Integrated Report 2023

2-4-16, Kyobashi, Chuo-ku, Tokyo 104-0031, Japan
https://www.meiji.com/global

About the Meiji Group

The Meiji Group’s Vision and Health Value

Group Philosophy
Our mission is to widen the world of“Tastiness and Enjoyment” and meet
all expectations regarding “Health and Reassurance.”
Our wish is to be closely in tune with

Providing Meiji Unique Valuefor Wellness to All Stakeholders

our customers’ feelings and to always be there
to brighten their daily lives.
Our responsibility as “Food and Health” professionals
is to continue finding innovative ways to meet our

Health of Employees

customers’ needs, today and tomorrow.

Healthy Society

What Is Meiji Unique Value for Wellness?
Our goal is to deliver Meiji unique value for wellness to all stakeholders throughthe cycle of Cure, Care, and Share. Cure and Care mean contributing tocustomers’ physical and emotional well-being for all generations, from babies• Thriving communities(Partnership with local
communities, social
contribution activities)• Sustainable sourcing• Build mutual trust in
relationships withbusiness partners

to the elderly. We will support everybody as much as and as long as possible
and bring them healthy, happy smiles. Share means having people spreadsmiles around them. We will link individual health to the smiles of people allover the world. This is Meiji unique value for wellness.

Healthier Lives
for Customers• Live longer, healthier lives• Lead healthy, fulfilling lives• Tastiness and enjoyment• Product safety andreassurance• Establish a workplaceenvironment where each
employee can demonstrate
their strengths and skills• Establish a workplaceenvironment where
employees can stayhealthy both mentallyand physically

Realizing a Better Futurefor People,
Society and the Earth
Healthier Lives
Thriving Communities
Coexisting with Nature

Shareholders& Investors• Sustainable growth• Sound financial base,enhanced capitalefficiency, and stableprofit return

GlobalEnvironmental
Health• Caring for the earth(Environmental
conservation, reduced
environmental burden,
and biodiversity
conservation)• Sustainable sourcing

Meiji Holdings Co., Ltd.｜Integrated Report 2023 01

About the Meiji Group

Editorial Policy
Since 2018, Meiji Holdings Co., Ltd. (the Company) has been issuing
the Integrated Report and will continue to replace the Annual
Report. After celebrating our 100-year anniversary, the Meiji Groupwill seek further growth. In this report, we have compiled financial
and non-financial information focusing on the Value Creation Story
that has led us to sustainable growth.
Reference Guidelines:• IFRS Foundation Integrated Reporting Framework• Task Force on Climate-related Financial Disclosures (TCFD)• Guidance for Collaborative
Value Creation by Ministry of
Economy, Trade and Industry

Using the Integrated Report 2023
• This report is based on the performance results from FY2022(fiscal year ended March 2023). Some content is also
included from FY2023 (fiscal year ending March 2024).
• The content is compiled based on information that isavailable at the time when the Company created theIntegrated Report 2023. Therefore, please note that theactual results may be different from the Company’s forecast.
The information in the report is current as of August 2023
unless otherwise specified.
• The Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29, March 31, 2020) and related
implementation guidance are being applied as of FY2021.
Unless otherwise stated, through to FY2020, these standards
do not apply, and from FY2021 onward, these standards
apply.

The Meiji Group’s Information Disclosure
The Integrated Report provides important information to our company and stakeholders. For financial statements and otherinformation with an independent auditor’s report, please refer to the Annual Securities Report. For more detailed information
about the Meiji Group, please refer to our websites.
High
Importance tostakeholders

Integrated Report

Integrated Report
The Meiji Group works on pursuing sustainableimprovement of corporate value. We describe ourvalue-creating efforts in the Integrated Report. We hope
you enjoy our story and deepen your understanding of the
Meiji Group.

WebsitesContents

About the Meiji Group
01 The Meiji Group’s Vision and Health Value
02 Editorial Policy /The Meiji Group’s Information Disclosure
03 Contents
04 Process to Realize the Meiji Group 2026 Vision
06 At a Glance
08 A Hundred Year History ofCreating Meiji Unique Value for Wellness

WebsitesHigh

Our websites provide detailed and comprehensive information on our corporate profile, financial
information, corporate governance, sustainability-related information, the latest news, etc.

Investors

About the Meiji Grouphttps://www.meiji.com/global/investors/

Wellness Stories

Financial Performance
Results & Presentations
Invest in Meiji
Business Plans
Governance
Stock Information
M&A and Alliances

Sustainability
https://www.meiji.com/global/sustainability/
Healthier Lives
Caring for the Earth
The Meiji Group TCFD Initiative

Thriving Communities
Sustainable Sourcing
Collaboration
External Recognition
ESG Index

02 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Please visit this website for stories about our initiatives
to pursue Meiji unique value for wellness.
https://www.meiji.com/global/wellness-stories/

Innovation

Please visit this website for information on new
initiatives to create health value.

https://www.meiji.com/global/about-meiji/innovation.html

40 Sustainability Strategy
44 Coexisting with Nature
46
Making Dairy Farming Sustainablewith a New Approach

48

Making Cocoa Production Sustainablewith Cocoa Production Areas

50

Creating a Strong Operating Basethat Grows while Coexisting with Nature

12 Message from CEO
18 Message from CFO
20 Overview of 2023 Medium-Term Business Planand Meiji ROESG

52
54
58
60
61
64

Value Creation Process

Governance

26 The Meiji Group’s Process for Value Creation
28 Driving Force Behind Sustainable Value Creation
30 Financial and Non-Financial Highlights

66 Discussion with Outside Director and
Audit & Supervisory Board Member
71 Corporate Governance
82 Risk Management
86 Directors and Audit & Supervisory
Board Members

Message from the Management

Integrated Report

Importance to the Meiji Group

Our Initiatives to Support
Sustainable Value Creation(Main Indices)

Progress for 2023 Medium-TermBusiness Plan
32 Food Segment Business Strategy
36 Pharmaceutical Segment Business Strategy

Human Capital Strategy
Human Capital Management
Human Rights
Creating Innovation
Food Segment
Pharmaceutical Segment

Financial and
Non-Financial Performance
88 Financial and Non-Financial Highlights(11 Years Summary)

90 Non-Financial Performance(Progress on Materiality)

Meiji Group Overview

93 Independent Practitioner’s Assurance ofEnergy Consumption, CO2 Emissions,
Water Consumption & Industrial Waste

https://www.meiji.com/global/about-meiji/

Corporate Information

Please visit this website for information about the MeijiGroup’s mission and vision, slogan, management
structure, business domains, history, and otherinformation.

Please visit the following URL for other detailed
information.

Meiji Holdings Co., Ltd.

https://www.meiji.com/global/

94 Operating Bases and Group Companies
96 Corporate Data / Stock Information
97 Cover Artwork / Publisher’s Note

Meiji Holdings Co., Ltd.｜Integrated Report 2023 03

About the Meiji Group

Process to Realize the Meiji Group 2026 Vision

The Meiji Group 2026 Vision

In FY2018, the Meiji Group created the Meiji Group 2026 Vision as a strategy to maximize our strengths to growfurther. We aim to improve our corporate value over the medium- and long-term while responding to changes in thebusiness environment.

98.3

102.7

106.0

Consolidated
operating profit

Long-term Vision - The Meiji Group’s Ideal Corporate Identity
The Meiji Group will combine the strengths that we have cultivated over the past 100 years with the latest
technology and knowledge. Thus, we will create innovative ways to meet our customers’ needs through food andhealth. In this way, we will grow in Japan and worldwide sustainably.

Key Strategies

92.9
75.4

78.0

(JPY bn)

1. Secure an overwhelming advantage
in core businesses
2. Establish growth foundation in overseas markets
3. New challenges in the health value domain
4. Social contributions

Operating profit Mid to highgrowth rate
single-digit (CAGR)

20 %Maintain 10 % or more

Overseas
sales ratio

Target at

ROE

Structure of the Meiji Group 2026 Vision
FY2018FY2019FY2020

FY2021

FY2022

1. Secure an overwhelming advantage
in core businesses
2. Establish growth foundationin overseas markets
3. New challenges in the healthvalue domain

FY2023(Planned)

Roadmap to Realize the Meiji Group 2026 Vision
We are formulating three Medium-Term Business Plans to realize the Meiji Group 2026 Vision. The Plan in the firststage began in FY2018 and ended in FY2020. We are now implementing the 2023 Medium-Term Business Plan, thesecond stage.

2018

2020

Key Issues● Healthier Lives● Caring for the Earth● Thriving Communities• Use external resources• Increase productivity significantly

Business
VisionSustainability
VisionThe 1st stage

The 2nd stage

The 3rd stage

Address strategic issues
continuously and challenge
for the further growth

Promote the Meiji ROESG®
Management Effectively

Evolution of Meiji ROESG®
Management

Realize both profit growthand sustainability activities

See page 20 for details

Promote the Meiji ROESG® Management Effectively
Realize both profit growth and sustainability activities
1. Business Strategy
Food Segment

1) Recover from the stagnation in our core business
2) Expand overseas businessPharmaceutical Segment

1) Integrate business operations of Meiji Seika Pharmaand KM Biologics (Strengthen vaccine business)
2) Expand CMO/CDMOGroup-wide

Management
Foundation
Vision● Establish functional, strategic
management system to growsustainably in Japan and globally● Develop work environment,
in-house system, andorganizational climate tomaximize individual potential● Enhance the Meiji brand

2023

2023 Medium-Term Business Plan, the 2nd Stage
Concept

4. Social contributions

To promote;

Venture into new domains

2. Improve business management using ROIC effectively
3. Invest to grow business while constructing strong financial base
4. Promote the Meiji Group Sustainability 2026 Vision(To be announced in May 2024)

Important Operating Environment
Opportunity• Growing consciousness on prevention and health• Growing overseas emerging economies andmiddle-income class• Changes in social structure - Aging• Expanding e-commerce• Growing environmental awareness and ethicalconsumption

Threat• Shrinking domestic market due to population
decline• Increased tendency to cut back in response torising prices• Impact of climate change on supply chain• Food shortages due to global population growth• Transition to digital formats

2026
Key Points for the 2026 Medium-TermBusiness Plan
1. Create New Markets• Integrate sustainability and businessperformance – Pursue “Trade-On”• Effectively invest in the promising growth market

2. Keep and improve stable cash flow
• Review business portfolio and improve capitalefficiency using ROIC
• Undertake growth-enhancing structural reforms
Decrease SKUs, review production structure, etc.
• Strengthen existing business by taking newmeasures by taking new measures such as using
digital technology

3. Strengthen management base toachieve the above points* ROESG is a registered trademark for a management indicator developed by Kunio Ito, a professor at Hitotsubashi University.

04 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 05

About the Meiji GroupAt a Glance
Our corporate group consists of Meiji Co., Ltd. which runs the Food business, and Meiji Seika Pharma Co., Ltd.
and KM Biologics Co., Ltd. which run the Pharmaceutical business. Our mission is to widen the world of“Tastiness and Enjoyment” and to meet all expectations regarding “Health and Reassurance” by providing awide range of products that are essential in people’s lives, such as dairy products, confectioneries, nutritional
products, and pharmaceuticals.
Meiji Holdings is a pure holding
company that was established in 2009
after integrating the management for
Meiji Seika Kaisha, Ltd. and Meiji Dairies
Corporation. The Company underwent
business reorganization in 2011, and KM
Biologics Co., Ltd. joined the Group in
July 2018, leading to the current Groupstructure.

Group Organization(As of March 31, 2023)

Meiji Holdings Co., Ltd.

Food Segment

Pharmaceutical Segment

Meiji Co., Ltd.

Meiji Seika Pharma Co., Ltd.

Group Companies and Employees (As of March 31, 2023)

The following numbers represent our Group’s global reach:- The number of Group companies consists of consolidated companies and entities accounted for by the equity method- The number of the employees includes all consolidated companies

Japan

The U.S.

30 companies
11,527 people

3 companies
654 people* Including Meiji Holdings Co., Ltd.

JPY

1,062.1

This segment develops our ethical pharmaceuticals
business globally, covering products such as
antibacterial drugs, drugs for central nervous system(CNS) disorders, generic drugs, and vaccines. It also
promotes the veterinary drugs business.

year on year

UP 4.8%

Pharmaceutical
Segment

JPY

75.4

year on year

Food
Segment

28 %

81 %

10.0

%

year on year

Food
Segment

7.9

year on year

% UP

1.6

pt

Pharmaceutical
Segment

26.1

year on year

% UP

4.6

pt

bn

DOWN 18.8%

The Meiji Group believes that addressing social issues actively through businesses will lead to sustainable growth. In the2023 Medium-Term Business Plan, we set the Meiji ROESG as our top management goal. We are aiming to realize bothprofit growth and sustainability activities. These efforts have been received positively by third-party evaluation
organizations. As a result, we have been included in ESG indexes in Japan and overseas.
Page 20 Overview of 2023 Medium-Term Business Plan and Meiji ROESG
Page 40 Sustainability Strategy

Pharmaceutical
Segment

19 %ROE

Overseas Sales Ratio (FY2022)

peopleExternal Evaluation of ESG

Operating Profitbn

25 companies
4,794 people

17,290Results for FY2022 (Fiscal Year Ended March 2023)
Net Sales

4 companies
315 people

Asia / Oceania

The Number of the Group Employees

KM Biologics Co., Ltd.

This segment provides our customers of all ages
from infants to the elderly, with a wide variety of
products that include infant formula, milk and dairy
products, confectioneries, sports nutrition products
and enteral formula.

EuropeDOWN 3.5pt

Food
Segment

72 %Profit Per Share*

JPY

247.39year on year

DOWN 18.5%* The following stock splits are reflected in the calculation of the previous year’s values:
A two-for-one common stock split issued on April 1, 2023

06 Meiji Holdings Co., Ltd.｜Integrated Report 2023

THE INCLUSION OF Meiji Holdings Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTEA SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Meiji Holdings Co., Ltd. BY MSCI OR
ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI.
MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF
MSCI OR ITS AFFILIATES.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 07

About the Meiji Group

Yogurt

The infant
formula Patrogen

2007

2019

Meiji Hohoemi
Raku Raku Cube

Meiji Hohoemi
Raku Raku Milk

AL
OB

Infant Formula
No. 1

41.5%

Source: INTAGE SRI+,
April 2022-March 2023

Sold in Asia
and Europe

Drinking Milk
Since its launch in 1928, Meiji Milk had nutritiously supported people’s health for nearly a century.
In 2002, it evolved into Meiji Oishii Gyunyu, which has achieved freshness and deliciousness using
the unique Natural Taste Process. Since 2013, we have sold chilled milk in China, offeringhigh-quality milk globally.

Meiji Milk

Meiji Bulgaria
Yogurt2002

Meiji Oishii Gyunyu

No. 1

Source: INTAGE SRI+,
April 2022-March 2023

2022

Meiji Probio
Yogurt LG21

Meiji Shibo
Taisaku Yogurt

2009

AL
OB

Meiji Probio
Yogurt R-1

Starting with the launch of Meiji Milk Chocolate in 1926, we have developed unique products thatmake people smile. In the meantime, we have also drawn out the nutritional value of chocolate
as we developed a product focusing on the health value of cocoa in 1998.

1926

No. 1

Meiji The Chocolate

1975 Kinoko no Yama

No. 1

2022

Based on Meiji data as of 2022

SAVAS Protein Bar

2023(Chocorooms)
1979 Takenoko no
Sato (Chococorns)

Chocolate Kouka Plus
(food with functional claims)

2023

1998

Cacaful,Cacawell

Chocolate Kouka

GL

AL
OB

Sold in Asia,
including China

2023

2015

ꞵ-lactamase inhibitor combination antibiotic
preparation SULBACILLIN for Injection

Systemic
Antibacterial Drugs
No. 1

21.5%

Copyright © 2023 IQVIA.
Source: Calculated based on
JPM 2023 Mar MAT Market scope as
defined by Meiji Seika Pharma* Reprinted with permission

2015

ꞵ-lactamase inhibitor combination antibiotic preparation
TAZOPIPE Combination for I.V. Infusion “MEIJI”

Antibiotic MEIACT

VaccineWe began a full-scale enteral formula business in 1986 and launched Mei Balance in 1995. Since
then, the product has been supporting patients as well as medical and nursing care professionals.
In 2022, we obtained permission to label the product as a comprehensive nutrition food product.
Also we launched Meiji Mei Balance MICHITAS Cup. In 2016, we expanded into the Taiwanese market.

08 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Started manufacturing
Penicillin

Sold in Europe,
the U.S., Asia, andthe Middle East

(FY2022)

2006

1994

Enteral Formula

Mei Balance

1946

AL
OB

Share in the Japanese market

Antibiotic

SAVAS Advanced
Whey Protein 100

SAVAS Milk
Grapefruit Flavor

1995

Continuing to Protect People fromthe Threat of Infectious Disease
We started to produce Penicillin in 1946. Since then, we have been stably providing a variety ofantibiotics, including MEIACT, which is now available in more than 20 countries and regions.

SAVAS MILK PROTEIN
Yogurt Zero Fat

1980 SAVAS series

31.9%

25.2%

Source: INTAGE SRI+,
April 2022-March 2023

Protein

Powdered &Granulated Protein

Sold in Asia,
including China

Chocolate2014

Meiji Milk Chocolate

17.8%

Sold in Asia,
including China

In 1980, the SAVAS series was developed based on sports nutrition for athletes. The user base waslater expanded to include women and various people who like exercise with the diversification of
products lines, such as soy protein products and drinks. Since 2020, we have also been selling
powdered-type protein in China.

37.7%

Chocolate

Source: INTAGE SRI+,
April 2022-March 2023

AL
OB

No. 1

2000

New method“Kuchidoke
Hojun
Fermentation”

Permitted to label as
Food for SpecifiedHealth Uses (FOSHU)

YogurtFunctional yogurt

2023

1996

Drinking Milk

GL

1928

New method“Maroyaka
TannenFermentation”(FY2022)

GL

1923

2014

1973

Share in the Japanese market

In 1923, we launched Japan’s first infant formula containing oryzanin (vitamin B1). Since then, we
have continuously worked on the development and improvement of our products. We launched theworld’s first cube-type infant formula in 2007 and a liquid milk formula in 2019. We are also
expanding business into Asia and Europe in partnership with Danone.

(FY2022)

In 1950, we began full-scale production of yogurt, developing a plain yogurt market in Japan. In
2000, we started selling functional yogurt that contributes to solving health issues with the effectsof lactobacilli, further creating a new market. Functional yogurt is available even in China,
starting in 2021.

Responding to Each Era’s Issues and Increased Interest in Nutrition
Infant Formula

Share in the Japanese market

GL

The Meiji Group has passed on the spirit of “contributing to the country through nutrition” for over 100 years since
its founding. Based on this spirit, we have created Meiji unique value for wellness and acquired large market sharesin product lines targeted at customers across all generations. Going forward, we will deliver our products not only
to customers in Japan but also people across the globe to achieve sustainable growth.

Delivering Unprecedented New Products for WellnessGL

A Hundred Year History of Creating Meiji Unique Value for Wellness2022

Permitted to label ascomprehensive
nutrition food product2022

Meiji Mei Balance
MICHITAS CupEnteral Formula(sold on the market)
No. 1

85.0%

Source: INTAGE SRI+,
April 2022-March 2023

We have contributed to enhancing Japan’s public health over roughly half a century through thedevelopment and provision of vaccines. In addition to inactivated vaccines, which has a long
history of use in Japan, we have acquired mRNA vaccine technology and now aim for the earlylaunch of COVID-19 vaccines.

1972

Influenza
HA Vaccine

1988

Hepatitis B
vaccine
Bimmugen

2011

Japanese
encephalitis
vaccine ENCEVAC

2012

4-in-1 combination
vaccine Quattrovac

Influenza Vaccine
No.1

29.0%

Copyright © 2023 IQVIA.
Source: Calculated based on
JPM 2023 Mar MAT Market scope
as defined by Meiji Seika Pharma* Reprinted with permission

Meiji Holdings Co., Ltd.｜Integrated Report 2023 09

About the Meiji GroupA Hundred Year History of Creating Meiji Unique Value for Wellness

Value Creation in the Next Era

YogurtValue Creation in the Next Era

Further Expanding the Yogurt Market by Pursuing Uniqueness
Yogurt is typical of foods that are both delicious and healthy. In Japan, yogurt
consumption per person has been increasing year by year, and yogurt has
become an indispensable part of the diet of Japanese people. It is Meiji Bulgaria
Yogurt that has driven this trend. We will continue to strengthen ourcompetitiveness and take a strong lead in the yogurt market. We will do this by
not only selecting lactobacilli, but also through unceasing efforts to pursue
uniqueness. We are researching their health benefits, driving innovations infermentation and manufacturing technologies and seeking new value from theperspective of kansei (affective) engineering.

Strength: Researching
the Health Benefits of Lactobacilli

Enhancing the Health Value of
Products by Scientifically
Proving New Functions
Meiji owns more than 6,500 strains oflactobacilli and has been studying theirimpact on human health for many years. We
have been developing novel lactobacilli
strains that provide innovative health value
for consumers. Furthermore, we have beenfinding new value of existing products andstrains. For example, our studies havesuggested that the LB81 may strengthen theintestinal barrier function that prevents
pathogenic bacteria and harmful
substances from entering the body.

Annual consumption of
fermented milk per person (L) 9.97 10.23
2.72

3.80

5.09

7.42
6.55 7.15

1985 1990 1995 2000 2005 2010 2015 2020
Source: the Japan Dairy Association

Strength: Pursuing Fermentation and Manufacturing Technologies

Enhancing Taste and Texture While
Maintaining the Effects of Lactobacilli
We are also focusing on developing technologies to make yogurt
even more delicious. Meiji Bulgaria Yogurt was renewed for the
first time in about 10 years in March 2023. We have developed
Kuchidoke Hojun Fermentation by combining ultra-hightemperature pasteurization and fat micronization with theconventional technology Maroyaka Tannen Fermentation(Low-Temperature, Reduced Oxygen Fermentation), which
achieves both shortened fermentation time and good curd
structure. The new manufacturing method achieves a goodmouthfeel and a mellow taste with a milkiness that spreads
through your mouth in a refreshing way.
Page 63 Creating Innovation >Extending the Product Life Cycle

The spread of COVID-19 exploded from the beginning of 2020, causing
chaos in society. Since May 2023, it has been classified as a Class 5
infectious disease under the Infectious Diseases Act* in Japan. However,this does not mean that it has been brought under control. Rather, itmeans that we have shifted to a world in which we have to cope with thedisease. In the future, regular vaccination against COVID-19 may be
implemented, like flu vaccination. Therefore, it is important to increase
effective vaccine options and realize stable supply through domestic
production. As a leading company in the infectious disease area, theMeiji Group will assume the responsibility and promote the development
and supply of vaccines in collaboration with governments, academia,
and partner companies, thereby contributing to society.

Bases of the Meiji Group
ARCALIS, Inc.
Meiji Seika Pharma Co., Ltd.
[Fukushima]
Under construction

KM Biologics Co., Ltd.
[Kumamoto]

TOPICS: Self-Amplifying mRNA Vaccine ARCT-154

Commercializing an Epoch-Making Vaccine that Offers a Long-Lasting Effect with a Small Dose
Meiji Bulgaria
Yogurt LB81 Plain,a Food for SpecifiedHealth Uses

Focusing on the Value Transformation and Expansion Function of Plain Yogurt

10 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Increasing Vaccine Options and Realizing Stable
Supply through Domestic Production
Vaccine Production* The Act on the Prevention of Infectious Diseases and Medical Care forPatients with Infectious Diseases

Strength: Enhancing Value from New Perspectives

We paid attention to the fact that customers added other ingredients when they were eating plain
yogurt. This made us aware that plain yogurt has the function of value transformation and expansion, in
addition to its three eating functions of nutrition, taste, and biological regulation. It is a unique functionthat allows customers themselves to customize the three functions of eating freely by adding ingredientsrich in nutrition or with health functions and adjusting sour taste or sweetness. (See the table below.)
We are now focusing on research aimed at utilizing this function of value transformation andexpansion to create new value. For example, customers can design Meiji Bulgaria Yogurt in a way thatsuits their feelings or use it as a parent-child communication tool. In other words, by delivering apleasing experience along with the product, we can contribute to the well-being of our customers. As thewords “Genuine Yogurt” shown in its package suggests, Meiji Bulgaria Yogurt has delivered the authentic
taste and natural benefits developed in Bulgaria, the birthplace of yogurt, as they are and havesupported the health of Japanese customers at all times. There must be some reason for the productbeing loved for such a long time, aside
Second function of
from the health benefits of lactobacilli andFirst function of nutrition
taste and sense
fermentation and manufacturing
technologies. Assuming that one possible
Adjust sour taste and
Add nutritious materials
sweetnessreason lies in its distinctive taste that is
Banana, prune
typically described as a refreshing sour
Honey, jamtaste, we are advancing research on themental and physical effects of the
Add materials with
distinctive taste. We aim to cultivate theCustomize threehealth function
attractiveness of plain yogurt that has yet
eating functions
Oligosaccharide, olive oil
to be identified and acquire sustainable
competitiveness as a product always
Function of value
Third function ofchosen by customers.
transformation and expansion
biological regulation

COVID-19 Vaccine

We are advancing the domestic development and production of
ARCT-154, a self-amplifying mRNA vaccine using next-generation
mRNA technology. ARCT-154 is a vaccine developed by Arcturus
Therapeutics, Inc., a U.S.-based bio firm. It is expected to provide aneffect that exceeds six months even with a small dose. The Meiji Groupwill be responsible for obtaining regulatory approval, distribution, saleand marketing of the vaccine in Japan under the collaboration system
as described in the chart on the right. We already submitted a New Drug
Application for primary immunization to prevent COVID-19 in adults in
April 2023 and an additional application for a booster dose in adults inJune 2023. If approved, ARCT-154 will become the first replicon vaccine
coming into practical use in Japan ahead of Europe and the UnitedStates. We are collaborating with ARCALIS, Inc. to produce the vaccine
and establish integrated mRNA vaccine manufacturing capabilities fromdrug substances to drug products. ARCALIS is building a manufacturing
facility in Minami-soma City, Fukushima Prefecture.

Collaboration System for ARCT-154
Meiji Seika PharmaCo., Ltd.

Dual-use facility
development
project *1(Manufacturing and sale)Contract

CSL Seqirus*2/
Arcturus
Therapeutics

Collaboration

ARCALIS, Inc.*3[CDMO](Manufacturing ofdrug substancesand drug products)*1 The Project of Developing Biopharmaceutical Manufacturing Sites to Strengthen Vaccine Production*2 CSL Seqirus, a subsidiary of CSL Limited, is one of the world’s largest suppliers of influenza vaccines. The company has state-of-the-art manufacturing facilities
in the U.S., U.K., and Australia, and leading R&D capabilities.
*3 ARCALIS, Inc. is a joint venture company between Axcelead Inc. and Arcturus Therapeutics, Inc., which owns a group of world-class drug-discovery andhealthcare platform companies. The company provides drug discovery support, as well as a contract development and manufacturing business (CDMO
business), for mRNA medicines and vaccines.

TOPICS: Inactivated Vaccine KD-414

Yoshio Toyama
General Manager,
Physical Properties &Kansei Research Department,
Food Science & Technology
Research Laboratories,
R&D Division,
Meiji Co., Ltd.

Developing Inactivated Vaccine Safe to Be Used Even in Children
KD-414 is an inactivated vaccine with a long track record of being used as an influenza vaccine
and as part of routine vaccination for children. Mostly recently, we initiated a domestic Phase III
pediatric clinical trial in children aged 6 months to below 12 years in January 2023. We are also
preparing to initiate a clinical trial of a vaccine for COVID-19 variants in children aged 12 years
and below by the end of FY2023. Work to build a production system for the vaccine is also
proceeding steadily. Using the grants received from the Ministry of Health, Labour and Welfare
and the Japan Agency for Medical Research and Development (AMED), we are currently building
facilities and equipment necessary for the manufacturing and purification of drug substances,
as well as quality testing.

FC Building, a drug substancemanufacturing facility, at KM Biologics
Co., Ltd.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 11

Message from the Management

Message from CEO

Evolving Meiji ROESG ®
Management and Achieving
Sustainable Growth by
Providing Meiji Unique ValueA Year of Challenging Management Due toDrastic Changes in the External Environment

Kazuo KawamuraCEO
President andRepresentative Director

The Meiji Group faced drastic changes in the external
environment in FY2022, a year that demanded carefulleadership in a challenging environment. One of thesechanges was a change in lifestyle due to the prolonged
pandemic, which had a particularly negative impact on the
Pharmaceutical segment. The other change was instability
in the global supply chain, which had a particularly
negative impact on the Food segment. Raw material andenergy costs soared, and although we made determinedefforts to pass on the higher costs, we were unable toensure profitability. The prolonged depreciation of the yen
is also a cause for concern. It may case difficulties in thesustainability of the domestic dairy industry, which is
supported by imported feedstuffs from overseas.
Unfortunately, our business performance in FY2022
was not strong. We did not achieve our operating profit
target. In FY2023, we will finish overcoming rising costs in
the Food segment as soon as possible and recoverearnings under our new pricing structure. We introduced
Meiji ROESG* as a management indicator starting in our2023 Medium-Term Business Plan to realize both profit
growth and sustainability activities. We are making good
progress in spreading the strategy for future growththroughout the Group. In addition, we are improving ourstructure to increase profitability by utilizing ROIC.
Conducting business activities using ROIC as adecision-making criterion is a necessary initiative for
future growth. We will continue to thoroughly prepare to
return to a growth path in FY2024 and beyond.
* ROESG is a registered trademark for a management indicator developed byKunio Ito, a professor at Hitotsubashi University.

12 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 13

Message from the Management

Message from CEO

Aiming for Further Growth byReaffirming Our Mission andReason of Existence

Restoring the Growth Potential of the Food andPharmaceutical Segments as a Must-Achieve Goal in
the 2026 Medium-Term Business Plan
Promoting the Growth of the Core Food Business, Overseas Expansion and Brand
Investment

The Meiji Group’s Mission: Providing a Stable Supply of Critical Commodities andContributing to HealthWith the changes in the external environment, we have reaffirmed our social mission and reason ofexistence. I strongly believe that our mission is, first and foremost, to provide a stable supply of criticalcommodities. In the Food segment, we handle a variety of products such as infant formula and enteral
formula that support the health of infants, children, and the elderly. In the Pharmaceutical segment, we
provide essential drugs such as antibacterial drugs that are indispensable in the medical field. These are
all product lines in which the Meiji Group has a high market share.
Our other mission is to contribute to solving social issues through our nutritional food products andpharmaceuticals. The Meiji Group handles products such as drinking milk and yogurt that are directly
related to the health issues of all generations. We play a role in supporting domestic dairy farming
through the manufacturing of those products. In addition, the Meiji Group is one of the few manufacturersof vaccines and antibacterial drugs in Japan that contribute to the prevention and treatment of infectious
diseases. We respond to the nation’s health challenges by providing a stable supply of necessary
pharmaceuticals. We will expand our business so that the Meiji Group’s mission will be widely recognized
not only in Japan but also globally.

Integrating Sustainability and Business to Improve Corporate Value
We will thoroughly address key issues for future growth based on our reaffirmed mission. First, we willfurther evolve the Meiji ROESG. The Meiji ROESG has contributed to raising director and employee
awareness of sustainability to improve corporate value in non-financial areas. However, we must realize
even higher levels in the future. Our goal should be to integrate sustainability and business.
For example, we will address the social issue of food loss by reducing product waste through upcycling
and extending expiration dates. We will also strive to improve business efficiency by pursuing waste-free
production. If profitability improves as a result of these efforts, we will be able to give back to the dairy
and cocoa farmers who provide us with raw materials. It would allow us to enhance our efforts in the
agriculture and dairy industries to help reduce greenhouse gas emissions and address human rights
issues. We will improve corporate value by not only addressing social issues, but also by taking on thechallenge of creating new businesses based on a platform of sustainability.
Page 40

Sustainability Strategy

The next key issue is to restore business growth potential. There were certainly external factors such as asignificant increase in raw material prices and energy costs. However, we must reflect heavily on the factthat there was a delay in the recovery of the growth potential set forth in our 2023 Medium-Term Business
Plan. We will carry out the 2026 Medium-Term Business Plan with the restoration of our business growthpotential as a must-achieve goal.
First, in the Food segment, we will build a structure in which all the three core businesses of yogurt,
chocolate, and nutrition can grow, rather than just a specific one. Therefore, we will increase the speed ofour global expansion and firmly capture overseas markets to enhance our growth potential. We will also
lead the market expansion by strengthening the functionality expected of food products and promoting
their contributions to nutrition.
Furthermore, we will make sufficient investments to strengthen the brand power of individual
products. At the same time, we will carefully examine brand evaluation resulting from investments.
Cultivating brands requires investment from a medium-term perspective that is not dependent on
immediate performance. This is similar to investments in R&D and production. The Meiji Group has built
up quality brand assets. However, we cannot maintain them without continued investment. I believe that
increasing the value of our intangible assets, namely our brands, will also lead to business performance
improvement.
Page 32

Accelerating Growth with Global Vaccine Strategy and New Drug Launches
The Pharmaceutical segment has made significant progress with structural reforms. We havestrengthened our financial position and are moving into a growth stage. The infectious disease area isneeded by society, and it is a field in which we have an advantage. We will continue our efforts to expand
this business and secure stable earnings.
Another promising initiative is the vaccine business. We will promote measures that contribute to bothsociety and business growth as part of our global vaccine strategy. The key products will be vaccines for
COVID-19 and dengue fever, which are currently under development, as well as existing influenza vaccines.
We will apply our advanced production technology to spread these vaccines to overseas markets.
In addition, the development of new formulations in the pipeline is progressing. We expect to launchthese products in the U.S. and Europe during the 2026 Medium-Term Business Plan. We believe that thesuccess of our formulations developed in-house will help enhance the Group’s overall business growth
momentum.
Page 36

14 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Food Segment Business Strategies

Pharmaceutical Segment Business Strategies

Meiji Holdings Co., Ltd.｜Integrated Report 2023 15

Message from the Management

Message from CEO

Reinforcing Business Management through ROIC andHuman Capital Management Reform are Also
Essential Themes

Stepping toward the Future with a New Growth Strategy
by Pursuing Group Synergy

Increasing Effectiveness by Building a System that Directly Links ROIC to
Management

Further Strengthening R&D Structure through Meiji’s Unique Co-Creation

ROIC utilization is a priority issue in the 2023 Medium-Term Business Plan. It is important to establish
ROIC as the Group’s management style. We will enhance the use of ROIC as a top-priority management
indicator in our business performance for the 2026 Medium-Term Business Plan. In FY2024, we will review
the business units measured by ROIC, and assign an officer in charge of ROIC improvement to eachbusiness unit. We will then strengthen progress management to ensure that results are achieved.
We will also use ROIC for portfolio management to ensure that investments are linked to profits. It will
result in improving and maintaining ROIC at a high level. First, we will use ROIC in prioritizing investments
to build a more effective strategy. Including M&A, we will verify which businesses to select and what tofocus on as a Group at the investment stage. Then, we will enhance investment monitoring and takecorrective measures as soon as possible after the investment is made.

Achieving Human Capital Management that Emphasizes External Competitivenessand Diversity
We are reforming our human capital management. The keywords of this reform are external
competitiveness and diversity.
We must realize diversity and inclusion in our core human capital*, including those at thedecision-making level, to promote the success of our diverse human capital. In particular, we aim toincrease the number of women, experienced personnel from outside the Group, and personnel capable ofworking globally in our core human capital. This will allow us to further strengthen our external
competitiveness. We are also working to identify and develop managers who drive the Group forward thatcan support management. Currently, we are operating a succession planning for the presidents of thethree Group companies. We have begun operating a development program for executive officers andmanagers in equivalent positions to select candidates to succeed these three presidents. This program is
an extremely important mechanism for enhancing the effectiveness of our succession planning andpooling managers who drive the Meiji Group forward. It is operated with the strong involvement of myself
as CEO.
A CHRO was newly established in the Chief Officer system, a Group-wide function, in FY2022. The
system has been shifted to a structure led by Meiji Holdings to strongly promote human capitalmanagement reforms. I expect that this will promote both personnel exchange within the Group and theintegration of personnel systems, as well as accelerate the creation of Groupwide synergies.

It has now been re-launched as the Wellness Science Labs and will function as a hub for promoting open
innovation with research institutions in Japan and overseas. Its research themes continue to beanti-aging, immune fortification, and microbiome. Researchers are working across categories to create
new health value from both food and pharmaceutical perspectives. I believe that it is the most uniquefeature of the Meiji Group. We will constantly attract the attention of excellent external research
institutions, and make the Wellness Science Labs a place that continuously generates co-creation.
We have enhanced our group governance structure by introducing a Chief Officer system andestablishing a Group Strategy Council. We are shifting to advanced management with Meiji ROESG as its
new individuality, and pursuing unity as a Group. We will formulate the 2026 Medium-Term Business Plan
with Group strategy as the top priority. In addition, we must improve the effectiveness of the Board of
Directors to enhance the transparency and credibility of governance. Therefore, we will strengthen Group
governance by increasing the involvement of Outside Directors, who possess a wealth of knowledge, inthe development of medium- and long-term strategies.

Preparing to be Weeded Out if Corporate Value isn’t Created
The 2026 Medium-Term Business Plan is intended to be the starting point for a new growth strategy for
the Meiji Group. Preparations for this next leap forward are well underway in the 2023 Medium-TermBusiness Plan. Specifically, we are investing in overseas markets, reorganizing categories in Japan, anddeveloping products and production systems in theinfectious disease area.
Business growth from the management integration to theearly 2010s was certainly skewed toward rapid growth ofcertain products. We aim to achieve growth in our core foodbusiness in total under the 2026 Medium-Term Business Plan.
At the same time, we strive to realize steady growth in which
both the Food and Pharmaceutical segments contribute.
Then, we will aim for more sustainable growth by further
stimulating our strengths with the Meiji ROESG management.
As CEO, responsible for management, I am also determined
to take on these challenges.

* Core human capital: Directors, managers, and career track employees

Page 52

Human Capital Strategy

16 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 17

Message from the Management

Message from CFO

Further Strengthening Business Management with ROIC:
Achieving the Meiji ROESG and Supporting Global GrowthPursuing Profitability to Compete Globally by Using ROIC and Adopting IFRS
Further Strengthening Business Management with the Meiji Group’s ROIC

Maintaining a Strong Financial Structure
in a Severe Business Environment
Spreading the Concept of Business
Management using ROIC throughout the Group

Koichiro Shiozaki
CFO
Member of the Board andSenior Managing Executive Officer

We have set Meiji ROESG as the top management indicator inour 2023 Medium-Term Business Plan to enhance corporate
value by simultaneously pursuing ROE and ESG. We haveintroduced Return on Invested Capital (ROIC) as an indicator
for improving ROE. Through this approach, we strive forbusiness performance that emphasizes investment
efficiency.
We were unable to keep up with unexpected cost
increases in raw materials in FY2022, the second year of our2023 Medium-Term Business Plan. Our profitability declined
and ROE fell short of our target. Under these circumstances,
we thoroughly reduced fixed costs and selected investmentsfrom the ROIC perspective in the Food segment. In the
Pharmaceutical segment, we continued to implement
structural reforms following FY2021 with strong
determination. As a result, we made progress in building astable earnings base. In addition, we reduced ourcross-shareholdings and fixed assets. This allowed the MeijiGroup to maintain a strong financial position.
The Meiji Group is oriented toward further growththrough aggressive investment, although it is challenging toachieve desired investment effects amid the rapid changes inthe business environment. Therefore, we have introduced
ROIC as an indicator, which has helped each business unit
understand the concept of investment efficiency. As a result,it has become easier to advance discussions on “what weshould do to improve profitability” by aligning ourperspectives with each other. We see this improved
awareness as one of the results of our efforts in FY2022.
ESG is a key indicator of the Meiji ROESG, together with
ROE. ESG is an essential initiative for improving corporate
value over the long term. We have set a target of JPY 30
billion for ESG investments in the 2023 Medium-TermBusiness Plan. At the same time, we issued sustainability
bonds through a public offering. We are continuing tosteadily implement investments that help solve social issues.

We will improve our operational methods in line with our own management and business in order to further increase
the effectiveness of our business management using ROIC. For example, we will review business units managed by
ROIC to make it easier to check investment efficiency and clarify the person responsible for each business unit. This
will speed up our decision-making process. We will also change to the more simplified calculating method of ROIC foreach business unit, targeting elements that each business unit can control independently, such as fixed assets. By
doing so, we can go through the PDCA cycle quickly. We will consider withdrawing from or transferring businesses
that are below the Weighted Average Cost of Capital (WACC). After reshaping our business portfolio according to ROIC,
we will make necessary investments. The Debt-to-Equity Ratio (DE ratio) is currently 0.1 or below. However, we
recognize that it should be higher than this in order to aggressively pursue investments for growth.
Another future challenge is to make management using ROIC take root at business sites and quickly establish ourown ROIC management. Based on the ROIC tree, the first step is for business managers to understand the scope of
their responsibilities. The managers can promote improvements and reforms based on their understanding. Then, we
will link this to growth after the 2026 Medium-Term Business Plan.

Building a Business Management System that can be Centrally Managed on a Global Basis
What we should do for growth for the future is to establish a global business management system. Our overseas sales
ratio exceeded 10% for the first time in FY2022. We expect to further expand our overseas business in the 2026
Medium-Term Business Plan. We are steadily preparing for the introduction of IFRS as a foundation to support thisexpansion. To achieve this, we are developing human capital capable of promoting global accounting and actively
appointing people from outside the Meiji Group. I also see the unification of accounting systems following global
standards in both the Food and Pharmaceutical segments as a challenge.
Through this process, we will build a centralized business management system that includes overseas sites. Then,based on this system, we will realize our global expansion and strengthen corporate governance. We will also actively
invest in fields with particularly strong growth potential by optimally allocating capital on a global basis. This includes
the use of M&A. I recognize this theme as something I must accomplish as CFO in order for the Meiji Group to develop
as a truly global company.

Shifting to a Return Policy Emphasizing Total Return Ratio
We increased dividends for the ninth consecutive fiscal year in FY2022. We plan to increase dividends for FY2023 as
well. We also bought back shares of approximately JPY 10 billion in FY2022, following on from FY2021. We intend to
shift to a policy emphasizing total return ratio from the 2026 Medium-Term Business Plan. We will return the supportof our shareholders through both dividends and our total return ratio.
As CFO, I will continue to pursue management to allow the Meiji Group to sustainably increase its corporate value.
Page 21 Overview of 2023 Medium-Term Business Plan and Meiji ROESG >Overview of 2023 Medium-Term Business Plan

Page 22 Overview of 2023 Medium-Term Business Plan and Meiji ROESG >2022 Business Performance Summary

Sustainable Finance

18 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 19

Message from the Management

Overview of 2023 Medium-Term Business Plan and Meiji ROESG

Promote the Meiji ROESG® Management Effectively
Realize both profit growth and sustainability activities

Importance to stakeholders

The 2023 Medium-Term Business Plan is based on the concept of promoting the Meiji ROESG Management
effectively. In formulating the Plan, the Meiji Group decided on its direction that contributes to helping solve social
issues globally. This way, we will realize theImportance to businessmateriality for stakeholders and the Group at thesame time. This is the guiding principle of ourmanagement strategies. According to this direction,
Importance
Incorporated into
we formulate and implement business strategy,
to businessbusiness strategy,
financial strategy,
financial strategy, and sustainability strategy.
and sustainability
We introduced the Meiji ROESG as thestrategy for the2023 Medium-Termmanagement indicator with the highest priority.
Business Plan
The Meiji ROESG consists of three components:
ROE, which represents earning power; the degree of
See page 21 for key issues
achievement of ESG goals; and indicators unique toImportance toin the 2023 Medium-Term
Meiji (see the figure below). We aim to grow profits,
Business Plan
the Meiji Group
improve ESG indicators, and achieve sustainability
See page 41 for materiality
related to social issues
goals.

Meiji ROESG* ROESG is a registered trademark for a management indicator
developed by Kunio Ito, a professor at Hitotsubashi University.

• MSCI ESG Ratings
ESG ratings calculated by MSCI, a financial service firm in the U.S.,
based on information disclosed by companies• DJSIAn ESG investment index developed by U.S.-based S&P Dow Jones
Indices and RobecoSAM, a Swiss investment advisory company• FTSE4Good
An ESG investment index announced by FTSE International,
a subsidiary of the London Stock Exchange

We also emphasize our commitment to coexisting with nature.
Therefore, we selected CDP scores, which use of a variety ofenvironmental stewardship progress indices.
• CDP (Climate Change), CDP (Water Security)
An information disclosure program provided by CDP, an international
non-profit organization headquartered in the U.K., regarding
environmental activities conducted by major global companies

We aim to enhance corporate value by
simultaneously growing profits andconducting sustainability activities.
Therefore, we selected the following fiveitems that are highly relevant to thefocused business areas in the 2023
Medium-Term Business Plan.
• Extend healthy life expectancy• Amount of protein intake• Vaccination rate for influenza vaccines• Sales growth rate for health-conscious
products, nutritional products with added
value, products for a super-aged society• Success in and supply of vaccine andtherapeutic agent for COVID-19

We selected the employee engagementscore based on the idea that humancapital is the driving force behind bothbusiness and ESG activities.
• Employee engagement score

Pharmaceutical
Segment

1) Integrate operations management of Meiji Seika Pharmaand KM Biologics (Strengthen vaccine business)
2) Expand CMO/CDMOPage 36

Venture into new domains

Pages 10, 11, 60

3. Invest to grow business while constructing strong financial base

Page 18

4. Promote the Meiji Group Sustainability 2026 Vision steadily

Pages 40, 44, 90

Progress of KPIs
FY2021

FY2022

FY2023 Plan

FY2023 Target

9 points

12.3 points

13.8 points

13 points

13 points

Consolidated net sales

JPY 1,007.1 bn

Consolidated
operating profit (margin)

JPY 106.0 bn

JPY 1,013.0 bn

JPY 1,062.1 bn

JPY 1,102.0 bn

JPY 1,080.0 bn

JPY 92.9 bn

JPY 75.4 bn

JPY 78.0 bn

JPY 120.0 bn−

JPY 92.9 bn

JPY 120.0 bn

JPY 143.0 bn

JPY 134.5 bn

ROIC

10.0%

8.4%

6.3%

6.5%

10% or more

ROE

11.1%

13.5%

10.0%

7.0%

11% or more

Payout ratio

35.4%

28.0%

36.4%

52.3%

40.0%

Indicators

Growth andProfitability

The Meiji Group is oriented toward growth in the global
marketplace. Therefore, we selected the following threeinternational evaluation indicators.

Page 32

Page 18

Add 1 pt foreach indicator achieved

Indicators Unique to Meiji

1) Recover from the stagnation in our core business
2) Expand overseas business

2. Improve business management system using ROIC effectively

Establish the coefficientaccording to the numberof achieved goals
Achieve 5: x1.2
Achieve 4: x1.0
Achieve <4: x0.8

Food Segment

Group-wide

Integrated
goal

ESG Indicators

20 Meiji Holdings Co., Ltd.｜Integrated Report 2023

1. Business
Strategy

Indicators
unique to Meiji(Points will be added only
in FY2023)

Medium-Term Business Plan

Key Issues

Achieve
ESG goals

ROE
3-year average value

Overview of

FY2020Meiji ROESG

Overseas net sales*2

Efficiency and
SafetyReturn toshareholders(10.5%*1)(9.2%)(7.1%)(11.1%)(7.1%)*1 Reference figures, calculated after applying revenue recognition standards for FY2020 net sales*2 From FY2021, we have changed the business categories that serve as the basis for calculating overseas net sales.
We have not disclosed the figure for FY2020 calculated after retroactively applying the category changes.

Capital Expenditures and Returns to Shareholders
Cash flows from operating activities
2023 Medium-Term Business Plan (projected)

JPY

272.5 bn

FY2021-2022 Result
JPY 212.5 bn

FY2023 Plan
JPY 60.0 bn

Sale of assets
2023 Medium-Term Business Plan (projected)

approx. JPY

100.0 bn

Reduce cross-shareholding stocks by
30% by the end of FY2023(compare to book value in FY2020)
Transfer of business and asset sales etc.
FY2021-2022 Result• Agricultural chemicals business• DM Bio Limited• Noncurrent assets of pharmaceuticalresearch laboratory, etc.

Capital Expenditures
FY2021-2022
ResultFY2023Plan

JPY 165.3 bn

JPY 62.8 bn

2023 Medium-TermBusiness Plan
(projected)

2023 Medium-TermBusiness Plan
(original)

JPY 228.2 bn

JPY 274.0 bn• Mainly invest in overseas business in FY2023• The projected investments are not expected to reach the amounts originallyplanned in the 2023 Medium-Term Business Plan. This is mainly because of
the Food segment. The construction period of some projects was delayed
and we revised the investment plan.

Return to Shareholders
FY2021 Result

FY2022 Result

FY2023 Plan

Annual dividend*

JPY 85

JPY 90JPY 95

Payout ratio

28.0%

36.4%

52.3%

JPY 30.0 bn

JPY 10.0 bn—

Share buy-back• Our policy is to raise the dividend payout ratio to 40%.
We steadily increase our dividend to increase return to shareholders.
* A two-for-one common stock split was issued on April 1, 2023.
These are retroactively applied figures.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 21

Message from the Management

Overview of 2023 Medium-Term Business Plan and Meiji ROESGESG Indicators

Business Performance Summary

In FY2022, we achieved our targets in all five evaluation indicators. Efforts in environment,
governance, occupational health and safety, and human capital led to improved evaluations.

Evaluation indicators

FY2020 Result

FY2021 Result

FY2022 Target

FY2022 Result

FY2023 Target

BB

BBB

BBB

A

A

2）DJSI *1

52 points

55 points

60 points

61 points

65 points

3）FTSE4Good *2

3.0 points

3.0 points

3.3 points

3.7 points

3.8 points4）CDP (Climate Change)

A-

A-

A-

A

A

5）CDP (Water Security)

A-

A

A

A

A

1) MSCI ESG Ratings

In FY2022, which is the second year of the 2023 Medium-Term Management Plan, we were affected by the impact of
the COVID-19 pandemic on the global economy and domestic consumption trends. We were also significantly
affected by soaring raw materials and energy costs due to the situation in Russia and Ukraine and the weakened
yen. Under such an environment, we worked on key issues* based on the concept of promoting the Meiji ROESGManagement effectively.
* See page 21 for key issues

Meiji ROESG

ROE, which is the base of Meiji ROESG, averaged 11.5% for the three-year period. We achieved
our targets for all ESG indicators, resulting in a coefficient of x1.2.

Meiji ROESG

ROE

11.5%

13.8 points

Achieve
ESG goals

Indicators
unique to Meiji

x1.2

Points will be added whentargets are achieved in
FY2023, so no single year
points will be added*1 Changed target for DJSI to “point.” “Point” is more suitable as target management because “percentile” fluctuate with other companies’ evaluations.
*2 Revised in accordance with the achievement in FY2022 of the original FY2023 target of 3.5 points.

1) Evaluations improved for three of the eight key issues—water stress, product carbon footprint, and corporate governance—compared to the previous fiscal year.

2) Scores increased for all three dimensions of the evaluation—governance & economic, environmental, and social— compared tothe previous fiscal year.

3) Fourteen ESG themes were evaluated. The five themes that received the highest score of five points were biodiversity, pollution& resources, water security, corporate governance, and tax transparency.

4) We were recognized for enriching our information disclosure based on TCFD, our roadmap to carbon neutrality by 2050,
acquisition of SBT certification, and membership in RE100.

Net Sales

Consolidated net sales were JPY 1,062.1 billion. Overseas net sales of the whole Group were JPY
120.0 billion, which is the first time that the overseas net sales ratio has exceeded 10%.

Food Segment

Pharmaceutical Segment

Net sales were JPY 865.6 billion. We raised prices on
products against rising costs of raw materials andenergy, and also conducted aggressive marketing
activities. Sales decreased in the Yogurt & Cheesebusiness due to the impact of various competingproducts that promote health value. However, this wasoffset by sales increase in the Nutrition business,
Chocolate & Gummy business and Overseas business.

Net sales were JPY 197.2 billion. Sales were driven by
the Domestic Ethical Pharmaceuticals business, where
sales of mainstay antibacterial drugs grew. Sales werealso driven by the Overseas Pharmaceuticals business,where subsidiaries in India and Spain performed well.
Sales in the Human Vaccines business decreased. Thiswas due to an increase in influenza vaccine returns andthe absence of contract revenue that was recorded in
the previous fiscal year.

Operating Profit

FY2021 Result
Due to increased/
decreased sales
Impact of NHI drug
price revisions
Changes in COGS
Changes in other
SG&A expenses
Other (incl. change inresults of subsidiaries)
FY2022 Result

Food

92.9
+20.4
-5.0
*1

-22.4
-5.5
-4.9

75.4

*2

Pharma Other

75.9

18.6

-1.7

+13.7

+6.7

—

—

-5.0

—

-22.7

+0.3

—

-9.9

+4.4

—

-1.1

-3.4

-0.4

55.8

21.7

-2.1

Indicators Unique to Meiji

We made progress on indicators 3 through 6 in FY2022. While progress was made on thedevelopment of COVID-19 vaccines in 6, the other challenges still remain.
As of FY2022

FY2023 Target

1) Extend healthy life expectancy+0.56 years+1 year2) Amount of protein intake

71.4 g/day*2

75 g/day

55.7％*3

60％

Deviation score B

Deviation score A-3.1%

10% or more

Under development

Development
and supply

Indicators*13) Vaccination rate for influenza vaccines5) Sales growth rate for health-conscious products, nutritional
products with added value, products for a super-aged society*4

Analysis of Operating Profit by Segment

Food Segment

Page 32

Pharmaceutical Segment

Page 36*1 Major factors[Food] Increase in raw materials cost: -23.2, Other: +0.5
[Pharma] Cost reductions: +0.3
*2 Major factors[Food] Increase in indirect manufacturing costs(incl. energy costs): -5.2,
Increase in marketing expenses: -3.3, Other: -1.4
[Pharma] Decrease in R&D expenses: +2.9
Decrease in marketing expenses(incl. impacts of structural reforms): +2.4, Other: -0.9

Profit Attributable to Owners of Parents and Financial Indicators
Consolidated profit attributable to owners of parent was JPY 69.4 billion. Profit decreased substantially mainly due
to the absence of gains resulting from the transfer of all shares of the Agricultural Chemicals Business recorded in
the previous fiscal year. ROE was 10.0%, and ROIC was 6.3%.
Meanwhile, we reduced cross-shareholdings steadily, and bought back and cancelled shares of approximately
JPY 10.0 billion. The equity ratio was 62.7%, further strengthening our financial position. Therefore, we increased
our annual dividend for the ninth consecutive year.
22 Meiji Holdings Co., Ltd.｜Integrated Report 2023

also evaluated for measures to address these risks including reduced water consumption, thorough wastewater quality
management, flood countermeasure implementation, and expanded water source recharge efforts.

4) Employee engagement score

Consolidated operating profit was JPY 75.4 billion. Major factors are as shown below.

Variance Analysis (JPY bn)5) We received evaluations for our information disclosure on water risks at our production sites in Japan and overseas. We were6) Success in and supply of vaccine and therapeutic agent for COVID-19*1 Compared to 2016 (men 72.14 years old/women 74.79 years old)
*3 FY2021 latest survey; based on people aged 65 or older receiving routine vaccinations*2 2019 latest survey*4 Compared to FY2020

3) The vaccination rate for FY2021, the latest result available, was 55.7%, down 9.9 percentage points from the previous fiscal year.
This decrease is likely a reaction to sharp growth in the previous fiscal year due to the spread of COVID-19 infections andincreased awareness of infection prevention.

4) The score was B, the same as FY2021. Employees appreciate our potential and contribution to society. However, they cited

collaboration between organizations and diverse workstyles as challenges due to changes in workstyles following the COVID-19
pandemic.
Page 54 Human Capital Management5) We recorded negative growth again in FY2022. Sales were significantly affected by a decline in sales of yogurt and functional
yogurt. This resulted from intensified competition and price hikes in the health food market.

6) We are developing KD-414, an inactivated vaccine against COVID-19, and ARCT-154, a self-amplifying mRNA vaccine. We aim tosupply them as soon as possible. We filed for manufacturing and marketing approval of ARCT-154 for initial immunization in
Japan on April 28, 2023. We also filed for additional immunization on June 30, 2023.
Page 11 Value Creation in the Next Era COVID-19 Vaccine
Meiji Holdings Co., Ltd.｜Integrated Report 2023 23

Message from the Management

Overview of 2023 Medium-Term Business Plan and Meiji ROESG

Overview ofStructural Reforms in the Pharmaceutical Segment

Plan

Towards a Lean Corporate Structure that Is Less Affected by
NHI Drug Price Revisions

During FY2023, we expect the resumption of consumer activities previously curtailed by COVID-19 will drive arecovery in consumer movement and provide an economic boost. However, we forecast earnings will continue to be
impacted by increasing prices for domestic raw milk, other raw materials, and energy costs. We have positioned FY2023
as a period of preparation for the next Medium-Term Business Plan. We will get ready for profit recovery and accelerated
growth by steadily working on the following points.
Page 21 Overview of 2023 Medium-Term Business Plan > Progress of KPIs

Initiatives of Focus• Penetrate price hikes

Change strategies in core business• Recover sales growth and secure stable revenue by pursuing added value• Start business restructuring to build a robust foundation for revenue

Invest management resourcesin future growth drivers• Expand overseas business and develop new vaccine• Accelerate development pipelines in the Pharmaceutical segment• Venture into new domains and collaborate with startups and venture companies

Accelerate to integrate sustainability
and business performance• Evolve Meiji ROESG further(Meiji Nutritional Profiling System, Global Vaccine Strategy)

Consolidated net sales are projected to be JPY 1,102.0 billion. We aim to increase sales in both
the Food and Pharmaceutical segments. We are also aiming for further growth, with overseas
net sales of the whole Group of JPY 143.0 billion (overseas net sales ratio of 13.0%).
Pharmaceutical Segment

Net sales are projected to increase 2.5% year on year to
JPY 887.0 billion. We will work to improve sales volume
by ensuring the price hikes implemented in theprevious fiscal year take root and strengthening
marketing. We aim to increase sales in our corebusinesses.

Net sales are projected to increase 9.2% year on year to
JPY 215.5 billion. Efforts are underway to launch theself-amplifying mRNA vaccine ARCT-154 in the Human
Vaccines business as a growth driver. We aim for thevaccine to contribute to business results by the end of
FY2023.

Consolidated operating profit is projected to be JPY 78.0 billion. Major factors are as shown below.

Variance Analysis (JPY bn)
FY2022 Result
Due to increased/
decreased sales
Impact of NHI
drug price revisions
Changes in COGS
Changes in other
SG&A expenses
Other (incl. change inresults of subsidiaries)
FY2023 Plan

ROIC in the Pharmaceutical
Segment

We have built new pillars of growth that are not affected by NHI drug price revisions throughM&A. We acquired Medreich Ltd. in 2015 to enter into the CMO/CDMO* business, and KM
Biologics in 2018 to enter into vaccine business. We are promoting structural reforms underthe 2023 Medium-Term Business Plan. Through these efforts, ROIC is expected to exceed its
initial target in FY2023. We have built an operating base that can stably earn operating profit
of around JPY 20 billion. We will accelerate growth going forward.

• Continue marketing investment

Food Segment

Operating Profit

Promoting Reforms Starting with ROIC and Building a Stable Earnings Base

(%)
8.0
6.1

6.6

Over 8.0(Plan)
Over 6.0(Initial target)* CMO: Contract Manufacturing Organization CDMO: Contract Development and Manufacturing Organization

Strategies to offset cost increase

Net Sales

The pharmaceutical market in Japan is affected by annual NHI drug price revisions. We are reshaping ourbusiness portfolio in the Pharmaceutical segment to achieve sustainable business growth.

Food

75.4

55.8

21.7

-2.1

+49.6

+7.1

—

—

-3.4

—

-30.7

-1.3

—

-15.1

-16.7

+1.6

—

-3.7

-2.1

-0.8

-0.8

56.0

25.0

-3.0

+56.7
-3.4
-32.0

78.0

Pharma Other

Profit Attributable to Owners of Parents and Financial Indicators
Consolidated profit attributable to owners of parent is projected to decrease significantly to JPY 51.0 billion.
This is primarily due to the absence of extraordinary profit from the sale of pharmaceutical researchlaboratory land in the previous fiscal year. ROE is expected to decrease year on year to 7.0% as a result.
However, the dividend payout ratio is expected to increase significantly to 52.3%.
24 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Initiatives to Improve Profitability througha Selection and Concentration Strategy• Strengthen vaccine business

FY2020 FY2021 FY2022 FY2023

Page 11• Increase sales of new drugs• Restructured the Generic
Drugs business

ROIC =

Described in lower column

Asset-Light Initiatives to Reduce Invested Capital• Transferred DM Bio Ltd. and Agricultural Chemicals business• Integrated Veterinary Drugs business: Established Meiji Animal Health Co., Ltd.
• Reviewed R&D structure, including the shutdown of
the Yokohama Research Laboratory

WEB
Page 64

Restructuring the Generic Drugs BusinessTransforming Generic Drugs with Increasing Demand into a Growth Business
The demand for generic drugs in Japan is increasing due to a growing elderly population and progress inpreventative medicine. However, problems with quality have become more frequent in recent years. As a result, thequality and stable supply of generic drugs is becoming increasingly scrutinized. Therefore, we are restructuring ourbusinesses to ensure profitability and growth. We are building a solid business base with the cost advantages of
efficient production at our overseas plants and our strengths in high-level quality assurance and a stable supply
system.

Strengthening Cost Competitiveness and Sales Capabilities
We spun off the Odawara Plant of Meiji Seika Pharma Co., Ltd. to establish Meiji Seika Pharmatech Co., Ltd. in December
2022. Going forward, this plant will evolve into a CMO plant that will be contracted to manufacture other companies’
products as well as our own products. With strengthening cost competitiveness, we are also strengthening our sales
capabilities for further business expansion by integrating the Generic Drugs Division of Meiji Seika Pharma Co., Ltd. into thegeneric drug manufacturing and sales company Me Pharma Co., Ltd.

Meiji Seika Pharma Co., Ltd.

Spin-off of
Odawara Plant

Transfer of handling ofsome generic drugs
Product supply
Me Pharma Co., Ltd.
Collaboration

Accelerate growth to capture growing
demand by leveraging threestrengths: cost advantages, quality
assurance systems, and stable supply

Meiji Seika Pharma Co., Ltd.
In addition to longstanding high technological capabilities
and quality assurance systems, reform cost structure
through spin-off to strengthen cost competitivenessMedreich

Thai Meiji Pharmaceutical

Overseas plants with production and quality control
systems that meet high Japanese standards

Meiji Holdings Co., Ltd.｜Integrated Report 2023 25

Value Creation Process

The Meiji Group’s Process for Value Creation

Creating Health Value from Abundant Capital throughMeiji’s Unique Strategies and Value Chain to
Realize Our Vision

Input

Capital Allocation(Strategy)

The Meiji Group has accumulated an abundance of capital over the years. We strategically allocate thiscapital through Meiji ROESG®* Management. We then create Meiji unique value for wellness through avalue chain that leverages our strengths. By evolving this process further, we aim to become a company
capable of sustainable value creation.
* ROESG is a registered trademark for a management indicator developed by Kunio Ito, a professor at Hitotsubashi University.

Business Activities

Outcome(Providing Meiji Unique Value for Wellness)

Financial Capital• Can stably generate cash flows
for growth investment• Sound and robust financial
structure• High profitability throughhigh-market share product lines
in industry

Intellectual Capital• Knowledge and expertise
accumulated over a 100-year history• Basic research (milk, cocoa,
microorganism, fermentation,biotechnology and drug discovery
research)• Intellectual properties• Manufacturing technologies• Product commercialization expertise

Human Capital

2023 Medium-TermBusiness Plan
Promotethe Meiji ROESG®
Management Effectively

Manufactured Capital• Production and sales bases locatedin Japan and overseas• Food distribution network designed
to cover all temperature ranges(room temperature, chilled andfrozen)• Production system that guarantees
stable supply of high-quality
pharmaceuticals

Social Capital• Reliability to the Meiji brand• Strong product brand with highmarket shares• Relationships with suppliers andbusiness partners• Strong, close relationships with ourcustomers• Engagement with shareholders andinvestors

Natural Capital• Rich ingredients (cocoa, raw milk,
microorganisms such as
lactobacilli and actinomycetes)• Energy • Water

26 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Creating Markets
with a Strong Value Chain

Realize both profit growthand sustainability activities

Variety of Products for
Improving Health and Nutrition
Food
Business

R&D• Food Segment• Pharmaceutical
Segment• Group-wide

Invest inbusiness for
future growth whileconstructing strong
financial basePromotethe Meiji Group
Sustainability
2026 Vision
Page 20

WEB

PharmaceuticalBusiness

Sourcing
Page 08

Healthier Lives

Provide Valuable
Information Related toFood and HealthThriving Communities

Creating Sustainable
Improve business
management
using ROIC
effectively

Realizing a Better Futurefor People,
Society and the EarthFood–Pharmaceutical
Synergies

Business Strategy• Personnel who embrace the meiji way
Philosophy• Employee-friendly workplaceenvironments• Respect diversity

OutputValue Chain

Competitive
Advantage

through Strengths

Production
andDistribution

Sales andCommunication

Build supply chainsconsidering for social
expectations andthe environment• Features that help improve health• High quality nutrition• Offer new food culture• Public awareness on diseases
and prevention• Promote proper use ofpharmaceuticals• Scientific data and articles

Coexisting with Nature

Page 29

Page 28

Initiatives to Support
Sustainable Value Creation

NaturePeopleInnovation

Corporate
Governance

Page 44

Page 52

Page 60

Page 71

Meiji Holdings Co., Ltd.｜Integrated Report 2023 27

Value Creation Process

Driving Force Behind Sustainable Value Creation
The Meiji Group aims to achieve sustainable growth by providing Meiji unique value for wellness and creating
new markets. We have diverse strengths in the value chains of R&D, sourcing, production and distribution as
well as sales and communication that form the foundation of these efforts. We will build on these strengths tocreate a competitive advantage that is unique to Meiji. At the same time, we will give proper consideration tosociety and the environment. We will further enhance our corporate value by providing a variety of productsContinuing to Create Innovative Value with New Ideas
The Meiji Group is evolving its existing businesses by incorporating advanced digital technology knowledge. Ourconstant efforts have led to the creation of innovative unique value in the fields of food and pharmaceuticals to meet
our customers’ needs today and tomorrow.

and useful information that contribute to good health.

Transforming Marketing through Interactive Communication
Providing Personalized Information and Contributing tothe Vibrant Daily Lives of Children and their Families

Creating Markets with a Strong Value Chain
Characteristics and Strengths of the Meiji Group

Cross-functional R&D
and intellectual property management• Accumulated knowledge obtained through basic research (milk, cocoa,
microorganism, fermentation, biotechnology and drug discovery research)• Excellent product commercialization expertise, manufacturing technologies
and related intellectual property management• R&D capability merging knowledge in food and pharmaceuticals

R&D

Sourcing• Cooperation with cocoa and dairy farmers• Network with related organizations• Both cost competitiveness and stable procurement using a global supply chain

Creating Sustainable

Competitive
Advantage

through Strengths

Sourcing network with sustainability
and cost advantage

Production
andDistribution

Sales andCommunication

Build supply chainsconsidering for social
expectations andthe environment* Concept image ofapp screenChildcarerecords
Consultation
withnutritionists

Provision ofnutrition
information

Cycle to improve health value by providing
personalized information and interactive
communication using digital technology

We must provide customers with what they need to be continuously chosen by them.
Now that foods with health value are expected by customers, unique ingredients orfunctions alone are insufficient. We believe that we must provide products andinformation that match the situations of customers. Therefore, we are transforming
our marketing activities to be more customer-oriented.
For example, we are developing an app to enhance our contact with parents ofinfants. This app has three functions at launch: record, learn, and consult. Users can
get information on nutrition according to their infant’s age by entering childcare
records. They can also consult directly with our nutritionists. We have used theknow-how that our dedicated nutritionists have accumulated over many years ofoffering nutritional consultation services at hospitals, in stores and at counselingoffices for parents. We will not stop at simply providing information. We will also
provide support for the child-rearing lifestyles of children and their families.
We will develop new marketing activities in other categories using our customer
communication know-how and digital technologies. Providing products withvaluable information contributes to solving social issues. By doing so, we will
strengthen our relationship of trust with our customers and improve the lifetime
value of products.

Excellent production technologies
and quality control• Quality control system (ensure product quality and safety)• Distribution network designed to cover all temperature ranges (roomtemperature, chilled and frozen)• Excellent production technologies, bio-pharmaceutical technologies andglobal production network for pharmaceuticals

Marketing power and credibility to establish
high market share• Two-way communication and strong, close relationships with business
partners and customers• Trust in the Meiji brand accumulated over many years• Product lineup that meets diverse health needs from infants to the elderly• Commitment to Meiji ROESG, a unique management indicator thataims to integrate business and sustainability activities• Analysis and disclosure based on climate change (Task force on
Climate-related Financial Disclosures) and biodiversity(Taskforce on Nature-related Financial Disclosures)• Thorough compliance with the Meiji Group Supplier
Code of Conduct

Contributing to Infection Control using Digital Technologies
Collaborating with BlueDot in Canada to Provide the Latest Infectious
Disease Information to Medical Facilities
The use of digital technologies in the pharmaceutical industry has increased rapidly inrecent years. This includes using artificial intelligence to improve drug discovery
efficiency and using real-world data in clinical development. There are also an increasing
number of non-pharmaceutical initiatives, such as digital therapy, to meet needs that are
not being met by pharmaceuticals.
The Meiji Group is currently working to provide solutions in areas including
prevention and prognosis by fully using digital technologies. Information is very valuable
to prevent infectious diseases. Therefore, we signed a contract with BlueDot, a Canadiancompany, in 2021 to establish a system that allows us to get timely and comprehensive
information on infectious diseases around the world. We are also providing infectious
disease reports for medical professionals and submit papers estimating the number ofpeople infected with COVID-19.
Furthermore, we are considering forecasting infectious disease outbreaks. We aim toprovide timely information on the spread of infectious diseases by developing
forecasting programs and securing new data sources. Therefore, we are hiring highly
specialized human resources and collaborating with academia and other industries. The
Meiji Group will contribute to meeting medical needs and maintaining and developing
public health through these efforts. We will also help solve the social issue of the threat
posed by infectious diseases.
* Membership site for healthcare professionals operated by Meiji Seika Pharma Co., Ltd.

28 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Publishing BlueDot reports on
Meiji Medical Net*BlueDot Report

Meiji Holdings Co., Ltd.｜Integrated Report 2023 29

Value Creation Process

Financial and Non-Financial Highlights (Main Indices)
Net Sales *1

Operating Profit / Operating Profit Margin(JPY bn)
1,400(JPY bn)120

1,254.3

1,252.7

1,191.7
1,013.0

1,000

(%)
12

98.3

1,062.1

102.7

60

600

8.2

(10,000 t-CO2)
80(t-CO2/JPY bn)
10

92.9
9.2

8.9

75.4
7.1

9

60

6

40

62.3

4.97
30

3

20

0

0

60.4

56.3

4.82

53.6

4.72

51.4
4.84

4.48

200
0

0

FY2018FY2019FY2020

FY2021

FY2022FY2018FY2019FY2020

FY2021

FY2022FY2018(JPY bn)
90

60

87.4

61.8
12.2

67.3

12.4

69.4

65.6
13.5

10.0

11.1

30

Equity / Equity-to-Asset Ratio(%)(JPY bn)

(%)

20

800

80

15

600

10

400

527.3
52.5

562.7
56.3

621.4
58.2

FY2019FY2020

FY2021

8

20,0006

15,0004

10,000

2

5,000

0

0

FY2022

673.3

711.9

62.7 60

23,48323,397

22,571

0.4

21,255

0.187

0.187

0.194

0.189

0.178

FY2020

FY2021

(%)
100

60

948

1,000

98
77

80

1,423

55

60

200

20

500

0

0

0

0

500

477

475

448

84

68

40
5

0.1

FY2022

Water consumption (Left scale)
Global water consumption per unit of sales (Right scale)*3(Times)
2,000

1,500

0.2

0

FY2019Sustainable procurement ratio

1,900

20,6230.3

Number of times support has been provided todairy farmers by the Meiji Dairy Advisory (MDA)*4

60.3
40

(1,000 m3/JPY bn)

FY2018CO2 emissions (Scope 1, 2) (Left scale)
Global CO2 emissions per unit of sales (Right scale)*3

Operating profit (Left scale)Operating profit margin (Right scale)Profit Attributable to Owners of Parent / ROE(1,000 m3)
25,000

106.0

90

7.8

Water Consumption /Water Consumption per Unit of Sales *2

CO2 Emissions (Scope 1, 2) /CO2 Emissions per Unit of Sales *2

98
90
62

40

42

FY2020

FY202120

21
0FY2018FY2019FY2020

FY2021

FY2022FY2018

Profit attributable to owners of parent (Left scale)ROE (Right scale)

60
20
0
-20
-60

FY2021

FY2022

114.1

43.2
11.8

123.6

99.9

85.0
48.2

30.5

-70.8
-93.1

-27.6

-36.7

FY2019FY2020Cash flows from operating activities
Cash flows from investing activities

FY2021

FY2022

Free cash flows

30

10

FY2022

(%)

32.8

32.3

36.4

35.4

4

4.0

4.0

3.9

3.8

3.6

FY2018FY2019FY2020

FY2021

FY20225

20

0

Payout ratio (Left scale)
Dividends on equity (DOE/Right scale)

FY2022(Patents)
2,000

6

6

28.0

FY2019Patentee score per patent /Number of patents in force*9

5.6
10

7
FY2018

Procurement ratio*7 of Meiji Sustainable Cocoa Beans*6
Use of certified sustainable palm oil*7
Use of FSC®-certified paper, PEFC-certified paper andpost-consumer paper*8

40*1 The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and related implementation guidance are being applied as of FY2021.
*2 Applies to the Meiji Group (the domestic Meiji Group and 13 overseas production plants <12 plants up until FY2019, 13 plants in FY2020, 14 plants in FY2021>). The
per unit of sales is calculated from the consolidated sales.
The Kumamoto Production Center of KM Biologics Co., Ltd. was included in the calculation from FY2018, and all of the company’s sites were included from FY2019.
*3 The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and related implementation guidance are being applied to net sales
used in the per unit calculation for FY2022.
The same standard and related implementation guidance have not been applied to net sales used in the per unit calculation for FY2021 and earlier.

30 Meiji Holdings Co., Ltd.｜Integrated Report 2023

FY2021

Ratio of female managers*9
(%)
15

0

-100

FY2020

Number of times
Cumulative total*5

(%)
50

127.5

20

-100.2FY2018FY2019

Payout Ratio / Dividends on Equity (DOE)(JPY bn)
140

112.1

FY2020Equity (Left scale)
Equity-to-asset ratio (Right scale)

Cash Flows100

FY2019

0

4

4.7

3.1

3.4

3.7

4.8

4.7

4.6

1,094

1,082

1,058

2

4.9

5.4

1,000

1,037

1,035
500

0

FY2018FY2019FY2020

FY2021

FY2022

1,500

0

2018

2019

2020

2021

2022

Patentee score per patent (Left scale)*10
Number of patents in force (Right scale)*4 An activity focused on human resource management, aiding the growth of those involved in dairy farms through improving farm operations and enhancing theirbusiness management techniques.
*5 By FY2019, support had been provided a total of 500 times.
*6 Cocoa beans produced in areas where farmer support program has been implemented.
*7 Meiji Co., Ltd. and its affiliated domestic and overseas group companies.
*8 Until FY2020, covers only group companies in Japan (including KM Biologics from FY2019). From FY2021, covers all group companies in Japan and overseas.
*9 Four companies of Meiji Holdings Co., Ltd., Meiji Co., Ltd., Meiji Seika Pharma Co., Ltd. and KM Biologics Co., Ltd.
*10 Indicator of patent competitiveness provided by Patent Result Co., Ltd. (using Biz Cruncher®).

Meiji Holdings Co., Ltd.｜Integrated Report 2023 31

Progress for 2023 Medium-Term Business Plan

Food Segment Business Strategy

Returning to a Growth Path by Moving Forward
Without Being Bound by Past Successes

Restoring Growth of Core Businesses and Focusing on
Further Expanding Overseas Business

A Challenging Year with a Significant
Decrease in Profits: Overcoming
the Slowdown in Growth in Recent Years
Renewing Awareness of Issues
We Must Address
Net sales increased in the Food segment in FY2022.
However, operating profit declined by JPY 20 billion.
While net sales increased, this includes an increase due toprice hikes. In other words, volume-based results that
exclude price hikes were very disappointing.
The recent decrease in profit is largely due to external
factors, such as soaring raw material prices and energy
costs. There is also a serious impact from growth
slowdown in recent years. In the past few years, we have
only been able to mitigate the impact of this growth
slowdown through cost reduction. However, in FY2022,
the negative impact of external factors exceeded theeffect of cost reduction. This exposed the impact ofgrowth slowdown.
We must understand the seriousness of these results
to break out of this difficult situation. Each and every oneof us must work earnestly to return to a growth path. We
must instill a sound sense of urgency within the company.

Katsunari Matsuda
COO (Food Segment)
Member of the Board and Executive Officer
Meiji Holdings Co., Ltd.
President and Representative Director
Meiji Co., Ltd.

(JPY bn)

FY2021ResultFY2022
ResultNet sales

826.0

865.6

Operating profit

75.9

55.8

+4.8%
+39.5
-26.5%-20.0

Breakdown of Consolidated Op. Profit (JPY bn)
75.9

FY2021

+13.7
-22.7
-3.3

FY202232 Meiji Holdings Co., Ltd.｜Integrated Report 2023

YoY Change• Increase due to pricehikes +18.3• Change in sales volume
and product mix -4.6
• Increase in raw materials
cost -23.2• Volume reductions +1.5
• Other cost increase -1.0

Increase in promotional and logistic costs-6.6

Increase in indirect manufacturing costs,
including energy and depreciation costs-1.1• Decrease in profit from subsidiaries in China,
while increase from subsidiaries in US and Asia
• Decrease in profit from feed subsidiaries,
transfer of shares of distribution subsidiary

55.8

Quickly Regaining Profitability to Take on Change
A major reason for this growth slowdown is that we are stuck in our past successes. We have built top brands inmany categories: drinking milk, yogurt, chocolate, and infant formula. We have prioritized efforts to protect ourcurrent position in recent years based on our strategy of “enhance strength of products/business.” As a result,
we have been unable to focus on developing and cultivating new products, leading to stagnant growth. I
believe that the “enhance strength of products/business” strategy itself is correct. These results have reaffirmedthat we can enhance our strength through change rather than extending our traditional paths.
Fortunately, the pace of raw material and energy cost increases has eased in FY2023. Our efforts to pass on
costs are also progressing. We offer products in every category that are differentiated from competitors’
products in terms of value. Highly differentiated products can sustain higher prices, leading to a quicker
recovery in lower earnings due to cost increases. We will improve the product appeal of our core product lineup
with health value. For example, we plan to launch new products such as Meiji Probio Yogurt R-1 with a stronger
concept as well as SAVAS sports protein with enhanced functions from blending in new ingredients. In addition,
we will strengthen marketing activities. Focusing on the health value of our products will result in increasing
sales volume. We will regain profitability, then take on the challenge of achieving further growth in FY2024 andbeyond.

Strengthening Global Strategy froma Human Capital Perspective to Drive Growth
We are making steady progress with our overseas business inaccordance with the 2023 Medium-Term Business Plan. In
China, our Tianjin plant, which produces drinking milk andyogurt, began operations in January 2023. We will complete ourconfectionery, drinking milk and yogurt plant in Guangzhou
and our ice cream plant in Shanghai going forward. Drinking
milk is still in the process of becoming profitable. However,
Meiji Dairies (Tianjin) Co., Ltd.
confectionery, ice cream, and B to B are contributing to profits.
In particular, the uniqueness of ice cream products developed
and marketed with the input of local employees has been well accepted by the market. This has led to anincrease in sales volume. In China, we sell chocolate bars and chocolate snacks that are familiar in Japan. The
taste, quality and brand worldview of our products have been well received, and they are performing well.
Performance in Southeast Asia has been favorable as well. The Meiji brand is also gaining popularity in the U.S.
market. This global performance has renewed our confidence that our technological capabilities cultivated inJapan over many years and the high level of trust in the Meiji brand hold true overseas as well. We will makefurther progress by quickly identifying and responding to local opinions and needs.
The entire Group will work together to drive growth in the global market accordingly with focus on two
issues. First, in April 2023, we reorganized our business divisions at the head office in Japan. Product managers
in each division now assume responsibility for overseas markets as well. Secondly, we intend to increase themobility of human capital between our head office in Japan and overseas subsidiaries to raise the level of ourglobal management capabilities. For example, we will actively assign motivated and capable human capital toeach country and region. They will return to Japan after gaining experience in local business for a while andapply the knowledge they have gained overseas throughout the Group. They will then use this experience tocreate new value in the global market.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 33

Progress for 2023 Medium-Term Business Plan

Food Segment Business Strategy

Boldly Implementing Structural Reforms in Businesses:
Aiming for a Lean and Efficient Business Structure

Becoming a Group of Individuals with Initiative and Turning Diversity
into a Corporate Strength

Improving Operating Efficiency while Optimizing Production

An Organization with a Sense of Ownership over Innovation

We will clear up and other important issues in the Food segment within FY2023. We have maintained sales
value through price hikes, but sales volume has remained sluggish. We have made capital expenditures for
growth during the period of the 2023 Medium-Term Business Plan, but some investments have not generated
returns as expected. We will reorganize excess facilities and optimize production capacity. In addition, COVID-19
pandemic has made us keenly aware once again that we must improve sales productivity. The Food segment
achieved significant profitability growth in the years since FY2012, driven by sales growth from core businesses.
At the same time, there was a positive impact of structural reforms to optimize structures in all sections of thecompany, including production, logistics, and sales. We must reflect on the fact that, while the unusualenvironment of COVID-19 pandemic did have an impact, the speed of our reforms was lacking compared to thepast. Therefore, we will decisively implement structural reforms and return to a lean and optimized
management structure. We are determined to start the 2026 Medium-Term Business Plan from FY2024 on thatbasis.

We are promoting organizational reforms to invigorate communication within and outside
the company and develop human capital capable of creating new businesses. We havecentralized development divisions across the company, which has led to active
interactions among researchers across categories. I often see them exchanging ideas witheach other. Some initiatives created under the Meiji Accelerator Program, a program foropen innovation through collaboration with startup companies, have resulted incommercialization. We will encourage the creation of new products and services with asense of ownership by proactively communicating these examples within the company. In
particular, I would like to raise awareness among the next generation of young employeesthat if they come up with interesting ideas, they will be adopted.
Meiji Accelerator Program(In Japanese only)
Furthermore, we positively consider M&A as an option to create new businesses andexpand overseas business. The Food segment has cash inflow of JPY 50 to 70 billion every
year. We need to allocate that to investments for growth. One of the ways to do this is through M&A. Rather than
implementing M&A thoughtlessly, we select and implement those that bring synergies in line with ourphilosophy. In addition, the driving force for long-term growth is our human capital. I want Meiji to be a groupof individuals who think and act on their own to fully demonstrate their abilities. We aim for the kind ofdiversity that demonstrates the strengths of individuals. Then, I would like to turn this into a corporate
strength.

Refining the Path Towards the Future:
Creating Value for Wellness that only Meiji can Provide

Our Reason for Existence is in Creating New Markets
Meiji currently has the support of many customers. However, we must sharpen its philosophy to evolve into a
company that is truly needed by society. In the Food segment, we have clearly stated our nutritional ideals in
our Nutrition Statement. We will then embody our new group slogan, Now ideas for wellness. In June 2023, weformulated the Meiji Nutrition Profiling System (Meiji NPS) as a system to evaluate and improve food products
from a nutritional perspective. With the Meiji NPS, we will accelerate our efforts to solve health issues by
pursuing nutritional value. Many global food companies are now focusing on how to communicate thenutritional value of their products to consumers. There are also governmental initiatives to develop newlabeling systems. How do we ourselves relate to issues surrounding nutrition and wellness, and how can we
communicate this? I would like to propose specific answers to these questions while including current trends inthe next 2026 Medium-Term Business Plan.
In this regard, we must brush up our Nutrition Statement further. We must also expand our business in themarkets that are currently growing. The true essence of the Meiji Group is to create new markets and enjoy thebenefits of being a pioneer. We have achieved this with yogurt, chocolate, and functional yogurt. We willcontinue to create innovations with Meiji unique value for wellness and develop sustainably into the future. I
hope to set out in this direction during the 2026 Medium-Term Business Plan.
Page 61 Creating Innovation > Food Segment

34 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Each and Every Employee Working Together to Fulfill Meiji’ s Responsibility and Mission
Aiming for Growth That Is Not an Extension of
Traditional Paths
We will work to eliminate the damage caused by increased costs
and get back on a growth trajectory by the end of FY2023. We
will then actively invest for further growth, including overseas. It
is our human capital that will execute this growth strategy.
Therefore, we will also invest in our human capital. We would
like to return to a growth path by taking on new challenges andpursuing new value offerings. We should continue to grow by
taking different paths rather than expanding business byextending our traditional paths. Our mission is to contribute topeople’s nutrition and health through our business. We aim torealize a sustainable society. We need to break through past
successes and have each and every employee constantly think
about what Meiji unique value for wellness truly is. My greatest
mission is to make Meiji a company that continues to have thedetermination to realize these values.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 35

Progress for 2023 Medium-Term Business Plan

Pharmaceutical Segment Business Strategy

Becoming a Company that can Consistently Develop andSupply Pharmaceuticals Needed by Society
Making Significant Progress in Structural
Reforms and Becoming a Leading
Company in Infectious Diseases
Creating a Structure that Enables Us to
Leverage our Strengths for Growth
Continuing from the previous fiscal year, we made good
progress in implementing structural reforms in the
Pharmaceutical segment as set forth in the 2023
Medium-Term Business Plan again in FY2022. In particular,
the reorganization of the generic drugs business required
bold decisions. First, we spun off the Odawara Plant. We thenintegrated the functions of the Generic Drugs Div. at the head
office into Me Pharma Co., Ltd. The generic drug market in
Japan is in a turbulent period due to quality issues andsupply shortages. We have transformed our structure into
one that can achieve growth by demonstrating ourcompetitive advantage and unique presence.
The stable supply of antibacterial drugs, which are useful
drugs, is being addressed as a national policy in response to
the rising national security risks. The government’s “Strategy
for Strengthening the Vaccine Development and Production
System” is also underway to address the risk of emerging andreemerging infectious diseases. In this environment, the MeijiGroup is increasing its presence in the pharmaceuticalindustry with its value chain from prevention to treatment of
infectious diseases.
The Pharmaceutical segment is currently at a turning
point. I have been able to foster an awareness of the need forchange within the company through dialogue with
employees. I view this as another achievement in FY2022.

Daikichiro Kobayashi
COO (Pharmaceutical Segment)
Member of the Board and Executive Officer
Meiji Holdings Co., Ltd.
President and Representative Director
Meiji Seika Pharma Co., Ltd.

(JPY bn)

FY2021ResultFY2022
ResultNet sales

187.9

197.2

Operating profit

18.6

21.7

+4.9%
+9.2
+16.4%+3.0

Breakdown of Consolidated Op. Profit (JPY bn)
FY2021

18.6• Increase in sales of ethical pharmaceuticals
in Japan and overseas• Impact from sales return increase of
flu vaccine
Impact of drug price revision

+6.7
-5.0
+0.3

Cost reduction

+2.4
+2.0
-3.4

FY202236 Meiji Holdings Co., Ltd.｜Integrated Report 2023

YoY Change

21.7

Decrease in costs due to structural reform
Increase in energy cost, decrease in
R&D expenses• Increase in profit from subsidiaries in India,
Spain, and our generic drug company in Japan• Decrease in profit from KM Biologics due to- Increase in returned influenza vaccine- Absence of contract revenues from Astra
Zeneca for COVID-19 vaccine formulation,
which were recorded in the previous fiscal year

Contributing to National Security through Pharmaceuticals:Continuously Bringing New Drugs Developed In-House to the Market

Promoting Three Important Projects
The Pharmaceutical segment is pursuing three important projects that will contribute to national security. The first isdeveloping COVID-19 vaccines. We are proceeding with the commercialization of two types of vaccines: KD414, an
inactivated vaccine, and ARCT-154, a self-amplifying mRNA vaccine*. The second project is establishing a domestic
production system for bulk penicillin, which is highly dependent on overseas supplies. In doing so, we are responding
to the policy of ensuring a stable supply of antibacterial drugs in Japan. We are also working with other companies toestablish a supply chain that can be completed within Japan. The third project is the development of the ꞵ-lactamase
inhibitor OP0595, which is supported by the Japanese government. We are working on this project as acountermeasure against antimicrobial resistance (AMR) as an international problem. Through these three projects,
we will build a platform to prepare for the threat of emerging and reemerging infectious diseases. This will alsoenhance our value to society.
* A vaccine that is expected to have high neutralizing antibody titer, high safety and efficacy, and long-lasting effects with a small amountof inoculation using next-generation mRNA technology

Beginning the Harvest of New Drugs in FY2023
New drugs are the lifeblood of pharmaceutical companies. We have pipelines now entering the late-stage clinicaldevelopment phase. ME3208, a drug for the treatment of chronic graft-versus-host disease (chronic GVHD), has been
designated as an orphan drug in recognition of its breakthrough potential. An application for approval was submitted
in June 2023, and approval may be received as early as FY2023. Other promising new pipelines include DMB-3115, an
ustekinumab biosimilar; ME3183, a treatment for psoriasis; and KD-382, a vaccine for dengue fever. We position thesepipelines as global strategic products.
The R&D Steering Committee plays an important role in ensuring the progress of these promising pipelines. Under
the leadership of this committee, Meiji Seika Pharma and KM Biologics formulate joint R&D policies to optimize theirportfolios. In addition, we actively rotate organization leaders and researchers to encourage new ideas. We are
fostering a corporate culture that strongly promotes R&D with a sense of togetherness. Furthermore, we have linked
the corporate planning and business management functions of the two companies. We are working to speed up
decision-making through centralized information and strengthen the corporate governance of the Pharmaceuticalsegment as a whole.

Unleashing the Hidden Potential of Platforms in the Fight Against Infectious Diseases
Creating New Drugs through Networked R&D
The pharmaceutical industry is shifting to horizontal division of roles. This model utilizes superior outside knowledge
in the research, manufacturing and development processes. The development of new drugs in particular now
requires a vast amount of unconventional technologies and knowledge, such as bio-pharmaceutical technology. As aresult, it is becoming dramatically difficult to reach commercialization. Therefore, we are strengthening networked
R&D, such as with collaboration with academia and venture companies to search for new drug seeds. We establisheda “urban proximity-type” and “seeds proximity-type” laboratory in the Tokyo Bay area. We have also recruitedprofessional human capital with experience in the clinical field. In doing so, we have created a system that enables
researchers to promote open innovation with mobility. A number of promising projects are currently being developed
collaboratively with academia. We are taking on the challenge of creating new drugs in areas where we havestrengths, such as infectious diseases, hematology, and immunology and inflammation disorders.
Page 64 Creating Innovation > Pharmaceutical Segment

Meiji Holdings Co., Ltd.｜Integrated Report 2023 37

Progress for 2023 Medium-Term Business Plan

Pharmaceutical Segment Business Strategy

Pipeline (As of August 2023)
Expanding the CMO/CDMO Business Originating in India
We are developing our Contract Manufacturing Organization (CMO)/Contract Development and Manufacturing
Organization (CDMO) business with Medreich Ltd. in India as our main base. The horizontal division of roles model
outsources manufacturing and development to third parties. This model is progressing internationally, and demandfor our CMO/CDMO business is expected to grow. We will seize opportunities created by global demand expansion. To
this end, we have constructed a new manufacturing building in India for Adcock Ingram Pharma Private Limited, anaffiliated company of Medreich, in April 2023 to increase production capacity. Medreich’s products are widelydistributed from West Asia to Africa, where populations are exploding. By expanding our production capacity, we willcontribute to improving access to drugs. We will therefore continue to address global issues while achieving
significant growth ourselves.

Ethical Pharmaceuticals
Stage

Name

Type

Efficacy Classification

Injection

Suppression of bleeding tendency in patients with blood
coagulation factor VIII or factor IX deficiency who havecoagulation factor inhibitors

Approved (Japan)

KD2-305 ●Filed (Japan, South Korea)

ME3208 (Belumosudil)

Filed (Overseas)
Phase I (Japan)

DMB-3115

Turning Our Unique Platform and DX into New Growth Strategies

Phase III (Japan, Overseas)*1

HBI-8000 (Tucidinostat)Oral

We aim to achieve further growth by creating new value in the infectious disease control platform we are building. We
are currently constructing a manufacturing plant for mRNA drugs and vaccine formulations together with ourpartners using government subsidies. This plant will be capable of producing not only vaccines but also new drugs
using mRNA technology. We will be able to produce and supply the pharmaceuticals needed by society centrally
within Japan, from bulk drugs to drug formulations. I see great potential in this.
Furthermore, one of our future growth strategies is our non-pharmaceutical initiatives that go beyond
pharmaceuticals to provide new value to society. We have a presence in the central nervous system (CNS) area alongwith the infectious disease area. There is the issue that patients with central nervous system diseases are lesssatisfied with the therapeutic effects of pharmaceuticals. We are taking on the challenge of creating next-generation
medical solutions to address this issue. As a concrete example, we are making efforts to spread and implement digitaltransformation (DX) to prevent mental illnesses such as depression in collaboration with academia.

Phase III (Japan, Overseas)*1

OP0595 (Nacubactam) ●Injection

Phase II (Overseas)

ME3183 ●Oral

Psoriasis/Selective PDE4 inhibitor

Phase Ib / II (Japan)*1

HBI-8000 (Tucidinostat)

Oral

Relapsed or refractory B-cell non-Hodgkin’s lymphoma

Showing the Unknown Growth Potential of Meiji
Mastering the Infectious Disease Area andLooking Further Ahead
FY2023 is the final year of our 2023 Medium-Term Business Plan.
While we aim to achieve the goals set forth in our Medium-TermBusiness Plan, we are already looking even further ahead. We are aleading company in the infectious disease area. We hope to growourselves as a company by continuing to protect people’s healthfrom the threat of emerging and reemerging infectious diseases. We
can leverage our platform in a variety of areas. In line with this, wewould like to further enhance our corporate value by creating new
drugs that target a wide range of diseases. Please look forward toseeing how Meiji will evolve in the future.

Oral
Injection

Chronic Graft Versus Host Disease
Plaque psoriasis/Psoriatic arthritis/Crohn’sdisease/Ulcerative colitis (Biosimilar)
Unresectable or metastatic melanoma
ꞵ-lactamase inhibitor

Human Vaccines
Stage

Name

Target Disease

Filed (Japan)

KD-370Pentavalent vaccine against diphtheria, tetanus, pertussis, poliovirus,
and Haemophilus influenzae type b

Filed (Japan)

ARCT-154

Self-amplifying mRNA vaccine against COVID-19

Phase III (Japan)*1

KD-414Inactivated vaccine against COVID-19 (Adults*2)

Phase III (Japan)

KD-414Inactivated vaccine against COVID-19 (Pediatric*3)

Phase I (Overseas)

KD-382

Quadrivalent vaccine against dengue fever

Phase I (Japan)

KD2-396

Hexavalent vaccine against diphtheria, tetanus, pertussis, poliovirus,
Haemophilus influenzae type b, and Hepatitis B virus

Veterinary Drugs
Stage

Name

Efficacy Classification

Filed (Japan)

ME4137

Injectable antibacterial drug for cattle

Filed (Japan)

ME4137

Injectable antibacterial drug for swine

Filed (Japan)

KD-412 ●Vaccine for cattle

Under development

MD-22-3002

Anti-inflammatory drug for cattle, swine and horse

Under development

ME4305 ●Antibacterial drug for cattle

Under development

MD-22-1001-1

Injectable antibacterial drug for cattle

Under development

ME4406 ●Feed additive● : Discovered in-house*1 Multi-Regional Clinical Trial *2 18-40 years old *3 0-11 years old
Pipeline

38 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 39

Our Initiatives to Support Sustainable Value Creation

Sustainability Strategy

Becoming a First Mover in Sustainability: Contributing toSolving Social Issues with Ideas Unique to Meiji

Strengthening Initiatives for Carbon Neutrality and Nature Positive
Starting to Calculate Carbon Footprint of Products

Sustainability Initiatives that
Put the Meiji ROESG® into
Practice Making Steady Progress
Initiatives for Human Rights andCoexisting with Nature Moving Forward

Jun Furuta
CSO, Member of the Board andSenior Managing Executive Officer

The Meiji Group’s business operations are now based on
the concept of Meiji ROESG* Management. We are highly
conscious of linking ESG to the improvement of corporate
value. We made steady progress with our sustainability
initiatives to put the Meiji ROESG Management into
practice in FY2022. As a result, we achieved generally solid
results in the second year of the 2023 Medium-TermBusiness Plan.
Human capital is an important element of ESG. We
newly established a CHRO within the Group as a specificinitiative for human capital. The CHRO is now at thecenter of a system to promote human capitalmanagement. Furthermore, we are promoting humanrights due diligence. We are assessing the workplaceenvironment for foreign employees and developing
measures to improve it. We have been holding meetings
on human rights with our overseas Group companies toshare information since FY2022. We have enhanced our
initiatives to address human rights issues by aligning ourunderstanding. Thorough respect for human rights is anecessity for growing our business overseas. We willcontinue to implement measures while taking into
consideration the circumstances in each country andregion.
We are also making steady progress in our initiatives
for coexisting with nature. However, there are still someareas that we need to focus more on. Three themes ofparticular importance to the Meiji Group are carbon
neutrality, nature positive and circular economy. All areclosely interrelated and require a trinity of initiatives. We
must realize all three at a high level to lead the MeijiGroup toward becoming a sustainable company. I believethat this is the critical mission assigned to me as CSO.
* ROESG is a registered trademark for a management indicator developed byKunio Ito, a professor at Hitotsubashi University.

Page 44 Coexisting with Nature
Page 58 Human Rights
Sustainability

40 Meiji Holdings Co., Ltd.｜Integrated Report 2023

The Meiji Group aims for carbon neutrality by 2050. Scope 3 emissions, or emissions from supply chains otherthan our own, account for 85% of our greenhouse gas (GHG) emissions. Therefore, reducing Scope 3 emissions
is an urgent issue. We have established a roadmap for reducing emissions to achieve carbon neutrality. As aconcrete measure in line with this roadmap, we started calculating the carbon footprint of our mainstay
products, drinking milk and milk chocolate, in FY2022. As we expected, emissions from the upstream portion of
the supply chain were found to account for more than 90% of the total emissions for both products . We plan to
calculate the carbon footprint of other mainstay products to expand the scope of our initiatives. Going forward,
we will focus on reducing emissions upstream. The key to reducing emissions is understanding the actual data.
Having data as a basis will promote concrete and persuasive initiatives. In particular, Scope 3 reductions cannot
be achieved without the cooperation of outside business partners. Therefore, we would like to pay attention tocreating a working environment that facilitates collaboration.
Page 46 Coexisting with Nature > Initiatives for Reducing GHG Emissions from Dairy Farming

Creating a New Business Model to Reduce GHG Emissions
The Meiji Group has already begun efforts to reduce GHG emissions in the upstream process for drinking milk.
We created a new business model using the J-Credit Scheme, collaborating with Ajinomoto Co., Inc. The
objective is to contribute to reducing emissions at the dairy farms that provide us with raw milk. It may be just asmall step with limited effectiveness at this point. However, it is significant that manufacturers and dairy
farmers have started working together to reduce GHG emissions. In addition, we have begun to consider carbon
farming for dairy farms. Carbon farming is an agricultural method that aims to reduce GHG emissions by
capturing atmospheric CO2 into farm soil and improving the quality of farm soil. We will continue to collaborate
with municipalities where dairy farming is thriving to conduct a study. The Meiji Group will spread these
initiatives throughout the industry. Dairy farmers, dairy manufacturers, and dairy industry organizations will
cooperate to help reduce GHG emissions in Japan. These initiatives will lead to greater sustainability of dairy
farming.

Redefining Biodiversity for the Meiji GroupThe concept of “nature positive” has recently emerged. It aims to stop the loss of biodiversity and have apositive impact on the environment. Through the agreement at COP15, it has become an international goal tobring the world to a nature-positive state by 2030. The Meiji Group is engaged in businesses where coexistingwith nature is essential. Both food and pharmaceuticals depend on natural capital and ecosystems. Therefore,
nature positive is an extremely important issue. In addition to established biodiversity conservation efforts, wemust always be aware of what we can contribute at our business sites and follow through with thesecontributions. We will clearly define what nature positive means to the Meiji Group and formulate specificinitiatives. Then, we will present these initiatives in the next 2026 Medium-Term Business Plan.

Identifying the Materiality in Social Issues (up to FY2023)
Themes

Domains

Social Issues
Contribute to healthy diets

HealthierLivesCaringfor the Earth

Health andNutrition

Respond to a super-aged society

Climate Change

Reduce CO2 emissions

Countermeasures against emerging
and re-emerging infectious diseases

Circular Economy Reduce environmental impact
Water

ThemesThriving
Communities

Domains

Social Issues

Human Capital

Promote diversity and develop
human capitalSociety

Respect and promote human rights

Sustainable Sourcing

Source raw materials considering
human rights and the environment
See page 90 for details on progress

Secure water resources

Meiji Holdings Co., Ltd.｜Integrated Report 2023 41

Our Initiatives to Support Sustainable Value Creation

Sustainability Strategy

Viewing Sustainability from a Global Perspective and Becoming a Leader in Society

Becoming a Brand that Evokes Sustainability in Addition to Wellness

Promoting the Transition to a Circular Economy

Taking on the Challenge of Establishing a New Sustainable Brand

We are enhancing our initiatives for the circular economy that leads to carbon neutrality and nature positive.
We aim to realize highly circular businesses. For example, bottled products used to be the mainstream for homedeliveries. By collecting those bottles, we were able to recycle resources. However, with the recent shift toproducts in plastic containers, collection methods have become a major issue. Therefore, we are adding the
new concept of Renewable to the traditionally emphasized 3Rs of Reduce, Reuse, and Recycle in order torealize a circular economy. We will replace packaging containers with renewable resources. We will beconscious of the 3Rs + Renewable from the product design stage and promote businesses that can shift to acircular economy. We will communicate the initiatives of the Meiji Group to society at large and encourage ourcustomers to change their behavior. The Meiji Group finds value in products that contribute to the realization ofa circular economy. We will also take a lead in promoting ethical consumption, for which we ask our customers
to pay a premium. I believe that the Meiji Group has a responsibility to fulfill initiatives such as these.

We will take on the challenge of establishing a sustainable brand as a way to achieve both business growth andsustainability. “Sustainable brand” is a keyword proposed by Mr. Peter D. Pedersen, an Outside Director. He
pointed out that the Meiji Group should become a sustainable brand leader in Japan. With the slogan of Now
ideas for wellness, we are promoting our corporate brand as a company that provides “Meiji unique value forwellness.” Accordingly, we would like to develop branding that evokes the image that Meiji’s products are
sustainable. We will create sustainable products throughout the entire value chain. We will also consider how
we can make all processes, from procurement to development, production, and sales, more sustainable. It is avery difficult theme, but we will put it into practice as we deliberate.

Ethical Consumption Starting with Meiji (In Japanese only)

Increasing Sustainability Awareness and ReadinessWe will further expand our sustainability initiatives, including coexisting with nature. First, we will ensure that
we achieve our targets and KPIs for FY2023. We will also formulate the next 2026 Medium-Term Business Plan in
FY2023. Since this is the last Medium-Term Business Plan toward the Meiji Group 2026 Vision, we strive toachieve our targets. We are currently receiving a good response to the realization of the vision. However, theinterpretation of sustainability has recently been expanding. Accordingly, the scope of what we need to tackle
has expanded. Sustainability is directly linked to management, and sustainability and business activities are
becoming two sides of the same coin. Therefore, our initiatives need to be even deeper going forward. To thisend, it is important to quickly capture global trends and grasp the sustainability that society is demanding. We
must then put this demand for sustainability into action immediately. In this way, I would like to raise the MeijiGroup’s overall awareness of sustainability and refine our ability to respond immediately.
Page 20 Overview of 2023 Medium-Term Business Plan and Meiji ROESG

Pursuing Sustainability in the Meiji Group’s Unique Way
The Meiji Group will gain the “first-mover” advantage in new sustainability initiatives. That is what I strongly
hope to achieve as CSO. Until now, the Meiji Group has been a follower in the area of sustainability. I want to be
the first to present and implement ideas that are unique to Meiji to the world. I also want us to evolve as firstmovers. The creation of a new business model that contributes to the realization of sustainable dairy farming,as I mentioned above, is a prime example of the first-mover role we are hoping to play. From now on, we will
always promote initiatives from a global perspective. The Meiji Group is now evolving into a company groupthat competes on a global scale. With regard to sustainability, we will continue to take a global perspective in
our thinking, our superior knowledge, and our efforts to raise the level of our activities. If we are able to rise tothis challenge, we will become a leader in sustainability in Japan. We can also support the formulation ofdomestic rules. As a first mover, demonstrating the Meiji Group’s uniqueness in sustainability initiatives will
have a positive impact on our business over the medium to long term. This will lead to an increase in corporate
value.

42 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Strengthening Communication with Consumers throughProactive Information Disclosure
The Meiji Group is working to procure 100% RSPO-certified palm oil and expand procurement of sustainablecocoa beans. We are proud that these kinds of activities are comparable to those of leading European
companies in the field of sustainability. Unfortunately, the Group has not gained such recognition from themarket. From now on, we will proactively disseminate information so that when people pick up Meiji products,
they subconsciously think of them as sustainable products in addition to being healthy. To achieve this, we will
establish Meiji’s standards and promote our products as sustainable products as well as devise ways ofcommunicating with consumers that Meiji is sustainable. Health and sustainability are not contradictory. I hopeto achieve our ideal world by the end of the 2026 Medium-Term Business Plan.

Integrating Sustainability and Business Strategy:
Accelerating Corporate Value Enhancement
Presenting a New Direction in the 2026
Medium-Term Business Plan
These days, we cannot talk about management strategy without
mentioning sustainability. We have strongly reaffirmed ourbelief that the Meiji ROESG is the best way to improve ourcorporate value over the medium to long term. The Meiji Groupis a company that can publicize sustainability to society throughits products. We also intend to review materiality in our 2026
Medium-Term Business Plan. We will identify materiality with anemphasis on strengthening corporate competitiveness. In
addition, by integrating our business and sustainability
strategies, we will be able to achieve results more quickly. As
CSO, I will play a leading role in accelerating the improvement of
the Meiji Group’s corporate value from the perspective ofsustainability.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 43

Our Initiatives to Support Sustainable Value Creation

Coexisting with Nature

Focusing on Addressing Social Issues Related toMain Raw Materials to Pursue Global Sustainability andthe Sustainable Growth of the Meiji Group

Addressing Social Issues in Main Raw Materials

The Meiji Group is based on the bounty of nature. Natural capital is an important business foundation. We
must maintain the bounty of nature to sustain our business. Therefore, we believe it is important to clarifysocial issues in our supply chain and promote specific initiatives to address them. These initiatives will allow
us to pass on the bounty of nature to future generations while we aim to achieve the sustainable
development of the Meiji Group’s business.

Each of the main raw materials necessary for the Meiji Group’s business continuity faces different social
issues. Therefore, the Meiji Group is promoting a wide range of initiatives for each raw material. Initiatives fortwo main raw materials, raw milk and cocoa beans, are explained in detail on the following pages.
Main Raw
Materials

Raw milk

The Meiji Group’s Value Chain: Close Relationships with Climate Change,
Biodiversity and Human Rights
Main raw materials such as raw milk and cocoa support the foundation of the Meiji Group’s business. Thesematerials are natural capital that are closely related to climate change, biodiversity and human rights. We areworking to reduce the risks associated with these main raw materials and to conserve them throughout ourbusiness and supply chain.

Main Products
and Applications• Drinking milk
• Yogurt• Cheese• Butter• Ice cream• Chocolate

ClimatechangeResource
depletion
Loss ofhabitats
Pollution

Raw Materials (raw milk, cocoa,
palm oil, timber, etc.)

GHG emission
Chemical emissions

Energy, water, land

(water/soil, air)

GHG emission

Land change

Cocoa beans• Chocolate• Ice cream

Chemical emissions(water/soil, air)Land change

Land change

Palm oil

Energy, land

GHG emission(water/soil, air)

GHG emission

GHG emission

Waste,
consumption,
recycling

Marketing

Human Rights
Page 58

Land change

ClimatechangeLoss ofhabitats

Input into business activities
Output from business activities
Relationship with biodiversity*1 Relationships have been organized among the elements of biodiversity conservation such as
resource depletion, loss of habitats and pollution, including climate change*2 GHG: greenhouse gas

44 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Page 46• GHG emission
reduction

Reduction of GHG emissions by using feedwith improved amino acid balance;
use of J-Credit Scheme

Page 46• GHG emission
reduction

Use of biomass plastics in Meiji Oishii Gyunyu

Page 47• Reduction of plastics

Support of dairy farm management with
Meiji Dairy Advisory (MDA)
Conducted 477 activities per year witha cumulative total of 1,900 activities (FY2022)

Soybeans

Wood (Paper)WEB• Sustainable dairy
farm management

Page 48

Establishment of traceability to farms

Page 48

Introduction of Child Labor Monitoring andRemediation Systems (CLMRS)

Page 59

GPS mapping, seeding distribution

Page 48

Promotion of agroforestry farmingWEB

Procurement ratio of Meiji Sustainable Cocoa
Beans produced in regions where farmer support
was provided through MCS: 62% (in FY2022)

ClimatechangeLogistics

Energy, water
Chemical emissions

EnergyResearch,
manufacturingRawmaterialsourcing

ClimatechangeResource
depletion
Pollution

Climate change
Resource depletion
Loss of habitats
Pollution

Social Issues

Calculated carbon footprint of products (CFP)

Meiji Cocoa Support (MCS)

Map of Relationship Between the Meiji Group and Biodiversity*1 including Climate Change, and Human Rights
Energy, water, land

Main Initiatives• Deforestation/
forest conservation• Child labor• Improved livelihoodof cocoa farmers• Local environmental
conservation• Biodiversity lossWEB

• Chocolate• Ice cream• Margarine• Infant formula

Promotion of the use of RSPO-certified palm oil
Procurement ratio: 90% (FY2022)

WEB• Deforestation• Peatland destruction• Violation of the rights
of indigenous people• Forced labor• Child labor• Biodiversity loss

• Protein• FeedEstablishment of procurement guidelines

WEB• Deforestation• Child labor

Promotion of the switch to environmentally friendly
paper* used for product containers and packaging
Procurement ratio: 98% (FY2022)

WEB• Deforestation• Forced labor• Child labor• Product
packagingmaterials* FSC®/PEFC-certified paper; recycled paper including
post-consumer paper, etc.

Page 08 A Hundred Year History of Creating Meiji Unique Value for Wellness

Meiji Holdings Co., Ltd.｜Integrated Report 2023 45

Our Initiatives to Support Sustainable Value Creation

Coexisting with Nature

Making Dairy Farming Sustainable witha New Approach
Dairy farming produces more than just nutritious raw milk. It is an important industry that creates many jobs andcontributes to the local economy. However, it faces various issues such as dealing with environmental pollution by
cattle manure. Raw milk is the cornerstone of the Meiji Group’s business. Therefore, we will take the initiative in
addressing these issues to realize sustainable dairy farming.

Initiatives for Reducing GHG Emissions from Dairy Farming
To reduce greenhouse gas (GHG) emissions from dairy farming, we are working to calculate the carbon footprint of
products (CFP) related to drinking milk. We are also developing a business model using the J-Credit Scheme incollaboration with Ajinomoto Co., Inc.

Calculating CFP Related to Drinking Milk
We calculated CFP related to drinking milk for the first time in Japan in FY2022 to visualize GHG emissions in the dairy
industry. We referenced EPD*, an international standard, guidelines established by the International Dairy Federation (IDF)
for the calculation. We collected data on factors such as energy consumption, feed types or formulations and manure
disposal with the cooperation of dairy farmers. We then calculated the CFP per bottle of Meiji Organic Milk made from raw
milk from designated farms in Hokkaido. Results showed that upstream emissions related to raw material production andtransport account for 91% of total GHG. We will visualize actual environmental pollution using methods like these to raiseawareness of issues throughout the dairy industry. This will lead to concrete actions to reduce GHG emissions.
* EPD: Environmental Product Declaration, an international standard by a third-party product safety certification organization that verifies the safety ofsustainable products

Details of CFP Calculations for Each Process in the Supply Chain
Upstream
Raw material Raw material
production
transport

Mid-stream(raw materials/ (raw materials/ Manufacturing
packagingpackagingmaterials)
materials)

Transport
betweenplantsCFP Calculation Results for
Each Process

Downstream
Storage

Shipping

Sales,
Consumption,
Disposal

6% 3%● Upstream● Mid-stream● Downstream

91%

We are also developing this initiative as abusiness model using the J-Credit Scheme*.
Specifically, the Meiji Group supplies dairy
farmers with optimal feed with improved aminoacid balance using AjiPro®-L procured from
Ajinomoto Co., Inc. The GHG emission
reductions achieved by this process areconverted into credits by Ajinomoto under the
J-Credit Scheme, and the Meiji Group thenpurchases these credits. We then pay thosecredits to dairy farmers which becomes a newsource of income for them. We believe that moredairy farmers and companies will participate inthis business model, and expect to see evengreater benefits.
* A scheme through which the government certifies as credits theamount of CO2 emissions reduced through the adoption ofenergy-saving equipment, the use of renewable energy, and theamount of CO2 absorbed through appropriate forest
management

Business Model Using J-Credit Scheme
3 GHG emission reduction

J-Credit scheme
project
54

Dairy
farmers2

810□□□□□□□□□□□□□□□□□□
1
7
9
Meiji Holdings Co., Ltd.
6

Meiji Co., Ltd.
Meiji Feed Co., Ltd.

J-Credit scheme

1 Sell AjiPro®-L

3 Reduce GHG emissions

7 Meiji Group purchases credit

2 Provide feed with

4 Monitor reduced GHG

8 Pay for credit

improved aminoacid balance
containing AjiPro®-L

5 Transfer value of

reduced GHG
6 Credit value of
reduced GHG

9 Pay charges

10 Offset carbon using credit

Promoting Use of Renewable Energy
The Meiji Group contributes to the realization of a decarbonized society by actively promoting the use of renewableenergy. We introduce solar power generation facilities and the use of electricity derived from renewable energy
sources as well as biomass energy.

Use of Renewable Energy
The Meiji Group has joined RE100, a global initiative aiming for companies to source 100% of the electricity used in theirbusiness operations from renewable energy. We have set a target to increase the share of renewable energy at our sites tomore than 50% of total power usage by 2030.

Introduction of Solar Power Generation Facilities
Solar power generation facilities have been introduced at 13 sites as of March 31,
2023. The most recent installation was at the Eniwa Plant in the Food segment in
FY2022. As a result of this initiative, the annual reduction in CO2 emissions fromsolar power generation facilities was 2,358t-CO2 in FY2022. We will continue tointroduce solar power generation facilities in FY2023 and beyond.
Eniwa Plant, Meiji Co., Ltd.

Use of Biomass Energy

We plan to introduce facilities capable of the methane fermentation treatment of food waste and wastewater treatment at
the Tokachi Plant in FY2024. This will enable us to use methane biogas generated from the anaerobic treatment of whey, abyproduct of cheese production, as a fuel, therefore reducing industrial waste.

Developing a Business Model Using the J-Credit Scheme
We have created a business model using the J-Credit Scheme in collaboration with Ajinomoto Co., Inc. to both reduce GHG
emissions and create economic value in the dairy industry. This business model utilizes Ajinomoto’s AjiPro®-L, a lysine
formulation for dairy cattle, in feed to reduce GHG emissions while maintaining raw milk production and contributing tocost reductions for dairy farmers. Nitrous oxide (N2O) generated from cattle manure is a GHG with a greenhouse effectabout 300 times greater than CO2. We were able to reduce N2O emissions while maintaining milk production by feeding adiet with an improved amino acid balance using AjiPro®-L. The feed effectively provides lysine, an essential amino acidthat is often lacking in dairy cattle, leading to reduced feed costs for dairy farmers.

Use of Biomass Plastics for Meiji Oishii Gyunyu
We are strengthening plastic resource recycling. We converted plastic used in caps
and spouts of Meiji Oishii Gyunyu into biomass plastic in FY2022. Through thisinitiative, we are contributing to addressing social issues caused by plastic waste.
Percentage of recycled plastics*1 and biomass plastics*2 used in PET bottle containers
Target of% by 2025 and% by 2030

70

Biomass
plastic
blend

100*1 Plastics made from used PET bottles that have been collected and reused as raw materials*2 Plastics derived from renewable organic resources such as plants. A new plastic material that is attracting
attention because it helps reduce CO2 emissions without relying on fossil fuels as much as possible.

46 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 47

Our Initiatives to Support Sustainable Value Creation

Coexisting with Nature

Creating New Value for Cocoa through the “Possibilities of Cocoa” Project

Making Cocoa Production Sustainable
Together with Production Areas
Chocolate, one of the Meiji Group’s main products, is also a product that is based on the bounty of nature. We aim toensure the sustainability of cocoa production, the raw material of chocolate. Therefore, we are committed toaddressing the social issues faced by the regions where cocoa is produced and solving them in a way that is uniqueto Meiji so that all people involved in cocoa production can be happy.

Page 61 Creating Innovation >We are working to address issues faced by cocoa production areas. These issues include reduced harvests due to alack of awareness of cultivation techniques and deforestation caused by conversion to cocoa farms. We are also
promoting new initiatives, such as pursuing the potential of cocoa as a fruit.

Meiji Cocoa Support (MCS)The LEAP approach was developed under the disclosure framework for Taskforce on Nature-related Financial Disclosures(TNFD). It is a practical means of addressing nature-related dependency/impact and risks/opportunities in four phases:
Locate (locate the interface with nature), Evaluate (evaluate priority dependencies and impacts), Assess*1 (assess material
risks and opportunities) and Prepare*1 (prepare to respond and report). Based on the LEAP approach, we conducted anature-related risk analysis (assessment of nature dependency/impact and risk analysis) at major Meiji Group cocoa
production sites (13 sites*2) (see figure below). We will continue to analyze priority items at high-risk sites going forward.
We will also pursue efforts to avoid and mitigate nature-related risks by conducting gap analysis, etc. for production areas.
*1 Please refer to our website for detailed results including Assess and Prepare
Biodiversity > Analysis of Dependency/impact of Business Activities on Nature in Line with TNFD (LEAP Approach)*2 Based on actual procurement of cocoa beans

Dependency/impact on biodiversity in cocoa production areas: Locate and Evaluate*1
Meiji Cocoa Support is an initiative to maintain a positive cycle
among farmers, Meiji and customers, from cocoa bean
production to product development, sales and consumption.

Main Dependencies

VH*2

We are working to establish traceability of cocoa beans to the farms where we procure them in all source countries inorder to realize sustainable cocoa production. By establishing traceability, we are able to identify issues faced by thefarmers of our cocoa beans and work to address them. We have already established 100% traceability in five countries:
Brazil, Dominican Republic, Ecuador, Mexico and Vietnam. We are working to establish 100% traceability in othercountries.

48 Meiji Holdings Co., Ltd.｜Integrated Report 2023

• Pollinator services• Climate control• Soil fertility maintain • Biological control(pest/disease suppression)• Healthy water cycle
maintenance(drought control, etc.)

Dependency
ImpactMain Impacts

Cocoa bean
production activities

Addressing Deforestation and Forest Conservation

H*2• (1) Mitigation of the impact ofnatural disaster• (2) Control of Soil erosion

Establishing Traceability to Farms* A coined term combining agriculture and forestry that involves planting trees and thengrowing and raising crops and livestock among those trees

A product that overturns conventional impressions of cocoa by
combining red cocoa flavanol extract, which is extracted fromcocoa beans using a proprietary technology, with cocoa juice
made from pressed cocoa pulp

Analyzing and Addressing Nature-Related Risks in Cocoa Production
Using the LEAP Approach

High-Priority Dependencies

We are promoting initiatives to halt deforestation and protect andrestore the forests associated with cocoa farms. In Ghana, we
provide information on forest protection and restoration as well as
education on agricultural production process management tofarmers at our suppliers. In addition, we collaborate with local
partners to monitor the farms of our suppliers and ensure that they
are not interfering with protected forest areas through mapping andon-site inspections. Furthermore, we promote agroforestry* by
distributing various shade tree seedlings to cocoa farms.

▲ Cacaful (Drink/Tablet/Sorbet)

R&D and Business Creation Based on Patent Analysis

Addressing Social Issues in Cocoa Production

Meiji Cocoa Support is our unique cocoa farmer support programthat began in 2006. We are aiming to enhance the sustainability of
cocoa bean production by directly visiting production areas andworking with various partners to address social issues. These issues
include technical support to improve the quality of cocoa beans,
improving the livelihoods of farmers and activities to conserve andrestore the local environment. We are currently offering MCS in ninecountries: Ghana, Venezuela,
Brazil, Peru, Dominican Republic,
Ecuador, Mexico, Vietnam andMadagascar.

We are taking on the challenge of creating new value for cocoa
through the “Possibilities of Cocoa” project, which was launchedinterdepartmentally. The first result of this project was the launch of
new products in February 2023 that utilize cocoa-derived nutritional
materials that had not been utilized until then. Cacaful, whichcontains cocoa flavanol extract, and Cacawell, a cocoa ingredientfood, were commercialized through close collaboration with cocoa
farms in Vietnam in cooperation with production areas. We willcontinue to contribute to society by creating new value for cocoa.

VH• (1) Deforestation due to land
conversion• (2) Air, water, and soil pollution
from agricultural chemicals• (3) Water and soil pollution
from fertilizers

High-Priority Impacts

NatureH• GHG emissions from slash andburn methods• Biological changes/interference

Risk analysis results by cocoa bean production area for priorities of dependency/impact
Dependency(1)
Walking along the farmboundary with asmartphone andmapping it with GPS to
identify the boundary
between the farm and theprotected forest areas andcheck the farm area notinterfering with theprotected forest areas

Shade tree seedlings to beplanted in cocoa farms

High priorities
Number of
VH-Assessed sites

Impact
(2)

(1)

(2)

(2) (3)(3)

Mitigation of
the impact ofnatural disasters

Control ofsoil erosion

Changes interrestrial
ecosystem usage

Air pollution

Water pollution

Soil pollution

2

2

4

1

1

1

*1 Figures and tables evaluated using ENCOR (Exploring Natural Capital Opportunities, Risks and Exposure), Aqueduct and WWF Biodiversity Risk Filter*2 VH: Very high, H: High, sites with high risk of dependency and impact

Meiji Holdings Co., Ltd.｜Integrated Report 2023 49

Our Initiatives to Support Sustainable Value Creation

Coexisting with Nature

Creating a Strong Operating Base thatGrows while Coexisting with Nature

Developing Responsible Supply Chains

The Meiji Group strives to contribute to the sustainable production of raw milk, cocoa beans, and other main raw
materials. We are committed to building a solid operating base that can continue to grow while coexisting withnature. To achieve this, we are focusing on securing our own water resources, biodiversity conservation activities,
supplier engagement and other initiatives.

Initiatives to Secure Water Resources
The Meiji Group considers securing water resources to be one of the most important social issues. We are taking
action based on the results of surveys and assessments of various water risks including droughts, floods and water
quality. We are also reducing environmental impact through efficient water use and drainage management.
Replenishing Water Resources
We aim to replenish an amount of water to nature that is equivalent to 100% of
the amount used in our products by 2050 (water neutrality). As part of ourinitiatives to achieve this target, KM Biologics has been waterlogging fields withgroundwater since 2005. We have been replenishing more than 500 thousand tonsof groundwater annually, which is more than what is used at the head office andthe Kumamoto Production Center. Furthermore, we concluded an agreementwith Seki City, Gifu Prefecture, in July 2023 for forest conservation activities.
These activities will help preserve the forests in the Kiso River basin in Gifu
Prefecture where Meiji Group plants are located adjacently. We will continue toexpand our efforts to replenish water resources through forest conservation at thewater resource areas of each of our plants.

There has been international demand for fair and free competition, fair transactions, and responsible sourcing. The
Meiji Group is committed to fulfilling our social responsibility not just in our own business but also throughout our
entire supply chain, including our business partners, to meet this demand. We are working to address social issues
such as child labor, forced labor, and environmental destruction.

Promoting Supplier Management
In June 2020, we established the Meiji Group Supplier Code of Conduct, which requires our suppliers to fulfill their social
responsibilities. Starting in October 2020, we have identified the total number of suppliers based on their procurement
performance and identified suppliers to be evaluated, taking into consideration the procurement amount and thesubstitutability of procured raw materials. We conduct risk assessments using sustainable sourcing surveys*. We thendetermine whether there are any human rights or environmental issues in the supply chain. If there are items that require
improvement, we promote engagement (dialogue) in cooperation with suppliers.
* Analysis categories: human rights and labor, environment, ethics, and sustainable procurement

Sustainable Sourcing Surveys/Supplier Engagement Implementation Status
FY2020

FY2021

FY2022

SurveyJapan

Suppliers:
74 companies

Japan

Suppliers: 31 companies(Implemented at a cumulative
total of 105 companies)

Contract companies of Meiji Co., Ltd.:46 companies

Signing ceremony for forest conservation
activities with Seki City, Gifu Prefecture

Japan

Engagement

Biodiversity Conservation Activities
The Meiji Group strives to conserve its own corporate green spaces. We also promote biodiversity conservation
activities at our 43 domestic production sites and 18 overseas production sites, including Group companies.

We undertook studies of 61 production sites using IBAT*1. We surveyed an area within a radius of approximately 3
kilometers from the production sites*2 to determine proximity to areas of biodiversity importance*3. Our results indicated
19 sites in close proximity, two of which had IUCN and Ministry of the Environment Red List species nearby that were listed
as vulnerable (VU) or higher and facing a high risk of extinction in the wild. There were no instances of damage tobiodiversity in biodiversity critical areas in FY2022.
*1 Integrated Biodiversity Assessment Tool
An assessment tool for environmental protection that makes use of the latest foundational data, which was developed by IBAT Alliance (the United Nations
Environment Programme (UNEP), the World Conservation Monitoring Centre (WCMC), Conservation International (CI), and BirdLife International)*2 Assessments were conducted within a radius of 3 km of the areas in which business activities at production sites could directly impact biodiversity*3 World Natural Heritage sites, Ramsar Convention on Wetlands, UNESCO MAB, IUCN Categories Ia, Ib, II, III, IV, and V

We will ask business partners with an overall score that is below the designated level* to submit improvement reports and re-evaluate them after
one year to promote improvement.

Sustainable Sourcing Surveys
We conduct sustainable sourcing surveys using the evaluation system of EcoVadis or Meiji original surveys. We
implemented surveys at the top 80% of suppliers of our operating companies* in FY2020. In FY2021, the survey was
expanded to include more suppliers and was also administered to contract companies of Meiji Co., Ltd. In FY2022, we
re-evaluated suppliers that did not reach the standard score.
* Meiji Co., Ltd., Meiji Seika Pharma Co., Ltd., KM Biologics Co., Ltd.

Supplier Engagement
As the next step after conducting sustainable sourcing surveys, we conduct supplier engagement on an individual basis toaddress issues. We are working to address social issues and reduce risks in the supply chain by strengthening
engagement. In FY2022, we implemented the following initiatives.

Initiatives in the Meiji Group Nature Conservation Area
Kumamoto Sunlight Forest

50 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Main raw material suppliers:
7 companies
Suppliers potentially in need ofstrengthened or improved
initiatives: 5 companies* EcoVadis survey: Less than 45 points; Meiji-original survey: Less than average

Biodiversity risk assessments for land owned by the Meiji Group*1 A system under which the national government certifies areas where biodiversity conservation is
being promoted through private sector initiatives, etc. : Abbreviation for “Other Effectivearea-based Conservation Measures”*2 30by30 is the international goal of conserving at least 30% of the land and sea as healthy
ecosystems by 2030

(implementing re-evaluation)

Overseas Suppliers: 17 companies

Japan

We are working to conserve the Meiji Group Nature Conservation Area
Kumamoto Sunlight Forest, located in the Kikuchi Research Center of KM
Biologics Co., Ltd. In August 2021, it was recognized by Social andEnvironmental Green Evaluation System (SEGES) as Excellent Stage 2. We havealso registered as OECMs*1 to achieve 30by30*2. It has currently been selected
as “equivalent to certification.”

Suppliers: 16 companies

Kikuchi Research Centerand scope of applicationof OECMs

Initiatives to Address Social Issues

Initiatives to Reduce Risks

We confirmed the current situation and targets of seven main raw
material suppliers with respect to three main themes: GHG
emissions reduction, water resources and water risk response, andbiodiversity conservation. We required that any gaps are addressedand conducted interviews regarding advanced initiatives.

We explained the Meiji Group’s sustainability
initiatives and responses to the sustainablesourcing survey to five suppliers whose survey
results indicate that they need to strengthen or
improve their initiatives.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 51

Our Initiatives to Support Sustainable Value Creation

Human Capital Strategy

Maximizing the Potential of Each Employee and Aiming for
Sustainable Growth through Human Capital Management

Emphasizing External Competitiveness and Diversity to Create Innovation
Focusing on Developing Managers who Drive the Group Forward

Promoting a Consistent Human Capital
Strategy Throughout the Group by
Appointing a CHRO
Growing Further through Human CapitalManagement
The Meiji Group is pursuing its slogan, Now ideas forwellness. We aim to achieve sustainable growth bycreating new value on a global scale in response to social
issues. We will accomplish this by investing further inhuman capital and acquiring the abilities and skills to win
in an increasingly competitive environment. To this end, it
is important to shift to human capital management, which
maximizes diverse values and knowledge by creating anenvironment where they can be utilized together.
Until now, each segment of the Meiji Group has beenproactively securing and developing human capital
according to the speed of business growth. Goingforward, we will practice human capital management as awhole to create value that exceeds the sum of theindividual businesses. We established the new position of
CHRO in April 2023 to respect the promotion of aconsistent human capital strategy.
We must formulate a human capital strategy that leads
to increased corporate value and promote it as a unified
Group effort. Throughout this process, my role as CHRO is
to build a win-win relationship between employees andthe company, which will lead to the growth of the MeijiGroup. I will draw out the strengths of our human capital,
which are the source of our value, so that all employees
can approach their daily work with a sense of vitality andfulfillment.

Yuhei Matsumoto
Chief Human Resource Officer,
Executive Officer
Meiji Holdings Co., Ltd.

Group Human Capital Committee Structure
Board of Directors
ReportMonitoring,
instruction

Management Meeting

The Meiji Group
Sustainability
Committee

Discussion (policy andtarget etc.), reporting

Cooperation

The Meiji Group Human Capital Committee
Chair

Meiji Holdings: CEO, President and Representative Director

Vice-Chair

Three Operating Companies: President and Representative Directors

Diversity &Inclusion
Subcommittee
52 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Human Capital
Development
Subcommittee

Health andProductivity
Management
Subcommittee

Occupational
SafetySubcommittee

The Meiji Group has emphasized internal fairness to foster a sense of togetherness since the management
integration. However, this has led to homogeneity in human capital and values, which has caused innovation to
stagnate. Therefore, we will emphasize external competitiveness and create human capital and organizations
that can win over the competition by capturing changes in business environment quickly. We will also ensure
external competitiveness by emphasizing diversity. We will incorporate diverse values into the core humancapital involved in management decision-making and increase the accuracy of our judgment of management
opportunities and risks. In this way, we will create innovation and meet the expectations of all stakeholders.
Based on this belief, we are expanding our pipeline of managers who drive the Group forward. We havebeen engaging in succession planning since 2019. The selection of the next president is currently being led by
Outside Directors in accordance with our Desired Management Human Resources (Leadership Values). In
FY2021, we started a Developing Program for Managers who Drive the Meiji Group Forward. In this program,executive officers and candidates are trained to enhance their Group management perspectives, views andmindsets. We plan to shift the focus of the program to younger employees.

Creating a Highly Effective Strategic Promotion System with
the CHRO System and Group Human Capital Committee

Considering a New Personnel System Linked to Management Strategies
We have established the Group Human Capital Committee, chaired by the CEO, in FY2022. We havestrengthened the system in which Meiji Holdings and its operating companies work together to promotestrategies. The committee has four subcommittees: Diversity & Inclusion, Human Capital Development, Healthand Productivity Management, and Occupational Safety. The discussions of each subcommittee are reported to
the Board of Directors. Outside Directors then provide advice on how to improve strategies and measures. The
CHRO system and the Group Human Capital Committee enable close collaboration between Meiji Holdings andeach operating company. This allows us to formulate and implement even more essential human capital
strategies. A major challenge going forward will be to tightly link human capital strategies with management
strategies. With this in mind, we are in the process of formulating a human capital portfolio that is in line withour business strategy. Based on this portfolio, we are currently considering a new personnel system that will
improve our competitiveness.
We are aware of the issue of sluggish growth in employee engagement scores, which is a target of the Meiji
ROESG. We will strengthen communication between employees and management to create an environmentthat is easier to work in. We will also improve engagement by increasing pride in the Meiji group and job
satisfaction. Meanwhile, we are seeing steady results in health and productivity management, which is one of
our important themes. In March 2023, we were selected for Health and Productivity Stock Selection Brand forthe first time. We will continue to promote health and productivity management as an initiative that leads tohigher employee engagement.
Outside Directors have pointed out that improving D&I and employee engagement are issues that we need
to focus on further. We will strengthen our efforts by utilizing outside knowledge.
Page 54 Human Capital Management

Raising Employee Awareness to Drive Growth
The most important management resource of the Meiji Group is our human capital. The driver of our growth is
the awareness of each employee to fulfill their own careers and to grow further. The value of human capital canbe increased depending on the efforts of a company. They are capital with unlimited potential. As CHRO, I will
do my utmost to increase this value without limits.
Meiji Holdings Co., Ltd.｜Integrated Report 2023 53

Our Initiatives to Support Sustainable Value Creation

Human Capital Management
Promoting Women’s Workplace Advancement

Strategically Investing in Human Capital, the Source ofValue Creation, and Promoting Human Capital Strategies
Based on Management Strategies

Roadmap for Promoting
Female Participation

Systems to blend
diverse values

Creating diversity

Leveraging diversity

Creating Attractive
Human Capital

The Meiji Group is currently facing two management issues. The first issue is continuing to grow in the mature Japanesemarket by providing Meiji unique value for wellness at a faster pace than ever before. The second issue is developing the
global market. We need diverse core human capital with new perspectives, technologies, knowledge, and the external
competitiveness to overcome intensifying competition and changes in the external environment. Therefore, we areworking towards the following targets to achieve this goal.

Strengthen diversity in corehuman capital consideringexternal competitiveness

Reflect new perspectives indecision-making to incorporate
the latest technology and knowledge
and find innovative ways

Active participation
regardless of gender

2050 Target

50 %Personnel Capable ofWorking Globally(Including Foreign Nationals)

Reflect a global perspective
in decision-making tocontinue to growworldwide

30% or more considered to influence the organization

30% or moreManagement training, evaluator training

New Initiatives for FY2022• Groupwide training for employees in their

Number of female leaders*1 *2

30% or more

• Enhance pre- and post-childcare leave interviews
Improve interview flows conducted before childcare leaveand before/after returning to work
Organize issues to be confirmed during interviews• Group joint female manager training(6 times, 17 participants)
Group discussions to realize Now ideas for wellness andfinal report to directors

Ratio of female managers (%) *2[Target]

420

208

237

[Target]10256

Initiatives for FY2023

Diversity in Core Human Capital

Perform to ability
regardless of gender andare active in all jobs andranks

Unconscious bias training• First Group joint networking event for female
managers (46 participants)

Meiji Group Diversity & Inclusion Policy (PDF)

Ideal Human Capital
Strategy

Promotion of mutual understanding between
employee and supervisor• Training for employees in their childcare
years and supervisors• Enhancement of pre- and post-childcare
leave interviews(174 employees in their childcare years and 53 supervisors
participated)

Expanding diversity

Mid-Career Hires

Network building support for female employees

childcare years

Discovering andexercising individuality

Women

Improve management
skill of diverse employees

Training for female managers and leaders

Ratio of female core human capital: 50%

Recruit human capitalwith a variety ofdifferent attributes

Toward Executing
Our Business Strategy

Networking events for female managers

Support participation

To Survive

Until 2050

Ratio of female corehuman capital: 50%

Supportparticipation

The Meiji Group has established a D&I subcommittee
within the Group Human Capital Committee. We
promote D&I based on the Meiji Group Diversity &Inclusion Policy through three approaches: creating
diversity, leveraging diversity, and expanding
diversity. Especially, we are focusing on diversifying
our core human capital by appointing women,
mid-career hires, and personnel capable of working
globally. We will also link D&I to strengthening ourcompetitiveness.

Supervisor

Complementary Approaches to Promote D&I and
Foster the Group Culture

Participation support for
employees in theirchildcare years (from support
in balancing work andchildcare to participation)

Until 2040

Ratio of female managers: 30%

Employee

Diversity & Inclusion (D&I)

Build awareness andleadership pipelines todirectors and managers

2024 to 2026

Enhance
mid-career hiring* Core human capital: Directors, managers, and career track employees

Until 2023

Ratio of female managers: 10%
Female leaders: 420

Human capital is the driver for the sustainable growth of the Meiji Group. We respect employees’ diversity, andmaximizing their strengths is key to our corporate activities. The Meiji Group has a Group-wide human capital
strategy under the leadership of the Group Human Capital Committee and the CHRO, who was newly establishedas the person in charge of human capital management for the Group. We are improving the diversity of our corehuman capital*, health and productivity management, and managers who drive the Group forward.

Promoting women's workplace advancement is a critical management issue for the Meiji Group, which has many female
customers. Although the ratio of female employees has been increasing in recent years, only a small number of female
employees are working in managerial or leadership positions. In-house surveys have revealed that this is due to a lack ofsupport for career advancement and anxiety about balancing work with childcare and other responsibilities. Based on theseresults, we formulated the following roadmap. We are working to enhance the awareness of women themselves and support
the participation of employees in their childcare years. We are also developing the ability to manage a diverse workforce forthe managers who support the working environment. We will strive to create a working environment in which diverse humancapital of various backgrounds can work positively regardless of gender, such as by promoting female participation.

3.7
FY2020

FY2021

FY2022

FY2026FY20204.7

FY2021

5.6

FY2022

FY2026*1 Leaders: Managers and assistant managers*2 Scope: Meiji Holdings Co., Ltd., Meiji Co., Ltd., Meiji Seika Pharma Co., Ltd.,and KM Biologics Co., Ltd.

Networking Event for Female Managers

Acquiring a Group Management Perspective and Building
Awareness Among Senior Managers
In March 2023, we held a Group joint networking event for female managers inconjunction with International Women’s Day. A total of 46 female managers
participated in the event. Women in director roles and serving as generalmanagers held panels and roundtable discussions, including Outside Director
Michiko Kuboyama. We also exchanged opinions on the theme of “how to
become a Meiji Group where diverse managers can play an active role.”
Participants commented, “It made me want to try my hand at Groupmanagement,” and “Hearing about a woman who became a general manager
while raising children helped me picture what my future career could be like.”
This initiative led efforts to gain a perspective oriented toward directors andgeneral managers and to enhance the leadership pipeline for women.

* Scope: Meiji Holdings Co., Ltd., Meiji Co., Ltd., Meiji Seika Pharma Co., Ltd., and KM Biologics Co., Ltd.

54 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 55

Our Initiatives to Support Sustainable Value Creation

Human Capital Management

Health and Productivity Management

Employee Engagement

We believe that it is important to keep our employees healthy and energized as acompany that embodies the Group slogan Now ideas for wellness. Based on this belief,
we strive to improve productivity by grasping the mental and physical health of
employees from a managerial perspective and strategically investing in maintaining
and promoting such health.

One of the goals of Meiji ROESG® Management is employee engagement (empathy with the company). Therefore, we
conduct an engagement survey every year. We monitor the results of our human capital investments through our
Employee Engagement Score. In this way, we will also focus on deepening trust between employees and the Group.

Engagement Score

Health and Productivity Management Strategy Map
The Meiji Group has defined its health and productivity management issues as “improving healthy lifestyle habits thatlead to obesity” and “maintaining mental and physical health.” The Meiji Group Health and Productivity Management
Strategy Map shows our approach to solving these issues. We implement early detection of illness and mental healthmeasures and promote healthy lifestyle habits in diet, exercise and quitting smoking. We also promote health awarenessand behavioral changes among employees and their families.

Approach to Solving Issues

Health and Productivity
Management Issues

Measures to improve dietary habits
Nutrition education, dietary habit
improvement guidance, etc.

Improvement ofhealthy lifestyle habitsthat lead to obesity

Measures to improve exercise habits

Diet and exercise

Health andProductivity Targets
Reduce obesity among
employees to prevent
lifestyle-related diseases

Programs to encourage walking,gym membership assistance, etc.

Reduction of smoking rate

Measures against smoking

No smoking during working hours,smoking cessation programs, etc.

Maintenance of mental
and physical health

Promotion of work-life balance

Reduction of long working hours, encouragement
to take consecutive annual leave, etc.

CCC
CC
C
DDD
DD

65
60

Analysis

Grades are calculated basedon survey results from athird-party evaluation
organization and are given
on an 11-point scale from
AAA to DD.

55

Workplace

Job

50

Supervisor• Employees feel that the Meiji Group has an impact and contribution to society.
• Employees work with the support of their supervisors to achieve their own goals and plans.
• Many employees feel that there are issues with internal collaboration, innovative/creative climate, and diverse work styles.
• Many employees feel there is a gap between the front lines and management; this is especially true for younger employees.

Initiatives to Enhance Engagement

Approach to Solving Issues

Major Initiatives in FY2022

KPI *Measures to improvedietary habits• Strengthen initiatives to reduce lifestyle-related diseases(high-risk individuals): Specific health guidance,
recommendations for secondary health checkups• Conduct breakfast reform seminars at sites nationwide• Regular health checkup rate
• Follow up rate for employees
subject to secondary healthcheckups*2

Measures to improve
exercise habits• Programs to encourage walking• Training challenges with support-contracted athletes• Participation rate in programs
to encourage walking*3

Measures againstsmoking• Display of posters with messages from the CEO and
COO on quitting smoking• Quit-smoking programs• Establishment of no-smoking day• Enforcement of no smoking
during work hours• Reduction of smoking rate

1

ESG Index*2 Follow up rate: To ascertain the status of the individual through medical institution examinations, *3 Participants in programs to encourage walking:interviews with industrial physicians and public health nurses, and personnel interview
All employees

New Initiatives for FY2023
In April 2023, we established health leave for various medical checkups and vaccinations. This will lead to the prevention
and early detection of illness among employees and increase the rate of secondary health checkups received.
56 Meiji Holdings Co., Ltd.｜Integrated Report 2023

FY2019 [Result]
FY2021/2022 [Result]

70

Increase employee
engagement

Major Initiatives in FY2022*1 See our website for information on KPI progress

BBB
BB
B

25 years old
and younger
26-35 years old
36-45 years old
46-55 years old
56 years old
and over
Total

Company

Based on the results of this analysis, we believe that sharing management’s thoughts and visions as well as dispelling
uncertainty about the future will lead to increased engagement.

Stress check, self-care/line care, etc.

Work-life balance

FY2023 [Target]

Degree of Satisfaction
with Each Item ofAnalysis (%)

We received a deviation score of B in FY2022. The trends observed from the analysis are as follows.

Increase employee
productivity

Measures for mental health

Mental health

AAA
AA
A

The Meiji Group is working to improve engagement through the PDCA cycle with the commitment of top management.
First, we strengthen communication of our vision from management and dialogue with those on the front lines. We also
promote communication in the workplace, and organization leaders formulate and implement action plans at each
workplace unit. Then, good practices are shared with the entire Group. In FY2023, we are proceeding with organizational
analysis and improvement proposals using a framework to create a sustainable organization at the suggestion of Outside
Director Peter D. Pedersen. Through such initiatives, the Group will create a corporate culture in which the company andemployees work together toward growth.

Enhancing Dialogue with Management

Promoting Communication in the Workplace

We held the “Let’s Talk with Top Management” event for
dialogue between management and young employees. A totalof 71 people participated in FY2022. Management commented,“I was inspired by their freshness and awareness of issues, andwant to support their new
ideas.” Participantscommented, “Being exposedto the management’s way of
thinking helped raise myawareness ofproblem-solving.”

We hold workplace meetings once every twomonths to put the Group slogan Now ideas forwellness into practice. In FY2022, we set
Group-wide themes that were discussed at each
workplace.
Major Themes in FY2022• Experiencing the health that Meiji offers• Expanding the circle of health in society andon Earth• How to work healthily

Meiji Holdings Co., Ltd.｜Integrated Report 2023 57

Our Initiatives to Support Sustainable Value Creation

Human Rights
Initiatives for Procurement of Raw Materials
The Meiji Group is working to resolve human rights issues such as child labor and forced labor associated with key raw
materials. We are focusing on the procurement of cocoa and raw milk in our Food business in particular.

Respecting the Human Rights of All Stakeholders andAchieving Sustainable Business
The Meiji Group promotes human rights due diligence based on the United Nations Guiding Principles on Businessand Human Rights. We identify high-priority human rights risks and work with internal and external stakeholders to
study and reduce these risks. We make reports and discuss progress at the Group Human Rights Meeting.
Human Rights

Initiatives to Eliminate Child Labor (Republic of Ghana)

One of the Meiji Group’s main suppliers of cocoa is theRepublic of Ghana, where child labor is a social issue. The
Meiji Group has been introducing Child Labor Monitoring
and Remediation Systems (CLMRS) for cocoa beans
procured from the Republic of Ghana since FY2021. Field
researchers visited 3,629 cocoa farmers between October
2021 and September 2022. Cases of child labor wereidentified at 20 of these farms, and efforts are being madeto correct these situations. We will continue our efforts to
expand the number of farmers visited and correct thesituation in order to eliminate child labor.

Awareness-raising

Follow up

Child Labor
Monitoring andRemediation
Systems

Case
identification

Remediation
supportAddressing Human Rights Issues in Dairy Farming

Initiatives to Address Human Rights Issues
We identified salient human rights issues along the Meiji Group’s value chain in 2019. Among these issues, we set humanrights issues in raw material procurement and human rights issues relating to foreign workers as high priority issues to beaddressed. For human rights issues in raw material procurement, we selected six important raw materials and conductedsurveys and implemented countermeasures for each issue. We also established the Meiji Group Supplier Code of Conduct
and announced it to our suppliers. At the same time, we promoted supplier evaluations through sustainable procurement
surveys. For human rights issues relating to foreign workers, we conducted surveys and interviews at each business site.
Through these efforts, we have gained an understanding of the actual employment and working conditions of foreign
workers within the Meiji Group. Accordingly, we have established the Meiji Group Guidelines for Employment of Foreign
Workers and are enhancing our efforts.

There is a chronic shortage of labor in Japan’s dairy farming industry. Therefore, various human rights issues related toforeign technical intern trainees are being closely scrutinized. In March 2023, the Meiji Group held a workshop for its
relevant departments. We are working to resolve this issue by enhancing internal education. We also collaborate withother dairy manufacturers and industry organizations such as the Japan Dairy Association (J-milk).

Establishing and Implementing Guidelines for Employment of Foreign Workers
The Meiji Group aims to create a healthy and safe working environment for foreign workers that conforms to international
standards. We established the Meiji Group Guidelines for Employment of Foreign Workers in 2022. The purpose of theseguidelines is to optimize the employment and labor management of foreign workers throughout the Group in Japan. We
encourage understanding and implementing the guidelines at our own companies and plants as well as our contractors.
Initiatives for Foreign Workers

Reviewing Human Rights Issues in the Value Chain
The Meiji Group identified human rights risks throughout the value chain in the Food and Pharmaceutical segments in
FY2022. We then reviewed salient human rights issues based on the risks we identified. As a result, we added genderequality as a new human rights issue.
DisposalJune 2022

Established the Meiji Group Guidelines for Employment of Foreign Workers which outlines important
points related to hiring foreign workers.

September 2022 toMarch 2023

Conducted briefing sessions on the guidelines for related parties within the Group and contractors.
Conducted written surveys and interviews at each business site and Group company to confirm theimplementation status of the guidelines.

June 2023

Introduced JP-MIRAI Assist, a multi-language grievance system available to foreign workers.

We will conduct written surveys and investigations at each business site and implement measures based on the results
each year going forward.

Human Rights Education Overseas

Core Areas for FY2023 and Beyond• Share awareness of issues regarding gender equality internally. Consider measures together with human resources divisions.
• Continue to prioritize rights of foreign workers. Implement measures based on the Meiji Group Guidelines for Employment of Foreign
Workers.
• Identify issues in the value chain for the rights of children, including advertising and marketing. Formulate plans to address theseissues.
• Identify suppliers with high human rights risks. Conduct engagement activities (dialogue) to reduce risks.
58 Meiji Holdings Co., Ltd.｜Integrated Report 2023

The Meiji Group provides human rights education through e-learning and ingroup sessions. The purpose of this education is to familiarize employees ofoverseas Group companies with our human rights policy and to improve theirunderstanding of human rights issues related to business. We held humanrights education at four Group companies in Southeast Asia and other regions
in FY2022 (approximately 1,880 employees participated).
Group education at
Meiji Seika (Singapore) Pte. Ltd.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 59

Our Initiatives to Support Sustainable Value Creation

Creating Innovation

Food Segment
We implement technological development and intellectual property strategies in each of the activities that comprise ourvalue chain. We are creating specific and distinctive innovations to contribute to solving social issues and customers’
healthy eating habits.

Creating Innovation from the Value Chain Based on
Meiji’s Unique Technological Development andIntellectual Property Strategies

Innovation from R&D

Innovation is an important initiative that supports the sustainable value creation of the Meiji Group. To address
specific social issues, we create innovations unique to the Meiji Group from the activities that comprise the value
chain, namely R&D, procurement, production and distribution, and sales and communication. These innovations are
based on the unique technological development and intellectual property strategies possessed by each of the Foodand Pharmaceutical segments. The results of innovation become part of the intangible assets owned by the MeijiGroup. These assets include intellectual capital such as technological assets and patents, and social capital such asbrands and trademarks. They are linked to the enhancement of corporate value and the creation of further innovation.

R&D

Social Issues
Including:Technology Assets/
Patents

Technological
Development
Strategy

Technology Assets/
Patents

Intellectual
Property
Strategy

Technology Assets/
Patents

Sourcing

Brands/Trademarks

Creating Meiji uniquevalue for wellness
through innovation
to help solve social
issues

Production andDistribution

Sales andCommunication

The Meiji Group’s Intellectual Property Strategy for Innovation

1 Both the number of patents and the technological value are

increasing; R&D investments are being converted into intellectual
property as patents

2 The number of patents is decreasing while the technological value isincreasing; R&D investments are being converted into intellectual
property more efficiently

3 The number of patents is increasing while the technological value isslightly decreasing; however, technological know-how andtrademarks are more important than patents, and technology is
becoming more segmented

60 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Changes in Patent Status of Major Categories(2017 and 2022)
1.2
Technological value of patents

The Meiji Group’s intellectual property strategy is formulated
from three perspectives: patents, technological know-how, andtrademarks. Especially, strengthening patents is an important
theme. We will grasp the current status of patents, as shown inthe diagram on the right, and create innovation by properly
promoting our patent strategy.

2 Infectious diseases

and vaccines

1.1

2022
2017
2022

1.0

1 Yogurt and

2017
0.9

0.8
50

2017

2017

2022
3 Cocoa

100

Cocoa bean
roasting/
grinding/etc.

Cocoa
Granulation, etc.
beverages
Technology area
Technology areafor extrusion
for nutritional foods
Technology
area
Water
for acidified
containing
pulverization

Technology areafor hot water
extraction underacidic conditions

Chocolatemanufacturing

Technology area withlow concentration(middle area)
Raw cocoa materials

Oil and fat blending

Products/manufacturing technologies
Using VALUENEX Radar,the Panoramic view analytics tool of VALUENEX Co.

*

Page 49 Coexisting with Nature >Creating New Value for Cocoa
through “Possibilities of cocoa”

Open/Close Strategy and Corporate Value Creation

1 Nutrition

2022

Meiji’s cocoa research* covers a wide range of activities fromraw materials to products and manufacturing technologies. Oneof the results of these efforts is the material made by straining
boiled cocoa beans. It has no bitterness although high inpolyphenols and has the potential for a wide variety of uses, notlimited to manufacturing chocolate. We analyzed this material
from a patent perspective and found it to be of high value. The
diagram on the right shows a map of all patent literatures
related to methods of processing cocoa beans andmanufacturing chocolate, based on the degree of mutual
similarity. The upper left area shows cocoa bean roasting andgrinding technologies, and the upper right to lower right areas
show a dense concentration of patent literatures related tochocolate production. However, there is no concentration ofpatent literature in the area close to where thetechnology using this material is. In other words,
this is an unexplored R&D area (the middle areawith the blue circle) which has great potential.
This material has already led to the acquisition ofpatents (Patent No. JP7186306, etc.) and thedevelopment of a new product, Cacawell.

Oil-based• Healthy diets• Super-aged society• Countermeasuresagainst infectious
diseases• Reduce CO2 emissions• Reduce environmental
impact• Secure water resources• Procure raw materials
with consideration
toward the environment

R&D and Business Creation Based on Patent Analysis

Start-up
Academia
Ventures

Water-based

Innovation Supporting
the Meiji Group’s Value Creation

R&D is characterized by a deep connection between technological development and intellectual
property strategies. We accumulate the results of R&D based on our technological development strategy
as patents and technological know-how. Furthermore, our intellectual property strategy generates R&D
activities. Both strategies contribute to solving social issues.

functional yogurt

Bubble size:
Overall patent strength

150
200
Number of patent families

250

Created by Meiji using LexisNexis® PatentSight®,
patent analytics solution tool

We are encouraging the creating innovation by transforming our
excellent in-house technological know-how into new value foraddressing social issues through our technologicaldevelopment and intellectual property strategies. One example
is Swallow Vision®. The world’s first 4D computer simulation
system for swallowing is jointly developed by Meiji Co., Ltd. and
the Japanese Red Cross Musashino Hospital. The system can beused to evaluate the swallowing characteristics of foods for theelderly. In order to widely popularize the system, we havepresented it outside the company and patented it (Patent No.
JP6022789, etc.). We have also participated in the initiatives of
the Consumer Affairs Agency. We are currently considering new
businesses to address social issues, such as proposing
measures to improve swallowing function for the elderly withweakened muscles and preventing accidental ingestion bychildren.

Simulation of Airway Obstruction by Beans ina Four-Year-Old Child
This is an example of a simulation result of afour-year-old child aspirating a bean (foreign
body in the right main bronchus). The
biological model reproduces the shape andmovement from the oral cavity to the bronchi.
The food model reproduces the shape andphysical properties of the beans. Thesemodels can be combined for simulation on thecomputer.
We produced a video visualizing
aspiration by a child based on theabove simulation“Beware of Accidents Causing Choking andAspiration of Children by Food” by theConsumer Affairs Agency (In Japanese only)

Meiji Holdings Co., Ltd.｜Integrated Report 2023 61

Our Initiatives to Support Sustainable Value Creation

Creating Innovation

Food Segment

Innovation from Procurement

Innovation from Sales and Communication

We create innovation in procurement by applying appropriate technological development andintellectual property strategies. We must secure a stable supply of raw materials such as raw milk andcocoa beans to continue our business expansion. It is also extremely important to develop technologies
that maximize the inherent value of these valuable raw materials. We build barriers to entry against
competitors by strategically managing the results of technological development in the form of patents
and technological know-how.

Innovation in Raw Milk Procurement
Heating and oxidizing odors are generated during the sterilization process of raw milk. To address this issue, we have the“Natural Taste Process” manufacturing technology. This technology improves the flavor of milk by reducing dissolved
oxygen in raw milk before sterilization. This technology is the fundamental manufacturing technology for Meiji Oishii
Gyunyu. Furthermore, the deoxygenation process, which is only performed prior to sterilization, is now also performed
during milk storage after receiving raw milk. As a result, Meiji Oishii Gyunyu has earned even higher praise for its fresh milkaroma and clean aftertaste compared to the conventional Natural Taste Process (Patent No. JP5008081, Patent No.
JP5259850).
Evolved Natural Taste Process

Deoxygenation
O2
O2

O2

2.0
1.5

O2

O2
O2

Comprehensive
evaluation
indicators

1.0

O2

O2

Good aftertaste

Clean aftertaste
Based on research by Meiji

Innovation from Production and Distribution
We create innovations by connecting these technological development and intellectual property
strategies. There are various issues that need to be solved in production and distribution. For example,
in production, there is a need to reduce energy input and develop technologies for eco-friendly
production systems. In distribution, it is necessary to develop technologies that can maintain productquality at a higher level over a long period of time and reduce food loss.

Innovation in Warehouse Storage
Adjusting Control of Warehouse Temperature Between 15°C and 23°C
Chocolate products that are combined with nuts and biscuits may have an
appearance defect called fat bloom when stored in warehouses. Thisphenomenon is caused by the gradual transfer of fat and moisture from nuts
and biscuits to chocolate, resulting in whitening and spots on the surface of the
chocolate. The warehouse where Meiji Co., Ltd. stores its chocolate products isequipped with temperature sensors in all areas, from the inside of thewarehouse to the shipping entrance. We have developed our own storage
method (Patent No. JP5464968) to prevent fat bloom by adjusting control of thetemperature between 15°C and 23°C depending on the season. This has
enabled us to maintain the delicious taste and glossy appearance of our
chocolate. These initiatives are linked to the enhancement of product value.
62 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Our trademark strategy is driven by predicting future product expansion and licensing possibilities by anticipating the
movement of business departments. We combine protection systems for various types of trademarks such as 3D
trademarks and standard character trademarks. We are protecting our brand while promoting the unique to Meiji tosociety at large.
3D Trademarks

Standard Character Trademarks

We registered 3D trademarks for Kinoko no
Yama in 2018 and Takenoko no Sato in 2021.
The original concept of these two products
is to evoke nostalgia. Product value lies inthe 3D shape itself. Therefore, protecting the
3D shape will protect
and expand thebrand value.

We registered standard character trademarks
for functional yogurt LG21 and R-1 in 2022. A
simple combination of characters is typicallynot considered to have the distinctivenessrequired for trademark registration as a
general rule. However, LG21 and R-1 met strict
requirements and were registered as
exceptions to this rule. The successful
trademark registrations acknowledges thatboth products are recognized by customers as
Meiji products by these characters alone,based on evidence of their impact on society
and their actual use.

Kinoko no Yama
Registered Trademark
No. JP6031305

Degree ofrich taste

O2

Innovation through Distinctive Trademark Strategies

Good mouthfeel

0.5
0

O2

O2

O 2 O2Evolved Natural Taste Process
Conventional Natural Taste Process

Fresh milk aroma

Deoxygenation
O2

O2 O2

Conventionally
Drinking Milk is 1

Filling

Milk storage

Sterilization

Homogeneity

Purification

Milk storage

Inspection
upon receipt

NEW!

Sensory Evaluation by Meiji’s Panel of Experts

We create innovation in sales and communication through distinctive intellectual property strategies
centered around trademark registration. We are working on trademark registration by applying
exceptions that are difficult to obtain approval for, such as shapes and letters, to maximize brand value.

Warehouses that store chocolate products havepatents on temperature control, which isessential for maintaining quality

LG21
Registered Trademark
No. JP6593374

Meiji Probio Yogurt LG21

Extending the Product Life Cycle
Our mainstay products are characterized by long periods of growth and the maturity stage in the product life cycle. One
example of this is Meiji Bulgaria Yogurt LB81. The product has established and expanded its brand image as “authentic,
traditional yogurt made with Bulgarian lactobacilli and fermentation methods” since its launch in 1973. At the same time,
we have worked on scientifically clarifying the traditional manufacturing method. We developed the “low-temperature,
reduced oxygen fermentation (smooth careful fermentation)” method and patented (No. JP3666871). This method wasawarded an Invention Award at the 2023 National
Invention Awards. We have continuously created
The Synergy Model between Patent/
new technologies to improve the flavor and physicalTechnological Know-How and Trademark
properties of yogurt through the scientific
Brand Precedence Modelclarification of this traditional manufacturing
process. We will further strengthen the trademark ofNet
Meiji Bulgaria Yogurt LB81 through the passage ofGrowthSales
Stage
Maturity Stagetime, continuous technological innovation and
Decline Stage
marketing activities. We are improving our brandIntroduction
Stagevalue over the long term in response to the social
Product Life Cycle
environment, such as “the power of nature” and“tasty and healthy.”Time
Meiji is committed to a distinctive intellectual
property model. We support businesses over thelong term by interrelating barriers to entry throughpatents and technological know-how with theintellectual property value of attracting customers
through trademarks.
Page 10 Value Creation in the Next Era Yogurt

Ability to
Attract
Customers

Barriers to
Entry

Authentic/
Traditional

Approx.
30 Years

Product Brand

Tasty and Healthy

Corporate Brand
Time

Patent 1

Patent 2

Technological Know-How (Materials/Processing/Evaluation)
Time

Meiji Holdings Co., Ltd.｜Integrated Report 2023 63

Our Initiatives to Support Sustainable Value Creation

Creating Innovation

Innovation through Intellectual Property Management

Pharmaceutical Segment

The Meiji Group’s health value is created through the product value chain, including research,development, manufacturing, and supply. We protect this value by applying for, prosecuting,
maintaining and managing patents based on our R&D strategy. In addition, we collaborate with R&D toacquire new patents and technological assets.

Innovation from R&D
The greatest driving force for creating innovation in the Pharmaceutical segment is R&D in the value
chain. We are promoting R&D that is unique to Meiji by leveraging our strengths cultivated over many
years and introducing new knowledge and technologies through open innovation. We will help addresssocial issues such as the countermeasures against infectious diseases.

R&D Strategy with Clear Targets
Our core R&D areas are infectious diseases, hematology, and immunology and inflammation. The keyword linking thesethree areas is immune control. We will create innovative new drugs related to this theme through open innovation. In
addition, we will further focus on vaccine development to contribute to the countermeasures against emerging andre-emerging infectious diseases. Meiji Seika Pharma Co., Ltd. and KM Biologics Co., Ltd. have combined and enhanced thebiotech platform technologies they have developed. We are developing new drugs and vaccines for illnesses other than
COVID-19 from these technologies.
Page11 Value Creation in the Next Era COVID-19 Vaccine

Optimizing R&D Structure through Open Innovation
The seeds for groundbreaking novel drugs are likely to be found in academia. We are optimizing our internal researchsystem to seize these opportunities. We are currently engaged in various open innovation research collaborations withacademia. Promising results are beginning to emerge from the fusion of internal and external human capital.
Meiji Seika Pharma Co., Ltd.:
Kyobashi Head Office

KM Biologics Co., Ltd.

Research center focusing on vaccines andblood plasma products, etc.

Core of networked R&D
Key to project management andcollaborative structure

Academia
Meiji Holdings Co., Ltd.:
Wellness Science Labs

Research center focusing on the biologicalevaluation of new health value, etc.

Meiji Seika Pharma Co., Ltd.:
Pharmaceutical Research Center

Research center focusing on manufacturingcompounds and biologics, etc.

Examples of Open Innovation R&D• Juntendo Educational Foundation: Joint research to develop the first-in-class cancer drugs (drugs with breakthrough mechanisms ofaction)• Kyoto University: Establishment of the Department of Immuno-Oncology PDT for the development of new cancer immunotherapy
combination therapies• Foundation for Biomedical Research and Innovation at Kobe: Joint research on the development of therapeutic agents for autoimmune
diseases• Kumamoto University: Comprehensive collaboration agreement in the research fields of vaccines, diagnostics, blood products, biologics,
and data science

Participating in Japan’s Strategy forStrengthening the Vaccine Development and Production System
In 2022, the Strategic Center of Biomedical Advanced Vaccine Research and Development for Preparedness and Response(SCARDA) was established within the Japan Agency for Medical Research and Development (AMED) based on Japan’s“Strategy for Strengthening the Vaccine Development and Production System.” SCARDA is an organization that collects
and analyzes a wide range of information related to vaccine development, and funds strategic research. The Meiji Grouphas received financial support from SCARDA to conduct “development of a live attenuated tetravalent dengue vaccine”
and “research on the modernization of the manufacturing process of smallpox vaccines.”
64 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Maximizing Product Value through Strategic Patenting
In FY2022, jointly filed patents accounted for approximately 40% of all patents held by Meiji. This is the result of open
innovation. In terms of the breakdown of patents held, we are increasingly specializing in three core areas: infectious
diseases, hematology, and immunology and inflammation. In particular, approximately 30% of our patents are in theinfectious diseases area, which is one of the
Ratio of Jointly Filed Patents Breakdown of Patents Held (FY2022)
Meiji Group’s strengths. We maintain andto Total Patents Held (FY2022)
manage the rights to these patents
appropriately in accordance with ourbusiness strategy. We strive to maximize
Infectious
the value of our products from an
Jointly
DiseaseFiled
intellectual property perspective. Going
Other
Patents
Patents
41.2%
forward, we will continue to create new
31.8%
Individually 37.8%
innovations centered around our core
Filed Patents
Hematology
62.2%
areas. To this end, we will make effective
Patentsuse of patents and technological assets
18.9%
Immunology andacquired through joint research and theCore Area
Inflammation
Patents
introduction of technology.
Patents
58.8%
8.1%

Examples of Patents Leading to Innovative Product Development
In the area of infectious diseases, which is one of the Meiji Group’s strengths, we have applied for patents for a dengue
fever vaccine (KD-382) and a six-in-one vaccine (KD2-396). Both are currently undergoing Phase I clinical studies. Recently,
the results of joint research have been steadily emerging in other core areas as well. In the area of immunology andinflammation, we filed a patent application for autoimmune disease drug (PD-1 agonist). In the area of hematology, we
filed a patent application for a bispecific antibody that is expected to be used as a cancer drug. We will continue tostrategically strengthen our patents and technological assets in our core areas through open innovation. We will alsostrongly support the development of products to provide Meiji unique value for wellness.
PatentOverview

Live virus having a bank of dengue virus attenuatedstrains, and a dengue vaccine containing same as antigens

This patent relates to the four viruses that comprise the dengue vaccine.
KD-382 is a live attenuated tetravalent dengue vaccine that is expected
to be effective against all four serotypes in a single vaccination.

Liquid sextuple vaccine composition

International Publication Number: WO2022/224966

This patent relates to the production technology of a highly stable liquid
sextuple vaccine composition. When KD2-396* becomes available, it willfurther reduce the number of childhood vaccinations and contribute topreventing the onset of disease in vaccinated individuals.

Anti-human PD-1 agonist antibody for treating or
preventing inflammatory diseases, and pharmaceuticalcomposition containing same

This patent relates to an antibody that suppresses excessive immune
response. It binds to PD-1, a molecule that suppresses immune
response, and stimulates its function. Drugs containing such antibodies
are expected to be used in the drug of autoimmune diseases.

Anti-truncated mutant CALR-CD3 bispecific antibody andpharmaceutical composition

This patent relates to a bispecific antibody. It binds specifically to both
tumor cells (mutant CALR protein) and T cells (CD3 antigen), anddamages tumor cells using T cells. Drugs containing such antibodies are
expected to be used as blood cancer drugs.

Patent No. JP6910956, Patent No. JP7232289 (divided)International Publication Number: WO2022/239820
Joint applicants: Foundation for Biomedical Research andInnovation at Kobe, National Institutes of Biomedical Innovation,
Health and Nutrition

International Publication Number: WO2022/045247
Joint applicant: Juntendo Educational Foundation* KD2-396: Hexavalent Vaccine against diphtheria, tetanus, pertussis, poliovirus, and Haemophilus influenzae type b and Hepatitis B virus

Meiji Holdings Co., Ltd.｜Integrated Report 2023 65

GovernanceDiscussion with Outside Director and Audit & Supervisory Board Member

Q

How do you assess the effectiveness of
the Board of Directors and Audit &Supervisory Board?

Mr. Pedersen: It has only been a year since I became an
Outside Director. However, my impression is that there
are always lively discussions. The Meiji Group’s Board of
Directors is very diverse. In particular, Outside Directors
ask a lot of questions at every meeting. Executive
members respond to their questions politely. This kindof operation is ideal.

Makoto AndoPeter David Pedersen

Outside Audit& Supervisory Board Member

Outside Director

Promoting Sustainability and Enhancing Corporate Value:
Achieving Both without Compromise to
Become a Company Continuously Chosen by SocietyPeter D. Pedersen has been an Outside Director since 2022, and Makoto Ando has been an
Outside Audit & Supervisory Board Member since 2017. We interviewed them about theirviews on the Meiji Group’s management. Mr. Pedersen has been involved in ESG
management research for many years. He is a sustainability expert with extensive experiencein consulting companies. Ms. Ando is a certified public accountant. She previously worked for
the Tokyo Metropolitan Police Department investigating economic crimes. She has a highlevel of expertise in risk management.

66 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Ms. Ando: The agenda of the Board of Directors haschanged compared to the past. Meiji Holdings has
further strengthened its functions over the past two to
three years to oversee the entire Group. Meiji Holdings istaking initiative and getting involved in the managementof the operating companies. There are more
opportunities to discuss the agenda in depth in terms ofwhat the Meiji Group should do. Full-time Audit &Supervisory Board Members always share detailed
information about the management situation at Audit &Supervisory Board meetings. In addition, Outside Audit& Supervisory Board Members actively visit businesssites to conduct audits. The Audit department (internal
auditing) began auditing executive member initiatives
from a corporate governance standpoint two years ago. I
believe that the Meiji Group’s Audit & Supervisory Boardis quite effective.
Mr. Pedersen: However, I feel that there are some issues
regarding the effectiveness of the Board of Directors.
These issues are related to the question “What is theoriginal purpose of the Board of Directors?” Receiving
reports from executive members and making decisions
is, of course, an important role. In addition, the Board of
Directors should hold more strategic discussions on
improving corporate value sustainably. I believe that theeffectiveness of the Board of Directors will be tested in
the future by whether or not it can do this. How canDirectors and Audit & Supervisory Board Members work
together to strengthen the Meiji Group as a company aswell as the Meiji brand? The effectiveness of the Board of
Directors will be further enhanced if more time is spentactively and freely discussing these strategies. Outside
Directors are currently discussing ways to achieve thisgoal. We will propose the creation of opportunities forfree discussion between management and executive
members. The themes for free discussion should be, forexample, how we can improve employee engagement
and what is important to the Meiji Group today.

Q

What is the Board of Directors
discussing to achieve the 2023
Medium-Term Business Plan?
Mr. Pedersen: The first page of the report submitted to
the Meiji Group’s Board of Directors always includes a
description of the positioning of the issue in a
medium-term business plan. This was the first thing that
impressed me when I participated in the Group’s Boardof Directors meetings. A medium-term business plan isthe core strategy of a company. Therefore, it is very goodthat you can clearly see how initiatives are tied to a
medium-term business plan. Based on this, we can havea targeted discussion at our Board of Directors meetings.
Ms. Ando: Achieving a medium-term business plan is
obviously important. However, I don’t think Meiji should
be too focused on that. The world today is changing very
rapidly. There are many times when things do not go as
expected. If there is a legitimate reason for not achieving
a medium-term business plan due to external or otherfactors, this will instead create opportunities to discussand consider new and different strategies. This will also
lead to stronger and more agile management.
Mr. Pedersen: That’s exactly right. The Meiji Group is adiligent company. They are strongly committed tosecurely executing their Medium-Term Business Plan.
They should be careful not to let this earnestness
backfire. A tough business environment requires
creative, out-of-the-box thinking. We should try not tofocus too much on implementing and achieving the
Medium-Term Business Plan. Losing a creative mindset
could damage the Meiji Group’s corporate value in thelong run. As an Outside Director, I will keep a close watch
to prevent such a situation.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 67

GovernanceDiscussion with Outside Director and Audit & Supervisory Board Member

Q

How are discussions going forformulating the 2026 Medium-TermBusiness Plan?
Mr. Pedersen: The 2026 Medium-Term Business Plan will
begin in FY2024. Discussions for the planning began in
December 2022. We receive regular reports and discussthem at Board of Directors meetings. The Meiji Group isformulating the plan while incorporating the opinions of
Outside Directors.
Ms. Ando: The Medium-Term Business Plan is acommitment to shareholders and other stakeholders.
Executive members seem highly aware of thiscommitment during discussions on the 2026
Medium-Term Business Plan. I can feel Meiji’s
enthusiasm to implement this new Medium-TermBusiness Plan in the future from this stage of its
formulation.
Mr. Pedersen: However, I believe something is missing in
the process of formulating this Medium-Term Business
Plan. It is the involvement of ordinary employees. The
goal is not to have them come up with innovative ideas.
Rather, I would like them to work proactively on the new
Medium-Term Business Plan with a sense of ownership.
Sharing the path that the Meiji Group should take isdesirable. Without this, employees may feel like they arebeing forced to do something to execute the Plan. This

will lead to a decline in both engagement and corporate
strength.
Ms. Ando: I believe that it would be effective to involve
employees in the creation of the new Medium-TermBusiness Plan. Also, how about providing an opportunity
to share visions for the future with employees and toincorporate various ideas from the frontline? I think it
would be good for the management team to get ideas
from these kinds of opportunities.
Mr. Pedersen: As Ms. Ando mentioned, there are various
ways to improve employee engagement. Whenformulating the Medium-Term Business Plan, themanagement team should provide a general outline ofthe direction the group should take as well as a key
points for priority strategies. Then, they should open up
the proposed Medium-Term Business Plan toemployees. Once they incorporate various opinions andideas from employees, the management team could
then give it a final polish. This process would create asense of ownership amongst employees. The
formulation of the Medium-Term Business Plan can also
be an opportunity to increase engagement.

Q

What are the corporate values
necessary to make the Meiji Groupsustainable?
Mr. Pedersen: The Meiji Group’s businesses depend
directly on nature. Therefore, nature’s ecosystem must
be sound to sustain these businesses soundly. In
addition, the Meiji Group’s businesses have a direct
impact on people’s health. We must maintain thesoundness of its customers’ lives through food andpharmaceuticals. Therefore, the Meiji Group should
pursue the following to become a sustainable company:
Contribute to people’s health while protecting thenature on which we depend and enhance corporate
value without compromise. Achieving such a virtuous
cycle is not easy. It is great that the Meiji Group iscommitted to this challenge and has expressed its
intention with the Meiji ROESG®*. However, they must
not only express their intentions, but also achieve* ROESG is a registered trademark for a management indicator developed byKunio Ito, a professor at Hitotsubashi University.

68 Meiji Holdings Co., Ltd.｜Integrated Report 2023

concrete results. Meiji products need to be evaluatedand chosen from the perspective of sustainability byboth our business partners and our customers.
Ms. Ando: Meiji must increase its fanbase to make its
products the preferred choice of consumers. Having
many people enjoy Meiji products will lead to asustainable company. Meiji will naturally becomesustainable if it can raise consumer awareness to thelevel where customers feel safe choosing Meiji products
rather than simply liking them.
Mr. Pedersen: The Meiji Group has the slogan of Now
ideas for wellness. I am a little concerned that employees
may take this too literally and think that they cannot
plan products unless they have some health value. Meiji
needs to build a solid brand in order to linksustainability to corporate value. Whether or not eachproduct has a health function is not the only criterion.
The Meiji Group must show that they are likeable andtruly think about people’s health and the future ofsociety more seriously than anyone else. That isbranding. Meiji has not achieved a corporate image thatevokes sustainability. The Meiji Group’s sustainability
initiatives are not inferior to those of leading European
companies. However, customers have not yet
understood these initiatives, which is very unfortunate.
If Meiji strengthens its communication with consumers,
it will surely be recognized as a sustainable brand.

Q

What do you consider to be thecorporate governance challenges facing
the Meiji Group?

Ms. Ando: The corporate governance of overseas Group
companies is an issue. Should the head office control
operations from Japan? Or should it allow overseas
Group companies to operate with some amount ofauthority? Meiji should set up a system to minimize risks
before the scale of the business grows too large. As one
such effort, we have created a risk management
department at Meiji Holdings and have begun building across-organizational structure.

Ms. Ando: Corporate soundness is also an importantfactor in sustainable brand recognition. The Meiji Group
has a very strong financial position. Its human capital isalso extremely sound. Meiji is able to build a sustainable
brand image because of this solid foundation.

Mr. Pedersen: The Meiji Group’s overseas business is
now in a growth phase. There will be many situations
where unexpected problems will arise. Managing global
governance is an important issue to consider going
forward.

Mr. Pedersen: It is easy to focus on practical issues suchas CO2 reduction when promoting sustainability.
However, if we focus only on practical issues, we will not
be able to escape the perception that sustainability is acost. Branding is the key to converting sustainability into
corporate value. I would like to encourage Meiji tofurther promote such positive actions in the future.

Ms. Ando: Meiji is also facing challenges in its financial
strategy. We are proceeding with the reduction ofcross-shareholdings and structural reforms. While wehave been able to use the funds we have acquired to
improve capital efficiency by buying back shares, wehave not been able to fully utilize these funds for our
next stage of growth. There are also challenges inutilizing ROIC. In mature markets, it is possible to invest
and earn a return in the short term. However, there isinevitably a lag between investment and profit

Meiji Holdings Co., Ltd.｜Integrated Report 2023 69

GovernanceDiscussion with Outside Director and Audit & Supervisory Board Member

Corporate Governance
Basic Views on Corporate Governancecontribution depending on the country or market. Using
ROIC too much to manage our business activities candisrupt business. It is important to analyze this point
carefully and manage business accordingly.

Q

What do you think about strengthening
the human capital of the Meiji Group?
Ms. Ando: Meiji Holdings created the Group Human
Capital Committee last year. As a significant
management issue, they are working to enhance andrevitalize human capital. The lifetime employment
system is now beginning to completely collapse. Under
such circumstances, it is my personal opinion that wemust accept that human capital is fluid. Human capitalmanagement should be based on the premise that
employees will come and go. Diversity is also an
important aspect of human capital. Diverse work styles
are required to promote the active participation of
women. There are many problems that can be solved bymaking working styles more diverse.
Mr. Pedersen: “Is this an organization where I can makea creative contribution?” I believe that this is an absolute
requirement for selecting a company, especially foryoung people in the future. Human capital will not beretained in an organization where employees cannot
make creative contributions or become “producers.”
Environments where employees can work with initiative
and where spontaneous innovation occurs based on thisinitiative maximize human capital. I feel that the MeijiGroup faces challenges in this regard as well. When
financial progress is tight, it is easy to get caught up in
targets and numbers. It is critical to avoid falling into avicious cycle in which both morale and engagementscores decline on the frontlines. Leaders must work
diligently to create an organization that enables every
frontline employee to make creative contributions.

Q

How do you commit to stakeholders as
Outside Directors and Audit &Supervisory Board Members?
Ms. Ando: As an Audit & Supervisory Board Member, I
will work to fulfill my duties of diligently supervising
management to solidify the foundation and minimizerisks. I will contribute to resolving issues that the MeijiGroup is currently facing, including global governanceand information security. At the same time, I will oversee
the smooth transition to IFRS. It is scheduled to be
introduced during the next Medium-Term Business Plan
period. The Pharmaceutical Segment is pursuing
strategies in response to government and administrative
policies, such as preventing the spread of infectious
diseases and economic security. I will also constantly
supervise business operations in this area to ensure that
there is no undue risk in business operations ordirection.
Mr. Pedersen: Directors are responsible for enhancing
corporate value. There is no escaping that. Shareholders
and investors will criticize us harshly if we do notenhance corporate value. We are prepared to face this.
However, companies have a variety of stakeholders. In
this context, the key is to create value over the long term
instead of focusing on short-term earnings. I am
committed to transforming the Meiji Group into such a
company.
Ms. Ando: After all, it is important to establish a brandthat is unique to Meiji. I believe that pursuingsustainability is a very effective way to achieve this.
When we talk about sustainability, we often think ofclimate change and human capital enhancement asimportant issues. However, we may think more openly
rather than considering it a difficult task andoverthinking it. An ideal future is where the Meiji Group
continues to think about and communicate what it can
do for society. Accomplishing this future would lead to
the Meiji Group being recognized as a sustainable
company by people around the world.
Mr. Pedersen: I hope that the Meiji Group will berecognized as a sustainable brand by people around theworld. Meiji can become a company group that
constantly brings new health value to society.

The Group’s governance system including the Board of Directors
is developed and operated to achieve the medium-to longterm management strategies formulated based on the Group’s
Philosophy. Additionally, the holding company, Meiji Holdings
Co., Ltd. (hereinafter, “the Company”) has also adopted thesystem of a company with an Audit & Supervisory Board tofurther enhance the objectivity and transparency of management
through the supervisory function of the Board of Directors andthe auditing function of Audit & Supervisory Board members. Our
Board of Directors is comprised of diverse directors. The Board

GovernanceInitiatives to Enhance the Corporate Governance System and Improve its Efficacy
2015

2016

2017

2018

Group
Management
Structure

2019

2020

2021

2022

2023

• KM Biologics Co., Ltd. joined the Group• Introduced Chief Officer system

Policy• Formulated Corporate
Governance Policy

Support System
for Directors’
Independence• Total number of Directors: 8• Meetings of Independent Outside Directors(Percentage of Independent Outside Directors: 37.5%)
and Auditors: 2–3 times/year• Independent Outside Directors: 3• Total number of Directors: 9(Percentage of independent• Tours of operating bases by Outside Directors
Outside Directors: 44.4%)
and Audit & Supervisory Board Members: 2–3 times/year

Nomination• Established rules of
the Nomination
Committee• Established Desired Management Human Resource (Leadership Value)• Established implementation strategy for • Appointed Chairperson of the Nomination
succession planning for the Group
Committee from among Outside Directors• Implemented succession planning

Compensation• Established rules of
the Compensation
Committee• Introduced Restricted Share
Compensation Plan

Board ofDirectors
Efficacy
Evaluation• Efficacy evaluation of the Boardof Directors (questionnaire): Once/year

Other• Revised the Corporate Behavior Charter (reconfigured as a stakeholder-specific behavior charter)• Advisory Committee for the 2026 Vision comprised of the Board of Directors: 4 times• Formulated the Meiji Group 2026 Vision• Revised Corporate
Governance Policy• Revised Corporate Governance Policy• Revised Corporate Governance Policy• Revised Corporate
Governance Policy• Revised compensation plans• Revised rules for Director and Executive Officer
compensation• Appointed Chairperson of the Compensation
Committee from among Outside Directors• Individual meetings between Chairperson of the Board
and Outside Directors: Once/year• Individual meetings between Chairperson of the Board,
Outside Directors and Outside Audit & Supervisory
Board Members: Once/year• Evaluated by a third-party assessment organization

Composition, etc. of the Board of Directors and Audit & Supervisory Board
Directors: 9(Incl. Outside: 4)

CEO*1

COO

COO

CFO

CSO

Percentage of
Outside Directors

Percentage ofFemale Directors

Number of
Board of Directors
meetings

Attendance of Outside
Directors at Board of
Directors meetings

44%

22%

19 times97%* FY2022* FY2022*1 Chairperson of the Board* Including 2 female members

Audit & Supervisory Board Members: 4(Incl. Outside: 2)* Including 1 female member

70 Meiji Holdings Co., Ltd.｜Integrated Report 2023

deliberates and decides major Group matters, and monitors
appropriately to ensure implementation. To enhance the efficacy
and transparency of the Board of Directors, we have establisheda system to reflect the opinions of Independent Outside Directors
in management.
“Corporate Governance Policy”, which defines the basic
policy regarding corporate governance of the Company, is posted
on our website.

Number of
Audit Committee
meetings

Attendance of Outside
Audit & Supervisory
Board Members at Audit
Committee meetings

15 times100%* FY2022* FY2022

Election of
Independent
Directors

6* 4 Outside Directors, 2 Outside
Audit & Supervisory Board Members

Meiji Holdings Co., Ltd.｜Integrated Report 2023 71

GovernanceCorporate GovernanceCorporate Governance System(As of June 29, 2023)

General Meeting of Shareholders
Election, Dismissal

Election, Dismissal

Meiji Holdings
Co., Ltd.

Board of Directors
Directors: 9(Incl. Outside: 4)

Nomination Committee

Audit & Supervisory Board
Audit & Supervisory
Board Members: 4(Incl. Outside: 2)

Appointment,
Dismissal, Supervision

Compensation Committee
5 Member System
Outside Directors: 4
Internal Director: 1

Audits Conducted by
Corporate Auditors

CEO, President andRepresentative
Director

ReportReportCollaboration

Collaboration
Accounting Audit,
Internal Control Accounting Auditor
Audit
Ernst & Young
ShinNihon LLC

Plans to Improve Efficacy(1) Members of the Board and Audit & Supervisory Board Members will strive to attend at least 75% of Board of Directors
meetings.
(2) As a general rule, meeting materials will be distributed in advance to facilitate substantive and lively discussion.
(3) Agenda items will be explained to Independent Outside Directors in advance as necessary.
(4) Regular meetings will be held for Independent Outside Directors and Outside Audit & Supervisory Board Members.
(5) Regular tours of major facilities will be enacted for outside officers.

Collaboration

Audit Dept.

Group Strategy Committee

Election, Dismissal

Efficacy of the Board of Directors

Meetings of Outside Directors and Audit & Supervisory
Board Members

Internal Audit

Executive Committee

Outside Directors and Audit & Supervisory Board Members met four times
during FY2022.

Corporate
Development
Dept.

• Co-Creation Center (now Wellness Science Labs) Initiatives• Milk Trade and Raw Milk Price Formation• Initiatives for Sustainable Dairy Farming and Dairy Industry• Formulation of Next Medium-Term Business Plan
• D&I for the Meiji Group and Initiatives to Promote Women’s Workplace
Advancement at Meiji Co., Ltd.

Corporate
Administration
Dept.

IFRS
Management
Dept.

Group HR
Strategy
Dept.

Risk
Management
Dept.

Corporate
Communication
Dept.

Sustainability
Management
Dept.

Intellectual
Property
Dept.

Wellness
Science
Labs

Accounting Audit, Internal Control Audit

Group Companies

Performance Results of Each Body
Board of Directors

FY2022 Number of Meetings: 19
Chairperson: Mr. Kawamura, Chief
Executive Officer, President andRepresentative Director
Members: 9 directors (including 4 outside
directors)

Performance Results in FY2022:
1. Deliberations regarding important business plans and budgets, overallmanagement strategies, significant contract agreements and the selectionof director candidates and executive officers.
2. Discussion of operating company status, efforts toward sustainability,
critical topics related to human capital, Board of Directors assessment,
confirmation of internal audit results, and the assessment and oversight ofmanagement risks.

FY2022 Number of Meetings: 15
Chairperson: Mr. Chida, Audit &Supervisory Board Member
Members: 4 Audit & Supervisory Board
Members (including 2 Outside Audit &Supervisory Board Members)

Performance Results in FY2022:
1. Attendance at principal meetings, such as of the Board of Directors andExecutive Committee, as well as inspection of critical documents.
2. Communicating and gathering information with directors, etc.
3. Exchange of information and collaboration with Audit & Supervisory Board
Members at group companies, Audit departments (internal auditing) and
Accounting Auditors.

Nomination
Committee

FY2022 Number of Meetings: 4
Chairperson: Ms. Matsumura, Member ofthe Board (Outside) Independent Director
Members: 5 directors (including 4 outside
directors)

Performance Results in FY2022:
Nomination Committee provided the Board of Directors with proposals for thenomination and/or removal of director candidates and Audit & Supervisory
Board member candidates and deliberated on the nomination or removal of
executive officers, including the president. The Committee also deliberated on
succession plans.

Compensation
Committee

FY2022 Number of Meetings: 3
Chairperson: Mr. Kawata, Member of theBoard (Outside) Independent Director
Members: 5 directors (including 4 outside
directors)

Performance Results in FY2022:
Compensation Committee deliberated on policies regarding the determinationof compensation for directors and executive officers, the amount ofcompensation, the level of compensation, etc., and reported to the Board of
Directors.

* Based on the number of proposals
made in FY2022

Sustainability
Medium- to
Long-Term Strategy(Medium-Term Business Plans,
FY Plans, Company-Wide
Policies, etc.)

Internal Control and
Risk Management
Financial Results
72 Meiji Holdings Co., Ltd.｜Integrated Report 2023

In FY2022, the following sites were visited.
• Co-Creation Center (now Wellness Science Labs)• Meiji Innovation Center• KM Biologics Co., Ltd. Headquarters, Kikuchi ResearchCenter, Koshi Production Center, Aso Production Center

Evaluation of the Board of Directors

Audit &
Supervisory Board

Board of Directors
Meeting Agenda

Site Tours by Outside Directors and Audit &Supervisory Board Members

Other

4％
3％

11％
15％

16％

34％

GovernanceOnce a year, the Meiji Group conducts an evaluation and interview regarding the role and management of the Board of Directors
and problems or issues that the Board faces, striving to improve the effectiveness of the Board of Directors.

Self-Evaluation (Once a Year)

Individual Interviews (Once a Year)• Self-evaluation by questionnaire• Target: Members of the Board of Directors• Survey items: Role and managementof the Board of Directors and issues theBoard faces.

• Individual meetings between Chairperson of the Board, Outside
Directors and Outside Audit & Supervisory Board Members• Conducted in accordance with the items of the self-evaluationquestionnaire.
• Issues and improvement measures to enhance and further improvethe efficacy of the Board of Directors are discussed.
• A discussion and exchange of opinions is held about the ideal role of
the Board of Directors for the sustainable growth of the Meiji Group.

The efficacy of the Board of
Directors is analyzed andevaluated and identified
issues are addressed.
Third-Party Assessment (About Once Every Three Years)
1. Questionnaire and interview by a third-party assessment organization
Questionnaire• All Directors and Audit & Supervisory Board Members are asked to complete aquestionnaire administered by an outside professional third-party assessment
organization.
• The questionnaire is designed with questions from the following perspectives:“Composition, roles, and functions of the Board of Directors”, “operation of
the Board of Directors and its committees", “management issues and risks”,“stakeholder relations”, “governance structure and overall effectiveness of theBoard of Directors”, etc.

• A third-party assessment organizationcompiles, analyzes and evaluates the opinions
collected through the questionnaire andinterviews without names.

* Information from FY2021 is listed as the evaluation was not administered in FY2022.
Questionnaire topics are reviewed before each evaluation.

• The Board of Directors verifies and discusses
the results of the third-party assessment
organization’s evaluation.

Interview

17％

Decisions on
Important Business
Execution

2. Analysis and evaluation by athird-party assessment organization

3. Verification of results by the Boardof Directors• Individual interviews are conducted with all Directors and Audit & Supervisory
Board Members based on the results of the survey.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 73

GovernanceCorporate GovernanceAnalysis and Evaluation of the Efficacy of the Board in FY2022

Compensation for Directors (and Other Officers)

Self-Evaluation through Questionnaire (Target: Members of the Board of Directors)

The Company calculates the amount of compensation for directors based on corporate and individual performance while referring to thelevels of other companies shown in external research. The amount will be within the limit resolved by the General Meeting of Shareholders.

A self-evaluation questionnaire was conducted in May 2023.

Self-Evaluation Questionnaire Topics
1. Roles of the Board of Directors(Setting strategic direction, overseeing company, succession
planning, discussing/reporting on business matters)
2. Composition of the Board of Directors (scale, diversity,
composition ratio of internal and external)

3. Operating status of the Board of Directors (discussion,
chairperson of the Board, secretariat, content and quality ofsubmissions and presentations)
4. Response to issues from the previous year
5. Support system for Outside Directors

Summary of Analysis and Evaluation Results, and Issues in FY2023
Based on the analysis of self-evaluations by members of the Board of Directors and performance of the Board, we have assessedthat the Board continues to operate effectively.

Evaluation of Efforts Made to Improve Issues from the Previous Year• Efforts to strengthen monitoring of the specific results and progress status for core issues of the Medium-Term Business Plan are underway.
• The Board of Directors is holding discussion on medium- and long-term issues in the process of drafting the next Medium-Term BusinessPlan.

FY2020 Issues

FY2021 Issues

FY2022 Issues

FY2023 Issues• Enhancing theimplementation of the MeijiGroup succession planning• Further improving thequality of meeting materials
and presentations• Enhancing the reporting ofbusiness operations andclarifying issues inunachieved targets• Strengthening monitoring• Stimulating Board
deliberations that take into
account revisions to the
Corporate Governance Code• Strengthening monitoring• Expanding deliberations on
medium- and long-term
issues• Selecting agenda items andimproving Board
management• Deepening of discussions
regarding medium- to long-term
management strategies forsustainable growth• Expansion of regular review andfollow-up concerning response
to medium and long-term issues
that affect corporate value

Director Compensation(Excluding Outside Directors)

Outside Director and Audit & Supervisory Board
Member Compensation

The compensation of directors (excluding Outside Directors) iscomprised of the following three components.

Only basic compensation is paid to Outside Directors and Audit& Supervisory Board Members from the perspective of their roles
and independency.

• Basic compensation, which is fixed according to the positionand duties• Performance-linked compensation as a short-term incentive
based on corporate and individual performance for theprevious fiscal year
• Share compensation as a medium- to long-term incentive thatis linked to the performance of the Meiji ROESG and the MeijiGroup’s share price trend.

Compensation Governance
The Board of Directors determines the details of the director
compensation system, corporate and individual performance
evaluation results, and the amounts of calculated compensation,
after securing the opinion of the Compensation Committee, morethan half of whose members are Independent Outside Directors.
The amount of compensation for Audit & Supervisory Board
members is determined through consultation with the members
concerned. The amount will be within the limit resolved by theGeneral Meeting of Shareholders.

Basic compensation and performance-linked compensation
is paid in cash, while share compensation is provided by allotting
shares with transfer restrictions. The Company has set theratio of fixed compensation (basic compensation) to variable
compensation (performance-linked compensation and sharecompensation) at 43-51:57-49. Specifically, the Company applies
a higher rate of variable compensation as the rank and positionof the executive increases.

Performance-Linked Compensation

Objectives

Composition of Compensation

To ensure a commitment to the Meiji Group 2026 Vision and key
indicators outlined in our Medium-Term Business Plan, and toincrease motivation towards improving performance.

• For the CEO, President and Representative Director, andCOOs, Members of the Board of the Company: Performancelinked compensation is based only on evaluations of corporate
performance, consisting of short-term performance-linked
compensation and medium- and long-term performance-linked
compensation.
• Individual performance is also added to the evaluation
items for executive officers excluding the CEO, President andRepresentative Director, as well as COOs and Members of theBoard of the Company.

Constructive Dialogue with Shareholders
Status of Dialogue in FY2022

Performance-linked
compensation
Basic compensation

51–43%

Please see the Corporate Governance Report PDF (page 14) for
details regarding “Constructive Dialogue with Shareholders.”

Fixed compensation

・Dialogue content is summarized in the IR monthly report, whichis then reported by the director in charge of IR to the Executive
Committee and the Board of Directors
・After being reported to management, the IR monthly report is thendistributed to all employees. Shareholder and investor opinions arewidely shared within the Meiji Group

Item

Details

The Meiji
ROESG
calculation
methodThe Meiji
ROESG *
PointsAverage ROE
for past 3 years(Groupstandard)

ESG

ESG

ROE

Target FY2023: 11%
or higher(external evaluation)(unique to Meiji)

Based onachievement rate
for KPI set
by external
evaluation body

• 3 KPI for social
evaluation• 3 KPI for
the Meiji Groupevaluation

5 KPIs: 1.2
4 KPIs: 1.0
3 KPIs or less: 0.8

1pt added foreach KPI achieved(Max 6pts)* For details regarding the Meiji ROESG, please refer to page 20.

Reflected insharecompensation
Performanceindicator(4) Status of feedback* ROESG is a registered trademark for a management indicator developedby Kunio Ito, a professor at Hitotsubashi University.

74 Meiji Holdings Co., Ltd.｜Integrated Report 2023

49 to 57%

(2) Main interests and concerns of shareholders

・Food segment: Impact of cost increases in raw materials and energy
costs, and measures to address them・Pharmaceutical segment: Status of COVID-19 vaccine R&D and theimpact of the NHI drug price revisions
・Overseas business・Sustainability procurement, biodiversity, human capital, DX, etc.

・Food segment: Minimize decrease in sales volume due to pricehikes
・Pharmaceutical segment: Engage in COVID-19 vaccine development
・Aggressive investment in overseas business and accelerate businessexpansion
・Providing stable and continuous shareholder returns, conducting
share buyback
・Further promotion of sustainability management, integrate
financial and non-financial information (pursue Trade-On)
・Create synergy between food and pharmaceuticals

Variable compensation

・Progress of KPIs set forth in the 2023 Medium-Term Business Plan
(Meiji ROESG®*)・FY2022 Results and FY2023 Plans
・Capital policy (capital expenditures, shareholder returns, etc.)
・ESG activity policies and initiatives(3) Major issues that the Company recognizes as issues
through dialogue with shareholders

Sharecompensation(1) Main themes of the dialogue

Corporate
performance

ROESG
Points

9 or
lower

10

11

12

13

14

15

16

17 or
higherCoefficient

50%

62.5%

75%

87.5%

100%

112.5%

125%

137.5%

150%

Type and weight

Evaluation method

Short-term *1
performance-linked
compensation (50%)

Fiscal year target
achievement rate

Medium- and *2
long-term
performance-linked
compensation (50%)

Medium- andlong-term target
achievement rate

Indicator and weight
Consolidated
operating profit(25%)

ROIC (25%)
Consolidated
operating profit(50%)

Individual performance *3
Determined according to the position and duties*1, 2, 3 Description is on next page

Meiji Holdings Co., Ltd.｜Integrated Report 2023 75

GovernanceCorporate Governance
Short-Term Performance-Linked Compensation (*1)
Directors (excluding Outside Directors) are paid short-term
performance-linked compensation in the form of compensation thatis linked to the level of target achievement for consolidated operating
profit and ROIC.
The payment amount is calculated by multiplying the coefficientcorresponding to the achievement rate for the fiscal year as shown inthe chart below.

Coefficient for Consolidated Operating Profit/ROIC
Coefficient (%)
200

Reasons for Nomination of Outside Directors and Audit & Supervisory Board Members

Medium- and Long-Term Performance-Linked
Compensation (*2)
Directors (excluding Outside Directors) are paid compensation
linked to achievement rates for medium- and long-term targets ofconsolidated operating profit. These targets are set separately fromindividual fiscal year targets.
The payment amount is calculated by multiplying the coefficientcorresponding to the achievement rate for medium- and long-termtargets. This coefficient varies between 0% and 100%.
The coefficient will be further increased when performanceexceeds medium- and long-term targets.

Compensation Based on Individual Performance Indicators (*3)
The CEO comprehensively evaluates individual performance basedon a seven-tier scale and calculates payment amounts by multiplying
the target base amount by a coefficient that ranges from 0% to 200%.

100

50

100

150

Targetachievement rate (%)

Share Compensation

Objectives

Payment Amount Calculation Method

To provide incentives to improve the corporate value of the MeijiGroup and promote the sharing of interests with shareholders
and other stakeholders.

We set the Meiji ROESG as a performance indicator. The payment
amount is calculated by multiplying the target base amount bya coefficient indicated on page 75. The Meiji ROESG is calculated
based on ROE figures and the results of ESG initiatives.

Overview
As a medium- to long-term incentive that is linked to trends inour stock, we issue transfer restricted shares that cannot be
disposed of for the three-year period following allocation (issued
once per year after the General Meeting of Shareholders). The
amount of monetary compensation claims to be granted by theCompany in order to allot transfer restricted shares fluctuates
every year according to the results of the Meiji ROESG in theprevious fiscal year.

We disclose the total amount of compensation by officer category and by compensation type, and number of eligible officers. For
directors with a total compensation of JPY 100 million or higher, we also disclose their individual amount of compensation.
The compensation amounts for each officer category as of FY2022, are as follows.
Please see “Policy on Determining Compensation Amounts and Calculation Methods” on page 29 of the “Corporate Governance Report” (PDF).

Monetary compensation
Officer category

Totalamount ofcompensation

Michiko Kuboyama

We appointed Mariko Matsumura as an Outside Director because her
extensive career as a lawyer will enable her to offer professional andinsightful advice on company management and to effectively oversee
execution of duties, thereby greatly contributing to enhancing ourgovernance. While she has never engaged in company management
other than as an Outside Director or Outside Audit & Supervisory
Board Member, we nonetheless believe she is qualified for the post
because of the above reason.

Michiko Kuboyama has vast experience related to productdevelopment and marketing through her roles at Kao having worked
in the Products Public Relations Center before serving as Center
manager and as a communications fellow in the Lifestyle Research
Department. We appointed Michiko Kuboyama as an Outside Director
because she will be able to provide valuable advice and ensure
the appropriate monitoring of business execution for our Group
from the perspective of the consumer and a diverse range of otherperspectives, thereby greatly contributing to the enhancement of ourgovernance. While she has never engaged in company management
other than as an Outside Director or Outside Audit & Supervisory
Board Member, we nonetheless believe she is qualified for the post
because of the above reason.

Masaya Kawata
As President and Representative Director & Chairman and
Representative Director of Nisshinbo Holdings Inc., he has promoted
the company’s group and global management. We appointed Masaya
Kawata as an Outside Director because his extensive experience,
track record, and vast knowledge related to business management
will enable him to provide valuable advice and ensure theappropriate monitoring of business execution for our Group, thereby
greatly contributing to the enhancement of our governance.

Peter David PedersenPeter David Pedersen has provided advice on sustainability
management to the Company as an outside expert on the Company’s
ESG Advisory Board. He has abundant experience at environmental
and CSR consulting firms along with deep insights in sustainability
management at the global level and training of next-generation
leaders. We appointed him as an Outside Director, expecting that
he will provide helpful advice on the Group’s management andappropriately supervising the execution of its business operations
based on the above experience and insights, thereby greatly
contributing to strengthening our corporate governance.

Performance-linked
compensation

Basic compensation
Total
amountNumber of
eligible
officers

Hajime Watanabe

Makoto Ando

Hajime Watanabe has a prolific career as an attorney at law and has
deep expertise in international business transactional law areas.
Due to the reasons above, we appointed him as an Outside Audit& Supervisory Board Member. While he has not been involved incorporate management in the past, except as an Outside Director oran Outside Audit & Supervisory Board Member, we have concluded
that he will be able to perform his duties appropriately as an Outside
Audit & Supervisory Board Member for the reasons mentioned above.

Makoto Ando has built a prolific career and gained deep expertise inboth the private sector, working in major audit firms and accounting
firms in Japan and overseas as a certified public accountant, andthe public sector. Thus, we appointed her as an Outside Audit &Supervisory Board Member. While she has not been involved incorporate management in the past, except as an Outside Director
or an Outside Audit & Supervisory Board Member, we haveconcluded that she will be able to perform her duties appropriately
as an Outside Audit & Supervisory Board Member for the reasonsmentioned above.

Share compensation

Total
amountNumber of
eligible
officers

TotalamountNumber of
eligible
officers

Directors excluding Outside Directors

JPY 265 mn

JPY 132 mn

5

JPY 78 mn

3

JPY 54 mn

3

Audit & Supervisory Board Members
excluding outside Audit & Supervisory
Board Members

JPY 60 mn

JPY 60 mn

2

―

―

―

―

Outside Directors

JPY 62 mn

JPY 62 mn

4

―

―

―

―

Outside Audit & Supervisory Board
Members

JPY 29 mn

JPY 29 mn

2

―

―

―

―

Total

JPY 418 mn

JPY 285 mn

13

JPY 78 mn

3

JPY 54 mn

3* 1. As per the resolution of the 1st Ordinary General Meeting of Shareholders held on June 29, 2010, the amount of compensation for directors is capped at JPY 1
billion per year (not including the employee portion of compensation for directors who concurrently serve as employees).
2. As per the resolution of the 1st Ordinary General Meeting of Shareholders held on June 29, 2010, the amount of compensation for Audit & Supervisory Board
members is capped at JPY 300 million per year.
3. The Company introduced a transfer restricted share compensation system for directors other than Outside Directors. As per the resolution of the 8th Ordinary
General Meeting of Shareholders held on June 29, 2017, the amount of compensation under this plan is capped at JPY 200 million per year.
4. The amount for share compensation indicates the amount appropriated during the current fiscal year (recorded in expenses).

76 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Mariko Matsumura

Outside Audit & Supervisory Board Members

Disclosure of Director Compensation (FY2022)*

Outside Director

Succession Planning for the CEO and Other Top Executives
Initiatives in FY2022
In the January 2023 meeting, the Nomination Committee
deliberated on three key proposals: “the nomination anddismissal of the current CEO,” “the nomination of CEO successor
candidates,” and “ initiatives related to management personnel
pool.”
Additionally, such topics as “identifying potential
successors for the Presidents of major operating companies”
and “importance of discussions regarding the qualities anddevelopment strategies particularly required for future
Presidents of major operating companies” were discussed.
As future issues, the Nomination Committee acknowledges
the need to “strengthen the monitoring of President successor
candidates” and “ensure the effective implementation of various
measures for the early and planned development of managers
who drive the Group forward” and is committed to working
toward improvement.

Nomination
Committee

Board ofDirectors

Deliberation

Determining
succession
planning
development
policies

Nomination
Committee
Deliberation on
the following• The nomination and dismissalof the current CEO• The nomination of CEO
successor candidates• Initiatives related to
management personnel pool

• Group Philosophy• Code of Conduct• Desired Management Human Resources (Leadership Value)
Meiji Holdings Co., Ltd.｜Integrated Report 2023 77

GovernanceCorporate Governance

Cross-Shareholdings Shares

Features of the Meiji Group Corporate Governance

Ownership Policy

Approach to Group Governance System

The Group does not hold shares that are not recognized ascontributing to sustainable growth and improvement ofcorporate value over the medium- to long-term, taking into
consideration the necessity of business operations.

We hold listed shares as cross-shareholdings when we think
it would:

The Company is working toward reducing cross-shareholdings by 30% from the end of FY2020 on a book value basis during the2023 Medium-Term Business Plan period.

The Group has adopted a holding company system inwhich group companies operate businesses under theholding company’s control. The main role of the Company
is to promote Group-wide management strategies, create
an optimal operating structure, and oversee the business
management of operating companies.
The Meiji Group has introduced a Chief Officer system
to strengthen the Group’s operational execution in order toachieve the medium- to long-term management strategies
formulated based on the Group’s Philosophy.
Serving in the highest positions of responsibility within
the Group, Chief Officers supervise and oversee Groupbusiness or functions. The Group Strategy Committee,

2 Verification results at the Board of Directors and reduction results in FY2022

Chief Officer Management System

1. Accelerate the group’s financial operations
2. Strengthen the relationship with our group companies
3. Strengthen the group’s transactional relationships
4. Be reasonable in light of our responsibility to shareholders

Status of Cross-Shareholdings Shares
1 Reduction plan for the 2023 Medium-Term Business Plan (FY2021-FY2023)

Every year, the Board of Directors reviews all the brands theGroup holds and determines whether the Company should
continue holding them or dispose of them. For each brand,
the Board considers the following factors:
・The rationale for holding the brand・The transactions for the brand in the past year
・The medium- to long-term outlook for the brand・The amount of dividend
In FY2022, the second year of the 2023 Medium-TermBusiness Plan, the Company sold as follows:・All Shares Sold: 2 brands・Partially Sold: 10 brands
・Holdings Maintained: 30 brands

As a result, for the cumulative two-year period throughFY2022, the Meiji Group’s cross-shareholdings have been
reduced by 21.4% from the end of FY2020. The total amountfor cross-shareholdings recorded to the balance sheets as ofthe end of FY2022 was equivalent to 7.8% of consolidated net
assets.

Approach to Exercising Voting Rights on Held Shares
As a rule, we will exercise our voting rights in line with thewishes of the stock issuing company’s Board of Directors.
However, we will decline to do so if we think that it would
negatively impact the business relationships with theGroup or if it would clearly harm the common interests ofshareholders.
When a company holding Meiji shares for strategic
purposes (cross-shareholding company) indicates theintention to sell the share, we do not interfere with the sale ofthe share.

78 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Percentage of Reduction in the Meiji Group’s Cross-Shareholdings (Cumulative Basis)
(%)

30.0

30

comprised of Chief Officers, determines the directionof Group matters to advance Groupwide management
strategies. The Executive Committee, chaired by the CEO
and President, deliberates and decides on key issues related
to business execution, and executes business promptly andappropriately.
In addition, a new position of CHRO has been created in
the Chief Officer position in FY2023. As head of the Group’s
human capital strategy and human capital management,
CHRO is responsible for strategic planning to sustainably
enhance corporate value, and will formulate, promote andmonitor strategies related to human capital for the entire
Group.

Meiji Holdings Co., Ltd.
CEO andPresident

COO

COO

(Food Segment)(Pharmaceutical Segment)

21.4

20

Meiji Co., Ltd.

Meiji Seika
Pharma Co., Ltd.

KM Biologics
Co., Ltd.

President

President

President

10.0

10
0

End of FY2020(Standard)

FY2021

FY2022

FY2023(Target)35

CFO

Management andaccounting
departments

Management andaccounting
departments

Management andaccounting
departments

Management andaccounting
departments

CSO

Sustainability-related
department

Sustainability-related
department

Sustainability-related
department

Sustainability-related
department

CHRO

Human capital
strategy and personnel
departments

Human capital
strategy and personnel
departments

Human capital
strategy and personnel
departments

Human capital
strategy and personnel
departments

30

CEO (Chief Executive Officer)

20

COO (Chief Operating Officer)

25
15

10We do not engage in transactions that would interfere

Oversees management of the entire Group
Oversees the business execution of the Food andPharmaceutical segments

5 Group and shareholder common interests, includingwith0transactions
with cross-shareholding
companies 2024.3.31
without
2021.3.31
2022.3.31
2023.3.31
sufficiently validating the economic feasibility of thetransaction.

CFO (Chief Financial Officer)

Oversees the Group’s financial strategy and business
management

CSO (Chief Sustainability Officer)

Oversees the Group’s sustainability business strategy
and sustainability activities

CHRO (Chief Human Resource Officer)

Oversees the Group’s human capital strategy andhuman capital management

Performance Results at Group Strategy Meetings
The Group Strategy Meeting was held by Chief Officers in FY2022 as follows.

Group Strategy
Committee

Number of Meetings in
FY2022: 13

Main Discussion Topics in FY2022:• Medium- to Long-Term Management Strategies• Human Capital Management• Future Policy for Core Businesses• Key Strategies and Results for FY2022

Meiji Holdings Co., Ltd.｜Integrated Report 2023 79

GovernanceCorporate Governance

Sustainability GovernanceIntellectual Property Governance

Basic Views

Intellectual Property Strategy

As food and health professionals, the Meiji Group contributes to addressing social issues through our business activities, and to realizing
a future in which people can live with good health and peace of mind. We aim to achieve sustainable growth and increase corporate
value over the medium- to long-term.
We have established the Group Sustainability Committee, which reports its discussions and performance results to the Board of
Directors. Furthermore, the Chief Sustainability Officer (CSO), oversees sustainability initiatives across the entire group and works
to integrate business operations and sustainability efforts. In addition, the ESG Advisory Board provides advice from outside expertson the Meiji Group’s initiatives and exchanges opinions with the CEO, CSO, and other internal members to strengthen efforts towardsustainability.

Implementing Intellectual Property Strategies Aligned with the Business Characteristics of Food andPharmaceuticals from the Perspectives of Patents, Technological Know-how, and Trademarks

Board of Directors
Executive Committee

The Meiji Group’s Intellectual Property Governance System

The Meiji Group
Sustainability Committee

ESG Advisory Board(2 times/year)(2 times/year) *Sustainability Secretariat Meeting (1 time/year)• Executive Director: CSO, Meiji Holdings Co., Ltd.
• Secretariat: Sustainability Management Dept., Meiji Holdings Co., Ltd.
Meiji Holdings Co., Ltd.

Meiji Co., Ltd.

Meiji Seika Pharma Co., Ltd.

KM Biologics Co., Ltd.

Relevant departments

Corporate
Development Dept.

Corporate
Development Dept.

General Affairs Dept.

Promotes concrete policy planning and implementation at meetings in each area
Group Environmental
Meeting

Group Human Rights
Meeting

Group TCFD
Committee

etc.

* Chairperson: CEO, President and Representative Director, Meiji Holdings Co., Ltd.
Vice-Chairpersons: President and Representative Directors of three operating companies

Key Discussion Topics and Opinions at Group Sustainability Meetings(September 2022 and February 2023) (Excerpts)
Progress in Response to the Meiji ROESG Management

Progress of Sustainability Activities in FY2022• Evaluations from ESG evaluation organizations have been steadily
improving. At this stage, we are receiving ratings that exceed ourtargets.
• In addition to ROE, we were able to demonstrate our focus on ESG
both internally and externally. We are advancing our efforts to reachour target of evolving our ESG to align with improving ROE.

• The Meiji Group’s sustainability activities extend from E(Environment) to G (Governance) to S (Society). We recognize
sustainability activities related to Society as activities that help us
be more outwardly focused, teaching us the value of society. We
should carefully address social norms related to human rights,
procurement and the demands of society.
• To date, the Meiji Group’s communication regarding sustainability
has been weak. We must strengthen our communication not only
about our merchandise, but about the Group as a whole to enhancethe value of the corporate brand.

Key Discussion Topics and Opinions from the ESG Advisory Board(August 2022 and January 2023) (Excerpts)
Future Global Expansion

Development of Meiji’s Nutritional Profiling System• We should strengthen cooperation with the leaders of overseas
group companies and work to achieve profit growth andsustainability initiatives on a global scale.

• It is essential to create a narrative about how it connects tocustomer value.
• We hope for collaboration from government and other companies
to establish unified and easily understandable standards.
• A key area where sustainability and revenue generation are likely to
be directly linked.

About the Integrated Report 2022
• It is crucial to demonstrate the link between sustainability activities
and business value and to present our Value Creation Story that ischaracteristic of the Meiji Group.
Stakeholder Dialogue Sessions

80 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Intellectual property (IP) is one of the most important management resources for improving corporate value over the mediumto long-term. The Meiji Group implements an IP strategy that provides value for wellness and helps solve social issues. While
respecting the IP rights held by third parties, we are implementing our IP strategy following three perspectives: (1) obtain patents
strategically; (2) manage technological know-how; and (3) utilize trademarks that are unique to the Group. This way, we willrealize our Group slogan, Now ideas for wellness.

The Meiji Group has established a new overall controlling organization for intellectual property strategy from FY2023.
The newly established Intellectual Property Strategy Department will drive the formulation and execution of the Group’s
intellectual property strategy, aligning with the Company’s medium-term targets. Additionally, we will build a governance system
for the Group’s intellectual property to ensure that the formulation and execution of intellectual property strategy is conductedunder the appropriate oversight of the Group’s Board of Directors.
Furthermore, the newly established Intellectual Property Strategy Department will be responsible for the Meiji Group’s
important intellectual property activities. This includes building a patent portfolio based on the Group’s long-term perspective incollaboration with the Wellness Science Labs and managing trademarks, particularly corporate trademarks, which are common
across the Group. Moreover, to advance intellectual property activities, we will implement resource management for intellectual
property specialists, essential for nurturing and optimally placing these specialists within the Group.
On the other hand, the intellectual property departments within the Food and Pharmaceutical segments will collaborate with
our Intellectual Property Strategy Department to develop and execute intellectual property strategies that are aligned with eachsegment’s business and R&D strategies.

Meiji Group Intellectual Property Department Organizational Structure (from April 2023)
Meiji Holdings Co., Ltd.

Meiji Seika PharmaCo., Ltd.

KM Biologics
Co., Ltd.

Intellectual Property
Department

Intellectual Property
Department

Intellectual Property
Department

PatentDepartment

PatentDepartment

TrademarkDepartment

TrademarkDepartment

Meiji Co., Ltd.
R&D Div.

Intellectual Property Strategy
Department (New)• Structure intellectual property
governance• Development and disseminationof intellectual property
strategies for the entire Group• M&A (intellectual property)
support, human capitaldevelopment policy• Trademarks (corporate brand)• Wellness Science Labs
intellectual property

Patents, clearances,contracts, training
implementation

Patents, clearances,contracts, training
implementation

Promoting a Sense of Ownership Surrounding
Sustainability among Employees• Creating and disseminating a sustainability slogan is vital.
• Bold initiatives such as a Sustainability Week and the appointmentof a Chief Future Officer (CFO) to encourage deep thinking andexecution of sustainability within the organization.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 81

GovernanceRisk Management
Basic Views

Business Risks

The Group recognizes that risk management is not just for responding when emergencies or disasters occur and severely impact
business activities. It is also important to take preventive measures to control and mitigate/avert risks.

Risk Management System
The Group established a risk management system that
supports further growth to achieve the Meiji Group 2026
Vision. Under this risk management system, we identify
overall Group management risks, reduce risks, and manage
appropriate risk-taking.
A Risk Management Department has also been establishedto strengthen Group-wide risk management. The Executive
Committee evaluates and confirms Groupwide management
risks in line with the Group Vision and the risk control status
and reports them to the Board of Directors, which evaluatesand supervises the system. Thus, we can manage risks byadapting to changes in our operating environment.
Furthermore, we have established risk management
systems that are suited to the Food and Pharmaceuticalsegments, respectively. We regularly share risk information
across the Group, which includes risks common to all of ourbusinesses and risks that have impacts on the whole Group.
Accordingly, we identify, evaluate, address, and solve risks
promptly.
The executive officer in charge of the Risk Management
Department reports to the CEO.

Evaluate/supervise

Opinion/instruction

Evaluate/confirm

Executive Committee
ReportRisk Management Dept.
ManageCompliance & Risk Management
Committee

Meiji Seika Pharma Co., Ltd.
Compliance & Risk Management
Control Committee

KM Biologics Co., Ltd.
Risk Compliance Committee*• Abandon to launch planned product• Changes in customer lifestyles and values• Negative rumors about the Group’s corematerials (milk, cocoa, etc.)• Establish solid Proofs of Concept (POC)• Gather information on market trends• Develop products that are friendly to the environmentand society• Create products and services unique to the Meiji Group
that address social issues• Appropriately disseminate relevant information about
products and materials

The majority ofprofits comesfrom specificproducts• Sluggish sales of products that account for aconsiderable portion of sales and profits• Implement promotions that maximize unique value• Improve product portfolio management• Explore new markets and new business domains

Supply chains• Insufficient or excess procurement or priceincreases of raw materials• Difficulties in procuring raw milk
• Cessation of production due to production
problems, etc.
• Unstable product supplies due to distribution
problems• Gather information on raw materials markets andpromote procurement strategies• Diversify suppliers and consider alternative materials• Strengthen coordination between production and sales
divisions• Improve distribution efficiency through laborsaving/
automation

Technologicaladvances• Insufficient adaptation to rapid advances indigital technologies• Discovery of innovative treatment methods,
manufacturing methods and formulation
methods• Consider introducing new technologies as early as
possible• Research new manufacturing and formulation methods,
and search for alliances

Laws andregulations• Revisions that significantly impact corporate
activities• NHI drug price revisions• Obtain information about system revisions early andimplement countermeasures• Make appropriate approaches to relevant government
authorities• Expand portfolio of products that are not affected by NHI
drug price revisions

Overseas
expansion andoverseas Group
companies• Rapid changes in society, or outbreaks of war
or terrorism• Revisions of the systems that greatly exceed
expectations in various countries• Gather information, and investigate and implement
countermeasures early• Create product supply systems from multiple locations

Business plans,etc.

• Failure to achieve the Visions or Medium- TermBusiness Plans due to change in businessconditions• Growth slowdowns in core business, or failure
to achieve targets for overseas markets or new
business domains• Impairment losses on non-current assets or
goodwill• Fluctuations in foreign exchange or interest• Enhance unique value and search for new value• Provide unique value and health value• Manage business portfolio from the perspectives of
profitability, growth and productivity• Strengthen decision-making and monitoring ofinvestment and M&A plans appropriately• Use foreign exchange contracts and borrow at fixedinterest rates

Ascertain, review
Response measures,confirm

Meiji Co., Ltd.

Please see page 44 of
the “Annual Securities Report (FY2022)” (PDF).

The Group Business Management Risks
We appropriately identify risks and develop countermeasures considering the risk impact from a company-wide business
management perspective. In this way, we not only minimize risks, but also achieve sustainable growth and gain new growth
opportunities.
We outlined the three visions—the Business Vision, Sustainability Vision and Management Foundation Vision — in the MeijiGroup 2026 Vision. We have identified the Meiji Group Business Management Risks based on those three Visions.
Among the matters related to the status of business, accounting, etc. as described in the annual securities report, the mainrisks that management recognizes as having a significant impact on the financial position, operating results and cash flows of theconsolidated companies are as shown on the next page.
The future risks outlined in the table are categorized based on our medium- and long-term management strategies. We have assessed their importance to the Group,
taking into account the likelihood of occurrence and the level of impact on the Group.
The information represents risks recognized by the Group as of the date of submission of the annual securities report. These risks are not a comprehensive
representation of all the risks related to our businesses.
The signs below in the table show the change in risk awareness.
: slightly increase → : no change↑ : increase$$: Risks of greater importance

The Board of Directors selected the following priority initiative topics for FY2022 relating to Group business management risks
and confirmed the initiatives of each operating company.
1. Identification of risks in China
2. Spread of innovative treatment methods, manufacturing methods, and formulation methods

82 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Importanceto the
Group

$$

$$

$$

$

$

$

$

$: Risks of great importance

Sustainability-Related Risks

Risks
Caring for theEarth• Environment friendliness in corporate
activities

Please see pages 4 and 5 for the Meiji Group 2026 Vision.

Priority initiative topics for FY2022:

Countermeasures

Sale and supplyof products andservices

Board of Directors
ReportAscertain/review/
instruct
Risk reduction
measures

Risks

Change in risk
awarenessfrom previous
year

Change in risk
awarenessfrom previous
yearCountermeasures

Importanceto theGroup• Reduce CO2 emissions and prevent fluorocarbon
leakage, promote energy conservation activities, expand
installation of solar power generation facilities, utilize
renewable energy sources, promote internal carbon
pricing, ensure proper wastewater and industrial waste
disposal, advance environmental management incompliance with ISO 14001• Promote recycling of plastic resources• Comply with policies related to the environment$

Climate change• Address climate change• Analyze climate change scenarios according to the TCFD
framework, formulate strategies and release information$

Thriving
Communities• Sustainable raw material procurement• Consider human rights and human rights
issues• Understand diversity and use a diverse
workforce effectively• Increase the ratio of sustainably procured raw materials,
such as cocoa beans and palm oil• Strengthen cooperation and collaboration with dairy
farmers and other suppliers• Address challenges of human rights based on due
diligence• Create organizations and cultures that value diverse
perspectives and abilities• Strictly comply with policies, guidelines, etc. related to
procurement, human rights, society$

Meiji Holdings Co., Ltd.｜Integrated Report 2023 83

GovernanceRisk Management

Strengthening Incident Response

Management Foundation-related Risks

Risks

Countermeasures

Change in risk
awarenessfrom previous
year

Importanceto theGroup

Corporate
Governance• Make business decisions in a timely andappropriately manner• Internal or external non-compliance• Improve effectiveness of the Board of Directors• Enhance corporate governance systems• Educate on compliance and the use of social media basedon the Meiji Group Code of Conduct, ensuring thoroughcommunication of policies within and outside the Group

Damage to the
Meiji brand• Product recalls or withdrawals from themarket due to quality defects or unexpectedside effects of pharmaceuticals, etc.
• Unexpected harmful rumors about the Groupor products• Pursue quality and safe
• Communicate appropriately with each stakeholder

Human capitaland culture• Recruit and develop human capital requiredfor corporate growth• Employee engagement• Effects of business environment on
productivity• Appropriately implement succession planning• Improve employee training• Implement measures based on employee engagement
survey results• Strengthen the promotion of health and productivity
management and establish common occupational safetysystems across the Group$

Information
asset leaks• Information leaks and system shutdowns due
to unauthorized access, etc.
• Data breaches due to inappropriate systemmanagement• Strengthen information management systems andinformation security• Strengthen education on information management andcomply with regulations and policies$$

Disaster,emergency
or otherunforeseen
circumstances• Temporary or full suspension of business
operations due to disasters, pandemics orother unexpected emergencies• Increases or decreases in product demand
due to changes in business conditions in an
emergency• Develop business continuity plans and risk management
plans for swift recovery• Maintain a broad product portfolio across the Group$$

The Meiji Group has created an Incident Response Procedure to prevent incidents before they occur if a security threat is detected
as well as to prevent the spread of damage in the event an incident occurs. Specifically, we have established a CSIRT* structure
within each operating company and implemented various measures, including outlining a response flow, conducting training,
and working to further strengthen coordination between operating companies. This helps ensure business continuity andincrease society’s trust in the Meiji Group.
* CSIRT (Computer Security Incident Response Team):
The name of the dedicated organization for monitoring security issues on computers and networks within the organization, and conducting cause analysis andidentifying the scope of impact in the event an issue is discovered.

CSIRT Structure Example: Meiji Co., Ltd.
meiji-CSIRT Structure
Risk Management Dept.,
Meiji Holdings Co., Ltd.

Meiji Group Information Security Policy

Workgroups
Secretariat
Digital Promotion
Division
Digital Strategy
Dept.

Consult on
response

Group companies
External
specializedorganizations• Information gathering• Vulnerability diagnosis• Incident response
training• Reoccurrence
prevention advice

Meiji Seika Pharma Co., Ltd. and KM Biologics Co., Ltd. have also established similar CSIRT structure.

Event registration
phase
Event detection/
reportingManagement Structure

Incident registration & triage(prioritization)

Incident registration
Confirmation of facts

The Meiji Group recognizes information security as a business risk. The Executive Committee evaluates and confirms the state of
information security management and submits reports to the Board of Directors, which oversees the evaluation and monitoringof this structure. We also establish relevant committees within each operating company to strengthen information security andensure an effective information security structure. In the event of a serious incident or other emergency situations related to
information security, the executive officer in charge of the Risk Management Department submits reports directly to the CEO.

Event registration

Primary response

To improve information security awareness, we regularly conduct employee education and training concerning information
security.
Education / training content

FY2021 results

FY2022 results

Rate of new employee training

100% (162 people)

100% (168 people)

Rate of e-learning education

85%

88%

Incident judgment
Primary response
Preservation of records

Emergency contact
level judgment

Employee Education

Other initiatives

Collaborate

Incident Response Procedure

The Meiji Group understands the importance of ensuring the security of customer personal information and other information
assets. With this in mind, we have outlined the Meiji Group Information Security Policy along with various related rules andguidelines that we apply towards ensuring and enhancing information security.

Suspicious email / targeted email
attack response training numbers

Collaborate$

Basic Policy

Information Security
Committee
meiji-CSIRTCollaborate

Pharmaceutical segment:
Meiji Seika Pharma Co., Ltd., KM Biologics Co., Ltd.

Issues and Initiatives Regarding Information Security Systems and Cyber Risk

E-learning details

Compliance &Collaborate
Risk Management
Committee

ReportSeverity level judgment

Investigation/
response

Response/
recovery

Evaluate/decide on
response policy

Evaluate/decide on permanentmeasures & recovery guidelines

External response/
provisional measures

Implement permanentmeasures, recovery

Investigation/
cause analysis

Closure judgment

Information
sharing

ClosureCybersecurity Response
The Meiji Group conducts vulnerability assessments on its web servers, networks and other IT environments, including simulated
cyberattacks by security vendors, to continuously enhance cybersecurity.

About risks and measures related to email and internet use(Example) Targeted attack email and cyberattacks that occur at other companies
11,217 people

3,578 people*

Companywide warnings and one-point lessons about matters such as suspicious
emails pretending to be a business partner or Meiji Group employee* Implemented for randomly selected participants

84 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 85

GovernanceDirectors and Audit & Supervisory Board Members (As of June 29, 2023)
Members of the Board

Kazuo Kawamura

Daikichiro Kobayashi

Katsunari Matsuda

Masaya Kawata

Michiko KuboyamaPeter David Pedersen

Chief Executive Officer
President and Representative Director(Corporate Development Dept.,
Group HR Strategy Dept.,Intellectual Property Dept., andWellness Science Labs)

Chief Operating Officer(Pharmaceutical Segment)
Member of the Board andExecutive Officer

Chief Operating Officer(Food Segment)
Member of the Board andExecutive Officer

Member of the Board Independent Director

Member of the Board Independent Director

Member of the Board Independent Director

Significant Concurrent Positions

Significant Concurrent Positions

Significant Concurrent Positions

Outside Director, Central Glass Co., Ltd.

Outside Director,
Sumitomo Mitsui Banking Corporation
Outside Director, Kura Sushi, Inc.

Representative Director, NPO NELIS
External Director,
MARUI GROUP CO., LTD.

*1

*2

*2

*1 Oversees management of entire Group*2 Oversees business operations for Food segment and Pharmaceutical segment

Audit & Supervisory Board Member

Koichiro Shiozaki

Jun Furuta

Mariko Matsumura

Hiroaki Chida

Takayoshi Ohno

Hajime Watanabe

Makoto Ando

Chief Financial Officer*3
Member of the Board andSenior Managing Executive Officer(Corporate Administration Dept.,
IFRS Management Dept., andRisk Management Dept.)

Chief Sustainability Officer*4
Member of the Board andSenior Managing Executive Officer(Corporate Communication Dept. and
Sustainability Management Dept.)

Member of the Board Independent Director

Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberAudit & Supervisory Board
Member Independent Director

Audit & Supervisory Board
Member Independent Director

Significant Concurrent Positions

Significant Concurrent Positions

Attorney at Law/WATANABE & SHIMIZU
Audit & Supervisory Board Member,
LOGISTEED, Ltd.

Certified Public Accountant/Ando Certified Public Accountant
Joint Office
Unaffiliated Auditor,
Nippon Concrete Industries Co., Ltd.
External Director, INV Inc.

*3 Oversees Group financial strategy and operational management*4 Oversees Group sustainability strategy and sustainability activities

Overview of Directors
Category

Members of
the Board

Audit &
Supervisory
Board Member

Significant Concurrent Positions
Attorney at Law/Shinwa Sogo Law Offices
Outside Statutory Auditor,
Fund Creation Group Co., Ltd.
Audit & Supervisory Board Member,
Komatsu Ltd.
Outside Member of the Board,
SODA NIKKA CO., LTD.

OutsideAttendance at meetings
in FY2022

Appointment

Number of
the Company’s
shares held

Kazuo Kawamura

June 2012

101,265 shares

19 / 19

Daikichiro Kobayashi

June 2014

36,589 shares

19 / 19

Katsunari Matsuda

June 201835,482 shares

19 / 19

Koichiro Shiozaki

June 2015

36,339 shares

19 / 19

Jun Furuta

June 2014

21,947 shares

19 / 19

Mariko Matsumura

June 2018

1,507 shares

17/ 19Masaya Kawata

June 2021

1,377 shares

19/ 19Michiko Kuboyama

June 2021

688 shares

19/ 19Peter David Pedersen

June 2022

266 shares

14/ 14*5

Hiroaki Chida

June 2021

7,888 shares

19/ 19

15/15

Takayoshi Ohno

June 2021

7,135 shares

19/ 1915/15

Hajime Watanabe

June 2013—19 / 19

15/15

Makoto Ando

June 2017

7,216 shares

19 / 19

15/15

Name

*5 Attending since appointment on June 29, 2022

86 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Board ofDirectors

Audit &
Supervisory Board

Advisory body members
to the Board of Directors
Nomination
Committee

Compensation
Committee

Main expertise and backgroundManagement
strategies

Globalbusiness

Sales andmarketing

Finance andaccounting

HR anddiversity

Legal affairs andCorporate
Sustainability
risk management communication

Chairperson*6
Chairperson*6

See our website fordetails on our
directors’ profiles
Leadership*6 Elected each time by mutual vote from amongst committee members who are Independent Outside
Directors, ensuring that no one serves concurrently as the chairperson of both committees.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 87

Financial and Non-Financial Performance

Financial and Non-Financial Highlights (11 Years Summary)Annual Securities Report (PDF)

Consolidated Results
Financial information
For the fiscal year:

Net Sales *13

Segment
Segment(Overseas)

At fiscal year-end:

Per share data*4

RatiosFood
Pharmaceuticals
Food
Pharmaceuticals *14

Gross profit
Operating profit
Profit before income taxes
Profit attributable to owners of parent
Capital expenditures *2
R&D expenses
Depreciation *3
Cash flows from operating activities (A)Cash flows from investing activities (B)Cash flows from financing activities
Free cash flows (A+B)
Total assets
Interest-bearing debt
EquityProfit (EPS)
Net assets (BPS) *5
Cash dividends
Return on equity (ROE)
Return on assets (ROA)
Equity-to-asset ratio
Payout ratio

Unit

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY mn
JPY
JPY
JPY
%
%
%
%

1,126,520
1,001,551
127,361——
382,684
25,85925,214
16,646
37,66826,19940,821
50,622(39,504)(9,411)
11,118785,514205,394
313,38356.49
1063.64
20.00
5.5
3.8
39.9
35.4

1,148,076
1,015,265
135,105
29,097
17,325394,062
36,496
33,687
19,06047,03826,06740,972
63,847(47,293)(18,194)
16,553
779,461
198,376
320,44764.69
1,087.99
20.00
6.0
5.0
41.1
30.9

1,161,152
1,021,806
141,338
29,41823,961
403,386
51,54348,65730,89164,347
26,10541,88586,487(92,822)6,846(6,335)877,367
221,480
370,341104.891,257.62
25.00
8.9
6.5
42.2
23.8

1,223,746
1,061,398
164,542
38,353
41,961
445,561
77,781
95,21062,58042,35427,30842,077105,155(9,809)(85,071)
95,346856,115
147,828
408,874
212.53
1,388.64
45.00
16.1
9.4
47.8
21.2

1,242,480
1,082,115
161,620
38,191
38,731
461,326
88,39589,19260,78650,417
26,16245,872
81,888(44,291)(46,548)
37,597883,895
129,497448,901
206.55
1,532.45
55.00
14.2
10.2
50.8
26.6

1,240,860
1,073,655
168,466
43,474
39,485454,882
94,67391,07961,27871,77726,50746,511
108,775(64,394)(40,121)44,380927,544
119,102487,310211.07
1,680.35
65.00
13.1
10.6
52.5
30.8

1,254,380
1,056,637
198,688
47,18241,009456,569
98,383
94,586
61,86871,24329,182
43,033112,100(100,202)(13,980)
11,8981,004,143
116,385
527,310213.301,817.89
70.00
12.2
10.3
52.5
32.8

1,252,706
1,049,559
204,354
48,42243,507
462,523
102,710 *12
97,74767,318 *12
71,109 *12
31,44646,198 *12
114,103（70,811）（30,287）
43,291
998,920 *12
106,764
562,753 *12232.04 *12
1,939.59 *12
75.00
12.4
10.3
56.3 *1232.3

1,191,765
999,673
193,664
49,17337,692449,625
106,061
103,183
65,65567,90031,404
48,411
123,683（93,110）（28,293）
30,573
1,067,000
101,775
621,428226.262,141.40
80.00
11.1
10.7
58.2
35.4

1,013,092
1,062,157
826,080
865,609
187,981
197,280
52,61868,57740,36851,444323,249
306,80292,92275,433
128,455
95,41087,49769,424
93,166
72,17033,441
30,98950,10353,575
127,526
85,013（27,614） （36,788）（76,997） （54,734）
99,911
48,224
1,117,459
1,136,217
81,26764,371
673,336
711,917303.62247.392,390.76
2,553.69
85.00
90.00
13.5
10.0
6.6
8.6
60.3
62.7
28.0
36.4

TJ
TJ
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
1,000 m3
1,000 m3
1,000 m3
1,000 m3
10,000 t
10,000 t

—
—
—
—
—
—
—
—
—
—
22,902—
20,864
—
8.1

—
—
—
—
—
—
—
—
—
—
22,723—
20,566
—
7.2

—
—
—
—
—
—
—
—
—
—
20,148—16,504
—
7.4

—
—
—
—
—
—
—
—
—
—
24,375—21,214
—
7.6

—
—
26.6
23.6
38.4
28.7
—
—
—
—
24,104—
20,255
—
5.4

—
9,281
26.0
23.0
36.9
27.4
—
203.5
—
24,082
22,305
17,914
17,914—
6.3—
9,845 *7
25.5
22.8 *7
36.8
28.2 *7—
318.9 *7
243.7 *7
23,48322,056 *7
20,586
19,702 *7—
2.8 *7—
10,714 *7
24.8
22.2 *7
35.6
27.9 *7
325.3
303.5 *7
234.3 *7
23,397
21,979 *7
19,437
18,415 *7
3.1
2.8 *7

11,439
9,766
23.9
21.5
32.4
25.4
313.5
294.8
225.9
22,571
21,18918,226
17,2483.0
2.6

FY2022

Unit *1

7,954,445
6,482,507
1,477,422
513,570
385,2622,297,629
564,920714,528
519,917
540,484
232,080
401,223
636,663(275,509)(409,907)
361,153
8,509,083
482,072
5,331,514
1.852
19.124
0.674

USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD k
USD
USD
USD

Non-financial information
Global *6

Energy consumption
CO2 emissions

Scope 1

Global *6

Scope 2Global *6

Scope 3Global *6

Water consumption

Category 1
Global *6

Water discharge

Global *6

Waste

Global *6

Japan
Japan
Japan
Japan *8
Japan *9
Japan *10
Japan *10
Japan *11

*1 U.S. dollar amounts are provided solely for the convenience of readers
based on an exchange rate of USD 1 = JPY 133.53, the exchange rate
prevailing on March 31, 2023.
*2 Figures for capital expenditures represent property, plant and equipment
and intangible fixed assets based on the consolidated statement of cash
flows.
*3 Figures for depreciation represent property, plant and equipment andintangible fixed assets based on the consolidated statement of cash flows.
*4 Per share data reflect the following stock splits.
· Two-for-one common stock split of October 1, 2015
· Two-for-one common stock split of April 1, 2023
*5 Net assets per share = (Total net assets – Non-controlling interests) ÷(Number of shares of common stock issued – Number of treasury shares)*6 Applies to the Meiji Group (the domestic Meiji Group and 13 overseas
production plants <12 plants up until FY2019, 13 plants in FY2020 and 14
plants in FY2021>).
*7 The Kumamoto Production Center of KM Biologics Co., Ltd. was included in
the calculation from FY2018, and all of the company’s sites were included
from FY2019.
The scope of calculation of industrial waste is limited to production plants.
*8 Category 4 (Upstream transportation and distribution) and Category
9 (Downstream transportation and distribution) have been added andare included in the calculation for Scope 3 from FY2018. In addition, the88 Meiji Holdings Co., Ltd.｜Integrated Report 2023

calculation for Category 1 was expanded to include the raw materials thatmake up the majority of what is needed for production.
*9 Until FY2021, calculated by multiplying the purchase price by the emission
intensity derived from the Database of Emission Intensities on Accounting
for Greenhouse Gas Emissions, etc., by Organizations throughout theSupply Chain. In FY2022, a change in the method of calculation resulted in
an increase of approximately 0.44 million t-CO2 compared to the previous
method.
*10 Meiji Co., Ltd. and Meiji Seika Pharma Co., Ltd. up until FY2014, and thedomestic Meiji Group from FY2015.
*11 From FY2018, only industrial waste generated from production plants was
included in the waste.
*12 In the first quarter of FY2020, we finalized provisional accounting
treatment pertaining to a business combination. Accordingly, the key
financial data to FY2019 represent amounts reflecting the revisions to theinitial allocation of the acquisition cost resulting from the finalization ofprovisional accounting treatment.
*13 The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020) and related implementation guidance are being applied as
of FY2021.
*14 The standard used for calculating the overseas sales was revised from
FY2017.

11,095
9,424
24.5
22.1
29.1
21.6
322.7
302.7
228.4
21,25519,80817,397
16,4502.8
2.4

11,020
9,236
22.9
20.5
28.5
21.9
390.5
348.4
279.2
20,623
19,516
17,412
16,7322.7
2.4

Calculation Methods of Non-Financial Information[Energy consumption](Japan) Calculated based on the Act on Rationalizing Energy Use (Energy Conservation Act).
(Overseas) Calculated in accordance with the Act on Rationalizing Energy Use (Energy Conservation Act).
[CO2 emissions: Scope 1, 2](Japan) Calculated based on the Act on Promotion of Global Warming Countermeasures. In FY2022, Scope 2 emissions of purchased electricity are calculated using
the adjusted emission factors of each power supplier. (Until FY2021, the basic emission factors of each power supplier was used.)(Overseas) Scope 1 is calculated using the emission factors from the Act on Promotion of Global Warming Countermeasures and Scope 2 is calculated using theemission factors by country as of 2020 from the IEA, Emissions from Fuel Combustion. (Until FY2021, the emission factors by country as of 2017 were used for the
calculations.)[CO2 emissions: Scope 3](Japan and overseas) Calculated based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions throughout the Supply Chain.
Scope 3 Categories included in calculation: 1. Purchased Goods and Services, 2. Capital Goods, 3. Fuel- and Energy-Related Activities Not Included in Scope 1 or Scope2, 4. Upstream Transportation and Distribution, 5. Waste Generated in Operations, 6. Business Travel, 7. Employee Commuting, 9. Downstream Transportation andDistribution, 12. End-of-Life Treatment of Sold Products
Category 1: Calculated by multiplying the purchased weight of raw materials and packaging materials (paper, plastic, cardboard, steel, aluminum and glass bottles)
used in the food and pharmaceutical businesses by the IDEA* emission intensities. (Among raw materials, emissions for active pharmaceutical ingredients, bulk
powders and undiluted solutions are calculated by multiplying the purchase prices by the IDEA* emission intensities.)* Inventory Database for Environmental Analysis (Ver.3.2.0)[Industrial waste](Japan) Calculated based on the Waste Management and Public Cleansing Act.
(Overseas) Calculated in accordance with the Waste Management and Public Cleansing Act.
The scope of calculation is noted on p.93.
The numerical data indicated withhave been assured by an independent practitioner.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 89

Financial and Non-Financial Performance

Non-Financial Performance (Progress on Materiality)
Materiality related to social issues[

Circular Economy SDGs: 12

The 13 Main SDGs the Meiji Group Can AddressSocialIssues] Scope of KPI
Meiji G : the Meiji Group (consolidated)
Meiji HD : Meiji Holdings Co., Ltd.
Meiji
: Meiji Co., Ltd.
MSP
: Meiji Seika Pharma Co., Ltd.
KMB
: KM Biologics Co., Ltd.

KPIs

FY2022[Meiji G, consolidated (domestic)]

80.5%

86.1%

Reduce product waste in our domestic food business by 50% by FY2025(compared with FY2016) [Meiji, consolidated (domestic)]

34.1%

31.5%

Reduce domestic plastic usage (packaging, etc.) by at least 25% by FY2030(compared with FY2017) [Meiji G, consolidated (domestic)]

16.0%

To be calculated
during FY2023

Ensure 100% effective use of materials used by our logistics division(pallets, crates, and stretch film, etc.) by FY2030, through reuse and recycling

100%

100%

Reduce Environmental Impact
Consolidated domestic recycle rate 85% or above by FY2023

Healthier Lives[Meiji G, consolidated (domestic)]

Health and Nutrition SDGs: 2, 3, 4
SocialIssuesExpand usage of bioplastics and recycled plastics [Meiji G, consolidated (domestic)]
FY2021

FY2022

Water SDGs: 6, 14

Respond to a super-aged society

Increase sales of health-conscious products, nutrition-enriched products,
products that contribute a super-aged society by at least 10% in FY2023,
compared with FY2020 baseline [Meiji, consolidated (domestic)]
Enroll a total of 700,000 participants into nutrition and healthy diet education
within three years from FY2021 to FY2023 [Meiji, unconsolidated]

−3.1%

−3.1%

188,000
participants

Total of 443,000
participants (FY2022:
255,000 participants)

Increase volume share of five*1 Key Drugs*2 to at least 50% by FY2023[MSP, consolidated (domestic)]

35.2%

32.4%
*3

*3

Countermeasures against emerging and re-emerging infectious diseases
Aim for launch of COVID-19 vaccines by FY2023 [MSP, KMB, unconsolidated]

SocialIssues

KPIs

FY2022

Reduce company-wide water consumption per unit of sales* by at least 15%
by FY2030 (compared with FY2020) [Meiji G, consolidated]

6.4%

13.4%

Replenish an amount of water to nature equivalent to 45% the amount used in
our products by FY2030 [Meiji G, consolidated]

24.2%

41.3%

* The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and related implementation guidance are being applied to net sales
used in the per unit calculation

Biodiversity SDGs: 6, 15

Currently taking steps to aim
for launch in FY2023*1 Of the 10 ingredients selected as Key Drugs in 2019, the number of antibacterial drugs marketed by Meiji Seika Pharma*2 Representative antibacterial drugs for the treatment of infectious diseases and for which a stable supply is essential, as selected by academic societies working in
infectious diseases*3 Copyright © 2023 IQVIA./Calculated based on JPM April 2021 to March 2023 / Reprinted with permission

SocialIssues

KPIs● Protection of local biodiversity

Conduct biodiversity activities at all production sites worldwide by FY2023[Meiji G, consolidated]

Caring for the EarthFY2021

77.1%*

Human Capital SDGs: 5, 8, 10
11.3%

14.9%

−

Expand renewable energy usage to make up at least 50% of total company-wideusage by FY2030 [Meiji G, consolidated]

5.3%

9.5%

48.6%

57.0%

6.7%

● Eliminate the use of specified fluorocarbons*1 CO2 reduction target was changed in FY2022*2 As of FY2022, the method for calculating Scope 3 Category 1 emissions has been changed to multiplying the purchased weight of raw
materials and packaging materials by the IDEA emission intensities (Among raw materials, emissions for active pharmaceutical ingredients,
bulk powders and undiluted solutions are calculated by multiplying the purchase prices by the IDEA emission intensities). Results for the
FY2019 base year have been recalculated, and progress is reported from the FY2022 results (emissions for the base year have beenrecalculated to 3,811 thousand tCO2).

90 Meiji Holdings Co., Ltd.｜Integrated Report 2023

61.9%*FY2022

Reduce CO2 emissions (Scope 3 Category 1 purchased goods and services,
Category 4 and 9 upstream and downstream transportation and distribution,
Category 12 end of life treatment of sold products) by at least 30% by FY2030(compared with FY2019) [Meiji G, consolidated] *2

Total abolition of CFC-using refrigeration, freezer, and other equipment at all
production sites by FY2030 [Meiji G, consolidated] *3

FY2022Thriving Communities

Performance

Reduce CO2 emissions
Reduce company-wide CO2 emissions (Scope 1 and 2) by at least 50% by FY2030(compared with FY2019) [Meiji G, consolidated] *1

Performance
FY2021* Impact of cancellation or postponement of plans due to the spread of COVID-19

Climate Change SDGs: 7, 13
KPIs

Performance
FY2021

Secure water resources● Stable supply of pharmaceuticals

SocialIssues

Newly used for
Newly used for
Kaju Gummy packaging Oishii Gyunyu packaging

Performance

KPIs

Contribute to healthy diets

Performance
FY2021*3 Base year is FY2020

SocialIssues

KPIs

Performance
FY2021

FY2022

Increase the ratio of female managers from 2.6% in FY2017 to at least 10%
by FY2026 [Meiji HD, Meiji, MSP, KMB unconsolidated]

4.7%

5.6%

Increase the number of female managers (females in managerial and assistantmanagerial positions) to at least 420 by FY2026 (approximately triple the number
in FY2017) [Meiji HD, Meiji, MSP, KMB unconsolidated]

237

256

Employ people with disabilities at or above Japan’s legal requirement(2.3% as of June 2023) [Meiji HD, Meiji, MSP, KMB unconsolidated]

2.57%

2.53%

Renewedcertification

Renewedcertification

Promote diversity and develop human capital● Employee-friendly workplaces

Renew certification for outstanding health and productivity management fromthe Japanese government [Meiji HD, Meiji, MSP, KMB unconsolidated]

Meiji Holdings Co., Ltd.｜Integrated Report 2023 91

Financial and Non-Financial Performance

Independent Practitioner’s Assurance of Energy Consumption, CO2 Emissions,
Water Consumption & Industrial Waste

Non-Financial Performance (Progress on Materiality)

Society SDGs: 8, 10, 17
SocialIssues

KPIs

Performance
FY2021

FY2022All domestic Meiji Group employees to attend a human rights training(including e-learning) at least once annually

Implemented one time
(Number of participants:
Approx. 13,000/
Participation rate: 90%)

Implemented one time
(Number of participants:
Approx. 13,000/
Participation rate: 92%)

All overseas Meiji Group employees to attend a human rights training(including e-learning) at least once by FY2023

Number of participants:
Approx. 770/
Participation rate: 99%

Number of participants:
Approx. 2,200/
Participation rate: 84%

ESG Session for Investors:
One time
ESG Advisory Board:
Two times

ESG Session for Investors:
One time
ESG Advisory Board:
Two times

Respect and promote human rights[Meiji G, consolidated (domestic)][Meiji G, consolidated excluding Japan]

In order to improve the reliability of the data, Meiji Holdings Co., Ltd. obtained the independent practitioner’s assurance for the
global energy consumption, the global CO2 emissions (Scope 1 and Scope 2), the domestic CO2 emissions (Scope 3 category 1),
the global water consumption and the domestic industrial waste for FY2022 indicated on p.88 and 89 in the Japanese version ofthis report by Deloitte Tohmatsu Sustainability Co., Ltd. We will work hard to improve the reliability of all environmental data.

● Engagement with stakeholders
Hold an ESG session for investors, and ESG advisory board meetings
at least three times annually [Meiji HD]● Promote social contribution activities
All Meiji Group employees in Japan to participate in social contribution
activities at least twice a year (at least once every half year)[Meiji G, consolidated (domestic)]

Participation rate at least
Participation rate at least
once each 6-month period once each 6-month period
First half year term: 92%/
First half year term: 90%/
Second half year term: 92% Second half year term: 92%

Shared Themes
Sustainable Sourcing SDGs: 8, 12, 15, 17
SocialIssues

KPIs

Performance
FY2021

FY2022

Procure raw materials with consideration toward human rights and the environment
Start conducting a sustainable sourcing survey of suppliers for Group
companies in Japan by FY2021 [Meiji G, consolidated (domestic)]

Not yet started

Not yet started(Will start in April 2023)

Start conducting a sustainable sourcing survey of suppliers for major
overseas Group companies by FY2022 [Meiji G consolidated]

Launched for
46 suppliers

Launched for
17 suppliers

Increase sourcing ratio of Meiji sustainable cocoa to 100% by FY2026[Meiji consolidated]

42%

62%

Switch 100% to RSPO* -certified palm oil by FY2023 [Meiji consolidated]

84%

90%

Switch 100% to eco-friendly paper by FY2023 [Meiji G consolidated]

98%

98%

475 times annually,
accumulated
total 1,423 times

477 times annually,
accumulated
total 1,900 times

Hold Meiji Dairy Advisory program (MDA) to support management of
dairy farms at least 400 times a year, and a total of at least 2,150 times
by FY2023 [Meiji, consolidated (domestic) ]* RSPO: Roundtable on Sustainable Palm Oil

Scope of global energy consumption, global CO2 emissions (Scope 1 and 2),
global water consumption and domestic industrial waste
Meiji Holdings Co., Ltd., Meiji Co., Ltd. and Group companies (Shikoku Meiji Co., Ltd., Tokai Meiji Co., Ltd., Gunma Meiji Co., Ltd., Tochigi Meiji Milk Products Co., Ltd.,
Meiji Oils and Fats Co., Ltd., Donan Shokuhin Co., Ltd., Meiji Sangyo Co., Ltd., Meiji Chewing Gum Co., Ltd., Tokai Nuts Co., Ltd., Nihon Kanzume, Co., Ltd., Meiji Feed
Co., Ltd., Okinawa Meiji Milk Products Co., Ltd., Meiji Logitech Co., Ltd.), Meiji Seika Pharma Co., Ltd. and Group companies (OHKURA Pharmaceutical Co., Ltd.), KM
Biologics Co., Ltd., PT MEIJI FOOD INDONESIA, Guangzhou Meiji Confectionery Co., Ltd., Meiji Seika Food Industry (Shanghai) Co., Ltd., Meiji Dairies (Suzhou) Co., Ltd.,
Meiji Ice Cream (Guangzhou) Co., Ltd., Meiji Seika (Singapore) Pte. Ltd., Laguna Cookie Co., Inc., D.F. Stauffer Biscuit Co., Inc., PT. Meiji Indonesian PharmaceuticalIndustries, Thai Meiji Pharmaceutical Co., Ltd., Shantou SEZ Meiji Pharmaceuticals Co., Ltd., Meiji Pharma Spain, S.A., Medreich Limited, Adcock Ingram Limited
Note that the energy consumption and the CO2 emissions for Meiji Logitech Co., Ltd. only include the fuel used in company-owned delivery vehicles/trucks.
Additionally, only production plants are included in the above totals for the domestic industrial waste.

Scope of domestic CO2 emissions (Scope 3 category 1)
This scope includes the main raw materials and the packaging materials (paper, plastic, cardboard, steel, aluminum, and glass bottles) that will be introduced into thedomestic production location for Meiji Co., Ltd. and Group companies (Shikoku Meiji Co., Ltd., Tokai Meiji Co., Ltd., Gunma Meiji Co., Ltd., Tochigi Meiji Milk Products
Co., Ltd., Meiji Oils and Fats Co., Ltd., Donan Shokuhin Co., Ltd., Meiji Chewing Gum Co., Ltd., Tokai Nuts Co., Ltd., Nihon Kanzume, Co., Ltd., Okinawa Meiji Milk
Products Co., Ltd.), Meiji Seika Pharma Co., Ltd. and Group companies (OHKURA Pharmaceutical Co., Ltd.), as well as KM Biologics Co., Ltd.

92 Meiji Holdings Co., Ltd.｜Integrated Report 2023

Meiji Holdings Co., Ltd.｜Integrated Report 2023 93

Corporate Information

Operating Bases and Group Companies (As of July 1, 2023)

The Meiji Group uses its extensive global network and conducts R&D,
production and distribution to provide a stable supply of high quality food products
and pharmaceuticals, in order to maintain society’s trust in the Meiji brand.

Wakkanai Plant

Japan

Overseas
Tokachi Cheese R&D Center
Tokachi Plant▼ Food Segment

Meiji Co., Ltd.
Head Office

Research Laboratory

2
25

BranchPlant

Research Laboratory

BranchPlant

Group Company

Pharmaceuticals
Hokkaido BranchGroup Company

517

Eniwa Plant

Nishi Shunbetsu
Plant
Honbetsu Plant

Nihon Kanzume, Co., Ltd.

▼ Pharmaceutical Segment▼ Food Segment▼ Pharmaceutical Segment

Meiji Co., Ltd.

Meiji Seika Pharma Co., Ltd.

OfficeGroup Company

1
Group Company 16
OfficeGroup Company

Group Company

15

Donan Shokuhin Co., Ltd.

Guangzhou Meiji Confectionery Co., Ltd.
Meiji Ice Cream (Guangzhou) Co., Ltd.
Meiji Food (Guangzhou) Co., Ltd.

Meiji Seika Pharma Co., Ltd.
Head Office

Research Laboratory

Research Laboratory
Plant

1
1

BranchGroup Company

Plant

8
4

BranchGroup Company

KM Biologics Co., Ltd.
Head Office

Research Center

Research Center
Production Center

1
4

BranchMeiji Dairies (Suzhou) Co., Ltd.
Meiji Seika Food Industry (Shanghai)Co., Ltd.
Meiji (China) Investment Co., Ltd.

Production Center

Group Company

11

BranchGroup Company

Tohoku Plant
Kitanihon Branch
Pharmaceuticals Tohoku Branch▼ Companywide Common

Meiji Business Support Co., Ltd.
Nishinihon
BranchPharmaceuticals
Kyushu Branch
Pharmaceuticals
Chugoku & Shikoku
BranchKyoto Plant
Meiji Oils and Fats Co., Ltd.
OHKURA
Pharmaceutical Co., Ltd.
Osaka Plant

Kyushu Plant

Nagano Cheese Plant
Gifu Plant

Aichi Plant

Kansai Plant
Kansai Ice Cream Plant
Kansai Nutritionals Plant
Kansai Branch
Pharmaceuticals
Kansai Branch

Gunma Meiji Co., Ltd.
Gunma Plant/Gunma Nutritionals Plant
Gunma Pharmaceuticals Plant
Tochigi Meiji Milk Products Co., Ltd.

Tokai
Plant
Chubu Branch
Pharmaceuticals
Chubu Branch

SakadoPlant

Wellness Science Labs
Meiji Innovation Center

94 Meiji Holdings Co., Ltd.｜Integrated Report 2023

MEIJI FOOD VIETNAM CO., LTD.
Medreich Limited＊

Taiwan Meiji Food
Co., Ltd.
Guangdong Meiji
Pharmaceutical Co., Ltd.

Bangkok Office
AUSTASIA GROUP LTD. Meiji Seika (Singapore) Pte. Ltd.
CP-Meiji Co., Ltd.
Thai Meiji Food Co., Ltd.
Thai Meiji
PT. Meiji Indonesian
Pharmaceutical Co., Ltd.
Pharmaceutical Industries

Saitama Plant
Ibaraki Plant
Moriya Plant
Tokai Nuts Co., Ltd.
Pharmaceuticals Tokyo Branch

Meiji Ad Agency Co., Ltd.

Okinawa Meiji
Milk Products Co., Ltd.

Laguna Cookie Co., Inc.

Meiji Techno-Service Inc.

Kanagawa Plant
Head office
Kikuchi Research Center
Kumamoto Production Center
Koshi Production Center
Aso Production Center
Newborn Screening Center
Meiji Animal Health Co., Ltd.

Meiji Pharma Spain, S.A.

Pharmaceuticals
Kanto BranchToda Plant

Meiji Dairies (Tianjin) Co., Ltd.

Meiji America Inc.
D.F. Stauffer Biscuit Co., Inc.

Pharmaceutical Research Center
Meiji Seika Pharmatech Co., Ltd.

Meiji Chewing Gum
Co., Ltd.
Tokai Meiji
Co., Ltd.

Kurashiki Plant

Shikoku Meiji Co., Ltd.

Meiji Seika Europe B.V.

Head Office
Meiji Business Support Co., Ltd.
Meiji Food Materia Co., Ltd.
Me Pharma Co., Ltd.
Romeck Pharma, LLC
Tokyo Office

Kanto Branch
Meiji Feed Co., Ltd.
Meiji Logitech Co., Ltd.
Meiji Fresh Network Co., Ltd.
Meiji Nice Day Co., Ltd.

＊ The nine subsidiaries of Medreich Limited (included Adcock Ingram Limited) are not shown.

Unmarked bases are companies and facilities that do not belong to the segment.

* The group companies are the consolidated companies and entities accounted for by the equity method.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 95

Corporate Information

Corporate Data / Stock Information (As of March 31, 2023)
Corporate Data

Stock Information

Company Name

Major Shareholders

Meiji Holdings Co., Ltd. (Securities code: 2269)

Cover Artwork

Name

Number ofshares held(Thousands)

Percentage of
total sharesissued (%)

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

21,469

14.47

Custody Bank of Japan, Ltd. (Trust account)

7,575

5.11

April 1, 2009

Nippon Life Insurance Company

3,348

2.26

Share Capital

The Norinchukin Bank

2,892

1.95

Head Office2-4-16, Kyobashi, Chuo-ku, Tokyo 104-0031, Japan
Incorporated

JPY 30.0 billion

Meiji Holdings Employee Shareholding Association

2,774

1.87

Number of Group Employees

STATE STREET BANK WEST CLIENT - TREATY 505234

2,763

1.86

Common Stock Issued

Meiji Holdings Trading-Partner
Shareholding Association

2,649

1.79

148,369,500

Mizuho Bank, Ltd.

2,417

1.63

Stock Listing

Resona Bank, Limited.

2,117

1.43

STATE STREET BANK AND TRUST COMPANY 505103

1,739

1.17

17,290Tokyo

Fiscal Year-End(Note) In addition to the above, the Company holds 8,979 thousand shares of treasury
share (6.05% of total shares issued.)

March 31

Ordinary General Meeting of Shareholders

Late in June

Shareholding by Type of Shareholder

Transfer Agent of Common Stock

Mitsubishi UFJ Trust and Banking Corporation■ Financial Institution■ Individuals and Others

Public Notices

Public notices given by the Company
are issued electronically.
URL: https://www.meiji.com/global/■ Foreign Companies, etc.
■ Other Companies■ Financial Instruments Dealers

However, in the event that public notices cannot be issued
electronically due to an accident or some other unavoidable
circumstances, public notices given by the Company shall be carriedin the Nihon Keizai Shimbun.
It should be noted that pursuant to Article 440, Paragraph 4 of theCompanies Act, public notices of financial statements are not given.

35.80%
29.37%
23.67%
8.89%
2.26%

Meiji Holdings

TOPIX

Trading volume(Thousandshares)

50,000100

40,00075

30,00050

20,00025

010,000March 2019

March 2020

(Notes) The closing price as of March 30, 2018 is 100.
Trading volume reflects the following stock splits.
- A two-for-one common stock split issued on April 1, 2023

96 Meiji Holdings Co., Ltd.｜Integrated Report 2023

The Paralym Art World Cup is regarded as the World Cup of art forpeople with disabilities. It was held in 2022 under the theme of“FUTURE.” Meiji Holdings is a sponsor of this event and selected
DAIKI’s artwork for the “meiji Award” out of 498 entries from 25
countries and regions around the world. The artwork is used as thecover of this Integrated Report.
Paralym Art

Paralym Art is a social contribution
project in which an organization works
together with artists with disabilities as
one team. This project sustains theprovision of support for people withdisabilities along with the cooperationof private companies and individuals,
without depending on social security
funds. (Project organizer: Shougaisha
Jiritsu Suishin Kikou Association)

Paralym Art | About DAIKI

Exchange Meeting

We invited DAIKI to our office for an exchange meeting after selecting his
work as the cover artwork. DAIKI shared his wish for a peaceful world
without war, the efforts he made in creating the work, and his goals as an
artist. It was an extremely meaningful opportunity.

I expressed a free andpeaceful world in thiswork, where children
can fly around insneakers.
Meiji Holdings Co., Ltd. supports this project
as a Gold PartnerSociety > Promote Social Contribution > Activities to Support Society >Sponsorship of Paralym Art

Publisher’s Note

125

March 2018

“For Children in the Future” by DAIKI* Individuals and Others includes treasury share.

Stock Price and Trading Volume(index)Paralym Art Artwork

March 2021

March 2022

0March 2023

Thank you for reading the Meiji Group Integrated Report 2023.
This Integrated Report has been prepared with domestic and foreign institutional
investors as the primary readers. We considered the opinions gained from ourdialogues with various stakeholders, including investors, while preparing this report.
The theme of this report is to tell a story about the Meiji Group’s initiatives tosustainably improve corporate value by realizing profit growth and sustainability
activities simultaneously. This report begins with a history of value creation that hascontinued to support people’s nutrition and wellness since our founding. It thendescribes the Group’s strengths that enable sustainable value creation and thestrengthening of our management foundation, including natural, human, andintellectual capital. It also introduces on the evolution of existing businesses by
incorporating advanced external technologies and knowledge, as well as
technological development for the future.
We once again used Paralym Art artwork for the cover of this report. It represents
the Meiji Group’s stance on D&I and, at the same time, the Group’s commitment to a“future full of smiling children,” the subject of the artwork.
We will continue to value opportunities for dialogue with our stakeholders. We
will also strive to contribute to society and improve our corporate value throughappropriate information disclosure. We are looking forward to receiving honest
opinions and feedback to further enhance this dialogue going forward.

Masashi Tanaka
General Manager,
Corporate Communication Department,
Meiji Holdings Co., Ltd.

Meiji Holdings Co., Ltd.｜Integrated Report 2023 97