Corporate Guide 2018 Corporate Guide 2018

CORPORATE GUIDE HOUSE FOODS GROUP INC. 2018 010_9038497223008.indd 2 2018/09/12 9:33:25 Group Philosophy Through food, we aim to be a good corporate citizen, connecting and collaborating with people to create smiles in their lives. Status of inclusion on SRI indices (as of June 30, 2018) The MSCI Japan ESG Select Leaders Index is The SNAM Sustainable Investment, launched by Morningstar Socially Responsible Investment designed to represent the performance of com- Sompo Japan Nipponkoa Asset Management Index is the first domestic index based on social panies that have high ESG (Environmental, Co., Ltd. (“SNAM”) in August 2012, is a respon- responsible investment. This index is calculated Social and Governance) performance which are sible investment product for pension funds and thorough the indexation of the share prices of selected from the constituent stocks of the institutional investors that invests broadly in 150 companies selected from among nearly MSCI Japan IMI Top 500 Index. The Company companies with high ESG (Environmental, 4,000 listed companies in Japan by Morningstar has been granted an “A” ESG rating by MSCI Social and Governance) ratings. Stocks are Japan K.K. because of their higher level of INC. chosen with emphasis on ESG evaluation by sociability. research companies, and allocation is deter- THE INCLUSION OF House Foods Group Inc. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX mined based on a proprietary active index, the NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT SNAM Sustainability Index. OR PROMOTION OF House Foods Group Inc. BY MSCI OR ANY OF ITS House Foods Group Inc. has been selected AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF for inclusion in the Index for seven consecutive MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE years since the Index began operating in August TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES. 2012. 1 CORPORATE GUIDE 2018 CORPORATE GUIDE 2018 010_9038497223008.indd 1 2018/09/21 19:47:33 Group Philosophy Group CORPORATE GUIDE 2018 Contents Group Philosophy 1 About House Foods Group 3 Top Message 9 Overview by Business Segment 17 Corporate Governance 22 Group CSR 33 11 Years’ Selected Financial Data 35 Consolidated Financial Statements 37 House Foods Group Companies 41 Corporate Information 44 CORPORATE GUIDE 2018 CORPORATE GUIDE 2018 2 010_9038497223008.indd 2 2018/09/12 9:33:26 About House Foods Group Aiming to be a Good Corporate Citizen to Create Smiles in People’s Lives “In every happy home throughout Japan you will find the warm flavor of home cooking, House” To realize this wish, we have always worked to address the issues in each era. Let us present the history of House Foods Group along with our efforts to create smiles in people’s lives. (Millions of yen) 300,000 1970~ Expanded product lineup with the launch of retort pouched foods, etc. in response to diversified customer needs We launched Kukure Stew in 1 9 7 0 and Kukure Curry in 1971 and entered the retort pouched foods market to de- 1913~ velop products which are long lasting and save the trouble 200,000 From herbal medicine business to the of cooking. We also launched Shanmen soy sauce flavor in 1973, entering the packaged noodles market. Further- development of curry powder, leading to the more, we entered the snack foods market in 1977 and the launch of “House Curry” beverage market in 1983 with the respective launches of The predecessor of House Foods Group Inc. was Urakami Potato Chips and Rokko no Oishii Mizu. Shoten, an enterprise dealing in herbal medicines, which was founded in 1913 in Kawaraya-machi, Minami-ku, Osaka-city by Seisuke Urakami at the age of 21. It was in 1921 that Seisuke, who had mainly dealt in various 1980~ medical ingredients, undertook the bottling and sales of curry powder from his customer. Started overseas development to offer the delicious flavors cultivated in Japan to the world We started our overseas expansion with the establishment of a representative’s office in Los Angeles in the United 1960~ States in 1981. In 1983, we established House Foods & 100,000 Development of Yamauchi, Inc. (currently House Foods America Corpora- tion) to enter the tofu business in the United States. Tofu solid roux and the launch of Vermont Curry, has gradually received much attention as a healthy food a long-selling hit product and tofu products have achieved significant growth to Amid the spread of instant foods owing to economic date. growth, we launched a solid curry roux product in 1960. Additionally, by leveraging our technologies, we developed a mild tasting solid roux curry using apples and honey as ingredients with the concept of “curry that can be enjoyed together with children.” In 1963, we created Vermont Curry, which is our mainstay product and loved by people even today. 0 1913 1947 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2017 (Foundation) (Establishment) (Fiscal year) 3 CORPORATE GUIDE 2018 CORPORATE GUIDE 2018 010_9038497223008.indd 3 2018/09/12 9:33:27 2010~ About House Foods Group Transferred to a holding company structure to strengthen management systems and enhance the Group’s capabilities as a whole Entering into an era with increasing concern over significance (Millions of yen) and diversity of food, we are striving to strengthen our man- 300,000 2000~ agement systems in order to achieve further growth. In 2013, with the aim of creating corporate value for the Launched Ukon No Chikara with a good Group as a whole, we transferred to a holding company balance between taste and health to expand structure, with a new corporate name of “House Foods the Health Food Business Group Inc.” We welcomed the trading company Vox Trading Co., Since around 2000, when people had become more con- Ltd. to the Group in 2 0 1 3, the curry restaurant chain scious about their own health, progress has been made in Ichibanya Co., Ltd. in 2 0 1 5, specialized manufacturer research into the functional properties of spices. Ukon No of spices for commercial use Gaban Co., Ltd., in 2016, Chikara was developed and launched in 2004, based on and Malony Co., Ltd. in 2 0 1 7, significantly expanding the idea of making a functional health drink by using tur- our areas of development in the value chain. meric, which is essential for making curry. Despite con- taining 30mg of curcumin, an active ingredient of turmeric, the distinctive bitterness was moderated and a refreshing taste was achieved. Because of the convenient and easy way to take in active ingredients with an enjoyable taste, it became a huge hit, leading to the further acceleration of 200,000 efforts for the Health Food Business. 100,000 0 1913 1947 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2017 (Foundation) (Establishment) (Fiscal year) CORPORATE GUIDE 2018 CORPORATE GUIDE 2018 4 010_9038497223008.indd 4 2018/09/12 9:33:27 About House Foods Group Data to understand House Foods Group Net sales (Millions of yen) Operating profit (Millions of yen) Ratio of operating profit Spice/Seasoning/Processed Food Business 139,937 12,081 8.6% Health Food Business 31,599 907 2.9% International Food Business 22,855 2,847 12.5% Restaurant Business 51,974 -406 -0.8% Other Food Related Business 61,024 1,865 3.1% Adjustment -15,492 -1,008 — Total 291,897 16,288 5.6% Spice/Seasoning/Processed Food Business Health Food Business 45.5% 10.3% The Group is engaged in the business The Group is engaged in the busi- of manufacturing and selling spices, ness of manufacturing, selling and seasonings, processed foods and food direct marketing of health foods and service products in the domestic market. functional beverages in the domestic Through offering a wide range of Fiscal year ended products represented by curry roux prod- March 2018 market. With a vast product lineup possessing both functionality and ucts, stew roux products, retort pouched Proportion of Consolidated curry products and spice products, we tastiness, we support a healthy lifestyle contribute to enhancing the experience Net Sales through providing everyday diet. of family meals. Proportion before the elimination of inter-segment transactions Other Food Related Business Restaurant Business International Food Business 19.9% 16.9% 7.4% The Group is engaged in businesses The Group is engaged in the business The Group is engaged in the business such as transportation and warehous- of operating restaurants in the domestic of manufacturing and selling foods ing, manufacturing and selling of market and the overseas market. The overseas. We believe that we should prepared foods, analysis of foods, and Group provides Japanese-style curry capitalize on the technology developed imports and sales of foodstuffs. By to customers in countries throughout in Japan to provide new value in enhancing each function and pursuing the world through “CURRY HOUSE Coco foodstuffs, and offer the world of food inter-Group synergies, we are making ICHIBANYA,” a restaurant specializing in that the Group has developed. efforts to reinforce the overall capability curry operated by Ichibanya Co., Ltd. of the Group. 5 CORPORATE GUIDE 2018 CORPORATE GUIDE 2018 010_9038497223008.indd 5 2018/09/12 9:33:28 Fiscal year ended About House Foods Group Overseas March 2018 Japan Overseas net sales ratio* 11.9% 88.1% Other 0.3% East Asia The United States 4.9% 4.8% Japan 88.1% Southeast Asia 1.9% Fiscal year ended March 2018 Overseas Japan Percentage of 32.1% overseas employees* 67.9% persons 6,273persons persons 2,012

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