Kirin Group Human Resources Strategy

Kirin Holdings Human Resources Strategy

Kirin Holdings Company, Limited

December 2020 Details of the speaker Toshiya Miyoshi Kirin Holdings Company, Limited Director of the Board and Senior Executive Officer responsible for the human resources and general affairs strategy Profile Born in 1958 April 1982 Joined the Company March 2008 Representative Director and President & CEO of Yokohama Akarenga Inc. March 2010 General Manager of Personnel & General Affairs Dept. of the Company Executive Officer and General Manager of Personnel & General Affairs Dept. of the March 2012 Company Executive Officer and Director of Group Personnel & General Affairs of the Company January 2013 Executive Officer and General Manager of Personnel Dept. of KIRIN Company, Limited Senior Executive Officer and Director of Group Personnel & General Affairs of the Company March 2014 Senior Executive Officer and General Manager of Personnel Dept. of KIRIN Company, Limited Director of the Board, Senior Executive Officer of the Company (Present Position) March 2015 Senior Executive Officer of KIRIN Company, Limited Director of San Miguel Brewery Inc. (Present Position)

March 2019 Director of Kirin Brewery Company, Limited (Present Position) © Kirin Holdings Company, Limited 2 Kirin Holdings Human Resources Strategy Role of the group head office in the human resources strategy

Values shared by all group Corporate philosophy / One KIRIN Values employees

In addition to supporting the human resources strategy of each Role of company, maximize employee engagement through the establishment Kirin Holdings of philosophy and values shared by all employees around the world

Kirin Kirin Myanmar Human LION Other Mercian Brewery resources Beverage Brewery strategy of each business Human resources strategy based on the individual strategies of each company

■Overall trend of society E= Environment • In light of the response to COVID-19, the corporate Global warming response to S= Society is becoming more important Water resources • Including work styles, the human resources strategy is Biodiversity being called into question • The Ito Review of Human Resources published in September 2020 also states the issues faced by Japanese companies and the responses that should be taken

⇒Human resources strategy is essential for realizing the management strategy, and grasping this point is important for understanding the feasibility of the management strategy ■Kirin S= Social G= Governance Composition of the Board • Recognize that human capital is important for realizing Human capital of Directors the management strategy Promote diversity Fair competition • In order to realize KV2027, a human resources strategy for further growing the food & beverage, pharmaceuticals and health science domains is essential • In particular, establishing the health science business is Importance has been recognized as an issue, and by explaining how Kirin will recognized again address this issue, indicate the feasibility of KV2027

Basic philosophy of human resources ＝ Respect humanity Respect the efforts and individuality (humanity) of each and every employee who continues to achieve personal growth and development based on unlimited potential, and actively create a place where employees can make the most of their abilities

Employees Employees and Company the company are: Pledge by employees Pledge by the company “Equal partners“ (Commitment) (Commitment) To be Respect and support the “autonomous individuals” “autonomous individuals” ■ Autonomous career ■ Train professionals formation Equal ■ Independent job design relationship ■ Clarify the individual ■ Autonomous as a through work mission ■ Fair rewards member of society

The management strategy and human resources strategy are mutually interrelated. Human resources create value, and the organizational capability realized through a collection of individuals is linked to the management strategy. Conversely, the human resources strategy is created as an offshoot of the management strategy.

Management strategy

Human resources Human resources capabilities within strategy for the organization realizing the create the management management strategy strategy

Human resources strategy

Human resources cannot be fostered overnight, so it is necessary to establish a human resources strategy from a long-term perspective. The Kirin Group has worked to foster human resources who will support our core fermentation and biotechnology and has achieved innovation and growth over the years.

1885 1907 1982 1990 2008 2018

Founding of Establishment Established the R&D Launch Espo® Establishment of Launch Crysvita Japan Brewery of Kirin Division Kyowa Hakko Kirin In partnership with the Brewery Combine gene recombination Established through a merger Revolutionary treatment Brew real German style US Amgen, launched Company Co., and fermentation technology, between Kyowa Hakko Kogyo for pediatric XLH. beer, and meet the need the first pharmaceutical and enter the and Kirin Pharma. Welcomed Launched in Europe in for beer among foreigners Ltd. to treat renal anemia, pharmaceuticals business the human capital necessary April 2018 and in Japan residing in Japan which had been an for developing the in December 2019. unmet medical need Report proposing entry pharmaceutical business that was lacking within Kirin. into the pharmaceuticals business (1981) Also included a human resources strategy for achieving this Brewery of Japan Brewery Original image of Espo®

Fermentation and biotechnology

• Even prior to expanding into pharmaceuticals, Kirin had several employees with a PhD or a background in agricultural sciences, but since expanding into pharmaceuticals, the company now has a total of 161 employees with a PhD in the group (as of April 1, 2020). • Kirin’s main research laboratory is known as one of the top workplaces in Japan for graduates with a science background, and there are many excellent technical experts working there.

To expand into pharmaceuticals, conduct the 1st business portfolio revision centered on fermentation and biotechnology. Achieve new innovation through human resources who support fermentation and biotechnology, conduct the 2nd business portfolio revision, and aim for 2027

1980s 1st business 2019 2nd business

portfolio revision portfolio revision

Ambidextrous management Food & Food & beverages domain Deepen beverages Deepen domain Pharmaceutical domain Innovation for Innovation under expanding into pharmaceuticals KV2027

Pharmaceutical Health science Explore Explore domain domain

Human resources and capabilities that support fermentation and biotechnology © Kirin Holdings Company, Limited 9 Organizational capabilities necessary to achieve further innovation

Human resources necessary for realizing KV2027. Foster the personnel who are currently lacking or bring them in from outside the group. “Diversities for talent” and “Cultures of Challenge” are fundamentally related to all of these capabilities and this and will be accelerated.

Uniform organization Organization with diversity

Innovation

Culture of stability Cultures for Innovation

Why are “Diversities and Inclusion” and “Cultures for Innovation” needed? • Diverse human resources means having diversity in terms of gender, age, affiliation, perspective, talents and experience, and through these, trigger a chemical reaction that leads to increased organizational capabilities. • Diverse human resources are needed as a foundation for a “cultures for innovation” that makes it easier for individuals to utilize their talents. • Within this environment, ideas that differ from those in a uniform group are generated, and these lead to innovation. © Kirin Holdings Company, Limited 11 Transformation of marketing potential through a human resources strategy that does not rely on individual employees making hit products

Clarify the corporate philosophy, reason for existing and management strategy Change in volumes compared数量前年比推移（ to the% ） Situation at the time ➡ Formulate a human resources previous year (％） • Long-term “losing strategy that is linked to the battle” management strategy • Nonexistent strategy 100 To date, in marketing there were • Negative spiral focused only on the people capable of making hit immediate future products, but it was not possible to Negative spiral era • Decisions made create a winning organization 90 based on company preferences Break free from Market市場キリンビールKirin Brewery Needed a fundamental “product × certain individuals” transformation ▼ First time in Kirin Group history for Reflection and the general manager of the determination Marketing Division to be hired from outside the group © Kirin Holdings Company, Limited 12 Empowering women in the workplace Rolling out “practical experience through work” × “training programs”. Empowering women in the workplace has led to various innovations. Château Mercian’s Mariko Winery SPRING VALLEY BREWERY The enthusiasm of a female employee in her 5th year with Driven by female employees from the the company (at that time) led to a craft beer strategy that proposal during management school to the moved Kirin as a whole start of construction and opening in 2019

Along with establishing the Spring Valley Brewery Selected as the Best Vineyard in Asia and brand, opened SVB Tokyo No. 30 in the world in the World’s Best in Daikanyama in 2015, Vineyards 2020 selection of top wineries in and the location has come to represent the brand the world conducting wine tourism

Kirin Women’s College ～Training program for the next generation of leaders～ Implement initiatives that help female employees overcome the unique mindsets and issues faced by women and increase awareness of aiming to advance into managerial positions. Focus on promoting the advancement of women who will drive the businesses of the group. © Kirin Holdings Company, Limited 13 Kirin Academia

Voluntary activity established by 4 young employees that became a spontaneous initiative leading to the transformation of the organizational culture. From 2019, the internal university “Kirin Academia”opened as an unofficial voluntary activity under the vision of “Create a challenge oriented corporate culture at Kirin”. Conducted various activities such as inviting guests from inside and outside the company to give talks, holding workshops on establishing new businesses and providing mentoring to new hires.

Steadily growing larger with presently 14 core members and about 480 people who have participated in the online events.

Initiatives are centered on Diversities and inclusion, Cultures for innovation, and it has let to a transformation into a culture of independent learning.

Also, the passionate core members have involved a large number of people from both inside and outside the group and created a community of diverse people of all ages. In addition, new challenges have remained ongoing at both high frequency and quality. This is a representative initiative that embodies the Kirin Group’s vision. Given this, Kirin Academia received the highest group award, the 2019 KIRIN Group Award. © Kirin Holdings Company, Limited 14 Hataraki-Gai reforms following the COVID-19 pandemic

Based on the “meaning/ objective of the work”, through “ongoing reforms to the Hataraki-Gai reforms: work” x “independent work styles”, enable each and every employee to feel “satisfaction at work” and thereby realize “higher productivity” x “increased creativity” KIRIN Work Style 3.0 x “personal enhancement” that will lead to “sustainable growth of the group”

 Following the COVID-19 pandemic, within the Hataraki-Gai reforms, shift from the “how” carried out to date to the “what/why” that involves confirming the meaning and objectives of the work.  Regularly revise the work from the 4 perspectives of “accelerate”, “transform”, “stop” and “downsize”, and enhance employee engagement and the feeling of satisfaction at work by increasing the motivation toward the work and feeling of achievement.

Enhance the systems/ Expand the programs New communication Select the workplace IT tools for the work styles styles

• Consider how to optimize the • Introduce a meeting minutes tool • Eliminate the limits on working • In order to enable each and existing offices with automated audio from home every employee to work with transcription function independence and feel • For work that can be conducted • Relax the requirements for taking satisfaction at work, set targets, from home, make home the first • To strengthen the PC childcare and nursing care leave choice environment, expand the execute, reflect and change the • Permit second jobs based on the maximum remote access allowed way communication is conducted • Shift to paperless by reducing premise of expanding knowledge within the team document retention and revising and realizing innovation that can the processes such as seals be used within Kirin • Utilize real places to purposely create opportunities for • Introduce shared offices • Enhance support for attending communication aimed at creating nationwide seminars trusting relationships with • Conduct internal meetings and workplace colleagues, forming a training remotely sense of solidarity and co- © Kirin Holdings Company, Limited creating value 15 Engagement survey and gender diversity at Lion

With reference to the programs at Lion, initiatives have been implemented to increase engagement among employees in Japan. Lion’s Gender Diversity is ahead not just within the Kirin Group but also in the world.

■Engagement survey ■Gender Diversity • Since the 1990s, Lion has conducted engagement surveys of all employees twice a • Lion is one of the most advanced examples of year gender diversity within the Kirin Group • By measuring employee engagement, aim to • Aiming to achieve gender equality at all levels by understand what increases motivation and what 2026 hinders performance • Gender diversity is currently 40.1%, and 52% of • In order to increase engagement, implementing newly hired employees are women. Steady initiatives such as strengthening leadership progress is being made in achieving gender diversity • Awarded the Employers of Choice for Gender Equality by the Workplace Gender Equality Agency for 3 years in a row Female %

• At the Kirin Group in Japan, based on an 45.0% awareness of the importance of employee 40.2% 40.1% 38.6% 38.3% 38.5% engagement, a similar engagement survey was 40.0%36.5% introduced in 2013 35.0% • The parent company adopting an initiative of a subsidiary is also a form of diversity 30.0%

From the 2019 MTBP, set the results of the employee engagement survey as an important non-financial target. Expand the previously limited scope from the group companies in Japan to 44 companies around the world. Use as an important indicator for judging the establishment of the corporate philosophy and the shared “One Kirin Values”.

Since introducing the employee From the 2019 MTBP, expand the engagement engagement survey from Lion in survey to include overseas group companies, and 2013, scores have steadily risen set as an important non-financial KPI

Kirin Holdings, Kirin Brewery Group, Kirin Previous Beverage Group, Mercian Group, Kyowa scope Hakko Bio Group, etc. + Lion, Myanmar Brewery, Mandalay Expanded Brewery, Coca-Cola Northeast, Kirin scope as a Brewery (Zhuhai), Kyowa Kirin Group,

*numbers are those of the Previous Scope companies new KPI Koiwai Dairy Products, etc.

Empowering women in the workplace is a high priority issue in terms of promoting diversity in Japan. Aim to increase the ratio of female leaders and promote women to decision making positions without relying on external hiring. For career track hiring, no specific figure is set, but work to actively utilize them in specialized fields.

Realize Cultures of Challenge

Promote diversity

Ratio of female Promote women who have Career track hiring formed careers at Kirin to leaders by 2030: decision making positions among total hiring (Organizational manager 30% or higher) 30%（Target）

2017: 6.1% 2017: 9 people 2017: 15.6% 2018: 7.6% 2018: 10 people 2018: 20.9% 2019: 8.4% 2019: 11 people 2019: 25.7% 2020: 9.7% (As of April 1) 2020: 11 people (As of April 1) 2020: 42.1%（Expected as of November 30)

Based on 2027 as one milestone, work to realize intermittent growth

Human resources strategy is the foundation for the value creation model