カゴメ（2811） – Integrated Report 2022

KAGOME Integrated Report 2022Kagome Co., Ltd. Head Office3-14-15, Nishiki, Naka-ku, Nagoya, Aichi 460-0003Tel. +81-52-951-3571 (Main)Tokyo Head OfficeNihonbashi-hamacho F-Tower, 3-21-1 Nihonbashi-hamacho, Chuo-ku, Tokyo 103-8461Tel. +81-3-5623-8501 (Main)KAGOMEIntegrated Report2022KAGOME COVER STORYAchieve a sustainable society and Kagome’s growth by resolving social issues through foodFor 123 years since our founding, Kagome has been contributing to consumers’ health and vibrant eating habits with its strength in harnessing the delicious taste and nutrition of nature’s bounty that activities that address social issues head on while sharing our corporate philosophy as a steadfast sense of value with all employees. In the future, we will continue to contribute to finding solutions to social issues in Japan and the world through our business activities, including promoting longer, healthier lives, agricultural development and regional revitalization, and achieving a sustainable global environment.are vegetables and fruits. We are enhancing corporate value through Transform from a “tomato company” to a “vegetable company”Kagome’s Ideal ImageWhat Kagome strives for by 2025“To become a strong company capable of sustainable growth, using food as a means of resolving social issues”Longer, healthier livesSustainable global environmentSocial issues to addressAgricultural development and regional revitalizationVisionCode of ConductMutual supportRespect for human rightsFairnessBasis, mindset and attitude behind our philosophyCorporate PhilosophyAn inherited management spirit that pervades through the changing timesBrand StatementOur promise to society and our customersAppreciationNatureCorporate OpennessWe are thankful for nature’s bounty and for human relationships. To strive for healthier food that makes the most of the antioxidants and We respect natural ecosystems and value human sensibility.immunological capabilities of nature’s bounty.Through nature’s bounty, we endeavor to create rich value that is ahead of To produce healthy, great tasting foods without relying on the times and to contribute to consumers’ health and wellbeing.unnatural additives and technologies.We aim to be an open company that engages in fair and transparent cor-Create new demand for delicious food, paying attention porate activities and respects each person’s individuality and abilities.to the needs of our bodies and our planetNatureTrueFlavorKAGOME INTEGRATED REPORT 20221KAGOME COVER STORYHow to achieve a sustainable society and Kagome’s growth through resolving social issues with food?Social issues that Kagome prioritizes are promotion of longer, healthier lives, agricultural development and regional revital-ization, and sustainable global environment. With our unique value chain comprised of agricultural value and cooperation with diverse partners, we provide products and services that link farming with health and lifestyle, thereby contributing to resolving social issues and achieving continuous enhancement of corporate value.e providulaV det o society as a resultSocial issues being addressed by the Kagome GroupValue offeredLonger, healthier livesPioneering the future of Japan with the power of vegetablesVegetables are important sources of nutrients, including vitamins and minerals. Many epidemiological studies have shown that consuming plenty of vegetables is effective in pre-venting a variety of diseases. In Japan, the average daily vegeta-ble consumption per person is about 290 g*1, which falls 60 g short of the national recommended value of 350 g*2. Kagome is carefully promoting the importance of vegetable consumption to everyone, recom-mending effortless, smart ways to consume vegetables even for busy days, and developing attractive vegetable products to contribute to longer, healthier lives.*1 The average daily vegetable consumption per person in Japan was about 290 g based on the 2010-2019 National Health and Nutrition Survey (Ministry of Health, Labour, and Welfare [MHLW]).*2 The target daily vegetable consumption recommended by The Ministry of Health, Labour, and Welfare’s Health Japan 21 is 350 g.CASE EXAMPLE 1Efforts to increase vegetable consumption levels in JapanIn January 2020, we launched the Let’s Eat Vegetables Campaign. Under the slogan of “let’s increase vegetable intake by just another 60 g,” we are developing various mea-sures to increase motivation to consume vegetables in collab-oration with many companies and organizations. We aim to increase vegetable consumption by increasing contact points between consumers and vegetables through valuable infor-mation and products that easily, deliciously, and happily deliver the nutrition of vegetables.2KAGOME INTEGRATED REPORT 2022Value offeredAgricultural development and regional revitalizationSupport agriculture and contribute to the sustainable growth of communitiesVulnerability in the farming base has become an issue in areas with rapid decline of labor population and societal aging. Moreover, risks to the continuity of agriculture are becoming more apparent globally, such as climate change and water shortages. Kagome contributes to agricultural development and regional revitalization through promoting regional agricultural businesses via development of vegeta-ble growing regions and processing, developing technology and services to enhance agricultural productivity and sus-tainability, and appealing domestic agricultural products through its businesses.Value offeredSustainable global environmentInitiatives for the environment as a company that delivers nature’s bountyKagome’s manufacturing, which has contributed to peo-ple’s health by harnessing the bounty of nature, has been based on the creation of safe and high-quality raw ingredi-ents by working from vegetable seeds to soil creation under the belief that “fields are the primary production plant.” We are promoting initiatives for a sustainable global environment as the responsibility of a company that enjoys the bounty of nature and delivers this to customers. We aim to realize a sustainable global environment by focusing on environmental conservation with the same desire as our passion for manufacturing.CASE EXAMPLE 2Development of bases and revitaliza-tion of communities through collabo-ration with agricultural companiesWe are promoting collaboration with agricultural companies with the aim of developing new vegetable procure-ment and manufacturing bases and revitalizing local communities and agri-culture. Sobetsu Agri-Foods Co., Ltd., established in Hokkaido in 2020, began selling fresh onions in autumn 2021.CASE EXAMPLE 3Resource and energy recycling-type vegetable farmsAt Yatsugatake Mirai Farm in Nagano Prefecture, heat is recovered from the hot water used by the adjacent Kagome Fujimi Plant with a heat pump and reused for heating during fresh tomato cultivation. Part of the CO2 in boiler exhaust gas is used to promote photosynthesis inside the greenhouse.KAGOME COVER STORYKagome’s Business Model Recommendations from External CONTENTS Kagome Co., Ltd. Integrated Report 2022KAGOME COVER STORYGLOSSARYTOP MESSAGEStrengthen Foundation for Value Creation – Response to MaterialitySustainable Global Environment Respecting Diversity and Expanding Kagome’s Value CreationHuman Capital 1  5  6 12 14 16 18 24 26 28 34 42 44 46 General Business ConditionsHistory of the Kagome GroupKagome’s Value Creation Process Management Capital Supporting GrowthKagome’s Growth Strategies Second Mid-Term Management Plan Review and Issues Third Mid-Term Management Plan Overview Enhancement of Sustainability-related Initiatives and Review of Materiality36 CFO/CRO MESSAGEBusiness StrategiesDomestic Processed Food BusinessDomestic Agri-BusinessInternational Business48 52 56 58 60 62 68 69 69 72 74 77 78 Product Safety and Security Establishing a Sustainable Supply ChainKagome’s ManagementDirectors Corporate Governance Compliance Internal Control Our Responsibility to Shareholders and Investors70 DirectorsFinancial Performance/Company Information Key Financial and Non-Financial Data Consolidated Financial StatementsCompany OverviewStock Information Editorial PolicySince the release of its Environmental Report for fiscal 1999, the Kagome Group has continuously reported to our stake-holders on our efforts toward making a social contribution through our businesses by means of the Sustainability Report (CSR report) and Kagome Story (company bro-chure). This Integrated Report is issued to create new opportunity for discussion by informing our stakeholders, in particular shareholders and investors, about Kagome’s mid- to long-term efforts for enhancing corporate value. For details of the financial data and CSR activities not included in this document, please refer to our website.Kagome website https://www.kagome.co.jp/englishUnits of Amounts in This ReportIn this report, amounts are expressed in units of hundred of millions of yen rounded down to the nearest one hun-dred million yen and amounts expressed in units of mil-lions of yen rounded down to the nearest million yen. In addition, percentages are shown after rounding.Reporting Period and BoundaryThis report covers the period from January 1, 2021 to December 31, 2021. However, some portions contain matters related to activities outside this defined period. The boundary of this document covers the activities of Kagome Co., Ltd. and its consolidated subsidiaries but there are items that only pertain to Kagome Co., Ltd.Referenced GuidelinesThis report was prepared with reference to the International Integrated Reporting Framework issued by the International Integrated Reporting Council (IIRC) and Guidance for Collaborative Value Creation issued by Japan’s Ministry of Economy, Trade and Industry (METI). Moreover, our CSR activities are reported on our website, and highlights are included in the ESG section of this report.[Notes Regarding Forecasts]The information in this report includes forward-looking statements. These statements are made on the basis of assumptions and judgments based on information avail-able at the time of publication, hence they may contain risks and uncertainties. Accordingly, please be advised that the actual results may differ from such statements due to various changes.EngagementOrganic growth and inorganic growthCore operating incomeA positive mental state in regard to work where an employee feels enthusiasm, dedication and vital-ity. Engagement results in points to equal and strong connections between the organization and indi-viduals. As a result, stronger orga-nizations offer greater the productivity.Organic growth refers to growing exist-ing businesses in a stable and consis-tent manner. Inorganic growth refers to growth that results from gaining new resources via M&A or other means.Core operating income is a profit index that measures constant business performance by deduct-ing cost of sales and selling, gen-eral and administrative expenses from revenue plus share of loss (profit) of entities accounted for using equity method.Smart agriculture businessBiodiversityVegeCheck®Farm management support busi-ness for processing tomatoes uti-lizing AI. Jointly developed with NEC. Markets services that visual-ize the condition of soil and grow-ing situation of tomatoes using sensors and satellite imagery and farm management advice using AI.A condition in which the richness and balance of an ecosystem con-sisting of many kinds of living things are maintained. The Convention on Biological Diversity states three levels of diversity: ecological diversity, species diver-sity, and genetic diversity.A device that measures vegetable intake level (0.1 to 12.0) and esti-mated vegetable intake volume (according to six levels; g) simply by holding the palm of your hand over a sensor for tens of seconds. Measurement is completed in tens of seconds providing the conve-nience of being able to view results on the spot.Plant-based domainVegetable Intake Promotion ProjectLet’s Eat Vegetables CampaignThe plant-based domain, which is one of our growth drivers, tackles new challenges beyond existing businesses in vegetable bever-ages and vegetables, including plant-based milk, among others.Part of the Let’s Eat Vegetables Campaign, this project seeks to increase momentum toward eating vegetables by working closely with companies and orga-nizations that have endorsed its mission. As of December 2021, 19 companies are participating in this project (excluding Kagome).An initiative intended to resolve the social issue of a lack of vege-table intake in Japan. The cam-paign was launched in January 2020 under the slogan “let’s increase vegetable intake by just another 60 g.” The campaign is now harnessing knowledge, tech-nologies, services and products to evolve the ways in which people eat vegetables to ease the lack of vegetable intake.45GLOSSARYKAGOME INTEGRATED REPORT 2022TOP MESSAGEWe will achieve what Kagome strives for by 2025 by implementing the third Mid-Term Management Plan and striking a balance between our own growth and solutions to social issues.Kagome’s third Mid-Term Management Plan will kick off from FY2022. We promise to our stakeholders that we will grow the Kagome Group by providing solutions to social issues as a culmination of our efforts to achieve what Kagome strives for by 2025.Market environment in FY2021 and evaluation of resultsIn FY2021, the market environment remained difficult to predict given the rapid changes in the balance between home cooking, home meal replacements, and eating out due to the COVID-19 pandemic. Moreover, there were significant changes in where products were purchased and consumed, shifting from urban President & Representative Directorareas to the suburbs, driven by restrictions on going out and the  Despite the extremely challenging management environment, for widespread use of remote work.FY2021 we managed to increase both revenue and profits over the  Given this situation, we experienced major impacts on our busi-previous year as revenue totaled 189,600 million yen, up 3.6% and ness as a food manufacturer. With trends in product sales chang-core operating income totaled 14,100 million yen, up 4.0%. With ing by the moment, our sales department alongside supply chain demand trends difficult to predict, these strong results were attrib-Looking back on first and second Mid-Term Management Plansother words, our current issue is that we have become a company that can generate profits, but falls short in terms of the ability to grow. This is the result of unbalanced activities for expanding existing businesses, increasing efficiency and looking at new busi-nesses for future growth. Another factor was we did not perform management, production and procurement departments worked uted to our fulfilment of our supply side responsibilities as a food When the first Mid-Term Management Plan kicked off in 2016, sufficient reviews concerning the accuracy of business closely together to manage and control our supply chain over the manufacturer by addressing changing sales volume as needed and our profits had declined considerably, resulting in a critical situa-investment.past year. At the same time, green and yellow vegetables garnered to persistent activities to tap into new markets and customers in tion for the company. This is why we focused our greatest energy  The third Mid-Term Management Plan which gets underway in attention for their ability to increase the effectiveness of the body’s line with changes taking place in consumer behavior. I would like to on earnings structure reforms throughout the first and second FY2022 contains strategies focused on growth based on this immune system amid growing health consciousness among con-express my appreciation to all of our employees and partners who Mid-Term Management Plans. Through our various measures, reflection. This will become a management plan that will serve as sumers. This served to boost sales of our core vegetable drinks. never gave up despite these challenges. I believe that this experi-core operating income in FY2021, the final fiscal year of the a culmination of our efforts to achieve what Kagome strives for by The International Business, which has a high product mix toward ence will serve as a foundation for achieving the new value provi-second Mid-Term Management Plan, had doubled compared to 2025, first established in 2016. Therefore, we will focus on achiev-the food service industry, was impacted by lockdowns, but in the sion in the third Mid-Term Management Plan.FY2015, transforming us into a much higher quality profit struc-ing the targets and increase necessary investment and expenses.ture. However, our growth has slowed since peaking in 2017. In second half of FY2021 eating out demand recovered quicker than in Japan, helping revenue move toward a recovery.67KAGOME INTEGRATED REPORT 2022KAGOME INTEGRATED REPORT 2022TOP MESSAGEThird Mid-Term Management Plan focused on growthtask. As such, the Let’s Eat Vegetables Campaign launched in 2020 will be continued during the period of the third Mid-Term Management Plan in an effort to persistently encourage behav-ioral change. Since there are actions that cannot be achieved on a standalone Kagome’s business domain is “food & health.” As you know, this basis and some stakeholders we cannot reach alone, as part of domain will be very important to society in the future. Many other the campaign, we launched the Vegetable Intake Promotion companies have already announced various measures focused on Project through collaboration with a number of companies and “food & health,” indicating a large number of entrants from differ-groups. By increasing information dissemination from the project, ent industries. The competition environment has heated up to say we will vitalize activities to the point of making them a social the least. Nevertheless, our commitment to always be chosen by movement, increasing people’s desire to eat more vegetables.customers and as a result achieve sustainable growth forms the foundation of the third Mid-Term Management Plan. The basic strategy of the third Mid-Term Management Plan involves taking the following four actions and organically linking them in an effort to achieve sustainable growth.1 Promote behavioral change in terms of vegetable intake2 Change to fan-based marketingWe will build strong relationships with customers so that they are drawn to our products even before they see them in-store, by fos-tering fans who identify with our corporate activities including ini-tiatives in food education and for the environment, such as the Let’s Eat Vegetables Campaign, our solid partnerships with vege-table producers, and regional revitalization efforts through Our company-wide initiative to increase vegetable consumption Kagome Yasai Seikatsu Farm.fan-based marketing,” we will work to review our production Therefore, we will work to address the issues of maintaining and levels forms the heart of our growth strategies aimed at 2025.  Toward this end, we will transform from our conventional tran-system and profit structure to achieve sustained revenue growth improving our ability to procure raw ingredients domestically, This initiative directly contributes to resolving the social issue of sient advertising strategy to promote product purchases to stock-of around 2% per year.diversifying our global procurement bases, making capital invest-“longer, healthier lives” and leads to Kagome’s growth by growing type communication that sustains and expands relationships.  As for inorganic growth, the key points to our efforts will be ments in production for improved environmental performance, demand for vegetable beverages. The key point in increasing veg-Using an integrated approach to marketing that links farming, exploring opportunities overseas and in open innovation. As and building a system to reduce logistics costs. Growing revenue etable consumption levels is to foster the desire to eat lots of veg-health and living, we will establish a differentiated brand position Japan’s food market contracts, overseas growth will be extremely of existing businesses in a stable manner through these measures etables among a large number of customers. However, making in the domain of “food & health.”important. As a top priority issue, we plan to explore business will make it possible to tackle the challenges of new businesses.concrete changes in vegetable consumption behavior is no simple 3 Pursue both organic and inorganic growthWe will pursue sustainable growth from the two angles of stable 4 Strengthen the Group’s management foundation and foster a culture for tackling challengesorganic growth of existing businesses and inorganic growth by The key point in strengthening the Group’s management founda-acquiring new resources from M&A and other means.tion will be continuous efforts to bolster the value chain. Currently,  Regarding organic growth, in addition to actions to “promote costs related to procurement and production are on the rise and behavioral change in terms of vegetable intake” and “change to there are growing procurement risks due to climate change. opportunities targeting the United States market, which continues  In order to create innovation and generate growth, it is vital that to see population growth and has solid social infrastructure we have a workplace environment where our workforce can take already in place. In order to make decisions in a timely and expe-the initiative in tackling new challenges. This requires psychologi-dited manner, we have established The US Growth Strategy cal safety where a person can freely speak their mind and convey Department, reporting directly to the President, which has already their thoughts to others within their organization or team. commenced activities.Organizations and teams where employees can share their frank  Open innovation is another area we will actively promote in opinions and ideas together will increase motivation and generate order to accelerate inorganic growth. By combining our knowledge much in the way of innovation. This concept has yet to penetrate with that of not only food manufacturers but also companies from deeply into the company, but through 360-degree feedback to different industries along with universities and other research management and efforts to strengthen management mindful of institutions, we will step up our activities to identify areas of new diversity and inclusion, we will increase psychological safety in growth potential.terms of both internal systems and mechanisms, fostering a cul- Additionally, we will aim to gain new areas of earnings by organ-ture that embraces challenges in the process.ically and inorganically looking toward future growth drivers of plant-based foods, vegetable soups that contribute to vegetable consumption, and direct to consumer (DTC) services. The Business Development Office, established in 2020, will spearhead discussions on various potential M&A deals in these domains.89KAGOME INTEGRATED REPORT 2022KAGOME INTEGRATED REPORT 2022Pursuing proactive growth investments namely, “longer, healthier lives,” “agricultural development and by internal and external directors to implement and support our  The ongoing COVID-19 pandemic has greatly transformed our regional revitalization” and “global food problems.” Resolving these businesses aimed at what Kagome strives for by 2025. With this way of life, including the way we work and live and our outlooks. I mindful of shareholders’ equity ratio*in mind, this integrated report contains a skills map of directors.believe that the essence of this change can best be described by Achieving sustainable growth by har-nessing our strengths to implement the third Mid-Term Management PlanKagome’s greatest strength is the trust placed in our brands nur-tured over many years. As our corporate philosophy states, we have engaged in product development and business creation uti-lizing nature’s bounty that is vegetables and fruits, starting from tomatoes. In this process, we have worked on raw ingredient cre-ation alongside producers, customer-oriented product develop-ment, and exchanging views with individual shareholders. The Kagome brand is formed through the mixing and combination of these efforts. This represents our unique approach to forming value from agriculture and linking this value to customers’ health. The further refinement of this strength will play a key role in our achievement of sustainable growth.the word “acceleration.” The speed of societal change has been accelerated by the pandemic, which requires action much quicker than before. In the third Mid-Term Management Plan, the Kagome Group’s mission of contributing to society by providing solutions to social issues through food remains unchanged. We will trans-form into a company capable of sustainable growth with a sense of speed while being fully mindful of this mission. We have received severe but warm encouragement from stake-holders in response to the current situation lacking concrete growth. To live up to these expectations, we will implement the growth strategies outlined in the third Mid-Term Management Plan without fail. I promise to further enhance Kagome’s corporate value by achieving what Kagome strives for by 2025. Toward this end, I ask for your continued support as we move forward.March 2022Satoshi YamaguchiPresident & Representative DirectorTOP MESSAGEissues will contribute to the realization of a sustainable society and they represent a business opportunity that can lead to Kagome’s sustainable growth. For this reason, balancing these The third Mid-Term Management Plan retains the two goals of “To themes formed the core of our medium-term business activities.become a strong company capable of sustainable growth, using  As for “global food problems,” given the increasing severity of food as a means of resolving social issues” and “Transforming climate change and growing demands placed on companies to from a tomato company into a vegetable company” by 2025. address it, we evolved this issue into “sustainable global environ-However, to make the achievement level of these goals easier to ment” from the third Mid-Term Management Plan so that our visualize, we have decided to establish Key Goal Indicators (KGI) efforts are broader in nature and possess a greater sense of and Key Performance Indicators (KPI) for this plan.urgency. As part of this, we changed our CO2 reduction target to  The KGI of “become a strong company capable of sustainable commit to the science-based target of 1.5 degrees discussed at growth” involves achieving a sales growth rate of 2% or higher COP26 in 2021. In response to this target, we have formulated a over the next four years to grow the top line every year and achiev-roadmap up to 2030 as our CO2 reduction project and will achieve ing a core operating income margin of 7% or higher in 2025. the milestones by actively investing in the environment from a Additionally, the KGI of “transforming into a vegetable company” long-term perspective.will involve attaining the earnings target for 2025 with the KPI of  The Kagome Group’s sustainability is defined as our business revenue growth compared to FY2021 of business domains that activities seeking “to become a strong company capable of sustain-contribute to increased vegetable consumption. Specifically, this able growth, using food as a means of resolving social issues,” which indicator will measure whether we have increased revenue of the includes our response to the environment. In recent years, a compa-four business domains of vegetable beverages, side dishes and ny’s sustainability initiatives have become an important factor behind processing, vegetable soups, and plant-based products and a customer’s choice of brands. Going forward, we will actively dis-whether we are fostering new growth pillars.seminate details of our activities using various media in an effort to  As a prerequisite for achieving this KGI and KPI, we will emphasize in establish a positive view of our philosophy and initiatives.particular maintaining a shareholders’ equity ratio* of 50% or higher. While further details will be provided in the CFO and CRO message, we will make investments in line with the size of inorganic growth while retaining our current credit rating of A and maintaining a sound share-holders’ equity ratio* of 50%. If we can maintain our shareholders’ equity ratio* at 50% or higher and achieving inorganic growth of 2% per year, we will be able to secure the money needed to fund investments Strengthening governance within the Kagome Groupin our targeted inorganic growth in line with our capacity for borrow-Kagome’s approach to corporate governance has involved achiev-ings. Since the perspective of whether we are growing efficiently with ing “corporate openness” described in its corporate philosophy. invested capital will become important, we established ROIC as an Promoting fair and transparent corporate activities by embracing important indicator to increase capital efficiency starting in 2021 and we individuals’ uniqueness and skills forms the basis of these efforts.are now implementing a number of measures to further increase this. We have also put into place a number of forms and mechanisms * Equity attributable to shareholders of the parent to total assetsThe Kagome Group’s sustainability defined by solutions to social issues through our businessfor strengthening corporate governance; namely, increasing the ratio of external directors, establishing the Remuneration and Nomination Advisory Committee, promoting activities of the Audit & Supervisory Committee, and separating management and supervi-sion functions using the executive officer system. In the future it will be important to further increase and evolve the effectiveness of our governance. We intend to carry out a number of initiatives and increase discussions between directors aimed at energizing the Board of Directors. As for securing the diversity of directors, we When formulating the first Mid-Term Management Plan in 2015, have begun backcasting from our ideal vision to review our require-we came up with three social issues to resolve through food; ments for appointment of directors by exploring the skills needed 1011KAGOME INTEGRATED REPORT 2022KAGOME INTEGRATED REPORT 2022Kagome’s Value CreationKagome’s Value CreationGeneral Business ConditionsKagome’s Founder Ichitaro Kanie took the tomato, which at the time did not sell at all because people disliked the raw smell and deep red color, and, after much trial and error, processed them into tomato sauce to start a processed food business. Today, Kagome contributes to people’s “food & health” by delivering not only tomato products, but also products made from carrots and other vegetables in various forms.Segment composition (FY2021) Domestic Processed Food Business ( Domestic Agri-Business  International Business  Other Businesses Beverages,  Direct Marketing,  Food – Other)RevenueCore operating incomeDomestic Processed Food Business pp.42–43Engages in the manufacturing and sales of beverages, condiments, products for direct marketing, gift products and others.Domestic Agri-Business pp.44–45Engages in the production and sales of fresh tomatoes and mesclun greens, etcInternational Business pp.46–47Engages in a broad range of opera-tions from seed development and farming to product development, processing, and sales.39.8%7.1%25.2%5.0%22.4%50.7%9.0%19.8%2.0%18.1%0.5%0.4%12KAGOME INTEGRATED REPORT 2022Revenue136,729 million yen(FY2021)Beverages 75,480 million yenDirect Marketing 13,518 million yenFood – Other 47,730 million yenCore operating income11,231 million yen(FY2021)Beverages 7,165 million yenDirect Marketing 1,272 million yenFood – Other 2,793 million yenRevenue9,537 million yen(FY2021)Core operating income286 million yen(FY2021)Revenue42,447 million yen(FY2021)Core operating income2,556 million yen(FY2021)* Figures after eliminations and adjustments between segmentsTotal revenueTotal core operating income189,652 million yen14,138 million yenTransitions in revenue segment composition85.8% (FY2011) 72.1%(FY2021)Trends in revenue and core operating income164,321154,506153,469150,0009,9308,984114,476140,526146,913157,642157,72512,80310,700132,914132,485134,495136,7298,14311,03011,17811,2166,3594,5925,185(million yen)16,00012,00011,2318,0004,0000201120122013201420152016201720182018201920202021(FY)0JGAAPIFRS Net sales/Revenue (left axis)  Operating income/Core operating income (right axis)Transitions in revenue segment composition 5.0%4.2% (FY2011)(FY2021)Trends in revenue and core operating income10,0007,6359,6838,9318066737,49386273210,98211,48711,40911,46411,1699,56710,189 9,537(million yen)1,2008004000272286–5,000201120122013201420152016201720182018201920202021(FY)–400–70–10–161–97–236–225JGAAPIFRS Net sales/Revenue (left axis)  Operating income/Core operating income (right axis)(million yen) 200,000100,00050,000(million yen) 15,0005,0000Transitions in revenue segment composition 22.4%8.9% (FY2011)(FY2021)Trends in revenue and core operating income(million yen) 60,00045,00030,00015,000035,93328,08321,14016,018–1,824–656–683–82842,62442,73544,13639,55839,30737,86137,57242,4471,250203837336523752178(million yen)2,5564,0008,0006,0002,0000–15,000201120122013201420152016201720182018201920202021(FY)–2,000JGAAPIFRS Net sales/Revenue (left axis)  Operating income/Core operating income (right axis)* Figures after eliminations and adjustments of revenue between segments* FY2014 represents the nine-month period from April 1, 2014 to December 31, 2014 following change to the Company’s business year.* Kagome has adopted IFRS since FY2019. For reference, figures in conformity with IFRS are also included for FY2018.KAGOME INTEGRATED REPORT 2022131899 to 1900sStart of tomato cultivation and processing1960s to 1970sEstablishment of the Kagome brand1980s to 1990sDiversification and strengthening of procurement base2000sStrengthening governance and sustainable growthPOINTPOINT Cultivating new agriculture Collaboration and mutual support with partners Creation of new values Going from a local manufacturer to a national manufacturing companyPOINT Creation of global network Creation of market for vegetable beveragesPOINT Strengthening of corporate governance Achieving sustainable growth by resolving social issuesKagome’s Value CreationHistory of the Kagome GroupThe history of the Kagome Group dates back to when Kagome’s Founder Ichitaro Kanie first encountered a tomato sprout. Kagome tackled the challenge of cultivating Western vegetables considered uncommon at the time with a pioneering spirit, tapping into a new form of agriculture. Since then, Kagome has worked in collaboration and with mutual support from its business partners to resolve social problems through food by providing the world with products that apply nature’s bless-ings. We will continue striving to be a strong company capable of sustainable growth by increasing vegetable consumption and promoting people’s health and agriculture development.History of transformationKagome’s Founder Ichitaro Kanie took up the challenge of cultivating Western vegetables as a new form of agriculture, and turned his endeavor into a busi-ness of manufacturing tomato sauce while refining Kagome’s cultivation tech-nology and processing techniques. Kagome’s contract farming system not only made stable procurement possible, but also achieved symbiosis with partners, including farmers responsible for tomato cultivation.Kagome has created new added value through its technological advancements, starting with its release of the world’s first tomato ketchup in a plastic container back in 1966. Kagome changed its company name from Aichi Tomato Co., Ltd. to Kagome Co., Ltd in 1963. Kagome has created new added value through its technological advancements, starting with its release of the world’s first tomato ketchup in a plastic container back in 1966. In the late 1970s, Japan experienced a tomato juice boom, with tomato juice becoming entrenched as a health drink. Kagome established sales bases throughout Japan during this time, which also marked the period of an established Kagome brand.Strengthen Business ModelSales and creating demand1930sPromoted popularization of Western food menus by disseminating information on usage of tomato ketchup and Worcestershire sauce1966: Promoted popularization of Western food menus at home through the spread of ketchup in a plastic bottle1906Established a factory in Nishiyashiki, Araomachi, Tokai City, Aichi Prefecture, and started full-scale production of tomato sauce1908: Began manufacturing of tomato ketchup and Worcestershire sauce1967: Established Taiwan Kagome Co., Ltd. marking the first overseas expansion1903Started manufacturing of tomato sauce (current tomato purée)1960s: Started manufacturing and import of tomato paste in Taiwan1903Launched sales of tomato sauce1933: Launched sales of tomato juice1966: Launched sales of world’s first tomato ketchup in a plastic containerProducing seeds and nursery stock, and cultivation1906Kagome’s Founder Ichitaro Kanie began the first contracted cultivation by outsourcing tomato cultivation to his relatives1974: Switched to 100% no-stake cultivation of processing tomatoesAround 1962Established a research institute involved in basic research, containers, and manufacturing processing1970: Developed Kagome 70, a tomato variety for juicingProductionProcurement & primary processingProduct developmentResearch14Kagome’s Value CreationKagome’s accumulated strengthsAbility to provide a diverse variety of vegetables Volume of green and yellow vegetables supplied through Kagome’s products: 604,000 tons(Equivalent to 17.9% of green and yellow vegetable consumption volume in Japan)Sources: VEGE-DAS (Kagome’s vegetable supply volume calculation system), Estimated values for 2020 from “Food balance sheet,” Ministry of Agriculture, Forestry and Fisheries (MAFF).Innovation Capability Annual number of patent applications*: 42applications related to new businesses: 13 (31%)Among the above, number of patent * Patent applications from January 1 to December 31, 2021Annual vegetable procurement volume: over 600,000 tonsProcurement bases: 154 bases (actual results in FY2020)Brand power Market share for vegetable beverages: 58.4%Source: INTAGE Inc. (SRI +) for the period of January-December 2021; Unit: market share valueBusiness types: supermarkets, convenience stores, drug stores, home improvement storesIn the 1980s, Kagome underwent product diversification and planned a growth strategy that did not rely on tomatoes. In the 1990s, due to the popularity of Carrot 100 and Yasai Seikatsu 100, carrots became another core ingredient next to tomatoes as a vegetable. In addition, a market for vegetable beverages was created with vegetable drinks established as a new way of consuming vegetables. Following growth, the overseas procurement base was strengthened with the increased tomato procurement in Turkey and expanded procurement source for carrots as raw ingredients.In the 2000s, we eliminated cross-shareholdings with financial institutions, and promoted the Kagome Fan shareholders program while strengthened our corporate governance system. In 2016, we established the Vision and what Kagome strives for by 2025 aimed at sustainable growth and resolving social issues. We will continue striving to be a strong company capable of sustainable growth by promoting people’s health and agriculture development and conscious of the global environment.Since 1990: Focused on the nutrition of green and yellow vegetables necessary for lifestyle with a shortage in vegetable intake, and promoted the health values of tomatoes and vegetables1988: Launched Overseas Institutional & Industrial Business Division Established US subsidiary Kagome USA, Inc.1982: Practical application of tomato juice concentration using the world’s first RO concentration technology1993: Invested in Tat in Turkey Completion of tomatoes canning line1992: Launched sales of Kagome Carrot 1001995: Launched sales of Yasai Seikatsu 1001987: Established Tat Tohumculuk A.S. in Turkey and began cultivation of processing tomatoes1999: Established the first large glass greenhouse in Ibaraki PrefectureAround 1989: Began functionality research of tomatoes2020: Launched a variety of initiatives to promote interest in vegetable consumption with the Let’s Eat Vegetables Campaign2003: Established Vegitalia S.p.A. in Italy, and began import of frozen grilled vegetables2003: Began import of diced tomatoes and whole tomatoes from a major tomato processing manufacturer (southern Italy)2001: Launched sales of fresh tomatoes (Kokumi Tomato)2004: Launched sales of Yasai Ichinichi Kore Ippon2006: Launched sales of Plant-based lactic acid Labre2014: Launched sales of Mesclun greens2015: Began test cultivation in western Africa2004: Began research on plant-based lactic acid bacteria2013: Acquired United Genetics, USA2016: Established Kagome Agri-Business Research and Development Center in Portugal15KAGOME INTEGRATED REPORT 2022KAGOME INTEGRATED REPORT 2022Kagome’s Value CreationKagome’s Value Creation ProcessWe take consistent action as an organization by positioning our corporate philosophy as Kagome’s unwavering values and Brand Statement as our promise to society and our customers at the foundation of our management. By predicting envi-ronmental changes and utilizing management capital that supports our growth, we are developing our value chain founded in agriculture through collaboration with various partners. Today, we are providing products and services that integrate agriculture with health and everyday living via our three seg-ments of Domestic Processed Food Business, Domestic Agri-Business, and International Business, as well as the founda-tion for value creation that supports these businesses. We strive to address the three social issues of longer, healthier lives, agricultural development and regional revitalization, and sustainable global environment through our businesses, and become a strong company capable of continuous growth to create social and economic values.Management capital that supports growth and changes in social environment (INPUT)Business model pp.24–25Business activities (OUTPUT)Future aimed for, value offeredManagement capital that supports growth pp.18–23Health, agriculture, and safety research that creates new valuesIntellectual capitalWide range of domestic and global procurement networkSocial and relationship capital Natural capitalAbility to provide a diverse variety of vegetablesIntellectual capital Manufactured capital Social and relationship capitalPower of brand known for safety and securityIntellectual capitalFinancial platform that supports businessesFinancial capitalDiverse human resources with aspiration for advancementHuman capitalChanges in social environmentEnvironmental forecastRisk awarenessGlobal issuesD i verse partnersV a l u e chainR e searche r sCusto mg de m a n dales andatinSercLocal communities, NPOProductionBusineProgressing the value chain founded in agriculture through collaboration with various partnersProcuremen t & primary proces s i n gss partners such as suppliers and d i s tsi b u t o rrResearch institutesProandud ncinursger sye estods ckseinapmoce ulturntemProduct developC ontract farmers, agric2022–20252022–2025Third Mid-Term Management PlanMateriality pp.26–35Products and services that integrate agri-culture with health and everyday livingDomestic Processed Food Business pp.42–43Domestic Agri-Business pp.44–45 International Business pp.46–47Strengthen foundation for value creation Sustainable global environment Product safety and security Establishing a Sustainable Supply Chain Respecting Diversity and Expanding Human Capital Strengthen corporate governanceValue offeredSocial values pp.2–3Longer, healthier livesAgricultural development and regional revitalizationSustainable global environmentEconomic valuesAchieve continuous growthCorporate PhilosophyAppreciationNatureCorporate OpennessBrand StatementTrue to Nature, the Flavor of Kagome16KAGOME INTEGRATED REPORT 2022KAGOME INTEGRATED REPORT 202217Kagome’s Value CreationKagome’s Value CreationManagement Capital Supporting GrowthManagement Capital Supporting GrowthHealth, agriculture, and safety research that creates new valueWide range of domestic and global procurement networkWith the goal of resolving social issues using the power of vegetables, the Innovation Division boldly takes on research Kagome has established an expansive domestic and global procurement network to stably provide safe and secure products. challenges related to health, agriculture and safety and contributes to Kagome Group’s sustainable growth by linking In addition to primary processing Group companies that manufacture and sell processed agricultural products, such as pastes, research results to Kagome’s businesses.we also procure from overseas agricultural processing companies (suppliers). Kagome strives to improve procurement quality by having Kagome employees visit each base to ensure the quality management status from cultivation to manufacturing.Research areas at the Innovation DivisionHealth researchAgricultural researchSafety researchWe are conducting social implementation research for a system that will lead to behavioral modification for vegetable intake and health information dissemi-nation with a focus on functionality research on green and yellow vegetables. We are actively pro-moting open research and incorporating partner-ships with the faculty of medicine at universities and co-operative research among industry, aca-demia and government.We are conducting research using the genetic infor-mation of approximately 7,500 varieties of tomatoes to develop new breeds and cultivation technology for processing tomatoes that are resistant to cli-mate change and pests, and fresh tomatoes and gardening tomatoes in line with market needs. In addition to conventional methods, we are taking on advanced technology development and utilization for smart agriculture and utilizing genetic big data.We are strengthening our basic technologies for assuring safety throughout the supply chain starting in the fields, including conducting activities to pre-dict food safety risks, acquiring advanced analysis and evaluation technology, and conducting raw material safety assessments.Protection and use of intellectual propertyTo maintain continuous competitiveness, we are working to strengthen our intellectual property foundation (acquisition, protection, and preven-tion of obstruction and litigation) by engaging in invention and discovery based on in-house R&D as well as periodical searches of other compa-nies’ patents. We also launched initiatives related to the effective use of our retained intellectual properties outside the company.Main initiativesMaintain competitive advantage using patent of tomato juice and tomato ketchupPromote establishment of competitive edge with the Veggie Check® patentEnhance agricultural work effi-ciency and income from technol-ogy usage fee with the patent on tomato harvesting machineExamples of open innovation initiativesExample 1Example 2Sodium-to-potassium ratio (Na/K ratio) as a new indicator for dining and behavior change Initiative to promote Na/K together with Tohoku University (COI Tohoku Site/Tohoku Medical Megabank Organization)While excess salt consumption is a known to cause hypertension, consuming large amount of potassium in fruits and vegetables is known to lower blood pressure. Kagome is working in collaboration with Tohoku University to pro-mote the sodium-to-potassium ratio (Na/K ratio), which indicates the con-sumption balance of salt and vegetables, and a mechanism that changes eating habits based on this index. We have created Na/K Map®* which displays various menu items with the vertical axis indicating the amount of sodium and the horizontal axis indicating the amount of potassium. By making it visually easy to understand, we are supporting the change of eating habits. The Na/K initiative is adopted by the Ministry of Health, Labor and Welfare for large-scale demonstration project, in which, Kagome is also participating.Developing a contaminant detection technology for processed tomatoesWe began to experiment on detecting contaminants from tomatoes using AI since 2018. We developed a system of removing contaminants using AI together with YE DIGITAL Corporation, known for its strength in AI-image screening service, and Suematsu Kyuki Co., Ltd., with track record in building systems using robotic technology, and introduced this technology to the Ibaraki Plant. In this equipment, AI detects contaminants from continu-ous images of diced tomatoes moving on a conveyor belt and removes them with a robot. This tech-nology can ensure product safety and peace of mind as well as address the challenge of labor shortages.Contaminant removal system introduced at the Ibaraki Plant* Na/K Map® is a registered trade mark of Tohoku University and Kagome, and both have jointly applied for a patent.Global network–origins of main raw ingredientsNumber of procurement sites: 154 locations (FY2020 results)Spain Tomatoes ApplesPortugal TomatoesFrance CarrotsGermany ApplesAustria ApplesPoland ApplesJapan Tomatoes Apples CarrotsUnited States Tomatoes CarrotsTurkey Tomatoes CarrotsKagome Australia Pty Ltd. (KAU) Production and sale of tomato paste, carrot purée, apple purée, etc.Italy Tomatoes Carrots Frozen vegetablesIngomar Packing Company, LLC Production and sale of tomato paste and diced tomatoesHolding da Industria Transformadora do Tomate, SGPS S.A. (HIT) Production and sale of tomato paste, etc.South Africa ApplesAustralia Carrots Tomatoes ApplesRaw ingredients procurementKagome possesses the knowledge and know-how of production, qual-ity, and cost as its business is also involved in cultivation and raw ingredients processing. By clearly stating our expectations for these items, we are able to conduct medium- to long-term business transac-tions at appropriate pricing, and select suppliers with whom we can enhance the quality of products. Also, we have estab-lished the CSR Procurement Policy, aimed at achieving a sustainable society with our suppliers.Chile Tomatoes ApplesNew Zealand Apples CarrotsBrazil OrangesArgentina GrapesDisplay of main procurement items (FY2020 results)Main procurement items and products usedEvery year, we stably procure about 130,000 t* of processed vegetables and fruit products, boasting one of the world’s largest procurement volumes.*Value based on actual weight, not converted to fresh produceProcessed tomato products 77,000 tProcessed carrot products 20,000 tProcessed apple products 19,000 tFrozen vegetables 3,000 tCompiled based on actual results in FY2020Future strengthening measures Further promote the cultivation of T-shaped personnel who can serve as a bridge between research creativity and commercialization. (Active research secondment to universities and other companies, secondment to venture businesses, conduct external consulting, etc.) Strengthen the acquisition, maintenance, value creation, and dissemination of intellectual properties and build barriers to entry through intellectual properties. Developing plant varieties and expanding development sites overseas in response to environmental change in raw ingredient procurement. Strengthen the platform for safety through food safety consulting activities.Future strengthening measures As the costs of raw ingredients continue to rise, we are developing and procuring proprietary raw materials for processed tomato products such as Contribute to domestic agriculture by strengthening procurement of domestic tomatoes and carrots through mechanical harvesting and choosing high concentrate and high lycopene that suppress the cost.the optimal variety. Reduce CO2 emissions in procured products through collaboration with suppliers, and improvement in distribution and containers and packaging.1819KAGOME INTEGRATED REPORT 2022KAGOME INTEGRATED REPORT 2022Kagome’s Value CreationKagome’s Value CreationManagement Capital Supporting GrowthManagement Capital Supporting GrowthAbility to provide a diverse variety of vegetablesProduct development and demand creation capability for vegetablesWe will use a variety of processing methods and product formats to provide a diverse range of vegetables to various markets and increase our supply of vegetables. What is required to achieve this is the ability to develop vegetable-based products and the ability to create demand. We bring new products to the world by refining our wealth of knowledge and technology on veg-etables accumulated to date to create a demand for vegetables and address the issue of vegetable shortage.How to supply vegetables Ingredients suppliedDelivery formats Tomatoes Carrots Onions Red bell peppers Mesclun greens Soybeans etc.Product development capability Fresh vegetables Beverages Tomato ketchup, tomato condiments Vegetables (frozen vegetables, purée, vegetable soup stock, etc.) Vegetable soups Supplements etc.Ability to create demand• Products and menu ideas• Sales promotionMarkets Home cooking Home meal replacement Eating outProduct development capability of vegetables12Developing products by utilizing the natural food ingredients and emphasis on additive-freeDevelopmental know-how of vegetable beverages accumulated over many years We appreciate the natural flavor and nutrients in vegetables and fruits, and emphasize food processing without the use of addi-tives as much as possible. We create a target flavor or property using our proprietary vegetable ingredients, including the best combination of vegetables and fruits, and pulp of tomatoes and carrots. While vegetables and fruits have slightly different tastes depending on their growth region, we are building a system that quantifies the percentage of vegetables and fruits from which production area should be used for each product and adjust the composition so that the taste remains constant. Previous knowledge and past examples of combination acquired in the development of vegetable drinks in the past, such as pro-cessing techniques and bacteria control methods, are used in the development of new products. We are developing easy to drink beverages by utilizing the pro-duction methods and technology that control the harshness and tartness in vegetables.Example 1Example 2Example 3Tomato juice, Yasai Ichinichi Kore IpponYasai Seikatsu 100 SmoothieYasai Ichinichi Kore Ippon LightTomato juice and Yasai Ichinichi Kore Ippon provide the nutrition and deli-cious taste that come naturally from tomatoes and vege-tables without the use of fragrances or nutritional enhancers.Yasai Seikatsu 100 Smoothie achieves the desired texture, thickness, and ease of drinking by complexly blending vegeta-bles and fruits with dietary fiber derived from food without using thickeners.In order to reduce the amount of sugar in Yasai Ichinichi Kore Ippon Light, vegetables with less sugar contents, such as Chinese cabbage, are used. The Chinese cabbage is treated to suppress its aftertaste, which reduces the peculiar taste and enhances deliciousness.Ability to create demand12The optimal raw ingredients plus production method plus container style suited for the application Kagome’s vegetable food ingredients come in many forms, including puréed vegetables, frozen grilled vegetables, and vegetable stock. Our menu ideas using these ingredients resolve the issues faced by various industries and increase the amount of vegetables supplied. There is a development group dedicated to containers within the Product Development Division, which conducts research special-ized in containers, such as how to improve customer’s ease of use and reduce environmental impact.Provide solutions to customer troubles We are conducting activities to create demand through ideas such as menus and promotions for a variety of distribution chan-nels, including mass retailers, convenience stores, drug stores, co-ops, direct marketing, and food service industry. For customers needing our products for processing, etc. we send both the developer and salesperson on a site visit to hear the customer’s voice firsthand to provide ideas on how to address customer’s challenges (such as menu, way of utilizing our propri-etary food ingredients, and value information).3Contents development and ideas on food & health from registered dietitians Kagome has the Vegetables and Lifestyle: Registered Dietitians Lab, which is staffed by 71 employees with the qualification of registered dietitian. We draw on the knowledge developed through our vegetable research and idea proposal capability developed through communication with customers in developing and suggesting contents related to food & health.Example 1Example 2Example 3Frozen vegetables that address Development of new products that Develop a new container that the issues faced contribute to vegetable consumptionreflects consumers’ feedbackby the food service industryFrozen grilled vegetables and sauteed onion that are picked and processed during their prime contribute to reduced preparation time and food loss.Our vegetable soup devel-oped using Kagome’s proprietary vegetable stock is a future focus product. We are promoting the message that vegeta-bles can be consumed in soups together with our products. Jojuku Sauce was developed following customers’ feed-back and uses a container that is easy to pour, and opens and closes easily for young children to the elderly. Speedy product design derived from a new combination of raw ingredients plus production method plus container style.Future strengthening measures Expand new product domain, such as vegetable soups and plant-based domain. Develop new product commercialization technology and proprietary food ingredients. Cultivate developers who take joy in challenges. Promote a change in vegetable consumption behavior in the consumers with a focus on the Let’s Eat Vegetables Campaign. Foster multi-point contact between consumers and vegetables using digital technology.2021KAGOME INTEGRATED REPORT 2022KAGOME INTEGRATED REPORT 2022Kagome’s Value CreationKagome’s Value CreationManagement Capital Supporting GrowthManagement Capital Supporting GrowthPower of brand known for safety and securityFinancial platform that supports businessesKagome follows the philosophy that fields are the primary production plant and strives to improve the quality To support the sustainable growth of the Kagome Group and be resistant to major environmental changes, of raw materials from the fields and create products with both product safety and peace of mind and flavor stability in the financial platform is important. In the third Mid-Term Management Plan that starts in FY2022, in mind. Moreover, Kagome provides products with zero additive that are good for health, with many we will maintain a credit rating of A (stable) and maintain an equity to total assets of 50% or higher to products acquiring top shares in Japan as well as high ratings in external brand rankings, etc.achieve both a secure financial base and expanded businesses through capital procurement. pp.36–39Products boasting number one shares in JapanIn Japan, we have captured a high market share in many products thanks to our established brand reputation for “safety and peace of mind.”Tomato ketchupMixed vegetable juiceTomato juiceMixed vegetable and fruit juice60.5%64.8%45.0%60.4%Source: INTAGE Inc. SRI+/Period: January through December, 2021/Based on monetary amount geographic area: All of JapanSales settings: Supermarkets, convenience stores, drug stores, home improvement storesBrand Strategy Survey 2021 (Nikkei Research Inc.)Quality with uncompromisable safety: 3rdSense of product quality: 3rdExternal rankings2021 Set Favorability Ranking (Nikkei BP Consulting, Inc.)1st, 3rdSet Favorability/RankMessageCompany nameSet favorability (pt)1234KAGOME True to Nature, the Flavor of Kagome KAGOMESUNTORY Mizu To Ikiru SUNTORYLet’s Eat Vegetables with 60 g to goKagomeSuntoryKagomeDelicious, Fun, and HealthyMorinaga & Co.43.740.240.039.8* The company name and corporate message are shown as a set, while the question “how did you feel about the message this company is sending?” is asked. For each of the five options related to favorability (very favor-able to not at all favorable) is given a weighted value and scored between –100 and 130. Transform into fan-based marketing to increase loyalty of customers who share the values in our brand and cultivate fans. Conduct integrated communication through experience by using facilities such as Kagome Yasai Seikatsu Farm Fujimi and kitchens at each base.Future strengthening measures22Creating a stable financial platformThus far, we have recorded a relatively high level of equity to total assets and maintain an A (stable) credit rating from ratings agencies. In addition, Kagome’s unique shareholder composition with many individual shareholders has led to the establishment of long-term relationship with many Kagome Fan shareholders.Credit Ratings Status (FY2021)Shareholder compositionRating agencyCredit ratingsRating trendsRating and Investment Information, Inc. (R&I)Japan Credit Rating Agency, Ltd. (JCR)AAStableStableEquity to total assets*FY201850.2%FY201953.9%FY202049.3%FY202154.6%* Equity attributable to shareholders of the parent to total assetsNumber of shareholders (as of December 31, 2