Summary of Financial Results
for the Fiscal Year Ended January 31, 2019
[Japanese Standards] (Consolidated)
March 4, 2019
Name of Listed Company: Pigeon Corporation (Stock code: 7956)
Listings: First Section, Tokyo Stock Exchange
Website: www.pigeon.co.jp
Representative: Shigeru Yamashita (President and COO)
Contact person: Tsutomu Matsunaga (Managing Officer, Business Strategy Division)/Tel: +81-3-3661-4188
Scheduled Date of Annual General Shareholders’ Meeting: April 25, 2019
Scheduled Commencement Date of Dividend Payments: April 26, 2019
Scheduled Filing Date of Annual Securities Report: April 26, 2019
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 January 31,
2019 (February 1, 2018 to January 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 January 31, 2019104,747

2.1

19,612

1.0

20,398

1.3

14,238(1.9)

FY ended January 31, 2018

102,563

8.4

19,412

21.2

20,12922.3

14,51530.5(Note) Comprehensive income:FY ended January 31, 2019
FY ended January 31, 2018¥12,111 million (22.9% negative)¥15,710 million (81.7%)

Net Income
per Share (¥)

Diluted Net Income
per Share (¥)

Return on
Equity (%)

Total Assets/
Ordinary Income (%)

FY ended January 31, 2019118.89

－

22.8

23.9

18.7

FY ended January 31, 2018121.20

25.7

24.6

18.9

(Reference) Equity in earnings of affiliates:－
FY ended January 31, 2019
FY ended January 31, 2018

OperatingMargin (%)¥－ million¥54 million(2) Consolidated Financial Position
Total Assets
FY ended January 31, 2019

Net Assets

86,006

FY ended January 31, 2018
(Reference) Shareholders’ Equity:

Equity Ratio (%)

Net Assets
per Share (¥)

66,58274.7

536.4384,46762,81271.9

506.79FY ended January 31, 2019
FY ended January 31, 2018

¥64,242 million¥60,693 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 January 31, 201913,632(4,704)(8,338)30,949FY ended January 31, 2018

17,094(3,586)(12,812)31,346

2. Cash Dividends
Annual Dividend (¥)
1Q-end2Q-endFY ended January 31, 2018

－

31.00

FY ended January 31, 2019－

FY ending December 31, 2019
(Forecast)

－

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

Dividends on
Consolidated
Net Assets(%)

3Q-end Year-end

Total

－

35.00

66.00

7,904

54.5

14.0

34.00

－

34.00

68.00

8,143

57.2

13.0

35.00

－

35.00

70.00

－

3. Consolidated Business Performance Forecasts for the Fiscal Year Ending
December 31, 2019 (February 1, 2019 to December 31, 2019)
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
106,200
20,00020,00014,300119.40－－－－(Note) Subject to approval of the “partial revision of the Articles of Incorporation” at the 62nd Ordinary General Meeting of
Shareholders(Fiscal year ending January 31, 2019) scheduled for April 25, 2019, the fiscal period will change from the year
ending January 31 to the year ending December 31, beginning with the 2019 fiscal year. As such, in the fiscal year ending
December 31, 2019 now in progress, the consolidation period in 2019 for the consolidated companies that currently settle
their accounts on January 31 shall be the 11-month period from February 1 to December 31, 2019. Subsequentconsolidation periods shall be from January 1 to December 31 of each year.
For consolidated companies 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.

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: None
2) Changes in accounting policies other than the above 1): None
3) Changes in accounting-based estimates: None
4) Restatements: None
(3) Number of outstanding shares (common stock)1) Number of shares outstanding at the period-end (including treasury stock)
FY ended January 31, 2019: 121,653,486 shares
FY ended January 31, 2018: 121,653,486 shares2) Amount of treasury stock at the period-end
FY ended January 31, 2019: 1,892,704 shares
FY ended January 31, 2018: 1,892,329 shares
3) Number of average shares outstanding during the period
FY ended January 31, 2019: 119,760,958 shares
FY ended January 31, 2018: 119,761,277 shares* 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 January 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 ................................................................ 5(4) Future Directions ......................................................................................................................... 5(5) Income Appropriation Policy and Dividends for the Term Under Review and Next Term ....... 6
2. Management Policies ....................................................................................................................... 6(1) Basic Policies ............................................................................................................................. .6(2) Performance Targets................................................................................................................... .6(3) Medium-Term Management Strategies ....................................................................................... 7(4) Issues to Address ......................................................................................................................... 7
3. Basic Approach for the Selection of Accounting Standards ............................................................ 7
4. Consolidated Financial Statements and Main Notes........................................................................ 8(1) Consolidated Balance Sheets....................................................................................................... 8(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ........... 10
Consolidated Statement of Income ............................................................................................ 10
Consolidated Statement of Comprehensive Income .................................................................. 11(3) Statement of Changes in Consolidated Shareholders’ Equity ................................................... 12(4) Consolidated Statements of Cash Flows ................................................................................... 14(5) Notes on Consolidated Financial Statements ............................................................................ 16(Notes Regarding Going Concern Assumptions)...................................................................... 16(Segment Information) .............................................................................................................. 16(Per Share Information) ............................................................................................................ 20(Material Subsequent Events) ................................................................................................... 20

1

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

1. Overview of Management Results and Related Matters(1) Overview of Management Results for the Term Under Review
1) Performance Overview
During this consolidated accounting year (February 1, 2018 to January 31, 2019), despite the effectof a series of natural disasters in Japan, Japan’s economy continued to recover at a gradual pace as awhole, thanks to an increase in corporate earnings and enhancement in the employment
environment. In the global economy, in addition to the European and U.S. economies continuing torecover at a gradual pace, the Chinese economy also picked up steadily, although there was growing
trade friction between the U.S. and China.
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 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 ¥104,747 million (up 2.1% YOY). Regarding earnings, operating income rose to¥19,612 million (up 1.0% YOY) thanks to a reduction of approximately 2.1 percentage points in thesales cost ratio from the previous term. Ordinary income recorded ¥20,398 million (up 1.3% YOY),
and net income attributable to owners of parent decreased to ¥14,238 million (down 1.9% YOY).
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$: 110.43 yen (112.16 yen)
・1 CNY: 16.70 yen (16.62 yen)
Note: Figures in parentheses represent the exchange rate in the same period of the previous fiscal
year.
2) Segment Review
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 fiscal year under review, we decided tochange the denomination of our "Overseas Business" renaming it to "Singapore Business" that shallbe 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 and mainly developed inEurope and the U.S., which had been a part of the "Overseas Business" so far, was set up as an
2

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2019independent segment named "Lansinoh Business," and the reporting from now on will 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 previous
fiscal year into the figures calculated in accordance with the new calculation method after the above
revision.
Domestic Baby & Mother Care BusinessNet sales of the segment amounted to ¥35,593 million (up 5.2% YOY). Segment profit increased to¥6,096 million (up 2.8% YOY). Amid continuing demand from inbound tourism, Pigeon launcheda slate of new products and overhauled others. In February the Company launched “Pigeon
Medicated Body Foam Soap (Peach Leaves),” a body soap specially formulated for babies’
sensitive skin. March saw the launch of an improved package for “Runfee,” making it easier to pushin the rear-facing position. In July the Company overhauled the “Bonyu Assist® breast pump series,
which is equipped with “Baby Rhythm” technology created through more than 60 years of baby
nursing research. Finally, in August the Company launched the “Pigeon Electric Baby Nasal
Aspirator,” developed jointly with otolaryngologists. Sales and market share steadily rose during
the period under review.
Moreover, during this fiscal year, we have held a number of events planned as a part of our directcommunications program such as our “Premama Class” for women expecting to give birth in thenear future and a seminar about breastfeeding while parenting for health care professionals,
organized 31 times. A total of approximately 3,100 people have participated. At Pigeon Info, awebsite created to support women in pregnancy, childbirth and early childcare, the Company added
a number of improvements. In addition to updating the product lineup, Pigeon redoubled its efforts
to work with medical practitioners through a website dedicated to their needs, opened in May 2018.
Improvements to the site are continuing as Pigeon strives to make Pigeon Info more appealing anduser-friendly than ever.
Child Care Service BusinessNet sales of the segment amounted to ¥4,472 million (down 40.7% YOY), and segment profit
decreased to ¥169 million (down 22.7% YOY). It should be also noted that as of March 2018, thebulk 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 concluded new contracts for five in-company child-care facilities. We currently provide
services to a total of seventy-six facilities, and shall continue to develop this business further fromnow on striving to improve the quality of the content we offer.
Health & Elder Care BusinessNet sales of the segment amounted to ¥6,986 million (down 1.0% YOY), and segment profit
decreased to ¥353 million (down 24.5% YOY). At the International Home Care & Rehabilitation
Exhibition held in October, we exhibited new products scheduled for release in 2019. These new
products met with favorable reception from customers and distributors. We will continue to focus
on further strengthening our sales activities toward retail stores and nursing care facilities, and will
implement thorough measures to ensure that the quality of our nursing care services, etc., isimproved.
China BusinessNet sales in this segment increased to ¥35,581 million (up 3.7% YOY), because sales of coreproducts such as nursing bottles and nipples and skincare products remained strong, and segment
profit increased to ¥11,972 million (up 4.0% YOY). In particular, there continued to be strong salesof the “Medicated Skincare Series (Peach Leaves)” and “Bonyu Jikkan® Nursing Bottle My
Precious.” The nursing bottle with handle and the steam sterilizer released in the second half of the3

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2019fiscal year were also met with favorable reception. In addition, we will continue to strengthen our
activities toward the growing E-commerce market; we will utilize social networking services andinfluencers further for 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 andmaternity clinics, in order to increase contact points with customers and expand our operation.
Singapore BusinessIn this segment, net sales amounted to ¥12,133 million (up 18.0% YOY). Segment profit also
increased to ¥2,744 million (up 10.3% YOY), thanks to the improvement of gross profit margin, as
well as the effective use of selling, general and administrative expenses. In Indonesia and the other
ASEAN countries as well as the countries of the Middle East, we enjoyed a steady expansion ofsales centering on nursing bottles and nipples. We shall develop our sales and marketing activities
further, striving to boost the presence of our brands in these areas also.
Lansinoh BusinessNet sales of the segment amounted to ¥12,753 million (up 1.8% YOY), and segment profit also
increased to ¥1,576 million (up 1.5% YOY). In North America, sales of breast pumps and otherproducts are steadily expanding through DME Channel, maternity hospitals, and other new sales
routes. In addition to North America, we shall pave the way for further business expansion in
Europe and Lansinoh Shanghai by conducting a wide range of measures including strengthening
our marketing and brand reinforcement.
Other Businesses
Net sales of the segment amounted to ¥1,402 million (up 8.8% YOY), and segment profit stood at¥142 million (up 12.8% YOY).
(2) Overview of Financial Position for the Term Under Review
1) Assets
As of January 31, 2019, total assets amounted to ¥86,006 million, up ¥1,538 million from theprevious consolidated fiscal year ended January 31, 2018.
Current assets had an increase of ¥747 million, and fixed assets had an increase of ¥791 million.
Current assets increased mainly due to increases in merchandise and finished goods of ¥1,300
million and in receivables of ¥499 million, despite decreases in cash and deposits of ¥397 million
and in notes and accounts receivable – trade of ¥1,436 million.
Fixed assets increased mainly due to an increase in software in progress of ¥1,199 million.
2) Liabilities
As of January 31, 2019, total liabilities amounted to ¥19,423 million, down ¥2,231 million from theprevious consolidated fiscal year ended January 31, 2018. Current liabilities had a decrease of¥2,049 million, while fixed liabilities had a decrease of ¥182 million.
Current liabilities decreased mainly due to decreases in notes and accounts payable - trade of ¥626
million, in income taxes payable of ¥627 million, and in other current liabilities ¥890 million,
despite an increase in accounts payable of ¥221 million.
Fixed liabilities decreased mainly due to a decrease in deferred tax liabilities of ¥178 million.
3) Net Assets
As of January 31, 2019, total net assets amounted to ¥66,582 million, up ¥3,770 million from theprevious consolidated fiscal year ended January 31, 2018.
This increase resulted mainly from an increase in retained earnings of ¥5,974 million, despite adecrease in foreign currency translation adjustment of ¥2,400 million.
4) Cash Flows
As of January 31, 2019, cash and cash equivalents (hereinafter referred to as “net cash”) amounted
4Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2019to ¥30,949 million, up ¥397 million from a year earlier.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥13,632 million, down from ¥17,094 millionof the previous year. This increase is mainly due to ¥20,262 million in income before income taxes
and ¥2,638 million in depreciation. Contrasting factors included a ¥2,300 million increase ininventories and ¥6,491 million in income taxes paid.
Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥4,704 million, up from ¥3,586 million of the previous
year. This is mainly due to ¥3,686 million in purchases of tangible fixed assets and ¥1,704 million
in purchase of intangible fixed assets.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥8,338 million, down from ¥12,812 million of theprevious year. This is mainly due to ¥8,260 million in payment of cash dividends.
(3) Overview of Cash Flows for the Term Under Review
Cash flow indicators of the Group are shown below.
FY2017FY2018FY2019Equity Ratio (%)

66.4

71.9

74.7

Equity Ratio based on Market Price (%)

464.5

604.0

590.4

Debt Repayment Term (years)

0.4

0.0

0.0

Interest Coverage Ratio (times)

335.2

1,523.8

6,779.1- 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 "Sixth Medium-Term Business Plan (for the period between the fiscal year ended January
2018 and the fiscal year ending January 2020)," our Group has put up the following slogan,"Building our dreams into the future – by creating a bridge towards the Global Number One
manufacturer of baby products –."We will further develop and enhance our business operating system, while pursuing in the
improvement of management quality and steadily implementing the measures grounded on the
newly formulated strategies for each business segment and the functional strategy that serves as thefoundation thereof. One area the Company has particularly singled out for continued growth is theoverseas market. In the fiscal year ended January 2019 the Company established a three-divisionorganizational framework, consisting of the China Business Division, Singapore Business Divisionand Lansinoh Business Division. To secure still further improvements in business results, we areworking hard to promote fast decision-making in the operations of each business, expand anddeepen our presence in existing overseas markets, and advance dynamically into new markets.
The Company is adjusting its management framework to enhance enterprise value. As a result of
the reorganization of January 16, 2019, the Company has concentrated and strengthened its
Group-wide head-office functions at Global Head Office (GHO). Operating segments, which areresponsible for business management and growth, are divided into four segments by region. In
addition to the Japan Business (Domestic Baby & Mother Care Business, Health & Elder Care
Business and Child Care Service Business), they are the China Business, Singapore Business andLansinoh Business. This reorganization clarifies roles and responsibilities and improves
5Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2019

communication with GHO, propelling the Group onto a stable, long-term growth arc. The fiscal
year ending December 2019 is the final year of the Sixth Medium-Term Business Plan, so theGroup is pushing resolutely forward to achieve its targets in champion form.
Company’s forecast of business results for the Pigeon Group in the fiscal year ending December 31,
2019*, published on this date, March 4, 2019, is as follows. In view of the business results for the
consolidated fiscal year, the Company forecasts net sales of ¥106.2 billion, operating income of ¥20
billion, ordinary income of ¥20 billion and net income attributable to owners of parent of ¥14.3
billion.
*Pending approval at the 62nd Ordinary General Meeting of Shareholders (Fiscal year ending
January 31, 2019) scheduled for April 25, 2019, the settlement date will change from January 31
to December 31.
(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
facilities to 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 ending January 2020)
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 ¥34 per share (ordinary dividend of ¥34). For the year-end
dividend, the Group forecasts a dividend of ¥34 per share (ordinary dividend of ¥34). As a result,the annual dividend for the term under review will total ¥68 per share (ordinary dividend of ¥68), a
per share increase by ¥2 from the previous year.
2. Management Policies(1) Basic Policies
The Group deploys operation to fulfill its mission to bring joy, happiness and inspiration to babies
and families around the world by providing them with products and services that embody its
corporate philosophy “love.” Guided by this commitment, the Group has set in its medium tolong-term corporate vision “to be the baby product manufacturer most trusted by the world’s babies
and families i.e. “Global Number One.”(2) Performance Targets
For the "Sixth Medium-Term Business Plan (for the period between fiscal year ended January 2018
and fiscal year ending January 2020)," our Group has put up the following slogan, "Building our
dreams into the future – by creating a bridge towards the Global Number One manufacturer of baby
products –." By steadily implementing a range of measures in line with the medium-term goals
stated in the following section, the level of achievements aimed at for the term ending January 2020,
which is the last fiscal year of the Plan, is net sales of ¥110 billion, operating income of ¥20 billion,
and net income attributable to owners of parent of ¥13.8 billion. Moreover, in order to ensure yet
further improvement of profitability and efficiency of capital, the Group shall deem PVA (Pigeon
Value Added), return on invested capital (ROIC), etc. as important management indices, and strive
6

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

to improve each of them even more.
(3) Medium-Term Management Strategies
For the "Sixth Medium-Term Business Plan (for the period between fiscal year ended January 2018
and fiscal year ending January 2020)," we have set the following three basic strategies that shallhelp 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.
(4) Issues to Address
The Group expects uncertainty to linger in the economic environment in which it operates, due toconcerns over the slowdown in business growth of China and uncertainties in the global economy
centering on Europe and the U.S., but at the same time, consumption trends in China and Japan arequite steady and there is also much to be expected from economic growth of Asian countries andother newly emerging countries around the world.
Amid such circumstances, during the "Sixth Medium-Term Business Plan (for the period between
fiscal year ended January 2018 and fiscal year ending January 2020)," the Group shall steadily
implement a range of measures prescribed in the newly established "Strategy for ImportantCategories" and individual strategies of each segment. In particular, the Group is focusing on China
and Overseas operations, which are positioned as a continuing growth field. In this arena the Groupwill expand and deepen its presence in existing markets, most notably in China and North America.
In addition, we shall select a number of overseas markets of importance to us already, or those wewant to expand our presence in in the future, and make strong efforts to establish firm businessfoundations in such areas in Asia, Africa, etc., which can play important roles for the future growthof the Group.
Further, with respect to the Group’s Business Continuity Plan, we will further enhance the global
risk management structure that has already been put in place.
Moreover, in order to further enhance the soundness and transparency of management going
forward, a through enforcement of internal control systems, including the compliance organization
will be made for fortifying corporate governance.
3. Basic Approach for the Selection of Accounting Standards
The consolidated financial statements of our Group are prepared based on Japanese standards.
In the future, we will have to prepare these statements based on the International Financial
Reporting Standards (IFRS) for the purpose of improving global comparability of financial
information, and we will continue to consider them, including the application period.

7

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

4. 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
Deferred tax assets - current
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

8

At January 31, 2018

At January 31, 2019

31,346
16,440
6,059
293
2,359
739
278
880
(221)
58,17830,94915,004
7,360
405
2,839
724
778
1,062
(197)
58,92516,01015,362(8,904)(8,672)

7,105
17,087(11,184)
5,902
6,517

6,689
18,019(11,821)
6,198
6,642

(4,984)(5,007)

1,533
5,878
695
21,116

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

1,271
456
1,001
578
3,307

1,000
463
2,200
558
4,223

1,020
10
217
177
452
(12)
1,865
26,28984,467

889
3
228
177
434
(5)
1,729
27,08086,006

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 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 special extra retirement payments
Other current liabilities
Total Current Liabilities
II. Fixed Liabilities:
Deferred tax liabilities
Net defined benefit liability
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

9

At January 31, 2018

At January 31, 2019

5,194
1,797
3,141
2,578
1,035
51
208
3,666
17,673

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

2,924
290

2,746
309

516

599

250
3,982
21,655144
3,800
19,423

5,199
5,179
49,729(949)
59,1585,199
5,179
55,704(951)
65,131

44
1,490
1,534
2,119
62,812
84,467

21
(910)
(888)
2,339
66,58286,006

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 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
Share of profit of entities accounted for using equity
methodSubsidy 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
Gain on step acquisitions
Total Extraordinary Income
VII. Extraordinary Loss:
Loss on sales of fixed assets
Loss on disposal of fixed assets
Impairment loss
Recall-related loss
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

10

Year Ended
January 31, 2018
102,563
52,01050,55270
50
50,572
31,15919,412(Millions of yen)
Year Ended
January 31, 2019104,747
50,88253,865354253,85834,246
19,612

187
19
－

228
18
108

54

－

812
188
1,263

650
289
1,295

11
418
75
42
547
20,129

2
452
－
54
509
20,398

115
95
848
1,058

131
112
－
243

60
22
－
187
271
20,916
5,931
225
6,157
14,759244
14,515

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

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

11

Year Ended
January 31, 2018
14,759(Millions of yen)
Year Ended
January 31, 2019
14,594(3)953
950
15,710(22)(2,460)(2,483)
12,111

15,373336

11,814296

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2019(3) Statement of Changes in Consolidated Shareholders’ Equity
Fiscal Year Ended January 31, 2018
(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

42,280Treasury
stock

Total
shareholders’equity(948)

51,711(7,065)(7,065)

14,515

14,515
(1)

(1)

－

－

7,449

(1)

7,447

5,199

5,179

49,729(949)

59,158

Accumulated other comprehensive income
Total
NonForeign
Valuation
accumulated
controllingcurrency
difference on
otherInterests
translation
available-forcomprehensive
adjustment
sale securities
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

47

628

676

1,349

Total net
assets53,736(7,065)
14,515
(1)

(3)

861

858

769

1,627

(3)

861

858

769

9,075

44

1,490

1,534

2,119

62,81212

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

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

66,58213

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2019(4) Consolidated Statements of Cash Flows(Millions of yen)
Year Ended
January 31, 2019Year Ended
January 31, 2018
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
Interest and dividend income
Share of (gain) loss of entities accounted for using equity
methodInterest expenses
Foreign exchange loss (gain)
Loss (gain) on sales of fixed assets
Loss on disposal of fixed assets
Gain on step acquisitions
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
Payments of loans receivableCollection of loans receivable
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments for lease deposits
Collection of lease deposits
Other
Net Cash Provided by (Used in) Investing Activities

14

20,916
2,444
－
6
186
110
68

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

70

82

(207)

(246)

(54)

－

11
187
(54)
22
(848)

2
65
(123)
278
－

376

646

(761)
115
(95)
345
34

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

8

6

(124)
22,760213(11)(5,868)17,094(1,263)
19,887238(2)(6,491)
13,632(2,199)162(1,055)
(1)
198
(0)
(1)
8

(3,686)453(1,704)
(1)
212
(0)
(1)
6

(587)

－

(131)
29
(7)
(3,586)

(39)
101
(44)
(4,704)

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2019Year Ended
January 31, 2018
III. Cash Flows from Financing Activities:
Decrease in short-term loans payable
Repayments of long-term loans payable
Payment of cash dividends
Dividends paid to non-controlling interests
Purchase of treasury stock
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

15(Millions of yen)
Year Ended
January 31, 2019(673)
(5,000)(7,066)(70)(1)(12,812)－－(8,260)(75)(1)(8,338)

599

(986)

1,294
30,052
31,346(397)
31,34630,949Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2019(5) Notes on Consolidated Financial Statements(Notes Regarding Going Concern Assumptions)Not applicable.
(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.
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 fiscal year 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 brandand mainly developed in Europe and the U.S., which had been a part of the "Overseas Business" sofar, was set up as an independent segment named "Lansinoh Business," and the reporting from now
on will be done based on a division into a total of six segments.
Segment information for the previous consolidated fiscal year is prepared using the changed
calculation method.
(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,
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 other16

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

countries 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 January 2019

3. Information Regarding Net Sales, Profit (Loss), Assets and Other Items in Each Reporting Segment
Fiscal Year Ended January 31, 2018
(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 Accounted(Note) 2
on(Note) 3 Consolidated(Note) 4
Financial(Note) 5
Statements(Note) 6

33,841

7,541

7,058

34,171

6,135

12,523

101,273

1,289

102,563－

102,563

－

－

－

133

4,150

－

4,284

－

4,284

(4,284)－

Total

33,841

7,541

7,058

34,305

10,286

12,523

105,557

1,289

106,847(4,284)

102,563

Segment Profit

5,928

218

468

11,514

2,488

1,553

22,171

126

22,298(2,885)

19,412

Segment
Assets13,113

1,410

3,248

28,366

14,824

6,680

67,643

1,197

68,84015,62784,467

Other Items
Depreciation
558
25
92
742
667
116
2,202
44
2,246
198
(Note) 7
Amortization
6
6
6
－
－
－
－
－
－
－
of Goodwill
Increase in
Tangible Fixed
Assets and
933
80
94
493
579
204
2,385
65
2,451
1,094
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 ¥2,885 million from adjustments in segment profit includes ¥6 million in elimination of intersegment transactions,and negative ¥2,892 million in non-allocable operating expenses. Non-allocable operating expenses are mainly administrative costs of ourGroup.
3. The amount of ¥15,627 million in adjustments in segment assets includes negative ¥1,144 million in eliminations of inter-segment
transactions, and ¥16,771 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.

18

2,444
6

3,546

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

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 Accounted(Note) 2
on(Note) 3 Consolidated(Note) 4
Financial(Note) 5
Statements(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

16,78986,006

Other 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 ¥16,789 million in adjustments in segment assets includes negative ¥1,232 million in eliminations of inter-segment
transactions, and ¥18,022 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.

19

2,638
166

5,376

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

(Per Share Information)
Previous fiscal year

Current fiscal year

(February 1, 2017 to January 31, 2018)(February 1, 2018 to January 31, 2019)¥506.79¥121.20¥536.43¥118.89

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.

Previous fiscal year

Current fiscal year

(February 1, 2017 to January 31, 2018)(February 1, 2018 to January 31, 2019)

14,515

14,238－－14,515

14,238

119,761,277

119,760,958

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)(Material Subsequent Events)
Not applicable.

20