Maruho Report 2023

Corporate Profile (As of September 2023)
Company nameMaruho Co., Ltd.

FoundedJuly 1915

Incorporated

October 1949

Capital382.53 million yen (unlisted)

Fiscal year

Ends September

Number of
employees

2,241 (Consolidated*1) /1,566 (Non-consolidated*2)*1 The number of employees (excluding those assigned outsideof the Group, including those assigned within the Group),
excluding part-time staff and temporary employees*2 The number of employees (excluding those assigned fromoutside the Company), excluding part-time staff andtemporary employees

Accounting auditor

Our Websites
Information on Maruho’s businessactivities and various initiatives isprovided for our wide range ofstakeholders.
Corporate website
https://www.maruho.co.jp/english/

Website for medical
professionals (Japanese)
https://www.maruho.co.jp/medical/

Deloitte Touche Tohmatsu LLC
Website for patients andgeneral customers (Japanese)

Status of shares (As of September 2023)
Number of
authorized shares

https://www.maruho.co.jp/kanja/

20,000,000 shares

Number of
7,650,720 shares
outstanding shares
Number ofshareholders

18

Major shareholders Maruho Group employee
shareholding association(2,309 thousand shares / 30.18%)
Maruho Takagi Dermatology Foundation(2,296 thousand shares / 30.01%)
Maruho Group directors and corporate officers
shareholding association(1,439 thousand shares / 18.81%)

Maruho Report

Head Office
1-5-22 Nakatsu, Kita-ku, Osaka, Japan
TEL: +81-6-6371-8876

Published March 2024

2023

Contents

1. Maruho’s Meaning of Existence Corporate Philosophy and Meaning of Existence

Editorial policy

1. Maruho’s Meaning of
Existence

3. Strategy for
Value Creation

5. Financial/Company
Information

Corporate Philosophy andMeaning of Existence .....................1
Dermatology and Our Business .......3
History and Strengths .....................5
Main Topics in the Fiscal Year
Ended September 2023 ..................9R&D and Business Development ...23
Production and Reliability Assurance..................................................25
Sales, Marketing, and Medical ......27
Business activities outside ofprescription drugs ........................29
Special Feature
Achieving Maruho’s vision
for the future ...............................30

Financial/Non-financial Highlights..................................................43
11-year financial summary ............45
Financial Statements .....................47
Business Performance andFinancial Analysis ..........................51
Maruho Hatsujyo Kogyo Co., Ltd.
..................................................55
Major Maruho Group Companies ...57

2. Value Creation Prospects
Message from the President & CEO..................................................11
Our Approach to Value Creation ...17
Special Feature
Expectations for Maruho ..............19
Overview ofthe Medium-Term Plan .................21

4. Foundation for
Sustainable GrowthSocial ...........................................33
Environment .................................37
Governance ..................................39
Board of Directors, Auditors,
and Corporate Officers .................41

Publication of Maruho Report 2023

Maruho Report 2023 is published by
Maruho Co., Ltd. (hereinafter, “Maruho”) toreport its activities. The objective of thisreport is to provide its stakeholders withdetails of the activities conducted by
Maruho, as well as its growth strategies,
financial and non-financial information,business overview, and contributions tosociety, and to make them understood.
This report was prepared throughcross-departmental cooperation among the
Corporate Planning Dept. and otherdepartments.

Report period

From October 1, 2022 to September 30, 2023
This report includes some activities notconducted during this period.

More smiles, brighter life for you.
—Continuing to bring smiles topeople through our contributions
to society and sustainable growth
Maruho’s history began with its founder’s long-cherished desire to“Contribute to society through medicine.”
This desire has been passed down for more than a century, enabling
Maruho to remain a pharmaceutical company that brings smiles topeople through its value proposition in the field of dermatology.

“Mommy,you look so happy”

Corporate Philosophy

MissionMaruho is always searching for what brings your personal happiness.
By listening to you and appreciating every moment of life,
we will seek the truth that makes you smile.

Values

These five Values are the standards of behavior
that each one of us should uphold in order to realize our Mission.

1

Maruho Report 2023

I can wear
my favorite outfits!

I enjoy talking
with friends

Maruho Report 2023

2

1. Maruho’s Meaning of Existence Dermatology and Our Business

Addressing needs
across the entire value chain
The various symptoms caused by skin diseases have a significant
impact on the quality of life of patients. We listen to all the needsof our patients every day and resolve their skin problems throughthe overall value provided by Maruho.

Production andquality management

Reliability assurance
In all of our activities, we comply with laws,
regulations, and international norms, andactively research and develop innovative
pharmaceuticals that contribute to theadvancement of medicine. We provide a stablesupply of pharmaceuticals with excellent efficacy,
safety, and quality. We also offer scientificinformation and promptly collect, evaluate,
and communicate information post sales.

We actively invest management resources instrengthening our production bases andproduction systems to provide a stable supplyof high-quality pharmaceuticals, andcontribute to improve the quality of life ofpatients with our quality control system andtop-class production capabilities of topicaldrugs in Japan.

Research anddevelopment

3

Maruho Report 2023

We are proactively working on thedevelopment of new treatments andtherapeutic drugs to address theunmet needs of patients affected byvarious skin diseases.

Information collection
and provision
We collect and provide informationon our pharmaceuticals to medical
professionals to promote their properuse, and at the same time, we
disseminate appropriate information
about diseases to patients.

Maruho Report 2023

4

1. Maruho’s Meaning of Existence History and Strengths

1915

1925

1951

1965

A vision to “Contribute tosociety through medicine”

American-style pharmacy “Maruho
Pharmacy” opened in Osaka

Working for health,
the source of “life”

Company name was changed
to Maruho Co., Ltd.

Jiro Takagi, who joined Maruho in 1950,
was entrusted by Koba to manage
Maruho. Based on his experience during
the war, Takagi seriously believed in thevalue of “life,”
pursued the public
good of companies,
endured the difficult
postwar times, andinstilled the “faith”
that has taken root in
Maruho today

1972

Maruho’s history began with acommitment to “contribute to society
through medicine” by Maruho founder
Eikuma Koba. He went to the U.S. on his
own in 1901 with the intent to modernize
Japanese medicine. He returned to Japanand in 1915 in Doshomachi, Osaka, hefounded Maruho Shouten, which is the
precursor to Maruho Co., Ltd.

1939
Maruho Shouten Co., Ltd. was established

1940
Constructed a plant for production

1943
Company was temporarily dissolved
for the war effort

1949
Maruho Shouten Co., Ltd. was refounded

Passing down a commitment tocontribute to people’s lives throughmedicine since its founding
Over more than 100 years of evolution and development since its
founding, Maruho has continued to support people’s daily lives.
We now have an established reputation, having built a topical drug
brand as well as our current business model, which is to be a leading
company in the field of dermatology.
As long as there are patients around the world that need our medicines,
we will continue to answer that call, achieving steady growth along the way.

1920
Maruho Shouten becamea joint stock company

1952
Entry into the springs businessTo continue business in the unstablepost-war environment, Maruho enteredinto the springs business as springs could
be produced domestically. Maruho Hatsujyo
Kogyo Co., Ltd. was established in 1954,
and has maintained
a close collaborative
relationship withother companies
in the Maruho
Group for morethan 70 years

Headquarters was
relocated to its current
site (Nakatsu, Kita-ku,
Osaka)

1998
Research functions were consolidated in
Kyoto Research Park (Currently: Kyoto
R&D Center Drug
Development
Laboratories, Drug
Discovery ResearchLaboratories)

Achieving steady growthin orthopedics, surgery,and dermatology

Bringing first-rate
medicines to Japan
from overseas

With products such as intravenous agent forasthma Asthmolysin, hemorrhoid treatment
ointment Posterisan Forte, transdermal multiple
anti-inflammatory ointment Mobilat, andarticular cartilage protective agent Arteparon,
Maruho has achieved steady growth inestablishing markets for high-quality drugs byproviding useful information to those inorthopedics, surgery, and dermatology.

Strategic alliances

Appropriate information provision

Since 1930

Working to reliably
provide patientswith medicines
To build a more reliable supply network,
Maruho has focused on its domestic
medicine production business. With therelease of cough syrup Co-fu Syrup in 1931
and the mosquito repellent cream Moskiton
the following year, Maruho achieved successin domestically producing foreign products
and helped improve people’s daily lives.
Maruho Report 2023

1997

Since 1950

Since 1915

Initially, Maruho worked with pharmaceuticalcompanies in Europe and the United States
to deliver high-quality medicines to Japan,
thereby supporting people’s daily lives. The
company name Maruho comes from H.K.
Mulford Co. (now Merck & Co., Inc.), a U.S.
pharmaceutical company, with which
Maruho entered into a dealership agreement

5

Hikone Plant (Shiga Prefecture)
was completed

Stable supply

Since 1990

Reaching new growthstages by leveraging
formulation technologies
Maruho added the additional indication of asteatosis
to its Hirudoid cream, relaunching the product asa skin moisturizer. As lifestyles change and theimportance of skincare grows, Hirudoid has growninto a product that continues to help many people.

Formulation technology
for topical drugs
Maruho Report 2023

6

1.Maruho’s Meaningof Existence

1999

2011

2020

Establishing a strategy
dedicated to topical drugs

Aiming to make a majordifference in dermatology

Contributing to people’s
precious everyday life

Koichi Takagi, who took over as president and
CEO in 1999, established the current businessmodel by obtaining the unique strategic
domain of topical drugs and focusing its
management resourceson research anddevelopment,
production, and sales
activities forpharmaceutical products
related to dermatology.

Separate from its existing pharmaceuticals
business, in 2011 Maruho formulated Excellencein Dermatology, a new long-term vision thatseeks to help improve quality of life for people
with respect to preventing disease
and providing follow-up support
for dermatological issues.

In 2020, Atsushi Sugita was appointed
Representative Director, President & CEOof Maruho. Based on Maruho’s history ofcontributing topeople’s health forover 100 years, we
aim to realize asociety where
everyone can livewith a smile.

2014
Tateyama Pharmaceutical Factory Co., Ltd.
(Toyama Prefecture) was established2002
In 2002, based on a decision to specialize in
two businesses—topical drugs and the field of
dermatology—Maruho declaredthat it would become a “leading
company in dermatology related
drugs” in its Long-Term Vision 2002.

2007
In recognition of our unique strategy, in 2007
Maruho received the Porter Prize, an award
given to companies with
exemplary business models.

2010
Completed the Nagahama Plant (Shiga
Prefecture)2022
Renewal of our Corporate
Philosophy

2019
Kose Maruho Pharma Co., Ltd. was established
as a joint venture with KOSÉ Corporation
Maruho Shonan Innovation Lab (MSiL) was
opened as a research center in the Shonan
Health Innovation Park (Kanagawa Prefecture)

2020
Roman Industries Co., Ltd. was acquired asa wholly-owned subsidiary and plant for
producing pharmaceutical ingredients

In October 2022, we renewed ourCorporate Philosophy as a compass toguide us confidently into the future.
“More smiles, brighter life for you.” isour Mission, and we have established fivestandards of behavior to be practiced as
Values to realize theMission, which will
become Maruho’s
new unifying anddriving force

From 2002

Currently

Establishment of topicaldrug brand andspecialization in dermatology

Addressing unmet needs
to bring more smiles tomore people

Maruho has met a wide variety of needs
through a focus on developing dermatological
medications. These include Oxarol Ointment
for treating keratosis and other conditions aswell as Farom, an oral antibiotic for treating
numerous conditions, and Penles Tape, a
localized anesthetic patch.

Through a variety of products, we continue
striving to satisfy unmet needs that only we
can satisfy. These include Rapifort Wipes, a
hyperhidrosis treatment, and Mitchga
Syringes, and injectable solution to alleviateitching from atopic dermatitis, as well as
Bepio Lotion, which was released in a newform to be easier for patients to use.

Specialization in topical drugs
and dermatology

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Maruho by the Numbers
Net sales (Consolidated)
Fiscal year ended
Fiscal year ended
September 2013
September 2023

Prescription topical drugs
Market share1No.

96,184 million yen

64,336

million yen

in Japan (37%)

Copyright © 2024 IQVIA.
In-house analysis based on IQVIA JPM 2022 Apr.–2023 Mar. (drug pricebase) / Reprinted with permission
Topical drugs: ointments, liquids, creams, lotions, gels, sprays, andtopical foam agents

Annual topical drug
production volume

Approx.

Number of new products

Phase III clinical trial
success rate*

Fiscal year ended September
2013 to 2023

* Percentage of Phase III studies (randomized,
double-blind studies) conducted between fiscal
year ended September 2013 to 2023 that havetransitioned to application for approval andacquisition(prescription drugs)

20

84.6%

Equity-to-asset ratio

R&I rating

Fiscal year ended September 2023

As of
September 2023

(Consolidated)

3,000 tons

85.8%

For a wide rangeof skin diseases

A-

Rough hands

Dry skinAtopicdermatitis(asteatosis)(progressive
palmoplantar
keratoderma)

Rosacea

Herpes zoster(shingles)

Primary axillary
hyperhidrosis

HerpessimplexImpetigo
contagiosa

Psoriasis(Acne vulgaris)

Unguium

ScabiesInfantile
hemangioma

Pressure
ulcersHemorrhoids

Pincer nails

Satisfying unmet needs

Acne

Number of Employees (Non-consolidated)

From 2011

Becoming a leading
company in dermatology
In addition to establishing a wide productlineup for a variety of skin diseases such as
atopic dermatitis, acne, psoriasis, and various
infectious diseases, we have expanded
treatment options through additional
indications and dosage forms of existingproducts, thereby contributing to improving
patients’ QOL.

7

Maruho Report 2023

Responding to a wide rangeof skin disorders

Fiscal year ended
September 2013

Fiscal year ended September 2023

1,566

1,223

Ratio of female employees
Fiscal year ended
September 2013

Fiscal year ended September 2023

36.3%

30.9%

Number of openly
recruited positions
internallyInquiries made to
the Medical
Information Center

Fiscal year ended
September 2023

About

41

30,000Maruho medical representatives ranked
among dermatologists 18 consecutive
times (9 years)*1

1

No.

in Japan (62.1%* )2Percentage of dermatologists who answered “No. 1 / High” in survey
Rep-I web survey for dermatologists in Japan (August 2023) by INTAGE
Healthcare Inc.
Aug. 2023 survey: 498 respondents*1 The survey has been conducted semiannually (18 times in total)
during the period from 2015 to 2023.
*2 Since the August 2023 survey

Maruho Report 2023

8

1.Maruho’s Meaningof Existence

1. Maruho’s Meaning of Existence Main Topics in the Fiscal Year Ended September 2023

Addressing skin concerns
through multifaceted activities

June

Maruho is focusing on the expansion of its lineup of new products and the provision of information to patients.
In the fiscal year ended September 2023, we contributed to society through continuously providing information on
pharmaceuticals and diseases.
February

Product

April

Acquired additional
approval of recurrent
herpes simplex foranti-herpes virus agent
Amenalief Tablets

Licensing

Entered into a license
agreement to market atreatment for common
warts in Japanpp. 23–24

pp. 23–24

FebruaryMay

2.Value Creation
Prospects

3.Strategy for
Value Creation

5.Financial/Company Information

Product

National Health Insurance begins coveragefor home self-injections of human anti-human IL-31 receptor
A monoclonal antibody Mitchga Syringes
September

LicensingSucceeded marketing approval for Tinea
unguium antigen kit DermaQuick tinea unguium

Providing information

Released new video on“Underarm Sweat Clear
Project,” our general
information website
on underarm sweat
treatment

4.Foundation for
Sustainable Growth

June

Providing information

Released new video on the information foracne treatment website “Project: Let’s cureacne together.”

Product

Launched herpes simplex detection kit
DermaQuick HSV
September

p. 29LicensingSigned licensing agreement with American
pharmaceutical company for hyperhidrosis
treatment in Asia
pp. 23–24, p. 30

2022

2023

Oct. Nov. Dec. Jan.

Feb.

Mar.
March

Apr.
Providing information

Released new video on“What’s Herpes?,”a general information
website on herpes
treatment

April

Product

Launched Renail Gel,a treatment agent forpincer nails
pp. 23–24

May
May

Product

Launched BEPIO
Lotion, an acne
vulgaris treatment
agentpp. 23–24

June
June

Providing information

Launched “Mitchga
Treatment Support
Service” as a LINE
official social media
account in support oftreating itchiness due
to atopic dermatitispp. 27–28

July
July

Aug.

LicensingObtained exclusive
license for ALDH2
activator

Sep.
September

Providing information

Launched “Rosacea Navi,” a general
information website on rosacea treatment
pp. 27–28

pp. 23–24

July

Providing information

Launched “Don’t
Tolerate Pincer Nails
Project”
p. 29September
March

Product

Launched sunscreen
serum iniks
Advanced Barrier
Day Essence

Sponsorship

Through sponsorship of the 61st SendenkaigiAward Junior and Senior High School Division,
we collected ideas on bringing smiles to friends
who are concerned with their skin issues

p. 299Maruho Report 2023

Maruho Report 2023

10

2. Value Creation Prospects Message from the President & CEO

1.Maruho’s Meaningof Existence

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

We are committed to working
closely with each individual
to identify and fulfill
their unmet needs
Commitment to shareholders

Now is the time to capture
the momentum for further growth

Atsushi Sugita
Representative Director, President & CEO

Maruho contributes to society through its strong presence as a pharmaceutical company specializing indermatology. When I became president in December 2020, I made it my mission to bring smiles topatients by identifying unmet needs overlooked in society and deliver solutions that only Maruho candevelop. In October 2022, we renewed our Corporate Philosophy and declared our intention to makehigher quality contributions in Japan and worldwide.
With the conclusion of the Fourth Medium-Term Plan at the end of September 2023, we are now
embarking on a period that will mark a major transformation for our Company. During the three yearsof the Fifth Medium-Term Plan starting in October 2023, we will set the course for ongoing growth byincreasing our product offering, launching new businesses, and expanding our overseas businesses. We
also will be cultivating a new corporate culture.
I would like to describe to stakeholders my own commitment to our objectives.

Corporate philosophy and culture

Always advancing, never afraid to change
I have seen Maruho from the inside for over 10 years since joining the company in 2012. In its 108-year
history, I truly feel that Maruho has been a company that is constantly advancing and not afraid ofchange. This ethos is symbolized by our change in direction in 2002 from the original focus on
orthopedics and surgery to our specialization in dermatology. The Company set topical drugs as its
strategic domain and concentrated its management resources into establishing our current businessmodel as a pharmaceutical company specializing in dermatology. That must have been a bold move,and I think the Company’s ability to put a unified effort behind a decision shows both the strength andappeal of Maruho.
The Company has also carefully passed down the importance of considering the long-term
perspective and the patient’s point of view. Dermatology still has many unknowns and patients havenumerous unmet needs. A problem can be a very serious issue for a patient but may be neglected or

11Maruho Report 2023

Maruho Report 2023

12

1.Maruho’s Meaningof Existence

2. Value Creation Prospects Message from the President & CEO

completely overlooked by society. As lifestyles and values diversify, we will continue to respond tounmet needs and to be sensitive to each person’s desire to have a better life.

Summary of business results for the fiscal year ended September 2023
and review of the Fourth Medium-Term Plan

Solid results leading into a new stage
Consolidated results in the fiscal year from October 2022 to September 2023 included net sales up
0.8% year on year to 96,184 million yen, operating profit down 62.1% to 6,227 million yen, ordinary
profit down 53.7% to 6,967 million yen, and profit attributable to owners of parent down 51.5% to
3,866 million yen. Our performance brought consolidated sales in sight of the 100 billion yen mark.
Non-consolidated sales amounted to 85.7 billion yen. We consider it a considerable achievementthat our new products were able to raise sales from the previous year even amid headwinds that
included revisions to National Health Insurance drug prices. Another major achievement was Maruho
Hatsujyo Kogyo Industry Co., Ltd., raising sales above 10 billion yen for the first time.
Core operating profit*1 declined from the previous year but was in line with our expectations as wedeliberately and actively invested to reestablish the growth trajectory for our businesses. We use core
operating profit as an important indicator because it is a fundamental source of growth in the mediumto long-term.
During the three years of the Fourth Medium-Term Plan, we achieved solid results and put smiles on thefaces of many patients. In the fiscal year ended September 2023, we achieved sales of 96.1 billion yen, andfor all fiscal years of the plan, we achieved a core operating income of 30% or more. This performance
will prove extremely important to our future as it has provided funds for the investment that will leadto our growth in the future.
Another achievement that sets us up for the future is the expansion of our lineup of our main
product lines. During the plan’s three years, we obtained approval nine products.*2 We also advanced
nine new projects to or beyond the development phase, which is another key performance indicator.*3
We believe this strengthened late-stage development pipeline positions us for accelerated growth evenin a challenging environment.
*1 Operating profit before deducting R&D expenses*2 Zebiax Oily Cream, Comclo Shampoo,† Rozex Gel,† Rapifort Wipes, DermaQuick tinea unguium, Mitchga Syringes, DermaQuick HSV, Amenalief,†
Renail Gel, BEPIO Lotion († additional indication)*3 Projects in Phase II or later clinical development studies

Net sales / Operating profit / Ratio of operating profit to net sales
Net sales (Millions of yen)

85,209
12.5

Operating profit (Millions of yen)

89,171

88,95496,754
22.7

Ratio of operating profit to net sales (%)

95,390
17.2

13.8
13.9

10,631
2018

13

Maruho Report 2023

12,3472019

96,184

12,3332020

21,9422021

16,431
2022

6.5
6,227
2023

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Thoughts on the new Corporate Philosophy

Bringing more smiles into people’s lives
In October 2022, we renewed our Corporate Philosophy. The revised philosophy is based on theprinciple that it takes all of us working together to deliver high quality. Our Mission and five Values
describe our vision for the Company and reflect our corporate culture and daily conduct. We wantevery employee to apply these in their decision and actions. To lead by example, I send out CEO
Monthly Message videos where I talk about how I put our Mission and Values into practice.
We also conduct an employee engagement survey that we call “More Smiles” with the aims of
gauging the degree of permeation and implementation of the Corporate Philosophy and of identifying
issues that employees confront in their daily activities. The survey results serve as a sort of report cardfor myself and the Company, and I consider them just as important as the financial figures. My job is to
use the results to verify the current status and guide us in the best direction forward. We also holdtown hall meetings where we can listen to and discuss people’s opinions and thoughts. We willcontinue applying the cycle of understanding the current situation, engaging in dialogue, and taking
action as a key way to deepen employee engagement and as a way for us all to continue improving.

Outline of the Fifth Medium-Term Plan

Refining Maruho’s strengths andlaying the groundwork for the future
At this moment, we have a tremendous opportunity to set the stage for further growth. I would like toshare our understanding of the present situation and our view of where we stand.
First, social security costs are skyrocketing. The sustainability of the social security system is being
questioned as funds available for medical care diminish in a society that is aging, has declining
birthrates, and has increasingly sophisticated medical care. These conditions are putting pressure on
pharmaceutical companies to provide answers through innovation, including by creating new
breakthrough drugs. At Maruho, we are seeking to create new value by offering new drugs andexpanding our late-stage development pipeline of drugs. We are strengthening our activities in ourareas of focus and eliminating waste to further refine our lean corporate structure and enable
continuous growth.
The second is the development of a global division of labor. The pharmaceuticals industry has along value chain, and division of labor from drug discovery all the way to sales has become standard.
We will focus on collaboration in product creation with academia, venture companies, and otherpharmaceutical companies around the world.
The third is the democratization of healthcare. Digitalization in healthcare will accelerate with the
emergence of generative AI and other new technologies. The information gap between medical
professionals and patients will narrow even further, and patients will play a greater role in treatment
choices. We will make full use of digital technology and our network of medical professionals andpatients to provide value to each person suffering from skin conditions.
These points are the backdrop for the new Fifth Medium-Term Plan (October 2023 to September2026). As the first plan formulated under the new Corporate Philosophy, it includes measures toimplement our Mission and to integrate the five Values into our corporate culture. Over the next three
Maruho Report 2023

14

1.Maruho’s Meaningof Existence

2. Value Creation Prospects Message from the President & CEO

years, we will increase our new products and businesses and transform Maruho into a company both interms of sales volume and product composition.
While formulating the plan, we asked ourselves what our strengths are and set three key themes
for building on those strengths and developing new strengths that we will need. The themes are (1)Strengthen our R&D capabilities and acquire pipeline products for future growth, (2) Executeproduction strategies aptly reflecting our product characteristics and continuously enhance our productvalue by cultivating a culture of ensuring reliability, (3) Develop a system for collecting and distributing
information related to dermatological conditions. To facilitate implementing our Mission, themanagement base for these will focus on reforming our human resources and workplaces, and we willconcentrate management resources to raise both to a world-class level.
We also identified other specific priority themes for long-term measures, including global expansion
and construction of a dermatology platform. I will be particularly focused on advancing our global
expansion because there are still innumerable patients around the world who are overlooked or unable
to obtain the medicines they need. We aim to be a global pharmaceutical company specializing indermatology that listens to each and every patient.
Outline of the Fifth Medium-Term Plan
MissionMore smiles, brighter life for you.
R&D andBusiness Development

Production andReliability Assurance

Sales, Marketing,and Medical

Strengthen our R&D capabilities
and acquire pipeline
products for future growth

Execute production strategies aptly reflecting
our product characteristics and continuously
enhance our product value by cultivating
a culture of ensuring reliability

Develop a system for collecting
and distributing information
related to dermatologicalconditions

Management Base

Reform our human resources and workplaces to facilitate our Mission

KeybusinessthemesKeymanagementbase theme

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Outlook for the fiscal year ending September 2024

Measures for growth in all directions
We will invest resources with greater selectivity and focus to establish a clear trajectory for future
growth. We are investing capital to maintain a stable supply of products, as well as to acquire newlicenses for early- and late-stage products and further strengthen our development pipeline. We will
also develop treatment plans based on the patient’s circumstances and location and link these plans topersonalized, standard, and appropriate medical care. We are also actively seeking to improve theavailability of information by enhancing the Skin Disease Regional Leader’s characteristics by field andregion, and leveraging the digital platform to promote treatment suggestions in response to patient
voices. Pharmaceutical supply and quality issues are becoming social issues, and we will continue tocounter this trend by providing high-quality products and reliable information that everyone can trust.
We will also continue our efforts to secure and develop human resources. There are many
challenges that we must face in order to create the next source of capital. We plan to increase thenumber of employees with the skills to lead the early market penetration of new products, to acquiredevelopment candidates with global rights, and to quickly launch acquired products.
The dermatology field still has countless unmet needs, and initiatives in this area are vital to improving
the lives of patients. We want to hear each person’s thoughts and concerns and help alleviate theirdistress so they can live their daily lives with peace of mind and smiles on their faces. We will continue
to conduct our business with sincerity and integrity. I look forward to the continuing guidance andsupport of all of our stakeholders.

Atsushi Sugita
Representative Director, President & CEO

Non-financial capital

Developing autonomous human resources
and achieving carbon neutrality
When embarking on a major endeavor to generate business growth, human resources are crucial. Oneof our Values as we create an organization where each person acts on their own volition andmotivation is “Grow your curiosity and change the world.”
We are improving the quality and increasing the number of initiatives designed to encourage each
employee to be autonomous in their work.
We also consider addressing climate change to be a vital management issue. We have declared that
Maruho will be carbon neutral by 2050, and in March 2023 announced on our website that we will
reduce CO2 emissions by 46% from fiscal year 2013 by fiscal year 2030. The newly established
Environment Committee lead the Company’s environmental efforts, which will include installingenergy-efficient equipment and purchasing of renewable and carbon-free energy.

15

Maruho Report 2023

Maruho Report 2023

16

1.Maruho’s Meaningof Existence

2. Value Creation Prospects Our Approach to Value Creation

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Creating value to bring smiles tothe lives of people around the world
Starting from its management resources cultivated over more than a century, Maruho continues to enhance its corporate value,
contribute to people’s lives, and bring smiles to people’s faces through its established track record of success.

Management resources

Corporate Philosophy

Long-Term Vision

Societal needs andexternal environment• Climate change• Resource shortages• Advancements inLong-Term Vision 2011

Solid presence
in dermatology

digital technology

Excellence inDermatology• Declining birthrate andaging population

Challenges
facing Maruho• Drugs approved overseas
but not in Japan• Pharmaceuticals with

Create value centered onprescription drugs asa pharmaceutical company
specializing in dermatology

Stable financial
foundation
supporting
sustainable growth

unstable quality/supply

Fifth Medium-Term Plan

Value Proposition

Strengthen our R&D
capabilities and acquire
pipeline products for
future growth

Patients andtheir families

Execute production
strategies aptly reflecting
our product characteristics
and continuously enhance
our product value by
cultivating a culture of
ensuring reliability
Develop a system forcollecting and distributing
information related todermatological conditions
Reform our humanresources andworkplaces tofacilitate our Mission• Movement to lower
medical costs

Commitment to life
Maruho has contributed to society by listening closely topatients and sincerely addressing unmet needs in society.
Our initiatives go beyond the field of dermatology toinclude business activities considerate of the naturalenvironment as well as efforts to protect, maintain andimprove the environment.

17

Maruho Report 2023

Medicalprofessionals

Employees

Local
communities

Environment

ESG activities

Powerful foundation underpinning
activities

Making outstanding contributions todermatology

Achieving a society where everyone
can live happily

In October 2022, we renewed our Mission and Values withthe desire to share the future vision that we should strive
for and commitment to contribute to better health forpeople through the efforts of all employees. Based on our
new Corporate Philosophy and the powerful strengths that
we have cultivated over a century, we continue to be aleader in dermatology.

Under Long-Term Vision 2011 “Excellence inDermatology,” we aim to make outstanding contributions
in dermatology and provide the best possible solutions for
all needs. In addition, the Fifth Medium-Term Plan includes
challenges looking further ahead, such as our global
expansion and establishment of a platform in dermatology.

We have positioned our Mission of “More smiles, brighter
life for you.” as our new mission and meaning of existence.
We will now create new value together with stakeholders
inside and outside the Company with the goal of realizing
our Mission.

Maruho Report 2023

18

1.Maruho’s Meaningof Existence

2. Value Creation Prospects Expectations for Maruho

Special Feature

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Expectations for Maruho

Maruho aims to contribute to achieving SDG Goal 3, Good Health and Well-being, by addressing the concerns ofpatients so society will be a place where everyone can live with a smile.
Our driving force is any need that has been overlooked, given up on, or remains unmet.
We talked with Narumi Tano, whose daughter suffers from food allergies, and who is a representative of the “Smile Smile”
Osaka Sayama Food Allergy and Atopy Circle that supports parents and children with food allergies.

Narumi Tano

Representative“Smile Smile” Osaka Sayama
Food Allergy and Atopy Circle
Ms. Tano is part of a citizen collaboration
project in Sayama City, Osaka that works withallergy specialists and government agencies
to present skin care workshops when infantsreceive medical examinations. Since 2022,
she has served as a member of theCommittee for the Creation Clinical
Guidelines for the Treatment ofPediatric Atopic Dermatitis. She
is the mother of twochildren.

Patient Voices

Creating a society where
the same information andsame treatment is available
anytime and anywhere

I wanted information
so I would know everything
was going to be all right
What I wanted most at that time was simply information thatwould make me feel like everything was going to be all right.
I wanted to know that there are other children who haveovercome food allergies and atopic dermatitis and are doing
well. I wanted to know about their lives when they were inschool, when they were adolescents, and when they wereentering society—information that would show me what
2022 Ministry of Health, Labour and Welfare Administrative Survey“Epidemiological research to understand the diversity of allergic
diseases and the actual conditions of daily life”
(%)

41.4

40

31.2

30
20

16.3

14.6

2.2

Maruho Report 2023

1.8

un Allect rg
ivi ic
tis
et
al
al
le
rg
ie
s
Dr
ug
al
le
rg
ie
s
An
ap
hy
la
xis

4.4

What society needs andhow Maruho can contribute

Patients rarely have direct contact withpharmaceutical companies, and we know very little
about what they do. I felt like I, my family, and ourdoctors were fighting allergies on our own. I remember
the relief I felt the moment I learned that, beyond thedoctors, there were pharmaceutical companies who werealso working to make drugs to help us. Knowing that thepharmaceutical companies had people providing theinformation we need for proper treatment, people
making the drugs we need, and people researching new
drugs renewed my motivation to do the best we can with
our treatment.
From Maruho, the first thing I would want is for it toprovide information. Our sessions focus mainly on
moisturizing and caring for the skin, but I’d like more
people to know how much lotion to use and how toapply it properly. For example, information like applying
the lotions properly will completely change the skincondition in one month. I hope Maruho will continue
providing this type of useful information through medical
professionals and others.
I would also like to ask Maruho to join our support
group for patients. I’d like all pharmaceutical companies,
doctors, pharmacists, and everyone to join with patientsso we can all work together to make all of our lives better.

“Smile Smile” is a discussion circle for parents of children
with allergies and atopic dermatitis. My goal goesbeyond that. I want to make a society that doesn’t needpatient groups—a society where discussions can takeplace anywhere, where the same information andtreatments are available everywhere. I want local andnational governments to support the people who care forpatients. My hope is to create a structure where everyone
can see when a patient is lonely or worried, and we canall look out for each other.

M

nj
co

rg Peric en
rh n
in ial
iti
s
Po
lle
n
al
le
rg
ie
s

A
rm to
at pic
iti
s
Fo
od
al
le
rg
ie
s

0

al
le

19

22.3

15.8

10

de

About 20 years ago when my second daughter was fivemonths old, she went into anaphylactic shock because of
powdered milk. It was the first time I had given it to her.
After one or two drops, I noticed that she didn’t like it,
so I stopped immediately. A few minutes later, however,she started crying and crying until her voice became
hoarse and her body and face started swelling. I had no
idea what was happening.
A blood test at the hospital found she was allergic topowdered milk. Later tests revealed that she was allergic to awhole variety of foods, including eggs, milk, wheat, rice, andfish. Because medical care is based primarily on blood tests,
we were forced to put her on an elimination diet to isolate
the specific foods she was allergic to. I didn’t know what
to feed her to make sure she was getting the nutrition she
needed, and I was worried about how she was going to live.
There was no one I could talk to about it, and I couldn’t findany books or online resources that could help me. For a while,
I had no idea what was going to happen in the future.
Even when it came time to introduce solid foods, she
had so many allergies that I didn’t know what I could
feed her. I remember going to the supermarket andstanding at the entrance in tears because I didn’t knowwhat to buy. How would we keep her alive? How will
this change the way we raise our older daughter? Whatis our family going to eat? I desperately needed
information that would help us lead regular lives.

Bro
as nchth ia
m la

Looking ahead after
being diagnosed witha food allergy

issues we can expect to face at every age. It’s very lonely
when you are worried like that. In our circle, people arealways saying that it’s the first time they’ve someone facing
the same issues. It’s reassuring to know that you’re not alone.
It is also important to have information that leads tocorrect understanding, knowledge, and effective treatment.
I was worried that my daughter’s treatment was only
addressing the symptoms, and that our efforts to create
the best living environment would not lead to a cure.
My doctor taught me that skin care is very importantwhen dealing with food allergies. Later, when I wasvolunteering to help with infant health examinations, I saw
many babies with eczema. I started discussing with thehealth center staff about whether properly treating infanteczema could prevent food allergies. With the help of
medical specialists, we began a skin care workshop. The
health center provides information to help parents
understand the situation both before and after the child isborn. I think that is really important for parents. We createdthe “Smile Smile” Osaka Sayama Food Allergy and Atopy
Circle in 2004 with the primary objective of providing theknowledge and support for “curing” allergies.

Maruho Report 2023

20

2. Value Creation Prospects Overview of the Medium-Term Plan

1.Maruho’s Meaningof Existence

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Sustainable growth andprogressive challenge
In the fiscal year ended September 30, 2023, Maruho Group achieved solid results under the Fourth Medium-Term Plan.
We formulated the Fifth Medium-Term Plan under the corporate mission of “More smiles, brighter life for you.”with the aim of establishing a growth trend.

Fourth Medium-Term Plan (October 2020 to September 2023)

The Fifth Medium-Term Plan (October 2023 to September 2026)

Review of business activities
Pillars of strategy

Create products forthe global market(Manufacturing)

Main initiatives and results• Manufacturing and marketing approval: 9 cases*• Strengthened late phase pipeline• Established a system for incubating candidates for in-licensing with external organizations* Zebiax Oily Cream, Comclo Shampoo,† Rozex Gel,† Rapifort Wipes, Mitchga Syringes, DermaQuick HSV, Amenalief,†
Renail Gel, BEPIO Lotion († additional indication)

R&D and Business Development
Strengthen our R&D capabilities
and acquire pipeline products
for future growthp. 23 R&D and Business Development

Products andmanufacturing plantsthat are continuouslychosen (Production)

Establish processes forproviding product value
in the global market(Global presence)

Expand business areas
utilizing the strengthsof the Maruho Group(Activities other thanprescription drugs forskin diseases)

between our four plants
Improvedcapabilities by meeting demand for new products and completed renovation•of the filling and packaging building at Hikone Plant• Implemented risk-hedging measures including diversifying API procurement• Established a system for digital and real-time information delivery in response topatients’ voices• Established the function and structure for information provision as a leader in the areaof skin disease• Formulated the Asia Dermatology Hub Concept for business to promote the growth ofour business in Asia
Launchedsales of Farom in China, which was registered on the national medical•
insurance reimbursement list

• Acquired new projects and made progress in new domains• Provided innovative therapeutic approach in the pincer nails business• Established the business base for cosmetics and quasi-pharmaceutical products with

the Carté HD line of Kose Maruho Pharma Co., Ltd.
Promotedskin-care guidance to patients during treatment through the iniks skin-care brand•Management base tosupport further growth(Management base)21

Maruho Report 2023

• Formulated a new Corporate Philosophy and announced it internally and externallyp. 1 “Corporate Philosophy and Meaning of Existence”• Implemented measures related to career autonomy p. 33 “Social—Working with employees”• Published Maruho Report as a business activity report for external dialogue and fostering trust

2

Production and Reliability Assurance
Execute production strategies
aptly reflecting our productcharacteristics and continuously
enhance our product value by
cultivating a culture of
ensuring reliability

Priority theme

Production system operation that supports the
management base
2 Pursue versatile measures and innovative technology tomeet diverse needs
3 Fostering a culture of reliability assurance1

p. 25 Production and Reliability Assurance

Sales, Marketing, and Medical
Develop a system forcollecting and distributing
information related todermatological conditions
p. 27 Sales, Marketing, and Medical

Priority theme

Creating new marketing approaches unique to Maruho
Creating added values that correspond to individual
patient needs and regional characteristics
3 Provide new values through building a skin science platform
1
2

Management base
Reform our human resources
and workplaces to facilitate
our Mission
Achieve the mission through company-wide
initiatives at all departments

Priority theme

Respecting and cultivating autonomous human resources
Cultivating a workplace culture that creates new values
3 Improving the corporate brand that is trusted andrespected by society
1
2

Priority themes ofthe management base

Review of management baseEnhancing research and development portfolio management
Improving development planning and management abilities
3 Strategic, active licensing activity
4 Enhance creation and acquisition of candidate phase projects
5 Taking a new step in global expansion
1

Priority themes for business

High-quality information
provision reflecting
the voices of patients(Providing information)• Increased production and strengthened stable supply structure through coordination

Priority theme

Maruho Report 2023

22

1.Maruho’s Meaningof Existence

3. Strategy for Value Creation Progress of the Medium-Term Plan

2.Value Creation
Prospects

3.Strategy for
Value Creation

Assessment of the fiscal year ended September 2023

Positive results in licensing activities anddevelopment pipeline expansion

R&D and Business Development

R&D capabilities
paving the way for
new treatments indermatology

Maruho researches and develops prescription drugs
mainly used in dermatology using an approach that isclosely in tune with patient needs.
With the aim of creating novel drugs suited to global
markets, we pursue optimal portfolio management thatconsiders everything from development pipeline and R&D
resources to market environment and unmet needs. We
plan and execute a testing program with an eye toward
promptness and enhanced value, focusing on theidentification biomarkers linked to the appropriate use ofdrugs and acquisition of clinical and non-clinical data that
contributes to appropriate use. Additionally, we areworking on creating proprietary topical drug formulation
technology. In addition to product development, we
continue to plan and implement business strategies in
new areas based on medical needs in new business fields
and alliance strategies with partners with an eye towardmaximizing the value of projects.

R&D expenses

21,034 million yen
Pharmaceutical business* net sales / R&D expenses /Ratio of R&D expenses to net sales
Pharmaceutical business net sales (Millions of yen)
Ratio of R&D expenses to net sales (%)

78,760 80,717 80,849

R&D expenses (Millions of yen)

24.4

87,724 86,241

86,292

16.1

15.3

13,203 12,276 15,168 12,273 13,917
2019

2020

2021

2022

21,0342023* The pharmaceutical business includes Maruho’s medical devices business,
self-care business, and Maruho Medical, Inc.’s medical devices business.

Initiatives in the fiscal year ended September 2023

Masahiro Akatsuka
Global Business Development,
Research & Development

Speeding up efforts to strengthen R&D
capabilities and acquire development pipelines
In the Fifth Medium-Term Plan, we aim to strengthen ourefforts in the creation and acquisition of candidate phaseprojects and the promotion function of R&D, in addition
to the previous core functions of introduction oflate-stage development drugs and late-stage clinicaldevelopment. While strengthening our network withsuch partners as domestic and overseas pharmaceutical

We focus on developing the skills to personalize our
Mission and Values and to build our careers
autonomously. We also encourage our employees tointeract with partners and the companies we dobusiness with to identify product development
opportunities that address unmet needs, and to publish
their research results externally. We aim to be anorganization that continues to engage in R&D andbusiness development that adds value by enhancing
creativity through repeated future-oriented andhypothetical thinking, and by empowering our people
to take action on their own.

Key theme of strategy

Main results

Planning and creationof high-quality projects• Two newly acquired candidate phase*1 projects; exclusive license agreement with Alchemedicine, Inc.
for an ALDH2 (aldehyde dehydrogenase 2) activator, etc.

Product Code

Target Indication

Dosage Form

Development Phase

Diversified licensing
activities• Two newly acquired projects in development phase*2 Signed an exclusive license agreement withNielsen BioSciences, Inc. for Candida albicans extract, a treatment for verruca vulgaris (common
warts), etc.
• Signed an exclusive license agreement with Journey Medical Corporation for hyperhidrosis treatment
glycopyrronum tosilate hydrate in South Korea, Taiwan, Hong Kong, Macau, and the 10 ASEAN
member states

M5250

Pruritus with atopic dermatitis (pediatric)

Injection

Filed for approval

M5250B

Prurigo nodularis

Injection

Filed for approval

M5250E

Pruritus with atopic dermatitis (infants)

Injection

PIII• Steady progress in R&D• Promotion of global projects in collaboration with partners• Obtained approval for BEPIO Lotion (additional dosage form) for the treatment of acne vulgaris,
Renail Gel for the treatment of pincer nails, and Amenalief Tablets (additional indication), an
anti-herpes virus agent

M6050C

Acne vulgaris

Topical

PIII

M6100

Atopic dermatitis

Topical

PIII

M6110

Verruca vulgaris

Injection

PIII

M6050F

Axillary osmidrosis

TopicalPII

Implementation of
R&D projects with
an emphasis on quality
and speed*1 Prior to early phase II studies in clinical development *2 After late phase II studies in clinical development

23

Deepening outside
interactions forresearch and developmentwith greater value*3 Key Opinion Leader: In this context, KOL refers to specialist physicians
who are at the forefront of disease diagnosis, treatment, and research.
*4 Contract Research Organization

Plan for the fiscal year ending September 2024
and beyond

14.0

5.Financial/Company Informationcompanies, venture companies, and academia, we will
work to identify and acquire new products that are alsoneeded in global markets.
Anticipating market trends, we will formulate an R&D
portfolio serving as a pillar for short-, medium-, andlong-term earnings, prioritize and create products while
appropriately managing resources. In terms of licensing
activities, we will be mindful of strategy and activity, andaim to acquire new growth drivers that can leverage ourknowledge in dermatology. We will also focus on drug
repositioning to strengthen our ability to create newactive ingredients that lead to application patents andformulation patents.
In regard to our business foundation in global
markets, we will focus on China and other regions in
Asia to expand our development and sales functions. In
addition to collaborating with external parties, we willdevelop global human resources who can promote these
new business strategies.

18.8

16.8

2018

In the fiscal year ended September 2023, we plannedand executed diversified licensing activities. In an effort
to obtain rights, the entire company thoroughly exploredcandidates for in-licensed products and promoted
science-based assessment, leading to the acquisition ofmultiple projects as well as the identification of multiple
candidates for potential licensing in the fiscal year ending
September 2024. We also expanded our development
pipeline through integrated efforts between businessdevelopment and R&D.
The business model of dividing research,development, and sales globally has now become
mainstream, with the number of companies that have allof these functions domestically in Japan is shrinking. As
such, one of the challenges we face going forward interms of R&D is creating projects that involve
partnerships with academia or venture companies insideor outside of Japan. Therefore, we need to enhance ourdevelopment planning globally along with ourmanagement capabilities, i.e., functions to promote joint
international clinical trials, while building a solid networkwith KOLs*3 and CROs.*4

4.Foundation for
Sustainable Growth

Maruho Report 2023

Development Pipelines (Includes late-stage development products after Phase II)(As of Semptember 2023)*Please visit our corporate website for the latest information. (https://www.maruho.co.jp/english/about/activities/pipeline/)
Maruho Report 2023

24

1.Maruho’s Meaningof Existence

3. Strategy for Value Creation Progress of the Medium-Term Plan

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Assessment of the fiscal year ended September 2023

Completed large-scale renewal of main plantand made progress with integrated operationsof the four plants

Production and Reliability Assurance

Implementing a
production strategy basedon product characteristics
and fostering an evengreater culture of
reliability assurance

Maruho has established a production system consisting offour plants: the main Hikone Plant, Nagahama Plant,
Tateyama Pharmaceutical Factory Co., Ltd., and Roman
Industries Co., Ltd. We offer a stable supply of high-quality
pharmaceuticals with one of the highest production
capacities of topical formulations in Japan, and we are
actively investing management resources to strengthen
our bases and systems. We are also focusing on improving
the containers and packaging of our products to increaseusability and reduce environmental impacts.
We are committed to improving reliability assurance.
We ensure an honest and open regulatory process fromdevelopment to application for approval, as well as areliable supply of products post approval. In addition topreventing quality risks, including in our processes, weguarantee reliability in all of our business activities,
including production, and aim to continue contributing
to patients through the supply of products and theprovision of relevant information.

In our production activities, we continue to make capital
investments to build a robust and flexible production
system. In the fiscal year ended September 2023, wecompleted the renewal of the filling and packaging
building of the Hikone Plant. Over the course of about
three years, we completed this work as planned while
continuing the production of existing products. In
addition, we established a system and mechanism forvisualizing spare parts at all plants for the integrated
operation of the four plants. We are also steadily
reducing quality risks through automation and workload
reduction measures using new and digital technologies.
In the manufacturing of APIs, we have accumulated
know-how by being involved in the manufacturingmethods and prototyping processes of our outsourcing
partners. In order to establish a stable supply system, we
have also started work to increase the production
capacity of Roman Industries Co. Ltd..

Capital expenditure(Millions of yen)

10,940

6,937

6,937 6,706

2,684

2018

2019

2020

3,531

2021

2022

Key theme of strategy

Main results

Accumulation of API
manufacturingknow-how andexpansion of functions• Systematically implemented work to increase the production capacity of APIs at Roman Industries
Co., Ltd.
• Involved in the manufacturing process of outsourcing partners. Promoted consideration ofdiversification for a stable supply of APIs and raw materials for existing products

Completion of flexible
production system andfunctions• Completed the renewal of the filling and packaging building at the Hikone Plant, and introduced
new equipment that can accommodate a variety of container sizes and formats• Established a system and mechanism enabling easy identification and mutual searches for spare parts
management at the four plants• Completed GS1 barcode reposition and 2D code addition to improve customer satisfaction• Provided tactile labels for reasonable accommodation of patients with skin diseases

Honest and open
activities to ensure
reliability• Issued new procedures for market research and provision of analytical reagents, and conductedtraining companywide on the Personal Information Protection Act• Disclosed the number of adverse effects to medical professionals on our website• Continued high-level reliability assurance activities

Maruho Report 2023

Tateyama Pharmaceutical Factory Co., Ltd.

Nagahama Plant

Roman Industries Co., Ltd.

2023

Initiatives in the fiscal year ended September 2023

25

Hikone Plant

Plan for the fiscal year ending September 2024
and beyond

Expand production system and acquire
technologies for producing unique products
In order to achieve the Fifth Medium-Term Plan, we aim
to pursue a production strategy unique to Maruho thatleverages our thorough knowledge of the external
environment and our own strengths. We will also acquire
advanced production technology and production
management know-how.
We will support our management base by appropriately
controlling the supply and procurement risks of products
and raw materials, and by always providing a stable supplyof products. In addition, we will independently improve thecontainers and packaging of products to flexibly respond toneeds and utilize new technologies. As part of these efforts,
we plan to establish a production strategy for each productbased on its long-term development and achieve highly
efficient production.

Focusing on fostering a culture of
reliability assuranceWith the aim of realizing its Mission, Maruho conducts
all business activities, including R&D, manufacturing, andsales, in full compliance with all relevant laws andregulations, as well as the general spirit of international
standards, both in Japan and overseas. We actively andcontinuously engage in the R&D of innovative
pharmaceuticals that contribute to the advancement of
medicine, and provide a stable supply of pharmaceuticals
with excellent efficacy, safety, and quality. To ensure theproper use of pharmaceuticals, we provide accurate,scientifically based information of Japan andinternational markets on efficacy, safety, and quality,and promptly collect, evaluate, and communicate
information post manufacturing and marketing.
We have reaffirmed our reliability assurance
activities as a strength that needs to be further
deepened and have positioned them as one of thepriority themes of our operations in the Fifth
Medium-Term Plan. We aim to ensure that ourreliability assurance culture becomes a code of conduct
for all employees and becomes established as a brandpower of Maruho. We will build a culture where all
employees understand the importantance of reliability,
how it contributes to patients, and can discuss why
reliability must be ensured.
In the fiscal year ending September 2024, we plan toclearly document our companywide policy andcommunicate it both internally and externally as Maruho's
commitment. In businesses other than pharmaceuticals,
we aim to establish a robust reliability assurance system byaccumulating practical experience in reliability assurance
at an appropriate level and scale. In order to steadily
advance each of these measures, we plan to systematicallydevelop and acquire human resources.

Expertise in production
technologies and broad
perspectives
Masahiro Takeda
Corporate Strategy,
CMC Research & Production

Maruho is deeply committed to continuing to reliably
deliver high-quality products to patients. Based on thiscommitment, we aim to develop human resources witha broad perspective who can enhance their expertise inproduction technology and who can give back tosociety by promoting a wide range of collaboration
both inside and outside the company and promoting
environmental considerations.

Maruho Report 2023

26

3. Strategy for Value Creation Progress of the Medium-Term Plan

1.Maruho’s Meaningof Existence

2.Value Creation
Prospects

3.Strategy for
Value Creation

Assessment of the fiscal year ended September 2023

Contributed to acne treatment with uniqueinformation provision based onregional characteristics

Sales, Marketing, and Medical

Building and evolving
systems for gatheringand providing
information on
people’s skin troubles
Maruho provides and communicates appropriate information
about products and diseases in a variety of ways, dependingon the characteristics of each region. The information
obtained through communication with medical professionals
and people with skin problems is used not only for productdevelopment, but also for the provision of tools andmechanisms that lead to optimal treatment for each patient.
Additionally, we identify in-demand information and unmet
needs, and based on evidence such as clinical trials, we
identify medical issues and create new knowledge and value
regarding the efficacy and safety of treatments and products.
With one of the most complete systems in Japan, wealways aim to contribute to medical care and improve theQuality of Life of patients by promoting proper use of our
products and disseminating correct knowledge about diseases.

Number of dermatologists in Japan towhom Maruho provides information
through medical representatives (MRs)

10,000Approx.

Number of medical professionals registeredas Maruho Web members*

In the fiscal year ended September 2023, we conducted
a wide range of activities to raise disease awareness forpatients (area DTC), and achieved significant results inproviding high-quality information that reflects the voicesof patients. To solve the problems of acne patients, we
identified the characteristics of each region based on
open data and analysis results of each information
provision channel. This is an initiative unique to Maruho,
which continues to listen to the voices of acne patients.
We discuss the information we obtain withdermatologists to contribute to solving acne problems.
As these results show, Maruho’s strength is not inproviding uniform information on individual products, but
in providing a variety of information according to thecharacteristics of the region, such as the patient’s
background and medical situation. In the future, we willfurther deepen our strengths in activities that meet thetrue needs of patients and medical care, as well as in eachspecialized function such as sales, marketing, and medical.

36,0004.Foundation for
Sustainable Growth

5.Financial/Company Information

value unique to Maruho. Skin Disease Regional Leaders
will play a central role in collaborating with internal andexternal networks to help us establish a high level ofexpertise and problem-solving capabilities. We plan tostrengthen our focus areas, while clarifying the divisionof functions in fields, areas, and digital.
In addition to these, we will leverage synergies withthe diagnostics, medical devices, and cosmetics businesses
and collaboration with external partners to build adermatology platform to connect with individuals facing
skin problems. Through this platform, we intend toprovide new awareness and experiences to medical
professionals and all people facing skin problems. At thesame time, we will further strengthen our digital
information provision system and enhance content thatenables us to connect with patients.
Based on the above approaches, from the fiscal year
ending September 2024, we will efficiently allocate
resources to new drug fostering and evolution as well as
ensure the growth trend of the domestic prescription
drug business remains intact. In our information provision
activities, Skin Disease Regional Leaders will play a central
role in providing custom-made information according to
the background of each patient and the characteristics ofthe region by making the most of digital technology.

Approx.

Empowering each andevery employee todisseminate informationin their own words*Knowledge service for reading, knowing, and learning about dermatology

Initiatives in the fiscal year ended September 2023

Takashi Kitagawa
Japan Business Operations

Key theme of strategy

Main results

Actions to improve both thequality and quantity of two-way
communication with patientsand medical professionals• Engaged in activities to raise awareness about diseases (area DTC*1) tailored to regional
characteristics with a focus on social media• Set up an official LINE account for patients with atopic dermatitis to support itch treatment• Launched “Rosacea Navi,” a comprehensive and informative rosacea treatment website
for patients

Evolution of information
provision using Skin Disease
Regional Leaders who specialize
in providing information basedon regional characteristics andMedical Area Specialists who
specialize in providing
information on specific diseases• Started operating a system to certify targeted Skin Disease Regional Leaders in order tomake advanced proposals for personalized medicine and standard medical care
• Visited dermatologists and home health care physicians and area-specific lectures tocontribute to regional healthcare systems• Concluded an agreement Collaboration and Cooperation for the Promotion of Home
Health Care with Osaka Prefecture

Dissemination of evidence-based
product information and creationof new value based on data fromclinical trials and other sources• Disclosed the number of adverse effects after the launch of Rapifort Wipes, Mitchga
Syringes, and Rozex Gel on a website for medical professionals, and built a system torespond immediately to treatment plans and when adverse effects occur
Recognized by dermatologists as the “most highly rated company” in safety-related
information on pharmaceutical company websites*2• In activities to create evidence, we improved the accuracy of research questions bycollecting patient feedback using quick surveys and social media from the researchplanning stage, and adopted PRO*3 as evaluation items. Published 16 papers and madenine presentations for academic societies*1 Direct to Consumer: indicates pharmaceutical advertising directly targeting general consumers *2 Source: 2023 Multimedia White Paper on Physicians Summer
Edition (MCI DIGITAL) *3 Patient Reported Outcome: A method and indicator used in clinical trials where a patient reports on their health condition subjectively

27

Maruho Report 2023

Specialty website supporting people to clear up their acne

Plan for the fiscal year ending September 2024
and beyond

Aiming for information gathering andprovision closely in tune with skin issues
We will implement the following initiatives under theFifth Medium-Term Plan.
From pre-illness to diagnosis, treatment, prevention,
and aftercare, we will ensure that we are in tune witheach individual’s skin problems at every stage of life,
build a system to solve these problems, and expand thescope of our contributions to self-care. We will also focus
on creating a system to support patients when they
undergo a medical consultation and enhancing disease
information sites for patients with the aim ofdisseminating information on appropriate use that is easy
to convey to patients.
We will evolve our provision of information according
to the characteristics of each region to increase added

In order to truly address skin concerns, each and every oneof our employees must be able to communicate
information to medical professionals and patients in theirown words. We will create a work environment where
employees can improve each other while developing
autonomous and motivated human resources.
Additionally, we will strengthen the system for sharing
information and making recommendations within thecompany. At the same time, we will also use digitaltechnology to increase the efficiency of information
provision activities and the accuracy of analysis of collected
information. As a leading company in dermatology, we
will continue to promote the Maruho brand andcontribute to advancements in medical care and society.

Maruho Report 2023

28

1.Maruho’s Meaningof Existence

3. Strategy for Value Creation Progress of the Medium-Term Plan

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Business activities outside of prescription drugs
p. 23 R&D and Business Development

In addition to prescription drugs, Maruho is challenging itself to create new value closely in tune with people’s skinconcerns, from presymptomatic to diagnosis, treatment, prevention, and aftercare, through products and services otherthan prescription drugs, i.e., diagnostic drugs, medical devices, cosmetics, and others.

Sharing knowledge gainedin Japan with Asia

1 Diagnostic drugs
Maruho is taking on the challenge of cultivating and deepening its presence in the in-vitro diagnostic
pharmaceuticals market centered on skin diseases.

Special Feature

Launch of DermaQuick HSV
Maruho launched DermaQuick HSV, a detection kit for herpes simplex, in February 2023. Herpes simplex isan infection caused by the herpes simplex virus (HSV), which is characterized by recurring symptoms. When
it appears, herpes simplex causes small reddish blisters and tingling pain, affecting both the patient’s
physical and mental wellbeing. Since early medication is important for the treatment of herpes simplex, asimple and rapid test that diagnose the condition on an outpatient basis is required. DermaQuick HSV
provides a finding in 5 to 10 minutes using a specimen taken from a blister and assists in an appropriate
diagnosis. Following on from DermaQuick HSV, we aim to develop products that contribute to theappropriate diagnosis and treatment of skin diseases through the introduction of new technologies.

2 Medical devices
Maruho aims to further improve the patients’
Quality of Life by identifying their needs as well as
developing and improving products.

Launch of Renail Gel
In April 2023, Maruho launched the prescription drug Renail Gel
to aid in the correction of pincer nails. Pincer nails are a condition
where the toe nail or finger nail curls inwards, causing pain andinflammation. Treatment with a corrector usually takes three to six
months, but by using Renail Gel concomitantly, the treatment
period can be shortened and thecorrective effect can be maintained
after the corrector is removed.
Together with MAKIZUMEMEISTER, the pincer nail corrector
which we manufacture and market
in-house, we contribute to thetreatment of patients suffering from
Renail Gel
pincer nails.

Launch of the “Don’t Tolerate Pincer
Nails Project”
Pincer nails are a condition that is not well known and people
tend to tolerate it even if it hurts. As part of our efforts to raiseawareness of this condition, in July 2023, Maruho launched
the “Don’t Tolerate Pincer Nails Project” to encourage people
to treat their pincer nails.

Screenshot of the “Don’t Tolerate Pincer Nails Project” website

29

Maruho Report 2023

DermaQuick HSV

3 Cosmetics

Maruho continues to evolve day by day to realize its

Maruho offers new proposals for daily skin care closely
in tune with individual skin troubles.

Launched three novel items under Carté HD
In March 2023, Maruho launched three
items in the “Dry Skin Balance Care”
line under the quasi-pharmaceuticalhigh-performance skincare brand
Carté HD offered by Kose Maruho
Pharma Co., Ltd. By adding acne
prevention to the conventional
function of high moisturizing effect,these items support skin care forpeople who suffer from both dryness
and oily skin.

Mission of “More smiles, brighter life for you.” With its
Values that serve as standards of conduct, Maruho
contributes to patients and society.
Employees, who are responsible for businessactivities, work diligently together as part of the sameteam to create a society where everyone can smile.
Here we will share several examples of these activities.

Three items from“Dry Skin Balance Care”

Advanced Barrier Day Essence receives award from
popular magazine

New products in the iniks brandMaruho’s skincare cosmetics brand iniks was born from the voicesof medical professionals who treat skin problems. Launched in
March 2023, Advance Barrier Day Essence, a sunscreen serumthat protects sensitive skin from ultraviolet rays, has been highly
evaluated. The product has received awards from several popularmagazines, including the Sunscreen Award in the LEE’s Best
Cosmetics 2023 SS (the First Half).

Advance Barrier
Day Essence

Achieving
Maruho’s vision
for the future

Maruho takes on the challenge of unmet needs aroundthe world with the desire to bring a smile to the many
people around the world who are suffering from skinproblems. The Global Business Development Dept. takes
the lead in the global expansion of our business.
In September 2023, Maruho signed a licensing
agreement for the development, manufacture, andmarketing of Rapifort Wipes, a primary axillary
hyperhidrosis treatment agent, in South Korea, Taiwan,
Hong Kong, Macau, andCountries and regions coveredin the licensing agreement
the 10 ASEAN member
states. By providing newSouth Korea
treatment options to the
medical frontlines, weHong Kong Taiwan
Macau
expect to make further
contributions to patients
ASEAN
suffering from this disease.
Maruho has
cultivated a variety ofknowledge in the Japanese market to meet the needs ofdiverse skin diseases. The “you” in our Mission includes
people outside of Japan. In order to bring smiles topatients around the world who are eagerly awaiting
drugs, we will work on unmet needs not only in Japanbut also around the world.

Members of the Global Business
Development Dept.
Having specialized in the field of dermatology for two
decades, contributing to patients in Asia by leveraging
our strengths cultivated in the Japanese market issomething that only Maruho can accomplish and thisalso represents our Mission. This licensing agreement
represents the first step for Maruho in taking on new
challenges. Believing that our products can bring smiles
to patients in Asia, we will expand our licensing toother products and regions.

Maruho’s cosmetics website called“Skin & Beauty Information by Maruho”

Maruho Report 2023

30

3. Strategy for Value Creation Progress of the Medium-Term Plan

1.Maruho’s Meaningof Existence

2.Value Creation
Prospects

3.Strategy for
Value Creation

5.Financial/Company Information

p. 25 Production and Reliability Assurance

p. 27 Sales, Marketing, and Medical

Communicating our strengths
in topical treatmentsinternally and externally

The “face of Maruho”
connecting the Company
with customers

Providing appropriate
treatment and care forpincer nails

Unlocking greater growththrough improved IT
infrastructure

Maruho is committed to producing high quality products
and supplying them in a stable manner. Providing
employees and medical professionals with anunderstanding of formulation technology and quality will
help patients use our products with peace of mind.
The Hikone Plant, our main production site, has been
providing training for employees since 2011. More than
500 people including plant workers, MRs, and others
have learned about the Company’s topical formulation
technology, formulation process, and quality control
system. Through experience and detailed explanations of
the formulation process, employees in other departments
have deepened their understanding of the Company’s
technologies, which is useful for explaining and providing
information to the outside world.

Bringing smiles to people troubled by their skin requiresthat we listen to the voices of many stakeholders andidentify the latent needs found in this feedback.
The Medical Information Center, which is one of thefunctions of the Medical Affairs Dept., receives inquiries
from patients, their families, and medical professionals.
These number around 30,000 every year. The content
ranges from questions andrequests for information
related to pharmaceuticals
to medical devices anddiagnostic drugs other thanpharmaceuticals.
In addition to answering
individual inquiries, theMedical Information Center also plays an important rolein analyzing information obtained from dialogue withcustomers to understand unmet needs and share themwith relevant departments. Utilizing this information in
new R&D and planning leads to the dissemination of
useful medical and scientific information.

Maruho aims to solve skin problems using a variety of
approaches. One such example is MAKIZUME MEISTER, apincer nail corrector developed by Maruho Hatsujyo
Kogyo Co., Ltd. and sold by Maruho.
In April 2023, Maruho launched a topical drug called
Renail Gel. Based on an idea from Keio University, thisproduct was developed in collaboration with Maruho
Hatsujyo Kogyo Co., Ltd., and represents the world’s firstprescription drug for the purpose of aiding in thecorrection of pincer nails. When used in concomitantlywith MAKIZUME MEISTER, it is possible to shorten thewear time of the corrector and delay any recurrence after
the corrector is removed. It is expected to alleviatepatient worries such as wanting to get rid of pain anddiscomfort as soon as possible or delay recurrence asmuch as possible.
In July 2023, we launched the “Don’t Tolerate Pincer
Nails Project” to encourage people to treat their pincernails. in order to raise awareness that corrective
treatment is an option for pincer nails.
Looking ahead, Maruho, together with Maruho
Hatsujyo Kogyo Co., Ltd. will leverage the strengths ofboth companies to develop products that bring smiles topeople troubled by pincer nails.

The Information Systems Department provides the IT
infrastructure and services powering Maruho’s businessactivities.
In addition to system operation and maintenance, wehave developed a network usage environment thatmaintains a smooth and highly secure network regardlessof time or place. In 2023, we introduced Secure Access
Service Edge (SASE), a next-generation solution, toquickly respond to changes in the internal and external
environment, improving employee productivity andbusiness efficiency.
In addition, we developed MaruhoGAI, a generative
AI environment dedicated to Maruho, which protects
company information. Many employees use it togenerate minutes and summaries for meetings, or to
produce ideas for creating materials. In the future, we
aim to evolve the system so that it can provide answers
using information from inside Maruho.
We also have a thorough risk management system
for information that adopts solutions to mitigate the riskof information leakage and server downtime due tocyberattacks, including ransomware.

We also conduct plant tours for physicians,
pharmacists, and other medical professionals. We share
Maruho's production technology and commitment to ahigh level of quality awareness among employees.

p. 29 Business activities outside of prescription drugs

4.Foundation for
Sustainable GrowthManagement base

Ryoichi Onishi
Hikone Plant (Pictured in the middle of the front row)
In addition to ensuring quality and stable supply, which
is Maruho’s mission in production, we have conducted
on-site training for related departments, mainly MRs, toequip them with a deeper understanding of technology
and manufacturing quality. With integrity as our motto,
we will continue our activities to convey thetechnologies of our plants and Maruho’s concept ofquality to as many people as possible.

31

Maruho Report 2023

Manabu Oishi
Members of the Medical Affairs Dept.

Medical Devices Dept.

In addition to striving to respond quickly and accurately
to various inquiries, we uncover the needs hidden in the“voices” of our customers and use them to develop
and improve our products and services. Every voice wehear is important. In the future, we will also consider
the use of generative AI technology, and further pursue
the value of “notice the signs” in our Corporate
Philosophy. We aim to continue contributing tosolutions that make people smile.

Patients with pincer nails are facedwith pain that takes a toll on their daily
lives. It is common for them to be hesitant
about going out or to hurt their knees and lower backbecause they walk with the affected area covered.
We hope to contribute to improving the patients’
Quality of Life with pincer nails through “appropriate
treatment and care” such as hospital visits andcorrective treatment.

Members of the Information Systems Dept.
We are implementing strategies that balance proactive
and defensive approaches, such as introducing
functions to autonomously protect and recover data as
an information asset. Going forward, we will continue
to actively roll out new technologies and continuously
strengthen our IT infrastructure to contribute to
Maruho’s growth in a new era.

Maruho Report 2023

32

1.Maruho’s Meaningof Existence

4. Foundation for Sustainable Growth Social

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

SocialWorking with employees
Respect & cultivate autonomous
human resources
The growth of our employees is important as they are
responsible for enhancing our medium- to long-term
corporate value. Maruho Group is establishing systems topromote the autonomous career development of each
employee and encourage their active participation.
In today’s world full of uncertainties and change occurring
at an accelerated speed, human resources that can think
independently and yield results efficiently are indispensable
for us to continue growing and meeting the needs of society.
Maruho Group is cultivating human resources with anemphasis on the three points of autonomy: conduct workwith a sense of ownership, share the Corporate Philosophy
and vision in pursuing social value, and develop one’s own
career. Our goal is to invigorate the company, improve
productivity and increase employee engagement bypromoting employee autonomy.

Supporting employee career development

Encouraging diverse working styles

Promoting health management support

We are expanding on programs and opportunities thatenable each employee to choose their own career path,leading to greater motivation. In the fiscal year ended
September 2023, we launched an in-house internshipprogram, Job Challenge, and a mutual learningcompanywide platform among employees, Mana Musubi
on our internal portal site.

Maruho believes it is desirable to have a workplaceenvironment that enables diverse and flexible work styles
for employees to achieve a better work-life balance aswell as high productivity and creativity. In addition todiversifying the everyday workplace, the Group alsooffers a support system that corresponds to different
stages in life.

Maruho positions health management as an importantmanagement task. For us to realize our Mission of “Moresmiles, brighter life for you.” it is essential for our
employees and their families to live a healthy and fulfilled
life. Through our systematic and strategic healthmanagement, we focus on approaches that allow each
employee to pursue happiness and growth from threeperspectives: as an individual, as a member of the
Maruho Group, and as a member of society.

In addition, new long-term vision planning members
were recruited internally. With a strong desire toparticipate in management, they began full-scaledeliberations in October 2023.

Diversification of work locations
We promote the most suitable work style tailored to
employee needs at each department, including
combinations of in-person and remote work. We operatea system that enables employees to submit expenses,
approval documents, among others, from their company
laptop or smartphone. Moreover, some offices haveadopted free address office seating in order to encouragecommunication between employees.

Use of health management support toolMaruho has launched a health support app called KENPOS
for all employees to access. The app can be used for setting
personal goals and recording activities in order to prevent
lifestyle diseases as well as to maintain and improve one’s
health. In addition, Maruho also distributes tips fromexperts and practical ideas that can be incorporated into
everyday living through the app. Moreover, we also holda walking campaign (115 participants in the fiscal year ended
September 2023) and online smoking-cessation program(4 participants in the fiscal year ended September 2023).

Respecting diversity & inclusion
We are working to create an environment where diverseand unique human resources can work with enthusiasm.
Promoting the active participation of women
Maruho Group has set a target of having womenaccount for at least 15% of all managerial positions to beachieved by September 2024. The result for the fiscal
year ended September 2023 was 12.3%, a 0.8-point
increase from the previous year.
Supporting next-generation development
We strive to reduce regular overtime work so that
employees can easily balance work and childcare. Up to
September 30, 2024, our goals are for (1) zerodepartments to accumulate over 30 hours in overtime forthree consecutive months or more and (2) zero individuals
that accumulate 540 hours in overtime per year. The
results in the fiscal year ended September 2023 were zerodepartments for goal (1) and one individual for goal (2).
The new system of newborn leave (post-partum parental
leave) that encourages male employees to take childcare
leave was launched at the same time as the Child Care andFamily Care Leave Law in October 2022. In the fiscal year
ended September 2023, 28 employees took the leave(46.8%). We share articles internally on interviews with male
employees who have taken parental leave as part of ourefforts to encourage eligible employees to utilize this leave.

33

Maruho Report 2023

New long-term vision planning members

Main career support systems
Name

DetailJob
Challenge

An in-house internship system that allows employees
to try working in a department of interest while stillworking for their current department at the same time.
Results in the fiscal year ended September 2023: 16
employees applied for four positions and 13
employees were already assigned

One-on-one
Interviews

One-on-one interviews are conducted for employees
to engage in direct dialogue with their supervisor
which improves awareness of one’s autonomy andresults in improved performance

CareerTraining

A training program administered by age that allows
participants to consider their career path.
Results in the fiscal year ended September 2023: 36
employees participatedInternal
Job Posting

A system that allows employees to transfer to adifferent position or project that is openly recruited bygoing through an application and interview process.
Results in the fiscal year ended September 2023: 37
employees applied for 41 openly recruited positions,of whom 21 were transfers

Office at the Kyoto R&D Center

Pamphlets on understanding health checkup results to improve
one’s healthOccupational safety and healthAs an occupational safety and health initiative, Maruho
strives to prevent occupational accidents and mental
health diseases. The initiative has two phases: phase one isto break away from poor health and phase two is tomaintain better health. There are five targets for the
initiative as follows (number of occupational accidents: 3
as of the fiscal year ended September 2023).

Sales office

1. Rate of participation in regular health checkups 100%
2. 100% action follow-up rate for those with findings in
the regular health checkups
3. Expand industrial health staff by contracting publichealth nurses
4. Health promotion and increased opportunities to stay
active through introduction of a health app
5. Enhance collaboration between the head office, R&D Center,and plants on occupational safety and health activities

Maruho Report 2023

34

1.Maruho’s Meaningof Existence

4. Foundation for Sustainable Growth Social

Relationship with society
Improving healthcare accessCommunicating appropriate treatment information
Maruho provides information to medical professionals
and patients using social media and its website. We offer
Dermado, a membership-based website with useful
information in the field of dermatology for medical
professionals. We also provide information on skindiseases and treatment on our website or through social
media to promote accurate understanding and support
access to daily care and appropriate treatment forpatients suffering from skin problems.

Online pathology diagnosis quiz for physicians appearing in Dermado

Held public lectures in collaboration
with dermatologists
In collaboration with dermatologists, we hold lectures onskin diseases nationwide that are open to the generalpublic. In addition to information on diseases, the event
was framed as an opportunity for patients to share theirown personal experiences. We held a total of 45 lecturesin 23 prefectures (including online) in the fiscal year
ended September 2023.

35

Maruho Report 2023

Participation in adolescent health education
promotion projectMaruho supports the Kagayaki School, an adolescenthealth education promotion project for junior high andhigh school students. The project aims to promotecorrect understanding of health issues that accompany
changes in life stages as well as diseases specific towomen in order to help young people plan their lives andachieve career plans.
As a supporting company of the project, Maruho
provides outreach lectures and teaching materials, as wellas conducts seminars for teachers. In addition to theexisting gynecology-related program, we have started theDermatology Class initiated by Maruho in July 2023. Thisis a program of outreach classes by dermatologists forjunior high and high school students who are troubled
with adolescent skin issues. The program is scheduled to
be delivered to eight schools across Japan by April 2024,with a plan to expand it going forward.

Visiting lecture at Shigakukan Junior High / High School in Kagoshima(July 2023)

2.Value Creation
Prospects

3.Strategy for
Value Creation

Social contribution
Social contribution
Maruho continues to take part in activities that are closely
related to its business characteristics in an effort to integratesocial contribution into its corporate culture. We also promote
activities that employees can participate in voluntarily.

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Maruho Research Award supporting
upcoming researchers
The Maruho Research Award is given to outstanding
research papers to help foster young researchers. The
award is granted to research papers selected through astrict screening process by the selection committee
comprised of university professors from among basic andclinical research papers on dermatology.

“Maru-hotto Gift” matching gift program
Maruho’s matching gift program “Maru-hotto Gift,” asystem for employees to donate money starting at 500
yen, has been running since 2015. Maruho makes adonation to a non-profit organization chosen by thecompany by matching the amount of employee donations.
In the fiscal year ended September 2023, a total of 492
employees, or 24% of our workforce, participated in the
program. A total donation of approximately 3,800,000
yen was made, which includes the company’scontribution after the gift-match. Both the donatedamount and participation rate were record highs.
The donation was provided to four organizations: Guide
Dog & Service Dog & Hearing Dog Association of Japan,
Special Olympics Nippon Osaka, NPO CliniClowns Japan,
and Children’s Hospice Project TSURUMI Children’s Hospice.

Award honoring dermatologists, Master ofDermatology (Maruho)
Maruho and the Japanese Dermatological Association
jointly administer Master of Dermatology (Maruho), anaward that recognizes dermatologists who have contributed
to the development of the field of clinical dermatology. It
was first established in 2010 to recognize those withoutstanding achievements in clinical dermatology. The
prize has since been renamed in 2017 to follow its
current structure.

Participation in charity at the Osaka Marathon 2023

Activities by volunteer members

Two members representing Maruho, including
President and CEO Sugita, participated in a charity run
during Osaka Marathon 2023 held in February. The
participation is a new initiative to support Approved
Specified Nonprofit Corporation CliniClowns Japan, acharity partner of the marathon, as well as abenefactor of the “Maru-hotto Gift” matching gift
program. Maruho employees were also present toprovide support on the day of the event. Donations
collected from employees were forwarded to theorganization at a later date.

In October 2023, 12 volunteer employees usedvolunteer leave to visit the Aflac Parents House
operated by Children’s Cancer Association of Japan.
The team cleaned up the rooms, kitchen, dining
area, restrooms, and garbage station used by children
and their families to support the families spending
quality time together at the house.
These autonomous social contributions andinteractions of employees increase morale in their
day-to-day jobs.

Related information Master of Dermatology (Maruho)
https://www.dermatol.or.jp/modules/biologics/index.php?content_id=21/(Japanese)

Maruho Report 2023

36

1.Maruho’s Meaningof Existence

4. Foundation for Sustainable Growth Environment

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Environment
Basic approach to the environment
As a member of society, Maruho actively promotes
activities to protect the regional and global environments,
such as reducing environmental impact of its R&D, sales,and production activities. At the same time, Maruho
pursues business activities in harmony with the global
environment by raising the environmental awareness of
its employees.

emissions from 14,600 tons as of March 31, 2022, by
8,077 tons (approximately 55%). Furthermore, Maruho’s
CO2 emissions as of March 2023 totaled 14,300 tons
(2% reduction YoY).
CO2 emissions

As of March 31(t-CO2)14,80615,80015,50014,80014,600 14,300

Toward Carbon Neutrality in 2050
CO2 Emission Reduction Targets for 2030 and 2050
Reduce CO2 emissions* by 46% by FY2030 compared to
FY2013. Reduce CO2 emissions to zero by FY2050.
* Target for laboratories, plants, offices, and sales vehicles.

We established the Environment Committee toappropriately and effectively promote initiatives related toenvironmental issues. Through the Environmental
Measures Promotion Liaison Committee, we collectinformation on initiatives related to environmental issues,
identify issues in promotion activities, report to thechairperson as necessary, and promote understanding ofpromotion activities and within the company.
Environment Committee framework
Chairperson
Corporate Officer, Business Operations

Environment
Committee

Committee members
General Affairs Dept., Hikone Plant, Nagahama Plant,
R&D Management Dept., Sales Strategy Dept.,
Corporate Planning Dept.
Secretariat
General Affairs Dept.
Sustainability Promotion Group

Environmental Measures Promotion Liaison Committee

Each location
Head Office

R&D

Production

Sales

2018

37

Maruho Report 2023

2019

2020

2021

2022

2023

Hikone Plant industrial water (m3)Nagahama Plant tap water (m3)60,875
47,111
32,16231,014
23,10620182019

34,31935,89034,62534,251

2020

Hikone Plant (t)

202.3

2018

221.8

2019

379,640 368,455 360,016 360,072
1,408
254.1

2020

243.0

2021

238.3

2022

2022

46,99935,9442023

At Maruho, we are implementing the three R’s(Reduce, Reuse, and Recycle) to contribute to a
recycling-oriented society.
We are reducing emissions of industrial waste generated
during the research and development process as well as
thoroughly implementing waste separation at the Kyoto
R&D Center. We are making efforts to resell machines thatare scheduled for disposal for their reuse and to supportscientific research in Japan. In addition, we strive to raiseawareness about resource conservation by visualizing thenumber of copier sheets used, which resulted in lesspaper being purchased compared to the previous year.
At the Nagahama Plant, the risk of waste leakage
from one tank in the event of an emergency has been
mitigated by connecting two tanks installed outdoors.
Moreover, we continue to implement efforts to
reduce paper use by digitizing various documents at eachbusiness location.
Industrial waste generated

330,274

2021

39,365

Industrial waste reduction* As of March 31
Energy consumption (GJ)

Energy consumption per employee (GJ/person)

52,211
44,67042,29250,764
41,464

Energy consumption / Energy consumption per employee

292,533

Hikone Plant tap water (m3)70,887In terms of our energy conservation initiatives, as of March
31, 2023, we have maintained energy consumption ataround the same level as the previous year.
For manufacturing locations, we have completed theswitch over to LED lighting for parts of the manufacturing,filling and packaging building at Hikone Plant and at theadministrative building of Nagahama Plant.
At the Kyoto R&D Center, which is our research anddevelopment site, we have installed LED lighting in allareas of the Drug Development Laboratories and someareas of the Drug Discovery Research Laboratories, whilechanges have been made to the operating hours of air
conditioning in certain rooms.
Additionally, at the Drug Development Labolatories,
we have introduced a CO2 concentration control systemthat reduces the workload on air conditioning equipment.
In addition, we are adjusting the thermostat setting inresearch labs according to each season.
At sales locations, we are gradually switching over tohybrid vehicles for sales use, with the adoption rate
remaining at the elevated level of 91.3% as of
September 2023.
We have improved energy efficiency at each businesssite across Japan, such as by adjusting the temperature
setting for air conditioning.

CO2 emissions reduction
In March 2023, Maruho established the goal of achieving
net-zero CO2 emission by 2050. To achieve this, we will
make efforts to bring in innovative technology andgather information. As an intermediate goal, we have set
CO2 emissions of 6,534 tons in 2030 in aiming to reduce

The Hikone Plant saw an increase in industrial water used
due to equipment problems in 2022. This problem wasresolved and industrial water usage returned to normal
levels in 2023, resulting in a 14.5% decrease from theprevious fiscal year.
At the Nagahama Plant, tap water consumption
decreased by 8.6% year-on-year due to the use of
equipment with higher production efficiency and the
shutdown of heat sources when not in operation.
Use of water resources

Energy conservation initiatives

Promotion framework

Reducing our use of water resources

Nagahama Plant (t)

1,672

1,624

1,543

1,528

1,650

237.5

2023

155

155

2018

2019

336

391

2020

2021

222

197

2022

2023

Koichi Nishioka
Corporate Officer,
Business Operations

Sustainability management with an emphasis onenvironmental and social issues is essential for acompany to survive in the world today.
As the theme of our management foundationin the Fifth Medium-Term Plan, we have set out toreform our people and workplaces in order torealize our Mission of “More smiles, brighter life foryou.” When tackling environmental and social
issues, the first point is employee autonomy. Rather
than making “have to” demands from outside thecompany or instructions from within the company,
we value the “satisfaction” of each and every
employee and encourage them to “want to” takeon challenges.
The second point is to strengthen the three ties
between individuals, the company, and society. In
the business world, there is a deep-rooted tendency
to neglect initiatives for environmental and social
issues as “for show only” or “factors that increase
costs.” Based on the recognition that the realizationof a better life for employees and a better society
will lead to a better company and the fulfillment of
our Mission, we will harmonize the three interestsof individuals, the company, and society.
Finally, the last point is to avoid objectifying themeans. Setting numerical targets is also essential
when addressing environmental and social issues.
However, if the achievement of these numericaltargets becomes an inalienable goal, realization of
the company’s true purpose may be hindered. We
will strive for flexibility in our activities as a focal
point for the realization of our Mission.
We are committed to business operations
without using employees as a means. In December
2022, we launched an engagement survey (nicknamed
More Smiles) and since then we have continued toengage in dialogue between management andemployees. In the future, we will promote broader
dialogue with society among employees and aim to
improve employee engagement, corporate value,and social value in an integrated manner.

Maruho Report 2023

38

1.Maruho’s Meaningof Existence

4. Foundation for Sustainable Growth GovernanceCorporate Governance Policies and Activities
Basic philosophy

Overview of the Board of Directors

In order for Maruho to continue to contribute to thedevelopment of society, the company must be managed
from a medium- to long-term perspective based on thelong-term vision and the Fifth Medium-Term Plan under
Maruho’s Corporate Philosophy. At the same time,
Maruho must also further evolve its corporate governance.
The key to this is the effective operation of the Board of
Directors. In order to improve its effectiveness, the company
will need to access external perspectives by having directors
fulfill their roles and responsibilities. In addition, the objective
monitoring, supervision, and advice of outside directors on
management, together with audits by the Audit &Supervisory Board Members, the Accounting Auditor, andthe Internal Audit Dept., ensures the proper execution ofduties by directors and enables prompt and bolddecision-making by management. Through the promotion ofeffective corporate governance, we aim to achieve Maruho’ssustainable growth and enhance its corporate value.

Board of Directors
The Board of Directors endeavors to increase managementtransparency and fairness, speed up decision making
concerning important managerial issues, receive reports on
the business execution of Maruho and its Group companies,
and supervise the execution of duties by directors andcorporate officers. In addition, outside directors equippedwith diverse knowledge and specializations related tofinance, accounting, and/or risk management play a role insupervising management and providing advice for enhancing
corporate value over the medium- to long-term throughdiscussions during board meetings. As a result, we seek tocreate a highly effective Board of Directors by ensuring
directors’ sharing and understanding of the Company’s basic
management policies and important managerial matters, andby reaching consensus and making policy decisions based on
consultations and discussions from a multilateral perspective.
The attendance of outside directors in the fiscal year
ended September 2023 was 100%.

Structure

9 directors, 2 outside director, and 1 auditor

Board
meetingOct., Nov., Dec., Jan., Apr., May, Jul., Aug., and Sept.
Business plans• Group management, business plan achievement,
basic policy for the following fiscal year’s businessplan, a scheme for evaluation of achievements• Overview of account settlement, internal audit findings,
results of whistleblowing, internal and external trends

Major
agendaShareholders’ meeting• Proposals for the ordinary general meeting ofshareholders
Officers• Election of officers, appointment of the Representative
Director, appointment of directors with special titles
Stock• Stock transfer between shareholding associations• Allocation of transfer shares

Risk management
In order to maximize its corporate value, Maruho works
to avoid or reduce risks by identifying the risks that theCompany is facing or is likely to face in the future, andestablishing and operating an appropriate risk
management cycle (PDCA cycle).
The Risk Management Regulations established by
the Company defines that a risk is an uncertain eventthat may affect the Company’s profit or loss and that
requires Companywide management using the PDCA
cycle framework and is designated by the Risk
Management Committee.
1) Code of Practice, etc.
Risks related to compliance with laws and social norms,
corporate social responsibilities, and compliance withvoluntary rules such as the JPMA Code of Practiceestablished by the Japan Pharmaceutical Manufacturers
Association (JPMA) and the Fair Competition Codeconcerning Restriction on Premium Offers in the EthicalPharmaceutical Drugs Marketing Industry

Corporate governance system
The relationships between the Company’s organizations and internal control are as shown below.
Shareholders’ Meeting
Audit by Audit &Supervisory Board Member

Appoint / dismiss

Risk Management Committee

Representative Director,
President & CEO
Corporate Officers

Cooperation

Internal Audit Dept.
Internal audit

Each department

39

Maruho Report 2023

Accounting audit

Appoint / dismiss

Accounting Auditor

Select / remove / supervise

Board of Directors
Appoint / dismiss / supervise

Appoint / dismiss

Audit & Supervisory
Board Member

2.Value Creation
Prospects

3.Strategy for
Value Creation

2) Other risks
Risks that are significant for the Company or occur frequently,
and that require Companywide management using the
PDCA cycle approach, such as information management
risk, personnel risk, reputation risk, and disaster risk
Initiatives to promote risk management include planning,
implementation, and reporting of educational programs
and self-inspections concerning risk management. Also,
the Internal Audit Dept. conducts monitoring according
to the internal audit regulations to objectively evaluate
whether the PDCA cycle concerning risk management isworking effectively.
In addition, we manage potential risks by categorizingthem into two groups: “Companywide risk (risks requiring
Companywide management)” and “business risk (risks
entailed in implementing/promoting strategies andbusiness plans).” The initiatives by the Risk Management
Committee to increase directors’ and employees’
awareness of “potential Companywide risks” include
posting awareness-raising articles by the department
responsible for each type of risk on the internal portal
site, and conducting e-learning tests.
List of potential Companywide risks
Labor management / Disasters, infections / Information security /Patent/trademark infringement / Code of Practice, etc. / Management of
a conflict of interest / Clinical Trials Act / Rumors/reputation by the mass
media / Company vehicle operation management / Harassment

Compliance
All officers and employees shall comply with the Maruho
Code of Compliance Standards in their own conduct andtheir business activities.
In carrying out our business activities, we shallcomply with general laws and regulations such as civil
codes, corporate laws, and antimonopoly laws, as wellas the various business-related laws and regulations suchas pharmaceutical laws and will have no relationships
with antisocial forces and groups and adamantly refuse
and oppose their unreasonable demands. We shall act
with high ethical standards, including bioethics, andgood sense, and each individual shall conduct
themselves with self-awareness and an understanding of
one’s own mission.
When we commission work to Group companies or
outside vendors in regard to various processes, such as
product research, development, manufacture, and sales,
we shall be aware that we are the ones that bear theultimate responsibility, and shall handle situations with asense of unity with the Group company or outside vendor.

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Promotion systems
At Maruho, the Risk Management Committee plays thecentral role in activities to promote compliance.
The Risk Management Committee designates risks
that require Companywide control and instructs theCode of Practice Committee and responsible
departments to control such risks by the PDCA cycle
approach, with the aim of promoting compliance in an
integrated manner throughout the Company.
Promotion System
Other risks

Code of Practice

Responsible
departments

Code of
Practice
Committee

Legal Dept.

Risk Management Committee
Chairperson
Committee
secretariat

Directors(excluding
outside directors)

Compliancemanagerregisteredat JPMAAll employees

Internal reporting system (Maruho Hotline)
To ensure the implementation of compliance management,
we have established the Maruho Hotline as the contact
point for internal reporting to accept direct consultation
and reporting both from within and outside the Company
on suspicious activities concerning compliance. We
disseminate information on the importance of the internalreporting system, confidentiality, and the protection ofwhistleblowers, provide e-learning programs to promote
an understanding of the system, and continually make all
employees aware of the contact point for internalreporting. In the fiscal year ended September 2023, there
were a total of 16 whistleblowing reports (16 from within
the Company and 0 from outside the Company).

Quality policy
Maruho has established a policy on quality in order toprovide a stable supply of high-quality pharmaceuticalproducts together with science-based information topeople of the world who wish for good health. To thisend, we established the quality policy below.
• With a global perspective, we shall strictly comply with all relevant
quality-related laws and regulations.
• We shall gather information on medical needs and create innovation toprovide pharmaceutical products and information of superior quality.
• We shall construct an international standard quality management system
to promote continuous improvement toward a higher level of quality.
• We shall properly allocate operational resources in order to realize thisquality policy.

Information about our internal control systems can be found on our website. https://www.maruho.co.jp/english/
Note: The Company has commissioned Deloitte Touche Tohmatsu LLC, an auditing firm, to conduct its accounting audits in accordance with the Companies Act of Japan. The auditing firm has
confirmed that the financial statements present fairly, in all material respects, the financial position and the financial performance in accordance with Japanese generally accepted
accounting principles.
The contents of the financial statements included in this report are completely the same as those of the consolidated financial statements disclosed under the Companies Act. Results ofthe previous fiscal year and the consolidated statement of cash flows are not included in the target of the accounting audit of this year but presented as reference information.

Maruho Report 2023

40

4. Foundation for Sustainable Growth Board of Directors, Auditors, and Corporate Officers

1.Maruho’s Meaningof Existence

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Board of Directors and Auditors (As of December 2023)

Atsushi Sugita

Yasuyuki Ishimaru

Yasuhiko Kito

Masahiro Takeda

Takashi Kitagawa

Masahiro Akatsuka

Representative Director,
President & CEO

Director of the Board,
Executive Corporate Officer(from December 2020 to present)(from December 2020 to present)

Director of the Board,
Senior Corporate Officer,
Reliability Assurance &Medical Affairs

Director of the Board,
Senior Corporate Officer,
Corporate Strategy,
CMC Research & Production

Director of the Board,
Senior Corporate Officer,
Japan Business Operations

Director of the Board,
Senior Corporate Officer,
Global Business Development,
Research & Development(from April 2021 to present)(from October 2022 to present)(from December 2020 to present)(from October 2022 to present)

Katsunori Hiratsuka

Yutaka Tomita

Akihiro Watanabe

Yoshihiko Akagi

Hiroaki Miura

Director of the Board,
Corporate Officer, Production

Director of the Board,
Corporate Officer,
Global Business Development

Director of the Board (Outside)

Director of the Board (Outside)

Corporate Audit & Supervision(from December 2015 to present)(from December 2015 to present)(from December 2016 to present)(from December 2022 to present)(from December 2022 to present)

Corporate Officers (As of December 2023)

41

Koichi Nishioka

Kazumasa Hirata

Yutaka Ishihama

Satoko Sugawara

Yoshimi Kakiuchi

Kazuhiko Aita

Yoshihiko Sato

Corporate Officer,
Business Operations

Corporate Officer,
Research

Corporate Officer,
Clinical Development

Corporate Officer,
Regulatory Science

Corporate Officer,
Reliability Assurance &Medical Affairs

Corporate Officer,
MarketingCorporate Officer,
Sales

Maruho Report 2023

Maruho Report 2023

42

1.Maruho’s Meaningof Existence

5. Financial Information / Company Information Financial/Non-financial Highlights

Financial Highlights (Consolidated) Fiscal year ended September 2023

Net sales / Operating profit /Ratio of operating profit to net sales
Operating profit(Millions of yen)

Net sales(Millions of yen)

96,75485,20989,171

88,954

Pharmaceutical business net sales (Millions of yen)
Ratio of R&D expenses to net sales (%)
R&D expenses (Millions of yen)

24.4

95,390 96,184
87,72422.7

80,84980,71778,760

Environment

Number of employees / Number of hires(number of new hires/number of career hires)

Energy consumption /Energy consumption per employee * As of March 31

Number of employees
Number of recruits (new hires)
Number of recruits (career hires)

65

61

24

26

2018

14.0

13.9

13.8

1,542

Energy consumption (GJ)

1,566

1,547

1,546

292,533

10,631

2018

12,3472019

12,333

21,034

16,431

13,203

12,27615,16812,273

13,917

6,227

2020

2021

2022

2023

2019

56

2020

47

46
17

14

2021

2019

2020

2021

2022

379,640 368,455 360,016 360,072

2023

243.0

237.5

238.3

27

21

2023

2022

254.1

221.8

2018

2019

2020

2021

2023

2022

Both the number of employees and the number of new hires are
increasing. In terms of recruitment, we are actively seeking humanresources to take on the various challenges necessary to realize our Mission.

In 2023, the number of operating lines increased due to improvements
made to the Hikone Plant, but we were able to control the slight increasein energy consumption by switching to LED lighting and promoting
various energy savings.

Number of female employees / Ratio of female
employees / Ratio of female managers

CO2 emissions * As of March 31

Number of female employees (People)

2018

330,274

202.3

57

6.5
21,942

Energy consumption per employee (GJ/person)

86,292

86,241

16.1

15.3

1,537

1,512

18.8

12.5

5.Financial/Company Information

4.Foundation for
Sustainable Growth

Human resources

16.8

17.2

3.Strategy for
Value Creation

Non-financial Highlights (Non-consolidated) Fiscal year ended September 2023

Pharmaceutical business* net sales /R&D expenses / Ratio of R&D expenses to net sales

Ratio of operating profit to
net sales (%)

2.Value Creation
Prospects

Ratio of female employees (%)

Ratio of female managers (%)

569

547

534

530

515

497
32.9

33.5

34.4

34.5

35.4

9.7

12.1

12.3

11.4

11.5

(t-CO2)14,80615,80015,50014,80014,600 14,300

2018

2019

2020

2021

2022

36.3

Net sales for the fiscal year ended September 2018 were 85,209 million
yen. After that, sales steadily increased due mainly to the launch of new
products and an increase in sales of our main products. Net sales for the
fiscal year ended September 2023 totaled 96,184 million yen (up 0.8%
year on year) while operating profit came in at 6,227 million yen (down
62.1%).

In our R&D activities, we have expanded our collaboration withcompanies and universities in Japan and overseas to create and launch
new products. This has led to the release of BEPIO Lotion for thetreatment of acne vulgaris and the herpes simplex detection kit
DermaQuick HSV using the immunochromatography method.
* Includes Maruho’s medical devices business, self-care business, andMaruho Medical, Inc.’s medical devices business.

The number of female employees has increased year by year, reaching
36.3% of our total workforce in the fiscal year ended September 2023.
We have set a goal to increase the ratio of female managers to at least
15% by September 2024.

We have set a target of zero CO2 emissions by fiscal 2050. As of March
2023, our CO2 emissions totaled 14,300 tons (down 2% year on year).

Profit attributable to owners of parent

Total net assets / Total assets /Equity-to-asset ratio

Overtime work frequency (employees) / Numberof paid leave days taken per employee * As of March 31

Use of water resources(Millions of yen)

Total net assets (Millions of yen)
Equity-to-asset ratio (%)

14,902

Total assets (Millions of yen)

2018

164,257
156,720
152,495
151,394
142,857
143,286 142,908
110,478

7,972

120,217

77.1

6,318

83.7

86.3

85.5

2021

2022

2023

85.8

14.3

13.6

13.5

13.1

12.9

Hikone Plant industrial water (m3)Nagahama Plant tap water (m3)

15.4

32,16231,014

5

3

2

1

2018

2019

2020

2021

70,887

1

1

2022

2023

2018

2019

35,89034,62560,875

2023

Hikone Plant tap water (m3)41,464

47,111

23,106

127,825

84.1

2020

Number of employees who worked over 540 overtime hours in a year
Number of paid leave days taken per employee

177,219 181,451

12,7372019

12.3

35,94442,292

46,99952,211

44,67034,251

50,7642020

39,36534,319

2021

2022

2023

In order to enhance the work-life balance of employees, we are working
to encourage employees to take paid leave and reduce overtime work.

We are making efforts to reduce the amount of water used at each plant.
As of September 2023, we reduced our water usage by 4.6% compared
to 2022.

Number of employees who took childcare leave

Industrial waste generated

3,866
2,976

FemaleMale
Ratio of female employees (%)
Ratio of male employees (%)

2018

2019

2020

2021

2022

2023

In the fiscal year ended September 2023, profit attributable to owners ofparent amounted to 3,866 million yen (down 51.5% year on year) due tothe impact of aggressive investment activities aimed at returning to a
growth trajectory.

43

Maruho Report 2023

2018

2019

2020

2021

2022

2023

Total assets as of September 30, 2023 increased by 4,231 million yen
from the previous fiscal year to 181,451 million yen. Current assets
decreased by 2,584 million yen, mainly due to a decrease in cash anddeposits of 10,469 million yen and an increase in merchandise andfinished goods of 3,447 million yen. Fixed assets increased by 6,816
million yen, mainly due to an increase in construction in progress of 1,943
million yen and an increase in investment securities of 2,426 million yen.
Total net assets increased by 4,224 million yen compared to the previous
fiscal year to 156,720 million yen, mainly owing to an increase in retained
earnings of 3,732 million yen.

100.0

100.0

100.0

59

60

60

100.0

51

Hikone Plant (t)

100.0

61

0

2018

2019

5.1

3

2020

6.8

5

2021

1,408

1,672

1,624

1,543

1,528

1,650

46.8
22.4

0

100.0

67

Nagahama Plant (t)

18

2022

28
2023

The number of male employees taking childcare leave is increasing. Thereis an understanding and culture within our workforce that encourages
men to participate in childcare.

155

155

2018

2019

336

391

2020

2021

222

2022

197
2023

At the Hikone Plant, we have been able to maintain a low level ofindustrial waste generated since 2022. At the Nagahama Plant, theamount of industrial waste generated increased due to an increase inproduction volume.
Maruho Report 2023

44

1.Maruho’s Meaningof Existence

5. Financial/Company Information 11-year financial summary

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

11-year financial summary(Millions of yen)

2013.92014.92015.92016.92017.92018.92019.92020.92021.92022.92023.9Fiscal year
Net sales

64,33669,36773,53876,722

86,90285,20989,171

88,95496,754

95,39096,184

Operating profit

10,862

6,256

7,682

7,424

14,731

10,631

12,347

12,333

21,942

16,431

6,227

Ordinary profit

11,115

6,202

7,151

7,483

14,577

10,284

12,433

10,721

21,112

15,035

6,967

Profit attributable to owners of parent

7,136

3,639

3,288

2,272

8,463

2,976

12,737

6,318

14,902

7,972

3,866

Total net assets

84,057

93,87896,592

99,984

108,985

110,478

120,217

127,825

142,857

152,495

156,720

Total assets

100,042

124,750

134,484

137,554

145,096

143,286

142,908

151,394

164,257

177,219

181,451

11,034.01

11,533.32

12,117.75

12,531.01

13,675.28

14,440.31

15,713.18

16,569.98

18,531.20

19,794.54

20,348.96

936.82476.44429.85297.001,106.30

389.091,664.83

825.81

1,947.92

1,042.12

505.43

Cash flows from operating activities

5,384

4,641

10,117

10,433

11,923

11,385

11,57320,042

18,063

16,651(1,732)

Cash flows from investing activities

2,083(8,980)(7,906)(15,554)(10,824)(13,595)(11,706)(4,817)(4,591)(7,597)(8,029)Cash flows from financing activities(137)

10,6872,600(3,024)

(583)

(681)

(10,245)

(686)

(570)

(589)

(617)

Equity-to-asset ratio (%)

84.0

70.7

68.9

69.7

72.1

77.1

84.1

83.7

86.3

85.5

85.8

Return on equity (%)

8.5

4.1

3.6

2.4

8.4

2.8

11.0

5.1

11.1

5.4

2.5

Number of employees

1,287

1,526

1,588

1,716

1,838

1,930

2,093

2,150

2,181

2,213

2,241

As of fiscal year-end

Amount per share (Yen)Net assets per share
Basic earnings per share

Cash flows

Financial indicators(Notes)1. For accounting audits, please refer to the note for internal control systems in “Corporate Governance Policies and Activities” section. (p. 40)
2. The “Partial Amendments to the Accounting Standards for Tax Effect Accounting” have been applied since the beginning of the fiscal year ended
September 2019. For the fiscal year ended September 2018, the amended accounting standard has been applied retrospectively.

45

Maruho Report 2023

Maruho Report 2023

46

1.Maruho’s Meaningof Existence

5. Financial/Company Information Financial Statements

Consolidated Balance Sheet

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

Consolidated Statement of Income(Millions of yen)2022.9AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in progress
Raw materials and supplies
Income taxes refund receivable
Other

Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Construction in progress
Intangible assets
Software
Goodwill
Sales rights
Other
Investments and other assets
Investment securities
Long-term loans receivable from subsidiaries and associates
Retirement benefit asset
Deferred tax assets
Other

Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term borrowings
Accounts payable-other
Income taxes payable
Provision for bonuses
Other

Non-current liabilities
Deferred tax liabilities
Provision for retirement benefits for directors (and other officers)
Asset retirement obligations
Other

Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment

Non-controlling interests
Total net assets
Total liabilities and net assets

5.Financial/Company Information

125,932
69,53330,125
13,644
4,910
5,608
–
2,109
51,28625,591
15,529
4,810
1,086
2,125
2,039
7,663
2,423
331
3,858
1,049
18,032
7,472
294
3,906
4,939
1,418
177,219
23,254
5,145
200
392
7,376
4,150
3,739
2,251
1,469
18
1,075
195
180
24,723(Millions of yen)2023.9123,348
59,06331,52417,092
6,301
6,370
403
2,592
58,10328,14816,558
4,125
1,337
2,145
3,982
6,366
2,279
10
3,116
960
23,588
9,899
98
6,857
5,185
1,547
181,451
23,268
7,184
200
–
9,552
456
3,710
2,165
1,461
63
1,019
198
180
24,7302022.92023.9Net sales

95,39096,184

Cost of sales

33,36335,614Gross profit

62,02760,570

Selling, general and administrative expenses

45,59654,342

Operating profit

16,431

6,227

Non-operating income

760

2,971

Interest income

32

15Dividend income

15

17Compensation income

67

1

Rental income

27

27

Insurance claim income

55

59

Subsidy income
Gain on valuation of investment securities

45–

Foreign exchange gains

476

Other

34
2,626
–

39

189

2,155

2,231

Interest expenses

15

10Commission expenses

8

8

1,892
–

1,994

Non-operating expenses

Share of loss of entities accounted for using equity method
Foreign exchange losses
Other

205

239

12

15,035

6,967

–

15

Gain on change in equity–

15

Gain on sales of investment securities

–

0

2,370

763

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on valuation of investment securities
Impairment loss

89

58

2,001

459

279

244

Profit before income taxes

12,665

6,219

Income taxes-current

5,367

2,631

Income taxes-deferred

(659)

(254)

Total income taxes

4,708

2,377

Profit

7,956

3,841

Loss attributable to non-controlling interests

(16)

(25)

Profit attributable to owners of parent

7,972

3,866

Note: 2022.9 is not subject to audit.

149,097
382
4,251
144,463
2,344
623
67
1,653
1,053
152,495
177,219

152,830382
4,251
148,196
2,853
298
95
2,459
1,036
156,720
181,451

Note: 2022.9 is not subject to audit.

47

Maruho Report 2023

Maruho Report 2023

48

1.Maruho’s Meaningof Existence

5. Financial/Company Information Financial Statements

Consolidated Statement of Changes in Equity

2.Value Creation
Prospects

3.Strategy for
Value Creation(Millions of yen)

Shareholders’ equity

Balance at beginning of period
Changes during period

2022. 92023. 912,665
5,123
279
120
–
(143)

6,219
5,068
244
65
(15)
(33)

1,799

Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity method
Loss (gain) on valuation of investment securities
Loss (gain) on sales and retirement of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in other current assets
Increase (decrease) in other current liabilities
Other, net

30
(47)
15
1,892
2,001
82
319
(1,317)
235
(332)
448
(1,592)

(56)
(32)
10
1,994
(2,166)
1(1,335)(5,578)
2,024
(478)
1,828
(2,897)

Subtotal

19,7794,864Interest and dividends received
Interest paid
Income taxes (paid) refund

47(14)(3,161)
16,65131(11)(6,617)(1,732)(3,037)(2,998)24(2,101)
(282)
300
497
(7,597)(5,717)(1,044)164(1,584)(346)–
500(8,029)

(393)
(133)
(62)
(589)

(392)
(133)
(90)
(617)

731

51

Net increase (decrease) in cash and cash equivalents

9,194(10,327)

Share capital

Capital surplus

Retainedearnings

Total
shareholders’equity382

4,251

136,624

141,258

Dividends of surplus

(133)

(133)

Profit attributable to owners of parent

7,972

7,972

Net changes in items other than shareholders’ equity–

Total changes during period

–

–

7,839

7,839

Balance at end of period

382

4,251

144,463

149,097

Accumulated other comprehensive income
Valuation
Deferred gains
difference onor losses onavailable-for
hedges-sale securities

Balance at beginning of period
Changes during period

038Foreigncurrencytranslation
adjustment

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets

479

518

1,080

142,857

Dividends of surplus

–

(133)

Profit attributable to owners of parent

–

7,972

623

29

1,173

1,826

(27)

Total changes during period

623

29

1,173

1,826

(27)

9,638

Balance at end of period

623

67

1,653

2,344

1,053

152,495(Millions of yen)2023.9

Share capital

Capital surplus

Retainedearnings

Total
shareholders’equity382

4,251

144,463

149,097

Dividends of surplus

(133)

(133)

Profit attributable to owners of parent

3,866

3,866

Net changes in items other than shareholders’ equity–

Total changes during period

–

–

3,732

3,732

Balance at end of period

382

4,251

148,196

152,830

Accumulated other comprehensive income
Valuation
Deferred gains
difference onor losses onavailable-for
hedges-sale securities

Balance at beginning of period
Changes during period

49

623

67

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Gain on change in equity
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement benefits for directors(and other officers)

Net cash provided by (used in) operating activities

Shareholders’ equity

Balance at beginning of period
Changes during period

5.Financial/Company Information

Consolidated Statement of Cash Flows(Millions of yen)2022.9Net changes in items other thanshareholders’ equity

4.Foundation for
Sustainable Growth

Foreigncurrencytranslation
adjustment

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets

1,653

2,344

1,053

152,495

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Decrease (increase) in time deposits
Purchase of investment securities
Purchase of shares of subsidiaries and associates
Proceeds from redemption of investment securities
Other, net
Net cash provided by (used in) investing activities

Cash flows from financing activities
Repayments of long-term borrowings
Dividends paid
Other, net
Net cash provided by (used in) financing activities

Effect of exchange rate change on cash and cash equivalents

Dividends of surplus

–

(133)

Cash and cash equivalents at beginning of period

59,547

68,741

Profit attributable to owners of parent

–

3,866

Cash and cash equivalents at end of period

68,741

58,414

Net changes in items other thanshareholders’ equity

(325)

27

806

508

(16)

491

Total changes during period

(325)

27

806

508

(16)

4,224

Balance at end of period

298

95

2,459

2,853

1,036

156,720

Maruho Report 2023

* 2022.9 is not subject to audit.

Maruho Report 2023

50

1.Maruho’s Meaningof Existence

5. Financial/Company Information Business Performance and Financial Analysis

Business performance
Outlook for the fiscal year ending
September 2024

Japan’s prescription drug market showed a gradual
recovery trend despite the impact of COVID-19 due
mainly to increases in sales of anticancer drugs andimmunosuppressive agents. In addition, the springs,
medical devices and components, and machineryindustries, which correspond to our other businesses,
were affected by soaring prices of materials and parts. As
a result, net sales for the fiscal year increased 0.8% fromthe previous fiscal year to 96,184 million yen. We
recorded operating profit of 6,227 million yen (down
62.1% year on year), ordinary profit of 6,967 million yen(down 53.7%), and profit attributable to owners ofparent of 3,866 million yen (down 51.5%).

With atopic dermatitis, acne, hyperhidrosis, and herpes
zoster (shingles) as our focus areas, we will compensate
for the decline in net sales caused by drug price revisions
and maintain our growth trajectory by efficiently
allocating resources and carefully responding to theunmet needs of individual patients. In the fiscal year
ending September 2024, we forecast net sales toincrease to 98,885 million yen (up 2.8% year on year).
This is because we plan to obtain additional indications
for pediatric use of the antibody drug Mitchga Syringes,
a treatment agent for pruritus associated with atopic
dermatitis, as well as its use for prurigo nodularis, expect
early market penetration, and achieve further growth innew businesses such as diagnostic drugs.

Blood-flow accelerative/skinmoisturizing agent Hirudoid

Drug price revisions

Human anti-human IL-31 receptor
A monoclonal antibody
Mitchga Syringes

Provision of newtreatment methods

Primary axillary hyperhidrosis
treatment agent Rapifort Wipes

Continuous
provision of newtreatment methods

Net sales
Operating profit

Total assets as of September 30, 2023 increased by
4,231 million yen from September 30, 2022 to 181,451
million yen. Current assets decreased by 2,584 million
yen, mainly due to a decrease in cash and deposits of
10,469 million yen and an increase in merchandise andfinished goods of 3,447 million yen. Fixed assets
increased by 6,816 million yen, mainly due to increases inconstruction in progress of 1,943 million yen and ininvestment securities of 2,426 million yen. Total liabilities
increased by 7 million yen year on year to 24,730 million
yen. This was due to an increase in current liabilities of
14 million yen and a decrease in non-current liabilities ofCurrent
liabilities

Change in
sales
Down

23,254

Net sales (Millions of yen)
78,76080,71780,84987,72486,241

86,292

24,723

2020

2021

2022

2023

Equityattributableto owners Net assets

177,219

51

Maruho Report 2023

Net sales (Millions of yen)
9,676

9,270

10,060

2021

2022

167million yen (158 million yen decrease in operating loss from the previous fiscal year)

2023(5) Retained
earnings(+3,732)(-16)

Total net assets / Total assets / Equity-to-asset ratio

541.5

530.1

457.9
125,932

123,348

97,325

84.1

77.1

21,254

19,54923,254

151,394
143,286 142,908

2019

2020

2021

2022

2023

85.5

156,720
152,495

120,217

2018

85.8

164,257 177,219 181,451

142,857

23,268110,478

2018

86.3

83.7

88,49983,09728,976
20,329Total assets (Millions of yen)

Total net assets (Millions of yen)
Equity-to-asset ratio (%)

590.5

115,439

1,036(+6,816)

Current liabilities (Millions of yen)

Current ratio (%)

305.4

10,060million yen (up 8.5% year on year)(+4,224)

Non-controllinginterests

58,103Current assets / Current liabilities / Current ratio

408.8

2020

(+4,241)

Non-current
assetsNon-controllinginterests

Current assets (Millions of yen)

2019

155,684 156,720(4) Investment
securities(+2,426)

business, and building mass production technology for stents,
standardization and unitization in the machinery business, andtaking on the challenge of reforming productivity.

2018

(-7)

Equityattributableto owners Net assets(3) Constructionin progress(+1,943)

1,053

8,155

(1) Decreased due toproactive investment(2) Increased due torelease of new products(3) Increased due toconstruction of new building(4) Increased due toproactive investment
and market valuation(5) Increased due to profit(-2,584)(+4,231)

151,442 152,495

51,286

8,482

(+7)

1,461

181,451

6,373million yen (down 61.9% year on year)

7,416

(+14)

Main reasons for change

24,730123,348

AssetsAssets2019

Liabilities

Non-current
liabilities

Current assets

125,932

2018

Current
liabilities

23,268(2) Merchandise andfinished goods(+3,447)

Current assets

86,292million yen (up 0.1% year on year)

With regard to the businesses of Maruho Hatsujyo Kogyo Co.,
Ltd., etc., net sales of the springs, medical devices andcomponents, and machinery businesses were 10,060 million
yen (up 8.5% from the previous fiscal year), achieving over
10,000 million yen for the first time, with operating loss of 167
million yen (operating loss of 325 million yen recorded in theprevious fiscal year).
In the fiscal year ending September 2024, we forecast thatnet sales will rise by 10,600 million yen (up 5.4% year on year).
This will result from winning more new orders in the springs
business, assembling medical devices in the medical devices

7 million yen. Total net assets increased by 4,224 million
yen compared to September 30, 2022 to 156,720 million
yen, mainly due to an increase in retained earnings of
3,732 million yen.
With both the current ratio and the equity-to-asset
ratio at a high level of 530.1% and 85.8%, respectively,
we maintain sufficient health in terms of both short-termand long-term solvency.

(1) Cash and deposits(-10,469)

1,469

Up

Up

Liabilities

Non-current
liabilities

Analysis of other businesses

Operating loss

5.Financial/Company Information

Fiscal year ended September 2023

Non-current
assets

Net sales

4.Foundation for
Sustainable Growth

Overview of Consolidated Balance Sheet (Millions of yen)
Fiscal year ended September 2022

Analysis of pharmaceutical business
Reason3.Strategy for
Value Creation

Financial position

Results in the fiscal year ended
September 2023

Product name

2.Value Creation
Prospects

127,825

2019

2020

2021

2022

2023

Maruho Report 2023

52

1.Maruho’s Meaningof Existence

5. Financial/Company Information Business Performance and Financial Analysis

Cash flows
Incidentally, the Maruho Group has been rated “A-”by Rating and Investment Information, Inc. (R&I), and theRating Outlook was changed from “Stable” to “Positive”
in September 2023. We have also established commitment
lines totaling 10 billion yen with financial institutions inJapan, making us prepared for liquidity support.

Overview of Consolidated Statement of Cash Flows
Fiscal year ended September 2022

Fiscal year ended September 2023

(Millions of yen)

(Millions of yen)

80,00060,000

Balance at
beginning 16,651
of period

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Investments

The balance of cash and cash equivalents as of
September 30, 2023 was 58,414 million yen (down
15.0% from September 30, 2022). Detailed changes ineach cash flow are presented in the graph below.
The Maruho Group’s demand for funds is mainly forthe purpose of investment in research and development,
as well as investments in tangible and intangible fixed
assets, such as construction of new manufacturing
facilities, enhancement of R&D functions, and acquisitionof sales rights. In addition to these investments, theMaruho Group maintains a level of cash and deposits
that can be used for certain strategic investment
opportunities.

Operatingactivities

2.Value Creation
Prospects

Investingactivities-7,59759,547

Balance at
Financing end of
periodactivities-589

68,74180,000

Balance at
beginning Operatingof period activities

68,74160,000-1,732

Investingactivities-8,029Financing
activities-617

Balance at
end ofperiod58,414

Investment decisions

Capital expenditure

Our approach to investments is to make well-balanced
investments for sustainable growth and aspire to
maximize net sales. For this reason, we regularly monitor
our financial position and promote operational efficiency
and the reduction of unnecessary operations, with theaim of acquiring funds that will lead to new investmentsin the future.
Opportunities to invest in startup companies are on
the rise, and we are gradually seeing results in the formof strengthening the early development pipeline,
reducing development costs and speeding up theprocess, and increasing the level of experience in R&D.
We make investment decisions based on an awarenessof whether the investment can generate stable cash andenable us to clear the management indicator of securingcore operating profit of 35% or more. On the other hand,since it is the responsibility of pharmaceutical companies
to build a system that can provide a high-quality andstable supply under any circumstances, we will continue toinvest in IoT and new technologies.

The Group is continuously carrying out capital
investments, focusing on the expansion ofpharmaceutical manufacturing facilities and theenhancement and strengthening of R&D functions.
Total capital expenditures for the fiscal year ended
September 30, 2023 amounted to 6,706 million yen. In
the pharmaceutical business, capital expenditures totaled
6,183 million yen.
The main investments were the acquisition of
manufacturing facilities and renovation of existingbuildings at the Hikone Plant, the acquisition oflaboratory equipment at the Kyoto R&D Center, therenovation of existing buildings, the introduction andmodification of software for the purpose of improving
internal work efficiency, and the construction of a newbuilding for Tateyama Pharmaceutical Factory Co., Ltd.
In other businesses, capital expenditures totaled 523
million yen. The main investments were the acquisition of
manufacturing facilities such as at Maruho Hatsujyo
Kogyo Co., Ltd.
Capital expenditure / Depreciation
Capital expenditure (Millions of yen)
12,00040,00040,00020,00020,0008,000

Depreciation (Millions of yen)

10,9407,431 7,318

6,533

5,997

6,937
0

4,000

0

Note: Effect of exchange rate change on cash and cash equivalents (731 million yen) is
included in Balance at end of period.

Cash flows used inoperating activities

Cash flows used ininvesting activities

Cash flows used infinancing activities

Cash flows used in operating
activities totaled 1,732 million yen,(net cash inflow of 16,651 million yen
in the previous fiscal year.) This wasdue to profit before income taxes of
6,219 million yen, which decreased
year-on-year due to proactive
investments, an increase ininventories in preparation for new
product launches and payment ofincome taxes.

Cash flows used in investing activities
increased 5.7% from the previous
fiscal year, to 8,029 million yen,mainly due to payment of 6,762
million yen for active capital
investment to purchase tangible andintangible fixed assets.

Cash flows used in financing activities
increased 4.6% from the previous
fiscal year, to 617 million yen.

Maruho Report 2023

6,706

5,123

5,068

3,531

Note: Effect of exchange rate change on cash and cash equivalents (51 million yen) is
included in Balance at end of period.
0

53

2,684

6,937

2018

2019

2020

2021

2022

2023

Maruho Report 2023

54

1.Maruho’s Meaningof Existence

5. Financial/Company Information Maruho Hatsujyo Kogyo Co., Ltd.

2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth

5.Financial/Company Information

Addressing customer needs while growing with
precision processing technologies
Kunihiro Iwase President

Maruho Hatsujyo Kogyo Co., Ltd.

Honing technologies and creating
business opportunities to growfurther into a value-creating company
Maruho Hatsujyo Kogyo and Maruho
Maruho Hatsujyo Kogyo Co., Ltd. (below, “Maruho
Hatsujyo Kogyo”) was established in 1952 as the springs
division of Maruho Shouten, the predecessor of MaruhoCo., Ltd. In the unstable economic environment afterWorld War II, Maruho Shouten entered the springs
business hoping to generate funds to sustain its
pharmaceutical business. Later, in 1954, the springs
business was spun off from Maruho Shouten as Maruho
Hatsujyo Kogyo. Today, Maruho Hatsujyo Kogyo is
growing into a global manufacturing company withstrengths in precision metal processing, centered on thesprings, machinery, and medical devices and components
businesses. Headquartered in Kyoto, Maruho Hatsujyo
Kogyo operates as a corporate group with two domestic
and seven overseas companies.
Maruho Hatsujyo Kogyo and Maruho havemaintained a close cooperative relationship for about 70
years. The two companies mainly collaborate in thedevelopment of medical devices, and they actively
engage in personnel exchanges.

Maruho Hatsujyo Kogyo Co., Ltd.

(As of Semptember 2023)

Establishment 1954
Number of
employees

494 (Consolidated) / 291 (Non-consolidated)

Capital93.6 million yen

Business

1. Manufacture and sales of various precision springs
2. Design, manufacture, and sales of various automatic
packaging machinery and labor-saving machinery
3. Development, manufacture, and sales of various
medical devices

Group companies
Japan

Kameoka Spring Co., Ltd. (Springs business)

Asia

Maruho Hatsujyo (Thailand) Co. Ltd. (Springs business, Thailand)
Maruho Hatsujyo Asia Pte. Ltd. (Springs business, Singapore)
Pt. Maruho Hatsujyo Batam (Springs business, Indonesia)

U.S.

Maruho Hatsujyo Innovations, Inc. (North American regional
headquarters)
Maruho Machinery Solutions, Inc. (Machinery business)
Maruho Relucent, Inc. (Medical devices and components
business, metal components)
Maruho Plastics Solutions, Inc. (Medical devices andcomponents business, resin components)

Initiatives in each business in the fiscal year ended September 2023
Business

Specific initiatives

Springs business•Expanded sales of domestic business: Created high added value businesses and expanded sales into growthmarkets•Grew businesses in Asia: Pursued sales and marketing localized for Asia, conducted production at an
optimum location, and expanded sales in ASEAN

Machinerybusiness•Strengthening core business: In addition to the pharmaceutical business, expanded sales to food, cosmetics,
and medical devices, etc.
•New businesses: Developed and marketed tube filling machine•North American Region: Developed and marketed Eagle LP (standard model)

Medical devices
and components
business•Strengthened core business: Expanded business dealings with new major customers•New businesses: Expanded the stents business•North American Region: Strengthened collaboration between operations in Japan and North America

At Maruho Hatsujyo Kogyo, we constantly consider better methods, incorporating
the skills of our artisans, and doing our best to deliver safe, secure, andhigh-quality products to meet the needs of our customers.
We believe that the workplace is where each and every employee can boost
their efforts and achievements and feel a sense of job satisfaction and growth. We
will continue to provide products with a sense of speed by making the most of thetechnology we have, from traditional manual labor to the use of the latest
equipment, while maintaining reliable technology and a mindset unafraid of change.

Assessment of the fiscal year ended
September 2023

Initiatives for the fiscal year ending
September 2024 and beyond

The fiscal year ended September 2023 marked the final
year of Maruho Hatsujyo Kogyo’s Third Medium-Term
Plan and 70th anniversary.
Based on our newly formulated Mission, we focusedon improving our ability to respond to the diverse needsof our customers. Under the banner of “horizontally
expanding our on-site capabilities,” we promote
manufacturing that transcends the boundaries between
businesses. We have formed a company-widecross-functional team called the Ameba Project forthemes that cannot be handled by a single department
alone. This team is responding to needs by bringing
together our technologies and know-how. At the sametime, we promoted the creation of a more inclusive work
environment through in-house internships so that
employees can take an interest in other businesses.
Going forward, we will continue to integrate and utilize
the resources within the Group to create new value andexpand our business.
In addition, with the aim of increasing production
capacity, we started construction of a new building at
the Kameoka Plant in June 2023.
In terms of business performance, the Maruho
Hatsujyo Kogyo Group achieved total net sales of 10,060
million yen (up 8.5% year on year), exceeding 10,000
million yen for the first time.

In the Fourth Medium-Term Plan, which will span thethree-year period from the fiscal year ending September
2024, we will further promote the “mobilization ofGroup strengths.” We have set the following as
challenges: improve profitability in global markets,
expand sales of core products, standardize design andmanufacturing processes, further develop our processing
technologies, and create new product businesses. With
our basic policy of “honing technologies and creating
business opportunities,” the five main themes are “digitalmarketing (expand sales using marketing automation),”“productivity reform,” “technological reform,” “humanresource development and work style reform,” and“global management development.”
We will conduct business based on our new
Corporate Philosophy announced in December 2022, andaim to achieve consolidated net sales of 12,500 million
yen in the fiscal year ending September 2026 globally.

Net sales of the Maruho Hatsujyo Kogyo Group(Millions of yen)

7,416

2018

55

Maruho Report 2023

Maruho Hatsujyo Kogyo Co., Ltd.

8,482

8,155

2019

2020

9,676

9,270

2021

2022

10,0602023

Sustainability initiatives
Since its founding, Maruho Hatsujyo Kogyo has always
been closely in tune with its customers and has contributed
to solving their problems through technologicaldevelopment that accurately captures their needs. In order
to continue to live up to the trust of society, we arepracticing management that aims
to contribute to sustainable growth
and the achievement of the SDGs
based on the 10 principles of theUnited Nations Global Compact.
In order to deepen employees’
understanding of our sustainability
initiatives, we have been issuing a
Sustainability Report geared toward
Maruho Hatsujyo Kogyo’s
employees since December 2022.
Sustainability Report
Maruho Report 2023

56

1.Maruho’s Meaningof Existence

5. Financial/Company Information

Major Maruho Group Companies
Red: Pharmaceutical business2.Value Creation
Prospects

3.Strategy for
Value Creation

4.Foundation for
Sustainable Growth(Germany)

Maruho Deutschland GmbH
Maruho Israel Innovation Fund GmbH & Co. KG
Biofrontera AG*

Purple : Other businesses (springs, medical devices and components, and machinery)Japan(U.S.)(Israel)Overseas

Maruho America Inc.
Maruho Medical, Inc.

Maruho Israel Innovation Labs LTD.
(Thailand)

Maruho Hatsujyo Innovations, Inc.
Maruho Machinery Solutions, Inc.
Maruho Relucent, Inc.
Maruho Plastics Solutions, Inc.

Maruho Hatsujyo (Thailand) Co., Ltd.
(Singapore)

Maruho Hatsujyo Asia Pte. Ltd.

Maruho Co., Ltd.
Research Development

Tateyama
Pharmaceutical
Factory Co., Ltd.

5.Financial/Company Information

Manufacturing(Indonesia)

Sales

PT. Maruho Hatsujyo Batam

Roman Industries
Co., Ltd.

Kose Maruho PharmaCo., Ltd.*

Maruho Hatsujyo Kogyo
Co., Ltd.

Maruho DeutschlandGmbH (Germany)

Maruho America Inc.

Maruho Medical, Inc.

(U.S.)(U.S.)

Manufacturing

Planning Development

Development

Development

Development

Development

Sales

Manufacturing

Manufacturing

Marketing

Sales

Sales

Springs business
Machinery business
Medical devices andcomponents business

Biofrontera AG (Germany)*

Maruho Israel Innovation
Fund GmbH & Co. KG (Germany)

Development

Investment

Sales

Maruho Israel Innovation
Labs LTD. (Israel)
Development support

Machinery business

Maruho Hatsujyo Innovations, Inc.

Medical devices andcomponents business

Management(U.S.)

Tateyama Pharmaceutical Factory Co., Ltd.

Maruho Hatsujyo Kogyo Co., Ltd.
Kameoka Spring Co., Ltd.

Springs business
Kose Maruho Pharma Co., Ltd.*
Roman Industries Co., Ltd.
Maruho Co., Ltd.

Kameoka
SpringCo., Ltd.
Manufacturing
Sales

Springs business

MaruhoHatsujyo(Thailand)Co., Ltd.
(Thailand)
Manufacturing
Sales

Machinery business

Medical devices and components business

MaruhoRelucent, Inc.

MaruhoHatsujo Asia
Pte. Ltd.

PT. Maruho
Hatsujyo
Batam

MaruhoMachinery
Solutions, Inc.

(Singapore)(Indonesia)(U.S.)

Sales

Manufacturing

Sales

Sales

(U.S.)

MaruhoPlastics
Solutions, Inc.
(U.S.)Development

Development

Manufacturing

Manufacturing

Sales

Sales

* Equity method affiliates

57

Maruho Report 2023

Maruho Report 2023

58