August 8, 2022
Lion Corporation

Analyst Q&A (Summary)First Half Ended June 30, 2022
Business Performance
Q: Looking at how core operating income exceeded the plan for the first half of the year,
could you tell us, quantitatively, how each segment did?
A: Since we do not disclose segment profit targets, we cannot say exactly how much core
operating income exceeded these targets. But, in broad terms, sales in the Overseas
and Industrial Products segments exceeded the plan, and the sound progress of efforts
to pass on price increases to consumers also contributed to the higher-than-expectedincome.
Q: You listed segment composition changes as having a negative ¥1.3 billion impact oncore operating income compared with the initial forecast. Could you tell us more about
this?
A: The figure for segment composition changes is calculated to show only the effect of thethose changes, that is, how much profit would have changed if each segment’s profit
margin were exactly the same as last year. The segment composition changes caused anincrease in the shares of total sales attributable to the Overseas and Industrial Productsbusinesses and a decrease in sales attributable to the Consumer Products business,
which has the highest profit margin among our segments. Because of this shift, profit
saw a negative ¥1.3 billion impact, even though total net sales increased.
Q: Slide 15 shows a positive ¥5.2 billion impact for the full year from raising sales prices
and revising the prices and frequency of special sales in response to the increase in raw
material prices. Could you give us a breakdown of that figure? Also, there has been a
lot of talk about companies raising their prices. Is there any change in Lion’s stance on
price increases?
A: The impact of sales price increases and effective increases via revisions to special saleprices and frequency in the second half is expected to amount to a positive ¥3.3 billion
compared with the initial forecast. In Consumer Products, we will take measures thatwill lead to an effective increase in retail prices in the second half, mainly in the fourthquarter. We hope to absorb about half of the higher-than-expected increase in raw
material prices through these price increases and to cover the remainder through cost
reductions and streamlining.

Forecasts
Q: Please tell us your thoughts about allocating costs and profit in 2023. If raw material
prices continue to fall steadily, and since the depreciation of the Sakaide Toothpaste
Factory will be the same as the previous year, it seems like you should see an increasein profit next year.
A: We hope to ensure that this year’s core operating income is the lowest it will go and toraise it next year and beyond. However, while raw material costs are decreasing from
temporary highs, the yen remains weak, and we cannot be overly optimistic. Toincrease profit, we will work to improve gross profit by firmly growing sales while
focusing efforts on the four measures shown on slide 16.
Q: Qingdao Lion saw a year-on-year decrease in first half sales (total net sales on a local
currency basis). What do you expect for second half sales? How are changes in ecommerce in China, such as the growth of new platforms, affecting Lion?
A: In household consumer products, platforms are diversifying, and I think that ourresponse has been adequate. In online channels, we decided to change agents for someof the major platforms in order to strengthen our business over the long term. As aresult, sales are temporarily stagnant. However, in offline channels, which we havebeen reinforcing this year, sales have been strong.
Q: I would like to know your thoughts on the target figures for 2024. If you maintain thecurrent sales price increases, which were not included in your plans at the start of theyear, and raw material prices fall, do you expect the effect of price increases (higherthan-planned profit) to continue into 2024?
A: When we formulated the Vision2030 1st STAGE plan (for 2022-2024), we did not factor
in the current rise in raw material prices or the effects of raising our sales prices.
However, I do not think that if raw material costs decrease, just the positive effects ofour price increases will remain, leading to increased profit. We are determined to stickto our targets for 2024, and we aim to achieve them by steadily implementing the fourmeasures shown on slide 16.
Other
Q: What is the purpose of the major new product launch to be announced in November?
A: Our basic strategy has been to expand the top line and improve profitability by moving
the market toward higher-added-value products. We have achieved a certain level ofsuccess with this in the oral care and other fields, but we have not been able to shift
toward higher added value in the fabric care field, which has been a major challenge. It
took some time, but we are now finally almost ready to launch major new, innovativeproducts.

Q: How will you monetize Okuchi Plus You?
A: The services offered under Okuchi Plus You will incorporate saliva testing and support
content, such as e-learning, into the oral care seminars for corporate customers that wehave already launched. We will charge for saliva tests and support content, but thelevel of support will graded according to the customer’s number of employees and othercircumstances, and prices will be determined individually.

Disclaimer
The contents of this document comprise a summary of the views of the Company expressed
during the question and answer portion of a quarterly financial results conference. This
document does not guarantee the accuracy or completeness of the information contained herein
and is subject to change without notice. Furthermore, forecasts, results projections and otherforward-looking statements are based on certain assumptions judged by the Company to bereasonable in light of information available at the time of preparation and do not constitutepromises or guarantees. Please be advised that a wide range of factors may cause actual results
to differ significantly from the forward-looking statements made herein.