Toppan : A3-size Integrated Report 2023

D I G I T A L & S U S T A I N A B L E T R A N S F O R M A T I O N

Contents

About the Toppan Group

Transition to Holding Company Structure / TOPPAN's Purpose & Values	2
Consolidated Financial and Non-Financial Highlights	4
Segment Highlights	6
Business Domains and Products and Services	8
History of Creating Value	10
Printing Technologies That Produce Diverse Solutions	12
Value Creation Process	14

Strategy and Initiatives for Creating Value

Interview with the President	16
Message from the CFO	22
Overview of New Medium Term Plan (Result Delivery Phase)	24
Special Feature:	30
Growth Strategies by Business in the New Medium Term Plan

Foundation for Value Creation (ESG Information)

Message from an External Director	48
Directors and Audit & Supervisory Board Members	50
Skill Matrix of Directors and Audit & Supervisory Board Members	52
Corporate Governance	54
Sustainability Management	66
Environmental Conservation	70
Conservation of the Global Environment
Climate Change and the TCFD
Social Initiatives	75
Diversity and Inclusion
Human Rights
Health and Safety / Work-Life Balance
Supply Chain Management
Company & Stock Information	82

Editorial Policy

This Integrated Report was prepared to reflect the opinions of institutional investors and other stakeholders voiced in discussions, and to report comprehensively on the Company's activities and growth strategies, including not only financial information but also ESG (Environmental, Social, and Governance) and other non-financial information. We hope that it will help readers to understand how the Company aims to solve social issues through corporate activities.

For more detailed information on the Company's financial position, please see the securities report (Japanese only).

Note: Names of products and services etc., in this report are trademarks or registered trademarks of the Company, the Group, or each company.

Scope and Boundary

Period covered: April 1, 2022 to March 31, 2023

(Also includes information about certain activities outside of this period)

Entities covered: Toppan Inc. and consolidated subsidiaries

(Also includes information about certain activities of Toppan Inc. on a non-consolidated basis)

Forward-Looking Statements

This report includes certain forward-looking statements. These statements are based

on management's current expectations and are subject to change in certain circumstances. Actual results may differ due to changes in economic, business, competitive, technological, regulatory, and other factors.

Information Disclosure on the Company's Website

Toppan also provides information for investors and information on sustainability on its website. Please utilize this report in conjunction with the website.

Investors

https://www.holdings.toppan.com/en/ir/

Sustainability

https://www.holdings.toppan.com/en/sustainability/

Toppan Integrated Report 2023

1

TOPPAN's Purpose & Values

Transition to holding company structure

October 2023

TOPPAN transitioned to a holding company system.

Under TOPPAN Holdings Inc., the holding company, we established TOPPAN Inc., TOPPAN Edge Inc., and TOPPAN Digital Inc.

We will strive to strengthen Group governance, further advance business portfolio transformation on a Groupwide basis, and maximize synergies. In this way, we will aim to create new value and realize a sustainable society.

TOPPAN Holdings Inc.

TOPPAN Inc.	TOPPAN Edge Inc.	TOPPAN Digital Inc.	TOPPAN Group
operating companies

Purpose

Breathing life into culture, with technology and heart.

The TOPPAN Group has newly formulated TOPPAN's Purpose & Values. This Group philosophy comprises our Purpose and the Values that support it.

Going forward, TOPPAN's Purpose & Values will be a shared guide for the Group as we work together to exceed the expectations of society and realize further innovation. Together with stakeholders, we will aim for the realization of a sustainable society and increases in corporate value.

Values

Integrity

Act with sincerity,

build relationships on trust

Passion

Be enthusiastic,

boldly take on challenges

Proactivity

Think ahead,

act with speed

Creativity

Be imaginative, create new value

2	Toppan Integrated Report 2023	3

About the Toppan Group

Consolidated Financial and Non-Financial Highlights

Toppan Inc. and Subsidiaries

Operating Results (Fiscal Year Ended March 31, 2023)

Financial Position (March 31, 2023)

Net sales

Operating profit

Total assets

Net assets

¥1,638.8billion

¥76.6billion

Down

¥2,238.8billion

¥1,452.1billion

Year on year Up 5.5%

Year on year Up 4.3%

Year on year

Year on year Up 1.0%

2.1%

Major factors decreasing total assets included a decline of ¥131.9 billion in investment securities.

Major factors decreasing liabilities included declines of ¥41.1 billion in deferred tax liabilities, ¥40.0 billion in current portion of bonds payable, and ¥16.6 billion in income taxes payable.

Major factors increasing net assets included increases of ¥55.8 billion in non-controlling interests and ¥46.8 billion in retained earnings.

Net sales

(billion ¥)				1,547.5	1,638.8
1,600	1,464.8	1,486.0	1,466.9
1,200
800
400
0	2019	2020	2021	2022	2023

Operating profit & operating profit to net sales

(billion ¥)						（%）
80				73.5	76.6	8.0
		66.4
		58.8
60					6.0
	45.7	4.5	4.0	4.7	4.7
40					4.0
3.1
20						2.0
0	2019	2020	2021	2022	2023	0

Operating profit

Operating profit to net sales (right scale)

Total assets & return on assets

(billion ¥)						（%）
3,000				5.3		6.0
	2,194.2	2,143.5	2,363.5	2,288.2	2,238.8
2,000		4.0	3.6			4.0
1,000	1.9				2.7	2.0
0	2019	2020	2021	2022	2023	0

Total assets

Return on assets (right scale)

Net assets & return on equity

(billion ¥)			1,453.2	1,437.2	1,452.1	（%）
1,500			10.0
	1,328.9	1,310.2		9.2
1,200		7.4	6.5			8.0
900					4.5	6.0
600	3.6					4.0
300						2.0
0	2019	2020	2021	2022	2023	0

Net assets

Return on equity (right scale)

Cash dividends per share (DPS)		Earnings per share (basic)
Year on year Up ¥2.0	¥46.00 Year on year Down 50.6%	¥185.07

The end-of-term dividend was ¥24.00 per share.

Including an interim dividend of ¥22.00 per share, total annual dividends were ¥46.00 per share.

Return on assets (ROA)		Return on equity (ROE)
2.7%	4.5%
Year on	Down 2.6	Year on	Down 4.7
year	points	year	points
Debt-equity ratio			Interest coverage ratio

Equity ratio

Year on Down 0.5	59.2%
year points

Cash and cash equivalents at end of period

year	points	18.0%	year	points	24.8	year	Up 8.0% ¥447.6billion
Year on Down 1.2		Year on	Up 8.7		Year on

Cash dividends per share (DPS)

(¥)

90
60		60.0
	40.0		40.0	44.0	46.0
30
0	2019	2020	2021	2022	2023

Earnings per share (basic)

(¥)

400	365.21
300	261.06
200	237.16

185.07

100 127.55

0	2019	2020	2021	2022	2023

ESG Data

External directors on Board of

Female management and

Employment of persons with

Directors

supervisory staff

disabilities

(As of July 2023)

(As of April 2023)

(As of June 2023)

3 of 9

33.3%

Year on

Up 89

761

Year on

Up 17

357

year

year

Consolidated number of

GHG emissions (Scope 1+2)

GHG emissions (Scope 3)

employees

(As of March 31, 2023)

(As of March 31, 2023)

(As of March 31, 2023)

Year on

Down 390

53,946

Year on

Down

1,115thousand t

Year on

Up 1.6 5,929thousand tons

year

year

6.1%

year

4

Toppan Integrated Report 2023

Toppan Integrated Report 2023

5

Segment Highlights

About the Toppan Group

	* The breakdown for each segment is based on the segment components for the
Review of Operations by Business Segment	fiscal year ended March 31, 2023.

Information & Communication

FY2023.3

Living & Industry

FY2023.3

Electronics

FY2023.3

Information & Communication

Net sales
Down	¥887.5 billion
1.8%
Operating profit
Down	¥42.8 billion
16.3%

Net sales
Up	¥520.6 billion
17.2%
Operating profit
Down	¥23.5 billion
17.6%

Net sales
Up	¥255.3 billion
15.3%
Operating profit
Up	¥48.2 billion
60.6%

The Information & Communication segment recorded a 1.8% year-on-year decrease in net sales, to ¥887.5 billion, and operating profit was down 16.3% year-on-year, to ¥42.8 billion.

Security

In the security business, results improved year-on-year, mainly due to growth in smart cards, despite a decline in business forms accompanying the digitization of forms.

Content & Marketing

In the content and marketing business, results improved year-on-year. Declines in paper media and sales promotion materials were offset by growth in game/trading cards, e-book related services provided by BookLive Co., Ltd., and online advertising and other digital marketing solutions.

Business Process Outsourcing (BPO)

In the BPO business, the Group

sought to expand sales of a hybrid-BPO service combining digital technologies with operations. Nonetheless, sales declined after the Group posted sales from large projects in the previous fiscal year.

DX (Erhoeht-XTM) Initiative

As part of the Erhoeht-XTM DX initiative, with a view to strengthening the oper ational structure for digital marketing, the Group established the Sapporo Engagement Center and formed a capital and business alliance with FUSION Co., Ltd., which has extensive know-how in the CRM domain. Moreover, the Group helps businesses and other organizations improve their operational efficiency through initiatives such as enhancing the functions of EngagePlus, a message delivery service provided by Toppan Forms Co., Ltd. (now TOPPAN Edge Inc.).

Sales to external customers & operating profit by segment

Living & Industry

Information & Communication

Living & Industry

(billion ¥)				(billion ¥)	(billion ¥)				512.6	(billion ¥)
1,000		890.8	871.5	100	500		436.1		50
	865.7			418.1
800				80	400				40
600	51.1	51.2		60	300	27.6		28.5		30
	42.8					23.5
								20
400				40	200
200				20	100					10
0	2021	2022	2023	0	0	2021		2022	2023	0
Sales to external customers			Sales to external customers
Operating profit (right scale)			Operating profit (right	scale)

Electronics
(billion ¥)		48.2	(billion ¥)
500			50
400				40
300		30.0		30
		254.6
		220.5
200	183.0		20
100	11.9			10
0	2021	2022	2023	0

Sales to external customers

Operating profit (right scale)

The Living & Industry segment posted a 17.2% year-on-year increase in net sales, to ¥520.6 billion, and operating profit was down 17.6% year-on-year, to ¥23.5 billion.

Packaging

In the packaging business in Japan, results rose year-on-year due to an increase in demand, particularly for food packaging, and the expansion of sustainable packaging materials. Overseas sales increased, particularly in Indonesia, and contributions to sales were made by InterFlex, a US-based flexible packaging producer that the Company acquired in the previous fiscal year, and by Majend Makcs, a flexible packaging producer in Thailand that the Company acquired in May. Both in Japan and overseas, price revisions were made in response to rising raw materials and energy prices.

Décor Materials

In the décor materials business, sales in Japan rose year-on-year due to growth in sales of decorative surface materials with high-quality design and

advanced functionality. Overseas, demand was weak due to rapid inflation in Europe and rising mortgage rates in North America. Nonetheless, sales were up year-on-year due to growth in sales of decorative surface materials for furniture and other interior applications, price revisions, and foreign exchange effects.

Functional Products

Sales of functional products increased with the contribution of Toppan Speciality Films (formerly Max Speciality Films), a leading Indian film manufacturer that the Company made into a consolidated subsidiary in the previous fiscal year.

SX Initiatives

In its SX initiatives, the Company used GL BARRIER transparent films with world-class barrier performance in order to advance the development of envi ronmentally friendly packaging materials, such as recyclable mono-material packaging materials and retortable pouches made of paper, which contribute to reducing plastic consumption and CO2 emissions.

Capital investment by segment

Capital investment

Electronics

Electronics

  28.9%

	Adjustment		Information &
11.8%		Communication
28.7%

FY2023.3

¥92.1billion

(billion ¥)
100			92.1
80			10.9
60	60.9	58.2	26.6
6.1	6.7
40	13.9	9.5	28.2
16.3	18.0
20		24.0	26.4
	24.5
0	2021	2022	2023

The Electronics segment recorded a year-on-year increase of 15.3% in net sales, to ¥255.3 billion, and operating profit was up 60.6% year-on-year, to ¥48.2 billion.

Semiconductors

In the semiconductor business, sales of photomasks rose due to firm demand for semiconductors used for 5G, AI, and automobiles. In the business for FC-BGA substrates, which are high-density semiconductor package substrates, high-value-added large and multilayer products sold well, particularly for data centers and servers, due to their industry-leading quality and technology.

Displays

Sales of display-related products declined year-on-year, reflecting a fall in sales of anti-reflection films due to a decline in film demand for televisions

New Business

With a view to creating new business, the Company implemented initiatives in preparation for the widespread adoption of IoT devices. These included developing e-PlatchTM, a system that takes advantage of the next-generationlow-powerwide-area (LPWA) ZETA protocol to improve the efficiency of the remote monitoring of environmental data and equipment maintenance operations at manufacturing plants and facilities, and achieving internationally recognized ISO/IEC 27017 cloud security certification. In addition, the Company was also the first in the world to develop a next-generation time- of-flight sensor capable of measuring distances of up to 30 meters, in anticipation of the widespread use of autonomous mobile robots in industry.

Living & Industry

  30.6%

Information & Communication Living & Industry

Electronics

Adjustment

and a decrease in sales of color filters due to the implementation of structural reforms.

6	Toppan Integrated Report 2023	Toppan Integrated Report 2023	7

About the Toppan Group

Business Domains and Products and Services

Toppan operates in three business domains: Information & Communication, Living & Industry, and Electronics. Drawing on its strengths in original printing technologies, Toppan pursues each of these businesses, providing comprehensive solutions to challenges faced by customers and society.

Information & Communication	* The breakdown for each segment is based on the segment components for the
fiscal year ended March 31, 2023.

Providing customers who require smooth communication with solutions that enhance the value of information and deliver it effectively

Security

Securities documents

Business forms

Data printing services (DPS)

Smart cards, various types of other cards, and in-store instant smart card issuing services

Gift card ASP services

RFID tags and RFID solutions

Anti-counterfeit devices Payment services

Content & Marketing

Books, magazines, and supplements

Textbooks

E-books

Flyers, catalogs, and pamphlets

Promotional tools (POP materials, various gift items, premiums)

Spatial design, event planning and implementation

Digital content

Digital marketing services

BPO

Back-office operation services

Customer contact operations (campaign offices, direct mail, contact centers, etc.)

Operation support

Living & Industry

Providing a wide range of products and services throughout the world to create living environments that offer comfort and peace of mind

Packaging

Flexible packaging

Folding cartons

Composite liquid containers

Plastic molded goods

Contract-based filling services

Décor Materials

Decorative sheets

Flooring materials

Decorative panels

Exterior products and materials

Flame retardant products and materials

Functional Products & Energy

Transparent barrier film

Media and supplies for printers

Electronics packaging materials

Lithium-ionbattery-related materials

Precision processed and exterior decorated components

Electronics

Providing display-related and semiconductor-related products based on microfabrication technology

Semiconductors

Photomasks

LSI design services

FC-BGA substrates

Lead frames

Etched products

On-chip color filter arrays

Displays

Color filters

Anti-reflection films

Small and medium-sizedTFT-LCD panels

Metal masks for OLEDs

Copper touch sensors

Light control film

8

Toppan Integrated Report 2023

Toppan Integrated Report 2023

9

History of Creating Value

Toppan was founded in 1900 with a view to taking advantage of the Erhöht relief printing method, a leading-edge technology of the day. Since then, the Toppan Group has continually addressed society's needs and developed its business operations by extending the applications of printing into a broad range of fields. Going forward, Toppan will continue rapidly identifying changes in society's needs, and we will aim to achieve sustained growth as a creator of social value in order to help resolve those needs around the world.

About the Toppan Group

2020

Advancing the DX Business

1900	1950
Printing-related trends and demand
Printing products becoming important means of	Circulations and mass
relaying various information	production increasing

Toppan's History

Production efficiency increasing through IT Catering to need for diversified, small-lot manufacturing

2000

Increasing demand for various printing products

2015	2016
	Began full-scale operations at
	BPO Square Asaka			Becoming
Decreasing demand for paper media	2019		Expanding DX services
Advancing digital transformation	Commenced provision of
NAVINECT® digital transfor-
	mation support solutions for	2021
	manufacturing
		Commenced provision of
	多彩なIoTソリューションをつなぎ、付加価値の最大化へと導きます。
	見える化	製造情報管理	Hybrid-BPO™ for local
	製造監視	ヒト作業効率化

Business establishment / printing expansion

While Japan was in the process of industrial- izing, a number of companies that used new technologies to address new needs were established. Building on the Erhöht relief printing method, which was a leading-edge technology at the time, Toppan's founders identified business opportunities in such fields as securities printing and package printing.

Founded 1900

Toppan Printing Limited

Partnership launched

Erhöht relief printing copperplate

1900

Folding cartons

1901

Commercial printing

1902

Securities printing

1907

Publication printing

1938

Flexible packaging

Diversifying, growing into

an integrated printing company

			1986
			Completion of Toppan
			Technical Research Institute
	Information & Communication
1955	1970
		Business forms	Computerized typesetting
			system developed and
			implemented
		Planning and design
		division launched
			1983
1961
IC chip card developed
		Service Center established
		(now the Toppan Idea
		Center)
	Living & Industry
1956	1976
		Décor materials	EP-PAK multilayer lami-
			nate paper container for
			liquids developed

1986

GL FILM transparent barrier film developed

Electronics

Advanced into	1959
Masks for mesa transistor
electronics business	manufacturing developed

Sustainability

Use of the internet, expansion of digital content business

1999

Started Bitway digital content distribution business

Environmentally friendly

products developed

1996

Started sales of Cartocan® paper beverage containers

1971

Color stripe filter for image pick-up tubes developed

1991	1992
Ecology Center	Toppan Printing Declaration
established	on the Global Environment
	established

					装置自動化	帳票	authorities
Expanding the digital business			デジタル管理
		品質保証	在庫管理
		（QR/RFID)	2021
					輸送ナビゲーション	トレーサビリティ
2000					2020		Acquired Face Technologies (Pty)
					Ltd., a systems integrator based	a
Formulated TOPPAN VISION 21			Established the DX Design	in South Africa
		Division
										Social
							2022
2001		2011		Accelerating global	Developed MiraVerse®, a meta-
		development		verse service platform
Digital advertising		Integrated e-bookstore
flyer website Shufoo!		BookLive! opened			2016		2023
launched						Established TOPPAN Edge Inc.,
					Completed construction of	TOPPAN Digital Inc.
					the Toppan USA Georgia
									-
					Plant, a production base for
		2013				DX		Value
				transparent barrier films
		Toppan Group Data
		Center launched			2017
					Strengthened flexible
					packaging			Creating new
					business in ASEAN region
						businesses		-
									Creating
					2019
					Acquired Interprint GmbH,
					a European décor printing		SX
					company
Strengthened functional films
and packaging business					Expanding global supply
2009		2014					network for mono-materials
Completed construction	Completed construction of
of the Fukaya Plant, a		the Gunma Central Plant, a				2021				Corporate
production base for next-	production base for flexible	Creating new markets	Acquired InterFlex Group,
generation functional films packaging materials		a U.S.-based packaging
				and businesses
				manufacturer
					2019		2022
						Made Max Speciality Films
					Developed mono-material
					barrier packaging	Limited, an India-based
							film manufacturer, a consoli-
							dated subsidiary
2004		2005					2023
Commenced		Toppan Photomasks, Inc.
manufacture of		established					In the Czech Republic,	Group
large color filters					2019		established­	a transparent barrier
						film production base scheduled
					Started mass production of
					LPWA ZETA communica-	to start operation at the end of
					tions modules		2024
2006	2009	2015		2019	2019	2021	2021		2022
Joined the United	The Toppan Group	Health Manage­	Announced	Formulated	Formulated Toppan	Formulated the	Formulated the Toppan
Nations Global	Declaration on the Global	ment Declaration	support for the	TOPPAN SDGs	Group Environmental	Toppan Group	Group Sustainable
Compact	Environment established	established		TCFD	STATEMENT	Vision 2050	Human Rights Policy	Procurement Guidelines

10 Toppan Integrated Report 2023

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11

About the Toppan Group

Printing Technologies That Produce Diverse Solutions

During our long history, printing skills-our starting point-became printing techniques. By further evolving these techniques through integration with diverse expertise and processing technologies, we have made printing technologies a proprietary resource.

• Each of our five core technologies, information processing, microfabrication, surface treatment, material forming,and marketing solutions,has its own unique characteristics. Moreover, when they are combined in a multi-faceted manner they also have the power to produce diverse solutions.

On a foundation of printing technologies, Toppan will continue to address client perspectives (market needs) and social perspectives (social issues). We will strive to create new forward-looking solutions while taking steps to strengthen our technologies, such as engaging in co-creation initiatives with other companies and leveraging Group synergies.

Co-creation with businesses / New technologies

(Open innovation with universities and businesses and capital tie-ups with venture companies)

Printing Technologies

Diverse solutions made possible by

printing technologies

Toward the provision

of new solutions

Marketing

IT

Creative Design

Toppan's

Foundation

Printing				Printing			Integration
Skills				Techniques			& Evolution

Processing

Technologies

Five Core Technologies

Marketing Solutions

Research and analysis capabilities / Strategy preparation and coordination capabilities / Product and service development capabilities / Creative capabilities (graphics, video, spaces, CG) / IT utilization capabilities (design, development, operational support) / Back office coordination capabilities / Comprehensive solutions capabilities

Information Processing

Computerized typesetting / Color management technologies / Digital content technologies / High-definition image digitization technologies / Expression technologies / Information security technologies / System construction and operation technologies / Data management technologies / Communication network technologies

Microfabrication

Etching technologies / Photolithography technologies / Plating technologies / Photopolymer technologies / Optical design technologies / Testing and correction technologies /

Clean production environment technologies

Surface Treatment

Precision coating technologies / Lamination technologies / Drying technologies / Material design and evaluation technologies

• Coating technologies / Composite material and multilayer technologies / Vacuum deposition technologies

Material Forming

Surface decoration technologies / Vacuum deposition technologies / Resin molding technologies / Thin-film formation technologies / Structural design technologies / Filling and packaging technologies / Environmental technologies

Posters

Securities

Sugar processing filters

Cigarette packaging

Paper boxes

In-store advertising Marketing

Digital flyer services Clinical art

Books/magazines

Magnetic/smart card manufacturing

Catalogs

VR/AR/MR

Photomasks Color filters

Metal masks for OLEDs Lead frames Holograms

GL BARRIER Eco-friendly packaging Décor materials

Lithium-ion battery packaging materials

Liquid containers Plastic bottles Composite containers

Digital marketing BPO solutions Payment solutions 4K and 8K video Regional revitalization

E-books

ID/RFID management

Digital archiving of cultural treasures

Touch sensors FC-BGA substrates TFT-LCD panels

CartocanTM Information recording materials

Anti-reflection films

Plastic molded goods Refill containers SNP chips (genetic analysis)

Client perspectives (market needs) and social perspectives (social issues)

DX

Digital twins Metaverse/Avatars Information banks (VRM) Super cities/Smart cities Educational ICT Hybrid BPO

Digital Content

Marketing DX Global security Manufacturing/Distribution DX

SX

Material/chemical recycling LCA solutions Sustainable packaging Energy management Energy-related components

Healthcare

Health big data

Biotech

Medical services

Devices / Products

Anti-counterfeit devices Next-generation photomasks

Next-generation semiconductor packaging substrates

Light control films Functional sensors

Next-generation communication networks

Products that combine IoT technology with décor materials

Other

AI

Quantum computing

Becoming a Social-Value-Creating Corporate Group

Strengthening of core technologies / Maximization of Group synergies

(Materials development, device development, digital technology development, etc.)

12

Toppan Integrated Report 2023

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13

Value Creation Process

About the Toppan Group

Business Environment

Acceleration of digital shift, worldwide increase in environmental consciousness

Global market expansion, geopolitical risk

Management Capital

(Input)

As of March 31, 2023

Financial capital (consolidated)

Growth investment

Cumulative plan for FY2022.3 to FY2024.3.

Approx. ¥274.0 billion

Share capital

¥104.9 billion

Total assets

¥2,238.8 billion

Human capital (consolidated)

Number of employees

53,946

PURPOSE

Breathing life into culture, with technology and heart.

Social issue resolution

Customer network developed since our

founding

Combination

Technological

capabilities

DX

Solutions

Demonstration

Major Products, Services, Etc.

(Output)

Erhoeht-X

Hybrid-BPO

Security business

Marketing DX

Digital content

Manufacturing/Distribution DX

SX

Packaging in Japan (flexible packaging materials)

Overseas packaging Overseas décor materials

Frontier businesses

Digital & Sustainable Transformation

Becoming a leading provider of solutions to social issues

worldwide through DX and SX

Value Created/Provided

(Outcome)

Maximize enterprise value

Social value

Environment

Creating a circular economy

Decarbonizing

Preserving biodiversity

Reducing water shortages

Communities

Increasing people skilled in DX

4,000 people Groupwide

Manufacturing capital

Main manufacturing bases

Domestic: Approx. 80 bases

SX Frontier

of Group synergies

Healthcare

Metaverse

Sensors

Financial and non-financial

quantitative data

Enhancing quality of life for communities

Creating a safe society Contributing to culture

People

Overseas: Approx. 70 bases

Capital investment

¥92.1 billion

Intellectual capital

Number of patents held

	5,430
Research and development
expenditure	¥26.5 billion

Transforming the business portfolio

Creating products and

services

Living & Industry	Electronics
Planning, design,	Information &	Communication	Identifying issues
development			and needs

Results

Net sales:

¥1,638.8 billion

Operating profit:

¥76.6 billion

ROE:

4.5%

Consolidated dividend payout ratio:

24.9%

CO2 emissions:

Reducing food loss

Creating educational environments Contributing to health through digital technologies

Economic value

Financial targets

Social capital

Client base of approximately

Scope 1+2	1,115kt
Scope 3	5,929kt

Net sales:

¥1,810.0 billion

20,000 companies Strong relationships with

Materiality

Final landfill waste disposal: 7,794t

Operating profit:

¥110.0 billion

stakeholders

Natural capital

Business Materiality  Companywide Materiality

Foundation for Value Creation

Percentage of female managers:

(All Group entities consolidated for accounting purposes,

ROE:

5.0%

Total energy consumption

20.885 TJ

Human assets  Technologies  Sustainability management  Corporate governance

including overseas)

12.2%

Engagement score:

70.6

Total payout ratio:

30%

Total material input

1,742 thousand tons

Values

Integrity  Passion  Proactivity  Creativity

points

(During period of new Medium Term Plan: approximately 50%) (Fiscal year ending March 31, 2026)

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Interview with the President

We will pass on the DNA that has

Strategy and Initiatives for Creating Value

1. What is your view of the Group's results in the fiscal year ended March 31, 2023, which was the final year of the previous medium-term plan?

The economic environment included rising prices for raw materials and fuel, and inflation A around the world. In this setting, we were able to bolster our foundation with a focus on

the future while recording growth in net sales and operating profit.

existed since our founding to the new TOPPAN and work to increase the presence of the Group in Japan and around the world.

In addition to the lengthening of the Ukraine situation and rising prices for raw materials and fuel, we continued to face an uncertain outlook, including global inflation. I think that we turned in a solid performance in this environment by achieving higher sales and profits, with gains in both net sales and operating profit.

In the Information & Communication segment, we have nurtured BPO as one of our business pillars. In BPO, certain special factors that existed up until the previous fiscal year, such as economic stimulus packages, have ended. However, we are advancing a shift toward continuous BPO projects that are not temporary. In addition, we have launched new businesses, such as metaverse initiatives based on our track record of a quarter century with TOPPAN VR, and they have already started to make a contribution to earnings.

In the Living & Industry segment, packaging was affected by higher costs for raw materials, and we could not avoid a decline in profits. On the other hand, in front-line sales we were resolute in price negotiations, and as a result the rate of price pass-through reached nearly 90% by the end of the fiscal year. In this way, we not only completed our short-term countermeasures but also put into motion a positive cycle regarding proper pricing, which had been a pending problem for many years.

In the Electronics segment, following a series of restructuring initiatives, volatility has been minimized and we have started to develop the ability to secure profits in a manner that is less susceptible to market conditions. In the year ended March 2023, the yen depreciated, and the semiconductor business recorded favorable results. This segment is making a significant contribution to Companywide profits. In particular, growth in FC-BGA substrates will be an important part of the reinforcement of our foundation as we focus on the adoption of next-generation communications and growth in demand for high-speed servers.

Through these types of initiatives, the probability of realizing our plan has increased, and in recent years operating profit has been steady at about ¥70.0 billion. In addition, we are recording steady growth in both net sales and operating profit. For example, in the fiscal year ended March 31, 2022, we achieved, one year ahead of schedule, the management targets in the previous medium-term plan (foundation building phase). In addition to this result, under the new medium-term plan that started in April 2023 (result delivery phase; hereinaf- ter, the current medium-term plan), we will strengthen our technological advantages through further growth investment and work to link this to the delivery of specific results.

1. Under the new medium-term plan, what types of initiatives will the Company implement for business portfolio transformation?

We will work to significantly raise profitability, centered on two strategies.

A We will strive to increase profitability in DX and SX through combinations of internal resources, and we will expand the scale of new businesses (the frontier).

Hideharu Maro

Representative Director

President & CEO

Business Portfolio Transformation

Electronics		Erhoeht-X
Priority	15%
13%
	businesses Growth	SX in
Living &	6% businesses	Japan /
Industry	27%	Overseas
18%	Operating	Living &
	profit	Industry
	¥58.7 billion	12%
	Existing
Information &	businesses
67%
Communication
42%
	FY2020

Looking at business portfolio transformation initiatives under the previous medium-term plan, in addition to the restructuring of existing businesses, we also reinforced and reorganized management resources. For example, in March 2022 we made listed subsidiary Toppan Forms a wholly owned subsidiary.

In comparison with the fiscal year ended March 31, 2021, in

Electronics		Erhoeht-X
Priority	12%
43%	SX in
	businesses Growth		Japan /
	13% businesses
		Overseas
	19%
		Living &
	Operating
		Industry
	profit		7%
	¥76.6 billion
	Existing		Information &
	businesses		Communication
	68%		25%
Living &			* Percentages in pie charts are calculated
Industry
FY2022		using operating profit before deduction of
13%
	adjustments as the denominator.

the fiscal year ended March 31, 2023, the overall scale of operating profit increased. However, looking at the composition of operating profit, there was a decline in the share of growth businesses, such as DX (Erhoeht-X), domestic SX, and overseas Living & Industry. This was attributable to clear fac- tors, such as upfront investment to bolster the DX foundation,

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