Japan Post : Annual Report 2023（A3）

JAPAN POST GROUP Annual Report 2023

JAPAN POST GROUP

Annual Report

Year ended March 31, 2023

2023

Introduction

Our History

Aiming to realize a "Co-creation Platform"

1871

1872

1873

Modern postal service was established. Issuance of postage stamps was commenced.

The nationwide postal service network was completed.

The nationwide uniform postage charge system was implemented.

Issuance of postcards was commenced.

A scene of sorting mails by destination and routing for delivery from the "Mail Handling Picture Book"/1884

supporting customers and local communities

1875

Postal money order service and postal savings

service were established.

1885

The Ministry of Communications was established.

1892

The parcel post service

" " was established as the mark of

was launched.

the Ministry of Communications.

1901

Red post boxes were introduced.

1908

Current outstanding balance of postal

savings: 100 million yen

1911

The express mail service was launched.

1916

Postal life insurance service was established.

The rst poster at the time when the postal

life insurance service was established

1928

National Health Exercise Program (precursor of the

1949

Radio Exercise Program) was established.

The Ministry of Posts and Telecommunications

1960

was established.

Current outstanding balance of postal savings: 1 trillion yen

A scene of mail delivery/1971

1971

Educational endowment insurance and special whole life

insurance services were established.

1984

The nationwide online network for postal savings

was completed.

1985

Current outstanding balance of postal

2001

savings: 100 trillion yen

The Postal Services Agency was established.

Paperwork at the postal savings

counter/1983

2003

Japan Post was established.

2007

The Japan Post Group was established.

2012

Reorganized into the current four-company structure

2015	Listed on the First Section of
2021	the Tokyo Stock Exchange
The 150th anniversary of the foundation of
	the Japan Post Group
		JAPAN POST GROUP Annual Report 2023	1

Japan Post Group Management Philosophy

CONTENTS

1.	Introduction	32. Initiatives to Realize a "Co-creation
		Platform"

79. Japan Post Group Corporate Governance

Stressing the security and condence of Japan Post Group network, the Group, as a private corporation, is demonstrating creativity and efciency to the greatest extent possible and will provide customer-oriented services, support the lives of customers in local communities and aim for the happiness of customers and employees. The Group will also pursue managerial transparency on its own, observe rules and contribute to the development of society and the region.

Group Management Policy

1. We will duly consider our customers' lives, exercise our creativity and provide through our nationwide network a selection of products and services needed by customers in every stage of their lives.

2. We will establish effective corporate governance and compliance programs, including internal audits and internal controls.

3. We will maintain the transparency of the Group's operations through the timely and proper disclosure of information, the appropriate use of intra-group transactions and other activities.

Top Commitment

4. Message from the President

12. Top Messages from Each Company

Value Creation Strategy

14. Financial and Non-Financial Highlights

16. Medium-Term Management Plan "JP Vision 2025"

18. Initiatives for "JP Vision 2025"

1. Capital Strategy
2. Developing Communications with Customers to Further Enhance the Japan Post Group's Brand Image
3. Promotion of Group DX

28. DX Initiatives of the Group Companies

30. Real Estate Business

34. Initiatives toward the Creation of Value by Group Companies

40. Initiatives toward Enhancing the Sophistication of Crisis Management

42. Sports & Communications

44. Structure of the Japan Post Group

46. Financial Results, Strengths, and Challenges of Each Group Company

Sustainability

50. Sustainability Management

68. Human Resource Strategy

Corporate Governance

76. Message from an Outside Director

78. Initiatives toward Enhancing Corporate Governance

90. Japan Post Group Risk Management

92. Japan Post Group Compliance Framework

1. Japan Post Group IT Governance
2. Japan Post Group Cyber Security Measures
3. Japan Post Group Internal Audit System
4. Initiatives for Transportation Safety
5. Dialogue with Stakeholders

Data Compilation

101. Data Compilation

4. We aim for the Group's sustainable growth and a mid-to-long term improvement in our corporate value.

5. We will create opportunities for all employees, business partners and the community to mutually cooperate and for each and every employee to grow.

Company Outline	Editorial Policy
Company name:	This Annual Report (hereinafter, "this Report") is created from the dual perspectives of providing nancial and non-nancial
JAPAN POST HOLDINGS Co., Ltd.	information pertaining to an overview of the Japan Post Group as well as its business strategies and management issues for the
Head ofce:	purpose of promoting an understanding among stakeholders of the Group's initiatives toward sustainable value creation.
This Report has been combined with the Disclosure Report.
3-1, Otemachi 2-chome,Chiyoda-ku,
• Reference guideline: International Integrated Reporting Framework, International Integrated Reporting Council (IIRC)
Tokyo 100-8791, Japan

Japan Post Group Charter of Corporate Conduct

1. Earn the trust • We earn the trust of customers by adopting their perspective and meeting their expectations.

of customers • We protect and manage information strictly so that customers can use our services with peace of mind.

• We fulll our responsibility to explain our operations by conducting highly transparent business operations and disclosing information in a fair manner.

Date of establishment:	January 23, 2006
Paid-in capital:	¥3,500 billion
Securities code:	6178

Total number of shareholders:

741,798

(As of March 31, 2023)

Date of Publication: September 2023

Subject of Reporting

Reporting period: April 2022-March 2023 (Part of this Report includes information after this period.)

Scope of report: Japan Post Holdings Co., Ltd. and its subsidiaries and afliated companies

Others: In addition to this Report, please refer to the Integrated Reports of Japan Post Bank Co., Ltd. and Japan Post Insurance Co., Ltd.

Please also refer to the most recent materials disclosed by Japan Post Holdings Co., Ltd., including the Notice of Ordinary General Meeting of Shareholders (Business Report, etc.), Annual Securities Report, and Summary Report of Financial Results, for detailed information on the state of business, nancial conditions, and business results of Japan Post Holdings Co., Ltd. and each company of the Japan Post Group.

2.	Observe ethical
	standards
3.	Place priority
	on coexistence

• We continue to conduct business activities with sincerity by complying with laws, regulations, social standards and internal rules.

• We stand rmly against antisocial forces and organizations that threaten the order and safety of civil society.

• We maintain workplace discipline by clearly dening responsibilities and authority and fairly evaluating performance and results.

• We actively promote environmental conservation and make a signicant contribution to society through business activities.

• We aim for sustainable coexistence by placing importance on maintaining dialogues with diverse stakeholders.

• We respect human rights and provide safe and pleasant workplaces.

Disclaimer with Respect to Forward-Looking Statements

This Report is a translation of the Disclosure Document (the written explanation in Japanese of the business and nancial conditions of Japan Post Holdings Co., Ltd. and the Japan Post Group) that was prepared pursuant to Article 52-29 of the Banking Act. This Report is not prepared for the purpose of soliciting any shares or other securities of Japan Post Holdings and its subsidiaries. This Report contains

Publications and Their Positioning

Reports		Websites

4. Create value

• We will create new convenience for customers and provide them with high-quality services.

• We will create stable value by providing universal services in our three core businesses through the Japan Post Group network.

• We will utilize teamwork and create corporate value for the Japan Post Group by promoting mutual understanding and cooperation

among employees and encouraging each and every employee to fulll their roles and responsibilities.

forward-looking statements regarding future performance and other matters of the Japan Post Group and each company of the Japan Post Group.

These forward-looking statements do not constitute guarantees of future performance and are subject to risks and uncertainties. Therefore, these statements are subject to the impact of a wide range of future risk factors that include changes in preconditions concerning the business environment, economic circumstances and economic trends, changes in laws and regulations, the occurrence of large-scale disasters, changes in the value of assets held, reputation and rumor risk, and other risks. Accordingly, it should be noted that actual business results and other matters could differ from the details contained in this Report.

• Summary Report of

Financial Results	Financial
Information
• Annual Securities Report
• Shareholders' Report
• Notice of Ordinary General
Meeting of Shareholders
(Business Report, etc.)
• Integrated Report

• For shareholders and investors (IR website)

https://www.japanpost.jp/en/ir/

• Group governance

(Corporate governance website)

https://www.japanpost.jp/en/group/

governance/

5. Be a source • We will apply technological innovation and continually make innovative changes internally to provide stable services to our customers.

of change	• We exercise our creativity from a broad viewpoint and lofty perspective to promote the Group's development.
	• We aggressively take on the challenge of conducting global business activities.

Figures and percentages shown in this Report have been rounded off, except for nancial numbers in the accounting statements, etc., that have been truncated without rounding. As a consequence, sums of gures may not match the totals presented. Figures and percentages, with exceptions as specically indicated, are as of March 31, 2023.

• Corporate Governance Report	Non-Financial
• Sustainability Report
Information
• SDGs Book

• Sustainability website

https://www.japanpost.jp/en/

sustainability/

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JAPAN POST GROUP Annual Report 2023

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Top Commitment

Message from the President

MASUDA Hiroya

Director and Representative Executive Officer,

President & CEO

Japan Post Holdings Co., Ltd.

By realizing our "Co-creation Platform," we aim to be essential and the first choice for customers and local communities throughout Japan.

Introduction

We are rolling out various measures, including Group-wide digital transformation (DX) and collaborative partnerships with a wide variety of companies outside the Japan Post Group, to realize a "Co-creation Platform" that will support the realization of safe, peaceful, comfortable, and enriched lives.

It is now two years since the announcement of the Medium-Term Management Plan "JP Vision 2025," and this has been a period of "laying foundations." We will work to ensure that this year will be the one in which, as we proceed with the concrete measures that we developed over the past two years, all of our stakeholders-including customers, shareholders, and employees-are able to see meaningful results.

By aiming to realize a "Co-creation Platform" supporting customers and local communities, we will address social issues through our post offi ce network in a highly visible way. Providing an even higher level of products and services and enhancing operational effi ciency, in doing so, we will transform ourselves into a more robust enterprise that is better able to generate profi ts.

Top Commitment

Value Creation Strategy

Sustainability

Corporate Governance

Data Compilation

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JAPAN POST GROUP Annual Report 2023

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Top Commitment

A "Post Office of the Future" that Combines Human Warmth and Pleasant Surprises

In aiming to create a "Co-creation Platform," one of the most important tasks is to realize an evolution of our post office network.

By combining the strengths of our physical post office network with digital technologies, we provide new value to customers across a wide range of ages and regions. As one form of this, we are currently working on the "post office of the future," which fuses the digital aspect, utilizing the capabilities of a variety of digital technologies to provide customers with new, pleasant surprises, and the physical aspect, which provides warm, personal service.

We have chosen the Otemachi Post Office (in Chiyoda Ward, Tokyo) as the pilot project post office for the "post office of the future," and are proceeding with various types of demonstration experiments.

On the digital side, we are working to provide enhanced convenience for customers by adopting a "digital ticket dispenser" that enables them to check how busy the counters at a particular post office are at a given time using their PC or smartphone, and a "self-service postal checkout" (for postal services) where customers can use a single device to post ordinary mail and to purchase Letter Pack envelopes, etc., without lining up at the counters. On the physical side, we will be enhancing experiential value for customers by designing post office interior spaces in a way that aligns with customer needs, through the installation of Life Counseling spaces where customers can have consultations about financial matters or lifestyle issues close at hand, and Lounge spaces where they can make their waiting time more comfortable and enjoy a pleasant purchasing experience. Starting from this fiscal year, we are also rolling out revamped post offices, based on existing post office buildings, that realize online financial consultation and other services in accordance with the characteristics of each region.

I believe that it is extremely important to realize the "post office of the future," looking ahead 5, 10, or 20 years, and taking the know-how and creativity of Japan Post Group employees as the foundation for ensuring that, in the future, post offices will continue to be appreciated by customers and local communities, and will continue making a positive contribution to society. With this in mind, we are asking our employees

to submit ideas for the "post office of the future," with the aim of realizing the best ideas through the demonstration experiments that are now underway.

Moving ahead, our goal is to roll out the "post office of the future" throughout Japan. This will be implemented in a stage-by-stage process, taking into consideration the special characteristics of the area where each post office is located, as we strive to provide customers with enhanced value from a smarter, more enjoyable user experience.

We are also proceeding with digitalization in each of our businesses. In the postal and domestic logistics business, we have developed the Ichikawa Minami Post Office as a next-generation post office designed to support practical implementation of DX, making effective use of transportation telematics, new control and management systems, and automated guided vehicles (AGVs). In the post office business, we have introduced online consultations in relation to investment trusts, and digital application services for cancer insurance, simplified issue health insurance, and vehicle insurance. In our banking business, we have launched the Yucho Reco Personal Financial Management (PFM) App, which enables customers to use their smartphones to manage financial assets and monthly income and expenditure, while our life insurance business expanded the functionality of the "My Page" website for policyholders to include a direct claim submission function for hospitalization and operation-related insurance payments.

Moving ahead, we will be accelerating the process of digitalization, with plans to consolidate and overhaul existing apps and unify the customer ID verification system.

Collaboration with Companies Outside the Japan Post Group

While working to enhance the value of our post office network by integrating the physical and the digital, the Japan Post Group is also actively promoting the forging of collaborative partnerships between our postal and domestic logistics, banking, and life insurance businesses with a wide variety of companies from outside the Japan Post Group, to realize a "Co- creation Platform" supporting customers and local communities. In this section, I will introduce a few of these collaborative projects.

The COVID-19 pandemic accelerated changes in lifestyles, and as a result e-commerce has come to play an increasingly important role as key infrastructure in people's lives. At the same time, the needs of parcel senders and recipients have become even more diversified, and providing reliable logistics services in a sustainable manner has become a significant issue.

In response to these developments, in 2021 Japan Post joined forces with Rakuten Group, Inc. to establish JP Rakuten Logistics, Inc., and the Japan Post Group and Rakuten Group are working together to build shared logistics hubs and delivery systems.

In October 2022, a new logistics hub for Rakuten Super Logistics (RSL), a comprehensive logistics service that handles everything from receiving to product delivery for Rakuten Ichiba online stores, was established in Fukuoka, with the aim of further strengthening capabilities and reducing lead time for deliveries in the Kyushu region.

In addition, in April 2023 a new, large automated logistics center was established in Hachioji City, Tokyo to further strengthen product supply capability, while also reducing delivery lead times in the Eastern Japan region. This is because distribution through Rakuten 24, a direct sales service for daily necessities, grew and increased the utilization rate of the existing distribution center.

In the future, besides expanding the scope of our collaborative projects to include not only logistics but also retail, DX, and regional revitalization, we will also be constantly examining the possibilities for collaboration in new fields.

Problems that are shared by every company in the logistics sector include the "2024 issue," referring to the necessity for responding to tightened regulation regarding truck drivers working in excess of normal working hours, and the need to reduce CO2 emissions associated with transport.

To address these issues, we have begun implementing joint transport on trunk routes with Sagawa Express Co., Ltd. We are also participating in the initiative that is being implemented by Tokyo Kyusyu Ferry Co., Ltd. and Sagawa Express to switch over to sea transport via the Yokosuka-Shinmoji ferry route for part of the long-distance transportation trunk route between the Kanto region and Kyushu region.

Regarding the need to maintain a stable delivery network in districts that are affected by a falling population, in order to identify key issues that must be addressed in order to make effective use of the limited

human resources and limited facilities that are available in these areas, in March 2023 we began implementing a trial joint delivery project in the Togatta hot springs district of Miyagi Prefecture and several neighborhoods in the town of Nishikawa-machi in Nishimurayama-gun district, Yamagata Prefecture, whereby parcels collected by Sagawa Express from locations throughout Japan will be delivered in these areas by Japan Post.

On June 19, 2023, the Japan Post Group and the Yamato Group entered into a basic agreement to promote sustainable logistics services. Both booklet parcels (mail-bin) and small, lightweight parcels collected by Yamato Transport Co., Ltd. are going to be delivered through Japan Post's delivery network.

Going forward, we will continue to address issues affecting the logistics sector, and to develop a sustainable business while maintaining convenience for our customers in local areas.

Starting from 2022, Japan Post Bank and Daiwa Securities Co., Ltd. have begun providing "Yucho Fund Wrap," which provides optimal investment portfolios matched to customers' life plans and changes in household finances, through 233 directly managed Japan Post Bank branches. This makes it possible to meet customers' individual life planning and asset management requirements with great attention to detail. In the future, we will continue striving to provide customer-focused asset management services, by offering life planning and consulting support that are even more closely tailored to what customers need.

Japan Post Holdings, Japan Post, Japan Post Insurance, Aflac Incorporated, and Aflac Life Insurance Japan, Ltd. are continuing to strengthen their strategic partnership. By collaborating with one another, they are aiming to achieve further synergy, and they continue to explore the potential for new collaborative initiatives. In April 2023, a new Lump Sum Critical Illness Benefit Rider was launched to meet the needs of customers who wish to have generous coverage for serious illnesses in addition to cancer.

With the goal of realizing a "Co-creation Platform" supporting customers and local communities, we will continue to position the cancer insurance offered by Aflac Life Insurance as a product that has an important role to play in our sales strategy. By collaborating on thoroughgoing efforts to implement customer-oriented business operations, we will further develop our strategic partnerships.

Top Commitment

Value Creation Strategy

Sustainability

Corporate Governance

Data Compilation

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