JAPAN POST GROUPAnnual ReportYear ended March 31,20232023IntroductionAiming to realize a“Co-creation Platform”supporting customers and local communities1872The nationwide postal service networkwas completed.1873The nationwide uniform postage charge system was implemented.Issuance of postcards was commenced.1875Postal money order service and postal savings service were established.1911The express mail service was launched.1916Postal life insurance service was established.1960Current outstanding balance of postal savings:1 trillion yen19711984The nationwide online network for postal savings was completed.19491985Current outstanding balance of postal savings:100 trillion yen2001The Postal Services Agency was established.2003Japan Post was established.1885The Ministry of Communications was established.1892The parcel post service was launched.1901Red post boxes were introduced.1908Current outstanding balance of postal savings:100 million yen2007The Japan Post Group was established.2012Reorganized into the current four-company structure201520211871Modern postal service was established.Issuance of postage stamps was commenced.1928Our HistoryEducational endowment insurance and special whole life insurance services were established.The Ministry of Posts and Telecommunications was established.Listed on the First Section of the Tokyo Stock ExchangeThe 150th anniversary of the foundation of the Japan Post Group National Health Exercise Program(precursor of the Radio Exercise Program)was established.A scene of sorting mails by destination and routing for delivery from the“Mail Handling Picture Book”/1884The frst poster at the time when the postal life insurance service was establishedA scene of mail delivery/1971Paperwork at the postal savings counter/1983“”was established as the mark of the Ministry of Communications.JAPAN POST GROUP Annual Report 20231Japan Post Group Management PhilosophyGroup Management PolicyStressing the security and confdence of Japan Post Group network,the Group,as a private corporation,is demonstrating creativity and effciency 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.Japan Post Group Charter of Corporate Conduct1.Earn the trustof customers2.Observe ethicalstandards3.Place priorityon coexistence4.Create value5.Be a sourceof change We earn the trust of customers by adopting their perspective and meeting their expectations.We protect and manage information strictly so that customers can use our services with peace of mind.We fulfll our responsibility to explain our operations by conducting highly transparent business operations and disclosing information in a fair manner.We continue to conduct business activities with sincerity by complying with laws,regulations,social standards and internal rules.We stand frmly against antisocial forces and organizations that threaten the order and safety of civil society.We maintain workplace discipline by clearly defning responsibilities and authority and fairly evaluating performance and results.We actively promote environmental conservation and make a signifcant 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.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 fulfll their roles and responsibilities.We will apply technological innovation and continually make innovative changes internally to provide stable services to our customers.We exercise our creativity from a broad viewpoint and lofty perspective to promote the Groups development.We aggressively take on the challenge of conducting global business activities.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.5.We will create opportunities for all employees,business partners and the community to mutually cooperate and for each and every employee to grow.2.We will establish effective corporate governance and compliance programs,including internal audits and internal controls.4.We aim for the Groups sustainable growth and a mid-to-long term improvement in our corporate value.3.We will maintain the transparency of the Groups operations through the timely and proper disclosure of information,the appropriate use of intra-group transactions and other activities.2CONTENTS32.34.40.42.44.46.Initiatives to Realize a“Co-creation Platform”Initiatives toward the Creation of Value by Group CompaniesInitiatives toward Enhancing the Sophistication of Crisis ManagementSports&CommunicationsStructure of the Japan Post GroupFinancial Results,Strengths,and Challenges of Each Group Company1.Introduction14.16.18.24.25.26.28.30.Financial and Non-Financial HighlightsMedium-Term Management Plan“JP Vision 2025”Initiatives for“JP Vision 2025”Capital StrategyDeveloping Communications with Customers to Further Enhance the Japan Post Groups Brand ImagePromotion of Group DXDX Initiatives of the Group CompaniesReal Estate BusinessValue Creation Strategy4.12.Message from the PresidentTop Messages from Each CompanyTop Commitment50.68.Sustainability ManagementHuman Resource StrategySustainability76.78.Message from an Outside DirectorInitiatives toward Enhancing Corporate GovernanceCorporate Governance79.88.90.92.94.95.96.97.Japan Post Group Corporate GovernanceDirectorsJapan Post Group Risk ManagementJapan Post Group Compliance FrameworkJapan Post Group IT GovernanceJapan Post Group Cyber Security MeasuresJapan Post Group Internal Audit SystemInitiatives for Transportation Safety101.Data CompilationData CompilationThis Report is a translation of the Disclosure Document(the written explanation in Japanese of the business and fnancial 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 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.Figures and percentages shown in this Report have been rounded off,except for fnancial numbers in the accounting statements,etc.,that have been truncated without rounding.As a consequence,sums of fgures may not match the totals presented.Figures and percentages,with exceptions as specifcally indicated,are as of March 31,2023.Disclaimer with Respect to Forward-Looking StatementsPublications and Their Positioning Summary Report of Financial Results Annual Securities Report Shareholders Report Notice of Ordinary General Meeting of Shareholders(Business Report,etc.)Integrated Report Corporate Governance Report Sustainability Report SDGs Book For shareholders and investors(IR website)https:/www.japanpost.jp/en/ir/Sustainability website https:/www.japanpost.jp/en/sustainability/Group governance(Corporate governance website)https:/www.japanpost.jp/en/group/governance/ReportsFinancialInformationNon-FinancialInformationWebsitesDialogue with Stakeholders98.Editorial PolicyThis Annual Report(hereinafter,“this Report”)is created from the dual perspectives of providing fnancial and non-fnancial information pertaining to an overview of the Japan Post Group as well as its business strategies and management issues for the purpose of promoting an understanding among stakeholders of the Groups initiatives toward sustainable value creation.This Report has been combined with the Disclosure Report.Reference guideline:International Integrated Reporting Framework,International Integrated Reporting Council(IIRC)Subject of ReportingReporting period:April 2022March 2023(Part of this Report includes information after this period.)Scope of report:Japan Post Holdings Co.,Ltd.and its subsidiaries and affliated companiesOthers: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,fnancial conditions,and business results of Japan Post Holdings Co.,Ltd.and each company of the Japan Post Group.Company OutlineDate of Publication:September 2023Company name:JAPAN POST HOLDINGS Co.,Ltd.Head offce:3-1,Otemachi 2-chome,Chiyoda-ku,Tokyo 100-8791,JapanDate of establishment:January 23,2006 Paid-in capital:3,500 billionSecurities code:6178 Total number of shareholders:741,798(As of March 31,2023)JAPAN POST GROUP Annual Report 20233Top CommitmentMessage from the PresidentMASUDA HiroyaDirector and Representative Executive Offi cer,President&CEOJapan Post Holdings Co.,Ltd.MASUDA HiroyaDirector and Representative Executive Offi cer,4We 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 stakeholdersincluding customers,shareholders,and employeesare 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 of fi 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.By realizing our“Co-creation Platform,”we aim to be essential and the fi rst choice for customers and local communities throughout Japan.IntroductionJAPAN POST GROUP Annual Report 20235Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentTop CommitmentA“Post Office of the Future”that Combines Human Warmth and Pleasant SurprisesIn 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 GroupWhile 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.6 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 peoples 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 YokosukaShinmoji 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 Posts 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.JAPAN POST GROUP Annual Report 20237Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentTop CommitmentStrengthening Both New Businesses and Core BusinessesOne new business area that the Japan Post Group is working actively to develop as an important source of revenue is the real estate business.Since the completion of the JP Tower(KITTE)in May 2012,which was the Japan Post Groups first real estate project,we have continued to develop high-profitability real estate projects,such as those located near railway stations,retail property,residential property,etc.We have proceeded with measures to further expand revenue from this business,for example,by establishing a dedicated real estate companyJapan Post Real Estate Co.,Ltd.in April 2018.In addition to the completion of Kuramae JP Terrace in March 2023 and Azabudai Hills Mori JP Tower in June 2023 as development properties of the Groups real estate holdings,other large-scale projects such as JP Tower Osaka,and the Gotanda JP Building are scheduled to be completed in sequence.As well,by investing in excellent non-Group real estate projectssuch as our participation in the Nishiki 3-Chome 25th Block Project(located near Sakae Station in Nagoya),and in the Nakano Station North Exit Project in Tokyowe are working to further expand the profits generated by the real estate business.With new businesses,it is unlikely that revenue will be generated immediately,and there is no guarantee that everything will go according to plan.I personally believe that it is important to cultivate a corporate ethos whereby,if there is something new that the Japan Post Group can attempt,we will make an active effort to do so,and that we should make a deliberate effort to encourage the taking on of challenges.In this way,we will be able to generate new ideas and cultivate new businesses,but as a first step,it is extremely important that we adopt a painstaking approach to laying the foundations for this process.While developing new businesses,it is also extremely important for us to further strengthen the Japan Post Groups core businesses:postal and domestic logistics,banking,and life insurance.In the postal and domestic logistics business,besides striving to enhance productivity and efficiency through initiatives such as the promotion of DX,we are also aiming to maintain postal service utilization,for example,by providing support for letter-writing workshop programs,providing a service that enables people to send traditional New Years greeting cards using their smartphone,and implementing other measures to revive letter-writing and show people the joy of writing and receiving letters.To effectively develop the growing e-commerce market and the online“flea market”website market,we are working to increase the number of e-commerce sites that make use of Japan Posts“ehasso”delivery service,grow the number of items handled by expanding the locations where contactless automated e-commerce lockers are available,and make the transport and delivery network more efficient.In our banking business,while maintaining our physical bank branch network,we are also aiming to expand self-service channels and digital channels,for example,by enhancing the functionality of Madotab self-service terminals and of our ATMs,and expanding the range of functions provided by the Yucho Bankbook App and the Yucho Reco Personal Financial Management(PFM)App.In addition,while proceeding with selective investment tailored to the market environment,with appropriate risk management,and steadily increasing our risk asset balance,we will also be focusing on optimizing our overall portfolio,including the restructuring of yen interest rate risk assets to take interest rate movements both within and outside Japan into account.Turning to the life insurance business,besides working to ensure customers feel truly glad they chose Japan Post Insurance by improving customer convenience and solicitation quality,from the 8perspective of boosting the customer experience value(CX),we will also be proceeding with the development of insurance services that respond to the protection needs of customers of all generations in an age of 100-year life,and will be enhancing our insurance services accordingly.Working toward the Realization of a Sustainable SocietyThe Japan Post Group Basic Sustainability Policy states that the Group will strive to realize sustainable growth and enhance corporate value over the medium to long term,by contributing toward the resolution of social issues related to sustainability through its business activities.Besides clarifying the value creation process,based on examination of the impact on the Japan Post Groups corporate value and the importance to stakeholders(and their expectations),we have summarized important topics and related topics,in six areas:(1)Local communities and economies;(2)Responding to the aging society;(3)Access to services;(4)Environment;(5)Human resources and human capital;and(6)Management base,and used these to set the strategic direction for our initiatives.With the aim of addressing these key issues,in JP Vision 2025 we have set the ultra-long-term goal of becoming carbon neutral by 2050,and have also set the medium-term goal of reducing greenhouse gas emissions by 46%by the fiscal year ending March 31,2031(compared to the fiscal year ended March 31,2020)as a milestone on the way to achieving this goal.The main initiatives that we will be implementing over the period up to the fiscal year ending March 31,2026 include the promotion of energy-saving by adopting electric vehicles(EVs)for collection and delivery vehicles,installing LED lights in our facilities,and switching over to highly efficient air conditioning systems,as well as a stage-by-stage transition to using low-carbon electric power.In addition,as the realization of carbon neutrality is predicated on progress being made toward carbon neutrality in the wider society,such as the spread of renewable energy,we will also be providing support for carbon neutral initiatives in local communities.We are currently collaborating with Tokyo Electric Power Company Holdings,Inc.and MITSUBISHI MOTORS CORPORATION on a demonstration experiment at the Numazu Post Office(in Numazu City,Shizuoka Prefecture)and the Oyama Post Office(in Oyama City,Tochigi Prefecture)in relation to the challenge of long-distance travel using EVs(which has been a problem affecting the transition to EVs),involving the installation of rapid chargers and analysis of EV travel data.We are also contributing toward the improvement of the EV charging infrastructure in local communities by making the rapid chargers available for use by the general public.Japan Post has also forged a strategic tie-up with the Chubu Electric Power Group to promote the shift to carbon neutrality,and we are proceeding with preparations for making effective use of renewable energy by installing photovoltaic generating equipment and storage batteries at post offices.This will also contribute toward strengthening local communities resilience in the event of a natural disaster,because the power will be available for use in the event of an outage.In another initiative,as of the fiscal year ended March 31,2023,Japan Post had opened a total of eight environmentally friendly“ Eco Post Offices.”The special features of these“ Eco Post Offices”include being built using cross-laminated timber(CLT)panels,which are made using sustainable timber and provide outstanding strength and thermal insulation,as well as the use of renewable energy,including photovoltaic generating equipment.The Toma Post Office,which opened in February 2023 in Toma-cho in the Kamikawa-gun district of Hokkaido,not only uses CLT made from locally sourced timber but is also the first post office to feature chip boiler heating equipment that uses wood biomass fuel,as well as solar panels installed on the walls(rather than on the roof)so that photovoltaic power can still be generated during periods of heavy snowfall,when the roof is likely to be covered with snow.Through initiatives such as these,we will continue working to reduce greenhouse gas emissions and promote carbon neutrality in local communities.From a corporate perspective,measures aimed at resolving social issues in local communities often pose challenges in terms of maintaining profitability.However,we believe that,by making the local post office a hub for coordination with other participants,initiatives of this kind can be made sustainable,which in turn will help to enhance the sustainability of local communities itself.In April 2022,we launched a Local Co-creation Initiative,the aim of which is to generate new businesses in local communities by assigning head office employees of Japan Post Group companies,selected through a JAPAN POST GROUP Annual Report 20239Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentTop Commitmentcall for applicants,to spend two years working with local venture-stage companies and local government agencies in rural areas.By spending time at start-ups and local government agencies that are working vigorously to develop services which can contribute toward revitalizing local economies,increasing the number of people who are involved with local communities(even if they may not actually live there),and maintaining and enhancing local government functions,the employees will accumulate useful experience.In this way,the project will help to cultivate human talent with an entrepreneurial mindset,and by partnering with local start-ups and local government agencies,the Japan Post Group is taking on the challenge of generating new businesses that can help resolve social issues.In February 2023,in the Local Co-creation Initiatives first project,a demonstration experiment was performed for a new Community-based Shopping Service in parts of the eastern district of Nara City in Nara Prefecture(including the Tsukigase,Yagyu,and Higashisato areas),the aim of which is to strengthen local communities,making effective use of Japan Posts post offices and distribution network.Going forward,based on the results obtained in this demonstration experiment,we aim to work together with local government authorities and business enterprises throughout Japan to make everyday shopping more convenient and strengthen local communities,by utilizing Japan Posts network,which extends into every part of the country.Making Effective Use of Our Human Capital,Which Represents an Important Management ResourceHuman resources are extremely important in realizing our goal of building a“Co-creation Platform.”Since we are aiming to stimulate the Japan Post Groups growth and enhance its corporate value,we believe it is vital to maximize the value of human capital.To realize human capital management,we have formulated the Japan Post Group Human Resources Policy,and have been clarifying the direction needed for human resources initiatives aimed at making us the organization we want to be.So that we become a company that all employees can take pride in and feel rewarding working for,we are working on the following three points.First,we will realize true diversity that respects different viewpoints and values based on the recognition and acceptance of differences.Second,in order to enhance the abilities of our employees,we will support their career development by providing opportunities for them to challenge and improve their skills.Third,we are working to implement human resources cultivation and create an environment that supports employees efforts to grow and to challenge themselves,with the main focus being on developing employees who are able to make full use of their own strengths and creativity for the benefit of our customers.As well,we are working to create an environment where talent is staffed in the right seats.Currently,in response to the fall in the working-age population in Japan,many companies are focusing on how they can effectively make use of former employees.In the Japan Post Group,we have established an Alumni Network at our head office with the aim of getting“alumni”(Japan Post Groups former employees)who have acquired new experiences and capabilities outside the Group to come back and play a useful role within it,starting from the fiscal year ended March 31,2023.By building a strong,medium-to long-term relationship with alumni through provision of the latest Japan Post Group information,business outsourcing,side business opportunities,and mid-career recruits,we aim to take full advantage of the superiority of our Group,which has more employees than any other business enterprise in Japan,and to enhance our corporate value by making good use of the diverse human resources that constitute our Groups single biggest advantage.10Initiatives to Improve Employee ConductThe Japan Post Group has on numerous occasions been affected by incidents that went against the spirit of the Groups management philosophy and caused the public to lose trust in the Group as a whole.Each time,we have had to make an all-out effort to regain customers trust.To coincide with the launch of the new Japan Post Insurance sales system,we have formulated and begun implementing the JP Code of Conduct,a unified code of conduct for the entire Japan Post Group which concisely outlines how employees and company officers should act in order to live up to the expectations of customers,local communities,and society as a whole,so that the Japan Post Group can grow into an even more trusted enterprise in the future.In March 2023,we drew up and began implementing a three-year Group Conduct Enhancement Plan to ensure that the JP Code of Conduct is fully embodied in our organizational culture and corporate culture,and to enhance the quality of the actions taken by each individual employee and company officer.To ensure that the message of the JP Code of Conduct permeates throughout the Group,besides the top-down and bottom-up approaches represented by my own statements and by the creation of a JP Code of Conduct Suggestion Box to which employees can submit their insights,etc.,what is particularly important is to disseminate the message effectively among employees holding middle-management positions,who supervise large numbers of employees,act as a model for their subordinates,and have a responsibility to strive to ensure that an emphasis on appropriate conduct permeates widely.By spreading awareness of the JP Code of Conduct through incorporating the key aspects of the Code into the training provided for middle managers,we are getting the Japan Post Group as a whole to work together to realize operational management that is genuinely customer-focused,which in turn will lead to sustainable,strong growth for the Group.Playing a Vital Role behind the ScenesWhat we are aiming for is to build a“Co-creation Platform”supporting our customers and local communities by providing integrated postal,savings,and insurance services through our network of post offices,which is the Japan Post Groups greatest strength,and by collaborating with a wide range of companies outside the Group,and to provide the support needed to ensure that customers living in local areas can realize comfortable,enriched lives and lifestyles characterized by safety and peace of mind.To realize this goal,we believe that it is extremely important for us to collaborate not only with large enterprises but also with local government authorities and with local enterprises.More specifically,by undertaking various tasks relating to Japans Individual Number Card(“My Number Card”)system and the issuing of official certificates on behalf of local government authorities;by providing new shopping services in areas where depopulation has made it difficult for people to do their regular shopping;by providing Mimamori(Watch Over)Service to keep an eye on senior citizens living alone,or to keep an eye on empty houses;by providing End-of-life Planning Services,which help relieve senior citizens anxiety about end-of-life affairs;and by expanding the range of services to support peoples lives that we provide at our post offices on behalf of regional banks,we aim to make the value provided by our post office network more obvious to people throughout the country.I feel certain that,today more than ever,there is a need for us to focus on further strengthening the importance of the role that the post office plays,by introducing new services,aiming to increase our public nature as well as our profitability,and providing an even higher level of convenience for customers.One of the tenets of Hisoka Maejima,who laid the foundations for the modern Japanese postal system in the late 19th century,was“Do not hesitate to work behind the scenes.Always aspire yourself to bring others good.”In line with this ethos,during the Meiji era,in which Japan was modernizing rapidly,he and the post office continued,quietly but steadily,to introduce new ways of making life more convenient and more pleasant for people.In accordance with Maejimas teachings,going forward we will continue to support our customers and local communities from behind the scenes.JAPAN POST GROUP Annual Report 202311Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentTop Messages from Each CompanyTop CommitmentIKEDA NoritoDirector,President and Representative Executive Officer Japan Post Bank Co.,Ltd.SENDA TetsuyaPresident&CEO(Representative Executive Officer)Japan Post Co.,Ltd.TANIGAKI KunioDirector and President,CEORepresentative Executive OfficerJapan Post Insurance Co.,Ltd.My name is SENDA Tetsuya,and I have recently accepted the position of President&CEO,Representative Executive Offi cer of Japan Post Co.,Ltd.To realize the management philosophy of“Japan Post Co.,Ltd.will fully utilize its resources that include its post offi ce and delivery networks covering every corner of the country to provide safe,reliable,and fast services tailored to the needs of each community while contributing to the realization of a society with an abundance of human contact by supporting peoples lifestyles throughout their entire lives,”I hope to conduct business by fi rmly meeting the demands of our customers and the local communities we serve as well as the opinions of our employees who work in close contact with our customers and members of the local communities.The fi scal year ending March 31,2024,will mark the halfway point of the Medium-Term Management Plan“JP Vision 2025.”We will accelerate our initiatives The business environment surrounding Japan Post Bank is undergoing signifi cant changes,including a declining population,the advent of a super-aging society,shrinking regional economies,advances in digital innovation,and rapid monetary tightening by the U.S.and European central banks in response to higher infl ation.While responding fl exibly to these changes,we will strive to enhance corporate value and help resolve social issues under our Purpose of“We aim for the happiness of customers and employees,and will contribute to the development of society and the region,”our Management Philosophy of“We aim to become the most accessible and trustworthy bank in Japan,guided by the needs and expectations of our customers,”and the three missions set out in our current Medium-Term Management Plan.In FY2024/3,which is the third year of our current management plan,in a highly uncertain market environment,we will strive to secure profi ts steadily in the market business,our largest source of revenue.We will also focus on further strengthening the retail business to build a strong and stable business foundation,and on building the foundation for the (sigma)business,which we see as a new growth engine.With regard to the fi rst engine,the retail business,under our basic policy of complementarity between the physical and the digital,we will enhance self-service transaction channels and digital channels such as improving the features of Madotab My name is TANIGAKI Kunio,and I have been appointed as the President of Japan Post Insurance.In an effort to achieve its social mission(purpose)of“We will remain trusted and selected by customers,thereby protecting their lives by providing life insurance product,”and contribute to the resolution of social issues related to sustainability,Japan Post Insurance has formulated the Medium-Term Management Plan(FY2021FY2025)as its milestone.Based thereon,we have been advancing initiatives to achieve reconstruction and sustainable growth as a company truly trusted by its customers.Specifi cally,as an initiative toward reconstruction,a new Japan Post Insurance sales system was built starting in the fi scal year ended March 31,2023,in which consultants(employees who mainly visit customers homes to conduct activities)leverage their high level of expertise and fl exibility as life insurance professionals and concentrate on the proposal and follow-up of life insurance products.We also We will contribute to the realization of a society with an abundance of human contact for our customers and the local communities we serve by utilizing our nationwide network of post offi ces.We will fi re up our three business engines and promote ESG management.All employees are working as one to achieve the reconstruction and sustainable growth of Japan Post Insurance.12to realize a“Co-creation Platform”supporting customers and local communities by aggressively promoting DX to integrate our nationwide network of post offi ces,our greatest strength,with digital technologies,and by creating new value through collaboration and cooperation with companies outside of the Group and local government authorities.In the postal and domestic logistics business,Japan Post is striving to raise the quality of customer services including enhancing the convenience of sending and receiving mail and parcels in order to expand the number of packages handled in the growing e-commerce market,while also strengthening its collaborations with other companies.In addition,we will also promote initiatives to further raise productivity,including the utilization of telematics and AI to increase the effi ciency of delivery operations,and reducing manpower and streamlining of post offi ce operations through the use of state-of-the-art technology.Furthermore,given the many companies cooperating with Japan Post in our mail and parcel delivery and pickup services,we will promote initiatives to build partnerships with these cooperating companies.In the post offi ce business,we will advance the digitalization of post offi ce counter operations and raise operational effi ciency,including the utilization of tablets and the establishment of online support systems,thereby allowing our employees more time to meet customers and members of the local communities in person.We will also roll out various services that match the needs of our customers and the members of the local communities we serve to raise the value of our network of post offi ces,by thoroughly implementing customer-fi rst business operations,offering consulting services that align with customer needs,and collaborating with other companies and local government authorities.In the international logistics business,we will push forward with selection and concentration to maximize profi ts,such as our focus on the Asian market.Furthermore,by contributing to the resolution of social problems surrounding sustainability through company-wide activities,Japan Post hopes to grow sustainably while bolstering enterprise value over the medium to long term.Through these efforts,the employees of Japan Post are working as a team to make the post offi ce a needed presence and a chosen partner for customers and local communities.We ask for your continuing patronage and support of Japan Post more than ever.self-service terminals and ATMs,expanding the features of the Yucho Bankbook App and the Yucho Reco Personal Financial Management(PFM)App,while maintaining our branch network.We will provide thorough guidance according to customer needs so that customers can conduct transactions more easily and conveniently.In addition,as a new retail business strategy,we will start phasing in a“Co-creation Platform”strategy.This will work with a variety of businesses,using the Yucho Bankbook App and the Yucho Reco PFM App to guide customers on the best products and services for their needs.In addition,with regard to the asset building support business,based on the expansion of the NISA system*1 from 2024,we will strengthen our ability to propose to customers,including Tsumitate NISA*2.In the market business,our second engine,we will fl exibly rebuild the yen interest rate portfolio in anticipation of the possibility that domestic interest rates,which have been low for a long time,will rise.In addition,from the viewpoint of strengthening risk tolerance,we will continue to accumulate balance mainly in credit assets in the investment grade area.In the strategic investment area,we will strive to ensure stable returns by selectively investing in quality funds,mainly in debt(bond)-type products with relatively high resistance to market fl uctuations.With regard to the business,our third engine,we have positioned the two-year period from October 2022 to the end of September 2024 as the pilot period toward full-scale deployment from FY2027/3 onward.We will work to develop the implementation platform while striving to strengthen domestic general partner(GP)-related investment aimed at full-scale operation of the GP business and steadily expanding businesses that we support in marketing.To ensure the success of these three businesses,we are promoting human resource strategies that align with the Medium-Term Management Plan.In specifi c terms,we will nurture employees who develop themselves through challenges and develop an environment in which their abilities can be maximized,thereby building a lively and exciting company that allows diverse human resources to thrive.We will continue to fi rmly engage in dialogue with all of our stakeholders to achieve further growth by strengthening our sustainability initiatives through our business activities and establishing a business model that is sustainable over the medium to long term.I ask for your continued support and patronage.transitioned to a new system(account manager system)where employees with expertise provide high-quality,attentive after-sales follow-up services to individual customers.Based on this new sales system,in the fi scal year ending March 31,2024,we will go forward with the establishment of an integrated company-wide sales promotion system and the reinforcement of functions by preparing for the adoption of common standards and systems in the human resource development of consultants and integrating the front line(the sales division,etc.,which handles customers services)with the head offi ce.Moreover,to achieve sustainable growth,we are working on initiatives to improve customer experience value(CX).We hope to expand our customer base and enhance our competitive edge as a life insurance company by making customers feel glad to be with Japan Post Insurance at every contact point,from enrollment in the insurance policy to after-sales follow-ups and payment.Specifi cally,to meet the needs of customers who want to make various claims and carry out procedures without being restricted by time or location,we are improving our web services,among other initiatives.During the fi scal year ended March 31,2023,claims for hospitalization insurance due to COVID-19 became available on web services.We believe that it is our fundamental mission as an insurance company to stay close to our customers and simply and quickly pay insurance claims,especially in times of need.Furthermore,the foundation that supports these“pillars”of reconstruction and sustainable growth are our employees.Having each employee fi rmly understand the vision and mission of Japan Post Insurance and act autonomously toward those goals is indispensable for the companys growth.Japan Post Insurance is promoting management in which employees who will become the foundations of the businesses are treated as assets to fully demonstrate their abilities(=human capital management).We will continue to listen carefully to the thoughts of all of our stakeholders,including customers,shareholders,employees,and local residents,and press ahead to meet their expectations with the resilience to respond to the changing times and unchanging passion.We sincerely hope that going forward you will continue to follow Japan Post Insurance with interest.*1 A tax exemption system for small investments*2 A savings-type NISA for purchases of a fi xed amount on a regular basis in Japanese mutual fundsJAPAN POST GROUP Annual Report 202313Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop Commitment50.00657.4billion431.0billion120.82Net ordinary incomeNet income per shareNet income attributable to Japan Post Holdings5041.4%1.6%Dividends per shareDividends per shareDividend on equity(DOE)Payout ratio(Consolidated)Net ordinary incomeNet income attributable to Japan Post Holdings Net income per share2022/3131.93991.4501.62023/3120.82657.4431.02021/3103.44914.1418.2(Billions of yen)1,2001,0008006004002000120.0100.080.060.040.020.00(Yen)11,138.5 billionOrdinary income2022/311,264.72023/311,138.52021/311,720.4(Billions of yen)12,00010,0008,0006,0002,0004,0000Ordinary Income3.9%0.1%Return on equity(ROE)Return on assets(ROA)Overview of Stocks of Japan Post Holdings(As of March 31,2023)Securities code:6178Business year:April 1 to March 31Stock exchange listing:Tokyo Stock ExchangeSettlement date:March 31Annual General Meeting of Shareholders:June(voting rights record date:March 31)Dividend record date:March 31 for year-end dividends,September 30 for interim dividends(when interim dividends are paid out)Unit number of shares:100 sharesTotal number of issued shares:3,657,797,700Class of shares:Common stockTotal number of shareholders:741,7982022/3(Yen)(%)100.0080.0060.0040.0020.00050.0040.0030.0020.0010.000Year-end dividendDividends per Share/Payout Ratio(Consolidated)/Dividend on Equity(DOE)2022/3Stock Chart(%)4.03.53.02.52.01.51.00.50ROEROAPayout ratio(Consolidated)DOENet Ordinary Income/Net Income Attributable to Japan Post Holdings/Net Income per ShareReturn on Equity(ROE)Return on Assets(ROA)(Yen)1,4001,3001,2001,1001,00090080070002021/12022/12023/16009001,2003000(Millions of shares)Stock priceTrading volume3.80.22023/33.90.12021/33.40.11.537.950.002023/31.641.42021/350.001.648.3Financial InformationNet ordinary income in the fscal year ended March 31,2023,decreased 33.7%from the previous fscal year,to 657.4 billion,net income attributable to Japan Post Holdings decreased 14.1%from the previous fscal year,to 431.0 billion,and net income per share amounted to 120.82.Ordinary income in the fscal year ended March 31,2023,decreased 1.1%from the previous fscal year,to 11,138.5 billion.Annual dividends per share in the fscal year ended March 31,2023,amounted to 50.The payout ratio(consolidated)came to 41.4%.DOE came to 1.6%.ROE in the fscal year ended March 31,2023,increased 0.1 percentage points from the previous fscal year,to 3.9%.ROA came to 0.1%.Value Creation Strategy Financial and Non-Financial Highlights14Number of Women in Management Positions/Female Executive OffcersNumber of women in management positions(Persons)/Ratio of women in management positions(%)3,184Number of female executive offcers(Persons)*299.4%Note:As of July 1,2023Number of Persons Taking Childcare Leave/Average Number of Paid Holidays TakenNumber of persons taking childcare leave(Persons)3,425Average number of paid holidays taken(Days)18.9Total CO2 emissions*1Basic unit(Facility)*2Basic unit(Vehicle)*22,572 kt-CO20.053t-CO2/m20.000160t-CO2/kmGreenhouse Gas(GHG)EmissionsNumber of Agreements Regarding Cooperation with Local Communities/Agreement Conclusion Rate Non-Financial InformationNote:As of end of February 2023Note:The number of women and the ratio of them to the number of employees in management positions of the Group as of April 1,2023Note:Number of employees taking childcare leave,etc.,among employees or spouses of employees who have given birth in the fscal year ended March 31,2023Note:Average number of annual paid holidays taken(including days of paid leave carried from the previous fscal year and the fscal year before the previous fscal year)per employee in the fscal year ended March 31,2023*1 Total CO2 emissions:Scope 1,2,and 3 emissions of Japan Post Holdings,Japan Post,Japan Post Bank,Japan Post Insurance,Japan Post Transport,and Toll Holdings in the fscal year ended March 31,2022*2 Basic unit(Facility)and Basic unit(Vehicle):Results of Japan Post Holdings,Japan Post,Japan Post Bank,Japan Post Insurance,and Japan Post Transport in the fscal year ended March 31,2022Number of agreements regarding cooperation with local communities(Municipalities)(Agreements)/Agreement conclusion rate(%)1,733/99.5%Disaster prevention agreements(Municipalities)(Agreements)/Agreement conclusion rate(%)1,615/92.8%Number of comprehensive partnership agreements(Prefectures)(Agreements)44Number of schools holding letter-writingworkshop programs(Schools)21,276Letter-Writing Workshop ProgramsAA (Stable)Japan Credit Rating Agency,Ltd.(JCR)(Long-Term Issuer Rating)Note:As of December 15,2022Rating/External ESG EvaluationsSelected as a constituent ofthe FTSE4Good Index Series*1 andFTSE Blossom Japan Index*2*1 An index designed by FTSE Russell,the global index provider,to measure the performance of companies demonstrating strong Environmental,Social and Governance(ESG)practices*2 An index that selects Japanese companies demonstrating strong Environmental,Social and Governance(ESG)practices.The index has been adopted by the Government Pension Investment Fund(GPIF)as an ESG index.JAPAN POST GROUP Annual Report 202315Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentContinuing decliningbirthrates andaging populationFurther digitalizationIncreasing need for responding to ultra-aging societyRising social concerns over the increase in elderly single-person households,etc.Concerns over the sustainability of social infrastructureIncreasing use of services that can be fully used via smartphonesPenetration of cashless transactionsEmergence of digital divide issuesNationwide network of post offcesStrength1Delivery network and fnance networkStrength2Changes in social environmentsurrounding the GroupIdentify challenges that we should tackle to growJP Vision 2025Groups Strengths Utilizing motorcycle mobility for the last one mile of logistics Service and operational reforms with maximum use of data we possess Enhancing safe and secure services and business reform through the promotion of DX Boosting the fow of funds into local communities;strengthening community relations functions Transitioning to a new sales system Providing insurance services satisfying diverse protection needs of customers in all age groups Strengthening coordination within the Group Proactively forming partnership with companies,etc.,outside the Group Growth strategies to provide new value24,251Number of ATMs nationwide31,454Number of postboxes nationwide 175,145Number of countries included in the international logistics networkApprox.150Number of employees in the four main Group companies(As of March 31,2023)Approx.374,00092,16989,69470,434Regular employees:Approx.208,000Non-regular employees:Approx.166,000Financial Planner CertifcationInsurance Agent CertifcationNumber of employees with Securities Sales Representative CertifcationNumber of post offcesnationwideValue Creation StrategyChallenges we face to realize a“Co-creation Platform”supporting customers and local communities,and our Groups strengthsMedium-Term Management Plan“JP Vision 2025”*The number of customers is the sum of policyholders and insured persons(including individual insurance and individual annuities as well as Postal Life Insurance reinsured by Japan Post Insurance).16Vast customer base and extensive customer dataStrength3Trust in post offces and deep understanding of local communitiesStrength4JP Vision 2025Groups StrengthsValue CreationA“Co-creation Platform”supportingcustomers and local communitiesProviding lifelong support in an era of the 100-year lifespanSupporting local communities across JapanAiming fornew growthRegainingcustomerstrustCustomers Providing high-quality customer-oriented servicesShareholdersEnhancing shareholder returnsLocal communitiesContributing to regionaldevelopment and revitalizationEmployeesCreating friendly workplaces for employeesEnvironmentCreating a sustainable society(Q:Please mark all images that you have for post offces.)(Multiple choice survey conducted from November 2 to November 4,2022)(Survey subjects:Men and women in their 20s to 60s living in Japan;number of respondents:2,861)Number of delivery locations served dailyApprox.31 millionNumber of ordinary deposit accountsApprox.120 millionNumber of Japan Post Insurance customers*Approx.19.38 millionTop 3 customers perceived images of post offcesBeing close and familiar20.5%Rooted in local communities26.7%1stLocated everywhere26.1%2nd3rdJAPAN POST GROUP Annual Report 202317Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentValue Creation Strategy Medium-Term Management Plan“JP Vision 2025”Initiatives for“JP Vision 2025”IIZUKA AtsushiDirector and Representative Executive Officer,Executive Vice President,Japan Post Holdings Co.,Ltd.Under our main policy of“aiming to realize a Co-creation Platform supporting customers and local communities”of the Medium-Term Management Plan“JP Vision 2025,”we are working to combine the real world with the digital one(our network of physical post offi ces and“digital post offi ces”)through digital transformation(DX).Furthermore,we have been aiming for new growth for the Group by enhancing our core businesses(the postal and domestic logistics business,the banking business,and the life insurance business)including universal services,and also by transforming our business portfolio through expansion of the real estate business and the development of new businesses.Our accomplishments in the fi scal year ended March 31,2023On a consolidated basis,the Japan Post Group recorded net income attributable to Japan Post Holdings of 431.0 billion yen in the fi scal year ended March 31,2023,exceeding the previously announced full-year target by 31.0 billion yen,despite higher labor and procurement costs along with infl ation,as well as continued global monetary tightening,the Bank of Japans revision of handling of long-term and short-term interest rates(December 2022),and concerns about the fi nancial system triggered by the collapse of Silicon Valley Bank(March 2023)in the United States.Additionally,Japan Post Holdings(“the Company”)carried out the secondary stock offering of its subsidiary,Japan Post Bank(“the Bank”).The Company has been upholding the policy of reducing its stake in the Bank to 50%or less as early as possible in the“JP Vision 2025”period,from the perspective of enhancing the fl exibility of management of the Bank.Accordingly,in March 2023,a secondary stock offering of the Bank was carried out and the Company reduced its stake from approximately 89%to approximately 61%.As a result,this offering is expected to contribute to the progress of postal service privatization,and also to the continued listing of the Bank shares on the Prime Market of the Tokyo Stock Exchange,as now the Bank has come much closer to meeting the criteria for the tradable share ratio requirement among the continued listing requirements on the Prime Market.Future initiativesIn the fi scal year ending March 31,2024,we expect consolidated net income attributable to Japan Post Holdings of 240.0 billion yen,a decrease of 191.0 billion yen from the fi scal year ended March 31,2023.The major factor in this decrease is the decline in the Companys stake in the Bank.The approximately 1.25 trillion yen gained as proceeds from the secondary stock offering of the Bank will be allocated to investments for increased capacity in our postal and domestic logistics business,DX,and the growth of our real estate business.As well,by utilizing the acquisition of treasury stock to reinforce shareholder returns and enhance capital effi ciency,we will aim at increasing our corporate value.As for dividends,we will sustain stable dividends of 50 yen per share during the“JP Vision 2025”period.Under this dividend policy,for the fi scal year ended March 31,2023,we have decided to pay an annual dividend of 50 yen per share.For the fi scal year ending March 31,2024,we will continue to strive to realize the annual dividend of 50 yen per share.Additionally,through the fl exible acquisition of treasury stock,we will improve capital effi ciency.In the fi scal year ended March 31,2022,we acquired 350 billion yen in treasury stock,and in the fi scal year ended March 31,2023,200 billion yen.As well,we have a plan to acquire a maximum of 300 billion yen in treasury stock in the fi scal year ending March 31,2024.In addition to the fl exible acquisition of treasury stock,we will use debt fi nancing,such as the issue of ESG bonds for real estate investments in the fi scal year ended March 31,2023,to increase the fi nancial leverage of the Company(non-consolidated)with the aim of reducing capital costs and improving capital effi ciency.We will make efforts to improve the price-to-book ratio by promoting these measures that improve capital effi ciency,along with improving earnings.We will leverage our network of post offi ces,the Groups greatest strength,to provide integrated services of the Group while seeking partnerships with a diverse range of companies and organizations outside the Group,which we have never had before.Such efforts will help customers realize safe,secure,comfortable,and prosperous lives.We will strive for new growth for the Group through realization of a“Co-creation Platform”and conversion of our business portfolio.18A“Co-creation Platform”supporting customers and local communitiesWe will leverage our network of post offces,the Groups greatest strength,to provide integrated services of the Groupwhile seeking partnership with a diverse range of companies and organizations outside the Group,which we have never had before.Such efforts will help local customers realize safe,secure,comfortable,and prosperous lives.Grow by improving and strengtheningour core businesses and convertour business portfolioCorebusinessesNewbusinessesCreate new value through the fusion ofour network of physical post offces anddigital technologies(“digital post offces”)Network of physical post offcesDigital post offcesCompanies outsidethe GroupCompanies outsidethe GroupA“Co-creation Platform”supporting customers and local communities is a concept based on which the Japan Post Group strives to support the lives and lifestyles of customers across Japan by deeming the post offi ce network,the greatest strength of the Group,as a platform;collaborating with various companies and organizations outside the Group;creating new products and services together with our partners;and thereby providing heightened convenience,security,comfort,and prosperity to those customers.In order to realize the foregoing,the Japan Post Group works to combine both real and digital components through the promotion of DX and to transform our business portfolio.Vision of the Japan Post Group JAPAN POST GROUP Annual Report 202319Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop Commitment49.8%CurrentshareCurrentshare60.6P%or lessDuring theJP Vision 2025 periodShareholdings in the two fi nancial subsidiariesThe Postal Service Privatization Act stipulates that all shares in the two fi nancial subsidiaries shall be disposed of as early as possible while taking into consideration the status of management of Japan Post Bank and Japan Post Insurance,an impact on their performance of duties to ensure basic services pertaining to the postal business,etc.The Company aims under JP Vision 2025 to reduce its stakes in the two fi nancial subsidiaries to 50%or less as early as possible in the JP Vision 2025 period in accordance with the purposes of the Postal Service Privatization Act and from the perspective of enhancing independence and fl exibility of management of these companies.This will relax the additional statutory operational regulations on new operations imposed on these two companies and ensure steady progress in their privatization,including a shift to an advance notifi cation system.With respect to shares in Japan Post Insurance,through disposals of shares including,as announced in May 2021,a sale of shares in response to the acquisition of treasury stock by Japan Post Insurance and the Companys establishment of a stock disposal trust,the Companys voting right holding ratio in Japan Post Insurance became 49.8%.As a“Co-creation Platform”supporting customers and local communities,we will convert our business portfolio in such ways as securing earnings opportunities by promoting investment in the real estate business and new businesses in order to continue contributing to the solution of the SDGs and other social issues and to the sustainable development of society,while improving and strengthening our core businesses,such as the postal and domestic logistics business,the banking business,and the life insurance business.Early disposal of shares in the two fi nancial subsidiariesConversion of business portfolioindicates the Groups consolidated proftJapan PostReal estate businessJapanPost BankJapanPostInsuranceJapan PostReal estate businessNew businessesJapanPost BankJapanPostInsurancePresentDuring the JP Vision 2025 PeriodWe aim to reduce our stakes in the two fnancial subsidiaries to 50%or less as early as possible in the JP Vision 2025 period.Future of the GroupPost offcenetwork(After full disposal of our shares in the two fnancial subsidiaries)Japan PostReal estate businessNew businessesJapanPost BankOutsourcing/UndertakingCompaniesoutsidethe GroupOverall business model of the Groupas a whole will remain unchangedJapanPostInsuranceA“Co-creation Platform”supportingcustomers and local communitiesValue Creation Strategy Medium-Term Management Plan“JP Vision 2025”20Real estate investmentStrategic IT investmentInvestment in new businesses,etc.New businesses including M&As,etc.Investment in venture businesses,etc.Approx.430 billion yenApprox.300 billion yenApprox.230 billion yenApprox.20 billion yenApprox.180 billion yenApprox.200 billion yenApprox.500 billion yenApprox.1 trillion yenApprox.50 billion yenApprox.500 billion yenApprox.550 billion yenApprox.1 trillion yenPostal and domestic logistics business(P-DX promotion,etc.)Group real estate holdingsReal estate outside the GroupOur two fnancial subsidiaries(Digital service enhancement,etc.)Digital post offces,etc.(“Co-creation Platform,”digitalization of post offce operations,etc.)Japan PostJapan PostBankJapan PostInsuranceOverview of initiatives to improve effciency and productivityWorkforce forecastsCost reductionsDecrease by3,000 employeesDecrease byan amount equivalent to30,000 employees*Excluding the effects of the dispatch of consultants,etc.(approx.13,000 employees),to Japan Post Insurance for the creation of a new sales systemDecrease by55 billion yenDecrease by1,500 employeesDecrease by28 billion yenDecrease by160 billion yen*Including the effects of the dispatch of consultants,etc.(approx.13,000 employees),to Japan Post Insurance for the creation of a new sales system Boosting effciency by fully implementing measures including P-DX promotion,operational reforms,and digitalization of post offce operations A 30,000-personnel or 8crease in our workforce between April 2020 and April 2025 after reducing workloads through more effcient operations and optimal staff placement while maintaining the current level of network Strengthening investment in priority areas to improve productivity and boost our future proftability In addition to increasing personnel in enhancement areas such as our digitization response,etc.,through planned skill increases,we will drastically reduce workloads through work reforms and plan for a reduction in overall personnel of 3,000 individuals.In addition to assertive investments into focal areas such as DX advancement,we will drastically reduce predetermined expenses and drastically reduce expenses overall by 55 billion yen.Improving productivity of back-offce operations,etc.,by promoting DX to shift personnel to priority areas,including customer support Ensuring the effcient use of existing costs necessary for operational management and boosting investments in priority areas*The strategic IT investment includes non-personnel expenses related to strategic IT as well as the investment component of financial accounting.(Notes)1.The workload forecasts are based on the current projected workload.Actual workload may vary due to increases/decreases in workload.2.The workload forecasts compare the figures for April 2020 and April 2025(forecast).The cost reductions compare the figures for the fiscal year ended March 31,2021 and the fiscal year ending March 31,2026(forecast).For Japan Post Insurance,however,the figures compare those for the fiscal year ended March 31,2022,which is after the transition to the new sales system,and the fiscal year ending March 31,2026(forecast)due to the suspension of operations in the fiscal year ended March 31,2021.3.Data includes that of employees on fixed-term contracts.4.The cost reductions at each company are calculated by each company,and adjustments resulting from the Group consolidation have not been taken into account.The figure for Japan Post is for employment costs,while those for Japan Post Bank and Japan Post Insurance are for general and administrative expenses.Amounts of investment in the five years to the fiscal year ending March 31,2026*The real estate investment is investment by Japan Post Co.,Ltd.and Japan Post Real Estate Co.,Ltd.*The investment in venture businesses,etc.,is investment by Japan Post Capital Co.,Ltd.We will make investment in three priority areas,namely,strategic IT investment,real estate investment,and investment in new businesses,etc.,to realize our growth strategies.In our strategic IT investment,we will promote DX on a Group-wide basis by combining both real and digital components.In our real estate investment,we will integrate and improve the efficiency of business facilities,which are assets of the Japan Post Group,and promote their use in the real estate business.In our investment in new businesses,etc.,we will make investment in collaboration partners outside the Group for the realization of a“Co-creation Platform”supporting customers and local communities.In addition,we will make investment in businesses to improve and strengthen our core businesses.For the aforementioned investment,we will make decisions deliberately yet boldly,taking into account past experience,lessons learned,etc.,and utilizing specialized knowledge starting from the investigation stage,while ensuring compliance and risk management.The entire Group will strive to boost operating efficiency and invest in priority areas to improve productivity.We expect to reduce the workforce by an amount equivalent to approximately 35,000 employees at our four main Group companies by the fiscal year ending March 31,2026.This will be achieved through optimal staff placement and natural attrition,among other measures.Investment for growthInitiatives to improve efficiency and productivityJAPAN POST GROUP Annual Report 202321Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentValue Creation Strategy Medium-Term Management Plan“JP Vision 2025”Japan Post GroupJapan PostConsolidated net operating incomeConsolidated net incomeConsolidated net incomeROE(based on shareholders equity)Consolidated net incomeEV growth ratio(RoEV*3)Customer satisfaction*4NPS*5Number of policies in forceDividends per share(DPS)Revenue from package delivery,etc.Number of Yu-Pack handledOperating income Postal and domestic logistics business Post offce business International logistics business46%reduction by 2031/3(compared to 2020/3)*1,*2Financial TargetsESG TargetsDividend policyConsolidated net incomeConsolidated net incomeattributable toJapan Post HoldingsROE(based onshareholders equity)Greenhouse gasemissionsWomen inmanagementrolesRatio of women in management positionsat our head offceJapan Post InsuranceTo build a sustainable society,the Group will provide lifelong support in an era of the 100-year lifespan,and contribute to the development and revitalization of regional communities all over Japan.Stable issue of annual dividendof 50 yen per shareJapan Post BankCapital adequacy ratio/CET1 ratio*1(Level to be secured)OHR*2(based on inclusion of proft/loss,etc.,from money trust management)General and administrative expenses(compared to 2021/3)510 billion yen280 billion yen*Approx.4%Aiming to achieve carbon neutralby 2050*230%by 2031/3*3,*4Targeting the level of approximately 50%to 60%payout ratio and aiming to increase DPS from the initial forecast in the fscal year ending March 31,2022(Please refer to Japan Post Banks Medium-Term Management Plan for details.)In principle,aim not to decrease but to increase DPS for the period of the Medium-Term Management Plan.Note:Includes consolidated net income attributable to non-controlling interests(interests other than the parent company,Japan Post Holdings)Note:Assuming an approx.89%stake in Japan Post Bank,we aim to achieve a net income of 420 billion yen(Aiming for further improvement in future)49 billion yen22 billion yenAt least 350 billion yenDown 55 billion yenApprox.10f%or lessAt least 3.6 billion yenAim for 6%to 8%growthAim for 90%or moreAim for one of the highest in the industry20 million or more policies33 billion yen5 billion yen12 billion yen890 billion yen1,360 million*1 The capital adequacy ratio based on the domestic standard and the CET1 ratio based on the international standard.(Basel III totally implemented,ordinary base excluding net unrealized gains on available-for-sale securities)*2 Costs (net interest income income from fees and commissions,etc.)Net interest income refers to the amount of interest income less interest paid(including gain/loss on sale).Financial Targets*Calculated on the assumption of a 50%stake in Japan Post Bank and a 49.9%stake in Japan Post Insurance.ESG Targets*1 Includes Scope 1(direct emissions from our companies)and Scope 2(emissions from the use of electricity,etc.,supplied by other companies)emissions.Increases due to new businesses,including the real estate business,are not included.*2 The achievement of these targets assumes that Japan will become carbon neutral to a considerable degree through the widespread adoption of renewable energy,etc.The Group will assist the push toward carbon neutral societies in both Japan and the rest of the world.*3 The figure is the percentage of management positions filled by women at the head offices of our four main Group companies.The target is the percentage as of April 1,2031 as the results of initiatives up to the end of the fiscal year ending March 31,2031.*4 The Group will also work to improve the work environment and train human resources to boost the number of employees pursuing management and executive positions,thereby increasing the number of women in management positions in locations other than our head offices.*3 Calculated by excluding economic variance factors.*4 The total percentage of customers who replied“Satisfied”and“Somewhat satisfied”on a 5-point customer satisfaction scale.*5 NPS is an abbreviation for“Net Promoter Score”and a registered trademark of Bain&Company,Inc.,Fred Reichheld,and Satmetrix Systems,Inc.Major targets22Head OffcePost OffcesBranches,etc.Head OffceDirectly Managed BranchesRegional Headquarters,etc.BranchesRegional HeadquartersMeasures to Strengthen GovernanceHuman Resource(HR)Development and StrategyPersonnel ExchangesUtilization of feedback in managementCustomerfeedbackEmployeefeedbackHead OffceIncl.servicecenters Encouraging both internal and external personnel exchanges to introduce fresh perspectives into the Group Training personnel with expertise in DX,etc.,and recruiting external specialists proactively Functions to fnd talents and develop personnel within the Group to utilize our diverse human resources Review of sales targets and personnel evaluations in line with our customer-oriented approachStrengthening Japan Post Holdingsfunctions as the“control tower”Group CxO system*Integrated management of Japan Post Holdings and Japan Post Transfer of authority to branches Reviewing governance to create an integrated management system of post offces*Introduction of a system with Group CEO(Chief Executive Officer),Group CFO(Chief Financial Officer),Group CCO(Chief Compliance Officer),etc.We will faithfully do our utmost to regain customers trust which has been greatly damaged by the scandals since 2019.An effort to regain customers trust and a step toward growth strategies are not two separate initiatives but are the ones required to be jointly tackled in order for us to be needed and selected by customers and local communities.In addition,in order to enable us to provide customer-oriented services,we will boldly reform the Japan Post Groups corporate culture from aspects of both strengthening of governance and human resource development and strategy.With respect to strengthening of governance,we will introduce a system of Group CxOs who implement cross-organizational adjustments and provide advice for the Groups main fields including finance,IT,risk management,human resources,etc.We will build a system that can detect and respond to“conduct risks”promptly and thoroughly manage risks of the Group as a whole.In addition,we will promote integrated management of Japan Post Holdings and Japan Post.At the same time,Japan Post will transfer part of its authority to branches and review the management structure to operate post offices in an integrated manner.As described above,we will work to strengthen Group governance so that both the speed of management decision-making and the frontline mobility and ability to respond are heightened concurrently.As for human resource development and strategy,we will review sales targets and the personnel evaluation system focused mainly on sales amounts.We will also push forward with creation of a framework in which we promote personnel exchanges within the Group,recruit external specialists,and find and develop diverse Group human resources.In addition,we will reform ourselves into an organization which is open to feedback from customers and employees and allows for open communication inside and outside the Group.Through these and other measures,we will faithfully do our utmost to reform our corporate culture.Groups corporate culture reformationRegaining customers trust and reforming corporate culture JAPAN POST GROUP Annual Report 202323Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentValue Creation Strategy Medium-Term Management Plan“JP Vision 2025”Capital StrategyShareholder returnsImprovement of capital efficiencyJapan Post Holdings considers returning profits to shareholders to be an important management measure and sets out its basic policy to continuously provide stable return to shareholders in accordance with the results of operations.With regard to dividends from retained earnings,the Company aims to provide stable returns to shareholders while maintaining required internal reserves and paying attention to capital efficiency.Accordingly,the Company intends to sustain stable dividends per share with a targeted annual dividend of 50 yen per share until the end of the fiscal year ending March 31,2026,which is covered by the JP Vision 2025 period.Additionally,the Company has decided to improve capital efficiency through the flexible acquisition of treasury stock during the JP Vision 2025 period and has acquired approximately 350 billion yen in treasury stock in the fiscal year ended March 31,2022,and approximately 200 billion yen in the fiscal year ended March 31,2023.Furthermore,it will acquire a maximum of 300 billion yen in treasury stock in the fiscal year ending March 31,2024.Consolidated netincome attributableto Japan Post HoldingsDividends per share(Billions of yen)(Yen)Dividends(Billions of yen)Acquisition of treasury stock(Billions of yen)50479.42019/3202.250483.72020/3202.250418.22021/3202.250501.6350.0*183.12022/350431.0200.0173.02023/3*Includes the approximately 4.5 billion yen acquired in April 2022Japan Post Holdings non-consolidated BS(As of the end of JP Vision 2025)Japan Post Holdings non-consolidated BS(As of March 31,2021)Assets5.99 trillion yenNet assets 5.91 trillion yenAssetsNet assetsLiabilitiesAcquisition of treasury stockLiabilities 0.08 trillion yenUse debt while taking investment funding needs and treasury stock acquisition into accountAiming to improve capital effciency and enhance shareholder returnsJapan Post Holdings efforts to improve capital efficiencyIn addition to flexible acquisition of treasury stock,we will use debt financing to increase the financial leverage of Japan Post Holdings(non-consolidated)with the aim of reducing capital costs.We will improve capital efficiency(ROE)by reducing capital costs as well as improving profits.2021/32022/32023/3ROE(based on net assets)*13.4%3.8%3.9%ROE(based on shareholders equity)*23.9%4.7%4.4%*1 Calculated based on equity capital in which non-controlling interests are deducted from net assets and rounded off to the first decimal point.*2 Calculated based on shareholders equity in which non-controlling interests and net unrealized gain on available-for-sale securities are deducted from net assets and rounded off to the first decimal point.24https:/www.jpcast.japanpost.jp/nukumori.html(in Japanese only)https:/www.jpcast.japanpost.jp/(in Japanese only)Developing Communications with Customers to Further Enhance the Japan Post Groups Brand ImageSlogan:“Evolving warmth”Developing unified Group communicationcentered around post offices“JP CAST,”a web media platform communicating a diverse array of information from the Japan Post GroupThe slogan expresses the Groups fundamental desire to be the“warmth”for all of Japans communities.This desire is an essential value of the post office,which we have continued to protect through the generations.And as society changes,so too are we required to evolve,providing services and taking on new challenges that align with the times.The Japan Post Group,propelled by this fundamental desire,will continue to evolve with renewed commitment,and raise the warmth of our hospitality throughout Japan to greater heights.The name embodies our desire to communicate our real selves through our own words.“JP”represents the Japan Post Group,and“CAST”represents the idea that everyonebe they employee or customeris a cast member of our broadcast station.Since its launch in January 2022,many customers have visited the website.We have also started offering our official app to make it more user-friendly and easier to visit our website.Going forward,we will offer information through JP CAST portraying the real picture of post offices and how they have continued to closely support the community.Through our initiative,our customers will see with their own eyes what the current Japan Post Group is all about.With some 24,000 post offices and 400,000 employees nationwide to call upon,our diverse array of information contains everything from the diligent efforts of our employees to their heartwarming anecdotes,inspiring tales,and initiatives toward the future,as well as juicy trivia that you will want to tell someone about.In other words,the breadth of our content is infinite.Please experience the evolution and the warmth of the Japan Post Group for yourself through JP CAST.SearchJP CASTJAPAN POST GROUP Annual Report 202325Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentValue Creation Strategy Initiatives for New GrowthPromotion of Group DXRealization of the“post offi ces of the future”through a fusion of digital technologies and real componentsIIDA YasuhisaManaging Executive Officer,Japan Post Holdings Co.,Ltd.Senior Executive Officer,Japan Post Co.,Ltd.CEO&Representative Executive Officer,JP DIGITAL Co.,Ltd.We believe that post offi ces are capable of providing fresh and even more incredible experiences to customers.Our hope is to greatly expand the possibility through maximum use of the power of digital technologies.The Japan Post Group has been promoting various DX measures by designating as“post offi ces of the future”those post offi ces that thoroughly raise customer experience value(CX)through“the fusion of its network of physical post offi ces and digital technologies,”as indicated in the Medium-Term Management Plan“JP Vision 2025.”The“post offi ces of the future”will create new value in the following three domains for customers as well as post offi ce employees.The fi rst domain is to always“make counter procedures more convenient”through digital tools and human capability.The second domain is to“make support for customers daily lives more accessible”by providing various services that support daily lives,such as money,health,and shopping services.And third,we adopt“smart work styles”for each of our employees through digital technologies.To date,post offi ces have continued creating services that are devised from the point of view of ordinary citizens and are helpful to them.We are familiar with the faces of our customers,the ties between us can be readily activated at any time,and customers feel comfortable coming to us for consultation.We are committed to creating the“post offi ces of the future,”which are closer to the lives of our customers and are always there to help them through the seamless integration of digital technologies and services that allow one to feel the warmth of personalized service.Concept of the“Post Offi ce of the Future 1.0 Model”Digital ticket dispensers Sales catalogs/Digital application forms Cashless terminals(“stera terminal”)Self-service fnancial procedures Self-service terminals/mailboxes Expand self-completed procedures Promote the expansion of paperless procedures Develop infrastructure such as cashless tabletsOngoing measures of the plan Professional fnancial consultation Online consultation booth End-of-life planning consultation Shopping support Watch over services for vacant housesFuture plans Expand remote consultation bases nationwide Improve the remote consultation services menu Further develop services to support the daily lives of customers(Subcontract local government and corporate affairs)Reduce administrative burden/work hours Reduce procedural work hours through self-service postal checkout services Reduce the operational burden of counter employees by connecting to staff with expertise online Make sales catalog applications more effcient by utilizing tablets Reduce and digitize account ledgers Increase online procedures for human resources-related matters(go paperless)Enhance the attentive and warm customer service that is unique to the post offce Provide remote operational support by post offce employees and staff with expertise(e.g.,online cancer insurance consultations/fnancial consultations)Serve customers based on past purchasing data(when a customer logs in to the app,the post offce employee can view the customers information)Respond to various consultations concerning the customers daily lives utilizing the generated resources and online toolsOngoing measures of the planFuture plansProvide various services that support daily lives,such as money,health,and shopping servicesMake support for customers daily lives more accessibleCounter procedures can always be done convenientlythrough digital tools andhuman capabilityMake counterprocedures moreconvenientAdopt smart work styles for each post offce employee through digital technologiesSmarter work styles“One ID”/A new postalservice app26Initiatives to promote DX throughout the GroupCommenced proving tests for the“post offi ces of the future”at the Otemachi Post Offi ceIn July 2022,the Otemachi Post Offi ce,located on the fi rst fl oor of the head offi ce building,opened as a demonstration experiment post offi ce.We will try both digital and real-world measures,improve functions,and introduce new measures step by step in an effort to thoroughly raise CX.For example,through the adoption of the self-service postal checkout service,customers can now weigh and send mail and parcels,as well as purchase various goods(Letter Pack envelopes and other products for sale),without waiting in line at the counter.In addition,with our Life Counseling space,we have established an environment where a remote consultation on fi nancial services can be conducted comfortably.We have also set up an environment that allows us to provide information on services by sharing PC and tablet screens to make the consultations more accessible and customer friendly.Furthermore,since November 2022,we have installed the digital ticket dispenser,which was developed and revamped by JP DIGITAL Co.,Ltd.,and are undertaking other daily updates based on the comments of customers and employees in order to eventually roll out the“post offi ces of the future”to other post offi ces.Roll out various“post offi ce of the future”modelsWe will provide services that match the needs of the areas and markets in which each post offi ce is located.We plan to roll out initiatives that will become the model at various post offi ces.Cultivating new fans of the postal service and aiming to create contact points with customers Utilization of non-fungible tokens(NFTs)Through the Rakuten NFT marketplace,we commenced sales of NFT stamp artwork of regular stamps starting in October 2022,and from January 2023 we commenced sales of NFT stamp artwork of Posukuma.Through these measures,we hope to acquire new fans of the postal service.Utilization of metaverse spaceIn our booth at Tokyo Marathon Virtual EXPO 2023,which was held from February 17 to March 17,2023,we exhibited Posukuma in 3D and displayed various items including our NFT stamp artwork.We will create new value by connecting the data ofeach Group company and real and digital data through a common ID.Common ID/Integrated databaseAddressinformationFamilycompositionProductpurchasinghistory.InsuranceenrollmentproductsFamilycompositionHospital information/medical history/health informationHospital information/medical history/health informationCo-creation partnersServices usedin the pastProductspurchasedin the pastMovementinformationCredit cardinformationDeposit andwithdrawaltransactionsSavingsaccountbalanceLooking back on the fi scal year ended March 31,2023Future initiativesCurrent initiatives for the Otemachi Post Offi ceLounge spaceTabletsAI cameras and sensorsLife Counseling spaceOnline reservation systemConsulting appDigital application forcancer insuranceDigital ticket dispenserSelf-service mailbox/Self-service postal checkoutUrban area:Business districtCore functions of the new postal service app 1.0Sendletters and parcelsReceive letters and parcelsSearchfor post offi ces and mailboxesReservecounter servicesat the post offi ceUrban area:Areawith heavycustomer traffi cSuburb:Regionalcities/areas with heavycustomer traffi cResidential areaRegional areaOverhaul of the post offi ce appThe revised post offi ce app is expected to be released in autumn 2023*.With the overhaul of the app,we will aim to raise CX value and fuse real and digital contact points.*First,we will release functions that mainly focus on the easy sending/receiving of postal mail and gradually add and improve more functions.“One ID”By unifying the various IDs used by the customer at the Japan Post Group into an integrated ID system,we will get to“know the customer better.”In summer 2023,we plan to fi rst release the migration of the postal service ID.*To be implemented upon obtaining the consent of the customer and practicing thorough personal information protection.JAPAN POST GROUP Annual Report 202327Value Creation StrategySustainabilityCorporate GovernanceData CompilationTop CommitmentDX Initiatives of the Group CompaniesWe will continue to boost operational efficiency by utilizing digitized sender data and recipient data unique to Japan Post,while pursuing ways to make it easier for customers to send and receive packages.Specifically,we will work to improve productivity in such ways as automated routing and optimized personnel allocation by utilizing the digitized data mentioned above.In addition,registering shipping label information on a smartphone app will enable customers to mail packages without writing labels by hand,thereby meeting the desires of people who want to send items without any staff assistance or contact.Furthermore,customers will be able to receive advance delivery notifications and arrange delivery to suit their schedules by requesting changes to the delivery date,time,and location.In addition,from February 2023,we commenced operations of transport telematics,control systems,and automated guided vehicles(AGVs)at the Ichikawa Minami Post Office(Ichikawa City,Chiba Prefecture).In the operations at post office counters,also,we will promote the digitalization of post office operations through the utilization of tablets,the establishment of an online support system,and the expansion of self-service operations and provide an environment conducive to effective and efficient sales activities,while utilizing the resources generated from such efforts to expand various services that meet the needs of the community and customers.We have been meeting the growing needs for services without physical contact or face-to-face meetings by launching a digital application services for cancer insurance and simplified issue health insurance and an online consultation service for investment trusts,while also progressively introducing digital ticket dispensers and self-service postal checkout services.We have also commenced the operations of Financial Services Contact Centers where dedicated operators provide explanations and conduct application services for Tsumitate NISA and non-life insurance products through online.Going forward,we will continue to strengthen these initiatives and advance the digitalization of post office operations to improve the convenience for our customers as well as utilize the consulting app and digitized sales activity records to provide consulting services that suit the needs of each customer.In addition,as of April 1,2023,cashless payment,including payment by credit cards,has been adopted at approximately 8,600 post office counters across the nation and we intend to extend this to all directly managed post offices countrywide for further service improvement.*P-DX:Postal-Digital TransformationConceptual image of the post office counter of the futureValue Creation Strategy Initiatives for New GrowthP-DX*,data-driven postal and logistics business reformPromoting digitalization of post office operationsCustomersLarge post offces and busy post offcesSmall post offcesIncreasing the number of tabletsPostal and merchandise counter Increased business effciency through tablets Self-service operations can be completed through self-service terminals,lockers,and other devices(accessible 24/7)Financial services counter Improved business effciency and simplifed operations through the utilization of tablets and other devices Advanced life planning by specialists Increasing and distributing the number of tablets required for each post offce Achieve greater effciency in existing core services,labor,and inspection services Provide new servicesSupport provided by bases including companies providing products such as Japan Post Bank and Japan Post Insurance,functional centers,and directly managed post offces Agency service for explanation and receiving applications for products Support for application procedures of core products Checking the status of congestion at the post offce and reserving counter time in advance Simplify advance checks on how to use services Improve the functions of the Yucho Bankbook App,Japan Post Insurance My Page,and other services Online fnancial consultations Note:Also addressing the needs of the communityExpand digital servicesBuild a support system*Training will also be re-examined in conjunction with the revision of the services provided Postal and merchandise counter Improved business effciency through tabletsFinancial services counter Improved business effciency and simplifed operations through the utilization of tablets and other devices High-quality and appropriate,consulting-driven sales through digital technology Accepting applications for various products and services online and internal referral or assignmentCounter for addressing regional issues Collaboration with local governments and other companies Revitalization of the local communities Support for the elderly,etc.*Tablets to be used for complex procedures such as certifcation of contents and international postal services Remotereferral or assignmentRemotereferral or assignmentSupportSystems and databases for achieving the“post offces of the future”Support system forthe post offce counters Record,accumulate,and analyze aggregated customer information;use such information as a reference at the post offce,and make recommendations that match customers needs(Make product presentations)Analyze various information within and outside of the Group and materialize effcient and effective sales supportBuild an infrastructurefor digital utilization Integrate the customer information of the Japan Post Group(e.g.,contract information)and IDs(e.g.,Japan Post IDs)Build a Group platform app as a means to combine the real and digital components and as a base for providing digital servicesData-driven postal and logistics business reformCustomers sending packagesEasier for customers to send packagesBoosting operational effciencyEasier for customers to receive 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