Management Policy・Medium-Term Business Plan

(1) Basic Corporate Management Policy

The Group positions the following three factors as the Group philosophy. According to the Group philosophy, the Group has been striving to expand its business through consistent business activities by clarifying the targets it aims to achieve.

“Our Founding philosophy”
In every happy home throughout Japan you will find the warm flavor of home cooking, House. The Symbol of a Happy Home

“Group philosophy”
Through food, we aim to be a good corporate citizen, connecting and collaborating with people to create smiles in their lives.

“House Ideals (Spirit)”
Consisting of the Company’s motto (Sincerity, Originality and Enthusiasm) and the 10 House Values.

(2) The Company’s Medium- to Long-term Management Strategy and The Issues that The Company Needs to Address

We are addressing the following specific action items to enhance synergies in the Group and to improve corporate value and profitability:

Summary of the medium-term business plan

The Group develops a medium-term business plan every three years that clarifies the direction of each business, and formulates and implements specific action plans in accordance with this plan. The Sixth Medium-term Business plan, which commenced in April 2018, specifies “striving to become a high quality company that provides ‘Healthy Life Through Foods’” as the ideal of the House Foods Group. Not only in terms of business but also in terms of the three responsibilities towards (i) customers, (ii) employees and their families and (iii) society, which form the base of the Group philosophy, the Group is proceeding with the following activities to advance its reform to a high quality company.

(ⅰ) Activities for customers
The Group recognizes that its responsibility is to deliver “Healthy Life Through Foods” to customers through its business. Under the two themes of “creation of innovation in the domestic mature market” and “acceleration of business expansion in the overseas growth market,” we will work on value chain and R&D reforms to increase the ability to create new value by itself.
The Sixth Medium-term Business Plan specifies the following themes by business segment and for new business.

Segment Main themes
Spice/Seasoning/ Processed Food Business Reform of the model to generate revenues – reducing the weighting of the roux business -
Health Food Business Structural reform through the selection and concentration of management resources and the launch of new core business
International Food Business Promotion of both “acceleration of growth” and “securing of revenues” to lead the Group
Restaurant Business Building up the management foundation toward a growth path and evolution to an attractive company
Other Food Related Business Advancement of the platform for distribution for food companies (F-LINE)
Increase of earnings strength, mainly in the salad and prepared food business, and strengthening of the base for the generation of revenues of the trading company business
New Business From the accumulation of tacit knowledge to the acquisition of explicit knowledge (such as the commercialization of onions that do not cause tears)

(ⅱ) Activities for employees and their families
The Group recognizes that its responsibility is to work on the creation of a stage for each person to play an active role by making the best of their individualities, by accepting, making good use of and developing diversity. We will push forward with the “implementation of work style reforms” and the “securing of various human resources and creation of a place/occasion to do a great job” to achieve diversity.

(ⅲ) Activities for the society
The Group recognizes that its responsibility is to contribute to the good health of people and the planet through the food business and achieve a sustainable society. We see CSR (corporate social responsibility) as an acronym for “Creating Smiles and Relationships” and will aim to achieve the “construction of the recycling-oriented model” and “a society of healthy longevity” through our CSR activities.

Business investment plan

During the period of the Sixth Medium-term Business Plan, business investment of 60 billion yen in total is planned: 30 billion yen for investment in the Group’s optimum production system to build up the profit base; 10 billion yen for investment in overseas business growth to stimulate the Group’s growth; and 20 billion yen for investment in other new business.

Corporate Governance

The Company considers a system of internal controls to be a mechanism for strengthening its corporate governance system, embodying its corporate philosophy, and achieving its management goals. We plan to step up the construction and operation of governance systems for risk management, compliance, and other areas from the perspective of Group management, to improve our corporate value, and achieve sustainable development. In terms of corporate bodies, the Company has two Outside Directors and is focusing on reinforcing the supervisory function in relation to the management strategy body. Five audit & supervisory board members, including three outside audit & supervisory board members, inspect the directors’ performance of their duties. Two standing audit & supervisory board members strive to ensure the effectiveness of auditors’ auditing in the Group by concurrently becoming non-standing auditors of major Group companies. In addition, the Company establishes the Compensation Advisory Committee chaired by an Outside Director and of which more than half of the members are Outside Directors and ensures the objectivity and transparency of the procedure for determining the remuneration of directors and audit & supervisory board members.
We plan to make ongoing improvements to our system of internal controls so that it functions effectively for the entire Group.

(3) Target Management Indicators

For the fiscal year ending March 31, 2021 which is the last fiscal year under the Sixth Medium-term Business Plan, the target net sales, operating profit and ROS on a consolidated basis are 310 billion yen, 22 billion yen and 7.1%, respectively.

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