Summary of Financial Results
for the Fiscal Year Ended December 31, 2019
[Japanese Standards] (Consolidated)
February 13, 2020
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: Tsutomu Matsunaga (Managing Officer, Business Strategy Division)/Tel: +81-3-3661-4204
Scheduled Date of Annual General Shareholders’ Meeting: March 27, 2020
Scheduled Commencement Date of Dividend Payments: March 30, 2020
Scheduled Filing Date of Annual Securities Report: March 30, 2020
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,
2019 (February 1, 2019 to December 31, 2019)(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, 2019

100,017－

17,072－

17,284－

11,538－FY ended January 31, 2019104,747

2.1

19,612

1.0

20,398

1.3

14,238(1.9)(Note) Comprehensive income:FY ended December 31, 2019
FY ended January 31, 2019¥12,253 million (1.2%)¥12,111 million (22.9% negative)

Net Income
per Share (¥)

Diluted Net Income
per Share (¥)

Return on
Equity (%)

Total Assets/
Ordinary Income (%)

OperatingMargin (%)

FY ended December 31, 2019

96.37

－

17.5

19.6

17.1

FY ended January 31, 2019118.89

－

22.8

24.0

18.7

(Reference) Equity in earnings of affiliates:

FY ended December 31, 2019
FY ended January 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 consolidated accounting year under review. As such, in the
consolidated accounting year under review, 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, 2019.

(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio (%)

Net Assets
per Share (¥)

FY ended December 31, 201990,491

70,46374.8

565.64

FY ended January 31, 201985,61866,58275.0

536.43(Reference) Shareholders’ Equity:

FY ended December 31, 2019
FY ended January 31, 2019¥67,722 million¥64,242 million(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, 201914,098(3,995)(8,734)32,416

FY ended January 31, 201913,632(4,704)(8,338)30,949

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

－

34.00

FY ended December 31, 2019－

FY ending December 31, 2020
(Forecast)

－

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

Dividends on
Consolidated
Net Assets(%)

3Q-end Year-end

Total

－

34.00

68.00

8,143

57.2

13.0

35.00

－

35.00

70.00

8,383

72.7

12.7

36.00

－

36.00

72.00

68.4

3. Consolidated Business Performance Forecasts for the Fiscal Year Ending
December 31, 2020 (January 1, 2020 to December 31, 2020)
Net Sales
Millions of Yen

Operating Income% Millions of Yen(% 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% Millions of Yen%

Yen

Full year
109,000
18,10018,10012,600105.23－－－－(Note) The consolidated accounting year under review is the 11 months from February 1, 2019 to December 31, 2019 due to thechange in fiscal period. As such, year on year changes have not been included in the above table.

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: Yes
2) Changes in accounting policies other than the above 1): None
3) Changes in accounting-based estimates: None
4) Restatements: None
(Note) For details, please refer to “(5) Notes on Consolidated Financial Statements (Changes in Accounting Policies)” in “3.
Consolidated Financial Statements and Main Notes” on page 15 of the Appendix.

(3) Number of outstanding shares (common stock)1) Number of shares outstanding at the period-end (including treasury stock)
FY ended December 31, 2019: 121,653,486 shares
FY ended January 31, 2019: 121,653,486 shares2) Amount of treasury stock at the period-end
FY ended December 31, 2019: 1,926,426 shares
FY ended January 31, 2019: 1,892,704 shares
3) Number of average shares outstanding during the period
FY ended December 31, 2019: 119,740,515 shares
FY ended January 31, 2019: 119,760,958 shares(Note) Amount of treasury stock at the period-end includes Company shares held by the board incentive plan (BIP) trust forcompensation of directors (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 the treasury 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 businessperformance forecast.

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

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(Changes in Accounting Policies) ............................................................................................. 15(Changes in Presentation Methods) .......................................................................................... 15(Additional Information) ........................................................................................................... 15(Segment Information) .............................................................................................................. 16(Per Share Information) ............................................................................................................ 20(Material Subsequent Events) ................................................................................................... 20

1

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

1. Overview of Management Results and Related Matters(1) Overview of Management Results for the Term Under Review
The consolidated accounting year under review 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 notbeen included in this statement.
1) Performance Overview
During the consolidated accounting year under review, despite weaknesses in exports and otherareas, Japan’s economy accomplished a gradual recovery overall, lifted by steady improvement in
the employment and income environments and a rally in personal consumption. Vigilance remains
in order, however, in view of consumer trends following the hike in the consumption-tax rate, etc.
In the global economy, a mood of uncertainty persisted amid economic trends such as trade friction,
prospects in the Chinese economy, the UK’s withdrawal from the EU, etc., as well as the effects offluctuations in the financial and capital markets, etc.
Amid such economic circumstances, the Group developed the Sixth Medium-Term Business Plan(for the period between the fiscal year ended January 2018 and the fiscal year ended December2019), 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 final year of this plan. In addition, we have set the following three basic strategies thatwould 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 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 ¥100,017 million. Regarding earnings, operating income was ¥17,072 million,
ordinary income was at ¥17,284 million, and net income attributable to owners of parent was¥11,538 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$: 109.02 yen (110.43 yen)
・1 CNY: 15.77 yen (16.70 yen)
Note: Figures in parentheses represent the exchange rate in the previous fiscal year.
2) Segment Review
This report consists 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.
Business results for each segment are as follows.

2

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

Domestic Baby & Mother Care BusinessNet sales of the segment amounted to ¥30,813 million, due in part to a contraction in demand frominbound tourism, especially during the second half. Segment profit amounted to ¥4,697 million.
In this segment, in August we launched the “caboo” series of baby slings. These slings, originallydeveloped in the UK, are made from a soft material that gently fits babies’ bodies. The slings enablebabies to be held in an elevated position on the parent’s body, thus reducing pressure on theshoulders and hips. We also launched the “filbaby” series of baby skincare products in this month.
We focused on the “Filaggrin,” a substance that has gained attention for its role in supporting thebarrier function in the protein of the skin’s horny layer. To achieve further sales reinforcement, in
October we opened the Pigeon Official Online Shop and Pigeon Official Rakuten Store. These
online stores provide official e-commerce websites where consumers can shop for Pigeon products
conveniently and with confidence.
Moreover, during this fiscal year, we have held a number of events planned as a part of our directcommunications program such as our “Breastfeeding Seminar” for expecting mothers and healthcare professionals, organized 32 times. A total of approximately 3,000 people have participated. On"Pigeon Info," a website that supports women during pregnancy, in childbirth, and when raisingchildren, we will continue to make improvements toward a better customer experience, including
updating the product lineup.
Child Care Service BusinessNet sales of the segment amounted to ¥3,492 million, and segment profit was ¥49 million.
It should be also noted that as of March 2018, the bulk outsourcing agreement for childcare hospital
centers under the National Hospital Organization (Incorporated Administrative Agency) expired,but during the consolidated fiscal year under review, we have been providing services to a total ofseventy-four facilities, and shall continue to develop this business further from now on striving to
improve the quality of the content we offer.
Health & Elder Care BusinessNet sales of the segment amounted to ¥6,546 million, and segment profit was ¥386 million.
In this segment, in February we launched “ProFitCare,” a new series which emphasizes maintaining
the sitting posture of nursing care facility users. We also launched the “Sanitary Care Inspired by
Nursing Series,” skin care products which help keep people clean even when they are unable to takea bath. We will continue to focus on further strengthening our sales activities toward retail storesand nursing care facilities, and will implement thorough measures to ensure that the quality of ournursing care services, etc., is improved.
China BusinessNet sales of the segment amounted to ¥36,824 million, and segment profit was ¥12,483 million.
In this segment, sales of core products such as nursing bottles and nipples remained strong, andsales of goods such as breast pumps and laundry products also expanded steadily.
We will continue to strengthen our efforts focused on the e-commerce market, which is continuing
to expand; leverage social media to invigorate direct communication with consumers; reinforce
sales promotions at stores and promote distribution of new products; and continue to implement
offline sales activities at hospitals and maternity clinics. In these ways we aim to broaden contact
points with customers and expand our operations.
Singapore BusinessIn this segment, net sales amounted to ¥11,482 million. Segment profit was ¥2,007 million thanks
to the improvement of gross profit margin, as well as the effective use of selling, general andadministrative expenses.
In ASEAN, the Middle East and India, we will expand the development and introduction of
products targeted for middle-class customers in this region while continuing vigorous sales and3

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

marketing activities to endeavor to boost our brand presence in these areas.
Lansinoh BusinessNet sales of the segment amounted to ¥13,213 million, and segment profit was ¥1,784 million.
In North America, sales of breast pumps through DME (Durable Medical Equipment) Channel
trended favorably. We plan to work toward further sales strengthening and expansion in this market
with the development and introduction of a stream of fresh products. Sales also advanced in the
China market (Lansinoh Laboratories Shanghai) and in Europe. We will continue to reinforce
e-commerce, bolstering marketing activities and strengthening our brands in an effort for further
expansion of operations.
Other Businesses
Net sales of the segment amounted to ¥1,343 million, and segment profit was ¥72 million.
(2) Overview of Financial Position for the Term Under Review
1) Assets
As of December 31, 2019, total assets amounted to ¥90,491 million, up ¥4,873 million from theprevious consolidated fiscal year ended January 31, 2019.
Current assets had an increase of ¥3,731 million, and fixed assets had an increase of ¥1,141 million.
Current assets increased mainly due to increases in cash and deposits of ¥1,467 million, in notes
and accounts receivable – trade of ¥1,583 million, and in merchandise and finished goods of ¥784
million.
Fixed assets increased mainly due to an increase in construction in progress of ¥546 million.
2) Liabilities
As of December 31, 2019, total liabilities amounted to ¥20,028 million, up ¥991 million from theprevious consolidated fiscal year ended January 31, 2019. Current liabilities had an increase of ¥15
million, while fixed liabilities had an increase of ¥976 million.
Current liabilities increased mainly due to increases in notes and accounts payable – trade of ¥332
million and in other current liabilities of ¥1,041 million, despite decreases in accounts payable of¥702 million and in income taxes payable of ¥678 million.
Fixed liabilities increased mainly due to an increase in other fixed liabilities of ¥1,086 million,
despite a decrease in provision for directors and corporate auditors’ retirement benefits of ¥599
million.
3) Net Assets
As of December 31, 2019, total net assets amounted to ¥70,463 million, up ¥3,881 million from theprevious consolidated fiscal year ended January 31, 2019.
This increase resulted mainly from increases in retained earnings of ¥3,275 million and in foreign
currency translation adjustment of ¥338 million.
(3) Overview of Cash Flows for the Term Under Review
As of December 31, 2019, cash and cash equivalents (hereinafter referred to as “net cash”)
amounted to ¥32,416 million, up ¥1,467 million compared with the end of the previous fiscal year.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥14,098 million, up from ¥13,632 million of
the previous year. This increase is mainly due to ¥17,104 million in income before income taxes,¥3,276 million in depreciation, and an ¥896 million increase in notes and accounts payable – trade.
Contrasting factors included a ¥1,791 million increase in notes and accounts receivable – trade, a¥713 million increase in inventories, and ¥5,854 million in income taxes paid.
4Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥3,995 million, down from ¥4,704 million of theprevious year. This is mainly due to ¥3,413 million in purchases of tangible fixed assets and ¥606
million in purchase of intangible fixed assets.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥8,734 million, up from ¥8,338 million of the previous
year. This is mainly due to ¥8,230 million in payment of cash dividends.
Cash flow indicators of the Group are shown below.
FY ended January 31,
2018

FY ended January 31,
2019

FY ended December 31,
2019

Equity Ratio (%)

72.2

75.0

74.8

Equity Ratio based on Market Price (%)

607.1

593.1

539.8

Debt Repayment Term (years)

0.0

0.0

0.1

Interest Coverage Ratio (times)

1,523.8

6,779.1

272.8- 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
outstanding at 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 ending
December 2020 and the fiscal year ending December 2022), the Group will further develop andenhance its business operating system, while pursuing the improvement of management quality andsteadily implementing the measures grounded on the newly formulated strategies for each businesssegment and the functional strategy that serves as the foundation thereof.
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, andadvance dynamically into new markets.
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 andresponsibilities of its four segments (Japan Business, China Business, Singapore Business andLansinoh Business), which are responsible for business management and growth in each region, andimproved communication with GHO, propelling the Group onto a stable, long-term growth arc.
(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 and other means, while reinforcing our financial position based on considerations of
medium-term changes in business conditions and the Group’s business strategies. In addition tostrengthening our financial position, we effectively use retained earnings in a number of ways tofortify our operational base and improve future Group earnings. These include investing in new
businesses for further growth and research and development, as well as investing in production
5Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019facilities to strengthen our corporate brand, raise production capacity, reduce costs, and enhance
product quality.
With respect to targets of shareholder return, under the Sixth Medium-Term Business Plan (for theperiod between the fiscal year ended January 2018 and the fiscal year ended December 2019)
announced in March 2017, 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 ¥35 per share (ordinary dividend of ¥35). For the year-end
dividend, the Group forecasts a dividend of ¥35 per share (ordinary dividend of ¥35). As a result,the annual dividend for the term under review will total ¥70 per share (ordinary dividend of ¥70), a
per share increase by ¥2 from the previous year.
The annual dividend for the next term will total ¥72 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 announced today.
2. Basic Approach for the Selection of Accounting Standards
For the time being, our Group will continue to prepare its consolidated financial statements basedon Japanese 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 2019

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
Software in progress
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 January 31, 2019

At December 31, 201930,94915,004
7,360
405
2,839
778
1,062
(197)
58,201

32,416
16,588
8,144
400
2,666
723
1,210
(216)
61,93315,362

16,697(8,672)(9,639)6,689
18,019(11,821)
6,198
6,642

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

(5,007)(5,378)

1,634
5,577
1,026
21,127

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

1,000
463
2,200
558
4,223

867
2,484
－
511
3,863

889
3
565
177
434
(5)
2,066
27,41785,618

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

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

(Millions of yen)

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
Provision for directors and corporate
auditors’ retirement benefits
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

At January 31, 2019

At December 31, 2019

4,567
1,960
3,363
1,951
972
32
－
2,775
15,623

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

2,359
309
－

2,642
417
98

599

－

144
3,412
19,036

1,231
4,389
20,0285,199
5,179
55,704(951)
65,131

5,199
5,179
58,979(1,088)68,269

21
(910)
(888)
2,339
66,582
85,618

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

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019(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
Foreign exchange gains
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 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
January 31, 2019104,747
50,88253,865354253,85834,246
19,612(Millions of yen)
Year Ended
December 31, 2019
100,017
49,20750,8093140
50,80033,727
17,072

228
18
108
650
289
1,295

171
15
－
759
190
1,136

2
452
－
54
509
20,398

51
233
596
42
924
17,284

131
112
243

7
113
121

7
278
93
－
379
20,262
5,794
(127)
5,667
14,594356
14,238

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

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

(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
January 31, 2019
14,594(Millions of yen)
Year Ended
December 31, 201911,769(22)(2,460)(2,483)
12,111

3
479
483
12,253

11,814296

11,880372

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019(3) Statement of Changes in Consolidated Shareholders’ Equity
Fiscal Year Ended January 31, 2019
(Millions of yen)
Shareholders’ equity
CapitalsurplusCapital 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
period5,199

Retainedearnings

5,179

49,729Treasury
stock

Total
shareholders’equity(949)

59,158(8,263)(8,263)

14,238

14,238
(1)

(1)

－

－

5,974

(1)

5,972

5,199

5,179

55,704(951)

65,131

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

44

1,490

1,534

2,119

Total net
assets62,812(8,263)
14,238(1)(22)(2,400)(2,423)220(2,202)(22)(2,400)(2,423)

220

3,770

21

(910)

(888)

2,339

66,58211

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

Fiscal Year Ended December 31, 2019
(Millions of yen)
Shareholders’ equity
CapitalsurplusCapital 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
period5,199

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

70,46312

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019(4) Consolidated Statements of Cash Flows(Millions of yen)
Year Ended
December 31, 2019Year Ended
January 31, 2019
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 of loans receivableCollection of loans receivable
Payments for lease deposits
Collection of lease deposits
Other
Net Cash Provided by (Used in) Investing Activities

13

20,262
2,638
93
166
(25)
(47)
28

17,104
3,276
189
181
16
(37)
88

82

(599)

－

98

(246)
2
65
(123)
278

(187)
51
0
1
100

646

(1,791)(2,300)
(70)
(112)
196
(391)

(713)
896
(113)
(317)
(79)

6

3

(1,263)
19,887238(2)(6,491)
13,632

1,631
19,803171(22)(5,854)
14,098(3,686)453(1,704)
(1)
212
(0)
－
(1)
6
(39)
101
(44)
(4,704)(3,413)
71
(606)
(157)
209
(0)
12
－
－
(9)
9
(111)
(3,995)

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019Year Ended
January 31, 2019III. 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(Millions of yen)
Year Ended
December 31, 2019(8,260)(75)(1)－(8,338)(8,230)
(121)
(137)
(245)
(8,734)

(986)

98

(397)
31,34630,9491,467
30,94932,416

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019(5) Notes on Consolidated Financial Statements(Notes Regarding Going Concern Assumptions)Not applicable.
(Changes in Accounting Policies)(Application of IFRS 16, “Leases”)
From the beginning of the consolidated fiscal year under review, the Pigeon Group applies IFRS 16,“Leases,” the new lease accounting standard published by the International Accounting Standards
Board (IASB). This accounting change does not apply to Pigeon Corporation and its subsidiaries inJapan, which apply Japanese accounting standards, or to Pigeon subsidiaries in the United States,
which apply US accounting standards. With this accounting change, in principle lessees recognize
assets and liabilities with respect to all leases.
Effects of this accounting change on the financial condition and business results of the Group are
negligible.
(Changes in Presentation Methods)(Application of the Partial Revision of Accounting Standards Regarding Tax-effect Accounting,etc.)
From the beginning of the consolidated fiscal year under review, the Pigeon Group applies thePartial Revision of Accounting Standards Regarding Tax-effect Accounting, etc. (Corporate
Accounting Standard No. 28, February 16, 2018). Under this partial revision, Deferred Tax Assets
are appropriated under Investments and Other Assets and Deferred Tax Liabilities are appropriatedunder Fixed Liabilities.
(Additional Information)(Change of Consolidated Closing Date)
Our consolidated closing date used to be January 31. However, the decision was made at the 62nd
Ordinary General Meeting of Shareholders (fiscal year ended January 31, 2019) on April 25, 2019,
to change the consolidated closing date to December 31. This is intended to help promote our global
business operations and improve the transparency of corporate information by unifying the fiscal
period with our overseas consolidated subsidiaries.
As a result of this change, the consolidated accounting year has changed to the 11 months fromFebruary 1, 2019 to December 31, 2019.
In the consolidated accounting year under review, the transition period, the consolidation period for
the Company and its Japanese subsidiaries that used to settle their accounts on January 31 shall be
the 11-month period from February 1 to December 31, 2019.
For overseas subsidiaries that currently settle their accounts on December 31, or that are doing so
temporarily, the consolidation period shall continue to be the 12-month period from January 1 to
December 31.
(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 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 to15

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019enhance 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 ¥136
million and the number of shares is 33,600 shares.
(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.
The Company separates sales of principally nursing products into domestic and overseas sales and,in addition, is engaged in providing sales and services relating to health care and nursing care,services relating to supporting childcare. The Company has established business headquarters
along products, services, and regions.
This report consists 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.
(i) Domestic Baby & Mother Care BusinessThis segment is engaged in the manufacture and sales of childcare products and feminine products
in Japan.
(Principal Products) Breastfeeding-related products, weaning-related products, skincare products,
wet tissues, baby foods, baby outing products, feminine care products (supplements,
maternity products), other(ii) Child Care Service BusinessThis segment is engaged in provision of child care services in Japan.
(Principal Services) Operation and contracting of nursery facilities, operation of preschool
educational facilities, babysitter dispatch services, other(iii) Health & Elder Care BusinessThis segment is engaged in the manufacture and sales of health care products and nursing careproducts as well as provision of nursing care services in Japan.
(Principal Products) Incontinence protection products, skincare products, wet tissues, wheel chairs,
16Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

products for nursing care facilities, nursing care support services, other(iv) 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.
(v) 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.
(vi) 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 otheritems is generally the same as in “Basis for Preparing Consolidated Financial Statements”.

17Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

3. Information Regarding Net Sales, Profit (Loss), Assets and Other Items in Each Reporting Segment
Fiscal Year Ended January 31, 2019
(Millions of yen)
Reporting Segment
Domestic
Child Care
Baby &
Service
Mother Care
Business
Business
Net Sales
Net sales
to externalcustomers
Internal
sale orexchange
betweensegments

Health &Elder Care
Business

China
Business

Singapore
Business

LansinohBusiness

Subtotal

Other
Businesses(Note) 1

Total

AmountAdjustments Accountedon(Note) 2(Note) 3 Consolidated
Financial(Note) 4
Statements(Note) 5(Note) 6

35,593

4,472

6,986

35,411

8,262

12,618103,344

1,402

104,747－

104,747

－

－

－

170

3,871

135

4,176

－

4,176

(4,176)－

Total

35,593

4,472

6,986

35,581

12,13312,753

107,521

1,402

108,924(4,176)

104,747

Segment Profit

6,096

169

353

11,972

2,744

1,576

22,912

142

23,054(3,442)

19,612

Segment
Assets14,857973

3,596

26,645

15,921

5,915

67,9101,306

69,216

16,402

85,618Other Items
Depreciation
596
27
108
757
802
119
2,411
48
2,460
178
(Note) 7
Amortization
－
－
－
－
159
6
166
－
166
－
of Goodwill
Increase in
Tangible Fixed
Assets and
1,018
32
207
1,225
953
307
3,743
66
3,810
1,565
Intangible
Fixed Assets(Note) 8(Notes)1. “Other” represents a business segment not included in the reporting segments and principally covers manufacture and sales by
manufacturing subsidiaries of the company for sales outside the Group.
2. The negative amount of ¥3,442 million from adjustments in segment profit includes negative ¥17 million in elimination of intersegment
transactions, and negative ¥3,424 million in non-allocable operating expenses. Non-allocable operating expenses are mainly administrative
costs of our Group.
3. The amount of ¥16,402 million in adjustments in segment assets includes negative ¥1,232 million in eliminations of inter-segment
transactions, and ¥17,634 million in the entire company assets consisting principally of investments of surplus of the parent company (Cashand Deposits), long term investment assets (Investment Securities and the Like) and assets relating to the administrative area.
4. Depreciation adjustments are depreciations relating the entire company assets.
5. Adjustments of increase in tangible fixed assets and intangible fixed assets relate to the entire company assets.
6. Segment profit has been adjusted with the operating income in the consolidated financial statements.
7. Amortization relating to long term pre-paid expenses are included in the depreciation.
8. Increases in tangible fixed assets and intangible fixed assets include increases in long term pre-paid expenses.
9. From the beginning of the consolidated first quarter of this fiscal year, the Pigeon Group applies the Partial Revision of AccountingStandards Regarding Tax-effect Accounting, etc. (Corporate Accounting Standard No. 28, February 16, 2018). Under this partial revision,
segment assets pertaining to the previous consolidated fiscal year are indicated as an amount following the retrospective application of theseaccounting standards.

18

2,638
166

5,376

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

Fiscal Year Ended December 31, 2019
(Millions of yen)
Reporting Segment
Domestic
Child Care
Baby &
Service
Mother Care
Business
Business
Net Sales
Net sales
to externalcustomers
Internal
sale orexchange
betweensegments

Health &Elder Care
Business

China
Business

Singapore
Business

LansinohBusiness

Subtotal

Other
Businesses(Note) 1

Total

AmountAdjustments Accountedon(Note) 2(Note) 3 Consolidated
Financial(Note) 4
Statements(Note) 5(Note) 6

30,813

3,492

6,546

36,7248,050

13,04598,673

1,343

100,017－

100,017

－

－

－

99

3,432

168

3,700

－

3,700

(3,700)－Total

30,813

3,492

6,546

36,824

11,482

13,213102,373

1,343

103,717(3,700)100,017

Segment Profit

4,697

49

386

12,483

2,007

1,784

21,40972

21,481(4,408)17,072

Segment
Assets

15,484897

3,492

27,62916,3896,867

70,762

1,301

72,063

18,42890,491Other Items
Depreciation
651
21
102
1,020
858
130
2,785
53
2,838
568
(Note) 7
Amortization
－
－
－
－
175
6
181
－
181
－
of Goodwill
Increase in
Tangible Fixed
Assets and
756
8
79
1,395
1,145
323
3,707
45
3,753
306
Intangible
Fixed Assets(Note) 8(Notes)1. “Other” represents a business segment not included in the reporting segments and principally covers manufacture and sales by
manufacturing subsidiaries of the company for sales outside the Group.
2. The negative amount of ¥4,408 million from adjustments in segment profit includes negative ¥84 million in elimination of intersegment
transactions, and negative ¥4,324 million in non-allocable operating expenses. Non-allocable operating expenses are mainly administrative
costs of our Group.
3. The amount of ¥18,428 million in adjustments in segment assets includes negative ¥899 million in eliminations of inter-segment transactions,and ¥19,328 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.
4. Depreciation adjustments are depreciations relating the entire company assets.
5. Adjustments of increase in tangible fixed assets and intangible fixed assets relate to the entire company assets.
6. Segment profit has been adjusted with the operating income in the consolidated financial statements.
7. Amortization relating to long term pre-paid expenses are included in the depreciation.
8. Increases in tangible fixed assets and intangible fixed assets include increases in long term pre-paid expenses.

19

3,406
181

4,059

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended December 2019

(Per Share Information)
Previous fiscal year

Current fiscal year

(February 1, 2018 to January 31, 2019)(February 1, 2019 to December 31, 2019)¥536.43¥118.89¥565.64¥96.37

Net Assets per ShareNet Income per Share(Notes) 1. With respect to Diluted Net Income per Share, there are no latent shares, thus, has not been disclosed.
2. The basis for the calculation of the Net Income per Share is as follows.

Current fiscal year

Previous fiscal year

(February 1, 2018 to January 31, 2019) (February 1, 2019 to December 31, 2019)

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 Shares During
the Term (shares)

14,238

11,538－－

14,238

11,538

119,760,958

119,740,515(Material Subsequent Events)(Changes to Segment Divisions)
In the consolidated accounting year under review, there were six Group reporting segments: theDomestic Baby & Mother Care Business, Child Care Service Business, Health & Elder Care
Business, China Business, Singapore Business and Lansinoh Business. However, as a result of thereorganization of December 16, 2019, these will change from the following consolidated
accounting year to the following four reporting segments: Japan Business, China Business,
Singapore Business and Lansinoh Business. Please note that manufacturing and sales businessconducted outside the Group through production subsidiaries in Japan included in the classificationof “Other” in the consolidated accounting year under review will be integrated into the Japan
Business segment from the following consolidated accounting year.
Information regarding net sales and profit in each reporting segment for the consolidated
accounting year under review in the reporting segments following these changes is as follows.
Fiscal Year Ended December 31, 2019
(Millions of yen)
Adjustments(Note) 1

AmountAccounted on
Consolidated
Financial
Statements(Note) 2

100,017－

100,017

169

8,696

(8,696)－

13,58813,214

108,713(8,696)

100,017

1,965

1,823

20,559(3,486)

17,072

Reporting Segment
Singapore
Business

Total

LansinohBusiness

Japan Business

China BusinessNet sales to externalcustomers

42,19336,7288,050

13,045Internal sale or
exchange between
segments

2,367

621

5,537

44,56037,3504,084

12,685Net Sales

Total
Segment Profit(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. Segment profit has been adjusted with the operating income in the consolidated financial statements.

20