1. Turn the Sum of Individual Growth into Growth for PHC Group

At the foundation of our HR strategy is a simple conviction: that the sum of the growth of each individual becomes the growth of the Group. Each employee at PHC Group has the opportunity to learn, take on challenges, and produce results. I believe that the accumulation of these efforts translates into the competitiveness of our business, creates value for customers, and ultimately leads to the sustainable growth of PHC Group.

Overview of PHC Group’s Human Resource StrategiesPremise: Synchronization of management and HR strategies

For this reason, we seek to nurture our people as the drivers of value creation, rather than viewing personnel management as a cost. This approach is the basis of our HR initiatives. The value we provide to customers, society, and shareholders can only be sustained when employees are able to grow, feel fulfilled in their work, and fully apply their abilities. Our HR strategy is not simply a support function for management strategy; it plays a central role in the creation of corporate value. We therefore seek to synchronize our human capital strategy with our management strategy and consider the direction of our business together with the development of both our people and our organization in an integrated manner.

PHC Group has a wide range of talented employees, including engineers in our pathology business, researchers in our life sciences businesses, managers who oversee regional and global teams, colleagues who transitioned from other industries, and recent graduates with a strong drive to grow. It is our responsibility to enable each individual to achieve their maximum growth potential within PHC Group. We are committed to ensuring that our employees are properly guided, fairly evaluated, and provided an environment in which they can feel a sense of fulfillment, so they can unlock their potential and turn their contributions into a force that can drive the business.

By addressing this challenge, identifying the talent requirements and resources that are still lacking, and creating an environment that connects each employee's growth to the growth of the Group, I believe I can fulfill my responsibility as CHRO.

2. Identifying Human Resource Needs for the Next Stage of Growth

PHC Group is currently addressing three priority measures to achieve the Value Creation Plan 2027: structural reforms to strengthen the profit base, improving portfolio management, and increasing focus on Diagnostics & Life Sciences. Ultimately, it is our people who will drive these initiatives. No matter how precisely a management strategy is described, it requires highly skilled people and organizational execution abilities to produce results.

To achieve the Value Creation Plan 2027 and future growth, we need specialists who will create new value in the Diagnostics & Life Sciences domain, personnel who can transform business and operations by leveraging IT and AI, and talent with management and leadership experience who can lead organizations in the midst of change.

To do this, we must build our capacity for specialized skills through training, recruiting, and M&A. I especially believe we must leverage the human resources, assets, and technologies that we already have to create the next stage of growth. What experience can employees build within PHC Group, what capabilities can they develop, and what challenges can they turn their attention to? Making these possibilities visible across the Group and linking them to human resource requirements in growth areas is an important role of our human capital strategy.

As a global collection of healthcare companies, what new products can PHC Group create by applying the technologies that we have already developed? How can we become more useful to society through new products? What value can we deliver to patients, providers, and researchers? We need to deepen these types of discussions.

Group growth is not something that should be left to a select few. It is the sum of each individual's growth and a Group-wide effort that requires the full commitment of the entire organization. I believe that developing the mindset that everything starts with human resources will lead to us achieving the Value Creation Plan 2027 and to sustainable growth in the future.

3. Combining a Supportive Work Environment with a Sense of Fulfillment to Build a Highly Engaged Organization

In implementing our human capital strategy, we place great importance on both transparency and a sense of fulfillment for our employees. Ultimately, we seek to build an organization where employees have the high-level capabilities to excel anywhere, but choose to work at PHC Group because they feel a sense of pride and fulfillment working here. To achieve this goal, we must continuously create opportunities and develop an environment that will lead to employees’ personal growth.

Transparency at work is a foundation that enables employees to build and demonstrate their abilities with peace of mind. A working environment with fair evaluations and freedom to express opinions with confidence allows employees to grow. However, transparency by itself is not sufficient. A sense of fulfillment also requires an environment that supports flexible ways of working and work that enables employees to take on challenges and feel that they are truly growing and personally contributing to the growth of the company. I hope that through the combination of this kind of transparency and a sense of fulfillment, we can drive high levels of employee engagement.

To measure our progress each year, PHC Group conducts an annual employee engagement survey. This survey is an important mirror that reflects the status of the organization from the perspective of employees. In fiscal year 2025, the survey included 10,793 employees and contractors, and the response rate was 87%. Our engagement score in fiscal year 2025 was 68 out of 100, an improvement of one point from the previous year. In fiscal year 2025, we expanded the survey scope to include LSI Medience and Mediford, increasing the number of participants by 47% from the previous year. Our engagement score under the previous scope was 68 out of 100, an improvement of one point from the previous year, while the score under the expanded scope was 64 out of 100.

One topic where I am paying particular attention is the trend regarding “trust in supervisors.” This is a topic where our score has continuously improved, from 67 in fiscal year 2022 to 78 in fiscal year 2025. I believe that this is one of the results of our efforts to improve manager skills through Group leadership training and other programs. Trust between employees and their supervisors is essential for an organization to succeed during periods of change such as structural reforms.

Our engagement survey has also revealed that there is further room for improvement with respect to freedom of expression, career paths, and taking action as a result of the survey. In particular, our employees seek confirmation that the company is taking action in response to employee feedback. This is one reason why we prioritize monthly CEO town halls and regular roundtable discussions, which in total are held about 90 times each year. These forums serve to convey management thinking directly to employees while also inviting employee opinions and taking action based on those opinions.

I believe that an attitude of examining the survey results with earnestness, listening closely to employee opinions, and using this dialogue to make improvements in the working environment will lead to sustained employee engagement.

4. Three Pillars Supporting Human Resource Growth

To achieve this vision of the future, we are implementing our human resource strategy centered on three areas: (1) recruitment, (2) talent development, and (3) compensation and benefits.

(1) Recruitment: Leveraging PHC Group’s Impact to Become an Employer of Choice

When it comes to recruiting, I am keenly aware that it is not sufficient for a company to choose its people. We should instead be asking, what criteria do people use when selecting a company? What do they look for, and what do they expect? Unless we think carefully about these questions, we will not become an employer of choice for outstanding talent.

I believe that there are three main factors when a candidate selects a company. First, whether they can envision their own growth by working for the company. Second, whether they feel that the company is useful and necessary to society. And third, whether the company has created an environment where one can demonstrate their abilities. In our recruiting activities, we emphasize not just the conditions of employment but the significance of working for PHC Group and the growth opportunities that employees can expect here.

PHC Group received Gold Awards in two categories of the ONE CAREER Job Hunting Review Awards 2026: the "Science and Engineering Students' Choice" Special Category and the "Kanto Region Ranking" Regional Category. The awards are presented by ONE CAREER Inc., a company that provides job-hunting and recruitment support services in Japan. Being selected from among approximately 50,000 Japanese companies is an indication that students are talking about the appeal of PHC Group. Even so, this is just one milestone. While we appreciate signs that we are an employer of choice, I believe there is still much to improve upon.

For instance, to recruit recent graduates in Japan, we are forming connections with students through initiatives such as guest lectures at universities in the Shikoku region, where our Matsuyama Factory (one of the Group’s main manufacturing sites) is located, as well as local recruiting activities. In fiscal year 2025, we launched an alumni platform called “PHC Career Connect,” creating a channel for past employees to learn about our ongoing impact and opportunities to return to PHC Group.

New graduates recruitment record^*

* PHC Corporation and Wemex Corporation Track Record

Recruiting is an entry point. Long-term, we seek to create an environment where employees experience a sense of growth and plan to grow their careers here. Based on this, in fiscal year 2025 we launched a training initiative called the New Career Growth Program for employees in their first to fifth years after joining PHC Group, in order to strengthen retention among newer employees. Specifically, we have prioritized employee retention between three to five years of tenure and are implementing measures that combine trainer training with input to management-level personnel.

(2) Human Resource Development: Fostering the Next Generation of Management Today

One of our top priority human resources initiatives is PHC Academy, a global training and enrichment program aimed at developing the next generation of management in two tiers: senior management (potential successor candidates), and the next generation. PHC Academy is designed to help participants build functional knowledge in areas such as strategy, finance, digital transformation, and marketing, as well as real-world learning, including English training and group educational opportunities in locations such as Australia and Singapore.

PHC Group leaders must be able to make sound business decisions for today as well as imagine the kind of value they can create 10 or 20 years in the future. What type of impact may be possible if we think beyond existing frameworks? Through PHC Academy, we offer our future leaders not just the type of knowledge that could be gained by obtaining an MBA, but also liberal arts topics, participation in learning and awareness-raising events, dialogue with outside experts, and visits to other companies. Through PHC Academy, we seek to cultivate a balance of logical business thinking and broad social and cultural perspective.

We are also continuing PHC Group Leadership Training for managers in Japan. In fiscal year 2025, 549 managers participated in training with the objective of gaining the management skills to motivate and increase the efficacy of their direct reports. Behavioral changes among managers are extremely important for raising engagement throughout an organization. In addition, we have created a learning ecosystem for all employees that combines Udemy Business, language learning, and specialized training. We believe that creating a culture of self-initiated continuous learning leads to the growth of the organization as a whole.

(3) Compensation and Benefits: Building a Structure That Rewards Meaningful Contribution

At PHC Group, we consider compensation and benefits to be an important element in being an employer of choice. We have adopted a grade system based on the roles and responsibilities of each individual position, not just on seniority. Employees may in certain instances change job categories by taking on new challenges, and have an opportunity to increase their compensation by assuming greater roles. We seek to create systems that link individual growth to compensation to encourage employees to take on new challenges.

In fiscal year 2026, we increased the upper limit of the compensation range for managers at PHC Holdings Corporation based on benchmarking of other companies. This does not mean that everyone's compensation immediately increased. However, establishing a framework that enables us to offer market-competitive compensation to outstanding talent is a necessary condition for remaining an employer of choice. We have also created mechanisms that enable employees to align PHC Group’s growth with their own growth and achievements, including an Employee Stock Purchase Program (ESPP) and a long-term incentive (LTI) plan for eligible employees, which includes in certain instances both restricted stock units (RSUs), a type of post-delivery stock compensation, and performance share units (PSUs), which are performance-based stock compensation.

Regarding work transparency, we have also taken action to improve working conditions at our office environments. At our Tokyo headquarters, we have shifted to non-assigned seating and developed an office environment that facilitates spontaneous communication among departments. Additionally, Ascensia hosts an annual Global Learning Day for all PHC Group employees. This is a group-wide peer learning opportunity in which members of our group serve as instructors, offering more than 40 sessions annually to promote understanding of PHC Group's business and products and to enhance leadership and digital skills.

In addition, Ascensia's Poland site was ranked 14th in the medium-sized companies category in the "Best Workplaces™ Poland 2026" list in 2026, an annual recognition by Great Place to Work^®, a global organization that certifies companies with outstanding workplace cultures. Of the approximately 200 companies evaluated, only the top 25 highest-ranking companies receive this certification.

In this way, we believe that fostering a culture in which each individual continues to learn autonomously not only drives the growth of the organization as a whole, but also enhances employee well-being, job satisfaction, and engagement.

5. Supporting Human Resource Growth Using Data and Dialogue

HR information systems (HRIS) & People Analytics are the foundation that supports our three human capital pillars of recruitment, human resource development, and compensation and benefits. At PHC Group, we have introduced a global HR platform (Workday) and are progressively rolling it out across our subsidiaries. It serves as a common platform across the Group, supporting employees throughout their journey from onboarding to separation.

Across PHC Group, we are pursuing HR management that relies not just on experience and intuition but on data and dialogue. By visualizing employees’ skills, experience, and career aspirations, we will be able to have a common language for considering placement, development, and career formation.

People are much more than data. We seek to use data not to judge but to deepen dialogue between employees and supervisors, and to provide appropriate growth opportunities. By employing HRIS & People Analytics, we seek to increase transparency and fairness in HR and create a platform that can support the growth of each individual.

The ability to see a clear career path is an important issue for remaining an employer of choice. As PHC Group has acquired some of our businesses through M&A, we are always aware of the risk of individual businesses becoming siloed or fragmented. We seek to enable employees to communicate and interact, not just within the business where they work but also in other Group businesses globally. Sharing employees’ skills, experience, and career aspirations and linking them to growth opportunities within the Group will be an important foundation for achieving growth.

6. Transforming Worldwide Diversity and Discipline into Forces for Value Creation

PHC Group currently conducts business in more than 125 countries and regions. This reach reflects a wide range of worldwide diversity within our organization in terms of businesses, regions, cultures, areas of expertise, and careers.

Worldwide diversity can be a source of innovation. Challenges discussed by people with different backgrounds, ifferent experiences, and different ways of thinking may lead to new ideas and new solutions. When leaders with different areas of expertise and values collaborate and bring their perspectives together, new products, services, and markets emerge. As a global collection of healthcare companies, PHC Group has delivered value to customers around the world through our high-quality and precision manufacturing. In order to consistently produce high-quality products, a shared attitude and set of values regarding quality and discipline are essential. PHC Group’s highly standardized and uniformly high-level manufacturing is a strength that derives from commitment and discipline.

An effective approach to human resources brings together a wide range of experiences and areas of expertise. At the same time, our people share a commitment to quality and dedication to providing value for customers, patients, and researchers. I believe that when we balance worldwide diversity and discipline, we create value distinctive to PHC Group.

It is our responsibility to develop an environment where motivated and talented human resources can grow regardless of background, country of origin, age, or gender.

7. Transforming Individual Growth into Our Collective Strength

My role as Chief Human Resources Officer is to ensure that PHC Group’s human capital strategy is incorporated into concrete HR measures and our organizational culture. Through recruitment, talent development, compensation and benefits, HRIS and people analytics, and engagement improvement, we will create an organization where employees feel pride and fulfillment and which they view as an employer of choice. To achieve this, we must continuously create working environments and opportunities that make employees feel that working for PHC Group leads to personal growth. We must also create mechanisms that connect individual effort to results and that link a willingness to take on challenges to future opportunities. Furthermore, it means creating the kind of growth opportunities that employees are looking for. I believe that the accumulation of these efforts will instill pride and affinity for PHC Group and build long-term trust between employees and the Group.

Companies have responsibilities to various stakeholders including customers, shareholders, and local communities. As CHRO, I believe that employees are the most important stakeholders.

If every person working for PHC Group feels a sense of fulfillment and is able to thrive, we will be able to deliver high-quality products and services and contribute to society in a sustainable way.

It is precisely for this reason that I believe that PHC Group employees should be able to pursue the path of their choosing, whether that means section manager or executive. Our employees can seek to work in a different department or seek a position that will shape the future of the company. What is important is for each employee to consider what kind of value they seek to create, and then have available opportunities to achieve it. I want PHC Group to be a place that supports employees when they take on new challenges, and that recognizes and commends employees when they try something new.

When employees choose to tackle new challenges, they open the door to company growth.

PHC Group is implementing structural reforms as we prepare for our next stage of growth. I am confident that our employees have the strength to navigate this change. Our ability to leverage their experiences, curiosity about new technologies, desire to contribute to society and healthcare, and the motivation for career development is precisely the greatest strengths of our human capital strategy.

The collective growth of all individual employees becomes the growth of PHC Group. I believe that this mindset is critical for our organizational culture. Linking each individual’s growth and challenges to PHC Group’s next stage of growth is my responsibility as CHRO, and that is what I will strive to achieve through our human capital strategy.