Financial Results of FY 2023 Q1(January to March)(Securities Code: 7956)

May 11, 2023

Q1 / December 2023 (FY 67th)

Q1 Financial Results

P. 3 - 7

Sales by Region, EC ratio in Key Markets

P. 8 - 10Agenda

2023 Q1 Results - Consolidated P/L• Both net sales and gross profit grew in the high single digits year-on-year. In addition to the increase in sales from theChina and Lansinoh businesses, the impact of FX rates was also favorable.
• Operating income increased by 13.7% yoy. Increase in SG&A expenses (+8.2%) offset by increase in sales.
• Ordinary income decreased by 4.5% yoy due to the impact of foreign exchange gains/losses from the previous year.

(Unit: Million JPY)

Q1 / Dec. 2022
Actual% of Total

Q1 / Dec. 2023
Actual% of Total

YoY Change

Net Sales

21,714100.0%

23,613100.0%

108.7%

Cost of Sales

11,24351.8%

12,12251.3%

107.8%

Gross Profit

10,47048.2%

11,49048.7%

109.7%

SG&A Expenses

7,475

34.4%

8,086

34.2%

108.2%

Operating Income

2,994

13.8%

3,404

14.4%

113.7%

Ordinary Income

3,97118.3%

3,791

16.1%

95.5%

Net Income Attributableto Owners of Parent

2,617

12.1%

2,438

10.3%

93.1%

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential[Currency Rates]

2023 Q1 Results: US$1 = JPY 132.39
2022 Q1 Results: US$1 = JPY 116.35

CNY 1 = JPY 19.33
CNY 1 = JPY 18.32

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2023 Q1 Analysis of Change in Operating Income (YoY)
Operating income increased ¥0.4, higher sales covered higher SG&A associated with the reopening.
(Some of the sales promotion expenses, etc. have not yet been spent in Q1 as planned, will be carried over in Q2.)
(Unit: Million JPY)

+1.1

+9.1

(0.3)

29.9

■ Operating Income Increase

Q1 2022
OperatingIncomeIncreased
Gross Profit byhigher sales©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Impact ofGross Margin
Improvement

(2.5)

(1.6)

(1.7)

34.0

■ Decrease

the previousyear
Marketingpersonnel
Operating income
relatedexpenses
expenses

travel expenses
logistics
expenses

Otherexpenses

1Q 2011
Operatingincome4

2023 Q1 Results - By Business Segment(Unit: Million JPY)

Q1 / Dec. 2022
GrossMarginSegment
ProfitSales% of Total

YoY
Change2,994

23,613100.0%

108.7%

48.7%

3,404

35.8%

543

8,873

37.6%

100.3%

33.9%

439

36.3%

52.4%

2,532

8,600

36.4%

109.0%

54.1%

2,669

3,069

14.1%

41.3%

514

3,491

14.8%

113.8%

38.9%

606

3,551

16.4%

52.1%

168

4,538

19.2%

127.8%

52.8%

347(1,645)(7.6%)－－(1,890)(8.0%)－－－

Sales% of Total

Consolidated Net
Sales

21,714100.0%

48.2%

Japan Business

8,846

40.7%

China Business

7,892

Singapore
Business
Lansinoh BusinessElimination ofinter-segment
transactions

Q1 / Dec. 2023
Gross
MarginSegment
Profit[Reference] Breakdown of Japan Business Segment

Q1 / Dec. 2022
(Unit: Million JPY)

Baby Care

Sales% of Total

6,244

Child Care892
Services
Health & Elder
1,176
CareCorporation All Rights Reserved. │ Strictly Confidential©PigeonGross
MarginQ1 / Dec. 2023
Segment
ProfitSales% of Total

YoY
ChangeGross
MarginSegment
Profit

－

40.6%

648

6,176

－

98.9%

39.8%

579

－

16.1%

52895

－

100.3%

15.9%

56－

31.0%

86

1,146

－

97.5%

28.8%

60 5

2023 Q1 Summary of Results by Business Segment
Baby care sales slightly declined due to the bottle renewal in 2022, despite strong sales of consumables

Japanbusiness• Baby care sales declined 1.1% yoy.
• Sales of baby food, beverages, wet tissues and other consumables increased yoy. On the other hand, sales of Nursing
bottles and Nipples declined due to a rebound of the initial shipments of new models in Q1 of the previous year. Sales ofSkincare were almost flat yoy due to increased demand for the Momo-no-ha series, despite a rebound of the renewal ofthe basic skincare series in Q1 of 2022.
• A new category, “ME. by Pigeon” was launched at the end of February. Five products of pre-natal and post-partum
perineal care products such as massage oil are now on the market.
• Gross profit margin for Baby care decreased by 0.8 pt yoy. Factors included increased procurement costs due to yen
depreciation and raw material price hikes.
• Price revisions in baby-related products including Nursing bottles and nipples, as well as some Health & Elder careproducts, effective from February.

Business activity on the mainland was affected by the Covid re-expansion in January, but has been
recovering since February

Chinabusiness• Mainland China sales* +0.6% yoy• Distribution of new models of Nursing bottles has spread throughout the land, and replacement demand for Nipples hascompletely shifted to new models.
• Gross profit margin (JPY) of China business improved by 1.7 pt yoy due to higher sales of Nursing bottles and Nipples, andSkincare.
• New products; Skincare for Kids launched in Q4 of previous year sold very well. Implemented interactive customer
communication through Social media (Live commerce, etc.) and Offline channels.
• Sell-out was down 6% yoy, +3% at EC channels, -21% at offline, current EC sales ratio: 67%. Major EC channels were downyoy, while our strategic EC channels such as Tiktok continued to grow.
• Korea market: Renewed our domestic business structure and started full-scale sales activities under the new structure. Q1sales* increased 33% yoy, great start as planned.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential*Sales: Sell-in at local currency6

2023 Q1 Summary of Results by Business Segment
Net sales and income increased yoy, but profit margin declined due to soaring raw material prices.

SingaporeBusiness• Net sales (JPY) increased by double digits compared to the previous year, partly due to the impact of FX rates.
• Sales* in major countries were strong in the Middle East, Australia, and Indonesia. On the other hand, domestic sales inIndia were down 20%, Malaysia down 24% yoy. Inventory reduction trend is seen in some retailers.
• Sales ratio of Wide-neck Nursing bottles increased yoy due to strengthened branding of SofTouch (The model name ofWide-neck nursing bottles) and SKU expansion.
• Gross profit of Singapore business (JPY) increased by 7% yoy. On the other hand, gross profit margin deteriorated by 2.4 pt
due to lower sales at factories and soaring raw material prices.

Strong sales in North America and other markets. Profits also increased due to a large increase in sales.

LansinohBusiness• Lansinoh Group sales* grew 12% yoy. North America +12% yoy.
• In Europe, sales* in Benelux and Germany grew yoy. UK sales were flat yoy.
• As for sales* of main products, sales of Nipple creams and Breast pumps decreased yoy due to a rebound from Q1 lastyear, but sales of Milk Storage Bags grew substantially due to the baby formula shortage in North America.
• Sales of pre/post-partum care products increased mainly in North America, resulting in double-digit yoy growth inLansinoh group sales.
• Gross profit (JPY) increased significantly yoyy due to the impact of increased sales. Gross profit margin (JPY) also improvedby 0.7 pt yoy due to a higher sales and change in the product mix.

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

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2023 Q1 Pigeon Sales by Regions (YoY)

KOR

UAE

CHN

+23%
IND

-20%+0.6%

JPN-1%(Baby Care)
MYS

-24%
SGP

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

+33%

-11%

IDN

AUS

+8%+245%

Sell-In (Local Currency)

82023 Q1 Lansinoh Sales by Regions (YoY)
GBR
CAN

USA

+5%+12%©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

DEU

BENELUX-1%+22% TUR

+25%

CHN

+130%-15%

Sell-In (Local Currency)

92023 Q1 E-commerce Sales Ratio in Key Markets[ EC sales ratio of Pigeon / Lansinoh products ]67%

China - Pigeon*
52%

UK
36%

US - Lansinoh
30%

India*
16%

Singapore*
Japan

9%
*: Sell-out©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Others: Sell-in
10Disclaimer on Forward-Looking Statements
This material includes certain forward-looking statements about the Pigeon Group.
To the extent that statements in this material do not related to historical or current
facts, they constitute forward-looking statements.
These forward-looking statements are based on the current assumptions andjudgments of the Pigeon Group in light of the information currently available to it,and involve know and unknown risks, uncertainties and other factors, which may
affect the statements made in this material.

P
Head Office
4-4, Nihonbashi-Hisamatsucho, Chuo-ku, Tokyo
103-8480, Japan©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

URL http://www.pigeon.co.jp/
http://www.pigeon.com/

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