Itoham Yonekyu Holdings Inc.

Medium-term Management Plan 2023

May 10, 2021

1

Contents

1

Review of Medium-term Management Plan 2020
Financial indexes, specific plans

2

Group Philosophy and Vision
Group philosophy, vision, founding spirit, action guidelines

3

Medium-term Management Plan 2023
(i)

Points to focus on in response to changes in environment(ii) Challenges(iii) Priorities
I. Strengthening management base

Ⅲ. Initiatives for new businesses and markets

II. Strengthening earnings baseⅣ. Initiatives for sustainability(iv) Financial strategies and numerical targets

1

Review of Medium-term Management Plan 2020

1. Review of Medium-term Management Plan 2020
Financialindexes3

 Ordinary income was 3.0 billion yen less than the plan, but the ordinary income rate
exceeded the plan by 0.2 percentage point. The FCF target was achieved.
billion yen

FY2020FY2015 results FY2020 results CAGR
Medium-Term Difference(*1)
Management Plan
Net sales

817.4

842.6

1%

1,000.0-157.4

Ordinary Income

18.2

27.0

8%

30.0

-3.0

Ordinary income rate

2.2%

3.2%

-

3.0%

+0.2

Ordinary Income
35
30
25
20
15
10
5
0

30.0
26.0

24.9

(*1)

(Itoham)

27.0

24.4

18.2

2015

ROE

(billion yen)

15.7

2016

2017

2018

Medium-Term Plan 2020

6.2%
(*2)

7.2%

-

8.0%

-0.8

(Yonekyu) 11.2%

FCF

19.5

2019

2020

Results(billion yen)

40.0
30.0

Total assets
Shareholders'equity

360.9

394.0

2%

427.0

-33.0
20.0

30.0

191.8

239.9

5%

254.8

-14.9

D/E ratio

-

0.15

-

0.20

-0.05

0.0

FCF

-

30.0

-

13.9

+16.1

-10.0

10.0

12.4
0.0

2015
*1) FY2015 results are a simple aggregation of results at Itoham and Yonekyu.
*2) Insurance claim income in extraordinary income is excluded.

13.9

24.0

2016

(2.7)

(4.8)

2017

2018

Medium-Term Plan 2020

2019

2020

Results

1. Review of Medium-term Management Plan 2020
Specific plans

 Net sales and operating cash flow fell short of plan but organizational change madesteady progress.

Subject
Processed food sales
Fiscal 2020

4

Results

Review

Processed food sales

Ham & sausage: ¥177.6 billion
Processed food: ¥148.0 billion(Plan: ¥200.0 billion in each)

Ham & sausage rose slightly.
Processed food, particularly
pizza, grew.

400

Strengthening
domestic meatproduction business
Fiscal 2020

Group production business: 32%
Group slaughtering and cut: 59%
Brand meat sales: 17％

Grew 10 pp from FY2015.
Grew 9 pp from FY2015.
Grew 2 pp from FY2015.

200

Operating cash flow
(5-year total)¥114.5 billion(Plan: ¥123.0 billion)¥8.5 billion less than plan

Ratio of overseas
operations inordinary income
Fiscal 2020

16.8%
(Plan: 13.5％)

Income grew at ITOHAMAMERICA and ANZCO.

Payout ratio(Average in 5 years)

36%(Plan: Around 30%)(billion yen)
400.0

300

100

114.4

121.9

128.5

132.9

148.0

172.9

175.3

173.2

176.6

177.6

2016

2017

2018

2019

2020

0

Medium-Term Plan 2020
Ham & sausage

Processed foodPayout ratio
Paid stable dividends
continually.

(%)

50
40
30

30
Organizational change• Consolidation of the administrative divisions of thehead offices of Itoham and Yonekyu into Holdings• Assigning officers to the meat, production and R&D
divisions• Changing the logistics division to an organ directly
managed by Holdings

Reorganizing the administrative andoperating divisions and building anorganizational structure to achieve
overall optimization in the Group, tochange the system to one for businessexecution at each strategic unit

47

20
10

28

32

2017

2018

44
30

0
2019

Medium-Term Plan 2020

2020

2021

Results

2

Group Philosophy and Vision

2. Group Philosophy and Vision

6

Group philosophy

We will contribute to achieving a sound and affluent society through business.

VisionA leading food company that emphasizes the spirit of fairness, rises to the challenge oftransformation and achieves sustainable growth with its employees

Founding
spiritSpirit that underlies the Group philosophy and vision

Contribute to society
through business

Create excitement

2. Group Philosophy and Vision
Actionguidelines(i)

Pursue safety and reliability and quality and provide valuable products and services.

(ii) Be sure to do what you say you are going to do and build and strengthen trust.

(iii) Develop capacity and cultivate human resources through full participation, openminded communication and mutual understanding.
(iv) Prioritize compliance. Fair and transparent action.

(v) Promote environmentally friendly business activities.

Guideline to bear in mind during the period of Medium-Term Management Plan 2023

Achieve further rapid growth by defying stereotypes and reaffirming our strengths.

7

3

Medium-term Management Plan 2023

3. Medium-term Plan 2023

(i) Points to focus on in response to changes
in environment

9

Responding to continuing trends
 Meat consumption is increasing amid economic growth worldwide, particularly in Asia. Safety and reliability
and higher levels of products and services are required in Japan with changes in the business environment. In
this environment, opportunities to take advantage of the Group's procurement, development, production andsales functions are increasing.
Changes inenvironment and needs

Business opportunities

Focus

Growth in the world economy
and a shift to meat as a source ofproteinWorldwide increase in meat
consumption

 Farm management by the Group Procurement systems and the ability to supply products
in Japan and overseas

Rising awareness of safety andreliability

Reliability of companies,
products and services

 Quality control system
 Relationships of trust with domestic and overseas
suppliers and partners

Increasing single personhouseholds and double-income
households

Simple meals, meals for
consumption by individuals
Expanding needs for readymade meals

 Function of developing products directly linked toconsumer needs
 Product lineup

Affinity with peripheral areas
Growth in overseas markets

 New businesses, including frozen food, non-meat andextract
 Production and sales in new markets, particularlymarkets in Asia

Peaking in the domestic market
due to the decrease in populationand declining birthrate and aging
population

3. Medium-term Plan 2023

(i) Points to focus on in response to changes
in environment

10

Response to new trends
 Consumer needs are rapidly changing and diversifying due to COVID-19, digitization and rising interest in
ESG and SDGs, among other factors, and opportunities to display the Group's strengths are increasing.

Changes inenvironment and needs

Business opportunities

Focus

Changes in purchasing
behavior due to COVID-19

Household consumption, preference forstorage
Delivery
Ordering products

 Consumer product brands
 Lineup of frozen products and room-temperature
products
 Ability to propose products to customers

Accelerating digitization insociety

Online shopping
Penetration of RPA tools

 Corporate branding Ability to make proposals directly to consumers
 Using digital technology in business

ESG and SDGs as new
buying motives

Increasing demand for new protein
sources
Ethical consumption

 Product development capability
 Lineup of non-meat products Taking SDGs initiatives as a company

3. Medium-term Plan 2023(ii) Challenges

11 We need to solidify the management base and revenue base after the integration and increase
competitiveness.
 We need to strengthen growth potential by responding to new market needs and social andenvironmental values.
Challenge we are taking on after integration

I.

Strengthening management base

Ⅱ. Strengthening earnings base

Vision to achieve during period of Medium-termManagement Plan
☞P12

Maximizing performance and potential☞P13

Maximizing Group value

Ⅲ. Initiatives for new businesses and markets ☞P14
Ⅳ. Initiatives for sustainability

Developing☞P15

Establishing new core revenue sources

Fulfilling corporate social responsibility
through business

policy on priorities

for each subject

3. Medium-term Plan 2023(iii) Priorities

I. Strengthening management base

12

Maximizing performance and potential

 We will build an efficient and competitive business execution system and organizational structure to
maximize the effect of the integration.
Integrating strategies in the Group through reorganization✔ A shift from company-based units to strategic units✔ Flat organizational structure

ItohamProcessed
food

Meat

Processed
food

Yonekyu
Processed
food

Meat

Meat

* The brands of Itoham and
Yonekyu will continue to exist.

• An officer will be assigned to supervise the processedfood business in FY2021. The processed food businesswill integrate strategic functions. The meat business is
integrating functions ahead of the processed foodbusiness.
• In FY2021, the meat procurement functions will be
integrated. In FY2022, the processed food production
functions will be integrated.

Integration of systems
 Integrating internal rules and systems
 Revitalizing human resources• Integrating personnel regulations and accounting
regulations• Flexible personnel utilization, including hiring midcareer employees• Appropriate staffing in the Group

Digital strategy
 Enhancement of internal systems
 IT strategies
 DX (digital transformation)• Implementing the planned consolidation of systems• Establishing an IT management office• Changing business processes through digitaltransformation

(iii) Priorities

3. Medium-term Plan 2023
Ⅱ. Strengthening earnings base

13

Maximizing Group value

 We will enhance cost competitiveness and the value of products and services to increase the Group's
market competitiveness.
Initiatives for cutting cost
 Optimizing the production and logistics systems
 Increasing efficiency in purchasing operations
 Using digital technology

Enhancement of added value Raising the level of marketing and brands
 Enhancing development functions, manufacturing
technology and selling skills
 Reflecting research and development in business

Scale expansion
 Domestic sale
 Processed food Brand meat and unheated meat products• Production) Reorganizing facilities and increasing the use ofhigh-efficiency lines• Logistics) Promoting delivery directly from production
areas, increasing efficiency in delivery• Procurement) Unifying operations• Saving labor using RPA, living body control using image
recognition• Sorting out, developing and enhancing brand concepts• Recognizing and sharing knowledge within the Group by
making expertise and intellectual property visible• Actively using the Central Research Institute• A meticulous meat sales system focusing on major urban
areas (expanding the meat wholesale function)• Utilizing the Group's nationwide sales network• Expanding the product lineup☞P.18 Reference material (i)3. Medium-term Plan 2023(iii) Priorities

Ⅲ. Initiatives for new businesses and markets

14

Establishing new core revenue sources We will redistribute management resources, including human resources and funds, to fields that are
expected to grow to increase the Group's growth.
Expansion of business fields
 Non-meat business Frozen food business Extract business Research on new protein sources• Building a system to comprehensively promote the nonmeat and frozen food businesses• Expanding the non-meat business using meat processing
technology and an early starter's advantage and making a
profit in the business early• Establishing Kyushu Extract Limited• Bringing in cutting-edge technology related to meat

Expansion of production areas and sales markets
 Strengthening of the overseas business Expanding synergies between business sites
 Cultivating human resources overseas• Strengthening the existing overseas operations and deeper
penetration into the markets(NZ）ANZCO(U.S.) ITOHAM AMERICA, IPC(China) Itoham Foods Trading (Shanghai)(Thailand) Itoham Betagro Foods, ABC• Using ANZCO’s sales channels in overseas markets• Expanding exports of Japanese beef
• Cultivating human resources by dispatching them to thesites above☞P.19 Reference material (ii)

3. Medium-term Plan 2023(iii) Priorities

Ⅳ. Initiatives for sustainability

Fulfilling corporate social responsibility through business15

 We will fulfill our responsibility as a member of society through initiatives that meet social andenvironmental values to enhance the Group's value and achieve sustainable growth.
Strengthening the system to implement initiatives
Establishment of a Sustainability Committee• Formulating basic policies and plans, identifying important
issues, setting KPIs, monitoring progressSocial contribution activity, improving the working
environment
 Contributing to local communities
 Promoting a healthy work-life balance Developing human resources and respecting
diversity
 Industrial safety and health, health management• Job creation, forest conservation activities, community
cleanup• Vibrant work environment• Systematic human resources development and the use of awide range of human resources• Human resources strategies in response to changes in ways
of working and diversity

Environmentally friendly initiatives
 Reduction of the consumption of energy and water Reduction of CO2 emissions
 Reduction of waste Sustainable use of biological resources• Introducing equipment having high energy conversion
efficiency, reusing used water• Using renewable energy, including solar energy• Reducing food waste and waste plastic, promoting recycling• Managing farms, considering animal welfare• Recycling-oriented agriculture model☞PP. 20 and 21 Reference material (iii) and (iv)

3. Medium-term Plan 2023(iv) Financial strategies and numerical targets

16

 We will increase competitive and added value in business to increase return on invested capital (ROIC).
 We will implement shareholder return policies in consideration of financial soundness and capital efficiency tomaximize shareholder value.
billion yen
FY2020 results
OperatingincomeProcessed
food
Meat
Other

Ordinary
Income
ROIC
Total assets
Shareholders'equityD/E ratio

FY2021 plan

FY2023 plan

Comparison withFY2020CAGR Difference

Ordinary
Income(billion yen)

30.0

30.0

23.0

28.0

5%

+4.0

12.3

11.0

14.5

6%

+2.2

28.0

13.4
-1.7

13.5
-1.5

15.5
-2.0

5%
-

+2.1
-0.3

26.0

(%)

7.0

32.0

24.0

ROIC

6.8

6.8
6.6

27.0

25.0

30.0

4%

+3.0

* 6.3%

6.0%

6.8%

-

+0.5

6.4

27.0

6.2

25.0

6.0

6.0
24.0

5.8
5.6

22.0

394.0

400.0

420.0

2%

+26.0

239.9

250.0

275.0

5%

+35.1

0.15

0.13

0.10

-

-0.05

6.3

Segment income (FY2023 vs. FY2020)
Processed food business

Meat business

Up 2.2 billion yen Cutting cost
Up 1.2 billion yen
 Expanding sales of processed food
Up 0.8 billion

Up 2.1 billion yen
 Strengthening production and processing
Up 1.2 billion yen
 Strengthening the overseas business
Up 0.8 billion

2020

2021

2023

2020

2021

2023

Shareholder return policy
Dividend policy
Aiming for a payout ratio of around40%, we will increase dividends
steadily, with the payout ratio ranging
from 30% to 50%.

ROIC = Income before interest expense and after tax / (Interest-bearing debt + Equity capital) (excluding insurance claim income of extraordinary income)3. Medium-term Plan 2023(iv) Financial strategies and numerical targets

17

 We will strengthen the management and earnings base and increase capital efficiency and profitability
by actively investing in growth areas to create stable and sustainable returns.

Investment plan: ¥60 bn to ¥80 bn in three years(Replacement (¥30 bn) + New (¥30 bn to ¥50 bn))

I. Strengthening management base Integration of the Group's systems (¥6.0 bn)
Ⅱ. Strengthening earnings base
 Reorganization of processed food production bases (¥20 bn to¥30 bn) Acquisition of meat production bases (¥7 bn)
 Strengthening the production of unheated meat (¥3 bn)
Ⅲ. Initiatives for new businesses and markets
 Introducing non-meat production facilities
 Expanding the frozen food businessⅣ. Initiatives for sustainability
 Introducing equipment with a low environmental impact
Investment plan (from next medium-term management plan) (Continued) Reorganization of processed food production
bases (¥30 bn)

Start of investment
Effects

Investment schedule
FY2021

FY2022

FY2023

FY2024

During and after
FY2025

3. Medium-term Plan 2023

Reference material (i)18

Description of the strengthening of the earnings base in the value chain
MarketingCommonStrengthening,
efficiency

Processed
foodStrengthening
marketing
Building andstrengthening brands

Meat
Using digitaltechnology

Development

Purchase, production

Enhancement

Efficiency, optimization
Unifying the
procurement of
raw materials

Reorganization ofsites
Labor-saving lines

Strengthening
and optimizing
Using the Central
domestic
Research Instituteproduction

Farm business,using unheatedmeat processing
plants

Improvingdevelopment
systemDelivery

Sales

Optimization
Consolidation ofsites

Expansion

Processed food

Promoting
Using the Group's
delivery directly
sales network
Strengthening
from production
sales in Japan andareas
overseas
Efficient delivery
Examples in the existing product lineup

21 plants of the Group (Japan)

Living body control using digital technology(Taiyo Pork Corp.)

Planned reorganization of production bases(La Pizza series)(Yonekyu's Meatball series)(Renji de Gochiso series)(Umazutsumi Volume Rich
Hamburg series)

Expansion of the processed food business3. Medium-term Plan 2023

Reference material (ii)19

New business fields
Processed foodMeat

 Establishing a non-meat market

 Strengthening non-meat, unheated foodand extract products(developing both consumer products
and products for business use,considering the market as a growthmarket) Strengthening the product development
function(developing creativity and meeting
market needs)(expansion of business)
 Incorporating the production businessand meat wholesale function(strengthening the upstream process
and downstream process) Developing cutting-edge technology
Kyushu Extract Limited(an image of the completed plant) Incorporating the frozen food business

Sales at the Group by market in FY2020(billion yen)

Initiatives in overseas markets
Processed foodMeat Strengthening overseas production andsales in overseas markets

 Expanding synergies between theexisting overseas businesses(Using ANZCO's sales channels)
 Scale expansion using expertise inbusiness in China and Thailand(Based at Itoham Foods Trading(Shanghai)) Selling Japanese beef using ANZCO'ssales channels

Exports of Japanese
beefEurope
10.7

Asia
28.0

Japan
756.3

10.9

North
America
22.7

South &
CentralAmerica
Oceania22.0

3. Medium-term Plan 2023
Initiatives for sustainability

Reference material (iii)20

Initiatives related to climate change
Reduction of CO2 emissions
Installation of efficient facilities/equipment
Use of renewable energy
Installation of cooking oil waste boilers

Sustainable use of biologicalresources

Using CFC free equipment and reducing global
warming potential

Forest conservation activities

Replacement of freezers and refrigeration equipment withenvironmentally friendly equipment

Kobe Forest School

Cleaning activities
Senbonhama coast cleaning

Promotion of the recycling-oriented
agriculture modelManaging farms, considering animal
welfareEnvironmentally friendly
containers and packaging
Reducing the amount of plastic usedThin packaging materials
Expanding use of recycled plastic

Use of biomass materials
Expansion of use of biomass plastic andbiomass ink

Reducing waste
Reuse of waste oil as fuelEfficient use of water resources

Installation of cooking oil waste boilers

Reduction of water consumption
Recycling food waste to make feed
and fertilizer

Reuse of used water

Making feed for farmed pigs and fish
Yonekyu Eco Project Center

Introducing advanced water treatment
facilities for water quality conservation
Strengthening wastewater treatment facilities

3. Medium-term Plan 2023

Reference material (iv)

Initiatives for sustainability

Promoting changes in ways of working

Cultivating employees

 Promoting flexible ways of working by establishingwork from home and flextime
 Increasing productivity by improving ways ofworking and promoting digital strategies

 Cultivating human resources that come to be able tothink by themselves through different careers and canchange the status quo
 Education for employees for each one being proud of
their expertise and increasing job satisfaction

Respecting diversity

Environmental conservation, education and support

 Actively hiring female employees and appointing
them as managers
 Promoting the utilization of elderly people and their
participation
 Promoting support for workers engaging in long-termcare Workplaces where disabled employees can work
comfortably






Forest protection activities in the foothills of Mt. Fuji
Volunteer activities at Kobe Forest School
Senbonhama coast cleaning
Support for UNICEF's activities

21

The forward-looking statements, including plans and results forecasts, included in this material are based on information available and certain
assumptions that the Company considers reasonable. They involve a variety of risks and uncertainties and the Company does not guarantee resultsin the future.
Actual results may be different from the plans and forecasts included in this materials due to a variety of factors.
The information included in this material is intended to deepen the investors' understanding of the Company and is not intended to solicit
investment. We ask you not to make investment decisions depending solely on this material.
The Company pays close attention to the contents of the material. The Company does not assume any responsibility for any errors in information,
data falsifications by a third party, or failures caused by data downloading or other causes.