Integrated Report 2023
CONTENTS
About Us
Hioki Philosophy | 3 |
A History of Creations and Challenges | 4 |
Measurement Solutions that | |
Foster the Decarbonization of Industry | 5 |
At a Glance | 6 |
Management Strategy (Value Creation Stories)
Top Message | 7 |
CFO Message | 12 |
Innovation at Hioki | 14 |
Marketing at Hioki | 15 |
Hioki's Human Resources Strategy | 16 |
Hioki's Value Creation Story to Realize Vision 2030 | 17 |
Hioki's Strengths and Management Strategies | 18 |
Hioki's Value Chain | 19 |
DX Initiatives | 20 |
Vision 2030 Business Direction | |
-Contributing to the decarbonization and | |
electrification of all industries- | 21 |
Five Innovations for Realizing Hioki's Vision 2030 | 23 |
Table in the shape of the "O" as the Hioki logo
(Inside the entrance of the Creative Collaboration Laboratory)
Sustainability Management
Message from Chief Sustainability Officer | 26 |
Addressing the TCFD Recommendations | 28 |
Contribution to Environmental Protection | 29 |
Communication with Stakeholders and Initiatives | 30 |
Board of Directors, | |
Auditors, and Executive Management Board | 33 |
Corporate Governance | 34 |
Messages from Outside Directors & | |
Outside Corporate Auditors | 36 |
Risk Management and Compliance | 38 |
Data
Management Discussion and Analysis | 39 |
Eleven-Year Financial Data | 40 |
Non-Financial Data (Social Data) | 41 |
Stock Information | 42 |
Company Profile | 43 |
Editorial Policy
Hioki E.E. Corporation (Hioki) aims to provide shareholders, investors, and other stakeholders with a better understanding of the Group's real potential, including intangible capital that is the source of value creation, which deserves wide disclosure. We publish an integrated report that summarizes financial and non-financial informa- tion. For more details, please visit our website. https://www.hioki.com/
Reporting Period | Reference Guidelines | Forward-Looking Statements | ||
January 1, 2022-December 31, 2022 | • GRI (Global Reporting Initiative) Standards | The forward-looking statements herein are | ||
(Some information from January 2023 onward is | • ISO 26000 "Guidance on Social Responsibility" | estimates based on information available | ||
included.) | • VRF (Value Reporting Foundation) | at the time of publication and encompass | ||
"International Integrated Reporting Framework" | known and unknown risks and uncertainties. | |||
Scope of Reporting | • Ministry of Economy, Trade and industry (Japan) | Various factors may cause actual results to | ||
Data for the Hioki Group (Hioki and its 11 con- | "Guidance on Integrated Disclosure and Dialogue | differ materially from those described in the | ||
solidated subsidiaries) is compiled and reported. | for Value Creation" | forward-looking statements. | ||
When the scope of the data to be covered differs | ||||
from the scope of the report, it is clearly indicated | ||||
case by case. | ||||
About Us
Management Strategy (Value Creation Stories)
Sustainability Management
Data
HIOKI Integrated Report 2023
Transforming People Value into Corporate Value
Hioki Philosophy
Hioki's corporate philosophy, established in 1986, embodies its views on management since its founding. Since then, we have always followed this philosophy.
We will further accelerate Hioki's philosophy-driven management in our quest to realize Vision 2030.
The HIOKI logo
The "O" is not a simple circle but an oval.
It symbolizes Earth embracing an egg of creation, nurturing people as it brings forth new things and contributes to the development of society.
Respect
for Humanity
Contribution
to Society
Hioki will build a free and open environment where employees can maximize their potential and abilities.
Our aim is to foster the creativity and individuality of all persons and help them become the best version of themselves.
To ensure that personal development is the driving force behind Hioki's evolution and achieve lasting growth and development, management demonstrates "Respect for Humanity" to achieve a high degree of harmony between individual potential and organizational goals.
As a manufacturer, Hioki contributes to the security and advancement of society and the happiness of people by providing high-quality products and unparalleled services.
As a member of the communities we serve, we work actively to support the development of local youth and protect the local environment to make an educational, cultural, and environmental contribution.
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About Us | Management Strategy (Value Creation Stories) | Sustainability Management | Data | ||||
A History of Creations and Challenges
Evolving in tandem with changing social issues
Since its founding in 1935, Hioki has single-mindedly developed its electrical measurement business.
The global trend toward decarbonization has accelerated in recent years, leading to a rapid increase in demand for the effective use of energy and the measurement of electronic components that support this trend.
- Net sales
- Net sales (electronic measuring instruments)
1980 | 1990 | 2000 | 2010 |
History of product development | [Key products (electronic measuring instruments): Contributing to industries targeting decarbonization] |
HIOKI Integrated Report 2023
(Millions of yen) 50,000
40,000
30,000 | |||
20,000 | |||
・・・・ | 10,000 | ||
0 | |||
2020 | 2022 | 2025 | (FY) |
(Forecast) |
Current | 1971 | 2000 | 2003 | 2018 |
Clamp | Clamp on | Clamp on | AC/DC | |
Sensors | ||||
Ammeter | Probe | Probe | Current Sensor | |
CT-300 | 3274 | 3276 | CT6875 |
Energy | 1978 | 1998 | 2014 | 2017 | 2019 |
Power | |||||
Clamp on | Power | Clamp on | Power | Power Quality | |
Meters | |||||
Power HiTester | HiTester | Power Logger | Analyzer | Analyzer | |
3131, 3133 | 3193 | PW3365 | PW3390 | PQ3198 |
2022
AC/DC Current Probe CT6841A
2021
Power
Analyzer
PW8001
Current sensor essential for performance evaluation of high-efficiency inverters
World's best-in-classhigh-speed response power analyzer
Batteries | Battery | 1996 | 2005 | 2013 | 2014 | 2016 |
3550 | 3561 | RM3545 | ST5520 | BT3554 | ||
Testers | Battery | Battery | Resistance | Insulation | Battery | |
HiTester | HiTester | Meter | Tester | Tester | ||
Components | Impedance | 1976 | 2005 | 2009 | 2014 | |
Capacitance | C HiTester | Resistance | Impedance | |||
Analyzers | ||||||
HiTester | 3504 | HiTester | Analyzer | |||
3501 | RM3542 | IM7580s | ||||
Growth phase with | Modernizing management and | Striving to become a high-value-added company by offering one-of-a-kind products and services | ||||
mass production | focusing on R&D | |||||
2020 | Supporting the |
Battery | safety and reliability |
of mass-produced | |
HiTester | rechargeable |
BT3562A | batteries |
2022 | Ensuring the reli- |
LCR Meter | ability of electronic |
components to | |
IM3523A | ensure unstoppable |
5G infrastructure
Toward Vision 2030
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About Us
Management Strategy (Value Creation Stories)
Sustainability Management
Data
HIOKI Integrated Report 2023
Measurement Solutions that Foster the Decarbonization of Industry
Fields that change with the times | eVTOL | Cloud | |||
Communication base station | |||||
Rechargeable battery plant | Substation | ||||
Mega solar power plant | |||||
Data center | |||||
Water electrolysis plant | |||||
FC truck | |||||
AC/DC converter station | Charging station | Solar panels | |||
ESS | xEV | ||||
Hydrogen production plant | ZEB housing | Power semiconductor plant | |||
ZEB offices | |||||
Hydrogen tanks | |||||
Offshore wind power generation | Water electrolysis plant | FC bus | |||
FC train | |||||
Components factory
Hydrogen carrier | |
Hydrogen station | Large storage battery |
Fast charging |
Developing decarbonized energy | Reducing energy loss | |
Production and | Power efficiency solutions | |
transportation solutions | • Power conversion | |
• Renewable energy | • New battery types | |
• Hydrogen energy | • Power semiconductors | |
• Solar panels |
Utilizing electrical energy
Rechargeable battery solutions
- Safety and performance testing
- New material evaluation
- Energy storage systems (ESSs)
Digital transformation
Measurement data solutions
- Cloud-computingenvironment
- Remote measurement and data collection
- Data analysis
Power Analyzer | AC/DC Current Probe | Bypass Diode Tester | Clamp on Power Logger | Current Probe | Memory HiCorder | Electrode Resistance | Battery HiTester | Battery Tester | Memory HiLogger | GENNECT | Clamp Logger |
PW8001 | CT6845A | FT4310 | PW3360 | CT6700s | MR6000 | Measurement System | BT3562A | BT3554-50 | LR8450-01 | Cloud | LR5051 |
RM2610 |
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About Us | Management Strategy (Value Creation Stories) | Sustainability Management | Data | ||||
At a Glance
Hioki by Numbers
Since its establishment, Hioki has addressed customer needs and challenges as a manufacturer of electrical measuring instruments. In this section, we introduce the current status of Hioki, which aims to be a front-runner in the industry.
HIOKI Integrated Report 2023
Financial results | Ratio of overseas sales | CO2 emissions (Scope 1 + 2) | ||||||
Profit | ROE | |||||||
¥5.33 billion | 17.1% | 63.9% | 815 t-CO2 | |||||
Return to shareholder | Profit/net assets per share | Percentage of employees who took childcare leave | ||||||||
Annual dividend per share | Dividend payout ratio | Profit | Net assets | Female employees | Male employees | |||||
¥160 | 41.0% | ¥390.47 | ¥2,401.01 | 100% | 50% | |||||
Ratio of operating profit | Number of employees | History of Hioki | ||||||
to net sales | Whole Group | Percentage of employees stationed overseas | Since establishment | |||||
20.6% | 1,009 | 23.3% | 88 years (established in 1935) | |||||
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About Us
Top Message
Management Strategy (Value Creation Stories) | Sustainability Management | Data | HIOKI Integrated Report 2023 | ||||
Becoming a solution creator that flexibly finds optimal solutions to changing conditions
We are now living in a "society with no correct answers." And the business environment surrounding Hioki is changing dramat- ically. In addition to addressing climate change and rising energy prices, we must accelerate our efforts to realize a decarbonized society. When I visit countries outside Japan, I am struck by the speed of change in the external environment and the speed with which those countries are responding. This gives me a sense of urgency that Japan is lagging behind.
Becoming a front-runner in the electrical measurement instruments industry by placing "people" as the source of our growth
Hioki contributes to society as a manufacturer of electrical
measuring instruments. These are considered the essential tools
Presidentof industry that support the R&D efforts and production lines of our corporate customers. Going forward, we must address changing conditions, which are becoming more complex, and develop growth strategies based on short-,medium-, and long- term perspectives. From a global perspective, varied national policies on issues such as sustainability necessitate that we implement different measures for each country. We also need to be flexible and swift in developing optimal solutions.
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About Us
Management Strategy (Value Creation Stories)
Sustainability Management
Data
HIOKI Integrated Report 2023
For this, it is important for employees to think, act inde- pendently, and be aware to provide new value to society. With this in mind, I have focused on returning to Hioki's philosophy of "Respect for Humanity" and "Contribution to Society" (see page 3 for details) or, in other words, "philosophy-driven" management. Looking back on the intention behind the philosophy, which was formulated in 1986, I asked our management team at the time, "What things do you wish to value?" We concluded that the core of the philosophy is that "each person should individually think things through."
The source of Hioki's growth is its people, and the slogan of Vision 2023, our long-term management policy announced in 2020, is "Beyond Measure." In addition to the technological perspective, which includes creating new inspection standards, it refers to our belief that all Hioki Group employees should be "solution creators" who go beyond "measurement" to think what kind of value they can provide to customers worldwide.
As many of our customers take on new business challenges, we are receiving more and more inquiries and requests for consultation about ways to solve their problems. To respond quickly, we must mobilize all our Company's capabilities. Internally,
we have reinforced our corporate culture of cooperation and support, where we pool our wisdom across departmental boundaries to solve customer issues. As a result, we now hear many more words of gratitude than before. In this way, Hioki will work as one to focus on problem-solving and building relationships of trust with its customers. We will adhere to this stance rather than blindly sell products or offer discounts, which will also help bolster sales.
Hioki has various systems in place for employees who aspire to become solution creators. Our new HR system, launched in 2018, was designed to allow employees to change their job roles, participate in projects of interest, and attend career and purpose training. We also announced our medium-term key policy, HI-CEO+ (see page 32 for details), which covers the period from 2023 through 2025. This policy calls for "all employees
to seek change, respond to change, and act on change as an opportunity with a sense of ownership (entrepreneurial spirit)." Through its business and following its corporate philosophy, Hioki is helping employees fulfill their individual sense of purpose-that is to say-what they desire to "do, achieve, challenge, and contribute." We are working to create
- Hioki's concept of solution creators
Able to build | Always thinking |
of ways to solve | |
trust with | customer issues |
customers | |
Able to provide | |
Able to think and | new value to society |
act independently |
a system that allows individual employees to challenge themselves with a broader range of choices for self-realization.
Aiming to be an industry front-runner and becoming an indispensable presence for electrical measurement solutions
By balancing the two goals of resolving social issues and achieving sustainable growth, Hioki aims to become a highly profitable company. Our targets are to achieve an operating profit margin of 20%, an overseas sales ratio of 70% or higher, and a return
- Our Aspiration for Vision 2030
Our Mission
Our Vision
( 10 Years )
in the Future
To contribute to stability and development of society by promoting customers' safe and effective use of energy through electrical measurement
"Beyond Measure"
As an industry front-runner, Hioki will become a solution-creator that helps forge a sustainable society together with customers worldwide by continuing to evolve what it means to "measure."
on equity (ROE) of 10% or higher. Rather than chasing after scale, however, we are committed to delivering value, so we do not consider short-term revenue growth to be our ultimate goal.
In Hioki's Vision 2030, we indicated where we wanted to be in
10 years (Hioki in 10 Years) and how we will contribute to society. In it, we focus on what we can do to: one, solve social issues with customers around the world who are embracing the challenge of decarbonization; and two, challenge ourselves with new endeavors and create new value. We will fulfill these goals by advancing measurement technologies as an industry front-runner. While identifying customers' needs, we will develop new markets where Hioki can contribute. By formulating growth strategies based on these two axes, we aim to become an industry front-runner.
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About Us
Management Strategy (Value Creation Stories)
Sustainability Management
Data
HIOKI Integrated Report 2023
In a world centered on electric energy, Hioki can provide solutions in all fields that use electricity infrastructure, including solar power generation, power distribution, and power con- version. We also invest in key markets with new social systems. In May 2023, for example, we helped plan and organize the ASEAN Battery & Electric Vehicle Technology Conference, held in Indonesia. Various organizations, including a government-led consortium, participated in this conference, representing a next-generation business model. Through our involvement, we aim to spread recognition that "when it comes to battery measurement, you go to Hioki."
As an independent solution creator, Hioki will work to become indispensable in the global market.
Rather than simply selling products, we offer one-of-a-kind value to customers worldwide who are trying to create new technologies. It is also essential to become an indispensable presence that people turn to when they need advice. By doing so, we can join other front-runners at the top of our industry. If we can find a niche that has not yet been established, we can add even greater value. This is one principle of Hioki's growth strategy for the medium and long term and the direction of its business development in new global markets (see page 15 for details).
- Management strategy to realize "Vision 2030"
Strategically | Strategically | |
autonomous | essential | |
Timely | ||
Marketing | and | Innovation |
speedy | ||
Achieving speedy decision-making and execution so that we can provide products and services in a timely manner
We see an increase in open innovation and collaboration around the world. Hioki is also promoting collaboration and relationship strengthening with companies outside Japan.
One of these companies is ETAS, a subsidiary of Bosch (the German automotive parts manufacturer), known for its vehicle R&D software. During the COVID-19 pandemic, we had to communicate online, which in overseas marketing ironically enabled us to make swifter product offerings. Hioki has sales subsidiaries and engineers stationed in major overseas countries. All of them take ownership of their work. This allows us to provide products and services when needed, by listening to our local customers' specific requirements on-site. We have also reformed our organizational structure by appointing a new Chief Marketing Officer (CMO) to ensure that overseas markets are correctly explored and decisions are made quickly. Until recently, quite a few of our customer solutions had been passive. Our current desire is for each of us to act more independently and proactively to provide new value, thereby demonstrating Hioki's indispensability and presence.
As I mentioned earlier, Japan is lagging behind in terms of responding to changes in the global external environment. However, the opportunity to turn things around will definitely come. In preparation for that time, we will closely monitor issues from Japan and consider the best ways to address them.
Initiatives to realize Our Vision
Addressing social needs in a wide range of fields
The Integrated Report that was published in 2022 gave us the opportunity to help people understand what we value in our businesses. To make it easier to understand various aspects of our businesses, we have also become more creative in the way we provide information. Instead of just disclosing results, we decided to give clear indications of our future direction.
In the process, we have attracted attention from domestic and foreign investors, business partners, and listed companies. This has resulted in Hioki being featured in an increasing number of national newspapers, specialized magazines, and other media.
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About Us
Management Strategy (Value Creation Stories)
Sustainability Management
Data
HIOKI Integrated Report 2023
The slogan of Vision 2030 is "Hioki in 10 Years." In our management strategy for realizing that vision, we have defined five innovations: creating new customer value, building new production systems, building relationships for creative collaboration with customers to forge a new society, building new supply
- Our technologies and products that meet social demands and contribute to EVs
Now
Before
Market demand and | Near future |
the role of measurement |
chains, and realizing new internal structures. Innovation will be manifested through combinations of new or old elements, and we are making Companywide efforts to make progress in the five innovations.
For example, we established the Creative Collaboration Laboratory in March 2023 to create new customer value. This facility provides an environment for joint research with customers on batteries and power electronics, as well as hydrogen, a next-generation energy source. It serves as a forum for equal conversation about creating solutions. Through it, we can now explore how our customers are creating sustainable social innovations through the processes of development and experimentation. Immediately after the lab's establishment, we succeeded in joint development in the motor field and achieved
World-leading | Hioki's technologies |
Japanese technologies | and products |
High-efficiency motors | Resistance meters, |
LCR meters | |
Inverterization of | High-precision |
home appliances | power measurement |
Advanced battery | Battery testers |
technologies | |
Energy-saving technologies, | Power quality analyzers |
renewable energy | |
(high-quality electricity) |
Motors
Inverters
Batteries
Charging
infrastructure
- High efficiency | Improved motor quality | |
- High reliability | ||
Improved | ||
- Safety | ||
energy management | ||
- Improved | ||
performance | Contributing to overall | |
- Low cost | ||
battery technology | ||
- Stability
- ReliabilityImproved reliability of the power grid
great results. As our sales subsidiaries continue to grow, we are considering establishment of similar facilities in those locations.
-
Five innovations:
Creating new combinations in multiple fields
Creating new customer value
Building new production systems
Building relationships for creative collaboration with customers to forge a new society
Building new supply chains Realizing new internal structures
To build new production systems, we reviewed our existing systems and improved our productivity. In 2021, we started operation of a factory on the site of our partner company in Sakaki, Nagano Prefecture (Sakaki being adjacent to Ueda, where our head office and main factory are located). Then, in 2022, we extended the floor space of our head office factory. These measures have enabled integrated production and improved overall productivity. Meanwhile, to strengthen cooperation with suppliers, we held a face-to-face meeting with them to discuss materials procurement schemes in January 2023, for the first time in three years.
While investors ask us questions about how we are reviewing our business portfolio, we can say our strength lies in our ability to combine electrical measurement solutions in multiple fields.
Rather than subdividing our portfolio along product lines, we believe it is important to combine solutions and create new technologies in response to market needs (see page 14 for details).
For many years, Hioki has developed measurement technologies that sustain numerous world-leading Japanese products. These include high-efficiency motors used in various industries, inverters for air conditioners and other home appliances, and cutting-edge battery and solar panel technologies. We have modified each
of our technologies as a combination of solutions according to market needs. As the global trend toward decarbonization accelerates and electricity becomes our central energy source, we contribute to the advancement of electric vehicles (EVs) through our technologies. Using Hioki's measurement technologies in EVs leads to enhanced motor efficiency, safety, and performance, which in turn contributes to building a circular economy.
More and more companies are seeking to collaborate with Hioki in the high-profile field of battery technologies. In this constantly evolving world, we are closely monitoring industry trends while fine-tuning our technologies to meet market needs.
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Hioki E.E. Corporation published this content on 31 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2023 07:29:10 UTC.