Profile

Strategy Section

Sustainability Section

Governance Section

Financial Section

PurposeValue Creation Process for Achieving Our Vision for 2030

The Morinaga Group will continue to create healthy foods thatcan be enjoyed beyond generations, thereby bringing smiles toTo achieve 2030 Vision, we will create “the three values of health of mind, body and environment,” andthe faces of people around the world now and in the future.

realize sustainable growth by contributing to people’s wellness around the world.

2030 Vision
Materiality

Evolution of Management

Contribute to healthy lives ofpeople around the world

Promote management with a longterm perspective using our current
business model as a foundation

Diversity and inclusion of people

1. Promote Purpose-Achieve sustainable value chains

driven Management

Conserve the global environment

2. Implement the 2030

Strengthen the business
management foundation

Business Plan
See pages 28 and 46

See page 18

We Will Change into a Wellness Company.
Customer value

Social value• Provide value of health to more than 70% ofJapan’s population through new initiatives
2
aimed at becoming a wellness company*

Employee value• Ratio of employees who find their job
meaningful at work and who are in good3
mental and physical health at work: 80%*

Customer value
Shareholder value• Rising health consciousness
through food
• Socioeconomic and lifestyle changes
brought about by the COVID-19
pandemic• Declining birthrate/ aging populationand contraction of Japanese market(labor shortages)• Changes in consumer behavior andbusiness model driven by the evolutionof digital technologies• Rising world population and climatechange, etc. (unstable raw materialsprocurement)• Rising needs to resolve
social issues (SDGs and ESGinvestment)

Employee value

Shareholder value

Social value• Management aware of capital costs• Realize a stable and consistentshareholder return

Economic value

External Environment

See page 28• Procurement ratio of sustainable raw
4materials: 100%*(cacao beans, palm oil, and paper)5• CO2 emissions: 30%* reduction• Use of plastics for in Jelly products: 25%
6reduction*
7• Food loss and waste: 70% reduction*

Economic value *1• Net sales: 300 billion yen• Operating income to net sales ratio: 12% orhigher• Overseas sales ratio: 15% or higher• Focused domains’ sales ratio: 60%

Transition strategy

Management Capital (FY2022/3)[Financial capital]• Net assets: 131.1 billion yen• Shareholders’ equity ratio: 60.7%• Long-term credit rating: A stable (obtainedfrom JCR)

Business Model[Intellectual capital]• Patents owned:
176 in Japan and 105 overseas
Trademarks owned:
8535 in Japan and 596 overseas*• R&D expenses: 2.6 billion yen[Human capital][Social capital]• Relationships of trust with various
stakeholders built over more than 120 years
in the business• Many long-seller brands• Diverse raw materials with consideration forsustainability and close quality control

16For whom
• Consumers looking for adelicious, easy, and quick
nutritional support• Consumers looking to satisfy
a craving or refresh withconfections or ice cream

Development andmarketing

Procurement andmanufacturing• Plan and develop products thatmeet constantly changing needsfrom customer’s perspective• Process healthy ingredients in a
delicious manner• Stable procurement based onstrong partnerships with suppliers• Stable manufacturing of safeand reliable products by wayof proprietary mass production
technologies and sophisticatedquality management[Value provided to shareholders]

Logistics and sales• Distribute products utilizing
a stable logistics system anddiverse sales channels• Advertising and in-store
promotions for new products withfamiliar brands“in-” Business Direct Marketing U.S. BusinessBusiness

Dividends paid: 4.4 billion yen
Share buybacks: 1.4 billion yen
Total returns to shareholders: 5.9 billion yen[Morinaga’s value]

Frozen Desserts
Business

Domestic Confectioneryand Foodstuffs Business10• Achieved record high net sales*• Growing net sales of focused domains• Receiving higher ESG scores from outside
institutions

Strengths of the Morinaga Group
Trust(history and brands spanningmore than 120 years)

Basic research/Ingredient research

Food processingtechnologies*1 The Company applied the “Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020)”, etc., from the beginning of FY2022/3. *2 Scope: Products defined as Deep dive into “health of mind,”Accelerate “health of body,” and Evolve “health of mind” to “health of body.” Population percentage calculated based on INTAGE Inc. SCI annual purchase rate (scope: consumers nationwide between the ages of 15 and 79.)
Going forward, the Company will explore establishment of a vision on a global basis. *3. Rate of positive responses on the employee awareness survey. *4. Group consolidated basis; paper covers product packaging.
*5. Scope 1 + 2 (domestic Group consolidated basis; compared to FY2019/3.)
Morinaga Group INTEGRATED REPORT 2022

• Delicious • Fun • Healthy • Nutritional• Convenient (easy and quick)9• Employee loyalty: 80%*
• Health management:
Certified Health & Productivity
Management Outstanding Organization[Natural capital][Value provided to customers]

Fast development and mass production of products that meet customer needs
and deliver them across a broad range of channels[Production capital]• Production sites:
8 factories in Japan and 3 overseas• 1 R&D center

Value Created (FY2022/3)

Outputs

Product developing
capability

Production technologies/
Mass production
technologies

Product distribution
capabilities and information
provision capabilities

Employee-friendly
workplace environment*6. Scope: Amount of plastics used in packaging materials (intensity; compared to FY2020/3; including replacement with biomass plastics.) *7. Scope: Food loss and waste occurring from receipt of raw materials to delivery(distribution) (domestic Group consolidated basis; intensity; compared to FY2020/3.) Excludes feedstuffs and fertilizers, etc., that are returned to the food resource chain. Food disposed of by incineration or in landfills isdefined as “food loss and waste.” *8. Number of rights owned as of the end of FY2022/3. *9 Positive responses to “I feel proud as a member of this company” on the employee awareness survey. *10 Accounting Standardfor Revenue Recognition retroactively applied.
Morinaga Group INTEGRATED REPORT 2022

17