Integrated Report 2021 Full Version (PDF:33.8 MB)

COMPANY LIMITED

Integrated Report

2021

Fiscal Year 2021

(January - December)

Mission Statement (revised in January 2021)

As a global corporation continually striving to be the world�s largest

and most respected international manufacturer of turning centers, machining centers, mill-turn centers, grinders, and processing automation, we will:

Enable our customers to maximize their advantages and excel in their respective markets by continually striving

to provide innovative, accurate, and trouble-free machines, automation systems, and digital technology at competitive prices; Increase our customers� productivity and efficiency through our latest developments in technology as manifested

by our increasingly accurate and progressive manufacturing capabilities;

Support our customers with our knowledgeable and responsive sales, applications, and service personnel.

As befits a worldwide corporation, we will:

Foster a fair and open corporate culture, utilizing appropriate management initiatives;

Play hard and be dynamic to enrich our private lives, study continuously and be open to advance professional career, and work together and be innovative to bring innovation to workplace;

Respect each other�s opinions and continually develop through friendly competition.

As profitability is a goal of all healthy business organizations

and in keeping with the true nature of the machine tool industry, we will:

Work to increase the value of our company, the investment of all shareholders knowledgeable of the true nature of the machine tool industry, and the prosperity of our partners;

Always remember that the pricing of our products and services is an integral factor of the prosperity and perpetuity of the corporation;

Generate suitable profits to ensure the cash flow necessary to provide for the healthy operation of our corporation, research and development, stable customer services, employee training and development,

and the maintenance of safe and efficient manufacturing facilities.

As an industry leader and responsible corporate citizen, we will:

Contribute our fair share to our local community and society;

Conserve environmental resources at all times to preserve the global environment;

Incorporate the highest standard of ethics while still encouraging an aggressive approach to our business activities.

This Integrated Report was created by referring to the �Guidance for Collaborative Value Creation� by Ministry of Economy, Trade, and Industry of Japan and �The International Framework� by the International Integrated Report Council.

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Integrated Report 2021 (January-December)

Contents

Businesses

Sustainability (ESG / CSR)

Financial Data

1	Mission Statement
3	Message from group CEO
9	Comprehensive solutions to realize DMG MORI�s missions
11	DMG MORI�s development amidst transforming demands
13	Why customers choose DMG MORI
15	DMG MORI�s value creation process
17	DMG MORI continues to evolve together with growing industries
19	Competitive advantages of DMG MORI
21	Diversity in DMG MORI
23	DMG MORI in 2021
25	PROCESS INNOVATION
29	Value Chain	Marketing
		R&D
		Production
		Engineering
		Customer-oriented Sales & Service Network
43	Human resources Strategy and Organization
47	M&A history of DMG MORI and its contribution
49	Group Companies
51	Sustainability (ESG / CSR) Initiatives
53	Environmental Protection
59	Quality Policy
61	Health Management
63	Human resources development
65	Contribution to society

1. Sports Marketing
2. Environmental Data

71	Governance	Corporate Governance
		Members of the Board of Directors
		Message from Germany
		Message from External Director
		Message from External Auditor
		Risk Management
83	Financial Data
95	Company Data
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https://www.dmgmori.co.jp/corporate/en/ir/ir_library/annual_report.html

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Message from group CEO

Masahiko Mori

DMG MORI Group CEO

DMG MORI CO., LTD. President, Dr. Eng.

DMG MORI AG Chairman of the Supervisory Board

DMG MORI drives customer value through process integration, automation and digitization, and address climate change by providing environmentally friendly products and technologies.

How do you evaluate the changes in the business environment surrounding the machine tools industry? How is DMG MORI responding to these changes?

The shift to electric vehicles (EVs), decarbonization, the global shortage of operators and the aging of population, as well as the impact of COVID-19, have significantly changed the needs of our customers for machining. The shift to EVs and decarbonization has resulted in the need to reduce coefficient of friction and

optimize the bonding between parts, which in turn has led to more stringent requirements in terms of not only conventional machining accuracy but also imposed shape and surface accuracy. In addition, single-chucking and single-pallet machining is required to realize these high precision

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requirements. Demand for automation and full turn-key machining solution is accelerating to address the operator shortage and to prevent the spread of infectious diseases at manufacturing sites. Clearly, the way customers are installing machining equipment is shifting from simply replacing existing machines to optimizing the way workpieces are processed, optimizing their own management resources, and reducing CO2 emissions in consideration to climate change.

In this context, our mission has been adapting to the changes in the business environment with process integration, automation, and digitization. Workpieces that were sequentially processed by three to five machines can now be manufactured by a single process-integrated machine, such as a 5-axis machine or a mill-turn center, or in other words, through a single chucking, to achieve higher accuracy. Following such process integration, automation leads to further resource optimizations, such as compensating for the lack of operators, eliminating intermediate work-in-process that used to be idling after each process, and reducing shop floor space. Digitization has helped optimize the machining process by visualizing and providing feedback on areas where operators cannot be involved due to automation.

As an example of process integration, in FY2021, we launched the NZ platform, the first jointly developed machine by Japan and Italy, a flexible turning center that can be equipped with up to four turrets with B-axis function (swivel function). In addition to 5-axis machines and mill-turn centers, this platform expanded our line-up of process-integration machines.

The Central Tool Storage (CTS) is an automated system with a large-capacity tool magazine up to 4,000 tools, and a transfer robot that loads and unloads tools into and out of the machine tool magazine of each machine tool. The system enables automation of high-mix production. We have also introduced the MATRIS Light robot system, which can be flexibly positioned. This is a system in which human-collaborative robot is amounted on a hand cart and can be moved freely by a single operator, significantly lowering introduction barrier. Currently, we offer 57 standardized automation solutions to our customers.

In order to keep these automation solutions running error-free for as long as possible, the machining environment and conditions must be optimized. The problems caused by chips, coolant, and mist generated in the cutting process are recognized as the three troublemakers of machining. They adversely affect the machining accuracy of the workpiece and can also cause machine failure. To solve these three troublemakers, we have introduced new peripheral devices. AI Chip Removal, Zero Sludge Coolant, and zeroFOG are contributing to further increase the productivity of our customers.

As mentioned above, we increasingly develop process-integration machines as well as automation systems and peripheral equipment that optimize the operation of those machines. These systems also contribute to the improvement of social value including the working environment and reduction of CO2 emissions.

What do you consider to be the key elements for fulfilling DMG MORI�s mission? What differentiates DMG MORI from your competitors?

We have around 12,000 employees globally, of which 4,800 (40%) are engaged in manufacturing machines and improving machine quality. The remaining 7,200 employees (60%) are engaged in marketing, sales, engineering and services. These employees help our customers to get the optimized performance out of their machining systems and solve production problems as quickly as possible.

In terms of manufacturing, we have 16 factories globally, aiming to produce machine tools and related products at the place of demand as much as possible, thereby diversifying risks. These 16 factories also serve as important marketing bases. We invite customers to our factories for test cuts and automation demonstrations to help them make decisions on their capital

investment. In addition, we are promoting the in-house production of key components with the aim of improving the accuracy of machine tools and safeguarding constant supply of difficult-to-procure parts. They include spindles, which are the heart of the machine tools, ball screws to improve positioning accuracy and ultra-precision measurement components supplied by Magnescale, a group company. In the future, reducing CO2 emissions in the area of procurement will also be a major topic. WATANABE SEIKOSHO Co., Ltd., a group company, which is involved in the manufacturing of iron casting, has decided to switch to a less CO2 emissions and high-efficiency electric furnace, leading to our advantage in the supply chain.

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