Sunstar
Group Report
2023

January - December 2022

Our vision of well-being
and ESG-driven management
Sunstar Group Representative

Yoshihiro Kaneda

In 2022, while the business environment underwent rapid changes due to conflicts in various
parts of the world and soaring raw material prices, there were nevertheless positive signs ofManagement
Message and Vision

economic and social activities moving toward normalization after the COVID-19 pandemic.
Additionally, it was a year in which there was renewed recognition that the rapid increase inCO2 emissions, due to the development of the global economy, is causing global warming andenvironmental destruction, as well as affecting people's health.
Sunstar has set a long-term vision for the year 2032, the centennial of its founding. We will
support general health through oral health, create businesses offering support for healthy andcomfortable living and mobility spaces, and conduct sound management practices respecting
the environment and society. Through these efforts, we aim to become a company with a highsocial value. In the process, we must remember that people's healthy and comfortable lives areintegral to the health of the planet.
Sunstar is strong in developing businesses such as in oral care, health foods, cosmetics,
indoor air quality improvement, adhesives, sealants, and metal parts on a global scale. We also
have colleagues around the world with diverse cultures and values who are working together
toward the same goal. At an online event in 2022 to commemorate the 90th anniversary of
Sunstar's founding, employees from around the world shared their aspirations toward thecompany's centennial anniversary. From their messages, I strongly felt that if Sunstar
employees around the world unite their efforts, we can contribute to the sustainability ofhuman society and the planet by creating a healthy and enriched society for people andreducing environmental impact.
Going toward the centennial of Sunstar, we will pursue "well-being & ESG (Environmental,
Social, and Governance) driven management"— that is, the creation of new businesses andsound business operations that contribute to the well-being of people and the planet — bylistening to the voices of Sunstar’s stakeholders and leveraging the power of our employees.

SUNSTAR Group Report 2023 I 01

Sunstar's ESG-driven management contributes to the well-being

Sunstar Group Topics 2022

of people around the world as well as the planet

Donation of oral care products to support
the health of people around the world

Sunstar's well-being and ESG-driven management

Creating
opportunities

E ( Environment )G ( Governance )S ( Society )Businesses contributing to the well-being of people around the world as well as the planet
・Products and businesses that solve environmental issues

・Creating lifestyle habits that support health and beauty

・M&A

・Low-environmental-impact manufacturing processes

・Improving indoor air quality

・Investment strategy

・Improvement of logistics efficiency

・Enhancing the comfort and safety of buildings and vehicles

・Fundraising・Reduction of packing materials

・Supporting the health and wellness of local communities

・Fund management

More than 80,000 products, including toothbrushes, toothpaste,
and dental rinses, were donated through the Polish Red Cross
Society in Warsaw as emergency humanitarian aid to those who arein Ukraine and who have evacuated to its neighboring countries. We
also conducted activities to raise awareness of the importance oforal care in maintaining general health during times of emergency.
In addition, in support of Lebanon, where a major explosion
occurred in the port of Beirut in 2020, we delivered more than
120,000 toothbrushes to local elementary schools, kindergartens,
pediatric cancer facilities, medical universities, and medical
institutions to provide guidance on oral hygiene.

Controlling risks

Contributing
to SDGs
・Reduction of CO 2 emissions

・Product quality control

・Financial soundness

・Low-environmental-impact raw materials

・Customer relations

・Tax transparency

・Resource recycling

・Respect for the human rights of employees and business partners

・Corporate governance integrity

・Waste reduction

・Enhancement of employee engagement and motivation

・Risk management

・Prevention of environmental pollution

・Enhancement of employee well-being and productivity

・Compliance

・Biodiversity conservation

・Contribution to local communities

Product donations to acknowledge
medical professionals for their efforts
in the COVID-19 pandemic

Making mouths, bodies, air environments,and living and mobility spaces healthierand more comfortable
The Sunstar Group aims at contributing to the well-being ofpeople around the world by developing businesses that makemouths, bodies, air environments, and living and mobility
spaces healthier and more comfortable. It does so through its
products and services in oral care, beauty care, health foods,
household products, indoor air quality improvement, adhesives
and sealants and metal parts, and by integrating thesedifferent properties. We also strive to reduce the environmental
impact of our products, packaging, and business operations.

Motorcycle& Automobile Parts

Mobility
Indoor Air Quality
Improvement

Health Care

Body
Mouth

Our Shanghai office in China donated approximately 9,000 bottles
of GUM mouthwash to more than 10 medical institutions. In Japan,
we donated 65,000 bottles of VO5 Hairspray to medical institutions,which reduces hair touching and keeps hands clean due to its highhair-holding power. Through these donations, we expressed our
gratitude to those working in the medical field.

Adhesives& Sealants

Living Space

Beauty Care

Oral Care

SUNSTAR Group Report 2023 I 02

Future Creation 2022

Future Creation 1
Make the habit of good oral care for healthy living;Global collaboration begins
to create new services using IT
In order for people around the world to enjoy healthy and joyful lives, they must develop
healthy lifestyle habits. Sunstar has been making various efforts to make this possible.
Since last year, members with their respective strengths described below have cometogether to engage in global discussions and collaboration to drive the creation of healthy
oral habits through the use of new technologies.

Leveraging Playbrush's app
development capabilities

Applying oral care productdevelopment capabilities

Utilization of AI
and image recognition technology

Playbrush is a venture company from UCL, Universityof London, which joined the Sunstar Group in 2021.
The company has sold more than 300,000 IoT smart
toothbrushes worldwide, which are linked tosmartphone apps to encourage proper tooth brushinghabits through gamification techniques. In Germany,
Austria, and the UK, the company is providing a
subscription service that delivers replacement
brushes regularly.

Sunstar offers a variety of oral care products tailoredt o cu s t o me r n e e d s, in clu din g t h e I oT sm a r t
toothbrush “Gum Play” in Japan. Although we have
now discontinued the product, we are exploring new
approaches to tooth brushing habits throughcollaboration with Playbrush.

Utilizing a database of oral images analyzed by dental
experts and AI technology, we have commercialized a
web service in Japan that recommends toothbrushes andinterdental cleaning tools based on mouth photos andanswers to simple questions. Also, based on research on
facial expressions and appearance, we have developed afacial impression analysis application using AI technology.
The service is offered at facial treatment salons to guidecustomers to the impression they want to achieve basedon the analysis results of their facial photos.

SUNSTAR Group Report 2023 I 03

Leveraging dental treatment
and dental health education
expertise
The dentists and dental hygienists who belong to theSunstar Foundation provide dental treatment, dental
checkups, and dental health education for companies
and schools. Among these services, the foundation
offers the " Mouth Care 30 Days Trial," a program
encouraging the building of a healthy oral careroutine, and online dental health guidance.

Future Creation 2022

Future Creation 2
Contributing to the decarbonization of the automotive industry;Supporting weight reduction, electrification,and comfort improvement with adhesive technology
The automotive industry is accelerating decarbonization and electrification to achieve the world's goalof carbon neutrality (virtually zero CO2 emissions) by 2050 to reduce global warming. In response,
Sunstar aims to contribute to the evolution of automobiles at the shift towards electrification in theindustry and the reduction of CO2 emissions by providing new adhesives products that decrease theweight of car bodies while maintaining their rigidity and quietness.
＊for illustrative purposes

Structural adhesivesthat contribute to vehicle weight
reduction and improved
ride comfort
We provide automakers with automotive adhesivesthat support the weld bonding method, a method thatcombines spot welding and adhesion to enhancevehicle body rigidity and weight reduction. Amongthem, a "damping adhesive" jointly developed with
Mazda reduces vehicle body vibration noise andcontributes to improved vehicle ride comfort andquietness.

Coating material for battery caseswith low environmental
impact production

Adhesives for in-vehicle cameras
for automated driving
and in-vehicle displays

Various new adhesives are increasingly adopted inline with the electrification of automobiles, such as
FIPG (Foamed-In-Place Gasket) for waterproofing ofrechargeable battery cases of electric vehicles,
urethane adhesives, and noise-insulating sheets
fo r t ire s . S un s t a r 's F I P G s a ls o e n sure s l o w
environmental impact as they can be applied at low
temperatures and in short time without wasting raw
materials in the manufacturing process.

Adoption of shock absorption, waterproofing, andheat dissipation materials for in-vehicle cameras
used in automated driving and adhesives forlarger- and narrower-framed in-vehicle displays
is expanding.

Accelerating efforts
to reduce CO2 emissions
in the adhesive
manufacturing process
To r e d u c e C O 2 e mi s s i o n s in t h e p r o d u c t i o nof adhesives to be supplied to automobile
manufacturers, we are developing processes thatuse less energy to coat and cure them, adopting
renewable electricity for power procurement at
our plants, and installing solar power panels.

Adhesive for damping＊for illustrative purposes

SUNSTAR Group Report 2023 I 04

Group Business Performance 2022
The net sales of the Sunstar Group in 2022 amounted to 1,103 million Swiss Francs (CHF), down 5%compared to the previous year, strongly influenced by both macro-economic factors and the Japanese Yenhitting its lowest level vs CHF. Sales in local currency increased in the Americas and Europe from theprevious year, decreased in Asia, and remained stable in Japan, resulting in an overall group organic sales

Net Sales

Operating Income

1,500

1,307
1,250

1,123 1,159 1,103

750
500
250

12/2019

Stockholder Equity & Ratio
900

120

1,000

0

increase of 1.4% over the previous year. Operating income decreased 50% to CHF 46 million compared
to previous year, mainly due to the impact of higher raw material and freight costs.
The financial information in this report complies with International Financial Reporting Standards (IFRS).

12/2020

12/20211,1M03- CHF

12/2022 ［month/year］

100

99

92

80
60
40
20
0

12/2019

12/2020

Sales by Business Sector

40 ％ConsumerBusiness

60 ％［ Consumer Business ］

BIO

SUNSTAR Group Report 2023 I 05

12/202146
M - CHF

12/2022 ［month/year］

23［ Industrial Business ］

Industrial
Business

46

42

60%

750

47%

600

577

43%
547

45%

47%

50%

576

557

40%

450

30%

300

20%

150

10%

0

12/2019

12/2020

12/20210%
12/2022 ［month/year］

Stockholder equity
Equity ratio

557
M-CHF

The sales ratio of industrial and consumer businesses in all businesses changed
from 1:2 in the previous year to 2:3 this year, due to growing sales ofautomotive adhesives and metal parts in the industrial business and declining
sales in China and Japan in the consumer business, along with the impact of
currency exchange rates.
*Consumer Business : Oral care goods, cosmetic, health foods, etc.
*Industrial Business: Metal parts for motorcycles, automobiles, and adhesives /sealants for automobiles,
buildings, electronic parts, etc.

Americas［million US Dollars］

325
300

289

275

280

26%
299

［million Euro］

140
120

125

109

124

128

100
80

Japan

60
40
20

249

250

Europe012/2019

12/2020

12/2021

12/2022 ［month/year］［hundred million Yen ］

225

800

200

740

700

175
0

45％

Group Business Performance 2022

12％

Net Sales by Region

12/2019

12/2020

12/202117％

12/2022 ［month/year］

Based in22

12/2020

12/2021

12/2022 ［month/year］

400
0

299

282

680

500

［million Singapore Dollars］

300

680

600

Asia

325

688

12/2019

280

275

246

250
225

countries
worldwide

200
175
0

12/2019

12/2020

12/2021

12/2022 ［month/year］

SUNSTAR Group Report 2023 I 06

Consumer Business overview in FY2022
In FY2022, although sales decreased in Japan and Asia due to factors such as stagnant sales

Consumerin China arising from continued COVID-19 lockdowns, sales were strong in Europe and theAmericas. On the other hand, profits decreased significantly due to the global increase in costsof raw materials, logistics, and electricity.
By region, in Europe, sales growth was driven by Sweden, Poland, and the Netherlands. In theBusiness

Americas, Mexico, Argentina, and other Latin American countries performed well. In bothregions, interdental cleaners contributed to revenue. In Japan, the GUM Plus series withsignificantly improved sterilizing properties was newly launched in autumn, achieving a
successful start with the good reception of its toothpaste and dental rinse by retailers andconsumers.

Oral Care

Future prospects

Beauty CareIn the era of 100-year life, the Consumer Business aims to help extend healthy life expectancy
so that customers can always lead healthy and enriching lives. To do so, we provide products
and services that contribute toward promoting overall health, starting with oral health, as well

Health Careas the creation of healthy and comfortable living environments for both minds and bodies.
In recent years, the importance of good oral health in overall health promotion is rising due tothe impacts of infectious diseases, repeated natural disasters, and an aging society. Together
with raising awareness about the importance of oral care with the cooperation of dental

EQUITANCE

2％

800

700

5％

665

Ora 2

11％

professionals and local communities widely, we also accelerate the development of products

Europe16％

KENKODOJO

740

600

Others17％that provide effective oral care in line with the oral issues and age groups of customers. To do

Japan

GUM

66％

50 ％

so, we strengthen the creation of new added value, including leveraging oral bacteria research

Americas27％

results and the application of artificial intelligence and information technology. In addition tooral care, we also work on addressing customers’ health issues in the areas of health foods,
Asia

2021

2022

Net Sales（million CHF）

Net Sales by Brand

Net Sales by Region

6％

skin care, hair care, and daily commodities. Furthermore, we will also actively work on
environmental load reduction, such as reducing and recycling petroleum-derived plastics which
are often used in consumer products, such as toothbrushes, interdental brushes, andmouthwash bottles, as well as packaging, developing products that are beneficial to health aswell as the environment, and reducing the environmental impact of our business locations.

SUNSTAR Group Report 2023 I 07

Discovered the "mastermind" bacteria of periodontal disease through joint research with SUNY
Uniquely developed formulation technology that effectively kills “mastermind" bacteria

Oral Care

Consumer Business

Consumer Business highlights：Launching the GUM PLUS series
Launch of "GUM PLUS" in Japan,
which evolved from research findings

Since 1979, Sunstar has sent researchers to the State University of New York at Buffalo (SUNY), the world's
leading institution in periodontal disease research. Based on research findings at SUNY, Sunstar identified
cetylpyridinium chloride (CPC) as being effective in sterilizing periodontopathic bacteria, and in 1989, Sunstar
became the first in the industry to launch the GUM brand line of periodontal disease prevention products with
CPC as the core ingredient. Since then, we have continued to evolve our products based on the latest
periodontal medicine and have grown the GUM brand.

Bacterial research has confirmed thatwhen the mouth is poorly cleaned, F.n.
w i l l g r o w i n i t i a l l y, a c t i n g a s t h e"ma s ter mind " in ma k ing t he or alenvironment be more favorable andconducive to the grow th of highly
pathogenic periodontopathic
bacteria.We then began to develop aformula that could effectively sterilize
F.n.. Through a new technology thatenhances the formulation of thesurfactant CAE®, we discovered that thebactericide CPC has a high effect not
only on periodontopathic bacteria, butalso on F.n..

■ Conceptual diagram of pre-emptive suppression of plaque pathogenicity progression

Bacterial loads

Researchers in charge of the project

In recent joint research with SUNY, we used the next-generation
sequencing technology which is capable of comprehensively
analyzing the genetic sequences of over 700 types of bacteria inthe mouth. We analyzed the relationship between the types ofbacteria in the saliva of 611 Sunstar employees and the level ofseverity of periodontal disease. In this study, we found that as theperiodontal disease worsens, along with an increase in highly
pathogenic periodontopathic bacteria, there is an increase inanother type of bacteria called Fusobacterium nucleatum (F.n.).

New
formulaSurfactant
Bactericide+ CAE®
CPC

Bacterial
killingPrevious
formulaBactericide
CPC

Bacterial
killing

Bacterial
killing②“Mastermind”
bacteria (F.n.)①

GUM PLUS was developed based on the latest research results in periodontics. In
addition to sterilizing periodontopathic bacteria, it also sterilizes F.n., the "mastermind"
that aids the growth of periodontopathic bacteria. This gives GUM PLUS the ability topre-emptively address the factors that cause periodontopathic bacteria toincrease.Research on oral bacteria is still ongoing. Meanwhile, future research progress
and global expansion are expected.

②

Periodontopathic
bacteria (e.g., P.g.)①

The new formula
Change over time(1) Sterilizes F.n., the “mastermind” behind the increase of periodontopathic bacteria,
thus preventing a favorable environment for periodontopathic bacteria to survive in.
(2) Prevents the increase of periodontopathic bacteria

GUM PLUS received a special award in the New Product Collection 2022 General Public
Voting Category at the Japan Drugstore Show, Asia's largest drugstore exhibition which
was held in August 2022. It was also featured in a 2023 hit prediction article last year ina prominent trend magazine and received high praise through customer reviews on online
platform. Since its launch in September 2022, the product has maintained strong sales.

SUNSTAR Group Report 2023 I 08

Consumer Business

Oral Care

BIO

Toothpaste / Mouthwash / Toothbrushes / Between teeth cleaning / Dental treatment products
New sonic vibration toothbrush, which is gentle on teeth and gums
and highly effective in removing dental plaque, performed well in Europe

Sales and market share in Argentina increased notably due topromotion of interdental cleaners and orthodontic products

The GUM SONIC SENSITIV E Bat ter y
Toothbrush, a new battery-powered sonic
toothbrush featuring lightweight andcompact size, was launched in Europe.
Highly efficacious in plaque removal, yetvery gentle, it delivers a soft brushingexperience to people with hypersensitivity
and fragile gums. Digital marketing
campaigns in European countries weresuccessful, and the product delivered
strong sales.

In Argentina, interdental cleanersand orthodontic oral care productlines performed well, gaining 19%of the overall market and 32% oft h e p h a r m a c y m a r ke t s h a re.
Product and brand awarenessincreased through communication
ef for ts tailored to the specificneeds of each community, such as
pregnant women, marathon
runners, diabetics, and dental
schools.

New floss offering improved plaque removal with two twisted
strings and a refreshing flavor gained popularity in Europe

Raising oral health awareness at various in-person events
Significant growth in both sales and profits in Mexico

GUM T WISTED FLOSS has been
introduced in Europe, boosting plaqueremoval function by 30 % due toincreased surface made of two twisted
strings. It easily glides between teeth
and has a pleasant and refreshing
min t- g r e e n t e a f l av o r. I n c r e a s in gawareness online of the benefits ofadding interdental cleaning to the oral
care ritual contributed to the positive
sales trend in European countries.

In Mexico, the GUM brand and products
were promoted through multiple
promotional and product placement
activities such as wrapping buses for F1
car race venues, digital boards at soccer
fields, gourmet food events, retail store
events, and the "Ladybug" marathon,
a new G U M character for children.
Expanded touchpoints with customers led
to sales and profit growth.

SUNSTAR Group Report 2023 I 09

Consumer Business

Beauty Care

Health Care

Skin care cosmetics / Hair care products / Oral beauty care products

Health foods / Household goods

Popular Chinese actressand singer Song Qian is featured
in Ora2 ads to enhance brand value

Ora2 stylish portable toothbrushand toothpaste sets sell well

KENKODOJO promoted fan acquisition
by expanding opportunities for dialogue with customers

Ora 2 me Portable, a toothbrush and toothpaste set, waslaunched in Japan and Taiwan in response to an increasein social outings. Sales were strong due to the slim,
portable, and non-see-through design that allows users
to carry the set without worrying about it being seen.

The KENKODOJO brand of health foods has been sold mainly through direct sales,
but now sales at stores have doubled as a result of strengthening pop-up store sales
at department stores and commercial facilities. A YouTube channel has been set up
to provide health information and launched live commerce conducted by our
employees. KENKODOJO’s fan base has grown significantly by providing nutritionalcounseling from nutritionists and starting conversations that convey the mission ofboth the company and the brand.

Ora 2 advertisement features popular Chinese actress andsinger, Song Qian, as a symbol of a cool and successful
woman. The brand promoted this new ad using SNS andvideos to enhance the value of oral beauty products.

Medicated hair-growth agent"EQUITANCE FUWARI YELL" goes on sale
A medicated hair-growth agent that integrates theresult s of S uns t ar's long-s t anding hair andhair-grow th research. It is a new hair-grow thtreatment after taking a bath that leads to voluminous
hair. It aims to promote positive aging, making goingout and dressing up
more enjoyable. Many
customer s gave ushigh marks saying,"My hair became morevoluminous," or "It is
comfortable and fun tocare for.”Hot topic of the season!
The refreshing solution proposed
by SUNSTAR TONIC Shampoo
Sunstar Tonic Shampoo is popular for its coolingsensation. Users identified with "Soo Action," a methodof use that refreshes the scalp and mind, and the
product experience car toon by a popular sauna
cartoonist, and the product rode the wave of the sauna
boom, with hot bath facilities starting to use the product.

Shine Detergent Keira for kitchen and bathroom expanded sales
Keira is a detergent designed to clean water-related stains to a shine. A video thatshows before-and-after examples was shared on Instagram, placed on SNS sites as
an ad, and delivered via TikTok. An influencer blogger who is a big fan of Keirashared a video showing her using Keira at home on SNS. The video gained over 2
million views, and online sales grew by 200% year-on-year.

SUNSTAR Group Report 2023 I 10

Industrial Business overview in FY2022
The business environment in FY2022 was highly demanding for many reasons. There havebeen major supply chain issues due to global semiconductor shortages, the impact of thesituation in Ukraine, and our customers — automobile and motorcycle manufacturers —continued to reduce production. However, we succeeded in achieving higher sales than the

Industrial

previous year through measures such as securing new customers and revising prices. On theother hand, operating income decreased despite efforts to reduce cost of sales, which wereaffected by soaring prices of raw materials such as chemicals and steel products.
In automobile adhesives, sales were strong in areas such as the various adhesives used in

Business

glass and car body manufacturing processes by automotive manufacturers in Japan, China,
and North America, as well as FIPGs (Formed-In-Place Gaskets) for electric vehicle battery
covers and door covers. In adhesives for electronics, there were solid sales of adhesives forlarge in-vehicle displays. The construction sealant and adhesive business saw steady sales insealants for high-rise buildings in Japan and large buildings in China. The metal parts
business grew sales due to increased orders for parts used by motorcycle manufacturers in

ChemicalJapan, Europe, the U.S., and China, motorcycle aftermarket products, and automobile parts in
Thailand. In the new business sector, new products for pet owners were launched as a newtarget market for photocatalytic deodorization and sterilization systems, helping to increase

Material Core

sales even though the launch had been delayed due to the shortage of semiconductors.

E-Science

Future prospects
As the technical solutions group that supports the creation of healthy and comfortable living
EuropeOthers

400

3％

1％

500

419

438

MaterialCore

29 ％Chemical300( Living
Environment＊2 )AmericasChemical( Industrial
Materials＊1 )

51％

19 ％

2021

Japan

37％

24％
Asia

36％

Net Sales by Business* 1 Adhesives for automobiles and electronics* 2 Sealants for construction

adhesive and metal processing technologies to strengthen the competitiveness of our existing
businesses, expand sales areas, and develop businesses in related fields, while striving to create
new living environment businesses such as the indoor air quality improvement business. In
adhesives for automobiles and electronics, we expect strong demand for new adhesives arisingfrom weight reduction, conversion to electric vehicles, and electrification in line with carbon
neutrality in the automotive industry. We will also use our locations in Germany to expand
business for automobile manufacturers in Europe. As for construction sealants and adhesives,

2022

Net Sales（ million CHF）

spaces for people across the world, the Industrial Business is leveraging our strengths in

Net Sales by Region

we will expand our lineup of products such as interior adhesives, enhance one-component
products which have high work efficiency, expand business in China, develop the market in Asia,and make containers environmentally friendly. In the metal parts business, we aim to growbusiness by increasing orders for brake discs used in large motorcycles, luxury bicycles, electricmotorcycles, and small electric vehicles in China and India as well as metal parts for automobiles
and ships. In the indoor air quality improvement business, we will enhance our product lineup for
pet owners and undertake global expansion to expand the business.

SUNSTAR Group Report 2023 I 11

E-Science

Cultivating new businesses that provide healthy
and comfortable air environments

Following the positive feedback on our home-use models,a new pet friendly model has been developed

Supporting healthy and comfortable living
through air environments

Released a new product targeting the pet market

Sunstar is developing businesses for health and comfort
from oral health to the body, the air environment, and living
and mobilit y spaces. Among these businesses, thesterilization and deodorization business supports healthy
and comfortable living through improved air environments.

Adopting effortless sterilization and deodorization technology by photocatalyst
Conventional air purifiers either collect odor
substances, bacteria, and viruses in the device orHO
Ultraviolet rays
release a disinfecting and deodorizing agent into
Bacteria
the air. In contrast, Sunstar's sterilization andReducing
deodorization system uses an ultraviolet light source
bacteria and viruses
Viruses
Porous photocatalyst: Improving reaction efficiency
and photocatalyst to remove odor substances andsuppress bacteria and viruses, which are then returned to the air. The system does not require filter replacement
or chemical refilling, making it easy to maintain its performance over a long period with little maintenance.

Odor substances

CO 2

Industrial BusinessIndustrial Business highlights：Sterilization and deodorization system

The home-use model QAIS-air-03 was well-received for its premium
design and high pet odor-elimination. Aiming to attract morecustomers in the pet market, we have developed a new model.
In September 2022, we launched the new QAIS-air-04A1J, awall-mounted model that can quickly remove pet toilet odors(ammonia odor rising upward). It is full of pet-oriented features thatenhance safety and quietness. Although the launch was delayed due
to a shortage of semiconductors, product reviews on internet sales
sites continue to show high praise from pet owners, and there arehigh hopes for future sales.

2

Expansion of business-use products

TMiP Module
for insertion into air
conditioning ducts

QAIS brand products rollout

The first room use model,
QAIS-air-01

Photocatalytic device performance dramatically improved
Sunstar's sterilization and deodorization
systems have been using photocatalytic devices
with fine mesh-like holes to boost the catalyticr e a c t i o n e f f i c i e n c y. I n t h e n e w m o d e l,photocatalysts are loaded on porous ceramics
to improve reaction efficiency, which enables
rapid deodorization and prevents odors fromspreading throughout the room.

Built into the air conditioning
units of 600
JR West express trains

Initially, the product was deployed in schools, offices, hotels,
hospitals, and nursing care facilities as a device to be integrated into
air conditioning ducts in the ceiling and as a commercial deodorizer tobe placed in garbage dumpsters.It was also integrated into the air
conditioning systems of JR West's limited-express trains as a device
for maintaining safe and secure air.

First home-use model
QAIS-air- 03

Hypochlorous acid sprayer
QAIS –clear–

Q A I S -air- 01/ 02, in-room models with improved deodorizing
performance, quietness, and stylish design made a breakthrough with
their value appeal, which no other company can match, in creating"air that makes your body happy.” We expanded our business bylaunching QAIS-air-03, a home-use model with a high level of interior
design, and a deodorizing and sterilizing spray.

Previous Technology
UV-LED

Odor substances(e.g., ammonia)

New Technology
UV-LEDAir flow

Air flow
Photocatalyst

Porousceramics

Metal mesh

Photocatalyst reacts

With casters
QAIS-air- 02

on surface

Toward global expansionof indoor air quality business
TITAN POWER
for backrooms■ New photocatalyst for quick deodorization of toilet odors (ammonia)*

Photocatalyst reacts

on surface and inside*Based on comparison of own products

While advancing our business in Japan, we
have been developing models for the global
market and preparing to increase production. In
2023, we will launch our products in North
America and China, and we will steadily expand
our business globally.

SUNSTAR Group Report 2023 I 12

Industrial Business

Chemical
Adhesives / Sealants for automobiles, electronic parts, and construction
The adoption of our automotive adhesives is expanding worldwide
Adoption of windshield adhesives expanded in China and Asia, and adoption of various adhesives for car
body bonding expanded in Japan, the U.S., and China.

Increase in new orders for body paintand noise-insulating materials for automobiles
In the automotive adhesive
business, we have received
orders for car body materials
and paints in the Americas,
and for coated foamed noiseinsulation materials in Japan.

Increase in orders
for adhesives for electric vehicles

Automotive adhesives
for large-size displays sell well

Sales of FIPG ( Foamed-In-Place
Gaskets) and urethane adhesives
for electric vehicle battery coverapplications by automakers
i n E u r o p e, J a p a n , a n d C h i n a
expanded.

Sales of adhesives for large-size andnarrow-frame automotive displays are
expanding in Japan. We plan toexpand our business to Europe andAsia as well. Preparations for mass
production are underway for neworders for heat-dissipating agents forin-vehicle cameras since demand is
growing for automatic driving.

＊for illustrative purposes

SUNSTAR Group Report 2023 I 13

Industrial Business

ChemicalMaterial Core
Metal parts for motorcycles and automobiles

Highly durable and weatherproof sealant fully adopted
for Japan's tallest skyscraper

Increase in the use of aluminum hub floating brake discs
by Chinese motorcycle manufacturers

Penguin Seal SA7500, a Silyl terminated Acrylate
two-component sealant that can contributeto extending the maintenance cycle of buildings,
has been fully adopted for the Toranomon
A zabudai Project, the tallest skyscraper inJapan, which is currently
under construction.

High-grade aluminum hub floating brake discs have been adopted for large
motorcycles for the Chinese market, and mass production has begun at ourIndonesian plant. Business in China has further expanded.

Obtained large projects with construction sealant in China
A new fire-retardant-type product was also introduced
Penguin Seal SR2518, a one-component silicone sealant, was adopted for large projects such as high-rise buildings
and landmarks. In 2022, we expanded our product lineup by adding a new flame-retardant-type sealant, Penguin
Seal SR2519.

Further expansionof metal parts for automobiles
In 2022, drive transmission parts madewith fine blanking presses in Thailand
showed solid grow th. Business forautomobiles continued to expand withmass production orders, and new orders
were also received for 2023.

※イメージ

SUNSTAR Group Report 2023 I 14

Sunstar Group Long-Term Vision 2032

Sustainabilit y

Ideal Image in 2032
Sunstar is a company that contributes to enhancing healthy life expectancy and quality of life
(QOL), starting from good oral health to preventive medicine and holistic wellness. It is
important for us to be recognized as the most trustworthy company in the world, providing
total support for people to live a healthy and comfortable life in all living environments
including mobility and buildings.

The Sunstar Group aims to become an indispensable company for society in line with
its long-term vision for 2032, the 100th anniversary of its founding. To realize thisvision, we are creating new businesses that "contribute to the well-being of people andthe planet" and implementing ESG-driven management with consideration for theenvironment and society.

We will contribute to solving social issues through our business aimed at achieving our ideal
image in 2032. At the same time, we will prioritize responses to areas demanded by society Environment, Human Resources, Management Platform, and partnerships with stakeholders.
We will create new values that contribute to the well-being of the people and the planet
through partnerships with stakeholders.

Environment

Partnership

Human Resources

Management Platform

Sunstar’s SDGs Key Goals
We will provide products and services that will help
people live healthier lives, from the promotion of orala n d over all he al t h to imp r ov ing t he li v ing
environments of people all around the world.

In 2022, we celebrated the 90th anniversary at each Sunstar Group company around the world.
Tapestries with a mosaic artwork of all Group employees' faces visualizing One Team and commemorative
badges were distributed to all Group companies. Colleagues around the world were connected online tocelebrate the 90th anniversary together, share their voices and exchange their ambitions for the 100th
anniversary.

We will work to make living environments moresecure and comfortable, with regards to mobility andbuildings.
We will work to prevent, reduce, and reuse waste
products through the entire life cycle of our
products—from procurement to manufacturing,logistics, sales, and even after consumer use.

Sunstar's sustainability web page
SUNSTAR Group Report 2023 I 15

https://www.sunstar.com /sustainability/

Group companies implemented initiatives to achieve mid-term environmental targets
and environmental activities necessary for our community
Mid-term environmental targets

Efforts to meet targets

As part of its environmental initiatives, Sunstar
has established Group-wide global environmental
targets to be achieved by 2030.

● Reduction of the environmental impact of products,(1) Plant-based/recycledplastics used in containers
and packaging: 50%

packaging and in-store sales promotion tools
We have proceeded to reduce the amount of plastic in our products andpackaging by replacing it with plant-derived and recycled materials. We arealso actively driving the replacement of plastic with renewable materials suchas wood and paper for fixtures and sales promotion tools used in storefronts
in Europe, the U.S., and Japan.

Sustainabilit y Sunstar Long-Term Vision

Environment● Collection and recycling test program for used plastic(2) Recyclable or reusable material
used in post-consumer containers
and packaging: 100%In the Netherlands, we collaborated with TerraCycle on a two-year test program ending in March 2023 to collect andrecycle used interdental cleaners. In Japan, we participated in a test program to collect and recycle refill packs for daily
use products in collaboration with Kobe City and other companies in the industry. We will continue to work on designing
products and packaging materials with reduced environmental loads and creating a system for resource recycling.

(3) FSC ® -certified or othercertified paper used in containers
and packaging: 100%

● Biodiversity conservation and forest protection initiatives

To protect biodiversity and the natural environment, we have begun supporting forest protection and tree planting in the
U.S. and Germany. In Germany, we have started activities to enrich local greenery and ecosystems by keeping
honeybees on the factory premises. Employees actively participate in volunteering activities to exterminate invasive
alien plants in Switzerland and cleanup activities in the neighborhoods of business sites in various countries. We
are also promoting the use of RSPO-certified palm oil as a raw material and FSC ®-certified paper for packaging.

(4) RSPO-certified or other certified
palm oil used in products: 100%
(5) Renewable electricity
used in own plants and offices: 100%
(6) Reduction of water
consumption per production in own plants:
20% reduction
per kg compared to FY2020(7) Reduction of total CO 2
emissions from own plants (Scope 1 + 2):
85% reduction compared to FY2020
CO 2* R ound t a ble on S us t aina ble P alm O il ( R S P O ) : S uns t ar ’s R S P O memb er ship pro gres s
https://rspo.org/members/12085* Forest Stewardship Council ® ( FSC ® ) : An independent, non-profit organization that promotes the
responsible management of forests globally● Reduction of CO2 emissions at our sites

We are reducing CO 2 emissions by switching to renewable electricity for power used at our plants and offices. We
maintain a high ratio of renewable electricity at our Swiss headquarters, our toothbrush and interdental brush factoryin Germany, and our factories and offices in Japan. Solar panels have been installed at some of our plants in Germany
and Japan, and new solar panels are being installed at our metal parts plant in Singapore and our adhesives plantin Germany. In addition, we have begun operating electric vehicle charging stations for employees in Germany.

SUNSTAR Group Report 2023 I 16

Sustainabilit y Sunstar Long-Term Vision

Human Resources
We are developing people and an organizational structure that respect diversity of individual values
and continue to grow in response to the changing times
To enhance individualand organizational well-being

For the promotion of teamwork management that fuses diverse individuals

From 2021 to 2022, we conductedmanagement risk mitigation workshops
by the management teams of thefour regions — Japan, the Americas,
Europe, and Asia — and an employee
engagement survey in Japan. Basedon the findings, we have defined
initiatives to enhance employee job
satisfaction, creating encouraging work
environments, and other organization
development initiatives that we areadvancing across the organization.

Several programs were developed to promotecollaboration, diversity, and inclusion. In
Europe, the Sunstar Connect Program washeld to deepen a common understanding of
our corporate culture and fosteringcommunication beyond the boundaries
of functions, departments, and countries.
On the occasion of the company’s 90th
anniversary, we organized a global online
event. Video messages by employees withdiverse backgrounds and values from all overthe globe reinforced the sense of belonging
and cohesion across Sunstar Group.

Striving to become an autonomousand highly competitive group of professionals

Initiatives enhancing employee well-being
and performance

E-learning platforms and educational
programs to support employeedriven career development were
implemented in Europe, the U.S.
and Japan. In addition, we
proactively support human resource
exchange through joint educational
initiatives on topics such as digitaltransformation and key market
trends as well as global trainee
programs.

As a company under taking business
related to health, we maintain programs
suppor ting the physical and mental
well-being of our employees. For example,
we create opportunities for sporting eventsand exercise at all our business locations
around the world. In Japan, we introduced
the “Sunstar Gymnastics” that focuses
on strengthening leg and back muscles.
We were also certified as an Excellent
Health and Productivity Management
Organization in Japan.

SUNSTAR Group Report 2023 I 17

We continue to globally communicate the importanceof oral health in maintaining general health

Sunstar engages in businesses that lead to the promotion ofsystemic health and the development of comfortable living spaces
in keeping with the company motto, “Always strive to help people
everywhere achieve better health and enhance their quality of life.”

Periodontal disease is one of the main factors in tooth loss. It also affects the progression of systemic
diseases, such as diabetes. Oral frailty, a decline in the ability of the mouth to chew and swallow thathastens the aging process, is also gaining attention.
Sunstar continues to raise awareness about the importance of oral health maintenance for general healthworldwide. In 2022, we held oral and overall health awareness seminars such as for distributors anddentists in China, and for the general population and members of the construction industry in Japan.

Since 1979, we have been sending researchers to the State
University of New York, an institution renowned for its periodontal
disease research. As part of their activities with the University’s
pioneering research, Sunstar’s scientists were quick to pick up
on the relationship between periodontal and systemic diseases. Sunstar has been supporting

Sustainabilit y Sunstar Long-Term VisionPartnership

Sunstar’s History and Future

research in this field by hosting international symposia on the subject in locations across theglobe, gathering medical and dental professionals together. Since the first symposium in 1986,
we have built up the GUM brand business while leading the way in raising awareness about oral
and systemic health. This is especially important today, with interest in oral health growing inrecent years with the aging of populations around the world and the COVID-19 pandemic.
The Sunstar Foundation, working to promote dental and oral health in anticipation of benefits foroverall health, annually awards research grants to young Japanese researchers conducting
cutting-edge research into the relationship between periodontal and systemic diseases. The grants
are used to fund studies at institutions such as the Joslin Diabetes Center affiliated with Harvard
Medical School, with two researchers sent there in 2022.
Sunstar also presents the World Perio Research Awards and the Perio Link Award every three years,
recognizing advanced research into the relationship between periodontal and systemic diseases. A
presentation ceremony was held during the 2022 European Federation of Periodontology conference.

Also growing in significance are automobile adhesives and drivetrain metal parts, which support
electric vehicle weight reductions in response to environmental concerns, as well as industrial
sealants for enhancing building durability. Sunstar tackles the challenges of these social andenvironmental issues head on, aiming to improve people’s well-being as well as that of the planet.

Consumer BusinessIndustrial Business

Sunstar was founded in 1932 and originated in the business of bicycle parts and rubber glue for flat tire repair. Utilizing
the manufacturing facilities of metal tube containers for rubber glue, the company commercialized toothpaste andexpanded as "Consumer Business". The bicycle parts and rubber glue business was shifted and expanded to metalparts for motorcycles and adhesives and sealants for automobiles, construction, and electronics as "Industrial Business".

SUNSTAR Group Report 2023 I 18

Published by Sunstar Group Global Public Relations www.sunstar.com