Kirin Holdings Company, Limited (2503) Q2 2026 Earnings Call Transcript

(Note) This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail.

[Q&A Session Minutes] Briefing for Investors and Analysts for Q2 FY2026 Date and Time : August 10, 2026 (Mon), starting at 10:00 a.m. Speakers : Yoshinori Isozaki, Representative Director of the Board, CEO, Takeshi Minakata, Representative Director of the Board, President & COO Shinjiro Akieda, Director of the Board, Senior Executive Officer, CFO Toru Yoshimura, Director of the Board, Senior Executive Officer, President of Health Science Business Division Hidefumi Matsuo, Executive Officer, General Manager of Finance Department [Question and Answer] Q. Please tell us about Jamieson’s specialty supplements. Some ingredients, such as ashwagandha, are subject to different regulations depending on the country. How does KIRIN plan to expand this business? In addition, please explain how the company views profit contribution after taking PPA amortization into account. A. The Jamieson brand offers general health supplements, primarily in Canada. In the United States, youtheory, a specialized supplement brand, offers products that address specific health needs. For example, ashwagandha is positioned for stress care, while turmeric is promoted as addressing health needs such as anti-aging and longevity. After the acquisition, we will allocate the purchase price between amortizable assets, such as sales rights, and goodwill through PPA. As a result, not all of Jamieson's profit will be recognized in full as consolidated profit. I would like to explain the details after closing Q. Is it fair to assume that it will still make a positive contribution to EPS even after amortization? A. We cannot provide precise figures at this time, but based on past cases and other factors, we believe it will make a positive contribution to EPS to a certain extent. Q. For the Health Science business, I assume the 2030 Normalized Operating Profit (NOP) target of JPY 30–35 billion announced at the July Investor Day does not include the Jamieson acquisition, but how much could profit increase if Jamieson were included? How does the company view resetting future targets for the Health Science business? A. The 2030 targets of JPY 300 billion in revenue and JPY 30 billion to JPY 35 billion in NOP are on an organic basis and do not include the impact of this acquisition. Jamieson’s actual results for 2025 were approximately JPY 94.5 billion in revenue and approximately JPY 16.1 billion in adjusted EBIT. On a simple combined basis, revenue for 2030 would be approximately JPY 400 billion and NOP would be approximately JPY 45 billion to JPY 50 billion. Because the 2035 targets of JPY 500 billion in revenue and JPY 75 billion in NOP include inorganic growth, they also include this acquisition. We aim to achieve this target as early as possible. Q. With this acquisition, we expect to record approximately JPY 150 billion to JPY 160 billion in goodwill and other intangible assets, and this scale is not materially different from that of Blackmores. Blackmores' annual PPA amortization is approximately JPY 2 billion; will Jamieson's be at a similar level? Is it reasonable to assume that NOP will increase by approximately JPY 10 billion even after PPA amortization? A. As the transaction has not yet closed, we are unable to comment at this time. Based on past cases, which is generally correct. However, the distribution rights and other assets held by each

company differ, and the amount of PPA amortization also varies depending on the valuation. Jamieson's current EBIT will not simply be added in full, so please allow us a little more time before we can provide details. Q. I believe the acquisition of Jamieson has completed the pieces needed to achieve the 2035 targets, but I understood from this explanation that there may be further acquisition opportunities going forward. What kind of M&A does KIRIN intend to pursue going forward? A. Through this expansion into North America, we have acquired a business foundation that includes brands, organizational capabilities, and talent. At the same time, this is not the end of the journey. North America is the world’s largest health market, and we need to explore the next opportunities to continue growing as a global health science company. The North American market is fragmented, and competition is intense for general products and brands. Even leading companies hold only a 4% to 5% share, making it difficult to win with conventional strategies. It is important to address customers’ individual health needs through specialized offerings such as youtheory. If opportunities arise in specialized areas where KIRIN can leverage its R&D capabilities and proprietary ingredients, we will consider M&A as a means to win in the North American market. Q. As the D/E ratio is expected to exceed 0.8 as a result of this investment, how will KIRIN balance shareholder returns and financial leverage? A. Although the D/E ratio will rise to 0.8–0.9 as a result of this investment, steady operating cash flow generation should place the company in a position to make additional investments over the next two to three years. At the same time, we will maintain this balance by providing additional shareholder returns if it is unable to allocate cash to investments, while also taking into account factors such as the availability of counterparties and internal capabilities, including human resources. Q. With the establishment of KHSI and the planned acquisition of Jamieson, is it correct to understand that KHSI will centrally manage the cash generated by each company, including Blackmores and Jamieson, going forward? Also, China is a market where Blackmores, FANCL, and Jamieson have overlapping existing operations. Does KIRIN plan to roll out all of their respective brands and product portfolios there? Please explain how the company plans to manage its China business. A. Including Blackmores and Jamieson, which we plan to acquire, the global and overseas Health Science business will, in principle, be managed under KHSI. KHSI will therefore be responsible for cash management in principle. Going forward, KHSI will also evaluate M&A opportunities; however, because the Health Science Business Division sits above KHSI, and Kirin Holdings sits above that, decision-making will be conducted under appropriate governance based on the size and nature of each transaction. Cash held in Japan will be managed by the domestic Health Science business. For brand management, the Health Science business will manage brands going forward by category: supplements, skincare, and food and beverage. At the same time, management from a regional perspective—how to develop brands in each market—is also important. Accordingly, while KIRIN will steadily advance PMI at each entity, it will manage the overall business by combining category-based and region-based approaches. With respect to China as well, we plan to manage each company and brand in an integrated manner based on this approach. Rather than developing each brand and product individually and separately, such as Blackmores, FANCL, and Jamieson, we will manage which brands to deploy in which markets and how to deploy them under the global health science business structure centered on KHSI. Q. If KHSI manages this area, is it correct to understand that, in considering future M&A and brand development, the health science business will move closer to a structure in which it manages cash and reinvests it on a standalone basis? A. That understanding is basically correct. Ultimately, the ideal is to operate the health science business as One Global Company, encompassing both Japan and overseas markets. Rather than operating separately by region, we should manage brands and categories optimally on a

global basis and advance the business in the manner presented here. However, because it is difficult to achieve all this at once, we will proceed in phases. First, we will consolidate its overseas businesses under KHSI and steadily advance PMI while establishing management structures based on category, region, and brand. On that basis, we intend to gradually increase the level of integration across the Health Science business. A. As for the right side of the balance sheet, namely financing and capital structure, we will in principle consider these matters on a group-wide basis. On the other hand, KHSI will take the lead in examining operational matters on the left side of the balance sheet, such as business operations and investment targets. KHSI will also play a central role in evaluating M&A opportunities, although decisions will, of course, be made under governance for the Group as a whole. Accordingly, while KHSI plays a central role in business operations, the Kirin Holdings will manage financial discipline and cash allocation. Q. What is the current view on reviewing the business portfolio? A. For the Group as a whole, alcoholic beverages, pharmaceuticals, and Health Science and Non-alcoholic beverages will become the three major pillars in the future. Portfolio management is discussed regularly by the Board of Directors, and this acquisition is an outcome of those discussions. KIRIN will continue discussions on its portfolio, but at this time it considers all existing businesses to be core businesses. Going forward, KIRIN may pursue agile M&A and portfolio reshuffling in response to changes in the business environment and growth opportunities. There is no doubt that this acquisition represents a major step forward, but KIRIN will continue to pursue optimal portfolio management. Q: Segment profit for Kirin Brewery, Kirin Beverage, and Lion remains unchanged for this fiscal year. Please explain the progress to date considering the consumer environment and the situation in the Middle East, as well as the outlook for next fiscal year. Regarding Kirin Beverage, we understand that KIRIN positions it over the medium to long term as a channel for Health Science. However, its core brands, Namacha and Gogo-no-Kocha, appear to have lost momentum, and the business foundation, including sales capabilities, seems to be weakening. Is the company considering a strategic shift going forward? A. Kirin Brewery is steadily building strengths across four categories ahead of the liquor tax revision in October, and progress is on track. However, competition is intense, as all companies are focusing their efforts in these areas. There is no quick fix. The only option is to build a solid product portfolio, and we will focus on that. At Lion, initiatives implemented over the past several years to strengthen brand equity have delivered results, and Revenue Growth Management (RGM) has also become well established. The market environment is not strong enough to support significant growth expectations; however, Lion has continued to increase revenue while gradually expanding market share. A. Namacha has deliberately constrained less profitable products, such as large PET bottles, and is focusing on smaller packaging formats. The new iMUSE product containing LC-Plasma, launched in April, is progressing in line with plan, and products in ultra-small packaging formats are also outperforming the previous year. Going forward, Kirin Beverage plans to further expand its ultra-small packaging lineup, including products for children, while also considering additional health claims. Regarding RGM, Kirin Beverage will increase profit by raising the proportion of higher-priced Health Science beverages. Kirin Beverage is also significantly affected by developments in the Middle East, but it will respond through measures including cost controls. Q. You mentioned that JPY 10 billion has been factored in as the cost impact of the situation in the Middle East. Please explain the breakdown and the impact by business. Also, how should we view this when considering the next fiscal year? A. We will refrain from providing a detailed breakdown of the JPY 10 billion, but it consists largely of three items: aluminum cans, resin used as a raw material for plastic bottles, and fuel costs. Including transportation expenses, higher costs in these areas are the primary factors. By business, the impact is not concentrated on any one specific business, and each operating

company is experiencing an impact of approximately JPY 1 billion to JPY 3 billion. Because each company has different raw material procurement contracts and renewal timings, some impacts will emerge this year, while others will become apparent from next year onward. It is fair to understand that, on a fiscal year basis, these factors are generating cost increases across the Group. For the next fiscal year, it is difficult at this stage to forecast how the current situation in the Middle East and commodity market conditions will evolve. Prices for crude oil, aluminum, resin, and other materials could also reverse going forward, making it difficult to establish precise assumptions at this time. As KIRIN formulates its plan for the next fiscal year and the underlying assumptions become clearer, we will consider appropriate responses, including price revisions and cost improvement measures. Q. In this cost inflation environment, does KIRIN believe it can pass on higher costs through pricing in each region? A. In overseas markets, particularly Australia, a mechanism is functioning to a certain extent whereby wage levels and selling prices rise in line with increases in the CPI. Accordingly, we believe the environment allows for passing on cost increases through pricing within an appropriate range. At the same time, it is necessary to determine the extent of price increases based on the prevailing economic environment and consumer trends at each point in time, and it is not possible to pass on all cost increases in full as they arise. Japan is also gradually moving toward an environment in which price revisions can be implemented, supported by wage growth and the advance of inflation over the past several years. However, consumer purchasing power has recently come under pressure from rising prices, and it is therefore necessary to make careful decisions while closely monitoring social conditions and consumer trends. Q. How does KIRIN assess the performance of its existing Health Science businesses, including Blackmores and FANCL, through the first half, and how does it view growth from next fiscal year onward? A. Overall performance in the first half was solid. Conditions varied somewhat by region for Blackmores. In Australia, first-half performance appeared slightly weak in part due to the sale of the pet business and the scheduled launch of new products in the second half of this fiscal year. In Southeast Asia, growth appeared modest due to foreign exchange impacts, but Blackmores achieved double-digit growth in Indonesia, Thailand, and Malaysia. China also remained solid. FANCL had faced the challenge of strengthening its brand presence in Japan, but from this fiscal year it has implemented marketing that engages closely with customers through skin patch products, and acquisition of new customers at directly operated stores has been steady. KIRIN is making steady progress toward its targets for the next fiscal year and beyond, including its 2035 goals. Q. With Jamieson joining the portfolio, do you expect synergies with Blackmores and FANCL as well? A. Yes. KHSI operates in 20 to 30 countries worldwide and has the capability to address different regulations in each market. With Jamieson joining the portfolio, KHSI can accumulate regulatory expertise and know-how, which should enable it to expand the number of countries in which it operates. In addition, we expect to leverage the brands across the portfolio. Q. I understand that the North American supplements market is fragmented, but in future M&A, which will be the focus: acquiring companies with specialized supplement products that can further expand market share, or acquiring channels? In addition, is there potential for future collaboration with Coke Northeast in the health science domain? A. Rather than managing general products, KIRIN places importance on whether a business has strengths in specialized supplements and technology, whether it can address individual customers’ health challenges, and whether it can leverage KIRIN’s R&D and marketing expertise. It is difficult to compete by pursuing market share or scale. There is also potential to acquire channels, but the top priority is how to achieve high profit margins and respond to individual customer needs. Although there was discussion of collaboration with the North

American beverage business, we will first focus on supplements and create value. Q. What kind of technology is it? Does it involve extracting active ingredients and incorporating them into supplements, or enabling them to be consumed efficiently? A. All of the items you mentioned are possible. When KIRIN launched the Health Science business, it defined health based on immunity as its highest-priority area and has focused on the brain and intestinal areas as the next priorities. KIRIN is testing various hypotheses. For example, in the intestinal area, we see a range of technologies, including technologies specialized in the microbiome and digital algorithms that provide optimal solutions based on the gut microbiome. KIRIN intends to continue broadly exploring technologies and maximize the value of the assets and brands acquired this time. Q. The share price has recently risen to near a record high, but you stated that you are not satisfied. What do you believe is necessary for the share price to surpass its previous all-time high? Also, please discuss any gaps or challenges you have identified through dialogue with investors. A. Through dialogue with investors, I sense that the key issue is not the share price itself, but rather the extent to which investors can place confidence in the future growth story of the Kirin Group that underpins it. Although the current rise in the share price reflects factors such as enhanced shareholder returns, one major driver is the steady growth of the Health Science business, which KIRIN has been developing since 2019. We also believe that investors have gained a certain level of reassurance that the growth story is progressing broadly as envisioned. The key question is whether that momentum can be sustained going forward. The Health Science business's growth scenario toward 2035 remains at the expectation stage. We must demonstrate through results that it can deliver that growth scenario and that its existing businesses, including the Alcohol beverages business, can achieve sustainable growth. As the global business environment becomes more challenging, stakeholders are also watching whether the Kirin Group can continue to create innovation. In the Alcohol Beverages business as well, it is important to determine whether the company can continue to create products with distinctive added value and enhance profitability. Accordingly, we believe that steadily executing the plans set out for each of the Health Science, Alcohol Beverages, and Pharmaceutical businesses and demonstrating results will lead to higher corporate value. Q. Regarding the Health Science business, there is a sense of reassurance that the individual businesses, such as FANCL and Blackmores, are becoming clearer and are being managed effectively. At the same time, each business remains a standalone point, and synergies across the portfolio and a sense of integration as a business entity have yet to become visible. Going forward, when will that overall picture begin to emerge? In addition, while I understand the thinking behind the review of the business portfolio, if confidence in the Health Science business deepens, is there a possibility that the company will move ahead with more decisive business restructuring or asset replacement? A. The Health Science business has built a stronger foundation to compete globally by adding FANCL, Blackmores, and now Jamieson to the technologies and ingredients Kirin has cultivated in-house over many years. However, simply owning these businesses is not enough. Going forward, it is important to bring them together and integrate them as a single Kirin Health Science business. KHSI plays the central role in this effort and aims to deliver each brand to customers in the most appropriate way in each region while creating value across the global business. While it is difficult to specify exactly when these businesses will come together as a cohesive platform, this cannot be achieved overnight. At the same time, KIRIN intends to steadily advance the integration while continuing to build a track record of customer recognition and business results. Currently, we are not assuming any specific business divestitures with respect to its business portfolio. Our priority is to deliver solid results in the Health Science domain and use those results to enhance the value of the Group as a whole.

Q. Is it correct to understand that, ultimately, the only way to drive the share price higher is to demonstrate results, including in the Health Science business? A. That understanding is correct. Of course, growth across the group as a whole, including its existing businesses, is also important. While execution at the front lines is ultimately the most key factor, it is essential to steadily deliver results by rigorously and continuously running the PDCA (Plan–Do–Check–Act) cycle and to demonstrate those results through a proven track record. I believe that building a track record will earn the market's trust, which in turn will lead to higher corporate value. Q. We have been hearing for several years about running the PDCA cycle and seeing initiatives through at the front lines. In that context, where do you believe KIRIN has actually evolved or grown? A. I do not believe we have fully reached the state we are aiming for, but from what I see at the front lines, the pace is increasing. Employees have also become more aligned with the strategy and more aware of their own roles and responsibilities than in the past. In addition, performance has been supported not by a single major initiative, but by the accumulation of improvement activities across many workplaces and numerous small achievements. In dialogues with employees, more people are expressing their views with confidence than they did two years ago. Employees are also now able to share challenges candidly, and I believe the organization has developed a stronger sense of unity and healthier discussion than before. I believe these improvements in organizational capability and execution will lead to sustainable growth going forward.

Q. Is the revised NOP forecast of JPY 253.0 billion overly conservative? Coke Northeast has continued to perform steadily even on a U.S. dollar basis, but the exchange rate assumptions were not revised at the mid-year point. Although the Health Science business is performing steadily, there may be upside potential given that the only revision reflects Blackmores' Australian dollar exchange rate. A. Comparing the second half of the outlook with the second half of the previous year, the forecast indicates a decrease of slightly more than JPY 30 billion. Kirin Brewery benefited by approximately JPY 4 billion in the second half of last year due to the impact of a competitor's cyberattack, and in the current fiscal year it has also increased marketing expenses in the second half in anticipation of the liquor tax revision. For Kyowa Kirin, first-half results were also affected by temporary demand in North America ahead of the price increase for Crysvita, as well as the one-time recognition of the upfront payment for rocatinlimab. In the second half, the outlook is not particularly conservative, given an approximately JPY 4.0 billion to JPY 5.0 billion negative impact from the sales of Four Roses and Kyowa Pharma Chemical, that nearly all of the JPY 10.0 billion impact from the situation in the Middle East is expected to arise in the second half, and that marketing investments in the Health Science business will also be concentrated in the second half. The USD exchange rate assumption remains unchanged from JPY 150 at the beginning of the year, and while exchange rate movements are difficult to predict, this assumption may be somewhat conservative.

Q: Please explain why Jamieson has maintained the leading market share in Canada and achieved a high growth rate in China. FANCL previously operated the boscia business in North America. Please explain its future skincare strategy in North America. A. Jamieson has grown in Canada for more than 100 years since its founding in 1922 through products that support daily health, including vitamins. KIRIN focuses on the power of innovation and science. Its strengths include enhancing brand value by communicating with customers through easy-to-take tablets, technologies that concentrate product content, and products such

as vitamins and immune care offerings. In Canada, the brand has delivered strong results, with 76% brand awareness and 40% household penetration, demonstrating both brand strength and deep customer reach. In China, 90% of sales grow through cross-border e-commerce, and half of that growth comes from e-commerce on the Douyin (TikTok) platform. In the China business, KIRIN aims to achieve growth while balancing various risks. FANCL has already withdrawn from the boscia business. In North America, we will initially focus on supplements, while it will also consider opportunities in skincare if customer conditions indicate a clear opportunity to win. -End-