Financial Results of FY 2022 Q3(January to September)(Securities Code: 7956)

November 8, 2022

Q3 / December 2022 (FY66th)
Results for Q3 / Dec. 2022

P. 2 - 4

Summary of Results by Segment

P. 5 - 6

Sales by Regions, EC ratio in Key Markets

P. 7 - 9Highlight for Q3

P. 10Agenda

2022 Q3 Results - Consolidated P&L

Overall: Sales increased but profits decreased.
Net sales: Increased by +1.8% yoy, driven by core products mainly in the U.S., Europe, and ASEAN markets as well as the impact ofyen depreciation.
Gross profit: GP margin declined 0.9 points yoy due to higher raw material prices and marine transportation costs.
SG&A: Increased by +6.0% due to higher overseas labor costs, logistics costs, and sales promotion costs associated with thereopening economy.

(Unit: Million JPY)

Q3 / Dec. 2021
ActualQ3 / Dec. 2022

& of Total

Actual% of Total

YoY Change

Net Sales

69,426100.0%

70,707100.0%

101.8%

Cost of Sales

36,24752.2%

37,51053.1%

103.5%

Gross Profit

33,17947.8%

33,19746.9%

100.1%

SG&A Expenses

22,735

32.7%

24,09334.1%

106.0%

Operating Income

10,444

15.0%

9,103

12.9%

87.2%

Ordinary Income

11,77417.0%

10,774

15.2%

91.5%

7,185

10.3%

6,948

9.8%

96.7%

Net Income Attributable toOwners of Parent©Pigeon Corporation All Rights Reserved. │ Strictly Confidential【Currency Rates】

2022 Results: US$1 = JPY 128.31 / CNY 1 = JPY 19.38
2021 Results: US$1 = JPY 108.54 / CNY 1 = JPY 16.77

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2022 Q3 Results - By Business Segment(Unit: Million JPY)

Q3 / Dec. 2021Segment
ProfitSales% of Total

YoYChange

47.8%

10,44470,707100.0%

101.8%

46.9%

9,103

42.2%

34.6%

1,686

26,726

37.8%

91.3%

32.7%

924

27,640

39.8%

51.9%

9,161

26,220

37.1%

94.9%

52.3%

8,100

Singapore
Business

9,170

13.2%

38.7%

1,354

10,77215.2%

117.5%

41.4%

1,978

Lansinoh Business

9,562

13.8%

54.4%

718

12,38417.5%

129.5%

51.1%

476(6,214)(9.0%)－－(5,396)(7.6%)－－－

Sales% of Total

Consolidated Net
Sales

69,426100.0%

Japan Business

29,267China BusinessElimination ofinter-segment
transactions

GrossMargin

Q3 / Dec. 2022
Gross
MarginSegment
Profit[Reference] Breakdown of Japan Business Segment

Q3 / Dec. 2021
(Unit: Million JPY)

Baby Care

Sales% of Total

19,548Child Care
2,625
Services
Health & Elder
4,315©PigeonCare Corporation All Rights Reserved. │ Strictly Confidential

－－－

Gross
MarginQ3 / Dec. 2022
Segment
Profit

Sales

41.1%

1,874

18,694

15.5%

105

2,577

29.9%

379

3,686

% of Total

－－－

YoY
ChangeGross
MarginSegment
Profit

95.6%

37.1%

1,213

98.2%

15.6%

14185.4%

31.3%

352

32022 Q3 - Analysis of Change in Operating Income (YoY)• Increase in gross profit due to higher sales but offset by higher cost ratio.
• SG&A expenses are mainly labor costs (China business, and Lansinoh business including the impact of Fx rates) anddistribution costs (Lansinoh) increased.
• SG&A expenses increased due to the reopening economy including sales promotion, marketing, and travel expenses(excluding China)

104.4

+6.1

(6.3)

(Unit: 100 Million JPY)

(5.1)

(3.1)

■ Operating Income Increase

OperatingIncome forQ3 2021

Increased
Gross Profit byhigher sales©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Impact ofCost Ratio
Increase

(1.9)

91.0

OtherExpenses

Operating
Income forQ3 2022■ Decrease

前年Distributionand Logistics
営業利益

PersonnelExpenses(3.1)

Expenses related
Reopening
economy4

2022 Q3 Summary of Results by Business Segment
New model of nursing bottles are performing well but consumables continue to struggle

JapanBusiness• Baby care YTD sales declined 4.4% yoy.
• YTD Sales of Nursing bottles increased 23% yoy, continuing the effect of the renewal. Sales of skincare products fell below
the previous year's level due to a continued decline in overseas demand (e.g., cross-border EC) for the Momo-no-ha series.
• Consumables (Wet tissues and Disposable nursing pads) continued to struggle since Q1 of this year due to risingconsumer demand for low-priced products.
• Expanded product range in new categories, including the disaster prevention product series “Sonaetta”, and "POCHItto”
the steam sterilizer and dryer of Nursing bottles.
• The gross profit margin of Baby Care business decreased by 4.0pt yoy YTD. Factors included an increase in procurement
costs due to yen depreciation and raw material price hikes.
• Health & Elder Care: YTD net sales declined 0.6 billion yen yoy due to the restructuring of the product portfolio but grossprofit margin improved by +1.4 pt yoy.

Mainland sales grew YoY in Q3 alone, but the impact of the Shanghai lockdown still remains

ChinaBusiness• Sales in the mainland increased by 8% yoy in the Q3 alone, but -19% yoy YTD.
• Although sales of Nursing bottles and skincare products were on a recovery trend in the Q3 alone, YTD sales
fell below the previous year's level. Consumables such as Wet tissues and Baby diapers continued to struggle.
• Gross profit margin (JPY / YTD) of China business improved by 0.4pt yoy due to contributions from new nursing
bottles and skincare products• launched skincare products for kids aged 3 and up. Aiming to increase Lifetime Value (LTV) by leveraging ourintensive research on baby’s skin.
• Sell-out was down 11% yoy; -10% at EC, -14% at Offline, and current EC ratio is 68%. Tiktok and other new EC
channels performed well, while major EC channels were down yoy©Pigeon Corporation All Rights Reserved. │ Strictly Confidential*Sales: Sell-in at local currency

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2022 Q3 Summary of Results by Business Segment
Sales companies continue to perform well, expecting to recover to pre-Covid levels with theintroduction of new Nursing bottles

SingaporeBusiness• Sales in major countries were strong. YTD sales in India increased by +31%, Malaysia +27%, and Indonesia +20%.
• The Middle East, Australia and Vietnam grew yoy in export markets.
• Continued high growth in YTD sales (in Japanese yen) of core products* yoy. New nursing bottles werelaunched in Singapore, Malaysia, Vietnam, and other major markets in August.
• The new skincare range (Natural Botanical) is expanding both online and offline• Gross profit (JPY / YTD) of Singapore business increased by 25% yoy due to an increase in sales at sales
companies and the impact of foreign exchange rates. Gross profit margin improved by +2.7pt yoy.

*Core Products: Nursing Bottles, Breast Pumps, Baby Skincare, and Oral care products

While the North American market drove sales growth, profit declined due to the continued
impact of soaring logistics costs.

LansinohBusiness• Lansinoh Group sales up 9% yoy (YTD). Sales in North America up 15% yoy.
• In Europe, Benelux and Turkey performed well with YTD, but UK and Germany fell below the past year due toeconomic deterioration caused by inflation and some stockout.
• YTD sales of mainstay products, nipple cream and breast pumps, increased yoy. Sales of breastmilk storage bags
increased significantly due to the shortage of formula milk in North America.
• Sales of prenatal and postpartum care products are expanding at a faster pace than in the past year, mainly in NorthAmerica.
• The gross profit margin (JPY / YTD) of Lansinoh business was down 3.3 pts yoy. Soaring procurement and logistics
costs (a cost factor) continued due to logistics disruptions, pushing down gross profit. In addition, the high level ofdistribution costs in the U.S. (SG&A expenses) also had an impact on the decline in operating income.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential*Sales: Sell-in at local currency

62022 Q3 Pigeon Sales by Regions* (YoY)

KOR

UAE

CHN

+14%
IND

+31%-19%

JPN-4%(Baby Care)
MYS+27%SGP©Pigeon Corporation All Rights Reserved. │ Strictly Confidential+5%±０ %

IDN

AUS

+41%+20%* Sell-In (Local Currency)

7

2022 Q3 Lansinoh Sales by Regions* (YoY)
GBR
CAN

USA

+5%+15%©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

DEU

BENELUX-14%-5%+28%

CHN
TUR

+116%-10%* Sell-In (Local Currency)

82022 Q3 E-Commerce Ratio in Key Countries
EC sales ratio of Pigeon / Lansinoh products
87%

Korea*
68%

China - Pigeon*
49%

UK
37%

US - Lansinoh

33%

India*
24%

Singapore*Japan©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

9%*: Sell-out

Others: Sell-in
9Highlight: Disposable Feeding Cup Wins “Good Design Award”

See details about good design award: https://www.g-mark.org/award/describe/53111
See our “sonaetta” product series: https://www.pigeon.com/news/files/pdf/20220721_en.pdf©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

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