Tadano : Integrated Report 2021

Tadano Ltd.

Ko-34Shinden-cho, Takamatsu, Kagawa, 761-0185, Japan

Phone: [phone] Fax: [phone]

URL: www.tadano.com

*Data published in this report

This report provides financial and product information published in the financial results

for fiscal year 2020 (ended March 31, 2021) and all other information current as of January 1, 2022.

Integrated Report 2021

2022.1

Why does Tadano

do business?

Our corporate philosophy of Sozo (Creation),

Hoshi (Contribution) and Kyoryoku (Cooperation) is our business.

"Let's start a steel fabrication business where we can fully utilize our skills."

"If we do meaningful work that benefits people, we will succeed.

First, we come together and gather our strengths."

"That is the beginning. Then, we must do something new that other people are not doing yet."

"There is no challenge in doing things the same way they have always been done."

These are the words of Masuo Tadano, the founder of Tadano.

At the heart of these words is the idea that a company can exist only when it is in harmony with the people around it.

He believed that it is because we function best when we have this harmony that we should aim to be of service to people (Contribution),

to combine our efforts as a team (Cooperation), and provide new value to the world (Creation).

This is the origin of our Corporate Philosophy as it has come to be today: Sozo (Creation), Hoshi (Contribution), Kyoryoku (Cooperation).

Implementation of this Corporate Philosophy is the ultimate business objective of the Tadano Group.

This steel fabrication business that started with just 4 workers and a small factory went on to develop the OC-2,

Japan's first hydraulic truck crane.

The company then boldly took up new challenges, with everyone working together to produce a range of products.

Our products are now making contributions to people living and working throughout the world every day.

We want to make something that will contribute to the world.

We want to be a company that can contribute to the advancement of society.

These are the ideals that have molded the history of Tadano. Sozo (Creation), Hoshi (Contribution), Kyoryoku (Cooperation) are in our DNA.

01

02

Tadano Group	For roughly 100 years since its founding in 1919, Tadano has been producing an array of
products, including mobile cranes, truck loader cranes, and aerial work platforms, spurred
History	The products are used not only in Japan but also all over the world.
	on by the desire to create products that will contribute to the world.

Transportation of products by barge

GTC-1200

Masuo Tadano in his younger days (second from left)

1919

Masuo Tadano starts a welding company

in Hokkaido.

Masuo Tadano, the founder of Tadano left Takamatsu, Kagawa, for Asahikawa, Hokkaido, to start a welding business. That day, August 29, 1919, is the day we refer to as the date of our foundation. At that time, welding technology was gaining ground and developing rapidly outside of Japan, and its introduction in Japan was only beginning. Captivated by the sparks of welding, Masuo Tadano was convinced that the technology would make a positive contribution to society and ventured to start a

business in Hokkaido. He later went back to his hometown Takamatsu, Kagawa and established Tadano Iron Works Co., Ltd. in 1948.

Tadano Iron Works Co., Ltd. at the time of establishment

TM-2H

1962

Develops the TM-2H truck loader crane

The history of our truck loader cranes, which are the most versatile and commonly used crane models with a wide range of applications, started from the development of the TM-2H in 1962.

Today, they constitute our second largest business segment after mobile cranes. In 1983, we developed insulated aerial work platforms, the AT-136TE and the AT-140TE, the third largest business segment. They were well received by parties concerned, because in the development of special purpose vehicle products, including aerial work platforms, we applied technologies accumulated through the development of cranes and

factored in user needs based on advance	AT-136TE
research on the actual conditions under
which works are carried out.

AR-5500M

TR-150

1970

Develops Japan's first hydraulic rough terrain crane, the TR-150, with a 15-ton lifting capacity.

After developing Japan's first hydraulic truck crane, the OC-2, Tadano worked on the development and sales of hydraulic truck cranes and truck loader cranes. In 1970, we developed Japan's first hydraulic rough terrain crane, the TR-150, with a 15-ton lifting capacity. This type of crane was developed as a crane that can travel on the road in the Japanese market, while being a self-propelled crane capable of traveling on irregular terrains or soft ground and traveling and handling crane operations in a single driver's seat. Starting with the development of the TR-150, a number of rough terrain cranes were launched into domestic and international markets. In 1998, we developed the AR-5500M, Japan's largest-capacity all terrain crane at the time, with a 550-ton lifting capacity.

Solar panels installed at Shido Plant

2005

Implements Corporate Social Responsibility

(CSR) initiatives

In 2004, a fatal accident caused by a Tadano rough terrain crane occurred on a national road in Okayama Prefecture. After determining that a defect in the safety device was one of the causes of the accident, Tadano issued a large-scale product recall for 15,278 units (8 types and 16 models) in December. This recall incident made us recognize that our cranes being allowed on public roads is a privilege, and revisit how we should be as a company and what kind of management style we should adopt. We started to promote full-fledged Corporate Social Responsibility (CSR) initiatives from 2005. The Tadano Group CSR Charter was established in 2006 to incorporate CSR perspectives in product development and business activities. In 2008, solar power generation panels were installed on the roof of Shido Plant, and barge docking facilities were constructed at Shido Port for environmentally friendly marine transportation.

Mantis Crane

TMC's plant

2008

Acquires SpanDeck Inc.

(currently Tadano Mantis Corporation), a US-based

telescopic boom crawler crane manufacturer

History of SpanDeck Inc.

1964	Starts as a prestressed concrete equipment
	manufacturer.
1979	Develops telescopic boom crawler cranes
	with a lifting capacity of 10 and 13 US tons.
1990s	Becomes better known as the company's
	products were used in large-scale construction
	projects, such as the Big Dig (a megaproject
	to construct an underground expressway in
	Boston).
2007	Develops the 200RS telescopic boom
	crawler crane, with a lifting capacity of 100

US tons.

Kozai Plant

2019

Constructs the Kozai Plant

Products of our Group are used all over the world, and our production sites have expanded across the world. After the acquisition of Germany-based Faun GmbH in 1990, we also established production sites in the U.S. and India in 2008 and 2018 respectively. We roll out the manufacturing culture nurtured in Japan, with safety, quality, and efficiency at the core of our business activities. In addition, the Kozai Plant, the fifth plant in Japan, was constructed in Kozaikita-machi, Takamatsu City, Kagawa in 2019. Constructed based on the concept of "Next Generation Smart Plant: Harmonizing the Balance of People and Machinery, Connecting to the Next Generation of Smart Manufacturing," the Kozai Plant began full operation in August.

1955

Develops Japan's first hydraulic truck

ATF140N-5-1

1990

Acquires Faun GmbH

2019

Acquires the Demag Mobile Cranes business (currently Tadano Demag GmbH)

crane, the OC-2, with a 2-ton lifting capacity

Since its founding, Tadano Iron Works took on the challenge of developing a variety of products independently and was steadily refining its welding and hydraulic technologies. Taking a hint from information found in a construction machinery magazine, in 1955 the company developed and manufactured its original hydraulic truck crane OC-2, with a 2-ton lifting capacity. Orders for the OC-2, the first of its kind in Japan, poured in from

OC-2all over the country. It was the company's first step forward as a crane manufacturer.

BEL 5 truck crane

Acquisition

of Faun GmbH

(currently Tadano Faun GmbH), a German crane and specialized vehicle manufacturer

History of Faun GmbH

1845 Justus Christian Braun starts a bronze casting business, the forerunner of Faun.

1890 Introduces the world's first steam-driven fire engine.

1960 Produces crane carriers for nearly all -1970s leading European crane manufacturers. 1985 Develops an all terrain crane with a

30-ton lifting capacity.

1. 2500
   Christian Dingler

CC 12000

President gives a speech at Day 1 Event

We acquired the Demag Mobile Cranes business, which has a solid reputation as one of the world's leading brands of large all terrain cranes and crawler cranes, to make it possible to cater to the needs of a wide range of customers.

History of the Demag Mobile Cranes business

1827	Christian Dingler starts a manufacturing workshop, the forerunner of Demag.
1950	Develops the V2500 mobile crane, with a 2.5-ton lifting capacity.
1987	Develops one of the largest lattice boom crawler cranes at the time, with a 1,000-ton lifting capacity.
1998	Develops one of the largest truck cranes at the time, with a 650-ton lifting capacity.
2008	Introduces one of the world's largest lattice boom crawler cranes CC8800TWIN, with a
	3,200-ton lifting capacity.

C 28.600-1

AC 6.300-1

1919	Masuo Tadano starts a welding company in Hokkaido.	1980	Constructs and begins production at the Shido Plant in Sanuki City, Kagawa.
1948	Tadano Iron Works Co., Ltd. is established in Takamatsu City, Kagawa by Masuo Tadano,	1983	Develops insulated aerial work platforms, the AT-136TE and the AT-140TE.
			who serves as the first company president, with a paid-in capital of 500,000 yen.	1984	Establishes the Beijing Representative Office in China.
1950	Invents a railroad track maintenance machine and begins production for Japan National Railways.	1989	Changes corporate name to Tadano Ltd.
1954	Starts development of hydraulic industrial machines.					Tadano Group's consolidated net sales reach 100 billion yen for the first time
1955	Develops Japan's first hydraulic truck crane, the OC-2, with a 2-ton lifting capacity.					(financial results for fiscal year 1989).
1959	Relocates main plant to present location in Shinden-cho, Takamatsu City.	1990	Acquires Faun GmbH (currently Tadano Faun GmbH), a German crane and specialized vehicle
1960	Delivers company's first hydraulic truck crane exports to Indonesia (four OC-5A cranes).					manufacturer.
1961	Sozo (Creation), Hoshi (Contribution), and Kyoryoku (Cooperation) are adopted as our Corporate	1991	Begins Moai Statue Restoration Project at Ahu Tongariki on Easter Island in Chile.
			Philosophy.	1993	Establishes Tadano America Corporation in Texas, USA.
1962	Develops the TM-2H truck loader crane.	1996	Establishes Tadano-Multico (S.E.ASIA) Pte. Ltd. (currently Tadano Asia Pte. Ltd.) in Singapore.
1970	Develops Japan's first hydraulic rough terrain crane, the TR-150, with a 15-ton lifting capacity.	1997	Relocates Advanced Technology Research Center to Hayashi-cho, Takamatsu City, Kagawa.
1972	Develops the AML, Japan's first automatic moment limiter	1998	Develops the AR-5500M, Japan's largest-capacity all terrain crane at the time, with a 550-ton
			(a safety device for preventing crane overload).					lifting capacity.
			Lists company's shares on the First Sections of the Tokyo Stock Exchange and the Osaka Exchange.					Implements personnel cuts after recording a net loss three times in fiscal years 1998, 1999, and 2001.
1973	Establishes the company's first subsidiary outside of Japan,Tadano International (Europe) B.V.
			in the Netherlands.

2004

Issues the largest product recall of approximately 16,000 units of rough terrain cranes.

2018

Establishes Tadano Nederland B.V. in the Netherlands.

2007

Constructs and begins production at the Tadotsu Plant in Tadotsu Town, Kagawa.

Establishes Tadano Belgium BV in Belgium.

2008

Sets lifting equipment as our business domain.

Establishes Tadano Chile SpA in Chile.

Constructs and begins production at the Chiba Plant in Chiba City, Chiba.

Opens the Moscow Representative Office in Russia.

Establishes Tadano Faun Stahlbau GmbH in Germany.

Announces strategic minority investment in Manitex International, Inc. (U.S.A.)

2010

Acquires SpanDeck Inc. (currently Tadano Mantis Corporation), a US-based telescopic boom crawler crane manufacturer.

2019

Establishes Tadano Escorts India Pvt. Ltd. in India.

Establishes Tadano Oceania Pty Ltd in Australia.

Celebrates the 100th anniversary of the company's founding.

201 1

Establishes Tadano Brasil Equipamentos de Elevação Ltda. in Brazil.

Acquires the Demag Mobile Cranes

business

(currently Tadano Demag

GmbH).

2012

Establishes Tadano (Thailand) Co., Ltd. in Thailand for making truck loader cranes designed for emerging country markets.

Opens the Bangkok Representative

Offices

in

Thailand.

2013

Introduces the GR-1600XL(GR-1450EX), a rough terrain crane that boasts the highest lifting capacity in its class worldwide.

Constructs the Kozai Plant in Kozaikita

-machi,

Takamatsu

City.

2014

Acquires Cranes UK Ltd, a distributor in the United Kingdom (currently Tadano UK Ltd).

2021

Introduces the AR-7000N, one of Japan's largest-capacity

all terrain cranes,

2015

Tadano Group's consolidated

net sales reach 200 billion yen

for

the

first

time (financial results for fiscal years 2014 and 2015).

with a 700-ton lifting capacity.

2016

Establishes Tadano

France

SAS

in France.

Establishes the Tadano

Group

Mid-Term Management Plan

(21-23).

2017

Establishes

Tadano

Italthai

Co., Ltd. in Thailand.

03	*Non-consolidated net sales up to fiscal year 1994, and consolidated net sales from fiscal year 1995.	04

Tadano Business Overview

Corporate Philosophy Pyramid
						● Business Objective
		Business
		Objective			Implementing the Corporate Philosophy
						(Creation, Contribution, Cooperation)
Philosophy and Values	Vision			● Vision
						Pursuing Further Excellence for the World and the Future

Contents

07-08■ Value Creation Process

09-12■ Top Message

13-14 ■ Mid-Term Management Plan

■ ESG and SDGs

15-16―Our Commitment to ESG and SDGs

		Core Values
		Business Domain
Long-Term Goals		Long-Term Goals
and Policies		Major Policies
	(Safety and Health Policy, Quality Policy,
	Environmental Policy, Technology Policy)
		Mid-Term Management Plan
Mid-and
Short -Term
Plans	Fiscal Year Management Plan

Application

to DailyBusiness Plans / Action Plans (BP/C&C) Work

• Long-TermGoals

・Becoming No.1 Worldwide in the Lifting Equipment Industry ・Attaining a sales ratio of 80% outside of Japan

・Becoming a company with stable and high protability (Attaining an average operating margin of 20%)

	The Tadano Group is working to meet the expectations of
	all stakeholders and to maximize our corporate value.
	We are also creating an organizational culture that allows
	for continued learning and growth.
	● Core Values: C+SQE (SQE based on C)
Industry	Compliance (C)
Characteristics	Acting with fairness and honesty by obeying laws, regulations,
and rules, in addition to maintaining a high sense of ethics
	Safety (S)
	Prioritizing the safety of society and of all those who make and
	use our products and services
	Quality (Q)
	Pursuing quality improvement, including of products, services,
	and business operations
	Efciency (E)
	Enhancing efciency in our business operations, as well as
	contributing to improvements in customer business efciency
	● Business Domain

Our business domain is Lifting Equipment (Mobile machinery used for lifting loads and carrying out aerial work)

―Environmental

17-18 Our Commitment to the Environment

―Social

19-20 Our Promises to Customers

21-22 Our Promises Among Employees

1. Our Promises Among Partners
2. Our Promises to Shareholders and Investors

25-26 Our Promises to Society

―Governance

27-28 Corporate Governance

29-31 Executives

32Ofcer Compensation

■ Business Segments

33-34―Overview of FY 2020 Business Results

35-36―Mobile Cranes

1. ―Truck Loader Cranes
2. ―Aerial Work Platforms

39-40 ―Others

Positioned at the top of Tadano's corporate philosophy pyramid is our business objective of "implementing the corporate philosophy (creation, contribution, cooperation)." We consider this to be something towards which we must constantly and diligently strive.

Our vision is defined as "Pursuing Further Excellence for the World and the Future." The Tadano Group is working to meet the expectations of all stakeholders and to maximize our corporate value. We are also creating an organizational culture that allows for continued learning and growth. At Tadano, "C+SQE (SQE based on C)" are core values we hold sacred. Compliance forms the foundation for all action at Tadano. Tadano's core values are "Safety First, Quality Second, Efficiency Third," and we always uphold them in this critical order of priority. However, since it is impossible to manage our company without the third value of efficiency, we must ensure "Safety First, Quality Second" by any means necessary. Compliance provides the groundwork that enables Tadano to actualize each of these Core Values of Safety, Quality, and Efficiency. These principles and values remain unchanged.

Building on these core values, we have set lifting equipment as our business domain and are working toward our long-term goals of becoming No.1 worldwide in the lifting equipment industry, attaining a sales ratio of 80% outside of Japan, and attaining an average operating margin of 20%.

With the acquisition of the Demag Mobile Cranes business in 2019, half of the Group's employees now work overseas, and overseas sales account for 50% of our sales ratio. By realizing "One Tadano" and demonstrating our Group synergies, we will deliver further value to our customers and stakeholders.

41-42■ Financial and Non-financial Highlights

1. ■ Topics
2. ■ Company Profile and Stock Information

In times of dramatic change, we will take on the challenge of those various "changes," including technological innovations and environmental responses, and work united as a Group to become a leader in the lifting equipment industry.

Product Categories

Hydraulic	Telescopic boom	Crawler	Tower	Stiff boom	Folding boom	Aerial work	Overhead	Dockside	Offshore	Industrial
cranes	crawler cranes	cranes	cranes	cranes	cranes	platforms	cranes	cranes	cranes	cranes

Product category

offered

Editorial Policy

With the business objective of implementing our corporate philosophy of Sozo (Creation), Hoshi (Contribution) and Kyoryoku (Cooperation), the Tadano Group stays true to its original missions of "making something that will contribute to the world" and "being a company that can contribute to the advancement of society." We are working to meet the expectations of all stakeholders and maximize our corporate value, with the vision of pursuing further excellence for the world and the future.

This report is designed to help our shareholders, investors, and all other stakeholders gain a deeper understanding of Tadano's business conditions and its efforts toward sustainable growth through integrated explanations of financial information and non-financial information, such as ESG (Environmental/Social/Governance).

We will incorporate feedback from our readers into our efforts to further improve our Integrated Report.

Please see our website for further information related to Tadano's financial results and ESG.

05

06

Value Creation Process

Pursuing Further Excellence for the World and the Future

Long-Term

Goals

Value Creation Process

・Becoming No.1 Worldwide in the Lifting Equipment Industry

• Attaining a sales ratio of 80% outside of Japan
• Becoming a company with stable and high protability (Attaining an average operating margin of 20%)

Change in Society

Tighter environmental regulations due to global warming

Acceleration

of Digital

Transformation

and Green

Transformation

Input

Human Capital

・Culture that allows for continued learning and growth

・No. of employees (consolidated): 5,074

Manufacturing Capital

・Global production network: 5 domestic sites

5 overseas sites

・Advanced manufacturing technologies (including high- tensile-strength steel plates and welding)

Output
Mobile Cranes		Net sales:
		186,040 million yen
		(Operating loss:
		4,195 million yen)
		Outside Japan sales ratio:
・	49.9%
Rough Terrain Cranes
・
All Terrain Cranes
・
Truck Cranes
Telescopic Boom Crawler Cranes	Launch of new products:
・
Lattice Boom Crawler Cranes	9 models
・

"Further誇れる企Excellence"業の実現 Relevant関連するSDGSDGsｓ

Being a Robust Company

Prepares for and handles various changes and risks correctly

Being a Company that

Continues to Evolve

Drastic changes in business environment due to COVID-19

Increasing natural disasters

Aging infrastructure

Diversity and inclusion

Compliance

Stakeholders' requests

・Capital investment: 5,666 million yen

Social Capital

・Worldwide network: over 100 sites

(Group companies and distributors)

・Relationships of trust with customers based on quality and service capability

・Relationships of trust with business partners

Financial Capital

・Net assets: 145,404 million yen

・Interest-bearing debt: 94,586 million yen

Intellectual Capital

・Over 60 years of experience in the lifting equipment industry

・Core technologies such as structural technologies, carrier technologies, and motion control technologies

・No. of patents held: 625 ・R&D expenses:

8,440 million yen

Natural Capital

・Energy consumption: 11,057 kiloliters (crude oil equivalent / provisional figure)

Designing

Servicing	One Tadano	Manufacturing

Delivering

Truck Loader Cranes

・Truck Loader Cranes

Aerial Work Platforms

・Super Deck ・Skyboy

・Bridge Checkers

Other Special-Purpose Products

Customer Support (CS)

・Before-sales Services (Maintenance)

・After-sales Services

(Repairs and Parts Supply)

Used Equipment

Tadano Forest of Learning Project: First forest maintenance activity

CO2 emissions: 26,179 t-CO2 (provisional figure)

Held the first online plant tours for families

Completed procedures for restructuring of two German subsidiaries

Launched GENBADE-Support smartphone app for truck loader cranes

Developed successful relationships with stakeholders

Transparent, sound and efficient management (Corporate Governance)

Provides safer and more efficient products by promoting technological innovation

Being a Company that Benefits

Society and Customers

Provides products and services responding to customer needs

Being a Company that Earns the Esteem of the Greater World

Promotes compliance and governance

Being a Company that Earns the Pride of its Employees

Makes the most of human resources and prepares an employee-friendly and rewarding work environment

Tadano's DNA

We want to make something that will contribute to the world.

We want to be a company that can contribute to the advancement of society.

Philosophy and Values

・Business Objective: Implementing the Corporate Philosophy (Creation, Contribution, Cooperation)

・Core Values: C+SQE (SQE based on C) (Compliance, Safety, Quality, and Efciency)

07

08