Summary of Financial Results
for the First Quarter of Fiscal Year Ending January 2019
[Japanese Standards] (Consolidated)
June 4, 2018
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 8, 2018
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, 2019 (February 1 to April 30, 2018)(1) Consolidated Operating Results (cumulative)

1Q ended April 30, 2018

(Millions of yen, rounded down, % figures denote year-on-year change)
Net Income
Net Sales
Operating Income
Ordinary Income
Attributable to
Owners of Parent
25,798
7.6%
5,446
10.2%
5,380
10.7%
3,852
10.9%

1Q ended April 30, 2017
23,977
5.4%(Note) Comprehensive income: 1Q ended April 30, 2018
1Q ended April 30, 2017

4,940
32.4%
4,858
¥3,020 million (8.9% negative)¥3,316 million (116.8%)

Net Income per Share (¥)

35.0%

3,473

39.9%

Diluted Net Income per
Share (¥)

1Q ended April 30, 2018

32.17

－

1Q ended April 30, 2017

29.00

－

(2) Consolidated Financial Position
Total Assets
1Q ended April 30, 2018

Net Assets

81,855

FY ended January 31, 201884,467(Reference) Shareholders’ Equity: 1Q ended April 30, 2018
FY ended January 31, 2018

Equity Ratio (%)

61,572

72.7

62,812¥59,478 million¥60,693 million

71.9

2. Cash Dividends
Annual Dividend (¥)
1Q-end2Q-endFY ended January 31, 2018
31.00－
FY ending January 31, 2019－
FY ending January 31, 2019
34.00
(Forecast)(Note) Changes in dividend forecasts to the most recent announcement: None

3Q-endYear-end

Total

－

35.00

66.00

－

34.00

68.00

3. Consolidated Business Performance Forecasts for the Fiscal YearEnding January 31, 2019 (February 1, 2018 to January 31, 2019)
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
107,000
4.3%
20,4005.1%(Note) Revision of forecasts to the most recent announcement: None

20,400% Millions of Yen

1.3%

14,100%(2.9)%

Yen

117.73Notes(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, 2018: 121,653,486
FY ended January 31, 2018: 121,653,486
2) Amount of treasury stock at the period-end
1Q ended April 30, 2018: 1,892,389
FY ended January 31, 2018: 1,892,329
3) Number of average shares outstanding during the period (quarter accumulation)
1Q ended April 30, 2018: 119,761,117
1Q ended April 30, 2017: 119,761,516* 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 January 2019

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 2019

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, Japan’s economy continued torecover at a gradual pace as a whole, thanks to an increase in corporate earnings and enhancementin the employment environment. In the global economy, in addition to the European and U.S.
economies continuing to recover at a gradual pace, the Chinese economy also picked up steadily.
On the other hand, a latent sense of uncertainty remained due to geopolitical risks, 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 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 second 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, the Company implemented a wide
range of measures on the basis of the above business policies as well as our business-related andfunctional strategies. As a result, due to a favorable performance of the Domestic Baby & Mother
Care Business and China Business, net sales amounted to ¥25,798 million (up 7.6% YOY).
Regarding earnings, due to a favorable performance by the nursing bottles and skincare products
mainly supplied from production bases inside the Group, sales cost ratio improved byapproximately 1.5 percentage points from the previous term, operating income recorded ¥5,446
million (up 10.2% YOY), ordinary income recorded ¥5,380 million (up 10.7% YOY), and net
income attributable to owners of parent also increased to ¥3,852 million (up 10.9% 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$: 108.22 yen (113.60 yen)
・1 CNY: 17.04 yen (16.56 yen)
Note: Figures in parentheses represent the exchange rate in the same period of the previous fiscal
year.
Although so far, our Group had a total of five reporting segments identified as "Domestic Baby &Mother Care Business," "Child Care Service Business," "Health & Elder Care Business," "Overseas
Business," and "China Business", from the consolidated first three-month period under review, we
decided to change the denomination of our "Overseas Business" renaming it to "Singapore
Business" that shall be engaged in various businesses under the Pigeon brand mainly in the ASEAN
and countries of the Middle East, while the business conducted under the Lansinoh brand andmainly developed in Europe and the U.S., which had been a part of the "Overseas Business" so far,
was set up as an independent segment named "Lansinoh Business," and the reporting from now on
2

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2019will be done based on a division into a total of six segments. Each segment is outlined below.
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 theabove revision.
Domestic Baby & Mother Care BusinessNet sales of the segment amounted to ¥9,393 million (up 7.6% YOY). Segment profit increased
compared with the corresponding period of last year to ¥1,875 million (up 7.0% YOY). In thissegment, in February, we newly released "Pigeon Medicated Bubble Body Soap (Leaves ofPeach)," a product in the same series with the "Pigeon Medicated Lotion (Leaves of Peach)," ahighly popular product that recorded sales of 2,700,000 items shipped last year. Furthermore, welaunched a new version of "Runfee RA8" modified to make it more comfortable to push in therear-facing position, and are steadily expanding its sales. 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 “Premama Class” for women expecting to give birth in the near future and a seminar aboutbreastfeeding while parenting for health care professionals, organized five times. A total of
approximately 280 people have participated. On "Pigeon Info," a website that supports women
during pregnancy, in childbirth, and in raising children, we are continuing to improve the content sothat users can use the site in a more convenient manner.
Child Care Service BusinessNet sales of the segment amounted to ¥1,664 million (down 13.8% YOY). Segment profit
decreased compared with the corresponding period of last year to ¥44 million (down 16.2% YOY)
as a result of an increase in personnel expenses and other reasons. It should be also noted that as ofMarch 2018, our bulk outsourcing agreement for childcare hospital centers under the National
Hospital Organization (Incorporated Administrative Agency) expired, but we shall operate thebusiness from now on striving to find new clients for our services and improve the quality of thecontent we offer further.
Health & Elder Care BusinessNet sales of the segment amounted to ¥1,673 million (down 0.5% YOY). Segment profit decreased
to ¥80 million (down 17.3% YOY). We will continue 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.
China BusinessNet sales in this segment amounted to ¥7,806 million (up 9.6% YOY), and segment profit also
increased to ¥2,961 million (up 19.5% YOY). In the segment, sales of nursing bottles continued toincrease, while the line of baby skin care products decorated with Disney characters that was
launched in December 2017 has also steadily increased sales. In addition, we will continue tostrengthen our activities in the E-commerce market, which is expected to grow further in the future;
we will utilize social networking services further for the invigoration of direct communication with
consumers, and will also continue to reinforce sales promotions at stores as well as offline sales
activities aimed at hospitals and maternity clinics, in order to increase contact points with customers
and expand our operations.
Singapore BusinessNet sales of the segment amounted to ¥2,928 million (up 26.7% YOY), and segment profit also
increased to ¥731 million (up 10.1% YOY). In Indonesia, which is one of the areas the segment
covers, we changed P.T. Pigeon Indonesia, which was an equity method affiliate, into a
consolidated subsidiary in October 2017, and are currently conducting measures to expand bothproduction and sales in the company. In addition, we shall develop our sales and marketing
activities in other ASEAN countries and the Middle East, striving to boost the presence of our3

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2019brands in these areas also.
Lansinoh BusinessNet sales of the segment amounted to ¥2,948 million (up 0.4% YOY), while segment profit
decreased to ¥463 million (down 14.9% YOY). Sales of breast pumps in North America are steadily
expanding through a new sales route (DME Channel). In addition, to pave the way for our businessexpansion in China (Lansinoh Laboratories Shanghai), we shall conduct a wide range of measures
including strengthening our activities in the E-commerce market and brand reinforcement.
Other Businesses
Net sales of the segment amounted to ¥314 million (down 2.8% YOY), and segment profit stood at¥26 million (down 24.6% YOY).
(2) Explanation of Financial Position
1) Assets
As of April 30, 2018, our Group recorded total assets of ¥81,855 million, down ¥2,612 million fromthe previous consolidated fiscal year ended January 31, 2018. Both current and fixed assets
decreased by ¥2,542 million and ¥70 million, respectively.
Current assets decreased mainly due to a decrease in cash and deposits of ¥4,441 million, despite
increases in notes and accounts receivable - trade of ¥571 million and in raw materials and suppliesof ¥442 million.
Fixed assets diminished due to a decrease in other in investments and other assets of ¥198 million.
2) Liabilities
As of April 30, 2018, our Group recorded total liabilities of ¥20,283 million, down ¥1,372 million
from the previous consolidated fiscal year ended January 31, 2018. Both current and fixed liabilities
decreased by ¥866 million and ¥505 million, respectively.
Current liabilities decreased mainly due to decreases in income taxes payable and in other current
liabilities of ¥946 million and ¥425 million, respectively, despite an increase in notes and accounts
payable - trade of ¥405 million.
Fixed liabilities decreased, mainly because other fixed liabilities decreased by ¥510 million.
3) Net Assets
As of April 30, 2018, our Group recorded total net assets of ¥61,572 million, down ¥1,239 million
from the previous consolidated fiscal year ended January 31, 2018.
Net assets decreased mainly due to decreases in retained earnings and in foreign currencytranslation adjustment of ¥338 million and ¥873 million, respectively.
(3) Explanation of Consolidated Performance Forecast and Other Future Predictions
For the Sixth Medium-Term Business Plan (for the period between the fiscal year ended January
2018 and the fiscal year ending January 2020), the Group has adopted the 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.
In this consolidated fiscal year, the second 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 2019

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 2019

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
At January 31, 2018ASSETS
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
Reversal of reserve for returned products
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
Other fixed liabilities
Total Fixed Liabilities
Total Liabilities

6

At April 30, 2018

31,346
16,440
6,059
293
2,359
1,898
(221)
58,17826,90417,012
6,341
390
2,802
2,346
(162)
55,636

7,105
5,878
8,131
21,116

6,930
5,858
8,191
20,980

1,271
2,036
3,307

1,193
2,377
3,571

1,877
(12)
1,865
26,28984,467

1,679
(12)
1,667
26,21981,855

5,194
1,797
2,578
1,035
51
208
6,808
17,673

5,599
1,983
1,631
1,141
67
－
6,382
16,806

290

283

516

528

3,175
3,982
21,655

2,664
3,476
20,283

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2019

(Millions of yen)
At January 31, 2018

At April 30, 2018

NET ASSETS
I. Shareholders’ Equity:
Capital stock

5,199

5,199

Capital surplus

5,179

5,179

Retained earnings

49,72949,390Treasury stock

(949)

(949)

Total Shareholders’ Equity

59,15858,8194442

Foreign currency translation adjustment

1,490

616

Total Accumulated Other Comprehensive Income

1,534

658

III. Non-controlling Interests

2,119

2,093

Total Net Assets

62,812

61,572

Total Liabilities and Net Assets

84,467

81,855

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

7

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2019(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 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
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, 2017
23,977
12,263
11,71470
69
11,715
6,774
4,940

Three months endedApril 30, 2018
25,798
12,77813,02034
68
12,986
7,540
5,446

40

73

5

－

67
113

39
113

4
92
90
7
195
4,858

3
116
47
12
179
5,380

1
87
88

1
108
109

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

0
3
3
5,485
1,874
(345)
1,529
3,955

56

102

3,473

3,852

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending January 2019

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, 2017
3,529

Three months endedApril 30, 2018
3,955

(2)

(2)

(210)
(213)
3,316

(933)
(935)
3,020

3,253

2,977

63

43

(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 2019(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 2019

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

Child Care Health &Service Elder Care
Business
Business

China
Business

Singapore
Business

LansinohBusiness

Subtotal

Other
Businesses(Note 1)

Total

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

8,729

1,931

1,681

7,092

1,282

2,935

23,653323

23,977－

23,977

－

－

－

31

1,028

－

1,060

－

1,060

(1,060)

－

8,729

1,931

1,681

7,124

2,311

2,935

24,714323

25,038(1,060)23,977

1,752

53

97

2,477

664

544

5,589

35

5,624

(683)

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 ¥683 million from adjustments in segment profit includes ¥11 million in elimination ofintersegment transactions, and 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.

Three months ended April 30, 2018
1. Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)
Reporting Segment
Domestic
Baby &
MotherCare
Business
Net sales
Net sales toexternalcustomers
Internal sales
or exchange
betweensegments
Total
Segment profit

Child Care Health &Service Elder Care
Business
Business

China
Business

Singapore
Business

LansinohBusiness

Subtotal

Other
Businesses(Note 1)

Total

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

9,393

1,664

1,673

7,779

2,023

2,948

25,483314

25,798－25,798

－

－

－

27

904

－

931

－

931

(931)

－

9,393

1,664

1,673

7,806

2,928

2,948

26,415314

26,729(931)

25,798

1,875

44

80

2,961

731

463

6,156

26

6,183

(737)

5,446

(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 ¥737 million from adjustments in segment profit includes ¥31 million in elimination ofintersegment transactions, and negative ¥768 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 2019

2. Changes in Reporting Segments, etc.
From the consolidated first three-month period under review, we decided to change thedenomination of our "Overseas Business" renaming it to "Singapore Business" that shall be
engaged in various businesses under the Pigeon brand mainly in the ASEAN and countries ofthe Middle East, while the business conducted under the Lansinoh brand and mainly
developed in Europe and the U.S., which had been a part of the "Overseas Business" so far,
was set up as an independent segment named "Lansinoh Business," and the reporting fromnow on will be done based on a division into a total of six segments.
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