Message from the CEO

Chairman & Group CEO

Since its founding 73 years ago, HORIBA has been working at solving social issues through its core business, “Measurement Technologies.”
We now have a new management team focused on responding to the requests from our customers and society and seeking to raise our corporate value while navigating the rapid changes in every area of technology.

From January 1, 2018, a new management team took charge, with myself as Chairman & Group CEO, Juichi Saito as Executive Vice Chairman & Group COO, and Masayuki Adachi as President & COO. Under the new structure, Mr. Saito and I will lead the overall HORIBA Group, while Dr. Adachi will lead HORIBA, Ltd. as the headquarters.
There are two main reasons behind this change in management structure.
First is the expansion of our group. 26 years have passed since I was appointed as President in 1992. We have acquired many companies and have grown our business globally, making clear the importance of management of the overall group. Going forward, in addition to management of group companies, which now are the core of HORIBA’s business, I am shifting my priority to take the reins of the entire group in order to make HORIBA’s corporate culture of “Joy and Fun” well known and embedded in growing regions -- operations that will support our future growth. Executive Vice Chairman & Group COO Mr. Saito will in effect lead HORIBA’s operation by planning and implementing management and business strategies on a global level. The second reason is to enhance our technologies. HORIBA has established a business model of globally manufacturing a wide variety of products in small quantities by expanding diverse applications. We will not change this approach. However, we also need to enhance our basic technological capabilities to flexibly cope with emerging needs. President Adachi is well suited to lead initiatives to utilize resources across the boundaries of business divisions and enhance technology, as he possesses a wide range of technical knowledge and has accumulated experience in managing group companies.
We have been posting favorable financial results. That is all the more reason that I believe we need to be bold in our deliberate advance as a company. We are committed to move ahead to achieve further growth under the new management team.

The automotive industry is now facing a so-called once-in-a-century paradigm shift. Reflecting the increase in the number of electric vehicles and the development of autonomous driving technology, a broad range of businesses that do not fall into conventional categories are emerging. They include specialized firms working on vehicle battery and increasing number of semiconductors, on more-efficient systems for charging and generating power. HORIBA MIRA Limited (U.K.), which we acquired in 2015, has abundant resources and accumulated skills concerning autonomous driving technology and development of batteries for electric vehicles, as well as provision of diverse verification and testing services. We also offer a full line-up of measurement equipment and devices of all kinds for hybrid or plug-in hybrid vehicles that combine an engine and a battery, and we have a firm experiences in this regard. Moreover, we can fulfill needs for analysis and evaluation in work on developing batteries, by using products in our Scientific Instruments & Systems segment. We will contribute to the development of next-generation automotive technologies from all directions by use of technologies beyond the boundaries of business segments.

“Timing, Speed, and Perseverance” are all indispensable elements in responding to the ongoing diverse and significant changes in society.
Let me start the discussing with “Timing.” The HORIBA BIWAKO E-HARBOR celebrated its first anniversary in May 2017. As the factory has been operating at high levels, we may not have been able to fulfill the needs of our customers if there were even a slight delay in our decision making or the start-up. In hindsight, the acquisition of HORIBA MIRA, which has strong capabilities in next-generation automotive technology, may not have taken place if we had not heeded the dramatic change in the automotive industry. I therefore feel strongly that timing in making investment decisions is so important.
Next is “Speed.” Even golfers with small bodies can hit a ball for a long distance not only due to power and speed, but also to the contribution from the accelerating speed of the head of a golf club. I think there is similarity with corporate management. In October 2017, shortly after the announcement of a new product launch, HORIBA ABX SAS (France) entered into a long-term agreement with Siemens Healthcare Diagnostics Inc. (U.S.) that created a dynamic change in the aspects of sales and marketing. I believe that such speedy business development inspires the entire HORIBA Group.
Last is “Perseverance.” Our BlackJack Project, having the objective of improving operational efficiency by encouraging improvements at the workplace, celebrated its 20th anniversary in 2017. The project is embedded in our corporate culture and I would even say that it has supported our present strong operating results. In 2014, we launched the HORIBA Stained Glass Project. Its mission is to make HORIBA stronger by the continual creation of new value through diverse talents and skills. We are promoting more diversity in our workforce including work style renovation as a basis for management. I am expecting that continuance of these projects will also lead us to sustainable growth.

At the end of December 2017, the HORIBA STEC Aso Factory in the Semiconductor Instruments & Systems segment completed construction for its largest expansion to date. In the midst of accelerating technology innovation, I believe delivery of “what customers need, time-wise, quantity-wise, and quality-wise” products shall make a decisive influence on competitiveness of companies. In addition to our production capability, a long-accumulated relationship of trust with subcontractors and distributors is becoming increasingly valuable. Indeed, we may now enter into a period when the value of a “manufacturing companies” can be appreciated. We will continue to invest proactively to enhance our supply capacity, and automation.

In 2017 (ended December 31, 2017), HORIBA recorded consolidated net sales of 195.3 billion yen (up 15% year-onyear) and operating income of 26.8 billion yen (up 45% year-on-year). This was driven by strong results of the Semiconductor Instruments & Systems segment and the Automotive Test Systems segment.
In 2018, we are targeting another year of record-highs both in sales, at 210.0 billion yen (up 7% year-on-year), and in operating income, at 29.0 billion yen (up 8% year-on-year,)* mainly driven by the Semiconductor Instruments & Systems segment and the Automotive Test Systems segment, but three other segments in Process & Environmental Instruments & Systems, Medical-Diagnostic Instruments & Systems, and Scientific Instruments & Systems are also expected to increase both sales and operating income compared to the previous year.
* Forecasts announced on February 13, 2018

HORIBA has been investing in the hiring and development of talented people, in R&D, and in facilities and equipment during economic ups and downs. It is increasingly important to keep investing in order to respond to the rapid technological changes we are now experiencing in many industries. HORIBA can afford to keep investing from a long-term perspective, as we adhere to a balanced management and matrix organization in different regions and business areas with different economic cycles. This has led to increased trust from our business partners around the world and will ensure growing prominence of the HORIBA brand globally.
In 2011 we signed the United Nations Global Compact. We ensure that when we conduct business we are well rooted in each country and region, are working closely together with local employees, and understand the relevant diverse cultures, customs and values.
In keeping with the corporate philosophy of “Open and Fair,” HORIBA has three outside directors, who have diverse experience and unique insights, and who actively participate in the board meetings and contribute to enhance HORIBA’s corporate value.
By refining our “Invisible Values” of diverse kinds, we will create economic values and the same time contribute to achieving some of the Sustainable Development Goals (SDGs) advocated by the United Nations, which are relevant to HORIBA.

On a personal note, I hurt an ankle at the end of 2016 and had to spend an inconvenient time confined to a wheelchair or with crutches for over a half year. I felt pain in areas other than the injured ankle and experienced physical disorders. I am fortunate enough to have completely recovered by now but I learned an important lesson that a slight problem, if you let it slip by, could end up as a major setback. I believe this could apply to HORIBA’s management. Now, even with our recent and current strong business performance, it still is the time we have to do our work with utmost caution every day, at the same time we take up big challenges.
We are committed to contributing to society by providing our “Measurement Technologies” for the benefit of our global customers while working with a sense of challenge and “Joy and Fun” spirit. I sincerely hope that you will continue to support HORIBA for many years to come, as we are aiming at steadily raising sustainable corporate value on a road toward a prosperous future.

Chairman & Group CEO Atsushi Horiba