Summary of Financial Results
for the First Quarter of Fiscal Year Ending January 2018
[Japanese Standards] (Consolidated)
June 5, 2017
Name of Listed Company: Pigeon Corporation (Stock code: 7956)
Listing: First Section, Tokyo Stock Exchange
Website: www.pigeon.co.jp
Representative: Shigeru Yamashita (President and COO)
Contact person: Tsutomu Matsunaga (Managing Officer, Corporate Planning & Administration Division)/Tel: +81-3-3661-4188
Scheduled Filing Date of Quarterly Report: June 9, 2017
Scheduled Commencement Date of Dividend Payments: —Preparation of Any Additional Explanatory Materials for Quarterly Financial Results: None
Holding of Any Briefing Session for Quarterly Financial Results: None

1. Consolidated Business Performance for the First Quarter of Fiscal YearEnding January 31, 2018 (February 1 to April 30, 2017)(1) Consolidated Operating Results (cumulative)

1Q ended April 30, 2017

(Millions of yen, rounded down, % figures denote year-on-year change)
Net Income
Net Sales
Operating Income
Ordinary Income
Attributable to
Owners of Parent
23,977
5.4%
4,940
32.4%
4,858
35.0%
3,473
39.9%

1Q ended April 30, 2016
22,746
4.3%(Note) Comprehensive income: 1Q ended April 30, 2017
1Q ended April 30, 2016

3,732
3.8%
3,597
¥3,316 million (116.8%)¥1,529 million (32.9% negative)

Net Income per Share (¥)(1.8)%

2,482

0.5%

Diluted Net Income Per
Share (¥)

1Q ended April 30, 2017

29.00

－

1Q ended April 30, 2016

20.72

－

(2) Consolidated Financial Position
Total Assets

Net Assets

1Q ended April 30, 2017
72,607
FY ended January 31, 201778,889(Reference) Shareholders’ Equity: 1Q ended April 30, 2017
FY ended January 31, 2017

Equity Ratio (%)

53,63753,736¥52,286 million¥52,387 million

72.0
66.4

2. Cash Dividends
Annual Dividend (¥)
1Q-end2Q-endFY ended January 31, 2017－
25.00
FY ending January 31, 2018－
FY ending January 31, 2018
28.00
(Forecast)(Note) Changes in dividend forecasts to the most recent announcement: None

3Q-endYear-end

Total

－

28.00

53.00

－

28.00

56.00

3. Consolidated Business Performance Forecasts for the Fiscal YearEnding January 31, 2018 (February 1, 2017 to January 31, 2018)
Net Sales
Millions of Yen(% figures denote year-on-year change from the previous term)
Net Income
Net Income per
Operating Income
Ordinary Income
Attributable to
Share
Owners of Parent% Millions of Yen% Millions of Yen

Full year
99,8005.5%
17,0006.1%(Note) Revision of forecasts to the most recent announcement: None

17,000% Millions of Yen

3.3%

11,800

%

6.1%

Yen

98.53

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) Application of any accounting procedures specific to preparation of quarterly consolidated financial statements:
None(3) 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
(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the period-end (including treasury stock)
1Q ended April 30, 2017: 121,653,486
FY ended January 31, 2017: 121,653,486
2) Number of treasury stock at the period-end
1Q ended April 30, 2017: 1,892,017
FY ended January 31, 2017: 1,891,943
3) Number of average shares outstanding during the period (quarter accumulation)
1Q ended April 30, 2017: 119,761,516
1Q ended April 30, 2016: 119,761,829* This quarterly financial results report is exempt from quarterly review.
* 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
and future 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
the section “(3) Explanation of Consolidated Performance Forecast and Other Future Predictions” in “1. Qualitative
Information Regarding the Financial Results for the Current Quarter” on page 4 regarding conditions which arepreconditions for business performance forecasts and cautions for using the business performance forecast.

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

Table of Contents of the Appendix
1. Qualitative Information Regarding the Financial Results for the Current Quarter ........................ 2(1) Explanation of Business Performance ..................................................................................... 2(2) Explanation of Financial Position ........................................................................................... 4(3) Explanation of Consolidated Performance Forecast and Other Future Predictions ................... 4
2. Issues Regarding Summary Information (Notes) ......................................................................... 5(1) Significant Changes in Subsidiaries During the Period Under Review ................................... .5(2) Application of Any Accounting Procedures Specific to Preparation of Quarterly
Consolidated Financial Statements ........................................................................................ .5
3. Quarterly Consolidated Financial Statements .............................................................................. 6(1) Quarterly Consolidated Balance Sheets ................................................................................... 6(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income .......................................................................................................... 8
Quarterly Consolidated Statement of Income(Scope of Consolidation of First Quarter) ............................................................................. 8
Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of First Quarter) .............................................................................. 9(3) Notes on Consolidated Financial Statements ......................................................................... 10(Notes Regarding Going Concern Assumptions) ................................................................... 10(Notes Regarding Substantial Changes in Shareholders’ Equity) ........................................... 10(Segment Information) .......................................................................................................... 111

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

1. Qualitative Information Regarding the Financial Results for the Current Quarter(1) Explanation of Business Performance
During the consolidated first three-month period under review, although personal consumption
lacked momentum, Japan’s economy continued to recover at a gradual pace as a whole, thanks tocontinued recovery in corporate activities. On the other hand, conditions in the world economy
remained uncertain. While overall inflation indices in the developed countries have risen due torecovery in resource prices, there is still the medium-term downward risk of deceleration ineconomic growth, caused by slackening export and import trade and foreign investment as well as
mounting geopolitical tension.
Amid such economic circumstances, the Group developed the sixth medium-term business plan (forthe period between the fiscal year ending January 2018 and the fiscal year ending January 2020),
under the slogan of “Building our dreams into the future – by creating a bridge towards the Global
Number One manufacturer of baby products –,” and has made efforts toward our further growth in
the first year of this plan. In addition, we have set the following three basic strategies that would
help us to expand the Group's business and improve its management quality.
1) Based on the Pigeon Way, create and implement all kinds of measures to achieve the goal of
becoming ‘an indispensable company’ for the society and make our Vision “to be the baby
product manufacturer most trusted by the world’s babies and families, i.e. ‘Global NumberOne’” come true.
2) A further increase in corporate value will be pursued through improvement in profitability andefficiency of the business, and maximization of cash flows. The organizational structure,
management system and governance system will also be put in place and reinforced to ensuresustainable growth from a medium to long-term perspective.
3) During the three years of the sixth medium-term business plan, invest management resources
giving priority to the key products and carry out strategic investments, laying solid
foundations for the double-digit growth of Pigeon Group in the future.
During the consolidated first three-month period under review, we implemented strategies for eachof our business and function on the basis of the above business policies. As the result, net sales
amounted to ¥23,977 million (up 5.4% YOY), as supported by sales increases mainly in China andNorth America. Regarding earnings, operating income rose to ¥4,940 million (up 32.4% YOY)
thanks to a reduction of approximately 3.2 percentage points in the sales cost ratio from theprevious term. Ordinary income recorded ¥4,858 million (up 35.0% YOY), and net income
attributable to owners of parent also increased to ¥3,473 million (up 39.9% YOY).
The main exchange rates used in the preparation of this first quarter’s financial statements for theCompany’s overseas consolidated subsidiaries (revenues and expenses) are as follows:
・1US$: 113.60 yen (115.35 yen)
・1 CNY: 16.56 yen (17.60 yen)
Note: Figures in parentheses represent the exchange rate in the same period of the previous fiscal
year.
Our Group has a total of five reporting segments identified as: “Domestic Baby and Mother Care
Business,” “Child Care Service Business,” “Health and Elder Care Business,” “Overseas Business,”and “China Business.” Each segment is outlined below.
Please take note that in order to explain the profit status of each segment in a more detailed manner,
we decided to record expenses in non-allocable operating expenses associated with the Researchand Development Department, which had been included in the Adjustment section so far, in thesegment profit of each reporting segment starting from this consolidated first three-month period.
In addition, we have made year-over-year comparisons by converting the figures in the same periodof the last year into the figures calculated in accordance with the new calculation method after the2

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

above revision.
Domestic Baby and Mother Care BusinessNet sales of the segment amounted to ¥8,729 million (up 3.3% YOY). Segment profits increased to¥1,752 million (up 28.8% YOY), thanks to enhancement in operation ratio of manufacturing plants
as the result of a net sale increase, as well as effective use of selling, general and administrative
expenses.
In this segment, we released “Baby Petit Ice,” the first hand-made ice cream for babies, in February.
In addition, we released “Moisture Body Care Cream” for expectant mothers, which provides
24-hour moisture retention with a single treatment per day, and sales of the products have expanded
at a good rate. Moreover, during the period under review, we have held a number of events planned
as a part of our direct communications program such as our “Breast Feeding Seminar” for women
expecting to give birth in the near future and a seminar about breastfeeding while parenting for
health care professionals, organized 4 times. A total of approximately 500 women have participated.
On "Pigeon Info," which is a site that supports women during pregnancy, in childbirth, and thoseraising children, we are continuing updates of Pigeon's merchandise available, and do a range ofmeasures to make the portal even more convenient to use for our customers by various
improvements: for example, we provide the video introducing easy-to-push baby strollers in“Happy Travel,” Pigeon’s site focusing on baby strollers.
Child Care Service BusinessNet sales of the segment amounted to ¥1,931 million (up 5.1% YOY). Segment profits increased to¥53 million (up 34.5% YOY). We have launched two in-company child-care facilities, which weare currently operating while striving to improve the service quality.
Health and Elder Care BusinessNet sales of the segment amounted to ¥1,681 million (down 6.2% YOY), due to weak sales of coreproducts such as bottom wipes, body wipes and skin care products, which faced fiercer competitionat retail store fronts, and segment profits decreased to ¥97 million (down 21.9% YOY). We willcontinue to focus on strengthening of sales activities toward retail stores and nursing care facilities
further, and will ensure that the quality of our nursing care services is improved.
Overseas BusinessNet sales of the segment increased to ¥5,845 million (up 7.3% YOY). Segment profits also
increased to ¥1,606 million (up 49.9% YOY), thanks to the improvement of gross profit margin, as
well as effective use of selling, general and administrative expenses. In North America and Europe,
where we operate business mainly through Lansinoh Laboratories, Inc., one of our consolidated
subsidiaries, sales of breastfeeding-related products including our flagship products such as nipple
care cream, breast pads and milk bags are growing at a good pace, and sales of breast pumps arealso expanding in North America where we supply the products through a new sales channel. In
addition, sales activity in China (Lansinoh Laboratories Shanghai), our new initiative started lastyear, is also expanding steadily, and we will make efforts to expand our business there.
China BusinessDespite the continuing trend of yen appreciation against the Chinese Yuan, net sales in this segment
increased to ¥7,133 million (up 15.7% YOY), because sales of core products such as nursing bottles
and nipples remained strong, particularly in the E-commerce channel. Segment profits increased to¥2,126 million (up 25.9% YOY).
In this segment, we will continue to strengthen our activities toward the growing E-commercemarket. In addition, we will aim to expand our operations using social networking services for
invigoration of direct communication with consumers, and will continue to reinforce sales
promotions at stores and offline sales activities aimed at hospitals and maternity clinics.
3

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

Other Businesses
Net sales of the segment amounted to ¥323 million (down 0.8% YOY), and the segment profits
stood at ¥35 million (down 17.4% YOY).
(2) Explanation of Financial Position
1) Assets
As of April 30, 2017, our Group recorded total assets of ¥72,607 million, down ¥6,281 million fromthe previous consolidated fiscal year ended January 31, 2017. Both current and fixed assets
decreased by ¥5,682 million and ¥599 million, respectively.
Current assets decreased mainly due to a decrease in cash and deposits of ¥7,340 million, despite
increases in merchandise and finished goods of ¥906 million and in raw materials and supplies of¥476 million.
Fixed assets diminished due to decreases in buildings and structures as well as in other tangible
fixed assets of ¥155 million and ¥266 million, respectively.
2) Liabilities
As of April 30, 2017, our Group recorded total liabilities of ¥18,970 million, down ¥6,182 million
from the previous consolidated fiscal year ended January 31, 2017. Both current and fixed liabilities
decreased by ¥5,791 million and ¥390 million, respectively.
Current liabilities decreased mainly due to decreases in short-term borrowings and in current
portion of long-term loans payable of ¥699 million and ¥5,000 million, respectively, despite
increases in notes and accounts payable - trade of ¥341 million, in electronically recorded
obligations – operating of ¥342 million and in accrued bonuses to employees of ¥343 million.
Fixed liabilities decreased, mainly because provision for special extra retirement payments
decreased by ¥208 million after transferring it to current liabilities, and other fixed liabilities
decreased by ¥203 million.
3) Net Assets
As of April 30, 2017, our Group recorded total net assets of ¥53,637 million, down ¥99 million
from the previous consolidated fiscal year ended January 31, 2017.
Net assets decreased mainly due to a decrease in foreign currency translation adjustment of ¥216
million, despite an increase in retained earnings of ¥119 million.
(3) Explanation of Consolidated Performance Forecast and Other Future Predictions
For the "Sixth Medium-Term Business Plan (for the period between the fiscal year ending January
2018 and the fiscal year ending January 2020)," our Group has put up the following slogan,"Building our dreams into the future – by creating a bridge towards the Global Number One
manufacturer of baby products –."We will further develop and enhance our business operating system, while pursuing in the
improvement of management quality and steadily implementing the measures grounded on the
newly formulated strategies for each business segment and the functional strategy that serves as thefoundation thereof. We find particularly important to continue to expand and enrich business in theexisting markets regarding the Overseas and China businesses, which our Group still positions as
growing fields. Moreover, we will aim at further improvement in business performance throughactively pursuing new markets. In this consolidated fiscal year, the first year of our sixth
medium-term business plan, we will strive to ensure completion of our plans.

4

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

2. Issues Regarding Summary Information (Notes)(1) Significant Changes in Subsidiaries During the Period Under Review
Not applicable.
(2) Application of Any Accounting Procedures Specific to Preparation of Quarterly
Consolidated Financial Statements
Not applicable.

5Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
At January 31, 2017
ASSETS
I. Current Assets:
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total Current Assets
II. Fixed Assets:
1. Tangible Fixed Assets:
Buildings and structures, net
Land
Other tangible fixed assets, net
Total Tangible Fixed Assets
2. Intangible Fixed Assets:
Goodwill
Other intangible fixed assets
Total Intangible Fixed Assets
3. Investments and Other Assets:
Other
Allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets
LIABILITIES
I. Current Liabilities:
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of long-term loans payable
Income taxes payable
Accrued bonuses to employees
Reversal of reserve for returned products
Provision for loss on litigation
Provision for special extra retirement payments
Other current liabilities
Total Current Liabilities
II. Fixed Liabilities:
Net defined benefit liability
Provision for directors and corporate
auditors’ retirement benefits
Provision for special extra retirement payments
Other fixed liabilities
Total Fixed Liabilities
Total Liabilities

6

At April 30, 201730,052
16,103
5,328
261
2,013
1,512
(26)
55,24422,711
16,015
6,234
180
2,489
1,951
(20)
49,562

6,989
5,683
7,590
20,263

6,834
5,685
7,323
19,843

51
1,055
1,106

48
1,096
1,145

2,293
(19)
2,273
23,64478,889

2,076
(19)
2,056
23,04572,607

4,857
1,693
699
5,000
2,324
929
73
37
－
5,766
21,381

5,199
2,035
－
－
1,524
1,272
69
35
208
5,244
15,590

131

138

445

457

208
2,986
3,770
25,152

－
2,783
3,379
18,970Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

(Millions of yen)
At January 31, 2017

At April 30, 2017

NET ASSETS
I. Shareholders’ Equity:
Capital stock

5,199

5,199

Capital surplus

5,179

5,179

Retained earnings

42,28042,400Treasury stock

(948)

(948)

Total Shareholders’ Equity

51,711

51,830

Valuation difference on available-for-sale securities

47

44

Foreign currency translation adjustment

628

411

Total Accumulated Other Comprehensive Income

676

456

III. Non-controlling Interests

1,349

1,350

Total Net Assets

53,736

53,637

Total Liabilities and Net Assets

78,88972,607

II. Accumulated Other Comprehensive Income:7

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income
Quarterly Consolidated Statement of Income(Scope of Consolidation of First Quarter)(Millions of yen)

I. Net Sales
II. Cost of Sales
Gross profit
Reversal of reserve for returned products
Transfer to reserve for returned products
Adjusted gross profit
III. Selling, General and Administrative Expenses
Operating Income
IV. Non-operating Income:Interest income
Share of profit of entities accounted for using
equity method
Other non-operating income
Total Non-operating Income
V. Non-operating Expenses:
Interest expense
Sales discounts
Share of loss of entities accounted for using
equity method
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
Loss on liquidation of subsidiaries and associates
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

8

Three months endedApril 30, 2016
22,746
12,348
10,39850
56
10,391
6,659
3,732

Three months endedApril 30, 2017
23,977
12,263
11,71470
69
11,715
6,774
4,940

41

40

－

5

47
88

67
113

20
89

4
92

0

－

106
6
223
3,597

90
7
195
4,858

0
－
0

1
87
88

0
2
58
61
3,537
1,649
(643)
1,005
2,531
49
2,482

0
13
－
14
4,933
1,718
(315)
1,403
3,529
56
3,473

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of First Quarter)(Millions of yen)

Net Income
Other Comprehensive Income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total Other Comprehensive Income

Quarterly Comprehensive Income

Three months endedApril 30, 2016
2,531

Three months endedApril 30, 2017
3,529

(3)

(2)

(998)
(1,001)
1,529

(210)
(213)
3,316

1,536

3,253

(6)

63

(Break down)

Quarterly comprehensive income on parent
company
Quarterly comprehensive income on
non-controlling interests

9Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

(3) Notes on Consolidated Financial Statements(Notes Regarding Going Concern Assumptions)Not applicable.
(Notes Regarding Substantial Changes in Shareholders’ Equity)
Not applicable.

10Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

(Segment Information)
Three months ended April 30, 2016
1. Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)
Reporting Segment
Domestic
Child Care
Baby andService
Mother Care
Business
Business
Net sales
Net sales toexternalcustomers
Internal sales
or exchange
betweensegments
Total
Segment profit

Health andElder Care
Business

Overseas
Business

China
Business

Subtotal

Other
Businesses(Note 1)

Total

AmountAccounted on
Quarterly
Adjustments
Consolidated(Note 2)
Statement of
Income(Note 3)

8,451

1,838

1,792

4,228

6,109

22,420326

22,746－

22,746

－

－

－

1,217

54

1,271

－

1,271

(1,271)

－

8,451

1,838

1,792

5,446

6,163

23,692326

24,018(1,271)

22,746

1,359

39

125

1,071

1,688

4,285

42

4,327

(594)

3,732

(Notes)1. The “Other Businesses” classification refers to businesses not included in the reporting segments, and consists of ourGroup’s manufacturing subsidiaries, but also of those manufacturing and selling products to companies outside our Group.
2. The negative amount of ¥594 million from adjustments in segment profits includes ¥82 million in elimination ofintersegment transactions, and a negative ¥677 million in non-allocable operating expenses. Non-allocable operating
expenses are administrative costs of our Group.
3. Segment profits are adjusted to operating income in the quarterly consolidated statement of income.

Three months ended April 30, 2017
1. Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)
Reporting Segment
Domestic
Child Care
Baby andService
Mother Care
Business
Business
Net sales
Net sales toexternalcustomers
Internal sales
or exchange
betweensegments
Total
Segment profit

Health andElder Care
Business

Overseas
Business

China
Business

Subtotal

Other
Businesses(Note 1)

Total

AmountAccounted on
Quarterly
Adjustments
Consolidated(Note 2)
Statement of
Income(Note 3)

8,729

1,931

1,681

4,217

7,092

23,653323

23,977－

23,977

－

－

－

1,627

40

1,668

－

1,668

(1,668)

－

8,729

1,931

1,681

5,845

7,133

25,322323

25,645(1,668)23,977

1,752

53

97

1,606

2,126

5,635

35

5,671

(730)

4,940

(Notes)1. The “Other Businesses” classification refers to businesses not included in the reporting segments, and consists of ourGroup’s manufacturing subsidiaries, but also of those manufacturing and selling products to companies outside our Group.
2. The negative amount of ¥730 million from adjustments in segment profits includes a negative ¥35 million in eliminationof intersegment transactions, and a negative ¥694 million in non-allocable operating expenses. Non-allocable operating
expenses are administrative costs of our Group.
3. Segment profits are adjusted to operating income in the quarterly consolidated statement of income.

11Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2018

2. Changes in Reporting Segments, etc.
In order to understand our profit status of each segment in a more detailed manner, we
decided to report expenses in non-allocable operating expenses associated with the Researchand Development Department, which had been included in the Adjustment section so far, inthe segment profit of each reporting segment starting from this consolidated first three-month
period.
The segment information in the consolidated first three-month period in the last fiscal year isadjusted in accordance with the new segment profit calculation method after the above
revision.

12