I toham Y one kyu Grou p

IN T E G R A T E D R E P O R T

2023

Itoham Yonekyu Holdings Inc.
1-6-21 Mita, Meguro-ku, Tokyo
URL: https://www.itoham-yonekyu-holdings.com/english/

To our stakeholders
The Itoham Yonekyu Group has issued this Integrated Report 2023 as a tool forcommunicating with all of our stakeholders.
Through this report, we explain our Groupʼs initiatives aimed at offering value
to society and continuously improving corporate value in simple terms to all of our
stakeholders.

Aiming to be a Leading Food Company thatContributes to the Realization of a Sound
and Affluent Society through Business

Isao Miyashita
President and Chief Executive Officer
Itoham Yonekyu Holdings Inc.

Contents

1

2

Introduction

1

Group Philosophy and
Vision2	Concerning Publication

Value Creation Story

3 Message from the
President
9 The History of Itoham
Yonekyu Holdings11	Highlights from FY2022
Activities
13 Value Creation Process3

Business Strategy

VisionAction Guidelines

01

Itoham Yonekyu Group Integrated Report 2023

5

Sustainability

Governance

15	Medium-term Management Plan

27	Basic Stance on Sustainability

35 Corporate Governance

19 Processed Food Business29 Progress on Our Materialities

21 	Special: Initiatives in
Reorganization of ProductionBases
23 Meat Business

31 Responding to Climate
Change33 Initiatives in Respecting
Human Rights
34 Basic Stance concerning
Human Capital
Consideration for animal
welfare41 List of Directors, Auditorsand Executive Officers
43 Message from an Outside
Director
45 Compliance
Risk Management

25 Special: Foreign Business
StrategyGroup Philosophy and VisionGroup
Philosophy

4Main Relevant Information
Disclosure Media

Contribute to the realization of soundand affluent society through business.
A leading food company that continuously
evolves with its employees by embracing thespirit of fairness and the challenge toprogressions.
• Supply products and services of high value by pursuing safety,
security and quality• Build and expand trust by making good on promises• Capacity development through broad-minded communication andmutual understanding• Honest and transparent actions with top priority on compliance• Business actions with awareness to global environment

6

Financial Data andStock Information

47 Financial and
Non-Financial
Highlights
49 Financial Data /Stock Information
51 Corporate Data

Concerning Publication
Editorial Policy

Financial
Data

Non-financial
Data

Summary of Financial Results●●

Financial Result●

IR Website●

This integrated report was created to allow shareholders, investors, and all other stakeholders
to get a better understanding of the history of both Itoham and Yonekyu and the Itoham
Yonekyu Groupʼs medium- to long-term value creation process.

Scope
Period Covered
This report covers initiatives during FY2022 (April 1, 2022 to March 31, 2023 ) and includes
some initiatives beyond and outside this period, as well.

Corporate Governance Report●

Entities Covered
Itoham Yonekyu Group

Sustainability Website●* Scope of personnel and environmental data are listed separately.

Reference Guidelines

The International <IR> Framework from the IIRC
Ministry of Economy, Trade and Industry “Guidance for Collaborative Value Creation 2.0”
The Environmental Reporting Guidelines 2018 from the Ministry of the Environment
Sustainability Reporting Standards from GRI

Disclaimer

The perspectives on future strategy and results listed in this integrated report are based on
currently available information and include some uncertain factors. Please be aware that it ispossible for actual results to differ greatly due to a variety of causes

02

Message fromthe President

Message from the President

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Strengthening the foundation for the next Medium-termManagement Plan with more ambitious goals
Itoham Yonekyu Holdings (hereinafter referred to as “Holding Company”) was formed
in 2016 through the merger of Itoham and Yonekyu, with my appointment as president,
as I had been president of the latter company at that time. Since assuming this position,
I have been leveraging my knowledge of the livestock business and management
experience that I gained from my previous hands-on experience in meat importingand sales, feed procurement, and swine and poultry farming, to improve our businessportfolio and risk management, reengineer business processes, increase profitability
and make us more resilient to market conditions.
Starting in FY2021, our Medium-term Management Plan 2023 declares and promotes
as its action guidelines, “Achieve further rapid growth by defying stereotypes and reaffirming
our strengths.” Its major themes are “Strengthening management base,” “Initiatives for
new businesses and markets,” “Initiatives for sustainability,” and “Strengthening earnings
base.” We have positioned the first post-merger Medium-term Management Plan as a “hop,”and the Medium-term Management Plan 2023 as a “step” to strengthen the foundation fora “leap” or the next Medium-term Management Plan with more ambitious goals.
In FY2021, we posted a record-high recurring profit of 28.6 billion yen, whereas
in FY2022 it was 26 billion yen, down from the previous year. This was because internal
improvements and price revisions could not offset cost increases due to soaring raw
material and energy prices even though ANZCO FOODS, our overseas business,
performed well. In FY2023, we expect recurring profit to be 25 billion yen, lower than the
30-billion-yen target in the Medium-term Management Plan 2023 due to the continued
impact of cost increases.

Under the new management structure,
we will all work together tostrengthen the foundation
for a leap forward and advancereforms.

Isao Miyashita
President and Chief Executive Officer

03

Itoham Yonekyu Group Integrated Report 2023

On the other hand, we have been making steady progress in terms of management
structure. We have created a structure that enables us to strategically deepen existing
businesses and develop new businesses by integrating and centralizing the businessstrategy function and the procurement division of the meat business into the Holding
Company in FY2021, and the business strategy function of the processed foodbusiness into the Holding Company in FY2022. Then, in April 2023, we became an
operating holding company to create a more efficient and flatter organizational structure.
The Holding Company used to control the Itoham Group and the Yonekyu Groupseparately, but we have integrated the same functions that each of the two groups
had independently into a strategic segment unit and reorganized their subsidiaries as
subsidiaries of the Holding Company according to their functions. In the processed foodbusiness, we have brought the production subsidiaries — Itoham Yonekyu Plant Inc.,
which operates mainly in eastern Japan, and Itoham Yonekyu Foods Inc., which focuseson western Japan — under the umbrella of the Holding Company and have reorganized
the plants of Itoham and Yonekyu across Japan by area. We believe this will promote
cross-brand production and improve cost competitiveness and profitability. In addition,
we will promote the unification of various systems, such as the human resources system
and accounting regulations, as well as the core system, to strengthen the governance of
our entire group.
It has taken longer than expected to integrate two companies with different
corporate cultures and long histories because, as a food manufacturer, we place thehighest priority on product safety and respect for the working environment of ouremployees. Now I feel we have finally begun to make real progress.

Medium-term Management Plan 2023
pp. 15-18

ANZCO FOODS
pp. 25-26

Reorganization
p. 18

04

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Message fromthe President

Restructuring production and logistics systems to enhancecost competitivenessMaterialities
pp. 29-30

Optimization of production system
p. 16
pp. 19-22

Restructuring oflogistics system
p. 16
pp. 19-20

As one of our Groupʼs materialities is “Pursuit for uncompromising flavor and highquality,” we produce our products with an unwavering determination to create delicious
food that never fails our customers. We are also steadily and thoroughly working to
improve our cost competitiveness in production and logistics so that we can offer
delicious food at reasonable prices.
One of our challenges is that many of our Groupʼs factories are aging due tomore than 50 years of operation and are not automated, resulting in high production
and manufacturing costs. I believe that by increasing the percentage of automatedfactories in the future, our entire Group will be able to achieve cost improvements ofapproximately 10 billion yen. By shifting to more cost-competitive factories, we willconsolidate the number of our 20 processed food factories in Japan to about 70% by2030, thereby optimizing our production system. In June 2023, Yume Plant in Numazu
City, Shizuoka Prefecture, which had been shut down, resumed operations and began
producing frozen foods. In 2024, we plan to begin reconstruction of our Kenko Plant
in Mishima City, Shizuoka Prefecture, which will be completed in 2026 as a nextgeneration ham and sausage plant.
Restructuring of the logistics system is also underway. We are currently planningto consolidate our seven bases in the Kanto area into two main bases by 2024. The
logistics system in other areas will also be optimized to achieve cost competitiveness.
In addition, to reduce the environmental burdens, we have been moving forward withmodal shifts*1 , such as switching to rail for long-distance transportation, and havebegun considering joint chilled transport*2 with other companies.

Expanding business areas and promoting overseas
operation
Although meat is recognized as an important source of protein and its demand in Japanis currently growing, it is likely to shrink back in the long run due to the depopulation,
lower birthrates, and the aging of society. I find this poses a major risk to our Groupʼsbusiness. As I believe that business transformation is essential for our Groupʼssustainable growth, we will focus on expanding into business areas where we haveknow-how and expertise but have not yet started, as well as on overseas development.
I tell the employees from time to time to try new things because I want to create anorganizational climate that encourages each of them to do so with the enthusiasm todevelop new businesses for the company in the next 20 or 30 years.

*1 Modal shift
A shift from freighttransportation bytrucks and other motorized vehicles to railand ships, which can
carry larger volumeof goods with a lower
environmental impact.
*2 Chilled transport
Transportation of
goods that require a
constant control at low
temperatures from 0
to 10 degrees Celsius(chilled temperature
range) by refrigerated vehicles or othervehicles equipped withrefrigeration units.

Bolstering frozen food business
The New Business Development Office, newly established in April 2022, focuses mainly
on frozen foods. Frozen food is an area where we can leverage our Groupʼs expertisein meat procurement and processing technologies. It is a promising market, not only
because its demand is expected to grow in the future, but also because it will help
reduce food loss. One of the products we have high expectations for is our “Fan Meal”
line of frozen box lunches, which was launched in the spring of 2023. Aiming to position
the frozen foods business as the third pillar of our processed food business, following
ham & sausage and prepared food, we will continue to put our efforts into creating
appealing frozen food products.

Boosting overseas development
Since making ANZCO FOODS a wholly owned subsidiary in 2017, we have beenworking on its internal improvements by sending personnel to it to strengthen theHolding Companyʼs governance over it. The results of these efforts have been visible forthe last two or three years, and together with a tailwind from external factors, ANZCOFOODS was able to record its highest profit in FY2022. I hope that we can leverage ourexperience in the ANZCO FOODS business to further develop our overseas business inthe future.

Overseas development
pp. 25-26

Utilizing by-products and reinforcing healthcare businessI believe that the key to differentiating ourselves from competitors is how we can add
value by using by-products and other means within the value chain from upper tiers
to lower tiers. ANZCO FOODS has been making effective use of by-products such as
blood and bones obtained during the slaughtering process of livestock. It focuses on
the production of animal blood products, which are expected to grow rapidly for use
in vaccines, regenerative medicine, and clinical diagnostics. We are proud to lead theindustry with ANZCO FOODSʼ bovine blood products, which have a high market shareworldwide.

05

Itoham Yonekyu Group Integrated Report 2023

06

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Message fromthe President

Extending range of non-meat products and researching on cultured meat

Soy-based meat
Consortium for
Future Innovation by
Cultured Meatp. 17

I believe that our Group has a responsibility to provide an alternative source of protein toanimal protein in response to the possible future global protein shortage crisis and thesocial demand to reduce environmental impact.
We have been marketing soy-based meat, a potential alternative protein option,
since FY2020. We will continue efforts to establish our products in the market by
expanding the lineup, renewing packaging, and promoting the products. In addition, as
a medium- to long-term initiative, we established the Consortium for Future Innovation
by Cultured Meat in March 2023 as a collaboration between industry, academia andgovernment to promote research into cultured meat as a food source.

Our approach to sustainable growth

Reducing greenhouse gas emissions
pp. 31-32

Human rights due
diligencep. 33

I have a strong sense that, as a company, we must work now to solve environmental andsocial issues, with an eye toward what the Earthʼs environment will be like in the times
when our children and grandchildren live. Believing that the world will no longer allow thesurvival of companies that do not address these issues, we will continue to pursue oursustainability initiatives in this fiscal year and during the next Medium-term Management
Plan, to achieve our Groupʼs sustainable growth and to realize a sustainable society,even though balancing this with profitability will not be easy. Although we are juststarting, we will carry out specific activities centered around reducing greenhouse gas
emissions, human rights due diligence, and animal welfare.

Continuing transformation to fulfill supply responsibilities
as a leading food company
Animal welfare
p. 34

07

The greatest advantages of our Group are the balance between the processed foodand meat businesses in our business portfolio, the balance between the range of our
product portfolio, the balance between domestic and imported meat products, andthe balance between the breeds of livestock we handle. For example, in the event of an
infectious livestock disease outbreak overseas, a portion of lost sales can be coveredby Japanese products, and the impact of fluctuations in meat market prices can be
minimized by handling a variety of livestock breeds. Limiting the impact of external
factors will surely enable us to stabilize our profitability and fulfill our responsibility to
put food on the table. As the business environment is expected to undergo significant
changes in the future, our Group will not be able to survive unless we keep trying newthings and transforming ourselves with a sense of urgency. I believe it is necessary forour organization and each employee to develop this ability to respond to change.

Itoham Yonekyu Group Integrated Report 2023

After a temporary suspension due to the COVID-19 pandemic, the President has been visiting andtalking to employees at Group companies, factories, and sales offices across Japan since June 2023.
(Upper) At KIKUSUI CO., LTD., Ebetsu City, Hokkaido Prefecture(Middle) At Chiba Sales Office of ITOHAM MEAT SALES EAST Inc. and Chiba Branch of Yonekyu(Lower) At Isa Meat Plant of SANKYOMEAT INC., Isa City, Kagoshima Prefecture

Highly motivated employees are the Groupʼs growth drivers
I consider our employees to be the most important factor in the sustainable growthof our Group because they are our growth drivers. When they are committed to theirwork, we can create products that satisfy customers, which in turn benefits all our
stakeholders. To this end, I will create an environment in which employees can develop
autonomously and work with high motivation.
When I served as president of Yonekyu for three years starting in 2013, I visited 50of the companyʼs business sites each year, including headquarters, factories, and sales
offices, and talked to a group of about 10 employees each time. I was able to sense that
their attitudes toward their work and their thoughts and seriousness about making a
profit were changing through that interaction. In June 2023, I resumed visiting sites andtalking to employees. I believe this highly valuable interaction will help them understandthe purpose behind the companyʼs systems and rules. It may be difficult to achieve it in
one conversation, but through repeated efforts, I would like to create an organization inwhich every employee fully believes in and embodies our management philosophy andvision.
All employees will work together to accelerate the speed of reform. Please lookforward to the Itoham Yonekyu Group.

08

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

The History of Itoham Yonekyu Holdings
We have continuously developed “First in the industry.”

1920s-

1940s-

1960s-

1990s-

2020s-The Start of Japanese-styleWestern Food

Improvements in the Quality of
Eating Habits

Westernization of Eating Habits

Changes in Lifestyles

To a Post- COVID-19 Era

Western technology and culture were incorporated into every field at the beginning of the
Showa period. Curry, Japanese rice omelette,
and other Japanese-style western foods gainedin popularity.

Eating habits greatly improved through foodsupply aid from the United States and the establishment of a school lunch system following theWorld War II. Bread came to be an important
staple for Japanese people.

Together with long-term economic growth,supermarkets have emerged. Refrigerated
warehouses became commonplace, and eating
habits were quickly Westernized.

Following the social progress of women and other changes in lifestyles, theneed for individual meals and small quantity products have increased. At thesame time, interest in safety and security, and a trend towards health has
also grown considerably.

There was an increase in eating meals at home due to the spread of
COVID-19. Demand for cook-at-home food, including frozen cooked foods,
bentos, and prepared meals, increased. Also, the need for environmentally-friendly products is increasing.

History of Our Products

1934Standard
for people in
the Kansai
regionSmallest in
the world at
the time

1972

1988

The Cellophane Wiener (currently
Pole Wiener) was launched.

Smoke Ham and Daruma
Smoke Ham were launched.

Pork Bits was launched.

Cellophane scraps were reused as tube-shaped
casings. The casings were stuffed with processedsausage made mainly from pork, and brand new
product was born, with each one weighing 37.5g.

Smoke ham was made by smoking pork
ham meat which is cut into three pieces.
Daruma Smoke Ham, named for its
resemblance to Japanese daruma dolls,
became a best-selling product.

Itohamrepresentative
product

1985

A technology to use mutton as an ingredient in ham sausage
was developed.

Handmade Bayern
Wieners were launched.

Mutton, which at the time had been
criticized for being pungent and inedible,
was imported from New Zealand.
Inexpensive and delicious pressed ham
was developed thanks to deodorization
through unique technology and cleaning.
With this development, ham became
widespread as something that anyone
could easily eat.

As the Westernization of dietcontinues, and the value of “food”
changes, Handmade Bayern
Wieners were launched to take inthe demand for authentic food.
Continuously improved up to thepresent day, this Itoham flagshipproduct continues to be loved.

1928 Founding of Itoham
Denzo Ito founded Ito Food
Processing in Osaka by himself.

● 

1946
Ito Foods Industry was reconstructed in Nada
Ward of Kobe, Hyogo.

● 

Itoham Yonekyu Group Integrated Report 2023

1948
Ito Nutrition Food Industry Inc. was established.

● 

1965

The Meguro Plant was built in Meguro Ward,
Tokyo, expanding its business to Tokyo area.

1960
The Nishinomiya Plant was built in Nishinomiya,
Hyogo.

● 

Founding of Yonekyu

Kiyokazu Shoji founded Yonekyu Foods in
Shizuoka by himself.

● 

1959
● 

1967
●

Itoham was listed on the First Sectionof the Tokyo and Osaka Securities
Exchanges.

1981
Yonekyu built the industryʼs first factory
dedicated to dry-cured ham, Gotemba
Factory.

● 

2020
The Marude Oniku! series
was launched.

As a result of marketing research,
it became clear that there weremany consumers who desired easeof cooking. Pork Bits, the worldʼssmallest wieners that could becooked easily and could be used
as ingredients in any dish, weredeveloped.

1958

History of Our Group09

Long-selling
product

1990

Yonekyuflagshipproduct2022

Gotemba Kogen Arabiki
Pork was launched.

Switching to environmentallyfriendly packaging.

Gotemba Kogen Arabiki Pork waslaunched with the aim of developing
coarsely-ground wieners as a newflagship product for Yonekyu, as thistype of sausage was recognized for
its flavor. This product was named
for its high-class feel and, more thananything else, for its associations with
Mt. Fuji.

In order to reduce amount of plastic
used and environmental burden,
and to contribute to preservation of
global environment, we have begun toswitch over to environmentally-friendly
packaging like the drawstring bag for“The GRAND Alt Bayern,” one of ourprimary brands, and other products.

2000
Yonekyu built the new R&D building at its head
office.

● 

2009
Mitsubishi Corporation, Itoham Foods Inc.,and Yonekyu Corporation entered into acomprehensive business contract.

● 

2013
Itoham built the Toride Plant in Toride, Ibaraki,
introducing cutting-edge equipment for that time.
● 
Itoham entered into a comprehensive partnershipagreement with the city of Kobe for collaboration andcooperation across a wide range of areas.
● 

アタリ

Soy-meat products, the Marude Oniku!
That reproduce the textures, flavors, andaromas of meat, was launched. A wide
variety of products have been developed,
resembling deep-fried meat cutlets, friedchicken, and more.

2016

Itoham Yonekyu Holdings Inc. was established

Birth of a new company due to integration

● 

2017
●

2021
The Medium-termManagement Plan 2023
was established.

● 

ANZCO FOODS JAPAN LTD becomes a wholly-owned
subsidiary.

2019
Kyushu Extract Limited is founded as a joint venture with Mitsubishi
Corporation Life Sciences Limited, producing meat extracts andseasoning products.
● 
MEIJI KENKO HAM CO., LTD. becomes a wholly-owned subsidiary.
● 

10Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Highlights from FY2022 Activities – the Foundation
for Further Growth and Leaps Forward
In the Medium-term Management Plan, we declare our fundamental guideline to “achieve further rapid
growth by defying stereotypes and reaffirming our strengths.”
In FY2022, we saw major developments, such as restructuring, reorganization of production bases, andsustainability initiatives.

Meat Business

Processed Food Business

Yonekyu s Misonikomi Pork
received its 11th Rakuten
Gourmet Prize in the Pork
Division.
*2 008, 2009, 2011, 2012, 2013, 2016,2017, 2018, 2019, 2020, 2021

It presents the life of the founder, Denzo Ito, and thehistory of meat processing.

ANZCO FOODS (New Zealand)
Achieved highest ever profits two
years running

Meat Business90th Anniversary of Establishment
Strengthening Management BaseStrengthening profit baseby expanding the healthcare business (bovine blood
products business).

p.25-26

Ito Denzo Memorial Museum
was opened at location offounding of Itoham (Kobe City,
Hyogo Prefecture) .

Manufacturing subsidiaries
were reorganized into Itoham
Yonekyu Plant (Chiba Prefecture)and Itoham Yonekyu Foods(Hyogo Prefecture).
p. 21-22

Processed Food Business

There are seven meat processing plants in New Zealand, all of which are halal
certified. The picture is of Canterbury Plant on South Island.

Meat BusinessTowada Meat Plant (Aomori
Prefecture) has begun building

bovine processing facilities, inorder to expand export capacity.
p.24

Stable Supply of Protein

Promoted new businessdevelopment.
Began work on rebuilding Yume
Plant (Shizuoka Prefecture) as amanufacturing plant for frozen foods.
p.21-22

To achieve a society ofwellness through intake ofprotein, establishedAim for 80g of Protein
Intake Per Day!

Greenhouse Gas Reduction

Commenced cooperationin the business of buildinga system for visualizationof reduction in greenhousegases (GHG) in cattle
production through Mirai
Farm (Kagoshima Prefecture).

Stable Supply of Protein

Industry-academia collaborative initiatives.
Established a Consortium for Future
Innovation by Cultured Meat, which placesa research promotion base in the Graduate
School of Engineering, Osaka University.

Processed FoodBusiness

External view of Yume Plant. Resumed operation in June, 2023 as a plant
specialized in frozen food manufacturing.

35th Anniversary of Sale of Pork Bits.
Created Pork Bits Pizza inCommemoration

p.17
11

Itoham Yonekyu Group Integrated Report 2023

12

Value Creation Story

Business Strategy

Value Creation Process

Sustainability

Governance

Financial Data / Stock Information

The Itoham Yonekyu Group is promoting new system development.
We have steadily executed restructuring and system reform and thefoundations for leaps in the Medium-term Management Plan 2023.
As well as initiatives for new businesses, we will raise the speed ofinnovation even further collectively as a unified Group.

Co-creation with Stakeholders
Stakeholder engagement

p.28

activities that
Business Model Businesssupport value creation

Input The source of value creation

Output/Outcome Offering value to society

As of March, 2022

Manufacturing CapitalGroup Philosophy(FSSC 22000, ISO 22000, and others)
Japan and overseas 56 in total(Development 12, central research 2 including thoselocated in Numazu, Technical Center 1)

Delivery

Sales

ex
p

740

Human Capital▼Business Strategy

Natural Capital
Total energy usage
Amount of water used

6,721,228GJ
12,045,000 m3［Meat Business］
Overseas Business
Strategy

p.25

Coll
ers
aborating with partn
Medium-termManagement Plan 2023 ▶ p.4、p.15、p.20、p.24

p.19, p.23

Governance ▶ p. 35

13

Itoham Yonekyu Group Integrated Report 2023

Processed foodPizza, snacks

21.4％

15.9％

32.2％

Beef

Pork

Poultry

11.8％

18.7％

12 .4％

Contributing to a sustainable global environment

Sustainability ▶ p. 27

851 t-CO2
181,000 ㎥
Number of participants in environmental preservation activities 1,512●

Reduction of greenhouse gas emissions●

Reduction of water consumption●

Realizing a society where anyone can be active in their own way●

7 materiality▶ p. 29
issuesHam and sausage* According to our Group

p.23

Japan 130, overseas 16
Distribution offices (logistics bases) Japan 25
Countries and regions offering products
Over 80

Th
ink
ing
and
creating

Procurement

Number of sales offices* According to QPRTM (Panel data for 15-79 year-olds)▶

Social and Relationship Capital

p.21● Our Group market share according to products (fiscal year 2022, in Japan)

Product
Development

Meat Business¥252.2 billion
63.4%¥7.2 billion

lls
ski
wn

Shareholderʼs Equity
Equity ratio
Free cash flow

［Processed Food Business］
Initiatives in Production
Base Reorganization

Market share of processed food products and meat▶

Financial Capital

Manufacture

Strengthening
base for newleaps forward

41

●

p.19

Employees
8,089
Education and training for fostering diverse
personnel● Job-class-specific training● Compliance training● Quality assurance training
Education/training participants
13,389174

Expansion of non-meat business and increase in product value
Number of non-meat products

Processed
Food Business(Qualified ham, sausage, and bacon manufacturing
technicians/Ready-made meal technician)do
Handing

Recognition of the External Environment

Accumulation of expert knowledge andknow-howTechnical certification holders

Offe
ring
mo
vin
g

Number of new products (including home-use/industry-use, and gifts)

s
ce
ien
er

15

Research and development offices

De
live
rin
g

Intellectual Capital

lity
liabi
e
r
d
an
s
t
c
du
o
pr

●
●

p.47-50(ISO 14001, ISO 14061, and EcoAction 21)
Japan and overseas 25 in total

Action Guidelines

Percentage of women in management positions (domestic subsidiaries)

		
●

5.4％

Percentage of employees taking childcare leave (domestic subsidiaries)* The percentage of employees taking childcare leave is calculated based on
the Child and Family Care Act. The year of birth and year of childcare leave aredifferent so the percentage for women exceeds 100%. If calculated without
dividing by year, the percentage is 100%.

Realizing a sound and affluent society

Environmental management●	

VisionOffering a variety of products to meet diverse
lifestyles and needs▶

Production factories Japan 45, overseas 14
Factories with external certification●	Food safety and quality control

2022 Financial
Information

Desired Corporate Image▶ p.1

Men 34.6％

Women 101.8％

Sustainably stable shareholder return
●

ROIC

●

Consolidated payout ratio

5.8％
40.8％

14

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Medium-term Management Plan
Medium-term Management Plan 2023 Overview
In the Medium-term Management Plan 2020 publishedalong with the management integration in 2016,
we divided strategies into the fields of products(development), procurement, production, logistics, sales,and management, established targets for creation ofsynergistic effects for each field, and strove to execute
each strategy. As a result, we saw results that surpassed
our initial goals for the whole Group, mainly centeredaround the procurement field, but leftover stock in
the production and logistics fields remained an issue.
Currently, as we head into the final year of Plan 2023, we
will further integrate across the entire Group in order torealize the Groupʼs Philosophy and Vision, we will solve theTopics for Each Core Initiative Themesissue of leftover stock, and we will raise our competitive
strength. Furthermore, we declare four core initiative
themes as “strengthening earnings base,” “initiatives forsustainability,” and, lastly, “strengthening” which, in turn,supports the other three. Using this, we strive to executeall strategies as is necessary for further capacity for growththrough efforts in new regions and sustainability.
Also, in order to execute each of these strategies,
we adopt the fundamental guideline of “achieving further
rapid growth by defying stereotypes and reaffirming ourstrengths,” as we work to foster a daring spirit, create
innovation, and enhance employee engagement.

◆

Theme I: Strengthening Earnings Base

Promoting reorganization of production bases and logistics bases in the processedfood business

Topic 1 Reorganization of Production Bases

Issues at Production Bases

Creation ofsynergy

Fundamental Guideline of Plan 2023

Achieve further rapid growth by defying stereotypes andreaffirming our strengths
Plan Themes

I. Strengthening
earnings base

What we aim forduring the Plan

Maximizing group value

Meat business

Expanding profit/shares

Stabilizing profit from domestic
business▶

Improving profit fromoverseas business
ANZCO FOODS

p. 21

Strengthening
wagyu beef exports

▶

p. 25

p. 24

Production
centralization
Automation of lines
Production DX

Ⅱ. Initiatives for
new businesses
and markets

Establishing new core
revenue sources

Strengthening frozen
foods

Ⅲ. Initiatives forsustainability

Solving social issues
through businessRealizing healthy
and affluent dietⅣ . Strengthening
management
base

Maximizing performanceand potential

Initiatives for stablesupply of protein

Considering theenvironment

Restructuring

▶

p. 31

Strengthening ANZCOFOODS healthcare
business

Creating a workplace
where each employee
can actively participate
▶

p. 34

Promoting sustainableprocurement andstable supply▶

Decaying
plantsEnvironmental
considerations

2022Reorganize East Japan area

Lack ofpersonnel- 2023

Consideration for theenvironment

●

●

●

●

●

2022
Rebuild Yume Plant*1
2023
Begin operation

Naturaldisasters

Solutions
Restructuringaccording to function▶

Progress and Plan for Reorganization of Production
and Logistics Bases- 2026

Processed food business

Promoting production
base reorganizationNewbusiness
Growing
markets

Rising costs

Main Initiativesof the integrated production line,” “DX-ready,” and“deployment of environmentally-friendly facilities,” as wellas concentrating production and logistics bases, we will
strengthen our competitiveness through cost reduction.

We have begun working on base reorganization for thefields of production and logistics which were leftoverissues for Plan 2020. By moving forward with plantreform to handle new business and reconstructing
old plants as next-generation with “the introduction

Change the organizational system from company units tofunctional units to maximize synergy creation
Build new plants and deploy new facilities to optimize theproduction system for each area

- 20302024
Centralize logistics
bases in the Kanto
area

2025Reorganize WestJapan area
(Expected)

2026
New Mishima Plant*2
Planned to becompleted

Strengthen cost competitiveness through increasing
automated lines
Handle risks such as lack of personnel through promotion of
DX in the manufacturing process
Pro-active introduction of environmentally-friendly facilities*1 Yume Plant will be rebuilt as a frozen foods manufacturing plant and will centralize theproduction functioning of Yonekyu Delica Foods Corp. Shizuoka Plant.
*2 Currently rebuilding the Kenko Plant in Mishima City, Shizuoka Prefecture as anext-generation ham and sausage plant.

Topic 2 Reorganization of Logistics Bases

Issues at Logistics Bases

p. 33 , 34

Creation ofsynergy

Optimizing business duties andstrengthening competitivenessthrough promotion of DX

Lack ofwarehouses

Expandingtransport area

Decay of
Logistics
Bases

2024
logistics
problemEnvironmental
considerations

Solutions

Reorganizing logistics bases
Kanto area logistics bases

As of FY2022

7 bases( linking with production
base reorganization)

15

Itoham Yonekyu Group Integrated Report 2023

SaitamaToward cost reduction and reduction of greenhouse gas emissions
by efficient use of warehouses and reduction in transport distances

IbarakiPlan to centralize downTokyo
Kanagawa
Chiba

Around 2024

to mainly

two bases

Intermittent execution in other areas depending on progress of production base reorganization

16

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Medium-term Management Plan◆

As a part of reorganizing the Kanto
area logistics bases, IH LOGISTISTICSSERVICE Co., Ltd. of the Group has
added a 2,281m 2 logistics warehouseas an annex in the Logiport Kitakashiwa
lot. It is planned to begin operation as a
new Group logistics base in June, 2024.

Creation and promotion of competitiveness for entire Group through restructuring

Groundbreaking ceremony at planned construction
site (June, 2023)◆

Image of completed logistics warehouse in Logiport
Kitakashiwa lot (planned to be completed in 2024)

Theme II: Initiatives for new businesses and markets

Since it is expected that there will be a worldwide lack ofanimal protein in the future, we are pursuing the possibilityof new protein sources, as the responsibility of a protein
supply maker. In FY2022, we participated in the industryTopic 1 Consortium for Future Innovation by Cultured Meat

Our Group established a “Consortium for Future Innovation
by Cultured Meat” in March, 2023, along with Osaka
University Graduate School of Engineering, SHIMADZUCORPORATION, Toppan Holdings Inc., and SIGMAXYZ
Holdings Inc. This consortium aims for “concrete
initiatives for social outfitting of edible cultured meat
manufacturing technology through 3D bioprinting,” andpromotes cooperation across corporate boundaries.
We are putting efforts into a display at Expo 2025, aninternational exposition in Japan (Osaka, Kansai Expo),
and other “information dissemination that leads to further
understanding in the public,” as we aim to achieve edible
cultured meat.

We are progressing with development of products which
use soy protein as a main ingredient. Supplying productswith the “fourth meat” after beef, pork, and chicken, weare selling the soy-based meat series “The Marude Oniku!”
which offers a fun choice and happy eating.

FY2023 Organizational System
Itoham Yonekyu Holdings

Processed
food

Meat

Sales

Meat

Meat

Production

Sales

Production*Brand names remain unchanged.

Sales

Production

Sales

Production

Sales

Production

Sales

Production

Effects expected from restructuring
Improved quality of marketing strategy

Acceleration of production basereorganization

Strengthening of buying power

Strengthening of governanceCentralized management of data

Optimal placement of personnel

Through execution of the initiatives in Plan 2023,
we achieved our highest ever profit in FY2021, thefirst year of the plan. However, in FY2022, various
costs rose, such as raw material prices, utility
costs, and logistics costs, and though we madeefforts to execute price reform and enhance internal
improvements, we were not able to absorb all of therising costs and we saw a decrease in profits. In the

The Marude Oniku!
Soy-based Meat – Ham Cutlets

final year of Plan 2023, FY2023, various costs are stillon the rise, so the results are predicted to fall below
the planned values.
Amid these conditions, in FY2023, we will
steadily execute the policies declared in Plan 2023,
worked on further enhancing internal improvements,
and re-establish this year as a step-up period forfurther leaps in the next term.

Ordinary income / ROIC movement

Establishment of promotion framework and KPIs
Affairs Department, was transferred to be under the
Corporate Strategy Department, a body directly governedby the President, so that sustainability initiatives would
have better links with management strategy. Based on thissystem, we will move forward with initiatives to achieve
KPIs established for seven materialities.
Sustainability basic policy

Itoham Yonekyu Group Integrated Report 2023

Currently

Plan 2023 Achievement Highlights

Theme III: Initiatives for Sustainability

In order to strengthen initiatives for our Groupʼssustainability issues, in 2021, we established Sustainability
Committee as a consulting body for the Board of Directors,
and in 2022, we newly established Sustainability Section
as a dedicated department for working on sustainability
issues. In April, 2023, the Sustainability Section, which
had been placed under the Administration Division General

FY2022 Organizational System

Processed foodProcessed
food

Topic 2 Development of Soy-based meat products

Yonekyu Holdings became a business holdings company.
In addition, Group companies have been restructured
according to function. We have flattened the organizational
system to clarify the report line and integrate all systems andregulations in the Group, such that rapid decision-making
and policy execution become possible, as we strengthen
our governance and our ability to handle diversifying market
needs with new social and environmental values.

Itoham Yonekyu Holdings

academia consortium regarding cultured meat. Moreover,
we performed our own research and development onplant-based foods, such as soy-based meat, and now
offer them as products.

Test product of cultured meat using 3D
bioprinting◆

In order to “strengthen management base,” which was oneof the core initiative policies in Plan 2023, we have moved
forward with transfers of organizational parts to move awayfrom conventional company units towards strategic segment
units. With the goals of building an organizational systemand business execution system with greater efficiency andcompetitiveness and linking that with maximization of synergy
and increased capacity for growth, in April, 2023, Itoham

Up until now

Research & development and sales for stable supply of protein

17

Theme IV: Strengthening of Management Base

Progress of Logistics Base Reorganization

▶

p. 27

FY2021

Ordinary income(hundred million yen)
Values below the decimal
point are rounded

FY2022*1

FY2023(expected)*2

Plan 2023(planned value)

Processed food business

125

60

75

167

Meat business

176

215

185

149

Other/Adjustment

－ 15

－ 14

－ 10

－ 16

Total

286

260

250

300

ROIC (%)

6.6

5.8

5.0

6.8

*1 Beginning in FY2022, segment sections were changed from product units to organizational units, and therefore, the values for FY2021 results were retroactively changed under the same conditions.
*2 Beginning in FY2023, some of the segment sections were changed in accordance with restructuring.

18

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Processed Food Business
FY 2 0 2 2 Results●●●

Management Message

With our customersʼ understanding, we executed product price revision on two
occasions. We strove to acquire profits by adjusting prices to absorb a portion of
costs, such as rising raw material prices and energy prices.

FY2022 Results and Issues

We reorganized the Itoham Yonekyu Plant Inc. and Itoham Yonekyu Foods Inc.
in order to integrate the production and procurement functions of Itoham and
Yonekyu, and strengthen cost competitiveness and profitability.
We restarted operation of the Yume Plant, which had been shut down. With the goalof strengthening cooked processed foods, we replaced the production facilities
and added a new manufacturing line for frozen foods, which are rising in demand.

Recognition of the Market Environment
In Japan, the total population has been decreasing since2008, and trends such as declining birthrate, an aging
society and smaller households are progressing. Along withadvancement of digital technology and ubiquity of SNS,individual lifestyles and value systems are diversifying, andconsumer needs and purchasing behaviors are rapidlychanging. Recently, while there is expectation for a return

Strengths●●●

to economic normalcy in terms of peopleʼs activity, goingoutdoors, and increased demand for tourism as we pivot to“post COVID-19,” there is increased desire to maintain oneʼs
lifestyle as prices are higher amid unstable global conditions.
Moreover, there are heightened social demands in the formof ESG and SDGs. We recognize, therefore, that even more
efficient business operation, with less environmental burden,
is required.

Opportunities

Long-standing brand strength andproduction technology capability forcontinually providing high quality, safe,
and secure products
Broad product lineup of ham, sausage,
and cooked processed foods, as wellas product development abilities andproposal ability to achieve such a lineup
Sales as well as both frozen andrefrigerated foods logistics network
through all sales channels to cover all
regions domestically

●

●

●

Risks

Expansion in new food product needs,
such as simplification of procurement,
health awareness, and environmental
concerns●●

Amid shrinking domestic population,
growing foreign markets andcontinuous boom in Japanese foodabroad●Information dissemination using digitaltechnology and DX, and growth of EC
markets●

Saturation of domestic market due to medium
to long-term domestic population decrease,declining birthrate and aging society
Lack of transparency in exchange rates, andrising raw materials prices and energy prices
due to unstable global conditions
Lack of personnel due to decreasing
workforce population

Sales trend

Meat(¥ billion)

19 %

Ham &
sausage361.3

Trend of ordinary income/ratio of ordinary income to net sales■ Ordinary income (¥ billion)

371.2

Ratio of ordinary income to net sales (%)

380.0

12.5

45 %

3.5

6.0
1.6

Processed food

36 %
19

Itoham Yonekyu Group Integrated Report 2023

2021

2022

2023

(Expected)

(FY)

2021

2022

7.5

2.0
2023

(Expected)

Koichi Ito
Director,
Managing Executive Officer
Senior General Manager COO– Processed Foods
Business Div.

FY2023 Strategies and Initiatives

Destabilization of livestock raw materials
procurement due to market fluctuations inaccordance with livestock disease trends,
etc.

Highlight
Sales ratio according to productcategory

In FY2022, our business had to operate in an evenmore severe external environment. Although businessdivisions came together to work on greater efficiency andoptimization, we were unable to absorb the increased
costs on our own, so we executed price revision on two
occasions, in March and October. It was a difficult decision
to make, though necessary to continue to deliver safe,
secure products to our customers, and we were able togain our customersʼ understanding in the process. In oneof the initiatives for achieving the goals of Medium-termManagement Plan 2023, we reorganized the subdivided
sales and production organizations according to function
to strengthen management and the earnings base. In
particular, with regards to production functionality, we began
operations of Itoham Yonekyu Plant Inc. and Itoham Yonekyu
Foods Inc. in April, 2023, and recommenced operations at
Yume Plant as a manufacturing plant for frozen foods, which
continue to grow in demand, while we plan to strengthen
cost competitiveness and profitability. Also, as an initiative
for sustainability, we established the “Aim for 80g of Protein
Intake Per Day!” with Meiji Co., Ltd., and Maruha Nichiro
Corporation. Through raising awareness of appropriate
protein intake in order to solve Japanʼs social problems oflow protein intake and malnutrition, we aim to achieve asociety in which all generations can live in health and securebody and mind.

We will pursue efforts seeking bothincrease in profit margin and increase insales towards our goals indicated in theMedium-term Management Plan.

(FY)*Starting in FY2022, the segment classification has switched from being by product and service to being by organization,and in accordance with that, FY2021 results are converted retroactively to values under the same conditions.
*Starting in FY2023, a portion of the segment classification will be converted in accordance with reorganization.
*Values less than hundred million were rounded.

In the production base reorganization we are pursuing tostrengthen our earnings base, we are rebuilding the current
Kenko Plant as a symbolic plant for the East Japan area, one
featuring the totality of Group knowledge and technology.
We plan for construction to be completed in 2026, and in
addition to an integrated production line and DX support,
the plant will be reborn as a next-generation ham andsausage plant which is environmentally-friendly and coexists
with the local society. Additionally, we are advancing withcentralization of logistics bases first in the Kanto area, amajor consumption region, as we move towards optimizationof our logistics system. In addition to establishing newlogistics bases by 2024, we will integrate logistics bases into
two, and we will achieve cost reduction and greenhouse gas
emission reduction through efficient use of warehouses andreduction of total transport distance.
As for initiatives for new businesses and markets, we
are working on expanding sales by adding new products,
such as our “Fan Meal” series in the growing frozen
foods market. We will continue to challenge ourselves in
new categories, such as plant-based foods and cultured
meat. Also, in order to increase sales in growing electroniccommerce (EC) channels, we have placed a division for
promoting EC sales starting in FY2023, and will continue
strengthening our efforts. In foreign markets, we are actively
using Group companies in China and Thailand to enhancesales in the Asian market, as we work on expanding ourbusiness areas to American and southeast Asian markets.
Additionally, we are devoting energy into export and sales of
products manufactured domestically in Japan, starting with
export of “Hokkaido Ramen”, manufactured by KIKUSUI
Co., Ltd., a Group company, in 2023.
In addition to strengthening competitiveness by
pursuing these cost reductions and optimizations andpromoting new value creation as a unified body, we will
execute another price revision in October, 2023, following
the price revision in April. We are sharpening our systems
and organizational capacity to properly handle increasingly
uncertain external conditions and wildly changing consumer
needs, as we move forward continuing to deliver high quality,
safe, and secure products to our customers.

20

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information[Processed Food Business] Initiatives in Reorganization of Production Bases

Reorganization of Production Bases
using Perspectives and Strategies
Optimized the Whole Group2

Toyohashi Plant

F

1

E

Produces half bacon (sliced pack) with top production volume in the Group● Produces ham, sausage, and bacon, as well as drycured ham, dry sausage, chicken for salads, etc.

●●

Nishinomiya Plant

F

F

F

FSSC22000:
Obtained certification of international standards regarding
food safety management systems

E

EcoAction 21:
Obtained certification of Japan’s own environmental management system (EMS) formulated by the
Ministry of the Environment

1

E

2

E

Tohoku Plant

F

E

Features an expansive lot roughly the size of seven Tokyo Domes
Ships ham, sausage, and bacon to the Tohoku area
● Ships cooked processed products to the whole country as a primaryplant for such products●

Rokko Plant

F

4

E

(formerly Tokyo Plant)

F

E

Features multiple continuous lines, as a large-scale
primary plant boasting top-class production volume in theGroup● Produces a multitude of primary products like ham andsausage

Reorganization ofWestern Japan Area
Established April, 2023

F

Established April, 2023

Location Nishinomiya City, Hyogo Prefecture
Business Manufacture of meat processed products,
cooked processed products, general side dishes

E

Produces a variety of cooked processed products(pizzas, chicken nuggets, fried products, stew pies,
ground meat cutlets)● Achieves high quality and efficiency with many products produced using a linear continuous line●

3

Toride Plant

F

E

Integrated production line starting from dough for
pizza snacks as primary products● Characterized by a linear line with emphasis on quality and efficiency● The tour route which allows viewing from above ishighly praised during plant tours●

Reorganization ofEasten Japan Area

Itoham Yonekyu Foods Inc.

Kobe Plant

Kashiwa Plant●

Produces skinless sausage used in cooked bread
Produces roast beef, barbeque pork, and ham prepared using vacuum-cooking methods● Roast beef which uses wagyu beef is highly prized asa giftItoham Yonekyu Plant Inc.
Location Kashiwa City, Chiba Prefecture
Business Manufacture of meat processed products,
cooked processed products, general side dishes

Itoham Yonekyu Foods Inc. corporate site (Japanese only)

Itoham Yonekyu Plant Inc. corporate site (Japanese only)

5

Fuji Plant

F

Produces deli products like meat dumplings, hamburger steaks, roast beef, etc.
● Plans to obtain EcoAction 21 Certification in 2023●

Itoham Yonekyu Plant Eco-Project Center (Fujinomiya City, Shizuoka Prefecture)

Kyushu Plant

F

Within the production base at the Itoham Yonekyu Plant Inc., primarily, emitted foodprocessing residue is processed as a main raw ingredient in compost (Compost Power). The
compost is used in lawn management at contracted farm and sports facilities in Shizuoka
Prefecture, contributing to a circular society.

E

Core plant for cooked processed foods. Produces
hamburger steaks, meatballs, pork cutlets, etc.
● Produces various cooked processed products
which are delicious and ready for eating after
simple preparation●

7

Towards a next-generation ham and sausage plant as the new Mishima Plant

Kenko Plant

F

Began operation in 1968 in an area surrounded by therich nature of the national park on the outskirts of Mt. Fuji
● Mainly produces skinless sausages and IQF products● Also produces products that meet unsalted standards●*IQF (Individual Quick Frozen): a method of flash freezing

21

E

●

●

6

F

●

●

●

5

Otaru Plant

Operates in the “Ishikari Bay New Port Region,” the largest
industrial zone in the Sapporo area
● Produces products supplied to the Hokkaido area
● Manufactures special products like dry-cured ham, salami,
and dry sausage, in addition to ham, sausage and bacon●

Production base with highest tier of production capacity in the Group
Core plant that produces ham, sausage, and bacon

4

conjunction with that, we reorganized into two manufacturing
companies, for the Westen Japan and Eastern Japan
areas, in April, 2023. Moving forward, we will build systems
optimized for each area, including further integration of sales
offices and reorganization of logistics bases.

Primarily produces products for business duties
Efforts especially devoted to production of IQF* products● Produces ham, sausage, and bacon, as well as the IQF series, terrine, etc.

●

3

Hokuriku Plant

As a concrete initiative for “strengthening earnings base,”
one of the themes for the processed food business in
the Medium-term Management Plan, we have declaredthat we will reorganize production bases with the goal ofstrengthening cost competitiveness and profitability. In

Itoham Yonekyu Group Integrated Report 2023

Commenced rebuilding as a plant symbolic of the East Japan area. Plans for completion in 2026.
Of the 50 billion yen invested in plant reorganization, 20 billion yen is planned to be used in rebuilding of
the Mishima Plant
To be reborn as a high efficiency plant featuring DX-supported production facilities that use AI andIoT as well as an integrated production line that requires fewer operaters
Proactively including environmentally-friendly facilities with energy conservation strategies andreduction in greenhouse gas emissions
Aims to achieve coexistence with the local society as a place for food education activities such as
plant tours and hands-on classes

●

●

6

Yume Plant

Plant with a history of beginning operation as a plant
for manufacturing processed foods (ham, sausage,
roast beef, etc.)● In June, 2023, resumed operation as a manufacturing plant for cooked processed products specialized
for frozen foods to handle the growing frozen foods
market● Plans to obtain FSSC22000 Certification in 2023
●

●

22

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Meat Business
FY 2 0 2 2 Results●●●

Management Message

ANZCO FOODS saw a large increase in profits driven by internal structural reformand rising global meat prices. Achieved record high profits three years runningand led the overall meat business.

FY2022 Results and Issues

Commenced large-scale facility investment, such as new bovine processing facilities. Aiming for expansion and optimization of production business, we moved
forward with enlargement of production / processing margin and high added value in the form of in-house products.
ANZCO FOODS achieved acquired of Australian healthcare business.

Recognition of the Market Environment
Amid a severe operating environment, including rising pricesof raw materials and energy, global disorder of container
logistics, and cost increases due to chronic lack of personnel,
Japan saw COVID-19 transition into Class 5, and as the flowof people starts to recover due to relaxation of movement
restrictions, we can see signs of recovery, such as moreinterest in dining out. Additionally, in meat production, issues

Strengths
●

●

●

●

such as animal welfare and reduction of greenhouse gas
emmissions remain, but we are moving forward with activities
to solve these issues, and we are aware that contributing toachievement of a healthy and rich society by strengthening
initiatives for sustainability is a crucial responsibility of thisbusiness division.

Opportunities

Balanced business portfolio andbroad product lineup due to businessdevelopments domestically andoverseas●●

Strong sales to final consumer using
sales networks extending across all ofJapan
Procurement abroad with in-house
import as the main means

Risks

Heightened needs for cultured meat
and alternative meat due to increase inglobal population●

Greater demand for unheatedprocessed meat products inaccordance with changes in the needsof consumers and customers, such aslack of personnel and lifestyle changes

●

●

●

Stable profitability in overseas business●

Saturation of domestic market due to medium
to long-term domestic population decrease,declining birthrate and aging society
Influence of livestock disease and climatechange on production business
Unstable meat procurement due to increased
demand for food in accordance with global
population increase
Lack of personnel due to decreasing workforce population
Decrease in farms due to lack of successors,
etc.

Highlight
Sales ratio according to productcategory
Other

19 %

Sales trend(¥ billion)

Beef

488.9

547.1

Trend of ordinary income/ratio of ordinary income to net sales■ Ordinary income (¥ billion)

550.0

Ratio of ordinary income to net sales (%)

21.5

41 %
Poultry

12 %

Pork

28 %
23

Itoham Yonekyu Group Integrated Report 2023

18.5

17.6

2021

2022

2023

(Expected)

(FY)

3.6

3.9

2021

2022

3.4

2023

(Expected)(FY)*Starting in FY2022, the segment classification has switched from being by product and service to being by organization,and in accordance with that, FY2021 results are converted retroactively to values under the same conditions.
*Starting in FY2023, a portion of the segment classification will be converted in accordance with reorganization.
*Values less than hundred million were rounded.

Domestically, quantity of sales decreased due to procurement
prices for imported meat remaining high, but the monetary
value of sales increased due to increase in sale price across all
domestic business, and recovery of sales for customers diningout due to relaxation of movement restrictions. As for profit, we
saw a decrease, as the purchase price increases for imported
poultry and imported beef were not reflected in sales prices.
Overseas, in addition to ANZCO FOODS moving forward withinternal structural reform and raising core profitability, there wasstrong demand for meat in America, etc., as well as increased
sales prices, such that sales and profits both rose, and ANZCOFOODS achieved record high profits for three years running.
As for initiatives for new businesses, ANZCO FOODS acquired
an Australian healthcare business, establishing a new pillar ofincome by expanding into an adjacent business field with ahigh affinity for our existing businesses.
Additionally, as an initiative for sustainability at Itoham
Yonekyu Group, we formulated the policy in which “wewill no longer use the gestation stall method when newly
constructing or reconstructing gestation stalls for pregnant
sow, instead adopting a group feeding or free stall method”
in accordance with the “Animal Welfare Policy” formulated
by our Group. Striving to improve animal welfare throughanimal raising management that considers the comfort of the
livestock and continuing to move forward with production andprocurement activities that respects life is a core responsibility
for us. Additionally, we are working on reducing burden on theenvironment, for example, by reducing coal usage by loweringboiler heat at the main plants of ANZCO FOODS.

FY2023 Strategies and Initiatives
As a means to strengthen our earnings base, we are executing
large-scale facility investment, and SANKYOMEAT INC. hasbegun operation of its Isa Meat Plant in April, 2023, in addition
to its Ariake and Kirishima plants. New bovine processing andcutting areas have been set up in the IH Meat Packer Towada
Meat Plant, with operation planned to begin in March, 2024.
This will help us increase the number of processed cows.
Additionally, at our currently operating facilities, we plan toincrease the number of processed pigs by specializing for pork
processing. Thus, we will expand southern Kyushu businesscentered around SANKYOMEAT INC., while simultaneously
strengthening upstream businesses using the Towada Meat
Plant as a base, even for Eastern Japan. Having multiple corebases in remote regions is important from the perspective ofdefraying the risks of illness and natural disasters. Currently,
SANKYOMEAT INC. has one of Japanʼs largest-scale export
processing facilities, with permission to export to 48 countries
and regions around the world.
A new beef packaging center is commencing
operation in August, 2023, and along with advancing

Reorganize to an efficient, flat system.
With the new system, we will enhance thecompetitiveness of the whole Group, andmaximize synergy.

Akihisa Horiuchi
Managing Executive Officer
Senior General Manager
COO – Meat Business Div.

product developments such as skin packaging (refrigerated),
and individually-divided chilled exports to meet customer
needs, we are utilizing the sales network of ANZCOFOODS, which ships beef and lamb to over 80 countries
and regions, to expand sales routes abroad. Additionally,
we are devoting efforts to develop of products that meetcustomer needs of convenience and utility, by expanding
sales of brand meats, and creating unheated meatproducts by increasing the amount of meat processing,achieving new added value.
Furthermore, through participation in the “Consortiumfor Future Innovation by Cultured Meat,” which aims
to make cultured meat suitable as food, we are moving
forward with solutions to environmental and foodproblems, and contributing to future food proposals. At
the same time, we are planning to formulate animal welfare
guidelines that are uniform for the whole Group, and holdanimal welfare training sessions for farm employees. We
will progress with management unified for manufactureand sales, and optimized for the meat value chain, while
simultaneously fulfilling our social responsibility throughbusiness, as we create means that can continually create
income, contribute to society, and maximize Group value.
24Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information[Meat Business] Foreign Business Strategy

Bases of ANZCO FOODSBusiness base
Sales base

UK
EuropeJapan
Shanghai

Percentage of overseas sales byregionCreating Group Synergy withANZCO FOODS, the Pillar of
Our Overseas Meat Business

Asia

4.8 %

3.8 %
3.8 %
Europe 2.1 %North America

Composition of sales by business
Other (non-food)

12 %Oceania

FY2022
Consolidated
Full Year
Percentage ofoverseas sales

Other

14.8 %
Japan

Meat

78 %
Australia

0.3 %Processed
food

10 %

FY2022 ANZCOFOODS Sales

1.98

ANZCO FOODSNew Zealand (HQ)

billion NZ$

85.2 %

Globally Expanding Overseas Meat Business

Strategies Advanced by the Overseas Meat BusinessInitiatives for Core Businesses of ANZCO FOODS

Overseas sales for our Group in FY2022 made up
14.8% of sales for the entire Group, and ANZCO FOODS(headquartered in New Zealand), the core of the overseas
meat business, processes, manufactures, and sells beef
and lamb, as well as engages in manufacture and saleof processed beef products and healthcare products.
Additionally, ITOHAM AMERICA, in the USA, procures,
exports, and sells pork, while also selling wagyu beef inNorth America, whereas INDIANA PACKERS, also in theUSA, processes, produces, and sells pork, while also
producing and selling processed pork products, as weengage in global business developments.

In order to “strengthen our earnings base,” one of thecore initiative themes in our Medium-term Management
Plan 2023, we have declared “increasing earnings of
ANZCO FOODS” and “enhancing wagyu beef export” asgoals, and along with internal structural reform at ANZCOFOODS, we have been working on increasing sales of
wagyu beef by utilizing ANZCO FOODS sales bases and
ITOHAM AMERICA. One more core initiative theme is“initiatives for new businesses and markets,” for which
we declared “stable supply of protein” as a goal, andalong with strengthening procurement of brand meat fromforeign packers, we moved forward with strengthening ourhealthcare business.

The meat business, ANZCO FOODSʼ core business,
constitutes about 80% of total sales, and maintains sevenmeat processing plants in New Zealand, as well as the only
large-scale cattle feedlot in New Zealand. Additionally, italso manufactures processed beef products such as beef
patties for use in fast food and beef jerky.
In the healthcare business, in FY2022, ANZCOFOODS acquired Moregate Biotech, planning to enlarge
their share of bovine blood formulations, their main
products. These products are used in the manufacture of
vaccines, regenerative medicine, and clinical diagnosis,
and are expected to maintain marketability in the future.

Initiatives for Creating Group Synergy
Overview of ANZCO FOODS
Corporate site

Location:
Christchurch, southeast New
Zealand (NZ)● 

Annual livestock processing:
Meat cows 150,000, dairy cows
290,000, lambs 2.2 million● 

Meat processing plants:
Seven plants in New Zealand (allare Halal-certified)● 

Export destinations:
China, North America, Japan,
Europe, etc.

History of ANZCO FOODS
1984
1989

●
●

Five Star Beefʼs feedlot established
Itoham invests in Five Star Beefʼs feedlot (commenced operation in 1991) withthe aim of acquiring high-quality grain-fed beef for Japan (ANZCO FOODS 50%,
Itoham 50%)

1995

Itoham invests in ANZCO FOODS (48%), becoming a shareholder, with the aim ofincreasing sales of New Zealand-produced beef and lamb in Japan2010

Itoham centralizes its production bases for foreign grain-fed beef in New Zealand

2015

Itoham increases investment, making ANZCO FOODS a subsidiary (65%), with theaim of increasing foreign production and sales in foreign markets

2017

In order to strengthen foreign business and work on increasing global demand formeat, Itoham makes ANZCO FOODS a 100% wholly-owned subsidiary company,
and plans to strengthen governance through chairperson dispatch

2022

ANZCO FOODS acquires Moregate Biotechʼs blood products business, andstrengthens ANZCO FOODSʼ healthcare business

● 

25

Asian New Zealand Meat Company (ANZCO) established
Sale of New Zealand-produced beef and lamb begun in Japan

Itoham Yonekyu Group Integrated Report 2023

From 2019 through 2020, by 1) increasing the efficiency
through reorganizing, 2) revising their business processes,and 3) centralizing operational resources into their corebusinesses, ANZCO FOODS established a solid earningsfocused business model and turned around their large
deficit of FY2018. Then, in FY2021 and FY2022, they saw
record high profits for two years running.
Our Group is working in concert with ANZCO FOODS
subsidiary ANZCO Japan to increase sale of products andestablish a brand in Japan. We are also creating Groupsynergy by utilizing ANZCO FOODS foreign businessoffices to sell wagyu beef produced at Group exportcertified plants, etc.

Initiatives for Sustainability in
Environmentally Developed Country
ANZCO FOODS is moving steadily forward withsustainability initiatives, formulating a three-year planfor climate change and sustainability in 2020. ANZCOFOODS plans to review the strategy for the following three
years during 2023.

Toward Reduction of Environmental Burden
ANZCO FOODS has declared reduction in greenhousegas emissions as one of their goals, and they continue
with initiatives that give consideration to reduction ofenvironmental burden. As an example, they replaced acoal boiler with an electric boiler at their Kokiri Plant, anddeployed a heat-pump system that generates hot waterusing excess heat in their Canterbury Plant. Additionally,at their Five Star Beef feedlot, they set up a pilot plant for
converting waste products into bio-energy. Also, in an effort
to reduce emissions due to livestock, which constitutes
a significant part of ANZCO FOODSʼ greenhouse gas
emissions, they have engaged in joint research with aresearch organization and have tentatively introduced anatural feed supplement. Furthermore, they have placedemphasis on optimizing water usage at their plants, greatly
reducing amount of water used. Lastly, at MarlboroughPlant, they have installed solar panels, and are reviewing
the effect to see if they can be deployed at other plants.
Health and Wellness of Employees and Concern
for the Region
ANZCO FOODS works to maintain the health and wellnessof its employees, and a safe working environment, while
also continuing to invest in safety improvements. ANZCOFOODSʼ processing plants span all of New Zealand,
contributing to more jobs in each region, and we believethat it is important to give consideration to diversity inthe workplace and prepare the workplace environment,such that various different ethnic groups, and people withdifferent experiences and cultures can mutually respect
one another and work as employees. Also, ANZCOFOODS works in close cooperation with the farmers,
to ensure continued raising management that shows
consideration for the animalʼs welfare.

26

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Basic Stance on Sustainability
Basic Stance on Sustainability

The Itoham Yonekyu Group will contribute towards the realizationof a sustainable future based on the Group Philosophy.

Management Message

Group Philosophy

Contribute to the realization of sound and affluent society through business

The Sustainability Committee plays a central rolein further strengthening the link between businessstrategy and sustainability.

Sustainability Management System

Hajime Ogawa
Director, Managing Executive Officer
Chief Compliance Officer
Chairperson of
Sustainability Committee

27

Itoham Yonekyu Group Integrated Report 2023

Our Group had a challenging year
in terms of profitability. This was
because production costs rosedue to the depreciation of the yen
and cost increases that outpaced
productivity improvements, while
consumersʼ purchasing power did
not improve as prices rose fasterthan wage and salary increases
granted by many companies withgovernment support. Meanwhile, assustainability is becoming a hotter
topic at an accelerating pace eachyear, companies are increasingly
being required to be proactive,
rather than reactive, in responding tovarious social demands. Under thesecircumstances, the Sustainability
Committee, an advisory body to theBoard of Directors, takes initiatives
within our Group. In FY2022, theSustainability Committee held a totalof seven meetings. At each meeting,all seven members, consisting ofrepresentatives from each businessdivision and external experts,
engaged in lively discussions (averagetime: 1 hour 34 minutes per meeting).
Specifically, we examined various issues
related to sustainability initiatives thatare material to our Group, such as
greenhouse gas emissions reduction,
human rights due diligence and animal
welfare. The Committee also reviewed
the FY2022 results for the sevenmaterialities identified two years ago,and discussed and confirmed thepolicy for FY2023 activities. As we
flexibly adapt the KPIs and issues
to be addressed to changing social
conditions, I appreciate the rich andconstructive discussion we have had.
What is discussed at the Sustainability
Committee meetings is also discussed
at the Executive Committee and Boardof Directors meetings and shared with
the Sustainability Promotion Officers,
who are responsible for day-to-day
operations. It is also disseminated toa wide range of employees throughcompany newsletters and the intranet.
In April 2022, the Sustainability
Section was established within
the General Affairs Department
as a specialized organization tocarry out sustainability activities.
In April 2023, this section wastransferred to the Corporate Strategy
Department, which reports directly
to the President. This will help propelsustainability forward in furtheralignment with corporate strategy.
Although the business environment
is likely to remain uncertain, we will
enhance communication with our
stakeholders so that we can steadily
and continuously pursue our initiatives
to manage our business in a way that
ensures both social and businesssustainability.

In April 2021, we established the Sustainability Committee
as a advisory body for the Board of Directors. It is chairedby the Director, Managing Executive Officer and Senior
General Manager COO of the Administration Division(who are all the same person), and its members consist ofrepresentatives from each division and external experts. In
FY2022, they held ongoing discussions on management
issues related to sustainability, considering societal
demands including international trends and initiatives.
We have also appointed a Sustainability Promotion
Officer in each division and related department incorporate administration area to inform each business
unit of the decision made by the Sustainability Committee,
verify the actions taken, monitor progress, and share theactivities of each department. This system is designed
to accelerate sustainability initiatives throughout thecompany.

Board of Directors
Recommendations andProposals

Sustainability Committee

Sustainability Promotion Officer

Cooperation

RelatedDivisionsSustainability
SectionBusiness
Divisions

Stakeholder Engagement
Stakeholder
Customer
Local Society
Shareholders andInvestors

Opportunity/Means
●
●

●
●

●
●

Customer support office ● Consumer monitoring surveys ● Promotion through various events, campaign, and sales at stores
Information distribution and communication through website and social networks
Environmental preservation activities ● Dietary education activities ● Community activity through sports
Reconstruction assistance activities for the disaster-affected areas
General meeting of shareholders ● Various briefings (financial results briefings for investors, business briefings, etc.)
Facility tours for investors ● Information disclosure on website, etc. ● Individual meetings with investors

Cooperation in business operations, cooperation in quality, safety, legal compliance through factory audits, etc.
Business meeting (new product briefing) ● Communication through discussions and business meetings● Dissemination of our policies on human rights, procurement, environment, animal welfare, etc., and surveys on suppliers for those matters.
● Establishment of consortium●

Suppliers andBusiness Partners●

In-house notifications and presentations about the Medium-term Management Plan, etc.
Employee awareness surveys and compliance surveys ● Career counseling, individual interview● Internal and external reporting systems ● Roundtable meetings between management and employees● Dialogue with the labor union●

Employees●

Comprehensive links and agreements with local governments ● Dialogue with industry groups and periodic information exchange
Participation of and collaboration with external research events and industry groups● Dialogue with NGOs and NPOs, including civic groups

Industry andGovernment
Organizations●

Global Environment●●

Forest preservation activities and volunteer nature preservation activities ● Efforts in reducing environmental impact

28

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Progress on Our Materialities
We identified seven materialities for our Group in FY2021.
In FY2022, we set key performance indicators (KPI), or targets, for them, which we have been tackling.
Materiality

Selection process for materiality

1

Formulating
Basic Policy on Sustainability

Realizing healthy
and affluent diet

Formulated with consideration to advice
from outside experts and social demands.

2
Extracting social issues

Considering theenvironment

Extracted items based on "ISO26000," the"GRI Guidelines," and business strategies suchas "Medium-term Management Plan 2023."

Sustainability Committee

3
Evaluating significanceCreating aworkplace where
each employee canactively participate

Matrix mapping of various social issues
from the perspective of their significance forstakeholders and our Group.

4
Extraction of initiative items

Promotingsustainableprocurement andstable supply

Basic Policy

Action plan

Offering safe, secure, and high-quality products
and services that will satisfy customers is our
top priority. Furthermore, we will continue toprovide products and services that meet theneeds of diverse lifestyles and communities,
focusing on health-conscious meals, convenientmeals, and reduction of food loss.

Supply of quality protein
Product development andsupply of health value in
response to diverse lifestyles● Expansion of product that
leads to reduction in food loss

We recognize that our business has a close
connection to the earthʼs environment, andwe are moving forward with initiatives thatare considerate of biodiversity, while we workon reducing environmental burden, througheffective use of resources and reduction ingreenhouse gas emissions.

Dialogue with experts
Discussion and exchange of opinions withexperts and outside stakeholder.

6

Contributing tolocal communities

Strengthening
corporate
governance

Board of Directors

Meeting of
the Board of Directors

Disclosure upon decision by the Board of
Director.

Pursuit ofuncompromisingflavor and highquality

Reducing greenhouse gas
emissions● Reducing the consumption ofenergy and water● Reducing waste emissions● Preserving biodiversity● Reducing the amount ofplastic used

Greenhouse Gas Emissions (CO2 equivalent) *1
50% reduction from the FY2016 level by FY2030, net
zero by 2050 (FY2016: 375,982t ⇒ FY2021: 368,127t⇒FY2030: 187,991t)●

Energy and Service Water Use (Per Unit) *1
1% reduction each year, 3% reduction over 3 years,
from the FY2021 levels
Waste Emissions (Per Unit) *1
1% reduction each year, 3% reduction over 3 years,
from the FY2021 levels

Greenhouse gas emissions(CO2 equivalent)
368,127t
Energy use (Per unit)
9.80GJ/t
Water use (Per unit)
17.6 ㎥ /t
Waste emissions (Per unit)
94.2 ㎏ /t

Greenhouse gas emissions(CO2 equivalent)
367,276t
Energy use (Per unit)
9.75 GJ/t
Water use (Per unit)
16.9 ㎥ /t
Waste emissions (Per unit)
90.9 kg/t●

Personnel development andtraining● Respecting diversity● Promoting a healthy work-lifebalance● Occupational health andsafety, health management,
and the respect of humanrightsNumber of participants in training (yearly)
FY2023 14,000
Percentage of women in management positions
FY2030 10%
Percentage of women in chief positions
FY2030 20％
Paid leave usage rate (per capita per year)
FY2025 70%

Number of participants intraining (yearly)
13,389Percentage of women in
management positions
4.5％
Percentage of women in chief positions
11.0％
Paid leave usage rate (per capita per year)
62.8％

Number of participants intraining (yearly)
13,942
Percentage of women in
management positions
5.4％
Percentage of women in chief positions
11.5％
Paid leave usage rate (per capita per year)
69.7％

We are building a sustainable supply chain,
as we aim to resolve social issues, such as
respect for human rights and animal welfare, bycooperating with all of our business partners,
starting with the livestock industry.

●

Contributing towards asustainable livestock industry● Promoting procurement that
respects human rights● Animal welfare considerations

Animal waste recycling rate
Maintain 100%
Sales of healthcare business
FY2025 AUD 105 million
Supplier survey coverage rate
Ensure that the amount procured from the surveyed
suppliers represents 80% of the total procurement value
Elimination of gestation stalls (for swine)
When building or rebuilding pregnant sow gestation
stalls, eliminate gestation stalls and adopt loose
housing system to keep a sow or a group of sows.

Animal waste recycling rate
100%
Sales of healthcare business
AUD 34 million
Supplier survey coverage rate—
Elimination of gestation stalls(for swine)
No pregnant sow gestation stalls
were built or rebuilt.

Animal waste recycling rate
100%
Sales of healthcare business
AUD 54 million
Supplier survey coverage rate
155 suppliers were surveyed.
Elimination of gestation stalls(for swine)
No pregnant sow gestation stalls
were built or rebuilt.

As a member of the local society and asa conscientious corporate citizen, weare moving forward with initiatives thatemphasize “coexistence with society” throughconsideration of the earthʼs environment, safety
and health, and job creation.

●

We are aiming for sustainable growth andmedium- to long-term improvements to our
corporate value, and we will build an optimal
governance structure based on our basic
stance on corporate governance●

Number of sites certified by a third party for foodsafety *2
FY2023 All the production facilities in Japan (45facilities) should be certified.

Completed certification of 42
facilities.

Completed certification of 44
facilities.

By protecting our inherited technologies
and history, we look to provide products andservices that can be enjoyed by all customers.

Selecting 7 materiality issues

Itoham Yonekyu Group Integrated Report 2023

FY2022 Results

We respect a wide variety of value systems
and work styles, and we ensure a working
environment that enables every employee
to work safely, as they support our businessactivities. We cultivate an atmosphere thatseeks continuous growth for both employees
and the corporation.

*1 Each environmental data has been carefully reviewed and updated to the latest version.
*2 After reviewing the materiality initiatives, “Safe and reliable supply of food” has been redefined as “Pursuit of29

FY2021 Results●

Along with mapping, classified the issues andextracted action plan.

5

KPIs

●

Promoting environmental
conservation andbeautification activities● Revitalizing local communities●

Promoting compliance
Risk management

Safe and reliable supply of food*2
Developing human resourcesthat can continue to create
new value● Passing on the foundersʼ ideal
and the technologies that havebeen cultivated over years● Developing and improving
products based on customersʼ
feedback●●

uncompromising flavor and high quality” (KPI for the number of sites certified by a third party for food safety has been also transferred).

30

Value Creation Story

Responding to Climate Change

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Related Materiality

Concern for theenvironment

Indexes and Targets

TCFD Analysis
The Itoham Yonekyu Group is aware that maintaining the earthʼs environment is a most critical issue, shared by theentire world, and we take the environment into account in our business activities, as we declare that actively working toachieve a sustainable society is our environmental philosophy. In particular, we recognize that responding to the risks andopportunities related to climate change is an important management issue.
We support the TCFD (Task Force on Climate-related Financial Disclosures), and are progressing with information
disclosure based on TCFD Recommendations, as we also support the Japan Climate Initiative (JCI).

Aiming to solve climate change issues with a consolidated
base, our Group has formulated targets of halving Groupgreenhouse gas emissions (Scope 1, 2) by 2030 (comparedto FY2016), and achieving net zero emissions by 2050,
and we are moving forward with initiatives to achieve thesetargets.

Additionally, in order to decarbonize across the entire
value chain, we have calculated Scope 3 emissions for
our Group, and are evaluating initiatives in categories withparticularly high emissions. Details on “Scope 3 emissions
results” are available on our company website.
Supply chain emissions (Scope 3) (Japanese only)

GovernanceRegarding our companyʼs basic policy and strategies forclimate change, establishment of KPI, and monitoringof progress, we discuss or report these at the Board of
Directors meeting, after passing them through discussions
at the Sustainability Committee, which is an advisory
body for the Board of Directors. The Director, Managing

Executive Officer and Senior General Manager COO of
the Administration Division (who are all the same person)
serves as the chairperson of the Sustainability Committee,
with managers responsible for each business division andoutside experts making up the members, such that weachieve a system where we can get outside opinion as well.
Sustainability Management System

Strategy
The Group is aware that it may receive a variety of
influences due to climate change. In these circumstances,regardless of the potential for occurrence, we are
hypothesizing every scenario in order to understand therisks and opportunities for our companyʼs business. And
believing that examining measures taken for those risks
and opportunities is the way to raise sustainability of ourcompanyʼs business, in FY2021 we commenced analysis
in accordance with TCFD Recommendations. The resultsof the quantitative and qualitative analysis (performed in
FY2022) of the risks and opportunities likely to have a▶

Transition risks

Transition
opportunity

Influence on BusinessBusiness under Analysis
for FY2022

large influence on our company business are as follows.
TCFD Recommendation Initiatives (Japanese only)

These analyses were discussed by Senior General
Managers of the Processed Food business, Meat business,
and General Manager of the business strategy, before
the results of these analyses were discussed by the
Sustainability Committee and reported to the Board of
Directors. The results of the analyses are interwoven into
our business strategy, including our companyʼs Mediumterm Management Plan, meant to advance future decisions.

Cost increases due tocarbon pricing

Processed Food business
Meat business

TermMonetary
Amount Affected

Short, mid, longLess than 15.0
billion yen

Measure⇒ Refer to “Initiatives to Reduce
Greenhouse Gas Emissions”▶

Increased demand forplant-based protein due todemand shifting to ethicalconsumption

Processed Food business*

Mid, long

5.0 billion yen-lessthan10.0 billion
yen

▶

●

Processed Food business*

Mid, long―

Rising price of animal feed
due to climate change

Meat business*

Mid, longLess than 5.0
billion yen

p. 17

Greater array of plant-based protein
products▶

●

Physical risk

p. 32

Greater array of plant-based protein
products● Research and development on cultured
meat●

Reduced demand forlivestock products due todemand shifting to ethicalconsumption（ t-CO 2 ）400,000

300,000

376,252

181,719

379,030

165,037

368,127

367,276

160,834

160,313p. 17(compared to FY2016)

200,000

100,000

194,533

213,993

207,2930

2016(Base year)

2020

2021

Our Group has formulated a roadmap to achieve targetsof greenhouse gas emission reduction and is steadily
achieving reductions, while we are also preparing aninternal system to accelarate further reduction. As specificexamples of reduction initiatives, we are evaluating
installation of solar power facilities, introduction ofefficient, energy-conserving facilities in manufacturingbases, and switching to renewable energy power.
In FY2022, in addition to deploying cogeneration
facilities at the Nishinomiya Plant, we updated a total of
120 refrigerator / freezer units in the Tokyo Plant, Tohoku
Plant, and other plants. Furthermore, we began an
initiative for reducing emissions derived from livestock,which constitutes roughly 15% of the Groupʼs greenhousegas emissions, contributing to solving an issue for all of
livestock production through this initiative.

Risk Management

31

Itoham Yonekyu Group Integrated Report 2023

Risk management (Japanese only)

188,1262022

2030 (target)

2050 (target)(FY)

Initiatives to Reduce Greenhouse Gas Emissions

Using food waste in animal feed,
switching to varieties that are more
effective as animal feed, and evaluating
research and development insupplements

integrated into company-wide processes, so those risks
are combined with other management risks and managed
together. Details on “Company-wide risk management
processes” are available on our company website.

206,963

Net zero*All of the risks exert an influence on both the Processed Food business and the Meat business, but for 2022, we performed the analysis focusing only on the most affected business.

Regarding risks related to climate change, we utilize amethod for establishing scenarios to analyze and evaluate
risks. We evaluate risks annually in the Sustainability
Committee and discuss any necessary response
measures. The results of the analysis and evaluation are* Included in calculation: Itoham Yonekyu Holdings Inc. /subsidiary companies (100% of subsidiary company
emissions are included in the calculation)* All the data has been carefully investigated and updated
in this latest report.
■ Scope1 ■ Scope2

Halvedp. 28

Risks and Opportunities Related to Climate Change
Risk /
Opportunity

Trends and Reduction Targets in Greenhouse Gas Emissions (Scope 1, 2)

Cogeneration system
deployed at the Itoham
Yonekyu Foodsʼ Nishinomiya
PlantBusiness for Building a Greenhouse Gas
Emissions Reduction Transparency System in
Beef Cattle Production
Through Mirai Farm Co., Ltd., a cooperative farm of ourcompanyʼs wagyu beef production business, our Group
cooperates with the “Business of Building a System for
Visualization of Reduction in Greenhouse Gases in Cattle
Production,” which is run jointly by the Japan Cattle Industry
Cooperative and Tokyo University of Agriculture. The goalof this business is to create a means of expressing thedirectionality of greenhouse gas emission response by
beef cattle producers by scientifically assessing the actual
situation of greenhouse gas reduction in well-developed
initiatives, such as 1) supplying feed that reduces methanegas contained in cow burps, and 2) promoting early aerobic
fermentation of excrement, and making that actual situationtransparent.
Our company, starting in June 2021, has been using
cashew nut shell liquid (Ruminap®*), which is derived fromnatural materials and reduces methane gas containedin cow burps, in feed for a portion of the Japanese black
breed raised at Mirai Farm Co., Ltd., such that we bring thatexperience to this business cooperation. By cooperatingwith verification testing of the efficacy of this animal feed,
we will contribute to wider methane reduction in cow burps,
strive to reduce environmental burden as a corporation
involved in the livestock industry, and move forward withsustainable wagyu beef production business.
*Registered trademark of SDS Biotech K.K.

 Details on “Environmental Philosophy / Environmental Code of Conduct” and initiatives for the environment are available on our company website. (Japanese only)32

Value Creation Story

Initiatives in Respecting
Human Rights
The Itoham Yonekyu Group believes that respect forhuman rights should be the basis of all its decisions andactions. Therefore, we address a variety of issues related
to human rights. In order to respect the human rights ofall people involved in our business and to fulfill our social
responsibilities as a company, our Board of Directors
adopted the “Itoham Yonekyu Group Human Rights Policy”
in FY 2021 in accordance with international standards such

Related materiality

Promoting sustainableprocurement andstable supply

as the United Nationsʼ “Guiding Principles on Businessand Human Rights.” In the same fiscal year, our Board of
Directors also approved the Itoham Yonekyu Procurement
Policy and the Supplier Procurement Guidelines to ensurethat respect for human rights and consideration for theenvironment are implemented throughout our supply chain.
Human rights(Japanese only)

Sustainable procurement(Japanese only)

Human rights due diligence initiatives
In accordance with the “Itoham Yonekyu Group Human
Rights Policy,” we have established a human rights due
diligence system in line with the process outlined in theUNʼs “Guiding Principles on Business and Human Rights.”
In FY 2022, through the implementation of the humanrights due diligence, we sorted out the negative impacts
on human rights in our Groupʼs operations, of which wehave identified those that we should especially prioritize.
In identifying them, we considered geographic, social, andcompany-specific characteristics, as well as vulnerable
stakeholders, using various human rights reports and theobjective opinions from external experts.
In addition, we conducted a questionnaire to our
suppliers to find out how they are working on respect forhuman rights and environmental considerations to assess

and prevent the negative impacts on human rights in our
supply chain.
In FY2023, in addition to continuing to take necessary
measures to prevent and reduce the identified negative
impacts, we will conduct interviews with foreign technicalintern trainees in our Group to better understand theiractual working conditions and to prevent and mitigate thenegative impacts on human rights. Given the increasing
diversity in our workplaces, SOGI *1 harassment and racial
harassment *2 will be included in the content of our internal
training and courses to raise awareness among employees
to act with due regard for human rights.

Promotion of human rights due diligence initiatives

Negative impacts to be tackled as a priority

1

2

Identification
andassessmentof negative
impacts

3

Prevention
and mitigationof negative
impacts

Effectivenessevaluation of
the company's
initiatives

Raising livestock,etc. (farm) and meat
processing

Procurement

Production &Logistics

Sales &
Marketing<Suppliers>
Continue cycle from ① to ④

Excessive and unreasonable working hours, occupational healthand safety, discrimination and harassment, the rights of foreign
workers, forced labor and child labor.

<Our Group>
Discrimination and harassment, and the rights of foreign technical intern trainees

Efforts to Build Up a Sustainable Supply Chain
In accordance with the “Itoham Yonekyu Procurement
Policy” and the “Supplier Procurement Guidelines”, weare working with our suppliers to build up a sustainablesupply chain.
In FY2022, we conducted a questionnaire-based
supplier survey in accordance with the Supplier
Procurement Guidelines to 155 suppliers with the highest
procurement value (cumulatively representing 80% of our
total procurement value). The result (100% response rate)

33

Itoham Yonekyu Group Integrated Report 2023

Sustainability

Basic Stance Concerning
Human Capitalshows that there are no risks to any of the priority issues,
including human rights, to the extent that an attended
follow-up investigation is required.
This survey will continue to be conducted withimproved questions and to more suppliers. We willcontinue to build a sustainable supply chain in cooperation
with our suppliers by strengthening communication withthem through supplier visits and other activities.

Governance

Financial Data / Stock Information

Related materiality

Creating a workplace
where each employee
can actively participate

Basic Policy for Human Resource Development
Our Group believes that the impetus for increasing acompanyʼs competitiveness and growth potential lies in thecontinuous and proactive pursuit of reform by harnessing
the diverse perspectives and values of each employee.
At the same time, we also recognize the importance of
creating an environment in which employees can work
comfortably and grow autonomously as their values andwork styles are diversifying amid the growing uncertainty

in the labor market due to declining birth rates, an aging
population, shrinking workforces, and other factors.
With these in mind, our basic policy for human resources
development takes a long-term approach to helping eachindividual develop their careers autonomously throughtheir continuous trials, while respecting diversity andvalues.

Diverse Work Styles and Human Resource Development Activities
We are accommodating diverse work styles by creating asystem that allows each employee to work comfortably andfully utilize their skills. A remote work-friendly environmenthas been further promoted. We have encouraged male
employees to take childcare leave and expanded childcare
support measures. In addition, employees have goodaccess to information on internal support systems andpublic support for family care.
In addition, we are enhancing support for employees
to grow and progress in their careers autonomously. We
are also reviewing and upgrading the existing internal

system that allows employees to apply for transfers, theinternal job posting system, the job rotation system, andthe system to commend employees for their willingness
to take on new challenges, with the aim of fostering a
corporate culture that enables employees to grow in asustainable way. In order to create new value, we also
make every effort to secure and develop highly specializedcore personnel who meet the needs of our business
operations, regardless of age, as we continue to recruit
mid-career professionals. For more details, please visit our
website.

*1 SOGI stands for Sexual Orientation & Gender Identity.
*2 Discrimination and harassment based on race, nationality or other ethnic factors.

4
Explanation
andInformation
Disclosure

Business Strategy

Work Style Reform (Japanese only)

Consideration for Animal
WelfareBased on the fact that the cycle of life is at the core ofour business, our Group believes that consideration foranimal welfare is one of the social issues that should be
addressed with the same enthusiasm as environmental
and human rights issues. Therefore, in an effort tocontinue our business operations with consideration foranimal husbandry management, our Board of Directors
adopted the Animal Welfare Policy in FY2021. Our specificinitiatives on the farm and at our meat processing facilities
are available on our website.
Animal Welfare (Japanese only)

Recognizing that efforts to improve animal welfare arealso related to the safety and productivity of livestock
products, our Group has been working to achieve this goalfrom a variety of perspectives, such as through dialogue
and consultation with stakeholders, as well as throughthe management of livestocks from the perspective of
animal comfort in accordance with “Animal Welfare CodeRelated materiality

Promoting sustainableprocurement andstable supply

for Livestock Management” issued by a public interest
incorporated association, Japan Livestock Technology
Association.
We will continue to provide appropriate training
for employees involved in these activities to build theirknowledge and skills. We will also progressively work
towards the development of Group-wide animal welfare
guidelines and appropriate disclosure of information on
our initiatives.
Furthermore, in response to the new “Animal Welfare
Code for Livestock Management” issued by the Ministryof Agriculture, Forestry and Fisheries in July 2023, we
will strive to improve animal welfare through further
collaboration among relevant internal departments and by
supporting our business partners in the livestock industry
to promote and disseminate animal welfare.

34

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Corporate Governance
Board of Directors

Basic Policy
Yonekyu Holdings Group Basic Policy on Corporate
Governance,” which lays out a framework for corporate
governance to improve our medium- to long-term
corporate value.
Please visit our website for the “Itoham Yonekyu
Holdings Group Basic Policy on Corporate Governance.”

The corporate governance at the Itoham Yonekyu Groupis based on our Group Philosophy, Vision, and Code of
Conduct. With the aim to solve social issues throughbusiness and to gain the trust of stakeholders, we have
set up a highly transparent system of management thatenhances overall Group monitoring, supervising, andother internal control functions while striving to makeaccurate business decisions and take fast action. Basedon this fundamental view, we have established the “Itoham

The Board of Directors consists of six directors, of which
two are outside directors. The Board makes decisions
on the Groupʼs management policies, strategies, andother essential management matters, and supervises theexecution of duties at its regular monthly meetings and at
extraordinary board meetings which are held as necessary.

However, to ensure prompt decision-making
regarding business execution that does not requiredecisions by the Board of Directors, it delegates authority
to the Group Executive Committee and executive officers
in accordance with the regulations on decision-making
authority

Board of Director s activities (FY2022)
Basic Policy on Corporate Governance (Japanese only)● Number of meetings held: 15 ● Meeting duration: 1 hour and 18 minutes on average ● Attendance rate: Directors 100 %, Auditors 98 . 3 %Matters considered (53 items resolved and 56 items reported)

Corporate Governance System
without any conflicts of interest with general shareholders.
The outside auditors are believed to make a significant
contribution to our effective corporate governance byensuring the independence of the audit system and by
expressing their audit views from an objective standpoint.
In appointing outside directors and outside auditors,
we place emphasis on securing their independent
standpoint. Therefore, we appoint as independent directors
and auditors those outside directors and auditors whomeet the requirements of our own independence criteria in
addition to those stipulated by Tokyo Stock Exchange, Inc.

As a company with a board of company auditors, we haveappointed several outside directors and outside auditors.
In addition, we ensure that outside directors compriseat least a third of the total number of the Board members
in order to strengthen and improve the effectiveness of theBoardʼs oversight of management and the transparency ofits decision-making process.
The outside directors seek to strengthen the Board of
Directorsʼ supervisory function by utilizing their expertiseand extensive experience in their respective fields to makemanagement decisions from an independent standpoint

Corporate Governance System Diagram (as of September 29, 2023)
General Shareholders Meeting
Appointment / Dismissal

Appointment / Dismissal

Outside Directors (2)Internal Auditors (2)Cooperation
Decision on appointment /Reappointment policy
Decision on accounting audit
equivalency

Outside Auditors (2)Compliance Committee

ReportingAppointment /Dismissal /Supervision

ReportingBusiness Execution

Group Executive
Committee
President

Compliance Dept
ReportingExecutive
Officers
Reporting

Guidance

Reporting Supervision / Instruction

Business Divisions

35

Itoham Yonekyu Group Integrated Report 2023

Cooperation

Accounting
Audits

Quality Assurance DivisionInternal Auditing Office

Cooperation

Auditing and Monitoring

Sustainability
Committee

Internal Directors (4)Audit &
Supervisory Board(4 members)

Auditing

Accounting Auditor

Supervision

GovernanceCommittee

ReportingBoard of Directors(6 members)

TCFD disclosure

Integrated Report

Joint R&D Projects

Revision of our Groupʼs personnel system

Human rights due diligence

Verification of cross shareholdings

Creation of animal welfare policy

Settlement of accountIR initiatives

Setting KPI for materialities

Reorganization of our Group and factories

Environmental data and greenhouse gas reduction roadmap

Progress of Medium-term Management Plan 2023

Business risk map

Compliance awareness survey results and organizational climate
survey resultsGroup Executive Committee
The Group Executive Committee is established to decide
important issues at the executive level and to discuss theissues the Board decides. The Committee is comprisedof directors (excluding outside directors), auditors, andothers designated by the chairperson of the Committee.

Nomination Advisory Committee

Reporting

Recommendations /Proposals

Corporate governance reports

Shareholderʼs return measures (dividend payments,
purchase and cancellation of treasury shares)

It holds regular meetings twice per month, and special
meetings are held as necessary. At the meetings, theCommittee decides, reports, and discusses the Groupʼsmanagerial strategies and important matters.

Voluntarily Established Committees

Appointment / Dismissal

Nomination Advisory
Committee
Compensation
Advisory Committee

Budget at the beginning and middle of the term

Established to ensure transparency and objectivity in theelection process for director, auditor, and executive officer
candidates. The Committee consists of three members,
including two independent outside directors. As anadvisory body to the Board of Directors, this Committee
reviews, recommends, and proposes the following mattersto the Board of Directors.

Compensation Advisory Committee
Established to ensure transparency and objectivity inthe decision process for compensation for directors
and executive officers. The Committee consists of threemembers, including two independent outside directors. Asan advisory body to the Board of Directors, this Committee
reviews, recommends, and proposes the following mattersto the Board of Directors.

Matters to be reviewed by the Nomination Advisory Committee
1. Matters related to the appointment and dismissal of directors, auditors, andexecutive officers for Itoham Yonekyu Holdings Inc., Itoham foods Inc. andYonekyu Corporation (Hereinafter referred to as the “Group”)
2. Matters related to basic policies on the appointment and dismissal of theGroup directors, auditors, and executive officers, and the establishment, revision, and abolishment of regulations and procedures
3. Other matters deemed necessary by the Committee related to the appointment of director and auditor candidates and the dismissal of directors andauditors

Matters to be reviewed by the Compensation Advisory Committee
1. Matters related to the Officer Compensation System (basic compensation,
performance-based compensation, shares with restrictions on transfer, etc.)
for directors and executive officers of Itoham Yonekyu Holdings Inc., Itoham
foods Inc. and Yonekyu Corporation (Hereinafter referred to as the “Group”)
2. Matters related to performance (managerial indicators, target values, fluctuation range, etc.) of the Group directors and executive officers
3. Matters related to compensation standards (compared to competitors) for
the Group directors and executive officers

Governance Committee
Monitoring

Established to strengthen the corporate governancesystem and its operation by increasing the effectivenessof the Board of Directors. The committee consists of threemembers, including two independent outside directors. Asan advisory body to the Board of Directors, this Committee
reviews the effectiveness of the Board of Directors andmakes recommendations and proposals to the Board of
Directors.
36

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Corporate GovernanceCompensation for Directors and Officers

Sustainability Committee
Established to promote Group-wide sustainability
initiatives to achieve both the realization of a sustainable
society and the sustainable growth of our Group throughthe resolution of social and environmental issues. This
Committee consists of seven members, including one
independent outside director. As an advisory body to theBoard of Directors, this Committee reviews, recommends,
and proposes the following matters to the Board of
Directors.

Matters to be reviewed by the Sustainability Committee
1. Proposal of basic plans strategies and, basic policy on sustainability management and promotion activities
2. Establishment of materiality (priority issues) for the promotion of sustainability
management
3. Establishment of KPIs for materiality and monitoring of their progress

Overview of the Compensation Systemof their duties. The FY2022 priorities set for the auditorʼsaudit were “compliance awareness,” “responses to eachindividual risk” and “confirmation of the level of internal
control, including Group companies,” around which theauditors centered their activities.

Audit & Supervisory Board s activities (FY2022)● Number of meetings held: 12 ● Meeting duration: 51 minutes on average ● Attendance rate: Auditors 100 %Matters considered

Compensation for directors (excluding outside directors)
is made up of basic compensation, performance-based
compensation as a short-term incentive, and share-based
compensation (shares with restrictions on transfer) as a
medium- to long-term motivation.
The ratio of basic compensation to performancebased compensation to share-based compensation is set
at roughly 60:25:15. We established this ratio based on anunderstanding of our financial situation and after comparing
and investigating compensation ratios and standards foreach role at many other companies in the same industry andwith the same scale so as to ensure objectivity and validity incompensation ratios and standard general compensation foreach role.
On the other hand, compensation for outside directors
consists of basic compensation only, which is not connectedto their business performance, as their main roles aresupervising and making management recommendations
from an independent and objective position.
The maximum amount of compensation is determinedby the resolution of the General Meeting of Shareholders.
However, the overall executive compensation system,
including compensation ratio, individual compensation
standards, and its calculation and payment methods, isdetermined by the Board of Directors following deliberationby the Compensation Advisory Committee, in which the
majority of members are independent outside directors.
Compensation for auditors is determined throughdiscussions among the auditors. It also consists of basic
compensation only, which is not connected to their businessperformance to ensure a high degree of independence.

Overview of the Compensation System

Preparation of the auditorʼs audit reports

Investigation of proposals submitted to theOrdinary General Meetings of Shareholders andother documents

Review of proposed appropriation of surplus

Reappointment and compensation of
accounting auditors

Revision of auditorʼs audit standards

Audit policy, audit plan, and assignment ofauditorsʼ responsibilities

Confirmation of the occurrence of compliance violations and quality
issues

Proposal for the appointment of new auditors

Provision of non-audit services by audit firms

Details on the Key Audit Matters (KAM)

Review of observations made during internal audits andimprovements made by audited departments

Internal Audit

Accounting Audit

The company has established the Audit Office as anindependent organization. This office conducts internal auditsof the functioning of the internal control system, primarily forthe purpose of auditing the operations of business divisions,
including the Group companies, based on the internal audit
regulations and annual audit plans. It also performs additional
audits for specific purposes as necessary.
The results are reported in the form of an audit reportto all internal and outside directors and auditors, as wellas to the audited departments. The audited departmentsʼ
responses to the audit are also shared with all internal andoutside directors and auditors.
The Audit Office holds internal audit report meetings
as needed. These meetings are attended by the President,
standing auditors, the general manager of the Audit Office,members of the Audit Office, and the person in charge of theaudited departments, to further discuss the audit reports andaudit responses.

We have entered into an auditing agreement with
KPMG AZSA LLC for audits under the Companies Act
and the Financial Instruments and Exchange Act. Our
corporate and accounting auditors hold regular meetings
for reporting and exchanging opinions to strengthen
cooperation. The regular meetings for reporting andexchange of opinions are as follows.

Itoham Yonekyu Group Integrated Report 2023

1. It will function as a sound incentive for sustainable business expansion and corporate value improvement by sharing value with shareholders, employees, and other stakeholders.

3. It will be determined through a process that ensures objectivity and rationality to maintain accountability with stakeholders.

Audit & Supervisory Board

37

Basic Policy

2. It will be a compensation system that responds to a suitable compensation standard based on the field and scale of business, responsibility for each role, as well as results inan effort to employ and keep superior personnel.

Audit System
The Audit & Supervisory Board consists of two standing
auditors and two outside auditors. The meeting is held
on a monthly basis to make decisions on important audit
matters, to report on the status of audit implementation,and to exchange opinions.
In addition to attending Board meetings and otherimportant internal meetings, the Corporate Auditor
conducts a full range of audits by obtaining information
directly from directors and employees on the performance

The basic policy on the compensation system for directors and officers was determined as follows.

Regular meetings for reporting and exchange of opinions●

Audit results summary report meeting (once a year)●

Quarterly review results summary report meetings (three times a year)
Accounting auditorsʼ report meeting (attending the report meeting with thepresident) (once a year)● 

Auditorsʼ discussion (once a year)● 

Three-way (Auditors, Accounting Auditors, and General Manager of the Audit
Office) audit liaison meeting (once a year)● 

Opinion exchange meeting on Key Audit Matters (KAM)● Directors (excluding outside directors)■ Basic compensation■ Performance-based compensation

The basic compensation for directors is a fixed monthly
monetary remuneration, the amount of which is determined inaccordance with their position in the Company.

The performance-based compensation is paid based on the degree of achievement of targets
for each fiscal year, using consolidated ordinary income as the performance index.
For the calculation formula, please refer to the “Performance-Based Compensation Calculation
Formula*” outside of this table.

60 %● Outside directors● Auditors

25 %

15 %

Only basic compensation (fixed monthly remuneration) is paid.
Only basic compensation (monthly remuneration determined throughdiscussions among the auditors) is paid.

*Performance-Based Compensation Calculation Formula
Performance-Based Bonus Calculation Formula:
Consolidated ordinary income x 0.01% x
performance-based bonus multiplier by position
Additional Performance Bonus Calculation Formula:
Consolidated ordinary income x 0.01% x
additional performance bonus multiplier by position x
individual performance evaluation multiplier x adjustment ratio■ Share-based compensation
The Companyʼs share with a restriction ontransfer are granted so that they can further
share with shareholders the benefits andrisks associated with share price fluctuations,and consequently be motivated to contribute
more than ever to share price increases
through the corporate value improvement.
Multiplier by position

Position
Chairperson
President
Vice-president
Senior managing executive officer
Managing executive officer
Senior executive officer

Performance-based
Additionalbonus
performance bonus
6.440
―
8.200
―
6.440
―
3.872
0.968
3.232
0.808
2.336
0.584

Total
6.440
8.200
6.440
4.840
4.040
2.920

* I f consolidated ordinary income is 40 billion yen or more, it is calculated as 40 billion yen. If it isless than 5 billion yen, there is no payment.
* Individual performance evaluation multiplier ranges from 0.0 to 2.0.
* A djustment ratio is a multiplier to keep the payment source determined by consolidated ordinary
income from increasing or decreasing based on individual performance evaluations.

● 

Adjustment
ratio

Total sum of the additional performance bonus multiplier by position
for the directors concerned
Total sum of the additional performance bonus multiplier by position
multiplied by individual performance evaluation multiplier of thedirectors concerned38Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Corporate GovernanceEvaluations on the Effectiveness of the Board of Directors
We evaluate the effectiveness of the Board of Directors each year between September and December in order to self-assess
whether the Board is functioning normally in the way in which it was originally established, to increase its effectiveness, andto create an appropriate governance system for the Company.
A summary of the FY2022 evaluation results of the effectiveness of the Board of Directors is as follows:

Initiatives to reinforce the Corporate Governance System
We will continue to pursue and enhance the best
corporate governance practices for the Company in orderto maximize the functions of the Board of Directors.

Since its inception in April 2016, the Company has been
continuously working to reinforce corporate governancewith the aim of achieving sustainable growth andincreasing our corporate value over the medium to longterm.
Internal directors

Internal directors

Internal directors

Independent outside directors

Independent outside directors

Independent outside directors

Effectiveness Evaluation Process

1 Questionnaire by the Governance Committee
We have established the Governance Committee as an advisory bodyto the Board of Directors to analyze and evaluate its effectiveness.
The committee conducted a questionnaire consisting of sevenevaluation items and 16 questions to all directors and auditors toassess the status of addressing the issues identified in the previous
effectiveness evaluation (FY2021) and to evaluate whether the Board
has been effectively fulfilling its roles and responsibilities.

Seven evaluation items
1) Structure of the Board of Directors
2) Administration of the Board of Directors
3) Discussions of the Board of Directors4) Supervision by the Board of Directors
5) Appointment and Dismissal of Managers
6) Discussions with Shareholders
7) Comments

The Governance Committee conducted deliberation based on the questionnaire responses, prepared a report of analysis
and evaluation results, submitted it to the Board for discussion.

2 Evaluation Results and Addressing Priorities
Overview of the evaluation results
It was concluded that progress
had been made in addressing theissues identified in the previous
effectiveness evaluation and thatthe overall effectiveness of theBoard was assured.

Addressing previous priorities
Three of the issues identified in
the previous evaluation results
were designated as priorities to beaddressed in more detail. The tablebelow outlines the priorities andapproaches.

Priorities① Sustainability initiatives anddisclosure② More active Board discussion ofmanagerial personnel development③ Improved public relations regarding
corporate activities

Next priorities
The three previous priorities willcontinue to receive reinforced
attention as priorities. In addition,
the Board of Directors will discuss
human capital and intellectual
capital.

Summary of initiatives (January to December 2022)●

The Sustainability Section was established in April 2022 as a department to promote specific activities
related to sustainability.

●

The human rights policy, the procurement policy and supplier procurement guidelines, and the animal
welfare policy were created and pubished.

●

We endorsed TCFD recommendations and disclosed climate change-related risks and opportunities.

●

We set and disclosed KPIs for materialities.

●

The chairperson of the Nomination Advisory Committee presented the Managerial Personnel
Development Policy (succession plan) to the same committee and the Board of Directors for discussion.

●

The Public & Investor Relations Office established under the CEO Office will strengthen the coordination
between investor relations and public relations activities.

●

Collaboration between the Public & Investor Relations Office and the Sustainability Section will enhance
our information dissemination.

Percentage of female directors:
Percentage of outside directors:

11%
22%

Percentage of female directors:
Percentage of outside directors:

39

Itoham Yonekyu Group Integrated Report 2023

Percentage of female directors:
Percentage of outside directors:● Establishment of Group● Establishment of Managerial Personnel Development● Holding company system● Revision of the Basic Policy on Corporate

Philosophy,Vision, and Code of Conduct● Revision of Basic Policy on Corporate Governance

Governance● Revision of the Cross-shareholding Policy
Management Guidelines● Introduction of an Executive Officer System● Establishment of Compliance Committee● Establishment of Governance Committee (Start of
Evaluations on the Effectiveness of the Board of
Directors)● Female directors (2)● Abolition of stock option as compensation● Introduction of shares with restrictions on transfer
as compensation(Establishment of holding company
through the merger of Itoham Foods Inc.
and Yonekyu Corporation)● Establishment of Nomination Advisory
Committee● Establishment of Compensation
Advisory Committee● The term of office for directors is set to
one year.
● System of having two independent
outside directors● Female director (1)● Introduction of performance-based
compensation● Introduction of stock option ascompensation

33%
33%

● Establishment of Basic Policy on Sustainability

Policy● Establishment of Sustainability Committee● The ratio of independent outside directors on the Board of

Directors is 1/3● Ratio of women on the Board of Directors: 1/3

2023
2022

● The Group was reorganized

as an operating holding
company.

2021

2020
2019

● Establishment of Basic Policy on Officer Compensation2018● Ratio of Independent Outside Directors on Nomination Advisory Committee: 2/3

2017
2016

● Ratio of Independent Outside Directors on Compensation Advisory Committee: 2/3● Establishment of Basic Policy on Corporate Governance● Establishment of Cross-shareholding Policy Management Guidelines● Policy ● Group structure ● Nomination and compensation

Cross-shareholding
Stocks that are deemed inappropriate to hold aresold after dialog and negotiation with the issuing company.
To vote for or against a proposal, we make acomprehensive assessment of whether the proposal
will contribute to the sustainable growth of the issuing
company and increase its corporate value.

Our basic policy is not to participate in cross-shareholdings
unless they meet certain conditions and are considered tohelp maintain and develop business relationships.
At the end of each financial year, we conduct a rapid
review of the appropriateness of all cross-shareholdings.
The results of the review are verified by the Group
Executive Committee and reported to the Board of
Directors.

The price of the sold shares and number of the sold issues
2016

We will continue to work towards improving the effectiveness of the Board of Directors based on the results of this evaluation.

22%
22%

2017

2018

(FY)

2019

2020

2021

2022

Price (million yen)

2,975

1,863

971

195

791

106

96

Number of issues

25

28

41

13

30

24

25

40

Value Creation Story

List of Directors, Auditors and Executive Officers

Business Strategy

Sustainability

Years in office (as of the end of June 2023)

Financial Data / Stock Information(as of September 29, 2023)

Directors

Name

Governance

Auditors

Isao Miyashita

Koichi Ito

Hajime Ogawa

Akihisa Horiuchi

Yukie Osaka

Mikiko Morimoto

Yoshiro Matsuzaki

Shin Takahashi

Kei Umebayashi

Hiroshi Matsumura

7 years 3 months

1 year

1 year

―2 years―

3 years

2 years

3 years―●●

Director (Outside)

Director (Outside)

Independent Directors/Auditor
President and Chief Executive
Officer

Director, Managing Executive
Officer

Director, Managing Executive
Officer

Director, Managing Executive
Officer

Director, Itoham Foods Inc.

Senior General Manager COO,
Processed Foods Business Div.

Senior General Manager COO,
Administration Div.

Senior General Manager COO,
Meat Business Div.

General Manager, Quality
Assurance

Chief Compliance Officer

Executive Director, Itoham Foods
Inc.

Director, YONEKYU CORPORATION

Current position and responsibilities

Chief Executive Officer, Itoham
Foods Inc.

Director, Itoham Foods Inc.
Director, YONEKYU CORPORATION●
Standing Auditor

Standing Auditor

Auditor, Itoham Foods Inc.

Auditor, Itoham Foods Inc.

Auditor, YONEKYU CORPORATION

Auditor, YONEKYU CORPORATION●

Auditor (Outside)

Auditor (Outside)

LawyerNishimura & Asahi (Gaikokuho
Kyodo Jigyo Partner)

Certified public accountant

Chief Executive Officer, YONEKYUCORPORATION

Director, YONEKYU CORPORATION

Chairman,
General Incorporated Association
Customer Success Promotion

Significant Concurrent Positions

Reason for Appointment

Association Outside Director,
SAKURA internet Inc.

President and Chief Executive
Officer, karna ltd.
Outside Director, NEC Networks &System Integration Corporation

Professor,
Graduate School for Law and
Politics, The University of Tokyo

He has been leading the entire
Group, working to build theGroupʼs business execution
structure and organizational
system, and promoting efficient and agile management.
He continues to work toachieve sustainable growth for
the Group and to enhance its
corporate value over the medium to long term by utilizing
his extensive experience andbroad insight as a corporate
manager.

He has shown strong leadership in reorganizing theGroupʼs processed food business, optimizing logistics, andstrengthening and nurturing
brands.
Leveraging his wealth of experience and deep insight gained
as Chief Executive Officer of
Itoham Foods Inc. and fromvarious key positions in theGroup, he continues to workto achieve sustainable growth
for the Group and increase
its corporate value over the
medium to long term.

He has shown strong leadership in strengthening corporate governance, including
improving the effectivenessof the Board of Directors,
and promoting sustainable
management.
He continues to work toachieve sustainable growthand enhance the Groupʼsmedium- to long-term
corporate value, drawing on
his extensive experience anddeep insight from overseas assignments and in the corporate
field.

He has demonstrated strong
leadership in the activities tocreate and expand the meatvalue chain.
Leveraging his wealth of experience and deep insight gained
as Chief Executive Officer of
YONEKYU CORPORATION
and from various key positionsin the Group, he continues towork to achieve sustainablegrowth for the Group andincrease its corporate value inthe medium to long term.

She contributes significantly
to the oversight of business
operations from an independent perspective, providing
objective professional advice
and positive opinions at Boardand committee meetings
based on her expertise as amarketing consultant and theinsight and broad experienceshe has gained through her
career as an executive andoutside director of listed companies and other entities.

Through her previous rolesand career as a sustainability
consultant, she has developed
insight, extensive experienceand other skills that will surely
enable her to provide objective
and professional advice andoversight to the Company.

He has knowledge and experience from his career as theCompanyʼs executive officer
and as the person in charge of
Human Resources Department of the Group.
He offers necessary andappropriate remarks to theBoard of Directors to ensurecompliance and validity indecision-making.
He audits the execution of
directorsʼ duties with the Audit& Supervisory Board based on
auditing policies and plans.

He has knowledge andexperience in financial affairs
and accounting, developed
through his career as the
person in charge of Accounting and Finance Departmentof the Group. He offers necessary and appropriate remarks
to the Board of Directors toensure compliance and validity
in decision-making.
He audits the execution of
directorsʼ duties with the Audit& Supervisory Board based on
auditing policies and plans.

He has gained expert knowledge and experience in corporate legal affairs as a lawyer
and in crisis management.
He offers necessary andappropriate remarks to theBoard of Directors to ensurecompliance and validity indecision-making.
He audits the execution of
directorsʼ duties with the Audit& Supervisory Board based on
auditing policies and plans.

Through his career as a certified public accountant, he has
cultivated expertise and extensive experience in finance andaccounting. He is expected
to contribute to the further
development of the Group byauditing overall managementfrom a broad and sophisticated perspective.

100％（15/15）

100％ (12/12)

100％ (12/12)―

100％（15/15）―100％（15/15）100％（15/15）93.3％（14/15）―100％（12/12）100％（12/12）100％（12/12）―●●

Attendance at Board of Directors
Meetings (FY2022)
Attendance at Audit & Supervisory
Board Meetings (FY2022)
Nominating Advisory Committee
The committees Compensation Advisory Committees/he serves on Governance Committee
Sustainability Committee

SkillsMatrix

Hiroshi Matsumura Certified Public
Accountant Office
Auditor, G.D S.p.A.

●

●

◎

●

●

◎

●

●

●

◎

●

●

●

Management●●

Marketing/Product Development●●

Production Engineering/Quality Control

●

●

●
●

●

●

●

●

●

●

●

●

●

●

●
●

●
●

●

IT/DX

●

●

●

ESG/Sustainability

International Experience●●

Finance/Accounting
Legal/Risk Management

◎

●

●

●

(Note) 1. In The committees s/he serves on, ◎ refers to the chairperson, ● refers to the committee members.
2.The Sustainability Committee includes three executive officers in addition to the directors indicated in the table above.

Executive Officers
Kazuhiko Misonou

Masayuki Yoneda

Akihiro Asami

Yoshiyuki Ishimatsu

Tomoyuki Ushimaru

Akira Maeda

Shinyo Tou

Tadanobu Kujime

Fumihiro Kanamori

Katsumi Nozawa

Shinji Horiuchi

Hiroyuki Tamai

Hirohiko Yoshino

Yukihiro Tashiro

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Senior Executive Officer

Senior Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Chairman,
ANZCO FOODS LTD.

Deputy Chief Operating Officer,
Processed Foods Business Div.

General Manager,
Corporate Strategy Dept.

Senior General Manager,
Production Div.,
Processed Foods Business Div

Deputy Chief Operating Officer,
Processed Foods Business Div.

General Manager,
Accounting & FinanceDept., Administration Div.

Senior General Manager,
Domestic Meat Div.,
Meat Business Div.

Chief Executive Officer,
Itoham Yonekyu Plant Inc.

Senior General Manager,
Meat Process & Farm Div.,
Meat Business Div.

Deputy Senior General Manager,
Administrative Div.

Director of Board,
ANZCO FOODS LTD.

General Manager,
New Business Development Office.,
Corporate Strategy Dept.

Senior General Manager,
Imported Meat Div.,
Meat Business Div.

Deputy Senior General Manager,
Production Div.,
Processed Foods Business Div.

Senior General Manager,
Business Strategy Div.

Deputy Chief Operating Officer,
Meat Business Div.

General Manager, Purchasing Dept.
General Manager,
Central Research InstituteSenior General Manager,
Sales Div.

General Manager,
Corporate Strategy Planning Office.,
Corporate Strategy Dept.

General Manager,
Production Planning Dept.

Chief Executive Officer,
Itoham Yonekyu Foods Inc.

41

Itoham Yonekyu Group Integrated Report 2023

42

Message

Message from an
Outside Director

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information[profile]
After working for NIKKEI RADIO BROADCASTINGCORPORATION, TOKYO METROPOLITAN TELEVISION BROADCASTING Corporation, and WOWOW
INC., she became a director of WOWOW COMMUNICATIONS, Inc. in 2014. In 2018 she became a director of
MEIKO NETWORK JAPAN CO., LTD. She has been an
outside director of the company since 2021. Currently,
she also serves as chairman of Customer Success Promotion Association (General Incorporated Association)
and as an outside director, SAKURA internet Inc.

I expect the company to promote
diversity in management and active
public relations
Incorporate outside ideas and emphasize
speed
Two years ago, I became an outside director of thiscompany. During this time, I have had the opportunity tovisit the factories and farms all over Japan and to deepen
my understanding of the entire cycle of farming cattle
and swine and manufacturing and distributing processed
products. I have observed that this Companyʼs Codeof Conduct is firmly embedded in quality control, safety
and security, compliance, and environmental initiatives
in the field. I have also noticed that the employees have asense of responsibility and pride in food production andwork tirelessly to ensure that customers enjoy delicious
products.
Through these opportunities, I have found that
this Groupʼs employees tend to be serious, steadfast,and careful about getting things done, which I think isa good thing. The companyʼs strengths will be further
demonstrated in the future if it responds more quickly tochanges in the business environment.
I have spent most of my career in communicationrelated jobs in the media, and then in management,
specializing in marketing, which has allowed me to get
to know many companies and executives. I would like toshare the knowledge I have gained from such experiencesin the form of comments and suggestions to contributeto increasing the value of the Company, as one of various
other ways of thinking.

Towards a More effective Board of
Directors Meetings
At its meetings, the Board of Directors timely reviews anddiscusses current issues, such as the social situationand the Corporate Governance Code. I understand thatoutside directors are expected to express their opinions
openly because they are told to speak up and make points,
even if such comments may seem tough. I recognize that
it is an important role for outside directors to continue
to make suggestions and proposals that they believe
are necessary to enhance the corporate value over the43

Itoham Yonekyu Group Integrated Report 2023

Yukie Osaka
Outside Director

medium to long term, even if they are difficult to implement
immediately. Therefore, I try my best to speak out without
being influenced by an internal state or thinking.
Prior to Board meetings, briefings are held for outside
officers so that they can have an opportunity to hear
explanations of proposals from the departments that arepresenting them to the Board. On the other hand, I believethat while directors need explanations of results andconclusions, it is also important for them to be informed
about the process prior to the formulation of each agenda
item. In some cases, I feel that the discussion at Board
meetings will be livelier if directors are able to know at thattime what is happening, offer any advice they can, andpoint out considerations and perspectives that are notbeing considered. In addition, since it takes a long time
to take resolutions and hear reports at Board meetings,
it is difficult to find time to discuss matters that are not on
the agenda. Therefore, I think it would be desirable to beable to discuss such matters at separate meetings. While
there is already a platform for discussing issues that are
not on the Boardʼs agenda, it would be good to have more
opportunities for this type of discussion in the future. As
the next Medium-term Management Plan is being preparedin FY 2023, we, the outside directors, would like to help
bring a more objective perspective to it.

Challenges and expectations forenhancing corporate value
We live in a time when simply continuing to do business as
usual will not be enough for any company to grow in theyears ahead. Under these circumstances, companies are
expected to create new value for society. To achieve this, I
believe this Group faces two major challenges.
The first is to ensure diversity in the core workforce.
Creating new value for growth requires personnel withdiverse backgrounds who are not only proficient in current
operations but also capable of generating diverse ideas.
Organizational homogeneity can pose a significant
risk in the future. I would like to see top management
make a strong commitment to diversity management by
increasing the proportion of female managers, hiring nonJapanese, and actively recruiting people with skills andexperience, including digital skills, that will be essential
in the future. Diversity, equity and inclusion are one of thestrategies for sustainable corporate growth. The Grouphas established KPIs related to the percentage of female
managers and female section heads, and these indicators
have increased each year because of these efforts, but I
believe it is necessary to take bold steps to achieve further
improvements.

The second is to boost public relations. This company
has not yet fully publicized the value of its development
capabilities, products, and the systems and initiatives
that create them. It would be better to recognize thesestrengths and make them known more widely, but thiscompany is modest and does not publicize enough.
With fears of a future protein crisis, the Groupʼs role
as a supplier of protein is extremely important to society.
In some cases, what may seem obvious and unremarkable
to those inside the company may have great significanceto the outside world. The company is also promoting
forward-looking initiatives on protein foods, including
meat, processed foods, and soy-based meat. I believe
the companyʼs growth will come from strengthening its
ability to communicate, not only through sales promotions
and TV commercials, which it has been doing, but also by
focusing on public relations and telling the stories of theinitiatives I mentioned earlier.

44

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

ComplianceBusiness and Other Risks, and Countermeasures

Basic Stance and Promotion System
The Itoham Yonekyu Group sets fair and transparent
conduct that puts compliance first as a compliance policy.
The code of compliance behaviors, which shows theevaluation standards that employees should follow, wascompiled into a Corporate Code of Ethics booklet anddistributed to every employee. We are working to spread
information through training, etc.

Specifically, some critical risks include the globally rising
prices of raw materials, grains, and energy costs, as wellas the spread of livestock infectious disease.

The risks the Group identified as critical and primarycountermeasures are listed in the table below.

Compliance Committee
The Compliance Committee meets once a month. The
Committee consists of the chief financial officer, thegeneral manager of the Human Resources Department,
the general manager of the Quality Assurance Department,
and other members appointed by the chief financial
officer. The chairperson is selected from the members by aresolution of the Board of Directors.
To strengthen the Groupʼs internal control functions
and permanently enhance corporate value, the Committee
regularly checks the risk management status regarding
food safety, compliance, business law, litigation, anddisputes, and independently evaluates the operational
status.

Compliance Supervisor Meeting
The Compliance Supervisor meeting is held twice per
year to promote Group compliance under the presidencyof the executive officer in charge of compliance. This
meeting decides the compliance policy and actionplans. It also reports and verifies matters that theCompliance Committee requests to improve, as wellas countermeasures and improvement measures forcompliance issues.

Compliance Promotion Committee System
Compliance Promotion Committee members are assigned
to each Group workplace. The Committee members
seek to acquire knowledge related to compliance, so thatthey can take initiative in promoting compliance at theirworkplace and ensuring that all employees are familiar withlaws, regulations, and internal rules related to their work.

Main Initiatives in FY2022

Risks

Primary countermeasures
Continuous operational reforms to reduce production costs
Diversification of product and raw material suppliers● Maintaining appropriate inventory levels of products and goods● Logistics integration with a focus on efficiency● Optimization of sales prices●● Training
A compliance seminar is held once a year to increase all Group
employeesʼ awareness of compliance and have employees
understand the importance of compliance. We also offer
compliance seminars as necessary to managers on industry
law and harassment prevention depending on the role.
● Compliance Awareness Survey
A Compliance Awareness Survey is conducted for all Group
employees once per year to understand the level of awarenessof compliance in each workplace. Survey results and employee
opinions lead to improvements in the workplace, as they are
offered as feedback to all employees, including management.
If problems are found, improvements are made and used incompliance action for the next fiscal year. Furthermore, thissurvey includes foreign technical intern trainers and foreign
specific-skilled workers.
● Internal Reporting System
We have set up the Internal Consultation Hotline (Compliance
Office) and the Outside Consultation Hotline (with outside
lawyers) to receive consultations and internal reportingon compliance from all Group employees. The contact
information of each hotline is available in the booklet, “Corporate
Code of Ethics,” compliance cards, and the internal portal
website.
In addition, we seek to protect potential whistleblowers.
Our internal reporting regulations provide for strict
confidentiality of the consultation content and prohibition ofdisadvantageous treatment of the potential whistleblower forreporting or consulting.

●Risks related to market changes

Strengthening food defense and traceability
Establishment of a strict quality control system based on international control standards● Actively promoting education of safety and sanitation●

Food safety risks●

Risks related to infectious diseases, illness, etc.

●

Establishment of manuals to handle infectious diseases, etc.

Risks related to livestock diseases●

Establishment of manuals to handle livestock diseases●

Establishing a business continuity plan (BCP) against disasters, etc., and preparing for alternative
production and delivery
Periodic disaster drills

Risks related to business continuity due todisasters, conflicts, etc.
Risks related to changes in domestic andinternational public and legal regulations andinfringement of rights
Risks related to changes in financial markets

Risks related to business investment and capital
investment●●

Prompt identification and compliance of amendments to relevant laws and regulations●

Setting up a committed line of credit
Exchange reservation●

The Board of Directors resolves important investments that contribute to enhancing corporate value
based on careful deliberations at the Investment and Lending Committee● Periodic review of progress and deviation from the original plan after investment●

Improving the accuracy of receiving and placing orders and optimizing inventory management
Improvement of delivery lead time
● Improvement of loading efficiency● Stricter temperature-controlled transportation●

Risks related to logistics and distribution●

Risks related to compliance

Establishment of a code of compliance behaviors, and distribution of a Corporate Code of Ethics to all
employees● Establishment of Compliance Committee chaired by the executive officer in charge of compliance● Periodic compliance messages from management● Assignment of Compliance Promotion Committee members● Implementation of Compliance Awareness Survey● Establishment of Internal and External Consultation Hotlines to receive internal reporting

Risks related to the development and operationof internal control systems●●

Internal audits conducted by the Audit Office

Implementation of anti-malware measures and security measures
Strengthening the management system by duplicating and decentralizing the core system and data
storage servers● Establishment of information security policy● Unannounced drills to maintain and improve the awareness of information security compliance●●

Risks related to information security

Risk Management

Risks related to securing and developing humanresources

Basic Stance and Promotion Systemsystem for continually gaining trust and reliance fromsociety for the long-term. For information on the risk
management system and its roles, please see ourCompany website.
Risk Management (Japanese only)

45

Itoham Yonekyu Group Integrated Report 2023●●

Risks to reputation

Based on our key regulations for risk management, ourCompany specifies, analyzes and evaluates risks related
to the achievement of Group management targets andto business activities, as we prepare a risk management●●

Recruitment of diverse human resources
Promotion of evaluation systems and education/training programs that lead to increased motivation
Monitoring of SNS, etc., in Japan and abroad
In the case that a risk to our reputation has occurred, rapid response and, if necessary, publicannouncement of information and our corporate stance

Adhering to environmental philosophy and environmental code of conduct, and proper understanding
and obeyance of changes to related laws and ordinances● Effective utilization of resources and energy, and business activities that take the environment into
account● Establishment of the Sustainability Committee with the Director, Managing Executive Officer and Senior
General Manager COO of the Administration Div. as the chairperson●

Risks related to the environment and climatechange46

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information*1●

Financial and Non-Financial Highlights●●

The percentage of women in management positions, percentage of employees taking childcare leave, and percentage of employees returning from childcare leave that has been totaled from all consolidated subsidiaries in Japan.
The percentage of employees with disabilities was calculated for the following companies combined, until FY2021, as they were subject to reporting requirements under the “Act to Facilitate the Employment of Persons with Disabilities”:
Itoham, Yonekyu, Itoham Daily, Itoham West Foods, Itoham Food Solutions, Itoham Sales, Tsukushi Factory, Royal Delica, Itoham Business Support, IH Logistics Services, Yonekyu Kagayaki, Yonekyu Delica Foods, Itoham Meat Sales East,
Itoham Meat Sales West, Sankyo Meat, IH Meat Solutions, IH Meat Packer, Yonekyu Oishiitori, Ai Pork, and the Eastern Hiroshima Prefecture Swinery Cooperative.

The percentage of employees with disabilities for FY2022 was calculated by adding the following companies to the companies covered through FY2021: Itoham Yonekyu Holdings, Itoham Yonekyu Human Service, Itoham Yonekyu System,
Kikusui, Asakusa Ham, Ito Fresh Salad, Marufuji, and Taiyo Pork.

*2●

Itoham Yonekyu Holdings and its subsidiaries are covered in this calculation (the subsidiaries include 100% of their emissions and usage amount in the calculation).

●

Various environmental data has been reviewed and updated.

*Rounded to the nearest 0.1 billion yen.

Financial Highlights

Non-Financial Highlights

Net Sales

Ordinary Profit

Profit Attributable to Shareholders

¥

¥

¥

922.7 billion

26.0 billion

Ratio of Ordinary Profit to Net Sales

2.8 %(¥ billion)

1,000
800

850.7 852.5 842.7 854.4

20.0

400

2020

2021

2.8

(¥ billion)

3

2022

0

(FY)

* The “Accounting Standard for Revenue Recognition” is applied
starting from the beginning of the consolidated fiscal year 2021.

2018

26.0

1

19.5

2019

3

15.0

2020

2021

2022

(FY)

10.0

1.2

5.0

10.6

11.4

0

0

* The “Accounting Standard for Revenue Recognition” is applied
starting from the beginning of the consolidated fiscal year 2021.

2018

2019

20.2

2020

19.1

2

■ Ratio of Returning to Work
（％）

2021

2022

1

0

(FY)

2.67 %

6

100

5.4
4.1

3.8

4.5

4.2

100

Percentage of Women Taking Childcare Leave
Percentage of Men Taking Childcare Leave

107

85

60

100

100

100

97.5

1

20

0

0

2019

2020

3
2.51

2.48

2.61

2.56

2.67

2021

2022

(FY)

* The “Accounting Standard for Revenue Recognition” is applied
starting from the beginning of the consolidated fiscal year 2021.

2018

2019

2020

2021

2022

2

98
34.5

40

2

2018

（％）

101

106

80

3

17.0

Employment Rate of People with
Disabilities

101 % 34.5 % 98 %（％）

4

Percentage of Employees
Returning from Childcare
Leave

Men

Women

5

2.2
1.8

1.3

Percentage of Employees
Taking Childcare Leave

5.4 %

20.0

2
28.6

Percentage of Womenin Management Positions■ Net income Attributable to Owners of Parent
Ratio of Net Income to Net Sales
（％）

2.4

27.0
15.7

200

2019

3.3

1.8

10.0

2018

1.8 %

2.3

600

0

3.2

30.0

922.7

17.0 billion

Ratio of Net Income to Net Sales■ Ordinary Profit
Ratio of Ordinary Profit to Net Sales（％）(¥ billion)

Personnel Data*1

2.3

3.8

4.8

2018

2019

2020

1

10.8

2021

2022

0

(FY)

(FY)

* The percentage of employees taking childcare leave is calculated based on the “Act on
the Child Care and Family Care Leave.” The number may exceed 100% in some fiscal
years because one may give birth in one fiscal year and take childcare leave in another.

Environmental Data*2
Return on Equity (ROE)

Return on Assets (ROA)

6.4 %Dividends Per Share

6.1 %

¥

24.0

Consolidated Payout Ratio

40.8 %

Greenhouse Gas Emissions(CO2 equivalent)

367, 276 t -CO

Return on Invested Capital (ROIC*)

5.8 %

ROE

ROA

（％）

(¥)

10

25

8.5

8

6.9

6

4.8

4

4.1
4.1

2
0

2018

5.1

6.3

7.5
7.1
6.6

（％）

47.5

50

43.9

40.8

20
6.4
6.1
5.8

Consolidated Payout Ratio

30.6

40

35.2

15

5.0
4.7

30

10

17.0

17.0

21.0

23.0

24.0

2020

2021

2022

(FY)

10

0

2018

2019

2020

524.4 kg -CO / t

2021

2022

6,826,000 GJ

2■ Scope2（ t-CO 2 ）400,000 386,946

373,222

379,030

368,127

367,276

180,715

169,886

165,037

160,834

160,313

547.7

557.6

300,000
579.9

536.6

(FY)

0

0

■ Energy Use

800

6,800

600

6,600

400
203,336

213,993

207,293

206,963

2019

2020

2021

2022

2018

9.7 GJ/t（ Thousand GJ）

10.1

9.9

9.9

9.8

9.7

6,723

6,725

6,697

6,721

6,826

2018

2019

2020

2021

2022

10

6,400

200

6,200

0

0

(FY)

Per Unit（ GJ/t ）

11

524.4

200,000
100,000 206,231

Per Unit Produced

Per Unit（ kg-CO2 /t ）

20

5

2019

Energy Use

2■ Scope1■ Dividends Per ShareROIC

Per Unit Produced

9

(FY)

0

* Income before interest expense and after tax / (Interest-bearing debt + Equity capital)
Exclude loss on disaster and insurance income is excluded from Extraordinary income and loss.

Service Water Use
Capital Expenditures

Depreciation and Amortization of Goodwill¥¥

17.4 billion

13.7 billion(¥ billion)(¥ billion)

25.0

20.0

20.0

3

Waste Emissions

16.9 m / t

63, 689 t

3■ Service Water Use（ Thousand m3 ）Per Unit Produced

90.9 kg/t■ Waste Emissions

Per Unit（ m3 /t ）13,00030（t）

Per unit（ kg/t ）70,000200

60,000

150

20.6
15.0

17.4

11.7

15.0
9.8

10.0

11.6

11.7

12.5

13.0

12.9

13.7
12,00018.7

12,481
5.0

2018

2019

2020

2021

18.3

10.0

5.0
0

11,865,000 m

Per Unit Produced

2022

(FY)

0

12,464

19.1

2019

2020

2021

2022

(FY)

0

2018

2019

16.9

50,00012,951

11,000

2018

17.6

20

2020

12,045

11,865

2021

2022

(FY)

10

40,0000

083.3
55,584

2018

87.4

89.4

59,53960,794

2019

2020

94.2

90.9

64,59963,689

100

50

2021

2022

(FY)

0

* The data on waste emission does not include data from some foreign subsidiaries from FY2018 to FY2020.

47

Itoham Yonekyu Group Integrated Report 2023

48

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Financial Data / Stock Data
Financial Data (See the summary of financial results for the latest detailed information.)

Stock Information (As of March 31, 2023)■ Major Financial Trends
FY2017FY2018FY2019FY2020

FY2021(Unit: 1 million yen)

■ Stock Conditions

FY2022

Listed stock exchange

Prime Market of Tokyo Stock Exchange
2296

Net Sales

831,865

850,721852,450

842,675

854,374922,682

Stock ticker code

Gross profit

130,649

126,821

133,548

139,979

131,904

130,126

Number of authorized shares

1,000,000,000

Selling, general and administrative expenses

109,087

112,326

116,281

115,961

107,292

107,131

Number of issued shares

287,355,059

Operating income

21,562

14,494

17,26624,01824,611

22,994

Number of shares per unit

100

Ordinary income

24,423

15,67919,53427,00028,596

26,044

Number of shareholders

61,466Net Income attributable to owners of parent

15,784

10,588

11,43920,204

19,118

16,975

Shareholder registry administrator

Sumitomo Mitsui Trust Bank, Limited

53.22

35.82

38.72

68.61

65.34

58.81

Return on equity (ROE) (%)

7.3

4.8

5.1

8.5

7.5

6.4

Individuals and others

67,978,571

23.65%

Return on assets (ROA) (%)

6.5

4.1

5.0

6.9

7.1

6.1

Other Japanese corporations

153,166,799

53.30%

Return on invested capital (ROIC) (%)

6.4

4.1

4.7

6.3

6.6

5.8

Financial institutions

34,682,654

12.06%

Ratio of operating income to net sales (%)

2.6

1.7

2.0

2.9

2.9

2.5

Foreign investors

26,493,021

9.21%

Ratio of ordinary income to net sales (%)

2.9

1.8

2.3

3.2

3.3

2.8

Securities companies

2,401,251

0.83%

Ratio of net income to net sales (%)

1.9

1.2

1.3

2.4

2.2

1.8

Treasury stock

2,632,763

0.91%

Total assets

378,687

393,392

389,426

394,086

413,123436,763

Net assets

219,861

224,074

229,178

247,648

262,740

269,261

57.7

56.6

58.5

62.7

63.4

61.5

Current assets

216,705

229,580

226,498

226,384

243,405

256,463

Current liabilities

127,808

139,456

138,106

123,041

126,533

152,941739.77754.14773.26843.52897.66943.40

0.22

0.28

0.23

0.16

0.13

0.16

6.3

19.2

44.7

113.3

57.9

4.9

Earnings per share (EPS) (yen)Capital to asset ratio (%)

Book value per share (BPS) (yen)D/E ratios (times)
Interest coverage ratio (times)
Cash flow from operating activities

5,521

15,114

31,84740,862

18,473

3,947

Cash flow from investing activities△ 8,183△ 19,879△ 7,855△ 10,837△ 11,251△ 22,926

Free cash flow
Cash flow from financing activities△ 2,661△ 4,765

23,99130,025

7,221△ 18,979△ 20,004

10,084△ 16,390△ 21,097△ 10,653△ 6,844

29,28434,643

41,77150,65147,69022,359Net increase (decrease) in cash and cash equivalents△ 23,501

5,358

7,128

8,879

△ 2,961△ 25,330

Cash and cash equivalents at beginning of period

52,78529,28434,643

41,77150,65147,690Capital Expenditures

12,674

20,560

9,838

11,58011,69917,425

Depreciation and amortization of goodwill

10,304

11,666

12,52413,003

12,903

13,707

Dividends per share (yen)

17.0

17.0

17.0

21.0

23.0

24.0

Consolidated payout ratio (%)

31.9

47.5

43.9

30.6

35.2

40.8

Cash and cash equivalents at end of period■ Segment information(Unit: 1 million yen)

Processed food segment
Net Sales
Sales ratio (%)
Segment income

287,502291,939300,209

307,041

302,309371,165

34.6

34.3

35.2

36.4

35.4

40.2

10,764

7,914

6,730

12,397

11,086

5,954

Meat segment
Net Sales
Sales ratio (%)
Segment income

540,107

Itoham Yonekyu Group Integrated Report 2023

548,184

531,581

547,843

547,145

64.9

65.2

64.3

63.1

64.1

59.3

11,432

7,364

11,284

13,443

14,86021,465* The Accounting Standard for Revenue Recognition is applied starting from the beginning of the consolidated fiscal year 2021.
* Starting in FY2022, the segment classification has switched from being by product and service to being by organization.
* Up until FY2021, the segment income represents operating income, but, starting in FY2022, it will represent ordinary profit.

49

554,576■ Distribution of Shares by Shareholder Type

Securities companies
2,401,251（0.83%）

Treasury stock
2,632,763（0.91%）

Foreigninvestors
26,493,021（9.21%）

Individuals andothers67,978,571（23.65%）287,355,059

Financial
institutions
34,682,654（12.06%）

Other Japanese
corporations
153,166,799（53.30%）■ Status of Major Shareholders(Major 10 Shareholders)Owned shares(in thousands)

Ownership
ratio (%)

Mitsubishi Corporation

115,779

40.66

The Master Trust Bank of Japan, Ltd.
(Trust account)

22,517

7.90

The Ito Foundation

12,000

4.21

S Planning Inc.

10,2793.61

Ito Bunka Foundation

6,200

2.17

Custody Bank of Japan, Ltd.
(Trust account)

5,313

1.86

Nippon Life Insurance Company

2,749

0.96

Koichi Ito

2,740

0.96

2,272

0.79

2,081

0.73

Name

Itoham Yonekyu Holdings Inc.
Employee Shareholder Meeting
STATE STREET BANK WEST CLIENT– TREATY 505234* Itoham Yonekyu Holdings is excluded from the above list of major shareholders eventhough it owns 2,632,763 treasury stocks.
* Ownership ratio is calculated by deducting treasury stocks.

50

Value Creation Story

Business Strategy

Sustainability

Governance

Financial Data / Stock Information

Corporate Data
■ Group Companies (as of April 1, 2023)

Corporate Information (as of March 31, 2023)

Manufacturing processed meat products

ITOHAM YONEKYU HOLDINGS INC.

Representative

Isao Miyashita, President and Chief Executive Officer

Location of head office

1-6-21 Mita, Meguro-ku, Tokyo

Established

April 1, 2016

Capital30 billion JPY (anything less than 100 million is rounded down)

Business description

Business management and all other accompanying duties for Group subsidiaries that handle sales and manufacturingof processed meat products, processing and sales of meat, processed foods, manufacturing and sales of readymade meals

Number of employees

8,010(Consolidated)

Fiscal year

From April 1 to March 31

Accounting auditor

KPMG AZSA LLC

Processed Food Business

Trade name

Selling processed meat products

Domestic subsidiaries
Itoham Yonekyu Plant Inc.
Itoham Yonekyu Foods Inc.
Yonekyu Kagayaki Corporation
Yonekyu Delica Foods Corporation
KIKUSUI Inc.
Asakusa Ham Inc.
Royal Delica Inc.
Ito Fresh Salad Co., Ltd.
Tsukushi Factory Co., Ltd.
Overseas subsidiaries
ITOHAM BETAGRO FOODS CO., LTD.
Affiliates: 2

Domestic subsidiaries
Itoham Foods Inc.
Itoham Sales Inc.
ITOHAM FOOD SOLUTIONS Inc.
Overseas subsidiaries
Itoham Foods Trading (Shanghai) Co., Ltd.

Other Business Services
Domestic subsidiaries
Itoham Business Support Inc.

Selling processed meat products and meat

Logistics

Domestic subsidiaries
Yonekyu Corporation

Domestic subsidiaries
IH LOGISTICS SERVICE Co., Ltd.

■ Organizational Chart (As of April 1, 2023)
General Shareholders Meeting

Board of Directors

Domestic subsidiaries
Yonekyu Oishiitori Corp.
Taiyo Pork Corp.
Eastern Hiroshima Prefecture Swinery Cooperative
Affiliates: 1

Nomination Advisory Committee
Compensation Advisory Committee
Governance Committee

Sustainability Committee

Crisis Management Committee

President

Corporate Strategy Department

Group Executive Committee

Audit Office

Investment and Lending Committee

Internal Control Office

Processing / packaging meat
Domestic subsidiaries
SANKYOMEAT Inc.
IH MEAT PACKER Inc.
IH MEAT SOLUTION Inc.
Ai Pork Inc.
MARUFUJI Co., Ltd.
Affiliates: 3

Selling meat
Domestic subsidiaries
ITOHAM MEAT SALES EAST Inc.
ITOHAM MEAT SALES WEST Inc.

Crisis Management Office

Producing, raising, processing and selling
Overseas subsidiaries
ANZCO FOODS LTD.
ITOHAM AMERICA, INC. and 20 other companies
Affiliates: 4

Other Businesses

Production Division

Business Strategy Division

Sales Division

Meat Process & Farm Division

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Itoham Yonekyu Group Integrated Report 2023

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51

Corporate Strategy Planning OfficePublic & Investor Relations Office
New Business Development OfficeSustainability Section
DX Promotion Office

Meat Business

Compliance Committee

Itoham Yonekyu Holdings Inc.

Producing / farming livestock

Audit & Supervisory Board

Other
Domestic subsidiaries
Itoham Yonekyu Human Services Inc.
Itoham Yonekyu Systems Inc.
Affiliates: 152