Taiyo Yuden : INTEGRATED REPORT 2023(10781KB)

TAIYO YUDEN CO., LTD.

INTEGRATED REPORT 2023

2 TAIYO YUDEN INTEGRATED REPORT 2023

Our Profile

TAIYO YUDEN INTEGRATED REPORT 2023

3

We are a global manufacturer of electronic components that develops and manufactures products indispensable to people's lives

TAIYO YUDEN develops, manufactures, and sells electronic components for use in a range of

electronic equipment that are essential to people's lives, including smartphones and

Multilayer ceramic capacitor (MLCC)

Global market share

No.3

(As of FY2022 (According to in-house research))

Mass production of the

world's smallest MLCC

(0.25×0.125mm)

other communication equipment, automobiles, and IT infrastructure/industrial equipment. The Company boasts advanced technological capabilities, continuing to produce the world's smallest MLCC, and supplies its products globally.

Reference: No. of MLCCs used in electronic equipment (As of December 2022 (According to in-house research))

Per smartphone*	Per electric vehicle
Approx.1,500	Approx.10,000
*High-end model

Operating profit			GHG absolute emissions
			reduction rate (Compared to FY2020)
FY2017	FY2022
20.2 billion	31.9billion			-18.3%
(8.3%)	(10.0%)				(FY2022)

Operating margin is shown in parentheses.

Net sales

¥ 319.5billion

(FY2022)

Overseas sales ratio

89.7%

(FY2022)

Ratio of overseas production

64.7%

Sales composition ratio by region (FY2022)

Other

countries and

regions

53.7%

China

36.0%

Japan

10.3%

Accident frequency rate*

0.07

(FY2022)

*The accident frequency rate is the number of fatalities and injuries caused by work-related accidents per one million actual working hours and represents the frequency of accidents. The average for the Japanese manufacturing industry for FY2022 was 1.25

Rate of newly recruited female graduates

35%

(As of April 1, 2023)

(FY2022)

4 TAIYO YUDEN INTEGRATED REPORT 2023

Contents

2 Our Profile

Section 1Section 2

Value	Strategies for
Creation	the Creation of
Story	Value
8	Mission, Management Philosophy, Vision	32	Smart Product Development System
10	History of Value Creation	34	Market Environment and Business Development
12	TAIYO YUDEN's Value Provision	36	Value Creation Model
14	Business Activities that Provide Value	38	At a Glance
16	Materiality	42	R&D

1. Medium-termManagement Plan 2025 (FY2021-FY2025)

1. Financial and Non-financial Highlights

1. Message from the President

1. Message from the Officer in charge of Finance

Section 3

Foundation

Underpinning

Value Creation

48 Feature 1: Dialogue Between the Chairperson of the Company and the Chairperson of the Nomination Committee On the Appointment of a New President

51 Feature 2: Roundtable Discussion with the Outside Directors Towards the Sustainable Improvement of

TAIYO YUDEN's Value

1. Executives

1. ESG
   56 (G) Governance
   63 Compliance and Risk Management
   66 Sustainability
   67 (E) Environmental Activities

69 Efforts to Address Climate Change

75 Efficiently Using Resources and Helping to Build a Recycling-Based Society

77 (S) Social Activities

81 Human Resources Strategy

87 Stakeholder Communication

TAIYO YUDEN INTEGRATED REPORT 2023

5

Corporate Data

1. 11-yearFinancial and Non-financial Summary

1. Financial Review

1. Consolidated Financial Statements

100 ESG Data

1. External Evaluation
2. Corporate Data
3. Stock Information

22 Message from the President	27 Message from the Officer in charge	38 At a Glance	48 Dialogue Between the Chairperson	51 Roundtable Discussion with the
	of Finance		of the Company and the Chairperson	Outside Directors
			of the Nomination Committee

76 Message from the Officer in charge of Safety and Environment

6 TAIYO YUDEN INTEGRATED REPORT 2023

On the Publication of the Integrated Report 2023

TAIYO YUDEN began its five-yearmedium-term management plan 2025 in FY2021 and currently we are standing at the halfway point of the third year of the plan. Furthermore, as a consequence of the replacement of the President in June 2023, we are working on achievement of this plan under a new management structure.

In the Integrated Report, we explain the value creation activities of TAIYO YUDEN centered on initiatives for the medium -term management plan 2025 which aims for greater corporate value as both greater economic value and greater social value. This time we have worked to expand the content of the report, including the At a Glance section, the environment, human rights, our human resources strategy, etc. based on the feedback we have received through dialogue with our stakeholders. Furthermore, we also introduce our approach concerning the succession of the President. In preparing the report, the President and Chief Executive Officer, the officer in charge of corporate planning, and other members of management and each division collaborated to ensure that a proper process was followed. We hope that reading it will help deepen your understanding of the TAIYO YUDEN Group.

We will continue to place value on the dialogue we have with our stakeholders and strive to enhance both our information disclosure and transparency.

October 2023

Director, Executive Operating Officer

Tomomitsu Fukuda

Departments involved in the publication of the Integrated Report 2023 (in alphabetical order)

TAIYO YUDEN CO., LTD.

Accounting Department, Diversity Development Department, General Affairs Department, Global Logistics Department, Human Resources Department, Human Resources Planning Department, Intellectual Property Department, Legal Department, Management Information System Department, President's Office, Procurement Management Department, Public Relations Department, and Research and Development Laboratory

Scope of Report

This report covers (as of March 31, 2023) 33 companies, comprising TAIYO YUDEN, 11 domestic subsidiaries and 21 overseas subsidiaries.

Reference Guidelines

For editing purposes, reference was made to the International Integrated Reporting Framework recommended by the IFRS Foundation and the Guidance for Collaborative Value Creation provided by the Ministry of Economy, Trade and Industry. For ESG-related information, we referred to the Ministry of the Environment's Environmental Reporting Guidelines (2018 version). We also used the GRI Standards as a reference guideline.

Our GRI Standard Comparison Table

Information Disclosure Structure

can be viewed on our website:

Value creation story

https://www.yuden.co.jp/or/company/

sustainability/misc/GRI/

Financial

Integrated Report

Non-financial

For details on TAIYO YUDEN's financial and

information

information

Information for

Sustainability/

non-financial information, please visit our website at:

shareholders and investors

ESG information

Investor Relations

Securities Report

Safety & Environmental

https://www.yuden.co.jp/or/ir/

Financial Results, Presentations

Report

Website

Corporate Governance

Shareholder and Investor

Report

Sustainability

Relations

Website

Sustainability

https://www.yuden.co.jp/or/company/

sustainability/

Comprehensive nature

Notes	Disclaimer
• In this report, the fiscal year will be displayed as follows.	This report is intended to provide information about the business performance
Example: April 1, 2022 to March 31, 2023	and strategies of the TAIYO YUDEN Group. It is not intended as an inducement
FY 2022 or fiscal year ended March 2023	to purchase or sell stock in TAIYO YUDEN. Statements in this report that are
not historical fact are forward-looking statements based on the current beliefs,
• The figures in this report omit amounts less than hundred million yen and
estimates and expectations of TAIYO YUDEN Group management. As these
1 million yen and displays it.
beliefs, estimates and expectations are subject to a number of risks, uncertainties
• The English-language version of this report is based on the Japanese-
and assumptions, actual results may differ materially. TAIYO YUDEN undertakes
language version. With the exception of the financial statements, all
no obligation to update any forward-looking statements, and shall in no event
figures presented have been rounded down to the nearest appropriate
be liable for any damages arising out of the use or interpretation of this material.
unit. As a result, there are cases when a presented figure differs slightly	Please refrain from copying or disseminating this material without the prior
from the equivalent figure in the financial statements.	consent of TAIYO YUDEN.
• The contents of this report are correct as of June 29, 2023. Some of the
content includes information from after that date.

TAIYO YUDEN INTEGRATED REPORT 2023	7

Section 1

Value

Creation

Story

Since its founding in 1950, TAIYO YUDEN has been engaged in the Electronic

Components Business, focusing primarily on capacitors.

By constantly taking on new challenges and leveraging its long-honed core technologies, the Company has not only made lifestyles more convenient, but has also contributed to the discovery of solutions to various social issues.

8

Value Creation Story

Strategies for the Creation of Value

Foundation Underpinning Value Creation

Corporate Data

Mission, Management Philosophy, Vision

Stronger and more socially aware through the

wonders of science

TAIYO YUDEN's electronic components are critical in the manufacturing of various pieces of electronic equip- ment. Our products support the evolution of electronics technology that is indispensable for people's safe, secure, comfortable, and convenient lives.

In order to create, advance, and deliver these small but important electronic components to every corner of society, we are seeking to broaden and increase the depth of new knowledge while pursuing the sophistication of our technologies and skills. Meanwhile, the strengths that we have accumulated throughout our history have generated incidental discoveries and inspirational encounters, which opened the door to unexpected future of innovative solutions and expansion into new areas of scientific advancement. The foundation of this process is "the wonders of science," which is the source of TAIYO YUDEN's corporate value enhancement.

We will provide electronic components to the world and create greater economic value. As a company that contributes to the realization of a better society, we will continue to enhance social value. As a member of society, our constant and enduring aspiration is to fulfill this mission.

The Mission of TAIYO YUDEN

TAIYO YUDEN INTEGRATED REPORT 2023

9

Management Philosophy of TAIYO YUDEN

Employee well-being

Betterment of local communities

Responsibility to provide returns to shareholders

Hikohachi Sato, the founder of TAIYO YUDEN, worked as a researcher in ceramic materials before the second world war. Following the belief that 'product commercialization should start from the development of materials,' Mr. Sato launched TAIYO YUDEN to develop and commercialize titanium-oxide porcelain capacitors in 1950.

He also believed that affection for others was the most valuable thing a person could have. The Company's management philosophy has three major compo-

nents, all of which are designed to improve the social nature of the Company and contribute to cultural development by creating an environment in which employees and their families can live their lives in happiness and prosperity.

Mission

Stronger and more socially

aware through the wonders of science

Management

Philosophy

Through the power of the wonders of science, support the evolution of the electronics technologies which are essential for safe, secure, comfortable, and convenient lives

The Values of TAIYO YUDEN

Employee well-being Betterment of local communities

Responsibility to provide returns to shareholders

Realization of the Management Philosophy

The beliefs and philosophy of Mr. Sato live on as the underlying

spirit of TAIYO YUDEN.

Founder Hikohachi Sato

Vision

Strategy

System and Action Guidelines

To be an excellent company that enjoys the trust and highest regard from all stakeholders

Medium-term Management Plan

Aim for greater corporate value through both economic value and social value

Daily Standards of Conduct for

Strategy Execution

Management systems such as

ISO, IATF, etc., the CSR Code of

Conduct, etc.

A base materials plant (the Takasaki Plant) in about 1957

10	Value Creation Story	Strategies for the Creation of Value	Foundation Underpinning Value Creation	Corporate Data	TAIYO YUDEN INTEGRATED REPORT 2023	11

History of Value Creation

Changing with the times,

we have continuously met the needs of society

TAIYO YUDEN has since its founding provided to companies around the world a variety of electronics components, including inductors and communication devices, with a focus in particular on multilayer ceramic capacitors, the Company's mainstay product. This in turn has served to meet the needs of society while creating value.

1980s

Portable CD players, car phones and other devices make their appearance

-2010

Increased use of home video games, mobile phones, PCs and other devices

IT-related product demand rises while international specialization advances

2011-

Use of smartphones and tablets surges while trend toward the electrification of automobiles accelerates

Smartphones, tablets and other devices become more functional, compact and thinning

(Billions of yen)

400.0

1950s	1960s
Transistor radios make their	Production of TVs, transistor
radios and other items expands
appearance
as export products

Increased use of radios,	Overseas demand rises
TVs and other electronic
equipment
	Net Sales
Founding
1950	1960	1970
The Value Provided by TAIYO YUDEN

1970s

Increased use of home-use video tape recorders (VTR), audio equipment and other items

Energy conservation, power saving

1980

Electronic devices become increasingly compact and lightweight

Overseas Sales Ratio

FY2000

62.0

%

19902000

FY2010

77.1

%

2010

300.0

FY2022

Net Sales

¥319.5 billion 200.0

Overseas

Sales Ratio

89.7%

100.0

FY2020

90.3

%

0

2020

Sept. 1950

Sales of Rutilcon, barium titanate tubular ceramic capacitors, began

Sept. 1954

Production of Ferrit Cores, small ferrite cores, began

Sept. 1964

Established the technical research laboratory

May 1967

Established our first overseas subsidiary TAIWAN TAIYO YUDEN CO., LTD. in Taipei

TAIWAN TAIYO YUDEN at the time of establishment

Mar. 1970

Listed on the Second Section of the Tokyo Stock Exchange. In 1973, moved to the First Section

July 1976

The world's first commercialization of axial leaded ceramic capacitors began

Oct. 1977

Developed world's first tubular chip type ceramic capacitors

July 1984

The world's first commercialization of nickel electrode high-capacitance multilayer ceramic capacitors began

[3216] type and [3225] type

Sept. 1988

Announced the release of the world's first recordable CD-R compact disks

DVD-R,BD-R,CD-R

1999-2000

Established four production bases abroad simultaneously

TAIYO YUDEN (SARAWAK)

Apr. 2001

Acquired the world's first Blue- tooth® standard version 1.1 qualification for Bluetooth® full modules

Mar. 2010

TAIYO YUDEN Mobile Technology Co., Ltd. became a subsidiary

Apr. 2018

ELNA CO., LTD. became a subsidiary

May 2018

Developed the world's first multilayer ceramic capacitors with a capacitance of 1,000μF

4532 size (4.5mm×3.2mm) with 1,000μF capacitance

Mar. 2020

The world's first commercialization of automotive multilayer metal power inductors

Multilayer metal power inductor "MCOILTM MC Series" (1.6mm×0.8mm×1.0mm, 0.47μH)

12

Value Creation Story

Strategies for the Creation of Value

Foundation Underpinning Value Creation

Corporate Data

TAIYO YUDEN's Value Provision

TAIYO YUDEN is expanding the scope in which it provides value toward the creation of a prosperous society

TAIYO YUDEN INTEGRATED REPORT 2023

13

TAIYO YUDEN's products are used across a wide range of fields. For example, our multilayer ceramic capacitors, a mainstay product, are used in products which are present all around us in our daily lives such as smartphones, PCs, tablet devices, TVs, game consoles, etc. In recent years, vehicle computerization and electrification of products have further expanded the scope in which we provide value toward the creation of a prosperous society.

TAIYO YUDEN Main Products

p.38 At a Glance

Sales Composition by Market Sector

(FY2022)

Others					Capacitors	65%
	8%
TAIYO YUDEN offers aluminum electrolytic capacitors		Capacitors are used in a wide variety of electronic
that are optimal for mounting on increasingly electroni-		equipment to temporarily store electricity and remove
cized automobiles as well as various types of power		electronic noise. TAIYO YUDEN excels in producing
storage devices.				leading-edge,highly-reliable multilayer ceramic capaci-
						tors which are best suited to cutting-edge electronic
						devices including smartphones and automobiles, and
						large numbers of multilayer ceramic capacitors are
						loaded into such devices.
Integrated Modules	10%					17%
& Devices			Inductors
The Integrated Modules & Devices classification's main		Inductors are used in electronic equipment power and
products are FBAR/SAW devices for mobile communica-		high-frequency circuits for blocking alternating current
tions, which are used primarily in smartphones to enable		while allowing direct current to pass through.
high-speed and high-quality data communications.

CASE

Contributing to a New Era in

Motorization

The advancement of four megatrends in the mobility revolution, or CASE (Connected, Autonomous, Shared

• Service, and Electric) is likely to propel strong growth in autonomous driving vehicles and electric vehicles. We also expect it to drive a continued expansion in demand for electronic control units (ECUs) which are critical for vehicle computerization and electrification and electronic components.

5G/6G

Responding to the Rapid

Increase in Data Transmission

Volume

Fifth generation mobile communications (5G) services commenced in 2018. Their applications are expected to extend not only to smartphones but also to a variety of IoT devices and remote controlled robots, resulting in the rapid development of information-based infra- structure, including 5G base stations and servers. The 6G system, which is beyond the 5G system, is forecast to increase data traffic even further.

Automobiles

Advanced driver assistance systems (ADAS)

Meter clusters Electronic control units

IT infrastructure / Industrial equipment

Base station communication equipment

Servers Security cameras

Communication equipment

Smartphones

Information equipment

Tablet devices

PCs

HDD/SSD

Consumer products

TVs

Game consoles

Smart watches

Sales Composition by Market Sector

(FY2022)

28%

24%

25%

15%

8%

14	Value Creation Story	Strategies for the Creation of Value	Foundation Underpinning Value Creation	Corporate Data	TAIYO YUDEN INTEGRATED REPORT 2023	15

Business Activities that Provide Value

TAIYO YUDEN supports a society which "connects" people and things

"Connecting" people and things creates new value, bringing constant changes to society. TAIYO YUDEN's mainstay electronic components and the solutions they deliver continue to support all "connections" in life and help build a prosperous society.

		Development
		of 5G/6G
	Reduction of the	services
	management work
	for rivers and
Disaster	waterways with the	High quality
River Water Level
readiness	wireless
Monitoring System
	communication

IoT

Society connected

by IoT and

sensing

Value creation through products

p.38 At a Glance

Value creation through solutions

ADAS and

other vehicle

advances

				Visualization of the
	Contribution to zero			location information
			for people and
	energy consumption
			things inside the
	and CO2 emissions		Smart factory
		plants with the
Zero carbon	and healthy lifespan
	productivity	soliot™ IoT Engine
society with smart	extension with the
	improvements	Location Detection
Regenerative Electric
mobility services
		System
Assist System

Financial	Intellectual	Manufacturing
capital	capital	capital
Advances financial strategies	Contributes to the evolution	Establishes high efficiency
that support sustainable	of electronics technology	production and stable supply
growth	through R&D	systems

Virtual space

	Efficient
	maintenance of
	bridges and roads is
Efficient social	feasible with the
Bridge Monitoring
infrastructure
System
development

Increasing

xEV

Human	Social/related	Natural
capital	capital	capital
Trains innovative talent who	Strengthens mutual trust	Contributes to achieving a
will generate new value	with stakeholders	sustainable recycling society

16	Value Creation Story	Strategies for the Creation of Value	Foundation Underpinning Value Creation	Corporate Data	TAIYO YUDEN INTEGRATED REPORT 2023	17

Materiality

In order to achieve its mission of "stronger and more socially aware through the wonders of science," TAIYO YUDEN has designated the most important issues it faces as "materiality," or "key issues." In our

medium-term management plan 2025, which began in FY2021, we drew up priority measures and KPIs linked to key issues for both economic and social value, and we are in the process of carrying them out.

Materiality (Key Issues)
Identification Process	Step	Establish mission and reaffirm
	1	management philosophy and vision

TAIYO YUDEN celebrated its 70th anniversary in 2020. To mark this occasion, it established a new mission of "stronger and more socially aware through the wonders of science," which is to be pursued unchanged and perpetually to become a centennial company. In addition, we reaffirmed our management philosophy, which is our value, and our vision.

Step	Extract issues and initiatives relating
2	to economic and social values

During the discussions in Step 1, we recognized that increasing corporate value perpetually requires increasing not only economic value but also social value. In the process of formulating medium-term management plan 2025, we reviewed and extracted issues and initiatives related to economic and social values that we had been aware of.

	Gauge the demands and		Set priority order and extract
Step	Step	Step	Approve materiality
3	expectations of stakeholders	4	issues as materiality	5
	Based on the details outlined through Step 3 (issues
We engaged (held constructive dialogue) with sharehold-		We identified a set of issues as materiality in the
ers, investors, customers, business partners, employees,	extracted, demands and expectations for TAIYO YUDEN,		course of the numerous discussions among
and other stakeholders to gauge their demands and	extent of feasible contribution, degree of relevance to		management. Materiality was then approved by
expectations for TAIYO YUDEN and the extent to which	the business, etc.), we extracted issues that the Com-		the Board of Directors and announced.
we can make a contribution.	pany should continue to prioritize.

Materiality and Priority Measures

Category

Materiality (Key Issues)

SDGs Targets

Medium-term Management Plan 2025

Medium-term

Management Plan 2025 KPIs

Example Initiatives in FY2022

Related Pages

Priority Measures

Item

Target

FY2022 Actual

• Product Strategy

Initiatives for the development and stable supply of high-quality smart products that reduce environmental impact

Further grow the MLCC business and strengthen

• Capacitors: Strengthened the product appeal of high-reliability MLCCs and shifted to large shaped products

p.38 At a Glance

inductor and communication device products to

• Inductors: Expanded our lineup of power inductors and improved our item mix

turn them into core businesses

• Communications devices: Development of next-generation products for use in 5G mobile communications

Strengthen core technologies to

Goal 7:

• Market Strategy

Net sales

480.0 billion yen

319.5 billion yen

• Expanded our supply capacity through production capacity increase, and expanded sales in the high added value

p.18 Medium-term

Increase the proportion of sales in focus markets,

make our core business grow

Affordable and

primarily automotive and IT infrastructure/industrial

zone for automobiles and IT infrastructure/Industrial equipment

Management Plan

Clean Energy

Operating margin

15% or higher

10.0%

• Expanded the proportion of sales in focus markets to 52%

2025

Economic Value

equipment, to 50%

Goal 9:

ROE

15% or higher

7.5%

• Financial Strategy

• Constructed and completed a MLCC materials building at the Yawatabara Plant

Industry,

ROIC

10% or higher

5.9%

Innovation and

Continuously expand production capacity to meet

• Constructed new plants to increase MLCC production capacity in China and Malaysia

-

Infrastructure

increase in demand for electronic components

• Increased MLCC production capacity by 10-15% compared to the previous year

Create solutions to solve social

• River water level monitoring system: Commenced provision of the services to local governments and participated in

-

the one-coin flood sensor demonstration experiment of the Ministry of Land, Infrastructure, Transport and Tourism

-

issues

• Won the Ministry of Land, Infrastructure, Transport and Tourism's FY2023 Bicycle Use Promotion Achievers Award for

the regenerative electric assist system

Goal 6:

GHG emissions

• Improved energy-efficiency for production and infrastructural equipment and expanded introduction of renewable

Clean Water and

Strengthen measures to address

(FY2030)

energy

Sanitation

*Absolute amount,

42% reduction

18.3% reduction

• Increased information disclosure in line with TCFD (Safety & Environmental Report 2023, Integrated Report 2023,

climate change

Goal 12:

compared with

etc.)

p.67

FY2020

• Certified as an A List company, the highest evaluation, by international environmental not-for-profit organization CDP

(E) Environment

Responsible

Environmental

Consumption and

Activities

Production

Use resources effectively and

Goal 13:

Waste

10% reduction

12.6% increase

• Reduced waste at production bases through revisions to production methods

Climate Action

contribute to create recycling society

Water usage

10% reduction

4.5% reduction

• Reduced water consumption at production bases through optimization of facilities that supply water

*Basic unit, compared with FY2020

Incidence rate of

< 0.016

0.015

• Promoted health and safety activities for each of the 5Ms of man, machine, method, material, and measurement

p.77 Social

• Accelerate our efforts with numerical targets to

injuries and illness

based on the medium-term occupational health and safety targets (FY2022 to FY2025)

Achieve health-oriented manage-

< 0.08

0.07

Activities

improve our social value

Accident frequency rate

• Verified the risks of all work handling heavy objects, and revised and strengthened measures to reduce the risks

ment and work style reforms at

Goal 3:

• Increased management training, harassment training, etc.

safety first workplace

Good Health and

Work engagement

2.5 or higher

2.28

Well-being

• Officially introduced the work-from-home system in normal times

Goal 5:

• Promoted initiatives for each of the Focus 5 health indicators of diet, non-smoking, exercise, sleep, and stress

Social

(S) Social

Gender Equality

Rate of newly recruited

30% or higher

35%*

• Hosted company information sessions and 1-day work experiences for women

Value

female graduates

• Participated in recruitment events for female students

p.81 Human

Goal 8:

• Added a KPI (female manager ratio of 10% or higher by FY2030)

Train and develop human resources

Resources Strategy

Decent Work and

Female manager

• Newly established the Diversity Development Section (Its systems were strengthened as the Diversity Development

based on the diversity policy

Economic Growth

10% or higher

4.2%*

Department in FY2023)

ratio

• Implemented diversity training (for the top executives and the management section general managers)

(FY2030)

• In partnership with labor unions, hosted workshops related to the promotion of women's participation and advance-

ment in the workplace

• Carried out Evaluation of Board of Directors' Effectiveness using external evaluation organization

p.56 Governance

Improve management quality to

• Made lists of laws/regulations and risks by organizational unit, and drafted and implemented mitigation measures

Goal 11:

• Regularly held meetings of the Information Security Committee to deliberate on the companywide security policy and

support business growth

Sustainable Cities

important measures and to share incidents

(G) Governance

and Communities

-

-

-

-

• Strengthened information security (including implementation of suspicious email drills, introduction of information

p.63 Compliance

Goal 16:

leakage prevention tools, etc.)

and Risk

Peace, Justice,

• Revised and improved the Group Business Continuity Provisions synchronized with the amendment of the Risk Manage-

Management

and Strong

Establish and evolve BCM for

ment Manual

Institutions

• As measures to combat COVID-19, in the first half of the year continuously held meetings of the BCP Committee and in the

disaster and infectious disease

second half of the year when stabilization of the situation was confirmed stopped holding the regular meetings

• Started offering a priority telephone for times of disaster at each base inside Japan

*As of April 1, 2023

18

Value Creation Story

Strategies for the Creation of Value

Foundation Underpinning Value Creation

Corporate Data

Medium-term Management Plan 2025 (FY2021-FY2025)

Trends and Targets of the KPIs

TAIYO YUDEN INTEGRATED REPORT 2023

19

Economic value indicators

(Billions of yen)																							(%)
500.0																							25
		Net sales (left scale)
		Operating margin (right scale)
400.0		Return on Equity (ROE) (right scale)							20
	Return on Invested Capital (ROIC) (right scale)
300.0																							15
																						Net sales
																						¥480.0 billion
200.0																						Operating	10
																					margin
																						15% or higher

Social value indicators

GHG emissions

Target for FY2030

Reduce absolute amount by 42%

(on a single-year basis (4.2)% equivalent)

(%)

0

−5.2

−18.3

FY

2020

2021

2022

Waste, Water usage

		Target for FY2025
	Reduce by 10% (basic unit)
	(on a single-year basis (2.0)% equivalent)
(%)		12.6
	0	−3.8

							−4.5
						−17.2
FY	2020	2021	2022
		Waste			Water usage

*Change basic unit from sales volume to production volume and retroactively change fiscal 2021 figures

Incidence rate of injuries and illness Accident frequency rate

Targets

Incidence rate <0.016

Accident frequency rate <0.08

1. 0.18

				0.14
					0.08				0.08	0.10	0.07
						0.04
			0.035	0.028	0.015	0.008	0.015	0.021	0.015
FY	2016	2017	2018	2019	2020	2021	2022
			Accident frequency rate			Incidence rate

ROE

15% or higher

100.0

ROIC

5

10% or higher

0.0

0

2012 2013 2014 2015 2016 2017

2018 2019 2020 2021 2022

～

2025 (FY)

Target

Medium-term

Medium-term Targets

Medium-term

Medium-term Management Plan 2025

Management Plan

Management Plan

Work engagement

Target

2.5 or higher

2.28

2.27

2.25

FY

2020

2021

2022

Rate of newly recruited female graduates*

Target

30% or higher

(%)
			43
		36	38
		35
33
29		28

FY 2017 2018 2019 2020 2021 2022 2023

*As of April 1

Female manager ratio*

Target for FY2030

10% or higher

(%)

4.2

						3.7
				2.5	2.4
		1.4	1.8
	1.1
FY	2017	2018	2019	2020	2021	2022	2023

*As of April 1

Net sales	Net sales	Net sales	[Economic Value]
¥250.0 billion	¥300.0 billion	¥300.0 billion	Net sales	Operating margin

Medium-term Management Plan 2025: Progress and Issues

	Operating profit	Operating margin	Operating margin	¥480.0 billion	15% or higher
KPIs	¥20.0 billion	10% or higher*		15% or higher*	ROE	ROIC
	ROE	ROE		ROE		15% or higher	10% or higher
	8%	10% or higher		10% or higher
		[Social Value]
		*Reduced from 13% at the	*Increased from 10% at the		For further information about our KPIs,
		start of FY2017		start of FY2019		please see
							p.19 Medium-term Management
							Plan 2025: Social value indicators
	Structural
	reforms
	Increase number of super-high-end	Increase proportion of sales
	accounted for by super-high-end
	products
	products to more than 50%
	Increase proportion of sales	Increase proportion of	Increase proportion of	Increase proportion of sales accounted for by focus markets to 50%
	accounted for by focus markets to	sales accounted for by focus	sales accounted for by
	(25% automotive + 25%	IT infrastructure/industrial equipment)
	15%	markets to more than 30%	focus markets to 38%
Measures		Transform to business model with profitable business structure	Develop solutions to social issues
		(smiling curves in manufacturing and providing solutions)
	Control capital investments	Shift to more aggressive invest-	Increase scale of capital invest-	Continue to strengthen production capacity (five-year total
	(three-year total of approx. ¥60	ments (three-year total of approx.	ments (three-year total of approx.
	of approx. ¥300 billion)
	billion)	¥100 billion)		¥130 billion)
		"smart.E" productivity enhancement activities

Turn ELNA CO., LTD. into a subsidiary

In the medium-term management plan 2025 (FY2021 to FY2025), we defined the automotive market and the IT infra- structure/industrial equipment market-two markets for which stable growth can be anticipated-as "focus markets" and while working to increase sales centered on these markets, we are aiming to enhance corporate value through the combination of economic and social value.

For economic value, we have set KPIs for net sales, operating margin, ROE, and ROIC. For social value, we have set KPIs for GHG emissions, waste volumes, water usage, workplace safety, diversity, etc. We are also advancing a capital investments plan of ¥300.0 billion over the five years from FY2021, the first fiscal year of the plan. We will use this money to strengthen our production capacity in readiness for future increases in demand centered on demand for automobiles and to make more proactive capital investments in environmental measures and IT facilities.

In FY2021 against the backdrop of favorable market conditions we exceeded our final targets for the three KPIs of operating margin, ROE, and ROIC whereas in FY2022 the demand environment for electronic components went into decline and each of the KPIs deteriorated. It is anticipated that the market conditions will gradually recover in FY2023 and we are continuing to carry out business activities for achieving the targets of

the final fiscal year of the medium-term management Plan 2025. The sales composition ratio of the "focus markets" in

FY2022 was 52% as a result of the increased demand in the automotive market and the slowdown in demand in other markets. It is thought that going forward the sales composition ratio will change due to the demand trends in each market, and we will operate well-balanced businesses which can exercise the strengths of TAIYO YUDEN.

Further, of the KPIs concerning social value, we have

achieved our targets for incidence rate of injuries and illness, accident frequency rate, and rate of newly recruited female graduates. Going forward we will aim for continuous achievement of the targets. Regarding the other indicators, waste volumes and water usage deteriorated from the previous fiscal year, while on the other hand GHG emissions, work engage- ment, and the female manager ratio improved. We will continue to work toward achievement of the targets. Concerning GHG emissions, in response to the agreement of the target of 1.5°C in the 26th UN Climate Change Conference of the Parties (COP26), TAIYO YUDEN has also upwardly revised its targets and strengthened its initiatives in FY2022. As an initiative for GHG emissions reduction, the Yawatabara Plant materials building completed in March 2023 has realized significant energy savings and was able to acquire ZEB Ready certification.