Topcon : Single-page view for printing(54 pages)

Topcon Report 2023

1. d i g i t a l t r a n s f o r m a t i o n w i t h a h u m a n t o u c h

To Our Stakeholders

Takashi Eto

President and Chief Executive Officer

Topcon aims to become a company that customers need with our advanced DX solutions.

Our corporate philosophy is Topcon contributes to enrich human life by solving the societal challenges within healthcare, agriculture and infrastructure.

Since our founding, we have developed our business globally, focusing on surveying instruments and ophthalmic medical devices, leveraging our strengths in precision optics and optomechatronics technology.

In 1994, we came up with a new concept of "automating the construction process," which no one had thought of at that time, and created a new business market and potential demands.

This was a turning point, and we promoted mergers and acquisitions of various overseas technology venture companies and distribution companies, integrating our unique technology and ideas and transforming into a solution provider for the "healthcare, agriculture, and construction industries."

Our customers are professionals with specialized knowledge. With a "Think Globally, Act Locally" mindset, we try to explore their needs, listen to their opinions, and propose new unique DX solutions they don't even think of to contribute to creating a prosperous society globally.

This is the "TOPCON WAY" that we aim for.

Going forward, with a customer-oriented,field-oriented approach and a spirit of challenge, we will continue to strive for "the company that is needed" by stakeholders and promote ESG (environmental, social, and governance) management through our business.

A digital transformation with a human touch.

01 TOPCON REPORT 2023

A digital transformation with a human touch

Topcon perceives it as its purpose to leverage digital transformation (DX) to provide unique solutions to societal challenges in the areas of healthcare, agriculture and infrastructure, which are essential for people around the world to live better lives. Pivoting on "leading-edge hardware" that captures potential customer needs, it has promoted the use of software technologies acquired through overseas M&A (mergers and acquisitions) and other activities, as well as digitalization and automation.Through integration with IoT networking technologies where all things are connected to the network, it has created new DX solutions to transform customers' approach to work itself, across fields including construction, agriculture, and eye care.

Topcon's strength lies in its dual-pronged approach to business growth, driven by leading-edge hardware products as well as services in our solutions business. In addition to the core optical and sensing technologies developed since its founding, Topcon integrates applied technologies such as image processing, machine learning, automation, and remote operation to provide a diverse range of DX solutions in the areas of healthcare, agriculture and infrastructure.

In this Integrated Report, Topcon hopes to clarify its significance of existence and social mission, convey its vision for corporate value to achieve a sustainable society and sustainable growth for the Topcon Group, and communicate Topcon's "value creation process" with a sense of plot and in an accessible way to all stakeholders.

Creating a system for eye disease screening

	H e a l t h c a r e
	To Our
	Stakeholders
A g r i c u l t u r e	I n f r a s t r u c t u r e
Automation of	Automation of
farm operations	construction process

TOPCON selected for the fourth consecutive year as a DigitalTransformation Stock (DX stock), and first time chosen for the DX Grand Prix!

Topcon Corporation (Headquarters: Itabashi,Tokyo; President and CEO:Takashi
Eto) has been selected for the DX Grand Prix 2023 in the DigitalTransformation
Stock (DX Stock) designated by the METI (Ministry of Economy, Trade, and
Industry) and theTokyo Stock Exchange.
DX Stocks are selected for each industry category, targeting companies
listed on the Tokyo Stock Exchange that have established internal systems to
promote DX that contributes to improving corporate value. These companies
fundamentally transform their business models based on digital technologies
and aim to achieve new growth and enhance their competitiveness through
digital transformation.
Topcon has been selected for four consecutive years since 2020, and this	DX Grand Prix
year was chosen as a "DX Grand Prix company," an award for being a leading
company in the selected stocks.	2023

TOPCON REPORT 2023 02

Philosophy System

Under current business situation such that it is always required to demonstrate its all-round ability, it redefined and clarified its common values transcending nationalities and individual companies in order to exert its strengths such as global scale and diversity, and to build a self- supporting organizational culture. Every employee conductsTOPCON WAY, andTopcon group will step in brandnew direction for centennial through which it does not only conduct its strategies to strengthen the profitability by foreseeing changes of business environment, but also enhance its capability with the mindset of TOPCON WAY.

Corporate Identity

Topcon contributes to enrich

human life by solving the societal

challenges within healthcare, agriculture and infrastructure.

Management Policy

Topcon focuses on leading-edge

technology to provide new value through

innovation and manufacturing.

Topcon respects diversity and

acts as a global company.

Topcon places the utmost priority on compliance and continues to be a trustworthy partner to all stakeholders.

03 TOPCON REPORT 2023

Table of Contents

01	Introduction
Message from the CEO	01
	Philosophy System	03
	Toble of Contents	04
	Societal issues around the world	05
	This is the future Topcon is aiming for	06
	Topcon's digital transformation	07
	Topcon's Overview	09

11

21

27

37

47

Topcon's Path Forward

Message from the CEO

Mid-term Business Plan 2025

Financial Strategy

Strategies by Business

Topcon's Value Creation

Value Creation Process

Topcon's Manufacturing Craftsmanship

Sustainability

Sustainability

Materiality

Environmental Initiatives

Societal Initiatives

Governance

Corporate Governance Initiatives

Compliance / Risk Management

Management Structure

Information

Financial Highlights

Discussion and Analysis of Financial Results

Topcon Group List

Corporate Profile and Stock Information

11

15

16

17

21	Editorial Policy
23	As stated in our Corporate Identity,
Topcon contributes to enrich human
	life by solving the societal challenges
	within healthcare, agriculture
	and infrastructure. Based on this
	identity, Topcon strives to contribute
	to the development of society
	and conservation of the global
	environment, through its unique
27	products and services. In FY2016,
we began publishing the Integrated
30	Report, "Topcon Report" in order
to inform the public regarding our

31 initiatives to continuously increase Topcon's corporate value over the

34 long term. The Topcon Report centers on information that has a significant

	impact on our corporate value. It
	uses as references the disclosure
	framework of the International
	Integrated Reporting Council (IIRC),
	as well as the
37	Guidance for
Collaborative
41
Value Creation
45	of the Ministry
of Economy,
	Trade and
	Industry.
	Note on performance forecasts and
	outlook statements
47	All plans, strategies, future
49	performance forecasts, and outlooks
presented in this report are based on
51	information currently available to the
Company. Our actual performance

53 may deviate from these statements if conditions change in the future.

TOPCON REPORT 2023 04

Introduction

Societal issues

around

the world

If eye disease is found earlier,

people might not go blind.

If food production is more stable,

people might not suffer from hunger.

If there are safer bridges, families might be

able to attend hospitals and schools.

At least  2.2 billion people have a vision impairment globally.

Over 800 million people are affected by hunger globally.

Globally, almost 1 billion people don't have safe access to health care or education.

Let's focus on what is happening in the world.

Look around and imagine someone in trouble.

05 TOPCON REPORT 2023

This is the future

Topcon

is aiming for

Introduction

A world where everyone can live a comfortable life with healthy eyes.

A world where everyone can benefit from

robust and stable food production.

A world where everyone can live safely in an environment with good infrastructure.

Look at what's going on in the world and

imagine everyone happy.

We can make that happen with our innovation

and technology.

Topcon has that in mind.

H e a l t h c a r e

A g r i c u l t u r e

I n f r a s t r u c t u r e

Topcon's Path Forward Topcon's Value Creation

Sustainability

Governance

Information

TOPCON REPORT 2023 06

Introduction

Topcon's digital transformation

That's why Topcon continues to solve societal challenges in healthcare, agriculture, people around the world live better lives.

Societal challenges

DX solution

Creating a system for eye disease screening

H e a l t h c a r e

Increase in eye disease resulting from global population aging

Global shortage of ophthalmologists

Contribute to the early detection/early treatment of eye diseases and improvement of medical efficiency by making fundus photography available

in settings that people frequent, such a general practitioners and optical stores, thereby utilizing cloud-type IoT platforms to enable remote diagnosis by specialist physicians and AI diagnosis.

Remote Diagnosis

地域医療連携

AI Diagnosis

遠 隔 診断

Referral Network

A I 診断

Optical Store

介Nursing護施設

Home

Drug Store

General

かかりつけ医

Practitioner

Preventive (Screening)

Diagnosis Treatment

Prognostic (Follow-up)

Screening examination becomes available at the places other than ophthalmology

Automation of farm operations

A g r i c u l t u r e

Food shortages resulting from

global population growth

Decreases in crop production and damage caused by global warming and extreme weather events

Unified management of all data of the agricultural management cycle (planning, seeding, growing and harvesting). Through performing agricultural tasks combining auto-steering systems and growth sensors based on those data, Topcon will contribute

to the improvement of productivity and quality of agriculture.

Planning

Seeding

Growing

Harvesting

Auto steering and unif ication of data management

I n f r a s t r u c t u r e

Shortage of skilled engineers resulting

from globally rising infrastructure

demands

Intensifying and frequent disasters associated with climate change

Automation of the Construction Process

We are identifying work
progress, operation status
of construction machinery
and material control
on a real-time basis by
connecting data from the IT
construction system and 3D
measurement devices to the
office. Unifying management
of the construction workflow
of measurement, design,
construction and inspection	Survey	Design	Construction	Inspection
contributes to improving

productivity and resolving	Unif ication of construction work flow
labor shortages.

07 TOPCON REPORT 2023

and infrastructure with our leading-edge digital transformation solutions to help

Case Study Report of Issue Solving

Introduction

Aboriginal medical staff performing examination using a full-auto medical device

Mobile examination Vision Van

Route of the Vision Van crossing the vast land of Western Australia

Fertilizer distributor mounted with laser-type sensors and auto-steering system

Laser-type growth sensor

Visualizing by color-coding the level of crop growth on the map

Australia

Contributing to the prevention of blindness among the Aboriginal people;supporting remote eye care

The rate of blindness among Australia's Aboriginal people is about three times that of non- indigenous people. Of these cases, it is said that 90% could have been prevented*.

Topcon, assenting to an NGO that offer remote diagnosis services in Wester Australia to promote the early detection/early treatment of eye diseases and prevent blindness, provided fully-automatic medical devices and remote care platforms. By installing Topcon devices on the NGO's mobile vision van to support remote check-ups and having expert ophthalmologists perform remote diagnosis by reviewing data via the cloud, Topcon supported real-time remote eye care in remote indigenous communities. By supporting the remote medical system using Topcon's systems, we are contributing to the early detection/early treatment of serious eye diseases such as diabetic retinopathy.

*The Fred Hollows Foundation https://www.hollows.org/au/what-we-do/indigenous-australia/aboriginal-and-torres-strait-islander-eye-health

Ireland

Contributing to "green" agriculture in harmony with the environment "Visualize" the level of growth to increase potato production

With the aim of environmentally friendly and sustainable agriculture, a large-scale potato farm in Ireland was searching for a method of farming that could reduce chemicals such as pesticides while maintaining productivity. They used Topcon's laser-type growth sensors to research the correlation of changes in soil caused by the amount of fertilizers and pesticides and the growth level of potatoes, and succeeded in eliminating excessive use of chemicals. In addition, their crop yield increased in areas that were considered to be difficult soil by enabling the optimization of fertilizer use. They also contributed to the reduction of CO2 by using Topcon's auto-steering system. With our systems, Topcon will contribute to a "green agriculture" that enables improved productivity and reduced environmental burden.

Topcon's Path Forward Topcon's Value Creation

Sustainability

Rwanda

Contributing to creating access to healthcare, education and employment by building bridges for communities that risk isolation

To improve the lives of people in areas where access to healthcare, education and employment is insufficient due to a lack of bridges, Topcon has provided measurement devices and software to a U.S.-based NPO with the aim of "eradicating poverty caused by isolation by connecting communities with bridges worldwide." By sharing on-site measurement data with the engineering team in a remote location, the construction process can be made more efficient, productivity and quality can be improved, and bridge construction in emerging countries can be supported. Topcon will continue to support this project and

contribute to the bridging of communities.

Completed Pedestrian bridge	3D measurement equipment
	provided by Topcon

Governance

Information

TOPCON REPORT 2023 08

Introduction

Topcon's Overview

Main Products and Solutions

Topcon's proprietary technlogies which realize to enhance the I n f r a s t r u c t u r e automation of construction process

IT Construction

3D Measurement Equipment

Real-time Construction Management System

	Topcon's proprietary technlogies which realize to enhance the
A g r i c u l t u r e	automation of farm operations
Auto Steering System for Agricultural Machines	Laser-type Crop Sensor	Agriculture Management System

	Topcon's proprietary technlogies which realize to create a system
H e a l t h c a r e	for eye screening
Fully Automatic Screening Equipment	Tele-optometry System	Data Management System

09 TOPCON REPORT 2023