Rohto Pharmaceutical Health Values Report 2019

Rohto Pharmaceutical Co., Ltd.
https://www.rohto.co.jp
1-8-1 Tatsumi-nishi, Ikuno-ku, Osaka, Japan 544-8666

Issued November 2019
Printed in Japan

Rohto Pharmaceutical Health Values Report 2019

Seven Pledges

Rohto Pharmaceutical celebrated its 120th anniversary in 2019.

1

We work wholeheartedly to support society, to help create a better world.

Our core value of “Health” has been consistent since2

To this end, we are resolved to learn with humility and strive continuously toward self-improvement.

the Company’s establishment, and we will continue to move3

We place the highest importance in earning the trust and respect of our colleagues andour external business partners.

forward in the long term with this core value while also promoting
values in the areas of “Environment” and “Social.”

4 We take pride in our corporate culture that fosters lofty ideals, stirs passionate debate,
and generates energetic actions.

Corporate Philosophy
15

We delight in constantly challenging each other to create waves of happy surprises
for our customers worldwide.

6

Our people are our greatest asset. Our hard working culture, spirit of close cooperation,
determination, passion, and leadership provide the fuel that drives the company.

7

We firmly pledge to serve the people, the society, and the environment, and are thankful
for our meaningful existence.

We recognize that Rohto’s greatest responsibility is to continue

Corporate Identity

to contribute to people’s mental and physical health so thatthey can lead affluent, happy lives. Therefore, we shall implement
management objectives from a long-term perspective

What is “Never Say Never”?

In order to make the world a healthier place, we lookahead clearly to the path that we should be taking.
And, despite any difficulties, we keep challenging
ourselves to go forward and move beyond theboundaries of common sense.

and strive to create value in order to achieve our goals.

2
Being mindful of our mission as a public entity, we shall address

C O N TE N TS

issues concerning society at large in collaboration with all

02

Message from the Chairmanof the people connected to the Company, and we will share04

Our Social Mission and the Values

30	
R ohto’s Corporate Culture That
We Wish to Continue to Nurture

We Promote

38

Rohto’s Health Management

06

Message from the President

42

Corporate Governance That Supports

10

Management Vision 2030

*Articles of Incorporation were partially amended with approval of the shareholders during

14

Our Treasured ESH

45

the General Meeting of Shareholders in June 2019. Corporate philosophy has been added

T he Values of “Health”
16	Rohto’s Core Value

47

Rohto’s Profit-Sharing Policy

48

Data Collection

49

Corporate Datathe benefits gained through these endeavors.

to Article 2, in order to manage the Company to focus on public benefits and long-term
development.

Our Promotion of ESH
Financial Foundations That Make Our
Promotion of ESH Possible24	T he Value of “Social”
Created Uniquely from the Perspective of Health28	T he Value of “Environment”
Created Uniquely from the Perspective of Health

Ed i t o ri a l Po l i c y

Please Note

We issued this Health Values Report in the hope that we gain the

Any business, planning, or strategic information included in thisfull understanding and support of everyone surrounding us, as wereport which is not based on the Company’s past performance is acommunicate the philosophies that we value and explain our larger

forecast derived from data that is readily available as of the date ofgoals. We will be gratified if the values that we are promoting in thethis report and is in accordance with the management’s decisions.

areas of “Health,” “Environment,” and “Social” resonate with you.

Therefore, the actual results may greatly differ from the forecasts
due to various factors that may affect the performance. We appreciate your understanding of this matter.

HEALTH VALUES REPORT 2019

01

MESSAGE FROM THE CHAIRMAN

We will keep challenging ourselves to movebeyond the boundaries of common sense
To build a sustainable society where people
can lead long, happy, and healthy lives.
Chairman

Kunio Yamada

02

HEALTH VALUES REPORT 2019

Sustainability is a topic that is now being questioned
in society. We are facing many incidents around theworld on the impact of climate change. In Japan,
the issues of a declining birthrate and anincreasingly aging population are becoming more
serious by the year. These problems make it moredifficult for us to have hopes for a bright future, andthese challenges that the society is facing areclosely related to each other. In the food industry,for example, we face issues related to foodshortages and food processing, and these issues
are also deeply related to the environment andenergy. We must come up with solutions to theseissues from the viewpoint of cyclical sustainability.
It is important to look ahead 30 to 50 years into the
future and not just consider the short term, as weneed to create a sustainable society now. When we
think about our lives 50 years from now, we canpicture the children of our younger employees being
active participants in the society. From thatperspective, it is not very far in the future, as we
realize it is our future. That is why it is extremely
important for our corporate strategy to think of our
future from a long-term point of view and look 30 to
50 years ahead. The goals we set for the future ofsustainable society is our current business strategy.
In the fields of health and medicine, treatment
techniques are expected to advance tremendously
over the next 30 to 50 years. In addition, diagnostic
techniques to quickly detect diseases, andtechniques to prevent from getting any diseases will
likely be developed as well. Consequently, people
will live even longer lives. Japan is known
throughout the world as a country whose people
have exceptional longevity. If we can be successful
in creating a society in which people enjoy longevity
and lead happy lives, we can set an example forother countries who will also experience an increasein longevity with their people. Our Company willcontribute to establishing a new social system inwhich people can be healthy and enjoy a long life.
Our efforts encompass a wide range of healthbenefits, including not only treatment withmedicines but also preventive care and diagnoses

and creating health through food. At the same time,
we wish to be actively involved in building acompany where the employees can be happy and astructure of society, allowing us to create aninnovative and unique company model.
We plan to form a large team with many people andpartners who are associated with us, and as teammembers, we strive to build a new social system
and an innovative business model. We need to be
open-minded and get rid of walls, not separating
the Company or the country with others. We will
welcome young people from abroad to create true
diversity, as we face the ongoing issue of a lower
birthrate and an aging population in Japan.
Employees of our Company multi-tasks, as he or
she assumes roles in family life and in local
communities in addition to company duties. We will
not keep the employees solely tied to the Company,
but we encourage each of them to be independentand have strong connection to life outside of theCompany as we already allow employees to havesecondary jobs. By doing so, they can contribute to
the world as standout individuals.
Since the founding, our Company’s core value ofHealth remains at the center of our mission. With
Health as our core, we also strive to promote values
in Environment and Social. We maintain a long-termview and work together with people who haveconnections to our Company to address social
issues and challenges we face. We hope that all thepeople who are associated with the Company
understand and agree with the values we treasure
and the goals we are aiming for, and will always offer
us long-term support as we meet these challenges.
November 2019
Chairman

HEALTH VALUES REPORT 201903

Our Social Mission and the Values We Must Realize

There are still so many things we can do for the world and for otherpeople. Rohto Pharmaceutical Company strongly believes in this,and the Company is determined to contribute in its own way tomaking the world and its people healthier and more wholesome.

“Healthy and Happy Longevity”
We Challenge Ourselves toCreate a New Society.
Since the founding, Rohto has dedicated itself to beauty andhealth of the people worldwide, and we will continue courageously
challenging ourselves to move beyond the boundaries
of common sense and creating the future of health.

Social issues such as a lower birthrate and an aging
population, climate change and issues concerningenergy are closely related to each other,and they are “difficult issues”.
It is crucial to look firmly ahead 30 to 50 years

The Values We Must Realize

from now to tackle these issues. And the keyword
that is instrumental in successfully
addressing them is “Health,” which Rohto believes
to be most important.
By continuing to proactively create the core value of“Health”, we will challenge to build a new society where
people can spend a healthy and happy long life in Japan,
which is an advanced country
with longevity that the world has ever seen and globally
where aging population will increase.
At the same time, we will stay forward-thinking as
we build a new business model, by actively engaging
in creating a company where people working can

The health of the earth is crucial for realizing a healthy andlong living society. Rohto is striving, and will continue
to strive, to follow our unique endeavors in constantconsideration of the environment.

be happy or a structure of the society.

04

HEALTH VALUES REPORT 2019

HEALTH VALUES REPORT 201905

MESSAGE FROM THE PRESIDENT

By expanding business areas inwhich the Company has advantages
and accepting challenges in new
business opportunities,
we will realize our Management
Vision 2030
“Connect for Well-being.”

Working toward realizing Management
Vision 2030
We wish to continue to contribute to the beauty andhealth of people all over the world, and we also wish
people around us to maintain their highexpectations in our presence. In order to express
our thoughts and hopes clearly on where we wish
the Company to be in 2030, we developed amanagement vision called “Connect for Well-being”
in February 2019 upon our 120th anniversary.
“Well-being” means that individual people arehealthy both physically and mentally and that thesociety is healthy as well. Moreover, it is a state
where people are living his or her daily life feeling
happy. The word “happiness” means not only
physical and mental health but also spending active
time while feeling happy. Our Company will continue
to contribute to realizing healthy and long living

06

President

Masashi Sugimotosociety so that people around the world can enjoy astate of well-being for a long time, by being apharmaceutical company that not only sells
medicine but also connects various areas of ourbusiness, including existing medical products andskincare products. In addition to the management
vision “Connect for Well-being”, we clarified theareas of business which we will target in the next ten
years and defined “Business Area Vision” for eachbusiness sector. The Business Area Vision consistsof six areas: OTC medicines (general drug

HEALTH VALUES REPORT 2019

products), skincare, functional foods,
ophthalmology area, regenerative medicines, andcontract development and manufacturingorganization (CDMO).
For example, in the field of OTC medicines, we willfurther strengthen our main product lines. At thesame time, we will pursue a strategy to enter new
categories through collaborations and M&As toenhance our product portfolio. We hope to becomea leading provider of OTC medicines in Japan. In theareas of pre-symptomatic diseases and prevention,

we will put our efforts into functional foods so that
we can attain our third corporate pillar in theseareas. We will also solidify our regenerative medicine
business in the field of life science.
By clearly articulating our goals throughManagement Vision 2030 and Business Area
Vision, we will promote active collaborations withbusiness partners who can share the same goals
and values. “Connect for Well-being” will be realized
by searching for various forms of collaboration andcooperation.

HEALTH VALUES REPORT 2019

07

MESSAGE FROM THE PRESIDENTGreat opportunities for OTC medicinesand functional foods
As medical finances become tighter, Japan as acountry needs to seriously consider which areas touse its limited financial resources. In order to control
increasing medical costs, it is expected that patients“switching to OTC” from prescription medicines willfurther increase. Also, “self-medication,” in which apatient takes care of his or her own health before
going to see a doctor, will play an important role in
reducing medical costs and prolonging one’s
healthspan. We believe that with growing
significance of switch OTC and self-medication,
there will be higher dependency on OTC medicines
to achieve longer healthspan. As a result, the OTC
medicine market will naturally expand. We alreadyhave products in several categories, such as
ophthalmic, dermatological, digestive, and Chinese
herbal medicines. We plan to pay special attention
to expanding these markets and enhancing our
OTC medicine lines by building a new brand andcollaborating with other companies. In this way, we
will establish a company structure that contributes
to people and society promoting health andlongevity, all while being ahead of our time.
In addition to expanding our presence in the OTC
medicine market, we plan to strengthen our efforts
in the food business, including functional foodproducts. It is difficult to only rely on medicines and08

advances in medical treatment to expand ourhealthspan. That is why the care for presymptomatic diseases and prevention is important.
We will support the prolonging of people’s
healthspan by offering functional food products thatare developed with clear evidence of theireffectiveness, and a balanced, nutritious dietthrough food.
The world is paying close attention to Japan as wetackle the issue of a severely aging population.
China and other countries in Asia are also expected
to have large aging populations 20 years behindJapan. Therefore, we will make full use of ourexperience in Japan for other countries including
those in Asia in the future.

Connecting vision, strategies, and organizational structure
For the realization of our Management Vision 2030
and Business Area Vision, we will specify ourstrategic plans and build an organizational structureso that such strategies can be confidently carriedout. In order to “connect” our wide range ofbusinesses, we need to have close collaboration
between organizations within the Company. It is
crucial that organizations and employees are joined
together with a strong trust so they “connect” inunity.
Since its founding, Rohto has
followed a familial management
style in which each employee ishighly valued. Such management
style has encouraged many of ouremployees to be more loyal to theCompany and more supportive of
the Company and the community.
In addition, our Company has agreat DNA of “positive persistence,”“taking on challenges,” and “doing
what others won’t do” in our blood.
Our employees have tackled
extremely difficult challenges which
no one thinks they can do, with amindset “to do because it’sdifficult”. We have accumulated our

HEALTH VALUES REPORT 2019

experience through successes and failures fromsuch challenges.
Our corporate culture of taking on challenges is astrength that is not found in other companies, and it
has led to the development of each employee’s
independence and skills. Now, we will further
strengthen the teamwork and the relationships
between the divisions, based on each employee’s
individual abilities and skills. We will start to develop
a structure and procedures to promote teamwork
and collaboration among divisions and create anorganization where people have an affinity for one
another, a place in which everyone can build
genuine, trustworthy relationships. The main point is
to build an organization with strong roots and haveeach employee understand the Company’s vision.
This is my role as the president of the Company.
Our visions are shared so that we can all look in thesame direction and engage in active discussions
with our fellow employees. We will work hard
toward realizing these management and businessvisions.

Realizing the values of “ESH” to contribute to social health
By striving to “Connect for Well-being,” we willcontribute to creating a lifestyle of social healthwherein people can live happily. On the world stage,
the United Nations adopted “Sustainable
Development Goals (SDGs),” and ESG
management is being sought to promoteawareness of social values. As a company that
continues to devote itself to beauty and health, wewill take our own active approach in promoting“ESH” to realize the values in the areas of“Environment” and “Social,” all while maintaining thecore value of “Health” as our central pillar.
In the area of “Social,” roles that our Company
should play include rejuvenation of local
communities and rural regions, as well as support
for children of the future generation. As the overconcentration in the Tokyo area accelerates, I
believe that rejuvenating the local communities andrural regions prosperously and supporting thehealth and learning of the children with the future willcontribute to re-energizing the society as a whole. I
also believe that having people put down their roots
in local communities and regions and building
communities where children can live a healthy life
will lead to greater health and sustainability for theentire society.
In the area of “Environment,” as we introduced refill
pouches for cosmetics products ahead of othercompanies, we will continue moving forward withideas and methods to protect the earth’s health,such as replacing plastic bottles with bio-plastic
bottles. Consideration for the environment is now awell-recognized trait among our customers and insociety generally, and the awareness is only
spreading. We have developed our own uniqueenvironmental symbol which will be used on our
product packaging in the future.
Needless to say, sound corporate governance is
crucial to promote such ESH initiatives. In order torealize our Management Vision 2030, we will
enhance the effectiveness of the board of directors’
meeting, further strengthen the corporate functions,and maintain financial stability. We will offer ouractive commitment to social health and will keep
challenging ourselves to promote ESH values while
paying attention to being healthy and sound as acompany.
Our Company will continue to move beyond theboundaries of common sense and contribute to thehealth of people and society. We will realize
Management Vision 2030 “Connect for Well-being”,
by building strong organizational bonds within our
Company and promoting collaboration andcooperation with our partners by sharing our values.
We appreciate your continued long-term support
and guidance.

November 2019

President

HEALTH VALUES REPORT 201909

Management Vision 2030

ConnectforWell-being“Well-being” means you are both healthy physicallyBusiness Area Vision 2030
We deliver quality products and services in our focused areas of medicine, cosmetics and food. These
products and services are geared toward various phases of life, such as when one is healthy or dealing
with a pre-symptom disease or an actual diseases.

OTC Medicines (general drug products)

Ophthalmology Area
Cultivate the area ofophthalmology as leading
company of eye-care products
and quickly realize profitabilityof the new business

Aim to be a leading OTC
medicines company in Japan

Skincareand in good spirits. You smile at every stage of your life.

Regenerative Medicines
Create skincare products thatregenerate healthy skin byworking on foundational
functions of the skin

Rohto wishes people all over the world to feel

Commercialize innovative life
science technologies

the Well-being for a long time.
We will create innovations in many diverse areas,

Functional Foods

including medicines and skincare products,

Contract Development and Manufacturing Organization (CDMO*)

Develop food business basedon evidence and trust as ourthird pillar

and we will Connect them together.
To make it happen, we closely Connect our colleagues

Evolve into contractdevelopment and manufacturingorganization with uniquely
added development skills

and also organizations within the Company.
Furthermore, we will develop talent of our human resources
on a foundation of trust chains, and build a coherent,
unified organization that will further Connect to the Well-being of all people.

Areas that Rohto will pursue

OTC Medicines(general drug products)

Functional Foods

Self-medication

Contract Development
and Manufacturing
Organization (CDMO*)

Skincare─Connect for Well-being─

Diseases

Regenerative
Medicines

Pre-symptom diseases

Ophthalmology Area

HealthProfessional medication* CDMO：Contract Development Manufacturing Organization

10

HEALTH VALUES REPORT 201911

TopicTopi
cs

What does it mean to “connect” businesses?

Going over the industry
barriers and connecting
businesses
In order to accomplish the goals of the management vision for 2030, Rohto will develop active businesses in six business areas by having a vision for each area. We will also connect each business by climbingover industry barriers and collaborating and cooperating with our partners. We believe that growth opportunities appear when we reach across industries or between boundaries. We will act like an “amoeba”
so that we can move around freely among businesses, industries, and boundaries to create new synergy.

Regional
Contribution

Education
Ophthalmology
Area

Contract
Development andManufacturing
Organization

Regenerative
Medicines“Connect businesses and create new synergy”

Contents(CDMO)

OTC
Medicines(general drug
products)

SkincareExercise

DataCore businesses

Functional
Foods
Agriculture

12

Core
surrounding
businesses

DevicesBeyond corebusinesses

HEALTH VALUES REPORT 2019

Tourism

Jumping across national borders
and cultural barriers to connect
resources and knowledge fromeach region
Rohto has built a network covering more than 110 countries and regions
developing products and services that address people’s health aroundthe world.
In 1988, The Mentholatum Company became our affiliate, and sincethen, Rohto has been growing its overseas business. We have applied
our medicine and skincare technologies as well as our marketing
approach in Japan to other countries especially in Asia. We will continue
to take the same strategy in countries where explosive population
growth is expected, such as those in Africa. At the same time, we will look closely at the consumer
needs in each region, in addition to referencing the success story in Japan. We will connect to local
knowledge and ideas that are original to each region so that we can expand our businesses. One
example is “Hada Labo,” our main skincare brand developed in Japan. We keep the original productconcept but develop the product further to respond to local needs and deliver these products to ourcustomers worldwide, and as a result it has grown to be a global brand.
There are many types of people within the Rohto Group. We will continue to combine their knowledge torespond to the needs of people everywhere.

Connecting “food,” the sourceof health, from production todaily life of customers
The power of medicine is great, but true “health” is the absence ofnecessary medicines. Our Company is paying attention to types of “food”
that can be a source for making bodies strong enough to fight diseases
and stresses. We are exploring the possibilities of “food” while connecting
agricultural and food industries. At Yaeyama Farm on Ishigaki Island, weare linking livestock and agriculture to develop an ecological recycling
agricultural system. The Company is challenging “development of sixthorder industry,” which connects livestock and agriculture to foodprocessing, distribution and sales, so that we can offer safe, delicious
produce and food. Likewise, Hajimari-ya in Uda City, Nara Prefecture wascertified organic by JAS and is contributing to health through food.
Restaurant Shunkoku Shunsai, which opened in April of 2013 and isdirectly managed by the Company, uses food produced at Yaeyama Farm and Hajimari-ya. The restaurant isproviding menus that not only feature tasty dishes but also include dishes that are seasonal andaccommodating to customers’ dietary needs. We are connecting everyone’s active spirit every day throughfood.

HEALTH VALUES REPORT 201913

O u r Tr e a s u r e d E S H

Promoting longevity
to the world by connecting
through health.
“Health” is the core value of Rohto and is
an important key to facing current social issues andbuilding the social system of the future.
While Rohto provides “Health” through its products and services,
we also create our original values of“Social” and “Environment” from the point of view of health.
Rohto is connecting with the society through “Health”,
and by collaborating and cooperating with the people
surrounding us to promote ESH, we strive to realize
a society in which people can enjoy a long,

Rohto delivers“Health” to society

healthy, and happy life.

What is “ESH” for Rohto?
Rohto evolves by
upholding the values
it has created“ESH” for Rohto is the value of “Health” which is a core valuethat has been consistent since the company’s establishment,
and the value of “Social” and “Environment” created originallyfrom the point of view of health. For sustainable creation of values,
we will take the initiative with a long-term view.

14

HEALTH VALUES REPORT 2019

HEALTH VALUES REPORT 201915

Rohto’s Core Value – The Values of “Health”

S

H
E

ROHTO

Delivering Beauty and Health
All Over the World
Everyone wishes for “good health,” which is a source of happiness. Rohto defines “health” asbeing more than the avoidance of illness. Being healthy leads to one's family being healthy, andby extension, this radiance of health outspreads into society at large. We consider true “health”
as not just being about mental and physical aspects, but also contributing to society.
Since its founding, we have been developing variety of products including gastrointestinal
medicines, eye drops, and topical products such as Mentholatum Ointment. In recent years, wehave entered the field of beauty-related products, with leading product lines including “Obagi”
and “Hada Labo.” Furthermore, we have taken on new challenges in the food business for future
health and also in the advanced medical area of regenerative medicines. Through thesebusinesses, we are engaging in beauty and health from many different angles. We aredetermined to keep creating new, unique products and services that go beyond the boundaries
of common sense to deliver beauty and health to the world, with the hope of making every
individual and community healthier so that they don’t have to depend solely on medicine to stayhealthy.

The Power to Contribute to
the Future of Health
Since its founding, Rohto has dedicated itself to beauty and health ofpeople around the world, and we will continue courageously
challenging ourselves to move beyond the boundaries of common
sense and create the future of health.

Creating the future of health

Making proposals for the
future of healthResearch andDevelopment

2

P.18–191

Marketing and
Sales
P.20–213
Supporting the future of health

Manufacturing and Quality
P.22–23

16

HEALTH VALUES REPORT 2019

HEALTH VALUES REPORT 201917

Skincare That Emphasizes Functionality andComfort During Use

Rohto’s Core Value – The Values of “Health”

The Power to Contribute to the Future of Health

Our Company’s skincare business started with “Mentholatum.” At present, we are engaged in developing
functional cosmetics in which new ingredients and formulation technologies are utilized. We continuously
strive to research and develop formulas that are even more effective and is actively involved in the development of new products.

1

Stabilized dissolutionof 25% vitamin C

Creating the future of healthResearch and Development
With 120 years of experience and accumulated knowledge, we are conducting research anddevelopment to develop not only functional and effective products, but also focusing on a
comfortable product feel so that customers wish to continue to use them for a long time.
Eye Drops
Market Share*

Rohto’s Eye Care, Staying on Top
The Company’s first eye drops product was “Rohto Eye Drops,” which waslaunched in 1909. We have led the eye care market by continuing to further
develop new technologies and products to respond to eye troubles thatchange with time and the lifestyle shifts. We will continue to offer productsthat meet the customer needs which evolve as time passes.

18

41.9 %FY2018
V Rohto PREMIUM –Contains Highest Numberof Active Ingredientsin Eye Drops in Japan

12 ingredients* INTAGE SRI eye drops category: Accumulated JPY sales share for the period of April 2018 to March 2019

Contains the highest number ofactive ingredients under the OTC
ophthalmic medicines marketing
authorization standards

1909

2016

1987

1987

1995

2008

Rohto Eye Drops

Rohto Zi

Alguard

Rohto C Cube

Rohto V11

V Rohto PREMIUM

The product wasdeveloped to treat
epidemic eye diseases.
In 1931, we introduced
an innovative eye drops
container combining abottle and a dropper for
the first time in Japan,
and Rohto’s eye drops
became a top brand.

The product became
popular among youths,
with a refreshing andstrong cooling sensation
and a stylish squarebottle. It led the eye
drops market, targeting
younger generation
who had tired eyes fromusing computers orvideo games.

We created a newmarket with these eye
drops designed to treat
pollen allergies. In 2009,
we introduced new eye
drops to treat allergies
that could be usedwhile wearing contactlenses for the first timein Japan.

This is a brand thatprovides comfort for
those who wear contactlenses. The number ofcontact lens users has
been increasing, andthe products help toreduce the discomfort
from wearing contactlenses for a long period.

The product contains
three anti-inflammatory
ingredients to preventthe inflammation
caused by overusedeyes. A total of 11
active ingredientsare contained in theformula and have agood balance.

The product contains
the highest number ofactive ingredients under
the OTC ophthalmic
medicines marketing
authorization standards
in Japan, with 12 active
ingredients. It is theresult of the research
we have conducted on
accumulated fatigue ofthe eyes.

HEALTH VALUES REPORT 2019

Vitamin C

25%
In order to dissolve 25%
L-ascorbic acid, it is said thatthe temperature of the solution needs to behigher than 40°C. Even if it is dissolved, there is
still the issue of crystallization when the solution
is cooled. To resolve this issue, we took thefollowing approaches.
・Search for ingredients that can promote
the solubilization of L-ascorbic acid

As a result, we succeeded in the solubilizationand stabilization of highly concentrated vitamin C
solutions. We will continue with our research on
the stabilization of products containing vitamin C
and its effectiveness.

Obtaining and Use ofIntellectual Property
Our Company ranked second among Japanesecompanies on the 2018 Ranking of Capability to
Prevent Other Companies from Obtaining Patent
Rights in the Pharmaceutical Industry. This meansthat we are an advanced company who has filed
a large number of patents related to prior art that
could be defensive factors when other companies
try to obtain patent rights.

Uniqueness

Aggressivenesscompounding of

new ceramide*
Ceramide has the importantrole of keeping the skin fromdrying and protecting it from external irritations.
Rohto was the first company to successfully
compound new ceramide to cosmetics products,
and we also found that ceramide compounds*2
have the effect of enhancing the barrier functionof the skin. We will continue the ceramide
research and product development to find further
1

applications for dry skin and sensitive skin.

・Search for ingredients that can control
the crystallization of L-ascorbic acid

InnovativenessSuccessful Compoundingof New Ceramide*1
World-firstto Cosmetics
Successful*1 Dihydroxy lignocelloyl phytosphingosine**2 Compound of dihydroxy lignocelloyl phytosphingosine
and ceramide 6 II

* Structure of dihydroxy lignocelloyl phytosphingosine

2018 Ranking of Capability to
Prevent Other Companies from
Obtaining Patent Rights in the
Pharmaceutical Industry

2 nd

among
Japanesecompanies

Name of Company

Number ofReferenced Patents

1

NOVARTIS（Switzerland）

304

2

F. HOFFMANN LA ROCHE（Switzerland）

276

3

PFIZER（U.S.A.）

170

4

MERCK SHARP & DOHME（U.S.A.）

167

5

TAKEDA PHARMACEUTICAL CO.（Japan）

166

6

GENENTECH（U.S.A.）

155

13

GLAXO GROUP（England）

99

13

ROHTO PHARMACEUTICAL（Japan）

99

15

BRISTOL-MYERS SQUIBB（U.S.A.）

98

16

ELI LILLY（U.S.A.）

91

17

TAISHO PHARMACEUTICAL（Japan）

89

18

ASTELLAS PHARMA（Japan）

87

Source: research by Patent Result Co., Ltd. The spelling of thecompanies’ names is based on the names published by Patent
Results Co., Ltd.

HEALTH VALUES REPORT 201919

Exploring New Markets While Catering to andSupporting Women

Rohto’s Core Value – The Values of “Health”

The Power to Contribute to the Future of HealthWith the aim of supporting self-medication and contributing to the health of
Pioneer of Test Kits
society, we have been developing pregnancy test kits and ovulation prediction
Sincekits. In addition to test kits, we have launched products including “Exiv” anSathlete’s foot remedy targeted towards women, “Refrea” which was developed
through the research of odor care and development of new technologies, and“Deoco” addressing changes in female body odor. We focused on branding, packaging design, andproduct specifications so that female consumers will know that the products are designed especially forthem, and as a result, we were successful in creating a new market targeted specifically towards women.

1980

2

Making proposals for the Future of HealthMarketing and Sales
There is a reason why people have loved our products for a long time. We look closely at thepotential needs of our customers with the motto “uncommon can be common”, and we will
open new markets. We will keep responding to customers’ expectations

Pregnancy Test Kit “Checker”(Launched in 1985)

Ovulation Prediction Kit “Dotest
LHa”(Launched in 2016)

Long-selling and Successful Products
V-Rohto
Sold for 55 years and counting

1964

20

Hada Labo
Number 1 for 12
consecutive years

2012

HEALTH VALUES REPORT 2019

Long-selling
Products

23 Brands
Brands sold for more than
10 years with FY2018 salesof one billion yen or higher

Long-selling Brands
11

Deoco

Number ofLong-selling and Successful Products Make
“Total Care” Possible*Share of the Hada Labo line among the total number of cosmetic lotion units sold.
INTAGE SRI cosmetic lotion market: number of unit sales from April 2007 to March 2019

RefreaSharing “Surprise” and “Happiness” with
“Happy Surprise Voices”

with our one-to-one communication skills.

“V-Rohto” has been sold for 55 years since its launch in 1964. Now updated tothe current “New V-Rohto,” the product is still being used by many customers.
“Hada Labo,” which was introduced to the market in 2004, has held the number
one spot (for the number of units sold in the cosmetic lotion category) for 12
consecutive years. We developed “refill pouches” for Hada Labo products at an
early stage, and the total accumulated sales for the brand has reached 145
billion Japanese yen. Such long-selling and successful products make it possible
for the Company to offer “total care” to our customers.

Exiv

12
1

2
5
3

Example of a “Happy
Surprise Voices”
I knew that a baby would be a gift fromabove, but I was feeling very stressedwith our attempts to conceive. Thank you
to Rohto for understanding my feelings
and offering support. I want to thank youwholeheartedly. (Product used: Dotest
LHa)

In 1949, we started enclosing ques“Happy Surprise Voices”
tionnaire cards in our products for the
first time in Japan. At the time, we reFY2018
ceived 256 cards back from our customers in only two days. Now, we hearfrom more than 1,000 customers a year. We greatly appreciate
all the comments from our customers, feel encouraged towork harder, and utilize them for new product planning.

1,191

 tanding Close By and SupportingS
Customers with Total Healthcare
As an OTC manufacturer, we can promote “self-medication.” We have extensive
product lines, so our customers can come across our products anytime and anywhere, whether at a convenience store, a supermarket, a drug store, or a department store.

6

10 to 19
years sincelaunch20 years ormore sincelaunch5 billion yen or more
1 billion yen or more

3 billion yen or more

More than100

ThousandFY2018

Examples of Approaches at the Points of Sale
Creating a detailed“point of purchase”

6

Points of Sale(in Japan)

We provide across-the-board
support from making proposals
to retail headquarters toproviding information to stores,
and we also provide
maintenance and sales support
for each “point of purchase.”

HEALTH VALUES REPORT 2019

“Product development”
applied to eachsales channel
In addition to the direct countersales in department stores, we
put effort into online business tobuild more direct relationships
with our customers.

21

Working on Improving Manufacturing Sites
Always with a Fresh Mind

Rohto’s Core Value – The Values of “Health”

The Power to Contribute to the Future of HealthWith the aim to improve QCD (Quality, Cost, Delivery), we formed a group called “Kaisen Tai(Improvement Promotion Team)” within our manufacturing sites in 2005 in order to maintain and continue
the cycle of improvement. We named the group with the hope of “working on improvements always witha fresh mind.” The basic idea is “we will try and we will change” anything that will lead to an improvement
in QCD. All personnel are striving with a strong will to solve issues using their findings.

3

Rohto’s Three Pillars for “Kaisen” Activities

Supporting the future of health

Manufacturing and Quality

Looking for Findings
Develop an eye for spotting an issue
5S (Sort, Set, Shine, Standardize, Sustain) Activities
Create an environment where issues can be spotted easily
Projects with Themes
Learn methods to solve problems and increase the number of
personnel who can solve issues

We are supporting the future of health with our manufacturing structure

The Activities of the Improvement Promotion Teamthat assures safety and quality and with spontaneous proposals (findings) from our employees
working at the forefront of manufacturing sites.
TOPICSManagement Is Committed to Quality
Assurance Through the Company
Quality System
We have a single organization to cover all of our products, wherein those in three roles(General Marketing Manager, Quality Assurance Manager, and Safety Management
Supervisor) liaise to manage the system. Based on this structure, we have built asystem in which the entire Company including not only the manufacturing and quality
sections, but also the management commit themselves to quality and safety.

Quality
Management System

Three
Role
Structure

Rohto’s Quality System (One company-wide system)
Top Management (President / Director)

Purchasing Section

Regulatory Section

R&D Section
Marketing Section

22

Corporate QA and
Safety Vigilance
Division

General Marketing Manager

Quality AssuranceManagerMarketingAuthorization(Three Roles)

Safety Management
Supervisor

The Company is engaged not only in the area of cures for diseases but also in the area of regenerative medicine,which can lead to preventive care in the future. We established the Regenerative Medicine Research & Planning
Division in 2013. We focus on the “stem cell,” which is the source of the 60 trillion cells that make up our bodies,
and we are working together with research institutes and universities on our research.
We were able to start working on regenerative medicine, because we could utilize our “technologies for handlingcells” that we gained through the research and development of skincare products as well as “manufacturing
technologies of sterile products” that we gained through the mass-production of eye drops. We became the firstcompany in Japan to successfully develop “automated cultivation equipment” that stably produces cells with thesame level of quality. In 2016, we obtained a “cell processing license” and are working toward success.
In 2017, we started the first clinical trial in Japan with Niigata University for treatment of cirrhosis of the liver. We
also signed a licensing contract with Shionogi & Company, Ltd. The knowledge we gained through ourregenerative medicine research is being utilized fully in product development in our existing businesses, such aseye care and skincare.

Overseas AffiliatedCompanies

Manufacturing

Research and Development

Call Center

Manufacturing of
high-quality medicines

Performance offundamental research

Manufacturing incompliance with GCTP
iManufacturing
technologies for sterile
products such as eye
drops
iAutomatedmanufacturing lines

Cell cultivation
technology
Skin regeneration
technology
Genomic researchPre-clinical trials

Sales Section

Osaka Plant

Ueno Plant

Regenerative
Medicine Plant

Distribution
Authorization (GDP)

Quality Section

Quality Section

Quality Section

Distribution Center

Manufacturing
Section (Plant)

Manufacturing
Section (Plant)

Manufacturing
Section (Plant)

HEALTH VALUES REPORT 2019

Challenge for Regenerative Medicine

Order Receiving Section

Press conference before
the start of the clinical
trial with Niigata
University

Commercialization
Automated cultivation equipment successfully
developed for the first time in JapanEye careHEALTH VALUES REPORT 2019

SkincareOral care

Hair re-growth products

23

The Value of “Social” – Created by Us from the Perspective of HealthSupporting both Japan’s and the“World’s Sight”

Number of people
who received cataract
surgeries

1,024
In FY2018

Going Beyond Just BusinessS

In a program called “Social Partners” whichH

started in 2016, we engage in supportive
activities for the treatment of cataracts with ourEbusiness partners supporting our efforts,
donating a portion of our eye drops sales tofoundations that are engaged in supporting
ophthalmologic care in regions including Asia
and Africa.

ROHTO



Incorporated NPO, Japan Tanzania Eye
Medical Support Team
Tanzania has a shortage of ophthalmologists andfunding to provide adequate eye treatment for its
people. The team started its ophthalmologic support
efforts in 2007. They help the local development of
ophthalmology care by providing technical assistanceon cataract surgeries, supplying medical equipment
and medicines which are in short supply, and providing
assistance regarding themanagement of equipment
and medicine. In addition,
the team provides training
opportunities for Tanzanian
doctors in Japan.

Giving the “StrengthString to See” to More People with Intraocular Lenses
There are still so many things we can do for the world
and for other people.
Rohto strongly believes in this,and we are determined to contribute to making
the world and its people healthier and more wholesome.

PT. Rohto Laboratories Indonesia was established in 1996 as thefirst company in the ASEAN region to manufacture and sell
intraocular lenses (IOLs), which are used for cataract surgeries. At
that time, it was a challenge to get local ophthalmologists tounderstand the quality of our IOLs, but we managed to overcome
this issue, and we now sell our IOLs in 13 countries includingIndonesia. IOLs can reduce the number of people with loss ofvision caused by cataracts, and it is an important business for us
as it leads to social contribution. We are now actively involved
with the IOL business, occasionally offering free IOLs.

Number of Customer
Gathering Participants

Making a Habit of “Taking Good Care of
the Eyes” with Customers:
In 1996, Rohto opened an office in Vietnam, which was the first country inwhich we started an overseas business from scratch. At the time, it was
not customary for Vietnamese people to use eye drops regularly. Therefore,
we promoted a message about how important one’s eyes are and offered
free eye exams at schools. We also introduced a new custom of using eye
drops for tired eyes. Starting in 2006, we began holding “Customer
Gathering” events every weekend to hear opinions directly from customers,
and those opinions are utilized in our new product development.
24

HEALTH VALUES REPORT 2019

More than
total

8,500

2006 to present

Providing the “Joy of Seeing” in Rural Areas
In 2016, the “Amazonian Cataract Project” wasstarted to help indigenous Brazilian communities

Number of Customer
Gathering Participants

6,351

2016 to present

where people could not easily receive eye caretreatments. Under this project, people canreceive ophthalmology consultations and thelike. Ophthalmos Rohto has been donating
instruments and products for cataract surgeries
and sending volunteer staff to help with the
project.

HEALTH VALUES REPORT 201925

The Value of “Social” – Created by Us from the Perspective of HealthSupporting the Health and Learning of
the Next Generation
Rohto is involved with numerous activities in the hopes of offering support
aimed at improving the health and learning of the children who will carry our
future.

Number of On-site
Classes

21

ROHTO AWARD

In 2007, Rohto, as a pharmaceutical manufacturer, started the “Medicine Education Class at Schools”
program in order to educate teachers and children about medicine and promote a healthy lifestyle. Our
employees visit schools to give classes on how to choose and use medicine. In addition to facilitating visitsby these volunteer employees, we develop materials for teachers that can be used for the “Proper Use of
Medicine” unit in physical education courses at middle schools.
健康と自分の生活の関係を考える
何気なく使用している薬にはさまざまな種類があることに気づかせ、それぞれに効き方や特徴が違うことを知る

3．薬についてどれくらい正しい知識をもっているのだろう？

P.3のwork2に絡めて
説明する

check
2

「内服薬」
と
「外用薬」
に分類してみよう

しぜんちゆりょく

しぜんちゆりょく

たよ自然治癒力とは、病気やけがなどを薬に頼らずに回復させることのてんがんざい

ざい

ざ

② 点眼剤

① カプセル剤

ざい

しっぷ

③ 坐剤

じょうざい

⑤ 錠剤

④ 湿布

できる、
人や動物が生まれながらにしてもっている力です。
かぜ

ね

かぜ

しぜんちゆりょく

しぜんちゆりょく

しかし、自然治癒力だけではどうすることもできない場合もあり、そのような時には薬が必要となります。

内服薬 ：を高めるために、十分な睡眠、適度な運動、バランスのよい食事、規則

内服薬にチェック

ふだん

しぜんちゆりょく

てんび ざい⑥ 粉薬

なんこうざい

⑦ 点鼻剤

⑧ 軟膏剤

ざい

⑨ シロップ剤

生徒記入例

何よりも普段から健康管理が大切です。病気やけがを防ぎ自然治癒力からのんで、成分が胃や腸などから吸収される薬

口

すいみん

正しい生活を心がけましょう。
組を入れよう
てんがんざいざい① カプセル剤

② 点眼剤
じょうざい

しっぷ

⑤ 錠剤

てんび ざい

⑧ 軟膏剤

④ 湿布

前

なんこうざい

⑦ 点鼻剤
外用薬

： 皮膚

外用薬にチェック
ざい① カプセル剤

Workbook for Teachersざい⑨ シロップ剤の表面や粘膜（口や目、鼻などの中）などに使用する薬

てんがんざい

② 点眼剤
じょうざい

⑤ 錠剤

⑧ 軟膏剤

⑦ 点鼻剤

ざい

⑥ 粉薬

を入れよう

しっぷ

てんび ざい

④ 湿布

ざ

③ 坐剤

ねんまく

なんこうざい

ざ

ざい

③ 坐剤
⑥ 粉薬
ざい

⑨ シロップ剤

04

Number ofChild Visitors

KidZania Koshien

333,2812009 to 2018

Based on our desire for children to “think on their05

Yasukazu Murakami Senobic Dream
Table Tennis Classes / Rohto
Pharmaceutical Cup・National
Hopes Table Tennis Tournamentestablished in 2009. At present, Rohto Women’s

ophthalmology research in Japan. Awards are

Health Science Research Award is given to

granted to young ophthalmology researchers who

researchers who demonstrate high achievement indemonstrate high achievement

the research fields of pregnancy, childbirth, andin both fundamental research

women’s health-spans for the purpose of thea n d c l i n i c a l re s e a rc h a t afurther development and progress of obstetrics andcollege/university or equivalent

gynecology research in Japan.

Geriatric Dermatology Research
Fund: Rohto Award

Dermatological Research Fund
(Endowment by Rohto Pharmaceutical)

The fund was established in 2007 with the

The fund was established in 2008 with the purpose

purpose of supporting a wide range ofof contributing to progress in the field offundamental and clinical surveys and research indermatology. The Company supports the early

geriatric dermatology. This is the only award

stages of research and young researchers, which

offered by the Japanese Association of Geriatricleads to the future development of dermatology.

Dermatology Research.

Rohto Employees Actively Contributing to Society
as Individuals

own, be diverse, and create value for products”

Rohto holds table tennis classes in collaboration withand to take an interest in science through research

Mr. Yasukazu Murakami (the former coach of theand development activities, we are providing fun

Japanese women’s national table tennis team and thelearning experiences for children at KidZania

current coach of the Nippon Life Insurance Company’s

Koshien, which has a pavilion called the “Medicine

women’s table tennis team) and is a special sponsor of

Research Lab.”

the historical table tennis tour nament “Rohto* Rohto is an official sponsor of KidZania Koshien.

Pharmaceutical Cup National Hopes Table Tennis

After the Great East Japan Earthquake of March 2011, Rohto and two

The fund is used to support

Tournament to support children's healthy bodybuilding.”

other companies collaborated to establish a scholarship fund to helpsocial welfare and education

children who lost parents in the disaster attain further education aftere v e r y y e a r. E m p l o y e e

graduating from high school. The number of companies backing thiscontributions are matched bycause is increasing every year, and support is crossing boundaries in a

the Company for this fund.

Science Castle
Science Castle is an academic conference
designed for middle school and high school
researchers. The conference has a goal of training
young people to identify issues on their own andwork toward solving them. We promote middle
school and high school students who will support
the future of science technologies in Japan.

26

Society for Women’s Health Science Research was

purpose of further developing and progressing

しょうじょうに治っていく経験をしたことがあると思います。それが自然治癒力です。

年

This award was established in 1995 with the

例えば風邪をひいた時、食事（栄養）をしっかりとったり、温かくして寝たりしていると、風邪の症状が治まってきたり、けがをした時に自然

名

Rohto Women’s Health Science Research Award

research institute.

自然に病気を治す力（自然治癒力）と薬の関係

教員用ワークブック

179 total

As of October 2019

Rohto offers support to women and young researchers for their excellent research in order to realize ahealthier and more affluent society.

times

2014 to 2018

Medicine Education Class at Schools

1

Number of Researchers
Supported

Helping to Develop the Medical
Industry in JapanHEALTH VALUES REPORT 2019

As we are all part of our society, we believe ingenuinely making contributions, and we havesocial contribution activities that ouremployees can participate in.

The MICHINOKU Future Fund

Number of Children Who
Have Received
Scholarships811

As of October 2019

Karugamo Fundwide range of industries. We willcontinue to offer this support for a totalof approximately 25 years until thechildren who were in mother’s body at
the time of the disaster will complete
their education.

HEALTH VALUES REPORT 201927

The Value of “Environment” – Created by Us from the Perspective of Health

Considering the Environment from our Employees’ Perspectives
In our project “ARK*2003” involving volunteer employees, we
promoted various ideas for the Company and executed activities, suchas using hybrid cars, obtaining an ISO 14001 certificate, and installing
solar panels on the roof of the Company’s headquarters. These wereoriginal ideas proposed by individual employees participating in the
project. As of today, most of the company cars used for employees’
sales activities are hybrid cars, and electricity generated by solar
panels is being effectively utilized at our manufacturing sites.

S

H*ARK: A (Ashita: tomorrow), R (Rohto) and K (Kangaeru: think about) Please see page 33 for more details on the ARK Project.

E“Hada Labo,” A Pioneer in Cosmetics Refill Package“Refill Pouches” for cosmetic lotions are common now, but “Hada Labo” wasthe first brand to offer such packaging to the market for cosmetic products.
With the Hada Labo concept of “thoroughly get rid of the unnecessary,” weintroduced resource-saving and economical plastic bottles and refill pouches
for our skincare brand for the first time with Hada Labo products. We willcontinue to pay special attention to eco-friendliness in the manufacturing anddevelopment of our products.

ROHTO

Original Environmental Symbol on Rohto’s Products
In recent years, society is becoming increasingly aware of environmental
considerations, and many of our customers have become moreenvironmentally conscious. To embrace this, we developed an original “R・eco symbol”, which represents our hopes for further increasing public
interest in the environment. The symbol was developed mainly by themembers in the product planning section, and the symbol will soon be
printed on Rohto products that are environmentally friendly, such as Hada
Labo.

The health of the earth is crucial for personal
health and longevity.
Rohto will strive today, tomorrow, and in the future
to follow our unique endeavors in constantconsideration of the environment.

Rohto’sView of theEnvironment

28

We strive to challenge ourselves in the field of “healthspans.” Everyone wishes for “good health,” which is asource of happiness. In Rohto’s view, “health” meansthat each person is healthy both physically andmentally. This view of health also extends to the healthand well-being of society and the earth. The health ofthe earth is crucial for its people to live healthily.
Therefore, we are determined to promote
environmentally sustainable activities for our future.
We desire both healthy people and a healthy earth.

HEALTH VALUES REPORT 2019

Building A New Plant That Is
Friendly to People and the Environment
The Ueno Technocenter in Mie Prefecture is a hub for manufacturing,
quality control, and distribution not only throughout Japan but also all
over the world. With our policy of efficiently manufacturing high-quality
medicine and cosmetics, our “Kaisen activities” have been in effectsince 2005. In the new plant which is expected to start operation in
2021, we will pay further attention to the environment as we aim to
make it a kinder facility for our future.
NEVER SAY NEVER
for the Healthy Earth～Challenging the Earth’s Health-span～

Points of Focus in the New Plant
Reduce energy consumption by 20% compared to our existing plants by using renewableenergy and investing in highly efficient and energy-saving facilities and equipment.
Realize a “smart factory” that reduces human labor hours by using collaborative
robots and network cameras.

HEALTH VALUES REPORT 201929

1899: Shintendo Yamada Anmin Pharmacy founded in Osaka. “Ikatsu” gastrointestinal medicine launched.
1909: “Rohto Eye Drops” launched.
1931: “Rohto Eye Drops” launched in a new type of container with an integrated dropper, causing a major revolution in the eye drops market.

A Corporate Culture That
Uniquely Rohto

1949: Rohto Pharmaceutical Co., Ltd. established.
1954: “Siron” gastrointestinal medicine launched.
1959: Current corporate headquarters and plant completed in Ikuno-ku, Osaka City. Fuse Plant and others moved to the new location.
1961: Company listed in the Second Section of the Osaka Stock Exchange.
1962: Company listed in the Second Section of the Tokyo Stock Exchange.

Independence That Movesan Organization

1964: Company listed in the First Section of both the Tokyo Stock Exchange and the Osaka Stock Exchanges.
1965: Kiro Yamada, the president of the Company at the time, set up “Yamada Swimming Club” with his personal assets for revitalizing Japaneseswimming, and the club trained a swimmer who later won a gold medal at the 1972 Munich Summer Olympics.
1975: Skincare business started.
Exclusive trademark license acquired from The Mentholatum Company (U.S.A.).
Topical medicine “Mentholatum Ointment” and quasi-drug “Mentholatum Medicated Lip” launched.
Business expanded to topical products, making the Mentholatum brand the third pillar.

P.32–33

1985: Pregnancy test kit “Checker” launched in pharmacies.
Advocated for maternal protection and continued to be vocal about the necessity of the commercial availability of pregnancy test kits,
and the product was sold in pharmacies for the first time in Japan.
1988: The Mentholatum Company acquired.
1991: “Mentholatum (China) Pharmaceuticals Company Limited” established as a locally incorporated company in China.
1997: “Rohto-Mentholatum (Vietnam) Co., Ltd.” established as a locally incorporated company in Vietnam.

Rohto’s corporate culture that
we have built and will continue to nurture
Our corporate culture, which is backed by 120 years of the Company’s history, is our strength.
It is a major source of value creation under Rohto’s core value of “Health.”
We will keep developing our corporate culture to lead us to the future.

Flexibility That
Is Unfazed by Change
2001: “Obagi” functional cosmetics launched.
A groundbreaking boom for vitamin C, which was the pioneerof functional cosmetics, was triggered.

P.34–35

Diversity in Each
Individual Thrives
P.36–37

2004: “Hada Labo” launched.
2011: “Earthquake Reconstruction Support Office” established.
“The MICHINOKU Future Fund” established to offer scholarships to children who lost parents
in the Great East Japan Earthquake.
2013: Expansion into the food and regenerative medicine businesses.
“Shunkoku Shunsai” opened in the Grand Front Osaka building.
Regenerative Medicine Research & Planning Division established.
2016: New corporate identity “Never Say Never” established.
June 10 2017 declared “Rohto’s Day.”
It is a “Health Declaration Day” where we declare our endeavors for better health.

The phrase “Never Say Never” represents the Company’s great DNA and serves
as our declaration for the future which we will be challenging. In order to makethe world a healthier place, we will look ahead clearly to the path that we should
be taking. And, despite any difficulties, we will keep challenging ourselves to go
forward and move beyond the boundaries of common sense. At the same time,
we will continue to nurture our unique and cherished corporate culture.

2019: Joined the “Consortium of Corporations for Tobacco Control.”Aiming to reach a zero smoking rate by joining hands with other companies.

30

HEALTH VALUES REPORT 2019

HEALTH VALUES REPORT 201931

Rohto’s corporate culture that we have built and will continue to nurture

A Corporate Culture
That Is Uniquely Rohto

Proposals by Employees for
the Future of Rohto

Number of Project
Participants

267

total

ARK* Project (since 2003) and Asutsuku Project (since 2018)

As of March 2019

The ARK Project, in which employees nominate themselves to participate, started in2003 as a project for thinking about the future of Rohto. In this project, employees work on important
assignments related to the environment, social contribution, human affairs, and health management, all tomake the future of Rohto better. To date, the project has proposed many ideas that have been executed,
including the use of company hybrid cars, medicine education, and personnel management strategies including
second jobs.
* ARK: stands for A (Ashita: tomorrow), R (Rohto) and K (Kangaeru: think about)

Independence That Movesan Organization

Asutsuku Project 2018
All the employees worked together to come up with 100
ideas to make Rohto’s tomorrow (future) better, and three of
those ideas were chosen as main themes for the project
which started in 2018. Many innovative ideas, including an
intra-company social media platform to promote better
communication, are already being implemented.
Three Main Themes of the Asutsuku Project
Visualization and distributionof information

Rohto’s Culture of“Raising Our Own Hands”
As a company, we believe that it is important to develop “independent people” who cancontribute to society. In the Company’s Seven Pledges, it is stated “our people are ourgreatest asset. Our hard working culture, spirit of close cooperation, determination,
passion, and leadership provide the fuel that drives the company.” We encourage our
employees to raise their own hands and for them to be independent and become“professionals” who continuously grow as people. Promotions for a new post, internal
department transfers, and participation in projects all start with raising one’s hands, andthis also leads to motivation in everyone’s work.

Promotion of work-stylereform

Proposals for education andtraining programs

Going Beyond “Sections” and “Company”
Boundaries
In-house double job
In this program, a portion ofan employee’s working
hours is spent in a different
section to improve the qualityof his or her work and topromote developmentof the individual.

External challenge work
Number of In-house
Double Job Participants

70

total

As of March 2019

This is a program for
employees who believe theirregular jobs are important but
also want to spend some of
their time contributing to theircommunities. Through thisprogram, we will develop
independent and selfsufficient individuals.

Number ofApplicants for External
Challenge Work84

As of March 2019

To Develop Truly Independent Employees

Percentage of employees whoare proud of their work and role82%

Source: 2017 In-house survey

Deputy Division Manager,
General Affairs and Human
Resources Division

Akiko Yamamoto

32

HEALTH VALUES REPORT 2019

We believe that an important factor of personal development is having multiple
opportunities to grow. We thought the Company needed to give our employees achance to face a multitude of possibilities. That is why we introduced new
programs such as the in-house double job and external challenge work. When an
employee takes advantage of the in-house double job program, he or she is not at
his or her regular job full-time. As a result, some employees have commented thatboth the employees who participated in the program and also those around them
have developed themselves for the better. There are many interesting effects thathave started to appear from the program. As this kind of diverse way of working
spreads, the work styles of all our employees will eventually change, and webelieve that is the moment we will realize true independence for our employees.

HEALTH VALUES REPORT 201933

Rohto’s corporate culture that we have built and will continue to nurture

Creating a Culture of Recognizing One
Another as a Professionals

A Corporate Culture
That Is Uniquely Rohto

Our efforts to introduce a culture of recognizing each other as professionals started in 1994. To encourage
better communications among employees with different positions and working experience, we removed walls
and partitions in offices, and all employees started to call each other by his or her name and “san” instead of
calling each other by their work title. In 2005, to make the office atmosphere even more light and airy, we
introduced the “Rohto Name” system, where each employee selects his or her casual Rohto nickname and iscalled by that nickname regardless of position or working experience.

Product Development Through Open Innovation Inside the Company

Flexibility That Is
Unfazed by Change
Rohto Is Constantly Changing Beyond
the Boundaries of Common Sense
Rohto started its business by from producing gastrointestinal medicines and eye drops
to treat epidemic diseases, and we have grown our business by developing untappedareas where other companies had not existed. We followed our mottoes of “doing what
others won’t do” and “to do because they are difficult,” and we continued moving
forward through many changes. We believe that our flexibility has led to our current“strength.”

We launched “Mentholatum Hand Veil Beauty Premium North Moist” in 2018, which is a productdeveloped through a collaboration between the R&D section and the Sales Division. During the“Open Lab” held by R&D, which exhibited seeds for new product development, the Sales
Division had an opportunity to discuss new products with R&D. Through the discussion, wewere able to develop a product which matched the local needs of an extremely cold area of
Hokkaido. Our employees in the Sales Division working in the area proposed it as a new
product, and now, our customers enjoy this new Hokkaido-exclusive product. This is a great
example of our strength, where we are flexible in taking on different opinions and perspectives.

“Kaisen Activity” Starts with Changing
Day-to-day WorkOne“Kaisen activities” is based on thefundamental motto that “we try every
idea that is proposed.” Even if theidea is small, experiencing “a problem
being solved with my own idea” raises
everyone’s motivation towards their work step by step. The firststep toward having an independent mind is to discard the idea that“someone will do it”, and to have the will to “do it voluntarily.”

Aspirations of
the Improvement
Promotion Team

Please also see page 23 for more details on the Improvement
Promotion Team (Kaisen Tai).

Numberof Proposals for
Findings

Ueno Plant Manager
and Team Managerof the Improvement
Promotion Team (Kaisentai)

864

per month

FY2018Hiroyuki Tanaka

Rohto’s Changes and Challenges
Changes in Sales by Business Category (Consolidated)
Eye care
41.8%

Internal Medicine
11.0%

Other
6.4%
Internal Medicine
17.7%

FY2000FY2018Skincare34.1%

A Challenge for Unprecedented New Medical Treatment

The Pursuit of Health through the Everyday Diet

Eye care
21.5%

Skincare
64.0%

HEALTH VALUES REPORT 2019

Rohto × Food

Other
3.5%

Since the launch of “Obagi” functional cosmetics in 2001, we expanded our skincare business significantly. As a result,
our business structure has dramatically changed.

34

Rohto × Regenerative Medicines

With our belief that regenerative medicine will not
only treat diseases but also provide preventive
medical care for the future, the Regenerative
Medicine Research & Planning Division wasestablished in 2013. Our challenge in the area of
this new medical treatment has already begun.

True health means there is no need for medicine.
Food is the source of building bodies that arestrong enough to fight diseases and stresses. We
are going further with our exploration of “health”
beyond just “medicine.”

HEALTH VALUES REPORT 201935

Rohto’s corporate culture that we have built and will continue to nurture

A Corporate Culture
That Is Uniquely Rohto

Diversity in Each
Individual Thrives
Taking root and Facing the World
Rohto has built a network covering more than 110 countries and regions of the world,
including Europe, the U.S., Asia, and Africa. Each region or country has its own needs
and regulations, so we cater to the local people by offering products that they desire ineach country. Our research scientists from overseas who are working at Rohto in Japan
assume the important role of being a bridge between the Company and local people infaraway places. They take the skills gained in Japan and utilize them in their local region
or country and make a positive contribution to the world. In Japan, our female
employees and employees who joined Rohto from other companies are working actively,
demonstrating their diverse views within the Company. Through such endeavors, we
strive to keep changing for the better.

Group Network

110
More Than

Global Human Resources Connect
Organically and Make Contributions
to the Future
In order for the Rohto Group to respond to
the needs of people around the world,
researchers in different countries and regionswith different backgrounds need to haveconstructive discussions and work together
on research and development.
We systematically hire researchers fromoverseas, and at present, about 15% of ourresearchers (excluding administrative
employees) are from overseas.

Percentage of
Researchers Who Are
Foreign Nationals

15

Approx.

%(11 Countries)
As of December 2018

Comment from our Researcher
from Overseas

I value the communication withvarious departments. I share myknowledge and skills with the local
staff members in other countries,
which helps with timely productdevelopment and enhances theirbasic research skills.

Basic Research
Development Division

Sendy Junedi(From Indonesia)

Making a Work Environment Where
Both Women and Men Can Thrive
The ratio of female employees at Rohto is currently about 60%. Our efforts to provide awork environment where everyone can thrive regardless of their gender started a long timeago. We strive to make an atmosphere which reflects the many different perspectives ofour employees and considers people’s health.

A Work Environment Where Abilities Are
Demonstrated Regardless of Genderny systDirector
Division Manager, ProductMarketing Division

Masako Rikiishi

In our Company, there are many female
employees who are thriving in their work. We
have not introduced any special policy topromote so-called female advancement, and I
think that the reason why female employees
thrive here regardless is that the Company
thinks it is only natural that anyone can be
successful regardless of their gender. We havebeen actively hiring female workers, and these
employees see their female seniors thrive. As
a result, we have many female employees
who are successful with their careers in manydifferent fields.

Male toFemale Ratio

4:6

As of March 2019

Evolution ThroughInterweaving
We believe that it is important that different diverse
views are interwoven in order to create new,unprecedented products. We continue to evolve withthe mix of experiences from the employees who started
their career in Rohto and understand the corporate
culture well, and other employees who joined Rohto
from other companies and have
Ratio of Employees
new viewpoints. Furthermore,
Who Started at Rohto to
putting together fresh new ideas
Employees Who Joinedfrom people who do not have
Rohto from Other Companies
much knowledge in a certain field
and other ideas from people whohave accumulated a lot of
As of March 2019knowledge in that field haveresulted in the birth of innovation.

44:56

Employees
Who Started
their Careerin Rohto

Mix and Evolve
Together

Employees
Who Joined
Rohto from
Other
Companies

Countries and Regions

36

HEALTH VALUES REPORT 2019

HEALTH VALUES REPORT 201937

Message from the CHO
In our Company’s health management, the concept of ouremployees playing leading roles is deeply connected to theidea that the health of each employee can make for a healthysociety.
In the same way that positive energies of people can transmit
to people around them, if our employees are healthy, it canalso spread to their surroundings, to employees’ families,
friends, communities, and further to the world.
For this reason, we value our employees’ health first. Let’s
enjoy being healthy together.

Rohto’s Health Management

Rohto Pharmaceutical Co., Ltd.

HealthManagement
Declaration

Rohto has the goal of becoming an organization
brimming with “healthy human resources”
where everyone can stay healthy and work
energetically for a long time.
We hereby declare that we will further promotehealth management so that the health of ouremployees will lead to greater health for society
and the next generation.

In 2018, we established a health management
declaration with the aim being that “working at Rohto
makes you healthy,” and we also set our health goalfor 2020.

38

HEALTH VALUES REPORT 2019

Executive Vice President
Chief Health Officer (CHO)

Lekh Raj Juneja

About the Chief Health Officer (CHO)
We believe that contribution to the health of our employees, customers, and society is ourCompany’s reason for being. The position of CHO was established in 2014 to reinforce
our business development in this area, well ahead of other companies.
Having our CHO as a leader, we seek to accelerate our healthcare-related social
contribution activities, domestic and overseas businesses, and research anddevelopment. We have a clear management policy prioritizing health management andare determined to become a company that supports not only our employees’ health but
also the health of society.

Yuto Nagatomo Appointed As “Sports Yell
Officer” (SYO)*
Comment from Mr. Nagatomo

Through this role, I would like to share my experiences and what I havelearned as an athlete. I would also like to offer support in making
everyone at Rohto healthy by utilizing the “powers of sports.”
Furthermore, I hope to encourage many more athletes to get involved inpromoting the health of working people.
* Sports Yell Officer (SYO) is a position with responsibilities in furthering initiatives to establish and improve
exercise habits which promote the health of our employees.

From the Health of Employees tothe Health of Society
Health in Rohto’s view is not simply being free of illness. “True
Health” is based on mental and physical health, which allows
a person to work with passion (purpose and meaning) andexperience personal growth. We believe that these employees
are the “healthy human resources” who can support thehealth of society.
The most important thing is that each one of our “healthy
human resources” can work energetically. We believe that thepositive energies created by our employees spread to ourfamilies and friends and reach our customers through our
products and services.

HEALTH VALUES REPORT 2019

Photo by Keiko Nakajima (Magazine House)

Professional Soccer Player
Galatasaray S.K.

Yuto Nagatomo

World
Japan
Company
Families
Employees

The Positive Energy of One Person Spreads
to the World

39

Rohto’s Health Management

TopicsSupport to Quit Smoking While Respecting Self-Initiatives

Creating “Programs to Enjoy a Healthy Life”
Established “Health Management Promotion Group” from the Open
Recruitment Project “ARK*”

As part of the health promotion efforts at our Company, many ideas were proposed by mainly young
employees, in addition to the leadership of our CHO. As a result, the “Health Management Promotion
Group” was established in 2016. We introduced a unique company coin reward system that recognizes
how healthy activities can lead to better health. We are actively creating fun programs in which our employees can enjoy doing healthy activities such as making exercise a habit, discontinuing smoking, and promoting women’s health.
* Please see page 33 for more details on the ARK Project.

Rohto Health Currency “ARUCO”
In 2016, we provided fitness-tracking devices to all employees
for the purpose of promoting their health. We started a program
to encourage walking 8,000 steps a day, in addition to 20 minutes of brisk walking daily. In January 2019, the Rohto healthcurrency, “ARUCO”, was introduced. Employees can earn andaccumulate ARUCO coins according to the amount and degreeof healthy activities they participate in, including the number ofsteps they walk daily, the amount of time they spend walking
briskly, time spent on sports activities, and non-smoking. The
coins earned can be used for various activities to further enhancemental and physical health. We expect that this program willencourage the employees who have not yet been successful atreforming their lifestyles or improving their health to get motivated. It is important to not only
be “health-conscious,” but also
bring positive “changes” to ourdaily life.

Percentage of Employees Who Perform
8,000 Steps and 20-minute Brisk Walk Daily

41.0%

FY2017

80.0

11.6%

0

FY2017

FY2020(Goal)%

We have been doing morning exercises since the 1970s. In addition
to increasing health consciousness, employees continuously comeup with new, original exercises to make the morning exercises more
fun and effective. To increase health literacy levels among employees,
we also give health-related quizzes every morning.

Approx.

30

types

Since the 1980s, we have had many sporting events in the Company,
including field days or table tennis tournaments, which are planned,
organized, and participated in by our employees. These events promote
intra-company communication and enable younger employees toimprove their planning skills. Since 2002, we have also been conducting
physical fitness tests. “Physical ages” are determined and ranked,
encouraging all employees to review their physical abilities.

%

Plus-one Vacation Days

FY2020(Goal)

・Free breast cancer screening and uterine cervix cancer screening
・Free measurement of serum ferritin*1
・Free rubella and measles antibody testing, free MR immunization vaccines*1 Ferritin is a blood protein that reflects the body’s iron reserves, and is an important index tocheck for iron deficiency.

HEALTH VALUES REPORT 2019

Smoking
Rate

FY2020(Goal)

Promoting Sports While Having FunWith 60% of the Company’s employees being female, we offer
various support to female employees at different stages of their life
so they can continue to energetically work for Rohto. We put effort
into the health of our female employees and provide them with apleasant working environment.

40

FY2017Ever-Changing “Morning Exercise” and Health Quiz

Number of
Exercises

Being a Leading Company in the Area of “Creating Women’s Health”*2 Hemoglobin (Hb) level of under 10.9g/dl

We have a goal of achieving a 0% smoking rate among our
employees before the end of FY2020. With respect for the “selfinitiative” of smokers, we conduct activities in this area, including a“Derby” race to promote the smokers to quit smoking in which theircolleagues cheer and support them. In addition, we offer individual
consultations to help employees set their goals to quit smoking.

FY20175.1%

FY2020(Goal)

4.5%

Anemia Level of Female Employees*2

We believe that time spent refreshing our mind and body andtraining ourselves is very important. To encourage wellplanned vacations with consecutive days off, we have adopted
a “Plus-one Vacation Days” program (if an employee takes four
consecutive days off, he or she is entitled to receive one
additional day off). We actively strive to improve the working
styles and resting habits of our employees.

Percentage of
Employees Who
Used “Plus-one 40.0%
Vacation Days”
Percentage ofAnnual Leave
Taken

65.3%

75
85

%

%

Achievements in Health Management
2015: Selectedunder the “1st Health & Productivity Stock
Selection Program
2017 to 2019: Selected under the “Certified Health & Productivity
Management Outstanding Organizations
Recognition Program (White 500)”
2017 to 2018: Certified as a “Sports Yell Company” by the Japan Sports Agency

HEALTH VALUES REPORT 201941

Corporate Governance That Supports
ESH Promotion

Rohto’s Governance Structure That Reflects Its Diversity❶Board of Directors

Chairman President Vice President

Basic Views of Corporate Governance
Along with fulfilling our corporate social responsibility, we strive to gain the trust and meet theand employees, and aim for coexistence and co-prosperity. We will develop an organizational
structure for management and implement the necessary measures for ensuring transparency
and fairness in management and responding to changes in the management environment in a
prompt and accurate manner. Furthermore, in accordance with our corporate identity andmanagement philosophy, we will implement a ROHTO CSR Code of Conduct and ROHTO CSR

External Directors

Directors

expectations of all our stakeholders, including shareholders, consumers, business partners,
Chairperson
Foreign National

Authorization

Proposal of
Agenda❷Nomination Committee

Delegation

Reporting❸Compensation Committee

FemaleCharter, and promote compliance with laws and regulations.

Please refer to “The status of our corporate governance” for our basic ideas on corporate governance and management policies.
https://www.rohto.co.jp/ir/strategy/governance/policy/

Transitions in Rohto’s Corporate Governance2005: ROHTO CSR Charter was established2012: Appointed one external director
2014: Appointed a foreign national to the post ofCHO (Chief Health Officer)
Appointed a female external director for the
first time
2016: Introduced a new corporate identity“NEVER SAY NEVER”
Established a “Compensation/Nomination
Advisory Committee”
2019: Increased the number of external directors
from 2 to 3
Established a “Nomination Committee” anda “Compensation Committee”
Updated the internal control system

Current Corporate Governance Status(as of March 2019)

Major categories

Contents

Type of Organization

Company with audit
and supervisory board

Number of directors(External directors)

12 (3)

Number of
independent officers

5

Term of officefor directors

1 yearAdvisory bodies tothe board of directors

Nomination
Committee,
Compensation
Committee

Auditing company

Ernst & Young
ShinNihon LLC

Evaluation of the Effectiveness of the Board of Directors
The self-evaluation (questionnaire) participated in by all directors for FY2019 overall showed a positive andsimilar response to that of FY2018. However, there was a request made for training opportunities that meetthe individual needs of each director. We will work to provide appropriate training opportunities in the
future.

42

HEALTH VALUES REPORT 2019

External
Directors❶Board of Directors
The Board of Directors accepts
its fiduciary responsibility andaccountability to shareholders.
For the common benefit of thevarious stakeholders includingo u r g ro u p c o m p a n i e s a n d
s h a re h o l d e r s , i t s t r i v e s t ocontribute to our groupcompanies’ sustainable growth
and to improve mid- to long-term
corporate value.

Directors

Directors❷Nomination Committee
The Nomination Committee has
the duty of drafting proposals forthe selection and dismissal of
directors and executive
directors, whose rights areauthorized by the Board of
D i re c t o r s . T h i s c o m m i t t e e
submits such proposals to theboard of directors.

External
Directors❸Compensation Committee
Upon delegation by the Board of
Directors, the Compensation
Committee examines individualcompensation. The committee
also prepares drafts for directors’compensation policies,
procedures, and structures, inaddition to drafting proposals
regarding directors’compensations that arepresented at the shareholders’meetings. The committee also
submits drafts to the Board of
Directors.

Anti-corruption Practices
The Company aspires to contribute to a truly healthy and evolving society. To accomplish this goal, theCompany disapproves of any form of corruption, including bribery, and is working hard to prevent itfrom happening.
The Company has implemented a comprehensive whistleblowing system (Rohto Hotline) in order toprevent any kind of corruption from taking place, including not only monetary bribes but also nonmonetary favors or accommodations. If a whistle-blowing report is made at our subsidiary or ourgroup company in Japan or overseas, the Internal Audit Office will immediately gather information to
manage the risk imposed on the entire Rohto group.
For details, please visit the URL below
https://www.rohto.co.jp/csr/charter/

HEALTH VALUES REPORT 2019

43

MESSAGE FROM EXTERNAL DIRECTOR

External Director
Professor, Waseda Business School(Graduate School of Business and Finance)

A Financial Foundation
That Makes ESH Promotion Possible

I support Rohto in its
efforts to tackle its longterm challenges while considering the benefits for its
various stakeholders.

Our Core Ways of Thinking On FinanceRohto is working on social issues from a long-term perspective while maintaining our current
standard of a 10% operating margin. We will increase sales and profit and reinvest for the
future. At the same time, we strive to appropriately share profits with our stakeholders.

Akie Iriyama

There are several definitive reasons behind mydecision to become an external director for
Rohto in 2019. Ten years ago, when I was in the
U.S., I had the chance to meet an employee of
Rohto. Eventually, I learned about the various
activities in which the Company was involved.
The Company has been sincerely working on
many long-term issues related to health, society,and the environment. The Company took aleadership role in establishing the MICHINOKU
Future Fund right after the Great East Japan
Earthquake, supporting children who lost theirparents in the disaster. Rohto has also been
involved in many other recovery efforts.
Furthermore, Rohto was the first majororganization in Japan to promote the concept of
having a “second job.” I took notice and shared
the same view for these activities conducted by
Rohto.
Currently, under the SDGs and the idea of CSR,
companies are expected to help solve long-termsocial issues. However, I personally feel unsure
as to whether Japanese companies areearnestly tackling such issues. Climate change isa serious problem that the earth is facing, andwe cannot lose any time. The unexpectedTyphoon Hagibis hit Japan in October 2019, andone cannot help but assume it was caused byclimate change. I believe that the seriousness ofthe climate change is finally being recognized inJapan.
In addition to climate change, humankind today

44

is facing many other serious problems, such as
food scarcity, poverty, health, and hygiene. If we
don’t address these problems, we will leave
debts to the later generations of our children andg r a n d c h i l d re n , a n d t h e s e p ro b l e m s w i l leventually erode their economic prosperity.
Companies will not be able to conductbusinesses anymore.
For these reasons, we hope that Rohto, which isalready ahead of other companies in dealing withsocial issues, will accelerate its efforts to tackle
health, social, and environmental issues. I also
hope Rohto will grow further as a company. As
an external director, I support Rohto’s challenges
regarding long-term social issues, while also
paying attention to the Company’s corporate
governance and the benefits it provides to its
various stakeholders, including shareholders,
employees, and business partners.
Biography
Dr. Iriyama graduated from the Faculty of Economics at Keio University
and earned a master’s degree at the Graduate School of Economics also
at Keio University. He joined Mitsubishi Research Institute, Inc. andengaged in consulting work mainly for automobile makers andgovernmental institutions in Japan and overseas. In 2008, Dr. Iriyama
obtained a Ph.D. at the Graduate School of Business at the University ofPittsburgh in the United States. That same year, Dr. Iriyama started
teaching as an assistant professor at the University of Buffalo School ofManagement, The State University of New York. Dr. Iriyama took theposition of an associate professor in 2013 and became a professor in
April 2019 at Waseda Business School (Graduate School of Business andFinance). Dr. Iriyama’s areas of expertise are management strategy
theories and international management theories. He authored thebestselling book “What Management Scholars of the World Are Thinking,”
published by Eiji Press in 2012. Currently, Dr. Iriyama writes columns for“World-class Management Theories” in “DIAMOND Harvard Business
Review,” and he is active on various media platforms.

HEALTH VALUES REPORT 2019

GrowthOur top line is steadily growing, and our operating margin has been consistent over the years.
Sales/Operating margin (consolidated)

Operating income/Ordinary income/Profit attributable(million yen)(%)
167,016

151,774

8.7

9.4

171,742

183,582

to owners of parent (consolidated)(million yen)

154,599
10.0

11.1

14,098

11.3

18,84915,33915,683

2014

2015

2016

18,97020,812

15,964
15,451

13,1592017(Fiscal Year)

Operating margin

2014

2018

10,011

9,098

8,631

Sales

19,087

2015

2016

9,799

9,289

2017

2018
(Fiscal Year)

Operating income
Ordinary income
Profit attributable to owners of parent

Profitability
Higher returns above capital costs have been consistently attained.
ROIC (consolidated)

ROE/ROA (consolidated)

(%)

(%)

10.33
8.64

8.72

8.81

6.87

2014

2015

2016

2017

2018
(Fiscal Year)

10.0
8.4

8.6

8.3

8.3

2014
ROE

HEALTH VALUES REPORT 2019

2015
ROA

8.8
8.8

2016

7.6

2017

9.5
7.6

2018
(Fiscal Year)45

Rohto’s Profit-Sharing Policy

Efficiency
Assets are efficiently utilized for sales by consistently decreasing the inventory.

In 2019, Rohto made partial amendments to its articles of incorporation with the mission of being a

Total asset turnover/Inventory turnover (consolidated)“public instrument for society.” We have reiterated our determination to address issues concerning(Times)society from a long-term point of view in collaboration with all the people surrounding us and share

6.91

the benefits gained thereby. Profits earned through solid businesses will be reinvested with the ideal

7.32

6.63

6.89

0.86

0.90

goal of realizing a healthier and more sound society. At the same time, profits will be shared

6.50

appropriately with our stakeholders who also support us from a long-term point of view.
0.89

0.94

0.92

Stakeholders That Support Rohto
2014

2015

Total asset turnover

2016

2017

2018
(Fiscal Year)

Inventory turnover

Stability
While we make investments for the future, high and stable operating cash flow are being attained. Free cash flow isused for new investments within an appropriate amount where positive returns are expected.

By steadily increasing our sales, we will

Equity Ratio (consolidated)

Cash flow (consolidated)(%)(million yen)business affiliates, but also give our themthe opportunity to hire more

61.4

64.7

65.1

64.2

13,428

11,324

11,29261.7

2,267△3,375△6,066 △5,898

2014
2015

2016

2017

2018
(Fiscal Year)

8,140

5,258

△9,0242014

2015

employees.
11,500△2,335△9,511

2016

Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities△1,823△11,0142017△3,386△10,245

2018(Fiscal Year)

Free cash flow

Net income per share/Dividend per share/Dividend ratio(consolidated)
87.95
80.04

25.0

23.9

19.0

20.0

21.0

2014

2015

2016

Net income per share for the year
Dividend ratio

We will hold a long-term view and(yen)(multiple)

(%)
81.55

86.00

1,030.96

1,115.94

2.7

29.1

27.0

969.221.8

2.1

1,147.42

2.5

2.0

25.0

22.0

2017

2018

Dividend per share(Fiscal Year)

2014

2015

Net assets per share

HEALTH VALUES REPORT 2019strive to increase our corporate valuetaxes on the profit we earn through ourby becoming a company that truly

business activities, while also aiming tocontributes to society. We will aim

contribute to the lives of people into achieve a 25% dividend

local communities.

Net income per share964.1825.0

Shareholders
and Investors

Country and Local
Communities
We will contribute to society by paying

Appropriate returns are made to shareholders, who are our stakeholders. Retained earnings are reinvested as we
aim to grow further.

76.05

We will make appropriate remuneration to ouremployees and their families through salaries,
benefits, or training based on steady sales andprofit increase and the work performed by theemployees. We will also support the mental
and physical health of employees andtheir families through promoting
health management.

3,917

Shareholder Returns(yen)

not only make larger payments to our

21,745

19,15446

Rohto’s
Employees
and Their Families

Business Affiliates(Suppliers/Sellers)

2016

2017

Price-book value ratio

2018(Fiscal Year)

Consumers, citizens,and future generations

distribution ratio.

We will contribute to mental andphysical health by offering products andservices at fair prices. We will also
contribute to the beauty and health ofpeople by sharing knowledge andengaging in activities that
promote health.

HEALTH VALUES REPORT 2019

47

Data

Corporate Data (as of March 31, 2019)(Fiscal Year)

ESH – Indicators (non-consolidated)

2014

2015

2016

2017

2018

R&D expenses (consolidated) (million yen)

5,585

5,811

6,123

6,553

6,831

“Pleasantly Surprised Testimonials”*1 (count)

1,338

1,405

1,669

1,293

1,191

Kaisen Activities (count)

13,59011,292

11,758

10,637

10,367

Value of “Health” -> pages 16 to 23

Value of “Social” -> pages 24 to 27

Directors and Officers (as of June 27, 2019)

Company Name

ROHTO Pharmaceutical Co., Ltd.

Board of Directors

Foundation

February 22, 1899

Chairman

September 15, 1949

Employees Donating to the MICHINOKU Future Fund (people)

840

871

854

866

858

Incorporation

Employees Donating to the Karugamo Fund (people)

982

969

934

945

929

Capital6,446 million yen

Number of Employees

6,355 <consolidated basis>
1,474 <non-consolidated basis>

Value of “Environment” -> pages 28 to 29
Changes in crude oil equivalent (kℓ)

8,167

8,319

8,160

8,175

8,015

Total GHG emissions (t/year)

16,37016,55915,846

15,772

14,669Relative to sales (t/million yen)

199

186

177

163

141

Electricity usage (1,000kWh/year)

23,98924,42823,99423,711

24,289

292

274

268

245

233

2,329

2,383

2,395

2,410

2,087

28

27

27

25

20

305

292

275

290

266

3.7

3.3

3.1

3.0

2.5

Relative to sales (1,000kWh/million yen)
City gas usage (1,000m /year)
3

Relative to sales (1,000m3/million yen)
Water usage (1,000m3/year)
Sales intensity (1,000m /million yen)
3

A Corporate Culture That Is Uniquely Rohto– Indicators (non-consolidated) -> pages 30 to 37
Employees Participating in Open Recruitment Projects*2 (people)

77

-

-

-

51

Employees Having In-house Double Jobs (people)

-

-

36

49

70

Employees Participating in External Challenge Work (people)

-

-

25

63

84

Employee Turnover Rate*3 (%)

4.0

4.2

4.6

5.4

5.3

Paid Annual Leave Taken by Employees (%)

64.6

63.4

62.2

65.3

70.1

Females In Management Positions (%)

20.2

19.1

18.6

19.2

21.1

Employees with Disabilities (%)

1.68

1.87

1.90

1.84

2.08

Employees Taking Maternity Leave*4 (people)

63

61

64

105

100

Number of Employees (people)

1,516

1,524

1,562

1,400

1,474

Female Employees (people)

909

907

918

805

857

Male Employees (people)

607

617

644

595

617

-

-

28.2

41.0

44.4

Obesity Rate (Male) (%)

20.7

22.4

21.9

24.0

22.5

Obesity Rate (Female) (%)

13.2

9.9

13.7

15.3

15.2

Smoking Rate (%)

12.1

13.5

12.5

11.6

7.7

Rate of Anemia (%)

3.9

5.1

7.3

5.1

4.9

Rohto’s Health Management– Indicators (non-consolidated) -> pages 38 to 41
Employees Performing 8,000 Steps and 20-minute Brisk Walks Daily (%)

Sales (million yen)

151,774 167,016 154,599 171,742 183,582

Operating income (million yen)

13,15915,683

15,451

19,087

20,812

Ordinary income (million yen)

14,09815,33915,964

18,84918,970

Profit attributable to owners of parent company (million yen)

8,631

9,098

10,011

9,289

9,799

ROA: Return on Assets (%)

8.3

8.6

8.8

10.0

9.5

ROE: Return on Equity (%)

8.4

8.3

8.8

7.6

7.6

Capital adequacy ratio (%)

61.7

61.4

64.7

64.2

65.1

*1: Positive feedback and letters of appreciation received from customers*2: Number of participants in the Company’s Open Recruitment Projects (“ARK” Project in FY2014; Asutsuku Project in FY2018)*3: Figures do not include retirees and part-time employees*4: Return rates for maternity leave is almost 100% every year, including when leave periods carry over to the following fiscal year.

HEALTH VALUES REPORT 2019

Kunio Yamada
President
Masashi Sugimoto
Executive Vice President Global Headof International Business and Research &Stock Information

Development Chief Health Officer
Lekh Raj Juneja

Securities Code4527

Total Number ofAuthorized Shares

399,396,000 shares

Total Number ofIssued Shares

113,971,083 shares(excludes 4,018,825 sharesof treasury stock)

Number of
Shareholders

16,657

Fiscal Year

April 1 to March 31of the following year

Shareholder Registry
Administrator

Mitsubishi UFJ Trust andBanking Corporation

Stock Listing

Tokyo Stock Exchange, Inc.
(First Section)

Director

Shinichi Kunisaki

Director

Tetsumasa Yamada

Director

Hideto Uemura

Director

Masako Rikiishi

Director

Hidetoshi Segi

External Director

Mari Matsunaga

External Director

Shingo Torii

External Director

Akie Iriyama

Auditors

Please visit the Company’s website for more details
about our business, IR information, and ESG/CSR
information.

https://www.rohto.co.jp/

Masaya Saito

Executive Vice Presiden

Website Information

Financial Foundation That Makes ESH Promotion Possible– Indicators (consolidated) -> pages 45 to 46

48

Company Profile

Full-time Auditor

Masanori Kimura

Full-time Auditor

Takeshi Masumoto

Auditor

Mitsuo Fujimaki

Auditor

Katsusuke Amano

Contact Information
Rohto Pharmaceutical Co., Ltd.
ESG Promotion Group, Public Relations& Creating Shared Value Division

HEALTH VALUES REPORT 201949