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KIRIN REPORT 2018

The Kirin Group's Value Creation Model

Enhancing economic and social value by positioning the creation of shared value at the heart of business activities

The Kirin Group has positioned the concept of creating shared value (CSV) as the basis of its business activities. Accordingly, the Group is working to improve its operational resources—particularly human resources, brands, R&D, supply chain and information technology— as a means for enhancing technological capabilities and marketing expertise. They are its foundations for creating value, which is one of the Group's competitive advantages. At the same time, the Group is branching out into diverse new business domains by generating synergies from its alcoholic and non-alcoholic beverages businesses as well as its pharmaceuticals and bio-chemicals businesses. Through the products and services offered by each of these business areas, the Kirin Group is increasing both economic and social value it offers to its stakeholders around the world. Looking ahead toward the next stage of growth, the Group intends to enhance its operational resources while maintaining this cycle of creating value with the goal of growing sustainably into the future.

Kirin's Value Creation

Turning Kirin's strengths into value, worldwide

The Kirin Group's strengths in technology and marketing are the foundation we use to deliver appealing products and services to consumers worldwide. Innovative technology goes beyond the fruits of our R&D efforts. It includes continuous innovation in manufacturing, engineering, raw material procurement and logistics. Similarly, our marketing expertise encompasses more than advertising and sales promotion. We also uncover consumer insights and latent needs for which we develop new products and services, thereby creating new markets in concert with communities and consumers. To these strengths we add human resources, brands, R&D, supply chains, and information technology backed by management resources. This process reinforces the foundation and creates new value shared with communities worldwide. In this way, we contribute to health and well-being, community engagement, and environmental protection through our Group businesses around the globe. Here we introduce our initiatives to create value by leveraging the Kirin Group's strengths.

Editorial Policy

This integrated report comprehensivelyexplains the KirinGroup’s corporate value in bothfinancial and non-financial terms. KIRIN REPORT 2018 summarizesthe strengths of theGroup based on Kirin’s DNAand its medium- and long-termvision in an easy-to-understandmanner using the "Value CreationModel Diagram" (pages 7–8)as a guide.

Guidance for Collaborative Value Creation

We systematically describe the growth story in Kirin Report 2018 to convey the whole picture of the value creation flow, such as the value creation model (our business model), strengthening intangible assets, referring to the Guidance for Collaborative Value Creation as a common language with investors. We aimed it would trigger dialogue with investors to deepen mutual understanding.

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