SKY Perfect JSAT : Integrated Report(A3)

Integrated Report 2023

For the year ended March 31, 2023

Brand Slogan

The modern world is overflowing with the information. Even a simple search can provide us the answers.

However, our hearts are not stirred by what is known;

it is the unknown that excites and arouses us. SKY Perfect JSAT Group works in the space field,

making its potential for growth as vast as the expanse of outer space.

We want to be a company that can turn the unknown into infinite possibilities.

These aspirations of SKY Perfect JSAT are encapsulated in

"Our Unlimited Vision, Your Practical Value."

Mission Space for your Smile

Toward a world where uncertainty

turns to peace of mind, difficulty turns to ease, and interest turns to passion

"Space for your Smile" captures our core vision for the future,

where spaces of all kinds-outer space, land, air, and sea,

as well as communities, family living rooms, and other places people call their own-beam with smiles.

From the glints of everyday happiness to the happiness that awaits in the future, we strive to create a world that leads to a brighter tomorrow for everyone.

Business Vision

Space Business

By establishing an innovative communications network for all of space and a global data collection network, we are helping to make a supersmart society a reality.

Media Business

We are contributing to the realization of a diverse and highly creative society as a platform that connects people, companies, and society.

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Integrated Report 2023

SKY Perfect JSAT Group principles

Our Five Key Questions

Are we rising to new challenges and learning from mistakes?

Are we collaborating with others to create new value?

Have we considered whether "pending" is the better choice?

Are we doing enough to surpass all expectations?

Can we talk with pride about our work to those dearest to us?

SKY Perfect JSAT	02	03	SKY Perfect JSAT
Integrated Report 2023	Integrated Report 2023

CONTENTS

04 Value Creation Story

04 Increasing our Corporate Value

1. Strengthening our Earnings Power

1. Improving our Growth Potential

1. Reducing Capital Costs

1. Message from the President

18 The SKY Perfect JSAT Group: A Proven Track Record

20	Value Creation Story
22	Promotion of Sustainability Management	Putting Value
26	Risks and Opportunities	28 Creation into
		Practice
		30	Financial and
			Non-Financial Highlights
		32	Message from
			the Chief Financial Officer
		36	Review of Operations: Space Business
		44	Review of Operations: Media Business
		52	The Environment
		56	Society and Human Resources

60 The Governance

Underpinning

Value Creation

61 Corporate Governance

68 Roundtable Discussion with Outside Directors and a Corporate Auditor

70 Board of Directors

Value Creation Story

Putting Value Creation into Practice The Governance UnderpinningValue

Editorial Policy

This report is intended to be a tool to promote dialogue with a wide range of stakeholders, including shareholders and investors, as well as provide information on the Group's medium- to long-term value creation, including management strategy, financial and performance trends, and sustainability -related information such as environmental, social, and governance (ESG). We used the "Guidance for Integrated Corporate Disclosure and Company- Investor Dialogues for Collaborative Value Creation" issued by the Ministry of Economy, Trade and Industry, the "International Integrated Reporting Framework" issued by the Value Reporting Foundation (VRF), the GRI Standards, and other documents as references in editing this report.

Reporting Period

The report covers fiscal year 2022 (April 2022 to March 2023), but includes some information that was current at the time of publication.

Future Outlook

Forecasts, strategies, management policies, goals, and other statements in this report that are not historical facts are predictions about the future that are based on the management's assumptions, plans, expectations, and judgments in light of the information currently available to it. They are subject to various risks and uncertainties that could cause actual results to differ significantly from expectations.

72	Data Section/Financial Section
72	Satellite Basics/ Satellite Fleet
	75	Glossary
	77	Stock Information/Corporate Information
	80	Materiality and efforts to address ESG issues
	82	Consolidated Financial Highlights
	84	Management's Discussion and Analysis

Creation Data Section/Financial

Company Name	Related Websites
• SKY Perfect JSAT Holdings Inc.: "the Company"	Investor Relations
• The Company and its domestic and overseas subsidiaries and affiliates:	https://www.skyperfectjsat.space/en/ir/
"the SKY Perfect JSAT Group" and "the Group"	Sustainability
• SKY Perfect JSAT Corporation
	https://www.skyperfectjsat.space/en/sustainability/

92	Consolidated Balance Sheet
94	Consolidated Statement of Income
95	Consolidated Statement of Comprehensive Income
96	Consolidated Statement of Changes in Equity
97	Consolidated Statement of Cash Flows
98	Notes to Consolidated Financial Statements
122	Independent Auditor's Report

Section

SKY Perfect JSAT	04
Integrated Report 2023

Value Creation Story

Increasing our Corporate Value

Focusing on our Nine Key Issue Themes (Materiality)

05	SKY Perfect JSAT
Integrated Report 2023

The SKY Perfect JSAT Group intends to focus on its nine key issue themes-or materiality. In order to realize what we are aiming for 2030, we intend to strengthen our earnings power by restructuring our existing businesses, and we intend to improve our growth potential in the medium to long term through proactive investments. At the same time, we intend to reduce our capital costs through sustainability management and increase our corporate value by enhancing both our economic and social value.

Building resilient broadcasting	Improving the richness of life	Contributing to the environment to
and communications infrastruc-	through a diversity of content	make a decarbonized society and
ture, eliminating information gaps		recycling-based economy a reality

Strengthening

our Earnings

Power

Reinforcing a stable earnings base

Management strategies

Generating

Free

Value Creation Story

Putting Value Creation into

Improving the environment

in space

Promoting innovation which contributes to the environment and society

Promoting partnerships

MATERIALITY

• Strengthen the profitability of existing businesses
• Enhance human capital
• Improve a management base

Improving

our Growth

Potential

Building medium- to long-term

foundations for growth

Management strategies

• Establish businesses in new

domains

Cashflows

Maximizing

Corporate

Value

Reducing		Economic value
Capital Costs
	+ Social value

Promoting sustainability management

Management strategies

Practice The Governance Underpinning Value Creation Data Section/Financial

Developing a strong	Activities by	Regional and
base for management	a diverse array of people	community development

• Enhance human capital

• Improve a management base

• Improve a management base -Strengthen dialogue with share-
  holders and investors
• Enhance human capital

Section

VALUE CREATION STORY

SKY Perfect JSAT	06
Integrated Report 2023

Value Creation Story

Strengthening

our Earnings

Power

Reinforcing

a stable earnings base

The SKY Perfect JSAT Group is a pioneer of the Japanese space business. In 1989, we became the first Japanese company to launch a communications satellite and, since then, we have used more than 30 satellites.

Business Fields of the SKY Perfect JSAT Group from people's lives on the ground to space

SDGs in space: Space debris removal

Space debris has become a global issue. For this reason, in collaboration with RIKEN and other research institutes, SKY Perfect JSAT has started developing the world's first satellite capable of eliminating space debris using lasers.

Geostationary orbit

36,000 Km

© Boeing

Low earth orbit

Image courtesy of iQPS Inc.

~1,000 Km

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Integrated Report 2023

Geostationary satellites: connect anytime, at all times

In 1989, SKY Perfect JSAT succeeded in launching JCSAT-1, Japan's first-ever private communications satellite. Since then, we have provided stable communications from space-in line with our mantra of "connect anytime, at all times"-not only in normal times but also in disaster.

Satellite data x AI: utilizing data from low earth orbit satellites

Our information services draw on various types of data that can be collected from our low earth orbit satellites, including images and positional information, and are used in the fields of security and disaster prevention. We are also seeking to open up new markets, in the fields of finance, insurance, logistics, and agriculture, forestry, and fisheries.

Value Creation Story

Putting Value

Our Space Business provides global coverage, with a particular focus on Japan and the Asia-Pacific region, and we are strengthening our earnings base in the field of mobile communications services, while at the same time making our entry into the data intelligence business.

In our Media Business, which delivers SKY PerfecTV!, we cater to the diverse needs of our viewership through our broadcasting and distribution, and we are also steadily increasing our FTTH customer base.

Communications for mobility: Stay connected even in the sky

We offer Internet connection services for aircraft by satellite communi- cations, enabling customers to use their smartphones, tablets, and computers to access the Internet while in the skies.

Stratosphere

20 Km

Atmosphere

10 Km

HAPS: a relay station in the sky

In order to provide communications services with remote islands and other regions where the establishment of terrestrial lines is problematic, we are aiming to position a high-altitude platform station (HAPS) in the stratosphere.

We also intend to use HAPS to provide communications services for remote sensing, and for mobilities, including drones, AAM (Advanced Air Mobility), and others.

Creation into Practice The Governance

Materiality themes

Meeting diverse viewership needs through broadcasting and distribution

Broadcasting: SKY PerfecTV!

Fiber to the home (FTTH) Business: covering 42.8 million households

Our FTTH Business uses optical fiber lines to deliver terrestrial, BS and CS, and 4K8K satellite broadcast TV retransmission services. Today, our business has expanded to cover approximately 42.8 million households* in 37 prefectures.

Underpinning Value

Building resilient broadcasting and communications infrastructure, eliminating information gaps

Improving richness of life through a diversity of content

Promoting partnerships

Developing a strong base for management

Activities by a diverse array of people

Launched in 1996 as PerfecTV!, Japan's first-ever digital broadcasting service, SKY PerfecTV! has become one of Japan's largest multichannel pay TV broadcast services.

Subscribers can use the free SKY PerfecTV! distribution service to access broadcasts on their smart- phones, tablets, and computers.

Distribution: SPOOX

The SPOOX pay video distribution service makes diverse content available via various purchasing meth- ods, from monthly subscriptions with unlimited access to the purchase of individual content.

Ground

0 Km

Sea

0 Km

*Due to recent changes in market environments, we now calculate the number of households using data from the National Census.

According to our previous calculation methods, which relied on determining the number of fixed- line telephone users, our FTTH coverage currently stands at approximately 34.2 million households. Data is correct as of March 31, 2023.

Comprehensive support for video relay, production, and distribution

Our Media Solutions Business helps companies resolve problems related to video relay, production, and distribution. We leverage the knowledge we have accumulated through our operation of SKY PerfecTV!, and make full use of the broadcasting facilities, studios, and other program production facilities at the SKY PerfecTV!Tokyo Media Center.

Communications for mobility: Stay connected even at sea

We offer Internet connection services via satellite communications over a vast sea area,meeting the demand for Internet access at sea where terrestrial line communications are difficult.

Creation Data Section/Financial Section

SKY Perfect JSAT	08
Integrated Report 2023

Value Creation Story

Improving

our Growth

Potential

Building a foundation for

growth by 2030

The competitive environment in our areas of business is undergoing significant change, with technical innovations in geostationary satellites, the rise of new low- earth satellite operators, and the rapid growth of video distribution services.

But at SKY Perfect JSAT, we see this change as a business opportunity. Indeed, we intend to improve our medium- to long-term growth potential by promoting the development of technologies and services in both our Space Business and our Media Business-in a creative, nonlinear manner-and by contributing to the realization of a supersmart society.

Materiality themes

Contributing to the environment to make a decarbonized society and recycling-based economy a reality

Improving the environment in space

Promoting innovation which contributes to the environment and society

Promoting partnerships

Developing a strong base for management

Activities by a diverse array of people

Space Business➡P.36

Contributing to making a supersmart society a reality

Building information and communications infrastructure that supports society and people's daily lives.

The communications infrastructure of our Space Business is currently based on conventional geostationary satellites. However, in 2021, in partnership with Nip- pon Telegraph and Telephone Corporation (hereinafter "NTT"), we commenced development on a "Space Integrated Computing Network," capable of providing diverse communications infrastructure according to differing needs.

The Space Integrated Computing Network entails building innovative communications networks and earth environment data collection networks that cover all of space, and seeks to contribute to making a supersmart society a reality.

Segment profit goal	¥21 billion

¥13.5 billion

FY2022FY2030

Media Business ➡P.44

Realizing a highly creative society

As a platform that connects people, companies, and society.

In our Media Business, we are seeking to expand our broadcasting, distribu- tion, and realistic fan experience services and, at the same time, grow our FTTH Business.

Other initiatives include building a media solutions business that includes Media HUB Cloud, a service that utilizes the Group's tangible and intangible assets; entering the field of connectedTVs, and providing environments for viewing diverse video distribution services; and establishing an advertising platform that leverages data on individual preferences and behaviors.

Segment profit goal	¥5.0 billion

¥2.8 billion

FY2022FY2030

09	SKY Perfect JSAT
Integrated Report 2023

Investment in New Domains by 2030: more than ¥150 billion

Cyberspace

Analysis processing

	GEO	Universal NTN
		Feedback
Data Transfer		LEO
	from
Digitization
		analysis
Sensing		HAPS
	results

Data Collection

Network

Physicalspace

Disaster anticipation, Industrial revitalization, Improving the quality of life

*NTN：Non-Terrestrial Network

Investment in New Domains by 2030: more than ¥50 billion

Connected TVs
Dongles/Creation of
advertisement platform	Multi-channel/core products/
			live and recorded
			Broadcasting
	Distribution	Fan experience	Real	Real
	experiences
		Live/VOD		Events
		Niche genres	Merchandise/tours
FTTH (fiber-to-the-home) redistribution	Business	Expand the fan experience
TMC	Call centers	foundation
		by combining broadcasting,
						distribution, and
		Media solutions	oine experiences
		Media HUB	Content
		cloud	Database

Value Creation Story

Putting Value Creation into Practice The Governance Underpinning Value Creation Data Section/Financial Section

SKY Perfect JSAT	10
Integrated Report 2023

Value Creation Story

Reducing CapitalCosts

Promotion of Sustainability

Management

By strengthening our ESG response, we are dealing with risks related to our business activities, while also working on turning these into business opportunities.

We are particularly focused on addressing climate change and other environmental issues, in addition to enhancing our human capital. Currently, we are in the process of reinforcing our management foundation by establishing a corporate governance system and ensuring risk management, including security.

In addition, we are aiming to reduce capital costs by enhancing dialogues with shareholders and investors and the content of disclosures to earn the trust of capital markets over the long term.

Materiality themes

Contributing to the environment to make a decarbonized society and recycling-based economy a reality

Promoting innovation which contributes to the environment and society

Promoting partnerships

Developing a strong base for management

Activities by a diverse array of people

Regional and community development

Environment

For more than 30 years, the SKY Perfect JSAT Group has expanded its business with artificial satellites that run on solar power, a clean form of energy that is generated in space.

According to our own research, satellite communications systems use just one-third the energy of ground communication lines. Environmental measures are seen as a major business opportunity for developing services in the areas of satellite communications, satellite images, and business intelligence. We are therefore working on both aspects of expanding existing businesses and creating new businesses.

• In April 2023, we formulated and announced our Basic Environmental Policy and Green Procurement Policy.
• We have formulated and disclosed a transition plan aimed at achiev- ing carbon neutrality.
• We have reviewed risks and opportunities with respect to climate change and disclose relevant countermeasures and other information.
• We have achieved a substantial renewable energy usage rate of 93% at our group sites, including our satellite control and broadcasting centers. We are also contributing to reducing customer CO2 emissions through the provision of environmentally friendly services.

Society

11	SKY Perfect JSAT
Integrated Report 2023

Our goal is to implement a highly transparent system of corporate governance that can swiftly deal with changes in the business environment. Further, as a corporate group that provides highly public services in the areas of space and media, we are pursuing rigorous corporate ethics based on compliance and the reinforcement of our risk management system.

• In April 2022, we announced our vision for 2030 and capital allocation over the next five years.
• We have newly provided details on contract backlogs and our satellite fleet in the Space Business in our quarterly financial results.
• At Board of Directors meetings, in addition to management oversight, the composition and operation of the Board of Directors and the promo- tion of dialogues with shareholders, etc., are particularly under consid- eration (please see "Evaluating the effectiveness of the Board of Direc- tors" on P.63).

Governance

We aim to be a company with an appealing organization that Japanese and overseas partners choose to work with. Human resources are a vital asset for creating value from dynamic collab- oration; as such, we have established environments and systems that enable all Group employees to work safely and securely, as well as provide support for each individual to develop their skills and achieve their full potential.

• We formulated our Human Resources Strategy in April 2023, and we are currently working on transforming our people and organization. In addition to the existing ratio of female manag- ers, labor productivity and engagement indicators were set as long-term KPIs.
• Recognizing the importance of respect for human rights, we have set the formulation of a human rights policy as a target and KPI for fiscal 2023.

Value Creation Story

Putting Value Creation into Practice The Governance Underpinning Value Creation Data Section/Financial Section

SKY Perfect JSAT	12	13	SKY Perfect JSAT
Integrated Report 2023	Integrated Report 2023

Message from the President

We will steadily implement growth investments aimed at 2030 and work toward Value Creation by "Change."

Eiichi Yonekura

Representative Director, President

Rebuilding SKY Perfect JSAT

My biggest mission is to rebuild the SKY Perfect JSAT Group's business model into a sustainable one. Our founding business model, centered on satellite communications, has been forced to undergo a drastic change due to drastic changes in the external environment. Looking to the future, fortunately, the use of satellite communications has expanded significantly, and I believe the value of the assets we have built up so far is actually increasing.

Unlike in the past, it will be important for our Space Business, as the only private satellite communications operator in Japan, to demonstrate its know-how in the utilization of space by focusing on areas other than satellite communications, such as earth observation. Meanwhile, in the Media Business, while broadcasting services are not a growth driver, I do not believe they will disappear as infrastructure. The number of subscribers is gradually declining due to an influx of competitors, but we are still supported by 2.8 million subscribers, and I believe that stable revenue can be secured through cost control and diversification of revenue sources. Synergies with the Media Business also contribute to satellite communications revenues, and we will promote efforts to transform the business into a broadcasting and distribution platform that can be operated at low cost.

Last year, we announced our vision for 2030 and decided to invest more than ¥200 billion in growth. As part of its long-term vision, SKY Perfect JSAT has established a new management strategy, Value Creation by "Change." In both the Space Business and the Media Business, we have decided to focus on strengthening human capital and enhancing our management foundation in order to explore new business domains and improve profitability in existing business. We will maximize the value of our physical and human capital and "Change" ourselves into a company that can generate sustainable profits while serving society.

Sustainable Growth for Society and Our Group

Mission

Sustainability Policy

Space for your Smile

Economic Value

Social Value

FY2030 target

Delivering peace of mind and safety of

society, and contributing to the creation of

Net Profit

over ¥25 billion

enjoyable future

Business

Space Business

Vision

Media Business

Contribution to the realization of super-smart soci-

Contribution to the realization of a diverse and

ety (Society 5.0) by building an innovative commu-

highly creative society as a platform that connects

nications network for all spaces and a global data

people, companies, and society

collection network

Management Strategies

Value Creation by "Change"

Exploring new business

Improving profitability in

Strengthening human

Enhancing of management

domains

existing business

capital

foundation

Value Creation Story

Putting Value Creation into Practice The Governance Underpinning Value Creation Data Section/Financial Section

SKY Perfect JSAT	14
Integrated Report 2023

Progress towards 2030

Net income for fiscal 2022 increased 8% over the previous year, exceeding expectations. The Space Business is driving growth, but the Media Business, despite a continuing decline in the number of subscribers, also achieved an increase in profit on a consolidated basis through cost controls. Against this backdrop, looking towards fiscal 2030, we are gradually implementing growth investments of more than ¥150 billion in the Space Business and more than ¥50 billion in the Media Business in the form of investments in new domains.

In fiscal 2022, the Space Business accelerated the development of information services using data obtained from satellites as an initiative in the field of business intelligence. In addition, Space Compass Co., Ltd. ("Space Compass"), which was established with NTT, initiated activities to realize its "Space Integrated Computing Network" initiative. The Media Business is focusing on B-to-B business development while reviewing its cost structure, and we are starting to see positive results from this activity. In fiscal 2022, I believe we were able to demonstrate, in some small way, that our vision for 2030 is more than just talk.

Management strategy

• Space Business

The space-based business market, including the fields of communication, positioning, and remote sensing (earth observation), is expected to grow significantly in the future. In such a future soci- ety, it will also be important to solve economic development and social issues through systems that tightly integrate physical and cyberspace.

Leveraging our more than 30 years of experience in the space and satellite business, we will invest aggressively in fields such as Universal NTN (nonterrestrial network), optical data relays, and business intelligence, with the goal of achieving segment profit (net profit) of ¥21 billion in 2030.

Improving profitability in existing business

In our existing satellite communications business, we will continue to respond flexibly to the diverse needs of customers by proactively incorporating new technologies for the launch of successor satellites, such as the use of digital payloads with variable beams and bandwidths. In addi- tion, while proposing value-added services, such as services utilizing ground station equipment, we will encourage the extension of existing contracts to make our customer base more stable.

To handle growing markets such as internet access on aircraft and ships, we will expand the provision of high-speed,large-capacity communications services by using our fully digital satellite (Superbird-9), which is scheduled to go into operation in the first half of 2027, to supplement our two high throughput satellites already in operation (Horizons 3e and JCSAT-1C). In August 2023, we successfully launched Horizons-4 (the successor to Horizons-1), our fifth satellite jointly owned with U.S.-based Intelsat. Through alliances with global players, we will expand satellite coverage and capacity and further strengthen our overseas business development.

Exploring new business domains

The "Space Integrated Computing Network" initiative has two major objectives. The first is to build a communications network that combines HAPS and geostationary and nongeostationary satellites to meet the communication requirements of the future society. The second is to build a data center in space using optical communications and computing technology to maximize the use of global data collected from space. Space Compass is working toward the launch of the space data center business in fiscal 2024 and the space RAN business service in fiscal 2025. To make the space data center business a reality, Space Compass has already signed a joint venture

15	SKY Perfect JSAT
Integrated Report 2023

agreement with U.S.-based Skyloom Global Corp. for the launch of an optical data relay satel- lite. In addition, through investment in and collaboration with the Institute for Q-shu Pioneers of Space, Inc. (iQPS Inc.), we are focusing on business development utilizing a constellation of small SAR*1 satellites in low earth orbit, and as a unique initiative of SKY Perfect JSAT, we are developing a series of information services using a variety of types of data, such as images and loca-

tion information obtained from satellites, starting with the LIANA*2. Through these efforts, we

Value

will enhance both economic and social value as a space infrastructure company and, at the same

Creation

time, greatly expand the potential of business in new domains.

In addition, as the importance of space utilization in the security field increases in response

Story

to changes in the international situation, it is important to strengthen our cooperative framework

with the public sector and leverage the knowledge and track record we have cultivated in the

space business for application to the security field. In

addition to satellite communications and

business intelligence, we will actively propose services such as Space Situation Awareness (SSA).

Together with Space Compass, SKY Perfect JSAT participated in The Japan-U.S. Comprehensive

Dialogue on Space held in March 2023. Having built relationships with the U.S. government and

Putting

U.S. companies, over the years, I believe SKY Perfect JSAT can play a useful role in the security

field, for example in the joint utilization of space assets by the U.S. and Japan.

Value

*1 Synthetic aperture radar (SAR) obtains ground surface information by irradiating the surface of the earth with microwaves and analyzing the

Creation

structure

reflected signals. It enables observation night and day and is even able to penetrate clouds and smoke.

*2 Land-deformation and Infrastructure ANAlysis: a service that uses SAR image analysis to monitor changes in ground sloping and infra-

into

Toward the realization of the Space Integrated Computing Network

Practice

FY2022

FY2023

FY2024

FY2025

FY2026

FY2027

FY2028

FY2029

FY2030-

Launch of

Launch of

Launch of

Skyloom collaboration

additional successor

Unit 1

Units 2 and 3

satellites

The

Space data

Jan. 2023

Satellite manufacturing

Start of service

Global coverage

Increased capacity and

contract signed business development

GovernanceUnderpinningValue

Foundingacompany

• Area expansion

expanded computing

Space RAN

HAPS Japan

center

• Over Asia

• Equipped with space computing capabilities

Adopted

Key and Advanced Technology R&D through Cross Community Collaboration Program (K Program)

March 2023

• Demonstration of optical communication function and performance between LEO-LEO and LEO-GEO satellites

Space Integrated

Computing

Expo demo

Network

AALTO collaboration

Start of service

Business expansion

Japan-wide

HAPS overseas demonstration

deployment

• Outlying islands in Japan, etc.

• Additional investment in HAPS

• Looking to expand in Asia

demonstration

• Capability expansion

Creation

HAPS technology development and legal institutionalization

Enhancement (higher speed, larger capacity) Optical communication function

n Media Business	Data
difficult to foresee when the number of subscribers in the broadcasting business will bottom out.	Section/Financial
Looking at the environment surrounding the Media Business, the battle for content and custom-
ers with well-funded video distribution service companies has become extremely fierce, and the
trend toward mergers and acquisitions is gaining momentum. Under these circumstances, it is
However, what we are aiming for is a platform for broadcasting and distribution, and with that in	Section
mind, we will control costs, slim down, and invest in what is essential for business transforma-
tion with the goal of segment profit (net profit) of ¥5 billion in 2030.

SKY Perfect JSAT	16
Integrated Report 2023

Improving profitability in existing business

In the broadcasting and distribution business, continuing from last year, we hosted the German Bundesliga Japan Tour as a "real" event and combined it with our free distribution service for SKY PerfecTV! subscribers as a way to improve subscriber satisfaction. Our call center has already started accepting outsourced work from B-to-C companies such as mail-order compa- nies. Similarly, our SKY PerfecTV! Tokyo Media Center will not be closed internally, but will open its assets to external parties as a media solutions business to diversify its revenue sources and change its profit structure to one that is commensurate with its costs. In addition, we closely scrutinize which costs are necessary and which are not with an eye to profitability and carefully decide on an individual basis which spigots to shut off.

Meanwhile, the optical fiber-based retransmission service (FTTH) is on the rise, and the number of connected households will continue to increase as the service area is expanded. We have also received many inquiries about the new collaborative service we launched to solve the problems of cable TV operators, and we will continue to expand this service as well.

Expansion of business in new domains

A new domain for the media business is the in-house development of dongles that connect to Connected TVs. This will create an advertising distribution platform that can provide a variety of VOD services, from free and ad-supported video distribution to flat-rate and rental services.

In this way, the Media Business, in parallel with drastic cost structure reform, is evolving into a hybrid platform that combines broadcast and distribution. Our investments in it are designed to make it attractive not only to the people who watch the content, but also to those who deliver the content.

• Strengthening human capital

Today, we find ourselves in the "game change" era, in which AI and other technological innovations are making conventional wisdom obsolete in the blink of an eye. In times like these, what we need most is people who can think flexibly about what will happen in the future and actually take action. Our future depends on cultivating such talent.

SKY Perfect JSAT's goal is Value Creation by "Change," but this cannot be achieved without revitalizing the people and organizations that drive "Change." Therefore, seeking to break away from the way things had been done in the past, we changed the personnel system to recruit more and more young employees. To accelerate change, we will identify high performers who take responsibility for their output and promote them early. At the same time, we raised starting salaries and wages with the expectation that young employees who will create the future of our company will be motivated to lead the change. We are also planning to offer a full range of training programs that can be taken on a voluntary basis. Of course, we also emphasize diversity and promote the participation of women and mid-career hires.

I personally try to spend time talking to employees at the team leader level to learn first-hand what they are thinking and what they envision for the future. In fact, I realized that talented people are often hidden from view. I believe it is very important to elevate such hidden talent to strengthen our human capital.

• Enhancing of management foundation

To enhance our management foundation, we have newly appointed Ms. Aoki, an expert on space law, and Mr. Toyota, an expert on security strategy from the Ministry of Defense, as outside direc- tors. Just as navigators help keep a ship on course, I am counting on the two of them to guide, supervise, and advise us from an objective standpoint, especially in the Space Business.

17	SKY Perfect JSAT
Integrated Report 2023

In addition, we will focus on cybersecurity measures, digital transformation (DX), and sustainability initiatives. In June 2023, we were included in the ESG index "FTSE Blossom Japan Sector Relative Index" for the first time. We will continue to expand our management foundation with ESG in mind, including, with regard to the environment, in particular, efforts to reduce greenhouse gas emissions.

To our stakeholders									Value
At present, SKY Perfect JSAT's P/B ratio is below 1x. To break out of this situation and sustain-
Creation
ably improve our stock price, my first priority is to	deepen	constructive dialog with our share-
holders and investors to help them understand our growth strategy. To that end, we will tangible	Story
form to our 2030 Vision, including the execution status of our planned capital allocation, and
explain it to stakeholders.
In line with the policy announced last year of returning ¥40 billion to shareholders over five
years, we increased the annual dividend to ¥20 in fiscal 2022 and are maintaining the same divi-
dend level in fiscal 2023. We will also implement share buybacks on a flexible basis.
When all is said and done, the goal of SKY Perfect JSAT's "Change" in preparation for 2030	Putting
is to ensure that a business that invests about ¥20-40 billion in a single satellite can respond to
major changes in competition, technological innovation, and other developments and continue	Value
to generate a decent profit. The management team must, therefore, never settle for the status
Creation
management team, are fully aware of our responsibility for the future of SKY Perfect JSAT and are
quo, but always look 5 to 10 years into the future and consider what steps to take now. We, the
approaching its "Change" with a sense of urgency and nervous excitement. We have also raised	into
panies to align their perspective with that of shareholders and raise their awareness of the need	Practice
the allocation ratio of the compensation paid in shares to executive officers of the operating com-
to enhance corporate value.
We are currently in the process of investing in growth, and although our results for fiscal 2023	The
are expected to remain at the level of fiscal 2022, I	would like to achieve a net profit of over ¥25
Governance
billion by 2030 by implementing the "Change" I have been discussing here. In fiscal 2023, we will
realize this "Change" with an even greater sense of urgency. To our stakeholders, I truly appreci-
ate your valuable opinions, even if they are sometimes tough to hear, and I look forward to your	Underpinning
	Plan to invest over ¥200 billion in new domains by 2030
continued support in these endeavors.
		SPACE				MEDIA			Value
							Creation
Using new technology and		Over ¥150 billion		Driving new business			Over ¥50 billion
Expanding business field		beyond viewing experience
Satellite		Universal NTN					Connected TV		Data
	Optical data relay	Satellite			Media Solutions
Communications	broadcasting/
Business intelligence			Content Database
		FTTH			Section/FinancialSection
									Real Service
2030 Segment Net Income Target ¥21 billion		2030 Segment Net Income Target ¥5 billion

Sustainable growth

Target Net income is over ¥25 Billion in 2030