Basic Strategy
Strategy by
Business Domain
Financial Strategy
Appendix© Kirin Holdings Company, Limited

2

Review of Medium-Term Business Plan

Implemented strategies ahead of schedule in response to changes in the environment.
Formed the foundation for the next MTBP*

Food & Beverages
DomainHealth Science
DomainPharmaceuticals
DomainDevelopment of high valueadded products
Beverage Business featuring
Health Science
Sale of dairy & drinks businessin Australia, etc

Vertical integration of the value
chain

Launch of three global strategic

Expansion of Lactococcus lactis
strain Plasma (LC-Plasma) products
Investment in next-generation
strategic materials

brands in multiple regions
Establishment of a global
management system

Streamline BS** by reorganizing business portfolio and selling cross-shareholdings, etc.

Corporate

Underpin Normalized EPS though share buybacks
Improve quality of corporate governance(diversity of the board of directors, compensation system, risk management)

The foundation for growth in the next MTBP (2022-24) is in place© Kirin Holdings Company, Limited* Medium-term Business Plan** Balance Sheet

3

Position and basic policy of 2022 MTBP

Accelerate growth by implementing business restructuring and create new value
Kirin Group Vision 2027 (KV2027)
A global leader in CSV, creating value across
our world of Food & Beverages to
Pharmaceuticals

New growth track
Focusing management resources on three domains

Built thefoundation oftransformation
2019-2021 MTBP
© Kirin Holdings Company, Limited

Increase profit inFood & Beverages
domainScale up businessin Health Science
domain2022-2024 MTBP

Achieving
KV2027

Strengthen global
base in Pharmaceuticals domain2025-2027 MTBP
4

Solving management challenges

Decided Withdrawal Policy of Myanmar BusinessFebruary 1st, 2021

Coup d'état

1 yearWithdrawal
Policy

2021

2022

Feb

Feb

Feb. 5th, 2021

Feb. 14th, 2022

【KIRIN HD】

Statement toterminate JV

Negotiations towards terminating JV including legal actions【KIRIN HD】

Decision on
Withdrawal policy

Since the announcement of the JV termination in February 2021, Kirin Holdings has implemented every
option including legal actions on the premise of continuing operations.
Both parties having been negotiating for about a year. Failing to reach an agreement, Kirin Holdings
determined that it would be difficult to quickly terminate the JV in the manner it desires (continuing local
operations by its own).
Kirin Holdings will prioritize divestment and proceed with discussions while giving due consideration to
stakeholders including employees.
© Kirin Holdings Company, Limited

5

Enhancing Corporate Value

Divest Non-core Businesses and Optimizing Business Portfolio

Business Portfolio Transformation
DivestNon-core Businesses

Invest strategically inCore Businesses

Share Buyback
Base decision on M&A investment opportunities, EPS goal achievement, stock
price, capital structure, expected use of cash reserves, etc.
For this time…

*
Additional shareholder returns byrepurchasing up to 50 bn yen© Kirin Holdings Company, Limited

6

Roadmap to 2024

Put the company on a new track to growth through sound measures

2022
Cost increase due to rising
raw material prices, etc.
Exclusion of Myanmar
business forecast

2023 - 2024
Further profit growth inexisting businesses
Accelerate developmentof health sciencebusiness

Generate profits throughprofit improvement measures© Kirin Holdings Company, Limited

7

Financial Targets

Aim for 10%+ ROIC, 11%+ CAGR of Normalized EPS by 2024
Capital Efficiency

Shareholder Value

ROIC

Normalized EPS Growth Rate (CAGR)

10% +

11% +

*

Normalized EPS Growth Rate

5.2%

6.0%

4.2%

8.3%

over 10%

158

136

156

157

ROIC

2019

2020

2021

2022

2024

2019

2020

2021

2022

2019-21 MTBP

2022-24 MTBP

2024

EPS 68 yen

86 yen72 yen137 yenAssuming the sameamount as theNormalized EPS(Reference)* Base year FY2021. Excludes the impact of 50.0bn yen share buyback announced in FY2022.

Guidance

Normalized OP Growth Rate (CAGR) 13%+
Base year FY2021© Kirin Holdings Company, Limited

8

Non-financial Targets

Change non-financial indicators to be more directly linked to economic value

BeforeThemesNon-financial Targets

ARP

CSV Commitment

CSV

HealthCommitment

Community
Environment

Approx. 20 Commitments
Approx. 40 Performance
Indicators

Brand

Organizational
Capabilities

Corporate Brand Value

Employees

Organizational
CulutreEmployee Engagement

Scores from nterbrand Japan

Items

Environment

Items

After

Climate Change

Containers andPackaging

Water resources

Employee engagement score

Health
Employees

Indicators linked to economic
value more directly© Kirin Holdings Company, Limited

ThemesProgress of
mid-term
health sciencestrategy

Organizational
CultureDiversity

Occupational
health and safety

Non-financial Targets New
GHG
Reduction rate of GHG emissions(Scope1+2 vs. 2019)

PET bottles
Recycling rate of resin for PET bottles

Water
Water use intensity at manufacturing sites
with high water stress

Links to Economic Value
Reduction of cost increases when introducing
carbon tax with energy saving effectProfit generation through value creation and stableprocurement of PET raw materials

Reduction of production cost and production
risk due to drought

Support Maintenance of
Immune Function

Increase in revenue and operating profit

Create new value in three priority
areas and synergies with pharmadomain

Profit generation by satisfying unmet needs
and creating new health value

Employee Engagement

Profit generation through value creation andproductivity improvement

Employee engagement score

Increasing Diversity
Ratio of female managers in Japan
Ratio of career hires in Japan

Occupational Injury
Lost time injury frequency rate

Profit generation through value creation andproductivity improvement
Raise motivation and productivity by
improving working environment

For key quantitative targets of non-financial indicators, please refer to Appendix page 26.

9Basic Strategy
Strategy by
Business Domain
Financial Strategy
Appendix© Kirin Holdings Company, Limited

10

Food and Beverages Domain

Profit structure reform by enhancing brands in existing businesses AND
exploring new businesses

Food and Beverages Domain
Kirin Brewery

Enhance main brands
Driven growth of high value-added products andservicesLion

Enhance core brands through marketing transformation
Accelerate growth of craft beer business in Australia
and North America
Kirin Beverage

Revitalize Gogo-no-Kocha and Nama-cha
Expand health science-related product line

© Kirin Holdings Company, Limited

11

Profit improvement measures for Food and Beverages Domain

Plan to improve profitability by approximately 30 bn yen over the next three years torealize profit growthProfit improvement
measures for next three
years in food &beverages domain

Approx.

+30 bn yen

Approx.

+19 bn yen(as compared to FY2021)

Kirin Brewery +4.3 bn yen
Lion +5 bn yen
Kirin Beverage +7 bn yen
Others +2.5 bn yen

Major Items
 SCM* cost

reductions
 SG&A** reductions

 Pricing（overseas

Approx.

+11 bn yen

businesses）

 Others

Profit improvement
measures© Kirin Holdings Company, Limited

Kirin Brewery +2.5 bn yen
Lion +5 bn yen
Kirin Beverage +0.9 bn yen
Others +3 bn yen

2022* Supply Chain Management2023-2024** Selling, General, and Administrative Expenses

12

Health Science Domain

Accelerate growth of health science businesses

Health Science Domain
Kirin Holdings

Consume Awareness of LC-Plasma
100%
Recognition rate of LC-Plasma name: target 80％

Enhance awareness and sales of LC-Plasma
Explore new growth opportunities and continue
collaboration with FANCL
Expand scale through M&A
Kyowa Hakko Bio

Establish production base for next-generation strategic
materials and overseas development
Synergies with pharmaceuticals business

Strengthen API business with Kyowa Hakko Bio’s
initiative© Kirin Holdings Company, Limited

80%
60%
40%

Recognition rate of LC-Plasma function: target 45％

20%
0%

2024
Next-generation Strategic materials
Immunity

Brain function

LC-Plasma

Citicolin

Human Milk Oligosaccharides
13Collaboration with Kyowa Kirin in Health Science Domain

Strengthen API business with Kyowa Hakko Bio’s initiative
BeforeValue creation by multiplying the use of Group assets
Proprietary process development capabilities
through fermentation biotechnology

Advan Industrial production of APIs using
unique fermentation technology
tage
Decisions made in accordancewith KV2027

Transferred Kyowa Hakko Bio
directly to Kirin Holdings
Kyowa Kirin

Kirin Holdings

Focus on in-house drug
development in areas
where advantages can beleveraged as a GSP*

Establish and foster
health sciencebusinesses

Portfolio managementthat enables maximum
utilization of Groupassets© Kirin Holdings Company, Limited(CMC**, Pharmaceuticals
affairs）

Development of high value-added APIs for new drugs in collaboration withpharmaceutical companies and global deployment
 As a CDMO***, it works as not just a contract manufacturer, but is
responsible for process development and manufacturing of APIs forclinical trials in collaboration with pharmaceutical companies todevelop APIs for new drugs.
 Develop high value-added APIs for new drugs using proprietary
fermentation technology.

Invest in API development for external
use by leveraging Kyowa Hakko Bio’s
advantages, which could not berealized under Kyowa Kirin.

Knowledge of global
drug development Differentiate by APIs that have high social value throughmanufacturing methods with low environmental impact.
*
**
***

Global Specialty Pharmaceutical company
CMC=Chemistry, Manufacturing, and Control
CDMO=Contract Development and Manufacturing Organization

2022 Construct investigational drug
manufacturing facilities
2025 Start operation
2029 Manufacture and sell APIs formarketing

Aim for 100 bn yen ofSales Revenue
14

Pharmaceuticals Domain

Accelerate growth of health science businesses andestablish a stable profit structure as a Global Specialty Pharma Company

Pharmaceuticals Domain
Kyowa Kirin

Drive growth of three global strategic brands
Continue to invest in global operating base including
sales channels and production lines for mid-to-longterm growth
Make steady progress of Next-generation Strategic
Products© Kirin Holdings Company, Limited

15

CSV / ESG Initiatives

Further Accelerate ESG Initiatives through CSV Management under new MTBPMSCI's ESG rating went up from A to AA, putting the company on par with the world's leading CSV companies

Environment

SocialGovernance

Environmental investment ofapprox. 10 bn yen over three years

Investment in human capital toenhance job satisfaction

Improve the effectiveness of the Board

Approx.10 bn yen will be invested in environmental
investments that will lead to GHG reduction, mainly
to achieve the SBT 1.5°C target during 2022-2024.



ICP* will also be used to make environmental
investment decisions on GHG reduction.



Increase the attractiveness of working at Kirin
Group by working to improve the labor
conditions of domestic Group companies basedon their performance results during MTBP period.



In addition, actively invest in human capitalthrough examination of comprehensive working
conditions, including skills development andworking environment improvement.

Compliance with TCFD new
guidanceMove ahead with disclosures that comply with the
TCFD new guidance, announced in October, 2021.

Assess the risks, opportunities and resilience ofstrategies of climate change to society andcompanies, and work on deepening scenario
analysis and response
measures to lead to
Kirin Grouppositive impact.

Focused areas in FY2022 are (1) “Business portfolio”; (2)“Formulation and implementation of strategy and its
monitoring“; (3) “Thorough understanding andimplementation of the Kirin Group Corporate Philosophy
which promotes CSV management and infiltration thereof”;(4) “Disseminating of wholesome company ethics”; and (5)“Risk management”.

Further address to sustainability
issuesLong-term plan to promote
active role of women

The number of meetings of the Kirin Group CSV
Committee and the frequency of reporting to the Board of
Directors will be increased from once to three times a year.

Formulated the Long-Term Plan for the
Promotion of Women's Activities 2030.

Promote diversity with the aim of achieving a
30% ratio of female management in Japan and a
30% ratio of female executives in Kirin Holdings.

Under the umbrella of the Kirin Group CSV Committee,
Group Environmental Council, Group Human Rights
Council, Group Health Management Promotion Council,
etc. will be established to strengthen discussion andresponse to the Group's materiality.

Environmental Report
2021 TCFD Section© Kirin Holdings Company, Limited*Internal Carbon Pricing: A carbon price that is set and used within a company.

16

Basic Strategy
Strategy by
Business Domain
Financial Strategy
Appendix© Kirin Holdings Company, Limited

17

Cash Allocation

Allocate approx. 700 bn yen of operating CF in definitive priorities
Priority

High

Low

Dividends
approx.

230 bn yen

CAPEX

 Continue to maintain a

Infrastructure
Investments

approx.

700 bn yen

FY22-24

OperatingCF

dividend payout ratioof at least 40% of
Normalized EPS

 IT Investment: 60 bn yen
 Health Science: 25 bn yen Environmental Investment: 10 bn yen

approx.
220 bn yen

GrowthInvestments Pharmaceuticals Domain: 60 bn yen over
 Health Science: 35 bn yen

approx.

180 bn yen
Share Buybacks

M&A
Dividends and CAPEX within the scope of operating CF（P19）

Investments

BS /Portfolio
Management

100 bn yen over

Make decisions with flexibility,
taking into account investment
opportunities and the balanceof cash inflows and outflows
generated by the sale ofbusinesses, etc.

M&A investments by optimizing business portfolio (see page 20)© Kirin Holdings Company, Limited18

Three-year cash flow plan by domain (excluding M&A investment)

Secure entire Group’s cash balance through investment strategies that match eachstage of the business*

Operating CF
Investing CF
Free CF

2022

2023

2024

2022

2023

2024

2022

2023

2024

Food and Beverages Domain

Health Science Domain

Pharmaceuticals Domain

Steady cash flow generation

Invest group management
resources to grow operating
CF

Make investments with
operating CF generated by
the Pharmaceuticals Domain© Kirin Holdings Company, Limited*Investment CF include projects in the planning stage at the time the MTBP was formulated.
Plans and timing of implementation may vary.

19Financial Strategy of 2022-2024 MTBP

Enhance corporate value through financial strategies

Outline of Finance Strategy

ROIC（Capital Efficiency）

Normalized
EPS(Stockholder Value）

OP
amount/rate（Profit Growth）

Cash generation through BS / PF* management


Asset reduction of 100 bn yen or more (global CMS** implementation, CCC***
improvement through SCM efficiency improvement, etc.)

Divest non-core businesses

Disciplined investment to acquire growth drivers

Accelerate investment for growth with a focus on health science
Put a premium on investment efficiency to achieve ROIC target

Flexible shareholder return policyPrioritize investment for growth, but flexibly implement sharebuybacks© Kirin Holdings Company, Limited* BS: Balance Sheet, PF: Portfolio** CMS: Cash Management System*** CCC: Cash Conversion Cycle

20

Basic Strategy
Strategy by
Business Domain
Financial Strategy
Appendix© Kirin Holdings Company, Limited

21

Review of 2019-2021 MTBP

KPI

Normalized EPS
Financial
Targets
ROIC

Non-financial
Targets

Targets
CAGR as compared to 2018

5% +By FY2021

10% +CSV Commitments*

19 Commitments(47 Performance Indicators)

Corporate Brand Value

US$ 2.2 bn+

Employee Engagement Score© Kirin Holdings Company, Limited

By FY2021

By FY2021

72% +Status-2.2%（156 yen）

4.2%
Some of other targets were not due to
COVID-19-related movement restrictions
while environment targets were steadily
addressed and achieved while.

US$ 2.476 bn

72%

See our website fordetailed results of
CSV Commitments

22

Sale of cross-shareholdings

Sold About 77 bn yen of cross-shareholdings during 2019-2021 MTBP

Amount soldduring past 13 years

180 bn yen

approx.

© Kirin Holdings Company, Limited

Amount soldduring 2009 - 2018

Amount soldduring 2019 -2021

101.5 bn yen

76.8 bn yen
23Group Materiality Matrix (GMM)

Kirin HD Website(GMM)

Revision of Management Issues for Sustainable Growth

Updated management issues, which are revised every three years and are a prerequisite for the formulation of the MTBP.
Strengthen management resilience by growing our business through sustainability.
A responsible Alcohol producer
Creating bondand trust forpeople's wellbeinglarge

Impact on Stakeholders

Helping to improve
the performanceof brain functions
and prevent theirdeclineMed
ium

Improvement ofaccess tonutrition

Ensuring tax
transparency

Health and well-being

Community Engagement

Fulfillment ofUnmet Medical
Needs

Sustainable
development ofcommunities in raw
material production
areas and businessdevelopment regions

Sustainable useof biologicalresources

Sustainable useof waterresources

Sustainable
recycling ofcontainers andpackaging

Overcoming
climate change

Support for theprevention of noncommunicablediseases

Promotingcompliance

Enhancing the
Sustainability offood economy

Building
sustainablelogistics

Countermeasuresagainst cyberattacks

The environment

Other Material Agenda and Governance

Dealing withalcohol-related
problems

Ensuring
food safety
and security

Stable supply,
safety andreliability as apharmaceuticalproducer

Respect
for humanrightsSupport for
maintaining
immunity

Ensuring
occupational
health andsafetyHuman resource
development
to realize
innovation

Promotingdiversityand inclusion

Improving theeffectiveness ofcorporate
governanceReinforcing risk
management

Protectionof personal
information

Implementationof healthmanagement

Realization ofa vibrant
workplace/cultureStrengthen
group
governance

smal

smal

Med
ium

© Kirin Holdings Company, Limited

Impact on the Group's business

large

24

Kirin HD Website(CSV Purpose)

Revision of CSV Purpose, CSV commitment

Kirin Group established a CSV Purpose corresponding to each of its four CSV key issues "A Responsible Alcohol Producer,""Health and Well-being," "Community Engagement," and "The Environment“.
Updating the "Community engagement" section in CSV Purpose due to the impact of Covid-19.
Based on GMM and CSV Purpose, CSV commitments are set to be achieved over the period of the Mid-Term Business Plan.
CSV Purpose

CSV Commitments
Advancement from 2019 MTBP

After / 2022 MTBP

A responsible
Alcohol
producer Performance indicators will not be added orchanged, but targets will be set anddisclosed for each operating company(currently, only group targets are disclosed)

Community Engagement

Create positive forces
for people’s wellbeing and society by
developing
communities
Before / 2019 MTBP

Health andwell-being

 Set for a wide range of social issues,

including brain function as well as
immune function

 Human rights added in response to

Community
Engagement

revision of GMM
 Reviewed the social value to be createdin response to the revision of CSV Purpose

Community Engagement
Create more opportunities forcustomers to spend time with
their families and friends, anddevelop the communities
within our supply chain© Kirin Holdings Company, Limited

 Set and disclose targets by operating

The
Environment

company for climate change and biologicalresources (currently, only group targets aredisclosed) Newly set targets for water resources25

Non-financial Indicators List in 2024
Non-financial Indicators

Climate Change

Reduction rate of GHG emissions

Containers
and Packaging

Recycling rate of resin for PET bottles
Water use intensity at manufacturing sites with high water stress

Under 3.0 kL/kL

Lion (Australia)(Under 2.4kL/kL in 2025)

Progress of
mid-term
health sciencestrategy

1. Recognition rate of LC-Plasma function in Japan 2. Number of people continuing to take LC-Plasma

Organizational
CultureEmployee engagement score

Employees

Water Resources

HealthThemesEnvironment

Items(Scope1+2 vs. 2019)（Water use intensity ＝ Water usage / Production amount）

Achievement level in supporting the maintenance of immune function

Diversity

Occupational
health and safety© Kirin Holdings Company, Limited

Achievement level of new value creation in the immunity, brain function,and intestinal environment domains and Achievement level of promotionof collaboration with pharmaceuticals domain

Achievement level in “Increasing diversity”*2
1. Ratio of female managers in Japan 2. Ratio of career hires in Japan

Lost time injury frequency rate*3

Target Level in 2024
23%
(50% in 2030）

38%(50% in 2027）

1. 45% 2. 1,900,000 people(1. 50% in 2027）

Not disclosed*175%
1. 15% 2. 30%
0.95(0.40 in Japan)*1 Specific indicators and target levels are not disclosed for strategic reasons, as they include content related to intellectual property.
*2 The target group is employees of Kirin Holdings.
*3 Major group companies that have production and logistics functions within the group will be included. Partner companies within the plant premises are also included.

26

Basic Strategy of Health Science Domain

Continue the basic strategy demonstrated on Investor Day toward MTBP that generate results

See presentation slides (healthscience part) from Investor
Day on Mar. 3rd. 2021

© Kirin Holdings Company, Limited27

This material is intended for informational purposes only and is not a solicitation or offer to buy or sell securities
or related financial instruments.