Summary of Financial Results
for the Fiscal Year Ended January 31, 2018
[Japanese Standards] (Consolidated)
March 5, 2018
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, Corporate Planning & Administration Division)/Tel: +81-3-3661-4188
Scheduled Date of Annual General Shareholders’ Meeting: April 26, 2018
Scheduled Commencement Date of Dividend Payments: April 27, 2018
Scheduled Filing Date of Annual Securities Report: April 27, 2018
Preparation of Any Additional Explanatory Materials for Financial Results: None
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,
2018 (February 1, 2017 to January 31, 2018)(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, 2018

102,563

8.4

19,412

21.2

20,12922.3

14,51530.5

FY ended January 31, 2017

94,6402.6

16,015

10.3

16,462

9.2

11,1189.0(Note) Comprehensive income:FY ended January 31, 2018
FY ended January 31, 2017¥15,710 million (81.7%)¥8,647 million (3.6%)

Net Income
per Share (¥)

Diluted Net Income
per Share (¥)

Return on
Equity (%)

Total Assets/
Ordinary Income (%)

FY ended January 31, 2018121.20

－

25.7

24.6

18.9

FY ended January 31, 2017

92.84

21.8

21.5

16.9

(Reference) Equity in earnings of affiliates:－
FY ended January 31, 2018
FY ended January 31, 2017

OperatingMargin (%)¥54 million¥25 million(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio (%)

Net Assets
per Share (¥)

FY ended January 31, 201884,46762,81271.9

506.79FY ended January 31, 201778,88953,73666.4

437.43

FY ended January 31, 2018
FY ended January 31, 2017

¥60,693 million¥52,387 million(Reference) Shareholders’ Equity:(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, 2018

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

FY ended January 31, 2017

14,810(1,854)(6,223)30,052

2. Cash Dividends
Annual Dividend (¥)
1Q-end2Q-endFY ended January 31, 2017

－

25.00

FY ended January 31, 2018－

FY ending January 31, 2019
(Forecast)

－

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

Dividends on
Consolidated
Net Assets(%)

3Q-end Year-end

Total

－

28.00

53.00

6,347

57.1

12.5

31.00

－

35.00

66.00

7,904

54.5

14.0

34.00

－

34.00

68.00

－

3. Consolidated Business Performance Forecasts for the Fiscal Year Ending
January 31, 2019 (February 1, 2018 to January 31, 2019)
Net Sales

Operating Income

Millions of Yen

Full year

107,000% Millions of Yen

4.3

20,400(% 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

5.1

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) 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, 2018: 121,653,486 shares
FY ended January 31, 2017: 121,653,486 shares2) Amount of treasury stock at the period-end
FY ended January 31, 2018: 1,892,329 shares
FY ended January 31, 2017: 1,891,943 shares
3) Number of average shares outstanding during the period
FY ended January 31, 2018: 119,761,277 shares
FY ended January 31, 2017: 119,761,718 shares* This summary of financial results is exempt from audit procedures.
* 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 2018

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 ....... 5
2. Management Policies ....................................................................................................................... 6(1) Basic Policies ............................................................................................................................. .6(2) Performance Targets................................................................................................................... .6(3) Medium-Term Management Strategies ....................................................................................... 6(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 2018

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, 2017 to January 31, 2018), Japan’s economy
continued to recover at a gradual pace as a whole, thanks to an increase in corporate earnings andenhancement in the employment environment. In the global economy, in addition to the Europeanand 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 (forthe period between the fiscal year ending 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 first 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 strategies for each of our businessand function on the basis of the above business policies. As the result, net sales amounted to¥102,563 million (up 8.4% YOY), as supported by sales increases mainly in Japan and China.
Regarding earnings, operating income rose to ¥19,412 million (up 21.2% YOY) thanks to a
reduction of approximately 2.1 percentage points in the sales cost ratio from the previous term.
Ordinary income recorded ¥20,129 million (up 22.3% YOY), and net income attributable to ownersof parent also increased to ¥14,515 million (up 30.5% 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$: 112.16 yen (108.77 yen)
・1 CNY: 16.62 yen (16.35 yen)
Note: Figures in parentheses represent the exchange rate in the same period of the previous fiscal
year.
2) Segment Review
Our Group has 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.” Each segment is outlined below.
Please take note that in order to explain the profit status of each segment in a more detailed manner,
we decided to record expenses in non-allocable operating expenses associated with the Researchand Development Department, which had been included in the Adjustment section so far, in thesegment profit of each reporting segment starting from the consolidated fiscal year under review.
2

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

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 ¥33,841 million (up 6.3% YOY). Segment profit increased to¥5,928 million (up 23.0% YOY). Inbound demand continued to grow, driven by rising numbers ofvisitors to Japan. Responding to this demand, in February the Group launched its first hand-madeice cream product, “Baby Petit Ice.” In June the Group launched the new version of “Runfee,”single-tire baby stroller series that has earned high customer satisfaction. Later that summer, inAugust Pigeon launched “Bonyu Pad Fit Up® Saratto Chokyushu,” a breast pad with improved
absorbency and leak resistance. In December Pigeon launched “Bonyu Jikkan® Nursing Bottle My
Precious,” which won the Good Design Award for FY2017 and has enjoyed steadily rising sales
and market share since then. In baby strollers as well, a key category for Pigeon, the Group’s
market share continued to grow briskly.
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 32 times. A total of approximately 3,000 people have participated. On "Pigeon Info," awebsite that supports women during pregnancy, in childbirth, and in raising children, we arecontinuing to improve the in content so that users can use the site in a more convenient manner.
Child Care Service BusinessNet sales of the segment amounted to ¥7,541 million (up 2.0% YOY). Segment profit increased to¥218 million (up 3.6% YOY). During the consolidated fiscal year under review, we have launchedfour in-company child-care facilities, which we are currently operating while striving to improve
the service quality.
Health & Elder Care BusinessNet sales of the segment amounted to ¥7,058 million (up 2.3% YOY). Segment profit increased to¥468 million (up 5.0% YOY). We will continue to focus on further strengthening our sales
activities toward retail stores and nursing care facilities, and will ensure that the quality of ournursing care services is improved.
Overseas BusinessNet sales of the segment amounted to ¥25,427 million (up 10.3% YOY). Segment profit also
increased to ¥5,841 million (up 20.1% YOY), thanks to the improvement of gross profit margin, as
well as effective use of selling, general and administrative expenses. In North America and Europe,
where we operate mainly through Lansinoh Laboratories, Inc., a consolidated subsidiary, sales ofbreastfeeding-related products grew at a spritely pace. These products include flagship products
such as nipple care cream, breast pumps and milk bags. Sales in North America expanded through a
new sales route, DME Channel, while sales in China continued their trend of solid growth throughLansinoh Laboratories Shanghai, an initiative of the previous year. In India, a key market for theGroup, Pigeon enjoyed growth in both sales and earnings, thanks to hard work on initiatives toexpand distribution outlets. The Group will continue to make efforts to develop operations throughactivities on a wide range of fronts.
China BusinessNet sales in this segment increased to ¥34,494 million (up 13.0% YOY), because sales of coreproducts such as nursing bottles and nipples and skincare products remained strong. Segment profit
increased to ¥9,716 million (up 16.3% YOY).
In May we launched a line of nursing bottles, cups, pacifiers and other baby products decorated
3

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018with Disney characters, which enjoyed robust growth. In addition, we will continue to strengthen
our activities in the E-commerce market and sales focused on its flagship store, both of which are
expected to grow further in the future; we will utilize social networking services further for theinvigoration 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, inorder to increase contact points with customers and expand our operations.
Other Businesses
Net sales of the segment amounted to ¥1,289 million (up 1.3% YOY), while the segment profit
decreased to ¥126 million (down 22.2% YOY).
(2) Overview of Financial Position for the Term Under Review
1) Assets
As of January 31, 2018, total assets amounted to ¥84,467 million, up ¥5,578 million from theprevious consolidated fiscal year ended January 31, 2017.
Current assets had an increase of ¥2,933 million, and fixed assets had an increase of ¥2,644 million.
Current assets increased mainly due to increases in cash and deposits of ¥1,294 million and inmerchandise and finished goods of ¥731 million.
Fixed assets increased mainly due to increases in goodwill of ¥1,219 million and in software in
progress of ¥1,001 million.
2) Liabilities
As of January 31, 2018, total liabilities amounted to ¥21,655 million, down ¥3,497 million from theprevious consolidated fiscal year ended January 31, 2017. Current liabilities had a decrease of¥3,708 million, while fixed liabilities had an increase of ¥211 million.
Current liabilities decreased mainly due to a decrease in current portion of long-term loans payableof ¥5,000 million, despite an increase in accounts payable of ¥664 million.
Fixed liabilities increased mainly due to increases in deferred tax liabilities of ¥249 million and in
net defined benefit liability of ¥159 million, despite a decrease in provision for special extra
retirement payments of ¥208 million.
3) Net Assets
As of January 31, 2018, total net assets amounted to ¥62,812 million, up ¥9,075 million from theprevious consolidated fiscal year ended January 31, 2017.
This increase resulted mainly from increases in retained earnings of ¥7,449 million and in foreign
currency translation adjustment of ¥861 million.
4) Cash Flows
As of January 31, 2018, cash and cash equivalents (hereinafter referred to as “net cash”) amounted
to ¥31,346 million, up ¥1,294 million from a year earlier.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥17,094 million, up from ¥14,810 million of
the previous year. This increase is mainly due to ¥20,916 million in income before income taxes
and ¥2,444 million in depreciation. Contrasting factors included a ¥761 million increase ininventories and ¥5,868 million in income taxes paid.
Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥3,586 million, up from ¥1,854 million of the previous
year. This is mainly due to ¥2,199 million in purchases of tangible fixed assets and ¥1,055 million
in purchase of intangible assets.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥12,812 million, up from ¥6,223 million of the previous
4Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

year. This decrease is mainly due to ¥5,000 million in repayments of long-term loans payable and¥7,066 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.
FY2016FY2017FY2018Equity Ratio (%)

67.0

66.4

71.9

Equity Ratio based on Market Price (%)

411.7

464.5

604.0

Debt Repayment Term (years)

0.5

0.4

0.0

Interest Coverage Ratio (times)

108.7

335.2

1,523.8- Equity ratio: Total shareholders’ equity ÷ Total assets- Equity ratio based on market price: Market value of total stock ÷ Total assets- Debt repayment term: Interest-bearing debt ÷ Operating cash flows- Interest coverage ratio: Operating cash flows ÷ Interest paid
Notes:
1. Each index is calculated based on consolidated financial figures.
2. Market value of total stock is calculated by multiplying the stock price (closing price at the end of the term) by the number of shares
outstanding at the end of the term (after deduction of treasury stock).
3. Operating cash flow figures are taken from the Cash Flows from Operating Activities section of the Consolidated Statements of Cash Flows.
4. Interest-bearing debt refers to all debt that incurs interest (listed in Consolidated Balance Sheets).
5. For interest paid, interest expenses (listed in Consolidated Statements of Cash Flows) are used.

(4) Future Directions
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.”For the Sixth Medium-Term Business Plan (for the period between the fiscal year ending 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 –.” This medium-term business plan incorporates three basic strategies as follow, to guidethe Group's efforts to expand its 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.
(5) Income Appropriation Policy and Dividends for the Term Under Review and Next Term
The Pigeon Group regards the return of income to shareholders as an important management
priority. Our policy is to actively return income to shareholders through appropriation of retained
earnings and other means, while reinforcing our financial position based on considerations of
medium-term changes in business conditions and the Group’s business strategies. In addition tostrengthening our financial position, we effectively use retained earnings in a number of ways tofortify our operational base and improve future Group earnings. These include investing in new
businesses for further growth and research and development, as well as investing in production
5Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

facilities to raise production capacity, reduce costs, and enhance product quality.
With respect to targets of shareholder return, under the Sixth Medium-Term Business Planannounced 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 ¥31 per share (ordinary dividend of ¥31). For the year-end
dividend, the Group forecasts a dividend of ¥35 per share (ordinary dividend of ¥35). This amountis ¥4 higher than the dividend forecast of ¥31 announced on September 4, 2017, due tobetter-than-expected operating results. As a result, the annual dividend for the term under review
will total ¥66 per share (ordinary dividend of ¥66), a per share increase by ¥13 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 ending 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 ofbaby 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 ¥13,800 million. Moreover, in order toensure 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 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 ending January
2018 and fiscal year ending January 2020)," we have set the following three basic strategies thatshall 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.

6

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018(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 ending 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 2018

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
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, 2017

At January 31, 2018

30,052
16,103
5,328
261
2,013
665
253
592
(26)
55,244

31,346
16,440
6,059
293
2,359
739
278
880
(221)
58,17815,363(8,373)
6,989
15,231(9,505)
5,726
6,250

16,010(8,904)
7,105
17,087(11,184)
5,902
6,517

(4,613)(4,984)

1,637
5,683
226
20,263

1,533
5,878
695
21,116

51
502
－
552
1,106

1,271
456
1,001
578
3,307

1,481
18
262
176
354
(19)
2,273
23,64478,889

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

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

(Millions of yen)

LIABILITIES
I. Current Liabilities:
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of long-term loans payable
Accounts payable
Income taxes payable
Accrued bonuses to employees
Reversal of reserve for returned products
Provision for loss on litigation
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
Provision for special extra retirement payments
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, 2017

At January 31, 2018

4,857
1,693
699
5,000
2,477
2,324
929
73
37
－
3,289
21,381

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

2,675
131

2,924
290

445

516

208
310
3,770
25,152－250
3,982
21,6555,199
5,179
42,280(948)
51,711

5,199
5,179
49,729(949)
59,158

47
628
676
1,349
53,73678,889

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

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

(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 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
Dividend income
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
Recall-related loss
Loss on liquidation of subsidiaries and associates
Loss on liquidation of businessSpecial extra retirement payments
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, 2017
94,64049,941
44,69845
55
44,68828,67316,015(Millions of yen)
Year Ended
January 31, 2017
102,563
52,01050,55270
50
50,572
31,15919,412

133
18

187
19

25

54

556
212
945

812
188
1,263

42
366
47
41
498
16,462

11
418
75
42
547
20,129

122
－
－
122

115
95
848
1,058

3
25
－
46
35
239
350
16,234
5,165
(273)
4,891
11,342
224
11,118

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

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

(Consolidated Statement of Comprehensive Income)Net Income
Other Comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total Other Comprehensive Incomes
Comprehensive Income(Breakdown)Comprehensive income on parent company
Comprehensive income on non-controlling interests

11

Year Ended
January 31, 2017
11,342(Millions of yen)
Year Ended
January 31, 2018
14,75914(2,709)(2,694)
8,647

(3)
953
950
15,7108,450
197

15,373336

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018(3) Statement of Changes in Consolidated Shareholders’ Equity
Fiscal Year Ended January 31, 2017
(Millions of yen)
Shareholders’ equity
Commonstock
Balance at the beginning of
the period
Changes during the period
Dividends from surplus
Change in treasury sharesof parent arising fromtransactions with
non-controllingshareholders
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
periodCapitalsurplus5,199

Retainedearnings

5,180

36,790Treasury
stock

Total
shareholders’equity(947)

46,223(5,628)(5,628)(1)(1)

11,118

11,118
(1)

(1)

－

(1)

5,489

(1)

5,487

5,199

5,179

42,280(948)

51,711

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
Change in treasury sharesof parent arising fromtransactions with
non-controllingshareholders
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

32

3,311

3,344

1,225

Total net
assets

50,792(5,628)(5)(6)

11,118(1)
14(2,682)(2,668)129(2,538)14(2,682)(2,668)

124

2,944

47

628

676

1,349

53,736

12

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

Fiscal Year Ended January 31, 2018
(Millions of yen)
Shareholders’ equity
Commonstock
Balance at the beginning of
the period
Changes during the period
Dividends from surplus
Change in treasury sharesof parent arising fromtransactions with
non-controllingshareholders
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
periodCapitalsurplus5,199

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
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
Change in treasury sharesof parent arising fromtransactions with
non-controllingshareholders
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

62,81213

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

(4) Consolidated Statements of Cash Flows(Millions of yen)
Year Ended
January 31, 2018Year Ended
January 31, 2017
I. Cash Flows from Operating Activities:
Income before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in accrued bonuses to employees
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors and corporate
auditors’ retirement benefits
Increase (decrease) in provision for special extra retirement
payments
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 property
Loss on disposal of property
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 assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Payments of loans receivableCollection of loan receivable
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payment for lease deposits
Collection of lease deposits
Other
Net Cash Provided by (Used in) Investing Activities

14

16,234
2,259
97
(14)
46
(302)

20,916
2,444
6
186
110
68

35

70

208

－

(151)

(207)

(25)

(54)

42
77
(118)
25
－

11
187
(54)
22
(848)

(2,927)

376

835
1,482
－
538
811

(761)
115
(95)
345
34

8

8

(209)
18,954194(44)(4,295)
14,810(124)
22,760213(11)(5,868)17,094(2,424)
769
(210)
(1)
－
(165)
165
(13)
9

(2,199)162(1,055)
(1)
198
(0)
－
(1)
8

－

(587)

(20)
10
29
(1,854)

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

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018Year Ended
January 31, 2017
III. Cash Flows from Financing Activities:
Increase in short-term loans payable
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
Other
Net Cash Provided by (Used in) Financing Activities
IV. Effect of Exchange Rate Changes on Cash and Cash
Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents
VI. Cash and Cash Equivalents at Beginning of Period
VII. Increase (Decrease) in Cash and Cash Equivalents
Resulting from Change of Scope of Consolidation
VIII. Cash and Cash Equivalents at End of Period

15(Millions of yen)
Year Ended
January 31, 2018

485
(179)
(837)
(5,622)
(67)
(1)
(0)
(6,223)－(673)(5,000)(7,066)(70)(1)－(12,812)

(891)

599

5,840
24,297

1,294
30,052(86)－

30,052

31,346

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018(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.
For this purpose, the Company is configured by segments by products and services and by regions.
Our Group has 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.”
The Company’s reporting segment types are as follows.
(i) Domestic Baby & Mother Care Business
It 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 Business
It 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 Business
It is engaged in the manufacture and sales of health care products and nursing care products as wellas 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) Overseas Business
It is engaged in the manufacture and sales of child care products and feminine products for all
countries in the world except China, South Korea, Hong Kong, Taiwan, Russia, and some othercountries.
(v) China Business
It is engaged in the manufacture and sales of child care products and feminine products in China,
South Korea, Hong Kong, Taiwan, Russia, and some 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”.
In order to understand our profit status of each segment in a more detailed manner, we decided toreport expenses in non-allocable operating expenses associated with the Research and Development
16

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

Department, which had been included in the Adjustment section so far, in the segment profit ofeach reporting segment starting from the consolidated fiscal year under review.
The segment information for the previous consolidated fiscal year is adjusted in accordance with
the new segment profit calculation method after the above revision.

17

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

3. Information Regarding Net Sales, Profit (Loss), Assets and Other Items in Each Reporting Segment
Fiscal Year Ended January 31, 2017
(Millions of yen)
Reporting Segment
Other
Businesses(Note) 1

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

Domestic
Baby &
Mother Care
Business

Child Care
ServiceBusiness

Health &Elder Care
Business

31,823

7,393

6,901

16,93230,31593,366

1,273

94,640－94,640

－

－

－

6,119

217

6,337

－

6,337

(6,337)－

Total

31,823

7,393

6,901

23,051

30,53399,704

1,273

100,977(6,337)

94,640

Segment Profit

4,818

211

445

4,861

8,355

18,692

162

18,855(2,840)16,015

Segment Assets

12,285

1,318

3,243

19,50725,146

61,501

1,158

62,65916,22978,889Net Sales
Net sales toexternalcustomers
Internal saleor exchange
betweensegments

Overseas
Business

China
Business

Subtotal

Total

Other Items
Depreciation
525
23
86
712
688
2,036
41
2,078
181
(Note) 7
Amortization of
97
97
97
－
－
－
－
－
－
Goodwill
Increase in
Tangible Fixed
Assets and
471
12
62
1,541
234
2,321
20
2,341
157
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 ¥2,840 million from adjustments in segment profit includes ¥101 million in elimination of intersegment transactions,and negative ¥2,941 million in non-allocable operating expenses. Non-allocable operating expenses are mainly administrative costs of ourGroup.
3. The amount of ¥16,229 million in adjustments in segment assets includes negative ¥2,709 million in eliminations of inter-segment
transactions, and ¥18,939 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 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

2,259
97

2,498

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

Fiscal Year Ended January 31, 2018
(Millions of yen)
Reporting Segment

Net Sales
Net sales toexternalcustomers
Internal saleor exchange
betweensegments
Total

Other
Businesses(Note) 1

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

Domestic
Baby &
Mother Care
Business

Child Care
ServiceBusiness

Health &Elder Care
Business

33,841

7,541

7,058

18,65934,171

101,273

1,289

102,563－

102,563

－

－

－

6,768

322

7,090

－

7,090

(7,090)－33,841

7,541

7,058

25,42734,494

108,363

1,289

109,653(7,090)102,563

Overseas
Business

China
Business

Subtotal

Total

Segment Profit

5,928

218

468

5,841

9,716

22,173

126

22,299(2,887)

19,412

Segment Assets

13,113

1,410

3,248

24,01027,56569,348

1,197

70,545

13,922

84,467

Other Items
Depreciation
558
25
92
817
708
2,202
44
2,246
198
(Note) 7
Amortization of
6
6
6
－
－
－
－
－
－
Goodwill
Increase in
Tangible Fixed
Assets and
933
80
94
833
443
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 ¥2,887 million from adjustments in segment profit includes ¥4 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 ¥13,922 million in adjustments in segment assets includes negative ¥2,849 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 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

2,444
6

3,546

Pigeon Corporation (7956) Summary of Financial Results for the Fiscal Year Ended January 2018

(Per Share Information)
Previous fiscal year

Current fiscal year

(February 1, 2016 to January 31, 2017)(February 1, 2017 to January 31, 2018)¥437.43¥92.84¥506.79¥121.20

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, 2016 to January 31, 2017)(February 1, 2017 to January 31, 2018)

11,11814,515－－

11,11814,515

119,761,718

119,761,277

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