the Business Portfolio Shift, and the Future
		 Energy Segment
		 Functional Materials Segment
		 Optics & Systems Segment➡ Increase the value of growth businesses⿟ Expand growth businesses➡ Resilient management foundation

⿟ Establish structure for profit growth➡ Contribution of new businesses to company
performance⿟ Prepare new businesses for the 2 phase
nd

10 %

Materiality

Solving social issues through our
growth businesses

KPI

Overall sales growth ratio of 13 growthbusinesses in 3 focus areas: 10%(FY2023 vs FY2021)

Operating profit ratio

5.6 %(forecast)Commit to value
Management focused on corporate
value and profit growth

Segment growth strategy

Promote portfolio management

Strengthen sales and profitability of

Cross-divisional operation of

growth businesses
Concentrate on 3 focus areas

FY2023 forecast

Management foundation enhancement strategy

Accelerate business replacement

development and sales
Enhance financial discipline

40%

30%
60%

13 growth businesses
Healthcare• High reliability coin-type lithium batteries• Coin-type lithium-ion rechargeable batteries• Tape for construction• Healthcare equipment• Beauty care equipment

5G/IoT■ Proportion of the 3 focus areas■ Proportion of other areas

FY2021 results

Toward the Creation of New Businesses
Consolidation and Enhancement of Sales ForceIntellectual Property that Supports New and Existing Businesses

3 Management Foundation Enhancement
Creating Human Resources and Organizations that Generate Value
Creating Economic Value through Environmental Activities
Reporting Based on TCFD Recommendations

Net sales proportion of the 3 focus areas

MEX23 policy

		 Life Solution Segment

Expanding the 3 focus areas through concentration of resources into growth businesses• Cylindrical-type lithium batteries• Semiconductor process tape
• Tape for industrial processes• Semiconductor-related embedded systems• Hydraulic tools

Mobility70%• Heat-resistant coin-type lithium batteries• LED headlamp lenses• In-car camera lens units

Strengthening Group GovernanceCorporate Governance
Board of Directors
Outside Director Roundtable Discussion

Data Section
Consolidated Financial Information
Maxell Group Network
Corporate Data / Stock Information / External Recognition

15

Message from the President
Enhance organization to expand
overseas sales
Proportion of overseas net sales accounted for
42% of Maxell’s total in fiscal 2022. Consideringthat overseas net sales accounted for around
70% of the total in the era when battery andcassette tape sales were at their peak, there
is significant room to further expand overseas
sales. In light of this, we will be focusing on
expanding our overseas BtoB sales.
Therefore, firstly we believe we needto change our global sales framework andapproach. Currently, engineers in Japan develop
products and visit clients for discussions. Thereis a limit to our capacity for sending engineers
overseas from Japan to provide on-site support,
and this hinders the smooth expansion of ouroverseas operations. To address this, we plan
to unify overseas sales forces across segments,
enabling overseas sales companies to directlybuild relationships with customers and expand
sales of new products, and will establish a fourpole sales structure, covering Japan, Asia, theU.S., and Europe.
We will also focus our sales efforts on

Maxell, Ltd. Integrated Report 2022
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niche product areas to better differentiate
ourselves from competitors. This will meanthat local sales staff with in-depth technicalknowledge will be crucial, and we will therefore
be focusing on training sales engineers andoverseas marketing staff as well as significantly
increasing their number.

Launch of all-solid-state battery mass
production, proposing expanded range ofapplications emphasizing convenience of
maintenance-free products
We are working to further develop all-solid-statebatteries as a new core business for Maxell.
In June 2023, we became the first company inthe world to ship mass-produced small-size
sulfide-based all-solid-state batteries. To mitigate
business risk we started with an investmentof around 2 billion yen and are focusing ourefforts on a limited number of industries such asindustrial robots.
The long lifespan of all-solid-state batteries
removes the need for frequent replacement work,and can therefore help to reduce equipment

management costs. We will continue ourdevelopment efforts with the aim of facilitating
perpetual power sources with an emphasis on
promoting the convenience of maintenancefree products, and will open up a wide rangeof fields in which such products will create
significant value. In fiscal 2023, as capital
investment depreciation begins, we expectthat it will be difficult to generate profit, but weare targeting improvement from fiscal 2024
onwards. We are planning significant investment
to coincide with the completion of development
work on high-capacity products, and expect toboost profit from fiscal 2025. We are targeting
net sales of 30 billion yen in fiscal 2030, but arelooking to reach that target ahead of schedule.
Furthermore, we are advancing research
into energy harvesting technologies that make itpossible to generate electricity from small energy
sources in the surrounding environment. Thisinitiative has the potential to lead to extremely
significant innovations. Being able to generate
electricity from a variety of energy sources, suchas temperature differentials, vibrations, rotational
movement, or slight air movements, will truly
bring us closer to being able to recharge devices

perpetually, thereby providing the freedom
to install various types of equipment without
constraints.
For instance, automobile tire puncture
detection sensors currently utilize primary
batteries and are required to transmit data about
once every minute. With automated driving
systems, however, they need to continuously
gather and transmit wide-ranging data about
contact between tires and the road surface,vehicle posture control, and so on. Since primary
batteries can’t provide sufficient capacity for this,
there is a need to switch to using rechargeable
batteries, which could, for example, be recharged
using the energy from the rotation of the wheelsor other energy sources. We intend to step up thedevelopment of new approaches like this.
No company has yet been successful inthe energy harvesting field, and we aim toforge ahead through collaboration with othercompanies and universities, paving the way
towards perpetual power sources and driving
significant innovations.

Introduction
Maxell Group’s Basic Management Policy
Table of Contents and Editorial Policy
History of Innovation
At a Glance
Sources of Value Creation
Value Creation Process
Key Maxell products that provide value to society

1 The Path to Realizing Our Vision
Materialities / Action Plans / KPIs
Message from the President
Message from the Financial Director
Financial Highlights
Non-Financial Highlights

2 Value Creation Report	Special Feature: All-solid-state batteries and the impact
they will have on society in the 3 focus areas	Value Creation Process by Business Segment, andStrategy Progress Report		 The Current Status of the Business Portfolio Shift, and the Future
		 Energy Segment
		 Functional Materials Segment
		 Optics & Systems Segment
		 Life Solution Segment

Phased capital investment targeting all-solid-state batteries net sales of 30 billion yen by FY2030

Toward the Creation of New Businesses
Consolidation and Enhancement of Sales Force⿟ April 2023: All-solid-state battery mass production facilities completedIntellectual Property that Supports New and Existing Businesses⿟ June 2023: Shipping of mass-produced batteries (Sequentially starting customer evaluations for mass-produced products)

⿟ FY2024 onward: Sequential investment and significant capital expenditures in line with growth of orders received and completionof high-capacity product development
Medicalfield

New market creation
Coin type1st Step

Ceramic-packaged type

Sequential investment: Boost capacity as number oforders received increases

Corporate Governance
Board of Directors

Wearables

2022

Outside Director Roundtable Discussion

2026

2030 (FY)
Large capacity
High output

3 Steprd

Significant capital expenditures: Additional capital
investment in line with increases in battery capacity

Creating Economic Value through Environmental Activities
Strengthening Group Governance

ADAS*

FA / Infrastructure

2nd Step

Creating Human Resources and Organizations that Generate Value
Reporting Based on TCFD Recommendations

Bipolar type

Upfront investment: Mass production systemconstruction brought forward one year

3 Management Foundation Enhancement

Long life
High heat resistance*Advanced driver assistance systems

Data Section
Consolidated Financial Information
Maxell Group Network
Corporate Data / Stock Information / External Recognition

16

Message from the President

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Focusing on company-wide optimizationof organizational functions and personnel
enhancementcompanies. Additionally, starting from June 2022,
we held a series of 11 sustainability workshops
over the course of about a year.

In fiscal 2021, we centralized the organizational
structure—which had been separated vertically bybusiness unit—under the corporate headquarters.
This consolidation is aimed at speeding up
information-sharing and communication, andenables all business divisions to advancecompany-wide initiatives. Furthermore, startingfrom fiscal 2022, the Human Resources &General Affairs Department and Finance &Accounting Department, and from fiscal 2023,
the Procurement & SCM Division, have also been
consolidated under the corporate headquarters.
Under this new structure, we will work to
generate synergies between businesses, focusing
on global expansion in growth areas.
With the aim of enhancing our human capital,
we are working to increase the mobility of
personnel across the entire company, and will
cultivate personnel with wide-ranging experienceand knowledge. As part of this, from fiscal 2021
onwards we have been reviewing personnel role
definitions by hierarchical level, and performing
proactive evaluation that aligns with the required
personnel criteria.
To ensure the penetration of the MVVSS
philosophy and thorough addressing ofmaterialities, since fiscal 2020 I have been
engaging in direct dialogue with employees
through town hall-style meetings at various
major domestic bases, including those of group

Steady advancement of sustainability
initiatives

Town hall-style meeting

Maxell, Ltd. Integrated Report 2022

In fiscal 2021, Maxell identified sevenmaterialities to address on the way to bolstering
sustainability management. In fiscal 2022,
KPIs were established for each of the sevenmaterialities. Progress towards these KPIs is
being monitored by the responsible officers.
One of the challenges in addressing thematerialities of “Strengthening Group Governance”
relates to IT systems. While the entire Group isadvancing digitalization, the IT Department has
formulated a longer-term roadmap for using
digitalization to create new value, and will be
actively advancing this initiative.
In terms of environmental initiatives, weestablished an Environmental Vision in July
2023 (refer to page 45). Some of our targets
relating to our efforts to achieving a carbonfree society include reducing CO2 emissions
by 50% or more compared to fiscal 2013 levels
by fiscal 2030, and achieving carbon neutrality
by fiscal 2050. To contribute to achieving a
recycling-oriented society we also aim to
reduce waste generation per production unit by
19% compared to fiscal 2021 by fiscal 2030, andto commence chemical/material recycling ofcomposite plastic waste.
Furthermore, in April 2023, the New Business
Producing Division launched development
work on an electrolytic reactor in collaboration
with Osaka University to perform electrolytic
reduction of CO2 as part of the New Energy andIndustrial Technology Development Organization(NEDO) project “Integrated Electrochemical
Systems for Scalable CO2 Conversion to
Chemical Feedstocks.” Looking ahead, we willcontinue to work on environmental issues as a
key area of focus.

To our stakeholders
For Maxell to continue growing and developing
into the future, it is important for us to balanceboth economic value and social value. This means
creating social value, including technologicaldevelopment, while simultaneously enhancing
economic value. Without striking a balance
between the two, our products will not beembraced by the public.
Our strategies of enhancing the sales
and earning power of 13 growth businesses,
and concentrating resources into our 3 focus
areas, are aimed at simultaneously increasing
economic value and social value. Maxell has
expanded the range of applications of its existingproducts through performance enhancement anddiversification, and this approach has significant
further growth potential. Moreover, new products
require multiple steps from development andcommercialization to market launch before goingon to become core businesses, typically taking
three, five, or even 10 years. We will concentrateon areas with promising growth potential while
exploring other development avenues. We will
steadily implement new initiatives focused on
existing businesses and new products, advancing
our growth scenario.
Maxell has immense potential. With strong
unity between management and employees, wewill continue addressing challenges, generating
innovation through our strength, Analog CoreTechnologies, and creating value that has thepower to transform society.

Introduction
Maxell Group’s Basic Management Policy
Table of Contents and Editorial Policy
History of Innovation
At a Glance
Sources of Value Creation
Value Creation Process
Key Maxell products that provide value to society

1 The Path to Realizing Our Vision
Materialities / Action Plans / KPIs
Message from the President
Message from the Financial Director
Financial Highlights
Non-Financial Highlights

2 Value Creation Report

Keiji Nakamura
President andRepresentative Director
September 2023

	Special Feature: All-solid-state batteries and the impact
they will have on society in the 3 focus areas	Value Creation Process by Business Segment, andStrategy Progress Report		 The Current Status of the Business Portfolio Shift, and the Future
		 Energy Segment
		 Functional Materials Segment
		 Optics & Systems Segment
		 Life Solution Segment
Toward the Creation of New Businesses
Consolidation and Enhancement of Sales ForceIntellectual Property that Supports New and Existing Businesses

3 Management Foundation Enhancement
Creating Human Resources and Organizations that Generate Value
Creating Economic Value through Environmental Activities
Reporting Based on TCFD Recommendations
Strengthening Group GovernanceCorporate Governance
Board of Directors
Outside Director Roundtable Discussion

Data Section
Consolidated Financial Information
Maxell Group Network
Corporate Data / Stock Information / External Recognition