YAMAZEN 2022 Integrated Report

YAMAZEN CORPORATION

This Integrated Report contains forward-looking statements

regarding nancial conditions and business performance.

2-3-16 Itachibori, Nishi-ku, Osaka

Description of the forward-looking statements and their

underlying assumptions involve uncertainties and certain risks

due to factors including changes in the business environment.

YAMAZEN

2022 Integrated Report

April 1, 2021 - March 31, 2022

Together with our stakeholders around the world, the entire Yamazen Group is Pioneering a new

Purpose

Pioneering a new future, with you all

Nobody knows what the future will hold 100 years from now-that's why Yamazen will keep nding the optimal solutions.

By connecting with the latest business "frontline" information and further rening our "problem-solving skills" and "people skills", we will continue solving new challenges to surpass all barriers.

Not only everyone involved with Yamazen, but also everyone who lives beyond, we have and will continue pioneering a new future, with you all.

Corporate Philosophy

Management of Fostering Personnel

To make active use of personnel, and to foster independent and virtuous employees

Management of Breaking Through

To challenge, innovate and create

Management of Trust

To respond to the needs and expectations of society and contribute to them

future

The Group currently operates under a four-region system that includes Japan, North America, Europe, and Asia. We have 65 ofces in major industrial cities in 15 countries and regions overseas, where we provide services with a community-based sales system and advanced engineering capabilities.

The Group is committed to pioneering a new future with stakeholders around the world by constantly creating new value through our products and ideas.

YAMAZEN

2022 Integrated Report

April 1, 2021 - March 31, 2022

Cover: About "Pioneer"

This comes from one of Takeo Yamamoto's life lessons: "Destiny is something that you pioneer yourself." This spirit of pioneering-along with the capacity to think and act-are legacies of Takeo Yamamoto that are part of the company's essence. They have been passed on to our employees, and form the foundation of Yamazen's growth today.

01 INTEGRATED REPORT 2022

INTEGRATED REPORT 2022 02

CONTENTS

A Value Creation Story

Growth Strategy

Our History: Innovation and Creativity

05

Our Business: Business Developing

Through People Challenging Themselves, Thinking, and Acting

07

Issue Awareness and the Process of Value Creation

09

Future World Outlook, Materiality, Vision 2030

11

Interview with CEO

13

Interview with CFO and President of Corporate Administration H.Q.

19

Green Strategy

23

Accelerating ESG and carbon neutral initiatives

Human Resource and Organizational Development Strategies

27

Assembling and training a diverse, Independent and virtuous employees who

challenges themselves and thinks while taking action

IT (DX) Strategies

30

Aiming to maximize customer value by promoting DX strategies that leverage

digital technology

Logistics Strategy

33

Aiming to establish the next generation logistics system: Creation of new value in "logistics"

Corporate

Management Team

51

Corporate Governance System

53

Governance

Interview with Outside Director

58

Data Section

Most Recent 11 Years of Financial Data

59

Non-nancial Highlights

61

Consolidated Financial Statements

63

Organization / List of Overseas Ofces

66

Domestic Group Companies

67

Company Overview / Investor Information

68

Business Portfolio

At a Glance

35

Interview with President of General Sales H.Q.

37

Machine Tools Division H.Q.

39

Industrial Tools & Equipment Division H.Q.

41

Overseas Production Equipment Business

43

Building Materials Division H.Q.

45

Home Products Division H.Q.

47

CROSSING as a Sales Strategy

49

Editorial policy

We are issuing this Integrated Report starting with the FY2022 in order to further deepen our stakeholders' understanding of the corporate value and medium- to long-term growth potential of the Yamazen Group. In compiling the report, we referred to the Value Reporting Foundation (VRF)'s "International Integrated Reporting Framework" and "Guidance for Collaborative Value Creation."

Cautionary note concerning forward-looking statements

This Integrated Report contains forward-looking statements regarding the Company's plans, forecasts, strategies, and performance. They contain judgments made based on the information currently available. Please be aware that actual performance may differ substantially from these projections due to a variety of risks and uncertainties. Factors that may affect future prospects include, but are not limited to, the economic environment in which the Company's business operates, competitive pressure, related laws and regulations, changes regarding product development, and uctuating exchange rates.

Note: The content of this Integrated Report is based on the results of FY2021 (April 1, 2021 to March 31, 2022). However, some information from after April 2022 is also included. Factors that may affect future prospects include, but are not limited to, the economic environment in which the Company's business operates, competitive pressure, related laws and regulations, changes regarding product development, and uctuating exchange rates.

Our website contains a variety of information about the Yamazen Group, including "Sustainability" and "Investor Relations." Please refer to it in conjunction with this report.

https://www.yamazen.co.jp/english/

IRCSR

03 INTEGRATED REPORT 2022

INTEGRATED REPORT 2022 04

A Value Creation Story Our History

Pioneer Innovation and Creativity

1947

1954

1955

1961

1962

1966

Company Established / Building the Foundation

Toward Listing

Growth and Development

Yamazen's 75-year history has been one of innovation and creativity, always striving to generate new products and open new markets. Since Takeo Yamamoto founded Yamazen Tool Manufacturing & Sales Co., Ltd. in May 1947, the Company has expanded its areas of business to include cutting tools, machine tools, housing equipment and materials, and home products. Moving forward, we will continue to work with innovation and creativity as a business that responds swiftly to changes in the world while aiming for sustainable growth.

1987

1993

1994

1996

1997

2005

Changing Management

Corporate Renewal

Increasing Social Responsibility

After World War , when Osaka was far from

Based on the business philosophy of "You only have

During our 15th year, we became the rst

Ⅱ

a business when you respond to the needs of

company in the cutting tool distribution industry

revitalized and just beginning to recover, rather than

cutting tools, what it needed most was hand tools like

customers and make them happy," the Company

to be listed on the stock exchange in Japan. We

hammers and shovels. Yamazen Tool Manufacturing

actively took steps to expand the range of products

continued to pursue a multi-location policy,

& Sales Co., Ltd. was established and made its

it offered. The Tokyo Branch was opened in 1957,

opening sales bases not only in major regions

full-scale start in May 1947 with the urgent aim of

followed by branches in Nagoya, Fukuoka, and

throughout Japan, but also overseas, with

selling goods required for the restoration of daily life.

Sapporo. At once, we put a national system in place.

branches in Chicago, London, and Bangkok.

● When Yamazen Tool Manufacturing

● Main products when the

● The new Nagoya Branch building ● The Company's booth at the 3rd

● When the Chicago Ofce was

● PR bus advertising housing

& Sales Co., Ltd. was established

company was founded

Tokyo International Trade Fair

opened

equipment

Moving towards a new stage in the business, in 1988

Through reforms such as restructuring the Production

we launched "ZEUS PLAN," our long-term

Equipment Division and the establishment of the Overseas

management plan. In 1991, we updated the corporate

General Sales H.Q., the Company achieved protability in

logo with the introduction of visual identity (VI) and

FY1995 for the rst time in three years. We established a new

completed the construction of a new headquarters

"Management Philosophy" and the "Yamazen Employee Code

building in Osaka. However, this period was also

of Conduct," with the entire company taking a step forward

affected by the collapse of Japan's bubble economy.

and undertaking the challenge of creating a corporate renewal

period that would lead the Company into the next generation.

● Singapore Ofce

● Completion of new headquarters

● New Management

● Shanghai Ofce

building in Osaka

Philosophy handbook

The Industrial Systems Administrative Division (now the Industrial Tools & Equipment Division H.Q.) established an "Environmental Team" and entered the environmental business in earnest. In 2002, the Company obtained ISO14001 certication for all of its ofces in Japan. With the aim of fullling our corporate social responsibilities and boosting corporate value, we established our "Environmental Policy" and the "Yamazen Group Corporate Activity Charter." These form the foundation of our ESG activities.

1967

1974

1975

1979

1980

1986

Development Takes Off

Hard Times and Rebuilding

Restoring Condence

20062021

Era of Innovation

2022 -

The capital investment appetite

cooled significantly in the wake of the

The overseas network expands along with the double-digit growth of existing divisions such as machine tools, industrial equipment, tools, and residential equipment. We also entered new business markets such as real estate.

  • Tokyo/Osaka Stock Exchange First Section promotion party

● Expanded Osaka Corporate H.Q.

Just as we began aggressively investing in real estate and expanding, the Company was faced with the biggest crisis since its founding, with enormous liabilities due to the oil crisis. Those were the circumstances under which the rst Doterai-Ichi trade show was held in 1975. It went on to play a major role in the Company's rebuilding. Along with this, the Company's three-as-one business model of business partners, manufacturers, and Yamazen was promoted and caught on nationwide.

  • First product ● Second Osaka Doterai-Ichi trade show catalogue for
    home appliances

We worked to downsize over-extended areas and return to our core business, with its focus on production equipment and consumer goods. Condence in the business was gradually restored with the generous assistance of major nancial institutions and the understanding and support of suppliers and customers. Sales growth of our core products through the nationwide expansion of Doterai-Ichi trade shows contributed greatly to our rebound, and in 1986 dividend payments were made for the rst time in 11 years.

"State of emergency" issued amid the prolonged recession following the collapse of Japan's bubble economy

We began to rebuild a sound nancial base during this period, divesting of such negative past legacies as idle real estate and unprotable businesses from the excessive business diversication during the high economic growth period and the bubble economy period. We also accelerated our global expansion in support of transferring domestic manufacturing overseas.

  • Start of the "Green Ball Project"

Towards a Sustainable Society

We dened our purpose as "Pioneering a new future, with you all" and created CROSSING YAMAZEN 2024, a new medium-term management plan, to help realize it.

Both sales and profit fell significantly due to the Global Financial Crisis that occurred the previous year

241,410 million yen

836 million yen

global COVID-19 pandemic

434,744 million yen

11,234 million yen

Net sales

501,872 million yen

(Millions of yen)

500,000

400,000

Operating profit

(Millions of yen)

15,000

10,000

5,000

0

Net sales (right axis)

Operating prot (left axis)

"State of emergency" issued amid the recession triggered by the oil crisis

91,249 million yen

(1,521) million yen

242,791 million yen

(4,698) million yen

17,133 million yen

300,000

200,000

100,000

(5,000)

Fiscal year 1947

Consolidated

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989※ 1990 1991 1992 1993 1994 1995

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Development Takes Off Hard Times and Rebuilding

Restoring Condence

Changing Management

Corporate Renewal

※ The closing date of our fiscal year changed from September

20 to March 31 in FY1989. As such, there are two sets of

year-end figures for that fiscal year.

05 INTEGRATED REPORT 2022

(Left) September 21, 1988 to September 20, 1989

(Right) September 21, 1989 to March 31, 1990

Increasing Social Responsibility

Era of Innovation

BT21 Plan

Medium-Term

Vision

Change Value

GVP15

VISTA-3S

Amazing Act

ONEXT YAMAZEN

CROSSING YAMAZEN

Management Plan 2003

2002

100

2015

2018

2021

Transitional Medium-Term Management Plan

INTEGRATED REPORT 2022 06

A Value Creation Story Our Business

Pioneer

Business Developing Through People

Challenging Themselves, Thinking, and Acting

  • Sales composition by division

Consumer Goods

Production Equipment

20.9%

Machine Tools

28.5%

Home Products Division H.Q.

104,866 million yen

Division H.Q.

143,157 million yen

12.4%

FY2021

Consolidated Net Sales

Overseas Production

Materials

501,872

Equipment Business

62,169 million yen

18.4%

Building

Other

Division H.Q.

million yen

1.3%

36.9%

6,661 million yen

Industrial Tools & Equipment

Division H.Q.

185,017 million yen

  • Yamazen Group's global network

Yamazen is a unique specialty trading company that has proved itself both supporting worldwide manufacturing with "Production Equipment" that includes machine tools, cutting tools, and industrial equipment, and contributing to the richness of people's lives with "Consumer Goods" including housing equipment and materials and home products. Combining the knowledge and expertise of our various divisions-including Machine Tools Division H.Q., Industrial Tools & Equipment Division H.Q., Building Materials Division H.Q., and Home Products Division H.Q.-we work to create new value that will drive the development of industrial society.

Production Equipment Business

Machine

By using machine tools in production and processing systems,

Major products

we respond to customer needs that change with the times, and

Include machine tools (machining centers, CNC

Tools

lathes, CNC grinding machines, CNC milling

promote high added-value,proposal-based marketing. We

machines, EDMs, conventional machine tools, 3D

Business

printers), metal forming and plate processing

achieve enhancements in productivity, pursue reductions in

machines (presses, shirring machines, bending

costs, and combine peripheral equipment, services and

machines, laser cutting machines), injection molding

machines, die-casting machines, CAD/CAM,

information to provide support for manufacturing sites, both in

machine tool accessories (industrial robots,

measuring equipment, automation peripheral

Japan and overseas, that require a high degree of specialization.

equipment, machine tools accessories)

Industrial

We offer a broad lineup that includes consumables and incidental equipment, so as to

Major products

Include material handling (distribution equipment),

Tools &

be able to respond to the highly diversied needs of production sites. In addition, we

mechatronics (mechatronics equipment, robots,

automation software, labor-saving equipment), aids

Equipment

provide total support for each stage, from the planning and operation of production

for environmental improvement, cutting tools,

auxiliary tools, work tools, electric tools, measuring

Business

sites, and the creation of environments, including production efciency improvements

equipment, uid devices (compressors / painting

equipment, pumps, blast equipment, uid couplings,

involving automation and labor-saving initiatives, as well as improving the production

heating / cooling equipment, stirrers / mixers),

industrial equipment (welding / generators, metal

environment and providing cutting-edge technologies, to BCP countermeasures, in

forming / sheet metal / steel processing machines,

washing machines, safety / hygiene / security), steel

relation to which we offer proposals as a producer of comprehensive systems.

frame processing machines, facility air conditioning

equipment (air conditioning / HVAC equipment, clean

room equipment), BCP-related services

Overseas

We support reciprocal business between Japan and the rest of the world.

Major products

Production

This includes assistance in overseas relocation of Japanese and

Sales and overseas application and technical

services regarding machining centers, CNC lathes,

Equipment

international companies, international procurement of products, parts and

CNC milling machines, EDMs, 3D printers, injection

Business

materials, trilateral transactions, total planning of production equipment

molding machines, die-casting machines, machine

tool accessories, NC tooling, auxiliary tools, cutting

and systems for factories, and consulting regarding international

tools, measuring instruments, measuring

transactions. With many years of experience and expertise in overseas

equipment, work tools, material handling,

mechatronics equipment, and aids for

markets, we aid the development of local communities and industries.

environmental improvement

Consumer Goods Business

Europe 2 countries 2business locations

Asia

11 countries

and regions 46 business locations

Japan

53 business

locations

North America 1 country 15 business locations

Central and

South America

1 country

2 business

locations

Building

In this business we propose new products and systems that assist in the

Major products

Sales and related work and services for kitchen

creation of housing and societies that are kind to both people and the

equipment, cooking equipment, bathroom

Materials

equipment, washbasin equipment, water boiling

environment, and that take into account such issues as the environment,

equipment, sanitary equipment, air-conditioning and

Business

ventilation equipment, solar power generation,

zero-carbon societies, health, and barrier-free living. We have focused on

storage batteries, oor heating, solar thermal water

heating equipment, stored-heat heating systems,

plumbing equipment & materials, interior

Net-Zero Energy Houses (ZEH) and the house remodeling business, as

architectural materials, exterior architectural

materials, nursing care equipment, interiors, window

well as on the non-housing market in recent years, providing optimal

frames, exteriors, foundations, ancillary construction

materials, construction materials, construction

solutions to customers in our role as a high-functionality trading company.

equipment, structural building frames, cutting

tool-related, ofce equipment, home equipment, IoT

equipment, and BCP-related equipment

Home

We combine the trading company functions of retail

Major products

Products

distribution and logistics with the manufacturer functions of

Planning, development and sales of products

including home appliances (fans / heating

Business

planning and developing original products, handling a wide

equipment / cooking / audio-visual / lighting),

indoor furniture, outdoor / leisure goods, kitchen /

15

countries and regions

16

local companies

65

overseas business

overseas

overseas

locations

domestic

total

53 locationsbusiness

118 locationsbusiness

lineup of useful products that are familiar to us from daily life.

daily necessities, exteriors, gardening /

These range from electrical appliances, interior and exterior

agriculture, health equipment, hygiene /

healthcare, tools, car / motorcycle supplies, and

products and leisure products, to disaster prevention goods.

supplies for disaster preparedness

As of the end of June 2022

07 INTEGRATED REPORT 2022

INTEGRATED REPORT 2022 08

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Disclaimer

YAMAZEN Corporation published this content on 14 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 February 2023 08:59:01 UTC.