General Overview of Business

Makita Corporation

Additional Information

for the year ended March 31, 2024

General Overview of Business

(Partial translation of "YUKASHOKEN HOKOKUSHO"

originally issued in Japanese)

CONTENTS

Management policies and Challenges the company faces…………………………………………………………...2

Risk factors…………………………………………………………………………………………………………..10

Analysis of Financial Position, Operating Results and Cash Flows…………………………………………………14

Production, Orders received and Sales……………………………………………………………………………....19

Research and Development………………………………………………………………………………………….19

Facilities and Equipment…………………………………………………………………………………………….20

【Management policies and Challenges the Company faces】

1. Basic Policies

Makita has set itself the goal of consolidating a strong position in the global power tool industry as a global supplier of a comprehensive range of power tools (mainly for DC type, gardening equipment, air tools, etc.) that assist people in creating homes and living environments. In order to achieve this, Makita has established strategic business approaches and quality policies such as "A management approach in symbiosis with society" "Managing to take good care of our customers," "Proactive, sound management" and "Emphasis on trustworthy and reliable corporate culture as well as management to draw out the capabilities of each employee." Makita aims to generate solid profitability so that Makita can promote its sustained corporate development and meet the needs of its shareholders, customers, and employees as well as regional societies where Makita operates.

2. Target Management Indicators

Makita believes that attaining sustained growth and maintaining high profitability are the ways to increase corporate value. Makita's specific numerical target is to maintain a stable ratio of operating income to net sales on a consolidated basis of 10% or more.

3. Medium-to-Long-Term Management Strategy

Makita aims to establish high brand recognition and become a "Strong Company" capable of acquiring and

maintaining the top market share as an international total supplier of power tools for professional use, gardening equipment, pneumatic tools and other tools in each international region. To achieve these objectives, we will put focus on maintaining and expanding our efforts to develop new products that guarantee great satisfaction to professional users, our global production structure realizing both high quality and cost competitiveness at the same time, and the best marketing and service structure of the power tools industry in Japan and in international regions. Especially having plenty stock in each region as we have production and sales sites in each country, that realizes not only marketing but also speedy after-sale service and distribution, and this leads to build the customer relationship.

In order to carry out this management strategy, Makita is focusing its management resources on the professional-use tool category, while maintaining its strong financial position that can withstand any unpredictable changes in the operational environment including those related to foreign exchange risk and country risk.

4. Preparing for the Future

In the future, the Makita Group expects that the prospect for the global economy will continue to be uncertain. Meanwhile, the Group believes that demand for environmental and human friendly tools that contribute to the solution of social issues, such as the labor shortage and environment conservation by increased efficiency of works, will continue to increase further both in emerging and developed countries.

To cope with these assumed conditions, Makita will:

• Strengthen its R&D and product development capabilities, mainly for the technologies of motors and technologies for discharge/charge of batteries, to take the initiative in cordless products market;
• Positioning cordless outdoor power equipment as the next pillar of our future business after power tools, we will contribute to the realization of a decarbonized society by promoting deep cultivation and development of the market.
• We will strengthen the development and sales expansion of new finished goods in new fields such as cleaning, outdoor activities, and disaster prevention, and work to evolve into a supplier of a comprehensive range of cordless products.
• Implement measures to strengthen and improve the efficiency of production, procurement and distribution, while further upgrading global production bases; and
• Strive to raise its brand power by promoting the establishment of a sales and after-sales service network to offer community-based and fine-tuned response to needs of customers around the world.

On the basis of these factors, the Group will strive to maintain a solid presence in the industry and contribute to achieve a sustainable society as a global supplier of a comprehensive range of tools for creating comfortable homes and living environments.

(Initiatives for the TCFD Recommendations)

The impact of climate change on society, such as frequent wind and flood disasters, is becoming more serious, and companies are playing an increasingly important role in realizing a decarbonized society. Our company views climate change as an important business issue.

For this reason, our company has prioritized contributing to the solution of climate change issues by, for example, focusing on cordless outdoor power equipment that does not emit exhaust gas when used. In order to further accelerate these efforts, we have newly set targets for reducing greenhouse gas (GHG) emissions. We are working on our targets are to reach net zero emissions by fiscal 2040 (FYE 2041).

In addition, recognizing the importance of dialogue with stakeholders on climate-related risks and opportunities, we disclosed information for the first time based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

See our website for more information. (https://www.makita.co.jp/company/sustainability/environment)

[Governance]

In 2021, the Company established a Sustainability Committee, chaired by the President, to promote Companywide efforts to address sustainability issues through business activities.

Based on the expectations of stakeholders and social trends, as well as current management issues and the management environment, the committee selects material issues and implements measures after discussions and deliberations.

The committee considers climate change to be one of the most important sustainability issues, and deliberates on policies, measures, and plans to reduce GHG emissions. The committee reports and submits proposals on important matters to the Board of Directors, which deliberates on these matters and makes decisions in the course of monitoring and overseeing the Company's climate-related risks and opportunities.

[Risk Management]

The Company hold annual Disclosure Committee meetings to identify and scrutinize risks in our business activities as well as to evaluate and manage risks related to sustainability.

The details of climate change risks and opportunities are assessed and managed under the Sustainability Committee. The Board of Directors monitors and supervises sustainability-related risks and opportunities. In addition, among material issues, climate change and human capital are recognized as particularly important issues that have an impact on the Company's sustainable enhancement of corporate value, and the Company is strengthening its efforts.

[Initiatives for decarbonization]

The impact of climate change on society, such as frequent wind and flood disasters, is becoming more serious, and companies are playing an increasingly important role in realizing a decarbonized society. The Makita Group views climate change as an important business issue.

For this reason, we have prioritized contributing to the solution of climate change issues by, for example, focusing on cordless outdoor power equipment that does not emit exhaust gas when used. In order to further accelerate these efforts, we have set targets for reducing greenhouse gas (GHG) emissions. We are working on our targets are to reach net zero emissions by fiscal 2040 (FYE 2041). In addition, recognizing the importance of dialogue with stakeholders on climate-related risks and opportunities, we disclosed information for the first time based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

See our website for more information. (https://www.makita.biz/sustainability/environment/02/)

[Strategy]

In identifying climate-related risks and opportunities that could affect our business, we have used climate change scenarios from the International Energy Agency (IEA), the Intergovernmental Panel on Climate Change (IPCC), and other organizations to organize our views into (1) a 1.5°C to 2°C worldview in which decarbonization progresses and

(2) a 3°C to 4°C worldview in which warming proceeds as it is now. The following is a summary of the results.

Based on these worldviews, we have identified our climate-related risks and opportunities and qualitatively assessed them. For more details, see our website.

Risks

Risk onset timing: Short-term: up to 3 years; Medium-term: over 3 years to 10 years; Long-term: over 10 years

Opportunities

Opportunity onset timing: Short-term: up to 3 years; Medium-term: over 3 years to 10 years; Long-term: over 10 years ※1 Net Zero Energy Building ※2 Net Zero Energy House

[Indicators and Targets]

The Makita Group has set goals to reduce GHG emissions from its own business activities (Scope 1 and 2) to virtually zero by fiscal 2040 (FYE 2041) and from its entire supply chain (Scope 3) to virtually zero by fiscal 2050 (FYE 2051). The mid-term target for Scope 1 and 2 is to halve the fiscal 2020 (FYE 2021) level by fiscal 2030 (FYE 2031).

[Initiatives related to utilization of human capital]

Our initiatives to the utilization of human capital are as follows. Although initiatives related to human capital utilization are implemented by each consolidated subsidiary company, it is difficult to describe them for the entire consolidated group due to differences in scale and systems. Therefore, the Company's non-consolidated indicators and results are presented.

[Basic approach and strategy to human capital]

After Makita's expansion into the U.S. in the 1970s, the Company has pressed forward and proactively grown internationally. In 2005, we launched our lithium-ionbattery-poweredprofessional-use cordless tools ahead of the competition and, more recently, with environmental issues globally growing into an important theme, we have been working towards evolving into a supplier of a comprehensive range of cordless products by shifting from engine-powered to battery-powered products. This ability to flexibly respond to global market environment changes is the source of Makita's growth. What supports our growth is nothing other than the talents of the people working at Makita. Moving forward, Makita will comprehend changes in the global market environment and strive to grow with demand. To this end, we will advance the activities of diverse human resources and globalize Makita.

[Indicators and targets for human capital]

(1) Efficiently training new human resources to be competitive as quickly as possible

Makita is expanding its business on a global scale, and many of its employees have experience temporarily working or training abroad. As of March 31, 2024, approximately 26% of employees have worked overseas on temporary transfers, excluding those working at the Research and Development Headquarters or Domestic Sales Headquarters. For Makita to continue to grow sustainably, it is essential that newly hired human resources (both new graduates and mid-career employees) with diverse values gain international experience early on and receive training to be globally active. We are working to achieve the target we have set of 20% of employees sent for overseas training or temporary transfer having worked at Makita (non-consolidated) for five years or less by March 31, 2030.

This year, the number declined temporarily because the majority of young employees sent overseas who have been working at Makita for five years entered their sixth year. At the same time, we introduced a short-term overseas training system, so an increasing percentage of our workforce now has overseas training experience. After finishing the training, they spend several months to a year in Japan on preparation, which leads to successful subsequent overseas assignment. To achieve our target, we will utilize short-term training programs to increase the number of young employees who are eligible for overseas work.

(Initiatives for achievement)

• Proactively accepting internships and building relationships with university laboratories to lay the groundwork for attracting excellent human resources
• Launching short-term overseas training programs to enable more young employees to gain overseas experience ・To foster international career development and increase motivation amongst young employees, we held a roundtable discussion with employees with overseas work experience and shared the content in the Company newsletter.

(2) Promoting women's advancement

Makita is working to create an environment that is comfortable for women to work in and allows human resources with diverse values to demonstrate their abilities to the fullest. As a result, the average length of female employees working at Makita in Japan is almost the same as that of their male counterparts. We have set a target for the future to increase the percentage of female managers at Makita (non-consolidated) to at least 3% (10 or more people) by FYE 2030, so that every female employee can further play active roles, and we are advancing our efforts to achieve this target.

This year, we held the Women's Career Design Seminar over two sessions for interested female employees. Seminar participants reflected on their lives, identified their strengths and unique abilities, and created action plans for the future. At the second session, Ayumi Ujihara, Outside Director, spoke on stage, sharing her perspective as an experienced working woman about such subjects as looking at things positively, enjoying work, and networking.

Participants said that this was a good opportunity to think deeply about their own career development, and we will continue to implement measures to promote the active participation of female employee.

(Note)1 Average years of service as of 31 March 2024: 16.1 years for males, 17.4 years for females (Initiatives for achievement)

• Creating systems that allow flexible work styles, such as through the expansion of the childcare reduced working-hours system
• Actively recruiting female new graduates and mid-career hires
• Encouraging women to take the exams for promotions to leadership and management positions

(3) Encouraging employees to take childcare leave

Creating a rewarding environment that allows human resources with diverse values to balance work and family is a vital component to Makita's continuous growth. We have put in place a childcare leave system and a childcare reduced-working-hours system. In recent years, the percentage of women who use these systems has remained high, but the percentage of men using them has room to improve. Therefore, we have set a target of having at least 90% of male employees at Makita (non-consolidated) use the childcare leave system by FYE 2030 and are working towards achieving this goal.

• Making information on childcare leave available to workplace managers to promote the creation of an environment that encourages employees to the use of childcare leave