Itoham Yonekyu Holdings Inc.
Medium-term Management Plan 2023
Integration progress report

November 08, 2022
ITOHAM YONEKYU HOLDINGS INC. 2022

Table of Contents

01 Medium-term Management Plan 2023
Business Summary
02 Integration progress-01 Plan and Effects
FY2016~FY2021-02 Plan and Effects [ Processed Food ]FY2022~

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ITOHAM YONEKYU HOLDINGS INC. 2022

Table of Contents

01 Medium-term Management Plan 2023
Business Summary
02 Integration progress-01 Plan and Effects
FY2016~FY2021-02 Plan and Effects [ Processed Food ]FY2022~

2

ITOHAM YONEKYU HOLDINGS INC. 2022

01 Medium-Term Management Plan 2023 Summary In Medium-Term Management Plan 2023, we are working on various measures to promote
the integration of the entire group and enhance competitiveness and growth potential.
 In this documentation, we would like to explain the progress and future with regard to“I. strengthening the management base” and “Ⅱ. strengthening the revenue base”
particularly.
<Guidelines for actions>

Achieve further growth and leapby defying stereotypes and reaffirming our strengths
Our vision for achievement during thecurrent of Medium-term Management PlanOngoing challenges after integration

I. Strengthen management base

Maximize performance and potential

Ⅱ. Strengthen earnings base

Maximize Group value

Ⅲ. Initiatives for new businesses andmarkets

Establish new core earnings sources

Ⅳ. Initiatives for sustainability

Fulfill corporate social responsibility
through business3

ITOHAM YONEKYU HOLDINGS INC. 2022

01 Business Summary FY2018 : Significant decrease in profit. The main factors were rising costs of raw materials andlogistics costs, price competition, unfavorable ANZCO Foods results, etc.
 FY2020 : Achieved maximum profit. The main factors were successful cost reduction throughsynergy effects, expanded demand for eating at home, improved profitability ofprocessed foods, recovery of ANZCO Foods etc.
350

8.0

●Changes in ordinary profit and ROIC

Ordinary profit (Billion Yen)

ROIC（％）

7.0

300

6.0

250

5.0

200

4.0
150

3.0

100

2.0

50
0

1.00.0

Beforeintegration

FY2016FY2015
Ordinary profit(Billion Yen)
ROIC（％）FY2017FY2018FY2019FY2020

FY2021

FY2022(Forecast)

18.3

24.9

24.4

15.7

19.5

27.0

28.6

24.0

-7.3

6.4

4.14.7

6.3

6.6

5.1

*FY2015 is the simple sum of Itoham Foods and Yonekyu.
*ROIC is calculated by excluding insurance receivable in extra ordinary income.

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ITOHAM YONEKYU HOLDINGS INC. 2022

Table of Contents

01 Medium-term Management Plan 2023
Business Summary
02 Integration progress-01 Plan and Effects
FY2016~FY2021-02 Plan and Effects [ Processed Food ]FY2022~

5

ITOHAM YONEKYU HOLDINGS INC. 2022

02-01 History
 Itoham owns many long-selling products. Also, a wide range of businesses,including overseas business primarily composed on ANZCO Foods.
 Yonekyu operates mainly in the Tokai region, and owns unique products. Also, expand thebusiness actively, such as meat livestock farming business and e-commerce business.
ITOHAM FOODS INC.
1928

1934
1979

1965

First in the industry, launched "Cellophane Wiener“.
(Current "Paul Wiener“)

1981

Promote delicatessen retail business.
Established “Itoham Food Solutions Co., Ltd.”.

1988

Strengthening livestock farming and processing
business. Established “Sankyo Meat Co., Ltd.”.
The first in the world,

2015

Strengthen overseas business. Increased the1981

Yonekyu Corp.

Denzo Ito founded “Ito Shokuhin Kakougyou” in Osaka.

1999
2006

launched baby size wiener “Pork Bits”.

2010

investment ratio in "ANZCO Foods" and made it a subsidiary (65%)

2011

Kiyokazu Shoji founded “Yonekyu Shokuhin” in Numazu.

First in the industry,built up Factory, it was special factory for Prociutto.

Entered the frozen food business. Acquisition of allshares of “Yamaki Foods Inc”. (Current “Yonekyu Delica Foods Corp.”)

Strengthening the poultry livestock farming business.

Established “Yonekyu Tohaku Inc.” (Current “Yonekyu Oishii Tori Corp.”) in Tottori.

Entered the pork livestock farming business.
Established “Taiyo Pork Corp.” in Hiroshima.

Strengthening the online shopping business.
Open own website. (URL/link: https://www.yonekyu-eshop.jp/)

Itoham Yonekyu Holdings Inc.
2016
2017

Established Itoham Yonekyu Holdings Inc.

Strengthening competitiveness overseas business.

Acquired additional shares of “ANZCO Foods” and made it a 100% subsidiary.

2019

Joint investment with Mitsubishi Corporation Group.

2020

Non-meat protein products new release.

Established “Kyushu Extract Ltd.” to manufacture meat extracts and seasoning products.

6ITOHAM YONEKYU HOLDINGS INC. 2022

02-01 Combining each other's strengths to build a strong portfolio
 Through integration, we will complement and strengthen each other to build astrong portfolio. Became one of the largest processed food and meat company inJapan.
Nationwide sales network

Area

Strong relationship with the Tokai region

Strong in ham/sausage

Processed Food

Strong in cooked Foods

Strong in household products

ClientStrong in commercial products

automated and efficient production

Manufacture

niche and unique production

Strong in Beef and PorkMeat

Strong in Poultry and Pork

To the largest
processed food and meat company in Japan
Aiming to maximize integration effects
by improving efficiency and cost competitiveness7

ITOHAM YONEKYU HOLDINGS INC. 2022

02-01 Initial targets and results of the previous medium-term plan
 Achieved about 5.5 billion yen improvement mainly in the procurement function
during the previous medium-term plan
 Initially, the mainly effectiveness for the production and logistics function were
expected to improve about 5.0 billion yen.
Initial targets

Results of the previous medium-term planDevelopment

 Strengthen competitiveness by sharing
development technology.

 Strengthen competitiveness by sharing
development technology.

Procurement

 Improvement for price negotiation powerand efficiency through joint procurement
and centralized inventory.

 Improvement for price negotiation powerand efficiency through joint procurement
and centralized inventory.

Manufacture Strengthen cost competitiveness andexpand production profit by optimizing
group assets.

 Improve the production profits by utilizing
nationwide group production bases.

logistics

 Strengthen competitiveness through thelarge handling volume.

 Reduction of logistics costs through joint
operation of trucks, etc..

Sales

 Increase the value of both brands andmaximize supply.
 Optimizing labor and operating costs.

 Strengthen competitiveness and improve
brand value through the effective using ofgroup assets.

Headquarters

 Increase efficiency and reduce costs byintegrating headquarters functions.

 Increase efficiency and reduce costs byintegrating headquarters functions.

Integration
synergy effect

About

5.0 billion yen

About
8

5.5 billion yen
ITOHAM YONEKYU HOLDINGS INC. 2022

02-01 Integration Synergy : Specific examples
 The development technology are shared such as production method.
 The procurement function are improved more than expected through the joint
procurement, centralized inventories, etc.
 The manufacture bases has nationwide, and go ahead to make efficient by using ofgroup assets.
Development
SynergyeffectSharing development technology
 Non-meat productdevelopment

 Shared use ofraw materials

 Sharing
manufacturing methods

Procurement
Synergyeffect

Joint procurement
 Strengthen cost competitiveness by sharing raw materials,materials, suppliers, etc. and by expanding direct trade.

Centralized inventories Cost savings through efficient inventory management.

Manufacture
SynergyeffectEffective utilization of group production bases that located nationwide
The Processed FoodDivision

The MeatDivision

plant bases

farming and processing bases

・・・・・ Itoham
・・・・・ Yonekyu

・・・・・ Itoham
・・・・・ Yonekyu

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ITOHAM YONEKYU HOLDINGS INC. 2022

02-01 Integration Synergy : Specific examples
 The sales function is working to strengthen competitiveness and improve brandvalue through the effective using of group assets. In The Processed Food Divison,market share increased comparison with before the integration. The Meat Divison
has a stable and strong portfolio with a share of 10% or more for all categories.
 In the headquarters functions, working to Increase efficiency and reduce costs byintegrating.
調達 brand value
Strengthen competitiveness and improve

FY2021 market share in JapanThe ProcessedFood Division

Synergyeffect：Yonekyu

20

 Cooked Foods

total

21

21

total

14

share％

share％

15

BeforeAfterintegration integration
FY2015
FY2021

Synergyeffect Pizza/Snacks

total

5Headquarters：Itoham Yonekyu Holdings：Itoham Ham/Sausage
total*Date：QPR™
*subject : household foods

The MeatDivision Beef

total

31

FY2021 market share in Japan*our research*including meat for processed products12% Pork

19%

total

16

3share％Sales

21

 Poultry

11
BeforeAfterintegration integration
FY2015
FY2021

13%

BeforeAfterintegration integration
FY2015
FY2021

Integrating headquarters functions
Reduce costs by consolidating headquarters functions, such as centralizing funding.
Reduce costs by improving duplication of work (personnel and general affairs, accounting and finance,
legal/compliance, public relations, etc.)

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ITOHAM YONEKYU HOLDINGS INC. 2022

Table of Contents

01 Medium-term Management Plan 2023
Business Summary
02 Integration progress-01 Plan and Effects
FY2016~FY2021-02 Plan and Effects [ Processed Food ]FY2022~

11

ITOHAM YONEKYU HOLDINGS INC. 2022

02-02 Creation of further synergies[ Processed Food ] We recognize the challenges of delay integration of the production and logistics
functions.
 We will create further integration synergies by restructuring group factories andlogistics bases.
Initial expectations

the previousmedium-term plan

2022- “From now on”

Development

Procurement

 Go ahead to perform plant restructuring,
optimize assets, strengthen costcompetitiveness, and increase production profit

Manufacture Go ahead to perform the restructuring oflogistics bases, efficiently manage handlingvolume, and strengthen competitivenesslogistics

Sales

Headquarters

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ITOHAM YONEKYU HOLDINGS INC. 2022

<Manufacture Function>

02-02 Group factories restructuring[ Processed Food ] In order to success further improvement of product functions, we will go ahead toperforme “reorganization by function“, “consolidation of production”, “automationof production lines”, and “DX production” to optimize each area.
Challenges
Creation ofsynergies

New businesses
Growing markets

Aging factory

Labor shortage

Cost up

Environmental
considerations

Naturaldisasters

Reorganization byfunctionIn order to maximize the synergy effect, the production system will be changed fromeach company to each function.

Consolidation ofproduction

Optimize the production system for each area by constructing new factories andintroducing new equipment.
Actively introduce facilities that are friendly to the global environment.

Automation ofproduction lines
DX productionStrengthen cost competitiveness and reduce risks such as labor shortages byautomating manufacturing process.

Strengthen cost competitiveness and reduce risks such as labor shortages by thecutting edge DX manufacturing process.
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ITOHAM YONEKYU HOLDINGS INC. 2022

<Manufacture Function>

02-02 Goal of group factories restructuring[ Processed Food ] By changing a more simple organization by function basis, we will go ahead toperforme production consolidation, line automation, and DX production. As a result,cost competitiveness and production capacity will be strengthened.
 Created cost competitiveness and production capacity to new businesses andgrowth areas to achieve further growth for the group.
Reorganization byfunction

consolidation ofproduction

Automation of production
lines

DX production

by company↓
by function

Optimize the production
system for each area

Strengthen costcompetitiveness andreduce risks

Strengthen costcompetitiveness andreduce risks

Sausage automation
production capacity

Business improvement
through AI/IoT

A more simple
organization

Aiming future numberof production bases
consolidate to＜from April 2023＞

HDManufacture

Sales・Itoham brand・Yonekyu brand＜Until FY2022＞

70increaseby%50%ex)• Centralized management ofweighing data• Improving inspection accuracy
with AI

east area

HDItohamYonekyu

ManuSales facture

Sales facture

Manu-west area

Outcome of cost competitiveness and production capacity

Strengthen New businesses/Growing markets
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ITOHAM YONEKYU HOLDINGS INC. 2022

<Logistics Function>

02-02 Logistics bases restructuring (Kanto area)[ Processed Food ] In order to solve logistics issues, we will go ahead to performe “base consolidation”,“promotion of joint logistics”, and “expansion of warehouse space”. Optimize eacharea according to the progress of factory restructuring.
Challenges
Creation ofsynergies

Lack of warehousecapacity

Increased
delivery area

Aging

Logistics 2024
problemEnvironmental
consideration

Logistics bases restructuring*Start from Kanto area.
Other areas will be implemented in parallel with factory reorganization.
bases consolidation
Increased warehouse capacity
reduced delivery distance, reduced
delivery costs, and reduced CO2
emissions by consolidating into
two main bases(Kanto area)
FY2022 Number of logistics bases

7

FY2024logistics bases

bases

15

Consolidate
into

2mainbases

ITOHAM YONEKYU HOLDINGS INC. 2022

02-02 Investment and effect[ Processed Food ] In current and the next medium-term plan, the company plans to make newinvestments of 50.0 to 60.0 billion yen, mainly for group factory restructuring.
 The investment effect is expected to be about 2.0 billion yen in FY2026 and about
5.0 billion yen in FY2030.
billion yen

Investment amount (*1)

current
medium-term plan

Next
medium-term plan

the one after the next
medium-term plan

FY2021-FY2023

FY2024-FY2026

FY2027-23.033.0undecided

FY2022~ Reconstruction of Yume factory (First half of 2022 start operation)
Reorganization of logistics bases in the Kanto area（FY2024 start operation)
FY2023~ East Japan area factory reorganization
FY2025~ West Japan area factory restructuring

FY2023

FY2026

FY2030Effect of investment (*2)

-2.0

5.0

Effect of manufacturing
cost reduction (*2)

0.5

3.0

6.0

-

1.0

2.0

▲ 0.5

▲ 2.0

▲ 3.0

Effect of Logistics optimization (*2)
Depreciation expenses (*3)

The production volume is assumed to be the same as in FY2022.
The unit cost of main raw materials, auxiliary raw materials, energy, distribution costs, labor costs, etc. is assumed to be the same as in FY2022.
*1 : The investment amount is the total figure for the target period.
*2 : The effect amount is the figure for the final year of the target period.
*3 : Depreciation expenses are the sum of the increase due to investment in restructuring of bases and the decrease due to consolidationof bases ("-" indicates an increase).

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ITOHAM YONEKYU HOLDINGS INC. 2022

Contact Information
ALT ITO Bldg. 1-6-21, MITA, MEGURO-KU, TOKYO , 1538587, JAPANITOHAM YONEKYU HOLDINGS INC.
Public & Investor Relations Office
TEL : +81-3-5723-6889
You can also contact us from the company website.
https://www.itoham-yonekyu-holdings.com

The current plans, forecasts, strategies and other items contained in this presentation include our forecasts for business results.
These forecasts are not historical facts; they are our judgment based on currently available information.
We do not guarantee these forecast business results, and they contain elements of risk and uncertainty.
The purpose of this presentation is not to solicit investment, but to give all investors a deeper understanding of Itoham Yonekyu Holdings.
We have taken care over the content of this presentation, but we do not accept any responsibility for errors in the content, tampering by
third parties, or errors that may occur during downloading.

ITOHAM YONEKYU HOLDINGS INC. 2022