Corporate Strategy - MITSUBISHI ELECTRIC GLOBAL · PDF file4 Strengthening the Global 8....

Corporate Strategy

November 2013

1 Management Policy:

Contents6 Research & Development:1. Management Policy:

Balanced Corporate Management

6. Research & Development: Design Life and Society in the FutureManagement

2. Forecast for FY2013

the Future

7. Strengthening Management Foundation3. Essential Growth Strategies

4 Strengthening the Global

Foundation

8. Corporate Mission4. Strengthening the Global Strategy

5 M k St B i Notes:

9. Corporate Governance

5. Make Strong Businesses Stronger Globally

Notes:FY2008: April 1, 2008 – March 31, 2009FY2009: April 1, 2009 – March 31, 2010FY2010: April 1, 2010 – March 31, 2011FY2011: April 1, 2011 – March 31, 2012

1

p , ,FY2012: April 1, 2012 – March 31, 2013FY2013: April 1, 2013 – March 31, 2014

1 M t P li B l d C t M t

Robust Management Foundation and Two Frameworks for

1. Management Policy: Balanced Corporate ManagementIncrease Corporate Value

Robust Management Foundation and Sustainable Growth Implementing Balanced Corporate

Management

GrowthGrowthTwo FrontTwo Front--lineslines

“Manufacturing Craftsmanship” (Quality, costs, manufacturing technologies, R&D IP)Growth strategies R&D, IP)

Sales and services Growth strategies Victory (VI) & Advance (AD)Agility to changes in the business environment

SoundnessSoundnessFour SynergisticFour Synergistic

Corporate NetworksCorporate Networks

P d ti d S lIntegration synergies between

Persistently strengthening the Financial standing

Profitability,Efficiency

Production and SalesBusiness divisionsBusiness divisions and CorporateGl b l

y g gbusiness foundation:・“Manufacturing Craftsmanship”・Sales and services・Human resources

Financial standingEthics and compliance CSR

2

Global

1 M t P li B l d C t M t

Bolster Growth StrategiesBolster Growth StrategiesManagement Targets to be Continuously d St bl A hi d

1. Management Policy: Balanced Corporate ManagementIncrease Corporate Value GrowthGrowth

SoundnessSoundnessProfitabilityEfficiency

ProfitabilityEfficiencyBolster Growth StrategiesBolster Growth Strategies

Creation of new strong businessCreation of new strong businessRecuperation of net sales above 4,000 Recuperation of net sales above 4,000 billion yenbillion yenROE: 10% or more

and Stably Achieved

OPM: 5% or morebillion yenbillion yenAchieve overseas sales ratio: 40%Achieve overseas sales ratio: 40%

Aiming to become a global leading green

ROE: 10% or more

（Debt Ratio, %）（ OPM, %） (ROE, %)

Debt Ratio: 15% or lessAiming to become a global, leading green

company that contributes to the creation of a prosperous society

15

20 0

5

10

10

E i t S i l I f t t

10

10

15

20

5

Environment and Energy

Social Infrastructure Systems

Global

OPM

4.3%15.9%

TargetLevel

Debt Ratio

0

520

25

300

Development

ROE

5.7%

3

08 09 10 11 12 13 Pursue ever Higher Growth（FY）

2 F t f FY2013GrowthGrowth

3004,000(Net Sales：Billions of Yen) (Operating Income: Billions of Yen)Operating Income (Right)

3 639 43,950.0

3 665 1 3 645 3

2. Forecast for FY2013SoundnessSoundnessProfitability

EfficiencyProfitabilityEfficiency

200

300

3,000

4,000 3,639.4

225.4

3,665.1

233.73,353.2

220.0

3,645.3

Electronic Devices

Home Appliances

3,567.1

1001,000

2,000139.7

94.3

IndustrialAutomationSystems

Information &CommunicationSystems 152.0

00Net Sales (Left)

Energy &ElectricSystems

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

F t ForecastActual

102JPY/USD147JPY/EUR

Actual92JPY/USD

130JPY/EUR

Actual86JPY/USD

113JPY/EUR

Actual79JPY/USD

110JPY/EUR

Actual83JPY/USD

106JPY/EUR

Forecast(Apr 2013)95JPY/USD

120JPY/EUR

Forecast(Oct 2013)

[2nd half forecast]95JPY/USD

125JPY/EUR

6 MonthsForecast

6 MonthsResult

98JPY/USD128JPY/EUR

Net Sales 3,665.1 3,353.2 3,645.3 3,639.4 3,567.1 1,780.0 3,810.0 1,811.8 3,950.0Operating

Income 139.7 94.3 233.7 225.4 152.0 70.0 205.0 79.7 220.0(Operating Income

Ratio) 3.8% 2.8% 6.4% 6.2% 4.3% 3.9% 5.4% 4.4% 5.6%Income before 43 9 64 2 210 2 224 0 65 1 60 0 185 0 83 4 200 0

44

Income Taxes 43.9 64.2 210.2 224.0 65.1 60.0 185.0 83.4 200.0

Net Income 12.1 28.2 124.5 112.0 69.5 35.0 110.0 48.3 120.0

GrowthGrowth2 F t f FY2013 S t F t

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013(Billions of Yen)

GrowthGrowth


ProfitabilityEfficiency

2. Forecast for FY2013: Segment Forecast

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

Actual102JPY/USD147JPY/EUR





Forecast(Apr 2013)95JPY/USD120JPY/EUR

Forecast(Oct 2013)

[2nd half forecast]95JPY/USD147JPY/EUR 130JPY/EUR 113JPY/EUR 110JPY/EUR 106JPY/EUR 120JPY/EUR 125JPY/EUR

Energy & Electric Systems

Net Sales 1,043.6 1,039.6 1,027.7 1,027.1 1,058.1 1,100.0 1,160.0Operating

Income/Loss 74.5 74.7 83.0 84.9 85.1 78.0 80.0Industrial Net Sales 851 6 733 1 927 0 978 3 927 8 990 0 1 040 0

Automation Systems

Net Sales 851.6 733.1 927.0 978.3 927.8 990.0 1,040.0Operating

Income/Loss 49.9 26.1 100.0 101.1 60.5 78.0 87.0Information &

Communication Systems

Net Sales 582.1 526.1 487.9 516.3 522.4 550.0 550.0Operating

Income/Loss 24.8 18.6 13.7 21.3 1.5 18.0 18.0Systems Income/Loss 24.8 18.6 13.7 21.3 1.5 18.0 18.0ElectronicDevices

Net Sales 166.9 138.9 175.9 200.7 164.0 210.0 200.0Operating

Income/Loss -29.8 -7.1 5.9 3.5 -5.5 6.0 8.0Home Net Sales 915.7 824.6 924.4 849.2 821.2 890.0 910.0

Appliances Operating Income/Loss 34.7 4.8 42.0 22.3 19.3 36.0 38.0

OthersNet Sales 596.0 552.9 609.4 611.6 590.3 630.0 650.0Operating

Income/Loss 12.3 3.2 14.4 20.3 18.7 17.0 17.0

5

TotalNet Sales 3,665.1 3,353.2 3,645.3 3,639.4 3,567.1 3,810.0 3,950.0Operating

Income/Loss 139.7 94.3 233.7 225.4 152.0 205.0 220.0* Inter-segment sales are included in the above chart.

3 E ti l G th St t i GrowthGrowth

IndustrialIndustrial Information &Information &

3. Essential Growth Strategies GrowthGrowth


ProfitabilityEfficiency(1)VI Growth Strategy: Make strong businesses stronger

Home AppliancesHome AppliancesEnergy & ElectricEnergy & Electric Industrial AutomationIndustrial

AutomationInformation &

Communication Information &

Communication Electronic DevicesElectronic Devices

Power Systems SatellitesSatellites Air Conditioning Air Conditioning and Housing Productsand Housing Products

Power DevicesPower Devices

Transportation Systems

Factory Automation

ProductsOptical Broadband Optical Broadband

Access SystemsAccess Systems

Device Technology

Device Technology

Next-generation SiC inverter for railcars

Air conditioners with

Ex.

Elevators and Escalators

P d t titi th h t h l i l

Network SecurityNetwork SecuritySystemsSystems

Power Electronics Technology

Power Electronics Technology

with SiC inverters

Motor systems with built-in SiC

inverters

Automotive EquipmentAutomotive Equipment

Product competitiveness through technological synergyCreation of new strong businesses

Energy TechnologyEnergy Technology Media TechnologyMedia Technology Display & Imaging Technology

Display & Imaging Technology

Information TechnologyInformation Technology

Optical & Electrical Wave Technology

Optical & Electrical Wave Technology

Communications Technology

Communications Technology

Power Electronics T h l

Power Electronics T h l Electric TechnologyElectric Technology Mechanical TechnologyMechanical Technology Device TechnologyDevice Technology Materials TechnologyMaterials Technology Sensor TechnologySensor Technologyol

ogy

orm

s

6EMC: Electro-Magnetic Compatibility

TechnologyTechnology Electric TechnologyElectric Technology Mechanical TechnologyMechanical Technology Device TechnologyDevice Technology Materials TechnologyMaterials Technology Sensor TechnologySensor Technology

Quality Engineering, EMC Technology, Simulation Technology, Systemization Technology, Design Technology, Intellectual Property Rights, StandardizationQuality Engineering, EMC Technology, Simulation Technology, Systemization Technology, Design Technology, Intellectual Property Rights, Standardization

Tech

nopl

atfo

GrowthGrowth

3 E ti l G th St t i

Develop wide-ranging applications by maximizing device functionality


ProfitabilityEfficiency3. Essential Growth Strategies

(2)Creation of New Strong Businesses: SiC Power Devices - Applicationp g g pp y g y

Multi-Axial Integrated Drive Unit(commercialized in Dec. 2012)

Railcar propulsion system (DC1,500V)（commercialized in Nov. 2012）

Electricity consumption reduced by approx 30% compared with the High-speed switching operation

increases spindle motor speed up to twice that of its previous modelReduced power loss in drive unit results in 15% higher torque for

i dl t th th t f it i

approx. 30% compared with the conventional systemsReduced dimension and weight of the inverter: volume reduced by approx. 40%, mass reduced to approx. half 10000

100000

)

Electric power

Rolling stockspindle motors than that of its previous model

Elevator Traffic Control E i t

10

100

1000

apac

ity (k

VA)

Automobiles

Industry・Renewable energy

SiC Inverter for SiC Inverter for Rail CarsRail Cars

High EfficientHigh EfficientEnclosed TypeEnclosed TypeTraction MotorTraction Motor

SiC Auxiliary Power Supply Systems for Railcars

(Commercialized in Mar. 2013)

EquipmentIndustry’s first use of the full SiC Power

Module for high-speed elevators (currently under field test)

% f

0.1

1

Ca

10000100010010

Home appliances

Voltage (V)

30% less power loss20% smallerApproximately 15% lighterTransfer noise reduced by 4 dB owing to 35% improvement in the

65% reduction of power loss with the power moduleDownsize the dimension of the traffic control unit, both in terms of the volume and the ground surface in which it is

7

owing to 35% improvement in the distortion rate of output voltage waveforms

ground surface in which it is to be installed

GrowthGrowth

3 E ti l G th St t i(3)AD Growth Strategy:

Reinforce solutions business centered on strong businessesExpand business areasExpand business areas



3. Essential Growth Strategies

Best of the IT for augmenting competitiveness of the productsIntensify cross-business

Expand business areasExpand business areasSmart GridSmart Grid

Competitive Advantages Competitive Advantages of Mitsubishi Electricof Mitsubishi Electric

Energy Energy Conservation Conservation

S l tiS l ti

ycollaborationAlliance with partners

Strong businesses

SolutionsSolutionsTotal SecurityTotal Security

SolutionsSolutions

and rich experience

SmartSmartCommunityCommunity

Security technologyUtilize the space infrastructure Cyber security

Cryptography/verificationInformation security

Safety and risk managementSocial servicesCommunication

8

CommunicationImagingImaging

SolutionsSolutions


(4)Mitsubishi Electric Smart Community SolutionCreate sustainable society by applying proven energy platform technology with ICT

3. Essential Growth Strategies GrowthGrowth



y y pp y g p gy p gy

xEMS

MeteorologicalDisaster

Prevention

Energy SolutionEnergy SolutionLife/BusinessLife/BusinessSupport SolutionSupport Solution

TotalS it Healthcare Po er demand/s ppl

EnergySaving

PVPVHydro

Renewable

CEMSBEMS

HEMS

CEMS

Positioning

Meteorological Prevention

Imaging ITS

Security Healthcare Power demand/supply

Self-sustainabilityin Disaster

CGSEVPV

PV

Geothermal

CEMSFEMS

HEMS

HEMS ICT platformICT platform

BEMS(Commercial, Residential)

Water treatmentWater treatment

AirportAirport

RoadRoad

CGS

Residential ApartmentResidential Apartment

PV

ResidentialResidentialdistrictdistrict

CommunityCommunity

PV

CGS REMS TEMS SEMS

Harmonize distributed power generationHarmonize distributed power generationand transmission and transmission gridgrid

RailwayRailwayIndustrial districtIndustrial district

Residential ApartmentResidential Apartment

Next Generation PlatformNext Generation Platformof Energy Supplyof Energy Supply

G id PG id P RR

9

Grid Power Grid Power ResourcesResources

* xEMS: Energy Management System (B: Building, C: Community, F: Factory, H: Home, R: Railway, S: Station, T: Train), CGS: Co-Generation System

3 E ti l G th St t i(5)xEMS

Realize optimal energy control integrating Mitsubishi Electric’s expertise in all areas, from power systems to consumer electronics

GrowthGrowth



3. Essential Growth Strategies

from power systems to consumer electronics

Keihanna Science City Pilot ProjectTotal management of energy consumption within the city; Present an optimal plan for energy use

ithin the cit

Open integrated management system for building facilities

Facima BA-system touch CEMSCEMS

BEMSBEMS

within the cityStabilize power supply in the city by demand response in connection with the supply side of power systemFeasibility study on an optimization model of a community energy utilization

Compact; Easy to operate on touch screenDisplay graphs of actual energy consumption; Enable demand control for each facilityCollect and analyze data by

CEMSCEMS

Smart MeterTelecommunication function

Feasibility study on energy local supply-consumption model; utilizing geothermal and other renewable energies

(Kazuno City, Akita Pref.)Establish a local supply-consumption model at normalImplement demand response at the time of shortfall in power

l d ti f l t i ti

Collect and analyze data by utilizing CLOUD-based technology

CommercialCommercial

HEMSHEMS

Function of real-time reading and measuring of the electric energy consumption from remote place, as well as control over the power units

ResidentialResidential supply and creation of relevant incentiveSelf-sufficient power supply utilizing the existing power network at the time of disaster

FEMSFEMSMITSUBISHI HEMS

Equipped with industry-first automated energy-conserving functions, and industry-highest

b f li k ith h h ldSmart Community experiment conducted in

an Indonesian industry complex

Simultaneous pursuit of the improvement of production efficiency and energy efficiency

10* xEMS: Energy Management System (B: Building, C: Community, F: Factory, H: Home), DSM: Demand Side Management System

number of links with house hold appliances and other home equipment

an Indonesian industry complexRealize optimal power saving by coordination of

DSM with FEMS




3. Essential Growth Strategies(6)Integrated Solutions:

Railway integrated energy-environmental solutionsREMS：Railroad Energy Management Systems

In addition to the conventional surveillance systems on electricity consumption in train operations, a total solution systems having control over energy consumption all alongside the railroad and utilization of regenerative electricity throughout the integral railway

SEMS：Station Energy Management SystemsBy visualizing power consumption, encourage measures for reducing CO2 emissionOptimal energy control so as to keep both passenger service level and CO2 reduction compatibleRealize a next generation, eco-friendly station equipped with “energy creative” and “energy storage” functionsGround Control Center

Optimize power distribution management coordinating multiple stationsBased on the position and the driving conditions of each train, implement a real time control over voltage output from the substation enable not to limit regenerationThe power storage systems and regenerative inverter, which enable effective utilization of regenerative electricity

Visualization-station

regenerative electricityEnergy control room at a station Hub-station

Railway SubstationsHeadquarters, Branch OfficesVisualization

-total consumption Reduce CO2 emission, utilization of natural energies,

harmonization with the Smart Community

Total configuration control of a train by train information management systems

FEMS：Factory Energy Management SystemsVisualize the production volume and energy consumption based on per unit cost controlSupport a frontline-oriented efficiency improvement utilizing the ICT

TEMS：Train Energy Management Systems

g yHigher efficiency of electric equipmentEffective utilization of regenerative electricity

Introduce a large scale photovoltaic systems utilizing space in the sites

Visualization-train

Visualization-depot

11

Train information management systems with vehicle energy management functions DepotIntegrated facility control systems

at depot

* xEMS: Energy Management System (F: Factory, R: Railway, S: Station, T: Train)

4 St th i th Gl b l St t

Harness collective strengths between operating bases d b t b iU d t th t t

Strengthen Regional Strategy in China

4. Strengthening the Global Strategy(1)Regional Strategy: China

GrowthGrowth



and between businessesUpgrade, strengthen, restructure business promotion systemsBolster sales infrastructure systems Augment risk management system Reinforce partnerships with leading local corporate groups

Mitsubishi Electric Power & Electrical Mitsubishi Electric Power & Electrical Infrastructure Systems (Beijing)Infrastructure Systems (Beijing)

Mitsubishi Electric Power & Electrical Mitsubishi Electric Power & Electrical Infrastructure Systems (Beijing)Infrastructure Systems (Beijing)

Establishment of power systems

Principal Business Bases

ybusiness company (Beijing)

Commenced operation in Dec.2013• Sales, engineering and related services• Strengthen prowess in presenting customized

proposal, Expand maintenance service network

• Strengthen collaboration with partners to l l lli

200

300(Billions of Yen)

ElectronicDevices

HomeAppliances

Others

Sales in China

local alliances• Increase sales volume in the Chinese market:

target sales in the FY2017, 30 billion yen

0

100

08 09 10 11 12Note: Includes Taiwan (excludes equity-method companies)

（FY）

Energy & Electric

IndustrialAutomation

Digital instrumentation control system in Ningde Nuclear Power Plant

(Commenced operation in Apr. 2013)The first system designed by a Japan-China

technical collaborationJointly executed contract with local partner,

Hefei Hefei KinghomeKinghome Mitsubishi Electric Mitsubishi Electric Home Appliances Technology Home Appliances Technology

DevelopmentDevelopment

Hefei Hefei KinghomeKinghome Mitsubishi Electric Mitsubishi Electric Home Appliances Technology Home Appliances Technology

DevelopmentDevelopmentEstablishment of a joint venture for

R&D for advanced high-capacity refrigerators (Hefei)

Commenced operation in Aug 2013Jo y e ecu ed co ac oca pa e ,CTEC14 out of 16 total CPR1000 pressurized water

reactors

Commenced operation in Aug.2013• A joint venture established with Hefei

Kinghome Electrical Co., Ltd.• Expand business based on advantageous

and unique technologies for refrigerators, e.g. energy conservation and higher capacity

• Agile response to consumer requirements in

：Common areas：Energy and electric：Industrial automation：Information and communication

：Electronic devices

Central Control RoomCentral Control RoomDigital instrumentation Digital instrumentation ccontrol ontrol system equipmentsystem equipment

* CTEC: China Techenergy Co., LTD, CPR1000: the first Chinese designed pressurized water reactor, output of 1,000MW

g p qthe Chinese market

：Electronic devices：Home appliances

12


E t bli h k ti t t d l &

GrowthGrowth



4. Strengthening the Global Strategy(2)Regional Strategy: Thailand

100

Further strengthen global supply bases

Principal Business Bases Establish marketing strategy and sales & distribution structure responsive to

demand in the growing markets

Elevators & Escalators: Mitsubishi Elevator Asia

(Billions of Yen) Sales in Thailand

0

50

100

09 10 11 12Mitsubishi Elevator AsiaMitsubishi Elevator Asia

Mitsubishi Elevator AsiaDevelopment and production of globally

standardized models Supply of core components （traction

machines and other mechanical components）

Increase production capacityEnergy & electric

Industrial automation

Home appliances

09 10 11 12Mitsubishi Elevator AsiaMitsubishi Elevator Asia

Mitsubishi ElectricMitsubishi ElectricThai AutoThai Auto--PartsParts

p p y

Automotive Equipment: Mitsubishi Electric Thai Auto-PartsThe largest production base for automotive

products within ASEANFunction as the auxiliary supply base to

European and US markets: cost

Plan and implement regional strategiesMitsubishi Electric Asia (Thailand)Marketing and sales assistanceShared administrative service provided locally

to Group companies

（FY）Mitsubishi ElectricMitsubishi ElectricConsumer ProductsConsumer Products

European and US markets: cost competitiveness and advantage of various FTAs

Air Conditioning Systems: Mitsubishi Electric Consumer ProductsSiam Compressor IndustrySupply key components outside ASEAN:

p p

Air Conditioning Systems: Mitsubishi Electric Consumer ProductsProduct development responsive to local

needsExpand PAC, taking advantage of its

predominant position as the top-share player in the market of RAC

Mitsubishi ElectricMitsubishi ElectricFactory Automation (Thailand)Factory Automation (Thailand)

Mitsubishi ElectricMitsubishi ElectricFactory Automation (Thailand)Factory Automation (Thailand)

：Common areas：Energy & electric：Industrial

Supply key components outside ASEAN: shipments to Europe and U.S. comprise approx. 50%Promote local production and procurement

by transferring manufacture of globally marketable productsEnhance manufacturing capacity, establish

i t t d l i ti t

in the market of RACAccelerate expansion of the sales

infrastructures

Factory Automation Systems: Mitsubishi Electric Automation (Thailand) Mitsubishi Electric Factory Automation (Thailand)Expand distribution network and enhance

Launched strengthened FA Business in Thailand (Bangkok)Commenced operation in Sept. 2013• Acquisition of F.A.TECH and

integration into local distribution affiliate, Mitsubishi Electric Factory Automation (Thailand) Co., Ltd.

13

automation：Home appliance

an integrated logistics systems Expand distribution network and enhance market shareIntensify efforts to be awarded as the

contractor in social infrastructure projects

• Sales and servicing for FA products and CNCs

4 St th i th Gl b l St t4. Strengthening the Global Strategy(3)Deploy in the emerging markets

Strengthen cross-business cooperation for further growth and marketing efforts to get new business opportunities

GrowthGrowth



MexicoMexicoTurkeyTurkeyCommenced FA center operation,

in Oct. 2013 (İstanbul)• Technical consultancy services for

FA products, training and educational services for local

efforts to get new business opportunitiesAcquisition of Genel Teknik

Sistemler Sanayi ve Ticaret A.Ş.,Mar. 2013 (İstanbul)

• Sales, distribution, service and i i f FA

Commenced FA center operation, in Apr. 2013

• Technical consultancy services for FA products, training and educational services for local

Established automotive equipment manufacturing and sales company

(Querétaro de Arteaga)Commenced operation in Oct. 2014

S

Commenced producing Cooling& Heating Products,

in Oct. 2013• Air conditioning products for

commercial use: indooreducational services for local engineers

• Products: PLCs, inverters, servo and human-machine interface, CNCs

• Languages: Japanese, Turkish, English

system integration of FA system products and CNCs

• Expand business in the Turkish market

• Explore new markets in the Central Asia

educational services for local engineers

• Products: PLCs, inverters,servo and human-machine interface

• Languages：Japanese, Spanish, English

• Alternators, Starters etc.• Enhance local production capacity

in the Pan-American regions• Utilize the company for setting up

the business continuity plan in the Pan-American regions

commercial use: indoor units

• Establish a coherent production structure in the North America: R&D, production, distribution

BrazilBrazilVietnamVietnam IndonesiaIndonesiaLaunched a new local business structure for elevator/escalator

Mitsubishi Elevator Vietnam(Hô Chi Minh)

• Converted into a subsidiary by means of share purchase as from Sep. 2013

Commenced FA center operation, in Aug. 2013 (Hô Chi Minh, Ha Nôi)

• Technical consultancy services for FA products, training and educational services for local engineers

• Products: PLCs, inverters, servo and human-machine interface, CNCs

Established new company for locally developing elevator/escalator

Melco Elevadores do Brazil (Guaíba)• Converted into a subsidiary by means

of share purchase as from Sep. 2013• Sales, fabrication, installation,

maintenance of elevators/escalators

Commenced operation of new sales & distribution company,

in Jun. 2013 (Jakarta)• RAC/PAC air conditioning systems• Home appliances such as refrigerator• Sales, distribution and technical

support for FA system products• Reinforce business and operation

in sales, installation, and maintenance

• Languages: Vietnamese, English, Japanese (Ha Nôi)

maintenance of elevators/escalators• Entry into the largest market in South

America

14


Strong market development based on t b i

Strengthen an integrated Constantly elaborate the l l b i b

GrowthGrowth



4. Strengthening the Global Strategy(4)Deploy in the emerging markets: India

strong businessesbusiness prowess within markets, in which demands

are expanding for “Environment & Energy

Saving”, “Security & Safety”, d “S i l I f t t

Mitsubishi Elevator ETA IndiaMitsubishi Elevator ETA IndiaMitsubishi Elevator ETA IndiaMitsubishi Elevator ETA India

local business bases

Establishment of a JV for Elevators & E l t B i J 2013

Principal Business Bases

Strengthen links with India-based J i

and “Social Infrastructure Development”

Strengthen Regional Strategy in India

& Escalators Business, Jan. 2013(Chennaī)

• Strengthen sales taskforce and expand business volume

• Strengthen installation and maintenance: realize better quality,reliability and customer satisfactionJapanese companies

FA systems businessAutomotive equipment business

Expand business through local capital and deeper partnershipsPower systems business

Mitsubishi Electric IndiaMitsubishi Electric IndiaMitsubishi Electric IndiaMitsubishi Electric India

reliability and customer satisfaction

Commenced FA Development Center Operation, Mar. 2013

Bolster sales and service systems based on regional characteristicsFA systems businessAir conditioning business

Center Operation, Mar. 2013(Pune)

Scope of Development• Programmable controllers and

human-machine interface for the Indian market

• Common technologies compatible

：Common areas

Common technologies compatible with the global market standard

50

Sales in India

Industrial Automation

Home Appliances

(Billions of Yen)

：Common areas：Energy & Electric：Industrial automation

15

008 09 10 11 12 … 15

Energy & Electric

（FY）

5 M k t b i t l b llGrowthGrowth

Power Systems Factory Automation Systems Power Devices

150600400

Strengthen sales/service structure and expand business areas to become No.1

globally

5. Make strong businesses stronger globally SoundnessSoundnessProfitabilityEfficiency


Increasing global demand and “eco-friendly” needs

Business expansion in Europe, China and U.S., and next-generation product development

0

150

0

600

0

400

Domestic

Overseas

globally

(Bill

ions

of Y

en)

(Bill

ions

of Y

en)

(Bill

ions

of Y

en)

Net

sal

es

Transportation Systems Net Sales Air Conditioning Systems

008 09 10 11 12 … 15

008 09 10 11 12 … 15

008 09 10 11 12 … 15

40%4,000Expanding demand in emerging countries and

broaden business domains in the JapaneseStrategic resource investment and global

development and production

OverseasRatio

(FY) (FY) (FY)

0

720230 32% 33% 34% 34% 35%

1,000

2,000

3,000broaden business domains in the Japanese

marketdevelopment and production

(Bill

ions

of Y

en)

lions

of Y

en)

Billi

ons

of Y

en)

Building Systems Automotive Equipment Space Systems Business

008 09 10 11 12 … 15

008 09 10 11 12 … 15

008 09 10 11 12 (FY)

Expand business by entering the global Utilize a progressive cycle: new installation Localization to serve automakers worldwide

(

(Bil (B

(FY) (FY)

650500100

p y g gmarket of commercial satellitesmaintenance modernization

ions

of Y

en)

Billi

ons

of Y

en)

ons

of Y

en)

16

008 09 10 11 12 … 15

008 09 10 11 12 … 15

008 09 10 11 12 … 15

(Bill( B

(Billi

o(FY) (FY) (FY)

GrowthGrowth5 M k t b i t l b ll(1)Power Systems Business

Provide high-efficiency, low-environmental load total systems, from power generations and transmission & distribution

GrowthGrowth



5. Make strong businesses stronger globally

Highly-efficient thermal power generation• New factory with capacity of

60 units per annum.

Turbine GeneratorsTurbine Generators

Power Generation BusinessGlobal Business Promotion Structure and Regional Strategies

Proactive care/maintenance• 2,000+ units installed globallyExpand the nuclear power generation businesses based on energy measures undertaken by individual countries

T i i & Di t ib ti B iAddress new and renewal demand across all regions• Strengthen competitive prowess and develop markets

by globally expanded production of gas insulated switches and transformers

• Address new demand targeting a low carbon society

Transmission & Distribution Business

： Production and engineering bases • Address new demand targeting a low-carbon society, i.e. stabilized power supply, smart grid

• 47,000+ units of GCB installed globallyTransformersTransformersSwitchgearSwitchgear Power TransmissionPower Transmission

Supervisory ControlSupervisory ControlSystems Systems

【United States】• Expanding demand for

stabilized power supply• New transformer factory

(Commenced operation in

【Europe】・Utilize local bases

【Japan】• Exuberant and steady

demand for renewal• Upgrade production

it （ t

g g： Priority markets

Particle Beam Treatment Systems

(Commenced operation in Apr. 2013)

【Asia and the Middle East】・Electricity demand・Utilize local bases

(Dubai, Abu Dhabi, Kuwait,

Mitsubishi Electric Power ProductsMitsubishi Electric Power Products(Memphis Transformer Plant)(Memphis Transformer Plant)

capacity （generators, transformers)

• Smart grid experiment

【China】• Expanding demand for

power grid

• Delivered 8 out of total 11 systems in operation for treatment/research in domestic facilities (as of Oct. 2013)

17

( , , ,Saudi Arabia, Australia etc.)

power grid• Utilize local production

bases

2013)• Global rollout of domestically

cultivated technology

GrowthGrowth5 M k t b i t l b ll(2)Transportation Systems Business

GrowthGrowth



The only manufacturer capable of providing driving, braking and controlling as a single company


The only manufacturer capable of providing driving, braking and controlling as a single company

Global Business Promotion Structure and Regional Strategies Propulsion and Driving

SiCSiC inverter for rail carsinverter for rail cars Enclosed type Enclosed type traction motortraction motor

ConverterConverter Gear unitGear unit WNWN geargear cupplingcuppling

: Production and maintenance operating bases Air Conditioning

ConverterConverter Gear unitGear unit WN WN gear gear cupplingcuppling

TTransformerransformer

• Adapts to needs for energy conservation and high functionality

• High shares of domestic and overseas markets

• Using Mitsubishi Electric-manufactured power devices

【North America】• Continuously secure orders • Maintenance business• Active promotion of

information processing

【Europe】• Cooperation with rail car

manufacturers • Expand air conditioning

systems

【Japan】• Next-generation rolling

stock systems• Ground control systems

and equipment

: Priority markets

On-Board InformationAir conditioningAir conditioning

• Energy saving through inverter control• Strengthening of production structure

• Integrated information control aids in operation

【Central and South America】

• Regional marketing in cooperation with rail car

information-processing systems and equipment【Asia and Australia】

• Strong demand for railway infrastructure (such as in India)

• Active promotion of information-processing systems and equipment

【China】Continuously secure orders

systems and equipment• Environment-related

business• Promote strategically

focused products Breaking and Safety

TrainTrain--visionvision

in operation• Multimedia information provision to

enhance customer service

• A wide range of applications, from high-

manufacturers • Expand maintenance and

renewal business

and equipment• Expand maintenance and

renewal business

・Continuously secure orders for large-scale projects

・Maintenance businessAutomatic TrainAutomatic Train

Operation Operation control unitcontrol unit

BrakingBrakingequipmentequipment

gspeed rail to new transportation systems

• Safety enhanced with high reliability

18

5 M k t b i t l b ll GrowthGrowth

(3)Building Systems Business5. Make strong businesses stronger globally GrowthGrowth



High degree of safety and reliability shown by abundant experience Energy-saving solutions through advanced control technology

Utilize a progressive cycleBolster the building systems business

Energy-saving solutions through advanced control technology

New InstallationSales

MaintenanceService

Repairs and Maintenance

Modernization

Global Business Promotion Structure and Regional Strategies

Expand the business based on “Safety/Security” and “Reliability”

Elevator and escalator business

Expand sales of interrelated products with a view to an entire building

Modernization

Establish optimal global operation• Global business promotional structure

centered on the three core-bases(Japan, Shanghai, Bangkok)

• Promote regional businesses, explore new market

• Enhance manufacturing capability and ： Markets covered

： Production bases： Priority markets

※Number of countries already penetrated: 92

Bolster the maintenance business

g p ydivision of production, and integrate a supply chain among regional manufacturing bases

Promote the modernization business• Modernization menu related to: environment,

energy conservation, delivery, and costs• Organize business structure in the overseas markets

【Middle East and 【Asia】

【Europe】• Business promotion on

the basis of “Safety/Security” and “Quality”

【China】No.1 of collective strength (Market share, Safety/Security, Comfortableness, Technology)

• Strengthen sales/production capacity and network• The world-fastest elevators (Shanghai Tower, scheduled in 2014)• Maintenance: high-quality services

【Japan】

y p

Bolster the maintenance business• Safety/security, and reliability

Expand sales of Facima & DIGUARD (eco & security) as the core products along with various range of relating products

Building management systems business

【The Americas】• Entry into Brazilian market the largest market in

【Middle East and Africa】

• Penetrating into new markets: stronger collaborations with local partners

【Asia】• Firmly defend our

reputation as the top-end brand: expand profitability by strengthening maintenance and modernization business

• Cross-cooperation between

【Japan】• New installation: standard elevators• Modernization: safety & security features• Building management system: promote systems

and services for energy saving/security

【India】

19

various range of relating products• Total solution systems responsive

to various customer requests

• Entry into Brazilian market, the largest market in South America

• Expand market share by supply from manufacturing bases in Mexico and Colombia

Cross cooperation between elevator/escalator, and building management systems

• Strengthen operational structure to expand market share through new JV

5 M k t b i t l b ll GrowthGrowth

(4)Factory Automation (FA) Systems business5. Make strong businesses stronger globally GrowthGrowth



Integrated solutions from productivity to energy management and global technological support capabilities

Field equipment compatibility and strengthen system construction based on partnership strategies• Partner strategies

Bolster Solutions

Integrated solutions from productivity to energy management and global technological support capabilities


Partner strategies-Upper information layers: NEC, SAP, Oracle-S/W:NIPPON DENNO, Wind River, ICONICS, Adroit

• Field equipment – upgrade the presence of own products, pursue common compatibility

-Augment the CC-Link subscribers-iQ Sensor Solution-Capital alliances with key partners

Key product

New business fields: Process automation (PA), building automation (BA) and energy conservation• Bolster Singapore base• Strengthen the PA business by investment/acquisition

Bolster overseas sales capacity

【Central & Eastern Europe Russia】【Japan】

： Global FA Centers： Priority markets

Key product market share

g y q【Central & Eastern Europe, Russia】• Strengthen marketing prowess as a

manufacturer in the new markets: including acquisition of local distributors

【India】• Strengthen marketing structure: aiming at

【China】• Thorough implementation of

regional marketing strategy: introduce strategically focused

【Japan】• Overwhelming top share• Global strategic management Strengthen capability of supporting Japanese

clients expanding overseas operations• Multilingual supports in Global FA Centers• Immediately publish identical information through the

website

Strengthen technical support capability

AC servomotors AC servomotors

PLCsPLCsGlobal 19% China 19%

Supply capacity and quick delivery by undertaking production close to markets• China: Dedicated production base

Upgrade Production System

【Brazil】• New engineering service

【Taiwan and South Korea】• Smartphone-related capital

expenditure

privileged status in the market by local production and development

introduce strategically focused products by markets

【ASEAN】• Strengthen marketing structure in the

growing market• Stronghold for Global PA Business

St th t t J li t

• Feed local requirements back to the product development rapidly

Global 16%China 14%

Laser processing Laser processing machines (Printed circuit machines (Printed circuit board processing)board processing)Global 60%Global 60%China 75%China 75%

20

• China: Dedicated production base• India: Inverters and low-voltage switchgear production

capability• ASEAN: Smart meter production

• New engineering service company established• Strengthen support to Japanese clients

【Global】 Bolster marketing and operational structure across products and geographic markets

* Market shares are based on the company’s estimation

China 75%China 75%

GrowthGrowth5 M k t b i t l b ll GrowthGrowth



Meet the need for high-efficiency equipment and power electronics technology, and image and information processing technology

5. Make strong businesses stronger globally(5)Automotive Equipment Business

Bolster Products Developmentand image and information processing technology

Alternators StartersStartersEnvironment &Energy Saving


Alternators/Starters• Develop and launch products that meet demand

for such fuel-efficient features as ISS, energy regeneration, high efficiency and low weight in a timely manner

Market shareMarket share16%16%


timely manner EPS• Create competitive products meeting

demand for fuel-efficient featuresAutomotive Equipment for EV/HEV• Realize high-efficiency EV/HEV systems ： Production bases

Electric Power Steering


g y yutilizing the integrated technological capabilities

IPU EV-ECUMotors

： Priority markets

【China and India】• Promote global R&D and production

strategy aimed at enhancing competitiveness in emerging markets that favor reasonably priced cars

【Japan, United States and Europe】• Launch energy-efficient products based on advanced

technologies in line with the spread of electric-powered vehicles and the increasing popularity of fuel-efficient cars that realize automotive safety and comfort

Vehicle-mounted chargers

Upgrade manufacturing bases in response to market expansion1987 2000 2010 2013

・MexicoMitsubishi Electric Automotive Mitsubishi Electric Automotive de México, S.A. de C.V.de México, S.A. de C.V.

・United States・The Philippines・IndonesiaTh il d

・Czech Republic(two companies)・BrazilChi

・China (two companies)Mitsubishi Electric Automotive Mitsubishi Electric Automotive (China) Co., Ltd.(China) Co., Ltd.(EPS, Car multimedia)(EPS, Car multimedia)

Information CommunicationCar Multimedia• Reinforce in-vehicle and inter-

vehicle communication functions in line with the evolution of car

Car navigation systems

21

DSRC/ETC

(Alternators, Starters, etc.)(Alternators, Starters, etc.)・Thailand・India・The Netherlands

・China (EPS, Car multimedia) (EPS, Car multimedia) Changchun Qiming Lingdian Changchun Qiming Lingdian Automotive Electronics Co., Ltd. Automotive Electronics Co., Ltd. (Car multimedia)(Car multimedia)

in line with the evolution of car navigation systems into on-board information navigators

* Market shares are based on the company’s estimation

5 M k t b i t l b ll(6)Power Devices Business

Offer abundant product lineups utilizing high-performance, high-reliability components and power electronics technology

GrowthGrowth




and power electronics technologySiC power modules(Commercialized in May 2013)

ConsumerConsumer IndustrialIndustrial Rolling stockRolling stock


IPM for EV･HEV inverter• Significant trends of growing Automotive Automotive

EquipmentEquipment g g gdemands in European and Asian markets, subsequent to Japan/Unites States

EquipmentEquipment

FAFAIGBT/IPM for industrial

equipment IPM: Production and sales bases FA FA EquipmentEquipment

equipment, IPM• Growing capital expenditure for

manufacturing, particularly in Asia

• Regarding low-capacity devices, expand product lineups through Vincotech

Photovoltaic (PV) Photovoltaic (PV) InvertersInverters

: Production and sales bases: Priority markets

Air Air ConditionersConditioners

DIPIPM for inverter-type home electronics• Global top share• Growing demand mainly in Asia, inverter-

type air conditioners, refrigerators and other

Rolling StockRolling Stock HV-IGBT• Meeting expanding

demand as railway

p g(particularly in the European market)

For renewable energy equipment• Increase in demand for renewable energy

equipment especially in Europe and North America

22* IPM: Intelligent Power Module, DIP: Dual In-line Package, HV: High Voltage, IGBT: Insulated Gate Bipolar Transistor, Vincotech: Vincotech Holdings S.à r.L.

type air conditioners, refrigerators and other household appliances

demand as railway networks around the world advance

• Make better use of Vincotech for European PV systems

5 M k t b i t l b llConsistently pursuing energy conservation through

high efficiency compressors and advanced inverter control/sensing technology

GrowthGrowth



5. Make strong businesses stronger globally(7)Air Conditioning Systems Business

high-efficiency compressors and advanced inverter control/sensing technologyStrengthen Air Conditioning Systems BusinessStrengthen global development/production •Strengthen the development of environmental and

energy saving differentiation •Accelerate development of regionally responsive models


Accelerate development of regionally responsive models•Bolster overseas sales capabilities

New operational base for New operational base for North America (Apr. 2013)North America (Apr. 2013)

Room air conditioners

Divisional Headquarter (North America)

Technical Center, Training Facilities, Central Warehouse

:Production bases

Multiunit airConditioner

systems for buildings

Store and office use air conditioners

St th Ai t W t B i:Priority markets Strengthen Air-to-Water BusinessesBusiness expansion through collaboration with local partners in Europe•Augment sales and service systems •Accelerate initiatives to meet customer requirements

through local production and strengthen engineering support

【Japan】• Requirements for replacement• Further energy saving• New fields: heat dissipation or

【Europe】• Promote development

and business expansion focusing on the

i t d

【China】• Boost product competitiveness of

CITY MULTI, POWER MULTI, etc.• Strengthen lineups; Floor-mounted support

(Set up Housing Test Facility in Scotland, Jul. 2013)

Compressors Strengthen development of models that conform to the energy conservation systems of various regions

New fields: heat dissipation or cooling of equipment/facilityenvironment and energy

conservation, heat pumps and heater demand

• Increase models such as PAC for heaters, and cultivate new customers

• Penetrating into emerging

g pinverter unit, RAC and floor-installed inverter unit

• Operational investments

【Asia, Middle East】• Cost reduction: local (Thailand)

d ti

【United States】• Applications responsive to U.S.

markets: multiple-use, energy-saving feature, ductless

• Reinforce manufacturing and

23* RAC: Room Air Conditioner, PAC: Package Air Conditioner

g•Improve performance of air conditioners and help

expand sales by bolstering high-efficiency development and production capabilities

markets: Eastern Europe, Russia, Turkey

production • India & emerging markets: further

sales channels

• Reinforce manufacturing and applied development capacity to meet U.S. market needs

5 M k t b i t l b ll

Satellite Systems: Contribute to construction of global social infrastructure

GrowthGrowth



5. Make strong businesses stronger globally(8)Space Systems Business

Communication satellites Satellite positioning Earth observation satellite From the 2000s, global promotion of the standard satellite bus DS2000 for geosynchronous satellite: in such markets as communication, broadcasting, as the strategic core model.Awarded as the contractor with Türksat-4A/4B ST-2

Beside the car navigation systems, emit positioning signals for navigation support and measurement for maritime navigation, aviation and various other purposes Mitsubishi Electric has been commissioned to

Observe the earth on-orbit in the space, equipped with optical sensor, Synthetic Aperture Rader (SAR) sensor and others Developed the “Ibuki (GOSAT)” – observe di t ib ti f h th ALOS 2 f

y g

Awarded as the contractor with Türksat-4A/4B, ST-2 for Singapore & Taiwan, Superbird C2 and others

Mitsubishi Electric has been commissioned to develop a system utilizing 4 units of quasi-zenith satellite, which is the first satellite positioning system in JapanThe “Michibiki”, first quasi-zenith satellite of the program, successfully launched in Sep. 2010The second through the fourth, scheduled to be launched orderly from 2017

distribution of greenhouse gas; the ALOS-2 – for detecting facts about disasters; the “Himawari 7, 8 and 9”, for meteorological observation.Contribution to the prevention against the global warming, disaster surveillance, weather reports and others

Türksat-4A/4B

launched orderly from 2017

Michibiki©JAXA

Ibuki（GOSAT）

©JAXA

The first quasi-zenith satellite

The second through the fourth

quasi-zenith satellite

Ground Systems: Global business development for the ground control facilities for satellites operations the optical/radio telescopes for astronomical observatories

ST-2 Daichi - 2（ALOS-2）Superbird-C2 Himawari-8 and 9

Terrestrial control over satellites satellites operations, the optical/radio telescopes for astronomical observatories

Telescopes©NAOJFrom 1980s, developed large-

scale telescopes: delivered the Subaru telescope (Hawaii, U.S.), ALMA ACA (Chile) etc.Contribution to the quest on

Tracking and controlling over satellites and rocketsCapable of providing a total system coordinating the satellites and ground control

24

64m-dia. parabolic antenna for deep

space observationSubaru telescope

JAXAground controlnetwork system ALMA ACA

Contribution to the quest on the enigmatic chronology of the universe

satellites and ground control functions

6 R h &D l t GrowthGrowth

Equipment & systems for energy conservation Information sec rit and ad anced encr ption technologies

6. Research &Development:Design Life and Society in the Future

RecyclingRecycling--oriented oriented Society Society Safety and SecuritySafety and Security

GrowthGrowth



Power apparatus and system with power semiconductorsFunctional-intensive power conversion systemsRealize power conversion and current interruption utilizing power semiconductors (w/o circuit breakers) Semiconductor-based HVDC systemStructure ramified direct current transmission grid with power semiconductor based system substituting the conventional

Power apparatus and system with power semiconductorsFunctional-intensive power conversion systemsRealize power conversion and current interruption utilizing power semiconductors (w/o circuit breakers) Semiconductor-based HVDC systemStructure ramified direct current transmission grid with power semiconductor based system substituting the conventional

Equipment & systems for energy conservation

TradesecretsTrade

secrets

Processing encryptedProcessing encryptedinformationinformation

Reconcile the requirements for security and convenience at the same time, enabling search and computation without decrypting relevant data

Information security and advanced encryption technologies

FactoryFactoryautomationautomation

Data CenterData Center,,SOCSOC

CyberdefenseCyber

defensesemiconductor-based system, substituting the conventionaltransformers/breakerssemiconductor-based system, substituting the conventionaltransformers/breakers

Data

Clandestine research

SecretarithmeticoperationFunctional

encryption

Personal data Personal data andandconfidential information,confidential information,protected protected by encryptionby encryption

PersonalinformationPersonal

informationSocial

infrastructureSocial

infrastructure

NationalSecurityNationalSecurity

yp g

FinanceFinance

EnergyEnergy

BuildingBuilding

PrivacyPrivacy

defensedefense

Utilization of non-exploited or waste energy capacitiesOceanic resources: offshore wind power, submarine resource researchApplied superconductive technologies: Coils, motors

Utilization of non-exploited or waste energy capacitiesOceanic resources: offshore wind power, submarine resource researchApplied superconductive technologies: Coils, motors

Recycle & resource recovery

DataAggregation

Statistics

SearchAudit

ProvisionPresaging

Analysis

Diagnosis

SecuritySecurity

GovernmentGovernment TransportationTransportation

Disaster Preventative systems

Cities

Factories

Water reclamation factories

Resource Resource recoveryrecovery

Higher value added to wastesC ti l d t f lHigher value added to wastesC ti l d t f l

Running water processingRunning water processing

Material Material recyclerecycle

Surveillance network for disaster predictionHelicopter-mounted satellite communication, wireless mesh network and various radars

Surveillance network for disaster predictionHelicopter-mounted satellite communication, wireless mesh network and various radars

Small meteorologicalSmall meteorologicalWaterWater

reclamationreclamation((city)city)

Converting sewage sludge to fuelUtilization of unused thermal energyExpanded scope of recyclable items such as metallic and rare earth elements

Converting sewage sludge to fuelUtilization of unused thermal energyExpanded scope of recyclable items such as metallic and rare earth elements

Advanced water recycling/reuse systemAdvanced water recycling/reuse system

Water reclamation Water reclamation (industrial)(industrial)

Satellite communication systems on unmanned aerial vehicle

Small meteorological radar

Realize smaller size and higher performances, utilizing the world-best GaN amplifiers along with controlling technologies

Small meteorological radar

Realize smaller size and higher performances, utilizing the world-best GaN amplifiers along with controlling technologies

Tsunami surveillance radarHigh performance radar detecting

Tsunami surveillance radarHigh performance radar detecting

Sewage treatment plantsWastewater Wastewater treatmenttreatmentAdvanced water-recycling/reuse system

Small and simple sewage treatment systemsIndustrial wastewater-reuse systemsDesalination systems

Advanced water-recycling/reuse systemSmall and simple sewage treatment systemsIndustrial wastewater-reuse systemsDesalination systems

Surveillance systems on wireless mesh network

High performance radar detecting anomalies on remote sea-surface beyond visible scope

High performance radar detecting anomalies on remote sea-surface beyond visible scope

25

treatmenttreatment

Seawater desalinationSeawater desalination

SContinuously Enhance Profitability by Strengthening the

Manufacturing Craftsmanship

GrowthGrowth



7. Strengthening Management Foundation

4,000

5,000 300

4,000

5,000 300（Billions of Yen) （Billions of Yen）

Operating Income（Right）

• Concentrated development in line with growth strategies; promote development of key parts; promoting commercialization in global terms

• Reinforce product competitiveness by accelerating the development of more compact, lightweight and energy-efficient products that contribute to a reduced environmental burden

• Reinforce product competitiveness through the synergy of development d f t i biliti hil ti i ti th h&

D a

nd IP

2,000

3,000

100

200

2,000

3,000

100

200JPY/EUR

JPY/USD

133

106114

162

114

and manufacturing capabilities while promoting innovation through stronger industry-government-academia tie-ups

• Reinforce strategic IP activities (create competitive IP rights, promote ISO conformity, etc.)

Promote R-SIGMA 21 Activities • Further strengthen cost planning and VE activities (expand raw material

R&

0

1,000

03 04 05 06 07 08 09 10 11 120

100

0

1,000

03 04 05 06 07 08 09 10 11 120

100

Net Sales（Left）

83

（FY）

g p g ( pVA for steel/non-ferrous metals, use advanced and high- functional components, etc.)

• Optimize overall global procurement (expand overseas procurement, increase procurement capacity of overseas bases, etc.)

• Supplier selection and focus (classify suppliers , bolster partnerships directly connected to business strategies, etc.)Mi i i lif l t th h t ti iti ( d t

Proc

urem

ent

03 04 05 06 07 08 09 10 11 1203 04 05 06 07 08 09 10 11 12（FY）

Create higher value, mainly driven by environmental performancesStreamline all the business processes

• Minimize lifecycle cost through green procurement activities (respond to compact and lightweight components and energy conservation, etc.)

• Improve manufacturing structure; broaden Just-in-Time (JIT) activities resulting in improved QCD; promote in-house manufacturing of key parts; grow ties btw parent factories/overseas facilities, promote JIT in logistics etcdu

ctiv

ityStreamline all the business processes Promote local production/procurement for local consumptionUpgrade FOREX responsiveness in

• Enhance activities that focus on built-in quality from development and design stages

• Encourage self-initiated and continuous improvement at all the business processesC lti t lit i d t l bl f

logistics etc.Pr

odua

lity

26*IPR: Intellectual Property Rights, RΣ: Relation-based Strategic Integration for Global MArkets, VE: Value Engineering, QCD: Quality/Cost/Delivery, DQ: Diamond Quality

pg pprocurement, sales and financing • Cultivate quality consciousness; educate personnel capable of

professional conducts in conformity with the fundamental principles for better quality

Qu

S7. Strengthening Management Foundation Improving Productivity with Just In Time (JIT) Activities

GrowthGrowth



Augment improvement efforts throughout all business processes

(%)

Reduce waste and loss by raising the level of visualization and clarification Shorten lead times, Reduce inventory, Improve quality

Development DesignDevelopment DesignCost ReductionCost Reduction

Cost of Sales Ratio

Augment improvement efforts throughout all business processes

72

74

76

78(%)

FY01:77.9%

FY12:73.0%

SalesSales

Development, DesignDevelopment, DesignProcurementProcurement• Promote standardization and

reductions in size and weight• Engineering-driven efforts for cost

reductions • To be reflected in production

design

• Call for JIT delivery• VMI – shorten procurement lead time • Shipments at smaller lots• 100% adherence to contract delivery

terms

7001 03 05 07 09 11

Global implementationGlobal implementation

(FY)

Production Affiliated CompaniesAffiliated Companies

• Minimize product inventories

Installation and adjustmentat local sites

Installation and adjustmentat local sites • Shorten lead times for manufacturing• Encourage a group-integrated JIT

i t ti itQuality MeetingQuality Meeting

（（ThailandThailand、、Kang Yong ElectricKang Yong Electric））

at local sitesat local sites• Shorten lead time for installation,

fabrication and adjustment at local sites• Streamline the implementation methods of

the local works• Development of tools and equipment for

site works

Shorten lead times for manufacturing• Curtail work-in-process• Increase direct-to-production-site

rate (Target: 100%)

improvement activity• Provide education and training to key

persons• Encourage JIT improvement activities

at the vendors’ sites• Improve production quality• Improve degree of compliance with

th d li t

In the overseas operational bases as ll f t th k f

Quality ControlQuality Control• Front-loading – proactive quality

inspection • Closer cooperation in cross process

the delivery terms

LogisticsLogistics• Shorten distribution lead times• Change and simplify packaging

specification: less use of

27

well, foster the keen awareness ofall the workforce on the productivity by implementing the JIT activities

terms • Upgrade quality evaluation and

testing technology

specification: less use of packaging materials

• Modal shift

*VMI: Vendor Managed Inventory

SGrowthGrowth

Generate stable cash flow by raising profitability and streamlining assets

Enhance and strengthen risk tolerance through the balanced application of funds

(Improve financial standing, return value to shareholders, invest in growth fields)

7. Strengthening Management Foundation SoundnessSoundnessProfitabilityEfficiency


150

200

150

200

160.1 170.0

191.9

144 4 151.7

181.2167.7172.2169.6 179.2

• Structural reforms for improved profitability• Stronger focus on quality, cost, production

technologies development intellectual property

Improve Profitability

( p g, , g )

Invest in Growth Field Capital InvestmentR&D(Billions of Yen) (Billions of Yen) 200.0

50

100

150

50

100

150 144.4133.7

91.9

Increase Asset & Cash Turnover

technologies, development, intellectual property, marketing and services

• Termination of businesses, strategic alliances

008 09 10 11 12 13

008 09 10 11 12 13 (FY)(FY)

• Promote inventory reduction mainly through Just In Time activities and securitization of accounts receivable, etc.

• Enhance Group finances (Global CMS: yen, dollars, euros, baht, yuan, etc.)

: Energy and Electric : Industrial Automation : Information and Communication: Electronic Devices : Home Appliance : Other

Shareholder returns

10

12

14

300400

Free Cash Flow（Billions

of Yen）

182 0182 0

¥12

FY13195 7195 7

¥12

1,500

2,000

30

40

(%)

40.6%

1,769.3

Cash flow from Cash flow from operating activitiesoperating activities

Free Cash FlowFree Cash Flow

Increase profitability by strengthening

businesses

Shareholder returns(Cash dividends)(¥/share) (Billions of Yen) Debt Reduction

Debt to Debt to asset ratioasset ratio

¥11

2

4

6

8

300-200-100

0100200

--33.833.8

182.0182.0

--80.980.9

¥61st half

¥6

¥4

195.7195.7

500

1,000

10

20

14.5%542.2

16.0%

484 3

677.8

20.3%

537.5

16.7%

--70.970.9

15.9%

540.5Focus Debt

Cash flow from investing Cash flow from investing activitiesactivities

28

0

2

08 09 10 11 12 13

-30008 09 10 11 12(FY) (FY)

097 08 09 10 11 12

0(FY)

484.3investment on growth fields

Debtactivitiesactivities

8. Corporate MissionEncourage Fulfillment of Social Responsibility through Our Business Activities

QualityQuality

Seven Guiding PrinciplesTrustTrust

QualityQualityTechnologyTechnology

The Mitsubishi Electric Group will continually improve its technologies and services by applying creativity to all aspects of its business By

Corporate MissionCitizenship Citizenship Growth Growth

and services by applying creativity to all aspects of its business. By doing so, we enhance the quality of life in our society.

EthicsEthicsEnvironmentEnvironment

2929

Increased Flexibility and Transparency of the Management, Reinforced Supervisory Function over the Management

9. Corporate Governance

General Shareholders’ Meeting

Execution SupervisionReporting toReporting to

Appointment

Actual practices at Mitsubishi Electric

• Thorough separation of execution and supervisionf f O

Executive Officers

President & CEO

Board of DirectorsAppointment / Dismissal / SupervisionBusiness Execution Authorization Transfer

Supervision

Nomination Committee

• Majority of board of directors NOT assuming responsibility as executive officer

• Minimal number of executive officers (22 members) responsible for day-to-day operation of each business division and corporate administrative sections

Chairperson

sExecutive Officers Auditing

Committee

Each Business and Management Division

Reporting to

*More than 50% of members composing each of the three

Committee

Compensation Committee

• Multi-phase risk management by executive officers meeting

• Implement global internal control system to ensure compliance with the Corporation Law and J-SOX Act (Financial Instruments and Exchange Law)

Dire

ctor

s

p gcommittees shall be outside directors. • Maintaining systems to respond to companywide risks

Appropriate response to revisions of legislation and other external factors

Appropriate disclosure to shareholders and other stakeholders

30

Increase Corporate Value

“Change is progress.C ti h i th ll i f l ”

Cautionary StatementsThe expectation of operating results herein and any associated statement to be made orally with respect to the Company’s current plans, estimates, strategies and beliefs, and any other statements that are not historical facts are forward-looking statements. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimated,” “targeted,” along with any

Continuous change is the wellspring of new value.”

statements. Words such as expects, anticipates, plans, believes, scheduled, estimated, targeted, along with anyvariations of these words and similar expressions are intended to identify forward-looking statements that include but are not limited to projections of revenues, earnings, performance and production. While the statements herein are based on certain assumptions and premises that the Company trusts and considers to be reasonable under the circumstances to the date of announcement, you are requested to kindly take note that actual operating results are subject to change due to any of the factors as contemplated hereunder and/or any additional factor unforeseeable as of the date of this announcement. Such factors materially affecting the expectations expressed herein shall include but are not limited to the following. As such,y g gadditional factors may arise at any given time.

1. Any change in worldwide economic and social conditions, as well as laws, regulations, taxation and other legislation

2. Changes in foreign currency exchange rates, especially yen/dollar rates3. Changes in stock markets, especially in Japan4 Changes in balance of supply and demand of products that may affect prices and volume as well as material4. Changes in balance of supply and demand of products that may affect prices and volume, as well as material

procurement conditions5. Changes in the ability to fund raising, especially in Japan6. Uncertainties relating to patents, licenses and other intellectual property, including disputes involving

patent infringement7. New environmental regulations or the arising of environmental issues8 D f i d i8. Defects in products or services9. Litigation and legal proceedings brought and contemplated against the Company or its subsidiaries and

affiliates that may adversely affect operations or finances10. Technological change, the development of products using new technology, manufacturing and

time-to-market11. Business restructuring

31

g12. Occurrence of large-scale disasters including earthquakes, typhoons, tsunami, fires and others 13. Social or political upheaval caused by terrorism, war, pandemic by new strains of influenza and other diseases,

or other factors.

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