Concept
Promote the Meiji ROESG®*Management effectively
Realize both profit growth and sustainability activities
Key Issues
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Business strategy
Food segment 1) Recover from the slump in our core business2) Accelerate growth in our business overseasPharmaceutical segment 1) Integrate business operations of Meiji Seika Pharma and KM biologics (Strengthen vaccine business)2) Expand CMO/CDMO businessGroup-wide Venture into new domains - Improve business management using ROIC offectively
- Investing to grow business while constructing strong financial base
- Promote the Meiji Group Sustainability 2026 Vision
Promote the Meiji ROESG® Management Effectively
Offering Health Value: our founding commitment
We reaffirm this commitment and will be a sustainable corporate group that shares health value with people and societies around the world in order to achieve growth
- Set up our unique indicators as KPI. Indicators include sustainability goals unique to the Meiji Group in addition to ROE and ESG
- Link with officer compensation to ensure efficacy
Business Strategy: Food segment
Recover from the slump in our core business
Yogurt and functional yogurt
- Improve functionalities and evidences of existing products
- Launch new products that have new added-value
- Venture into new domains and new market
Nutrition
- Sports nutrition: Increase sales of SAVAS products
- Nutrition for infants & children, enteral formula: Increase share by enhancing product values
Chocolate
- Appling the value of cocoa, develop innovative products in new domains and at various serving temperature
- Promote procuring sustainable cocoa and adding value to products
- Optimize production system
Expand overseas Business
China
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Increase production capacity significantly
Production capacity at FYE 3/2024 (Based on monetary amount, compare to FYE 3/2021)- Milk and yogurt
- About 4 times (Expand capacity in Suzhou,1 New factory in Tianjin,2 Guangzhou3)
- Confectionary
- About 2 times (New factory in Guangzhou3)
- Ice cream
- About 2 times (New factory in Shanghai3)
- Increase sales of functional yogurt and SAVAS
Other area
- Strengthen business partnership with Danone regarding the infant formula tablets
Business Strategy: Pharmaceutical segment
Integrate business operations of Meiji Seika Pharma and KM Biologics (Expand vaccine business)
Improve research and development collaboration
Enhance supply management integrating production and sales
Progress product development
- Inactivated vaccine for COVID-19
- DTaP-IPV/Hib vaccine
- Dengue vaccine
Expand overseas business
Establish new modality for drug discovery/development by promoting open innovation
Expand CMO/CDMO
Overseas
- Expand businesses with existing customers and capture new customers
- Strengthen R&D capabilities to secure a competitive advantage
- Expand production capacity (capital expenditure)
- Respond to increasing demand for access to medicines
Japan
- Use Medreich's large-scale production capacity for Japanese market
Business Strategy: Venture into New Domains
Contribute in immunity domain
Offer new value that contributes to extending healthy lifespans
- Commercialize anti-ageing ingredients
- Create immunity-boosting substances
Sales (for illustration purposes)
- New domains
- Existing business
R&D Structure (collaborations: industry/ government/ academia)
Strengthen external partnerships to create new businesses (promote open innovation)
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Internal development program
- Establish innovation business strategy department
- Solicit internally to launch new businesses driven by young employees
- Partner with external contractors (major corporations, ventures, academia, consultants, etc.)
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External development program (Meiji accelerator program)
Solicit to launch new businesses driven by internal young employees with external ventures/startups
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Search startups/ventures
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LP*investment in New Protein Fund in Big Idea Ventures
Evaluate businesses related to next-generation protein technology such as plant-based protein -
TECH PLANTER by Leave a Nest
Participate in food tech and biotech domains
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LP*investment in New Protein Fund in Big Idea Ventures
Improve Business Management: Using ROIC effectively
Improve the Group capital productivity
- Review noncore businesses, redistribute management resources to growth businesses
- Improve capital productivity by business
1. Strict ROIC management by business |
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2. Manage business focusing on capital costs |
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3. Clarify structure for authority and responsibility |
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4. Investment evaluations |
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Defined business categories for ROIC evaluation
Food segment: 10 business management units
Pharmaceutical segment: 8 business management units
Set WACC 5%, Manage business focusing on capital costs
Financial strategy: Capital rationing
- Continue investments to grow business (growth investment) within cash flows from operating activities
- Effective M&A as part of growth strategy
- Reduce cross-shareholding by 30% (based on book value)
- Increase dividend continually, Gradually increase dividend payout ratio to 40%
- Examine share repurchase considering optimal capital structure
Sustainability: Materiality
Healthier Lives
Contribute to healthy diets through our business activities
- Develop health-conscious products and nutritional products with added value
- Promote and spread healthy diets and food culture
Action against emerging/re-emerging infectious diseases
- Develop and supply vaccine for COVID-19
- Develop vaccine for Dengue fever
Caring for the Earth
Action against climate change
- Promote using renewable energy
(install solar power generator, purchase renewable energy) - Get SBT (Science Based Targets) certification in FYE 3/2022
- Introduce internal carbon pricing in FYE 3/2022
- Abolish totally the use of specific fluorocarbons
Promote plastic resource circulation
- Reduce (use lighter and thinner plastic container packaging and switch to paper)
- Use bioplastics and recycled plastic
Secure Water Resources
- Reduce water use, protect and conserve water resources
- Respond to water risks
Thriving Communities
Respect for diversity
- Promote Diversity and Inclusion
Respect for human rights
- Conduct human rights due diligence and disclose results
Sustainable procurement
Procure raw materials in accordance with human rights and environmental impact
- Establish responsible supply chain (Questionnaire survey for sustainable procurement)
- Plan procurement of sustainable cocoa beans, certified palm oil and environmentally friendly paper
Sustainability: Sustainability investment
Invest JPY 30 bn in 3 years in sustainability investment Invest strategically to realize 2026 vision
Item | JPY bn | Content |
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Reduce CO2 emission | 13 |
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Abolish totally the use of specific fluorocarbons | 7 |
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Reduce domestic plastic usage | 3 |
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Secure water resources | 3 |
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Other | 4 |
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Total | 30 |
KPIs for 2023 Medium-Term Business Plan
Indicator | FYE 3/2022 | FYE 3/2023 | FYE 3/2024 (Plan) |
Target for FYE 3/2024 (Initial plan) |
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Integrated goal | Meiji ROESG® | 12.3 points | 13.8 points | 13 points | 13 points |
Growth and Profitability | Consolidated net sales | JPY 1,013.0 bn | JPY 1,062.1 bn | JPY 1,098.5 bn | JPY 1,080.0 bn |
Consolidated operating profit (profit margin) | JPY 92.9 bn (9.2%) |
JPY 75.4 bn (7.1%) |
JPY 80.0 bn (7.3%) |
JPY 120.0 bn (11.1%) |
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Overseas net sales | JPY 92.9 bn | JPY 120.0 bn | JPY 133.5 bn | JPY 134.5 bn | |
Efficiency and Safety | ROIC | 8.4% | 6.3% | 6.5% | ≥10% |
Return to shareholders | ROE | 13.5% | 10.0% | 7.0% | ≥11% |
Dividend payout ratio | 28% | 36.4% | 51.9% | 40% |
2023 Medium-term Business Plan Target for sales and operating profit
Food Segment Consolidated Sales and Operating Profit
(JPY bn)
Pharmaceutical Segment Consolidated Sales and Operating Profit
(JPY bn)