Summary of Financial Results
for the First Quarter of Fiscal Year Ending December 2020
[Japanese Standards] (Consolidated)
June 4, 2020
Name of Listed Company: Pigeon Corporation (Stock code: 7956)
Listing: 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 Filing Date of Quarterly Report: June 5, 2020
Scheduled Commencement Date of Dividend Payments: —Preparation of Any Additional Explanatory Materials for Quarterly Financial Results: Yes
Holding of Any Briefing Session for Quarterly Financial Results: Yes (For analysts)

1. Consolidated Business Performance for the First Quarter of Fiscal YearEnding December 31, 2020 (January 1 to March 31, 2020)(1) Consolidated Operating Results (cumulative)

1Q ended March 31, 2020

(Millions of yen, rounded down, % figures denote year-on-year change)
Net Income
Net Sales
Operating Income
Ordinary Income
Attributable to
Owners of Parent
22,836(10.3)%
3,403(24.4)
3,864(13.3)
2,869(8.6)

1Q ended April 30, 201925,458(1.3)%(Note) Comprehensive income: 1Q ended March 31, 2020
1Q ended April 30, 2019

4,501
(17.3)
4,459¥1,206 million (69.9% negative)¥4,015 million (32.9%)

Net Income per Share (¥)(17.1)

3,140(18.5)

Diluted Net Income per
Share (¥)

1Q ended March 31, 2020

23.97

－

1Q ended April 30, 2019

26.22

－

(2) Consolidated Financial Position
Total Assets
1Q ended March 31, 2020

Net Assets

86,016Equity Ratio (%)

67,41075.6

FY ended December 31, 201990,491
70,463(Reference) Shareholders’ Equity: 1Q ended March 31, 2020
¥64,990 million
FY ended December 31, 2019 ¥67,722 million

74.8

2. Cash Dividends
Annual Dividend (¥)
1Q-end2Q-end3Q-endFY ended December 31, 2019
35.00－
FY ending December 31, 2020－
FY ending December 31, 2020
36.00
(Forecast)(Note) Changes in dividend forecasts from the most recent announcement: None

Year-end

Total

－

35.00

70.00

－

36.00

72.00

3. Consolidated Business Performance Forecasts for the Fiscal YearEnding December 31, 2020 (January 1 to December 31, 2020)
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% Millions of Yen%

Yen

98,50013,40013,900
9,600
80.17
to
to
to
to
to
－
－
－
－
102,400
15,50016,00010,90091.03(Notes) 1. Revision of forecasts from the most recent announcement: Yes
2. The previous consolidated accounting year was 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.
Full year

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 March 31, 2020: 121,653,486
FY ended December 31, 2019: 121,653,486
2) Amount of treasury stock at the period-end
1Q ended March 31, 2020: 1,926,426
FY ended December 31, 2019: 1,926,426
3) Average number of shares outstanding during the period (quarter accumulation)
1Q ended March 31, 2020: 119,727,060
1Q ended April 30, 2019: 119,740,515(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 1Q ended March 31, 2020 and 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.

* Summaries of quarterly financial results are exempt from quarterly review by certified public accountants andauditing 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
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 December 2020

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 ............................................................................................... 3(3) Explanation of Consolidated Performance Forecast and Other Future Predictions .................... 4
2. Quarterly Consolidated Financial Statements and Main Notes ....................................................... 5(1) Quarterly Consolidated Balance Sheets ...................................................................................... 5(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income .............................................................................................................. 7
Quarterly Consolidated Statement of Income(Scope of Consolidation of First Quarter)................................................................................. 7
Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of First Quarter) ................................................................................. 8(3) Notes on Consolidated Financial Statements .............................................................................. 9(Notes Regarding Going Concern Assumptions) ........................................................................ 9(Notes Regarding Substantial Changes in Shareholders’ Equity) ............................................... 9(Segment Information) ................................................................................................................ 91

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

1. Qualitative Information Regarding the Financial Results for the Current Quarter(1) Explanation of Business Performance
Regarding the business environment surrounding the Group during the consolidated first quarter
under review, the spread of coronavirus disease 2019 (COVID-19) caused a decline in global
economic activities. From February, consumption in Japan began to be impacted by the cancellationof large-scale events, shortened hours or temporary closure of retail businesses, as well as voluntarydecision to stay home by consumers. Additionally, the number of foreign tourists visiting Japandrastically decreased, causing a sudden slowdown in inbound demand.
Amid such economic circumstances, the Group announced the Seventh Medium-Term Business Plan(for the period between the fiscal year ending December 2020 and the fiscal year ending December2022) in February 2020, and formulated three basic strategies (brand strategy, core product strategy,
and regional strategy). In the Plan, with a focus on these basic strategies, the Group will work to
implement various measures for business growth, as well as to realize our purpose which is “we wantto make the world more baby-friendly by furthering our commitment to understanding andaddressing babies' unique needs.”
Business performance during the consolidated first quarter under review was as follows.
Net sales amounted to ¥22,836 million (down 10.3% YOY). Regarding earnings, due to factors suchas decreased sales and an increased selling, general and administrative expense ratio, operating
income was ¥3,403 million (down 24.4% YOY), ordinary income was ¥3,864 million (down 13.3%
YOY), and quarterly net income attributable to owners of parent was ¥2,869 million (down 8.6%
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:
Note: Figures in parentheses represent the exchange rate in the same period of the previous fiscal
year.
・1US$: 108.97 yen (110.21 yen)
・1 CNY: 15.61 yen (16.32 yen)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 reorganization of
December 16, 2019, from the consolidated first quarter under review, the Japan Business segment
now aggregates the manufacturing and sales business conducted 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. As a result, this report now consists offour segments.
Each segment is outlined below.
The following year-on-year comparisons are based on figures calculated using the calculation
method after changing the figures for the same period of the previous year.
Japan BusinessThis segment consists of the Domestic Baby & Mother Care Business, Child Care Service Business,and Health & Elder Care Business. Overall net sales in this segment were ¥11,456 million (down
9.7% YOY) and segment profit was ¥889 million (down 37.4% YOY).
In the category of products for babies and mothers, sales of product groups with particularly highinbound demand were down year-on-year. Conversely, due to increased hygienic awareness inconjunction with the spread of COVID-19, sales increased year-on-year of some products for babies
and mothers, and for health and elder care.
Regarding child care service, during the period under review, we have concluded a new contract for2

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

one in-company child-care facility. We currently provide services to a total of seventy-five facilities,
and shall continue to develop this business further while striving to improve the quality of the content
we offer.
Profit was down year-on-year due to factors including a decrease in gross profit caused by a decline in
net sales, and a worsened gross profit margin caused by the product mix.
China BusinessNet sales in this segment amounted to ¥7,148 million (down 10.5% YOY), and segment profit also
decreased to ¥2,407 million (down 16.5% YOY).
Beginning from late January, this segment was significantly affected by the spread of COVID-19. A
considerable number of small- and medium-sized retail stores were temporarily closed, the Chinese
government stopped the distribution of goods across provinces, and the top priority was placed on
the distribution of medical products and daily necessities. The distribution functions of major cities
were in a completely different situation than normal times. As a result, net sales were down
year-on-year due to factors including delays in the delivery of our products to local distributors andretail stores. However, the distribution function has almost recovered as of early March.
Furthermore, the Group is steadily increasing sales in the e-commerce channel where we havestrengthened our activities.
Profit was down year-on-year due to factors including a decrease in gross profit caused by a decline
in net sales, a worsened gross profit margin due to the product mix, and an increase in expenses due
to growing e-commerce sales.
Singapore BusinessNet sales of the segment amounted to ¥3,333 million (down 12.3% YOY), and segment profit also
decreased to ¥669 million (down 19.1% YOY).
Net sales in this segment were down year-on-year due to voluntary stay-at-home activities andshortened hours/temporary closures of retail stores due to the spread of COVID-19 in the ASEAN
region and India, which are under the supervision of this segment.
Profit was down year-on-year due to factors including a decrease in gross profit caused by a decline
in net sales, and a worsened gross profit margin caused by the product mix.
Lansinoh BusinessNet sales of the segment amounted to ¥3,040 million (down 7.3% YOY), and segment profit
decreased to ¥399 million (down 16.5% YOY).
In North America, sales were strong in the e-commerce channel, and sales of breast pumps throughthe DME (Durable Medical Equipment) channel and the hospital/maternity clinic channel grew.
Conversely, sales were down year-on-year for consumable products, a category where market
competition has become even tougher.
(2) Explanation of Financial Position(Assets)
As of March 31, 2020, our Group recorded total assets of ¥86,016 million, down ¥4,475 million
from the previous consolidated fiscal year ended December 31, 2019. Both current and fixed assets
decreased by ¥3,081 million and ¥1,393 million, respectively.
Current assets decreased mainly due to decreases in cash and deposits of ¥3,771 million and innotes and accounts receivable - trade of ¥274 million, despite an increase in merchandise andfinished goods of ¥569 million.
Fixed assets decreased mainly due to a ¥351 million decrease in buildings and structures under
tangible fixed assets, a ¥483 million decrease in other tangible fixed assets, and a ¥365 million
decrease in other intangible fixed assets.
(Liabilities)
As of March 31, 2020, our Group recorded total liabilities of ¥18,605 million, down ¥1,422 million
from the previous consolidated fiscal year ended December 31, 2019. Both current and fixed3

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

liabilities decreased by ¥1,300 million and ¥121 million, respectively.
Current liabilities decreased mainly due to decreases in income taxes payable and in other current
liabilities of ¥284 million and ¥1,077 million, respectively.
Fixed liabilities decreased mainly because other fixed liabilities decreased by ¥117 million.
(Net Assets)
As of March 31, 2020, our Group recorded total net assets of ¥67,410 million, down ¥3,052 million
from the previous consolidated fiscal year ended December 31, 2019.
Net assets decreased mainly due to decreases in foreign currency translation adjustment of ¥1,393
million and in retained earnings of ¥1,321 million.
(3) Explanation of Consolidated Performance Forecast and Other Future Predictions
At the current point in time, the future is uncertain due to the global pandemic of COVID-19 inJapan and countries around the world. It is extremely difficult to predict future trends and to
calculate the amount of impact on the Group’s performance. The “Consolidated Business
Performance Forecasts for the Fiscal Year Ending December 31, 2020” which was announced on
Thursday, February 13, 2020 did not consider how COVID-19 would spread on a global scale tothis extent, worsen the global economy over a period of several months, stagnate corporate
activities, and have a severe impact on the daily life of individuals.
From April, signs of recovery have been seen in China, which is our priority market. However, theimpact of COVID-19 is forecasted to continue in countries around the world even after the firstquarter consolidated cumulative period. Based on the information available to the Pigeon Group asof today, we have decided to change the figures listed in the summary information from the figures
which were announced on February 13, 2020.

4

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

2. Quarterly Consolidated Financial Statements and Main Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
At December 31, 2019ASSETS
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
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:
Net defined benefit liability
Provision for share-based remuneration
Other fixed liabilities
Total Fixed Liabilities
Total Liabilities

5

At March 31, 2020

32,416
16,588
8,144
400
2,666
1,933
(216)
61,93328,644
16,313
8,714
444
2,710
2,237
(212)
58,851

7,058
5,865
9,570
22,494

6,706
5,957
9,087
21,751

867
2,996
3,863

674
2,630
3,305

2,201
(0)
2,200
28,55890,491

2,109
(0)
2,108
27,16586,016

4,900
2,009
1,272
928
41
8
6,478
15,638

4,779
1,992
1,024
1,077
55
7
5,400
14,337

417
98
3,873
4,389
20,028

387
124
3,755
4,267
18,605

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

(Millions of yen)
At December 31, 2019

At March 31, 2020

NET ASSETS
I. Shareholders’ Equity:
Capital stock

5,199

5,199

Capital surplus

5,179

5,179

Retained earnings

58,97957,658Treasury stock(1,088)(1,088)

Total Shareholders’ Equity

68,26966,94725

9Foreign currency translation adjustment(572)(1,966)

Total Accumulated Other Comprehensive Income(547)(1,957)

III. Non-controlling Interests

2,741

2,419

Total Net Assets

70,46367,410Total Liabilities and Net Assets

90,49186,016

II. Accumulated Other Comprehensive Income:
Valuation difference on available-for-sale securities

6Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

(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 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
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 shares of subsidiaries andassociates
Loss on sales of fixed assets
Loss on disposal of fixed assets
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

7

Three months endedApril 30, 201925,45812,594
12,86330
40
12,8548,352
4,501

Three months ended
March 31, 2020
22,836
11,483
11,35241
55
11,337
7,933
3,403

47
－
64
111

42
379
211
632

1
116
6
28
153
4,459

1
56
40
73
171
3,864

1
113
115

0
33
33

－

37

1
9
10
4,563
1,232
122
1,355
3,208
68

9
10
56
3,841
1,015
(107)
907
2,933
63

3,140

2,869

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

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, 2019
3,208

Three months ended
March 31, 2020
2,933

2

(16)

803
806
4,015

(1,710)(1,726)
1,206

3,896

1,459

118

(252)

(Break down)

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

8Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

(3) Notes on Consolidated Financial Statements(Notes Regarding Going Concern Assumptions)Not applicable.
(Notes Regarding Substantial Changes in Shareholders’ Equity)
Not applicable.
(Segment Information)
Three months ended April 30, 2019
Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)AmountAccounted on
Quarterly
Consolidated
Statement of
Income(Note 2)

Reporting Segment
Adjustments(Note 1)

Total
Japan Business

China Business Singapore Business Lansinoh BusinessNet sales
Net sales toexternal customers

12,188

7,717

2,272

3,279

25,458－25,458Internal sales or
exchange between
segments

504

272

1,527

0

2,304

(2,304)－

Total

12,692

7,990

3,799

3,279

27,762(2,304)25,458Segment profit

1,420

2,884

828

478

5,612

(1,110)4,501(Notes)1. The negative amount of ¥1,110 million from adjustments in segment profit includes negative ¥25 million in eliminationof intersegment transactions, and negative ¥1,084 million in non-allocable operating expenses. Non-allocable operating
expenses are administrative costs of our Group.
2. Segment profits are adjusted to operating income in the quarterly consolidated statement of income.

Three months ended March 31, 2020
1. Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)
Reporting Segment
Adjustments(Note 1)

Total
Japan Business

China Business Singapore Business Lansinoh BusinessAmountAccounted on
Quarterly
Consolidated
Statement of
Income(Note 2)

Net sales
Net sales toexternal customers

10,675

7,090

2,029

3,039

22,836－

22,836

Internal sales or
exchange between
segments

780

57

1,303

0

2,141

(2,141)－

Total

11,456

7,148

3,333

3,040

24,978(2,141)

22,836

Segment profit

889

2,407

669

399

4,367

(963)

3,403

(Notes)1. The negative amount of ¥963 million from adjustments in segment profit includes negative ¥89 million in elimination ofintersegment transactions, and negative ¥873 million in non-allocable operating expenses. Non-allocable operating
expenses are administrative costs of our Group.
2. Segment profits are adjusted to operating income in the quarterly consolidated statement of income.

2. Items Regarding Changes, etc., to Reporting Segments
Previously, this report consisted of information from 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 resultof the reorganization of December 16, 2019, from the consolidated first quarter under review,
9Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2020

the Japan Business segment now aggregates the manufacturing and sales business conducted
outside the Group by domestic subsidiaries included in the segments of Domestic Baby &Mother Care Business, Child Care Service Business, Health & Elder Care Business, andOther. As a result, this report now consists of four segments.
Segment information for the previous consolidated first quarter was created using the
calculation method for segment profit after the changes were made.

10