2020 ANNUAL REPORT - Mitsubishi Electric

1 ANNUAL REPORT2020 For the year ended March 31, 20202020 Contents02030405060812141415161718To Our Shareholders and InvestorsFinancial HighlightsNon-financial HighlightsInitiatives / External EvaluationInitiatives to Create ValueCorporate StrategyAt a GlanceFiscal 2020 Topics Review of OperationsEnergy and Electric SystemsIndustrial Automation SystemsInformation and Communication SystemsElectronic DevicesHome AppliancesResearch and DevelopmentIntellectual PropertyCSR at Mitsubishi Electric GroupDirectors and Executive OfficersOrganizationMajor Subsidiaries and AffiliatesFinancial SectionCorporate Data / Shareholder Information19202140414243612224313339 CSR ManagementG: GovernanceE: EnvironmentS: SocialESG Information Disclosure ListContents02030405060812141415161718To Our Shareholders and InvestorsFinancial HighlightsNon-financial HighlightsInitiatives / External EvaluationInitiatives to Create ValueCorporate StrategyAt a GlanceFiscal 2020 Topics Review of OperationsEnergy and Electric SystemsIndustrial Automation SystemsInformation and Communication SystemsElectronic DevicesHome AppliancesResearch and DevelopmentIntellectual PropertyCSR at Mitsubishi Electric GroupDirectors and Executive OfficersOrganizationMajor Subsidiaries and AffiliatesFinancial SectionCorporate Data / Shareholder Information19202140414243612224313339 CSR ManagementG: GovernanceE: EnvironmentS.

2 SocialESG Information Disclosure List01 Mitsubishi Electric CORPORATION ANNUAL REPORT 2020I would like to express my deepest sympathy and condolences for all the people who have lost their lives to COVID-19, as well as for everyone who has suffered through the pandemic and their families and acquaintances. In addition, I would like to express my sincere gratitude and respect to everyone working on the front lines of the medical field and other fields to prevent the spread of disease and treat Electric Group gives the highest priority to the safety and health of customers, business partners, and other related parties, as well as employees and their families. Having taken adequate measures to prevent the spread of the infection, such as thorough application of remote work, and securing social dis-tance in production, construction and service related departments, we are continuing business that are necessary for fulfilling our responsibilities to society as a corporation in order to maintain people s lives, providing a stable supply of products, providing services, and supporting our world economy is expected to suffer a significantly adverse impact from thepandemic.

3 The economic growth rate is expected to slow significantly compared to the previous fiscal year, and we expect that this will have a significant impact on our business performance. While ensuring that employment is maintained, we will work to minimize the impact on business results even if it takes a long time for the pandemic to , we expect that measures to prevent the spread of the disease will bring dramatic changes to the values of humanity, including lifestyles, work styles, business styles, and communication methods. The fiscal year ending March 31, 2021 (hereinafter fiscal 2021) is a milestone year, as it marks the 100th anniversary of our founding. We will incorporate new values into our own working styles, while uniting all the capabilities inside and outside of the Group, in order to respond to changing demand and to address social challenges. July 2020 President & CEO Takeshi SugiyamaCorporate MissionThe Mitsubishi Electric Group will continually improve its technologies and services by applying creativity to all aspects of its business.

4 By doing so, we enhance the quality of life in our society. To this end, all members of the Group will pursue the following Seven Guiding PrinciplesTrust, Quality, Technology, Citizenship, Ethics and Compliance, Environment, GrowthTo Our Shareholders and Investors02 Mitsubishi Electric CORPORATION ANNUAL REPORT 2020 Performance for the Year Ended March 31, 20201. The consolidated financial statements are prepared in accordance with International Financial Reporting The balance of bonds and borrowings and the ratio of bonds and borrowings to total assets include lease liabilities for the fiscal year ended March 31, R&D expenditures include elements spent on quality improvements which constitute manufacturing Diluted earnings per share attributable to Mitsubishi Electric Corp. stockholders is equal to Basic earnings per share attributable to Mitsubishi Electric , as no dilutive securities and Electric Systems 1,307,389 millionOthers 659,636 millionHome Appliances 1,090,248 millionElectronic Devices 208,750 millionIndustrial Automation Systems 1,349,429 millionInformation andCommunication Systems 455,596 millionRevenue Breakdown by Business SegmentNote: Inter-segment sales are included in the amounts of the diagram HighlightsYen(millions)Years ended March 3120192020 Revenue 4,519,921 4,462,509 Operating profit290,477259,661 Net profit attributable to Mitsubishi Electric Corp.

5 Stockholders226,648221,834 Total assets4,356,2114,409,771 Bonds and borrowings298,438267,008 Mitsubishi Electric Corp. stockholders' equity2,399,9462,429,743 Capital expenditure (Based on the recognized value of property, plant and equipment)198,442227,450R&D expenditures212,794206,846 YenPer share Amounts: Earnings per share attributable to Mitsubishi Electric Corp. stockholders Basic dividends declared4040%Statistical Information Operating profit Return on equity (ROE) Bonds and borrowings to total assets Electric CORPORATION ANNUAL REPORT 2020webManagement of CSR target initiatives in fiscal 2021 Non-financial HighlightsProvide products and services that contribute to Goal 7, Affordable and clean energy, and Goal 13, Climate action, of the SDGsProvide products and services thatcontribute to Goal 11, Sustainable cities and communities, of the SDGsReduce CO2 emissions from product usage Make Group-wide efforts to investigate the cause of serious malfunctions that have occurred in the past, and implement countermeasuresEnhancement of a reporting system with respect to human rights violationsProvide proper information to directors at the proper time, conduct a review of the board of directors, and analyze and evaluate the reviewEnhancement comprehensive measures, document management.

6 UpgradingReduce CO2 emissions from production35% reductioncompared to FY2001 by FY2021 Less million tonsby FY2021 Ensure safety through risk assessment Maintain 100% Provide anti-harassment education for all employeesAttendance rate of 100% Maintain a 100% attendance in e-learning programs on complianceMaintain rate of 100%Increase the ratio of women among new recruits in technical positions Future target of20%Realize a sustainable societyProvide safety, security,and comfortRespect human rights and promote the active participationof diverse human resourcesStrengthen corporate governance and compliance on a continuous basisFor results of fiscal 2020, please refer to the following:implementation of risk assessments of target home electronic products04 Mitsubishi Electric CORPORATION ANNUAL REPORT 2020 Initiatives External Evaluation Main initiatives and external evaluations related to ESG are as follows:SBTIt is recognized that the Mitsubishi Electric Group s greenhouse gas reduction targets for 2030 are based on scientific grounds to Holding the increase in the global average temperature to well below 2 C above pre-industrial levels as stipu-lated in the Paris Agreement.

7 We have obtained certification from the SBT (Science Based Targets) Electric has received the highest rating from CDP. "A List" company for "Water Security" for four consecutive Electric has awarded the top-rank Gold Rating in corporate social responsibility (CSR) by EcoVadis, the global CSR assessment agency. Mitsubishi Electric scored especially highly in the categories of the environment and sustainable pro-curement. The Gold Rating places Mitsubishi Electric among the top 5 percent of all companies assessed by / External EvaluationFTSE Index SeriesFTSE Russell (UK) is a company that engages in the development of global investment indexes and the provision of financial data to investors. Mitsubishi Electric was selected as a constituent of the company s FTSE4 Good Index Series. Additionally, Mitsubishi Electric was selected as a constituent of the FTSE Blossom Japan Index. The index has also been adopted as an investment outlet by the Government Pension Investment Fund (GPIF).

8 MSCI IndexesMSCI (USA) is a company that calculates and announces various indexes of global constituents. Mitsubishi Electric was selected as a constituent of MSCI ESG Leaders Indexes. Mitsubishi Electric was selected as a constituent for the MSCI Japan ESG Select Leaders Index, which consists of Japanese stock names ranked according to their ESG (environment, social, governance) performance, and also for the MSCI Japan Empowering Women Index (WIN), consisting of select companies in Japan displaying excellent gender diversity. The two indexes have also been adopted as an investment outlet by GPIF.* THE INCLUSION OF Mitsubishi Electric Corporation IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Mitsubishi Electric Corporation BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI.

9 MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS Carbon Efficient IndexS&P/JPX Carbon Efficient IndexMitsubishi Electric was selected as a constituent of the S&P/JPX Carbon Efficient Index designed to measure the perfor-mance of companies by focusing on the level of carbon efficiency (carbon emissions per sales). The Index, which is con-structed by S&P Dow Jones Indices, is based on carbon emission data by Trucost, which assesses risks relating to climate change, natural resource constraints, and broader environmental, social, and governance factors. The index has also been adopted as an investment outlet by 500 Participation in the UN Global CompactIn May 2018, the Mitsubishi Electric Group signed the UN Global Compact (UNGC) aimed at promoting CSR activities based on international of approval of the TCFD recommendationsThe Mitsubishi Electric Group has expressed approval of the recommendations by TCFD (Task Force on Climate-related Financial Disclosures) and has been promoting initiatives and disclosing information according to its External Evaluations05 Mitsubishi Electric CORPORATION ANNUAL REPORT 2020 The Mitsubishi Electric Group has taken on the challenge of resolving diversifying social challenges including environmental issues and resource and energy issues through its products, systems and services.

10 In doing so, it promotes initiatives to create value, such as simultaneously achieving a "sustainable society," and "safety, se-curity, and comfort." In these ways, the Mitsubishi Electric Group pursues the sustainable growth of the entire to Create ValueMitsubishi Electric 's Initiatives to Create Value06 Mitsubishi Electric CORPORATION ANNUAL REPORT 2020 Meanwhile, by pursuing sustainable growth of the Group through all its corporate activities including initiatives to create value, the Group will also contribute to achieving the SDGs, common global Electric 's Initiatives to Create Value07 Mitsubishi Electric CORPORATION ANNUAL REPORT 2020 The Mitsubishi Electric Group has positioned corporate social responsibility (CSR) as a pillar of its corporate management, based on its Corporate Mission and Seven Guiding Principles. Accordingly, the Group has made committed efforts to become a corporation whose actions are rated highly through its initiatives toward solving social challenges.