LION Integrated Report 2024

Habits have the power to change society. Lion is working for healthy minds and bodies byredesigning habits for more people in more regions and in more aspects of daily living.

Make a difference in everyday lives by redesigning habits

Corporate Philosophy

Our purpose reflects our desire to help people
achieve healthy minds and bodies and ourhopes for a sustainable society.
Our beliefs are the linchpin of our businessactivities, guiding our thinking, actions
and decisions as we strive to put our purpose
into practice.
The basis of these beliefs is our DNA, which
has been handed down since Lion’s founding.

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Contents
Page 9Message from the President

Page 15

Message from the Director
Responsible for Finance

Our Purpose

Sustainability

Lion at a Glance................................................................................... 5

Message from the Director Responsible for Sustainability............. 40

Creating Habits and Achieving Business Growth...........................6

Sustainability Initiatives

FeatureR einforcing Initiatives to Address theGenerating Social and Economic Value through theS ustainability Material Issues....................................................... 41
Top-Priority Sustainability Material Issues:

Creation of Oral Care Habits........................................................... 7

Creating Healthy Living Habits................................................. 45

Value Creation Process....................................................................... 8P romoting Environmental Initiatives for a
Sustainable Planet................................................................. 47

Our Strategy

Disclosure Based on the TCFD Recommendations.................... 50

Message from the President............................................................... 9
Message from the Director Responsible for Finance...................... 15
Vision2030 and the Medium-term Management Plans.................... 18

Corporate GovernanceThree Growth Strategies

Message from the Chairman............................................................. 52

1. Accelerate Growth in Four Fields of Value Creation

P.52

Business Development Aimed at the Evolution

Message from the Chairman

and Expansion of Habit Redesign............................................ 19
Oral Health................................................................................. 20

P.54

Messages from External Directors

Infection Control........................................................................ 24
Smart Housework...................................................................... 25

Messages from External Directors................................................... 54
Corporate Governance...................................................................... 56
Compliance........................................................................................ 62
Risk Management.................................................................... 63
Leadership Team............................................................................... 65

Expansion of the Overseas Business........................................... 26

Performance/Data

Research and Development.......................................................... 29

Results by Business Segment.......................................................... 67

Intellectual Property...................................................................... 31

Consumer Products Business (Japan)......................................... 68
Overseas Business........................................................................ 69

2. Transform Our Business Foundations for Growth
Digital Transformation................................................................... 32
Supply Chain Management........................................................... 33

3. Generating Dynamism to Realize Innovative Change.
Human Capital....................................................................... 35

Editorial Policy

Regarding Forward-Looking Statements
This report contains forward-looking statements on subjects that include matters related to future business plans, corporate strategies andforecasts of performance. Such statements were formulated based on information that was available at the time of the preparation of thisintegrated report and contain uncertainties regarding such factors as economic conditions, market trends and foreign currency risks. Actual
results may differ from the information presented in these forward-looking statements.

Key Non-Financial Data.................................................................... 72
External Evaluations and Participation inExternal Organizations.................................................................. 73
Corporate Overview and Stock Information.................................... 74

Lion’s Disclosure

Lion Integrated Report 2024 is intended to provide Lion’s shareholders, investors and other stakeholders with key information
about the Company’s initiatives for increasing its corporate value over the medium to long term by fulfilling its purpose of “Make adifference in everyday lives by redesigning habits: ReDesign” and facilitating deeper understanding of the Lion Group.
Reporting Period: From January 1 to December 31, 2023 (fiscal 2023) (Some information covers activities in 2024.)
Scope of Report: Lion Corporation and all of its consolidated subsidiaries, in principle.
Note: Where the scope of coverage of reported activities or data differ from the above, a description is provided.
Accounting Standards Applied: International Financial Reporting Standards (IFRS)
Referenced Guidelines:• International Integrated Reporting Framework issued by the IFRS Foundation• Guidance for Integrated Corporate Disclosure and Company-Investor Dialogue for Collaborative Value Creation issued by the Ministry of
Economy, Trade and Industry

Industrial Products Business........................................................ 70
Key Financial Data............................................................................. 71

Financial Information

Reports

Non-Financial Information

Lion Integrated Report• Securities Report2024(Japanese only)• Summary of Consolidated
Financial Statements• Convocation of the Annual
General Meeting of Shareholders• LION LETTER business report(Japanese only)

Investor Relations• Corporate Governance Report• Lion’s Sustainability: SDG-Related
Initiatives (Japanese only)
LION’sSUSTAINABILITY
2023～より良い生活習慣づくりで取り組む SDGs ～Sustainability

Company
Websitehttps://www.lion.co.jp/en/ir/

https://www.lion.co.jp/en/sustainability/3Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Integrated Report 2024 Overview

Clicking on this icon, which can be found at
the top right of every page, will take you backto this Integrated Report 2024 Overview.
Please use this function to get an overall feelfor the content as you read.

In fulfilling its purpose, Lion has built up a portfolio of management resources over many years of sincere dedication to manufacturing andredesigning habits for the better. We will make every effort to put these resources to work for even more people, regions and situations in daily life.
Our aim is to increase corporate value by helping to make daily living and society better.

Our Purpose

PurposeThis section describes how we create social and economic value by
fulfilling our purpose: Make a difference in everyday lives by redesigning
habits: ReDesign, incorporating the history of our business growth andour value creation process.

Make a difference in everyday lives by redesigning habits

Vision2030 Long-term Strategic Framework

Becoming an advanced daily healthcare company

Management Vision

Three Growth Strategies

1

Accelerate growth in four fields ofvalue creation
Oral Health

Infection Control

Smart Housework

Well-Being

Pages 5-8

Reinforcing Initiatives to Address theSustainability Material Issues

Our Strategy

Pages 9-51

This section examines the medium- to long-term strategies that will
enable us to achieve our management vision for 2030 of “Becoming an
advanced daily healthcare company.” Centered on two main themes—
Three Growth Strategies and Reinforcing Initiatives to Address theSustainability Material Issues—this section describes our strategic
approach and progress.

Top-Priority Sustainability Material Issues
Expansion of the Overseas Business
Source of Our Competitive Advantage
Research and Development

2

Transform our businessfoundations for growth
DigitalTransformation

3Intellectual Property

Creating Healthy Living Habits
Promoting Environmental Initiatives fora Sustainable Planet

Response to TCFD Recommendations

Corporate Governance

Pages 52-66

This section describes our approach, systems and initiatives forcorporate governance aimed at improving the transparency of ourcorporate activities, reinforcing our supervisory functions and expediting
decision-making.

Supply Chain
Management

Generate dynamism to realize
innovative change
Human Capital

Performance/Data

Business Segments

Consumer Products Business

Overseas BusinessCorporate GovernanceIndustrial Products Business

Pages 67-74

This section includes information on the market environment for eachbusiness segment (risks and opportunities), the progress of our mediumto long-term strategies and the Group’s financial and non-financial data.

4

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Lion at a Glance

Net Sales by Segment

Core Operating Income by Segment

Other Business

0.4%

Industrial
Products
Business

9.5%

Industrial
Products
Business

17.0%
Net Sales¥402.7billion
Consumer
Products
Business

33.3%

7.7%

¥20.1 billion(2023)

Overseas
Business

Other BusinessCore
Operating
Income56.8%

Overseas
Business(2023)

Offices and Other Work Sites
Domestic

Consumer
Products
Business

Offices and
Other

27.0%

Offices

48.3%

ResearchCenters

Note: Segment sales figures are external sales, net of intersegment sales and adjustments.

PlantsPage 67: Results by Business Segment

Consumer Products Business
In Japan, our Consumer Products Business offers a wide range of
products and services for total care, from prevention of issues tomaintenance and ease-of-use. Products include toothpastes,laundry detergents and over-the-counter (OTC) pharmaceuticals.

Net Sales

27.2%
Net Sales¥267.3 billion(2023)

Fabric Care 22.8%¥148.0 billion

Beauty Care

9.1%

Living Care

8.3%

38.9%

Oral Care

22.7%
9.9%

11

12
6

Affiliates

924Overseas Business
Lion operates businesses in Southeast and South Asia andNortheast Asia, providing products useful for daily living,
inclusive of all cultures and languages.

Overseas

Industrial Products Business
Our Industrial Products Business comprises the Chemical
Products Business, which handles surfactants, electroconductive carbon and other chemicals; the Detergents for
Institutional Use Business, which sells detergents and handsoaps for hotels and restaurant kitchens; and Other Business.

Northeast Asia

Other

Pharmaceuticals

7,550

Employees(consolidated)

Chemical Products
Mobility

Electronics

Eco Chemicals

Care Chemicals• Rubber processing
agents• Rubber additive agents• Electro-conductive
carbon• Pressure-sensitiveadhesives• Concrete admixtures• Surfactants• Cosmetics ingredients(2023)Southeast andSouth Asia

61.1%

Detergents for Institutional Use
Dishwasher
detergents

Alcohol sanitizers

Hand soaps

Vegetable-washingdetergents5

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Creating Habits and Achieving Business Growth2023¥402.7billion
Overseas sites: 11

Net sales:

Lion’s origins lie in soap and toothpaste. “Fulfilling a spirit of love” since our founding, we have sought to support mental andphysical health by providing consumers with superior products while engaging in communication and educational activities aimed
at promoting better living habits. We recognized long ago that global environmental conservation is an issue that the whole world
shares and have continuously worked to develop and propose environmentally friendly products and habits. By addressing lifestyleand social issues through better living habit proposals, we aim to contribute to consumers’ everyday lives while achieving
sustainable business growth.
Net Sales

6

Integrated Report 2024 Overview

Make a difference in everyday lives by redesigning habits

IFRS

Hand
washing

Dishwashing
Vegetable
washing
Laundry
Toothbrushing

Lion founder
Tomijiro Kobayashi

1891

1950

1990

Prevalence of cavities among children
Lifestyle andSocial Issues

2000

Diversifying oral health issues

2010

2020

From oral to overall health

Laundry habits

Health hazards caused by E. coli

Global COVID-19 pandemic

Environmental problems

Main Initiatives for Creating Habits
Commencement of activities to promote and instill tooth brushing habits
Hosting of events to teach children correct
tooth brushing techniques(Currently called the Oral Health Event ofTooth Brushing for Children)

Promotion of oral healthcare that leads to overall health
CLINICA
Advantage
SeriesFor preventive
dentistry

Lion F CreamJapan’s first toothpaste containing
fluoride for the prevention of cavities
Dentor Systema Lion Series
For the prevention of gum disease

Oral Care

Spreading awareness of and education about correct laundry techniques
Hosting laundry workshops to teachcorrect techniques for washing clothes
using soap

Cleanliness andHygieneUse of plant-based raw materials
Plant-derived Lion Laundry Soap
Japan’s first plant-based household
laundry soap

Environmental
Protection

Response to increasingly diverse oral health issues

Response to diverse consumer needs and rising awareness of cleanliness
Mama Lemon
Dishwashing soapthat is gentle on thehands and can also
be used to washvegetables

Dash
Addressing the issue of
foaming, polluted rivers
using a highlybiodegradable surfactant

Contribution to clean and hygienic lifestyles in Asia
Rollout of KireiKirei
across Asia andactivities to spreadawareness of andeducate people about
handwashing habits

KireiKirei
A hand soap
containing
antibacterial
ingredients

Addressing various environmental issues using advanced technologies

Activities to spreadawareness of andeducate people in
Asia about oral care
habitsEstablishing environmentally friendly habits through products and communication

Murin TOP
Addressing the issue ofeutrophication with thelaunch of the industry’s first
phosphate-free detergent
Promoting refill habits

NANOX one
A powerful laundry
detergent that cleans
thoroughly while
extending the lifespanof clothes

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

7

Generating Social and Economic Value throughthe Creation of Oral Care Habits
Instilling Tooth Brushing Habits
When Lion was founded in the late 1800s, tooth brushing was not yet widelypracticed in Japan, and around 96% of children had cavities. Senior management
at the time felt that the situation presented a real crisis with regard to the nation’s
future, so in addition to developing and marketing oral care products, Lion began
carrying out activities to spread awareness and educate people about oral health.
Over the years, Lion has continued to conduct activities to firmly instill oral
care habits in society. These activities include the Oral Health Event of Tooth
Brushing for Children, which has taught children correct tooth brushing methods
for more than 80 years; the establishment of the Lion Foundation for Dental
Health, which spreads awareness of and educates people about oral health; andthe use of advertising to raise awareness of the importance of tooth brushing. As
a result, approximately 80% of consumers brush their teeth at least twice a day, afivefold increase over the past 50 years.
Concurrently, the proportion of elementary school children with cavities—
previously an issue—has fallen to around one in three, thus indicating that theestablishment of correct oral care habits has significantly helped to improve
people’s oral health. Meanwhile, the size of the toothpaste market has increased
fourfold. In this way, creating habits that contribute to better consumer healthwhile revitalizing product markets has driven the growth of Lion’s businesses.

Toothpaste Market Scale, Percentage of Consumers Who Brush At
Least Twice a Day and Percentage of Children Aged 10 to 14 Years
with Cavities (Japan)
Toothpaste market scale
Percentage of people brushing at least twice a day
Percentage of children aged 10 to 14 years with cavities(Billions of yen)
140
120

(%)
100
80

100
80

60

60

40

40
20
0

20
0

1969
1981
2011
2022
Sources: Market size from a Lion Corporation survey; tooth brushing frequency andpercentage of children aged 10 to 14 years with cavities (treated and untreated)from Survey of Dental Diseases by the Ministry of Health, Labour and Welfare.

Fostering toothbrushing habits

Percentage ofConsumers Who BrushAt Least Twice a Day
Approx. fivefold
increase*

Social value

Economic value

Improved oral healthExpansion and vitalizationof the toothpaste market

Proportion of children aged
10 to 14 with cavities

The toothpaste market

Approx.

1in 3*

Approx.

fourfold increase**Comparison between 1969 and 2022

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

8

Value Creation Process
In fulfilling its purpose, Lion has built up a portfolio of management resources over many years of sincere dedication to manufacturing and redesigning habits for the better.
To achieve our management vision for 2030, “Becoming an advanced daily healthcare company,” we will create “Positive Habits” for even more people, regions and situations in daily life, with a focus on ourfour fields of value creation, which emphasize such habits. Our aim is to increase corporate value by helping to make daily living and society better.

InputsManagement resources
cultivated over many
years of creating habits
Consumer researchand technologicaldevelopment
capabilities

Outputs

Redesigning habits foreven more people,
regions and situations
in daily life

Creation and proposal of“Positive Habits”

Improvement of dailyliving and society

Vision2030

Vision for 2030

Advance our three growthstrategies

Value creation through habits• Accelerate growth in four fields of value creation• Transform our business foundations for growth• Generate dynamism to realize innovative change

Benefit/quality of habit×
Frequency of engaging in habit×
No. of people adopting habit

Trust ofsuppliers

Make a difference in everyday lives by redesigning habits

Creation of better
living habits

Products andbrands that are
widely loved bycustomers

Diversehuman
resources
Stablefinancial
base

Outcomes

Enhance consumer QOL

Stablesupplychain

A sincere commitment
to manufacturing

Business Activities

Reinforcing initiatives toaddress the Sustainability
Material Issues

Socialvalue

Becoming an advanced
daily healthcare company

1. Compared with 2017, absolute quantity
2. Compared with 2017, per unit of net sales

Envisioned Financial Performancein 2030

Infection Control

Smart
Housework

Well-Being• Oral care habits: 500 million people• Cleanliness and hygiene habits:
500 million people

Contribute to the realization of a decarbonized,
resource circulating society• Lifecycle CO2 emissions: 30% reduction1•P etrochemical-derived plastic usage: 70% or less• Lifecycle water usage: 30% reduction2

Priority Fields
Oral Health• Total number of persons provided withproducts, services and information aimed atcreating healthy living habits: 1 billion

Economicvalue

Net sales

Approx.¥600 billion

1

EBITDA

Approx.¥80 billion

Core operating
income2

Approx.¥50 billion(Approx. 50% from the Overseas Business)

ROIC3
ROE

1. Calculated as the sum of core operating income and depreciation
and amortization (excluding that of right-of-use assets)
2. Calculated by subtracting selling, general andadministrative expenses from gross profit
3. Calculated as net operating profit after tax (NOPAT)
divided by the average invested capital (total equity plus
interest bearing liabilities) during the period

A higher level of corporate governanceCapital reinvestment and distribution

Changes insociety

Diversifying
valuesAging
population

Environmental
problems

8–12%
10–14%

Infectious
disease risk

Digitaltransformation

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

9

Message from the President

Evolving into an Organization That Consistently
Creates Positive Habits
Contributing to Society through the Creation ofBetter Habits Is What Makes Lion Uniqueheart of Lion’s purpose—in addition to being our way of

At Lion, we have defined our purpose as “Make a difference indirectly linked to the enhancement of our economic value.

everyday lives by redesigning habits: ReDesign.” In the 132

contributing to society, it helps to create new markets and is
As populations decline, we can no longer rely on

years since our founding, we have helped to enhance people’s

conventional approaches to expand our markets. That said, we

physical and mental health by proposing improvements to daily

believe that creating habits is a highly effective way to achieve

habits such as tooth brushing and laundry. We believe that wesustainable market growth. This approach is applicable not only

can best contribute to society through this unique approach.

to Japan, where the population is already falling. It is also a way

Moreover, the process of habits formation is very effective forfor us to contribute to society and boost our economic value inestablishing new markets for related products and services, asNortheast Asia and parts of Southeast and South Asia, where

well as for growing existing markets.

populations will begin to decline in the next few years.

For example, according to a survey conducted in Japan

However, creating better habits is more easily said thanaround 100 years ago, only 7% of elementary school students,

done. Establishing the habit of nighttime tooth brushing tookor less than one in ten, brushed their teeth twice a day. Lion was

nearly a century. In today’s society, where new challenges

the first company in Japan to sell toothpaste for children. For

emerge on a daily basis, we must stay ahead of themore than a century, we have worked tirelessly to spread thecompetition in establishing new habits. Positive Habits ishabit of brushing twice a day, morning and night. For example,

our management strategy for consistently creating new

we have created pamphlets to teach children the importance ofhabits. Our strategy is not about simply manufacturing

brushing their teeth before bed and published related

and selling products, but rather, it involves enhancing

newspaper advertisements. Brushing one’s teeth in the morning

our social and economic value by making ourand before bed has become common practice and is firmly

business the creation and evolution of Positive

established in Japan. The number of people brushing their teeth

Habits.

1

has increased over the past 50 years, and the average numberof times an individual brushes their teeth each day has risen
from once to 2.2 times, resulting in a fourfold increase in the2

3

size of the toothpaste market. Developing good habits is at the

1. Source: 1925 survey of the oral cleaning habits of 27,872 elementary school
students in grades 1 through 6 in Japan(from Okamoto, K. The State of Tooth Brushing Practice in Schools)
2. Source: Takeuchi, M. Oral Hygiene, Nagasue Shoten, Inc.
3. Source: 2022 Lion survey of oral care

Masayuki Takemori
Representative Director,
President and Executive Officer

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

10

Message from the President

Consistently Creating Positive Habits
Habits can be largely categorized into Positive Habits, which
one engages in willingly, actively, optimistically, and eagerly, and

The Importance of Positivity

Positivity accelerates the creation of habits. It also leads tomarket expansion.
Change in Frequency of Engagement in Habits When Optimistic“reluctant habits,” which one engages in more out of necessity.
The most important thing for us when proposing better habits iswhether those proposals make customers feel positive. A
positive feeling can transform a habit into something even better,
generating both social and economic value.

Engaging in oral care habits out of necessity
80%

62%
60%

40%

According to our own research, people who are positive
about oral care habits are about 50% more likely to engage in0%

better habits that those who are reluctant.
If we can make all people feel positive about oral care habits,
not only will it benefit society by improving people’s oral health,but each oral care habit has the potential to increase our
economic value by ¥10 billion.
Going forward, we will improve the accuracy of our proposals
for people throughout Asia by elucidating the benefits ofpositivity in oral care, as well as hand washing, laundry, cleaning,
health maintenance and various other habits.
To ensure consistent creation of Positive Habits, we areworking to evolve in several ways. First, we will improve our

50%
43%

20%

4

¥13
billion¥10
billion38%

31%

Attend dental checkup

Engaging in oral care habits optimisticallyMarket creation effect¥7.5
billion
49%
35%

26%

Brush teeth three times a day

Toothpaste costing at least ¥500

Mouthwash usage

Source: Calculated based on a 2023 Lion oral care survey of 1,600 women in Japan by the Japan
Dentifrice Manufacturers Association (JDMA). Figures for “Engaging in oral care habits optimistically”
are Lion estimates assuming all people engaged in oral care habits optimistically.

As an example, to assess new habits we will present a model
representing social and economic value. We believe that byvisualizing the formation of habits along three axes—(1) benefits/quality of the habit; (2) frequency of engagement in the habit;and (3) number of people adopting the habit—we can enhance
the accuracy of our proposals.
Assessing Value along Three Axes
(1) Benefit/Qualityof the habitorganizational capabilities for creating Positive Habits. In addition
to comprehensively promoting the three processes required for
habit creation—research, creation and assessment—we willreinforce and evolve expertise and organizational capabilities
across all departments, not only marketing and research, toraise the level of these processes, which will lead to theconsistent creation of Positive Habits.
4. Regular dental checkups, brushing teeth once a day, using a high-value-added toothpaste costing atleast ¥500, using mouthwash in addition to toothpaste and a toothbrush, etc.

(2) Frequency of engagementin the habit(3) No. of people engaging
in the habit

Clarifying the effectiveness of
Positive Habits to improve theaccuracy of our proposals

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

11

Message from the President
By creating Positive Habits in this way, we will achieve ouraims for Vision2030, supporting physical and mental healthcare
through better habits and protecting the global environment,
and in turn create social value. At the same time, through theevolution and expansion of these habits, by 2030 we aim tohave grown the business and achieve approximately ¥600 billion
in net sales, EBITDA of roughly ¥80 billion, and about ¥50 billion
in core operating income.

Progress in Vision2030 1st STAGE
Steady Investments in Foundations for
Business GrowthTo fulfill Vision2030, we envision three steps, or three mediumterm management plans, beginning with 1st STAGE. In 1st
STAGE, we are promoting a gear change toward future growth.
As part of these efforts, we are working to strengthen top-line
growth in the Overseas Business, and initiatives haveprogressed largely as expected. Specifically, the overseas sales
ratio has increased to 33%, and we have establishedbusinesses in Bangladesh and Vietnam. Moreover, we are also
working to evolve our existing businesses by proposing new
habits, and to create new businesses focused on oral care.
We have also steadily invested in foundations for businessgrowth. Aimed at enhancing domestic production capacity, ournew factory for toothpastes went online in 2021 (Sakaide City,
Kagawa Prefecture), and we are building a new factory forover-the-counter drugs (Odawara City, Kanagawa Prefecture),
which is scheduled to start operations in 2025.
Moreover, in 2022 we updated our core systems and areusing these new systems to speed up management decisionmaking and enhance operational efficiency. Furthermore, we areproactively implementing and utilizing digital technologies, basedon our belief that a greater understanding of society, markets
and customers can lead to the creation of new added value.		
We have also renewed our corporate philosophy to promote
the implementation of purpose-driven management, andgenerate dynamism in our personnel and organizations. The
introduction of a job-focused approach to our new personnel
system is also aimed at generating dynamism throughout theorganization through the success of autonomous individuals.
As a result of these and other measures, the consolidated net
sales growth rate in the current three-year medium-term
management plan (1st STAGE) has surpassed the growth rateduring the three years prior to the start of the plan, and as such
we believe that, to a certain extent, we have successfully
promoted a gear change toward future growth.

Steps Ahead of 2030

Vision2030 Targets
Social value

Contribute to the realization of a sustainable society

3rd STAGE (2028-2030)• Create the foundations for
subsequent growth

Enhance consumer QOL
Contribute to the realization of a decarbonized,
resource-circulating society

Vision2030

Becoming an advanced
daily healthcare company

Promote environmentally friendly habits with consumers
Decarbonized society: Create water- and power-saving habits
Resource-circulating society: Create refill habits and waste-free habits(Recycling)

2nd STAGE (2025-2027)

Economic value• Accelerate transformation andgrowth2028-2030

1st STAGE (2022-2024)• Get on a growth track and create
the foundations for new growth2022-2024

2025-2027

Net sales

Approx.¥600 billion(Overseas sales ratio: Approx. 50%)

EBITDA*
Core operating
incomeROIC
ROE

Approx.¥80 billion
Approx.¥50 billion

8 –12%
10 –14%*EBITDA = Core operating income + Depreciation and amortization(excluding that of right-of-use assets)

To a certain extent, we havesuccessfully promoted a gearchange toward future growth.

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

12

Message from the President

Issues Remaining in Vision2030 1st STAGE
Initiatives Aimed at Fulfillment of Vision2030
While we were able to steadily invest in foundations for businessgrowth, we recognize that issues with profitability improvements
remain. In 2023, we aimed to increase profits for the first time inthree years through measures such as further growing theOverseas Business and enhancing our presence in fabric care,which had long been an issue. However, we were not able toachieve our initial targets, ending the year with a decrease inprofit. As president, I take these results very seriously.
Behind these results were various factors, including soaring
raw material prices caused by the war in Ukraine, rising
manufacturing costs due to labor shortages, a shift among
consumers to cheaper products in order to sustain current
lifestyles, and a drop in consumers’ desire for extra care items
such as fabric softener and mouthwash, as well as for new
proposals and products.
That said, we remain committed to achieving the performancetargets set forth in Vision2030, and we will continue to fine-tune
our medium- to long-term strategies in order to get back on
track toward our initial targets.
Specifically, for 2nd STAGE, which will cover the period from2025 through 2027, we decided to switch our focus from ourinitial theme of accelerating transformation and growth tostrengthening profitability. As the final year of 1st STAGE, 2024
is a crucial year for rebuilding our profit base, thus we havefine-tuned our focus on that goal.
In the Consumer Products Business, our policy over the
medium to long term will be to significantly improve both theabsolute amount of profit and the ratio of profit to net sales. To
do so, we believe that developing a cutting-edge portfolio will be
key. We will proactively invest in value-added products andservices mainly in the oral care field, while in non-core fields wewill enhance profitability by considering brand transfers andallocating management resources to priority areas.
Moreover, to achieve business structure reforms, we have
newly established three clear KPIs for the Group to work towardin the four years from now until 2027, the final year of 2nd
STAGE: increase net sales by ¥15 billion by adding value to andraising product prices, reduce the number of SKUs5 by 30%,
and reduce inventory (reduce inventory days by 30%).
We have positioned the strong-performing Overseas Businessas a growth driver for the Lion Group, and will continue tostrengthen growth measures. Among the countries where wealready operate, we will accelerate growth in China, a priority
market. With only 2%–3% share of major oral care markets, ourpresence in the country is still relatively low. We see plenty of
5. Stock keeping unit: Smallest unit measured in inventory management

Core operating income

Ahead of 2nd Stage (the Next Medium-term Management Plan)

2021
2022

Vision2030
Performance Goals

2023 Plan

Focus on strengthening profitability
Returning to initial growth track
2023 Results
1st STAGE¥600 billion
Core operating income Approx. ¥50 billion

Net sales 

Approx.

Consumer Products Business: Profit structure reforms
Overseas: Strengthening of growth measures

2nd STAGE

Initial theme

Gear change toward future growth

Accelerating transformation and growthFine-tuning

Rebuilding of profit base in 2024

Strengthening profitability

3rd STAGE
Creating the foundations for
subsequent growth

We will fine-tune our mediumto long-term strategies to getback on track toward our initial
targets.

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

13

Message from the President
opportunity and room for growth, with limited risks. In Bangladesh
and Vietnam, two countries we entered during 1st STAGE with aview to achieving medium- to long-term growth, we are working
to quickly bring our businesses up to speed. Our targets are net
sales of approximately ¥20 billion in Bangladesh andapproximately ¥10 billion in Vietnam by 2030.

Initiatives to Address the Sustainability
Material Issues
Based on our purpose, "Make a difference in everyday lives byredesigning habits: ReDesign,” our management strategy is topromote synergy between our initiatives to address theSustainability Material Issues and our three growth strategies.
As part of Vision2030, we have also set forth two top-priority
Sustainability Material Issues: “creating healthy living habits” and“promoting environmental initiatives for a sustainable planet.” Inparticular, to address the first issue, which essentially describes

what we do in our core business, we aim to provide products,
services, and information that can help a total of 1 billion people
form healthy living habits—500 million in the area of oral careand 500 million in the area of cleanliness and hygiene. For thesecond, we intend to make a major contribution throughproposals that promote planet-friendly lifestyles.
Moreover, as part of LION Eco Challenge 2050 (a set oflong-term environmental objectives we formulated in 2019), we
declared our intention to achieve a decarbonized, resourcecirculating society through co-creation with all of our stakeholders.
In addition to reducing household CO2 emissions bypromoting water-saving habits in laundry and cleaning, we hopeto create a resource-circulating society by promoting the habit ofreusing product bottles through the provision of refill pouches,
as well as “waste-free” habits through cooperation in post-use
collection. We have also set up the Sustainability Promotion
Council to ramp up the formulation and promotion of Companywide measures to pursue these initiatives.

Creating Healthy Living Habits

Total number of persons provided with products,
services, and information aimed at creating healthyliving habits: 1 billion
Provide opportunities for everyone to practice oral care whenevernecessary and foster oral care habits to promote health for all.

Oral care habits (500 million people)• Provide products and services• Communicate information• Conduct educational and awareness activities(Inclusive oral care, etc.)

Promote the establishment of cleanliness and hygiene habits thatprevent bacteria and viruses from entering the body across all
aspects of daily living, so that everyone can stay healthy.

Cleanliness and hygiene habits (500 million people)
日常生活のあらゆるシーンの中で、菌・ウイルスの体内侵入を防ぎ、• Provide products and services
誰もが健康でいられるよう、
清潔・衛生行動の習慣化を目指します。
• Communicate information• Educational and awareness activities(Promoting hand washing habits)

Becoming an Organization That Enjoys Taking
On New Challenges
In order to grow while strengthening profitability amid increasing
uncertainty in our business environment, we must increase thenumber of employees who take the initiative to demonstrate
their skills, come up with new ideas and take on new challenges
that yield results. To generate dynamism in our people andorganization as we work to fulfill Vision2030, we have beenworking to promote a corporate culture that encourages putting
our purpose into practice, and to implement professionalfulfillment reforms. In 2024, we extended the scope of our new
personnel system from only managers to include all employees,
creating a performance evaluation system that more clearly sets
goals aimed at putting our purpose into practice and fulfilling our
vision. We believe that this will help to increase the number of
employees who achieve their personal goals, live lives that are
rewarding and fulfilling and can achieve personal growth throughwork. I will manage the business in a way that allows each
employee to take on new challenges.

We must increase the numberof employees who take on new
challenges that yield results.

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Message from the President

To Our Stakeholders

environmental preservation initiatives in particular, benefits are

Through Positive Habits, our aim is to contribute to thegreatest when everyone in the value chain works together. I

achievement of a sustainable society for consumers across Asia,

hope that sharing ideas will enable our operations in Japan toand for our business clients in the case of our industrial products.

initiate major actions.

To do so, however, we must grow our businesses by taking the

Meanwhile, we will continue to create as many opportunities

lead and successively offering innovative solutions that ourfor dialogue as possible with our shareholders and investors.

competitors cannot imitate. This will help give rise to a virtuous

Through this dialogue we will strive to gain understanding andcycle linking the generation of growth drivers to the creation andsupport over the long term, while it will also provide an excellent

spread of Positive Habits, and in turn to an increase in customers

opportunity for us to discuss issues that we might haveand the expansion and continuation of production. Among theoverlooked.

many transformations underway, we are already seeing

Employees are among our most important stakeholders. The

noteworthy results. However, we cannot spend 100 years

renewal of our corporate philosophy, the revision of ourbuilding and establishing a single better habit, like we did for

personnel system, and the relocation of Lion’s head office werenighttime tooth brushing.

all aimed at boosting employee engagement and strengthening

We intend to communicate our thoughts and ideas to thethe Company’s human capital. Going forward, we will continue

suppliers, wholesalers and retailers who constitute our value

working to improve and strengthen our measures in this regard.

chain, and look forward to collaborating with them in various
settings to promote the creation of better habits. For

Lion will continue to evolve as an expert in creating andredesigning habits. We look forward to your continued support.

Integrated Report 2024 Overview

14

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Message from the Director Responsible for FinanceWorking to quickly improve results,
and promoting a shift tomanagement that enhances capitalefficiency

Kengo Fukuda
Director,
Senior Executive Officer

Moving Quickly to Restore Profitability andGet Back on a Profitable Growth Track
The Lion Group’s main focus under its Vision2030
long-term strategic framework is to enhance its presencefrom various standpoints— including markets, theeconomy and society—by strengthening its ability toachieve top-line growth while maintaining profitability. We
aim to leverage the business growth and associated cashfrom up-front investments to date in subsequent

Fical 2023 Performance Highlights

Outlook for 2024

Net sales: ¥402.7 billion(Up 3.3% year on year; 1.8% below forecast)

Net sales: ¥410.0 billion(Up 1.8% year on year)

Achieved double-digit growth in main overseas markets. In the Consumer
Products Business, sales of pharmaceuticals increased, but sales ofbeauty care and living care products decrease compared with the previous
year. In fabric care, we had targeted double-digit growth, but sales only
increased 1.4% year on year.

Overseas, our aim remains continuous growth in each country, particularly
China, a priority market. In the Consumer Products Business, we willprioritize profitability improvement and selectively develop highly profitableproduct categories. We forecast marginal sales increases in the Industrial
Products Business.

Core operating income: ¥20.1 billion(Down 14.5% year on year; 19.5% below forecast)Core operating income: ¥23.0 billion(Up 14.2% year on year)

Profit fell mainly due to higher expenses related to improving
competitiveness and other expenses. Gross profit grew less than
expected, as major new products in Japan struggled.

We aim to achieve an increase in profit for the first time in four years
through more precise allocation of management resources to priority fields,
as well as measures to enhance efficiency, such as adding greater value toand raising the price of products, reducing SKUs, and reviewing theallocation of expenses related to improving competitiveness.

investments that will yield even further business growth.
In 2023, the second year of Vision2030 1st STAGE,
In the Overseas Business, we steadily improved

equipment and inventories of both new and existing

profits for the first time in three years. To do so, we took

top-line growth, which has been a top priority, while

products, as well as expenses related to improving

major action, developing two new fabric care products

profits were also largely in line with our initial plans. In thecompetitiveness. To achieve our targets for Vision2030,

with the intention of establishing growth pillars. However,Consumer Products Business in Japan, against the

we must quickly improve profitability, mainly in the

we did not reach our sales targets. Consequently, overall

backdrop of lingering impacts from soaring raw material

Consumer Products Business. Doing so will enable us toresults fell short of the targets we set at the start of theprices caused by the weak yen, our analysis indicatedgenerate cash for growth investments, resuming ayear. EBITDA and return on invested capital (ROIC), key

that the current decline in profitability was mainly due topositive upward cycle that increases our corporate value.

management indicators in Vision2030, also fell short ofsubpar performance of major new products. This led toour targets.

various inefficiencies in assets such as manufacturing

we sought to achieve an increase in both sales and15

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Message from the Director Responsible for Finance

Restoring Profitability in the Consumer
Products Business through Portfolio
Improvements and Business Structure Reforms
As already mentioned, the challenges in the Consumer
Products Business are plain to see. It is essential that
we restructure the business to make it highly responsive
to change and highly profitable.
To do so, we must accelerate efforts to clearly
differentiate products in our domestic business portfolio,
prioritize them, and allocate management resources
accordingly. In oral care, one of our priority fields, we willcontinue to enhance the presence of our existing
businesses and focus on the creation of new markets
through new businesses. At the same time, we will lookat streamlining businesses and brands in non-priority
fields. We will also work to improve the ratio of grossprofit to net sales by adding greater value to and raising
the price of products. Adding greater value to andraising the price of products is not only a response tosoaring raw material prices. As a corporation, we believethat we should be making efforts on a regular basis toensure we earn an appropriate margin on the value weadd.
In terms of business structure reforms, we will work to
reduce inventories, streamline and utilize fixed assets, andimprove efficiency by consolidating the administrative
functions of and improving productivity of Group
companies using the shared services of Lion Expert
Business, which we launched in 2023.
By improving both business profitability andmanagement resource efficiency in this way, we willtransform the Consumer Products Business into abusiness with excellent capital efficiency.

Reinforcing Measures in the Overseas
Business for Continuous Growth
The Overseas Business is a key segment driving theLion Group’s growth. The three important elements ofour strategy for the Overseas Business are as follows.
First, while continuing to promote a high rate of
growth in China, which we have positioned as ourpriority market, we also aim to expand our presence inother key markets. In addition to Japan, a highproportion of the Group’s overall sales come fromThailand, Malaysia, and other countries in Asia.
Increasing the presence of our business in China to acertain extent will not only help to promote businessgrowth, but will also be an effective way to diversify risk.
Second, we aim to generate steady business resultsin the two new countries we entered in 1st STAGE. We
will ramp up growth investments in these countries toexpand the scope of the local business and improve theproduction and supply system. In this way, we intend toquickly put the businesses on track and have thesecountries contribute to the Group’s overall results.
Third, we will promote portfolio improvements
overseas. In Southeast and South Asia, two markets
that account for a significant proportion of sales in the
fabric care category, we will increase the sales ratio of
personal care products,* which have a higher ratio ofgross profit to net sales. Our aim is to structure a
portfolio for which business growth always leads to anincrease in profits.
* Oral care, beauty care and pharmaceutical products

KPIs for 2027 and 2030 (Compared with 2023)
Consumer Products Business

KPIs for 2027

Add high value to and raise theprice of products

Around ¥15 billion

Reduce SKUs

No. of SKUs: 30% reduction

Streamline competition-related
expenses

Sales-to-marketing expense
ratio: -2%

Reduce inventories

Days in inventory: 30%
reduction

Overseas Business

KPIs for 2030

Net sales in China

Around ¥100 billion

Net sales in Bangladesh

Around ¥20 billion

Net sales in Vietnam

Around ¥10 billion

Ratio of net sales from personalcare products

Approx. 50%

Steadily Implementing Strategic Investments
for Medium- to Long-term Growth
In terms of securing profits and generating cash,
although we have achieved our initial targets in
Vision2030 1st STAGE, I believe that vigorously pushing
forward with the above measures for profitability will help
us attain profits at the levels we set out as our initial
targets. In addition, we will steadily implement thestrategic investments required for growth while
comprehensively considering return on capital andfinancial condition.
For the time being, the Sakaide toothpaste factory(already in operation) and the new factory building forpharmaceuticals in Odawara (scheduled to go online in2025), are the final large-scale investment projects
scheduled for increasing production capacity in the16Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

17

Integrated Report 2024 Overview

Message from the Director Responsible for FinanceConsumer Products Business. Going forward, we
believe it is essential to ensure a reliable return on theseinvestments.
In addition to the above-mentioned production
capacity increases and similar projects in the countries
we have newly entered, the main goal of our investments
for growth is to acquire new capabilities. This includes
the acquisition of technologies and expertise fromdifferent industries for new business development
focused on emerging areas in oral health, and theacquisition of know-how on distribution infrastructure andbusinesses to further expand our operations in different
countries.
Moreover, as we announced in February 2024, in the
Industrial Products Business we have joined with apetrochemical company in Thailand to conduct a study
regarding increasing production capacity for electroconductive carbon black, which is used mainly insecondary batteries for electric vehicles. In this way, we
are also proactively looking at investment opportunities
that will enable us to contribute to addressing the
Sustainability Material Issues.
Such investments will help us to create better living
habits, support the health of more consumers in Asia,and contribute to a sustainable global environment
through our businesses. This in turn will increase our
economic value, which is a key strategy in Vision2030.

Further Enhancing Shareholder Returns
The Lion Group prioritizes continuous improvement ofcorporate value and its subsequent reflection inshareholder returns. During 1st STAGE, we aim to return
more than ¥30 billion to our shareholders through annual
dividend increases, flexible buybacks of Company
shares, and cancelation of treasury stock. Based on thispolicy, in the 2022–2023 period, shareholder returns
totaled approximately ¥24 billion.
In 2024, the final year of 1st STAGE, we conducted
another buyback of Company shares and cancelled a
total of around ¥10 billion in treasury stock in February.
We also plan to increase dividends for the ninth
consecutive term. We anticipate a total return ratio of
more than 90% from the combination of stock buybacks
and dividend payments.
At the same time, to boost our commitment to thestock market, we have recently changed our dividend
policy. Specifically, we have decided to implement
progressive dividends from 2024. While appropriately

and flexibly implementing our capital policy, we will strive
to ensure stable shareholder returns over the long term.
By promoting management of EBITDA and ROIC,
two key indicators for Vision2030, the Lion Group aims
to transform its business foundations, invest in growth,and enhance shareholder returns. By monitoring ROIC
and its individual components in each business, we will
determine the course of action for improvement andpush forward with efforts to improve profitability andbuild a financial base with high capital efficiency.
We recognize that 2024 is a key year in achieving thetargets of Vision 2030. In addition to rebuilding our profit
base to achieve an increase in profit for the first time infour years, we will do everything we can to get back on
a growth track. We look forward to your continued
support.

Shareholder Returns(Yen)

Interim dividend

Year-end dividend (left scale)

Consolidated dividend payout ratio (right scale)

（%）
50

50.6

50

45

45
40

40.4

35
30
25

29.7
25.4

23.6

20
15
10
5
0

10

13

24.9

22.7
20

17
10

5

8

5

5

7

2015

2016

2017

21

22.4
23
12

29.4

32.4

24

25

26

27

12

13

13

14

10

11

10

10

11

12

12

13

13

2018

2019

2020

2021

2022

2023

2024
(Forecast)

40
35
30
25
20
15
10
5
0

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

18

Vision2030 and the Medium-term Management Plans
Lion is reinforcing its management based on its purpose, “Make a difference in everyday lives by redesigning habits: ReDesign” to achieve its management vision for 2030 of “Becoming an advanced daily
healthcare company.” By promoting synergy between our Sustainability Material Issues and three growth strategies, we aim to contribute to the realization of a sustainable society and achieve business growth.
We will implement Vision2030 in three consecutive 3-year medium-term management plans—1st STAGE, 2nd STAGE and 3rd STAGE—adjusting strategy and policy according to changes in the businessenvironment to enhance precision as we go.

Overview of Vision2030

Three Growth Strategies
Vision2030 Targets

Social ValueManagement
visionManagement
strategyContribute to a sustainable society

Becoming an advanced daily
healthcare company
Reinforcing initiatives toaddress the Sustainability
Material Issues• Enhance consumer QOL

Accelerate growth in four
fields of value creation

・ Total number of persons provided with products, services andinformation aimed at creating healthy living habits: 1 billion

・ Oral care habits: 500 million people
・ Cleanliness and hygiene habits: 500 million people• Contribute to the realization of a decarbonized,
resource-circulating society

Advance our three growth strategies

・ Lifecycle CO2 emissions: 30% reduction (Compared with 2017)
・ Petrochemical-derived plastic usage: 70% or less・ Lifecycle water usage: 30% reduction (Compared with 2017)

Transform ourbusiness foundations
for growth

PurposeGenerate dynamism
to realize innovativechangeMake a difference in everyday lives by redesigning habits

Economic Value• Net sales: Approx. ¥600 billion• EBITDA: Approx. ¥80 billion• Core operating income: Approx. ¥50 billion• ROIC: 8 –12%
• ROE: 10 –14%

Adjusting Strategies Ahead of Vision2030
Although we will continue working to achieve our Vision2030 targets, we have adjusted the themes in the 1st STAGE medium-term management plan in line with the progress we havemade. In 2024, which is the final year of 1st STAGE, we aim to rebuild our revenue base, and in 2nd STAGE we will prioritize the strengthening of profitability. In doing so, we will strive toreturn to the track of our original plan.

1st STAGE (2022—2024)
Initial Theme

Adjusted Theme

Shift gears toward accelerate growth2024 = Rebuild revenue base

2nd STAGE (2025—2027)

Accelerate transformation and growth
Strengthening profitability

3rd STAGE (2028—2030)

Creating the foundations for
subsequent growthLion Integrated Report 2024

Contents

Three Growth Strategies:

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

19

1. Accelerate Growth in Four Fields of Value Creation

Given increasing awareness of the importance of healthy minds and bodies and growth in related demand from society, we have established four fields of value creation to drive growth as we seek to further
evolve better living habits and healthcare services unique to Lion. The creation of new habits and the evolution of existing habits in these four fields of value creation will be essential to future business growth.
To accelerate efforts to evolve our businesses and create new value, we are going beyond existing organizational boundaries to engage in cross-organizational investigation and promotion.

Business Development Aimed at the Evolution and Expansion of Habit Redesign

Oral Health

Infection Control

Smart Housework

Well-Being

Promoting oral healthcarethat supports overall health and
QOL from the mouth outward

Becoming a hygiene solution provider byaddressing all kinds of risk related to
infectious disease

Creating new housework habits fordiverse lifestyles

Becoming a total healthcare servicer
for the mind and bodyThree Essential Elements of Positive Habits

Evolving a Business Model for Providing New Value through the Creation of Positive Habits
Starting from the Four Fields of Value Creation
Until now

Value
provided

Positive
HabitsEmotional
Emotional
experience
Effective
High-performanceand effectiveness

EthicalSocially acceptableand environmentally
sound

Going forward

Services
Products＋(experiential value)(functional value)

Adapt the value we provide throughproducts to services
Expand the scope of the social issues wetarget for solution

TargetHouseholds

Society (schools＋
and public facilities)

Consumer
contact

One-time sales＋ Recurring

Accumulate and use customer data

Business
type

Manufacturer＋ Service provider

Evolve business from manufacturing tototal service provision＋ Ecosystem

Collaborate with various partners in theindustrial, government, academic, medical
and private sectors

Scope of
Supply chain
collaboration

Lion’s Habit Creation

Creation of new habits
Creating entirely new habits

Evolution of existing habits
Making existing habits better

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Oral Health
Oral Health
Lion aims to provide oral healthcare that supports overall health and improved quality of life startingfrom the mouth. We will leverage our strengths as Japan’s leading oral care product manufacturer tointegrate innovative oral care products and services into the daily lives of individuals as a new form ofhealthcare. By doing so, we will expand beyond the bounds of our existing businesses.

The Society We Aim for through Oral Health Activities
The provision of opportunities to engage in oral
care to people across Asia will help reduce therisk of tooth loss and create a society in which
everyone can comfortably eat, speak, laugh andbe themselves throughout their lives.

Activity Indicator
Persons provided with oral care products,
services and information aimed at creating
healthy living habits

2030 target: 500 million(Millions of people)

500
400
300
200
100
0

500
300

310

2022

2023

150
2021

2030

Pages 42–43: R einforcing Initiatives to Address
the Sustainability Material Issues(Millions of people)
500
500
400
300
170
200
120
120
100
0
2021
2022
2023
2030

Strengths and Features

OutputImpact on Society

Extensive knowledge and achievements in preventive dentistry(Millions of people)
accumulated since the Company’s founding500
in 1891

Products and services that help keep teeth healthy anddeveloping beautifully, control plaque, and support the500
development and maintenance of healthy oral functions

Extended healthy life expectancy

Education on oral care to ensure that everyone has equal
2020
opportunities
to access the oral care they need

Medical cost containment

Mechanisms for using accumulated data on individuals’ oral
health to promote oral care habits as thestarting point for overall health

Improved access to medical care

400
300
200
100
Connections with governmental bodies, dental specialists
and
100
0
partner companies both in Japan and overseas involvedin2018

creating preventive dentistryMore than 20 years of data from medical and dental checkups
and know-how in data-based healthand productivity management

300

2019

20

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

21

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Oral Health
The
Importanceof Dental
Checkups

Examples of Impact on Society
The
Importanceof Oral
Functions

Dental Checkups at Companies andImproved Productivity

Oral Function Care from Early Childhood

Regular dental checkups are important for maintaining oral health, but dental checkups are
not conducted at all companies.
We therefore conducted joint research with the Hitachi Health Care Center to examine theeffectiveness of in-house dental checkups for improving employee health and work efficiency.
After adding dental checkups to employees’ regular health checkups, we observed anincrease in the frequency of tooth brushing and other oral care behavior, and that this had apositive impact on both oral and overall health. In addition, the results of an employeequestionnaire using WFun,1 a productivity indicator, showed that dental checkups had apositive impact on job performance. Regardless of other habits impacting health, such as
physical exercise or consumption of alcohol, the research showed that introducing dental
checkups helped to improve awareness of the importance of oral health and could have apositive impact on job performance.
As understanding of the significance of dental health increases in line with the Japanese
government’s aim to introduce mandatory dental checkups for all citizens, we expect morecompanies to introduce dental checkups for their employees.

The proper development of oral functions is essential for developing normal dental occlusionand dentition. Oral functions undergo significant development during a child’s school years,
and delayed or incorrect development can have a negative impact on functions, such as theability to eat, and to pronounce words.
Chewing is key to developing healthy oral functions. Thorough chewing using various
muscles around the mouth is said to promote jaw development during a child’s school years,
laying the foundation for properly aligned permanent teeth.3 Research conducted in 2023 onchildren ages 6 to 12 showed that chewing two hard gummies once a day for four weeks
improved various oral functions. Specifically, the habit improved masticatory performance(the ability to cut, crush and mix food), lip closure force, and occlusional force molar bite.
While conventional ways to support oral function development include regular visits to anoral care specialist and repetitive oral exercises, for children, chewing hard gummies is a very
efficient and simple means to achieve the same result. Chewing gummies promotes
well-balanced use of teeth on both sides of the jaw, and is expected to contribute to properdevelopment of children’s oral functions.

Note: Announced at the 51st Annual Academic Meeting of the Japan Society of Health Evaluation and Promotion, the 96th
Annual Meeting of the Japan Society for Occupational Health, the 72nd Annual Meeting of the Japanese Society for		
Oral Health, and the 66th Spring Meeting of the Japanese Society of Periodontology
1. WFun(Work Functioning Impairment Scale): An index developed at University of Occupational and Environmental Health, Japan
to measure the degree of work dysfunction caused by health problems.

3. Negishi, Shinichi et al. “Influence of masticatory exercises using hard chewing gum on chewing pattern and first molarof mixed dentition,” Orthodontic Waves—Japanese Edition 69, no. 3 (2010): 156–162

Mean±95%CI
Steel-dwass, *p<0.05

Job performance(WFun productivity metric)*

Deterioration

0.4

0.2

0

(0.2)

(0.4)

OC
Group showing
deterioration

OC
Group showing
no change

OCGroup showing
improvement

Changes in oral care behavior frequency*

Decrease
N=1,717

Constant
N=3,803

Increase
N=2,243

2. Changes in tooth brushing frequency, flossing rate of visits to the dentist per year between 2018 and 20195

Able to chew
more efficiently

4

Increased force toclose the lips

***

3
2
1
0
Beforeconsumption

Occlusional force(left side)

After fourweeks ofconsumption

Wilcoxon signed-rank test

Increased occlusional force on both sides

12

350

10

300

8

***

6
4

200
150
100
50

0

0
After fourweeks ofconsumption

Beforeconsumption

Mean ±SE ***p<0.001, **p<0.01, †p<0.1

350

†

250

2

Beforeconsumption

Occlusional force(right side)

Occlusional force (N)*Lip-closing force

Occlusional force (N)0.6

Masticatory performance score

Improvement

Masticatory performance

Lip-closing force (N)Relationship between Changes2 in Oral Care Behaviors and Job Performance

Oral Function Comparison Pre- and Post-Consumption of Hard Gummies (n=26)

300

**

250
200
150
100
50
0

After fourweeks ofconsumption

Beforeconsumption

After fourweeks ofconsumption

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Oral HealthDirection of Activities

The Lion Oral Health Initiative is an umbrella term for all of Lion’s activities in the oral health field ahead of 2030. Through this initiative, we aim to help develop healthy minds and bodies by promoting positive
preventive dentistry habits suited to people’s lifestyles and physical and mental condition. Our basic idea is to make preventive dentistry a habit by linking all points of contact related to oral health, including
households, dental clinics, companies, local governments and local communities. We will work to build a leading-edge initiative through the creation of a Personal Oral Health Record (POHR)1 database incollaboration with external partners.

Lion Oral Health Initiative²
A direct-to-consumer service that supports
the creation of habits for preventing oral
frailty and enhancing oral fitness

Preventive dentistry solutions service
Households

A direct-to-consumer service that supports the creation of
tooth brushing habits and strong foundations for straight
teeth in line with children’s various stages of growthProfessional examination
support business

Dentalclinics

A well-being support service for corporate customers to
support the creation of healthy habits in the workplace

Companies
Contributing to better
health through creationof positive preventive
dentistry habits

Health literacy improvement support business

Okuchikarada Project
Inclusive oral care to create healthy futures for children
through dental and oral health

Localgovernments
and educational
institutions

Local
communities

Oral health database (POHR)

Working with local governments to support the creation of healthy
habits for local residents

TANO-LTA gaming console for nursing care facilities that enables
resident to enjoy sustained physical activity

Collaboration with external partners

1. Personal Oral Health Record: A database containing information on basic health, living habits, oral condition, tooth brushing habits, etc.
2. Corporate activities based on our basic approach to oral health (preventive dentistry)22

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Oral Health

Products and Services That Create and Evolve Habits

Going beyond the supply of high-value-added products that prevent cavities, gum disease and other conditions and symptoms, the Lion Oral Health Initiative also proposes oral care tailored to consumers’
personal styles, helps workers maintain healthy habits and supports the creation of new habits at home and at school.

New oral care proposal that lets you
choose your own styleWell-being support service for corporate
customers

Children’s Development
Support Service

OCH-TUNE

Okuchi Plus You

Okuchi-iku

OCH-TUNE is a new oral care brand that offers products
to match your lifestyle, including your tooth brushing style,mood, and how long you like to brush. The FAST lineup of
products is for customers who efficiency, while the SLOW
lineup is for people who prefer taking their time, relaxationand thoroughness. This lineup of toothpastes, toothbrushes
and mouthwashes was launched in April 2024. By proposing
products tailored to consumers’ personal styles, we aim tosupport the creation of even better habits in the oral caremarket, which is conventionally focused on promoting
products for the prevention of cavities, gum disease andother conditions and symptoms.

Given the increasing focus on oral healthcare activities in
the workplace, in July 2022 we commenced a well-being
support service for corporate customers called Okuchi
Plus You, which combines oral care seminars by dental
hygienists, saliva tests, e-learning and the distribution ofLion products. We have received inquiries mainly fromcompanies engaged in health and productivity management,
as well as health insurance associations. In 2023, Okuchi
Plus You was very well received, with more than 10,000
employees accessing the service. Employees have
responded positively, with some deciding to take up
dental flossing and attend regular dental checkups. We
will continue to encourage positive preventive dentistry
habits through workplaces.

Okuchi-iku Kamotto! is the first step in the Okuchi-iku oral
care program to support the development of proper toothbrushing habits and the creation of a strong foundation forstraight teeth in line with children’s stages of growth. In
this first step, we provide gummies for daily consumption
to develop chewing strength, chewing gum to checkchewing strength, and an AI app to check teeth alignment.
The program has been very popular since its launch in
April 2023. In collaboration with the Yamaguchi Dental
Association, last year we conducted the program on a trial
basis to teach elementary school students the importanceof chewing strength and to provide them with the relevant
oral exercises. We will expand the range of activities forboosting children’s vitality through the creation of healthy
oral and dental habits.

23

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Infection Control
Infection Control(Millions of people)

500

500related to infectious disease in every setting. As a company with
Lion aims to become a hygiene solutions provider that addresses risk
400 our businesses with a sense of duty, extending the scope of oura long history of supporting cleanliness and hygiene, we will transform
310
300
300
operations from living spaces to include public and industrial spaces.
In doing so, we will provide hygiene solutions that protect people’s
150
200
lives from bacteria and viruses on all fronts (through contact with other people, objects and spaces).
100
0

The Society We Aim for through Infection
Control Activities
The propagation of good hygienic behavior as a habit among
all people will help to create a society in which there are fewer
concerns about infectious diseases, and in which people care
for and trust one another, and live with peace of mind.

Activity Indicator
Persons provided with hygiene-related products, services
and information aimed at creating healthy living habits

Strengths and Features

2021

2022

2023

(Millions of people)

500
400
300
200
100
0

2030

2030 target: 500 million

500

120

120

2021

2022

170

2023

2030

Pages 42–43: R einforcing Initiatives to Address
the Sustainability Material Issues(Millions of people)
500
500
400
300
300
200
100
100
0
2018
2020
2019

OutputImpact on Society

Various educational activities for hand washing in
the KireiKirei business

Provision of mechanisms to increase the ranks of teachers andpromoters of good habits, including consumers themselves

Spread of hygiene literacy and education

Initiatives focusing on hygienic facility environments in
the Lion Hygiene Co., Ltd. business

Promotion of hygiene habits through food hygiene at frequently
used facilities and other locations

Reduced infection incidence and mortality rates

Collaborative initiatives with local governments, companies, andorganizations in the gift and channel-specific products businessSupport and solutions for environments with poor hygiene, suchas regions with underdeveloped infrastructure anddisaster-affected areas

Extended healthy life expectancy
Reduced burden from medical expenses

Promoting and Establishing Cleanliness and Hygiene Habits through Educational Institutions (Japan and Asia)

Page 46

24

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Smart Housework
Smart Housework
Lion aims to create new housework habits for diverse lifestyles. As lifestyles and living spaces
become increasingly diverse, one-size-fits-all housework proposals are no longer sufficient formeeting consumer needs. Building on the basic idea of smart housework that is enjoyable andefficient, we will establish a unique advantage by reframing the general concept of housework to
maximize personal comfort and by cooperating closely with external partners to come up with
innovative ideas across a wide range of categories.

The Society We Aim For through Smart Housework Activities
By reducing the burden of housework and creating more personal and enjoyable housework
habits, we will help to increase people’s free time and peace of mind. In turn, this will improve
relationships between people, among family members, and with the local community, thus
ensuring more comfortable living.

Proposing New Habits in Smart Housework

NANOX oneby me

—Offering a new way of doing laundry to extend useful clothing life

—Proposing a new habit of applying custom fragrances to household goods

In September 2023, Lion launched NANOX one, a unique line ofhighly concentrated complete gel detergents that are the only*
detergents to combine high detergency and deodorizing power withthe ability to protect clothing from discoloration.
A preliminary survey found that although approximately 80% ofconsumers want to keep clothing for a long time, they discard
clothes due to yellowing, darkening, fading or other changes from its
original color or other qualities. We developed NANOX one toaddress this issue and latent consumer needs, based on the conceptof a highly concentrated complete gel that tackles odors, grime anddiscoloration better than other NANOX products. The technologies
that have made this product concept a reality are protected bymultiple patents.
We will continue working to make laundry a more positive
experience by resolving bothersome issues consumers have become
resigned to, one by one.

With its direct-to-consumer brand by me, which proposes a new habit ofapplying custom fragrances to household goods such as fabric softeners andclothing mist, Lion is working to cultivate Positive Habits through fragrance.
In 2023, our dedicated by me e-commerce site began offering scented
card sets that allow interested visitors to sample the fragrances recommended
by the site’s AI diagnostics. In addition to the e-commerce site and social
media channels, we also display products at pop-up stores and numerous
other venues for people to sample.

* Among Lion’s laundry detergents• Limited-time displays (Yurakucho Marui, b8ta Osaka - Hankyu
Umeda, b8ta Koshigaya Laketown, one × one Shinjuku MYLORD
and others)• Interactive panel discussion events (Kissa Laundry and others)
By continuing to deepen relationships with consumers through the creation ofexperiences that combine the digital and physical realms, we aim to make by mea fragrance brand that goes beyond fabric care to cover daily living as a whole.

25

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

26

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Expansion of the Overseas BusinessOne key theme of Vision2030 is the expansion of our Overseas Business. We aim to reinforce our business in countries or regions where we already operate and to raise the share of consolidated net sales fromthe Overseas Business to around 50% by 2030 through expansion into new countries or regions.
We will work to boost our presence in Asia by promoting better living habits among more people and in more regions and aspects of life.

Basic Strategies

1. Business Development Based on Lion’s Purpose
Combine contributions to resolving social issues withbusiness opportunitiess
2. Glocalization Strategy
Conduct brand strategies focused on country and region
3. Expansion of Customer Contact Points
Maximize target customers, product categories, andnumber of countries and regions served

Evolving the Glocalization Strategy
Glocalization Strategy
Until now

We have divided our sales regions into three major cross-border market types based on sharedcharacteristics (patterns) and are developing a strategy for each. To classify market types, wehave used characteristics such as GDP growth rates and income levels, as well as the local
features and trends we have identified as part of previous glocalization strategies.
Framework of Market Types (I–III)
Type I

Type II

Type III

VietnamBangladesh(Rural)China
Indonesia(Urban)
Malaysia(Rural)Thailand(Urban)South Korea
Singapore

Product strategy

General-purpose,
low-cost products

Value-added products (entry)

Value-added products(advanced healthcare)

Channel strategy

Regional supermarkets(Traditional Trade)Big-box stores(Modern Trade)/E-commerce

Drug stores/E-commerce

Going forward

Progress
Country/Region focused

Regional focus/Market classification

Balancing the provision of reliable quality and new
habit creation through global brands tailored to theneeds of each country

Define market types across borders based on the
consumer features and trends identified as part of theglocalization strategy

Adapting to changes in the business environment
Regions: Identify similar and common lifestyles
and needs

Maximize synergy and promote efficient, effective
operations through management and businessapproaches tailored to each market type
Evolve platform for strategy promotion (global operations)

Steady expansion of scaleof business• 2023 net sales (external): ¥134.1 billion (13.6% year-on-year increase)• Share of consolidated net sales: 33.3% (3% year-on-year increase)

Achieved the Vision2030
1st STAGE target ofentering two new countries• Bangladesh (2022)• Vietnam (2023)

Key Measures toward 2030
1. Accelerate growth in the Qingdao Lion business (Page 27)
2. Grow the personal care business in Southeast and South Asia (Page 28)
3. Expand into new countries or regions (Page 28)

Value-added products
Quality-based growth2030 Target

Consolidated net sales: Approx. ¥600 billion
Overseas Business share: Approx. ¥300 billion (Around 50%of consolidated net sales)

Glocalization Strategy—Pattern-based Marketing

General-purpose products
Volume-based growth

Vision and Strategies

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Expansion of the Overseas Business

Key Measure 1

Progress

Accelerate growth in the Qingdao Lion Business

Stepping up efforts insales channels

Basic Policy

In the Qingdao Lion business, we have been taking advantage of the appeal of the high qualityof Japanese products to enhance our brand image, mainly through the Systema and CLINICA
brands in the oral care category, and developing business through online (e-commerce) sales
and offline (brick-and-mortar stores) sales in major cities by generating growth in synergy withlocal brands.
We will strengthen online sales using SCRM* based on each customer’s purchasing dataand characteristics, expand the beauty care and fabric care product categories, and begin
full-scale sales of pet products. Offline, we will beef up our local sales structure to reach more
people and regions in China. We will also reinforce the research infrastructure underpinning thebusiness to accelerate product development locally.
Through these measures, we aim to grow sales in this business to around ¥100 billion by 2030.
* SCRM (Social Customer Relationship Management): A method for improving customer engagement by using social media forcustomer management

Measures for Expansion and Implementation in the Qingdao Lion Business

Until now

Main sales regions

TargetSales channel

Products

Business categories

Mainly online(e-commerce)

Mid- to high-pricerange
Made in Japan/
Japanese quality

Mainly oral care +KireiKirei, etc.

Mainly large cities

Middle- to highincome earners
Fans of Japanese
products
Quality-oriented
consumers++
Measures for
expansion

Measures for
implementation

Inland cities

Wider income
range

Brand image

Measures for expansion
Beauty care, pet
products+++

Expand offline
sales(brick-andmortar stores)

Mid-price range
Emphasis on local
preferences
Made in China/
Japanese quality

Gradually
expand productrange from oral
care

Online (e-commerce) sales:
Use customer data and establish through social
customer relationship management (SCRM)
Offline (brick-and-mortar stores) sales:
Enhance sales structure

Thoroughly investigate andidentify local needs and establish
R&D subsidiary in Shanghai to
improve product development
speed

Expanding businessfieldsStrengthening
product development

Focus

Online sales

Implemented SCRM and began full-scale promotion of membership system

Offline sales

Enhanced sales structure and expanded the range of local toothpaste products(sales +41% year on year)

Beauty Care

Strengthened foaming hand soap, including introducing new fragrances (sales+23% year on year)

Fabric Care

Introduced and strengthened capsule detergent (sales +36% year on year)

Pet products

Strengthened local development and production, and launched new products

Established new innovation center in Shanghai in May 2023 and started full-scale operationsin January 2024

Strengthening Offline (Brick-and-Mortar Store) Sales

White & White toothpaste, which is produced inJapan, is a familiar product in China. As part of our
glocalization strategy, we have developed locally
produced toothpastes in China that reflects local
needs and are expanding rollouts of the lineup. In
addition to increasing the number of stores that
handle the products, we are expanding sales frommetropolitan areas to surrounding areas andramping up sales through offline channels. We willcontinue to enhance both our products and oursales structure.

Focus

Product made in Japan

Products made in China (launched in July 2023)+Healthy Gum+Fresh Breath

Establishment of an R&D Subsidiary in Shanghai

In May 2023, we established Lion Innovation
Center (Shanghai) Co., Ltd., a wholly owned R&D
subsidiary in Shanghai, to increase both thecapabilities and the pace of the Lion Group’s
product development in China.
We will use this new subsidiary as a base for
ramping up research and development focused on
consumer surveys to provide products andservices that redesign the living habits of Chinese
consumers for the better.

Entrance

Office area

Free space27

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

Expansion of the Overseas Business
Key Measure 2
Grow the Personal Care Business in Southeast and South Asia
Basic Policy

Expand into New Countries or Regions
Basic Policy

We identify common denominators in changing lifestyles and consumer needs caused byeconomic development and other factors in each country to implement a glocalization strategy
tailored to regional characteristics. In doing so, we aim to expand the scale of our business andhelp to resolve social issues by anticipating changes and promoting our Positive Habits strategy
to help more consumers develop better living habits. Standards of living are improving in the
countries of Southeast and South Asia due to economic development, and healthconsciousness is rising as their populations age. In these countries, we are therefore ramping
up our personal care business, including oral care, beauty care and pharmaceutical products.
Progress

We offer added value in the oral care product category through toothbrushes with supertapered bristles and thin heads. In 2023, we launched Systema Ultra Dense Gum Protect
Toothbrush in Malaysia.
Issues and Initiatives Going Forward

We aim to expand business by further broadening added value for toothbrushes in the countriesof Southeast and South Asia, as well as by offering new value in toothpaste in ways such as
meeting needs for treating diseases.
Focus

Key Measure 3

Systema “Be #GumProud” Campaign

In conjunction with Gum Health Day, we held an
event in Malaysia to raise awareness of periodontal
disease prevention, inviting dental experts andmajor media outlets. A director from Malaysia’s
Ministry of Health communicated the importance of
periodontal disease care, and popular influencers
helped to widely promote the use of Systema insuch care. We will continue to work with thegovernment and dental experts to raise awarenessof periodontal disease prevention as we strive tocultivate the Systema brand.

As we work to redesign the habits of more consumers in more countries with the aim ofestablishing Positive Habits, we expanded into Bangladesh in 2022 and Vietnam in 2023.
Aiming for steady business growth, we are promptly assimilating the changing and diversifying
consumer needs accompanying rapid economic development as we help to resolve social
issues in both countries through our products and services.
Bangladesh (June 2022 Market Entry)
2030 Target: Approx.¥20 billion
In 2022, we established Lion Kallol Limited, a joint
venture in Bangladesh, with local company Kallol.
Limited. In 2023, Lion Kallol launched a laundry
detergent business in 2023, and will construct a
new plant in one of Bangladesh’s Special
Economic Zones to establish a foundation forfurther business expansion. As we enhance costcompetitiveness through domestic production, we
will address the social issues Lion can assist within Bangladesh, where the market is not yet fully developed. Through steady inroads in productmarkets where consumer demand is expected to rise, we will achieve quantitative growth.
Vietnam (March 2023 Market Entry)
In Vietnam, after investing in local company
MERAP HOLDING CORPORATION in March
2023, we began integration of operations under
the slogan “One MERAP,” promoting greater
operational efficiency through organizationalchanges and DX. Based on a doctor
recommendation model utilizing the distribution
network of hospitals, pharmacies, and other
outlets built by MERAP’s OTC pharmaceuticalbusiness, the new partnership will expand into
oral care and skin care as MerapLion to achieveboth quantitative and qualitative growth.

2030 Target: Approx.¥10 billion

28

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

29

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

R&D That Leads Value Creation
Becoming an advanced daily healthcare company, we have positioned research and development, which drive innovation, as a source of growth. With consumers’ everyday lives in mind, we will make full use of
our professionalism and enjoy taking on challenges in uncharted areas, fulfilling our purpose by creating new value.

Vision and Strategies

Progress

The greatest strength of our research and development is our expertise in consumer research,which we have built up over many years through contact with consumers who use our products
and services in a wide range of business domains.
We use the knowledge we gain from thoroughly examining changes and diversifying needs
in consumer lifestyles to generate innovative solutions. In this way, we help to create better
habits and contribute to physical and mental health.
To create new value, the Research and Development Headquarters is promoting thedevelopment of products and technologies centered on seven basic technologies that support
all businesses and five core technologies specific to each business.
Moreover, by proactively engaging in open innovation projects with universities, research
institutes and corporations, we accelerate development. We will also drive Company-wide
innovation through efforts to address environmental issues, social conditions and collaboration
with local communities from the perspective of sustainability.

Co-creation of New Value with External Organizations
To promote health beginning with better oral health, we conducted a joint investigation of theoral microbiome* with Metagen, Inc. and Hiyoshi Oral Health Clinics. (See page 30 for details.)
Moreover, to promote improvements in hygienic behavior, we worked with the University ofTsukuba to analyze the spread of viruses at home using a simulation model. The analysis
showed that hand washing and hand sanitizing at appropriate times effectively prevents viruses
from spreading in the home.

Business domains(Value examples)

Fabric Care Products
Surfacecontrol

RemovestainsCoretechnologies
Basictechnologies
Microbiology

Odor free

Spatialcontrol

Affective
scienceEnjoyeatingOral Care Products
Oral
control

Beautifulteeth

Analytical
Can chew
sciencethoroughly
Container
and utensil
design BiologicalLifecontrolscience

Interfacescience

Safetyscience

Beauty Care Products

Easy to use

Living Care Products

Prevent dry
skin

Formulation
Always clean
Self-care

Alleviate
health issues

Pharmaceutical Products* Groups of bacteria that live in the oral cavity
WEB

Development of a simulation model to visualize the risk of viral infection after returning home (Japanese only)
https://doc.lion.co.jp/uploads/tmg_block_page_image/file/8565/20230308_01.pdf

Environmentally Friendly Technologies Developed from the Consumer’s Perspective
Aiming to reduce environmental impact from product usage, we focused on using fewer rinse
cycles for laundry, which consumes large amounts of water. Acron Smart Care, a laundry
detergent with fabric-softening ingredients for delicates, uses innovative technology thateliminates the need for running rinse cycles, thereby shortening washing times, limiting clothing
damage and boosting environmental performance.
WEB

R&D Station
https://www.lion.co.jp/en/rd/station/articles/4557

Challenges and Initiatives Going Forward
The creation and evolution of habits first requires a scientific understanding of how a habit isformed. We will therefore continue research on systematizing Positive Habits, with the aim ofenhancing interconnectivity between the functions of and information on our products andservices, and the sensations and emotions derived from such functions and information. Using
this approach, we will work to expand and enhance research for creating better habits.
To create value, we must also enhance the productivity of our research activities. By further
incorporating digital technologies we will efficiently accelerate our research activities. Moreover,
we will continue to allow researchers to use up to 15% of their working hours to research topicsof their own choosing. Generating and promoting research themes originating from researchers’
wide-ranging ideas will lead to the creation of further value.

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

30

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

R&D That Leads Value Creation

Focus

R&D That Supports Our Glocalization Strategy

Collaboration between Local Company
and Global Development Center
Lion Kallol Limited, our joint venture company inBangladesh, commenced operations in October
2022, and in August 2023 launched an improved
version of powder laundry detergent Jet.
Unlike the countries where the Lion Group has
expanded its businesses to date, Bangladesh hasvery few washing machines, and most consumers
wash their clothes by hand.
Jet is a powder laundry detergent that featureshigh solubility. Leveraging its strengths in enzyme
technologies, Lion improved the product’s ability toeffectively remove food stains, garnering widespreadpraise from local buyers attending a productdemonstration.
Going forward, we will work to enhance ourunderstanding of consumers in Bangladesh andhelp create better habits through local productdevelopment.

Focus—Aiming to Propose Preventive Methods That Take into Account the Oral Microbiome*—

We are focusing on research in oral microbiome based on the understanding that development of abeneficial microbiome is the key to good oral health. Working jointly with Metagen, Inc. and Hiyoshi Oral
Health Clinics, we have investigated the oral microbiome of people suffering from dental caries andperiodontal disease before and after dental treatment. We discovered that there was a difference in oral
microbiomes between these patients and people with good oral health before and after treatment. For
example, even after treatment for dental caries
People with healthy
People suffering from dental caries andand periodontal disease, patients exhibited aoral condition
periodontal diseasehigh abundance ratio of dental caries andperiodontal disease related bacteria, as well
as fewer bacteria that could potentiallycontribute to prevention of these conditions.
We will further our investigations with the aimof proposing new preventive methods thattake into account the oral microbiome.
●・・・Nitrate-reducing

bacteria●・・・Bacteria related todental caries andperiodontal disease

High relative abundance of bacteria
related to dental caries and periodontal
disease after dental treatment●・・・Other bacteria

Oral microbiome (saliva)

Jet laundry detergent

Oral microbiome

Before dental treatment

Oral microbiome

Dental treatment*Bacterial communities that inhabit the oral cavity.
WEB

Acceleration of R&D with the Establishment of Lion Innovation Center (Shanghai)

After transitioning to
self-careLion Discovers That Oral Microbiomes of Those with Dental Caries and Periodontal Disease Differ
from Those with Healthy Oral Condition, Even After Dental Treatment.
https://doc.lion.co.jp/uploads/tmg_block_page_image/file/9595/20231109_01.pdf

Focus

Advancing Digital Transformation (DX) in R&D—Data-based Composition Development—

We are currently working to improve productivity in our R&D activities by promoting use of digitaltechnologies such as AI and collaborative robots. Using Bayesian optimization, a machine learning
method that enables us to search for productcompositions based on known data, we have
Data science
Researcher knowledge
established a novel experimental design method that
Model
Experimentation andconstruction
evaluation
can generate compositions that meet multiple targets
Selection of
Deriving
compositions forpotentialwith fewer rounds of experimentation.
experimenting
compositions
A, B, C, D, E..
A, B, C, D, E..
Applying this method to composition development
Bayesian Optimization Process Examples
for toothpastes, we were able to complete
First stage
After four experiments
After eight experiments
development in about half the anticipated time. We will
promote further use of this method to accelerate R&D.

Lion Innovation Center(Shanghai)

Experiment data

outputExpansion of the overseas business is essential tothe achievement of Vision2030. We have therefore
established Lion Innovation Center (Shanghai) Co.,
Ltd., a wholly owned R&D subsidiary in Shanghai, toenhance the Group’s capability and speed in productdevelopment in China, which is one of our mostimportant markets.
Going forward, we aim to use Lion Innovation
Center (Shanghai) and our two research centers in
Hirai and Odawara, Japan, as hubs for generatingGroup innovation. By applying the technologies
developed at these innovation hubs to productdevelopment at our R&D development facilities ineach country in Asia, we aim to speed up productdevelopment throughout the region.

Creation of New Value through External Collaboration

Model

Original functions
Prediction intervals

input

Hirai Research Center

Odawara ResearchCenterWEB

R&D Digital Transformation
https://www.lion.co.jp/en/rd/new-activity/digital/

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation

An Intellectual Property That Supports Redesigning Habits
Lion’s policy regarding intellectual property is set forth in its Behavioral Guidelines, which stipulate that we will strive to create, properly protect and actively utilize intellectual property, and that we will respect the intellectual
property rights of others and not seek to improperly acquire or use such rights. Furthermore, our strategic approach to intellectual property guides our intellectual property activities.In addition to patents, trademarks and copyrights,
our core value in intellectual property includes manufacturing and evaluation methods (proprietary information) and healthcare data. We are using this intellectual property to increase our corporate value.Intellectual property
activities are promoted by a specialized department under the direct control of senior management. This department carries out intellectual property investments and discloses information in line with the Group’s overallmanagement strategy under the supervision of the Board of Directors.

Vision, Strategies and Promotional Framework
Strategic Approach to Intellectual Property

1. Contribute to business results from the intellectual
property creation stage
We will create intellectual property from the initial research andplanning stage to ramp up strategic protection and use of ourintellectual property in a way that contributes to our business activities.

2. Create and protect intangible assets
We will clarify our strengths in intellectual property and other intangible
assets and work to create, protect and utilize assets that contribute tocorporate growth.

3. Cross-border Group-wide intellectual property activities
To support the creation and use of intellectual property outside ofJapan, we will create and utilize strengths across the Group that are
effective globally.

Challenges and Initiatives Going Forward

Promotional Framework
Board of Directors/Executive
Committee
Management strategies

Businessstrategies

R&D
strategies

Intellectual property strategies

Intellectual Property and Licensing
Committee• Formulation of intellectual property policies• Confirmation of progress toward fiscal year
targets• Discussion of Group-wide challengestargets• Reports to managementtargets

Progress
At Lion, we use patents to protect the technologies we invent through our research activities,
design rights and patent rights to protect the appearance and technical aspects of the uniqueexterior designs of our products. To protect our brand names and catchphrases, we use soundtrademarks and other trademarks, as well as copyrights. By leveraging this multi-layered mix ofintellectual property rights, we protect our products and increase brand awareness.
Although the number of counterfeit goods is increasing as our presence grows in markets
across China and other countries and regions in Asia, we are working with local subsidiaries andgovernments to eliminate such goods by quickly discovering, exposing and sending warning
letters to the perpetrators, and taking down associated websites.
In this way (through products protected by a mix of intellectual property), we are able to fulfill
our purpose worldwide—“Make a difference in everyday lives by redesigning habits:
ReDesign”—and to improve our corporate and brand value.
WEB

Intellectual Property
https://www.lion.co.jp/en/company/governance/ip/

As Japan’s leading oral care product manufacturer for more than a century, Lion has cultivatedsignificant intangible assets such as intellectual property (including technologies and expertise),human capital, and social and relationship capital through consistent product planning,development, purchasing, production and sales.
We consider these assets to be the source of our corporate value, and are currently in theprocess of identifying and taking stock of the core value in our intellectual property andintangible assets. In concert with these initiatives, the Board of Directors is holding discussions
regarding the protection and enhancement of this core value, as well as related investment.

Focus

Building, Protecting and Using Intangible Assets

Intellectual Capital

Lion developed a kids’ toothbrush with a flexible neck, allowing it tobend and distribute the impact on the oral cavity in the event of an
accidental fall during brushing. This technology was applied to the
CLINICA Kids’ Toothbrush models for children 0 to 2 years old and 3 to
5 years old. The patent for this product (Patent no. 6591988 (JP)) was
recognized as an outstanding invention, receiving an invention promotionaward at the 2020 Kanto Commendation for Invention organized by theJapan Institute of Invention and Innovation.

Developing Intellectual Property Personnel in Wide-ranging
Departments and Awarding Them for Their Activities
Human Capital
In line with our wide-ranging intellectual property activities and patent incentive program, we haveestablished the Contribution Awards for Intellectual Property (held annually) to commend employees
who contribute to diverse intellectual property activities. At the 17th Contribution Awards forIntellectual Property held in 2023, five entries from departments and employees were commended forvarious activities, including activities related to the developmentof intellectual property personnel and enhancement ofintellectual property information disclosure. To help develop
personnel who can use intellectual property and related
information in creating innovative business models, we also offer
support for employees outside the Intellectual Property
Department to acquire IP Analyst certification, offered by the
Association of Intellectual Property Education.
Contribution Awards for Intellectual
Property in 2023

31

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Three Growth Strategies
2. Transform Our Business Foundations for GrowthIntegrated Report 2024 Overview

The Science of Habits

The Science of Habits—Digital Transformation at Lion
Lion aims for sustainable business growth by fulfilling its purpose in a highly volatile business environment. As such, we believe it is essential to promote
Group-wide transformation through the use of digital technologies. The slogan for our digital strategy is "The Science of Habits." It expresses our desire
to create value that leads to better habits by taking a scientific approach, applying digital technologies and data science to the behavior and habits ofcustomers, employees and other stakeholders.

Vision and Strategies

Challenges and Initiatives Going Forward

We are aiming to achieve greater speed, efficiency, sophistication and new value creation by
2030 through digital transformation.
During Vision2030 1st STAGE we are working to transform our management foundation. We
have installed new core systems and are working to inculcate the use of data on a Companywide basis—both key components of our transformation to digital-driven management—andare focusing on the development of personnel adept in IT and digital technology.
A multi-layered structure of internal and external organizations drives Company-wide digitaltransformation initiatives. The Digital Strategy Promotion Council, comprising the president andrelevant executive officers and heads of departments, oversees the formulation of the Group’s
overall digital strategy and the promotion of measures based on the strategy. The Digital
Strategy Department comprehensively implements measures such as strategic planning for
digital technology, business process re-engineering, IT development and maintenance, and data
analysis.

The amount of data we handle has increased significantly due to the installation of new coresystems and digitalization initiatives in all areas including store-related activities, marketing,production and logistics. We must process, analyze and utilize this data appropriately.
Going forward, in addition to improving profitability through highly accurate demand forecasts
based on internal and external data, we will address issues such as the “2024 problem” inthrough an alliance in which logistics data is shared among different companies. We will also
continue to focus on the development of digital personnel who can support these initiatives.

Progress
Progress in 2023

Theme
Sophistication ofBusiness
Management
Capabilities

Expansion and
Evolution of
Habit ReDesign

Development ofOrganizational
CultureWEB・ Gained an understanding of profit structure at the SKU level through data centralization
・ Improved profit portfolio accuracy at the business/company level and reflected it indecision-making

Focus

Quickly incorporating the latest technologies, inMay 2023 we built the in-house generative AI
chatbot LION AI Chat and made it available to all
Lion employees.
We are leveraging our in-house community topromote initiatives to improve operational
efficiency using the generative AI chatbot.
We have also developed a tool with agenerative AI/search system for knowledgetransfer utilizing in-house data. Initially, we will use
the tool in our research activities, focusing on
improving productivity and fostering innovation.

・ Expanded and evolved new businesses using in-house knowledge and oral health data1
・ Acquired ISO/IEC 27001 certification to guarantee safety of services handling medical information2
・ Began development of an AI-based tool for knowledge transfer utilizing in-house data3
・ Promoted electronic data interchange (EDI) initiatives in logistics to address the “2024 problem”4・ Established the Digital Strategy Department to bring together organizations with IT and digitaltechnology functions
・ Improved IT and digital technology education systems
・ Provided learning opportunities for all employees through the Lion Digital Summit, e-learning, etc.

Digital Transformation(Japanese only)

https://www.lion.co.jp/ja/dx/

Reference
1. Lion Integrated Report 2024, Page 23, Okuchi Plus You
2.	Press release dated September 19, 2023 (https://www.lion.co.jp/ja/news/2023/4397) (Japanese only)
3. Press release dated December 8, 2023 (https://www.lion.co.jp/ja/news/2023/4464) (Japanese only)
4. Lion Integrated Report 2024, Page 33, Supply Chain Management

Utilization of Generative AI

Focus

Development of 1,000 Digital Personnel

Aiming for autonomous promotion of digital transformation across all of our worksites, we arefocusing on the development of digital personnel who can take the lead in digital technology
matters in each of our organizations.
We identify the IT and digital skills of our employees, and implement level-based education,
ranging from basic knowledge acquisition to advanced utilization. By fiscal 2026, we plan todevelop 1,000 digital personnel, which is equivalent to roughly 30% of our total workforce.

WEB

Digital Personnel (Japanese only)
https://www.lion.co.jp/ja/dx/

32

Lion Integrated Report 2024

Three Growth Strategies:

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

2. Transform Our Business Foundations for Growth

Supply Chain Management
To ensure that, regardless of conditions, we can continue to deliver quality products that meet the daily needs of consumers, our supply-chain related departments collaborate in building a more robust
logistics system and framework for sustainable and stable raw material procurement and product supply. In this way, we are establishing a highly competitive supply chain management system.

Vision and Strategies

Progress

To build a more robust logistics system and framework for sustainable and stable raw material
procurement and product supply, we will establish a backup system (redundancy) for
responding to natural disasters, which in recent years have become increasingly severe.
Moreover, we are working on a universal numbering system1 for sales and operations
planning based on sales forecasts to upgrade our production, sales, and inventory management
processes. Through this initiative we will optimize inventory and minimize product stockouts.
Further, to address various issues across the supply chain, we will promote the use of electronic
data interchange (EDI) in logistics for collaborative distribution across the daily necessities
industry. In addition, we will formulate and promote a voluntary action plan for rationalizing
logistics and improving productivity in line with the Japanese government’s Policy Package for
Logistics Innovation.
1. A system for coordinating operations through a single numbering system in production, distribution and sales data

Established backup
systemInstalled emergency power equipment at some logistics hubs

Upgraded production,
sales, and inventory
management processes

Continued discussions on the establishment of a universal numbering system, and reduced
product stockouts to 3.8% (0.8 percentage points lower than in fiscal 2023)

Promotion of logistics
using electronic datainterchange (EDI)

Installed EDI system at some wholesaler sites and began discussions on collaborative logistics
with daily necessity manufacturers

Challenges and Initiatives Going Forward
Establishing backup
systemFurther increase number of hubs with emergency power equipment

Upgrading production,
sales, and inventory
management
processes

In conjunction with the establishment of a universal numbering system for operational
processes, use supply chain management functions 2 to promote the implementation of short-,
medium-, and long-term collaboration functions and predictive and monitoring functions

Building a Sustainable Supply Chain Management Platform
How We Achieve Operational Streamlining

Increase the flexibility andresilience of the entire supply chain
 oordinate production, distribution andCsales data via a shift to universal
numbering to optimize inventories andminimize product stockouts.
Upgrade business continuity planning(Procure raw materials from multiple
suppliers and create multiple transportand distribution routes).

Lion

Receive
order

Commercial
flow EDI

Place
order

Wholesaler

Promotion of logistics
using electronic datainterchange (EDI)

Inventory
allocation

Shipment content
confirmation

Logistics EDI
Scheduledshipment
data

Scheduledshipment
data

Advanceconfirmation
Scheduled arrival
confirmation

Manifest-free

Promote logistics using electronic datainterchange (EDI) for collaborative
distribution with industry peers to achieve
operational streamlining and reinforce
logistics crisis response capabilities, and to
reduce environmental burden throughmeasures such as curbing CO2 emissions.

Inspection-free
Transport

Shipment

Arrival

Expected effects

1. Improvement in the labor environment fordrivers and warehouse workers engaged
in loading and unloading
2. Increased labor productivity
3. Reduced environmental burden(reduced CO2 emissions)

Receipt
confirmation

Logistics EDI
Arrivalinspection
data(upon receipt)

Receipt
Arrivalinspection
data(upon receipt)

2. A function that quickly formulates supply plans that follow changes in demand

Focus

Continuously ramp up responsible
supply chain initiatives

Work to increase number of wholesalers using EDI systems and verify effectivenessEstablishing a Sustainable Logistics System and Reducing
Environmental Impact through Cross-industry Collaboration

To address the “2024 problem” in logistics and reduce
our environmental impact, we have reassessed our
packaging design for logistics resources with four othercompanies in different industries, and switched to theuse of trailers for transportation.
By switching from individual product shipping topalletized transport, we aim to curb loading inefficiencies.
As a result of these efforts, Lion and the othercompanies jointly received the top MLIT Minister’s Award
for Green Logistics Partnership in the FY2023 Excellent
Logistics Partnership Commendation Program.

1.Individual product shipping Before: Individual product shipping After: Palletized transport
Palletized transport 75 min.
reduction in loading time
120 min.

45 min. (per truck)

2.Modularization (review of packaging design)
Improvement in loading efficiency

Individual loading

Palletization

Modularization

3.Increase in truck size (improvement
in loading volume) Reduction in
number of trucks required
Maximum number of pallets loaded: 16
Large truck: 32 Trailer: 48

SuzuyoRelay transportation in
Nagoya33

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

34

Integrated Report 2024 Overview

Three Growth Strategies
2. Transform Our Business Foundations for Growth

Supply Chain Management
Sustainable Raw Material Procurement

Building a Sustainable Production and Supply System

Enhanced Efficiency through Joint Procurement across the Lion Group and Reduced
Risk through Use of Multiple Suppliers
To reinforce our foundation for growth, we are working to enhance our efficiency through joint
procurement, including with overseas Group companies. To do so, we have implemented asystem for the visualization of procurement data from across the Lion Group’s global sites.
Initially, we will implement a joint procurement system mainly for raw materials, for which such asystem can yield significant cost reductions.
Moreover, in line with recent supply chain disruptions caused by the manifestation ofgeopolitical risks and natural disasters, we are switching to the use of multiple raw material
suppliers while ensuring a balance between distinctiveness and stability of supply. Goingforward, we will make every effort to strengthen our relationships with suppliers and upgrade
our procurement activities.

Enhancing Production Capacity in Core Categories
Lion is working to build a highly flexible, resilient, and sustainable production and supply
system to enable the timely provision of the products customers need.
We are currently moving forward with the construction of a new OTC pharmaceuticals
factory on the premises of our Odawara Plant in Odawara City, Kanagawa Prefecture,with operations scheduled to commence in 2025. The aim is to establish a stableproduction and supply system for the future in line with the growth of the antipyretic
analgesics market, which has been boosted by growing health consciousness and the
COVID-19 pandemic. The new factory will feature state-of-the-art equipment to savelabor, and ensure overall environmental friendliness, including reduced CO2 emissions.
Overseas, we are working to grow our business in Bangladesh, a market we entered in
2022, by proceeding with plans to build a new factory there for dishwashing detergent,oral care and other products.

Promoting Sustainability with Raw Materials Manufacturers and Production Contractors
The palm oil, paper, pulp and other raw materials that Lion uses must be harvested, processedand purchased by our suppliers before they reach us.If issues related to the environment,
human rights or labor occur at any of these stages, even if they are not directly related to Lion,
we could be held responsible.
In order to ensure sustainable procurement, Lion is working to strengthen risk management
by reinforcing coordination with raw materials manufacturers and production contractors torealize more effective supply chain management. Lion’s Procurement Principles clearly state theCompany's stance of considering regulatory compliance, environmental protection and respectfor human rights when selecting business partners.
To help our suppliers understand the importance of sustainability initiatives, we require themto conduct self-checks based on the Lion Group Supplier CSR Guidelines. We only do businesswith suppliers that meet the standards set according to our key sustainability criteria.
We also ask suppliers to support and comply with the LION Human Rights Policy, and only
engage in transactions with suppliers who clearly state their respect for international standardsof conduct relating to human rights, including the International Bill of Human Rights and the ILO
Declaration on Fundamental Principles and Rights at Work.
We will continue to coordinate with our suppliers in building and operating a sustainableprocurement system.
WEB

LION Human Rights Policy
https://www.lion.co.jp/en/company/governance/policies/human-rights.php

WEB

Lion Group Supplier CSR Guidelines
https://www.lion.co.jp/ja/sustainability/businesscustom/valuechain/pdf/eng.pdf

WEB

Sustainable Material Procurement Policy
https://www.lion.co.jp/en/company/governance/policies/material-procurement.php

Energy-Saving through Internal Carbon Pricing and Labor-Saving with Smart
Factories
For sustainability, in 2022 we began utilizing an internal carbon pricing system, a measurethat will enable us to accelerate investment in energy-saving measures.
In addition, we are promoting the visualization and utilization of production site data,
reinforcing safety by employing cameras to monitor use of protective gear, enhancing
quality by using mobile terminals to check the weighing and loading of materials, andimproving the efficiency of fixed asset management with RFID tags. In these and otherways, we aim to create smart factories that combine digital technologies and people tomaximize efficiency and labor-saving.
Main Production Capacity
Increases by 2030
Japan・ New toothpaste factory (Sakaide City):
Operations began in 2021
・ New OTC pharmaceuticals factory 		(Odawara City):Operations scheduled to begin
in 2025

Capital expenditures（Billions of yen）
50.0
47.5

July–Dec

40.0
30.0

30.8
21.8

20.0
10.0

Overseas・ Laundry detergent facility expansion(Thailand):Operations began in 2022
・ New factory for dishwashing detergents andoral care products (Bangladesh):Operations scheduled to begin in 2025

Jan–June

16.7

9.4

14.0

12.4

10.2

2021

2022

0
2020

24.3

Includes intangible assets.

27.8
11.8

22.0

15.9
2023

2024
PlannedLion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
3. Generating Dynamism to Realize Innovative Change

Human Capital
One of Lion's growth strategies is to generate dynamism to realize innovative change. We aim to achieve this across the organization by having employees inspire one another and in turn grow andsucceed as autonomous individuals.We are working to increase employees’ professional fulfillment through self-directed learning opportunities, career development support and the promotion of flexible
work styles. We are also striving to enhance our ability to execute strategies by promoting flexible issue-based organizational management, position management to ensure that the right employees arein the right roles, and job group-based human resource management to acquire and develop highly specialized personnel. Doing so will lead to employee growth and improved corporate value.

Governance
Governance in Human Resource Development
Lion recognizes that the enhancement of human capital is an important management issue, andhas therefore established the Human Resource Development Committee, which is chaired by amember of senior management. The committee discusses and shares progress on various
human capital-related issues and measures, such as the development of outstanding talent, thetraining of select junior employees and the improvement of employees’ language capabilities.
Moreover, to further the development and utilization of professional human resources, wehave categorized roles into job groups. In addition to engaging in cross-organizational humanresource and career development based on these job groups, we have also set up the Lion
Career Village to support employees’ autonomous growth through e-learning, case-based
discussions and other programs.

Strategies
Four Human Resource Development Strategies
Human resource development at Lion is underpinned by the following four strategies. As aframework to promote the execution of these strategies, since 2019 we have continued to rollout the LION Professional Fulfillment Reforms, and we are aiming to improve productivity andcreate new value by encouraging employees to act autonomously.

Developing Human Resources
In addition to providing support for employees’ self-actualization, we are also making efforts tofoster a a Company-wide culture that promotes employee growth. By strengthening therelationships between supervisors and their subordinates, we are striving to provide conditions
in all departments that enable employees to feel secure. Moreover, to enable employees toachieve the careers they have designed for themselves, we provide growth opportunities thatfacilitate autonomous acquisition of relevant knowledge and experience, thus making use of
their diverse talents.
Promoting Work-Life Enrichment
Based on the concept of work-life enrichment, in which professional and private life complement
each another, Lion strives to create environments that enable employees to lead fulfilling lives
both at work and at home. With a focus on employees' lives outside of work, such as their roles
at home and activities outside the office, we offer a wide range of assistance for various
lifestyles and life plans, including flexible work style systems, support for childcare and nursing
care, and financial planning education measures.
Promoting Diversity and Inclusion
We believe that leveraging the diverse knowledge and experience of our employees will lead to
new ideas and innovation that create better habits.Therefore, we are enhancing the diversity ofour decision makers and creating an organizational culture in which employees with diverse
values and ideas can demonstrate their individuality and abilities and succeed professionally,
regardless of nationality, gender or other attributes.

Human Resource Strategies for Generating Dynamism to Realize Innovative Change
Four Human Resource Development Strategies(1) Developing humanresources(2) Promoting work-life
enrichment(3) Promoting diversity
and inclusion(4) Improving employee
healthEnhance Employee Engagement
LION Professional Fulfillment Reforms

Further inculcate the corporate philosophy

New human resource management system

Improving Employee Health
We believe that a healthy workforce is fundamental for sound corporate growth. Based on thismindset, we are working to provide support for the physical and mental health of every
employee. The Company, employees and the health insurance association work together
through “GENKI” Action activities to foster healthy habits. This includes improving lifestyle
habits, health literacy and oral health, as well as activities to prevent cancer, help employees
quit smoking, and promote mental health.

35

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
3. Generating Dynamism to Realize Innovative Change

Human Capital
Initiatives to Enhance Employee Engagement
To achieve our vision and put our purpose into practice, we believe that the prioritization of
employee engagement enhancement will enable us to increase economic and social value andtransform into an organization that stays ahead of the competition.Accordingly, we arepromoting the LION Professional Fulfillment Reforms and working to further inculcate ourcorporate philosophy.
LION Professional Fulfillment Reforms
In addition to our efforts to create employee-friendly workplaces from the perspective of humanresource development—in everything from hiring diverse personnel with a rich and varied arrayof skills, to training, compensation, and the fostering of healthy habits—we also focus on theprofessional fulfillment of every employee.
Moreover, we broadly define job roles and classify job roles for management posts and othercritical positions, appointing the most suitable individual to each position. We are also promoting
flexible work styles, diversity and inclusion, and health and productivity management to enhance
and activate the human capital supporting our operations.
LION Professional Fulfillment Reform Framework•N ew human resource management system(New personnel system, job group-based
personnel management)• Career design support• P roviding self-directed learning opportunities(Lion Career Village)• Multifaceted evaluations of ability•M aking employee information moreaccessible•S ide job system•N ew health management system: GENKI Navi
→ Visualization of health checkup results
and future health risk data
→ Archiving exercise, diet, blood pressure
and weight data
• Preventive dentistry•C ountermeasures against three common
types of cancer• Reinforcing nonsmoking initiatives

WEB

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

(1) Work
management
Make maximum useof diverse talent(2) WorkstylesChange ways ofworking, withemphasis on
independence(3) Relationship strengthening
Mutual understanding and respect

Lion-style health support(4) “GENKI” Action

Together with Employees
https://www.lion.co.jp/en/sustainability/employee/• Discretion in work styles(full-flex, telecommuting, use of time off
in hourly increments, dress code
freedom)• Head office relocation

Promoting the Practice of Our Purpose through the New Human Resource Management System
As one initiative, under (1) Work management in the LION Professional Fulfillment Reform
Framework (below left), we have established a new human resource management system.
The aim of the new system is to strengthen the relationship of support and contribution
between the Company and employees. We believe it is important to use this system to increase
the number of employees who achieve their personal goals and realize a life that is rewarding,fulfilling, and allows personal growth through work. The new personnel system at the center ofthe new human resource management system includes a revised evaluation system in which
employees can set goals that are more clearly linked to the Company’s vision. This helps toensure that actions connected to putting our purpose into practice are positively evaluated.
Objectives and Features of the New Human Resource Management System
We launched the new personnel system for management personnel in January 2023, and fornon-management personnel in January 2024. We also renewed the human resource development
system to ensure seamless functionality among various systems and measures. The aim is toenhance our human resources development capabilities and organizational strengths.
To create a company that empowers employees to choose their own path and grow toward
their vision of what they want to be, we are matching jobs to people through the visualization ofduties and roles, and supporting employees’ efforts to develop their own careers. Promoting
individual growth in this way will improve our organizational strength and boost employee
fulfillment. In particular, by enabling employees to gauge the gap between their current career
and their career aspirations, we are promoting self-directed learning and building relationships inwhich supervisors support these learning efforts.
Create a company that empowers employees to choose their own path and grow toward their vision of what they want to be
Visualization of duties and roles• Relationship enhancement program• 1-on-1 meetings• Employee award system• Learning about, recognizing andaddressing each other’s biases• Making employee information moreaccessible• Side job system

Grade

Compensation

Human resource development
system•R
 elationship enhancement
program•C areer design support•P rovision of self-directed
learning opportunities•M ultifaceted evaluations ofability

Visualization of human resources

Matching
Transfer•D efinition of duties and roles• Job maps

Link one’s career
to management
Draw up a career
map
Developcapabilities

Appointment

Increase professionalfulfillment

Improve organizational understanding
strength through growth
Amass theof each individual

various strengths
of individuals

Individual

Evaluation
Improvemanagement
skillsPromoteself-• Competencies• Experience• Expertise• Career aspirations

Career autonomy support

Supervisor

36

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
3. Generating Dynamism to Realize Innovative Change

Human Capital
Inculcating Our Corporate Philosophy
Every year we administer the Employee Awareness and Behavior Survey to all domestic
employees in Japan to check the level of understanding and practice of our corporate
philosophy, which is closely linked to improving employee engagement. Based on the results ofthis survey and qualitative interviews about the work environment, we make continuous efforts
to further inculcate our corporate philosophy throughout the Company.
To commemorate Lion’s 132nd anniversary on October 30, 2023, we celebrated Foundation
Week, during which we implemented various measures to encourage employees at our worksites and factories in Japan to think about our founding spirit and purpose.
Since 2022 we have held workshops in each department to foster understanding of andbuild resonance with our purpose and beliefs. In 2023, workshops were held by departments
Company-wide. Departments organized and shared their operational issues in a dialogue
format to align respective approaches and put the Company’s purpose into practice. As aresult, employees in each department have begun taking the initiative in engaging in dialogue
about the Company’s purpose- and beliefs. We also hold workshops on our purpose andbeliefs at our overseas Group companies. Our Employee Awareness and Behavior Survey
shows that these workshops are helping to increase understanding and practice of ourcorporate philosophy. We will continue to roll out various activities to heighten every employee’s
understanding and practice of our corporate philosophy.
Lion’s 132nd Anniversary Week activities

Risk Management
Please see “Business Risks” for the specific risks and countermeasures related to humancapital. Page 64

Indicators and Targets
The main indicators and targets related to human capital are as below.
Material
IssuesTargets

Indicators

Developing
Human
Resources

Foster human resources who
generate dynamism to realize
innovative change by creating
environments that allow all
employees to exercise theirdiverse abilities to the fullest
and embrace challenges.

• Employees who are using
diverse educational
programs (Lion Career
Village) for individualizedskill acquisition and ability
development
100%

• 57%

PromotingWork-Life
Enrichment

Create an environment thathelps employees fulfill theirambitions through synergy
between work and private
life.

•E
 mployees who feel thatlife outside of work (role athome and activities
outside the office) has apositive impact on work
75% or more

• 54%(Japan)

Enable human resources withdiverse values and ideas tofully express their individuality
and abilities and succeed
professionally.

•R atio of women in
management
30% or more•P ercentage of employees
who feel that employeeswith diverse values areable to succeed
professionally
80% or more

• Ratio of women in
management24%• Employees who feel so
56% (Japan)•E mployees getting dental
checkups100%• Absenteeism
Improve from the 2021
level

• Employees getting dental
checkups 90% (Japan)(Calculation method foroverseas under consideration)• Absenteeism 0.9% (Lion
Corporation in Japan; slightincrease compared with 2021)(Calculation method foroverseas under consideration)

PromotingDiversityandInclusion
Head officeHirai Research Center

Workshops on Lion’s purpose

Improving
Employee
HealthJapan

Malaysia

Support mental and physicalhealthcare for employees toreinforce Group humanresources and achievesustainable corporate growth.

Results (2023)

37

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
3. Generating Dynamism to Realize Innovative Change

Human Capital

Main Initiatives
Developing Human Resources
To create new learning opportunities in line with changing modes of learning, we haveintroduced the Lion Career Village (LCV) platform to support employees’ self-directed learning.
LCV features video-centered e-learning and small group discussions. Users can access andlearn from approximately 5,000 pieces of online content and discussion-style programs
encompassing knowledge from in-house and external sources.
In this way, we are supporting the development of human resources who take the initiative inautonomously acquiring new skills and achieving personal growth.
Indicator

Employees who are using diverse educational programs (Lion Career Village) for
individualized skill acquisition and ability development 100%Progress

57%

Issues andInitiatives Going
ForwardWEB

To help employees gain knowledge that will further expand the breadth and depth oftheir work and with an eye to accelerating institutional learning, we will promote thesharing of learning content among Group companies and create environments thatenable them to teach one another and share what they have learned.

Promoting Work-Life Enrichment
We have created various systems to facilitate flexible work styles, including full-flex,
telecommuting, and the use of time off in hourly increments, paying particular attention toenriching employees’ lifestyles. In 2023, we held Family Day at our new head office to acquaintemployees’ families with the facilities. The event was attended by around 600 people including
employees, their families and event staff. To support employees’ life plans, we have begun
offering education on life planning and financial planning.
Indicator

Employees who feel that life outside of work (role at home and activities outside theoffice) has a positive impact on work 75% or more

Progress

54% (Japan)

Issues andInitiatives Going
Forward

We need to revise systems that are based on the traditional family model.
To ensure we can cater to the increasingly diverse range of lifestyles, we will revise ourexisting systems and further enhance our support for childcare and nursing care.

Developing Human Resources
https://www.lion.co.jp/en/sustainability/employee/development/

An employee and his son interact with company executives(left) on Family Day

An online lesson via the LCV platform

Family members looking around the head office facilities

38

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Three Growth Strategies
3. Generating Dynamism to Realize Innovative Change

Human Capital

Main Initiatives
Promoting Diversity and Inclusion
In 2023, we broadened the scope of participants in the study session on unconscious bias heldin 2022 from senior management and department heads to include all managers. The aim of
this initiative is to ensure management makes optimal decisions that ensure fairness, and todeepen understanding of the importance of embracing diversity. In addition, 96% of all
domestic employees in Japan have attended an e-learning program on diversity and inclusion.
We have also conducted selective leadership training for women since 2022. Throughmentoring by external experts, building internal and external networks and conducting
programs that allow participants to think about their own style of leadership and actively take onchallenges, more than 80% of participants have said they feel a positive change in their own
attitudes and actions.

Indicator

Ratio of women in management 30% or more
Percentage of employees who feel that employees with diverse values are able tosucceed professionally 80% or more

Progress

Ratio of women in management 24%
Percentage of employees who feel so 56% (Japan)

Improving Employee Health
We believe that a healthy workforce is fundamental for sound corporate growth. Based on thismindset, we are working to provide support for the physical and mental health of every
employee. The Company, employees and the health insurance association work together
through “GENKI” Action activities to foster healthy habits. This includes improving lifestyleroutines, health literacy and oral health, as well as activities to prevent cancer, help employees
quit smoking, and promote mental health.
To promote preventive dentistry, we hold dental checkups at 15 work sites. In addition toscheduling checkups at times convenient for night workers, we also encourage employees to
get regular checkups at dental clinics. As a result, 90% of employees in Japan got dental
checkups in 2023. Another initiative to foster healthy habits in employees’ daily lives involves theuse of the health management system GENKI Navi, an app that awards points to each
employee based on daily physical data (weight and blood pressure) and lifestyle habits (diet andexercise). A total of more than 3,000 Group and other employees in Japan have begun using
this system since its launch. As a result of these activities, in 2024 Lion was once again chosen
for inclusion in the Health & Productivity Stock Selection.
Indicator

Issues andInitiatives Going
Forward

We will create opportunities for discussion to understand the breadth of diversity in
the Company and the diverse values of our employees. In doing so, we aim to foster aculture in which diversity becomes an organizational strength.

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

Progress

90% (Japan)(Calculation method for overseas under consideration)

Absenteeism*

0.9% (Lion Corporation in Japan; slight increase compared with 2021)(Calculation method for overseas under consideration)

Issues andInitiatives Going
Forward

We will reinforce and ensure thorough implementation of measures to improvemental health, which is one of the main factors behind absenteeism, and cancer
countermeasures.
(Mental health training for management, financial support for secondary cancer
screenings, etc.)* Absenteeism refers to the habitual pattern of absence from work or other duties without valid reason.

WEB

An empowerment seminar as part of leadership training for women

Improving Employee Healthhttps://www.lion.co.jp/en/sustainability/employee/health/39

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

40

Message from the Director Responsible for Sustainability
We aim to contribute to society andachieve further business growththrough the creation of better habits
by integrating sustainability into
management strategy.
Director,
Senior Executive Officer

Kenjiro Kobayashi
Integrating Sustainability into Management
Strategy
As the urgency of addressing global environmental and social
issues rapidly escalates, society as a whole is engaging in various
initiatives to build an inclusive, sustainable and resilient future forboth people and the planet. The Lion Group needs to implement
even more ambitious initiatives. We believe that addressing theissues that society faces will involve creating habits among
consumers to reduce CO2 emissions, save water and electricity,and promote healthy lifestyles. For example, according to theUnited Nations, on a consumption basis 65% of CO2 emissions
come from households, suggesting that households play a crucialrole in achieving significant emission reductions.1,2 The key ispeople’s everyday habits. We strongly believe that significant
change can be achieved through habits that help lower CO2
emissions and promote everyday health.
Based on our purpose, “Make a difference in everyday lives byredesigning habits: ReDesign,” we set out a management strategy
to reinforce initiatives for Sustainability Material Issues and tosynergistically advance our three growth strategies. We haveidentified the Sustainability Material Issues to address by 2030,
outlining a roadmap for creating value in businesses in which theLion Group has a competitive advantage and is fulfilling its
responsibilities as a good corporate citizen. In particular, theCompany have positioned “creating healthy living habits” and“promoting environmental initiatives for a sustainable planet” as
top-priority material issues in which the Company must invest
management resources to secure a competitive advantage. To
incorporate these material issues into management and in turnour business activities, the Sustainability Promotion Council, which

I chair, formulates sustainability strategies related to theenvironment, society, and governance, makes decisions on
specific action plans, and monitors progress toward medium- tolong-term goals. I will continue working to fulfill our purpose andleverage our uniqueness, while steering the Group towardsustainability in management to contribute to society and achieve
further business growth through the creation of better habits.

Evolving and Expanding the Redesign of Living
Habits to Grow Our Businesses and Help Resolve
Social Issues
To create healthy living habits, one of our top-priority material
issues, we are currently focusing on instilling habits that are
directly linked to improved health, such as tooth brushing andhand washing. Our objective is to provide the 1 billion people inJapan and across Asia in the regions that the Lion Group serveswith products, services and information that help to create healthyliving. Going forward, we will accelerate efforts to achieve thisobjective by increasing collaboration with overseas Group
companies. Moreover, in the field of oral health, an area ofexpertise for Lion, we have newly established the Oral Health
Product Development Department to develop new products andservices using IoT, AI, and other technologies, thus creating newmarkets and further increasing the scope of our business.
To promote environmental initiatives for a sustainable planet,
we are collaborating with consumers in the creation ofenvironmentally friendly habits. By proposing planet-friendly
lifestyles, we contribute to the achievement of a decarbonized,
resource-circulating society. In cooperation with local governments
and other companies, we are developing recycling technologies

Creation of Social and Economic Value
Healthy minds and bodies

Preservation of the global environment

Promote better health through habits

Planet-friendly lifestyles

Resolution of social issues

Creation of living habits
Popularize the habits that Lion proposes

Customer retention

Directly connected
to business

The Science of Habits (DX)

Marketexpansion

Create business opportunities

and structuring collection systems for refill containers. We willcontinue to enhance these partnerships with the aim of integratingthese technologies and systems into social infrastructure.
In addition, we aim to create new business opportunities by
providing experiences that allow people to create habits moreenjoyably and proactively, as well as by taking a scientificapproach to habits using digital technologies such as dataprocessing to visualize changes in people’s behavior.
Furthermore, the Lion Group needs to nurture employees who
embody its purpose. In January 2023, we introduced a new
personnel system for managers that incorporates a job-focused
perspective, replacing the previous system that determined job
titles based on seniority. Our goal is for each employee to map out
a clear picture of how they should develop themselves to achieve
their aspirations, thus increasing motivation on the job, increasing
expertise, and maximizing the value they create.
Going forward, the Lion Group will continue to promote sustainability
in management, leveraging its uniqueness while balancing the creation ofsocial and economic value to improve corporate value.
Sources:	1. United Nations Environment Programme (2020). The Emissions Gap Report2020. Nairobi.
2. Ivanova, D., Stadler, K., Steen-Olsen, K., Wood, R., Vita, G., Tukker, A. and
Hertwich, E. G. Journal of Industrial Ecology, 20(3), 526-536 (2016)

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Sustainability Initiatives
Reinforcing Initiatives to Address the Sustainability Material Issues
Overview

GovernanceApproach to Sustainability
Upholding its founding spirit of “benefiting society through its business activities,” in addition to
pursuing economic development, we have long considered its impact on the environment andsociety and worked to address environmental and social issues through its businesses.
At present, we are tackling key management issues to reduce risks and achieve ourmanagement vision for 2030 of “Becoming an advanced daily healthcare company.” At thesame time, we are practicing management driven by our purpose, “Make a difference ineveryday lives by redesigning habits: ReDesign.” Based on comprehensive consideration of theentire value chain and stakeholders, we have identified 13 Sustainability Material Issues withregard to both risks and opportunities.
The Lion Group will synergistically promote its Sustainability Material Issues and three growthstrategies in order to contribute to the realization of a sustainable society and achieve businessgrowth.

Sustainability Management Promotion System
In order to promote sustainable management, until 2020 we held the Sustainability Promotion
Meeting, comprising all executive directors, including the president, and related departments. In
2021, we revised the Sustainability Promotion Council, convening twice a year.
We have established the E, S and G subcommittees under the council, each headed by an
executive officer, to promote and monitor initiatives for the Sustainability Material Issues.
Decisions made by the council are shared with the Executive Committee and, as necessary,presented to and discussed by the Executive Management Board and the Board of Directors,
before being reflected in the business activities of the business execution departments.

Executive Committee

Vision2030 Long-term Strategic Framework

Management
visionImplementation Framework
Executive Management Board/Board of Directors

ReportBecoming an advanced daily
healthcare company

Present items for discussion

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

E Subcommittee
Management
strategy

Reinforcing initiatives toaddress the Sustainability
Material Issues

Advance our three growth strategies

S Subcommittee(Global Environment)(Social Environment)

Run by: Executive officers

Run by: Executive officers

G Subcommittee(Action Management)
Run by: Executive officers

PurposeMake a difference in everyday lives by redesigning habits

Strategy
Plan
ActBusiness execution departments
WEB

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

41

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Sustainability Initiatives

Reinforcing Initiatives to Address the Sustainability Material Issues
Strategy

Top-priority Sustainability Material Issues
The aim of Vision2030 is to sustainably enhance corporate value by creating both social and economic value through the synergistic promotion of growth strategies in addition to initiatives to address our Sustainability
Material Issues. These Sustainability Material Issues are relevant to both business and society at large and, with the goal of helping to realize a healthy future for people and the planet, their selection was informed bybroad business, environmental and social sustainability perspectives.
In 2020, we reexamined the Sustainability Material Issues that we need to address ahead of 2030 by backcasting from the vision we have for society in 2030, taking into account factors such as the achievement ofour management vision and our contribution to the Sustainable Development Goals (SDGs).* In particular, we have positioned “creating healthy living habits” and “promoting environmental initiatives for a sustainable
planet” as top-priority material issues in which we must invest management resources to secure a competitive advantage. In 2021, we revised our indicators and objectives due to the COVID-19 pandemic and drasticchanges in the social environment.In addressing the Sustainability Material Issues, we seek to contribute to everyday lives so that we can create a valuable future for all, while helping to achieve the SDGs.
* 17 global goals adopted by the 193 member states of the UN Summit held in September 2015, to be achieved between the years 2016 and 2030 as part of the 2030
Agenda for Sustainable Development (referenced from the United Nations Information Centres website)WEB

Creating Healthy Living Habits

Objectives and Indicators

Total number of persons provided with products, services andinformation aimed at creating healthy living habits: 1 billion
Provide opportunities for everyone to practice oral care whenevernecessary and foster oral care habits to promote health for all.

Oral care habits (500 million people)• Provide products and services• Communicate information• Conduct educational and awareness activities(Inclusive oral care, etc.) Page 45

Promote the establishment of cleanliness and hygiene habits that prevent
bacteria and viruses from entering the body across all aspects of dailyliving, so that everyone can stay healthy.

Promoting Environmental Initiatives for a Sustainable Planet
Realizing a Decarbonized Society

CO2

Related SDGs

Realizing a Resource-circulating Society
Plastic

Challenge

Challenge

Lion will reduce CO2 emissions tozero throughout its businessactivities by 2050.

Lion will optimize use ofrecirculated plastic by 2050.

2030 objective:

Promote the 3Rs (reduce, reuse, and recycle)
and the utilization of renewable resources

55%

CO2 emission reduction incomparison with 2017 levels
in absolute quantity

Lion will reduce CO2 emissions byhalf throughout the lifecycle of its
products by 2050.
2030 objective:

Cleanliness and hygiene habits (500 million people)• Provide products and services• Communicate information• Conduct educational and awareness activities(Promotion of hand washing habits) Page 46

Steps for Identifying Sustainability Material Issues
https://www.lion.co.jp/en/sustainability/management/materiality

30%

CO2 emission reduction
in comparison with 2017
levels in absolute quantity

Lion aims to become carbon
negative by 2050.

2030 objective:

Reduce petrochemicalderived plastic usage to

Water

Challenge

Lion will optimize water usage forsustainability by 2050.
2030 objective:

2030 objective: CO2 emission reduction effectin excess of Lion’s own
emissions (Japan)

Related SDGs

70% or less

30%

Water usage reduction perunit of net sales acrossproduct lifecycles incomparison with 2017 levels
Pages 47-49

42

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Sustainability Initiatives

Reinforcing Initiatives to Address the Sustainability Material Issues
リスク管理
Risk Management
At the Lion Group, we have identified and are carefully managing sustainability-related risks that may seriously impact management as we work to achieve sustainable growth and fulfil oursocial responsibility by supplying products to our customers. Please see “Business Risks” on page 64 for specific risks and countermeasures.
Objectives and Indicators

Sustainability Material Issues, 2030 Objectives and Indicators, 2023 Results and Measures to 2030
We conducted activities toward achieving the 2030 objectives for each Sustainability Material Issue. We will continue to introduce further initiatives. Going forward, we will boost our efforts tomanage and address these risks.
Material Issues

Promoting
Environmental
Initiatives for a
Sustainable Planet

Link

Top-Priority Material Issues

E

S

Objectives

Indicators (2030)

Reduce CO2 emissions throughout businessactivities.

• CO2 emissions throughout business activities
Down 55% compared with 2017 levels(Absolute quantity)

Reduce CO2 emissions throughout productlifecycles.

Globally Common Measures to 2030
• Reduce energy usage through energy-saving activities.
• Purchase electricity generated by renewable energy sources.

• CO2 emissions throughout product lifecycles
Down 30% compared with 2017 levels(Absolute quantity)• Up 3% compared with 2017• Reduce household CO2 emissions from product use through the provision ofenvironmentally friendly products and services and the promotion of environmentallyfriendly habits.
• Reduce CO2 emissions at the stage of procurement through supplier engagement
and the purchase of raw materials that generate low CO2 emissions.

Achieve a CO2 emissions reduction effect inexcess of Lion’s own emissions to help
society become carbon negative.

• Contribute to a CO2 emission reduction effectin excess of Lion’s own emissions (Japan)• Plan
to formulate actions and KPIs and verify their effectiveness• Reduce society’s overall CO2 emissions through collaboration with other industry
actors and companies.
• Reduce household CO2 emissions through provision of environmentally friendly
products and services.

Actively promote the 3Rs (reduce, reuse,recycle) and renewable resource activities.

• Petrochemical-derived plastic use rate
70% or less• 96% (Japan)
Rate of containers and other packaging using sustainable materials: 3.9%

• Reduce usage of petrochemical-derived materials through the increased use ofrecycled plastic and biomass materials in products, containers and packaging.
• Continuously promote reduced use and reuse of plastic in products, containers andpackaging.

Reduce water usage throughout productlifecycles.

• Water usage throughout product lifecycles
Down 30% compared with 2017 levels(Per unit of net sales)• Down 13% compared with 2017

• Reduce water usage by consumers through the provision of water-saving products.

Oral care habits: 310 million*
Spreading Awareness of Preventive Dentistry Habits(Japan)• Began
services supporting the oral care habits of corporate customers and children (Okuchi Plus You andOkuchi-iku)(Overseas)• Conducted
educational and awareness activities to promote the formation of good tooth brushing habits among
kindergarten and elementary school children (implemented preventive dentistry habits)
Putting Preventive Dentistry Habits into Practice(Japan)• Promoted

greater frequency of tooth brushing
37% of population brushed teeth after lunch (target for 2030: 50%)
• Promoted greater use of products other than toothpastes and toothbrushes
38% of population used dental floss products (target for 2030: 50%)
* Source: Lion survey• Increaserange of products and services that promote the creation of better oral
care habits.
• Reinforce
educational and awareness activities aimed at establishing preventive
dentistry and better oral care habits.
• Promote
activities to address personal and social challenges through oral care.
(Inclusive Oral Care)

Cleanliness and hygiene habits: 170 million*
Promoting and Establishing Cleanliness and Hygiene Habits through Educational Institutions(Lion Group)• Conducted
educational and awareness activities at preschools, kindergartens and elementary schools to promote
hand washing habits• Conducted hygiene educational and awareness activities through JICA in Bangladesh• Conducted the My Bottle Sticker Drawing Contest (Expanded activities in the domain of establishing cleanliness andhygiene habits)(Japan)• Conducted the Replay Project for Cleanliness and the My Bottle Campaign* Source: Lion survey• Provide
products and services that support the establishment of hand cleanlinessand hygiene habits in daily living.
• Provide
new customer experiences in all aspects of daily living through the provisionof products and services that protect customers from bacteria and viruses.
• Implement
educational and awareness activities to establish cleanliness and hygiene
habits in all aspects of daily living.

Provide opportunities for everyone to practiceoral care whenever necessary and foster oral
care habits to promote health for all.

Creating
Healthy Living
HabitsProgress (2023 Results)• Down 39% compared with 2017
(Figure after deducting purchases of carbon credits. 29% reduction if not deducted.)• Total number of persons provided withproducts, services and information aimed atcreating healthy living habits
1 billion(Oral care habits: 500 million people,
Cleanliness and hygiene habits: 500 million
people)Link

Promote the establishment of cleanlinessand hygiene habits that prevent bacteria andviruses from entering the body across all
aspects of daily living, so that everyone canstay healthy.

43

Lion Integrated Report 2024

Material Issues

Objectives

Our Purpose

Our Strategy

Indicators (2030)

Corporate Governance

Performance/Data

Progress (2023 Results)

Integrated Report 2024 Overview

Globally Common Measures to 2030

PromotingDiversity andInclusion

Link

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

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

PromotingWork-Life
Enrichment

Link

Create an environment that helps employees
fulfill their ambitions through synergy between
work and private life.

• Employees who feel that life outside of work(role at home and activities outside the office)has a positive impact on work 75% ormore• 54% (Japan)• Create an environment that enables employees to fulfill their life ambitions andachieve their ideal lifestyles.

Developing
Human Resources

Link

Foster human resources who generate
dynamism to realize innovative change by
creating environments that enable all
employees to exercise their diverse abilities
to the fullest and embrace challenges.

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

• 57%• Introduce e-learning system and curriculum that meet the needs of overseas Group
companies.
• Create mechanisms that will be used to provide content for learning opportunities on
an ongoing basis.
• Use a self-administered daily oral care program and regular dental checkups tocreate an environment that enables all employees to implement a PDCA cycle and toprovide information and learning opportunities regarding oral self-care.
• Provide opportunities for management to learn about checking the mental health ofsubordinates and for all employees to learn about caring for their own mental health.
• Improve health literacy by providing information that helps employees understandtheir own health conditions and future risks, as well as what preventative actions totake in their daily lives.
• Provide
opportunities to learn about safety and disaster prevention, and implement
activities to promote understanding of basic safety activities.
• Buildmechanisms for exchanging safety information, and proactively disclose
information on levels of workplace safety based on the management of records ofoccupational accident frequency.

• Ratio of women in management: 24%• Employees who feel so: 56% (Japan)• Provide opportunities for employees to deepen their understanding of diverse values.
• Create systems and mechanisms for diverse human resources to succeed professionally.

Link

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• Employeesgetting dental checkups: 90% (Japan)
Note: Calculation method under consideration overseas• Absenteeism: 0.9% (Lion Corporation in Japan (Slightly up from 2021)
Note: Calculation method under consideration overseas

Enhancing the
Occupational
SafetyManagement
SystemLink

Enhance systems to ensure compliance withoccupational safety and health laws andregulations and to enforce safety awarenessthoroughly for the safety and peace of mindof employees and outside partners working
on site.

• Participation in safety education and training
Implement as planned (100%) at work sites• Compliance with occupational safety andhealth laws and regulations
Serious accidents and incidents Zero

• Participationin training: 100% as planned• Serious
accidents and incidents: Zero

Respecting
Human Rights

Link

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

• Human rights due diligence implementation
for material human rights issues
100%

Link

Implement sustainable procurement withzero tolerance for human rights and labor
problems (including child labor and forcedlabor) or environmental destruction in linewith the Sustainable Material Procurement
Policy and Lion Group Supplier CSR Guidelines.

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

• Ratioof certified raw materials procurement
Japan:
Certified paper and pulp: 75% (item ratio)
Certified palm oil and palm kernel oil derivatives: 99% (based on key raw materials)
Lion Group:
Certified paper and pulp: 20% (item ratio)
Certified palm oil and palm kernel oil derivatives: 51% (based on key raw materials)• Ratioof suppliers supporting zero deforestation
Japan: 54%, Lion Group: 41%• Create and promote a sustainable procurement system in cooperation with suppliers.

Pursuing
Customer
Satisfaction and
Trust

Link

Promote and reinforce customer-oriented
business activities by improving customer
support quality and the value of products
and services.

• Reflection of customer opinions in all products
and services so that customers will continue
to choose them

• Shared International VOC Report (Overseas, June and December 2023)• Conducted two sessions of training to deal with online controversy and backlash (Japan, June 2023)• Commenced active communication via social media (Japan, October 2023)• Evolve the activities of customer response departments by steadily promoting threesteps: Understand the current situation, formulate plans, and promote activities• Create an environment for improving customer relationships and expanding therange of problem resolution methods.
• Create and implement a system for reflecting customer feedback in products andservices.

Promoting Risk
Management

Link

Build a comprehensive and exhaustive risk
management system for identifying andquickly and appropriately dealing with risks
to achieve sustainable corporate growth.

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

• Disclosed once

• Build and raise awareness of a management system that includes overseas Group
companies.
• Use a consistent format for investigating risks and implement countermeasures.
• Share information on progress of response through reports to the Board of Directors
once a year.

Link

Reinforce effective initiatives to instill complianceawareness and thus earn and maintain thetrust of society.

• Participation in compliance education andtraining Implement as planned (100%) atwork sites• Serious compliance violations Zero

• Participationin training: 100% as planned• Seriouscompliance violations: Zero

• Build and enhance a compliance system that includes overseas Group companies.
• Further inculcate compliance through ongoing implementation of management andemployee training and questionnaires, etc.
• Improve Group-wide risk perception and accelerate risk response by designatingcompliance managers at overseas Group companies and building a global hotline.

Link

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

• Disclosure of the results of the establishment
and operation of the internal control system
At least once a year
• Improvement in evaluations from externalorganizations
Continuously improve from 2020 onward• Disclosed once
• Continued activities to maintain or improve evaluation compared with 2022

• Evaluate and disclose results of the operation of the current internal control system.
• Clarify status of establishment of internal control systems at overseas Group
companies and evaluate their operation.
• Continuously and proactively disclose governance-related non-financial information.

Improving
Employee HealthS

Contents

Building
Responsible
Supply Chain
Management

Reinforcing
G Compliance

Enhancing
Governance• Human rights due diligence implementation
Lion Group: 100%
Suppliers: 87%• Build a mechanism for addressing human rights issues.
• Identify material human rights risks and verify how those affected are negatively impacted.
• Execute and monitor measures for addressing human rights risks that have been
identified.
• Proactively disclose status of response to human rights due diligence implementation.

44

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Sustainability Initiatives

Top-Priority Sustainability Material Issues: Creating Healthy Living Habits
Since its founding, the Lion Group has contributed to society by promoting and establishing healthy living habits such as tooth brushing and hand washing. Our purpose is “Make a difference in everyday
lives by redesigning habits: ReDesign.” Based on this purpose, by providing healthy living habits to the 1 billion people in our business areas, we will contribute to better everyday lives and expand ourbusinesses.

Lion Group Initiatives for 2030 (Oral Care Habits)
TargetOral care habits: 500 million people

Total number of persons provided withproducts, services and information aimed
at creating healthy living habits: 1 billion• Provide products and services• Communicate information• Conduct educational andawareness activities(Inclusive Oral Care, etc.)

Oral care habits: 500 million people
Cleanliness and hygiene habits: 500 million people

Approach
Evolve the idea of preventive dentistry habits

Provide products and services that utilize
IoT, AI and other technologies+

Contribute to reducing health disparities
and expand business opportunities by
eliminating inequalities in oral care

The Lion Group has been working to establish tooth brushing habits to prevent cavities andgum disease. Ahead of 2030, we will provide products and services using digital technologies
and eliminate inequalities in oral care opportunities as part of the evolution toward preventive
dentistry habits.
In July 2022, we launched a new corporate well-being support service called Okuchi Plus
You. As of October 2023, the service had reached more than 10,000 people, and is contributing
to better oral health in the workplace, as well as the health and productivity management
activities of companies. In April 2024, we began offering the Okuchi-iku Magic Toothbrush, an
IoT-based oral care solution for children.
At Lion, we are conducting inclusive oral care activities to address social and environmental
issues. To ensure that everybody can make preventive dentistry a habit—regardless of living
environment, physical limitations, economic circumstances, education, access to informationor other factors—we are working with external partners to roll out various initiatives. The
Okuchikarada Project, which looks at the correlation between children’s cavities and theirfamily’s financial circumstances, is just one example of our inclusive oral care activities.

Conduct Educational and Awareness Activities: Okuchikarada Project for Inclusive Oral Care
Children of economically disadvantaged families are about two times more likely to have morethan five cavities than children of more affluent families.1 They also have fewer beneficial
experiences,2 such as healthy habit experiences. To address these disparities, we developed aproprietary experiential program about dental and oral health and improving self-esteem, andare working with NPOs to provide this program mainly through “kodomo shokudo” (children’s
cafeterias ). Through games and crafts that enable children to learn about oral health in an
enjoyable manner, and other tools such as toothbrushing calendars that promote healthy
habits in the home, we are working to raise children’s awareness of the importance of oral
health. In 2023, we provided Dental and Oral Health Program experience kits to approximately
40,000 children through 941 organizations. We are also providing opportunities for employees
to participate in the project, putting our purpose into practice through direct involvement insocial issues. In 2023, a total of 44 employees participated in Okuchikarada Project activities.

Children taking part in the experiential program

1. Source: Department of Social Medicine, National Center for Child Health and Development, Adachi City and Adachi City Board of Education (Fiscal 2016)
2. Receiving praise from others, communicating with adults, acquiring life skills, etc.

Toothbrush decoration (craft)45

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Sustainability Initiatives

Top-Priority Sustainability Material Issues: Creating Healthy Living Habits

Lion Group Initiatives for 2030 (Cleanliness and Hygiene Habits)
TargetTotal number of persons provided withproducts, services and information aimed
at creating healthy living habits: 1 billion
Oral care habits: 500 million people
Cleanliness and hygiene habits: 500 million people

Cleanliness and hygiene habits: 500 million people• Provide products and services• Communicate information• Conduct educational andawareness activities(activities to promote thehabit of hand washing)

The Lion Group has been providing hand soaps and sanitizers that can be used in a variety ofsettings and conducting educational and awareness activities at preschools, kindergartens andelementary schools in Japan and elsewhere across Asia to promote the prevention of infectionin the home through hand cleanliness and hygiene.
Going forward, we will expand our educational and awareness activities in Southeast andSouth Asia to include food safety and provide hygiene-related products and services. We will
also work with other companies, local governments and other organizations to establish
cleanliness and hygiene behavior that protects loved ones from infection.

Educational and Awareness Activities: Hand Washing Habits
Promoting and Establishing Hand Washing Habits through Educational Institutions(Japan and Asia)
As part of our efforts to promote cleanliness and hygiene in Japan and other regions in Asia
where we conduct business, we host classes at preschools, kindergartens, elementary
schools, and other educational institutions to promote and establish hand washing habits.
Through physical activities, storytelling, and other activities, children can have fun learning
about the significance of hand washing habits and methods.
Hand washing classes at educational institutions

Japan

Malaysia

Contributing to Food Safety through Cleanliness and Hygiene Habits (Bangladesh)
In Bangladesh, a market we have recently entered, we are working through the Japan
International Cooperation Agency (JICA) to contribute to The Project for Strengthening theInspection, Regulatory and Coordinating Function of the Bangladesh Food Safety Authority.
Specifically, we are offering hygiene education related to hand washing and food safety. By
training elementary school teachers and having them teach what they have learned at theirrespective schools, we were able to provide hand washing education not only to children,
but also for their parents and local communities. Teachers from 539 elementary schools and24,233 students in Narayanganj District took part.

Hygiene and habit education at an elementary school in Bangladesh

46

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

47

Sustainability Initiatives

Top-Priority Sustainability Material Issues: Promoting Environmental Initiatives for a Sustainable Planet
In 2019, the Lion Group established the LION Eco Challenge 2050, a set of long-term environmental objectives, with the goal of promoting business activities that help to address global problems, such as
those identified in the Paris Agreement and the Sustainable Development Goals (SDGs). We have been working to find solutions for issues related to decarbonization, plastic and water resources. In 2022,
we updated our objectives in order to contribute to the achievement of carbon neutrality by 2050, an aim of countries around the world. To realize a decarbonized, resource-circulating society, we will
promote environmentally friendly habits (planet-friendly lifestyles) that make sustainable living easy for consumers.

Progress of Initiatives for 2030

Making Planet-Friendly Lifestyles a Reality

Zero-carbon throughout business activities (Scope 1 and 2)
Indicators

CO2 emissions throughout business activities

Progress

Down 39% compared with 2017

Initiatives going
forwardZero-carbon throughout business activities(Scope 1 and 2)

55% reduction in comparison with 2017 (absolute quantity)

Energy saving

Reduce energy usage through energy-saving activities.
Purchase electricity generated by renewable energy sources.

• Increasing investment inenvironmentally friendly equipment
through internal carbon pricing

Carbon neutral productlifecycles(Scope 3)

Renewable energy

Low environmental burden/and carbon neutrality of our own product life cycle (Scope 3)
Indicators
Progress
Initiatives going
forward

CO2 emissions throughout product lifecycles

30% reduction in comparison with 2017

Up 3% compared with 2017
Provide environmentally friendly products and promote environmentally friendly habits.
Promote decarbonization at the stage of procurement through supplier engagement.

• 100% renewable energy in all Group
plants and offices

Procurement• Collaborative smart logistics• Logistics EDI• Supplier engagement• Increasing lineup ofcertified products• Carbon recycling

Ethical products

Indicators

Petrochemical-derived plastic use rate

Progress

96%(Japan), Rate of containers and other packaging using sustainable materials: 3.9%

Initiatives going
forward

70% or less

Increase use of recycled plastic and biomass materials in products and containers.
Continuously promote reduced use and reuse of plastic in products and containers.

Indicators

Water usage throughout product lifecycles
net sales)

Progress

Down 13% compared with 2017

Initiatives going
forward30% reduction in comparison with 2017 (per unit ofLogistics(by 2024 in Japan; by 2030 overseas)

Create Environmentally• Environmentally friendly design
Friendly Habits with
• Creating water- andpower-saving habits
Consumers
Digital transformation• Enhancing lifecycle
assessment and Scope 3
activities• Usability

Resource recycling• Promoting 3Rs + renewables• Contributing to the creation of a recycling society• Creating refill habits• Creating waste-free habits

Using recirculated
plastic(Scope 3)

Reduce water usage by consumers through the provision of water-saving products.

Help achieve a carbon negative society by reducing its environmental burden (Scope 4)

Help achieve a carbon
negative society by reducing
its environmental burden.
(Scope 4)

Indicators

Contribute to a CO2 emission reduction effect in excess of Lion’s own emissions. (Japan)

Progress

Plan to formulate actions and KPIs and verify their effectivenessProposing environmentally friendly, fulfilling lifestyles• Sustainable fashion (Long-lasting clothing)• Smart homes (Spending comfortable, relaxing time at home)• Decarbonized transportation(Popularization of environmentally friendly vehicles)

Initiatives going
forwardReduce society’s overall CO2 emissions through collaboration with other industry actors andcompanies.
Reduce household CO2 emissions through provision of environmentally friendly products.

Co-creation with society• Changing consumer behavior/Cultivating
habits(Ecosystem comprising industry, government and private sectors)•  CO2 absorption by forests/Afforestation

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

48

Sustainability Initiatives

Reinforcing Initiatives to Address the Sustainability Material Issues
As part of its responsibility as a producer, the Lion Group is working to achieve a decarbonized society and to solve plastic and water resource issues in every stage of the product lifecycle, from theprocurement of raw materials to use by consumers, disposal and recycling. As laundry and other housework require electricity and water, CO2 emissions and water usage are at their highest at the stage
when consumers use products. Going forward, we will work to reduce the environmental burden of our products at this stage through the provision of environmentally friendly products and services and thecreation of environmentally friendly habits for consumers.

R&D Initiatives to Reduce Environmental Burden
・ Developing new products that promote environmentally friendly habits for consumers
・ Developing products that save water and power during use
・ Developing concentration technologies that enable reduction of product sizes (product contents)
・ Developing technologies for using raw materials that have been made through environmentally friendly
processes (product contents, packaging and containers)
・ Developing technologies for using biomass and recycled materials (product contents, packaging
and containers)
・ Developing technologies for reducing plastic use (product packaging and containers)
・ Developing refill products and replaceable components with excellent usability (product packaging ・ Developing products and product containers that are easy to recycle (utensils/product packaging
and containers)

and containers)

The Breakdown of Environmental Burden (CO2 Emissions and Water Usage) by Activity in the Lion Group’s Businesses and Initiatives to Reduce Environmental Burden (2023)

CO2
emissions:CO2emissions:

13%
Water usage: 5%

Procurement of Raw Materials

Water usage:

26%
21%

Water usage:• Transitioning to raw materials made throughenvironmentally friendly processes• Transitioning to biomass and recycled materials• Using recycled paper (certified paper)

Disposal/Recycling• Promoting a toothbrush recycling program• Promoting a recycling program for plastic container/
packaging resources• Developing technologies aimed at improving thequality of recycled materials• Examining how to reduce collection costs• Enhancing environmental awarenessthrough products (products meeting
in-house environmental standards
and featuring the “eco Lion” markwith the “Every Day. For the Earth”
slogan)• Increasing awareness of productsthat save water and disseminating
information on proper use

CO2emissions:

55%
Water usage: 74%

3%0%

Production/Offices• Promoting energy saving• Promoting zero emissions• Promoting green purchasing• Shifting to renewable energy• Conducting biodiversity• Recycling wastewater frommanufacturing processes
conservation activities in• Reducing usage of public water collaboration with
supply by using rainwatercommunities near our facilities

Environmentally friendly initiatives from raw
material procurement to disposal/recycling

Use by Consumers

CO2
emissions:

Logistics• Improving transport efficiency by
reducing product size and creatingload-efficient designs• Promoting modal shifts• Conducting joint logistics

CO2
emissions:
Water usage:

3%0%Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Sustainability Initiatives

Reinforcing Initiatives to Address the Sustainability Material Issues

Activities for Reducing Environmental Burden (2023)
Purchase of Electricity Generated by Renewable Energy Sources
We switched our electricity contracts with power companies to those using 100% renewableenergy sources. As a result, we have been using electricity generated by renewable energy
sources (partial use of J-Credits) since January 2023 at all our domestic plants and since April
2023 at our head office.
In addition, since May 2023 allelectricity used at our offices in Japan isrenewable energy-derived , which we haveachieved through renewable energy plans
and Green Electricity Certificates. At ouroverseas work sites, we are promoting thegradual shift to renewable energy-derived
electricity with the ultimate aim of ensuringthat 100% of the electricity we purchase isgenerated by renewable energy sources.

Lion Forest in Yamanashi—Fifth Forest Maintenance Agreement
We are engaged in forest maintenance activities in Yamanashi City, Yamanashi Prefecture. Our
aim is to protect water resources and raise environmental awareness among employees. To
further expand these activities, in April 2023 we signed our fifth forest maintenance agreementwith Yamanashi City, the Kyoutou Forest Cooperative and NGO OISCA to start activities in a
new, larger area. Activities at the Lion
Forest in Yamanashi began in 2006, andwith this agreement the maintenance area
has increased tenfold compared with theprevious agreement term. We willcontinue to focus both on forest
maintenance and on environmental
education, using this initiative to provide
experiences and opportunities forinteraction with a wide range of people,
including local residents.

Start of Toothbrush Recycling Program in Taito-ku
In March 2023, in conjunction with the relocation of the Company’s head office to Taito-ku, we
signed a comprehensive partnership agreement with the local government.
As one of our environmental initiatives, we started a toothbrush recycling program in April
2023. To promote resource recycling andcontribute to the local community, thisprogram combines creating employment
opportunities for people with disabilities,
attracting tourists, and resource recycling
education. The aim is to recycle the used
toothbrushes we collect through theprogram into useful recycled plastic
products for local residents.

Participation in COP28
In December 2023, Lion participated in the COP28 UN Climate Change Conference held in
Dubai, United Arab Emirates. Specifically, Kenjiro Kobayashi, Director and Senior Executive
Officer Kenjiro Kobayashi gave a presentation in “The Seminar for Net-Zero and Well-Being in
Life” hosted by the Ministry of theEnvironment in the Japan Pavilion. The
theme of his presentation was “thesignificant possibilities of habits in the daily
lives of consumers and how to realize
them.” He introduced the importance ofdaily habits, the nature and impacts of theenvironmentally friendly habits we havebeen advocating, and the key factors
behind the successful creation of habits.

49

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Sustainability Initiatives

Disclosure Based on the TCFD Recommendations
Climate change has become a pressing social issue in recent years, and we recognize that it presents serious risks to corporate management as well as new opportunities for corporate activities. The LionGroup declared its support for the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in May 2019, and in 2022 carried out full analyses for both the 1.5°C and 4°C scenarios.

Governance

4°C Scenario

Climate-related risks and opportunities are reported to the Sustainability Promotion
Council (which meets twice a year) by its E Subcommittee and also reported, as
needed, to the Executive Management Board, Executive Committee and Board of
Directors.
In addition, a working group has been established under the council to swiftly identify
business opportunities resulting from changes in external conditions brought about by
climate change.

• Recognizing the increased cost of fossil fuel-derived raw materials as a major risk, weare advancing efforts to replace such raw materials with plant-based materials andreinforcing other efforts aimed at decarbonization.
• To address rising physical risks, such as floods and water stress, we are advancing
efforts such as reinforcing business continuity planning and supply chain data
coordination.
• In terms of opportunities, markets for infection prevention and laundry products,
among others, are expected to grow, so we are working to develop related products
and reinforce related services. Furthermore, we will continue to explore growth
opportunities in oral health and infection control—areas of strength for Lion—to
address the increased risk of the spread of infectious disease.

Strategy
The Lion group worked to identify and evaluate short-, medium- and long-term climaterelated risks and opportunities for the period from the present to 2050 and to factor
them into our businesses, as well as in strategy and financial planning.
We conducted scenario analyses using scenarios in which the average global
temperature increases 1.5°C or 4°C from the pre-industrial average by 2100. These
analyses, focused on effects in 2030 and 2050, were carried out for the Consumer
Products Business (oral care, beauty care, fabric care, living care and pharmaceuticalproduct fields) and the Overseas Business (in China and Thailand). Below is a summaryof the results of these analyses.

1.5°C Scenario• The increased cost of plastic-, aluminum- and palm oil-derived raw materials andpackaging is a major risk, so we are advancing initiatives to reduce such risk, including
reducing use of petroleum-derived plastic, and procuring RSPO-certified palm oil andpalm kernel oil derivatives.
• In terms of opportunities, we expect substantial expansion in demand for environmentallyfriendly products, presenting the potential for business expansion by increasing
offerings of products that meet the Lion eco-standard. In addition to these efforts, weare exploring other ways of securing opportunities for further growth. These include
the development of technologies suited to the growth of sustainable fashion and otherlifestyle changes as well as expanding the supply of electro-conductive carbon, which
will be necessary for the development of decarbonized transportation, including the
spread of electric vehicles.

• Principal scenarios used for analysis of transition risks and opportunities: The
International Energy Agency (IEA)’s Net Zero Emissions (NZE) scenario and Stated
Policies Scenario (STEPS)• Principal scenarios used for analysis of physical risks and opportunities: The IPCC’s
Representative Concentration Pathways (RCP) 1.9 and 8.5 scenarios
The analyses consisted of identifying climate-related risks and opportunities in eachscenario, considering their qualitative impacts on businesses and then quantitatively
estimating these impacts in financial terms in order to rate them as large, medium or
small. See page 51 for a summary of the analysis.

We have been working to address each scenario, and will focus management
efforts to further enhance our ability to respond to change.
WEB

Please see our website for more details.
Disclosure based on TCFD recommendations
https://www.lion.co.jp/en/sustainability/env/tcfd

50

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Sustainability Initiatives

Disclosure Based on the TCFD Recommendations

The Lion Group’s Main Climate-related Risks and Opportunities
Risks and Opportunities

Transition

Introduction of a carbon tax (Scope 1,
2 and 3)

Description• Increased factory operating costs due to the full-scale
introduction of emissions trading and the applicationof carbon taxes by national governments• Increased raw material procurement costs due tocarbon taxes on emissions, including Scope 3
emissions

4°C

1.5°C

Small

Large 2

Fossil fuel-derived• Increased costs due to the full-scale introduction ofemissions trading and the application of carbon taxes

Large

MediumPalm oil-derived• Increased costs due to tightening of palm oilregulations and increased use of certified oil

Small

MediumPlant-derived(from corn, mint, etc.)• Increased prices due to decreases in crop yields

Small

Small

Plastic-derived• Increased costs due to regulations on plastic use

Small

MediumAluminum-derived• Increased costs due to a shift from iron to aluminum
as a result of regulations on vehicle weight, etc.

Small

MediumForest resource-derived• Increased costs due to forest fires, forest protection
or logging regulations

Small

Small

Expansion of markets for sustainableproducts• Expansion of demand for sustainable products,
including those that save water and power, due torising customer awareness of ethical consumption

Small

Large

• Increased operational and personnel costs due to
growing energy costs and burden on workers

Small

Small

• Increased sales of laundry-related products due tohigher temperatures, and of hygiene-related products
and services due to increases in infectious disease

MediumSmall

Changes in precipitation and weather
patterns• Increased costs of dealing with impacts on theoperations of Lion or its suppliers due to increased
flooding and water stress. Potential for decreased
credibility in the event that stable supply cannot be
maintained.

MediumSmall

Increased severity of extreme weather
events• Decreased revenue due to internal logistics delays
and supply chain interruptions resulting fromincreased severity of extreme weather events.
Potential for decreased credibility in the event thatstable supply cannot be maintained.

Small

Small

Increased
cost ofrawmaterials

Increased
cost ofcontainers
and otherpackagingmaterials

Increased average temperature

PhysicalRisk Management

Impact1

1. Risks are shown in red, opportunities are shown in blue
2. Impact if the LION Eco Challenge 2050 long-term environmental objectives are not met and CO2 emissions are notsignificantly reduced

Please see “Business Risks” on page 64 for climate-related risks that could have amajor impact on our businesses, and our respective countermeasures.

Indicators and Targets
The CO2 emissions (Scope 1, 2 and 3) of Lion and its consolidated subsidiaries are disclosed
on Lion’s website. For more information on the LION Eco Challenge 2050 long-term
environmental objectives, including our course of action for achieving a decarbonized, resourcecirculating society by 2050 and our 2030 objectives for CO2 emissions, petrochemical -derived
plastic usage and water usage, please see “Sustainability Material Issues, 2030 Objectives andIndicators” on pages 43-44.

Focus

Greenhouse Gas Reduction Targets Validated by the
SBT Initiative for Being in Line with the 1.5°C Target

In July 2020, the Lion Group obtained
SBT validation for being in line with the“well-below 2°C target,” and has
continued to promote the reduction ofgreenhouse gas emissions. In 2022, weraised our 2030 CO2 emissions reduction
objective in the LION Eco Challenge 2050
from 30% to 55% in comparison with2017. As a result, in March 2023 we
obtained updated SBT validation for beingin line with the 1.5°C target.

51

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Message from the Chairman of the Board of Directors

Masazumi Kikukawa
Representative Director,
Chairman of the Board of Directors

Ramping Up the Pace of Executive Management under a New Governance System
Reaping the Benefits of Our Transformation
It has been a year since Masayuki Takemori took over fromme as president of the Company in March 2023. In line withplans initially put together by the Nomination Advisory
Committee, in March 2024 we gave Mr. Takemori the additionalrole of chief executive officer. As a result, the president hascomplete control of executive management, allowing me tofocus on the supervision of management, as chairman of theBoard of Directors.
Over about three years, we have implemented various
measures for corporate transformation in quick succession. In
2022, we reorganized our corporate philosophy around our
purpose, adding our beliefs. In addition, in 2023 we launched
a new human resource management system aimed ataccelerating employees’ self-directed growth and opened a
new head office building in Kuramae, Taito-ku, to promote
work styles that encourage co-creation. Prior to that, in 2022
we began operation of new core systems to increase the levelof sophistication in management and enhance efficiency.
Moreover, in 2021, we completed construction of a new oral
care factory in Sakaide City, Kagawa Prefecture, and from2022 through 2023 expanded into two new countries,
Bangladesh and Vietnam, as part of our efforts to grow theOverseas Business.
All these initiatives are vital for fulfilling Vision2030 andensuring continued growth beyond 2030, and the necessaryreform measures are largely up and running. A key theme for
us going forward will be to make sure these reforms are
firmly rooted and that they lead to positive outcomes.

To do so, we must ramp up the pace of executive
management, responding to the dizzying changes in ourmanagement environment in an agile manner and quickly
adapting the means through which we implement our reforms.
Our new management system, in which the president hascomplete control over executive management, will enable us
to do exactly that.

New Governance System
In line with the launch of our new management system, we
have also renewed our governance system. The aim of thisnew system is also to speed up executive management.
We have designed it based on the issues we designed it
based on the issues we identified in the annual evaluation

52

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Message from the Chairmanof Board of Directors effectiveness. Page 58 As part of
the new governance system, we have discontinued the
Senior Executive Committee and newly established an
Executive Management Board. Whereas the Senior
Executive Committee was mainly in charge of directing
management, the Executive Management Board, chairedby the president and CEO, has assumed some of theBoard of Directors’ decision-making authority andconvenes roughly three times a month, more agile
decision-making. In addition to further enhancing
discussions on management strategies by the Board of
Directors, the new system facilitates strengthening of its
supervisory functions.
Moreover, in terms of risk management and risks(management risks) that could have a significant impact
on the Company’s results and financial position, which arestated in the Company’s annual securities report, forexample, we have created a system in which the
Executive Management Board discusses, identifies andassesses these risks, and works to mitigate them throughexpert and other committees, and through the heads ofeach department. The director in charge of risk
Key Enhancements of the Governance System (2024)
Transforming into a company that stays ahead of thecompetition by enhancing supervisory functions andspeeding up business execution

1

Establishment of the Executive Management Board formore agile decision-making on business execution

2

Further delegation of authority from the Board of Directors to
executive units, including the Executive Management Board

3

Further expansion of opportunities for external directors
to join discussions relating to business strategies andother mattersmanagement is responsible for reporting the progress ofrisk mitigation measures to the Board of Directors, whichenables the board to focus on supervision.
In addition, to enhance discussions on management
plans and strategies by the Board of Directors, the system
we have created allows further expansion of opportunities
for external directors to participate in business strategy
review and other meetings, when necessary. Thesechanges should further improve the effectiveness of theBoard of Directors.

Our Next Themes
Over the past five years, net sales of the Overseas Businesshave increased by around 40%, and in 2023 the overseas
sales ratio reached 33%. One target of Vision2030 is toincrease the overseas net sales ratio to 50% by 2030, andthe ratio will no doubt continue to increase after that. Thissignifies a shift away from our current Japan-centric businessstructure to one in which our sales in the three areas ofJapan, Northeast Asia, and Southeast and South Asia are allroughly the same. Consequently, many elements of the LionGroup’s governance and business execution systems, whichhave been designed for the business environment in Japan,
must be reformed to better suit an increasingly diverse
business landscape. At the same time, diversifying ourhuman resources is likewise essential for responding to suchchanges. Going forward, the Board of Directors will addresschanging business structures by deepening discussions on
the Company’s vision and providing guidance to the
executive side of the Company.
We look forward to your continued support as we strive
to grow and evolve our main business of creating habits. We
would be grateful to receive your candid feedback on thepath we should pursue.

The Board of Directors willaddress changing businessstructures by deepening
discussions on the Company’s
vision and providing guidance tothe executive side of the Company.

53

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Messages from External Directors

Kazunari Uchida

Takashi Shiraishi

External Director

External Director

Transforming from a good to an excellent company to successfullycomplete Vision2030

Redesigning habits for the better through management that flexibly
adapts to social and market changes

Lion has a warm corporate culture and many earnest and honest employees. The Company
was also one of the first in Japan to engage in initiatives for sustainability, a topic of growing
relevance. In this regard, Lion is viewed as a good company by society.
Looking objectively at Lion’s current business environment and competitive landscape, theCompany still has a long way to go if it is to achieve its goals for 2030. Substantial progress isessential. Achieving such progress will require a focus on growth areas—services rather than
products, and the Overseas Business rather than businesses in Japan. In particular, theOverseas Business is growing steadily, but considering market potential, there is still room forfurther expansion.
To navigate the rapid changes going forward, and to successfully compete on the global stage,
Lion must transform its workforce—making tough people out of good people. For such atransformation, I think it is crucial for current employees to proactively take on new challenges,
and for Lion to hire even more external personnel to provide additional stimulus to the Company.
Ultimately, I would like to see the Lion Group brimming with people eager to try new things.
It has now been a year since Masayuki Takemori became president, and he has already
implemented various innovative measures. I look forward to him further demonstrating his
individuality and accelerating the pace of the Company’s transformation. As an external director,
I will also play a part in helping transform Lion into an excellent company.

As part of its long-term strategic framework Vision2030, Lion aims to become an advanced
daily healthcare company. The Company is accelerating growth in four fields of value creation as
it targets approximately ¥600 billion in net sales, and an overseas sales ratio of 50% by 2030. I
believe these targets are very achievable, given the growth in net sales of the Overseas
Business from ¥129.3 billion in 2022 to ¥148.0 billion in 2023, together with an increase in theoverseas sales ratio from 30.3% to 33.3%, as well as the expected expansion of markets inSoutheast Asia, South Asia and China ahead of 2030.
Economic growth rate forecasts for the countries and regions of Asia differ. While 5%–7%
growth is forecast for countries such as Indonesia, Vietnam, the Philippines and Bangladesh, forothers, the growth forecast is limited to 2%–3%. Generally speaking, however, the middle-classwill expand mainly in cities in places such as Southeast Asia, South Asia and China, and interestin safe, secure and environmentally friendly lifestyles also is expected to grow. As a result, I
would venture that demand for Lion’s high-quality products will also grow. Considering the trustthat Lion has built in its brands, proposing and implementing better habits will no doubt lead towider acceptance of Lion products.
However, the Company must pay attention to country risk. China is increasingly tilting toward
self-reliance and self-sufficiency. In Southeast Asia, changes in government leaders or a
slowdown in economic growth in some countries could lead to political instability. As a
specialist, I will provide thorough oversight to ensure that Lion' management can effectively
hedge against country risk and flexibly adapt to social and market changes brought about by
the rise of the middle class and generational changes in leadership.

54

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Messages from External Directors

Takako Sugaya

Reiko Yasue

External Director

External Director

Using an external perspective to focus on the sensitivity required for Lion tocontinue to be a socially relevant company even amid environmental change

Utilizing the reforms and challenges from 1st STAGE as stepping stones tofurther growthLion is currently implementing various strategies under Vision2030 to achieve its management
vision of “Becoming an advanced daily healthcare company.” The year 2024 marks theculmination of medium-term management plan 1st STAGE, which is centered on the theme“gear change toward future growth.” Looking back on the past two years of 1st STAGE, theCompany has clearly achieved some impressive successes. The consolidated net sales growthrate has exceeded that of the preceding three-year period. In addition, the Overseas Business,
which is expected to be a future growth driver, has proactively taken on new challenges such as
expanding into two new countries and increased Lion’s presence in existing markets. On theother hand, the Company needs to work harder to quickly respond to rapid changes in its
operating environment, such as increasing geopolitical risks and soaring resource prices
worldwide, as well as changes in consumer trends.
For a company to be sustainable regardless of the times, it must be responsive andadaptable to societal needs. Given the current climate of change both at home and abroad, it isessential to enhance sensitivity to change, make optimal choices as situations evolve, andcultivate adaptability. It is also important to be attuned to societal demands, including thoserelating to human rights and the environment.
My role is to use my perspective as an external director with a focus on the sensitivity
required to ensure Lion continues to be a socially relevant company even amid rapid changes in
its operating environment. I will also provide support for improving compliance, which isessential to maintaining a sustainable presence in society. I will do everything in my power toensure Lion can contribute to consumers’ lifestyles as an advanced daily healthcare company,
and support its efforts to respond to societal demands such as those relating to human rights
and the environment to ensure it continues to be a socially relevant company.

The year 2024 marks the conclusion of 1st STAGE, the first medium-term management plan of
Vision2030. During 1st STAGE, Lion has sought to accelerate growth in its existing businesses
and create new opportunities for growth. To do so, the Company has been transforming its
business foundations for growth (infrastructure reforms) and generating dynamism to realize
innovative change—in other words, implementing strategies to activate its human resourcesand organizations (soft reforms). As part of these soft reforms, to promote the Lion Professional
Fulfillment Reforms, as well as diversity and open innovation, over the past two years theCompany has implemented major system renewals, including for human resources. However, it
is only when these new systems take root that the Company will achieve business growth. I
also believe it will become even more important to promote diversity, equity and inclusion, using
the strength of youth in management.
In terms of infrastructure strategies—reorganizing the foundations to realize innovativechange—implementation of Enterprise Resource Planning (ERP) systems and otherinfrastructure is proceeding Company-wide, and I look forward to seeing it in use. Goingforward, it will be essential to improve systems for leveraging digital transformation in R&D.
Over the past two years, the Overseas Business has taken on many challenges aimed atfurther growth, such as establishing new operations in Bangladesh and Vietnam, andstrengthening local R&D activities in China. Lion’s strategy of embracing local cultures andleveraging deeply rooted local customs is a strength of the Company, and reflects its unique
identity. I will do everything I can to support Lion’s growth through further expansion of theOverseas Business.

55

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

56

Integrated Report 2024 Overview

Corporate Governance
Basic Approach

Initiatives to Enhance Management Auditing and Supervision

The Lion Group’s top priorities for corporate governance are to increase managementtransparency, strengthen supervisory functions, accelerate decision-making and ensurecompliance. By strengthening and enhancing its corporate governance system, Lion aims toincrease its corporate value.

Formulated the Lion Group Charter for Corporate Behavior and Behavioral Guidelines
Established the Management Evaluation Committee (now the Advisory Committee)
Formulated the Basic Internal Control System Policy
Established the Compensation Advisory Committee and the External Director System (two directors)
Introduced a performance-linked compensation system

Basic Approach to Corporate Governancehttps://www.lion.co.jp/en/company/governance/approach.php

WEB

Appointed independent officers and notified the Tokyo Stock Exchange of the appointments
Established the Basic Corporate Governance Policy
Established the Nomination Advisory Committee
Began evaluations of the effectiveness of the Board of Directors

Corporate Governance System

Increased the number of external directors fromthree to four
Increased the number of external Audit &Supervisory Board members from two to three

Organizational Structure Overview• Has adopted the company with an Audit & Supervisory Board system

To ensure that the Board of Directors can fulfill its management supervisory function, and to enable independent Audit &Supervisory Board members to appropriately fulfill their auditing function

2003

2004

2006

2007

2010

2016

2017

2021

2024

• Has adopted an executive officer system

To reinforce the Board of Directors’ management supervisory function and accelerate decision-making

Increased the number of external directors
from two to three
Introduced performance-linked stock-based
compensation for directors• Has established a voluntary advisory body

To enhance management transparency and further improve corporate governance• Has established an Advisory Committee consisting of external experts

To reflect the opinions and advice of third parties with regard to legal compliance and management policies

Implemented the
Executive Officer
SystemAnnual Meeting of Shareholders

Compensation Advisory
Committee

Board of Directors

Consultation

Supervision of management
Response
Consultation
Response

Decisions on execution of importantmanagement matters
Supervision of directors’ executive
performance● Supervision of executive officers●●

AdviceProposals/
Reporting

Reporting

Audit &
Supervisory
Board
Members

Collaboration

Response
AdviceCollabortion Collabortion

Advisory Committee
Auditing

Execution of operations

Delegation

Executive Management Board
Executive Committee
Execution of operations●●

Decision-making and control of overall business execution
Formulation of important corporate strategies including
medium- to long-term management plans

Departments(Business divisions, operating divisions and others)
Execution of operations

Strengthening of legal compliance and ethics

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

Reporting

Auditing

Transforming into a company that stays ahead of the competition by reinforcing
supervision functions and speeding up business execution

Accounting
Auditors

Legality audits
Operational audits

Built a system for internal controlof financial reporting

Key Enhancements of the Governance System (2024)

Appointment/Dismissal

Auditing

Nomination Advisory
Committee

Appointment/Dismissal

Auditing

Decision-Making/Supervision

Appointment/Dismissal

Established the
Executive ManagementBoard(1) Establishment of the Executive Management Board for more agile decisionmaking on business execution
We have established the Executive Management Board to enable more agile decision-making on businessexecution and the course of action for important matters. The Executive Management Board is chaired by thepresident and executive officer and comprises executive officers that have been selected by the Board of
Directors. In principle, the board meets three times a month, and by speeding up the execution of businessthe aim is to transform into a company that stays ahead of the competition.

(2) Further delegation of authority from the Board of Directors to executive units,
including the Executive Management Board
Auditing
OfficeIn addition to enhancing discussions on important matters such as management plans and strategies, which
are the basis for exercising the Board of Directors’ supervisory functions, to promote the separation ofsupervision and execution functions we have further transferred authority from the Board of Directors to the
Executive Management Board and other business execution departments. In doing so, we aim to bothincrease the speed of our business execution and at the same time further improve the effectiveness of theBoard of Directors.

(3) Further expansion of opportunities for external directors to join discussions
relating to business strategies and other matters
To further enhance Board of Director discussions on management plans and strategies, we have created asystem that allows external directors to participate in review meetings on business strategies as necessary.

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Corporate Governance

Skills, Expertise and Meeting Attendance of Directors and Audit & Supervisory Board Members
To increase corporate value, the Lion Group has selected directors and Audit & Supervisory Board members with diverse knowledge, experience and capabilities to provide oversight of decisionmaking and management from the viewpoints of various stakeholders.
Principal Skills and Areas of Expertise

Audit & Supervisory Board Members

Directors

Name

Current Position

Masazumi Kikukawa

Reappointment

Representative Director

Masayuki Takemori

Reappointment

Representative Director,
President and Executive Officer

Hitoshi Suzuki

Reappointment

Director, Vice President andExecutive Officer

Kenjiro Kobayashi

Reappointment

Director,
Senior Executive Officer

Yugo Kume

Reappointment

Director,
Senior Executive Officer

Fumitomo Noritake

Reappointment

Director,
Senior Executive Officer

Kengo Fukuda

Reappointment

Director,
Senior Executive Officer

Kazunari Uchida

Reappointment

Takashi Shiraishi

Reappointment

Takako Sugaya

Reappointment

External
Independent
External
Independent
External
Independent
External

Continuing in office

Audit & Supervisory Board
MemberYoshitada Ishii

Continuing in office

Audit & Supervisory Board
MemberAtsuko Suzuki

Continuing
in officeExternal

External Audit & Supervisory
Board Member

Masatoshi Matsuzaki

Continuing
in officeExternal

Akemi Sunaga

Continuing
in officeExternal4

36.4%

Independent
Independent

Legal/Risk Human resources/
Sustainability
management HR development

Sales/
Marketing

IT/DX

External Director

External Audit & Supervisory
Board Member
External Audit & Supervisory
Board Member

Ratio of external Audit &Supervisory Board members

2

Ratio of external officers
in Nomination Advisory
Committee

Ratio of external officers
in Compensation
Advisory Committee

1

60.0%

Ratio of female directors
and Audit & Supervisory
Board members

7

87.5%
3

R&D/
Production

2023 Boardof Directors
AttendanceNomination
Advisory
Committee

Compensation
Advisory
Committee

18/18 meetings(100%)
13/13 meetings(100%)
18/18 meetings(100%)
18/18 meetings(100%)
18/18 meetings(100%)
18/18 meetings(100%)
18/18 meetings(100%)
17/18 meetings(94.4%)
18/18 meetings(100%)
18/18 meetings(100%)
18/18 meetings(100%)
13/13 meetings(100%)
13/13 meetings(100%)
16/18 meetings(88.9%)
12/13 meetings(92.3%)
13/13 meetings(100%)

External Director

Naoki Miidera

Independent

Finance/
Accounting

External Director

Reappointment

Independent

Globalbusiness

External Director

Reiko Yasue

Ratio of external directors

7

Corporate
management4

100.0%
725.0%
12Notes:	1. For representative director Masayuki Takemori, Audit &Supervisory Board members Naoki Miidera and Yoshitada Ishii,and external Audit & Supervisory Board members Masatoshi
Matsuzaki and Akemi Sunaga, attendance shown is thenumber of times they have attended since their appointment
at the 162nd Annual Meeting of Shareholders.
2. The above table does not show all the skills and experiencethat directors and Audit & Supervisory Board members
possess.

57

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Corporate Governance

Board of Directors

Board of Directors

Issues Identified and Initiatives to Address Them

The Board of Directors is composed of 11 directors. The Board of Directors regularly meetsonce a month and holds extraordinary meetings, as necessary. In addition to matters stipulated
by laws and regulations or the Articles of Incorporation, the Board of Directors determines
important matters related to the business execution of the Company and supervises thebusiness execution of directors and executive officers. Resolutions of the Board of Directors
may be made at the regular Board of Directors meetings, as well as in writing in accordancewith laws and regulations. For important corporate strategies such as the basic policies of
medium- to long-term management plans, the current system enables the Board of Directors tomake appropriate decisions upon deliberation by the Executive Management Board. Additionally,
the Executive Committee discusses and examines, from various angles, measures related to job
execution that directly impact businesses.

In line with suggestions on how to further enhance discussions at Board of Directors meetings, wewill continue with initiatives to enhance the effectiveness of the Board of Directors. Based on theissues identified in 2022, initiatives in 2023 were as follows.

Evaluation of Board of Directors EffectivenessTo ensure the effectiveness of the Board of Directors, every year the directors evaluate theboard’s operating methods and the content and status of the proposals it considers, among
other matters. This evaluation includes examinations of each director. A summary of the resultsof the evaluation is disclosed in the Corporate Governance Report.
Evaluation Process
Completion of selfassessment surveys
by all directors andAudit & Supervisory
Board members

Report and discussion
at Board of Directors
meetings of compiled
and analyzed
survey results

Identification of issues
based on evaluationof results

Promotion of
initiatives to address
issues

Items Covered by the Survey• Composition of the Board of Directors• Status of Proposals Being Deliberated by the Board of Directors• Status of Operations of the Board of Directors • Other

Issues

Initiatives• We must move forward with the transfer
of authority to directors and executive
officers to enhance the Board of Directors’
discussions on important matters such as
management plans and strategies, which
are essential for exercising supervisory
functions.

• We conducted a review of internal rules concerning the operationof officers meetings and decision-making to increase items
to be delegated to executive officers, strategically narrow
down proposals presented to the Board of Directors, andclearly separate directors’ supervisory functions and executive
officers’ business execution functions.

•W e must further enhance discussions at
Board of Directors meetings• In addition to examining how to narrow down the number of
proposals presented to the Board of Directors through thetransfer of authority to directors and executive officers, we haveenhanced the provision of information to external directors
and external Audit & Supervisory Board members by having
internal Audit & Supervisory Board members attend preliminary
briefings. Furthermore, we expedited the distribution of
meeting materials to allow more time for prior consideration.

Although the evaluation of Board of Directors effectiveness in 2023 included positive feedback
about the effectiveness of the early distribution of meeting materials, there were also opinions
and suggestions on measures to further enhance the board's effectiveness. Accordingly, in 2024
we will focus on the following initiatives.
Opinions/Suggestions

Initiatives• We must set aside sufficient time toformulate Vision2030 2nd STAGE, our
medium-term management plan beginningin 2025, as well as to discuss our response
to key contemporary issues such assustainability and human capital.

• To further enhance the Board of Directors’ discussions on
management plans, which are essential for the exercise of theboard’s supervisory functions, as well as on key recent matterssuch as strategies for sustainability and human capital, we
will review the operation of officers’ meetings and criteria for
decision-making authority.
• To further share the status of operations with external officers,
we are creating new opportunities for them to take partin meetings of business execution departments, thereby
enhancing their understanding.
• In addition to holding informal and extraordinary meetings ofthe Board of Directors to facilitate the exchange of opinions
on important management issues, we will work to enhance
efficiency in ways such as simplifying regularly reported items
and narrowing down proposals.
• Moreover, to energize discussions at Board of Directors’
meetings, we have assigned a general manager to help
enhance both the quality and quantity of information provided
to external officers.

2023 Evaluation Results
2023 Evaluation Results Summary• The number of persons on Lion’s Board of Directors, including the number and proportion of external
directors, is sufficient for deliberations. Board members have the knowledge, experience, capabilities anddiversity necessary to enhance corporate value.
• The meeting frequency as well as the number of agenda items considered and amount of time allowed fordeliberation by the Board of Directors are appropriate. The deliberations comprise open, constructive debatethat does not hinder risk taking.

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

•T he Board of Directors must secure time
for discussions on important matters bytaking a flexible approach to changing
meeting times and holding extraordinary
meetings as necessary

58

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Corporate Governance

Audit & Supervisory Board

Audit & Supervisory Board

Succession Planning

The Audit & Supervisory Board comprises five members and holds regular meetings once every
two months and extraordinary meetings, as necessary. Three of the five members are external
Audit & Supervisory Board members (independent officers) and two are internal Audit &Supervisory Board members. One external and one internal Audit & Supervisory Board member
are specialists in finance and accounting. Two staff members provide full-time support for Audit& Supervisory Board members and the Audit & Supervisory Board. In accordance with the Audit& Supervisory Board’s standards, audit policy, audit plans and other matters stipulated by the
Audit & Supervisory Board, each Audit & Supervisory Board member attends Board of Directors
meetings and other important meetings, shares information with directors and executive
officers, and audits the status of the directors’ execution of their duties (including the status of
the execution of duties pertaining to the development and operation of internal control offinancial reporting), and conducts onsite audits of the head office and major offices andinspections of subsidiaries. In addition, Audit & Supervisory Board members confirm theaccounting auditor’s audit plans, implementation progress, and reports of results. They also
audit the reasonableness of Board of Director resolutions, as well as the lawfulness,
appropriateness, and efficiency of directors’ execution of their duties. Furthermore, Audit &Supervisory Board members conduct comprehensive themed audits of important management
issues. Themes in 2023 were the Corporate Governance Code, risk management, global
compliance, IT governance, and sustainability.

Lion is looking Group-wide, including outside Japan, to secure and develop senior management
who can drive the Group toward the achievement of its management vision. The Nomination
Advisory Committee discusses potential management successor identification and plans fortheir development, based on Lion’s Basic Corporate Governance Policy. The Board of Directors
receives reports from the Nomination Advisory Committee on the above matters and provides
ongoing supervision of all related initiatives.

Main Auditing Activities in 2023
Details

Frequency (Times)

Share information with directors and audit the status of the execution of
their duties

7 (2 times withrepresentative directors)

Share information with executive officers, department heads at Lion’shead office, major offices and plants, and audit the status of theexecution of their duties

27

Share information with and conduct onsite audits of presidents, directors, Audit& Supervisory Board members and other members of affiliates

4

Total

38

Onsite audit of Lion
Corporation (Korea) for the
first time in four years in
December 2023

Succession Planning Process
Formulation ofrequirements forpresident

Selection ofcandidates

Development

Assessment

Narrowing downof candidates

Board of Directors
Nomination Advisory Committee

Message from the Chairperson of the Nomination Advisory Committee

High expectations for the new president’s energy, leadership andability to overcome challenges
Taking the timeline into consideration, over the course of a year
Nomination Advisory Committee members conducted thorough andfrank discussions regarding the reappointment of representative
directors Masazumi Kikukawa and Masayuki Takemori, as well asother directors. As a result of these discussions, the Committee
determined that Messrs. Kikukawa and Takemori and other directors
possess the skills and qualities suitable for their roles, based on theirbusiness achievements, decisiveness, leadership, judgement andexpertise on corporate governance. Lion is taking a long-term
perspective in developing the next two generations of management.
The Nomination Advisory Committee occasionally sets up opportunities
to speak with individuals who are expected to take over management
roles in the future. Committee members know the qualities of these
individuals well, and expect their energy, leadership and ability toovercome challenges to contribute to the steady advancement of
Lion’s long-term strategic framework Vision2030 and achieve themanagement vision of “Becoming an advanced daily healthcarecompany.”

Takashi Shiraishi
External Director,
Chairperson of Nomination
Advisory Committee

59

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Corporate GovernanceCorporate Officer Compensation

Overview and Details of Basic Policy Regarding Compensation for
Directors and Audit & Supervisory Board Members

Performance-linked Compensation System

Overview of Basic Policy
Lion has designed a corporate officer compensation system to provide sound and appropriate
incentives necessary for retaining outstanding management talent that will achieve theCompany’s management policies and continuously increase its corporate value over the
medium to long term. Director and Audit & Supervisory Board member compensation isdecided by the Board of Directors and the Audit & Supervisory Board, respectively, based on
consultations with the Compensation Advisory Committee. Compensation is set within the limits
decided by resolution of the General Meeting of Shareholders.

Indicators

Core operating income
An earnings indicator used to measure regular business performance, calculated by subtracting selling,
general and administrative expenses from gross profit (one of the most emphasized indicators under the
medium-term management plan)
Profit for the period attributable to owners of the parent
An earnings indicator that expresses final business results and is directly linked to increases anddecreases in shareholder value

Total payment
amountTotal number of points (number of shares) assigned
Total payment amount: Sum of (1) and (2) below
Total number of points for individual directors as(1) 5
 0% of 0.5% of core operating income for the
calculated in “Individual payment amount,” below
relevant year(2) 50% of 0.75% of profit for the period attributableto owners of the parent
Note: Rounded down to the nearest ¥10,000. If
the result of either calculation is negative, itsvalue is set at 0.

Policy Details
Compensation for directors (excluding external directors) consists of fixed monthly
compensation and performance-linked compensation (bonuses and stock-based
compensation). It is made up of approximately 50% fixed compensation and 50% performancelinked compensation (30% of which is bonus and 20% stock-based compensation) according
to the director’s rank. The proportion of performance-linked compensation increases according
to rank and is revised as needed. Fixed monthly compensation is raised or lowered once per
year following an appraisal of the results of each director’s management supervision andexecution of duties, and the degree to which the director has contributed to addressing the
Sustainability Material Issues. Performance-linked compensation is calculated based on the
degree to which performance targets have been met in each year and is paid individually at adesignated time after the end of the relevant year.
Approximate Composition of Compensation of Executive Corporate Officers(Excluding External Directors and Audit & Supervisory Board Members)

Bonus 30%

(1) C alculation of payment per point
IndividualTotal payment amount ÷ (Points assigned
payment amount(1) Calculation of number of points(Fixed base amount + Performance-linked baseamount × Performance-linked coefficient) ÷ Pershare acquisition cost
• Fixed base amount and performance-linked baseamount: ¥4 million each (multiplied by 1.0–3.625,
depending on rank)• Performance-linked coefficient: 0–2.0, dependingon achievement rate for each indicator• Per-share acquisition cost: ¥2,078

Time of payment End of March of each year

In principle, shares are issued to directors uponretirement in a number equivalent to the total
number of points they have been assigned

Upper limit¥250 million per year

¥200 million (per year)
Total number of shares: 120,000 (per year)

Malus andclawback clause

No

Yes*

according to rank × Number of officers)(2) Individual payment amountPayment per point × Points assigned according
to rank(3) Points assigned according to rank
From 3.000 points for chairman and president
and executive officer to 0.900 points for
executive officers

Fixed Monthly Compensation
Determining Policy

Stock-based
compensation 20%
Fixed
portion

Performance-linked
Stock-Based Compensation

Performance-linked Bonus* In the event of a serious violation of internal rules or professional duties, forfeiture of points already granted or return of theamount equivalent to the shares already received

Fixed monthly
compensation 50%
Performance-linked
compensation 50%

Type

Performancelinked portion

Overview• Flat-rate system• Compensation levels are set taking into
consideration similar levels at other companies,
and once per year fixed monthly compensation
is raised or lowered following an appraisal of
the results of each director’s management
supervision and execution of duties, and thedegree to which the director has contributed toaddressing the Sustainability Material Issues.

Upper Limit¥300 million (per year)

60Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Corporate GovernanceCorporate Officer Compensation

Achievement of Performance-linked Compensation Indicators 2023

Cross-shareholdings Policy

Achievement of targets for core operating income and profit for the period attributable toowners of the parent are as below.

Lion may maintain cross-shareholdings with other companies only when it has judged that they
are strategically important for such purposes as maintaining and strengthening trade relationships.
The Board of Directors examines the economic rationality of cross-shareholdings on an annual
basis, checking the investment profitability against cost and other factors for each stockholding.
Based on the results of these examinations and such factors as the importance of the relevant
trade relationships, shareholdings determined to be unnecessary are then sold, reducing Lion’s
cross-shareholdings.
The voting rights associated with strategically held shares may be exercised based oncomprehensive consideration that includes the improvement of Lion’s corporate value over the
medium to long term and the common interest of Lion’s fellow shareholders.

TargetAchievement

Achievement rate

Core operating income

Indicator¥25,000 million¥20,133 million

81%

Profit for the period attributableto owners of the parent¥17,500 million¥14,624 million

84%

Compensation System for External Directors and Audit & Supervisory
Board Members
Compensation for external directors and Audit & Supervisory Board members consists solely of
fixed monthly compensation. Compensation levels are set taking into consideration similar levels
at other companies and are based on individual roles and responsibilities.

Cross-shareholdings as of December 31, 2023
Other companies'
stocks held (No. of companies)

Total Compensation for Directors and Audit & Supervisory Board
Members 2023
Number of
Corporate
Officers

Fixed
Compensation(Millions of yen)

Directors(External Directors)

12 (4)

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

Performance-linked
Compensation

Total(Millions of yen)

Bonuses(Millions of yen)

Stock-based
Compensation(Millions of yen)

285 (48)105 (–)

56 (–)

448 (48)9 (5)

96 (36)

– (–)

– (–)

96 (36)21 (9)

381 (84)

105 (–)

56 (–)

544 (84)

1. There are no individuals serving concurrently as employees and corporate officers.
2. An upper limit on directors’ fixed compensation of ¥300 million per year was set by resolution of the 156th Annual Meeting of Shareholders
held on March 30, 2017. There were nine directors at the closing of this meeting.
3. An upper limit on Audit & Supervisory Board members’ fixed compensation of ¥110 million per year was set by resolution of the 156th Annual
Meeting of Shareholders held on March 30, 2017. There were four Audit & Supervisory Board members at the closing of this meeting.
4. Within performance-linked compensation, bonus amounts are calculated and determined based on the core operating income and the profit
attributable to the owners of the parent for each year, in accordance with the methods described above. An upper limit for bonuses of ¥250
million per year was set by resolution of the 156th Annual Meeting of Shareholders held on March 30, 2017. There were six directors (excluding
external directors) at the closing of this meeting.
5. Within performance-linked compensation, stock-based compensation is the amount obtained by using the share acquisition price to convert
the number of points (shares) granted to eligible individuals under the system, depending on the degree of achievement of the Group’sbusiness targets for the year. An upper limit of ¥200 million on the contribution amount of stock-based compensation per year and an upper
limit of 120,000 shares on the total number of shares granted per year were set by resolution of the 160th Annual Meeting of Shareholders
held on March 30, 2021. There were seven directors (excluding external directors) at the closing of this meeting.
6. The amounts shown are rounded down to the nearest million yen.

Year-on-year change

Value on thestatement offinancial position(Millions of yen)

Unlisted

22

0

316

Other

20

(2)

15,58661

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

62

Integrated Report 2024 Overview

Compliance* Anonymous questionnaire survey covering such topics as compliance with the Lion Group Charter for Corporate Behavior,
whether there was feedback from the results of the previous Compliance Awareness Survey, and awareness of the All LionHeart Hotline.

WEB

WEB

WEB

Lion Group Charter for Corporate Behavior/Behavioral Guidelines
https://www.lion.co.jp/en/company/governance/policies/indicator.php
Internal Control System
https://www.lion.co.jp/en/company/governance/system.php
Compliancehttps://www.lion.co.jp/en/company/governance/compliance/

Internal and External Whistle-Blowing System: All Lion (AL) Heart Hotline
The AL Heart Hotline System
The Lion Group has set up aninternal and external
Consulter/Reporter
whistleblowing system (the AL
Employees of the Lion Group,
temporary staff or external business partners
Heart Hotline) as a set ofConsultations
Consultations
Feedback
Feedback
contacts for consultations forand reports
and reports
Reportdetailsofuse by employees or otherconsultations/
reports
stakeholders, including anyone
Internal contact
External contact
General manager
working with the Group, family
responsible for
Lawyercorporate ethics
Reportmembers, former Groupinvestigation
results andemployees or business
ReportingInstruction countermeasurespartners, in the event they learnof a compliance violation (orCorporate Ethics
Board of Directors
Committee Chairpotential violation) in theReport asneededworkplace that is impossible toreport or cannot be handled
Corporate Ethics
appropriately through normal
Committee
workplace channels, or for
Set up as needed
which the appropriate reporting
Ethics Evaluation Committee
channel cannot be identified.
External experts
Users can select from thesystem’s two reporting hotlines (one internal and the other external), depending on the nature of
the issue they are reporting. Users are encouraged to fill out the relevant form to report theirfindings in writing or to report via email to ensure accurate understanding of the nature of thereport or consultation. Once the details of said report or consultation and the response desiredby the reporter are confirmed, the general manager responsible for corporate ethics promptly
investigates and confirms the relevant facts.
In 2023, 37 consultations and reports were received. Although there was a rise in cases
mainly related to relationships in the workplace, none of the cases has been deemed to involve
serious misconduct, and each is being properly addressed.
Seeking Solutions/Resolving Problems

The Lion Group’s strong reputation for trustworthiness has been built through decades of hard
work by its employees. The trust the Group enjoys has been a key driver of its growth anddevelopment.
Ethics guide individuals along the correct path. We regard ethics to mean, broadly, doing
what is right. In concrete terms, we see this as rooted in being honest, observing social mores,
not antagonizing others, and thinking of others as we think of ourselves. Based on thisunderstanding, we formulated the Lion Group Charter for Corporate Behavior as a code of
conduct and updated it to more clearly define our stance with regard to providing safe, secure
products and services, addressing environmental issues and other topics through a set of
Behavioral Guidelines. In addition to strict compliance with the Lion Group Charter for
Corporate Behavior, the Lion Group is committed to being useful and valuable to society.
To enhance awareness of compliance among corporate officers and employees, the Group
promotes measures led by the Corporate Ethics Committee, which is chaired by the director
responsible for corporate ethics.
Every year in March, the Group conducts a Compliance Awareness Survey* for all domestic
Group employees (including part-time employees). In 2023, approximately 91.9% of all
employees responded.
The Group also holds annual compliance training sessions using e-learning platforms. As acompulsory curriculum, compliance content is available on the Lion Career Village (LCV)
on-demand media platform. Employees are encouraged to complete the curriculum in a set
period of time, and after that they can review the materials at any time.
In 2023, we held regular training sessions on 11 topics including unconscious bias, and atdifferent times we held special sessions on reinforcing compliance awareness and on mental
health in the workplace (self-care and line care) as part of our awareness-raising initiatives.

AL Heart Hotline Consultations and Reports
Subject of consultations
and reports received
Harassment
Personnel and labor
management issues
Other

2021

2022

2023

12

13

17

5

9

7

2

3

13

Employee Awareness of the AL
Heart Hotline
2021

2022

2023

99.0%

99.4%

99.5%

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Risk Management
Lion’s business activities entail a wide range of risks. To avoid and minimize losses caused by the materialization of risks, we have appointed a director responsible for risk management (thedirector responsible for the Corporate Planning Department) who comprehensively controls and supervises risk for the whole Lion Group.

Basic Policy for Risk Management(1) Management and employees strive to prevent the materialization of risks that could harmGroup business operations as part of their normal duties based on Lion’s Basic Internal
Control System Policy.
(2) In the event that a risk materializes, we strive to minimize losses and harm to employees,
shareholders, customers, local communities and other stakeholders.
(3) We report materialized risks to senior management immediately and promptly take steps tounderstand the situation, elucidate the events and factors that led to it, develop measures for
improvement and strive to prevent recurrences.

Rules and Other Structures Related to the Management of Risk
Response under Normal Conditions(1) The director responsible for the Corporate Planning Department has overall responsibility forthe risk management of the Group. The Corporate Planning Department comprehensively
manages the Group’s risk.
(2) The Executive Management Board identifies and evaluates management risks that have thepotential to significantly impact business activities, and the whole Group works to mitigate orotherwise address these risks. For management risks that arise during the fiscal year, thedirector responsible for the relevant risk area investigates countermeasures, which aredeliberated by the Executive Management Board for risk management.
(3) For the management of risk related to the environment, quality assurance, accidents anddisasters, the Sustainability Promotion Council; CS/PL Committee;* and Safety, Hygiene andDisaster Prevention Meeting respectively consider preventive countermeasures, which aredeliberated by the Executive Management Board and the Executive Committee as necessary,for risk management.
(4) Each department identifies and works to mitigate or otherwise address its own risks. In
addition, all Group plants have received ISO 9001 and ISO 14001 certification and are
actively working on quality management and environmental conservation.
(5) The director responsible for risk management reports on the progress of risk management to
the Executive Committee and the Board of Directors. The Auditing Office audits the status ofrisk management for each department in the Group and reports its findings to the Executive
Committee and the Board of Directors.
* CS/PL Committee: A cross-departmental committee focused on customer satisfaction (CS) and product liability (PL) to
promote quality assurance activities

Response in the Event of Emergency
In the case of a physical emergency, such as a natural disaster or accident, in accordance with
the Emergency Response System (a system of manuals outlining countermeasures against
earthquakes or influenza and other infectious diseases), the relevant facts are reported to thepresident and Audit & Supervisory Board members. At the same time, the heads of relevant
departments collect all pertinent information, formulate response measures, clarify causes,
determine countermeasures and submit reports on these actions to the Executive Committee
and the Board of Directors.

Business Continuity Plan (BCP)
Lion works to build and maintain systems to minimize damage and to ensure the continuationof business operations so that it can provide products to customers even in the event of amajor earthquake, storm or flood damage, an epidemic, an outbreak of infectious disease(pandemic) or other such event. In the event of an emergency, we will discuss how to set inmotion business continuity plans based on the Emergency Response System.
Basic Policy(1) Secure the safety of employees and their families(2) Continue priority businesses and key operations to minimize business damage(3) Carry out corporate social responsibilities and contribute to local communities
Key Points of Plan
(1) Priority business: Consumer Products Business(2) Priority operations: Operations necessary for continuation of product supply(3) Target timeframes for restoring operations and organizational chains of command

Implementing Risk Management
The Executive Management Board identifies and evaluates risks that have the potential tosignificantly impact the Lion Group’s management performance and financial status, anddesignates these as “management risks.” The whole Group works to mitigate or otherwise
address these risks (the 13 risks outlined on page 64) through dedicated committees and systems
in each department. For risks specific to individual departments, the relevant departments
designate and evaluate them as “individual risks” and investigate countermeasures throughout
the year, which they then implement. The director responsible for risk management reports on
the progress of risk management to the Executive Committee and the Board of Directors asnecessary. The Auditing Office audits the status of risk management for each department in theGroup and reports its findings to the Executive Committee and the Board of Directors.
WEB

Risk Management
https://www.lion.co.jp/en/company/governance/risk-management.php

63

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Business Risks
The Lion Group has identified 13 risks that may seriously impact Group management in terms of its ability to carry out its corporate social responsibilities, including achieving sustainable growth andsupplying products to customers. We are focusing particular efforts on managing these risks.
Risk

Description(1)	Risks related to market andcustomer changes

Risk of falling behind competitors and being unable to maintain market share or sales due to delays
in responding to changes in customers’ consumption and purchasing behavior and other factors

We analyze changes in markets and customers’ consumption and purchasing behavior from multiple
angles, and work to create and provide new living habits that lead to customer value.

Risk of problems with products, such as unforeseen product-related accidents, due tounforeseen product defects or mistaken use by customers

We ensure compliance with related laws and regulations and implement product development and otherprocesses in line with our Product Management System based on the JIS Q 9000 family of standards after
taking steps prior to release to identify and minimize risks including misuse or abnormal use. We have alsoacquired ISO 9001 certification and are working to reinforce our organizational management system for quality.

(3)	Raw material procurement
risks

Risk of supply-chain delays or breaks resulting from factors such as geopolitical risks,
accidents at suppliers or rapidly rising purchasing prices due to increasingly fierce competition
in procurement resulting from climate change and changes in global demand trends

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

(4)	Overseas business risks

Risk of incurring costs associated with response measures or limitations on businessactivities arising from political and economic developments or changes in or the tighteningof laws and regulations in the countries and regions where we do business, resulting fromchanges to the composition of our overseas business, as well as risk of changes to policies
and financial measures of major stakeholders that affect our business operations

We closely monitor developments related to political and economic conditions as well as laws and regulationsin the counties and regions where we do business, continually gathering information and preparing forchanges. In addition, we diversify our countries of operation as well as our portfolio to spread risk.

(5)	Human resource risks

Risk of stagnation in corporate growth due to difficulty in securing and developing
necessary human resources according to plans as a result of such factors as the shrinking
labor force and changes in the employment environment, as well as risk of human resource
loss and stagnations of business activities due to inability to foster a corporate culture that
respects diverse values and enhances relationships within the organization

We conduct human capital management, centered on the LION Professional Fulfillment Reforms, which
encompass measures related to work management and work styles, as well as allocation of humanresources within the Group in alignment with management strategies

Risk of information leaks, system paralysis or other incidents due to such unforeseen
events such 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 trade
secrets, based on the Basic Policy on Information Management.

Risk of serious legal or regulatory violations due to the unforeseen establishment or
abolition of relevant laws or significant regulatory changes or tightening

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

Risks of inappropriate comments or messages on social media or other platforms quickly
spreading and generating controversy or backlash

We endeavor to quickly discover inappropriate information by continuously monitoring social media andother platforms. We have also formulated a social media risk management manual, establishing a systemthat enables us to respond promptly, cautiously and appropriately at an early stage.

(9)	Exchange rate risks

Risk of impact of exchange rate fluctuations on import/export transactions, such as those related
to product supply or raw material procurement, and risk of impact on Group management
performance and financial position resulting from foreign currency translation to Japanese yen in
the consolidated financial statements

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

(10)	Major lawsuit risks

Risk of economic impact or damage to the Company’s brand image or social credibility
resulting from unfavorable decisions for the Group in major lawsuits

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

(11)	Novel influenza and otherinfectious disease risks

Risk of the emergence and prolongation of novel strains of influenza or other infectious
diseases resulting in restrictions on the movement of people and things that could limit
business activities

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

(12)	Major earthquake, typhoonand other natural disasterrisks, and accident risks

Risk of death or injury of employees or others, as well as physical damage, such as damage
to manufacturing facilities or warehouses, caused by a major earthquake, major typhoon orother natural disaster, or by insufficient safety activities or equipment malfunction at
production facilities, and risk of resulting interruptions of business continuity or product supply

We have prepared a system for implementing organizational responses (including remotely) based on the“Manual on Countermeasures for Earthquake Disasters,” conduct periodic drills, and have established a
Business Continuity Plan (BCP) Framework to ensure business continuity and rapid recovery in the eventof a disaster in order to fulfill our product supply responsibilities.

(13)	Climate change and otherenvironmental change risks

Risk 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 established LION Eco Challenge 2050, a set of longterm environmental objectives for 2050, and are ambitiously working to realize a decarbonized, resourcecirculating society.

(2)	Product quality risks(6)	Information managementrisks(7)	Compliance risks(8)	Reputation risks

Main Countermeasures64

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Leadership Team Directors, Audit & Supervisory Board Members and Executive Officers (As of April 1, 2024)
Representative Director,
Chairman of the Board of Directors

Representative Director,
President and Executive Officer

Director,
Vice President and Executive Officer

Masazumi Kikukawa

Masayuki Takemori

Hitoshi Suzuki

Chief Executive Officer

April 1984
Joined Lion Corporation
March 2012
Director, Executive Officer
March 2016
Executive Director, Executive Officer
March 2017
Director, Managing Executive Officer
March 2018
Representative Director, Senior Managing Executive Officer
January 2019	Representative Director, President and Executive Officer,
Chief Operating Officer
March 2022	Representative Director, President and Executive Officer,
Chief Executive Officer
January 2023	Representative Director, President and Executive Officer,
Chief Executive Officer
March 2023	Representative Director, Chairman of the Board of Directors,
Chief Executive Officer
March 2024
Representative Director, Chairman of the Board of Directors

April 1993	Joined Lion Corporation
January 2021	Executive Officer
January 2022	Senior Executive Officer
March 2023	Representative Director, President and Executive Officer,
Chief Operating Officer
March 2024	Representative Director, President and Executive Officer,
Chief Executive Officer

April 1985	Joined Lion Corporation
January 2016	Executive Officer
March 2019	Senior Executive Officer
March 2021	Director, Executive Officer
January 2023	Director and Executive Officer
March 2023	Director, Vice President and Executive Officer
Responsible for Northeast Asia Business Division, Southeast and South Asia
Business Division and Overall Overseas Businesses

Director,
Senior Executive Officer

Director,
Senior Executive Officer

Director,
Senior Executive Officer

Director,
Senior Executive Officer

Kenjiro Kobayashi

Yugo Kume

Fumitomo Noritake

Kengo Fukuda

April 1987	Joined Lion Corporation
March 2012	Director, Executive Officer
March 2017	Director, Senior Executive Officer
Responsible for Human Resources Development Center, Corporate
Ethics, General Affairs Department, Management Support Department
and Sustainability Promotion Department

April 1984	Joined Lion Corporation
January 2016	Executive Officer
March 2018	Director, Executive Officer
January 2021	Director, Senior Executive Officer

April 1988	Joined Lion Corporation
January 2016	Executive Officer
March 2019	Director, Executive Officer
March 2023	Director, Senior Executive Officer

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

Responsible for Manufacturing Innovation Headquarters, Purchasing
Headquarters, Research and Development Headquarters, Production andLogistics Headquarters, Overall Chemicals Businesses, Digital Strategy
Department, Intellectual Property Department and Safety and Disaster
Prevention Department

April 1987	Joined Lion Corporation
January 2017	Executive Officer
January 2022	Senior Executive Officer
March 2022	Director, Executive Officer
March 2023	Director, Senior Executive Officer
Responsible for Finance Department, Risk Management, Corporate Planning
Department, Consumer Service Center, Reliability Assurance Department andLegal Department

External Director

External Director

External Director

External Director

Kazunari Uchida

Takashi Shiraishi

Takako Sugaya

Reiko Yasue

January 1985	Joined Boston Consulting Group
June 2000	Representative for Japan, Boston Consulting Group
March 2006	External Auditor, Suntory Limited (now Suntory Holdings
Limited)April 2006	Professor, Faculty of Commerce, Waseda University
February 2012	External Auditor, Kewpie Corporation
June 2012	External Director, Lifenet Insurance Company
External Director, Mitsui-Soko Holdings Co., Ltd.
August 2012	External Director, Japan ERI Co., Ltd. (now ERI Holdings
Co., Ltd.)
February 2015	External Director, Kewpie Corporation
March 2016	External Director, Lion Corporation (current position)
April 2022	Professor Emeritus, Waseda University (current position)

June 1979	Assistant Professor, International Relations, Department of
Humanities and Social Science, College of Arts and Sciences,
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 the Advisory Committee), Lion Corporation
March 2017	External Director, Lion Corporation (current position)
April 2017	Special Visiting Professor, Ritsumeikan University
May 2017	Professor Emeritus, National Graduate Institute for Policy Studies(current position)
April 2018	Chancellor, Prefectural University of Kumamoto

October 2002	Registered as an attorney at law (Daini Tokyo Bar Association)
	Joined Yamada Hideo Law Office (now the Yamada Ozaki
Law Office)April 2010	Associate Professor, Toin University of Yokohama Graduate
School of Law
June 2018	External Director, Haruyama Holdings, Inc.
March 2019	External Director, Lion Corporation (current position)
March 2024	Established SUGAYA PARTNERS LAW OFFICE,
Representative Attorney (current position)

April 1991	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.
April 2015	Managing Executive Officer, FUJISOFT Inc.
January 2018	Joined Cybernet Systems Co., Ltd., Executive Vice President
March 2018	Representative Director, Executive Vice President,
Cybernet Systems Co., Ltd.
March 2019	Representative Director, President & CEO, 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)
March 2024	Senior Advisor, JSR Corporation (current position)

65

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Leadership Team
Audit & Supervisory Board Member

Audit & Supervisory Board Member

Naoki Miidera

Yoshitada Ishii

April 1986	Joined Lion Corporation
April 2013	General Manager of the Corporate Planning Department forSpecial Mission
January 2017	General Manager of the Corporate Planning Department forSpecial Mission of Corporate Strategy Headquarters
January 2019	General Manager of Legal Department and General Managerof the Corporate Planning Department for Special Mission of
Corporate Strategy Headquarters
August 2019	General Manager of Legal Department
January 2023	Assistant to the President
March 2023	Audit & Supervisory Board Member

April 1986	Joined Lion Corporation
August 2020	Acting General Manager of Finance Department
August 2022	Finance Department
January 2023	Assistant to the President
March 2023	Audit & Supervisory Board Member

External Audit & Supervisory Board
MemberExternal Audit & Supervisory Board
MemberAtsuko Suzuki

Masatoshi Matsuzaki

April 1986	Joined Matsushita Electric Industrial Co., Ltd. (now Panasonic
Corporation)
April 2008	Director and Manager of the CSR Office, Matsushita ElectricIndustrial Co., Ltd. (resigned in December 2014)
April 2010	External Director and Auditor, Nara Women’s University(resigned in December 2012)
January 2015	Joined Asahi Breweries, Ltd.
April 2015	Manager of the Social Environment Department, Asahi
Breweries, Ltd.
October 2015	Manager of the Sustainability Promotion Section, Olympic/
Paralympic Promotion Headquarters (concurrently held),
Asahi Breweries, Ltd.
April 2017	Director and General Manager of the CSR Division of
Asahi Group Holdings, Ltd.
March 2021	External Audit & Supervisory Board Member, Lion Corporation(current position)

External Audit & Supervisory Board
MemberAkemi Sunaga

October 1989	Joined Aoyama Audit Corporation (nowPricewaterhouseCoopers Aarata LLC)
February 1991	Joined Chuo Audit Corporation
August 1993	Acquired Japanese CPA certification
October 1994	Acquired Japanese tax accountant certification
November 1994	Established Sunaga CPA Firm (current position)
November 1996	Established and became representative director of
Marunouchi Business Consulting Ltd. (current position)
January 2012	Established and became representative of Marunouchi
Business Consulting Tax Co. (current position)
June 2016	External Audit & Supervisory Board Member of
Matsumotokiyoshi Holdings Co., Ltd.
June 2017	Senior Partner/CEO of Marunouchi Audit Corporation
March 2019	Alternate Audit & Supervisory Board Member ofLion Corporation
January 2022	Senior Partner of Marunouchi Audit Corporation(current position)
March 2023	External Audit & Supervisory Board Member, Lion Corporation(current position)

April 1976	Joined Konishiroku Photo Industry Co., Ltd. (now KONICAMINOLTA, INC.)
October 2003	Director, Konica Minolta Business Technologies Co., Ltd.
April 2005	Executive Officer, Konica Minolta Holdings, Inc. (now KONICAMINOLTA, INC.)
	Representative Director and President, Konica Minolta
Business Technology Center Co., Ltd.
April 2006	Senior Executive Officer, Konica Minolta Holdings, Inc. (now
KONICA MINOLTA, INC.)
June 2006	Director and Senior Executive Officer, Konica Minolta
Holdings, Inc.
April 2009	Director, President and Chief Executive Officer, Representative
Executive Officer, Konica Minolta Holdings, Inc.
April 2014	Director, Chairman of the Board, KONICA MINOLTA, INC.
June 2016	Outside Director, Nomura Research Institute, Ltd.
Outside Director, Nippon Sheet Glass Co., Ltd.
January 2019	Member, Advisory Committee, Lion Corporation
June 2022	Special Adviser, KONICA MINOLTA, INC. (current position)
March 2023	External Audit & Supervisory Board Member, Lion Corporation(current position)
June 2023
Honorary Adviser, KONICA MINOLTA, INC. (current position)

Senior Executive Officer

Executive Officer

Masaharu Mikuni

Tomomichi Okano

Executive General Manager of Health and Home
Care Products Sales Division, Responsible forDistribution Policy Department

Responsible for Corporate Environmental Strategy

Executive Officer

Executive Officer

Yasutsugu Shimizu

Annette Ling

Executive General Manager of Production andLogistics Headquarters

Special Assignment for Thailand Business

Executive Officer

Executive Officer

Kei Minamikawa

Akihiko Takeo

Executive General Manager of Supply Chain
Management Planning Headquarters,
Responsible for Human Resources Development Center

General Manager of Finance Department

Executive Officer

Executive Officer

Katsuhiko Chikyu

Ayako Suzuki

Executive General Manager of Purchasing
Headquarters

Executive General Manager of Research andDevelopment Headquarters

Executive Officer

Executive Officer

Yasuhiro Urao

Yoshihiro Aihara

Executive General Manager of Health and Home
Care Products Division

Executive General Manager of Northeast Asia
Business Division

Executive Officer

Executive Officer

Go Ichitani

Norihiko Nakabayashi

Executive General Manager of Southeast and South
Asia Business Division

Responsible for Digital Strategy,
Digital Strategy Department

WEB

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

Note: Notification of the appointment of Mr. Uchida, Mr. Shiraishi, Ms. Sugaya and Ms. Yasue as independent directors, and Ms. Suzuki, Mr. Matsuzaki and Ms. Sunaga as independent Audit & Supervisory Board members has been sent to the Tokyo Stock Exchange.

66Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance67

Performance/Data

Integrated Report 2024 Overview

Consolidated Net Sales

Consolidated Core Operating Income

Results by Business Segment¥402.7 billion

Consumer Products Business (Japan)
The Consumer Products Business segment comprises theoral care products, beauty care products, fabric careproducts, living care products, pharmaceutical products andother products businesses. Segment net sales increased
0.7% compared with the previous fiscal year. Core operating
income decreased 58.1% due to factors including the impact
of increases in raw material prices.

Percentage of Consolidated
External Sales

External Net Sales / Core Operating Income

Net Sales by Product Category in 2023

（Billions of yen）

Other Products

250
200

Pharmaceutical
Products

100

9.9%

0

24.6

19.6
2019

2020

External net sales

Overseas Business
The Overseas Business segment comprises business
operations located in Southeast and South Asia, including
Thailand and Malaysia, and in Northeast Asia, including China
and South Korea. Segment net sales increased 14.5% year
on year (an 8.0% increase at constant currency, excluding
exchange rate fluctuations) and Core operating income
increased 67.8%.

Percentage of Consolidated
External Sales

The Industrial Products Business segment includes themobility, electronics and detergents for institutional use fields.
These businesses handle products that include anti-sticking
agents for tire rubber, electro-conductive carbon for secondary
batteries, and detergents for institutional and kitchen use,
respectively. Segment net sales decreased 1.5% comparedwith the previous fiscal year. Core operating income
decreased 3.8%.

2021

11.4
2022

Core operating income

9.1%

4.7
2023 2024(Forecast)

22.8%

8.3%

（Billions of yen）

（Billions of yen）

100
80

145.0

134.1
118.0
91.7

91.2

0

90.5
81.2

70
60

60
20

Southeast and South Asia
Northeast Asia

90
80

98.7

69.5

66.4

7.5

7.1

6.0

5.1

2019

2020

2021

2022

Core operating income

40

8.5

0

2023 2024(Forecast)

31.5
2019

35.1
2020

57.5

68.7
48.0

50

40

40.4

2021

2022

2023

External Net Sales / Core Operating Income（Billions of yen）

40
30

9.5%

Fabric Care Products

Living Care Products

Net Sales of the Overseas Business

120

Percentage of Consolidated
External Sales

Beauty Care
Products

External Net Sales / Core Operating Income

External net sales

Industrial Products Business

19.0

140

33.3%

27.2%

219.3 229.7 229.5 230.5 228.6 225.0

150

50

Oral Care Products

22.7%

300

56.8%

¥20.1 billion

32.9

34.7

31.5

37.8

38.5

38.3

20
10
0

1.7

2.1

2.6

3.1

2019

2020

2021

2022

External net sales

Core operating income

3.02023 2024(Forecast)

Note:	In Other Business, our subsidiaries are mainly engaged in operations related to Group businesses, with sales comprising 0.4% of consolidated net sales. The main products and services of this business include construction contracting, real estate management andtemporary staffing.

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

68

Segment Overview

Consumer Products Business (Japan)
Market Environment
Opportunities

Risks• Spread of regular dental checkups and risingawareness of oral healthcare•C ontinuously high raw material prices and logistics
costs• Rising awareness of the importance of self-care andcleanliness and hygiene for good health•R apid decrease in domestic population/number ofhouseholds• Rising awareness of environmentally friendly andsustainable consumption• Impacts on supply chains from extreme weather
events and natural disasters

Vision2030 1st STAGE

Simultaneously increasing social and economic value throughproduct proposals that create better habits

Oral Care
Products

Strategy

Add value to oral healthcare products and propose new habits in the oral health field

Progress

We have launched high-added-value products for oral healthcare such as CLINICA PRO andexpanded our range of new support services to raise awareness of the importance of oral
healthcare.

Strategy

Propose new habits to regularly promote mental and physical health based oncleanliness and hygiene

Progress

The KireiKirei brand has helped to establish regular hand washing and is the leading handsoap brand in Japan. We continue to propose hygiene-related habits that go beyond handwashing.

Strategy

Propose new laundry methods aiming to create better habits while catering to various
changes in lifestyle environments

Progress

We have launched new products such as SOFLAN Airis and NANOX one in laundry-related
fields, and continue to propose more enjoyable daily laundry habits.

Strategy

Pursue more efficient, labor-saving housework and greater value in cleanliness andhygiene, and propose new housework habits for the next generation

Progress

We continue to propose habits that transform troublesome housework routines into easier,more positive routines through Magica and LOOK Plus Bath Cleaning.

Strategy

Propose self-care habits that enable people to choose the optimal solution based on
their own condition

Progress

Since the reclassification of COVID-19 as a Class 5 infectious disease, we have used
BUFFERIN to propose self-care habits and FERZEA as a solution for those with skin worries.

Market Position
Toothpastes

Toothbrushes

Dental rinses

No. 1 shareNo. 1 shareNo. 3 share

Dental careproducts

Hand soaps

Body soaps

No. 2 shareNo. 1 shareNo. 4 share

Laundry
detergents

Fabricsofteners

Dishwashingdetergents

No. 3 shareNo. 3 shareNo. 3 share

Bathdetergents

Antipyretic
analgesics

Eye drops

No. 2 shareNo. 2 shareNo. 3 share

Note: Market position (market share) in 2023 according to Lion Corporation survey

Beauty Care
Products

Fabric Care
Products

Living Care
Products

Pharmaceutical
Products

Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Segment Overview

Overseas Business
Market Environment
Opportunities

Risks• Expansion of healthcare market in line with rapid risein health awareness• Disorder caused by political instability mainly in• Diversification of needs in line with expansion of• Difficulties in raw material supplies due to rising• Emergence of common regional needs in• Increase in product prices due to continuously high• Changes in distribution structures with e-commerce• Increase in training costs due to increasingly toughmiddle class in emerging countries

predominantly urban areas in each country
and minimarts, etc.

emerging countries
geopolitical risks

raw material prices

competitive environments• Rising needs for environmentally friendly products
such as refills

Accelerating reforms to grow net sales and increasing ourpresence in the markets of Asia

• Increasing demand for hygiene products in line withspread of hygienic habits

Vision2030 1st STAGE

Market Position
Lion Corporation (Thailand) Ltd.

Southern Lion Sdn. Bhd.

Location: Bangkok, Thailand

Location: Johor Bahru, Malaysia

Categories in top 3

Categories in top 3• Liquid soaps
No. 1 share• Hand soaps• Laundry
detergents

Strategy

Progress

No. 1 share• Toothpastes and toothbrushes• Laundry detergents• Dishwashing detergents

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

Location: Seoul, South Korea

Location: Qingdao, China

Categories in top 3

Categories in top 3• Hand soaps
No. 1 share• Laundry detergents• Dishwashingdetergents• Regular
toothbrushes
via e-commercechannels

Note: Market position (market share) in 2023 according to Lion Corporation survey•S teadily move forward with expansion into new countries or regions andcontribute to the creation of better habits among more consumers

Southeast andSouth Asia

No. 1 share

Lion Corporation (Korea)•A im for growth in the personal care business in the oral healthcare and other fields
field in line with rising health awareness

Strategy• In the oral care field, we have added value to toothbrushes and implemented
education and awareness activities with local governments and dental specialists•W e have started new businesses in Bangladesh and Vietnam and built
organizations and production systems aimed at future growth•E xecute glocalization strategy in line with sophistication of lifestyles (Type III
pattern-based marketing)•S tabilize profitability foundation through portfolio reforms in each country andregion, and accelerate business growth in China through investments•W e have implemented SCRM systems and begun full-fledged subscriptions toreinforce e-commerce sales in China

Northeast Asia

Progress•W e have reinforced sales systems and increased domestic production of
toothbrushes and other products to strengthen in-store sales in China•W e have established a new research center in Shanghai to reinforce development.
We have worked to improve profitability by increasing range of value-added oral
care products, etc.

69Lion Integrated Report 2024

Contents

Our Purpose

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Segment Overview

Industrial Products Business
Chemical Products Business

Detergents for Institutional Use Products Business

Becoming a top global niche company that provides new value to industrial
customers' next-generation products

Providing unique cleanliness and hygiene solutions to corporate customers
and contributing to the resolution of social challenges

Market Environment

Market Environment

Opportunities

Opportunities

Risks• Growth in the electric vehicle (EV) market as wemove toward a decarbonized society and growth in
the semiconductor market due to the spread of 5G
communications• Continuous growth in the hygiene-related market• Changes in lifestyles and consumer awareness• Rising needs for cleanliness, hygiene, and safety• Fluctuating raw material and energy prices• Recovery of domestic institutional markets• Changes in supply chains due to rising geopoliticalrisks• Expansion of businesses and investments aimed atlabor-saving

Vision2030 1st STAGE

Strategy

CASE*

Progress

Strategy• In the growing secondary battery market, which has been driven by risingdemand for electric vehicles (EVs), increase rollout of electro-conductive agent
KETJENBLACK carbon black (KB), which has excellent properties, by increasing
production capacity• In the anti-sticking agent business, where we hold the top domestic market share forgeneral-use, powder-type anti-sticking agents, enhance customer value through therollout of liquid polymer anti-sticking agents and aim to capture top global market
share for both• We are making steady progress with the launch and overseas rollout of new
products in the anti-sticking agent business.

•R apid changes among competitors and businesses•E xpand food processing business based on vegetablewashing systems that use our proprietary ozone technology

Progress• We continue to expand our launch of new products
We are also enhancing initiatives for our unique productcategories and expanding our range of target customers.

Strategy• Makecomprehensive proposals to the restaurant industry using our strengths inhygiene technology and detergents

Progress• We have expanded our business by strategically focusing our products andtechnologies on growing business fields. In 2024, we will establish a joint venture in
China with the aim of further expanding our business.

Strategy• Provide
our unique products and services using the optimal distribution means tomarkets where demand continues to grow

Progress• We are currently reviewing our strategies for each field aimed at efficient expansionof products and distribution.

Restaurantand Hygiene
Business• Proactively rollout nitrogen derivatives and functional polymers in line with the needsof end customers in the healthcare market, and promote establishment of a raw
material procurement system as a key competitive advantage• We have achieved steady profit growth by focusing on expansion into markets
related to sterilization and healthcare.
• We have expanded collaboration with domestic and overseas suppliers andstrengthened our production and supply system.
WEB• Impacts from worsening logistics environment

Strategy

Commercial
Vegetable andFood Business• We have achieved significant increases in sales and profit compared to the previous
year through proactive rollout of KB for use in batteries.

* Markets centered on connected, autonomous, shared, and electric
technologies•F luctuating exchange rates and continuously high raw
material prices

Vision2030 1st STAGE

Sanitary

Progress

Risks

Lion Specialty Chemicals Co., Ltd.
https://www.lion-specialty-chem.co.jp/en/

Nursing Care
Facility
Business

WEB

Lion Hygiene Co., Ltd.
(Japanese only)
https://www.lionhygiene.co.jp/

70Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

71

Integrated Report 2024 Overview

Key Financial Data
V-1 Plan
2012-2014

V-2 Plan
2015-2017

Japanese GAAPLIVE Plan
2018–2020(Millions of yen)

2014

2015

2016

Vision2030 1st STAGE
2022–2024

IFRS

2017

(Millions of yen)

2018

2019

2020

2021

2022

2023

Consolidated Statement of Income
Net sales

367,396378,659

395,606

410,484

Consolidated Statement of Income
Net sales

349,403347,519355,352

366,234

389,869

402,767

Cost of sales

160,677

162,435

161,992

171,209

Cost of sales

177,673

175,588

175,479

187,129

215,263

222,168

Gross profit

206,718

216,223

233,613239,275

Gross profit

171,729

171,931

179,872

179,104

174,605

180,598

56.3

57.1

59.1

58.3

49.1

49.5

50.6

48.9

44.8

44.8

194,312

199,848

209,110

212,068

Selling, general and administrative expenses

143,353

141,882

143,934

148,181

151,046

160,465

Selling, general and administrative expenses to net sales (%)

Gross profit to net sales (%)
Selling, general and administrative expenses
Selling, general and administrative expenses to net sales (%)
Operating income
Operating income to net sales (%)

52.9

52.8

52.9

51.7

12,406

16,37424,502

27,206

3.4

4.3

6.2

6.6

Gross profit to net sales (%)

Core operating income2
Core operating income ratio (%)
Operating income

Profit attributable to owners of parent

7,368

10,68015,951

19,827

Operating income to net sales (%)
Profit before tax
Profit before tax to net sales (%)

41.0

40.8

40.5

40.5

38.7

39.8

28,37530,04835,93730,92323,55920,133

8.1

8.6

10.1

8.4

6.0

5.0

34,196

29,83244,074

31,17828,84320,505

9.8

8.6

12.4

8.5

7.4

5.1

35,65831,40244,49434,08931,292

22,375

10.2

9.0

12.5

9.3

8.0

5.6

Profit for the period attributable to owners of the parent

25,606

20,55929,87023,75921,93914,624

Consolidated Balance Sheets
Total assets

283,352

282,434

298,510331,751

Consolidated Balance Sheets
Total assets

355,365

380,701

435,501

428,025

469,278

486,363

Property, plant and equipment

79,27575,06074,40280,981

Property, plant and equipment

81,54690,903

118,379

120,673

130,137

140,671

Total noncurrent liabilities

40,38018,455

17,19017,511

Total noncurrent liabilities

21,35023,781

24,016

23,792

48,53644,896

Total liabilities

155,918

139,703

140,630

144,736

Total liabilities

151,093

159,499

190,644

163,011

190,110

188,229

Total net assets

127,434

142,730

157,879

187,015

Total net assets

204,271

221,201

244,856

265,014279,168

298,134

Capital expenditures1

13,555

8,801

9,407

14,892

Capital expenditures1

16,67823,64447,57021,89024,31427,807

R&D expenses

9,439

9,808

10,084

10,474R&D expenses

10,96910,944

10,906

11,18011,077

11,217

Depreciation and amortization

10,301

11,166

10,244

9,386

Depreciation and amortization1

8,707

10,504

11,732

14,252

17,66520,201

Number of employees

6,343

6,816

6,895

7,075

Number of employees

6,941

7,151

7,452

7,584

7,587

7,550

Earnings per share – basic

27.47

39.35

55.13

68.23

Earnings per share – basic

88.11

70.72

102.75

81.73

77.04

51.42

Earnings per share – diluted

26.16

36.84

55.04

68.15

Earnings per share – diluted

87.99

70.63

102.61

81.59

76.91

51.35

Dividends per share

10.00

10.00

13.00

17.00

Dividends per share

20.00

21.00

23.00

24.00

25.00

26.00

Net assets per share

449.94469.05513.76607.61

Net assets per share

657.50716.94797.08865.31

929.72985.43

Other selected data

Other selected data

Per share data (yen)Per share data (yen)Number of shares outstanding (common stock) 299,115,346 299,115,346 299,115,346 299,115,346

Number of shares outstanding (common stock) 299,115,346 299,115,346 299,115,346 299,115,346 292,536,446 292,536,446

Management indicators

Management indicators

Return on equity (ROE) (%)

6.2

8.5

11.2

12.2

EBITDA3 (Billions of yen)

ー

ー

47.66

45.17

39.94

ROIC4 (%)

ー

ー

10.7

8.8

6.0

4.7

13.9

10.3

13.6

9.8

8.5

5.4

Profit for the period to equity attributable to owners of the parent (ROE) (%)

1. Includes intangible assets.
2.	Core operating income is an earnings indicator the Company uses to measure regular business performance, calculated by subtracting selling, general and administrative expenses from gross profit.
3.	It is the sum of core operating profit and depreciation and amortization (excluding right-of-use assets). The calculation method for this indicator changed in 2022. EBITDA is an indicator of profitability on a cash basis.
4.	ROIC is an indicator of the profitability and efficiency of invested capital. It is calculated as net operating profit after tax (NOPAT) divided by average invested capital (total equity plus interest-bearing liabilities) during the period.

WEB

38.00

Financial Highlights
https://www.lion.co.jp/en/ir/finance/

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

Key Non-Financial Data
Environment

Community

TargetCategory

Classification

Unit

2021

2022

2023

1

Scope 11,000 t-CO2

77

70

63

Scope 2

1,000 t-CO2

74

89

54

Scope 31,000 t-CO2

4,770

4,870

4,536

GWh

546

549

436

GWh

42

2

81

1,000 t-CO2

0

16

16

Plastic usage(household products)

1,000 t

43

38

38

Water usage throughout
product lifecycles

Million m3

2,291

2,303

2,228

Greenhouse gas emissions
throughout the supply chain
Realizing a
Decarbonized Non-renewable energy
Societyconsumption
Renewable energy consumption
Carbon credits purchased2
Realizing a
ResourcecirculatingSociety1

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

Unit

2021

2022

2023

Hand washing habit educational andawareness activities: Oral Health
Event of Tooth Brushing for Children1

No. ofparticipants

Japan and Asia
Approx. 252,000Japan and Asia
Approx. 253,000

Japan and Asia
Approx. 270,000

Hand washing habit educational andawareness activities: Education incorrect hand washing methods2

No. ofparticipants

Approx. 1,300

Approx. 2,360

Approx. 2,510

1. An event for elementary school students held since 1932 during Dental and Oral Health Week (June 4–10)
2. Fun educational events on hand washing techniques for nursery school students, school students and school teachers alike

1. Data for previous years has been corrected.
2. Lion Corporation (Thailand) has purchased solar power-derived T-VER carbon credits.
T-VER is a carbon credit system run by a public institution in Thailand.

Employees
Category
Employees

Material
Lion Corporation (including employees on loan)

Unit

2021

2022

2023

Male (No.)

2,347

2,317

2,253

Female (No.)

1,238

1,270

1,292

Male (No.)

46

35

21

Female (No.)

38

30

38

New employees (New graduates)

Lion Corporation (including employees on loan)

Ratio of women in management

Lion Corporation (including employees on loan)

%

10.3

11.1

14.2

Re-hired retirees

Lion Corporation (including employees on loan)

(No.)

293

343

462

Employees with disabilities

Lion Corporation (including employees on loan)

Average service years (Excluding re-hired retirees)

Lion Corporation (including employees on loan)

%

2.7

2.8

2.9

Male (Years)

19.5

19.6

18.3

Female (Years)

14.1

14.2

13.1

Male (No.)

54

55

57

Employees who took childcare leave

Lion Corporation (including employees on loan)

Annual paid leave used

Lion Corporation (including employees on loan)

Employee Awareness and Behavior Survey:
Ratio of employees who take pride in their work

Lion Corporation (excluding employees on loan)

Average hours per FTE of training and development

Lion Group

Hours

31

34.9

32.1

Average amount spent per FTE on training and development

Lion GroupYen

36,70051,40043,992

Female (No.)

84

77

89

%

65.9

69.2

74.8

%

80.5

77.1

74.5

WEB

ESG Data and Third-party Verification
https://www.lion.co.jp/en/sustainability/management/data/72

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

Integrated Report 2024 Overview

External Evaluations and Participation in External Organizations (As of March 31, 2024)
In addition to financial considerations, the Lion Group works to address environmental, social and governance issues. We have been selected for inclusion in leading socially responsible
investing (SRI) indices. Our environmental, logistics and human resources initiatives have been highly evaluated by governmental and other external institutions.

Inclusion in SRI Indices

Evaluations and Certifications
Evaluations and Certifications Related to the Environment

THE INCLUSION OF LION CORPORATION IN ANY MSCI INDEX, AND THE USE OF
MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN DO
NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF LIONCORPORATION BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE
THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND
LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Evaluations and Certifications Related to Human Resources

Participation in External Organizations

Evaluations and Certifications Related to Overall CSR

4-0012-06-100-00

Evaluations and Certifications Related to the Supply Chain

WEB

Initiatives and External Evaluations
https://www.lion.co.jp/en/sustainability/management/investor/

73

Lion Integrated Report 2024

Our Purpose

Contents

Our Strategy

Corporate Governance

Performance/Data

74

Integrated Report 2024 Overview

Corporate Overview and Stock Information (As of December 31, 2023)

Corporate Overview
Corporate NameFoundation
Establishment
CapitalAddress
Employees

Stock Information

Lion Corporation
October 30, 1891
September 1918
¥34,433,720,000
1-3-28 Kuramae, Taito-ku, Tokyo 111-8644, Japan
3,132 (Consolidated: 7,550)

Stock Listing
Securities CodeTransfer Agent
Number of Shares ofCommon Stock
Number of Shareholders

Shareholders by Category
Foreign institutions and individuals

18.84%

Individual investors and others(including treasury stock)

30.78%

Prime Market of Tokyo Stock Exchange
4912
Mitsubishi UFJ Trust and Banking Corporation
292,536,446 (Issued and outstanding)
287,776

Share Price and Trading Volume
Total Shareholder Returns
December
2019

December
2020

December
2021

December2022

December
2023

Lion

94.5%

112.0%

70.7%

70.8%

62.9%

Reference: TOPIX net total return index

118.1%

126.8%

143.0%

139.5%

178.9%

Other Japanese corporations

13.43%
Financial instrument firms

2.40%Japanese financial institutions

34.55%

Major Shareholders (Top 10)
Shareholders

Lion shares
Number of shares held(Thousands of shares)

Shareholding ratio
(%)

TOPIX

Trading volume(Yen)(Millions of shares)

3,000

90

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

39,303

13.78

Custody Bank of Japan, Ltd. (Trust Account)

24,262

8.51

2,500

75

Custody Bank of Japan, Ltd. As trustee for Mizuho Bank, Ltd. Retirement
Benefit Trust Account re-entrusted by Mizuho Trust and Banking Co., Ltd.

8,282

2.90

2,000

60

1,500

45

1,000

30

MUFG Bank, Ltd.

7,076

2.48

STATE STREET BANK AND TRUST COMPANY 505223

5,881

2.06

Tokio Marine & Nichido Fire Insurance Co., Ltd.

4,450

1.56

Meiji Yasuda Life Insurance Company

3,690

1.29

500

15

0

0

Toyota Tsusho Corporation

3,506

1.22

Mitsubishi UFJ Trust and Banking Corporation

3,500

1.22

STATE STREET BANK AND TRUST COMPANY 505103

3,205

1.12

Note: Shareholding ratios are calculated based on a total of 285,071,536 shares, which is the number of shares issued and outstanding less thenumber of shares of treasury stock, rounded down to the second decimal place.

1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112
2021

2022

2023