INTEGRATED REPORT 2023

KIRIN INTEGRATED REPORT 2023

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CSV Management

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Contents
About Kirin Group・・・

The Origin and Progress of CSV Management

4・・・・・・

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Corporate Policy
Key Issues

The Long-term Management Vision,
Medium-Term Business Plan, and 2023 Strategy
KPIs

・・・

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KIRIN’ s HISTORY・・・・・・・・・・・・・・・・・・・・・・・・・

Message from Top Management

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23

・・・・

Yoshinori Isozaki

President & CEO
Kirin Holdings Company, Limited

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・・・・

BUSINESS

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Diversity and inclusion, culture forinnovation

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27

Junko Tsuboi
Senior Executive Officer, Human Resources &General Affairs
Kirin Holdings Company, Limited

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ICT accelerating value creation

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39
42

・・・・

Message from the Chief
Financial Officer

Takeshi Minakata

Shinjiro Akieda

・・・・・・・・・・・・

Health Science domain

49

Kirin Holdings Company, Limited / Kirin Beverage
Company, Limited / Koiwai Dairy Products Co., Ltd. /Kyowa Hakko Bio Co., Ltd.
・・・・・・・・・・・

60

Kirin Brewery Company, Limited / Lion Pty Ltd / Kirin
Beverage Company, Limited / Mercian / Coca-Cola
Beverages Northeast, Inc.

Pharmaceuticals domain

・・・・・・・・・・・・・・・・・・・・・・・・・

74

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・・・・

Message from Senior Executive
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Officer of CSV Strategy
・・・・・・・・・・・・

Ryosuke Mizouchi
Senior Executive Officer
Kirin Holdings Company, Limited

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CSV Stories
Health and Well-Being

Community Engagement

Financial and Non-financial Highlights
Management Analysis Of Financial
Position, Operating Results,
And Cash Flows77

Giving Back to the Community throuugh Human
Powered Business ・・・・・・・・・・・・・・・・・・・・・・・・・・・・89

79

Creating Positive Impact on Society through Active
Engagement with Natural Capital ・・・・・・・・・・・・・・94

・・・

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The Environment

A Responsible Alcohol Producer

Lion’ s Commitment to Responsible Drinking andInnovation ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・98

71

Kyowa Kirin Co., Ltd.

CSV Management

・・・・

Spreading an Immune Care Habit and Contributing
to the Consumers’ Health and Well-Being ・・・・・86

Senior Executive Officer
Kirin Holdings Company, Limited

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Food and Beverages domain

OUTCOME73

Message from Senior Executive Officer
46
of Health Science Strategy
Director of the Board, Senior Executive Officer
Kirin Holdings Company, LimitedCore technology that creates accurate
value: A competitive strategy combining
33
R&D expertise and IP strategies
Consumer centric marketing

・・・・

Corporate Governance / Risk Management

100
Disclosure Based on TCFD and TNFD Frameworks

Corporate Governance

Disclosure of Information on Climate ChangeInterview with IndependentNon-executive Directors

Disclosure of Natural Capital

・・・・

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Enhancing Management Effectiveness

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Required skills for directors and Audit &123
Supervisory Board members

・・・・

Masakatsu Mori

Independent Non-executive Director of the Board(Chairperson of the Board)

Noriko Shiono

・・・・

Independent Non-executive Director of the Board(Member of the Nomination
and Remuneration Advisory Committee)

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Basic Policy for the Remuneration of
Executive Officers

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Risk Management

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Quality initiatives In 2022

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Editorial Policy
The Kirin Group Vision 2027 (KV2027) sets the Long-Term Management Vision for
the Group to become a global leader in CSV, creating value across our world of Food
& Beverages and Pharmaceuticals domains. We hope this report will help readers
understand how we are using our strengths in fermentation and biotechnology that havebeen cultivated through our beer business since its foundation, to create value in the
Food & Beverages, Pharmaceuticals, and Health Science domains.
● Coverage

Kirin Holdings Company and the Kirin group companies● Period

Period covered is fiscal 2022 (January 1, 2022 to December 31, 2022). Certain activities
occurred in fiscal 2023.
● Contact

Kirin Holdings, Corporate Communications Department● Referenced Guidelines

The integrated report was prepared with reference to the International Integrated
Reporting Framework of the International Integrated Reporting Council (IIRC) and the
Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for
Collaborative Value Creation of the Ministry of Economy, Trade and Industry.

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 2023 financial results were decided as of the disclosure offinancial results on February 14, 2023.

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Publications Available on Kirin’ s Global Website● Environmental Report (Publication every June)

The report details the Kirin Group’ s annual environmental activities as well as uniquebusiness-driven initiatives. It presents the Kirin Group’ s annual environmental activities
and how it makes use of the unique characteristics of its businesses in environmental
initiatives.
https://www.kirinholdings.com/en/investors/library/env_report/● Consolidated Financial Statements( Publication every March 31)
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, business results, facilities, and operations.
https://www.kirinholdings.com/en/investors/library/financial_results/● Corporate Governance Report(Publication Every April)

The report provides information on the Group’ s approach to and system of corporate
governance, maintained in compliance with the Corporate Governance Code of Japan.
https://www.kirinholdings.com/en/purpose/files/pdf/governance_report.pdf● 2022-2024 Medium-Term Business Plan webpage (Published in February 2022)

The webpage features the 2022–2024 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● 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/● Data Book(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/

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About Kirin GroupThe Kirin Group, starting with the fermentation andbiotechnology we have elaborated over a century
in our founding business―the beer business―has a unique global business portfolio thatspans across three domains: Food & Beverages,
Pharmaceuticals, and Health Science.
In 2013, we were the first Japanesecompany to place its strategic pivot on CSVManagement*, with a goal to realize sustainablegrowth, together with society. Then, in 2019 weformulated our new Long-Term Management
Vision, Kirin Group Vision 2027 (KV2027). Under
our three growth scenarios of “Strengthening
the earnings capability of Food & Beverages
businesses,” “Leaping of Pharmaceuticals
business,” and “Establishing and fostering the
Health Science business,” we will strive to become
a global leader in CSV by 2027.
*A management strategy unique to the Kirin Group in which
we aim to create economic value through the resolution ofsocial issues and continue sustainably growing, together
with society. It is an initiative to meet social needs andsolve social issues to create economic value and makethat value our driver for further growth.

01 The Origin and Progress of CSV Management
Reverence for Life: A Brewing
Philosophy that fostered fermentation
and biotechnology
Fermentation and biotechnology support the Kirin
Group’ s unique business portfolio. The birth of thisunique technology is heavily tied to our Brewing
Philosophy “Reverence for Life,” which has been
passed down from generation to generation in the beerbusiness, our founding business.
“Reverence for Life (Ehrfurcht vor dem Leben),”
was advocated by Dr. Albert Schweitzer, who wasawarded the Nobel Peace Prize in 1952. Dr. Schweitzer

The Brewing Standard,established in 1977.
The beginning of thisdocument describes“Reverence for Life.”

said, “I am life that wills to live, in the midst of life thatwills to live” and “He accepts as good: preserving life,
promoting life, developing all life that is capable ofdevelopment to its highest possible value.”
Dr. Schweitzer’ s words suggest that wehumans are a part of life in the natural world, and thatall plants, animals, and microorganisms coexist in
an interconnected world. Additionally, they suggestthat improving all lives and developing them into thebest they can be is of the highest value. This concept,
Reverence for Life, deeply resonates with the Kirin
Group, whose business is relying on the blessings ofthe nature, such as agricultural products (barley, hops),

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water, and yeast.
This philosophy of respecting life, learning fromits mysteries, and maximizing its value has driven the
Kirin Group’ s life science research and fostered ourcurrent organizational culture, which puts value ontechnological and research and development (R&D)
capabilities. It was in this rich environment that we
spent many years fostering the root of our technologicalcompetences: fermentation and biotechnology.
The entry into the life science business (currently
the pharmaceuticals business) under our “LongTerm Management Vision,” formulated in 1981, wasa management strategy to leverage the fermentationand propagation technologies accumulated in thebeer business, the origin of our business, to develop
pharmaceuticals through biotechnology, with the aimof contributing to solving the social issue of the aging
population. Back then, the term “CSV” had not beencoined yet, but the current concept of CSV is the idea of
realizing corporate growth through the solving of social
issues through innovation. Through our partnership with
Amgen Inc., we introduced new medicines in the 1990s,
and we became the world’ s only brewer to organically
expand into the biopharmaceutical business.
Kyowa Kirin Co., Ltd. (Kyowa Hakko Kirin at the time)
was established in 2008 through a partnership with
Kyowa Hakko Kogyo, and a goal was set to become
a Japan-based global specialty pharmaceutical thatleverages its cutting-edge biotechnology. They continue,
to this day, to contribute to the health of people.
In addition to the Food & Beverages andPharmaceuticals businesses, we started the Health
Science business as a domain between these two toaddress people’ s health issues in the second half ofthe 2010s. We believe the social issue of health will only

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continue to grow with the aging population, increasein chronic diseases, and heightened risk of infection.
The Kirin Group will leverage the scientific knowledge
and experiences we cultivated through pharmaceuticaldevelopment and the points of customer contact
developed through the Foods & Beverages business tocreate value unique to our Group.
Fermentation and biotechnology, the uniquestrengths of the Kirin Group, are the foundation of ourthree businessdomains. We believe, that by engaging
in all three of these domains, we can create our own
unique value.
On the other hand, the mutualism referred
to in “Reverence for Life,” is the philosophy of CSV

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Management and environmental management, which
aim to achieve both corporate growth and prosperity ofsociety as a whole.

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02 Corporate Policy
Corporate Philosophy
KIRIN brings joy to society by crafting food andhealthcare products inspired by the blessingof nature and the insights of our customers.

We pride ourselves on offering products based on what
people want.We pride ourselves on our ability to harness
the blessings of nature through innovative technology.
We pride ourselves on delivering tangible satisfaction
and quality in everything we make.All of which ensuresthat we exceed customers’expectations.And naturally,
we do not stop there.As we look forward with visionand dreams, we aim to continue offering food andhealthcare products that bring new joy to people’ s
lives everywhere.Always a step ahead, the Kirin Groupsupports health, pleasure and comfort in your life.

“One KIRIN” Values
Passion. Integrity. Diversity.
As members of the Kirin Group, our three values are
Passion, Diversity, and Integrity.

PassionOur determination to continuously provide ourcustomers and society with new value propositions
based on innovative ideas, and our enthusiasm to meetgoals with pride in the companies we work for and thebrands we offer.

Integrity
Our gratitude to our stakeholders for always helping us
move forward, and our promise to remain honest andhumble in every business activity to serve them better.

Diversity
Our respect for different perspectives and values thatenable constructive discussions, and our belief that the“differences” have the power to change the world andcreate better solutions.

Corporate Data

（FY2022 Results）

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03 Key Issues
Management Issues for Sustainable
Growth―Group Materiality Matrix(GMM)
Kirin Holdings has organized its Management Issues for
Sustainable Growth (Kirin Holdings Materiality Matrix(GMM)), which outlines the challenges it should address
to operate and develop sustainably in partnership withsociety. The Group evaluates the GMM from the two
perspectives of impact on its business and impact on
stakeholders. As the Group considers that the GMM willchange over time, it re-evaluates and revises the GMM
every time it formulates a three-year Medium-TermBusiness Plan.
In line with the formulation of the 2022–2024
Medium-Term Business Plan, Kirin Holdings madethe GMM better meet social demands by refining the
aspects of the GMM and re-evaluating the importanceof it in light of changes to the business environment,
including the COVID-19 pandemic, and stakeholder
expectations.

Identifying management issues
Identify issues based on reporting guidelines(ISO26000, GRI, SASB), ESG assessments(FTSE,
MSCI, Sustainalytics) and targets of SDGs, etc

Implementation of internal reviews
Discussing the impact of social issues on
business activities and the impact of businessactivities on society at the Group Executive
Committee, based on objective information onsocial issues, including reports from NGOs andNPOs and media information

Implementationof stakeholder engagement
Engagement with investors, NGOs, NPOs, andemployees (labor unions) based on the resultsof internal reviews to reflect their opinions

Selecting the Materiality
The results reflecting the opinions ofstakeholders were approved by the Board
meeting after the Group CSV Committee

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04 The Long-term Management Vision,

Medium-Term Business Plan, and 2023 Strategy
CSV Management, which creates economic value
through solving social issues, is effective in realizing
sustainable growth in this era of unpredictability. We
are taking on the challenge of expanding our businessthrough the resolution of social issues under the three
growth scenarios in KV2027: Strengthening the earnings
capability of Food & Beverages businesses,” “Leapingof Pharmaceuticals business,” and “Establishing andfostering the Health Science business,”

Long-Term Vision KV2027
Our vision for 2027
Create value across our worldof Food & Beverages to Pharmaceuticals,
and become a world-leading company in CSV.

Long-term Vision Statement:Kirin Group Vision 2027(KV2027)
Corporate philosophy

KIRIN brings joy to society by crafting food and healthcare products inspiredby the blessings of nature and the insights of our customers.

2027 vision

A global leader in CSV,creating value across our worldof Food & Beverages to Pharmaceuticals

Outcomes

Create economic value (Financial targets),create social value (Non-financial targets)

Strategy framework

Value creation with Society

Value creation with Consumers

solving social issues (Health andwell-being, community engagement andthe environment)

meeting every consumer’s expectations
by strengthening the bonds between
consumers and the brands

Organizational
capabilities
for innovation

One KIRIN Values

Passion. Integrity. Diversity.

Consumer centric marketingTechnology creating trusted value

Diversity and Inclusion,
culture for innovation

ICT accelerating value creation

CSV Purpose
Health and Well-Being
Community Engagement
The Environment
A Responsible Alcohol Producer
Our “CSV Purpose” is guiding principles aimed atsustainable growth and creating value together withpeople and society.
The “CSV Purpose” is based on the GMM, which
outlines the key issues that must be addressed inorder to exist sustainability and develop together withsociety. The respective principles are a set of guidelines
for the role and purpose expected to us in society
for each of the four priority issues: “A Responsible
Alcohol Producer,” Health and Well-Being,” Community
Engagement,” and “The Environment.” Each businesssegment makes efforts toward our “CSV Commitment,”an action plan to realize these guidelines.

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A Responsible Alcohol Producer
Make steady progress toward eradicating
the harmful use of alcohol in all countriesof operation (Zero Harmful Drinking).

Health and Well-Being
Raise the number of healthy people, lower
the number of sick people, and contribute to
the people who are involved in healthcare.

We develop safe, secure products in our food andbeverages businesses that both taste great and support
self-care. We also provide new products and services
and new drug creation that leverage the strengths of ourpharmaceutical and bio-chemical businesses. Throughthese actions, we help our customers develop physicaland mental health and improve their quality of life.

Community Engagement
Create positive forces for people’s well-being
and society by developing communities.

Connecting with other people makes people positive.
That force makes people’ s minds and bodies
healthy and creates vitality in society.
The Kirin Group, through its products andservices, co-creates a society that connects customers
and all people engaged in the value chain with joy,
thereby contributing to developing future.

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The Environment
Enrich a sustainable Earthfor future generations through positive impact.

As a company that benefits from the many blessingof nature, including water and agricultural products,
we recognize that the sustainability of the global
environment is essential to ensuring the continuity ofour business. By reducing the environmental burden in
our value chain through such means as creating ecofriendly containers and packaging and addressing theissue of global warming, we are able to strengthen ourbusiness foundation.
Under the Kirin Group Environmental Vision 2050,
revised in 2020, we aim to enrich the sustainable Earthfor future generations through positive impact.

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Value Creation ModelWe create social value and economic
value by solving social issues throughour business activities in the Group.
The Value Creation Model isour business model that amplifies
the two values through a sustainable
cycle of reinvesting the economic
value in our drivers.

Kirin Group is aiming to partner with society in achieving mutual growthby placing CSV at the core of its management.

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2022 MTBPIn the 2019–2021 Medium-Term Business Plan (2019
MTBP), we established the foundation for change, suchas by organizing our business portfolio and improving
the quality of governance. The 2022–2024 MediumTerm Business Plan (2022 MTBP), which will solidify
the story of our journey to realizing KV2027, is the next
step toward new growth following the 2019 MTBP.
Specifically, our strategy is centered around threeimportant commitments: (1) increase profit in the Food
& Beverages domain, (2) Strengthen global base in the

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Pharmaceuticals domain, and (3) Scale up business inthe Health Science domain. We aim to grow the threebusinesses to improve corporate value by concentrating
management resources through strengthening portfolio
management and clarifying investment priorities.
Meanwhile, we will build a solid organizationalfoundation by strengthening our organizational
capabilities to achieve innovation, thoroughly utilizing
Kirin Holdings’DNA of focusing on quality, building an
SCM (Supply Chain Management) system that balances
efficiency and sustainability, and strengthening
governance to support value creation.

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Basic Policy

・Implementing business structure reforms with an eye
to post-COVID-19
・Creating new value

Important Commitments
1. Increase profit in the Food & Beverages domain that
leads cash generation
2. Strengthen global base in the Pharmaceuticals domainthat establishes our position as a Global Specialty
Pharmaceutical Company
3. Scale up business in the Health Science domain thatwill become a large pillar of the future
KPIs

Kirin Group 2022-2024 Medium-Term Business Plan～Three-year plan for the second stage of KV2027～

Financial targets*1
Normalized*2 EPS

Non-financial targets
Item

CAGR
(vs FY2021)

New growth track
Focusing management resources on three domains
Built the foundationof transformation

2019-2021 MTBP

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

11% +Achieving
KV2027

ROIC*3Fiscal year 2024

10% +Strengthen global
base in Pharmaceuticals
domain2025-2027 MTBP

Environment

Health

Employees

Theme
Climate change

GHG

Containers and Packaging

PET bottles

Water resources

Water

Progressof mid-term
health sciencestrategy

Supporting the maintenanceof immune function
New value creation in the immunity,
brain function, and intestinal
environment domains. And collaboration
with pharmaceuticals domain

Organizational culture

Employee engagement

Diversity

Increasing diversity

Occupational health and safety

Lost time injury frequency*1 Financial indicators are evaluated by excluding the impact of exchange rate fluctuations when overseas*1subsidiaries
Financialare evaluated by excluding the impact of exchange rate fluctuations
whenareindicators
consolidated, etc.
KMJ 様
*2overseas
By removing otheroperating income
or expenses, etc andetc.
other non-recurring items, it is adjusted to reflect
注のテキストsubsidiaries
are consolidated,
actual earnings more accurately
コーディングで使用ください*2*3Byremovingbefore
otheroperatingincomeorinterest
expenses,and other
non-recurring
items,
it is adjusted to
ROIC=Eamings
interest
and after tax/(Average
bearing etc
debt between
the beginningand the日本語版データ参照
endof the FY+
average
total equitymore
betweenaccurately
the beginning and the end of the FY)
reflect
actualearnings*3 ROIC=Eamings before interest and after tax /(Average interest bearing debt between the beginningand the end of the FY+ average total equity between the beginning and the end of the FY)

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2022–2024 CSV Commitments

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Target Year

LatestAchievements(2022)A Responsible Alcohol Producer
Group Materiality Matrix

The CSV Commitment is a medium- to long-term action
plan for each business to realize the CSV Purpose,
which is the translation of the Group’s management
philosophy into a social purpose based on the GMM.
For internal management purposes, annual
targets are set, and the status of their implementation
is monitored on a quarterly basis and reported to theBoard of Directors of Kirin Holdings.

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Medium items

Theme

Particularly
contributeto SDG
targets

Raisingawareness of
3.5
responsible
drinking

Dealing withalcohol-related
problems
Expansionof sales of
non andlow alcohol
products

Labellingof alcohol
content

3.5

3.5

CSV Commitment
approach

By providing customers
with information on
responsible drinking andraising awareness , we aim
to eradicate the harmful
use of alcohol. In addition
we will fulfill our social
responsibility as an alcohol
producer, and maintain thealcoholic beverage businessenvironment.

Strengthening non andlow alcohol products
will expand the range ofoptions available to meetcustomers’
objectives andenable customers to control
their alcohol consumption.
This will also lead tobusiness growth of non andlow alcohol products

Labelling with the amount of
alcohol will help customers
understand and control theiralcohol intake. In addition,
we will fulfill our social
responsibility as an alcohol
producer, and maintain thealcoholic beverage businessenvironment.

Our
Achievements

Company/
Department

TargetValue

Kirin Brewery

750,000
participants/ viewers

1,060,000
Cumulative total
participants /2022-2024
viewers

7,200
participants/ viewers

4,530
Cumulative total
participants /2022-2024
viewers

100,000
participants/ viewers

42,223Cumulative total
participants /2022-2024
viewers

Kirin Holdings
CSV Strategy
Dept.

135,000
participants/ viewers

81,554
Cumulative total
participants /2022-2024
viewers

Kirin Brewery

117%(compared
to 2021)2024

93%(compared
to 2021)

Sales volume
growth ratio of
Merciannon and low
alcohol beverages

115%(compared
to 2021)2024

79%(compared
to 2021)

Sales percentage
of non and low
Lionalcohol beverages

NZ: 4%
Australia:
7%

2024

NZ: 2.7%
Australia: 4%

Kirin Brewery

To bestarted in
2022

2022

started

Lion

100%

2024

100%

Participationof responsible
Merciandrinking programs
and number ofvisitors to theawareness raising
Lion
content on thewebsiteSales volume
growth ratio
of non-alcohol
beverages

Percentage of
products withalcohol content
labelling

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Health and Well-being
Group Materiality Matrix
Medium items

Particularly
contribute to
SDG targets

CSV Commitment
approach

Our Achievements

Company/Department

Target Value

TargetYear

LatestAchievements(2022)

Ensuring food safety andsecurity

2.4

We promote hygiene management and food safety management systems
globally using international certification (GFSI recognized scheme and ISO
22000 scheme) to ensure the safety and security of our customers.

Acquisition rate of international food safety
certification (GFSI certification and ISO 22000)

Kirin Holdings
Quality Assurance Dept.

96%

2024

87%

Provide phamaceuticals for
Unmet Medical Needs

3.8

By providing Crysvita as a life changing value to as many patients as
possible and contributing to their health and well-being, we will lead to the
expansion of our business.

Number of countries/regions where Crysvita
has launched

Kyowa Kirin

50 or morecountries/regions

2025

40countries/regions

50%
45%

2027
2024

32%

3.3

We will contribute to global health by implementing Japan-originatedimmunological research in society. We will use Lactococcus lactis stain
Plasma to support the maintenance of customers’ immune function,
promote the development of proper immune care habits, and develop newmarkets in Japan and overseas through product development that leverages
the Group’s assets.

1.9 million people

2024

0.64 million people

49%

2024

45%

Support for maintaining theimmune system
Support for the prevention of
non-communicable diseases

Recognition rate of the function of Lactococcus
lactis strain Plasma
Number of people who continue to consume
Lactococcus lactis strain Plasma in Japan andoverseas.

Kirin Holdings
Health Science business
Dept.

Sales composition ratio of products that
contribute to health(sugar-free / low-sugar
products, health science domain products)
3.3
3.4

By developing, and expanding products in the health domain, we willcontribute to the maintenance of customers’ health through their daily eating Sales of sugar-free / low-sugar products
habits, leading to business growth.

Kirin Beverage

Sales of health science domain products

Support for maintaining theimmune system
Helping to improve theperformance of brain function
and prevent decline
Improvement of access tonutrition

Helping to improve theperformance of brain function
and prevent decline

*1
*2

101％
(compared to 2021)

145%
2024
(compared to 2021)

107％(compared to 2021)

3.3
3.4

Through products using Lactococcus lactis stain Plasma that supports themaintenance of immune functions and sugar-free, non and low fat productsthat support the prevention of lifestyle-related diseases, we will contributeto the maintenance of customers’ health and lead to the growth of ourbusiness.

Sales of products that contribute to health

Koiwai Dairy Products

120%
2024
(compared to 2021)

106％(compared to 2021)

2.2
3.3
3.4
9.5

By supplying high-quality Human Milk Oligosaccharide (HMO) to a wide
range of markets, from infant formula to health foods, we will contribute to
the improvement of customers’ health in a wide range of regions and age
groups, leading to the growth of our business.

Number of users of HMO-containing products(infant formula, health foods, etc.) in Japan andoverseas

Kyowa Hakko Bio

2 million people

2027

Completion of HMOs
production facility

Improvement from
2022

2024

62.55

Improvement from2020 (63.8%)2024

63.9% (2021)

73% or more

2024

72.5%

4 million people

2027

1.53 million people

Survey score of presenteeism*2 in targetedcompanies*1
Implementation of healthmanagement

110%
2024
(compared to 2021)

3.4

2.2
3.4
9.5

As a corporate group that delivers "health" to customers, we aim to create
an environment where employees and their families can spend the rest of
their lives in good health and mental well-being, and where employees candemonstrate their individual abilities.

By supplying Citicoline, a brain-health nutrient, we will be able to support
our customers’ healthy lifestyles and expand our market by prescribing it topatients and meeting the needs of the health food market for brain function.

Target Company: Kirin Holdings, Kirin Brewery, Kirin Beverage, Mercian, Kyowa Hakko Bio, Kyowa Kirin
presenteesm: A condition in which a person is working while having health problems.

Percentage of people who maintain appropriate
weight in targeted companies*1
Percentage of employees of domestic
business companies with responsible alcohol
consumption (Percentage of people whosescore is less than 8 on AUDIT)

Kirin Holdings
People & Culture Dept.

Number of users of Citicoline-containing
products (pharmaceuticals, health foods, etc.) in Kyowa Hakko Bio
Japan and overseas

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Value Creation Model
INPUT

Value Creation Model
BUSINESS

Value Creation Model
OUTPUT

Value Creation Model
OUTCOME

CSV Management

Corporate GovernanceRisk Management

Contents

Community Engagement
Group Materiality Matrix
Medium items

Respect for human rights

Sustainable developmentof communities in raw
material production
areas and businessdevelopment regions

Creating bonds and trust
for people’s well-being

Enhancing thesustainability of foodeconomyParticularly
contribute to
SDG targets

CSV Commitment
Company/
Department

Our Achievements

8.7
8.8
12.7

We will comply with the Australian Modern Slavery Act to address human rights andmodern slavery in the supply chain.

Compliance rate with the Australian Modern
Slavery Act

Lion

100%

2024

100%

8.7
8.8
12.6

We will work to reduce the risk of human rights issues and prevent crisis in the supply
chain of major raw materials, leading to the sustainable procurement of raw materials.

Number of initiated human rights due
diligence on supply chains for agricultural
products with high human rights risk

Kirin Holdings
Procurement
Dept.

3 casesCumulative total
2022-2024

1 case2.3
17.17

By resolving issues surrounding the cultivation of Japanese hops, we will contribute to
the revitalization of communities and economies, leading to the sustainability of raw
material production and the growth of our business.

Japanese hop production volume

Kirin Brewery

100t

2027

105t

2.3
4.5
17.16

By expanding our support for acquiring Rainforest Alliance certification for “KIRIN
Gogo-no-Kocha” , we will contribute to the sustainable development and stableprocurement of tea leaves in Sri Lanka.

Number of farms supported to obtain RA
Certification for sustainable development of Kirin Beverage
Sri Lankan tea plantations

Farms: 15
Small farms: 5,350

Cumulative total
2022-2024

Farms : 4
Small farms : 9

2.3
15.4
17.17

Through the cultivation of high-quality grapes and the expansion of vineyards, we willcontribute to environmental conservation and the revitalization of local agriculture
and economies, leading to the sustainability of raw material production and stableprocurement.

Grape yield from company-managed
vineyards

Mercian

160t

2024

167t

12.6
17.17

With our business partners, we will increase the transparency of our raw material andother goods/services procurement and improve the sustainability of our supply chain.

SEDEX (or equivalent) compliance rate of
key suppliers

Lion

95%

2024

68%

11.a

Through "KIRIN Gogo-no-Kocha HAPPINESS Project", we will bring joy to society bySales volume of “KIRIN Gogo-no-Kocha
connecting people who are moving forward with reconstruction with the support of the
HAPPINESS Project”
entire country, which will lead to the growth of "KIRIN Gogo-no-Kocha" brand.

Kirin Beverage

115% (compared to
2021)

2024

120%
(compared to 2021)

11.a

Through creating connections between people with wine, we will provide ourcustomers with enjoyable times filled with smiles, thereby enhancing our brand value
and strengthening our business foundation.

Consumption rate of wine in Japan

Mercian

32.3%

2024

30.7%

11.a

With our community investment partners, we will contribute to the mental health ofpeople through the communities of our customers and local communities.

Number of people reached by community
investment programs

Lion

8,000 people

2,498 people

11.a

By supporting people’ s mental and physical health through sponsorship, events, andcommunity football activities, we will bring joy to society and enhance our corporate
brand value.

・“Kirin Family Challenge Cup” to be held
throughout Japan,
・KIRIN's corporate imagescore“Connections with People andSociety” through the participant Survey

Cumulative total
2022-2024

Kirin Holdings ・Held at 4 venues
Strategic
throughout Japan
2024
Marketing・Averagescore over
Dept.
70%

8.9
11.a
17.17

Through the expansion of the craft beer category, we will spread the joy of beer
drinking and contribute to the revitalization of business partners and industries whiledeveloping beer and food culture, and lead to business growth.

Market size of Japanese craft beer

Kirin Brewery

150%
2024
(compared to 2021)

confirming

2.3
4.5
17.16

By growing the Japanese black tea market through the brand activities of "KIRIN GogoBlack tea market share within Japanese
no-Kocha", we will increase the purchase of Sri Lankan tea leaves and contribute to thesoft drink market
development of the tea industry and the growth of our business.

Kirin Beverage

4.91%

2024

4.81%

8.9
11.a
17.17

Through the creation and energizing of communities where Château Mercian wineries
are located, we will contribute to the regional development and the Japanese wine
industry, leading to the growth of our business.

Mercian

31.4%

2024

Setting the target

Awareness of Japanese wine

Target Value

Target Year

Latest Achievements(2022)

approach-

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KIRIN INTEGRATED REPORT 2023

About Kirin Group

Value Creation Model
INPUT

Value Creation Model
BUSINESS

Value Creation Model
OUTPUT

Value Creation Model
OUTCOME

CSV Management

Corporate GovernanceRisk Management

Target Value

Target Year

Contents

The Environment
Group Materiality Matrix
Medium items

Theme

Tea
leavesSustainable useof biologicalresources

Paper

Food
waste

Particularly
contribute to
SDG targets

2.3
4.6
15.4

15.4

12.3

CSV Commitment
approach

Our Achievements

We will expand our support for acquiring
Rainforest Alliance certification, which
will lead to the stable procurement of
tea leaves by solving environmental
problems in production areas.

Number of farms supported to obtain
Sri Lanka RA certification

Through the procurement of FSC®
certified paper and other means, wewill work to ensure the sustainability of
raw materials that may otherwise be
destroyed by deforestation.

We will promote the reduction of productdisposal and recycling, which will lead toa reduction in food waste generated byproduction activities.

Usage ratio of FSC-certified paper orrecycled paper for paper containers
and packaging*3

Amount of product waste reduction
rate

Water intensity
Sustainable use of water
resources

6.4

By reducing the amount of water usedin our business activities, we will ensure
the sustainability of water resources byconducting water resource preservation
activities and other measures.
Reduction rate of water use volumes

Company/Department

LatestAchievements(2022)

Kirin Beverage

Farms : 15
Small farms : 5,350

Cumulative total
2022-2024

Farms : 4
Small farms : 9

Kirin Brewery

100%

2024

100%

Mercian

100%

2024

100%

Koiwai Dairy Products

100%

2030

Implementationof switching of 4
products

Kyowa Hakko Bio

100%

2030

80%

Kyowa Kirin

100%

2030

50%

Kirin Holdings
Health Science Business Dept.

➀Aduption of FSCcertificated paper：100%➁Switch to FSC-certified
paper: 4 products➂Switch to non-metallic
packaging materials: 2
products

Cumulative total
2022-2024➀100%➁2 Products➂1 Product

Kirin Brewery

50%(compared to 2015)2024

confirming

Kirin Beverage

50% or more(compared to
2015)

2030

50% or moreachieved

Kirin Brewery

5.6㎥/kl or less2024

5.6㎥/kl or less

Mercian*Fujisawa Plant

3.41㎥/kl or less2024

3.54㎥/kl

LionLess than 2.4kl/kl

2025

3.6kl/kl

Kirin Beverage*Shonan Plant, Shinshu BeverageLess than 2023

2024

1,977,000㎥

Kyowa Hakko Bio-32%(compared to 2015)

2030-51.7%

Kyowa Kirin-40%(compared to 2019)

2030

33%

*3 Paper containers and packaging handled by each operating company, with targets determined by each operating company.
Kirin Beverage will continue to use 100% of FSC-certified paper for paper containers and packaging.
Overseas target companies will check the status of sustainable paper resource procurement and set targets for the future.

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KIRIN INTEGRATED REPORT 2023

Group Materiality
MatrixMedium
items

Theme

Sustainable
recycling ofcontainers andpackaging

Overcoming
climate change

About Kirin Group

Particularly
contribute to
SDG targets

12.4
14.1

7.2
13.1

Value Creation Model
INPUT

Value Creation Model
BUSINESS

Value Creation Model
OUTPUT

Value Creation Model
OUTCOMECSV Commitment

approach

In addition to theuse of recycledmaterials andbiomass, and thedevelopment of
new containers andservices, we will
help improve thesustainability of
the PET resource
cycle by building
recycling systems
and developing
resource recovery
and recycling
infrastructure in theregions where we
operate.

In addition toachieving RE100 at
an early stage andmaking 100% of
the energy used byour company comefrom renewableenergy sources, wewill expand the useof renewable energy
in society and workwith stakeholders
to build a businessmodel that
contributes toa decarbonizedsociety.

Our Achievements

Percentage of plastic
bottle recycled resin
used

Target
Year

50%

2027

8%

Target Value

Kirin Brewery
Kirin Beverage
Mercian

Reduction of one-way
plastic volume
Reduction of PET
volumeMercianPET bottles 93t
Other plastic bottles
34.5t (compared to
2020)

2024

66t
13.2t

Percentage ofcontainers andpackaging materials
that can be reused,recycled, or composted

Lion

100%

2025

99%

Percentage of container
materials that can berecycled

Lion

More than 50%

2030

62%

Kirin Brewery

55%(compared to 2019)30%(compared to 2019)

2030
2024

10%

Kirin Beverage

55%(compared to 2019)17%(compared to 2019)

2030
2024

11%

Mercian

55%(compared to 2019)25%(compared to 2019)

2030
2024

6%

Lion

55%(compared to 2019)35%(compared to 2019)

2030
2024

26%

Kyowa Hakko
Bio

55%(compared to 2019)
32%(compared to 2019)

2030
2024

32%

Kyowa Kirin

55%(compared to 2019)51%(compared to 2019)

2030
2024

42%

Ratio of renewableenergy to electricity
used by the entire Group

Kirin Holdings
CSV strategy
Dept.

100%

2040

27%

GHG (Green House Gas)
emission reduction rate:
Scope 3

Kirin Holdings
CSV strategy
Dept.

30%(compared to 2019)

2030

1%

GHG (Green House Gas)
emission reduction rate:
Scope 1+2

Corporate GovernanceRisk Management

Contents

2023 Strategy
LatestAchievements(2022)

Company/
Department

CSV Management

While social activities are recovering from the effects of
COVID-19, outbreaks of infectious diseases will continue
to be unavoidable. In addition, heightened geopoliticalrisks may cause raw material and fuel prices to soar
and other commodity prices to rise, making thebusiness environment increasingly unpredictable.
Against this backdrop, the Kirin Group will work to growin the Pharmaceutical and Health Science domains andto improve profitability in the Food & Beverages domain
while facing social issues head-on.
The Kirin Group’s growth is supported by fourorganizational capabilities: human resources, ICT,
marketing, in addition to technological capabilities
based on fermentation and biotechnology. In the areaof human capital, which has been attracting increasing
attention in recent years, Kirin Holdings will increase
the number of highly specialized and diverse humancapital and reform the Group’s human capital strategy
to foster an organizational culture that enables growththrough taking on challenges. Under the new strategy,
Kirin Holdings will link investment in human capital toincreased corporate value.
Kirin Holdings will also strengthen human rights
initiatives in its global supply chain and reduce humanrights risks. In addition, Kirin Holdings will promote
initiatives aimed at creating a positive impact on a
global level to address environmental issues that must
be addressed on a global scale.
Strategies by domain

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About Kirin Group

Value Creation Model
INPUT

Value Creation Model
BUSINESS

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OUTPUT

Value Creation Model
OUTCOME

CSV Management

Corporate GovernanceRisk Management

Contents

05 KPIs
Financial indicators*1
ROIC*2
Normalized EPS*

3

FY2024

10%+

CAGR

11%+

*1 Financial indicators are evaluated by excluding the impact of exchange rate fluctuations when overseas subsidiaries are consolidated, etc.
*2 ROIC = Profit after tax before interest / (Average total interest-bearing liabilities at beginning and end of the period + Average total equity at
beginning and end of the period)*3 Normalized EPS = Normalized profit / Average number of shares outstanding during period

Normalized profit = Profit attributable to owners of the Company ± Other operating income and expenses and other items after income taxes

Non-financial indicators
Items

ThemesNon-financial Indicators

Links to Economic Value

Target Level in 2024

Climate Change

Reduction rate of GHG emissions

Reduction of cost increases when introducingcarbon tax with energy
saving effectContainers and Packaging

Percentage of recycled resin used in PET bottles

Profit generation through value creation andstable procurement of PET
raw materials

38% (50% in 2027)

Water resources

Water use intensity at manufacturing sites with high water stress*5

Reduction of production cost and productionrisk due to drought

3.0kL/kL(Under 2.4kL/kL in 2025)

Achievement level in supporting the maintenance of immune function
1. Recognition rate of Lactococcus lactis strain Plasma function in Japan
2. Number of people continuing to take Lactococcus lactis strain Plasma

Increase in revenue and operating profit

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

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

Profit generation by satisfying unmet needsand creating new health value

Not disclosed*4

Employee engagement score

Profit generation through value creation andproductivity improvement

75%

Profit generation through value creation andproductivity improvement

1. 15%
2. 30%

Raise motivation and productivity byimproving working environment

0.95 (0.40 in Japan)

23% (50% in 2030)

Environment

HealthProgress of mid-term healthscience strategy

Organizational Culture
Employees

Diversity

Achievement level in “Increasing diversity” *6
1. Ratio of female managers in Japan
2. Ratio of career hires in Japan

Occupational health and safety

Lost time injury frequency rate*7*4 Specific indicators and target levels are not disclosed for strategic reasons, as they include content related to intellectual property.
*5 Tooheys Brewery, Castlemaine Perkins, James Boag Brewery (LION).
*6 The target group is employees of Kirin Holdings.
*7 Major group companies that have production and logistics functions within the group will be included. Partner companies within the plant premises are also included.

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KIRIN INTEGRATED REPORT 2023

About Kirin Group

Value Creation Model
INPUT

Value Creation Model
BUSINESSKIRIN’ s HISTORYThis section chronicles
the Kirin Group’ s history of challenges
and achievements spanning more than a century.
Over its history of more than a century, Kirin Group has grownfrom a Japan-based brewer to a global enterprise with adiverse range of businesses. Kirin has established itself as
one of the prominent beer brands in Japan and overseas,
and is continuing to expand its brewing business globally byacquiring leading beer brands in Asia and Oceania. The Group
has leveraged its wealth of experience and expertise gained
from the brewing business to diversify into the soft drink
business and other areas of the Food & Beverages Business.
Furthermore, since the 1980s onward, we have made inroads
into the Pharmaceuticals and Health Science Businesses.

1907-1980
Spanning the years from the foundationof Kirin Brewery to the expansionof the Food & Beverages Business
Kirin Brewery was established in 1907, taking over thebusiness of Japan Brewery Company, which had beenfounded in 1885. When Japan began to enjoy soaring
economic growth in the mid-1950s, consumer demand forbeer skyrocketed at an average annual rate of 20.6% from1956 to 1964. Riding on the success of the brewing business,the company began to diversity its business in the Food &Beverages domain, under its long-term management plan
“A Transformation Initiative: Laying the Groundwork forAchieving Consistent Growth” announced in 1975.

Value Creation Model
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Value Creation Model
OUTCOME

CSV Management

Corporate GovernanceRisk Management

Contents

Kirin Group’s Three Business Domains
Food & Beverages

Health Science

Pharmaceuticals

This business domain, which
includes our founding brewing
business, constitutes the
backbone of the Group. Since the1990s onward, we have expanded
our Food & Beverages Business
into Asia, Oceania, and other partsof the world, manufacturing andmarketing products under a broad
range of value-added brands.

Our years of research in the Food
& Beverages domain into naturally
derived materials as well as into
fermentation and cultivation has
led to discoveries of Lactococcus
lactis strain Plasma (LC-Plasma)and other substances proven tobe beneficial to human bodies.
We intend to continue to make thebest use of these assets to evolve
the Health Science Business into a
growth driver for the Group.

We combined our proprietary
fermentation and cultivation
technologies acquired fromthe brewing business withbiotechnologies to launch researchand development of pharmaceuticalproducts in the 1980s. The
Pharmaceuticals Business has
since grown to one of the Group’ s
core businesses, marketing
biomedicines and other products in
the global arena.

KIRIN’ s HISTORY1907 Food

1928 Food1943 Food

Kirin Brewery Co., Ltd. established.

Kirin Lemon introduced.

Kirin Science Institute

Kirin Beer was well received by Japanese
consumers for its authentic German beer
taste, which had been made possible bya brewing process operated by German
engineers using raw materials imported
from Germany. (Kirin Brewery Yokohama
Yamate Plant in its earliest days)

Kirin Lemon , a lemon-flavored carbonated drink,marked our foray into the soft drink business.
It was sold in a translucent glass bottle, which
was unheard of in the beverage industry thosedays, to visually demonstrate our commitment
to never using
artificial coloring
for beverages. Everybottle of Kirin Lemon
was wrapped in
paper when shippedfrom the factory topreserve the qualityof the contents.

Research Institute) established.

(the forerunner of Kirin Central
Kirin Brewery’s research department
history dates back to 1918 when aresearch department was established.
In 1943, this department gained
independence and was renamed theKirin Science Institute.

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About Kirin Group

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INPUT

Value Creation Model
BUSINESS

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OUTPUT

Value Creation Model
OUTCOME

CSV Management

Corporate GovernanceRisk Management

Contents

1907-1980

KIRIN’ s HISTORY
1963 Food1972 Food

Vending Machine Services Co.,
Ltd. (the forerunner of Kirin Beverage Co.,
Ltd.) established.

Kirin Seagram Co., Ltd.

A subsidiary (currently known as Kirin
Beverage) was established, responsible
for selling soft drinks through vending
machines. (Kirin Lemon vending machine)

We launch a whisky business. Kirin
Seagram (currently known as Kirin
Distillery) introduces Robert Brown , thefirst whisky made in Japan.

(the forerunner of Kirin Distillery Co.,

Ltd.) established.

1981-2005
Diversifying into the Pharmaceuticals
and Health Science Businesses
Following two oil crises in the 1970s, it became obvious that theJapanese beer market had reached maturity. Faced with this reality,
we formulated the Long-Term Management Vision in 1981. In this goforward plan, we established the goal of expanding our businesses
into areas related to food & beverages, health, and culture to become
a company that offered customers beer and other comforts of life thatmade their lives more fulfilling and enjoyable. To achieve this goal, we
chose to diversify our business lines―reducing an overdependence
on the brewing business so as to build and maintain a well-balanced
portfolio expected of a financially sound enterprise. Under this vision,
we diversified into the Pharmaceuticals and Health Science Businesses.

1976 Food
Koiwai Dairy Products Co.,
Ltd. established.
We make a foray into the foodbusiness. Koiwai Dairy Products
starts marketing cheese, butter, andother dairy products nationally.

1977 Food
KW Inc. (the forerunner of Coca-Cola
Bottling Company of Northern New

England,Inc.) established.
KW Inc. (currently known as Coca-Cola
Beverages Northeast) starts the CocaCola bottling business in New England,
the United States.

KIRIN’ s HISTORY
1982 Pharma
Research and Development
Division established.
An idea proposed by Kirin
Brewery employees materializes
into a pharmaceutical researchand development project focusedon biotechnologies.

1983 Health Science
A health food project team isformed under Kirin Brewery’s
Business Development Division.
We leverage our wealth of technologies andexpertise accumulated from years of experiencein the brewing and soft drink businesses tomake a foray into the Health Science Businesswith the launch of a project team tasked withusing yeast to develop health food.

1983 Food
Kirin City Co., Ltd. established.
We start a restaurant business withthe opening of Kirin City restaurantsthat serve draft beer from barrels
using a triple-pouring process, which
is a traditional way of pouring German
pilsner beer from the tap into a glass.

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Contents

1981-2005

KIRIN’ s HISTORY
1984 Pharma
Kirin-Amgen, Inc. established
Kirin-Amgen, a joint venture company
established by Kirin and Amgen, Inc., a U.S.
biotech company, starts mass-productionof erythropoietin (EPO), following research
conducted by our R&D Division.
*The joint venture was dissolved in 2017.

1988 Health Science
Supported the establishment of La
Jolla Institute for Immunology(the forerunner of La Jolla Institute for Allergy
and Immunology)
Research on immunity led to Lactococcus lactis
strain Plasma, Lactobacillus paracasei KW3110.

1981-2005

KIRIN’ s HISTORY
2002 Food

Acquires a stake in San MiguelCorp. in the Philippines.
We establish a foothold in thePhilippines in the middle of surging
economic and population growth.

1990 Pharma

1998 Food

Kirin Brewery introduces
ESPO®, an erythropoietin(EPO) medicine effective on
nephrogenic anemia.
The first medicine we introduced―
just eight years after starting
pharmaceutical research in 1982.

Acquires a stake in Lion
Nathan Limited (the forerunner ofLion Pty Limited) in New Zealand.
We acquire a stake in Lion Nathan(current Lion) to gain a foothold in
Oceania.

2006-2015
2002 Health Science
Kirin Brewery’s Fundamental Technology
Research Laboratories, in collaboration with
Koiwai Dairy Products and Showa Women’ s
University Graduate School of Life Sciences,discovers Lactobacillus paracasei KW3110 .,which improves allergy symptoms.
The Kirin Group’ s immunologicalresearch was recognized for its
excellence when the development
and commercialization of
Lactobacillus paracasei KW3110
was awardedthe 2022 Technology
Award for Agricultural Chemistryfrom the Japan Society for
Bioscience, Biotechnology, andAgrochemistry.

Aggressively pursuing M&A
opportunities to become a major
player in the global arena
We unveil the Kirin Group Vision 2015 (KV2015)
long-term management plan in 2006, which outlines
initiatives to achieve quantum-leap growth bybroadening and strengthening our business foundation.
In the Pharmaceuticals Business, Kirin Pharma merges
with Kyowa Hakko Kogyo, a Japanese biotechnology
company, to become Kyowa Hakko Kirin (current
Kyowa Kirin). We also expand our Food & Beverages
Business through mergers and acquisitions―making
the Japanese wine maker Mercian Corporation one of
our consolidated subsidiaries, bolstering our Australianbusiness, and gaining a foothold in Brazil.

2002 Food
Acquired the business rights
of Four Roses .
We acquire the business rights to FourRoses bourbon, born in Kentucky, theUnited States, in 1888.

KIRIN’ s HISTORY
2006 Food
Makes Mercian Corporation a
consolidated subsidiary.
We add a wine business to our alcoholic
beverage business portfolio as part of ourefforts to become an integrated beveragegroup which covers both the alcoholic
beverage and the soft drink businesses.

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2006-2015

KIRIN’ s HISTORY
2007 Pharma

2008 Health Science

Kirin Pharma Co., Ltd.
established.

Kyowa Hakko Bio Co., Ltd.
established.

Kirin Pharma was established as apharmaceutical manufacturing andsales company to take over Kirin
Brewery’s pharmaceutical business.

The biochemical business of Kyowa
Hakko Kogyo is spun off to pursue
greater result by working with Kirin
Group.

2016-2018
Restructuring and revitalizing
Kirin GroupThe fast growth of groupwide net sales comeswith profitability of widely varying degrees among
business units. In addition, Kirin Brewery, one of thecore companies in the Group, struggles as its salesof beer slows. To overcome these challenges, weupdate KV2021, originally announced in 2012, to a
new KV2021 in 2016 and set out to restructure andrevitalize Kirin Group.

2008 Pharma
Kyowa Hakko Kirin Co., Ltd.

(the forerunner of Kyowa Kirin Co., Ltd.)established.
Kyowa Hakko Kogyo and Kirin Pharma
merge to pursue a pharmaceuticals
business based on antibody and otherleading-edge biotechnologies.

2010 Health Science

Lactococcus lactis strain
Plasma discovered.
Kirin Holdings Company and Koiwai
Dairy Products discover a lactic acidbacterium that activates the immune cells
responsible for virus infection defense(later named “LC-Plasma” )2015 Health Science
Kyowa Hakko Bio’s Thai subsidiary,
Thai Kyowa Biotechnologies Co., Ltd.
completes construction of amino acidproduction plant.
In November 2022, this plant also completed
production facilities for HMO (Human Milk
Oligosaccharide) and started commercial production.

KIRIN’ s HISTORY
2016
Formulates corporate
governance policy.
We have since been stepping up ourefforts to enforce robust corporate
governance practices as a basis ofsound corporate management.

2017 Food2017 Health Science

Transfer of Brasil Kirin’s Shares

Launches a new brand iMUSE .

As part of implementing strategic
initiatives outlined in KV2021, we sell
the struggling Brasil Kirin.

We launch a new brand, iMUSE , for productsthat contain our proprietary LC-Plasma.
In 2020 iMUSE -branded products areauthorized, for the first time in the Japanesefood industry, registered as functional
foods with immune support function, whichhelps bolster their sales substantially.

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2019
Kirin Group defines CSV
Purpose.

The completion of strategic initiatives to restructure andrevitalize Kirin Group, including sales of unprofitable businesses
and bolstering profitability across the board, set the stage for a
new round of growth under Kirin Group Vision 2027 (KV2027).
The key objective outlined in KV2027 is to resolve social issues
to achieve sustainable growth and become a global leader
in CSV. In addition to the two core businesses―the Food
& Beverage Business and the Pharmaceuticals Business―
we have been establishing and fostering the Health Science
Business to turn it into another core of the Group.

We define our CSV Purpose as a guiding
principle to achieve sustainable growthand create value together with people
across society.

2019～

KIRIN’ s HISTORY
Make a capital and businessalliance with FANCL
Corporation.
We enter into alliance with FANCL,
which complements our capabilities inthe Health Science domain.

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Evolving to become a global
leader in CSV

2017 Health Science

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2020 Health Science

iMUSE accepts notification as Japan’s first* foods withfunctional claims for immune support function
Kirin Holdings Company accepted a
notification from the Consumer Affairs
Agency that iMUSE was accepted forthe “Foods with Functional Claims for
Immune support function” label under
the Foods with Functional Claims
System.
*Japan’ s first registered brand withthe “Foods with Functional Claims for
Immune support function” label on its
products

2017 Health Science
Kirin Holdings Company establishes the iMUSE Health Science
Factory, a new base for manufacturing lactic acid bacteria raw
materials, and commences production.
In response to the increased demandfor LC-Plasma, Kirin Holdings Company
announced the expansion of thismanufacturing site in 2021, leading to
expanded annual production capacity of
LC-Plasma.

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Message from Top Management

Accelerating the Kirin Group’s Growth
by Refining the Business Portfolio to Create Shared Value
Yoshinori Isozaki
President & CEO
Kirin Holdings Company, Limited

A Decade of CSV Management
Ten years have passed since the Kirin Group adopted
CSV management in January 2013.
Today, CSV is widely accepted by our employees

and has become the Kirin Group’ s compass. However,
initially, it was not easy to gain the understanding of allparties inside and outside the company, and we received
a variety of opinions. We took note of that valuableadvice, but continued to move forward with faith. As aresult, Kirin Group employees are now working together
as one to solve societal challenges, while also viewing

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them as business opportunities that generate returns.
Seeing them in action, I believe that our faith in ourcompass was well placed.
In 2022, we restored our performance to preCOVID profit levels. Since announcing our Kirin Group
Vision 2027 (KV2027) in 2019, our social systems
and business foundations have faced significant
environmental changes, including the COVID-19
pandemic, political upheaval in Myanmar, and Russia’ s
invasion of Ukraine. Despite these challenges, we
maintained our confidence in the direction of our CSV
management policy and continued to address eachissue one by one. This approach enabled us to achievethese results.
Our goal is to become a global leader in CSV,
but this cannot be achieved by setting a numericaltarget alone. While we will set proper goals in line withinternational standards, it’ s akin to the high jump, where
the bar gets raised higher as you go along. Our pursuitof this goal will continue, always responding to society’s
ever-increasing expectations. As a global company, we
recognize that Japan is not the only place where we candemonstrate our worth. Through our CSV management,
which generates both social and economic value, we
aspire to be a company that stands on the global stage
and positively impacts people around the world.

Solving social issues throughfermentation and biotechnology
As previously mentioned, the Kirin Group operates inthree domains: Food & Beverages, Pharmaceuticals, andHealth Science. Although there are many companies
that are larger than us in each of these areas, we believethat by leveraging our foundational core technologies

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of “fermentation and biotechnology” to generate socialand economic value in all three areas, we can establish
ourselves as a unique and distinctive company, creating
new value for society.
The Kirin Group has ventured into various
new businesses, and I myself have been involved inseveral since joining the company. While most of theseventures were eventually discontinued, the ones thathave survived to this day all share a reliance on the Kirin
Group’ s expertise in “fermentation and biotechnology.”
This expertise is based on generations of technology,
knowledge, and unwavering dedication. We areconfident that by enhancing and leveraging this strength,
we can maintain our competitive advantage in all of ourbusinesses.
The Health Science domain newly launched
in KV2027 aligns perfectly with this core technology.
Leveraging our superior fermentation and biotechnology,
we aim to grow our Health Science business andcontribute to solving social issues related to people’ shealth. We believe that this move will enable us toachieve sustainable growth and ensure our existence as

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Strategic issues and directionin the three domains
While the foundation of our business portfolio has been
established, we acknowledge the need to enhance theearning power of each business to achieve our KV2027
goals.
After withdrawing from Myanmar, our mainmarkets in the Food & Beverages domain are now
Japan, Australia, and North America. These markets
are mature and share common issues, so we can learn
from each other’ s successful experiences to promotepremium strategies and improve productivity, thereby
increasing profits. For instance, specific initiatives ofthe premium strategy include craft beer initiatives in thealcoholic beverages business and expanding the productmix in the high value-added Health Science domain witha focus on health in the beverages business. We’ re also
optimizing our sales organization in light of changes inmarket and consumption trends and improving sales

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processes using ICT (information and communication
technology) to improve productivity and enhance ouroperating base.
Our focus in the Pharmaceuticals domain is
to establish a solid global business foundation as a
specialty pharmaceutical company. Our mainstay drug,
Crysvita, has grown to the point where it can now be
considered a blockbuster, with a sales revenue targetof 150 billion yen by 2023. We’ re actively exploring
ways to establish a global supply system suitable
for the expanding scale of our business while also
expanding our next-generation pipeline. For instance,
we’ re currently co-developing KHK4083 (generic name:Rocatinlimab) for atopic dermatitis with Amgen andplanning to proceed with Phase 3 trials on a large scale.
Additionally, we’ re promoting the development of
KHK4951 (generic name: tivozanib), a new pipeline drugfor the treatment of ocular vascular disorders (exudative
age-related macular degeneration).
In the Health Science domain, we’ re committed
to solving people’ s health issues by delivering specialty
materials that contribute to good health, including
Lactococcus lactis strain Plasma (LC-Plasma), to awider audience. Our target markets include Japan,
Asia-Pacific, where we also run businesses related to
the Food & Beverages domain, and North America, thelargest market. LC-Plasma, for which we’ re making
aggressive marketing investments, is performing
well with a sales revenue target of 50 billion yen by2027. We’ re also actively creating and expanding theimmune market by promoting alliances with partnercompanies that share our ideals. For example, we
supply the LC-Plasma ingredient (postbiotic) for CocaCola (Japan) Company, Limited products (not CocaCola worldwide). Moreover, we’ re establishing a global

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manufacturing and sales structure for Kyowa Hakko
Bio’s specialty ingredients, such as Citicoline*1 andhuman milk oligosaccharides (HMOs*2), to strengthen
our foundation for growth in the Health Science domain.
Our stated goals of 200 billion yen in sales revenue and
15% normalized operating profit margin by 2027 remainunchanged.
*1*2

An ingredient found in the body that maintains the cell
membranes of the brain and nerve cells, and has been used
for many years around the world in medicines for brain
diseases and health foods that support the improvement ofcognitive functions. In Japan, it is currently classified as apharmaceutical product.
A generic term for oligosaccharides contained in breast
milk. More than 200 kinds are contained in breast milk, andthe results of research contributing to immunity and brain
function, among others, have been reported.

Looking back on the past, the Pharmaceuticals
business was launched in the 1980s in anticipation ofJapan’ s declining birthrate and aging population in the
future. However, the decision faced opposition at thetime from many who believed that it would take too long
to become profitable. While it did take a full 10 years to

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achieve profitability, the Pharmaceuticals business is
now the most profitable venture in the Kirin Group. If weonly think about the next 5 to 10 years, it may be betterto focus on growing existing businesses. However,thinking about sustainable growth and increased
corporate value over the next 20 to 30 years, I believethat we must do our utmost to ensure that the Health
Science business flourishes and becomes a “third
pillar” of our business.

promoting DX but also from the field. To build a solid
track record in each business area, we are committed
to establishing an SCM (supply change management)
system that achieves both efficiency and sustainability
while maintaining a strong focus on quality.

Enhancing the Kirin Group’ s ability
to execute and show results

Human capital is indispensable for advancing
these activities. In addition to actively acquiring
specialized human capital from outside the company,
we will also focus on the development of internal humancapital who are well-versed in each function, leading toan increased number of highly specialized and diverse
personnel, and ultimately to the creation of innovation.
Above all, we will create an organization culture in which
each and every employee can excel through challenges,
thereby enhancing our ability to execute.
We will continue striving to meet the
expectations of our shareholders and other stakeholders
and earn their further trust. We recognize that to doso, we must demonstrate our commitment throughsolid achievements. The Kirin Group is confident that
its CSV management is right and will continue to move
forward with it in 2023. By solving social issues andsimultaneously reinvesting the cash generated byeconomic growth into further group growth, we will
create a cycle that maximizes corporate value not onlyin the short term but also in the medium to long term.
We are committed to achieving both sustainable growth
as a company while contributing to the sustainability ofsociety.
We look forward to your continued support.

To ensure future growth, strengthening theorganizational capabilities of the Kirin Group isessential. Among the four organizational capabilities
for innovation, we have combined our R&D expertise in
the Food & Beverages and Pharmaceuticals domains
with intellectual property strategies in health scienceto establish a new Institute of Health Sciences withthe aim of creating further value. In marketing, weare working to support our operating companies byenhancing our central marketing function for the
purpose of developing new marketing capabilities
and human resources and utilizing know-how acrossthe Group, and our efforts in this area are alreadystarting to bear fruit. In addition, Group employees are
increasingly aware of the importance of promoting ICT
usage and DX (digital transformation). We are working
on business transformation using technology and datafrom the three perspectives of transforming the value
chain of existing businesses, transforming corporate
functions, and developing new business models, andwe are increasingly receiving ideas for streamlining andimproving operations from not only the departments

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Diversity and inclusion,
culture for innovation

Core technology thatcreates accurate value:
A competitive strategy
combining R&D expertiseand IP strategies

Consumer centric marketing

ICT accelerating value creation

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Diversity and inclusion, culture for innovation
Achieving sustainable growth and value
creation through innovation
driven by high expertise and diversity

Junko Tsuboi
Senior Executive Officer, Human Resources & General Affairs
Kirin Holdings Company, Limited
Junko Tsuboi took the position of General Manager in the
Corporate Communication Dept. of Kirin Beverage in 2005.
From 2010 through 2012, she managed Yokohama Akarenga
as the President and CEO. From 2014 she assumed position
as General Manager at the Strategic Branding Dept., CSV
Division of Kirin Company Ltd.. Since 2019 she has beena Senior Executive Officer and General Manager of theStrategic Branding Dept. of Kirin Holdings. In April 2022, shebecame in charge of Human Resources & General Affairs of
the Kirin Group. (She has also been an Outside Director of
FANCL Corporation from 2020 (concurring)).

The environment surrounding human capital strategies
is changing significantly, both in and out of the company,
and the Kirin Group’ s human capital strategy is also
undergoing a major transition. Coupled with the changing
living environment and the diversifying individual values,
the labor market environment, including working styles,
is also changing dramatically. Furthermore, the kind of
human capital our Group desires for the implementationof our management strategy is changing due to thetransformation of our business portfolio. The need totransform businesses and challenge new domains istrue for not only the Health Science domain, which is our
growth driver, but also for the existing businesses in the
Food & Beverage and Pharmaceutical domains. It is also
necessary for all Group members to become agents ofchange toward ambidextrous management. Once again,
by placing importance on human capital as the sourceof value creation and our competitive advantage andmaximizing their value, our Group will strengthen ourbusinesses and realize the Long-Term Management
Vision, Kirin Group Vision 2027 (KV2027); our Group’ s
sustainable growth; and value creation.

Kirin Group’ s Basic Philosophy on
Human Capital Management
At the foundation of the Kirin Group’ s human capital
strategy, is our Basic Philosophy on Human CapitalManagement. While the human capital strategy isundergoing a significant transformation, our Basic
Philosophy on Human Capital Management, “Respectfor Humanity,” will remain the same. Our belief in valuing
the infinite possibilities of humans also aligns with
Kirin Brewery Company, Limited’ s brewing philosophy,“Reverence for Life.” With boundless potential, each
employee can grow through work by challenging
themselves to create new value and actively working, andwe can provide a continuously expanding environment.
Basic philosophy of human capital = “Respect for humanity”
Create a place where each and every employee can fully develop and grow withboundless potential, respecting their efforts and individuality (human nature),
and proactively create a place where they can work to their fullest.

Employee
Employee Commitment
Be a self reliant individual
Self reliant career development
Proactive job design
Self reliance as a member of society

Employees andthe Company are"Equal partners"
Equal
relationshipthrough work

Company
Company Commitments
Respect and support
the self reliant individuals
Trainning to become a professional worker
Clariﬁcation of personal mission
Fair treatment

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The goal of the Kirin Group’ s uniquehuman capital strategy: "a company
where human capital grows and wins
through human capital"
By placing importance on human capital as the sourceof value creation and our competitive advantage andinvesting in them, we aim to become a company where
human capital grows and wins through human capital.
At the Kirin Group, we believe that our management
strategies define the direction we take in terms of ourhuman capital strategies. At the same time, we also
believe that our human capital capabilities constitute animportant element when it comes to the formulation ofmanagement strategies and serve to expand the potentialof our management strategies. As a source of competitive
advantage, we will go about developing human capitalthat are characterized by diversity and expertise while atthe same time having said talent accumulate a diverse
array of business experience through our unique businessportfolio (which spans from the Food & Beverages domain
to the Health Science domain and Pharmaceuticals
domain) and help them improve their expertise when it
comes to marketing, R&D, and ICT.
Furthermore, we will go about creating an

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environment which fosters an organizational culturethat embraces diversity and supports the nurturingof people who are motivated to grow. Efforts to thatend will include hiring external human resources andpeople with disabilities and promoting the active
participation of women in the workplace. By doing this,we will increase the motivation of each individual whenit comes to taking on challenges and subsequently
increase opportunities to spur innovation.
This is how the emergence of innovation throughthe combination of human capital and the developmentof human capital in the context of a diverse businessportfolio, is something which can be described asa human capital strategy that is unique to the Kirin
Group. By improving the value of human capital, we
will better our organizational capabilities, strengthen
our businesses, and realize our business plan and thesustainable growth and value creation of the Group.

Recognizing human capital strategy
issues from the perspective of Groupmanagement issues
The short-term goals of the human capital strategy are
to strengthen organizational capabilities and improve2024 2024 2025 2025 2026 2026 2027 2027 2028 2028 2029 2029 2030 2030

Management
Management
Strategy
Strategy

Human
Human
CapitalCapitalStrategy
Strategy

Short ShortTerm Term

KirinKirin
Group
Group
VisionVision20272027

Strategies
Strategies
to achieveto achieve
KV2027
KV2027
HealthHealthSciences,
Sciences,
GlobalGlobal
Technology,
Technology,
MarketingMarketingand ICTand ICT

Mid-toMid-to Creating
Creating
a frameworka frameworkfor sustainable
for sustainablevaluevalue
creationcreationLong-Term
Long-Termand corporate
and corporate
valuevalueenhancement
enhancement(10 years ahead)(10 years ahead)

Improving
Improving
the effectivenessthe effectivenessof Strategyof Strategy
Execution
Execution

Management
Management
Strategy
Strategy
to achieveto achieve
HumanHuman
CapitalCapital
Strategy
StrategyManagement
Management
Strategy
Strategy

Human
Human
CapitalCapitalStrategy
Strategy

HumanHuman
CapitalCapital
capability
capability
Expandingin the organizationin the organization
forms forms Expanding
the possibilities
the management
the management
strategy
strategy the possibilitiesof theofstrategy
the strategy

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the effectiveness of strategy execution in line withthe transformation of the business portfolio. In themedium-term, we will improve future corporate value by
producing specialized and diverse human resources. At
this time, we are focused on the five following issues:➀ Strengthen organizational capabilities in line with thebusiness portfolio transformation (Health Sciences, New

Businesses, etc.)➁ Human capital management focused on expertise anddiversity is required when looking ahead in times of anuncertain future➂ Create a culture that supports and strengthens humancapital who can accomplish and innovate = capability to
execute the strategy to achieve the advanced strategies➃ Create job satisfaction in response to changes in thelabor market and individual values

Strategic evolution through communication with thestakeholders, with an opportunity on attention on humancapital➄ Strategic evolution through communication with thestakeholders, with an opportunity on attention on humancapitalExpertise and diversity are the keys
to accelerating initiatives to realize
sustainable growth and improved
value from both the aspects of humancapital and the organization
The keys to implementing the human capital strategy
are expertise and diversity. In the VUCA (Volatility,
Uncertainty, Complexity, and Ambiguity) generation,
it is necessary to better the expertise and diversity ofboth human capital and the organization to accelerateinnovation. In doing this, it is important to look at

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everyone’ s motivation to grow and the collaboration andco-creation of diverse human capital.
Regarding human capital, by sympathizing with
the Group Corporate Philosophy and Purpose, which
are important to the Kirin Group, and promoting Willdriven self-reliant growth, which will lead to their own
growth and contribute to the Group, they will invoke
their motivation to grow through self-reliant learning andchallenging and will raise their expertise. Additionally, by
refining diverse perspectives and values through crossbusiness secondments based on expertise, opportunities
to challenge advanced and wide-spread issues, etc., wewill enhance our ability to strengthen our human capitalas an organization.
Furthermore, we will take advantage of our uniquebusiness portfolio, which is expanding globally in a wide
range of domains from the Food & Beverages domain to
the Health Science and Pharmaceuticals domains, to raise
the mobility of diverse human capital with cross-businessexpertise. We will also provide more opportunities forcollaboration and co-creation among diverse humancapital to enhance expertise and diversity as anorganization that is more than just its individuals andteams. By doing all of the above, we aim to acquire theorganizational capabilities and to foster an organizational
culture that allows us to continue innovating.
In this way, the story that connects theenhancement of the motivation of individuals, who
continue to autonomously learn and challengethemselves, as well as the collaboration and co-creationof diverse human resources to innovation, will bereflected in our future efforts to create challenges uniqueto the Kirin Group.

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Overview of the Kirin Group’ s human capital strategy

HealthScience
Sustainable growth and improved corporate value
A company where human capital grows and wins through human capitalStrengthen
human capital

Expertise
Diversity

Fosteringan organizational
cultureFood&
Beverage

R&D,
Quality Assurance,
Corporate Planning,
Human Resources,
Accounting,
Legal,
Etc.

Strengthen Human
Capital throughKirin Group’s uniquebusiness portfolio

Pharmaceuticals

Basic Philosophy on Human Capital Management = Respect for Humanity

Important points of the human capital strategy
Strengthening of human capital

Fostering an organizational culture

In aim of sustainable business growth, the Group will pursue
the type of human capital management that facilities thedevelopment of human capital who satisfy our requirements
in terms of both expertise and diversity and excel in making
decisions, adapting to changes, and creating ideas.

The Group will foster an environment/culture that helps
human capital with diverse values and expertise to grow by
taking on new challenges as well as attracts such humancapital.

Initiative examples:

Initiative examples:

The Group will transition to function-centered talent management so as todevelop specialized talent conducive to executing the Group’s strategies(recruitment, development, and assignment).
The Group will identify human resources who have been successful on afunctional basis and build a candidate pool of top management members
including young employees. Top management and the People & Culture
Department will work together to foster such candidates based on thecriteria required.
The Group will establish an environment that supports employees’ growth
based on their self-reliant career development (by increasing opportunities
for employees to apply for new positions offered via an in-house recruitment
system, initiatives to enhance the support for fostering leadership
candidates, etc.) and accelerate our personnel development cycle whichhelps employees to produce outcomes and growth through businessexperience to improve the support of leaders and growth started fromautonomous career formation.

In order to transform into an organizational culture that supports andstrengthens human capital who can accomplish and innovate, diverse
human resources will pool together their wisdom to work toward our goal,
and we will transform into an organization that is valued for taking onchallenges and the results of those challenges by practicing leadership roles(target achievement and human capital training) at a high level.
To build an environment where diverse human capital transform theirdifferences into strengths and it feels easy to take on new challenges, theGroup will make a step forward from “Diversity & Inclusion” to “Diversity,
Equity & Inclusion.”With the aim of building an organizational culture where each and every oneof our employees can feel they have grown (Career realization, community
connections, contributions to the company) by working with the Kirin Group,
the Group will intensify our efforts to forge an empathy among our
employees to the Group’s Corporate Philosophy and Purpose, as well as asense of attachment to and pride in the organization.

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ExampleInvoke motivation to grow and provide
opportunities to co-create with diverse
human capital
We are creating opportunities for employees to talk with
top management to invoke everyone’ s motivation to growin aim of becoming a company where human capitalgrows and wins through human capital. Additionally,
we are making efforts to provide opportunities for our

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sparked something inside of and motivated them. We willcontinue to host such events to discuss about what ourGroup believes is important and our vision.
*The event was held three times in FY2022. Each event isrestricted to 1,000 employees and pre-registration is required.

Contents“Conversations with the Kirin
Group’ s Top Leaders”
An event aimed to provide a place tocommunicate with Group employees

We aim to develop individuals’ self-reliant careers anddiversity of the organization and individual through crossboundary learning. Without limiting ourselves to the

Dialogue to promote the Group Corporate

new perspectives and values through connections withWe are promoting communication among employees andexecutives through sharing messages from the executives
and roundtable meetings so Group employees and top
management can come together and work as one torealize our Group’ s vision.
As part of this initiative, we are hosting“Conversations with the Kirin Group’ s Top Leaders,” anonline event in which Kirin Holdings Company, Limited’ s
executives discuss and communicate with the employees.
By doing this, we have created a place to exchange ideas
on Group values, the meaning of diversity in business, CSV
management, and more, and these events are attended bynumerous employees from various portfolio companies
and overseas, with the help of simultaneous interpretation.
On the day of the event, directly answering
questions and comments received on zoom in addition
to the pre-gathered questions brought the participants
closer together. We have also received comments saying
they feel closer to management and that the events have

Corporate GovernanceRisk Management

Achieving diversity of the organization andself through cross-boundary learning

Group’ s diverse human capital to co-create.

Philosophy

CSV Management

experiences and values of only our company, we will gain
the community. Furthermore, by bringing in human capitalwith differing values, our organization will become more

An online event in where the Kirin Group’ s executives
discuss the Group’ s vision

diverse.
Specifically, in 2019 we started the Work-abroad
program, and in 2020 we lifted the ban on side jobs andstarted to accept people to work side jobs with us (105
employees currently hold side jobs).*

The Work-abroad program,a cross-boundary learning initiative

In 2022 and 2023, we have been participating in
the Consortium for Career Ownership and the Future ofWork, a mutual side job initiative between companies.
Additionally, we are participating in the Consortium for
Human Capital Management, established in August 2022,
and, with the support of the Ministry of Economy, Tradeand Industry, promoting the sustainable value creation ofJapanese companies.
*The number of approved side jobs between July 2020 and
December 2022 (includes employees from Kirin Holdings;
Kirin Brewery; Kirin Beverage Company, Limited; and Mercian
Corporation)

Providing early training of human capital tosupport CSV management by dispatching young
employees who volunteered themselves to nonprofit organizations, etc., for first-hand experience intackling social issues

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Human capital disclosure index
Viewed from Group Management
Issues Recognition of Human
Capital Strategy Issues

future3Create a culture that supports andstrengthens human capital who can
accomplish and innovate = capability to
execute the strategy to achieve theadvanced strategies

Discover and foster groupmanagement human capital who
will be responsible for future
management
Improvement of leader support andpromotion of Will-driven self reliant
growth and career development(Talent management on a function basis & exchanges between
the three businesses)

Discover and foster group managementhuman capital(Pool of next-generation talent)

Pride and attachment to theorganization, understanding toward
the company philosophy andpurpose(Understanding and attachment toward the corporate philosophy
and purpose, each and every individual’ s motivation to growthrough self-reliant learning and challenging)Number of individuals taking part incross-boundary learning(People with side jobs, secondments outside the Group, andcross-industry training participants)

Indicators of the embodiment of the corporate
philosophy and purpose(KIRIN Group Award applicants)

Defense value

Diversity, Equity & Inclusion thattransform the differences intostrength

Strategic evolution through communication
on attention on human capitalComparable

Development of human capitalwith both expertise and diversity

Create challenges uniqueto the Kirin Group

Organizational Improvement

Create job satisfaction In response to

5 with the stakeholders, with an opportunity

Uniqueness*Comming soon
Evolving into a cultureof challenge and commitment

4 changes in the labor market and Individual
valuesDisclosure indicators

Value improvement

Human capital management focused on
expertise and diversity is required when

2 looking ahead in times of an uncertain

Improvement of professional skills
required to execute the strategy

Human Capital Improvement

1

Strengthen organizational capabilities In
line with the business portfollotransformation(Health Sciences, New Businesses, etc.)

Key Initiatives for Human Capital Strategy

Employee engagement score
Female management ratio
Percentage of mid-career hires
Turnover rate
Reinstatement rate after maternity /childcare leave
Rate of male employees
taking paternity leave
Gender wage difference
Average length of service
Labor practices
Number of complaints resolved
around labor practices and human rights
Percentage of employees coveredby collective bargaining agreements (%)
Lost Time Incident Rate (LTIR)
Employee fatalities due
to accidents at work
Attendance rate of human rights training*Plans to strengthen diversity, humanrights & safety, and compliance going
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Indicator

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Supplementary information

Development of human capital with both expertise and diversity➀ Talent management on a function basis(Building a human capital development
system)➁ Number of participants in the exchanges between the Food & Beverages, Health
Science, and Pharmaceuticals domains
Uniqueness➀ Organize the desired human resource requirements by function and the training process in aim of improving
expertise➁ Appoint human resources so specialized human resources can gain diverse experiences within the Kirin Group

Discover and foster group management human capital

Create a database (talent pool) of future Group management human resources to grasp the sufficiency of humanresources

Create challenges unique to the Kirin Group *Starting soon

Set indicators for understanding and attachment toward the Group’ s Corporate Philosophy and Purpose and eachand every individual’ s motivation to continue to grow through autonomous learning and challenging

Number of individuals taking part in cross-boundary learning

Set the number of people who can have side jobs and be full-time workers as well as the number of participants
allowed to partake in cross-industry training to enhance the organization’ s and individuals’ expertise and diversity

Indicators of the embodiment of the corporate philosophy and purpose

The number of Kirin Group Award applicants is set as the number of people who embody the Kirin Group’ s vision*Human capital figures to be disclosed will be set at a later date
*ESG data reference: https://www.kirinholdings.com/en/investors/esg/esg/*1 Referred to as the “Number of grievances about labor practices or human rights impacts filed, addressed, and resolved through formal grievance mechanisms” in the ESG data

Indicator

Scope and supplementation

Employee engagement score (%)

70%

The Kirin Group

Female management ratio (%)

10.6%

Kirin Holding’ s original hires

27.3%

Kirin Holding’ s original hires

73%

Kirin Holding’ s original hires

Reinstatement rate after maternity/ childcare leave (%)

93.3%

The Kirin Group

Average length of service (years/employee)

16.2

Domestic Group companies

Turnover rate (%)

10.6%

Domestic Group companies

Lost time injury rate (LTIR) (number/million hours)

1.00

The Kirin Group

Average number of actual hours worked per year

Confirming

The Kirin Group

Percentage of mid-career hires (%)
Gender wage difference (%)
Percentage of male employees taking paternity leave (%)

Comparability

2022 results➀ All employees
70.5%➁ Full-time employees 71.2% Kirin Holding’ s original hires➂ Non-regular workers 44.9%

Employee fatalities due to accidents at work (people)

0

The Kirin Group

Number of complaints resolved around Labor Practices and Human Rights*1

98

The Kirin Group

89.5%

The Kirin Group

53.1%

The Kirin Group

Attendance rate of human rights training（%）

Percentage of employees covered by collective bargaining agreements (%)

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Core technology that creates accurate value: A competitive strategy
combining R&D expertise and IP strategies
At the Kirin Group, “Core technology that creates
accurate value” is one of our organizational strengththat supports our innovation. In the coordination
with business, research and development (R&D), andintellectual property (IP), we will make our competitive
advantage and contribute to our sustainable growth.

R&D based on fermentation andbiotechnology
We at the Kirin Group have developed technologicalcapabilities and expanded our businesses, ranging fromthe Food and Beverages domain to the Pharmaceuticals
domain, with fermentation and biotechnology as our
foundation. In the Health Science domain, we have used
the brewing technology and knowledge of raw material
processing cultivated in the beer brewing businessto draw out the health benefits of microorganisms
and plants and create new products. We developed
iMuse , a brand of soft drinks and supplements infusedwith Lactococcus lactis strain Plasma (LC-Plasma),and our focus on the functionality of hops led to thedevelopment of KIRIN KARADA FREE, an alcoholfree, beer-flavored beverage, and other foods withfunctional claims. Furthermore, Kyowa Hakko Bio isusing fermentation technology that uses the power ofmicroorganisms to mass-produce functional materials,
including specialty materials such as Citicoline*1
and human milk oligosaccharide*2 (HMO), andexpanding overseas as a B2B business. Kyowa Kirin’ sdevelopment of their proprietary technologies, suchas POTELLIGENT® and human antibody production
technologies that produce therapeutic antibodies, has
led to creating business through the creation of global
products Crysvita and Poteligeo.
We are investing R&D resources in priority
domains based on the Group Materiality Matrix (GMM),
which outlines key issues that must be addressed inorder to exist sustainably and develop together withsociety. In 2022, the entire Group’ s R&D expenses
increased approximately 20%, but they increased
approximately 30% when comparing only the Food &Beverages and Health Science domains, compared to2016 when we were focused on the domestic alcoholicand non-alcoholic beverage businesses. Going forward,
we will continue to invest R&D resources in the areas ofhealth science and the environment, two areas in which
consumers and society have high expectations forscientific evidence.
*1 A naturally occurring substance in the body that helps
maintain cell membranes in brain and nerve cells. It is usedaround the world to treat brain diseases and in health foods
that support cognitive function*2 Oligosaccharides found in human breast milk. There are over
200 varieties in human breast milk, and studies have shown
they contribute to immunity, brain function, and more

Packaging

Engineering

Developmentof eco-friendly containers

Building efficient
production facilities

Raw material
research
Extraction and breedingof plant-derived materials

Filingandwrapping

Beer
productionMassproduction

Brewing

Research on
fermentationand culture
Harness the power of nature
to produce useful substances

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An R&D system that improvescommercialization successIn the Food & Beverages and Health Science
domains, basic research and applied research forcommercialization are being performed at the Kirin
Holdings’ Kirin Central Research Institute, Institutefor Future Beverages, and Institute for Packaging
Innovation. On the other hand, at each operatingcompany’ s or division’ s research institute, R&D directly
connected to business, such as product developmentthat makes use of the technologies born there, are being
performed. Additionally, in the Pharmaceuticals domain,
most R&D activities are handled by Kyowa Kirin, who is
promoting collaborative efforts with Kirin Holding’s Kirin
Central Research Institute in an effort to provide valuethat is not limited to pharmaceuticals.
Regarding the Health Science domain, the Instituteof Health Sciences was established in April 2023. Part ofthe short-term and medium- to long-term developments

Basic research
Applied research

Product andbusiness development
Production technology
development

Value Creation Model
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that were previously being handled by the Kirin Central
Research Institute were combined with the R&D functionsof the Health Science Business Department and are now
being handled directly by the Health Science Business
Division. By newly establishing the institute responsible
for the health materials in the process of businessdevelopment (LC-Plasma, HMOs, Citicoline, etc.), we canperform functional development that is more closely
linked to marketing activities, create functional productswith more speed, and enhance our ability to implementbusiness strategies. Additionally, the Kirin Central
Research Institute will focus on basic research forcreating new value for the future. It is precisely because
the development of functional materials takes time fromthe start of R&D to product launch that the Institute of
Health Sciences, which coordinates marketing and R&D
strategies and works closely with the business, and theforward-looking Kirin Central Research Institute will work
together to continuously create new functional products
and services.

Food & Beverages domain

Health Science domain

Pharmaceuticals domain

Alcoholic & non-alcoholic beverages

Foods with functional claims,
supplements

Pharmaceuticals

Kirin Holdings
Kirin Central Research InstituteKyowa Kirin
R&D Division

Kirin Holdings
Institute for Future Beverages
Kirin Holdings
Institute for Packaging Innovation
Kirin Brewery
Technology Department /Laboratory for New Product Development
Kirin Beverage
Technology Development Department /Laboratory for New Product Department
MercianProduct Development Department /Product Development Group
OthersKirin Holdings
Health Science Business Division
Institute of Health Sciences
Kyowa Hakko Bio
Technical Research Laboratory

Kyowa Kirin
Bio Process Research andDevelopment Laboratories
Kyowa Kirin
CMC R&D Center

CSV Management

Corporate GovernanceRisk Management

Contents

IP strategy compatible withthe characteristics ofthe Group businessIn coordination with our Group’ s R&D activities, we
promote IP activities by Kirin Holdings’ Intellectual
Property Strategy Department in the Food & Beverages
domain and by Kirin Holdings’ and FANCL Corporation’ s
IP Departments in the Health Science domain, withbusiness and R&D, respectively. IP activities in the
Pharmaceuticals domain are promoted by Kyowa Kirin’s
IP Department.
Each domain requires IP activities that matchits business characteristics and markets. In the Food
& Beverages domain, we are working to maintain alevel of freedom in business and development throughmultifaceted production of our various IP rights, suchas production technology, product composition, andpackaging design. In the Health Science domain, we
are working to realize market expansion and businessgrowth through acquiring and utilizing intellectual
property consisting of primarily patent rights related tohealth functions of materials, production technology,
and product composition. The growth of the LCPlasma business, which is currently the most developed
business of the Health Science domain, could be said tobe due to the coordination of the business, R&D, and IP
departments.

Human capital supportingthe competitive advantage
Our Group achieves sustainable growth by implementing
a competitive strategy that combines our R&D
capabilities and our ability to commercialize the value

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ExampleCorporate GovernanceRisk Management

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Kazuki Chujo

The strategic process of filing for and obtaining
patents related to LC-Plasma

Patent Attorney
Intellectual Property Strategy Department,
Research & Development Division
Kirin Holdings Company, Limited

Kirin Holdings’ research on lactic acid bacteria started as
foundation research in the 2000’ s. In 2011, we presented
findings on the effects of LC-Plasma on plasmacytoid
dendritic cells (pDC) at a meeting of the JapaneseSociety for Virology and filed for a basic patent.*3 Productdevelopment began in 2012, but there have so far been
three turning points related to IP utilization in the productlife cycle of the LC-Plasma business.

Ikuko Hyouzawa
Patent Attorney
Intellectual Property Strategy Department,
Research & Development Division
Kirin Holdings Company, Limited*3 Patents related to technologies, etc. that must be used
to implement aparticular product or service. Received
the Imperial Invention Prize at the FY2023 National
Commendation for Invention for a basic patent on LCPlasma(see p. 37).

Year

Basic patents (patent claims)〇(： Filed●： Registered)

we have created with our IP strategy. The reason for ourcompetitive advantage is our human capital. Particularly
when it comes to foundation research, it is importantto have highly specialized human capital, and there
are 224 employees with doctorates in our Group (asof 2022). In the IP departments, we are improving theGroup’ s IP literacy by promoting the hiring and trainingof human capital who are specialists in IP while alsoenhancing company education and a training system
to acquire the skills required for promoting IP activities.
An example of this is assigning human capital who
gained experiences in production and quality assurance
at Kyowa Hakko Bio to the Kirin Central ResearchInstitute or other locations. By periodically rotating ourpeople between operating companies and divisions andinvolving those who understand the business in R&D
aimed at commercialization in the research institutes
and IP departments, we are creating a system inwhich it is easier to achieve commercialization in thevarious domains, ranging from Food & Beverages to
Pharmaceuticals.
Going forward, we will continue contributing to
the growth of the Group by training and hiring with afocus on expertise and assigning human capital who
understand the business.

Value Creation Model
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2011

2016

Inventions of use limited to pharmaceuticals and cosmetics(not yet approved for food)2021

Examination guidelines revisions approved inventions of use for food and beverages (April 2016)

Patent A

August 2020
Japan’s ﬁrst beveragewith immune function claims

Interferon production inducer,
immunopotentiaging agent

Patent A-1

Division

Food composition

Food compositions
for inducing interferon production

Patent A-2

Division

Food composition

Food compositions
for immune activation

Labeling System for Foods
with Health Claims

Activities to realize food and beverage products with immune function claims
Functional claims labeling system for foods and beverages (April 2015)
Labeling System for Foods with Nutrient Function Claims (April 2001–) … Limited to speciﬁed nutrients

Labeling System for Foods for Speciﬁed Health Uses (July 1991–) … Displayed under the license and approval of the Ministry of Healthy, Labour and Welfare

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INPUT1) Primary phase: Obtaining use patents
related to food and beverage uses in
conjunction with activities to obtainfunctional claims
The labeling System for Foods with Functional Claims
began in 2015, and inventions of use in food andbeverages*4 were approved the following year. We took
this change in the environment as an opportunity andtook on the challenge of obtaining immune function
claims, which required high expertise that includes a
deep understanding of research content, familiarity withlaws and regulations, and an understanding of trends.
As a result of the coordination of the business, quality
assurance, R&D, and IP departments, we were able torealize the immune function claims of LC-Plasma, which
would become the key to our business’ expansion, and we
successfully obtained a basic patent.
*4 Due to the revision of the Examination Guidelines for Patentand Utility Model in April 2016, inventions of use that werepreviously limited to pharmaceuticals and cosmetics, were
now approved for food and beverages.

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2) Growth phase 1: Obtaining thenecessary IP from analysis
In 2020, during a time when people’ s interest in immune
function began to grow, the notification of functional
claims for immunity was accepted by the Consumer
Affairs Agency and we expanded our LC-Plasma series
product lineup. The IP departments, based on our futurebusiness plan, shared the IP we should acquire withbusiness and R&D departments. We worked to secure astable business foundation by collaboratively filing andobtaining the necessary IP in Japan and overseas.

3) Growth phase 2: Promoting an open
strategy and expanding the businessoverseas
Our partner companies in Japan and overseas have been
selling LC-Plasma series products, which claim immune
care functions, since 2021. Prior to this initiative, we
strategically and quickly built a cross-departmental system

Organize licensing terms and conditions
License basic patents (inventions of use)
and trademarks to other companies

Filed for the necessary IP
for each product category

Utilization of LC-Plasma-related IP
Protection of food compositions in eachproduct category
Protection of the manufacturing process
Protection of labelingof function claims related to immune care

Protection of the LC-Plasma brand

Value Creation Model
OUTCOME

Patent B

trademarks, etc.

Patent A
Supplements

Basic Patent (Invention of use)

Non-alcoholic
beverages

YogurtCorporate GovernanceRisk Management

Patent analysis of immune-related lactic
acid bacteria patents
Using the patent analysis tool PatentSight®, we analyzed
the patents related to immune-related lactic acid bacteria
technology of other Japanese food and beveragecompanies. The graph on the left reveals that for 10
years since 2012 Kirin’ s Patent Asset Index (PAI) andTechnology Relevance (TR) have risen every year andcloser to the scale of other companies that are ahead ofLicensed
to eight companies

External
partner companies
Food, etc.

Trademark B
Trademark A

Contents

and proceeded with a license based on the basic patents.
When selling the LC-Plasma bacterial cell overseas, we
actively publish research papers on LC-Plasma, protect
it with patent rights, and promote its functional aspects
in order to differentiate it from similar materials sold byother companies. Furthermore, the business, legal, andIP departments work together to build a cooperative
system in concluding contracts with partner companies.
As a result, we contribute to not only the promotion of ourbusiness but also to market expansion.

Partner company products have expanded
to a total of 44* products*Illustration of its utilization in Japan

Licensebasic patents,

The Kirin GroupCSV Management

Expand lineup and the immunity market
Contribute to the revenue of our Group and external partners*The number of products for sale or set to go on sale as of the end of March 2023. At the same point in time, we had also licensed basic patents for 44 products to 8 companies.

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us in the development of lactic acid bacteria. Although
we entered the lactic acid bacteria field as a latecomer,
we believe that the results reflect our accumulation ofresearch activities and steady acquisition and utilization ofIP, The graph on the right reveals that our LC-Plasma basic
patent’ s TR is rising sustainably, and that our basic patentcurrently attracts higher technical attention than the lactic
acid bacteria patents of competing products by comparing
our TR to those of other companies.
Based on these results, if we continue to invest in IP
in preparation for future business crossroads and expand
the business model that utilizes IP, the relative value of ourpatents, one of our intangible assets, will improve and wewill be able to reach the position we are aiming for. Finally,

Value Creation Model
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In this way, in the LC-Plasma business, we
believe the acquisition of IP based on the basic
patents of inventions of use and the handling of thelabeling system for foods with functional claims
meshed well, allowing us to build a growth modelfor the Health Science domain. In the 20 years since
we started research and development, the business,
R&D, and IP departments have come together andaccumulated IP rights, like patents and trademarks,
as well as the organizational capabilities to promote
the business.

Company D

5.0

TR*5

PAI*6

The Kirin Group40

LC-Plasma sales revenue

Patents for competitive product A

6.0

Company E

50

7.0

2027
VisionKirin Holdings
60

2022

100

3.0

Patents for competitive product B
50

2019

1.0

0.0

0.5

0.0

1.0

1.5

2.0

2.5

3.0

Average TR*5
*Prepared for our company using LexisNexis Japan’ s patent analysis tool, LexisNexis® PatentSight®

2005

2010

2015

Reporting year

2
0
1
9

2
0
2
0

2
0
2
1

2
0
2
2

2
0
2
3

(Prediction)

2016
2012

0

150

4.0

2.0

10

200

LC-Plasma basic patent

30
20*5 TR (Technology Relevance) is an indicator of thetechnological value of a patent calculated based on thenumber of citations received and indicates the level oftechnical attention from the patent-holding company,
competitors, and academic societies.
*6 PAI (Patent Asset Index) is the sum of the number of eachpatent’ s Technology Relevance and Market Coverage andshows the overall strength of the patent portfolio.

0

Sales revenue (One hundred million yen)Company B

70

Contents

Each company’s main lactic acid bacteria patent:
Changes in TR

Bubble size: number of patent families

Company A

Corporate GovernanceRisk Management

CSV Management

Going forward, we will promptly seize opportunities
of external environmental changes, utilize our Group
locations in Japan and overseas, and make use of ourexperiences expanding the business to create new
business in the Health Science domain under a businessmodel that leverages our IP.

it would be contributed to the realization of a growthscenario of our LC-Plasma business.

Each company’s immune-related lactic acid bacteria patent:
Changes in PA and TR
80

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First time in 59 years as a food company, External awards received in recognition of the success of LC-Plasma

At the FY2023 National Commendation for Invention(hosted by the Japan Institute of Invention andInnovation), Kirin Holdings Company, Limited andKoiwai Dairy Products Co., Ltd. received the Imperial
Invention Prize for our invention of food compositions
for immunostimulation containing lactic acid bacteria(Japanese patent number 6598824), which was awarded
to our employees, the inventors for their efforts in the
discovery and commercialization of LC-Plasma. Thisis the first time this prize has been given to a healthfood ingredient and the first time in 59 years to a foodcompany. Our representatives of enterprises also received

the Distinguished Service Prize for Employment of
Invention.
The National Commendation for Invention is hosted
by the Japan Institute of Invention and Innovation (JIII)
and is held annually to honor inventions that have madesignificant achievements and those that are expected tomake significant contributions in the future. In particular,
the Imperial Invention Prize is given to inventions that havemade significant contributions to the promotion of scienceand technology and the development of Japan’s industrial
economy. This Prize is also the symbolic award of the
National Commendation for Invention, which is given witha gift from the Imperial Household, and is presented
to the person whose invention is recognized as themost outstanding.
Additionally, at the 11th Technology
Management & Innovation Awards (hosted by theJapan Techno-Economics Society), which recognize
outstanding innovations that will change the world,
we received the Minister of Education, Culture, Sports,
Science and Technology Award for our discovery,
research, and commercialization of LC-Plasma.

*For information on previous prize winners, please visit the of the Japan Institute of Invention and Innovation (JIII)
website (Japanese only).
http://www.koueki.jiii.or.jp/hyosho/zenkoku/zenkoku_jusho_pastichiran.html

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Consumer centric marketing
Kirin Group has been promoting "consumer-centric
marketing expertise" built around its operatingcompanies to enhance its organizational capability inmarketing to achieve innovation.

Marketing functions of the Kirin Group
Kirin Group’ s initiatives to strengthen consumer-centric
marketing capabilities are only halfway complete. We
have set the following opportunities to further improvethe capabilities and are making steady efforts.
Raise our “ability to understand customers,” which isthe foundation of CSV management, to an even higher
level throughout the Group● Create marketing capabilities in new businessdomains● Develop and utilize human capital across the Groupfor the future● Provide support in resolving operating companies’
challenges and create collaboration across the Group●

Enhance Corporate Value by further evolving consumer-centric marketing
CMO
MarketingCentralTeam

Reinforce growth and collaborationof operating companies

Dramaticallyincrease thespeed andexecution ofgroup marketingtransformation

Accelerate marketing
capability improvement
Further strengthen human capitaldevelopment across the Group
Company A

Company B

Company C

In order to turn these opportunities into growth
for the Group, we have established a Marketing
Central Team and strengthened its function as a groupheadquarters. The team horizontally links the marketing
departments of Kirin Group companies, enhances theGroup’ s consumer-centric marketing expertise, and iscommitted to promoting transformation through swift
decision-making and business execution based on
current circumstances.

Company D

Company E

Further strengthening and utilizing
human capital development acrossthe Group
Human capital development is particularly important in
the new Health Science business area. Upon realizing
this, in addition to developing specialized programs
and competencies to raise our ability to understandconsumers, we are actively recruiting outside specialists

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to make a stronger marketing organization at a rapid
pace. Furthermore, we utilize our knowledge in thehealthcare field to improve business performance bypromoting personal exchanges and utilization of humanresources among Kyowa Hakko Bio, Fancl, and otheroperating companies engaged in the Health Sciencebusiness. We will continue to accelerate our growththrough forward-looking human resource development
and the strategic utilization of those human resources.

Communication that conveys
the significance of tackling
the Health Science businessAs values are changing in response to rapid
environmental changes, it is becoming increasingly
important for us to ensure that not only our
products and services but also visions and attitudes
resonate with and are trusted by consumers. We arestrengthening communication to establish awarenessregarding the significance of our Group’ s commitment
to the Health Science business, which contributes tothe health of people, through various touchpoints, suchas advertisements, websites, and social media. We will
work to enhance our corporate brand value by making
people aware that we are a partner that stands bysociety and our customers.
We will continue our efforts to “reinforce growthand collaboration of operating companies,” “acceleratemarketing capability improvement,” and “further
strengthen human capital development across theGroup” through strengthening marketing central
capabilities.

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Evolve marketing capabilities ofthe Health Science business
From spring 2022, Kirin Holdings established a central
function to oversee marketing for the entire Group. We
will continue to evolve our marketing organizational
capabilities by raising our "ability to understandconsumers," which is the foundation of CSV management,
to an even higher level throughout the Group.

Strategic Marketing Department
Kirin Holdings Company, Limited

Corporate GovernanceRisk Management

Contents

Contribute to a consistent marketingstrategy and initiatives for consumers

ExampleKeita Yamamoto

CSV Management

In the Health Science domain, which is a focus of ourGroup, we are developing a consistent marketing strategy
by providing direct support to each operating company
through the Marketing Central Team. We are uniting ourefforts to create consumer-centric value across the Group.
This enables the standardization of marketing
activities, which often vary from company to company,
allowing the Group to work together to address common
market issues set from the consumer’ s point of view.
Although mass marketing is possible for the
existing Food & Beverages domain, which handles beerand soft drinks and whose markets have already matured,in the Health Science business, the immune health market
is not sufficiently developed. This is why we need to tap

The Group unites to create value from consumer’ s point of view

CMO andMarketingCentral Team

Health Science
Business
Department

Kirin
BeverageMarketingGroup

Marketing Department& New Business
Development Section

Consistency inmarketing strategy
within the Health
Science domain

consumer

Koiwai
Dairy Products

Marketing
Department

Uniting each businessstrategy and activation
will create synergy andlead to stronger value
creation for consumers

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the potential demand for these products, and to do so,
the Group should unite to create value instead of each
operating company approaching consumers separately.
The Kirin Group has developed and is operating a holistic
plan that integrates the entirety of the Group. For the2022 fall and winter seasons, we have formulated andimplemented, for the first time, a marketing plan thatcomprehensively designs consumer contact points
that go beyond the borders of categories and operatingcompanies.
Specifically, we provided consistent marketing
activities from advertising and PR to in-store promotions insupermarkets and drug stores by matching the timing andthe contents of Kirin Holdings’ Health Science Business

Holistic plan

Value Creation Model
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Department’ s communication for increasing publicawareness of immune care and marketing communication
for products of Kirin Beverage and Koiwai Dairy Products.
We also see business opportunities outside of theepidemic season in winter, the peak season for the
immune care products industry, and the Group is working
together to create consumer needs in other seasons.
Business strategies over a medium- to longterm perspective are essential to create and develop
an immune-care market. Looking not just one year but
multiple years ahead, we are working to further enhance
our product portfolio by expanding our development
pipeline.

CSV Management

Corporate GovernanceRisk Management

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Accelerate marketing capability
improvement
We are speeding up the growth of operating companies
by providing them practical consultations through theMarketing Central Team to help them acquire the expertiseneeded in the new business domains and to quickly
build the organizational capabilities necessary for thebusinesses’ success.
For example, although Kirin Beverage’s “Oishii
Immune Care” was developed as a product to mainly besold in the chilled food section, they did not have enoughknowledge about the chilled food & beverage category.
That’ s why we helped them acquire the necessary
knowledge and organizational capabilities by utilizing
information on the chilled food & beverage category
and chilled food section in sales strategies, in-store
promotions, and better business negotiations throughthe training programs provided by the Marketing Central
Team, thereby developing marketing capabilities that theoperating companies should have.

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ICT accelerating value creation
The Kirin Group accelerates group-wide digitaltransformation (DX) by using ICT technology andcontinuously creates new value with the aim ofsustainable growth.

Accelerating group-wide DX andcontinuously creating new value“Information and Communication Technology (ICT)
accelerating value creation” is an organizational
capability to help us realize new innovations in theLong-Term Management Vision Kirin Group Vision 2027

The Kirin Group’ s DX Strategy

2027 Vision

A global leader in CSV,
creating value across our world of Food & Beverages to Pharmaceuticals

DX goals
All business and functional divisions
are able to autonomously utilize digital technology
to transform processes and create business

Value creation through DX
Value enhancement ofexisting businesses

Business processtransformation

Acceleration and developmentof new businesses

Organizational capabilities to promote DX
Human capital

Organizational structure

ICT infrastructure(KV2027), and we are working on business reform inevery area throughout our group by revising businessprocesses using digital technology and implementing
other activities.

Realizing sustainable growthby continuously promoting DX
In recent years, due to the acceleration of the trend
to apply evolving digital ICT technology to business,
new technology-based services are continuously
being released. The spread of digital technology has
dramatically changed people’ s values, so there is a riskthat we will not be able to provide the value that ourconsumers require if we continue to conduct businessprocesses based on conventional ways of thinking,methods, and technology.
At the same time, consumer touch points have
expanded through digital technology. We recognize thatthrough a deep understanding of the changes in themarkets and the diversification of market preferences,the possibility of providing consumers with highsatisfaction products and services is expanding.
We believe that DX promotion is essential in an

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increasingly uncertain world in order to reduce business
continuity risks and realize sustainable growth, so the
Kirin Group has been promoting the utilization of ICT.
To carry out permanent business transformation ina dramatically changing society, we will continue tocommit to DX in all businesses and divisions throughout
the group.

Organizational capabilities
to promote DX
Our group aims to create a work environment that allows
front-line employees in businesses and divisions to
identify business issues, use digital ICT technology forplanning and designing solutions, and autonomously
promote DX. For that reason, we are striving to build anorganizational structure and secure and develop the talentthat will be responsible for leading it, cultivating planningand conceptualization skills to envision what the issues
should be, and focusing on proactively promoting DX on
the frontlines rather than by digital ICT departments.
As for our organizational structure, in 2021 weestablished the Group DX Promotion Committee, inwhich the employees in charge of DX promotion ateach operating company and their divisions participate.
Through this committee, front-line employees havestarted playing a lead role in DX promotion, such as
by expanding the initiatives of the Kirin Group to eachgroup company and division, in aim of solving issues
and sharing information across operating companies. In
addition, in 2022 we established sectional committees
focusing on our group’ s important business domains towork on solving issues in each area across the group,
including sales, direct to consumer (D2C) business,marketing, and supply chain management (SCM). The

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for each domain at the operating companies.
As an initiative to secure human resources, wenewly established a digital ICT course for new recruitsin April 2021. We continue to hire mid-career employees
and new recruits and to secure the necessary
professional human resources for DX promotion.
Meanwhile, as for internal human resource development,
we have been hosting the Kirin DX Dojo, a unique DX
human resource development program for our group
employees, since July 2021. Group employees canchoose from three course levels (white belt, black belt,
or expert) and aim to pass a certification exam after
finishing the course. This provides a way for employees
to develop their skills autonomously and steadily.
As of the end of 2022, the number of white belts
was approximately 1,200 and that of black belts wasapproximately 600. Employees were progressing fasterthan we had expected. When the course launched in
2022, there was only room for 400 participants, but we
received more than double that number of applications,so we increased the program’ s capacity. Sharedawareness that our group’ s DX promotion is not an
initiative in only limited areas of digital ICT divisions is
spreading throughout the group.
Going forward, we will grow the number of humanresources who can plan and design DX promotion
on the front lines, with the cooperation of the abovementioned mid-career hires and new recruits, and strive
to provide support, such as by offering opportunities for
program participants to play an active role by using theknowledge they gained from the program.

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Value creation through autonomous
DX promotion
Our group aims for value creation through “businessprocess transformation,” “value enhancementof existing businesses,” and “acceleration anddevelopment of new businesses.”In regard to business process transformation,
we are pursuing productivity improvement throughout
the entire value chain, using digital solutions and data
across divisions and domains, including the optimizationof production and logistics systems through efficient AIbased product development and simulations.
As for the value enhancement of existing
businesses, by utilizing consumer data and the latest
technology, deepening consumer understanding, anddigitizing the development processes and consumer
contact points of existing products and services, we are
creating new added value.
For the acceleration and development of new
businesses, we aim to launch new services using
digital technology across the Food & Beverages,
Pharmaceuticals, and Health Science domains without
being bound by our conventional business model.
Through these initiatives, as an example, frontline employees are currently starting to create ideas forenhancing and streamlining business operations, so
the development of organizational structure and humanresources for DX promotion is steadily in progress. We
hope to gain competitively advantageous organizational
capabilities for our group and to create new value throughthe accumulation of small successes that lead to problem
solutions for our employees and organization and through amore proactive promotion of DX. We will work on business
transformation in every domain of our group toward therealization of KV2027.

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ExampleKirin Brewery started the MJ Project
to promote DX in the SCM domain
In October 2022 Kirin Brewery, with the cooperation ofBrainPad Inc., started the three-year MJ (Supply and
Demand Process Innovation) Project to accelerate DX in
its SCM business operation processes. As the first step,
the company launched its material supply and demand
management application, which was jointly developedwith BrainPad, in December 2022.

Koji Tanaka
Planning Section
SCM Department
Kirin Brewery Company, Limited

Due to rapid changes in the market environment, consumer
preferences and values are diversifying. In response tothis situation, we need to diversify our products and deal
with increasing restrictions in production, logistics, andmore. In such an environment, we must rapidly respondto changes in the market and build a stronger supply
system to ensure the stable delivery of our products tocustomers in the future. For this reason, in April 2022 ourcompany newly established the SCM Department with thegoal of achieving both a stable product supply and cost
optimization.
The SCM Department is responsible for preparing
production plans and material (cans, paperboard, etc.)
procurement plans based on demand forecasts following
our previous sales records and the recent market trends.
Our supply and demand operations are characterized by

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OUTCOMEcurrent demand and demand forecasts of the next several
months so we can prepare for production and procure
the necessary raw materials. However, with the ongoingproduct diversification in the current sales environment,
we not only have difficulty forecasting demand, but wealso need to prepare an optimal plan that takes into
account the capacity and restrictions of production,
storage, and delivery. As a result, the complexity ofbusiness operations is increasing and our existing systemcan’ t handle all of them, so we are currently handling andadjusting many daily operations manually. The situation
is not only increasing workload but also creating a lot of
operations that can only be performed by employees witha certain level of experience. Therefore, we concluded that
if this went on, we would have difficulty maintaining supply
and demand operations and there would be business
continuity risks for the future.
To deal with the situation, we started the MJ (Supply
and Demand Process Innovation) Project in October 2022.
By expanding the range of automated operations of theexisting supply and demand operations system, we areplanning to improve the efficiency of operations previously
handled manually by employees and aiming to realize
more stable, sustainable supply and demand operations.
Members of digital ICT divisions are participating inthis project, which was launched mainly by front-line
employees, to promote and support the project.
Through the promotion of this project, we will
establish a solid business operation system that willcontinue to provide a steady product supply for the future
to reduce business continuity risks. At the same time, we
also aim to improve the job satisfaction of employees incharge of supply and demand operations by eliminating
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manual operations, and shifting the focus to higher addedvalue operations.
We started using materio, our self-developedmaterial supply and demand management application, in
January 2023. This application can automatically calculate
optimal order quantities for materials based on desired
inventory levels and sheduled delivery dates, taking into
account production timing and lot size. Additionally,
the application visualizes inventory changes after orderplacements and supports the final decision-making
process of employees. We anticipate that this will reduce
the amount of material supply and demand management
operations that was performed by humans by 75%
annually, saving a total of over 1,400 hours of work time.
We consider this material supply and demand
management application as a small success, and we willreform operations to produce more effective results. In
addition to automation through the system, we will also
eliminate issues and restrictions of the supply chain,creating greater social and economic value.
Material supply anddemand management
application

Input

OutputProduction
management system

Material-related information

Basic
information

List ofpackaging materials

List of plants

Planned date toorder materials
etc.

Plan orders, replacements,
and transportation

Share procurement quantities
with suppliers

Automated calculation andsimulation of packaging material
procurement quantities

out

Production management
system data

Inventory
information

Order
quantity

Previous
recordsetc.

＋

Reﬂect data in production plansin

Forecasted future
inventory quantities

Transportation
instructions

Instruct Kirin Group Logistics
to transport materials

Calculate material procurement quantities and forecast inventories
through the material supply and demand management application
Support of humans’ ﬁnal decision making*Replacement: Replacing destination plants from suppliers*Transportation: Transportation and delivery between Kirin
Brewery’ s plants

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Message from Senior Executive
Officer of Health Science Strategy

Maximizing the Value of

Lactococcus Lactis strain
Plasma (LC-Plasma) and Other
Specialty Materials through a
Unique BtoB/BtoC Linkage Model

Health Science domain
Kirin Holdings Company, Limited
Kirin Beverage Company, Limited
Koiwai Dairy Products Co., Ltd.
Kyowa Hakko Bio Co., Ltd.

Food and Beverages domain
Kirin Brewery Company, Limited
Lion Pty Ltd
Kirin Beverage Company, Limited
MercianCoca-Cola Beverages Northeast, Inc.

Pharmaceuticals domain

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Message from Senior Executive Officer of Health Science Strategy

Maximizing the Value of Lactococcus Lactis strain Plasma(LC-Plasma) and Other Specialty Materials through a Unique
BtoB/BtoC Linkage Model
Takeshi Minakata
Director of the Board, Senior Executive Officer
Kirin Holdings Company, Limited

Using fermentation and biotechnology
to solve health issues――Why is the Kirin Group getting involved in thefield of health science?
Since 2013, the Kirin Group has made Creating Shared
Value (CSV) a cornerstone of its management, striving
to address social issues through its business. With
the COVID-19 pandemic raising global awarenesson health concerns, we recognize the importance ofthe health sector, which holds significant social andeconomic value. Our group’ s expertise in fermentation
and biotechnology, honed through more than a century
of experience in the beer industry, enabled us to enter
the pharmaceutical market 40 years ago. Now, we
are applying these technologies to the Health Science
domain to tackle global health challenges. We areworking with a strong sense of purpose to establish the
Health Science business as the third pillar of support

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for the Kirin Group, following Food & Beverages andPharmaceuticals.
Until last year, our focus was on addressing
health issues related to immunity, brain function, andgut health. However, in 2023, we are reassessing ourapproach and restructuring it as the Kirin Group’ s
unique strategy to enhance innate human capabilities.
This strategy involves pursuing both the “building
foundation of health” approach that targets immunity,
and the resolution of “individual health issues” such as
lifestyle diseases and brain function.
Our group’ s vision is to be a “Become apartner for healthy and happy lifestyle in the 100year life.” Leveraging our expertise in fermentation
and biotechnology, we aim to enhance human beings’
innate capabilities through science-based products
and services. This, in turn, will lead to happier lives andenable us to deliver smiles and joy to the world.

――One year has passed since you were put incharge of strategy for the Health Science Domain.
What results have you seen over this period?
The Health Science Business Division was launchedin April 2022 in order to tackle the health sciencebusiness in earnest and establish a collaborative
structure to foster mutual learning and make speedy
progress toward common goals with each operatingcompany. One year has passed since the launch, andwe are pleased to report that a strong sense of unity
has developed between the division and our operatingcompanies, including Kyowa Hakko Bio and Koiwai
Dairy Products. The smooth coordination among thesecompanies has allowed us to establish a structure for
implementing individual business strategies, which hassignificantly increased our decision-making speed.

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OUTCOME*1 A business model in which businesses are linked, that utilizing
the insights gained from selling the company’ s own productsin the BtoC business to create a new BtoB business that is not
limited to ingredient sales.

Apart from restructuring our unique approachto addressing health issues, our most notableaccomplishment since I assumed this role has been
the creation of a roadmap to establish a BtoB/BtoC
Linkage Model*1, which we have applied to our LCPlasma products. The model aims to address healthissues by deploying technologies and ingredients on
a broad scale (BtoB) and providing consumer touchpoints with solutions to a variety of health issues
through technology platforms (BtoC). This resulted ina significant 40% increase in the value of LC-Plasma
sales in 2022 over the previous year. Achieving thisgoal has given us confidence, and we are thrilled
to see more consumers choosing the products
containing LC-Plasma at supermarkets, drugstores, andother channels. This success is due to the renewed
advertising for LC-Plasma, the development of in-houseproducts like “Morning Immune Care” in small bottles,
expanded coverage at drugstores, and the licensing ofmaterials to external companies, which has significantly
increased the number of consumer touch points.

Another result is that our partner companies
have recognized the value of LC-Plasma and are now
using it in their own product promotion activities. We
place a great deal of importance on quality assurance
when we out-license ingredients. We don’ t simply stopat selling materials to partner companies; we also
conduct a thorough evaluation of the activity of LCPlasma in their final products.
The reason we out-license our proprietary
ingredients, including LC-Plasma, to our partnercompanies instead of keeping them in-house is to fulfill
our social responsibility of contributing to global healthissues and achieve our vision. By increasing the numberof partner companies and products and expanding ourconsumer touch points, we can create a larger market
for immune care than what our group alone can achieve.
Our ultimate goal is to make immune care an everyday
activity. Although there is interest in immune care in
Japan, only about 10% of people make it a habit, as
revealed by our surveys. The market has a latent needfor immunity, which has yet to become apparent. That is
why we want to collaborate with our partners to create
this market.

Fostering researchers with acommercialization mindset to speed
up time to market――Please tell us about the challenges that the
Health Science business is facing.
One challenge is that we have not achieved our sales

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targets for specialty ingredients other than LC-Plasma.
Specifically, we haven’ t achieved our sales targets
for Citicoline*2, and although three strains of Human
Milk Oligosaccharide (HMOs*3) have passed safety
screening in China, commercial production has only
just begun at our plant in Thailand, so sales are not yet
possible. Consequently, we believe that the scale of our
Health Science business is insufficient.
The Health Science Division has set a sales
revenue goal of 200 billion yen for 2027. To achieve thisgoal, it is crucial to maximize the value of our specialty
ingredients. First and foremost, we need to conduct
human clinical trials steadily and persistently to optimize
the value of our three specialty ingredients: LC-Plasma,
HMOs, and Citicoline. Next, we plan to leverage Kyowa
Hakko Bio’s expertise in ingredient development todiscover new specialty ingredients. To achieve this, wemust increase the amount of data on the contributionof our developed ingredients to health issues throughthorough human clinical trials and analysis.
To accelerate the speed of our Health Sciencebusiness, we established the Institute of Health
Sciences within the Health Science Business Division in
April 2023. This integration involved combining part of
the Health Science Business Department with certain
functions of the Kirin Central Research Institute. Bylinking the business and R&D divisions closely, we aim to
speed up the PDCA cycle from ingredient development
to commercialization and foster researchers with acommercialization mindset. Meanwhile, the Kirin Central
Research Institute will continue to focus on promoting
basic and applied research in the Health Science
domain over the medium to long term, with a view tocreating seeds for future developments. We are excitedabout the opportunity for both research institutes to

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collaborate in developing and commercializing new
ingredients with a sense of urgency.
Another challenge is the deteriorating profitability
of Kyowa Hakko Bio’ s amino acid business. Despite
its large sales, this segment has been struggling withlow profitability due to commoditization of products
and intense price competition. The situation worsened
last year with soaring raw material and fuel prices
and the suspension of manufacturing at our Shanghai
plant in China, caused by COVID-19 lockdowns. As aresult, we recorded an impairment loss in fiscal 2022.
Recognizing the increasing pace of change in thebusiness environment, we have downsized the aminoacid business earlier than initially planned and are
redirecting our focus towards specialty ingredients.
We are optimistic that this shift will help us return toprofitability by next year.
*2 An ingredient found in the body that maintains the cell
membranes of the brain and nerve cells, and has been used
for many years around the world in medicines for brain
diseases and health foods that support the improvement ofcognitive functions. In Japan, it is currently classified as apharmaceutical product.
*3 A generic term for oligosaccharides contained in breast
milk. More than 200 kinds are contained in breast milk, andthe results of research contributing to immunity and brain
function, among others, have been reported.

Developing specialty ingredientsworldwide through a “BtoB/BtoC
Linkage Model.”――What are the strengths of the Kirin Group in
the Health Science domain?
We believe that our business model is a unique strengthof our group. The BtoB model involves out-licensing our
specialty ingredients to other companies, while the BtoC

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When attempting to out-license LC-Plasma as
an ingredient, our group’s knowledge in developing andmarketing various products contributes to negotiations
with partner companies and aids in the development of
their product.
Leveraging this strength, we plan to firstaccelerate the growth of our Health Science businesswith LC-Plasma. Additionally, we intend to utilize theknowledge we have accumulated through this productto expand global sales of specialty ingredients like
HMOs and Citicoline in the future.
In addition, we have been considering theutilizing M&A to solve the challenges and realize thediscontinuous growth. In April 2023,, we announced that
we will proceed with the process of making Blackmores,
an Australian natural health company, a subsidiary.
It could be expected to help us to realize growth
globally by leveraging Kirin’s specialty ingredients,
and Blackmores brand which obtains a high market
share in Oceania, South East Asia, and China. After thecompletion of the deal, both of us will aim to achieve
the creating social value and economic value by tacklingsolving the social issues of 'health' together.

――Please tell us about the future prospects ofthe Health Science business.
In the past, it was thought that innovation was difficultfor established companies, but for the past decadeor so, such companies have been rapidly producing
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the mass production stage, an established company
can utilize its existing platform. We will leverage theplatforms of each of our group’ s operating companies
to accelerate the growth of our new Health Sciencebusiness. Our group is already following this trend.
The Health Science business is still in its earlystages, but we have the advantage of a diverse rangeof human resources and the ability to utilize the wide
variety of know-how accumulated in the existing
businesses of the Kirin Group. This is our greatest
strength.
Our group is characterized by its passion. We
have the full support of the entire organization in ourefforts to join forces and grow our Health Sciencebusiness, which motivates us to continue pushing
forward. While we recognize that growing a new
business takes time, we are committed to taking thenecessary steps to do so properly. Building on the
success of LC-Plasma, we will further promote the useof new ingredients to expand the market. Our ultimate
goal is to establish Health Science as a key contributor
to the success of the Kirin Group.

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Health Science domain

Having developed its expertise in fermentation and biotechnology
through its beer business, the Kirin Group has been conducting
research on microorganisms and plants for many years. This has led
to the discovery and development of numerous ingredients that canhelp address health issues.
To achieve business growth, deliver evidence-based, highvalue ingredients, and contribute to solving the health issues of evenmore consumers, we launched the Health Science domain in 2019.
The Health & Well-Being domain has attracted numerous
companies due to the significant social issues related to it, andas a result, the market has been expanding domestically andinternationally. Furthermore, with the remarkable technologicalinnovations by startups and major companies entering the field, themarket is undergoing rapid changes, and the speed of environmental
change is extremely fast.
Our group’ s strengths lie in the development of functional
ingredients using fermentation and biotechnology, mass productivity
that leverages knowledge from Food & Beverages domain, anda wide range of consumer touchpoints domestically. We aim forsustainable growth by combining BtoB and BtoC in a unique businessmodel called the BtoB/BtoC Linkage Model*.
*A linked model that utilizes the insights gained from selling products in the BtoC
business to create a new BtoB business that goes beyond ingredient sales.

Solving health issues through unique approaches
Individual health issues:
Prevention oflifestyle-relateddiseases (obesity)

Brain function
maintenanceSkin Health(Beauty)

Examples: Citicoline (brain function),
Ornithine (vitality), etc.

Stress Relief
Vitality, etc.

Infection control
measures

Foundation:

The innate powerof human being*

Diet(Nutrition)

We resolve problems that impair health andwell-being by leveraging the group’ s strengths ineverything from materials to services.

MotionRest

We will build a foundation for health byapproaching the power of immunity withmaterials and products such as Lactococcus
lactis strain Plasma and HMO, and lifestylesupport such as intestinal microflora testing.
Immunecare*Essential to all people, regardless of race, gender, or age,like the software that controls health, among the innate
powers of human beings

Examples: Deployment of Lactococcus lactis strain Plasma and
HMO, nutritional support such as amino acid businessand dairy products, supplements to improve sleep
quality and exercise purposes, intestinal microflora
testing services, etc.

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Solving our consumers’ healthissues and becoming a “Partner fora healthy and happy lifestyle in the
100-year life” through the growth of
specialty ingredients
Building upon our group’ s ingredients and technology,
which harness the power of fermentation in livingorganisms, we aim to contribute to our consumers’
health more effectively by addressing not only specifichealth issues but also the innate power of the human
body, which is the foundation of health.
The Kirin Group 2022-2024 Medium-TermBusiness Plan outlines our strategy to achieve growthin the immunology field by linking BtoB and BtoC,
rehabilitating BtoB businesses, building a foundation
for higher profits, expanding consumer touchpoints
in BtoC (including Kirin Beverage and other existing
businesses), and exploring M&A opportunities. We havealso developed a human resources strategy to achievethese goals and improve our organizational capability.
In 2022, sales revenue increased to 103.6 billion
yen due to strong sales of Lactococcus lactis strain
Plasma（LC-Plasma, a postbiotic）products, although it

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the year.
In 2023, we will continue to aim for steady sales
growth in Japan and focus on maintaining double-digit
growth compared to the previous year by strengthening
marketing activities to increase recognition of thefunctions of LC-Plasma. In addition, by collaboratingwith companies in Japan and overseas that license
our products through BtoB marketing, we will create avirtuous cycle of increased recognition of the functions
and sales growth.
Kyowa Hakko Bio, which has recorded an
impairment loss, will focus on reducing the scale ofits amino acid business, which consists of commonly
consumed products, and instead focus on high-valueadded specialty ingredients such as Citicoline andHuman Milk Oligosaccharides (HMOs) .
Kirin Beverage will take measures to increase
profitability, such as renewing highly profitable smallsize products, while Koiwai Dairy Products will formulatea plan to include a greater percentage of Health
Science products in its overall product composition.
Both companies will aim for profitable growth in theJapanese market.

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Aiming to establish and spread
immune care habits through LCPlasma
The Kirin Group aims to promote the habit of
immune care worldwide through the use of LCPlasma, to foster the perception that Kirin is theleading company in immune care. However, while
over 80% of people understand the importanceof immune care, only about 10% take action.
Our surveys have shown that this is because
consumers are not aware of how to perform
immune care. To provide a simple immune caremethod, our group has been working on enhancing
the attractiveness and expanding the lineup of
our own products, as well as collaborating withpartner companies to create an environment
where LC-Plasma can be delivered to consumers
who cannot be reached by our company alone,such as those who prefer snacks or green juices.
Our goal is to make it easy for people to care for
their immunity. By spreading the habit of immune
care through LC-Plasma to more and more people,
we will continue to contribute to the healthy andpositive daily lives of people around the world.

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Kirin Holdings Company, Limited
Health Science domain

The Health Science Business Department, Kirin Holdings Company, Limited, is engaged in BtoB business, like selling
specialty ingredients to partner companies, and BtoC business, like the selling of supplements online, under the Health
Science Business Division.

Connecting BtoB and BtoC businesses,
producing quick results in the immunity businessWe will significantly expand touch points with
consumers by cooperating with all partner companies.
In addition, promotion of consumer understanding
will lead to innovation, through which we will makecontributions to solving the health issues of even moreconsumers. We aim to double the current amount of
Lactococcus lactis strain Plasma (LC-Plasma) Series
foods with functional claims in the future.

Non-alcoholic
beverages
Supplements

YogurtPartners

Sweets andother snacks
and drinks

Products thatmake immune
care easy

Kirin
Kirin

Partners

Green juice
and otherhealth drinks

Kirin
Partners

Products for
immune care
habits2022 Year in Review● In recent years in Japan, the growth of the healthfoods market has been limited. The immunerelated product market temporarily expanded
due to the spread of COVID-19, but the market
shrunk in 2022. However, we think the various
social issues, such as the growing aging
population and the rising cost of social security,
will create opportunities for market growth in thelong-term. Furthermore, the global health foods
market is continuing to grow.
● In 2022, we established the Health Science
Business Division and remodeled our structure.
We drafted a medium- to long-term strategy for
the Health Science domain, applied it to eachgroup company, and monitored them. We werealso cooperating with Kirin Beverage and Kyowa
Kirin, contemplating mergers and acquisitions,and working to improve organizational abilities.
● The LC-Plasma BtoB and BtoC businesses,
which are directly controlled by Kirin Holdings,
were working to make immunity care habits.
The sales of LC-Plasma Series products were up
140% compared to last year.

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Kirin Holdings Company, Limited

2023 Initiatives● In regard to the BtoB business, we will create

an environment in which immune care will
be accessible in all aspects of our lives bystrengthening our coordination with partnercompanies to which LC-Plasma is licensed andfurther enhancing our product lineup.
● As for the BtoC business, in order to consistently
carry out a strategy as a group, we will establish
a shared forward-looking plan for the coming
years with Kirin Beverage and other operatingcompanies and implement strategic marketing
activities. Further, we will continue developing
academic information to improve functionalrecognition.
● By not only conducting our BtoC business but
also involving the partner companies of our
BtoB business to promote our “BtoB/BtoC
Linkage Model,” which will improve the valueof ingredients, we will normalize immune care
habits and significantly expand the market.
● We will enhance our high value supplement
lineup in our company’ s DtoC channels.
● From a long-term perspective, enhancing thesales process of our specialty ingredients isessential. For this reason, we built the Instituteof Health Sciences in our Health Science
Business Division in April 2023, and the businessand R&D departments will work together tofocus more on the research and development of
new ingredients.

ExampleLaunch of Kirin iMUSE Immune Care Good Sleep Plus
and Kirin iMUSE Immune Care Visceral Fat Down

Ayako Tsukada
Marketing Group
Health Science Business Department
Health Science Business Division
Kirin Holdings Company, Limited

Although immunity plays an incredibly important role as
the foundation of health, it is difficult to feel the effects
of immune care products, and unlike the individual-based
health issues of sleep and obesity, their needs weredifficult to make apparent. The main issue for establishing
immune care habits in Japan is figuring out how toapproach and spark in interest in those who need immune
care, especially those with low health awareness.
That’ s why we launched Kirin iMUSE Immune CareGood Sleep Plus and Kirin iMUSE Immune Care VisceralFat Down in the aim of developing immune care habits
while tackling the tangible needs related to the healthissues of sleep and visceral fat.
Actually, lack of sleep and increased visceral fat
can raise the risk of decreased immune function. We
aimed to help more consumers understand the necessityof immune care by raising awareness of the importanceof double care. As a result, we received high praise fromconsumers, and through trial purchases, sales of Kirin
iMUSE Immune Care Good Sleep Plus and Kirin iMUSE
Immune Care Visceral Fat Down achieved approximately
170% and 230% of our 2022 targets, respectively. I truly
feel we were able to contribute to the expansion of theconsumer base in our aim to create immune care habits.

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Kirin Beverage Company, Limited
Health Science domain

Kirin Beverage has been committed to creating a new beverage culture to meet consumer expectations through softdrinks based on the Kirin Group’s basic stance, a steady focus on quality and a consumer-first approach, which has beencultivated since our establishment almost half a century ago, in 1963. While Kirin Beverage provides unique products andoffers consumers new value through consistent marketing that follows our Brand Purpose, we are also sharing the joy offood through our country-wide sales network and by creating sales floors based on a consumer perspective.

Working toward increasing revenue through the re-growth of core brands
and expansion of the Health Science domain
As part of the Kirin Beverage Group 2022–2024
Medium-Term Business Plan (2022 MTBP), we areworking to regrow existing non-alcoholic beverage core
brands, with a focus on Kirin Gogo-no-Kocha and Kirin
Nama-cha , and to expand the sales of Lactococcus
lactis strain Plasma (LC-Plasma)-containing beverages
in the Health Science domain. Through these efforts,
we will build a strong brand portfolio that showcases

our strengths and improve revenue.
Furthermore, we are working to develop andestablish a sustainable business infrastructure forthe future and to promote the improvement of thecost competitiveness of our production and logistics
systems. Through these initiatives, we are driving theKirin Group’ s CSV management and contributing to theresolution of social issues.

2023 Strategy

Provide “Health with good taste for everyone’s daily life” at the best touchpoints
and achieve high proﬁtability by creating a strong brand that is supported by consumers.
Drive the Kirin Group’s CSV management and contribute to solving social issues
Strategic Issue 1

Build a strong portfoliothat contributes to everyday health
1 High proﬁtability through
LC-Plasma-containing beverages
2 Re-growth through cultivation of core brands

Strategic Issue 2

Contribute to daily health
Develop and establish
business infrastructure
1 Strengthen cost competitivenessof production and SCM

2022 Year in Review● Until March 2022, the Japanese beverage

market was affected by the semi-emergency
COVID-19 prevention measures, but from April
2022, the market grew larger than the previous
year due to good summer weather and therevival of economic and human activities.
Additionally, sales of functional and sugar-freeteas grew*1 because of the increasing healthconsciousness from not being able to see afuture free of COVID-19.
● Under such circumstances, the annual sales
volume of “Kirin Gogo-no-Kocha ” grew 3%,“Kirin Nama-cha ” grew 2%, and “LC-Plasmacontaining beverages” grew 26% year-on-year.
That was due to our focus on core brands inthe existing non-alcoholic beverage business,in addition to the launch of new products
and the renewal of the existing LC-Plasmacontaining beverage products in the Health
Science domain.

*1 Source: Food Marketing Institute Co., Ltd. (2022
results)2023 Initiatives● We have newly established a pledge toconsumers, “Health with good taste foreveryone’ s daily life,” as a broad concept tointegrate and accelerate our growth strategy.

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Kirin Beverage Company, Limited

While focusing on health as the core of
Kirin Beverage’s competitive advantage
and contributing to consumer’s mental andphysical health with good taste throughhealth-driven products and services, we
promote “sustainable recycling of containers
and packaging” as part of the Kirin Group’s
Environmental Vision and contribute to future“communities” that connect people andsociety.
● As in our 2022 MTBP, in 2023 we will challenge
ourselves to focus our resources and enhanceinvestments into the Health Science domain, adriver of growth, to expand mid- and high-level
price range products.
● We aim to achieve high profitability throughstrengthening our LC-Plasma-containing
beverages portfolio and the acceleration ofcollaboration with FANCL.

ExamplePromoting the personalization of immune care

Shoko Matsuoka

Mina Kuwahara

Marketing Department
Kirin Beverage Company, Limited

Sales Department
Kirin Beverage Company, Limited

Kirin iMUSE Morning Immune Care was created to spread
immune care as a new health habit and to help everyone
stay healthy. We realized that low-capacity yogurt drinks
and lactic acid drinks are often consumed in the morningand that many people find it easier to make morning
activities a habit. That is why we aimed to create a newmarket through the proposal of immune care by launchinga new product with immune function claims that allows
for the easy intake of LC-Plasma.
To make it easier for consumers to consume
these products daily, we made product volume and taste
our top priorities. We focused on creating a container that
fit easily in the refrigerator and contained an amount of
product that was easy to consume in addition to otherbreakfast items on busy mornings, so we adopted the useof 100ml PET bottles for the first time in our Group. We

also developed a refreshing yogurt flavor, making it easy
to drink every day.
In addition to volume and taste, we also focusedon distribution channels and selling methods. For this,it was essential for us to cooperate with the Sales
Department and the SCM Department. Most low-volume
yogurt and lactic acid drinks are sold as chilled products.
Working toward the nationwide rollout of Kirin iMUSE
Morning Immune Care in March 2022, we established a
distribution system for chilled products and a system forbusiness negotiations with buyers in aim of creating a
new market through the promotion of new health habits byworking directly with our partners.
Furthermore, from the beginning of development
we had been planning to adopt a bulk purchase option to
help promote new health habits. Although 10-packs are thenorm for chilled products sold in bulk, we have received
reports from our sales representative that 10-packs may
become a factor that impedes the buying motivationof consumers, especially during the trial sales period.
Therefore, we decided to adopt six-packs to strengthen
trial sales and lower the hurdle for bulk purchases. As
the formation of immune care habits spread due to theincrease in awareness of immune care, the six-packs
became popular with not only consumers concerned
about their own health but also those concerned about thehealth of others, and sales of the low-volume lactic aciddrink have steadily increased.
In March 2023, we made changes to the design
and taste of Kirin iMUSE Morning Immune Care andlaunched Kirin Oishii Immune Care to better convey both
function and good taste. We will further expand theimmune-care market by instilling immune care habits in
consumers.

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Kirin Beverage Company, Limited

ExampleKIRIN x FANCL Calolimit Apple Sparkling

Shoko Matsuoka

Ayane Kakigi

Marketing Department
Kirin Beverage Company, Limited

Product Planning Group 2
Product Planning Department,
Health Food Business Division
FANCL CORPORATION

We decided to develop KIRIN x FANCL Calolimit Apple
Sparkling together with FANCL to solve consumers’ healthissues and to help them enjoy healthy lives by providing
delicious beverages. We made the decision during a
discussion about further boosting synergy between
our Group and FANCL, whose management philosophy
includes eliminating the negatives from the world.
Apple Sparkling, a collaborative product with
FANCL’ s long-selling supplement Calolimit , can beenjoyed alongside meals. Indigestible dextrin containedin the product can reduce the absorption of sugar and fat
from food. The introduction of the product on the side of
the package states "Satisfy your body and mind," whichmeans that the product will “satisfy your body and mind
by providing you the happiness of eating well.”
Health drinks of this kind, including Food forSpecified Health Use (FOSHU) and food with functional
claims, are popular among people in their 40’ s andolder,*2 and carbonated beverages registered as FOSHU
and those with functional claims are increasingly being
enjoyed alongside meals. Since the main buyers of thesecarbonated beverage products, men in their 40’s to 50’s,*3
have a relatively high rate of vending-machine use, we set
vending machines as a main distribution channel of the
product. We are also exploring new channels, such as overthe counter.
*2 Source: Kirin Holdings*3 Source: Intage SCI (includes people in their 70s), nationwide,
January 1, 2022–December 31, 2022

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Koiwai Dairy Products Co., Ltd.
Health Science domain

Since its establishment in 1891 as Koiwai Farm, Koiwai Dairy Products Co., Ltd. has painstakingly developed the barren
wilderness at the southern foot of Mt. Iwate into a lush green environment and pioneered livestock farming and dairy
products in Japan. Over the last 120 years, we have cherished the indomitable challenger spirit of our predecessors
and their sincere efforts cultivated in harmony with the environment. Through meticulous manufacturing, we deliversafe, secure, and valuable products. We strive to pursue “Koiwai’ s unique value” and nurture relationships with ourconsumers while proposing creative, attractive, and valuable products that contribute to a rich dietary life by meeting
more consumers’ expectations for delicious and delightful products.

Further enhancing the value of the Koiwai brand through efforts to solidify
the earnings base and develop human resources
To address our inability to expand
our customer base due to diminishedbrand value and limited opportunities
for consumption, it is essential tocontinue effectively communicatingproduct value and enhancing brandvalue. We will therefore focus on
improving profitability and expanding
consumer touchpoints.

Enhance brand value through continuous promotion of the Koiwai brand

Expand consumer touchpoints

1

Regrowing Namanyu
yogurt* brands

2

3

Sustain growth in the
Health Science domain

Sustain growthof margarine

Sustained growth byestablishing the idea that iMUSE =immune care in the functional
foods domain

Achieve growth in margarine,
which continues to perform wellin a stagnant market

Increase inventory turnover(Expansion of sales volume per store)

iMUSEMargarine

Fat-free yogurt made only with fresh milk

Release of new products
Increase coverage

RenewalIncrease coverage*yogurt made with 100% fresh milk

To regrow Namanyu yogurt brands,
we will expand consumer touchpoints.

Namanyu 100% yogurt

RenewalIncrease coverage and inventory turnover

Revenue improvement

Direct delivery, direct transactions, review of terms and conditions,improvement of unproﬁtable products, etc.

2022 Year in Review● Despite a slight decline in the markets forfermented milk (yogurt) and dairy products(butter, margarine, and cheese), our efforts tostrengthen the Koiwai brand paid off, with ourmainstay Koiwai Namanyu 100% yogurt series
and two Koiwai margarine products growing at
a steady pace.
● Sales of the Koiwai iMUSE yogurt series
increased significantly, up approximately 40%
from the previous year.
● We were able to increase sales despite
rising prices of raw and packaging materials,
logistics, and energy costs by swiftly
implementing price revisions.

2023 Initiatives● With our reliable manufacturing, which

harnesses the blessings of milk cultivatedsince the establishment of Koiwai Farm, we
will proactively work on enhancing brand value
and nurturing personnel who support ourgoal of delivering unique deliciousness andcreating healthy and enjoyable moments forour consumers.
● We will strive to grow fermented milk (yogurt)
and improve profitability of dairy products(butter, margarine, and cheese).

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● For fermented milk, we aim to increase thenumber of new consumers and core users bypromoting the taste, function, and quality ofour products and creating more opportunities
for consumers to try them.
● We will be offering recipes for our mainstay
Koiwai Namanyu 100% yogurt with added
fruit, as well as relaunching our Koiwai Fatfree yogurt made only with fresh milk , now
with a less acidic and more delicious taste.
Additionally, for our Koiwai iMUSE yogurt
series, which contains 100 billion Kirin
Holding’ s unique Lactococcus lactis strain
Plasma (LC-Plasma), we will be launching the
Koiwai iMUSE yogurt Sugar-Free line with three
options: low sweetness, low fat, and sugarfree.
● With the growth of the LC-Plasma business,sales of ingredients as a BtoB enterprise havealso been robust. To further enhance our LCPlasma production capabilities, we will be
operating a new LC-Plasma line at our Tokyo
Plant.
● In dairy products, we will be relaunchingmargarine series to strengthen sales.

● To foster employee development and growth,

we will visualize the necessary skills foreach department and implement systematic
human resource training programs to create
workplaces where employees can work withenergy and enthusiasm.

ExampleValue proposition of products including Koiwai
Namanyu 100% yogurt

Shohei Aoki

Daichi Miyoshi

Sales Promotion Dept. No. 2
Metropolitan Area Branch
Koiwai Dairy Products Co., Ltd.

Sales Planning Dept.
Metropolitan Area Branch
Koiwai Dairy Products Co., Ltd.

Yu Tsukawaki

Saki Takahashi

Sales Planning Dept.
Metropolitan Area Branch
Koiwai Dairy Products Co., Ltd.

Sales Planning Dept.
Metropolitan Area Branch
Koiwai Dairy Products Co., Ltd.

There is no doubt that price affects consumer purchases,
and raising prices generally reduces demand. As a resultof the recent rise in consumer prices, the importance ofbrand value has increased.
In such a difficult market environment, we
assumed that some consumers who have been purchasing
Koiwai Namanyu 100% yogurt might either stop buying or
buy less frequently due to the price increase. Therefore,
we did not rely solely on price policies but implemented
measures to encourage as many consumers as possible
to experience the deliciousness of the product andrecognize its value, even if the price is a little higher.
First, we created an opportunity for consumers
to taste the deliciousness of our product. We conductedsampling activities at feasible supermarkets where
consumers could experience the low acidity, milkiness,and smoothness of our yogurt and its delicious taste.
Since it is difficult to convey the taste in words, we believe
it is important to have people try the yogurt.
Second, we strengthened recipe proposals in
stores and on our media. In response to the growing
momentum to use yogurt as an ingredient following the
spread of COVID-19, we improved our website to makeit easier for consumers to post and view comments on
recipes and products. We also enhanced our proposal
appeal through in-store advertising and Instagram.
We hope that consumers who are temporarily
deterred by the price increase or who have not yet
tasted our product will be motivated to purchase it byexperiencing its great taste. We aim to contribute to themental and physical health of our consumers and increase
our sales through the value of the taste and functionalityof 100% fresh milk.

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Kyowa Hakko Bio Co., Ltd.
Health Science domain

Kyowa Hakko Bio Co., Ltd. was established as Kyowa Hakko Kogyo in 1949 and merged with the Kirin Group in 2008.
Kyowa Hakko Bio manufactures pharmaceutical raw materials and healthcare ingredients represented by functionalamino and nucleic acids and provides them to customers. These ingredients have a wide range of uses, spanning fromhealth foods to active pharmaceutical raw materials, intermediates, cell culture medium, makeup, and more. Kyowa
Hakko Bio aims to contribute to the health and wealth of the people of the world by developing functional ingredientsthat meet market needs and providing them to each industry.

Working to enhance sales of specialty ingredients
As a mid- to long-term strategy, Kyowa Hakko Bio is
working to enhance the sales of specialty ingredientsto realize profitability improvement. By keeping
various options in mind, we will decisively and quickly
implement structural reforms while downsizing theamino acid business. Additionally, we will focus ourresources on two specialty ingredients: Citicoline*1 andHuman Milk Oligosaccharides*2 (HMO ).
*1 A naturally occurring substance in the body that helps
maintain cell membranes in brain and nerve cells. It is usedaround the world to treat brain diseases and in health foods
that support cognitive function.
*2 A generic name for oligosaccharides found in human breast
milk. There are over 200 varieties in human breast milk,
and studies have shown they contribute to immunity, brain
function, and more.

2022 Year in Review● In 2022, revenue and sales took a big hit fromthe spread of COVID-19 and the soaring pricesof raw materials and other materials. Due tothis, it has become necessary to acceleratechanging the structure of the low profit aminoacid business, which Kyowa Hakko Bio hadplanned to downsize, so a management
decision was made to significantly detract
assets.
● On the other hand, the promotion of thespecialty ingredients that are responsible forthe future growth of our business, Citicoline
and HMOs , is going as planned. Regarding
Citicoline, manufacturing plants have been
expanded and the sales team in the large North
American market has been reorganized. As for
HMOs , a new manufacturing plant has been
built in Thailand and preparations to get themon the market are steadily progressing.

2023 Initiatives● Improve sales of Citicoline and HMOs anddownsize the commodified amino acidbusiness earlier than originally planned.
● The global citicoline market is expected to
grow to 15 billion yen in 2023. New facilities
are to be built at the Yamaguchi Production

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Kyowa Hakko Bio Co., Ltd.

Center (Hofu City), and test operations will
begin in 2023 in preparation for the commercial
production of health foods. Furthermore,
focus will be put on the US, where the sales
structure has been reorganized to specialize inthe market; branding of Cognizin , a Citicoline
product brand, will be enhanced; and the sales
strategy will be improved.
● The growth of the market from 2022–2027 forbaby formula with HMOs is expected to growan average of about 20–30%*3 per year. Sales
activities and regulatory compliance are being
promoted in preparation for the launch of our
products around the world while we strengthen
research on the products’ functionality. We
aim to start selling in Southeast Asia by theend of this fiscal year. Through Thai Kyowa
Biotechnologies’ steady supply of safe, highquality HMOs , they will contribute to the healthy
development and growth of infants around theworld.
● We will promote the development pipeline
responsible for not only the above specialty
ingredients but also future candidates bystrengthening collaborations with the Instituteof Health Sciences built in April 2023.
* Barclays, “HMOs the next frontier of Infant Formulainnovation,” March 2022

ExampleConstruction of the HMOs production facility
completed

Hiroshi Nagano

Masayuki Ochiai

President
Thai Kyowa Biotechnologies Co., Ltd.

Sales & Marketing Department
Kyowa Hakko Bio Co., Ltd.

Thai Kyowa Biotechnologies’ HMOs production facility

3

In the year 2000, Kyowa Hakko Bio established the world’s
first*4 HMOs production technology capable of mass
production of HMOs at an industrial level.
HMOs are particular oligosaccharides*5 found in
human breast milk. HMOs are the third most common
solid component in human breast milk, after lactose

and lipids, and over 200 varieties of HMOs have been
discovered. Because it is rarely found in milk derived fromother mammals, such as cow’ s milk, but is particularly
abundant in human colostrum, it is known to be important
to infants. The European and North American markets
for baby formula with HMOs are continuously growing,
and the expansion of its consumption in China and South
Asia is also expected to grow due to predicted population
growth. The estimated average annual growth rate of
consumption is around 20–30%.
After considering the expansion into Asia, where
consumption is expected to expand, and the advantagesof securing excellent human capital and the raw materials
necessary for producing HMOs , we have integrated
the knowledge and technology of the Kirin Group’ s
Engineering Department and built an HMOs production
facility at Thai Kyowa Biotechnologies. HMOs production
began in 2022, and we aim to start selling HMOs to baby
formula manufacturers in 2023 while the Kirin Groupdevelops products to expand to countries where there is ahigher demand for HMOs .
*4 Tetsuo Endo et. al.,Appl. Microbiol. Biotechnol. 53, 257261(2000)*5 A carbohydrate whose molecules are composedof a relatively small number of simple sugars(monosaccharides). HMOs are mainly composed of
glucose, galactose, fucose, N-acetylglucosamine, andN-acetylneuraminic acid.

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Food and Beverages domain

The Kirin Group, since its establishment in 1907, has
expanded and grown its alcoholic and non-alcoholic
beverages businesses over more than 100 years. We
started accelerating our global expansion, focusing on
Asia-Oceania, in the 1990’ s and have since welcomed
Australia’ s Lion Pty Ltd. and the US’ s Four Roses
Distillery, LLC and Coca-Cola Beverages Northeast
into the group, developing various brands around theworld. The food and beverage business, with our parent
beer business at the center, remains one of our corebusiness domains today.

Achieving sustainable profit growth bypromoting our premium strategy andimproving productivity
The main markets for the Kirin Group are Japan,
Australia, and North America. These are all mature
markets, and we do not foresee any significant sales
growth happening in the near future. Thus, as a group,
we are aiming to achieve top-line growth by promoting
our premium strategy, in addition to the growth of ourexisting brands, while we fulfill local needs connected
to history, culture, etc. Furthermore, we will realize
sustainable profit growth by working to improve
productivity in response to changes in the organizationand the external environment.
In the alcoholic beverages business, our goal is
the premiumization of our alcoholic beverages throughpromoting our craft beer business, which is expanding invarious domains. Kirin Brewery Company, Limited is set
on promoting the development of a craft beer platform
in Japan, where the platform still has room to grow,and Lion Pty Ltd. is doing the same in the Australianand North American markets. In regard to the mature
market of North America, we are considering mergers
and acquisitions with multiple breweries we feel we cansynergize with.
The same issue applies to the non-alcoholic
beverages business. We are working to improve theprofit ratio by focusing on health in the Japanesemarket and enhancing our products in the Health
Science domain, which have high added value. In North
America, we are developing our bottling business, andwe will maintain high profitability by improving margins
through optimized pricing and promotion strategies.

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Kirin Brewery Company, Limited
Food and Beverages domain

Since its founding in 1907, Kirin Brewery has taken on a variety of challenges to provide new value to its customers
based on its “consumer-first approach” and “steady focus on quality.” Moving forward, we will continue to createhigh-value products that are supported by our consumers, such as KIRIN ICHIBAN , and promote the appeal of thebeer category by proposing new value such as craft beer. Through these efforts, we will strive to become a familiar
presence to our consumers and create a happy and prosperous future.

Working toward increasing revenue through the re-growth of core brands
and expansion of the Health Science domain
We aim to achieve medium- to long-term growth byexecuting three core strategies.
The first is to develop our brands in existing
businesses. In anticipation of the upcoming liquor tax
revisions, we will carefully select which investments tofocus on and work towards establishing a strong brandsystem.
The second is to strengthen new growth engine
initiatives that will accelerate future profit growth. In

the craft beer market, which has high potential, we willdevelop craft beer products and services utilizing all
available sales channels.
The third is to reform our profit structure.
Our goal is to improve productivity by building anorganizational structure and production and logistics
systems that can adapt to various changes in theexternal environment, such as the impact of the
COVID-19 pandemic and upcoming liquor tax revisions.

2022 Year in Review● In 2022, the “With Corona” lifestyle took root

and the beer market grew significantly due tothe recovery of restaurant consumption andother factors. In this environment, we aimed tomaximize corporate value by focusing on two
strategies: Build a robust brand portfolio andnurturing new growth engines.
● In the beer category, our KIRIN ICHIBAN andSPRING VALLEY brands led the way, achieving
a year-on-year increase for the second year
in a row with a ratio of approximately 104%
compared to the previous year.

2023 Initiatives● To respond to the expected increase in beerdemand following the October liquor tax
revisions, we will renew KIRIN ICHIBAN for the
first time in two years to strengthen our brand.
Furthermore, we will adopt a comprehensive
approach that integrates consumer touchpoints
in our craft beer business, nurturing it as a new
growth engine.
● We will focus investments in the KIRIN ICHIBAN
brand and craft beer to achieve further growth.
● We will create a unique craft beer experience byimplementing a comprehensive approach that
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Kirin Brewery Company, Limited

Understanding, (2) Experiences, (3) Touchpoints,and (4) Quality. As a brand to lead this initiative,
we will renew SPRING VALLEY Hojun 496 andfocus on nurturing it.
● In the non-alcoholic category, we will promote
the consumption of non-alcoholic beverages
as a daily drink of choice, rather than just a
substitute for beer. To achieve this, we willcater to consumer demand by offering a brandportfolio that meets their needs. This includes
strengthening sales of Kirin GREENS FREE andKIRIN KARADA FREE , a food with functional
claims.
● In the RTD category, we will establish a strong
brand system by catering to diverse preferences
through Kirin Tokusei and Kirin Honshibori TM
Chuhai , while simultaneously strengthening ourcore brand, Kirin Hyoketsu .
● With the increasing demand for at-home drinking
due to the COVID-19 pandemic, consumers arenow seeking added value in RTD products andtend to prefer refreshing and crisp tastes to pairwith their meals. In response, we will continue tofocus on the Hyoketsu Sugar-Free product line,
which has been expanding since last year, tomeet the growing needs of our consumers.

ExampleInitiatives to create a craft beer category

Tatsuro Makihara

Ikuko Kubo

Chief, Business Creation Department
Kirin Brewery Company, Limited

Chief, Business Creation Department
Kirin Brewery Company, Limited

In 2022, we collaborated with domestic craft breweries
to expand the craft beer category and introduce thediverse world of craft beer to consumers. Our first step
was to expand the lineup of our membership-basedbeer service, Home Tap, which offers customers theopportunity to choose from a variety of craft beers. We
also sold products from affiliated craft breweries, suchas Yona Yona Ale and Aooni IPA from YO-HO BREWINGCOMPANY and Tokyo White from Far Yeast Brewing
Company, all of which were extremely well received.
In addition, we launched a quality support program toenhance the quality of craft beer breweries across thecountry. Drawing on the brewing know-how cultivated by
the Kirin Group, we have put a system in place to offer
technical support and expertise for quality analysis andimprovement, with the aim of raising overall industry
standards. By focusing on improving quality, we hope tocontribute to the sustained attractiveness and value ofbeer in society.
Furthermore, in 2022, we organized a tastetesting event at SPRING VALLEY Brewery Tokyo tointroduce a “new way to enjoy beer” with the launch of

SPRING VALLEY Silk Ale [White]. The craft beer experience
was received enthusiastically, with 713 consumers
participating over two days and over 60% of them sharing
their impressions on social media. Going forward, we willcontinue to strengthen our focus on the SPRING VALLEY
brand in our craft beer efforts, creating experiences thatappeal even to those who are not yet fans of beer, andshowing them just how delicious beer can be.
Although our brand is performing well, we
recognize that there is still untapped potential in raisingawareness of the craft beer category. In 2023, we will be
implementing a comprehensive approach that integrates
consumer touchpoints around four key areas, to enhance
the craft beer experience. To showcase the appeal ofcraft beer, we will focus on creating a value proposition
through the first limited edition product of the SPRING
VALLEY brand, SPRING VALLEY Summer Craft Ale [Kaoru] .
We will also air a new TV commercial that highlights thecharm of the craft beer category and host collaborative
events with craft breweries, such as the Craft Beer
Festival. Additionally, we will leverage all consumer
touchpoints, such as restaurants and bars that use Tap
Marché and collaboration shops located throughout thecountry. As we look toward the future of beer, our ultimate
goal is to create a craft beer category that will be loved
and appreciated for a long time to come.

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Lion Pty Ltd
Food and Beverages domain

Lion Pty Ltd., whose headquarters is in Australia, has been working in the manufacturing, marketing, selling, anddistributing of alcoholic and non-alcoholic beverages since its establishment over a century ago. They believe they
are at the center of human connections, and therefore are taking social responsibility and making it their mission
to connect people. In 2009, Lion joined Kirin Holdings and has expanded globally in Australia, New Zealand, and theUnited States.

Promote the re-growth of focus brands andour U.S. and Australian craft beer-centered premium strategy
Lion will strengthen marketing activities in priority
brands such as XXXX . In the well-performing craft beerarea, Lion will focus on strengthening its operating basein Australia and the United States. Lion will also pursue
sustainable growth through transformation to a new
business operation model.

2022 Year in Review● The Australian on-premise alcoholic-beverage

market has been recovering from the impactof the COVID-19 pandemic, but the offpremise market has remained weak. Lion’ s onpremise sales have returned to the level they
were before the pandemic, and due to theirstrengthening of marketing activities centeredon their focus brand, XXXX , off-premisesales
resembled those of the previous year.
● The craft beer category also performed well,thanks to the contributions of Fermentum Pty
Ltd, whom we acquired in 2021.
● We achieved double-digit growth in the U.S.
through the growth of New Belgium Brewing’ s
Voodoo Ranger brand and our merger with
Bell’ s Brewery.

2023 Initiatives● Lion aims to generate top-line growth bystrengthening marketing activities for focus
brands, such as XXXX , Tooheys , and Hahn .
● Regarding well performing craft beers, Lion
aims to grow by enhancing foundations throughbroadening their product lines in Australia andthe U.S. and other activities.
● Lion aims to achieve sustainable growth bybettering customer services and lowering

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Lion Pty Ltd

costs through improved efficiency and flexibility andby optimizing head office functions to strengthen
corporate functions for the alcoholic beveragebusiness.

Value Creation Model
BUSINESS

ExampleExpanding sales of the Fermentum’ s
Stone & Wood craft beer brand we
acquired in November 2021

Lion, while a large manufacturer, has always respected
the craft brewery founder’ s spirit, and has led the craft
beer market by maintaining a high brand image while
scaling up its operations. This gained them the sympathyof Australia’ s number one independent craft brewery,
Fermentum, with whom they shared many common
values when it came to business and brewing beer.
Lion then determined they could synergize well with
Fermentum and made them a wholly owned subsidiary
in November 2021. In 2022, Lion successfully mergedwith Fermentum, achieving their goals amid a weakening
off-premise market. Stone & Wood, Fermentum’ s focus
brand, is expected to grow in the Australian market as afocus product of the Lion Group.

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Kirin Beverage Company, Limited
Food and Beverages domain

Kirin Beverage has been committed to creating a new beverage culture to meet consumer expectations through softdrinks based on the Kirin Group’s basic stance, a steady focus on quality and a consumer-first approach, which has beencultivated since our establishment almost half a century ago, in 1963. While Kirin Beverage provides unique products andoffers consumers new value through consistent marketing that follows our Brand Purpose, we are also sharing the joy offood through our country-wide sales network and by creating sales floors based on a consumer perspective.

Working toward increasing revenue through the re-growth of core brands
and expansion of the Health Science domain
As part of the Kirin Beverage Group 2022–2024 MediumTerm Business Plan (2022 MTMP), we are working toregrow existing non-alcoholic beverage core brands, witha focus on Kirin Gogo-no-Kocha and Kirin Nama-cha ,and to expand the sales of Lactococcus lactis strain
Plasma (LC-Plasma)-containing beverages in the Health
Science domain. Through these efforts, we will build astrong brand portfolio that showcases our strengths andimprove revenue.
Furthermore, we are working to develop andestablish a sustainable business infrastructure forthe future and to promote the improvement of thecost competitiveness of our production and logistics
systems. Through these initiatives, we are driving theKirin Group’ s CSV management and contributing to theresolution of social issues.

2023 Strategy

Provide “Health with good taste for everyone’s daily life” at the best touchpoints
and achieve high proﬁtability by creating a strong brand that is supported by consumers.
Drive the Kirin Group’s CSV management and contribute to solving social issues
Strategic Issue 1

Build a strong portfoliothat contributes to everyday health
1 High proﬁtability through
LC-Plasma-containing beverages
2 Re-growth through cultivation of core brands

Strategic Issue 2

Contribute to daily health
Develop and establish
business infrastructure
1 Strengthen cost competitivenessof production and SCM

2022 Year in Review● Until March 2022, the Japanese beverage

market was affected by the semi-emergency
COVID-19 prevention measures, but from April
2022, the market grew larger than the previous
year due to good summer weather and therevival of economic and human activities.
● Sales of functional and sugar-free teas
grew because of the increasing healthconsciousness from not being able to see afuture free of COVID-19.
● Our core brands performed well in thisenvironment because we promoted efforts
toward the continual growth of the existing
non-alcoholic beverages business and the
Health Science domain. Compared to last year,
the sales of Kirin Gogo-no-Kocha grew 3%, Kirin
Nama-cha grew 2%, and LC-Plasma-containing
beverages grew 26%.

2023 Initiatives● We have newly established a pledge toconsumers, “Health with good taste foreveryone’ s daily life,” as a broad concept tointegrate and accelerate our growth strategy.
While focusing on health as the core of
Kirin Beverage’ s competitive advantage
and contributing to consumer’ s mental and

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Kirin Beverage Company, Limited

physical health with good taste throughhealth-driven products and services, we
promote “sustainable recycling of containers
and packaging” as part of the Kirin Group’s
Environmental Vision and contribute to future“communities” that connect people andsociety.
● As in our 2022 MTMP, in 2023 we will continue
to promote the re-growth of our core brands
and challenge ourselves to focus resourceson Kirin Gogo-no-Kocha and Kirin Nama-cha
and to expand mid- and high-level price range
products.
● We will return to a customer-first approachand a steady focus on quality, cultivate a
corporate culture that prioritizes quality, andpromote our functional enhancement and ourtransformation into a proud and responsibleorganization. To be specific, we will promote
initiatives to strengthen marketing-relatedorganizational abilities and businessprocesses, optimize our production and SCM
systems, install and utilize ICT (Information
and Communication Technology), and more.

ExampleKirin Gogo-no-Kocha initiatives
Shinpei Otakeno
Marketing Department
Kirin Beverage Company, Limited

Kirin Gogo-no-Kocha is one of the most consumersupported brands of not only Kirin Beverage but also of
Kirin Group, and it is the best-selling brand of black tea
soft drink. When it comes to bottled Japanese black tea,
we have continued to take on new challenges, like sellingJapan’ s first bottled black tea, since its release in 1986
and have been leading the black tea market. In 2022, we
continued to provide consumers with the opportunity
to enjoy black tea anytime and anywhere by following
our Brand Purpose, “Happy Tea, Gogo-no-Kocha, ” andprioritized Kirin Gogo-no-Kocha Straight Tea , Kirin Gogono-Kocha Milk Tea , and Kirin Gogo-no-Kocha Lemon Tea
as our 3 mainstay products.
Further, we want to provide more opportunities for

consumers to drink black tea and to establish a cultureof drinking black tea in Japan, so we are working to raiseawareness of our sugar-free black tea, Kirin Gogo-noKocha Oishii Muto (sugar-free) . In Japan, the culture ofdrinking sugar-free tea, especially green tea, while eating,relaxing, etc., is widely rooted. We want to increase theopportunities to drink sugar-free black tea so that it can beenjoyed by everyone as equally as other sugar-free teas,
and we thought we could provide consumers with newvalue in black teas, so in 2011 we launched Kirin Gogono-Kocha Oishii Muto (sugar-free) . Over approximately 11
years of raising awareness of the brand, the recognition
and image of sugar-free black tea has been steadily
spreading. Additionally, the rise in health-consciousness
is causing a rise in the need of sugar-free beverages.
In 2022, sales of the Kirin Gogo-no-Kocha Oishii Muto(sugar-free) series grew for the 10th year in a row andsold over 10 million cases for the second consecutive
year thanks to efforts to fully renew Kirin Gogo-no-Kocha
Oishii Muto (sugar-free) for the first time in 3 years and to
renew Kirin Gogo-no-Kocha Oishii Muto Kaoru Lemon , theimprovement of our products’ freshness, and our largescale promotions of the brand as a black tea that goes
well with bento.
Going forward, we will not only offer taste value
in the form of black tea beverages but also various social
values, mainly in the domains of Health, Community, andEnvironment, as a brand that contributes to the resolutionof social issues.

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MercianFood and Beverages domain
Under the wine business’s slogan, “Creating a pleasant future with wine,” Mercian conducts corporate activities to realizea spiritually rich society, valuing gratitude for society, the blessings of nature, and all stakeholders, including consumers,
just as is stated by our company name, which combines the French words “Merci” (thank you) and “an” (person).
As a leading wine company, we continue to take on the challenges of promoting the appeal of the wine market
and creating a new wine culture, always implementing consumer-based management, and continuously providing safe,
secure, high-value added, and attractive products and services for consumers.
We have also received high praise over the years due to the expansion of the distilled spirit business, including
single-distilled shochu and other shochu in Yatsushiro-Shiranuigura Distillery, and of the umeshu business by using
technology cultivated from wine and shochu production.

Based on CSV management, and by understanding consumers’ insights,
provide a valuable experience in enjoying a life with wine
The appeal of wine is its variety, and consumers selectdifferent types of wine depending on their level ofinterest in wine and the occasion. Each of our winebrands has a unique charm and serves as a door thatwelcomes consumers, so by taking advantage of this,we can provide consumers with a rich life with wineand create a future in Japan where enjoying wine iscommonplace.

Creating a pleasant future with wine

Easily available
Safe
Open the door to wine

Enjoy
Expand accessto wineStories
Connect wine lovers

Pursuit
Wine creators’
passionOpen the door to
global wine

Open the door topremium wineEnter the deep worldof ﬁne wine

Domestically Produced Wine

Japan Wine Imported wine

Imported wine

Revitalize the wine market byserving as the market door

Cocreation with wineries
across the world

The world’ s No. 1* Chilean
wine

Oishii-SankaboushizaiMutenka Wine

Mercian Wines

Casillero del Diablo

Japan recognized as one of
the world’ s foremost wine
regionsChâteau Mercian

2022 Year in Review● Following the lift of movement restrictions put inplace during the COVID-19 pandemic, while theon-premise wine market is on track to recovery,
the off-premise wine market is undergoing a
sharp decline in consumption. Due to this, theJapanese wine market saw a 3% total decreasein wine sales, 7% for Domestically Produced wine
sales and 1% for imported wine sales, in 2022
compared to 2021. Our company saw a total
decrease of 6% in wine sales, 7% for domestic
wine and 4% for imported wine, on a quantity
base.

● Bistro , a Domestically Produced wine; imported

wines, including the high-priced wine Robert
Mondavi and a focus brand wine, Casillero delDiablo ; and Mercian Wines , a new wine brandlaunched in 2022, all performed well.

2023 Initiatives● We will expand the wine market by refining

product value in each category and promoting theappeal of wine. More specifically, we will spreadawareness of Oishii-Sankaboushizai-Mutenka
Wine , a Domestically Produced wine for wine
beginners; wine brands that expand the enjoymentof wine, including Mercian Wines , which waslaunched in 2022, and Casillero del Diablo fromP67

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Mercian

Chile’ s No. 1 winery;* and Château Mercian , awine brand that promotes the appeal of wine.
● Through the Mercian Wines series that was
launched in order to provide a new option ofwine, we cooperated with producers acrossthe world and released products that were cocreated for Japanese consumers. We are creating
and providing a new wine that has the appealof sustainability. Additionally, we are promoting
the added value of the brands of our overseas
partners, along with their stories, through various
information channels. We will expand theJapanese wine market by focusing on Casillerodel Diablo , which sold particularly well.
● 2023, which marks the 145th anniversaryof Japanese wine production and the 20th
anniversary of the opening of Mariko Vineyard,
will be an important year for Japan wine. We aim
to further revitalize the Japanese wine market
by using sales channels for commercial andindustrial use as well as enrich contents for
consumer experiences (events for community
coexistence, a special tour, etc.) so Japan will berecognized as one of the world's foremost wine
regions. In particular, we rebranded the Quality
series (Aiakane , Moegi , and Momoiro ) for the firsttime in five years, in April, and we aim to acquire
trial users, increase the recognition of Château
Mercian , and expand sales.
*INTELVID-Chile

Value Creation Model
BUSINESS

ExampleStarting consulting services forstart-up wineries for the sustainable growthof Japan wine
Katsuhisa Fujino
Senior Winemaker
Château Mercian
Brand Group, Marketing Department
Mercian Corporation

Despite the Japanese wine market continuing to be
stagnant, the share of Japan wines in the market
increased by approximately 1.5 times from 2015 to 2021,
and the number of wineries increased by approximately
1.5 times over the last five years. However, many startup wineries have low revenue and are small-scale, and thenumber of places to systematically learn wine production
is limited, so the wineries face big challenges in termsof quality, including cultivation, vinification technique,and more. In 2022, to solve these structural issues in theJapan wine industry, we started a consulting business forstart-up wineries, taking advantage of our winemaking
experts and 145 years of wine production knowledge.
Our company has provided appropriate support
according to each winery’ s issues, from technicalsupport for viniculture and vinification to a wide range ofconsulting services ranging from marketing to sales, by
taking advantage of our human and intellectual assets.
Currently, we mainly provide consulting services at four
wineries in Miyagi and Iwate Prefectures. We believe that
our consulting services will revitalize the whole Japanwine market and lead to the growth of our Japan wine. We
will contribute to revitalizing the Japan wine market andincreasing the appeal of the market by not only supporting
Japanese wineries but also fulfilling our role to realize thesustainable growth of the Japan wine industry.
*Reference: Overview of the Alcohol Production Industry andAlcohol Wholesale Industry, National Tax Agency. Japanese
only.

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Coca-Cola Beverages Northeast, Inc.
Food and Beverages domain

Originating as a bottling business in New Hampshire in 1977, Coca-Cola Beverages Northeast has been operating in thenortheastern United States for over 40 years. We were known as Coca-Cola Bottling Company of Northern New England
until October 2019 when we changed our name to Coca-Cola Beverages Northeast, and are now one of the ten largest
Bottlers in the United States. Coca-Cola Beverages Northeast not only provides consumers with delicious beverages but
is also committed to our Values of quality, passion, integrity, diversity, and resourcefulness by investing in our people,
our communities, and our customers’ success.

Generate stable operating profits through pricing strategies
and cost management
With the U.S. economy expected to slow down, we
will develop aggressive pricing strategies and in-store
promotions that leverage the strengths of the Coca-Colabrand. Furthermore, we aim to generate stable profit
by carefully managing operational and supply chain
expenses.

2022 Year in Review● We increased sales by implementing strategic

price management.
● In response to the rise in raw material and laborcosts, we implemented appropriate pricing
strategies and cost control, achieving resultsthat far exceeded our initial plan.
● One of the implemented pricing strategies wasa price increase, which was implemented jointly
by the Coca-Cola Company and its independent
bottling partners. In doing this, pricemanagement tailored to the characteristics
of each region was key. Coca-Cola Beverages
Northeast conducted promotions at theappropriate times and managed the selling
price increase strategically through close
cooperation with the sales strategy team,sales representatives, and brand partners. Thishas boosted sales in retail stores during the
COVID-19 pandemic, resulting in significant
sales growth.

2023 Initiatives● We will generate more operating profit than

we did in 2022 by following through withappropriate pricing strategies and cost control
while keeping an eye on inflation and consumer
trends.

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Coca-Cola Beverages Northeast, Inc.

● We will develop pricing and promotional

strategies for each category and improve
profitability of each by focusing on profitable
SKUs (returnables), for example.
● We will implement initiatives to control the riskof rising distribution and warehousing costs, byimproving productivity and enhancing operating
profits.
● We will aggressively make facility investments
to expand the foundation for growth. For
example, we will improve operational
efficiency in the Boston sales center (sales
and distribution center) by installing a semiautomatic picking system.

ExampleImproving productivity based on data
management that utilizes SAP

Paul Herring

Jeffrey Alchowiak

Vice President of IT
Coca-Cola Beverages Northeast, Inc.

Director of Business Intelligence
Coca-Cola Beverages Northeast, Inc.

David Dumont

Michael Adam

Vice President of Operations
Coca-Cola Beverages Northeast, Inc.

Sr. Director of Logistics
Coca-Cola Beverages Northeast, Inc.

Coca-Cola Beverages Northeast has been reinforcing
data management that utilizes SAP. Through these
efforts, we were able to not only improve the operational
efficiency of HR, manufacturing, warehousing/distribution,
sales, and other sectors, but were also able to reduce
costs during a time of unprecedented inflation andsupply chain disruption amid COVID-19. In particular,

we improved the speed of identifying and addressing
challenges by constructing a system that visually depicts
the performance of various departments, especiallydistribution, warehousing, and sales, to perform datacomparison between sales centers. This has contributed
to the improvement of productivity for each department.

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Pharmaceuticals domain

In the 1980s, the Kirin Group ventured into
pharmaceutical research and development by
combining their expertise in microorganisms and cells
from their original beer business with biotechnology.
Today, this has become one of the group’ s corebusinesses, and we are expanding it globally with afocus on biopharmaceuticals.
In 2008, Kyowa Kirin was established througha merger between Kyowa Hakko Kogyo and Kirin
Pharma. Since then, Kyowa Kirin has developed into a
cutting-edge R&D company that leverages state-of-theart biotechnology with a particular focus on antibody
technology. As a leading Japanese life science
company, Kyowa Kirin is committed to pursuing new
possibilities and contributing to the health and wellbeing of people around the world by creating new value.

Maximizing the value of our global
products and strengthening thepipeline as a Japan-based Global
Specialty Pharmaceutical company
Based on the strategies outlined in the FY2021-2025
Medium-Term Business Plan, Kyowa Kirin aims to achievea CAGR (Compound Annual Growth Rate) of 10% or higher
in revenue and an operating profit margin of 24% or higher
by 2025. In addition, the company intends to establish
a foundation for sustainable growth beyond 2025. As a
Japan-based Global Specialty Pharmaceutical company,
Kyowa Kirin aims to establish a business foundation andachieve top-line growth by maximizing the value of global
products and strengthening the pipeline to support our
growth beyond 2025.
Kyowa Kirin’ s global strategic products are
growing steadily. In particular, Crysvita sales reached 127
billion yen in revenue in 2022, becoming the first everproduct to exceed sales of 100 billion yen. Since spring
2023, Kyowa Kirin has taken over sales activities for
Crysvita in North America from Ultragenyx and is working

to maximize the value of the product by fully leveraging theevidence and know-how accumulated since the beginningof its launch in 2018.
Kyowa Kirin is committed to creating innovative
pharmaceuticals for sustainable growth beyond 2025.
The company will accelerate the progress of its pipeline
including KHK4083/AMG 451 (generic name: rocatinlimab),which is currently in Phase 3 clinical trials in collaboration
with Amgen Inc., and KHK4951 (generic name: tivozanib),which completed Phase 1 trials last year and will advanceto Phase 2. In addition, the company will continue to focus
on R&D investments for growth, including the clinicaldevelopment of antibodies applied with its proprietary
Regulgent bispecific antibody technology.

*UMN: Unmet Medical Needs

KIRIN INTEGRATED REPORT 2023

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Kyowa Kirin Co., Ltd.

ExampleListening to patients and addressing unmet
medical needs to drive patient advocacy on
a global level

Lauren Walrath
VP, Public Affairs
Kyowa Kirin Inc.

Stacey Minton
SVP, Corporate Affairs
Kyowa Kirin International plc.

Yoshimi Gibbs
PR Group Associate Director
Corporate Communications Department
Kyowa Kirin Co., Ltd.

In its vision for 2030, Kyowa Kirin has made “addressing
patient-centric healthcare needs” a one of the pillars of
its strategy. To this end, the company has been globally
expanding their patient advocacy activities on Rare
Disease Day (RDD), which is on the last day of February
each year, with the aim of providing patients with better
environments for medical care and living. Throughcommunication and collaboration with patient andhealthcare professional communities, we aim to promote
the correct understanding of diseases while working
towards addressing unmet medical needs. Our ultimate
objective is to make people who are facing diseases smile.
In Japan, Kyowa Kirin sponsored RDD Japan andparticipated in STEP,* a disease information community
established by the NPO ASrid. Through STEP, the company
is contributing to the promotion of a system that responds
to the “want to know” needs of patients, their families,
and other stakeholders. The company is also proactively
working on internal awareness-raising activities. On its
internal social media platform, numerous employees
posted photos or videos demonstrating radio calisthenics
for improving psoriasis symptoms and meal recipes forpsoriasis patients.
Zebras are used as a symbol of rare diseases,
and in the U.S., Kyowa Kirin collaborated with National
Organization for Rare Disorders (NORD) to carry out
the #ShowYourStripes campaign, aimed at deepening
understanding of these diseases. In Europe, the company
used various media channels, such as artworks, diseaseawareness advertisements in newspapers, and online
news programs, to communicate its initiatives and thechallenges that patients with rare and intractable diseases.
In Australia, Kyowa Kirin collaborated with XLHAustralia, a support organization for patients with X-linked

Hypophosphatemia, to conduct the first survey on thechallenges faced by patients, their families, and caregivers.
By sharing the survey results, the company was able toraise awareness about the disease. In Singapore, thecompany participated in the Carry Hope 7.7 KM Challenge
2022 organized by the Rare Disorders Society and posted
on social media to show our support, running, walking, andcycling the 7.7 km distance.
Kyowa Kirin will continue addressing rare andintractable diseases and providing support globally torealize our philosophy, “Contribute to the health and wellbeing of people around the world.”*Strategic Translational action for Empowering Patients.
A platform established with the aim of serving as a
strategic bridge for patients and their families to empowerthemselves. Its goal is to empower stakeholders from various
perspectives, including disease areas, patients and families,
healthcare professionals, companies, and organizations.

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Message from the Chief Financial
Officer

Using cash generated from
portfolio and balance sheet
management to create newvalue and accelerate our growth

Financial and Non-financial
Highlights

Management Analysis Of Financial
Position, Operating Results,
And Cash Flows

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normalized EPS CAGR of 11% or more (compared to
FY2021). Our guidance targets a normalized operating
profit CAGR of at least 13% (compared to FY2021).
For non-financial KPIs, we have establishedeight indicators that are directly related to economic
value in the three categories of “Environment,”“Health,” and “Employees.”──Looking back at FY2022, please tell us about
the progress of the 2022-2024 MTBP.

Message from the Chief Financial Officer

Using cash generated from portfolio
and balance sheet management to create new value
and accelerate our growth
Shinjiro Akieda
Senior Executive Officer
Kirin Holdings Company, Limited

2022-2024 Medium-Term Business
Plan (2022-2024 MTBP)
Steady progression toward achieving
our goals for the final year of thebusiness plan

long-term management plan. Our goal is to expand
corporate value by scaling up the Health Sciencebusiness, developing its revenue base, and utilizing abusiness portfolio that encompasses the three domainsof Food & Beverages, Pharmaceuticals, and Health
Science.

──Please briefly explain the 2022-2024 MediumTerm Business Plan.

──What are the financial and non-financial Key
Performance Indicators (KPI) for the 2022-2024
MTBP?

The 2022-2024 MTBP is the second management plan
aimed at achieving the Kirin Group Vision 2027 (KV2027)

Our financial KPIs are a ROIC of 10% or more andOur ROIC improved by 0.9% to 8.5% from the previous
year’s 7.6%, mainly attributed to an increase inconsolidated normalized operating profit. Normalized
EPS increased by 15 yen from the previous year toa record high of 171 yen, driven by the increase inconsolidated normalized operating profit and the effectsof share buyback, among others. Despite operating in achallenging business environment, we are proud to havedelivered solid results.
We are generally making steady progress toward
our goals for the end of 2024, the final year of the MTBP,
including the guidance item of normalized operating
profit CAGR and non-financial targets. We will continue
striving to improve corporate value and achieve bothfinancial and non-financial targets as a group.

Business Portfolio
Responding to changes in the businessenvironment while continuing to
generate cash and investing in growth──What is your philosophy with regard to themedium- to long-term business portfolio?
We are always striving to achieve the optimal businessportfolio to achieve KV2027. Our policy is to utilize the

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stable cash flow from our existing Food & Beverages
domain to fund growth investments in the Health
Science and overseas craft beer businesses. In the
Pharmaceuticals domain, we will continue to invest in
growth opportunities within the scope of our free cashflow.
The Board of Directors convenes at least twicea year to discuss our business portfolio and cash
allocations. Our investments in the overseas craft
beer business and the sale of China Resources Kirin
Beverages, which was an equity method affiliate, wereamong the outcomes of these discussions. Our current
business portfolio is largely centered around our corebusinesses, so for the time being, we will prioritize
increasing our cash generation by improving theefficiency and growth potential of each business.
At the same time, the Board will continue todiscuss growth investment in the Health Science
domain and the overseas craft beer business.

Items

ThemesClimate Change

Environment

Health(Scope1+2 vs. 2019)

Containers
and Packaging

Percentage of recycled resin used in PET bottles

Water Resources

Water use intensity at manufacturing sites
with high water stress

Progress of
mid-term
health sciencestrategy

Organizational
CultureEmployees

Non-ﬁnancial Indicators
Reduction rate of GHG emissions

Diversity
Occupational
health and safety

Lion (Australia)（Water use intensity ＝ Water usage / Production amount）

Achievement level in supporting the maintenanceof immune function
1. Recognition rate of LC-Plasma function in Japan
2. Number of people continuing to take LC-Plasma

Achievement level of new value creation in the immunity,
brain function, and intestinal environment domains
and Achievement level of promotion of collaboration
with pharmaceuticals domain
Employee engagement score
Achievement level in “Increasing diversity” *2

1. Ratio of female managers in Japan 2. Ratio of career hires in Japan

Lost time injury frequency rate *3

Target Level in 2024
23%

(50% in 2030）

38%(50% in 2027）

Under 3.0 kl/kl(Under 2.4kl/kl in 2025)

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

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

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Food & Beverages domain

Many of our businesses in the Food & Beverages
domain operate primarily in mature markets, which
are anticipated to contract in the future. To address
this, we must prioritize premiumizing our products
and improving operational efficiency. Our focus will
be on expanding our most profitable products andservices while simultaneously optimizing our salesorganization and reducing costs through SCM (Supply
Chain Management) reforms that utilize ICT (informationand communication technology) and other methods toensure we meet our normalized operating profit targets.

Pharmaceuticals domain

Our challenges are to improve production and sales
infrastructure for our global strategic products andto expand our next-generation pipeline. While we willcontinue to steadily expand our global strategic productofferings, including establishing an independent sales
system in North America, we will also prioritize thedevelopment and strategic investments in enhancing
our next-generation strategic products, which will be thekey driver of future growth.

Health Science domain

Our challenges are to expand the scale of our businessand improve profitability. To achieve this, we will focus
on sales growth of Lactococcus lactis strain Plasma(LC-Plasma) and organic growth of Kyowa Hakko Bio’ s
specialty ingredients, such as Citicoline*1 and humanmilk oligosaccharides (HMOs*2), which are expected tosecure high profitability. Additionally, we will collaborate

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with FANCL Corporation and pursue M&A opportunities
to convert all businesses in the Health Science domain
into highly profitable ventures.
*1 An ingredient found in the body that maintains the cell
membranes of the brain and nerve cells, and has been used
for many years around the world in medicines for brain
diseases and health foods that support the improvement ofcognitive functions. In Japan, it is currently classified as apharmaceutical product.
*2 A generic term for oligosaccharides contained in breast
milk. More than 200 kinds are contained in breast milk, andthe results of research contributing to immunity and brain
function, among others, have been reported.

Balance Sheet Management
Using GCMS to improve increase
capital management efficiency while
streamlining inventory──Please tell us about initiatives to improve thebalance sheet.
To achieve a ROIC of 10%, we plan to conduct asset
reduction of more than 100 billion yen during the2022-2024 MTBP. In 2022, we expanded our Global
Cash Management System (GCMS) to more Group
companies. This system has enabled us to consolidate
and transfer funds to and from overseas subsidiaries
in a timely manner, resulting in a reduction of cash
balances by approximately 40 billion yen.
With regard to the Cash Conversion Cycle (CCC),
we were able to achieve working capital improvementsof 10 billion yen by introducing SAP and improving ourprocesses. Moving forward, we plan to continue reducing
CCC by promoting further process improvement through
SAP and DX (digital transformation), improving demand
forecasting accuracy, and reducing inventory volume.
Furthermore, we reduced cross-shareholdings to 4.5%

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of total capital in 2022, which attains the 2022-2024
MTBP target of less than 5%. In addition to growing ourbusinesses, we will continue actively working to improve
our balance sheet.

──How is cash allocation coming along for the2022-2024 MTBP?
Despite the slightly weakened operating cash flowcaused by the prolonged spread of COVID-19 and rising
global costs, our overall cash allocation policy remains
unchanged as we strive to generate a figure as close to
700 billion yen*3 as possible.
We are proceeding smoothly with cash
generation of 100 billion yen through asset reduction,and in 2022, we used the proceeds from selling China
Resources Kirin Beverages to buy back 50 billion yen of
our own shares and to invest in our overseas craft beerbusiness through M&A. Our goal is to achieve an ROICof 10% or more and a normalized EPS CAGR of 11% ormore by 2024, as outlined in the 2022-2024 MTBP, bycontinuing disciplined capital investment while returning
profits to shareholders through stable dividends.
*3 We expect cash flows from operating activities ofapproximately ¥700.0 billion in total during the three-year
period of the 2022–2024 MTBP.

──What is the status of investments inintangible assets?
To create corporate value, it is also essential to invest
in intangible assets that will serve as the foundation
for innovation. The Kirin Group focuses on (1) Brand
development in the Food & Beverages domain, (2) R&D
in the Pharmaceuticals domain, (3) ICT investments forutilization of digital technologies, and (4) Human capital
investment.
In response to the COVID-19 pandemic andValue Creation Model
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For 2023, we are implementing price revisions and cost
reductions in all our businesses to secure our earnings
base, and we will step up investments to nurture ourbrands over the medium to long term.
In R&D, we will invest in expanding our future
pipeline in the Pharmaceuticals domain while increasing
efforts to create and expand highly profitable specialty
ingredients in the Health Science field.
In terms of investments in ICT, in addition to
our efforts to streamline business processes, we will
intensify our efforts to create value through the use ofdigital ICT for the future.
For human capital, we will achieve sustainablegrowth and value improvement through the developmentof specialized and diverse human resources, aswell as enhancing our organizational capabilities.
To accomplish this, we will expand our DX training
programs and introduce human capital management foreach function.

── Would you tell us your shareholder returns
policy and thoughts on the current share pricelevel?
The Kirin Group has always prioritized shareholder
return. In 2022, based on our basic policy, we were able
to maintain a dividend payment ratio of normalized
EPS at 40% or more and increase the dividend by 4
yen to 69 yen. Going forward, our goal is to distributeour proceeds to shareholders stably and consistently.
However, to ensure stable dividends in the long run, we
believe that investing in growth is important. Therefore,
we will flexibly review share buybacks, while considering
the balance between generated cash and growth

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investment.
We recognize that the current share price level
doesn’ t meet our investors’ expectations. Therefore,
we will focus on achieving growth and improving
profitability in each business area while reviewing ourbusiness portfolio to achieve KV2027. In particular, we
aim to attain a share price level based on an appropriate
valuation by ensuring that stakeholders understand theKirin Group’s future potential through the early expansion
and profitability of our Health Science domain.

Conclusion
Accelerating our growth toward
KV2027──Finally, please give us a message for our
stakeholders.
To achieve sustainable growth for the Kirin Group, each
operating company must independently enhance its
organizational capabilities and implement the PDCA
cycle to achieve short-term goals, while executing
initiatives to create value for the future. We aim to work
closely with our operating companies to identify any
issues and implement specific solutions by engaging
in dialogue from the unique perspective of a holding
company. Additionally, we will contribute to maximizing
corporate value by integrating management andfinancial strategies, continually reviewing future
cash flows for each business, and optimizing theentire Group’ s business portfolio through ongoing
management considerations.

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Financial and Non-financial Highlights
Financial and Non-financial Highlights

Consolidated Financial
Highlights

Key ﬁnancial
performance indicators

Revenue

ROIC

8.5%

2023Guidance → 8.5%
Normalized EPS¥171

2023Guidance → ¥171

Key non-ﬁnancial performance indicators
Environment

Environment

Climate Change

Containers and Packaging

Reduction ratio of GHG emission

Percentage of recycled resin used

(Scope 1 and 2) (compared with 2019)*1

in PET bottles*2

18%

8%

2024Target → 23%
2030Target → 50%
Health2024 Target → 38%
2027 Target → 50%

Progress of mid-term health science strategy

Achievement level in supporting the maintenance of immune function
Recognition rate of
LC-Plasma function in Japan

Environment

Water use intensity at manufacturing
sites with high water stress*3(Water use intensity =Water usage / Production amount)

3.7kl/kl

Employees

Diversity

Ratio of female managers in Japan*4

Ratio of mid-career hires in japan*5

2024Target → 15%

2024Target → 30%

10.6%

27.3%

¥1,989.5 billion
Normalized Operating Profit¥191.2 billion
Profit attributable to ownersof the Company¥111.0 billion(FY2022, Actual)

2024Target → 75%

Employees

Achievement level in “Increasing diversity”

Organizational Culture

70%

2024Target → 1,900,000 people

Employees(Australia)

Employee engagement score

640,000people

2024Target → 45%
2027Target → 50%

Lion2024 Target → Under 3.0 kl/kl
2025 Target → Under 2.4 kl/kl

Number of people continuing to take LC-Plasma

32%

Water Resources

Occupational health and safety

Lost time injury frequency rate*60.902024 Target → 0.95（0.40 in Japan）(Results in 2022)

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Supplemental information for the calculation of GHG emissions (Scope 1+2) for the Kirin Group is as follows.

（1）Calculation Method
・Emissions resulting from the use of fuel and steam are calculated the unit calorific values and emission factors stipulated in Japan’s "Law
Concerning the Promotion of the Measures to Cope with Global Warming" and "Law Concerning the Rational Use of Energy". However, for Lion,the unit calorific values and emission factors specified by the Australian, New Zealand, and U.S. governments are used for calculations.
・For electricity, the calculation is based on the amount of electricity purchased multiplied by the emission factor of each electric powercompany. In the case of Japan, adjusted emission factors for each electric utility are used. If emission factors for each electric utility are notavailable, national emission factors published by the IEA are used.
・GHG emissions include emissions associated with the generation of electricity sold.
（2）Boundary
・The following companies are targeted.
Business

Company

Japan Beer and Spirits
Business

Kirin Brewery, Kirin Distillery, Spring Valley Brewery, The Brooklyn Brewery Japan, Ei Sho Gen, Kirin Brewery (Zhuhai)

Japan Non-Alcoholic
Beverages Business

Kirin Beverage, Shinshu Beverage, Hokkaido Kirin Beverage, Kirin Maintenance・Service,each site of Kirin Beverage Service (Hokkaido, Sendai, Tokyo, Chubu, Kansai), Kirin Vivax, Toukai beverage Service

Oceania Adult Beverages
Business

Lion, New Belgium Brewing

Pharmaceuticals Business

Kyowa Kirin, Kyowa Kirin Frontier, Kyowa Medical Promotion, Kyowa Kirin Plus,
Kyowa Kirin China Pharmaceutical, Kyowa Kirin (USA)

Other Businesses (allcompanies included)

Mercian, Nippon Liquor, Daiichi Alcohol, Wine Curation, Interfood, Vietnam Kirin Beverage, Four Roses Distillery,
Kyowa Hakko Bio, Kyowa Pharma Chemical, Kyowa Engineering, BioKyowa, Shanghai Kyowa Amino Acid,
Thai Kyowa Biotechnologies, Kirin Holdings, Kirin Business Expert, Kirin Business System, Koiwai Dairy Products,
Kirin Echo, Kirin & Communications, Kirin Engineering, Kirin City, Kirin Techno-System, Kirin Group Logistics（3）Base Year Calculation
・GHG emissions for the base year (2019) have been retrospectively recalculated to reflect significant structural changes, including subsequentbusiness acquisitions and divestitures.
*2 PET resin used by Kirin Brewery, Kirin Beverage, and Mercian for product packaging is included in the calculation.
*3 Manufacturing sites with high water stress are defined by us based on Aqueduct ʻs Water Stress and WRF’ s Baseline Water Depletion. The
identified sites breweries are Tooheys Brewery/James Boag Brewery/Castlemaine Perkins.
*4 The ratio of female managers in Japan is based on the employees with a domicile at Kirin Holdings Co., Ltd. However, executive officers andrehired employees are not included.
*5 The ratio of mid-career hires in Japan is based on the employees with a domicile at Kirin Holdings Co., Ltd. However, rehired employees are
not included.
*6 Main Group companies that have production and logistics functions within the Group are included. Partner companies within the factory
premises are also included.

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Management Analysis Of Financial Position, Operating Results,
And Cash Flows(1) Operating Results➀ Overall business conditions

In 2022, in addition to the prolonged COVID-19
pandemic, the emergence of geopolitical risks, global
inflation, and the weak yen, among others had asignificant impact on corporate management. In
terms of consumer behavior, it was a year of majorchanges in society, including a further increase in healthconsciousness and further polarization of consumption.
In this environment, the Kirin Group accelerated
its efforts to respond to changes in society under
its Kirin Group Vision 2027 (KV2027) long-term
management plan, including increasing profits in the
Food & Beverages domain, strengthening the global
foundation of the Pharmaceuticals domain, andexpanding the Health Science domain. Kirin Holdings
has been developing its pharmaceutical business formore than 40 years on the strength of fermentation andbiotechnology cultivated through the beer business,
which has continued for more than 100 years since
its foundation, and Kirin Holdings is promoting its
health science business, newly launched under
KV2027, by leveraging these core technologies. Kirin
Holdings believes that using its superior fermentation
technologies and biological knowledge to grow thehealth science business- leading to solutions to healthissues- will ensure the future of the Kirin Group’ s
continued existence and sustainable growth as acompany.

Food & Beverages
domainWhile building a strong brand system by concentrating on its mainstay brands, Kirin Holdings also worked
to expand products and services that offer new value propositions. In response to soaring raw materials
and fuel prices, each Group company worked to improve profitability through productivity improvements
and product price revisions.

Pharmaceuticals
domainAs a Japan-based Global Specialty Pharmaceutical company, Kirin Holdings worked to strengthen thefoundation in Japan as well as overseas. In addition to steadily growing global strategic products, Kirin
Holdings promoted the development of next-generation strategic products.

Health Science
domainKirin Holdings accelerated the development of Lactococcus lactis strain Plasma (LC-Plasma) to expand
its business domain. In addition to the development of its own group products such as beverages andsupplements, Kirin Holdings promoted sales of raw material to external partner companies and expanded
the number of functional food products. As a result, the sales amount of LC-Plasma-related businessincreased 40% from the previous year. In addition, Kirin Holdings continued its efforts to raise awarenessof “immune care” and contributed to solving consumers’health issues.

Kirin Holdings will use the strengths of theKirin Group to solve not only health issues, but also
other issues facing society, while at the same timecreating economic value as a company and maximizing
corporate value. During the fiscal year under review,
Kirin Holdings pursued the following initiatives under the
Kirin Group 2022–2024 Medium-Term Business Plan
(2022–2024 MTBP), the second of three medium-termbusiness plans toward achievement of KV2027.
Kirin Holdings has also received high praise fromoutside the company in terms of ESG. For the second
year in a row, Kirin Holdings received an “AA” rating in
the MSCI ESG Ratings by the U.S.-based Morgan Stanley
Capital International (MSCI), Inc. on a par with theworld’ s leading CSV companies. In a survey conductedby CDP, an international non-profit organization, Kirin
Holdings also received the highest rating of “A-List”
in the two themes of “climate change” and “water
security” for four consecutive years. In Japan, Kirin
Holdings also received the highest overall ranking in the
Nikkei SDGs Management Survey for four consecutive
years, as well as the “SDGs Strategy and Economic
Value Award” at the 4th Nikkei SDGs Management
Grand Prix. In response to increasing demands fordisclosure of non-financial information, Kirin Holdings
has been proactive in disclosing non-financial indicators.
Kirin Holdings has set non-financial targets in the areasof “Environment,” “Health,” and “Employees” as key
performance indicators in the 2022-2024 MTBP, and has
promoted specific initiatives.

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About Kirin Group➁Management Analysis Of Financial Position,
Operating Results, And Cash FlowsFY2022
Consolidated revenue
Consolidated normalized
operating profit
Consolidated operating
profitConsolidated profit before
tax
Profit attributable toowners of the Company

1,989.5

FY2021
1,821.6

ROIC
Normalized EPS (yen)

167.9

9.2％

165.4

25.7

15.6％

116.0

68.1

47.9

70.4％

191.4

99.6

91.8

92.1％

111.0

59.8

51.2

85.7％

8.5％

4.2％

171

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―

15

―

9.6％

Consolidated revenue for this fiscal year increased due
to increases in sales of the Oceania Adult Beverages
Business, Pharmaceuticals Business, and CocaCola Beverages Northeast. The Japan Non-alcoholic
Beverages Business and Kyowa Hakko Bio Co., Ltd.
posted a decrease in profits, but the Oceania Adult
Beverages Business, Pharmaceuticals Business, andCoca-Cola Beverages Northeast saw an increase inprofits, resulting in an overall increase in consolidated
normalized operating profit. Profit attributable toowners of the Company increased mainly due to thesale of China Resources Kirin Beverages (Greater
China) Company, Limited, despite the recording of an
impairment loss related to Kyowa Hakko Bio Co.
Among the key performance indicators, ROIC
improved from the previous year to 8.5% due to anincrease in consolidated normalized operating profit.
Normalized EPS increased 15 yen from the previous
year to a record high of 171 yen, mainly due to anincrease in consolidated normalized operating profit andthe impact of treasury shares completed in September.

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Contents➂Performance by reportable segment
Results by segment are as follows.

(¥ billions, unless otherwise stated)

FY2022

FY2021

1,989.5

1,821.6

167.9

9.2％

Japan Beer and Spirits

663.5

661.3

2.2

0.3％

Japan Non-alcoholic Beverages

243.3

244.4

(1.1)

(0.5%)

Oceania Adult Beverages

255.9

216.3

39.6

18.3％

Change191.2(Key performance indicators)

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Consolidated revenue

ChangePharmaceuticals

397.9

351.7

46.2

13.1％

Others

428.9

347.9

81.0

23.3％
15.6％

Consolidated normalized operating profit

191.2

165.4

25.7

Japan Beer and Spirits

74.7

70.5

4.1

5.8％

Japan Non-alcoholic Beverages

18.8

21.1

(2.3)

(11.0%)

Oceania Adult Beverages

31.5

26.6

5.0

18.8％
34.7％

Pharmaceuticals

82.5

61.2

21.3

Others

(16.3)(14.0)(2.3)―*Corporate expenses and inter-segment eliminations are included in Others.

Japan Beer and Spirits Business
The domestic alcoholic beverages market was affectedby soaring raw material and fuel prices as well as theprolonged COVID-19, but overall the market was on arecovery trend. Kirin Brewery focused on its mainstay
brand KIRIN ICHIBAN and KIRIN ICHIBAN Zero Sugar , tocapture health-conscious consumers. As a result, overallsales volume of the KIRIN ICHIBAN brand increased 3%
year-on-year. In the craft beer category, Kirin Brewery
focused on efforts to broaden the appeal of a variety
of beers. From the SPRING VALLEY brand, in addition
to SPRING VALLEY Hojun 496, SPRING VALLEY Silk
Ale [White] was newly launched. Kirin Home Tap, a beer
server for home use that allows consumers to enjoy
authentic draft and craft beer at home, delivered thetaste of freshly brewed beer to consumers nationwide.
The Tap Marché beer server for restaurants, which canserve four kinds of craft beer from various regions ofJapan, brought the enjoyment of a wide range of craft
beer to consumers with 14 participating breweries. In
addition, Kirin Brewery has been rolling out TAPPY, anext-generation beer server that maintains the freshnessof beer and helps reduce food loss, and the number ofrestaurants that have installed TAPPY has surpassed
10,000. In the RTD category, the mainstay Kirin Hyoketsu
brand sold well. In particular, the Hyoketsu Sugar Free
series received strong support, with sales exceeding
14 million cases, approximately 1.2 times the target set
at the beginning of the year. In the non-alcoholic beertaste beverage category, Kirin Brewery revamped Kirin
GREENS FREE , which helped revitalize the market.
As a result, revenue increased by 0.3% to ¥663.5
billion due to a recovery in sales of the on-premisechannels, coupled with the impact of price revisions.
Normalized operating profit increased by 5.8% to ¥74.7

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billion due to the control of selling expenses.

Japan Non-alcoholic Beverages Business
The domestic beverage market is on a recovery trend
due to increased opportunities to go out, but theexternal environment surrounding the market became
more intense due to soaring raw material and fuelprices, etc. At Kirin Beverage, sales of mainstay brands
were strong, with sales of both Kirin Gogo-no-Kocha
and Kirin Nama-cha exceeding those of the previous
year. In particular, sales of Kirin Gogo-no-Kocha Oishii
Muto (sugar free) were up 17% from the previous year.
In the Health Science area, where Kirin Beverage isfocusing its efforts, Kirin iMUSE Morning Immune Care ,a small-volume PET-bottled beverage, was launchednationwide to strengthen efforts to make “immunecare” a habit in consumers. In addition, Kirin Beveragerenewed and strengthened sales of Kirin iMUSE Lemon
and Kirin iMUSE Yogurt Taste , resulting in a 23% yearon-year growth in sales volume of beverages containing
LC-Plasma. On top of that, KIRIN naturals , a service forcorporate consumers to promote health management,
was renewed as a service to improve employees’
lifestyle habits and raise their health awareness.
However, revenue decreased by 0.5% to ¥243.3
billion. Normalized operating profit decreased 11.0% to¥18.8 billion due to soaring raw material costs and otherfactors, despite efforts to reduce sales promotion andadvertising expenses.

Oceania Adult Beverages BusinessIn the Australian alcoholic beverage market, while theon-premise market was recovering from the impact
of COVID-19, the off-premise market remained soft.
Lion strengthened marketing activities centered on its

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mainstay XXXX ( “four-ex” ) and worked to revitalize thebrand. In the craft beer business, which is positioned
and focused as a growth area, Lion acquired Fermentum
Pty Ltd. in Australia in 2021 and expanded its premium
portfolio. In 2022, Lion acquired Bell’ s Brewery, Inc.
in the United States, and together with New Belgium
Brewing Company, proceeded to build a craft platformin North America.
As a result, yen-based revenue increased by
18.3% to ¥255.9 billion. Yen-based normalized operating
profit increased by 18.8% to ¥31.5 billion due to supply
chain optimization and other cost reduction efforts.

Pharmaceuticals BusinessIn 2022, the second year of the company’ s 2021-2025
Medium Term Business Plan, Kyowa Kirin continued
its efforts to grow as a Japan-based Global Specialty
Pharmaceutical company. While the global therapeutic
environment is changing due to COVID-19, global
strategic products Crysvita and Poteligeo continued toshow steady growth. As for next-generation strategic
products, development of KHK4083 (generic name:Rocatinlimab) and KHK7791 (generic name: Tenapanor
Hydrochloride) made steady progress. On the other
hand, the development of KW-6356 was discontinued,
and the decision was made to discontinue thedevelopment of ME-401 outside Japan. In Kyowa Kirin’ s“patient advocacy” activities, which aim to resolve
business and social issues by listening to the voices ofpeople facing illnesses, Kyowa Kirin actively promoted
support for rare and intractable diseases in Japan andoverseas, including participation in the community of
ASrid, a Japanese non-profit organization.
As a result, revenue increased by 13.1% to ¥397.9
billion due to an increase in overseas pharmaceutical

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sales, particularly of global strategic products.
Normalized operating profit increased by 34.7% to¥82.5 billion due to an increase in gross profit resulting
from higher revenue, despite an increase in selling,
general and administrative expenses and researchand development expenses related to sales of global
strategic products.

Other Business
Kyowa Hakko Bio Co., Ltd. (Kyowa Hakko Bio)
Kyowa Hakko Bio was forced to suspend manufacturing
at its Shanghai plant in China (SHANGHAI KYOWA
AMINO ACID CO., LTD.), one of its production bases,
following the spread of a new COVID-19 strain, andsales were also constrained. In addition, sales of
Citicoline, a key ingredient, were weak due to factors
such as the impact of inflation in the United States,
the largest dietary supplement market. Profitability
was worsened due to soaring raw material and fuelprices. On the other hand, despite the severe businessenvironment, Kyowa Hakko Bio completed a production
facility for HMOs (human milk oligosaccharides)- forwhich demand is expected to grow worldwide- in its own
factory in Thailand (THAI KYOWA BIOTECHNOLOGIESCO., LTD.). As a result, revenue decreased by 3.7% to¥51.1 billion, and business loss amounted to ¥3.9 billion.

Mercian Corporation (Mercian)At Mercian, while its mainstay wine business was
greatly affected by the sharp depreciation of the yen,
it worked to nurture its own highly profitable brands.
Mercian began developing a new brand, Mercian Wines ,co-created with winemakers around the world, andP81

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responded to ethical consumption which has been on
the rise in recent years. In Japanese wines, Mercian
has strengthened its efforts with the Château Mercian
flagship brand. Mercian also launched a consulting
business to raise the standard of the Japanese wine
industry as a whole. Mercian aims to grow Château
Mercian while contributing to local economies. However,revenue increased by 4.5% to ¥60.5 billion, and businessloss amounted to ¥0.6 billion.

Coca-Cola Beverages Northeast, Inc.
(Coke Northeast)
In the United States, the beverage market grewsignificantly, as strong consumer demand continued
despite rising inflation. Coke Northeast also worked
to increase demand while revising product prices, andas a result, sales remained strong. The company also
improved profitability by working on a more profitableproduct mix. As a result, revenue increased by 39.6% to¥216.2 billion, and normalized operating profit increased
59.3% to ¥26.3 billion.

Myanmar Beverages Business
The Company reached an agreement with Myanma
Economic Holdings Public Company Limited (MEHPCL),a joint venture partner of the Company’ s consolidated
subsidiaries Myanmar Brewery Limited (MBL) andMandalay Brewery Limited (MDL), and transferred all theshares (51% of the total number of shares issued) of
MBL and MDL held by Kirin Holdings Singapore Pte, Ltd.,a consolidated subsidiary of the Company, to MBL and
MDL (share repurchase by MBL and MDL) on January
23, 2023.

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Total assets at the end of this fiscal year were ¥2,542.3
billion, an increase of ¥70.3 billion from the end of theprevious fiscal year. Property, plant and equipment,
and goodwill increased by ¥52.1 billion in total fromthe end of the previous year. This was primarily asa result of making Bell’s Brewery, Inc., a subsidiaryand the effect of foreign exchange rate fluctuations.
Inventories increased by ¥42.9 billion from the end of
the previous fiscal year. In contrast, equity-accounted
investees decreased by ¥37.6 billion, mainly due to thesale of China Resources Kirin Beverages (Greater China)
Company, Limited.
Equity increased by ¥105.2 billion from the endof the previous fiscal year to ¥1,253.2 billion due to anincrease in retained earnings of ¥65.6 billion and anincrease in reserves of ¥69.8 billion. The increase inreserve was mainly attributable to an increase in foreign
currency translation differences on foreign operationsof ¥72.5 billion due to a weak yen.
Liabilities decreased by ¥34.9 billion from the endof the previous fiscal year to ¥1,289.1 billion. Despite theissuance of straight bonds worth ¥20.0 billion in June
2022, bonds and borrowings decreased by ¥28.4 billion
due to a reduction in interest-bearing liabilities. The
reduction was attributable to the fact that the amountprocured was kept below the repayment amount mainly
resulting from increased capital efficiency in line with
the implementation of a global cash management
system.
As a result, the equity ratio attributable to ownersof the Company and the gross debt equity ratio stood at

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38.5% and 0.53 times, respectively.

➁Financial status of reportable segments
Japan Beer and Spirits

Segment assets of the Japan Beer and Spirits Businessat the end of this fiscal year decreased by ¥0.7 billion to¥432.1 billion from the end of the previous fiscal year

Japan Non-alcoholic Beverages
Segment assets of the Japan Non-alcoholic Beverages
Business at the end of this fiscal year decreased by¥6.0 billion to ¥133.2 billion from the end of the previous
fiscal year mainly due to a decrease in other financial
assets.

Oceania Adult Beverages
Segment assets of the Oceania Adult Beverages
Business at the end of this fiscal year increased by¥70.9 billion to ¥546.7 billion from the end of theprevious fiscal year. This was mainly because goodwill
and property, plant and equipment increased primarily
as a result of making Bell’s Brewery, Inc., a subsidiaryand exchange rate fluctuations.

Pharmaceuticals
Segment assets of the Pharmaceuticals Business at
the end of this fiscal year increased by ¥18.2 billion
to ¥880.3 billion from the end of the previous fiscal
year mainly due to increases in property, plant andequipment, trade and other receivables, and inventories,
despite an impairment loss on intangible assets.

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The balance of cash and cash equivalents (hereinafter,“net cash” ) at the end of this fiscal year was ¥88.1
billion, a decrease of ¥61.4 billion from the end of theprevious fiscal year. Cash flows for each activity wereas follows:

Cash flows from operating activities
Net cash provided by operating activities decreasedby ¥83.7 billion year on year to ¥135.6 billion. Althoughprofit before tax increased by ¥91.8 billion, a ¥12.6
billion increase in outflow of working capital, a ¥13.2
billion reversal of impairment loss, which is a noncash item, and a ¥48.1 billion gain on sale of equityaccounted investees resulted in a decrease of ¥48.0
billion in the sub-total. Below the sub-total line, cash
flows from operating activities decreased year on year
due to a ¥39.2 billion increase in income taxes paid.

Cash flows from investing activities
Net cash used in investing activities decreased by ¥46.0
billion year on year to ¥10.4 billion. The decrease wasmainly because proceeds from sale of equity-accounted
investees increased by ¥117.1 billion year on year to¥122.2 billion as a result of the sale of China Resources
Kirin Beverages (Greater China) Company, Limited inthis fiscal year. Meanwhile, acquisition of shares ofsubsidiaries, net of cash acquired increased by ¥0.7
billion year on year to ¥46.2 billion as a result of making
Bell’ s Brewery a subsidiary in this fiscal year, while
making Fermentum a subsidiary in the same period of theprevious fiscal year. Outflow for acquisition of property,
plant and equipment and intangible assets increasedby ¥12.1 billion year on year to ¥98.5 billion. There was

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inflow of ¥7.9 billion for sale of investments through ourcontinuous efforts to reduce cross-shareholdings

Cash flows from financing activities
Net cash used in financing activities decreased by ¥12.6
billion year on year to ¥167.8 billion. The Company
continued to provide dividends based on a consolidated
dividend payout ratio on normalized EPS of at least 40%.
As a result, dividends paid, including to non-controllinginterests, amounted to ¥65.5 billion. The Company alsoacquired ¥50.0 billion of treasury shares to increase
shareholder returns. In addition, interest-bearing liabilities
decreased by ¥36.9 billion in this fiscal year. The
reduction was attributable to the fact that the amountprocured was kept below the repayment amount mainly
resulting from increased capital efficiency in line with theimplementation of a global cash management system.
These initiatives enabled us to stabilize ourcapital structure through stable and continuous
shareholder returns and the reduction of interest-bearing
liabilities, while investing in existing businesses andmaking growth investment.
The 2022–2024 MTBP sets out the outline offinancial strategy, under which cash generated from “cashgeneration through BS (balance sheet) / PF (portfolio)
management” will be allocated to disciplined investment
to acquire growth drivers as well as a flexible shareholder
return policy. By steadily implementing this strategy, we
will achieve our financial targets of a normalized EPS
CAGR of at least 11% by 2024 and ROIC of at least 10%
as of 2024, so as to improve corporate value.

➁Basic capital policy

Based on the capital policy formulated in the 2022–
2024 MTBP, the Company will allocate resources to its

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businesses and distribute profits to its shareholders as
set out below.
Regarding resource allocation to businesses,
giving top priority to growth investment with a focus
on the Health Science domain, the Company will makeinvestments that contribute to enhancement of existing
businesses and profitability improvement. The Company
will also implement a stable and continuous allocation of
resources to intangible value (such as brands, researchand development, information and communication
technology (ICT), and human resources) as well as new
business creation that sustain the growth of future cash
flows. The Company will take a disciplined approach toinvestments in terms of maintaining and improving theKirin Group’ s capital efficiency.
We view the distribution of profits to shareholders
as a key management matter. Since its foundation in
1907, the Company has continued to pay dividends toshareholders every financial year without fail. The Company
has stably and continuously provided dividends based ona consolidated dividend payout ratio on normalized EPS of
at least 40%. In addition, we will consider opportunities toacquire treasury shares as additional shareholder returns,
comprehensively taking into account various factors
including optimum capital structure, market conditions andreserve funds after investments.
With regard to financing, priority is given to debt
financing, while maintaining a high credit rating that is
not affected by financial conditions, in preparation for
rapid changes in the economic environment and otherfactors. The Company fulfills its accountability to its
shareholders by carefully considering the impact on
stakeholders and other factors when raising funds forinvestments required to achieve medium- to long-termgoals, which may result in a change in control or a largescale dilution, after verification and review by the Board.

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10-Year Summary of Key Financial Data

(Millions of yen)

JGAAP
Fiscal year
Revenue*1

Less Japanese liquor taxes
Net revenue

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IFRS

2013

2014

2015

2016※92017※92018※9

2019

2020

2021

2022

2,254,585

2,195,795

2,196,925

1,853,937

1,863,730

1,930,522

1,941,305

1,849,545

1,821,570

1,989,468

310,798

301,365

305,697

296,029

289,433

294,028

292,153

276,932

285,600

284,435

1,943,786

1,894,429

1,891,227

1,557,909

1,574,296

1,636,494

1,649,151

1,572,613

1,535,969

1,705,033---

181,982

194,609

199,327

190,754

162,115

165,430

191,159

Operating profit

142,818

114,549

124,751

196,590

211,000

198,32287,727

102,919

68,084116,019

Operating profit (Before amortization of
goodwill, etc.)

198,086

171,542

158,537

-

-

-

-

-

-

-

Normalized operating profit*2

-

-

-

-

-

-

-

-

-

-

Normalized EBITDA*4

301,486

273,183

258,922257,612272,301

279,907272,619

243,959

245,879

277,695

EBITDA*

3

Ordinary income

132,134

94,211

128,199

-

-

-

-

-

-

-

Profit attributable to owners of the Company*1

85,65632,392(47,329)

148,918

241,991

164,20259,642

71,93559,790111,007

Cash flows from operating activities

205,517

155,247

171,011232,263

221,710

198,051

178,826

164,839

219,303

135,562

Cash flows from investing activities

85,526(139,397)(70,659)(82,656)

63,21447,389(175,619)(115,981)(56,408)(10,399)

Cash flows from financing activities(272,357)(80,701)(78,221)(157,271)(182,163)(226,699)(9,997)(52,474)(180,463 )(167,835)

2,896,456

2,965,868

2,443,773

2,422,825

2,398,572

2,303,624

2,412,874

2,459,363

2,471,933

2,542,263

858,911873,003821,478

668,212486,475

414,994

530,851642,644551,471

523,121

1,075,861

1,101,833

663,842

695,860

947,162

906,578

906,576

838,584

894,179

980,022

90.76

35.27

(51.87)163.19265.17183.57

68.00

85.57

71.73

135.08

122

118

117

139

151

167

158

136

156

171

EPS (Before amortization of goodwill etc.) (Yen)

159.92108.57(2.83)

-

-

-

-

-

-

-

Dividends per share (Yen)

36.00

38.00

38.00

39.00

46.00

51.00

64.00

65.00

65.00

69.00

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

Value indicators
14.0

8.6

(0.3)

22.2

29.5

17.7

6.6

8.2

6.9

11.8

Return on invested capital (ROIC) (%)*7

-

-

-

10.8

16.3

12.0

5.2

6.0

4.2

8.5

Operating profit (Before amortization of
goodwill, etc.) /Net sales (%)

10.2

9.1

8.4

-

-

-

-

-

-

-

Net debt / Normalized EBITDA (times)

2.25

2.76

2.67

2.21

1.19

0.86

-

-

-

-

-

-

-

-

-

0.46

0.59

0.77

0.62

0.53

29.5

32.2

32.5

28.1

30.5

30.5

40.5

47.8

41.7

40.4

Return on equity (ROE) (%)*6

Gross debt-to-equity ratio (times)
Consolidated dividend payout ratio (%)*8*1 Through fiscal 2015, revenue, profit attributable to owners of theCompany, and equity attributable to owners of the Company were
calculated based on Japanese GAAP andpresented as sales, net income, and equity (net assets - non-controllinginterests - stock acquisition rights). (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 and administrative 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 fromentities accounted for by the equity method
From fiscal 2016: Normalized operating profit + Depreciation andamortization (excluding depreciation of right-of-use assets 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 theCompany ± 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 start and end of the fiscal year + average total equity of the start andend of the fiscal year
*8 From fiscal 2010, figures for dividend payout ratio use EPS (before
amortization of goodwill etc.), and these figures exclude losses with noeffect 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 thechange in accounting policy in fiscal 2019.

KIRIN INTEGRATED REPORT 2023

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OUTCOMECSV Stories Health and Well-Being

Spreading an Immune Care
Habit and Contributing
to the Consumers’ Health andWell-Being

CSV Stories Community Engagement

Giving Back to the Community
throuugh Human Powered
Business

CSV Stories The Environment

Creating Positive Impact
on Society through Active
Engagement with Natural Capital

A Responsible Alcohol Producer

Lion’s Commitment to
Responsible Drinking andInnovation

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Spreading an Immune Care Habit and Contributing
to the Consumers’ Health and Well-Being
Tomohiko Fujita
Manager, Planning Group
Health Science Business Department,
Health Science Business Division
Kirin Holdings Company, Limited

Related Management Issues

・Support for maintaining immunity functions

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In the Long-Term Management Vision, Kirin Group Vision 2027 (KV2027), the Kirin Group has set a goal of creating value
across our world of Food & Beverages to Pharmaceuticals as a global leader in CSV. To fulfill the KV2027 goal, we are
expanding the scale of the Health Science domain and setting the area of immunity as our highest priority.

Immunity is an important function for living a healthy life. To humans, it could even be called the “foundation ofhealth;” if the foundation crumbles, it will lead to various health issues. However, it is difficult to notice a functional decline
in immunity, and the delay of treatment is a major health issue. We think solving this issue would be socially significant.

Sustainable Development Goals

The world’ s first discovery of
Lactococcus lactis strain Plasma(LC-Plasma) that directly activates thecommander in chief of the immune
systemDuring our research on immunity, we made the world’ s
first discovery of LC-Plasma, which activates thecommander in chief of the immune system that waspreviously thought to not exist, and published an article in2012. We have accumulated a large amount of evidence
in the form of 31 reports, including those on humanstudies. In August 2020, using the results of our research,

we successfully registered our iMUSE brand, which uses
LC-Plasma, as foods with immunity function claims, afirst for Japan. LC-Plasma is a lactic acid bacterium that
supports the maintenance of the immune functions ofhealthy people, and it was first announced to the world*
through an article that it activates plasmacytoid dendritic
cells (pDC). While general lactic acid bacteria activate
only some of the immune cells, the LC-Plasma directly
activates the pDC, which is the commander in chief of
the immune system. The activated pDC then orders theactivation of all the immune cells (NK cells, killer T cells, B
cells, and T helper cells), facilitating the defense system
to work against foreign objects.

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Additionally, in contrast to general lactic acidbacteria, LC-Plasma has an effect even when nonviable, which makes it easy to incorporate it into various
foods. That’ s why we, along with our group and partnercompanies, have been developing various products inaddition to yogurt that uses viable bacteria, such as
beverages, supplements, and snacks, and providing thevalue of LC-Plasma for many consumers.
*World’ s first-ever published paper on the effects of Lactic acidbacterium on pDC (Based on ICHUSHI Web and PubMed)

LC-Plasma spreads in Japanand internationally
The Kirin Group expanded the variety of products infusedwith LC-Plasma (foods with function claims) to 26 by theend of 2022 (there were 17 at the end of 2021). In 2022
L. lactis strain Plasma Series sales grew 40% comparedto the previous year due to the large contributions of the
expansion of beverages, supplements, and yogurts.

The number of our partner companies in foods
with function claims has grown to 6, and the number of
products has grown to 12 (3 companies and 7 products
at the end of 2021). In 2022 we newly partnered with
Nihon Yakken Co., Ltd., Taisho Pharmaceutical Co.,
Ltd., and TOKIWA Pharmaceutical Co., Ltd., and thecompanies started selling five new foods with function
claims. The products were praised for their good taste
and variety, which make it easy to intake LC-Plasma,and it helped to establish an immune care habit andincreased the sales of the LC-Plasma products.
As for foods without functional claims, Petio
Corp. released 27 new snacks for pets, expanding thetotal number of products to 37 (10 products at the endof 2021). They are committed to helping us promote

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OUTCOMEimmune care, which is also a growing need among
consumers with pets.
Furthermore, LC-Plasma bacteria sales havespread internationally. In the US, there are currently
seven companies selling nine products, and in Europe
sales are expanding into Italy and other countries. Our
target international markets are primarily those of North
America and Southeast Asia, but there are some regionsin Southeast Asia in which we cannot yet sell LC-Plasma
due to religious beliefs, so we are aiming to expand into
those regions by getting it certified as a Halal product.
(We plan to start externally selling Halal raw materials
by the end of 2023.)

Focusing on immune careawareness-raising activities
and product lineup expansion
Kirin’s research uncovered that about 85% of consumers
understand immunity is important to their health. On theother hand, the number of people who answered saying
they actually have immune care habits was only around
10%, so we see a big gap in those with knowledge andthose taking action.

We believe the reason for this gap is that
immunity’ s hard-to-notice function makes it difficult tofeel the importance of immune care and take action, so inorder to promote making a habit of caring for immunity,
the foundation of health, the Kirin Group persistently
works together with the above partner companies toraise awareness. We believe these awareness-raising
activities are very significant to society. We also plan
to continue expanding our product lineup to create anenvironment in which people can easily and habituallycare for their immunity through our products.

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Contents(1) Awareness-raising activities
When it comes to immune care awareness-raising
activities, we have been developing a marketing strategy
based on consumer needs. We are planning to make ashift to a strategy that places importance on social issues
rather than one that is centered around our products andinformation within the company. Through cooperatingwith Japanese governments and administrative agencies,and various businesses, organizations, schools, andmore, we will spread the awareness of the importance of
immune care to accelerate its normalization.

As an example of our efforts, in winter 2022 wepartnered with various Japanese tourist organizations
to promote safe immune care while traveling. In termsof our mid- to long-term awareness-raising initiatives, weare continuing to develop school classes on immunity toenhance knowledge about immunity among elementary
school students.
We believe it is important to have scientificsupport for immune care so that consumers come tofeel the importance of it. The credibility of LC-Plasma has
been confirmed through various scientific journals, andwe will aim to work on further research and gather morescientific evidence to gain more trust from consumers.
As a result of these initiatives in Japan, thepercentage of people aware of the function of LCPlasma reached 32% at the end of 2022, and thenumber of people who were consuming it regularly had
climbed to 640,000.

(2) Product lineup expansion
In addition to raising awareness of the importance of
immune care, we should work to expand our product

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lineup to make it easier to develop immune care habits.
Our partner companies and we are working to develop
products of various kinds. We are also expanding thegeography of international LC-Plasma bacteria sales.

With the prospect of the future market expansion
in Japan and overseas, we are fortifying our production
system. We are installing more cultivation tanks,
centrifuges, and other equipment necessary to bacteria
production at our LC-Plasma bacteria manufacturing
plant, which will almost double the current yearly
capacity to 28 tons in 2023.
The Kirin Group will continue to cooperate withpartner companies to expand LC-Plasma both in Japanand internationally.

Spreading immune care habits
together with partner companies andrealizing fulfilled lives
As previously mentioned, the sales of L. lactis strain
Plasma Series in 2022 grew 40% compared to theprevious year. That being said, even though we haveexcellent technology and materials, the Kirin Group’ sefforts alone may not suffice to offer value to a diverse
range of consumers. By collaborating with partnercompanies in various industries who share our aspiration

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OUTCOMEto solve health issues, we aim to develop a wide varietyof LC-Plasma products and continue to increase people’ s
choices and contact with the products, thereby making
immune care more accessible to consumers. Goingforward, we hope to contribute to the creation of ahealthy society, in mind and body, by spreading immune
care habits with our partner companies.

The cooperation of our partner companies andus is not limited to the selling of LC-Plasma bacteria.
We also collaborate in product development so that wemay deliver excellent products that lead to immune care
habits for consumers. For example, during our partnercompanies’ product planning stage, our Institute of Health
Sciences offers advice from a technical perspective
and provides support for the registration of foods-withfunction labeling. This organizational capability to offer
such scientific and technical knowledge is one of ourstrengths, and it allows us to further strengthen our
cooperation with our partner companies.
We at the Kirin Group and those at our partnercompanies will continue to propose appealing products
supported by scientific evidence and to promote immune
care habits in line with awareness-raising activities. In
particular, we will consistently cooperate with our partnercompanies from academia and research to marketing
and work as one to solve health issues.

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Immunity is the foundation of human healthand is inherent in human nature. We hope that throughspreading immune care habits, we will strengthen thisinnate power and contribute to helping people feel thejoy of living to be 100 years old and to the realization offulfilled lives. We believe that this is how we can truly
contribute to the health and well-being of each andevery one of consumers.

Tomohiko Fujita
Manager, Planning Group
Health Science Business Department,
Health Science Business Division
Kirin Holdings Company, Limited

Joined Kirin Brewery Company, Limited. He was in charge ofdomestic and international sales and marketing before joining
the Health Science Business Department at Kirin Holdings
through an internal recruitment process in 2021. He is currently
promoting collaboration with partner companies as the one
in charge of the strategy of expanding LC-Plasma and otherimmunity materials.

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Giving Back to the Community throuugh
Human Powered BusinessMeghan Oleson
Social Impact Senior Manager
New Belgium Brewing Company

Related Management Issues･ Respect for human rights･ Sustainable development of communities in
raw material production areas and businessdevelopment regions･ Creating bonds and trust for people’ s wellbeing･ Enhancing the sustainability of foodeconomySustainable Development Goals

Through its products and services, New Belgium Brewing seeks to contribute to the creation and development of a society
in which customers and all participants in the value chain are connected with joy. To achieve this goal, we contribute tocommunity through the establishment of the “Human Powered Business” model.

Overview of New Belgium Brewing
New Belgium Brewing was founded in Fort Collins,
Colorado in 1991 by Jeff Lebesch and his wife, Kim
Jordan. Jeff, a homebrewer, had developed a recipe
for a Belgian-style beer, and with Kim’ s background insocial work and business, they turned his passion into a
successful venture. The following year, they introduced
Fat Tire Amber Ale and other beers in Colorado, and thebrand’ s popularity quickly spread to other states. The
company continued to grow and expand over the years,
opening locations in Asheville, N.C. (2016), Denver, Colo.
(2018), and San Francisco (2021). In 2022, we acquired

Bell’ s Brewery, a like-minded pioneer in craft beer known
for its quality and human-first approach to business.
Today, New Belgium’ s lineup includes Fat Tire Ale(America’ s first certified carbon neutral beer), Voodoo
Ranger IPA (America’ s #1 IPA brand family), Two Hearted
IPA (voted best beer in America four years in a row), andOberon Ale (which inspired an official Michigan stateholiday).
New Belgium is a certified B Corporation; leads
on climate with aggressive, science-based 2030 GHG
reduction goals; has donated more than $31 million to
support positive social and environmental impact todate; maintains TRUE Zero Waste certification; and was
the first craft brewery to achieve a perfect score on the
Human Rights Campaign’ s Corporate Equality Index.

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People drive our business forward, and, in return, thebusiness puts coworker and community wellbeing at thecenter of everything we do. This fosters a self-fulfillingculture of individual empowerment and collaborative
action that drives better business results in the long term.
In other words, the business benefits when the people
who power it prosper.

The result? We’ re at the top of the U.S. craft
beer industry. We enjoy incredibly low turnover andconsistently high engagement among our workforce.
New Belgium didn’ t lay off a single coworker as a resultof the COVID-19 pandemic. Our team comes to work
every day invested in the quality of our product and thesuccess of our company, because the company invests
in the quality and success of their lives everywhere wecan.

Four Principles of Human Powered
Business

With over 1,300 coworkers, New Belgium’ s pioneeringand humanized approach to business has made it a topperforming brand in the U.S. craft beer market in terms ofsales volume and growth.

A Human Powered Business
New Belgium was co-founded by a social worker who
built the company the only way a social worker would:
People first. Since then, we have pioneered and developed

The Human Powered Business model is comprisedof four core principles – all working together to drive
outsized long-term success.

1. We Do Right By People
People are at the heart of New Belgium – and always
have been. We support our coworkers and communities,
promoting comprehensive wellbeing, including financial,social, environmental, and physical health. As we’ve grown,
we’ve invested even more in our coworkers, with initiatives
like financial transparency, pay equity, and quality healthcare,including an on-site wellness center. Our coworkers’

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dedication to the company’s health has only increased.

2. We Make World-Class Beer for Everyone
From the beginning, we’ ve focused on our superpower– making great beer, and doing it responsibly. Our
coworkers are skilled experts, with talents honed overtime, who take pride in their craft. Over the years, we’ ve
won 34 medals at the Great American Beer Festival –starting with a Gold for our original Abbey Ale in 1993,
and most recently winning Gold for our Trippel in 2021.

3. We Inspire Social & Environmental Change
We believe in using business as a force for good byaddressing social and environmental challenges. Ourcommitment to accountability began in 2012 when we
became a certified B Corporation. We have since usedvarious tools, including a climate action plan, scalable
philanthropy, advocacy, and brand mobilization to donate
over $30 million and support important movements forchange.

4. We Have a Hell of a Lot of Fun
We prioritize fun in our business to foster connection,
inclusivity, and innovation. We encourage risk-taking
and authenticity because groundbreaking ideas comefrom diverse experiences. We cultivate an intentional
culture through programs like custom bikes for one-year
anniversaries and paid sabbaticals at 10- and 20-year
milestones.
Our internal company norms, as developed collectively bycoworkers, are as follows:

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New Belgium key communities
Community involvement and partnering with community
organizations have always been a part of New Belgium’ s
ethos. We work with nonprofits across the country topositively impact communities where we do business, togive back to those who have supported us along the way,
and to advocate for a future that’ s bright for all.

B Corp certification
B Corp is a certification granted to for-profit companies
by B Lab, a non-profit organization, that recognizes
companies committed to utilizing their operations tobuild a more inclusive and sustainable economy. B Corps
aim to minimize inequality and poverty levels, while
promoting healthier environments, stronger communities,
and good jobs. Companies are assessed based on theirimpact on coworkers, communities, customers, andthe environment, as well as how well their practices areanchored within company governance.

New Belgium has been a certified B Corporation
since 2012, using the power of business to solve socialand environmental problems since our founding. Our
B Corp certification enables us to track our progressover time and compare ourselves to other valuesdriven companies, allowing us to continue protecting
our culture and values. Our commitment to social andenvironmental accountability starts at the foundationof our corporate structure, and we leverage every toolat our disposal, including a leading climate action plan,a scalable philanthropy model, vocal advocacy in thepolicy arena, and a long tradition of using our brandto mobilize customers in support of the world’ s mostpressing movements for change.

As a relationship-based company, we strive
to do right by our customers and their communities,
regardless of location, and we’ re particularly committed
to supporting our hometown communities where ourbreweries are located and where most of our coworkers
live. To that end, we provide quality healthcare, aliving wage, and work daily to provide a welcoming
and inclusive culture to our employees. Furthermore,
we donate money and volunteer time to support thehealth of local watersheds and the communities we callhome. In 2022 alone, we donated a total of $566,729
to our hometown community partners and charitableorganizations, with specific amounts of $116,631 in
Asheville, NC, $181,225 in Fort Collins, CO, and $268,873
in Michigan (Comstock, Kalamazoo, Escanaba).
We also prioritize key markets where we are
driving racial/ethnic diversity, inclusion, and equity incraft beer. We recognize that Black, Indigenous, Peopleof Color (BIPOC) are underrepresented in the craft beerindustry, comprising only 15% of craft beer drinkers
despite representing 41% of the total population.
Moreover, BIPOC Americans continue to experiencea lack of access to social services, employment
opportunities, and representation among top decisionmakers in government and business, which perpetuates

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marginalization. As a key driver of the American
economy, we believe that businesses have a role to playin improving equity among underrepresented citizens.
We have taken several initiatives to promote
racial and ethnic diversity, inclusion, and equity in thecraft beer industry. In 2018, we formed a multicultural
marketing initiative, now led by a multicultural marketing
manager and her team, to develop new relationships inunderrepresented communities such as Atlanta, NewYork City, Miami, and Los Angeles. The multicultural
marketing team works to introduce community
members to craft beer, donate philanthropy dollars to

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uplift the community into economic prosperity, andprovide exposure to the careers available within craft
beer. Additionally, in 2021 and 2022, our Brewed For All
on-premise sales program brought our Human Powered
Business Principles to the marketplace and supported
LGBTQ+ rights and outreach. In 2023, in partnership with
HospitableMe, we launched Poured for All, a completely
free digital training available to any bar or restaurantthat seeks to provide a welcoming and inclusive space
for all.
We have also established several systems
to encourage employees to make a difference as
individuals. These include the New Belgium Coworker
Assistance Fund, which provides financial support
to coworkers experiencing personal hardship or
catastrophic disaster, and the Beer Scouts Volunteer
Program, which sponsors volunteer events and offers
paid time off and funding for coworker participation.
Additionally, the company has a direct giving programthat involves a coworker grants committee allocating
funds to worthy organizations and a practice at retaillocations where coworkers decline tips and pool themoney to support local charities. These programs
are part of New Belgium’ s commitment to a highinvolvement culture that shares wealth, opportunity, andresponsibility among its employees.

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equity for workers, communities, and the environment.
Our efforts have also strengthened the resilience ofsocial, economic, and ecological systems to withstandand recover from climate-related shocks and stresses,
particularly related to our supply chain.

Regarding Diversity, Equity, and Inclusion, we
have made strides in the early stages of diversifying thecraft beer industry to accurately represent our country’ s
diverse population. We have contributed to efforts

Outcomes in Climate action,
DE&I, and Thriving Communities
Through our community engagement activities, we haveachieved significant positive outcomes. Specifically, interms of climate action, we have helped build the earlystages of a transition from an extractive economy toa regenerative economy that prioritizes fairness andEmployee volunteer service project with our partner Grid
Alternatives, the leading voice in low-income solar policy andthe nation’ s largest nonprofit solar installer. Grid Alternatives
provides no-cost solar installations for households qualifying as
low-income, and solar training to connect people to clean energy
jobs for a more equitable economy.

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ensuring fair participation in the economic system andprotection of all citizens’ ability to participate fully insociety. Furthermore, our initiatives have promoted
inclusive access to the outdoors for people of all ages,
ethnicities, abilities, and income levels, making sure thatour public lands and waters respect all cultures andengage all people actively.
Lastly, we have helped create sustainable,
inclusive, connected, and fun local communities where
everyone has better ability to thrive. We are committed
to promoting resilience, relief, and recovery during timesof disasters while also encouraging the responsible
enjoyment of beer.

Leveraging our Human Powered
Business model to meet the mostpressing issues of our time
Our world faces historic challenges – including
economic inequality, climate change, and racial injustice.
Corporations must play a role in promoting real solutions.
Unfortunately, despite well-publicized promises tochange, corporate America continues to struggle tocenter the wellbeing of coworkers, communities, andthe environment in their actions. The past four decades
have seen corporate America become increasingly
dehumanized.

Human Powered Business seeks to reverse
these trends. If widely adopted, we believe Human
Powered Business will greatly accelerate the pace ofsolutions to our biggest challenges – while also building
stronger, more profitable, and more resilient businesses
over the long term. We invest in our coworkers, and, inturn, they invest themselves in the business and ourbroader purpose. Our coworkers don’ t work for us; weValue Creation Model
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work for them.
These practices may seem costly at first glance.
However, the cost of enormous challenges like climatechange, widespread inequality, and systemic racial
injustice are exponentially more expensive in the big
picture for each company, and for society as a whole.
And, in the long run, businesses that invest deeply in the
wellbeing of people and our planet show more growth,
greater resilience, and better financial performanceoverall.
No business is perfect, and that includes New
Belgium. We’ re also a medium-sized company, andultimately, we can only have a medium-sized impact.
Our goal is to tell our story transparently – the ups andthe downs – in the hopes that other companies may
start adopting the Human-Powered Business model andjoin a movement for a more prosperous, equitable, andpeople-centric economy.

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and creating an industrial culture, New Belgium chose a
dilapidated piece of property that could be fixed up andbeautified for our community. Our brewing locations arealways in the center of town, allowing us to be not justa factory, but also a meaningful gathering place for ourcommunities. This has inspired a community-centric
way of doing business that ultimately operates in a waythat drives both business value and social value.

New Belgium’ s businessas a Force for Good
New Belgium believes in being a force for good. Our
philanthropy funds are not simply charity. These programs
are about being in relationship with the communities
in which we do business. In this way, we maintain amore humanized approach to business which we, ourcoworkers, and our communities find more meaningful
and fulfilling. This approach deepens our customers’
loyalty, attracts new customers, and ultimately benefits
our business, making it a true win-win.

This was all inspired by our founder/former-CEO,
who was a social worker prior to starting the brewery.
She paid great attention to the human side of business.
Instead of building the brewery in the industrial center

Meghan Oleson
Social Impact Senior Manager
New Belgium Brewing Company
Meghan Oleson is a part of New Belgium’ s Environmental
Social & Governance (ESG) team. She is responsible for leading
and implementing social impact programs as they relate tocommunity investment, volunteerism, corporate and coworker
giving programs, and company purpose.

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Creating Positive Impact on Society throughActive Engagement with Natural Capital
Yoko Okonogi
CSV Strategy Department
Kirin Holdings Company, Limited

Related Management Issues･ Sustainable use of biological resources･ Sustainable use of water resources

The Kirin Group aims to achieve sustainable growth by implementing the cycle of value creation, with CSV at the core ofits business operations. One of the priority social issues we have identified is the environment. Kirin Group’s Environmental
Vision 2050, announced in 2020, aims to “Enrich the Earth with Positive Impact” and addresses four main issues: biologicalresources, water resources, containers and packaging, and climate change. We believe that these issues are interrelated
and require a holistic approach.

･ Overcoming climate change

Sustainable Development Goals

The increasing importance of adopting
a holistic approach to complex andinterrelated environmental issues
Climate change affects global warming, shrinking daily
temperature differences, and changes in rainfall, andwill have consequences for natural capital*1 such as
crops and water. Climate change and natural capital areinterconnected, and it is essential to address and resolve
them in a holistic manner.

On the other hand, there is a difference between
these impacts. While greenhouse gases (GHGs) aredispersed into the atmosphere, resulting in global

climate change regardless of where they are emitted,
the impact on natural capital is location-specific.
Altering land, for instance, can cause the loss of uniquebiodiversity that exists only in a particular place or river,and the consequences will vary from place to place.
Addressing climate change requires global measures,
whereas tackling natural capital demands understanding
and addressing issues at a local level.
For over a decade, the Kirin Group has
acknowledged the interrelatedness of environmental
issues and the importance of a holistic approach, andhas been conducting research to unveil the impact.
This allowed us to quickly engage in TCFD*2 scenario

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analysis for climate change. In addition, we participatedin The TNFD*3 Forum and disclosed information related
to natural capital on a trial basis, based on the TNFDLEAP*4 Approach in July 2022.
*1 Natural capital is the stock of natural assets that provide
society with flows of renewable and non-renewable resourcesand ecosystem services.
*2 TCFD, which stands for Task Force on Climate-related
Financial Disclosures, was established by the Financial
Stability Board (FSB) at the request of the G20 Finance
Ministers and Central Bank Governors’ Meeting. Its purpose
is to develop guidance to help organizations understand anddisclose the financial implications of risks and opportunities
posed by climate change.
*3 TNFD, which stands for Taskforce on Nature-related Financial
Disclosures, was established to develop guidance forcompanies and other stakeholders to disclose nature-relatedrisks and dependencies on nature. Its purpose is to redirect
funding towards nature positive initiatives, with the goalof halting the decline of nature and setting it on a path torecovery by 2030.
*4 LEAP (Locate, Evaluate, Assess, Prepare) is TNFD’ srecommended approach for assessing a company’ s naturerelated risks and opportunities

Natural capital is the foundation of
the Kirin Group’ s business
The Kirin Group has a brewing philosophy called“Reverence for Life.” It recognizes that the Group’ sbusinesses―alcoholic and non-alcoholic beverages,
and pharmaceuticals―rely on water and crops as raw
materials of fermentation by microorganisms. We are in
awe of the fact that they are made from life, which is why
we humbly lean the science of life. As a company that
operates with the blessings of nature, Kirin believes thatits corporate culture is closely linked to its respect forthe diversity of people and the natural environment. The
loss of precious natural capital is a significant risk for the

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Kirin Group.

For instance, Kirin Gogo-no-Kocha has beenusing Sri Lankan black tea leaves since its launch,which we proudly feature in our marketing. Similarly,
the grape varieties used to make Japanese wines, as
specified by the Japanese Wine Labeling Standards,
are a natural capital specific to certain regions where
they are harvested. As many of our products arelocation-dependent, the inability to use locally-sourced
ingredients could potentially harm the product concept
and marketing strategies.
Next, there is a risk of divestment by ESG funds,a type of long-term investment essential for stablebusiness continuation. In recent years, ESG investments
have gained significant attention, and their proportionof total investments is increasing globally. The Kirin
Group has been continuously disclosing TCFD scenario
analysis since 2018 to identify diverse risks upstream in
the value chain, particularly in agricultural raw materials
and water resources, and to firmly address them. By
doing so, we have built a solid foundation to receive
continued support from long-term investors, and we canmanage our business strategically and stably.

The financial impactof natural capital risk
From a financial standpoint, the cost impact of reduced
crop yields (barley, hops, grapes, black tea leaves,etc.) due to climate change, under the 4° C scenario,
is estimated to range from approximately 2.5 to 9.7
billion yen. The cost of shutdowns caused by floods anddroughts cannot be ignored either, with floods costing
approximately 1 to 5 billion yen, and droughts costing
approximately 30 to 600 million yen.

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The first in the world to disclose
natural capital on a trial basis basedon the TNFD’ s "LEAP Approach".
In March 2022, the TNFD published the “LEAP Approach,”a framework for companies to understand and evaluate
nature-related risks and opportunities, in the first beta
version (v0.1) of the proposed disclosure frameworkfor nature-related financial information. In response, weapplied this approach to disclose information in the Kirin
Group Environmental Report 2022, which was publishedin July of the same year. The TNDF stated that we were
the first company in the world to do so.

We were able to disclose this information ina relatively short period of time, about four months,
due to our prompt efforts in addressing natural
capital issues based on our brewing philosophy of“Reverence for Life.” Our efforts began after the 10th
Conference of the Parties (COP10) to the Convention on
Biological Diversity held in Nagoya in 2010. Unlike many
companies that focused on forestry and other activities,
we chose agricultural raw materials and water as ourtarget products based on our materiality analysis andbegan our full-scale efforts to address natural capital as
an important activity for sustainable business continuity.
In 2011, we conducted a risk survey and assessment of
biological resources and, in 2013, announced the Kirin
Group Action Plan for the Sustainable Use of Biological
Resources. We established a policy of not using
agricultural crops that could damage tropical rainforestsand identified black tea leaves, paper, and palm oil asbiological resources for which risks should be reduced.
In 2021, we added coffee beans and soybeans to the list
considering business and social issues after completingthe aforementioned three initiatives.

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With regard to agricultural raw materials, wehave been supporting tea farmers in Sri Lanka toobtain Rainforest Alliance certification*5 since 2013.
The certification training not only emphasizes thepreservation of the ecosystem but also teaches
the proper use of fertilizers and pesticides, and theplanting of grasses that hold the soil together toprevent landslides and soil runoff during torrential rainscaused by climate change. Every year, the Kirin Group
representatives visit the area to build relationships oftrust with tea estate managers and NGOs in charge of
local training, as well as to understand local issues. The
conservation of water sources within the tea plantations
is one of the newly added activities. This February, Toru
Yoshimura, CEO of Kirin Beverage, visited Sri Lanka.
We are also promoting the use of FSC®-certified
paper in our paper containers to prevent the destructionof forests. These forests play a crucial role in absorbing
and storing GHGs while also preserving biodiversity.
In Japan, our beverage business has already achieved
a 100% FSC-certified paper or recovered paper ratio
for both paper containers and office paper, and we areworking on expanding this initiative globally.
In addition, we have begun promoting the useof certified palm oil and supporting the acquisition ofRainforest Alliance certification for coffee beans in
Vietnam.
Apart from that, we have been conducting an
ecosystem survey at the Château Mercian Vineyard incollaboration with the National Agriculture and Food
Research Organization (NARO). The transformationof idle and derelict land into a hedgerow and grasscultivated vineyard has created a high-quality, extensive
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With regard to water risks, various measures
have also been implemented based on risk/stresssurveys conducted at the Kirin Group’ s global
production sites. In Australia, where water stress is high,we have introduced advanced water treatment facilities
with reverse osmosis membranes to prioritize water
recycling, even if it increases energy consumption.
Meanwhile, in Japan, where water stress is low, we have
implemented water conservation measures that reuseand creatively save water, to the extent that energy
consumption does not increase.

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In an effort to mitigate climate change, we are
implementing renewable energy sources and energy
conservation practices in our plants. Our ultimate
goal is to realize a “society that continuously recycles
plastics” that contributes to a circular economy, while
simultaneously reducing GHG emissions and minimizing
the negative impact on natural capital.
In this way, the Kirin Group has been promoting
initiatives to resolve issues to lead a sustainable use ofnatural capital and a decarbonized society, taking into
consideration trends in the international community,
environmental impacts, and business materiality.
*5 Rainforest Alliance certification is granted to farms that
demonstrate their dedication to sustainable farming practices
while prioritizing environmental protection and the well-beingof farm workers.

https://www.rainforest-alliance.org/

Sustainable use of natural capitalthrough active engagementwith the TNFD
The challenges posed by climate change and natural
capital issues cannot be resolved by a single company;
they must be tackled on a social level that expands
beyond the boundaries of individual companies.
Therefore, to ensure the sustainable use of natural capital,
it is crucial to consider how companies, investors, andlocal communities are interconnected with, dependent on,
and impacted by natural capital, in the same way as they
are with climate change. TNFD provides the necessary
framework to facilitate this consideration.
Kirin Gogo-no-Kocha Straight Tea,
250 ml LL Slim,using tea leaves from farms
certificated by Rainforest Alliance
FSC®C137754

Unlike climate change, which has astraightforward measure in the form of GHG emissions,the challenge with natural capital lies in the fact thatit cannot be measured by a single metric. To gain

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acceptance among diverse stakeholders as TCFD does
and make the disclosure of natural capital information
mainstream, it is necessary to provide as many
examples as possible. By leading the way, the Kirin
Group can serve as a reference for other companies,
and the widespread adoption of TNFD can contributeto creating a positive impact on society and theenvironment.

Contributing to society byparticipating in the creationof a framework
The Kirin Group’ s environmental management has been
elevated through its adoption of excellent disclosure
frameworks. The Kirin Group Long-Term Environmental
Vision, announced in 2013, was formulated anddisclosed as a vision for identifying material issues andresolving them in response to the disclosure of “risks
and opportunities related to climate change” on the
CDP questionnaire. The Kirin Group’ s Environmental
Vision 2050, announced in 2020, reflects the challenges
identified through scenario analysis conducted in
response to TCFD’ s final recommendations that weredisclosed in 2017.

Thus, by disclosing information throughinitiatives such as TCFD and CDP, the Kirin Group has
gained a scientific understanding of its own risks andimpacts and has been able to reflect and enhance
this knowledge in its environmental management.
The establishment of a shared framework for society
has facilitated greater mutual understanding between
investors and the company, while external evaluationand feedback have fostered a deeper internal
understanding of the issues at hand.

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However, the TCFD and CDP frameworks do
not allow general companies to reflect their opinions
within the frameworks, despite being required todisclose information. In contrast, the TNFD, which iscurrently under development, takes an open innovation
approach by incorporating input from companies in
the framework’ s development. LEAP’ s trial disclosure
results are also fed back to the TNFD, and we aim tocontribute to making the TNFD framework even betterby continuously participating in various pilot programs.
Through our active involvement in TNFD, SBTs
for Nature*6, TCFD, CDP, and other initiatives, we willcontinue to contribute to international rulemaking for
better disclosure and the diffusion of rules and make apositive impact to enhance the sustainability of natural
capital.
*6 A movement aimed at establishing science-based targets
for the sustainable use of natural capital, similar to the SBT
initiative which sets targets for addressing climate change.

Yoko Okonogi
CSV Strategy Department Kirin Holdings Company, Limited

Joined Kirin Holdings in 2021. She majored in naturalenvironmental studies and ecology, and since joining thecompany, she has been focusing on enhancing the sustainabilityof the Kirin Group’ s raw materials and biological resources.
Furthermore, by participating in international rulemaking
relating to natural capital, she aims to make the sustainable useof natural capital mainstream and create a positive impact.

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Alcohol Producer

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Lion’s Commitment to Responsible Drinking
and Innovation
Justin Merrell
Sustainability Director
Lion Pty Ltd

Related Management Issues

As a leading beverage company in Australia and New Zealand, Lion is committed to promoting responsible drinking andenabling customers to make informed choices that suit their lifestyle. Our dedication to sustainability, innovation, andpartnerships with industry colleagues and community organizations is at the heart of our mission.

･ Dealing with alcohol-related problems

Sustainable Development Goals

Our commitment to responsible
drinking
At Lion, we recognize the importance of eliminating themarketing, advertising, and sale of alcoholic beverages
to minors. To this end, we’ ve partnered with industry
colleagues such as the International Alliance for
Responsible Drinking (IARD) and are voluntarily rolling out“not for minors” labeling across our product range.

Additionally, over the past decade, Lion’ s
Alcohol&Me program has been providing expert
information on the effects of alcohol on the bodyand mind, helping New Zealanders make responsible
choices and stay safe while drinking. The program isavailable as online modules and workplace workshops

and offers a variety of engaging educational materials,
including videos, quizzes, interactive demonstrations,and personal reflection exercises.
Starting from humble beginnings as an internal
workshop back in April 2013, Alcohol&Me has now
helped to educate over 400,000 adult New Zealanders,equating to 10% of the country’ s population over thedrinking age of 18, or an average of 100 people every
day that are now equipped to make smarter drinking
choices. The program has received high praise, with
89% of people who have done Alcohol&Me in New
Zealand reporting making changes to their drinking
behavior, and 95% saying they would recommend theprogram to others. Feedback from participants has
been overwhelmingly positive, with comments such as“The workshop was extremely informative, interactive,

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Expanding the low and non-alcoholicmarket through innovation andsustainability
As a company, we’ re committed to innovation thatempowers our customers to make choices that suit theirlifestyle. In 2022, we announced a major innovation within
the non-alcoholic beer category with the launch of XXXX
Zero , Australia’ s first carbon-neutral alcohol-free beer.
We’ ve consistently responded to consumer tastes, suchas pioneering the mid-strength market with the launch of
XXXX Gold, and the new XXXX Zero reflects the shift inAustralians’ drinking habits towards moderation.

and engaging for our employees” and “I genuinely think
it will be a powerful tool to change people’ s perceptions
and illusions about their drinking.” Following its successin New Zealand, Alcohol&Me has recently been launchedin Australia. By continuously increasing the number ofparticipants, we aim to contribute to a reduction in antisocial behavior and negative outcomes.
We also collaborate with industry and community
organizations that share our vision. Since 2005, we havebeen a member of DrinkWise Australia, an independentnot-for-profit that promotes safer drinking practices. In
New Zealand, we partner with the Tomorrow Project,
an industry-funded organization that supports the
SMASHED Program, which uses live theatre to educate
students and teachers on the dangers of underagedrinking and how to cope with peer pressure and otherrisks associated with excessive drinking.

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New South Wales to support our growing range of nonalcohol options, which now includes James Squire Zero,
Steinlager Zero, Speights Summit Zero, and XXXX Zero.
When enjoyed responsibly, our products canbe part of the social connection and interactions thatare essential to wellbeing. As a company, we’ re open
about the potential for misuse and want to be part ofthe solution by promoting responsible drinking andproviding our customers with innovative options thatmeet their needs.

We understand the potential for alcohol misuse
and want to be part of a changing drinking culture that
includes a drive towards moderation. We believe wehave a responsibility to ensure our products aren’ t
consumed in ways that foster anti-social behavior or
result in negative health outcomes. Building our portfolioof low and non-alcohol options is a core element of this.
We’ ve made a significant commitment to the growing
non-alcohol beer category, having invested $6 million
on a de-alcoholizing plant at our Tooheys Brewery in

Justin Merrell
Sustainability Director
Lion Pty Ltd
Justin Merrell is currently part of Lion’ s Supply Chain team,
where he is responsible for developing the company’ s
Sustainability agenda as Sustainability Director. Prior to hiscurrent role, he was Lion’ s Environmental Director, providing
leadership in environment strategy and compliance.

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Message from Senior Executive
Officer of CSV Strategy

Securing a “Global Leadershipin CSV” through enhancing

Environmental Managementand Human Capital

Disclosure Based on TCFD
and TNFD Frameworks

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Message from Senior Executive Officer of CSV Strategy

Securing a “Global Leadership in CSV” through enhancing
Environmental Management and Human Capital
Ryosuke Mizouchi
Senior Executive Officer
Kirin Holdings Company, Limited

Reinforcing human rights measureswhile demonstrating our commitment
as a global leader in environment――Please give us a look back on 2022 in termsof the 2022-2024 Medium-Term Business Plan.
In 2022, we made solid progress toward becoming a“global leader in CSV” set out in the Kirin Group Vision
2027 (KV2027) long-term management vision. Thisis a result of material achievements in environmental
management.

In July 2022, the Kirin Group acquired acertification of SBTi Net Zero Standard by the Science
Based Targets initiative – a world’s first in the foodand beverage sector. This is in recognition of our longterm targets set out in the Kirin Group Environmental
Vision 2050 being based on science matching theParis Agreement standard. Currently, the Kirin Group is
reducing GHG emissions in the value chain to achieve
its mid-term targets by 2030*1.
In January 2023, Mercian Corporation’s Mariko
Vineyard was selected as an approved socio-ecologicalproduction landscapes and seascapes (SEPLS) site by

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the Japanese Ministry of the Environment. The ministry
is certifying areas with high biodiversity as SEPLS sites
in order to achieve the 30by30 target*2 based on the G72030 Nature Compact. Beginning in 2023, SEPLS arescheduled to be certified as OECMs (Other Effective areabased Conservation Measures) if they are deemed to be
worthy of certification through the demonstration project.
While many of the SEPLS sites approved thistime are covered in forests, mountains, and spring water
ponds, Mariko Vineyard is the only farmland among
them being used for business. In addition, Mariko
Vineyard is highly praised as a winery, and it is the only
Japanese winery to be recognized as one of the “World’s
Best Vineyards” three consecutive years. In other words,
Mariko Vineyard provides not only social value throughits protection of biodiversity but also economic value asa winery, making it a perfect example of CSV in action.
In light of these achievements, the Kirin Groupparticipated in the 15th Conference of the Parties(COP15) to the United Nations Convention on Biological
Diversity (CBD) held in Montreal, Canada, and had theopportunity to present to the world the nature positive
initiatives of Mariko Vineyard. European countries andthe United States were both pleasantly surprised andappreciated Japan’ s and Asia’ s unique perspective on
nature, in which humans and nature co-exist, and its
efficiency. In the field of natural capital, Japan has thepotential to be a global leader. The Kirin Group will makebest use of the knowledge it has gained over the years
and participate in global initiatives as a leader in the field.
Lion Pty Ltd. in Australia participated in a pilot
test for the Scope 3 reduction. The GHG emissions in
Scope 3 are disclosed as an estimated value determinedby multiplying item-specific usage by the standard
emissions amount. Tracking actual performance values

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Mariko Vineyard

would be ideal, but is not common yet as exchanging
large amounts of data with a large number of business
partners is heavy lifting. An additional disincentive
to disclose accurate Scope 3 performance values iseven if the supplier reduces GHG emissions throughthe reduction of raw materials and rationalization of
production, buyers could use the reduction in resources
as a reason to start negotiating lower prices.
Therefore, Lion worked with four key value chain
partners to pool actual GHG emissions numbers in
an independent third party on a confidential basis toother companies in order to accurately measure GHG
emissions throughout the value chain. As a result, it
turned out that the measured value was about 11% lower
than the estimated value. In addition, by reflecting eachcompany’ s reduction plans, Lion was able to lower the2030 reduction prospect by 35% more than the originalplan. This initiative was presented as an advanced casestudy by Lion’ s CEO at the United Nations Framework
Convention on Climate Change’ s 27th Conference of
the Parties (COP27) held in Sharm El Sheikh, Egypt inNovember 2022. I believe these contributions allowed
the Kirin Group to become one of the world’ s leading

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environmentally-advanced companies.
On the other hand, we are aware that our humanrights measures are still in progress. In January 2023, wecompleted our withdrawal from the Myanmar business.
We conducted human rights due diligence when starting
business in Myanmar, but we never could have predicted
the military’ s coup d’ état. We want to utilize ourexperiences and lessons learned in Myanmar to improve
our human rights initiatives. We joined the Japan Center
for Engagement and Remedy on Business and Human
Rights (JaCER) late last year and implemented a humanrights grievance (report) system. This year, we plan torevise Kirin Group’ s human rights policy and to reinforce
our human rights governance system.
As a part of our value chain human rights
initiatives, the Kirin Group joined Sedex*3 (Supplier
Ethical Data Exchange) on a global level. In Australia,
97% of Lion’ s primary procurement consists of Sedexmember suppliers. In Japan, there are not so many
Sedex members yet, but more and more food andbeverage companies are joining the system. We hope
to collaborate with them in human rights-conscious
procurement and create a positive impact.

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Transforming business throughgrowing immunity-related products
and advancing non-financial
disclosure――Please tell us about your long-term outlook
toward achievement of KV2027.
In 2022, the World Health Organization (WHO)strengthened regulations, including lifting the goal of its
GAAP (Global Alcohol Action Plan) to reduce harmful
drinking from 10% to 20% by 2030. It is expected that
regulations will be further strengthened at the 4th Highlevel Meeting of the United Nations General Assemblyon the Prevention and Control of on NCDs set for 2025,
so expanding the volume of alcoholic beverages will
become more difficult.
Meanwhile, the pandemic has made the world
more conscious about immunity. The application of
Lactococcus lactis strain Plasma (LC-Plasma), a coreingredient of our Health Science domain, is steadily
expanding, not only within the Kirin Group, but being
licensed to Coca-Cola (Japan) Company, Limited
as well as being researched in order to develop a
pharmaceutical.
The Kirin Group has worked on immunity formany years. It was involved in the foundation of the
La Jolla Institute for Immunology, the world’ s topclass immunology research institute in the UnitedStates, which will welcome its 35th anniversary thisyear. We continue to support the Institute. The Institutecontributed to the discovery of the lead antibody of
KHK4083, a medicine for atopic dermatitis, which
Kyowa Kirin is currently developing and of which Kyowa
Kirin has made a co-development and co-marketing

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agreement with Amgen.
These research achievements in immunology
over the years have led to results in both thePharmaceuticals and Health Science domains of today.
We will continue growing steadily by cultivating LCPlasma and other specialty ingredients such as HMOs
as well as citicoline, expanding our business portfolio
beyond alcoholic beverages while playing our role as a
responsible alcohol producer.
In recent years, the disclosure of non-financial
information has been attracting a lot of attention. In
2022 and 2023, the Government Pension Investment
Fund (GPIF) published the results of “Excellent TCFD
Disclosure” survey in which the asset managers for GPIF
for Japanese domestic stocks voted for companies
with excellent TCFD disclosures, and Kirin received thehighest number of nominations for two consecutive
years. We published a trial disclosure based on the
LEAP approach in our 2022 Kirin Group Environmental
Report in July, 2022, conforming to the beta versionof TNFD’ s*4 framework, and became the world’ s firstto apply the approach in corporate disclosures. As theworld’s first case study, the disclosure was featured in
the Financial Times .
In anticipation of the spread of disclosures
adopting the TCFD framework, with the sustainability
disclosure standards of the International Financial
Reporting Standard (IFRS) Foundation’ s International
Sustainability Standards Board (ISSB) leading the way,
we aim to establish a de facto standard by continuing
to disclose information ahead of other companies.
We believe this will lead to the Kirin Group’s structuraladvantage in ESG and non-financial information
disclosure.

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LEAP approach focusing on “Location”
The LEAP approach involves analytical activities in thefollowing order: Discovering the nature interface (Locate),
diagnosing dependencies and impacts (Evaluate), assessing
risks and opportunities (Assess), and preparing to address
nature-related risks and opportunities and reporting back toinvestors (Prepare). This is a new approach to assessing andprioritizing natural capital dependence and impacts, with afocus on “Location” .
The Kirin Group intends to use the LEAP framework
to organize and deepen the initiatives it has been pursuing
as a company dependent on natural capital, and to makeappropriate disclosures.

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Contents“Locations” where water risks are high and water
resource management is particularly important.
Production plants in Australia (B)Locate All Kirin Group Australian brewery locations are inwater-stressed watersheds.
Evaluate Water stress in Australia is very high both
empirically and when measured with such tools as
Aqueduct. Once every few decades, when flooding occurs
due to torrential rains, the damage is significant.
Assess Water-saving technology is the best in the Group,
but there remains a possibility that production could be
disrupted in the event of a severe drought.
Prepare Contribute to the development of the SBTs for
Nature methodology and set new goals in line with this.
Widely publish joint research results in environmental
reports, and on the Web..

The Japanese wine where “Location” determines
the characteristics of the product.
Mariko Vineyard (A)Locate An important factor that determines the taste ofwine is “terroir” or the character of the land.
The vineyard is an area that remains natural and inhabited byrare species of plant and wildlife.
Evaluate Expansion of vineyards is necessary for the
expansion of the Japanese wine, and the target is derelict
land.
Assess Joint research with the National Agriculture andFood Research Organization (NARO) revealed that convertingderelict land into vineyards creates high-quality grasslands
and contributes to a rich ecosystem.
Prepare Contributing to Nature Positive and 30 by 30.

“Locations” that have a significant impact on ourbusinesses and are important in terms of the naturaland social environment. Sri Lankan tea farms (C)Locate The delicious taste of Kirin Gogo-no-Kocha issupported by tea farms in Sri Lanka.
Water sources of large coastal cities exist on the farms.
Evaluate Approximately 25% of the Sri Lankan tea leaves
imported by Japan are used by Kirin Gogo-no-Kocha .
Tea production areas face increased water risk and stressdue to climate change, while heavy rains run off fertile soils.
Assess If Sri Lankan tea leave on which Kirin is highly
dependent, cannot be used sustainably, the product concept
will fail.
Prepare Supporting Sri Lankan tea farms in obtaining The
Rainforest Alliance certifications since 2013. Widely publish
the number of farms obtained the certificate and the numberof farms trained in environmental reports, and on the Web.

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steadily advancing our efforts, including forwarding thedisclosure of human capital in our annual securities
reports.
Expanding investment in human capital alsomeans increasing the value of employees, which areassets entrusted to us by society. This is the basis of
CSV, as it leads to the enhancement of a company’scompetitiveness as well as the society’s assets.
Through the betterment of human capital as well, we
will achieve our goal of becoming a global leader in CSV.
*1 Reducing the total Group’s Scope 1 and Scope 2 emissions by atotal of 50%, and Scope 3 emissions by 30% by 2030, comparedto numbers in 2019.

Strengthen the competitiveness of
the Kirin Group and contribute tosociety by enhancing human capital――Please tell us about the Kirin Group’ s
initiatives from 2023 onward.
Focusing on the achievement of KV2027, we
will continue to grow our Food and Beverages,
Pharmaceuticals, and Health Science domains as
outlined in the CSV Purpose.
In 2022, we were able to produce material resultsthat could be communicated to the world in the areasof biodiversity and climate change. This is the result of
our continued proactive response to a wide range ofsocial issues. We will continue to proactively respond tochanging circumstances and will work harder than everto produce results and communicate them globally.
Regarding reinforcing human capitaldevelopment, Kirin Holdings President & CEO Isozaki isworking as promoter at the Human Capital Management
Consortium, established in Japan in 2022. We are*2 A declaration to preserve 30% of the earth’s land and marine
areas by 2030 to contribute to the preservation of biodiversity.
*3 A nonprofit organization based in the United Kingdom thatprovides an online platform for businesses to manage andimprove working conditions of the global supply chain. It is theworld’s largest supplier ethical information sharing platform foruniversal suppliers to conduct self-assessment questionnaires
in the four fields of labor, health and safety, environment, andbusiness ethics so that businesses and organizations canimprove responsible and sustainable business practices andprocurement activities. The platform is being used by morethan 65,000 businesses, foundations, factories, and the selfemployed, etc. in 180 countries and regions around the world.
*4 Abbreviation for Taskforce on Nature-related Financial
Disclosures. An international organization that develops andprovides frameworks for businesses to disclose information
on nature-related risks, and so that the flow of funds can be
redirected to bring about Nature Positive - a concept that aims tohalt the decline of nature and set a course for recovery by 2030

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Disclosure Based on TCFD and TNFD Frameworks
Disclosure of Information on Climate Change
Disclosure Based on TCFD Recommendations

Disclosure Framework

For a detailed scenario analysis, including responses to the new TCFD guidancefor 2021, please see “Disclosure Based on TCFD Recommendations” in the 2022
Environmental Report.

We started scenario analyses immediately after the publication of TCFD’ s final
recommendations in 2017 based on our many years of accumulated knowledge on therisk assessment of natural capital in the value chain and the impact of climate change,
and were able to promptly disclose information in line with TCFD recommendations in
the Kirin Group’ s Environmental Report published at the end of June 2018.
Disclosure based on TCFD recommendations advanced scientific proof thatclimate change issues are closely linked to other environmental challenges, andreaffirmed the effectiveness of a holistic approach.
In this part, we explain how the Kirin Group assesses and analyzes the impactsof climate change and promotes transition strategies such as mitigation and adaptationin order to increase resilience to climate change and lead a decarbonized society, in
accordance with the new guidance issued by the Task Force on Climate-related Financial
Disclosures (TCFD) in October 2021.
Details are available in our Environmental Report and on our website.

* New TCFD guidance
Guidance on Metrics, Targets,and Transition Plans(October 2021) Implementing the
Recommendations of the Task Force on Climate-related Financial Disclosures(October 2021)
https://www.fsb-tcfd.org/publications/Disclosure Based on TCFD RecommendationsPDF:1.3MB

Business Impacts of Climate Change andHolistic Approach
The Kirin Group’s business, which generates value by utilizing ecosystem services, relies
heavily on natural capital. As climate change becomes more severe due to greenhousegases generated by business activities, the agricultural products and water that are theraw materials in Kirin’s business will be most affected. The containers and packaging
required to deliver products also damage natural capital if we do not use appropriate
container materials and reuse used containers. Based on these recognitions, we havebeen conducting a variety of risk surveys related to natural capital since around 2010,
before the publication of the final TCFD recommendations. We are also taking a holistic
approach with the understanding that material issues set out in our Environmental
Vision―biological resources, water resources, containers and packaging, and climatechange―are interrelated rather than independent issues.

Governance● Supervisory structure

At the Kirin Group, the Board supervises the execution of operations addressing
environmental issues, such as climate change, natural capital, and a recycling-oriented
society. The Board also deliberates and makes resolutions on basic policies and material
matters related to these and other environmental issues.
Specifically, the Board at least once a year receives reports on and reviews
strategies, action plans, and the status of progress of environmental management.
These involve business risks and growth opportunities associated with environmental
issues, including material risks identified in the course of risk management, and theresults of scenario analyses.

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Disclosure of Information on Climate Change
Meanwhile, the Group Executive Committee deliberates and makes resolutions
on material non-financial targets.
Excerpts from the 2022 Board reports (conducted twice)● February 21･The Corporate Governance Code has been revised, and it is expected that the Board
will “deepen discussions to actively and proactively address sustainability issues.” andstrengthening governance is necessary･To strengthen our internal structure, multiple Group CSV Committee meetings will beheld, and each meeting will require reporting to the Board. A new Group Environmental
Meeting will be established, and it will be added to the governance structure along withthe existing Group Human Rights Meeting･To strengthen sustainability disclosure, we will disclose information in accordance with
the new TCFD guidance and prepare for ISSB compliance● December 19･ESG integration is becoming mainstream in corporate valuations, and companies won’ t
be valued by investors if they do not meet expectations for ESG compliance･At a time when simultaneous disclosure of financial and non-financial information isrequired, accelerating the aggregation of non-financial information is a major challenge･The Kirin Group is highly regarded for its progressive approach to TCFD and its trial
disclosure under the TNFD, and will continue to take the lead in global disclosure initiatives● Executive structure

The Senior Executive Officer in charge of CSV Strategy is responsible for environmental
issues, including climate change, and also chairs the Group Environmental Meeting. Since
FY2021, we have continued to participate in the Ministry of Economy, Trade and Industry’s
Study Group on Disclosure Policies for Non-financial Information, and have assisted in themaking of rules for climate related financial disclosure.
The Group CSV Committee, which meets three times a year to discuss CSV
issues, including environmental issues across the Kirin Group, is an advisory body to
the President & CEO, which is chaired by President & CEO of Kirin Holdings and whose
members consist of Presidents and CEOs of key Group companies and Senior Executive
Officers of Kirin Holdings, submits any decisions it makes to the Board.

In 2022, we increased the number of meetings of the Group CSV Committee (fromonce a year to 3 times a year) and established a new Group Environmental Meeting (twicea year) under the Group CSV Committee.
Committee

Chairperson

Group CSV
Committee

KH
President

Group
Environmental
Meeting

Chief Officer
in charge of
CSVCommittee Members
・KH Internal Officers
・Kirin Group・Presidents of key
domestic and overseas
operations

Meeting
Frequency

Main Agenda
・Exchanging views on Group CSV
policies, strategies, and action plans
・Monitoring Group companies’
implementation of CSV initiatives
・Reports from affiliated meeting bodies

・Chief Officer in charge of・Monitoring progress on various
Supply Chain Management
road maps to realize the Kirin
・KH Head of CSV Strategy
Group’s Environmental Vision 2050
・KH Head of Corporate
and exchanging views on policies,
Planning
strategies,and plans
・KH Head of Accounting

3 times/year
Of those, one
held
as a Group ESG
Meeting

Twice/year● Performance linkage

In view of the importance of environmental issues, including climate change, executive
compensation is set to be linked to the performance evaluation of non-financial metrics(the Group’s Scope 1 + Scope 2 reduction targets, water consumption per unit at Lion
production sites with high water stress, and recycling of PET bottles), one of the key
management indicators in the Medium-Term Business Plan.
Environmental issues, including climate change, are included in the CSV
commitment, one of the non-financial target for Group companies, and are reflected intheir business plans and the performance evaluations of their top management.

Business Impact Assessment of Risks andOpportunities of Climate Change
Since 2017, continued scenario analyses have helped us improve our level ofunderstanding and strategies for the risks and opportunities posed by climate change.
In addition to our own manufacturing sites, we also analyze the yield of agricultural
products, procurement costs, carbon pricing, etc. Businesses analyzed include Kirin
Brewery, Kirin Beverage, Mercian, Lion, Kyowa Kirin, Kyowa Hakko Bio, and Koiwai Dairy

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Disclosure of Information on Climate Change
Products, which account for approximately 90% of the Kirin Group’ s sales.
Scenario analyses use group scenarios that combine temperature scenarios(RCP) and socioeconomic scenarios (SSP), such as those of the IPCC. It is necessary totake into account the fact that the impact estimates analyzed and calculated are subject
to uncertainties in the research results, information, and data used. We will continue toreflect new research findings, information, and data to improve accuracy.
● Financial impact
Business Risks/Social Issues

Financial Impact

Decline in yields of agricultural 2° C scenario: Approx. 0.9 billion yen to 2.5 billion yen (2050)
products
4° C scenario: Approx. 2.5 billion yen to 9.7 billion yen (2050)
Physical risks

Shutdowns due to floods
Shutdowns due to droughts

Transition
risks

Business
opportunities*1

Financial impact of carbon
pricing on energy
Financial impact of carbon
pricing on agricultural
products*1

Approx. 1 billion yen (once-in-200-year disaster, a total of 20
locations in Japan)
Approx. 30 million to 0.6 billion yen
1.5° C scenario: Approx. 9.5 billion yen to 427 billion yen (2030)
2° C scenario: Approx. 69 billion yen (2030)

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Impact of divestments on GHG emissions
Impact of divestments on GHG emissionschange targets.
The estimated exposure of assets
in a typical once-in-200-year disaster(a total of 20 locations in Japan) is asfollows. While we believe it is unlikely thatboilers, delivery trucks, etc., will be forcedout of service before they reach their endof life due to laws and regulations, wehave disclosed the book values below forreference although they are not material.

(thousand tons CO2e)(thousand tons CO2e)
1,000
1,000

31
31
147
147

800
800
600
600

803
803

400
400

61
61
65
65

200
200
0
0

340
340
2019
2019

2030
2030

Myanmar business
Myanmar business
Lion non-alcoholic beverages business
Lion non-alcoholic beverages business

Assets exposed to risk
Items Subject to Analysis
Impact of divestment
Assets exposed to risk

Kirin Groupʼs “SBT1.5°C” target
Kirin Groupʼs “SBT1.5°C” target(Excluding Myanmar and Lion non-alcoholic beverages businesses)(Excluding Myanmar and Lion non-alcoholic beverages businesses)

Impact

Before business divestment

515 thousand tons CO2e

After divestment

463 thousand tons CO2e

Exposure

Approx. 1 billion yen

Residual value of related facilities

Approx. 1.1 billion yen

4° C scenario: Approx. 1 billion yen (2030)
RCP2.6/SSP1: Approx. 0.7 billion yen to 3.0 billion yen (2050)
RCP8.5/SSP3: Approx. 1.6 billion yen to 5.7 billion yen (2050)

Spread of infectious diseases

Immunity & health supplements market: Approx. 28,961.4 million
USD (2030)

Increased heatstroke

Drinks for heatstroke market: Approx. 94 billion to 188 billion yen(2100, 4° C scenario)

If GHG emissions are not reduced.

･The financial impact of a decline in yields of agricultural products due to climate change and carbon
pricing on agricultural products are assessed using the 25–75 percentile range of the distribution of
forecast data for price fluctuations. Due to high uncertainty, estimates of carbon pricing under the 1.5° C
scenario are included in the Environmental Report as reference values.

Analysis of impacts on assets
We estimated the impact of the sale of the Lion non-alcoholic beverages business in
2021 and the Myanmar business in 2023. There were no significant changes in thephysical and transition risks, and although GHG emissions from the divested businesses
were confirmed retroactively to the base year, we determined that there is no need to

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Strategy
Considering the business characteristics of the Kirin Group, in order to sustainably
create value, it is necessary to simultaneously respond to both the sustainable use ofnatural capital and increased resilience, as well as to minimize the challenges posed byclimate change, containers, and packaging that impede this.
While the scenario analyses draw on multiple research findings and include
different views, they generally indicate that climate change impacts on agricultural
products and water are inevitable.
Although we have judged that there will be no major impact that will change theindustrial structure, the impact will be considerable as a company that creates value
through ecosystem services generated by natural capital. We believe that it is essential
to continue to focus on reducing GHG emissions, making agricultural production areas
sustainable, and addressing water risks and stresses.
We were also able to grasp social issues related to heat stroke and infectious
diseases caused by climate change. We expect this can contribute to our business inthe Health & Well-being domain, which the Kirin Group defines as a growth area.

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Disclosure of Information on Climate Change

Transition Plan

Kirin Group Environmental Issues

NatureUsed containers
Risks and opportunities

Water
resources

Biologicalresources

the interconnectednessof environmental issues

Valuefrom nature

Kirin Group value creation

Risks and opportunities

Target setting through the program of SBTN
Disclosure in line with the TNFD

Adaptation(Sustainable
use of natural
capital)

Biologicalresources

Mitigation(Minimizing
impacton natural
capital)Business
opportunities

EnergyTarget setting validated by SBT
Disclosure in line with the TCFD

Rule making

Networking capabilities

Response Strategy

Progress

・Brewing technology that does not rely on barley
・Mass plant propagation technologies
・Support for farms to acquire certification for sustainableagriculture

・Established mass propagation technology for hop seedlings
・Joined a corporate engagement program of the Science Based
Targets Network (SBTN) for Nature and a pilot test of the Taskforce
on Nature-related Financial Disclosures (TNFD)
・Commenced a survey on highly risky business sites, based on the
results of natural disaster and flood simulations, to determine whether
we need to take out insurance on these sites
・Implemented flood prevention and facilities measures at
pharmaceutical plants that require a stable supply

・Sharing of knowledge against floods
・Facilities to protect against floods
Water resources ・Sharing of knowledge against droughts
・Development and deployment of water conservation
techniques
Containers andpackagingResearch anddevelopment capabilities
Engineering capabilities

Risks and opportunities

Climate change

Significant Issues

Kirinʼs strengths inenvironmental management
Holistic approach to understanding

Risks and opportunities

Ecosystem
services(agricultural products)

Containers
andpackaging・Promotion of PET-to-PET・Lightweight containers

Climate change

・Achieving science-based GHG emission reduction targets
・Profit and loss neutral energy conversion (through 2030)

Infectious
diseases

・Providing corresponding products

Heatstroke

・Providing drinks to address heatstroke

・Joined Alliance To End Plastic Waste
・Increase use of 100% recycled plastic R100 PET bottles
・Practical application of chemical recycling

・Formulated a roadmap to reducing GHG emissions up to 2030 (in2022). Finalized the reduction targets and paths for Group companies,
and started to work toward these targets
・We have installed PPA-based (except for Yokohama Plant) largescale solar power generation systems in all plants of Kirin Brewery(in 2021), Kyowa Kirin’ s Ube Plant, and Mercian’ s Fujisawa Plant (in2023). We have also raised the percentage of renewable energy in theoverall amount of energy procured to 100% at Kirin Brewery’ s Nagoya
Plant (2020), Sendai Plant (2022), Okayama Plant, and Fukuoka Plant,
Kyowa Kirin’ s Takasaki Plant, all production sites of Lion in Australia
and New Zealand (2023), and all wineries of Chateau Mercian (2022).
Kirin Holdings received SBT’ s net zero certification for the first time
as a food company in the world (2022)
・Expanded product lineup
・Supply and provision of ingredients to partner companies
・Raising awareness of heatstroke

The Kirin Group has formulated a roadmap for achieving
science-based GHG emission reduction targets andnet zero targets in order to limit the global averagetemperature increase to 1.5° C compared to preindustrial levels. The roadmap was discussed andresolved by the Executive Committee, and has been in
operation since January 2022. We have also developedand implemented investment plans and funding
measures in response to our roadmap. Exploration andtrials will continue for Scope 3, starting with reduction
measures in the packaging and agricultural domains. As
for climate change adaptation measures, we will expand
the promotion of sustainable agriculture and forestry.
We also plan to participate in a pilot program forinternational initiatives to develop natural capital target
setting methodologies and disclosure frameworks
to lead rule making. The roadmap will be reviewed
regularly and updated appropriately in light of scientificadvances, regulations, and other factors.

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Disclosure of Information on Climate Change● Scope 1 + 2 emissions reductions

Roadmap to Net Zero
Percentage of electricity comingfrom renewable energy

（％）

100

Obtained approval for “SBT2.0°C” target

100% of electricity comesfrom renewable energy

Joined “RE 100"

0

2017

2019

2020

2022

2030

2040

2050

Obtained approval for “SBT Net Zero” target

GHG emissions (Scope1＋Scope2)（tCO2e）

Obtained approval for “SBT1.5°C” target

800

50% decrease in Scope 1+2
and 30% decreasein Scope 3 compared to 2019

Up to 2030, the focus is on promoting energy conservationand expanding renewable energy
From 2030 onward, It is assumed that the combustion fuel usedin the steam production process wil be converted
from fossil fuels to hydrogen and other fuels

0

2019

2020

2021

2022

3
billion yen

Investment

2023

22.4
billion yen

2024

2025

2027

35
billion yen

Net Zero

2030

2033

2040

2050

42.2
billion yen

Green bonds
10 billion yen

Funding*Period: 2020 to 2025

Transition-linked loan
50 billion yen

Applications: Procurement of recycled PET resin
and introduction of heat pump systems at plants*Period 2023 to 2033
Promotion of energy conservation and expansion of renewable energy to reduce the GHG emissions in Scope 1 and Scope 2● Reducing Scope 1 and Scope 2 emissions● Investment amounts(Unit: thousand tons CO2e)

2021

2024

2030

2050

Kirin Brewery

185

Kirin Beverage

40

140

90

0

37

20

0

(Unit: hundred million yen)

2019-2021
MTBP

2022-2024
MTBP

2025-2027
MTBP

2028-2030
MTBP

Investment in/measures for energy
conservation

15

74

104

48

15

150

237

362

Mercian

59

45

27

0

Lion

84

74

51

0

Expansion ofrenewable energy

Kyowa Kirin

41

27

25

0

Energy transition

0

0

9

12

Kyowa Hakko Bio

201

165

109

0

Total

30

224

350

422

*Figures for MTBP from 2019 to 2021 are actual. The 2022-2023 plan
was estimated at the time of planning the transition-linked loan and thefigures may be revised.
*The investment value includes all cost related to install and procure therenewable energy.

For Scope 1 and Scope 2 reductions, we will combine
three approaches: promoting energy conservation,
expanding renewable energy, and transitioning energy.
Up to 2030, we will increase energy efficiency andreduce its use, transitioning the energy mix from fossil
fuels to electricity and utilizing electricity made fromrenewable energy sources.
After 2030, in order to achieve net zero in
2050, it will be necessary to switch the combustion
fuel used in the steam production process from fossil
fuels to hydrogen and other fuels that do not emit
GHG. Infrastructure development and technologicalinnovations are necessary, so there is uncertainty about
achieving these goals. We will take the initiative in taking
on the challenges of practical application and engage inappropriate policy proposals and rule making.
● Scope 3 emissions reduction

Of the categories defined in the GHG Protocol, we
have identified the following categories as the areasof focus: Category 1 (manufacture of ingredients andmaterials) making up the largest proportion of the total
emissions at approximately 60%, Category 4 (transport)
making up the second largest proportion, and Category
9 (distribution). We will promote reductions through“encouragement of reduction at business partners” and“reducing our own independent emissions.”
Lion has also shown in pilot tests that it canraise Scope 3 reduction targets by pooling actual GHG
emissions with suppliers and customers with a third
party, without mutual disclosure. This approach has

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Disclosure of Information on Climate Change
been published by Australia’s Climate Leaders Coalition as the Scope 3 Roadmap, which
was presented by Lion’ s CEO at COP27.

Encouragement of reduction atbusiness partners

We plan to reduce emissions with an emphasis on engagement basedon the emissions reduction plan and the status of progress in bothquantitative and qualitative terms at each company, obtained throughquestionnaires to major suppliers

Reduction of our own independent
emissions

We will make containers and packaging lighter and raise the percentageof recycled resin in PET bottles by leveraging the competence of our own
research institute to develop containers and packaging in-house● Investment plan

Until 2030, our basic principle for environmental investment is profit and loss neutral.
Specifically, we will offset increases in depreciation from investments and the costof procuring renewable energy with cost benefits derived from energy saving. We use
Net Present Value (NPV) as an indicator for environmental investments aimed mainly
at reducing GHG emissions and have incorporated Internal Carbon Pricing (ICP: $63/
tCO2e) into our framework for making investment decisions. We intend to accelerate thereduction of GHG emissions by reflecting ICP in the roadmap. In 2020, we issued green
bonds (totaling 10 billion yen) to finance the procurement of recycled PET resin andthe introduction of heat pump systems at plants. Then, in January 2023, we financed
the projects related to energy saving and renewable energy, which we are promoting aspart of initiatives to reduce Scope 1 and 2 GHG emissions, with a transition-linked loan
(totaling 50 billion yen) for the first time as a food company in Japan. The loan is subject
to the FY2022 subsidy for global warming countermeasures promotion project and theperformance-linked interest subsidies program offered by the Ministry of Economy,
Trade and Industry based on the Industrial Competitiveness Enhancement Act (financial
support for promoting the transition towards achieving a carbon-neutral economy).

Risk Management
Climate change risks consist of two categories: physical risks and transition risks. Of
these, areas producing raw materials and manufacturing sites are exposed to physicalrisks. Since 2013, the company has made various efforts to make its areas producing
raw materials sustainable while accumulating knowledge on recovery from flood damage
suffered by manufacturing facilities. To reduce GHG emissions, which is a significant
transition risk, we are prioritizing the “additionality” of substantially increasing renewableenergy and the “ethicality” of energy generation from the perspective of the environmental
impact and human rights. We have promoted the installation of large-scale solar power
generation at our plants and participation in the wind power generation business.
In addition, natural disasters of unprecedented scale and legal regulations thatchange the structure of industry are becoming a reality, and we believe that the approachof setting scenarios and analyzing and evaluating them is quite effective for risks thatwould have an extremely material impact on business if they occurred, regardless of thepossibility of such events. We will apply this approach not only to climate change but also
to other challenges to minimize risks and expand business opportunities.
Material risks, including those related to climate change, are managed by the Group
Risk and Compliance Committee, which meets every quarter and is chaired by the Senior
Executive Officer in charge of Risk Management. For the BCP, we have reviewed our
traditional event-by-event approach and transitioned to an all-hazard approach to business
continuity planning whereby we work out countermeasures with a focus on the loss ofmanagement resources, regardless of the event.
Metrics and Targets
Response

Mitigation
measures

Adaptation
measures

Items

Targets

Results

GHG emissions reduction targets (relative values)

Net zero (2050)

4,411 thousand tons CO2e

Scope1+2

50% reduction (in 2030 from 2019) 13% reduction

Scope 330% reduction (in 2030 from 2019) 722 thousand tons CO2e

Percentage of renewable energy in total energy
consumption

100% (2040)

17%

Number of small farms that received training for theacquisition of certification in Sri Lanka

10,000 farms (2025)

2,120 farms

Ratio of certified palm oil in Japan

Maintain 100%

100%

Lion water efficiency*

Less than 2.4 kl/kl (2025)

3.8kl/kl

Kyowa Hakko Bio water consumption

32% reduction (in 2030 from 2015) 52% reduction from 2015

Ratio of FSC-certified paper container used in theJapan Non-Alcoholic Beverages Businesses

Maintain 100%100%

Proportion of recycled materials used in PET bottles
in Japan

50% (2027)

4.9%*Tooheys Brewery, Castlemaine Perkins Brewery, James Boag Brewery, Pride

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Disclosure of Natural Capital
In 2010, the year of the 10th Conference of the Parties (COP10) to the Convention on
Biological Diversity held in Nagoya, we commenced a risk assessment of biologicalresources and acknowledged the dependency of our operations on natural capitalof specific regions. Recognizing this, we have continued and expanded support tea
farms for the acquisition of the Rainforest Alliance certifications in Sri Lanka, the main
producing area of tea leaves for Kirin Gogo-no-Kocha . As for water resources, we areacting on our early recognition that water stress and risk vary widely by country andregion given our experience conducting business in Japan where water resources are
relatively abundant and in Australia where water stress is intense. Our non-financial
information disclosure related to natural capital and our efforts toward achieving
science-based targets are as follows:

Information disclosure・Participated in the TNFD Forum as the first Japanese food and Pharmaceuticalcompany. We also participated in TNFD consultation group in Japan.
・Disclosed the LEAP approach (Locate-Evaluate-Assess-Prepare) proposed in the
Beta 0.1v of the TNFD framework. It is in the Kirin Group’ s Environmental Reportpublished in July 2022 as the first in the word on a trial basis.
・Participated in the TNFD pilot program and contributed to the rule making
・Mariko Vineyard has been selected as an approved site for the ministry of
the environment’s 30by30 alliance for biodiversity. The vineyard, which grows
grapes for Japan Wine, was introduced as a nature positive example at the 15th
Conference of the Parties (COP15) to the Convention on Biological Diversity.

Target setting・Participated in the Corporate Engagement Program organized by Science Based
Target Network for the first time as a Japanese food and Pharmaceuticalcompany
・Disclosed the AR3T framework on a trial basis in the Kirin Group’ s Environmental
Report published in July 2022. We prioritized our production sites based on the
proposed methodology presented by the SBTN in it.

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Corporate Governance / Risk Management
Corporate GovernanceInterview with Independent Nonexecutive Directors

A conversation between external
directors of the board
Expanding the Scale of the
Health Science Business
Through Combined Internal andExternal Strengths

Enhancing Management
Effectiveness
Required skills for directors
and Audit & Supervisory Board
members
Basic Policy for the Remunerationof Executive Officers
Risk Management
Quality initiatives In 2022

Contents

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Corporate Governance Structure● Kirin Holdings has adopted a pure holding company structure as a means ofGeneral Meeting of Shareholders
Auditing

Auditing

2 Internal Audit &Supervisory Board
Members

Auditing

3 Independent Audit &Supervisory Board
Members

Accounting Auditor

The Board

Audit & Supervisory Board

5 Internal Directors Chairman 7 Independent Directors

Cooperation

Cooperation

Auditing● The Kirin Group’s individual companies conduct their business autonomously with

Nomination and Remuneration
Advisory Committee
2 Internal Directors Chairman 3 Independent Directors

President

Cooperation

Group Executive Committee
Executive Oﬃcers

Internal Audit Department
Internal
Audit

Internal
Audit

Group Companies Operating Companies

Departments

controlling its diverse and global business, which is centered on 3 domains suchas food & beverages, pharmaceuticals and health science. As a pure holding
company, Kirin Holdings takes on the role of devising and implementing theGroup’s overall strategies, monitoring individual businesses, creating synergy, andresponding to challenges surrounding sustainability through coordination acrossthe Kirin Group.

Group CSV Committee

Group meetings for each sustainability issue※

Group Risk and Compliance Committee
Group Information Disclosure Committee

Group Service Companies※Group Environmental Meeting、Group Human Rights Meeting、Group Health and Safety Meeting 、etc

a sense of speed, while maintaining close ties to the local customers and otherstakeholders. Kirin Holdings grants appropriate authority to match the strategic
stages of individual Kirin Group companies and improves governance through theBoard of Directors and the Boards of individual group companies by dispatchingdirectors to those companies. Directors or Executive Officers of Kirin Holdings
serve concurrently as directors at the main companies in the Kirin Group.
● Kirin Holdings has adopted a Company with Audit & Supervisory Board system,

and aims to maintain and improve on a highly transparent governance system
for its stakeholders. The Board, which includes a number of Outside Directors,
works closely with the Audit & Supervisory Board, which also includes a numberof Outside Audit & Supervisory Board Members, and makes effective use of thestatutory and other auditing function to take final decisions on important matters.
At the same time, the Board endeavors to reinforce the monitoring function on
management. Kirin Holdings has introduced an executive officer based system inorder to implement strategies for each of its businesses and functions in an agile
fashion and clarify executive responsibilities. The Board of Directors determines
the scope of delegation to the Executive Officers based on their experience, trackrecord, and expertise in their respective fields.

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

President & CEO(Member of the Nomination
and Remuneration Advisory
Committee)

Yoshinori Isozaki

April 1977 Joined the Company
March 2015 President & Chief
Executive Officer of theCompany(Present Position)

Independent Non-executive Director of the Board

Representative Director of theBoard, Senior Executive Vice
President

Keisuke Nishimura

Business Alliance and Investment
Strategy, Overseas Business, Global
Craft Beer
April 1980 Joined the Company
March 2017 Representative Director,
Senior Executive Vice
President of the Company(Present Position)
Major Concurrent Positions:
Director of Kirin Brewery Co., Ltd.
Director of Lion Pty Ltd
Director of San Miguel Brewery Inc.

Director of the Board, Senior
Executive Officer
Member of the Nomination
and Remuneration Advisory
Committee

Toshiya Miyoshi

Public Relations, Risk Management,
Legal, Member of the Nomination andRemuneration
Advisory Committee
April 1982 Joined the Company
March 2015 Director of the Board, Senior
Executive Officer of theCompany (Present Position)
Major Concurrent Positions:
Director of Kirin Beverage Co., Ltd.
Director of San Miguel Brewery Inc.

Chairperson of the Board(Independent Non-executive
Director of the Board)

Masakatsu Mori
April 1969

Joined Arthur Andersen,
LLP
February 1989 Japan Representativeof Andersen Consulting(currently Accenture Japan
Ltd.)
March 2015 Audit & Supervisory Board
Member of the Company
March 2019 Non-executive Directorof the Company (Present
Position)Independent Non-executive
Director of the Board
Member of the Nomination
and Remuneration Advisory
Committee

Independent Non-executive
Director of the Board
Chairperson of the Nomination
and Remuneration Advisory
Committee

April 1978
March 2010

Joined Yamaha Motor Co., Ltd.
President, Chief Executive
Officer and Representative
Director of Yamaha Motor Co., Ltd.
January 2018 Chairman and Representative
Director of Yamaha Motor Co., Ltd.
March 2019 Non-executive Director of theCompany (Present Position)
June 2021
Outside Director of Japan
Airlines Co., Ltd. (Present
Position)

April 1987

Hiroyuki Yanagi

Chieko Matsuda

Joined The Long-Term Credit
Bank of Japan, Limited
April 2011 Professor of School ofBusiness Administration,
Faculty of Urban Liberal
Arts (Currently Faculty of
Economics and Business
Administration) at Tokyo
Metropolitan University(Present Position)
March 2016 Audit & Supervisory Board
Member of the Company
June 2020 Outside Director of IHI
Corporation (Present Position)

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

Strategy of Health Science Domain
President of Health Science Division

Personnel and General Affairs

September 1979 Joined John Swire &Sons (H.K.)Ltd.
April 1992
Managing Director of
Cathay Pacific Airways
LimitedApril 2000
Chief Executive Officer ofBritish Airways plc
March 2011
Director of Lion Pty Ltd
March 2020
Non-executive Directorof the Company (Present
Position)

July 1986

April 1979

Takeshi Minakata

April 1984 Joined the Company
March 2020 Senior Executive Officer of
the Company
Major Concurrent Positions:
Director of Kyowa Kirin Co., Ltd.

Junko Tsuboi

April 1985 Joined the Company
March 2023 Director of the Board, Senior
Executive Officer (Present
Position)
In charge：
Outside Director of FANCL Corporation

Rod Eddington

George Olcott

Joined S.G. Warburg & Co.,Ltd.
June 2000 Managing Director, Equity
Capital Market, UBS Warburg
Tokyo
March 2020 Non-executive Director of theCompany (Present Position)

Shinya Katanozaka
Joined ALL NIPPON AIRWAYS
CO., LTD. (currently ANAHOLDINGS INC.)
April 2015 Representative Director,
President & Chief Executive
Officer of ANA HOLDINGSINC.
March 2023 Non-executive Director of theCompany (Present Position)

Independent Non-executive
Director of the Board
Member of the Nomination
and Remuneration Advisory
Committee

Noriko Shiono

August 1983 Joined Japan New MediaCo., Ltd.
March 2010 Representative Director,
President of SSP Co., Ltd.
October 2017 President of Widex Japan(Present Position)
March 2018 Non-executive Director of
Kirin Company, Limited
March 2020 Non-executive Director of theCompany (Present Position)

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Audit & Supervisory Board Members

Audit & Supervisory Board
MemberShobu Nishitani

April 1987 Joined the Company
March 2016 Director of the Board of Lion
Pty Ltd.
March 2022 Standing Audit & Supervisory
Board Member of theCompany (Present Position)
Audit & Supervisory Board
Member of Kyowa Hakko BioCo., Ltd. (Present Position)

Standing Audit & Supervisory
Board Member

Toru Ishikura

April 1989 Joined the Company
March 2020 Director of the Board, Kyowa
Hakko Bio Co., Ltd.
March 2023 Standing Audit & Supervisory
Board Member of theCompany (Present Position)
Audit & Supervisory Board
Member of Kyowa Kirin Co.,
Ltd. (Present Position)

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Audit & Supervisory Board
MemberNovember 1981 Joined Showa Audit
Corporation (currently
Ernst & Young ShinNihon
LLC)
June 2002
Senior Partner of
ShinNihon & Co.(currently
Ernst & Young ShinNihon
LLC)
July 2013
Representative Directorof Ernst & Young InstituteCo., Ltd.
March 2020
Audit & Supervisory Board
Member of the Company(Present Position）

April 1980

Kaoru Kashima

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Executive Officer

Audit & Supervisory Board
MemberYoshiko Ando
April 1982
April 2003

Entered the Ministry of Labor
Lieutenant governor of Shiga
prefecture
July 2006 Director of Equal Employment
Policy Div. of Equal
Employment, Children andFamilies Bureau of the
Ministry of Health, Labour andWelfareJuly 2017 Director-General for Human
Resources Development of
the Ministry of Health, Labourand Welfare
March 2019 Audit & Supervisory Board
Member of the Company(Present Position)

Senior Executive Officer

Senior Executive Officer

Senior Executive Officer

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

Supply Chain Management,
Production Technology Strategy
Director of Kirin Beverage Co., Ltd.

Chief Financial Officer, IR.

Senior Executive Officer

Senior Executive Officer

Senior Executive Officer

R&D Strategy, Quality Assurance
President of R&D Division
Director of Kyowa Hakko Bio Co., Lt

Marketing, Corporate Brand Strategy
Digital, Information Strategy
Senior Executive Vice President of
Kirin Brewery Co., Ltd.

President and CEO of Kirin BreweryCo., Ltd.

Senior Executive Officer

Senior Executive Officer

President and CEO of Kirin BeverageCo., Ltd.

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

Ryosuke Mizouchi

Koji Fukada

Audit & Supervisory Board
Member

CSV Management

Masao Maehara

Mitsuharu Yamagata

Kenichi Fujinawa

Registered as lawyer inJapan
Joined Nagashima & Ohno
January 2000 Partner of Nagashima Ohno
& Tsunematsu
January 2015 Chairman of Nagashima
Ohno & Tsunematsu
March 2022 Audit & Supervisory Board
Member of the Company(Present Position）

Toru Yoshimura

Yuki Kanzaki

Shinjiro Akieda

Hideki Horiguchi

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Strengthen the Group’ s Coordination
to Accelerate Development of the
Health Science Business──What topics were discussed by the Kirin
Holdings Board of Directors in 2022 and what did
you deal with as a non-executive director?

Interview with Independent Non-executive Directors

A conversation between external directors of the board
Expanding the Scale of the Health Science Business ThroughCombined Internal and External Strengths
Masakatsu Mori

Noriko Shiono

Independent Non-executive Director of the Board(Chairperson of the Board)

Independent Non-executive Director of the Board(Member of the Nomination
and Remuneration Advisory Committee)

Joined Arthur Andersen & Co. in 1969. Assumed the positionof Japan president of Andersen Consulting (now Accenture
Japan Ltd.) in 1989 and went on to be Chairman and thenChief Corporate Advisor. He also served as a member of theInternational Board at the company for 13 years. He thenstarted working as President of the International University ofJapan in 2009 and went on to become Vice Chairman before
assuming his current position as Senior Advisor. He became
an Audit & Supervisory Board member for our company
in 2015 and Non-executive Director of the Board in 2019.
He currently acts as Non-executive Director for STANLEYELECTRIC Co., Ltd. and Audit & Supervisory Board member
for FAST RETAILING Co., Ltd.

Joined Japan New Media Co., Ltd. in 1983. She thenwent on to work as Representative Director & Presidentof SSP Co., Ltd. and President & Corporate Officer andChairman& Director of Konami Sports & Life Co., Ltd. (Now
Konami Sports Co., Ltd) before taking on her current role
as president of Widex Japan. She assumed the positionof Non-executive Director at Kirin Co., Ltd. in 2018. She
became our Strategic Advisor in 2019 before taking herrole as Non-executive Director in 2020.

Mori: The most important topic was that of the
optimization of our business portfolio. We continuously
discussed how we could create and improve value
throughout the range of our group’ s business, fromFood & Beverages to Pharmaceuticals.
Two topics brought up in the many discussions
were the withdrawal from business in Myanmar and thestructural reform of Kyowa Hakko Bio Co., Ltd. We haveorganized the handling and risk management of these
for the current term.
Shiono: On top of that, in 2022 we also started
discussing strategies based on function, such as R&D
and marketing that would improve the execution ofmanagement strategies. At the board meetings, I feel
we were able to hold fruitful discussions to effectively
move the entire group toward accelerating CSV
management.

──The Kirin Group is expanding business
into the Health Science domain based on theknowledge of fermentation technology andbiotechnology, a core competence, that it has
accumulated since the foundation of its firstcompany. What is your opinion on this?
Shiono: It is believed a company is not guaranteed
growth through only the continuation of current
businesses. Businesses must always be thinking about
creating new value using their core competencies

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INPUT(assets). From the perspective of our group, it is ofgreat significance that we are applying fermentation
technology and biotechnology, our core technologies,
to newly enter the Health Science business. This isbecause the health science business is also a businessdevelopment directly related to CSV in the sense that it
solves health issues.
Mori: It’ s just as Ms. Shiono said: a business is like aplant. If it stops growing, it dies. Our group could perish
if we only rely on existing business. For this reason,
we as non-executive directors believe taking on the
Health Science business as a growth area is the correct
strategy.
The global health science market is expanding,and there are many companies aiming to join. The Kirin
Group, however, is not engaged in just any ordinary
health science, but we are developing an integrated
business from ingredient development to productmanufacturing and sales with fermentation technology
and biotechnology, one of our core competencies, as
the foundation. Additionally, for example, if we were toincorporate ingredients from the Health Science domain
into products in our Food business, the entire groupwould align, and we would see our entire business’
position changing.

Build an Integrated System Ranging
from Ingredient Development to
Product Manufacturing and Sales,and Exercise our Strengths in the
Health Area
──What does the speed and progress of Kirin’ s
expansion in the Health Science domain look like?

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Shiono: The business models and the process timein the Food, Pharmaceuticals, and Health Sciencebusinesses are different. In the Food business, lead time
for the development of new products is comparably
fast. On the other hand, the health science businesscan only be launched after various processes, including
notification to and approval from the relevant ministries
and agencies to demonstrate efficacy and effectivenesson the body. So, as you can see, the cycles of productdevelopment are different, and while analysts andinvestors in food-related industries may feel the process
is slow, I think they will feel it is comparatively quicker
compared to the development of pharmaceuticals in thesame health industry.
That being said, we as the board are aware themarket won’ t wait for us, no matter the business. It
is crucial that we have an accurate understanding of
consumer needs and quickly provide materials andproducts, which is why the focus of the board in 2022
was the important topic of Health Science business.
We are especially proud of being able to sort out
the connection between the provision of specialty
ingredients and other raw materials by Kyowa Hakko
Bio on a B-to-B basis and the B-to-C business modelof the Food business the Kirin Group is familiar with.
As a result, we were able to finalize the entire businessstrategy, and I think we will be able to expand faster.
Mori: It is taking us a bit of time to get moving, but
I don’ t feel we are running behind. Furthermore, I
think many of the world’ s businesses use a businessmodel for mass consumption and mass production,
not just ours. When thinking about the health area, it isnecessary to split the market into multiple segments.
We are connecting our ingredients and the markets with
our different approach as an existing Food business andCSV Management

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creating new business focused on each segment fromscratch, so it can’ t be helped it is taking some time.
Shiono: While we are aware of the various opinions ofinvestors, from the perspective of group synergy, I thinkhaving a fellow Group company like Kyowa Kirin Co.,
Ltd., which is involved in the Pharmaceuticals business,
will help to push us. I believe it is because of theexistence of a company that makes pharmaceuticals
that contribute to healing that we can commit to healthas a group.
Mori: That’ s right. However, while Kyowa Kirin is amember of the Kirin Group, it is also an independent
listed company. I think that we as non-executive
directors of Kirin Holdings Company, Limited needto take note to keep the balance of independence
and cooperation since each company has their own
shareholders.

──We recently hear the word “BtoB/BtoC
Linkage Model *1,” which has allowed us to
see the possibilities of Kirin Group’ s businessdevelopment in the Health Science domain. Whatdo you think about this model?
Shiono: We are moving forward towards establishinga model unique to the Kirin Group, the “B-to-B & B-to-C
Link Model.” This model combines (1) the B-to-B modelin which we provide Kyowa Hakko Bio’ s ingredients tobusinesses for them to commercialize and (2) the B-to-C
model in which we commercialize other products, suchas Kirin Beverage Company, Limited’ s beverages, anddeliver them to consumers. In addition to Lactococcus
lactis strain Plasma（LC-Plasma）, which we havealready begun working with, we intend to expand next
with citicoline*2 and human milk oligosaccharides(HMOs)*3.

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The important thing when it comes to businessin the Health area is to broaden the scope of thebusiness so the products can benefit a wide rangeof diverse people. Consumers choose health-related
products based on whether they fit their lifestyle, so
it is imperative we make our products accessible to awide range of consumers. Our company creates goodmaterials, and their effectiveness is proven, so if we
also have partners who want to buy and commercialize
them, we should broaden and grow the scope of thebusiness by implementing the “BtoB/BtoC Linkage
Model.”
Mori: FAST RETAILING, a company at which I am an
Audit & Supervisory Board member, has transformed
into an integrated system that does everything frommaterial development, production and then sales.
Through this, they have been able to understand theirconsumers’ needs and succeed in the developmentof products to meet those needs, resulting in a
breakthrough in the apparel industry.
In the Health area, the Kirin Group won’ t simply
create an integrated system that does everything frommaterial development to product production and sales,
but we will look at each market’ s segment separately,
and our strength will be the ability to provide products
developed from ingredients that optimize them for thetarget segments. There is significance in promoting the“ BtoB/BtoC Linkage Model,” which will not only provide
materials within the group but will expand our provisionof raw materials to other businesses.
*1 A business model in which businesses are linked, that utilizing
the insights gained from selling the company’ s own productsin the BtoC business to create a new BtoB business that is not
limited to ingredient sales.
*2 An ingredient found in the body that maintains the cell
membranes of the brain and nerve cells, and has been used
for many years around the world in medicines for brain

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OUTCOMEdiseases and health foods that support the improvement ofcognitive functions. In Japan, it is currently classified as apharmaceutical product.
*3 A generic term for oligosaccharides contained in breast
milk. More than 200 kinds are contained in breast milk, andthe results of research contributing to immunity and brain
function, among others, have been reported.

──Where do you see certainty of growth in the
Health Science business?
Mori: We have set a goal of 200 billion yen in net sales
in our Long-Term Management Vision, “Kirin Group
Vision 2027” (KV2027). It’ s a bit of a lofty goal, but I
believe we can reach it because we have Kirin Holdings’
Health Science Business Division leading the way andvarious companies handling health-related products,
like Kyowa Hakko Bio, Kirin Beverage, and FANCLCORPORATION, have come together to work as one.
The Health Science domain is a challenging area filledwith competitors and new entrants, but I agree with the
management’ s decision to join the domain as part ofour group’ s growth strategy.
Shiono: I think there are a few benefits to the Kirin
Group entering the Health area. First, if we havetechnical advantages, we will have a competitive
advantage and entry into the area will be made difficultfor others. For example, iMUSE (IMMUSE in somemarkets), which incorporates the use of LC-Plasma,
was registered as a food with functional claims for
immunity. Its safety and functionality have been provenwith evidence, so it is difficult for other companies tojoin this domain, giving the Kirin Group a competitive
advantage.
This year, this advantage has led us to providing
LC-Plasma to Coca-Cola (Japan) Company, Limited. It
is a competitive company in the Beverage business, so
this is a groundbreaking initiative. If Kirin can exercise

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the trust and power its KIRIN brand has cultivated in the
Food business, I think reaching a net sales goal of 200
billion yen is fully within our reach.

Incorporating Diversity to Develop
Human Capital Capable of Overseas
Business Management
──What should the Kirin Group do to strengthen
their presence overseas?
Mori: Looking back on the Kirin Group’ s overseas
business, like the withdrawals from business in Brazil,
the beverage businesses in Australia, and business
in Myanmar, I see we have caused a lot of trouble forshareholders. Lion Pty Ltd in Australia is still facing
many challenges. Based on these experiences, thecurrent challenge of overseas business for the Kirin
Group is to develop global human capital that canmanage local subsidiaries and implement the global
strategy.
When a company advances into new territory,
global human capital are necessary; however, thereality is there is a shortage of global human capital,
and we believe it is urgent to foster them. The Health
Science business has a growing opportunity particularly
in North America and the Asia-Pacific region, so thedevelopment of human capital that can open the path tooverseas markets is becoming even more important.
Shiono: I agree. As is often the case with Japanesecompanies, the Kirin Group is a homogeneousorganization that lacks women in management,
foreign employees, and human assets with overseas
experience. I feel it might be difficult to manage thediverse values of foreign countries in this non-diverse
state we are in. In fact, this is a popular topic amongst

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non-executive directors.
In order to develop human assets that canmanage the overseas business, it is necessary tobring in outside perspectives by appointing external
human capital, including non-Japanese, and forming
partnerships with other companies and incorporating
values that differ from ours. We have been reforming
the Kirin Group’ s human resources strategy since2022. We are also considering proactively hiring foreign
workers, and the plan is progressing as intended.

Becoming a More Professional GroupThrough Change in Organizational
Capabilities──As non-executive directors, what are youropinions on the Kirin Group strengthening their“four organizational capabilities (drivers) for
driving innovations” ?

1) Diversity and inclusion, culture forinnovation
Shiono: To be honest, I think it would be good tochange the workforce in a more daring way. Whendeveloping human resources, the Kirin Group has mainly
used the Japanese model of hiring fresh graduates
in large numbers, giving them experiences in a wide
range of areas, and then positioning them in a role they
are likely to excel. If we are short on particular skills
or experiences, we compensate by hiring experienced
workers, but that alone isn’ t enough.
The important thing is to combine thesemethods. In other words, we need to create a work
environment for transferring the knowledge and skills

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team’ s expertise through the creation of horizontal
and vertical relations. I think the most effective method
for realizing this is to bring mid-career hires andinternational workers into middle management. I expect
this will change our organization into one with greater
speed of innovation by bringing in outside perspectives.
Mori: With the strengthening of organizational
capability, we are now looking for highly specialized
professionals instead of traditional generalists who
understand everything in a broad sense. We want toevolve into a strong organization full of professionals
who have advanced knowledge and skills in specialized
fields and who can compete with those in the same
field at other companies. If we do this, I think we will
be able to hire and retain external professional humanresources more easily, just as Ms. Shiono mentioned.

2) Core technology that assures value
creation
Shiono: The Kirin Group prides itself on its commitment
to basic research as a company in the beer business.
We especially see promise in the biotechnology area, afocus area of the Kirin Group. In recent years the world
has been focused on veganism, and going forward we
predict there will be a growing importance of medicine
and health products that are vegan, uncontaminated,and non-chemical. We believe that the Kirin Group’ sadvanced research technologies in plants andmicroorganisms will support us in these conditions.
On the other hand, despite our strengths inbasic research, and fermentation technology andbiotechnology, I feel they are not fully recognized.

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Humility is important, but I think we should freely
promote our technological skills and development
capabilities in the Health Science business.

3) Consumer-centric marketing
Mori: In the Health Science business, knowing theconsumers is crucial. Digital marketing technology thatallows us to visualize consumer needs is essential,
and we are rapidly developing it, but there is still alot of room for the Kirin Group to enhance itself inthis domain. We must enhance our ability to develop
merchandise strategy based on data we gain fromconnecting with and learning about consumers. In thebeer business, with craft beer and Home Tap at theforefront, connections with individual consumers havebecome vital. I want to keep an eye on the changes inthe digital marketing space.

4) ICT accelerating value creation
Mori: I feel it’ s necessary to enhance not only
marketing but ICT (information and communication
technology) as a whole. The Kirin Group has recently
replaced our outdated accounting, production, andlogistics system with SAP, but this is only a replacementof old technology. Going forward, we need to focus on
the use of ICT in business. I believe it is necessary for
us to look at ICT as a business reformation tool and to
think of prioritizing the installment of ICT to areas where
it can have significant benefits on business and wherecost and risk can be minimized.

──In the Kirin Group 2022-2024 Medium-TermBusiness Plan (2022 MTBP), “focus on quality”

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and “building an SCM system that balances
efficiency and sustainability” were added as two
additional organizational capabilities. What are
your thoughts on these new capabilities?
Mori: I think it was a good decision. Strengthening SCM(supply chain management) is especially important.
Manufacturing and logistics capabilities to maximize
brewery/factory utilization and minimize inventory
level are the keys for Kirin’ s business. How quickly
can we produce top sellers and how quickly can westop producing the worst sellers? These skills should
be developed as the basic strengths of our group. We
expect the SCM system to be even further enhanced
by being prioritized it as an important organizational
capability.

A Strong Governance System Built
on the Trust of the Executives──From the perspective of non-executive
directors, does it look like the Kirin Group’ s
governance system is functioning?
Mori: I have been overseeing the Kirin Group since
being appointed as an audit & supervisory board
member in 2015, and I can confidently say that Kirin
Holdings’ corporate governance is now first-class level.
Over the past few years, many good changes wereaccelerated owing to a mutual trust between the nonexecutive directors and company executives.
CEO Isozaki and we have a deep mutual trust,and that allows us to have a CEO evaluation system
led by non-executive directors. Non-executive directors
can observe and evaluate the CEO and his team on how
much value they are adding to the company in both theshort- and long-term. For example, we make sure that

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working toward realizing that vision by making futureoriented investments and developing human capital.
Many companies focus on short-term
achievements when determining the president’ s
remuneration, but Kirin Holdings evaluates them basedon medium- to long-term achievements. At the sametime, non-executive directors are not automatically
reappointed but are evaluated every year by the
Nomination and Remuneration Advisory Committee.
This evaluation is also reflected in the report of theBoard of Directors’ effectiveness. Therefore, we canconfidently state that our board members are all highly
qualified and not being constrained by the term ofservice.
Shiono: At board meetings, the non-executive directors
are forward with their opinions when talking to the
executives, including the CEO. As a member of theboard, I really feel the governance is functioning.
Mori: As chairperson, the thing I am most concerned
about is whether management issues within the groupare being raised on the agenda in a timely manner. Thisis because we from outside the company have limited
information, for example, if something important ishappening in the company and no one brings it up. Inthat regard, Kirin Holdings is giving us point-by-point
reports on important management issues within thegroup, so we are able to discuss solutions with goodtiming. I believe this shows our relationship of trust.
When it comes to business strategies andoperating plans, final decisions are only made after
repeated discussions with the board. The executives
listen to and reflect on the opinions of the non-executive
directors and then brush up their proposal for the final
board decision. It is through this cycle that we are able

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to make sound business decisions.

──What are the current governance-related
issues?
Mori: One issue that comes to mind is the need tofortify a global governance system. This ties back to our
discussion on human capital. We have to develop andappoint human capital capable of managing overseas
businesses, we should enhance our system so that
we can promptly understand the local conditions andquickly respond to any changes.
Shiono: If I was to bring something up, I would liketo see the executives share more of their thoughts
at board meetings. I understand the executives havediscussed the issues at length within the company, but
I would like to have more active discussions at board
meetings.
I think we as non-executive directors need to besomeone who can provide added value for executives.
The non-executive directors bring a new perspective on
results of discussions held within the company, offer
respective opinions from their different fields, and help
the board make better decisions. I hope to contribute tothis process.

──Thank you for taking the time today to
discuss your expectations and the issues
within the Kirin Group. We hope to use today’ s
discussion to promote initiatives for further
growth in the group.

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Enhancing Management EffectivenessEvaluation of the Board of
Director’ s Effectiveness
The Board of Directors effectiveness evaluations
conducted in fiscal 2016 defined the Board’ s two
primary functions as making important corporate
decisions and providing supervisory oversight. We
continue to conduct regular evaluations of Board
operations and meeting content to both ensure thosefunctions are being fulfilled and to continually improve
its efficiency by identifying points to make the meetings
more effective in the next fiscal year.

Observations(1) Composition and operation of the Board of
Directors(2) Strategy formulation, execution, and monitoring(3) Oversight of risk and crisis management(4) Oversight of decision-making, such as in businessacquisitions and withdrawals(5) Oversight of executive compensation andsuccessor development plans(6) Depths of awareness and oversight of soundcorporate ethics(7) General oversight of disclosure to stakeholders(8) Overall effectivenessEvaluation results

Fiscal 2022 discussion points
1. Discussion on "Business Portfolio”
2. Discussion on "strategy formulation, implementationand monitoring" that crosses business and functional
strategies
3. Discussion on "Instillation of Kirin Group Corporate
Philosophy to Promote CSV Management”
4. Discussion on "Ensuring that sound business ethics
are known and practiced”
5. Discussion on "Risk Management”

Fiscal 2022 evaluations
The Board of Directors discusses the results of theservey, which includes an evaluation perspective basedon a survey by a third-party advisor, while taking into
account the current status of efforts and improvements.

As a whole, the Board of Directors is effective andfunctioning properly.
Points receiving positive evaluations
1. The diversified Board of Directors enhances theeffectiveness of important decision-making andprovides multiple perspectives

・The independent non-executive director majority
has broadened the Board’ s range of expertise andstrengthened the supervisory function over businessexecution

・The Company has established a strong monitoring system
to reinforce 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 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 are being 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
that are not part of the meetings is gradually increasing, andthe deeper understanding of the business and strategies is
improving the quality of the discussions

Points to improve in fiscal 2023
Management has specified five points for improvement
in fiscal 2022 based on the opinions and areas for
improvement indicated in the evaluations in fiscal 2022
and with a view for the changing business environment.
The Company continually seeks to maintain andimprove the effectiveness of the Board of Directors
in accordance with the agenda set by IndependentNon-executive Director and Chairman of the Board
Masakatsu Mori and by providing more opportunities toshare information and engage in open discussions.
1. Discussion on "Business Portfolio”
2. Discussion on "strategy formulation, implementationand monitoring" that crosses business and functional
strategies
3. Discussion on "Instillation of Kirin Group Corporate
Philosophy to Promote CSV Management”
4. Discussion on "Ensuring that sound business ethics
are known and practiced”
5. Discussion on "Risk Management”

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Required skills for directors and Audit & Supervisory Board members
As of April, 2022, seven (7) Non-Executive Directors andthree (3) Audit & Supervisory Board Members that satisfy
the Company’s independence criteria, with reference tothe criteria for independence of officers as prescribed in
the regulations of the Tokyo Stock Exchange, have been
appointed as Independent Directors/Auditors in orderto improve the fairness and transparency of corporate
governance, ensure the Group’s sustainable growth, andboost corporate value over the medium to long term.
Criteria regarding the independence of Officers
https://www.kirinholdings.com/en/purpose/files/pdf/
e_independencecriteria_officer.pdf
Independent Officers Notification
https://www.kirinholdings.com/en/purpose/files/pdf/
e_independentofficer.pdf

Kirin Holdings has adopted a pure holding company
structure as a means of controlling its diverse andglobal business, which is centered on the three domainsof food & beverages, pharmaceuticals, and healthscience. As the institutional design, we have adopted aCompany with Audit & Supervisory Board system, andaim to maintain and improve on a highly transparent
governance system for its stakeholders. The Board,more than half of which are Outside Directors, works
closely with the Audit & Supervisory Board to takefinal decisions on important matters and reinforce themonitoring function on management. We have also
introduced an executive officer based system in orderto implement strategies for each of our businesses

enhancement, it is essential that the directors and Audit& Supervisory Board members have the necessary skills
and embrace diversity in terms of gender, nationality,
and other characteristics. This same requirement
applies to our management team.

and functions in an agile fashion and clarify executive
responsibilities.
To ensure the effective functioning of ourmonitoring and management structure and achieve
the Group’ s sustainable growth and corporate value

Expertise and Experience
Corporate
Management

CSV / ESG●●

President & CEO

Yoshinori Isozaki

Representative Director of the board, Senior
Executive Vice President

Keisuke Nishimura●●

Director of the Board and Senior Executive
Officer

Toshiya Miyoshi●●

Director of the Board and Senior Executive
OfficerTakeshi Minakata●●●

Director of the Board and Senior Executive
Officer

Junko Tsuboi●

Independent Non-executive Director of theBoard*1

Masakatsu Mori●●

Independent Non-executive Director of theBoard*1

Hiroyuki Yanagi

Independent Non-executive Director of theBoard*1

Chieko Matsuda

Independent Non-executive Director of theBoard*1

Noriko Shiono●

Independent Non-executive Director of theBoard*1

Rod Eddington●

Independent Non-executive Director of theBoard*1

George Olcott

Independent Non-executive Director of theBoard*1

Shinya Katanozaka

Senior Executive Officer

Ryosuke Mizouchi

Senior Executive Officer

Masao Maehara

Senior Executive Officer

Shinjiro Akieda

Senior Executive Officer

Koji Fukada

Senior Executive Officer

Mitsuharu Yamagata

Senior Executive Officer

Hideki Horiguchi

Senior Executive Officer

Toru Yoshimura

Senior Executive Officer

Yuki Kanzaki

Standing Audit & Supervisory Board Member

Shobu Nishitani

Standing Audit & Supervisory Board Member

Toru Ishikura

Audit & Supervisory Board Member*2

Yoshiko Ando

Audit & Supervisory Board Member*2

Kaoru Kashima

Audit & Supervisory Board Member*2

Kenichi Fujinawa

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HR / Organization Legal / Risk
Development
Management●●●

Manufacture /Brand Strategy / Overseas
Quality Assurance Marketing
Business
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R&D / Health
Science
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ICT
DX

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Finance /Accounting

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*1 The appointment fulfills the requirements for designation as an independent officer as prescribed in regulations of the Tokyo Stock Exchange and complies with theCompany’s criteria for the independence of officers.
*2 Outside Company Auditor as described in Article 2-16 of the Companies Act of Japan. Also fulfills the requirements for designation as an independent officer as prescribedin regulations of the Tokyo Stock Exchange and complies with the Company’s criteria for the independence of officers.

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Basic Policy for the Remuneration of Executive Officers
Basic Policy for theRemuneration of Executive
Officers
The Nomination and Remuneration Advisory Committee
will discuss the remuneration of Directors andExecutive Officers, and report to the Board based on
the following policy. The Committee will consider levelsof the remuneration and linkage with performanceby comparing them objectively with officers’
remuneration survey data of an external research body,and incorporate findings in its report to the Board of
Directors.
1. The Company shall establish a remuneration
structure that emphasizes the linkage of
remuneration with business performance andmedium- to long-term corporate value and sharevalue with the shareholders.
2. Remuneration levels shall be appropriate for theroles and responsibilities of the Kirin Group’ s
officers.
3. Remuneration shall be deliberated by the Nomination
and Remuneration Advisory Committee, in which
Non-Executive Directors constitute a majority, inorder to ensure objectivity and transparency.
Composition of the Remuneration
In order to encourage awareness of achieving shortterm performance targets and enhancing medium tolong term corporate value, remuneration for Directorsof the Board is composed of three parts: basic

remuneration (fixed remuneration), bonus (short-term
incentive remuneration), and Stock Compensation(medium- to long-term incentive remuneration). The
specific composition of remuneration is as follows
according to the classification of officers eligible for thepayment.

Remuneration

https://www.kirinholdings.com/en/purpose/governance/conpensation/

Structure of performance-linked remuneration
1. Bonus

The performance evaluation indicators are theCompany’s corporate performance evaluation indicators(consolidated normalized operating profit), businessperformance evaluation (normalized OP of groupcompanies or revenue in the health sciences domain),and individual performance evaluation. The amount of
paid ranges from 0% to 200% where 100% indicates theachievements of targets.

Evaluation Weighting by each performance evaluation indicators (Fiscal 2022)

Performance indicators

Representative Director of
the Board, Senior Executive
Vice President

President & CEO

Executive Officer
concurrently serving
as operating company
president, etc.

Other directors andexecutive officers

Company performance
evaluation

70%

60%

20%

50%

Business performance
evaluation

ー

ー

40%

ー

30%

40%

40%

50%

Individual performance
evaluation

The Nomination and Remuneration
Advisory Committee sets specificevaluation indicators and targets
following interviews with the president& CEO and the chairman and outside
directors of the Nomination andRemuneration Advisory Committee.

The Nomination and Remuneration Advisory Committee sets specific evaluation
indicators, targets and results for individual priority areas, department and groupcompany performance based on a draft proposal prepared by the president & CEO
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Procedures for determining the remunerations of executive officers
・In order to ensure fair and reasonable application of
the process in line with the above-mentioned basic
policy for executive remuneration, the executive
remuneration shall be deliberated at the Nomination
and Remuneration Advisory Committee of which the
majority of the members are Non-Executive Directors
and whose Chairperson is also an Non-Executive
Director, and the result is reported to the Board of
Directors.
・As for determining the specific amount of
remuneration, remuneration for Directors shall bedecided at the Board and that for Audit & Supervisory
Board members upon consultation with Audit &Supervisory Board based on the report from theNomination and Remuneration Advisory Committee
and within the limits of the remuneration amountdetermined in advance at the general meeting ofshareholders.
・Nomination and Remuneration Advisory Committee
regularly deliberates on the setting of remunerationlevels, the ratio of performance-linked remunerationand its mechanisms, and meets in responseto changes in the the environment of laws andregulations related to executive remuneration, andsubmits a report to the the Board.

Composition of the Remuneration

・In order to encourage awareness of achieving short-term performance targets and enhancing medium to long term
corporate value, remuneration for Directors of the Board is composed of three parts: basic remuneration (fixed
remuneration), bonus (short-term incentive remuneration), and Stock Compensation (medium- to long-term incentive
remuneration). The specific composition of remuneration is as follows according to the classification of officers
eligible for the payment.
Officer type

Fixed
remuneration
Basic
remuneration

Performance-linked
remuneration
Stock-based
Bonus
remuneration

Directors of theBoard(excluding Nonexecutive
Directors) and Executive
Officers○○○

Because they are responsible for the execution of business, Kirin Holdings
have established remuneration structure that takes into account theachievement of short-term consolidated performance targets and theimprovement of corporate value over the medium to long term.

Non-executive Directors

○

ー

ー

Because they are responsible for supervising and advising Company andGroup management from an objective position, only basic remuneration (fixed
remuneration) is provided.

Audit & Supervisory Board
Members○ーーBecause of their role of auditing the performance of directors’
executionof their business from an objective position, only basic remuneration (fixed
remuneration) is provided.

Purpose・The ratio of base remuneration to performance-linked remuneration for the President and Representative Director
is designed to be approximately 30:70 (including 30 for bonuses and 40 for stock-based remuneration), with otherdirectors and others following suit in consideration of their positions and responsibilities.

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Risk Management
Approach to risk management
The Kirin Group defines risk as uncertainty with thepotential to seriously impede the accomplishmentof business targets or impact business continuity.
The Group also defines crisis as risk manifested at a
certain point and requiring urgent action. The Group’ s
fundamental risk management policy is to mitigate
risk, prevent risk from being actualized, and keep risk
within a manageable level so that we can earn trust of
our stakeholders in a sustainable manner. By treating
strategies and risks as two sides of the same coin,
we assess and implement appropriate risk control
measures by analyzing risks in the phases of selecting
and implementing strategies, as well as risks that could
develop into crises, from various perspectives. Risk
information is disclosed in a timely and appropriatemanner on our corporate website and other means.

Risk management structure and process for determining andmonitoring significant risk
The Group has established the Group Risk andCompliance Committee consisting of Kirin Holding’ s
Senior Executive Officers or higher and chaired by the
Executive Officer in Charge of Risk. The committee
oversees the Group’ s risk management activities,
including collecting risk information, controlling risks,setting risk policy for the medium-term business plans
and for each fiscal year, preparing important items
for compliance, introducing risk reduction measures,
communicating the information and implementing
countermeasures when a risk arises, and providing
necessary instructions and support to Group
companies. The Board also oversees the effectivenessof risk management through deliberations and reportson the Group’ s major risks. (Figure 1)

Kirin group significant risk
Major risks associated withthe execution of Kirin Group’s
strategies, businesses,
and other activities aredescribed here. Please referto the following for details on
measures for each risk, suchas scenario analysis for ESGrelated risks.

Significant risks in each business domain
Business area

Main risk

Food & Beverages

・Risks related to responses to business environmentchanges・Risks related to hikes in raw materials and fuel prices

Health Science・Risk of not being able to provide differentiatedproducts and services related to social issues
・Risk of inability to increase added value due toinsufficient organizational capabilities

Pharmaceuticals

・Risk associated with maximizing the value of global
strategic products
・Risk related to product quality and stable supply
・Risk related to research and development

Risk details and main potential impacts
・Sales targets fall short due to changes in the market environment and preferences, fluctuations in productprices, or actions of competitor companies, etc.
・An increase in procurement costs due to hikes in raw materials and fuel prices affects manufacturing costs.

・The sales plan falls short due to the inability to formulate an effective business model.
・A value-creating and highly profitable business model cannot be established due to a delay in establishing anorganizational structure, as well as a delay in developing, acquiring, and strengthening human resources forbusiness management, or inability to develop cooperation and synergies within the Group.
・The market penetration is not successful because of the expansion of the business area being slowed bydelays in launch preparation and other factors, or difficulty in connecting with potential patients.
・Stable product supply is impeded due to safety or quality concerns or difficulty in maintaining stable supply
due to a sharp increase in demand or a tight supply and demand balance.
・Growth potential and profitability in the future decline due to delayed enhancement of the pipeline.

Main countermeasures,
related sections in this report,
and risk awareness・P.60～P.70（Food and Beverages
domain）
・P.49～P.59（Health Science
domain）

・P.71～P.72（Pharmaceuticals
domain）

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About Kirin Group

Value Creation Model
INPUT

Value Creation Model
BUSINESS

Value Creation Model
OUTPUT

Value Creation Model
OUTCOME

CSV Management

Corporate GovernanceRisk Management

Contents

Significant risks common to each business domain
Business area
Securing and training of
human resources

Information technology

Quality

Human rights

Main risk

Risk details and main potential impacts

・Organizational capabilities with competitive advantage are not achieved.
・Risk of inability to adequately secure and train human resources
・Stagnant transition to an assumed system results in a decline into advance Group management and with a high level oforganizational capabilities, causing adverse effect in accomplishingexpertise necessary for business activities
management strategies.
・Inadequate understanding of consumer trends and inability to provide
・Risk that the Group will be inferior to competitors due to lack of
products that meet customer needs limits sales and profits.
progress in digital transformation (DX) initiatives
・A shortage of employees required to promote DX results in a delay in DX
・Risk of falling behind in securing and training of DX experts
initiatives.
・Risk of unexpected quality issues beyond the scope of quality
assurance measures
・Risk of receiving orders for improvement or administrative
guidance from authorities concerned as a consequence of theuse of inappropriate statements
・Risk of the Kirin Group’ s businesses, including those in eachprocess of its value chain and those engaged by its business
partners, adversely affecting human rights either directly or
indirectly

・Our corporate brand image is undermined or we are forced to scale down orwithdraw from business.
・We may have to pay fines or face litigation in cases we have violated laws
and regulations, or we are subject to other economic penalties.

Environment

Adverse effect of
alcohol consumption

・Risk of globally strengthening restrictions on sales andmarketing of alcoholic beverages

Supply chain

・Risk of supply chain disruption caused by large-scale natural
disasters such as earthquakes and typhoons, infectious
diseases, or impacts of geopolitical risks

・Risks related to hikes in raw materials and fuel prices
・Risk of inability to procure or delay in procuring raw materials
due to impacts of geopolitical risks

Information security

・Risk of a cyber-attack, information security incident, or
information leakCompliance・Risk of behavior that is illegal or counter to social norms

Finance and taxes

・Secure and nurture the human resources required for executing our management
strategies.
・Embraces diversity, and transforms differences into strengths.
・P.27～ P.32（Diversity and inclusion, culture for innovation）
・Autonomous DX promotion in each Group company and division.
・Developing and Securing DX Human Resources
・P.42～P.44（ICT accelerating value creation）

・Foster an organizational culture that values customer-first and quality-first across・Product discontinuation, recall, or compensation claims lead to incurrence of
all Group companies and divisions.
high costs or restriction on business activities.
・P.33～P.38（Core technology that creates accurate value: A competitive strategy
・A loss of trust of customers erodes our brand value.
combining R&D expertise and IP strategies）

・Procurement costs increase due to decreased yields of agricultural raw
・Physical risks of climate change, transition risks to amaterials caused by global warming, droughts and floods, or operations aredecarbonized societysuspended due to droughts and floods.
・Risks of a delay in the development of technologies, etc., which ・Fuel costs and agricultural product costs increase due to carbon taxes.
could impede or delay the solution of environmental issues
・Inability to adequately respond to the society’ s expectations results in a
decline in corporate value.

Procurement

Main countermeasures, related sections in this report, and risk awareness・Measures to ensure human rights based on the Kirin Group Human Rights Policy
・P.89～P.93（Giving Back to the Community throuugh Human Powered Business）
・Initiatives to Achieve the Long-Term Strategy Kirin Group’ s Environmental Vision
2050
・P.94～P.97（Creating Positive Impact on Society through Active Engagement with
Natural Capital）

・Alcohol consumption reduces.
・Corporate brand value declines.

・Promote responsible drinking habits, Self-regulation of advertising and promotional
activities
・P.8～ P.9（CSV Purpose）

・Greater than expected procurement costs suppress profits from business
operations.
・Inability to secure raw materials required or delay in their delivery affectour manufacturing plans, leading to supply and demand adjustment and its
prolongation.
・We face difficulty in procuring raw materials, leading to negative
consequences such as a decline in corporate image and consumer boycott.

・Risk reduction through long-term contracts, derivatives, and currency hedging andefforts to build and strengthen a stable procurement structure

・Legal punishment, litigation, or social sanctions lead to a loss of customer
trust.

・Promote understanding and awareness through periodic training

・Business sites are closed or business activities are reduced or suspended.
・Delays in distribution or stockouts occur due to procurement, production, and ・Develop an all-hazards BCP and improve its effectivenesslogistics capabilities being unable to meet demand due to regional conflicts ・Improve the accuracy of supply-demand forecasts through the use of digital ICTor terrorism, or a sharp rise in sales volume during peak periods.

・A leak of personal information or important trade secrets results in a loss ofcustomer trust and incurrence of claims for damage compensation.
・Establishing a security response system and implementing human, physical, and・A cyber-attack causes business operations to be suspended or to be relayedtechnical measures.
due to the extended time required for recovery.

・Exchange rate fluctuations cause a change in the yen-translated value of・Risk of fluctuations of value in Japanese yen due to exchange
financial statements denominated in local currencies and in the cost of
rate volatility
procuring raw materials through foreign currency denominated transactions. ・Ensure tax compliance and tax transparency
・Risk of inability to raise necessary funds due to changes in・Restrictions on fund procurement lead to a shortage of working capital andfinancial markets/rating, or risk of fluctuations in financing costborrowings at high interest rates increase finance costs.

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About Kirin Group

Value Creation Model
INPUT

Value Creation Model
BUSINESS

Value Creation Model
OUTPUT

Value Creation Model
OUTCOME

CSV Management

Corporate GovernanceRisk Management

Contents

Quality initiatives In 2022
The Kirin Group is pursuing Group-wide initiatives tofoster a "Culture that values quality" as outlined in the2022-2024 Mid-term Business Plan. The Group defines
quality as "satisfying consumers by providing products
and services that meet their expectations."
We have established the Kirin group Global
Quality Management Principles (KGQMP), which
represent the Kirin Group’s Quality Policy and Action
Principles based on the Kirin Group’s management
principles of "consumer-first approach" and "steadyfocus on quality" in order to achieve higher quality.
This principle is the basis of quality managementthat the Kirin Group values throughout the entire value
chain, from raw material procurement, to delivery of
products and services to consumers through productdevelopment, manufacturing, and logistics. This
concept is reflected in the quality management systemsof each Group company in the food & beverages
domain, health science domain, and pharmaceuticaldomain, both in Japan and overseas, and leads to
products and services of reliable quality.
The Quality Assurance Department of Kirin
Holdings Company, Limited carries out activities tounderstand the quality assurance status of each Group
company and pursue improvements through regulardialogues on quality assurance with major Group
operating companies in Japan and overseas, in orderto further enhance the autonomous quality assurance
activities of each company. We set common indicators(KH indicators)for quality assurance that are measurable
across all entities, including input indicators such as thestatus of international certification and the sufficiencyof resources for quality assurance operations, as wellas output indicators such as the number of quality
incidents and consumer complaints, and exchange
opinions for monitoring and improvement. The statusof each Group company is discussed by the Group
Executive Committee and reported annually to theBoard of Directors.
We have established "Guidelines for assuranceof raw material safety in the Kirin Group (food businessin Japan)" for the procurement of raw materials inthe value chain that the Kirin Group is responsible
for, and ensure the safety of the raw materials we
use by assessing risks to raw materials handled byGroup companies and taking appropriate measures
based on a wide range of risk information, including
information from government and research institutionsin Japan and abroad that is regularly collected by
the Quality Assurance Department of Kirin Holdings

Company, Limited. In addition, we operate foodquality management systems (ISO9001) and foodsafety management systems (FSSC22000, etc.) thatincorporate the concept of international standards aspart of our quality assurance initiatives in development,
manufacturing, and logistics, and define "Food Defense
Guidelines" and "Microbial Assurance Guidelines" toensure the quality and safety of the products we deliver
to consumers.
In the quality management system for thealcoholic and beverage business in Japan, we
horizontally deploy examples and measures to prevent
recurrence through meetings attended by quality
assurance managers of each operating company, sothat quality problems that occur in a particular business
are not kept within that particular company.
In addition, the Food Safety and Quality
Assurance Center, a specialized organization within theGroup responsible for product inspection and analysis,
provides technical support for the Group’s advanced
quality assurance system.
We will continue to deliver safe and reliable
products and services to our consumers through theseGroup-wide initiatives, as well as by fostering a culturethat values quality.

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publish July 2023