Meiji : IR Day Presentation

IR Day (Business Strategy Conference)

The 2026 Medium-term Business Plan

June 11, 2024

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AGENDA

1. Growth Strategy of Food Segment

Katsunari Matsuda

COO (Food Segment), Member of the Board and Executive Officer

2. The Fusion of Sustainability and Business

Jun Furuta

CSO, Member of the Board and Senior Executive Officer

3. Growth Strategy of Pharmaceutical Segment

Daikichiro Kobayashi

COO (Pharmaceutical Segment), Member of the Board and Executive Officer

1 © Meiji Holdings Co., Ltd. All rights reserved.

1. Growth Strategy of Food Segment

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Efforts to Improve ROIC

Operating Profit Margin Improvement

		ROIC by business*1	FY2023		FY2026
Company-wide	Hurdle rate		(E)		Target
WACC	for food segment	15%
5%	6%	10%

	FY2023 operating profit	64.3
		Domestic profitability	Approx.
		+9.0
		improvement
		Domestic fixed cost	+9.5
		reduction
FY2026 Target
Investment in areas to be	-	5.5
9％ or more		strengthened
	Overseas growth	+6.0
ROIC ＝
FY2026 operating profit	83.0
6.3％		Invested Capital Control
	 Reduction of assets, focusing on
FY2023 Result		optimization of production system

and reduction of fixed costs

 Aggressive investment in growth areas with reduced resources

→Invested capital will increase compared to

FY2023, but the amount of increase will be controlled.

Dairy

Chocolate

Nutrition

Food solutions

• Enhance proposals for value-added products
• Establish optimal production system
• Discontinue or restage low-profit products
• Rebuild China business
• Promote sustainable cocoa sourcing as new value on products
• Develop global brands
• Establish global production system
• Optimize production sites
• Cultivate new domestic markets (infant formula, femcare, etc.)
• Evolute marketing methods
• Expand areas to overseas
• Grow B2B business through new cacao ingredients and value- added dairy products
• Strengthen global expansion
• Reform low-profit businesses

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*1: ROIC by business is a simplified calculation (NOPLAT + Share of profit and loss of entities accounted for using equity method / Invested capital in a single year)

Accelerate to Grow Overseas Business

		2026 Medium-term Business Plan
(JPY bn)
FY2023	FY2024	FY2026
	Result	Plan	Target	vs. FY2023
				+147.2%

• Overseas Business Promotion Structure from April 2023

		Net sales	24.3	31.0	60.3	+35.9
	China
-3.7	-5.6	0.3	―
		Op. Profit
		+4.0
		Net sales	18.1	27.0	65.2	+259.5%
		+47.0
	Asia				+134.8%
		Op. Profit	1.5	1.4	3.6
		+2.0
		Net sales	32.7	34.4	44.8	+36.6%
		+12.0
	Europe and
	Americas	2.3	1.6	2.2	-7.4%
		Op. Profit
		-0.1
		Net sales	77.7	88.3	170.0	+118.7%
	Overseas	+92.2
	total	Op. Profit	-2.4	-5.3	3.2	―
		+5.6
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Global Dairy Business Division

Global Cocoa Business Division

Global Nutrition Business Division

Global Food

Solution Business

Division

Global planning, developing, and marketing

Reorganize functions into each business division

Accelerate to Grow Overseas Business

Dairy and Food Solutions Businesses

	Focus area	China, Asia

• Review of sales areas to consider profitability
• Cost reduction and optimization of production structure
• Increase the composition ratio of value-added products and strengthen the B2B business

Launched in June 2024

Start operation in Jan. 2023Hokkaido Flavor Yogurt

Tianjin (Drinking milk and Yogurt)

Steady Execution of Revival Plan in China Business

 Review of business and product portfolio

 Launch products with unique value and

strengthen marketing

 Utilize the Guangzhou plant production line

to launch new products and export outside

of China

 Improve mainstay products, and plan to

develop and produce new products at the

Shanghai ice cream plant

 Sustainable growth for B to B business

Start operation in Mar. 2024 Shanghai (Ice cream)

Also able to product

room temperature

drinks

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In stores in June 2024

SAVAS milk

*Recorded as a result of

Nutrition Business

Start operation in Jan. 2024 Guangzhou

(Drinking milk, Yogurt

and Confectionery)

 Structural reforms

 Review areas and stores with lower

profitability

 Cost reductions across entire supply chain

 Organize production structure, including

optimization of production lines

Accelerate to Grow Overseas Business

Chocolate Business

	Focus area	The U.S., China, Asia

• Strengthen initiatives related to major retailers and agents
• Expand production capacity and establish a global production system
• Develop global brands

The U.S.

• Expand production capacity for further growth of Hello Panda, a core Meiji brand product
• Strengthen marketing to expand sales of the U.S. versions of Kinoko no Yama: Chocorooms
• Establish market presence for new Meltyblend products
• Improve added value for Stauffer brand products

China

• Expand sales with a focus on highly profitable mainstay chocolate bar products and reassess unprofitable products
• Guangzhou plant production line launched operations in January 2024
  →Plan to produce Hello Panda and other new products

→Increase in depreciation in FY2024, but to achieve significant growth from FY2025 and beyond, including the benefits of new products and area expansion

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Accelerate to Grow Overseas Business

Nutrition Business

	Focus area	Asia, Europe

• Accelerate the development of products aligned with local needs
• Expand to more countries

Infant Formula

 Expand to more countries/regions as products that are competitive in terms of technology and intellectual property

 Strengthen sales of Meiji products in countries/regions

where we already have a presence and strengthen alliances with partner companies

 Increase product added value	6
Countries where Danone branded
tablet infant formula are sold:

(the UK, France, Italy, Estonia, Lithuania, and Latvia)

Liquid Diet for Consumer

• Launch in Asia as products that utilize the nutrition engineering technology cultivated through infant formula
  →Currently sold in Taiwan and Vietnam
• Develop original flavors suited to the needs of each market

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2. The Fusion of Sustainability and Business

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Evolve the Meiji ROESG® Management

Return to a growth trajectory by transforming focus markets, business structure, and our behavior

Key strategies

1. Invest management resources into growth businesses

• Strengthen and expand overseas and B2B businesses of food segment, and pharmaceutical business as growth drivers

2. Keep and improve stable cash flow

• Enhance competitive advantage by pursuing added value
• Review business portfolio and improve capital efficiency

Fusion of sustainability and business strategies ("Trade-on")

3. Promote human capital strategy linked to management strategy

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