Annual Securities Report ("Yukashoken Hokokusho")
For the year ended December 31, 2025
This is an English translation of the original Annual Securities Report (extract) filed with the Director of the Kanto Local Finance Bureau via Electronic Disclosure for Investors' Network ("EDINET") on March 27, 2026, pursuant to the Financial Instruments and Exchange Act of Japan, for reference purpose only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damage arising from the translation. The translation of the Independent Auditor's Report on the Financial Statements and Internal Control Over Financial Reporting in the original Annual Securities Report are included at the end of this document.
CONTENTSAnnual Securities Report for the 187thfiscal year
Page
[Cover] 3
PART 1 COMPANY INFORMATION 4
OVERVIEW OF COMPANY 4
KEY FINANCIAL DATA 4
HISTORY 6
DESCRIPTION OF BUSINESS 8
SUBSIDIARIES AND ASSOCIATES 10
EMPLOYEES 12
OVERVIEW OF BUSINESS 14
MANAGEMENT POLICY, BUSINESS ENVIRONMENT,
AND FUTURE CHALLENGES 14
APPROACHES TO AND INITIATIVES FOR SUSTAINABILITY 23
BUSINESS RISK FACTORS 81
MANAGEMENT ANALYSIS OF FINANCIAL POSITION,
OPERATING RESULTS, AND CASH FLOWS 89
MATERIAL CONTRACTS 95
RESEARCH AND DEVELOPMENT ACTIVITIES 96
INFORMATION ABOUT FACILITIES 103
OVERVIEW OF CAPITAL EXPENDITURES 103
MAJOR FACILITIES 103
PLANNED ADDITIONS, RETIREMENTS,
AND OTHER CHANGES OF FACILITIES 105
INFORMATION ABOUT REPORTING COMPANY 106
COMPANY'S SHARES, ETC 106
ACQUISITION AND DISPOSAL OF TREASURY SHARES 116
DIVIDEND POLICY 117
CORPORATE GOVERNANCE 118
FINANCIAL INFORMATION 164
Independent Auditor's Report on the Financial Statements
and Internal Control Over Financial Reporting 226
Internal Control Report 232
[Cover][Document filed] Annual Securities Report (Yukashoken Hokokusho)
[Clause of stipulation] Article 24, Paragraph 1 of the Financial Instruments and Exchange Act
[Filed to] Director-General, Kanto Local Finance Bureau
[Filing date] March 27, 2026
[Fiscal year] The 187thfiscal year (January 1, 2025 through December 31, 2025)
[Company name] Kirin Holdings Kabushiki Kaisha
[Company name in English] Kirin Holdings Company, Limited
[Title and name of representative] Takeshi Minakata, President & Chief Operating Officer [Address of registered head office] 10-2, Nakano 4-chome, Nakano-ku, Tokyo, Japan [Telephone number] +81-3-6837-7015
[Name of contact person] Hidefumi Matsuo, General Manager of Finance Department
[Nearest place of contact] 10-2, Nakano 4-chome, Nakano-ku, Tokyo, Japan
[Telephone number] +81-3-6837-7015
[Name of contact person] Hidefumi Matsuo, General Manager of Finance Department
[Place for public inspection] Tokyo Stock Exchange, Inc. (2-1, Nihonbashi Kabutocho, Chuo-ku, Tokyo)
PART 1 COMPANY INFORMATION-
OVERVIEW OF COMPANY
-
KEY FINANCIAL DATA
-
KEY CONSOLIDATED FINANCIAL DATA FOR THE FIVE MOST RECENT FISCAL YEARS
Fiscal year
183rd
184th
185th
186th
187th
Fiscal year ended
December 31,
2021
December 31,
2022
December 31,
2023
December 31,
2024
December 31,
2025
Revenue
(¥ millions)
1,821,570
1,989,468
2,134,393
2,338,385
2,433,363
Profit before tax
(¥ millions)
99,617
191,387
197,049
139,721
237,859
Profit attributable to owners of the Company
(¥ millions)
59,790
111,007
112,697
58,214
147,542
Comprehensive income attributable to owners of the Company
(¥ millions)
109,631
189,195
214,321
118,626
194,341
Equity attributable to owners of the Company
(¥ millions)
894,179
980,022
1,132,581
1,181,525
1,286,991
Total assets
(¥ millions)
2,471,933
2,542,263
2,869,585
3,354,159
3,494,043
Equity per share attributable to owners of the Company
(¥)
1,072.69
1,210.16
1,398.47
1,458.68
1,588.59
Basic earnings per share
(¥)
71.73
135.08
139.16
71.87
182.13
Diluted earnings per share
(¥)
71.70
135.07
139.15
71.86
182.13
Equity ratio attributable to owners of the Company
(%)
36.2
38.5
39.5
35.2
36.8
Ratio of profit to equity attributable to owners of the Company
(%)
6.9
11.8
10.7
5.0
12.0
Price earnings ratio
(times)
25.75
14.89
14.85
28.51
12.89
Cash flows from operating activities
(¥ millions)
219,303
135,562
203,206
242,844
295,428
Cash flows from investing activities
(¥ millions)
(56,408)
(10,399)
(226,091)
(329,375)
(185,019)
Cash flows from financing activities
(¥ millions)
(180,463)
(167,835)
35,909
58,125
(110,524)
Cash and cash equivalents at end of year
(¥ millions)
149,488
88,060
131,399
118,617
125,292
Number of employees [separately, average number of temporary employees]
(persons)
29,515
[4,077]
30,538
[4,012]
30,183
[3,556]
31,934
[4,298]
31,144
[4,087]
Notes:
The Kirin Group's consolidated financial statements have been prepared in conformity with International Financial Reporting Standards ("IFRS").
Amounts are rounded to the nearest ¥1 million.
The amounts of revenue and profit before tax are those from continuing operations.
-
KEY FINANCIAL DATA OF REPORTING COMPANY FOR THE FIVE MOST RECENT FISCAL YEARS
Fiscal year
183rd
184th
185th
186th
187th
Fiscal year ended
December 31,
2021
December 31,
2022
December 31,
2023
December 31,
2024
December 31,
2025
Sales
(¥ millions)
139,504
152,789
139,030
194,601
144,384
Ordinary income
(¥ millions)
73,830
76,878
62,239
60,401
48,103
Net income (loss)
(¥ millions)
77,251
48,679
70,386
(344,908)
48,023
Share capital
(¥ millions)
102,046
102,046
102,046
102,046
102,046
Total outstanding shares
(thousand shares)
914,000
914,000
914,000
914,000
914,000
Net assets
(¥ millions)
1,007,022
951,119
964,241
561,893
551,340
Total assets
(¥ millions)
1,996,761
1,898,795
2,282,080
1,847,181
1,966,794
Net assets per share
(¥)
1,208.06
1,174.47
1,190.61
693.70
680.54
Dividend per share
(¥)
65.00
69.00
71.00
71.00
74.00
[Of which, interim dividend per share]
(¥)
[32.50]
[32.50]
[34.50]
[35.50]
[37.00]
Net income (loss) per share
(¥)
92.67
59.24
86.91
(425.84)
59.28
Net income per share (diluted)
(¥)
-
-
-
-
-
Ratio of equity to total assets
(%)
50.4
50.1
42.3
30.4
28.0
Return on equity
(%)
7.75
4.97
7.35
(45.20)
8.63
Price earnings ratio
(times)
19.93
33.95
23.77
-
39.61
Dividend payout ratio
(%)
70.1
116.5
81.7
-
124.8
Number of employees
(persons)
1,156
914
977
1,067
1,124
Total shareholder return
(%)
78.6
88.1
93.3
95.5
110.8
[Benchmark: Dividend-included TOPIX]
(%)
[112.7]
[110.0]
[141.1]
[169.9]
[213.2]
Highest stock price
(¥)
2,430.00
2,306.00
2,245.00
2,310.00
2,474.00
Lowest stock price
(¥)
1,788.00
1,739.00
1,906.00
1,896.00
1,902.00
Notes:
Net income per share (diluted) is not stated because there were no potentially dilutive shares.
Price earnings ratio and dividend payout ratio for the 186thterm are not stated because net loss per share was recorded.
The number of employees of the reporting company includes those seconded to the reporting company from its subsidiaries, affiliates, etc.
Amounts are rounded to the nearest ¥1 million.
The highest and lowest stock prices on April 3, 2022 and earlier represent quoted prices on the First Section of the Tokyo Stock Exchange, while those on April 4, 2022 and later represent quoted prices on the Prime Market of the Tokyo Stock Exchange.
The Company has adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. since the beginning of the 184th fiscal year. Key performance indicators, etc. for the 184th fiscal year and beyond are the numbers after the adoption of the Accounting Standard for Revenue Recognition, etc.
-
KEY CONSOLIDATED FINANCIAL DATA FOR THE FIVE MOST RECENT FISCAL YEARS
-
HISTORY
Primary events pertaining to the Kirin Group (the Company and its subsidiaries and associates) on and after the foundation of the Company are as follows:
Month/Year
Primary events
February 1907
July 1907
March 1928
May 1949
April 1963
August 1972
August 1975
June 1976
May 1977
December 1981
May 1983
March 1988
May 1988
April 1990
January 1991
October 1991
July 1996
December 1996
April 1998
September 1999
February 2002
March 2002
April 2002
December 2004
May 2006
October 2006
December 2006
July 2007
July 2007
July 2007
December 2007
October 2008
October 2008
November 2008
April 2009
October 2010
December 2010
March 2011
October 2012
January 2013
January 2015
February 2016
February 2016
February 2017
February 2019
Kirin Brewery Company, Limited (currently Kirin Holdings Company, Limited) established. Listed on the Tokyo Stock Exchange.
Starts manufacturing soft drinks.
Listed on the Tokyo Stock Exchange and Osaka Securities Exchange upon the resumption of securities trading. Vending Machine Services Co., Ltd. (currently Kirin Beverage Company, Limited) established.
Kirin-Seagram Co., Ltd. (currently Kirin Distillery Company, Limited) established.
Koiwai Dairy Products Company, Limited established.
KW Inc. (currently Coca-Cola Beverages Northeast, Inc.) established.
Kirin Engineering Co., Ltd. established.
Taiwan Kirin Engineering Co., Ltd. (currently TAIWAN KIRIN COMPANY, LIMITED) established.
Kirin Brewery Company, Limited introduces ESPO®, an erythropoietin preparation and therapeutic agent for renal anemia.
Kirin Lemon Co., Ltd. takes over Kirin Brewery's soft drink business and changes its company name to Kirin Beverage Company, Limited.
Kirin Europe GmbH established.
Kirin Brewery of America, LLC established.
Zhuhai Kirin President Brewery Co., Ltd. (currently Kirin Brewery (Zhuhai) Company, Limited) established. Acquires a stake in Lion Nathan Limited (currently Lion Pty Ltd).
Acquires a stake in San Miguel Corporation.
Makes Eishogen Company, Limited a consolidated subsidiary. Kirin (China) Investment Company, Limited established.
Makes Mercian Corporation a consolidated subsidiary.
Kirin Brewery Company, Limited changes its name to Kirin Holdings Company, Limited and becomes a pure holding company of the Kirin Group.
The new Kirin Brewery Company, Limited becomes operational.
Kirin Pharma Co., Ltd. becomes operational and introduces NESP®, an extended erythropoiesis-stimulating agent. Acquires a stake in Kyowa Hakko Kogyo Co., Ltd.
Kyowa Hakko Kogyo Co., Ltd. and Kirin Pharma Co., Ltd. merge to establish Kyowa Hakko Kirin Co., Ltd. (currently Kyowa Kirin Co., Ltd.)
Kyowa Hakko Bio Co., Ltd. established.
National Foods Limited makes Dairy Farmers a wholly owned subsidiary. Acquires a stake in San Miguel Brewery Inc.
*Sells shares of San Miguel Corporation in May 2009.
Kirin Holdings Singapore Pte, Ltd. established.
Makes Mercian Corporation a wholly owned subsidiary.
Makes Interfood Shareholding Company a consolidated subsidiary.
Kirin Company, Limited (currently Kirin Holdings Company, Limited) established, and CSV Division established.
*Reorganized in 2017.
SPRING VALLEY BREWERY COMPANY established.
The Brooklyn Brewery Japan established.
Formulates "Transformation Initiative 1975: Laying the Groundwork for Achieving Consistent Growth." First phase of business diversification.
Formulates the Long-Term Management Vision (the 21st Long-Term Plan). Second phase of business diversification. Kirin City Company, Limited established.
Formulates the Long-Term Management Vision "KG21." Four Roses Distillery, LLC established.
Formulates the Long-Term Management Vision "Kirin Group Vision 2015" (KV2015). Makes Kirin Beverage Company, Limited a wholly owned subsidiary.
Formulates the Long-Term Management Vision "Kirin Group Vision 2021" (KV2021).
Revises to new Long-Term Management Vision "Kirin Group Vision 2021" (new KV2021). Formulates Corporate Governance Policy.
Formulates the Long-Term Management Vision "Kirin Group Vision 2027" (KV2027).
Month/Year
Primary events
April 2019
July 2019
September 2019
January 2020
November 2021
January 2022
August 2023
January 2024
September 2024
July 2025
Acquires a 95% of stake in Kyowa Hakko Bio Co., Ltd. from Kyowa Kirin Co., Ltd.
Acquires a stake in FANCL CORPORATION.
Makes New Belgium Brewing Company, Inc. a wholly owned subsidiary. Makes Fermentum Pty Ltd a wholly owned subsidiary.
Makes Bell's Brewery Inc. a wholly owned subsidiary.
Makes Orchard Therapeutics plc (currently Orchard Therapeutics Limited) a wholly owned subsidiary. Makes FANCL CORPORATION a consolidated subsidiary.
Kirin Brewery Southeast Asia Sdn. Bhd. established.
Makes Kyowa Hakko Bio Co., Ltd. a wholly owned subsidiary in January 2023. Absorbs and merges Kirin Company, Limited.
Absorbed and merged by New Belgium Brewing Company, Inc. in December 2023. Makes Blackmores Limited a wholly owned subsidiary.
Makes FANCL CORPORATION a wholly owned subsidiary in March 2025.
-
DESCRIPTION OF BUSINESS
The Kirin Group, which has introduced a pure holding company structure, consists of the Company, 164 consolidated subsidiaries, and 26 equity-accounted investees. As a holding company, the Company formulates Group strategies, monitors management of the Group, and provides specialized services to Group companies. The Kirin Group's principal businesses and how primary Group companies engage in such businesses are described below.
The businesses of the Kirin Group are classified as below, which corresponds to the classification of the business segments.
As the Company is categorized as a specified listed company, etc., it decides on insignificance tests for material facts for purposes of insider trading regulations based on consolidated figures.
Alcoholic Beverages BusinessesThis segment, for which Kirin Brewery Company, Limited (a consolidated subsidiary of the Company), Lion Pty Limited (a consolidated subsidiary of the Company) and other entities oversee the operations, runs alcoholic beverages businesses in Japan and overseas. Kirin Brewery Company, Limited conducts production and sale of beer, low-alcohol beverages, and other products in Japan, while Lion Pty Limited oversees production and sale of beer, low-alcohol beverages, and other products in the Oceania region and those of craft beer in North America.
Non-alcoholic Beverages BusinessThis segment, for which Kirin Beverage Company, Limited (a consolidated subsidiary of the Company), Coca-Cola Beverages Northeast, Inc. (a consolidated subsidiary of the Company) and other entities oversee the operations, runs soft drinks businesses in Japan and overseas. Kirin Beverage Company, Limited conducts production and sale of soft drinks in Japan, while Coca-Cola Beverages Northeast, Inc. conducts production and sale of Coca-Cola in the U.S.
Pharmaceuticals BusinessThis segment, for which Kyowa Kirin Co., Ltd. (a consolidated subsidiary of the Company and listed on the Prime Market of the Tokyo Stock Exchange) and other entities oversee the operations, conducts production and sale of pharmaceutical products in Japan and overseas.
Health Science BusinessThis segment, for which FANCL CORPORATION (a consolidated subsidiary of the Company), Blackmores Limited (a consolidated subsidiary of the Company) and other entities oversee the operations, runs health foods and other businesses in Japan and overseas. FANCL CORPORATION conducts research and development, production, and sale of cosmetics and health foods mainly in Japan. Blackmores Limited produces and sells nutritional supplements and related products mainly in Australia, Southeast Asia, and China.
The following chart summarizes the structure of the Kirin Group's businesses and primary Group companies.
-
SUBSIDIARIES AND ASSOCIATES
-
164 CONSOLIDATED SUBSIDIARIES
Name
Location
Share capital or investments in capital
(¥ millions, unless otherwise stated)
Principal business
Ratio of voting rights (%)
Relationship with the Company
Kirin Brewery Company, Limited *1, *3
Nakano-ku, Tokyo
30,000
Alcoholic Beverages
100.0
Lending of funds, leasing and renting of equipment
Mercian Corporation
Nakano-ku, Tokyo
3,000
Alcoholic Beverages
100.0
Lending of funds, renting of equipment
Eishogen Company, Limited
Nakano-ku, Tokyo
90
Alcoholic Beverages
99.9
(99.9)
Renting of equipment
Kirin Distillery Company, Limited
Gotemba, Shizuoka
10
Alcoholic Beverages
100.0
(100.0)
Lending of funds
SPRING VALLEY BREWERY COMPANY
Shibuya-ku, Tokyo
60
Alcoholic Beverages
100.0
(100.0)
Lending of funds
Kirin City Company, Limited
Chuo-ku, Tokyo
100
Alcoholic Beverages
100.0
(100.0)
Lending of funds
Lion Pty Ltd *1
New South Wales, Australia
A$8,730,936
thousand
Alcoholic Beverages
100.0
Concurrent appointments of officers: Yes
Kirin Foods Australia Holdings Pty Ltd
New South Wales, Australia
A$2
Alcoholic Beverages
100.0
(100.0)
None
Lion-Beer, Spirits & Wine Pty Limited *1
New South Wales, Australia
A$1,752,821
thousand
Alcoholic Beverages
100.0
(100.0)
None
Lion (NZ) Limited *1
Auckland, New Zealand
NZ$596,275
thousand
Alcoholic Beverages
100.0
(100.0)
None
Lion Nathan Finance (New Zealand) Limited *1
Auckland, New Zealand
A$172,937
thousand
Alcoholic Beverages
100.0
(100.0)
None
Lion Nathan USA Inc. *1
Oregon, USA
A$179,714
thousand
Alcoholic Beverages
100.0
(100.0)
None
New Belgium Brewing Company, Inc. *1
Colorado, USA
U.S.$392,319
thousand
Alcoholic Beverages
100.0
(100.0)
None
Lion Global Craft Beverages Pty Ltd *1
New South Wales, Australia
A$1,256,688
thousand
Alcoholic Beverages
100.0
None
Little World Beverages, Inc. *1
Delaware, USA
U.S.$742,600
thousand
Alcoholic Beverages
100.0
(100.0)
None
Four Roses Distillery, LLC
Kentucky, USA
U.S.$60,000
thousand
Alcoholic Beverages
100.0
(100.0)
Lending of funds
Kirin Brewery of America, LLC
California, USA
U.S.$13,000
thousand
Alcoholic Beverages
100.0
(100.0)
Lending of funds
Kirin (China) Investment Company, Limited *1
Shanghai, China
U.S.$143,000
thousand
Alcoholic Beverages
100.0
None
Kirin Brewery (Zhuhai) Company, Limited
Guangdong, China
U.S.$84,700
thousand
Alcoholic Beverages
100.0
(100.0)
None
TAIWAN KIRIN COMPANY, LIMITED
Taipei, Taiwan
TW$64,000
thousand
Alcoholic Beverages
100.0
(100.0)
None
Kirin Europe GmbH
Dusseldorf, Germany
EUR77
thousand
Alcoholic Beverages
100.0
(100.0)
None
Kirin Beverage Company, Limited
Nakano-ku, Tokyo
8,417
Non-alcoholic Beverages
100.0
Lending of funds, renting of equipment
Coca-Cola Beverages Northeast, Inc. *4
New Hampshire, USA
U.S.$930
thousand
Non-alcoholic Beverages
100.0
None
Interfood Shareholding Company
Dong Nai, Vietnam
VND871,410
million
Non-alcoholic Beverages
95.7
(95.7)
None
Kyowa Kirin Co., Ltd. *1, *2, *5
Chiyoda-ku, Tokyo
26,745
Pharmaceuticals
55.2
Concurrent appointments of officers: Yes
Orchard Therapeutics Limited *6
London, United Kingdom
U.S.$29,569
thousand
Pharmaceuticals
100.0
(100.0)
None
Kyowa Kirin Asia Pacific Pte. Ltd. *1, *7
Singapore
S$123,045
thousand
Pharmaceuticals
100.0
(100.0)
None
FANCL CORPORATION *1
Naka-ku, Yokohama, Kanagawa
10,795
Health Science
100.0
Concurrent appointments of officers: Yes
Name
Location
Share capital or investments in capital
(¥ millions, unless otherwise stated)
Principal business
Ratio of voting rights (%)
Relationship with the Company
Kyowa Hakko Bio Co., Ltd. *8
Chiyoda-ku, Tokyo
100
Health Science
100.0
Lending of funds and renting of equipment
Concurrent appointments of officers: Yes
Koiwai Dairy Products Company, Limited
Nakano-ku, Tokyo
100
Health Science
99.9
Renting of equipment
Blackmores Limited *1
New South Wales, Australia
A$202,319
thousand
Health Science
100.0
(100.0)
None
Kirin Health Science Australia Pty Ltd *1
New South Wales, Australia
A$1,799,000
thousand
Health Science
100.0
(100.0)
None
Kirin Holdings Australia Pty Ltd *1
New South Wales, Australia
A$1,800,000
thousand
Health Science
100.0
None
Kirin Holdings Singapore Pte, Ltd. *1
Singapore
A$2,880,737
thousand
Others
100.0
None
130 other companies
-
-
-
-
-
-
26 EQUITY-ACCOUNTED INVESTEES
Name
Location
Share capital or investments in capital (¥ millions, unless otherwise stated)
Principal business
Ratio of voting rights (%)
Relationship with the Company
YO-HO BREWING COMPANY
Karuizawa-machi, Kitasaku-gun, Nagano
10
Alcoholic Beverages
33.3
(33.3)
None
Brooklyn Brewery Corporation
New York, USA
U.S.$3,729
Alcoholic Beverages
25.5
(25.5)
None
San Miguel Brewery Inc.
Metro Manila, the Philippines
PHP15,410
million
Alcoholic Beverages
48.6
None
23 other companies
-
-
-
-
-
Notes:
Principal business represents the segment names.
Figures in parentheses in the ratio of voting rights represent the ratio of indirect ownership.
*1: Specified subsidiaries
*2: Companies filing the Annual Securities Report
*3: Revenue of Kirin Brewery Company, Limited (excluding intra-group revenue among consolidated companies) accounts for more than 10% of consolidated revenue.
Key information on profit or loss (¥ millions):
Revenue: 665,500
Profit before tax: 40,768
Profit: 29,573
Total equity: 70,890
Total assets: 414,327
*4: Revenue of Coca-Cola Beverages Northeast, Inc. (excluding intra-group revenue among consolidated companies) accounts for more than 10% of consolidated revenue.
Key information on profit or loss (¥ millions):
Revenue: 299,884
Profit before tax: 45,264
Profit: 32,793
Total equity: 125,416
Total assets: 195,807
*5: Revenue of Kyowa Kirin Co., Ltd. (excluding intra-group revenue among consolidated companies) accounts for more than 10% of consolidated revenue. However, the key information on profit or loss of the company is omitted because it files an Annual Securities Report.
*6: It was determined that the company would be dissolved and liquidated on July 11, 2025, and the liquidation was completed on January 20, 2026.
*7: By the resolution of the Board of Directors of Kyowa Kirin Co., Ltd. held on August 1, 2024, it was determined that this company would be dissolved and liquidated.
*8: Kyowa Hakko Bio Co., Ltd. is in a state of balance sheet insolvency with negative equity of ¥56,215 million.
The above is part of the disclosure required under IFRS and is referred to in "V. FINANCIAL INFORMATION, Consolidated Financial Statements, Notes to Consolidated Financial Statements, 33. LIST OF SUBSIDIARIES."
-
164 CONSOLIDATED SUBSIDIARIES
-
EMPLOYEES
-
INFORMATION ABOUT CONSOLIDATED COMPANIES
As of December 31, 2025
Segment
Number of employees (persons)
Alcoholic Beverages
8,800
[1,528]
Non-alcoholic Beverages
7,849
[570]
Pharmaceuticals
5,161
[182]
Health Science
5,643
[1,353]
Others
2,200
[454]
Administration
1,491
[-]
Total
31,144
[4,087]
Notes:
The number of employees indicates the number of employees currently on duty.
The number of temporary employees indicated in the square brackets represents the average number of temporary employees during the year.
The number of temporary employees excludes the number of dispatched employees.
-
INFORMATION ABOUT REPORTING COMPANY
As of December 31, 2025
Number of employees (persons)
Average age (years-old)
Average length of service (years)
Average annual salary (yen)
1,124
41.6
13.6
9,985,539
Notes:
The number of employees indicates the number of employees currently on duty.
The average length of service is an approximate figure because the method of calculation differs depending on the employment status and other factors.
The average annual salary includes bonuses and extra wages.
-
LABOR UNIONS
There are no special matters to be noted as to labor-management relations.
-
RATIO OF FEMALE MANAGERS, RATIO OF MALE EMPLOYEES WHO TOOK CHILDCARE LEAVE, AND WAGE GAP BETWEEN MALE AND FEMALE EMPLOYEES
Reporting Company
Ratio of female managers (%) (Note 1)
Ratio of male employees who took childcare leave (%)
(Notes 2 and 3)
Wage gap between male and female employees (%) (Notes 1, 4 and 5)
All employees
Regular employees
Part-time and fixed-term employees
18.1
100.0
74.8
75.0
60.6
Notes:
The figures are calculated in accordance with the provisions of the Act on the Promotion of Women's Active Engagement in Professional Life (Act No. 64 of 2015). Managers refer to workers who are in an integral position with the management in the decision-making on working conditions and other labor management, and those who are in a supervisory or management position.
The figure is the ratio of the number of employees who took childcare leave, etc. and leave for childcare purposes as provided in Article 71-6, Item 2 of the Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Ordinance of the Ministry of Labor No. 25 of 1991) in accordance with the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Act No. 76 of 1991).
The ratio of childcare leave taken may exceed 100% due to the difference between the year of birth of a child and the commencement year of taking childcare leave, etc. and leave for childcare purposes for the child.
Mid-career hires, retirees and employees on leave, and employees returning to work are excluded from the number of employees.
The Company does not differentiate between men and women in terms of wage systems for the same work. The main reason for this difference is the difference in personnel composition by grade. Specifically, it is because the number of women in managerial positions with relatively high wages and in the upper grades of career employment positions is small. The Company will encourage the active participation of women and their relationship building at work and promote measures that empower women by building a corporate culture that respects diverse opinions and values. Through such company-wide efforts, we will develop opportunities and an environment for women to play an active role.
The ratio of female managers, the ratio of male employees who took childcare leave, and the wage gap between male and female employees are based on all employees of Kirin Holdings.
Consolidated Subsidiaries
Company name
Ratio of female managers (%) (Note 1)
Ratio of male employees who took childcare leave (%) (Notes 2 and 3)
Wage gap between male and female employees (%) (Notes 1 and 4)
All employees
Regular employees
Part-time and fixed-term employees
Kirin Brewery Company, Limited
8.4
104.0
74.9
78.0
76.5
Mercian Corporation
11.6
133.3
93.2
89.4
86.3
Kirin Distillery Company, Limited
0.0
100.0
73.9
75.8
84.8
Kirin City Company, Limited
5.7
25.0
48.4
70.7
105.2
Kirin Beverage Company, Limited
8.5
100.0
73.9
78.0
61.2
Tokyo Kirin Beverage Service Co., Ltd.
3.2
150.0
77.5
88.9
86.9
Tokai Beverage Service Co., Ltd.
0.0
100.0
49.5
35.7
84.4
Kansai Kirin Beverage Service Co., Ltd.
0.0
83.3
75.6
76.9
89.9
Kirin Vivax Co., Ltd.
0.0
20.0
67.7
69.9
69.9
Shinshu Beverage Co., Ltd.
6.7
100.0
83.8
80.7
125.2
Kirin Maintenance Service Co., Ltd.
9.1
50.0
82.7
87.8
111.5
Kyowa Kirin Co., Ltd.
17.1
129.4
76.9
77.5
69.1
Kyowa Kirin Plus Co., Ltd.
0.0
-
75.4
83.6
81.1
FANCL CORPORATION
47.9
150.0
51.5
56.5
88.7
ATTENIR CORPORATION
66.7
-
54.4
55.3
-
FANCL B&H CORPORATION
11.3
125.0
44.8
67.3
92.9
Kyowa Hakko Bio Co., Ltd.
14.5
80.0
80.0
77.0
82.6
Kyowa Pharma Chemical Co., Ltd.
10.5
88.2
80.6
80.1
77.7
Koiwai Dairy Products Company, Limited
16.4
200.0
69.4
72.4
59.1
Kirin Group Logistics Company, Limited
8.6
66.7
70.3
80.6
54.7
KL Service East Japan Co., Ltd.
9.1
66.7
50.2
85.2
63.1
KL Service Kyushu Co., Ltd.
0.0
100.0
61.5
87.2
68.4
KL Service West Japan Co., Ltd.
0.0
16.7
39.7
84.1
67.7
Kirin and Communications Company, Limited
40.0
-
43.7
72.5
62.8
Kirin Engineering Company, Limited
3.2
50.0
61.8
61.1
-
Kirin Business System Company, Limited
12.3
66.7
82.6
83.6
77.2
Notes:
The figures are calculated in accordance with the provisions of the Act on the Promotion of Women's Active Engagement in Professional Life (Act No. 64 of 2015). Managers refer to workers who are in an integral position with the management in the decision-making on working conditions and other labor management, and those who are in a supervisory or management position.
The figure is the ratio of the number of employees who took childcare leave, etc. and leave for childcare purposes as provided in Article 71-6, Item 2 of the Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Ordinance of the Ministry of Labor No. 25 of 1991) in accordance with the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Act No. 76 of 1991).
The ratio of childcare leave taken may exceed 100% due to the difference between the year of birth of a child and the commencement year of taking childcare leave, etc. and leave for childcare purposes for the child.
Mid-career hires, retirees and employees on leave, and employees returning to work are excluded from the number of employees.
The ratio of female managers, the ratio of male employees who took childcare leave, and the wage gap between male and female employees are based on all employees of each company.
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INFORMATION ABOUT CONSOLIDATED COMPANIES
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KEY FINANCIAL DATA
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OVERVIEW OF BUSINESS
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MANAGEMENT POLICY, BUSINESS ENVIRONMENT, AND FUTURE CHALLENGES
Forward-looking statements contained in this document are based on the assessment that Kirin Holdings made as of the end of this fiscal year. These statements are not guarantees of future performance.
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BASIC MANAGEMENT POLICY
Under its long-term vision "Kirin Group Vision 2027" (KV2027), formulated in 2019, the Kirin Group has been transforming its business structure. This includes establishing and nurturing its Health Science business, while responding to a changing business environment characterized by rising sustainability and health awareness, regulatory risks for alcoholic beverages, declining alcohol consumption among younger generations, and digital transformation.
As the final year of KV2027 approaches, we have formulated a new long-term vision looking ahead to 2035, ten years in the future. Through our business portfolio comprising alcoholic beverages, health sciences and non-alcoholic beverages, and pharmaceuticals, we aim to further enhance corporate value.
In recent years, environmental changes have accelerated due to factors such as AI evolution, talent shortages, and diversifying consumer attitudes. Flexibly adapting to these shifts, the Kirin Group will create a future of mental and physical wellbeing by influencing consumers and patients' behavior worldwide and creating new lifestyle in society. We will further strengthen our organizational capabilities
to continuously create such innovations. As a global corporate group with a culture full of pioneering spirits and dedicated personnel, we will execute CSV (Creating Shared Value). Based on our premise of 'responsibility of Kirin Group which runs Alcoholic Beverage Businesses,' we will create value across three domains - 'Health and Well-Being,' 'Community Engagement' and 'the Environment' - contributing to bringing joy to society.
The Kirin Group will promote the global adoption of "KIRIN WAY." While inheriting the fundamental values cherished by our Group, we will further evolve our organizational culture where all employees engage in everyday work based on the principles and drive transformation. Furthermore, we will introduce an evaluation system domestically that encourages employees to take on challenges to further strengthen talent development. We will also advance cross-departmental and cross-national placements for future growth, fostering a culture that encourages co-creation and newness.
Management Issues for Sustainable Growth-Group Materiality Matrix (GMM)
The Kirin Group evaluates the challenges it should address to operate and develop sustainably in partnership with society from the two perspectives of impact on its business and impact on stakeholders, which have been organized in the Management Issues for Sustainable Growth (Kirin Group Materiality Matrix (GMM)). As the GMM changes over time and serves as the starting point for the Group's planning process, we assess each year whether it needs to be updated. In this fiscal year as well, in light of changes in the internal and external environment, we reorganized the key issues for the Kirin Group to address in order to continue to operate and develop sustainably alongside society over the next ten years. With a view to 2026 and beyond, we re-evaluated the impact on the Group's business through stakeholder surveys and discussions among the Kirin Group's officers, and updated the GMM. Through these efforts, we have further enhanced our ability to adapt to social needs.
* There is no difference in importance among the items in each cell.
Kirin Group CSV Purpose
On the basis of the GMM, the Company aims to address issues in the following four areas: "Health and Well-Being," "Community Engagement," "The Environment," and "Responsibility of Kirin Group which runs Alcoholic Beverage Businesses." The Company has designated this as the "CSV Purpose," and has also clearly stated the "Fundamentals of Corporation" as the foundation of corporate management. In addition, the Group develops specific action plans for solving issues in the four areas as CSV Commitments, further specifies performance indicators and sets targets for each Group company, and links them to initiatives undertaken by each Group company.
Furthermore, based on the Long-Term Management Vision, as we particularly aim to create "Health and Well-Being" value across all business domains, we have positioned "Health and Well-Being" at the center of the CSV Purpose. At the same time, since mental health as well as physical health is essential to bring joy to society, we have changed the "Health and Well-Being" statement to "Contributing to people's physical and mental health."
Value Creation Model/CSV Management Concept
Kirin Holdings has developed a value creation model as a sustainable mechanism for promoting the creation of social value and economic value by solving social issues, which is its basic approach to CSV management. With our organizational capabilities for continuously generating innovation (INPUT) as a foundation, we have created value (OUTPUT/OUTCOME) and realized the CSV Purpose by working to solve social issues through our business activities (BUSINESS). In particular, as a company capitalizing on the blessings of nature in conducting its business activities in society, we believe that strengthening non-financial assets, such as human and natural capital, will drive our continuous value creation. Through our business, we aim to achieve sustainable growth of our capital and value by creating social value and economic value at the same time and reinvesting them in our management foundations, including our organizational capabilities.
The illustration below shows how promoting CSV management helps improve our corporate value.
Business activities (BUSINESS) alongside the solutions for social issues, create economic value, increase free cash flows, and reduce business risks, ultimately lowering the cost of capital and improving corporate value.
Meanwhile, these business activities also create social value that helps satisfy customers' needs, which we believe will raise the customers' willingness to pay for our products and services and ultimately contribute to increasing free cash flows over the long term. Our creation of a high level of social value is expected to help enhance employee engagement and build our competitive advantage in recruitment, leading to enhanced human capital which is a basis of INPUT in our value creation model. We recognize that all the above will positively affect the growth of the Company.
Reference:
Management Issues for Sustainable Growth (Group Materiality Matrix) URL: https://www.kirinholdings.com/en/impact/materiality/
Kirin Group CSV Purpose
URL: https://www.kirinholdings.com/en/purpose/csv_purpose/
Kirin Group CSV Commitments
URL: https://www.kirinholdings.com/en/impact/csv_management/commitment/
Kirin Group Value Creation Model
URL: https://www.kirinholdings.com/en/purpose/model/
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MANAGEMENT STRATEGIES OVER THE MEDIUM TO LONG TERM AND TARGET MANAGEMENT INDICATORS
Plan for 2028
The Kirin Group has been working to transform its business portfolio with a view to long-term sustainable growth, taking into account future environmental changes and geopolitical risks. Going forward, we will continue to grow and enhance corporate value by operating the cash cycle. Specifically, we will improve the efficiency of existing businesses to generate stable cash flows and allocate these funds to investment in growth businesses, thereby creating a virtuous cycle of sustained growth for the entire Group. We will enhance cash generation capabilities in each of the Alcoholic Beverages, Health Science and Non-alcoholic Beverages, and Pharmaceuticals businesses, and sustain high single-digit EPS growth. At the same time, we aim to improve PER by increasing the proportion of the Health Science business within the Kirin Group, which commands relatively higher valuation multiples compared with the industry average. Through the combination of EPS growth and PER improvement, we will pursue sustainable enhancement of corporate value.
EPS growth toward 2028 will be driven by the Health Science and Non-alcoholic Beverages businesses. Through profit growth in the Health Science and Non-alcoholic Beverages businesses, we will increase their share of total EPS to approximately 25% by 2028, while also aiming for steady EPS growth in the Alcoholic Beverages and Pharmaceuticals businesses. Regarding the EPS composition by region, we will increase the Asia-Pacific share to approximately 30% by 2028 by driving EPS growth in the Health Science business.
Basic Policy
We will develop our business portfolio while taking into account uncertainties and geopolitical risks and achieve growth in the Alcoholic Beverages, Non-alcoholic Beverages, Pharmaceuticals, and Health Science businesses to realize the 2035 Vision.
Priority Issues
Create value in focus areas of each business segment
Strengthen investment in human capital, R&D, digital platforms, and marketing
KPIs
As for financial indicators for 2028, we aim to improve shareholder value through EPS growth and will continue to use ROIC as we work to exceed the cost of capital on an ongoing basis.
Further, we have promoted medium- and long-term value sharing with shareholders and investors by linking KPIs (financial and non-financial targets) and the level of achievement of annual consolidated normalized operating profit for a single fiscal year with the Officers' remuneration. (The details of the Officers' remuneration are as stated in "IV. INFORMATION ABOUT REPORTING COMPANY, 4. CORPORATE GOVERNANCE, (4) OFFICERS' REMUNERATION, ETC."
[Financial targets*1]
2026 Plan
2028 Goal
Long-term Goal
ROIC*2
7.7%
8.0%+
10%+
EPS
¥193
3-year CAGR + high single digit %
（6%+）
CAGR + high single digit %
*1 Financial indicators are evaluated by excluding the impact of exchange rate fluctuations when overseas subsidiaries are consolidated and other factors.
*2 ROIC = Profit after tax before interest / (Average total interest-bearing liabilities at beginning and end of the period + Average total equity at beginning and end of the period)
[Non-financial targets]
Financial Policy
We aim to generate profit through organic growth to maximize cash flow. We expect cash flows from operating activities of approximately ¥840.0 billion in total toward 2028. Regarding dividends, aiming for a consolidated dividend on equity (DOE) of 5%, we will, in principle, pay a progressive dividend per share. The total dividend amount for the Group is expected to be approximately ¥240.0 billion. We plan to make capital expenditures of approximately ¥440.0 billion in total, and will control the total amount by determining priorities from a long-term perspective and appropriately implementing capital expenditure necessary for safety, quality, and the environment. We will also strengthen investments in human capital, R&D, ICT, and marketing, which are the sources of value creation, to help improve our corporate value.
We will repay interest-bearing debt to ensure financial soundness while maintaining stable dividends. Going forward, we will fund M&A investments through the sale of businesses and other means. However, if there is a shortage, we will allow the gross D/E ratio to temporarily exceed 1 as long as we can expect to return to financial soundness within two to three years. We will continue to discuss the review of our business for an optimal business portfolio.
While shareholder returns will basically be provided through dividends, we will make flexible decisions on the share buybacks, taking into consideration investment opportunities and the cash balance to be generated from the sale of businesses and other sources.
In addition, we will consider the acquisition of treasury shares in cases where equity becomes excessive due to the accumulation of operating cash flows from held assets, or where cash inflows arise from the sale of businesses, and there is a timing gap before the next growth investment. Based on this policy, utilizing the cash inflow resulting from the sale of Four Roses Distillery, LLC, which was announced on February 5, 2026, we will implement the acquisition of treasury shares with an upper limit of ¥80.0 billion as additional shareholder returns.
Non-financial Policy
To achieve long-term sustainable growth, we will continue to strengthen our non-financial initiatives. Aiming to enhance our "organizational capabilities to continuously create innovation," we will promote co-creation with AI across the Group, while further strengthening our marketing and technological capabilities, which are strengths of the Kirin Group. We will also continue to strengthen our human capital, which serves as its foundation, and enhance the execution of our strategies through human capital that embodies the KIRIN WAY. Further, with a view to meeting stakeholder expectations, we have been striving to produce greater outcomes by setting non-financial targets that lead to economic value and by improving the steps of input-business-output in our Value Creation Model. Through strategic non-financial initiatives, we will promote CSV management and contribute to solving sustainability issues in society.
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FUTURE CHALLENGES
The business environment surrounding the Kirin Group is changing rapidly, driven by factors such as heightened health consciousness, alcohol regulations and declining alcohol consumption, the evolution of digital technologies including AI, and labor shortages. In addition to climate change, the economic outlook remains uncertain due to heightened geopolitical risks. While maintaining a management structure capable of responding swiftly and flexibly to change, our Group aims to enhance corporate value by solving social issues through our business activities, as a global leader in CSV. To realize our newly formulated long-term vision for 2035 - "Vitalize the world through innovation by our people and technology, as a global leader in CSV" - we designate 2026 as the starting point for transformation. We will accelerate the creation of an organization that generates innovation continuously. By strengthening investment in human capital and globally embedding "KIRIN WAY" - the Group-wide values and principles - we will enhance organizational unity and capabilities to generate transformation.
By strengthening organizational capabilities, we aim for autonomous growth across our alcoholic beverages, non-alcoholic beverages and health
sciences, and pharmaceuticals businesses, while maximizing synergies through business integration. Specifically, we will accelerate growth in the health sciences business, particularly in Asia-Pacific, enhancing its profitability as the Group's third pillar.
Whilst enhancing the profitability of our businesses, we will continue to pursue management focused on net profit to further improve shareholder returns, aiming to achieve our financial targets for EPS and ROIC. For non-financial targets, we have newly added 'R&D' and 'Digital'. We will realize sustainable growth through the achievement of each of these targets.
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Alcoholic Beverages Business
Amidst diversifying consumer preferences regarding alcoholic beverages, Kirin Brewery will focus on creating the future of alcoholic beverages and generating joy that connects people and society, grounded in its CSV purpose of "responsibility of Kirin Group which runs alcoholic beverage businesses".
In 2026, the unification of beer taxes in Japan is scheduled to take place. By promoting concentrated investment in growth categories centered on beer and RTD, we aim to achieve growth exceeding the market average. In beer, alongside strengthening our flagship brands KIRIN ICHIBAN and Kirin Beer Harekaze, we will nurture the well-performing Kirin Good Ale. In the economy category, we will focus investment on Honkirin to strengthen our foundation and achieve higher profitability. In RTD, we will enhance the KIRIN HYOKETSU brand while also pursuing new value creation.
For product lines catering to health-conscious consumers and diverse lifestyles, we will focus on expanding the non-alcoholic category and strengthening existing functional brands. Leveraging our technological capabilities to create value, we aim to establish new pillars of business. In craft beer, we have launched the limited-edition Brewers Line from the Spring Valley Brewery brand in November 2025 with plans for further limited-edition releases. Furthermore, in collaboration with regional breweries and local authorities, we plan to initiate community development and cultural cultivation centered around craft beer, starting in Yokohama City. By expanding fan engagement initiatives both digitally and in person, we will also contribute to the growth of the craft beer market as a whole.
Lion integrated its Australian and New Zealand operations in October 2025. Under this new management structure focused on Oceania, we will drive integrated growth exceeding market levels and improved profitability. We will enhance competitive advantage through cross-market knowledge sharing and cost efficiencies, alongside strengthened price management and the reinforcement of our strong Hahn and Stone & Wood brands. We will also pursue sales expansion for brands such as Hyoketsu in Australia and New Zealand.
In North America, New Belgium Brewing will expand its Voodoo Ranger brand and sales of KIRIN ICHIBAN in North America, which has commenced local production and sales.
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Non-alcoholic Beverage Business
Amidst the ongoing fierce competition in the domestic non-alcoholic beverages market, Kirin Beverage will focus on expanding its health science beverages portfolio, guided by its purpose: "Delivering good-taste health to consumers every day." This includes the nationwide launch of Mutekids, a LC-Plasma-containing beverage for children, and expanding its "immune care" beverages line-up centered on LC-Plasma to promote health value propositions across a broad range of age groups.
Furthermore, responding to growing demand for unsweetened teas, we will further strengthen the unsweetened series of Kirin Gogo-no-Kocha. In April 2026, we plan a full renewal of the Food for Specified Health Uses (FOSHU) Kirin Healthya Umami Green Tea, aiming to expand its market presence.
At Coke Northeast in North America, we will continue to focus on strong carbonated drinks sales, aiming for increased revenue through pricing strategies and retail merchandising tailored to market conditions. While increased raw material costs due to import tariffs are anticipated, we will further promote operational efficiency and cost management to maintain high profitability.
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Pharmaceuticals Business
Kyowa Kirin, as a Japan-based global specialty pharmaceutical company, will accelerate its efforts to create "life-changing" value that delivers smiles to patients worldwide.
We will continue to pursue profit growth driven by the expansion of our key therapeutic area products, Crysvita*1 and Poteligeo*2. We will steadily advance the development and launch preparations for ziftomenib*3 (product name in America: KOMZIFTI), while further strengthening our pipeline.
*1: A drug for the treatment for patients suffering from bone and joint disorders.
*2: A drug for the treatment for specific blood cancers.
*3: A drug in the development pipeline for the treatment of acute myelogenous leukaemia.
- Health Science Business
The Kirin Group aims to become one of the largest health science companies in Asia-Pacific, combining the strengths of its operating companies to pursue sustainable growth and address social issues. Operating companies such as FANCL and Blackmores, will accelerate growth by leveraging their respective strengths and creating synergies. Furthermore, we will accurately assess the market environment and health issues in each country and region, optimally utilize our management resources, and implement flexible, locally targeted strategies.
FANCL will strengthen its brand equity in its domestic cosmetics business, including skincare, and its supplements business, based on a medium-to long-term perspective. Leveraging integrated consumer data across all channels and its strengths in digital technology, it aims to enhance consumer experience through personalized proposals and services. In overseas markets, during 2026, we will establish a structure that enables the
Group to handle all sales and marketing activities for supplements and skincare products in Southeast Asia and China. At the same time, we will work on brand development and business expansion through collaboration with Blackmores.
Blackmores will focus on accelerating the growth of its Blackmores brand in Australia and New Zealand, alongside its BioCeuticals sold through pharmacists and other professional channels. It will continue marketing investment in Southeast Asia, where market growth rates and brand recognition are high. In China, it aims to expand revenue through strengthening sales channels, including e-commerce, and further brand penetration. In the LC-Plasma business, alongside expanding the range of high-value-added products, we are accelerating the expansion of domestic and international markets and distribution channels, as well as the launch of new products. Utilizing Blackmores' distribution channels, the company aims to expand the sales of LC-Plasma supplements into Australia and Southeast Asian countries, following the launch in Taiwan in 2025. Furthermore, by integrating the sales infrastructure with FANCL, we seek to enhance operational efficiency and profitability.
The Kirin Group will continue to pursue sustainable growth and enhance corporate value through its unique business portfolio management and robust strategic execution. By encouraging every employee to continually take on the challenge to innovate, we aim to achieve further growth as a global leader in CSV.
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Alcoholic Beverages Business
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BASIC MANAGEMENT POLICY
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APPROACHES TO AND INITIATIVES FOR SUSTAINABILITY
Basis of preparation of sustainability-related financial disclosures
General information
The Group prepares its sustainability-related financial disclosures in accordance with the Sustainability Disclosure Standards,*which have been early adopted from the current fiscal year pursuant to Article 19-9, Paragraph 1 of the Cabinet Office Ordinance on Disclosure of Corporate Affairs (Ministry of Finance Ordinance No. 5 of 1973), as applied under Article 2, Paragraph 1 of the Supplementary Provisions of the Cabinet Office Ordinance Partially Amending the Cabinet Office Ordinance on Disclosure of Corporate Affairs and the Cabinet Office Ordinance on Disclosure of Information, etc. on Regulated Securities (Cabinet Office Ordinance No. 5 of February 20, 2026). Forward-looking statements contained herein are based on the judgments of the Group as of the end of the current fiscal year.
These sustainability-related financial disclosures have been prepared for the reporting period of the current fiscal year (from January 1, 2025 to December 31, 2025). These sustainability-related financial disclosures do not include comparative information, in accordance with paragraph 93 of the Universal Sustainability Disclosure Standards "Application of the Sustainability Disclosure Standards," paragraph 42 of the Theme-based Sustainability Disclosure Standard No. 1 "General Disclosures," and paragraph 102 of the Theme-based Sustainability Disclosure Standard No. 2 "Climate-related Disclosures." Furthermore, these sustainability-related financial disclosures do not include Scope 3 greenhouse gas emissions, in accordance with paragraph 103 (2) of the Theme-based Sustainability Disclosure Standards No. 2 "Climate-related Disclosures." Scope 3 greenhouse gas emissions will be disclosed once preparations for such disclosure are complete.
These sustainability-related financial disclosures were authorized for issue on March 27, 2026 (date of authorization for issue) by Shinjiro Akieda, Director of the Board, Senior Executive Officer, CFO and Chairperson of the Group Information Disclosure Committee, after deliberation by said committee, and are reported to Takeshi Minakata, Representative Director of the Board, President & COO.
The Group has obtained third-party assurance (limited assurance) from KPMG AZSA Sustainability Co., Ltd. for governance, risk management, and Scope 1 and Scope 2 emissions, as well as a portion of the metrics within these sustainability-related financial disclosures. For details, please refer to the "Sustainability-related Financial Disclosures in accordance with the SSBJ Standards - 187th Fiscal Year (2025)" available on the following website.
URL: https://www.kirinholdings.com/jp/investors/library/financial_results/
*Sustainability Disclosure Standards developed by the Sustainability Standards Board of Japan (SSBJ) (Japanese standards) to be consistent with the IFRS Sustainability Disclosure Standards developed by the International Sustainability Standards Board (ISSB).
Information on sources of guidance
The Group applies the Sustainability Disclosure Standards to identify material themes, risks, and opportunities for its sustainability-related financial disclosures. In addition, taking into account the Company's business and business model described later, the Group refers to the Industry-based Guidance on implementing IFRS S2 (published in June 2023; hereinafter referred to as the "Industry-based Guidance") for the alcoholic beverages, non-alcoholic beverages, and processed foods industries published by the International Sustainability Standards Board (ISSB), and the SASB Standards (last revised in December 2023; hereinafter referred to as the "SASB") for the alcoholic beverages, non-alcoholic beverages, processed foods, and biotechnology and pharmaceuticals industries. Furthermore, from among the management issues extracted in the Group Materiality Matrix (hereinafter referred to as the "GMM"), which was formulated with reference to GRI, ISO 26000, etc., the Group has identified the following seven material themes as targets for identifying sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects. The Group has also assigned an executive officer in charge to each theme to ensure accountability.
Adverse effects of alcohol consumption
Healthy longevity society
Unmet medical needs
Human capital
Human rights
Consumer issues
The Environment (climate change and natural capital)
Judgments
Of the judgments made in the process of preparing the sustainability-related financial disclosures, the judgment that has the most significant effect on the information included in the disclosures is as follows:
Identification of sustainability-related risks and opportunities
For further details, please refer to "(3) Risk management, 1) Sustainability-related risk management, (a) Identification of material sustainability-related risks and opportunities."
Measurement uncertainty
The most significant source of uncertainty affecting the quantitative information reported in the sustainability-related financial disclosures is as follows:
Financial effects assessed through climate-related scenario analysis
For further details, please refer to "(5) Disclosures by material theme, 7) The Environment (climate change and natural capital), (b) Risk management, (ii) Identification of risks and opportunities, a. Scenario analysis related to climate change, c. Financial impacts and responses based on analysis results."
Governance
As a pure holding company, the Company is responsible for formulating and promoting the overall Group strategy, monitoring each business, promoting the creation of synergies through Group-wide coordination, examining sustainability-related issues, and formulating fundamental policies regarding sustainability.
The Group regards material themes essential to its sustainable existence and growth, together with stakeholders, as management issues, and promotes CSV management through proactive responses. The Group strives to establish a system to address sustainability-related issues across the organization, aiming not only to advance risk management but also to create revenue and profit opportunities through co-creation with stakeholders.
When making decisions at meetings of the Board of Directors and the Group Executive Committee, in accordance with the Rules of Decision-Making Procedures and relevant internal regulations, the Group identifies potential strategic options, clarifies both the expected effects and risks of each option, and discusses the risks and opportunities anticipated to arise from the selection of each strategy, including their potential impacts and likelihood of occurrence, as well as measures to address such risks (elimination, mitigation, and risk taking).
Supervisory structure (governance body or individual)
The Board of Directors is responsible for the oversight of sustainability-related risks and opportunities. The Board of Directors recognizes sustainability-related risks and opportunities as material management issues. From the perspective of enhancing corporate value over the medium to long term, the Board of Directors discusses initiatives to address these issues after resolving the Group CSV Policy, which includes the GMM, based on the Regulations on Work Authority.
Additionally, on an annual basis, the Board of Directors receives information from the Director of the Board, Senior Executive Officer, CFO, the chairperson of the Group Information Disclosure Committee, regarding sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects, identified based on the GMM, and their monitoring metrics.
The Board of Directors oversees the execution of sustainability-related operations through quarterly reports from the Corporate Strategy Department for each business and function.
The Board of Directors oversees the effectiveness of sustainability management through these deliberations and reports from management described below.
Furthermore, regarding the process from the selection of significant risks and opportunities to sustainability-related financial disclosures, the Group has established the Sustainability-related Financial Disclosure Policy Based on SSBJ Standards and the Practical Guidelines for Sustainability-related Financial Disclosures Based on SSBJ Standards and maintains and operates internal systems accordingly. These internal systems are subject to internal audits by the Company's Internal Audit Department.
Executive structure (management role)
The Group has established the four bodies described below as advisory bodies to the President & COO. As a general rule, matters discussed or decided by the Group CSV Committee, the Group Risk and Compliance Committee, and the Group Information Disclosure Committee are deliberated at the Group Executive Committee before being reported to the Board of Directors.
Group Executive Committee
The Group has established the Group Executive Committee as an advisory body to support the President & COO in decision-making. Consisting of Senior Executive Officers or above including the President & COO, Standing Audit & Supervisory Board Members, and professional advisors, the committee discusses strategies and investments that have significant implications for the Group's management, and meetings are held weekly in principle.
Based on long-term policies and strategies, the Group Executive Committee deliberates and resolves short- to medium-term non-financial targets and investment plans necessary for their realization. It also receives reports from operating companies and divisions on the status of target achievement and risks, and supervises these companies and divisions.
Group CSV Committee
The Group has established the Group CSV Committee to discuss CSV issues across the Group, which in principle meets three times a year. In accordance with the Rules of the Group CSV Committee, the committee is an advisory body to the President & COO, co-chaired by the CEO and the President & COO of the Company, with its members being the CEOs of major Group companies and Senior Executive Officers or above of the Company. With the participation and advice of outside experts from a multi-stakeholder perspective as necessary, the committee exchanges opinions on long-term sustainability policies and strategies, such as the GMM, and submits or reports the results to the Board of Directors.
Group Risk and Compliance Committee
The Group has established the Group Risk and Compliance Committee, chaired by the Executive Officer in charge of risk management with members consisting of Senior Executive Officers or above serving as standing members, and meets twice a year in principle. In accordance with the Group Risk Management Regulations, the Group defines risk as "uncertainty with the potential to seriously impede the accomplishment of the Kirin Group's business targets or impact business continuity (including both opportunities and threats)." The committee oversees all aspects of risk management activities, including those related to sustainability issues, determines risk management policies, selects the Group's major risks, and reports them to the Board of Directors.
Group Information Disclosure Committee
The Company has established the Group Information Disclosure Committee, chaired by the Director of the Board, Senior Executive Officer, CFO, with members consisting of relevant officers and department heads, and it meets quarterly in principle. In accordance with the Rules of the Information Disclosure Committee, the committee decides on timely disclosure information, including Annual Securities Reports.
Sustainability-related risks and opportunities to be disclosed in the Annual Securities Report that could reasonably be expected to affect the Group's prospects, along with their monitoring metrics, are decided by the Group Information Disclosure Committee and reported to the President & COO.
Sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects to be disclosed in the Annual Securities Report, as well as their monitoring metrics, are discussed in bodies established for each material theme in principle. These are finalized in consideration of the Group's major risks selected by the Group Risk and Compliance Committee, and are determined by the Information Disclosure Committee based on the results of such discussions.
Corporate Governance System
Skills and competencies required of the Board of Directors
In order for the Company to ensure that its supervisory and executive structures function appropriately and to realize sustainable growth and the improvement of corporate value for the Group, it is required that the Board of Directors and the Audit & Supervisory Board each possess the necessary skills as a whole while ensuring diversity in terms of gender, internationality, and other factors. This requirement applies equally to the executive side.
Looking beyond KV2027, the Company has recently announced a new Long-Term Management Vision, "Innovate2035!" Taking this opportunity, the Company has reviewed the skills required of the Board of Directors and the Audit & Supervisory Board.
First, the Company considers an in-depth understanding of and empathy for the philosophy of "CSV management" promoted by the Group to be a basic and essential requirement common to all Directors of the Board and Audit & Supervisory Board Members.
On that basis, while premised on comprehensive capabilities in "Corporate Management" through experience as a corporate or business executive, the Company has positioned knowledge in the areas of "Sustainability," "Global," "Finance / IR," and "Legal / Risk Management" as essential basic skills for driving the Company's management and ensuring the effectiveness of corporate governance.
Furthermore, under "Innovate2035!," the Group aims to achieve sustainable growth through CSV management and contribute to the social issue of "Health and Well-Being." The Group has established the following vision: "Vitalize the world through innovation by our people and technology, as a global leader in Creating Shared Value (CSV)." The sources for creating innovation are the Group's organizational capabilities such as "R&D," "Marketing," "Human Resources and Organization," "ICT and DX," and "Manufacture and Quality Assurance." These
capabilities are regarded as essential skills for the Board of Directors and the Audit & Supervisory Board to conduct highly effective decision-making and oversight.
Regarding skills related to "Sustainability," the Company provides input on sustainability (CSV management) as part of its corporate governance training conducted annually for the Company's newly appointed officers and department heads. After the input session, the Company also facilitates exchanges of opinions among officers on material themes, including questions and answers regarding the content.
Definitions of skills and competencies
The definitions of skills and competencies required of the Company's Directors of the Board, Audit & Supervisory Board Members, and Executive Officers are as follows.
Areas of
skills and competencies
Definitions of skills and competencies
Benchmark for fulfillment
Management/ Governance
Corporate Management
Capability to oversee the formulation and execution of group-wide strategies, the optimal allocation of management resources, and the building of trust with stakeholders, for the purpose of sustainable improvement of corporate value.
Management experience as Director or Executive Officer at a listed company, etc.*1, experience bearing decision-making responsibility at management meetings and/or meetings of board of directors, or equivalent achievements in other organizations*2.
Sustainability
Capability to identify material issues such as climate change, natural capital, human rights, and the supply chain, and integrate these issues into business strategy, capital allocation, risk management, and KPIs to lead to the medium- to long-term improvement of corporate value.
Experience in the formulation and promotion of sustainability strategies at a listed company, etc., leading roles in relevant committees, the introduction of disclosures or external assurance, and experience of dialogue with investors and stakeholders, or equivalent achievements in other organizations.
Global
International management capability to capture growth opportunities in global markets and expand corporate value.
Business experience in two or more countries, responsibility for executing cross-border M&As, experience of addressing local laws, regulations, and cultures, or equivalent achievements in other organizations.
Finance/IR
Strategic financial management capability to enhance corporate value by ensuring financial soundness and optimizing capital efficiency.
Experience as a CEO or CFO at a listed company, etc., leadership experience in fundraising, M&A, or IR activities, or equivalent achievements in other organizations.
Legal/Risk Management
Capability to ensure the reliability and sustainability of the Company through compliance with laws and regulations and through the identification, assessment, and response to corporate risks.
Experience overseeing legal and compliance departments at a listed company, etc., or equivalent achievements in other organizations.
Source of Innovation
R&D
Capability to formulate and oversee R&D strategies that contribute to the medium- to long-term growth and enhancement of corporate value by creating new values and establishing competitive advantages through technological innovation.
Experience overseeing R&D departments at a listed company or research institutions, experience of commercializing research themes, and experience as the person responsible for formulating technology roadmaps.
Marketing
Capability to enhance competitive advantage and corporate value by creating customer value and improving brand value.
Experience as a CMO at a listed company, etc., experience in formulating and executing global brand strategies, experience overseeing advertising and PR activities, or equivalent achievements in other organizations.
Human Resources/ Organization
Capability to formulate and execute human resources strategies that enhance organizational competitiveness by maximizing the value of human capital.
Experience as a CEO or CHRO at a listed company, etc., experience in the formulation and operation of succession plans, and experience as the person responsible for promoting DE&I, or equivalent achievements in other organizations.
ICT/DX
Capability to promote operational efficiency and new value creation by utilizing digital technology, contributing to the strengthening of corporate competitiveness and the enhancement of customer experience.
Experience as a CDO at a listed company, etc., experience in the formulation and execution of DX strategies, and experience in establishing IT governance and information security systems, or equivalent achievements in other organizations.
Manufacture/ Quality Assurance
Capability to manage the integrated flow from procurement, manufacturing, and logistics to sales to achieve stable supply and efficiency. Capability to maintain and enhance customer trust and corporate value by ensuring quality, safety, and supply stability.
Experience as a head of production departments in the manufacturing industry, experience leading the formulation and execution of SCM strategies, and experience of improving inventory, logistics, and supply systems. Experience as a head of quality assurance departments, acquisition and maintenance of ISO and other certifications, experience in handling major quality issues, or equivalent achievements in other organizations.
*1: A listed company, etc. means a listed company or other comparable organizations.
*2: Organizations include government agencies, law firms, audit firms, academia, NPOs, and other similar entities.
Status of fulfillment of skills and competencies, etc.
The status of skills and competencies held by each officer is as follows.
Directors (Note 1)
Position
Name
Management / Governance
Source of Innovation
Corporate Management
Sustainability
Global
Finance / IR
Legal / Risk Management
R&D
Marketing
Human Resources / Organization
ICT / DX
Manufacture / Quality Assurance
Representative Director of the
Board & CEO
Yoshinori Isozaki
◎
◎
〇
◎
〇
〇
〇
Representative Director of the Board,
President & COO
Takeshi Minakata
◎
〇
〇
〇
◎
◎
〇
Director of the Board,
Senior Executive
Vice President
Junko Tsuboi
〇
〇
◎
◎
◎
Director of the Board,
Senior Executive
Officer
Toru Yoshimura
◎
〇
◎
〇
〇
〇
〇
◎
Director of the Board,
Senior Executive
Officer
Shinjiro Akieda
〇
◎
〇
◎
〇
〇
◎
Director
Hiroyuki
Yanagi
●
●
●
Director
Noriko
Shiono
●
●
●
Director
Shinya
Katanozaka
●
●
●
Director
Yoshiko
Ando
●
●
●
Director
Shingo
Konomoto
●
●
●
Director
Naoko
Mikami
●
●
●
Director
Kenichi
Fujinawa
●
●
●
(Note 1) For Internal Directors, areas in which they possess expertise and experience are indicated by "〇," and among those, areas where particularly significant contributions are expected are indicated by "◎." For Non-executive Directors, areas where particularly significant contributions are expected are indicated by "●" (The maximum number of "◎" and "●" is set at three).
Executive Officers (Note 2)
Position
Name
Management / Governance
Source of Innovation
Corporate Management
Sustainability
Global
Finance / IR
Legal / Risk Management
R&D
Marketing
Human Resources / Organization
ICT / DX
Manufacture / Quality Assurance
Senior Executive
Officer
Mitsuharu
Yamagata
〇
〇
◎
◎
◎
Senior Executive
Officer
Kazufumi
Nagashima
〇
〇
〇
◎
◎
Senior Executive
Officer
Toshihito
Hama
〇
◎
〇
◎
◎
Senior Executive
Officer
Daisuke
Fujiwara
〇
◎
◎
〇
Senior Executive
Officer
Yoshiyuki
Yonetani
〇
〇
◎
◎
Senior Executive
Officer
Hiroaki
Takaoka
◎
〇
◎
◎
Senior Executive
Officer
Hideki
Horiguchi
◎
〇
◎
〇
◎
〇
Senior Executive
Officer
Kazuhiro
Inoue
◎
◎
〇
〇
〇
Senior Executive
Officer
Hideki
Mitsuhashi
◎
〇
◎
〇
〇
◎
〇
〇
Senior Executive
Officer
Alastair Symington
◎
〇
◎
〇
◎
〇
(Note 2) For Senior Executive Officers, areas in which they possess expertise and experience are indicated by "〇," and among those, areas where particularly significant contributions are expected are indicated by "◎" (The maximum number of "◎" is set at three).
Audit & Supervisory Board Members (Note 3)
Position
Name
Management / Governance
Source of Innovation
Corporate Management
Sustainability
Global
Finance / IR
Legal / Risk Management
R&D
Marketing
Human Resources /
Organization
ICT / DX
Manufacture / Quality
Assurance
Standing Audit & Supervisory Board
Member
Toru Ishikura
●
●
●
Standing Audit & Supervisory Board
Member
Hajime Kobayashi
●
●
●
Audit & Supervisory
Board Member
Kaoru Kashima
●
●
●
Audit & Supervisory
Board Member
Yoko Dochi
●
●
●
Audit & Supervisory
Board Member
Tim Lester
●
●
●
(Note 3) For Audit & Supervisory Board Members, areas where particularly significant contributions are expected are indicated by "●" (The maximum number of "●" is set at three).
Process for determining the skill set of Directors of the Board, Audit & Supervisory Board members, and Executive Officers
The level of skill fulfillment is included in the annual evaluation of the effectiveness of the Board of Directors, and the Nomination and Remuneration Advisory Committee selects candidates based on the results of these evaluations.
When it is necessary to nominate a new candidate possessing skills and competencies deemed necessary based on the results of the effectiveness evaluation, skills are assessed through professional history, interviews, and other means. In such cases, importance is placed on the candidate having experience in corporate management and general business management experience and experience in direct dialogue with stakeholders.
For candidates for re-appointment, skills are regularly evaluated and reviewed based on the experience and content of discussions during previous terms in office, as well as the provision of information on the Group's businesses, training, and other factors.
Incorporation into executive remuneration
Remuneration for Executive Officers is designed to function as an incentive for the realization of CSV management and the enhancement of corporate value over the medium to long term.
Remuneration for Directors of the Board is determined by resolution of the Board of Directors in accordance with the Regulations on Work Authority, within the limit of the total amount previously resolved at the General Meeting of Shareholders. In determining such remuneration, its validity is deliberated by the Nomination and Remuneration Advisory Committee to ensure a fair process with enhanced transparency and objectivity.
Executive remuneration is composed of three parts: basic remuneration, which is fixed remuneration; bonus as a short-term incentive, which is performance-linked remuneration; and stock-based remuneration as a medium- to long-term incentive. In determining stock-based remuneration, evaluation indicators are selected from the consolidated financial and non-financial indicators for the Kirin Group set out in the business plan, with the aim of promoting both medium- to long-term improvement of shareholder value and the creation of social value.
Regarding stock-based remuneration, the Company has adopted a trust-type stock compensation plan. This plan is composed of Restricted Share Units (RSU), which do not have performance requirements, and Performance Share Units (PSU), which are linked to the degree of achievement of performance targets under the three-year rolling business plan. The performance evaluation indicators for the PSU consist of ROIC and EPS growth rate, which are major management indicators set out in the business plan, as well as non-financial indicators. The nonfinancial indicators are determined based on a quantitative evaluation of the degree of achievement of specific indicators defined for each of the four items: "The Environment," "Community Engagement," "Health and Well-Being," and "Human Capital." After evaluating each item by incorporating qualitative aspects of each indicator and the overall items, the non-financial evaluation is decided through a comprehensive evaluation that considers both the evaluation results and qualitative considerations. The pay rate for the PSU is variable ranging between 0% and 200%, with 100% representing the achievement of targets.
Structure of officers' remuneration
Calculation formula for PSU performance-linked factor under the trust-type stock compensation
For the Representative Director of the Board & CEO, basic remuneration accounts for 27%, bonus for 31%, and stock-based remuneration for 42%. Of the stock-based remuneration, RSU accounts for 30% and PSU for 70%, and the proportion of non-financial performance within PSU is 20%. Accordingly, assuming a pay rate of 100% for each component, approximately 6% of the executive remuneration for the Representative Director of the Board & CEO is linked to non-financial evaluation indicators.
Of the officers' remuneration recognized in the current fiscal year (including remuneration for Non-executive Directors and Audit & Supervisory Board Members, who receive only fixed remuneration), approximately 5% is linked to non-financial evaluation items. As described above, the non-financial evaluation is determined based on a comprehensive evaluation of the four items; therefore, the portion related to climate-related evaluation items cannot be separately identified.
To ensure objectivity and transparency, the evaluation results and payout list are deliberated by the Nomination and Remuneration Advisory Committee based on the evaluation by the Group Executive Committee, and then determined by the Board of Directors. The non-financial indicators are shown in the figure below.
Non-executive Directors are responsible for overseeing and advising on the management of the Company and the Kirin Group as a whole from an objective standpoint, and Audit & Supervisory Board Members are responsible for auditing the execution of duties by the Directors of the Board and Executive Officers from an objective standpoint; accordingly, only basic remuneration (fixed remuneration) is paid to these respective parties.
Item
Indicator
The Environment
·
·
·
Reduction ratio of GHG emissions (Scope 1+2 (compared with 2019)) Percentage of recycled resin used in PET bottles in Japan
Water use intensity at manufacturing sites with high water stress
Community Engagement
·
Level of contribution to the creation of a positive force for society through business activities
Health and Well-Being
·
·
·
Social impact of the Group's health science products and contribution to the expansion of the immunity market (LC-Plasma)
Global product launch status in key countries
Achievement level of collaboration between pharmaceuticals and health science
Human Capital
·
CSV practice score
·
Employee engagement score
·
LTIR Score
·
Presenteeism
·
Ratio of female managers in Japan (Kirin Holdings Company, Limited)
Consideration of trade-offs associated with risks and opportunities
For decision-making regarding transactions within the Group that require approval by the Company, the proposing company or department examines the risks through which material themes, primarily "The Environment (climate change and natural capital)" and "Human rights," exert impact, considering the magnitude of impact and likelihood of occurrence, as well as responses to risks and opportunities (elimination, mitigation, and risk taking). The results of this examination are submitted for approval after consultation with the relevant departments within the Company.
Risk management
Risk management related to sustainability
Significant risks and opportunities related to sustainability are monitored as part of the management process for the Group's major risks. Risk management for material themes is described in the risk management sections for each material theme.
The Group's major risks are identified by aggregating risks from two perspectives: (i) risks related to the entire Group's goals, strategies, and business execution, and (ii) business-specific risks. Each risk is assessed in terms of both quantitative and qualitative impact on the Group while also taking into account the likelihood of occurrence. The materiality of each risk is determined based on the two axes of impact and likelihood. Furthermore, major risks are centrally managed through a risk map. The Group Risk and Compliance Committee discusses the Group's major risks identified through this process, including responses to each risk and the level of risk tolerance. In addition, the Group's major risks are deliberated by the Board, which reviews changes in conditions and assesses countermeasures.
The Company and other Group companies promote and exercise risk management in cooperation with each other by formulating and implementing measures tailored to each risk. Meanwhile, through monitoring conducted from the dual perspectives of business and function, we manage and control strategic risks, while establishing a risk management system designed to prevent the manifestation of risks that could develop into a crisis and minimize any potential negative impact when such a crisis occurs, thereby striving for risk mitigation and appropriate management.
In addition, compared with previous reporting periods, no changes have occurred in the management processes for significant risks and opportunities related to sustainability within the Group.
Identification of significant sustainability-related risks and opportunities
The Group identifies management issues extracted through the GMM, which was developed with reference to the GRI Standards, ISO 26000, and other frameworks, as a foundation (long list). These issues are then consolidated into material themes, taking into account the SASB disclosure topics. Risks and opportunities related to each material theme are reviewed annually. After consulting with the departments responsible for each theme, the Group Information Disclosure Committee determines whether any revisions are required. Where revisions are deemed necessary, specific reviews are conducted by the meeting bodies established for each theme. In addition, the significance of such risks and opportunities is assessed using two axes: the magnitude of financial impact in the event that they materialize (less than ¥5 billion, ¥5 billion to ¥10 billion, or ¥10 billion or more) and the likelihood of occurrence (approximately once every 10 years, once every 10 to 30 years, or once every 30 years or more). Specifically, risks and opportunities with a large financial impact (¥10 billion or more) are assessed as having high significance regardless of likelihood. For those with a moderate financial impact (¥5 billion to ¥10 billion), only those with a high likelihood of occurrence (approximately once every 10 years) are assessed as having high significance and selected as risks and opportunities to be disclosed.
Integration into the management process for the Group's major risks
The results of the selection of sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects are provided to the Corporate Strategy Department as part of the confirmation of policies, environmental changes, business activities, and other relevant factors to be considered when selecting the Group's major risks.
Subsequently, the Corporate Strategy Department collects information from a wide range of sources on external risks (such as geopolitics, legal systems, climate change, natural disasters, and technological innovation) that could affect the Group's business and strategy. The department conducts various analyses including scenario analysis (scenario analysis is conducted for environmental themes), and based on these analyses, identifies and selects the Group's major risks, including sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects. These results are discussed by the Group Risk and Compliance Committee and determined by the Board of Directors.
Furthermore, the Company regards sustainability-related issues as consideration factors and risk drivers underlying various types of risks and manages them within the framework of its integrated risk management. While the Company does not prioritize sustainability-related risks over other categories of risk, it positions CSV as the core of its management and pursues management that prioritizes the co-creation of value with society. Accordingly, sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects are consistently considered within its management strategy and risk management processes.
Determination and reporting of sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects
The sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects, which have been finalized taking into account the results of the identification of the Group's major risks, are decided by the Group Information Disclosure Committee and reported to the President & COO.
Employee training regarding sustainability-related risks that could reasonably be expected to affect the Group's prospects and response when risks materialize
In the Group, for the purpose of "fulfilling both legal and ethical responsibilities that society expects from us, not to mention adhering to laws, internal and external regulations and rules, thereby meeting stakeholders' expectations and maintaining and improving trust in and the corporate value of the Kirin Group," the Group conducts compliance training and information security training every year for all officers and employees, including contract and temporary employees in Japan. These training programs include the necessity of responding to risks such as the leakage of personal information, which is recognized as one of the material sustainability-related risks and could lead to a loss of customer trust and the incurrence of claims for damage compensation.
Furthermore, in the event that a risk materializes despite such employee training, the Group responds in accordance with the "Group Crisis Management Manual."
Strategy
Business model
Beginning with Fermentation and Biotechnology that the Kirin Group cultured through its founding beer business for over a century, the Group operates its businesses in the three domains of Food & Beverages, Pharmaceuticals, and Health Science.
Food & Beverages domain (alcoholic and non-alcoholic beverages)
Centered on its founding beer business, this remains the Group's core business segment. Since the 1990s, the Group has accelerated its global expansion, primarily in Asia and Oceania, and manufactures and sells numerous high value-added brands.
Pharmaceuticals domain
By combining biotechnology with technology evolving from microorganism and cell research cultivated through beer manufacturing, the Group commenced pharmaceutical research and development in the 1980s. It has now developed into a major business for the Group, which operates its business globally with a focus on biopharmaceuticals.
Health Science domain
Through research into natural ingredients in the Food & Beverages domain, as well as fermentation and cultivation, the Group has discovered many substances beneficial to the body, including Lactococcus lactis strain Plasma (LC-Plasma, a postbiotic). This is a business domain that the Group will foster as a pillar of its future growth by leveraging these assets.
Based on the businesses and business model of the Group described above, the Group has identified the alcoholic beverages industry, non-alcoholic beverages industry, processed foods industry, and biotechnology and pharmaceuticals industries as industries relevant to the Group.
Planning horizons
The Group recognizes that achieving the "2035 Vision" set out in "Innovate2035!," the Kirin Group's ten-year Long-Term Management Vision starting in 2026, will contribute to the Group's sustainable growth and the enhancement of medium- to long-term corporate value, and has therefore formulated and is implementing its plans.
To realize the "2035 Vision," defined as "Vitalize the world through innovation by our people and technology, as a global leader in Creating Shared Value (CSV)," the Group has identified material issues to address in order to continue to exist and develop sustainably alongside society over the next ten years, and has organized them in the GMM.
While taking into account the long-term material issues identified through the GMM, and based on performance in the most recent fiscal year, the Group determines medium-term plan targets for the next three years and further translates them into annual plans. The three-year plan targets are reviewed and rolled forward annually to reflect actual performance.
Accordingly, the Group defines the short-, medium-, and long-term time horizons over which sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects may arise, as follows: the short term as one year after the end of the current fiscal year, the medium term as two to three years, and the long term as four to ten years.
Value chain
The representative value chains for the Group's three domains, Food & Beverages, Pharmaceuticals, and Health Science, are as follows. Regarding sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects, information on where in the value chain they are concentrated, as well as the current and anticipated effects of these risks and opportunities on the business model and value chain, is provided in the table of "Sustainability-related risks and opportunities that could reasonably be expected to affect the Group's* prospects" within the strategies for each material theme.
In addition, as the effects on the Group* and the concentration of risks and opportunities within the value chain are described in the columns for "Effects on the business model/value chain and financial effects that occur when risks and opportunities materialize," "Likelihood," "Financial materiality," and "Segments affected by risks and opportunities" in that table, the "Value chain" column in that table lists the Group*'s stakeholders, excluding the Group* itself.
*For the Unmet Medical Needs theme, the term "Kirin Group" is used.
Food & Beverages domain
Pharmaceuticals domain
Health Science domain
Trade-off case
In the acquisition project carried out during the current fiscal year, the Group conducted ESG due diligence and made its decision by assessing the impact on sustainability-related risks, with environment and human rights considerations treated as essential requirements.
Disclosures by material theme
-
MANAGEMENT POLICY, BUSINESS ENVIRONMENT, AND FUTURE CHALLENGES
Adverse effects of alcohol consumption
The Alcoholic Beverages Business accounts for approximately 50% of the Group's consolidated revenue and consolidated normalized operating profit. Over the medium term, if regulations on alcohol sales (including increase of liquor tax), advertising, and promotion are strengthened in the countries and regions where the Group operates, there is a possibility that a decrease in alcohol sales and an increase in regulatory compliance costs, among other effects, may occur in those countries.
Governance
To promote a response to the adverse effects of alcohol consumption, the Group annually includes alcohol-related problems as an agenda item at either the Group CSV Committee, in which the officer in Charge of CSV strategy participates, or at the Board of Directors. The Group reports on or discusses the Group's initiatives and reflects the outcome in the overall Group strategy. When matters are reported or discussed at the Group CSV Committee, the outcomes are reported to the Board of Directors. In the current period, these issues were discussed by the Board of Directors.
Furthermore, to deepen the understanding of the adverse effects of alcohol consumption and reflect it in management, the CEO and other officers involved in the Alcoholic Beverages Business visit the National Hospital Organization Kurihama Medical and Addiction Center, which provides specialized treatment for alcoholism, and receive lectures on the latest research and issues regarding alcohol-related problems. The most recent visit took place in 2023.
Risk management
Where the Group Information Disclosure Committee determines that a review of risks and opportunities is required, the Group CSV Committee or the Board of Directors discusses revisions to risks related to the adverse effects of alcohol consumption in light of changes in the internal and external environment. In addition, for sustainability-related risks that could reasonably be expected to affect the Group's prospects, the Group CSV Committee or the Board of Directors monitors the progress of response strategies. In the current period, the Board of Directors has addressed external trends concerning alcohol-related problems and reaffirmed the importance of raising awareness of responsible drinking.
Strategy
The Group has identified "Health and Well-Being," "Community Engagement," and "The Environment" as material issues for sustainable growth and development alongside society, but as a prerequisite, fulfilling the "Responsibility of Kirin Group which runs Alcoholic Beverage Businesses" is positioned as its CSV Purpose. Through its business activities, the Group strives to identify stakeholders who could potentially be subject to the adverse effects of alcohol consumption, as well as the impact that such stakeholders could have on the Group's business. The Group is committed to preventing and mitigating these adverse effects, fulfilling its responsibility as the Kirin Group that operates an alcoholic beverages business, and making steady progress toward initiatives to eradicate the harmful use of alcohol.
In the current fiscal year, the Group has been promoting these initiatives in accordance with the plan envisioned at the end of the previous fiscal year.
The sustainability-related risks and opportunities identified for this theme that could reasonably be expected to affect the Group's prospects are as follows.
Risks and opportunities
Value chain (Stakeholders of the Group)
Effects on the business model/value chain and financial effects that occur when risks and opportunities materialize
Likelihood
Financial materiality
Segments affected by risks and opportunities
Time horizons over which the effects of risks and opportunities are
expected to occur
Upstream
The Group
Downstream
Risk
(i) Risk of strengthened regulations on the sale of alcoholic beverages (including increase of liquor tax), advertising, and promotion in the countries and regions of business operations
Consumers
Effects on the business model/value chain
degree of strengthening)
High
Medium
Alcoholic beverages
Medium term
Strengthening of regulations on the sale of alcoholic beverages
Decrease in sales volume Financial effects
Decrease in sales of alcoholic beverages (the financial effect varies depending on the countries where regulations are introduced and the degree of strengthening)
Increase in regulatory compliance costs (the financial effect varies depending on the countries where regulations are introduced and the
Response strategy for the "Risk of strengthened regulations on the sale of alcoholic beverages (including increase of liquor tax), advertising, and promotion in the countries and regions of business operations"
The Group has established the "Policy for responsible drinking" to fulfill its CSV Purpose of "Responsibility of Kirin Group which runs Alcoholic Beverage Businesses" and to advance initiatives toward the eradication of the harmful use of alcohol. While promoting efforts to eradicate the harmful use of alcohol throughout the Group, the Group will contribute to the cultivation of a moderate drinking culture and the realization of a vibrant society. With respect to alcoholic beverages marketing, the Group has enacted the Kirin Group Global Marketing Code for Responsible Drinking. This code represents the Group's commitment to conducting its business in accordance with social norms based on the standards of each country and region, while promoting responsible alcohol consumption and consistently maintaining high standards. It applies to all employees and partners involved in the Group's marketing and promotional activities for responsible drinking. Furthermore, to ensure that employees acquire the knowledge of responsible drinking expected of members of a corporate group engaged in the alcohol business, the Group provides training aimed at raising awareness of responsible drinking for Group employees in Japan. The Group also conducts the Alcohol Use Disorders Identification Test (AUDIT) to provide opportunities for employees to reflect on their own drinking habits. Additionally, in countries and regions where the Group operates alcoholic beverage businesses, the Group takes action to raise awareness of responsible drinking for consumers. Through these activities, the Group encourages consumers to understand their own alcohol tolerance, to correctly understand the characteristics and benefits of alcoholic beverages, as well as the negative aspects associated with misuse, and to provide guidance for responsible alcohol consumption. In the current fiscal year, as specific activities to raise awareness of responsible drinking, the Group conducted video distribution and awareness activities within winery tours, and visited universities and companies to hold responsible drinking seminars. Furthermore, the Group is a member of the International Alliance for Responsible Drinking (IARD), a group supported by global alcohol producers, through which the Group promotes initiatives to raise awareness of responsible drinking and reduce the harmful use of alcohol. In Japan, Kirin Brewery is a member of the Brewers Association of Japan and works to raise awareness of responsible drinking in collaboration with the beer industry. In the current fiscal year, there were no cases in which trade-offs between other sustainability-related risks and opportunities were considered.
The response strategies for sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects, and the financial effects arising from the responses to those risks and opportunities, are as follows. In the current fiscal year, these risks have not materialized. However, in the medium term, if regulations on the sale of alcoholic beverages (including increase of liquor tax), advertising, and promotion are strengthened in the countries and regions of business operations, there is a possibility that a decrease in sales of alcoholic beverages or an increase in regulatory compliance costs may occur in the countries where the Group operates its alcoholic beverages business. Furthermore, quantitative information is not disclosed, as it is difficult to estimate the extent to which existing customers would be affected in the event that the risk materializes.
Risks and opportunities
Response strategy
for risks and opportunities
Financial effects of response strategy
Financial effects (¥ millions)*1
Current
fiscal year
Short term
(1 year later)
Medium term
(3 years later)
Long term
(10 years later)
Risk
(i) Risk of strengthened regulations on the sale of alcoholic beverages (including increase of liquor tax), advertising, and promotion in the countries and regions of
business operations
· Raising awareness of responsible drinking among consumers in countries where the Group operates its business
Profit or loss effects
· Expenses related to activities to raise awareness of
responsible drinking
377
Approx. 380
Approx. 380
Approx. 380
Financial position effects
· Not applicable
-
-
-
-
Total
Profit or loss effects
377
Approx. 380
Approx. 380
Approx. 380
Financial position effects
-
-
-
-
Cash flows effects*2
377
Approx. 380
Approx. 380
Approx. 380
*1: The Group defines the short-, medium-, and long-term time horizons over which sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects may arise as follows: the short term as one year after the end of the current fiscal year, the medium term as two to three years, and the long term as four to ten years. However, to enable an understanding of the trends in quantitative information, the Group presents figures for a single fiscal year occurring one year later for the short term, three years later for the medium term, and ten years later for the long term.
*2: As it is difficult to accurately calculate cash flows effects, the total amount of profit or loss effects and financial position effects is presented.
Expected changes in financial position over the short, medium and long termNo investments or disposals are planned, and no financing is planned to fund the execution of the strategy. The Group does not expect that the risks described above will result in any material adjustments to the carrying amounts of assets and liabilities reported in the related financial statements during the next annual reporting period.
Strategy-Resilience
Based on the time horizon over which sustainability-related risks that could reasonably be expected to affect the Group's prospects regarding the adverse effect of alcohol consumption are expected to occur, the Group evaluates its resilience on this issue over the medium term. While the Group raises awareness of responsible drinking among consumers in the countries where the Group operates its business and contributes to the eradication of harmful use of alcohol as a member of the industry, the Group believes that even if regulations are further strengthened, it will be possible to further capture demand for low- and non-alcoholic products and create new product categories by leveraging the product development capabilities and existing logistics and sales networks cultivated to date.
As a result of the business model impact analysis described above, the executive officer in charge of CSV Strategy has evaluated that even if the adverse effect of alcohol consumption were to occur beyond the Group's expectations over the medium term, the Group has the capacity to respond to the manifestation of such uncertainties and there is no need to change its current business model for the alcoholic beverages business.
Metrics and targets
As response measures differ across the countries and regions where the alcoholic beverages business operates, metrics are established for each individual business company rather than on a group-wide basis.
Risks and opportunities
Metrics
Source
Unit
Targets
Results
(Target year)
Interim targets
Risk
(i) Risk of strengthened regulations on the sale of alcoholic beverages (including liquor tax), advertising, and promotion in the countries and regions of business operations
(Kirin Brewery)
Number of people reached through participation in or views of responsible drinking awareness-raising programs
Proprietary metric*1
Persons
20,000
thousand persons (2027)
Note: cumulative
total from 2025
-
14,220
thousand persons
(Mercian)
Number of people reached through participation in or views of responsible drinking
awareness-raising programs
Proprietary metric*2
Persons
8,550 persons
(2027)
Note: cumulative total from 2025
-
5,098 persons
(Lion)
Number of people reached through engagement in the "Alcohol & Me" (responsible drinking awareness-raising)
program
Proprietary metric*3
Persons
Improvement compared with 2026
(2027)
-
124,671
persons
*1: It is an absolute measure and has not been validated by a third party.
(Definition) Number of participants in or viewers of activities to raise awareness of responsible drinking (in-person or online) planned and executed by Kirin Brewery
(Calculation method) Number of participants in seminars to raise awareness of responsible drinking + number of viewers of videos to raise awareness of responsible drinking + number of engagements with social media posts intended to raise awareness of responsible drinking
*2: It is an absolute measure and has not been validated by a third party.
(Definition) Number of participants in activities to raise awareness of responsible drinking planned and executed by Mercian
(Calculation method) Number of people who received explanations on raising awareness of responsible drinking at Château Mercian wineries + number of people who received explanations at Mercian events
*3: It is an absolute measure and has not been validated by a third party.
Progress against the target value for this metric is managed to achieve year-on-year improvement from 2025 to 2027.
(Definition) Number of people reached through participation in or views of "Alcohol & Me" (responsible drinking awareness-raising program, in-person or online) planned and executed by Lion
(Calculation method) Number of participants in in-person programs + number of users who viewed online programs
Analysis of trends or changes in the entity's performanceInitiatives at each alcoholic beverage business company are progressing steadily toward achieving the targets for reducing the adverse effects of alcohol consumption.
Healthy longevity society
The Group recognizes the aging society with a declining birthrate and increasing health needs in Japan, other countries of operation, and other regions as sustainability-related opportunities that could reasonably be expected to affect the Group's prospects. The Group aims to expand and create markets by leveraging its strengths, such as fermentation and biotechnology cultivated in its founding alcoholic beverages business, long-standing immune research, and the advantage of having the non-alcoholic beverages and pharmaceuticals businesses within the Group.
Governance
To promote responses to health issues, the Group holds the Health Science Executive Committee twice or more a month. Chaired by the executive officer in charge of Health Science Strategy, participants include the Company's relevant officers and department heads, as well as presidents, vice presidents, or general managers of corporate planning from Group business companies. Matters discussed at the Health Science Executive Committee are reported if necessary at the Group Executive Committee or at the Board of Directors. Items reported to the Group Executive committee are reviewed and deliberated by that body and, where necessary, subsequently reported to the Board of Directors and reflected in the Group's overall strategy. At the same time, the Board of Directors oversees the progress of the Group's Health Science business plan.
Risk management
Where the Group Information Disclosure Committee determines that a review of risks and opportunities is required, the Health Science Executive Committee discusses revisions to risks and opportunities in light of changes in the internal and external environment. Regarding response strategies for sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects, progress is monitored on a quarterly basis at the Group Executive Committee or Health Science Executive Committee. The Board of Directors oversees the effectiveness of risk management through deliberations and reports on significant risks escalated from the Group Executive Committee or the Health Science Executive Committee.
Strategy
The Group has established "Health and Well-Being" as one of its CSV Purposes and aims to "Raise the number of healthy people, lower the number of sick people, and contribute to the people who are involved in healthcare." While interest in health has been increasing due to recent social trends, the specific issues faced by individuals vary depending on their life stages and characteristics. The Group contributes to addressing these issues by designing concepts based on the exploration of consumer needs through research marketing, and by deploying a wide range of products that combine ingredients and technologies from both inside and outside the Group. Based on the results of the analysis of impacts on the business model, the Group has recognized the importance of exploring and developing high value-added ingredients through basic research, identifying latent health needs of consumers, and establishing new business models, and is advancing these efforts.
Kirin Beverage, in the non-alcoholic beverages business, is executing a growth strategy with the Health Science domain as a driver. Through the acquisition of Blackmores in 2023 and the consolidation of FANCL in 2024, as well as the business structural reform of Kyowa Hakko Bio Co., Ltd., the Group has established the governance and management foundation to promote its strategy globally. Furthermore, through human resource exchange with Kyowa Kirin, and through Cowellnex Corporation established in 2024 as a joint venture with Kyowa Kirin, expertise such as disease understanding in the Pharmaceuticals Domain, research expertise, and academia networks are already being leveraged. Through these initiatives, the Group strives to proceed with efforts using Kirin's unique approach focusing on "Building Natural Health as a Foundation" and "individual health issues." The Group aims to address globally increasing health issues and become one of the largest Health Science companies in the Asia-Pacific region.
In the current fiscal year, the Group has been promoting these initiatives in accordance with the plan envisioned at the end of the previous fiscal year.
The sustainability-related risks and opportunities identified for this theme that could reasonably be expected to affect the Group's prospects are as follows.
Risks and opportunities
Value chain (Stakeholders of the Group)
Effects on the business model/value chain and financial effects that occur when risks and opportunities materialize
Likelihood
Financial materiality
Segments affected by risks and opportunities
Time horizons over which the effects of risks and opportunities are
expected to occur
Upstream
The Group
Downstream
Opportunity
Increasing interest in building natural health as a foundation consisting of nutrition, exercise, rest, and immune care, as well as physical condition management and skin issues, driven by factors such as climate change and future uncertainty
Consumers
Effects on the business model/value chain
Financial effects
services
High
Large
Health Science Non-alcoholic beverages
Short, medium and long term
Exploration of potential health needs and deployment of a wide range of products
Increase in sales and new products and services and improved profitability of immune-related products and services
Increase in sales and improved profitability of basic skincare, supplements related to skin health, and inner and outer approach products and services (new)
Increase in sales and improved profitability of VDS (supplements), health-oriented beverages, foods, and high-performance ingredients deployed by Group companies
Increase in investment in the development of new products and
The Group plans to expand customer benefits to enter the global immune market.
Specifically, by exploring high-value-added ingredients and developing functions, the Group strives to increase the range of health issues it can solve, leading to enhanced customer benefits. Furthermore, the Group will strengthen awareness activities for immune care. Through these activities, the Group aims to increase recognition of the benefits that immune care provides for physical condition management and create touchpoints between the Group's products and potential customers. In fact, following the expansion of the Group's sales area into Vietnam, improved literacy regarding immunity in the country has led to an increase in sales volumes of LC-Plasma containing products.*The Group intends to continue participating actively in government initiatives and other efforts to expand recognition of LC-Plasma and improve health consciousness in Vietnam. In addition, the Group is accelerating the B2B business of LC-Plasma in overseas markets through strategic partnerships with leading global companies in microbial fermentation ingredients. Through expansion into global markets, the Group strives to gain insight into the health issues of overseas consumers and continue research and development of products and services to solve them. The Group plans the global expansion of LC-Plasma into at least one country annually. In the current fiscal year, there were no cases in which trade-offs between other sustainability-related risks and opportunities were considered.
*Lactococcus lactis strain Plasma (LC-Plasma) is a lactic acid bacterium that supports the maintenance of immune function in healthy individuals. Research has reported that it acts on pDC, which serves as the commander of the human immune system. Kirin, Koiwai Dairy Products, and Kyowa Hakko Bio have jointly conducted research, and in cooperation with universities and research institutions both in Japan and overseas, have published numerous scientific papers and conference presentations. The Group offers LC-Plasma-containing products in various categories, including beverages, supplements, and yogurt.
The Group will strengthen initiatives aimed at the growth of its cosmetics business both in Japan and overseas.
Skin health is a health-related issue of strong interest to many consumers, and as the Group operates a cosmetics business, including skincare products, it is committed to resolving this issue. The Group will capture opportunities by integrating the expertise of Group companies to meet diverse consumer interests. As one example, a cross-functional Group project addressing "appearance care for cancer patients" was launched in 2022. This project aims to create an environment in which individuals can continue to fulfill social lives in their own way even when their appearance changes due to cancer or its treatment, supported by the medical expertise of Kyowa Kirin in providing information to healthcare professionals and patients. Going forward, the Group will focus on developing new products that approach beauty and skin health from the inside and outside the body by leveraging synergies among Group companies including FANCL and Blackmores. In the current fiscal year, there were no cases in which trade-offs between other sustainability-related risks and opportunities were considered.
The Group will strengthen initiatives to expand its social impact across all operating companies.
Because of rapid environmental changes and current social conditions, an increasing number of people desire to remain healthy for longer. The Group believes that "immune care" as a daily health habit, as well as nutrition, exercise, and rest, contribute to building natural health as a foundation. Accordingly, the Group is strengthening initiatives to expand the social impact of its supplements, health-oriented beverages and foods, and high-performance ingredients. For example, through the "Genki na Meneki Project," a public-private partnership project communicating the importance of immune care, the Group engages in awareness activities with the support of various companies,
organizations, and local governments. The Group has also continuously conducted educational programs on immunity, striving to improve health consciousness within households, including parents. Furthermore, through Cowellnex Corporation, a joint venture company with Kyowa Kirin, the Group is strengthening collaboration with the Pharmaceuticals domain in areas such as R&D, venture investment, and business development, and is working to generate innovation that leads to solutions for social issues surrounding health.
Aiming for further functional expansion of Health Science products, the Group strives to increase opportunities to understand customer needs by increasing touchpoints with consumers through product shipments and awareness-raising activities. In the current fiscal year, there were no cases in which trade-offs between other sustainability-related risks and opportunities were considered.
The response strategies for sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects, and the financial effects arising from the responses to those risks and opportunities, are as follows.
The growing interest in building natural health as a foundation consisting of immune care, nutrition, exercise, and rest, as well as physical condition management and skin condition issues, is an opportunity with significant financial effects for the Group, which possesses strengths in long-standing immunology research and the skincare domain. Effects such as an increase in revenue and improvement of profitability for related products and services are expected over the medium to long term. Furthermore, opportunities to resolve health issues such as increased stress caused by climate change, urbanization, and modernization will lead to an increase in sales of supplements and foods with high functional claims offered by Group companies and an improvement in profitability. Meanwhile, an increase in research and development expenses for new products and services is expected to occur over the short, medium and long term.
In this fiscal year, revenue from the Health Science business increased by ¥76,111 million compared to the previous fiscal year (including the increase in revenue associated with making FANCL a wholly owned subsidiary). While the Group considers that the materialization of opportunities may have been one of the contributing factors to this increase, quantitative information is not disclosed, as it is not possible to separately identify the impacts attributable to the materialization of such opportunities.
In addition, in the event that medium- to long-term opportunities materialize, quantitative information is not disclosed, as it is difficult to estimate the extent to which existing customers would be affected.
Risks and opportunities
Response strategy
for risks and opportunities
Financial effects of response strategy
Financial effects (¥ millions)*1
Current fiscal year
Short term (1 year later)
Medium term (3 years later)
Long term (10 years later)
Opportunity
Increasing interest in building natural health as a foundation consisting of nutrition, exercise, rest, and immune care, as well as physical condition management and skin issues, driven by factors such as climate change and future uncertainty
at each group company
Profit or loss effects
Plasma
7,000
Approx. 8,000
Approx. 8,000
Expected to increase from the medium-term level
Financial position effects
· Not applicable
-
-
-
-
Total
Profit or loss effects
7,000
Approx. 8,000
Approx. 8,000
Total amount of profit or loss effects
above
Financial position effects
-
-
-
-
Cash flows effects*2
7,000
Approx. 8,000
Approx. 8,000
Total amount of profit or loss effects
above
Expanding customer benefits to enter overseas immunity markets
Strengthening initiatives for the growth of the cosmetics business in Japan and overseas (including leveraging synergies between FANCL and Blackmores), and creating new value through approaches to beauty and skin health from the inside and outside the body
Strengthening initiatives to expand social impact
Expenses associated with the promotion of research and development
Marketing expenses for LC-
*1: The Group defines the short-, medium-, and long-term time horizons over which sustainability-related risks and opportunities that could reasonably be expected to affect the Group's prospects may arise as follows: the short term as one year after the end of the current fiscal year, the medium term as two to three years, and the long term as four to ten years. However, to enable an understanding of the trends in quantitative information, the Group presents figures for a single fiscal year occurring one year later for the short term, three years later for the medium term, and ten years later for the long term.
*2: As it is difficult to accurately calculate cash flows effects, the total amount of profit or loss effects and financial position effects is presented.
Expected changes in financial position over the short, medium and long termThe Group is considering investments for the development of new products and services and is currently formulating an investment plan for this purpose. As such investments can be funded through internal resources, no financing is planned to execute the strategy. The Group does not expect that the opportunities described above will result in material adjustments to the carrying amounts of assets and liabilities reported in the related financial statements during the next annual reporting period.
Metrics and targets
Risks and opportunities
Metrics
Source
Unit
Targets
Results
(Target year)
Interim targets
Opportunity
Increasing interest in building natural health as a foundation consisting of nutrition, exercise, rest, and immune care, as well as physical condition management and skin issues, driven by factors such as climate change and future
uncertainty
Social impact of the Kirin Group's Health Science products: (Annual number of people consuming the products, calculated based on shipment volumes) + (Number of people reached through awareness
activities)
Proprietary metric*1
Persons
135 million persons (2027)
-
127,781,023
persons
Contribution to the expansion of the immunity market: Of the above, those related to LC-Plasma
Proprietary metric*2
Persons
3.05 million persons (2027)
-
3,492,902
persons
*1: It is an absolute measure and has not been validated by a third party.
(Definition) (Annual number of people consuming the products, calculated based on shipment volumes) + (Number of people reached through awareness activities)
Since operating companies select the targets of their awareness activities according to their respective products, business models, and target customers, the definitions vary by company.
(Calculation method) The annual number of people consuming the products is calculated as: annual sales volume / annual recommended intake.
The calculation methods for major group companies are as follows:
Koiwai Dairy Products: (Annual number of people consuming milk, processed milk, fermented milk, and household cheese) + (Number of participants in seminars and study sessions)
Kyowa Hakko Bio: (Annual number of people consuming citicoline for health foods) + (Number of visitors to exhibitions, etc.)
*2: It is an absolute measure and has not been validated by a third party.
(Definition) (Annual number of people consuming the products related to LC-Plasma, calculated based on shipment volumes) + (Number of people reached through awareness activities regarding products related to LC-Plasma)
(Calculation method) Same as above
Analysis of trends or changes in the entity's performanceInitiatives aimed at creating the opportunities described above are progressing as planned.
Unmet medical needs
In the Kirin Group, which positions health as a sustainability-related issue, Kyowa Kirin, which is responsible for the Pharmaceuticals business, emphasizes patient-centered medical needs. In particular, the Kirin Group identifies contributing to the resolution of health issues by providing Life-changing value to people facing illness with high unmet medical needs (including rare diseases) as a sustainability-related opportunity that could reasonably be expected to affect the Kirin Group's prospects.
Governance
Kyowa Kirin sees materiality as key management issues to realize the Vision. With regard to materiality (key management issues), from a perspective of impact on social sustainability as well as on the Group's businesses, Kyowa Kirin has identified materiality. In this process, we referred to SASB (Sustainability Accounting Standards Board), Access to Medicine Index, PSCI, etc.
Materiality has been promoted by being incorporated into the FY2021-2025 Medium Term Business Plan and the linked annual business plan. From FY2026 onward, Kyowa Kirin will align with "Vision 2030 and Beyond: Our Growth Story" and promote it by incorporating it into Kyowa Kirin`s annual business plan. In addition, the progress of the plans is monitored and reported to the Executive Committee and the Board of Directors on a quarterly basis. To promote the solution of medium- to long-term management issues, business indicators from FY2024 will include non-financial targets formulated in the fiscal year business plan, including targets related to materiality.
Kyowa Kirin reviews the materiality every year based on changes in environments within and outside the Company, which is approved by the Executive Committee and the Board of Directors.
Following discussions at Kyowa Kirin, progress is reported quarterly to the Group Executive Committee for flat discussion. Furthermore, a summary of these reports covering the entire Group, including Kyowa Kirin, is reported to the Board of Directors of Kirin Holdings. The Board of Directors of Kirin Holdings oversees the response policies and execution plans for the issues.
Risk management
Risk management (RM) system and process for identifying principal risks
The Kyowa Kirin Group defines risk as uncertainty that may affect the achievement of management and strategic targets. It encompasses both threats (negative impacts) that could damage corporate value during business operations and opportunities (positive impacts) that, when appropriately addressed, can lead to the creation and growth of corporate value. Under the framework of Enterprise Risk Management (ERM), the Group positions risk not merely as something to be avoided, but as a key management issue that should be leveraged to maximize opportunities and create and preserve corporate value.
-