Fuji : Annual Report2020_Business Summary

2020

ANNUAL

REPORT

Business Summary

Fiscal year ended March 31, 2020

FUJI Brand

C o r p o r a t e M e s s a g e

The words "innovative spirit", signifying the spirit perpetuated by the company since it was established,

capture the feelings of FUJI CORPORATION.

It all began with "innovative spirit". The spirit to constantly attempt to create revolutionary technologies

that was cultivated from our long history and became our driving force.

C o r p o r a t e S l o g a n

Excite and Inspire

With foresight into the future, Fuji Group will work to satisfy the needs of people all over the world by continuing to

create new values and providing products and services that will excite and inspire our customers.

G r o w t h S t r a t e g y

Fuji Group will continue to deliver its unique products to the market on a timely basis,

while achieving new manufacturing heights by working to stay ahead of the times and innovate

with a focus on robotics technology, to make great strides as a robot manufacturer.

1

Message from the President

By providing solutions that excite our customers,

we will enhance the value of the Fuji brand.

FUJI CORPORATION (hereinafter referred to as the "Company") would like to present its Annual Report for the fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020).

In the fiscal year ended March 31, 2020, the global economy shifted to a decline as a result of successively occurring events that had significant impacts on the economy in Japan and abroad, such as the unstable international affairs including the unpredictable US-China trade conflict, the deteriorating situation in the Middle East centered on Iran, and the Brexit issue, and within Japan the devastations caused by typhoons centered on eastern Japan, as well as the global spread of the novel coronavirus disease (COVID-19) from the beginning of 2020.

In this rapidly changing environment, with the corporate vision to "Establish ourselves as the leading brand in each industry through innovations in production and sales and development of next generation type products while being at the forefront of the Digital Revolution", we actively implemented measures such as introducing to the market attractive products that look ahead to the future, and building a production system that pursues cost-benefit and efficiency as well as a sales system aiming to improve the market share and customer satisfaction. As a result, in the fiscal year ended March 31, 2020, we achieved the planned targets revised in February 2020.

In the Robotic Solutions Division, we set the goal of securing the top share in the market for electronic component mounters. This has already been achieved, but in order to further expand our market share, we are pushing forward with the development of new products and other initiatives with a greater sense of urgency than ever before.

It is undeniable that the Machine Tools Division was in a difficult situation, under the current unfavorable economy of the machine tools industry. However, we will continue to strive to develop new products in line with our sales strategy, and build an even more

efficient production system.

In the field of new businesses, we established a new company for the external sales of our linear motor products, and expanded our robot lineup. We will promote the creation of new businesses in the fiscal year ending March 31, 2021 by continuing to accelerate such development and generate innovation.

Finally, while it is a given that business enterprises shall work to achieve business growth, they are also required to fulfill their responsibility as public institutions of society. We will strive to create new value such as by solving social issues with robotics technologies and realizing a sustainable society that makes people happy.

President & COO

2

History

1959

Business launches with just 170 m2 of work space

On April 7, 1959, our founder,

Sakagami, and 13 colleagues established FUJI MACHINE MFG. CO., LTD. in order to deliver to the world machine tools that meet their own ideal. The single-function FS machine tool, introduced as the Company's rst own-brand product, took the industry by storm with its unprecedented productivity.

1959

1970

1971Enters into a new business eld to strengthen the business foundation

The Company leveraged its expertise gained in machine tools to actively strive to develop various automated assembly machines, in order to build a business base that could withstand economic uctuations. The technologies honed from this led to the development of electronic component assembly machines.

1978

Full-scale entry into the automatic electronics

1980

2012

assembly machine market

As various components were being used for electronics such as transistor radios, televisions, calculators, etc., the Company developed the BA board assembly machine. This was the rst of its kind in the world, capable of continually inserting a wide variety of electronic components with leads into printed circuit boards.

2003

A new concept in surface mount technology for electronic components! Debut of the NXT series

The scalable placement platform NXT was designed with a completely modular structure, enabling freedom when considering the machine layout. This was the birth of one of the greatest machines in the Company's history; a series that has continued to evolve to this day with a total of more than 90,000 units shipped.

2019

Announced NXTR

FUJI Smart Factory

Platform

Aiming to fully automate SMT production lines, the Company announced its high-end model NXTR equipped with the world's rst automatic feeder exchange system.

Expands overseas with the manufacturing prowess honed in the domestic market

Kunshan Fuji Machine Mfg. Co., Ltd. was established in Kunshan, Jiangsu, China, as the Group's rst overseas production base. It engages mainly in the production and sales of solder printing machines and NC automatic lathes to the Chinese market, which is the biggest market of our products.

1990 2013

Debut of modular production equipment DLFn, carrying on the DNA of the NXT series

The modular concept cultivated in NXT

development was adapted for use in machine tool development to create the modular production equipment, DLFn. This machine revolutionized

2000 machine tools, offering a new concept of manufacturing to the machine tool industry.

Establishment of	2016
new business models

The Company continued development in the quest to build a third business pillar to stand alongside machine tools and robotic electronic

2010 component mounters. Steady development efforts have been bearing fruit with the public stocker system Quist and the mobility support robot Hug.

2018 Toward creating new corporate value

The Company marked its 60th anniversary and changed its name to "FUJI CORPORATION". The Company acquired Fasford Technology Co., Ltd., a manufacturer of semiconductor-manufacturing equipment, to

2020 create a new business area by combining surface mount technology with technology for the back-end process of semiconductor manufacturing.

3

FUJI by the Numbers

						Net Sales		Number of
							Employees
						Fiscal year ended March 31, 2020
								As of March 31, 2020
		141billion yen	2,493people
						Equity Ratio		Overseas
¥				Sales Ratio
		As of March 31, 2020
				Fiscal year ended March 31, 2020

84 %90%

	Ratio of R&D
ROE	Investment to
As of March 31, 2020	Net Sales
	Fiscal year ended March 31,2020

• Market Capitalization

As of March 31, 2020

151billion yen

Accumulated Number of Countries Shipped to

As of March 31,2020

More than 60countries

Paid Vacation

Utilization Rate

Fiscal year ended March 31, 2020 *Non-consolidated basis

9.1%6%86%

Net sales by segment (millions of yen)	Net sales by region (millions of yen)
■ Robotic Solutions ■ Machine Tools ■ Others	■ Japan ■ China ■ Other Asia ■ United States ■ Other North America ■ Europe ■ Others

					140,968						140,968
		120,032	129,105		1.7%			120,032	129,105		1.3%
			1.5%	7.7%				1.2%	9.8%
			1.9%	12.1%					1.3%	12.0%	3.1%
							6.4%
			11.5%						11.2%	4.8%
86,642	86,397					86,642 2.0%	86,397 1.1%		5.2%	11.2%	23.2%
					11.2%
1.4%		1.5%				12.0%	11.4%		10.2%	20.9%
16.9%		12.7%
				4.2%
						4.7%
				86.4%	90.6%	14.3%	12.5%
			86.6%		12.2%	12.0%				45.7%
							44.6%
									38.0%
81.7%		85.8%				37.1%	45.1%
						17.7%	13.7%		16.3%	11.9%	10.5%
FYE 2016.3	2017.3	2018.3	2019.3		2020.3	FYE 2016.3	2017.3	2018.3	2019.3		2020.3

Operating prot /Operating prot ratio

• Operating profit (millions of yen) ● Operating profit ratio (%)

Prot attributable to owners of parent Net prot ratio

• Profit attributable to owners of parent (millions of yen) ● Net profit ratio (%)

13.7	11.3	19.0	17.9	13.9
		22,827	23,107	19,572
11,902	9,794
FYE 2016.3	2017.3	2018.3	2019.3	2020.3

		14.6	13.1	10.6
8.4	8.2
		17,524	16,855	14,964
7,237	7,055
FYE 2016.3	2017.3	2018.3	2019.3	2020.3

4

Management Structure: Board Members

Chairman & CEO

Nobuyuki Soga

1975 Entered the Company

2007 Board Member, Executive Officer; General Manager, President's Office;

General Manager, Human Resources Department

2008 Board Member, Managing Executive Officer

2009 President & CEO

2019 Chairman & CEO (To present)

President & COO

Shinsuke Suhara

1981 Entered the Company

2008 Executive Officer; Deputy General Manager,

Electronics Assembly Equipment Division

2010 Board Member, Executive Officer

2012 Board Member, Managing Executive Officer

2013 Board Member, Managing Executive Officer; General Manager, Electronics Assembly Equipment Division

2015 Board Member, Senior Managing Executive Officer; General Manager, Electronics Assembly Equipment Division

2018 Board Member, Vice President, Executive Officer; General Manager, Robotic Solutions Division

2019 President & COO;

General Manager, Robotic Solutions Division

2020 President & COO (To present)

Board Member,

Managing Executive Officer

Hajime Ezaki

2003 Entered the Company

2011 Executive Officer; General Manager, Corporate Planning Office

2015 Board Member, Executive Officer; General Manager, Marketing and Strategic Planning Department

2018 Board Member, Executive Officer;

Deputy General Manager, Machine Tools Division; General Manager, Sales Department

2019 Board Member, Managing Executive Officer; Deputy General Manager, Machine Tools Division; General Manager, Sales Department

2020 Board Member, Managing Executive Officer (To present); General Manager, Machine Tools Division (To present); General Manager, Sales Department (To present)

Representation of Other Companies

Chairman, Fuji Machine America Corporation Chairman, Kunshan Fuji Machine Mfg. Co., Ltd.

		Board Member,				Board Member,				Board Member,
		Managing Executive Officer			Executive Officer			Executive Officer
		Masaaki Sugiura			Mitsuji Tatsumi			Junichi Kano
1986	Entered the Company	2009	Entered the Company	1987	Entered the Company
2015	Executive Officer;	2012	Executive Officer;	2017	Executive Officer;
	General Manager, Sales Department 1,		General Manager, Accounting Department		General Manager, President's Office
	Electronics Assembly Equipment Division	2014	Board Member, Executive Officer (To present);	2020	Board Member, Executive Officer (To present);
2018	Board Member, Executive Officer;		General Manager, Accounting Department		General Manager, Business Administration
	Deputy General Manager, Robotic Solutions Division;		(To present)		Department (To present)
	General Manager, Sales Department 1
2020	Board Member,
	Managing Executive Officer (To present);
	General Manager,
	Robotic Solutions Division (To present)

Representation of Other Companies

Chairman, Fuji Machine China Co., Ltd.

Chairman, FUJI INDIA CORPORATION PRIVATE LIMITED

		Outside Board Member				Outside Board Member				Outside Board Member
		Nobuko Kawai			Hideaki Tamada				Shoji Mizuno
1992	Registered as a lawyer	1970	Joined SANYO Electric Co., Ltd.	1977	Joined MARUBUN CORPORATION
	Joined Nishimura & Sanada Law Office	1995	President, SANYO Energy (EUROPE) Corporate GmbH	2005	CEO and Representative Director,
1998	Established Nobuko Kawai Law Office	2006	President, SANYO EUROPE Ltd.			Marubun Semicon Corporation
	(Representative) (To present)	2011	Advisor, TONG SAN ELECTRIC CO., LTD.	2013	Chief Executive Officer, Representative Director,
2002	Contract lawyer, The Japan Center for Settlement of	2019	Outside Board Member of the Company (To present)			MARUBUN CORPORATION
	Traffic Accident Disputes (To present)				2020	Vice President, MARUBUN CORPORATION
2009	Vice Chairman, Aichi Bar Association						Outside Board Member of the Company (To present)
2012	Professor, Nagoya University Graduate School of Law
2015	Outside Board Member of the Company (To present)
2017	Outside Director, IBIDEN CO., LTD. (To present)

Representation of Other Companies

Representative, Nobuko Kawai Law Office

Outside Director, IBIDEN CO., LTD.

5

Management Structure: Audit & Supervisory Board Members and Executive Officers

Full-time Audit &

Supervisory Board Member

Yoshiaki Kuroyanagi

1989 Entered the Company

2007 General Manager,

Management & Planning Department,

Electronics Assembly Equipment Division

2010 General Manager,

Production Management Department,

Electronics Assembly Equipment Division

2011 Director, EDEC LINSEY SYSTEM Co., Ltd.

2013 General Manager, Planning Department,

Electronics Assembly Equipment Division

2015 General Manager, Internal Audit Division

2018 Full-time Audit & Supervisory Board Member

(To present)

Senior Executive Officer

Kimihiko Yasuda

1980 Entered the Company

2004 General Manager, Control Engineering Department, LCD Assembly Equipment Division

2012 Executive Officer; General Manager, Technology Development Department

2013 Executive Officer;

President & CEO, EDEC LINSEY SYSTEM Co., Ltd.

2017 Senior Executive Officer;

President & CEO, EDEC LINSEY SYSTEM Co., Ltd.

2020 Senior Executive Officer (To present);

General Manager, Development Center (To present)

Outside Audit &

Supervisory Board Member

Shigeki Matsuda

1986 Joined Marunouchi & Co.

(Currently Deloitte Touche Tohmatsu LLC)

1990 Registered as a Certified Public Accountant

1993 Registered as a Certified Tax Accountant

1994 Established Matsuda Public Accounting Firm (Representative) (To present)

2004 Established Aiki Tax Accounting Corporation (Representative) (To present)

2013 Outside Audit & Supervisory Board Member of the Company (To present)

2015 Outside Audit & Supervisory Board Member, Roland DG Corporation (To present)

Representation of Other Companies

Representative, Matsuda Public Accounting Firm Representative, Aiki Tax Accounting Corporation

Outside Audit & Supervisory Board Member, Roland DG Corporation

Senior Executive Officer

Masaki Katayama

1981 Entered the Company

1982 Seconded to European Representative Office

1996 Seconded to Fuji America Corporation

2006 General Manager, Quality Assurance Department,

Electronics Assembly Equipment Division

2011 Executive Officer; General Manager, Development Evaluation Department, Electronics Assembly Equipment Division

2012 Executive Officer; General Manager,

Material Procurement Division

2016 Senior Executive Officer (To present);

General Manager, Procurement Division (To present)

Outside Audit &

Supervisory Board Member

Kayoko Yamashita

1992 Joined Chuo Shinko Audit Corporation

1996 Registered as a Certified Public Accountant

1997 Joined Miyake Certified Public Accountant Office

2006 Established Yamashita Certified Public Accountant Office (Representative) (To present)

2008 Registered as a Certified Tax Accountant

2015 Outside Audit & Supervisory Board Member of the Company (To present)

Outside Audit & Supervisory Board Member, Sotoh Co., Ltd. (To present)

Representation of Other Companies

Representative, Yamashita Certified Public Accountant Office Outside Audit & Supervisory Board Member, Sotoh Co., Ltd.

Senior Executive Officer

Hiroshi Katsumi

1983 Entered the Company

2008 General Manager, Machine Engineering Department, Electronics Assembly Equipment Division

2012 General Manager, Development Evaluation Department, Electronics Assembly Equipment Division

2015 Executive Officer; Plant Manager, Okazaki Plant; General Manager, Production Management Department, Electronics Assembly Equipment Division

2018 Senior Executive Officer; Plant Manager, Okazaki Plant; General Manager, Production Department 2, Robotic Solutions Division

2020 Senior Executive Officer (To present);

Deputy General Manager, Robotic Solutions Division (To present); Plant Manager, Okazaki Plant (To present); General Manager, Inspection Department (To present)

Representation of Other Companies

President & CEO, FUJI LINEAR CORPORATION

	Executive Officer			Executive Officer
	Takatoshi Suzuki		Hiroshi Murakami

Executive Officer

Kazutoshi Sakai

1986 Entered the Company

2009 General Manager, Human Resources Department; General Manager, President's Office

2010 General Manager,

Management & Planning Department, Electronics Assembly Equipment Division

2013 General Manager, President's Office

2015 General Manager, President's Office;

General Manager, Human Resources Department

2017 General Manager, General Affairs Department

2018 Executive Officer (To present); General Manager,

General Affairs Department (To present)

2016 Entered the Company

2017 General Manager, Information System Department

2020 Executive Officer (To present);

General Manager, Sales Engineering Department, Robotic Solutions Division (To present)

1985 Entered the Company

2009 General Manager, Quality Assurance Department, Machine Tools Division

2010 General Manager, Management & Planning Department, Machine Tools Division

2012 General Manager, Production Management Department, Machine Tools Division

2014 Executive Officer; General Manager, Production Management Department, Machine Tools Division

2015 Executive Officer; Deputy General Manager, Machine Tools Division; General Manager, Production Management Department

2020 Executive Officer (To present);

Deputy General Manager, Machine Tools Division (To present); General Manager, Production Management Department (To present); General Manager, Production Department (To present)

6

Business Summary Robotic Solutions Division

Board Member, Managing Executive Officer; General Manager, Robotic Solutions Division

Masaaki Sugiura

We will aim to increase our market share by expanding product lineups and promoting automation proposals

In the fiscal year ended March 31, 2020, sales of smartphones and demand for equipment for the 5G next-generation communication protocol, particularly in Asian markets such as China, were vigorous. Furthermore, net sales for the segment reached a record high of 127,763 million yen, partially due to contribution of the effects of the consolidation of Fasford Technology Co., Ltd., which was made a subsidiary in August 2018. However, operating profit was 23,354 million yen (down 6.6% year on year) due to factors such as the further intensification of price competition.

Looking toward the near future, there are increasing uncertainties regarding the future of the global economy, such as the global spread of COVID-19 and unstable international situations centered on the US-China trade conflict. We must build a sturdy business structure that is not affected by external factors even under such circumstances. In June 2019, we announced our new product NXTR equipped with the world's first automatic component supply system, attained by pursuing further automation while also continuing the modular concept, which is a feature of our current leading product, NXT III. Additionally, using the core software, Nexim, as a base, we accelerated the establishment of "FUJI Smart Factory", which supports the introduction of IoT in customers' production lines, and are developing businesses that can bring excitement to our customers with both products and services.

Market environment and results

for the fiscal year ended March 31, 2020

•Sales of equipment for smartphones and equipment for the 5G next-generation communication protocol, centered on China, increased significantly

•Capital investments, particularly automotive-related capital investment in Japan, Europe and Americas, were weak

•Announced NXTR, a new product that looks ahead to the future of smart factoriesWhat are electronic component mounters?

Product features/strengths

	Our lives are surrounded by a variety of electronics,
	such as automobiles, consumer electronics and
FUJI Smart Factory Platform	smartphones.
A mounter is equipment that places electronic
	components, which differ in size and shape, onto
	the printed circuit boards that are essential for
	these electronics. Fuji has numerous high-speed,
	high-accuracy mounter products, such as the NXT
This is a high-end model that realizes the "three zeros concept" of "zero placement defects", "zero	series in particular, which boasts industry-
leading area productivity.
machine operators" and "zero machine stops", while continuing the modular concept of the NXT series.

Net sales/Orders							127,763 136,585
■ Net sales (millions of yen)	■ Orders (millions of yen)
					104,003	105,733	111,536	107,632
70,787	68,408	74,105	80,982
FYE	2016.3	2017.3	2018.3	2019.3	2020.3

Operating prot/Operating prot ratio

■ Operating profit (millions of yen) ● Operating profit ratio (%)

20.5	19.6		22.4
24.2		18.3
		25,185	25,017	23,354
14,527	14,546
FYE 2016.3	2017.3	2018.3	2019.3	2020.3

7

Business Summary Machine Tools Division

Board Member, Managing Executive Officer; General Manager, Machine Tools Division

Hajime Ezaki

We will increase the value of our businesses by strengthening collaboration in the Fuji Group as a whole

In the fiscal year ended March 31, 2020, net sales for the segment were 10,840 million yen (down 30.8% year on year) and the operating loss was 637 million yen as a result of the impact of weak automotive sales, particularly in the Chinese and North American markets.

Going forward, we feel certain that capital investments for automation and streamlining will increase in the medium to long term, despite concerns that the weak economy will last longer due to the impact of the spread of COVID-19. In order to create a business structure that generates stable profit in the coming period of market recovery, we will strengthen our manufacturing capabilities.

At the new production building at the Toyota Plant which commenced operations from May 2019, as the mother factory of the Fuji Group, we are building a highly efficient production system that utilizes IoT. Furthermore, to increase competitiveness in the Chinese market, we began local production of CSD300 II, our new product that was announced in 2019, at Kunshan Fuji Machine Mfg. Co., Ltd. (Jiangsu, China).

We will work as one to be worthy of our customers' trust by realizing higher quality and support.

Market environment and results

for the fiscal year ended March 31, 2020

•Weak automotive-related capital investments in Chinese and North American markets

•Deteriorating economic situation in Japan and overseas, which includes the impact of the spread of COVID-19

•Production of new machine tool products commenced at Kunshan Fuji Machine Mfg. Co., Ltd.

What are machine tools?

Product features/strengths

Highly accurate machined parts for use in automobiles and industrial machinery are

essential for society. These are manufactured by

Front facing twin spindle lathemachine tools often called "mother machines" which are used to cut and process metal materials.

Equipped with a high-speedthree-axial gantry

Fuji has a lineup of various machine tools, focusing on NC lathes primarily for the automotive industry.

type robot, this is a compact front facing twin spindle lathe, which features high rigidity sliding capable of heavy-duty cutting and excellent thermal displacement performance.

Net sales/Orders

Operating prot/Operating prot ratio

■ Net sales (millions of yen) ■ Orders (millions of yen)

■ Operating profit (millions of yen) ● Operating profit ratio (%)

14,623				15,389	15,661	14,866
13,080			13,798						1,662
	11,777
			10,997				10,840			1,017
											10.6
								7,723	614		7.4
									4.2	-713		-637
										-6.5		-5.9
FYE	2016.3	2017.3	2018.3	2019.3	2020.3	FYE 2016.3	2017.3	2018.3	2019.3	2020.3

8

Business Summary New Business

Senior Executive Officer;

General Manager, Development Center

Kimihiko Yasuda

We will endeavor to create innovative new business with robotics technology as our core

In addition to the further evolution of existing business and technologies, the creation of next- generation businesses is essential for Fuji to continue its growth as a robotics company. Using technologies cultivated over the many years, we introduced a number of innovative products into the market, such as the compact multijoint robot "SmartWing", the atmospheric pressure plasma unit "Tough Plasma", the mobility support robot "Hug", and the public stocker system "Quist". As part of our efforts to enhance the lineup to respond to market needs, in the fiscal year ended March 31, 2020, in addition to introducing a new model of "Hug" into the market, we also unveiled a new model of "SmartWing" as a reference exhibit at trade shows. Additionally, we strove to develop the following new businesses that look ahead to the future:

• Established FUJI LINEAR CORPORATION, which develops, manufactures, and sells linear motors, in February 2020
• Commenced operation of "e-Sys", a platform to support the business of robot system integrators
• Commenced trial production of compact electronic equipment that utilizes "FPM-Trinity", an electronic device printer
• Currently developing a medical robot jointly with ASAHI INTECC CO., LTD.

By accelerating such development, we are promoting the deep cultivation and strengthening of core technologies as well as the creation of innovative businesses, and increasing the value of the Fuji brand.

Compact multijoint robot	Atmospheric pressure plasma unit
By using coordinate correction technology and	By irradiating with plasma before painting or
vision data, teaching with physical guidance, an	applying adhesive, the bonding strength of
operation which is necessary for conventional	adhesive and paint is improved. Heat-sensitive
robots, is no longer	materials can be supported through low temperature
required . The time	processing. This contributes to developing parts
required for startup is	and materials with various characteristics.
greatly reduced.

Mobility support robot

From bed to wheelchair, or wheelchair to toilet seat; this support robot assists when needing to transfer to a sitting position or in situations where standing for a period of time is required, such as when getting dressed. Fuji's cutting edge technology is applied to a considerate robot

design that has the potential to deliver a paradigm shift in the style of nursing care.

Public stocker system

This next-generation delivery locker system enables users to receive goods ordered at online shopping sites or online supermarkets through making full use of IoT technology. This allows people to receive packages without stress regardless of their day to day schedule.

Intellectual Property Strategy

Intellectual property strategy to strengthen the global competitiveness of our businesses

The Company implements intellectual property activities that stand on three pillars: business strategy, technology strategy, and intellectual property strategy. We also actively apply for patents both in Japan and overseas. As a result, our patent registrations exceeded 800 in the fiscal year ended March 31, 2020. In the fiscal year ending March 31, 2021, we will continue to develop an intellectual property strategy that leads to strengthening competitiveness in order to lay out even stronger patent networks for preceding automation technologies, and to establish de facto standards that support our growth strategy.

Numbers of patent registrations		811
■ Japan ■ Overseas
						619
					508		439
				391	184	298
		282
			129
	186		56				372
	34	226	262	324	321
	152
FYE	2015.3	2016.3		2017.3	2018.3	2019.3	2020.3

9

Capital Strategy

Board Member, Executive Officer;

General Manager, Accounting Department

Mitsuji Tatsumi

We are committed to continuing strategic investment directed toward growth and stable return of profits to our shareholders

We are working to establish a leading brand in the industry through production and sales innovation in addition to a high level of investment in R&D, and we are aiming to increase our corporate value through strategic investments in peripheral and new businesses as well as active capital investment toward future growth. In principle, capital demands for this type of business development are funded with the Company's own funds.

Furthermore, we consider the continuous return of profits to shareholders as one of the most important management measures, and will improve capital efficiency and maintain stable dividends.

With regard to strategic investments for future growth, large-scale investments such as those for constructing a new plant and acquiring the shares of a manufacturer of semiconductor manufacturing equipment were made from the fiscal year ended March 31, 2018 until the fiscal year ended March 31, 2019, but investments were mostly limited to those for upgrading machining equipment in the fiscal year ended March 31, 2020.

We will also pay attention to holding a large cash position to prepare for unforeseeable situations because there are concerns about risks of a credit crunch in the financial market if the impact of the current spread of COVID-19 causes economic activities to stagnate across the world for a more protracted time.

Moreover, we consider the acquisition of treasury stock an effective measure for improving capital efficiency, and will consider appropriate and flexible implementation, taking into account factors such as our performance and trends in the stock market and the economy.

Capital investments/R&D									11,223
■ Capital investments (millions of yen)
■ R&D (millions of yen)																8,642	8,804
										8,349			7,993
6,613	6,175	6,789	6,765
5,641

FYE

2016.3

2017.3

2018.3

2019.3

2020.3

IR activities

We strive to distribute profits appropriately and to disclose information in an appropriate, fair and timely manner in order to build long-term, stable relationships with our shareholders and investors.

We have established a channel for dialogue with shareholders and investors, which is actively conducted by the President, officers in charge, and other relevant personnel.

Our IR activities aim to ensure good two-way communication on management strategy, business strategy, financial information, etc., emphasizing fairness, accuracy, and continuity, to realize constructive dialogue.

Fiscal year ended March 31, 2020

Activities
Number of	Number of
	times	participants
Participate in IR events for individual investors	2	387
Hold quarterly financial result briefings for analysts and institutional investors	4	150
Hold meetings with analysts and institutional investors on an individual basis as needed	170	219
Participate in conferences for overseas institutional investors, hold meetings	2	31

Cash dividends and prot per share

• Cash dividends per share (yen) ● Profit per share (yen)

			195.04	184.52
				163.81
		76.19		50	50
	74.13	40
	28	30
FYE	2016.3	2017.3	2018.3	2019.3	2020.3
Payout	37.8%	39.4%	20.5%	27.1%	30.5%
Ratio

10

Sustainability Management

We will continue to contribute to the creation of a prosperous society by promoting manufacturing with ESG in mind.

Since its establishment in 1959, the Fuji Group has delivered products that support manufacturing sites around the world, such as machine tools and electronic assembly equipment, based on the guiding precept, "We will endeavor to work hard in research and development to provide excellent techniques to respond to customer confidence".

Each and every one of us approach day-to-day corporate activities while valuing the strong bonds with shareholders, customers, business partners, local communities, etc.

The spirit of "SDGs", initiatives for which have accelerated around the world recently, resonates with the "creation of new value and markets that contribute to the creation of a prosperous society", which the Company has pursued persistently since establishment. Through these business activities, the Group will fulfill its corporate social responsibility with an eye toward sustainable development together with society.

Environment

Initiatives for the environment

Basic environmental plan

Positioning environmental preservation activities as an important management issue, we pursue such activities company-wide in order to leave a rich and beautiful natural environment for the next generation. We consider the environment in carrying out our business activities, recognizing that preservation of the global environment is one of the most important issues shared by humanity.

Five-yearenvironmental control plan (fiscal year ended March 31, 2017 to fiscal year ending March 31, 2021)

Activities	Targets for the financial year ending March 31, 2021
	Improving production efficiency and awareness-raising and promotion
Measures to prevent global	related to energy-saving activities
warming	Reduction of energy consumption per unit by 1%
	(compared to fiscal year ended March 31, 2020)

Promotion of resource recycling Awareness-raising and promotion related to resource-saving activities

Measures for products

Develop environmentally friendly (energy-saving,space-saving) products

Trend of energy consumption per unit

(Using the figure from fiscal year ended March 31, 2016 as a benchmark)
(%)	Headquarters	Toyota Plant	Okazaki Plant	118.2
120
110
100.0		100.8	98.0
100
			100.7
		98.5
			94.4
				86.8
90
		90.0	89.9	89.5
80					82.1	82.0
70	2016.3	2017.3	2018.3	2019.3	2020.3

Developing low energy products

CP643

NXT II

NXT III

0

1

2

3 （kWh）

The graph above shows the amount of electricity required to pick and place 10,000 electronic components. In comparison with the NXT II, an older machine, the NXT III can produce the same volume using 74% of the electricity. Compared to the CP-643, a machine of a previous series, the NXT III can produce the same volume using 12% of the electricity.

Topics Endorsement of "White Logistics" promotion activities

We endorse the intent of the "White Logistics" movement, which are promoted by the Ministry of Land, Infrastructure, Transport and Tourism, the Ministry of Economy, Trade and Industry, and the Ministry of Agriculture, Forestry and Fisheries, and made a declaration of voluntary action to realize a sustainable logistics environment. To create an environment where logistics operators can work comfortably while keeping in mind the preservation of the global environment, we are promoting the active utilization of reusable shipping containers with the aim of improving the quality of logistics and reducing packing materials.

Furthermore, by installing the public stocker system "Quist", developed by the Company as one of its unique initiatives, at offices and commercial facilities, we are reducing parcel redeliveries for delivery service providers and contributing to the reduction of CO2 emissions.

11

Sustainability Management

Society In continuing our corporate activities, we will aim for development in harmony with our stakeholders as a member of society.

Work style reforms and the promotion of health for employees

Gender and diversity

We have enhanced our system to support various working styles and to enable employees to do their job as well as handle childcare and nursing care, through initiatives including childcare/nursing care leave, reduced work hours for childcare/ nursing care, and a system to take days off to take care of a sick family member or for nursing care needs. In addition, we have put in place a system of volunteer vacation days for employees who engage in social contribution activities. We are also striving actively to help employees maintain a work-life balance by setting each Friday as a Company-wideno-overtime day.

Human resources development

We are committed to junior and mid-career employee education. At the Sokaijyuku training course that engineering employees take in their first year with the Company before they are assigned to a division, by acquiring knowledge outside their area of

specialization and developing a robot in a practical way, they feel the pain that goes into creation as well as the sense of achievement of developing something, as part of their experience before starting work. Leadership training in which employees acquire skills such as how to lead an organization and how to communicate smoothly, and global training to nurture employees who can work successfully overseas, are also part of our efforts to enhance educational opportunities within the Company.

Health and productivity

In fiscal 2018 we made the Fuji Health and Productivity Declaration, which ties in to evaluations and improvements by building a system that promotes healthy business and makes the results of activities visible. As a result, we were recognized as one of the 2020 Certified Health & Productivity Management Outstanding Organizations (large enterprise category).

Coexistence and education with local communities

As members of the local community, we will engage in various activities with the aim of being the "Fuji that is known and loved by everyone in the community".

We are operating our after school English program "teracoya THANK" for local

elementary school children where they use English to learn science, fostering future global talents. Furthermore, we support local festivals, cultural activities, etc.

Governance

Initiatives for governance

Basic concept			Corporate governance system
The Group views working to create higher corporate value for
Number of Board Members	9	(including 3 Outside Board Members)
shareholders, customers, business partners, and employees to be the
Number of Audit & Supervisory Board Members	3	(including 2 Outside Audit & Supervisory Board Members)
most important issue. Accordingly, the Group is working to establish
Number of Independent Board Members	5
and enhance fair and transparent management systems, an
organizational structure that can respond to changes in the	Number of Board of Directors' meetings held in a year	13	(planned)
management environment promptly and accurately, and to strengthen	Term of office of Board Members (years)	1
its risk management and compliance system.	Adoption of an executive officer system	Yes
				Number of Executive Officers	10
Composition of corporate governance system				As of June 26, 2020
				General Meeting of Shareholders
Election/Dismissal		Election/Dismissal		Election/Dismissal

Accounting Auditor

Audit & Supervisory Board

Outside Board Member

Board of Directors

(Cooperation)

Audit

Audit

Selection/Dismissal/Supervision

Report

(Business execution/Risk management system/Internal control system)

President

Instruction/Order

Instruction/Order

Instruction/Order

AuditingInternal Department

(Risk management system)

(Business execution)

Risk Compliance Committee

Operations Executive

Board meeting

(Internal control system)

(Audit)

Quality Control

Environmental Control

Health and Safety

Internal Control Council

Committee

Committee

Committee

Divisional meeting

Subsidiaries

12

Company Profile

Overview

Name	FUJI CORPORATION	Listed Markets	First Section of the Tokyo Stock Exchange,
Headquarters	19 Chausuyama, Yamamachi, Chiryu,		First Section of the Nagoya Stock Exchange
Main Business	Manufacturing and sales of electronic assembly
	Aichi, Japan
		equipment and machine tools
Established	April 1959	Number of Employees	Consolidated 2,493
Capital Stock	5,879 million yen		Nonconsolidated 1,689 (as of March 31, 2020)

Status of Shares (as of March 31, 2020)

Total number of shares authorized to be issued	390,000,000		Classification of shareholders
Total number of shares issued	97,823,748			Shareholding ratio (%)
Number of shareholders	9,083
		■ Financial Institutions	32.9
Major shareholders (Top10)
		■ Overseas Investors, etc.	25.3
	Number of shares held	Shareholding
Name	(thousands of shares)	ratio (%)	■ Individuals and Others	17.5
Daido Life Insurance Co.	6,280	6.87	■ Other Companies	16.2
The Master Trust Bank of Japan, Ltd. (Trust account)	5,781	6.32	■ Securities Companies	1.5
MUFG Bank, Ltd.	4,272	4.67	■ Treasury Stock	6.6
Japan Trustee Services Bank, Ltd. (Trust account)	3,806	4.16
Fuji customers stock ownership	2,982	3.26
NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS	1,913	2.09	Mascot Character
NON LENDING 15 PCT TREATY ACCOUNT
		FUJILALA is the Company's
Japan Trustee Services Bank, Ltd. (Trust account 5)	1,731	1.89
mascot character, created
The Bank of Nagoya, Ltd.	1,554	1.70	as part of its aim to be a
c o m p a n y t h a t i s w e l l
Mitsubishi UFJ Trust and Banking Corporation	1,483	1.62	received by everyone. Nice
JP MORGAN CHASE BANK 385151	1,467	1.60	to meet you!

Notes: 1. Shares held by the Company as treasury shares (6,479,108 shares) are excluded from the top ten shareholders listed above.

2. The‌ number of shares held is rounded down to the nearest thousand, and the shareholding ratio is calculated by deducting treasury shares held by the Company and rounded down to two decimal places.

Consolidated Subsidiaries

Company name		Location	Established
ADTEK FUJI Co., Ltd.		Aichi, Japan	April 1977
EDEC LINSEY SYSTEM Co., Ltd.		Aichi, Japan	November 1992
Fasford Technology Co., Ltd.		Yamanashi, Japan	March 2015
FUJI LINEAR CORPORATION		Aichi, Japan	February 2020

Company name	Location	Established
Fuji America Corporation	U.S.	April 1970
Fuji Machine America Corporation	U.S.	November 1994
FUJI EUROPE CORPORATION GmbH	Germany	November 1991
Tower-Factory GmbH	Germany	February 2013
Fuji Machine China Co., Ltd.	China	November 2007
Kunshan Fuji Machine Mfg. Co., Ltd.	China	January 2012
Fuji Do Brasil Maquinas Industriais Ltda.	Brazil	November 1995
FUJI INDIA CORPORATION PRIVATE LIMITED	India	December 2019

Editorial	The aim of this report is to make the Group's management strategies and financial information easy	Period	Fiscal year ended March 31, 2020
to understand for stakeholders (including shareholders, customers, business partners, employees,
Policy	Covered	(from April 1, 2019 to March 31, 2020)
and local communities that have a diversity of interests in the Company).

13