Kirin Holdings Company, Limited

In the Food domain, the core business of the Kirin Group, there is a risk that sales plans may not be achieved due to changes in market conditions and consumer preferences, fluctuations in selling prices, and competitor actions. The possibility that soaring raw material and fuel prices stemming from geopolitical risk could directly impact earnings is also positioned as a key Group risk. The risk that the success or failure of expanding high-value-added product offerings could affect the medium- to long-term business plan continues to be monitored, with appropriate risk control measures being implemented.

In the Pharmaceuticals domain operated by Kyowa Kirin, there is a risk that delays in preparing for the launch of global strategic products or difficulties in market penetration could delay business area expansion. Price reductions driven by healthcare cost containment pressures in Japan and overseas, as well as progress in the shift to generic drugs, are also factors that pressure profitability. As countermeasures, the company is advancing market penetration measures and expanding its business regions, primarily in Europe and the United States, while strategically considering multifaceted evaluation of product value while closely monitoring healthcare policy trends in each country.

In the Pharmaceuticals domain, if pipeline expansion does not progress, there is a risk that future growth potential and profitability could decline. Concerns over product safety and quality, as well as disruptions to stable supply due to sudden increases in demand, are also recognized as key risks. These are addressed through monitoring by the Global Quality Assurance Committee, quality audits by an independent specialist audit team, expansion of outsourcing partners and capital investment in in-house plants, and visualization of supply-demand planning through the promotion of digitalization.

Following the newly acquired Blackmores Limited and FANCL Corporation, there is a risk that intra-group synergy creation may not progress, preventing the establishment of a highly profitable business model. There are also risks of regulatory changes in existing countries of operation, delays in responding to regulations in new countries of operation, and brand damage due to quality issues or product shortages. In promoting business in an area different from the core Food domain, the company is expanding organizational capabilities and strengthening governance to enable swift decision-making and timely, appropriate risk control.

There is a risk that external cyberattacks could halt business activities or lead to the leakage, alteration, or loss of important data such as customer information and trade secrets, potentially resulting in liability for damages to stakeholders, damage to brand image, and loss of business opportunities. The company has established Group information security regulations and built an incident response framework through KIRIN-CSIRT, promoting the strengthening of security foundations across the Group based on the framework of "govern, identify, protect, detect, respond, and recover." The company also continues to leverage threat intelligence and strengthen collaboration with external specialist organizations in preparation for unknown cyber threats.

Physical risks such as increased procurement costs and operational suspensions due to reduced yields of raw agricultural materials caused by global warming, drought, and flooding, as well as transition risks from carbon pricing such as carbon taxes, are recognized as key risks affecting business continuity and profitability. The company evaluates financial impacts and the resilience of its strategy through scenario analysis based on the TCFD recommendations, and selectively implements measures that contribute to risk reduction and opportunity capture. Under the "Kirin Group Environmental Vision 2050," the company promotes initiatives to comprehensively address biological resources, water resources, containers and packaging, and climate change.

There is a risk that supply chains could be disrupted by large-scale natural disasters such as earthquakes and typhoons, infectious diseases, geopolitical risk, cyberattacks, or disasters affecting outsourcing partners, resulting in the closure of business sites or the scaling back or suspension of business activities. In Japan, concerns include impacts on transportation capacity due to labor shortages and changes in logistics systems and conditions, while overseas, supply chain disruption due to terrorism or political instability is a concern. The company is working to strengthen its response capability and resilience to crisis events through the formulation of an all-hazard BCP (business continuity plan) and the implementation of drills to confirm logistics function performance.

There is a risk that procurement costs could exceed plans due to market conditions and exchange rate fluctuations, pressuring business profit, as well as a risk that delays in securing necessary quantities of raw materials or deliveries could arise due to geopolitical developments, disasters, or supplier business withdrawals and industry restructuring. There are also concerns about reputational damage from the risk of violations of laws such as the Subcontract Act (as amended) and the emergence of human rights or environmental risks in the supply chain. These are addressed through cost stabilization via long-term contracts and foreign exchange hedging, diversification of procurement sources, implementation of human rights due diligence, and confirmation of compliance with the "Kirin Group Sustainable Supplier Code."

There is a risk of changes in value after conversion into yen due to exchange rate fluctuations, a risk of funding constraints or cost fluctuations due to changes in financial markets or credit rating changes, and a risk of higher-than-expected tax burdens due to changes in tax systems in various countries or differences in views with tax authorities. The company reduces financial risks through hedging using derivatives, diversification of funding methods, and efficiency gains from centralized management of Group cash, while striving to reduce tax risk through thorough and appropriate tax payment in compliance with tax regulations.

The WHO is advancing discussions toward strengthening global regulations on the sale and marketing of alcoholic beverages, and as interest in drinking and health rises in Japan as well, there is a risk that this could lead to a decline in alcohol consumption and corporate value. On the other hand, there is also an opportunity in the expanding market for non-alcoholic and low-alcohol products. The company addresses this through compliance with laws and global marketing guidelines and voluntary standards on responsible drinking, collaboration with industry associations in Japan and overseas including IARD, and expansion of its non-alcoholic and low-alcohol beverage offerings.