Maruho Report 2023141.Maruho’s Meaning of ExistenceIn October 2022, we renewed our Corporate Philosophy. The revised philosophy is based on the principle that it takes all of us working together to deliver high quality. Our Mission and five Values describe our vision for the Company and reflect our corporate culture and daily conduct. We want every employee to apply these in their decision and actions. To lead by example, I send out CEO Monthly Message videos where I talk about how I put our Mission and Values into practice.We also conduct an employee engagement survey that we call “More Smiles” with the aims of gauging the degree of permeation and implementation of the Corporate Philosophy and of identifying issues that employees confront in their daily activities. The survey results serve as a sort of report card for myself and the Company, and I consider them just as important as the financial figures. My job is to use the results to verify the current status and guide us in the best direction forward. We also hold town hall meetings where we can listen to and discuss people’s opinions and thoughts. We will continue applying the cycle of understanding the current situation, engaging in dialogue, and taking action as a key way to deepen employee engagement and as a way for us all to continue improving.At this moment, we have a tremendous opportunity to set the stage for further growth. I would like to share our understanding of the present situation and our view of where we stand.First, social security costs are skyrocketing. The sustainability of the social security system is being questioned as funds available for medical care diminish in a society that is aging, has declining birthrates, and has increasingly sophisticated medical care. These conditions are putting pressure on pharmaceutical companies to provide answers through innovation, including by creating new breakthrough drugs. At Maruho, we are seeking to create new value by offering new drugs and expanding our late-stage development pipeline of drugs. We are strengthening our activities in our areas of focus and eliminating waste to further refine our lean corporate structure and enable continuous growth.The second is the development of a global division of labor. The pharmaceuticals industry has a long value chain, and division of labor from drug discovery all the way to sales has become standard. We will focus on collaboration in product creation with academia, venture companies, and other pharmaceutical companies around the world.The third is the democratization of healthcare. Digitalization in healthcare will accelerate with the emergence of generative AI and other new technologies. The information gap between medical professionals and patients will narrow even further, and patients will play a greater role in treatment choices. We will make full use of digital technology and our network of medical professionals and patients to provide value to each person suffering from skin conditions.These points are the backdrop for the new Fifth Medium-Term Plan (October 2023 to September 2026). As the first plan formulated under the new Corporate Philosophy, it includes measures to implement our Mission and to integrate the five Values into our corporate culture. Over the next three 2.Value Creation Prospects3.Strategy for Value Creation4.Foundation for Sustainable Growth5.Financial/ Company InformationThoughts on the new Corporate PhilosophyOutline of the Fifth Medium-Term PlanBringing more smiles into people’s liveslaying the groundwork for the futureRefining Maruho’s strengths and
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