The MCJ Group’s Mid-Term Management Plan for FY2023 to 2025
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May 13, 2022

MCJ Co., Ltd.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

The MCJ Group’s long-term management vision: Drive growth by combining ourstrengths in the hardware product business with the addition of service offerings
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Management vision andbusiness objectives
Expand the offerings ofExpand the business domain into

hardware products

the content and service business
Hardware products and services are mutuallydependent and complementary and should beoffered as such.

Assumptions◼ Hardware products and services are becoming
increasingly mutually dependent.
◼ The service business has a greater growth potential
than the hardware business.

◼ Demand for hardware products as gateways toinformation remains high.
◼ Hardware products are a growth industry.

Key
initiatives

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Create synergy

Users have increasingly diverse needs andmeans to access, exchange, and share
information.

Directions
andobjectives

C Continue to focus on the PC and monitor business» Pursue further growth opportunities in Europe andJapan Develop services that complement our existing
hardware product business» Launch them first in Japan Expand the hardware product business for consumer
and business markets» Make inroads into growing markets

 Launch new services for consumer and businessmarkets» Start small at first and scale up Develop products in-house Expand the business domain by acquiring companies
outside the Group Expand product offerings by partnering withcompanies outside the Group»Pursue M&A, venture investment, business
partnership opportunities Partner with companies outside the Group to
broaden the range of service offerings»

Start with venture investment and small M&A deals
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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1.

Review of the Mid-Term Management
Plan for FY2020 to 2022

Pages 3 to 15

2.

Mid-Term Management Plan for
FY2023 to 2025

Pages 17 to 27

3.

ESG Initiatives

Pages 29 to 39

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Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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MCJ Group’s Previous Rounds of Mid-Term Management Plans
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MTMP for FY2017 to 2019

MTMP for FY2020 to 2022

Boost the profitability of the existing
business lines and lay the groundworkfor further growth⚫ Streamline group companies⚫ Improve the profitability of key
subsidiaries to earn more cash toinvest for the future and return profit to
stakeholders⚫ Prepare to pursue M&A and venture
investment opportunities as part ofefforts to expand the product lines andreach new markets

Lay the groundwork for
growthStep 1CJ

MTMP for FY2023 to 2025

Pursue the right balance between
growth and investment in order tosustain business expansion⚫ Expand our PC business in Japan and
PC monitor business overseas tomaximize our basic profit⚫ Aggressively invest in enhancing ourvalue chains and expanding our productofferings as part of bolstering ourexisting business lines⚫ Invest in launching the content andservice business as part of diversifying
our business lines in order to achieve
the Group's Vision

Leverage the achievements we havemade over the past six years to turnthe Group's long-term vision into reality⚫ Start to recoup returns on investment
to achieve the Group's long-term
management vision⚫ ・・・・・⚫ Achieve greater operational excellenceand efficiency internally

Diversify business lines
and profit sources

Step 2

Accelerate profit growth

Step 3

Maintain a good balance between a robust profit base and aggressive investment as a first step towardachieving the Group's long-term management vision
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Review of MTMP for FY2020 to 2022
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Outline of MTMP for FY2020 to 2022

Strategic directions

Basis for planning

Pursue the right balance between
growth and investment in order tosustain business expansion✓ While the end of support for
Windows 7 by Microsoft waspredicted to boost the
replacement demand for PCs in
the market during FY2020, we
chose to pursue profitability in ourbusiness.

⚫ Aggressively invest in enhancing ourvalue chains and expanding our
product offerings as part of bolstering
our existing business lines⚫ Invest in launching the content andservice business as part ofdiversifying our business lines inorder to achieve the Group's Vision⚫ Achieve greater operational excellenceand efficiency internally❑ Changed gears at the height of the
COVID-19 pandemic»

Suspended risk-taking actions such as making
major investments and switched to defensive
corporate management focused on making
existing business lines more profitable andachieving greater operational efficiency.

»

Put on hold pursuing M&A opportunities anddiversifying business lines. Continued
researching opportunities but postponed
execution.

✓ In FY2021 and 2022, the PC
market was predicted to plummet
from the boom of FY2020. Ourpriority was to achieve profitable
growth in sales and market
share during those two years.

×❑ Achieved both sales and profit targets.
»

Financial targets

Targets for FY2020 and FY2022
Results for FY2022
FY2020J

Results

Objectives⚫ Expand our PC business in Japan and
PC monitor business overseas tomaximize our basic profit

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FY2022

Net sales¥143,480M

Operating profit¥10,110M ¥10,900M to 12,000M¥152,000M

Net sales¥191,247M»

Operating profit¥13,435M

Maintained a sufficient inventory
level to meet surging demand for
PCs at the height of thepandemic, overcoming
shortages of key components
and materials.
In a challenging businessenvironment, our sales grewmuch faster than the market
and our profit exceeded its
target.

While we achieved the financial targets for FY2020 to 2022, we suspended additional investments as aresult of strategic decisions made at the height of the pandemic.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Review of MTMP for FY2020 to 2022: Consolidated Financial and KPI Results
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Consolidated financial and KPI results for FY2020 to 2022, as compared with FY2019
FY2019FY2020

FY2021

FY2022

Net sales¥137,264M¥153,734M¥174,173M¥191,247M

Operating profit¥9,688M¥13,706M¥15,758M¥13,435M

Operating margin

7.1%

8.9%

9.0%

7.0%

ROIC

17.7%

23.3%

26.6%

19.0%

ROE

18.3%

18.4%

21.1%

16.9%

Dividend payout ratio

30.2%

30.6%

30.5%

33.9%*

Summary of achievements
More robust
profit base

Net sales and operating profit were up by 39.3% and 38.6%, respectively, between FY2019 and FY2022.
We have maintained strong momentum in sales growth over the past three years. While the operating profit for FY2022
declined year on year as a result of the adoption of new accounting standards and the surging costs of components andmaterials, it was up from the FY2019 level.

Greater
capitalefficiency

The ROE and ROIC have remained much higher than the WACC.
We have maintained consistently high profitability and capital efficiency.

Moregenerous
dividend

The dividend payout ratio was up from 30.2% in FY2019 to 33.9% in FY2022.
The dividend rate was up from 20.5 yen to 32 yen*, maintaining an upward trend during the period.

* The dividend payout ratio and dividend rate for FY2022 are subject to approval at the general shareholders meeting scheduled for June 24, 2022.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Review of MTMP for FY2020 to 2022:
Consolidated Financial and KPI Results against Targets
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FY2019 results and FY2022 targets

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Results and difference from targets

Financial KPIs
Results for FY2019

Targets for FY2022

Results for FY2022

Diff. from targets

Net sales¥137,264M¥152,000M¥191,247M+25.8%

Operating profit¥9,688M¥12,000M¥13,435M+12.0%

Operating margin

7.1%

6.0 to 7.0%

7.0%

±0 point

ROIC

17.7%

12% or more

19.0%

+7.0 points

ROE

18.3%

12% or more

16.9%

+4.9 points

Dividend payout ratio

30.2%

30.0% or more

33.9%*+3.9 points

DOE

5.5%

4.5% or more

5.7%

+1.2 points

We achieved sales and profit targets, as well as all KPI targets, for FY2022.
* The dividend payout ratio for FY2022 is subject to approval at the general shareholders meeting scheduled for June 24, 2022.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Review of MTMP for FY2020 to 2022: Consolidated Balance Sheet Performance
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Consolidated balance sheet results for FY2020 to 2022, as compared with FY2019
FY2019FY2020

FY2021

FY2022

Operating cash flow

¥4,093M¥10,579M¥13,174M(¥6,762M)

Cash and deposit¥21,328M¥23,957M¥31,811M¥24,565M

Interest-bearing debt

¥14,776M¥10,926M¥9,291M¥12,715M

Net cash balance¥6,552M¥13,030M¥22,520M¥11,849M

Equity capital ratio

52.7%

56.1%

59.0%

61.3%

Summary of achievements
Stronger cash
position

Our operating cash flow and free cash flow have remained strong over the past three years, boosting the Group's earning
power.
While we built up inventory during FY2022 in response to challenging procurement and business environments, the year-end
cash position as measured by the balance of net cash was much stronger than at the end of FY2019.

More solid
financialfoundation

The equity capital ratio reached 61.3% at the end of FY2022.
Combined with the stronger cash position, we have much greater flexibility in making investment decisions andimplementing a capital policy.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Group Company's Performance: Mouse Computer Co., Ltd.
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Summary of business performance for FY2020 to 2022

Financial results for FY2022, as compared with FY2019
FY2019FY2022

ChangeNet sales¥39,933M¥54,076M+35.4%

Operating profit¥2,428M¥3,280M+35.0%

Ordinary profit¥2,353M¥3,017M+28.2%

Profit¥1,547M¥1,931M+24.8%Key initiatives⚫ Mouse Computer introduced
PCs endorsed by the Japanesports Union to capture alarger share of the highperformance PC market.
company opened a PC workshop in KidZania
× ⚫ TheKoshien and worked with municipalities to improve the IT
literacy of children, which was expected to broaden thecustomer base for the brand.

Advertising

Shifted advertising from TV to online to reach a growing number of homebound PC users amid the pandemic.

Product offerings

High-performance PC segment: Focused on gaming and creator PCs; mainstream PC segment: Expanded and promoted thenotebook PC offerings.

After having achieved record-setting operating profits for FY2020 and FY2021, Mouse Computer reported a much smaller
profit for FY2022. This was because of an increasingly challenging procurement environment, the adoption of new
accounting standards, and an inventory write-off. Nevertheless, the company's sales and profits for FY2022 were muchhigher than their FY2019 level.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Group Company's Performance: Unit.Com Inc.
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Summary of business performance for FY2020 to 2022

Financial results for FY2022, as compared with FY2019

Key initiatives

FY2019FY2022

ChangeNet sales¥32,353M¥49,950M+54.3%

Operating profit¥929M¥1,093M+17.6%

Ordinary profit¥966M¥1,123M+16.2%

Profit

¥689M

¥686M

-0.5%

⚫ Unit.Com increased sales by introducing new PC
models and services.

×⚫ Two more plants became
operational to add
manufacturing capacity.

Sales channels

Diversified and bolstered in-store revenue streams; expanded online and B2B sales channels

Investment for growth

Increased manufacturing capacity and launched PC rental services to broaden the customer base

After having achieved a record-setting operating profit for FY2021, Unit.Com reported a smaller profit for FY2022. This was
because of an increasingly challenging procurement environment and the adoption of new accounting standards.
Nevertheless, the company's sales and operating profit for FY2022 were much higher than their FY2019 level.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

-9-Group Company's Performance: Tekwind Co., Ltd.
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Summary of business performance for FY2020 to 2022

Financial results for FY2022, as compared with FY2019
FY2019FY2022

ChangeNet sales¥33,778M¥40,694M+20.4%

Operating profit¥824M¥1,380M+67.4%

Ordinary profit¥825M¥1,469M+78.0%

Profit¥561M¥1,000M+78.2%Key initiatives⚫ Tekwind stepped up
marketing of productswith unique selling
propositions.

× ⚫ The company expanded from the sales agent
business into the solution and service business.

Improved profitability Successfully completed the phase of pursuing profit rather than sales growth and was ready to pursue profitable growth.
Product offerings

Focused on developing products in-house; stepped up sales activities in the solution business.

The pursuit of profit rather than sales growth was successful, placing Tekwind's business on a solid footing.
The company's sales and profits for FY2022 were much higher than their FY2019 level.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Group Company's Performance: Iiyama Corporation
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Summary of business performance for FY2020 to 2022
Financial results for FY2022, as compared with FY2019
FY2019FY2022

ChangeNet sales¥33,793M¥50,697M+50.0%

Operating profit¥5,825M¥8,026M+37.7%

Ordinary profit¥5,819M¥8,422M+44.7%

Profit¥4,375M¥6,343M+44.9%

Primary products×

Actions taken at the height ofthe pandemic: Product offerings

Expanded the lineup of general-purpose monitors and keep them sufficiently in stock to meet the growing
demand from homebound PC users

Actions taken at the height ofthe pandemic: BusinessResumed expanding sales areas in Europe.

Iiyama temporarily shifted its product development and marketing focuses from industrial-use monitors, which had
driven the growth of the company's pre-pandemic business, to general-purpose monitors, and kept them in stock. Thischange in strategy proved effective in keeping the company on the growth track for sales and profits.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Group Company's Performance: R-logic International Pte Ltd
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Summary of business performance for FY2020 to 2022
Financial results for FY2022, as compared with FY2019

Operations

FY2019FY2022

Change¥3,012M¥2,539M-15.8%

Operating profit

¥59M

¥58M

-1.7%

Ordinary profit

¥96M

¥107M

+11.4%

Profit

¥66M

¥62M

-6.1%

Net sales⚫ Clean room in a
repair center×⚫ Authorized service
center for amanufacturer

Actions taken at the height ofthe pandemic: Service offerings

Launched new services to meet growing demand for IT products from homebound users.

Actions taken at the height ofthe pandemic: Business

Downsized or discontinued existing business lines most likely to be adversely affected by the pandemic.

R-logic cut back its fixed expenses and launched new services to mitigate the impact of the pandemic on its business,
including the locking down of its facilities. As a result, the company is now in a better position for growth.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Group Company's Performance: Aprecio Co., Ltd.
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Summary of business performance for FY2020 to 2022
Financial results for FY2022, as compared with FY2019

Company-owned commercial facilities

FY2019FY2022

ChangeNet sales¥3,522M¥4,093M+16.2%

Operating profit¥139M(¥174M)-

Ordinary profit¥143M(¥176M)-

Profit¥57M(¥196M)-×

Restructuring

Wrote off fixed assets and closed several facilities under an increasingly challenging business environment amid the
pandemic.

Focused business

Shifted focus to operating 24-hour fitness gyms that retained a solid membership base amid the pandemic and operated
at low cost.

Aprecio reported an operating loss of ¥800M for FY2021 under an increasingly challenging business environment brought
about by the pandemic. After implementing a series of restructuring measures, the company's operating loss fell sharply for
FY2022.
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Supplementary information: MCJ’s stock price
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Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Supplementary information: MCJ’s dividend rate and payout ratio
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MCJ’s annual dividend rate has continued to increase fornine consecutive fiscal years.

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Dividend rate in yen¥6.50¥13.00¥18.00¥20.50¥23.50¥31.00¥32.00

Dividend payout ratio %

20.5%

25.1%

30.1%

30.2%

30.6%

30.5%

33.9%

Note 1: The dividend rate for FY2018 and earlier is calculated based on the assumption that the stock split effective July 2018 had been conducted earlier.
Note 2: The dividend payout ratio and dividend rate for FY2022 are subject to approval at the general shareholders meeting scheduled for June 24, 2022.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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1.

2.
3.

Review of the Mid-Term Management
Plan for FY2020 to 2022

Pages 3 to 15

Mid-Term Management Plan for
FY2023 to 2025

Pages 17 to 27

ESG Initiatives

Pages 29 to 39

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Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Overview of the Group’s MTMP for FY2023 to 2025 (1 of 2)
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MTMP for FY2023 to 2025

April 1, 2022

Bolster the
performance ofexisting
business lines

Three keyobjectives in
MTMP for FY2023
to 2025✓ Bolster the profitabilityof existing businesslines✓ Lay the groundwork for
growth✓ Pursue M&A andalliance opportunities toaccelerate growth

See pages
19 to 23
Growthstrategy No. 1:
Lay the groundworkfor growth

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March 31, 2025

Targets for FY2025

Results for FY2022
Net sales¥191,247M

Net sales¥216,200M

Operating profit¥13,435M

Operating profit¥18,900M

Profit¥9,283M

Profit¥13,000M

These targets
are only fororganic
growth ofexisting
businesslines.

◼ Prepare to be listed on the Prime Market of the Tokyo Stock Exchange andupgrade our IT infrastructure✓ Make advance investment to grow our business✓ Prepare to diversify and broaden our capital policy✓ Establish a governance structure that stands up to the scrutiny of overseas investors✓ ・・・✓ Leverage our existing value
Expand ourchains and customer bases to
product offeringsand customer
diversify product offerings
bases
Bolster the✓ Pursue business opportunities toperformancereach a broader range ofof our existingcustomers
business lines

Growth strategy No. 2:
Pursue M&A and allianceopportunities

Enhance ourvalue chains

Pursue new
business
opportunities✓ Enhance our value chain in Japan✓ Add new functions to our value
chains outside Japan✓ Explore the software and system development
business that complements our existing hardware
business✓ Explore categories that complement our existingwellness business
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Overview of the Group’s MTMP for FY2023 to 2025 (2 of 2)
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Outline of strategic directions

Market environments✓ Focus on high-performance
PCs and mainstream PCs

OverseasPCbusiness✓ Expand the lineup ofindustrial-use monitors

Entertainment
business

Although the worst is over forour entertainment business, aquick rebound from the slump isunlikely.

✓ Turn the business around witha focus on the 24-hour fitnessbusiness

Other
initiatives

Lay thegroundwork for
growth✓ Resume developing newmarkets, which was put on
hold amid the pandemic✓ Make the business profitableas soon as possible

MTMP for FY2023 to 2025

✓ Prepare to be listed on the Prime Market
Temporarily suspend pursuing big M&A opportunities

FY2023
Net sales¥193,000M

Operating profit¥14,800M

Profit¥10,200M

FY2025

FY2025

Existing businesslines✓ Accelerate diversifying profit
sources

Changes in demand for PC
monitors triggered by the
pandemic will subside overseas.
The surging PC demand is likely
to be followed by a slump.

April 1, 2022

Sales and profit targets

FY2023PC
business
in Japan

The Japanese PC market willremain soft in the first two years
before picking up toward 2025,
when Microsoft will end support
for Windows 10.

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Financial targets

Strategic directions✓ Upgrade our IT infrastructure
to better deal with anticipatedsurging PC demandC

Net sales¥216,200M

Operating profit¥18,900M

Profit¥13,000M
March 31, 2025

Aggressively pursue M&A
opportunities to accelerate
growthAchieve growth not affected by ups and downs in markets with a goal of 220 billion yen of sales and 19 billion yen ofoperating profit

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Mid-Term Strategic Directions of the Group's PC Business in Japan
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Strategic directions of the PC business in Japan under MTMP for FY2023 to 2025
Current internal and external environments

Strategic directions under MTMP for FY2023 to 2025⚫

Boost profitability⚫
⚫

Achieved significant year-on-year growth in
FY2020 and FY2021. Struggled during
FY2022, due to the adoption of new
accounting standards and shortages of key
parts and components.
The Japanese PC market is predicted to besoft for FY2023 and FY2024.
The growth potential of our PC businessremains high in Japan, and we have a goodchance to sustain its growth.
Financial results of the three Group companies1
combined for FY2020 and FY2022

FY2020

FY2022¥121,156M¥144,720M

Operating profit¥7,336M¥5,753M

Profit¥4,350M¥3,617M

Net sales

Lay the groundwork for the future✓ Acquire newcustomers while
retaining existingcustomers to generate
repeat business✓ Mouse Computer to
upgrade its enterprisesystem to step up its
customer acquisition
and CRM efforts;
Become more profitable✓ Develop products thatUnit.Com to upgrade its
meet the needs of homeloyalty program toand business PC users
broaden its customer
amid the pandemic
base✓ Control costs andinventories more
effectively as part oflean business
management✓ Tekwind to bolster its
solution business toacquire new customers
and business

Build up corporate resources and make our position solid in a changing
competitive landscape to meet a surge of PC demand anticipated around2025
1. Mouse Computer, Unit.Com, and Tekwind
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Mid-Term Strategic Directions of the Group's PC Business in Japan
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How to achieve sales growth that will outpace the industry
High-performance PCs for targeted segments
⚫
⚫

⚫
⚫
⚫

⚫

The existing gaming PC market
projected to achieve stable growth
The need for metaverse
development to drive the growth ofcreator PCs
Timely-to-market product offerings
First-mover advantage
Solid customer baseFirst-rate online built-to-order services,
prompt delivery, the position of a
specialty PC vendor

Mouse Computer:
DAIV creator PCs

Unit.Com: PCs developedin collaboration with
GameWith×

Mainstream PCs for everyday users⚫

Marketenvironment
Our competitive
advantage No. 1:
Products

Our competitive
advantage No. 2:
Business models

Product lines⚫

The home and business PC markets
projected to be soft for FY2023 and2024
PC demand projected to surge before
the EOS for Windows 10 scheduled for
2025

⚫
⚫

Well-balanced performance
Good value for money, made-in-Japan
quality, extensive after-sales customer
support⚫

First-rate online stores, prompt delivery

Mouse Computer:
Notebook PCs forhome users

Unit.Com: PCs forbusiness users

Becomemore
profitable

Leverage clearly differentiated products and business models to achieve sales growth that will outpace the industry
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Mid-Term Strategic Directions of Iiyama
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Strategic directions of Iiyama under MTMP for FY2023 to 2025
Current internal and external environments

Strategic directions under MTMP for FY2023 to 2025

⚫ Flexibly responded to changes in demandfor PC monitors at the height of thepandemic. Overcame the challenges
brought about by global components
shortages and supply-chain disruptions andremained on a growth track.

Boost profitability⚫ The global PC monitor market started to
face challenges in mid-2021, when soaring
demand for monitors triggered by the
pandemic began to dwindle, and is
projected to be weak going forward.

Lay the groundwork forthe future✓ Accelerate broadening
the geographic
coverage of thebusiness as a basis for
Become more profitable driving growth in the
future✓ Introduce new
products to stimulate
demand✓ Expand sales teams
in markets alreadycovered and expand
into new markets✓ Upgrade customer
support to enhance thecompany's brandposition

Financial results for FY2020 and FY2022

FY2020

FY2022

Net sales¥33,334M¥50,697M

Operating profit¥5,650M¥4,429M¥8,026M

Profit¥6,343M

Maintain and reinforce the business foundation,
which has been expanding over the past six
years, to pursue further growth

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Mid-Term Strategic Directions of R-logic
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Strategic directions of R-logic under MTMP for FY2023 to 2025
Current internal and external environments

Strategic directions under MTMP for FY2023 to 2025⚫

Boost profitability

Lay the groundwork forthe future✓ Bring the existing
business affected by
the pandemic back tonormal✓ Diversify businesslines in line with the
MCJ Group's longterm strategy

Missed the profit target as a result of
temporarily shutting down its operations at
the height of the pandemic.

⚫

Streamlined its operations and launched
new business to avoid posting a loss.

⚫

Took a defensive approach to business
management and suspended laying the
groundwork for the future.

Financial results for FY2020 and FY2022
FY2020

FY2022¥2,638M¥2,539M

Operating profit

¥101M

¥58M

Profit

¥165M

¥62M

Net sales

Become more profitable✓ Streamline businesslines to drive the profit
level consistently
above the prepandemic level✓ In addition to theexisting repair
business, add andenhancemanufacturing andsales operations

Establish a solid business foundation in
preparation for the Group to make a foray into theSoutheast Asian market

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Mid-Term Strategic Directions of the Group's Entertainment Business
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Strategic directions of the Entertainment Business under MTMP for FY2023 to 2025
Current internal and external environments

Strategic directions under MTMP for FY2023 to 2025

⚫ The internet cafe and hotel business continued
to lose money, affected by the pandemic.

While continuing to restructure the existing business lines, makethe 24-hour fitness a core around which to expand the health andwellness business
Lay the groundwork
Existing business⚫ The 24-hour fitness business turned profitable
for FY2022, more than offsetting the costs of
opening new facilities.
⚫ The entertainment business has been losing
money over the past three years. It has not
generated profit needed to support the launchof new business. It is imperative to take a hardlook at its business structure, positioning
within the Group, and future directions.

for the future

Strategic
directions

Internet cafe
business

24-hourfitness
business

Financial results for FY2020 and FY2022

Net sales
Operating profit
ProfitFY2020

FY2022¥3,922M(¥98M)(¥226M)¥4,093M(¥174M)

Orthopedic
business(¥196M)Hotelbusiness✓ Implement DX solutions✓ Continue to operate
to achieve greater
existing facilities or
efficiency in store
close unprofitable ones
operations✓ Continue to operatefacilities in areas in which ✓ Upgrade existing
they can maintain afacilities; accelerate
dominant market sharepreparation for shoringand earn an operating
up the wellness
profit, which will be usedbusinessfor investments; consider
a franchise businessmodel✓ Continue to operatefacilities only in key
locations and close therest✓ Make the businesscomplementary to thefitness business✓ Continue to restructure
the business to turn itaround✓ n/aCopyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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The Group’s Strategic Directions and Options,
including M&A, for Growth Initiatives
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Strategic options for growth

Strategic
directions

Bolster the performance ofexisting business lines⚫ Existing group companies toexpand and diversify theirbusiness lines

Pursue new business
opportunities⚫ Pursue M&A and VB opportunities
to expand business⚫ Partner with other companies
outside the Group to expand
business

Expand our productofferings andcustomer bases

Enhance ourvalue chains

Options

Leverage our existing value
chains and customer bases
to pursue cross-selling andup-selling opportunities

Enhance and expand ourexisting value chains inJapan and overseas• Sell add-on digital devices to homeand business PC users• Expand the sales network andupgrade customer services in Europe• Sell networking devices• ・・・

Take a longer-term perspective toentering and growing
new business

Pursue new business
opportunities•

Consider IT solution business that willcomplement our hardware business• Consider focusing on the wellness• Establish sales and manufacturingbusiness as part of our entertainment
networks in Southeast Asia
business• ・・・• Pursue these and other new business
opportunities being considered byGroup companies• ・・・- 24 Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

Consolidated Financial Targets under MTMP for FY2023 to 2025
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Consolidated financial and KPI targets for FY2023 and 2025, as compared with previous years
MTMP for FY2023 to 2025

Earlier

MTMP for FY2020 to 2022

Results for FY2016

Results for FY2022

Targets for FY2023

Targets for FY2025

Net sales¥103,288M¥191,247M¥193,000M¥216,200M

Operating profit¥5,167M¥13,435M¥14,800M¥18,900M

Operating margin

5.0%

7.0%

7.6%

8.7%

ROIC

12.4%

19.0%

ROE

13.0%

16.9%

Dividend payout ratio

20.5%

33.9%

See page 27 forcritical KPI targets

Basis for planning
Sales targets for FY2023 and 2025 are only for organic growth and do not include inorganic growth from M&A andother short-term sales-boosting measures.
An increase in personnel expenses is factored into the projected SG&A expenses. Advertising expenses are projected
to grow in proportion to sales growth. Other expenses do not include any strategic spending disproportionate to sales
growth.
Capital expenditures will remain unchanged at the level of previous years, and nothing major is planned.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Consolidated Net Sales and Operating Profit (Results and Targets)
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Targets for FY2023 to 2025

（in millions of yen）

Net sales
Operating profit

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2025（Forecast）（Forecast）

103,288

108,727

124,544

137,264

153,734

174,173

191,247

193,000

216,200

5,167

7,463

8,504

9,688

13,70615,75813,41514,80018,900Note: The net sales and operating profit for FY2018 and FY2020 include one-time gains on sale of real estate properties.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Continue to Increase a Basic Profit: The Group's Most Critical KPIs for
Corporate Management
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Results for FY2016(Percentage of operating
profit to net sales)

ROIC(Percentage of NOPAT toinvested capital)

ROE(Percentage of profit toaverage shareholders’ equity)

Dividend payout ratio(Percentage of total cash
dividends paid to profit)

DOE(ROE x Dividend payout
ratio x 100)Results for FY2022

5.0%

7.0%

12.4%

19.0%

13.0%

20.5%

2.7%

Targets for FY2023 to 2025

7% or more

Operate the Group's business andmanage its portfolio to achieve a
consolidated operating margin of
7% or more

15% or more

Set the minimum to allow theGroup to operate and manage
its portfolio with greater
capital efficiency, which will
enable the Group to achieve a
positive equity spread relative
to the cost of capital

30% or more

Set the minimum at 30%; determine
an actual ratio on a case-by-casebasis after taking into consideration
the need to invest for growth,
including M&A

About 4.5%

Manage business to achieve theright balance between investingfor growth and returning profit toshareholders

30 to 40%

Give priority to keeping thedividend rate on an upward trend;buy back the Company's shares
when they are undervalued in the- 27 market

16.9%

33.9%*

5.7%

Total return ratio(Percentage of the combined
amount of cash dividends paid
and share-buyback to profit)

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Results and Targets

Most critical KPIs

Operating margin

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20.5%

33.9%** The dividend payout ratio for FY2022 is subject to approval at the general shareholders meeting scheduled for June 24, 2022.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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1.

2.
3.

Review of the Mid-Term Management
Plan for FY2020 to 2022

Pages 3 to 15

Mid-Term Management Plan for
FY2023 to 2025

Pages 17 to 27

ESG Initiatives

Pages 29 to 39

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Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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The MCJ Group's ESG Initiatives
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The MCJ Group announced its ESG initiatives in July 2020.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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The Group's ESG Initiatives: Overview of Environmental Initiatives
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High-level objectives

Focused areas• Reduce the environmental impact ofbusiness operations• Develop products with low
environmental impact• Use less energy to reduce theenvironmental impact• Promote the circular use of resources• Make more efficient use of resources
to reduce their consumption• …

JGroup's key initiatives
Adhere to applicable laws andregulations

Adhere to applicable laws andregulations in manufacturing
and business operations

Protect the global environment as a
responsible manufacturer

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Reduce CO2 emissions

Increase natural carbon
sequestration

Take actions inbusiness operations

Help increase naturalcarbon sequestration⚫ Take actions to reduce
CO2 emissions in eachstage of the value
chain, from productdevelopment andmanufacturing to sales⚫ In addition to reducing
the environmental
impact of ouroperations, support
forest restoration
efforts to increase
natural carbon
sequestration⚫ See the following pagefor actions we aretaking⚫ See the following pagefor actions we aretakingPlay an active role as a responsible manufacturer in making circular use of resources andaddressing energy issues
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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The Group's Actions on Environmental Initiatives
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Sales and customer
supportProduct development andmanufacturing

Examplesof actions

Targets
andachievements⚫ Purchase environmentally friendly parts
from suppliers that meet environmental
guidelines⚫ Install photovoltaic systems in somefacilities✓ We have implemented aprocess to increase thepercentage of products thatmeet the Act on Promoting
Green Purchasing.
✓ All our PC products meet RoHS
compliance standards and the JMoss Green Mark Guidelines.

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OthersIncrease natural carbon
sequestration

Reduce the environmental impact⚫ Make greater use of green procurement

C⚫ Switch lighting to LED in stores andplants⚫ Provide funding support to the
National Land Afforestation
Promotion Organization⚫ Accelerate the switching of company
vehicles to hybrid⚫ Promote the 3R efforts; expand thebusiness of selling factory-refurbishedproducts⚫ Support forest restoration efforts
to increase natural carbon
sequestration✓ Lighting power usage is down 60%
at the Iiyama Plant, in which all
lighting has been switched to LED.
✓ The annual power consumption class,energy consumption efficiency, andthe achievement rate for the energy
efficiency standards are disclosed on
our websites for every PC product wesell.
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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The Group's ESG Initiatives: Overview of Social Initiatives
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High-level objectives
Focused areas

Do something positive about ouremployees and communities in which
we operate and employees live
• Upgrade internal and external talentdevelopment programs for employees• Employ diverse hiring practices andinternal programs• Offer more flexible working
arrangements to employees• Work with suppliers to adopt
responsible procurement practices• Do something positive forcommunities in which we operate
• …

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Group's key initiatives
Diversity, equity, and inclusion(DEI)

Talent development

Community engagement

Foster DEI in the workplace,free of discrimination basedon gender, nationality, or age

Offer more flexible
working arrangements
to employees andsupport their individual
talent development

Provide educationaland other support tocommunities in which
we operate⚫ Evaluate and promote
employees based on theircompetence and job
performance, regardless of
personal attributes⚫ Offer employees
working arrangementsthat accommodate
their personal needs⚫ Assist communities inraising preparedness
for natural disasters
and in addressing an
educational divide⚫ See pages 33 through 35
for actions we are taking⚫ Assist employees indeveloping skills tomeet their professionalgoals⚫ Undertake ongoingprograms and provide
quick-fix solutions⚫ See page 36 foractions we are taking⚫ See page 37 foractions we are taking

Make the MCJ Group a greater place to work and make communities greater places to live
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Supplemental Information about our Social Initiatives:
DEI Metrics for Group Employees (1 of 2)
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Number and percentage of employees
by gender by place of work

Number and percentage of employees
by gender by position

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Number and percentage of employees
by gender by employment type

◼ DEI targets
Raise the percentage of female managers from 10%
at the end of FY2021 to 15% by the end of FY2026
MCJ’s board of directors has a member of foreign
nationality and will appoint a female director assoon as possible.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Supplemental Information about our Social Initiatives:
DEI Metrics for Group Employees (2 of 2)
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Number of employees by age groupMore than 40% ofmanagers are
mid-career hires.

The number of new hires

The number of employees with disabilities

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Supplemental Information about our Social Initiatives:
Flexible Working Arrangements for Group Employees
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Average number of paid holidays taken by employees

Employees who take maternity and child-care leave andthe percentage of those who return to work after leave

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Employees who work on reduced hours

Employees who receive nursing-care
support from the company◼ Offer employees more flexible working arrangements, regardless of their life stages and career goals
Encourage every employee who takes maternity and child-care leave to return to work
Encourage employees to take advantage of these flexible working arrangements
The data provided on this page comes from Group companies in Japan.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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The Group's Social Initiatives: Actions on Employee Talent Development
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Recent actions
Offered online training programs toemployees at the height of thepandemic, in addition to traditional OJT
programs.
⚫ Offered all employees OJT training, externallycontracted online training, and in-person training inharassment and other subjects.
⚫ Mouse Computer won an award from Learning
Agency for providing its employees with continued
learning opportunities through offline and online
training.
⚫ MCJ had its executive officers attend an externalmanagement training course offered by a thirdparty specialist, as part of its efforts to develop
leadership talent.

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Long-term talent development programs
Offer aspiring employees diverse career
path options to choose from⚫ Promote non-regular workers to full-time status
and make greater use of internal job postings⚫ Expand programs to retain skilled talent essential
to the growth of the Group and offer employees
career opportunities that meet their individual
needs⚫ The Group expanded the offering of promotional
opportunities to non-regular workers in 2014. A
total of 526 non-regular workers have beenpromoted to full-time status by March 31, 2022.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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The Group's Social Initiatives: Actions on Community Engagement
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Actions taken during FY2022
Donation and sponsorship

Community engagement as part of conducting business

Donate to communities in which we operateas part of community outreach and educational support

Actions taken as part of day-to-day businessto support human capital development in communities

Donated tablet PCs to assist in training children in IT literacy toclose digital divide

Worked with municipalities to develop IT talent and promote
DX; opened a PC workshop for children at KidZania Koshien⚫ Became an official
sponsor for
KidZania Koshien
in Hyogo
Prefecture.

⚫ Signed a partnershipagreement with the
Iiyama city hall in
Nagano Prefecture, inwhich we operate.

⚫ Signed a partnershipagreement with Shikoku
University in community
development, education
programs, and talentdevelopment.

⚫ Opened a PC
workshop forchildren to increase
their IT literacy andraise brandrecognition.

⚫ Wide-ranging
partnership includes
ICT training,
promotion of local
culture with IT, andsupport for theelderly and people
with disabilities.

⚫ Partnership also
includes joint research
into esports and an ICT
environment on thecampus, and thedevelopment DX-savvy
talent.

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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The Group's ESG Initiatives: Overview of Governance Initiatives
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Proactive growth strategy

Reactive approaches

Stakeholder
engagement

Pursue a growth strategy toachieve a sustainable
increase in the Group's
enterprise value

Achieve a sustainable
increase in the Group'ssocial value

Establish long-term
relationships withstakeholders

Focused areas• Present a clearly defined growthstrategy and enhance the system
to implement and manage it⚫

Clearly define a growthstrategy in the Group's longterm vision and mid-term
management plan⚫

Announce ROE and othercritical KPI targets andpublish their progress andresults• Promote fair business practices• Manage risks effectively• Upgrade information security• Enhance stakeholder
engagement

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Group’s key initiatives

High-level objectives

Establish a solid governancestructure that manages bothproactive and reactive approaches

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⚫

⚫

Ensure legal complianceand information security:
establish a whistleblowing system⚫

Diversify members of theboard of directors andpublish their skill matrix⚫

Establish a nonmandatory
advisory board composedof outside directors

⚫

・・・

・・・

⚫

Hold regular briefing
sessions for
institutional investors
and one-on-one
meetings with them⚫

Hold suppliers
meetings

⚫

・・・

• …

Establish a basis for increasing the Group’s long-term enterprise value and social value
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Supplemental Information about the Group’s Governance Initiatives
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For details, refer to the documents listed below, all available on MCJ's website
Corporate Governance Report

Mid-Term Management Plan and Business Strategy

Completely updated in November 2021
and updated on an ongoing basis thereafter

The MCJ Group unveiled its first round of MTMP in May 2016.
MTMP for FY2023 to 2025 is the third round.

Corporate Governance Report

Corporate Vision posted to our website
MCJ’s Approaches to
Implementing Japan’s
Corporate Governance Code

MTMP

Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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Disclaimer
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Forward-looking statements about the Company’s business outlook presented in this document are prepared on thebasis of currently available information, assumptions deemed reasonable, and uncertainties that may affect theCompany’s future performance. We caution that significant risks and uncertainties could cause the Company’s actual
performance to differ from what is discussed in the forward-looking statements.
The Company does not, and is not obligated to, update the forward-looking statements regularly.
Significant risks and uncertainties that may affect the Company's performance include, but are not limited to, thefollowing:
»
»
»
»
»
»

The economic environment and market conditions in which the Group operates
Demand for products and services offered by the GroupThe Group's ability to develop new products and the sales performance of its new products and services
M&A and business partnerships with companies outside the Group
Financial environments, including financing situations and currency rates
Unforeseeable accidents and natural disasters

For inquiries about this document orother IR information, contact:

PR/IR Section,
Corporate Planning Department
MCJ Co., Ltd.
E-mail: ir-otoiawase@mcj.jp
Website: www.mcj.jp/en/
Copyright(C) 2022 MCJ Co., Ltd. All rights reserved.

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