Nihon Global Growth Partners Nominates Two Candidates for Toyo Suisan Board

Issues Detailed Presentation on the Need for New Independent Voices in Toyo Suisan Boardroom Following Decade of Poor Capital Allocation Decisions and Resulting Valuation Discount

Believes Incumbent Outside Directors Lack Expertise and Independence Needed to Effectively Oversee the Company

Announces Intention to Vote Against the Appointment of Two Former Presidents to Board So that President Sumimoto Has Clear Leadership Authority

Draft Medium-Term Plan Ignores Important Shareholder Concerns, in NHGGP’s View

Today, Nihon Global Growth Partners Management Inc. (“NHGGP”) announced that it has nominated, via an affiliated fund, two qualified outside directors for election to the Board of Toyo Suisan Kaisha Ltd. (2875.T) (“Toyo Suisan” or the “Company”) at the upcoming Annual General Meeting. The investor group led by NHGGP collectively owns approximately 4% of Toyo Suisan’s common shares.

NHGGP also issued a presentation detailing the case for change at the Board level and the need for new independent directors with expertise aligned with the Company’s needs. The presentation can be viewed here.

Key highlights of the presentation include:

• Change is needed to reverse Toyo Suisan’s decade of poor capital allocation and resulting valuation discount. The Company trades at a persistent 25-40% discount to its peers. NHGGP estimates the Company’s intrinsic value at JPY17,400 – nearly double the current stock price. It is critical that Toyo Suisan exit businesses that do not cover their cost of capital, adopt shareholder return policies aligned with market norms, and return excess cash to shareholders.

• The recently-announced Medium-Term Plan does not take into account shareholder feedback – including the concerns raised in NHGGP’s prior public presentation. It completely ignores the concept of reviewing underperforming non-core business units, provides no guidance as to how part of the Company’s JPY244 billion of cash holdings will be returned to shareholders, and keeps the dividend payout ratio at 30% – well below market.

• President Sumimoto must have clear authority to lead. NHGGP believes that President Sumimoto is a highly capable next-generation executive who is open to shareholder feedback. However, the Board’s unusual decision to allow two former Presidents to remain as Representative Directors is a hindrance, in NHGGP’s view, to President Sumimoto’s ability to lead the Company in a new direction. NHGGP believes these former Presidents remain committed to preserving Toyo Suisan’s low-return conglomerate structure and their continued presence on the Board will prevent strategic and governance reforms.

• The incumbent outside directors do not possess the independence and expertise needed to properly oversee the Company and its strategy. The outside directors lack capital allocation and overseas operating experience and have not shown themselves willing to objectively evaluate the Company’s strategy and protect the best interests of shareholders.

Brian Doyle, Managing Partner of NHGGP, stated: “We are disappointed that Toyo Suisan has not shown greater openness to shareholders’ concerns around the factors that we believe are responsible for the Company’s significant valuation discount. While we were hopeful that more progress could be made, it has become clear that Board change is needed to ensure that shareholders’ views are heard. As we demonstrate in our presentation, it is time for Toyo Suisan to adopt capital allocation and shareholder return policies that are aligned with market norms – and with the will of shareholders as expressed at the 2024 annual general meeting.”

Mr. Doyle continued, “Our two director nominees – Mr. Kotaro Okamura and Mr. Masami Kashiwakura – are fully independent and have extensive leadership, capital allocation, corporate governance, and food industry expertise. We believe that their election as outside directors would fill key gaps in the Board’s composition, help ensure that shareholders’ best interests are protected, and help reverse Toyo Suisan’s valuation discount. We look forward to communicating further with our fellow shareholders in the weeks to come and remain open to ongoing engagement with the Company.”

About NHGGP

Nihon Global Growth Partners Management Inc. (“NHGGP”) is a long-term investor in Japanese listed companies that are growing rapidly in markets outside of Japan. Prior to founding NHGGP in 2018, its principals were involved in managing several private equity funds in Japan beginning in 2004. All of the principals’ prior private equity investments involved Japanese companies where a substantial portion of the growth was in markets outside of Japan. NHGGP manages private investment vehicles including the NHGGP Japan Opportunities Fund L.P., which was launched in 2021.

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