2021 2021 ANNUAL REPORT For the year ended March 31, 2021 目次Contents 02 株主・投資家の皆さまへTo Our Shareholders and Investors 21 研究開発Research and Development 03 財Financial 務 ハ イライト Highlights 22 知的財産Intellectual Property 非Non-nancial 財 務 ハ イライト Highlights 三Sustainability 菱 電 機 グ ル at ープ の 04 23 サステナビリティMitsubishi Electric Group イニシアティブと外部Initiatives / External Evaluation 評 価 05 2423 サステナビリティマネジメントSustainability Management 06 価値創造活動Initiatives to Create Value 26 GG: ガバナンスGovernance 33 EE: 環境Environment 経営戦略Corporate Strategy 08 37 SS: 社会Social At a Glance At a Glance ̶ 2020 年度のトピックス 45 ESG Information Disclosure List 14 Fiscal 2021 Topics 45 ESG 情報開示一覧 16 セグメント別営Review of Operations 業 概 況 Directors and Executive Ofcers 46 役員 16 重電システムEnergy and Electric Systems Organization 47 組織図 17 産Industrial 業 メカトロニクス Automation Systems 47 Major Subsidiaries and Afliates Information and 18 情 報 通信システム 48 セグメント別 主 要 関 係 会 社 Communication Systems 48 19 電子デバイス Financial Section 19 Electronic Devices 49 財務セクション 20 家庭電器 49 20 Home Appliances Corporate Data / 67 企 業データ／株 式 情 報 XX Shareholder Information OurWe, Groupthe Mitsubishi will strive Electric to further Group will increasecontribute its to corporate realizing valuesustainability through through bothall of wheelsour activities, of economic and further and social enhance value bycorporate contributing value tothat the emphasizes achievement the of creation sustainabilityof both economic through and socialall of our value. activities On February 1, 2021, thewe celebratedMitsubishi theElectric 100th Group anniversary celebrated of ourthe founding.100th anniversary We have includedof its establishment. our commitment We have to addedrealize tosustainability the management through policy all of of our maintaining activities, Balancedin our corporate Corporate management Management, policy which that consistsbalances of growth “Growth,” and “Protabilityprotability/efciency, & Efciency,” and andsoundness, “Soundness” we have and started have started taking onsteps the toward path to the the next next 100 100 years. years with a fresh outlook. We will provide integrated solutions that only we can provide to address diversifying social challenges, in the four elds of Life, Industry, Infrastructure and Mobility, uniting all the capabilities inside and outside the Group. In doing so, we will further promote initiatives to create values for the achievement of a sustainable society. MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2021 01 To Our Shareholders and Investors Financial Highlights Performance for the Year Ended March 31,2021 Yen (millions) 2020 2021 Revenue ¥4,462,509 ¥4,191,433 Operating profit 259,661 230,195 Net profit attributable to Mitsubishi Electric Corp. stockholders 221,834 193,132 Total assets 4,409,771 4,797,921 Bonds and borrowings 267,008 248,897 Mitsubishi Electric Corp. stockholders' equity 2,429,743 2,754,293 Capital expenditure (Based on the recognized value of property, plant and equipment) 227,450 180,033 R&D expenditures 206,846 190,574 Yen Per share Amounts: Earnings per share attributable to Mitsubishi Electric Corp. stockholders Basic ¥103.41 ¥90.03 Diluted 103.41 90.03 Cash dividends declared 40 36 % Statistical Information Operating profit ratio 5.8% 5.5% Return on equity (ROE) 9.2 7.5 Bonds and borrowings to total assets 6.1 5.2 1. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards. 2. The balance of bonds and borrowings and the ratio of bonds and borrowings to total assets do not include lease liabilities. 3. R&D expenditures include elements spent on quality improvements which constitute manufacturing costs. 4. 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. Revenue Breakdown by Business Segment The economy in fiscal 2021 (April 1, 2020 - March 31, 2021) continued to see fields of Life, Industry, Infrastructure and Mobility to address diversifying social Others 12.7% Energy and Electric Systems 26.8% recovery in China mainly owing to an increase in capital expenditures for fixed challenges. assets, particularly in public investment, as an effect of political measures. Japan, For our sustainable growth, we aim to improve profitability by strengthening the Revenue 603,089 million Revenue 1,270,287 million the U.S. and Europe experienced a significant economic slowdown due to the business portfolio strategy. Specifically, we will strategically invest management serious impact of COVID-19 in the first quarter, but saw recovery in the corporate resources in the five business areas—Factory Automation (FA) Control Systems sector in general, while the paces of recovery in the household sector varied Business, Air Conditioning & Refrigeration Systems Business, Building Systems depending on the situation of the expansion of COVID-19. Business, Automotive Equipment Business (xEV/ADAS*1) and Power Under these circumstances, the Mitsubishi Electric Group has been working even Semiconductor Devices Business—that we position as Key Growth Businesses harder than before to promote growth strategies rooted in its advantages, while and shift our resources to profitable and high-growth businesses. In addition, we continuously implementing initiatives to strengthen its competitiveness and busi- will endeavor to create new businesses through promoting open innovation to Home Appliances 21.9% ness structure. meet changes in social structure and customer value, incorporating new areas Revenue 1,038,310 million As a result, revenue decreased by 6% year on year to 4,191.4 billion yen and and technologies and pursuing synergy as well as expanding solution businesses Industrial Automation Systems 26.3% operating profit fell by 11% year on year to 230.1 billion yen (operating profit with an emphasis on high added-value data linkage and utilization businesses. Revenue 1,248,566 million ratio of 5.5%) in fiscal 2021. We would like to ask for and appreciate the continued understanding and support Going forward, we will work to further create value for achieving the financial tar- of our shareholders in our business activities. gets for fiscal 2026 (April 1, 2025 - March 31, 2026) under the new medi- um-term management plan: consolidated revenue of 5,000 billion yen, operating profit ratio of 10%, return on equity (ROE) of 10%, and cash generation of 3,400 Information and billion yen in five years. Electronic Devices 4.3% Communication Systems 8.0% The Mitsubishi Electric Group will further promote initiatives to create value, such July 2021 Revenue 205,260 million Revenue 380,159 million as "Realize a Sustainable Society" and "Provide Safety, Security, and Comfort." By providing unique, Integrated Solutions by combining our strong core compo- nents and a wealth of field knowledge and advanced digital technology in the four *1 Advanced Driver Assistance System President & CEO Takeshi Sugiyama Note: Inter-segment sales are included in the amounts of the diagram above. 02 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2021 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2021 03 Non-financial Highlights Initiatives / External Evaluation Main target initiatives in fiscal 2022 Main initiatives and external evaluations related to ESG are as follows: Initiatives Realize a sustainable global environment Participation in the UN Global Compact In May 2018, the Mitsubishi Electric Group signed the UN Global Compact (UNGC) aimed at promoting sustainability activi- Percentage of recycled plastics used (amount of ties based on international norms. Decrease the amount of CO2 emitted when Reduce CO2 emissions during production molding materials and packaging materials procured) using the product compared to previous models by 9% or more Expression of approval of the TCFD recommendations 10% or more The Mitsubishi Electric Group has expressed approval of the recommendations by TCFD (Task Force on Climate-related or more compared to FY2017 by the end of FY2024 1% by the end of FY2024 Financial Disclosures) and has been promoting initiatives and disclosing information according to its recommendations. Realize a safe, secure, and comfortable society External Evaluation CDP Determine the true causes of major defects, Mitsubishi Electric was selected as the highest rating "A List company" from CDP for "Climate Change" and "Water Study goals and indicators that contribute to the Improve development and design quality by and develop company-wide measures to pre- Security." In the water category, it has been selected for five consecutive years. Mitsubishi Electric was also selected as a resolution of social issues through business, establishing company-wide design guidelines vent recurrence. "Supplier Engagement Leader," acquiring the highest rating in each area. including contribution to the SDGs/promotion of for individual component technologies. initiatives. a month Once SBT It is recognized that the Mitsubishi Electric Group’s greenhouse gas reduction targets for 2030 are based on scientific grounds to "Holding the increase in the global average temperature to well below 2°C above pre-industrial levels" as stipu- lated in the Paris Agreement. We have obtained certification from the SBT (Science Based Targets) initiative. Respect for all people EcoVadis Identify human rights issues by conducting Employee awareness survey Target Promotion of diversity Target human rights impact assessments, and grasp Mitsubishi