TOMY Company, Ltd. (For the year ended March 31, 2020) Annual Report TOMY Company, Ltd. 7-9-10 Tateishi, Katsushika-ku, Tokyo 124-8511, Japan www.takaratomy.co.jp/english/ 2020 Contents The TOMY Group History, Corporate Value and Vision chapter 1 1 Where We Came From and Where We Are 2 The TOMY Group Philosophies 4 The TOMY Group Values chapter 6 TOMY Group Business and Value Creation Process 8 Performance Highlights 9 Review of Fiscal 2019 (the fiscal year ended March 31, 2020) The TOMY Group History, TOMY Group Growth Strategy chapter 2 12 Our aims and the management we have adopted to achieve them Corporate Value and Vision 13 Message from the President Special Feature chapter 3 19 Our mission is to fulfill the dreams of all our stakeholders 20 TOMICA’s 50th Anniversary: The Famous Cars That Have Supported TOMICA Where We Came From and 22 Support for Long-Selling TOMICA Products Driven by Our Long-Maintained Commitment 24 The Story Behind the Development of TOMICA, a Long-Adored Brand Where We Are TOMY Group’s ESG chapter 4 26 How will we achieve sustainability? 27 Message from the Chairman TOMY’s Founding Philosophy has been inherited within the group companies since 28 Relationship between ESG and CSR Eiichiro Tomiyama created Tomiyama Toy Seisakusho, the predecessor to TOMY, in 32 ESG Initiatives (Social) 1924. Ever since, the TOMY Group has continued to create new play value while aiming 37 ESG Initiatives (Environment) to fulfill the dreams of children and all others. In this section, we introduce the history, Outside Directors Interview 40 philosophies and vision of the TOMY Group, which has led the Japanese toy industry 42 ESG Initiatives (Governance) 50 Management for nearly a century, while describing its current business domain and value creation processes. chapter 5 53 Data Section 54 Six-Year Financial and Non-Financial Summary 56 Product History 60 Our Products 66 Corporate Information/Stock Information 1 Annual Report 2020 Editorial Policy The TOMY Group publishes annual reports summarizing our overall business, including our history and product lines, performance results and management strategies, and CSR and corporate governance initiatives targeting sustainable growth with the aim of providing our stakeholders with a deeper understanding of the Group‘s medium- to long-term value creation. This edition of the annual report includes a message from the president providing an easily understandable commentary on the issues of the Medium-Term Management Plan concerning the impact of the novel coronavirus pandemic on the toy market as well as associated future changes. In addition, the special feature covers the 50th anniversary of the sales launch of the TOMICA brand of die-cast Japanese miniature cars, explaining why these products are so loved and trusted by customers while focusing on inherited preconditions and qualifications that the TOMICA brand requires for each product, from planning to manufacturing. Through these features, we hope readers gain a clear understanding of future developments of the TOMY Group. Please visit our website for more details. www.takaratomy.co.jp/english Disclaimer This report contains forward-looking statements including prospects, targets, plans and strategies. These are based on judgment and assumption from the currently available information and do not guarantee or warrant any financial estimates or business development. © TOMY Contents The TOMY Group History, Corporate Value and Vision chapter 1 1 Where We Came From and Where We Are 2 The TOMY Group Philosophies 4 The TOMY Group Values chapter 6 TOMY Group Business and Value Creation Process 8 Performance Highlights 9 Review of Fiscal 2019 (the fiscal year ended March 31, 2020) The TOMY Group History, TOMY Group Growth Strategy chapter 2 12 Our aims and the management we have adopted to achieve them Corporate Value and Vision 13 Message from the President Special Feature chapter 3 19 Our mission is to fulfill the dreams of all our stakeholders 20 TOMICA’s 50th Anniversary: The Famous Cars That Have Supported TOMICA Where We Came From and 22 Support for Long-Selling TOMICA Products Driven by Our Long-Maintained Commitment 24 The Story Behind the Development of TOMICA, a Long-Adored Brand Where We Are TOMY Group’s ESG chapter 4 26 How will we achieve sustainability? 27 Message from the Chairman TOMY’s Founding Philosophy has been inherited within the group companies since 28 Relationship between ESG and CSR Eiichiro Tomiyama created Tomiyama Toy Seisakusho, the predecessor to TOMY, in 32 ESG Initiatives (Social) 1924. Ever since, the TOMY Group has continued to create new play value while aiming 37 ESG Initiatives (Environment) to fulfill the dreams of children and all others. In this section, we introduce the history, Outside Directors Interview 40 philosophies and vision of the TOMY Group, which has led the Japanese toy industry 42 ESG Initiatives (Governance) 50 Management for nearly a century, while describing its current business domain and value creation processes. chapter 5 53 Data Section 54 Six-Year Financial and Non-Financial Summary 56 Product History 60 Our Products 66 Corporate Information/Stock Information 1 Annual Report 2020 Editorial Policy The TOMY Group publishes annual reports summarizing our overall business, including our history and product lines, performance results and management strategies, and CSR and corporate governance initiatives targeting sustainable growth with the aim of providing our stakeholders with a deeper understanding of the Group‘s medium- to long-term value creation. This edition of the annual report includes a message from the president providing an easily understandable commentary on the issues of the Medium-Term Management Plan concerning the impact of the novel coronavirus pandemic on the toy market as well as associated future changes. In addition, the special feature covers the 50th anniversary of the sales launch of the TOMICA brand of die-cast Japanese miniature cars, explaining why these products are so loved and trusted by customers while focusing on inherited preconditions and qualifications that the TOMICA brand requires for each product, from planning to manufacturing. Through these features, we hope readers gain a clear understanding of future developments of the TOMY Group. Please visit our website for more details. www.takaratomy.co.jp/english Disclaimer This report contains forward-looking statements including prospects, targets, plans and strategies. These are based on judgment and assumption from the currently available information and do not guarantee or warrant any financial estimates or business development. © TOMY 1 The TOMY Group Philosophies Our Founding Philosophy is a fundamental and permanent component of the TOMY Group that has served us well. FOUNDING PHILOSOPHY Let’s excite the world’s markets with our outstanding products. FOUNDING Our sincerity and diligence PHILOSOPHY will contribute to society and lead to our own success and CORPORATE MISSION happiness. CORPORATE GUIDELINES Our Corporate Mission is CORPORATE an enduring ideal toward CODE OF CONDUCT MISSION which the Group strives. Our mission is to fulfill the dreams Eiichiro Tomiyama founded TOMY with the goal of “creating truly excellent of our stakeholders, including quality products with play value for children with infinite possibilities The dreams of children for the future.” Our Founding Philosophy, which expresses this toy The dreams of our employees The dreams of our shareholders manufacturing doctrine, has been inherited as the foundation of our The dreams of our business partners Company. Along with this philosophy, TOMY’s Corporate Mission is The dreams of society ceaselessly implemented on a Group-wide basis. TOMY’s history is defined by business development grounded in these philosophies, and its values We will create are evident throughout this history. new value from play. 2 TOMY Company, Ltd. Annual Report 2020 Our Founding Philosophy is a fundamental and permanent component of the TOMY Group that has served us well. FOUNDING PHILOSOPHY Let’s excite the world’s markets with our outstanding products. FOUNDING Our sincerity and diligence PHILOSOPHY will contribute to society and lead to our own success and CORPORATE MISSION happiness. CORPORATE GUIDELINES Our Corporate Mission is CORPORATE an enduring ideal toward CODE OF CONDUCT MISSION which the Group strives. Our mission is to fulfill the dreams Eiichiro Tomiyama founded TOMY with the goal of “creating truly excellent of our stakeholders, including quality products with play value for children with infinite possibilities The dreams of children for the future.” Our Founding Philosophy, which expresses this toy The dreams of our employees The dreams of our shareholders manufacturing doctrine, has been inherited as the foundation of our The dreams of our business partners Company. Along with this philosophy, TOMY’s Corporate Mission is The dreams of society ceaselessly implemented on a Group-wide basis. TOMY’s history is defined by business development grounded in these philosophies, and its values We will create are evident throughout this history. new value from play. 3 The TOMY Group Values Passion for Toy Manufacturing Do You Like Toys? Once, there was a young boy who was fascinated by a beautiful German toy he saw in a foreign magazine while working as an apprentice. At the young age of 11, he decided that he wanted to become a toy manufacturer who would, with his own hands, someday create magnificent toys that would enthrall children throughout the world. The young boy’s peers were surprised and astonished by this dream, dismissing and ridiculing it as outrageous. The young boy disregarded this opposition and began pursuing his dream. His name was Eiichiro Tomiyama, and at the age of 21, he established Tomiyama Toy Seisakusho, the predecessor to today’s TOMY. Good ideas and designs arise from love for toys. Our love for toys is the primary source of our strength. Tomiyama believed that the mission of toy specialists is to produce new and unprecedented creations and contribute to society.