Ebara : MEDIUM- TO LONG-TERM CORPORATE VALUE CREATION

MEDIUM- TO LONG-TERM CORPORATE VALUE CREATION

Message from the President

We will continue to challenge

­ourselves to solve social issues and support the world with technology, passionately, for the next 100 years!

Masao Asami

Director, President and Representative Executive Officer

The COVID-19 pandemic remains prevalent around the world, including in Japan. On behalf of the EBARA Group, I would like to express our deepest condolences to anyone who has suffered or lost loved ones due to the COVID-19 pandemic, and our prayers for the speedy recovery of those who have contracted the virus and those in difficult circumstances.  The EBARA Group is committed to fulfilling its social responsibility to support industries and ­livelihoods around the world, and will continue its operations while putting the safety of its employees and stakeholders first and supporting worldwide recovery from the pandemic.

Review of the Fiscal Year Ended December 31, 2021

In the second year of the medium-term management plan, E-Plan 2022, significant progress was made in two respects. One is the significant improvement in the profitability of both the Custom Pumps Business and the Compressors and Turbines Business. In the Custom Pumps Business in particular, the Futtsu Plant improved productivity, promoted

fixed cost optimization, and thoroughly implemented front-loading. We employ this strategy to determine our ability to receive additional orders by reviewing specifications and delivery dates, then moving up (or frontloading) the manufacturing process so we can determine whether or not additional orders can be received. This will be the third year we've been implementing the policy of making decisions that balance the ­difficulty of specifications and delivery time. As a result, profitability at the Futtsu Plant has improved dramatically while delivery delays have decreased.

 In the Compressors and Turbines Business, we can confirm specifications and other information prior to receiving an order using 3D parametric design, an automated design technology that we are proud of. However, we occasionally overlooked the profitability of new orders because of the service and support (S&S) base network's profitability. Therefore, we changed our policy to strategically accept or reject orders based on expected return, and also thoroughly manage delivery dates and ­prices. The increased profitability of these two

11 EBARA Group Integrated Report 2022

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MEDIUM- TO LONG-TERM CORPORATE VALUE CREATION

Message from the President

businesses,­ which were positioned for improvement in E-Plan 2022, was one of the factors that enabled us to achieve the operating income ratio target in E-Plan 2022 one year ahead of schedule.

 The second aspect of our significant progress was in the Precision Machinery Business. In this growth business, we were able to meet demand from the semiconductor indus- try, which has grown significantly. The automated dry vacuum pump plant has been operating at near-full capacity since the summer of 2021, and this increase in production and processing capacity has helped us meet growing demand and improved profitability.

 In response to the difficulties in procuring parts and materials, as well as price increases that occurred in 2021, we successfully reviewed the entire procurement and supply chain, a process which we began in 2020. The Global Procurement and SCM Strategy Department has taken the lead in bringing together procurement managers from the business units to discuss and take action on the EBARA Group's direction in terms of indirect and direct materials and logistics, item by item, many times at meetings we call councils, which I attended every time. At first, there were barriers between departments, but communication improved as the meetings continued. In 2022, a procurement and

logistics hotline was established to respond to the global shortage of materials across the EBARA Group. The number of consultations has gradually increased and is now in the tens of thousands. The EBARA Group has offices around the world, each with its own procurement personnel. By combining their strengths, we were able to continue supplying products to customers despite the shortage of parts and materials. Although there were delivery delays, I felt this truly showed the underlying strength of the EBARA Group.

Looking Ahead to the Final Year of E-Plan 2022 and Beyond

The fiscal year ending December 31, 2022 will be the final year of E-Plan 2022. The main goal of E-Plan 2022 was achieved last year, one year ahead of schedule, and we aim to exceed that number this year, treating our original goal as a stepping stone to the next achievement. What we must do as a company is to improve profitability, plant seeds for growth, and take on new challenges.

 In the Standard Pumps Business, which is also positioned as a growth business, we are working to expand the number of overseas offices to more than ten with the goal of expanding coverage in growth markets. In 2020, we established two sites in Vietnam and Mexico, then in 2021,

acquired a pump manufacturer in Turkey and completed one site in Canada, and in 2022, six sites are being established in the Europe, South America, and Africa regions.

 Demand is growing in the Precision Machinery Business, another growth business, and we are taking measures to respond to it. We are already starting to see the results of our heightened presence in China.

 As for new business, we launched a corporate project for hydrogen-related business in August 2021, and we are working on various initiatives to create the de facto standard. I believe that hydrogen will replace LNG. EBARA's technology for handling extremely low temperatures is essential for transporting liquefied hydrogen. Hydrogen is extremely

difficult­ to handle. Precisely because of this, I believe EBARA is perfectly positioned to make strides in the industry.  Along with achieving the numerical targets of E-Plan 2022, it is important to accomplish what we have set as our basic policy. The implementation of ERP for upgrading management and business infrastructure is underway with more than 300 employees. In addition, one thing that must be done in the mid- to long-term is the promotion of diversity. In January 2022, we launched the Diversity Project in order to make EBARA a company where people can continue to work with peace of mind and continue their careers in the long term, without being limited by life events.

 In January 2022, we launched the Carbon Neutral Project in order to achieve our environmental goal of becoming

beginning and over the past century, EBARA has conducted business with the aim of solving social issues. I believe that our ability to demonstrate EBARA's technology and strengths is what continues to drive our business today. Even within the Company, we often say that the more difficult a problem, the better. By taking on and solving difficult challenges, we pave the way for a new future. That's the kind of company we aim to continue to be.

 EBARA has cultivated a culture that encourages taking on new challenges. These challenges then create opportunities for serendipity. To continue maintaining this culture, we need to foster the right human resources. Rather than just staying in one place, it is very important for people to benefit from stimulation outside of the Company. To this end, we have invested in and sent employees to Spiber Inc. and the Real Tech Global Fund, to name just two examples.

 One of the things I tell my employees about human resources is the importance of leadership qualities. I believe there are four: curiosity, insight, courage to take risks, and influence. If you are not interested in your work and prefer to just do what you are told, nothing will happen. If you have the curiosity to think about the meaning of the work you are interested in, the insight to see how you can satisfy the other party, the courage to try things for the first time with determination, and the influence to get other people involved, things will naturally move in the right direction. The EBARA Group aims to be a company with employees of

Progress of Medium-term Management Plan "E-Plan 2022"

Achieved targets for ROIC and operating profit ratio, the key performance indicators, one year ahead of schedule

E-Plan2022
2022/12	E-Plan2022

­carbon neutral by 2050. We have begun working toward achieving carbon neutrality and achieving our E-Vision 2030 goal of reducing greenhouse gas emissions by the ­equivalent of approximately 100 million tons of CO2.

all nationalities and genders who think independently, work with speed, actively take on new challenges, and produce tangible results by 2030. These leadership qualities will be essential for this goal.

	2019/12	2020/12	2021/12	Targets	2022/12 Forecast
Key Performance Indicators (KPI)
JGAAP	IFRS	IFRS	IFRS	IFRS
ROIC	6.5%	6.4%	10.7%	10.5%	7.6% or more
Operating Profit Ratio	6.8%	7.2%	10.2%	10.0%	8.5% or more
Target Achievement Indicators
ROE	8.3%	8.6%	14.5%	-	11.2% or more
Debt-to-Equity Ratio	0.29 times	0.34 times	0.36 times	-	0.4-0.6 times
Operating Profit Ratio by Business
FMS Business	5.3%	6.3%	7.4%	7.3%	7.0% or more
Pumps Business	6.3%	5.5%	7.4%	7.0%	6.5% or more
Compressors and Turbines Business	5.1%	8.0%	9.7%	9.5%	8.0% or more
Chillers Business	4.9%	5.4%	4.1%	5.1%	5.0% or more
EP Business	10.8%	10.2%	7.8%	7.0%	9.5% or more
PM Business	8.1%	8.3%	14.5%	15.0%	13.0% or more

Strengthening the Market-In Perspective for the Next Medium-Term Management Plan

In 2022, we are also formulating a new medium-term

­management plan that will start in the next fiscal year. In the next medium-term plan, we intend to strengthen our market-in approach. The market-in strategy values being located physically close to customers. From the customer's viewpoint, how can EBARA contribute to outcomes for

society­ or the global environment? What added value will customers and society appreciate in EBARA's products? In order to contribute and be valued, we will have to be close to our customers and solve their problems. I tell our employees on the ground to remember the basics and think about whether or not they are properly listening to customer feedback like "I want something like this" or "I'm having trouble with that."

 At the root of our market-in philosophy is the desire to make our customers happy and to benefit people across the world. EBARA has been aiming at this goal since the very

Supporting the World while Changing with the Times

To this day, the EBARA Group has continued to operate by providing what society and industry need. EBARA will continue to support the world over the next 50 and 100 years, changing in accordance with the times. This can only be accomplished by working as an ecosystem consisting of diverse people, including suppliers, rather than as the EBARA Group alone. We will continue to support the world, passionately and with technology, while listening to our stakeholders' feedback and maintaining a relationship of trust.

Masao Asami Director, President and Representative Executive Officer

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MEDIUM- TO LONG-TERM CORPORATE VALUE CREATION

E-Vision 2030 (Long-Term Vision) and E-Plan 2022 (Medium-Term Management Plan)

Long-Term Vision E-Vision 2030

The EBARA Group has formulated a 10-yearlong-term vision and the path towards that goal, E-Vision 2030, as its value creation story. Under the slogan of "Technology. Passion. Support Our Globe," we aim to become an excellent global com- pany. Through our business, we will contribute to the United Nations Sustainable Development Goals (SDGs), other social issues, and the creation of a sustainable society while simultaneously increasing the social, environmental, and economic value we generate. We believe this will earn greater corporate value and recognition as an excellent global company.  E-Vision 2030 sets out five material issues (EBARA's materiality) for the Group to address by 2030.

Vision for 2030

Excellent Global Company

Enhance EBARA's corporate value through the improvement of social, environmental, and economic value

 For every issue, we organized the approaches to be taken by each division, setting separate divisional KPIs and targets. For details, please refer to pages 17-18.

ReferenceMateriality Determination Process

https://www.ebara.co.jp/en/sustainability/think/information/materiality.html

Five Material Issues (Materiality)

Social / Environmental Value

Solve social issues

through our business

• Reduce GHG emissions to approximately 100 million tons of CO2
• Deliver water to 600 million people
• Contribute to development of ICAC5: Challenge 14Å

Economic Value

Sustainable Groupwide growth	Indicator of Corporate Value
and efficient management
¥1 trillion
• Roughly ¥1 trillion in sales
• ROIC of 10.0% or more
	in market capitalization

1. Contribute to the creation of a sustainable society

We will utilize our technologies to passionately support the creation of a sustainable, environmentally friendly world with ample food and water, and safe and reliable social infrastructure.

For people and society

2. Elevate standards

of living and

support abundant

lifestyles for all

We will utilize our technologies to passionately support economic development that enables the world to end poverty and realize ever-evolving and abundant lifestyles.

For industry

3. Conduct comprehensive environmental management

We will promote the reduction of CO2 emissions from our business operations and maximize our use of renewable energy to move toward a carbon-neutral world.

For our business activities and supply chain

4. Promote working

environments that encourage challenge

We will promote a Group culture of competition and chal- lenge, and provide diverse employees with meaningful work and comfortable working environments.

For our employees

5. Enhance corporate governance

We will lay out a vision for and pursue growth through offensive and defensive ­governance that supports high-level management capabilities.

For sustainable

management

Progress on Social and Environmental Value Target "Contribute to Development of ICAC5: Challenge 14Å"

The Belgian independent nanotech semicon-	imec's Logic Device Roadmap
ductor research institute Interuniversity
Microelectronics Centre (imec) has published
a logic device roadmap* to 1nm (10Å) and
beyond. Imec is collaborating with companies
around the world in development and is
­currently working on 2-3nm(20-30Å) tech-
nology nodes. EBARA has concluded a Joint
Development Program (JDP) agreement
with imec and now collaborates with them
in the area of Chemical Mechanical Polisher
(CMP) development.

• We assume that by 2030, we will have 7Å in development and 14Å for commercial use.

Ref. imec Dr. Sri Samavedam

Medium-Term Management Plan E-Plan 2022

E-Plan 2022 is a medium-term management plan covering the period from 2020 to 2022. This plan comprises management policies and strategies for the three-year period that are formulated based on backcasting from what we want to achieve in the next decade, as indicated by E-Vision 2030, and by reflecting on the previous medium-term management plan (E-Plan 2019) to identify issues that still need to be resolved. E-Plan 2022 is positioned as the stage to "Reconstruct the foundations of growth" as we progress toward our vision in 2030.

 E-Plan 2022 has four basic policies: (1) strive for growth, (2) improve the profitability of existing businesses, (3) refine management and business infrastructure, and (4) enhance ESG-focused management. For existing businesses, we have classified them into growth businesses and profitability improvement businesses according to our business portfolio, and have set strategies for each.

15 EBARA Group Integrated Report 2022

Target Business Portfolio

GrowthHigh

Medium

Low		Medium	High
		Protability
Pumps Business	Compressors and Turbines Business
Chillers Business	Environmental Plants Business
Precision Machinery Business

Progress in the Second Year of E-Plan 2022

In the fiscal year ended December 31, 2021, the COVID-19 pandemic caused difficulties in procuring parts and materials and price increases, but we were able to control the impact on our business performance by taking relevant measures in each of our businesses. Our most important indicators (ROIC and the operating profit to revenue ratio) have further improved from 2020, achieving the E-Plan 2022 target one year ahead of schedule.

			E-Plan 2022
	2019/12	2020/12	2021/12	2022/12	E-Plan 2022
	2022/12
	Plan
				Targets
Key Performance	JGAAP	IFRS	IFRS	IFRS	IFRS
Indicators (KPIs)
Return on Invested	6.5%	6.4%	10.7%	10.5%	7.6% or
Capital (ROIC)	more
Operating Profit Ratio	6.8%	7.2%	10.2%	10.0%	8.5% or
more
Target Achievement
Indicators
Return on Equity (ROE)	8.3%	8.6%	14.5%	-	11.2% or
more
Debt-to-Equity Ratio	0.29	0.34	0.36	-	0.4~0.6
times	times	times	times

EBARA Group Integrated Report 2022 16

MEDIUM- TO LONG-TERM CORPORATE VALUE CREATION

Five Material Issues (EBARA's Materiality) for E-Vision 2030 and Key Measures and KPIs for E-Plan 2022

In order to resolve the five material issues (EBARA's materiality) set forth in E-Vision 2030, our long-term vision, we have established	E-Plan 2022, our mid-term management plan. We will continuously monitor the KPIs and implement the PDCA cycle to achieve our targets
­concrete measures, clarified our desired outcomes,	organized the actions to	be taken by each division, and set divisional KPIs and targets in	and realize our desired outcomes. For progress on each division's KPIs and targets, please refer to the respective pages in Business Strategies.
Five Material Issues (EBARA's Materiality)	Related SDGs	Desired Outcomes	Challenges	Key Measures and KPIs	2022/12 Targets	2021/12 Results

1 Contribute to the creation of a sustainable society

We will utilize our technologies to passionately support the creation of a sustainable, environmentally friendly world with ample food and water, and safe and reliable social infrastructure.

Respond to serious environmental problems and economic development at the global level, by creating social and industrial infrastructure that will both reduce CO2 emissions and stimulate economic activity

• Ensure infrastructure is operating stably for safe and secure living
• Realize resilient cities that do not expose people to risks to life in the event of a natural disaster
• Ensure stable water supply to meet increasing water demand due to population growth and social development
• Be less vulnerable to climatic and geographic conditions, ensuring a stable supply of food

Sustainable, environmentally-friendly world

Economic and social development will accelerate in line with population growth, especially in developing countries, which will increase CO2 emissions and environmental impact at the

global level and exacerbate climate change.

Social infrastructure for safe and secure living

• Economic and social development due to population growth, especially in developing countries, will require the development of social infrastructure.

• In Japan and other countries, aging social infrastructure needs to be maintained or updated.

• Increasingly severe weather events will increase the frequency with which people are exposed to natural disaster risks.

A society with no food or water shortages

• Water demand will increase with population growth and social development in developing countries.
• In developed countries, it will be important to secure a sta- ble supply of water and ensure its efficient use.
• Demand for food will increase in developing countries due to population growth.
• Countries with low food self-sufficiency, such as Japan, should increase self-sufficiency rates and correct excessive dependence on food imports.

Improving energy saving and reducing product weight

Achieve 100%

Continued product

• Fluid Machinery & Systems Business: Complete development

and commercialization­

of new steam turbine series

commercialization

development

• Precision Machinery Business: Weight reduction of target products

12% (per unit compared to 2019)

11%/unit

Environmental load management

Reduce annual GHG emissions

CO2 Equivalent

• Fluid Machinery & Systems Business: Reduction of GHG emissions through

by the equivalent of 33,000

Reduction

sales of low-GWP*1 products

tons of carbon dioxide

17,300t/year

• Environmental Plants Business: Generation of renewable energy from waste

130,000 MWh

164,279 MWh

• Precision Machinery Business: Reduction of GHG emissions through

Achieve 100%

65%

gas abatement systems

Contribution to technologies that reduce environmental impact

Achieve 100% commercialization

Continued product

• Fluid Machinery & Systems Business: Development and market launch of

products for liquid hydrogen plants

Construction of demonstration

development

• Environmental Plants Business: Practical application of Internally circulating­

units, achieve an order target

Basic and additional

fluidized-bed gasification system (ICFG)

of 100%

tests ongoing

Stable operation of social infrastructure

• Environmental Plants Business: Long-term comprehensive contracts­ 19 16 for DBO projects (cumulative total)

• Environmental Plants Business: Crane upgrades and AI crane installation Achieve 100% installation­ target 33% of installation target achieved

Stable water supply to diverse regions		Achieve a unit sales		Achieved sales
Fluid Machinery & Systems Business: Expansion of solar pump sales
		­volume target of 100%		volume target

2	Elevate standards of living
and support abundant
lifestyles for all

We will utilize our technologies to passionately support economic development that enables the world to end poverty and realize ever-evolving and abundant lifestyles.

• Contribute to the development of the semiconductor industry (technological progress and production optimization) to realize convenient and abundant lifestyles for all (ICAC5)
• Enable advanced factory operations through smart products and services
• Ensure that aging industrial plants and facilities built during the period of rapid economic growth can be operated safely and stably

In a world where highly advanced technology is assured, con- tinuous technological evolution is required in the industrial

sector (realization of Society 5.0).

Development of manufacturing equipment to meet the evolutionary
roadmap for semiconductors
• Precision Machinery Business: Development of new models arising­	from				Achieve 100%		111%
priority projects
• Precision Machinery Business: Development of elemental technologies­ for			Achieve 100%		75%
the next generation of target products

3		Conduct comprehensive		Simultaneously reduce environmental impact and increase economic value		activities as part of our response to climate change and other	• Improve the recycling rate of waste materials
	environmental
		management						Minimize the environmental impact of the Group's business	• Reduce CO2 emissions from business activities
						increasingly serious global environmental issues

We will promote the reduction of CO2 emissions from our business operations and maximize our use of renewable energy to move toward a carbon-neutral world.

			2030:	26% reduction		11% reduction
				(compared to 2018)
			2030:	95% or higher		97.1%

4		Promote working
	environments that
	encourage challenge

We will promote a Group culture of competition and

challenge,­ and provide diverse employees with ­meaningful work and comfortable working environments.

Build a corporate culture throughout the Group of competition and challenge and increase employee engagement

Job Satisfaction

To continue enhancing social and environmental value through our global business, it is essential that our diverse workforce is

able to maximize and enhance their capabilities.

Ease of Work

Create an environment in which employees feel comfortable and motivated to work so that they can maximize their abilities and achieve the best performance possible

Establishing a foundation to achieve sustainable global growth	P.47		P.47
• Global development of human resources system
• Reduction of total recordable incident rate (TRIR)			2023: 0.80		3.09

Transform into a Group with a corporate culture of competition and challenge

• Reduce total average work hours
• Promote diversity by increasing the ratio of women in key positions*2 as well as 1,920 hours 2,037 hours
  the percentage of female employees and non-Japanese citizens­ joining EBARA P.47 P.47
• Improve global engagement survey score 83 79
• Continue investing in human resource development ¥46,795 ¥41,799 (training costs per person)
• Increase the ratio of local employees in global key positions at overseas­ 2030: 50% 22% operating sites

5 Enhance corporate governance

We will lay out a vision for and pursue growth through offensive and defensive governance that supports high-level management capabilities.

• Ensure transparency and accountability through proactive corporate information disclosure and dia-		Corporate Governance
logue with stakeholders		Realize transparent, fair and boldly challenging management
• Pursue the EBARA Way, the EBARA Group's universal values, to enhance corporate value		to ensure continued sustainable growth for the EBARA Group
• Established a system to systematically identify, evaluate, and minimize risks		Risk Management
• Supply chain risks are minimized to ensure business continuity.		Minimize risk in today's rapidly changing social structure by
• Internal controls are properly implemented in the Group, and a system to audit the controls is in place.		refining corporate risk management
Ensure compliance with laws and regulations in all regions without exception, and ensure that the Group		Compliance
	Thoroughly and sincerely comply with not only laws and reg-
operates based on high ethical standards		ulations, but also internal rules, social norms, and standards
		of common sense and decency

• Expand opportunities for dialogue with stakeholders				P.59-60				P.59-60
• Promotion of the EBARA Way (participation rate for training related to the			100% participation rate			Domestic Group:
EBARA Way)					98.9%
								Overseas Group:
								95.4%

• Strengthen supply chain management P.59 P.59
• Thoroughly implement internal controls on a global scale P.75-76 P.75-76

Ongoing corruption prevention training		P.79-80		P.79-80

*1. GWP: Global warming potential  *2. Key positions: Employee positions equivalent to managers

17 EBARA Group Integrated Report 2022

EBARA Group Integrated Report 2022 18

CORPORATE DATA

Financial and Non-Financial Highlights

The occurrence of the irregular nine-month period ended December 31, 2017, is the result of a change in the settlement date used by EBARA CORPORATION and consolidated subsidiaries. Effective from the fiscal year ended December 31, 2021, the Company has adopted IFRS in place of the previously used Japanese GAAP. The financial figures for the fiscal year ended December 31, 2020 are also presented in accordance with IFRS.

Financial Indicators			JGAAP		IFRS
ROIC*1 / ROE*2	Operating Profit / Operating Profit to Revenue Ratio

Non-Financial Indicators

Ratio of Female New Hires / Ratio of Non-Japanese New Hires*6

Total Recordable Incident Rate*7

(%)
15.0	14.5%

10.0

10.7%

5.0

0

		2017/3	2017/12	2018/12	2019/12		2020/12	2021/12
	ROIC		ROE

(Billions of yen)						(%)
70.0						14.0
60.0					61.3	12.0
50.0				10.2%	10.0
40.0						8.0
30.0						6.0
20.0						4.0
10.0						2.0
0						0
2017/3	2017/12	2018/12	2019/12	2020/12	2021/12

	Operating prot (left scale)		Operating prot to revenue ratio (right scale)

(%)

30.0

25.0

20.0

15.0							18.0%
10.0
5.0
0						4.5%
2017/3	2017/12	2018/12	2019/12	2020/12	2021/12
	Ratio of female new hires		Ratio of non-Japanese new hires

4.0
3.0	3.09

2.0

1.0

0

2018/12

2019/12

2020/12

2021/12

ROIC, a key performance indicator, was 10.7% for the fiscal year		The operating profit to revenue ratio was 10.2% in the fiscal year
ended December 31, 2021, exceeding the previous year's results.		ended December 31, 2021, exceeding the previous year's results. This
ROE was 14.5%, also exceeding the previous year's results. The		was due to an improvement in the operating profit to revenue ratio of
medium-term management plan, E-Plan 2022, set final year targets		the Fluid Machinery & Systems Business, from 6.3% to 7.4%, and sig-
of 7.6% for ROIC and 11.2% or more for ROE. These were achieved		nificant gains in the Precision Machinery Business, which rose from
ahead of schedule.		8.3% to 14.5%.

The EBARA Group believes that diversity is essential for innovation and that the employment of human resources with diverse backgrounds will contribute to improved business performance. In the fiscal year ended December 31, 2021, the Company hired 111 new employees, of which 20, or 18.0%, were women and 5, or 4.5%, were non-Japanese.

EBARA's goal is to reduce the overall domestic accident frequency rate to 0.80 or less by 2023. In the fiscal year ended December 31, 2021, we conducted risk surveys, safety culture diagnoses, and held interviews about occupational accidents after they occurred. We also had occupational safety consultants analyze industrial accidents at each operating site. We will continue to implement measures such as a follow-up system to prevent recurrence of work-related accidents, risk management, and human resource development for safe work guidance.

Capital Expenditures / Depreciation and Amortization / R&D Expenses

(Billions of yen)

40.0
30.0
20.0					22.7	21.4
10.0						13.5
0
2017/3	2017/12	2018/12	2019/12	2020/12	2021/12

Capital expenditures		Depreciation and amortization		R&D expenses

Dividends per Share*3 / Consolidated Dividend Payout Ratio*4

(Yen)						(%)
200						80.0
150					163	60.0
100					35.2%	40.0
50						20.0
0						0
2017/3	2017/12	2018/12	2019/12	2020/12	2021/12

	Dividends per share (left scale)		Total return ratio (right scale)

CO2 Emissions (Scope 1 and 2)*8

(Thousands of tons)

60
50
40					40
30
20
10
0
2017/3	2017/12	2018/12	2019/12	2020/12	2021/12

Water Consumption*9
(Thousands of m3)
1,200					1,088
1,000
800
600
400
200
0
2017/3	2017/12	2018/12	2019/12	2020/12	2021/12

In the Precision Machinery Business, we strengthened our development capabilities in semiconductor manufacturing equipment, expanded production lines, and renovated facilities at overseas sites that overhaul dry vacuum pumps to meet increasing demands. In addition, the Fluid Machinery & Systems Business maintained and upgraded existing facilities and, continuing from last year, introduced ERP to strengthen its management base. Depreciation and amortization have been increasing, mainly due to the expanding scale of the Precision Machinery Business, including the full-scale operation of our automated dry vacuum pump plant.

Our basic policy for shareholder returns is to target a consolidated

­dividend payout ratio of 35% or more and a consolidated dividend on equity (DOE) ratio of 2.0% or more.

Our Environmental Goal 2030 aims to reduce CO2 emissions		Our Environmental Goal 2030 includes a commitment not to
(Scope 1 and 2) by 26% from 2018 levels, but our entire plan is		exceed the previous year's water consumption per unit of produc-
under review following the revision of the Japanese government's		tion. In 2021, our usage was 1,088,000 m3, which was lower than
CO2 reduction target announced in 2021. The results for 2021 were		the previous year's usage (1,153,000 m3 in 2020).
down 12% from 2018 and down 7.2% from the previous year (2020).

Progress on E-Vision 2030 Social and Environmental Value Targets

Contribution to ICAC5: Challenge to 14Å

Equity attributable to owners of the parent/		Interest-Bearing Debt / Debt-to-Equity Ratio
Ratio of equity attributable to owners of parent
(Shareholders' equity*5/Equity ratio)
(Billions of yen)	(%)	(Billions of yen)	(Times)

400.0						80.0	150.0						0.60
300.0					312.3	60.0	100.0						112.0
												0.40
200.0					43.4%	40.0							0.36
100.0						20.0	50.0						0.20
0						0	0						0
2017/3	2017/12	2018/12	2019/12	2020/12	2021/12		2017/3	2017/12	2018/12	2019/12	2020/12	2021/12
Equity attributable to owners of the parent (Shareholders' equity) (left scale)		Interest-bearing debt (left scale)	Debt-to-equity ratio (right scale)
Ratio of equity attributable to owners of parent (Equity ratio) (right scale)

The ratio of equity attributable to owners of parent as of December 31,		On December 31, 2021, the debt-to-equity ratio was 0.36 times, lower
2021 was 43.4%, down from the previous year, mainly due to an		than the level of 0.4 times-0.6 times (IFRS) targeted over the period of
increase in interest-bearing debt and the impact of the adoption of IFRS.		E-Plan 2022.

19 EBARA Group Integrated Report 2022

Ongoing R&D on the 2-3 nm (20-30Å) Technology Nodes

The Belgian independent nanotech semiconductor research institute Interuniversity Microelectronics Centre (imec) has published a logic device roadmap* to 1 nm (10Å) and beyond. imec is collaborating with companies around the world in development and is currently working on 2-3 nm (20-30Å) technology nodes. EBARA has concluded a Joint Development Program (JDP) agreement with imec and now collaborates with them in the area of Chemical Mechanical Polisher (CMP) development (see page 16 for details).

* We assume that by 2030, we will have 7Å in development and 14Å for commercial use.

*1. ROIC: IFRS:	Profit	attributable to	owners	of	parent ÷ [Interest-bearing	debt (average between beginning and end of period) + Equity attributable to owners
	of parent (average between beginning and end of period)]	debt (Average between beginning and end of period) + Shareholders' equity
JGAAP: Profit	attributable to	owners	of	parent ÷ [Interest-bearing
*2. ROE: IFRS:	(Average between beginning and end of period)]
Profit	attributable to	owners	of	parent /	Shareholders' equity (Average between beginning and end of period)
JGAAP: Profit	attributable to	owners	of	parent /	Equity attributable to owners of parent (Average between beginning and end of period)
*3. EBARA conducted a consolidation of common shares at a rate of one share for every five shares with an effective date of October 1, 2016. Figures for divi-
dends per share have been adjusted based on the assumption that this consolidation was conducted on April 1, 2015.
*4. When the annual dividend of ¥36.00 for the fiscal year ended March 31, 2017 (including an interim dividend of ¥6.00), is converted after the consolidation of
shares, it is equivalent to ¥60.00 per share, consisting of an interim dividend of ¥30.00 and a year-end dividend of ¥30.00. Accordingly, the total return ratio
is calculated based on an annual dividend of ¥60.00 per share.
*5. Shareholders' equity: Total net assets - (Subscription rights to shares + Non-controlling interests)
*6. EBARA CORPORATION (non-consolidated)
*7. EBARA CORPORATION (non-consolidated) and EBARA Group companies (consolidated, in Japan)
*8. The sum of Scope 1 and Scope 2 emissions for EBARA CORPORATION (non-consolidated) and EBARA Group companies (consolidated, in Japan). The target ref-
erence year is the fiscal year ended December 31, 2018, and annual values based on the Act on Rationalizing Energy Use are applied for the emission coefficient.
*9. Figures for the fiscal year ended March 31, 2017 are totals for EBARA CORPORATION (non-consolidated) and EBARA Group companies (consolidated, in
Japan). Figures include overseas Group companies from the fiscal year ended December 31, 2017.	20
							EBARA Group Integrated Report 2022