Issues to be Addressed

The business environment surrounding Mikuni Group is affected not only by political and economic trends, but also by the progress of discussions on the global environment. In FY2022, the fiscal year ended March 31, 2023, although there was a recovery from the impact of the COVID-19 pandemic, continuing geopolitical tensions keep resource prices high, and there was an impact from rising raw material costs and logistics costs. While responding to these business environmental changes, we, the Mikuni Group, promote development projects assuming that the demand for mobility will change in the long term, improve our productivity, and build a corporate structure that enables us to deal with various changes in the business environment.

Business and Financial Issues to be Addressed with Priority
We aim for being a sustainable and highly profitable company based on “Monozukuri (manufacturing).” In achieving this goal, we recognize safety, quality, health, education, and compliance as the cornerstone of all our activities and address the following issues with priority.

• Generating a cycle that Mikuni makes a contribution to enhance the sustainable earth and society, whereas the contribution promotes our growth
• Continuous enhancement of development capabilities and competitiveness
• Promotion of DX (Digital Transformation)
• Improving employee engagement
• While appropriately passing on costs to prices and addressing cost increases, maintaining cash and stability of funds procurement
• Maintaining a structure for business continuity, addressing changes in the business environment due to infections, geopolitical risks and other factors

Management Strategy
Since 2013, we have been following the long-term business plan “VISION 2023,” which is revised in 2021 as “VISION 2023 Final STAGE.” In the revised plan, we strengthen our efforts to address climate change and digitalization and deal with the issues through the activities, measures, and strategies as mentioned below.

(1) Activities for Achieving Carbon Neutrality by 2050

• Steady efforts to reduce Scope 1 and Scope 2 greenhouse gas emissions by 50% compared to 2016 levels by 2030
• Sales and product development framework to reduce Scope 3 greenhouse gas emissions

(2) Optimal Allocation of Firm Resources

• Allocation of firm resources from the perspective of overall optimization to minimize the impact of increases in raw material costs, etc.
• Strategic allocation of resources for further growth of the India business

(3) Responding to cost increases

• Appropriately passing on increased costs including raw material costs, logistical costs, power costs and labor costs to selling prices

(4) Streamlining Product Development Based on Long-term Development Strategies

• Development of strategic products to support the diversification of power train, focused on electrification
• Shortening development lead time through promotion of digital transformation (DX) and company-wide “front-loaded” product development
• Improving both efficiency and quality of development and strengthen proposal capabilities by adopting model-based development

(5) Customer and Production Strategies to Enhance Our Existence Value in the Global Market

• Expanding sales of strategic products through close communication with customers
• Promotion of cost reduction activities at all stages of procurement, production and sales
• Reorganization of global production locations including China

(6) DX to Enhance Competitiveness and the Power of Self-Improvement

• Promoting DX that achieves time reduction in all processes
• Improving production efficiency and manufacturing quality through activities to create the “connected factories”
• Creating an organization with the flexibility and agility to quickly respond to and forecast changes in the business environment

(7) Promotion of Human Resource Strategy to Improve Employee Engagement

• Sharing the medium- to long-term visions with employees
• Extracting the maximum value from human capital by increasing employee engagement through two-way communications
• Improving productivity by promoting the health and productivity management

(8) Financial Strategies to Respond to Stakeholders’ Expectations

• Achieving a financial status that can withstand changes in the business environment
• Increasing the return on invested capital through asset optimization and improvements to the profit ratio