TOP MESSAGE

Achieving a Major
Transformation toRealize a Sustainable,
Better Society andWell-being Lives
Yoshinari Kitajima
President

Promoting the New Medium-term Management Plan inaccordance with the DNP Group's Basic Management Policy
The DNP Groupʼs Corporate Philosophy is “ The DNP Group
connects individuals and society, and provides new value”
and we strive to realize a sustainable, better society and wellbeing lives. DNP focuses on solving social issues, creating
new value that meets peopleʼs expectations and making thisvalue continually exist as “basics” that are indispensable inpeopleʼs daily lives. We broadly express this aspiration in ourBrand Statement of “Creating future standards.”
In 2015, we formulated the DNP Group Vision thatincorporates this Corporate Philosophy and our Brand
Statement. Subsequently, in February 2023 we announced
the DNP Groupʼs Basic Management Policy to achieve further
growth amid dramatic changes in the environment, societyand economy. In announcing this policy, DNP once again
declared both inside and outside the company that it will
undertake business activities to create a “better future” witha view toward the long term.
In realizing this Vision, DNP will create sustained businessvalue and shareholder value through specific initiatives basedon its Business Strategy, Financial Strategy and Non-financial
Strategy and as key performance indicators aims to attain
ROE of 10%, and “expedite achieving a PBR (price-to-bookratio) of more than 1.0X.”

Among our long-term value creation initiatives, welaunched a three-year Medium-term Management Plancovering the three-year period from fiscal 2023 to fiscal
2025 as the first step toward further transformation.
In response to the Basic Management Policy, as theBusiness Strategy of this Medium-term Management Plan,
DNP will make concentrated investment of 260 billion yen or
more over the five years to fiscal 2027 in focus businessareas (see pages 11 and 21-24) and will continue totransform its business portfolio to make its revenue structure
more robust.
Regarding its Financial Strategy, DNP plans to reduce
strategic shareholdings to less than 10% of net assets overthe next five years while acquiring a total of 300 billion yen intreasury shares with the aim of improving capital efficiency.
In its Non-Financial Strategy, DNP will mainly focus on
expanding investment in people based on its Human Capital
Policy, enhancing intellectual capital that leverages DNPʼsunique strengths and external partnerships and promoting
environmental initiatives toward realizing a decarbonizedsociety, a recycling-oriented society and a society in harmonywith nature.

Outline of measures in the New Medium-term Management Plan
Initiatives Aimed at Realization of the Vision–Accelerating initiatives for “Creating future standards”–BusinessStrategy

FinancialStrategy

Non-financial
Strategy• Realize growth through concentrated investment of 260 billion
yen or more (over the 5 years from FY2023 to FY2027) in focus
business areas• Transform business portfolio including restructured businesses

DNP Groupʼs vision forrevenue and capital structure• Reduce strategic shareholdings to less than 10% of net assets• Plan to acquire treasury shares valued at 300 billion yen to
improve capital efficiency(5 years from FY2023 to FY2027)（ Record operating income:120.6 billion yen）

• Expand investment in people based on Human Capital Policy• Enhance intellectual capital utilizing DNP ʼs unique strengths andexternal partnerships• Contribute to the realization of a decarbonized society, arecycling-oriented society and a society in harmony with nature

ROE

Operating income

130 billion yen or more

Equity capital1 trillion yen
10%

By implementing the above initiatives and also expanding disclosure especially on focus business areas,

we will expedite achieving a PBR of more than 1.0X.

*See pages 2-3 of the DNP Group Vision and DNP Group Basic Management Policy.

8DNP Integrated Report 2023

9TOP MESSAGE
P&I Innovations

to 1 trillion yen to continually attain ROE of 10％ or higher.
Additionally, as milestones toward reaching these targets,
DNP aims to increase operating income to 67 billion yen in
fiscal 2023, to 75 billion yen in fiscal 2024, and to 85 billion
yen in fiscal 2025, the final fiscal year of the three-year plan.

By promoting these three strategies, we will shape therevenue and capital structure envisioned by the DNP Group.
As its long-term targets, DNP aims to increase operating
income to 130 billion yen or more, thereby surpassing its
record operating income of 120.6 billion yen achieved infiscal 2006, while reducing equity capital from 1.1 trillion yen

Informationsociety
A society where realand digital seamlessly
connect, with robotics
and AI blending inManagement targets
Business Strategy• Investment of 260 billion yen or more in focus business areas(5 years from FY2023 to FY2027)• Medium- to long-term business portfolio management

FY2022

OperatingincomeFY2023(ended Mar. 2025)(ended Mar. 2024)

resulttarget

target61.26775

billion yen

FY2025

FY2024(ended Mar. 2023)

billion yen

DNP Groupʼs vision
for revenue andcapital structure(ended Mar. 2026)

target85

billion yen

130billion yenor more• Control of equity capital conscious of capital efficiency

1.1

1trillion yen

trillion yen
Achieve 8 % or more including asset sales

Sustained at 10 % or more

Strengthening and promoting Business Strategy–Creation of new value for a better future–
DNP believes that a healthy society and economy as well as
comfortable and well-being lives are only possible on asustainable earth. For this reason, DNP will take a long-term
perspective and accurately identify and appropriately respondto social issues and megatrends such as the informationsociety; population problems; the imbalance of supply anddemand of resources, electricity, water and food; and climatechange. Concurrently, DNP is promoting initiatives to turnrisks into business opportunities.
In recent years, DNP has been affected by rising costs for
raw materials and energy due to such factors as theemergence of geopolitical risk and the instability of global
supply chains. Meanwhile, social and economic activities arerecovering from the COVID-19 pandemic while peopleʼsworkstyles and lifestyles that changed profoundly havebecome firmly established in new formats. Digitaltransformation (DX) is also advancing and there are
increasing opportunities for DNP to synergize its uniquehybrid strengths such as physical and virtual realities, digital
and analog technologies, and manufacturing and services.
In particular, from fiscal 2022 we will strengthen theactivities of the Sustainability Committee, for which I serve as
chairperson, and work to adequately ascertain, analyze andmanage risks as variable factors. This committee collaborates
10Contributing to asustainable society
where people can live
safe, secure andhealthy lives

Climate change
World continuing tomove toward preventionof global warming anddecarbonization

Well-being
Enriched lifestyle

Semiconductors
Mobility andindustrial
high-performancematerials
Content & XR
communication

Medical &healthcare

Sustainability
Realizing a sustainable,
better society–Supporting value creation by strengthening the management foundation–

Implement first round of acquisition of treasury shares valued at 100
billion yen, which is the highest amount on record

7.9 %DNPʼs core valuesdeveloped throughprinting

The balance of supply anddemand of resources,
electricity, water and food issignificantly affected byclimate change, the population
problem and advancement of
an information society

Digitalinterfaces

Strengthening and promoting Financial Strategy and Non-financial Strategy• Plan to acquire around 300 billion yen in treasury shares(5 years from FY2023 to FY2027)

ROE

While the population ofJapan decreases andglobal population
increases, the birthrate
is decreasing andsociety is aging
worldwide

Printing &Information

Imbalance of supply
and demand ofresources, electricity,water and foodbillion yen

Financial Strategy

EquitycapitalPopulation problem

Securely andseamlessly connect
real and digital,
contributing to theevolution of an
information society

Focus business areas

with the Corporate Ethics Committee and the BCM Promotion
Committee to manage company-wide risks under medium-tolong-term corporate activities that emphasize theenvironment, society and governance (ESG). We regard thesevariable factors as major opportunities for DNP to expand its
business as well as to curb negative impacts. In an age
where abrupt changes are becoming the norm, it isimperative that we ourselves take the lead in reorienting theenvironment, society and the economy toward a better
direction rather than reacting to individual changes after
these occur. Through our business activities, we havecontinuously supported communication between people andnurtured culture and we believe that we can also transformthese changes into major business opportunities.
The DNP Group will leverage its strengths in Printing &Information that it has cultivated to the present, deepen
collaboration with its numerous partners and focus on
businesses linked to the resolution of social issues andmegatrends. By promoting P&I Innovations as set forth in ourBusiness Vision and implementing a variety of measures
based on the Business Strategy, DNP will take on thechallenge of realizing a sustainable society where people canlive with peace of mind, safety, health and well-being
lifestyles.

Strengthening the management foundation that supports ourbusiness activities is also another important management
theme. Under our new three-year Medium-term Management
Plan, by strengthening and promoting our Financial Strategyand Non-financial Strategy, DNP will expand its financial
capital as well as non-financial capital that includes humancapital, intellectual capital, manufactured capital, naturalcapital and social/relationship capital and invest in a varietyof business activities.
The DNP Groupʼs greatest strength in creating new value
is the existence of each and every employee. All employees
both in Japan and overseas are valuable human resources
and serve as the driving force for our sustainable growth as acompany. In recognition of this, we aim to increase “humancreativity (added value productivity)” globally based on theHuman Capital Policy to clearly connect investment in people
to the enhancement of corporate value.
Additionally, we are working to enhance intellectual
capital utilizing DNPʼs unique strengths as well as its external
partnerships that encompass creating new businesses,

fortifying technological strengths and undertaking businessglobally. Besides continuing to invest in research anddevelopment on a scale of 30 billion yen annually, DNP willbuild and strengthen its data management infrastructure as
an internal system.
Regarding environmental issues, for which solutions areurgently needed around the world, we will work on the dual
imperatives of value creation through business activities andstrengthening management foundations. Alongsidecontributing to a decarbonized society through products andservices, we will promote efficient resource reuse and minimize
the impact on biodiversity throughout the entire supply chain.
The DNP Group has a corporate culture of continuously
taking on challenges. In the future as well, we will continue totake on the challenge of realizing a better future from along-term perspective. To do so, I would like to deepen
TAIWA (dialogue) with numerous stakeholders, including
shareholders. Going forward, I ask for your further support as
we work to achieve our objectives.

DNP Integrated Report 202311