Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

Note: This Summary is a reference for those who would like to review the session or event of theresults briefing held by Pigeon Corporation. Please note this is not the entire text of the conference
but a summary based on our judgment. Forward-looking statements in these materials are basedon management's assumptions and beliefs in light of the information currently available to it andinvolve known and unknown risks, uncertainties and other factors. Such risks, uncertainties andother factors may affect the Company's performance. In the event of discrepancy between theEnglish version and the Japanese version of the summaries, the Japanese-language version shallprevail.

[Date & Time]

Tuesday, May 14, 2024 18:00 – 19:00 JST[Speakers]

3
Seiji Kaneda

Senior Manager, Business Strategy Department

Yasuo Kanatsuka

Manager, Business Strategy Department

Sho Hiratsuka

Associate Manager, Business Strategy Department

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

Hiratsuka: The Q1 consolidated results ended with increased sales but decreased profits. Sales
were JPY23.749 billion, up 0.6% YoY. Gross profit was JPY11.639 billion, up 1.3% YoY.
Operating income, affected by increased labor costs and aggressive promotional expenses in
Mainland China and the Lansinoh business, was JPY2.697 billion, a decrease of 20.8% YoY.
Along with the decrease in operating income, ordinary income and quarterly net income also
concluded below the previous year’s figures.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

Profit and loss by business segment.
In Q1, the Lansinoh business ended with increased sales and profits compared to Q1 of last year.
The China business experienced reduced sales but increased profits, showing a steady recovery
from the rapid deceleration seen in the Q4 of last year. The Japan business also saw reduced sales
but increased profits. The Singapore business ended with both decreased sales and profits.
Further breaking down the Japan business, the baby care segment showed increased sales but
decreased profits, while the health & elder care segment reported increased sales and profits.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

The change in consolidated operating income for Q1.
Thanks to increased sales and an improvement in gross profit margin, gross profit increased by
JPY140 million YoY. However, selling, general, and administrative expenses saw an increase of
JPY850 million due to the impact of foreign exchange rates. With increases in labor costs andaggressive marketing expenditures in the China and Lansinoh businesses, operating income wasJPY2.69 billion, a decrease of JPY710 million YoY.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

Review by business segment.
Starting with the Japan business. Although there was strong performance in both existing and newareas of the baby care segment, overall sales for the Japan business decreased due to sluggish
overseas demand.
In baby care, sales ended up 2% higher YoY. However, due to the effects of ALPS-treated water,
exports and overseas demand, including cross-border e-commerce, were subdued. Core products
like nursing bottles and nipples have seen sales growth. Last year’s new product, “My Bonyu-Jikkan”
has performed well, capturing gift market demand.
Another new product, the “Moisture mist milky lotion”, launched in February, is being heavily
promoted in offline retail spaces, enhancing its visibility. Sales of the electric nasal aspirator,“SHUPOT” is also doing well. In the Japan business, the baby care appliances category is being
expanded as a new area of focus.
The gross profit margin for baby care has worsened by 2.0 percentage points from the previous period
due to the effects of a weaker yen leading to higher costs. In health & elder care, a new product,“Medicated Oral Care Gel Plus” has been on the market since February.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

Regarding inbound tourism in Japan, although the number of foreign visitors is on an increasing trend,
inbound demand for our company has remained sluggish.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

The China business saw a decrease in sales and profits YoY, but Mainland China has shown steadyrecovery from the sharp decline caused by the impact of ALPS-treated water in the previous Q4.
First, sales of Mainland China ended at a 10% decrease YoY, which is almost in line with our internal
forecast.
Amidst some lingering effects from ALPS-treated water, baby skincare continued to struggle, yetsales from nursing bottles and nipples grew by 0.4% YoY. Market share is recovering towards levels
before the release of ALPS-treated water. Additionally, a new product has been launched: a 500ml
sports straw mug for kids.
Marketing activities, which were considerably restricted in the previous Q4, have gradually resumed
from this Q1. Brand exposure and communication have been strengthened mainly online, and GMV
is steadily increasing.
Also, the gross profit margin in the China business improved by 1.7 percentage points YoY due to ahigher sales composition of the nursing bottles and nipples that are most profitable for us.
Regarding sell-out, Q1 ended with a 3% decrease YoY. Breaking it down, e-commerce grew by 5%YoY, while offline decreased by 19%. Growth continues in new channels such as TikTok andPinduoduo. The e-commerce ratio for Q1 was 73%.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

The Singapore business experienced decreased sales and profits due to ongoing shipment
adjustments from the previous year, but the normalization of inventory levels in major countries isnearly complete.
In terms of sales, the Singapore business saw a 7% increase in India, 22% increase in Malaysia, a32% decrease in Indonesia, and a 49% decrease in the Middle East. Sell-out improved in India, SouthAfrica, and Thailand YoY, contributed by growth in nursing bottles and nipples.
The normalization of distribution inventory in key markets is almost complete, with some markets
expected to complete within 1H.
Focusing on core products in the Singapore business, efforts continue to strengthen sales of nursing
bottles, nipples, and baby skincare. In this Q1, Pigeon’s nursing bottles and breastfeeding products
were awarded the “Platinum” at the Supermom Brand Awards 2024. Additionally, the Natural
Botanical Baby skincare line, a focus of the Singapore business, won “Product of the Year” inSingapore, significantly expanding product and brand recognition.
Lastly, the gross profit margin for the Singapore business improved by 0.9 percentage points YoY,
aided by increased factory sales and foreign exchange impacts. This concludes the update on theSingapore business.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

While there was a decrease in North America due to the rebound from exceptional demand last year,
Europe showed growth. Benefiting from the weaker yen and reduced overseas transportation costs,
the business achieved increased sales and profits.
Lansinoh Group’s sales decreased slightly by 0.4% YoY. In North America, sales fell by 0.7% due tothe rebound from last year’s exceptional demand, but in Europe, specifically in Germany, the UK, andFrance, sales grew, driven by nipple cream and postpartum & recovery care products.
As for new products in the Lansinoh business, new model of the hands-free breast pump, ”Discreet
Duo” launched through the DME channel since February. Additionally, postpartum & recovery careproducts, already performing well in North America, are also doing well in the European market.
The gross profit margin for the Lansinoh business improved by 5.0 percentage points YoY due to abetter product mix and reduced maritime transportation costs, which are included in the cost of goods
sold. However, domestic sales logistics costs within the US continue to remain high.
This is summary by the business segment.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

Pages 10 to 12 provide the Q1 sales in local currencies for both Pigeon and Lansinoh brands acrossmajor markets, as well as the e-commerce ratios for key markets.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

At last, extraordinary income and losses for Q1 for your reference.
In Q1, we recorded JPY648 million in extraordinary income due to grants received from local
governments related to the completion of the new Pigeon Home Products factory. Concurrently, we
also recorded an extraordinary loss of JPY648 million due to fixed asset impairment directly
associated with this grant income.
This concludes our overview of the Q1 results. Thank you.

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Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

Questions and Answers*Questions and answers are listed by business category.
Group Consolidated
Q. How much was the impact of FX rates on consolidated results in the Q1?
A. In Q1, the exchange rate had a positive impact of approximately 1.1 billion yen on consolidated
net sales, over 600 million yen on gross profit, and over 200 million yen on ordinary income comparedto the previous year.

Q. How was the sales and profits by consolidated and by business against internal plans?
A. Including the positive impact of FX rates, consolidated net sales and gross profit were slightly
higher than planned. SG&A expenses were lower than planned in Q1, mainly because some sales
promotion expenses in China were carried over to the Q2. Operating income was ahead of plan due
to higher gross profit and the carry-over of some SG&A expenses.
Although we estimated some more yen depreciation when budgeting, the current weaker-thanexpected yen has had a slightly larger impact on COGS and procurement cost increases thanplanned.
By business segment, no business deviated significantly from the internal plan in terms of both sales
and profit. In Japan, sales fell short of plan due to weak exports of “Momo-no-ha Lotion” and otherproducts, which are popular especially in China, but profits were almost in line with plan. In China,
sales were almost in line with the plan, including the positive impact of foreign exchange rates, andprofits were slightly above the plan due to carried over sales promotion expenses (about a low single
digit hundred million yen). In the Singapore business, both sales and operating profit exceeded theplan, mainly due to better-than-planned shipments from the factory to other businesses. In theLansinoh business, both sales and profit exceeded the plan due to the strong sales of breast pumps
and other products as well as the positive impact of FX rates.

Japan BusinessQ. Baby care sales in Q1 increased by 1.8% YoY, is this sustainable?
A. As for the Japan business, export sales (especially of skincare products) declined due to the impactof ALPS treated water, but we recognize that domestic demand for baby care products in Japan has
not declined. While the sales increase in Q1 was due in part to price revisions, we positively evaluate
the fact that sales volume did not decrease significantly even amid two price revisions last year.
Although it will be difficult to achieve significant growth in the Japanese domestic market, we hope to12 / 14

Pigeon Corporation / Summary of the Financial Results Conference Call for Q1 FY Dec. 2024

continue to achieve YoY sales increase sales in Q2 and beyond by strengthening sales activities andfocusing on new products such as nursing bottles and skincare products, as well as baby careappliances which is new area for Japan.

China BusinessQ. 2024 is the Year of the Dragon. Do you expect the number of births will increase?
A. We have heard from China business that they found some local news of an increase in the numberof births in a few local areas but we actually don’t feel the sharp increase of number of births so far.

Q. Do you still see the impact of ALPS treated water in this Q1?
A. While Q1 results were affected mainly by skincare and cross-border e-commerce, we have heardthat local media coverage of ALPS treated water has decreased considerably. Q2 and beyond will
be a key point for recovery, depending on how much resistance to treated water remains in
consumers' minds.

Q. Have you seen any effects from the strengthening of marketing activities from the Q1? Also,
what kind of activities will you carry out from Q2 onward?
A. In the Q4 of the previous year, most of our marketing activities including KOL were severely
restricted due to the impact of the ALPS treated water report. And that made our market share ofnursing bottles temporarily fell below 40%. In this Q1, marketing activities were no longer restricted
and KOL activities have resumed. Q1 sales promotion expenditures were approximately 1.5 times
larger than in the previous year, and measures such as strengthening brand exposure wereimplemented, especially for nursing bottles and nipples. As a result, our market share for nursing
bottles has recovered to over 40%. We will continue to invest in sales channels and social medias toaccelerate the speed of sales recovery in mainland China, including the carry-over of sales promotion
expenses from Q1.

Singapore Business
Q. Which regions were unable to complete the adjustment of distribution inventories in Q1?
A. Indonesia and Middle East. Indonesia was scheduled to be completed in Q1, but it is expected tobe completed by the end of Q2 with a slight delay. In the Middle East, we had originally planned to13 / 14

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complete inventory adjustment during the 1H, but with current sellouts weakening slightly, inventory
adjustment may be delayed to the 2H.

Lansinoh BusinessQ. How do you see growth opportunities for the Lansinoh brand in the Chinese market?
A. Lansinoh's main products include consumables such as nursing pads and breastmilk storage bags.
And the consumables category is facing fierce price competition in the Chinese market. Therefore,
we are strengthening our sales activities while devising various ways to achieve growth centered on
nipple creams and breast pumps, where we can add value as Lansinoh.

Q. Can we expect profitability improvement in the Lansinoh business not only in Q1 but for
the full year?
A. Marine transportation costs are included in COGS and there was a downward trend from Q1 to 4Q
last year, so we expect the effect of cost reductions to diminish each quarter this year.

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