(Translated)
May 2, 2024

To whom it may concern

Company: ITOHAM YONEKYU HOLDINGS Inc.
Representative: Isao Miyashita, President and Representative Director(Tokyo Stock Exchange, Prime Market, Securities Code: 2296)
Inquiries: Hideaki Shinohara,
General Manager, Public &Investor Relations OfficeTel: +81-3-5723-6889

Notice regarding the formulation of Long-Term Management Strategy
and Medium-Term Management Plan

ITOHAM YONEKYU HOLDINGS Inc. (“the Company”) has formulated a Long-Term Management
Strategy 2035 with fiscal year 2024 as the first year and Medium-Term Management Plan 2026 for themost recent three years, and the meeting of Board of Directors held today approved the plans. The details
are as follows.
1. Background and Purpose of Formulation
The environment surrounding our group is expected to remain uncertain due to factors such as changes
in the macro environment due to demographic trends, soaring resource and energy prices, exchange rate
fluctuations, and the impact of overseas situations. Even under these circumstances, we would like totake a long-term perspective and continue to work together with all of our stakeholders to sustainably
enhance corporate value. To this end, the company determined our 2035 Approach toward our groupphilosophy and vision. At the same time, we backcasted from our 2035 Approach to formulate LongTerm Management Strategy 2035, and reflected in the Medium-Term Management Plan 2026 based on
the Long-Term strategy, which is the higher-level policy.
2. Overview(1) 2035 Approach

Expanding the idea of meat to bring excitement and happiness to customers
around the world
Quantitative Targets
Ordinary Profit: 50 billion yen

ROE: 8.0% or higher

ROIC: 6.8% or higher

The Group Slogan of our 2035 Approach is meat together.

(2) Reflecting on the Medium-Term Management Plan 2023 (“the previous Medium-Term Plan”)
The quantitative targets (30 billion yen in ordinary profit and 6.8% ROIC) were not achieved.
Although we steadily implemented various measures based on Priority Initiatives, we were unable tooffset the higher-than-expected rise in raw materials costs through internal cost reductions and pricerevisions.
In the previous Medium-Term Plan, we recognized that our issues were Clarifying our growth story
through long-term strategy and Improve basic earnings power.

(3) Long-Term Management Strategy 2035 (“the Long-Term Strategy”)
We will aim for dramatic growth through Growth Investments and Stable Improvement of Earning
Power. And focus on Digital Transformation (“DX”) and Sustainability, we will strengthen theManagement Base that supports growth.
● Profit Expansion through Growth Investments
・Maximizing the Value of Value Chains in Japan(Investment amount 100 billion yen, Investment effect 5 to 10 billion yen)

Aim for a superior position in the industry to win in mature markets



Relocate Processed food plants and Meat farms and optimize the location of Sales andLogistics bases

・Accelerating Growth of Overseas Businesses and Expanding Into Growing Businesses(Investment amount 100 billion yen, Investment effect 5 to 10 billion yen)

Invest in overseas and growth businesses to meet growing demand and increase profits

Expand Frozen Foods Business and future food development to reduce food loss and ensurea stable supply of protein in the long term

● Strengthen the Management Base・Efficiency and Transformation Through DX
The declining work force in Japan is an issue for the company also faces, and by using DX tosolve this problem, we achieve operational efficiency and sales improvement at the same timeObtain public certifications as a company-wide commitment

・SustainabilityContribute to sustainable societies through decarbonization, respect for human rights, andconsiderations for animal welfare

(4) Medium-Term Management Plan 2026 (“the current Medium-Term Plan”)
We will take the initiative to Improve Basic Earnings Power and use cash generated from operationsfor Stable Shareholder Returns and Growth Investments, which will lead to dramatic growth from thecurrent medium-term plan onwards.
● Improve Basic Earnings Power・Processed Food Division

Increase sales through our strengths in marketing product lineups that meet diverse needs andour sales methods that take advantage of this lineup



Revise prices in response to external environments and continue to cut costs to recover profits
as quickly as possible

・Meat DivisionStrengthen sales through our strengths in our nationwide sales network and the ANZCO Foods
sales network spanning throughout over the worldImprove profit margins through value-added meat products and advancements in risk
management● Strengthen the Management Base・Establishing a Sustainable Logistics SystemEstablish a sustainable logistics system with external partners

Work toward relocating facilities to streamline logistics and target a 10% improvement intruck loading rate (stipulated by the government)

・Human Capital Initiatives
Drive sustainable growth by improving engagement through human resource development
and fostering a corporate culture

Setting engagement score as a new KPI for materiality and Incorporate engagement score
improvement into executive compensation (60% engagement score in FY2026)● Financial Strategy
・Shareholder ReturnIntroduce dividend on equity ratio (DOE), which is less susceptible to performancefluctuations, as a dividend indicator and emphasis on stable shareholder returns
Progressive dividend at approximately 3% DOE



Use cash generated from operations for stable shareholder returns and growth investments

・Cash Flow Allocation


Generate operating cash flow of 120 billion yen over three years of the current Medium-Term
Plan, which will be allocated to Shareholder returns of 30 billion yen, Growth investments of
55 to 80 billion yen, and Renewal investments of 35 billion yen

・Management Conscious of Capital Costs


In the current Medium-Term Plan, we will work to Improve basic earnings power, Business
management using ROIC as an indicator, Pursue optimal financial leverage to increase ROEIn the Long-Term Strategy, we will work to Profit Expansion through Growth Investments,
Strengthen the Management Base that supports sustainable growth to improve future growth
expectations● Quantitative Targets(Billion Yen)FY2023

FY2024FY2026

results

forecastplan

Net sales

Consolidated

9,55.6

9,70.01.000.0

Ordinary profit

Consolidated

26.0

26.5

30.0

Processed Food Div.

9.1

9.5

12.0

Meat Div.

18.1

18.5

20.0

ROE

Consolidated

5.6%

5.6%

6.2%

ROIC

Consolidated

5.5%

5.5%

5.9%

Processed Food Div.

5.1%

5.2%

5.6%

Meat Div.

8.0%

8.3%

8.7%

ITOHAM YONEKYU HOLDINGS INC.
（Tokyo Prime：2296）

Long-Term Management Strategy 2035
Medium-Term Management Plan 2026

May 02, 2024

Table of Contents

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

1

Overview: 32Long-Term Management Strategy 2035

: 93Medium-Term Management Plan 2026

: 16

4

Supplementary Materials

: 26

2

1.

Overview

32.

Long-Term Management Strategy 2035

93.

Medium-Term Management Plan 2026

16

4.

Supplementary Materials

26

Note:

The notation of the fiscal year is based on Japanese standards (Example : FY2023 shows from April 1, 2023 to March 31, 2024)“DX” in the following descriptions refers to digital transformation
Rounded to the nearest 100 million yen

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

3

01 Overview: Group Philosophy, Vision, and the Roleof Our 2035 Approach

Determined our FY2035 Approach
toward our Group Philosophy and
VisionFormulated our Long-Term
Management Strategy to achieve
our approach

Group
Philosophy

VisionContributing to sound and affluent societies
through our businessBe a leading food company that embodies
fairness, rises to the challenge oftransformation, and achieves sustainablegrowth with our employees

Materiality

2035 Approachmeat together
Long-Term Management Strategy 2035
Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

Expanding the idea of meat to bringexcitement and happiness to customers
around the world4

01 Summary: meat together

We expand the idea of meat (m.e.a.t.) bymeeting the diverse lifestyles and eating
preferences of customers around the world,
striving to go above expectations to bringexcitement and happiness to our customers byworking together with all of our stakeholders.

meat together

The Group Slogan of our FY2035
approach is meat together.

+

+

+

+
Japan

2035 Business Environment
Meat Demand Forecast

Population
100%

Global94%

Japan
Domestic meat demand will likely decline slightly
due to an increase in per-capita intake, despite thegradually declining population

95%

GlobalGlobal meat demand will likely remain firm due topopulation growth and diversifying food preferences

97%

2023

2035

Population
100%

110%

110%

112%

2023

2035

Sources: OECD-FAO Agri Outlook 2023-2032 (data for 2033 and beyond is forecasted based on growth rates of the last three years of OECD-FAO, Agri Outlook 2023-2032),
the UN 2022 Revision of World Population Prospects, the National Institute of Population and Social Security Research Population Projections for Japan (2023)

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

5

01 Overview: Ordinary Profit Targets

Make a leap forward Jump
Ordinary Profit Targets

6.8% or higher
ROE 8.0% or higher
Ordinary Profit 50 billion Yen
ROIC

•

•

Made steady improvements toearning power through postmerger synergies, recognizingthat our strength is our stablebasic earning power
Make growth investments using
earning power as source,
targeting for ordinary profit of
50 billion yen in FY2035

Strengthening themanagement base andgenerating synergies
through integration
Advanced postmerger integration of
the two companies

Improve basic
earning power

Long-Term
Strategy

Step

Hop
MediumTerm Plan
2020

22.3

MediumTerm Plan
2023

MediumTerm Plan
2026

30.0

26.9

26.5

billion yen

billion yen

StableImprovement ofEarning Power

ProfitExpansion
Through Growth
Investmentsbillion yen

billion yen

18.3
billion yen

FY2015
Medium-Term Medium-Term
Before Business
Plan 2020
Plan 2023
Integration
5-year Average 3-year Average

FY2024FY2026

FY2035※

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

*Values prior the integration are the simple sum of ITOHAM INC. and YONEKYU INC. results

6

01 Overview: Initiatives

Long-Term Management Strategy 2035

Initiatives

Medium-Term Management Plan
Ending FY2026:
Raise basic earning power of theCompany over the next three
years mainly through organic
growthMaximizing the Value of Value Chains in Japan[Initiatives to win in mature markets 100 billion yen]

Revenue Base•

Long-Term Management Strategy
Ending FY2035:
Expand profits through growthinvestment (total of 200 billion
yen)

（1）

（2）
Accelerating Growth of Overseas Businesses
and Expanding Into Growing Businesses[Initiatives to capture growing demand 100 billion yen]〉200

billion yen(Excludes renewal
investments)

Begin Preparations for
our Leap Forward
Including Growth
Investments
Establish new Mishima Plant,
make capital investments in
ANZCO Foods, etc.

Dramatic growth through both initiatives

Stable Improvement of Earning PowerManagement BaseOperational Advancements

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

Growth Investments
total

〉

•

Medium-Term
Management Plan 2026

Profit Expansion Through Growth Investments

Improve Basic Earning Power

Logistics
Human CapitalDX

Sustainability

Cost-of-Capital-Conscious
Management7

01 Overview: Reflecting on the Previous
Medium-Term Plan (Medium-Term
Management Plan 2023)

Reflecting on the Previous
Medium-Term Plan (MediumTerm Management Plan 2023)
Made steady progress in priority
initiatives, but fell short of quantitative
targets (30 billion yen in ordinary profit
and 6.8% ROIC), resulting in P/B ratio
below 1x

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

Issues Recognized in the Previous Medium-Term Plan
(1) Clarifying our growth story through long-term strategy(2) Raising basic earnings power through the current medium-term plan

Quantitative Targets and Reflections

Priority Initiatives and Reflections

Strengthen
Management
Base・Reorganized into strategic segment units
・Integrated internal regulations andsystems・Established new IT Management Officeand DX Promotion OfficeStrengthen
Base
Revenue

・Processed Foods: Reconstructed the YUME
Plant, closed YONEKYU DELICA FOODS
CORP. Shizuoka, and relocated new Mishima
Plant
・Meat: Opened new SANKYOMEAT plantand established new Towada Beef plant

New Businessand Market
Initiatives

・Established the New Business Development
Office and launched One-Plate Frozen Foods
・Expanded Healthcare Business (ANZCO Foods)
・Developed plant-based food products and took
part in Cultured Meat Business planning

Sustainability
Initiatives

・Established the Sustainability Committee andSustainability Office・Implemented initiatives based on materiality
identification and KPIs

Management
Indicators

・Fell short of our target ordinary profit of
30 billion yen and 6.8% ROIC
・The Processed Food Business :decrease in profits due to ongoing increases
in raw material costs, etc.
・The Meat Business : increase in profits(Domestic)sales expansion and price revision(Overseas)strengthen profit management

Maximize
Group Value

・P/B Ratio below 1x・Expected growth rate plateaued from amarket perspective

CapitalInvestment(GrowthInvestment)

・Fell short of 30 billion yen growth investments
over the three-year period
・Investments impacted by revised
reorganization schedules resulting from delaysin acquiring land for plant construction

Dividend
Policy・Executed stable dividend increases with atarget payout ratio of 40%
・Repurchased a total of 6.6 billion yen ofcompany stock over the three-year
medium-term plan

Completed
integration

8

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

1.

Overview

32.

Long-Term Management Strategy
2035

9

3.

Medium-Term Management Plan 2026

16

4.

Supplementary Materials

26

9

02 Long-Term Management Strategy 2035:
Growth Investments (1)Maximizing the Value of Value Chains in Japan

Road Map

Maximizing the Value ofValue Chains in Japan•

Strive for a superior position in
the industry to win in mature
markets•

Relocate plants and strive for
optimal locations to reachmaximum optimization
throughout the company•

Generate ordinary profit of
5 to 10 billion yen throughgrowth investments of
100 billion yen

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

Processed
Food
Business

Growth Investments

Growth Investments

30 billion yen

70 billion yen[Processed Food Business 20 billion yen]
[Meat Business 10 billion yen]

[Processed Food Business 60 billion yen]
[Meat Business 10 billion yen]

New Mishima Plant

Ham & Sausage
New Kansai Plant~FY2026
Meat
Business

Ham & Sausage
New Kanto Plant

Cooked Foods
New Kanto Plant~FY2035

Reorganization of cattle & hog slaughtering,production and processing plants
Poultry Expansion and establishment of new production facilities

Exterior image of new Mishima Plant

Image of new poultry production farm

10

02 Long-Term Management Strategy 2035:
Growth Investments (1)Maximizing the Value of Value Chains in Japan[Repost]Maximizing the Value ofValue Chains in Japan
Strive for a superior position in
the industry to win in mature
markets•

Relocate plants and strive for
optimal locations to reachmaximum optimization
throughout the company•

Generate ordinary profit of
5 to 10 billion yen throughgrowth investments of
100 billion yen

Issues/Constraints

Our east and west flagship plant,
constructed over 50 years ago,
has reached the limits ofproductivity

initiatives

Reorganize both plants,
introduce continuous
production lines andother facilities to reduce
manufacturing costs;
invest 80 billion yen

Began construction of a Ham & Sausage plant inMishima, Shizuoka Prefecture
・Rebuilding the former Kenko Plant to be completed in
2026, investing 20 billion yen
・Labor saving and IoT, highly efficient plants withintegrated production lines, and doubled production
volumes[Plant Reorganization]
Reorganize the two main plants in Nishinomiya,
Hyogo Prefecture and Kashiwa, Chiba Prefecture
・Reorganize Ham & Sausage plants in locations closer
to the consumer
・Invest 30 billion yen each in two plants[Meat Business]

Issues/Constraints

initiatives

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

[Model Plant]〉•[Processed Food Business]

Aging current facilities, withlimited locations in Japan
suitable for new meat production
facilities, slaughtering &production plants, andprocessing plants

Expand andconsolidate existing
facilities and plants;
invest 20 billion yen[YONEKYU OISHII TORI CORP. ](Chicken production and processing)・Tottori: Expand poultry production[SANKYOMEAT INC.](Cattle & hog slaughtering, production and processing)・Consolidate certain facilities in Minami Kyushu into
exclusive cattle or hog operations

11

02 Long-Term Management Strategy 2035:
Growth Investments (2)Accelerating Growth of Overseas Businesses
and Expanding Into Growing Businesses

Accelerating Growth ofOverseas Businesses andExpanding Into Growing
Businesses•••

Promote investment inoverseas and growthbusinesses to capture growing
demand and increase profits
Expand Frozen Foods
Business and future fooddevelopment to reduce foodloss and ensure a stablesupply of protein in the longterm
Generate ordinary profit of
5 to 10 billion yen throughgrowth investments of
100 billion yen, including M&A(1) New Zealand(NZ) - ANZCO Foods(Production, slaughtering, processing, and sale of beef and sheep meat)

Issues/Constraints

initiatives

Higher productivity of slaughteringand processing

North
IslandContinue capital investments
to enhance productivity withreasonable and sufficientlabor
Reinforce and reorganize
plants in the North and South
Islands of New ZealandSouth
Island[ANZCO Foods Business Model]
Issues/Constraints• Healthcare: Establish a new plant forthe medical materials of bovine byproducts
initiatives[Own Brand Example]

Strengthen basic and internal
profitability besides market conditions• Slaughtering: Creation of value withpremium sales of beef and sheep
meat• Processing: Strengthen Own Brand

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

[ANZCO Foods Plant Locations]

Production
andSlaughtering
Business

Healthcare
Business

Processing
Business

12

02 Long-Term Management Strategy 2035:
Growth Investments (2)Accelerating Growth of Overseas Businesses
and Expanding Into Growing Businesses[Repost](2) U.S. - Develop Processed Meat Products and Cooked Foods Businesses
Issues/Constraints

Accelerating Growth ofOverseas Businesses andExpanding Into Growing
Businesses•••

Promote investment inoverseas and growthbusinesses to capture growing
demand and increase profits
Expand Frozen Foods
Business and future fooddevelopment to reduce foodloss and ensure a stablesupply of protein in the longterm
Generate ordinary profit of
5 to 10 billion yen throughgrowth investments of
100 billion yen, including M&A• Dispatch company salespersons and leverage IPC processed foods sales

network• Develop value-added cooked foods through technical skill cultivatedin Japan based on local needs• Consider building new plants in the future, depending on sales performance

initiatives

Indiana Packers Corporation(IPC)(Hog slaughtering, production and processing)・Joint venture with Mitsubishi Corporation(20% investment by the Company)
・Ranks seventh in the Americas in hog slaughtering and production capacity,with one of the largest single plants in the U.S.
・Focuses on improving manufacturing capacity for processed pork products,
acquiring two Ham & Sausage manufacturers in the past 10 years(3) Japan - Frozen Foods
Business Development
Issues/Constraints

Responding to customer needs forconvenient food preparation andreducing food loss

[Own Brand Examples](ham, sausage, bacon, etc.)(4) Future Food Development
Issues/Constraints

Responsibility to provide a stable future
supply of protein

initiatives• Strengthen development of plantbased foods made from plantderived ingredients• Research cultured meats that may
lead to disruptive innovation

Consider new frozen foodproduction lines and M&A
initiatives

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

Cooked foods yet to advance in U.S. markets, where the population continues to grow,and the economy continues to expand

13

02 Long-Term Management Strategy 2035:
Efficiency and Transformation Through DX

Efficiency andTransformation Through
DX
•

•

•

•

The declining work force inJapan is long-term issue forour company
Use DX to solve problems andachieve operational efficiency
and sales improvement at thesame time

Quantitative
Initiatives
Labor Market Outlook[Investments][Estimated Effects in FY2035]

・The number of domestic workers is
expected to decline 14% in 2040
(vs. 2022)

Upgrade enterprisesystem, etc. Executed
most of our 10 billion yen
investments

Achieve ahead of schedule

・The number of workers in the
manufacturing industry is expected to
decline by 21% in 2040 (vs. 2022)(10,000
people)Numbers of Manufacturing Workers
Down 21%

Reduce labor costs byimproving operational
efficiency, and generate
profit through increased
sales and cost reductions〉

Increase
Sales andReduce Costs+1 billion
yen

Qualitative
Initiatives[Implementation System]

Obtain public certifications as
Quantitative Initiatives[Human Resources
Development]

Support cross-company
execution through the DX
Promotion Office

Improve DX literacy throughtrainings and other means[Official Certifications]Obtain external certifications toenhance corporate brandCopyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

+1 billion
yen[Quantitative Effects]

Increase ordinary profit by
2 billion yen throughQuantitative Initiatives

Source: FY2023 Recent Statistical Survey Reports(Preliminary Report)
The Japan Institute for Labour Policy and Training

Streamline
Business

Promotion
Promotion
Structure
Structure

Human
Resources
Development

公的認定
Official
取得
Certifications

14

02 Long-Term Management Strategy 2035:
Sustainability

Reduce Greenhouse Gas Emissions• Achieve 50% reduction in FY2030 through energy conservation,

Sustainability
Contribute to sustainable
societies through decarbonization,
respect for human rights, andconsiderations for animal welfare

decarbonization, and use of renewable energy• Introduce Internal Carbon Price and identify necessary
investments(1) Conserve energy andpursue decarburization

Switch to energy-saving, highefficiency equipment

Human Rights• Interviews with foreign technical interntrainees: Complete at all locations in thethree years of the Medium-Term Plan

• Expansion of supplier surveys: Confirm
consistency with our human rights policy
through on-site visits

Convert to low CO2 emission fuels
Introduce solar power generation
Switch to renewableenergy electricity(2) Use renewable energy

Purchase Renewable
Energy Certificates(3) Reduce GHG fromlivestock

Utilize Carbon Credits(Under review)

Greenhouse Gas Emissions, CO2 conversion
375 thousand t
362 thousand t (Scope 1 and 2)

Animal Welfare• Introduce freestalls (hog):
In FY2024, the Company will introduce a
trial freestall system at our farms
We will verify the impact on sows andissues related to feeding management, etc(2) Use renewable energy

Electricity

188 thousand t(1) Conserve
energy andpursuedecarbonization

Fuel andFreon
LivestockDerived
FY2016
Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

FY2022

FY2030（ Halved from FY2016 ）• Install drinking water facilities atslaughtering plants: Complete installation ofdrinking water facilities at all cattle and hog
slaughtering plants in FY2024

15

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

1.

Overview

３2.

Long-Term Management Strategy 2035

93.

Medium-Term Management Plan
2026

16

4.

Supplementary Materials

26

16

03 Medium-Term Management Plan 2026:
Quantitative Targets
Medium-Term
Plan 2023
Prior Fiscal Year

Quantitative Targets•••

Strive for ordinary profit of
30 billion yen in FY2026,
the final year of this mediumterm plan
Respond in a timely manner tochanges in the external
environment, such as market
conditions
Raise basic earning power of
the Company mainly throughorganic growth

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

FY2023Results

Net Sales

Medium-Term
Management Plan 2026
FY2024Plan

FY2026
Plan

Final Year of the Plan
Compared to FY2023

955.6

970.0

1,000.0

+44.4

26.0

26.5

30.0

+4.0

Processed Foods

9.1

9.5

12.0

+2.9

Meat

18.1

18.5

20.0

+1.9

ROE

5.6%

5.6%

6.2%

+0.6%

ROIC

5.5%

5.5%

5.9%

+0.4%

Processed Foods

5.1%

5.2%

5.6%

+0.5%

Meat

8.0%

8.3%

8.7%

+0.7%

(Billions of yen)

Ordinary Profit(Billions of yen)17

03 Medium-Term Management Plan 2026:
Improve basic earning power[Processed Food Business]
Improve Basic Earning
Power
•

•

Increase sales through ourstrengths in product lineupsthat meet diverse needs andour marketing techniquesleveraging said lineups
Revise prices in response toexternal environments andcontinue reducing internalcosts to recover profits asquickly as possible

Renew Products

Revise Prices◆Continue to introduce new products

Increase in costs of raw materials, utilities, distribution, etc.
Effects of price revisions on profitability

・Frozen and room temperature products◆Strengthen product brands[Own Brand Examples]◆Revise prices in a timely manner in
response to external environments
・As prices for raw materials and other items remain
high, we expect FY2024 price revisions to offset
increased costs◆Replace low-profit products

Differentiate Marketing and Sales
Methods

Reduce Internal Costs◆Propose displays of entire product lines on
the retail salesfloor◆Improve productivity and yield by reducing
workforce, saving energy, and introducing
high-productivity equipment◆Cross-sell ITOHAM and YONEKYU brandproducts◆Reduce costs through revisions ofsuppliers and product standards

Begin Preparations for our Leap Forward◆Japan - Frozen food sales for retail
Sales target: 20 billion yen
Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

◆U.S. - Commercialization of Japanese-style
fried food18

03 Medium-Term Management Plan 2026:
Improve basic earning power[Meat Business]

Improve Basic Earning
Power
•

•

Strengthen sales through ourstrengths in our nationwide
sales network and the ANZCO
Foods sales network spanning
throughout over 80 countries

Enhance Sales - Own Sales Channels

Add Value◆Make the deliciousness of WAGYU
known to the world◆Expand by-product profits

・Sell in-house beef by-products fromthe new Towada plant・Sell by-products with higher degrees ofprocessing

・Start exporting high grade part of beef fromthe new Towada plant・Diversify sales methods to include chilled, small
packaged, and other products◆Develop Company Brand Meat Line

◆Unheated processed meats

・Expand lineup of convenient products
・Develop flexible products using price-competitive
raw materials
Domestic pork

Improve profit margins throughvalue-added meat products andadvancements in risk
management

ANZCO Foods
Beef imported from NZ

Enhance Risk Management◆Increase procurement sources to reduce
disease and geopolitical risks◆Review unprofitable transactions andpurchase terms

Simple productCattle slaughtering and processing facilities example:
seasoned meat
Operations launched in April 2024,
products
tripling processing capacity[Towada Meat Plant]◆Establish a more detailed inventory control◆ Manage credit and contract risk thoroughly

Begin Preparations for our Leap Forward◆Japan - Expansion of poultry production
farms
Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

◆NZ - Establish a new plant for the medical
materials of bovine by-products

19

03 Medium-Term Management Plan 2026:
Establishing a Sustainable Logistics System

Establishing a Sustainable
Logistics System•••

Establish a sustainablelogistics system with external
partners, for a stable supplyof products

Work toward relocating
facilities to streamline
logistics
target a 10% improvement intruck loading rate (stipulatedby the government) bypromoting Joint Delivery

Our Logistics challenges
Creating
Synergies

Warehouse
Shortages

Expanding
Delivery
Area

Aging

Establishing a Logistics System With
External Partners
Cold Food Manufacturers(Including the Company)

Cross-Industry
Collaboration
Logistics Provider

Business Partners(Retail and others)

1. Review of delivery driver operations
・Store displays
・Organizing the storage area on store
・Cleaning up of cardboard boxes, etc.

The 2024
ProblemEnvironmental
Considerations

Joint Delivery
Implementation

Relocating Logistics Bases

2024

2025

2026

[Processed Food Business]
Establish
new basein Kanto

Reorganize of Chugoku,
Shikoku, and Kansai
areas[Meat Business]
Reorganize WesternJapan areas
Reorganize EasternJapan areas[Establishing a new base in Kanto for theProcessed Food Business]

2. Review delivery terms to improve efficiency
Eastern Kanto
Area

・Extend delivery lead times by two or more days
・Plan orders for new products and special sales
・Review 365-day delivery

3. Implement joint delivery
・Consider joint delivery with cold food manufacturers
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Western Kanto
Area

20

03 Medium-Term Management Plan 2026:
Human Capital Initiatives

LongTerm
Strategy

Accelerate growth of overseas
businesses and expand into
growing businesses

Maximizing the value ofvalue chains in Japan

Make sustainableimprovements in earnings

Human Capital Initiatives•••[Human Resource
Development
Example]Management
Human Resources

Drive sustainable growth by
improving engagement throughhuman resource development
and fostering a corporate
cultureImplement basic initiatives andstrengthen management
support during the three-year
medium-term planJobrotation

Lead Sustainable Growth
Human
CapitalHuman
Resource
Development

Human resources that create newvalue and take initiative in facing
challenges to transform the future

Corporate
CultureFoster a corporate culture that
respects diverse values andencourages employees to growthrough new challenges

Set new KPI of 60%
engagement score in FY2026

Management
experience

Support skill
development

Offer diverse
career paths

Encourage
careerautonomy

DEIB

Work-stylereform

Supportive
management

Off-the-job
training

Increase Engagement
Basic initiatives
Diversity
・Increase career hires

Medium
-Term
Plan
2026

Reform・Pursue DX and sustainability

・Hire alumni employees ・Introduce an in-house secondary・Support woman's

employment systemempowerment

・Utilize external secondary
employment systems

Management Position Support
Challenge
・Promote employees tomanagement positions early on
・Train and select management
personnel
・Enhance training for select• Encourage supportive
management in each department
Conduct leadership trainings
Support specific departments based on
survey360°feedback
Strengthen one-on-one dialogue skills

individuals and voluntary trainings

Incorporate engagement score improvement into executive compensation
beginning in FY 2024
Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

21

03 Medium-Term Management Plan 2026:
Shareholder Return

Three-Year Medium-Term Plan Policy :Current Policy:

Shareholder Return•••

Introduce dividend on equity
ratio (DOE), which is lesssusceptible to performancefluctuations, as a shareholder
return indicator
Progressive dividend andapproximately 3% or higher
DOE without reducing dividend
per share
Start interim dividends fromFY 2024

Dividend payout ratio of 30-50%,
targeting 40% and stable dividend
increases
Dividend
Payout Ratio

Progressive dividend
DOE of 3% or higher
45.7%

47.5%

3.0%

43.9%
2.6%

2.7%

or higher

2.7%
2.7%

2.3%

DOE

40.8%
2.3%
30.6%

Dividend
Per Share(Yen)

Fiscal Year

35.2%

145
85

85

2018

2019

105

115

2020

2021

125

120

(Scheduled)

2022

2023

(Predict)

2024

2025

2026

0.3
0.6
1.5
0.6
5.0
1.0
Repurchase ofTreasury Stock billion yen billion yen billion yen billion yen billion yen billion yen
Total Return
Ratio
Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

50.2%

49.1%

37.7%

38.5%

69.7%

52.0%

* We implemented a reverse stock split (from five shares of common stock to one share) in October 2023.
Adjusted for reverse stock split assumptions, including prior years

2203 Medium-Term Management Plan 2026:
Cash Flow Allocation

Cash Flow Allocation•

Improve ability to generate
operating cash flow by
improving basic earnings power•

Use cash generated fromoperations for stableshareholder returns and growthinvestments

Results and Planned Cash Flows
Growth Investment (1)Growth Investment (2)Further value chain enhancements

Accelerated growth of overseas businessand growing business development

25 - 40 billion yen

30 - 45 billion yen

・Reorganize Processed Foods plants
・Expand and construct additional MeatBusiness bases and plants

・Strengthen and reorganize overseas plants
・M&A

Shareholder Return

Renewal Investments

Progressive dividend
DOE of 3% or higher

35 billion yen(depreciate over 12 billion yen per year)

Unit: Billions of yen
GrowthInvestments

85.0

55.0

150.0

-

Operating Investment
CF
38.6

87.8

Shareholder
Return17.4
FY2018-2020
Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

Investment

Operating
CF

50.2

120.0

120.0
RenewalInvestments

35.0
OperatingCF
Shareholder

51.8

ReturnShareholder
Return26.4

30.0

Medium-Term
Management Plan 2023
FY2021-2023

Medium-Term
Management Plan 2026
FY2024-2026

23

03 Medium-Term Management Plan 2026:
Cost-of-Capital-Conscious Management

Profitability and Capital Efficiency
Analysis
Cost-of-Capital-Conscious
Management
Enhance corporate value throughimplementation of Long-Term
Management Strategy 2035 andMedium-Term Management Plan
2026

initiatives to Enhance Corporate
Value

Comparison with capital costs projectedfrom a market perspective

ROE

FY2021

FY2022

FY2023

7.5%

6.4%

5.6%

Cost ofshareholders'equity

WACC

Equity costs
5.8%

5.5%

4% - 5%
ROIC
0.72

PER

≥

Improve basic earning power•

Business management using ROIC as an indicator✓Thorough inventory control✓Review unprofitable transactions and businesses✓Continue sale of policy shares

WACC

0.74

▶ 1) Increase ROE

•

0.81

•
1

2

Sustainablegrowthexpectations

Profitability
and capitalefficiency

Mid-Term Management Plan2026

≥

6.6%

PBR

×

5% - 6%
ROE

ROIC

PBR =

1 ROE

Pursue optimal financial leverage✓Higher DER depending on investments (up to 0.5)

Profitability and capital efficiency

Issue• Profitability declines despite exceeding

2

capital costs

Long-Term Management Strategy2035 ▶ 2) Improve PER

Future sustainable growth
expectations•• P/B ratio lower than 1x due to low market
expectations of company growth

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

•

Increase profits through growth investments
Strengthen management foundation to support
sustainable growth24

03 Medium-Term Management Plan 2026: Summary

SummaryLong-Term Management Strategy 2035
・Achieve our 2035 approach meat together
・Reach an ordinary profit of 50 billion yen including growthinvestments for profit growth and sustainable improvements inearning power
・Strengthen management foundation to support growth based on DX
and sustainability
Medium-Term Management Plan 2026
・Improve basic earnings power and achieve ordinary profit of over
30 billion yen
・Begin preparations for our leap forward through growth investments, andencourage growth through the medium-term management plan onward
・Use cash generated from operations for stable shareholder returns andgrowth investments

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

25

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

1.

Overview

３2.

Long-Term Management Strategy 2035

93.

Medium-Term Management Plan 2026

16

4.

Supplementary Materials

26

26

04 DX Initiatives

Business
Replacement
Efficiency

Quantitative
Initiatives

Qualitative
Initiatives

Streamline Business

Strengthen DX Promotion System• Introduce internal communication tools• Reduce operations through enterprise system• Strengthen collaboration between the DX

renewal• Build up RPA (Robotic Process Automation) ineach department• Use IC tags and image authentication for efficient
Order
Operations

Estimated
Effect1billion yen

inspection and inventory control• Improve efficiency of manual coordination

Establish New
DX OfficeHuman Resource Development• Hold ongoing training and improve DX literacy for
FosterMindsets

Increase Sales and Reduce Costs

Increase sales

Reduce costs

Reduce SG&A
expenses• External certifications• Enhance data analysis• Renew e-commerce site and promote sales using

processes through IoT• Pursue site-implemented RPA and no-code

Obtain Official Certifications

placed through our app• Improve efficiency of factory production

all employees
development• Transition from phone and fax orders to orders

customer data

-Launched DX Task Force in July 2022
-Reorganized into DX Promotion Office in April
2023

operations and optimize inventory

Increase sales

Promotion Office and each division and businesscompany

Penetration

Estimated
Effect1billion yen• Visualize logistics through optimal routing
Current
Initiatives• Enhance corporate brand strength
IT Infrastructure Ex.: Order App⮚ Transitioning phone and fax order operations to our order app
Increase sales by improving customer convenience⮚ Achieved effect of 0.2 million yen
Increase
sales

Improvebusiness
efficiency

Improveconvenience+
Accumulate and utilize order data

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

*Image27

04 Materiality and KPIMateriality

FY2023 Results(Progress Rate)

KPI (Target)

Realizing healthy andaffluent diet
GHG emissions (CO2 equivalent)
Half of FY2016 levels by FY2030 and net zero by 2050
Considering theenvironment

NEW

Creating a workplace
where each employee canactively participate

Promoting sustainableprocurement and stablesupply362 thousand t*1 (6.9%) *3

Energy consumption (intensity)
1% reduction each year, 3% reduction over 3 years, from FY2021 levels

9.53 GJ/t*1 (91.6%*2) *3

Water consumption (intensity)
1% reduction each year, 3% reduction over 3 years, from FY2021 levels

16.9 m3/t*1 (117.7%*2)

Waste emissions (intensity)
1% reduction each year, 3% reduction over 3 years, from FY2021 levels

90.9 kg/t*1 (114.7%*2)

Engagement Score (Percentage of positive responses to employee survey)
FY2026 60.0% or more

52.0%

Ratio of women in management positions *Major group companies in Japan
FY2030 10%

6% (60%)

Ratio of women in assistant manager level positions *Major group companies in Japan
FY2030 20%

11.8% (59%)

Ratio of paid leave utilization (per person per year)
FY2025 70%

71.1% (102%)

Recycling rate of animal feces
Maintain 100%

100%*1 (100%)

Healthcare Business net sales
FY2025 AUD 105 million

AUD 97 million (88.7%)

Ratio of supplier survey coverage
Implement annually for 80% of procurement amount starting in FY2022

Conducted at 163 companies

Elimination of gestation stalls (hog)Eliminate gestation stalls in favor of group feeding or freestall systems when building or reconstructing a new piggery for
pregnant sow

No new construction or renovation

Contributing to local
communities
Strengthening corporate
governancePursuit of uncompromisingflavor and high quality

Numbers of third-party food safety certification sites
Obtain at all production facilities in Japan by FY2023 (increase from 42 to 45 facilities)

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

Since we have reached our target year and achieved our goal,
we will set “maintaining 100% of third-party food safety certified
sites” as a KPI from FY2024 onward.

45/45 (100%)*1: Results indicate FY2022 figures, as FY2023 results are still being compiled *2: Progress toward the three-year 3% reduction target*3: Figures have been revised after third-party verification.

28

04 Management Indicator

Medium-Term Plan 2023 Period

Medium-Term Plan 2023 Period

Net Sales
Billions of yen

Operating Profit
Billions of yen

Profit Margin %Ordinary Profit
Billions of yen

Profit Margin %

※1

※1

※1

FY2020

FY2021

FY2022

FY2023

842.7

854.4

922.7

955.6

24.0

24.6

23.0

22.3

2.9

2.9

2.5

2.3

27.0

28.6

26.0

26.0

3.2

3.3

2.8

2.7

FY2020※1

FY2021 ※2※1

FY2023

Ordinary Profit and Profit Margin

3.2%*Rounded to the nearest
100 million yen

3.3%

Unit:
Billions of
yen

2.8%

2.7%

26.0

26.0

28.6
27.0

ROIC

Net Income
Attributable to Owners of
the Parent※1

FY2022

20.2

19.1

17.0

15.6

6.3%

6.6%

Billions of yen

5.8%
5.5%

ROE %

8.5

7.5

6.4

5.6
Dividend Payout Ratio and Dividend Per Share

ROIC %

6.3

6.6

5.8

5.5

45.7%

(Scheduled)

40.8%

Dividend Payout
Ratio %
Dividend Per Share Yen ※2

Share Buybacks
Billions of yen

30.6

35.2

40.8

105

115

120

45.7

35.2%
30.6%

125

(Scheduled)

105

15

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

6

50

115

120

125
(Scheduled)10*1: We began applying the Accounting Standard for Revenue Recognition and other standards in FY2021.
*2: We implemented a reverse stock split (from five shares of common stock to one share) in October 2023. Adjusted for reverse stock split assumptions, including prior years

29

04 Ordinary Profit Fluctuation Factors
Processed Food Business -4.7

+24.9

*Unit: Billions of yen (rounded to the nearest 100 million yen)
*We changed segments from product category units toorganizational units in FY2022.
Estimations of prior fiscal years assume these segment changes.

Meat Business +3.7

-29.7

(Breakdown)

Processed Foods 13.8
Meat 14.5
Others/Adjustments -1.3

+3.8

-2.5

(Breakdown)(Breakdown)

Volume factor+0.3

Market impact+1.6

Unit price factor+3.4

Feed prices -2.2

Meat
Domestic
Business
Internal factors

Meat
Domestic
Business
External factors

+2.4

+0.1

(Breakdown)
Processed Foods 9.1
Meat 18.1
Others/Adjustments -1.1

(Breakdown)

Volume factor -1.1

27.0

(Breakdown)
Unit price factor+27.2
Main raw materials-14.4(Includes +25.8
in price revisions) Sub-materials-10.4

Utility expenses-2.5

Production
Business -0.7

26.0

Logistics unit price-1.9

Logistics unit price-2.4
FY2020Ordinary
ProfitProcessed
Foods
Internal Factors

Copyright © 2024 ITOHAM YONEKYU HOLDINGS INC. All rights reserved.

Processed
Foods
External Factors

Meat
Overseas
Business

Others/Adjustments

FY2023
Ordinary
Profit30

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

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