by Integrated Report 2024

Working to become "One Maxell" through the penetration of our MVVSS and organizational reform

When I became president in 2020, Maxell lacked a sense of unity as a group because we had carried out many M&As between 2017 and 2019. In this context, we established MVVSS (Mission, Vision, Value, Spirit, Slogan) as the new core principle of our basic management policy in July 2020 and clarified Maxell's direction, so we could regain our cohesiveness.

　I have visited our major domestic bases, including Group companies, and engaged in town hall meetings in which I have communicated directly with employees to help ensure the penetration of MVVSS. It has been four years since MVVSS was established, and I am positive that penetration and sharing among Maxell Group employees have progressed.

　Our organizational reforms altered the company's structure, moving from a vertically segmented one to a horizontally integrated one across the entire company. Between fiscal 2022 and fiscal 2023, we consolidated Human Resources & General Affairs, Finance & Accounting, and Procurement & SCM, which were previously divided by business divisions, into our headquarters. In terms of production activities, we strengthened collaboration among Group plants to accommodate each other's materials in case of sudden shortage. In the Monozukuri Division, the members of each plant are assigned concurrently, promoting shared approaches to monozukuri (manufacturing) and consideration for the standardization of development and manufacturing processes. With the establishment of the new medium-term management plan MEX26 (Maximum Excellence 2026), we were able to set up forums for key members from each business division to gather and hold proactive discussions that overcome the boundaries between business divisions.

　I hope that through these initiatives, we will become a company that moves forward with the power of teamwork, in which our employees feel a sense of unity and take on the challenge of difficult issues in a way that transcends departments and roles.

Review of the previous medium-term management plan MEX23

Performance in fiscal 2023, the final year of the previous medium-term management plan MEX23 (Maximum Excellence 2023), saw decreased revenue but increased profits compared to the previous year. As for the whole period of MEX23, while net sales had increased compared to the initial plan, we did not achieve the operating profit target. The main factors for this were the fact that sales of lithium-ion batteries for consumer use in gaming machines and ozone anti-bacterial deodorizers were lower than anticipated during the COVID-19 pandemic, as well as our inability to grasp customers' technical issues in focus areas, resulting in insufficient growth.
　On the other hand, development was accelerated with the integration of the development units previously located in each business division in fiscal 2021, the first year of MEX23, and the concentration of resources on the projects with growth potential. We were able to create numerous products that are expected to contribute to our future performance, which was a great outcome.

　In particular, we have high expectations for our all-solid-state batteries as the pillar of Maxell's next era. Over twenty years ago, I was involved in the development of the primary batteries used in the Tire Pressure Monitoring System (TPMS); my supervisor at the time told me to work on developing something else because it was not possible to insert batteries into a tire and have it run for 10 years, but I continued working on development with a strong desire to meet customer demand. However, all-solid state batteries are entirely different to existing batteries as they don't use a liquid, which presented very high technological hurdles. I believed it would be difficult to get a result even if resources were concentrated on them, and gave the instruction to take time and work on them diligently. But the employees who were engaged in this work have surprised me with how far they have come, accelerating development far more than expected through their efforts. Existing smartphone batteries degrade in a few years, but that won't happen if long-life all-solid-state batteries are used. I hope we can realize diverse innovation through these batteries.

Active investment in growth areas through MEX26

Maxell started the new medium-term management plan MEX26 in fiscal 2024. The aim is to reach net sales of 150.0 billion yen and an operating profit of 12.0 billion yen in fiscal 2026, by promoting active investment in growth businesses and reforming our business portfolio. We expect 35.0 billion yen of growth investment over the three years of MEX26, more than twice that of the MEX23 period, and will mainly work on growth businesses in our 3 focus areas: Mobility, ICT/AI, and Human/Social Infrastructure.
　In the Mobility area, we will invest in strengthening production systems to expand our supply of heat-resistant coin-type lithium batteries in response to demand for smaller TPMS modules.
　In the ICT/AI area, we are promoting sales of ceramic package type all-solid-state batteries for FA and various sensors. We will also focus on the modularization of small-sized all-solidstate batteries and the development of medium-sized cells.
　In addition, we are furthering investment in semiconductor DMS (Design & Manufacturing Service) and dicing tapes for semiconductor manufacturing processes, which we expect to grow with the expanding semiconductor market.
　In the Human/Social Infrastructure area, we anticipate growth in the primary battery market for medical devices such as blood glucose meters, and will invest in the development and increased production thereof. When it comes to tapes for construction, we will also invest in expanding product lineup for various living environments, and aim to expand sales in North America and South east Asia.

　We will also focus on activities for the creation of new businesses following on from all-solid-state batteries. Our activities will progress in three phases: the commercialization stage once products have been created, the customer validation stage to further product development for product creation during MEX26, and the value validation stage to further business development for product creation from fiscal 2027 to fiscal 2029. During MEX26, we aim to create products from coin-type all-solid-state batteries, medium-sized allsolid-state batteries, all-solid-state battery modules, foam molding, EMC (electromagnetic compatibility) countermeasure materials, and more.
　When it comes to reforming our business portfolio, we will aim for growth in our 3 focus areas and redistribute resources distinctively, including business downsizing or withdrawal. Continuing with our ABC-XYZ operations (profit and loss control by business) has allowed quantitative evaluation-based judgement to penetrate our company. Employees engaged in difficult businesses are working with a different look in their eyes and performance has improved in certain product areas; we plan to accumulate profits across the whole company.

Becoming an "indispensable" presence

Maxell aims to become an indispensable presence for our customers. To accomplish this, it is vital that we make full use of the value of our products and technologies, and I believe that if we do not align our technologies in response to customers' desired specifications and requirements, we will not demonstrate the true performance of our products. For example, even batteries of the same standard can have different performance from those of other manufacturers, and it is important to align them with specific equipment and conditions that customers use. Similarly, in the case of automotive optical lenses, it is necessary to align the design to achieve the desired characteristics that customers seek.
　Notably, the mobility, medical, and industrial areas are directly linked to safety and security, requiring diligent alignment; I believe that our company's value is more likely to be recognized in these areas. In these fields, we will provide optimal solutions through technical sales capabilities that align technologies at a high level in response to customer issues and demands, and monozukuri capabilities that use our unique Analog Core Technologies.

　With regard to technical sales, it is important for engineers to visit customers to gain direct experience of their issues and reflect these in development. We have asked the Sales Department to accompany engineers from plants and research laboratories on customer visits. We are also implementing a system in which engineers are assigned to specific products and regularly visit overseas customers.
　Furthermore, in order to provide optimal solutions, it is important for Sales to propose not only products from their own department but also products from other departments, and to engage with customers in different fields to capture various challenges. We will promote integration beyond the boundaries of business divisions.

Steadily engaging in actions to strengthen sustainability management

Maxell identified seven materialities in fiscal 2021 to enhance our sustainability management; in fiscal 2022, we formulated KPIs, and in fiscal 2023 we started implementing these materialities into our business activities. During MEX26, we will steadily implement action plans for each materiality, with a focus on both economic and social value, as we work toward sustainable growth. To accomplish this, we have set KGIs as goals for us to aim for, and reformulated our KPIs as performance indicators to reach these goals.
　During MEX23, we started scenario analysis (analysis of risks and opportunities) for climate change measures in Maxell, Ltd. in fiscal 2021, which we then expanded to our Group companies. In July 2023, we created our environmental vision, as well as setting the target for fiscal 2030 to reduce waste and start to recycle composite plastics toward a recycling-oriented society, and the goal for fiscal 2050 to reach carbon neutrality.

　We also focused on contributing to society via Maxell's products and business activities, and promoted "Creation of economic value through environmental activities," one of our materialities. An example of our efforts to reduce the burden on the environment through our business activities: we reduced electric power costs and CO₂ by reviewing our manufacturing processes and visualizing the air that is often used to drive production equipment to prevent air leakage. One example of the development of environmentally friendly products through original technologies is the development of "Electrolytic Reactors" with Osaka University from April 2023; these are used in the electrolytic reduction of CO₂ as part of the New Energy and Industrial Technology Development Organization (NEDO) project "Integrated Electrochemical Systems for Scalable CO₂ Conversion to Chemical Feedstocks."
　For MEX26, we are also focusing on one additional main initiative for sustainability, "Creating human resources and organizations that gene rate value," and will strengthen our human capital based on the themes of "acquiring diverse talent," "allocating human resources based on aptitude," "enhancing employees' awareness of management participation," "fostering a corporate culture that recognizes and encourages challenges," "maintaining a rewarding workplace environment," and "sustainable human resources development." We have also set scores for employee awareness surveys as one of our KPIs, with high target values. We are taking action to ensure that our employees are highly motivated and able to perform at their best, including strengthening functional training and introducing a share-based remuneration system for people who work as section managers or higher.
　In terms of DX, as part of group governance for "One Maxell," we will further promote the unification of systems and the consolidation and use of information.

To our stakeholders

(Japanese)

• Integrated Report
• Mid-Term Plan MEX26
• Directors