Itoham Yonekyu Holdings Inc.

Medium-term Management Plan 2023
Progress Explanatory Materials
May 9, 2022

Group Philosophy and Vision
Group Philosophy
We will contribute to the realization of sound and affluent society throughbusiness.

VisionA leading food company that continuously evolves with its employees by embracing
the spirit of fairness and the challenge to progressions.

Founding spirit

Spirit that underlies the Group philosophy and vision

Serving society
through business

A Moving FoodExperience1Medium-term Plan 2023
Actionguidelines

Achieve further growth and leap by defying stereotypes andreaffirming our strengths☆ Need to solidify the management base and earnings base after the integration and increase
competitiveness.
☆ Need to strengthen growth potential by responding to new market needs and social and environmentalvalues.

Ongoing challenges after integration

Vision to achieve during period of Medium-termManagement Plan

I. Strengthen management base

Maximize performance and potential

Ⅱ. Strengthen earnings base

Maximize Group value

Ⅲ. Initiatives for new businesses and markets

Establish new core earnings sources

Ⅳ. Initiatives for sustainability

Fulfill corporate social responsibility throughbusiness

Developing

priority policy

for each theme

2Medium-term Plan 2023

FY21 results and quantitative targets☆ Enhance competitiveness and added value in business to increase return on invested capital (ROIC).
☆ Implement shareholder return policies in consideration of financial soundness and capital efficiency to maximize shareholder value.
FY2020Results

FY2021Plan

FY2021Results

Difference

FY2022

FY2023

Forecasts

Plan

Operating income

240

230

246

16210

280

Processed Food

123

110

110

075

145

Meat134

135

143

13150

155

Other-17-15-132-15-20

27025028535240300

6.3%

6.0%

6.6%

0.6%

5.1%

6.8%

Processed Food

8.5%

-

8.2%

-

4.7%

-Meat

9.3%

-

10.3%

-

8.5%

-

Total Assets

3,940

4,000

4,131

131

Shareholders' equity

2,399

2,500

2,522

D/E Ratio

0.15

0.13

0.13

Ordinary income
ROIC

＊1

＊1 Insurance claim income in extraordinary income is excluded.

Ordinary Income(billion yen)

4,200

＊2

4,250

22

2,550

＊2

2,700

00.15

＊2

0.10

＊2 Revised plan based on FY2021 results and FY2022 forecasts.

ROICbillion yen*Rounded down to the nearest 0.1 billion yen.
*ROIC =Earnings before interest after tax / (Interest-bearing debt +Equity capital)

Shareholder return policy DividendWith target payout ratio of approx. 40%, weincrease dividends steadily in 30% to 50% range.
Annualdividend

Payout ratio

FYE 3/2021
Results¥2130.6%

FYE 3/2022
Estimates¥2335.2%

FYE 3/2023
Forecasts¥2446.7%

 Share buyback and cancellation# of shares(%)

AmountFYE 3/2021
Results

2 million¥1.4 billion

FYE 3/2022
Results

1 million¥0.6 billion

FYE 3/2023
Estimates

10 million(Maximum)¥5.0 billion(Maximum)5 million shares of treasury stock to be canceled(Scheduled on June 30, 2022)

3Medium-term Plan 2023
Theme

Ⅰ.

Strengthen
manageme
nt baseFY 2021 Results
 Reorganization-Strategy and procurement functions of the meat division integrated andinto HD*1
 Digital strategy-System design for the meat sector completed as part of MKB*2 project(core system integration)

Processed Food Business

Ⅱ.

Meat Division

Strengthen
earningsbase

Priority Policy and Status (1/2)

 Cost reduction-Promote higher operating rates of high-efficiency lines bychanging location of plant which manufacture products-Boost yield and man-hour productivity
 Enhancement of added value-Launch new commercial
Strengthen communication by using digital marketing, etc.
 Scale expansion-Launch new products of business-use processed food forconvenience stores Cost reduction-Share information on suppliers and inventory positions
 Scale expansion-Meat Process & Farm Div. established to strengthen production
business-Ishikari Packing Center established-Strengthen sales of unheated meat products

Other Digital strategy-Improve business efficiency by introducing RPA(sales order, and accounting operations, etc.)

Initiatives for FY2022 and beyond Reorganization-Strategy and headquarter functions of the processed foodbusiness integrated into HD
 Digital strategy-System design for the processed food sector completed aspart of MKB*2 project-Digitalization of back office operations with the newly
introduced expense management system
 Cost reduction-Start the first phase of the reorganization of production bases(Reconstruction of the Yume Plant begins) Enhancement of added value-Strengthen mutual sales by utilizing each company's logistics
network Scale expansion-New line development for processed food products (ToridePlant) Cost reduction-Logistics cost containment by using optimized refrigerators forsales-Reorganize and integrate sales offices
 Scale expansion-Newly establish farm for Yonekyu Oishiitori Corp.
-Construct Towada Meat Plant cattle processing facility begins-Expand cattle and swine raising capacity on cooperating farms(Tohoku area)
 Digital strategy-Promote efficiency by introducing a meat standards
management system-Promote efficiency by expanding the scope of RPA utilization(logistics operations, and others)*1 HD stands for Holdings, *2 MKB stands for MIRAIKIBAN Project4

Medium-term Plan 2023
ThemeⅢ.

Initiatives for
new businesses
and markets

Priority Policy and Status (2/2)

FY 2021 Results

 Expansion of business fields-Non-meat business (development of meat business and hybridproducts)-Expanding sales of frozen foods (Chinese delicatessen, etc.)

 Expansion of production areas and sales markets-Strengthening beef exports, especially to Europe and the U.S.

 Strengthening the system to implement initiatives-Establishment of a Sustainability Committee and identificationof materiality-Development of human rights policy, procurement policy, andsupplier procurement guidelines

Ⅳ.

Initiatives forsustainability

 Environmentally friendly initiatives-Utilization of biomass materials-Introduction of used cooking oil boilers-Introducing equipment with high energy-exchange efficiency
 Improving the working environment-Promotion of work from home and improvement of the system-Partial introduction of hot-desking

Initiatives for FY2022 and beyond

 Expansion of business fields-Establishment of New Business Development Office-Strengthening non-meat business (improvement inproduct value)-Strengthening the healthcare business through theacquisition of animal-derived blood products business-Plant of Kyushu Extract Limited goes into full-scaleoperation
 Expansion of production areas and sales markets-Strengthening beef exports through the sales channel ofANZCO FOODS LTD.

 Strengthening the system to implement initiatives-Establishment of the Sustainability Management Office
and improvement in information disclosure-Implement measures in line with each policy
 Environmentally friendly initiatives-Switching to eco-friendly packaging from drawstring bagform-Introducing equipment with high energy-exchange
efficiency-Development of future strategies in response to TCFD

5Reorganization

I. Strengthen management base

Shift from company-based units to strategy-based units for flatter organizational structure
ITOHAM YONEKYUHOLDINGS INC.

ITOHAM YONEKYUHOLDINGS INC.

Processed Foods
Business Div.

Meat Process and Farm Div.

Domestic Meat Div.

Imported Meat Div.

Processed Meat Dept.

Business Strategy Dept.

Production Div.

Business Strategy Div.

Sales Div.

Meat Dept.

Processed Meat Dept.

Domestic Meat Div.

Imported Meat Div.

Processed Meat Dept.

Business Strategy Dept.

Production Div.

Business Strategy Div.

Sales Div.

Production Div.

Meat Food Business Div.

Sales Div.

Processed Foods
Business Div.

Meat Business Div.

*The brands of Itoham and Yonekyu will continue to exist.

•In FY2021, the meat procurement functions were integrated and an officer was assigned to supervise the processed food business.

•In FY2022, strategy and headquarters functions for the processed food business will be integrated.

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Ⅱ. Strengthen earnings base

Cost reduction-Start the first phase of the reorganization of production bases (Reconstruction of the Yume
Plant begins)•Reorganize factories with focus shifting from company-based to group-based
optimization to strengthen the earnings base.

•As the first phase of the project, we start the reconstruction of the Yume Plant in theChubu region.

•We plans to invest a total of ¥50-60 billion in the reorganization of production bases inthe current and next mid-term management plans.

Otaru Plant

・・・・・ Itoham Plant

Investment Schedule for Reorganization of Production
Bases
AmountFY2022

FY2023

FY2024・・・・・ Yonekyu Plant

Hokuriku Plant

FY2025
onwardCurrent
MTMP¥20-30billion

Tohoku Plant

Rokko Plant
Kobe Plant

Asakusa Ham Inc.
YDF Maebashi Plant

Nishinomiya Plant

Tsukushi-factory Co.,Ltd.

NextMTMP¥30billion

Kagayaki Plant

Toyohashi Plant
Hana Plant

Toride Plant

YDF Main Plant
Tokyo Plant
Kyushu Plant

Start of investment
Contributions to profit

Fuji Plant
Yume Plant

YDF Shizuoka Plant
Kenko Plant

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Ⅱ. Strengthen earnings base

Scale expansion

Newly establish farm for Yonekyu Oishii Tori Corp.
•

Expected increase in production volume and earnings by acquiring landand establishing a new farm.

•

Creating a more hygienic and stress-free environment will reduce theassociated cost and epidemic risk.

Start construction of “Towada Meat Plant” cattle processing facility(Left) IH MEAT PACKER Inc., Aomori
Prefecture, and Towada City signing alocation agreement•

Expected business expansion through expansion of cattle
processing capacity.

•Establish a group’s production and earnings base byintegrating production and sales system•

Aiming to obtain an export license to strengthen sales inoverseas markets where demand for Wagyu beef is expected toincrease.

(Right) Image of Towada
Meat Plant cattle processing
facility8

Ⅱ. Strengthen earnings baseEnhancement of added value

Communication measures to nurture the brand and acquire new fans
Strengthen efforts to convey the appeal of products and attract new fans, mainly for core brands, by appointing newimage characters and renewing promotions.

Digital marketing initiatives
Transmit information via apps and social media as part of efforts to attract a fan base and provide nutritional education.

Application for children“GokkoLand”

YouTube channel “Hamham witheverybody”

9Ⅲ. Initiatives for new businessesand markets

Expansion of production areas andsales markets

Strengthen Non-meat Business•Sales in the soybean meat category were approximately 150% year-on-year.

•Proactive collaboration with other companies and use of materials other than soybeans
will lead to technological innovation and improvement of the product value.

Itoham Yonekyu HD Non-meat Business Sales Trend
YoY

150%
YoY

1700%

FY2019
Examples of initiatives in FY2021

FY2020

FY2021Other non-meat products lineup“Soy-meat Hamburger,” “Marude Oniku! Soy-meat Dumplings,” and “Marude Oniku! Minced Soy-meat Cutlet,”containing “MIRACLE MEAT,” have been on sale. “MIRACLE MEAT” is plant meat derived from germinatedsoybeans, and it is developed and produced by a start-up, DAIZ Inc.

Strengthen Healthcare business through the acquisition ofMoregate’s animal-derived blood products business.
•Sales of animal-derived blood products are expected to have substantial growth for
vaccines, regenerative medicine, and clinical diagnostics, amid strong demand frompharmaceutical and biotech companies.

•The acquisition of the business will enable us to effectively utilize Moregate’s
management resources to expand the scale and add value to ANZCO's healthcare
business.
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Ⅳ. Initiatives for sustainability

Environmentally friendly initiatives

Switch to eco-friendly packaging from drawstring bag form like “the GRAND Alt Bayern
127g” and other products

Annual plastic use

Approx. 30%
reduction

The GRAND Alt Bayern
127 g, 127 g×2 bags

The GRAND Alt Bayern
127 g, 127 g×2 bags

Drawstring formpackaging​Eco-friendly
packaging​(Example of other products)•

Expected to reduce the amount of plastic used in the entire productline by approx. 30%* by the change in packaging format.
*Calculated value compared to drawstring bag form•
Asano Fresh® Arabiki Pork Sausage 92g, 92g×2 bags

Delivery loading efficiency improved 1.2 times than before.

Meatballs with sweet-and-sour sauce
2 bags included

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Ⅳ. Initiatives for sustainability

Environmentally friendly initiatives

Promote development of eco-friendly products
Work to develop eco-friendly products by improving packaging, etc.
(Examples of eco-friendly product development)
Packaging materials
partially made from“recycled materials”

Biomass plastic (PE/PET) with
“CO2 emission reduced”“Ink made partially from plantderived materials” is used

Introduce used cooking oil boilers•The introduction of used cooking oil boilers makes it possible
to recycle used oil as fuel.

•Reduce heavy oil consumption by 20% leading to reduce
CO2 emissions and costs.

Reduced use of wrapping
materials through “packagingmaterial-saving” efforts

Paper trays madefrom “recycledpaper”

Reduction of heavy oil consumption by using
used cooking oil boilers“Food waste reduction”
Strengthening of shelf-stableproducts

Image of a used cooking
oil boiler

Approx. 20%reduction

BeforeintroductionAfter
introduction

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The forward-looking statements, including plans and results forecasts, included in this material are based on information available andcertain assumptions that the Company considers reasonable. They involve a variety of risks and uncertainties and the Company does
not guarantee results in the future.
Actual results may be different from the plans and forecasts included in this material due to a variety of factors.
The information included in this material is intended to deepen the investors' understanding of the Company and is not intended tosolicit investment. We kindly ask you not to make investment decisions depending solely on this material.
The Company pays close attention to the contents of the material. The Company does not assume any responsibility for any errors in
information, data falsifications by a third party, or failures caused by data downloading or other causes.

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