TOP MESSAGE｜Investors and Shareholders Information

My mission is to create a corporate culture that embraces challenges

 Having worked at ITOHAM from 2014 to 2016 and at YONEKYU from 2017 to 2018, I have been involved in the management of both companies both before and after their integration. I felt that this merger would allow each to demonstrate its strengths precisely because ITOHAM and YONEKYU have different characters. From those days, ITOHAM had a nationwide brand and was an honest, reliable company that did not ignore the importance of trust and credibility. In contrast, YONEKYU is a company that was built in one generation by its founder, and I gained the impression of an enterprise that has great drive and possesses the ability to surpass itself. Enjoying a strong brand presence in its local Tokai area, YONEKYU was also a unique company in other regions, utilizing its strength in commercial products to create products from scratch together with its customers, that its customers wanted.
Since the management integration, we have been consolidating overlapping functions, such as procurement, logistics, and corporate departments, and have been transforming into a leaner organization by leveraging the strengths of both companies. From now on, we will have reached the stage at which we can use the experience we have gained from streamlining and strengthening our business to add new levels to the foundation we have built so far and build up new businesses.
 In the meantime, when looking at the external environment, the changes that have taken place over the past nine years have been far greater than expected. In Japan, the declining birthrate and aging population mean that the working population is continuing on a downward trend, and peopleʼs lifestyles have changed significantly since the COVID-19 pandemic. The current global cost-push inflation is also having a major impact on corporate management. As a result, many companies in the meat and processed meat industries in Japan are facing deteriorating financial conditions. I believe that we are currently able to maintain a leading position in the industry thanks to the effects of the integration. However, the external environment is changing rapidly, and we have not yet achieved the sales and profits we had initially anticipated at the time of our integration, meaning that we must adapt to these changes and continue to transform. Given these circumstances, I believe that what I must do as president is to reform the organizational culture to better confront these challenges and encourage the organization to transform itself.

Armed with our competitive advantages in the Japanese market, we will accelerate our global expansion

 While we are working to strengthen our overseas business to achieve further growth in the years to come, our commitment to the Japanese market remains resolute. We expect continued business growth in the Japanese market, where we enjoy competitive advantages. Since we can receive feedback directly from consumers, the Japanese market represents an environment that makes the likelihood of success of new products and businesses to remain high.
However, with Japanʼs population certain to decline, growth will slow if the Company remains only in the meat and processed meat businesses as now. I would therefore like to see our Group not confine itself to meat and processed meat products and become a wide-ranging food company. The Group operates a nationwide network that reaches most supermarkets, restaurants, convenience stores, and local butchers, which is one of our major competitive advantages. While many food companies distribute their products through wholesalers, our Company possesses the logistics capabilities to deliver products directly, which is another major advantage. I believe that there exists the possibility that companies would appreciate our sales network and logistics capabilities and become our partners. If we can create new forms of co-creation like this, we will be able to see the realization of our ideal vision of becoming a wide-ranging food company that is not limited to meat and processed meat products.
 Amid shifting consumer and market needs, the important thing will be to quickly spot and respond to those trends. Previously, Japanʼs demand for meat had increased as eating habits became more Westernized, but more recently, as the population ages, demand for high-protein, low-fat chicken has been on a rising trend. As a player in the entire value chain of meat and processed meat in Japan with a nationwide network of retailers, I feel that the Group is highly sensitive to change and able to constantly adapt and transform itself. Such changes can occur in any country. We aim to be a company that can respond appropriately to these changes in Japan, but likewise in our overseas operations, I would like us to become a company that can sense and respond proactively to changes in consumers and markets.
 Overseas, we plan to first accelerate business development in meat and processed meat areas where we have expertise and increase the proportion of overseas sales in our Groupʼs consolidated net sales, which currently stands at approximately 15%. As an example, for us to expand our overseas business through M&A, the prerequisite will be that we strengthen our basic earning power and remain a robust company. If we were to try to build an entire livestock industry value chain from upstream to downstream all at once when expanding overseas, the investment amount would balloon, and the risks would increase. In considering a more realistic expansion process, a local partner is essential, and from that partnerʼs perspective, it would be easier to work with a company that has a prevalent position in Japan. To further expand our business domains overseas, I would like to strengthen our existing business in Japan and steadily improve our basic earning power.

Strengthening resilience as an organization aiming toward sustainable growth

 I find the livestock industry attractive because of its connections to nature and local communities. We work with local people in the areas where our farms and factories are located to raise healthy animals that are suited to the geographical characteristics of those areas. We produce fresh, great-tasting meat from plant feed that is literally rooted in the land, such as grass and grains. By appropriately treating the by-products generated in the process, such as through bioprocessing, we can utilize them to make fertilizer, energy, and raw materials for medical products, making full use of the blessings of food. It can be described as a ‶self-circulating business," which starts with the blessings of the local community and nature and eventually giving back to the earth.
 I believe that by having the talent we have working for our Group reflect on the significance of the livestock industry̶and for them to remain aware that their work is linked to a variety of stakeholders as well as to society̶will lead to increased job satisfaction and sustainability.
 It is my belief that human resources are a companyʼs most important management resource and a factor that determines its future. The point about being part of a large organization is that you can accomplish things as a team that you cannot do on your own. If the strengths of each and every employee can be harnessed to the fullest extent, a company can continue to grow. Accordingly, I would like to create a company in which employees can freely and openly take on challenges and expand their areas of activity by breaking down barriers through balanced appraisals and the active encouragement of internal job transfers.
 Also, even if an organization is optimal at a certain point in time, it may not be optimal in 5 or 10 yearsʼ time. Therefore, by restructuring our organization to suit the circumstances of the time, I hope to drive human capital management to increase job satisfaction and improve engagement.
 As mentioned earlier, when it comes to sustainability, it is important to be aware of the links with the environment and society. Our business utilizes environmental resources such as animals, water, and grains, and it is true that this places a burden on the environment. There is no such thing as a perfect business, and doing something, even if it is for the benefit of society, will inevitably place some burden on the society. It is important that everyone in the business is fully aware of this and takes environmental and social considerations into account, for example by reducing greenhouse gas emissions and changing the way animals are treated in keeping with the times. I also think it is important for the Company to be transparent and openly disclose its thoughts.
 In addition to sustainability, we are also focusing on digital transformation (DX) to strengthen our management base, which is a theme directly linked to human capital and sustainability. To give an example, for us to contribute to a reduction in greenhouse gas emissions, we will need to improve efficiency in a number of areas, which will require efforts that utilize digital technologies. With regard to DX, we will first focus on improving efficiency, but in the years to come we will also utilize DX in areas peripheral to our business, leading to changes in our business model. For instance, I believe that our Groupʼs logistics capabilities give us a competitive advantage, and if we can incorporate digital technology to further improve efficiency, this would be a major asset in our growth strategy of expanding our food business areas.

Accumulating daily actions to achieve steady growth

 In todayʼs world, where management is required to remain aware of market needs and capital costs, I also view the improvement of corporate value as an important management issue. In March 2025, we decided to issue a commemorative dividend to mark the 10th anniversary of our founding, and I believe it is important that we have thereby been able to convey the importance that the Company places on its shareholders. The business performance of our Group is affected by a variety of external factors, such as market fluctuations and climate change. At the same time, we must meet the expectations of our shareholders through a stable dividend policy and returns. Amidst the volatility in profitability, our basic approach is to stably manage the capital entrusted to us by our shareholders and return it to them in accordance with the circumstances then prevailing. During the current medium-term management plan, our ordinary dividend policy is to pay a progressive dividend with a dividend on equity (DOE) of 3% or higher. The price-to-book ratio (P/B ratio) stood at 0.8 at the end of March 2024 but by August 2025 had risen to 1.1, bringing the long-standing P/B ratio of below 1.0 to an end. Not resting on our laurels, we will however continue to work to improve profitability and capital efficiency.
 For us to be trusted by our shareholders and other stakeholders and to meet their expectations, it is obviously important that we not only talk about improving profitability and taking on new business challenges but also take action. I also believe it is important to explain the underlying thinking and factors behind our decisions and to increase transparency.
 I place greater value on steady growth through daily work rather than temporary results or temporary success. I will continue to work to ensure that in every interaction with our stakeholders, including business partners and customers, they feel that “this company is even better than before.” In grateful anticipation, I would like to take this opportunity to ask for your ongoing support as the ITOHAM YONEKYU Group takes on challenges in the years to come.

“I want to improve profitability and achieve growth in new areas
so that our stakeholders will be able to have great expectations of us”