Shionogi & Co., Ltd. · TSE:4507
Shionogi & — ESG Presentation (December 2024)
40 slides from Shionogi &'s sustainability presentation, Dec 4, 2024
Slide 1: FY2024 Sustainability Meeting
FY2024 Sustainability Meeting December 4, 2024 Shionogi & Co., Ltd. 1
Slide 2: Agenda
Agenda 01 Sustainable Growth of SHIONOGI (P. 3-10) Isao Teshirogi, Ph.D. Chief Executive Officer 02 SHIONOGI’s Human Capital Strategy (P. 11-23) • Human Capital Strategy Overview Kazuhiro Hatanaka, Senior Executive Officer, Senior Vice President, Corporate Supervisory Unit and Corporate Strategy Div
Slide 3: 1. Sustainable Growth of SHIONOGI
1. Sustainable Growth of SHIONOGI 3
Slide 4: SHIONOGI's Management Philosophy
SHIONOGI’s Management Philosophy SHIONOGI Group Heritage (The Company Policy of SHIONOGI) Shionogi strives constantly to supply the best possible medicine to protect the health SHIONOGI and wellbeing of the patients we serve Group Heritage (Company Policy) What we want to achieve by 2030 (the 2030 V
Slide 5: Sustainable Growth of SHIONOGI
Sustainable Growth of SHIONOGI Extremely stable earnings growth among pharmaceutical companies (Unit: B yen) (%) 800 8000 60 Transformation into a drug-discovery pharmaceutical company Stable management without patent cliffs 600 6000 -Aiming to become a pharmaceutical company with high operating mar
Slide 6: Stable Management Without Patent Cliffs: Crestor Growth Phase
Stable Management Without Patent Cliffs: Crestor Growth Phase Pursued a business model that maximizes the value of in-house developed products Maximization of value of in-house developed products through partnering Hypercholesterolemia treatment: Creation of Crestor (launched in 2003) (Unit: B yen)
Slide 7: Stable Management Without Patent Cliffs: Crestor Growth Phase (Agreement Revisions)
Stable Management Without Patent Cliffs: Crestor Growth Phase Mitigated patent cliff impact through agreement revisions to ensure next phase of growth Agreement revisions for a win-win relationship Reduced royalty rate for two years and extended receipt period • AstraZeneca: Made investments to expa
Slide 8: Stable Management Without Patent Cliffs: HIV Growth Phase
Stable Management Without Patent Cliffs: HIV Growth Phase Sustained growth from combination of Crestor cliff response and growth from dolutegravir Establishment of a royalty business model HIV treatment: Creation of Tivicay (dolutegravir) (launched in 2013) Royalty/dividend income (Unit: B yen) Out-
Slide 9: Overcoming Patent Cliff for Oral Anti-HIV Drug
Stable Management Without Patent Cliffs: Overcoming Patent Cliff for Oral Anti-HIV Drug Managed patent cliff through efforts to develop drugs that address unmet needs and evolution of business model Emergence of LA* formulations and advance of ULA*2 Growth toward realizing the 2030 Vision formulatio
Slide 10: Strengths and Management Foundations Supporting SHIONOGI's Growth
Strengths and Management Foundations Supporting SHIONOGI’s Growth Expertise in Alliances and infectious Innovation skills collaboration diseases Over 60 years of In-house drug Partnering with a wide infectious disease R&D development ratio variety of companies 66% • Unrivaled knowledge and technolog
Slide 11: 2. SHIONOGI's Human Capital Strategy
2. SHIONOGI’s Human Capital Strategy • Human Capital Strategy Overview • Overview of the Actions 11
Slide 12: SHIONOGI's Vision in Human Capital
SHIONOGI’s Vision in Human Capital Develop strong individuals who can win in global competition by embodying the SHIONOGI Vision Way, and build an organization that makes the most of its diverse human resources Desired human A person who attracts others with his/her strengths, actively seeks to enha
Slide 13: Human Capital Management at SHIONOGI (1)
Human Capital Management at SHIONOGI (1) Promote human capital management based on the idea that greater employee engagement leads to corporate value enhancement SHIONOGI’s concept of human capital management Greater employee engagement It is important that the cycle is circulating Increased sympath
Slide 14: Human Capital Management at SHIONOGI (2)
Human Capital Management at SHIONOGI (2) Turn the cycle for corporate value enhancement while verifying and improving based on engagement surveys Our approach to the use of engagement surveys Analysis through periodic surveys • Monitoring the engagement status of the entire Group starting from FY202
Slide 15: Human Capital Strategy to Realize the 2030 Vision
Human Capital Strategy to Realize the 2030 Vision Engagement surveys Work style reform Make improvements while verifying whether human capital initiatives are leading to corporate Create an environment where employees with diverse attributes value enhancement DE & I can play an active role. Securing
Slide 16: The Need to Change Human Resource Portfolio Due to Business Model Transformation
The Need to Change Human Resource Portfolio Due to Transformation of Business Model Accelerate the strengthening of insufficient capabilities to realize the 2030 Vision Expansion of business through business model transformation Human resources to be expanded Own sales business Global human resource
Slide 17: Transformation of Human Resource Portfolio: Human Resources Development and Acquisition
Transformation of Human Resource Portfolio: Advancement of Human Resources Development and Acquisition Advance human resources development and acquisition by defining the skill level required for each job and conducting assessments Defining jobs and skills and conducting assessments • Establish thre
Slide 18: Transformation of Human Resource Portfolio: Introducing a New HR System
Transformation of Human Resource Portfolio: Introducing a New HR System Transforming to a system designed to promote challenge and fulfillment Grade system Evaluation system Compensation system • Make job grades commensurate with current • Enable promotion and demotion grades • Competitive compensat
Slide 19: Transformation of Human Resource Portfolio: Other Initiatives
Transformation of Human Resource Portfolio: Other Initiatives Promoting the utilization of internal and external human resources while encouraging employee turnover to transform the human resource portfolio Special early retirement program - Initiative to encourage employee turnover - • This is the
Slide 20: Work Style Reforms at SHIONOGI
Securing Diverse Values and Integrating Diverse Human Resources: Work Style Reforms at SHIONOGI • Create an environment where employees with diverse attributes and values can play an active role • Build momentum to encourage voluntary reskilling and skills upgrading Work style reform initiatives int
Slide 21: Initiatives to Increase Employee Engagement
Initiatives to Increase Employee Engagement Promoting sympathy toward SHIONOGI’s initiatives through enhanced branding activities and various measures SHIONOGI Infectious Disease Weeks President’s Award ‐ SING of the Year - • Initiatives to encourage people inside and outside the company to • The Pr
Slide 22: Where SHIONOGI's Human Capital Strategy Stands Today
Where SHIONOGI’s Human Capital Strategy Stands Today Progressing steadily toward SHIONOGI’s vision in human capital through the introduction of a new HR system and work style reforms Re-grade under the new HR system to properly link Grades Features that have evolved as a grades, roles, and treatment
Slide 23: Points to Strengthen in the Human Capital Strategy
Points to Strengthen in the Human Capital Strategy to Realize the 2030 Vision Past evolution points Future points of enhancement Development of environment and frameworks Globalization • Appointment of internal and external personnel • Globalization of personnel systems and talent management based o
Slide 24: 3. Corporate Governance
3. Corporate Governance • SHIONOGI’s Governance Framework ‒ Nomination Advisory Committee ‒ Compensation Advisory Committee 24
Slide 25: Directors/Auditors
Directors/Auditors ⑥ ⑤ ④ ③ ② ① ⑦ ⑧ ⑨ ⑩ ⑪ Number Nomination Compensation Number Nomination Compensation Bord of Bord of Board of Name of years Directors Advisory Advisory Name of years Directors Auditors Advisory Advisory in post Committee Committee in post Committee Committee Representative Isao Sta
Slide 26: Corporate Governance Transition
Corporate Governance Transition Percentage of outside officers (%) 11.1 22.2 40.0 50.0 60.0 54.5 60.0 63.6 FY2004 FY2009 FY2012 FY2015 FY2017 FY2020 FY2023 • Reduction of number • Hiring of outside directors • Outside officers to • Commencement of • Change in composition • Appointment of an • Appoin
Slide 27: Corporate Governance Structure
Corporate Governance Structure Nomination Number 11people Advisory Committee of Board of Board of指名諮問委員会 ・ Internal 2 Executives Auditors meeting Directors meeting ・ 社内2人 ・ Outside 5 監査役会 取締役会 ・ 社外5人 ・ Internal 2 ・ Internal 2 Compensation ・ 社内2人 ・ 社内2人 ・ Outside 3 ・ Outside 4 報酬諮問委員会Advisory Committ
Slide 28: Organizational Design
Organizational Design Currently considering the ideal organizational design to achieve sustainable growth Management type Hybrid type Monitoring type Place emphasis on management decision- Gradually shift focus to supervisory functions Main roles of the making while limiting the scope of individual
Slide 29: Toward Strengthening Management Supervisory Functions
Toward Strengthening Management Supervisory Functions Board succession reforms have been initiated to continuously maintain and improve governance oversight functions Effectiveness of the Nomination Advisory Committee Board of Directors Board of Board of ・ Internal 2 Auditors meeting Directors meeti
Slide 30: Nomination Advisory Committee: Implementation Details
Nomination Advisory Committee: Implementation Details A performance review of CEO began in FY2023 What was implemented Directors Corporate Officers Guarantee of appropriateness Performance review of CEO Feedback at the Nomination Advisory Committee • CEO explained to members of the Nomination Adviso
Slide 31: Nomination Advisory Committee: Future Prospects
Nomination Advisory Committee: Future Prospects Extend evaluation to other officers and strengthen succession planning Future prospects Directors Corporate Officers Adding depth to succession planning Guarantee of appropriateness Training of director candidates • Strengthening the roles of the Nomin
Slide 32: Compensation Advisory Committee: Discussions and Results (1)
Compensation Advisory Committee: Discussions and Results (1) Increase remuneration linked not only to short-term performance, but also to medium- to long-term performance Compensation of directors * A compensation design oriented toward (Actual remuneration ratio) performance (especially medium- to
Slide 33: Compensation Advisory Committee: Discussions and Results (2)
Compensation Advisory Committee: Discussions and Results (2) Encourage the sharing of value with shareholders by increasing stock-based compensation FY of introduction Stock-based compensation Directors Corporate Officers Organization heads FY2011 Stock options ー ー (Abolished in 2018) Long-term stoc
Slide 34: Appendix
Appendix 34 @® sionoai
Slide 35: SHIONOGI's Material Issues (Materiality)
SHIONOGI’s Material Issues (Materiality) Material issues to create value by solving healthcare social issues Protect people from the threat of infectious diseases Create innovation Contribute to a healthy and prosperous life Improve access to healthcare Material issues to reduce negative impacts on
Slide 36: Indicators for Developing and Securing Diverse Human Resources
Indicators for Developing and Securing Diverse Human Resources to Support SHIONOGI’s Growth Developing and securing competitive and diverse human resources Promoting occupational health and safety Number of employees transferred through Number of users of side- internal recruitment Number of mid-car
Slide 37: Other Major Indicators on Sustainability
Other Major Indicators on Sustainability Protect the environment Respect human rights Strengthen supply chain management SHIONOGI Group Statement on the New initiatives in FY2023 FY2023 questionnaire or EcoVadis assessment Human Rights Policy Modern Slavery Act 2015 and human EcoVadis assessment (Su
Slide 38: Career Development at SHIONOGI (1)
Career Development at SHIONOGI（1） 38
Slide 39: Career Development at SHIONOGI (2)
Career Development at SHIONOGI（2） 39
Slide 40: Career Development at SHIONOGI (3)
Career Development at SHIONOGI（3） 40 Top Secret