Summary of Financial Results
for the Third Quarter of Fiscal Year Ending December 2020
[Japanese Standards] (Consolidated)
November 5, 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: November 16, 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: None

1. Consolidated Business Performance for the First Three Quarters of Fiscal
Year Ending December 31, 2020 (January 1 to September 30, 2020)(1) Consolidated Operating Results (cumulative)

3Q ended September 30, 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
73,838(4.8)%
12,661(8.8)%
13,569(3.3)%
9,365(2.1)%

3Q ended October 31, 201977,528(2.4)%
13,886(17.6)%
14,025(20.7)%(Note) Comprehensive income: 3Q ended September 30, 2020
¥8,575 million (4.6%)
3Q ended October 31, 2019¥8,202 million (23.3% negative)
Net Income per Share (¥)

9,568(21.8)%

Diluted Net Income per
Share (¥)

3Q ended September 30, 2020

78.25

－

3Q ended October 31, 2019

79.91

－

(2) Consolidated Financial Position
Total Assets
3Q ended September 30, 2020

Net Assets

88,811

FY ended December 31, 201990,491(Reference) Shareholders’ Equity: 3Q ended September 30, 2020
FY ended December 31, 2019

Equity Ratio (%)

70,08076.0

70,463¥67,475 million¥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
36.00
FY ending December 31, 2020
(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 Year Ending
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

－
－
－
－
Full year
99,00014,00015,1009,800
81.88(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.

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)
3Q ended September 30, 2020: 121,653,486
FY ended December 31, 2019: 121,653,486
2) Amount of treasury stock at the period-end
3Q ended September 30, 2020: 2,017,658
FY ended December 31, 2019: 1,926,426
3) Average number of shares outstanding during the period (quarter accumulation)
3Q ended September 30, 2020: 119,688,777
3Q ended October 31, 2019: 119,751,859(Note) Amount of treasury stock at the period-end includes Company shares held by the board incentive plan (BIP) trust forcompensation of directors (124,800 shares as of 3Q ended September 30, 2020; 33,600 shares as of FY ended
December 31, 2019). Company shares held by the BIP trust for compensation of directors are also included in thetreasury stock subtracted in the calculation of the average number of shares outstanding during the period.

* 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 Third 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 ............................................................................................... 4(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 Third Quarter) ............................................................................. 7
Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of Third 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 Third 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 firstnine-month period under review, the spread of coronavirus disease 2019 (COVID-19) caused acontinued decline in global economic activities. In Japan, although restrictions on economic
activities (voluntary decision to stay home by consumers, etc.) have been relaxed and movement
towards a slight recovery has been observed, tough conditions continue. In countries throughout theworld, economic activities have stagnated due to factors such as the extension and restatement oftravel restrictions, behavioral restrictions, and lockdowns (city closures) by governments. Currently,
it is impossible to predict when COVID-19 will end and uncertainty toward the future remains.
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 and addressing
babies' unique needs.”
Business performance during the consolidated first nine-month period under review was as follows.
Net sales amounted to ¥73,838 million (down 4.8% YOY).
Regarding earnings, due to factors such as decreased sales and an increased selling, general andadministrative expense ratio, operating income was ¥12,661 million (down 8.8% YOY), ordinary
income was ¥13,569 million (down 3.3% YOY), and quarterly net income attributable to owners ofparent was ¥9,365 million (down 2.1% YOY).
The main exchange rates used in the preparation of this nine-month period’s financial statements for
the Company’s overseas consolidated subsidiaries (revenues and expenses) are as follows:
・1US$: 107.55 yen (109.12 yen)
・1 CNY: 15.37 yen (15.89 yen)
Note: Figures in parentheses represent the exchange rate in the same period of the previous fiscal
year.
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 of the current fiscal year, the Japan Businesssegment 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 of four 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 ¥33,991 million (down
7.2% YOY) and segment profit was ¥2,446 million (down 30.4% YOY).
During the consolidated first nine-month period under review, the spread of COVID-19 caused thenumber of foreign tourists visiting Japan to continue to decrease drastically compared to the same
period of the previous year. In the category of products for babies and mothers, this caused net sales

2

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2020of product groups with particularly high inbound demand to decrease year-on-year. On the other
hand, in July, we launched the new product “Microwavable Packed Soft Rice for Babies,” whichmakes it possible to prepare freshly cooked Rice porridge simply by warming it in the microwave
for 50 seconds. Then, in August, we launched the “Adaptor for the Breastmilk Storage Bags,”
which can be directly connected to breast pumps during pumping for easy storage of breast milk.
In the category of products for health and elder care, during the consolidated first nine-month period
under review, a higher level of hygienic awareness led to increased demand for some products, andnet sales rose year-on-year.
Regarding child care service, we currently provide services to a total of seventy-one facilities
throughout Japan, and shall continue to develop this business further while striving to improve thequality of service content.
Profit was down year-on-year due to factors including a decrease in net sales, mainly for products
for babies and mothers, and a declining gross profit margin caused by a worsening product mix.
All consumer events that are part of the Group’s efforts for direct communication have beencanceled in order to prevent the spread of COVID-19. The “FUNRIDE Project—Let’s Overcome
COVID-19 Together!” aims to alleviate the anxiety of mothers and fathers during the ongoingpandemic by providing helpful information such as “How Parents Feel about Going Out During
COVID-19” and “Safe Outdoor Activities” to support family outings as well as organizing online
seminars for current and expecting mothers.
China BusinessNet sales in this segment amounted to ¥27,257 million (down 0.3% YOY), and segment profit also
decreased to ¥9,729 million (down 0.8% YOY).
The spread of COVID-19 in China appears to be nearing an end. The distribution of goods in urban
areas has recovered to almost normal levels, and corporate activities and consumption activities arealso recovering. Although sales continued to grow in the e-commerce channel that is the focus of
the Group, tough conditions continued in offline channels. Profit was down slightly year-on-year
due to factors including a decrease in gross profit caused by a decline in net sales, as well as anincrease in distribution expenses.
Regarding net sales in China on a local currency basis, sales of nursing bottles (our core products)
and skincare products were strong, and overall net sales increased year-on-year.
Singapore BusinessNet sales of the segment amounted to ¥9,617 million (down 7.3% YOY), and segment profit
decreased to ¥1,745 million (down 1.0% YOY).
In the ASEAN region and India, which are areas supervised by this segment, COVID-19 continued
to spread and have a significant impact. This is especially true in India, where sales office andfactory locations were closed for approximately eight weeks from late March to the end of May.
Furthermore, sales activity in India continue to be limited due to the severe conditions of thepandemic. In Malaysia, the sales office was closed for approximately seven weeks from late Marchto the mid-May. However, sales activities have currently been resumed and sales are recovering
gradually. Nevertheless, they have not reached normal levels. With a few exceptions, othercountries and regions are also being strongly impacted by factors such as customers voluntarily
deciding to stay home and stagnation of corporate activities. As a result, net sales in this segment
were down year-on-year.
Profit was down slightly year-on-year due to the inability to cover the decrease in gross profit
caused by a decline in net sales, despite an improved cost rate due to increased operation at someplants.
Lansinoh BusinessNet sales of the segment amounted to ¥9,498 million (down 4.7% YOY), and segment profit
decreased to ¥1,392 million (down 4.9% YOY).
COVID-19 has severely impacted North America. However, sales of nipple care creams, our main
product, and breast-feeding related products including consumable products were strong,particularly in the e-commerce channel. Due to the spread of COVID-19, conditions continue to be3

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

tough for sales of breast pumps through the DME (Durable Medical Equipment) channel and thehospital/maternity clinic channel. Moving forward, the Group will work to achieve recovery inthese channels. Furthermore, in order to further expand business in the Chinese market (Lansinoh
Laboratories Shanghai) and Europe, in addition to strengthening e-commerce, the Group is
implementing marketing activities, brand strengthening activities, etc.
(2) Explanation of Financial Position(Assets)
As of September 30, 2020, our Group recorded total assets of ¥88,811 million, down ¥1,680 million
from the previous consolidated fiscal year ended December 31, 2019. Both current and fixed assets
decreased by ¥444 million and ¥1,236 million, respectively.
Current assets decreased mainly due to a decrease in notes and accounts receivable - trade of ¥1,714
million, despite increases in cash and deposits of ¥311 million and in merchandise and finishedgoods of ¥582 million.
Fixed assets decreased mainly due to a decrease in tangible fixed assets, namely buildings andstructures, of ¥501 million, as well as a decrease in other intangible fixed assets of ¥651 million.
(Liabilities)
As of September 30, 2020, our Group recorded total liabilities of ¥18,730 million, down ¥1,297
million from the previous consolidated fiscal year ended December 31, 2019. Both current andfixed liabilities decreased by ¥1,120 million and ¥177 million, respectively.
Current liabilities decreased mainly due to decreases in electronically recorded obligations operating of ¥328 million and in other current liabilities of ¥1,480 million, despite increases inincome taxes payable of ¥205 million and in accrued bonuses to employees of ¥561 million.
Fixed liabilities decreased mainly due to a decrease in other fixed liabilities of ¥251 million.
(Net Assets)
As of September 30, 2020, our Group recorded total net assets of ¥70,080 million, down ¥383
million from the previous consolidated fiscal year ended December 31, 2019.
Net assets decreased mainly due to a decrease in foreign currency translation adjustment of ¥705
million, despite an increase in retained earnings of ¥862 million.
(3) Explanation of Consolidated Performance Forecast and Other Future Predictions
The global pandemic of COVID-19 infections seems to be nearing an end in China. Nevertheless,
infections continue to spread in other countries and regions, and the future of the entire worldcontinues to be uncertain.
Under these circumstances, upon considering the business results for the consolidated firstnine-month period under review and the impact of COVID-19 in the future, on November 5, 2020,
we revised our forecast of business results for the full fiscal year that was announced on June 4,2020 as follows: net sales of ¥99,000 million, operating income of ¥14,000 million, ordinary
income of ¥15,100 million, and net income attributable to owners of parent of ¥9,800 million.

4

Pigeon Corporation (7956) Summary of Financial Results for the Third 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 September 30,
2020

32,416
16,588
8,144
400
2,666
1,933
(216)
61,93332,727
14,873
8,726
376
3,125
1,870
(211)
61,488

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

6,556
5,983
9,786
22,326

867
2,996
3,863

658
2,345
3,004

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

1,992
(0)
1,991
27,32288,811

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

4,814
1,680
1,478
1,490
53
4
4,997
14,518

417
98
3,873
4,389
20,028

411
178
3,621
4,212
18,730Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2020

(Millions of yen)
At December 31, 2019

At September 30,
2020

Capital stock

5,199

5,199

Capital surplus

5,179

5,179

Retained earnings

58,97959,842

Treasury stock(1,088)(1,477)

Total Shareholders’ Equity

68,26968,74325

11Foreign currency translation adjustment(572)(1,278)

Total Accumulated Other Comprehensive Income(547)(1,267)

III. Non-controlling Interests

2,741

2,604

Total Net Assets

70,46370,080Total Liabilities and Net Assets

90,491

88,811

NET ASSETS
I. Shareholders’ Equity:

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

6Pigeon Corporation (7956) Summary of Financial Results for the Third 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 Third 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 fixed assets
Loss on disposal of fixed assets
Loss on sales of shares of subsidiaries and associates
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

7

Nine months ended
October 31, 201977,52837,87539,65230
35
39,64725,761
13,886Nine months ended
September 30, 2020
73,83836,56837,2694153
37,25824,596
12,661

143
760
160
1,064

114
720
405
1,241

9
347
500
68
925
14,025

2
179
66
84
332
13,569

4
113
118

3
33
36

8
90
－
－
1
100
14,044
4,360
(76)
4,284
9,759
191

21
57
170
7
－
257
13,349
3,955
(157)
3,798
9,551
186

9,568

9,365

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

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

Net Income
Other Comprehensive Income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total Other Comprehensive Income
Quarterly Comprehensive Income(Break down)
Quarterly comprehensive income on parent
company
Quarterly comprehensive income on
non-controlling interests

8

Nine months ended
October 31, 2019
9,759

Nine months ended
September 30, 2020
9,551

0(1,558)(1,557)
8,202

(14)
(961)
(975)
8,575

7,951

8,644

250

(68)

Pigeon Corporation (7956) Summary of Financial Results for the Third 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)
Nine months ended October 31, 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

34,68926,800

6,166

9,870

77,528－77,528Internal sales or
exchange between
segments

1,941

526

4,209

94

6,772

(6,772)－

Total

36,631

27,327

10,376

9,965

84,300(6,772)

77,528Segment profit

3,513

9,811

1,763

1,464

16,553(2,667)

13,886(Notes)1. The negative amount of ¥2,667 million from adjustments in segment profit includes ¥150 million in elimination ofintersegment transactions and negative ¥2,817 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.

Nine months ended September 30, 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

31,586

27,040

5,740

9,470

73,838－73,838Internal sales or
exchange between
segments

2,405

216

3,876

28

6,527

(6,527)－

Total

33,991

27,257

9,617

9,498

80,365(6,527)

73,838Segment profit

2,446

9,729

1,745

1,392

15,314(2,653)

12,661(Notes)1. The negative amount of ¥2,653 million from adjustments in segment profit includes negative ¥154 million in eliminationof intersegment transactions and negative ¥2,498 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 of the current

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

fiscal year, the Japan Business segment now aggregates the manufacturing and sales businessconducted outside the Group by domestic subsidiaries included in the segments of Domestic
Baby & Mother Care Business, Child Care Service Business, Health & Elder Care Business,
and Other. As a result, this report now consists of four segments.
Segment information for the previous consolidated nine-month period was created using the
calculation method for segment profit after the changes were made.

10