Yaskawa Electric : For printing (A4-sized)

YASKAWA Report 2023

Introduction

Since its establishment in 1915, Yaskawa Electric has constantly strived to take on the latest technologies of the times, upholding its corporate motto of being "a company founded on technology" and defining its business domain as "electric motors and their applications."

Currently, the business environment surrounding the Yaskawa Group is rapidly changing due to the global shortage of components, mainly semiconductors, exchange rate fluctuations and geopolitical risks. Amid this environment, while always keeping Yaskawa Principles at its core, the Yaskawa Group aims to become a company that continues to be needed by society

by contributing to a sustainable society through the core technologies it has cultivated and the implementation of "i3-Mechatronics."

To achieve this goal, the Yaskawa Group launched its mid-term business plan, "Realize 25" in FY2023. In this report, we introduce our approach to realize our long-term management plan, "Vision 2025 (FY 2016 to FY 2025)," which has the same target year as "Realize 25" and our initiatives for further growth beyond 2025.

Our Unique Foundation

Kitakyushu, where Yaskawa Electric was founded and where the head office is still located, has been one of the leading coal production areas in Japan. With the commencement of operations of the government owned Yawata Steel Works (Kyushu Steel Works, Nippon Steel Corporation) in 1901, various industries have been born, and the city has successfully developed as a "manufacturing town" that supported Japan.

The Yaskawa Group will further improve the Yaskawa brand and realize sustainable growth as a global company by taking full advantage of Kitakyushu's unique strengths, such as its strong presence in Kitakyushu, its accessibility to Asian markets, mainly China, and its potential as an environmentally advanced city.

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Contents

01 Drivers of Value Creation

3 Yaskawa Principles

1. History of Yaskawa and Its Six DNAs (Corporate Culture)

1. Unique Strengths

1. Differentiation Strategy

1. Value Creation Process

02 Management Policy

13 Top Message

19 Sustainability Management

1. Long-termBusiness Plan "Vision 2025"

1. Mid-termBusiness Plan "Realize 25"

1. Financial and Capital Strategy

03 Creating Social Value and Solving Social Issues through Business

1. Business Model Transformation and Initiatives for Value Creation

1. Global Production System

1. Financial and Non-Financial Highlights

1. Business Performance of FY2022

1. At a Glance

1. Business Strategy

01 Drivers of Value Creation

02 Management Policy03 Creating Social Value and Solving 04 Social Issues through Business

04 Foundation of Value Creation

51 Intellectual Capital Strategy

1. Human Resource Enhancement

1. Respect for Human Rights
2. Dialogue and Co-creation with Stakeholders

1. Environmental Initiatives

1. Climate Change and Decarbonization Initiatives

1. Risk Management

05 Corporate Governance

1. Message from the Chairman of the Board of Directors
2. Corporate Governance

1. Messages from Outside Directors

1. Directors

1. Executive Officers

06 Corporate Data

85 11-Year Financial Data

1. IR Activities and External Evaluation
2. Corporate and Stock-Related Information

Editorial Policy

YASKAWA Report 2023 is intended to serve as a platform for high quality dialogue with stakeholders. We strive to provide comprehensive financial and non-financial reports on the Yaskawa Group's strategies and results. In addition, by referring to and

utilizing the IFRS Foundation's "Integrated Reporting Framework" and the Ministry of Economy, Trade and Industry's "Guidance for Collaborative Value Creation," we aim to be able to help deepen readers' understanding of the medium- to long-term value creation that Yaskawa group is aiming for.

Scope of Reporting, etc.

Period covered:

March 1, 2022 to February 28, 2023 (Certain contents include activities occurred in or after March 2023.)

Scope:

YASKAWA Electric Corporation and consolidated subsidiaries Note: A part of non-financial information is provided of YASKAWA Electric Corporation.

Accounting standard:

Unless otherwise stated, figures for FY2017 and earlier are stated in accordance with Japanese GAAP, and figures for FY2018 and after are stated in accordance with International Financial Reporting Standards (IFRS).

Cautionary Statement Regarding Forward-Looking Statements Future projections for performance and other matters contained in this report are based on the information that is available at the time of issue and on a certain level of requirements as seen rational, however, actual results may vary due to various factors. Some examples of such factors are economic conditions, both in Japan and outside the country, trends in demand for the company's products and services, and trends in foreign exchange and stock markets. Please also note that factors which may impact the company's results are not limited to the aforementioned.

Foundation of Value Creation

05 Corporate Governance

06 Corporate Data

YASKAWA Report 2023

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Daigoro Yasukawa

01 Drivers of Value Creation

Yaskawa Principles

Based on the "founding motivation" of its founder, Daigoro Yasukawa, the Company formulated its corporate motto in 1979, due to a sense of danger in management during the confusion of the first oil shock in the 1970s. We have reclassified it into "Our Purpose," "Our Values" and "Our Actions" in 2022 as the Yaskawa Principles to promote better understanding and strengthen the practices of all employees globally.

This principle always serves as a flag for the significance of our existence, the core values of "Quality," "Profitability" and "Market," as well as the daily code of conduct. The spirit behind this is our origin, which never changes over time. We take this origin as the foundation of our mind for the sustainable growth of the Yaskawa Group into the future, and put it into practice every day as the criteria of judgment, to realizing our principles.

Our Principles

Column

Founding spirit living in the corporate motto

When YASKAWA Electric Manufacturing Co., Ltd. (the

predecessor of YASKAWA Electric Corporation) was founded, its founder, Daigoro Yasukawa, drew up the "Founding Spirit," and in the following year, established "Business Policy" and a "memorandom" consisting of 13 points. The business policy was to "not forget the ideal for the sake of temporary profit, and give first priority to the satisfaction of customers with sincerity." and the memorandum stated, "we will strive to design and manufacture products that are unique to our company," "We will always focus on quality," and "We will expand our sales channels with the best quality of our products." Regarding the memorandum, he said, "It was a very youthful and impractical argument. I feel ashamed comparing it with my later achievements." However, the Yaskawa Group's unique characteristics and strengths have been consistent in that it has developed a great deal of technology, introduced innovative products to the world, and served customers with sincerity as a good partner.

Writings and biographies of Daigoro

3

Our Purpose

Yaskawa's mission is to contribute broadly to social development and human welfare through the execution of our business.

Since its inception, YASKAWA Electric has expanded its business with "electric motors and their applications" as a major business pillar. The spread of our Group's diverse technologies and products to society will help to improve the advancement of machinery and manufacturing.

Yaskawa innovation contributes to the advancement of social development, creating a safer, cleaner, more efficient and sustainable workplace to free the workforce from the 3Ds (Dangerous, Dirty, Dull). The purpose of the Yaskawa is to contribute to a society where people can live a safe, secure and humane life.

Our Values

To achieve the mission, our group has set the following three objectives and work hard to achieve them.

1. Quality

Always developing and improving world-class technologies with a focus on quality

2. Profitability

Working to improve management efficiency and secure Profit necessary for the sustainable growth

3. Market

Serving the needs of our customers and pursuing customer satisfaction

Our Actions

We respect our group's heritage and strive to realize our mission, and through this, we seek the group's prosperity and our own well-being by raising society's trust. In particular, the following five items comprise our daily action guidelines.

• Stay customer-focused.
• Pursue both high quality and high profitability.
• Work hard to overcome the competition with a fighting spirit.
• Broaden our perspective and change our thinking.
• Deepen mutual trust and strive for unity and cooperation.

01 Drivers of Value Creation

02 Management Policy03 Creating Social Value and Solving 04 Foundation of Value Creation Social Issues through Business

05 Corporate Governance

06 Corporate Data

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01 Drivers of Value Creation

History of Yaskawa and Its Six DNAs (Corporate Culture)

Our Corporate Culture

Since its establishment in 1915, Yaskawa Electric has earnestly pursued for more than 100 years the business area of "motors and their applications" and "making things happen by driving motors." This is the core of the company that will never change. This page introduces the 6 DNAs (corporate culture) that has been nurtured over the past 100 years since the foundation of the company, as people from each era gathered their wisdom and overcame many difficulties.

DNA 1

Technology-driven

Electric motors were starting to advance into all industrial segments as replacements for steam engine at the beginning of the Taisho period. Daigoro Yasukawa was among those who learned the fundamentals of such leading- edge technology. In 1915, with his father promising "to provide financial support, but not interfere with the way the business is run," Daigoro founded our prede- cessor, Yaskawa Electric Manufacturing Co. The company started its business by manufacturing electric motors for mining, where the imported products dominated and domestically produced motors were scarce.

Daigoro expressed his wish to contribute to the nation by exporting domestically produced motors in his "motivation of establishment," and aimed at undertaking the business with the company's own technologies, not by copying the leading Western products. At the age of 29, Daiogoro expressed his passion, and in fact promoted the development of a wide variety of products, including switches and transformers, in addition to various motors. At this time,

a culture of "technology-driven"was established, which is the basis of Yaskawa. Founder Daigoro Yasukawa

DNA 2

Customer and

application focus

DNA 3

Quality first

The founder, Daigoro Yasukawa, created the "Business Policy" the year after he founded Yaskawa Electric Manufacturing. He set forth his policy of not forgetting the ideal for the sake of temporary profit, and giving the first priority to the satisfaction of customers with sincerity. As motors began to be used by customers through the business, the ideal form and direction of the entire organization have been created based on the concept of "learning how the motors are used by customers (applications) and providing optimal systems."

After the World War II, energy shifted from coal to oil, and the heavy chemical industry developed. At that time, the company was engaged in manufacturing equipment (process automation) for materials such as steel making and spinning, which operated 24 hours a day. The idea of "quality first" became ingrained in the organization as we believed that we should not cause any trouble to our customers' equipment.

After World War II, we demonstrated our exclusive strength mainly in automatic charging equipment for raw materials around blast furnaces.

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DNA 4

Mechatronics

In 1969, Yaskawa became the first company in the world to propose the concept of "mecha- tronics," aiming to "Integrate customer machines with Yaskawa motors and controllers to achieve higher functionality." We accelerated our business expansion from conventional process automation to factory automation, aggressively invested resources in response to the rapid growth of the mechatronics market, and introduced a number of new products. Against this backdrop, "MOTOMAN-L10," Japan's first all-electric arc welding robot, was born, laying the foundation for the company's Robotics Business.

Minertia motor (1958)	Moto-arm (left) and moto-	MOTOMAN-L10 (1977)
A motor that became the basis for the servo	finger (right) commercialized in	Japan's first all-electric vertical
motor available today. A revolutionary	the late 1960s.	articulated industrial robot
product that had a response rate 100 times
greater than conventional motors.

01 Drivers of Value Creation

02 Management Policy03 Creating Social Value Social Issues through

DNA 5

Policy-based management

DNA 6

Global

At the time "mechatronics" was launched, the existing business was still mainly focused and the concept was not a culture yet but just a vision. As such, Yaskawa worked on TQC (policy management) as a tool to set the whole organization in one direction. Yaskawa established its own management system, including tools for setting and managing targets in development, manufacturing and sales. As a result, the vision of mechatronics and TQC have become part of its corporate culture, and Yaskawa has madesignificant progress in the R&D and customer development for automation in the assembly industry.

After the end of the Japanese bubble economy in the 1990s, Yaskawa began localizing its business to expand its overseas business base. Yaskawa didn't sell the Japanese products as they were to overseas markets but provided customer services and products needed in each region. It was a different way from that of many Japanese companies at that time but the culture matched well with the changes of business environment. Today, in addition to products and sales organization tailored to the characteristics of each region, we are implementing global management that combines efficient global operations with management tailored to the characteristics of each region.

FY2022 overseas ratio (Revenue/employee/production)

Japan	Japan	Japan
29%	44%	60%

	FY2022	Overseas	FY2022	Overseas	FY2022
Overseas	Revenue	Employee	Production
71%	ratio	56%	ratio	40%	ratio

and Solving 04 Foundation of Value Creation Business

05 Corporate Governance

06 Corporate Data

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01 Drivers of Value Creation​

Unique Strengths

The six DNAs (corporate culture) that have been cultivated over a history of more than 100 years have been strengthened through the succession of practices of Yaskawa principles, and they form the current strengths of the Yaskawa Group.

The six DNAs

as corporate culture

DNA 1

Technology-driven

DNA 2

Customer and

application focus

DNA 3

Quality first

DNA 4

Mechatronics

DNA 5

Policy-based management

DNA 6

Global

Worldʼs first	Worldʼs first
Transistor AC drive	Multiple robot cooperative control
VS-616T (1974)	MOTOMAN-SK Series (1995)

Worldʼs first	Worldʼs first
Matrix converter	GaN power semiconductor equipped
Varispeed AC (2005)	Servo motor with built-in amplifier (2017)

Development focused on

the world's first and best technologies

Since its establishment, the company has focused on "electric motors and their applications" and has produced many of the world's first and world's best technologies and products. Yaskawa's technologies and products lead to industrial innovation and contribute to the development of society.

Our Uni

Customers' trust

Since the 1930s, when we established a policy of not only manufacturing and selling motors, but also learning how they are used by customers and providing optimal systems, we have maintained a stance of being close to our customers. Even today, based on our policy of continuing to provide high value-added and high-quality products that realize the benefits of improvement and evolution that customers demand, we promote our business with a strong relationship with our customers.

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Ability to transform

In 1969, Yaskawa pioneered the concept of "mechatronics," and the following year, in 1970, it envisioned "Unmanned Factory," an automated factory that humans and machines work together by using mechatronics. In the 1970s, when Japanese manufacturing shifted from the material industry to the assembly industry, the concept of "mechatronics" from the Yaskawa Group became the driving force behind the Third Industrial Revolution. Then, in 2018, the Yaskawa Solution Factory was established, which embodied unmanned factory envisioned for a long time. As a demonstration factory for i3-Mechatronics, it is leading the transformation

of manufacturing and business. Based on the concept of

i3-Mechatronics, the Yaskawa Group will lead the evolution of production in the Fourth Industrial Revolution, which aims to achieve optimal production systems in a data-driven society.

Production line in Yaskawa Solution Factory

Diagram of "Unmanned Factory"

que Strengths

Strong presence

in global markets

We have been involved in the export of products since the early days of our founding, following the spirit of our founder, who had a wish to contribute to the nation by exporting domestically produced motors overseas. Since the 1990s, we have been localizing our business and building our own sales network and production system in demand areas, and we have a top-level global market share in our core products.

01 Drivers of Value Creation

02 Management Policy03 Creating Social Value and Solving 04 Foundation of Value Creation Social Issues through Business

05 Corporate Governance

Market share (company estimate)

AC servo drive	AC drive
17%	5%

Industrial robot

10%

06 Corporate Data

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01 Drivers of Value Creation​

Differentiation Strategy

i3-Mechatronics

Our company's strength has been to automate the "cells," a unit of the factory's production line, with industrial robots, servo motors and AC drives.

In 2017, Yaskawa announced the "i3-Mechatronics" solution concept, proposing to automate the cell and manage it with digital data as a solution to the "improvement and evolution" demanded by customers. This enables us to manage the operation status of equipment with process data and the production status with status data as "numerical values" rather than "expert knowledge."

Areas to work with partners

strengths are demonstrated

The Smart Factory where i3-Mechatronics Is Realized
	ERP/SCM	Model generation	Utilizing and
	Business	Cloud/FOG
	administration	and learning	analysis using
	Io·TAI
The three steps	Resource management	Accumulation	"big data"
Data Center/Cloud
of i3-Mechatronics		of know-how
		Feedback
2	MES
Manufacturing
intelligent	execution system
	Model	Data
Visualization and analysis		delivery	delivery
of operation status of
equipment using data

			YASKAWA	Defect monitoring model
3		Feedback	Cockpit*2	Predictive maintenance model
		Real-time execution of
innovative	YRM-X Controller*3		Recovery judgment model
Production innovation by	Converted	analyzed model
high-speed and precise
cooperation, synchronous	into
control between equipment	physical
	motion

Data

connection

Areas where unique

1

integrated	AC servo
Controller
Automation of "cells" by
industrial robots, servo
motors and AC drives,	Assembly
and data collection of	parts input
equipment
	Robot

Robot

AC servo

Shipping

AC drives

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