Financial Results of Q3/December 2021
Supporting document(Securities Code: 7956)
November 4, 2021

Results – Consolidated PL (Q3 YTD) (under New Standard)(Unit: Million JPY)

Q3 / Dec. 2020
Actual% of Total

Q3 / Dec. 2021
Actual% of Total

YoY Change

Net Sales

70,127100.0%

69,426100.0%

99.0%

Cost of Sales

36,58052.2%

36,247

52.2%

99.1%

Gross Profit

33,54747.8%

33,179

47.8%

98.9%

SG&A Expenses

21,06530.0%

22,73532.7%

107.9%

Operating Income

12,481

17.8%

10,444

15.0%

83.7%

Ordinary Income

13,56919.4%

11,774

17.0%

86.8%

Net Income Attributable toOwners of Parent

9,365

13.4%

7,185

10.3%

76.7%

(Results of FY12/2020 under the new revenue recognition standard was estimated by Pigeon for your reference.)©Pigeon Corporation All Rights Reserved. │ Strictly Confidential[Currency rates]
Dec. 2021 Results: US$1 = JPY 108.54 / CNY 1 = JPY 16.77
Dec. 2020 Results: US$1 = JPY 107.55 / CNY 1 = JPY 15.37

2

Results – by Business Segment (Q3 YTD) (under New Standard)(Unit: Million JPY)

Q3 / Dec. 2020

Q3 / Dec. 2021

Actual% of Total

Gross
MarginSegment
ProfitActual% of Total

YoY
ChangeGross
MarginSegment
ProfitConsolidated
Net Sales

70,127100.0%

47.8%

12,481

69,426100.0%

99.0%

47.8%

10,444

Japan Business

31,214

44.5%

34.1%

2,267

29,267

42.2%

93.8%

34.6%

1,686

China Business

26,324

37.5%

52.9%

9,729

27,64039.8%

105.0%

51.9%

9,161

9,617

13.7%

39.4%

1,745

9,170

13.2%

95.4%

38.7%

1,354

9,498

13.5%

56.1%

1,392

9,562

13.8%

100.7%

54.4%

718(6,527)(9.3%)―(6,214)( 9.0%)－－Singapore
Business
LansinohBusiness

Elimination ofinter-segment
transactions(Results of FY12/2020 under the new revenue recognition standard was estimated by Pigeon for your reference.)©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

3

YoY Change Factors of Consolidated Operating Income (Q3 YTD)
(under New Standard)■ Positive factor

12.4(0.33)(0.96)(0.20)■ Negative factor(0.17)(Unit: Billion JPY)

+0.14

10.4

(0.48)In addition to regular sales promotion, new product launches andsales expansion caused the increase.
・New nursing bottle model (China) ・Bouncer (Japan)
・New skincare (Singapore)
・Pre- and post-partum careproducts (Lansinoh)

Operating Decrease inincome for gross profit
Q3 FY2020
caused by(YTD)
lower revenue©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Sales Operating
Development
Warehousing
Personnel
income inthe previous year
promotion/expenses
expenses,expensesadvert.
etc.
expenses

Other
expenses

Operatingincome forQ3 FY2021(YTD)

4

Summary of Results by Business Segment (Q3 YTD)Net Sales: Sell-in (at local currency)

Net sales declined due to easing special demand driven by the COVID-19
pandemic and the 5th wave of COVID-19 since JulyJapanBusiness••••

Net sales in Domestic Baby & Mother Care Business declined by 5% year on year. In addition to easing special
demand for consumables such as bottom wipes driven by the COVID-19, the 5th wave of COVID-19 caused people
to stay at home, resulting in a decrease in purchasing frequency.
Sales of UV care products and baby strollers decreased due to people staying at home and unseasonable weather.
On the other hand, sales of baby food, baby dental care products, and breast pumps increased year on year due tostay-at-home consumption.
Health and Elder Care Business experienced sales decline by 15% year on year because of the streamlining
unprofitable products.
Gross margin improved by +0.5 points due to a decrease in the composition of consumables and an improved
margin of health and elder care product mix.

In Q3, online sales recovered to the same level as the previous fiscal year
on a YTD basis by focusing on sell-out increase•China •Business•••Sell-in results in mainland China decreased by 3% year on year. Temporarily suppressed sell-in and focused on sell-out
increase. Online sell-out results for Q3 alone increased year on year.
Sales of skincare products increased by 18% year on year thanks to contribution of new products including Avocado
series and Yuzu series.
E-commerce sales accounts for 67% of total sales, up 4.0 points from the same period of the previous fiscal year.
Online flagship stores showed robust sell-out results. On the other hand, overall offline sales decreased year on yearalthough chain baby specialty shops continued to report strong sales.
Net sales of nursing bottles decreased by 8% year on year. A new product “Ziran Shigan III” first launched at major online
and offline shops from the end of September. Initial shipments completed on schedule, off to a good start.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

5Summary of Results by Business Segment (Q3 YTD)Net Sales: Sell-in (at local currency)

Some regions are recovering although the impact of the resurgence ofCOVID-19 cases in Q2 still remainsSingaporeBusiness••••••

Some regions are showing signs of recovery although the impact of the resurgence of COVID-19 cases still remains.
Domestic sales in India and Malaysia continued to increase by 14% and 7% year on year respectively.
In Q3 alone, sales in Singapore, Thailand, and Indonesia increased year on year.
A new skincare series (Natural Botanical) launched in major countries.
Loss of demand in Japan dampened the utilization of the factory in Thailand, leading to a decrease in gross margin
by 0.7 points.
Aggressive marketing promotion despite the pandemic put upward pressure on the advertisement and sales
promotion expenses.

Net sales increased by 1.4% year on year. Progress as expected, except
for the sharp rise in logistics costs.
•Lansinoh •Business•••

Net sales in North America increased by 0.4% year on year. Sales of nipple cream, a main product, reported strongsales.
Europe, especially Germany, Benelux, and UK increased sales. China, on the other hand, continues to face a difficult
situation with a year-on-year decline.
Sales of pre- and post-partum care products began in North America, European countries, and China, resulting inprogress beyond expectations.
Gross margin shrunk by 1.7 points due to soaring procurement logistics costs (as part of cost of sales). Soaringlogistics costs (as part of SG&A) also curbed profit. Nevertheless, progress as expected except for the impact of thesharp rise in logistics expenses.
New product development and marketing activities conducted almost as planned.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

6

Major New Products Launched in Q3

Aiming for further growth by renewing the nursing bottles for the first time in ten years (launched inChina first before global rollout). Japan and Singapore will also develop and market their own newproducts that best suit their respective markets.

China: New Model ofNursing Bottle©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Japan: Wuggy Bouncer

Singapore: Skincare

7Pigeon Sales by Regions* (Q3 YTD / YoY) (under Previous Standard)* Net sales: Sell-in (at local currency)

KOR
CHN

-3%
VNM

IND

+14%

MYS

JPN

+32%
+7%

SGP
©Pigeon Corporation All Rights Reserved. │ Strictly Confidential-3%-3%-8%IDN-9%8

Lansinoh Sales by Regions* (Q3 YTD / YoY) (under Previous Standard)* Net sales: Sell-In (at local currency)
GBRCANUSA-11%+0.4%©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

DEU
FRA

+7%+13%+27%

TUR

CHN

-56％+21%9

Revision to Full-year Consolidated Earnings Forecast(under new standard)

Full-year earnings forecast revised downward based on Q3 (YTD) results.
(Unit: Million JPY)

Dec. 2021
Business Plan
Previous Forecast

Dec. 2021 Business Plan
Revised Forecast

Initial Plan

% of TotalRevised
Forecast% of Total

Change(Amount)

Change(%)

Net Sales

100,800

100.0%

94,300100.0%(6,500)(6.4%)

Cost of Sales

51,30050.9%

49,50052.5%(1,800)(3.5%)

Gross Profit

49,50049.1%

44,80047.5%(4,700)(9.5%)

SG&A Expenses

33,00032.7%

31,60033.5%(1,400)(4.2%)

Operating Income

16,50016.4%

13,20014.0%(3,300)(20.0%)

Ordinary Income

16,70016.6%

14,60015.5%(2,100)(12.6%)Net Income Attributable toOwners of Parent

11,100

11.0%

9,100

9.7%

(2,000)(18.0%)©Pigeon Corporation All Rights Reserved. │ Strictly Confidential[Assumed currency rates] Dec. 2021: US$1 = JPY 109.22 / CNY 1 = JPY 16.90

10Illustrative Earnings Forecast for Q4/Dec. 2021
(under new standard)

Consolidated net sales for Q4 alone are expected to increase year on year while
full-year net sales expected to remain the same as the previous year.
YoY change ofquarterly net sales(2%)+5%+7%(9%)(Forecast)■ 2020■ 2021

Q1©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Q2Q3
Consolidated net sales
Clid t dQ411