Minutes of ConferencePDF:153KBPDFファイルをダウンロードする

(Note) This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail.

[Q&A Session Minutes] Briefing for Investors and Analysts for Q3 FY2025

Date & Time: November 11, 2025(Tue), 18:30 p.m.（JST）

Speakers: Hiroaki Takaoka, Executive Officer & GM of Corporate Strategy Dept.

Hidefumi Matsuo, GM of Finance Dept.

[Question and Answer]

Q. Financial Times reported on the divestment of Four Roses. Do you have any comments? The divestment of Four Roses alone seems insufficient in terms of the scale of shareholder returns post-divestiture. If there are any updates regarding the divestment of other operating companies, please share them.

A. We are aware of the article regarding the divestment of Four Roses, but it was not based on any official announcement from us, and we have no comment to make at this time. While all of our current holdings are core businesses, we do prioritize among them, and we are internally considering the divestiture of businesses with lower strategic priority. Discussions on optimal portfolio construction are held multiple times annually at the Board of Directors, and these discussions will continue regardless of whether divestitures occur.

Q. If Four Roses were to be sold, it would mean divesting a currently profitable business. Kirin has stated it does not intend to become a shareholder-return-only-focused company, so why is the Company rushing to divest and return capital? Also, there was a recent overseas business presentation by Kirin Brewery-does this imply a strengthening of the alcoholic beverage business in APAC as well? Please clarify the overall thinking behind the business portfolio.

A. We are not rushing to restructure its business portfolio but is continuously evaluating optimization. While each operating company has its own strategic priority, even profitable businesses may be considered for divestiture based on future growth potential. Kirin

Brewery's overseas strategy is also part of the broader portfolio review. We will continue to prioritize and execute initiatives within the context of overall portfolio balance.

Q. When are you planning to announce the result of the business portfolio review?

A. Due to ongoing negotiations with counterparties, it is difficult to comment on timing. However, we aim to realize progress in the early part of next year.

Q. How do you view the market and business environment in Australia for Lion in Q3? Also, what are the expectations for the new management structure introduced in October??

A. In terms of sales volume for July to September:

In the off-premise channel, the market declined in the low single digits, and Lion also saw a low single-digit decline, but outperformed the market. In the on-premise channel, both the market and Lion recorded mid-single-digit growth. Overall, while the market declined in the low single digits, Lion posted a slight year-on-year decrease, again outperforming the

market.

Although signs of improvement were observed in Q2, the market environment has slightly shifted. Factors such as deteriohasng macroeconomic conditions, interest rates that declined in August but are not expected to fall further this year, persistent inflation, and a

high unemployment rate have led to weak consumer sentiment and continued instability. That said, we believe the environment is better than initially expected at the beginning of the year and will continue to closely monitor market trends. Australia enters its peak season in November and December, and this period will be key.

Under the new management structure:

New Belgium in North America is now managed directly under Kirin Holdings. Lion will focus on Australia and New Zealand, with headquarters functions integrated to enable faster business execution. The new CEO of Lion is a marketing-driven leader who has previously led the business and is expected to maintain momentum and drive future growth.

Q. Has the positioning of US craft business within the Group changed under the new structure?

A. Originally, Kirin choses Lion to lead the expansion of craft beer in North America, based on its deeper expertise and cultural proximity to the region compared to Japan. Over time, Japan has accumulated sufficient knowledge and developed talent, enabling the business to be operated directly without relying on Lion.

Q. Will the divestiture of businesses lead to updates in KPIs (e.g., FY2027 ROIC target of 9%, shareholder return indicators)? Also, the medium-term management plan targets high single-digit CAGR for profit growth-what is the outlook for next fiscal year's guidance?

A. We present its indicators on a three-year rolling basis, and continue to aim for high single-digit EPS growth. While ROIC is targeted at 10% over the long term, it is difficult to provide specific improvement range for the next fiscal year at this time, as they depend on portfolio changes. However, we expect several percentage points of profit growth on an organic basis next year and will work toward that goal. Although Normalized OP(NOP) has been trending above expectations through Q3, planned investments in Q4 may impact on the full-year results. While full-year NOP may slightly exceed the plan, bottom-line profit may face risks due to early retirement programs at Kyowa Kirin and structural reform costs. We intend to manage these risks appropriately.

Q. After the conclusion of the business portfolio review next year, will the targets for capital efficiency be updated?

A. If a transformation of the business portfolio occurs, we will clearly communicate its capital allocation policy update. Even after investments are made, Kirin will remain prepared to execute the next round of investments. This portfolio transformation is intended to drive growth, and our commitment to growth remains unchanged.

Q. Please provide an update on the Health Science Business, including the status of Blackmores and FANCL. Although temporary demand for amino acids at Kyowa Hakko Bio has made the current situation somewhat unclear, is it correct to understand that the Health Science Business is on track to achieve the FY2027 target of JPY 18-20 billion in NOP? Also, while Kyowa Hakko Bio's performance may fluctuate next year, please share your overall profit outlook for the Health Science Business, including such variability.

A. The Health Science Business is expected to be solidly profitable this year, supported by the accelerated divestiture of Kyowa Hakko Bio's amino acid business and the new consolidation of FANCL. Kyowa Hakko Bio is projected to realize a loss in Q4, but full-year NOP is expected to land at approximately minus JPY 3 billion, compared to the initial plan of minus JPY 6.5 billion.

FANCL, Blackmores, and "other" in Health Science Business segment are planning investments in Q4, and full-year profit is expected to be in line with the initial plan.

As a result, the Health Science Business overall is expected to exceed the initial plan by

JPY 3-4 billion, landing around JPY 8 billion. For FY2026, we intend to plan based on the FY2027 target of JPY 18-20 billion in NOP.

Q. Is it correct to understand that Kyowa Hakko Bio will post a loss of approximately JPY 4 billion in Q4?

A. That understanding is correct. Kyowa Hakko Bio remains responsible for supplying amino acids through FY2026, which entails a fixed cost burden. We expect Kyowa Hakko Bio to return to profitability in FY2027.

Q. Are Blackmores and FANCL outperforming the plan excluding one-time factors?

A. Yes. However, to ensure sustainable growth, we plan to increase investment in Q4.

Q. Is it correct to understand that the "Other" segment of the Health Science Business will also invest in Q4 to make the foundation for growth next fiscal year ?

A. Yes. We will increase investment ahead of the winter season, when demand for LC-Plasma is rising. Investment will also be made in Kirin-branded supplements.

Q. Kirin Brewery delivered solid profit in Q3, partly due to a rebound from last year's weak performance. Was there any impact from the competitor's cyberattack in Q3? What is the expected impact from Q4 onward?

A. The profit increase in Q3 was primarily driven by the price revision. The competitor's

cyberattack occurred at the end of September, so it had minimal impact on Q3. As for the impact from October onward, it is currently difficult to quantify. Shipments surged in early October but have since stabilized. The extent of the impact in Q4 and beyond will depend on how long the competitor's disruption continues, making quantitative forecasting challenging at this stage.

Q. Kirin Brewery recorded a JPY 13.6 billion gain from price revisions and product mix. Was there anything that performed better than planned??

A. The April price revision contributed positively year-on-year. However, profit was slightly behind the plan.

Q. Kirin Brewery appears to be maintaining profit levels by controlling costs despite declining volume. Will this approach continue??

A. Marketing expenses at Kirin Brewery were lower year-on-year through Q3, but this was not due to cost-control. Last year, we invested heavily in marketing for the "Harekaze" brand in Q2 and Q3. This year, marketing expenses have been more evenly distributed throughout the year. In Q4, Kirin Brewery plans to invest more than last year, resulting in higher year-on-year spending.

Q. While it may be difficult to quantify the impact of the competitor's cyberattack, has there been any change in recent market share trends?

A. Since the competitor has not disclosed figures, it is difficult to accurately assess market share trends. However, in retail stores, when competitor products are unavailable, Kirin

products are sometimes sold instead. In the on-premise channel, demand for bottled

products has increased, but keg demand has not risen significantly due to differences in tap head specifications.

Q. Kirin commented that it aims to achieve high single-digit growth in NOP profit in 2026.

Should we understand this as a plan that already factors in the negative impact of a

potential divestment of Four Roses? If you cannot comment on that, please explain what the profit growth drivers would be?

A. We aim to deliver high single-digit growth by factoring in various assumptions. Fundamentally, each business is expected to generate higher profits than this year. The

Health Science business is expected to contribute the most to profit growth.

Q. Is it correct to interpret this as organic profit growth?

A. We are primarily targeting organic growth. Even in the event of a business divestiture, it remains committed to achieving profit growth.

Q. Coke Northeast delivered stronger profit growth in Q3 than in Q2. What changed, and is this growth expected to continue?

A. In the US, while tariffs have impacted on the sales trends of luxury goods, Coca-Cola products are positioned closer to daily essentials and have not been significantly affected. Additionally, growing health consciousness has led to increased sales of Coca-Cola Zero and Diet Coke. Coke Northeast did not undergo any major changes from Q2, but steady sales activities and effective merchandising contributed to growth in both volume and unit price. Going forward, We will continue to expand shelf space and enhance operational

efficiency through automation and other cost-saving initiatives.

Q. Will the Alcoholic Beverages and Non-Alcoholic Beverages businesses exceed the full-year plan, or is there any downside risk?

A. Kirin Brewery and Lion in the Alcoholic Beverages business are expected to land in line with the initial full-year plan. Kirin Brewery slightly underperformed through Q3, but considering competitive dynamics, performance is broadly in line with expectations. Lion plans to step up marketing investments in Q4 but has shown positive momentum through Q3 and is expected to meet the annual plan. In the Non-Alcoholic Beverages business,

Kirin Beverage has been slightly behind through Q3, and there remains a risk of underperformance. However, Kirin Beverage aims to achieve the full-year plan. Coke

Northeast performed steadily through Q3 and is expected to meet or potentially exceed the annual plan.

Q. What are the drivers behind the growth of FANCL's overseas supplement business?

A. Growth has been driven by the continued strong performance of "the Age Bracket-Based Supplements" and FANCL's enhanced ability to independently execute marketing initiatives in the Chinese market.

-End-