Financial Results of FY Dec. 2023
( January to December )Norimasa Kitazawa
President and CEO
February 15, 2024

FY December 2023 (FY 67th)
Review of the FY Dec. 2023 Results

P. 3 - 13

Earnings Forecast for FY Dec. 2024

P. 14 - 21

Shareholder Returns, etc.

P. 22

AgendaReview of the FY Dec. 2023 Results

FY Dec. 2023 Results - Consolidated P&L (12 months)
Full year sales ended at the same level as the previous year.
Operating income ended lower due to aggressive use of SG&A expenses associated with the reopening, despite an
improvement in gross margin.

Unit: Million JPY

Dec. 2022

Dec. 2023 Forecast

Dec. 2023

Actual% of Total

Forecast% of Total

Net Sales

94,921100.0%

100,000

100.0%

94,461100.0%

99.5%

94.5%

Cost of Sales

50,08752.8%

51,80051.8%

49,008

51.9%

97.8%

94.6%

Gross Profit

44,83447.2%

48,20048.2%

45,45248.1%

101.4%

94.3%

SG&A Expenses

32,63834.4%

35,80035.8%

34,72636.8%

106.4%

97.0%

Operating Income

12,195

12.8%

12,40012.4%

10,726

11.4%

87.9%

86.5%

Ordinary Income

13,46514.2%

12,40012.4%

11,522

12.2%

85.6%

92.9%

Net Income
Attributable to
Owners of Parent

8,581

9.0%

8,100

8.1%

7,423

7.9%

86.5%

91.6%

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

Actual% of Total YoY Change vs Forecast

2023 Results: US$1 = JPY 140.58
2023 Forecast: US$1 = JPY 130.00
2022 Results: US$1 = JPY 131.55

CNY 1 = JPY 19.83
CNY 1 = JPY 19.50 4
CNY 1 = JPY 19.50

FY Dec. 2023 Results - By Business Segment (12 months)
Japan, Lansinoh business ended with increased sales and profit.
China business was affected by ALPS treated water in the Q4, and Singapore business saw lower sales and income due tocontinued shipment adjustments throughout the year.

Unit: Million JPY

Dec. 2022 ActualDec. 2023 Actual
Segment
ProfitNet Sales% of Total

YoY Change

47.2%

12,195

94,461100.0%

99.5%

48.1%

10,726

38.3%

32.4%

1,491

36,86539.0%

101.5%

33.7%

2,006

34,776

36.6%

52.5%

10,40833,045

35.0%

95.0%

53.8%

8,858

Singapore Business

14,153

14.9%

40.9%

2,140

13,085

13.9%

92.5%

37.9%

1,235

Lansinoh Business

16,917

17.8%

52.9%

1,154

18,48019.6%

109.2%

54.9%

1,453

Elimination of intersegment transactions(7,248)(7.6%)(7,016)(7.4%)Net Sales% of Total

Consolidated Net Sales

94,921100.0%

Japan Business

36,323China Business▼[Reference] Breakdown of Japan Business
Unit: Million JPY

GrossMarginーDec. 2022 Actual

Net Sales

Baby Care

25,287

Childcare Services

3,444

Health & Elder Care

5,062

% of Total©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

ー

ー
ー

Gross
MarginーSegment
ProfitーDec. 2023 Actual
Net Sales

36.8%

1,787

26,238

15.8%

199

3,447

30.9%

497

5,005

% of Totalーーー

YoY Change

GrossMarginー

GrossMarginSegment
ProfitーSegment
Profit103.8%

38.2%

2,278

100.1%

15.9%

208

98.9%

31.1%

464

5

FY Dec. 2023 Results - Change in Operating Income (YoY)
Gross margin improved (price revisions in Japan business, and lower ocean freight rates in Lansinoh business, etc.) while
SG&A expenses increased due to higher personnel costs, logistics costs associated with the reopening, and sales promotion
expenses, etc., resulting in a 1.4 billion yen decrease in operating income from the previous year.

(Unit: 100M. JPY)

121.9

+8.4
(6.0)

(2.2)

(8.2)

■ Operating Income Increase

Dec. 2022
Operating
IncomeDecreased
Impact ofGross Profit by Gross Margin
lower sales
improvement©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

107.2
(5.1)

(1.6)

■ Decrease

MarketingPersonnel
the previous
year
relatedexpenses
Operating income
expenses

Travel andLogistics
expenses

Other
expensesDec. 2023
Operating
Income6

FY Dec. 2023 Results - Balance Sheet
Inventories decreased from the end of the previous fiscal year by Company-wide efforts.
End of Dec. 2022

Unit: Million JPY

ActualEnd of Dec. 2023
ActualYoY Change(Amount)

YoY Change(%)

YoY Change (Amount)
w/o impacts of
FX rates

Cash and Deposits

34,28334,357+74

100.2%(1,277)

Notes and Accounts
Receivable-Trade

15,975

14,412(1,563)90.2%(2,087)

Inventories

15,31813,535(1,783)88.4%(2,398)Notes and Accounts
Payable-Trade

5,066

3,643

(1,423)71.9%(1,517)

Electronically Recorded
Obligations - Operating

1,542

1,365

(177)

88.5%

(177)

76

+76

Borrowings

ー

ー

+76

Net Assets

79,952

81,087+1,135101.4%(1,164)

Total Assets

101,733

100,440(1,293)

98.7%(4,838)Equity Ratio

75.4%

77.2%

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

ー

ー

ー

7

FY Dec. 2023 Results - Business Summary By Segment*Sales: Sell-in on a local currency basis

Japanbusiness

Sales and income increased due to price revisions in Feb. and Sep., as well as enhanced sales promotion activities.
• Baby Care ended the year with sales growth of +4% YoY.
• Sales of Nursing bottles/nipples and Baby skincare increased from the previous year. Wet tissues and otherconsumables also performed well.
• “SHUPOT”, an electric nasal aspirator launched in August performed well. Contributed as a growth driver in the highunit-price babycare appliance category• Gross profit margin of Baby Care improved by +1.4 pt YoY in Q4 YTD. Price revisions contributed to the improvement.
• Health & Elder Care implemented product price revisions in Feb. and Sep., also promoted sales of key products.
• Despite an upward trend in the number of foreign visitors to Japan, inbound demand is declining, partly due to theimpact of ALPS treated water in the second half of the fiscal year.

New area: Babycare appliances
Electric nasal aspirator, Nursing bottle
sterilizer/dryer, etc.
Demand for high unit price products is expanding©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Brand: Communication
Utilizing owned media

Event: #The Tiny Birth Cry Support ProjectWorld Premature Baby Day on November 17▲ The purpose of the event is to raise awareness about premature babies.
With the concept of "know, experience, and participate," approximately
700 guests including major media, attended the two-day event.

8

FY Dec. 2023 Results - Business Summary By Segment*Sales: Sell-in on a local currency basis

Sales and profits declined sharply in the Q4, mainly due to the impact of ALPS treated water.

Chinabusiness• Q4 YTD sales (in Chinese yuan) in mainland China ended at -11% YoY. Q4 alone was -43% YoY, a significant decline.
• sales of Nursing bottle and nipple increased 11% YoY. Baby skin care, which has a strong image of being made inJapan with the "Momo-no-ha" series was -20%. In Q4 alone, almost all categories were affected by reduced brandexposure due to cancel of KOLs, suspension of sales promotion activities, and consumers' reluctance to buy.
• Implemented aggressive sales promotion of Age-Up products (“Natural weaning” bottle series and Skincare products
for kids) .
• Q4 YTD gross profit margin in China business (JPY) improved by +1.3 pt YoY due to sales growth in Nursing bottles andnipples, despite lower sales of whole China business YoY.
• Sellout was -7% YoY on Q4 YTD, -4% for EC, and -15% for offline. New channels Tiktok and Pinduoduo grew by morethan 50%, but the major platforms fell below the previous year. Q4 YTD EC ratio is 72%.

New area: Age-Up products
Sales are expanding both offline and in EC©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

New products in the 2H of 2023
New series of drinking cups, etc.

Brand: Communication
Live streaming on Tiktok, etc.

9

FY Dec. 2023 Results - Business Summary By Segment*Sales: Sell-in on a local currency basis

Sales and income down due to the absence of the previous year's sell-in growth, but focus on
reducing distribution inventories

Singaporebusiness• Q4 YTD sales* in India -20% YoY, Malaysia -6%, Indonesia -9%, Middle East -27%.
• Q4 YTD sellout increased YoY in India, Australia and Thailand. Growth in Nursing bottles contributed to the increase.
• Continue to strengthen sales of core products (Bottles and nipples, Baby skincare). Focus on promoting the value ofwide-neck bottles and strengthening brand recognition and in-store exposure (EC and offline) for Natural Botanicalskincare products.
• Inventory levels are expected to normalize in major markets by the end of Q1 2024.
• Established an own subsidiary to develop the African market (December)• Q4 YTD gross profit margin of Singapore business (JPY) deteriorated by -3.0 pt YoY mainly due to lower sales at sales
companies and factories.

Strengthening core products:
Wide-neck bottles
Sales in both offline and e-commerce©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Strengthening core products: Baby skin care
Increase exposure and sales promotion of
Natural Botanical skin care

Brand: Communication
Strengthening Social media
and promoting hospital activities

10

FY Dec. 2023 Results - Business Summary By Segment*Sales: Sell-in on a local currency basis

LansinohBusiness

Sales in North America fell below, but increased in Europe. Both sales and income increased, driven by
improved profits due to lower marine transportation costs.
• Lansinoh Group's Q4 YTD sales (US$) increased 2% YoY. Sales in North America were down 5% due to intensifiedcompetition in the consumables market and a reactionary decline from special demand, while sales in Europe(Germany, UK, France) grew mainly due to nipple cream.
• Sales of Nursing bottles increased in North America and Europe, reflecting growing consumer recognition of theseproducts as the most suitable feeding devices for breastfeeding babies.
• YTD sales of prenatal and postpartum care products grew by more than 70% YoY. In addition to North America,
sales grew in the Europe, and there is still much room for growth in this new area.
• Implemented aggressive promotion to increase awareness and strengthen sales of the Wearable Breast Pump.
• Q4 YTD gross profit margin of Lansinoh business (JPY) improved by +2.0 pt YoY, partly due to lower ocean freightrates (cost factor), but the cost of sales and distribution in the U.S. (SG&A factor) continued to soar.

New products in the 2H of 2023
Wearable Breast Pump (North America)©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

New area: Prenatal and postpartum care
Sales growth in Europe in 2023

Brand: Communication
Strengthen our social media platform11

FY Dec. 2023 Results - Sustainability Initiatives
Promote value co-creation with society to realize our “Purpose”

ESG• First "AA" rating in the January 2024 MSCI ESG ratings• Pigeon's educational program for junior high school students across Japan, "A Lesson on Babies: For a BabyFriendly Future," received the Incentive Award in the 2023 "Award for Companies Promoting YouthExperiential Activities" sponsored by the MEXT (Ministry of Education, Culture, Sports, Science and Technology).
History of our rating by MSCI

Purpose of the Pigeon GroupAAA

Providing educational programs
for junior high school students to develop aninterest in babies (Japan)

AA

AA
A
BBB

BBB
B.B.
B

B

CCC

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Nov.
2021

Jan.
2023

Jan.
2024

12

Progress of the 8th Mid-Term Plan: Results of Year 1
In the first year of the 8th MTP, the Japan business and Lansinoh business progressed as expected.
Although the performance of the China and Singapore businesses fell short of the initial plan, activities based on thebasic strategy steadily produced results in each business.
Brand
strategy• Promoting activities to realize “Purpose" on a global scale• Baby-Friendly Future Vision Workshop (in-company)• Selected as one of the "Best Japan Brands" for four consecutive years

Product
strategy• Existing areas: Sales of Nursing bottles and nipples increased as a group.
• New areas: Launch of new categories and expansion of product lineups
in each business (Babycare appliances, age-up, women's care, etc.)

Regional
strategy• Japan business achieved improved profitability through price revisions• Established own office in Kenya to enter the African market

Babycare Appliances©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Age-up products

FY Dec. 2023
Sales in New areasOver

3 bn yen

Women's Care13

Earnings Forecast for FY Dec. 2024

FY Dec. 2024 Earnings Forecast - Consolidated P&L
Continue to strengthen existing areas and expand new areas based on the Key strategies of the 8th Mid-Term Business Plan.
Recovery of sales in the China business is priority #1, and aim to increase sales and profits by thoroughly investing in growth.

Unit: Million JPY

Dec. 2023
ActualDec. 2024% of Total

Forecast% of Total

YoY Change

Net Sales

94,461100.0%

101,000

100.0%

106.9%

Cost of Sales

49,00851.9%

50,20049.7%

102.4%

Gross Profit

45,45248.1%

50,80050.3%

111.8%

SG&A Expenses

34,72636.8%

39,40039.0%

113.5%

Operating income

10,726

11.4%

11,400106.3%

Ordinary income

11,522

12.2%

11,400*

11.3%
11.3%

98.9%

7,423

7.9%

7,600

7.5%

102.4%Net Income Attributable to
Owners of Parent* Subsidy income not included©Pigeon Corporation All Rights Reserved. │ Strictly Confidential[Currency Rates]

2024 Forecast: US$1 = JPY 135.00
2023 Results: US$1 = JPY 140.58

CNY 1 = JPY 19.50
CNY 1 = JPY 19.83

15

FY Dec. 2024 Earnings Forecast - by Business Segment
Unit: Million JPY

Dec. 2023 ActualDec. 2024 Forecast
Segment
ProfitNet sales% of Total

YoY Change

48.1%

10,726

101,000

100.0%

106.9%

50.3%

11,400

39.0%

33.7%

2,006

36,440

36.1%

98.8%

35.1%

2,450

33,045

35.0%

53.8%

8,858

37,70037.3%

114.1%

57.0%

9,900

Singapore Business

13,085

13.9%

37.9%

1,235

14,00013.9%

107.0%

37.1%

1,350

Lansinoh Business

18,480

19.6%

54.9%

1,453

19,40019.2%

105.0%

58.8%

1,550

Elimination of intersegment transactions(7,016)(7.4%)(6,540)(6.5%)Net Sales% of Total

Consolidated
Net Sales

94,461100.0%

Japan Business

36,865China Business▼[Reference] Breakdown of Japan Business
Unit: Million JPY

GrossMarginーーDec. 2022 Actual

Net Sales% of Total

Baby Care

26,238Childcare Services

3,447

ー

Health & Elder Care

5,005

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

ー
ー

Gross
Marginー

GrossMarginーSegment
ProfitーDec. 2023 Actual
Segment
ProfitNet Sales% of Total

YoY Change

38.2%

2,278

26,600101.4%

39.4%

2,502

15.9%

208

3,250

ー

17.1%

200

31.1%

464

4,569

ー

94.3%
91.3%

34.2%

377

ー

Gross
MarginSegment
Profit16

FY Dec. 2024 Forecast - Strategy of Japan BusinessContinue to improve profitability through new value creation byleveraging our strengths and uniquenessBusiness Environment: Annual births are expected to decrease. Inbound sales are planned at zero.
 Assumed decrease in sales due to transfer of shares in Pigeon Manaka. Impact on
operating income is expected to be negligible
Existing Areas: Building a dominant No. 1 position in Nursing bottles and nipples, and baby skincare Launched “My Bonyu-Jikkan”, Japan's first* customizable nursing bottles (January) New Fuji plant: Launch of "Moisture Mist Emulsion" that can be used directly on wetskin (February)
New areas, Monozukuri:
 Strengthen sales in the babycare appliance category. Start sales of Lansinoh
products in the Japanese market (planned for the 2H of Yr 2024).
 Strengthening Monozukuri of Age-Up products. Deepening of baby research andfeeding researchStrengthen Sales and Communication
 Strengthening of our own EC platform (development of EC-only products, etc.).
 Strengthen customer communication both digital and offline©Pigeon Corporation All Rights Reserved. │ Strictly Confidential*Researched by Pigeon

17

FY Dec. 2024 Forecast - Strategy of China BusinessThoroughly invest in growth areas with top priority on sales recovery in mainland
China. Build a solid position as a #1 brand to achieve sustainable growthBusiness Environment: The decrease in the annual number of births in 2023 is within our expectation(9.02 million, -5.6% YoY)
 Total number of marriages at the end of September 2023 increased by +4.5% YoY(Ministry of Civil Affairs, China)
 Assumed that the impact of ALPS treated water will not be zero in 2024, but not asmuch as in 2023
Existing Areas: Aggressive investment in growth in Nursing bottles/nipples and Skincare
Refresh growth strategy for Nursing bottles/nipples to reach 50% market share.
In Skincare, strengthen product competitivenessNew areas, Monozukuri: Growth due to full production of natural weaning series and year-round sales effects
 Expansion of Age-Up products and strengthening of new product development tomeet local needs
Strengthen Sales and Communication
 Intensified brand exposure and communication on Tiktok, Pinduoduo and Redbook
 Continue to strengthen marketing activities on existing EC platforms
 Strengthen branding and sales in regional cities, expand offline exclusive products©Pigeon Corporation All Rights Reserved. │ Strictly Confidential18

FY Dec. 2024 Forecast - Strategy of Singapore Business
Re-entering a growth trajectory by focusing on Nursing bottles/nipples, andskincare products as inventory levels normalize.
Business Environment: Inventory levels in major countries are expected to normalize by the end of Q1 2024
 External sales are expected to grow by double-digits YoY. Priority markets are
Indonesia, India, Middle East, Malaysia, and Vietnam
Existing areas: Nursing bottles: Rebranding Wide-neck nursing bottles. Also utilizing Pigeon‘s official
brand character, “Howapipi” in some South-eastern Asia.
 Skincare: Growth due to expansion of Natural Botanical skincare product lineup andincreased exposure on Social medias and in stores (e-commerce and offline)
New areas, manufacturing: Expansion of Age-up products and regionally limited products centered on Nursing
bottles/nipples, and Skincare, etc.
 African market development. Started sales of Pigeon products in Kenya
Strengthen organizational and operational capabilities Assigning a person in charge of R&D (Managing officer) to strengthen and speed up
Monozukuri initiatives in the region©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

19

FY Dec. 2024 Forecast - Strategy of Lansinoh BusinessContinue to invest for stable growth in existing areas and brand expansion
through product category expansion
Business Environment: In North America, despite intensifying competition due to the rise of lowpriced brands, especially in EC, the market share of mainstay products
remained unchanged at No. 1.
 European countries are not optimistic about the external environment, butthere is significant room for growth in both existing and new areas.
Existing Areas:
 Mainstay breastfeeding care category is expected to grow by high singledigit % YoY due to new product launches, etc.
 Accelerating growth in Nursing bottles/nipples, which have been growing inrecent years, with increased investment in growth
New areas, Monozukuri: Accelerated growth in prenatal and postpartum care, including new products
and market expansion
 Further new product launches in new categories (e.g., Pregnancy care) Building a more flexible and agile Monozukuri organization that responds
to market changes
Strengthen Sales and Communication
 Reduce risk of dependence on major retailers by strengthening D2C.
improve customer purchasing experience©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

20

FY Dec. 2024 Earnings Forecast - Highlight
Unit: Million JPY

Dec. 2023
ActualDec. 2024% of Total

Forecast% of Total

YoY Change

Net Sales

94,461100.0%

101,000

100.0%

106.9%

Operating Income

10,726

11.4%

11,400106.3%

Ordinary Income

11,522

12.2%

11,400*

11.3%
11.3%

98.9%

7,423

7.9%

7,600

7.5%

102.4%Net Assets

81,08778,512

100,440ー

96.8%

Total Assets

ー
ー

63.54

ー

102.4%ーー

Net Income Attributable to
Owners of Parent

EPS (yen)

62.06

BPS (yen)648.73

ROE **

9.6%

ROIC **

9.3%*Subsidy income not included**Denominators are averages of beginning and end of period©Pigeon Corporation All Rights Reserved. │ Strictly Confidentialー

99,816

ー

626.37ー

10.0%

ー[Currency Rates]

10.0%

ー
ー
ー

2024 Forecast: US$1 = JPY 135.00
2023 Results: US$1 = JPY 140.58

99.4%
96.6%

ー
CNY 1 = JPY 19.50
CNY 1 = JPY 19.83

21

Shareholder Returns and Investment
Dividends
Dividend per Share (yen)Dec. 2022

Dec. 2023

Dec. 2024

Interim(Actual)Year-end(Actual)Interim(Actual)Year-end(Scheduled)Interim(Forecast)Year-end(Forecast)

38

38

38

38

38

38

Dividend payout ratio

106.1%

122.6%

119.8%

Investment-related
Indicators (Consolidated)
Unit: Million JPY

Dec. 2022

Dec. 2023

Dec. 2024

Interim(Actual)Year-end(Actual)Interim(Actual)Year-end(Actual)Full-year(Forecast)Capex (*1)

2,814

7,259

3,775

6,320

3,950

Depreciation (*2)

2,381

4,947

2,518

5,080

4,600

R&D Expenses (*3)

1,802

3,792

2,000

4,210

4,600

*1: Property, plant and equipment and intangible assets (including long-term prepaid expense)*2 : Depreciation (including amortization of goodwill)©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

(*4)

(*4)

(*4)

*3 : Total expenses of R&D activities, including personnel costs*4 : Monozukuri expense

22

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/

24

Appendix

FY Dec. 2023 Results

FY Dec. 2023 Results - Financial Highlights (Consolidated)
Unit: Million JPY

Dec. 2022
ActualDec. 2023% of Total

Actual% of Total

YoY Change

Net sales

94,921-

94,461-

99.5%

Operating Income

12,19512.8%

10,726

11.4%

87.9%

Ordinary Income

13,465

14.2%

11,552

12.2%

85.6%

8,581

9.0%

7,423

7.9%

86.5%

Net Assets

79,952

81,087ー

101.4%

Total assets

101,733

ー

ー

86.5%

Net Income Attributableto Owners of Parent

EPS (yen)

71.72

BPS (yen)

640.96

ROE *

11.4%

ROIC *

10.9%*Denominators are averages of beginning and end of period©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

ー

100,440ー

648.73

ー

9.3%

ー
ー

62.06
9.6%

ー

98.7%

ー

101.2%

ー

-

ー

-

27

FY Dec. 2023 Results - Pigeon Sales by Region* (YoY)

CHN
UAE

-27%
IND

-11%

VNM

(Middle East)

-20%

KOR

-63%
MYS

+4%

(Baby Care)

-6%

SGP
©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

JPN

+27%

-3%

IDN

AUS

-9%

+19%

*Sell-in Results (Local currency basis) 28

FY Dec. 2023 Results - Lansinoh Sales by Region* (YoY)
GBR
CAN

USA

+1%

-5%

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

DEU

BENELUX+19%+13% TUR

+13%

CHN

+69%

+32%

*Sell-in Results (Local currency basis) 29

FY 2023 Results - Consolidated Cash Flow Comparison（Unit: Million JPY）

Purchase of tangible and intangible fixed assets(Fuji factory related assets, etc.):¥(5,650)[FY Dec.2022 ¥(5,565)]

Dividends paid:¥(9,109)[FY Dec.2022 ¥(8,974)]

Income before income taxes:¥11,154[FY Dec.2022 ¥13,143]

Q4 / Dec. 2022
Balance at
Beginning

Operating
Activities

Investing
Activities

35,218(5,659)©Pigeon Corporation All Rights
Reserved. │13,210
Strictly Confidential

Financing
Activities(9,666)

Q4 / Dec. 2023
Translation
Adjustment

1,180

Balance atEnd

34,283

Balance at
Beginning

34,283Operating
Activities

14,523

Investing
Activities(5,467)

Financing
Activities(10,256)

Translation
Adjustment

1,275

Balance at
End34,35730

FY 2023 Results - Consolidated PVA Tree
Consolidated

Net sales

Operating profit

Top: Dec. 2023 Plan
Mid: Dec. 2023 Results
Bottom: Dec. 2022 Results(Unit: Million JPY)NOPATPlan 8,680
Results 7,508
LY 8,537

Plan 100,000
Results 94,461
LY 94,921

Plan 12,400
Results 10,726
LY 12,195

Tax

Cost of sales
Plan 51,800
Results 49,008
LY 50,087

Plan 3,720
Results 3,218
LY 3,659

PVA

Plan
Results
LY

4,816
3,480
4,617

Capital invested

Working capital

Trade receivables

SG&A expenses

Plan 77,276
Results 80,559
LY 78,381

Plan 23,465
Results 23,811
LY 23,966

Plan 16,382
Results 15,194
LY 16,114

Plan 35,800
Results 34,726
LY 32,638

Fixed asset

Inventory asset（参考）Plan 34,872
Results 35,115
LY 33,189

WACC

common 5.0%
©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Cash and otherasset and liability
Plan 18,940

Results 21,632
LY 21,226

Plan 14,050
Results 14,427
LY 14,012

Trade payables
Plan 6,967

Results 5,809
LY 6,160

研究開発費

見込 0
前期 0

発送費

見込 0
前期 0

31

FY 2023 Results - Consolidated PVA Tree
Consolidated
Top: Dec. 2023 Plan
Mid: Dec. 2023 Results
Bottom: Dec. 2022 Results

Cost of sales ratio
Operating profit ratio

ROIC before tax

ROIC

PVA
spreadPlan
Results
LY

Plan
Results
LY

11.2%
9.3%
10.9%

Plan
Results
LY

16.0%
13.3%
15.6%

Plan
Results
LY

12.4%
11.4%
12.8%

Plan
Results
LY

51.8%
51.9%
52.8%

SG&A expenses ratio
Plan
Results
LY

35.8%
36.8%
34.4%

Working capital ratio

6.2%
4.3%
5.9%

Capital invested t/o

WACC

common 5.0%

tax ratecommon 30.0%

Plan
Results
LY

1.3
1.2
1.2

Plan
Results
LY

23.5%
25.2%
25.2%

Fixed asset ratio
Plan
Results
LY

34.9%
37.2%
35.0%

Cash and otherasset and liability
ratio©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Plan
Results
LY

18.9%
22.9%
22.4%

32

FY 2023 Results - Consolidated PVA Tree
Consolidated
Top: Dec. 2023 Plan
Mid: Dec. 2023 Results
Bottom: Dec. 2022 Results(Unit: Million JPY)

Working capital

Trade receivables

Plan 23,465
Results 23,811
LY 23,966

Plan 16,382
Results 15,194
LY 16,114

Inventory asset©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

CCC
Plan
Results
LY

Receivable turnover period

109.7

122.9
119.2

Plan
Results
LY

59.8

58.7

62.0

Inventory turnover period
99.0
107.4

Plan 14,050
Results 14,427
LY 14,012

Plan
Results
LY

Trade payables

Payables turnover periodPlan 6,967
Results 5,809
LY 6,160

Plan
Results
LY

102.1

49.1
43.3
44.9

33

FY Dec. 2023 Results - E-Commerce Ratio in Key Markets
E-commerce sales ratio of Pigeon / Lansinoh products
72%

China - Pigeon*
62%

UK
42%

US
27%

India*
Singapore*

14%

Japan

13%

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

Others: Sell-in
34

Forecast for FY Dec. 2024 and 8th MTPFY Dec. 2024 Forecast - Pigeon Sales by Region* (YoY)

CHN
UAE

+17%

VNM

(Middle East)

IND

+14%

+22%

+98%
MYS

+65%

JPN

+1%

(Baby Care)

+14%
SGP

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

KOR

0%

±

IDN

AUS

+20%

0%

±

*Sell-in Forecast (Local currency basis)

36★

FY Dec. 2024 Forecast - Lansinoh Sales by Region* (YoY)
GBR
CAN

USA

+3%

+5%

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

DEU

BENELUX

+13%
+7%

+17%

CHN
TUR

+45%

+30%

*Sell-in Forecast (Local currency basis)37

Progress of the 8th Mid-Term Plan: Net Sales and Income••

In the first year of the medium-term plan, although the Japanese and Lansinoh businesses progressed better than forecast, the group
started the year below plan due in part to the impact of the ALPS treated water in mainland China and adjustments to distribution
inventory in the Singapore business.
In FY Dec. 2024, the company plans to increase both sales and profit over the previous year by implementing thorough investments
for growth, placing the highest priority on sales recovery. Steady efforts will be made to achieve the final year's goals.
Net sales(Million JPY)

Operating income

120,000

80,000102,563

104,748

18.9%

18.7%

60,000100,01717.1%

99,38015.4%

93,0810

19,413

19,612

17,07320182019.01

2019.12

6th MTP©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

94,921

12.8%

15,316

13,3372020

2021

7th MTP

113,800
101,000

94,461

25%
20%
15%

14.3%

40,00020,00030%➡New Standard

140,000

100,000

Operating profit ratio

11.4%

11.3%

12,195

10,726

11,400

2022

2023

2024*

14.1%
16,0002025**

10%
5%0%

8th MTP* FY Dec. 2024 Earnings Forecast Announced Today** Final year target at the time of the announcement in February 2023

38

Purpose

Our reason for being and the role we should play in society

We want to make the world morebaby-friendly byfurthering our commitment
to understanding and addressing babies’
unique needs©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

39Key Issues for Pigeon over the Mid and Long-term (Materiality)

Enhancing Business
Competitiveness andResilience

Reducing ourEnvironmental Impact

Contributing to
the Resolution ofSocial Issues

Managing talent andCultivating the Right
Culture for our Purpose

Establishing solidmanagement foundations

Becoming essential tosociety by expanding ourcorporate value over the
medium to long term

Practicing eco-friendly
monozukuri and leaving
a rich earth for the
future of babies born
tomorrow

Helping to resolve thesocial issues that affectbabies and families

Cultivating anorganizational culture inwhich all employees canshine as they embrace
new challenges

Securing a structural basis forbold and ambitious endeavorsthat will improve medium- tolong-term corporate value

Supporting nursing babies

Reducing greenhouse gas
emissions (Scope 1, 2 & 3)

Supporting healthy babyskin development

Circular manufacturing

New products andservices for babies
needing support

Working environmentsthat achieveself-fulfillment and growth

Expanding use of
products designed formaternity hospitals

Ambitious
organizational culture

Creating new businesses
Releasing productsthat exceed
customer expectations

Using sustainable
resources(paper & palm oil)

Building resilient
distribution systems©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Promoting responsible
procurement

Enriched investment
in human resource
development

Participating in andsupporting communities

PromotingDiversity & inclusion

Reinforcing
group governanceReinforcing complianceReinforcing
risk management
Dialogue withstakeholders

40

8th MTP Themes and Key Strategy

For Sustainable Growth

Restructuring of business structure in response to global economic, political, and environmental changes

Key Strategy (deepening the ones of the 7th MTP)
Brand Strategy

Centered on “Purpose” for our business activities and strengthening brandpower through products

Product Strategy

Strengthen “Monozukuri”, focus on core categories (Nursing bottles and Skincares),and explore the “New areas”

Regional
Strategy・Strengthen autonomous business operation by each SBU.
・Implement the drastic structural reform to establish production and sales
systems tailored to market characteristics, improve efficiency and profitability,
stabilize the supply chain, and prepare for the expansion of the new markets.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

41Vision of a Baby-Friendly Future

Six specific faces of society
Babies are part ofeveryone’s everyday life

Loose, friendly ties facilitating
easy cooperation aroundraising children
Creativity from babies
brings excitement to society
No barriers toraising children

All babies are helped to develop
and grow, regardless ofthe conditions of their birth
A comfortable world
where babies are not troubled
by environmental risks

We formulated Vision of a Baby-Friendly Future by describing, in terms of six specific faces of society, the “baby-friendly” world envisaged in that
Purpose. In order to realize its Vision of a Baby-Friendly Future, Pigeon will move forward step by step, seeking to increase the number of people
in society who empathize with the vision and co-creating and taking action with a diverse range of stakeholders.
Vision of a Baby-Friendly Future website: https://www.pigeon.com/vision-of-a-baby-friendly-future/
42©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

The Pigeon Group seeks to maximize economic and social value through communications with all
stakeholders, including shareholders and other investors.
Please check our corporate website to understand our latest management strategies, businessresults and ESG activities.

Integrated Reporthttps://www.pigeon.com/ir/library/factbook/

Sustainability
https://www.pigeon.co.jp/sustainability/

ESG Data Book
https://www.pigeon.co.jp/sustainability/databook/©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

43