Integrated Report2023

For inquiries about this Report:
CSR Promotion Department
Suminoe Textile Co., Ltd.
11-20, Minami-Semba 3-Chome, Chuo-ku,
Osaka 542-8504, Japan
TEL: 06-6251-6817 FAX: 06-6251-6806
E-Mail: csr@sin.suminoe.co.jp
URL: https://suminoe.co.jp/en/

This publication uses
easy-to-read fonts
designed based on theUniversal Design (UD)concept.

Having marked the 140th
anniversary of its founding,the SUMINOE GROUP willchange for the better.

In 2023, the SUMINOE GROUP celebrated the 140th anniversary of its founding.
We strive to set a “new comfort standard” in harmony with the times and the earth to create
delightful lifestyles of the future. To this end, the Group will explore the following “4C” values.

Interior Fittings
Providing comfortable and functional
interior products

Take on challenges for new businessdevelopment based on our advanced
technological capabilities and extensive
customer base as an industry pioneer.

Create new value by maximizing
our unique technologies.

Curtains | rugs and mats | carpets | wallpaper
sliding paper doors | arts and crafts textiles | doncho(plush hand-woven carpets that separate a stage from theauditorium) | dantsu (hand-woven carpets and hooked rugs)

CreateChallenge

Automotive Textiles
Adding higher value to automotivetextiles
Ceiling materials | seat covering materials
car mats | floor carpets

SUMINOE“4C” Values

Traffic Facilities
Supplying a total line of interior materials
for public transportation facilities
Seat covering materials | seat cushion materials
carpets | floor signage film | curtains

Contribute

Customer

Functional Materials
Offering new functional products that arefriendly to human health and the environment
Fabric-coated heating products | deodorizing filters
floor materials for bathrooms
interior materials for aircraft

1SUMINOE GROUP Integrated Report 2023

Continue to pursue manufacturing that isfriendly to both people and the earth.

Identify new challenges for further
development, leveraging our ability tosincerely cater to customers and our foresight.

SUMINOE GROUP Integrated Report 2023

2

Group Philosophy

Editorial Policy

VISION —The future we aim for—To set a “new comfort standard” in harmony with the times
and the earth to create delightful lifestyles of the future.

Contents

The objective of publishing this Integrated Report is toGroup Philosophy ...................................................................... 3

inform a broad range of stakeholders of how the SUMINOE

Editorial Policy and Contents .................................................. 4

GROUP creates value in the medium and long term andSUMINOE GROUP in Numbers................................................ 5

what kind of initiatives the Group promotes to enhance its

Progress in Value Creation....................................................... 7

corporate value.
This report provides financial information, including

MISSION —Our mission to fulfill—management strategies to achieve sustainable growth as

Bring people- and society-friendly spaces to the world throughtechnology and ideas that closely support people's lives.

SUMINOE GROUP, and non-financial information on its

well as a business overview and the performance of thespecific sustainability and ESG initiatives. By disclosing suchinformation in an integrated manner, this report aims tohelp stakeholders deepen their understanding of the Group.

SPIRIT —Values we cherish (Company Motto)—

We pride ourselves as a pioneer in the interior industry and persist in a
spirit of cooperation, sincerity and determination.

Create new value by maximizing our unique technologies.

Customer
Identify new challenges for further development,leveraging our ability to sincerely cater to customers and our foresight.

Contribute
Continue to pursue manufacturing that is friendly to both people and the earth.

Code of Conduct
1. We comply with all laws and ethical business standards, and conduct corporate
activities in an impartial and ethically sound manner.

3

Strategies by Segment: Automotive Textiles andTraffic Facilities (Automotive Textiles)................................ 23

Ministry of Economy, Trade and Industry (METI) of Japan

Strategies by Segment: Automotive Textiles andTraffic Facilities (Traffic Facilities)......................................... 25
Strategies by Segment: Functional Materials ................... 27

Scope of the Report

Topics .......................................................................................... 29

Suminoe Textile Co., Ltd. and its consolidated subsidiaries in

Research and Development Strategies .............................. 31

Japan and overseas

Feature: Response to the Transformation in the
Automotive Industry ............................................................... 33

However, the scope varies according to the items reported.

Message from the Director in Charge of Finance............ 35
Period CoveredFiscal year 2023 (From June 2022 to May 2023)(Some activities undertaken outside the above period are

ESG Initiatives in Line with the Medium- toLong-term Management Targets

included.)

Sustainability and ESG Initiatives ......................................... 37

Information Disclosure System

Initiatives to Address Key Sustainability Issues toAchieve Medium- to Long-term Management
Targets ........................................................................................ 39

Financial information

Non-financial information

Integrated Report (book and website)• “Investor Relations”
section of the website• Flash Report of FinancialResults• Business Report(Japanese only)• Sustainability section ofthe website• Corporate Governance
Report (Japanese only)

Securities Report (Japanese only)

Disclaimer about Forward-Looking Statements

3. We treat all employees of the Company fairly, act with due respect for their individual
personalities, and place high importance on their health and safety.

are included in this Report, those which are not historicalAmong all the current plans, strategies, and judgments thatfacts represent our forecasts for future performances, etc.

4. We place high priority on maintaining good relationships with all our stakeholders.

These are on the basis of assumptions and judgments based

5. We make proactive contributions to the community, as expected of a good corporate
citizen.

on information currently available for the SUMINOE GROUPSUMINOE GROUP Integrated Report 2023

Toward Identifying the SUMINOE GROUP’s
Materiality (Key Issues) ........................................................... 17

Guidance for Collaborative Value Creation, published by the

2. We contribute to the advancement of the community through the production and saleof high-quality products.

6. We take very seriously the impact of our business activities on the global environment,
and contribute to environmental preservation initiatives.

Value Creation Model............................................................. 15

Strategies by Segment: Interior Fittings............................. 21

VALUE —Basic guidelines for business activities— SUMINOE “4C” Values

CreateValue Creation and Growth Strategies in Line with
the Medium- to Long-term Management Targets

ISO 26000 Guidance on Social Responsibilityby the International Integrated Reporting Council (IIRC)

Take on challenges for new business development based on our advanced technologicalcapabilities and extensive customer base as an industry pioneer.

Medium- to Long-term Management Targets................. 13

Segment Information ............................................................. 19

Referenced Guidelines

International Integrated Reporting Framework, published

Challenge

Message from the President ................................................... 9and may thus contain risks and uncertain factors. Please beadvised, therefore, that the Group’s business results that will
be publicly announced in the future may differ significantly
from the forecasts due to various factors.

Environment .............................................................................. 41
Social ........................................................................................... 47
Governance ............................................................................... 53
Round-Table Discussion among Outside Directors ........ 61
Messages from Outside Corporate Auditors .................... 64
Board of Directors and Corporate Auditors...................... 65
Eleven-year Consolidated Financial Summary ................. 67
Corporate Summary and Investor Relations..................... 69
Supplementary Note
This Reports uses the “SUMINOE GROUP” when referring to ourcorporate group, in accord with its new Group Philosophy and theunited Group logo, both of which were announced in June 2023.
However, in some portions related to documents published inJune 2023 and earlier, the “Suminoe Textile Group” is used asbefore.
This is an English translation of the release issued in Japanese.
The figures for these financial statements are prepared inaccordance with the accounting principles based on Japanese law.

SUMINOE GROUP Integrated Report 2023

4

SUMINOE GROUP in Numbers* Average figures of Group companies only in Japan

Number of Employees (As of May 31, 2023)

FoundedCapita (As of May 31, 2023)

1883

9,554

Consolidated Group
companies:

million yen

Net sales (Fiscal year 2023)

94,828Interior Fittings

million yen 36,598

Automotive Textiles and Traffic Facilities

54,314

million yen

Functional Materials

3,550

365

2,779

70s

60s

11.7%

0.9%

million yen

50s

MaleFemale(Million yen)

5,000

(%)
3.5

3.2

81,713

4,000

2.5

3,118

3,000

40,00020,000

1.4

1.3
1,557

1,000
0

2021

2022

2023

2019

2020

1.5

1,294 1.0

1,049
0.1

0

2020

4,000

3.0

3,000

2,956

2021

1.4

2,000

1,323
1,000

110

2022

02023

2019

(%)

(Million yen)

(Million yen)

100,000

25,00080,000750

84,801

88,1510.3

0.3

40,000

320

281

142

0.25

2020

2021

Equity / Equity ratio2022■Equity

40,00030,58832.5
27,99833.5

28,04433.428,30435,271

32,95633,44834,113

(%)

40

2.0

1.5

20

1.0

2021

10,00002021

SUMINOE GROUP Integrated Report 2023

14,939

2022

2022

2023

00

40
20

0.6

0.496
58.5

0.5

51.0

22.4
36.1
2019

0.358
45.1

18.8

18.7

16.6

32.3

26.4

23.9

24.0

2020

2021

2022

2023

0.2
0.1
0

Ratio of female employees*(Times)

(%)

7.0

35

15,923

0.4
0.3

40.5

33.9
9.9

0

33.2
5.0

32.0

32.0

31.8

2020

2021

2022

31.115,621

2019

2023

2020

2021

2022

■Depreciation

1.5

3.0

30

00

2023

■Capital investment

1.4

1.1

1,000

2020

2021

2022

2023

■Female

12
9

2,677
1,769

2,030

1,979

2,441
1,915

2,229

1,617

■Male

8

60

2019

2020

2021

2022

2023

13

13

12

11

330

2019

2023

15

3,516

3,000

0.5

2019

Number of employees who took childcare leave*(Number of employees)

4,636

4,000

1.0

0.5

12,861

0.566

0.557

6.0
5.2

Depreciation / Capital investment

28,861

10

6.2

5,000

32.7
30

●Inventory turnover(Million yen)

20,0002020

15,6660.7

0.593

10,000

2,000

2019

6.1

●Basic unit(t/¥1 million)

80

2023

02020

Return on equity (ROE)(%)

1.00.52022■Overseas

5000

2019

●Equity ratio

32,58202023(Million yen)

34.8

15,00020,0000

2019

6.3

0.50

409

0.2

2021

20,00060,0000.5

030,00083,6691,575

950■Inventories■Total assets

0.75

250

50,000■Net assets(1,000 t)
100

1.5

1.2

Inventories / Inventory turnover

1.00

86,272

2020■Domestic

3.0

0

1,000

87,975

1.51,211* Group companies in Japan only

600(Million yen)

467

19.9%

2.0

1.7

0.5

Net assets / Total assets

0.5

6-10 years

19.5%

Reduction of CO2 emissions in business activities

(%)

2.5

Profit attributable to owners of parent / Ratio of profit attributable to ownersof parent to net sales ■Profit ●Ratio of profit attributable to owners of parent

500years

11-20 years●Ratio of ordinary income(Million yen)

2.0

1.7

2,000

2019

■Ordinary income

3.0

60,0005●Operating margin(Million yen)

94,82879,702

15.3

21-30 years

15.6%
21.1%

Ordinary income / Ratio of ordinary income to net sales■Operating income

80,000

Averagelength of service*30s

Non-financial Data (for each FY ended May 31)

Net sales
91,5120-5 years

28.2%

million yen

Operating income / Operating margin

98,617

14.8%

40s

34.1%

2.0%

31-40 years

16.7%

years oldOverseas 1,161

41-49 years

0.8% 20s
14.8%

45.7

Financial Data (for each FY ended May 31)

100,000

10s

Average age*

In Japan 1,618

Othermillion yen

62% 38%002019

2020

12021

2022

22023

SUMINOE GROUP Integrated Report 2023

6Progress in Value CreationSuminoe Textile was founded by rice dealer Denshichi Murata, who opened the Murata Factory in 1883 in Sumiyoshi
Village, Higashinari-gun, Osaka Prefecture (now Sumiyoshi Ward, Osaka City).
This small factory in a private household was receiving orders for interiors for railway cars and ships, and even for
the Imperial Diet Building, heralding the dawn of Japan’s carpet industry.

1880s

1900s

1930s

1940s

Contribution to Japan’s Modernization
Industrial Revolutionin Japan

Taisho Democracy

1970s

Popularizing Interior Fabricsin Common Households

1990s

2000s

2020s

Offering One-of-a-Kind Products to Customers around the WorldWorld Depression
World War II

High economic growth
periodPeriod of increasing globalization
Bubble economy
Manifestation of environmental
problems

Collapse of the bubble
economyIT revolution

A declining birthrate
and aging population

Novel coronavirus(COVID-19) pandemic

1930
Suminoe Textile Co., Ltd.
established.
1937
Kawachi Factory established,
where woolen spinning
begins.

1949
Shares listed on the Tokyo,
Osaka, and Kyoto stock
exchanges.
1954
First to introduce to Japan atufting carpet machine fromthe U.S.

1971
Nara Factory (now Nara
Factory of Suminoe TechnoCo., Ltd.) established, andSumiyoshi Factory closed.
1987
Shiga Office established.

1994
T.C.H. Suminoe. Co., Ltd., theCompany’s first overseas
base, established as a joint
venture in Thailand.
1998
Suminoe Textile Group“SUMINOE Environmental
Declaration” and “KKR+A”
announced.

2003
Suminoe Textile of America
Corporation established in theU.S.
2005
SPM Automotive Textile Co.,
Ltd. established as a joint
venture in China.
2009
Suminoe Teijin Techno Co., Ltd.
established as a joint venture.
2013
Suminoe Techno Co., Ltd. established.

2020
Shares of CPO Co., Ltd. acquired.
2022
Shares of PRETERIOR-TEXTILE Inc.
acquired
Shares of Seki Textile Co., Ltd.
acquired2023
Group Philosophy as well as theGroup’s unified logo and tagline
announced.

History of the SUMINOE GROUP
1883
Murata Factory founded.
Manufacture of handwoven
carpets begins in Sumiyoshi,Osaka.
1892
The Company’s first patentobtained for carpet
weaving, “Yamato-ori.”

1903
Sumiyoshi Factory withfull-scale weaving facilities
established.
1913
Suminoe Textile Joint-Stock
Company established.
1916
Manufacture of carpets
using power looms begins.

Value Offered by the Group

1891

Winning acclaim for its manufacturing techniques,
the Murata Factory supplied Dantsu hand-woven
carpets to the Imperial Diet Building. We havecontinued to deliver the “red carpet” and otherinterior textiles for the present-day Diet Building.

● Mass production realized byusing power looms

The Company imported technology andpower looms from Germany and the U.K.,
becoming the first in Japan to manufacturemachine-woven moquette.

1899● Manufacture of Japan’s firsthand-woven moquette

The Company received an order to manufacture
the seat covers used in trains of Japan National
Railways, which had conventionally used
imported seat covers. We succeeded inproducing and supplying hand-woven moquetteas a seat covering for the first time in Japan.

SUMINOE GROUP Integrated Report 2023

1931

● Helping widespread use ofcarpets in general households

Although carpets had usually been custom-made,high-end products, the Company released aready-made carpet called “Tafton,” which wasaffordably priced for ordinary households.

● Construction of a newpollution-free carpet factory

When pollution problems attracted muchattention, our Nara Factory was newlyconstructed. The factory was equipped witheffluent treatment facilities in order to prevent
leakage of hazardous substances discharged
with wastewater.

● Development of a continuous fiber
made from recycled polyester

スミトロン® (SUMITRON), which uses polyester
chips recycled from PET bottles as raw
material by 50% or more, contributes toresource-saving.

1980

1968

● Participating in the automotive
industry in its infancy
Suminoe Textile supplied carpets and seatcovering materials to automobiles assembled
and manufactured in Japan for the U.S.
automakers, Ford Motor Company andGeneral Motors.

2011

1989

1957

● Winning acclaim for Dantsu
carpet-weaving techniques

71971

1913

● Producing a 836 m carpet by hand
2The Homeiden Imperial Palace building is a banquet
hall, the largest of all the Imperial Palace halls. Suminoe
Textile provided for this hall a hand-woven dantsu
carpet of 836 m². Its manufacturing process required
approximately 10,000 weavers, who spent as long as
nine months to complete this masterpiece carpet.

● Production of Japan’s firstcarpet tiles

Suminoe Textile produced carpet tiles that can
express mosaic patterns. It is easy to replace thedamaged carpet tiles with new ones. Withthese advantages, these carpet tiles attracted
much attention as an innovative product.

● Development of recycled carpet tiles

We established a framework for repeating therecycling cycle involving the same products for carpet
tiles. These recycled carpet tiles became the first to becertified as Eco Mark products under new standards.

1998● Development of around-the-clock
deodorizing treatment technology

Suminoe Textile developedトリプルフレッシュ®
(TRIPLE FRESH) treatment technology, which candeodorize and decompose substances that cause
sick house syndrome and other malodorous
substances that are generated daily in ourenvironment on a 24-hour basis. This technology
contributes to protection of people’s health.

The past, the present andthe future● Passing on traditional techniques
to future generations
While promoting business reforms, theSUMINOE GROUP maintains and cultivates
hand-weaving techniques handed down inJapan’s historical industry, thereby making
cultural contribution.

SUMINOE GROUP Integrated Report 20238