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Management Plan

Kirin Group 2019-2021 Medium-Term Business Plan

February 14, 2019

Basic Policy

  • Shift gear from revitalization to new growth by creating a foundation for the Kirin Group
  • Maximize corporate value by enhancing shareholder returns

Key Initiatives

  • Implement 3 specific strategies as the first stage of KV2027
  1. Profit growth of existing businesses
    Food: Further strengthen profitability
    Pharmaceuticals: Achieve outstanding growth
  2. Establish and foster new businesses bridging Pharmaceuticals and Food & Beverages
  3. Strengthen organizational capabilities for innovation

Key Performance Indicators

  • Aim to improve shareholder value by continuing to grow normalized EPS while ROIC has been adopted as a new financial target due to prioritization of growth investment

Financial targets:

  • Normalized EPS: CAGR5%+
  • ROIC: 10%+ by FY2021
  • Aim to create shared value with our stakeholders, society & the environment, consumers, and employees by setting 3 non-financial targets.

Non-financial targets:

  • CSV Commitment
  • Corporate Brand Value* US$2.2bn+ by FY2021
  • Employee Engagement Score 72% by FY2021
  • *Use the evaluation of the Kirin brand value in the Brand Ranking created/ released every year by Interbrand Japan

Financial Strategy

  • Aim to maximize corporate value by using the operating cash flow generated by the growth of existing businesses for stable dividends and disciplined growth investments, as well as by considering flexibly allocating the cash to additional shareholder returns.
  • Balanced investment
    Control maintenance and renovation investment, and make proactive investments with high asset efficiency and market attractiveness
  • Enhanced shareholder returns
    Increase consolidated dividend payout ratio (from 30%+ to 40%+ of normalized EPS), and consider additional shareholder returns
  • Disciplined investment
    Use NPV and ROIC as criteria based on cost of capital
  • Investment in creation of intangible value
    Continuously invest in brand, R&D, digitalization, and HR and organization to strengthen organizational capabilities for innovation

Corporate Governance

  • Further promote medium- and long-term value sharing with shareholders and investors by linking key performance indicators (financial targets) and annual normalized OP with remuneration of executive officers.
Performance evaluation indicators
Yearly bonus ・Normalized OP
Restricted Stock Compensation
(restriction period: in principle 3 years)
・Normalized EPS
・ROIC

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