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© Kirin Holdings Company, Limited 2
1. Executive Summary
2. Proven Track Record
3. Kirin's Core Values and Strategy
4. Robust Capital Allocation Policy
5. Long-Term Value Creation Initiatives
6. Strengthening Governance
7. Highly Qualified and Experienced Nominees to Lead Kirin
8. To Realise Kirin's Sustainable Growth
Table of Contents
© Kirin Holdings Company, Limited 3
Kirin Holdings Corporate Overview
Name Kirin Holdings Company, Limited
(Stock Code:2503)
Founded February 23, 1907
Headquarter 10-2, Nakano 4-chome, Nakano-ku,
Tokyo
Representative Yoshinori Isozaki
President and CEO
Market Cap JPY 1,839.5 bn (As of Mar 2, 2020)
Corporate Policy
Business Portfolio
Japan Beer and Spirits
Kirin Brewery
Japan Non-Alcoholic
Beverages
Kirin Beverage Oceania Integrated
Beverages
Lion
Pharmaceuticals
Kyowa Kirin
Others
Kyowa Hakko Bio, Mercian,
Myanmar Brewery,
Coke Northeast,
Koiwai Dairy Products etc
(Note) *The pie chart is based on the segment information as of FY2019 *The outer circle : composition ratio of revenue *The inner circle : composition ratio of operating profit *Since the second quarter FY2019, Kyowa Hakko Bio is classified in "Others"
FY2019
Revenue
JPY 1,941bn
Normalized operating profit
JPY 191bn
© Kirin Holdings Company, Limited 4
Overall structure of KV2027
KV2027 Kirin Group Long-Term Management Vision for 2027
Corporate
philosophy
2027
vision
Outcomes
Strategy
framework
“One KIRIN” Values
KIRIN brings joy to society by crafting food and healthcare products
inspired by the blessings of nature and the insights of our customers.
A global leader in CSV, creating value across our world of Food & Beverages to Pharmaceuticals
Create economic value (Financial targets), create social value (Non- financial targets)
“Passion. Integrity. Diversity.”
Value creation with Society
solving social issues (Health and well-being,
community engagement and the environment)
Organizational
capabilities for
innovation Diversity and inclusion,
culture for innovation
Value creation with Consumers
meeting every consumer’s expectations
by strengthening the bonds
between consumers and the brands
Consumer centric marketing Technology creating trusted
value
ICT accelerating value creation
© Kirin Holdings Company, Limited 5
Overview of KV2027
KV2027 • The Kirin Group has achieved every quantitative target established in the Kirin Group Medium-Term
Business Plan for FY2016-2018 and completed the process of restructuring and revitalizing the Group.
During this period, the Group has been operating in an increasingly volatile business environment, in which
a broad range of social issues have been emerging around the globe that have significant implications for
its business operations. In order for the Group to achieve sustainable growth, the Kirin Group needs to take
its CSV*1 management to a new level, thereby to create greater social and economic value and foster a
collaborative and engaged relationship with society.
• Under these circumstances, the Group has established KV2027, which calls upon the Group to become a
global leader in CSV by 2027 by creating value in domains ranging from food & beverages to
pharmaceuticals. In pursuit of CSV management, the Kirin Group will redouble its efforts to address three
key social issues—“health and well-being,” “community engagement,” and “the environment”—while
continuing to play its role as a responsible alcohol producer. (For details, see the separate February 14 press release
titled “Kirin Group Defines CSV Purpose as its Long-Term Non-Financial Targets”)
• To create value across its world of food & beverages to pharmaceuticals, the Kirin Group will establish
Health Science business*2, and grow them into another core of the Group, by leveraging the organizational
excellence and assets that the Group has amassed over the years. Moreover, the Kirin Group will develop
organizational capabilities for innovation that will translate addressing social issues into its growth
opportunities so as to establish a business portfolio that will ensure sustainable growth of the Group.
*1 Creating Shared Value. It is all about creating value that can be shared with customers and society.
*2 Changed its name from “New businesses bridging pharmaceuticals and food & beverages"
© Kirin Holdings Company, Limited 6
Overview of 2019 MTBP
Basic Policy
Key Initiatives
KPIs
Create a foundation for the Kirin Group aimed at achieving new growth
1. Growth : Achieve profit growth of existing businesses
2. Opportunities : Establish and foster Health Science businesses*
3. Foundation : Strengthen organizational capabilities for innovation
Financial targets Non-financial targets
2019 MTBP Medium-Term Business Plan for FY2019-2021
Normalized EPS : CAGR 5%+
ROIC : 10%+ by FY2021
CSV commitment
Corporate Brand Value
Employee engagement score
*Changed its name from “New businesses bridging pharmaceuticals and food & beverages
© Kirin Holdings Company, Limited 7
Key Initiatives of KV2027
1. Growth : Achieve profit growth of existing businesses
2. Opportunities : Establish and foster Health Science businesses
3. Foundation : Strengthen organizational capabilities for innovation
• The Group will continue to invest in creation of intangible value, such as brand, research and development,
digitalization, and human resources and organizations, in order to achieve sustainable growth.
• The Kirin Group will enhance its organizational capabilities to achieve innovation that will make the most of
the Group’s technical prowess and that will enable us to practice consumer-centric marketing as part of
addressing social issues.
• The Kirin Group will expand the business of high-functioning ingredients and establish a unique business
model by leveraging the Kirin Group’s extensive experience and assets in pharmaceuticals and food &
beverages so as to provide solutions to health issues that have not been addressed.
• The Kirin Group will launch several new businesses that offer products and services tailored to meet the
specific need of individual consumers and will eventually grow them into another core of the Group.
Kirin Brewery / Lion (Beer, Spirits and Wine) / Kirin Beverage / Myanmar Brewery / Kyowa Kirin
2019 MTBP
© Kirin Holdings Company, Limited 9
Review of 2016 Medium-Term Business Plan (MTBP)
Reached All Targets and Significantly Improved Each Business
Achieved restructuring and revitalization
of low-profit businesses
Kirin Beverage OP margin 1.5%⇒8.2%
Brasil Kirin Divested
Lion (Dairy & Drinks) Divested(Closing expected in
2020 1H)
Achieved all quantitative targets
under the 2016 MTBP
ROE 17.5%
Normalized EPS +12.6%
Consolidate OP 199.3 bn yen
© Kirin Holdings Company, Limited 10
Proven Track Record
Since his appointment in March 2015, Kirin's CEO Yoshinori Isozaki has guided the Company
successfully through its 2016 MTBP and delivered total shareholder returns on both an
absolute and relative basis
55%
18% 19% 20%
32%
45%
Kirin Domestic Peers³ International Peers⁴ TOPIX Index Nikkei 225 Index MSCI World BeveragesIndex
Outperforming Total Shareholder Returns¹
10% 9%
14%
International Peers⁴ Domestic Peers³Kirin
Best-in-Class Return on Equity¹,²
Source: Bloomberg as of March 6, 2020
Notes:
1 From Kirin's CEO Appointment on March 27, 2015 to November 6, 2019, the day prior to public report of FP's demands
2 Average from 2015 to 2019 (CEO Yoshinori Isozaki's tenure)
3 Average. Includes Asahi Group, Sapporo, Suntory Beverage & Food
4 Average. Includes AB InBev, Heineken, Carlsberg, and Molson Coors
© Kirin Holdings Company, Limited 11
7% 2%
29%
International PeersDomestic Peersキリン
Track Record of Commitment to Compelling Capital Returns
30%+ 40%+
Consolidated dividend payout ratio
DPS increased from 38 yen to 65 yen since the CEO’s appointment in 2015. Announced Share
Buybacks of 100bn yen (200bn yen in total) for two consecutive years in 2018 / 2019
Trends in Annual Dividends & Share Buybacks
Annual Dividends
(Left axis / yen)
Share Buybacks
(Right axis / bn yen)
Source: Bloomberg / Factset base
Note:
1 Average from 2015 to 2019 (CEO Yoshinori Isozaki's tenure)
100
80
60
40
20
Dividend Payout Ratio¹
Share Buybacks / Free Cash Flow¹
68%
35% 43%
International PeersDomestic Peersキリン
© Kirin Holdings Company, Limited 12
Robust Capital Allocation Policy
Continuous Commitment to
Shareholder Returns and
Profitable Investments
Dividend Payout Ratio
from 2013 to 2018
Dividend Payout Ratio
from 2019 onwards
Share repurchase in 2018
Amount of share repurchase
announced in 2019
Average ROIC
from 2015 through 2019
Target ROIC
by 2021
30%+
40%+
100bn
yen
100bn
yen
8%
10%+
Operating
Cash Flow
Investment
Cash Flow
Free Cash Flow
1. Stable dividend
2. Growth investment Priority 1: Food
Priority 2: Health Science
3. Share buyback
© Kirin Holdings Company, Limited 13
Our Vision
Become a leading global CSV company and
aim to maximize Social and Economic Value
Economic Value
Social Value
Solving
Social Issues
Sustainable Growth
Maximize
Cash Flows
Achieve
CSV Purpose
© Kirin Holdings Company, Limited 14
Value Creation
Core
competencies Foundations for driving
innovations Consumer centric
marketing expertise
Diversity and inclusion,
culture for innovation
Core technology that assures value creation:
Fermentation & Biotechnology ICT accelerating
value creation
Inn
ova
tion
Pharma Food
Health
Science Food, Health Science
and Pharma are all
core businesses,
relying on Kirin's core
competencies and
sharing synergies in
product development,
channel optimization,
joint-marketing and
many other fields
Kirin Group Is Structured for Sustainable Growth
© Kirin Holdings Company, Limited 15
The Right Strategy for Sustainable Growth
Pharma Food
Health
Science
Innovation Across Food and Pharma
Kirin fully appreciated the challenges and opportunities facing the Company
in 2019 and made key strategic decisions to position itself for sustainable growth
Brewery has been and will continue
to be Kirin's core business, …
…however, recognizing the structural market
challenges Brewery is facing and other mega trends
promoting a healthy society,…
…Kirin leveraged its core competencies
in fermentation and biotechnology and
invested in Health Science businesses,
which have significant synergistic
potential with Food and Pharma
businesses and enable Kirin to meet the
full spectrum of consumer needs
© Kirin Holdings Company, Limited 16
Foundation
Research
Application
Research Merchandise
Development
Manufac-
turing
Sales
Channel
Building a Strong Value Chain in Health Science
Functional evaluation
Masking technology
Beverage development
packaging
EC and
B2B
Pharmaceutical
discovery seeds
Highly proprietary
materials research
Manufacturing technology and
production control engineering
Low-cost fermentation
production technology
Food and
Pharma seeds
Not applicable for pharmaceuticals
Marketing expertise
Formulation
technology
Brand and wholesale
distribution on/offline sales
Building a strong value chain by combining
industry-leading strengths of each business
© Kirin Holdings Company, Limited 17
Kirin's world-leading Fermentation and Biotechnology R&D has
far-reaching innovation capabilities
Kirin Group's Core Competencies and Value Creation
FERMENTATION & BIOTECHNOLOGY
Applications
Products Alcoholic
Beverages
Food Non-alcoholic
Beverages
(PET)
Skincare Food
Supplements
Pharma
Brand
Examples
Alcohol
Fermentation
Functional
Research
↓
Immuno-
logical
science
Micro-
Biological
Control
↓
Aceptic
technology
Functional
Research
↓
Microbial
fermentation
Amino-acid
Fermentation
↓
Microbial
metabolic
control
technology
Bio-
Pharmaceutical
manufacturing
technology
Company
© Kirin Holdings Company, Limited 18
Long-Term Value Creation Initiatives
Food
Pharma
Health
Science
Strengthen core business, invest and expand
► Increase support for "new genre" products and expand Beer and Spirits product portfolio
► Strengthen focus on non-alcoholic and craft beer
► Invest in sugar-free and low-sugar products
Launch global strategic products in the US and Europe, and increase revenues and profits
► Expand indication of Crysvita for adults
► Launch Poteligeo in Europe
Revitalize Kyowa Hakko Bio and Capture Synergies
► Revitalization plan underway with the aim of transforming Kyowa Hakko Bio into a highly profitable
business by 2027
► Significant synergies with FANCL across the whole value chain and expects that these opportunities
will unlock approximately 5.5-7 bn yen in Normalized OP to Kirin in 2024 and grow Health Science
Normalized OP to 15-18bn yen
1
2
3
2018 2021 2027
199.3 bn yen
Medium-term
plan 2016
Medium-term
plan 2019
KV2027 Announced in Feb 2019
CAGR 4〜6%
vs. 2018
Pharma
Health Science
Food
KV2027 Normalized OP Growth
© Kirin Holdings Company, Limited 19
Strengthening Governance
Highly
Independent
Board
• 7 of 12 Directors to be independent, representing 58.3% of the Board – more than 2x the TOPIX average of 28%¹
• Independent Chairman
• All the Non-executive directors meet independent criteria of Tokyo Stock Exchange
Relevant
Expertise
• Track-record in other management roles and directorships at public companies in Japan and internationally
• Capital allocation, strategic alternatives and corporate governance expertise
• Pharmaceuticals, healthcare, and beverage experience
Diverse
Backgrounds
• 2 female nominees (17% of board)
• 2 international nominees (17% of board) with deep cross-border experience
• Diversity compares favourably to TOPIX averages of 6% female representation and 1% international¹
Remuneration
Aligned with Performance
• Proposed changes better align pay with
performance and shareholder value
creation
• Proposed executive remuneration
guidelines will increase ratio of
performance-based pay to total
• Changes introduced by Nomination and
Remuneration Advisory Committee followed
extensive review by external research firm
• Committee continuously monitors industry
best practice and Company performance to
ensure alignment with shareholder value
creation
• Nomination and Remuneration Advisory
Committee composed of majority
independent directors with independent
Committee chairperson
The election of Kirin's proposed candidates and the approval of the new remuneration
system will extensively strengthen Kirin's governance
Kirin has taken action to be a leader in governance in Japan
Note:
1 Average of >1,500 companies with internal auditors out of TOPIX constituent stocks
© Kirin Holdings Company, Limited 20
Strengthening Governance -
Corporate Governance Platform Leading Other Japanese Companies after AGM
Strengthen monitoring functions by increasing the diversity and expertise of Board of
Directors - conduct strategic reviews of investment projects as appropriate
33% 58%
FY2019 FY2020
Total # of Board of Directors
Internal directors
Non-executive directors
Independent directors
(% of Independent directors)
Female
International
9
5
4
3
33%
0
0
12
5
7
7
58%
2
2
Health Science
ESG / Sustainability
Brand Strategy /
Marketing
Overseas business
Finance / Accounting
Priorities for
Enhancing Skillset
* International ** Female
Independent
officer ratio
* Health Science
Chieko Matsuda
Noriko Shiono
Rod Eddington
George Olcott
Noriko Shiono
*
Non-executive Non-executive
** *
* ** * Non-
independent Chairman Chairman
Internal Internal
© Kirin Holdings Company, Limited 21
Diverse Board of Directors Including Non-executive Directors
with Independence
No. Name Independence
1 Yoshinori Isozaki
2 Keisuke Nishimura
3 Toshiya Miyoshi
4 Noriya Yokota
5 Noriaki Kobayashi
6 Shoshi Arakawa
7 Masakatsu Mori
8 Hiroyuki Yanagi
9 Chieko Matsuda
10 Noriko Shiono
11 Rod Eddington
12 George Olcott
Reappoin
tment
New
candid
ate
s
Skill Sets and Independence of the Board of Directors (BOD)
Independent Officers Notification Submitted to TSE
© Kirin Holdings Company, Limited 22
Non-
executive
Directors
Inter-
national
Female
TOPIX Avg.
(> 1,500 companies1)
(market cap. > 1tn yen)
28%
1%
6%
58%
17%
17%
(4/7)
(2/7)
(2/6) (2/9)
(5/9)
<Examples2>
Strengthening Governance -
A Leader in Corporate Governance Structure in Japan Few Japanese companies have governance system more robust than Kirin.
Of companies with corporate auditors, there are only 10 companies in Japan including Kirin that
have 1. a majority of independent Non-executive directors,
2. meaningful international representation on the board and 3. meaningful diversity on the board
Notes:
1 Companies with internal auditors out of TOPIX constituent stocks
2 Based on convocation notice of the latest AGM of each company
(2/9)
© Kirin Holdings Company, Limited 23
Strengthening Governance - Revision of the Amount of Stock /Cash Compensation (Kirin's Views on Shareholder Proposals)
The Board 's views: Against the shareholder proposal on remuneration for directors
Current remuneration
to directors Kirin's proposal
Basic remuneration
and bonus
(monetary
compensation)
950mn yen per year
Of which 80mn yen for
Non-executive Directors
Stock
compensation
Restricted Stock
Compensation System
250mn yen per year
· Excluding Non-
executive Directors
950mn yen per year
Of which 150mn yen for
Non-executive Directors
BIP Trust Scheme
600mn yen per year
· Including delegated
executive officers
· Excluding Non-
executive Directors
Shareholder proposal
600mn yen per year
Of which 80mn yen for Non-executive
Directors
Restricted Stock Compensation System
1,200mn yen per year
· Excluding Non-executive Directors
Highlights
1. Implement a more easy-to-understand incentive structure
2. Raise the maximum amount of remuneration for Non-
executive Directors to 150mn yen with an increase of Non-
executive Directors
1. Does not apply for increasing the
number of Non-executive Directors
2. Restricted Share Compensation
System will remain and may hinder the
introduction of the new remuneration
system deliberated by the Nomination &
Remuneration Advisory Committee
© Kirin Holdings Company, Limited 24
Qualified, Experienced, and Independent New Candidates
• Brings strong management, financial, and corporate
governance expertise
• Professor of Economics and Business Administration at
Tokyo Metropolitan University
• Director of Hitachi Chemical Company, Foster Electric,
and SATO Holdings
• Decades of management consulting experience
including at Booz & Company and Moody’s
• One of Australia’s most experienced and accomplished
business leaders, with deep international expertise
• President of Australia Japan Business Co-operation
Committee
• Former CEO of Cathay Pacific Airways, Executive
Chairman of Ansett, and CEO of British Airways
• Currently Independent Non–Executive Director and
Chairman of Lion Pty Ltd
• Valuable expertise in health sciences and
pharmaceuticals
• Representative Director of pharmaceuticals
manufacturer SSP Co. and President of medical device
manufacturer Widex Japan
• Relevant corporate strategy and marketing experience
having served as President of Konami Sports, an
operator of fitness clubs and manufacturer and seller of
fitness equipment and sports-related products
• Decades of experience in finance and corporate
governance
• Independent Non-Executive Director of leading
Japanese companies Hitachi Chemical, DENSO
Corporation, and Dai-ichi Life Holdings
• Guest Professor, Keio University, Faculty of Business
and Commerce
• Former director of Nippon Sheet Glass and NKSJ
Holdings
• Former Managing Director, Equity Capital Market, SBC
Warburg Tokyo (now UBS Investment Bank)
Chieko Matsuda Noriko Shiono
Sir Rod Eddington George Olcott
Female Female Health Science
International
International
© Kirin Holdings Company, Limited 25
Strong Board of Directors
Toshiya Miyoshi
Masakatsu Mori
Sir Rod Eddington
Director of the Board, Senior
Executive Officer
Personnel & General Affairs
Strategy
Age: 61 | 5 years in office
Non-Executive Director,
Chairman of the Board
Outside Audit and Supervisory
Board Member of the
Company
Senior Advisor of International
University of Japan
Age: 73 | 1 year in service
Age: 70
Noriaki Kobayashi
Hiroyuki Yanagi
George Olcott
Director of the Board, Senior
Executive Officer
R&D Strategy; Quality
Assurance; Health Strategy
Age: 60 | 1 year in office
Non-Executive Director,
Chairman of the Board
Chairman and Representative
Director of Yamaha Motor Co.,
Ltd.
Age: 65 | 1 year in service
Age: 64
Yoshinori Isozaki
Noriya Yokota
Chieko Matsuda
President & Chief Executive
Officer
Former President & CEO of
Kirin Brewery Company;
assumed current role in
March 2015
Age: 66 | 5 years in office
Director of the Board, Senior
Executive Officer & Chief
Financial Officer
Financial Strategy; IR
Strategy; IT Strategy;
Business Process
Reengineering
Age: 59 | 2 years in office
Age: 55
Keisuke Nishimura
Shoshi Arakawa
Noriko Shiono
Representative Director of the
Board, Senior Executive Vice
President
Business Alliance and
Investment Strategy;
Overseas Business; Global
Craft Beer Strategy
Age: 63 | 8 years in office
Non-Executive Director,
Chairman of the Nomination
and Remuneration Advisory
Committee
Former Chairman of the Board
of Bridgestone Corporation
Age: 75 | 5 year in service
Age: 59
Candidate for Reelection New Candidate Independent Average tenure of independent directors: 3.5 years
© Kirin Holdings Company, Limited 26
Members of Kirin’s Board and management team met with FP on numerous occasions
since 2014, when FP first invested in Kirin. Throughout this period we have engaged with
FP – listening to and fully considering their thoughts
Given the constructive dialogue between Kirin and FP during this period, we find it
unfortunate that FP has repeatedly threatened to make their criticisms public and launch a
proxy contest unless Kirin acquiesced to its demands
Without informing the Company of its intention to speak to media, an FP managing partner
surprisingly conducted an interview with Financial Times published on 6 November 2019
to criticize the Company, stating that “[Kirin] management is determined to proceed in a
direction that destroys value.”
Despite this unproductive public attack, Kirin continued its discussions with FP. In addition
to interviewing director nominees proposed by FP, Kirin’s Board thoroughly reviewed and
discussed each of FP’s proposals before determining they were not in the best interest of
all shareholders
FP again made its grievances public without informing Kirin when it suddenly published a
press release, presentation, Q&A, and website outlining its views on the Company on 18
February 2020 and 5 March 2020
Kirin has Repeatedly Attempted to Engage Constructively with FP
© Kirin Holdings Company, Limited 27
FP's Value Recommendations Considerations Kirin's Strategy for Sustainable Growth
Abandon all non-beer
businesses
Kirin to focus solely on beer business with
no other avenues for sustainable growth
Kirin is committed to growing the beer business but recognizes the structural
market challenges in the market
Leveraging fermentation expertise and invest in Health Science opened an
important venue for sustainable long-term growth
Divest Pharmaceuticals
(Kyowa Kirin)
Kirin to receive then distribute the majority of
cash proceeds, but lose all upside potential
in a growing area and synergy realization
currently in progress
Kyowa Kirin was created through the merger of Kirin and Kyowa Hakko and
has seen strong organic growth since inception due to innovative
fermentation capabilities and cutting-edge biotechnologies, Kyowa Kirin
remains on track to becoming a Global Specialty Pharmaceutical Company
Kyowa Kirin is an integral part of Kirin's vision with a growing global portfolio
of revolutionary products, driving long-term success from basic research
collaborations targeting disease of brain, kidney, immune system and
intestine
Divest Kyowa Hakko Bio
Kirin to receive then distribute the majority of
cash proceeds, but lose all upside potential
in a growing area and synergy realization
currently in progress
Kyowa Hakko Bio is a global leading biotechnology company, with its highly
advanced fermentation technology
Kyowa Hakko Bio holds a key role in Kirin's Health Science business,
allowing the Company to capitalize on opportunities in the potential
4.1tn yen Health and Wellness market
Divest FANCL stake
Kirin to receive then distribute the majority of
cash proceeds, but lose all upside potential
in a growing area and synergy realization
currently in progress
Sees significant synergies with FANCL across the whole value chain and
expects that these opportunities will unlock approximately 5.5-7 bn yen in
Normalized OP to Kirin in 2024
The Capital and Business Alliance with FANCL completes the foundation of
the Health Science value chain, combining strengths in R&D, merchandise
development, manufacturing and distribution
Divest Japanese Soft
Drinks business
Kirin to receive then distribute the majority of
cash proceeds, but lose all upside potential
in a growing area and synergy realization
currently in progress
Kirin's portfolio of market-leading soft drink products is well positioned to
address the dynamic tastes of increasingly health conscious domestic
customers
Kirin's Strategy Will Position the Company for Sustainable Growth
1
2
3
4
5
© Kirin Holdings Company, Limited 28
FP's Shareholder Proposals Kirin's View Kirin's Proposals
Repurchase 600bn yen of
shares, to be funded by
proceeds from disposal of
non-core assets
Subject to the sale of all non-beer
businesses, which Kirin views as
integral to the Company's long-term,
sustainable growth
Disruptive to synergies realization plan
currently underway
An exceptionally large-scale share
repurchase along the lines that FP
is proposing could seriously worsen
our financial position and flexibility
going forward
As a top priority, we are creating synergies by leveraging existing assets
Focus on organic growth of the business by fully utilizing our strengths,
such as core fermentation biotechnology, marketing capabilities and
human resources
Execute a disciplined cash allocation with businesses with weaker growth
prospects are appropriately restructured to return maximum profits to
shareholders
Revision of the amount of
remuneration for the
restricted stock
compensation for directors
and Revision of the
amount of remuneration
for directors
FP's proposal has a narrow application
(applicable to only internal directors) with
weak incentive (restricted stock
compensation system)
Kirin's proposed revised remuneration system for Directors and Officers is
applicable to internal directors and executive officers and designed to
closely link remuneration with business performance
Kirin's proposed stock compensation scheme "Board Incentive Plan
Trust Scheme" is stable and efficient, allowing Directors to focus on
key management issues
Appointment of
two directors
Following interviews with FP’s director
nominees and extensive discussion, the
Nomination and Remuneration Advisory
Committee determined FP’s nominees
possessed neither incremental expertise
relative to the current Board and Kirin’s
nominees, nor a sufficient understanding
of Kirin, to warrant their appointments to
the Board
Kirin’s Nomination and Remuneration Advisory Committee has conducted
a rigorous process to identify, interview and select candidates based on
qualities including their diversity, experience, and skillsets relative to the
needs of the Board and the Company.
Kirin's proposed Board refreshment includes four highly qualified,
experienced, and independent candidates
Each Kirin director and director nominee is aware of his or her
responsibility to evaluate important matters, such as company
strategy and capital allocation, with an independent mindset and
challenge policies that are not in the interest of shareholders
Kirin's Board regularly assesses our strategy to ensure it offers the best
path to long-term shareholder value and deliberately fosters open-minded
debate and robust discussion. We fully expect that independent and
rigorous process to continue with the newly installed board
Kirin's Proposals are Beneficial to the Company's Future
1
2
3
4
5
6
© Kirin Holdings Company, Limited 30
Review of 2016 Medium-Term Business Plan
Reached Targets
Achieved all 2016 MTBP targets in 2018
▶ Clarified key issues and took decisive actions
▶ Insisted on committed, results-focused management
▶ Engaged closely with all stakeholders, especially shareholders
and investors
Metric Target Result
ROE 15% or more 17.5%
Normalized EPS CAGR 6% or more 12.6%
Consolidated OP 196.0bn yen or more 199.3bn yen
© Kirin Holdings Company, Limited 31
Review of 2016 Medium-Term Business Plan
Significantly Improved Each Business
Kirin Brewery
15.1%
17.4%
19.0% 19.3%
20.8%
2015 2016 2017 2018
27.0%
25.8%
26.4%
27.9%
28.8%
2015 2016 2017 2018
1.5%
4.9%
5.9%
7.6% 8.2%
2015 2016 2017 2018
2.3%
4.0%
3.4% 3.5% 3.6%
2015 2016 2017 2018
Lion (Beer, Spirits & Wine)
Kirin Beverage Lion (Dairy & Drinks)
Myanmar Brewery
Brasil Kirin
2018
Guidance
17.0%
2018
Results
20.8% * Excluding liquor tax
FY2015
27.0%
2018
Results
28.6%
2018
Guidance
3.0%
2018
Results
8.2% 2018
Guidance
5.0%
2018
Results
3.6%
2018 Guidance: Achieve profit in 2019
2018 Guidance: Maintain market position &
capture share of market growth
2018 Results: Acquired a market share of approx. 80%
Increased production facilities
Transfer of all shares
completed
J-GAAP
OPM
IFRS
Normalized OPM
1.Beer business: Invest, strengthen and grow profit base
Decision
made to sell
business
Launched global products: Crysvita in Europe and the US, and POTELIGEO in the US
Kyowa Hakko Kirin
3.Pharmaceuticals & Bio-chemicals businesses: Invest to achieve outstanding growth
2.Low-profit businesses: Restructure, revitalize
© Kirin Holdings Company, Limited 32
Proven Track Record
Since his appointment in March 2015, Kirin's CEO Yoshinori Isozaki has guided the Company
successfully through its 2016 MTBP and delivered total shareholder returns on both an
absolute and relative basis
55%
18% 19% 20%
32%
45%
Kirin Domestic Peers³ International Peers⁴ TOPIX Index Nikkei 225 Index MSCI World BeveragesIndex
Outperforming Total Shareholder Returns¹
10% 9%
14%
International Peers⁴ Domestic Peers³Kirin
Best-in-Class Return on Equity¹,²
Source: Bloomberg as of March 6, 2020
Notes:
1 From Kirin's CEO Appointment on March 27, 2015 to November 6, 2019, the day prior to public report of FP's demands
2 Average from 2015 to 2019 (CEO Yoshinori Isozaki's tenure)
3 Average. Includes Asahi Group, Sapporo, Suntory Beverage & Food
4 Average. Includes AB InBev, Heineken, Carlsberg, and Molson Coors
© Kirin Holdings Company, Limited 33
8x
9x
10x
11x
12x
13x
14x
Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20
Kirin Holdings Domestic Peers¹ International Peers²
Valuation Evolution
EV / NTM EBITDA Since the Appointment of CEO Isozaki
Source: FactSet as of March 6, 2020
Notes:
1 Includes Asahi Group, Sapporo, Suntory Beverage & Food
2 Median. Includes AB InBev, Heineken, Carlsberg, and Molson Coors
3 The day prior to public report of FP's demands
Kirin's EV/EBITDA has largely outperformed domestic peers and
has been closing the valuation gap with international peers
1
10.1x
9.3x
8.4x
November 6: Unaffected Date3
11.4x
10.4x
9.7x
© Kirin Holdings Company, Limited 34
FY2019 Results – Progress and Achievements of MTBP
Food Alcoholic and
Non-Alcoholic
Beverages
Pharma
Health
Science
Solid growth in existing businesses in the 1st year of MTBP.
Delivered as promised
Strengthen profitability
▶ Established strong brand
equity and profit base in Japan
▶ Expanded value-added
categories to overseas,
e.g. craft beer
Drive rapid growth
Launch and develop
▶ Maximized value of global
strategic products
▶ Expanded pipeline through
development of new products
▶ Strengthened development of
high-function materials
▶ Built unique Kirin business
model
Kirin Brewery
Kirin Beverage
Myanmar Brewery
Profit up for 4th consecutive year
Profit up for 5th consecutive year
Profit up for 3rd consecutive year after acquisition
2018
2018
2018 2019
April
2019
September
2019
© Kirin Holdings Company, Limited 35
2019 Was a Challenging Year
As of the Unaffected Date, despite Kirin's outperformance on a mid- and long-term basis to
domestic and international peers, Kirin's 1-year TSR underperformed peers and indices
Kirin TSR Relative to Domestic Peers Median
(24%)
27%
57%
40%
1-Year 3-Year 5-Year CEO Tenure¹
Kirin TSR Relative to International Peers Median
(27%)
26%
50% 45%
1-Year 3-Year 5-Year CEO Tenure¹
Kirin TSR Relative to MSCI World Beverages Index
(25%)
(2%)
31%
11%
1-Year 3-Year 5-Year CEO Tenure¹
Kirin TSR Relative to TOPIX Index
(18%)
(4%)
40% 35%
1-Year 3-Year 5-Year CEO Tenure¹
Source: Bloomberg as of March 6, 2020
Note:
1 From Kirin's CEO Appointment on March 27, 2015 to November 6, 2019, the day prior to public report of FP's demands
© Kirin Holdings Company, Limited 36
80
90
100
110
120
130
140
150
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20
Kirin Holdings Domestic Peers¹ US Peers² Europe Peers³ TOPIX
Share Price Performance Since 2019
Kirin has taken actions to address market concerns underscoring share price's underperformance in 2019.
Kirin has outperformed "pure" beer players with strong presence in the US (the largest beer market) who have been
suffering volume decline as consumers move to craft beer and other alternatives (Non-alcohol and Hard Seltzer)
Source: FactSet as of March 6, 2020
Notes:
1 Median, includes Asahi Group, Sapporo, Suntory Beverage and Food
2 Median, includes AB InBev and Molson Coors
3 Median, includes Heineken and Carlsberg
Kirin's Price Performance vs Peers — January 1, 2019 to March 6, 2020
Feb. 5: Kyowa Hakko
Bio acquisition
announced
Apr. 26: Lion Dairy &
Drinks cheese asset
sale announced
Feb. 18: FP
announces board
nominees publicly
Jan. 9: Business
Guidelines for
FY19 announced
Nov. 6: Unaffected Date
Feb. 13: Q1 earnings
announced
Feb 14: MTBP and
KV2027 announced
Aug 5: Q2 earnings
announced
Feb. 13:
Q4 earnings
announced
Nov. 7: Q3
earnings, Share
buybacks
announced
Nov. 7 (04:00 JST):
FT article published
describing FP demands
Nov. 25: Sale of
Lion Dairy &
Drinks to China
Mengniu Dairy
announced
Mar 3:
Investor Day
Aug. 6: Purchase of
FANCL minority stake
announced
99.8 96.5
103.2
83.3
121.2
© Kirin Holdings Company, Limited 37
Kirin Has Taken Actions to Address Market Concerns
Concern Kirin's Action
Strategy Investor Day held on March 3, 2020 to provide clarity on the Company's corporate strategy,
business strategy, Health Science business initiative and synergies with FANCL
Operation
Identified operating procedure (SOP) issues at Kyowa Hakko Bio in August 2019 and immediately
took corrective actions
Implemented a revitalization plan with full support of the Group
Synergies with
FANCL
Starting from Q3 2019 result presentation released in November 2019, Kirin continued to provide
details of envisioned synergy potential and realization plan
Synergy realization in progress, having set up four focused sub-committees and conducted 200+
study sessions and meetings thus far
Capital Allocation
Announced the decision to divest Lion Dairy & Drinks in October 2018 and announced the sale in
November 2019
Authorized and executed an opportunistic share repurchase plan of up to 100bn yen in
November 2019 and provided further detail of our capital allocation policy on the Investor Day
Governance Nominated four highly qualified, experienced and independent candidates to the Board
of Directors
Remuneration Provided remuneration plan described to closely link remuneration with business performance
© Kirin Holdings Company, Limited 38
2,200
2,250
2,300
2,350
2,400
2,450
2,500
2,550
2,600
9:00am 10:00am 11:00am 12:00pm 1:00pm 2:00pm 9:00am 10:00am 11:00am 12:00pm 1:00pm 2:00pm 9:00am 10:00am 11:00am 12:00pm 1:00pm 2:00pm 3:00pm
Positive Market Reaction to Kirin's Action
Source: FactSet as of March 6, 2020
Kirin's Share Price Reactions to FT Article and Share Buybacks in November 2019
Nov. 7 (4am JST): FT Article on FP's demands
Nov. 7 (After market close): Kirin's 100bn yen share buyback announcement
Nov. 6th Nov. 7th Nov. 8th
Yen
Japan Standard Time
© Kirin Holdings Company, Limited 40
Become a leading global CSV company and
aim to maximize Social and Economic Value
Economic Value
Social Value
Solving
Social Issues
Sustainable Growth
Maximize
Cash Flows
Achieve
CSV Purpose
Our Vision
© Kirin Holdings Company, Limited 41
Kirin's Main Businesses Prior to 2019
Fermentation and
Biotechnology R&D
Cell culture-based
production technology
Kirin Pharma / Kyowa Hakko Kirin
Since 1982
Revolutionary products
focused on cancer, renal
and immune diseases
Fully established in 2007 as
Kyowa Hakko Kirin,
following the merger
between Kirin Pharma and
Kyowa Hakko Kogyo
Brewery
Since 1907
Kirin's Flagship
#1 Annual
Revenue Contribution
FOOD PHARMACEUTICALS
Beverage
Since 1928
Famous black tea, green tea and
coffee brands in Japan
Lion
Since 2007
Market-leading beer and beverages
brands in Australia and New Zealand
Mercian Myanmar Brewery
Producer and retailer of wine and
other alcoholic beverages in Japan
Leading brewer in Myanmar
with ~80% market share
© Kirin Holdings Company, Limited 42
Strategic Decision in 2019
Leveraging Kirin's Core Competencies
and
Kirin fully appreciated the challenges and opportunities facing the Company
in 2019 and made key strategic decisions to position itself for sustainable growth
Food
Fermentation and
Biotechnology R&D
Cell culture-based
production technology
Assessed High-Potential Market with Synergies
Pharma
Evaluated Core Competencies Faced Structural Challenges
Maturing beer market in
developed countries
Expanding regulations of
alcoholic beverages
Mounting pressure to
implement sugar tax
Global shift towards craft
beers and premium products
Rapidly expanding Health & Wellness Food
market, expected to reach 4.1 trillion yen from
2.4 trillion yen
Multiple applications available –
a strong foundation for growth
Strategic Decision Stake Acquisition
Capital and
Business Alliance
April 2019 September 2019
Investing and Creating Synergies in Health Science
Social trends in Japan
Aging population
Shrinking workforce
Women’s advancement in society
Change in diet and nutrition
Shifting consumer demands
Better quality of life
Preventive healthcare
Healthier products
© Kirin Holdings Company, Limited 43
Leveraging Kirin's Core Competencies
FERMENTATION & BIOTECHNOLOGY
Applications
Products Alcoholic
Beverages
Food Non-alcoholic
Beverages
(PET)
Skincare Food
Supplements
Pharma
Brand
Examples
Alcohol
Fermentation
Functional
Research
↓
Immuno-
logical
science
Micro-
Biological
Control
↓
Aceptic
technology
Functional
Research
↓
Microbial
fermentation
Amino-acid
Fermentation
↓
Microbial
metabolic
control
technology
Bio-
Pharmaceutical
manufacturing
technology
Company
Kirin's world-leading Fermentation and Biotechnology R&D has
far-reaching innovation capabilities
© Kirin Holdings Company, Limited 44
Foundation
Research
Application
Research Merchandise
Development
Manufac-
turing
Sales
Channel
Building a Strong Value Chain in Health Science
Functional evaluation
Masking technology
Beverage development
packaging
EC and
B2B
Pharmaceutical
discovery seeds
Highly proprietary
materials research
Manufacturing technology and
production control engineering
Low-cost fermentation
production technology
Food and
Pharma seeds
Not applicable for pharmaceuticals
Marketing expertise
Formulation
technology
Brand and wholesale
distribution on/offline sales
Building a strong value chain by combining
industry-leading strengths of each business
© Kirin Holdings Company, Limited 45
2,427
0
500
1,000
1,500
2,000
2,500
2011 2012 2013 2014 2015 2016 2017 2018 2019(Prospect)
2020(Forecast)
Health and Wellness Food Market*
(b
n y
en)
H · B Foods Marketing Handbook 2020: №1.№2, Fuji Keiza(co.,Ltd) *Note: Total of health-oriented foods (foods and drinks) and
function-oriented foods (health foods, series supplements)
Health and wellness food market continuing
its expansion toward 2.4tn yen in 2020
Strong Potential in Health and Wellness Market in Japan
© Kirin Holdings Company, Limited 46
Shrinking
workforce
Needs for working
healthy over the
long term (Life-
induced diseases, etc.)
Reserves for
lifestyle-related
diseases
Aging population
Seniors' health
needs
Elderly
Women's social
advancement
Women's health
needs
Working women
Changing diet
and nutrition
Nutritional needs for
younger generation
Younger
generation (under 30 years)
Challenges
Customers
Needs
Solve global social issues by
addressing needs centered around "Health"
Increase corporate value
by solving pressing needs
Challenges and Needs Addressed by Kirin Group
© Kirin Holdings Company, Limited 47
Strong Market Potential by Needs:
4tn+ yen Opportunity in Health and Wellness Market
Key demand1
Percentage of
people is
coping
Percentage of
people who
want to cope
Seniors'
health
needs
Bones and
joints 8.3 x 2.0 16.6
Immunization 6.4 x 2.3 15.0 Blood
circulation 9.4 x 1.8 17.2
Dementia 3.1 x 5.9 18.4
Needs for
working
healthy
over the
long term
(Life-
induced
diseases,
etc.)
Lifestyle-
related
diseases 15.9 x 1.3 20.9
Intestinal
regulation 14.2 x 1.2 16.5
Multi-balance 8.8 x 1.6 14.3
Muscular3 15.5 x 1.6 24.3
Sleep 7.7 x 2.4 18.4
Women's
health
needs
Diet 10.8 x 1.9 20.9
Beauty 9.9 x 1.9 18.9
Nutritional
needs for
younger
generation
Nutrition &
revitalization 8.7 x 2.4 20.7
Liver function 3.0 x 3.4 10.3
Eye Care 15.4 x 1.2 18.6
Hormone 5.9 x 2.1 12.1
Other Oral 10.9 x 1.7 18.4
Others - - -
Market potential 2
402.1bn yen
969.1bn yen
242.1bn yen
409.9bn yen
404.4bn yen
931.6bn yen
yen
1.3tn yen
465.5bn yen
961.6bn yen
451.4bn yen
Total 2.4tn yen 4.1tn yen
Market size and breakdown of 2.4tn yen:
H · B Foods Marketing Handbook 2020 №1.№2,
Fuji Keizai
Market size and breakdown of 4.1tn yen: KIRIN
Note: 1. Excluding small-scale needs
2. If everyone wants to deal with it
3. Sports related food / supplements
Gap Inc.
(Times)
Potential market opportunity to address unmet needs
© Kirin Holdings Company, Limited 48
Immunization
Revitalization
Multi-balance
Lifestyle-related
disease
Diet Beauty
Hormone
Relaxation (Sleep)
Dementia
Eye Care
Oral
Intestinal
regulation
Liver Function
Bones and joints
Muscular
Blood circulation
0
1
2
3
4
5
6
35.0 40.0 45.0 50.0 55.0 60.0 65.0 70.0 75.0
Ga
p
(x
)*
✖
New research areas
Strengths of each company
Degree of
dissatisfaction (%)*
* Degree of dissatisfaction (%):
Percentage of respondents who answered
"neither", "not very satisfied", or "not satisfied"
in the five-scale survey
* Gaps (x):
Percentage of people who want to cope /
Percentage of people is coping
Markets associated with infectious disease and aging population
health needs where Kirin Group can leverage its strengths
100 bn yen
300 bn yen
200 bn yen
Market Size
Image
Source:
- 2019 Kirin Health Cluster Survey
- Market Size Forecast for 2020, H・B Foods Marketing Handbook
2020 №1.№2, Fuji Keizai
Kirin Group's Strengths by Needs
© Kirin Holdings Company, Limited 49
Pharma Food
Health
Science
Food &
Beverages
Supplements
Personalized
Products/
Services
Pharma-
ceuticals
Functional
Foods &
Beverages
Innovation Across Food and Pharma
Kirin's Inter-connected Businesses
© Kirin Holdings Company, Limited 50
Value Creation
Core
competencies Foundations for driving
innovations Consumer centric
marketing expertise
Diversity and inclusion,
culture for innovation
Core technology that assures value creation:
Fermentation & Biotechnology ICT accelerating
value creation
Inn
ova
tion
Pharma Food
Health
Science Food, Health Science
and Pharma are all
core businesses,
relying on Kirin's core
competencies and
sharing synergies in
product development,
channel optimization,
joint-marketing and
many other fields
Kirin Group Is Structured for Sustainable Growth
© Kirin Holdings Company, Limited 52
Robust Capital Allocation Policy
Operating
Cash Flow
Investment
Cash Flow
Free Cash Flow
1. Stable dividend
2. Growth investment Priority 1: Food
Priority 2: Health Science
3. Share buyback
© Kirin Holdings Company, Limited 53
Track Record of Commitment to Compelling Capital Returns
30%+ 40%+
Consolidated dividend payout ratio
DPS increased from 38 yen to 65 yen since the CEO’s appointment in 2015. Announced Share
Buybacks of 100bn yen (200bn yen in total) for two consecutive years in 2018 / 2019
Trends in Annual Dividends & Share Buybacks
Annual Dividends
(Left axis / yen)
Share Buybacks
(Right axis / bn yen)
Source: Bloomberg / Factset base
Note:
1 Average from 2015 to 2019 (CEO Yoshinori Isozaki's tenure)
100
80
60
40
20
Dividend Payout Ratio¹
Share Buybacks / Free Cash Flow¹
68%
35% 43%
International PeersDomestic Peersキリン
7% 2%
29%
International PeersDomestic Peersキリン
© Kirin Holdings Company, Limited 54
8.2%
5.9%
7.1%
5.6% 5.1%
6.7%
Kirin Domestic Peers International Peers
Consistent Performance Above Cost of Capital
During CEO's tenure, Kirin has maintained an ROIC above its WACC,
performing ahead of peers
WACC
ROIC
Source: Bloomberg, FactSet as of March 6, 2020
Note:
1 Adjusted NOPAT (excl. asset/goodwill impairments and other major non-recurring expenses) divided by Total Invested Capital (Total Debt plus Total Shareholders Equity plus
other adjustments)
Average ROIC¹ vs. WACC FY2015-2019
The Company is committed to reaching 2019 MTBP Target of 10%+ by 2021
2.6%
Best-in-class
0.8%
0.4%
© Kirin Holdings Company, Limited 55
Strategic Investments in 2019 for Sustainable Growth
Kirin fully appreciated the challenges and opportunities facing the Company
in 2019 and made imperative strategic decisions to position itself for sustainable growth
Str
ate
gic
Co
nsid
era
tio
ns
Strategic
Priority Position Kirin for long-term sustainable growth
Open new growth avenue in Health Science
Portfolio
Criteria
Complementary to Kirin's core competencies in
Fermentation & Biotechnology Various applications and products rooted in
Fermentation & Biotechnology
Shared
Corporate
Values
Committed to solving social issues and contribute
to better quality of life Committed to contributing to the health and
well-being of people around the world
Investm
en
t
Evalu
ati
on
High-Growth
Market Expanding market with strong growth prospect
Rapidly expanding Health & Wellness Food market,
expected to reach 4.1 trillion yen
Business
Strength
Competitive business with clear value proposition
and market-leading position Market leader in integral
pharma ingredients
Market leader in
supplements / beauty
Potential
Synergies
Significant synergies with Kirin's existing
businesses
15-18bn yen of Health Science's Normalized OP,
including 5.5-7.0bn of synergies with FANCL, in 5 years
Stake Acquisition
Capital and
Business Alliance
© Kirin Holdings Company, Limited 57
Medium-Term Business Plan Progress and Challenges
Strengthen
position in
Craft Beer
market
Tap Marché
exceeds 13,000
locations
Acquired
New Belgium
Brewing in US
Launch new
initiatives
driving
profitability
Rapidly
changing
Beer market
Thoroughly review
the Quality
Assurance structure
Pursue new
synergies
Equity
business
alliance with
FANCL
Establish
Health
Science
platform
Expansion
of Health and
Wellness
markets
(alcohol tax revision,
beer market contraction)
Maintaining progress while addressing potential issues
© Kirin Holdings Company, Limited 58
Value Creation Initiatives
Food Alcoholic and non-
alcoholic Beverages
Pharma
Health
Science
Strengthen core business, invest and expand
► Increase support for "new genre" products and expand Beer and
Spirits product portfolio
► Strengthen focus on non-alcoholic and craft beer
► Invest in sugar-free and low-sugar products
Launch global strategic products in the US and Europe,
and increase revenues and profits
► Expand indication of Crysvita for adults
► Launch Poteligeo in Europe
Revitalize Kyowa Hakko Bio and Capture Synergies
► Revitalization plan underway with the aim of transforming Kyowa
Hakko Bio into a highly profitable business by 2027
► Significant synergies with FANCL across the whole value chain
and expects that these opportunities will unlock approximately
5.5-7 bn yen in Normalized OP to Kirin in 2024 and grow Health
Science Normalized OP to 15-18bn yen
1
2
3
© Kirin Holdings Company, Limited 59
KV2027 Normalized OP Growth
2018 2021 2027
199.3 bn yen
Medium-term
plan 2016
Medium-term
plan 2019
KV2027 Announced in Feb 2019
CAGR
4〜6%
vs. 2018
Pharma
Health Science
Food
© Kirin Holdings Company, Limited 60
Kirin Brewery FY2019 Financial Results
1 Value Creation Initiatives in Food Business
Continued market outperformance with improved revenue and profits
FY2019 Plan
Focus on core products
Year-on-year increase
in revenues and profit with Normalized OP margin of
21.4%
FY2019 Actual Normalized OP (bn yen) / Normalized OP margin
Beer sales volume
Market: appx. -1%
Kirin Brewery: +0.3%
* Revenue excluding liquor tax
*
© Kirin Holdings Company, Limited 61
Kirin Brewery Long-term Management Vision
1 Value Creation Initiatives in Food Business
25% Normalized OP margin by 2027 (based on revenue excluding liquor tax)
Normalized OP (bn yen)/Normalized OP Margin*
84.0
21.2%
2020 2027
25.0%
* Liquor tax excluded Revenue ratio
70.8 71.6
80.9
83.3 84.0
© Kirin Holdings Company, Limited 62
Kirin Beverage 2019 Results / 2020 Plan
Steady results in the first year of the medium-term plan
Enhance sales by investing in sugar-free and
low-sugar categories, including Go-go-no-
kocha and Namacha
Improve container mix by raising ratio of small
PET bottles
Sustainable supply chain (Kirin Gateway,
door-to-door warehouse, SKU optimization)
FY2019 Plan
FY2019 Actual Normalized OP (bn yen) / Normalized OP margin
Existing brands × Sugar-free and
low-sugar
FY2020 Plan
Profit generation through
CSV-centered growth
1 Value Creation Initiatives in Food Business
© Kirin Holdings Company, Limited 63
Lion Pty Limited 2019 Results / 2020 Plan
Aggressive competition in H1 required
additional investment in our brands and
strategic initiatives.
Decrease of Normalized OP is mainly
driven by ongoing additional investment in
our brands and lower recovery of supply
chain costs.
Focus resources on consumers to
grow our brands
Focus on avenues for growth
through Craft in US/UK
Transform our cost base to provide
fuel for growth
Execute the Australia ERP
implementation
FY2019 Plan
Focus on growth categories
FY2019 Actual
Implement global craft beer strategy
Aggressive competition in H1 impacted FY2019 results
FY2020 Plan
1 Value Creation Initiatives in Food Business
Lion will continue to judiciously invest in craft and digital capabilities in FY2020
© Kirin Holdings Company, Limited 64
Kyowa Kirin 2019 Results / 2020 Plan
FY2019 Plan FY2020 Plan Expand indication of Crysvita for adults
Launch Poteligeo in Europe
Maximize value of
global strategic products
FY2019 Actual
New products, such as Crysvita and
Poteligeo, are steadily penetrating US and
European markets
Nourianz launched in the US in October
Increased revenue from technology license
related to Fasenra
Revenue: +34.3bn yen
Normalized OP: +5.0bn yen
KW-6356
Parkinson's Disease
Phase 2
Japan
KHK4083
Atopic dermatitis
Phase 2
International
collaboration
RTA 402
Chronic renal disease
Phase 3
Japan
Revenue: +21.2bn yen
Normalized OP: +8.6bn yen
Major Pipelines
YoY YoY
Value Creation Initiatives in Pharmaceuticals 2
On track with a launch of global strategic products in the US and Europe. In 2020, we
anticipate increases in revenues and profits due to Crysvita expansion and Poteligeo launch
© Kirin Holdings Company, Limited 65
Market Potential of Biopharmaceuticals
Value Creation Initiatives in Pharmaceuticals 2
Small molecules
2000 2024 (Forecast)
Biopharmaceutical share of
the global drug market
8.8% 32.6%
Global sales of
biopharmaceuticals
(Millions of USD)
Biopharmaceuticals
0
100,000
200,000
300,000
400,000
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Source: EvaluatePharma® 13 Feb 2020, © Evaluate Ltd
© Kirin Holdings Company, Limited 66
As a provider of amino acids for infusions that are
broadly used in surgery, Kyowa Hakko Bio is
responsible for a major share of global supply.
Kyowa Hakko Bio is the world’s only producer of multiple specialty products
Global leader for amino acids
for infusion
(as part of an oligopoly of
4 companies)
Case
1
As a sole supplier in Japan, Kyowa
Hakko Bio manufactures many
integral ingredients for
pharmaceuticals and infant nutrition
Case
2
FAD Flavin Adenine Dinucleotide Sodium
Pharmaceutical vitamin
applications
ATP Adenosine Triphosphate
Dizzy pharmaceutical
ingredients
Lysine Glutamate
Ingredients for food for infants with phenylketonuria
Treating symptoms of cognitive disability due to the inherent
mobility to metabolize phenylalanine, an essential amino acid
Kyowa Hakko Bio's Integral Position in the Market
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 67
Revitalize and Grow Kyowa Hakko Bio
Achieve business revitalization in two years and complete the transition
to a high-profit business within five years.
Establish a highly profitable product pipeline by 2027
2020 to 2021 Revitalization
2022 to 2024 Transition to
high profitability (Structural improvements)
2025 to 2027 Significant growth
(Expand as a highly
profitable company)
Start-up and stabilize operation of production base (plant in Hofu)
Achieve full compliance with GMP and pharmaceutical regulations
Rebuild production and standard operating procedure (SOP)
Improve production base (Hofu) capacity utilization
Complete development of highly profitable portfolio
Begin increasing overseas production
Capture profits from Human Milk Oligosaccharides
Achieve significant growth by introducing multiple high
proprietary materials to the market utilizing unique
fermentation technology
Capture profits from essential medicines
Capture profits from anti-aging materials
Operating procedure (SOP) issues
were identified in August 2019
It was discovered that some products were not manufactured
as instructed in the Standard Operation Procedure (SOP)
Review quality assurance systems
Educate employees, review procedure manuals, and
automate equipment
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 68
Foundation
Research
Application
Research Merchandise
Development
Manufac-
turing
Sales
Channel
Group Support Framework for Revitalizing Kyowa Hakko Bio
Functional evaluation
Masking technology
Beverage development
packaging
EC and
B2B
Pharmaceutical
discovery seeds
Highly proprietary
materials research
Manufacturing technology and
production control engineering
Low-cost fermentation
production technology
Food and
pharma seeds
Not applicable for pharmaceuticals
Formulation
technology
Brand and wholesale
distribution Online sales
Support
Leverage KIRIN's strengths in production technologies and production
management capabilities to revitalize Kyowa Hakko Bio within two years
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 69
2024 2027
Kyowa Hakko Bio's Significant Growth Potential
Food: Human Milk
Oligosaccharides
Pharma*: essential
medicines
Beauty*: anti-aging
material
(*Conventionally used natural
product extraction method)
15.0bn yen
9.5bn yen
Value drivers
Accelerate efforts to
build high margin
portfolio aiming to
achieve financial
targets ahead of
2024
Margin Improvement Robust growth
Kyowa Hakko Bio’s projected Normalized OP
Kyowa Hakko Bio’s product pipeline expected to include multiple
high-performance materials for food and pharma, generating substantial
profit and robust growth
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 70
Growth Scenario Example: Human Milk Oligosaccharides
Low-cost
Fermentation
Production
technology
Production of
Human Milk Oligosaccharide
(HMO) ingredients
Market size 180.0bn yen in 2030
In-house sales 10.0bn yen by 2027
Normalized OP 2.0bn yen or more
by 2027
What is human milk oligosaccharide (HMO)?
Oligosaccharides are in human breast milk (primarily colostrum). There is
evidence they support immune activation, intestinal protection, prebiotics,
brain function development, etc.
Potential use case of processed HMO through fermentation production
Mixing with powdered milk to improve health of babies
Provide the benefits of breastfeeding beyond childhood (Health and Well-being foods, etc.)
Manufacturing
technology and
production control
Global expansion
in B2B businesses
Expansion in
B2C businesses
With fermentation technology that can be mass-produced at lower cost
than competitors, the company will contribute to the promotion of
healthy lifestyles while maintaining high profit margins
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 71
2015 2016 2017 2018 (Prospect)
Kirin and FANCL Competitive Advantages in Foods with Function Claims (FFC)
No.1
FFC
brand*
No.1
function
al non-
alcohol
beer
brand*
Maintain
and grow
market
share
since
foundation
of FFC
regulation
CAGR:
97.2%
CAGR: 21.8%
CAGR: 67.6%
FANCL and Kirin's Strengths Growth potential of FFC
+
2015 2016 2017 2018
Source: TPC Marketing Research, Nikkei Telecon
FANCL: supplement category, H · B Foods Marketing Handbook Fuji Keizai
※ TPC MARKETING RESEARCH: MARKET ANALYSIS OF FOODS
with FUNCTIONAL PRESENTATION 2019 and INTAGE SRI18/01-2019/10
Calolimit Mets
Total market share of the 2 companies
Kirin Perfect Free
Calolimit
30.5
98.2
185.5
233.8
0
50
100
150
200
250
2015 2016 2017 2018
(bn y
en)
2015 2016 2017 2018 (Prospect)
Kirin is a health food pioneer with strong market share and expertise
1st
in Japan
1st
in Japan
1st
in Japan
1st
in Japan
1st
in Japan
1st
in Japan
1st
in Japan
(Prospect)
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 72
What is Foods with Function Claims (FFC) under Japanese Regulation?
Foods in General Foods with Health Claims
Pharmaceutical
Products /
Quasi-drugs
Food and Health
foods
Foods with
Function Claims
(FFC)
Foods with Nutrient
Function Claims
Foods for Specified
Health Users (FOSHU / Tokuho)
Medicine
Cannot label a
function claim
Can label a
function claim
Scientific evidence on safety / functionality
and trust in the brand are critically important
Growth potential of FFC Unlike FOSHU (or Tokuho), the product is not
individually pre-approved by the Secretary General of
the Consumer Affairs Agency, so operators must
display their labeling at their own risk and based on
scientific evidence from clinical trials.
30.5
98.2
185.5
233.8
0
50
100
150
200
250
2015 2016 2017 2018(
bn y
en)
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 73
Product development
Health and wellness
Joint research
Material and product
development
Skincare
Leverage Kirin
technology and
expertise
Container recycling and
environmental initiatives
Marketing
collaboration
Marketing based on
demographics and
consumer needs
Near, medium, and
long-term initiatives
R&D Health and
Wellness
Channel infrastructure
Channel Infrastructure, Functional
Efficiency (Cost)
1. Channel Infrastructure Synergy
Collaboration of FANCL and Kyowa Hakko Bio on
mail-order / e-commerce channel
Leverage FANCL sales channel for Koiwai Dairy
and Mercian products
Health and wellness management promotion project
Leverage Kirin vending machines (Tappiness)
Introduce mutual distribution and business partners
To streamline value chain (marketing, etc.)
Joint production and distribution
Review procurement
Co-Promotion, co-PR, etc
Mutual utilization of
infrastructure
Exchanges
Promoting mutual
understanding
Employee exchanges
Information exchanges
Seminars and workshops
Install Kirin vending machines
in FANCL facilities
Cross-
Promotion
Kirin’s Initiatives to Create Synergies with FANCL
Four sub-committees exploring immediate synergy initiatives;
Conducted 200+ study sessions and meetings so far
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 74
Capturing Synergies from FANCL Alliance
Value Creation Initiatives in Health Science 3
■ Channel Synergies: 0.5 – 1.0bn yen
Contributions to Kirin Holdings' Normalized OP
5.5~7.0
bn yen
3.0~4.0
bn yen
■ Functional Efficiency Synergies: 2.5 – 3.0bn yen
2024
FANCL synergies to contribute ~5.5 to 7.0bn yen
to Normalized OP by 2024
■ Product Development Synergies: 2.5 – 3.0bn yen
© Kirin Holdings Company, Limited 75
Three Areas of Synergies and Specific Initiatives
① Product
Development
Utilize both companies'
materials and
technologies
Normalized OP 2024 (for Kirin Holdings only)
Beginning in 2020 2021 and beyond
② Channel
Leverage both
companies’
sales chsannels
Leverage brands and
materials to develop in the
food and beverage fields
according to customer needs
Develop supplements through
FANCL and Kirin's channels through
joint research
③ Functional
Efficiency
Improve margins
through cost synergies
Leverage FANCL sales channel
for Kirin's products (Food
domain)
Leverage e-commerce platform and customer data
(Kirin and KHB) to reduce marketing costs by
optimizing marketing spends
Efficient operation of R&D and manufacturing facilities, etc.
+2.5 to 3bn yen
+0.5 to 1bn yen
+2.5 to 3bn yen
Leverage KHB sales channel for
FANCL's products
Leverage FANCL sales channel
of mail-order / e-commerce and
transboundary EC
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 76
2020 2024 2022
2.0bn yen or more
0.0 bn yen (Upfront investment)
10.0bn yen
1.9bn yen
12.5bn yen
2.5bn yen
Revenue synergy for Kirin
Normalized OP
Leveraging FANCL’s brand
and expertise
Seniors' health
needs Muscular / Bone / Blood
circulation / Alertness
Offering
personalized
healthcare
Promoting
business by
offering the
self-health
checking
devises
Leveraging FANCL’s brand and expertise
Needs for working
healthy over the
long term (Life-
induced diseases,
etc.)
Women's health
needs
Nutritional needs
for younger
generation
Other
Key needs
• Bones and joints • Immunization • Blood circulation • Prevention of dementia
• Lifestyle-related diseases
• Digestive regulation • Multi-balance • Muscular • Sleep
• Diet • Skin Care
• Nutrition & revitalization
• Liver function • Eye Care • Hormones
Immunization
Fatigue recovery / Sleep improvement
Improving concentration
Odor reduction • Oral
Major Products Contributing to
Earnings Assumed as of today
supplement
Drinks (Kirin Beer)
Drinks (Kirin Beverage) Supplements
Supplements
Supplements
Supplements
1. Product Development Synergies: Roadmap
New products and supplements utilizing FANCL brands and proprietary materials
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 77
1. Product Development Synergies: Initiatives after Fall 2020
Kirin Beer Kirin Beverage FANCL
Non-alcohol beverage Leverage FANCL brands Utilize proprietary materials
developed by Kirin
Fal l 2020
Joint product development targeting launch in Fall 2020
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 78
B to C development
Kirin Beverage
「naturals」
B to C development
Delivery channel
E-commerce and Direct
sales channel
2020 2024 2022
1.8bn yen
0.2bn yen
4.0bn yen
0.5bn yen
6.0bn yen
0.7bn yen
Revenue synergy for Kirin
Normalized OP
2. Channel Infrastructure Synergies: Roadmap
Utilize Kirin and FANCL's sales and distribution channels to expand customer reach
Mutual utilization of
E-commerce
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 79
<Increase in visitors to FANCL’s
e-commerce site>
Promotions on FANCL’s e-
commerce site that sends
visitors to Kyowa Hakko Bio’s
online store
<Increase in sold products
(SKUs) at KHB>
Develop tailored FANCL
supplements for Kyowa
Hakko Bio’s customers
Reach 3mn people 90% retention rate
Customer
base
Main
Synergies
to Kirin
Main users: Women aged 30-50
No. of active users: 3mn people
% of regular mail order: 50%
Main users: Men aged 60+
No. of active users: 240,000
% of regular mail order: 90% or more
Merchandise
Portfolio
Cosmetics: Approximately 150 products
Supplements: Approximately 110 products Approximately 25 products
Net sales* FANCL Cosmetics: 56.7bn yen
Supplements: 43.9bn yen (same) 8.5bn yen
+ Direct managed
stores
Expand customer base and sales through inclusion of Kirin products at FANCL
stores and mutual utilization of e-commerce channels
2. Channel Infrastructure Synergies: FANCL and KHB
Data as of Mar. 2019, both for FANCL and KHB
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 80
FANCL
(Results for
2019)
13%
KHB+
Kirin Health Science Business
2019 2024
Industry
average
Improved marketing efficiency by
leveraging FANCL’s in-store sales and e-
commerce platform:
Enhancing brand recognition of Kyowa
Hakko Bio while saving marketing costs
Expansion of Kyowa Hakko Bio's
product portfolio (increase in SKUs):
Decrease media buying cost per
customer
Despite high product satisfaction…
Product recognition remains low
Aggressive sales activities targeting new
customers
Media buying cost per active user is high
Small number of SKUs and difficulty in
bundling products
Me
dia
bu
yin
g c
os
t /
Sa
les
Factors behind high Media Buying cost
Cost reductions through collaboration
with FANCL 10%
Normalized OP is
expected to
improve by approx.
over 2 bn yen
40% +
Less than
30%
Reduce Health Science media buying costs by leveraging FANCL’s marketing
platform. Optimize marketing spend per customer by bundling existing products
3. Functional Efficiencies: Cost Synergies Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 81
Product supply
Cost synergy
Launch proprietary products only available
on KHB’s e-commerce site from spring 2021
Production
Outsourcing
Mishima Factory begins
operations in Spring 2021
FANCL’s new manufacturing plant, set to be operational in 2021, will produce
proprietary products for exclusive sale on Kyowa Hakko Bio’s e-commerce site.
We are also evaluating cost-reduction initiatives including development of
National Brand products manufactured by Kyowa Hakko Bio.
3. Functional Efficiencies: Joint Production Facilities Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 82
Realization of Speedy Output (1)
Sales through combined channels
×
Customer referrals from Kirin’s Institutional Sales
Channel (February)
Joint R&D generated outcome
Product Development Synergies in Food (January) Skincare Synergies (January)
Sales exceed
forecast by 2x;
90% of consumers
were new to
FANCL
With their strong
reputation,
enriched
vegetables
will be included in
the regular menu in
the Kirin City (Kirin
restaurant)!
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 83
Realization of Speedy Output (2)
Kirin's brain and immunology / intestinal business began research with FANCL.
Additionally considering joint renal research for Kyowa Kirin
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 84
Profit Contributions from Health Science
+2.5 to 3.0
bn yen
+8.5 to 9.5
bn yen
+3.5 to 4.0
bn yen
+1.0 to 1.5
bn yen
2020 2021 2022 2023 2024
2024
+15.0 to 18.0 bn yen
FANCL Synergies (Contribution to Food)
FANCL Synergies (Contribution to Health
Science)
New Products (Brain,
Kidney, Immunology, Intestine)
(Kirin R&D, Kyowa Kirin Joint
Research, etc.)
Kyowa Hakko Bio (excl. FANCL Synergy)
15.0 – 18.0bn yen of Normalized OP from Health Science in five years;
including 2.5 – 3.0bn yen of FANCL synergies in Food domain
Contributions to Kirin
Holdings' Normalized OP
Total Health Science
Normalized OP
15.0 to18.0
bn yen
Value Creation Initiatives in Health Science 3
© Kirin Holdings Company, Limited 86
Governance Structure After the General Meeting of Shareholders
Composition of the Board of Directors:
In May 2019, we became a member of the 30% Club Japan, with the goal of achieving 30% female on its Board of Directors by 2030.
We are also promoting the Women's Leadership Target KWN2021, aiming for a rate of 12% by 2021.
General Meeting of Shareholders
Operating Companies
Executive Officers
President and CEO Group Executive Committee
Audit and Supervisory Board Board of Directors
Independent
Accounting Auditor 3 Independent
ASB members
2 Inside
ASB members 7 Non-executive Directors,
including Chairman
5 Internal
Directors
Female: 2 (17%) International: 2 (17%) *Figures in parentheses are percentage of total Directors
Audit Audit
Group CSV
Committee
Group Risk and
Compliance
Committee
Group
Information
Disclosure
Committee
Nomination and Remuneration
Advisory Committee
3 Independent Directors,
Including Chairman
2 Internal
Directors
International Advisory Board
4 Independent
International Experts,
Including Chairman
3 Officers
of Kirin
© Kirin Holdings Company, Limited 87
Changes to Board of Directors’ Composition
Kirin’s Board of Directors has re-defined key expertise/experience required to
achieve the Long-term Management Vision as below: (Based on the results of the “Evaluations of the Board of Directors' effectiveness” conducted in FY2018 and FY2019)
If all the candidates proposed by Kirin are approved, Non-executive Directors will represent the majority of the Board of Directors (58.3%)
Additional increase of Non-Executive Directors
Corporate
Management
ESG/Sustainability
HR/Management/
Talent Development
Finance/Accounting
Legal/Compliance/
Risk Management
SCM International Business
R&D/New Business/
Health Science
Brand Strategy/
Marketing/Sales
At FY2019 “Evaluations of the Board of Directors’
effectiveness”, the following measures for FY2020
were identified to strengthen BOD's effectiveness:
To strengthen the supervisory function, the following 4 Non-executive Director
candidates (new candidates) are proposed based on the deliberations at
Nomination and Remuneration Advisory Committee (their career profile is as stated below)
Discussion on “Composition of Board of
Directors and its management” to supervise
and provide opinions on Health Science
business, etc. from professional and
objective perspective
Discussion on "risk management" to
address risk from globalization and
complex business dynamics (complex
transactions)
Chieko Matsuda
Corporate management based on her
specialized expertise in finance and
corporate governance
Noriko Shiono
Corporate management and marketing based
on her specialized expertise in pharmaceuticals
and healthcare strategy
Sir Rod Eddington
Corporate management based on his
global specialized expertise
George Olcott
Corporate management based on his academic
expertise in human resource development and
corporate governance in global management
© Kirin Holdings Company, Limited 88
Corporate Governance Platform Leading Other Japanese Companies after AGM
Strengthen monitoring functions by increasing the diversity and expertise of Board of
Directors - conduct strategic reviews of investment projects as appropriate
33% 58%
FY2019 FY2020
Total # of Board of Directors
Internal directors
Non-executive directors
Independent directors
(% of Independent directors)
Female
International
9
5
4
3
33%
0
0
12
5
7
7
58%
2
2
Health Science
ESG / Sustainability
Brand Strategy /
Marketing
Overseas business
Finance / Accounting
Priorities for
Enhancing Skillset
* International ** Female
Independent
officer ratio
* Health Science
Chieko Matsuda
Noriko Shiono
Rod Eddington
George Olcott
Noriko Shiono
*
Non-executive Non-executive
** *
* ** * Non-
independent Chairman Chairman
Internal Internal
© Kirin Holdings Company, Limited 89
Non-
executive
Directors
Inter-
national
Female
TOPIX Avg.
(> 1,500 companies1)
(market cap. > 1tn yen)
28%
1%
6%
58%
17%
17%
(4/7)
(2/7)
(2/6) (2/9)
(5/9)
<Examples2>
Board of Directors' Composition:
A Leader in Corporate Governance Structure in Japan Few Japanese companies have governance system more robust than Kirin.
Of companies with corporate auditors, there are only 10 companies in Japan including Kirin that
have 1. a majority of independent Non-executive directors,
2. meaningful international representation on the board and 3. meaningful diversity on the board
Notes:
1 Companies with internal auditors out of TOPIX constituent stocks
2 Based on convocation notice of the latest AGM of each company
(2/9)
© Kirin Holdings Company, Limited 90
Kirin's Commitment to Improve Corporate Governance
Reflecting Shareholders' View
97.0%
98.4%
98.6%
98.6%
98.4%
99.6%
75.0%
99.6%
99.6%
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
磯崎功典
西村慶介
三好敏也
横田乃里也
小林憲明
荒川詔四
永易克典
森正勝
柳弘之
2017年
2018年
2019年
2017 2018 2019 2020 # of years
in office
Non-
executive
Director
Indepen-
dence
Yoshinori
Isozaki 98.9% 98.4% 97.0% Reappointment 5 years
Keisuke
Nishimura 99.1% 98.5% 98.4% Reappointment 8 years
Toshiya
Miyoshi 99.1% 98.5% 98.6% Reappointment 5 years
Noriya
Yokota 98.5% 98.6% Reappointment 2 years
Noriaki
Kobayashi 98.4% Reappointment 1 year
Shoshi
Arakawa 99.3% 99.3% 99.6% Reappointment 5 years 3 3
Katsunori
Nagayasu 93.7% 82.6% 75.0% Retired – 3 7
Masakatsu
Mori 99.6% Reappointment 1 year 3 3
Hiroyuki
Yanagi 99.6% Reappointment 1 year 3 3
Historical Approval Rate of the Board of Directors (BOD)
© Kirin Holdings Company, Limited 91
Performance-linked Remuneration System for Directors and Officers
Kirin shall establish a remuneration
structure that emphasizes the linkage of
compensation with business performance
and mid- to long-term value creation
Remuneration System for Officers
Remuneration levels shall be appropriate
for the roles and responsibilities of Kirin
Group’s officers
Remuneration shall be deliberated by the
Nomination & Remuneration Advisory
Committee, on which Non-executive Directors
will constitute a majority in order to ensure
objectivity and transparency
Nomination and Remuneration
Advisory Committee
Majority Non-executive Directors, including its
Chairman, to ensure objectivity and transparency.
Their term of office shall be one year
Committee members after the General Meeting of
Shareholders on Mar. 27, 2020 (scheduled):
Non-Executive Shoshi Arakawa (Chairman),
Hiroyuki Yanagi, Chieko Matsuda
Internal Yoshinori Isozaki
Toshiya Miyoshi
Purpose of Revising the Remuneration System
Remuneration changes for Non-executive Directors
result from an increase of Non-executive Directors
Raise the amount to 50mn yen from 80mn yen by increasing the number of
Non-executive Directors (4 to 7)
Secure an incentive scheme to improve business performance
and enterprise value in the mid to long term
If Kirin underperforms, some shares are not granted under the current system
(downward rigid incentive scheme)
Create an easy-to-understand incentive plan because the number of shares
to be delivered currently fluctuates in line with business performance
Stable and efficient remuneration system
Implement a stable remuneration system in the process of determining business
performance by entrusting funds to a trust bank
The new stock compensation, “Board Incentive Plan Trust (BIP Trust) Scheme”
will lighten the administrative burden, such as resolutions by the Board on
allocation/lifting restrictions and the signing of agreements with each director.
This will allow directors to focus more on the discussion of important issues
facing the company
© Kirin Holdings Company, Limited 92
Changes With the Revision of Performance-linked Remuneration System
Directors Current Proposed
Award type Restricted Share Compensation System Business Incentive Plan Trust
(BIP Trust) Scheme
Eligible participants Internal directors Internal directors /executive officers
(commissioned)
Ceiling Up to 250mn yen per year Up to 600mn yen per year
The number of shares to be delivered Up to 312,500 shares per year Up to 600,000 shares per year
The proportion to the Kirin’s outstanding shares
Approx. 0.035% Approx. 0.069%
Vesting period 2-3 years 3years
Performance Hurdle
Restriction on all or part of shares to be
allocated will be lifted after the expiry of
the restriction period
in line with the key performance
indicators set in the Medium-Term
Business Plan and others defined by
the Board
Ranges between 50-150%
in line with the key performance
indicators set in the Medium-Term
Business Plan and others defined by
the Board
© Kirin Holdings Company, Limited 93
Performance evaluation period
Restricted
shares
Not
granted
2-year vesting period Stock
Busin
ess p
erfo
rmance
Grant restricted
shares
Define the no. of shares to be delivered
Define the no. of shares for which restriction is lifted in line with performance
(33-100%)
The transfer
restriction is lifted
Restricted
shares
3 Years
Be
fore
Performance evaluation period 2-year vesting period
Cash
Busin
ess p
erfo
rmance
Define the no. of shares to be delivered
Deliver Kirin's shares (equivalent to tax
payment obligations)
Afte
r
Grant points in line with performance
Grant
points
Stock
Changes in Structure of Stock-based Remuneration
© Kirin Holdings Company, Limited 94
Overview of BIP Trust Scheme
2020 2021 2022 2023 2024 2025
Deliver Kirin's shares
※ partially paid in cash
3-year vesting period
Grant certain share delivery points
Performance-linked factor ranges between
50-150%
Performance
evaluation
period
Deliver Kirin's shares
※ partially paid in cash
3-year vesting period
Grant certain share delivery points
Performance-linked factor ranges between
50-150%
Performance
evaluation
period
Deliver Kirin's shares
※ partially paid in cash
3-year vesting period
Grant certain share delivery points
Performance-linked factor ranges between
50-150%
Performance
evaluation
period
© Kirin Holdings Company, Limited 95
Calculation of Bonus
Business performance
pay rate
=
Target Max.
Pay rate
Consolidated
OP
200%
×A ×B
150%
100%
50%
0% Min.
Individual performance
pay rate
Target Max.
Pay rate
Evaluation indicators
for commissioned
work
200%
150%
100%
50%
0% Min.
Ind
ivid
ua
l pa
ym
en
t am
ou
nt
Ba
sic
bo
nu
s a
mo
unt
× +
(Notes) 1. The amount of basic bonus is defined by rank/title
2. "A" shows the ratio linked with business performance and "B" shows the ratio linked with individual performance
For Chairman of the Board and President & CEO, A=100% and B=0%; for other Directors, A=60% and B=40%
© Kirin Holdings Company, Limited 96
Calculation of Performance-linked Factors
Non-financial
evaluation
pay rate*
A 150%
B 125%
C 100%
D 75%
E 50%
Normalized EPS
pay rate
ROIC
pay rate
Pe
rform
an
ce lin
ke
d fa
cto
rs
=
Target Max.
Pay rate (%)
ROIC
150
100
50
0
Min.
× 45% + × 10%
Target Max.
Pay rate(%)
Normalized
EPS
150
100
50
0
Min.
× 45% +
Non-financial evaluation pay rate*:
Non-financial evaluation focuses on the progress and achievement
of CSV commitment and comprehensively evaluates based on 4
key issues ("Responsible Alcohol Producer", "Health and Well-
Being", "Community Engagement" and "Environment")
For details please scan the QR code on the right 英語版
© Kirin Holdings Company, Limited 97
Kirin's Views on Shareholder Proposals - Revision of the Amount of Stock /Cash Compensation
The Board 's views: Against the shareholder proposal on remuneration for directors
Current remuneration
to directors Kirin's proposal
Basic remuneration
and bonus
(monetary
compensation)
950mn yen per year
Of which 80mn yen for Non-
executive Directors
Stock
compensation
Restricted Stock
Compensation System
250mn yen per year
· Excluding Non-executive
Directors
950mn yen per year
Of which 150mn yen for Non-
executive Directors
BIP Trust Scheme
600mn yen per year
· Including delegated
executive officers
· Excluding Non-executive
Directors
Shareholder proposal
600mn yen per year
Of which 80mn yen for Non-executive Directors
Restricted Stock Compensation System
1,200mn yen per year
· Excluding Non-executive Directors
Highlights
1. Implement a more easy-to-understand incentive structure
2. Raise the maximum amount of remuneration for Non-executive
Directors to 150mn yen with an increase of Non-executive
Directors
1. Does not apply for increasing the number of
Non-executive Directors
2. Restricted Share Compensation System will
remain and may hinder the introduction of
the new remuneration system deliberated
by the Nomination & Remuneration
Advisory Committee
© Kirin Holdings Company, Limited 98
Remuneration—Kirin's Proposal vs. FP's Proposal
Kirin's proposal FP's proposal
Eligible
participants
Internal directors
+
executive officers
(commissioned)
Internal directors only
Structure BIP Trust Scheme Restricted Stock
Compensation System Easy-to-
understand
Weak
incentive
Broad Narrow
Total
Remuneration
of 7 Non-
executive
Directors
80mn yen 150mn yen
Apply for the
increase in
number of
Non-executive
Directors
Does not
apply for the
increase in
number of
Non-executive
Directors
Kirin’s proposal supports shareholder value creation over the mid- to long-term
© Kirin Holdings Company, Limited 100
Skill Set of Board of Directors
Expertise and Experience
No. Name Corporate
Management ESG /
Sustainability Finance /
Accounting
HR Management / Development
Legal / Compliance / Risk
Management SCM
Brand Strategy / Marketing /
Sales
Overseas Business
R&D / New Business /
Health Science
1 Yoshinori Isozaki
2 Keisuke Nishimura
3 Toshiya Miyoshi
4 Noriya Yokota
5 Noriaki Kobayashi
6 Shoshi Arakawa
7 Masakatsu Mori
8 Hiroyuki Yanagi
9 Chieko Matsuda
10 Noriko Shiono
11 Rod Eddington
12 George Olcott
Reappoin
tment
New
candid
ate
s
The Board of Directors has defined the key areas of expertise and experience
required to achieve Long-term Management Vision as (1) Corporate Management,
(2) ESG/Sustainability, (3) Finance/Accounting, (4) HR/Management/talent
development, (5) Legal/Compliance/Risk Management, (6) SCM, (7) Brand
Strategy/Marketing/Sales, (9) Overseas Business, (10) R&D/New Business/Health
Science and has nominated director candidates with appropriate expertise and
experience in such areas
In FY2020 we focused on enhancing the Board’s expertise in Health
Science, ESG/Sustainability, Brand Strategy/Marketing/Sales,
“Overseas Business, and Finance/Accounting
Below is an overview of the Board’s skills should shareholders
approve Kirin’s director candidates at the Ordinary General Meeting of
Shareholders on March 27, 2020
Skill Set of the Board of Directors (BOD)
© Kirin Holdings Company, Limited 101
Diverse Board of Directors Including Non-executive Directors
with Independence
No. Name Independence
1 Yoshinori Isozaki
2 Keisuke Nishimura
3 Toshiya Miyoshi
4 Noriya Yokota
5 Noriaki Kobayashi
6 Shoshi Arakawa
7 Masakatsu Mori
8 Hiroyuki Yanagi
9 Chieko Matsuda
10 Noriko Shiono
11 Rod Eddington
12 George Olcott
Reappoin
tment
New
candid
ate
s
Skill Sets and Independence of the Board of Directors (BOD)
Independent Officers Notification Submitted to TSE
© Kirin Holdings Company, Limited 102
1
Reasons for nomination as a candidate for Non-executive Director
Ms. Chieko Matsuda has strong management, financial, and corporate governance expertise. She has
decades of management consulting experience, including at Booz & Company, where she was a partner,
and Moody’s. Ms. Matsuda is currently a Professor of Economics and Business Administration at Tokyo
Metropolitan University. She is a Director of Hitachi Chemical Company, Foster Electric, and SATO
Holdings. For the reasons above, the Board has determined that she, as Non-executive Director goring
forward, is suited to oversee business execution of the Company toward continuous improvement of
corporate value.
Chieko Matsuda Born: Nov. 18, 1964
Non-executive
Female
Expertise and Experience
Corporate Management
ESG / Sustainability
Finance / Accounting
Human Resources Management / Development
Legal / Compliance / Risk Management SCM
Brand Strategy / Marketing /
Sales
Overseas Business
R&D / New Business / Health Science
Profile Apr 1987 Joined The Long-Term Credit Bank of Japan, Limited
Oct 1998 Joined Moody’s Japan K.K.
Sep 2001 Joined Corporate Directions, Inc.
May 2006 Representative Director of Matrix, Inc.
Oct 2006 Vice President (Partner) of Booz and Company, Inc.
Apr 2011 Professor of School of Business Administration, Faculty of Urban Liberal Arts
(Currently Faculty of Economics and Business Administration) at Tokyo Metropolitan University (Present)
Professor of Department of Business Administration, Graduate School of Social Sciences
(Currently Graduate School of Management) at Tokyo Metropolitan University (Present)
Jun 2013 Non-executive Director, Hitachi Chemical Company. Ltd.
Jun 2015 Non-executive Director of Foster Electric Company, Limited (Present)
Mar 2016 Non-executive Director of the Company (Present)
Jun 1016 External Director of SATO HOLDINGS CORPORATION (Present)
Significant positions concurrently held at other
companies and organizations
Non-executive Director, Hitachi Chemical Company. Ltd.
Non-executive Director, Foster Electric Company Limited
External Director, SATO HOLDINGS CORPORATION
Professor, Faculty of Economics and Business Administration,
Tokyo Metropolitan University
Professor, Graduate School of Management, Tokyo Metropolitan University
Chieko Matsuda: Candidate for Non-executive Director
Profile and reasons for nomination 3 Candidate for Independent Officer
© Kirin Holdings Company, Limited 103
2 Noriko Shiono: Candidate for Non-executive Director
Reasons for nomination as a candidate for Non-executive Director
Ms. Noriko Shiono as a Representative Director of pharmaceuticals manufacturer SSP Co. and President
of medical device manufacturer Widex Japan, brings deep expertise in pharmaceuticals and healthcare in
addition to corporate strategy and marketing experience. She served as President of Konami Sports, an
operator of fitness clubs and manufacturer and seller of fitness equipment and sports-related products.
We expect her to provide valuable insights to support our growth in health sciences. For the reasons
above, the Board has determined that she is suited to oversee business execution of the Company
toward continuous improvement of corporate value.
Noriko Shiono Born: Oct. 18, 1960
Non-executive
Female
Expertise and Experience
Corporate Management
ESG / Sustainability
Finance / Accounting
Human Resources Management / Development
Legal / Compliance / Risk Management SCM
Brand Strategy / Marketing /
Sales
Overseas Business
R&D / New Business / Health Science
Profile
Aug 1983 Joined Japan New Media Co., Ltd.
Mar 2010 Representative Director, Present of SSP Co., Ltd.
Jan 2014 President and Corporate Officer of Konami Sports & Life Co., Ltd.
(Currently Konami Sports Co., Ltd.)
May 2016 Chairman, Director of Konami Sports Club Co., Ltd.
Oct 2017 President of Widex Japan (Present)
Mar 2018 Non-executive Director of Kirin Company, Limited
Mar 2019 Strategic Advisor of the Company (Present)
Significant positions concurrently held at other
companies and organizations
President, Widex Japan
Profile and reasons for nomination 3 Candidate for Independent Officer
© Kirin Holdings Company, Limited 104
Sir Rod Eddington: Candidate for Non-executive Director 3
Reasons for nomination as a candidate for Non-executive Director
Sir Rod Eddington brings a strong international perspective acquired over many years as a corporate
executive and director of global companies. As one of Australia’s most experienced and accomplished
business leaders, he serves as Chairman, Independent Non–Executive Director of Lion Pty Ltd. He is
President of Australia Japan Business Co-operation Committee, and formerly serves as CEO of Cathay
Pacific Airways, Executive Chairman of Ansett, and CEO of British Airways. For the reasons above, the
Board has determined that he is suited to oversee business execution of the Company toward continuous
improvement of corporate value.
Sir Rod Eddington Born: Jan. 2, 1950
Non-executive
Male (International)
Expertise and Experience
Corporate Management
ESG / Sustainability
Finance / Accounting
Human Resources Management / Development
Legal / Compliance / Risk Management SCM
Brand Strategy / Marketing /
Sales
Overseas Business
R&D / New Business / Health Science
Profile
Sep 1979 Joined John Swire & Sons (H.K.) Ltd
Apr 1992 Cathay Pacific Airways Limited Managing Director
Jan 1997 Non-executive Director of John Swire & Sons (Australia) Pty Ltd. (Present)
Apr 2000 Chief Executive Officer of British Airways plc
Feb 2006 Non-executive Director of CLP Holdings Limited (Present)
Mar 2011 Director of Lion Pty Ltd*
Mar 2012 Chairman, Non-Executive Director of Lion Pty Ltd (Present)*
Significant positions concurrently held at other
companies and organizations
Chairman, Non-Executive Director of Lion Pty Ltd*
Non-executive Director, John Swire & Sons (Australia) Pty Ltd.
Non-executive Director, CLP Holdings Limited
* Non-executive directors
Profile and reasons for nomination 3 Candidate for Independent Officer
© Kirin Holdings Company, Limited 105
George Olcott: Candidate for Non-executive Director
Reasons for nomination as a candidate for Non-executive Director
Mr. George Olcott offers decades of international financial markets experience and deep expertise in
corporate governance and human resources. He is a Director of leading Japanese companies Hitachi
Chemical, DENSO Corporation, and Dai-ichi Life Holdings. He formerly served as Director of Nippon
Sheet Glass and NKSJ Holdings. We expect him to provide valuable input on corporate strategy,
corporate governance, and capital allocation. For these reasons, the Board has determined that he is a
suitable candidate to oversee business execution of the Company toward continuous improvement of
corporate value.
George Olcott Born: May 7, 1955
Non-executive
Male (International)
Expertise and Experience
Corporate Management
ESG / Sustainability
Finance / Accounting
Human Resources Management / Development
Legal / Compliance / Risk Management SCM
Brand Strategy / Marketing /
Sales
Overseas Business
R&D / New Business / Health Science
Profile
Jul 1986 Joined S.G. Warburg & Co., Ltd.
Feb 1999 President of UBS Asset Management (Japan)
President of Japan UBS Brinson Group
Jun 2000 Managing Director, Equity Capital Market, UBS Warburg Tokyo
Sep 2001 Senior Fellow, Judge Business School, University of Cambridge
Mar 2005 FME Teaching Fellow, Judge Business School, University of Cambridge
Mar 2008 Senior Fellow, Judge Business School, University of Cambridge
Apr 2014 Guest Professor, Faculty of Business and Commerce, Keio University (Present)
Jun 2014 Non-executive Director of Hitachi Chemical Co., Ltd. (Present)
Non-executive Director of DENSO CORPORATION (Present)
Oct 2016 Non-executive Director of Dai-ichi Life Holdings, Inc. (Present)
Significant positions concurrently held at other
companies and organizations
Non-executive Director of Hitachi Chemical Co., Ltd.
Non-executive Director of DENSO CORPORATION
Non-executive Director of Dai-ichi Life Holdings, Inc.
4
Profile and reasons for nomination 3 Candidate for Independent Officer
© Kirin Holdings Company, Limited 106
(For Reference Only) FP's Proposal for Outside Directors
Reason for the Proposal
Mr. Benes has an outstanding academic pedigree, and significant experience in finance and law gained
from his investment banking, M&A and advisory work across the globe, and also from his pioneering work
establishing Japan's only “public interest” non-profit specializing in director training. He currently serves
on two listed Japanese company boards, and based on his keen interest in corporate governance
and business ethics, proposed Japan's first corporate governance code to the LDP, and then assisted
the relevant persons including Japanese FSA with its formulation.
Nicholas Benes Birthday: April 16, 1956
Male (International)
Biography Important concurrent office
1983 Morgan Guaranty Trust Company of New York, Join the bar association of States of California
1984 Join the New York Bar Association
1990 Vice President at JP Morgan Securities Asia
1994 Senior managing director of Kamakura Co., Ltd.
1997 Establishing JTP Corporation, Representative director (present)
2000 Director of Alps Co., Ltd. (map company)
Special foreign member of Invest Japan Conference Subcommittee
2006 Independent director of LDH Corporation
2007 Independent director of Cecile Co., Ltd.
2009 Representative member of The Board Director Training Institute of Japan (present)
2010 Member of the Corporate Governance Liaison Committee hosted by the Financial Agency of Japan
2013 Visiting Scholar of International University of Japan, Graduate School of International Management
Part-time teacher of Hitotsubashi University
2016 Independent director of IMAGICA GROUP Inc. (present)
2019 Independent director of Advantest Corporation (present)
Establishing JTP Corporation,
Representative director (present)
Representative member of The Board
Director Training Institute of Japan (present)
Independent director of
IMAGICA GROUP Inc. (present)
Independent director of
Advantest Corporation (present)
Biography and reason for the proposal 7
© Kirin Holdings Company, Limited 107
(For Reference Only) FP's Proposal for Outside Directors
Biography and reason for the proposal
Reason for the Proposal
Ms. Kikuchi has vast experience with global pharmaceutical companies (GlaxoSmithkline, Novartis,
Bausch & Lomb and her current employer, UCB) gained across a variety of geographies. Whilst a
pharmacist, Ms. Kikuchi’s roles have focused on the commercial, business development and corporate
planning functions of the companies she has worked at. The Proposer believes both her academic
background and work experience would be invaluable to Kirin. An added benefit is that Ms. Kikuchi would
obviously bring much needed gender diversity to the board of Kirin.
Kanako Kikuchi Birthday: August 1, 1962
Female
Biography Important concurrent office
1992 Japanese corporation of Marion Merrell Dow
1997 Deputy manager of the marketing section, vision care department
of Bausch & Lomb Japan
1999 Global strategy director of Bausch & Lomb Incorporated (US)
2004 – 2013 Business manager of Oncology department, Ophthalmic at Novartis Pharma Co., Ltd.
2013 Director of GlaxoSmithKline K.K.
2017 Representative Director and CEO of GlaxoSmithKline K.K.
2018 Representative Director of UCB Japan Co., Ltd. (present)
Representative Director of UCB Japan Co.,
Ltd. (present)
7
© Kirin Holdings Company, Limited 109
Members of Kirin’s Board and management team met with FP on numerous occasions
since 2014, when FP first invested in Kirin. Throughout this period we have engaged with
FP – listening to and fully considering their thoughts
Given the constructive dialogue between Kirin and FP during this period, we find it
unfortunate that FP has repeatedly threatened to make their criticisms public and launch a
proxy contest unless Kirin acquiesced to its demands
Without informing the Company of its intention to speak to media, an FP managing partner
surprisingly conducted an interview with Financial Times published on 6 November 2019
to criticize the Company, stating that “[Kirin] management is determined to proceed in a
direction that destroys value.”
Despite this unproductive public attack, Kirin continued its discussions with FP. In addition
to interviewing director nominees proposed by FP, Kirin’s Board thoroughly reviewed and
discussed each of FP’s proposals before determining they were not in the best interest of
all shareholders
FP again made its grievances public without informing Kirin when it suddenly published a
press release, presentation, Q&A, and website outlining its views on the Company on 18
February 2020 and 5 March 2020
Kirin has Repeatedly Attempted to Engage Constructively with FP
© Kirin Holdings Company, Limited 110
FP's Value Recommendations Considerations Kirin's Strategy for Sustainable Growth
Abandon all non-beer
businesses
Kirin to focus solely on beer business with
no other avenues for sustainable growth
Kirin is committed to growing the beer business but recognizes the structural
market challenges in the market
Leveraging fermentation expertise and invest in Health Science opened an
important venue for sustainable long-term growth
Divest Pharmaceuticals
(Kyowa Kirin)
Kirin to receive then distribute the majority of
cash proceeds, but lose all upside potential
in a growing area and synergy realization
currently in progress
Kyowa Kirin was created through the merger of Kirin and Kyowa Hakko and
has seen strong organic growth since inception due to innovative
fermentation capabilities and cutting-edge biotechnologies, Kyowa Kirin
remains on track to becoming a Global Specialty Pharmaceutical Company
Kyowa Kirin is an integral part of Kirin's vision with a growing global portfolio
of revolutionary products, driving long-term success from basic research
collaborations targeting disease of brain, kidney, immune system and
intestine
Divest Kyowa Hakko Bio
Kirin to receive then distribute the majority of
cash proceeds, but lose all upside potential
in a growing area and synergy realization
currently in progress
Kyowa Hakko Bio is a global leading biotechnology company, with its highly
advanced fermentation technology
Kyowa Hakko Bio holds a key role in Kirin's Health Science business,
allowing the Company to capitalize on opportunities in the potential
4.1tn yen Health and Wellness market
Divest FANCL stake
Kirin to receive then distribute the majority of
cash proceeds, but lose all upside potential
in a growing area and synergy realization
currently in progress
Sees significant synergies with FANCL across the whole value chain and
expects that these opportunities will unlock approximately 5.5-7 bn yen in
Normalized OP to Kirin in 2024
The Capital and Business Alliance with FANCL completes the foundation of
the Health Science value chain, combining strengths in R&D, merchandise
development, manufacturing and distribution
Divest Japanese Soft
Drinks business
Kirin to receive then distribute the majority of
cash proceeds, but lose all upside potential
in a growing area and synergy realization
currently in progress
Kirin's portfolio of market-leading soft drink products is well positioned to
address the dynamic tastes of increasingly health conscious domestic
customers
Kirin's Strategy Will Position the Company for Sustainable Growth
1
2
3
4
5
© Kirin Holdings Company, Limited 111
FP's Shareholder Proposals Kirin's View Kirin's Proposals
Repurchase 600bn yen of
shares, to be funded by
proceeds from disposal of
non-core assets
Subject to the sale of all non-beer
businesses, which Kirin views as
integral to the Company's long-term,
sustainable growth
Disruptive to synergies realization plan
currently underway
An exceptionally large-scale share
repurchase along the lines that FP
is proposing could seriously worsen
our financial position and flexibility
going forward
As a top priority, we are creating synergies by leveraging existing assets
Focus on organic growth of the business by fully utilizing our strengths,
such as core fermentation biotechnology, marketing capabilities and
human resources
Execute a disciplined cash allocation with businesses with weaker growth
prospects are appropriately restructured to return maximum profits to
shareholders
Revision of the amount of
remuneration for the
restricted stock
compensation for directors
and Revision of the
amount of remuneration
for directors
FP's proposal has a narrow application
(applicable to only internal directors) with
weak incentive (restricted stock
compensation system)
Kirin's proposed revised remuneration system for Directors and Officers is
applicable to internal directors and executive officers and designed to
closely link remuneration with business performance
Kirin's proposed stock compensation scheme "Board Incentive Plan
Trust Scheme" is stable and efficient, allowing Directors to focus on
key management issues
Appointment of
two directors
Following interviews with FP’s director
nominees and extensive discussion, the
Nomination and Remuneration Advisory
Committee determined FP’s nominees
possessed neither incremental expertise
relative to the current Board and Kirin’s
nominees, nor a sufficient understanding
of Kirin, to warrant their appointments to
the Board
Kirin’s Nomination and Remuneration Advisory Committee has conducted
a rigorous process to identify, interview and select candidates based on
qualities including their diversity, experience, and skillsets relative to the
needs of the Board and the Company
Kirin's proposed Board refreshment includes four highly qualified,
experienced, and independent candidates
Each Kirin director and director nominee is aware of his or her
responsibility to evaluate important matters, such as company
strategy and capital allocation, with an independent mindset and
challenge policies that are not in the interest of shareholders
Kirin's Board regularly assesses our strategy to ensure it offers the best
path to long-term shareholder value and deliberately fosters open-minded
debate and robust discussion. We fully expect that independent and
rigorous process to continue with the newly installed board
Kirin's Proposals are Beneficial to the Company's Future
1
2
3
4
5
6
© Kirin Holdings Company, Limited 113
Achievements in Climate Change and Water Resources Issues
His
toric
GH
G e
mis
sio
ns
from
pro
du
ctio
n o
pe
ratio
n
(Sc
op
e 1
+ 2
*)
His
toric
wa
ter c
on
su
mp
tion
an
d c
arb
on
inte
nsity
per
kilo
liter o
f wa
ter c
on
su
mp
tion
Kirin Brewery has significantly reduced GHG emissions and water consumption, which has contributed to cutting
energy and water costs.
* Notes:
Scope 1: Emissions from burning fuels for producing steam and
hot water to generate heat in product-manufacturing
process
Scope 2: Emissions related to electricity bought from power
companies
(in thousand tons)
1990 -> 2015 (actual)
2015 -> 2030 (target)
(in million cubic meters per year) Water consumption
Emission intensity
© Kirin Holdings Company, Limited 114
Achievements in Biomass- and Container/packaging-related Issues
Social value Economic value
Smart-cut
cartons
Paper consumption reduced 17%
vs. 2014;
GHG reduced 2,000 tons
Reduction of 170 million
yen per year
Lightweight 2-liter
PET bottle
20% lighter vs. 2014;
GHG reduced 3,850 tons
Reduction of 160 million
yen per year
Lightweight
returnable glass
bottle
20% reduction;
GHG reduced 1,000 tons
Reduction of ¥30 million
yen per year
Convert all paper used in domestic alcoholic and non-alcoholic beverages businesses to FSC® certified paper or recyclable waste paper
by end of 2020.
About 30% of Sri Lanka's large tea farms obtained Rainforest Alliance certification with Kirin's support.
Both environmental load and cost of production reduced through container development investment which helped reduce the amount of
packaging material.
Convent-
ional
Bottle
Light-
weight
Bottle
© Kirin Holdings Company, Limited 115
Achievements in Engagement with Next Generation Dialogue with the next generation, who are the stakeholders to be affected most by environmental issues, has been
continued since 2014 through Kirin School Challenge workshops which were co-organized with Junior United Nations
Eco Workshop (JUNEC). The workshops have been attended by a cumulative total of 971 individuals and 371 schools
as of the end of 2019. One-day workshops for junior high and high
school students
Participants learn about Rainforest Alliance,
FSC®, packaging, containers, etc. and then tweet
what they want their peers to know. The number of
likes received on the tweets are ranked for
competition
Won an Encouragement Award in the Economy,
Trade and Industry Ministry's eighth Career
Education Awards and
Judges' Encouragement Award in the 2017
"Commendation for Companies Promoting Hands-
on Activities for Youth"
© Kirin Holdings Company, Limited 116
Background to Revising Long-Term Environmental Vision Goals and activities upgraded in an effort to address global developments after the initial establishment of the Long-
Term Environmental Vision, including international initiatives that came out of the Paris Agreement, such as TCFD and
IPCC special report on 1.5 °C, and environmental problems whose impacts have since materialized or grown more
serious
Long-Term Environmental Vision revised to reflect TCFD scenario analysis and climate-related risks and establish a
policy for working out more resilient transitional strategy to address climate change
IPCC special report
on 1.5 °C
More frequent and severe
environmental disasters
Issue of plastic waste
has grown serious.
• 1.5°C rise between 2030 and 2052
• Significant difference in damage between rises of 1.5 °C
and 2.0 °C
• 2018 floods in western Japan, Typhoon Hagibis in 2019 and
Australian bush fire in 2019-2020 highlighted materializing
physical risk of climate change.
• Ever-increasing amount of marine plastic litter
• Issues materializing even in Japan, where percentage of
used PET bottle collection is high, due to China's ban on
plastic waste imports
TCFD scenario analysis
• Impacts from climate change are large but there is capacity
to adapt
• Benefit of strengthening measures to mitigate climate
change impacts and adopt to them is significant
En
viro
nm
en
t-rela
ted
initia
tive
s
En
viro
nm
en
tal im
pac
ts
© Kirin Holdings Company, Limited 117
Evolution from Previous Environmental Vision The new Environmental Vision aims to increase shared value by creating positive impacts on value
chains and society, not just control negative impacts arising in the company's operational locations.
Kirin Group
Environmental Vision 2050
Current Long-Term
Environmental Vision
Scope and
purpose
• All of regions in the world in which we
operate
• Expansion to regional communities
• Creation of positive environmental impacts
• Routine to prioritize Four key target areas
• Centered on domestic business
• Company locations and value
chains
• Minimizing negative impacts
Biomass
• Breeding and developing sustainable
agricultural products
• Maintaining farming at material production
areas
• Sustainable production
Water
resources
• Reduction in water consumption
• Solving water-related issues in value chains
• Conservation of water sources in
operational regions
Containers
and packaging
• Building recycling systems
• Development of new containers and services • Sustainable situation
Climate change
• Achieving carbon neutral by end of 2050
• Achieve 100% renewable power as early as
possible (RE100)
• Less than 1.5 °C temperature rise
• Halve GHG emissions by 2050 from
1990 level
• Less than 2 °C temperature rise
© Kirin Holdings Company, Limited 121
Current Action Plans
Enhanced new environmental measures
Biomass • Helping Vietnamese coffee farms obtain Rainforest Alliance certification (started 2020)
Water
resources
• Expansion of water source conservation effort at Sri Lankan tea farms and
development at other material production areas
Containers
and packaging
• Lion to start container-collecting service in all states where container recycle law is
introduced (by end of 2020)
• 100% sustainable containers and packaging using recycled materials and biomass by
end of 2050
Climate
change
• Australia's first large-scale carbon neutral by Lion (by end of 2020)
• 100% renewable energy by Lion (by end of 2025)
• 75% renewable power at Takasaki plant through introduction of Aqua Premium service
by Kyowa Kirin, in the first instance in the pharmaceutical industry* (already
introduced in 2020)
• RE100 (to sign on by end of 2020)
• Commitment to SBT 1.5 °C -consistent targets (to sign on by end of 2020)
Lead initiatives in sustainability that creates both social and economic value by conserving the natural
environment while ensuring continuity of operations
Note: Quantitative targets to be worked out as part of SCV commitment
*Already introduced in 2017 at Kirin Brewery's Toride Factory (about 70% of total power) and Kirin Beverage's Shonan Factory
(about 34% of total power)
© Kirin Holdings Company, Limited 122
External Evaluation of ESG performance
External evaluations/evaluation Content
ESG Indicies
• FTSE4Good、FTSE Blossom Japan Index
• MSCI Japan ESG Select Leaders Index
• MSCI Japan Empowering Woman Index
• S&P/JPX Carbon Efficient Index
CDP
• Climate change: A-list company (‘14, ‘15, ’16, ’17, ’19)
• Water security: A-list company (‘16, ’17, ‘18, ‘19)
• Supplier Engagement: A rating company (‘18, ‘19)
SBT • In 2017, the first Japanese food and beverage company to receive SBT’s
approval for Kirin group’s GHG reduction targets
TCFD • In 2018, The first Japanese food and beverage company to endorse the
recommendations of TCFD
ESG Finance Award Japan
• In 2020, Gold medal awarded by Ministry of Environment, Japan
© Kirin Holdings Company, Limited 123
External authentication/evaluation Content
30% Club Japan
• In 2019, endorsed 30% Club Japan
Nadesiko Brand
• Nadeshiko Brand Company by the Ministry of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange (‘18, ‘19)
SNAM Sustainability Index
• Selected in the 2019 "SNAM Sustainability Index
External Evaluation of ESG performance
© Kirin Holdings Company, Limited 124
(Reference)
CDP Carbon Disclosure Project
GPIF Government Pension Investment Fund
SBT Science Based Targets
TCFD Taskforce on Climate-related Financial Disclosure