HORIBA, Ltd. Report 2 Miyanohigashi, Kisshoin, Minami-ku Kyoto 601-8510 Japan Phone: +81-75-313-8121 2020-2021 E-mail: [email protected] Year ended December 31, 2020 https://www.horiba.com/en_en/ Repo r t 2020-2021 [Year ended December 31, 2020] [Year The corporate motto of HORIBA is “Joy and Fun.” We believe that if we take interest and pride in the work that occupies so much of our lives, and in the workplaces where many of us spend a large part of each day, then our satisfaction in life will increase, and we will be able to enjoy our lives even more as a result. 01 HORIBA Report 2020-2021 02 Confront headwinds with continual investment for growth by balanced management 2020 was a year when we were under and Semiconductor segments. The an extremely difficult business same is true even now when HORIBA is environment due to the global spread of greatly impacted by COVID-19. Many COVID-19. HORIBA responded to this industries are stagnant, and especially difficult situation with strong and the prospect of the automotive industry, continuous efforts and human resource which is undergoing a major capabilities, and as a result, an transformation, is also extremely operating income margin of 10.5% was uncertain. On the other hand, demand Atsushi Horiba achieved (up 0.1 point from the for semiconductors is increasing Chairman & Group CEO previous year), which is the almost worldwide, and HORIBA’s same result as 2019, despite sales, Semiconductor segment also secured operating income, ordinary income, and significant increases in sales and profits net income, for the fiscal year ended in 2020 and led the performance of the December 2020 not reaching the entire group. Targeting various previous year’s results. industries in this way is particularly effective in emergency situations. HORIBA has achieved growth through I recognize that changes in the business balanced management by flexibly environments surrounding HORIBA will utilizing management resources and accelerate and be more intense than continually investing in each segment. ever before, and thus HORIBA will By owning five business segments in continue to promote balanced different markets, the group as a whole management as a way of management was able to secure a surplus even in the that can flexibly respond to changes, 2008 global financial crisis, because even in the face of headwinds. Scientific and Medical-Diagnostic covered the decline in the Automotive Textbooks do not teach everything. Read the current trend with 2020 was the year when the world was forced to make big changes and, at the same time, we reconsidered what HORIBA’s strengths are. technology and intuition. Based on the world’s top-level basic technology and the ideas and skills of each person who can utilize that technology, HORIBA has begun to create new value in various fields more than ever. We will open up these turbulent times with a sense of crisis and the ability to read changes in the current situation. 03 HORIBA Report 2020-2021 04 Our Strengths are from HORIBA Today, various social issues are but also proactively propose solutions, emerging, and the world is changing including the skills possessed by drastically, as shown in digital engineers, as a strength. HORIBA transformation and the mobility Techno Service Co., Ltd., which revolution. I recognize these changes in recently established a new head office current trends as opportunities. building, is participating in the analysis Energy-related issues are an example; project of samples brought back from HORIBA can provide various solutions, the asteroid Ryugu by the asteroid which are brought from all the explorer Hayabusa2, but this analysis is technologies we possess, in all by no means easy. In order to identify processes of “generation,” “storage” substances without damaging the and “utilization.” In the energy market, it sample, high-precision measurement is necessary to think about business equipment and highly skilled engineers, development from a new perspective, who can analyze it, are mandatory. I feel beyond the boundaries of segments, honored that HORIBA was invited to and it may take time to reach a certain this project not only because we business scale. However, HORIBA’s possess the technology to manufacture current main product, the emission the world’s top level measurement measurement systems, was originally equipment, but also because the developed as a device for analyzing abilities of HORIBARNs* are highly human exhalation, and it was a product regarded. that found new value by changing the viewpoint. By refining our strengths in this way, I am convinced that the markets in which Providing products using practical HORIBA can contribute will expand technology born from solid basic infinitely. research is still HORIBA’s strength. Furthermore, we will not only provide * HORIBARIANs: All HORIBA workers are regarded as family measurement technologies as devices, and called HORIBARIANs as a nickname. 05 HORIBA Report 2020-2021 06 Flexibility, not simply following textbooks, is necessary to predict changes One of my concerns is the spread of the HORIBA expects diverse human resources to perception that “acting according to shine in their own places, like stained glass textbooks is excellent” in the Japanese that shines in a variety of ways. HORIBA’s education field. In such education, it is significant power is from human resources difficult for students to acquire the ability to who can play their roles by exerting their think and act creatively based on the abilities, such as people who achieve results knowledge learned. Without the power to as a team through management skill and think and act on your own, you can only who pursue new technologies thoroughly. change the model of existing products, and it The reason why we were able to continue our may be difficult to create unique products business, despite the severe impact of the from scratch. I think that you can accumulate spread of COVID-19, is that HORIBARIANs the power to predict changes and refine your have been showing leadership in their own sense of business by building a database of responsibility and always aiming for the experiences inside yourself from various highest level. Many of them learned that new experiences other than textbooks. approaches and challenges, which are not an extension of the past, are necessary when in From management’s point of view, I thought a crisis, and put that into practice. For the tide of the business environment had example, the semiconductor business, which changed even before the spread of is currently the sole driver of business COVID-19, and thus I was not surprised so performance, had previously experienced a much by the change in the current situation. difficult situation in which the semiconductor This is because management cannot be market itself was temporarily sluggish, and Go back to the basics because of this turbulent time controlled according to logic and textbooks. operations were drastically reduced. HORIBA The role of management is to look ahead, set continued to invest in the semiconductor While I recognize the advantages of the change to an era where 1 + 1 = 2 is not the the direction of business and the company, business despite such a severe business maneuverability and efficiency of only case, but also the case is to spread to and lead the organization by utilizing the situation. We believe that the unconquerable communicating online, I am very interested 3 and 4. HORIBA has the foundation to sense and wisdom gained from experiences spirit of HORIBARIANs, who endure in the fact that voices from group companies respond to such changes and already and learning. difficulties, and the trust in the company, all over the world have been raised stating implements various activities. In this which continues to invest even in difficult In 2020, physical movement and interactions that face-to-face communication is also turbulent time, we will return to the spirit of circumstances, have led to the remarkable with people were severely restricted, but we important. Casual conversations and the corporate motto “Joy and Fun” and progress of the semiconductor business were able to manage group companies exchanges of ideas in post-meeting create corporate value by leveraging the today. globally by utilizing online communication in-person gatherings, which were held every strengths of HORIBA that we have built up tools introduced in 2019. In Japan, the Good A sense of crisis is what each employee feels time before the online meetings were so far. I ask for your continued Place work system, which was introduced in seriously when work cannot be done as introduced, played an important role in understanding and support in 2021. 2019 by developing the traditional usual. HORIBARIANs, who can always ask building relationships of trust. It is a great telecommuting system, also supported us to themselves to take new approaches and asset for HORIBA that many HORIBARIANs work flexibly and efficiently in a remote challenges with a sense of crisis, propose April 2021 recognize that these occasions are important. environment. As the top of management, I new approaches, and boldly take on By combining the values of both online and believe that continual investment in company challenges, are the driving force to grow Atsushi Horiba face-to-face, I believe that society will growth with an eye on the future is important, HORIBA significantly. Chairman & Group CEO both in normal times and in difficult business environments. 07 HORIBA Report 2020-2021 08 • Regarding our use of the term “owners” (shareholders) 01 Corporate motto “Joy and Fun” HORIBA fully recognizes the importance of its shareholders and frequently refers to them as “owners.” 03 CEO message • Regarding our use of HORIBA and HORIBA, Ltd.