Summary of Financial Results
for the Fiscal Year Ended December 31, 2020
[Japanese Standards] (Consolidated)
February 10, 2021
Name of Listed Company: Pigeon Corporation (Stock code: 7956)
Listings: First Section, Tokyo Stock Exchange
Website: www.pigeon.com
Representative: Norimasa Kitazawa (President and CEO)Contact person: Nobuo Takubo (Managing Officer, Business Strategy Division Manager)/Tel: +81-3-3661-4204
Scheduled Date of Annual General Shareholders’ Meeting: March 30, 2021
Scheduled Commencement Date of Dividend Payments: March 31, 2021
Scheduled Filing Date of Annual Securities Report: March 31, 2021
Preparation of Any Additional Explanatory Materials for Financial Results: Yes
Holding of Any Briefing Session for Financial Results: Yes (For analysts and institutional investors)

1. Consolidated Business Performance for the Fiscal Year Ended December 31,
2020 (January 1 to December 31, 2020)(1) Consolidated Operating Results (cumulative)(Millions of yen, rounded down, % figures denote year-on-year change)
Net Income
Operating Income
Ordinary Income
Attributable to
Owners of Parent

Net Sales
Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

FY ended December 31, 2020

99,380－15,316－

16,113－

10,643－

FY ended December 31, 2019

100,017－

17,072－

17,284－

11,538－(Note) Comprehensive income:FY ended December 31, 2020
FY ended December 31, 2019¥11,129 million (－%)
¥12,253 million (－%)

Net Income
per Share (¥)

Diluted Net Income
per Share (¥)

Return on
Equity (%)

Total Assets/
Ordinary Income (%)

OperatingMargin (%)

FY ended December 31, 2020

88.93

－

15.5

17.5

15.4

FY ended December 31, 2019

96.37

－

17.5

19.6

17.1

(Reference) Equity in earnings of affiliates:

FY ended December 31, 2020
FY ended December 31, 2019¥－ million¥－ million(Note) Pursuant to the approval of the “partial revision of the Articles of Incorporation” at the 62nd Ordinary General Meeting of
Shareholders (fiscal year ended January 31, 2019) on April 25, 2019, the fiscal period has changed from the year ending
January 31 to the year ending December 31, beginning with the previous consolidated accounting year. As such, in theprevious consolidated accounting year, the transition period, the consolidation period for the Company and its Japanesesubsidiaries that used to settle their accounts on January 31 shall be the 11-month period from February 1 to December 31,
2019. As such, year on year changes have not been included in the above table.
For overseas subsidiaries that currently settle their accounts on December 31, or that are doing so temporarily, theconsolidation period shall continue to be the 12-month period from January 1 to December 31, 2020.

(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio (%)

Net Assets
per Share (¥)

FY ended December 31, 2020

93,472

72,62574.8

607.06

FY ended December 31, 201990,491

70,46374.8

565.64

FY ended December 31, 2020
FY ended December 31, 2019¥69,903 million¥67,722 million(Reference) Shareholders’ Equity:(3) Cash Flows
Cash and Cash
Equivalents
at Year-End

Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

FY ended December 31, 2020

18,400(3,815)(9,231)37,050FY ended December 31, 201914,098(3,995)(8,734)32,416

2. Cash Dividends
Annual Dividend (¥)
1Q-end2Q-endFY ended December 31, 2019

－

35.00

FY ended December 31, 2020－

FY ending December 31, 2021
(Forecast)

－

Total
Dividends
Paid (fullyear) (¥ mil)Consolidated
Payout Ratio(%)

Dividends on
Consolidated
Net Assets(%)

3Q-end Year-end

Total

－

35.00

70.00

8,383

72.7

12.7

36.00

－

36.00

72.00

8,622

81.0

12.5

37.00

－

37.00

74.00

79.8

3. Consolidated Business Performance Forecasts for the Fiscal Year Ending
December 31, 2021 (January 1 to December 31, 2021)
Net Sales

Operating Income

Millions of Yen

Full year

100,800% Millions of Yen

1.4

16,500(% figures denote year-on-year change from the previous term)
Net Income
Net Income per
Ordinary Income
Attributable to
Share
Owners of Parent% Millions of Yen

7.7

16,700% Millions of Yen

3.6

11,100

%

4.3

Yen

92.75

Notes
(1) Changes in major subsidiaries (or changes in specific subsidiaries that affect the scope of consolidation) during theperiod under review: None
New: － (Company name: － ), Excluded: － (Company name: － )(2) Changes in accounting policies, changes in accounting-based estimates, and restatements
1) Changes in accounting policies associated with revision of accounting standards: None
2) Changes in accounting policies other than the above 1): None
3) Changes in accounting-based estimates: None
4) Restatements: None
(3) Number of outstanding shares (common stock)1) Number of shares outstanding at the period-end (including treasury stock)
FY ended December 31, 2020: 121,653,486 shares
FY ended December 31, 2019: 121,653,486 shares2) Amount of treasury stock at the period-end
FY ended December 31, 2020: 2,017,880 shares
FY ended December 31, 2019: 1,926,426 shares
3) Average number of shares outstanding during the period
FY ended December 31, 2020: 119,675,451 shares
FY ended December 31, 2019: 119,740,515 shares(Note) Amount of treasury stock at the period-end includes Company shares held by the board incentive plan (BIP) trust forcompensation of directors (124,800 shares as of FY ended December 31, 2020; 33,600 shares as of FY ended
December 31, 2019). Company shares held by the BIP trust for compensation of directors are also included in thetreasury stock subtracted in the calculation of the average number of shares outstanding during the period.

* This summary of financial results is exempt from audit by certified public accountants and auditing corporations.
* Cautionary Statement regarding Performance Forecasts
The forecasts and future projections stated in this report have been prepared on the basis of the information andassumption that shall be reasonable as of the date of announcement of this summary information, and the forecasts andfuture projections stated in this report are in no way intended as a promise of achievement as a company.
In addition, the actual results could differ significantly from forecast figures depending on a variety of factors. See thesection “(4) Future Directions” in “1. Overview of Management Results and Related Matters” on page 5 regarding
conditions which are preconditions for business performance forecasts and cautions for using the business performance
forecast.

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

Table of Contents of the Appendix
1. Overview of Management Results and Related Matters.................................................................. 2(1) Overview of Management Results for the Term Under Review ................................................. 2(2) Overview of Financial Position for the Term Under Review ..................................................... 4(3) Overview of Cash Flows for the Term Under Review ................................................................ 4(4) Future Directions ......................................................................................................................... 5(5) Income Appropriation Policy and Dividends for the Term Under Review and Next Term ....... 5
2. Basic Approach for the Selection of Accounting Standards ............................................................ 6
3. Consolidated Financial Statements and Main Notes........................................................................ 7(1) Consolidated Balance Sheets....................................................................................................... 7(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ..............9
Consolidated Statement of Income .............................................................................................. 9
Consolidated Statement of Comprehensive Income .................................................................. 10(3) Statement of Changes in Consolidated Shareholders’ Equity ................................................... 11(4) Consolidated Statements of Cash Flows ................................................................................... 13(5) Notes on Consolidated Financial Statements ............................................................................ 15(Notes Regarding Going Concern Assumptions)...................................................................... 15(Additional Information) ........................................................................................................... 15(Segment Information) .............................................................................................................. 16(Per Share Information) ............................................................................................................ 19(Material Subsequent Events) ................................................................................................... 191

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

1. Overview of Management Results and Related Matters(1) Overview of Management Results for the Term Under Review
The previous consolidated accounting year is the 11 months from February 1, 2019 to December
31, 2019 due to the change in fiscal period. As such, year on year comparisons have not been
included in this statement.
1) Performance Overview
During the consolidated accounting year under review, Japan’s economy continued to face toughconditions due to the impact of COVID-19, despite a movement toward recovery in some areas. In
the global economy including Japan, even as countries begin to gradually increase the level ofsocioeconomic activities while establishing measures to prevent the spread of COVID-19, problems
such as intermittent resurgence of the virus and lockdowns (city closures) are occurring in regions
throughout the world. Currently, it is still impossible to predict when COVID-19 will end and we
predict that uncertainty regarding the future of the economy will continue for the time being.
Amid such circumstances, the Group is steadily executing the following three basis strategies
defined in our Seventh Medium-Term Business Plan (for the period between the fiscal year ended
December 2020 and the fiscal year ending December 2022), thus expanding the Group business andimproving management quality. As the first fiscal year of the Medium-Term Business Plan, in the
consolidated accounting year under review, the Group worked to implement various measures forbusiness growth, as well as to realize our purpose which is “we want to make the world more babyfriendly by furthering our commitment to understanding and addressing babies' unique needs.”
1) By promoting integration of brand strategy and business strategy based on the Pigeon Way, in
addition to maximizing economic value, we will strengthen initiatives for the resolution ofsocial issues related raising children, and will develop a brand “chosen by consumers who buy
into a business” rather than a brand “chosen by customers who buy a product.”2) Accelerate growth in our core product categories for which we have a global competitive
advantage, strive for further differentiation from competitors, and construct a strong revenuebase.
3) Promote our four-segment system, delegate authority to each segment, and accelerate on-site
decision-making, thus constructing a cycle of “product development, production and sales”
that fits the market characteristics of each region and realizing speedy business operations.
During the consolidated period under review, we implemented a range of strategies for each of ourbusinesses and functions on the basis of the above business policies. As the result, net sales amounted
to ¥99,380 million. Regarding earnings, operating income was ¥15,316 million, ordinary income wasat ¥16,113 million, and net income attributable to owners of parent was ¥10,643 million.
The main exchange rates used in the preparation of this consolidated period’s financial statements for
the Company’s overseas consolidated subsidiaries (revenues and expenses) are as follows:
・1US$: 106.77 yen (109.02 yen)
・1 CNY: 15.47 yen (15.77 yen)
Note: Figures in parentheses represent the exchange rate in the previous fiscal year.
2) Segment Review
Previously, this report consisted of information from six Group reporting segments: the Domestic
Baby & Mother Care Business, Child Care Service Business, Health & Elder Care Business, China
Business, Singapore Business, and Lansinoh Business. However, from the consolidated fiscal year
under review, the Japan Business segment now aggregates the manufacturing and sales businessconducted outside the Group by domestic subsidiaries included in the segments of Domestic Baby
& Mother Care Business, Child Care Service Business, Health & Elder Care Business, and Other.
2

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

As a result, this report now consists of four segments.
Each segment is outlined below.
Japan BusinessThis segment consists of the Domestic Baby & Mother Care Business, Child Care Service Business,and Health & Elder Care Business. Net sales of the segment amounted to ¥44,977 million, andsegment profit was ¥3,008 million.
In the category of products for babies and mothers, net sales were significantly affected by thefactors such as the complete lack of foreign visitors to Japan. In particular, net sales decreased for
products with high inbound demand. On the other hand, in August, we launched the new product“Microwavable Packed Soft Rice for Babies,” which makes it possible to enjoy freshly-cooked rice
porridge without any additives simply by heating in a microwave oven. Then, in October, welaunched the new product “nautR,” a stroller which pursues the ultimate in pushing comfort andriding comfort.
Regarding child care service, during the consolidated accounting year under review, we currently
provide services at 71 in-company child-care facilities, and shall continue to develop this businessfurther while striving to improve the quality of service content.
In the category of products for health and elder care, there were strong sales of products that support
health management at locations such as private residences and nursing-care facilities. Moving
forward, we will implement thorough measures such as further strengthening sales activities at retailstores and nursing care facilities, and improving the quality of nursing care services.
Moreover, during this fiscal year, we held online events planned as part of our direct communications
program such as our “Breastfeeding Seminar” for expecting mothers and health care professionals.
A total of more than approximately 1,500 people participated in the seminars. Additionally, in order
to alleviate the anxiety felt by mothers and fathers during the ongoing pandemic, we started to provide
support contents via our website and SNS. On “Pigeon Info,” a website that supports women during
pregnancy, in childbirth, and when raising children, we are working to update our products and to
make improvements which further increase convenience for our customers.
China BusinessNet sales of the segment amounted to ¥37,732 million, and segment profit was ¥12,600 million.
Although the China Business was significantly affected by the spread of COVID-19 at the
beginning of the consolidated accounting year under review, sales were strong for our core products
nursing bottles and nipples, as well as for skincare products, etc., which we are targeting for
fundamental research. This was particularly due to rapid recovery in mainland China. We willcontinue to strengthen our efforts focused on the e-commerce market, in which expansion isaccelerating rapidly; leverage SNS and live streaming to invigorate direct communication with
consumers and support the provision of child care information during COVID-19; reinforce sales
promotions at stores and promote distribution of new products; and continue activities at hospitals
and maternity clinics. In these ways we aim to broaden contact points with customers and expand
our operations.
Regarding net sales of the China Business in China on a local currency basis, e-commerce sales
mainly of nursing bottles, skincare products, etc., were strong, and overall net sales exceeded theprevious consolidated accounting year.
Singapore BusinessIn this segment, net sales amounted to ¥12,184 million, and segment profit was ¥1,647 million.
In ASEAN, the Middle East, and India, there were numerous cases in which we were forced torefrain from sales activities due to the large impact of COVID-19 pandemic. Conversely, evenduring the pandemic, we further promoted communication with our customers by proactively
providing information and support. Moving forward, we will continue to promote the development
3Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020and launch of products for the middle class, and actively develop sales and marketing activities withthe aim of achieving market penetration for the Group brands.
Lansinoh BusinessIn this segment, net sales amounted to ¥12,473 million, and segment profit was ¥1,370 million.
In North America, strong sales in the e-commerce channel contributed to the business results.
However, due to the spread of COVID-19, conditions continue to be tough for sales of breast pumps
through the DME (Durable Medical Equipment) channel and the hospital/maternity clinic channel.
Moving forward, in order to further expand business in China (Lansinoh Laboratories Shanghai) andEurope in addition to North America, the Group is strengthening e-commerce, implementing
marketing activities, engaging in brand strengthening activities, etc.
(2) Overview of Financial Position for the Term Under Review(Assets)
As of December 31, 2020, total assets amounted to ¥93,472 million, up ¥2,980 million from theprevious consolidated fiscal year ended December 31, 2019.
Current assets had an increase of ¥3,297 million, and fixed assets had a decrease of ¥317 million.
Current assets increased mainly due to increases in cash and deposits of ¥4,747 million and inmerchandise and finished goods of ¥111 million, despite a decrease in notes and accounts receivable- trade of ¥1,502 million.
Fixed assets decreased mainly due to a ¥437 million decrease in software included in intangible fixed
assets, despite a ¥153 million increase in buildings and structures included in tangible fixed assets.
(Liabilities)
As of December 31, 2020, total liabilities amounted to ¥20,846 million, up ¥818 million from theprevious consolidated fiscal year ended December 31, 2019. Current liabilities had an increase of ¥25
million, while fixed liabilities had an increase of ¥792 million.
Current liabilities increased mainly due to increases in accounts payable of ¥66 million and in income
taxes payable of ¥633 million, despite decreases in notes and accounts payable - trade of ¥142 million,
in electronically recorded obligations - operating of ¥338 million, and in other current liabilities of¥229 million.
Fixed liabilities increased mainly due to increases in deferred tax liabilities of ¥389 million and inother fixed liabilities of ¥272 million.
(Net Assets)
As of December 31, 2020, total net assets amounted to ¥72,625 million, up ¥2,162 million from theprevious consolidated fiscal year ended December 31, 2019.
This increase resulted mainly from increases in retained earnings of ¥2,140 million and in foreign
currency translation adjustment of ¥442 million.
(3) Overview of Cash Flows for the Term Under Review
As of December 31, 2020, cash and cash equivalents (hereinafter referred to as “net cash”)
amounted to ¥37,050 million, up ¥4,634 million compared with the end of the previous fiscal year.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥18,400 million, up from ¥14,098 million of
the previous year. This increase is mainly due to ¥15,836 million in income before income taxes,¥3,815 million in depreciation, and a ¥1,351 million decrease in notes and accounts receivable - trade.
Contrasting factors included a ¥260 million decrease in notes and accounts payable - trade, a ¥42
million increase in inventories, and ¥4,322 million in income taxes paid.
4Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥3,815 million, down from ¥3,995 million of the previous
year. This is mainly due to ¥3,601 million in purchases of tangible fixed assets and ¥222 million inpurchase of intangible fixed assets.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥9,231 million, up from ¥8,734 million of the previous year.
This is mainly due to ¥8,517 million in payment of cash dividends.
Cash flow indicators of the Group are shown below.
FY ended January 31,
2019

FY ended December 31,
2019

FY ended December 31,
2020

Equity Ratio (%)

75.0

74.8

74.8

Equity Ratio based on Market Price (%)

593.1

539.8

544.6

Debt Repayment Term (years)

0.0

0.1

0.1

Interest Coverage Ratio (times)

6,779.1

272.8

564.8

- Equity ratio: Total shareholders’ equity ÷ Total assets- Equity ratio based on market price: Market value of total stock ÷ Total assets- Debt repayment term: Interest-bearing debt ÷ Operating cash flows- Interest coverage ratio: Operating cash flows ÷ Interest paid
Notes:
1. Each index is calculated based on consolidated financial figures.
2. Market value of total stock is calculated by multiplying the stock price (closing price at the end of the term) by the number of shares outstandingat the end of the term (after deduction of treasury stock).
3. Operating cash flow figures are taken from the Cash Flows from Operating Activities section of the Consolidated Statements of Cash Flows.
4. Interest-bearing debt refers to all debt that incurs interest (listed in Consolidated Balance Sheets).
5. For interest paid, interest expenses (listed in Consolidated Statements of Cash Flows) are used.

(4) Future Directions
For the Seventh Medium-Term Business Plan (for the period between the fiscal year ended December
2020 and the fiscal year ending December 2022) of which the consolidated accounting year underreview is the first year of the Plan, the Group will steadily implement the measures grounded on thethree newly formulated themes and business strategies.
In the Japan Business, we aim to improve our market share in existing categories and to develop new
product categories. In the overseas market, which the Company has particularly singled out forcontinued growth, the Company will further promote a three-division organizational framework,
consisting of the China Business, Singapore Business and Lansinoh Business. To secure still further
improvements in business results, we are working hard to promote fast decision-making in theoperations of each business, expand and deepen our presence in existing overseas markets, advance
dynamically into new markets, and expand product lineups in accordance with each market.
In addition, the Company will further strengthen its Group-wide head-office functions at Global Head
Office (GHO) to enhance enterprise value. As part of this, it will clarify the roles and responsibilities
of its four segments (Japan Business, China Business, Singapore Business and Lansinoh Business),which are responsible for business management and growth in each region, and improve
communication with GHO, propelling the Group onto a stable, long-term growth arc. In the
consolidated accounting year ending December 2021, as the second year of the Seventh MediumTerm Business Plan, we will strive for steady achievement of the Plan.
In regards to the Seventh Medium-Term Business Plan (for the period between the fiscal year ended
December 2020 and the fiscal year ending December 2022) which we announced on February 13,
2020, we revised quantitative targets based on performance in the consolidated accounting year underreview and changes in the COVID-19 pandemic.
(5) Income Appropriation Policy and Dividends for the Term Under Review and Next Term
The Pigeon Group regards the return of income to shareholders as an important management priority.
Our policy is to actively return income to shareholders through appropriation of retained earnings and5

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

other means, while reinforcing our financial position based on considerations of medium-termchanges in business conditions and the Group’s business strategies. In addition to strengthening ourfinancial position, we effectively use retained earnings in a number of ways to fortify our operationalbase and improve future Group earnings. These include investing in new businesses for further
growth and research and development, as well as investing in production facilities to strengthen our
corporate brand, raise production capacity, reduce costs, and enhance product quality.
With respect to targets of shareholder return, under the Seventh Medium-Term Business Plan (for theperiod between the fiscal year ended December 2020 and the fiscal year ending December 2022)
announced in February 2020, we aim to increase dividends every fiscal year compared to previous
year. We are also targeting a consolidated total shareholder return of 55%. To this end, we havesought to further strengthen and upgrade measures for returning profits to all shareholders.
The distribution of dividends in the period under review reflects the above policies and targets. The
Group distributed an interim dividend of ¥36 per share (ordinary dividend of ¥36). For the year-end
dividend, the Group forecasts a dividend of ¥36 per share (ordinary dividend of ¥36). As a result, theannual dividend for the term under review will total ¥72 per share (ordinary dividend of ¥72), a pershare increase by ¥2 from the previous year.
The annual dividend for the next term will total ¥74 per share, a per share increase of ¥2 from theterm under review based on the targets of shareholder return (increase dividends every fiscal year
compared to previous year and a consolidated total shareholder return of 55%) set out under theSeventh Medium-Term Business Plan.
2. Basic Approach for the Selection of Accounting Standards
For the time being, our Group will continue to prepare its consolidated financial statements based onJapanese standards out of consideration of comparability from period to period and between
companies on consolidated financial statements.
In terms of the application of International Financial Reporting Standards (IFRS), we will takeappropriate measures taking into consideration various circumstances in Japan and overseas.

6

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

3. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheets(Millions of yen)

ASSETS
I. Current Assets:
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Receivables
Other current assets
Allowance for doubtful accounts
Total Current Assets
II. Fixed Assets:
1. Tangible Fixed Assets:
Buildings and structures
Accumulated depreciation and accumulated
impairment loss
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and accumulated
impairment loss
Tools, furniture and fixtures, net
LandConstruction in progress
Total Tangible Fixed Assets
2. Intangible Fixed Assets:
Goodwill
Software
Other intangible fixed assets
Total Intangible Fixed Assets
3. Investments and Other Assets:
Investment securities
Bankruptcy claims
Deferred tax assets
Insurance reserve
Other
Allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets

7

At December 31, 2019

At December 31, 2020

32,416
16,588
8,144
400
2,666
723
1,210
(216)
61,93337,16315,085
8,256
350
2,768
746
1,037
(178)
65,231

16,697

17,482(9,639)(10,270)

7,058
18,932(12,887)
6,044
7,330

7,212
19,313(13,390)
5,923
7,576

(5,378)(5,493)

1,952
5,865
1,573
22,494

2,083
6,009
2,034
23,262

867
2,484
511
3,863

647
2,047
263
2,957

950
0
594
165
491
(0)
2,200
28,55890,491

687
－
684
165
483
(0)
2,020
28,241
93,472

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

At December 31,
2019
LIABILITIES
I. Current Liabilities:
Notes and accounts payable - trade
Electronically recorded obligations - operating
Accounts payable
Income taxes payable
Accrued bonuses to employees
Provision for sales returns
Provision for loss on litigation
Other current liabilities
Total Current Liabilities
II. Fixed Liabilities:
Deferred tax liabilities
Net defined benefit liability
Provision for share-based remuneration
Other fixed liabilities
Total Fixed Liabilities
Total Liabilities
NET ASSETS
I. Shareholders’ Equity:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total Shareholders’ Equity
II. Accumulated Other Comprehensive Income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total Accumulated Other Comprehensive Income
III. Non-controlling Interests
Total Net Assets
Total Liabilities and Net Assets

8(Millions of yen)
At December 31,
2020

4,900
2,009
2,660
1,272
928
41
8
3,817
15,638

4,757
1,670
2,727
1,906
952
53
7
3,588
15,664

2,642
417
98
1,231
4,389
20,028

3,031
440
205
1,503
5,181
20,846

5,199
5,179
58,979(1,088)68,2695,199
5,179
61,120(1,478)70,020

25
(572)
(547)
2,741
70,46390,491

13
(129)
(116)
2,722
72,62593,472

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)

I. Net Sales
II. Cost of Sales
Gross profit
Reversal of provision for sales returns
Provision for sales returns
Adjusted gross profit
III. Selling, General and Administrative Expenses
Operating Income
IV. Non-operating Income:Interest income
Dividend income
Subsidy income
Other non-operating income
Total Non-operating Income
V. Non-operating Expenses:
Interest expenses
Sales discounts
Foreign exchange losses
Other non-operating expenses
Total Non-operating Expenses
Ordinary Income
VI. Extraordinary Income:Gain on sales of fixed assets
Gain on sales of investment securities
Total Extraordinary Income
VII. Extraordinary Loss:
Loss on sales of fixed assets
Loss on disposal of fixed assets
Impairment loss
Loss on sales of shares of subsidiaries and associates
Expenses related to voluntary product recall
Loss on sales of golf club memberships
Total Extraordinary Loss
Income before Income Taxes
Income taxes - current
Income taxes - deferred
Total Corporate Income Tax
Net Income
Net Income Attributable to Non-controlling Interests
Net Income Attributable to Owners of Parent

9

Year Ended
December 31, 2019
100,017
49,20750,8093140
50,80033,727
17,072(Millions of yen)
Year Ended
December 31, 2020
99,38049,45049,92938
47
49,921
34,605
15,316

171
15
759
190
1,136

156
104
727
418
1,406

51
233
596
42
924
17,284

32
236
271
69
608
16,113

7
113
121

4
33
38

9
100
189
－
－
1
300
17,104
5,067
267
5,335
11,769230
11,538

36
63
16
167
26
4
315
15,836
4,715
261
4,976
10,860216
10,643

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

(Consolidated Statement of Comprehensive Income)Net Income
Other Comprehensive Income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total Other Comprehensive Income
Comprehensive Income(Breakdown)Comprehensive income on parent company
Comprehensive income on non-controlling interests

10

Year Ended
December 31, 201911,769(Millions of yen)
Year Ended
December 31, 2020
10,8603479
483
12,253

(12)
282
269
11,12911,880372

11,07256

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

(3) Statement of Changes in Consolidated Shareholders’ Equity
Fiscal Year Ended December 31, 2019
(Millions of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of
the period
Changes during the period
Dividends from surplus
Net income attributable toowners of parent
Acquisition of treasury
stock
Changes in items other thanshareholders’ equity (net)Total changes during theperiodBalance at the end of current
periodCapitalsurplus5,199

Retainedearnings

5,179

55,704

Treasury
stock

Total
shareholders’equity(951)

65,131(8,263)(8,263)

11,538

11,538
(137)

(137)

－

－

3,275

(137)

3,138

5,199

5,179

58,979(1,088)68,269

Accumulated other comprehensive income
Total
NonValuation
Foreignaccumulated
controlling
difference on
currency
otherinterests
available-fortranslation
comprehensive
sale securities
adjustment
incomeBalance at the beginning of
the period
Changes during the period
Dividends from surplus
Net income attributable toowners of parent
Acquisition of treasury
stock
Changes in items other thanshareholders’ equity (net)Total changes during theperiodBalance at the end of current
period

21

(910)

(888)

2,339

Total net
assets

66,582(8,263)
11,538
(137)

3

338

341

401

743

3

338

341

401

3,881

25

(572)

(547)

2,741

70,46311

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

Fiscal Year Ended December 31, 2020
(Millions of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of
the period
Changes during the period
Dividends from surplus
Net income attributable toowners of parent
Acquisition of treasury
stock
Changes in items other thanshareholders’ equity (net)Total changes during theperiodBalance at the end of current
periodCapitalsurplus5,199

Retainedearnings

5,179

58,979Treasury
stock

Total
shareholders’equity(1,088)68,269(8,503)(8,503)

10,643

10,643
(389)

(389)

－

－

2,140

(389)

1,750

5,199

5,179

61,120(1,478)70,020

Accumulated other comprehensive income
Total
NonValuation
Foreignaccumulated
controlling
difference on
currency
otherinterests
available-fortranslation
comprehensive
sale securities
adjustment
incomeBalance at the beginning of
the period
Changes during the period
Dividends from surplus
Net income attributable toowners of parent
Acquisition of treasury
stock
Changes in items other thanshareholders’ equity (net)Total changes during theperiodBalance at the end of current
period

25

(572)

(547)

2,741

Total net
assets70,463(8,503)
10,643
(389)

(12)

442

430

(18)

411

(12)

442

430

(18)

2,162

13

(129)

(116)

2,722

72,62512

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

(4) Consolidated Statements of Cash Flows

I. Cash Flows from Operating Activities:
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in accrued bonuses to employees
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors and corporate
auditors’ retirement benefits
Increase (decrease) in provision for share-based
remuneration
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Loss (gain) on sales of fixed assets
Loss on disposal of fixed assets
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Loss (gain) on sales of investment securities
Increase (decrease) in accounts payable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in claims provable inbankruptcy/rehabilitation
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net Cash Provided by (Used in) Operating Activities
II. Cash Flows from Investing Activities:
Purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchase of intangible fixed assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of insurance funds
Proceeds from maturity of insurance funds
Payments for lease deposits
Collection of lease deposits
Payments into time deposits
Proceeds from sales of shares of subsidiaries and associate
Other
Net Cash Provided by (Used in) Investing Activities

13

Year Ended
December 31, 2019

(Millions of yen)
Year Ended
December 31, 2020

17,104
3,586
189
181
16
(37)
88

15,836
3,815
16
157
(29)
53
47

(599)

－

98

107

(187)
51
0
1
100

(260)
32
20
31
63

(1,791)

1,351

(713)
595
(113)
(317)
(79)

(42)
(260)
134
88
233

3

0

1,622
19,803171(22)(5,854)
14,0981,058
22,456279(12)(4,322)
18,400(3,413)
71
(606)
(157)
209
(0)
12
(9)
9
－
－
(111)
(3,995)(3,601)
24
(222)
(2)
130
(0)
－
(22)
17
(115)
8
(31)
(3,815)

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

III. Cash Flows from Financing Activities:
Payment of cash dividends
Dividends paid to non-controlling interests
Purchase of treasury stock
Other
Net Cash Provided by (Used in) Financing Activities
IV. Effect of Exchange Rate Change on Cash and Cash
Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents
VI. Cash and Cash Equivalents at Beginning of Period
VII. Cash and Cash Equivalents at End of Period

14

Year Ended
December 31, 2019

(Millions of yen)
Year Ended
December 31, 2020

(8,230)
(121)
(137)
(245)
(8,734)(8,517)
(76)
(389)
(247)
(9,231)

98

(718)

1,467
30,94932,416

4,634
32,41637,050Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

(5) Notes on Consolidated Financial Statements(Notes Regarding Going Concern Assumptions)Not applicable.
(Additional Information)(BIP Trust System for Compensation of Directors)
Pursuant to a resolution of the 62nd Ordinary General Meeting of Shareholders (fiscal year ended
January 31, 2019), convened on April 25, 2019, Pigeon has introduced a performance share plan for
directors (not including outside directors). The purpose of this system is to clarify the relationshipbetween directors’ compensation and the Group’s business results and shareholder value and toenhance awareness of contributions to the improvement of the business results of the Group and the
expansion of its enterprise value over the medium-to-long term.
(1) Overview of the BIP trust system for compensation of directors
This plan adopts a framework called the board incentive plan (BIP) trust for compensation of
directors. Similar to systems in North America and Europe such as performance shares, which
tie compensation to business results, and restricted stock, which compensates directors withshares whose transfer is restricted, the system provides directors with Company shares, ortheir equivalent value at conversion, tied to the director’s rank and the Company’s degree ofattainment of business-result targets. In principle the compensation is transferred or paid to
directors upon retirement.
(2) Company shares remaining in the trust
Company shares remaining in the trust are appropriated as treasury stock in net assets, basedon the book value of the trust (not including the amounts of incidental expenses). The bookvalue of the treasury stock in question as of the end of the fiscal year under review is ¥525
million and the number of shares is 124,800 shares.

15

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

(Segment Information)
1. Summary of Reporting Segments
In respect of the Company’s reporting segments, these are, of the constituent units in the Group,
those for which separate financial information are available and those that are the subject of regularexamination by the board of directors to make decisions on management resource allocation andassessment of performance.
Previously, this report consisted of information from six Group reporting segments: the Domestic
Baby & Mother Care Business, Child Care Service Business, Health & Elder Care Business, China
Business, Singapore Business, and Lansinoh Business. However, as a result of the reorganizationof December 16, 2019, from the consolidated first quarter of the current fiscal year, the Japan
Business segment now aggregates the manufacturing and sales business conducted outside theGroup by domestic subsidiaries included in the segments of Domestic Baby & Mother Care
Business, Child Care Service Business, Health & Elder Care Business, and Other. As a result, thisreport now consists of four segments.
Segment information for the previous consolidated fiscal year was created using the calculation
method for segment profit after the changes were made.
(i) Japan BusinessThis segment is engaged in the manufacture and sales of childcare products and feminine products,
provision of childcare services, manufacture and sales of health care products and nursing careproducts, and provision of nursing care services in Japan.
(ii) China BusinessThis segment is engaged in the manufacture and sales of child care products and feminine products
in China, Hong Kong, Russia, South Korea, Taiwan, and some other countries.
(iii) Singapore BusinessThis segment is engaged in the manufacture and sales of childcare products and feminine productsin the ASEAN member countries of Indonesia, Malaysia, Singapore and Thailand, as well as othercountries such as Australia, India and the countries of the Middle East.
(iv) Lansinoh BusinessThis segment is engaged in the manufacture and sales of childcare products and feminine products
in China, Germany, Turkey, the United Kingdom, the United States and other countries.
2. Calculation Method for the Values in Segmental Sales, Profits or Losses, Assets and Other Items
The methodology adopted in calculating the segmental sales, profits or losses, assets and other items
is generally the same as in “Basis for Preparing Consolidated Financial Statements”.

16Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

3. Information Regarding Net Sales, Profit (Loss), Assets and Other Items in Each Reporting Segment
Fiscal Year Ended December 31, 2019
(Millions of yen)
Reporting Segment
Singapore
Business

Total

LansinohBusinessAmountAccounted on
Consolidated
Financial
Statements(Note 5)Adjustments(Note 1)
(Note 2)
(Note 3)(Note 4)

Japan Business

China BusinessNet sales to externalcustomers

42,19336,7288,050

13,045100,017－

100,017

Internal sale or exchange
between segments

2,367

621

5,537

169

8,696

(8,696)－

Total

44,56037,35013,58813,214

108,713(8,696)

100,017

Segment Profit

4,084

12,685

1,965

1,823

20,559(3,486)

17,072

Segment Assets

24,462

15,893

9,384

5,732

55,47235,01990,491Net Sales

Other Items
Depreciation
902
1,029
1,006
130
3,069
516
(Note 6)
Amortization of Goodwill
－
－
175
6
181
－
Increase in Tangible Fixed
Assets and Intangible Fixed
1,011
1,363
1,137
318
3,830
229
Assets(Note 7)(Notes)1. The negative amount of ¥3,486 million from adjustments in segment profit includes negative ¥44 million in elimination of intersegment
transactions and negative ¥3,441 million in non-allocable operating expenses. Non-allocable operating expenses are mainly administrative
costs of our Group.
2. The amount of ¥35,019 million in adjustments in segment assets includes negative ¥2,345 million in eliminations of inter-segment transactions,and ¥37,364 million in the entire company assets consisting principally of investments of surplus of the parent company (Cash and Deposits),
long term investment assets (Investment Securities and the Like) and assets relating to the administrative area.
3. Depreciation adjustments are depreciations relating the entire company assets.
4. Adjustments of increase in tangible fixed assets and intangible fixed assets relate to the entire company assets.
5. Segment profit has been adjusted with the operating income in the consolidated financial statements.
6. Amortization relating to long term pre-paid expenses are included in the depreciation.
7. Increases in tangible fixed assets and intangible fixed assets include increases in long term pre-paid expenses.

17

3,586
181
4,059

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

Fiscal Year Ended December 31, 2020
(Millions of yen)
Reporting Segment
Singapore
Business

Total

LansinohBusinessAmountAccounted on
Consolidated
Financial
Statements(Note 5)Adjustments(Note 1)
(Note 2)
(Note 3)(Note 4)

Japan Business

China BusinessNet sales to externalcustomers

42,17537,472

7,262

12,46999,380－99,380Internal sale or exchange
between segments

2,801

259

4,921

4

7,956

(7,986)－

Total

44,97737,732

12,184

12,473

107,367(7,986)

99,380

Segment Profit

3,008

12,600

1,647

1,370

18,627(3,310)15,316

Segment Assets

22,78115,808

9,147

6,164

53,901

39,57093,472Net Sales

Other Items
Depreciation
992
1,140
940
174
3,247
567
(Note 6)
Amortization of Goodwill
－
－
151
6
157
－
Increase in Tangible Fixed
Assets and Intangible Fixed
671
1,436
1,735
158
4,002
182
Assets(Note 7)(Notes)1. The negative amount of ¥3,310 million from adjustments in segment profit includes ¥31 million in elimination of intersegment transactions
and negative ¥3,342 million in non-allocable operating expenses. Non-allocable operating expenses are mainly administrative costs of ourGroup.
2. The amount of ¥39,570 million in adjustments in segment assets includes negative ¥1,682 million in eliminations of inter-segment transactions,and ¥41,253 million in the entire company assets consisting principally of investments of surplus of the parent company (Cash and Deposits),
long term investment assets (Investment Securities and the Like) and assets relating to the administrative area.
3. Depreciation adjustments are depreciations relating the entire company assets.
4. Adjustments of increase in tangible fixed assets and intangible fixed assets relate to the entire company assets.
5. Segment profit has been adjusted with the operating income in the consolidated financial statements.
6. Amortization relating to long term pre-paid expenses are included in the depreciation.
7. Increases in tangible fixed assets and intangible fixed assets include increases in long term pre-paid expenses.

18

3,815
157
4,185

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2020

(Per Share Information)
Previous fiscal year

Current fiscal year

(February 1 to December 31, 2019)(January 1 to December 31, 2020)

Net Assets per ShareNet Income per Share¥565.64¥96.37¥607.6¥88.93(Notes) 1. With respect to diluted net income per share, there are no latent shares, thus, has not been disclosed.
2. Company shares held by the BIP trust for compensation of directors are included in the treasury stock subtracted from thetotal number of shares outstanding at the period-end when calculating the net assets per share (33,600 shares for theprevious fiscal year; 124,800 shares for the current fiscal year).
Furthermore, company shares held by the BIP trust for compensation of directors are included the treasury stock
subtracted in the calculation of the average number of shares outstanding during the period when calculating the net
income per share (20,220 shares for the previous fiscal year; 85,180 shares for the current fiscal year).
3. The basis for the calculation of the net income per share is as follows.

Previous fiscal year

Current fiscal year

(February 1 to December 31, 2019)(January 1 to December 31, 2020)

Net Income Attributable to Owners of
Parent (¥ millions)
Amount Not Attributable to Ordinary
Shareholders (¥ millions)
Net Income Attributable to Owners of
Parent Relating to Ordinary Shares(¥ millions)Average Number of Ordinary Shares
During the Term (shares)(Notes)(Material Subsequent Events)
Not applicable.

19

11,538

10,643－－

11,538

10,643

119,740,515

119,675,451