KIRIN CSV REPORT

2021

KIRIN CSV REPORT 2021

The Kirin Group

Growth Drivers

CSV Stories

GovernanceBusiness Progress

Financial Data/
Company Information

CONTENTS

01

KIRIN CSV REPORT 2021 CONTENTS

2

Editorial Policy/
Publications Available on Kirin’s Global Website

3

The Kirin Group

8COVID-19 Impact Analysis and Response

10Interview with Top Management

16

Interview with
the Chief Financial Officer

20

Kirin’s Value Creation Model

21

Financial and Non-financial Highlights

23

Growth Drivers

24

30

34

SpecialFeature1

SpecialFeature2

SpecialFeature3

38

CSV Stories

50

Governance

39

Kirin Group CSV Purpose and CSV Commitment

51

Evolution of the Corporate Governance System

42

Complying with TCFD Guidelines: Scenario Analyses

52

Corporate Governance Systems

53

Directors, Audit & Supervisory Board Members,
and Executive Officers

55

Message from the Independent Non-executive
Director

58

Enhancing Management Effectiveness59

Expertise and Experience of Directors,
Audit & Supervisory Board Members,
and Executive Officers

60

Executive Officer Remuneration

62

Risk Management

66

Business Progress

67

Fiscal 2020 Segment and Business Overview

73

Financial Data / Company Information

74

Management Analysis of Financial Position,
Operating Results, and Cash Flows81

10-Year Summary of Key Financial Data

82

Investor Information / Company Information

83

Third-Party Evaluations

44

Health and1 Well-being

CASE—Pharmaceuticals Business—

Creating an environment inwhich society is aware of
the wishes and needs of patients46

2 The Environment

CASE

Our goal: to achieve
the decarbonization of society
through the group-wide
reduction of GHG emissions

Health Science Strategy

Human Resource Strategy

Digital Transformation Strategy

48

3

CASE

Community
Engagement

Growth in partnership withproduction areas—bringing Château Mercian to the world

KIRIN CSV REPORT 2021

The Kirin Group

Growth Drivers

CSV Stories

GovernanceBusiness Progress

Editorial Policy

Publications Available on Kirin’s Global Website

The Kirin Group Vision 2027 (KV2027) adopted in fiscal 2019sets the long-term management vision for the Group to
become a global leader in CSV by creating value in the Food &Beverages and Pharmaceuticals domains. The KIRIN CSV Report
2021 outlines activities underway to fulfill our commitment torealizing KV2027. In the report, the Kirin Holdings CEO and CFO
discuss the COVID-19 pandemic’s impact on the Company’sbusiness and management’s response, and they describe
initiatives being undertaken in fiscal 2021 to achieve theobjectives of the next medium-term management plan. As inlast year’s report, this year’s report includes special sections on
the progress of the three core strategies to grow business in
the Group’s focus area of the Health Science domain and todevelop the human resources needed to strengthen theGroup’s organization capabilities from the previous year alongwith the new strategy to bring about the digital transformationof the Group. We hope this report will help readers understandhow the Kirin Group is using its CSV management andadvancing its competitive technological capabilities to help
address social issues through its business operations.

Kirin’s global website offers a wide range of clearly presented
information for stakeholders, including annual integrated
reports, data books, and reports covering environmental
initiatives, corporate governance, and financial results.
For more details about financial results, ESG-related data,and other aspects of the Kirin Group’s performance, pleaserefer to the following publications and webpages.

* This report was prepared with reference to the International Integrated Reporting
Framework of the International Integrated Reporting Council (IIRC) and the Guidancefor Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative
Value Creation of the Ministry of Economy, Trade and Industry.
* Period covered is fiscal 2020 (January 1, 2020 to December 31, 2020). Certain activities
occurred in fiscal 2021.
Cautionary statement regarding forward-looking statements
Statements in this report that are not historical facts are forward-looking statements
based on plans and expectations for the future. Accordingly, these forward-looking
statements are subject to risks, uncertainties and other unpredictable factors, and may
differ considerably from actual results, business performance, and other future events.
In addition, forecasts of fiscal 2021 financial results were decided as of the disclosure offinancial results on February 15, 2021.

Financial Data/
Company Information

CONTENTS

02

ESG Data
Periodically updated
Kirin Holdings presents environment, society, and governance (ESG)
data for recent years at the following website.
https://www.kirinholdings.com/en/investors/esg/esg/

2019–2021 Medium-Term Business Plan
Published in February 2019

CSV Report 2021
Published in May 2021
The entire booklet version of this CSV Reportis also available on Kirin’s website and for
download as a PDF, along with integrated
reports published in recent years withfinancial and non-financial results, anddescriptions of the initiatives taken in eachyear to increase corporate value.
https://www.kirinholdings.com/en/investors/library/integrated/

Environmental Report

The webpage features the 2019–2021 Medium-Term Business Plan,
the Group’s first three-year plan focused on realizing the KV2027
long-term management vision.
https://www.kirinholdings.com/en/purpose/management_
plan/#headline-1615513803

Corporate Governance Report
Published in April 2021
The report provides information on the Group’s approach to andsystem of corporate governance, maintained in compliance with the
Corporate Governance Code of Japan.
https://www.kirinholdings.com/en/purpose/governance/governance/

Scheduled for publication in July 2021
The report presents the Kirin Group’s annual environmental activities
and how it makes use of the unique characteristics of its businesses inenvironmental initiatives.
https://www.kirinholdings.com/en/investors/library/env_report/

Consolidated Financial Statements
Published on March 31, 2021

Market data and Sales (former Data Book and Sales Reports)
Periodically updated
The book presents data about the Group’s business markets,
pharmaceuticals development pipeline, and historical financial data.
https://www.kirinholdings.com/en/investors/library/databook/beer_region/

Compiled in accordance with Article 24-1 of the Financial Instruments
and Exchange Act of Japan, the report includes Kirin Holding’s financial
statements along with an overview of its recent performance, businessresults, facilities, and operations.
https://pdf.irpocket.com/C2503/ng2K/n08e/kf4Q.pdf

KIRIN CSV REPORT 2021

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Growth Drivers

CSV Stories

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Financial Data/
Company Information

CONTENTSThe Kirin Group
Expanding our business domains using
technological capabilities cultivated fromthe core business
The Kirin Group is using its fermentation and biotechnology tospur innovation and expand its business domains.
The culture technology and research cultivated in ourcore beer business enabled us to develop products in the
Health Science and Pharmaceuticals fields as we organically
expanded our business domain.
We will continue to pursue innovation that willcontribute to solving social issues in the three areas of Food,
Health Science, and Pharmaceuticals and that will enable ourbusiness to grow sustainably with society.

HealthScience

Value
Creation
PharmaFood

Innovation

Core technology that assures value creation

Core Competencies

Fermentation and Biotechnology

Organizational ability toaccomplish innovation

Consumer-centric ICT accelerating Diversity and inclusion,
marketing expertise value creation
culture of innovation

03

The Kirin GroupKIRIN CSV REPORT 2021

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04

The Kirin Group

History of CSV
Kirin has been practicing CSV management since its founding and advancing innovation to address social issues through its business.
CSV management continues to drive our efforts to create social and economic value and promote ongoing sustainable growth.

1907

1980

1993

2007

2009

2015

Kirin Brewery Company
established by taking
over management ofJapan Brewery

KIRIN LIGHT BEER
introduced, Japan’s ﬁrst
low-alcohol (3.5%) andlow-calorie (30% less) beer

A lightweight, recyclable
bottle developed andtested, which improves
distribution eﬃciency,
resulting in less energy
consumption and CO2
emissions

Collaboration with Tono
City begun to spur
regional revitalization
with a sustainableproduction system forJapanese hops

KIRIN FREE introduced,
the world’s ﬁrst 0.00%
non-alcoholic beer,
aimed at helping
eliminate driving while
intoxicatedKirin Perfect Free
non-alcoholic beer introduced
as Foods with Function Claims(FFCs) for suppressing fat
absorption and moderatingsugar absorption

1928

1982

2003

2012

2013

2014

2020

Kirin Lemon with all naturalingredients introduced
following the unconventional
philosophy
that artiﬁcial
coloring
should be
strictly
avoided forthe good ofnational
healthKirin combines its advanced
biotechnology andfermentation technology
from its brewing operations
to begin its drug discovery
business that yielded its ﬁrst
commercial product in 1990

Vineyard operations using
converted undeveloped
land launched by Mariko
Vineyard

Kirin Mets COLA
introduced, the ﬁrst
cola beveragedesignated as afood for speciﬁed
health use

Support eﬀort begun
to tea plantations in Sri
Lanka to obtain
Rainforest Alliancecertiﬁcation to improve
farming sustainability

Kirin Yasashisa NamachaCaﬀeine Zero
introduced, the world’s
ﬁrst caﬀeine-freegreen tea beverage in a
PET bottle

New iMUSE brand products
introduced with Japan’sﬁrst FFC registered for
immune function

2020
KIRIN ICHIBAN ZERO
introduced, Japan’s ﬁrst
sugar-free beverage in thebeer category

The Kirin GroupKIRIN CSV REPORT 2021

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CONTENTS

05

The Kirin Group

Building a unique business portfolio
responsive to changes in the operating
environment
The Kirin Group formulated its first long-term management
vision in 1981 and stepped up its efforts to diversify its
management. The Group has a unique business portfolio
encompassing Food, Pharmaceuticals, and Health Sciencefrom which it will continue creating new value for society.

Beer

Beverages, food,and other products

92.3%

7.7%

Consolidated revenue

Consolidated normalized operating proﬁt

Japan Beerand Spirits

Japan Beerand Spirits

35.2%

36.4%

FY2020Japan
Non-alcoholic
Beverages

Japan
Non-alcoholic
Beverages

Consolidated revenue

1,849.5 billion yen

13.6%

Oceania
Integrated
Beverages

10.5%

Oceania
Integrated
Beverages

Consolidated normalized
operating proﬁt

162.1billion yen

15.8%

10.6%

Pharmaceuticals

Pharmaceuticals

OthersOthers

28.4%

17.2%
FY1980
Revenue

18.2%

855.8
billion yen

14.1%
Company

Segment

Japan Beer and Spirits• Kirin Brewery

Japan Non-alcoholic Beverages• Kirin Beverage

Oceania Integrated Beverages• LionPharmaceuticals• Kyowa Kirin

Others• Mercian • Myanmar Brewery• Coca-Cola Beverages Northeast• Kyowa Hakko Bio
OthersFood & Beverages

Pharmaceuticals

Health Science

The Kirin GroupKIRIN CSV REPORT 2021

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CONTENTS

06

The Kirin Group

Applying our management philosophy system as we aim to become a global leader in CSV
The Kirin Group’s Corporate Philosophy

KIRIN brings joy to society by crafting food and healthcare products
inspired by the blessings of nature and the insights of our customers
2027 Vision

A global leader in CSV, creating value across our world of Food & Beverages to Pharmaceuticals“One KIRIN” Values
Our gratitude to our stakeholders for

Our determination to continuously

Passionprovide our customers and society withnew value propositions based on

Integrity

always helping us move forward, andour promise to remain honest andOur respect for diﬀerent perspectives

Diversityand values that enable constructive
discussions, and our belief that theinnovative ideas, and our enthusiasm tohumble in every business activity to“diﬀerences” have the power to change

meet goals with pride in the companies

serve them better.

the world and create better solutions.

we work for and the brands we oﬀer.

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07

CONTENTSThe Kirin Group

Embracing the new management
philosophy systemworldwide are actively working to realize sustainable growthby putting our CSV concept into practice.

In February 2019, the Group formulated the Kirin Group Vision
2027 (KV2027) and adopted a new management philosophy
system to serve as its long-term management vision forbecoming a global leader in creating shared value (CSV).
Since 2019 Kirin Holdings has been implementing
measures to instill the management philosophy, vision, andthe “One KIRIN” Values across the Group. Much progress has
been made at many companies, and in 2020 the Company
began incrementally shifting leadership of the measures tothe core domestic operating companies and otheroperations. In 2021, while continuing to deepen employee
understanding of the management philosophy system, theCompany plans to review the measures under way anddevelop new initiatives to further instill our philosophy andvalues in all our Group companies in preparation for the next
medium-term management plan starting in 2022.
Under these initiatives, the Group’s 31,151 employees

New KIRIN Now intranet website created to advanceinternal branding initiatives
We have responded to the COVID-19 pandemic conditions
by shifting from office-based working to accommodating
work-at-home and various workstyles, and by refashioning
the KIRIN Group newsletter for online promotion ofinternal branding.
We have also created an all-new KIRIN Now intranet
website to rapidly deliver management information anddeepen employee understanding of KV2027. We arepreparing the website to be accessible to all Kirin Group
company employees worldwide.
The new website launched inJapan in June 2021 and isscheduled to come online forGroup companies overseas
beginning in 2022.
The internal website gateway page

Activities to promote the management philosophy system (2021)

Main
measures

Measures implemented in 2020
The CSV Awards
Kirin Brewery follows specific guidelines for applying theThree CSV Principles of thinking of the consumer first,
working first for the benefit of society and then for the
benefit of the company, and field leadership with head
office support.
The CSV Awards created in 2019 encourages andhighlights good employee practices that embody theseprinciples in daily activities. In the two years that theawards have been offered, thenumber of submissions for award
consideration has increased

Number of submissions
for CSV Awards
816

dramatically as more employees
are thinking about and finding

212

ways to integrate CSV into theiractivities and work strategies.

20192020 (FY)CSV Experience
The Kirin Group offers several CSV Experience programs topromote employee understanding of CSV.
Mercian hosted one such program in October 2020

Practice and experiencemeasures

Activities designed to promote the understanding and embodiment of management philosophy system, such as direct
experience with CSV and surveys to assess the degree of ability to demonstrate the values

where 38 employees from Kirin Group companies acrossAwards of recognition

The KIRIN Group Award and other awards to recognize outstanding efforts related to the management philosophy system

Japan visited the Château Mercian Mariko Winery toCreating and offering
training programs

Various online and in-person training programs related to the management philosophy system

Dialogue and forums

Opportunities to communicate through dialogue and department forums, such as discussions with corporate officers andworksite and department managers

Improved information
communication structureGroup-wide communications enhanced by switching the formerly paper-based KIRIN Group newsletter to the KIRIN Now intranet website
in 2021. The website is being launched in Japan in 2021 and is being prepared to launch for Group companies worldwide beginning in 2022.

participate in vineyard operations, a lecture and tour, and aconversation with people from the local community andgovernment. In a survey after the program, participants said
they had “a better understanding of CSV” and shared what
they learned with their companies.

The Kirin GroupKIRIN CSV REPORT 2021

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08

COVID-19 Impact Analysis and Response
Social trends and the Kirin Group action
FY2020Measures to minimize
risk and sustain
operations• Social trends• Kirin Group action

1st quarter2nd quarter3rd quarter

4th quarter• WHO veriﬁes the outbreak of
COVID-19• Australia bans indoor eating at restaurants• The United States closes commercial
facilities, schools, and restaurants• Myanmar restricts business operationsin Mandalay, issues stay-at-home orderin Yangon• Japan issues nationwide stateof emergency• Japan launches “Go to Travel”
campaign• New infections drop sharply inAustralia and New Zealand• Myanmar restricts restaurant operations amid rising infections• Japan launches “Go to Eat” campaign

January

April

July

• Company task force created• Non-urgent investment frozen,
priority on securing liquidity• “Kirin Group’s Basic Policy andInitiatives in Response to theIncreasing Novel Coronavirus
Infections” announced• KIRIN Work Style 3.0 “Job Satisfaction” reform* launched,work-at-home system expanded

August• Company-wide cost reduction measures announced

Company action for
employees and society

March

April

December• Lion collects unused kegs products
from restaurants at no charge• Myanmar Brewery and its business partners
donate funds for ventilators, patient monitors,
and other medical devices to the National-Level
Central Committee on Prevention, Control andTreatment of Coronavirus Disease• Kirin Brewery, Kirin Beverage, andother Kirin Group companies
distribute iMUSE products to
manufacturing and distribution
division employees to ensurebusiness continuity• iMUSE beverages donated to Tokyu
Railways and the JR East Group• Minister of Economy, Trade andIndustry presented a letter ofappreciation to Mercian Group
company Daiichi Alcohol for increasing
production of medical supplies for the
COVID-19 pandemic* Reform program to encourage employees to develop a self-motivated work ethic and to continually consider the meaning and purpose of their work by improving their work conditions in the four areas of selecting their work location, fully utilizing system and IT tools, enabling more
flexible work conditions, and establishing new communication styles.

The Kirin GroupKIRIN CSV REPORT 2021

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09

CONTENTS

COVID-19 Impact Analysis and Response
Post-COVID-19 business recovery outlook
Beer and beverage market outlook*1
Food & Beverage domain businesses that were strongly impacted by the COVID-19 pandemic in fiscal 2020 are generally expected to improve in fiscal 2021, although the Japan, Australia, and
New Zealand markets are not projected to recover to fiscal 2019 levels.
*1 Market forecasts as of the financial results announcement on February 15, 2021

Kirin Brewery*2

Kirin Beverage*2

On-premise sales expected to stop declining and gradually recover.

Oﬀ-premise

On-premise

Convenience store (CVS) channel sales expected to recovermoderately, while vending machine channel sales expected tocontinue struggling.
Mass retail

Total

140%

CVS

Vending machineOﬀ-premise sales expected to gradually settle as on-premise
sales recover.
Oﬀ-premise

Total

120%

-8〜-11%

2020

2021

(FY)

(estimate)Total+2〜+3%-0〜-5%-0〜-5%-5〜-10%

100%

100%

-5%
-7〜-8%-14〜-15%-30〜-35%
2019

On-premise

140%-3〜+3%

100%

60%

Lion (Australia and New Zealand)*2,3

80%

2019

2020

2021

(FY)

60%

(estimate)

2019

2020

2021

(FY)

(estimate)*2 Sales volume comparisons based on fiscal 2019 market estimates = 100%.
*3 Market estimates for fiscal 2020 have been updated based on market data since the fiscal 2020 financial results announcement on February 15, 2021.

Kirin Group medium- to long-term outlook
The changes to the business environment caused by the
COVID-19 pandemic presented greater risk thanmanagement anticipated; however, the Group has vastly
revised its business model and profitability structure forthe “new normal” conditions and is stepping up initiatives
to achieve the KV2027 long-term management vision.

2019–20202021–2022

2023–2024

Pandemic

New Normal

Post COVID-19

Minimizing the impact of COVID-19

Creating a starting point for change

Accelerating growthWith a consistent strategy
and cost control

Transformation of business modeland proﬁtability structure

New value creation for achieving KV2027

KIRIN CSV REPORT 2021

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CONTENTS

10Interview with Top Management

Accelerating growth by intensifying
CSV management within the
difficult COVID-19 environment

Yoshinori Isozaki
President & CEO

KIRIN CSV REPORT 2021

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11

Interview with Top Management

Change brings opportunities to further
reforms that fit the “new normal”
Q1. How has the Kirin Group responded to the COVID-19
pandemic?
First, allow me to express my sincere condolences to those
who have lost loved ones to COVID-19, and my heartfelt
sympathy to all who have suffered. I would also like to pay
tribute to the authorities fighting contagion, and to the
medical professionals working night and day to save lives.

COVID-19 has impacted the economy, society, politics,
and other areas, upending people’s lives worldwide. Outof-home drinking has plummeted due to stay-homedirectives, movement restrictions, and shortened businesshours in the hospitality industry. Beverage sales in Japan
have declined at both business-district convenience storesand in-office vending machines. The Kirin Group has been
affected by all of these changes.
Spanning business domains from food & beverages topharmaceuticals, the Group prioritizes the health andImpact of COVID-19

Negative impacts• Decline in the real economy• Signiﬁcant decrease in opportunities to
eat out• Decline in demand for soft drinks at
oﬃce vending machines, convenience
stores, and for alcoholic beverages andsoft drinks at events• Restrictions on employee activities

Positive impacts

Restrictions on going out,
increase in
at-home demand,and restraints
on immigration, etc.

• Strong sales of health-related products
and LC-Plasma related products due to
growing immunity and health needs
See Special Feature 1: Health Science Strategy(Pages 24–29)• Increase in oﬀ-premise sales driven by
at-home demand• Job Satisfaction Reform
See Special Feature 2: Human Resource Strategy(Pages 30–33)• Increasing importance of going digital
See Special Feature 3: Digital Transformation Strategy(Pages 34–37)

safety of its employees and their families as essential tofulfilling our ongoing responsibility to supply products andservices. We have taken measures to mitigate the risk ofcontagion in our manufacturing and logistics functions, andwe distribute immune-system-supporting Lactococcus lactis
strain Plasma (LC-Plasma) products to those employees
whose jobs preclude working from home.
In addition, to minimize face-to-face meetings andtravel, the sales and administrative departments havepromoted remote work, using technology and sharedoffices, for example. We are also incorporating
motivation boosting elements into our company-wide
work-style reform (“Job Satisfaction Reform”) to adapt
to the new normal.

Expediting reforms of business andprofitability structures with a view toward
the next MTBP
Q2. What are the key points to note about current MTBP
(2019–2021) progress and initiatives for 2021?
The COVID-19 pandemic adversely affected performancefor fiscal 2020, particularly in the food & beverage domain.
Consolidated revenue and normalized operating profit
decreased, although profit attributable to owners of thecompany increased YoY due to the previous term’s
impairment losses at Lion Dairy and Drinks. Meanwhile,

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12Interview with Top Management

each of our companies persevered in cost control andimproving productivity, thereby minimizing cash flow impact.
In fiscal 2021, the final year of the current MTBP, wewill implement reforms in business and profit structures,
leading into the next MTBP, which is the second stage of
our Long-Term Management Vision “Kirin Group Vision2027” (KV2027). To execute reforms that capitalize on thechanging business environment, I have instructed all Group
companies to review their practices and workstyles,
unconstrained by current procedures. For each item, they
are to decide whether to accelerate progress, transformthe way it is done, cease doing it, or reduce it.
Kirin Brewery’s restructured approach to growing its
Kirin Home Tap business is an example. Building on
relatively firm demand in the off-premise channel in Japan,
the company will promote Kirin Home Tap as a moresophisticated way to enjoy beer at home. In the on-premisechannel, where volume recovery will take time, we will
intensify promotion of Tap Marché, which offers customers
a choice of small-capacity high-value-added craft beers.
As for Kirin Beverage, we need to transform in
response to the changing environment. Widespread
adoption of remote work calls for a review of the scaleand structure of the vending machine business, as well
as location strategy. We are also repositioning Kirin
Beverage into a beverage company that will lead ourhealth science strategy, leveraging consumers’ healthawareness heightened by COVID-19.
Similarly, Lion in Oceania will redouble its marketing
efforts and restructure its supply chain in response to theshift to off-premise sales corresponding to the decline in
on-premise demand.

Developing the health science domain into afuture growth pillar, building on existing
business invigoration
Q3. What are your plans for growing the domains of food &beverages, pharmaceuticals, and health science?
Our existing domains of food & beverages andpharmaceuticals are the Group’s foundation. While aiming
for steady growth, we continuously respond and adapt tochanges in the business environment. In alcoholic
beverages, a large trend is tighter regulations acrossmarkets worldwide. In a shorter time frame, the COVID-19
pandemic has caused a demand shift from the on-premiseto the off-premise channel. We also see growing demand
for low-sugar, low-purine, and other “functional” products.
Another market segment is attracted by lifestyle-enhancing
transformational benefits. An example is Kirin Home Tap,
which brings the taste of freshly brewed beer into thehome. We will continue to be ahead of the times inproviding such valuable new products and services.
Meanwhile, in the pharmaceuticals domain, we continue togrow as a “global specialty pharmaceutical company” bystrengthening our cross-border infrastructure and focusing
on the development and launch of next-generation global
products. Within Japan, we are addressing the Japanese
government’s policy of controlling medical expenses.
Health science is a domain with vast growth potential.
The Group began with the beer business 110 years ago.
This gave us expertise in fermentation and biotechnology
which we leveraged to enter the pharmaceuticals business
40 years ago. Most recently, our three-and-a-half decadesof immunology research has led us to discover LC-Plasmathat directly activates the immune system. In August 2020,

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13

Interview with Top Management

five Kirin Group products using our proprietary LC-Plasma
became Japan’s first Foods with Function Claims (FFCs)
registered for their immune system benefits with Japan’sConsumer Affairs Agency (CAA).
Consumer interest in health has been strongly
stimulated by the COVID-19 pandemic. Prevention inparticular is gaining urgency in the public’s mind under thelooming specter of an overburdened medical system. Thisawareness meshes with our innovation in fermentation andbiotechnology where we address unmet health needs, a
key to becoming a global leader in CSV. By leveraging our

extensive research in the domains of food & beverages andpharmaceuticals, as well as our sales channels, we areaiming for sales revenue of 200 billion yen and normalized
operating profit margin of approximately 15% in the healthscience domain* by 2027.
Now, more than ever, I believe that to survive in aturbulent business environment a company must be
depended on by people and society to address social
issues. Development of our new health science domainmeans addressing global health issues by harnessing thetechnologies and assets we have garnered in the domains

2019 MTBP Basic Policy
Furtherstrengthen
proﬁtability• Establish strong brands and proﬁt base in eachcountry• Develop overseas business with focus on high added
value categories e.g. craft beer

Pharmaceuticals

Achieve
outstanding
growth• Maximize value of global strategic products• Expand pipeline by developing new global products

Health science

Establish andfosternew pillars• Strengthen business development of highperformance materials• Construct a unique Kirin business model

Food(Alcoholic &non-alcoholic beverages)

Steady progress has
been made in line withthe basic policy set
forth in 2019 MTBP
despite the impact of
COVID-19

of food & beverages and pharmaceuticals. I will personallylead the way in making the health science business a pillarof the future, just as we have grown the pharmaceuticalbusiness into a mainstay of our portfolio.
* Excludes equity in earnings of FANCL (but includes synergies)

Innovation through digital transformationand HR diversity and inclusion
Q4. How have you strengthened organizational
capabilities for innovation by investing in intangible
value, as outlined in the 2019 MTBP?
Innovation is ultimately indispensable to sustainable growth.
To meet the evolving needs of society and consumers, wemust offer new products and services that resonate with ourcustomers. Besides strengthening R&D, we also need topursue marketing that provides insight into latent consumer
needs and wants, while advancing digital transformation (DX).
One of the benefits of DX is to reduce costs and generatecash by streamlining operations in existing businesses. For
new businesses, DX also helps us create markets. DX isparticularly important in the health science domain, where weseek to address individual health concerns.
We will also recruit and develop talent of the highest
caliber to manage these businesses. Diversity and inclusion
are key to actualizing the full potential of human resourcesin an organization. This is why we are increasingly recruiting

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CONTENTS

14Interview with Top Management

mid-career professionals who have the skill sets and trackrecords we need to take on the challenges of our future
growth domains. I believe it will be wise to have mid-careerhires make up one third to half of our staff, depending on
the department. When people with diverse abilities andexperiences interact, their fresh perspectives and insights
engender cross-fertilization of ideas that trigger
breakthroughs and ignite innovation of unprecedented

value. To this end, we will continue to cultivate a corporate
culture where diverse human resources can develop theirmaximum abilities, and configure a workplace environment
conducive to job satisfaction.

Contributing to resolution of health andenvironmental issues worldwide
Q5. How is Kirin achieving the goal of becoming a global
leader in CSV?
The Group’s CSV efforts address key issues in the priority
areas of health and well-being, community engagement, andthe environment, beginning with our duty as a responsible
alcohol producer to promote proper drinking. Among these,
health became the prime object of our attention last year due
to the COVID-19 pandemic. In 2020, sales of iMUSE beverages
containing LC-Plasma grew to 2.4 times the previous year's
figure. Meanwhile, a non-beverage supplement using LCPlasma was launched by FANCL, with whom we have a capitaland business alliance. We next plan on entering overseas
markets to bring these health-supporting products to people
around the world.
The “Kirin Group Environmental Vision 2050,” issued in
February 2020, shifts our aim towards creating positive
impact, marking a significant expansion of scope beyond
curbing negative impact, which was the focus of Kirin’s
previous statement on the environment. Here, we are

Sales volume trend for LC-Plasma beverages

CAGR 34%

2014

2015

2016

2017

2018

2019

2020

2021

(FY)

(estimate)pursuing effective initiatives in the four priority areas ofclimate change, water resources, biological resources, andcontainers and packaging. Regarding climate change, inNovember 2020 we joined RE100, a global initiative
bringing together businesses committed to sourcing 100%
renewable electricity. In December, moreover, the Group’s
medium-term GHG reduction target commitment was
accepted by SBTi*, as a “Business ambition for 1.5°C.”* The Science Based Targets initiative (SBTi) drives ambitious climate action in the private
sector by enabling companies to set science-based emissions reduction targets. Source:
SBTi website

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Interview with Top Management

Q6. Please describe the results of enhancing diversity inthe Board of Directors in fiscal 2020.
The majority of board members are now from outside thecompany, including women and foreign nationals. Thisenhanced diversity has stimulated vigorous, high-quality
discussions. Drawing from a wide spectrum of careers andexpertise, the board membership has enhanced
governance across such key areas as innovation,

investment discipline, and risk management. The majorityof Nomination and Compensation Advisory Committee
members are independent non-executive directors, thechairperson included.
This stakeholder-centric management has earned
plaudits for Kirin Holdings, including selection as the grandprize company for “Corporate Governance of the Year®
2020*,” sponsored by the Japan Association of Corporate
Directors (JACD).
*Corporate Governance of the Year® is a registered trademark of the Japan Associationof Corporate Directors.

Gaining sustainable growth toward becoming
a global leader in CSV
Q7. Please give a concluding message to ourstakeholders.
When the COVID-19 pandemic will end is difficult topredict. Despite the current harsh environment, the Groupis firm in its commitment to answering stakeholder needs
through CSV management. Sustainable growth is key toattaining our goal of becoming a global leader in CSV. I am
grateful for your continued support in these endeavors.

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Interview with the Chief Financial Officer
Progress under the medium-term business plan

Sustained efforts on strategic priorities
toward the realization of KV2027

We will work to enhance corporate
value by implementing major reforms
to our profitability structure while
minimizing the impact of the
COVID-19 pandemic.
Noriya Yokota
Director of the Board, Senior Executive Officer & CFO

Q1. How would you sum up progress in fiscal 2020 andfiscal 2021, which is the final year of the 2019
medium-term business plan?
As stated in the financial forecasts released in February 2021,
we expect the COVID-19 pandemic to have a significant
negative impact on our financial KPIs for fiscal 2021. While theeffects of COVID-19 are likely to be smaller than in fiscal 2020,
the pandemic will continue to have an impact, especially inJapan, and we cannot afford to be complacent.
At the same time, the COVID-19 crisis is hastening theenvironmental changes anticipated in our long-term
management vision, KV2027. The Kirin Group is focusing on
the realignment of the beer and spirit business toward theoff-premise channel, while maximizing the value of global
strategic products in the pharmaceutical business. Anotherpriority is the start-up and development of the Health
Science business in response to unmet health needs. We
have pursued all of these strategies in anticipation of
medium- to long-term changes in the external
environment. There has been no change in the level of theconsolidated normalized operating profit target in KV2027.
However, we recognize that we will need to adjust the
trajectory of our growth curve in the period to fiscal 2027.
To achieve that, we aim to strengthen our brands in the
Food & Beverage domain, develop new businesses that

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Interview with the Chief Financial Officerreflect market changes, and step up investment initiatives
designed to strengthen organizational capabilities forinnovation, including R&D and information technology.
Assuming that the COVID-19 pandemic can be brought
under control, we expect our profit to recover to the fiscal
2019 level in fiscal 2022. We will accelerate our strategies
toward the realization of KV2027, while also implementing
comprehensive cost structure reforms.
Q2. As CFO, what is your view of the impact of the
COVID-19 crisis on the consolidated financial results
for fiscal 2020, and how have you responded to thisunprecedented situation?
Both sales and profit declined year on year in fiscal 2020,
with revenue reaching 1,849.5 billion yen and normalized
operating profit 162.1 billion yen. The impact of the
COVID-19 pandemic was relatively small in the
Pharmaceuticals domain, but we estimate that COVID-19
reduced normalized operating profit, especially from ourdomestic and overseas Food & Beverage domain, byaround 66.0 billion yen.

As the COVID-19 crisis began to have a significant
impact in March 2020, the Kirin Group made course
adjustments, including the reassessment of our investment
capacity, further tightening of the focus of our investment
priorities, and the reduction of non-urgent investment. Our
business companies implemented urgent cost control
measures that yielded savings of around 30.0 billion yen.
These efforts focused primarily on our Food & Beverage
operations in Japan and overseas, which were severely
impacted by COVID-19.
Business portfolio

Completion of restructuring of low-profit
businesses
Business portfolio optimization an ongoingpriority
Q3. What are your thoughts on Kirin’s business portfolio?
Some shareholders and investors expressed doubts about
the strategy set down in KV2027 concerning our uniquebusiness portfolio, which consists of Food & Beverages,

COVID-19 countermeasures in fiscal 2020
Operating cash flow

Urgent cost control measures, prioritized efforts to secure normalized operating profit

Investing cash flow

Prioritization of free cash flow, reduction of non-urgent investment

Financing cash flow

Temporary increase in borrowing to provide cash on hand

Pharmaceuticals, and Health Science. However, we can now
see that the environmental changes anticipated in KV2027
are occurring earlier due to the COVID-19 pandemic, andwe are very confident that our strategy was appropriate.
Our results for fiscal 2020 show that while the Food &Beverages domain was significantly impacted by COVID-19,
we achieved sustained growth in the Pharmaceuticals
domain. There were also clear signs of business
opportunities in the Health Science domain with the
emergence of unmet needs in key health-related areas. We
can respond to those needs using the fermentation andbiotechnology knowledge that we have built in our existing
business areas. I will continue to make business portfolio
reform my most important priority as CFO.
Q4. Capital market insiders have expressed concern about
a conglomerate discount. What is your view as CFO?
During the COVID-19 crisis, there has been increasing
interest in our non-beer business areas, and I believe that
capital markets now have a better understanding of ourstrategies. However, the markets are still not convinced of
the achievability of our strategies, and we recognize theneed to respond to these concerns by creating synergies andbuilding a track record of growth in the Pharmaceuticals and
Health Science domains. Furthermore, because we only hold53.8% of shares in Kyowa Kirin, which is active in the
Pharmaceuticals domain, not all of that company’s growth
will be captured within the Kirin Group. We are also aware of
the issues concerning parent-child listings. We will consider
our future direction while working to maximize the growth

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Interview with the Chief Financial Officerof the pharmaceutical business and group-level synergies.
In fiscal 2019 we acquired a 33% stake in FANCL
Corporation, which is part of the Health Science domain. In
fiscal 2020 we implemented channel-related initiatives,
including the sale of Kirin Group products on the FANCL
website. We will continue to focus on synergy creation
through product development and the improvement offunctional efficiency.
Q5. What progress have you made toward therestructuring of low-profit businesses?
In January 2021, we completed the sale of our entire
shareholding in Lion Dairy & Drinks, which was one of thebusinesses classified as low-profit under the previous
medium-term business plan. Going forward, we aim toachieve growth by concentrating Lion’s resources toward
alcoholic beverages and high-added value beverages. We
believe that this sale represents significant progress

toward the goal of restructuring and revitalizing low-profit
businesses. We will continue to monitor the profitability
and efficiency of our businesses, and to consider andimplement the measures needed to achieve this.
Cash allocation

Emerging impact of COVID-19
Emphasis on a balance between growth andfinancial soundness
Q6. What is your approach to cash allocations?
The cash inflows projected during the three-year period of
the 2019 medium-term business plan included cash flows
of 700.0 billion yen from operating activities. We expectthat the impact of COVID-19 will cause the actual figure to
fall short of that amount by around 170.0-180.0 billion yen.
Progress on asset sales exceeded our goals, including theachievement of the target for the reduction of crossCash inflows and outflows (Billions of yen)

FY2019FY2020

178.8

164.8

Asset sales

64.2

21.5

Capital investment

96.4

93.0

Dividends

65.2

70.1

130.0

40.0

Operating cash ﬂow

Cash inflows

Cash outflows

shareholdings in the second year of the plan, despite thefact that the sale of Lion Dairy & Drinks, which we planned
to complete in fiscal 2019, was delayed until fiscal 2021.
On the cash outflow side, we have tightened ourselection criteria for capital expenditure and taken a
disciplined approach with the aim of maintaining andimproving capital efficiency across the entire group. We
will give priority to dividends in accordance with the policy
defined in the medium-term business plan, but we willbasically postpone large-scale M&A and other types ofgrowth investment because of the anticipated impact of
the COVID-19 pandemic.
Our goal for financial discipline is to achieve a positive
free cash flow after dividends in fiscal 2021, including the
cash inflow from the sale of Lion Dairy & Drinks. We willcontinue to maintain a balance between growth andfinancial soundness by effectively controlling cash outflows
according to cash inflows.

Growth investment

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Interview with the Chief Financial Officer

Q7. W hat is your thinking on investment targeted
toward the strengthening of organizational
capabilities for innovation in such areas as branding,
R&D, digitalization, HR, and organization?
We see the enhancement of our organizational capabilities
for innovation through investment in intangible assets as
an essential requirement for the realization of KV2027.
We are already seeing the benefits of continual
investment in the areas of marketing and R&D. However, I
believe that we need to accelerate our investment indigitalization, HR, and organizational capabilities. We aremaking progress on initiatives in the area of digitalization,
including the introduction of an enterprise system that will
form our infrastructure for the achievement of digitaltransformation (DX). Information technology infrastructure
will also play a role in efforts relating to HR andorganizational capabilities, including the KIRIN Work Style
3.0 “Job Satisfaction” reform that we launched in fiscal
2020 to boost employee motivation. In addition, we willcontinue to recruit the human resources needed toaccelerate our initiatives, especially in the Health Science
domain and the digitalization area, and to build anorganization capable of realizing the potential of diversity.
Q8. How would you assess the state of the balance sheet?
In fiscal 2020, we responded to an increasingly uncertain
outlook by prioritizing measures to secure cash on hand,
and the resulting increase in interest-bearing debt caused
the gross debt-to-equity ratio to rise to 0.77 times. At thesame time, we had significant success in our efforts tosecure profits through initiatives that included the sale ofcross-shareholdings and Lion Dairy & Drinks, as well ascomprehensive cost control measures. As a result, wehave been able to fund volatile assets, including growthinvestment, within the scope of capital, and to maintainthose assets at a healthy level from a balance sheet
perspective. There will be a continuing need forinvestment to support medium- to long-term growth. We
will continue to maintain investment discipline while
ensuring that balance sheet soundness is reflected in ourdecision-making.
Q9. What is your thinking on shareholder returns?
Our cash flow plan has been significantly impacted by the
COVID-19 pandemic. However, we will continue to maintainstable dividends in line with our existing policy. Under the2019 medium-term business plan, we have raised ourconsolidated dividend payout ratio to “40% of normalized
EPS or higher,” and in fiscal 2020 we increased the dividendby one yen over the previous year’s level to 65 yen, as
stated in our initial plan.
Kirin has never reduced its dividend since it was listed on
the stock exchange, and in fiscal 2021 we again plan to pay a
dividend of 65 yen, despite the lingering effects of the
COVID-19 pandemic, especially in the Food & Beverage
domain. I believe that by consistently paying stable dividends
we are responding to the wishes of our shareholders, and wewill continue to provide appropriate returns.
In addition, we bought back shares worth 100.0 billion
yen between fiscal 2019 and fiscal 2020. We will makedecisions on future buy-back programs while monitoring
the recovery of operating cash flows.
A message to stakeholders

Our priority in fiscal 2020 was crisis response.
We see fiscal 2021 as year in which we will
return to a growth track.
Q10. Finally, what message would you like to share?
In fiscal 2020, we focused on responding to the crisis
triggered by the spread of the COVID-19 pandemic. In fiscal
2021 we will take our first steps toward emergence from acrisis management situation, and the achievement of arecovery to our pre-COVID profit level. It will be a pivotal
year for our efforts to return to a growth path and achieve
the KV2027 goals. As CFO, I will work to ensure that
resources are allocated in ways that lead to sustainablegrowth, while taking both short-term and medium- tolong-term perspectives into consideration.

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Kirin’s Value Creation Model

Kirin Group Corporate Philosophy
KIRIN brings joy to society by crafting food and healthcare products inspired by the blessings of nature and the insights of our customers

INPUT

BUSINESSFoundations for driving innovations

Consumer centric
marketing expertise

Diversity and inclusion,
culture for innovation
Core technologythat assuresvalue creation

Food &
Beverages(consolidated)(alcoholic andnon-alcoholic
beverages)

64.5 billion yen*

Health Science
Pages 24–29

18.6 billion yen*1

Pharmaceuticals

in ICT expenses

13.7 billion yen*1

Providing products
and services toimprove people’squality of life

CAGR ofnormalized EPS

Economic value

Health andWell-being

Maximized cash ﬂows

Non-ﬁnancial key
performance indicators*2

The Environment

CSV Commitment

Social value
Continuallydeveloping
innovative new drugs

Corporate brand value

CSV Purpose

Community
Engagement

Pages 39–49

Employeeengagement scorein ICT investment
Pages 34–37

ROIC

Pages 16–19 and 74–82

in R&D expenses
Pages 24–29

The Kirin Group gives value back to the society it serves

Financial key
performance indicators*2

Providing products
and services tobuild bonds
between people

Pages 30–33

1

ICT accelerating
value creation

The Group is leveraging its foundation for driving innovationthat enable its businesses to help society around theworld settle the issues

Business domains

31,151 employees(As of December 31, 2020)

OUTCOMEOUTPUT

The Kirin Group is activating business synergies toapproach social issues as opportunities forbusiness growthPages 6–7

Business Progress
Pages 67–72

Financial and Non-ﬁnancial
Highlights Pages 21–22*1 In ﬁscal 2020

*2 The indicators are used in the 2019 MTBP.

Kirin Group corporate governance

Pages 51–65

A Responsible
Alcohol Producer

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CONTENTS

Financial and Non-financial Highlights
Financial Key Performance Indicators

Non-financial Key Performance Indicators

Capital efficiency indicator—
Return on invested capital(ROIC)

Profitability and growth
performance—Normalized
EPS

Employee engagement score

Corporate brand value

The ROIC target of 10% in the 2019
medium-term business plan is unlikely
to be achieved due to the impact of
COVID-19.

Normalized EPS was pushed down by adecline in operating profit, with theresult that target of average yearly
growth of 5% or higher in the 2019
medium-term business plan was
not achieved.

The 72% target in the 2019 mediumterm business plan was achieved one
year ahead of schedule.

The target of USD 2,200 million in the2019 medium-term business plan wasachieved one year ahead of schedule.

(%)

(Yen)

7.6

8.0

200

158

6.0
6.0

5.2

136

150

147

Source: Best Japan Brands published by Interbrand

73%
70%

4.0

100

2.0

50

0

2019

2020

2021

(estimate)

(FY)

0

2019

2020

2021 (FY)(estimate)

The target in themedium-termbusiness plan wasachieved one year
ahead of schedule.

The target in themedium-term businessplan was achieved one
year ahead of schedule.

2019

2020

72%

2021

(target)2,007m2,236m(USD)

2,200m
(USD)

(USD)

(FY)

2019

2020

2021

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Financial and Non-financial Highlights

Non-financial Key Performance Indicators
CSV Commitment*1
KG The Kirin Group KH Kirin Holdings Company, Limited KB Kirin Brewery Company, Limited KBC Kirin Beverage Company, Limited ME Mercian Corporation LN Lion Pty Limited MBL Myanmar Brewery Limited KHB Kyowa Hakko Bio Co., Ltd. KKC Kyowa Kirin Co., Ltd.

Commitment
A Responsible
Alcohol
Producer

Health andWell-being

Community
Engagement

The
Environment

CSV Commitment indicator

FY2019FY2020Companies included

0.1 Responsible drinking/passing a culture ofenjoying alcoholic beverages to the next
generation

Number of participants in appropriate drinking education
programs / number of viewers of drinking manner advertisements

1.007 million participants/viewers

1.955 million participants/viewers

KB

1.1 Supporting self-care for healthy people andpeople with pre-disease

Development and expansion of sales of no- and low-sugar,
low-calorie products and products with positive health effects

109% (compared with fiscal 2018)106% (compared with fiscal 2018)

KBC

1.2a Creating new value for healthy people andpeople with pre-disease

Number of countries capable of purchasing Kirin-madeingredients with positive health effects (and total population)

2 countries (220 million people)

5 countries (1.28 billion people)

KH

1.2b Creating new value by supporting self-carefor healthy people and people with pre-disease

Number of patients using products made with our raw
materials + number of consumers of health foods

23.8 million people

19.26 million people

KHB

1.5 Health and productivity management

Stress checks (“psychological lively”) score

112

117

KH

1.6 Safety and security of our products

Certification rate for GFSI-recognized schemes

62%

95%

KG

2.2a More sustainable production of raw
materials

Japanese hops procurement

128 tons*2

119 tons

KB

2.2b More sustainable production of raw
materials

Number of visitors who purchased our products at our cellar
doors and winery shops

34,178 people

20,559 peopleME

2.2c More sustainable production of raw
materials

Contracted farming ratio of procured rice for brewing

Conducted trial brewing aimed at contract
farming beginning in fiscal 2020

6.7%

MBL

2.2d More sustainable production of raw
materials

Number of small-scale farmers supported for acquisition ofRainforest Alliance certification

120 farms

2,000 farms

KH KBC

2.2e More sustainable production of raw
materials

Ratio of SEDEX membership in 1st tier suppliers

75%

98%

LN

3.1 Actions regarding climate changeGroup-wide GHG emission reduction ratio: Sum of Scope 1 andScope 2, Scope 3

Scope 1+2 *3: 8.5% Scope 3 *3: 12.7%(both compared with fiscal 2015)

Fiscal 2020 results pending

KG

3.2 Actions regarding water resources

Unit water consumption reduction rate in fiscal 2021

27% (compared with fiscal 2015)28% (compared with fiscal 2015)

MBL

3.3 Actions regarding biological resources

Use of FSC-certified paper or recycled paper for office paper

97.4%

100%

KH

3.4 Actions regarding containers and packaging

Conversion rate of PET bottle resin to recycled resin

1.9%

1.5%

KBC KB

3.5 Reduction of food waste

Rate of product waste reduction

44% (compared with fiscal 2015)

Fiscal 2020 results pending

KB KBC ME*1 Excluding items already achieved or for which targets are still being set*2 If appropriate measures are not taken, fiscal 2027 amounts are projected to be half.
*3 Scope 1: Direct GHG emissions by the business entity itself / Scope 2: Indirect emissions resulting from the use of electricity, heat, and steam supplied by other companies / Scope 3: Emissions other than Scope 1 and Scope 2

ME

LN MBLKB KBC ME KKC

KB KBC ME
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Kirin’s Value Creation Model

Kirin Group Corporate Philosophy
KIRIN brings joy to society by crafting food and healthcare products inspired by the blessings of nature and the insights of our customers

Contents

24

INPUT

BUSINESSOUTPUTOUTCOME

Foundations fordriving innovations

The Kirin Group is activating
business synergies to approachsocial issues as opportunities forbusiness growth

The Group is leveraging its foundation
for driving innovation that enable its
businesses to help society around theworld settle the issues

The Kirin Group gives value back tothe society it serves

Special Feature 1

Health Science Strategy
25 Value creation through collaboration amonggroup companies
26 Creating an immunity market with LC-Plasma
27 Executive comments on the outlook for
immunity-related products
28 Market development using global strategic
materials
29 Comments from an Independent Non-executive
Director

30

Special Feature 2

Human Resource Strategy
31 Promoting diversity and inclusion
32 Case Study: A corporate culture reform
initiative launched by volunteers
33 Smoothing the path for new employees

Consumer centric
marketingexpertise

Special Feature 3

Digital Transformation Strategy
36 Kirin Group Initiatives
37 Case Study: Using DX to raise the value ofbusiness and new businesses

Business domainsCore
technologythat assuresvalue
creation

Diversity andinclusion,
culture forinnovation

31,151employees(consolidated)

64.5billion yen

Providing products
and services tobuild bonds
between people

Food &
Beverages(alcoholic andnon-alcoholic
beverages)

HealthScience

Providing products
and services toimprove people’squality of life

Pharmaceuticals

in R&D expenses

ICT accelerating
value creation

18.6billion yen

Economic value
Maximized cash ﬂows

ROIC

in ICT expenses

34

Financial key
performanceindicators

CSV Purpose

CAGR ofnormalized EPS

Non-ﬁnancial key
performanceindicators
CSV Commitment

Continuallydeveloping
innovative
new drugs

Social value

Corporate
brand value

Health andWell-being

The Environment

Community
Engagement

13.7billion yen
in ICT investment

Employeeengagement score

Kirin Group corporate governance

A Responsible
Alcohol Producer

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24

CONTENTS

Immunity

1 Health Science Strategy

Brain Function
Gut Microbiome

By focusing investment on strategic
materials in priority areas, foster the next
generation pipeline
We have strengthened our commitment to the Kirin
Group’s Health Science strategy, the aim of which is tocreate economic and social value by utilizing our corecompetencies in the fields of fermentation andbiotechnology to contribute to solutions for healthproblems. Currently, our target markets are Japan and theUnited States, which together account for around onethird of the global market for consumer products. For
corporate products, we will expand into Asia and Europe, in
addition to Japan and the United States.
Our Health Science strategy is divided into four layers.
The base layer consists of health-related materials and “seeds”(potentially useful substances), which are positioned as
high-profit specialty areas. In addition to the development ofour business-to-business (BtoB) operations, we will also
expand our core supplement business by approaching target
groups in the beverages and food categories. In addition, ourconcept calls for the provision of high-value-added
personalized solutions for health issues.
The three priority areas selected as we work to realize
this strategy are immunity, brain functions, and the gut
microbiome. These markets are expected to expand from
2.6 trillion yen in fiscal 2020 to 4.8 trillion yen in fiscal 2027.
The Kirin Group will initially focus on the expansion of
the immunity field. Our medium- to long-term goal is to

Science domain are 200 billion yen in revenue and anormalized operating profit margin of 15% by fiscal 2027.

create economic and social value by achieving synergies
across the three priority areas. Our targets for the HealthStrategy overview
Target breadth

4
Individualization

Depth of theinitiatives forhealth andwell-being

3
2

Supplements

Food and beverages

1

Materials & products forhealth and well-being

Establish base of high value-added products
Create a health solutions business based on individualization (small
mass / personalized) through the use of individual data and testing/analysis methods being developed as part of R&D

Expand the core business
Grow revenue and proﬁt in the core supplement market

Acquire the entry level mass segment
Broadly approach the entry-level consumer segment that has not
used supplements before

Establish BtoB for high performance materials
Leverage the BtoB function to develop and manufacture highperformance materials and roll them out domestically and overseas

Roadmap: Revenue of 200 billion yen and a normalized operating profit margin of 15% by fiscal 2027
Revenue targets in Health Science*(Billions of yen)

Immunity

200
150

Brain function

100

Amino acids,
gut microbiome, etc.

50
0FY2027

FY2020

250

2020

2024

2027

¥8.6
¥3.1
¥73.2

bn

bn

bn

* Excludes equity in earnings of FANCL (but includes synergies)
(FY)

¥50.0
¥40.0
¥110.0bn

bn

bn

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Brain Function

Value creation through collaboration among group companies

The Kirin Group originated as a manufacturer of beer. It has
since created a wide variety of products using technologies
developed to brew large quantities of beer through thecontrol of yeast microorganisms. This background in
brewing technology has enabled us to expand into thepharmaceutical business with considerable success.
Similarly, technologies that evolved from our brewing
expertise have played a key role in research anddevelopment in the three priority areas identified in our
Health Science strategy.
The two core areas for Kirin’s pharmaceutical businessare immunity and the central nervous system. Using ouraccumulated knowledge in these areas, we supply foodingredients with immunity and brain function benefits. Our
expertise in handling yeast has also enabled us to develop
technology for analyzing microorganisms. Collaboration withacademic institutions based on these technologies has led tothe development of gut microbiome analysis technology.
The three priority areas for our Health Science strategy
are deeply interlinked. For example, there is close interaction
between immunity and the gut microbiome, to the extent
that the intestine has been described as our largest immune
organ. Recent research has also highlighted close interaction
between the gut and brain in a relationship known as the“gut-brain axis.” The Kirin Group aims to improve people’s
health by working to provide food-based solutions in the

25

Immunity

1 Health Science Strategy

Building success on the fermentation andbiotechnology knowledge and capabilitiesof the Kirin GroupCONTENTS

Gut Microbiome

Creating economic and social value through synergies in three priority areas
Immunity

Brain function

Synergy eﬀects

Applications for foodand beverages

Accumulate knowledge Accumulate knowledge inin “Immunity”“Brain function”

Gut microbiome
Partnerships with academia
and start-ups

Microbe analysis technology

Develop pharmaceuticals

Fermentation technology

Yeast handling technology

All 3 priority areas are oﬀshoots of Kirin’s beer brewing technology
three closely interrelated fields of immunity, brain function,and the gut microbiome.

Business expansion in the Health Science
domain driven by closer cooperation
between Kirin Group companies and FANCL
Going forward, we will create new value based on
fermentation and biotechnology by utilizing the results ofresearch into the Kirin Group’s original ingredients andtheir health functions, and by utilizing the microbial
metabolic control technology of Kyowa Hakko Bio.
Through its partnership with FANCL, the Kirin Grouphas developed products based on applied research as wellas R&D. We have created an integrated value chain thatencompasses marketing and sales, including direct sales, ofcosmetics and health foods. Our traditional business model
relied on sales of mass-market products based on R&D andfunctional raw materials created through R&D. That
approach alone cannot guarantee the success of our
Health Science strategy.
Kyowa Hakko Bio has low-cost high-volume production
technology, while the Kirin Group companies excel indeveloping and supplying beverages and other products tomeet consumer preferences. By further strengthening ouralliance with FANCL, we will develop our business in the
Health Science domain through the development of
products that match customer needs, and the supply of
those products through business-to-business, business-toconsumer, and direct-to-consumer channels.

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Immunity

1 Health Science Strategy

Brain Function

Creating an immunity market with LC-Plasma

Create a new immunity market in various
food and beverage categories
In August 2020, we succeeded in registering five iMUSE
brand products with the Japanese authorities as Japan’s
first Foods with Function Claims (FFCs) relating toimmunity. These products contain LC-Plasma (Lactococcus
lactis strain Plasma). As of April 2021, only LC-Plasma
products can be labeled as foods with immunity-related
function claims in the Japanese food market. Our
marketing for these products includes clear messaging toconsumers about the solid evidence indicating that LC-

Gut Microbiome

Plasma can help to maintain immunity in healthy people.
There is also evidence that LC-Plasma is effective evenwhen nonviable. Unlike viable bacteria, which require
chilled storage, LC-Plasma can be handled in various types
of factories and used in a wide range of foods. In addition
to developing consumer products, the Kirin Group is also
working to expand business-to-business sales channels.
We aim to increase the Kirin Group’s share of the market
for lactobacillus products with immunostimulation functions
from around 3% in fiscal 2019 to 10% in fiscal 2021 bybuilding a portfolio of LC-Plasma products to meet consumer
needs, and by marketing them through various sales channels.

Quantitative plan for LC-Plasma (immunity area)
FY2027 plan

(Billions of yen)Normalized
OP margin

Revenue

¥50.0

50
40

bn

Beverages/
Yogurt

30

0

2020

2024

2027

(FY)

%

Supplements¥13.5

BtoB Bacterial
raw materials

¥3.5

20
10

20
¥33.0

bn

bn

bn*

* Equivalent to more than 50.0 billion yen inﬁnal product value

Meeting consumer needs with a portfolio of products containing LC-Plasma

New products launched to meet consumer
needs through collaboration with FANCL
Supplements

Beverages / yogurt

Other food and beverages• FANCL immune support• iMUSE supplements• Kirin Beverage drinks• Koiwai homedelivery service

-----

-----

• FANCL (in-store, EC)* Including China cross-border EC

DtoC• Kyowa Hakko Bio (EC)• Vending machines/
home deliveries

BtoC• Distribution(DgS, Pharmacies, CVS,
External EC, etc.)• iMUSE supplements• FANCL immune support• Kirin Beverage drinks• Koiwai yogurt

BtoB• Sales to companies, etc.,
outside of the Kirin Group• Corporate sales of Kirin
iMUSE supplements• In discussion with
global companies• In discussion withmajor companies

The Kirin Group is also making progress with the creation ofsynergies with FANCL, which directly operates its own retail
outlets. In fiscal 2020, Kirin Brewery and Kirin Beverage
moved ahead of schedule to launch collaborative productswith FANCL. FANCL has also begun selling Men’eki Support(immunity support), an FFC that contains LC-Plasma. This
capital and business alliance is yielding significant benefits,
including the approval of Men’eki Support as an FFC approximately
three months after the approval of Kirin’s products.
We will continue working to create synergies by developing
new beverage brands containing LC-Plasma, strengthening our
e-commerce business, and consolidating manufacturing sites.

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CONTENTS

Immunity

1 Health Science Strategy

Brain Function

Executive comments on the outlook for immunity-related products

Gut Microbiome

Vertical integration of value chains with group companies
Ph

Pharmacies

DGS Drug stores

SM Supermarkets

Foundational
Research

CVS Convenience stores

AppliedResearch

Product
Development

EC E-commerce• Koiwai Dairy

Joint
research

Foaming technology

Tamaki Sano
General Manager,
Health Science Division

PROFILE Tamaki Sano joined Kirin in 1994.
She developed and launched the Kirin Hyoketsu
brand in 2001, and in 2010 she was seconded toLion-Dairy & Drinks in Australia. She started up
the Business Creation Department in 2016 andis currently General Manager of the Health
Science Division.

Kirin will intensify its immunology research in order
to offer more value-added health products topeople throughout the world.
The Health Science business is built on a foundation of
immunology research made possible by knowledge
accumulated by the Kirin Group through its work withyeast and lactic acid bacteria over a period of more than
35 years. Food plays a pivotal role in the maintenance of
immune functions. A key feature of our approach is useof findings from our immunology research in thedevelopment of food products.
By working with companies within and beyond the

OS Overseas

Manufacturing• Kirin Holdings• Kirin Beverage• Koiwai Dairy• Interfood (Vietnam)• Kirin Holdings

Immunology
research

Own Own stores

BtoB B to B

Sales Channel
Ph

DGS

SM

CVS

Own

EC

OS

BtoB

Ph

DGS

SM

CVS

Own

EC

OS

BtoB

Ph

DGS

SM

CVS

Own

EC

OS

BtoB

• Kyowa Hakko Bio

Immunology
researchgroup, we have been able to bring a diverse range ofperspectives to this new business. For example, Kyowa
Hakko Bio is engaged in e-commerce sales of supplements
and has extensive expertise in overseas business-tobusiness marketing. We have also established a capital andbusiness alliance with FANCL, which has a reputation fordeveloping products that meet customer needs under its“Market-in” concept. We aim to expand the business by
combining the strengths of these and other companies.
We have also focused from the outset on the global
expansion of this business. To achieve that, we need toraise awareness in Japan and overseas about theremarkable functional benefits of LC-Plasma. The nameiMUSE was created from the English word “immunity” andreflects the need to inform consumers about the vital
importance of immunity.
Assuming that our competitors around the world
would also move into the Health Science domain in the
future, we need to differentiate the Kirin Group by
deepening our fundamental research.
Maintaining the immune system not only prevents
infections, but also preserves muscle strength and skinhealth and prevents declines in immunity after exercise.
For those reasons, we will continue to help people
worldwide to enjoy health by providing products andservices that offer real value.

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Immunity

1 Health Science Strategy

Brain Function

Market development using global strategic materials

Expanding Kirin’s presence in thepharmaceutical and health food markets
with the strategic brain function
ingredient Citicoline

Gut Microbiomein fiscal 2018 and is expected to grow by an average of 7%
per year until fiscal 2027. We anticipate a growing need for
products to prevent age-related brain function decline andenhance concentration and performance among people of
all ages in Japan and overseas. This demand is expected todrive dramatic growth in the market for Citicoline.
Kyowa Hakko Bio is preparing for this market growthby expanding its supply capacity. It has already started toenlarge production facilities at its Yamaguchi Production
Center, where production of Citicoline for use in healthfoods is expected to commence in the summer of fiscal
2023. It plans to start production for use inpharmaceuticals in fiscal 2026. In addition, it will use its
global sales structure to build its presence in the healthfood market with the aim of capturing around 50% of theworld market by fiscal 2027.

The Kirin Group is working to expand its business in threepriority domains. In addition to LC-Plasma, we have also
identified Citicoline and Human Milk Oligosaccharide (HMO),
which were developed by Kyowa Hakko Bio, as global
strategic materials that will help us to achieve that goal.
Kyowa Hakko Bio uses fermentation-based producttechnology developed through its amino acid business to
supply a wide range of raw materials for use in the food,health science and healthcare areas and is working to
expand its sales of strategic materials. In the brain function
field, for example, the world market for Citicoline for use inpharmaceuticals and health foods reached 10.7 billion yen

Extensive lineup of global strategic materials and other unique ingredients
Immunity

Other

Brain function

LC-Plasma

Citicoline

Ornithine

chief” of the immune system

Protects brain cells from damage

Recovery from fatigue

Directly activates pDC*, the “commander in

Human Milk Oligosaccharides

Citrulline

Promotes immune system development and brain development in infants

Keeps blood vessels young

KW lactic acid

β-Lactopeptide

Arginine

Conditions immune balance

Helps maintain cognitive function

Basic nutrient

Glutathione

Prevents oxidative stress,
improves immune function

Health food ingredients (EU, USA)
Improve memory
Improve QOL

Improve concentration
For desk work and e-sports

Existing target
Aged 65+

18%
82%

New target
Other

Expanding our range of products
containing Human Milk Oligosaccharide
Another strategic material is Human Milk Oligosaccharide(HMO). There is already an expanding market for HMO as apowdered milk ingredient, but we also anticipate growth in
the global market for foods and supplements with functions
that include the improvement of immunity, brain functions,and the gut microbiome. We estimate that the market willgrow by an average of 30% per year until fiscal 2027.
Kyowa Hakko Bio is using its unique R&D capabilities toexpand its range of new functional products and bringthem to market as quickly as possible. It aims to capture
10% of the world market by fiscal 2024.
The Kirin Group also has many unique ingredients
other than those identified as global strategic materials.
We will continue to engage in research leading to value
creation in the future.
Uses of HMO

Aged hops• Stimulate immune function

Improves attention and concentration, anti-obesity eﬀect

Traditionaltarget…

…

…
* pDC: plasmacytoid dendritic cells

28

CONTENTS

Global strategic material

Formulamilk

New• Improve brain function
targets • Improve the gut
microbiome

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Immunity

1 Health Science Strategy

Brain Function

Comments from an Independent Non-executive Director

Gut Microbiome

There will always be a need for businesses that support health and well-being.
Kirin’s fermentation technology and biotechnology
help people to maintain good health.
Because the Kirin brand is so strongly associated with beer,
many people are surprised to learn that Kirin is also engaged
in the Health Science business. Kirin owns a pharmaceuticalcompany and has a strong R&D department, so its expansion
into this area was perhaps inevitable. A key advantage for theCompany is the advanced knowledge of fermentation andbiotechnology that it has accumulated since its founding.
Traditionally its business activities have focused on liquor,
especially beer, and other beverages. However, the Health
Science domain offered opportunities for it to use its
technology to provide products and services that would help
people to maintain their health, and the decision to expand
into this area made perfect sense strategically.

People are all unique in terms of their physicalcondition, health status, health needs, and ideas
about health.
While the liquor and Health Science domains are based on
the same technologies, there are differences in themarketing approaches used. Beer is basically sold throughmass-marketing, typically at general merchandise stores. In
contrast, Health Science products require customized
marketing geared toward individual needs. This is because
every person is unique in terms of their physical condition,
health status, health needs, and ideas about health. Thiskind of targeted marketing will not be possible without
digital transformation (DX). The Kirin Group has alreadyattracted a wide spectrum of consumers across all age
brackets through mass-marketing. Going forward, theability to identify individual needs accurately through DX
will be a major driving force for a wide range of businessareas, including not only the Health Science domain, butalso alcoholic and non-alcoholic beverages and food.

Kirin strives to communicate using clear language
and words and that resonate with consumers.
The keys to good communication in the Health Science
domain are clarity and the use of words that will resonate
with consumers. That requires a combination of technicallanguage about immunity and intestinal health with clear
and simple messages about how products will help people
to stay healthy.
FANCL is a company that has built its business by helping
consumers to find solutions to health and beauty problems.
Collaboration with FANCL would generate mutual benefits bycombining Kirin’s technology and R&D capabilities with
FANCL’s broad appeal to health-conscious consumers.

Bringing health and happiness to society is
especially important during the COVID-19 crisis.
Businesses that help people to stay healthy are essential inany era. This is especially true at present because of the

COVID-19 pandemic, which has raised concern about
health maintenance and immunity to an unprecedented
level. These needs are another reason for Kirin toaccelerate the development of its Health Science business.
I have worked in a wide range of industries, including
entertainment, pharmaceutical, fitness club operation, andmedical equipment. As a supplier of products that enhancethe enjoyment of life, the Company has much in common
with the entertainment industry. Similarly, my
experience in the pharmaceutical andmedical equipment industries isrelevant to Kirin’s efforts to support
health through its Health Sciencebusiness. I look forward to using myexperience and knowledge tocontribute to the success of Kirin’s
new business.

Noriko Shiono
Independent Non-executive Directorof the Board
PROFILE After working as amarketer for Disney, Noriko Shiono
moved on to the consumer
healthcare industry and took CEO
roles at SSP Co., Ltd. and Konami
Sports Co., Ltd. She is currently
CEO of Widex K.K. She has beenan IndependentNon-executive Director of
Kirin HD since 2020.

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Human Resource Management

SpecialFeature2 Human Resource Strategy

Promoting Diversity
Fostering Organizational Culture
Onboarding

Workplaces in which employees canachieve their limitless potential
Our basic philosophy on human resources is guided by abelief in the limitless potential of human beings, and by anunchanging commitment to respect for the efforts ofindividual employees to achieve continuous personal
growth and development. In our Basic Philosophy on
Human Resource Management, we define the relationshipbetween the company and its employees as an equal
partnership through work. We expect every employee totake ownership of their careers and the design of theirwork, in line with our pledge to respect and support
autonomous individuals by providing working
environments in which all can achieve their full potential.

Integrated management strategy andhuman resource strategy
The Kirin Group Vision 2027 (KV2027) is focused on theachievement of further growth in our existing businessdomains (Food & Beverages, Pharmaceuticals), and thelaunch and development of new businesses in the Health
Science domain. Securing the human resources needed todrive this strategy is a key priority.
Traditionally we have built our human resources
primarily through mass recruitment of new graduates.
However, we also bridge gaps in the human resources
needed to realize our management strategy throughin-house training people and active external recruitment.

Another priority is the development of a culture in which
employees can realize the full potential of their diverse
values and experiences.
Strengthening mid-career and new graduate
recruitment and human resource management
We have expanded mid-career recruitment as way of
attracting people with specialized knowledge andexperience in such areas as Health Science and ICT/DX. We
began to hire significant numbers of mid-career recruits infiscal 2015, and to date approximately 150 people havebecome Kirin Holdings employees through this process. We
plan to maintain the ratio of mid-career recruits at 30% ormore of total recruitment.
We are strengthening our organizational potential byrecruiting and deploying people with advanced specialist
knowledge from outside of the Group. We are seeing
positive changes in decision-making processes and humanresource development following the promotion of midcareer recruits to management-level positions with acertain amount of authority. These changes are also
helping to strengthen our product brands and the value of
our corporate brand.
We are also attracting diverse people through our
graduate recruitment program. After graduates join Kirin,
we help them to develop specialist skills by enabling themto experience various tasks. We also recruit new graduateswith specialist knowledge and deploy them to work
categories and organizational units that match theirabilities, based on skill assessments at the time ofrecruitment. People are attracted to the Kirin Groupbecause they can choose their own career paths, andbecause we support their progress along those paths.
Both the labor market and individual attitudes tocareer development have changed in recent years. During
fiscal 2021, we will adapt to these changes by partiallyintroducing measures to strengthen our human resources
through increased recruitment of diverse people withadvanced skills, including mechanisms to reward advanced
specialist knowledge, and the acceptance of part-timeworkers who are also self-employed or have positions inother organizations.
We are also improving our human resource management
systems to train management talent capable of driving our
growth strategies and playing a core role in our businessactivities. We will strategically train and deploy Kirin Groupmanagement candidates, including approximately 1,100
general employees transferred from key business companies
in Japan to Kirin Holdings in April 2020.
Number of employees recruited
FY
2017

FY
2018

FY
2019

FY
2020

Number recruited(employed by Kirin Holding)

96

91

101

173

Subtotal: New graduates

81

72

75

103

Subtotal: Mid-career recruits

15

19

26

70

15.6%

20.9%

25.7%

40.4%

Percentage of mid-career
recruits

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Human Resource Management
SpecialFeature2 Human Resource Strategy

Promoting Diversity
Fostering Organizational Culture

Promoting diversity and inclusion

Embracing diversity and inclusion
For many years the Group has worked to promote diversity,
including career development for women, the provision ofopportunities for seniors and people with disabilities, andinitiatives to support minorities. We have also adopted
family-friendly systems, including measures to enable male
employees to play a more active role in their families. Our
aim is to drive innovation by creating an environment inwhich individuals with diverse backgrounds, values,
sensitivities, and experience are accepted regardless of
their personal attributes, and in which their input is valued
and combined with other ideas.
As part of this commitment, we formulated the Kirin
Women’s Network 2021 (KWN2021) program in fiscal
2013. The aim of this program is to triple the percentage ofleadership positions held by women in fiscal 2013 to 12%
by fiscal 2021. In fiscal 2020 the ratio reached 9.7% thanks
to a range of initiatives, including “advance careerformation,” a system that helps women to increase theirareas of expertise through work experience ahead of major
life events, such as marriage and childbirth, and the “Kirin
Women’s College” program, through which women learn
Percentage of leadership positions held by women
FY2017

6.1%

FY20187.6%

FY20198.4%

FY2020

9.7%

Onboarding

strategy development and leadership skills. We willcontinue to promote women to decision-making roles. Our
goal is to increase the percentage of leadership positions
held by women to 30%, which is regarded as the thresholdfor change in corporate culture, by fiscal 2030.
The Kirin Group is also working to enhance the internal
diversity of its human resources and lower the barriers
separating those within and outside of the company, as
part of efforts to energize the organization, create newvalue, and drive innovation. We actively create
opportunities to encounter diverse perspectives andthought patterns through exchanges of personnel within
and beyond the group and between Japan and overseas.
We are also using the part-time worker system and various
training programs to encourage employees to takeownership of their work by expanding their perspectives
and applying diversity to their day-to-day activities.

Building a vibrant corporate culture
To create value across business domains ranging from food tohealthcare, we need employees to deepen their commitment
to reciprocal understanding across our business areas, and to
the realization of KV2027. We are achieving this bydisseminating our management philosophy and vision togroup company employees through dialogue with businesscompanies and support for their initiatives.
We prioritize the training of management leaders to
implement our philosophy in the business frontline. We arestrengthening our capacity to train the talent needed to

manage the group and its businesses by developing andadministering recruitment, deployment, and training
systems in collaboration with business companies.
One of the goals in KV2027 is to enhance ourorganizational capacity for innovation through acommitment to diversity, inclusion and a culture ofinnovation. We will drive further growth by giving newtasks and prioritized opportunities for challenging work to
employees who achieve results and show initiative. We
promote people according to ability and performance. As
of January 2021, 36 Kirin Brewery employees in their 30s
and 40s were working as office or branch managers.
Since fiscal 2019, Kirin Holdings has released its
employee engagement score, which has risen consistently
over the years, as a non-financial KPI used to measureprogress toward organizational revitalization. To achievesustainable growth as a group, we need to ensure that
employees understand our vision for the Group and arehighly motivated to take ownership of that vision andcontribute to its realization. The enhancement ofengagement is part of our vision for the global Kirin Group.
Since July 2020, we have been implementing a Job
Satisfaction Reform project entitled KIRIN Work Style 3.0
designed to boost employee motivation and turn environmental
changes caused by COVID-19 into opportunities. Our aim is toenhance productivity, creativity, and personal satisfaction, and toachieve sustainable growth both for the company andemployees by motivating individuals through a continual
reexamination of not only the ways that people work, but also
the nature, significance, and purpose of work.

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Human Resource Management
SpecialFeature2 Human Resource Strategy

Promoting Diversity
Fostering Organizational Culture

Case Study: A corporate culture reform initiative launched by volunteers

Onboarding

Kirin Academia—An In-house university providing leadership for the transformation of organizational culture
We support the spirit of challenge by involving
as many people as possible within and beyond
the Kirin Group.

Kirin Academia, our in-house university, was launched infiscal 2019 as a voluntary employee initiative inspired bya desire to create a challenge-oriented culture.
Activities include talk sessions led by guest lecturers
from within and outside of the Kirin Group, andworkshops on the establishment of new businesses.
The initiative was originally started by four young
employees who joined Kirin in fiscal 2015. Today Kirin
Academia is run by a 14-member team and offers over
20 programs each year, with some programs attracting

almost 500 participants. The founding members haveworked passionately to involve as many people aspossible from within and outside of the Kirin Group.
These efforts have resulted in the creation of a diverse,
multi-generational community that continually hosts
programs of a very high standard. In fiscal 2019, Kirin
Academia was selected for the Kirin Group Award as an
initiative that symbolizes and embodies the vision of theKirin Group.

I started Kirin Academia when I was in my fourth year withthe company. I was working for Kirin Beverage at the time,and I wondered if there was an initiative that we could
launch by ourselves. Initially it was a small group run by
volunteers without any budget. However, as our activities
continued, more and more people began to share ourvision for a challenge-oriented culture, and both the scaleand diversity of the program expanded. Through thisactivity, I became aware that the Kirin Group has a cultureof supporting those who take up challenges, and thatanything is possible once you turn your ideas into action.
In fiscal 2021, we have handed the administration of theKirin Academia over to a new generation. We look forward tofurther expansion this year, and we hope that more and more
people from within and outside of the Kirin Group will become
involved in Kirin Academia as a forum in which not only theadministrators but anyone can establish a program.

Mari Nakao
Founding Member
Health Food CRM Group, Health Food CRM Department
Direct store sales Division, FANCL Corporation

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Human Resource Management
SpecialFeature2 Human Resource Strategy

Promoting Diversity
Fostering Organizational Culture

Smoothing the path for new employees

Onboarding of new employees
The Kirin Group implements a variety of onboarding systems
to help employees become familiarized with our businessOnboarding

processes and workplaces as quickly as possible. In addition to
mentoring and buddying programs, these systems also
include support for networking with other employees. Lion
Pty Ltd. has been especially innovative in its approach toonboarding and is being used as a positive case study forgroup companies in Japan. Other group companies are
studying and further enhancing Lion’s systems.

Lion’s approach
Lion has highlighted four focal points for onboarding. First,
new employees should be able to build relationships withleaders and team members, and identify with the corporate
philosophy. Second, there should be a focus on inclusion inorder to harness the potential of differences. Third, thestandard of the onboarding experience should be high.
Fourth, the process should start early. These focal points arereflected in the following specific measures.
• Starting at the recruitment stage, recruitment staff andleaders work together to propose onboarding plans.
• Mechanisms are created to enable the new employee tofunction as a team member from his or her first day,including the creation of opportunities to meet the team
before the person joins the company. After the new
employee joins the company, pulse surveys (short-cycle
engagement surveys) are implemented.
• To facilitate the administration of the onboarding process,manuals and other tools are provided for leaders.

To ensure that new employees are consistently provided with the best
possible onboarding experience, a website has been created to provide
leaders with manuals and support information.

Digital onboarding tools are used to build the new employee’s connections withthe team and the company even before he or she joins the company.

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DX Progress
HR Development andPromotion Framework

Digital Transformation Strategy

Initiatives and Foundation

Creating new value through digitaltransformation
Society is changing with the growing volume of
information and technological advances, and people’svalues and lifestyles are becoming increasingly diversified.
The COVID-19 pandemic that broke out in 2020 only
accelerated this trend.
The Kirin Group has been pursuing sustainable growth byinfusing its operations with information and communications

technology (ICT), and these efforts are now being driven bydigital transformation (DX) aimed at creating new value.

Message from the Officer in Charge of Digital Strategy

Improve Group organizational capacity and generate innovation
Accelerate DX and link it to improving
productivity and creating new value
The Kirin Group Vision 2027 (KV2027) long-term
management vision sets the “ability to use ICT toaccelerate value creation” as one of its “fourorganizational capabilities for achieving innovation.” The
increasing use of ICT in business is making it virtually
impossible to achieve sustaining business growth inmodern society without digital transformation.
The Kirin Group is using DX for value creation by“transforming its business processes,” “raising thevalue of existing business,” and “accelerating thedevelopment of new businesses.”

Transforming our business processes entails
improving our productivity as a manufacturer. One
example of this is in our supply chain management
where we are creating a more efficient logistics
system that can accommodate the shortage of truck
drivers, which reduces CO2 emissions and productwaste loss. We are also using DX in our new businesses
in the priority Health Science domain and Kirin Home
Tap in the food domain.
These initiatives will drive our efforts to reformbusiness processes throughout the Group, increase
the value of existing businesses at all Group companies,and create new businesses by the final year of the next
medium-term business plan in fiscal 2024.

Toru Yoshimura
Senior Executive Officer
Officer in Charge of Digital Strategy

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DX ProgressSpecialFeature3 Digital Transformation Strategy

HR Development andPromotion Framework
Initiatives and Foundation

Message from the Officer in Charge of Digital Strategy

Digital transformation framework

Value Creation

Businesses

ICT
Infrastructure
Organizational
Capabilities

Human
Resources

Transforming its
business processes

Operating systems,
cyber security

Increase staﬀ andskills needed for ICT

Raising the value ofexisting businessAccelerating the developmentof new businesses

Data analysis
platformBusiness infrastructure
supporting collaboration anddiversiﬁcation

Raise data literacy of all staﬀ
Lift baseline of staﬀ ICT literacy
and skill

Forming the organizational structure anddeveloping human resources
For our digital transformation to be a success, we need
to form an organizational structure and develop thehuman resources to drive the transformation. The DX
Strategy Office was created in the Kirin Holdings
Corporate Strategy Department in April 2020 tospearhead the Group’s DX. The office is leading our DX
initiatives from an overall Group perspective whileworking organically with the Corporate Planning
Department and internal departments and with all of
the Group companies. We have also created aGroupwide framework for DX staff from each Group
company and department to share knowledge and work
together to resolve issues.
We are also focusing on acquiring and developing

Organization

DX execution structure,professional organization

human resources. We are increasing our staff ofprofessionals to dispatch personnel with the skills toadvance the DX of all companies and divisions. We plan
to boost our capabilities by tripling the number of ICT
positions in Japan.

Preparing the ICT infrastructure to serve as thefoundation of DX
We are currently engaged in an intense effort toprepare the ICT and data infrastructure needed for thedigital transformation of the entire Group and tomodernize our organization for the digital age. Prior to
the COVID-19 pandemic, we had set in place thebusiness infrastructure of systems and networks toenable employees to work completely from remotelocations, and in 2020, we added a digital experience

platform (DXP)* to enhance our capabilities inmarketing and other areas. We continue to implement
measures to improve operating efficiency, including
conducting internal meetings online and eliminating theseal-based authorization system, and are installing amore flexible cloud-based core operating system.
We are preparing ICT infrastructure that will enable
the entire Group to accelerate DX in every aspect of its
operations.
* A digital experience platform is a suite of management, provision, and optimization
tools and functions enabling a consistent digital experience for customers at allphases of the customer lifecycle.

Strengthening cyber security
As we introduce new technologies and services tofacilitate our DX, data securities measures are critical toensuring the data is used correctly and effectively. We arecountering the escalating number of cyberattacks bymaintaining high-level security bolstered by an advanced
security system equipped with machine learning capability
and by increasing the data literacy of all employees.

Group DX to support sustaining business growth
We are further augmenting our use of ICT, centered on
our DX, to help drive ongoing business growth throughthe rapidly changing business conditions and to keep
pace with the evolving needs of society. Thistransformation promises to open new avenues for the
Kirin Group to create new value.

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DX Progress

3 Digital Transformation Strategy

HR Development andPromotion Framework

Kirin Group initiatives

Initiatives and Foundation

DX in all areas of the Group

logistics and product development and market launch.
We are also planning to review and restructurebusiness processes to increase the value of our functional
departments of human resources and accounting. In
addition, we will develop ideas from digital starting points
and actively apply the latest technologies to focus moreclosely on individual customer needs in the Health Science

The depth and reach of our digital transformation will
extend well beyond specific processes and areas. As a
product manufacturer and marketer, we will apply DX not
only to our fundamental process but also in all of our
supply chain operations from raw material procurement todomain and as we grow the new Kirin Home Tap business in
the Food & Beverages domain.
We will continue steadily integrating DX into all
aspects of our operations to boost the Group’s overallbusiness competitiveness.

Promotion of DX and Development of ICT infrastructure in our value chain
R&D

Procurement / Production

Logistics

Sales / Marketing

Products / Services

Use AI in product development tocreate low-risk formulas and raw
material combinations for
manufacturing

Use factory production data toincrease manufacturing systemeﬃciency and enable moresophisticated business operations

Conduct total supply chain management
simulations to lower costs and optimize
production and logistic capabilities

Improve sales process productivity
while using IT tools to follow
customer, society, anddistribution trends

Digitize and analyze customer feedback
to accumulate knowledge for improving
customer satisfaction

R&D

Procurement / Production

Logistics

Sales

Business Sales / Marketing

Products / Services

Department
Human Resources

ICT
Infrastructure

General Aﬀairs

Business operation systems / cyber security

Accounting

Legal

Business environment

Data analysis platform

Human Resources

General Aﬀairs

Accounting

Legal

Data analysis platform

Construct a new selection processusing video and AI analysis forrecruitment activities

Examine introducing ICT tools toenable free-address oﬃces premisedon employees working remotely

Develop a new management
dashboard and formulate aGroupwide cash allocation system

Introduce electronic
contracts to reduce costs
and paper usage

Integrate various communication
tools and accelerate marketingmeasures and new business launches

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DX Progress

3 Digital Transformation Strategy

HR Development andPromotion Framework

Case Study: Using DX to raise the value of business and new businesses

Initiatives and Foundation

DX Case Study

Overall optimization of
production and logistics

Akiyoshi Ueki
Manager of Planning
SCM Department
Production Division
Kirin Brewery Company, Limited

Brewing new beer business withdigital technology
Kirin Brewery’s new Kirin Home Tap business with amembership business model has been in development
since fiscal 2017. The main feature of Kirin Home Tap isthe home delivery of freshly brewed draft beer directly
to households. Virtually all of the membership contract
and ordering processes are online, and members
receive special announcement of limited-time offers
and member-only campaigns mainly via the dedicatedwebsite and email.

Logistics is essential to delivering our products forclients. However, the operating conditions for logistics
are changing dramatically in Japan, particularly from theshortage of delivery drivers and stricter regulations onwork hours. Overcoming the challenging conditions will
require merging production and logistics into a single
system encompassing all aspects of both operations.
We have developed a simulation system covering
the full range of production and distribution operation
for all types of circumstance, including potentialchanges in demand and company targets. The system

To provide this new value of delivering thedeliciousness of freshly brewed draft beer to customer
homes, we must be able to anticipate long-term supply
and demand trends so we can ensure efficient production
and delivery. Kirin Brewery applied digital technology toformulate operating models for fixed-period deliveries.
The company is engaging in a marketing campaign
in fiscal 2021 encompassing TV commercials, online
advertising, and in-store contact points with the aim ofenlisting 100,000 members for the Kirin Home Tap
service and reinvigorating business in the beer category.
We will continue building the Kirin Home Tap businessaggregates manufacturing, storage, and transportation
cost and capacity data and quantitatively examines andevaluates hypothetical strategic solutions, such asincreasing capacity and reorganizing the production
structure, or increasing overall transport, handling, andstorage capacity.
We plan to develop similar systems to inform
investment decisions for factory production lines anddistribution bases as we seek to construct optimal
production and distribution structures as conditions
change in the future.

and leveraging the power of digital technology to more
rapidly develop products and services tailored toindividual customers.

Members enjoy freshly brewed beer at home byplacing the keg on the dedicated tap.

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Kirin’s Value Creation Model

Kirin Group Corporate Philosophy
KIRIN brings joy to society by crafting food and healthcare products inspired by the blessings of nature and the insights of our customers

Contents

INPUT

BUSINESSOUTPUTOUTCOME

Foundations fordriving innovations

The Kirin Group is activating
business synergies to approachsocial issues as opportunities forbusiness growth

The Group is leveraging its foundation
for driving innovation that enable its
businesses to help society around theworld settle the issues

The Kirin Group gives value back tothe society it serves

39	Kirin Group CSV Purpose and CSV
Commitment
42	Complying with TCFD Guidelines:
Scenario Analyses

Consumer centric
marketingexpertise

CASE 1: H ealth and Well-being
44	--Pharmaceuticals Business --46

CASE 2: The Environment

48

CASE 3: Community Engagement

Financial key
performanceindicators

Business domains

ROIC

Core
technologythat assuresvalue
creation

Diversity andinclusion,
culture forinnovation

31,151employees(consolidated)

64.5billion yen

Providing products
and services tobuild bonds
between people

Food &
Beverages(alcoholic andnon-alcoholic
beverages)

HealthScience

Providing products
and services toimprove people’squality of life

Pharmaceuticals

in R&D expenses

ICT accelerating
value creation

18.6billion yen
in ICT expenses

Economic value
Maximized cash ﬂows

CSV Purpose

CAGR ofnormalized EPS

Non-ﬁnancial key
performanceindicators
CSV Commitment

Continuallydeveloping
innovative
new drugs

Social value

Corporate
brand value

Health andWell-being

The Environment

Community
Engagement

13.7billion yen
in ICT investment

Employeeengagement score

Kirin Group corporate governance

A Responsible
Alcohol Producer

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Kirin Group CSV Purpose and CSV Commitment
Kirin Group Materiality Matrix

CSV Purpose

CSV Commitment

The Kirin Group has organized its “Management Issues for
Sustainable Growth” in the Kirin Group Materiality Matrix(GMM) as part of its commitment to sustainable
development in partnership with society. Based on social
issues related to its businesses, the Group designated thefulfillment of its role as a responsible alcohol producer
along with health and well-being, community engagement,
and the environment as four CSV key issues.

To create value and grow sustainably with society, the Kirin
Group established a CSV Purpose corresponding to each ofits four CSV key issues as its Long-Term Management
Vision, Kirin Group Vision 2027.

The Kirin Group established 19 CSV Commitments as a
medium-term action plan for its CSV Purpose. Eachcommitment was created as non-financial targets in theGroup’s medium-term business plan.

Achievements
in 2020

We commenced a review of issues and theirimportance in the GMM in preparation for thelaunch of our next Medium-Term Management
Plan in 2022.

Plan for 2021

We will engage with external stakeholders about
the revisions to the GMM.

Impact on social sustainability

Responsibility
Sustainable
as a
supply chain pharmaceuticalmanufacturer

HumanrightsA
responsible
alcohol
producer

Safety andsecurityof ourproducts

The
environment

Community
engagement

Human
resources andcorporate
cultureAchievements
in 2020

We commenced a review of our commitments toregional society and communities to reflect thecurrent situation, including social changes
caused by the COVID-19 pandemic.

Achievements
in 2020

We worked toward the achievement of ourtargets through a PDCA cycle and commenced
measurement of social impacts.

Plan for 2021

We will make the necessary changes based on
the results of the GMM update.

Plan for 2021

We will make the necessary changes based on
the results of the GMM update.

Health andwell-being

Health and Well-being

Community Engagement

The Environment

Raise the number of healthy people,
lower the number of sick people,
and contribute to the people whoare involved in the healthcare

Create more opportunities for customers
to spend time with their families andfriends, and develop the communities
within our supply chain

Enrich the sustainable Earth for future
generations through positive impact

Corporate
governance

A Responsible Alcohol Producer

Impact on the Kirin Group’s business

Make steady progress toward eradicating the harmful use of alcoholin all countries of operation (Zero Harmful Drinking)KIRIN CSV REPORT 2021

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Kirin Group CSV Purpose and CSV Commitment

Measuring Social Impacts

Changes in profitability resulting from certification support
Farm incomes and worker wages both increased.

In 2020 we began to measure social impacts with the aimof quantifying the social value of initiatives based on ourcommitment to creating shared value (CSV).
We selected support toward the achievement ofRainforest Alliance certification a pilot project. Training
began in 2013, and in 2014 we measured profit and wages
per worker per unit of tea at tea farms that had achieved
certification. The results showed improvements in bothprofit and wages, as well as a decline in sickness rates
among workers. While the data relate to specific farms, it isevident that support for the achievement of certification
has a positive financial and social impact on farms and theirworkers, while also contributing to the achievement of
the SDGs.

Proﬁt per unit of tea (kg, left-hand scale)

Worker wages (indexed, 2013 = 100, right-hand scale)

150

150

120

120

90

90

60

60

30

30

0

2013

2014

2015

2016

2017

2018 (FY) 0

Changes in sanitary conditions due to certification support
Disease incidence fell sharply despite a gradual rise in the total
population of the farms.
Total farm population

Incidence of fevers and other diseases

Working toward the sustainability ofsociety and the Kirin GroupThe Group’s operating environment is undergoing
major changes, and it is expected to play an activerole in solving issues that communities face today.
In that context, Kirin Holdings became a signatoryof the United Nations Global Compact in September
2005. Since then, we have been working toward thesustainability of society and the Kirin Group basedon the 10 Principles of the Compact, which areorganized under four main categories*. Guided by its
CSV Purpose, the entire Kirin Group is working tohelp accomplish the United Nations Sustainability
Development Goals through its businesses over the
medium and long terms.
* The four categories of human rights, labor, the environment, and anticorruption were selected and agreed upon internationally as universal values.

6,000

SDG target 2.3
The goal is to double the agricultural productivity and incomes of smallscale food producers, including women, indigenous people, family farms,
livestock herders, and fishers, by 2030. Requirements for the achievementof this goal include the provision of reliable and equal access to land andother production resources, inputs, knowledge, financial services, markets,
added value improvements, and non-agricultural job opportunities.

5,000
4,000
3,000
2,000
1,000
0

2013

2014

2015

2016

2017

2018 (FY)Yoshinori Isozaki
President & CEO
Kirin Holdings

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Kirin Group CSV Purpose and CSV Commitment

CSV Promotion Organization
The Group CSV Committee, which is chaired by the CEO of
Kirin Holdings, convenes at least once a year. Its task is toencourage proactive and independent initiatives based on
the CSV.
Achievements
in 2020

The Group CSV Committee met in June, andthe CSV Staff Meeting was established. This
group, which consists of staff responsible forrelated tasks, meets twice each year to share
information and exchange views.

Plan for 2021

The Group CSV Committee will convene to
discuss proposed changes to the GMM.

Group CSV Committee

CSV Staﬀ Meeting(one meeting per year in principle)
Chair: The CEO of Kirin Holdings (KH)

(established in 2020, two meetings
per year in principle)
Members: KH functional units
Planning staﬀ
Key business companies in Japan and overseas
Planning staﬀ

Members: KH functional units
Directors with related areas of responsibility
Key business companies in Japan and overseas
The CEO

Main agenda items
Discussion of the Kirin Group’s long-term
CSV strategy
Monitoring of the CSV commitment

Discussions among staﬀ
responsible for related tasks
and planning in corporate
units and companies help toenhance the eﬀectiveness of
the long-term CSV strategy.

Activities of the Group CSV Committee in 2020
Main agenda items and programs•	Plan to revise the GMM in preparation for the next
Medium-Term Management Plan•	Presentation by, Kenji Ikemori, FANCL founder andHonorary Advisor•	Discussion about human rights in supply chains•	Progress on the examination of policies as part ofenvironmental vision update

Main topics discussed at the meeting•	Business partners, NGOs, investors, and otherstakeholders have called for action on human rights insupply chains. Related issues will affect the Kirin
Group’s reputation.
•	Pressure is increasing, especially from corporate customers,
and eventually consumer attitudes will also shift.
•	Supply chain issues are also management issues forcorporate customers, and we need to work collaboratively.
•	We will form a project team and work as an organizationto achieve the top level in the industry.

Main agenda items
Reﬂecting the long-term CSV strategy in policies
Sharing of case studies about innovative
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CONTENTS

Complying with TCFD Guidelines: Scenario Analyses
The Kirin Group has been building the capacity to disclose
information based on the recommendations released in2017 by the Task Force on Climate-related Financial
Disclosures (TCFD) of the Financial Stability Board (FSB).
We aim to achieve this within about five years. Our
disclosures include assessments of social and business risks
and opportunities relating to climate change, and of theresilience of our strategies. We began to conduct anddisclose scenario analyses in 2018 and also became the firstJapanese food company to declare our support for the
TCFD recommendations.
Following discussions by the Group CSV Committee
and the Board of Directors based on assessment results forthe period to 2019, we formulated and announced theKirin Group Environmental Vision 2050 in February 2020.
This Vision is now being reflected in our mitigation andadaptation strategy. Starting in 2020, we are also disclosing
business growth opportunities relating to climate change.

Medium-term greenhouse gas emissions reduction targets
Total Scope 1 andScope 2 emissions*1

Total Scope 3 emissions*1

Target-30%
Target-50%
TargetNet zeroTarget

Item

Content

Item

Content

Governance

Each year the Board of Directors receives a report detailingclimate change-related risks, opportunities, and strategies,
and the progress made by the Kirin Group. Our long-term
strategy, the Kirin Group Environmental Vision 2050, wasproposed on the basis of discussions about scenario analysis
results by the Group CSV Committee, which is made up of all
officers of Kirin Holdings and the CEOs of the main groupcompanies and is chaired by the President of Kirin Holdings.
After further deliberations by the Group Executive
Committee, the Kirin Group Environmental Vision 2050 was
adopted by the Board of Directors and announced in
February 2020.

Risk
management

The Kirin Group has established the Group Risk andCompliance Committee within Kirin Holdings to oversee risk
management through activities such as quarterly monitoringof risk factors, including climate change-related risks.
However, we are aware that climate change-related risks
cannot be managed solely through the conventional approachof judging the importance of risk factors based on the degreeof impact and the likelihood of occurrence. For that reason,
we have also adopted a new risk management method basedon the development, analysis, and assessment of scenarios forrisk factors for which the probability of occurrence isunknown, but where the consequences of occurrence would
be extremely serious.

The Kirin Group has consistently anticipated social
expectations concerning the environment. For example, in2013 we formulated and announced the Kirin Group
Long-term Environmental Vision covering the period to 2050.
We subsequently became aware of the need to modify the
Vision because of various changes, including the adoption of
the Paris Agreement and concern about the increasingly
serious problems caused by plastics. In addition, we began touse scenario analyses to study physical risks, such as fallingyields and quality issues affecting agricultural raw materials,
as well as the disruption of operations due to droughts andfloods. Our scenario analyses also identified transitional risks,such as cost increases caused by carbon taxes and emissions
trading, and difficulties securing sufficient renewable energy.
We therefore formulated the Kirin Group Environmental
Vision 2050 with the aim of enhancing social and businessresilience to climate change and contributing to our own
business growth.

Metrics andtargets

Strategy

Our targets under the Kirin Group Environmental Vision 2050
are significantly more ambitious. Mitigation measures include
an increase in the medium-term GHG emission reduction
target for all value chains to net-zero by 2050. This has alreadybeen approved under the Science Based Targets initiative(SBTi) as a target under the 1.5˚C scenario. We will also
respond to transitional risks by switching to renewable energy
for 100% of our electric power needs by 2040, and we havejoined the RE100 initiative. Responses to physical risks include
the development and roll-out of technology to allow the useof saccharide substitutes that are not reliant on barley, massplant propagation technology, and advanced water usage
reduction technology. We will also continue to provide
support for the acquisition of sustainable farming
certification. In addition, we will use our technologies tocreate business opportunities, such as products that support
the maintenance of the immune system, in order to combat
heatstroke and infections associated with climate change.

Net zero
2019

2030

2050

2019

2030

2050

*1 In December 2020, we moved from the old 2°C target to a 1.5°C target, which has been
approved under the Science Based Target initiative (SBTi).

Progress
Scope 1 + 2*2

Scope 3*2(Thousand tCO2e)(Thousand tCO2e)

1,200

5,0004,560

1,000

964 959 943 927

4,087
882

4,000

Target

800
3,000
600

4,223
3,972 3,983
2,788

Target

441

2,000

400
200
0 2015 2016 2017 2018 2019 2030

1,000
0 2015 2016 2017 2018 2019 2030

*2 We calculated in the same range as the approved target to the Science Based Targets
initiative (SBTi).

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Complying with TCFD Guidelines: Scenario Analyses

Results of Scenario Analyses up to 2021
Yields and procurement costs for agricultural raw materials
Physical risks
Yield declines/procurement costs
There is a possibility that yields of barley, hops, tea leaves,wine grapes, and coffee could all decline by 5–70%. It is
possible (75th percentile) that procurement cost risks could be
reduced by 8 billion yen or more under the 2˚C scenario
compared with the 4˚C scenario.

Response strategy Response measures
We will mitigate increases in raw material costs by using
brewing technology that does not rely on barley raw materials.
We have accumulated expertise in this area by maintaining
market leadership of 70% and 90% respectively in the
categories of low-malt beer, including zero-malt types, whichhave accounted for over 40% of sales in the Japanese market
over the past 10 years.
We have also enhanced the resilience of our sources by
expanding our support for the acquisition of Rainforest
Alliance certification to include coffee farms in Vietnam as wellas tea farms in Sri Lanka.

Manufacturing/physical impact of water risk/stress

Impact in procurement costs in 2050

Suspension of production

25th percentile
75th percentile(Millions of yen) (Estimates based on the main agricultural
raw materials used in the Japanese
beverage business) Approx. 11 billion yen
12,000

Production facilities in Australia are affected by high water
stress, and those in China (Zhuhai) and Myanmar by highwater risk. Water stress/risk levels relating to raw material
production are high in North America, the United Kingdom,
Germany, the Czech Republic, Ukraine, and Australia.

9,000

0

Year ofevent

Approx. 2.5 billion yen
Approx.
3 billion yen
Approx. 1 billion yen
Current
situation

4˚C scenario

2˚C scenario

Reducing GHG emissions—Regulatory and financial impacts*3,4
Carbon pricing

Transitional risks

There is a significant possibility that carbon taxes will rise inJapan and other countries, and that cross-border carbon
adjustments will be introduced in Europe and North America.

Response strategy Mitigation measures
If the science based target (SBT) under the 1.5˚C scenario isachieved, there will be additional tax savings of approximately 2.2
billion yen in 2030, compared with the situation if GHG emissions
are not reduced, and approximately 800 million yen compared withthe achievement of the SBT under the 2˚C scenario. Carbon taxes
are estimated as fixed amounts for each fiscal year. However, since
they are expected to increase over the years, the estimated tax
savings will also be greater at points further into the future. Thanks
to the accumulated expertise of the Kirin Group in the fields ofproduction technology and engineering, renewable energy
procurement costs will be offset by energy savings achieved
through capital expenditure, allowing us to achieve the targets by
the early 2030s and beyond without impairing economic value.

We are preparing manuals detailing actions to be taken in theevent of factory flooding or the disruption of logistics. We arealso implementing countermeasures, including insurance cover.
In relation to agricultural raw materials, we are accumulatingknowledge about water source conservation for tea farms in Sri
Lanka. We will consider the application of these measures atother locations in the future.

Cost of damages in past factory flooding events (including earthquake damage at the Sendai Brewery)

6,000

3,000

Response strategy Adaptation measures

Physical risk

Description of damage

Lion Castlemaine
Perkins Brewery

2011

Flooding

2m

Approx. 1 billion yen*2

Inundation of the first floor, including thereception area and water recycling plant

Kirin Brewery Sendai
Brewery

2011

Earthquake(intensity:6+), tsunami

7.5 m

Approx. 5 billion yen(excluding stock
damage)Earthquake: Collapse of 4 out of 15 beer tanks
Tsunami: Partial inundation of packaging facilities
and storage areas, etc.

Infections/heatstroke(Billions of yen)

Carbon tax savings

Maximum
Cost of damage*1
flood level(buildings, equipment,in thestock)
facility

Business growth opportunities—Health & Well-being domain*4

Assessment of impact of carbon pricing

If GHG emissions are not reducedType ofdamage

2030

2050

0

0

2˚C scenario SBT (30% reduction
from 2015 level by 2030) achieved

1.4

0

1.5˚C scenario SBT (50% reduction
from 2019 level by 2030) achieved

2.2

0

Achievement of net zero emissions
by 205003.1

Physical risks

If economic growth is disregarded, warming will cause anincrease in the population at risk of dengue fever. Assuming thatthe reduction in the at-risk population if economic growth istaken into account is due to infection countermeasures, there is
the possibility of growth in the market for immunity-related
products. Under the 4˚C scenario, the total Asian market for
immunity-related products is expected to expand to 1.8 times
the 2020 level, or around 750 billion yen, by 2030. The market
for heatstroke-related products is also expected to expand.
Estimates based on the 4˚C scenario indicate that the Japanesemarket will be 2–4 times bigger than the 1981–2000 level by
2050, increasing from 90 billion yen to 190 billion yen.

Response strategy Business opportunities
Product categories offering business opportunities include
functional lactobacillus product to help healthy people to maintaintheir immune systems, and drinks to combat heatstroke.

*1 Losses in past flooding events *2 Yen amounts based on an exchange rate of 80 yen to the Australia dollar*3 2˚C scenario: The carbon tax was fixed at $60/ton. The electric power coefficient was estimated from the sustainable development (2˚C) scenario in the IEA’s WEO 2020.
*4 Amounts in the text and diagram have been converted to Japanese yen at the rate of 110 yen to the US dollar.

Market forecast for infectious
disease-related products
Immunity-related
product market

Population at risk ofdengue fever(Billions of yen)

(Million persons)Approx.
750
Approx.
400

2020

2030

Approx.
1,000

2020
normalApprox.
1,100

2030
4˚C scenario

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Yuichi Kawasaki

1

CASE

Director, Product Strategy Department
Kyowa Kirin Co., Ltd.

Health and Well-being

P R O F I L E Yuichi Kawasaki joined the Pharmaceutical Business
Division of Kirin Brewery Co., Ltd. (currently Kyowa Kirin Co., Ltd.)in 1992. He began his career as a medical representative, whichenabled him to gain experience in the scientific community.
After working in various units, including Kyowa Kirin’s Marketing
Strategy Department and Sales Department, he was transferredto the Product Strategy Planning Department in 2015. During
his time in that unit, he was responsible for the planning andimplementation of product portfolio strategies, including productlife cycle management. He also worked to expand Kyowa Kirin’s
lineup of products relating to kidney disease, which was a priority
area for the company at the time. In April 2021, he was promoted
to Director of the newly established Product Strategy Department.

—Pharmaceuticals Business—

Creating an environment in which society isaware of the wishes and needs of patients* The aim of patient advocacy is to promote sound public understanding of medical
conditions through communication and cooperation with patients and healthcare
professional communities, and to enhance patient well-being by addressing unmet
medical needs through Kyowa Kirin’s value chain.

CSV Commitment

Evolution in medical
treatment
SDG targets
3.8

17.16
17.17

In February 2021, Kyowa Kirin announced a new vision
defining its commitment to meet the needs of patientsand society by providing value across the entire patientcare pathway, delivering cutting-edge science andtechnology, grounded in our in-depth pharmaceuticalknowledge and expertise. Patient advocacy* has been
identified as a priority area for efforts under this vision.
Since the 1990s, Kyowa Kirin has been engaged inresearch and development, manufacturing, andmarketing activities relating to the treatment of chronic
kidney disease (CKD). Over the past decade, we havealso worked to raise awareness of CKD and contribute toprevention by expanding our role in the distribution of
information. We aim to expand our contribution tosociety in this area through the global expansion of ourpatient advocacy activities.

Focus on patient advocacy activities for chronic
kidney disease sufferers
Since the 1990s, Kyowa Kirin has focused on R&D,
manufacturing, and sales of pharmaceuticals for CKD andrelated complications. This emphasis has led to steady
expansion of our product lineup in this disease area. We
have amassed extensive data from our R&D,
manufacturing, sales, and clinical research. As a result, we
believe that Kyowa Kirin is now one of Japan’s leading
pharmaceutical companies in the CKD field.
Our continuing involvement in the CKD field in Japan
has also given us increased opportunities to identify thevarious needs of both healthcare professionals and theirpatients. Those needs relate not only to CKD symptoms
and treatments, but also to society’s response, including
the environment for patients and the need to raiseawareness of the disease and preventive measures. We
have used our accumulated experience to supply booklets

and other materials to patients in Japan through medical
institutions. We also recently established a disease
information website for Japanese CKD patients. Recent
statistics show that this site is attracting large numbers ofaccesses, with page views exceeding 300,000 per month.
Through our initiatives in this area we have become
strongly aware of the need to monitor frontline healthcare
environments and input from patients through ourbusiness operations, and to reflect that information in ourbusiness operations to ensure that our products are usedappropriately. We have also become aware of the need to
Kyowa Kirin initiatives in the CKD field
1980s• Start of research on erythropoietin (EPO), a
hormone that stimulates red blood cell
production• Alliance established with Amgen in 1984
(establishment of Kirin-Amgen)

1990s• Achievement of manufacturing approval in
Japan for genetically modiﬁed humanerythropoietin, commencement of sales in 1990

2000s

• Maintenance of a disease information website
for CKD patients since 2000

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1 Health and Well-being

CASE—Pharmaceuticals Business—create an environment in which society is fully awareof the needs and wishes of patients.
We believe that we can best fulfill Kyowa Kirin’s CSV bysharing our awareness of the issues not only within thepharmaceutical industry, but also within medical institutions,scientific bodies, related organizations, and local governments,
so that we can all work together to find solutions.

To conquer kidney disease
Professor Naoki Kashihara MD, PhD
Chairman, Japan Kidney Association(Non-Profit Organization)

One of our initiatives in this area is the DIAMOND
Project, which was launched in 2019 following thesigning of a collaboration agreement between the Japan
Kidney Association and Kyowa Kirin. This project is giving
us opportunities to renew our awareness of thecommitment of physicians who are regarded as opinion
leaders in the CKD field, and who have provided great

support for our business activities in this area. The
Kyowa Kirin employees involved in the project share astrong commitment to the initiative.

renal failure requiring dialysis treatment, but is also associatedactivities, and the development of collaboration among thosewith strokes, heart disease, and cognitive issues and is a major

involved in treatment, including physicians, specialists, andfactor in the reduction of healthy life expectancies.

administrators.

The JKA was established to contribute to public healthBecause CKD is asymptomatic until it reaches an advanced

and the extension of healthy life expectancies through thestage, it tends to be detected late, even though early detection

prevention of CKD and the limitation of its effects. It isis possible by means of simple blood tests and urinalysis. If theengaged in four projects, including public education about thedisease is discovered at an advanced stage, the impact on the

disease. Recognizing the importance of close cooperation

patient will be greater because it leads to renal failure, requiring

among academic communities, business corporations,dialysis or transplant surgery. As part of the DIAMOND Project, agovernments, and other related organizations on an all-Japansurvey was conducted in 2019 to ascertain the level of public

In May 2019, Kyowa Kirin signed a partnership agreement withbasis, it has also established the Kidney Research Initiative-awareness of CKD. Around half of participants indicated that

the Japan Kidney Association (JKA) concerning public education

Japan (KRI-J) (https://j-ka.or.jp/, Japanese only)

they had never heard of CKD. This shows that there is a need for

P R O F I L E Professor Kashihara’s posts include Vice
President and Head of Department of Nephrology andHypertension at Kawasaki Medical School, Chairmanof the Japanese Society of Nephrology, Executive
Committee Member of the Asian Pacific Society ofNephrology (APSN), and Chairperson of the Renal
Disease Countermeasures Study Group of the Japanese
Ministry of Health, Labour and Welfare.

raising activities based on the JKA’s program to raise awarenessKyowa Kirin was the first partner to join the JKA/KRI-J

increased public education about CKD.
With early detection, CKD can be cured or put intoof kidney disease countermeasures and develop treatment

initiative on public education and awareness-raising about CKD.

systems. Disease incidence patterns in Japan have changed

As a company with a long history of involvement in theremission. In addition, a variety of drugs are emerging for use insignificantly due to lifestyle changes and aging. This is resulting

development of drugs for the treatment of CKD, it has madethe treatment of CKD. The JKA is determined to create an

in increases in the incidence of diabetes and high blood pressure.

significant contributions to the advancement of treatment.

environment in which people living anywhere in Japan can

In addition to cancer and dementia, there has also been an

Known as the “DIAMOND Project,” the Japan-wideaccess high-quality kidney care by continuing our collaboration

increase in cases of chronic kidney disease (CKD), which now

collaborative initiative by Kyowa Kirin and the JKA/KRI-J

with Kyowa Kirin. Our aim is to ensure that no-one has to faceaffects over 13 million people in Japan. CKD not only leads tofocuses on awareness-raising activities and educational

CKD alone. Our shared goal is to overcome kidney disease.

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Emiko Sekikawa

2 The Environment

CASE

Our goal: to achieve the decarbonization of society
through the group-wide reduction of GHG emissions

CSV Commitment

Actions against
climate change

CSV Commitment indicatorGroup-wide GHG emissions
Fiscal 2030 target
Reduce emissions by 50%(compared with the fiscal 2019 level)

Introducing energy-saving equipment and renewableenergy systems into our global operations

Total for Scope 1 and Scope 2

SDG targets
7.2

scientifically valid GHG emission reduction goals aimed
at keeping the rise in global temperatures to less than
1.5°C above the level before the Industrial Revolution.

13.1

17.16
17.17

Reduce emissions by 30%(compared with the fiscal 2019 level)
Scope 3

Under the Kirin Group’s Environmental Vision 2050, we
aim to create a sustainable global environment for
future generations through our business activities.
Addressing climate change is a key issue for the
Kirin Group, which is committed to the achievement of
net zero greenhouse gas (GHG) emissions across its
entire value chain by fiscal 2050. Our medium-termtargets are a 50% reduction in combined Scope 1 andScope 2 GHG emissions, and a 30% reduction in Scope 3
emissions by fiscal 2030, compared with the fiscal 2019
levels. These targets were approved under theinternational Science Based Targets initiative (SBTi) as

Extreme droughts or floods caused by climate change
could have severe impacts on agricultural production.
Because our business relies on the bounty of nature, weplace a high priority on measures to combat climatechange. In recent years, we have actively reduced energy
consumption in our production processes and introduced
renewable energy into our entire operation.
In fiscal 2019, we installed heat pump systems in thewastewater treatment process at Kirin Brewery’s fivebreweries. As a result, Kirin Brewery’s total GHG emissions werereduced by approximately 2% (around 3,400 tons) from theprevious fiscal year’s level. We are expanding the knowledge
gained through this initiative with other group companies inorder to maximize the outcome as soon as possible.
In March 2021, we will start operation of large-scalesolar power generation systems at four Kirin Brewery
production sites. We adopted on-site power purchaseTechnology Development Department,
Production Division
Kirin Brewery Company, Limited
P R O F I L E Emiko Sekikawa joined Kirin Brewery in2009. After working on equipment enhancements
and the improvement of energy efficiency for
packaging processes at Fukuoka Brewery, she was
assigned to head office and placed in charge ofcompany-wide energy-saving initiatives for Kirin
Brewery Company. She next worked in environmental
public relations and disclosure, before taking up her
current position in 2017. She is now involved in thestrategy formulation and implementation for climatechange across the entire Kirin Group.

agreement (PPA) schemes to maximize financial returns
from the projects. We expect to reduce annual GHG
emissions by around 4,500 tons, while also reducing energy
costs. We will contribute to the decarbonization of society
by increasing the amount of power generated using
renewable energy.
From fiscal 2021 onwards, Kirin Brewery will switch torenewables for all purchased electricity at its Nagoya
Brewery. In addition, Kyowa Hakko Bio’s plant in Thailand
will start to introduce renewable energy certificates in
2021, signaling a shift from fossil fuels to renewables.
These two initiatives will reduce our annual GHG emissions
by approximately 12,700 tons.

Achieving our commitment and enhancing
corporate value
The Kirin group is determined not only to achieve its 2030 goals
for initiatives against climate change, but also to generate
economic value from measures to reduce GHG emissions.
Our actions on climate change will require substantial
expenditure, including capex for energy saving projects, aswell as renewable energy costs. Energy-saving projects reduceenergy costs, whereas the introduction of renewable energy
increases those costs. We will prioritize energy-saving projects

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2 The EnvironmentCASE

in our group-wide operations and then introduce renewables
using the accumulated financial benefits generated by energy
savings. Based on this concept, we aim to achieve medium- tolong-term profit neutrality for climate change
countermeasures (see graph below). We will reflect thisapproach in our Medium-Term Business Plan 2022–2024 andimplement projects with substantial energy-saving impacts assoon as possible, in order to reach our targets and maximize
economic value from them.
In recent years companies have faced increasing pressure
to take action against climate change. In Japan, thegovernment is currently planning to introduce a carbon
pricing scheme as designed to impose costs on GHG emittersin proportion to their emission volumes. The Kirin Group is
responding to this situation by working to combat climatechange through the sustained reduction of GHG emissions. We
also aim to link these efforts to reducing the risk of future
profit declines, and to the enhancement of our corporate value.

Accelerating initiatives targeting containers and packaging
The Kirin Group is committed to the recycling ofpolyethylene terephthalate (PET) bottles, and in
December 2020, we began a collaborative technicalstudy with Mitsubishi Chemical Corporation. Repeatedrecycling of used PET bottles using conventional
technology is believed to cause deterioration in the

Cost reductions(energy cost savings)

0

Cost increases(depreciation of investment inenergy saving measures, procurementof renewable energy)

Proﬁt
(net)

Use anddisposalComments from Our Partners

Sorting,
disposal

Kenichiro Mawatari
Executive Director, Division General Manager,
Circular Economy Division
Mitsubishi Chemical Corporation

Shaping

Molding

Profit neutrality of climate change countermeasures(up to fiscal 2030)

We aim to achieve medium- tolong-term proﬁt neutrality
across the entire Kirin Group.

Use inproducts

Beverage
production

quality of the resin. However, the latest technology
breaks down the plastic using chemical decomposition,
allowing PET bottles and other PET products to berecycled indefinitely. The Kirin Group aims to increase
the percentage of PET bottles made using recycledresin to 50% of bottles sold in Japan by fiscal 2027.

Recycling

A society that
continually
recycles plastics

Recycling

RecoverySorting andcleaning

Collection,transportation

Sorting andwashing

Mitsubishi Chemical is working toward the creationof a circular economy with the aim of realizing
KAITEKI, which means “the sustainable well-beingof people, society and our planet Earth.”
We will continue to work with Kirin to reduce
the use of new fossil resources and to achievecarbon neutrality through the continuous andhigh-level recycling of waste PET materials, whichwere not being used effectively.

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Hironori Kobayashi
Château Mercian Mariko Winery General Manager
Mercian Corporation

3 Community Engagement

CASE

Growth in partnership with production areas—bringing Château Mercian to the world

Three wineries dedicated to the pursuit ofquality and the expansion of wine culture

CSV Commitment

More sustainable production of raw materials
CSV Commitment indicator
Grape production atcompany-managed vineyards
SDG targets
2.3

Fiscal 2027 target
8.9

17.16
17.17

200 tons

The Kirin Group aims to achieve sustainable production of
raw materials while also contributing to local communities.
In grape- and hop-growing areas in Japan and tea-growing
areas in Sri Lanka, we contribute to regional revitalizationand the development of business infrastructure throughour support for growers and their workers, as well as
through our involvement in community development andenvironmental conservation.
This commitment is typified in the activities of Mercian
Corporation, which works to create economic and social
value from a long-term perspective through collaboration
with grape-growing regions.

Under its “three winery” concept, Mercian has worked toenhance the potential of its brand by improving quality andexpanding production at its three company-managed
wineries in Yamanashi and Nagano Prefectures.
In 2010, Mercian renovated the Katsunuma Winery in
Koshu City, Yamanashi Prefecture, creating an environment
in which everyone from wine novices to connoisseurs canexperience delights through all five senses. This wasfollowed in 2018 by the renovation of the Kikyogahara
Winery in Shiojiri City, Nagano Prefecture, a garage winery
producing small quantities of unique wines. In 2019,
Mercian established the Mariko Winery in Ueda City,
Nagano Prefecture, where visitors can see the entire wine
manufacturing process, from grape cultivation through towine-making. With the establishment and renovation ofthese wineries, Mercian has created a structure throughwhich it can continually enhance the quality of Chateau
Mercian wines, while also broadening the scope of wine
culture and pursuing its vision as “Japan recognized as oneof the world’s foremost wine regions.”
By increasing the number of wineries in operation to
three, Mercian has reduced the distances from vineyards in

P R O F I L E After joining Kirin in 1999, Hironori Kobayashi
studied winemaking technology at the University of Bordeaux
and other institutions. In 2003, he succeeded in eliciting citrus
aromas from Koshu grapes for the first time, leading to thedevelopment of the Koshu Kiiroka wine. Kobayashi earned a
PhD for his research into the characteristic aromas of Koshu
wines. Starting in 2017, he spent two years in head officeworking on the planning and construction of the Kikyogahara
and Mariko wineries, before taking up his current positionin April 2019. He has also worked with LaVigne Co., Ltd.,a corporation qualified to own cropland, and is currently
exploring the potential for integrated wine production, from
cultivation through to winemaking.

various locations to the wine-making facilities. As a result,grapes can now be harvested at optimal times and quickly
delivered to the wineries. In addition, the close proximity ofwineries has led to increased sharing of technology,
resulting in the improvement of wine quality throughout
the region. Grape harvests are expanding steadily atcompany-managed vineyards, which create jobs for thepeople who carry out the all-important field work, while
also providing opportunities for Mercian supporters to gaina first-hand experience of vine-planting and grape
harvesting. Mercian’s three-winery structure has allowed
the company to expand its business while also contributing
to local communities.

The Terroir series—Wines with Unique Regional Characteristics

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3 Community Engagement

CASE

Creating economic and social value in harmony
and partnership with local communities
Among Mercian’s three wineries, the Mariko Winery has
placed particular emphasis on harmony and partnershipwith local communities.
Established on unused land in 2003, the Mariko Winery
has worked to regenerate the area’s rich ecosystems. Since
its opening, it has built relationships with local
communities while disseminating information about theregion within Japan and internationally. In recent years,
wine tourism has attracted growing interest as a key
contributor to regional revitalization. The Mariko Winery
hosts winery tours and other events, which attracted over
10,000 visitors’ in the first three months after the Winery’s
opening. Mercian is also helping to raise awareness of thehigh quality of Japanese wines by inviting international
wine experts to the Mariko Winery. During the COVID-19
crisis, the Winery has continued to disseminating
information through social networks and other media.

International recognition for the Mariko Winery
The “World’s Best Vineyards” list is compiled by the British
company William Reed Business Media. The best 50 wineries
in the world are selected by over 500 international wine,
gastronomy and travel experts. In 2020, over 1,800 vineyards
were nominated. The news that the Mariko Winery hadearned a place among the world’s best wineries attracted
intense interest and was even featured in U.S. media reports,
one of which characterized the selection of a Japanesewinery for the first time as a stunning success thatsymbolized the diversity of the world’s wineries.
“World’s 50 Best Vineyards 2020” plaque and trophy

In 2020, the Mariko Winery was selected for the 30th
position on the “World’s Best Vineyards” list of top wineries
engaged in wine tourism (see lower left-hand column). This
was the first time that a Japanese winery was included in
the list, and the achievement was covered by numerous
major media organizations. In addition to increased sales ofChâteau Mercian wines, inclusion in the list has also resulted
in global recognition of the region around Mariko Winery
as one of Japan’s top wine-producing areas.
In the two years since the opening of the Mariko
Winery, we have worked constantly to maintain harmony
with local communities, the natural environment, and thefuture. We are constantly reminded that the Mariko Winery
has become a beloved part of the local community by local
residents, who frequently visit the winery and tell us that isthe pride of the region.
The strong links that have developed between
Mercian’s three wineries and their local communities are
key to our continuing efforts to create Chateau Mercian
wines that reflect unique regional characteristics. We aredetermined to develop Chateau Mercian into a premierbrand worthy of representing Japan in the global arena,and to contribute to Japan’s emergence as one of theworld’s foremost wine regions.

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Kirin’s Value Creation Model

Kirin Group Corporate Philosophy
KIRIN brings joy to society by crafting food and healthcare products inspired by the blessings of nature and the insights of our customers

Contents

INPUT

BUSINESSOUTPUTOUTCOME

Foundations fordriving innovations

The Kirin Group is activating
business synergies to approachsocial issues as opportunities forbusiness growth

The Group is leveraging its foundation
for driving innovation that enable its
businesses to help society around theworld settle the issues

The Kirin Group gives value back tothe society it serves

51	Evolution of the Corporate
Governance System
52 Corporate Governance Systems

Consumer centric
marketingexpertise53	Directors, Audit & Supervisory Board
Members, and Executive Officers

58	Enhancing Management Effectiveness60	Executive Officer Remuneration

Business domainsCore
technologythat assuresvalue
creation

Diversity andinclusion,
culture forinnovation

31,151employees(consolidated)

64.5billion yen

Providing products
and services tobuild bonds
between people

Food &
Beverages(alcoholic andnon-alcoholic
beverages)

HealthScience

Providing products
and services toimprove people’squality of life

Pharmaceuticals

in R&D expenses

Economic value
Maximized cash ﬂows

ROIC

55 Message from the IndependentNon-executive Director
59	Expertise and Experience of Directors,
Audit & Supervisory Board Members,
and Executive Officers

Financial key
performanceindicators

Social value
CSV Purpose

CAGR ofnormalized EPS

Non-ﬁnancial key
performanceindicators
CSV Commitment

Health andWell-being

The Environment

62 Risk Management
ICT accelerating
value creation

18.6billion yen
in ICT expenses

Continuallydeveloping
innovative
new drugs

Corporate
brand value

Community
Engagement

13.7billion yen
in ICT investment

Employeeengagement score

Kirin Group corporate governance

A Responsible
Alcohol Producer

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Evolution of the Corporate Governance System
1999–2006

2007–20122013–2015

2016–20182019–2027

Long-term management vision
Business plans and organization• Implementationof Groupmanagement• Overseas
expansion• Introduction of
in-housecompany systemwith Kirin
Brewery as
operating andholdingcompany

1999〜

Kirin Group Vision 2015

Kirin Group Vision 2021

New Kirin Group Vision 2021

Kirin Group Vision 2027

• Pursuit of rapid growth• Aggressive overseas expansion through M&A activities• Organic growth utilizing establishedfoundations of global businesses acquired
under Kirin Group Vision 2015
• Revitalization of Japan Integrated
Beverages Business• Clariﬁcation of Kirin Group’s unique CSV• Value creation in all domains from Food &Beverages to Pharmaceuticals• Become a global leader in CSV

2007–20092010–20122013–2015

2016–20182019–2021• Promotion of“qualitative expansion”• Restructuring and revitalization of Kirin Group• Three-year shift to “organic growth”• Introduction of regional headquarters systemwith Kirin Holdings as global headquarters• Establishment of Kirin Company as regional
headquarters for the Japan Integrated
Beverages Business

MTBP• Introduction of pure holding
company system and establishmentof Kirin Holdings

2007

2008

2009

2010

2011

2012

2013

2014

2015

Corporate governance evolution

2003• Establishment of Appointment Advisory Committee and Compensation Advisory Committee• Establishment of Group Risk Management Committee

2006

2014

• Establishment of Group Executive Committee• Establishment of Group Information Disclosure Committee• Establishment of Group CSR Committee• Change of name toGroup CSV Committee

Change in number of
executive oﬃcers

2003

2018

2019

2020〜

• Introduction of new executive oﬃcer system at Kirin Holdings and Kirin Company• Appointment of executive oﬃcers in charge of overseas operations at Kirin Holdings• Liquidation of marketable securities
and other assets

Non-executive • Streamlining of Board of Directors
directors 2
Non-executive
directors 2 2007

2017

2015

2010–2012

2002

2016

• Shifting Gear from Revitalization to Growth• Integration of Kirin Holdings and Kirin Company• Capital and business alliance with FANCL

2016

2018

• Announcement of corporate governance policy• Formation of Nomination and Remuneration
Advisory Committee• Appointment of non-executive director as
chairman of the Nomination andRemuneration Advisory Committee• Reorganization into Group Risk andCompliance Committee• Speciﬁcation of cross-shareholdings
reduction in the corporate governance policy

2020• Revision of stock-based
compensation to trust
type (performance-based)• Addition of non-ﬁnancial
evaluations toperformance indicators

2017• Revision of oﬃcer remuneration system• Introduction of restricted stockcompensation system (performance-based)

2012

2016

2020

• Appointment of female Audit &Supervisory Board member• Appointment of female director• Appointment of independent non-executive
director as chairman of the Board• Foreign directors appointed• Independent non-executive directors account fora majority of the Board of Directors• Termination of the retirement beneﬁt and consultancy systems
25
Inside directors
23

9

10
Inside directors 8• Reduction of term of directors from two years to one* Chart represents total number of directors as of April 1 of each year.

Insidedirectors 512Non-executive
directors 4

Insidedirectors 5

Non-executive
directors 7

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Corporate Governance Systems
General Meeting of Shareholders
Audit & Supervisory Board 2

Board of Directors 1
Chairman

Auditing
InsideIndependent
members 2 members 3

Auditing

Auditing

Independent accounting auditor 2

Inside directors 5 Independent directors 7

Nomination and Remuneration Advisory
Committee 3 Chairman

Auditing

Inside directors 2 Independent directors 3

Kirin Holdings

President & CEOGroup Executive Committee 4Internal Audit Department 2

Internal
auditing

Executive Oﬃcers
Departments

Group CSV Committee 4Group Risk and Compliance Committee 4Group Information Disclosure Committee 4Internal auditing
Group companies

Operating companies

1 Desired functions of the Board of Directors of the Kirin Group
Enhance medium-to-long term corporate value by making
important corporate decisions and providing supervisory functions
through verifying executive and business company strategies(proposals), making sound recommendations from a broad
perspective, and providing oversight.
Important decision-making•Focus on important matters and discuss them from a medium-to-longterm group management perspective by using a compact
decision-making structure that delegates responsibility to
executing managers
Oversight•Enhance supervisory functions with input from independent nonexecutive directors with diverse expertise and objective perspectives

Functional companies
2 Mutual cooperation between Audit & Supervisory Board members,	
independent accounting auditor, and internal control divisions•Audit & Supervisory Board members, in addition to Audit & Supervisory
Board meetings, regularly attend Board of Directors meetings andother important corporate meetings, and visit Group companies inJapan and overseas to audit directors in the performance of theirduties. Members also work closely with corporate auditors of Group
companies to enhance the effectiveness of audits.
•The Internal Audit Department audits the Group’s major risks andinternal control system. The Internal Audit Department, Audit &Supervisory Board members, and independent auditors exchange
information and views and hold discussions when necessary. The
Internal Audit Department and Audit & Supervisory Board members
obtain pertinent information by attending meetings of the internal
control divisions and the independent accounting auditor interviews
internal control division staff as necessary to conduct an effective audit.

3 Advisory body to the Board of Directors
Nomination and Remuneration Advisory Committee: An advisory bodyto the Board of Directors; the committee is responsible for discussing
from an objective and fair perspective the appointment/removal andremuneration of directors, Audit & Supervisory Board members, andexecutive officers of major Group companies. The committee is also
responsible for the Kirin Holdings CEO successor plan. As for thecomposition of the committee, the chairman and the majority ofcommittee members are independent non-executive directors, thus
ensuring objectivity and transparency. The term of office is one year.
Independent directors: Chieko Matsuda (Chairman),
Hiroyuki Yanagi, Noriko Shiono
Inside directors: Yoshinori Isozaki, Toshiya Miyoshi
4 Advisory bodies to the presidentGroup Executive Committee: The Group Executive Committee assists thepresident & CEO in decision-making on matters related to strategies andinvestments that will have a significant impact on the Kirin Group.
Group CSV Committee: The Group CSV Committee deliberates theplanning of Group CSV policies and strategies and monitors the
progress status of CSV initiatives. The committee presents proposals
and reports as necessary to the Group Executive Committee and theBoard of Directors, which are reflected in the Group’s overall strategy.
Group Risk and Compliance Committee: The Group Risk andCompliance Committee promotes and supervises risk
management and the steadfast execution of compliance. The
committee ensures the proper activation of response systems forcrisis situations, such as by supporting information sharing andresponses among Group companies in Japan and overseas.
Group Information Disclosure Committee: Delegated by thepresident, the Group Information Disclosure Committee regularly andat suitable times deliberates and decides the necessity and content of
information disclosure, including the disclosure of quarterly results
and information related to specific events, from the perspective ofproviding useful information to shareholders and investors.
Note: Due to the increased diversity and expertise of the members on the Board of
Directors, the International Advisory Board (IAB) and strategic advisors, which
previously provided advice and recommendations from a global and specialized
perspectives, were eliminated in fiscal 2020.

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Directors, Audit & Supervisory Board Members, and Executive Officers
Directors

Independent non-executive directors of the Board

Yoshinori Isozaki

Keisuke Nishimura

Toshiya Miyoshi

Masakatsu Mori

Hiroyuki Yanagi

Chieko Matsuda

Noriko Shiono

President & CEO

Representative Director of
the Board, Senior Executive
Vice President

Director of the Board,
Senior Executive Oﬃcer

Independent Non-executive
Director of the Board*

Independent Non-executive
Director of the Board*

Independent Non-executive
Director of the Board*

Independent Non-executive
Director of the Board*

1978 Joined Yamaha Motor Co., Ltd.
2007 Executive Oﬃcer of Yamaha
Motor Co., Ltd.
2009 Senior Executive Oﬃcer of
Yamaha Motor Co., Ltd.
2010 President, CEO, and Representative Director of Yamaha MotorCo., Ltd.
2018 Chairman and Representative
Director of Yamaha Motor Co., Ltd.
2019 Independent Non-executive Directorof the Company (current position)
2021 Chairman and Director of Yamaha
Motor Co., Ltd. (current position)

1987 Joined The Long-Term Credit Bankof Japan, Limited
2011 Professor of School of Business
Administration, Faculty of Urban
Liberal Arts (currently Faculty of
Economics and Business
Administration) at Tokyo
Metropolitan University (current
position), Professor of Department of
Business Administration, Graduate
School of Social Sciences (currently
Graduate School of Management) at
Tokyo Metropolitan University(current position)2016 Audit & Supervisory Board
Member of the Company
2020 Independent Non-executive Directorof the Company (current position)

1983 Joined Japan New Media Co., Ltd.
2010 Representative Director, Presidentof SSP Co., Ltd.
2017 President of Widex K.K. (current
position)2018 Non-executive Director of Kirin
Co., Ltd.
2020 Independent Non-executive Directorof the Company (current position)

Member of the Nomination andRemuneration Advisory Committee
1977 Joined the Company
2015 President & CEO of the Company(current position)

Business Alliance and Investment
Strategy, Overseas Business,
Global Craft Beer1980 Joined the Company
2017 Representative Director of theBoard, Senior Executive Vice
President of the Company (current
position)
Major Concurrent Positions
Director of Lion Pty Ltd
Director & Vice Chairman of Myanmar
Brewery Limited
Director of San Miguel Brewery Inc.
Director of China Resources Kirin
Beverages (Greater China) Co., Ltd.

Member of the Nomination andRemuneration Advisory Committee
HR and General Aﬀairs
1982 Joined the Company
2015 Director of the Board, Senior
Executive Oﬃcer of the Company(current position)
Major Concurrent Positions
Director of Kirin Brewery Co., Ltd.
Director of San Miguel Brewery Inc.

Chairman of the Board

1969 Joined Arthur Andersen, LLP
1995 Japan Representative of Andersen
Consulting (currently Accenture
Japan Ltd.)2015 Audit & Supervisory Board
Member of the Company
2018 Senior Advisor of International
University of Japan(current position)
2019 Independent Non-executive Directorof the Company (current position)

Member of the Nomination andRemuneration Advisory Committee

Chairperson of the Nomination andRemuneration Advisory Committee

Noriya Yokota

Noriaki Kobayashi

Rod Eddington

George Olcott

Kaoru Kato

Director of the Board,
Senior Executive Oﬃcer

Director of the Board,
Senior Executive Oﬃcer

Independent Non-executive
Director of the Board*

Independent Non-executive
Director of the Board*

Independent Non-executive
Director of the Board*

1979 Joined John Swire & Sons (H.K.)
Ltd.
1992 Managing Director of Cathay
Paciﬁc Airways Limited
2000 Chief Executive Oﬃcer of British
Airways Plc.
2012 Chairman, IndependentNon-executive Director of Lion Pty
Ltd (current position)2020 Independent Non-executive Directorof the Company (current position)

1986 Joined S.G. Warburg & Co., Ltd.
2000 Managing Director, Equity CapitalMarket, UBS Warburg Tokyo
2014 Guest Professor, Faculty ofBusiness and Commerce, Keio
University (current position)2020 Independent Non-executive Directorof the Company (current position)

1977 Joined Nippon Telegraph andTelephone Public Corporation2012 Representative Director andPresident & CEO of NTT DOCOMO, INC.
2016 Corporate Advisor, Member of theBoard of NTT DOCOMO, INC.
2018 Corporate Advisor of NTT
DOCOMO, INC. (current position)
2019 Member of the Board of
Directors (Outside Director) of
Mitsubishi UFJ Financial Group, Inc.
(current position)
2021 Independent Non-executive Directorof the Company (current position)

Chief Financial Oﬃcer, IR, IT,
Business Transformation
1984 Joined the Company
2018 Director of the Board, Senior
Executive Oﬃcer of the Company(current position)
Major Concurrent Positions
Director of Kyowa Kirin Co., Ltd.
Director of Kirin Business System Co., Ltd.

R&D Strategy, Quality Assurance
1983 Joined the Company
2019 Director of the Board, Senior
Executive Oﬃcer of the Company(current position)
Major Concurrent Positions
Director of Kyowa Hakko Bio Co., Ltd.

Member of the Nomination andRemuneration Advisory Committee* Non-executive Director as
described in Article 2-15 of theCompanies Act of Japan. Also
fulﬁlls the requirements fordesignation as an independentoﬃcer as prescribed in theregulations of the Tokyo Stock
Exchange and complies with theCompany’s Criteria regarding theindependence of Oﬃcers.

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54

Directors, Audit & Supervisory Board Members, and Executive Officers

Audit & Supervisory Board members

Executive oﬃcers

Akihiro Ito

Keiji Kuwata

Nobuo Nakata

Hiroshi Ogawa

Ryosuke Mizouchi

Toru Yoshimura

Junko Tsuboi

Standing Audit &Supervisory Board Member

Standing Audit &Supervisory Board Member

Audit & Supervisory
Board Member*

Senior Executive Vice President

Senior Executive Oﬃcer

Senior Executive Oﬃcer

Senior Executive Oﬃcer

1983 Joined the Company
2015 Director of the Board, Senior
Executive Oﬃcer of the Company
2018 Standing Audit & Supervisory
Board Member of the Company(current position)
2019 Audit & Supervisory Board Memberof Kyowa Hakko Bio Co., Ltd.
(current position)

1985 Joined the Company
2019 Standing Audit & Supervisory
Board Member of the Company(current position)
Audit & Supervisory Board
Member of Kyowa Hakko Kirin Co.,
Ltd. (currently Kyowa Kirin Co.,
Ltd.) (current position)

1985 Admitted to the Japanese Bar andjoined Ishiguro Law Oﬃce as
an associate1987 Associate of Masuda & Ejiri(currently Nishimura & Asahi)
1991 Admitted to the New York Bar
1992 Partner of Masuda & Ejiri (currently
Nishimura & Asahi)
2007 Partner of Allen & Overy2012 Representative Partner of
Hibiya-Nakata (current position)2018 Audit & Supervisory Board
Member of the Company(current position)

Public Relations, Risk Management,
Legal
Director of Kirin Brewery Co., Ltd.

CSV strategy, North America Beer
Business
Director of Lion Pty Ltd
Director of Coca-Cola Beverages
Northeast, Inc.
Director of Mercian Corporation

General Manager of Corporate
Strategy Department,
Health Business Strategy,
Digital Strategy
Director of Kirin Beverage Co., Ltd.

General Manager of Strategic Branding
Department, Marketing,
Strategic Branding
Outside Director of FANCL Corporation

Yoshiko Ando

Kaoru Kashima

Masao Maehara

Takayuki Fuse

Hideki Horiguchi

Takeshi Minakata

Audit & Supervisory
Board Member*

Audit & Supervisory
Board Member*

Senior Executive Oﬃcer

Senior Executive Oﬃcer

Senior Executive Oﬃcer

Senior Executive Oﬃcer

1982 Entered the Ministry of Labor
2003 Lieutenant Governor of Shiga
Prefecture
2006 Director of Equal Employment
Policy Division of Equal
Employment, Children andFamilies Bureau of the Ministry of
Health, Labour and Welfare(MHLW)
2013 Director-General of Industrial
Accident Compensation
Department of Labour Standards
Bureau, MHLW
2014 Director-General of Equal
Employment, Children andFamilies Bureau, MHLW
2015 Director-General for Labour Policy
Planning, MHLW
2016 Director-General for Statistics andInformation Policy, MHLW
2017 Director-General for Human
Resources Development, MHLW
2019 Audit & Supervisory Board
Member of the Company(current position)

1981 Joined Showa Audit Corporation(currently Ernst & Young
ShinNihon LLC)
1985 Registered as a certiﬁed public
accountant
2010 Managing Director of Ernst &Young ShinNihon LLC In charge ofCorporate Culture PromotionOﬃce, Public Relations Oﬃce
2012 General Manager of Knowledge
Headquarters, Managing Directorof Ernst & Young ShinNihon LLC
2013 Representative Director of Ernst &Young Institute Co., Ltd.
2020 Audit & Supervisory Board
Member of the Company(current position)

Supply Chain Management (Production,
Logistics, and Procurement)
Director of Kirin Beverage Co., Ltd.

President and CEO of Kirin BreweryCo., Ltd.

President and CEO of Kirin BeverageCo., Ltd.

President & CEO of Kyowa Hakko
Bio Co., Ltd.

Information on matters related to the nomination of directors and Audit & Supervisory Board members can be found on the Company’s
corporate website.

WEB

Management (proﬁle and reasons for nomination)
https://www.kirinholdings.com/en/proﬁle/board/WEB

Criteria regarding the independence of Oﬃcers
https://www.kirinholdings.com/en/purpose/ﬁles/pdf/
e_independencecriteria_oﬃcer.pdf* Outside Company Auditor as described in Article 2-16 of the Companies Act ofJapan. Also fulﬁlls the requirements for designation as an independent oﬃcer
as prescribed in the regulations of the Tokyo Stock Exchange and complies with
the Company’s Criteria regarding the independence of Oﬃcers.

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Message from the Independent Non-executive Director

Expert insights on Kirin’s governancefrom a global perspective
George Olcott
Independent Non-executive Director

ProfileMr. George Olcott’s distinguished career includes serving as the
President of UBS Asset Management (Japan). He has held academic
positions as Senior Fellow of the Judge Business School, Universityof Cambridge and is presently Guest Professor of the Faculty ofBusiness and Commerce, Keio University. He currently serves as
outside director for Denso Corporation and Dai-ichi Life Holdings,
Inc. Mr. Olcott was appointed as Independent Non-executive
Director of the Company in 2020.

55

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Message from the Independent Non-executive Director

Objective and robust discussion supported byprogress in diversity
During my first fiscal year as a member of the Board of
Kirin Holdings, I have been impressed by the quality of theBoard relative to other Japanese companies. It’s difficult tobenchmark the performance of the Board against global
standards since the Japanese corporate structure andboard practices are affected by local legal and cultural
factors, but I have been favorably impressed with the levelof debate and the kinds of issues that get raised at theBoard and how they’re dealt with.
A majority of the Board is now independent nonexecutive, and we have an independent chairman. In
appearance, this resembles the UK configuration familiar
to me, although the audit committee structure is quite
different. Although I’m not on the Nomination andCompensation Advisory Committee, I can report that
discussions at a recent senior salary review proved to bevigorous and transparent. I understand that the succession
planning process is also discussed in an open andtransparent way.
Our board is very diverse for a Japanese company,
with two Japanese women, two foreigners, and three
Japanese men. I am encouraged that the company
appreciates the different perspectives that Sir Rod

Eddington, one of our fellow independent non-executive
directors, and I, as non-Japanese, bring to the Board.
To grow as a global business, however, Kirin needs toaggressively diversify the executive group by hiring andpromoting more women and non-Japanese candidates. To
promote diversity in our total organization, we also need to
expand graduate recruitment to non-Japanese universities.

Fully engaged in rigorous debate on portfolio
strategy
While I can’t speak for the past, I get the impression that
we are addressing key strategic issues with increasingly
healthy and rigorous debate. Participating in a couple ofdiscussions in the autumn about our portfolio, I was glad tosee a bottom-up analysis held in a spirit of openness. Whenmanagement’s direction was questioned by board
members, the executives seemed well prepared forvigorous debate.
In the process of portfolio optimization, I am satisfied
that the company considers whether Kirin is the rightowner of its businesses. The direction in which we shouldor might go, the alternatives, and the resources required tofinance various scenarios were fully discussed. It struck methat the portfolio review process was a genuine one, andnot a rubber-stamping exercise.

A number of issues, parent-child listing, for example,
call for further debate. At a UK company, these kinds ofstrategic issues are discussed within group of the nonexecutive directors. Increasing cohesiveness among thenon-executive group is an issue for all Japanese boards andI hope that in a Covid-free environment, we will promote
this at the Kirin board.
I am reassured by these portfolio discussions that Kirin
is fully engaged in evaluating, and re-evaluating, its
strategy. I hope to see more of this kind of strategic
discussion and to explore new ways of improving theBoard’s oversight function.

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Message from the Independent Non-executive Director

Views on Kirin management’s efforts toenhance corporate value
I think Japanese companies tend to be too defensive about
exposing independent board members to shareholders.
But Kirin is fairly open in this regard and doesn’t have any
particular issues.

Kirin now uses ROIC as one of its KPIs. This gives
executives a clearer picture of how resource allocation,
cross holdings, and governance are interrelated. I havebeen impressed by the pace of the unwinding of crossholdings by Kirin, a Mitsubishi group company. The processof further unwinding will be challenging, and management
needs to maintain the good momentum it has built up.

Sold strategic shareholdings worth of 150.0 billion yen in
the past 12 years

Ratio of strategic shareholdings*1,2 to equity declined to
7.5%(Billions of yen)2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY)

20.0%

18.6%

0

17.2%
15.0%

20 18.0
40
60
80

26.6

12.8%
5.5

10.0%
21.6 1.0

0.2

10.0%

0.5
12.1

100

7.5%

0.5
15.5

120

35.9

140
160
180

Total value of shareholdings sold through previous years
Value of shareholdings sold in the ﬁscal year

18.9

0.0%

2015

2016

2017

2018

2019

2020

*1 Percentage of shareholdings held for purposes other than pure investment*2 Reference figures for fiscal 2015 and 2016 are based on J-GAAP.

(FY)For risk management, we meet monthly to discuss
potential issues based on clear and concise metrics. Cyberrisk is an area where an HR strategy based on recruiting
qualified IT specialists, either out of university or as midcareer hires, will strengthen Kirin’s capabilities. To deploy
mission-critical infrastructure, the IT department needs
truly qualified IT talent from top to bottom, including
hiring good resources from outside.
Another risk area is human rights. Japanesecompanies in general have different ways of engaging
with such issues, but Kirin’s response to the crisis in
Myanmar has been appropriate at this stage. Here again,
an independent non-executive discussion platform could
support Kirin in handling human rights risk in ways thatwin international approval.
Normally, in the first year I would have had face-toface meetings with senior executives and I would be doinga lot of site visits. Kirin is a global company, and in the year
ahead I wish to better understand the strengths,
weaknesses, and strategies of its individual businesses, freeof pandemic-related restrictions.
Globalization strategies gain from a viewpoint
different from that of a Japanese independent director.
Global business is one area where I hope to make aparticular contribution.

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Enhancing Management EffectivenessEvaluations of the Board of Director
effectiveness
The Board of Directors effectiveness evaluations conductedin fiscal 2016 defined the Board’s two primary functions asmaking important corporate decisions and providing
supervisory oversight. We continue to conduct regular
evaluations of Board operations and meeting content toboth ensure those functions are being fulfilled and tocontinually improve its efficiency by identifying points tomake the meetings more effective in the next fiscal year.
In fiscal 2020, the Board of Directors focused on
further strengthening its supervisory function, which was
identified as a point requiring improvement in theprevious-year evaluation. Due to the COVID-19 pandemic,
the Board is allocating additional time in each meeting todiscuss risk management.

Fiscal 2020 evaluations
The Board of Directors discussed and evaluated the survey
responses and the current status of improvement efforts
based on questionnaires incorporating the observations ofthird-party advisors and additional interviews. The
observations and evaluation results were as follows.

Observations(1) C omposition and operation of the Board of Directors(2) S trategy formulation, execution, and monitoring(3) O versight of risk and crisis management(4) O versight of decision-making, such as in business acquisitions
and withdrawals(5) O versight of executive compensation and successor
development plans(6) D epths of awareness and oversight of sound corporate ethics(7) G eneral oversight of disclosure to stakeholders(8) O verall effectivenessFiscal 2020 discussion points

Evaluation results

1. Discuss the composition and operation of the Board of Directors
for providing specialized and objective oversight and advising in
the Heath Science and other business domains
2. Discuss the degree of familiarity and penetration of soundcorporate ethics among employees, including understanding of
the Group Philosophy System and corporate ethics
3. Discuss risk management pertaining to the globalization andincreasing complexity of risk
4. Discuss issues from the perspective of non-financial targets (theCSV Commitment), including environmental, social, andgovernance (ESG)
5. Discuss specific function strategies needed to execute theoverall medium- and long-term strategy to raise corporate value
considering market and competitor trends

As a whole, the Board of Directors is effective and functioning properly.

generating sustaining growth• Discussion centered on topics that management should focus
on, enabling deep discussion of management issues(3) The Board of Directors is operating properly, and steps arebeing taken to further improve its functionality• Functionality has been vastly improved in agenda setting,time allocation, and opportunities to share information• The amount of reports and open discussions about issues thatare not part of the meetings is gradually increasing, and the
deeper understanding of the business and strategies is
improving the quality of the discussions

Points to improve in fiscal 2021
Management has specified four points for improvement infiscal 2021 based on the opinions and areas for
improvement indicated in the evaluations in fiscal 2020 andwith a view for the changing business environment.
The Company continually seeks to maintain andimprove the effectiveness of the Board of Directors inaccordance with the agenda set by Independent Nonexecutive Director and Chairman of the Board Masakatsu
Mori and by providing more opportunities to share
information and engage in open discussions.

Points receiving positive evaluations(1) T he diversified Board of Directors enhances the effectivenessof important decision-making and provides multiple
perspectives• The independent non-executive director majority has
broadened the Board’s range of expertise and strengthened
the supervisory function over business execution• The Company has established a strong monitoring system toreinforce its status as a company with an Audit & Supervisory Board(2) Board of Directors discussion content is to the point and thorough• Discussion of the business portfolio covers various angles for

Main discussion points for fiscal 2021
1. Specific function strategies needed to execute the overall
strategy considering market and competitor trends
2. The degree of familiarity and penetration of sound corporate
ethics among employees, including understanding of the Group
Philosophy System and corporate ethics
3. Risk management pertaining to the globalization and increasing
complexity of risk
4. Issues from the perspective of non-financial targets (the CSV
Commitment), including environmental, social, and governance (ESG)The Kirin GroupKIRIN CSV REPORT 2021

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Expertise and Experience of Directors, Audit & Supervisory Board Members,
and Executive Officers
Independent directors

Expertise and Experience
HR
Corporate
ESG /Finance /Management /Management Sustainability Accounting
Development
President & CEO

Yoshinori Isozaki

Representative Director of the Board,
Senior Executive Vice President
Director of the Board, Senior
Executive Oﬃcer
Director of the Board, Senior
Executive Oﬃcer & CFO
Director of the Board, Senior
Executive Oﬃcer
Independent Director(non-executive)
Independent Director(non-executive)
Independent Director(non-executive)
Independent Director(non-executive)
Independent Director(non-executive)
Independent Director(non-executive)
Independent Director(non-executive)
Standing Audit & Supervisory
Board Member
Standing Audit & Supervisory
Board Member
Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberAudit & Supervisory Board
MemberKeisuke Nishimura

Senior Executive Vice President

Hiroshi Ogawa

Senior Executive Oﬃcer

Ryosuke Mizouchi

Senior Executive Oﬃcer

Toru Yoshimura

Senior Executive Oﬃcer

Junko Tsuboi

Senior Executive Oﬃcer

Masao Maehara

Senior Executive Oﬃcer

Takayuki Fuse

Senior Executive Oﬃcer

Hideki Horiguchi

Senior Executive Oﬃcer

Takeshi Minakata

Toshiya Miyoshi
Noriya Yokota
Noriaki Kobayashi
Masakatsu Mori
Hiroyuki Yanagi
Chieko Matsuda
Noriko Shiono
Rod Eddington
George Olcott
Kaoru Kato
Akihiro Ito
Keiji Kuwata
Nobuo Nakata
Yoshiko Ando
Kaoru Kashima

Criteria regarding the independence of Officers
https://www.kirinholdings.com/en/purpose/files/pdf/e_independencecriteria_officer.pdf

Legal /
Brand
Compliance /Strategy /SCM
Risk
Marketing /Management
Sales

R&D / New
Overseas Business / ICTDXBusiness
HealthScience

To increase the fairness and transparency of corporate
governance, support the Group’s continuing growth, andenhance the Group’s corporate value over the medium-tolong term, as of April 2021 the Company has designatedseven (7) independent non-executive directors and three(3) independent audit & supervisory board members.

Expertise and experience of directors,
Audit & Supervisory Board members, andexecutive officers
Kirin Holdings appoints directors, audit & supervisory board
members, and executive officers with abundant
experience, deep insight, and high specialization with theaims of ensuring appropriate and high-level decisionmaking and management of the Group from theperspective of shareholders and achieving continual
growth in corporate value.
We also use the results of the Board of Directors
effectiveness evaluations to identify the areas of knowledge andexperience that are important for deliberation and decisionmaking by the Board of Directors. Considering those areas
along with the diversity represented by its members, we seek
to create an overall balance on the Board and to strengthen
its ability to execute group business and provide management
oversight, including monitoring and strategic review.
Independent Officers Notification
https://www.kirinholdings.com/en/purpose/files/pdf/e_independentofficer.pdf

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Executive Officer Remuneration
PolicyPresident & CEO bonus subject toindividual performance evaluation

The Board of Directors sets executive officer remuneration
amounts each fiscal year based on reviews of theappropriateness of the amounts by the Nomination andRemuneration Advisory Committee, of which the Chair anda majority of members are independent non-executive
directors. The committee considers changes in the businessenvironment and input from shareholders and investors
and, as necessary, seeks objective opinions from external
consulting firms specializing in corporate compensation.

The bonus payment amounts for executive officers other thanthe president & CEO were based on corporate performanceassessment indicators and individual performance evaluations,while the bonus payment amount for the president & CEO wasbased solely on corporate performance assessment indicators.
Beginning in fiscal 2021, the bonus payment amount forthe president & CEO will also include an individual
performance evaluation. This revision was made so the

Basic policy

Targets and evaluation weighting (fiscal 2021)

1. Remuneration shall emphasize the link to business performanceand corporate value in the medium to long term, and shallencourage the sharing of value with shareholders.
2. Remuneration shall be at a level commensurate with the roles
and responsibilities of a director of the Kirin Group.
3. Executive remuneration shall be reviewed by the Nomination
and Remuneration Advisory Committee. To ensure objectivity
and transparency, independent non-executive directors shallaccount for the majority of the committee members.

Performanceindicators
Company
performance
evaluation(consolidated
normalized
operating profit)

Remuneration structure and eligibility• The remuneration structure has three elements: a fixed basic
remuneration and performance-linked payments of a bonus andstock compensation• Independent non-executive directors and corporate auditors
receive only basic remuneration because the role of nonexecutive directors is to provide objective supervision and advice
for management, and the role of corporate auditors is to provide
objective auditing of the directors’ execution of duties.
Remuneration System for Executive Officers
https://www.kirinholdings.com/en/purpose/governance/conpensation/

Individual
performance
evaluation

Representative
Director of theBoard, Senior
Executive Vice
President*

Other
directors
andexecutive
officers

70%

60%

50%

30%

40%

50%

The Nomination andRemuneration Advisory
Committee sets specificevaluation indicators andtargets followinginterviews at the start of
the fiscal year with thepresident & CEO and thechairman and independent
non-executive directors of
the Nomination andRemuneration Advisory
Committee.

The Nomination andRemuneration Advisory
Committee sets specificevaluation indicators andtargets for individual
priority areas anddepartment performancebased on a draft proposal
prepared by the president& CEO following interviewsat the start of the fiscal
year with the directors andexecutive officers.

President & CEO* The procedures are the same for senior executive vice president not concurrently
holding positions as directors.

bonus payment to the president & CEO will reflect the chief
executive officer’s responsibility for deciding the strategies
and initiatives executed to achieve corporate performancetargets. In addition, weighting for responsibility forachieving corporate performance targets will also be applied
to directors and executive officers other than the president.

Executive remuneration discussion by
the Nomination and Remuneration
Advisory Committee
The Nomination and Remuneration Advisory Committee
convened 13 times in fiscal 2020. The committee primarily
addressed the topics presented below, discussions ofwhich included objective and independent advice andinformation from external advisors that attended three ofthe meetings. Discussion content is duly reported for final
decisions by the Board of Directors.
• Regularly scheduled discussions about remuneration levels, theratio of performance-linked remuneration, and the mechanisms
for linking remuneration to performance• The need or not to revise the targets used for performancelinked remuneration in fiscal 2020 and specific revisions• Individual evaluations for performance-linked remuneration in
fiscal 2021

In fiscal 2021, the committee plans to carefully consider
using executive remuneration as a performance incentive
under the next medium-term management plan that will
start the following year. Discussions will focus particularlyon the use of non-financial indicators.

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CONTENTS

Executive Officer Remuneration

Remuneration structure (ratio for the president & CEO)
Fixed remuneration (45%)

Performance-linked remuneration (55%)
Bonus (32%)

Basic remuneration

Stock compensation (23%)

Overview of remuneration system for executive officers
Eligible recipients
PositionBasic
remuneration•Directors (excluding •Non-executive
Type ofindependent
directors
remuneration
non-executive•Audit &directors)
Supervisory•Executive officers
Board members

Fixed remuneration
based on position
and responsibility

Cash

Allocation policy

Evaluation
indicators forfiscal 2021

Calculation formula for fiscal 2021

Annual amountprovided in 12 equalmonthly payments-

Company performance pay rates Individual performance pay rate

Calculation formula for
individual remuneration
Performance-linked
compensation to
motivate efforts
toward achieving
fiscal year
performancetargets and future
growth

Bonus

-

Cash

Remuneration is100% when targets
are achieved andvaries within a rangeof 0 to 200%

•Consolidated
normalized
operatingprofit•Individual
performance
evaluation

Pay rates

Pay rates

200%

200%

150%

Individual remuneration =Standard bonus

×

100%

× A

+

150%

× B

100%
50%

50%
0%

Lower Target Upper
limit
limit

Consolidated
normalized
operating proﬁt

0%

Lower Target Upper
limit
limit

Evaluation
indicators forcommissioned work

* Please see page 60 for explanations of A (percentage linked to company performance) and B (percentage linked toindividual performance).

Stockcompensation

Performance-linked
compensation to
motivate efforts
toward enhancing
corporate value forthe medium andlong term-•Points are provided
in a range of 50 to150% in accordancewith the degree ofprogress toward theperformance targets
for the year
1. ROIC
Stock
following a
2. N ormalized(trust-type
performance
EPS
stock
evaluation period.
3. Non-financial
compensation) •In principle, stocks
evaluation
are awarded inaccordance with thepoints received at a
set period three
years after the startof the performance
evaluation period.

Point allocation = base points × performance-linked coefficient
Calculation formula for performance-linked factors(2) Normalized EPS pay rate(1) ROIC pay rate
Pay rate

Pay rate

150%

150%

100%

100%

× 40%

50%
0%

Lower Target Upper
limit
limit

ROIC

+

Evaluation Pay rate

× 40%

50%
0%

Lower Target Upper
limit
limit

(3) Non-ﬁnancial
evaluation* pay rate

Normalized
EPS

+

SS

150%

S

125%

A

100%

B

75%

C

50%

× 20 %* Non-financial evaluation is a comprehensive assessment of the progress and achievement of CSV commitments and theemployee engagement.

Please refer to the Corporate Governance Report for details about director and Audit & Supervisory Board member compensation in fiscal 2020.
https://www.kirinholdings.co.jp/english/ir/governance/pdf/e_governance_report.pdf

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Risk Management
Approach to risk management
The Kirin Group defines risk as uncertainty with the potential
to seriously impede the accomplishment of business targets
or impact business continuity. The Group’s fundamental risk
management policy is to maintain a robust risk management
structure and to fortify and fully implement risk control andcompliance to mitigate risk, prevent risk from being
actualized, and to keep risk within a manageable level.
Management considers risk management as essential tocontinue earning the trust of customers, employees,
shareholders, and society over the long term.

Kirin Holdings aggregates the risks faced by specificbusinesses on the Group level, investigates common risks
across the Group, and identifies significant risks to the Group.
Kirin Holdings assesses the potential quantitative andqualitative impacts of important risks from the perspective of
overall Group management and classifies the risk in terms ofpriority. The Board of Directors deliberates the assessments
and determines the significant risks for the Group.
Kirin Holdings and the Group companies frame andimplement measures to address the significant risks andmonitor risk status on a quarterly basis. The Kirin Holdings
Board of Directors deliberates the status and reviews
significant risks and provides instruction as necessary tosupport appropriate risk management and control in theexecution of countermeasure strategies. The risk
management system is designed to prevent risk frommanifesting and to minimize any potential negative impact
when a risk situation does occur.

Risk management structure
Audit & Supervisory Board
Auditing

Risk management structure and process fordetermining and monitoring significant risk

Auditing

Board of Directors* Standing audit & supervisory board members
attend the committee as observers.
Instruction

Deliberation and reporting

Group Risk and Compliance Committee

The Board of Directors deliberates and reports on
significant risks. The Group additionally maintains a Group
Risk and Compliance Committee consisting of Kirin Holdings
internal directors and executive officers and chaired by the
Executive Officer in Charge of Risk. The committee
oversees the Group’s risk management activities, includingcollecting risk information, controlling risk, setting risk
policy for the medium-term management plans and foreach fiscal year, preparing important items for compliance,
introducing risk reduction measures, communicating
information and implementing countermeasures when riskarises, and providing necessary instructions and support toGroup companies.

Internal Audit Department

Observation

Chairperson
Executive Oﬃcer in charge of Risk Management
Secretariat
Corporate Strategy Department
Committee members

Support and instruction

Internal auditing

Operating companies
Constituent companies

Reporting and consultation

Group companies

Group service companies
Constituent companies* Each operating company has a Risk Management & Compliance Committee or a Risk Management Manager.

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Risk Management

Kirin Group significant risk
• Key matters presenting risk to Kirin Group strategies, businesses, and other activities, which could significantly impact
investor assessment of the Group.
• Matters determined to present potential risk in the future based on the judgment of the Company as of December 31, 2020.
• Risks associated with the political developments in Myanmar in February 2021 are based on information as of March 15,2021. Updated information related to the Company will be presented in a timely manner on the corporate website.

WE B Consolidated Financial Statements
https://pdf.irpocket.com/C2503/HRxf/Drzj/zShS.pdf

Significant risk in each business domain
Risk content and main potential impacts

Main countermeasures, pages in this report with information,and risk situational awarenessBusiness area

Main risk

Food & Beverages• Risk arising from the Company’s responses
to business environment changes, such as
in demographics, markets, competition,
preferences, and revisions to laws andregulations•P otential for a shortfall to sales targets due to changes in the market environment, fluctuations in productprices, or actions of competitor companies•P otential for business development to not advance as anticipatedPages 68–70 (Business Progress)

Business in
Myanmar• Risk that major economical and societal
changes caused by the political situation in
Myanmar will impact the Group’sbusinesses• Potential for a business suspension, business reduction, or other disruption to normal business activities dueto the political, economic, and social situation in Myanmar• Potential impact on Group business while the joint venture with a local company is under review• Maintain business operations and continuity in accordance with thelocal conditions• Act and respond in accordance with our business norms and humanrights policies• Provide timely and appropriate information

Pharmaceuticals•R isk associated with maximizing the valueof global strategic products•R isk related to product quality and stablesupply•R isk related to government measures toreduce medical costs• Potential for products to not become fully established in a new market because price differential between theplanned and actual prices in a country may cause sales to fall significantly below expectations, because expansionof the business domain may be slowed by delays in launch preparation or other factors, or due to difficulty
connecting with potential patients• Potential for product recalls due to safety or quality concerns, or for difficulty maintaining stable supply due
to a sharp increase in demand or a tight supply and demand balance• Potential for product prices to be reduced due to pressure to lower medical costs in Japan and overseas and to an
ongoing shift to generic drugs

Pages 44–45 (CSV Stories CASE 1: Health and Well-being)
Page 71 (Business Progress)
Kyowa Kirin Annual Report, pages 48–49 and pages 67–69

Health Science• Risk of not being able to provide
differentiated products and services
related to social issues• Risk of inability to increase added value
due to insufficient organizational capability
in new fields• Risk of issues related to product quality
assurance, safety, or missing products• Potential that the sales plan will not be achieved due to inability to formulate an effective business model for
expanding business in the priority area, or due to strategies not compatible with the consumer mindset• Potential inability to construct a high-profit business model for creating new value due to delays establishingan organizational structure for the Health Science business, delays developing, acquiring, and training humanresources for business management, or inability to establish cooperation and synergies within the Group• Potential of product shortages if production does not proceed according to the production plan
• Potential that Foods with Function Claims (FFCs) have adverse health effects or quality issues, lack sufficientevidence, or cause adverse reactions; or the potential of inaccurate information

Pages 24–29 (Special Feature 1: Health Science Strategy)
Pages 69, 71–72 (Business Progress)

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Risk Management

Significant risk in each business domain
Item

Main countermeasures, pages in this report with information,and risk situational awareness

Main risk

Risk content and main potential impacts

COVID-19• Risk of the COVID-19 pandemic will
constrain business activity• Risk of employees contracting the virus
and the virus spreading among
employees• Potential that business activities could be restrained by a rising number of infections andgovernments enforcing stronger regulations, such as state of emergency conditions• Potential that, despite adequate prevention measures, infections among employees
increase, preventing employees from coming to work and creating an insufficient
workforce to carry out business activities

Securing andtraining of humanresources• Risk of inability to adequately secure and • Potential of diminished competitiveness due to inability to increase organizational
capability
train human resources to advance Groupmanagement and with the expertisenecessary for business activities

Information
technology• Risk of an adverse impact onmanagement from delays introducing
standardized information systems (ERP)or from inability to fully reap the
expected benefits of digitaltransformation

Product safety• Risk of unexpected quality issues beyond • Potential high costs or constricted business activity due to product discontinuation,
the scope of quality assurance measuresrecall, or compensation claims

Human rights• Risk of human rights issues associatedwith the Group, its partners, or its
procurement operations• Risk of human rights issues in Myanmar• Potential substantial impact on business activities in the country or globally• Potential misunderstanding of the Group’s business activities with local joint ventures• Measures to ensure human rights based on the Kirin Group Human Rights Policy- Identify, prevent, and mitigate human rights violations related to the Group’s business activities- Request suppliers to comply with the Kirin Group Human Rights Policy

Environmental
issues• Risk of environmental problems caused
by PET bottles and other plastic
containers, and risk of climate change
caused by greenhouse gas emissions• Potential impact on corporate brand value from failure to respond to social concerns
and rising expectations of companies• Potential for increased costs from responding to environmental issues and frominability to secure the necessary renewable energy• Implement measure to achieve the environmental objectives in The Kirin Group Environmental Vision
2050 long-term strategy
Pages 46–47 (CSV Stories CASE 2: The Environment)

Alcoholconsumptionrelated issues• Risk of future restrictions worldwide on
alcohol sales• Potential decline in alcohol consumption, potential decrease in corporate brand value• Self-regulate advertising and promotional activities and measures to eliminate harmful consumptionof alcohol• Risk of large-scale natural disasters andDisasters,
accidents, such as earthquakes,
accidents, andunseasonable weather, cold summers,
supply chain events
droughts, typhoons, torrential rains,forest fires, and infectious diseases• Risk of supply chain disruptions• Potential need to close business sites or reduce or suspend business activities• Potential distribution delays or shortages due to procurement, production, andlogistics capabilities unable to meet demand during a sharp rise in sales volume during
peak sales periods• Potential suspension or delay of deliveries due to damaged transportation networks
caused by a natural disaster• Prepare business continuity plans for all types of hazards
Page 65 (Risk Management: BCP for all types of hazards)• Improve supply and demand forecast accuracy for all businesses and increase logistics capacity

Information
security• Risk of a cyber attack, information
security incident, or information leak• Potential to lose customer trust and incur claims for damage compensation due to aleak of personal information or important trade secrets•P otential suspension of business or extended recovery time required after a cyber attack• Construct a robust security response system and implement human, physical, and technical measures• Gather extensive information on all types of cyber threats
Information Security ReportCompliance• Risk of behavior by employees, such as
alcohol-related issues or bribery, that isillegal or counter to social mores• Potential of legal punishment, litigation, social sanctions, and loss of customer trust• Risk management measures and employee awareness training in accordance with the annual
programs• Set up internal whistleblower systems• Conduct employee compliance awareness surveys to identify potential risks and reduce risk in theearly stages

Finances and taxes• Fund procurement risk, foreignexchange risk, tax risk

• Potential increase in funding costs, fluctuation in yen conversion value due to exchange • Conduct appropriate financing and management in accordance with the Kirin Group Treasury Policy
rates, and additional tax burden•C omply with the tax laws of each country and apply appropriate tax accounting in accordance with
the Kirin Group Tax Policy• Potential hindrances to reforming and upgrading the management base or to
improving operational efficiency to raise productivity

Pages 8–9 (COVID-19 Impact Analysis and Response)•R eform the organizational culture for business execution and innovation, create a human resourcesmanagement system, promote diversity
Pages 30–33 (Special Feature 2: Human Resource Strategy)• Invest in management resources to prevent delays and monitor the information system development
progress
Pages 34–37 (Special Feature 3: Digital Transformation Strategy)•S et up, operate, and audit the effectiveness of a quality assurance system•F oster an organizational culture that values quality in all departments in addition to the
manufacturing division

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Risk Management

BCP for all types of hazards
The Kirin Group provides a large number of products andservices that are directly connected to lifelines, and theGroup recognizes that maintaining its business continuity
during a crisis, such as a natural disaster or pandemic, is
important to minimizing the impact on the Group’s
customer and society. The Group formulated specificbusiness continuity plans (BCPs) after the influenza
pandemic in 2009 and the Great East Japan Earthquake in2011. The BCPs are designed to maintain the productsupply chain by reducing the potential impact of various
risk, such as by establishing a wide-ranging network ofsuppliers of its main raw materials and other inputs as well
as fortifying the Group logistics functions.
The Group also recognizes the need to continue
constructing systems and improving its organizational
capabilities owing to the increasing frequency of crisis
events around the world in recent years, including
earthquakes, typhoons, torrential rains and floods, forest
fires, and the COVID-19 pandemic. Management believes
BCP scenarios did not sufficiently cover the situations thathave occurred during recent natural disasters, and thisresulted in supply chain disruptions that delayed theprovision of products and services. The BCP for a pandemic
was also found to be inadequate for certain situations

during the current COVID-19 pandemic.
At the same time, employee work conditions inside theGroup have changed significantly under KIRIN Work Style
3.0 “Job Satisfaction” reform program and steps to enable
employees to work remotely.
The Group has initiated a complete review to update
and improve the BCP effectiveness. BCPs were previously
formulated for specific crisis situations, such as a pandemicor earthquake. We are now creating an “All-hazard BCP”
with countermeasures focused on a loss of management
resources, such as reduced workforce, damaged facilities,
or suspended head office functions, in a crisis situation.
This approach will make the BCP more versatile when put
into effect.
In addition, we are improving the initial response
system to ensure and confirm employee safety, andsystematically stockpiling items needed in a crisis situation.
To improve BCP effectiveness when it is activated, we will
regularly conduct training and practice drills for various
situations, and revise the BCP to accommodate new issues.
These measures will give the Group a better ability torespond effectively to a broader range of situations.

Group global whistleblowing system
direct to head office
In 2018, the Group adopted the Kirin Group Human Rights
Policy, which complies with the United Nations Guiding
Principles on Business and Human Rights. This policy
requires the Group to maintain a whistleblower system(which the Group calls a “hotline”) and improve its
functionality for identifying, addressing, and taking action
to correct violations of human rights.
All Group companies in Japan are provided two types
of hotlines: an internal hotline connecting to trained
employees at a reception desk, and an external hotline toan outsourced professional consultant office to provide
additional sense of privacy when discussing issues.
Group subsidiaries overseas each maintain their own
in-house reporting systems. Kirin Holdings has also set up
systems enabling employees at some overseas companies
to report directly to the Company in their local language.
This system will be systematically introduced to all Group
companies, beginning in North America and Asia in 2021.
Kirin Holdings will continue expanding its internalreporting systems to quickly identify and prevent
fraudulent activity and reduce the risk of damage to thecorporate brand as part of its efforts to continue earning
the trust of society.

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Kirin’s Value Creation Model

Kirin Group Corporate Philosophy
KIRIN brings joy to society by crafting food and healthcare products inspired by the blessings of nature and the insights of our customers

Contents

INPUT

BUSINESSOUTPUTOUTCOME

Foundations fordriving innovations

The Kirin Group is activating
business synergies to approachsocial issues as opportunities forbusiness growth

The Group is leveraging its foundation
for driving innovation that enable its
businesses to help society around theworld settle the issues

The Kirin Group gives value back tothe society it serves

67	Fiscal 2020 Segment and Business
Overview
68	Japan Beer and Spirits

Consumer centric
marketingexpertise69	Japan Non-alcoholic Beverages

Financial key
performanceindicators

Business domains

ROIC

70	Oceania Integrated Beverages

Providing products
and services tobuild bonds
between people

71	Pharmaceuticals
72	OtherCore
technologythat assuresvalue
creation

Diversity andinclusion,
culture forinnovation

31,151employees(consolidated)

64.5billion yen

Food &
Beverages(alcoholic andnon-alcoholic
beverages)

HealthScience

Providing products
and services toimprove people’squality of life

Pharmaceuticals

in R&D expenses

ICT accelerating
value creation

18.6billion yen
in ICT expenses

Economic value
Maximized cash ﬂows

CAGR ofnormalized EPS

Non-ﬁnancial key
performanceindicators
CSV Commitment

Continuallydeveloping
innovative
new drugs

Social value
CSV Purpose

Corporate
brand value

Health andWell-being

The Environment

Community
Engagement

13.7billion yen
in ICT investment

Employeeengagement score

Kirin Group corporate governance

A Responsible
Alcohol Producer

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Fiscal 2020 Segment and Business Overview

Japan Beerand Spirits

Japan Non-alcoholic
Beverages

Oceania Integrated
Beverages

Pharmaceuticals

Other

Core operating companies

Core operating companies

Core operating companies

Core operating companies

Core operating companies• Kirin Brewery• Kirin Beverage• Lion• Kyowa Kirin• Mercian• Myanmar Brewery• Coca-Cola Beverages Northeast• Kyowa Hakko Bio

Food & Beverages

Food & Beverages

Food & Beverages

Food & Beverages

Food & Beverages

Pharmaceuticals

Pharmaceuticals

Pharmaceuticals

Pharmaceuticals

Pharmaceuticals

Health Science

Health Science

Health Science

Health Science

Health Science

Revenue (Billions of yen)

Revenue (Billions of yen)

Revenue (Billions of yen)

Revenue (Billions of yen)

Revenue (Billions of yen)681.9 651.4

286.8

299.7 292.1

304.9 317.8

368.0

Other andelimination

252.2

Lion (Dairy &Drinks)Kirin Beverage

Kirin Brewery
2019

2020

2019

2020

Elimination

2019

2020

Elimination

Normalized operating proﬁt

Normalized operating proﬁt

85.2

26.4

41.4

75.5

(Billions of yen)(Billions of yen)

22.1
Kirin Brewery

2019

2020

Kirin Beverage

2019

2020

2019

2019

2020

2020

(Billions of yen)

59.0

Lion (Dairy &Drinks)Lion (Beer,
Spirits & Wine)
Corporate

Elimination

Normalized operating proﬁt
55.4

21.8

Other

Kyowa Kirin

Other andelimination
Coca-Cola
Beverages
Northeast
Myanmar Brewery
Mercian
Kyowa Hakko Bio

Lion (Beer,
Spirits & Wine)

Normalized operating proﬁt(Billions of yen)

336.0

2019

2020

Normalized operating proﬁt(Billions of yen)

27.0

29.3

Other
Coca-Cola
Beverages
Northeast

Kyowa Kirin

Myanmar Brewery
Mercian

2019

2020

2019

2020

Kyowa Hakko Bio

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Japan Beer and Spirits

Market environment
The market for alcoholic beverages is graduallycontracting in Japan owing primarily to the nation’s
declining population. In addition, the government
began revising the liquor tax in 2020 and willcontinue introducing incremental revisions through2026. We expect the revisions to increase the ratio ofbeer sales and affect overall the product composition
ratio, although the growing consumer preference forlower-priced products will likely result in no
significant ratio change until 2026 when the tax rate
will be consistent across all categories of alcoholic
beverages. We also expect the ratio of RTD category
products to continue growing.
Sales volume through on-premise channels fell
sharply in 2020 during the COVID-19 pandemic. At
the same time, the trends of increasing healthconsciousness and consumers desiring higher-quality
products for home consumption are boosting
demand for high value-added products.

Kirin Brewery is advancing three initiatives toachieve a normalized operating profit margin
Strategies
of 25% of sales revenue, excluding liquor tax,
in 2027. The first initiative is to build a robust
brand portfolio. We are applying customer-oriented
marketing and full-company brand development fromproduction through sales to continue strengthening the
KIRIN ICHIBAN, Honkirin, and Hyoketsu brands. The second
initiative is to establish new drivers for business growth. In
2021, we will increase investment to develop craft beers andthe Kirin Home Tap beer dispenser. Craft beer offerings havebeen developed with a primary focus on on-premisechannels, and we plan to increase our offerings for private,in-home consumers. Kirin Home Tap is a rental keg service

that comes with a subscription for regular delivery of oneliter kegs of high-quality beer directly to customer homes.
These and other offerings are designed to boost profitability
in the shrinking market by increasing the composition ratioof high value-added products and services. The third
initiative is to transform the company’s profit structure. A
key aim of the restructuring will be to improve theprofitability of the RTD category, which has become a main
focus for management. We plan to accelerate efforts tointroduce high value-added products, review raw material
costs, and optimize the logistics cost structure. We will alsoseek to improve ROI on selling expenses such as by increasing
cost variability in the on-premise channel and improving sales
promotion efficiency in the mass retail channel.

Overview of strategy toward achieving sustainable growth

Achieve normalized OP margin of

25.0%* by ﬁscal 2027 (ﬁscal 2019: 21.4%)* using revenue excluding liquor tax

Strategy pillar 1

Strategy pillar 2

Strategy pillar 3

Build a robust
brand portfolio

Establish new
growth drivers

Transform the
proﬁt structure

Increase the share ofcore brands

Improve the MIX by
high value-added brands

Improve ROI and
raw material costs

Create a strong organization that will achieve the strategy

Human resources, organization structure, business process transformation

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Japan Non-alcoholic Beverages

Market environment
The Japan non-alcoholic beverage market contracted
by a substantial 7% year on year in 2020 during the
COVID-19 pandemic. Kirin Beverage expects themarket to grow 2% year on year in 2021 but continue
the long-term trend of gradual contraction caused by
the country’s declining population.
Amid this overall trend, Kirin Beverage expects
the aging population and the heightened healthconsciousness fueled by the pandemic to support
ongoing growth for products in the sugar-freecategory, which account for 66% of the market, andfor health beverages (Foods for Specified Health
Uses, Foods with Function Claims (FFCs)), which havebeen growing by about 10% annually. The rapidlychanging business environment includes a sharp
decline in sales volume in the vending machine
channel as people refrain from going out and workfrom-home becomes more common.
Source: Food Marketing Institute

Kirin Beverage is responding to the rapid
market changes with CSV-based growth
Strategies
strategy and corporate structural reform. The
CSV-based growth strategy focuses on two of
the company’s core areas, which it defines as sugar-freeand low-sugar products and products with positive healtheffects. While continuing to highlight its core Gogo-noKocha and Nama-cha brands, Kirin Beverage is repositioning
itself as a beverage company in health science strategy byfocusing on developing its iMUSE brand of Lactococcus
lactis strain Plasma products which were registered as
foods with functional claims with Japan’s Consumer Affairs
Agency in August 2020.
Kirin Beverage is implementing corporate structuralreform to reconfigure its channel portfolio and step up its

CSV-based growth strategy
Sugar-free/low-sugar products

Products with positive health eﬀects
Expansionof majorbrandsenvironmental strategy. Reconfiguring the channel
portfolio will entail reorganizing the distribution ofmanagement resources across the sales channels andrevising the vending machine business structure in line with
its shrinking ratio of sales. The environmental strategy
includes a joint project with Mitsubishi Chemical to advancechemical recycling of PET plastics to address environmental
issues related to plastic and meet societal needs forresource recycling.
The company has set the environment as one of its
core CSV areas and plans to feature Nama-cha as its
flagship brand for which it will boost the brand value by
designing packaging with minimized or no labels and using
R100 PET bottles.

Corporate structural reform
COVID-19 accelerated changes
in the operating environment

Addressing the environment
as a universal challenge

Refraining from going out,
increasing work-from-home

Increasing awarenessof ESG

Changes in consumer
touchpoints

Ethical consumption anddemand for recycling systems

Corporate Structural Reform
Restructuring the channel portfolio

Environmental strategy• Review the allocation of management resources• Structural reform of the vending
machine business• Build a sustainable packaging recycling
circulation system• Enhance the value of the core brands

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Oceania Integrated Beverages

Market environment
In 2020 the Australian and New Zealand beermarkets were impacted by the spread of the
COVID-19, mainly in the on-premise channel due tothe temporary closure of pubs and hospitality
venues. However, there was some recovery towards
the end of the year as the number of new cases
decreased and some restrictions were eased. As
some social distancing measures such as restrictions
on the number of people allowed into hospitality
venues will continue to be required, a certain levelof impact will remain, but it is expected to be lesssevere than in other countries.
In terms of categories, there is growing interestin craft beer, as well as lighter beers, such as
contemporary. Other than beer products, Hard
Seltzer, which is growing rapidly in the U.S., isgradually expanding in the Australian and New
Zealand markets.

Lion will champion sociability and help
people live well by having the best and most
Strategies
loved crafted adult beverage brands in ourtarget markets. Our business strategy isfocused on accelerating growth and productivity while
always keeping the consumer and customer at the heart ofeverything we do.
Specifically, in addition to investing in core categories
such as craft beer and Hard Seltzer, we aim to grow bycreating new value. We will also work with Kirin Brewery tostrengthen our marketing capabilities. On top of this, theaddition of craft beer maker New Belgium Brewing, of theUnited States, to the Group in January 2020 will enable us

to establish a strong competitive position in the global
craft beer market.
In terms of functional efficiency, Lion fully introduced
a new enterprise resource planning (ERP) system in 2020
and this will improve operating efficiency by consolidatinginternal processes and enabling faster decision-making by
accelerating data analysis. It will also enable us to achieve
growth across the organization by fostering costcompetitiveness at a global level.
By doing so, Lion will continue implementing measures
to advance the Medium-Term Business Plan 2019 strategies
to maintain high profitability and expand the foundation
for new growth.

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Pharmaceuticals

Market environment
The worldwide COVID-19 pandemic had a major
impact on the business environment, and therestricted business activities along with the refrained
personal visits to medical institutions affected thepharmaceuticals market. Conditions in the Japanesepharmaceuticals market also remained harsh. Amid
the overall trends of a declining birthrate and aging
society, the government is seeking to preserve thepublic health insurance system by reducing medical
expenses, promoting the use of generic drugs, andannually reviewing official drug prices.
At the same time, awareness of unmet medical
needs, including the urgent need for infectious
disease control, continues to drive efforts worldwide
to develop groundbreaking new medicines. The
environment makes it essential for R&D-driven
pharmaceuticals companies to respond swiftly to thechanging conditions, including broadening its
business reach to the global arena.

Kyowa Kirin’s five-year medium-term
management plan started in 2016 is aimed at
Strategies
transforming it into a global specialty
pharmaceuticals company by maximizing thevalue of its three global strategic products, strengthening
its global governance, and pursuing R&D for growth in
the future.
Although the COVID-19 pandemic affected its
performance in 2020, the company made steady progresswith its three global strategic products. Crysvita wasapproved for additional indications in the United States foruse in tumor-induced osteomalacia and in Europe for use inolder adolescents and adults with the disease X-linked
hypophosphataemia. Poteligeo debuted in Europe with thesales launch in June in Germany. And an application of
approval for use of KW-6002 (marketed in Japan as

Nouriast, and in the U.S. as Nourianz) as an adjunctive
therapy for Parkinson’s disease was accepted in Europe.
Management is readying a new five-year medium-term
management plan to begin in 2021 that will further
strengthen Kyowa Kirin’s foundation as a global specialty
pharmaceuticals company originating in Japan and set thecompany on course for further growth. The company willcontinue delivering global strategic products to the world
and advancing research and development of new drugs tomeet unmet medical needs and respond to new medical
needs centered on the patient.
The Kyowa Kirin Group is pursuing advances in life
science and technology, earning the trust of society bycreating new value, and promoting CSV management that
contributes to the health and well-being of people aroundthe world.

FY2021–2025 MTBP overview
CSV management= Contribute to Health and Well-Being

Our Philosophy• Maximize the value of global products• Establish a framework for stable global supply• Build a drug pipeline to drive growth beyond 2025
• Launch services beyond pharmaceuticals• Foster a corporate culture suited to global business development

Our New Vision• Address patient-centric
healthcare needs

To be in 2025

Contribute to the SDGs
• ROE
• Revenue growth ratio• R&D expense ratio

10% or higher
CAGR 10% or higher
Targeting 18–20% to support
active investment• Core operating proﬁt ratio 25% or higher by FY2025• Dividend payout ratio
Sustained dividend hikes with 40%(based on core EPS)

Strategy• Provide pharmaceuticals
for unmet medical needs• Retain the trustof society• Reinforce human resources andstructures that support thecreation of life-changing value

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Other
Mercian
The impact of the COVID-19 pandemic was mainly felt inthe on-premise market in 2020, and the domestic wine
market contracted by 10% year on year. Mercian expects
demand for wine products for consumption in the home tocontinue relatively strong.
In these market conditions, Mercian is aiming tostrengthen the brand power of its Château Mercian, OishiiSankaboushizai-Mutenka Wine, Frontera, and other core
brands and generate demand by developing its casualsparkling wines*1 and organic wines*2.
*1 Sparkling wine that is easy to drink, easy to buy, easy to use, and can be enjoyed casuallyin a variety of settings.
*2 Organic wine meeting the standards of the International Federation of Organic
Agriculture Movements (IFOAM)

Myanmar Brewery
The market for beer in Myanmar was affected by the
COVID-19 pandemic in 2020, but management expects thebeer market in the country to return to its longer-term
growth trend after the pandemic subsides.
Myanmar Brewery will continue applying the four
elements of CSV, marketing, management, and digitaltransformation to capture the growing demand for
products for in-home consumption.
The drastic change in the political situation in Myanmarthat occurred in February 2021 is fundamentally contrary
to the company’s business principles and human rights
policy. The company has determined that the joint venture
alliance with Myanma Economic Holdings Public Company
Limited (MEHPCL), a welfare fund management company

that has a business relationship with the country’s military,must be dissolved, and management is taking steps tosever relations.

Kyowa Hakko Bio

In 2020, Kirin Holdings dispatched experienced experts to
the Hofu Plant of Kyowa Hakko Bio’s Yamaguchi Production
Center, where a quality control issue was identified inAugust 2019. Based on their recommendations, Kyowa
Coca-Cola Beverages Northeast
Hakko Bio implemented an improvement plan that includes
Coca-Cola Beverages Northeast raised its normalized
strengthening the quality control system, reorganizing theoperating profit margin to 7.2% in 2020, achieving the 6%
production structure, and creating closer ties between thetarget for 2022 ahead of schedule. The company is facing acenter and the corporate head office. The company isharsh business environment of shrinking sales volume,
steadily ramping up production volume and expects toparticularly in the on-premise segment. Nevertheless, it willachieve positive normalized operating profit in 2021.
continue seeking to raise its unit prices and maintain
Kyowa Hakko Bio is converting into a high-profit
efficient cost levels to further improve profitability in theoperation by shifting its focus to high-margin materials,
medium and long term.
such as Citicoline and Human Milk Oligosaccharides (HMO).
The company is aiming to be a global
specialty fermentation company
originating in Japan that uses cuttingFiscal 2021 Group company earnings forecasts (Billions of yen)edge biochemical technology to solve
global social issues. Management has set
2020 Normalized OP
162.1
a target to raise normalized operating
Kirin Brewery+1.8
profit to 9.5 billion yen by fiscal 2024.
Kirin Beverage
+1.2
+8.5

Lion*3
Kyowa Kirin+5.0

Mercian-0.4+2.1

Myanmar BreweryCoca-Cola Beverages
Northeast
Kyowa Hakko Bio

-0.2
+2.4
+1.5

Others*4
Corporate and eliminations
2021 Normalized OP
Forecast

-4.0
180.0

*3Due to the sale of Lion Dairy and Drinks business, thedescriptions of “Beer, Spirits, and Wine”, “Dairy andDrinks” and “Corporate” of Lion have been omitted from2021.
*4Others includes “Other” in the Japan beer & spirits segment.

KIRIN CSV REPORT 2021

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Financial Data/
Company Information
Contents

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CSV Stories

GovernanceBusiness Progress

Financial Data/
Company Information

CONTENTS

73

Kirin’s Value Creation Model

Kirin Group Corporate Philosophy
KIRIN brings joy to society by crafting food and healthcare products inspired by the blessings of nature and the insights of our customers

INPUT

BUSINESSOUTPUTOUTCOME

Foundations fordriving innovations

The Kirin Group is activating
business synergies to approachsocial issues as opportunities forbusiness growth

The Group is leveraging its foundation
for driving innovation that enable its
businesses to help society around theworld settle the issues

The Kirin Group gives value back tothe society it serves

74	Management Analysis of Financial
Position, Operating Results,
and Cash Flows

Consumer centric
marketingexpertise81 10-Year Summary of Key Financial Data

Financial key
performanceindicators

Business domains

ROIC

82	Investor Information/
Company Information
83 Third-Party EvaluationsCore
technologythat assuresvalue
creation

Diversity andinclusion,
culture forinnovation

31,151employees(consolidated)

64.5billion yen

Providing products
and services tobuild bonds
between people

Food &
Beverages(alcoholic andnon-alcoholic
beverages)

HealthScience

Providing products
and services toimprove people’squality of life

Pharmaceuticals

in R&D expenses

ICT accelerating
value creation

18.6billion yen
in ICT expenses

Economic value
Maximized cash ﬂows

CSV Purpose

CAGR ofnormalized EPS

Non-ﬁnancial key
performanceindicators
CSV Commitment

Continuallydeveloping
innovative
new drugs

Social value

Corporate
brand value

Health andWell-being

The Environment

Community
Engagement

13.7billion yen
in ICT investment

Employeeengagement score

Kirin Group corporate governance

A Responsible
Alcohol Producer

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Management Analysis of Financial Position, Operating Results, and Cash Flows
1. Operating Results

Overall business conditions
Fiscal 2020 was a very important year for the Kirin Group as
we pursued our KV2027 long-term management vision tobe global leader in creating shared value (CSV).
The world faced a vastly increased sense of uncertainty
during the year as the COVID-19 pandemic spread aroundthe world. In those conditions, we focused on maintaining
steady operations and developing synergies in the threecore business domains of Food & Beverages,
Pharmaceuticals, and Health Science that are rooted in our
expertise in fermentation and biotechnology. These efforts
enabled our business portfolio to demonstrate its ability torespond to the burgeoning trend in health awareness, which
helped offset the impact from the pandemic on our businessperformance, and also confirmed the strength of our GroupCSV management linking our business growth to addressing
social issues. We also increased the diversity in ourgovernance, engaged in active dialogue with stakeholders,and bolstered our global management structure.
The COVID-19 pandemic constrained consumer
behavior worldwide and profoundly impacted social andeconomic activity. Reduced restaurant demand, postponedand cancelled events, and restrictions on going out allstrongly impacted our businesses. In the circumstances, we
implemented exhaustive measures to prevent the spreadof the virus and ensure the health and safety of ouremployees, customers, and business partners while placing
the highest priority on fulfilling our social responsibility tocontinue providing products, medicines, and services.
Despite the severe business conditions, in the Food &Beverage domain, Kirin Brewery’s Japan Beer and Spirits
Business greatly improved the company’s position in thebeer industry by outperforming the market for the third
straight year. In the Pharmaceuticals domain, Kyowa Kirin
recorded numerous successes and notably increased salesof its three global strategic products in several regions.
All of our companies made every effort to adapt to themajor changes in customer values and the businessenvironment while also implementing structural reform on
the themes of transformation, acceleration, reduction, andcancellation to position their operations for ongoing value
creation in the future. One major area of transformation
and acceleration was the Health Science domain, which weare developing to be one of our foundations for growth in
the future. We intensified activities to develop its products
and brands, to facilitate digital communication inside andoutside the Company, and to advance initiatives to address
the growing environmental issues around the world.
In the Health Science domain in 2020, we sought togenerate synergies with the Kirin Group’s new member
FANCL and advanced R&D and product development in thepriority areas of immunology, brain function, and gut
microbiome. The Company’s iMUSE brand of soft drinks andsupplements using Kirin’s proprietary Lactococcus lactis
strain Plasma were authorized in August as Foods with
Function Claims (FFCs) for immune function, the first
products of its kind in Japan. Demand for the plasma foruse in other products is growing, and authorization of foodfunction claims has since been received for yogurt products
made by KOIWAI DAIRY PRODUCTS and supplements madeby FANCL. This marked a substantial step forward for ourpriority CSV area of “Health and Well-being.”
We also significantly boosted employee engagement,
which is a key management indicator in the Kirin Group
Medium-Term Business Plan 2019–2021 (2019 MTBP). Efforts
to increase employee engagement included special efforts toincrease employee awareness and understanding of CSV
management and launching the “Job Satisfaction Reform”
initiative entitled KIRIN Work Style 3.0 in July to overhaul ourwork practices and enable work from various locations.
The environment is another of our priority CSV areas
where we implemented several important measures. Our
initiatives to counter climate change and protect biologicalresources received the prestigious Environmental Value
Award at the Second Nikkei SDGs Management Grand Prix.
In addition, we overhauled the governance structure,including increasing appointments of women and nonJapanese directors and establishing independent nonexecutive directors as the majority percentage. Our steps
to bring in a wider diversity of external human resourcesand our CSV management were recognized by the Japan
Association of Corporate Directors, which named Kirin
Holdings as the Grand Prize Company for Corporate
Governance of the Year 2020.

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Management Analysis of Financial Position, Operating Results, and Cash Flows(Billions of yen)
FY2020Consolidated revenue

FY2019

Increase(decrease)% Increase(decrease)

1,849.5

1,941.3(91.8)(4.7%)

Consolidated normalized operating profit

162.1

190.8

(28.6)(15.0%)

Consolidated operating profit

102.9

87.7

15.2

17.3%

Consolidated profit before tax

124.6

116.8

7.7

6.6%

Consolidated profit attributable to owners of theCompany

71.9

59.6

12.3

20.6%

(22 yen)(13.9%)(Key performance indicators)
ROIC
Normalized EPS

6.0%

5.2%

136 yen

158 yenKPI Targets* in 2019 MTBPThe Kirin Group’s core businesses were all deeply impacted
by the business environment during the COVID-19
pandemic. Due to the severe business conditions, thePerformance Indicators
ROIC
Normalized EPS

financial targets of the 2019 MTBP to attain 5% annual
average growth in normalized earnings per share (EPS) and
10% ROIC in fiscal 2021 have been revised as follows.

FY2021 Targets
7.6%
147 yen* The attainment assessments for the financial targets are intended to provide a performance evaluation that factors out the impacts from currency fluctuations when converting financial
statement items from overseas subsidiaries for the year. Normalized operating profit and ROA are KPI for all businesses.

Revenue declined in fiscal 2020 as the COVID-19 pandemic
deeply impacted the performances of many of ourbusinesses. Normalized operating profit also declined, but
the decreases were minimalized by cutting costs andlowering risk in all businesses. Profit attributable to ownersof the Company increased owing to the improvement fromthe previous year when an impairment loss was bookedfrom the sale of the Oceania Integrated Beverages
Business. This more than offset the decline in normalized
operating profit and a reduction in equity-method
investments due to the pandemic impact on major affiliate
San Miguel Brewery.
We expect the pandemic impact on our businesses in
the Food & Beverages domain coupled with our planned
upfront investment to establish a global sales structure
and business infrastructure in the Pharmaceuticals domain
to result in normalized EPS and ROIC falling short of theinitial 2019 MTBP targets.
The business environment changed markedly during
the COVID-19 pandemic. While this presented significant
challenges, we also took it as an opportunity to revise ourbusiness model and profit structure to position ourbusinesses for future growth. We also improved our capitalefficiency by restructuring low-profit businesses andreducing strategically held shares. We will continue to takesteps to enhance our corporate value and fulfill theobjectives of our long-term management vision KV2027.
We are accelerating the 2019 MTBP strategies, drasticallyreforming our cost structure, and allocating resources
geared to our near-, medium-, and long-term goals.

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Management Analysis of Financial Position, Operating Results, and Cash Flows

Performance by reportable segments• Japan Beer and Spirits BusinessResults by segment are as follows.

As the COVID-19 pandemic caused a sharp decline indemand from restaurant industry, Kirin Brewery
concentrated investment on marketing its leading brands
and produced measurable success strengthening its brand.
Overall sales volume declined in the beer category from thereduced restaurant demand, but the liquor tax reduction in
October helped the company post year-on-year sales volume
growth for the flagship KIRIN ICHIBAN brand product onstrong demand for the flagship KIRIN ICHIBAN in cans andthe new offering KIRIN ICHIBAN ZERO. Sales volume in the
new genre category reached a new high as in-homeconsumption demand pushed sales volume of the Honkirinbrand up 30% from the previous year and sales were strong
for Kirin Nodogoshi Nama. Despite sales volume in the beer
category declining 4.5% year on year, Kirin Brewery
expanded its presence in the beer industry with sales
outpacing the overall market for a third straight year.
Kirin Brewery also posted 10% year-on-year growth insales volume in the ready-to-drink (RTD) category, which
focuses on products for in-home consumption. Sales volume
was strong for the flagship brand Kirin Hyoketsu, whichamounted to 15 billion cans (converted at 250ml per unit), as
well as for Kirin Tokusei Sour and Kirin Honshibori ™ Chuhai.
While sales volume grew in the canned beer, RTD, andnon-alcoholic beverage categories in the household
channel, beer product sales volume declined markedly inthe on-premise channel. Japan Beer and Spirits Businessoverall revenue decreased 4.5% year on year to 651.4
billion yen. At the same time, marginal profit narrowed(Billions of yen)
FY2020Consolidated revenue

Increase(decrease)

FY2019% Increase(decrease)

1,849.5

1,941.3(91.8)(4.7%)

Japan Beer and Spirits

651.4

681.9

(30.5)(4.5%)

Japan Non-alcoholic Beverages

252.2

286.8

(34.6)(12.1%)

Oceania Integrated Beverages

292.1

299.7

(7.6)

(2.5%)

Pharmaceuticals

317.8

304.9

12.9

4.2%

Other

336.0

368.0

(32.0)(8.7%)

162.1

190.8

(28.6)(15.0%)

Japan Beer and Spirits

75.5

85.2

(9.7)

(11.4%)

Japan Non-alcoholic Beverages

21.8

26.4

(4.6)

(17.4%)

Oceania Integrated Beverages

22.1

41.4

(19.2)(46.5%)

Pharmaceuticals

59.0

55.4

3.6

6.6%

Other

(16.3)(17.5)

1.2-

Consolidated normalized operating profit

Consolidated revenue
1,800.0

1,850.0

1,900.0

1,950.0

1,941.3

FY2019Japan Beerand Spirits
Japan
Non-alcoholic
Beverages
Oceania
Integrated
Beverages(34.6)(7.6)
12.9(32.0)

Other

1,849.5

140.0

160.0

Japan Beerand Spirits
Japan
Non-alcoholic
Beverages
Oceania
Integrated
Beverages

(9.7)
(4.6)
(19.2)
3.6

Pharmaceuticals

1.2

Other
FY2020

180.0

190.8

FY2019(30.5)

Pharmaceuticals

FY2020Consolidated normalized operating profit(Billions of yen)

162.1

(Billions of yen)

200.0

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Management Analysis of Financial Position, Operating Results, and Cash Flows

from the lower sales volume and reduced sales ratio ofbeer category products, resulting in an 11.4% year-on-year
decline in normalized operating profit to 75.5 billion yen.

• Japan Non-alcoholic Beverages Business
Sales in domestic non-alcoholic beverage market were
substantially affected by the changes in consumer behavior
during the COVID-19 pandemic, which included a shift in
the locations that products were purchased, increased
opportunities to consume tea and coffee in the home, andstrong demand for reduced sugar and sugar-free productsin the health category.
Kirin Beverage stepped up efforts to meet customer
demand for health products with the aim of generating
profit through CSV-driven growth. The company boosted
the health value of its products by expanding its sugar-freeofferings in June with Kirin Lemon Sparkling Sugar-Freeand in September with Kirin Nama-cha Hoji Sencha, and its
reduced-sugar offerings in the Kirin Gogo-no-Kocha The
Meister’s Series. Boosted by the release of iMuse Lemon,
the sales volume of beverages with Lactococcus lactis
strain Plasma in the category of products with positive
health effects jumped by roughly 240% over the previous
year. However, vending machine and convenience store
sales suffered during the COVID-19 pandemic, and overallsales volume of soft drinks declined by 9.1% year on year.
The decreased sales volume and lower unit sales prices
resulted in overall revenue falling 12.1% year on year to252.2 billion yen. The company restrained sales promotion
and advertising spending, but was unable to offset thevarious negative impacts, such as from product andcontainer composition imbalances caused by the reduced
sales volume and altered sales channel ratios. Normalized
operating profit ultimately declined 17.4% year on year to
21.8 billion yen.

• Oceania Integrated Beverages Business
During the COVID-19 pandemic, the Oceania Integrated
Beverages Business’s main markets of Australia, New
Zealand, the United States and the United Kingdom haveplaced restrictions on going outside and on the number ofpeople inside restaurants and drinking establishments. Lion
posted a decrease in sales volume of Beer, Spirits and Wine
Business, which consists primarily of the restaurant market,
but took advantage of the risk opportunity to revise its
business strategies and reform its business structure.
The company developed and strengthened its corebeer brands in Australia with the launch of new XXXX andJames Squire products. In the overseas craft beer market,
which Lion sees as a growth area for its products, the New
Belgium Brewing, which was consolidated into the Kirin
Group in 2020, posted sales of its primary Voodoo Ranger
brand beer that surpassed the growth in the overall craft
beer market in the United States. Lion also made strides
with its environmental initiatives, including improving
operating efficiency by installing an enterprise resource
planning (ERP) system and achieving carbon neutrality at allof its breweries in Australia. In the Dairy and Drinks
Business, Lion completed the reorganization of its lowprofit business operations by agreeing to transfer theshares of Lion Dairy & Drinks to Australian dairy giant Bega
Cheese in November 2020.
For the year, the consolidation of New Belgium
Brewing of the United States helped Lion post a 0.2%
year-on-year rise in revenue on a local-currency basis evenas sales volume declined during the pandemic. However,the stronger yen versus the Australian dollar led to a 2.5%
year-on-year decline in yen-based revenue to 292.1 billion
yen. Sales have also fallen sharply in the higher-margin
on-premise channels during the COVID-19 pandemic.
Normalized operating profit dropped 45.9% year on year
to 295 million Australian dollars, and the company bookeda decline of 46.5% to 22.1 billion yen.

• Pharmaceuticals Business
The COVID-19 pandemic also impacted sales and clinicaldevelopment in the pharmaceuticals industry owing to thechanges in medical treatment circumstances and restrictedbusiness activity. Kyowa Kirin successfully limited thenegative impact and recorded increases in both sales andprofits as it continued its drive to become a global specialty
pharmaceuticals company. Sales of the three global
strategic products Crysvita, Poteligeo, and Nourianz steadily
expanded in Europe, United States, and other countries,
while in Asia sales of Regpara were strong in China.
Overseas sales offset the impacts in Japan from lowereddrug price standards and the core NESP product becoming ageneric biopharmaceutical following its patent expiration.
During the year, Kyowa Kirin implement measures toconstruct a robust quality assurance system, improve its

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Management Analysis of Financial Position, Operating Results, and Cash Flows

risk management, refashion its corporate culture, andstrengthen its global management system.
The solid growth in overseas pharmaceutical sales led
by its global strategic products helped Kyowa Kirin post
overall revenue growth of 4.2% year on year to 317.8
billion yen. The increase in gross profit accompanying therise in revenue offset higher selling, general andadministrative expenses for the global strategic products,
enabling normalized operating profit to grow 6.6% to 59.0
billion yen.
Performance results of subsidiary operations in the Others
category are described below.

• Myanmar Brewery• Kyowa Hakko Bio

In Myanmar, in-home consumption increased while therestaurant market contracted under government
restrictions on restaurant and drinking establishment
operations and stay-at-home orders during the COVID-19
pandemic. Myanmar Brewery implemented initiatives toimprove its operating efficiency by developing its
integrated marketing capabilities and investing in IT. Sales
volume increased for Andaman Gold brand in the economy
product category with the growth in the market for inhome consumption, but overall sales volume contracted
5.8%. Overall revenue declined 2.2% year on year to 31.8
billion yen while normalized operating profit increased
7.2% to 13.8 billion yen.

Kyowa Hakko Bio recorded a sharp decline in sales of its
core products in 2020 while operating under limited
product manufacturing capacity as it continued revamping
the manufacturing control and quality assurance system at
the Yamaguchi Production Center begun in late 2019. The
company launched a new business strategy during the year,
and the Kirin Group contributed to strengthening thequality assurance system and rebuilding the production
structure. In line with its strategy to concentrate on highperformance materials capable of driving business growth,
in November the company announced plans to construct a
new human milk oligosaccharide manufacturing facility at
its base in Thailand. Overall revenue declined 23.5% year
on year to 57.3 billion yen and normalized operating profit
amounted to a loss of 2.3 billion yen.

• MercianWhile sales fell in the on-premise market under the
pandemic conditions, demand increased for wine for inhome consumption, and Mercian responded with measures
to improve profitability and boost sales of its householdwine products. Sales of household wine products wereparticularly strong for Maker’s Recipe and OishiiSankaboushizai-Mutenka Wine Cidre. The Mariko Winery ofChâteau Mercian received a World’s Best Vineyards Award
2020, becoming the first winery in Japan to receive theprestigious honor. Mercian revenue decreased 2.7% year on
year to 62.1 billion yen and normalized operating profit
increased 63.3% to 3.6 billion yen.

• Coca-Cola Beverages Northeast
Coca-Cola Beverages Northeast forged ahead withstructural reform in 2020 to boost profitability even as
sales suffered, particularly in the restaurant market,
beginning in spring from COVID-19 pandemic.
Management swiftly adapted its business activities to therapidly changing market and overhauled its operations andorganization to improve business efficiency, resulting in
the company vastly exceeding its targets and posting
record high profits. While revenue declined 2.4% year on
year to 129.4 billion yen, normalized operating profit rose
75.1% to 9.3 billion yen.

2. Financial Status
General overview

Total assets at the end of fiscal 2020 increased by 46.5
billion yen from the end of the previous year to 2,459.4
billion yen. Intangible assets increased by 40.4 billion yen
due to software development and the addition of New
Belgium Brewing as subsidiary, which also increased
goodwill by 11.8 billion yen. Other financial assets (noncurrent) declined by 33.3 billion yen due to the sale ofstrategically held shares and the reduced market value ofKIRIN CSV REPORT 2021

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Management Analysis of Financial Position, Operating Results, and Cash Flows

equity holdings. Assets in the other category declined due
to transferring 73.7 billion yen in assets held for sale of the
Oceania Integrated Beverage Business and the Others
business; property, plant and equipment amounting to37.6 billion yen; and trade and other receivables of 19.7
billion yen.
Equity declined by 50.9 billion yen from the end of theprevious year to 1,095.9 billion yen. The decline was thebalance of retained earnings increasing by 22.6 billion yen
and non-controlling interest increasing by 17.1 billion yen,while treasury stock increased by 76.8 billion yen and otherassets and other items of owner’s equity declined by 13.9
billion yen. The increase in treasury stock was due to thepartial exercise in 2020 of the program announced in
November 2019 to further enhance shareholder returns byrepurchasing up to 100 billion yen of company shares. The
rise in non-controlling interests mainly owed to net income
reported by Kyowa Kirin. The decline in other items ofowner’s equity was due to the decreased market value ofequity holdings and the associated reduction in income
from the net change in the fair value of financial assets
measured through other comprehensive income, and dueto the transfer of proceeds from the sale of equity holdings
from other items of owner’s equity to retained earnings.
Liabilities increased by 97.4 billion yen from the end of
the previous year to 1,363.4 billion yen mainly due to anincrease in bonds and borrowings. The Company seeks to
procure and repay funds while maintaining a sound capital
structure, and during 2020 it redeemed bonds valued at
approximately 20.0 billion yen in March and issued straightbonds worth 50.0 billion yen in June. In addition, in
November 2020, it issued green bonds worth 10.0 billion
yen with the aim of procuring recyclable PET resin andpurchasing factory heat pump systems. The company also
paid down long-term borrowings, took out new
borrowings, and issued and redeemed commercial paper,
resulting in bonds and borrowing increasing by 111.8
billion yen from the end of the previous year. The Oceania
Integrated Beverage Business’s liabilities of 27 billion yen
are classified as liabilities directly related to assets held for
sale, which had the effect of reducing trade and otherpayables by 11.2 billion yen and other current liabilities by
5.9 billion yen.
As a result of the above, the ratio of consolidated
profit attributable to owners of the Company was 34.1%
and the gross debt-to-equity ratio was 0.77.

Financial status of reporting segments• Japan Beer and Spirits Business
Segment assets amounted to 424.4 billion yen at the end of
fiscal 2020, a decrease of 13.0 billion yen from the end of theprevious year. The decline was mainly due to restrained capital
investment in property, plant and equipment.

• Japan Non-alcoholic Beverages Business
Segment assets amounted to 149.9 billion yen at the end of
fiscal 2020, a decrease of 24.7 billion yen from the end of theprevious year. The decline was primarily due to the sale ofstrategically held shares and lower trade receivables.

• Oceania Integrated Beverages Business
Segment assets amounted to 471.3 billion yen at the end of
fiscal 2020, a decrease of 19.7 billion yen from the end of theprevious year. The decline was primarily due to impairment
losses on property, plant and equipment and intangible assets.

• Pharmaceuticals Business
Segment assets amounted to 741.7 billion yen at the endof fiscal 2020, an increase of 16.6 billion yen from the endof the previous year. The increase was primarily due to theacquisition of intangible assets with the addition ofdeveloped products and an increase in deferred tax assets.

3. Cash Flow

Cash flow and liquidity status
The balance of cash and cash equivalents (hereinafter “netcash”) at the end of fiscal 2020 was 161.7 billion yen, adecrease of 4.0 billion yen from the end of the previous
year. Consolidated cash flows were as follows.

• Cash flows from operating activities
Net cash from operating activities decreased by 14.0 billion
yen to 164.8 billion yen. Although the outflow of working
capital decreased by 20.3 billion yen and the profit before
tax increased by 7.7 billion yen, a 34.7 billion yen decreasein impairment loss, which is a non-cash item, resulted in aslight decline of 0.1 billion yen in the subtotal. Below thesubtotal line, cash flow from operating activities decreased
year on year due to a 17.2 billion yen increase in corporate
income tax payments.

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Management Analysis of Financial Position, Operating Results, and Cash Flows• Cash flows from investing activities
Net cash from investing activities decreased by 59.6 billion
yen to 116.0 billion yen. The main cause for the decrease
was a decline in investments accounted for by the equity
method of 132.6 billion yen to 1.9 billion yen, arising inreaction to the acquisition of FANCL shares in the previous
fiscal year. Outflows in 2020 increased by 35.1 billion yen
to 39.6 billion yen owing to the acquisition of shares in
New Belgium Brewing to make it a consolidated subsidiary.
Spending to acquire property, plant and equipment andintangible assets declined by 3.4 billion yen to 93.0 billion
yen. Although down by 17.9 billion yen from the previous
fiscal year, inflows included 19.4 billion yen from the sale ofinvestment holdings as part of ongoing measures toreduce strategically held shares.

• Cash flows from financing activities
Net cash used in financing activities increased by 42.5
billion yen to 52.5 billion yen. The Company increased the
distribution of dividends, including to non-controllinginterests, by 4.9 billion yen to 70.1 billion yen to raise theconsolidated dividend payout ratio to an amount of 40% or
higher of normalized EPS, which was set as the
management standard in the previous fiscal year. Outflows
to acquire treasury stock in 2020 increased by 31.0 billion
yen from the previous fiscal year, which included sharebuybacks by subsidiaries, to 76.8 billion yen as part of the
program announced in November 2019 to repurchasing up
to 100 billion yen of company shares. The Company actively
procured and repaid funds while maintaining a soundcapital structure during the year. Proceeds included 28.0
billion yen from the issuance of commercial paper, 60.0
billion yen from corporate bonds, and 135.0 billion yen
from long-term borrowings. Outflow included 86.6 billion
yen to repay long-term borrowings and 20.0 billion yen toredeem bonds.
These initiatives enabled us to invest in our existing
businesses, invest in our global craft beer strategies andother growth initiatives, and take steps to further
enhance shareholder return in accordance with ourfinancial strategy.
In fiscal 2021, we plan to use cash generated by ourbusinesses for disciplined investment to boost production
capacity, advance our global craft beer strategies, andexpand the Health Science domain. Shareholder return
initiatives will include maintaining the consolidated
dividend payout ratio at 40% or higher of normalized EPS
in 2021. While enhancing our ability to generate cash flow,
we will maintain a sensible capital structure with a balanceof capital costs and financial flexibility.

Basic capital policy
In accordance with the fiscal policy set forth in the Kirin
Group 2019–2021 Medium-Term Business Plan (2019
MTBP), the allocation of resources to businesses willprioritize investments (capital investment, business
investment) to strengthen and grow the high-profit
existing businesses, particularly the alcoholic and nonalcoholic beverages businesses. Resources will also be

steadily allocated to intangible assets, such as brands, R&D,
information technology, and human resources andorganization, and to establish and cultivate the Health
Science domain. The Company will take a disciplined
approach to investment to maintain and improve theoverall capital efficiency of the Kirin Group.
Shareholder return is a management priority, and theCompany has distributed annual dividends every year since
Kirin Brewery Company was founded in 1907. The
Company raised the consolidated target payout ratio in the2019 MTBP and plans to continue distributing dividends
equivalent to a consolidated dividend payout ratio of 40%
or higher of normalized EPS. Management will also flexibly
consider ways, such as share buybacks, to provide
additional shareholder returns while comprehensively
considering factors including the optimal capital
structure, market conditions, and reserve financial capacity
after investments.
The Company’s primary source for procuring funds isloans, which it uses to ensure the Company is prepared forsudden changes in the economic environment and tomaintain a high credit rating that is resilient to financial
conditions. The Board of Directors examines and verifies allfund procurement proposals that would affect thecontrolling stake in the Company or cause significant stock
dilution. The Board carefully considers the proposals interms of the long-term management vision Kirin Group
Vision 2027, the targets in the 2019 MTBP, and the impact
on stakeholders, and is fully accountable to shareholders.

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81

10-Year Summary of Key Financial Data
(Millions of yen)
JGAAP

Revenue*1
Less Japanese liquor taxes
Net revenue
Normalized operating profit*2
Operating profit
Operating profit (Before amortization of
goodwill, etc.)
EBITDA*3
Normalized EBITDA*4
Ordinary income
Profit attributable to owners of the Company*1
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Fiscal year end
Total assets
Interest bearing debt
Equity attributable to owners of the Company*1
Per-share data
Earnings per share (EPS) (Yen)Normalized EPS (Yen)*5
EPS (Before amortization of goodwill etc.) (Yen)Dividends per share (Yen)
Financial indicators
Return on equity (ROE) (%)*6
Return on invested capital (ROIC) (%)*7
Operating profit (Before amortization of
goodwill, etc.) / Net sales (%)
Net debt / Normalized EBITDA (Times)
Gross debt-to-equity ratio (Times)
Consolidated dividend payout ratio (%)*8

IFRS

2011

2012

2013

2014

2015

2016*92017*92018*92019

2020

2,071,774
323,375
1,748,398
142,864

2,186,177
315,549
1,870,627
153,0222,254,585
310,798
1,943,786
142,818

2,195,795
301,365
1,894,429
114,549

2,196,925
305,697
1,891,227
124,751

1,853,937
296,029
1,557,909
181,982
196,590

1,863,730
289,433
1,574,296
194,609
211,000

1,930,522
294,028
1,636,494
199,327
198,322

1,941,305
292,153
1,649,151
190,754
87,727

1,849,545
276,932
1,572,613
162,115
102,919

189,812

202,675

198,086

171,542

158,537

-

-

-

-

-

247,602
136,818
7,407
196,792(361,658)
193,214

297,185
307,339
138,452
56,198212,061(48,379)(160,008)

301,486
132,134
85,656
205,51785,526(272,357)

273,183
94,211
32,392
155,247(139,397)(80,701)

258,922
128,199(47,329)
171,011(70,659)(78,221)257,612
148,918
232,263(82,656)(157,271)

272,301
241,991
221,710
63,214(182,163)

279,907164,202
198,051
47,389(226,699)

272,619
59,642
178,826(175,619)(9,997)

243,959
71,935
164,839(115,981)(52,474)2,854,254
1,144,786
852,922

2,951,061
1,037,188
948,9432,896,456
858,911
1,075,861

2,965,868
873,003
1,101,833

2,443,773
821,478
663,8422,422,825
668,212695,860

2,398,572
486,475
947,1622,303,624
414,994
906,578

2,412,874
530,851
906,576

2,459,363
642,644838,584

7.70
70.58
27.00

58.44
117
124.87
29.00

90.76
122
159.92
36.00

35.27
118
108.5738.00(51.87)117(2.83)
38.00

163.19139
39.00

265.17151
46.00

183.57
167
51.00

68.00
158
64.00

85.57
136
65.00

6.9
-

12.4
-

14.0
-

8.6
-

(0.3)
-

22.2
10.8

29.5
16.3

17.7
12.0

6.6
5.2

8.2
6.0

10.9

10.8

10.2

9.1

8.4

-

-

-

-

-

38.3

2.86
24.8

2.25
29.5

2.76
32.2

2.67
32.5

2.21
28.1

1.19
30.5

0.86
0.46
30.5

0.59
40.5

0.77
47.8

*1	Through fiscal 2015, revenue, profit attributable to owners of the Company, and equity attributable to owners of the Company were calculated based on Japanese
GAAP and presented as sales, net income, and equity (net assets - non-controlling interests - stock acquisition rights), respectively. (Consolidated balance sheet).
*2	Normalized operating profit is a profit indicator for measuring recurring performance which is calculated by deducting cost of sales and selling, general andadministrative expenses from revenue.
*3	EBITDA = Operating profit + Equity in earnings or losses of affiliates + Depreciation + Amortization of goodwill + Extraordinary gains and losses. (Losses on impairment
regarding goodwill, etc., are excluded).
*4	Through to fiscal 2015: Normalized EBITDA = Operating profit + Depreciation + Amortization of goodwill + Dividends received from entities accounted for by the equity method	From fiscal 2016: Normalized operating profit + Depreciation and amortization (excluding depreciation of right-of-use assets from fiscal 2019) + Dividends received
from entities accounted for by the equity method*5	Normalized EPS = Normalized profit (Normalized net income before fiscal 2016) / Average number of shares during the period	Through to fiscal 2015: Normalized net income = Net income + Amortization of goodwill ± Extraordinary gains and losses after tax adjustment

	From fiscal 2016: Normalized profit = Profit attributable to owners of the Company ± Other operating profit and expenses and other items after tax adjustment*6	ROE through to fiscal 2015 is the amount before amortization of goodwill, etc., and excludes losses with no effect on cash outflow.
*7	ROIC = Profit after tax before interest / (Average interest- bearing debt of the beginning and end of the fiscal year + average total equity of the beginning and end of the
fiscal year)*8	The fiscal 2011 dividend payout ratio figure uses EPS (before amortization of goodwill etc.), and these figures exclude losses with no effect on cash outflow.
	From fiscal 2012, the consolidated dividend payout ratio is based on normalized EPS.
*9	The tax effect on intangible assets acquired in business combinations has been retroactively revised for fiscal 2016, 2017 and 2018 due to the change in accounting
policy in fiscal 2019.

KIRIN CSV REPORT 2021

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82

Investor Information / Company Information
Information related to total shareholder return
Year-end stock price (Yen)Dividends per share (Yen)
Cumulative dividend income per share(from FY2015, Yen)
Amount of increase in stock price per share(from FY2015, Yen)
Total shareholder return per share*
Absolute amount (Yen)
Rate (%)

Corporate overview

FY2015
1,647.538

FY2016
1,901.539

FY20172,840.546

FY20182,298.551

FY20192,390.064

FY20202,434.0
65

-

39

85

136

200

265

-

254.0

1,193.0

651.0

742.5

786.5

293.0
17.8%

1,278.0
77.6%

787.0
47.8%

942.5
57.2%

1,051.5
63.8%

Trade name
Kirin Holdings Company, Limited
Date of incorporation
February 23, 1907
* On July 1, 2007, accompanying the shift to a pure holding company structure, Kirin
Brewery Company, Limited changed its name to Kirin Holdings Company, Limited

Head officeNakano Central Park South, 10-2, Nakano 4-chome,
Nakano-ku, Tokyo 164-0001, Japan* Total shareholder return per share is calculated at fiscal year-ends, starting in fiscal 2016 as if the investment was made at the closing stock price at the end of fiscal 2015.

Paid-in capital¥102,045,793,357

Stock price and trading volume(Yen)

Stock price (left)

Nikkei 225 stock average (right)(Yen)

Number of employees (consolidated)

3,300

33,0003,000

30,000* Number of Kirin Holdings employees on a consolidated basis, as of December 31, 2020

2,700

27,000Stock listings

2,400

24,0002,100

21,0001,800

18,0001,500

15,0001,200

12,000900(Million shares)

120
90
60
30
0

2016

2017

2018

2019

2020

2021 (FY)

Trading volume

9,000

31,151

Tokyo, Nagoya, Fukuoka, Sapporo
Transfer agent
Mitsubishi UFJ Trust and Banking Corporation, Corporate Agency
Division
1-1, Nikko-cho, Fuchu-Shi, Tokyo 183-0044, Japan
Tel: +81-3-5391-1900 (business days from 9:00 to 17:00)
Depositary
J.P. Morgan Chase Bank N.A.
Shareowner Services
P.O. Box 64504
St. Paul, MN 55164-0504
Call toll-free from within the U.S.: +1-800-990-1135

2016

2017

2018

2019

2020

2021 (FY)

Call from outside the U.S.: +1-651-453-2128

KIRIN CSV REPORT 2021

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CSV Stories

GovernanceBusiness Progress

Financial Data/
Company Information

CONTENTS

83

Third-Party Evaluations

External Signatory
and Participation

The Kirin Group provides full transparency in its information disclosure to investors and all stakeholders. The extensive data we provide
through the integrated Kirin CSV Report, Environmental Report, and on the corporate website makes it possible for third-party evaluationsof our environmental performance and inclusion in global indices.

The Kirin Group supports and participatesin the following initiatives.

FTSE4Good Index

FTSE Blossom Japan Index

MSCI JapanESG Select Leaders Index

MSCI Japan
Empowering Women Index (WIN)SBT

S&P/JPX Carbon Efficient Index

CDP Climate A List

CDP Water Security A List

CDP Supplier
Engagement Leaderboard

RE100

ESG Finance Awards
Japan Gold Award

Snam Sustainability Index

Corporate Governance of The Year
2020 Grand Prize Company

Environmental Communication
Award

TCFD

Nadeshiko Brand 2021

Diversity Management Selection 100

work with Pride, Gold Certification

Health Management Excellence
2021 (White 500)

30% Club

NIKKEI “Smart Work Management
Survey” 5 Stars

NIKKEI “SDGs Management Survey”
5 Stars/Environmental Value Award

Alliance to End Plastic Waste

Published June 2021