Roland DG : 06/19/2024 Annual Report 2023

ANNUAL REPORT 2023

Year ended December 31, 2023

Purpose

To Empower Creativity and Excitement Worldwide

Through innovative digital solutions, we provide people around the world with the amazement and joy of creation,

as well as the wow and excitement that result from it.

Ever since our foundation, we have not only provided products but also created

markets and helped enrich our customers' lifestyles and the world through the power of digital technology. Articulating our reason for existing, we are determined to share our purpose with the world, in addition to the core values embodied in our slogans, "Creativity," "BEST," and "Cooperative Enthusiasm."

Mission

Bringing new opportunities to society through digital technology

Slogans

Inspire the Enjoyment of Creativity Be the BEST rather than the BIGGEST

The Roland Family - Cooperative Enthusiasm

INDEX

TOP MESSAGE	02
To our Shareholders and Investors
SPECIAL FEATURE	04

Special feature Initiatives for Transforming the Business Portfolio

MANAGEMENT

19

Corporate Governance

Board of Directors

Skill Matrix of Directors and Executive Officers

NEW PRODUCTS / TOPICS	07
OPERATING & FINANCIAL REVIEW	10
Net sales by market
Net sales by region
AT A GLANCE	14
Roots
Business Summary
DG Value

SUSTAINABILITY	28
FINANCIAL HIGHLIGHTS	41
FINANCIAL SECTION	42
CORPORATE DATA

ESG Initiatives

Environment		Social		Governance
Launched environmentally friendly		Enhanced customer service and support and		Promoted cost of capital and stock price
paper-based ink cartridges		added value through effective use of data.		conscious management through ROIC
									management.
Certified as carbon neutral achieving		Launched Roland DG Assemble, which		Identified key sustainability issues
business by the city of Hamamatsu		helps solve problems such as workload and		(materiality) to promote sustainability
				labor shortages at production sites.		transformation.
Enhanced the climate-related disclosure		Built new HQ office to support employees'		Strengthen the enterprise risk
by calculating financial impact. Earned a		creative work scenes and healthy work life.		management system to encompass
B- in the CDP.							strategic risks.

01

TOP MESSAGE

To our Shareholders and Investors

To Our Shareholders and Investors

President, Representative Director

Kohei Tanabe

Consolidated Financial Results for the Fiscal Year Ended December 31, 2023

I would like to take this opportunity to thank our shareholders and investors for your continued support.

Roland DG Corporation (the "Company") and its consolidated subsidiaries (collectively, the "Group") have formulated a three-yearmedium-term business plan (FY2021 - FY2023) based on the core strategies of "transforming the Company into a lean organization" and "transforming the business portfolio" and have worked on transitioning from the business model that relies on eco-solvent printer for production of traditional signboards (advertising, etc.). During the fiscal year ended December 31, 2023, the final year of the medium-term business plan, we actively launched new products and implemented global promotional activities as part of our aim to complete the transformation of our business portfolio. Further, with the aim of expansion of growth areas, we completed the acquisition of the shares of Lithuanian wallpaper materials manufacturer, UAB Dimense print, in October and changed the trade name of the acquired company to UAB DG DIMENSE.

02

TOP MESSAGE

To our Shareholders and Investors

In operating results for the fiscal year under review, net sales increased by 7.1% compared with the previous fiscal year to 54,018 million yen, due to strong demand for capital investment. The ratio of cost of sales improved by 0.7 percentage points from the previous fiscal year due to reductions in marine transportation costs relative to the previous fiscal year. Selling, general and administrative expenses were higher than the previous fiscal year due to increases in personnel expenses, advertising expenses, travel and transportation expenses, and transportation and storage costs, mainly because of aggressive promotional activities. As a result, operating profit decreased by 14.2% compared with the previous fiscal year to 5,217 million yen, and ordinary profit decreased by 12.7% to 5,348 million yen. Profit attributable to owners of parent decreased by 0.6% compared with the previous fiscal year to 4,302 million yen.

Toward Further Enhancement of Corporate Value

Since its foundation, the Group has helped its customers to create added value under our mission of "Bringing new opportunities to society through digital technology." Meanwhile, we recognize the further expansion of growth areas and the greater strengthening of initiatives for the transformation into a lean organization as our challenges for the realization of future medium- to long-term growth and the enhancement of corporate value.

We will continue our endeavors to create new value and to solve social issues, and we look forward to your continued support.

Financial Results Highlights

Net Sales

Operating Profit

	(Millions of Yen)
Ordinary Profit	Profit attributable to
	owners of parent

	50,459	54,018
45,095
FY2021	FY2022	FY2023

6,056	6,083
		5,217
FY2021	FY2022	FY2023

6,082	6,126
		5,348
FY2021	FY2022	FY2023

	4,327	4,302
3,733
FY2021	FY2022	FY2023

03

SPECIAL FEATURE

Special feature Initiatives for Transforming the Business Portfolio

Special feature Initiatives for Transforming the Business Portfolio

Based on the core strategy of transforming the business portfolio in the medium-term business plan (FY2021

• FY2023), the Group is working on transitioning from the business model that relies on Eco-Solvent printers for production of traditional signboards (advertising, etc.). As part of this initiative, we have begun platform development of printers with the aim of greater development efficiency. As a first step, in March 2022, we completely updated the product lineup of the TrueVIS Series, our flagship brand of printers targeting the sign market. In this fiscal year, we undertook a brand review and expanded our lineup for the Visual Communication market, based on our sales strategies in developed and growth markets. For the Digital Fabrication market, we also strived to improve ingenuity to make appealing offers by strengthening our existing brands and launching new ones.

VC Roll-out to developed markets-Expansion of TrueVIS Series lineup

We define Visual Communication as the act of appealing to consumers' sense of sight. Taking a comprehensive view of the changes in consumer needs in the sign market in recent years and the increasing diversity of where signs are used, we revised our VC brands. In the second quarter of this fiscal year, in a first for the Company, we added a resin ink printer, AP-640, and the LG and MG Series of UV printers to the TrueVIS Series product lineup, launching them simultaneously worldwide. While retaining the brand concept of the TrueVIS Series, this move represents an expansion of the ink types accommodated by the TrueVIS Series eco-solvent inkjet printers, which have been well received for their most distinctive feature of overwhelming expressiveness that moves the heart of the viewer in graphic production since the first-generation model was launched in 2016.

Features of AP-640

AP-640 is the Company's first inkjet printer with environmentally-friendlywater-based resin ink. The combination of TrueVIS resin ink and the latest functions makes it possible to optimize color reproduction and graphic impact on paper, fabric, canvas, wallpaper, non-PVC materials, and other media. Using ink that is both environmentally-friendly and safe for human health, it is ideal for applications where peace of mind is of great importance.

Features of LG and MG Series

The LG Series are high-speed printing models that
feature a newly developed print head that pursues
high print quality and productivity, while the MG Series
are dissemination models that offer the same high
print quality with a smaller footprint. Both series are
equipped with a print-and-cut function for
simultaneous printing and cutting.	Launched January 26, 2023

VC Roll-out to growth markets-Launch of new brand, DGXPRESS

For growth markets, in which demand for sign output is booming against the backdrop of significant economic growth and development, we launched a new brand that focuses on excellent productivity and affordable prices. The DGXPRESS brand name reflects our desire to spark the creativity of more customers around the world by providing the best expressiveness (EXPRESSION), which is the greatest value of our printers, with high productivity (EXPRESS). With superior expressiveness and reliability as our strengths, we will stimulate demand in growth markets. As our first offering in the DGXPRESS Series, we launched the UG Series of UV printers, demand for which is growing in the digital printing market.

04

SPECIAL FEATURE

Special feature Initiatives for Transforming the Business Portfolio

Feature of UG Series

The UV printers, featuring broad media compatibility and fast-drying print, now include the high-speed printing model UG-641 and the low investment model UG-642. The UG-641 is ideal for large-format printing in quick-turnarounds or large-volume printing. The UG-642 is an attractive option for printing professionals who want to expand

their business and for new entrants to the printing business.	Launched March 20, 2023

Brand lineup

Ink typeLineup for developed markets Lineup for growth marketsCustomersApplications/deliverables

Eco-solvent				Sign shops	Indoor and outdoor signs
			Banners
VG3 and SG3 Series		Printing shops
		Vehicle wrapping
				Sign shops	Indoor and outdoor signs
UV				Window tinting
			Printing shops
LG and MG Series	UG-642/641	Design prototypes
	Printing/design companies
				Stickers and labels
				Sign shops	Wallpaper
Resin
			Posters
AP-640		Printing companies
		Indoor and outdoor signs

DF Enhancement of VersaSTUDIO lineup of desktop products

VersaSTUDIO is a lineup of desktop products with the concept of making it possible for anyone to do what was previously limited to a handful of professional printers. The main features of this series are its small lot/high-mix production capability, compact size, on-demand printing, ease of use, and high quality. It allows users with no special knowledge or expertise to readily produce high quality, expressive prints and premium items. With the aim of expanding growth areas by responding to the rapidly growing demand in recent years for personalization to meet individual customer needs and the demand for customization to meet niche needs, we also launched a desktop cutter, the GS2-24, and our first direct-to-film printer, the BN-20D.

Features of GS2-24 Desktop Vinyl Cutter

With a maximum cutting force of 500 gf and a maximum cutting speed of 850 mm/second,
this product achieves high productivity and high-quality cutting on a wide range of materials,
from vinyl film for general use to thick cardboard and rubber sheets for sand-blasting. This
versatile product can be used for many different applications, such as indoor and outdoor
advertising and panels, vehicle graphics, office displays, POS marketing tools, and	Launched January 11, 2023
sportswear.

Direct-to-Film (DTF) Printer

Direct-to-Film (DTF) printers use a multistep process to decorate apparel and other fabric items with graphics. First, the graphic, such as an illustration or photograph, is printed directly onto a special transfer film. A hot-melt shaking powder is applied to the ink and melted at a high temperature, and the film is then laid onto the fabric and heat-pressed to transfer the design. The BN-20D is equipped with the same high-precision print head that is also used on large commercial-use printers. As well as enabling excellent color production and

photograph-like image quality, this print head is also able to reproduce small text and thinLaunched January 20, 2023 lines in fine, clean detail. Our aim in offering DTF solutions is to realize highly imaginative,

highly competitive businesses for our customers.

05

SPECIAL FEATURE

Special feature Initiatives for Transforming the Business Portfolio

DF Enhancement of ingenuity to make appealing offers

Launch of EU-1000MF in Europe

EU-1000MF is a large format UV-LED flatbed inkjet printer that can print directly onto a
variety of materials up to 95 mm thick. In addition to sign graphics, this printer is capable of
image production for a large variety of applications, including store and event displays, interior
décor, and small-lot/high-mix custom goods. While sales of this product had been limited to
only certain regions until now, as the need for such a product became more apparent in
Europe, including Eastern Europe, we began to roll it out into that region. We will strive to
expand sales while stimulating new demand and expanding our customers' business.	Launched March 20, 2023

New brand, VersaOBJECT

The VersaOBJECT brand of large format UV-LED flatbed inkjet printers enables businesses to print directly onto 3D objects of almost any material. In the past, sale of these products has been limited to certain regions as a collaborative model with another company, but as demand for printing on 3D objects has become more apparent, we have launched them as a new brand, offering six models of varying print width and table types. Customers can choose the best model to suit their materials, forms, and applications. With VersaOBJECT, we will contribute to the enhancement of our customers' creativity and the

expansion of their business.

Taking orders in Japan from May 2024

We will convey the wonder and excitement of creation

To coincide with the launch of our new products, we exhibited them at exhibitions around the world. I also visited these exhibitions and gave presentations directly to our distributors about the features of the products and our sales strategies. Mingled with my excitement at this rush of new product launches, I was thrilled to witness the strong passion of the people on the frontlines of sales and their expectations toward the Roland DG Group.

We will continue to offer solutions that best suit our customers' businesses and convey the wonder and joy of creation (excitement), and the surprise and inspiration that they generate.

President, Representative Director

Kohei Tanabe

06

NEW PRODUCTS

VC

Released sequentially in various regions from September 2023 onward

The DGXPRESS series focuses on delivering high productivity with aggressive pricing to growth markets that are experiencing remarkable economic growth and vigorous demand for signage. The region-specific series has been expanded with a new eco-solvent model, the ER-642 printer. The ER-642 achieves prodigious productivity due to the adoption of new, larger-size printheads and newly developed high-speed data control technology. We were also able to make the product more cost-effective by adopting our latest printer platform with meticulously standardized parts and by narrowing essential functions. It is our hope to continue to expand our product lineup in the DGXPRESS brand and make deeper inroads into the market.

DF

Released on September 7, 2023

The new BN2 series were added to the VersaSTUDIO range of desktop inkjet printer/cutters, which has sold over 25,000 units since the first- generation model was released in 2012. Equipped with the same printheads and ink technology as our wide-format printers, the new BN2 series increase the printing speed approximately 4 times greater than the previous models. It is available in two models, the CMYK plus White 5-colorBN2-20 and the CMYK 4-colorBN2-20A, and despite their compact size, they are able to produce a wide variety of high value-added items, from original T-shirts to posters, stickers, labels, and unique-shaped displays. The BN2 series will support a wide range of customers, including entrepreneurs, companies enhancing services in their businesses or bringing out-sourced production in-house, and educational institutions committed to STEAM education practices.

SSO

Announced on December 12, 2023

To address the challenges faced by manufacturing sites today, such as labor shortages, human error, lack of progress in task standardization, and the inability to share between departments, we announced Roland DG Assemble, a cloud service that leverages the expertise in the Digital Yatai system cultivated at our own production sites. The new service, which leverages data and incorporates IoT, supports both workers and administrators and contributes to factory value improvement. We will launch the service in Japan before providing it to the rest of the world in the future, with the aim to provide solutions for connecting production sites in remote overseas locations.

07

TOPICS

Topic 1 Personnel system reform

Based on our medium-term business plan's core strategy of transforming into a lean organization, we have been engaging in workstyle reform, with the aim of becoming a company in which every employee can demonstrate their ability to the full and work energetically. Against the backdrop of a falling birth rate and aging society and an increased willingness of older people to keep working, we have decided to extend our mandatory retirement age from 60 to 65 from January 2024. We have also set 60 years as the age of mandatory retirement from managerial positions, while keeping those employees' salaries at the same level as when they reached 60 years of age. With these reforms, we will create an environment that allows our veteran employees aged 60 years and older who want to keep working to fully demonstrate their knowledge and expertise and pass them on to the next generation, while staying motivated themselves. In this way, we will strive to achieve sustainable corporate growth.

Topic 2 New building at Thailand factory commences operations

A new production building that had been under construction within the premises of the Thai factory owned by Roland Digital Group (Thailand) Ltd., Roland DG's Thai subsidiary, has been completed, and operations commenced on April 3, 2023.

The Thai factory, Roland DG's first overseas factory, began mass-production in October 2012 and was officially opened in January 2013. The factory's floor space was expanded in 2014 and again in 2021. In 2022, Japan's mass production functions were consolidated at the Thai factory as part of efforts to improve production efficiency and enhance price competitiveness under the basic policy set forth in the medium-term business plan. The new building will be responsible for the production of dental milling machines and digital fabrication products, which are expected to experience a further increase in demand in the future. The Roland DG Group will continue its efforts to respond flexibly to growing demand and to deliver a stable supply of high-quality products by pursuing high levels of Quality, Cost, and Delivery (QCD). In doing so, we will aim to become the preferred choice of our customers.

See the Company's blog for more details

Commemorative ceremony

08