Updated

Financial Results for the Fiscal Year Ended
December 31, 2020
Lion Corporation
February 12, 2021

Contents

1. Fiscal 2020 Financial Results
2. Long-Term Strategic Framework (Vision2030)

３. Fiscal 2021 Financial Forecast

Lion Corporation. All rights reserved. 2

1. Fiscal 2020 Financial Results

Lion Corporation. All rights reserved. 3

Fiscal 2020 Financial Results Highlights
Comparison to Forecast (revised 11/5)
Sales and profit met forecasts〇 The net sales forecast was met due to increased sales in mainstay domestic markets (oral care,fabric softeners, etc.), where we made strategic investments in competition-related expenses,
despite weak performance in Southeast Asia due to sluggish consumption in the fourth quarter.
〇 Core operating income exceeded the forecast due to an increase in gross profit that reflectedchanges in the sales mix

Y-o-Y Change
Both sales and profit increased〇 Sales, particularly of hygiene-related products, grew due to the spread of the novel coronavirus(COVID-19).
〇 Core operating income and the ratio of core operating income to net sales both rose, mainly due tocost reductions and an increase in gross profit that reflected the increase in sales and changes inthe sales mix.
〇 Operating profit and profit for the period attributable to owners of parent rose substantially due toa gain on transfer of non-current assets (land Lion’s head office occupies). Lion Corporation. All rights reserved. 4

Market Trends
Period: Jan.–Dec. 2020; Source: INTAGE Inc. SRI, SDI survey

Aggregate of 38
Home Products
Markets

Oral Care

Driven by hygiene-related products, both sales volume and unit prices
increased, and sales value grew 12% year on year
✔ Toothpaste unit prices rose, reflecting a shift to higher-value-added products, driving market expansion(up 2% Y-o-Y)✔ Toothbrush fell (down 4% Y-o-Y) due to a decrease in sales volume but showed signs of improvement in
the second half (up 5% in Oct.-Dec. Y-o-Y)

Beauty Care

✔ Hygiene-related products, including hand soaps, expanded (hand soaps: up 86% Y-o-Y)

Fabric Care

✔ Laundry detergents and fabric softeners were level year on year, reflecting a decrease in sales volume thatwas offset by rising unit prices✔ Dishwashing detergents and food preparation products grew due to an increase in eating at home (up14% and 16% Y-o-Y, respectively)✔ Household cleaner expanded due to increased hygiene awareness (up 29% Y-o-Y)

Living Care

Period: Jan.–Nov. 2020; Source: Nielsen

Aggregate of Key
Overseas
Markets

Hand soap benefitted from more frequent hand washing, whilelaundry detergent were down Y-o-Y but improving

Hand soaps✔ In South Korea, sales value was double the previous year’s results✔ In Thailand, sales value was 1.7 times the previous year’s results✔ In Malaysia, sales value was 3.4 times the previous year’s results

Laundry
detergents✔ In South Korea, sales value was down 1% year on year, largely unchanged on a full-year basis, despite
fluctuations during the year
✔ In Thailand, sales value was down 7%, as, despite gradual improvement, recovery from the impact ofsluggish consumption was slow
✔ In Malaysia, sales value was down 8%, gradually recovering from April onward and, in November,reaching a level on par with the previous year
Lion Corporation. All rights reserved. 5

Consolidated Financial ResultsCore operating income, operating profit and profit for the period reached new record
highs and the ratio of core operating income ratio reached 10%

Y-o-Y change（Billions of yen）

2020

2019

Amount%Deviationfrom revised
forecast(% deviation)

Net sales

355.3

347.5

7.8

２.3

0.3

3.2*

0.1%

Core operating income

35.9

30.0

% of net sales

10.1

8.6

５.8

19.6

Operating profit

44.0

29.8

% of net sales

12.4

8.6

14.2

47.7

Profit for the period
attributable to owners of parent

２9.8

20.5

9.3

45.3

70.72 32.03

45.3

EPS（Yen）

102.75

2.9
8.9%

2.5
6.2%

2.8
10.6%

9.87
10.6%

Note: Core operating income is an earnings indicator the Company uses to measure regular businessperformance by subtracting selling, general and administrative expenses from gross profit.
* Y-o-Y change at constant currency excluding exchange rate fluctuations.
Lion Corporation. All rights reserved. 6

Year-on-Year Changes in Core Operating Income
Core operating income increased significantly, reflecting increased sales ofhygiene-related products due to COVID-19 and cost reductions（Billions of yen）
Core operating income for 2019

30.0
Impact of
COVID-19＋5.7

Increase in sales, product mix changes and others

＋４.９

＋2.3

Total cost reduction (raw materials, logistics)＋0.9

Increase in raw material prices

Increase in competition-related expenses(0.8)

Increase in other expenses(2.2)

Impact of
COVID-19＋1.3
Impact of
COVID-19

(0.8)

35.9

Core operating income for 2020

26

28

30

32

34

36

38

40

Lion Corporation. All rights reserved. 7

Results by Business Segment
Consumer Products drove major growth in both sales (up ¥11.1 billion) and profit (up ¥5.0 billion)
Segment profit（Core operating income)Net sales*（Billions of yen）

2020
Consumer Products

Industrial
Products
Overseas

Other

Adjustment
Consolidated Total

245.4

2019
234.3

Y-o-Y change
Amount１１.１

Y-o-Y change

2020

%

Amount

４.８

２４.6

229.7

219.3

10.３

４.７

１０.０%

５５.０

55.1

(０.0)

(０.２)

２.１

３１.５

32.9

(１.３)

(４.２)

３.９%

101.6

101.0

0.５

０.５

７.１

９１.２

91.7

(0.５)

(０.６)

7.0%

３４.８

35.3

(0.５)

(１.５)

２.３

２.８

3.4

(0.5)

(１７.5)

６.６%(８１.６)(78.4)

(３.２)

-

０.０

0.0

(０.0)

(78.9)

355.3

347.5

７.８

２.３

* Upper lines: net sales; lower lines: sales to external customers

(0.３)

３５.９
１０.１%

%

5.0

２５.５

0.４

２３.７

(0.４)

(５.４)

0.７

５２.２

0.０

-

５.８

１９.６

Lion Corporation. All rights reserved. 8

Consumer Products Business Net Sales by Product Category
Rising hygiene awareness and increased time spent at homedrove major growth in beauty care and living care
Net sales（Billions of yen）

2020

Y-o-Y change

2019

Amount%Oral Care

６６.４

64.5

１.８

２.９

Beauty Care

３１.４

22.3

９.１

４０.９

Fabric Care

５９.１

60.7

(１.６)

(２.７)

Living Care

２４.０

19.7

４.２

２１.７

Pharmaceutical

２３.８

26.2

(２.３)

(８.９)

Other

４０.５

40.6

(0.１)

(０.４)

Total

２４５.４

234.3

１１.１

４.８

Lion Corporation. All rights reserved. 9

Overseas Business Net Sales by Region
Sales in Southeast Asia fell due to sluggish consumption,
but sales in China drove sales in Northeast Asia, leading to an overall increase
Net sales（Billions of yen）

2020

Y-o-Y change

2019

Amount%Southeast Asia

６６.４

69.5

(３.０)

(４.４)

Northeast Asia

３５.１

31.5

３.６

１１.５

Total

101.6

101.0

0.５

０.５

*Y-o-Y change at constant currency excluding exchange rate fluctuations:Southeast Asia: -0.8%; Northeast Asia: 14.4%; Total: 4.0%

Lion Corporation. All rights reserved. 10

Impact of COVID-19 on Lion’s Financial Results
Net sales: +¥6.1 billion

Main Factors Affecting Net Sales (billions of yen)

+１０.0

+１.１

POSITIVE

NEGATIVE

・Hygiene-related products (hand soaps, handsanitizers)
・Dishwashing detergents, food preparation products
Rising hygiene awareness andincreased time spent at home・Oral care (toothbrushes, travel products, professionalcare products)
・Pharmaceuticals (acne medicines, foot cooling
sheets)
Efforts to stay home, decreased
demand from overseas visitors

・Institutional use products (hygiene-related
products)

Consumer
Products

Industrial
Products

Rising hygiene awareness+２.６

・Northeast Asia (China, South Korea)
Increased demand for hygienerelated products

Overseas・Chemicals (Automotive, Electrical and Electronics)
・Institutional use products (dishwashing detergents,
food preparation products)
Sluggish demand for industrial
products

・Southeast Asia (Thailand, Malaysia)

-３.４

-１.９

-１.７

Sluggish consumption due torestrictions on activity
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2. Long-Term Strategic Framework （Vision2030）

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Financial Results Over the Past Decade (2011 to 2020)
Profitability has improved greatly over the past decade, but the rise of net sales has
been slow for several years, and bolstering growth remains an issue going forward.

Financial Results
4,500
450

Japanese GAAP

IFRS

10%

% of net sales

4,000
400

8%

3,500
350

6%

3,000
300

4%

2,500
250

2%

2,000
200

0%
2011 2012 2013 2014 2015 2016 2017 2017 2018 2019 2020
V-1 Plan

V-2 Plan

Ratio of core operating
income to net sales*

Net Sales（billions of yen）

Net Sales* Listed as ratio of
operating profit to
net sales underJapanese GAAP.

LIVE Plan
Lion Corporation All rights reserved. 13

Financial Results Over the Past Decade (2011 to 2020)
Profitability, efficiency and productivity rose significantly as we steadily reinforced
the management base. In addition, we made future-oriented investments in growth.

V-1 Plan

Key Indicators
Profitability

Efficiency
Productivity

Investment

V-2 PlanLIVE Plan

Change*1

2011

2014

2017

2020*1

Core operating
income*2¥11.1 b¥12.4 b¥27.2 b¥35.9 b+¥24.7 b

EBITDA*３¥23.1 b¥22.7 b¥36.5 b¥47.6 b+¥24.4 b

ROE

4.0%

6.2%

12.2%

13.6%

+9.6 P

ROIC

4.7%

4.8%

11.1%

10.7%

+6.0 P

Core operating
income per person*2¥1.8 m¥1.9 m¥3.8 m

¥4.8 m+¥2.9 mAdvertising¥22.1 b¥24.5 b¥29.9 b24.9 b

+¥2.8 bR&D

¥8.9 b

¥9.4 b

¥10.4 b10.9 b

+¥1.9 b

Capital expenditure¥8.3 b

¥13.5 b¥14.8 b47.5 b＋¥39.2 b(2011→2020)*3 2011-2017: Operating income + depreciation and amortization*1 Figures for 2020 are on an IFRS basis.
2020: Core operating income + depreciation and amortization*2 2011-2017: Operating income under J GAAP.
Lion Corporation All rights reserved. 14

Financial Results Over the Past Decade (2011 to 2020)
Market capitalization in 2020 was approximately 5.5 times that of 2011, and per-share
dividends have increased for five consecutive years, rising from ¥11 to ¥23

Market Capitalization and Dividend Per Share25
Market Capitalization
6,000
600

20

Dividends

15
4,000
400
10
200
2,000

0

5

0

Dividend per share (yen)Market Capitalization (billions of yen)

800
8,000

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

* Market capitalization based on year-end share priceLion Corporation All rights reserved. 15

Review of the LIVE Plan (2018 to 2020)
Sales and profit rose from 2017 but did not reach the LIVE Plan targets; growth remains an issue.

（Billions of yen）

Net sales

2017
3４２.７

2020
355.3

Difference from2017
Change

CAGR

+12.6

1.2％

Core
operatingincome２8.8% of net sales

8.4％

10.1％

+1.7P

Operatingprofit

30.4

44.0

+13.5

35.9

+7.1

7.7%

LIVE Plan
targetDifference
from target

400.0(44.6)

40.0

(4.0)

10％

13.1%

40.0

+4.0

Profit for the period
attributable toowners of theparent

20.8

29.8

+8.9

12.7％

28.0

+1.8

ROE

12.7%

13.6%

+0.9P

―

Approx.
12%―

Achievements○ Growth in oral care andChina○ Reinforced businessfoundations(Revenue structure,
production framework)

Challenges○ Business expansion in
fabric care andSoutheast Asia
○ Creating new points ofbusiness growth(Business creation beyond
existing frameworks)

Difference from 2017:
Net sales, income, profit and profitability all rose.
Difference from targets: Targets for net sales and core operating income were not met.
Key factors: Weak performance in the domestic fabric care category and in Southeast Asia and inability to
fully compensate for said performance
Targets for operating profit, profit for the period attributable to owners of the parent and ROE were met
Key factors: Gain on transfer of non-current assets, etc.
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The Coming Decade (2021 to 2030)
The social role and significance of Lion, with its close involvement in everyday living,
will grow further as the world adapts to the new normal with COVID-19

Changes in values and behavior
・Renewed awareness of the importance of daily habits
・Increased hygiene needs
・Increased healthcare awareness・Changes in housework patterns

Key themes for the decade ending in 2030
Create social value and economic value through purpose-driven
management
Achieve business growth by making a difference in the everyday lives ofeven more people
Transform into a company that constantly evolves in response to changes
in society
Lion Corporation All rights reserved. 17

Vision2030
To achieve its management vision for 2030, based on its purpose,the Lion Group will synergistically address its sustainability material issues andadvance three growth strategies in order to contribute to the realization of asustainable society and achieve business growth.

Lion Corporation All rights reserved. 18

Purpose-Driven Management
We will reinforce management driven by our purpose:
Make a difference in everyday lives by redesigning habits

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Management Vision for 2030

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Approach to Achieving the Management Vision
Implement purpose-driven management and make a difference in more people’s lives to achieve business growthMore contact
Contacts with consumers/day

×More consumers
Number of people (age groups)

Number of people (countries/areas)＝

Business
growthRegions/areas

Highly familiar, with many
contact points
The foundations of daily
healthcare

Pet
Foods withfunction claims
OTC drugs
Home care

More consumers

Seniors

MiddleageYoung
adultsTeenagers

Children

Oral care

Infants

・Diverse portfolio
・Unique products and services

Beauty care

PrenatalMore contact

Business Fields

×More areas

More areas, mainly in Asia
Lion Corporation All rights reserved. 21

Envisioned Financial Performance in 2030
Put our purpose into action to realize business growth and, as a result,increase our market presence in Asia
Enhance our market presence in Asia

(Billions of yen)

Envisioned Financial Performance in 2030
■Scale: Net sales of ¥600 billion(In the top 10 in Asia)■Core operating income: ¥50 billion■ROIC: 8–12％, ROE: 10–14%■EBITDA* margin: 10–14%

Into the top 10* EBITDA: Core operating income +depreciation and amortization

Currently 13th

Source: Prepared by Lion using data from Euromonitor International
Sum of 2019 figures for the Beauty and Personal Care, Home Care and Consumer Health categories (Lion’s key markets)
Asia/Pacific region
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Our Three Growth Strategies

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23

Our Three Growth Strategies
We will advance three strategies toward the achievementof the management vision to drive business growthLion Corporation All rights reserved. 24Our Three Growth Strategies:
Accelerate Growth in Four Fields of Value Creation

Lion Corporation All rights reserved. 25Our Three Growth Strategies:
Accelerate Growth in Four Fields of Value Creation

Lion Corporation All rights reserved. 26

Our Approach to the Four Fields of Value Creation
Accelerate business evolution and new value creation to become
an advanced daily healthcare company
Promoting oral healthcare that supports overall health and
QOL from the mouth outward.

Lion aims to leverage its strengths as Japan’s leading oral care manufacturer to integrate innovative oral care products
and services into the daily lives of individuals as a new form of healthcare. By doing so, we seek to realize businessexpansion beyond the bounds of our existing businesses.

Becoming a hygiene solution provider by addressing all kindsof risk related to infectious disease.
As a company with a long history of supporting cleanliness, Lion’s mission is to transform its business. We will expand
our business from living spaces to encompass public and industrial spaces in order to defend against bacteria andviruses on all fronts—bodies, objects and spaces—by providing hygiene solutions.

Creating new housework habits for diverse lifestyles.

As lifestyles and living situations diversify, one-size-fits-all ideas for improving housework increasingly fall short ofmeeting consumer needs. Building on the basic concept of smart housework that is fun and efficient, we will establish aunique edge by reframing housework generally to maximize authentic comfort at the individual level and by cooperatingclosely with external partners across a wide range of categories.

Becoming a total healthcare servicer for the mind and body.

We will transform into a total healthcare servicer that supports health and happiness at each life stage by building
connections with consumers through habitual self-healthcare and by expanding the solutions we offer and integrating
our services through collaboration with external partners.

27

Lion Corporation All rights reserved. 27

Specific Opportunities: Oral Health Area
Provide value that starts with oral care in various aspects of daily life
Health andproductivity
management

Medical care

Senior living

Insurance
Dental care

BeautyOral care product market

Dietary
habits¥240 billion (Japan)
Lion is the market leader,with 23% market share

Physicalfunction

Education
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Specific Opportunities: DX in Oral HealthUtilize oral health data to create and offer individually tailored oral health solutions

Business
partners

Provide personalized
services and solutions

For every customer

Leverage oral health datawith business partners• Basic health• Living data
• Oral condition• Tooth brushinghabitsLION
Oral Health
Database

Build new contact points
with customers to acquire
oral health data
Lion Corporation All rights reserved.

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Our three growth strategies:
Transform our business foundations for growth
Promote business foundation transformation that will spur growthby continuing and reinforcing strategic investment

Digital transformation (DX)

Reinforce business infrastructure

・Create new value by building digital infrastructure

・Increase production capacity to support businessgrowth・Improve efficiency and speed through operationaltransformation

・Develop core systems that will enhance thesophistication of management

・Enhance decision-making precision and speed withreal-time business data

・Build a flexible, resilient and sustainable SCM platform

Transform
operations

Transform
digital/data use

・Build business foundations that are adaptable to new
business models

Transform value
providedTransform corporate culture and digital platforms

SakaideToothpaste Factory
Operations begin
July 2021

Work reforms

Big data Health caredata/AI
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30

Our three growth strategies:
Generate dynamism to realize innovative change
We will transform to realize sustainable growth through corporate brand reinforcement,
professional fulfillment reforms and the promotion of diversity and open innovation

Corporate Branding
In and outside Japan, implement purposedriven, consistent corporate activities tocontinually earn the trust and respect of all
stakeholders and increase corporate value

Professional Fulfillment Reforms
Advance the Lion Professional Fulfillment
Reforms, including the radical transformationof personnel systems to support employees’
self-directed growth and thereby enhance
adaptability and innovativeness

Diversity & Open Innovation
Accelerate the utilization of diverse humanresources and proactive external collaboration
to transform our ways of thinking andoperational speed and methods andthereby continually create new value
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Reinforce Initiatives to Address the Sustainability Material Issues

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32

Reinforce Initiatives to Address the Sustainability Material Issues
By advancing initiatives to address the sustainability material issues in coordination
with our three growth strategies, we will contribute to health, comfort and cleanlinessin everyday living and the realization of a sustainable society

Creating Healthy
Living Habits
Promoting
Environmental
Initiatives for a
Sustainable Planet

Our three growthstrategies

Top priority
material issues

Sustainability material issues × Three growth strategies

Related SDGs

Creating social value

Health, comfort
and cleanliness ineveryday living

Sustainable
societyother material issues
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33

Creating Healthy Living Habits

Inclusive Oral Care
Oral care for all.
For the health of all.
Many people do not practice adequate oral care due to a wide range offactors, such as their living environment, physical limitations,
economic circumstances, or lack of education or information.
We want to offer oral care for all.
Through oral care, we can share with people everywhere habits that
nurture and enhance their natural ability to live a healthy life.
Working to reduce health disparities through oral care —we call these activities “inclusive oral health.”* We will reduce four types of disparity that we believe give rise to health disparities, namely, disparities in living environment,
physical ability, economic circumstances and education/information.
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34

Creating Healthy Living Habits—Inclusive Oral Care

Inclusive Oral care
Our motivation
Lion is working to enable
oral care for all—oral
care that can bepracticed by anyone,by oneself, and is
supported by systems.

Offering oral care that is accessible to all,By Anyone

regardless of physical handicap,
age, environment, or other circumstances.

Not because anyone told you to,

Building systems of mutual support

and not because you told anyone

to overcome the issues

else to;creating oral care habits that each

By Oneself

By Systems

individuals cannot solve alone
and realize lasting health for all.

individual can practice bythemselves, for themselves.

Lion Corporation All rights reserved.

35

Creating Healthy Living Habits—Inclusive Oral Care
Inclusive Oral care

Supporting children
Programs to develop self-esteem●Compared with the children of more affluent households, the children of economicallydisadvantaged families typically grow up having fewer positive experiences—likebeing praised, communicating with adults and acquiring life skills—and havesignificantly lower self-esteem.
●Humans need to eat to live, and tooth brushing is closely related to eating. Using thisas an entry point, Lion offers a variety of oral health-related programs via community
spaces that provide meals and services to economically disadvantaged children. These
programs provide the kind of positive experiences that children need to grow theirself-esteem.

Programs related to tooth brushing
・Developing self-expression through dance・Learning through fun quizzes and other games
・Experiencing accomplishment by solving problems throughprogramming・Expanding thinking and ingenuity through building and crafts
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Creating Healthy Living Habits—Inclusive Oral Care
Inclusive Oral care

Supporting children●Coordinating with NPOs and municipalities to build support frameworks for children

Providing experiences via programs
Families

NPOs
Becoming a
Fan of Lion

●NPO partners

Florence

Musubie● Channels: Community spaces, after-school academic programs, homes,
websites, apps, etc.
●Communities: Focused on areas with high rates of poverty and food insecurity
Lion Corporation All rights reserved.

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Creating Healthy Living Habits—Inclusive Oral Care
Inclusive Oral care

Switch to verified mint for toothpaste
Supporting mint producers in India
by using verified sustainable mint
●We are switching to the exclusive use of mint (Mentha canadensis) verified via strict
inspections* for all Lion toothpastes (beginning with Dentor Clear MAX in June 2021 andexpanding to all brands by 2022).
*Sustainable Agriculture Initiative (SAI) Platform-verified mint
This mint is verified under the Farm Sustainability Assessment (FSA, a survey comprising
127 questions about social and environmental practices) operated by the SAI Platform,
which supports the creation of sustainable agricultural supply chains.

●Increasing our procurement of verified mint and sales of products made using it will leadto higher production of verified mint and more producers being verified, in turn supporting
the social, environmental and economic sustainability of India’s mint producers.

Menthacanadensis

Conditions for verification
・Workers’ human rights protected
・Farms set up to save water・Regular training provided

・Modern farming methods used for high yields
・No environmentally harmful fertilizers
・Discrimination-free worker compensation at or
above the legal minimum wage

Lion researchersvisit farms to gain
an understandingof conditions

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38

Promoting Environmental Initiatives for a Sustainable Planet
Work with many other companies and municipalities
to accelerate initiatives aimed at realizing a sustainable planet

Plastic film packaging
horizontal recycling

Smart logistics (logistics EDI)
Logistics EDI
Manufacturer● Began horizontal recycling efforts for film packaging
in collaboration with Kao Corporation
1) Studying packaging sorting and collection
methods
2) Advancing recyclable container quality design
3) Studying uses of recycled materials
4)

Fostering awareness and uptake among
consumers

Wholesaler●Advance and implement logistics EDI➡Effectively utilize logistics resources and improvelogistics efficiency through improved accessibility oflogistics data and mutual collaboration●Expected effects① Improved work
environments
・Reduce standby
times② Improved laborproductivity
・Eliminate inspections
・Paperless・Save pallet
management work
・Increase loads andloaded running rate

③ Reduced
environmental
burden・Reduce CO2
emissions・Reduce paper use

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39

3. Fiscal 2021 Financial Forecast

Lion Corporation. All rights reserved. 40

2021 Consolidated Financial Forecast
Planning for a Y-o-Y increase in sales and decrease in profit（Billions of yen）

2021

Y-o-Y change

2020

Amount%Net sales

365.0

355.3

9.6

2.7

Core operating income

30.0

35.9

8.2

10.1

(5.9)

(16.5)

30.0

44.0

8.2

12.4

(14.0)(31.9)

Profit for the period attributabletoowners of the parent

21.0

29.8

(8.8)

(29.7)EPS (Yen)

７２.２４

102.75(30.51)(２9.7)

ＲＯＥ

8.8

13.6

(4.8)P

ＲＯＩＣ

8.5

10.7

(2.2)Ｐ

ＥＢＩＴＤＡ

４３.5

47.6

ＥＢＩＴＤＡ margin

11.9

13.4

% of net sales

Operating profit% of net sales(4.1)(1.5)P

Notes 1. Core operating income is an earnings indicator the Company uses to measure regular businessperformance by subtracting selling, general and administrative expenses from gross profit.
2. EBITDA: An indicator of profitability on a cash basis calculated as the sum of core operating income anddepreciation and amortization.
3. EBITDA margin: The ratio of EBITDA to consolidated net sales.
Lion Corporation. All rights reserved. 41

Results by Business Segment
Increases in sales across all segments
Net sales（Billions of yen）

2021

2020

Y-o-Y change
Amount%Consumer
Products

2３５.０

229.7

5.2

2.3

Industrial
Products

32.0

31.5

0.4

1.4

Overseas

95.0

91.2

3.7

4.2

Other

3.0

2.8

0.1

6.0

365.0

355.3

9.6

2.7

Consolidated
Total

Lion Corporation. All rights reserved. 42

Fiscal 2021 Forecast of Change Factors Affecting Core Operating Income
Profit forecast to decrease, reflecting sales mix changes (recoil from positive effects of COVID-19),
increases in competition-related expenses and depreciation expenses, and market factors（Billions of yen）

35.9

Core operating income for 2020

Increase in sales, product mix changes and others＋1.5

Total cost reduction (raw materials, logistics)＋1.0

Impact of
COVID-19(1.0)(1.5 )

Effect in raw material prices

Impact of
COVID-19(4.4 )

Increase in competition-related expenses(1.3)(2.5 )

Increase in other expenses

Impact of
COVID-19＋0.8Core operating income for 2021

24

30.0
26

28

30

32

34

36

38

40

Lion Corporation. All rights reserved. 43

Looking Toward 2021
● The Lion Group provides products that are essential todaily living. As such, we will maintain and reinforce
measures to prevent the infection of employees while
continuing business activities.
● We will design and implement systems that help improve

employee safety and professional fulfillment as we adapt
to and enhance new work styles.
● Positioning 2021 as the start of efforts to achieve ourvision for 2030, we will begin to steadily implement thegrowth strategies of Vision2030 and achieve steady
growth in business size (net sales).
Lion Corporation. All rights reserved. 44

Key Themes in 2021
Growth strategy

Key themes in 2021
〇 Building new business models that leverage individuals’ oral data
〇 Develop hygiene businesses for the new normal with COVID-19〇 Accelerate expansion in the Chinese market through domesticoverseas coordination〇 Advance inclusive oral care

〇 Build digital platforms for new value creation and work reforms〇 Stably operate the Sakaide Toothpaste Factory to expand thetoothpaste business in Japan and China〇 Build a new SCM management platform for timely and adequate
product supply〇 Build awareness of Vision2030 within the Group to realize themanagement vision〇 Reinforce operational changes and human resource development toexpand the Overseas business〇 Implement the Lion Professional Fulfillment Reforms in line with new
ways of working
Lion Corporation. All rights reserved. 45Example Initiative: Providing Value in Oral Health
Oral Health

Key theme: Accelerate expansion in the Chinese market
through domestic-overseas coordination

Simultaneous launch of new Lightee brand in Japan and China
A solution in response to a common insight inboth Japan and China—consumers want toimprove the appearance of their faces
through tooth whitening

We will realize Group synergy through a
unified rollout that includes productpackaging and communication(leveraging our brand strength as No. 1 in theJapanese oral care market)

Wed., March 31, 2021
Simultaneous launch inJapan and China

Within the whitening sub-category, whichboasts the greatest volume in the Chinese
toothpaste market, we will target theespecially fast-growing superhigh-end range

Lion Corporation. All rights reserved. 46

Shareholder Returns

Annual per-share dividend forecast up ¥1 to ¥24(increased for a sixth consecutive year)
25
20
15
10
5
0
Consolidated
payout ratio

Year-end dividendInterim dividend

¥10

¥13

¥17

¥20

¥21

¥23

¥24

12

12

10

11

10

10

11

12

10

8

5
5

5

7

2015

2016

2017

2018

2019

2020

2021

25.4％

23.6％

24.9％

22.7％

29.7％

22.4％

33.2％

Basic dividend policy
Return profits to shareholders on a continuous and stable basis(Consolidated payout ratio target: 30%)
Lion Corporation All rights reserved. 47

ＡＰＰＥＮＤＩＸ

Lion Corporation. All rights reserved. 48

Market Trends

Lion Corporation. All rights reserved. 49

Changes in Home Products Market
１）Market Environment for Home Products (38 markets, SRI*)
Overall market trend for the 38 home product markets in which Lion participates(Values are percentages of the results of the corresponding periods of the previous years)

2015

2016

2017

2018

2019

2020

Sales value

103

104

99

102

102

112

Unit sales

100

102

98

100

100

105

Average unit price

102

102

102

102

102

106

Source: INTAGE Inc. SRI Survey (data for 2015 are for 39; data for 2016 are for 38; data for 2017 are for 37; data for 2018 onward are for 38)２）Market Environment for Home Products (15 markets, SCI**)
Overall market trend for the 15 home product markets in which Lion participates(Values are percentages of the results of the corresponding periods of the previous years)

2016

2017

2018

2019

2020

Sales value

105

103

102

105

108

Unit sales

101

101

100

102

101

Average unit price

104

102

103

104

106

Source: INTAGE Inc. SCI survey* The SRI survey uses point-of-sales data from around 3,000 stores nationwide for its estimates.
** The SCI survey monitors around 50,000 shoppers nationwide for its sales data.

Lion Corporation. All rights reserved. 50

Changes in Home Products Market３）Market Environment for OTC Drug Market (7 markets, SDI)
Overall market trends in the seven drug markets in which Lion participates(Values are percentages of the results of the corresponding periods of the previous years)

2016

2017

2018

2019

2020

Sales value

104

103

102

100

93

Unit sales

102

101

101

99

89

Average unit price

101

102

101

101

105

Source: INTAGE Inc. SDI Survey (2016–2018, 8 markets)* Panel data changed from January 2019. Data for 2016 onward has been updated accordingly.

４）Market Environment for OTC Drug Market (2 markets, SCI)
Overall market trends in the two drug markets in which Lion participates(Values are percentages of the results of the corresponding periods of the previous years)

2016

2017

2018

2019

2020

Sales value

104

103

104

104

102

Unit sales

102

100

102

102

99

Average unit price

102

103

102

102

103

Source: INTAGE Inc. SCI survey

Lion Corporation. All rights reserved. 51

Market Trends
Y-o-Y comparison of consumer products markets
in Japan by in-store sales value (%)■Oral Care

■Beauty Care

Source: INTAGE Inc. SRI, SDI survey■Fabric Care

Toothpaste
Hand soaps

Fabric softeners

Body soaps
Toothbrushes
Laundry detergents■Living Care

■Pharmaceutical
Antipyretic analgesics
Household cleaners

Dishwashing detergents

Eye drops

The Y-o-Y dip in markets in September isa result of the demand surge ahead of theconsumption tax hike in October 2019
* Reference: Sales in home products
markets were up 32% Y-o-Y in
September 2019.
* Y-o-Y comparison with 2018 is shownwith dotted lines for July to December.

Lion Corporation. All rights reserved. 52

Market Trends (Overseas)
Source: Nielsen

Y-o-Y comparison of overseas markets (%)■Hand Soaps■Laundry Detergents
South Korea
Thailand
Malaysia

ThailandSouth Korea

Malaysia

Jan.–Nov. Sales by Country and Category
Thailand
Hand
soap
Laundry
detergent

１６８％

９３％

Malaysia
３４０％

９２％

South
Korea
２０１％

９９％

Hand Washing Habits(Consumers who wash 5 times/day or more)

Pre-COVID-19

Post COVID-19

ChangeSouth Korea

61.4%

80.3%

+18.9%

Thailand

45.0%

74.6%

+29.6%

Malaysia

60.9%

81.7%

+20.8%

China

27.1%

45.4%
+18.3%
当社調べ （20年9月、Web）
Lion Corporation. All rights reserved. 53

Impact of COVID-19

Lion Corporation. All rights reserved. 54

Impact of COVID-19 on Lion’s Financial Results
Oral care

・Not readily affected by COVID-19 as a product category
・While toothbrush replacement cycles are lengthening and demand for travel
products is stagnant, sales of toothpastes, mouthwashes and dental careproducts are growing, and the category is expanding (+4% Y-o-Y)

Laundry
detergents

・The share of antibacterial products is growing, reflecting rising hygieneawareness
・The category has shrunken slightly due to less frequent washing as a result ofefforts to stay home (-3％ Y-o-Y)

Dishwashingdetergents

・Average purchase size is increasing due to efforts to stay home
・Growth is mainly in antibacterial products, reflecting rising hygiene awareness(+12% Y-o-Y)

Householdcleaners

・Average purchase size is increasing due to efforts to stay home・In bath detergents, sales of LOOK Plus Bath Cleansing were strong(+44% Y-o-Y)

Hygienerelated

・Average purchase size is increasing
・Hand soap: +59％ Y-o-Y; Hand sanitizers: +266％ Y-o-Y

Body care

・Not readily effected by COVID-19 as a product category
・Driving market growth with the addition of new products (+6% Y-o-Y)

OTC drugs

・Sales of acne medicines and cooling sheets for feet were impacted by lower
demand from overseas visitors (-42% Y-o-Y)
・Sales of a new brand in dermatologic agents were strong, and the category
grew considerably (+170% Y-o-Y)
Lion Corporation. All rights reserved. 55

Lion’s Response to COVID-19

Ensuring employee
health and safety●Promoting telecommuting and establishing a full-flex
system●Increasing work efficiency by proactively moving
meetings online

Fulfilling our supply
responsibility●Increasing hand soap supply capacity●Emergency production of highly concentrated ethanol(for institutional use)

Engaging in
Social activities●Providing information on hand washing methods, etc.
●Supporting medical professionals●Donating money and goods to single-parent households
through an NPO●Donating money and goods to a support center for
non-profit children’s facilities nationwide

Lion Corporation. All rights reserved. 56

Four Fields of Value Creation

Lion Corporation. All rights reserved. 57

Reference Materials

Lion Corporation. All rights reserved. 62

Consolidated Statement of Income(Billions of yen)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses

Core operating income
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit of investments
accounted for using the equity method

Profit before tax
Income taxes
Profit for the period
Profit for the period attributable tonon-controlling interests
Profit for the period attributable to ownersof the parent

2020

Y-o-Y change

2019

Amount

%

355.3

347.5

7.8

2.3

175.4

175.5

(0.1)

(0.1)

179.8

171.9

7.9

4.6

143.9

141.8

2.0

1.4

35.9

30.0

5.8

19.6

12.2

1.5

10.7

706.1

4.1

1.7

2.3

137.0

44.0

29.8

14.2

47.7

0.6

0.7

(0.0)

(9.6)

0.1

0.1

(0.0)

(12.7)

(0.１)

0.9

(1.0)

-

44.4

31.4

13.0

41.7

１２.５

8.4

４.１

48.9

31.9

22.9

8.9

39.1

2.0

2.4

(0.3)

(13.9)

29.8

20.5

9.3

45.3

Lion Corporation. All rights reserved. 63

Selling, general and administrative expenses
2020(Billions of yen)

Y-o-Y change

2019

Amount% ofsales (%)

Amount% ofsales (%)

Selling, general andadministrative expenses

143.9

40.5

141.8

40.8

2.0

1.4

Sales commissions

9.4

2.7

9.1

2.6

0.2

2.8

26.9

7.6

26.2

7.5

0.6

2.6

24.9

7.0

25.1

7.2

(0.1)

(0.7)

Transportation andwarehousing expenses

18.8

5.3

19.7

5.7

(0.9)

(4.7)

R&D expenses

10.9

3.1

10.9

3.1

(0.0)

(0.3)

Other expenses

52.8

14.9

50.6

14.6

2.2

4.4

Promotional
expenses
Advertisingexpenses

Amount%Lion Corporation. All rights reserved. 64

Consolidated Statement of Financial Position(Billions of yen)
Current assets

2020

Change

2019

245.4

222.4

22.9

Cash and cash equivalents

121.5

110.4

11.1

Trade and other receivables

62.4

61.7

0.6

Inventories

45.1

43.5

1.6

Non-current assets

190.0

158.2

31.8

Property, plant andequipment

118.3

90.9

27.4

Intangible assets

18.9

13.4

5.4

Right-of-use assets

4.8

5.9

(1.0)

Other financial assets

24.8

25.5

(0.6)

435.5

380.7

54.7

Total assets

Lion Corporation. All rights reserved. 65

Consolidated Statement of Financial Position(Billions of yen)
Current liabilities

2020

Change

2019

166.6

135.7

30.9

141.2

116.2

24.9

Lease liabilities

1.3

1.4

(0.1)

Other current liabilities

8.7

7.6

1.0

24.0

23.7

0.2

Retirement benefit liabilities

13.0

12.0

0.9

Lease liabilities

4.6

5.5

(0.8)

244.8

221.2

23.6

Share capital

34.4

34.4

-

Capital surplus

34.9

34.7

0.1

Treasury stock

(４.７)

(4.7)

0.0

Other components of equity

10.0

11.3

(1.2)

156.9

132.6

24.3

435.5

380.7

54.7

Trade and other payables

Non-current liabilities

EquityRetained earnings
Total liabilities and equity

Lion Corporation. All rights reserved. 66

Consolidated Statement of Cash Flows(Billions of yen)

2020

2019

ChangeCash flows from operating activities

40.7

36.7

3.9

Cash flows from investing activities(19.8)(20.7)

0.8

Cash flows from financing activities(9.1)(10.5)

1.4

Effect of exchange rate changes oncash and cash equivalents

(0.5)

(0.0)

(0.5)

Net increase (decrease) in cash andcash equivalents

11.1

5.4

5.6

Cash and cash equivalents at beginningof period

110.4

104.9

5.4

Cash and cash equivalents at end of
period

121.5

110.4

11.1

Lion Corporation. All rights reserved. 67

Capital Expenditures and Depreciation and Amortization Expenses(Billions of yen)

Depreciation and Amortization Expenses

Capital Expenditures

50

47.5

Jul.-Dec.
Jan.-Jun.

35.5

40

30.8

30

23.6
20

14.9
10

0

8.8

9.4

4.9

5.6

3.9

3.8

9.4

5.5

16.6

13.5

14.3

11.1

9.4
16.7
7.2

9.3

2015 2016 2017 2018 2019 2020 2021
Forecast

10.2

9.3

5.7

5.1

4.1

4.5

5.4

5.1

5.2

4.3

8.8

10.5

11.7

5.5

6.2

4.9

5.5

2015 2016 2017 2018 2019 2020 2021
Forecast* Capital expenditures and depreciation expenses both include intangible assets.

Lion Corporation. All rights reserved. 68

2021 Consolidated Financial Forecast
Y-o-Y change(Billions of yen)

2021

2020
AmountNet sales
Core operating
income% of net sales

Operatingprofit% of net sales

Profit for theperiodattributable toowners of parent%

Jan.– Jun.
2021

Jan.– Jun.
2020

Y-o-Y change
Amount

%

365.0

35５.３

９.6

２.７

173.0

169.1

3.8

2.3

30.0
8.2

35.９
10.１

(5.９)

(1６.5)

11.5
6.6

16.3
9.7

(4.8)

(29.8)

30.0
8.2

4４.０
12.４

(1４.０)(3１.９)

11.5
6.6

25.9
15.4

(1４.4)(55.7)

21.0
5.8

２９.８
8.4

(８.８)

(2９.7)

8.0
4.6

18.6
11.0

(10.6)(57.0)

７２.２４

102.75(３０．５１)(２９.７)

27.52

64.06

(36.54)(57.0)% of net sales

EPS（Yen）

Lion Corporation. All rights reserved. 69

2021 Sales to External Customers Forecast
Y-o-Y change(Billions of yen)

2021

2020
Amount%Jan.– Jun.
2021

Jan.– Jun.
2020

Y-o-Y change
Amount%Consumer
Products

2３５.０

229.7

5.2

2.3

110.0

108.1

1.8

1.7

Industrial
Products

32.0

31.5

0.4

1.4

16.0

15.1

0.8

5.3

Overseas

95.0

91.2

3.7

4.2

46.0

44.3

1.6

3.8

Others

3.0

2.8

0.1

6.0

1.0

1.4

(0.4)

(31.5)

365.0

355.3

9.6

2.7

173.0

169.1

3.8

2.3

Consolidated
Total

Lion Corporation. All rights reserved. 70

Fiscal 2021 Forecast of Change Factors Affecting Core Operating Income

Impact on income(Billions of yen)

Assumptions atstart of year

Sales, product mix and others+1.5

Total cost reduction(cost of sales, logistics, etc.)+1.0

Raw material prices(1.5)

Competition-related expenses(4.４)

Other expenses

(2.5)

Total

(5.９)

Lion Corporation. All rights reserved. 71

Assumed Raw Material Prices and Exchange Rates
Raw material prices
2021
forecasts

Dubai Crude

Domestic Naphtha

Crude Palm Oil$56.0/BBL

JPY35,000/KL

3,800RM/ton

Exchange Rates
2021
forecasts

U.S. Dollar

Thai Baht

JPY104.0

JPY3.40

Dubai Crude

Domestic Naphtha

Crude Palm Oil$42.4/BBL

JPY33,091/KL

2,810RM/ton

U.S. Dollar

Thai Baht

JPY106.4

JPY3.40◇Reference
2020
actual

2020
actualLion Corporation. All rights reserved.

72

The forecasts and projected operating results contained in thisreport are based on information available at the time of
preparation, and thus involve inherent risks and uncertainties.
Accordingly, readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors.
* The Lion Group applies the International Financial Reporting Standards (IFRS) .
* Monetary amounts herein are truncated after the last digit shown.

73