Annual Report 2023
2022.4.1-2023.3.31

Wacom Chapter 3(Since April, 2021)© 2023 Wacom Co., Ltd. Wacom is a trademark of the Wacom Company, Ltd.
All rights reserved. All other company names and product names are trademarks or registeredtrademarks of their respective owners.

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To Our Shareholders
Wacom will continue working to achieve “Meaningful and multi-dimensional growth for people and society” through collaboration with our partners.
Thank you very much for your continued support for
Wacom and its business. I am pleased to present
Wacom’s Annual Report for the fiscal year ended March
31, 2023 – our 40th fiscal year.
Wacom is a “Technology Leadership Company” thatprovides customers with a unique and innovative digital
pen and ink experience: digital writing and drawing.
In May 2021, we announced Wacom Chapter 3: Medium-Term Business Direction for the period ending March
2025, with the aim of achieving further technological andbusiness development. Having passed the halfway pointof Wa c o m C h a p te r 3, we r ev i ewe d p r o g r e s s a n dannounced our “Wacom Chapter 3 Update Report” on
May 11, 2023, adding the outlook for the remaining periodof Chapter 3 and our early thoughts on Wacom Chapter 4.
We intend to maintain and develop our vision of Life-long
Ink to continue providing the value created by digital ink
throughout people’s lives, supported by five strategic
axes. Significant changes in our business environment
associated with the global outbreak of the COVID-19
crisis —including supply chain challenges, inflationarypressure, and rapid changes in consumer behaviors—
have informed our determination to transform our business structure to enable the achievement of higher
medium- to long-term corporate value. Accordingly, we
have designated the second half of Wacom Chapter 3 asa period of business structure transformation, and we will
be focusing on additional measures to achieve this transformation. (For details, please refer to pages 3-6.)

Business results for the 40th fiscal year
(ended March 31, 2023)
For our 40th fiscal year, Wacom posted consolidated net
sales of 112.7 billion yen (up 3.6% from the previous year),consolidated operating profit of 2.0 billion yen (down
84.5% from the previous fiscal year), consolidated ordinary profit of 2.9 billion yen (down 80.0%), and consolidated net profit attributable to owners of parent of 1.8 billion
yen (down 83.6%). In the Technology Solution Businesssegment, sales and segment profit increased. However,consolidated operating profit significantly declined,primarily due to a sales decrease in the Branded Business segment, changes in the sales mix of each segment,changes in the sales mix of each product category in the
Branded Business, and loss on valuation of inventory.
Although the business impact of the situation in Russia
and Ukraine was minor, we continued to provide humanitarian suppor t mainly at our bases in Europe, andresumed direct shipments to Ukraine, which had been
temporarily halted in the previous fiscal year.

1

Strategic initiatives
In line with the five strategic axes set out in Wacom Chapter 3, we conducted a range of initiatives to create newexperiences related to digital pen and ink, working together with various partners who share Wacom’s vision. In May
2022, for example, we resolved to conclude a capital andbusiness alliance with CELSYS, Inc. (“CELSYS”) and toacquire new shares issued by CELSYS through third-party
allocation. Through this business alliance, we have co-developed creative work/experience for education and otherspecific purposes, implemented technologies for theprotection and management of rights and authorship ofdigital artwork, and considered related service operations.
In addition, at a community event, "Connected Ink 2022"
held in November 2022, we announced numerous initiatives to make full use of the latest digital ink technology
with a diverse range of par tners. Examples include“KISEKI ART”, which was co-developed with Preferred
Networks, Inc. and visualizes “trace of creation” utilizing AI
analysis (deep learning), “Wacom Yuify”, which is a rights
protection service for creators combining unique digitalwater marking and block chain technology, and projects todevelop creative potential in the metaverse space. In
March 2023, we also announced our cooperation with
Z-kai Group (Zoshinkai Holdings Inc.) for the developmentof a new learning service utilizing “handwriting x digital”,
which was launched for junior high and high school
students in April 2023.
Turning to the Wacom product line, we began updating
our product portfolio in the Branded Business segmentwith the September 2022 announcement and launch of
Wacom Cintiq Pro 27, a flagship model for professionals.
In the Technology Solution Business segment, our digital
pen technology has continued to be chosen for our customers’ premium smartphone models and has been
adopted by a major Chinese IT company for two generations of tablet PC products. In addition, we have continued our efforts to expand applications for our products,
evidenced by being newly adopted for the e-book deviceof a global IT company. With respect to our business organization, at a meeting of the Board of Directors held on
September 28, 2022, we resolved to establish a wholly- owned subsidiar y in Vietnam, “ Wacom Vietnam
Science and Technology”, to secure stable production
and support quality standards in anticipation of further
production increases expected in that market. The establishment of the subsidiary was completed in May 2023.
(For details of use cases, please refer to “Latest Presentations” on our IR website. This is also accessible via the
QR code on the back cover.)

Forecasts for the 41th fiscal year
(ending March 2024)
On July 31, 2023, we downwardly revised forecasts for the
fiscal year ending March 31, 2024 that were previously
announced on May 11, 2023, primarily due to an expected
decline in demand in the Branded Business segment.
Assuming an average exchange rate of 130 yen to the U.S.
dollar and 140 yen to the euro for the fiscal year, Wacom
estimates consolidated net sales of 103 billion yen (down
9.1% from the previous fiscal year), consolidated operating
profit of 4.5 billion yen (up 123.5%), consolidated ordinary
profit of 4.5 billion yen (up 56.9%), and net profit attributable to owners of parent of 3.3 billion yen (up 84.1%).
The outlook for the global economy remains uncertain,
due to high energy and food prices, rising interest rates
concomitant with monetary tightening by central banks inmajor countries, and continuing geopolitical tensions
caused by the situation in Russia and Ukraine. Based on
Wacom Chapter 3: Medium-term Business Direction andits associated Update Report, Wacom will strive to implement initiatives to further evolve our business model in a
growing sector. We will also work to improve profitability
through company-wide initiatives that include optimizing
our organization--particularly in the Branded Businesssegment-reviewing our pricing strategy, improving
productivity and cost structures, and enhancing sales
channel management.

Shareholder return policy
To reward our shareholders for their continued support, on
June 7, 2023, Wacom paid a full-year dividend for the 40th
fiscal year of 20yen per share (a payout ratio of 176.4%) toshareholders of record at the end of March 2023.
For the 41st fiscal year ending March 2024, we plan to
pay an annual dividend of 20 yen per share (an estimatedpayout ratio of 94.7%), based on our dividend policy ofmaintaining a stable per-share dividend even in the caseof this exceeding our consolidated payout ratio guidelineof approximately 30%, aiming to distribute profits byincreasing dividend-per-share over the medium to longterm while maintaining appropriate financial soundness.
During the fiscal year ended March 2023 we have implemented share buybacks in alignment with our announced
policy of undertaking share buybacks up to a maximumof 20 billion yen during the period of Wacom Chapter 3,
and with due consideration of investment opportunities
and financial circumstances. During the period underreview we acquired treasury shares of 2billion yen (2.8
million shares), with the cumulative amount of treasury
shares acquired since May 13, 2021 totaling 5billion yen.
We also cancelled 8,546,400 treasury shares. In addition,
we announced plans to acquire treasury shares of up to 2
billion yen (up to 4 million shares) during the period May
12, 2023 to September 29, 2023.

Pursuing meaningful growth
July 2023 marked the 40th anniversary of Wacom’s founding. Throughout these forty years, we have supported thegrowth of the digital content production and creation
market, and evolved business models in response tochanges in the social environment, which include thespread of diverse work styles such as digital educationr e fo r m a n d te l ewo r k , a n d th e c r e a ti o n of 3 D a n dcloud-based creative workflows (production processes).
We will continue to provide new value in digital ink technology to our customers and communities in the form of
AI, XR (a new reality combining real and virtual worlds),
and security.
To celebrate this milestone, we are pleased to announce
the publication of the first issue of the “Wacom Story
Book” in May and August 2023 for the Japanese andEnglish editions respectively. The Wacom Story Book
includes ESG information and elements of our integrated
report, and has been compiled by a team of editors to
describe the breadth of Wacom's business and our activities through the eyes of our customers, partners, and ourdiverse team members across the globe. For details,
please refer to our website:
https://investors.wacom.com/en-jp/wacom-story-book/
Wacom will strive to achieve meaningful growth with ourcustomers and partners in diverse communities under
our Life-long Ink vision, while also pursuing financial
growth.
On behalf of the board, I would like to express my sincere
gratitude for your continued support.

Nobutaka Ide
President & CEO

Wacom Co., Ltd.

2

Wacom Chapter 3

Medium-Term Business Direction

Wacom to continue seeking “Meaningful Growth, multi-dimensional
growth for human and society”.
We decided to make use of the lessons we had learned in “Wacom Chapter 2” and advance to the next stage ofdevelopment and evolution and formulated new “Wacom Chapter 3: Medium-Term Business Direction (39th fiscal year
ended March 2022-42nd fiscal year ending March 2025)” and announced on May 12, 2021.

“Wacom Chapter 3” Storyline
VisionSummary of Update Report of Wacom Chapter 3･ The 1st half of Wacom Chapter 3 has been characterized by significant changes in our business environment - including supply
chain challenges, inflationary pressure, and rapid changes in consumer behaviors - associated with the global outbreak of the
COVID-19 crisis in 2020. These changes have informed our determination to transform our business structure to enable theachievement of higher medium- to long- term corporate value.
･ We set FY03/24-03/25 as “the period for transformation of business structure” and connect with further growth in Wacom Chapter
4 (FY03/26-03/29).
･ During FY03/24-03/25 amid projection of severe economic environment forward, we focus on “gross profit improvement” towards
Wacom Chapter 4.

Through Wacom's technology, we will continue to provide meaningful experiences for human and society over the long term, guided by
the vision of “Life-long Ink” to contribute to making this world more humane.

r of i tt
ss P
Gro vemen
o
1
r
p
Im
Re-new of Products
Portfolio and GP
improvement①Technology Leadership
Focus on technological innovation,
the source of Wacom's value proposition

5 key strategic
initiatives④Technology Innovation for

Sustainable Society②Community Engagement
Deepen engagement with the community
to create valuable experiences

Contribute to the development①New value proposition②Price contributing GP③Cost reduction by value
engineeringof a sustainable society through technology⑤Meaningful Growth③New Core Technology, New Core Value Proposition

Exploring multi-dimensional growth

Create new value based on new core technologies

Technology Roadmap

5 Key
Strategic
Initiatives

Main TechStreamVision5
Value
Proposition

GrowthImageD3r of i tt
ss P
Gro vemen
o
r
p
Im

4

n
s i tioh p o m e ntsa
C roveImp

Market development
in focused area

Enhance sales channel
management

Improveinventory management①Creative education②New workflow(remote/virtualization)③Solution based value
proposition①Enhance B2B- Solution based sales- Direct engagement with
B2B customers②Enhance e-store- experience based sales- User engagement.

①Target to reduce 1/ 3 ofcurrent inventory (by theend of FY03/24)②Minimize additional orderof excessed items③ Enhance monitoring oforder status

Short term goal:
Turn around of Branded Business in FY03/24

EngageSociety/Community
Strategy2ket
M a r me nt
p
o
l
eve

Meaningful
GrowthImprovement ofManagement Quality

Case studies representing progress for 5 key strategic initiatives in the first half of “Wacom Chapter 3”ee nu
Rev w th
o
Gr

6

e
e nu
Rev w th
o
Gr

7

ital
Ca p m e n t
g
a e
Man

8

ket
M a r e nt
w
e
m
N
e lop
Dev

Expand customers
and pen & ink use caseMarket developmentin General education

Capital management
Return to shareholders

New service businessdevelopment①de-facto standard②original HW(system/pen/
service) will be developed
to expand the pen/ink use
case.

①Solution development for
general education②HW+SW+service will bedelivered as total value
proposition①Capital allocation &investment for future②Additional treasury stockacquisition(up to 10 billion
yen in additional)①New service in 3 area
(A.I., XR and Security)②Investment plan.

① We took the lead in product portfolio renewal with our flagship LCD pen tablet model "Wacom Cintiq Pro 27", and provided
professional creators with creative experiences by meeting their expectations.
② We have been promoting collaboration with various communities such as technological community to co-develop new technologies,
business community to cultivate new businesses, and cultural community to create new cultural experiences.
③ We have been promoting technology development to provide new experiential value by combining digital handwriting technology withcore technologies in three fields – AI (artificial intelligence), XR (cross reality) and security.
④ As part of our product and technology development, we worked on the development of products that are easier to repair andimproving product packaging through simplification and the use of recycled materials. We also conducted joint research withacademia to develop new materials that are more environmentally friendly.
⑤ To help those members to experience what the Meaningful Growth (Exploring muti-dimensional growth) embodies, we holdcommunity event called Connected Ink in November every year. In addition, to help them better understand our approach, wepublished the Wacom Story Book, which focuses on our experiential value and approach to it, on May 10, 2023.

3

Wacom Chapter 4 (FY03/26-FY03/29)
・Double digit OP% from FY03/26 onwards
・New service business official launch from FY03/26 onwards

Branded BusinessTechnology Solution Business

All Corporate

4

Wacom Chapter 3

Medium-Term Business Direction

Summary of Update Report of Wacom Chapter 3
1

Product portfolio renewal and gross profit improvement (Branded Business)

Capital Allocation (FY03/2024- FY03/2025)

・Renew all product portfolio in the Branded Business in FY03/24-FY03/25.

Cash outflow

・Implement strategic pricing policies to counter rising costs.
・Improve cost structure by task force approach co-worked by engineering and supply chain teams.

2

Ordinar y investment to continue
our business such as metallic moldand tools, etc.

Capital investment

We aim to increase operating cash
flow by improving gross profit andreducing inventory, etc.

Market development in focused area (Branded Business)
・Shift the concentration of resources from general education to creative education in terms of access to the educa-

R&D investment to be recorded in
profit and loss for the periodtion market through the Branded Business.

Capital cost consciousness

・Establish the position of Wacom devices within the new creative workflows in order to maintain and expand its position in the professional creator market.

3

Cash inflow

Enhance sales channel management (Branded Business)

Operating profit (excl. R&D cost）
Operating cashflow（excl. R&D cost)

Growth investment

Investments for fixed assets suchas capital investment and IP acquisitions

Normalization of inventory level

・Enhance B2B and e-store channel (in-house online sales store) for building deep, direct relationships with customers, aiming to promote the transition to providing solution-type value.
・Integrate Creative BU and Business Solution BU into ONE BU to promote the transition to providing solution-type
value.

4

Improve inventory management (Corporate wide)
・Aim to reduce inventory balance of approx. JPY 30bn at the end of Dec. 2022 by approx. JPY10bn at the end of

Our priority is to maintain a stableper-share dividend even with theattainment of our guideline approx.
30% payout ratio.
Under the policy of treasury stockacquisition up to JPY 15 bn, we
announced to acquire treasury stock
up to JPY 2 bn on May 11, 2023

Strategic
investment

Shareholders return
Financial leverage, etc.

We will utilize financial leverage up
to a debt-to-equity ratio around0.3x to 0.5x, ensuring financial
soundness.

FY03/24.
・More detailed management of promotions for current products and optimization of timing of new product launches.
・Enhance monitoring to avoid excessive ordering by setting more detailed volume control gates at the time of ordering.

8

Digital Ink Service launch and investment (Corporate wide)・Launch a new Digital Ink Service
as “Experience delivery business”,

5

Expand customers and applications (Technology Solution Business)in addition to the existing Branded

・Drive “De-facto standardization of Wacom technology” to maximize customers portfolio for products equipped with

Business and Technology Solution

digital pens.

6・Begin commercial service imple-

tomer groups, by combining proprietary hardware with applications and services to expand new usage for pens.

me nt atio n with s m a ll s c a le in・Develop solutions for general education (for education, develop a hybrid with Branded Business, focusing on creative education), through OEM customers’ product lines.
・Deliver an experience supporting learning that combines hardware and service software.

7

Business.

・Develop and deliver the overall experience of pens (E2E* platform business), leading to the expansion of new cus-

Business development in the field of general education (Technology Solution Business)

R&D breakdown

approx.25%
Three Value proposition
generatedby common technology
development

ment in the next phase, “Wacom
Chapter 4.”, while accumulating
experiences. (sales target: JPY
5bn scale)

Platform Development

Technology
Solution
Business

BrandedBusiness

ASIC, Firmware, sensors

approx. 25%

Each business isleveraging each other

Product Development
Product/Technology module
development

・Prioritize growth investments and strategic investments to create future corporate value, and actively return surplus
funds to shareholders. Meanwhile, for the source of funds, pursue capital efficiency through the use of financial“Financial Policy Guidelines” Updateleverage (interest bearing liabilities) while ensuring financial soundness.

1. Business efficiency

age that can ensure financial soundness.

Digital Ink
Service

FY03/24 and full-scale develop-

Capital policy/Shareholder returns (Corporate wide)

Aim for a debt-equity ratio (D/E ratio) of around 0.3x to 0.5x (currently about 0.2x) as the degree of financial lever-

Digital Ink/SW Development
New core technology,
Digital ink technology(AI, XR, Security, Remote).

approx.50%

ROIC: recover to 10% or more in FY03/25 as a guide for business management (prior to update: approx. 25-30%)

2. Capital efficiency
ROE: assume approx.10-15% in FY03/25 (prior to update: approx.20%)

3. Shareholder return
Strive to maintain a stable per-share dividend even with the attainment of our guideline approx.30% consolidated
payout ratio, subject to also maintaining appropriate financial soundness.
*E2E (End to End): Deliver the full pen experience to customers according as specific pen use case with semi-completed solution, not only just component
and technology module delivery.

5

Flexibly consider treasury stock acquisition as a means of realizing capital efficiency with respect to portions notcovered by dividend payments, taking into account investment opportunities and financial conditions.

6Growing with Communities & Society"LIMITS" is the freestyle battle of the creative world.
Connected Ink 2022 included an exhibition match
between two high school teams.

Talk session at Connected Ink
in the United States

Our “Connected Ink 2022” events reached beyond Wacom, bringing together diverse industries,
cultures, and categories to develop technology and build experiences as a global community.
Photos on these pages show scenes from event locations worldwide.

"LIMITS High School EXHIBITION" ~ Competition by
young creators「LIMITS High Schoolers EXHIBITION」

Connected Ink Village has been playing its role as an organization that implements initiatives
to consistently support "Art, Technology, and Learning" from a longer-term and social perspective.

Session for partner companies
at Connected Ink in China

The event attracted participation by a stationery company
taking on the digital realm, leveraging their analog expertise.

Connected Ink in Germany
Introduction of new online class solutions
utilizing digital pen and ink

https://www.wacom.com/en-jp/events/connected-ink/stories/online-sessions-overview
Connected Ink 2022 events and sessions can be viewed from the website.

7"Metamorphosis" session exploringnew possibilities through VR space8

Business Lines

Hot Topics

Wacom has established the global organizational structure, to manage its
two business segments, where business units and divisions operateaccording to characteristics of respective businesses.

Wacom Cintiq Pro 27 with enhanced design, technology, and engineering,reflecting the voices of professional creators

We will aim for business growth globally by accelerating technological innovation, utilizing management resources in linewith business goals.

Branded Business・Wacom-branded products and solutions for creative users andenterprise
Product line: Display, Pen tablet, Mobile,
LCD signature pen tablet, etc.

Ink Division
・Development of digital ink
technology and related
product,
software solution services, etc.

Technology Solution Business・Technology solution for OEM partners of smartphone,tablet and note PC, etc.
Product line: AES/EMR® digital pen technology solution, etc.

Two unique Wacom technologies for accurate, smooth,and intuitive writing/drawing experiences on digital devices

Sales by Segment & Product line

Sales by Regional Subsidiaryfor the fiscal year ended March 2023

for the fiscal year ended March 2023

Technology Solution Business
63.5%

EMR ® technology
solution, others
42.8%

Consolidated
Net Sales
112.7 billion yen

AES technology solution
20.7%

Our EMR pen solution has been adopted for Samsung's foldable smartphone Galaxy Z Fold4
and Galaxy S23 Ultra (a garaged pen for the S23 Ultra). The functionality of these pens goes far
beyond writing and drawing to include intuitive tools for enjoying music and movies,
manipulating presentation materials, and operating the selfie camera function. Wacom’s Active
ES solution was adopted by many Windows tablet devices, including the standout Lenovo
ThinkPad X1 Fold Gen 2 with a large 16-inch foldable screen.

Japan
5.4%

Branded Business
36.5%

Asia/Oceania
11.0%

Display
18.3%

Consolidated
Net Sales
112.7 billion yen

Pen tablet
13.1%
Mobiles, others
1.4%

Technology
Solution Business
63.5%

Americas10.9%Europe
9.3%

LCD signature pen tablet
3.7%( Note ) There are no regional segments in the Technology Solution
Business due to the regional sales depending on OEM partners.
(sales price is mainly determined in US dollars.)

9

The Wacom Cintiq Pro 27 is a large-sized creative pen
display de signe d for p rofe s sional cre ator s such a s
illustrators, 3D modelers, animators, game developers, andvirtual production artists. The model has been well received,
thanks to its seamless operation with creative software,
great pen accuracy, and multi-touch handling. Creators also
appreciate Wacom's first 120Hz refresh rate, vivid andaccurate color reproduction capability, and a productdesigned for ease-of-use and superior customizability. By
incorporating user feedback into these high priority features,
Wacom has set a new standard in immersive, creativeenvironments.

Samsung
Galaxy S23 Ultra

Lenovo X1 Fold Gen2

10

Our Business
Wacom’s business consists of two categories. The Branded Business handles creative pen displays and pen tablets that allow creators to express their creativity
without limits, and digital pen solutions to implement handwriting into digital document workflows. The Technology Solution Business enables customers tointegrate digital pen functions into IT devices and digital stationery.
Branded BusinessTechnology Solution Business

Through Wacom-branded hardware and solutions, we provide new experiences and value for a wide range of users, fromdigital drawing beginners to professional creators. We are also working to grow our B2B and direct sales channels, aiming
to be highly responsive to our customers’ needs.

The Technology Solution Business provides digital pen (EMR®: Electro Magnetic Resonance and Active ES ®) technologies
and multi-touch technologies that we have cultivated in pen tablets, on an OEM (original equipment manufacturer) basis.

Our flagship model Wacom Cintiq Pro 27 reflects extensive feedback from professionals and spearheads a comprehensive portfolio of Wacom products for each market segment. Our attractive line up also offers comprehensive options toaddress different use cases and environments, including remote work and virtual workflows, delivering Wacom digital pen
experiences for every creative endeavor.
Wacom is a steadfast supporter and product provider to specialized higher education institutions such as vocational
schools for creators. We also support K-12 art and related creative education, using our unique experience and solutions
to foster the creativity of the next generation.

As educational use of tablet devices at schools and prep schools becomes the norm, we expect demand for digital penswill rise accordingly. The use of these pens will also become common in the workplace, with online meetings and telework
helping drive an increasingly digital document exchange workflow. Wacom provides its digital pen solutions (both EMR
and Active ES) to a wide range of OEM customers, including IT mobile product manufacturers and stationeries.
Key customer product categories:
Smartphones, tablets, PCs, eBooks, digital stationery, digital notebook devices, and music score devices

Digital pen for input
Selectable from types of
EMR ® and Active ES ® fora variety of devices

Lenovo X1 Fold Gen2

Samsung
Galaxy Z Fold4

Touch panel + Controller IC

Sensor Board + Controller IC
for EMR ® typeThe accelerating shift toward document digitization andpaperless operations opens the door to a wide range ofapplications for the Business Solution segment, including:• Enterprise document management applications• Financial institutions (contract presentation and signing)• Hotels (check-in kiosks)• Public offices (registration document processing)• Healthcare service providers(electronic medical records)

11

Samsung
Galaxy S23 Ultra
Tablet device for Z-KAI

Ink Division
Digital ink generated by digital pens can be used as “digital data”, containing various
information such as the user’s details and even the direction and sequence of pen strokes.
Wacom collaborates with a range of partners to create additional value out of digital ink.
One example of this collaboration in the educational field is the development of tools toenhance students’ motivation by measuring the amount of digital ink they use andfacilitating objective self-review of problem solving process.

Wacom Ink Layer Language

12Social Initiatives

Eco Initiatives

Wacom is committed to contributing to social initiatives throughour technology and business activities, and to increasing long-term growthand corporate value.

Response to Climate Change

Wacom contributes to the realization of a sustainable society in our own unique way, exploring the possibilities that the“Life-long Ink” vision can offer society by supporting writing and drawing both now and in the future.

Climate change derived from global warming has become a serious problem on a worldwide scale. There is a growing
trend towards acceptance, embracement, and implementation of ESG*1 /SDGs*2 policies every year in many countries,
municipalities, and companies. Every country will set reduction targets on greenhouse gas emissions after 2020 based on
the Paris Agreement and promote the introduction of renewable energy sources and development of eco-friendly products
and/or services.
Wacom recognizes climate change as an important issue in environmental management. We are promoting the reductionof greenhouse gas emissions and conduct of business activities with careful consideration of possible risks andopportunities in our business environment brought about by climate change. We are also promoting a Business Continuity
Plan (BCP) in response to the possible risk that our activities may be restricted by an increase in natural disasters such as
floods. In addition, we are reinforcing our organization structure based on the recognition that the development of
eco-friendly products could be an opportunity. Furthermore, we ask our partner companies to review, approve, and follow
the Wacom Suppliers Code of Conduct, which could lead to CO2 emission reduction in thewhole value chain.

Mid-term Target
Wacom outsources almost all production processes to overseas factories and CO2
emissions from the business activities of Wacom itself are not significant. However, we havebecome a member of the Japan Climate Initiative (JCI) and set a mid-term target on CO2emissions for FY2030 to contribute to global GHG*3 reduction.
Following office relocation and extension completed in 2013, we set FY2014 as the base year. We will reduce CO2
emission at a 4% annual rate (i.e., 48% reduction in total) and achieve 715 t-CO2 in 2030. From November 8, 2022, webegan utilizing Sai no Kuni Furusato Denki (renewable energy from post-FIT sources) at our head office in Saitama Prefecture.
This is expected to enable achievement of zero CO2 emissions (Scope 2) from our head office, and reflected in theenvironmental performance data for fiscal year 2022.

Social Initiative Website : https://www.wacom.com/en-jp/about-wacom/social-initiatives

For further information on our environmental performances such as data of electricity consumption, CO2 emissions(Scope 1, 2, 3), water consumption, and waste, please refer to our website of “Eco Initiatives.”
URL: https://www.wacom.com/en-jp/eco-initiatives

CDP Score*4
Wacom’s social initiatives are driven by our team members—our employees—who want to support their communities orhelp people close to them through the value of Wacom’s products, business, services, and experience. During our 40th
fiscal year ended March 2023, our social initiatives included collaborating with creators in Oiso Town, Kanagawa Japan,
and through this and other activities outlined on our website we hope that the spark of creativity will be felt by everyone
who engages with Wacom as we find unique ways to contribute to the world around us.
Our website includes information about Wacom’s ESG (Environmental, Social and Governance) activities, policies, code of
ethics, and organizational set-up, including our Quality Assurance & Environmental policies, the Wacom Code of Ethics,
and the Wacom Supplier Code of Conduct. The site also explains Wacom’s internal control system, which is designed tomeet our fundamental responsibility for robust compliance and corporate governance.

Wacom has been submitting CDP questionnaires every year since 2019. Our score of climate was C in 2022. This isequivalent to the global and Asian average, as well as the average of Electrical & electronic equipment sector.

*1 Environmental, social and corporate governance (ESG).
*2 United Nations 17 Sustainable development goals (SDGs).
*3 Greenhouse gas.
*4 CDP is a UK-based non-governmental organization engaged in activities to promote information disclosure on environment at the request of corporate
investors and companies.

13

14

Corporate Governance as of June 29, 2023

The Board of Directors as of June 29, 2023

Corporate Governance:
Our commitment to fairness, transparency and quality management

Board of Directors

Wacom made the transition to a “Company with an Audit
Committee” in June 2015. The Board of Directors' meetings are regularly held once a month to make prompt,
appropriate decisions regarding overall management,
including reviewing management policies, examining the
progress of business operations, and general business
management and supervision. In addition to board meetings, Audit Committee members attend other important
meetings to monitor the execution of business by directors.

The Audit Committee also sets the audit plan and policy
for the fiscal year, which is discussed with the group CEO.
To ensure a highly transparent and fair management
system, majority of the membership of the Board of
Directors consists of outside directors (all are independent directors as specified by the Tokyo Stock Exchange).
Also, we have defined the term of office of non-Audit
Committee directors as one year, and further clarified
their management responsibilities to shareholders.

Execution of Operations, Audit, and Internal Control Systems as of June 29, 2023

Ordinary Shareholders’ Meeting
Election/dismissal

Nominating
Committee
Compensation
Committee

Election/dismissal

Election/dismissal

Advice &Recommendation

Accounting Audit

Board ofDirectors

Dismissal

Audit
Committee(From the left in the upper portraits)
Nobutaka Ide, President & CEO
Yoichi Machida, Director and EVP, CFO
Sadao Yamamoto, Director and EVP, CTO
Yukio Usuda, Director and EVP, IT, Legal, IP, Corporate Strategy

Accounting
Auditors

Cooperation(From the left in the bottom portraits)
Ken Inazumi, Outside Director
Mikako Inamasu, Outside Director
Shigeki Higashiyama, Outside Director (Audit Committee) (full-time)
Takashi Kamura, Outside Director (Audit Committee)
Osamu Hosokubo, Outside Director (Audit Committee)
EVP： Executive Vice President

Advice &Recommendation
Cooperation

Group CEO

Human Resource Committee

Executive Committee

Policy Process andControls Committee

Business Unit Entity

Compliance and Risk Committee
ReportSkill Matrix

Report

NoticeIn the medium-term business direction, Wacom will provide meaningful experiences and deliver these experiences to customers,
through its technology. In addition, we will learn together with diverse community (different cultures and industries) and connect
technological innovation to sustainable society. We will promote to plan and implement measures in the belief that these activities willbring about the growth for various partners who share Wacom’s vision and diverse and multi- dimensional society. Wacom has
appointed directors with the intention of the above, and skill matrix of its directors is as follows:

ReportAssessment

Wacom Speak-up Line

Audit

Internal Audit

NoticeEmployee

HR ＆
Finance ＆ Organization
Accounting Development

Management

Overseas
Business

Nobutaka Ide

○

○

―

―

○

―

―

○

○

○

Yoichi Machida

―

○

○

―

―

―

―

―

―

―

Sadao Yamamoto

―

―

―

―

―

―

―

○

―

○

Yukio Usuda

―

○

―

―

―

○

○

―

―

○

Ken Inazumi

○

―

―

―

―

―

―

―

○

○

Mikako Inamasu

○

―

―

○

○

―

―

―

―

―

Shigeki Higashiyama

―

○

―

○

―

―

―

―

―

―

Takashi Kamura

―

―

―

―

―

○

○

―

―

―

Osamu Hosokubo

○

○

○

―

―

―

―

―

―

―

Name

Diversity &Inclusion

Legal &
Risk
Proprietary
Community
Compliance Management Technologies Engagement*2

Ditgital
Services*3* 1:Diversity & Inclusion means the opportunity and culture for diverse human resources to recognize and accept each other.
* 2:Excellent skills of community building and ecosystem development, which are important elements of the medium-term business direction “Wacom Chapter 3”.
* 3:Excellent knowledge of the industry and technology in addition to IT experience at the Company.

15

16

The Board of Directors Biographies

List of Members of the Board of Directors as of June 29, 2023
8 males and 1 female(ratio of female member of the Board of Directors of Wacom Co., Ltd.: 11.1%)

Incentive Policies for Directors

Name / Date of birth / Number of Shares Owned as of March 31, 2023 / Brief of Biography
NobutakaIde
May 19,1970
66,364
sharesApril, 1995 Joined Sharp Corporation
August, 2013 Joined Wacom Co., Ltd.
General Manager, Technology Marketing
Department, Component Business Unit
April, 2015 Vice President, Technology Solution Business
Unit
July, 2015 Senior Vice President, Technology Solution
Business Unit

Ken
InazumiJanuary 22,
1974-

June, 2018 Outside Director, Wacom Co., Ltd.
(current position)
June, 2019 Director and Senior Corporate Executive Officer,
transcosmos inc.

February, 2021 Representative Director, Connected Ink Village,
General Incorporated Association(current position)

April, 2021 Vice President and Executive Officer, XPRICE
Inc.

October, 2015 Joined Fujicco Co., Ltd.

March, 2023 Managing Executive Officer, MASH Holdings
Co.,Ltd. (current position)
MikakoInamasu
April 12,1960

April, 2016 Head of Corporate Planning
January, 2018 Joined Wacom Co., Ltd.
Senior Vice President, Finance

12,000shares

770,846
sharesMarch, 1987 Joined Wacom Co., Ltd.

Yukio
Usuda

June, 1999 Director
April 2010 Director, Operating Officer and General
Manager of R&D Office

December 8,
1968
26,468sharesJanuary, 2005 Joined Wacom Co., Ltd.
April, 2009 General Manager, Global Marketing and Sales
Division, Business Administration Office
April, 2015 Vice President, CEO Office
April, 2017 Executive Vice President (current position),
Corporate Strategy
June, 2017 Director (current position)
June, 2021 IT, Legal, IP, Corporate Strategy(current position)

October, 2013 President and Representative Director

June, 2022 Representative Director, One Drop Ocean
Foundation, General Incorporated Foundation(current position)

April 2014 Director, Operating Officer and Division General
Manager of Technology Development Division

July, 2004 Joined Matsushita Toshiba Picture Display Co.,
Ltd.

October, 2005 Executive Vice President, HR Institute Co., Ltd.

June, 2021 Outside Director, Wacom Co., Ltd.
(current position)

June, 2004 Director and Operating Officer in charge of R&D

April, 1991 Joined Toshiba Corporation

April, 2005 Professor, Business Management, Business
Breakthrough Graduate School(current position)

January, 2020 Chairman and Representative Director, HR
institute Co., Ltd.

April, 1998 General Manager of Basic Development of ESD

April, 2015 Director and Chief Technology Officer(current position)

November, 1993 Director, HR Institute Co., Ltd.

June, 2019 Councilor, Thunderbird School of Global
Management, General Incorporated Foundation(current position)

June, 2018 Director (current position)

April 13,
1961

April, 1983 Joined FUJITSU LIMITED

December, 2017 President and CEO, HR Institute USA, Inc.
(current position)

April, 2018 Executive Vice President, Chief Financial Officer(current position)

Sadao
Yamamoto-

ShigekiHigashiyama
February 15,
1958
10,000sharesApril, 1982 Joined Nomura Research Institute, Ltd.
October, 2000 President, Nomura Research Institute Hong
Kong
President, Nomura Research InstituteSingapore
April, 2005 Head of Corporate Planning Division, Nomura
Research Institute, Ltd.
April, 2006 Senior Managing Director and Head of
Personnel Division.
April, 2008 Senior Managing Director and Division Manager
of Asia Region
Director, iVision Shanghai Co., Ltd.
April, 2012 Senior Managing Director and Division Manager
of China & Asia Region
April, 2015 Senior Corporate Managing Director
President, Nomura Research Institute Asia
Pacific Private Limited
April, 2016 Counselor

April, 1975 Legal apprentice
April, 1977 Appointed as a judge
May, 1983 Registered as an attorney-at-law
April, 1985 Established Kamura Law Office(currently Urbantry Law Office),
Representative (current position)
June, 2002 Outside Auditor, Wacom Co., Ltd.
November, 2014 Outside Director, AZUMA Co., Ltd.
(current position)
June, 2015 Outside Director (Audit Committee Member)(current position)

Osamu
Hosokubo

April, 1983 Joined Nippon Trust Bank Co., Ltd.
(currently Mitsubishi UFJ Trust and Banking
Corporation)

February 3,
1961

July, 1989 Joined JAPAN-ASEAN Investment Co., Ltd.
(currently Japan Asia Investment Co., Limited)

June, 2021 President and CEO, XPRICE Inc.

April, 1986 Joined Sony Corporation(currently Sony Group Corporation)

May, 2013 Diretor Financeiro, Sony Brasil Ltda.

February, 2014 President and CEO

November 16,
1950

March, 2017 Corporate Executive Officer, transcosmos inc.

April 2018 President & Chief Executive Officer(current position)

20,272sharesApril, 2013 Director and COO, NHN PlayArt Corporation(current NHN Japan Corp.)

Takashi
KamuraDecember, 2017 Senior Corporate Executive Managing Officer

June, 2017 Director

January, 2001 General Manager, Sony Europe B.V.
September 8,
December, 2004 Senior Manager, Corporate Planning, Sony
1962
Corporation

January, 2012 Operating Officer and Management PlanningManager, NHN Japan Corp.
(current LINE Corporation)

October, 2015 President and CEO, NHN Techorus Corporation

April, 2017 Executive Vice President, Technology Solution
Business Unit and Platforms & Applications
Business Unit

Yoichi
MachidaJanuary, 2010 Director, AlixPartners Asia LLC

1,000
sharesApril, 2005 Executive Officer
June, 2007 Director
June, 2012 President & CEO
July, 2017 CEO, Great Asia Capital & Consulting LLC(current position)
October, 2017 Outside Director, SHIKIGAKU. Co., Ltd.
(current position)
November, 2017 Outside Director, Saisan Co., Ltd.
(current position)
December, 2018 Outside Auditor, Malignant Tumor Treatment
Technologies, Inc. (current position)
June, 2019 Outside Director (Audit Committee Member),
Wacom Co., Ltd. (current position)
March, 2020 Outside Director, Roland DG Corporation(current position)
November, 2020 Outside Director, ANSeeN Inc. (current position)

Note: Mr. Ken Inazumi, Ms. Mikako Inamasu, Mr. Shigeki Higashiyama, Mr.
Takashi Kamura, and Mr. Osamu Hosokubo are independent outside
directors.
Audit Committee consists of Mr. Shigeki Higashiyama (Chairperson),
Mr. Takashi Kamura (Member), and Mr. Osamu Hosokubo (Member).
The terms of office of Audit Committee members is two years from theOrdinary Shareholders' Meeting on June 28, 2023 for Mr. Takashi
Kamura and Mr. Osamu Hosokubo, from the Ordinary Shareholders'Meeting on June 28, 2022 for Mr. Shigeki Higashiyama.

The amount of compensation for each director of the Company
is composed of fixed salary, which is paid monthly as basic
compensation to all directors, and short-term incentives andlong-term incentives, which is paid to directors (excluding outside directors). The total amount of compensation for directors
consists of 15%-20% of long-term incentives and 80%-85% of
the following allocation, 60%-75% of fixed salary and 25%-40%
of short-term incentives, of which composition ratio is definedby each position.
Short-term incentives are performance-linked compensation(bonuses) consisting of company performance and individual
performance and are paid once a year at a fixed timing.
The company performance por tion is calculated based on
the performance targets for a single year, and the individual
performance por tion is calculated based on the individual
performance evaluation. The both portions are paid between
0%-200% depend on the achievement rate.
Long-term incentives for directors are composed of
per formance-linked compensation and stock price-linked
compensation, and the decision of whether or not to implement
the program shall be made by the Board of Directors every year.
The proportion of each compensation out of total long-term
incentives shall be determined by the Board of Directors upon
the proposal of the Compensation Committee. As for the
performance-linked compensation, the Company shall set theperformance evaluation period consisting of multiple fiscal years
and its performance targets for the period. After the end of theperiod, the Company shall pay the compensation based on
the payout rate linked to the extent to which the performance targets are achieved. The performance targets are resolved by the
Board of Directors following the proposal of the Compensation
Committee.
As for the stock price-linked compensation, in the form of a
restricted stock compensation plan, the Company shall grantmonetary compensation claims to the eligible directors for the
allotment of restricted stock, each fiscal year in principle, upona resolution by the Board of Directors of the Company, and byhaving them make contribution in kind using all the monetarycompensation claims as contributed assets, shall issue or
dispose of its shares of common stock to the eligible directors
and release the transfer restriction when the directors retire. In
addition, the total number of shares of common stock to beissued or disposed of by the Company under the Plan shall be
up to 200,000 shares per year. And the amount to be paid inper share shall be the closing price of the Company’s common
stock on the Tokyo Stock Exchange on a business day prior to
the date of each resolution by the Board of Directors. The specific timing of payments and allocation to each eligible director
shall be determined by President & representative director of theBoard of Directors and the chairperson of the Compensation
Committee, which are delegated by the Board of Directors.

June, 2018 Outside Director (Audit Committee Member),
Wacom Co., Ltd. (current position)

17

18

Visions and Initiatives related to Sustainability

In the medium-term business direction “Wacom Chapter 3’, Wacom Group holds up “Technology innovation for Sustainable society (contribute to the development of sustainable society through technology)” and “Meaningful Growth (aim toachieve growth with multi-dimensional meanings, along with financial growth), and regards initiatives related to sustainability as important elements of corporate strategy of the Group. Wacom Group strives to provide wide range of information
related to efforts made for sustainability, investment on human capital and intellectual property and others. In this context,
it has been introducing specific activities and cases at the community event “Connected Ink”. In addition, it introduces its
vision related to sustainability in the “Wacom Story Book.”
Please note that the above-mentioned issues related to the future are based on judgement by Wacom Group as of the endof the current fiscal year.

(4) Metrics and targets

1. Addressing to climate change

The Company discloses its environmental activities in “Eco Initiatives” on its website.
https://www.wacom.com/en-jp/eco-initiatives
The Company introduced the endorsement of the Task Force on Climate-related Financial Disclosures (TCFD) in the“Wacom Story Book” on its website.
https://investors.wacom.com/wp/wp-content/uploads/2023/08/72-77_E.pdf

Wacom Group regards addressing to climate change as one of its key management issues. It has participated in theJapan Climate Initiative (JCI), has endorsed the Task Force on Climate-related Financial Disclosures (TCFD) and has
disclosed its target set for CO2 emissions in the year 2030.

As part of response to climate change, Wacom Group participates in the Japan Climate Initiative (JCI) and have set andannounced an intermediate target for CO2 emissions to be achieved by fiscal year 2030 in order to achieve carbon neutrality by 2050. Considering early introduction of renewable energy, the Company aims to reduce CO2 emissions by 48% by2030 compared to 2014 as the base year, aiming to emit less than 715 t-CO2. The Group discloses its activities related togreenhouse gas emissions and specific CO2 emissions reduction on its website, and updates information according to theprogress of those activities and changes in external requirements.
The Company discloses its environmental activities in “Eco Initiatives” on its website.
https://www.wacom.com/en-jp/eco-initiatives(1) Governance
Wacom Group has established an ESG Task Force to ensure that the Board of Directors appropriately supervises andadvises on important issues related to sustainability, such as climate change. The ESG Task Force meets regularly to
examine specific sustainability policies and consider strategies, measures, and progress toward environmental targets.
Participants include the President and CEO, the CFO, the manager of the environmental promotion section, the secretariatof the Compliance and Risk Committee, and IR staff. Of the matters discussed by the ESG Task Force, important subjects—particularly those related to management risks and opportunities—are reported annually to the Board of Directors,
which includes outside directors.

(2) Strategy
Through the ESG Task Force, Wacom Group collects data within the parameters necessary to identify and assess climatechange-related risks and opportunities and analyzes the degree of business impact.
In considering and analyzing the degree of impact and potential countermeasures, the Group utilizes scenarios publishedby the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC), and analyze theimpact based on two different scenarios for the year 2030.
Wacom Group conducted scenario analysis of possible impact as of the year 2030 during the fiscal year ended March2023 based on two hypotheses: a world in which global warming becomes more serious (4°C scenario) and a world inwhich the transition to decarbonization accelerates (1.5°C scenario). In the process of analysis, the Group recognizes,
among direct impacts on it, physical risks such as flood damage due to weather disasters mainly at overseas bases aswell as in Japan, and transition risks for decarbonization including carbon pricing in consideration of size of its groups’
CO2 emissions. On the other hand, the Group recognizes the potential business opportunities through its products andservices that meet new customer needs arising from changes in various market trends resulting from adapting to climatechange. For example, demand for pen tablet products may increase in various situations when whole society goes paperless. Based on the above study and analysis, Wacom Group believes that addressing to climate change is not only measures to avoid or mitigate its group’s risks, but also is its group’s key issue from the perspective of contribution to society.
It strives to promote these initiatives through integrating climate-related issues into its corporate strategy. For more detailsof analysis, the Group discloses them on its website.

(3) Risk Management
Wacom Group integrates risk management of climate change with management process of other risks, and totally manages those risks at the Compliance Risk Committee chaired by the Group CEO. The managers of each department, including
its overseas subsidiaries, are required to report to the Committee in case they realize risks or predict significant changes
in risk profiles. As for risks related to climate change, the ESG Task Force oversees identification and evaluation of thoserisks. For risks with a significant potential impact on the Group, the ESG Task Force collaborates with the Committee, sharing information, to ensure appropriate management and supervision by the Committee to minimize impact on the Group.
These activities are regularly reported to the Board of Directors by its Group CEO.

19

2. Enhancing human capital and ensuring diversity
Wacom Group recognizes that it is important to enhance human capital and secure diversity for improvement in sustainability.

(1) GovernanceAs part of Wacom Group’s diversity and inclusion measures, based on its basic policy of building close relationships withindividuals, it values interactions between team members, respecting their individuality, and promoting measures thatallow them to make autonomous career choices.
Wacom Group places great importance on dialogue with each person in its team. The Group conducts fair personnel evaluations based on their ability and achievements in its basic principle, and recruits human resources and appoints managers based on their ability without regard to gender, nationality, age, new graduates, or mid-career hires.
Wacom Group conducts appointment and dismissal of the Group's directors and key executive management in accordance with recommendations made to the Board of Directors by the Nominating Committee, which is chaired by an independent outside director, in order to institutionally support the above vision. In addition, key issues related to personnel
affairs for the Company group are discussed at the Human Resources Committee set internally, and diversity and inclusion are listed as important themes.

(2)Strategy
a. Recruiting human resources without regard to gender, nationality, age, or other personal attributes
On a consolidated basis, Wacom Group has about 1,200 team members working around the world, 60% of whom are
employed locally at its Group companies outside Japan, working under local leadership amid the cultural and businesscharacteristics of each country. More than half of the people with business execution responsibilities are non-Japanese
team members. In key management positions, the Group places the highest priority on enthusiastic engagement andability to realize our mission, regardless of gender, age, or nationality.
b. Creating an environment where people of all genders can be active in both work and family life
With the increase in remote working during the pandemic, many of the Company’s team members are now able tospend more time with their families. The Company actively supports new approaches to where people live and work, theuse of childcare leave, and other ways to make the most of telecommuting. As of March 2023, each rate of female teammembers who took childcare leave and returned to work was 100%, and the number of male team members who took
postpartum childcare leave was three with the period from one month and a half to six months in the fiscal year ended
March 31, 2023, expected to increase in the future.
The rate of female team members in managerial positions was 23% as of March 31, 2023, and the Company will continue to promote appointment of managerial positions according to their abilities regardless of gender.

20

Business and Other Risks

c. Hiring people mid-career
More than 90% of the Company’s annual new hires are mid-career hires. Wacom Group selects people based on merit,motivation, and performance, regardless of gender, nationality, age. There is no difference between new graduates andmid-career hires in terms of assignment after joining the company.
d. Creating a flat organization
Under the policy of maintaining a flat organization, Wacom Group aims to build an environment where each teammember can demonstrate their responsibility by focusing on their own initiatives, rather than being defined by whether
someone is a manager or a non-manager. Many projects of the Group are implemented by team members of various
departments and positions, and depending on the content of project, members with a sense of purpose and enthusiasm may be assigned as leaders regardless of age, job career, or position.
e. Developing human resources through real experience and practiceWacom Group is committed to considering the potential of each individual team member and supporting their growththrough experience and practice so that each person can make the most of their opportunities. The Group nurtures thenext generation of leaders by giving them actual experience in decision-making with the management team. Wacom
Group will continue to pursue the ideal diversity and inclusion as Wacom through dialogue with team members working
in the Group all over the world.

The Management of Wacom Group has recognized that the following risks may significantly impact overall financial position, operating results, and cash flow of the Group, among the matters related to the business and accounting conditions
described in the securities report. The following descriptions contain forward-looking statements based on currently available information as of March 31, 2023, the end of the current fiscal year.
These descriptions have been translated into English from Japanese solely for reference for non-Japanese readers.

(1) Risks concerning the business environment
Foreign currency exchange rate fluctuations
Wacom Group conducts sales of its products in Japan via Wacom Co., Ltd. and most of its sales outside Japan via foreignsubsidiaries. Most manufacturing is outsourced to manufacturers mainly in China. As such, major settlement currencies
for those transactions are the U.S. dollar, the euro, and the Japanese yen, of which the U.S. dollar represents the largest
proportion. Our basic policy with regard to the U.S. dollar is to maintain a balance between product purchases from China
and product sales to the U.S., Asia, and Oceania. However, depending on trends in product lines and exchange rate fluctuations, it may not be possible to sufficiently avoid foreign exchange risk. For the euro and other currencies, the Group is
endeavoring to avoid foreign exchange risk through flexible operations including the use of foreign exchange contracts, inconsideration of the rates of fluctuations of currencies, and other factors. However, a sudden fluctuation in foreignexchange rates could still have an adverse effect on business results.

(3) Risk Management
Based on the basic policy of building close relationships with individuals, Wacom Group flexibly and promptly addresses
risks related to human capital, not only by human resource department and superiors but also by President and CEO insome cases. The Group also utilizes a hotline system to send team members’ opinions to executive management andhuman resources department, and works to foster open culture for speak up.

(4) Metrics and targets
The Company’s ultimate goal is to ensure true diversity, and to foster a culture in which team members find themselves
rewarding and can fully demonstrate their abilities. The Company intentionally sets no numerical targets of specific attributes such as gender or nationality with regard to appointing management level position. However, the Company shall set
numerical targets for items which require quantification, set targets for them and disclose the process of those initiatives
in a highly transparent manner, based on discussion in progress about “ideal form of diversity and inclusion that Wacomshould aim for” and dialogues with various stakeholders.

Introduction of the “Wacom Story Book”
Wacom released the first issue of the "Wacom Story Book" in May 2023. The"Wacom Story Book" has been compiled by a team of editors and describes
various aspects of Wacom's business and our activities through the eyes ofour customers, partners, and our diverse team members across the globe.
For more information, please visit our website.
https://investors.wacom.com/en-jp/wacom-story-book/Your participation in the QR code survey below would be greatly appreciated.

21(2) Risks concerning the business environment
Seasonal fluctuations in business results
Historical sales trends suggest that the Wacom Group tends to generate more sales in the second half of the fiscal year
due to the impact of the year-end sales season. In addition, quarterly business results may change depending on thetiming of new product launches.
Furthermore, the recent spread of the global Novel Coronavirus (COVID-19) pandemic has led to an increase in demand in
tandem with the expansion of remote learning and remote working, and this, in turn, has impacted sales trends. Similar
new events may also impact business performance in each period.

Changes in the market environment
The Wacom Group conducts sales activities globally, and the main customers of its Creative Solution and Technology
Solution Business are professional creators working at design production sites and manufacturers of smartphones, tablet
and note PCs, respectively. As a result, factors such as changes in the global economy, the graphics industry, and the PC
market could have an adverse effect on business results.
Wacom Group’s main products are supported by the Windows, Mac, and other OSs. In terms of product portfolio, hardware is compatible across various OSs, but driver software is unique to each OS. In the event that the Group could not
respond in a timely manner to technological updates to platforms using the prevailing OSs or CPUs, or to the emergenceof new platforms, and, as a result, could not ensure compatibility adequately with them, this could have an adverse effecton business results.
In addition, in the case that the Group records an impairment loss resulting from decline in profitability of its non-current
assets due to deterioration of the business environment, this could have an adverse effect on our business results.
In order to address these problems, the Group shall update and implement various measures for sales growth, gross profit
improvement, and new business development under its medium-term business direction: "Wacom Chapter 3".

Global business activities
Because Wacom Group conducts production and sales activities globally, issues such as regional conflicts resulting fromgeopolitical risks and labor-management problems in local communities could have an adverse effect on production at
outsourced manufacturing companies, and the logistics and sales operations of local subsidiaries through the supply
chain network. In addition, deterioration of economic conditions, intensification of competition, and materialization of therisk in international tax affairs such as transfer price taxation in main overseas market, these factors could have an adverse

22effect on our business results.

Dependence on certain customers
While Wacom Group has a wide range of customers, sales to Samsung Group, the Group’s largest customer in the Technology Solution Business, represented 21.8% of consolidated net sales in the previous fiscal year ended March 31, 2022,
and 33.4% in the current fiscal year ended March 31, 2023. Sales to Samsung Group may be indirectly affected by shifting
demand for Samsung Group products. In addition, changes in the Samsung Group’s management strategies might havean adverse effect on business results. Wacom Group shall continue to strive to achieve maximum customer satisfaction by
best responding to customer needs and to minimize risks by diversifying our customer base.

Competition from other companies
Wacom Group engages in product development and marketing operations aimed at the global market as its basic strategy.
Within the IT industry where relationships based on competition and alliances have been dynamically changing on a global
scale, the Group’s competitors, regardless of new entrants or existing players, may take advantage of changes in technology trends and customer preferences both globally and regionally and take extreme strategies to expand market share.
Moreover, some competitors may gain a competitive advantage over Wacom Group by taking advantage of the benefits ofprotectionist policies, etc. These factors could have an adverse effect on business results.
In addition, Wacom Group considers it necessary to continue technological development while paying attention to technology trends and actively evaluating other companies’ technologies, without limiting itself to current pen tablet technology.
In the case the Group’s technology becomes obsolete quickly or other types of input technology which are completely
different from current pen tablet technology emerge and grow rapidly in popularity, this could have an adverse effect on
business results.
In case the profitability of the fixed assets held by the Group declines due to significant deterioration of the technologicalenvironment, this could have an adverse effect on business results by recording an impairment loss.
Wacom Group shall continue to focus on technological innovation which is the source of our value propositions by promoting “Technology Leadership”.

Dependence of manufacturing on external companies
Wacom Group’s outsourced manufacturing companies have flexible supply capability for sudden changes in demand in
addition to mass production capacity and cost competitiveness, and play a very important role in our business strategy.
As mentioned above, while most products are manufactured mainly in China by outsourced manufacturing companies, wehave been proceeding with optimization and decentralization in our production system in consideration of cost management by transferring some production lines out of China, as a measure to reduce risk related to tariffs caused by US-China trade friction. However, in the case that outsourced manufacturing companies incur problems related to management
issues, experience difficulties in continuous production due to unexpected accidents such as natural disasters, or require
additional training time to raise technical proficiency due to changes to or expansion of production bases, these factors
could have an adverse effect on our business results.

Supply and pricing of key components
Our business performance will likely be affected by either an increase in the cost of plastic cases and general-purpose
components, or a shortage of key general-purpose components such as ICs, printed circuit boards, and LCDs. Similarly,
supply chain issues relating to our core components (ceramic components for pen switches and custom IC), such as
disruption of the supply chain as the result of natural disaster, will have an influence on Wacom’s business performance.
The Group strives to quickly secure secondary sources and develop alternative parts for key components, but for general-purpose components, it is necessary to reduce risks and costs through timely arrangement of supply based onlong-term demand forecasts. In the event that there are changes made to rules concerning the usage or permitted
amounts of heavy metals, plastics, or other materials contained in components procured by the Wacom Group or by contractors under national laws and regulations or the standards of the companies to which our products are sold, it may benecessary to make changes to parts and designs, which may increase manufacturing and administrative costs and impact
the Group’s business performance. In addition, if changes are made to such regulations or standards after products con-23

taining the components in question have been sold, our business performance might be affected by the need to replacethese products.
More recently, Wacom Group has been making advance arrangements and strengthening the management of delivery
dates for key parts given that delivery dates for electronic components and materials, particularly semiconductors, havebecome longer, increasing the risk of not meeting our deadlines. Wacom Group shall continue to endeavor to secure its
supply lines in anticipation of increased global competition for semiconductor products.

Product defects and serious quality control issues
Wacom Group takes all possible measures to maintain product quality because the emergence of a serious defect canlead to product liability compensation or a large-scale recall, seriously undermining the trust and reputation of the Groupand its products and potentially incurring significant costs relating to compensation and other expenses, all of which
would have an impact on business performance. To manage these issues, Wacom Group shall continue to monitor the
production status of contract manufacturers and to enhance internal management processes and the shared database for
quality issues found in the market.

Securing human resources
Wacom Group strives to globally secure human resources necessary for each function such as planning, development,
design, manufacturing, sales, service, etc. However, in the case that there are difficulties related to hiring or maintaining oftalented human resources due to intensified competition in the labor market, which may cause a decline in the competitiveness of products due to insufficient investment of resources into research and development or hinder the stable supply of
products due to labor shortages, this could have an adverse effect on our business results. In addition, the loss of talented
human resources may restrict future business development and have an adverse effect on our business results.

Information security
Wacom Group is committed to continuously improving and strengthening the security of its IT environment and provides
regular education programs to enhance the information literacy of its employees as a means for defending against cyberattacks. However, the Group acknowledges that it faces constant risk of attack – including external infiltration that can leadto data theft or leakage. Incidents of this nature, depending on their scale, could have an adverse effect on our businessresults.
Wacom Group shall continue its efforts to respond to external cybersecurity assessments, establish a company-wide information classification and management system, respond to internal and external technical information management,
improve company-wide training, and continue to migrate local servers to the cloud.

Natural disasters and accidents
Although Wacom Group conducts risk management for natural disasters and accidents, a large-scale natural disastersuch as a large earthquake or a sudden accident such as a fire may cause damage to manufacturing equipment resulting
in disruption to the whole supply chain and an adverse effect on our business results, depending on the scale of thedamage.
In addition, the spread of new type of infectious disease may cause an adverse effect on business results. At present, it isdifficult to reasonably quantify the negative impact of the global spread of COVID-19 on business results as it is not possible to predict when it will be curbed.
Wacom Group has maintained a flexible work system (including remote working) across our global workforce to ensure
the safety of all employees and examined how new ways of working after COVID-19 should be, in respect to fulfill our
responsibility as a corporate citizen to help prevent the spread of COVID-19.

(3) Risks concerning legislation and litigation
Intellectual property right conflict and infringement
When developing and launching new products, Wacom Group takes all possible precautions to prevent potential conflicts and infringements of intellectual property rights – such as patent rights and trademark rights held by other companies or individuals – through means that include, but are not limited to, preliminary investigations by local patent offices,24taking preventive measures if infringement is deemed likely. However, we can never completely exclude the possibility ofpatent infringements, which can emerge as the result of unforeseen circumstances that include differences in the legal
systems of each country or limitations on database surveys or even cases where patent rights were obtained after our
product has been launched. In such cases, the Group is at risk of receiving a complaint or being sued by a company orindividual for infringement of patents or other intellectual property rights. In the event that Group patents or other intellectual property rights are infringed upon by other parties, the Group takes firm measures that include filing claims andlawsuits. These actions notwithstanding, our business performance may be adversely affected by the outcome of thesemeasures. Our business performance may also be adversely impacted if the term of the Group's patents and other intellectual property rights expires, or if a decision is made to change the scope of or invalidate our patent rights as the resultof legal challenges.
Wacom Group will continue to review and implement measures to prevent infringement of the intellectual property rightsof third parties and to protect the intellectual property rights of the Group.

Wacom Group has established a framework to enhance compliance by operating the Compliance and Risk Committee
and the Wacom Speak-up Line. In addition, Wacom Group strives to deepen the understanding and awareness of compliance of every director and employee by posting the Wacom Code of Ethics on our portal site and holding regular online
education sessions and in-house seminars.
However, it is difficult to completely eliminate compliance risks and compliance failure could have an adverse effect on
business results.

Legal restrictions
In countries where Wacom products are sold there is legislation in relation to electromagnetic waves, safety, and productliability (PL). Wacom Group makes every effort to pay attention to legal trends to make its products and services meetthese requirements in a timely manner. However, insufficient response to new legal restrictions or changes to existing
restrictions could have an adverse effect on business results. In Japan or countries where outsourced manufacturing companies operate for export or Wacom products are imported and sold, changes in legal restrictions or interpretations byregulatory authorities relating to export, import, or tariffs, could have an adverse effect on business results.

Application of antitrust laws
Should the market share of Wacom pen tablet products grow further in major regions (for reference: market share in Japanin terms of sales volume was 97.4% from January 1 to December 31, 2022, according to BCN Inc.*), a national government
may judge this to be preventing the technological development and free competition in the industry of the country and, asa result, damaging to market development and against the customer’ s interests. Such a decision may result in the application of the antitrust laws of the country which could have an adverse effect on business results.
* World market share is not described in this report because there is no third-party published data.

Management of confidential information and personal information
Wacom Group retains material information on business and personal information obtained during the course of its business activities and confidential information relating to customers, suppliers, and business partners, etc. Recent progress
globally in the enactment of laws and regulations to protect this information, especially personal information, throughregimes such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) requires companies to establish compliance schemes in line with those laws and regulations and to enhance their information systems.
The Group discloses its own privacy policy, maintains and implements internal regulations, and educates employees onthese topics. However, in the unlikely event that the above-mentioned information is leaked, or the Group must pay fines
imposed by authorities for violations or damages due to lawsuits, these factors could have an adverse effect on businessresults, depending on the scale of the damage.
Recent growth in the number of webinars, precipitated by the global Novel Coronavirus (COVID-19) pandemic, andapproaches to new fields, such as education, have increased opportunities for the collection of personal information. We
are actively taking steps to adapt our privacy policy to the laws and regulations of each country, comply with the CCPA,
introduce cookie management tools, and provide project support. The Group will continue to develop policies for eachcountry, comply with China’s Personal Data Privacy Law, deal with cross-border data, and conduct inhouse training ondata and privacy security.

Compliance risk
Wacom Group conducts business activities globally necessitating a wide range of legal and regulatory compliance including compliance in relation to corporate law, tax law, financial transactions-related law, antitrust law, intellectual property
law, personal information protection law, labor law, and trade/environment regulation in multiple countries.

25

26

Financial Section Five-Year Summary

Overview of Business Performance

Wacom Co., Ltd. and Its Subsidiaries

Wacom Co., Ltd. and Its Subsidiaries

2019

Thousands of yen

Thousands of
U.S. dollars

Years ended March 31

Year ended
March 31

2021

2020

2022

2023

2023

For the fiscal year:
Net sales
Gross profit
Operating profit
Profit before income taxes
Profit attributable to owners of parent
Comprehensive income¥89,498,505
30,447,827
4,151,959
4,022,326
3,851,242
3,730,372¥88,579,866 ¥108,531,067 ¥108,789,859 ¥112,729,503
29,707,044
41,407,394
31,173,307
39,610,017
5,566,709
13,407,240
2,013,286
13,023,871
4,859,512
14,032,795
2,192,561
14,560,678
3,917,486
10,225,669
1,792,138
10,954,987
3,283,285
11,077,235
2,136,121
11,871,888$844,226
233,455
15,077
16,42013,421
15,997

At fiscal year-end:
Cash and deposits
Total assets
Total net assets¥16,762,726
51,551,107
25,427,954¥21,541,467
51,155,703
27,734,774

149,895
563,759
303,225

Net profit per share:
Basic
DilutedCapital ratio(%)
Return on invested capital (%)
Return on equity (%)
The number of employee(person)¥32,042,603
71,181,334
37,688,817¥21,788,861
73,332,474
43,503,052¥20,015,518
75,278,772
40,489,664

23.71
23.71

24.12
-

62.95
-

67.98
-

11.34
-

49.3
11.1
16.0
1,031

54.2
15.6
14.7
1,012

52.9
39.4
31.3
1,007

59.3
29.7
27.0
1,069

53.8
3.7
4.3
1,076

Note 1: The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of the readers outside Japan and has been
calculated at the rate of JPY 133.53 = U.S. dollar 1.00, the approximate rate of exchange on March 31, 2023.

Net sales

Gross profit
Gross profit margin(Millions of yen)(%)

41,40780,00030,00060,00030,448 29,707

12,00031,173

38.2
36.4

30

’21

’22

’23

(For the years ended March 31)

27

27.7

’19

’20

’21

’22

’23

(For the years ended March 31)

5,567

6,000
3,000

Net profit per share

6.3

2,013

4.6

1.8

0

’19

’20

’21

’22

’23

(For the years ended March 31)

50

The impact of the Novel Coronavirus Disease2019 (COVID-19) pandemic
In the Branded Business segment in the current fiscal
year (April 2022 to March 2023), a decline in demandcompared to the same period of the previous fiscal year
had a negative impact on sales for mid-to-low priced
models of display products and pen tablet products in
the Creative Solution categor y. In addition, China’s
zero-COVID strategy and lock down in some parts ofChina had a negative impact on sales in China.

(Yen)
67.98
62.95

23.71

24.12
11.34

’20

’19

’21

’23

’22

(For the years ended March 31)

ROIC
ROIC =Net operating profit after tax / Average of (Net working capital + Businessassets) at the beginning and end of the term
Net operating profit after tax
Net working capitalBusiness assets

25,826

20,86939.4
16,785

15,945

14,97329.7
11,461

9,302

9,245
15.6

2,881

9,567
8,609 9,036

8,874

11.1
3,862

3.7
1,397

’19

’20

’21

’22

’23

*Business assets: Tangible fixed assets + Intangible fixed assets + Other assets(of which are defined as business use)

ROE / ROA
ROA
16.0

10

12.4 12.0
4,152

25

20

0

’20

For the current fiscal year ended March 31, 2023, consolidated net sales increased 3.6% to 112,730 million yen.
Operating profit decreased 84.5% to 2,013 million yen,mainly due to sales decrease in the Branded Businesssegment, changes in total sales in each segment, changes in the Branded Business products categories, andloss on valuation of inventory. Ordinary profit decreased
80.0% to 2,868 million, and net profit attributable toowners of parent decreased 83.6% to 1,792 million yen.
We announced its Medium-Term Business Direction:“Wacom Chapter 3” on May 12, 2021. Under this plan, thefinal year of which is the fiscal year ending March 2025,
we aim to leverage our leadership in markets associatedwith digital pen and ink technologies to achieve “Meaningful Growth”– not only financial growth but also thegrowth that our customers experience as the result ofusing our products and services, growth through theaccumulation of knowledge in society and its diverse
communities, and growth through the self-realization ofpeople. In the current fiscal year, we promoted growthstrategies for the future, collaborating with partner companies to further develop our business model in growing
fields such as VR (Virtual Reality) / MR (Mixed Reality), AI(Artificial Intelligence), data security, and education. We
also implemented groupwide measures to improve productivity and cost structures through improved management decision-making.
In the Branded Business segment, we worked to enhance
technological innovation and improve customer service todeliver the ultimate creative experience to each customer.
In the Technology Solution Business segment, in addition
to continuing efforts to position our digital pen technologies with Active-ES (Electrostatic) and EMR (Electromagnetic Resonance) as the de facto standard, we undertook
to expand the adoption of digital pen technologies fortablet and notebook PC devices and develop business
opportunities in the educational market.

9,000

33.5

10,00015

35

40,000’19

13,407 13,024

40

34.0

0

(%)

39,61020,00020,000(Millions of yen)45
40,00089,499 88,580

Operating profit
Operating profit margin

50(Millions of yen)
112,730
108,531 108,790

120,000
100,000

Operating profit/Operating profit margin

Gross profit/Gross profit margin

Our Consolidated results
for the fiscal year ended March 2023

8.1
’19

(%)
ROE

14.7

31.3

23.0

27.0

19.9
4.3
3.9

10.1
’20

’21

’22

’23

(For the years ended March 31)28

Consolidated Financial Position
Wacom Co., Ltd. and Its Subsidiaries

In the Technology Solution Business segment, activity inthe current fiscal year was hampered somewhat by manufacturing and supply chain operational constraints due
to China’s zero-COVID strategy and lock down in someparts of China, etc., but the combined impact of thesefactors on our business was minor.
As part of company-wide initiatives to fulfill our responsibility as a corporate citizen to help prevent the spreadof COVID-19, we have maintained a flexible work system(including remote working) across our global workforce toensure the safety of all employees while looking toward a
new approach to working once the COVID-19 pandemic
has stabilized.

The impact of the situation of Russia and Ukraine
Wacom group has no business bases in Russia andUkraine, and temporarily halted direct shipments to theregion in the fourth quarter of the previous fiscal year
(January to March 2022) in view of challenging financial
and logistical circumstances. Although we resumed
direct shipments to Ukraine in the first three quarters of
the current fiscal year, sales for the period in both Russia
and Ukraine were significantly lower than in the same
period of the previous fiscal year. (For reference, combined sales in both countries for the same period of theprevious fiscal year was approximately 1% of total consolidated net sales.)partner manufacturers.
Sales of EMR technology solution, others significantly
increased, due to a change in the product portfolio of an
OEM partner manufacturer.

Net Sales by Business(Millions of yen)Technology Solution Business 51.6%
2022¥108,790

Branded Business 48.4%

Technology Solution Business 63.5%
2023¥112,730
Branded Business 36.5%(For the years ended March 31)

Branded Business(Millions of yen)
DOWN 21.8%
Sales

’22

52,641’23

Segement
Profit41,161’22

Technology Solution BusinessOverall sales in the Technology Solution Business segment for the current fiscal year ended March 31, 2023,
increased 27.5% to 71,569 million yen, and segment
profit increased 21.0% to 10,756 million yen.
By technology-wise category, sales in the AES technology solution category increased year on year as AES digital pen products continue to be well received by OEM

29(Millions of yen)
UP 27.5%’22

56,149’23

71,569

’22

8,888

’23

10,756(For the years ended March 31)

Information of major customers(Millions of yen)

FY ended March 2022 FY ended March 2023

SamsungGroup

Cash flows from operating activities(Millions of yen)
14,57815,00013,05812,000
9,000
6,000
3,000
1,054

Sales

Ratio(%)

Sales

Ratio(%)

Related segment

23,72221.8

37,648

33.4

Technology Solution
Business

Note: Consumption tax is not included.
Samsung Group includes Samsung Electronics Japan Co., Ltd.
and Samsung Electronics Co., Ltd.

Consolidated cash and cash equivalents as of March 31,
2022 totaled 21,789 million yen, a 10,254 million yen
decrease from the end of the previous fiscal year (compared to a 10,501 million yen increase in the previous
fiscal year). Cash flow used from operating activities forthe current fiscal year ended March 31, 2022, was 236
million yen (compared to 14,578 million yen gained in theprevious fiscal year). The main factor contributing to cash
inflow was 14,561 million yen of profit before income
taxes. The main factors contributing to cash outflow were
6,263 million yen in income taxes paid, an increase of
5,347 million yen in inventories, an increase of 2,898 million yen in trade payables, and a decrease of 2,793 million
yen in provision for bonuses. Cash flow used for investing
activities for the current fiscal year ended March 31,
2022, was 1,372 million yen (compared to 1,382 million
yen used in the previous fiscal year). The main contributing factors was 1,331 million yen of purchase of property,
plant and equipment, 197 million yen of purchase ofintangible fixed assets, and 288 million yen of proceedsfrom sales of investment securities. Cash flow used forfinancing activities for the current fiscal year ended
March 31, 2022, was 10,516 million yen (compared to-236-1,056

’22

’23

0

’19

’20

’21

(For the years ended March 31)

Cash flows from investing activities(Millions of yen)
0
-1000
-2000

-1,382-1,372’21’22-1,960-2,437-3,142

Cash Flow

Technology Solution Business

Segement
Profit

4,053 million yen used in the previous fiscal year). The
main contributing factors were 4,000 million yen of repayments of long-term borrowings, 3,079 million yen of payment for shareholders’ dividends, and 3,006 million yenof purchase of treasury stock.

-3000’23 -3,981

Branded Business

Sales

Total assets as of March 31, 2023 increased by 1,946
million yen to 75,279 million yen compared to the end of
the previous fiscal year. The main factors contributing tothis were increases of 2,269 million yen in deferred tax
assets and 2,150 million yen in raw materials and supplies,
and a decrease of 1,936 million yen in accounts receivable – trade.
Total liabilities as of March 31, 2023 increased by 4,960
million yen to 34,789 million yen compared to the end of
the previous fiscal year. The main factors contributing tothis were an increase of 7,000 million yen in short-termborrowings and a decrease of 2,473 million yen inaccounts payable - trade.
Total net assets as of March 31, 2023 decreased by 3,013
million yen to 40,490 million yen compared to the end of
the previous fiscal year. The main contributing factors
were a decrease of 3,669 million yen in treasury stock,
and an increase of 1,792 million yen by net profit attributable to owners of parent, a decrease of 5,639 million yen
in capital surplus due to the cancellation of treasury
stock, and a decrease of 3,180 million yen by the payment of shareholder’s dividends.
As a result, the capital ratio decreased by 5.5 points to
53.8% compared to the end of the previous fiscal year.

8,712(For the years ended March 31)

Overall sales in the Branded Business segment for thecurrent fiscal year ended March 31, 2023 decreased
21.8% to 41,161 million yen, and segment loss was 3,981
million yen (8,712 million yen of profit in the same periodof the previous fiscal year).
By product line, in the core Creative Solution category,overall sales decreased due to decreased sales of
mid-to-low priced models of display products and pen
tablet products, despite higher sales of display products
for professionals. Business Solution sales decreasedslightly, amid fluid market dynamics and the impact ofprogress on various ongoing projects.

Assets, Liabilities, and Net Assets

’19

’20

’23

(For the years ended March 31)

Cash flows from financing activities(Millions of yen)0
-2,000

1,069

-951

-4,000-4,053-6,000-5,825-8,000-10,000-12,000-10,516

’19

’20

’21

’22

’23

(For the years ended March 31)

Cash Dividends per Share / Payout Raito
20

Ordinary dividend(yen)Special dividend(yen)Payout Raito(%)

15

19.00

20.0

5.50

20.0

200

176.4 150

13.50
100

10
6.0

7.0
50

5
0

25.3

’19

29.0

’20

30.2

’21

29.4

’22

’23

0

(For the years ended March 31)30

Consolidated Balance Sheet
Wacom Co., Ltd. and Its Subsidiaries

Thousands of yen
March 31
Assets:Current assets Cash and deposits
Accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Non-current assets Property, plant and equipment:
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets:
OthersTotal intangible assets
Investments and other assets:
Investment securities
Deferred tax assets
OthersTotal investments and other assets
Total non-current assets
Total assets

31

Thousands of
U.S. dollars
March 31
2023

2022

2023

¥21,788,861
14,020,339
14,695,630
542,5225,529,876
5,796,377(47,062)
62,326,543¥20,015,518
12,084,369
13,438,774
607,548
7,679,862
6,376,783(30,282)
60,172,572$149,895
90,499100,642
4,550
57,51447,755(227)
450,630

3,332,269(2,297,617)
1,034,652
2,287,220(1,094,096)
1,193,124
1,063,061
8,858,849(6,746,823)
2,112,026
5,402,863

3,396,911(2,451,619)
945,292
2,445,756(1,337,626)
1,108,130
1,063,061
10,551,273(7,459,835)
3,091,438
6,207,921

25,439(18,360)
7,079
18,316(10,017)
8,299
7,961
79,018(55,866)
23,152
46,491

1,449,714
1,449,714

1,496,616
1,496,616

11,208
11,208233,800
3,107,652
811,902
4,153,354
11,005,931

1,256,887
5,376,334
768,442
7,401,663
15,106,200

9,413
40,263
5,755
55,431
113,130¥73,332,474¥75,278,772$563,759

Thousands of yen
March 31

Thousands of
U.S. dollars
March 312023

Liabilities:
Current liabilities Accounts payable - trade
Short-term borrowings
Income taxes payable
Contract liabilities
Provision for bonuses
Provision for bonuses for directors (and other officers)
Provision for product warranties
Provision for information security measures
Valuation reserve for inventory purchase commitments
Provision for business restructuring
Asset retirement obligations
Other
Total current liabilities

2022

2023

¥13,111,375
2,462,412
439,1091,450,344
54,060410,438
5,007
7,773,007
25,705,752¥10,638,280
7,000,000
765,586
554,481
1,205,652
18,404
266,707
104,497
2,047,696
186,756
7,252,899
30,040,958$79,670
52,423
5,733
4,152
9,029
138
1,997
783
15,335
1,399
54,317
224,975

Non-current liabilities Long-term borrowings
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities

2,000,000
1,022,531
294,590
806,549
4,123,670
29,829,422

2,000,000
1,078,712
297,789
1,371,649
4,748,150
34,789,108

14,978
8,078
2,230
10,27235,559260,534

Net Assets:
Shareholders' equity Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Valuation and translation adjustments Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total valuation and translation adjustments
Total net assets

4,203,469
6,113,437
37,299,126(4,845,646)
42,770,386

4,203,469
4,044,882
32,341,161(1,176,497)
39,413,015

31,48030,292242,201(8,811)
295,162752,614(19,948)732,666
43,503,052(256,673)
1,334,024(702)
1,076,649
40,489,664(1,922)
9,990
(5)
8,063
303,225

Total liabilities and net assets¥73,332,474¥75,278,772$563,75932

Consolidated Profit & Loss Statement

Consolidated Comprehensive Income Statement

Wacom Co., Ltd. and Its Subsidiaries

Wacom Co., Ltd. and Its Subsidiaries

Net Sales
Cost of sales

Thousands of
U.S. dollars

Thousands of yen

Thousands of
U.S. dollars

Years ended March 31
2022
2023

Year ended March 31
2023

Years ended March 31
2022
2023

Year ended March 31
2023¥108,789,859
69,179,842
39,610,017
26,586,146
13,023,871¥112,729,503
81,556,196
31,173,307
29,160,021
2,013,286$844,226
610,771
233,455
218,378
15,077

Non-operating income:Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income

30,0701,259,855
155,721
1,445,646

22,916
14,508800,925
83,311
921,660

172
109
5,998
624
6,902

Non-operating expenses:
Interest expenses
Settlement payments
Theft loss
OthersTotal non-operating expenses

29,89313,00064,847
10,773
118,51345,872
14,157
7,039
67,068

344
106
53
502

Ordinary profit

14,351,004

2,867,878

21,477Extraordinary income:Gain on sales of non-current assets
Gain on sale of investment securities
Total extraordinary income

1,896
231,405
233,301

1,643
1,643

12
12

6,377
17,25023,627

1,372
208,280203,148
257,436
6,724
676,960

10
1,560
1,521
1,928
50
5,070

14,560,678

2,192,561

16,420

Income taxes - current
Income taxes - refund
Income taxes - deferred
Total income taxes

3,932,046(5,342)(321,013)
3,605,691

2,536,233(13,623)(2,122,187)
400,423

18,994(102)(15,893)
2,999

ProfitProfit attributable to owners of parent

10,954,987¥10,954,987

1,792,138¥1,792,138

13,421$13,421

Gross profit
Selling, general and administrative expenses
Operating profit

Extraordinary losses:
Loss on sale of non-current assets
Loss on valuation of investment securities
Information security expenses
Business restructuring expenses
Other
Total extraordinary losses
Profit before income taxes

33

Thousands of yen

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests¥10,954,987¥1,792,138$13,421(114)
935,917(18,902)
916,901¥11,871,888(256,673)
581,410
19,246
343,983¥2,136,121(1,922)
4,354
144
2,576
$15,997¥11,871,888-¥2,136,121-$15,997-34

Consolidated Statements of Changes in Equity
Wacom Co., Ltd. and Its Subsidiaries

Shareholders' equity
Share capital

Balance at March 31,2021
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Net changes of items other thanshareholders' equity
Balance at March 31,2022
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares¥4,203,469

Capital surplus¥6,103,758

Retained earnings

Treasury shares¥29,430,675(3,086,536)
10,954,987(¥1,864,850)(2,999,963)
19,167

9,679¥4,203,469

Transfer from retained earnings to capital surplus
Net changes of items other thanshareholders' equity¥4,203,469
Balance at March 31,2023¥6,113,437

6,636(5,645,778)
3,570,587¥4,044,882

Shareholders' equity¥37,299,126(3,179,516)
1,792,138(¥4,845,646)(1,999,990)
23,361
5,645,778(3,570,587)¥32,341,161(¥1,176,497)

Total shareholders'equity¥37,873,052(3,086,536)
10,954,987(2,999,963)
28,846¥42,770,386(3,179,516)
1,792,138(1,999,990)
29,997-¥39,413,015(Thousands of yen)

Valuation and translation adjustments

35

Valuation difference
on available-forsales securities

Foreign currencytranslation
adjustment

Balance at March 31,2021¥114
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Net changes of items other thanshareholders' equity(114)
Balance at March 31,2022
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Transfer from retained earnings to capital surplus
Net changes of items other thanshareholders' equity(256,673)
Balance at March 31,2023(¥256,673)(¥183,303)(¥1,046)(¥184,235)¥37,688,817(3,086,536)
10,954,987(2,999,963)
28,846935,917¥752,614(18,902)(¥19,948)

916,901¥732,666

916,901¥43,503,052(3,179,516)
1,792,138(1,999,990)
29,997-

581,410¥1,334,024

19,246(¥702)

343,983¥1,076,649

343,983¥40,489,664

Remaeasurements Total accumulatedof defined benefit other comprehensive
plansincomeTotal net assets

Share capital

Balance at March 31,2022$31,480
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Transfer from retained earnings to capital surplus
Net changes in items other thanshareholders' equity
Balance at March 31,2023$31,480

Capital surplus$45,783

Retained earnings

Treasury shares$279,331(23,811)
13,421($36,289)(14,978)
175
42,281

50(42,281)
26,740(26,740)$30,292$242,201($8,811)

Total shareholders'equity$320,305(23,811)
13,421(14,978)
225-$295,162(Thousands of U.S. dollars)

Valuation and translation adjustments
Valuation difference
on available-forsales securities

Foreign currencytranslation
adjustment

Balance at March 31,2022
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Transfer from retained earnings to capital surplus
Net changes in items other than
(1,922)shareholders' equity($1,922)
Balance at March 31,2023$5,636($149)$5,487$325,792(23,811)
13,421(14,978)
225
-

4,354
$9,990

144
($5)

2,576
$8,063

2,576$303,225

Remaeasurements Total accumulatedof defined benefit other comprehensive
plansincomeTotal net assets

36

Consolidated Statements of Cash Flows

Basis of Presenting Consolidated Financial Statements

Wacom Co., Ltd. and Its Subsidiaries

Wacom Co., Ltd. and Its Subsidiaries

Cash flows from operating activities:
Profit before income taxes
Depreciation
Share-based payment expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors (and other officers)
Increase (decrease) in retirement benefit liability
Differences between the asset retirement liability balance and the actual retirement
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sale of property, plant and equipment
Loss on retirement of property, plant and equipment
Loss on retirement of intangible assets
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

37

Thousands of yen

Thousands of
U.S. dollars

Years ended March 31
2022
2023

Year ended March 31
2023¥14,560,678
1,866,949
24,738(44,844)(2,793,355)(56,866)
61,028(30,070)
29,893(1,214,047)
4,481
15,647
1,603(231,405)(2,898,176)(5,347,475)
1,629,564(481,948)
919,819
6,016,214
39,248(27,708)(6,263,280)(235,526)¥2,192,561
2,196,157
29,683(18,039)(296,165)(35,656)
83,935
2,163(37,424)
72,053(1,023,948)
(271)
2,248
4,476
208,280
2,174,132(245,345)(3,019,707)
9,106
414,6712,712,910
22,873(66,629)(3,724,742)(1,055,588)$16,420
16,447222(135)(2,218)
(267)
629
16
(280)
540
(7,668)
(2)
17
34
1,560
16,282(1,837)(22,614)68
3,105
20,317
171(499)(27,894)(7,905)

Cash flows from investing activities:
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of property, plant and equipment
Proceeds from sale of investment securities
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits
Payments for asset retirement obligations
Net cash provided by (used in) investing activities(1,331,469)(196,834)(112,000)
2,556
287,860(28,107)
5,515(1,372,479)(1,275,363)(264,960)(1,601,321)
1,901(5,622)
11,203(7,506)(3,141,668)(9,551)(1,984)(11,992)
14
(42)
84
(56)
(23,528)

Cash flows from financing activities:
Proceeds from short-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Repayments of lease liabilities
Dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period(4,000,000)(3,005,964)(430,714)(3,079,406)(10,516,084)
1,870,347(10,253,742)
32,042,603

7,000,000(2,003,990)(750,063)(3,177,100)
1,068,847
1,319,452(1,808,957)
21,788,861

52,423(15,008)(5,617)(23,793)
8,005
9,881
(13,547)
163,176

Cash and cash equivalents at end of period¥21,788,861¥19,979,904$149,629

The accompanying consolidated financial statements have been prepared from the consolidated financial statements of
Wacom Co., Ltd. (the “Company”) and its subsidiaries filed with the Director of the Kanto Local Finance Bureau in accordance with the Financial Instruments and Exchange Law of Japan and its related accounting regulations, and in conformity with accounting principles and practices generally accepted in Japan, which are different in certain respects from theapplication and disclosure requirements of International Financial Reporting Standards.

38

Investor Information

Corporate Data

Stock Exchange Listing
Tokyo Stock Exchange Prime Market (Securities code: 6727)

Trade Name
Wacom Co., Ltd.
Established
July 12, 1983

Share Data (As of March 31, 2023)
Total number of Authorized Shares
Total number of issued shares
Total number of shareholders

552,000,000
158,000,000
22,502Major Shareholders (As of March 31, 2023)

The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
The Bank Of New York Mellon 140051
Samsung Electronics Singapore Pte. Ltd.
AVI Global Trust PLC
State Street Bank And Trust Client Omnibus Account OM02 505002
The Bank Of New York Mellon (International) Limited 131800
State Street Bank And Trust Company 505103
Masahiko Yamada
Wilnau Co.

Number of shares

Shareholding ratio (%)

29,379,000
11,762,900
11,132,500
8,398,400
7,450,300
5,435,100
4,763,800
4,164,309
3,768,000
3,050,000

18.80
7.52
7.12
5.37
4.76
3.47
3.04
2.66
2.41
1.95

* Wacom Co., Ltd. has 1,762,392 shares of treasury stock at the end of the fiscal year, which isn't included in the above list.
* Shareholding ratio is calculated after deduction of treasury stock.

Shareholder Distribution (As of March 31, 2023)
Individuals and other shareholders

1.12%

20.93%

1,762,392 shares

33,078,659 shares<1 shareholder><22,095 shareholders>

Securities companies

2.05%
3,240,199 shares<40 shareholders>

158,000,400

Financial institutions

shares28.01%

22,502

44,258,300 sharesshareholders<17 shareholders>International
Affiliates

Wacom Europe GmbH (Germany)
Zollhof 11-15 40221 Dusseldorf Germany

Employees
Consolidated: 1,076 (As of Mach 31, 2023)

Wacom Technology Corporation (U.S.A.)
1455 NW Irving Street, Suite 800 Portland, OR 97209, U.S.A.

Business Segments
1. Branded Business
Development, manufacturing,and sales of electronic devices
and related software

Wacom China Corporation (China)
518, West Wing Office, China World Trade Center, No.1
Jianguomenwai Avenue, Chaoyang District, Beijing 100004, China

2. Technology Solution Business
Development, manufacturing,and sales of input components andsensor systems for manufacturersof smartphones, tablets, and notebook PCs
Banks
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Saitama Resona Bank, Limited
Sumitomo Mitsui Trust Bank, Limited

Treasury stock

Osaka Office
Shogyo 2nd Bldg. 6th Floor, 5-4-9 Toyosaki,
Kita-ku, Osaka-shi, Osaka 531-0072, Japan

Share Capital¥4,203 million (As of March 31, 2023)
Number of Shares Outstanding
158,000,000 (As of March 31, 2023)

Name of shareholder

Branch / Offices Tokyo Branch
Sumitomo Fudosan Shinjuku Grand Tower 31F, 35F,
8-17-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
160-6131, Japan

Head Office / Factory
2-510-1 Toyonodai Kazo-shi,
Saitama 349-1148, Japan

Wacom Korea Co., Ltd. (Korea)
Rm #1211, 12F, KGIT Sangam Center,
402 Worldcup Bukro, Mapo-gu, Seoul 03925, Korea
Wacom Australia Pty. Ltd. (Australia)
Ground floor, Building 1, 3 Richardson Place,
North Ryde, NSW, 2113, Australia
Wacom Hong Kong Limited (Hong Kong)
Unit 1610, 16/F., Exchange Tower, 33 Wang Chiu Road,
Kowloon Bay, Hong Kong
Wacom Singapore Pte. Ltd. (Singapore)
88 Market Street, #40-01, CapitaSpring,Singapore 048948
Wacom Taiwan Information Co., Ltd. (Taiwan)
9F-1, No. 237 Songjiang Rd.,
Zhongshan Dist. Taipei 104, Taiwan
Wacom India Private Limited (India)
426, Tower B, DLF Building, Jasola District Centre,
Mathura Road, New Delhi 110025, India

Foreign institutions and individuals

45.39%

Other domestic enterprises

71,711,517 shares

2.50%<267 shareholders>

3,948,933 shares

Wacom Vietnam Science and Technology Limited
Liability Company (Vietnam)
Bac Ninh City, Hanoi Area, Vietnam<82 shareholders>(As of June 30, 2023)

3940