LION Integrated Report2021Corporate Message

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Lion Integrated Report 2021

CONTENTS * Click on the section titles below to jump to the relevant page.
03 Editorial Policy and Lion’s Disclosure
Our Path & DNA

04 Corporate Motto and Management Philosophy/Purpose
05 Message from the Chairman

Our Path & DNA

07 The Lion Group’s History of Addressing Living and Social Issues
09 The Lion Group’s Initiatives to Redesign Habits

11 Message from the President
Vision & Future

19 Value Creation Model

Vision & Future45	
Human Resource

Strategic Framework

Development

23	Growth Strategies

49	
Research and Development27	
Sustainability

51	Special Feature:
Initiatives to Accelerate
Innovation

35	
Consumer Products Business39	Overseas Business43	Industrial Products Business53	Supply Chain

Strategy & Business

Strategy & Business21	
Vision2030 Long-Term

57	
Financial Strategy

59	Corporate Governance System
62	Messages from the Newly Appointed External Director and

Governance63	
Directors, Audit & Supervisory Board Members and Executive Officers
65	
Corporate Officer Compensation
67	Internal Control Systems/Spreading and Strengthening

Governance

Audit & Supervisory Board Member

Compliance Awareness69	
Risk Management

71	
Financial and Non-Financial Highlights
73	Management’s Discussion and Analysis of Fiscal 2020 Results

Performance

Performance77	Ten-Year Financial Summary
79	
Major Non-Financial Data
81	
Corporate Overview
82	External Evaluations and Participation in External Groups

Lion Integrated Report 2021

2

Editorial Policy and Lion’s Disclosure
Editorial Policy
The Lion Integrated Report 2021 is intended to provide Lion’s shareholders, investors and other stakeholders with key
information about the Company’s initiatives to increase its corporate value over the medium to long term through theimplementation of its purpose, “Make a difference in everyday lives by redesigning habits: ReDesign,” and facilitate deeper
understanding of the Lion Group.
Period Covered: From January 1, 2020 to December 31, 2020 (Some parts also include information about 2021)
Scope of Coverage: Lion Corporation and all of its consolidated subsidiaries are covered, in principle.
* Where the scope of coverage of reported activities or data differs from the above, a description is provided.

Accounting Standards Applied: International Financial Reporting Standards (IFRS)
Referenced Guidelines:• International Integrated Reporting Framework issued by the International Integrated Reporting Council (IIRC)• Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation issued by
the Ministry of Economy, Trade and Industry• GRI Sustainability Reporting Standards issued by the Global Reporting Initiative• ISO 26000: 2010 Guidance on social responsibility issued by the Japanese Standards Association
Regarding Forward-Looking Statements
This integrated report contains forward-looking statements on subjects that include matters related to future business plans, corporate strategies and forecasts of performance.
Such statements were formulated based on information that was available at the time of the preparation of this integrated report and contain uncertainties regarding such factors as
economic conditions, market trends and foreign currency risks. Please understand that actual results may differ from the information presented in these forward-looking statements.

Lion’s Disclosure
Investor Relations

Sustainability

IR news, quarterly financial statements,
shareholders meetings, securities
reports, etc.

ESG information and activity data, SDGrelated initiatives, etc.

Information not included in the integrated
report is ­available on Lion’s website.

https://www.lion.co.jp/en/ir/

https://www.lion.co.jp/en/csr/

About Us

Products

Company overview, message frommanagement, corporate governance,
corporate compliance, etc.

Products offered by Lion, presented
by category

LionIntegrated Report 2021

https://www.lion.co.jp/en/company/
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Lion Integrated Report 2021

https://www.lion.co.jp/en/products/

Corporate Motto and Management Philosophy

Our Path & DNA

Corporate Motto

Lion Corporation positions “Fulfilling a Spirit of Love”
as fundamental to its management, and thus contributes tothe enrichment of the happiness and lives of people.

Vision & FutureManagement Philosophy
We bring together the power of our personnel, the power of our technology
and the power of our marketing, as we provide superior products that are
helpful in the daily lives of people.

2
3

We respect the “Spirit of Tenacity and Creativity” that we have maintainedsince our founding, as we continue developing our business.

Strategy & Business1

We deeply appreciate all those who extend their valuable support to us, as
we prosper together through sincerity and mutual trust.

GovernancePurpose

Performance

Lion Integrated Report 2021

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Message from the Chairman

Itsuo Hama
Representative Director,
Chairman of the Board of Directors,
Chief Executive Officer

Make a difference in­everyday lives byredesigning habits
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Lion Integrated Report 2021

Our Path & DNA

This year marks the 130th anniversary of Lion’s founding. That we have come so far isthanks to the patronage and support of our customers and other stakeholders, forwhich we are deeply grateful.
Since our founding in 1891, we have sought to contribute to health, comfort andcleanliness in everyday living through our business activities in line with our mission of“benefitting society through business activities.” Now, as lifestyles and society have been

Vision & Futureforced to change since the start of the COVID-19 pandemic, Lion’s social mission as acorporate group closely involved in everyday living has taken on even greater importance.
Lion has designated “Make a difference in everyday lives by redesigning habits:
ReDesign” as its purpose. Working from this starting point, we will seek to advance
management with a stronger emphasis on making everyday habits more natural, easy
and enjoyable through consumer-centered business activities.

Strategy & BusinessIn addition, given that the environment surrounding Lion is undergoing major changes,
such as those caused by the pandemic and global environmental problems, it is more
important than ever to implement initiatives and evolve our business activities from along-term perspective that incorporates environment, social and governance (ESG)
issues and the achievement of the Sustainable Development Goals (SDGs).
With this in mind, we established the Vision2030 long-term strategic framework to

Governanceensure that we can continue to consistently meet the needs of society and ourcustomers by implementing corporate activities based on our purpose. As we work toachieve our management vision for 2030, “Becoming an advanced daily healthcarecompany,” we will further strengthen initiatives related to our Sustainability MaterialIssues and accelerate the creation of new customer value through R&D and marketingfrom the consumer perspective. By doing so, we aim to contribute to the realization of asustainable society and achieve even greater business growth.

Performance

Lion Integrated Report 2021

6

The Lion Group’s History of Addressing
Living and Social Issues

Oral Care
From 1896

From 1913

Cavity prevalence amongchildren at 96%/
Promoting oral care

Started educational activities tofoster healthy tooth brushing habits

From the 1960s
Expanding the market anddeveloping world-class products

Addressing diverse
oral health issues

White Lion

Established the Lion Foundation for
Dental Health (LDH)

Front
Held the first Lion oral hygiene lecture
Lion Toothpowder(The start of promotional and educational activities)(Japan’s first toothpaste with calcium phosphate,
which is highly effective for whitening teeth)(Promoting oral healthcare through LDH)

Back

Lion Toothpowder packets
printed with charity coupons(The starting point of Lion’s social contribution activities)

Held the first Oral Health Event ofTooth Brushing for Children

Dentor Lion toothpaste

CLINICA Lion cavity prevention toothpaste(The first in Japan formulated to prevent pyorrhea)(The world’s first toothpaste formulated withenzymes that break down dental plaque)

Teaching correct tooth brushing methods to children

Cleanliness and Hygiene
From 1891

From the 1950s

From the 1960s

Start of soap manufacturing andpromotion of correct laundry methods

Addressing healthproblems caused byparasites on vegetables

Addressing diverse lifestyle needs

Kohyo Soap
(Beauty soap produced in Lion’s early days)

Lipon F
Laundry lecture held by Lion Laundry
Science Laboratories(Japan’s first kitchen detergent
for washing fruits,
vegetables and tableware)

Mama Lemon

CHARMY Green(Dish and vegetable detergent thatis gentle on the hands)(Kitchen detergent that is gentle on the hands
and strong against grease)

Environmental Conservation
From the 1920s

From the 1960s

Use of plant-derived ingredients

Addressing foaming in rivers, eutrophication in lakes and marshes andother water environment issues with advanced technology

Plant-derived Lion Laundry Soap
(Japan’s first plant-derived household laundry soap)

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Lion Integrated Report 2021

Dash

Murin TOP

(Laundry detergent formulated with thehighly biodegradable surfactant AOS)

(A phosphate-free laundry detergent formulatedwith enzymes to be environmentally friendly
while maintaining high detergency)

From the 1990s

From the 2000s

Addressing gum disease throughthe systematic combination of
products with clear functions

From oral care to whole-body health
Promoting oral health care

CLINICA Advantage Series(Gum disease prevention)(Preventive dentistry promotion)

Vision & Future

Dentor Systema Lion Series

Activities to promote good oral care habitsin Asia

From the 2000s
Contributing to clean and hygienic living in Asia

Strategy & Business

From the 1990s
Promoting good hand washing habits
and related products, helping raise cleanlinessand hygiene awareness

Our Path & DNA

Lion’s founder
Tomijiro Kobayashi

Lion’s origins lie in soap and toothpaste. Since our founding in 1891, we have strived to adhere to
our founding spirit of “benefitting society though business activities,” seeking to help consumers
enjoy healthy living through the provision of products while engaging in communication andeducational activities aimed at promoting better living habits. We recognized long ago that global
environmental protection is an issue that the whole world shares and have taken environmental
measures accordingly, such as developing environmentally friendly products. By addressing issues
in daily living and society, we aim to redesign habits and make a difference in everyday lives.

KireiKirei Medicated Hand Soaps(With antibacterial agents)

KireiKirei overseas

From the 1990s

From the 2000s

Reducing CO2 emissions by using primarily plant-based
washing ingredients

Creating environmentally friendly habits through products
and communication

Governance

Activities to promote good hand washing habitsin Asia

Performance

Emeron Shokubutsu-Monogatari(Plant Story) beauty soap
(Beauty soap made with 100%plant ingredients)

Natera(Dish and vegetable detergent madeprimarily from natural coconut)

TOP SUPER NANOX
Spark

Refill packs(Highly concentrated liquid laundry detergent)(Laundry detergent made from palm oil)Lion Integrated Report 2021

8

The Lion Group’s Initiatives to Redesign Habits
Throughout its long history, the Lion Group has worked to redesign habits. We carry out such initiatives not
only in Japan, but across Asia.

Action 1

Establishing Tooth Brushing Habits

Lion has a long history of implementing oral care education
activities. When Lion was founded in the late 1800s, toothbrushing was not yet widely practiced in Japan, and 96%
of children had dental cavities. Based on Lion’s founder
Tomijiro Kobayashi’s feeling that the situation presented areal crisis with regard to the nation’s future, Lion began
developing and marketing oral care products and carryingout educational activities.
Over the decades, Lion has implemented a wide range ofactivities aimed at firmly establishing oral care habits insociety, from the Oral Health Event of Tooth Brushing forChildren, which boasts a history of more than 80 years, tothe establishment of the Lion Foundation For Dental Health,which promotes oral health promotional and educational
activities, and awareness raising about tooth brushing atnight via sponsored television programs. As a result, today,
approximately 80% of people in Japan brush their teeth
twice a day or more, four times the level 50 years ago.
Over the same 50-year period, the rate of cavities among
elementary school-aged children, previously a major issue,
has fallen to a quarter its previous level. The establishmentof proper tooth brushing habits has contributed greatly tothe public’s oral health.
Over the same 50-year period, the size of the toothpaste
market has quadrupled. Thus, helping form habits that are
beneficial to consumer health while also stimulating
markets leads to the growth of Lion’s businesses.

An early Oral Health Event of Tooth Brushing for Children

The Oral Health Event of Tooth Brushing for Children today

Educational activities in Asia

Toothpaste Market Size, Percentage of Consumers Who Brush at Least Twice a Day and Rate of Cavities (Japan)
Rate of cavities among elementary
school-aged children(Billions of yen)
100

50

Percentage of consumers who
brush at least twice a day(%)
80

Toothpaste market size

40

0

0

1969
* Lion survey

9

Lion Integrated Report 2021

1981

2011

2018

(Year)

Action 2

Promoting Hand Washing Habits
Our Path & DNA

Educational activities in Japan
Vision & Future

Following a series of large-scale outbreaks of E. coli in
1996, group infections through food poisoning came to be
seen as a social problem in Japan. Fostering good handwashing habits to protect children from viruses andbacterial thus took on new urgency, and Lion responded
the following year by launching KireiKirei. Based on a newconcept that washing and disinfecting one’s hands can be
fun, KireiKirei changed hand washing from something thatchildren have to be forced to do as a matter of discipline
into a new, enjoyable habit, helping to spread cleanlinessand hygiene habits. This approach has been well received,
and today KireiKirei has been the leading hand soap brandin Japan for 19 consecutive years, since 2002.* In addition
to developing products to meet evolving needs, bypromoting the spread of good hand washing habits inschools and homes, we have increased hand soap usage
and contributed to the growth of the hand soap market.
*2
 002–2020 cumulative sales, INTAGE SRI hand soap market (excludes body soaps)

Promoting Environmentally Friendly Habits

Lion has long used cutting-edge technology to addressenvironmental problems, offering such pioneering products
as Japan’s first plant-derived household laundry soap,
foam-suppressing laundry detergent and phosphate-freelaundry detergent formulated with enzymes to beenvironmentally friendly while maintaining high detergency.

By expanding our lineup of products that help realize health,comfort and cleanliness in everyday living while also
reducing environmental burden, including CO2 emissions,plastic use and water use, we seek to make everyday
consumer habits more environmentally friendly. In this way,
we will simultaneously contribute to the realization ofsustainability for the planet and achieve business growth.

High detergency, plant-based raw materials• High detergency with less detergent• Plant-based raw materials arecarbon-neutral*1

Super-concentrated detergent andcompact packaging

Water-, energy- and time-saving
Quick-rinsing properties enable one-rinse washing
Saves enough water to fill 46 500-ml beverage bottles

Reduced petroleum-derived plastic use• Product bottle made with 100% recycled PET*3• Refill packs reduce plastic use (approx. 19% ofthat used in bottles)• Refill packs made with biomass plastic*4*1. Carbon neutral: In which the CO2 emission and absorption over the product life cycle cancel each other out.
*2. Calculated based on a comparison of liquid laundry detergent TOP Clear Liquid (bottle) with highly concentrated liquid laundry detergent TOP SUPER NANOX (bottle).
*3. Bottle only; excludes nozzle, cap, etc.
*4. Biomass plastics are polymer materials that are produced by synthesizing, either chemically or biologically, materials that contain renewable organic materials.
(Source: Website of the Japan BioPlastics Association).

Lion Integrated Report 2021 10

Performance• Product weight:
Approx. 45%*2• Logistics efficiency: Approx. 3.3 times*2that of conventional detergents

Highly concentrated
liquid laundry
detergent

Governance

Making Daily Living Environmentally Friendly

Strategy & Business

Action 3

Educational activities in Asia

Message from the President

11 Lion Integrated Report 2021

Our Path & DNA

Lion’s Mission and Rolechanges in the business environment. It was a turbulent year in which

Vision & Future

In 2020, the novel coronavirus (COVID-19) pandemic triggered major

we had to constantly scramble to respond to changes, but it made us
even more aware of our social mission of supplying our customers withthe products they need for daily living. Each and every employee of the

The experience of 2020 brought us a heightened awareness of our rolein society and the significance of that role. Hand washing habits, anarea we are involved in through hand soap, made a significant

Strategy & Business

Lion Group worked together, giving our utmost to carry out this mission.

difference in preventing the spread of disease. Similarly, other living
habits, like tooth brushing, doing laundry and washing dishes, also
play important roles in realizing healthy minds and bodies. Looking

its role of making a difference in everyday lives by redesigning habits.

Governancetoward 2030, Lion will seek to reach even more consumers as it fulfills

Masazumi Kikukawa
Representative Director,
President and Executive Officer
Chief Operating Officer
Performance

Lion Integrated Report 2021 12

Message from the President
Having Improved Profitability, We Must Now Accelerate GrowthLion formulated the Vision2020 management vision in 2011,

profitable company. Working to bolster profitability, we

under which it implemented three medium-term

shifted toward higher-added-value products, reinforced the

management plans: The V-1 Plan, the V-2 Plan and therevenue base and implemented structural reforms, such as

LIVE Plan. In 2011, our operating profit ratio was aroundstreamlining our roster of affiliates. As a result, net sales and

3%, a level insufficient to allow for adequate investment in

profitability both rose significantly, productivity and efficiency

growth. To address this issue, we began by implementing

increased, and the management base steadily grewbusiness reforms aimed at growing into a lean, highly

stronger. We also invested in future growth, including
advertising, R&D and capital expenditure.
However, net sales have grown only slightly over the past
several years. Under the LIVE Plan, the oral care businessand business in China grew, but we fell short of our overalltargets for organic growth in existing businesses and new
growth front creation. We see sales volume expansion as anecessary condition for ongoing business development
and, accordingly, have renewed our focus on reinforcing
sales growth going forward.

Financial Results(Billions of yen)
400

8.4

350
300

3.4

250

3.1

2.2

3.4

(%)
12

IFRS

Japanese GAAP

8.6

10.1

9

6.6

6.2

4.3

8.1

6
3
0

200

2011

2012

2013

2014

2015

2016

V-1 Plan
Net Sales (left scale)

Efficiency
Productivity

Investment

2017

V-2 Plan

Ratio of Core Operating Income to Net Sales* (right scale)

Key Indicators

Profitability

2017

2018

2019

2020

(Year)LIVE Plan* Operating income to net sales under Japanese GAAP.

V-1 Plan

V-2 PlanLIVE Plan

2011

2014

2017

2020*1

Core operating income*2¥11.1 B

¥12.4 B

¥27.2 B

¥35.9 B

EBITDA*¥23.1 B

¥22.7 B

¥36.5 B

¥47.6 B

4.0%

6.2%

12.2%

13.6%

4.7%

4.8%

11.1%

10.7%

Core operating income per person*¥1.8 M¥1.9 M¥3.8 M¥4.8 M

Advertising¥22.1 B

¥24.5 B

¥29.9 B

¥24.9 B

R&D

¥8.9 B¥9.4 B¥10.4 B

¥10.9 B

Capital expenditures¥8.3 B¥13.5 B

¥14.8 B

¥47.5 B

3

ROE
ROIC
2

*1 Figures for 2020 are on an IFRS basis.   *2 2011-2017: Operating income under J GAAP.   *3 2011-2017: Operating income + depreciation and amortization
2020: Core operating income + depreciation and amortization

13 Lion Integrated Report 2021

Over the 130 years since its founding, Lion has, time andBeing a Japanese manufacturer is our identity. The sincerity

again, solved problems in daily living and society to propose

we bring to manufacturing and the customer trust we havebetter habits. In this process of working to make each day

earned over the past 130 years are our strengths. Lion has

the first step toward a brighter future, we have developed aa long history of business in Thailand and other areas inparticular approach to looking for ways to improve ourAsia, the main focus of the Overseas Business’s existing

businesses and make a difference. This approach leads us tooperations and efforts to further expand going forward. We

ask, is it enough to provide products so that the consumers

have earned the trust of consumers in these areas.

we currently serve can maintain their current living habits? Or,

However, we do not yet have the expertise we will need to

do we need to expand our contribution to the formation ofbuild new business models, and acquiring it is a major task

better living habits to more consumers across more aspects

we face going forward.

of daily living? This constantly questioning mindset is what
underlies the formulation of the Vision2030 long-term
strategic framework and allowed us to determine that we

Vision2030 Long-Term Strategic Framework

Vision & Future

Lion’s Strengths and the Challenges Ahead
Our Path & DNA

Working to Make a Difference in More
Consumers’ Lives by Redesigning Habits

must increase the number of consumers we serve and by
doing so achieve sales growth. Finding ways of doing thiswas the spark for the formulation of Vision2030.
Strategy & Business

Lion has designated “Make a difference in everyday lives byredesigning habits: ReDesign” as its purpose. Based on thispurpose, our management vision is “Becoming an
advanced daily healthcare company.” We aim to realize
healthy minds and bodies for all by creating new customer
experiences to make everyday habits more natural, easy
and enjoyable. To this end, we will build a broad businessportfolio that encompasses numerous daily points ofcontact with consumers and bring Lion Group products and

Our Three Growth Strategies

services to more consumers in Asia, our main target market
Governancegoing forward. In this way, we will ambitiously work toward
scale expansion, aiming to enter the ranks of the top ten
companies in terms of sales within the markets where we
do business in Asia by 2030.
Vision2030 comprises three main growth strategies. The
first is to realize business innovation that goes beyond ourconventional business of producing and distributing
products (Accelerate growth in four fields of value creation).

Performance

The second is to transform our business infrastructure,including the digital transformation (DX) needed to
implement the first strategy (Transform our businessfoundations for growth). The third is to transform our people
and organizations to take on new, ambitious challenges inorder to implement the first strategy (Generate dynamism torealize innovative change).
Lion Integrated Report 2021 14

Message from the President
Accelerating Cross-Divisional Growth in Four Fields of Value Creation

Under the first growth strategy of Vision2030, “Accelerate

and family, but across society, and thereby helping maintaingrowth in four fields of value creation,” we will strategicallyboth physical and mental health.

advance innovation in four fields of value creation on a
Company-wide, cross-divisional basis to create new

In the third field, Smart Housework, we aim to create newconsumer value. In identifying these four fields, we asked

value by reexamining household chores, such as laundry

ourselves what fields would be important to realize health as

and cleaning, and shifting focus from the application of

we see it, and how we could expand our businesses while

individual products to the links between them. Competition

leveraging our existing strengths. Health, as we see it, isin this market is extremely fierce, so we will shift our angle ofbased on a healthy state of mind and body for thecompetition to create value that other companies cannot.

individual, but also encompasses healthy relationships withothers, such as one’s family and community.

In the last field, Well-Being, we will seek to shift away fromour conventional business model, in which our contact with

Four Fields of Value Creation

customers extends only to selling supplements and over-In the first field, Oral Health, we aim to evolve and transformthe-counter (OTC) drugs, such as antipyretic analgesics, toour offerings from mere oral care via the provision and use

treat their symptoms at a given moment. Going forward, weof products to oral healthcare that supports overall healthwill seek to help improve customers’ total health over theand quality of life (QOL) from the mouth outward. Given thelong term and thereby boost their internal well-being.

deep connection between the health of the mouth and thatof the entire body, as well as the advance of demographic

From 2021, we have set up a deliberative framework, calledgraying in Japan and many other countries, oral health is an

the Field Program, for each of these four fields to advancearea of growing importance.

initiatives that transcend the limits of our existingorganizations and divisions. The four fields of value creation

In the second field, Infection Control, refers to prevention. In

were deliberately not conceived to fit into the conventional

response to the COVID-19 pandemic, since 2020 we havedelineations defining, for example, the Consumer Products

been focusing efforts on spreading good hand washingbusiness or the Overseas Business. This was because wehabits through our hand soaps. Going forward, we will

were conscious that there is a limit to the growth achievable

provide hygiene solutions across society to contribute toby simply extending and building on existing structures andinfectious disease prevention broadly. We have an

businesses. By realizing organic coordination and synergy

important role to play in creating the conditions for effective

across the Lion Group, we will advance the creation of

infection prevention not only at the levels of the individual

structures that can formulate and implement cross-divisional
strategy, both in Japan and overseas. Furthermore, inFour Fields of Value Creation

addition to working independently, I believe that providing
value alongside other companies is a new approach that
Lion must explore going forward.

15 Lion Integrated Report 2021

Building More Robust Business Foundations

Numerous hurdles remain, but I believe our efforts in thesefor growth,” we have adopted the themes of “Digitalareas will increase the quality of the habit proposals we aretransformation (DX)” and “Reinforce business infrastructure.”

able to offer consumers.

In the area of “Digital transformation (DX)”, we are working

Under the second theme, “Reinforce business infrastructure,”

toward two targets.

we will continue growth-oriented initiatives advanced under

Our Path & DNA

Under our second strategy, “Transform our business foundations

the LIVE Plan to reinforce production and systems
infrastructure, working to build highly flexible and resilientbusiness efficiency. For example, we are further automating

supply chains. As part of such efforts, in July 2021, we will

factories so that they can be run with almost no manpower.

begin full-scale toothpaste production at the Sakaide
Factory in Kagawa Prefecture. We will also carefully monitor

The other target is to leverage digital technologies toand confirm the effects of investments in order to enhancetransform our businesses themselves. For example, by

the sophistication of Group management.

Vision & Future

One target is to utilize digital technologies to increase

analyzing our vast volume of employee dental and healthcheckup data, we are gaining new insights into theconnections between oral care habits and oral conditions.
Using AI to analyze such data, we hope to be able to identify
Strategy & Businessand alert individuals with hidden risk factors early, so thatthey can take up preventive habits. In areas like this, we must
make greater use of the potential of digital technologies. By
expanding our data platform, we can further enhance theprecision of our prognostics and the efficacy of the habits weoffer. Building platform-based businesses is therefore an area
in which we seek to push forward.
New toothpaste factory

Governance
Performance

Automated dental rinse bottle supply using robots

Lion Integrated Report 2021 16

Message from the President
Creating Organizations Where Each Individual Can Excel

Under the third strategy, “Generate dynamism to realize

Lion is proactively advancing initiatives in the areas ofinnovative change,” we are focusing efforts on “Corporate

diversity & open innovation. We hope that by interacting withbranding,” “Professional fulfillment reforms” and “Diversity &a more diverse range of people, each of our employees will

open innovation.” These may seem like three separate

gain insights into the areas they need to work on as well as

issues, but they are closely interlinked.

their own strengths, helping them to grow.

Corporate branding entails promoting recognition of and

The adoption of our side job system—in which Lion

support for business implementation based on our purpose,

employees can work side jobs at other companies andboth externally and internally.

employees of other companies can work side jobs at Lion—is a part of these efforts. In 2020, when we sought to fill

Ensuring that employees all understand that the ultimate

eight side job positions with external human resources for a

objective of their work is to implement our purpose andproject to build new business models, we received moreincreasing their sense of sharing in said purpose will lead tothan 1,600 applications. As a result of this project, ingreater professional fulfillment. Furthermore, to enhance

February 2021, we launched Gokinjo Cheftomo, a service

professional fulfilment, employees must have a clear sensethat allows users to take home dinner side dishes preparedthat they are growing into more autonomous versions ofat local restaurants. The participation of outside individuals

themselves. To this end, it is crucial to ensure thatworking side jobs at Lion was a tremendously important

employees are connected with the right inspiration andfactor in enabling us to set up this new business so quickly.

opportunities to grow by proactively interacting not onlywith others within Lion, but a wide range of people outside

Likewise, we expect that working side jobs at other

the Company.

companies will enable Lion employees to quickly obtain
experience and insight they would not have access to solely
by working at a single company.

17 Lion Integrated Report 2021

Making Habits More Environmentally Friendly

For example, in Japan, around 90% of liquid toiletry

Growth Strategies,” we have designated “Reinforce

products are available in refill pouches made of thin plastic

Initiatives to Address the Sustainability Material Issues” as afilm. In Europe and the United States, this figure is still

management strategy. In particular, we have identified

around just 10%. The establishment of habits related to“Creating Healthy Living Habits” and “Promoting

effectively using such pouches can significantly reduce

Environmental Initiatives for a Sustainable Planet” as ourplastic use. I call this “pouch culture.”

Our Path & DNA

As part of Vision2030, in addition to “Advancing Our Three

top-priority materials issues, the areas in which we must
contribute to society most.

Pouch culture is just one example of the ways that everyday

To realize sustainability for the planet, it will be crucial fornumerous such habits and spreading them across Asia, we

society to shift to more environmentally friendly habits. Suchhope to contribute to the protection of the globala shift ties directly into the implementation of our purpose;environment. Furthermore, because pouches still use plastic,

and, going forward, creating habits that support not only thewe will need to develop frameworks and technologies forphysical and mental health of individuals, but also the healthcollecting and reusing them to realize a higher level ofof the global environment, will be extremely important.

recycling. This is something that Lion cannot do alone, so

Vision & Future

habits can have a big impact over time. By creating

we will expand collaboration both within the industry andacross industries.
Strategy & Business

Lion refill pouch products
Governance

To Our Stakeholders
Reaffirming our purpose, “Make a difference in everyday

and shifts in ideas about what it is that consumers need.

lives by redesigning habits: ReDesign,” over the coming

We humbly ask for your continued guidance and support as

decade, we seek to expand our businesses to connect with

we go forward.

and serve more consumers across more aspects of daily

Masazumi Kikukawa
Representative Director,
President and Executive Officer
Chief Operating Officer

Lion Integrated Report 2021 18

Performanceliving. As we do so, we will strive to be receptive to feedbackValue Creation Model
Lion positions its purpose, “Make a difference in everyday lives by redesigning habits: ReDesign,” at the core ofmanagement. To achieve the management vision, “Becoming an advanced daily healthcare company,” we areleveraging the strength of our capital to synergistically reinforce initiatives to address the sustainability material
issues and advance growth strategies under the Vision2030 long-term strategic framework. We will accelerate

Purpose = Make a difference in everyday
Changes in society

Business Activities

Strategic Framework

Diversifying values

Becoming an advanced daily healthcare company

Demographic graying

Top priority material issues• Creating healthy living habits• Promoting environmental initiatives
for a sustainable planet

Environmental
problems

11 other material issues
p. 29Accelerate growth in four fields of value creation
Transform our business foundations for growthGenerate dynamism to realize innovative change
p. 23

Input
Infectious diseaserisk

Digital transformation

Capital supporting the strategic framework
Trust of customers and suppliers

Widely recognized brands

Stable supply chainsR&D and marketing fromconsumer perspectives

Stable financial base

Diverse human resources

Corporate governance
19 Lion Integrated Report 2021

lives by redesigning habits: Redesign
Outcome

Products andservices that help
­redesign habits

Increased corporate value

Vision & Future

OutputOur Path & DNA

growth, primarily in four fields of value creation. By providing products and services unique to Lion that help
redesign habits, we aim to generate social and economic value and invest in future growth, creating a cycle thatwill increase corporate value over the medium to long term.

Oral Health
Vision for 2030

Products and services that support overall
health from the mouth outward

Socialvalue

Health, comfort and cleanliness ineveryday living

Strategy & Business

Infection Control
Products and services that support hygiene
for a new era

Smart Housework
Products and services that create
new housework habits

Sustainable societyS cale:Well-Being

Products and services that support
individual health and happiness

Economicvalue

Capital reinvestment¥600 billion(In the top 10 in Asia) hare of net sales from theS
Overseas Business:Approx.

50%

Core operating income:¥50 billion
R OIC:
8–12%
R
 OE:
10–14%
EBITDA* margin: 10–14%
Approx.

* EBITDA: Core operating income +depreciation and amortization

Lion Integrated Report 2021 20

Performancep. 23

Net sales of approx.

GovernanceEnvisioned Financial
Performance in 2030

Vision2030 Long-Term Strategic Framework
Reflecting the growth of the role and responsibility of corporations in society, the Lion Group has formulated along-term strategic framework, Vision2030, aiming to accelerate its evolution into a company that will continue
to contribute to solving issues in daily living and society through the creation of better habits.

The Importance of Daily Living Habits
In 2020, the global spread of the novel coronavirus (COVID-19) pandemic made clearer than ever the importance of daily­living habits, such as hand washing and gargling, in maintaining mental and physical health. Furthermore, as demographic
graying advances both in and outside Japan, healthcare needs are forecast to see accelerating growth in such areas asimproving quality of life (QOL) and extending healthy life expectancy. Accordingly, the Lion Group believes that its role as afamiliar presence in people’s everyday lives will continue to grow.

Changes in values and behavior• Renewed awareness of the importance ofdaily habits• Increased hygiene needs• Increased healthcare awareness• Changes in housework patterns

Key themes for the decade ending in 2030
 reate social value and economic value through ­Cpurpose-driven management
 chieve business growth by making a difference in theAeveryday lives of even more people
 ransform into a company that constantly evolves inTresponse to changes in society

21 Lion Integrated Report 2021

Vision2030
ReDesign,” while synergistically addressing its sustainability

advanced daily healthcare company,” the Lion Group willmaterial issues and advancing growth strategies in order tofurther reinforce management driven by its purpose, “Makecontribute to the realization of a sustainable society anda difference in everyday lives by redesigning habits:

achieve business growth.

Our Path & DNA

To achieve its management vision for 2030, “Becoming an

Vision & Future
Strategy & BusinessApproach to Achieving the Management Vision
well as to serve consumers in more areas, mainly in Asia. By

difference in the daily living of a greater number of people. To

doing so, we will achieve business growth and increase ourthat end, it will be crucial to have more contact in the course

market presence in Asia.

GovernanceBy putting its purpose into action, Lion seeks to make aof daily living with more consumers across age groups as

Implement purpose-driven management and make a­difference in more people’s lives to achieve business growthMore consumers

More areas

Contacts with
consumers/day

Number of people(age groups)

Number of people(countries/areas)

Business
growthScale: Net sales of approx.

¥600 billion(In the top 10 in Asia) hare of net sales from theS
Overseas Business:

Approx.

Core operating income:

Approx.
ROIC:ROE:
EBITDA* margin:

50%¥50 billion
8–12%
10–14%
10–14%* EBITDA: Core operating income + depreciation
and amortization

Lion Integrated Report 2021 22

Performance

More contact

Envisioned Financial Performancein 2030

Growth Strategies
Our Three Growth Strategies
To realize the management vision, we are implementing three
growth strategies to shift business growth into high gear.
The first is “Accelerate growth in four fields of value
creation.” We have designated four fields in which we will
strategically advance innovation on a Company-wide,cross-divisional basis to create new consumer value as
growth drivers for the Lion Group in order to achieve themanagement vision. By evolving existing businesses andcreating new value, we will further accelerate growth inJapan and overseas.
The second is “Transform our business foundations for
growth.” We will promote business foundationtransformation that will spur growth by continuing andreinforcing strategic investment.
The third is “Generate dynamism to realize innovativechange.” We will transform to realize sustainable growththrough corporate brand reinforcement, professional ­fulfillment
reforms and the promotion of diversity and open innovation.

Our three growth strategies: Accelerate growth in four fields of value creation
We have designated four fields of value creation that will be growth drivers going forward. In these four fields, Lion
will continue to evolve and develop its efforts to redesign habits—an aspect of heath care it is uniquely positioned
to address—to reach more consumers, mainly in Asia.

23 Lion Integrated Report 2021

Our Approach to the Four Fields of Value Creation
Our Path & DNA
Vision & Future
Strategy & BusinessGovernance
Performance

Lion Integrated Report 2021 24

Growth Strategies

Specific Opportunities: Oral Health Field
Lion is the leading manufacturer of oral care products(such as toothpaste and toothbrushes) in the Japanesemarket* and will continue to create new value to drive
market growth.
Lion has long operated businesses in the oral careproducts market based on its oral care-related assets
and expertise. Areas adjacent to this market, such as

dentistry and general medical care, present tremendous
business opportunities. We will leverage our oral careassets to expand our businesses from oral care intosuch fields, providing new value in a wide range ofhealthcare-related aspects of consumer living tocontribute to the enhancement of oral health and QOL.
* Based on INTAGE SRI+ cumulative sales data for April 2020 to March 2021 (total
for the toothpaste, toothbrush, mouth refresher, mouthwash, denture cleaning
agent, dental care product, electric toothbrush and denture adhesive markets)

Provide Value That Starts with Oral Care in Various Aspects of Daily Life

Oral health

Medical care

Monitoring oral condition asa factor in understanding
health risk

BeautyOral beauty
Oral condition management
to maintain and improve
motor function

Physical function

Specific
Opportunities

Oral care as part of corporate
health improvement activities

Oral care as a countermeasure todisease of the entire bodyInsurance

Dental care
Oral careproduct market¥240 billion

In the areas illustrated above, we are building new pointsof customer contact, collecting oral health data and using
this data to provide optimal services and solutions thatare personalized to the individual in order to develop

Senior living

Oral condition management for
nursing care recipients
Healthcare through eating

Dietary habits

Establishing oral care habits
to promote health(Japan)Lion is working to offer better oral healthcare solutions by utilizing data related tooral health.

Health andproductivity
management

Educationbusinesses that build long-term relationships with
consumers. We are advancing these efforts not only
within the Lion Group, but by proactively building
partnerships with companies in other industries, dental
clinics, academia and other outside stakeholders.
By advancing digital transformation in oral health, we will
create new, innovative business models.

Utilize Oral Health Data to Create and Offer Individually Tailored Oral Health Solutions
Business partners

Provide personalized services
and solutions

For every customer-1 y/oLeverage oral health data withbusiness partners• Basic health• Living data
• Oral condition• Tooth brushing habits

25 Lion Integrated Report 2021

100 y/oOral health cycle

LION Oral health Database

Build new contact points withcustomers to acquire oral health dataOur three growth strategies: Transform our business foundations for growth

Digital transformation (DX)

Reinforce business infrastructure• Increase production capacity to support business growth• Improve efficiency and speed through operationaltransformation•D evelop core systems that will enhance thesophistication of management• Enhance decision-making precision and speed with­real-time business data

• Build a flexible, resilient and sustainable SCM platform

Transform
digital/data use• Build business foundations that are adaptable to new
business models

Transform value
provided

Vision & Future• Create new value by building digital infrastructure

Transform operations

Our Path & DNA

Promote business foundation transformation that will spur growth by continuing
and reinforcing strategic investment

Transform corporate culture and digital platforms

Health care data/AI

Sakaide Toothpaste Factory
Operations begin July 2021

Our three growth strategies: Generate dynamism to realize innovative change

Strategy & BusinessWork reforms

We will transform to realize sustainable growth through corporate brand reinforcement,
professional fulfillment reforms and the promotion of diversity and open innovation
Professional Fulfillment Reforms

In and outside Japan, we will implement p­ urpose-driven,

We will enhance our adaptability and innovativeness byconsistent corporate activities to continually earn theadvancing the Lion Professional Fulfillment Reforms

trust and respect of all stakeholders and increase

to fully bring out and utilize employees’ diverse abilities.

corporate value.

GovernanceCorporate Branding

Fulfilling work
Able to grow as a professional and private individualand lead a fulfilling life

Diversity & Open Innovation

resources and proactive external collaboration to

Work styles

Make maximum use ofdiverse talent

Change ways of working,with emphasis on
independenceStrengthen
relationships

Mutual understanding
and respecttransform our ways of thinking and operational speed

Lion-style health supportand methods and thereby continually create new value.

“GENKI” Action

Lion Integrated Report 2021 26

Performance

We will accelerate the utilization of diverse humanWork management

Sustainability
Addressing the Sustainability Material Issues to Achieve the Management Vision
Approach to Sustainability
Upholding its founding spirit of “benefiting society through its
business activities,” Lion, in addition to pursuing economic
development, has long considered its impact on theenvironment and society and worked to address related
issues through its business activities.

to the realization of a sustainable society and achievebusiness growth.

At present, we are tackling key management issues toreduce risks and achieve our management vision for 2030 of“Becoming an advanced daily healthcare company.” At thesame time, we are practicing management driven by our
purpose, “Make a difference in everyday lives by redesigning
habits: “ReDesign.” Based on this purpose, the Lion Groupwill synergistically address its sustainability material issues
and advance three growth strategies in order to contribute

Lion’s Sustainability
https://www.lion.co.jp/en/csr/management/

Contributing to the Achievement of the SDGs
As an advanced daily healthcare company, the Lion Groupwill contribute to the achievement of the Sustainable
Development Goals (SDGs) mainly through the realization of
SDG 3, “Ensure healthy lives and promote well-being for all at
all ages,” through its products and services. Through the
Vision2030 long-term strategic framework, Lion will contributeto the realization of a sustainable society in line with the SDGs.
• Promoting oral care habits• Establishing cleanliness and hygiene habits

Lion’s SDG-Related Initiatives
https://www.lion.co.jp/en/csr/sdgs/

Risks and Opportunities Related to Sustainability Material Issues in the Value Chain
Lion has classified its Sustainability Material Issues as presenting either risks or opportunities based on considerations of theentire value chain and its stakeholders.
Value ChainStage

Raw Material
Procurement

Lion’s Activities

Use by Consumers

Business partners

Keystakeholders

Customers
Employees
Shareholders and investors
Local communities

Opportunities

Promoting Diversity
Promoting Work-Life Balance
Developing Human Resources
Improving Employee HealthPursuing Customer Satisfaction and Trust
Promoting Environmental Initiatives for a Sustainable Planet
Enhancing the Occupational
Safety Management System

Risks

Sustainability Material Issues

Creating Healthy Living Habits

Respecting Human Rights
Building Responsible Supply Chain Management
Promoting Risk Management
Reinforcing Compliance
Enhancing Governance

27 Lion Integrated Report 2021

Disposal by Consumers

Identifying Material Issues

Step

1

Step

2

Step

3

Our Approach to Identifying Sustainability Material Issues
Extremely highStep4
Degree of impact on businesses

Extremely
high

High

Based on ISO 26000, the SDGs, the GRI Standards
and the ten principles of the UN Global Compact, 39
social issues were identified.

Consider each issue’s impact on society
and businesses
The issues identified in Step 1 were evaluated interms of their impact on society and businesses andreviewed by related departments and theSustainability Promotion Meeting.

Investigate the soundness of thematerial issues
The soundness of each item was investigated in lightof the viewpoints of third-party institutions and theissues were revised as necessary.

Obtain approval from the Executive
Committee and Board of Directors
The Sustainability Material Issues identified wereapproved by the Executive Committee and Boardof Directors.

Sustainability Promotion Council
In order to promote sustainable management, until 2020 weheld the Sustainability Promotion Meeting, comprising all
executive directors, including the president, and related
departments. In 2021, we revised this implementation
system and established the Sustainability Promotion
Council, which meets twice a year.

ReportPresent items for discussion

Sustainability Promotion Council
Chairperson: The director responsible for the Sustainability Promotion Department
Members: The President, executive officers and representatives of related divisions

S Subcommittee

E Subcommittee(Social Environment)(Global Environment)

Run by: Executive officers

Run by: Executive officers

G Subcommittee(Action Management)
Run by: Executive officers

StrategyPlan Act

Business execution departments
Lion Integrated Report 2021 28

Performance

We have established three subcommittees under thecouncil, each headed by an executive officer, positioning
top management at the forefront of promoting Sustainability
Material Issues more than ever before. Decisions made by
the Sustainability Promotion Council are reported to the
Senior Executive Committee and, as necessary, presented
to and discussed by the Executive Committee and theBoard of Directors and before being reflected in thebusiness activities of the business execution departments.

Executive Committee/
Board of Directors

Senior Executive Committee

Governance

Sustainability Management

Strategy & Business

Degree of impact
on society

The Lion Group’s
Sustainability Material Issues

Identify social issues

Vision & Future

In particular, we have positioned “Creating Healthy Living
Habits” and “Promoting Environmental Initiatives for a
Sustainable Planet” as top priority material issues that wemust invest management resources toward to secure acompetitive advantage.

Steps for Identifying Sustainability Material Issues
Our Path & DNA

In 2020, the Lion Group applied the steps shown at right torevise its list of Sustainability Material Issues to address overthe coming decade in order to achieve its goals for 2030,
including the realization of the management vision andcontributing to the realization of the SDGs. These
Sustainability Material Issues are relevant to both the LionGroup and society at large and, with the goal of helping torealize a healthy future for people and the planet, theirchoice was informed by broad business, environmental andsocial sustainability perspectives. In identifying these issues,
we comprehensively considered the entire value chain andinterests of Lion’s stakeholders in order to understand therisks and opportunities each represents.

Sustainability
The Lion Group Sustainability Material Issues and Objectives for 2030
With an eye to achieving its management vision of“Becoming an advanced daily healthcare company” by
2030 and contributing to the Sustainable Development
Goals (SDGs), a set of shared global goals for 2030, theLion Group has established the Lion Group Sustainability
Material Issues and objectives for 2030.
The Lion Group believes that it is crucial to take a longerterm perspective in order to ensure that it can continue tomeet the needs of society and customers and grow its
businesses. Furthermore, in light of the novel coronavirus

Sustainability Material Issues × Three growth strategies(COVID-19) pandemic and changes in the social
environment since 2020, we have revised our objectives.
Aiming for a higher level of achievement, the 2030
objectives include quantitative indicators for evaluating
our progress.
Taking an integrated approach that incorporates
sustainability into management strategy, the Lion Groupaims to contribute to the realization of a sustainable society
and achieve further business growth.

Creating social value

Top priority
material issues

Health,comfort andcleanliness ineveryday living

Creating Healthy
Living Habits

Promoting
Environmental
Initiatives for a
Sustainable
PlanetMaterial issues

29 Lion Integrated Report 2021

Our three
growthstrategies

Sustainable
society

Related SDGs

The Sustainability Material Issues and 2030 Objectives* The Sustainability Material Issues and objectives published in 2020 have been partially revised.

Top priority material issuesE romotingP
Environmental
Initiatives for a
Sustainable Planet

Creating Healthy
Living Habits

Promoting Work-Life
Balance

Developing Human
Resources

Enhancing the
Occupational Safety
Management System

Respecting Human
RightsPursuing Customer
Satisfaction and Trust

Promoting Risk
Management

Enhancing
Governance• CO2 emissions
levelsPromote the 3Rs (reduce, reuse, recycle) andrenewable activities.

• R ecycled plastic and biomass plastic usage
Double 2017 levels

Reduce water usage throughout product life cycles.

• Water usage
Down 30% compared with 2017
levels (per unit of net sales)17• P ersons provided with products, services and­information aimed at creating healthy living habits­
1 billion

Provide opportunities for everyone to practice oral
healthcare whenever necessary, regardless of living
environment, physical condition, economic status,
education or access to information, etc.
Promote the establishment of hygienic habits thatprevent bacteria and viruses from entering the bodyacross all aspects of daily living.

Down 30% compared with 2017

3

6

7

9

12

13

14

15

3

4

6

10

12

17

Enable human resources with diverse values and ideas
to fully express their individuality and abilities andsucceed professionally.

• Ratio of women in management 30% or more
• Employees who feel that employees with diverse
values are enabled to succeed professionally
80% or more

58Realize workplaces in which every employee canutilize their abilities in ways that suit their lifestyles andachieve professional fulfilment in their work.

• Employee engagement

Increase from the 2021 level3

8Create environments that allow all employees toexercise their diverse abilities to the fullest to foster
human resources who generate dynamism to realize
innovative change.

• E mployees who are using diverse educational
programs (Lion Career Village) for individualized skill
acquisition and ability development 100%

5

8

10

Support mental and physical healthcare for
employees to reinforce Group human resources
and achieve sustainable corporate growth.

• Employees getting dental checkups 100%
• Absenteeism Improve from the 2021 level

3

8

17

Enhance systems to ensure compliance withoccupational health and safety laws and regulations
and thoroughly enforce safety awareness and facility
safety to ensure occupational safety, health andcomfort for employees and outside partners.

• P articipation in safety education and training
Implement as planned (100%) at work sites• Serious health and safety legal violations Zero
• Serious accidents and incidents Zero3

8

Ensure respect for the human rights of all stakeholders
affected by Group business activities in line with the
LION Human Rights Policy.

• H uman rights due diligence implementation formaterial human rights issues 100%

5

8

10

16

Implement sustainable procurement with zerotolerance for human rights and labor problems(including child labor and forced labor) or
environmental destruction in line with the Sustainable
Material Procurement Policy and Lion Group Supplier
CSR Guidelines.

• Procurement of third-party certified paper and pulp
(FSC, PEFC, etc.) and palm oil, palm kernel oil andtheir derivatives (RSPO, etc.) 100%
• Procurement of third-party certified paper and pulp
(FSC, PEFC, etc.) and palm oil, palm kernel oil andtheir derivatives (RSPO, etc.) from suppliers that
support efforts aimed at zero deforestation 100%

5

6

7

8

10

12

13

14

15

16

17

P ro m o t e a n d re i n f o rc e c o n s u m e r- o r i e n t e dmanagement by improving customer support quality
and the value of products and services.

• Products in which consumer opinions are reflected
100%

3

10

12

Build a comprehensive and exhaustive risk
management system for identifying and quickly andappropriately dealing with risks related to the LionGroup to achieve sustainable corporate growth.

• Disclosure of the results of monitoring significant
business risks and progress in implementing
reduction measures At least once a year

8

12

Reinforce effective initiatives to instill complianceawareness throughout the Lion Group to earn andmaintain the trust of society.

• Participation in compliance education and training
Implement as planned (100%) at work sites• Serious compliance violations Zero

5

10

Build sound, fair, transparent and highly effective
governance systems to enable sustainable corporate
value enhancement.

•
D isclosure of the results of monitoring theestablishment and operation of internal control
systems At least once a year•I mprovement in evaluations from exter nal
organizations Improve from the 2020 level

16

10

17

16

Lion Integrated Report 2021 30

PerformanceG

Reinforcing
Compliance

Reduce CO2 emissions throughout business activities
and product life cycles.

Governance

Building Responsible
Supply Chain
Management

Related SDGs

Strategy & Business

S

Improving Employee
HealthIndicators

Vision & Future

Promoting Diversity

Objectives

Our Path & DNA

Material issues

Sustainability
Creating Healthy Living Habits
Related SDGs

The Lion Group, in providing daily commodities and services, plays an important role in society, and webelieve that helping establish basic living habits, like tooth brushing and hand washing, is at the core of ourvalue creation. Driven by our purpose, “Make a difference in everyday lives by redesigning habits: ReDesign,”
we are pursuing initiatives to address issues ranging from the personal to the societal, aiming to create
healthy living habits for 1 billion people around the world.
Oral Care Habit Initiatives
Leveraging our strength as the oral care productmanufacturer with the top market share in Japan,* going
forward, we will aim for business expansion under theconcept of “oral healthcare,” transcending the bounds of ourexisting businesses to support overall health and quality oflife (QOL) from the mouth outward. Looking for ways tomake a difference utilizing Lion’s unique strengths, we turned
our attention to health disparities. To address this issue,
which is expected to grow in significance worldwide going
forward, we have launched new initiatives to promote
Inclusive Oral Care over the coming decade ending in 2030.
* Based on INTAGE SRI+ cumulative sales data for April 2020 to March 2021 (total forthe toothpaste, toothbrush, mouth refresher, mouthwash, denture cleaning agent,dental care product, electric toothbrush and denture adhesive markets)

Inclusive Oral Care

Making a difference forindividuals and society
through oral care.

Three Credos

In 2021, we kicked off our inclusive oral care efforts, with the launch of two initiatives aimed at providing
education and information and eliminating economic disparities.
 Supporting Children
Programs to develop self-esteem• Compared with the children of more affluent households, the children of
economically disadvantaged families typically grow up having fewer positive
experiences—like being praised, communicating with adults and acquiring life
skills—and have significantly lower self-esteem.
• Human beings must eat to live, and tooth brushing is closely related to eating.
Using this as an entry point, Lion offers a variety of oral health-related
programs via children’s community centers that provide meals and services
that deliver food to households with children. These programs provide thekind of positive experiences that children need to grow their self-esteem.
• We are coordinatingwith NPOs and municipalities to build support
frameworks for children.

Focus

Agreement Regarding Inclusive
Oral CareIn March 2021, Lion and the NPOs Florence andMusubie formed an agreement to work together tobuild frameworks for supporting the activities listed
at left in order to support children by providing oral
care opportunities.

Becoming fans

2 Using Verified Sustainable Mint from Growers in India
Supporting systems for sustainable mint production by using verified sustainable mint
• Lion’s toothpastes are flavored using high-quality natural mint selected from sources around the world. The
mint species Mentha Arvensis is particularly key to rounding out the flavors of our products, and India is its
greatest producer.
• Lion is switching to the exclusive use of Mentha Arvensis verified via strict inspections* for all Lion toothpastes(beginning with Dentor Clear MAX in June 2021 and expanding to all brands thereafter).
* This mint is produced by growers verified under the Farm Sustainability Assessment (FSA, a survey comprising 127
questions about social and environmental practices) as meeting certain standards related to management, theenvironment, labor and production. The FSA is operated by the Sustainable Agriculture Initiative Platform (SAI
Platform), which supports the creation of sustainable agricultural supply chains.

• The ongoing procurement of verified mint will encourage more growers to get verified, in turn supporting therealization of sustainable mint production systems.

31 Lion Integrated Report 2021

A representative from a flavoring
company explaining verification
to growers

Going forward, using digital tools, we will work to spreadhygiene habits suited to living in the new normal created by
the pandemic as we evolve our businesses accordingly.
Lion’s Initiatives Related to COVID-19 (Japanese)
https://www.lion.co.jp/ja/covid19info/

The Lion Group’s Initiatives Related to COVID-19• S table supply of hand soaps and handsanitizers, etc.
Supplyinghygiene-related
products

Other support
Donated hand soap, toothpaste, cooling sheets for feetand other products (Lion Corporation (Singapore) Pte Ltd)• Donated hand soap, toothpaste and toothbrushtravel sets to quarantine facilities for Diamond
Princess cruise ship passengers and crew andindividuals returning from Wuhan, China (Japan)• Donated ¥215 million to support the overall
activities of the Red Cross (Japan and China),
including infection countermeasures, with theaim of supporting healthcare workers

Taught correct hand washingmethods at kindergartensand hospitals and donatedto healthcare workers

Promoted hand washing instores and hygiene
p ro d u c t s d o n a t e d t ohospitals

Lion Corporation (Thailand) Ltd.

Lion Corporation

Donated hygiene products to taxi drivers,
who come into contact with many people

Carried out a hand washingawareness-raising event in withother companies, including anexperiment with a black light

Governance

Lion Corporation (Korea)

Strategy & Business

Lion Daily Necessities
Chemicals (Qingdao) Co., Ltd.

Vision & Future

Donations forhealthcare workers

Providing information
about hygiene indaily living(via our website, etc.)

Our Path & DNA

Hygiene Habit Initiatives
As the global COVID-19 pandemic rages on, taking care toprevent infection has become a regular party of daily life. The
Lion Group provides stable supplies of hand soaps andsanitizers and carries out educational programs about
correct hand washing habits in Japan and across Asia.

Southern Lion Sdn. Bhd.

Lion Home Products(Taiwan) Co., Ltd.

Taught children correct
hand washing techniques
Donated hygiene products

Lion Group's Social Contribution Activities
https://www.lion.co.jp/en/csr/community/overseas/

Lion Corporation(Hong Kong) Ltd.

Taught kindergarteners
hand washing techniques
using a video

Lion Integrated Report 2021 32

Performance

Lion Corporation(Singapore) Pte Ltd

Sustainability
Promoting Environmental Initiatives for a Sustainable Planet
Related SDGs

In 2019, the Lion Group established the LION Eco Challenge 2050, a set of long-term environmental objectives,to contribute through its business activities to the accomplishment of worldwide goals related to addressing
global-scale environmental problems, such as those identified by the Paris Agreement and the Sustainable
Development Goals (SDGs). Aiming to realize a decarbonized, resource circulating society, we are putting into
practice initiatives aimed at solving issues related to decarbonization, plastics and water resources.

LION Eco Challenge 2050
Healthy future for people and the planet
While striving for business growth, the Lion Group is working to contribute to global environmental sustainability, aiming to realize a decarbonized, resourcecirculating society by 2050.
❶ Through all of its businesses, the Lion Group will address the issues of decarbonization (climate change) and resource circulation (plastics, water resources) tocontribute to the realization of a healthy future for people and the planet.
❷ By offering products and services based on environment-conscious design, the Lion Group will reduce the environmental burden attributable to the household
use stage of its products’ life cycles.
❸ The Lion Group will provide products that contribute naturally to environmental conservation without entailing user inconvenience or sacrifice and promote theformation of eco-friendly living habits by engaging in interactive communication with consumers.

Realizing a Decarbonized Society
Challeng

e1

Lion will reduce CO2 emissions
to zero throughout businessactivities by 2050.

2030 objective:

30% CO emission reduction
2

in comparison with 2017 levels in
absolute quantity

Challeng

e2

Lion will reduce CO2 emissions
by half throughout the life cycleof its products by 2050.

2030 objective:30% CO2 emission reduction
in comparison with 2017 levels in
absolute quantity

Realizing a Resource-Circulating Society
Challeng

e3

Lion will realize advanced plastics
recycling by 2050.

2030 objectives: Promote the 3Rs (Reduce, Reuse,
Recycle) and Renewable (use of sustainable
resources)
Double the usage of recycled and biomass plastics
in comparison with 2017 levels in absolute quantity

Challeng

e4

Lion will optimize water usage forsustainability by 2050.

2030 objective:

30% water usage reduction
per unit of net sales across productlife cycles in comparison with 2017 levels

	Together with the Environment
https://www.lion.co.jp/en/csr/env/

Greenhouse Gas Reduction Targets and Initiatives Recognized by International Initiatives
Disclosure of Management Strategy for Addressing Climate Change and Environmental Policy
In May 2019, Lion endorsed the recommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD) and began evaluating the financial impact on its operations of climate-related risks andopportunities (scenario analyses).
Going forward, we will leverage insights gleaned thus far while enhancing our scenario analyses,
considering response measures and advancing disclosure based on the TCFD framework.

Greenhouse Gas Reduction Target Validated by the SBT Initiative
In July 2020, Lion’s greenhouse gas (GHG) reduction target for 2030 (an interim goal under LION Eco
Challenge 2050) was validated by the Science Based Targets (SBT) initiative as being aligned with the Paris
Agreement target of limiting global warming to well below 2°C.

GHG Reduction Disclosure and International Evaluation
Lion has been included for two consecutive years on the Supplier Engagement Leaderboard, a select list of
the highest rated companies under the Supplier Engagement Rating (SER)* of the CDP, an international
non-profit organization that provides systems for environmental information disclosure.
* A rating of companies’ efforts to engage with other entities in their supply chains on the issue of climate change as part of their initiatives
to reduce GHGs throughout their supply chains.

33 Lion Integrated Report 2021

Realizing a Decarbonized, Resource-Circulating Society
At every step from raw material procurement to production,
distribution, product use and disposal, the Lion Group isaccelerating initiatives aimed at realizing a decarbonized,
resource-circulating society and reducing environmental
burden by manufacturing and selling environmentallyfriendly products, promoting environmentally friendly habits
and collaborating with stakeholders.

Our Path & DNA

The planet faces numerous environmental problems,
including extreme weather due to climate change, resource
depletion, water shortages and marine plastic waste.
Addressing these problems is a pressing issue for theentire world, and doing so will require each individual to
deepen their understanding of environmental problems andwork together.

Reducing Environmental Impact over the Product Life Cycle, Including During Customer Use• Using plant-derived raw materials andpracticing biodiversity-friendly palm oil,paper and pulp purchasing• Using recycled materials

Raw material
procurement



12%
Water: 4.4%
CO2:



CO2:

Water:

Environmentally friendly

Disposal by
Consumers• Using energy-saving equipment• Recycling wastewater and saving waterprocurement to disposal

56%
Water:76.2%
CO2:

Use by Consumers

Strategy & BusinessDistribution

Use by Consumers• P roviding products thatsave water and electricity• Using plant-derived raw
materials to reduce CO2
emissions3%
0.1%

Production

initiatives from raw material• Promoting the use of refill and 
replacement products• Downsizing containers and packaging• Reducing plastic use

Vision & Future

24%
Water:19.3%

CO2:



• Improving loading ­efficiency
CO2:
by downsizing products• R educing CO 2 emissions Water:through modal shifts

Disposal by Consumers

Distribution
p. 10• Highly concentrated liquid laundry detergent
TOP SUPER NANOX saves water, electricity andplastic, making it environmentally friendly fromdevelopment to final use!

5%
0.0%

p. 56

Smart Logistics (Logistics EDI)

Logistics EDI
Wholesaler

Manufacturer* Bottle only; excludes nozzle, cap, etc.

Disposal by Consumers

Toothbrush Recycling Program
Toothbrush
Recycling

Good for the Mouth!
Replacing toothbrushes
with splayed bristles
helps maintain and­promote oral health.

Good for the Planet!
Used toothbrushes arecollected and recycled
into planters and otherplastic products.

Working toward a healthy future for people and the planet

Began horizontal recycling efforts for film packaging
in collaboration with Kao Corporation
1) Studying film packaging sorting and collection methods2) Advancing quality design of recyclable containers
3) Studying uses of recycled materials
4) Fostering awareness and uptake among consumers
RecyCreation of Film Packaging
Performance

Toothbrush
Replacement

Governance•B ottle* made from 100% recycled PET, a Lion first!

Used refill packs

In-storecollection

Cutting/
cleaning

Pelletizing

Recycled into plastic
building blocks that canbe assembled/reused

Lion Integrated Report 2021 34

Consumer Products Business

Redesigning Habits for
Changing Living Environments to
Drive Market Creation
Masayuki Takemori
Executive Officer,
Executive General Manager of Health andHome Care Products Division

14%
Other

26%

Oral Care Products

Mainstay products: Toothpastes,
toothbrushes, dental rinses,
dental care products
No. 1
toothpaste andtoothbrushmarket share

10%

Pharmaceutical Products

Mainstay products: Antipyretic analgesics,
antidiarrheals, gastrointestinal medicines,
eye drops, dermatologic agents

14%
External sales
in 2020¥229.7billion

10%

26%

Mainstay products:
Dishwashing detergents,
household cleaners,
food preparation products

Mainstay products:
Laundry detergents,
fabric softeners, bleaches,
clothing care agents

Living Care Products* Market share information is based on Lion surveys.

35 Lion Integrated Report 2021

Fabric Care Products

Beauty Care Products

Mainstay products:
Hand soaps, body washes,
antiperspirants anddeodorants, shampoos,conditioners,
men’s toiletries

No. 1
hand soap
market sharePercentage of Consolidated
External Sales

External Sales
Our Path & DNA

2020
Results

LIVE Plan
2018–2020(Billions of yen)
240

235.0
229.7

230

219.3

220

64.6%

215.3
210

2018

2019

2020

2021
(Target)(Year)

Vision & Future

0

Review of 2020

Market Environment
consumption patterns as well, leading to market expansion.
At the same time, contraction in demand from inboundtourists to Japan and increased consumer frugality inresponse to economic instability have led to a contraction in
the toothbrush market, with consumers replacing their
toothbrushes less frequently, decreasing sales volumes.
Given the current lack of clarity, it is especially important toclosely examine and understand changing consumer
mindsets and behavior and offer new habits to achievebusiness growth via the creation of new markets.

Lion Integrated Report 2021 36

Performance

As of May 2021, the COVID-19 pandemic shows no signs ofsubsiding, and the outlook for consumption and theeconomy remains unclear. However, certain changes areapparent in consumer mindsets, caused by changes in living
environments due to the pandemic. These changes include,for example, increased hygiene awareness in the form of adesire to maintain a clean environment in the face of thethreat of viral infection as well as increased attention tohousework as consumers spend more time at home. Suchshifts in mindsets and behavior are being reflected inGovernanceIn oral care products, the launch of new products andincreased sales of high-value-added products contributed toongoing growth. Sales grew considerably in beauty careproducts, which include products that address hygiene

needs, and living care products, which saw a rise in demand
due to increased time spent at home. However, performance
was unfavorable in fabric care products, which are facing
increasingly fierce competition, as well as in pharmaceuticalproducts, which were impacted by decreased demand
from inbound tourists due to the COVID-19 pandemic.
Furthermore, challenges remain with regard to the quick andflexible provision of information, products and services in
response to demand shifts and other changes in the market
environment and consumer needs arising from the threat ofviral infection, and the entire Company is working topromote digital transformation and further reinforce supply
chain management.

Strategy & BusinessIn the Consumer Products Business, we worked to increase
our market presence by introducing and cultivating new highvalue-added products, primarily in mainstay brands. At thesame time, in response to the increase in hygiene needs
caused by the novel coronavirus (COVID-19) pandemic, weboosted our hand soap production capacity to ensure
adequate supply and strived to disseminate correct handwashing methods and other useful information.

Consumer Products Business
Consumer Products Business Strategy
We believe the “new normal” brought about by the COVID19 pandemic will further expand the social role andsignificance of Lion as a familiar presence in daily living. We
will therefore further reinforce our product and service
offerings centered on our purpose, “Make a difference ineveryday lives by redesigning habits: ReDesign,” aiming toserve more consumers. The pandemic has caused majorchanges in consumer values and lifestyles, including
increases in hygiene needs and shifts in housework patterns.
By redesigning habits through the speedy provision of
products that respond to these changes, we will create newmarkets and thereby achieve business growth.

In addition, one of our growth strategies for achieving ourmanagement vision is “Accelerate growth in four fields ofvalue creation.” In fields that will serve as drivers of growth,where we can evolve and develop the redesigning of habits,
we will advance thinking and coordination across theboundaries of existing businesses, domestic and overseas,
to contribute to habit creation for more consumers acrossmore aspects of daily living.

Oral Care Strategy
In Oral Care Products, as the manufacturer with the leading
market share in Japan, we employ a comprehensive
strategy, offering brands for various consumer life stages
and oral conditions (CLINICA for cavity prevention, NONIO
for bad-breath care, and SYSTEMA and Dent Health for gum
disease prevention). In this way, we are driving the growth ofthe oral care market. Going forward, in addition to further
developing our four mainstay brands, we aim to expand thehigh-end whitening market through our new brand, Lightee.

In recent years, the advance of research into the links
between gum disease and ailments of the entire body has led
to growing recognition of the importance of oral care. Using
insights from years of research and our strength as the
manufacturer with the top market share in Japan, going
forward we will aim for business expansion under theconcept of “oral healthcare,” transcending the bounds of ourexisting businesses to support overall health and quality of life
(QOL) from the mouth outward.
* Regular checkups at dental clinics, etc.

Lion has a long history of promoting oral care awarenessand education. Since 2014, through the CLINICA brand, we
have been promoting the practice of preventive dentistry
involving regular professional care* alongside self-care,simultaneously increasing oral care awareness and boostingcustomer spending, helping to expand the market. Since thelaunch of the new MIGACOT brand in 2020, we have also
been engaged in awareness-raising to promote theestablishment of after-lunch tooth brushing habits.

37 Lion Integrated Report 2021

Comprehensive Strategy for Oral Care

Ages 20-39
Younger adults

Ages 40-59
Middle aged users

Ages 60+
Seniors

Forming habits

Changing habits

Choosing for the
first time

Revisiting
choices

Staying healthy
long into
the futureBeauty Care Strategy
suggest new habits to contribute to the establishment ofhygienic habits beyond hand washing, thereby facilitating
market expansion and business growth.
Hygienic Practices That Prevent Germs from Entering the Body

Outside handwashing
Eliminating
bacteria andviruses

Avoidingbringing viruses
from outside
into the home

Hand washing(hand soap)NEW
Use on the go

NEW

Vision & Future

Bacteria/virus
countermeasures
for useon the goPreventing
dry skin

Convenience(no-touch)NEWlaundry process in the laundry basket and thereby
contributing to market expansion.

Governance

In Living Care Products, we are pursuing value in cleanlinessand hygiene and promoting more efficient, labor-saving
housework under the concepts of “making kitchen workeasy” for dishwashing detergents, “cleanliness without
strenuous effort” for household cleaners and “making realcooking simple” for food preparation products. Rather thanapproaching housework as a single, monolithic category, we
are offering a new standard of next-generation housework to
fit diverse lifestyles.

Strategy & Business

Fabric Care and Living Care Strategy
In Fabric Care and Living Care Products, Lion offers highvalue-added products designed around consumer needs toeliminate various sources of stress in housework while
contributing to market expansion by increasing product unit
prices. In Fabric Care Products, to further expand the useof our mainstay highly concentrated liquid laundry
detergents and fabric softeners, we will respond to a shift indemand toward bulk purchasing brought about by the
COVID-19 pandemic by reinforcing our lineup of large-size
products. In addition, reflecting increasing hygiene needs,
we have launched a new Bright bleach brand product for
use in pretreating garments before washing. With thislaunch, we are suggesting the new habit of beginning the

Our Path & DNA

In Beauty Care Products, we are focusing primarily on theKireiKirei, hadakara and Ban brands, aiming to help realize
mental and physical health through the beauty of cleanlinessbased on hygiene awareness. In particular, KireiKirei waslaunched in 1997 following a series of large-scale outbreaksof E. coli in 1996 that led to incidents of group infection in
Japan. With this brand, Lion introduced the novel
proposition that hand washing with a hand soap can be fun
and focused efforts on spreading hand washing habits inschools and homes, helping establish such habits in Japanand securing the top market share in the domestic handsoap market. The experience of the COVID-19 pandemic
has led to a renewed awareness of the importance of handwashing for infection prevention. Lion is taking thisopportunity to evolve KireiKirei from a hand soap brand to abroader hygiene brand to better realize cleanliness andhygiene in everyday living. New products planned for 2021
will not simply expand the brand’s lineup, but offer new typesof products designed for use in different situations andPharmaceutical Product Strategy
five key fields of antipyretic analgesics, eye drops,
antidiarrheals, gastrointestinal medicines and dermatologic
agents, Lion is leveraging the unique advantage provided byits broad insight ranging from household products to OTC
drugs to promote a shift toward higher-added-value
products, bring out latent demand and propose solutions
that will accelerate the cultivation of new demand. By doing
so, we will revitalize the market.
Lion Integrated Report 2021 38

Performance

In Pharmaceutical Products, we are offering self-caresolutions that enable individuals to freely choose optimal
solutions to their specific ailments or discomforts throughour mainstay brands, including BUFFERIN and Smile. In
2020, we expanded our dermatologic agent offerings as athird pillar of this business alongside antipyretic analgesics
and eye drops. Due to the loss of demand from inboundtourists due to the pandemic, the OTC drug market has
been stagnant. Given the situation, focusing primarily on theOverseas Business

Advancing a Strategy of
Glocalization to Increase Our Market
Presence in Asia

Annette Ling
Executive Officer
Executive General Manager of International Division

Lion Corporation (Thailand) Ltd.

Southern Lion Sdn. Bhd.

Lion Corporation (Korea)

Location: Bangkok

Location: Johor Bahru

Location: Seoul

No. 1 body wash and hand soap market shareNo. 1 laundry detergent market shareNo. 1 hand soap market share

Lion Daily Necessities Chemicals(Qingdao) Co., Ltd.
External sales
for 2020(consolidated)

Location: Qingdao¥91.2 billion
Lion Home Products (Taiwan) Co., Ltd. 
Location: New Taipei

Lion Corporation (Singapore) Pte LtdPT. Lion Wings

Lion Corporation (Hong Kong) Ltd.

Location: Singapore

Location: East Jakarta(Equity method subsidiary)

Location: Hong Kong

No. 1 hand soap, laundry detergent anddishwashing detergent market share* Market share information is based on Lion surveys.

39 Lion Integrated Report 2021

Percentage of Consolidated
External Sales

External SalesLIVE Plan
2018–2020(Billions of yen)
100

25.7%

95

Our Path & DNA

2020
Results

95.0

94.7
91.7

91.2

2019

2020

90

85

2018

2021
(Target)(Year)

Vision & Future

0

Review of 2020
leading market share. Lackluster performance in Southeast
Asia was primarily attributable to decreased consumption
due to lockdowns and limits on activity in Thailand andMalaysia, but also reflected an overall slowing of growth.
Accordingly, speeding up ongoing efforts to shift to a sales
mix that is not dependent on fabric care products in Thailand
and Malaysia remains a challenge going forward.

Strategy & BusinessIn 2020, business in Southeast Asia struggled due tostagnant consumption, but sales in China drove sales inNortheast Asia, leading to an overall increase in revenue. In
Northeast Asia, performance was strong in China, wherebusiness made a quick recovery from the impact of the novel
coronavirus (COVID-19) pandemic, while sales in South
Korea saw double-digit growth due to the strong
performance of hand soaps, an area in which Lion boasts theMarket Environment
Looking at consumer behavior, reflecting lifestyle changes
due to the growth of middle-income populations anddemographic graying, needs for healthcare products andhygiene-related products that support the establishment ofhygiene habits are growing. At the same time, the COVID-19
pandemic has accelerated growth in online purchasing. We
are working to build a stable business structure that isresilient to such changes in the external environment andadvancing business development focused on thequantitative and qualitative growth of the Overseas Business.

Performance

Strategy
To achieve its management vision, Lion seeks to make adifference in the everyday lives of more people. The
Overseas Business has a major role to play in realizing

GovernanceIn 2020, hand soap and other hygiene-related productmarkets in Asia grew considerably. However, decreased
consumption caused stagnation and year-on-year shrinkage
in markets for toothpaste, toothbrushes and laundry
detergents. Going forward, the outlook regarding suchfactors as the impact of COVID-19, geopolitical risks, foreign
currency exchange and raw material markets is unclear, andthe risk of market stagnation remains.

Lion’s goals of having more contact with consumers in thecourse of daily living and serving more consumers in moreareas, mainly in Asia. We aim for sales from the Overseas
Lion Integrated Report 2021 40

Overseas BusinessBusiness to account for approximately 50% of total net
sales by 2030 and are accelerating the transformation ofthis business with an emphasis on strong top-line growth.
To expand the Overseas Business, we are integrating
globalization and localization approaches to advance a
strategy of glocalization and create unique competitive
advantages. The countries and regions of Asia present
diverse needs, reflecting differences in economic
conditions, religions and cultures, but lifestyles and needs
are growing increasingly similar, particularly in urban areas.
To provide useful value to more consumers across more
aspects of daily living, rather than offering uniform products
across all markets, we must analyze and understand thetrends and characteristics of each country and region toadvance regionally optimized product development while
maintaining a global perspective. Under this glocalization
strategy, we are particularly focusing on expanding
business in China and promoting the establishment of good
habits through education to expand our businesses in oral
care and hygiene-related products.
In recent years, we have more actively worked to enter new
fields through product development based on insights into
local markets. For example, in South Korea, we have entered
the K-beauty market, a subject of significant buzz in Japan,
with the RAWQUEST brand. In Indonesia, we launched the
POISE skincare brand, targeting the growing middle-income

population, as well as the Emeron Lovely cosmetics brand,
targeting younger users. Such entries into new markets willserve as a growth engine for the Overseas Business andallow us to build and develop business models andmarketing know-how in fields that we have not yet enteredin Japan.
We are also building systems to promote regionally optimized
product development. For the Southeast Asia business area,
since 2019 we have stationed Lion employees at theSingapore office to pursue regional business development.
These employees have applied a global perspective toincrease manufacturing speed and cost efficiency in thedevelopment, manufacture and sale of common regional
products. Using the experience and insight yielded by these
efforts, going forward, we will formulate and implement
regional strategies for each business area, covering
Northeast Asia as well, while reinforcing coordination withrelated departments in Japan to transition to a model ofCompany-wide involvement in the Overseas Business.
Furthermore, to expand the Overseas Business and make adifference in the daily lives of people in more areas,
increasing the number of countries in which we do businesswill be crucial. We are considering a variety of ways toquickly enter new countries in Southeast Asia and West
Asia, including M&A, mergers and tie-ups.

Expanding Our Business in China
Consumption in the Chinese market has made a strong
recovery, reflecting the effective control of COVID-19
infections. This market is crucial to Lion, which considers
China the country of greatest importance to the Overseas
Business. In 2020, to speed up and expand the overall oral
care business, divisions in Japan and China worked
together to enhance market research and product planning,
and a global brand development task force was dispatched
to China. Furthermore, we held several Chinese businessstrategy meetings that included members of top
management as part of proactive efforts to develop thisbusiness. As consumer purchasing increasingly moves
online, we are using live commerce and other sales
approaches that are increasing in importance in China, andour e-commerce is growing considerately. The oral carebusiness accounts for a large portion of our business in
41 Lion Integrated Report 2021

China. In this area, we launched online sales of the Smart
Key electric toothbrush, in September 2020. Developed
based on local insights, this product has performed
favorably. Furthermore, targeting the high-end toothwhitening toothpaste category, which is growing
considerably in China, we launched Lightee in March 2021,
marking Lion’s first ever simultaneous product release inJapan and China. Through these and other new initiatives,
we are working expand business in China.

Smart KeyLighteeExpanding the Oral Care Businessand reinforce brand development based on emotional appeal
to target younger demographics, such as Generation Z, aswith NONIO, which puts the focus on interpersonal relations.
At the same time, in all the countries and regions where
Lion operates, in addition to providing products andservices, creating healthy living habits through education andthe dissemination of information is Lion’s social
responsibility and key to its local strategies. We areundertaking preventive dentistry educational activities incooperation with dentistry experts and retailers to promote
the establishment of good oral care habits.

second regional brand in addition to KireiKirei. As in oralcare, we are focusing efforts on hand washing education topromote the establishment of hygiene habits in eachcountry and region.

Strategy & Business

Due to the ongoing COVID-19 pandemic, demand for handsoap and other hygiene-related products continues toexpand. To increase its presence in the hygiene-related
product market, under its glocalization strategy, Lion offers
KireiKirei hand soaps and is expanding its lineup of hygienerelated products to meet local needs in each country andregion where it does business. In 2020, to quickly respondto rapid market expansion, we increased production
capacity for KireiKirei products in South Korea and Thailand
and aggressively rolled out hand soaps, hand sanitizers andother products in each country and region. Furthermore, inSouth Korea, we launched hygia, a specialized hygiene
brand that offers new habits designed for living amid the
COVID-19 pandemic. This new brand’s concept is centeredon evidence-backed antibacterial, disinfectant and antiviraleffects as well as safety, and we aim to develop it into a

Vision & Future

Expanding the Hygiene-Related Product Business

Our Path & DNA

As lifestyles change and lengthening average lifespans leadto demographic graying in countries and regions across Asia,
the importance of oral care in supporting quality of life (QOL)
is rising. These conditions call for product development finely
tailored to the levels of oral hygiene knowledge andawareness and income in each country and region. Until
now, the Lion Group has marketed products based on theirfunctionality, primarily under the Systema brand. Goingforward, in line with the changing environments of eachcountry and region, we will shift the Systema brand towardhigher-added-value products centered on gum disease care

Governance
Performance

Hand washing educational programs in Asia

Lion Group's Social Contribution Activities
https://www.lion.co.jp/en/csr/community/overseas/

Lion Integrated Report 2021 42

Industrial Products Business
Chemical Products
Automotive• Rubber processing agents(anti-sticking agents)• Additive agents• Activators derived fromoils and fats

Detergents for Institutional Use
Electrical and Electronics

Key productsby field• Electro-conductive
carbon• Adhesive compounds

Dishwasher
detergents

Alcohol sanitizers• Concrete additives
Hand soaps

Lifestyle-Related Industry

Energy, Environmental & Infrastructure

Vegetable washing detergents

Dishwashingdetergents

Vegetable washing systems

Chemical ProductsReview of 2020
In 2020, the Chemical Products business was affected by
the global novel coronavirus (COVID-19) pandemic. Fromthe second quarter onward, in our key categories ofAutomotive and Electrical and Electronics, demand forchemical agents used in tires and rubber fell due todecreased automobile production, as did demand forelectronic components used in smartphones and otherapplications. In the latter half of the year, our businesses

were significantly impacted by decreases in fiber processing
and cosmetics production in Japan.
However, as operations at factories in China recovered in thesecond half of the year, sales of highly profitable carbon forsecondary batteries and adhesive compounds for displays
improved. As a result, we secured core operating income
approximately on par with the previous year.

Market Environment and Strategy
Lion Specialty Chemicals Corporation (LSC) is involved in the
manufacture and sale of chemical products. Based on ourcore interface science technologies, we leverage ouraccumulated technologies in such areas as surfactants,
carbon, polymers, rubber and fiber processing and fatty-acidnitrogen derivatives to provide distinctive niche products inthe four categories of Automotive, Electrical and Electronics,
Lifestyle-Related Industry and Energy, Environmental &Infrastructure. In 2020, the market environment underwent
tremendous changes, and in 2021 work styles (including the
adoption of remote work in response to the pandemic)
continue to change, while many countries are implementing
green industry expansion strategies to bolster theireconomies. In response to these developments, going
forward, LSC will aggressively work to provide value tomarkets centered on CASE (connected, autonomous,shared and electric) technologies, an area in which it boasts
a highly environmentally friendly product line that enjoys
43 Lion Integrated Report 2021

high market share. Specifically, we will develop products
useful for reducing interpersonal physical contact andimplementing safety measures as well as provide materials
for and develop recyclable products (in line with the 3Rs) andCASE-related products.
In addition, positioning sanitary products for the healthcare
market (primarily fatty-acid nitrogen derivatives for cleaningand hygiene applications) as another key area, we will develop
products to respond to post-pandemic market environmentchanges. To achieve its vision of becoming a “Global nichecompany that provides new value to advanced products forour industrial customers,” LSC will continue to develop andoffer global niche products that meet the needs presented bymarket changes and that prioritize ESG considerations inorder to contribute to sustainable social development.
Lion Specialty Chemicals Co., Ltd.
https://www.lion-specialty-chem.co.jp/en/Percentage of Consolidated
External Sales

8.9%

External SalesLIVE Plan
2018–2020(Billions of yen)
36

34

Our Path & DNA

2020
Results

34.0
32.9

32

31.5

32.0

30

2018

2019

2020

2021
(Target)(Year)

Vision & Future0

Detergents for Institutional Use
Review of 2020
sanitizers and alcohol sanitizers, grew significantly. Throughcooperation across the Lion Group, we carried out the
emergency development and launch of ethanol sanitizers
for institutional use. Overall, the category saw year-on-yearsales growth and helped boost the profitability of theIndustrial Products Business.

Strategy & BusinessIn 2020, the restaurant and hotel industries, which constitutekey customer bases in the detergents for institutional use
field, were heavily damaged by the COVID-19 pandemic.
While this had a major negative impact on our dishwasher
detergent and cleaning product businesses, demand forhygiene-related products, including hand soaps, handMarket Environment and Strategy

Lion Hygiene Co., Ltd.’s strength is its ability to propose
hygiene solutions that combine its specialized hygiene
management know-how with the Lion Group’s washingtechnologies. In the field of Infection Control, a growth
driver for the Lion Group going forward, we will leverageGroup synergies to reinforce our offerings and expand
our businesses.
Lion Hygiene Co., Ltd. (Japanese)
https://www.lionhygiene.co.jp/
Lion Integrated Report 2021 44

Performance

Among our wide array of customers, we are focusing
particular efforts on food processing plants and central

kitchens. While the restaurant industry has suffered in the
pandemic, the HMR industry is expected to remain steadygoing forward, reflecting demand created by increased timespent at home. We will work to expand into peripheral fields,
mainly in the areas of vegetable-washing detergents andsystems, including the Yasai Kirei MiBO vegetable-washingsystem, which is already in use at a major convenience store
chain’s food processing plants. In addition, we will focus on
increasing sales of hygiene-related products to nursing careand medical facilities.

Governance

Lion Hygiene Co., Ltd. is involved in the development andsale of products used in industrial facilities and food-service
industries, spanning the restaurant and home meal
replacement (HMR) industries, food processing plants,
medical and nursing care facilities, and hotel and cleaning
industries. In 2020, the business environment underwent
tremendous changes, making clearer than ever theimportance of the role of Lion Hygiene Co., Ltd., which seeks
to provide expertise in hygiene management. In 2021, it
remains extremely unclear when the COVID-19 pandemic willsubside and what the ultimate extent of market damage will
be. Nevertheless, we will provide corporate users of our
products with proprietary solutions centered on cleanlinessand hygiene to contribute to the solution of social issues,
and, aiming to become a core business in B to B areas foradvanced daily healthcare, we will reinforce user-oriented
product development and offerings.

Human Resource Development

By promoting professional fulfillment reforms,
diversity & open innovation,
we will transform to realize ongoing growth.

Yoko Koike
Executive Officer
Director of Human Resources Development Center

Approach to Human Resource Development
One of the growth strategies of Lion’s Vision2030 is“Generate dynamism to realize innovative change.” Under
this strategy, we aim to have all employees spurring one
another on in their respective growth processes andoperating as autonomous individuals in order to generate
waves of innovative change, that is, dynamism, across theorganization as a whole. From the perspective of humanresource development, encompassing hiring, training,
compensation and the fostering of healthy habits, we areworking not only to create employee-friendly workplaces, but
to instill a sense of professional fulfillment in every employee
in order to increase productivity and create new value.

Investment in
Human Resources
Human resource development­expenses per employee(With the 2018 level at 100)

Promotingthe Lion
Professional
Fulfillment
Reforms

120
100

100

101
80 *

80

The Human Resources Development Center, established in
2020, is charged with not only spreading awareness of the
management vision, but setting up operations for overseas
business expansion and enhancing a wide range of humanresource development measures in line with new work
styles. By advancing the Lion Professional Fulfillment
Reforms announced in July 2019 and promoting diversity,
we are providing support for the development of diverse
employee abilities and working to evolve the Group into acollective of human resources that will embody its purpose,“Make a difference in everyday lives by redesigning habits:
ReDesign.” In this way, we will continue to evolve to enableongoing growth.

60

Increased
productivity
Making fulluse ofdiverse talent

40
20
0

2018

2019

2020 (Year)* In 2020, spending fell due to the cancellation ofgroup programs, etc., caused by the COVID-19
pandemic. However, we effectively used the Lion
Career Village (LCV), launched in 2019, as ahuman resource development platform, offering
opportunities for online learning across a wide
range of domains.

45 Lion Integrated Report 2021

Promotingdiversity

New value
creation

Lion Professional Fulfillment Reforms
The COVID-19 pandemic has led to changes in work styles
and values for many employees. Even as the external
environment continues to change, the Human Resources
Development Center is striving to ensure that employees
can maintain their sense of professional fulfilment and findthe work styles that are best for them by implementing adiverse range of measures to improve environments andsystems under the framework of the Lion Professional
Fulfillment Reforms and thus address the needs created by
the conditions of the pandemic.

Our Path & DNA

Lion aims to ensure that each individual is able to take total
ownership of their role and exercise their abilities to thefullest. To this end, in 2019, we launched a new initiative,
the Lion Professional Fulfillment Reforms, focused onhealth, work styles and enabling diverse human resources
to succeed. The Lion Professional Fulfillment Reforms
comprise four initiatives: 1. Work management, 2. Workstyles, 3. Strengthen relationships and, as the foundation
supporting the first three, 4. Lion-style health support,“GENKI” Action.
LION Professional Fulfillment Reform Framework

Vision & Future

Fulfilling work
Able to grow as a professional and private individual andlead a fulfilling life
• Opportunities not bound by official
qualifications or roles•N ew promotion system•C areer design support•L ion Career Village•M ultifaceted evaluations of ability aking employee information•M
more accessible

1. Workmanagement
Make maximum use ofdiverse talent

2. Work styles
Change ways of working,with emphasis on
independence• New health data system• Preventive dentistry•C ountermeasures to three common
types of cancer• Reinforcing nonsmoking initiatives

Mutual understanding and respect• Intra-team management•K I DZ KI Meetings
 -on-1 Meetings•1
 utual appreciation and recognition•M•N ew side job system

Lion-style health support

4. “GENKI” Action

Promoting the Professional Participation andAdvancement of Women*1. Personnel holding managerial positions at the level of assistant manager or higher*2. Personnel holding managerial positions at the level of manager or higher

Other Initiatives
Diverse Human
Resources

InitiativeMid-career hires

Hiring mid-career individuals with the knowledge
and experience to contribute right away

Recruiting applicants
for side jobs at Lion

Bringing in new ideas by allowing individuals
with specialized expertise work side jobs at Lion

Global humanresources

Developing and utilizing global humanresources, including non-Japanese nationals, aspart of efforts to advance business globalization

People withdisabilities

Proactive hiring of people with disabilities

Lion Integrated Report 2021 46

Performance

Lion recognizes that the professional participation andadvancement of women is indispensable to the further
enhancement of corporate value and is implementing
measures to enable work styles that help employees
increase their productivity. Based on the Act on Promotionof Women's Participation and Advancement in the
Workplace, which came into full effect in 2016, Lion has
expanded systems related to childcare and implemented
support measures for working parents in order to allow

women to fully participate professionally over the long term.
Through a range of initiatives, we have increased the
proportion of female employees in Japan at the
management level*1 to 18.4% (2020). Looking toward 2030,
we aim to advance the professional development andpromotion of women on a Group-wide basis, targeting a rateof women in management*2 of at least 30%.

GovernanceDiversity
Lion aims to enable human resources with diverse values andideas to fully express their individuality and abilities andsucceed professionally, regardless of such factors as
nationality or gender. We are proactively creating opportunities
for the professional participation and advancement of
numerous non-Japanese nationals, mid-career hires andpeople with disabilities. We believe that this will provide theGroup with a more diverse range of opinions, perspectives
and insights, enhancing management decision making.

Strategy & Business3. Strengthen relationships• Permitting discretion in work styles(attire, time, place)• New work systems (full-flex, telecommuting,use of time off in hourly increments)• Moving the headquarters

Human Resource Development
1. Work Management (Make Maximum Use of Diverse Talent)
We are supporting the development of diverse talents and providing opportunities to utilize them via the two approaches
described below. We provide support for employees to grow by autonomously acquiring knowledge and experience in orderto realize the careers they have designed for themselves and have launched new initiatives, such as the side job system andmultifaceted evaluations of ability.
Career Planning Support
Lion’s career design support hotline offers consultations
about employees’ careers and provides information frominside and outside the Company to support employees inrealizing deliberate autonomy in the form of advancing theirown careers based on their own aspirations and actions.

Support for Self-Directed Learning Habits
During the COVID-19 pandemic, the Lion Career Village(LCV), introduced in 2019, has continued to play a major role
as a platform for autonomous learning that supports
employees’ independent efforts to develop their abilities.
Going forward, we will further develop the platform’s
functions and content and continue to support thedevelopment of employees’ individual abilities by such meansas hybrid learning involving online discussion-style programs.

Career design interview with a career consultant
Employees can access LCV from their computersor smartphones during spare moments

2. Work Styles (Change Ways of Working, with Emphasis on Independence)suited to individuals continues to take root, helping improve
professional fulfillment.

Rule Updates to Promote Independent Work Styles
In January 2021, we reinforced our telecommuting and fullflex systems (eliminating core time and enabling employees
to take discretionary off-the-clock breaks) in response toshifts in work styles due to the COVID-19 pandemic. This
shift toward more independent work styles that
accommodate diverse needs has resulted in a usage rate forthese systems of around 50%.* The practice of work styles

Furthermore, because it is difficult to enable production site
employees to freely set their own hours, we have established asystem for such employees to take time off in hourly increments.
This system makes it easier for employees to balance theirprivate lives and work, helping to bolster motivation.
* Excluding periods under state of emergency declarations related to COVID-19.

Example Schedules Using Systems for Working From Home,
Full-Flex Time and Discretionary Off-the-Clock Breaks

Net work hours(including a half day oftime off)

Example 1: 8 hours(Flexible time)
7:00

8:00

10:00

11:00
OfficeMorning off(8.5 hours)

1 hour

9:00

Workingfrom home Commuting

Example 2: 5 hours

Example 3:

Enabling diverse work styles!

Working from home

47 Lion Integrated Report 2021

12:00

13:00

Discretionary
off-the-clock
break

Lunch

14:00
Lunch

Off-site work

Discretionary off-the-clock break

15:00

16:00

OfficeDiscretionary
off-the-clock
break

17:00
Commuting

18:00

19:00

20:00

Working from home

Off-site work

DinnerWorking from home

Off-site
work

21:00

3. Strengthen Relationships (Mutual Understanding and Respect)

In 2020, we introduced a side job system aimed at better
enabling employees to utilize their diverse abilities to thefullest. We are both granting employees permission to workside jobs outside the Group and recruiting outside talent towork side jobs at Lion.
Expected Benefits• Employees will build relationships outside the Group andbroaden their horizons externally, enabling them to expand
the breadth of their careers and grow as individuals. They
will then be able to apply the experiences gained to theirwork at Lion.
• Lion will gain skills, knowledge and experience that it
lacks internally.

The foundation of professional fulfillment reform is health. We believe that empowering every
employee to maintain and improve their health while achieving personal growth andprofessional and personal fulfillment will serve to enhance corporate productivity
and thereby creativity and expand opportunities for Lion to contribute to society.
We are implementing Lion-style health support, “GENKI” Action, to raise
employees’ health awareness and promote the formation of healthy habits.

To encourage all employees
to practice better oral care
habits, Lion is implementing
a campaign to incentivize
employees to receive
professional care.

1. Building a new health data system: Supporting the formation of new healthy habits
through GENKI Navi
2. Fostering preventive dentistry habits: Supporting better oral care habits through the
combination of professional care and self-care
3. Reinforcing countermeasures for three common types of cancer*: Support for earlycancer detection and health improvement
4. Nonsmoking initiatives: Support for health through quitting smoking

Campaign details:
Lion provides employees withup to ¥2,000 to cover the
expenses of professional care
at a dental clinic (scaling andcleaning) received during the
campaign period.

* Lung, stomach and colon cancers

Strategy & Business

Four Key
Measures

Professional Care
Campaign

Vision & Future

4. Lion-Style Health Support—“GENKI” Action

Our Path & DNA

The shift to a primarily telecommuting model during the
COVID-19 pandemic has necessitated new approaches tocommunication between managers and their subordinatesand for contacts with customers. Using online tools, we aim
to create a more appealing organization—a collective ofhuman resources—based on mutual understanding andrespect among employees.

Internal Awareness and Behavior Survey Results

Going forward, we will use the survey results to implement
measures to further enhance employee motivationand satisfaction.

are able to practicea work style (useof systems, work
environment, etc.)that is right for you?

2019

73.1

2020

76.4

(Year)

0

40

60

80

100 (%)Yes

Q. Do you find yourwork fulfilling?

90.4

2019

92.3

2020
(Year)

0

40

60

80

100 (%)Yes

Q. Are you proud towork for the LionGroup?

95.4

2019

97.0

2020
(Year)

0

40

60

80

100 (%)* Survey scope: Approximately 4,400 domestic Lion Group officers and employees(regular employees, regionally based employees, employees
dispatched to affiliates, re-hired retirees, special employees andtemporary employees)* Survey period: September 1 to October 2, 2020

Lion Integrated Report 2021 48

Performance

In 2020, the COVID-19 pandemic forced unforeseen work
style changes upon Lion Group employees. Nevertheless, by
flexibly and effectively utilizing our systems, the Lion
Professional Fulfillment Reforms helped maintain andimprove employees’ feelings about their work styles andprofessional fulfillment, as shown by the survey results atright. Furthermore, perceptions that Lion products,
particularly hygiene-related products, were making a
difference in society led to employee pride.

Yes

Q. Do you feel that you

GovernanceOnce a year, we carry out the Employee Awareness andBehavior Survey of domestic Group employees to gather
data about whether each employee takes pride in their work
and in the Company and whether they feel a sense offulfillment and enthusiasm in their work.

Research and Development

We will foster innovation
as a growth engine aimed at“Becoming an advanced
daily healthcare company.”
Kosuke Tanaka
Executive Officer
Executive General Manager of Research andDevelopment Headquarters

The Mission, Next-Generation Policy and Strengths of the Research and Development Headquarters
The mission of the Research and Development
Headquarters is to continually innovate in order to achieve
the management vision of “Becoming an advanced daily
healthcare company.”
We believe that innovation is indispensable to meeting
diversifying consumer needs. Furthermore, innovation
requires more than groundbreaking new technologies—themost important element is the consumer’s perspective. The
links that Lion has to consumers through the many products
they use every day and Lion’s understanding of daily living are
its strengths. At the Research and Development
Headquarters, we are realizing novel combinations that bringinsights from our longstanding consumer research together
with our core technologies in the areas of oral care, life
science, interface science, cleaning technology andformulation technology, as well as cutting-edge technologies
from outside the Group, to provide new value.
Another role of the Research and Development Headquarters
is to provide consumers with useful information in a timely
and clear manner through various points of contact. By doing
so, we help consumers redesign their habits.

Going forward, as a hub for open innovation, the Researchand Development Headquarters will continually provide
new value to society and serve as a growth engine for theCompany as a whole, contributing to the realizationof Vision2030.

Generating innovation

Developing informationand communicating

Building research infrastructure
Next-Generation Policy Aimed at Realizing Vision2030

Framework for Growing Existing Businesses and Sparking Innovation
The Research and Development Headquarters is advancing
coordination with other parts of the Group with the aim ofcreating new value and improving efficiency in existing
businesses in order to achieve Group-wide targets. To
create new value, we have adopted idea generation
methods from outside the Group and systems for exploringand sharing as well as internal and external insights. We
began these initiatives at our Innovation Lab, established in
49 Lion Integrated Report 2021

2018, and are expanding them to other departments toreinforce support for ideation activities at our researchlaboratories. Furthermore, we are working with theconsumer research and public relations divisions toreinforce the communication of information useful forredesigning habits to increase the added value of Lion
products while enhancing the Group’s presence in existing
business fields to increase corporate value. To boost

Group companies to reinforce support for the developmentof products and local brands based on local needs acrossAsia through enhanced coordination. While reinforcing
intellectual property right protections, we are advancing
initiatives to create new businesses and new markets aimed
at delivering lifestyle innovations unique to the Lion Group.

Our Path & DNA

business efficiency, we are working with the productionengineering research departments to reduce costs andadvancing the development of product formulas andcontainers with the Sustainability Material Issues in mind. To
contribute to overseas business growth, we arecoordinating with the International Division and overseas

Initiatives Aimed at Achieving Vision2030

Research & Development
https://www.lion.co.jp/en/company/rd/

Strategy & Business

Focus

2. Reinforcing Initiatives in Cleanliness and Hygiene
through Open Innovation
We are also advancing initiatives to create new value in thefield of hygiene, an area in which society’s needs havegrown due to the novel coronavirus (COVID-19) pandemic.
Hygiene is a field in which we can offer value not only
through hand washing, but through diverse aspects of dailyliving, such as clothing care and oral care. Lion has wideranging business domains related to daily living habits;
leveraging this strength, we aim to reinforce collaboration
across product divisions to make unique value propositions.
Furthermore, by building relationships with academic andindustry organizations and start-ups, we are working tocatch up to needs in areas involving cutting-edge
technologies and advancing cooperation with outside
partners. Utilizing open innovation, we are working torapidly provide timely products, services and informationthat help customers form better hygiene habits.

Vision & Future

1. Leveraging Digital Technologies to Generate Innovation
To achieve Vision2030, in addition to further improving
efficiency in existing businesses and speeding up
development, we must secure the resources necessary toaccelerate efforts in the newly designated four fields of value
creation. As one initiative to this end, the Research andDevelopment Headquarters is advancing research in suchareas as automating experiment processes using robots,building efficient information gathering and insight sharing
systems, and using AI in product and formula development.
In addition to enhancing research efficiency, we areapplying digital technologies to develop new services. For
example, we have developed RePERO, a smart phone appthat allows the user to take a picture of their tongue toassess their risk of bad breath, and HAGUKI CHECKER,
which allows the user to check the state of their gums.
Furthermore, we are developing new value proposals basedon data science, and our research laboratories areconstantly producing new ideas for a wide range oftechnologies and services that utilize our proprietary oral
health data.

New Product Developed Based on Consumer Research
Governance

CLINICA Kid’s Hamigaki no Okeiko
Lion developed CLINICA Kid’s Hamigaki no Okeiko, an IoT toothbrush linked toan app that helps children learn the importance of tooth brushing and correctbrushing techniques in a fun way in order to form healthy tooth brushing habitsfrom a young age.

CLINICA Kid’s Hamigaki no Okeiko (Japanese)
https://clinica.lion.co.jp/hamigakino-okeiko/Lion Integrated Report 2021 50

Performance

In developing this product, we put particular emphasis on offering an experiencethat would encourage children to take the initiative themselves in tooth brushing.
Specifically, we ran trials in which children tried using prototypes for a day, a week or a month. This allowed us to identify
increasing motivation to brush one’s teeth, learning tooth brushing techniques and getting better at tooth brushing asimportant areas in which we could provide value through experience. With guidance from pediatric dentistry experts, wedeveloped a toothbrush attachment that contains an accelerometer to sense toothbrush motion as well as an app thatuses a picture book format to make it easy for children to understand the importance of tooth brushing and feel a clear
sense of satisfaction and progress. Through a development process prioritizing the consumer’s perspective, we arecontributing to the formation of healthy tooth brushing habits in childhood and thus making a difference in everyday lives.

Special Feature

Initiatives to Accelerate Innovation
Established the Business Development Center to Lead New Value Creation
As the business environment undergoes tremendous changes, ongoing corporate growth will require the continued growthof existing businesses in existing markets as well as the creation of new businesses. Lion is implementing a variety of
initiatives aimed at generating innovation, and in January 2020, we established the Business Development Center to more
quickly expand and evolve our businesses. The Business Development Center takes a cross-sectional, overarchingapproach to the three elements necessary for innovation, namely, customer experience development, business model
design and effective use of technology, to propose new living habits based on outstanding customer experiences andthereby transform existing businesses and lead efforts in and outside the Company to create new businesses.

Business Plan Creation
Researchand Development
Headquarters

Business creation
supportInnovation Lab
NOIL

New projects

Bodies within theBusiness
Development
CenterBrand reinforcement

Becoming
independent

Ideas and people

Existing businesses

Independent business

Quickly Commercialized Business: Gokinjo Cheftomo
In February 2021, Lion launched Gokinjo Cheftomo, aservice for reserving dinner take out, as a new business.
After being selected as a new idea through the NOIL newvalue creation program in December 2019, the service went
through commercialization study and testing to quickly
launch as a new business in just over a year.

Key Points!
• The employees who proposed the idea took ownershipof the project, working with bodies within the Business
Development Center to advance commercialization• T he project utilized the diverse perspectives, skills,
knowledge and experience of outside human resources
brought in via the side job system introduced in 2020

Place orders
on a weekly basis

51 Lion Integrated Report 2021

Gokinjo Cheftomo is a service by which users can reserve
dinner take out via an app for the days they need it on a
weekly basis. In addition to reducing the burden ofhousework, Gokinjo Cheftomo fosters the added value of
healthy eating habits and community connection,differentiating it from existing delivery services. The service
has been well received by both users and participating
restaurants, and the numbers of both are expanding. Goingforward, we will work to grow Gokinjo Cheftomo into abusiness that contributes to the formation of new housework
habits and value.
Gokinjo Cheftomo (Japanese)
https://www.gokinjyo-cheftomo.com/

Pick up food in the area
where you live

Balanced menu options

New Value Creation Program NOIL

What NOIL Looks For
Ideas that go beyond existing concepts in healthcare

Our Path & DNA

Ideas based on issues faced by consumers
Ideas that change conventional consumer values

Vision & Future

Since 2019, Lion has been operating NOIL, a program forselecting and implementing new business ideas with theaim of creating new value and businesses outside thebounds of existing business domains and conventional
wisdom. To date, the program has received more than 100
new business proposals, including some from new hires,
collecting ideas that reflect the diverse perspectives of
employees not only in R&D Division and Marketing Division,
but divisions across the Company, including those related
to sales and production. Ideas are selected through an
objective and rational evaluation process involving
management and outside venture capital funds, and theemployees that submit ideas for new products and services
selected through this process are transferred to theBusiness Development Center, where they can take acentral role in putting their ideas into action.

Key Points!
• O utside business development experts take part inbusiness idea evaluations

NOIL Evaluation in 2020

Strategy & Business• The employees who propose the ideas help advance theprocess toward commercialization

Research and Development Headquarters
Systems to Foster Ideation and Innovation

Such efforts to reinforce frameworks have led to theemergence of multiple research topics with the potential for
new business creation. These initiatives are also helping to
expand our researchers’ perspectives and increase theirmotivation, further developing an organizational culture ofambitiously taking on challenges.

Focus

Research Aimed at New Value Creation

In December 2020, Lion’s “easy-rinse toothpaste” submission was
selected as a candidate item for use aboard the International Space
Station (ISS) through a program operated by the Japan Aerospace
Exploration Agency (JAXA) to solicit ideas for solving living-related
challenges common to life both in space and on Earth.
We are currently advancing the development of an easy-rinse
toothpaste aimed at use aboard the ISS and considering research
into its applicability to address issues associated with living on
Earth, such as providing oral care opportunities in various
environments with limited water supply.
	New Release (Japanese)	https://lion-corp.s3.amazonaws.com/uploads/tmg_block_
page_image/file/7409/20201218_02.pdf

Lion Integrated Report 2021 52

Performance

In addition, we are implementing a new initiative to allow
researchers to use up to 15% of their work time on research
topics of their choosing. This research does not necessarily
have to tie directly into their other work and offers an
opportunity for researchers to pursue little ideas they are
curious to explore.

A workshop

Governance

The activities of the Innovation Lab, which has until now
been charged with new business development, have been
expanded to include the ideation reinforcement activities of
the Research and Development Headquarters in order tocreate a framework for generating innovation throughout theheadquarters. The Innovation Lab is providing support fortraining in design thinking and workshops for developing
new ideas and strengthening coordination with theBusiness Development Center to build functions that will
effectively nurture the nascent innovations that emerge
within the headquarters.

Supply Chain

Raw material
procurement

Production

Distribution

We Are Reinforcing Advanced,
Sustainable Systems to
Secure Competitive Advantage.
Shinichiro Hiraoka
Executive Officer
Executive General Manager of Supply Chain
Management Headquarters

Innovating the Foundations of the Supply Chain to Promote Growth
One of the three growth strategies under Vision2030 is to“Transform our business foundations for growth.” Within thisstrategy, we have identified the two tasks of digitaltransformation (DX) and reinforcing business infrastructure.
Lion has for some time been working to develop supply
chain management with a competitive edge, encompassing
resilient logistics and sustainable, stable raw material
procurement and product supply systems. Going forward,
we must continue these efforts while advancing efforts to
help achieve the SDGs and solve issues facing the logistics
industry, such as a shrinking labor force and dealing withnatural disasters and pandemics. Specifically, we must, 1. inmanagement, optimize distribution using DX and 2. inlogistics, forcefully advance the maximization of efficiency
by reinforcing and standardizing industry infrastructure
through industry-wide coordination. In particular, in light of
the need to flexibly respond to fluctuations in market supply
and demand, we will establish production facilities based on
evaluations of appropriate supply capacity and further
strengthen our ability to comprehensively adjust to changes
in market conditions, from procurement through to
production and sales.

Overview of Efforts to Transform Our Business Foundations for Growth

Digital transformation (DX)• Create new value by building digital infrastructure• Improve efficiency and speed through operationaltransformation• Enhance decision-making precision and speed with realtime business data

53 Lion Integrated Report 2021

Reinforce business infrastructure• Increase production capacity to support business growth• Develop core systems that will enhance the sophisticationof management•B uild a flexible, resilient and sustainable SCM platform• Build business foundations that are adaptable to new
business models

Raw material
procurement

Production

Distribution

Sustainable Raw Material Procurement

In order to ensure sustainable procurement, Lion isreinforcing coordination with materials producers andproduction contractors to realize more effective supply

We will continue to reinforce supplier management andpractice responsible procurement.

Main Initiative

Lion Supplier Sustainability Self-Check

Every year, we request that materials producers andproduction contractors carry out self-checks (using a survey
developed by Lion) based on the Lion Group Supplier CSR
Guidelines, which specify the sustainability initiatives we
expect from these partners

Supplier Ethical Data Exchange (Sedex)

Lion joined Sedex as an AB member at the end of 2019 inorder to further reduce social and environmental risk in its
purchasing.
We encourage our suppliers to join Sedex to reduce the burdenof self-checks and request that they use the platform provided
by Sedex to submit their annual self-check responses.

paper and other office supplies the Company purchases.
However, the supply chains for these raw materials often
contain environmental risks and human rights and labor
problems that impede sustainable development. As such,based on the Sustainable Raw Material Procurement
Policy, we are advancing the procurement of third partycertified products.

Goal for 2030

Palm andpalm kernel
oil derivatives

Procurement of RSPO*1certified oil derivatives

For all palm oil, palm kernel oil and their derivatives used in
the domestic Lion Group’s consumer products to meet thesustainability standards of third-party institutions by the endof 2030.

Pulp andpaper

Procurement of FSC*2certified paper

For all pulp and paper used in the domestic Lion Group’s
consumer products to meet the sustainability standards ofthird-party institutions or be sourced from recycled materials
by the end of 2030.

Initiatives in Which We Participate

RSPO

Performance

Main Initiatives

Governance

Procuring Sustainable Raw Materials
Lion uses derivatives of palm oil and palm kernel oil—plantbased raw materials that are inexhaustible and carbon
neutral—in many of its products, such as body washes,laundry detergents and dishwashing detergents. Pulp andpaper are used in the manufacture of Lion’s productpackaging, booklets and pamphlets as well as in the copy

Initiatives in Which We Participate

Strategy & Business

Monitoring Tool

Vision & Future

chain risk management. Lion’s Procurement Principles
clearly state its stance of considering legal compliance,
environmental conservation and respect for human rights
when selecting business partners. To help our suppliers
understand the importance of sustainability initiatives, we
require them to conduct self-checks based on the LionGroup Supplier CSR Guidelines and only do business with
suppliers that meet standards set according to our key
sustainability criteria.

Our Path & DNA

Promoting Sustainability with Materials Producers andProduction Contractors
The raw materials, such as palm oil and pulp and paper
products, that Lion uses in its businesses must be
harvested, processed and sold by their respective suppliers
before they reach the Company. If problems related to theenvironment, human rights or labor occur at any of thesestages, even if they are not directly related to Lion, Lion
could be held responsible.

*1. Roundtable on Sustainable Palm Oil*2. Forest Stewardship Council

Lion Integrated Report 2021 54

Supply Chain

Raw material
procurement

Production

Distribution

Stable, Continuous Product Supply
As a manufacturer and seller of daily commodities, Lion has
a significant responsibility to maintain a stable productsupply. During the novel coronavirus (COVID-19) pandemic,
we have, while ensuring employee safety, continued put theutmost priority on production.
The COVID-19 pandemic has caused an increase in ourcustomers’ hygiene awareness, in turn expanding demandfor hand soaps and other hygiene-related products.
Furthermore, demand in oral care, one of Lion’s mainstay
businesses, continues to expand, reflecting thediversification of customer needs and an increase in healthawareness in Japan as well as in the trust customers
overseas have in high-quality, made-in-Japan products.
In light of such changes in society, Lion is working to build
production and supply frameworks that are highly flexible
and resilient as well as sustainable to ensure the timely
supply of products that customers need.

Increasing Hand Soap Production Capacity
To respond to the sharp increase in hand soap demand in
2020, we bolstered the production capacity of our main
production site, the Lion Chemical Co., Ltd. Oleochemical
Production Site (LCCOC, located in Sakaide, Kagawa
Prefecture), expanded production at Lion Corporation(Thailand) Ltd. and other overseas Group companies andrapidly formed new agreements with production
contractors, doubling supply year on year. Going forward,
we will continue to reinforce production and supply to meetgrowing demand.

New Toothpaste Factory
We also built a new toothpaste factory within LCCOC. Thisfactory will begin operation in 2021, bringing Lion’s
production capacity to 1.7 times its previous level.
Furthermore, Dai Nippon Printing Co., Ltd. has built aneighboring factory to produce laminated toothpaste tubes,
enabling end-to-end toothpaste production and further
increasing productivity.

Reducing Environmental Impact
We have installed solar panels on the roof of the employee
facility building of LCCOC as part of efforts to utilize
renewable energy and reduce net energy use. We continue
to replace equipment in the other buildings with powersaving models and aim to eventually create a system thatallows the energy use of facilities throughout the plant to bemonitored from any business site.
Rooftop solar
panelsToothpaste plant

Laminated tube plant

Employee facility
building

New toothpaste factory (Sakaide)

Solar panels on the roof of the employee facility building

Leveraging Digital Technology to Boost Productivity
and Speed
Lion is advancing the automation of a wide range of
production processes using robotics and other technologies.
In the four years ended 2020, these efforts eliminated theneed for approximately 200 front-line employees, helping toalleviate personnel shortages and reduce fixedmanufacturing expenses. Going forward, we will leverage
digital technologies to also improve the efficiency ofadministrative operations as we seek to build even more
efficient production frameworks.

Automated detergent refill pack supply

55 Lion Integrated Report 2021

Raw material
procurement

Production

Distribution

Working Toward Sustainable Logistics

Kao products

Kao Sakaide
Logistics Center

KaoTokushima Harbor
pr
od
uc
ts

Through these initiatives, we aim to improve work
environments, improve labor productivity and reduce
environmental burden while building sustainable, resilient
supply chains.

Tokyo
HarborGovernance② Kao Sakaide Logistics Center→Lion Chemical Sakaide Factory(Empty running: 10km, 20 minutes) ③ Lion Chemical
Sakaide Factory
Lion Chemical→ Lion logistics centers
Sakaide Lio
Kazo/Kashiwa/Sagamihara
np
Factoryro(Unmanned transportation
ducts
from Tokushima Harborto Tokyo Harbor)

Lion products

Kao Kawasaki Plant

ucts
prod
Lion

Logistics EDI

s ① Kao Kawasaki Plant
roduct→ Kao Sakaide Logistics Center
Kao p

nned
Unma rtation
po
trans

(Unmanned transportation from
Tokyo Harbor to Tokushima Harbor)

Map source: Geospatial Information Authority of Japan website (Japanese)(https://mapps.gsi.go.jp/)

Kao and Lion’s collaborative smart logistics initiative

Strategy & Business

Lion logistics centers
Kazo/Kashiwa/Sagamihara

Furthermore, in the field of logistics data platforms, Lion istaking a leading role in solving logistics challenges facing thehousehold consumer product industry. Lion collaborated
with PLANET, INC., which operates a commercial logistics
electronic data interchange (EDI) for the industry, in the
preparation of its report outlining logistics EDIs in February
2020. Furthermore, Lion has carried out demonstrations of
the use of advanced shipping notices (ASNs) to digitize
receipts and simplify inspections, and is rolling out the use of
ASNs sent to wholesalers for individual delivery trucks.
Going forward, we aim to promote collaboration between
manufacturers, wholesalers and logistics operators toadvance the digitization of data and the standardization ofprocesses related to on-the-ground logistics in order to build
a logistics EDI for the entire industry.

Vision & Future

Lion is taking part in efforts aimed at demonstration testingand practical implementation of “smart logistics services”(for household consumer products) being carried out under
the Strategic Innovation Promotion Program (SIP) led by
Japan’s Cabinet Office with the aim of establishing newlogistics platforms. As part of these efforts, in October
2020, Lion and Kao Corporation commenced regular joint
two-way transportation between their respective operatingsites. Specifically, this initiative links Kao’s transportation
operations connecting its Kawasaki Plant (Kanagawa
Prefecture) and Sakaide Logistics Center (Kagawa
Prefecture) with Lion’s transportation operations connecting
the Lion Chemical Corporation Sakaide Factory (Kagawa
Prefecture) and Lion’s logistics centers in Kazo (Saitama
Prefecture), Kashiwa (Chiba prefecture) and Sagamihara(Kanagawa Prefecture) to realize two-way marine trailertransportation. This initiative is aimed at improving theefficiency and reducing the CO2 emissions of long-distancetransport. Through it, the two companies are expected toachieve a combined 45% reduction in CO2 emissions and
23% reduction in transport expenses.

In addition, Lion has built and launched a scheme forround-trip transport between the Kanto and Chukyo regions
using swap body trucks in collaboration with manufacturers
in other industries, such as processed foods andconfectionaries. By doing so, the companies involved havedecreased the number of trucks used by 34% and cut
CO2 emissions by 43%. This initiative received the Award of
the METI Director-General for Commerce and Service
Industry Policy under the Excellent Green Logistics
Commendation Program of the fiscal 2020 Green Logistics
Partnership Conference.

Our Path & DNA

The logistics industry continues to face numerous
challenges, such as alleviating the long working hours
required of drivers and driver shortages as well as reducing
environmental burden. Such challenges are far too great for
any one company to tackle alone and will require a wide
range of entities to work together, sharing diverse expertise
within and across industries.

Manufacturer

Wholesaler

Advance and implement logistics EDI
Effectively utilize logistics resources and improve logistics ­efficiency
through improved accessibility of logistics data and mutual collaboration• Reduce standby times

Improved laborproductivity

 educedRenvironmental burden• Eliminate inspections• Reduce CO2 emissions• Paperless•R educe paper use•S ave pallet management work
• Increase loads and loaded
running rate

Smart logistics (logistics EDI)

Lion Integrated Report 2021 56

Performance

Expected effects
Improved work
environments

Financial Strategy

To realize sustainable growth,
we are promoting management withgreater consciousness of capital efficiency andcash flows while maintaining a stable financial base.
Takeo Sakakibara
Director
Senior Executive Officer

Basic Approach to Financial Management
The Lion Group believes that improving capital efficiency
and profitability is crucial to maintaining a sound financialbase that enables sustainable growth. Over the past 10
years, we have worked to improve profitability with respect
to shareholders’ equity, primarily by shifting toward higheradded-value products and pursuing lower costs to boost
profit. As a result, compared with 2011, core operating
income has more than tripled (from ¥11.1 billion to ¥35.9
billion), and return on equity (ROE) has improved from 4.0%
to 13.6%. The task we face in the coming decade under the
Vision2030 long-term strategic framework is to increase ourpresence in Asia, and I believe that maintaining profitability
while expanding our business through top-line growth will
be of the utmost importance. To that end, we prudently
invest profits to enhance business foundations (such as
production facilities, systems infrastructure and R&D
technologies) in order to contribute to business growth.

In light of these goals, in addition to ROE, which measures
profitability against shareholders’ equity, we will use as key
indicators return on invested capital (ROIC), an indicator of
the profitability and efficiency of capital invested in businessactivities, as well as earnings before interest, taxes,
depreciation and amortization (EBITDA), an indicator of
profitability on a cash-flow basis.
We will use ROIC, in particular, not just for the Company as
a whole, but as a key performance indicator (KPI) for
evaluating individual businesses and their constituent
elements at their respective organizational levels. By
keeping ROIC consistently above the weighted average costof capital (WACC) and increasing EBITDA, we will advancefinancial management that enhances corporate value.

Financial Results(Billions of yen)
450
400
350

327.5

200

352.0

335.1

300
250

IFRS

Japanese GAAP

4.0

4.0

3.4

2.2

2011

2012

Net sales (left scale)

5.4

367.3

378.6
8.5

395.6
11.2

6.2
3.4

6.2

4.3

410.4
12.2
6.6

12.7
342.7
8.4

13.6

13.9
349.4
8.1

10.3
10.1
8.6
355.3
347.5

9
6

0

2014

2015

Ratio of core operating income to net sales*/

2016

2017

2017

2018

2019

ROE (right scale)* Effective from the fiscal year ended December 31, 2018, the Lion Group has voluntarily adopted International Financial Reporting Standards (IFRS).
* Ratio of operating income to net sales under Japanese GAAP.

57 Lion Integrated Report 2021

12

3

3.1
2013

(%)
15

2020 (Year)In terms of capital, we will first increase cash on hand in order
to flexibly respond to demand for investment in growth andoperating capital, with a basic approach of securing funding
for investments necessary to sustain growth over the
medium and long terms and maintaining financial soundness.
Capital Expenditures and Depreciation and Amortization(Billions of yen)
50

Depreciation and amortization

Capital expenditures

47.5

40

35.5
Vision & Future

We are currently examining multiple opportunities foracquiring outside resources for business expansion(namely, M&A). Our main targets are 1. brands andbusinesses that offer strong potential synergies with ourexisting businesses in and outside Japan and 2. businessfoundations in new areas overseas. We will evaluate theappropriateness and priority of each such investment basedon its expected cash flows and certain hurdle rates,considering net present value (NPV), internal rate of return(IRR) and the period required to earn back the investment.

Furthermore, after making an investment, we will regularly
evaluate and verify whether it is yielding the expected results.
Our Path & DNA

Approaches to Investment Under Vision2030
Under Vision2030, aiming particularly to reinforce growth inand outside Japan, we are taking three approaches toinvestment. The first is investment in increasing production
capacity and labor saving; the second is investment inreinforcing business foundations (digitization, information
systems, etc.) in and outside Japan; and the third is investment
to acquire outside resources for business expansion.

30.8

30

23.6
20
10
0

14.9 16.6
9.4 9.4

9.4

5.6
3.8

7.2

5.5

14.3

9.3

10.2 9.3 8.8 10.5 11.7
5.1

16.7

5.1

2016 2017 2018 2019 2020 2021

(Forecast)January–June

4.1
5.2

4.5
4.3

5.5

6.2

4.9

5.5

13.5

2016 2017 2018 2019 2020 2021

(Year)(Forecast)July–December*B oth capital expenditures and depreciation and amortization include intangible assets.

Dividends per Share
(Yen)
30

Japanese GAAP

25

23.6

29.7
24.9

23.7

20
15

（%）
30

IFRS

17

17

10

10

5

7

7

2016

2017

2017

13

10

22.7
20
10

24

23
21

22.4

11

0

15
10

8
5

20

12

12

25

10

10

11

12

2018

2019

2020

2021 (Year)50(Forecast)Interim dividend/Year-end dividend (left scale)
Consolidated payout ratio (right scale)

Stocks in Strategic Shareholdings (Consolidated Statement of Financial Position Basis)(Stocks)
100

95

80

76

75

71

60

51

40
20
0

2016

2017

2018

2019

2020 (Year)

Lion Integrated Report 2021 58

Performance

Strategic Shareholdings
Lion holds strategic shares of other companies only when it
has judged that they are strategically important for such
purposes as maintaining and strengthening traderelationships. The Board of Directors examines the
economic rationality of strategic shareholdings on an annual
basis, checking the investment profitability, capital cost andother factors for each stockholding. Based on the results ofthese examinations and such factors as the importance ofthe relevant trade relationships, shareholdings determined
to be unnecessary are then sold as appropriate, reducing
Lion’s strategic shareholdings.

Governance

Lion allocates inter nal reserves to research anddevelopment, capital investment in production facilities andthe acquisition of external resources, aiming to reinforce theCompany’s growth potential and to develop a sustainablebusiness foundation.

Strategy & Business

Policy on Dividends
The Lion Group considers returning profits to shareholders
on a continuous and stable basis by bolstering its
profitability to be one of its most important management
issues. To this end, the Company strives to ensure thepayment of continuous and stable cash dividends, aiming
for a consolidated payout ratio of 30%, and bases theacquisition of treasury stock on comprehensive reviews toensure that it maintains the levels of internal reserves
required to secure medium- and long-term growth.

Corporate Governance
Basic Approach

Initiatives to Enhance Management Auditing and Supervision

The Lion Group’s top priorities forcorporate governance are to increase
management transparency, strengthen­supervisory functions, accelerate decision
making and ensure compliance. By
strengthening and enhancing its­corporate ­governance system, Lion aims
to increase its corporate value.

2003

2004

2006

2010

2016
Established the Basic Corporate Governance Policy
Established the Nomination Advisory Committee
Began evaluations of the Board of Directors
Established the Independent Officer System

Established the Compensation Advisory Committee
Established the External Director System
Established the Executive Officer System
Established the Management Evaluation Committee(now the Advisory Committee)

Corporate Governance System
Organizational Structure
Lion is a company with an Audit & Supervisory Board as definedin the Companies Act, with a system of corporate governance inwhich the Board of Directors provides ­adequate oversight ofmanagement while independently operating Audit & Supervisory
Board members provide appropriate auditing. To reinforce theBoard of Directors’ management oversight function and speed
decision making, Lion has adopted an executive officer system.
In addition, to increase management transparency and further

enhance corporate governance, Lion has established a
Nomination Advisory Committee and Compensation Advisory
Committee comprising mainly external directors and external
Audit & Supervisory Board members.
In addition, to reflect the opinions and advice of third parties withregard to legal compliance and management policies, we have
set up an Advisory Committee consisting of external experts.

Shareholders Meeting
Nomination
Advisory Committee

Response
Consultation
Response

Board of Directors
Supervision of management
 Decisions on execution of importantmanagement matters Supervision of directors’ executive performance Supervision of executive officers

Reporting

Audit & Supervisory Board
Members

Auditing

Monitoring

Legality audits
Operational audits

Auditing

ReportingOpinions and advice
on legal compliance

Delegation

Auditing

Advisory Committee
ReportingInternal control of financial reporting

Proposals

Executive Committee
Execution of operations

Senior Executive Committee
Basic policies for medium-to long-term
management plans and other major
corporate strategies

Reporting

Legality, fairness and efficiency
audits; compliance progress audits

Departments
Execution of operations
Business divisions, Production Headquarters,
R&D Headquarters and operating divisions

Auditing

Strengthening of legal compliance and ethics

Corporate Ethics Committee
Lion Group Charter for Corporate Behavior; Behavioral Guidelines

59 Lion Integrated Report 2021

Auditing Office

AdviceAccounting Auditors

Compensation
Advisory Committee

Consultation

Board of Directors
External

Internal

External

External

Audit & Supervisory Board Members and Audit &Supervisory Board
There are five Audit & Supervisory Board members, three ofwhom are external Audit & Supervisory Board members(independent Audit & Supervisory Board members) and two ofwhom are standing Audit & Supervisory Board members fromwithin the Company. Two of the external Audit & Supervisory
Board members and one of the standing Audit & Supervisory
Board members possesses knowledge regarding finance andaccounting. In addition, one dedicated staff person isdesignated to assist the Audit & Supervisory Board members.
The Audit & Supervisory Board regularly meets once every twomonths and holds extraordinary meetings as necessary.
Each Audit & Supervisory Board member attends meetings ofthe Board of Directors and other important meetings, conducts
interviews with directors regarding the status of the executionof their duties (including the status of the execution of theduties of directors pertaining to the development and operationof internal control over financial reporting), performs site visits
to Lion’s headquarters and major offices and plants, andconducts audits of subsidiaries in accordance with the Audit &Supervisory Board members’ standards, audit policy, audit
plans and other stipulations of the Audit & Supervisory Board.
The Audit & Supervisory Board exchanges information,
opinions and views from a risk approach standpoint andfacilitates coordination upon receiving audit reports fromaccounting auditors and from the Auditing Office, which is theCompany’s internal auditing division. Moreover, regularmeetings to exchange information, opinions and views are
conducted with the representative directors three times a year.

Strategy & Business

Nomination Advisory Committee
Internal

Advisory Committee

Vision & Future

Nomination Advisory Committee
The Board of Directors consults the Nomination Advisory
Committee regarding the necessary qualities, reasons forselection or dismissal and related processes for nominating
directors, Audit & Supervisory Board members and executive
officers as well as for hiring individuals who have previously
served in these roles as consultants. The committee considers
the matters in question and provides a response to the Board of
Directors (or, for matters regarding Audit & Supervisory Board
members, to the Audit & Supervisory Board). The committee
also exchanges opinions on the development of future Group
presidents. The committee comprises external directors andexternal Audit & Supervisory Board members as well as arepresentative director designated by the chairman of the Boardof Directors. The members of the committee select from among
themselves the committee chairperson, who must be an
external director or external Audit & Supervisory Board member.

committee considers the appropriateness and other aspects ofLion’s management policies and measures. The committee
serves to reflect objective opinions from a wide range ofperspectives in management. In principle, the committee meets
twice a year. The chairperson of the Board of Directors reports asummary of the committee’s advice to the Board of Directors.
Our Path & DNA

Directors, Board of Directors and Executive Committee, etc.
The Board of Directors is composed of 11 directors. The Board of
Directors regularly meets once a month and holds extraordinary
meetings as necessary. In addition to matters stipulated by laws
and regulations or the Articles of Incorporation, the board
determines important matters related to the business execution of
the Company and supervises the business execution of directors
and executive officers. Also, in addition to at the regular Board of
Directors’ meetings, resolutions of the Board of Directors may bemade in writing in accordance with laws and regulations. For
important corporate strategies such as the basic policies of
medium- to long-term management plans, a system isestablished that enables the Board of Directors to makeappropriate decisions upon deliberation by the Senior Executive
Committee. Additionally, the Executive Committee has a system
in place to discuss and examine, from various angles, measuresrelated to job execution that directly impact businesses.

Audit & Supervisory Boards

External

Advisory Committee
The Advisory Committee comprises outside experts other thanthe external directors and external Audit & Supervisory Board
members who possess extensive knowledge and insight. The

Accounting Audits
Lion has formed an audit agreement with Ernst & Young
ShinNihon LLC, based on which the latter provides accounting
audits as well as audits of Lion’s internal control reports based on
the Companies Act and Financial Instruments and Exchange Act.
Internal Audits
The Auditing Office implements audits across the Lion Group,
examining operations from the perspectives of legality, fairness,
efficiency and risk management in order to establish afoundation for sound business activities. The Auditing Officeexchanges information closely with the Audit & Supervisory
Board Members, striving to reinforce coordination. Audit results
and the status of improvements are regularly reported to the
President, directors with related responsibilities and the
Executive Committee. A summary of the audit results is reported
to the Board of Directors twice a year.
Lion Integrated Report 2021 60

Performance

Compensation Advisory Committee

External
GovernanceCompensation Advisory Committee
The Board of Directors consults the Compensation Advisory
Committee regarding such matters as the compensation
system, compensation levels and bonus calculation methods
for directors and Audit & Supervisory Board members. The
committee considers the matters in question and provides a
response to the Board of Directors (or, for matters regarding
Audit & Supervisory Board members, to the Audit &Supervisory Board). The committee comprises external
directors and external Audit & Supervisory Board members.
The members of the committee select from among themselves
the committee chairperson.

InternalCorporate GovernanceEvaluations of the Board of Directors
To ensure its effectiveness, every fiscal year the directors
evaluate the operating methods of the Board of Directors andthe content and status of the proposals it considers, among
other factors. This evaluation includes examinations of eachdirector. A summary of the results of the evaluation is disclosed
in the Corporate Governance Report.
Fiscal 2020 Evaluation Results Summary• The number of persons on Lion’s Board of Directors, including thenumber and proportion of external directors, is sufficient for
deliberations. Board members have the knowledge, experience,capabilities and diversity necessary to enhance corporate value.
• T he meeting frequency as well as the number of agenda items
considered and amount of time allowed for deliberation by the Boardof Directors are appropriate. The deliberations comprise open,
constructive debate that does not hinder risk taking

To date, evaluations of the board’s effectiveness have uncovered
certain issues. While Lion has achieved a measure of successwith initiatives aimed at addressing each of these issues, as
described below, the Company recognizes that there is stillroom for improvement. Looking ahead, Lion will continue to
implement necessary measures and make efforts to further
enhance the effectiveness of the Board of Directors.
Issues Identified and Initiatives to Address Them
Issues• External directors and Audit & Supervisory Board members
should be provided with more extensive information regarding
the background and context of important agenda items.
• Discussions of management strategy should be enhanced tofurther increase corporate value.

Initiatives• We are taking steps to enhance the information provided andfacilitate understanding regarding such matters as the
background, objective and content of agenda items. These
steps include having officers from the divisions that propose
such items participate, as needed, in pre-meeting briefings forexternal directors and Audit & Supervisory Board members
conducted by the secretariat of the Board of Directors.
• We provide opportunities to discuss Lion’s purpose, management
vision, medium- to long-term strategy and important agenda
items prior to meetings of the Board of Directors.

Accordingly, the effectiveness of Lion’s Board of Directors wasdeemed sufficient.

Reasons for Appointment of External Directors and External Audit & Supervisory Board Members

External Audit & Supervisory
Board Members

External Directors

Name

Reasons for Appointment

Fiscal 2020 Meeting Attendance
Board of Directors

Audit & Supervisory
Board

Kazunari Uchida

Kazunari Uchida possesses experience as the Japan representative of an international management
consulting group in addition to experience at other companies both as an external director and an external
Audit & Supervisory Board member. He has actively participated in meetings of the Board of Directors andsuitably carried out his role as an external director of the Company, including supervising business execution.
The Company judges that his sophisticated understanding of management decision making is necessary toenhance the transparency of management and strengthen the oversight of the Board of Directors.

17 of 17—

Takashi Shiraishi

Takashi Shiraishi has managerial experience as the president of a national university, has served as thepresident of the Japan External Trade Organization’s Institute of Developing Economies and possesses
broad-ranging expert knowledge in such areas as Asian politics, economics and social issues. He has
actively participated in meetings of the Board of Directors and suitably carried out his role as an external
director of the Company, including supervising business execution. The Company judges that his
sophisticated understanding of management decision making is necessary to enhance the transparencyof management and strengthen the oversight of the Board of Directors.

17 of 17—

Takako Sugaya

Takako Sugaya is not involved in corporate management outside the roles of external director and external
Audit & Supervisory Board member, but she possesses a wealth of knowledge and experience as an
attorney, mainly in corporate legal work, as well as experience as an external director and external Audit &Supervisory Board member at other companies. She has suitably carried out her role as an external
director of the Company, including supervising business execution. The Company judges that her
sophisticated understanding of governance and compliance issues is necessary to enhance thetransparency of management and strengthen the oversight of the Board of Directors.

17 of 17—

Reiko Yasue

In addition to having corporate management experience as the CEO of an IT company in Japan, Reiko
Yasue possesses a wealth of knowledge and experience in international business as well as experience
serving as an external director at another company. The Company judges that her sophisticated insight
into the field of IT is necessary to enhance the transparency of management and strengthen the oversightof the Board of Directors.

——

Takao Yamaguchi

Takao Yamaguchi is not involved in corporate management outside the roles of external director andexternal Audit & Supervisory Board member. However, he has cultivated a knowledge of accounting andtaxes over his many years as a certified public accountant and certified tax accountant and has
experience working as an external Audit & Supervisory Board member at other companies. The Company
judges that his insight is necessary to enhance the efficacy of its auditing.

16 of 17

15 of 15

Setsuko Takemoto

Setsuko Takemoto is not involved in corporate management either as a director or Audit & Supervisory
Board member. However, she has cultivated a knowledge of accounting and taxes over her many years
as a certified tax accountant and has experience working in key positions in a government agency. The
Company judges that her insight is necessary to enhance the efficacy of its auditing.

17 of 17

15 of 15

Atsuko Suzuki

Atsuko Suzuki is not involved in corporate management outside the role of external director and external
Audit & Supervisory Board member, but she possesses experience as external director at othercompanies as well as many years of experience in preparing corporate governance frameworks anddrafting and promoting strategies for sustainability. The Company judges that her understanding of theseareas is necessary to enhance the efficacy of its auditing.

——* Because Reiko Yasue and Atsuko Suzuki were newly appointed in March 2021, their meeting attendance in fiscal 2020 is omitted.

61 Lion Integrated Report 2021

Messages from the Newly Appointed External Director and Audit & Supervisory Board Member

Our Path & DNA

External Director

Reiko Yasue

I worked for many years in software development and communications, andam now representative director of a company that provides simulation
software. Besides Japan, my career has taken me to many countries, and I
am currently based in the United States.

Vision & Future

Lion’s growth over the past decade has been extraordinary. I feel that this is
the result of its implementing management strategy in line with changing
needs while, throughout its 130-year history, holding steadfast to its
corporate motto—“Lion Corporation positions ‘Fulfilling a Spirit of Love’ as
fundamental to its management, and thus contributes to the enrichment of
the happiness and lives of people.” The way that Lion has clearly laid out its
management vision for 2030, “Becoming an advanced daily healthcarecompany,” also sends the strong message that Lion will provide cuttingedge products to bring love to consumers’ lives by understanding evolving
needs as the world works toward greater sustainability.

External Audit & Supervisory
Board Member

Strategy & Business

I will leverage my three decades of experience in the ICT field to contributeto Lion’s growth, particularly in the areas of overseas businesses and digitaltransformation (DX)—as significant a task for companies going forward
as sustainability.

Atsuko Suzuki

Governance

As an Audit & Supervisory Board member, I will do my utmost to coordinate
effectively with the other board members, the Auditing Office and theaccounting auditors to ensure sound management. In particular, I see
applying an outside perspective to comprehending changes in the broadersocial environment and reflecting them in auditing in a timely manner as animportant aspect of my role.
For example, in recent years, proactively incorporating environmental, socialand governance (ESG) considerations into business activities and making
sustainability a management value in order to realize medium- to long-termbusiness growth and better enhance corporate value has become apressing concern. I hope to provide new perspectives, both on risks andopportunities, to facilitate the smooth creation of new value in such areas.

Performance

In addition, it is vital to remember that Lion has a clearly defined purpose,
which is a great strength: “Make a difference in everyday lives by redesigning
habits: Redesign.” This is significant and laudable in that it promotes ashared understanding of the Company’s purpose in society among all
employees, thereby supporting Lion’s stance of always striving to provide
high-quality, safe and reliable products while creating corporate value overthe long term. I will do my part to ensure that Lion can continue to live up tosociety’s expectations.

Lion Integrated Report 2021 62

Corporate Governance	Leadership Teamhttps://www.lion.co.jp/en/company/officer/

Directors, Audit & Supervisory Board Members and Executive Officers (As of April 1, 2021)

April 1977
January 2008
March 2008
January 2012
January 2019

April 1987
January 2009
January 2010
March 2012

Representative Director,
Chairman of theBoard of Directors

Representative Director,
President andExecutive Officer

ITSUO HAMAMASAZUMI KIKUKAWA

Chief Executive Officer

Chief Operating Officer

Joined Lion Fat & Oil Co., Ltd. (now Lion Corporation)
Executive Officer
Director
Representative Director, President,
Representative Director, Chairman of the Board of Directors

Joined Lion Corporation
Executive Officer
Director
Representative Director
Representative Director, President and Executive Officer

Director
Senior Executive Officer

Director
Senior Executive Officer

Director
Senior Executive Officer

KENJIRO KOBAYASHITAKEO SAKAKIBARAYUGO KUME

Joined Lion Corporation
Executive Officer
Senior Executive Officer
Director

Responsible for Corporate Ethics, Human Resources Development Center,
General Affairs Department, Secretary Department,
Sustainability Promotion Department, System Department
and Business Process Re-engineering Department

April 1988
January 2016
March 2019

April 1984
January 2010
March 2012
March 2018
January 2019

April 1983
January 2010
March 2016

Joined Lion Corporation
Executive Officer
Director

Responsible for Risk Management, Corporate Planning Department,
Finance Department, Consumer Service Center,
Reliability Assurance Department and Legal Department

Director
Executive Officer

Director

FUMITOMO NORITAKEHITOSHI SUZUKI

Joined Lion Corporation
Executive Officer
Director

Responsible for Supply Chain Management Headquarters, Production
Engineering Research Headquarters, Purchasing
Headquarters, Research and Development Headquarters,
Production Headquarters, Overall Chemicals Businesses,
DX Promotion Department, Intellectual Property
Department and Safety and Disaster Prevention
Department

April 1984
January 2016
March 2018

Joined Lion Corporation
Executive Officer
Director

Responsible for Business Development Center, Health & Home Care
Products Division, Gift and Channel-Specific Products
Division, Direct Marketing Division and Corporate
Communication Center

Executive Officer

April 1985
January 2016
March 2019
March 2021

Joined Lion Corporation
Executive Officer
Senior Executive Officer
Director

Responsible for International Division* Responsibilities listed above are as of April 1, 2021.

Senior Executive Officer

Executive Officer

Executive Officer

Masaharu Mikuni

Hiroyuki Chiba

Jiro Nagasawa

Executive General Manager of Health and Home Care
Products Sales Division;
Responsible for Distribution Policy Department

Executive General Manager of Purchasing Headquarters

Executive General Manager of Gift and Channel-Specific
Products Division

Executive Officer

Tomomichi Okano
President of Lion Chemical Corporation

63 Lion Integrated Report 2021

Executive Officer

Shinichiro Hiraoka
Executive General Manager of Supply Chain Management
Headquarters

Executive Officer

Kengo Fukuda
President of Lion Hygiene Co. Ltd.

Note: Notification of the appointment of Mr. Kazunari Uchida, Mr. Takashi Shiraishi, Ms. Takako Sugaya, Ms. Reiko Yasue, Mr. Takao Yamaguchi, Ms. Setsuko Takemoto and
Ms. Atsuko Suzuki as independent directors and Audit & Supervisory Board members has been sent to the Tokyo Stock Exchange.

April 2006
February 2012
June 2012
August 2012
March 2016

External Director

External Director

KAZUNARI UCHIDATAKASHI SHIRAISHI

TAKAKO SUGAYA

University professor

University professor

Attorney at Law

Joined Boston Consulting Group
Representative for Japan, Boston Consulting Group
External Auditor, Suntory Limited (now Suntory
Holdings Limited)
Professor, Faculty of Commerce, Waseda University­(current position)
External Auditor, Kewpie Corporation
External Director, Lifenet Insurance Company
External Director, Mitsui-Soko Holdings Co., Ltd
External Director, Japan ERI Co., Ltd. (now ERI Holdings
Co., Ltd.)
External Director, Lion Corporation (current position)

June 1979

October 2002

June 2018
March 2019

Registered as an attorney at law (Daini Tokyo Bar
Association)
Joined Yamada Hideo Law Office (now the Yamada Ozaki
Law Office) (current position)
External Director, Haruyama Holdings, Inc.
External Director, Lion Corporation (current position)

Vision & Future

Assistant Professor, International Relations, Department of
Humanities and Social Science, College of Arts andSciences, University of Tokyo
January 1996 Professor, Department of Asian Studies and Department ofHistory, College of Arts and Sciences, Cornell University
July 1996
Professor, Center for Southeast Asian Studies, Kyoto University
April 2005
Professor and Vice President, National Graduate Institute for
Policy Studies
May 2007
President, Institute of Developing Economies, Japan
External Trade Organization
January 2009 Councilor, Council for Science, Technology and Innovation,
Cabinet Office
April 2011
President, National Graduate Institute for Policy Studies
January 2013 Member, Management Evaluation Committee (now theAdvisory Committee), Lion Corporation
March 2017 External Director, Lion Corporation (current position)
Special Visiting Professor, Ritsumeikan University
April 2017
May 2017
Professor Emeritus, National Graduate Institute for Policy
Studies (current position)
April 2018
Chancellor, Prefectural University of Kumamoto­(current position)

External Director

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

REIKO YASUETOSHIYUKI NIKKAWA

YOSHIAKI KAMAO

Joined Nagoya Research Institute, Panasonic Information
Systems Co., Ltd. (now Panasonic Advanced Technology
Development Co., Ltd.)
December 1999 Joined Motorola, Inc.
June 2004
Joined SEVEN Networks, Inc.
September 2005 Joined Qualcomm, Inc.
July 2009
Joined FUJISOFT Inc.
Managing Executive Officer, FUJISOFT Inc.
April 2015
January 2018
Joined Cybernet Systems Co., Ltd., Executive Vice President
March 2018
Representative Director, Executive Vice President,
Cybernet Systems Co., Ltd.
Representative Director, President & CEO,March 2019
Cybernet Systems Co., Ltd.
January 2020
Representative Director, President and Executive Officer,
Cybernet Systems Co., Ltd. (current position)
March 2021
External Director, Lion Corporation (current position)

April 1984
March 2019

Joined Lion Corporation
Audit & Supervisory Board Member (current position)

April 1985
March 2019

Joined Lion Corporation
Audit & Supervisory Board Member (current position)

External Audit &Supervisory Board Member

External Audit & Supervisory
Board Member

TAKAO YAMAGUCHISETSUKO TAKEMOTOATSUKO SUZUKI

Certified Public Accountant,Certified Tax Accountant

Certified Tax Accountant

October 1981
Joined Chuo Accounting Office Auditing Corporation
February 1985 Acquired Japanese CPA certification
September 1987 Entered Yamaguchi Accounting Office
December 1987 Acquired Japanese tax accountant certification
January 1996
Director, Yamaguchi Accounting Office (current position)
March 2015
Alternate External Audit & Supervisory Board Member,Lion Corporation
March 2019
External Audit & Supervisory Board Member, Lion
Corporation (current position)

April 1969
Joined the Ministry of FinanceJuly 2009
Director, Ogikubo Tax Agency
July 2011Retired from the National Tax Agency
August 2011
Acquired Japanese tax accountant certification
September 2011 Established Takemoto Setsuko Tax Accounting Office(now the Kuchitani General Accounting Office) as partner(current position)
March 2019
External Audit & Supervisory Board Member, Lion
Corporation (current position)

April 1986
April 2008
April 2010
January 2015
April 2015
October 2015
April 2017
May 2019
March 2021

Joined Matsushita Electric Industrial Co., Ltd.
­(now Panasonic Corporation)
Director and Manager of the CSR Office, Matsushita
Electric Industrial Co., Ltd. (resigned in December 2014)
External Director and Auditor, Nara Women’s University(resigned in December 2012)
Joined Asahi Breweries, Ltd.
Manager of the Social Environment Department, Asahi
Breweries, Ltd.
Manager of the Sustainability Promotion Section,
Olympic/Paralympic Promotion Headquarters(concurrently held), Asahi Breweries, Ltd.
Director and General Manager of the CSR Division of
Asahi Group Holdings, Ltd.
Resigned from Asahi Breweries, Ltd.
External Audit & Supervisory Board Member, Lion
Corporation (current position)

Executive Officer

Executive Officer

Yasutsugu Shimizu

Yoko Koike

Masayuki Takemori

Executive General Manager of Production Headquarters

Director of Human Resources Development Center

Executive Officer

Executive Officer

Executive General Manager of Health and Home Care
Products Division

Takashi Nagai

Kosuke Tanaka

Executive General Manager of Direct Marketing Division

Executive General Manager of Research and Development
Headquarters

Executive Officer

Annette Ling
Executive General Manager of International Division

Lion Integrated Report 2021 64

Performance

Executive Officer

Governance

External Audit &Supervisory Board Member

Strategy & Business

April 1991

Our Path & DNA

January 1985
June 2000
March 2006

External Director

Corporate GovernanceCorporate Officer Compensation
1. Determination and Details of Policy on Corporate Officer Compensation
Determination of Policy
To increase the objectivity and transparency of compensation for
directors and Audit & Supervisory Board members (corporate
officers), policies regarding the compensation of directors andAudit & Supervisory Board members are decided, respectively,by the Board of Directors and Audit & Supervisory Board while
adhering as closely as possible to the reports of theCompensation Advisory Committee. The Compensation
Advisory Committee consists of four external directors and threeexternal Audit & Supervisory Board members.

Details of Policy
The compensation of executive corporate officers (excluding
external directors and Audit & Supervisory Board members)consists of fixed monthly compensation and performance-linked
compensation (bonuses and stock-based compensation). The
compensation of non-executive corporate officers (external
directors and Audit & Supervisory Board members) consists
entirely of fixed monthly compensation determined using a flatrate system. Fixed monthly compensation levels are set taking
into consideration similar levels at other companies.

Approximate Composition of Compensation of Executive Corporate Officers (Excluding External Directors and Audit & Supervisory Board Members)
Performance-linked compensation
Fixed monthly compensation 50%
Bonus

30%

50%

Stock-based
compensation 20%
Fixed portion

Eligible Individuals
Type

Performance-linked
portionExecutive Corporate Officers (Excluding External Directors and Audit & Supervisory Board Members)
Fixed monthly compensation

Bonuses

SystemPaid in fixed monthly amounts.

Bonuses are calculated using the formula below
and paid after the end of the fiscal year.

FormulaFixed monthly compensation levels are
set taking into consideration similarlevels at other companies. In addition,
once per year, each director’s fixedmonthly compensation is raised or
lowered following an appraisal of how
well said director has executed their
management supervision and otherduties.

Benchmarks
Used inCalculation—

Total bonus payment amount: 50% of 0.5% ofcore operating income + 50% of 0.75% of profit
for the period attributable to owners of the parent* Rounded down to the nearest ¥10,000; to an upper limit of¥250 million. If core operating income or profit attributable toowners of the parent are negative (a loss), the value assigned
to that item for use in the formula will be zero.

Individual bonus payment amounts = Rank-based
points × payment per point
Payment per point = Total bonus payment amount /Rank-based points × number of officers
Points Assigned According to Director Rank
Chairman/President and Executive Officer: 3.000
Vice President and Executive Officer: 1.800
Senior Managing Executive Officer: 1.500
Managing Executive Officer: 1.200
Senior Executive Officer: 1.000
Executive Officer: 0.900

Performance-linked stock-based compensation
The number of points (number of shares) to be
granted to directors per fiscal year is determinedeach year. In principle, shares are issued to directors
upon retirement from office in a number equivalent to
the number of points they have accumulated.
Stock-based compensation = Fixed portion +Performance-linked portion(The fixed portion and performance-linked portion
form equal halves of the amount for each rank)
Number of points = ( Fixed base amount +Performance
Performance-linked base amount ×
coefficient) ÷ Per-share acquisition cost
* Truncated at the decimal point and capped at 120,000.

Fixed base amountThe fixed base amount for each rank is calculated
by multiplying the following rank coefficients by ¥4
million, the value of the fixed base amount for
directors with the rank of executive officer (forwhom the rank coefficient is 1).
Director Rank Coefficients
Chairman/President and Executive Officer: 3.625
Vice President and Executive Officer: 2.000
Senior Managing Executive Officer: 1.625
Managing Executive Officer: 1.375
Senior Executive Officer: 1.250
Executive Officer: 1.000
Performance-linked base amountThe performance-linked base amount is equivalent
to the above fixed base amount.
Performance coefficient
Performance coefficient = Performance coefficient forcore operating income × 50% + Performance coefficientfor profit attributable to owners of parent × 50%
Per-share acquisition cost
The per-share acquisition cost is the shareacquisition cost for the trust used by this system(¥2,130 per share).
* When a director transfers residency outside of Japan during
his or her eligibility for this system, their accumulated points
shall be voided and the director shall be paid separately at thetime of retirement in a cash amount determined by multiplying
the share price at the time of retirement by a number ofshares equivalent to his or her accumulated points.
* If a director commits serious misconduct, Lion may revoke
said director’s right to receive shares scheduled to be granted
under the system and require said director to return shares orcash in an amount equivalent to any shares already granted.

* Core operating income: An earnings indicator the Company uses to measure regular business performance by subtracting selling, general and administrative expenses fromgross revenues.

65 Lion Integrated Report 2021

2. Total Compensation for Directors and Audit & Supervisory Board Members (Fiscal 2020)
Performance-Linked Compensation
Bonuses(Millions of yen)

Stock-Based
Compensation(Millions of yen)

Total
(Millions of yen)

Directors(External Directors)

9
(3)

257
(36)

201
—

110
—

569
(36)

Audit & Supervisory Board Members(External Audit & Supervisory
Board Members)

4

84

—

—

84

(2)

(24)

—

—

(24)

Total
(External Officers)

13
(5)

341
(60)

201
—

110
—

653
(60)

Total Amount by Type of Compensation (Millions of yen)

Corporate
OfficerClassification

Basic
Compensation

Bonuses

Itsuo Hama

Director

63

61

34

—

159

Masazumi Kikukawa

Director

63

61

34

—

159

Name

PerformanceLinked Stock-Based Retirement Benefits
Compensation

Total
Compensation(Millions of yen)

Strategy & Business3. Total Consolidated Compensation by Officer (Fiscal 2020)

Vision & Future

Note: 1. There are no individuals serving concurrently as employees and corporate officers.
2. An upper limit on directors’ fixed compensation of ¥300 million per fiscal year was set by resolution of the 156th Annual Meeting of Shareholders held on March 30, 2017.
3. An upper limit on Audit & Supervisory Board members’ fixed compensation was set at ¥110 million per fiscal year by resolution of the 156th Annual Meeting of
Shareholders held on March 30, 2017.
4. By resolution of the 156th Annual Meeting of Shareholders held on March 30, 2017, an aggregate upper limit was set at ¥600 million on the amount of contributions tostock-based compensation for the four fiscal years from January 1, 2017 to December 31, 2020, with an upper limit on the total number of shares set at 360,000
shares (90,000 shares per fiscal year) for the same period.
5. Within performance-linked compensation, bonuses are amounts calculated and determined on the basis of the core operating income and the profit for the period
attributable to the owners of the parent for each fiscal year, in accordance with the methods described above. Stock-based compensation is the amount obtained byconverting the share granting points awarded to persons eligible under the system, depending on his or her business attainment level for the relevant fiscal year.
6. The amounts shown are rounded down to the nearest million yen

Our Path & DNA

Number of
Corporate Officers

Fixed
Compensation(Millions of yen)

Governance
Performance

Lion Integrated Report 2021 66

Corporate GovernanceInternal Control Systems
The Lion Group Charter for Corporate Behavior and Behavioral
Guidelines form the foundation of the Lion Group’s complianceframework. The President consistently communicates the spiritof the Lion Group Charter for Corporate Behavior to
management and employees to foster awareness of corporate

ethics throughout the Group and ensure that all corporate
activities are predicated on compliance.
Internal Control System
https://www.lion.co.jp/en/company/governance/system.php

Spreading and Strengthening Compliance AwarenessLion proactively works to spread and strengthen complianceawareness. These efforts are led by the Corporate Ethics
Committee, which is chaired by the director responsible forcorporate ethics. The Lion Group Charter for Corporate
Behavior and Behavioral Guidelines are distributed in pamphlet
form to all employees and publicly available on Lion’s website.

Percentage of Employees Who Received Feedback from theSurvey Results
0

20

40

60

80

100

2018

95.2

4.6

2019

95.0

4.8

2020

96.3

3.7

0.2

e-Learning Training
Lion conducts periodic e-learning. Topics covered in the
mandatory Lion Career Village (LCV) e-learning curriculum in2020 included a declaration of commitment to the Lion Group
Charter for Corporate Behavior and other aspects ofcompliance (including harassment prevention), Lion’s
conceptual approach to quality, social media-related risks,
information management, basic knowledge of insider trading
regulations, human rights, bribery and safety (including
occupational accidents).
Compliance Awareness Survey
Every year, the Corporate Ethics Committee conducts theCompliance Awareness Survey,* which covers all domestic
Lion Group employees (including part-time employees). Thissurvey provides an assessment of compliance awareness at
the individual employee level and a periodic evaluation of theeffectiveness of compliance systems.
In 2020, the survey was conducted for the 17th time.
Approximately 91.8% of the targeted 4,334 employees
responded. Matters identified as requiring a response through theopinions and other results gathered via the survey are dealt withpromptly, and the survey results are reported to management,
which then provides feedback to individual divisions.

67 Lion Integrated Report 2021

(%)
0.2

0.0

(Year)

Feedback received

Not received

No response* Compliance Awareness Survey
Anonymous questionnaire survey covering such topics as compliance with the LionGroup Charter for Corporate Behavior, whether there was feedback from the results ofthe previous Compliance Awareness Survey, and awareness of the AL Heart Hotline.

Raising Awareness of the Hotline
Lion has set up an internal and external whistle-blowing system,
the AL (All Lion) Heart Hotline, and is taking steps to raiseawareness of said system among all employees, including
temporary staff. Employees can use this hotline when they learnof compliance violations that are inappropriate or impossible toreport through their normal workplace channels. The annualCompliance Awareness Survey measures employees’
awareness of the AL Heart Hotline and is accompanied byexplanations of the hotline. The rate of recognition of the hotline
among employees was 99.5% in 2020.
The AL Heart Hotline Employee Recognition Rate
2018

98.5%

2019

98.6%

2020

99.5%

Anti-Bribery Principles

The AL Heart Hotline System
Consulter/Reporter
Employees of the Lion Group, temporary staff or external business partners

Internal contact
Director of Corporate Ethics
ReportingInstruction

Corporate Ethics
Committee Chair

Consultations andreports
Report contents ofconsultations/reports

Feedback

External contact
LawyerReport investigation
results andcountermeasures

Compliance Initiatives at Overseas Group Companies
Board of Directors

Report as needed

Corporate Ethics
Committee
Set up as needed

Ethics Evaluation Committee
External experts

AL Heart Hotline Consultations and Reports
In 2020, the hotline received 73 consultations and reports.
However, none of the cases were judged to constitute serious
misconduct, and all were appropriately addressed and resolved.
2018

2019

2020

Harassment

15

11

8

Personnel and labor management issues

6

11

7

Others2358Compliancehttps://www.lion.co.jp/en/csr/management/compliance/

Fundamental Stance towards Eliminating Antisocial Forces and Status of Related Measures

Strategy & Business

Content of consultations and reports madeThe Lion Group implements initiatives at overseas Group
companies aimed at spreading and strengthening complianceawareness Group-wide. In 2019, employees from compliancerelated departments visited overseas Group companies (Lion
Corporation (Singapore) Pte Ltd, Lion Daily Necessities
Chemicals (Qingdao) Co., Ltd. and Lion Home Products(Taiwan) Co., Ltd.), and in 2020, online meetings were held with
Lion Corporation (Korea) and Lion Corporation (Hong Kong)
Ltd. to promote awareness of compliance-related efforts, suchas the LION Human Rights Policy, LION Anti-Bribery Principles
and AL Heart Hotline, as well as related initiatives.

Vision & Future

Seeking Solutions/Resolving Problems

Feedback

Our Path & DNA

Consultations andreports

The Lion Group has established the LION Anti-Bribery
Principles in light of developments around the world related tothe strengthening of legal regulations against acts of bribery
and corruption and has reinforced its Company-wide systems
for ensuring compliance related to bribery prevention.

Based on the Lion Group Charter for Corporate Behavior, Lion maintains a confrontational stance towards any antisocial forces
threatening the order and security of civil society. The General Affairs Department serves as the supervisory department for handling
antisocial forces. This department includes one person responsible for preventing unreasonable demands and cooperates with LionGroup operating sites and external organizations.
Governance

Basic Corporate Governance Policy
https://www.lion.co.jp/en/company/pdf/cg_policy_e.pdf

Corporate Governance Report (Japanese)
https://www.lion.co.jp/ja/company/about/pdf/abo_gov.pdf

Lion Integrated Report 2021 68

Performance

For more information about Lion’s corporate governance, please visit our website.

Corporate GovernanceRisk Management
Lion’s business activities entail a wide range of risks. To avoid and minimize losses caused by the actualization of risks, we haveappointed a Director Responsible for Risk Management (the director responsible for the Corporate Planning Department) who
comprehensively controls and supervises risk for the whole Lion Group.
1. Basic Policy for Risk Management(1) M anagement and employees strive to prevent theactualization of risks that could harm Group business
operations as part of their normal duties based on Lion’s
basic policy for internal control systems.
(2) In the event that a risk actualizes, we strive to minimize losses
and harm to employees, shareholders, customers, local
communities and other stakeholders.
(3) We report actualized risks to top management immediately
and promptly take steps to understand the situation,
elucidate the events and factors that led to it, and develop
measures for improvement in order to prevent recurrences.
2. The Lion Group’s Rules and Other Structures Relating to
the Management of Risk
1. Response under Normal Conditions(1) T he director responsible for the Corporate Planning
Department has overall responsibility for the risk managementof the Group. The Corporate Planning Department
comprehensively manages the Group’s risk.
(2) The Auditing Office audits the status of risk management foreach department within the Group and reports its findings to
the Executive Committee and the Board of Directors.
(3) Each department periodically identifies its own risks andimplements appropriate risk management measures(encompassing avoidance, transfer, reduction andacceptance). For management risks with the potential tosignificantly impact business activities, the director of theBoard responsible for the relevant department considers
appropriate risk management measures, which are thendeliberated on by the Senior Executive Committee andExecutive Committee for implementation.
(4) For the management of risk related to the environment,
quality assurance, and accidents and disasters, theadministrative offices for the deliberative bodies withresponsibility for the respective areas (the Sustainability
Promotion Council, CS/PL Committee,* Safety, Hygiene andDisaster Prevention Meeting, etc.) are designated as thedepartments with responsibility for risk. These departments
consider preventive countermeasures, with deliberation by
the Executive Committee when necessary, and implement
risk management. Furthermore, the Group Risk Officer(Director of the Corporate Planning Department for Special
Mission) participates in the meetings of the deliberative
bodies to confirm from an objective, overarching perspectivethat they are advancing appropriate, timely measures.
* CS/PL Committee
A cross-departmental committee focused on customer satisfaction (CS) andproduct liability (PL) to promote quality assurance activities

69 Lion Integrated Report 2021

2. Response in the Event of Emergency
In the case of a physical emergency, such as a natural disasteror accident, in accordance with the Emergency Response
System (a system of manuals outlining countermeasures against
earthquakes or influenza and other infectious diseases), therelevant facts are reported to the president and Audit &Supervisory Board members. At the same time, the directors of
relevant departments collect all pertinent information, formulate
response measures, clarify causes, determine countermeasuresand submit reports on these actions to the Executive Committee
and the Board of Directors.
3. Business Continuity Plan (BCP)
Lion works to build and maintain systems to minimize damage
and to ensure the continuation of business operations so that it
can provide products to customers even in the event of a major
earthquake, storm or flood damage, an outbreak of infectious
disease (pandemic) or other such contingency. We will set
up a task force and respond according to the “Manualon Countermeasures for Earthquake Disasters” when amajor earthquake occurs and according to the “Manual on
Countermeasures against Novel Influenza and Other Infectious
Diseases” if a pandemic due to a novel influenza virus or otherinfectious disease is foreseen.
Basic Policy(1) S ecure the safety of employees andtheir families(2) C ontinue priority businesses and key
operations to minimize business damage(3) Carry out corporate social responsibilities
and contribute to local communities
Key Guidelines	We clearly define priority businesses (theConsumer Products Business), priority
operations (receiving orders, sending
shipments, production, IT, accounting and otheroperations necessary to continue supplying
products) as well as target time frames forrestoring operations and organizational chainsof command.
4. Implementing Risk Management
In light of the mounting risks posed by various environmental
changes and other factors, we believe that reexamining risks
f ro m d i v e r s e p e r s p e c t i v e s a n d f u r t h e r e n h a n c i n g
countermeasures is crucial. Accordingly, from 2021, we haveidentified 13 Company-wide risks, which we are working tomanage and minimize (see table on page 70).
To address these risks, twice per fiscal year, we draw up a list of
possible risk events. The Board of Directors and other bodies
use this list to discuss and confirm response measures.

Business Risks
The Lion Group has identified 13 risks that may seriously impact Group management in terms of its ability to carry out its corporatesocial responsibilities, including achieving sustainable growth and supplying products to customers. We are focusing particularefforts on managing these risks.

We analyze changes in markets and consumer lifestyles on
an ongoing basis and develop products that offer new
living habits.

(2) Product quality risks

Risks of problems with products, such as unforeseen
product-related accidents, due to unforeseen productdefects or mistaken use by customers

We ensure compliance with related laws and regulations
and implement product development and other processes
in line with our Product Management System based on the
JIS Q 9000 family of standards.

(3) R aw material
procurement risks

Risks of purchase price increases and supply-chain delays
or breaks due to intensifying competition in procurement

We ensure stable raw material procurement through the useof interchangeable materials, purchasing from multiple
sources and practicing global procurement and furthermore
implement responsible procurement activities based on our
Procurement Principles.

(4) O verseas business
risks

Risks of incurring costs associated with response measures
or limitations on business activities arising from political andeconomic developments or changes in or the tightening oflaws and regulations in the countries and regions where we
do businessWe closely monitor developments related to political andeconomic conditions as well as laws and regulations in the
counties and regions where we do business, continuallygathering information and preparing for changes.

(5) H uman resource
risks

Risks of stagnation in corporate growth due to difficulty insecuring and developing necessary human resources
according to plans as a result of such factors as thedecreasing working population and changes in theemployment environment

We practice year-round hiring and are expanding our ranksof specialized human resources while implementing the Lion
Professional Fulfillment Reforms.

(6) Information
management risks

Risks of information leaks, system paralysis or otherincidents due to such unforeseen events as computer virus
infections or improper system access

We have designated countermeasures to system problems
in the Information Security Regulations, which are updated
as needed, and implement thorough information
management, including that of business secrets, based on
the Basic Policy on Information Management.

(7) Compliance risks

Risks of serious legal or regulatory violations due to theunforeseen establishment or abolition of relevant laws orsignificant regulatory changes or tightening

We have established the Lion Group Charter for Corporate
Behavior and Behavioral Guidelines, which serve as a codeof conduct, regarding which we implement periodic
education for all employees.

(8) Reputation risks

Risks of inappropriate comments or messages on social
networking services (SNSs) or other platforms quickly
spreading and generating controversy or backlash

We have established the Lion Group Social Media Policy,
implement education for all employees and strive to quickly
detect inappropriate information through the ongoing
monitoring of SNSs and other platforms.

(9) Exchange rate risks

Risks of yen conversions upon the preparation of
consolidated financial statements affecting Groupmanagement performance and financial status

We carefully monitor the exchange rates of key currencies
and strive to reduce risks presented by exchange rate
fluctuations through hedging and other means.

(10) Major lawsuit risk

Risks of major lawsuits resulting in unfavorable decisions for
the Group

We ensure thorough legal compliance, clearly explain anddiscuss contract terms before forming agreements,
appropriately manage intellectual property and take othersteps to prevent lawsuits.

 ovel influenza and(11) Nother infectious
disease risk

Risks of the emergence and prolongation of epidemics ofnovel strains of influenza or other infectious diseases
resulting in restrictions on the movement of people
and things

We implement thorough infection prevention measures
under normal conditions and have designated epidemic
response measures in the “Manual on Countermeasuresagainst Novel Influenza and Other Infectious Diseases” inaddition to creating a system to enable quick andappropriate action in the event of an outbreak.

(12) M ajor earthquakeand other natural
disaster risk

Risks of human damage, such as the death or injury of
employees, as well as physical damage, such as damage tomanufacturing facilities or warehouses, caused by a major
earthquake, major typhoon or other natural disasterWe have prepared a system for implementing organizational
responses based on the “Manual on Countermeasures for
Earthquake Disasters,” conduct periodic drills, and haveestablished a Business Continuity Plan (BCP) Framework toensure business continuity and rapid recovery in the event of
a disaster in order to fulfill our product supply responsibilities.

(13) C limate change andother environmental
change risks

Risks related to responding to tightening regulations, rising
raw material costs, other cost increases and reputational
damage due to delays in responding arising from global
temperature increases caused by climate change

Working to realize a sustainable society, we have establishedthe LION Eco Challenge 2050, a new set of environmental
objectives for 2050, and are ambitiously working to realize
a decarbonized, resource-circulating society.

* For more information on the 13 risks and Lion’s main initiatives to address them, please refer to Lion’s Securities Report for fiscal 2020 (Japanese).

Securities Report (Japanese)
https://www.lion.co.jp/ja/ir/library/yuhou/
Lion Integrated Report 2021 70

Performance

Risks of being unable to supply superior products andservices useful for everyday living due to delays in
responding to changes in markets, distribution or consumers

Governance(1) R isks related tomarket and consumer
changeStrategy & Business

Main Initiatives

Vision & Future

Description

Our Path & DNA

Risk

Financial and Non-Financial Highlights
Financial Highlights
Operating Profit/Core Operating Income/Ratio of Core Operating Income to Net Sales

Net Sales¥355.3(Billions of yen)

500
400

(Billions of yen)

IFRS

Japanese GAAP

395.6

40

410.4
342.7

¥35.9

Up 2.3%billion  year on year

349.4

347.5

355.3

(%)
12

IFRS

Japanese GAAP

35.9

30

27.2

24.5

300

Up 19.6%

billion  year on year

28.8

8.4

20

10.1 9

30.0

28.3

8.6

8.1

6

200
3

10

100
0

0

0

2016

2017

2017

2018

2019

2016

2020

(Fiscal year
under review)

2017

2017

2018

2019

2020

(Fiscal year
under review)Operating profit (left scale)Core operating income (left scale)
Ratio of core operating income to net sales (right scale)* C ore operating income is an earning indicator the Company uses tomeasure regular business performance and is calculated by subtracting
selling, general and administrative expenses from gross profit.

Ratio of Equity Attributable to Owners of the Parent toProfit for the Period (ROE)

13.6
(%)
15

12

11.2

12.2

Capitalexpenditures:

Up 3.3 percentage%  points year on year

12.7

Depreciation andamortization:(Billions of yen)

IFRS

Japanese GAAP

Capital Expenditures/Depreciation and Amortization

13.9

13.6

¥47.5 billion¥11.7 billion
IFRS

Japanese GAAP

47.5

50

30
20
10

0

23.6
16.6

10.2
9.4

14.9
9.3

14.9
7.7

8.8

2016

2017

2017

2018

11.7

10.5

0

2016

2017

2017

2018

2019

2020

(Fiscal year
under review)

Capital expenditures* Calculated as the ratio of shareholders’ equity to profit attributable to ownersof parent under Japanese GAAP.

¥102.75

IFRS

Japanese GAAP

102.75
88.11

80

68.23

2020

(Fiscal year
under review)

Depreciation and amortization¥23

Up 45.3%  year on year

100

2019

Cash Dividends Paid per Share/
Consolidated Payout Ratio

Basic Earnings per Share (EPS)60

Up 11.7%
year on year

40

10.3

9

(Yen)
120

Up 101.2%
year on year

71.87

(Yen)
30

Japanese GAAP

25

23.6

20

70.72

15

55.13

24.9
17

Fifth consecutive fiscal  year of dividend growth.
(%)
30

IFRS

23.7
17

22.7
20

29.7
21

22.4

23

25
20
15

13

40

10

10

20

5

5

0

0

2016

2017

2017

2018

* Earnings per Share under Japanese GAAP.

2019

2020

(Fiscal year
under review)

0

2016

2017

2017

Cash dividends per share (left scale)

2018

2020

(Fiscal year
under review)

Consolidated payout ratio (right scale)* Effective from the fiscal year ended December 31, 2018, the Lion Group has voluntarily adopted International Financial Reporting Standards (IFRS).

71 Lion Integrated Report 2021

2019

Non-Financial Highlights
Environment

Reduction of Greenhouse Gas Emissions
from Business Activities*

Reduction of Water Use
in Business Activities*

-53

-55

%

in 2020%

in 2020* Compared to 1990 levels; absolute quantity; business locations in Japan* Compared to 2000 levels; absolute quantity; business locations in Japan

SDGs:

SDGs:
In addition to the full-scale operation of facilities to recycle
wastewater at the Chiba Plant, where the volume of waterused is the largest of any of the Company’s domestic
production facilities, Lion implemented water-saving activities
at each of its operating sites in order to realize a society with asound material cycle, as set forth in Eco Vision 2020.

Human Resources

Human Resources
Employee Pride in the Lion Group*

18.4

97.0

%

%

SDGs:

* Based on the 2020 Employee Awareness and Behavior Survey

Proportion of Female Employees
at the Management Level(%)

12.0 12.9

14.4

15.8

17.1

18.4

SDGs:
While regularly measuring changes in internal awareness andbehavior, Lion is working to identify areas for improvement
going forward and to use them to foster awareness and action.

2015 2016 2017 2018 2019 2020

(Fiscal year
under review)

Governance

HealthHealthParticipants in the Oral Health Event of Tooth Brushing forChildren Oral Healthcare Educational Activity*

Approx.

Strategy & Business

Proportion of Female Employees at the Management Level

Vision & Future

Lion implemented energy-saving activities throughout theentire Company, including production, administration, sales
and R&D divisions, in order to realize a low carbon society, as
set forth in Eco Vision 2020.

With the aim of expanding
creative business activities
by utilizing diverse humanresources, Lion is actively
working to create a
corporate culture where
women can participate
fully and advanceprofessionally.

Our Path & DNA

Environment

1.96

millionParticipants in Activities toPromote Correct Hand Washing Habits*

Approx.

35,500* Cumulative, from 2012 to 2020

SDGs:

SDGs:

With the aim of creating healthy living habits, Lion has held
this event to teach elementary school students correct toothbrushing habits 77 times

To help consumers achieve cleanliness and comfort ineveryday living, Lion carries out activities to promote correct
hand washing habits with the KireiKirei brand.

Lion Integrated Report 2021 72

Performance* Cumulative, from 1932 to 2020

Management’s Discussion and Analysis of Fiscal 2020 Results
Market Environment
In fiscal 2020 (January 1, 2020–December 31, 2020), conditionsin the Japanese economy remained harsh due to the negative
effects of the novel coronavirus (COVID-19) pandemic, including
a substantial decline in corporate profits and deterioration in
employment conditions.

In domestic consumer products, the Lion Group’s main
business, demand associated with inbound tourism decreased
due to a decline in the number of overseas visitors to Japan.
However, the overall market expanded due mainly to growing
demand for hygiene-related products.

Consolidated Results
Lion advanced measures based on the basic strategies of its
medium-term management plan, the LION Value Evolution Plan
(LIVE Plan). These basic strategies are “Expand and Evolve Our
Business Domains through New Value Creation,” “Accelerate
Growth in Overseas Businesses through Glocalization,”“Reinforce Our Management Base through Business Structure
Reform” and “Create Dynamism to Foster Innovative Change.”
At the same time, the spread of COVID-19 impacted Lion’s
domestic and overseas businesses. To meet its social
responsibility, the Lion Group strived to maintain its productsupply while making every effort to prevent the spread of thevirus and ensure the safety of its employees.
In its domestic operations, Lion introduced new, high-valueadded products in its mainstay brands and worked to cultivate
markets for these products through efficient marketing initiatives.
In its overseas operations, in addition to efforts to increase
profitability in the home care field, which includes suchproducts as laundry detergents, the Group sought to expand
its business in the personal care field, which includes oral careand beauty care products.

year increase of 2.3% (or 3.2% at constant currency excluding
exchange rate fluctuations). Core operating income* came to¥35,937 million, up 19.6% compared with the previous fiscal
year, and operating profit to ¥44,074 million, up 47.7% year on
year. Profit for the period attributable to owners of the parent
totaled ¥29,870 million, up 45.3% compared with the previous
fiscal year.
* Core operating income is an earnings indicator the Company uses to measure
regular business performance and is calculated by subtracting selling, general andadministrative expenses from gross profit.

Consolidated Results(Millions of yen)

2020

2019

Net sales

355,352

347,519

Core operating income

35,93730,048

Ratio of core operating income to net sales

10.1%

8.6%

Operating profit

44,07429,832

Ratio of operating profit to net sales

12.4%

8.6%

ROE

13.6%

10.3%

Reflecting these efforts, consolidated results for fiscal 2020 are
as follows. Net sales amounted to ¥355,352 million, a year-onSelling, General and Administrative Expenses

Changes in Core Operating Income(Billions of yen)

2019 core operating income
Increase in sales,
product mix changes and others
Total cost reduction(raw materials, logistics)

Amount+2.3+0.9

Increase incompetition-related expenses-0.8

Increase in other expenses-2.2

73 Lion Integrated Report 2021

35.9

Amount(Millions of
yen)% of net
sales(Millions of
yen)% of netsales

143,93440.5

141,882

40.8

Sales commissions

9,426

2.7

9,166

2.6

Promotion expenses

26,9097.6

26,2197.5

Advertising expenses

24,9437.0

25,1197.2

Transportation andwarehousing expenses

18,851

5.3

19,785

5.7

Salaries and allowances

15,7394.4

15,586

4.5

R&D expenses

10,906

3.1

10,944

3.1

Other expenses

37,156

10.5

35,05910.1+5.7

Decrease in
raw material prices

2020 core operating income

2019

2020
30.0

Selling, general andadministrative expenses

Conditions by Reportable Segment

Consumer Products Business
The Consumer Products Business segment comprises the Oral
Care Products, Beauty Care Products, Fabric Care Products,
Living Care Products, Pharmaceutical Products and Other
Products businesses. Segment net sales increased 4.8%
­c ompared with the previous fiscal year. Segment profit
increased 25.5%.

In Fabric Care Products, looking at fabric softeners, sales of
SOFLAN Premium Deodorizer stagnated, while those of
SOFLAN Aroma Rich fell year on year due to intensifying
competition. In laundry detergents, TOP SUPER NANOX For
Odors received favorable consumer reviews, but sales of TOP
Clear Liquid fell year on year.

(Millions of yen)

% of net
2020
sales

% of net Increase/2019
sales decrease

Net sales

245,493234,357

Segment profit

24,647 10.0%

19,634

8.4%

Change(%)

11,135

4.8%

5,012

25.5%

* Net sales include internal net sales within and among segments, which amounted to¥15,746 million in 2020 and ¥14,977 million in 2019.

Net Sales by Product Category
2020

2019

Increase/decrease

Change(%)

Oral Care Products

66,40764,555

1,852

2.9%

Beauty Care Products

31,48922,350

9,139

40.9%

Fabric Care Products

59,11960,780(1,661)(2.7%)

Living Care Products

24,063

19,766

4,297

21.7%

Pharmaceutical
Products

23,897

26,222(2,325)(8.9%)

Other Products

40,51540,682(166)(0.4%)In Other Products, looking at pet supplies, sales of Nioi wo Toru
Suna (Deodorizing Cat Litter) were steady, and those of oral careproducts were favorable. In direct-to-consumer sales products,
sales of Nice rim essence Lactoferrin decreased from theprevious fiscal year.
Governance

In Oral Care Products, SYSTEMA Haguki (the Gums) Plus
Premium Toothpaste received favorable consumer reviews, andsales of the SYSTEMA EX Toothpaste series, including the newly
released SYSTEMA EX W Toothpaste, were strong. NONIO
Toothbrush received favorable customer reviews, but sales of
the Between toothbrush fell year on year. Sales of NONIO
Mouthwash were favorable.

In Pharmaceutical Products, sales of antipyretic analgesic
BUFFERIN PREMIUM were firm, and sales of Smile 40
Premium DX and Smile 40 Mediclear DX eye drops werestrong. In dermatologic agents, Lion released the new Method
series. Sales of acne medicines and cooling sheets for feetdecreased year on year, reflecting decreased demandassociated with inbound tourism.

Strategy & Business(Millions of yen)

In Living Care Products, looking at dishwashing detergents,
sales of CHARMY Magica and CHARMY Crysta for dishwashers
were strong. In household cleaners, sales of LOOK Plus BathCleansing and LOOK Plus Bath Antimold Fogger were favorable,
and overall sales increased significantly year on year.

Vision & Future

Net Sales and Segment Profit

In Beauty Care Products, sales of KireiKirei Medicated Foaming
Hand Soap increased substantially year on year, and sales of
hadakara Body Soap were firm. Looking at antiperspirants anddeodorants, new Ban Sweat-Blocking Platinum Roll-On received
favorable consumer reviews, but sales of Ban Sweat-Blocking
Foot Gel fell year on year.

Our Path & DNA

The Lion Group’s segments are based on its business divisions
and subsidiaries grouped by products, services and region. Its
three reportable segments are the Consumer Products
Business, Industrial Products Business and Overseas Business.

Performance

Lion Integrated Report 2021 74

Management’s Discussion and Analysis of Fiscal 2020 Results
Industrial Products Business
The Industrial Products Business segment includes theAutomotive, Electrical and Electronics, and Detergents for
Institutional Use Products fields. These businesses handle
products that include anti-sticking agents for tires, electroconductive carbon for secondary batteries, and detergents for
institutional and kitchen use, respectively. Segment net sales
decreased 0.2% compared with the previous fiscal year.
Segment profit increased 23.7%.
Net Sales and Segment Income(Millions of yen)

2020
Net sales

55,069Segment profit

2,171% of net
sales

2019

% of net Increase/sales decrease

55,164
3.9%

1,755

3.2%

Change(94)(0.2%)

416

23.7%* Net sales include internal net sales within and among segments, which amounted to¥23,505 million in 2020 and ¥22,210 million in 2019.

In the Automotive field, sales of anti-sticking agents for tires andcarbon for auto parts decreased year on year, and overall sales
decreased year on year.
In the Electrical and Electronics field, demand for performancematerials and electroconductive resins decreased, and overallsales were down on year.
In the Detergents for Institutional Use Products field, sales ofdishwashing detergents for dishwashers and others were down
year on year, but sales of alcohol sanitizers for kitchens andhand soaps increased substantially year on year, and overallsales rose year on year.
Overseas Business
The Overseas Business segment comprises business
operations located in Southeast Asia, including Thailand andMalaysia, and Northeast Asia, including South Korea and China.
Segment net sales increased 0.5% year on year (or 4.0% atconstant currency excluding exchange rate fluctuations).
Segment profit decreased 5.4% year on year.

Net Sales and Segment Income(Millions of yen)

% of net
2020
sales
Net sales
Segment profit

101,095

101,651
7,144% of net Increase/2019
sales decrease

7.0%

7,552

7.5%

Change

555

0.5%

(407)

(5.4%)* Net sales include internal net sales within and among segments, which amounted to¥10,440 million in 2020 and ¥9,354 million in 2019.

In Southeast Asia, overall sales were down 4.4% year on year.
In Thailand, sales of hand soaps were strong, but sales of­laundry detergents decreased year on year. Overall sales after
yen conversions were down year on year. In Malaysia, salesof laundry detergents were up year on year, but overall sales
after yen conversions were down year on year due toexchange rate fluctuations.
In Northeast Asia, overall sales were up 11.5% year on year. In
South Korea, sales of hand soaps increased substantially year
on year. Overall sales after yen conversions were up year on
year. In China, sales of SYSTEMA toothbrushes were favorable,
and sales of hand soaps and products imported from Japan
increased substantially. Overall sales after yen conversions wereup substantially year on year.

Other
Net Sales and Segment Income(Millions of yen)

2020
Net sales

34,820

Segment profit

2,315% of net
sales

2019

% of net
sales

35,337
6.6%

1,521

4.3%

Increase/decrease

Change(516)(1.5%)

793

52.2%* Net sales include internal net sales within and among segments, which amounted to¥31,992 million in 2020 and ¥31,909 million in 2019.

Financial Status
Consolidated Financial Status

2020

2019

Increase/decrease

Total assets (millions of yen)

435,501

380,701

54,799Total equity (millions of yen)

244,856

221,201

23,654

Ratio of equity attributable to ownersof the parent to total assets*1

53.2

54.7

(1.5)

Equity attributable to owners of theparent per share*2 (yen)797.08716.9480.14*1. Ratio of equity attributable to owners of the parent to total assets = (Total equity –Non-controlling interests)/Total assets*2. Non-controlling interests are excluded from calculation of equity attributable toowners of the parent per share.

75 Lion Integrated Report 2021

Total assets rose ¥54,799 million compared with the previous
fiscal year-end to ¥435,501 million. This was primarily
attributable to an increase in property, plant and equipment.
Total equity increased ¥23,654 million, to ¥244,856 million. The
ratio of equity attributable to owners of the parent to total assets
stood at 53.2%.

Consolidated Cash Flows(Millions of yen)

2019

Increase/decrease

Cash flows from operating activities

40,72936,762

3,967

Cash flows from investing activities(19,868)(20,754)

886

Cash flows from financing activities(9,140)(10,561)

1,420

Effect of exchange rate changes oncash and cash equivalents

(593)

(12)

(580)

Net increase (decrease) in cash andcash equivalents

11,127

5,433

5,693

Cash and cash equivalents at
end of period

121,534

110,406

11,127

Net cash used in investing activities totaled ¥19,868 million, due
in part to the purchase of property, plant and equipment.
Net cash used in financing activities totaled ¥9,140 million. Major
components of this outflow included cash dividends paid.
As a result of the above, cash and cash equivalents as ofDecember 31, 2020 increased ¥11,127 million from December
31, 2019, to ¥121,534 million.

Our Path & DNA

2020

Net cash provided by operating activities totaled ¥40,729 million,
due mainly to profit before tax.

Outlook for 2021
Outlook for 2021
(Millions of yen)

2020

Net sales

365,000

355,352

9,647

2.7%

Core operating income*

30,00035,937(5,937)(16.5%)

Operating profit

30,00044,074(14,074)(31.9%)

Profit for the period attributable to ownersof the parent

21,00029,870(8,870)(29.7%)

Basic EPS (yen)72.24

102.75(30.51)(29.7%)

Increase/decrease

ChangeDuring fiscal 2021, the Japanese economy is expected to see
an upturn due measures to prevent the spread of COVID-19
and government-led stimulus policies. However, the outlook
going forward is likely to remain harsh, with no end to thepandemic in sight.
In domestic consumer products, the Lion Group’s main business,
although strong demand for hygiene-related products is expected
to continue, the overall market outlook remains unclear.

¥104= US$1.00¥3.4 = 1.00 baht
Forecast of 2021 Consolidated Cash Flows
In cash flows from operating activities, Lion projects profit
before tax of approximately ¥31,500 million. Depreciation andamortization is estimated to total about ¥13,500 million.
In cash flows from investing activities, Lion plans to undertake
capital expenditures of around ¥35,500 million.
The cash flows from financing activities are expected to yield an
outflow of about ¥10,000 million mainly due to cash dividends paid.
Based on these projections, Lion estimates that cash and cash
equivalents at the end of fiscal 2021 will be down approximately¥500 million year on year.

Lion Integrated Report 2021 76

Performance

In the Consumer Products Business segment, the Lion Groupwill introduce and cultivate new, high-value-added products in its
mainstay businesses, working to improve its market position andstrengthen profitability. At the same time, the Group will focus on
initiatives that contribute to establishing cleanliness and hygiene
habits. The Group will also work to expand production capacity,
especially in the oral care field.

Assumptions Underlying the Forecast of Consolidated
Financial Results for Fiscal 2021
Lion utilized the following foreign exchange rates in thecalculation of the aforementioned forecasts.
GovernanceAmid these circumstances, the Lion Group will push ahead with
the implementation of Vision2030, a newly established long-term
strategic framework, under which the Group will synergisticallyaddress its sustainability material issues and advance growthstrategies. By doing so, Lion will accelerate its efforts totransform itself into a company that can continuously contributeto solving social issues through its businesses.

As a result of the above, consolidated results forecasts for fiscal
2021 are as follows: net sales of ¥365,000 million (up 2.7% year
on year), core operating income of ¥30,000 million (down 16.5%
year on year), operating profit of ¥30,000 million (down 31.9%
year on year) and profit for the period attributable to owners of
the parent of ¥21,000 million (down 29.7% year on year).

Strategy & Business* Core operating income is an earnings indicator the Company uses to measure
regular business performance and is calculated by subtracting selling, general andadministrative expenses from gross profit.

With regard to the Overseas Business segment, the Lion Groupwill work to increase profitability in the home care field. The
Group will also implement marketing activities focused mainly on
its business in the personal care field, which includes oral careand beauty care products, with particular emphasis on the
Chinese market, which continues to grow. By doing so, theGroup aims to achieve business growth.

Vision & Future

Fiscal2021
forecast

In the Industrial Products Business segment, the Lion Group will
steadily promote its priority measures in such key areas as theAutomotive and Electrical and Electronics fields to reinforce its
business foundation. Furthermore, Lion will step up marketing
efforts to reach out to key customer groups in the Detergents for
Institutional Use Products field while striving to expand sales ofhygiene-related products.

Ten-Year Financial Summary
V-1 Plan
2012–2014

V-2 Plan
2015–2017

Japanese GAAP
2011

2012

2013

2014

2015

2016

Net sales

327,500

335,171352,005367,396378,659

395,606

Cost of sales

139,646

145,385

153,336

160,677

162,435

161,992

Gross profit

187,854

189,785

198,668

206,718

216,223

233,613

Selling, general and administrative expenses

176,684

182,572

187,849

194,312

199,848

209,110

Operating income

11,1697,213

10,81912,406

16,37424,502

Income before income taxes

7,780

8,594

10,925

13,085

19,38724,035

Profit attributable to owners of parent

4,077

4,235

6,097

7,368

10,68015,951

Total assets

249,272

257,595

282,098

283,352

282,434

298,510

Property, plant and equipment, net

58,503

61,95568,98979,27575,06074,402

Total noncurrent liabilities

49,41747,28826,20840,38018,455

17,190Total liabilities

144,020

143,431

157,865

155,918

139,703

140,630

Total net assets

105,252

114,163

124,232

127,434

142,730

157,879

Capital expenditures*

8,368

10,82013,70913,555

8,801

9,407

R&D expenses

8,913

8,989

9,618

9,439

9,808

10,084

Depreciation and amortization*

12,00911,834

11,227

10,301

11,166

10,244

Number of employees

5,973

6,006

6,162

6,343

6,816

6,895

Earnings per share – basic

15.18

15.77

22.72

27.47

39.35

55.13

Earnings per share – diluted

15.16

15.75

22.68

26.16

36.84

55.04

Dividends per share

11.00

10.00

10.00

10.00

10.00

13.00

Net assets per share380.11407.08441.59449.94469.05513.76

Consolidated Statements ofIncome data

Consolidated Balance Sheets data

Other selected data

Common share data (yen)Common stock(number of shares outstanding)

299,115,346 299,115,346 299,115,346 299,115,346 299,115,346 299,115,346

Ratios (%)
Gross profit to net sales

57.4%

56.6%

56.4%

56.3%

57.1%

59.1%

Selling, general and administrative expenses
to net sales

53.9

54.5

53.4

52.9

52.8

52.9

Operating income to net sales

3.4

2.2

3.1

3.4

4.3

6.2

Income before income taxes to net sales

2.4

2.6

3.1

3.6

5.1

6.1

Profit attributable to owners of parent to net sales

1.2

1.3

1.7

2.0

2.8

4.0

Return on equity (ROE)

4.0

4.0

5.4

6.2

8.5

11.2

* Includes the effects of intangible assets.

77 Lion Integrated Report 2021

LIVE Plan
2018–2020
IFRS

2017

(Millions of yen)

2017

2018

2019

2020

Consolidated Statement of
Income data
Net sales

342,703349,403347,519355,352

171,209

Cost of sales

171,713

177,673

175,588

175,479

239,275

Gross profit

170,990

171,729

171,931

179,872

212,068

Selling, general and administrative expenses

142,182

143,353

141,882

143,934

27,206

Core operating income

28,80728,37530,04835,93730,560Operating profit

30,47934,196

29,83244,074

19,827

Profit before tax

31,99835,65831,40244,494

Profit for the period attributable to ­owners of
the parent

20,88325,606

20,55929,870Vision & Future

410,484

Our Path & DNA(Millions of yen)

Consolidated Statement of
Financial Position data
Total assets

338,855

355,365

380,701

435,501

80,981

Property, plant and equipment

79,53981,54690,903

118,379

17,511

Total non-current liabilities

20,662

21,35023,781

24,016

144,736

Total liabilities

150,062

151,093

159,499

190,644

187,015

Total equity

188,793204,271

221,201

244,856

Other selected data
14,892

Capital expenditures*

14,892

16,67823,64447,57010,474R&D expenses

10,474

10,96910,944

10,906

9,386

Depreciation and amortization*

7,775

8,707

10,504

11,732

7,075

Number of employees

7,075

6,941

7,151

7,452

Strategy & Business

331,751

Common share data (yen)Basic earnings per share

71.87

88.11

70.72

102.75

68.15

Diluted earnings per share

71.77

87.99

70.63

102.61

17.00

Cash dividends paid per share

17.00

20.00

21.00

23.00

607.61Equity attributable to owners of the p­ arent
to total assets per share

614.08657.50716.94797.08299,115,346

299,115,346

299,115,346

299,115,346

Gross profit to net sales

49.9%

49.1%

49.5%

50.6%

Selling, general and ­administrative expenses
to net sales

41.5

41.0

40.8

40.5

299,115,346

Number of outstanding shares­(common stock)

Governance

68.23

Ratios (%)
58.3%

6.6
7.4
4.8
12.2

Operating profit to net sales

8.9

9.8

8.6

12.4

Profit before tax to net sales

9.3

10.2

9.0

12.5

Profit for the period attributable to owners of
the parent to net sales

6.1

7.3

5.9

8.4

Equity attributable to owners of the parent
to profit for the period (ROE)

12.7

13.9

10.3

13.6

Lion Integrated Report 2021 78

Performance

51.7

Major Non-Financial Data
Environment
Lion established the Eco Vision 2020 environmental targets in 2013. In line with these targets, we have striven to realize asustainable planet while working to achieve our 2020 targets related to realizing a low-carbon society, realizing a sound material
cycle society, harmonizing with nature and environmental education. In 2020, the final year of Phase 3 (2018–2020) of Eco Vision
2020, our employees worked as one to achieve the Lion Group’s environmental targets.
Eco Vision 2020 Achievements and Targets

Education

Harmonizing with
NatureGreenhouse gases(domestic)

Within the
Company

Outside theCompany

Reduction ofgreenhouse gases
from businessactivities

Reduction ofgreenhouse gases
during and after
product use

Achievements in 2019

Achievements in 2020

Targets for 2020

Emission intensity per unit of
net sales
40% reduction (compared to 2010)
53% reduction (compared to 1990)

Emission intensity per unit of
net sales
44% reduction (compared to 2010)
56% reduction (compared to 1990)

Emission intensity per unit of
net sales
34% reduction (compared to 2010)
49% reduction (compared to 1990)

Absolute quantity
52% reduction (compared to 1990)

Absolute quantity
53% reduction (compared to 1990)

Absolute quantity
40% reduction (compared to 1990)

Emission intensity per unit of
net sales
9% reduction (compared to 2010)
53% reduction (compared to 1990)

Emission intensity per unit of
net sales
12% reduction (compared to 2010)
55% reduction (compared to 1990)

Emission intensity per unit of
net sales
9% reduction (compared to 2010)
53% reduction (compared to 1990)

Absolute quantity
50% reduction (compared to 1990)

Absolute quantity
50% reduction (compared to 1990)

Absolute quantity
41% reduction (compared to 1990)

Reduction ofgreenhouse gases
from businessactivities overseas*1

Emission intensity per unit
production
1% reduction (compared to 2017)

Emission intensity per unit
production
3% reduction (compared to 2017)

Emission intensity per unit
production
1% reduction year on year

Outside theCompany

Reduction ofgreenhouse gases
from during and after
product use overseas

Reduction of 45 thousand
tons annually

Reduction of 33 thousand
tons annually

Reduction of 100 thousand
tons annually

Within the
Company

Reduction of water
use in businessactivities

Water use per unit of net sales
41% reduction (compared to 2010)
54% reduction (compared to 2000)

Water use per unit of net sales
46% reduction (compared to 2010)
58% reduction (compared to 2000)

Water use per unit of net sales
15% reduction (compared to 2010)
35% reduction (compared to 2000)

Absolute quantity
53% reduction (compared to 2000)

Absolute quantity
55% reduction (compared to 2000)

Absolute quantity
23% reduction (compared to 2000)

Outside theCompany

Reduction of water
use at households
using our products

Water use per unit of net sales
29% reduction (compared to 2010)
53% reduction (compared to 2000)

Water use per unit of net sales
31% reduction (compared to 2010)
55% reduction (compared to 2000)

Water use per unit of net sales
17% reduction (compared to 2010)
45% reduction (compared to 2000)

Absolute quantity
51% reduction (compared to 2000)

Absolute quantity
51% reduction (compared to 2000)

Absolute quantity
33% reduction (compared to 2000)

Waste

Zero emissions within
the Company*2

Achievement of zero emissions at
all domestic production sites*4

Achievement of zero emissions at
all domestic production sites*4

Zero emissions at all domestic
production sites*4

Wastewater

Recycling of factory
wastewater
discharge*3

Operation of facilities to recycle
wastewater at Chiba Plant

Operation of facilities to recycle
wastewater at Chiba Plant

Recycle industrial wastewater atmultiple plants

Procurement

Biodiversity-friendly
procurement of ­plant-derived oils

Continued purchasing RSPO*5certified palm oil derivatives

RSPO*5-certified palm oil derivative
usage: 93% (as of December 31,
2020, based on key raw materials)

All palm oil derivatives purchased
to be RSPO-certified

Biodiversity

Enhancement of
biodiversity
conservation activities

Carried out at all Lion plants, with
implementation expanding at
offices of Lion and its affiliates

Carried out at all domestic sites

Carry out at all domestic sites

Enhancement ofenvironmental
awareness andeducation for
consumers

0.9 times increase in consumer
participants in our awarenessactivities (compared to 2010)

None(All activities cancelled due to the
COVID-19 pandemic)

Double the number of consumer
participants in our awarenessactivities (compared to 2010)

Greenhouse gases(overseas)

Within the
Company

Water

Realizing a Sound Material-Cycle Society

Realizing a Low Carbon Society

Categories

Awareness andeducation insociety*1. Covers Lion and consolidated subsidiaries as of December 31, 2020
*2. The waste recycling ratio is 99% or more, excluding recycling residues*3. Wastewater from production processes*4. Chiba Plant, Odawara Plant, Osaka Plant, Akashi Plant, Hirai Office Site, Sapporo Office, Sendai Office, Headquarters/Tokyo Office, Nagoya Office, Osaka Office, Fukuoka
Office, Lion Chemical Co., Ltd. Fine Chemical Production Site, Lion Chemical Co., Ltd. Oleochemical Production Site, Lion Specialty Chemicals Corporation Yokkaichi
Production Site, Lion Specialty Chemicals Corporation Ono Production Site
*5. Roundtable on Sustainable Palm Oil

79 Lion Integrated Report 2021

Community Involvement

Achievements in2017

Categories
Oral care habit
promotion activities/
Oral Health Event ofTooth Brushing
for Children
Hand washing habit
promotion activities/
Correct hand washingmethod education

Achievements in2018

Achievements in2019

Achievements in
2020

Remarks

Participants

Japan and other
Asian countries;
about 160,000
elementary school
childrenJapan and other
Asian countries;
about 210,000
elementary school
childrenJapan and other
Asian countries;
about 240,000
elementary school
childrenJapan and other
Asian countries;
about 269,000
elementary school
childrenParticipants

6,696

5,917

4,146

200

Held annually since 1932
during Dental/Oral HealthWeek (June 4 to 10), targeting
elementary school children

Our Path & DNA

Since its founding, Lion has sought to help consumers enjoy healthy living through the provision of products while carrying out
educational activities and communication aimed at creating better living habits.

Fun educational activities
about hand washing, mainly
at kindergartens

In fiscal 2019, spending on social contribution activities totaled ¥510 million (¥360 million in funds donated and ¥150 million in
activity expenses).

Vision & Future

Social Contribution Activity Spending
Every year, Lion surveys the domestic Group on the implementation status of social contribution activities to collect and manage
data on funds invested in and items donated to each activity.

* Figures for fiscal 2020 will be published on Lion’s sustainability website in late June 2021

Human Resources* Scope: Lion Corporation, non-consolidated basis (including employees on loan)

Categories
Employees
Female employee ratio
New employees (New graduates)

Male

Achievements in 2017

Achievements in 2018

Achievements in 2019

Achievements in 2020

2,203

2,267

1,863

1,971

Female

821

917

987

1,148

%

27.1%

28.8%

34.6%

36.8%

Male

57

63

42

54

Female

36

33

34

33

216

210

160

185

%

7.1%

6.6%

5.6%

5.9%

Temporary employees

Number

458

532

528

196

Female employees at the managementlevel*1

Number

170

186

200

226

%

14.4%

15.8%

17.1%

18.4%

Number

63

76

77

75

%

2.4%

2.8%

2.8%

2.7%

Employees with disabilities

Employees who took childcare leave

Male

9

16

13

32

Female

57

53

61*2

78
0

Male

0

0

0

Female

57

64

63*

73

Average overtime per month

Hours

12.5

13.7

13.5

8.7

%

50.7%

60.3%

73.7%

68.6%

Male

20.4

19.6

17.2

16.7

Female

18.0

16.8

14.1

12.8

Number

1

2

8*2

10

0.4%

0.8%

3.0%*

4.0%

Annual paid leave used
Average service years
Employees who resigned within three
years of entering the Company

%

2

2

*1. Personnel holding managerial positions at the level of assistant manager or higher (excluding employees on loan)*2. The figures have been revised due to an error in past data.

Lion Integrated Report 2021 80

Performance

Employees who took shorter work hours
for childcare

Governance

NumberRe-hired retirees

Strategy & BusinessCorporate Overview(As of December 31, 2020)

Corporate Overview

Stock Information

Corporate Name Lion Corporation

Stock ListingFirst Section ofTokyo Stock Exchange

Security Code

4912

Transfer Agent

Mitsubishi UFJ Trust andBanking Corporation

Foundation

October 30, 1891

Establishment

September 1918

Capital¥34,433 million

Address

3-7, Honjo 1-chome, Sumida-ku,
Tokyo 130-8644, Japan

Number of Common Stock 299,115,346 shares(Issued and outstanding)

Employees

3,119 (Consolidated: 7,452)

Number of Shareholders

Shareholders by Category

78,987

Principal Shareholders

Foreign institutions
and individuals

Individual investors
and others (including
treasury stock)

23.17%

18.63%
Japanese financial
institutions

Other corporations

15.50%

41.37%

Financial instrument
firms

1.33%

Shareholding ratio(%)

Shareholders

Custody Bank of Japan, Ltd. (Trust Account)

10.51

The Master Trust Bank of Japan, Ltd. (Trust Account)

7.10

Custody Bank of Japan, Ltd. As trustee for­Mizuho Bank, Ltd. Retirement Benefit Trust Accountre-entrusted by Mizuho Trust and Banking Co., Ltd.

5.59

MUFG Bank, Ltd.

2.95

STATE STREET BANK AND TRUST COMPANY
505223

2.13

Tokio Marine & Nichido Fire Insurance Co., Ltd.

1.52

Custody Bank of Japan, Ltd. (Trust Account 7)

1.47

Mitsubishi UFJ Trust and Banking Corporation

1.45

Custody Bank of Japan, Ltd. (Trust Account 5)

1.41

Meiji Yasuda Life Insurance Company

1.40

Share Price and Trading Volume
Lion shares
(Yen)
3,000

TOPIX

2,500
2,000
1,500
1,000
500
0
Trading volume(Millions of shares)
50
40
30
20
10
0

1

2

3

4

5

81 Lion Integrated Report 2021

6 7
2018

8

9

10 11 12

1

2

3

4

5

6 7
2019

8

9

10 11 12

1

2

3

4

5

6 7
2020

8

9

10 11 12

External Evaluations and Participation in External Groups(As of May, 2021)

In addition to financial considerations, the Lion Group works to address environmental, social and governance issues. Lionhas been selected for inclusion in leading socially responsible investing (SRI) indices.

Inclusion in SRI Indices

Our Path & DNA

In addition, our environmental, logistics and human resources initiatives have been highly evaluated by governmental andother external institutions.

Vision & Future

Evaluations and Certifications
Overall CSR

Strategy & Business

Environment

Logistics

Human Resources

Governance
Governance* Lion Hygiene Co., Ltd.

* Lion Hygiene Co., Ltd.

Participation in External Organizations

Performance

RSPO

Lion Integrated Report 2021 82

Inquiries
Lion Corporation
3-7, Honjo 1-chome,
Sumida-ku, Tokyo 130-8644, Japan
Website (English): https://www.lion.co.jp/en/
Tel: +81-3-3621-6211
Published June 2021