Konica Minolta : Notice on Establishment of a Joint Venture with CHANGE Inc. through a Company Split (Simplified Incorporation-type Company Split), Assignment of Share

December 24, 2021

To whom it may concern,

Company name: Konica Minolta, Inc.

Representative: Shoei Yamana, President and CEO

Stock Exchange Listing: Tokyo (First Section)

Local Securities Code Number: 4902

Contact: Mami Iwamoto, General Manager, Corporate Communications Division

Tel: [phone]

Notice on Establishment of a Joint Venture with CHANGE Inc. through a Company Split (Simplified

Incorporation-type Company Split), Assignment of Shares of the New Subsidiary and

Capital Increase by Third Party Allotment

Konica Minolta, Inc. (hereinafter referred to as "the Company") today determined, effective from April 1, 2022 (planned), as follows:

• The Company will establish a new wholly-owned subsidiary ("New Subsidiary," name yet to be decided) by means of an incorporation-type company split ("Incorporation-type Company Split") to take over the Local Government DX Support Project ("Project") currently being undertaken by the Company's Local Government DX Promotion Division using business process re-engineering (BPR).
• Simultaneously, the Company will assign the shares of the New Subsidiary to the Company's wholly-owned subsidiary, Konica Minolta Publitech, Inc. ("Konica Minolta Publitech") ("Share Assignment") and transfer Project to Konica Minolta Publitech.
• In addition, the Company concludes a joint venture agreement with CHANGE Inc. ("CHANGE") dated December 24, 2021. Under this agreement, while issuing new shares of the New Subsidiary through allotment of its shares to CHANGE ("Third Party Allotment"), the New Subsidiary will engage in accelerating DX support for local governments.

"Incorporation-type Company Split," "Share Transfer" and "Third Party Share Allotment" are collectively referred to as "Transactions."

As a result of the Transactions process, the New Subsidiary will not be treated as a consolidated subsidiary of the Company. As the Incorporation-type Company Split will be implemented through a simplified process involving the Company only, some of the disclosure items and contents are omitted in this notice.

1. Purpose of the Transactions
   Today, demands are growing for digital transformation as a means to drastically enhance operational efficiency among Japanese local governments, which are required to standardize 17

government jobs by the end of fiscal 2025 (March 31, 2026). Against this backdrop, the Company has conducted workload surveys in more than 120 local governments covering all their departments across Japan to help them streamline and standardize government jobs.

The Company had already started collaborating with CHANGE, a company with know-how in AI development and a track record of providing services to more than 1,600 local governments, in promoting the Local Government DX Support Project. Specifically, the two companies jointly developed AI to assist local governments in solving operational problems and standardizing operations (GAIA) and launched it in July 2021.

To accelerate the collaboration with CHANGE, the Company has determined to conclude a joint venture agreement with CHANGE, under which the Company will have its New Subsidiary take over the Project by means of an Incorporation-type Company Split and assign the shares of the New Subsidiary to Konica Minolta Publitech, a wholly-owned subsidiary of the Company engaged in offering DX services to local governments, while issuing new shares of the New Subsidiary through Third Party Allotment to CHANGE. In doing so, the Company aims to combine the assets of both companies to build a stronger position in the BPR market for local governments to help them facilitate DX through the Project in cooperation with partner companies more than ever, while expanding its business operations.

1. Incorporation-typeCompany Split

1. Summary of the Incorporation-type Company Split

1. Schedule

Date of the resolution by the
President and Representative	December 24, 2021
Executive Officer
Effective date of Company Split	April 1, 2022

The Incorporation-type Company Split will be implemented without approval at a shareholders' meeting as it meets the requirements for the simplified process of incorporation-type company split specified in Article 805 of the Companies Act.

(2) Method of the Incorporation-type Company Split

The Incorporation-type Company Split will be implemented through a simplified process, by which the Company is the splitting company and the New Subsidiary is the succeeding company.

(3) Allotment of shares following the Incorporation-type Company Split

Following the Incorporation-type Company Split, all the common shares of the New Subsidiary will be allotted to the Company as the splitting company. After the Incorporation-type Company Split, however, the Company will assign the shares of the New Subsidiary to its subsidiary, Konica Minolta Publitech, and then issue new shares of the New Subsidiary through Third Party Allotment to CHANGE.

1. Handling of share acquisition rights and bonds with share acquisition rights following the Incorporation-type Company Split
   Not applicable.

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1. Increase or decrease in the capital arising from the Incorporation-type Company Split The Incorporation-type Company Split will cause no change in the capital.
2. Rights and obligations to be assumed by the succeeding company

The New Subsidiary will assume the assets, liabilities and contracts related to the Project, and other rights and obligations specified in the Incorporation-type Company Split Agreement. By assuming these obligations, the New Subsidiary will release the original obligor from the obligations.

(7) Performance of obligations

The Company believes that there will be no problem in performing the obligations to be assumed by the Company and the New Subsidiary following the Incorporation-type Company Split.

2. Outline of the Parties Involved in the Incorporation-type Company Split

		Splitting Company	Company to be Incorporated
		(As of March 31, 2021)	(Planned for April 1, 2022)
(1)	Company name	Konica Minolta, Inc.	TBD
(2)	Location	2-7-2 Marunouchi, Chiyoda-	2-7-2 Marunouchi, Chiyoda-
		ku, Tokyo	ku, Tokyo
(3)	Representative	President and CEO	President
		Shoei Yamana	Mikio Beppu
(4)	Business overview	■Digital Workplace Business	■Support for local
		Development, manufacturing,	governments' DX through BPR
		and sales of multi-functional	■Software development
		peripherals (MFPs) and	business to support the local
		related consumables;	government DX
		provision of related services	■Other business incidental to
		and solutions; provision of IT	each of the above items
		solution services;
		■Professional Print Business
		Development, manufacturing,
		and sales of digital printing
		systems and related
		consumables; provision of
		various printing services and
		solutions
		■Healthcare Business
		Development, manufacturing,
		and sales of, and provision of
		services for diagnostic
		imaging systems (digital X ray
		diagnostic imaging,
		diagnostic ultrasound
		systems, and others);
		provision of digitalization,
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		networking, solutions, and
		services in the medical field
		Genetic testing; provision of
		services related to primary
		care; provision of drug
		discovery support services
		■Industry Business
		Development, manufacturing,
		and sales of measuring
		instruments
		Development, manufacturing,
		and sales of products, such
		as functional film used in
		displays, industrial inkjet
		printheads, and lenses for
		industrial and professional
		use
		Development, manufacturing,
		and sales of instruments
		related to imaging IoT and
		visual solutions; provision of
		related solution services
(5)	Share capital	37,519 million yen		100 million yen
(6)	Date of	December 22, 1936		April 1, 2022 (planned)
	establishment
(7)	Number of issued	502,664,337 shares		200 shares
	shares
(8)	Fiscal year-end	March 31		March 31
(9)	Major shareholders	The Master Trust Bank of Japan,
	and shareholding	Ltd.	10.47%
	ratio	Custody Bank of Japan, Ltd.
			6.60%
		MUFG Bank, Ltd.	2.42%	Konica Minolta, Inc. 100%
		SMBC Trust Bank Ltd.
		(Sumitomo Mitsui Banking
		Corporation Pension Trust
		Account)	2.39%

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3. Consolidated Operating Results and Consolidated Financial Position of the Splitting Company for the Past Three Years

(Millions of yen, excluding notable items; IFRS)

Fiscal Year-end	FYE March 31, 2019	FYE March 31, 2020	FYE March 31, 2021
Total equity	565,983	533,766	550,703
Total assets	1,218,986	1,276,768	1,299,752
Equity per share	1,123.39	1,058.29	1,093.98
attributable to owners of
the parent (yen)
Revenue	1,059,120	996,101	863,381
Operating profit (loss)	62,444	8,211	(16,266)
Profit (loss) attributable	41,705	(3,073)	(15,211)
to owners of the parent
Basic earnings (loss) per	84.33	(6.21)	(30.75)
share (yen)
Dividend per share (yen)	30.00	25.00	25.00

4. Overview of the Business Division to be Split

1. Business of the division to be split
   DX support for local governments through BPR
2. Operating results of the divisions to be divided Revenue 434,484 thousand yen
   (Note) Revenue figures are forecasted figures for the fiscal year ending March 31, 2022.
3. Items and book values of assets and liabilities to be split

			(Thousands of yen)
Assets		Liabilities
Item	Book value	Item	Book value
Current assets	37	Current liabilities	-
Non-current	180,749	Non-current liabilities	-
assets
Total assets	180,786	Total liabilities	-

(Note) Assets and liabilities are forecasted figures for the fiscal year ending in March 31, 2022.

5. Status of the Company after the Company Split

There will be no changes to the Company's name, location, representative, businesses, share capital or fiscal year-end due to the Company Split.

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