Meiji ROESG

We introduced the Meiji ROESG as the management indicator with the highest priority. The Meiji ROESG consists of two components: ROE, which represents earning power; and the degree of achievement of ESG goals. We aim to grow profits and improve ESG indicators.

CEO Message

Formula for calculating Meiji ROESG

* Details of target products
Food segment
1. Health-oriented foods and value-added nutritional foods
(Meiji Bulgaria Yogurt, Meiji Probio Yogurt R-1, Chocolate Koka, SAVAS, Meiji MeiBalance, etc.)
2. Foods with our environmentally and socially conscious procurement activities for a sustainable society
(Meiji Oishii Gyunyu, Meiji Milk Chocolate, Meiji Hokkaido Tokachi series (yogurt and cheese), etc)

Pharmaceutical segmentl
1. Influenza vaccine
2. Stable supply drugs (Category A)

External Recognition

Key Strategy

1. Invest management resources into growth businesses

Food Segment

Accelerate to grow overseas business

-Expand sales of products that are competitive in terms of technology and intellectual property

-Expand sales of products that enable differentiation through taste and manufacturing technology

-Enhance marketing activities and product development meet local needs

-Establish a global production system

Strengthen and expand B to B businesses

- Increase in sales through newly developed materials

- Expand sales channels for own-brand products

Pharmaceutical Segment

• Maximize the value of newly launched products
• Accelerate the development of revolutionary new drug pipelines

Pipeline

2. Keep and improve stable cash flow

Food Segment

Develop new "market-creating" products that link sustainability to added value and economic value in existing businesses

- Meiji Sustainable Products Certification System
Promote sustainability activities for every process along the value chain
Incorporate sustainability into product concepts

Sustainability 2026 Vision

- Meiji Nutrition Profiling System (Meiji NPS)
Develop and improve products with high nutritional value

Maximize the value of existing products

Launch solution business and service utilizing digital technology, and use it for marketing

Pharmaceutical Segment

• Strive to stably supply pharmaceuticals linked to national strategy
• Solidify domestic generic drugs value chain through collaboration with other companies

Overall group

Use ROIC to strengthen our business management structure

We will improve ROE to achieve the target of the Meiji ROESG, our highest management goal. Therefore, we will work to improve capital efficiency using ROIC. We will continuously improve our operating profit margin led by sales growth and cost reduction, and control invested capital.
We recognize 5% as our WACC, and establish separate hurdle rates for the food and pharmaceutical segments (food: 6%, pharmaceutical: 7%) to strengthen the business-specific ROIC management structure.
We will steadily expand the spread between ROIC and WACC, and aim to achieve an ROIC level of 10% in the future.

3. Promote human capital strategy linked to management strategy

We will focus on the following two points of the human capital strategy to support the growth strategy.

Human Resources

Financial Strategy

-Appropriate distribution of operating cash flow towards strategic investments and ordinary investments in accordance with key strategies.

- When executing M&A/alliances, conduct debt procurement as necessary based on a D/E ratio of roughly 0.5 times or less with the assumption of maintaining our current credit rating.

-For shareholder returns, aim for a total return ratio of 50% or more and aim to continuously increase dividends. Consider stock repurchase from the perspective of achieving an optimal capital structure.

-Reduce cross-shareholdings to less than 5% of consolidated net assets at the end of the fiscal year ending March 2027.

* Figures are net of subsidies

KPI

With the following KPIs, we will steadily implement measures to evolve Meiji ROESG management.