菱電商事（8084） – [Delayed]Financial Results Briefing for FYE2022

Fiscal Year Ended March 2022Financial ResultsBriefingMay 20, 2022Ryoden Corporation0On April 22, 2022, Ryoden Corporation celebrated the 75th anniversary of its foundation1Table of Contents21. Overview of the RYODEN Group2. Financial Results and Financial Conditions3. Future Management Strategy1. Overview of the RYODEN Group3Overview of Ryoden CorporationTrade nameRyoden CorporationEstablishmentApril 22, 1947Head office3-15-15, Higashi Ikebukuro, Toshima-ku, TokyoCapital¥10,334,298,875 (As of April 1, 2022)StockListed on the Tokyo Stock Exchange Prime Market RepresentativeDirector of Board, President & CEO Nobuo ShogakiNumber of employeesNet salesAssociated companiesConsolidated: 1,214Non-consolidated: 1,016 (Both as of the end of March 2022)Consolidated: ¥229.1 billionNon-consolidated: ¥201.9 billion (Both for the term ended March 2022)Subsidiaries: 18 (10 consolidated + 8 unconsolidated)Affiliates: 2 (to which the equity method is applied)Other associated companies: 1 (Mitsubishi Electric Corporation)4History of the RYODEN GroupFrom foundation to present dayIn 2022, RYODEN celebrated the 75th anniversary of its foundationLaunched the medium-term management plan “ICHIGAN2024”Established the New Business Promotion DepartmentEstablished the ICT Solution Business Headquarters222019181770th anniversary50th anniversary1413Sales exceeded ¥200 billion20-03Designated as an issue on the TSE First Section9795919085Sales exceeded ¥100 billionListed on the SecondSection of the Tokyo Stock Exchange797371Established as an agency for Mitsubishi sewing machines, radios, and electric refrigeratorsCompanyEstablished(1947)6463Built a global networkRatio of overseas sales exceeded 20%Ratio of overseas sales exceeded 10%Concluded a Renesas Technology special agency agreementConcluded a sole distributor agreement for Mitsubishi Electric cooling & heating, and overseas semiconductors and electronic devices 19- 475Concluded a sole distributor agreement for Mitsubishi Electric elevators and escalators, semiconductors, and housing equipment Concluded an agency agreement for the distribution of Mitsubishi Electric productsChange of the Company Name*To be determined after a proposed resolution is passed at the General Meeting of Shareholders held on June 23, 2022In April 2023, the company name will be changed to:RYODEN CORPORATIONFrom a trading firm to a company that contributes to realization of a sustainable society●Each and every one of the employees will create new value●RYODEN will evolve into a global corporation full of vitality6Suppliers and ClientsMitsubishi Electric- and Renesas-affiliated companies hold a comparatively large trading share among suppliers, and Mitsubishi Electric- and Panasonic-affiliated companies do so among clients, but others account for the majority of both suppliers and clients.Percentage of each supplier (on a purchase value basis)Percentage of each client (on a sales value basis)Mitsubishi Electric 16%Mitsubishi Electric 8%Other 49%Mitsubishi Electric Group companies 14%Other 71%Mitsubishi Electric Group companies 6%Renesas 20%Panasonic 15%Renesas Group companies 1%7Global Business DevelopmentRYODEN whose global business consists mainly of overseas subsidiaries established in 11 countries and territories has a total of 19 bases, including branch offices.RYODEN has built a global business system by unifying strategy with regional markets in mind and establishing close cooperation among its networks.EuropeFrankfurtInformation bases for cutting-edge products, technologies, and laws and regulations(As of April 1, 2022)8North AmericaTokyo (Head Office)San JoseIndianapolisDetroitAtlantaQueretaroCommunicating information on cutting-edge products, technologies, patents, etc.AsiaDalianSeoulHefeiChengduGuangzhouShanghaiTaipeiBangkokSrirachaSingaporeHong KongShenzhenHo Chi MinhPromoting solutions business with local partners strategicallyRYODEN’s Wide Range of Business DomainsSix New Business PlatformsFour Mainstay BusinessesFA SystemsCooling & Heating and Building SystemsICT SystemsElectronics9Two Businesses in New AreasDetails of Business by SegmentPurchasing and selling FA system products, cooling & heating and building system products, ICT system products, and electronic products and providing services incidental to each businessSales (outer circle) and operating profit (inner circle) by segmentElectronics●Electronic devices●Industrial systems, etc.[Net sales] ¥154.4 billion/67.3%[Operating profit] ¥4.85 billion/65.6%[Net sales] ¥42.9 billion/18.8%[Operating profit] ¥1.41 billion/19.1%FA SystemsFYE2022Consolidated net sales¥229.1 billionConsolidated operating profit¥7.06 billion●Smart agriculture●Healthcare●Information and communications, etc.・Information solutions・Security solutions・Imaging and visual solutionsICT Systems[Net sales] ¥6.9 billion/3.1%[Operating profit] ¥0.07 billion/1.0%10●FA equipment systems●Industrial mechatronics, etc.●Air-conditioning equipment●Housing equipment●Applied low-temperature equipment●Construction of clean room equipment●Industrial cooling & heating systems●Building systems, etc.[Net sales] ¥24.7 billion/10.8%[Operating profit]¥1.05 billion/14.3%Cooling & Heating and Building Systems*For sales, any fractional sum of less than ¥100 million is disregarded, and for operating profit, any fractional sum of less than ¥10 million is disregarded.*Percentages indicate the component ratio of each segment.2. Financial Results and Financial Conditions— Overview of financial results for the fiscal year ended March 2022 —11Highlights of Financial Results (Consolidated)[Market trends]pandemic ● Continuous recovery from the decline due to the COVID-19 COVID-19● Disruption of supply chains, shortages of supply of semiconductors, and sharp rises in energy prices● Demand for electronic components for in-vehicle and industrial equipment remained high, continuing to keep the supply-demand relationship for components and materials tight, while demand for machine tools for electric vehicles and semiconductor-related equipment continued to remain highShortages of supply of semiconductors[Situation of RYODEN]● RYODEN entered the second year in its Medium-term Management Plan “ICHIGAN2024,” focusing on creating value as a business creation companySituation in Ukraine12Summary of Financial Results (Consolidated)FYE2021(Millions of yen)FYE2022(Millions of yen)Year-on-year change(%)196,841229,12621,84326,14716.419.7106.799.47,0627,2855,004113.63,4153,6532,343Net salesGross profitOperating profitOrdinary profitProfit attributable to owners of parent13Changes in the Most Recent Five Years[In millions of yen]Consolidated net salesConsolidated operating profit236,494240,312230,087229,1267,062196,8415,6245,5595,078FYE2018 FYE2019 FYE2020 FYE2021 FYE2022FYE2018 FYE2019 FYE2020 FYE2021 FYE2022Consolidated ordinary profitProfit attributable to owners of parent7,2855,0043,5883,7313,8603,4152,3435,6485,7585,0553,65314FYE2018 FYE2019 FYE2020 FYE2021 FYE2022FYE2018 FYE2019 FYE2020 FYE2021 FYE2022Trends in Financial Results by Segment 1/4FA SystemsNet sales (Millions of yen)FYE2022Proportion of net sales18.8%Operating profit (Millions of yen)2,000Year-on-year change20.4%2QWhole yearProfit ratioOperating profitmargin (%)Year-on-year change146.3%8.0%7.0%1,410 6.0%41,460 35,713 42,985 1,5001,312 21,027 20,516 16,296 3.2%594 660 3.3%3.0%1,0005000572 1.6%134 5.0%4.0%2.0%1.0%0.0%60,00050,00040,00030,00020,00010,0000FYE2020FYE2021FYE2022FYE2020 FYE2021 FYE2022●Some of the systems handled were in short supply, but there were signs that capital investment projects for the manufacturing industry in Japan recovered.●Sales of FA systems for semiconductor production equipment and machine tools continued to be brisk.Main points15Trends in Financial Results by Segment 2/4Cooling & Heating and Building SystemsFYE2022Proportion of net sales10.8%Net sales (Millions of yen)33,200 Operating profit (Millions of yen)1,664 Year-on-year change-9.3%1,8001,50027,278 24,750 1,2005.0%20,00017,293 13,591 12,769 2QWhole yearProfit ratioOperating profitmargin (%)907 1,059 5.0%4.3%Year-on-year change-11.5%1,197 4.4%608 535 8.0%7.0%6.0%4.0%3.0%2.0%1.0%0.0%900600300040,00030,00010,0000FYE2020FYE2021FYE2022FYE2020FYE2021FYE2022● Strong sales of systems that met ventilation- and intense heat-related demand and those in the refrigeration and freezing areas underpinned the segment’s performance.● The overall financial results continued to be weak, affected by the delayed delivery of major products handled by RYODEN and the postponement and cancellation of new projects due to shortages of supply of components and materials.Main points16Trends in Financial Results by Segment 3/4ICT SystemsNet sales (Millions of yen)FYE2022Proportion of net sales3.1%10,0009,290 4,376 4,696 12,0008,0006,0004,0002,00002QWhole yearProfit ratioOperating profit (Millions of yen)Operating profitmargin (%)7,605 3.8%5.9%254 544371 Year-on-year change-8.0%6,999 2,128 8007006005004003002001000-100-2007.0%6.0%5.0%4.0%3.0%2.0%1.0%0.0%-1.0%-2.0%Year-on-year change-74.5%2921.1%74-146 FYE2022FYE2020FYE2021FYE2022FYE2020FYE2021● In the healthcare sector, sales of products related to COVID-19 and business related to in-hospital IT equipment continued to be strong.● Smart agriculture continued to be weak because the Company focused on constructing its own plant factory in an effort to shift its business model to production.● Network systems saw new orders for monitoring and other factory management systems continue to be sluggish.Main points17Trends in Financial Results by Segment 4/4ElectronicsNet sales (Millions of yen)Operating profit (Millions of yen)FYE2022Proportion of net sales67.3%150,000146,136 126,272 Year-on-year change22.3%154,456 2QWhole yearProfit ratioOperating profitmargin (%)Year-on-year change200.6%5.0%4,859 4.0%3.1%200,000100,00050,00006,0005,0004,0003,0002,0001,00003.0%2.0%0.0%72,536 71,919 58,146 2,194 1,616 1.5%1,820 1,097 1.3%1.0%309 FYE2020FYE2021FYE2022FYE2020FYE2021FYE2022[Japan]● Sales of products for “infortainment equipment” such as car navigation systems continued to be strong.● As demand for semiconductors grew, sales of industrial equipment-related products for semiconductor production equipment and machine tools continued to be brisk.[Overseas subsidiaries]● Sales of electronics for industrial equipment-related products in China and in-vehicle equipment in Europe and North America continued to be strong. Main points18Changes in Sales by RegionProportion of net sales by regionJapan (Millions of yen)Year-on-year change13.9%187,441 185,228 162,581 22,146 18,940 Whole yearChina(Millions of yen) Year-on-year change27.5%24,164 FYE2022North America2.1%Asia(excluding China)5.5%China10.5%Europe1.1%Japan80.8%Asia (excluding China)(Millions of yen) Year-on-year change26.3%12,547 14,278 9,933 250,000200,000150,000100,00050,000020,00015,00010,0005,000020,00015,00010,0005,00001930,00025,00020,00015,00010,0005,000020,00015,00010,0005,0000FYE2020 FYE2021 FYE2022FYE2020 FYE2021 FYE2022North America (Millions of yen) Europe (Millions of yen) Year-on-year change37.9%4,715 4,733 3,420 Year-on-year change25.7%2,469 1,486 1,965 FYE2020 FYE2021 FYE2022FYE2020 FYE2021 FYE2022FYE2020 FYE2021 FYE2022Factors for Increase/Decrease in Operating ProfitFactors for increase(Total +4,304)Factors for decrease(Total -657)(In millions of yen)Improvement in gross profit margin+620Increase in shipping and other various expenses-255Increase in other selling expenses-4027,062FYE20223,415FYE2021Increase in sales+3,68420Financial Conditions (Consolidated)[Financial conditions]Total assetsTotal liabilitiesNet assetsEquity ratio (%)[Cash flows]Cash flows from operating activitiesCash flows from investing activitiesCash flows from financing activitiesCash and cashequivalents21As of March 31, 2021(Millions of yen)As of March 31, 2022(Millions of yen)Increase/decrease140,97066,20474,76652.9%¥15,441 million¥10,594 million¥4,846 million(2.7) pointsFYE2021(Millions of yen)FYE2022(Millions of yen)125,52955,60969,91955.6%1,939183(1,052)21,120(7,623)(1,326)(883)11,577Prospects of Financial Results for the Whole Year of FYE2023 (Consolidated)Results for FYE2022(Millions of yen)Forecasts for 2Q of FYE2023(Millions of yen)Year-on-year change(%)Forecasts for the whole year of FYE2023(Millions of yen)Year-on-year change(%)Net sales229,126117,0009.0240,0004.7Operating profit7,0623,0007,1000.5Ordinary profit7,2853,1007,3000.2Profit attributable to owners of parent5,0042,15013.75,1001.98.29.422Changes in Results (Consolidated)Net sales (Millions of yen)Operating profit (Millions of yen)FA SystemsCooling & Heating and Building SystemsICT SystemsElectronics250,000240,312230,087229,126240,060200,000196,841150,000157,441 146,137 154,456 126,273 153,400 7,162 9,291 7,606 6,999 7,300 29,400 50,00029,116 33,200 27,279 24,750 46,595 41,460 35,713 42,985 49,960 FYE2019 FYE2020 FYE2021 FYE2022 FYE2023(Forecast)9,0008,0007,0005,0004,0003,0002,0000-1,0006,0005,6245,5592,464 2,194 97 544 1,206 1,664 7,0627,5803,970 4,936 3,4151,617 1,197 573 293 1,059 1,300 75 2,400 1,0002,000 1,312 1,334 FYE2019 FYE2020 FYE2021 FYE2022 FYE2023(Forecast)-90 *(Note) Company-wide expenses are not included.300,000100,000023Forecasts for FYE2023 by Segment (Consolidated)Results for FYE2022(Millions of yen)Forecasts for 2Q of FYE2023(Millions of yen)Forecasts for FYE2023(Millions of yen)49,9602,400Year-on-year change(%)16.7%FA Systems79.9%Operating profitBoth sales and profits are expected to exceed those of the previous year as 5G-related investments recover, the core business is strengthened, the business domains are expanded, and new businesses are created.Cooling & Heating and Building SystemsOperating profitSales and profits are anticipated to go up due to the maximization of profits from existing businesses, sales expansion in brisk markets such as ventilation- and intense heat-related measures, and efforts for ZEB proposals.22.7%Net salesNet salesNet sales42,9851,33424,7501,0596,99974ICT SystemsOperating profitIn addition to the early launch of a new plant factory and the advancement of existing DX businesses, business development for CN-related new systems is expected.29,4001,3007,300(90)18.7%4.3%-153,4003,970(0.9)%(19.6)%ElectronicsNet salesOperating profit154,4564,93624,2401,11013,3404602,940(130)76,5101,800Sales of automobile-related electronics for the Japanese and Chinese markets as well as 5G-related investments are expected to recover.Company-wide expensesOperating profit(341)Expenses for new-business development that do not belong to particular segments(240)(480)-Net salesOperating profit229,1267,062117,0003,000240,0007,1004.7%1.4%Total24Shareholder Returns[Dividend policy]● The basic principle is to increase internal reserves to strengthen the management foundation and the financial structure and utilize them as resources for investments to expand business, and profits will be returned to shareholders appropriately in accordance with the principle.● Dividends will be paid to return profits while taking into consideration factors such as consolidated financial results in each business year and the group’s medium- to long-term strategy.58CommemorativedividendYear endEnd of 2Q[Results of dividends paid]Changes in dividends (yen)56285822828 28 6050403020100FYE2021FYE2022Payout ratio52.0%25.2%2529(Planned)29(Planned)FYE202324.8%(Forecast)Dividends for the FYE2023● The dividend policy is to pay stable dividends from a medium- to long-term perspective rather than link them to short-term financial results. For FYE2023, the Company plans to pay an interim dividend of ¥29 and a year-end dividend of ¥29 for a total of ¥58 for the whole year.3. Future Management StrategyGoals for FYE2025 Financial ResultsOperating profit¥10 billion or more (¥7.06 billion)Net sales in new businessesOperating profit marginUp ¥15.0 billion compared to FYE2019 (Down ¥0.16 billion)Gross profit margin in new businesses18% (16%)3.8% (3.1%)ROE8.0% (6.9%)27Figures in parentheses indicate results for the fiscal year ended March 2022Focus Domains of RYODENHealthcareMedical imaging and monitoring systems, cloud systems for pre-symptomatic response, equipment for healthcare facilities, PLRProduction FacilitiesAI and image processing, labor savings, automation, prevention and maintenance, RFIDNext-generation MobilityCASE, MaaS– V2X, EV, ADAS, Autosar –Network SensingSociety 5.0 for SDGsSecuritySafetyIndustrial Cooling & Heating and Environment Management Systems (EMS)BEMS, FEMS, HEMS, energy saving, renewable energy, V2G, specialized air-conditioning systems, plant factoriesBuilding Management and FacilitiesZEB,building automation systemsEnvironment28Major licenses heldConstruction license(Types of construction for which licenses have been obtained) Special Construction License:Plumbing work, machine and equipment installation work Ordinary Construction License:Scaffolding and earth work Special Construction License:Electrical work Ordinary Construction License:Telecommunications work Telecommunications business registration Selling and leasing license for specially controlled medical devices Medical devices repair licenseForecasts of Cloud/Subscription Sales★Forecasts of cloud/subscription services sales in FYE20237020120(In millions of yen)210●HealthcarePackaged service of various systems for hospitals (Total Pack IT)●NetworksNetwork cameras and RoLa-WAN IoT service●DevicesCloud AI service (pest control)Microcomputing simulator for development of in-vehicle systems (VLAB license), etc.Subscription/cloud services have grown as a result of the past focus on solutions business.29Healthcare Business: Total Pack ITElectronic chartsOrdersMedical accountingRadiationTestingTestingPharmacyCompany ACompany BCompany CCompany DCompany ECompany FCompany GEach departmentEach companyHospitalHospitalElectronic chartsPackagedOrdersMedical accountingRadiationTestingTestingPharmacyEach departmentsuoiverPTI kcaP latoT30Communication Network (LoRa Communication)◆LPWA (Low Power Wide Area Network) is attracting attentionWide area/long distance (WAN)LPWA3G/LTE/5GOptical cablePLCBluetoothBLEWiFiLANNarrow area/short distance (PAN/LAN)Large power consumptionHigh speed/big dataHigh costSmall power consumptionLow speed/small dataLow cost31Communication Network (LoRa Communication)◆Slope applications utilizing LoRaWANTMwoDisaster risk reduction and sign management utilizing LoRaWANTMPortable machine (inclination sensor + temperature)920 MHz wireless moduleAcceleration sensor (inclination)Battery-driven (dry-cell battery)*When the LED unit is attached LandslideLaharLandslip[Comparison]Illustrations of observation using conventional automatic observation systems and that employing LoRa communication technologyAutomatic observation using conventional technology*Photo of the machine installedAutomatic observation using LoRaLoRa communicable areaCloudEmail distribution settings and Web displays can be done freely through settings/designs on the cloud server sideSmartphone, etc.*Illustration of the Gateway installed Email distributionNotification to mobile terminalsConfirmation on the website32Wide-area notification via the InternetSafety Solutions Offered by RYODENVirtual environment solutions for mobility: reducing development man-hours by offering virtual tests and analysesMILS/SILS development supportHILS development supportUser specificationsCode-based MILS controlPlant model developmentMicrocomputing simulatorVirtual ECU simulationsProviding microcomputing simulator VLAB and supporting development33Affordable version of motor simulatorSmart-HILSCharacteristics of simulator proposals(1) Enabling a wide range of proposals in all areas listed above(2) RYODEN’s unique know-how such as the WARXSS graphic simulator and the VLAB microcomputing simulator is available(3) Enabling scalability proposals using the customer’s environment(Pest Control)provides a cloud AI service to contributeto sustainable pest control and food safetyProviding only necessary informationReducing the time required for data confirmationDetecting only harmful animals using RYODEN’s unique AIContributing to initial, early responseProviding information on detected animals in real timeThe sensor can be chosen from between the two types according to the situation*Reference image of rats being detectedEnabling remote surveillanceEnabling confirmation of detection results and past data anywhere at any time34Thermal typeCamera typeThe thermal type has a high-performance sensor that uses the most advanced technology, significantly reducing the burden of privacy risks because of thermal imagingVisualizing and analyzing information on detected animalsVisualizing information useful for anti-rat measures, contributing to more effective countermeasuresRYODEN’s Value Creation ModelPromoting GX (Green Transformation)Ryoden CorporationStrengthsValue Generated in Focus AreasTechnological ProwessHealthcareMedical imaging and monitoring systems, cloud systems for pre-symptomatic response, equipment for healthcare facilities, PLRGlobal NetworkBroad Business DomainsDXProduction FacilitiesAI and image processing, labor savings, automation, prevention and maintenance, RFIDNext-generation MobilityCASE, MaaS– V2X, EV, ADAS, Autosar –Network SensingSociety 5.0 for SDGsMedium-term Management Plan(FYE2021 to FYE2025)SecuritySafetyIndustrial Cooling & Heating and Environment Management Systems (EMS)BEMS, FEMS, HEMS, energy saving, renewable energy, V2G, specialized air-conditioning systems, plant factoriesBuilding Management and FacilitiesZEB,building automation systemsStrengthen the Foundation for Business PromotionEnvironmentCorporate GovernanceHuman Resources ManagementEnvironment Management35Establishment of the Environmental VisionOn April 1, 2020, RYODEN established the environmental vision for the period up to 2030.In its business activities, the RYODEN Group aims at achieving the following important SDGs:Ryoden Corporation Group’s Environmental VisionBy 2030, the Ryoden Corporation Group willStrengthen initiatives for a decarbonized society[Priority initiatives]• Strive to achieve zero greenhouse gas emissions associated with electricity usage• Provide solutions that contribute to reducing environmental burden, such as ZEBWe will create environmental solutions to contribute to the concept of product life cycles to enhance environmental value36RYODEN’s Initiatives for a Decarbonized Society◆ TCM (Total Carbon Management)RYODEN Group’s unique environmental activitiesRYODEN’s business activitiesGreenhouse gas emissionsContribution to reduction in greenhouse gas emissionsVisualizing results as much as possibleAll personnel grasp and analyze resultsAll personnel make united efforts for greater contribution to reduction in GHG emissions in the entire supply chain37RYODEN’s Initiatives for a Decarbonized Society (Scope 2)◆ Example of initiatives to realize the environmental vision— RYODEN aims at covering all power it consumes with power it generates through its photovoltaic power generation equipment at the Kurihara Photovoltaic Power Plant —= Scheme using clean electricity, which reduces net GHG emissions to zero =Kurihara Photovoltaic Power Plant(owned by Ryoden)Kurihara City, MiyagiRegistered as renewable energyMETI Agency for NaturalResources and EnergyNon-fossil fuel energy value in the form of non-fossil fuel energy certificatesNon-fossil fuel energy certificate trading marketAuction (bidding)BaseWhen the switchover is completedBasePlanned timing for switchoverHamamatsu OfficeAugust 1, 2021Iwaki OfficeNovember 2021Head Office/Eastern JapanAugust 16, 2021Takamatsu OfficeKyoto OfficeSeptember 12, 2021Maebashi OfficeTechno OsakaSeptember 15, 2021Utsunomiya OfficeGradually after the spring of this yearNew electric power company(Daiwa House Industry)Ryoden Corporation(individual offices)Designated purchases of non-fossil fuel energy certificatesfrom the Kurihara Photovoltaic Power Plant from the trading marketElectricity and non-fossil fuel energy certificates from the Kurihara PhotovoltaicPower Plant are combined and purchased as clean electricity• The switchover is under way first at RYODEN’s own building and buildings all of whose floors are rented.• If the switchover is completed at all locations listed in the left table, approximately 60% of power consumed by Ryoden in Japan will be replaced by clean electricity.38RYODEN’s New Initiatives for a Decarbonized Society (Scope 2)◆ Smart agriculture business: next-generation plant factoryNext-generation plant factory* Mega-solar photovoltaic power generation equipment is installed, and the power thus generated is all consumed at the plant factory.* Substantial energy conservation is achieved through new environmental control equipment and the REMCES integrated IoT system.* Food loss is reduced through processing and freezing equipment as well as reduction-type garbage treatment equipment.The amount of electricity purchased for cultivation rooms is reduced by 50% compared to the previous level.GHG emissions from the plant factory are reduced by 1,764 tons annually.(Reference: The RYODEN Group emitted 1,495 tons of GHG in FYE 2021)39RYODEN’s Initiatives for a Decarbonized Society (Scope 3)◆ Supporting in realizing ZEB (net zero energy buildings)Equipment consultationPhotovoltaic facilitiesMain ZEB facilitiesEMSBattery equipmentAir conditioning, lighting, hot water supply, ventilation, elevators and escalatorsEnergy-creation and energy saving equipmentV2X*Energy saving consultationConcept of ZEB buildingsHigh-performance insulating materials are used for external coverings. Air-conditioning combines a high-efficiency inverter air-conditioning system with a sensor and an all-heat converter, using the night purge system to achieve reduction in air-conditioning load. LED lighting is used with energy consumption reduced using a human detecting sensor. A high-efficiency heat pump hot water supplier is used for hot water supply. Efficient equipment operation is possible due to BEMS-based load control and tuning functions. ZEB is achieved through energy created using photovoltaic power generation.ZEB rankResult of introduction by RyodenThe highest rankZEBhas been obtaineddetaerc ygrene fo teganecrePPercentage of primary energy reduced(Not including created and other types of energy)△Example of ZEB introduced by RYODENRyoden Corporation is registered as ZEB PlannerA ZEB Planner, based on the gist of the ZEB Roadmap, is an entity which utilizes the ZEB Design Guidelines or the Technical and Design Knowhow on the Design of ZEB and Energy-saving Buildings of each company. A consulting window is established at such entity for the realization of ZEB widely for the general public, with the aim of supporting business and disclosing the activities.40RYODEN’s Initiatives for a Decarbonized Society◆ TCM (Total Carbon Management)Total GHG emissions (Scope 1, 2, and 3 combined)FYE2019GHG emissions (t-CO2)GHG emissions (t-CO2) FYE2020ProportionComparison with previous fiscal yearGHG emissions (t-CO2)FYE2021Proportion Comparison with previous fiscal year7,227,3927,146,547100.00%99%6,200,480100.00%87%Scope 1Company cars5545050.01%Offices (for electricity used)1,1281,0230.01%91%91%4019980.01%0.01%7,225,7107,145,01999.98%99%6,199,08199.97%Scope 2Scope 3Cat.11Use of marketed products6,364,3596,328,02688.55%99%5,497,61488.65%*Cat.11 indicates the total of only particular products selected by RYODEN(53 items)80%98%87%87%UpstreamRYODENDownstream(4) Transport and deliveryBurning of fuelUse of electricity(1) Raw materials(7) Commuting*Other:(2) Capital goods, (3) Activities related to fuel and energy which are not included in Scope 1 and 2, (5) Waste, (6) Business trips, and (8) Lease assets(11) Use of products(12) Disposal of products*Other:(9) Transport and delivery, (10) Processing of products, (11) Lease assets, (14) Franchise, and (15) investmentsScope 1: Greenhouse gas emitted directly by the business operator itself (burning of fuel and industrial processes)Scope 2: Indirect emissions associated with the use of electricity, heat, and steam supplied by other companiesScope 3: Indirect emissions other than those in Scope 1 and Scope 2 (emissions by other companies as associated with the business operator’s activities)41RYODEN’s Initiatives for a Decarbonized Society◆ Zeroboard, Inc.Building an ecosystem with a partner company as a CO2 emissions data infrastructure, accelerating efforts to realize a decarbonized societySolutions providerProviding solutions for decarbonization• Retailing of electricity• Gas• Consulting firm• Energy conservation solutions providerCO2 dataSolutionsSubsidiesCO2 dataZeroboard usersGreen loansCO2 dataRYODEN plans to work with Zeroboard in two areas: providing solutions for decarbonization and visualizing supply chainsVisualization of supply chainsLocal governmentRealization of a zero-carbon cityVisualization in the local community• Local government• Related government agencies (Energy Conservation Act and the Act concerning the Promotion of the Measures to Cope with Global Warming)Financial institutionsDecarbonization of borrowers• Banks• Insurance42RYODEN’s Initiatives for a Decarbonized Society◆ Zeroboard, Inc. provides cloud services to calculate and visualize greenhouse gas (GHG) emissionsThese cloud services enable calculation and visualization of GHG emissions from business activities and supply chains in accordance with the GHG Protocol, an international standard Calculation of GHG emissions from a supply chain (Scope 1 to 3) or each product, which requires a huge amount of data Highly visible dashboard to manage reduction in GHG emissions and simulate cost-effectiveness Output of data to meet reporting methods under various domestic environmental laws and ordinances in addition to the GHG Protocol and other international disclosure formats User-friendly operability that does not require technical knowledge System appropriateness guaranteed by international judging and certification organs(ISO14064-3*3-based verification)Zeroboard makes it possible to achieve greater efficiency in calculating GHG emissions and disclosing their data and manage reduction efforts properly.Strong point 1Strong point 2Strong point 3Supporting calculation of emissions in supply chainsOutput of data in various reporting formatsReduction management using the dashboardDon’t you have these problems?It takes time to collect GHG data (Scope 1 to 3).Multiple management is needed to meet domestic environmental laws and ordinance and disclose information to the financial market.Data have been visualized, but we do not know where we should start reduction.43RYODEN’s New Initiatives for a Decarbonized Society (Scope 3)◆ General development of integrated cloud-type management IoT systemssupports everything from manufacturing to the lives of people.It is RYODEN’s original IoT platform.Characteristics• Achieving remote-controlled visualization and high scalability using cloud systems• Saving personnel and labor through unified management and control of equipment and environmental information• Supporting multi-vendor connectivity using open interfacesCreating an open network compatible with different manufacturers’ productsSW-HUB: various open interfacesSurveillance cameraMonitoring entry and exitAir-conditioningElevatorsVentilationLightingUtilitiesSubstationsDisaster preventionProduction facilitiesEnergy conservation, intensive management, surveillance, control, visualization, monitoring of signs of failure, and remote maintenanceAutomation serversRemote monitoring/control44Smart Agriculture BusinessTrends in the Agriculture Market and RYODEN’s Position◆ Smart agriculture business: next-generation plant factory(1) Trends in the plant factory market(2) RYODEN’s positionSocial and agricultural issues1. Share of leading plant factory operators 2. Share of equipment and machinery in 2020constructors in 2020Shortage of supporters due to ageing populationDecrease in the number of people engaged in agricultureDecrease in the area of agricultural landGlobal warmingResponse to climate changeIncreasingly devastating disastersGrowing orientation to safetyDemand for stable supplyOther 20%Amount of vegetables produced at the plant factory on a shipment basisMarket forecasts of construction of plant factoriesProduction volumeAmount of factories constructedl)yad/stnap 000,01( emuov lnoitcudorP(FY)Source: Yano Research Institute Ltd.出典 矢野経済研究所Source: Yano Research Institute Ltd.(FY)Company C 10%Farmship36%Company H, 1.0%Company G, 2.6%RYODEN33.7%Company F, 3.4%Company E, 4.8%Total amount produced and supplied daily: 30 tonsCompany B 13%Company D, 6.7%¥10 billion yen/year marketCompany A, 12.5%Company A21%Company C, 6.7%Company B, 6.7%Fuji Keizai Agriculture, Forestry, and Fisheries Business 2020 (Excerpt))noillim 001¥( detcurtsnoc seirotcaf fotnuomAThere is a growing need for plant factories, one efficient type of agriculture, which achieves stable supply and conservation of personnel and labor. The market is expanding at an annual rate of over 20%.RYODEN has built a competitive business model through collaboration!RYODEN also gained a firm position in the area of next-generation agriculture, which has high barriers to entry!46Trends in the Agriculture Market and RYODEN’s Position◆ Smart agriculture business: (1) Creation of new businessesBlock-FARM’s Numazu plant factoryCompleted on May 26, 2022Correlated energy-saving air-conditioning systemUtilization of renewable energyIntegrated IoT system for next-generation agricultureAutomated equipment based on roboticsfor Smart-AgriEstablishment of an R&D centerEstablishment of Ryoden’s solutions showroom・Energy conservation signage・Panoramic viewImplementing unique solutions to contribute solving social issuesEnhancing the Group’s corporate valueWorking with the local community and administrative agencies for construction and launch of the projectMinistry of Agriculture, Forestry and Fisheries: Comprehensive support to develop strong supporters of agricultureAdoption of projects to empower productionMinistry of the Environment: Subsidizing photovoltaic power generation for agricultureShizuoka Prefecture: Certification of the plant as one of the Fuji-no-kuni Frontier Promotion Areas47Trends in the Agriculture Market and RYODEN’s Position◆ Smart agriculture business: (2) Expanding the business domainsMaking Farmship, Inc., the collaboration partner, RYODEN’s affiliate through additional equity investments• RYODEN takes leadership in strengthening each function of the next-generation agricultural value chain by shifting from horizontal division of work to horizontal integration• Establishing a business system that enables RYODEN to gain the early developer’s benefits by responding to future demand expansion• Developing energy- and labor-saving business in the food industry, a new domain for RYODEN• Acquiring skills in all processes up to sales and logistics to prepare for overseas business developmentPrevious[1] FARMSHIP[2] RYODEN(+ BlockFARM)Future[1] + [2]48DevelopmentEarly investmentProductive cultivationLogisticsSales ServicesProfitCorporate management Personnel administration and labor affairs Procurement, etc.Acquiring all integrated functions and activity domains in next-generation agricultureTrends in the Agriculture Market and RYODEN’s Position◆ Smart agriculture business: (3) Enhancing business value — strengthening the manufacturer’s functions of plant factory systems —Technological capabilitiesUniquenessEngineering systemsSmall-scale plant factory systemLarge-scale plant factory systemFacility horticultural systemPlanning, design, technical construction systemEnvironmental design: temperature and air current simulationsEnergy-saving environmental control systemRemces integrated IoT systemLED lighting for cultivationPlanting robot system (being developed)Cleaning systemAutomated equipmentDevelopment of dedicated materials (molded products)49Contact for InquiriesRyoden Corporation3-15-15, Higashi Ikebukuro, Toshima-ku,Tokyo 170-8448General Affairs Departmente-mail: ryoden_ir@mgw.ryoden.co.jpTEL: 03-5396-6111FAX: 03-5396-6448NoteStatements of plans for financial results and other prospects of the future included in this presentation are based on the information so far obtained by the Company and the certain assumptions considered as reasonable, and actual financial results, etc. may differ significantly from the statements due to various factors. Major factors include:• Rapid changes in the economic situation of major markets (such as Japan and Asia), consumption trends, and supply of and demand for products• Significant fluctuations in the exchange rate of yen against the U.S. dollar, etc.• Substantial changes in quotations in the capital market50