Toppan : A4-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 & V

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.

2 Toppan Integrated Report 2023

Values

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

3

Consolidated Financial and Non-Financi

Toppan Inc. and Subsidiaries

Operating Results (Fiscal Year Ended March 31, 2023)

Net sales				Operating profit
	¥1,638.8billion		¥76.6billion
Year on year Up 5.5%	Year on year Up 4.3%

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)

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.

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

4 Toppan Integrated Report 2023

(As of July 2023)

33.3%

About the Toppan Group

al Highlights

Financial Position (March 31, 2023)

Total assetsNet assets

	Down	¥2,238.8billion	¥1,452.1billion
Year on year	2.1%		Year on year Up 1.0%

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.

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)

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

ESG Data

External directors on Board of Directors

3 of 9

Female management and	Employment of persons with
supervisory staff		disabilities
(As of April 2023)		(As of June 2023)
year		761	year			357
Year on	Up 89		Year on	Up 17

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	Down 390	53,946	year	6.1%	1,115thousand t	year	Up 1.6 5,929thousand tons
Year on				Year on	Down			Year on

Toppan Integrated Report 2023

5

Segment Highlights

Information & Communication

	FY2023.3
Net sales	¥887.5 billion
1.8%
Down
Operating profit
Down	¥42.8 billion
16.3%

	Living & Industry
	FY2023.3
Net sales
Up	¥520.6 billion
17.2%
Operating profit
Down	¥23.5 billion
17.6%

	Electronics
	FY2023.3
Net sales
Up	¥255.3 billion
15.3%
Operating profit
Up	¥48.2 billion
60.6%

Sales to external customers & operating profit by segment

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)

Capital investment by segment

Capital investment

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

Living & Industry

  30.6%

Information & Communication Living & Industry

Electronics

Adjustment

6 Toppan Integrated Report 2023

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

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.).

Living & Industry

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.

Electronics

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

of structural reforms.

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.

Toppan Integrated Report 2023	7

Business Domains and Products and Se

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

8 Toppan Integrated Report 2023