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MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2019 01 To Our Shareholders and Investors Corporate Mission The Mitsubishi Electric Group will continually improve its technologies and services by applying creativity to all aspects of its business. By doing so, we enhance the quality of life in our society. To this end, all members of the Group will pursue the following Seven Guiding Principles. Seven Guiding Principles Trust, Quality, Technology, Citizenship, Ethics and Compliance, Environment, Growth During the fiscal year ended March 31, 2019 (hereinafter fiscal 2019), the econ- resource and energy issues. In this way, we will further promote initiatives to cre- omy saw a buoyant expansion in the U.S. and a slight slowdown in the Chinese ate value, such as simultaneous achievement of "sustainability," and "safety, economy, while there were gradual trends of recovery in Japan and Europe security, and comfort" in the four fields of Life, Industry, Infrastructure and despite a recent slowdown in some indicators such as export and production. In Mobility. addition, the yen, compared to the previous fiscal year, was substantially In an effort to promote value creation, in addition to enhancing business foun- unchanged against the U.S. dollar, and remained strong against the euro in and dations (connection with customers, technologies, personnel, products, corporate after August. culture,etc.) and evolving Technology Synergies and Business Synergies through Under these circumstances, the Mitsubishi Electric Group has been working strengthening all forms of collaboration while maintaining Balanced Corporate even harder than before to promote growth strategies rooted in its advantages, Management based on three perspectives: growth, profitability and efficiency, and while continuously implementing initiatives to strengthen its competitiveness and soundness, the Mitsubishi Electric Group will transform our business models. business structure. As we resolutely advance forward to achieve our goals, we ask for your As a result, in fiscal 2019, the Mitsubishi Electric Group recorded revenue of continued support. ¥4,519.9 billion, up 2% from the previous fiscal year, operating profit of ¥290.4 billion, down 11%. In accordance with its management targets, the Group will remain committed to maintaining a return on equity (ROE) of above 10% and keeping the ratio of interest-bearing debt to total assets below 15% while striving to achieve its growth targets for fiscal 2021, namely, consolidated revenue of ¥5 trillion or more and an operating income ratio of 8% or more. Moving forward toward securing sustained business expansion thereafter, the Mitsubishi Electric Group will also July 2019 keep a focus on committing to a variety of management initiatives. Based on our Corporate Mission and Seven Guiding Principles, we of the Mitsubishi Electric Group position Corporate Social Responsibility (CSR) initiatives as our main pillar of corporate management. Accordingly, the entire Group is committed to providing solutions that combine products, systems, and services to address the challenges that society faces, such as environmental issues and President & CEO Takeshi Sugiyama 02 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2019 Financial Highlights Performance for the Year Ended March 31, 2019 Yen U.S. dollars (millions) (thousands) Years ended March 31 2018 2019 2019 Revenue ¥4,444,424 ¥4,519,921 $40,720,009 Operating profit 327,444 290,477 2,616,910 Net profit attributable to Mitsubishi Electric Corp. stockholders 255,755 226,648 2,041,874 Total assets 4,305,580 4,356,211 39,245,144 Bonds and borrowings 311,950 298,438 2,688,631 Mitsubishi Electric Corp. stockholders' equity 2,294,174 2,399,946 21,621,135 Capital expenditure 181,513 198,442 1,787,766 (Based on the recognized value of property, plant and equipment) R&D expenditures 210,308 212,794 1,917,063 Yen U.S. dollars Per Share Amounts Earnings per share attributable to Mitsubishi Electric Corp. stockholders Basic ¥119.19 ¥105.65 $0.952 Diluted 119.19 105.65 0.952 Cash dividends declared 40 40 0.360 % Statistical Information Operating profit ratio 7.4% 6.4% — Return on equity (ROE) 11.7 9.7 — Bonds and borrowings to total assets 7.2 6.9 — 1 The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) from the year ended March 31, 2019 and also for the fiscal year ended March 31, 2018 as comparative information. 2 R&D expenditures include elements spent on quality improvements which constitute manufacturing costs. 3 Diluted earnings per share attributable to Mitsubishi Electric Corp. stockholders is equal to Basic earnings per share attributable to Mitsubishi Electric Corp. stockholders, as no dilutive securities existed. 4 U.S. dollar amounts are translated from yen at the rate of ¥111= U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2019. Revenue Breakdown by Business Segment Others 13.2% Energy and Electric Systems 25.2% Revenue 676,736 million Revenue 1,296,745 million Home Appliances 20.9% Revenue 1,074,044 million Industrial Automation Systems 28.5% Revenue 1,467,633 million Information and Electronic Devices 3.9% Communication Systems 8.3% Revenue 199,908 million Revenue 426,269 million Note: Inter-segment sales are included in the amounts of the diagram above. MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2019 03 Non-financial Highlights Results of main initiatives in fiscal 2019 Contribution to Reducing CO2 from Reducing CO2 from Production Product Usage We will push forward with reductions in CO2 from production(CO2 originating from energy), We will help reduce CO2 emissions through reducing the electricity consumed by custom- as well as reducing non-CO2greenhouse gases (SF6, HFC, and PFC). ers during product use. Total emission of greenhouse gases from production (CO2 equiv- Reducing CO2 emissions from product usage FY2021 target alent) 1.47 million tons or less FY2021 target by an average of 35% compared to use in fiscal 2001 Results: FY2019 1.30 million tons Results: FY2019 36% reduction Effective Utilization of Resources Reducing Resource Inputs We will promote thorough waste separation, recycling, and greater efficiency of waste col- We will reduce the use of resources (resource inputs) as a measure towards creating a lection and transport in order to reduce final waste disposal. recycling-based society. Final disposal rate in Japan Less than 0.1% Reduce resource inputs by an average of FY2021 target FY2021 target Final disposal rate overseas Less than 0.5% 40% compared to fiscal 2001 Results: FY2019 Less than 0.1% for Mitsubishi Electric and Results: FY2019 domestic affiliates0.52 % for overseas affiliates 45% reduction Product development that places Nature Conservation Activities top priority on customer safety We will continue to hold Mitsubishi Electric Outdoor Classrooms and proceed We will ensure safety through risk assessment and implement product develop- with the “Satoyama” Woodland Preservation Project. ment that places top priority on customer safety. The cumulative number of participants in Mitsubishi Electric Outdoor FY2021 target Classrooms and the “Satoyama” Woodland Preservation Project. Risk assessments of target home electronic products Results: FY2019 Results: FY2019 43,000 participants Maintain 100 % implementation Promote human rights initiatives that are Compliance training on a continuous basis based on international norms We will identify and evaluate impacts on human rights across the Group. We provide compliance education that utilizes diverse methods, on a continuous basis. Human rights impact assessment Mitsubishi Electric’s e-learning programs on compliance Results: FY2019 Achieve a100% rate Results: FY2019 of implementation by target companies Maintained a 100 % attendance rate For results of fiscal 2019, please refer to the following: web https://www.MitsubishiElectric.com/en/sustainability/csr/management/management/materiality_progress/index.html 04 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2019 Initiatives / External Evaluation Main initiatives and external evaluations related to ESG are as follows: Initiatives Participation in the UN Global Compact In May 2018, the Mitsubishi Electric Group signed the UN Global Compact (UNGC) aimed at promoting CSR activities based on international norms. By signing the UNGC, the Group pledges to make continued efforts toward sustainable growth by complying with the ten principles in the four areas of human rights, labor, environment and anti-corruption to the extent that it can influence society. Efforts will be made to enhance the Group’s activities by maintaining close communication with UN organizations and relevant initiatives. Expression of approval of the TCFD recommendations The Mitsubishi Electric Group has expressed approval of the recommendations by TCFD (Task Force on Climate- related Financial Disclosures). External Evaluation CDP Mitsubishi Electric has received the highest rating from CDP. - “A List” company for “Climate Change” and "Water Security“ for three consecutive years - “Supplier Engagement Leader” FTSE Index Series FTSE Russell (UK) is a company that engages in the development of global investment indexes and the provision of financial data to investors. Mitsubishi Electric was selected as a constituent of the company’s FTSE4Good Index Series. Additionally, Mitsubishi Electric was selected as a constituent of the FTSE Blossom Japan Index. The index has also been adopted as an investment

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