Financial Results for the
Fiscal Year Ended
December 31, 2021
Lion Corporation
February 14, 2022

Contents

・Fiscal 2021 Financial Results・Working toward 2030:▶Vision２０３０▶New Medium-Term Management Plan:
Vision2030 1st STAGE 2022–2024
・Fiscal 2022 Financial Forecast2

Contents

・Fiscal 2021 Financial Results
・ Working toward 2030:▶Vision２０３０▶New Medium-Term Management Plan:
Vision2030 1st STAGE 2022–2024
・Fiscal 2022 Financial Forecast
3

Fiscal 2021 Financial Results Highlights
Comparison to Forecast (revised 7/30)
Sales and profit met forecasts(net sales: +¥1.2 billion; core operating income: +¥0.9 billion)〇 Net sales were driven by the Overseas and Industrial Products businesses〇 In core operating income, rising raw material costs were absorbed by increased sales andstreamlined expenses

Y-o-Y Change
Sales increased, profit decreased(net sales: +¥10.8 billion; core operating income: -¥5.0 billion)〇 Sales in Consumer Products were about level year on year, despite recoil from strong sales ofhand soaps, etc., in 2020; sales in Overseas and Industrial Products rose, reflecting, respectively,
strong performance in China and recovery in the chemical market〇 Despite total cost reductions, rising raw material costs and competition-related expenses
resulted in decreased core operating income〇 Operating profit and profit for the period attributable to owners of the parent decreased due tothe drop in core operating income and recoil from a gain on transfer of non-current assets (landLion’s head office occupies) recorded in 20204

Market Trends
Period: Jan.–Dec. 2021; Source: INTAGE Inc. SRI+

Aggregate of
Key Domestic
Markets

In the 38 home product markets surveyed, sales value fell 5% year on
year, reflecting a decrease in sales volumes of hand soaps andhousehold cleaners due to year-on-year recoil

Oral Care✔ Toothpaste unit prices continued to increase, reflecting increased hygieneawareness (sales value up 2% Y-o-Y)✔ Toothbrush unit prices continued to rise, and sales volumes recovered
to the 2020 level from July to December (sales value changed 0% Y-o-Y)

Beauty Care✔ Hand soap sales volumes fell significantly due to recoil from expansion in 2020
but were still up almost 40% from 2019 (sales value down 30% Y-o-Y)

Fabric Care

✔ Laundry detergents and fabric softeners saw higher unit prices due to a shift
to larger size products(laundry detergent sales value up 5% Y-o-Y; fabric softener sales value up 3% Y-o-Y)

Living Care

✔ Dishwashing detergent unit prices rose due to a shift to larger size products reflecting more
frequent use (sales value up 1% Y-o-Y)✔ Household cleaner sales volumes fell due to recoil from the previous year
(total sales value of home cleaners, bath detergents and bathroom detergents down 1% Y-o-Y)

Pharmaceutical✔ Antipyretic analgesic sales volumes increased due to an increase in demand related to treating
COVID-19 vaccine side effects (sales value up 18% Y-o-Y)✔ Eye drop unit sales were level year on year, as the absence of demand from overseas visitors
was unchanged from the previous year (sales value up 1% Y-o-Y)
Period: Jan.–Dec. 2021; Source: Nielsen

Aggregate of
Key Overseas
Markets

Market for hand soap expanded compared to 2007 (increased in
Thailand by 80%, Malaysia by 180% and South Korea by 60%)
Sales of laundry detergents continued to shrink Y-o-Y due tostagnation in consumption

5

Fiscal 2021 Consolidated Financial Results
Despite a Y-o-Y increase in sales, profit fell Y-o-Y due largely to rises in raw material prices and competitionrelated expenses, but exceeded forecasts
Deviation fromrevisedforecast

Y-o-Y change(Billions of yen)

2021

2020

Amount%(% deviation)

3.1

1.2

（1.9*５）（0.3）

Net sales

366.2

35５.３

10.8

Core operating income*¹% of net sales

30.9

35.9

8.4

10.１

(5.0)

(14.0)

Operating profit% of net sales

31.1

4４.０

8.5

12.４

(12.8)(29.3)

Profit for the period
attributable to owners of parent

23.7

29.8

(6.1)

(20.5)EPS (Yen）

81.73

102.75(21.02)(20.5)EBITDA*²

45.1

47.6

(2.4)

(5.2)

－

12.3

13.4

(1.1)PP－ROIC（％）*4

8.8

10.7

(1.9)PP－

ROE（％）

9.8

13.6(3.8)PP－EBITDA margin (%) *³

Notes

0.9
（3.1）

1.1
（3.9）

2.2
（10.5）

7.78（10.5）

1. Core operating income is an earnings indicator the Company uses to measure regular business performance by subtracting general and administrative expenses from gross profit. selling,
2. EBITDA: An indicator of profitability on a cash basis calculated as the sum of core operating income and depreciation and amortization.
3. EBITDA margin: The ratio of EBITDA to consolidated net sales.
4. ROIC is an indicator calculated from net operating profit after tax (NOPAT) divided by the average invested capital (total equity plus interest bearing liabilities) during the period, and measures the efficiency andprofitability of the invested equity.
5. Y-o-Y change at constant currency excluding exchange rate fluctuations

6

Year-on-Year Changes in Core Operating Income
Increased sales led to increased gross profit, and total cost reduction helped boost profit, but
increases in depreciation and amortization, raw material costs and competition-related expenses
led to an overall decrease
Core operating incomefor 2020
2020年事業利益

35.9

Changes in sales, product mix
売上増減・構成変化等の影響
and others+0.5

Total cost reduction
ﾄｰﾀﾙｺｽﾄﾀﾞｳﾝ（原価、物流）(raw materials, logistics)+1.2

Increase in raw material
prices
原材料価格の上昇(3.7)

Increase in competition-related
競争費用の増加
expenses(2.0)

Increase in otherその他経費の増加
expenses(1.0)

2021年事業利益
Core operating incomefor 2021
億円(Billions of yen)

24.0
240

30.9
26.0
260

28.0
280

30.0
300

32.0
320

34.0
340

36.0
360

38.0
380

7

Results by Business Segment
Industrial Products saw increases in sales and profit, due to increases in the chemical field, but Consumer
Products and Overseas saw increased sales but decreased profit due partly to higher raw material costs
Segment profit(Core operating income）

Net sales(Billions of yen)

202１

20２０

Y-o-Y change
Amount202１, %%

Consumer
Products

247.0

245.4

1.5

0.6

19.0

229.5

229.7

(0.1)

(0.1)

（7.7）

Industrial
Products

61.2

55.0

6.2

11.3

２.6
（4.3）

Overseas
Other
Adjustment
Consolidated
Total

34.7

31.5

3.2

10.2

109.2

101.6

7.6

7.5

98.7

91.2

7.5

8.2

（5.5）

27.8

34.8

(6.9)

(19.9)

２.１

3.1

2.8

0.3

12.9

（7.7）

(79.2)(81.6)

2.4

-

(0.0)

0.0

(0.0)

-

366.2

355.3

10.8

3.1

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

6.0

Y-o-Y change
Amount(5.6)(22.8)

0.4

22.0

(1.1)

(15.9)

(0.1)

(7.3)

(1.0)

1.4

３0.9

(5.0)

（8.4）

%

-

(14.0)
8

Consumer Products Business Net Sales by Product Category
Sales increased, except in beauty care, which suffered Y-o-Y recoil
Net sales(Billions of yen)

202１

20２０

Y-o-Y change
Amount%Oral Care

69.4

66.4

3.0

4.5

Beauty Care

24.7

31.4

(6.7)

(21.5)

Fabric Care

60.6

59.1

1.5

2.6

Living Care

25.1

24.0

1.0

4.5

Pharmaceutical

25.3

23.8

1.4

6.2

Other

41.7

40.5

1.2

3.0

Total

247.0

245.4

1.5

0.6

9

Overseas Business Results by Region
Sales in Southeast Asia increased due to stronger sales promotion of laundry detergents, but
profit decreased due to rise in raw material costs
Sales in Northeast Asia increased, driven by strong sales in China which continued to be strong
due to strengthened sales promotion in e-commerce and live commerce

Net sales(Billions of yen)

202１

20２０

Core operating income

Y-o-Y change
Amount

%

202１

20２０

Y-o-Y change%

AmountSoutheast
Asia

68.7

66.4

2.3

3.5

3.7

5.1

(1.3)

(26.3)

Northeast
Asia

40.4

35.1

5.3

15.1

2.2

2.2

0.2

10.2

Total

109.2

101.6

7.6

7.5

6.0

7.1

(1.1)

(1.5)

*Y-o-Y change at constant currency excluding exchange rate fluctuations:Southeast Asia: +1.3% (Thailand: +0.9％, Malaysia: +1.4％);
Northeast Asia: +6.3% (China*: +21.7％, South Korea: -4.7％); * Qingdao Lion
Total: +3.1%
10

Contents

・Fiscal 2021 Financial Results・Working toward 2030:▶Vision２０３０▶ New Medium-Term Management Plan:
Vision2030 1st STAGE 2022–2024
・Fiscal 2022 Financial Forecast
11

Purpose-Driven Management
We will reinforce management driven by our purpose:

Make a difference in everyday lives by redesigning habits

12Vision for 2030

13

The Past Decade and Future GrowthProfitability grew significantly over the past 10 years; we aim to further expand
corporate value going forward
600*Figures for 2011–2017 are calculatedusing operating profit under Japanese
GAAP

Net sales

The Past 10 Years
Increased profitability% of net sales

Net Sales (billions of yen)

500

400
300

nxv

（

200
100

Ratio of core operating
income to net sales (%)

Net Sales▮Shift toward higher-added-value
products (unit price>volume)▮Advanced structural reforms‣Consolidated the chemicals business‣Reorganized domestic production sites‣Consolidated domestic logistics companies‣Rationalized point-of-sale management
Etc.

The Next 10 Years
Increase corporate value by
expanding our presence

V-1 Plan

V-2 PlanLIVE Plan▮Expand overseas and new businesses▮Maximize up-front investment▮Continually reinforce futureoriented growth investment

14

Management Theme for the Run-Up to 2030

Enhancing Lion’s market, economic and social presence
Achieve business growth by putting our purpose—Make a difference in everyday lives byredesigning habits—into action *1*1 Business growth = More contact with consumers × More targets × More areas

Realize an upward corporate value expansion spiral*2*2 Up-front investment ⇒ Business growth ⇒ Cash flow generation ⇒ Reinvestment/multi-stakeholder returns ⇒ Further growth..

Corporate value
expansion spiral

Key indicators
Sales growth rate

EBITDAROIC*3 Multi-stakeholder returns

15

Vision2030 Long-Term Strategic Framework
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 ofa sustainable society and achieve business growth.

16Vision2030 Targets
Increase corporate value by enhancing economic value through contribution to
the realization of a sustainable society

Social value

Economic value

Contribute to a sustainable society

Net sales▶Enhance consumer QOL▶Contribute to the realization ofa decarbonized, resource-circulating society

EBITDA*
Core operating income¥600

Approx.
billion(Approx. 50% from theOverseas Business)¥80 billion
Approx. ¥50 billion
Approx.

Create environmentally friendly habits with consumers

ROIC

8–12％

▮Decarbonized society: Create water- and power-saving habits▮Resource-circulating society: Create refill habits
and waste-free habits (recycling)ROE

10–14%* EBITDA: Core operating income + depreciation and amortization(excluding depreciation and amortization of right-of-use assets

17

Envisioned Growth in the Run-Up to 2030
In addition to steady growth of existing businesses and improvement of business efficiency by reviewing thebusiness portfolio, we aim to achieve business growth by promoting sustainability strategies, expanding into
new countries and areas, and creating new businesses

Envisioned growth in the run up to 2030

Sales growth (compared with 2021)+¥240 billion

Advancesustainability strategy

Accelerate growth infour fields of value
creation

New business (+¥30 billion or more)
Secure profit opportunities from new business models

Expand in new countries and areas(+¥60 billion or more)
Focus on entering new markets in Asia

Existing overseas business (CAGR around 10%)
*Around 5%–6%, excluding Qingdao Lion
Realize growth centering on the Qingdao Lion business(¥100 billion)+¥45 billion

Existing domestic businesses (CAGR of 2% or more)
Evolve existing businesses by shifting to value-added products andcreating markets

2024

2027

2030
18

Envisioned Growth in the Run-Up to 2030
Key points of global strategy
1. Evolve glocalization to maximize synergy 2. Expand into new countries and areas 3. Evolve global operations

Envisioned growth in the run up to 2030

Sales growth (compared with 2021)+¥240 billion

Advancesustainability strategy

Accelerate growth infour fields of value
creation

New business (+¥30 billion or more)
Secure profit opportunities from new business models

Expand in new countries and areas(+¥60 billion or more)
Focus on entering new markets in Asia

Existing overseas business (CAGR around 10%)
*Around 5%–6%, excluding Qingdao Lion
Realize growth centering on the Qingdao Lion business(¥100 billion)+¥45 billion
Existing domestic businesses (CAGR of 2% or more)
Evolve existing businesses by shifting to value-added products
and creating markets

2024

2027

2030
19

Overview of Global Strategy in the Run-Up to 2030
Evolve the glocalization strategy from its previous country/area focus to a regional focus (bydefining market types), achieve strong growth in current countries and expand into new
countries and areas to expand the redesign of habits in Asia

Evolving the glocalization strategy

Glocalization
Country/area focus

Regional focus (marketing by type)

Until now (country/area focus)

Going forward (regional focus/market classification)

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

Define cross-border market types in light of countries’
characteristics and trends identified through theglocalization strategy

×Adapting to environmental changes
Regions: Definition of common lifestyleand need types

Maximize synergy and advance efficient, effective
business management through management andbusiness approaches tailored to each market type
Evolve strategy promotion foundations(global operations)20

Global Strategy (Market Type-Based Marketing)
Evolve from the previous country/area focus to a regional focus (by defining market types) andadvance more efficient and effective business management

Market-type framework (types I–III)
Expand global business throughmarket type-based marketing▶ Scale expansion throughproduct and distribution
synergy maximization andefficient, effective business
management▶ Category expansion throughinsights in each market type(product strategy, marketingstrategy, channel strategy, etc.)
and entry into new countries,
areas and fields based on past
successes

21

Global Strategy (Market Type-Based Marketing)
Aim for around ¥240 billion in net sales based on the growth of Qingdao Lion (approx. ¥100 billion) and continue
growth in other countries where we currently operate (approx. 5% CAGR)

Growth in countries where we currently operate
The past 10 years(Growth, with 2011 as 100)

The next 10 years(IFRS net sales)

Growth areas(Billions of yen)

150
1,500

200

180

Consolidated
Group(excluding
QingdaoLion)

2011→2020
CAGR: 6.9%

1,200
120

160

900
900

140

60
600

120

300
30

140

2021→2030
CAGR: 5.3%

▶ Quality-based growth in laundry detergent
Advance shift to value-added products throughoptimal formula (market type) strategy(Secure the top market share in each country)

92▶ Expand into the personal care field
Move into personal care (oral care, beauty care, etc.)
based on expertise from success in home care

0

100

2021

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2022

2023

2024

2011→2020
CAGR: 16.2%

・・・

2030

(Billions of yen)

120
1,200

400

100

2021→2030
CAGR: 21.8%

900
90

300

Qingdao
Lion▶ Scale expansion based on e-commerce
reinforcement

Type III (mainly Northeast Asia
+ urban Southeast Asia)▶ Leverage Japanese brands to shift tovalue-added products▶ Reinforce mouthwashes to generatesynergy with toothpastes

600
60
200
300
30

Types I–II (mainly Southeast Asia)▶ Expand contacts with consumers through１7

more sophisticated e-commerce100
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0
2021

2022

2023

2024

・・・

2030

☞See the next page for details on the expansion of Qingdao Lion

22

Global Strategy (Expand Business of Qingdao Lion)
Positioning China as our most important market, we aim for sales of ¥100 billion in 2030 (from approx. ¥17 billion in 2021)
Based on oral care and e-commerce, the core of our existing business, we will expand our business domains(categories × channels × areas)

Achieved(ex. SYSTEMA,
CLINICA)+

Local brands(ex. Huayubai)

Increased sales 150% throughoral care × e-commerce × targeting(from sales in 2018 at local currency)

FutureSecured recognition of Lion quality based on the
made-in-Japan image▮ Further strengthen oral care, our top-priority
category▮ Branching out from oral care, expand into
related fields▮ Establish innovation generation bases(technologies, products, businesses)

Maximize daily contact with the oral care business’s target users
to expand the business domain (categories, channels, areas)
Channels/areas

New

Global brands

Expand business of Qingdao Lion, with the oral carebusiness as a starting point

Existing

Evolving the Qingdao Lion business

Regional
citiesReinforce retailstores (coastal)

Oral care×
E-commerce

D2C business
Services
Personal carePet
For dental
clinics
Commercial-use
Category

Existing

New

Key Points for Realizing the Strategy❏Concentration and shift of management resources(mid-career hiring, reinforce local personnel in key roles)❏Reinforce promotion foundations(establish promotion office, global operations）

23

Global Strategy (Expand into new Countries and Areas)
Strengthen the M&A apparatus and aim to enter at least 4 new countries and areas by 2030
(1st STAGE: 2 or more countries and areas)

Expand into new countries and areas❏Focus on expanding in Asia: Aim to enter more than 2 countries and areas by 2024
❏Enhance the M&A apparatus: Create a dedicated unit under the direct control of the president,
reinforce by hiring mid-career specialists◆Forecast growth of the middle-class,the driver of consumption▶Asia’s middle class is expected to expand
significantly in the future

Source: Global Economy and Development◆Candidate countries
Country

Populationin 2020(millions ofpeople)India

1,367.6

1,928

4.2

Pakistan

204.7

1,225

1.9

Bangladesh

166.6

1,962

8.2

Philippines

107.3

3,323

6.0

Vietnam

96.5

3,525

7.0

・
・
・

・
・
・

・
・
・

・
・
・

Source: IMF 2020

Per-capita GDP growth
GDP (US$)rate (%)

Source: IMF 2020

Source: ADB Dec., 202024

Envisioned Growth in the Run-Up to 2030
Key points of growth through the evolution of existing domestic businesses and new businesses➡Offer new products and services based on the four fields of value creation
Envisioned growth in the run up to 2030

Sales growth (compared with 2021)+¥240 billion

Advancesustainability strategy

Accelerate growth infour fields of value
creation

New business (+¥30 billion or more)
Secure profit opportunities from new business models

Expand in new countries and areas(+¥60 billion or more)
Focus on entering new markets in Asia

Existing overseas business (CAGR around 10%)
*Around 5%–6%, excluding Qingdao Lion
Realize growth centering on the Qingdao Lion business(¥100 billion)+¥45 billion

Existing domestic businesses (CAGR of 2% or more)
Evolve existing businesses by shifting to value-added
products and creating markets

2024

2027

2030
25

Goals and Approach in the Four Fields of Value Creation
Accelerate business evolution and new value creation to become
an advanced daily healthcare company
Oral Health
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 integrateinnovative oral care products and services into the daily lives of individuals as a new from of
healthcare. By doing so, we seek to realize business expansion beyond the bounds of ourexisting businesses.

Infection Control
Becoming a hygiene solution provider by addressing all kinds of risk related to infectious
diseaseAs 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 and viruses on all fronts―bodies, objects andspaces ―by providing hygiene solutions.

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

Well-Being
Becoming a total healthcare servicer for the mind and body
We will transform into a total healthcare servicer that supports health and happiness ateach 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.

26

Business Evolution in Four Fields of Value Creation
We will accelerate evolution away from conventional business models, starting with the four
fields of value creation

Until now

Going forward

Value provided

Tangible things(functional value)

Intangible things(experiencebased value)

TargetIndividuals(Personal)

Society(Schools, public
institutions, etc.)

Contacts with
consumers

Sold-and-done

Recurring

Business type

Manufacturer

Servicer

Scope ofcoordination

Supply chain

Ecosystem
27

Envisioned Growth in the Run-Up to 2030
Key point of sustainability strategy
Achieve both business growth (economic value enhancement) and social value enhancement
Envisioned growth in the run up to 2030

Sales growth (compared with 2021)+¥240 billion

Advancesustainability strategy

Accelerate growth infour fields of value
creation

New business (+¥30 billion or more)
Secure profit opportunities from new business models

Expand in new countries and areas(+¥60 billion or more)
Focus on entering new markets in Asia

Existing overseas business (CAGR around 10%)
*Around 5%–6%, excluding Qingdao Lion
Realize growth centering on the Qingdao Lion business(¥100 billion)+¥45 billion

Existing domestic businesses (CAGR of 2% or more)
Evolve existing businesses by shifting to value-added products
and creating markets

2024

2027

2030
28

Sustainability and Environmental Strategy
in the Run-Up to 2030
As a member of society ambitiously talking on environmental problems, we will contribute to therealization of a decarbonized, resource-circulating society through co-creation with consumers
Accelerating efforts to addressenvironmental problems

Lion’s basic approach to environmental strategy

Accelerating efforts to achieve the Paris
Agreement targets

Target for 2050
Decarbonized society: Carbon negative
Resource-circulating society: Using recirculating plastic

Lion’s approach to initiatives
De-facto adoption of 1.5°C
temperature increase target at COP26

Creating environmentally friendly habits with consumers▶The many points of contact we have with consumers, a result of putting our purpose
into practice, is a strength of Lion.
With the new LION Eco Challenge 2050 environmental objectives at the center of ourstrategy, we will create environmentally friendly habits with consumers to expand
the scope of our contribution to society as a whole.
▶We will prioritize speed in creating environmentally friendly habits. We will createmodels for doing so quickly by collaborating with other industry actors and companies,
creating habits for Japan and adapting them for Asia, as well.

29

Sustainability and Environmental Strategy
in the Run-Up to 2030
Lion will help decrease residential environmental impact emissions—a significant factor—to impactfully
contribute to society
Lion will help reduce residential CO2 emissions,which represent about 15% of all CO2 emissions
in Japan

Promote the spread of refill habits in Asia, reduce
plastic use and promote recycling habits

Japan’s CO2 Emissions

Lion’s plastic use and reduction effects(Ministry of the Environment data, 2019)* In the eight fields covered by the Japan Soap and Detergent Association

Other
Industrial
processes

Energy transformation

Residential

Japan’s fiscal 2019 CO2emissions by sector
Commercial
and other

Indirect emissions

Industry

Packaging used (t)Waste■Plastic use in bottles■Plastic use in refill products■Reduction from refill products■Reduction from moreconcentrated products

78%
reduc
tion

Approx. 1,107,940 kt
Source: Greenhouse Gas Inventory Officeof Japan

Transport

In Japan, the use of refill products and more concentrated products
has reduced plastic use by almost 80%(In Japan, refill products account for 80% of sales in these categories)

30

Sustainability and Environmental Strategy
in the Run-Up to 2030
Spreading water- and power-saving habits and refill habits in Asia to reduce
environmental burden in the home

Social value
creation policy
Targets for 2050
KGI

Create environmentally friendly habits with consumers to continuously
offer planet-friendly lifestyles that make more sustainable living easy

Decarbonized society
Carbon negative‣ Foster water- and power-saving
habits by providing environmentallyfriendly products➡Reduce product life cycle CO2 emissions
30% (Lion Group)

Key themes(KPIs for 2030)‣Create environmentally friendly habitsthat can be practiced at home to
reduce society’s CO2 emissions
by using Lion’s products and services➡Achieve a CO2 emission reduction effect inexcess of Lion’s own emissions (Japan)

Ex. Water-saving
habit: One-rinse
washingResource-circulating society
Use recirculated plastic‣Expand use of sustainable
materials➡ 30% usage (Lion Group)‣Foster refill habits in Asian markets➡ 50% refill product sales (Lion Group)‣Expand advanced recycling initiatives
to foster waste-free habits➡ Build collaborative industry
infrastructure (Japan)

Ex. Reduce plastic use▶Compact products▶Refill product31

Sustainability Indicators
and Long-Term Goals
We aim to achieve these goals through the provision of environmentally friendly products, collaboration with other industry actors andcompanies, and awareness-raising via the creation of environmentally friendly habits for consumers

Solution to social issues

Zero CO2 emissions
throughout businessactivities

DecarbonizedsocietyMedium-term goals (2024)

Long-term goals (2050)

Domes ・ 4% energy savings (per unit production)
tic ・ Renewable energy⇒100% renewable energy in Japan
Overse・ 4% energy savings (per unit production)
as

Domes
Reduce CO2 emissions by tic

・ Provide water- and power-saving products and foster
environmentally friendly habits ⇒10% CO2 emission
reduction
・ Reduce CO2 emissions from raw materials ⇒10％ reduction

half throughout the life
・ Provide water- and power-saving products and foster
cycle of products
Overseas

Indicators (goals for 2030)

55% CO2 emission reduction (from 2017)100% renewable energy in Asia

30% CO2 emission reduction (from 2017)
40% CO2 emission from raw materials
reduction

environmentally friendly habits ⇒10% CO2 emission
reduction

Achieve a CO2 emission reduction effect inexcess of Lion’s own emissions (Japan)

Become carbon
negative

Resourcecirculating
society

Use recirculated
plastic⇒Reduce CO2 emissions through collaboration withother industry actors and companies by 20,000 Mt(Japan)⇒2,000 Mt reduction effect in residential CO2
emissions (Japan)

Domes
tic

・Expand the use of recycled and biomass materials
Domes⇒90% or less use of fossil plastics
tic
・Expand recycling initiatives
Overse・Foster refill habits in Asia
as

Optimize water
usage forsustainability

Domes
tic
Overseas・Provide water-saving products⇒10% water use reduction (per unit net sales)

Promote the 4Rs (expand recycling initiatives)⇒10 million participants in Lion recycling programs⇒70% or less use of fossil plastics⇒Reduction through collaboration with otherindustry actors and companies

Water usage⇒30% reduction from 2017(per unit net sales)32

Contents

・Fiscal 2021 Financial Results・Working toward 2030:▶Vision２０３０▶ New Medium-Term Management Plan:
Vision2030 1st STAGE 2022–2024
・Fiscal 2022 Financial Forecast
33

Steps toward 2030

１ｓｔ STAGE

We will implement three consecutive 3-year medium-term management plans
toward the realization of Vision2030 on a rolling basis, adjusting strategy andpolicy to changes in the business environment to enhance precision as we go.

3rd Stage （2028-2030）
・Final touches to achieve the vision
・Creating the foundations for
subsequent growth

2nd Stage （2025-2027）
・ Rolling strategy formulation in response tosigns of environmental change・ Accelerate transformation and growth・ Increase the average annual growth rate
(CAGR over 5%)

1st STAGE （2022-2024）
・Get on a growth track and create thefoundations for new growth・Transform business foundations (SCM, DX,sustainability)
・Activate human resources and organizations

2025-2027
2022-2024

2028-2030

34

Position of the Vision2030 1st STAGE

１ｓｔ STAGE

Gear change towards accelerated growth
Implement growth strategies and transform the management base to accelerate transformation
while growing
Reinvest returns from up-front investment in future growth to get on a sales growth track and reach highest-ever EBITDA

Reinforce ROIC management to enhance management control
Manage the business portfolio with an eye to business efficiency and appropriately allocate management resources

Business scale(scope of contribution)

１ｓｔ STAGE(２０２２～２０２４）

Up-front
investment▶Sakaide
toothpaste factory▶Akashimouthwash factory

Accelerating transformation and growthGear change toward
future growth

Vision2030

Becoming an advanced
daily healthcare company▶Seek returns from up-front
investment▶Reinvest in future growth(M&A, Digital investment, green
investment, etc.)▶New core systems

V-2/LIVE Plan

1st STAGE

2nd/3rd STAGE

35

Advance Three Growth Strategies

１ｓｔ STAGE

Advance three strategies to drive business growth toward
the achievement of the management vision
Three growth strategies

1. Accelerate growth in four fields of value creation
Focusing on the four fields of value creation, the directions for
growth, we will evolve existing businesses and create new
businesses to further accelerate growth in Japan and overseas.

2. Transform our business foundations for growth
We will continue to engage in and reinforce strategic investment(M&A, SCM, infrastructure, digital, sustainability, etc.) necessary
for future growth and transform our business base to one that
promotes growth.

3. Generate dynamism to realize innovative change
We will create dynamism to transform into a company that cangrow sustainably by improving employee engagement throughprofessional fulfillment reforms and diversity and inclusion
initiatives.
36

Advance Three Growth Strategies

１ｓｔ STAGE

Secure returns from initiatives implemented so far
and continue to reinvest in future growth
Growth
3つの成長戦略Initiatives so far (sowing)strategy

1st STAGE initiatives(reaping, sowing)
•

•
•
•

Launch cross divisional initiatives (Field
Program) in the four fields of value creation
Accelerate growth in the Qingdao Lionbusiness
Promote inclusive oral care initiatives•

Increase production capacity(Sakaide toothpaste factory, newdrying tower in Thailand, etc.)•
Build foundations for Company-wide DX
promotion•
Build foundations for new business creation•
Integrate and concentrate functions(organizational restructuring)•••

Formulation of our purpose and beliefs
Advance the Lion Professional Fulfillment
Reforms(enhance the telecommuting
environment, revise systems)
Commercialize business ideas generated by
NOIL program

•
•
•

•
•
•
•

•
•
•

Secure profit opportunities by evolving existing
businesses and creating new businesses in the four
fields of value creation
Maintain rapid growth in China
Enter new countries and areas
Expand social contribution by promoting
environmentally friendly habits
Accelerate DX (business foundations, operational
streamlining)
Reinforce and make full use of systems
infrastructure
Enhance management control
Accelerate the implementation of sustainability
strategy
Advance the Lion Professional Fulfillment Reforms
Promote diversity & inclusion
Expand investment in personnel development andhuman capital(DX/Global/New businesses)

37

Lion’s Oral Health Business１ｓｔ STAGE

Contribute to the establishment of self-sustaining oral health habits by serving as a hub that connects all
points of contact related to oral health

Oral Healthcorporate activities
Existing
businesses
New businessmodels▶Encourage the adoption of preventive dentistry daily as a habit, making oral health management an integral part ofhealthcare▶To achieve this, we will build POHR* as a business foundation and a hub that connects all points of contact▶Pursue industry-government-academia collaboration with both public healthcare institutions and private businesses
to promote the uptake of preventive dentistry in social trends and systems.

Oral care product businessPreventive habit solution
business

Preventive dentistry productbusiness
Professional care(preventive dentistry)
support business (targetingclinics and patients)

Promoting inclusive oral care
Help seniors enhance their QOL
through oral care

Dentalclinics

Households• Personal Oral Health Record; a database of basic
health, living habits, oral status, tooth brushing
behavior, etc.

Companies

Oral healthbusiness

Collaboration
across regional
communities
andprofessions

Businessfoundati
on POHR

Local
governments
andeducational
institutions

Workplace dental checkups(public benefit services)
Well-being (health andproductivity management)
support business

Oral health promotion projects incollaboration with school dentists

Health literacy improvement projects

38

New Business ①: Well-Being (Health and Productivity
Management) Support Business１ｓｔ STAGE

In response to the growing importance of oral health in communities around the globe, we will launch
an oral care information service (in March 2022, with plans for expansion)

The growing importance of oral health
The WHO passed a resolution on oral health at the 74th World
Health Assembly
Source: WHO, Resolutions of the 74th World Health Assembly

In May 2021, the World Health Assembly, the WHO’s highest
decision-making body called attention to oral diseases as a publichealth problem. The assembly concluded that oral health must be
considered an important healthcare issue in international efforts
to achieve universal health coverage.** Universal health coverage
In which all people have access to proper and affordable
healthcare services, including for disease prevention,
treatment and rehabilitation
Japan’s Ministry of Economy, Trade and Industry (METI)
incorporated “dental and oral health” into health and productivity
management survey items
Source: A 2021 Health and Productivity Management
Survey conducted by the METI

“Dental and oral health” was added to items being surveyed toconfirm the content of staff education aimed at helping
employees maintain and improve their healthService overview

Provide oral care seminars as part ofhealth education for workers

Lion
Oral Care Seminar
Analyze the effect ofseminars in terms ofchanges in employee
awareness and behaviors
and report on their impact
on health and productivity
management+Help build up oral care habits
Simple diagnosis
utilizing Salivary
Multi Test

Assist in theformation of new
habits via the useof products

39New Business ②: Project for Improving Health
Literacy of Citizens

１ｓｔ STAGE

Services to improve preventive dental care habits in communities
Trials are scheduled to start in the first half of 2022 under a partnership agreementwith Koshi City, Kumamoto
Growing public interest in preventive dentistry
Preventive dentistry practices, already widespread in Europe and theUnited States as daily habits, have begun attracting public interest inJapan, with an emerging trend in Asia toward encouraging themaintenance of dental and oral health through the combination of
professional care and self-care.

Service model overview: how we facilitate the formationof preventive dentistry habits
Acting in collaboration with government agencies, local municipalities
and other companies, we will help accelerate the uptake of preventive
dentistry habits, working to discover innovative ways to vitalize regional
communities

Content of social experiment

Purposes
1. Facilitate the formation of oral health habits via
the use of digital technologies
2. Raise the rate of individuals who regularly undergo
dental checkups via interventions in daily life

Action▶Help expand contacts between government agencies
and citizens to provide oral care information▶Offer a simple app designed to predict the user’s oral
health condition
Example functions to be offered by the app
・Image analysis functions for checking the status ofgums, etc.
・Help make visible* oral health-related risks* A technology powered by AI machine learning from healthcheckup data gleaned from Lion employees predicts oral healthrisks users may confront after they answer simple
questionnaires aimed at assessing their current oral condition.

40

1st STAGE Goals

１ｓｔ STAGE

Under 1st STAGE, we will get sales growth on track (CAGR of 4% or more)
and aim to reach our highest ever EBITDA(Billions of yen)

2024

Y-o-Y change

2021

Amount%Net sales

420.0

366.2

53.7

14.7

Core operating income*1

32.0

30.9

(% of net sales)（7.6％）（8.4％）

1.0

3.5

Operating profit(% of net sales)

32.0

31.1

(7.6％)(8.5％)

0.8

2.7

Profit for the period attributableto owners of the parent

23.0

23.7

(0.7)

(3.2)

EPS (Yen)

７２.24

81.73

(9.49)(11.6)EBITDA*2

52.0

45.1

6.8

15.1

ＲＯＩＣ（％）*3

Approximately 7.5

8.8—(1.3)PPROE (%)

Approximately 9.0

9.8—(0.8)PP

Notes 1. Core operating income is an earnings indicator the Company uses to measure regular business performance by subtracting selling, general and administrative expenses from gross profit.
2. EBITDA is an indicator of profitability on a cash basis calculated as the sum of core operating income and depreciation and amortization (excluding that of right-of-use assets as of 2022).
¥43.9 billion in 2021(adjusted).
3. ROIC is an indicator calculated from net operating profit after tax (NOPAT) divided by the average invested capital (total equity plus interest bearing liabilities) during the period, andmeasures the efficiency and profitability of the invested equity.

41

Factors Affecting EBITDA in the 1st STAGE

１ｓｔ STAGE

EBITDA will fall in 2022, reflecting high raw material costs, but profitability is
expected to improve by 2024 due to growth in revenue(Billions of yen)

70
700
8.0
80

60
600

8.0
80

60
6.0
50
500

180
18.0

400
40
30
300
20
200

45.1
452

52.0
520
40.0
400

10
100
0

2021年
2021
EBITDAEBITDA

2022年
2022
EBITDAEBITDA

Business
事業成長

growthTotal
Investment in
トータル
競争投資
cost
competitiveコストダウン
reductionness

Growth
成長投資
investment,
その他
Other

2024年
2024
EBITDAEBITDAEBITDA for 2021 was calculated as the sum of core operating income and depreciation and amortization; recalculated using the 2022 calculation method, 2021 EBITDA was ¥43.9 billion.
EBITDA for 2022 was calculated as the sum of core operating income and depreciation and amortization (excluding depreciation and amortization of right-of-use assets).

42

Sales to External Customers by Business Segment
During 1st STAGE

１ｓｔ STAGE

Focus on growth overseas to bring consolidated net sales
CAGR of 4% or more
(Billions of yen)

2024

Y-o-Y change

2021

AmountCAGR (%)

Consumer Products

250.0

229.5

20.4

2.9

Industrial Products

3７.0

34.7

2.2

2.1

Overseas

１３０.0

98.7

31.2

9.6

3.0

3.1

(0.1)

(2.1)

４,２０.0

366.2

53.7

4.7

Other
Consolidated Total

43

Financial Strategy in the 1st STAGE (Cash Allocation)

１ｓｔ STAGE

Put cash obtained from up-front investments into strategic future-oriented investments
and multi-stakeholder returns, powering further growth and cash generation to enhance
corporate value

1st STAGE cash allocation
Reinvestment in growth

Purpose-driven
Cash flows
fromoperatingactivities,
Other▶Get sales on a growth
track▶Highest-ever EBITDA

Approx.
¥120 billion

Strategic
investment
Approx.
¥80 billion
or more▶Creation and acquisition offoundations for future
growth▶Management basetransformation andevolution supporting growth
acceleration
M&A, DX, green, etc.

Shareholder
returns
Approx.
¥30 billion
or moreBasic financial operations policy/
ROIC management

Continuous and stable
returns▶Aiming to increase
dividends three years in arow
▶Flexible share buy-backs

44

Shareholder Returns

１ｓｔ STAGE

Under 1st STAGE, we aim to increase dividends annually and flexibly buy backand cancel treasury stock

Continuous and stable returns
Policy on shareholder returns
・Pay continuous and stable dividends, aiming for a consolidated dividend payout ratio of 30%
・Acquire treasury stock based on comprehensive reviews to ensure the levels of internal reserves
required to secure medium- and long-term growth.

1st STAGE (2022–2024)
Dividends

Aim for three years of annual increases (to reach nineconsecutive years of increases since 2016)

Share
buybacks

Flexibly buy back and cancel treasury stock▶Resolved to acquire and cancel of ¥10 billion in treasury
stock (February 14, 2022)

45

Contents

・Fiscal 2021 Financial Results・Working toward 2030:▶Vision２０３０▶ New Medium-Term Management Plan:
Vision2030 1st STAGE 2022–2024
・Fiscal 2022 Financial Forecast
46

2022: Forecast of the External Environment and Its Impact on Operating Results

Our projection of the external environment and its impact on Lion’s operating results❏The COVID-19 pandemic will not be contained until 2Q or later☞Stay-at-home demand will continue; health awareness will growstronger; and demand related to treating the side effects of booster
shots will fluctuate☞The oral care market will continue to expand gradually, while markets
for hand soaps and other hygiene-related products are expected to beon par with 2021
☞In Southeast Asia, consumption is expected to be robust thanks toeconomic recovery❏Raw material costs will remain high☞Manufacturing costs will substantially increase472021 Consolidated Financial Forecast
Planning for a year on year increase in sales and decrease in profits(Billions of yen)

2022

Y-o-Y change

2021

Amount%Net sales

375.0

366.2

8.7

2.4

Core operating income*1%% of net sales

23.0

30.9

（6.1）

(8.4)

(7.9)

(25.6)

Operating profit% of net sales

27.5

31.1

(7.3)

(8.5)

(3.6)

(11.8)

Profit for the period attributableto owners of the parent

20.0

23.7

(3.7)

(15.8)EPS (Yen)

68.79

81.73

(12.94)(15.8)EBITDA*2

40.0

45.1

(5.1)

(11.5)EBITDA margin(%)*3

10.7

12.3

(1.6)PPＲＯＩＣ（％）*4

5.5

8.8

(3.3)PPROE (％)

8.0

9.8(1.8)PP

Notes 1. Core operating income is an earnings indicator the Company uses to measure regular business performance by subtracting selling, general and administrative expenses from gross profit.
2. EBITDA is an indicator of profitability on a cash basis calculated as the sum of core operating income and depreciation and amortization (excluding that of right-of-use assets as of 2022).
¥43.9 billion in 2021(adjusted).
3. EBITDA margin: The ratio of EBITDA to consolidated net sales.
4. ROIC is an indicator calculated from net operating profit after tax (NOPAT) divided by the average invested capital (total equity plus interest bearing liabilities) during the period, andmeasures the efficiency and profitability of the invested equity.

48

2022 Results by Business Segment Forecast
A 2.4% increase in Consumer Products and 3.3% increase in Overseas drove an
increase in overall sales
Sales to external customers(Billions of yen)

2022

Y-o-Y change

2021

Amount%Consumer Products

235.0

229.5

5.4

2.4

Industrial Products

35.0

34.7

0.2

0.6

Overseas

102.0

98.7

3.2

3.3

3.0

3.1

(0.1)

(6.1)

375.0

366.2

8.7

2.4

Other

Consolidated Total

49

Fiscal 2022 Forecast of Change Factors Affecting Core Operating Income
Factors increasing profit will be outpaced by higher raw material costs, rises in growth investment(including depreciation and amortization associated with investments executed in past years), andother factors.
2021 core operating
income2021年事業利益

30.9

Changes in sales, product
売上増減・構成変化等の影響
mix and others+2.1

Total cost reduction
ﾄｰﾀﾙｺｽﾄﾀﾞｳﾝ（原価、物流）(raw materials, logistics)+2.0

原材料価格の上昇
Increase in raw
material prices(6.0)

Increase in competition競争費用の増加
related expenses(3.0)

Increase in otherexpenses
その他経費の増加
2022 core operating
income2022年事業利益(billions of 億円
yen)

18.0
180

(3.0)
23.0
20.0
200

22.0
220

24.0
240

26.0
260

28.0
280

30.0
300

32.0
320

34.0
340

36.0
360
50

Shareholder Returns❏Resolved to acquire and cancel up to a total of ¥10 billion in treasury
stock (February 14, 2022)❏Aiming to increase annual per-share dividend ¥1 to ¥25(seventh consecutive year of increase)25
20

Year-end dividend

50Consolidated
payout ratio

¥21

¥17
¥13

15
10

¥20

Interim dividend

¥10
5

¥23
12

¥2４ ¥2５
12

１３

10

11

10

10

11

12

1２

10
8

5

5

7

2015

2016

2017

2018

2019

2020

2021

2022

25.4％

23.6％

24.9％

22.7％

29.7％

22.4％

29.4％

36.3%

Basic dividend policy

Return profits to shareholders on a continuous and stable basis(Consolidated payout ratio target: 30%)

51

ＡＰＰＥＮＤＩＸ

52

Key Themes of the Three Growth Strategies for 2022
▮ Transform our business foundations for growth▮ Generate dynamism to realize innovative change

53Three Growth Strategies—Transform Our Business
Foundations for Growth

１ｓｔ STAGE

Continue and reinforce strategic investment to transform our business base to
one that promotes growth
Promote digital transformation (DX)

Strengthen business management

Increase productivity via operational reforms‣Increase the sophistication of business management via ROIC management‣Raise efficiency (via operational automation, etc.) while
increasing sophistication (via data-driven business management)

Innovate value we can create through the science of habits‣Develop a D2C platform enabling the realization of new businessmodels‣Accelerate DX via a business alliance with NTT DATA
(since January 2022)‣Upgrade BCPs (by securing multiple raw material suppliers and multiple transportand distribution routes)

Continuously step up responsible supply chain initiatives‣Promote a logistics EDI concept (collaborative distribution involving industry peers)

Human resources(including global)

to achieve operational streamlining, reinforce our logistics crisis response capabilities,
and curb CO2 emissions and other environmental footprints

Four fields of value creation❏Expected effects

Analyzedata

Measures
ConsiderandexecuteVerify /improve

Purchasing
Enterprise data, consumer data, etc.
Expand consumer
contact points via
the use of the
D2C platform

Production

Logistics

Sales

Create value

Data-driven management
Identify
issuesIncrease the flexibility and resilience of the entire supply chain
numbering) to optimize inventories and minimize the occurrence of product shortages❏Data-driven business management

R&D

Develop a sustainable SCM platform‣Coordinate production, distribution and sales data (via a shift to universal

Science of Habits

Marketing‣Step up response to the TCFD recommendations and implement ICP
and other environmental investment management measures

Consumers❏How we achieve operational streamlining

1. Improve the labor environment fordrivers and warehouse workers
engaged in loading and unloading
2. Increase labor productivity
3. Curb environmental burden(reduction in CO2 emissions andthe use of paper resources)54

Three Growth Strategies—Generate Dynamism to
Realize Innovative Change

１ｓｔ STAGE

Generate dynamism to realize innovative change via corporate branding and professionalfulfillment reforms
Corporate branding

Continuously promote Lion Professional Fulfillment Reforms

Transition to a corporate culture capable of practicing our
purpose and empowering employees to “Make a difference ineveryday lives by redesigning habits: Redesign”

Create a team of professionals who work vibrantly with a sense of
professional fulfillment as they pursue the realization of the
management vision in line with their own aspirations and actions

Win employee understanding of and sympathy for our purposeand beliefs on a Companywide basis❏Corporate philosophy‣Focus on enhancing
employee engagement andintroduce a corporate
philosophy designed toencourage employees tomore strongly feel apersonal relevance in our
purpose‣Transition to a corporate
culture embodying our
purpose by providing
employees with
opportunities to practice itthemselves(formulation of beliefs)

Clearly define job duties and roles while constantly nurturing
human resources capable of fulfilling these definitions‣Promote diversity & inclusion to promote innovation‣Strengthen the development of global humanresources and DX specialists
Continuously promote the diversification of work styles with aneye to adapting to the new normal‣Provide management skill❏ Lion Professional

enhancement training to help
Fulfillment Reforms
strengthen interpersonal
relationships among employees‣Offer diverse and flexible
working conditions, forexample, allowing remote
work, spare-time careers,
side jobs, etc.

55

Corporate philosophy

56Market Trends

57Market Trends—Major Product Categories in Japan
In comparison with 2020, market size remained virtually unchanged, except for handsoaps, etc.; compared with 2019, however, markets expanded in many fields
Y-o-Y comparison of consumer products markets in Japan by in-store sales value (%)
Oral Care

Beauty Care

Source: INTAGE Inc. SRI+

Fabric Care
Laundry
detergents

Toothpaste

Body soaps

Toothpaste

Fabric softeners
Hand soaps

Living Care

Pharmaceutical❏2019 figures are shown in dotted lines, for reference.

Dishwashingdetergents

Antipyretic
analgesics

・ Toothbrushes were on par with 2020 and down 4% from 2019
・ Hand soaps were down 30% from 2020 but up 34% from 2019・ Antipyretic analgesics were up 18% from 2020 due to growing
demand associated with vaccination

・ Eye drops shrunk from 2019 in step with a decline in inboundtourism demandHouseholdcleaners*

Eye drops* “Household cleaners” above is the sum of home cleaners, bath detergents and bathroom detergents.

Note: Fluctuations in demand recorded in September 2019 are
attributable to last-minute surges in demand prior toconsumption tax hikes

58Market Trends—Major Product Categories Overseas
Despite ongoing stagnation in consumption, the hand soap market expanded from 2019
Source: Nielsen

Hand soap sales value by country (Jan.–Dec. 2021)

Thailand

Malaysia

South Korea

Compared with
2020

１０３％

84％

７３％

Compared with
2019

１７５％

２７７％

１５５％

Laundry detergent sales value by country (Jan.–Dec. 2021)

Thailand

Malaysia

South Korea

Compared with
2020

８６％

９８％

９７％

Compared with
2019

８０％

９０％

９６％

Hand soaps

Laundry detergents

South
Korea

ThailandThailand

South
Korea

Malaysia

Malaysia

Note: Figures for Malaysia represent the entire soap market, including the hand soap market.

2019 figures are shown in dotted lines, for reference.

59Changes in Household Products Market and OTC Drug Market
1) Market Environment for Household Products (38 markets, SRI/SRI+*)
Overall market trend for the 38 home product markets in which Lion participates(Values are percentages of the results of thecorresponding periods of the previous years)

2016

2017

2018

2019

2020

2021

Sales value

104

99

102

102

112

95

Sales volume

102

98

100

100

105

92

Average unit price

102

102

102

102

106

103

Source: INTAGE Inc. SRI Survey (data for 2016 is for 38 markets; data for 2017 is for 37; data for 2018–2020 is for 38)
SRI+ Survey data (data for 2021 is for 38 markets)

2) Market Environment for Household Products (14 markets, SCI**)
Overall market trend for the 14 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

2021

Sales value

105

103

102

105

108

102

Sales volume

101

101

100

102

101

96

Average unit price

104

102

103

104

106

107

Source: INTAGE Inc. SCI survey (data for 2016–2019 is for 15 markets; data for 2020 onward is for 14)* 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.

60

Changes in Household Products Market and OTC Drug Market
3) Market Environment for OTC Drug Market (7 markets, SDI/SRI+)
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

2021

Sales value

104

103

102

100

93

103

Sales volume

102

101

101

99

89

101

Average unit price

101

102

101

101

105

102

Source: INTAGE Inc. SDI Survey (data for 2016–2018 is for 8 markets; data for2019–2020 is for 7), SRI+ Survey (data for 2021 onward is for 7 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

2021

Sales value

104

103

104

104

102

110

Sales volume

102

100

102

102

99

107

Average unit price

102

103

102

102

103

103

Source: INTAGE Inc. SCI survey

61

Financial and Other Statements

62

Consolidated Results for October–December 2021

(Billions of yen)

Net sales

2021
Jan.–Sep.

2021
Oct.–Dec.

Y-o-Y change
Oct.–Dec.
Amount

%

267.5

98.6

5.3

5.7

Core operating income*1

25.3

5.5

(Core operating income ratio)

（9.5）

(5.6）

(0.5)

(8.9)

Operating profit

25.4

5.7

(Operating profit ratio)

（9.5）

（5.8）

(0.1)

(2.2)

Profit for the period attributed toowners of the parent

19.0

4.7

2.0

79.7

EPS (Yen）

65.46

16.27

7.21

79.6

EBITDA*2

３５.６

9.5

0.1

1.3

Notes 1. Core operating income is an earnings indicator the Company uses to measure regular business performance 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 and depreciation
and amortization.

63

Segment Results for October–December 2021
Net sales(Billions of yen)Segment income (core operating income)Y-o-Y change
Oct.–Dec.

2021
Jan.–Sep.

2021
Oct.–Dec.

Consumer
Products

180.4

66.6

1.1

1.7

166.9

62.6

1.2

2.1

Industrial
Products

43.4

17.8

２.９

20.0

25.1

9.5

0.8

9.6

81.4

27.8

2.9

11.7

Overseas
Other
Adjustment
Consolidated
total

Amount%2021
Jan.–Sep.
(%)

2021
Oct.–Dec.
(%)

16.6

2.3

（9.2）

（3.6）

1.6

0.9

（3.9）

（5.3）

4.7

1.2

（5.9）

（4.4）

1.7

0.3

Y-o-Y change
Oct.–Dec.
Amount%(0.2)(10.1)

0.2

28.5

(0.3)

(23.1)(0.4)(51.6)

73.6

25.0

2.5

11.4

22.8

5.0

(5.3)

(51.3)

1.8

1.3

0.6

101.7

（7.7）

（7.9）

(60.5)(18.7)

3.6

-

0.5
-

0.5
-

0.3

-

25.3

5.5

（9.5）

（5.6）

(0.5)

(8.9)

(0.0)

0.0

(0.0)

-

267.5

98.6

5.3

5.7

* Net sales: The top row shows total net sales, and the bottom row shows external net sales.

64Consumer Products Net Sales for October–December 2021

Total net sales(Billions of yen)2021
Jan.–Sep.

2021
Oct.–Dec.

Y-o-Y change
Oct.–Dec.
Amount%Oral care

49.8

19.5

0.6

3.5

Beauty care

18.5

6.2

(0.8)

(11.9)

Fabric care

44.0

16.6

0.6

4.4

Living care

18.3

6.8

0.1

2.5

Pharmaceuticals

18.4

6.9

0.8

13.8

Other

31.2

10.4

(0.4)

(3.8)

Total

180.4

66.6

1.1

1.7
65

Consolidated Statement of Income(Billions of yen)

2021

Y-o-Y change

2020

Amount%Net sales

366.2

355.3

10.8

3.1

Cost of sales

187.1

175.4

11.6

6.6

Gross profit

179.1

179.8

(0.7)

(0.4)

Selling, general and administrative expenses

148.1

143.9

4.2

3.0

30.9

35.9

(5.0)

(14.0)

Other income

1.2

12.2

(11.0)(90.1)

Other expenses

0.9

4.1

(3.1)

(76.8)

Operating profit

31.1

44.0

(12.8)(29.3)

Finance income

0.8

0.6

0.1

20.3

Finance costs

0.1

0.1

(0.0)

(7.0)

Share of profit of investments accounted
for using the equity method

2.2

(0.1)

2.3

-

Profit before tax

34.0

44.4

(10.4)(23.4)

Income taxes

8.6

12.5

(3.8)

(31.0)

25.4

31.9

(6.5)

(20.4)

1.6

2.0

(0.4)

(19.8)

23.7

29.8

(6.1)

(20.5)

Core operating income

Profit for the period
Profit for the period attributable to non controllinginterests
Profit for the period attributable to ownersof the parent

66

Selling, general and administrative expenses

2021

Y-o-Y change

2020

Amount% of sales

40.5

143.9

40.5

4.2

3.0

9.8

2.7

9.4

2.7

0.4

4.6

Promotional expenses

28.4

7.8

26.9

7.6

1.5

5.8

Advertising Expenses

24.9

6.8

24.9

7.0

(0.0)

(0.1)

Transportation andwarehousing expenses

20.1

5.5

18.8

5.3

1.3

7.0

R&D expenses

11.1

3.1

10.9

3.1

0.2

2.5

Other expenses

53.5

14.6

52.8

14.9

0.6

1.3

(Billions of yen)

Selling, general andadministrative expenses
Sales commissions

Amount% of sales

148.1

(%)

(%)

Amount%67

Consolidated Statement of Financial Position(Billions of yen)

Current assets

2021

Y-o-Y
change

2020

232.1

245.4

(13.2)Cash and cash equivalents

97.2

121.5

(24.2)

Trade and other receivables

70.1

62.4

7.6

Inventories

51.7

45.1

6.5

Non-current assets

195.8

190.0

5.7

Property, plant andequipment

120.6

118.3

2.2

Intangible assets

23.9

18.9

5.0

Right-of-use assets

5.4

4.8

0.5

Other financial assets

21.8

24.8

(3.0)

428.0

435.5

(7.4)

Total assets

68Consolidated Statement of Financial Position(Billions of yen)

Current liabilities

2021

Y-o-Y change

2020

139.2

166.6

(27.4)

123.1

141.2

(18.1)

Lease liabilities

1.4

1.3

0.0

Other current liabilities

8.1

8.7

(0.5)

23.7

24.0

(0.2)

Retirement benefit
liabilities

12.6

13.0

(0.3)

Lease liabilities

5.0

4.6

0.4

265.0

244.8

20.1

Share capital

34.4

34.4

-

Capital surplus

35.1

34.9

0.2

Treasury stock

(4.7)

(4.7)

0.0

9.3

10.0

(0.7)

177.3

156.9

20.4

428.0

435.5

(7.4)

Trade and other payables

Non-current liabilities

EquityOther components ofequityRetained earnings
Total liabilities and equity

69Consolidated Statement of Cash Flows(Billions of yen)

2021

2020

ChangeCash flows from operating activities

19.2

40.7

(21.4)Cash flows from investing activities(34.1)(19.8)(14.3)Cash flows from financing activities(10.2)

(9.1)

(1.0)

Effect of exchange rate changes oncash and cash equivalents

0.8

(0.5)

1.4

Net increase (decrease) in cash andcash equivalents(24.2)

11.1(35.4)Cash and cash equivalents at beginningof period

121.5

110.4

11.1

Cash and cash equivalents at end of
period

97.2

121.5

(24.2)

70

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

Capital Expenditures

50.0
500

Depreciation and Amortization Expenses

47.5

Jul-Dec
Jan-Jun

40.0
400

30.8

300
30.0

29.0

23.6
21.8
200
20.0

14.9
10.0
100

9.4

9.4

16.6

0

3.8

9.4

14.3

16.7
7.2

14.2

10.2

9.4

5.6
5.5

18.0

9.3

12.4

2016 2017 2018 2019 2020 2021 2022
Forecast
予定

9.3

8.8

5.1

4.1

4.5

5.1

5.2

4.3

10.5

11.7

5.5

6.2

4.9

5.5

7.9
6.2

2016 2017 2018 2019 2020 2021 2022
Forecast
予定* Capital expenditures and depreciation and amortization both include intangible assets.

712022 Consolidated Financial Forecast
Y-o-Y change(Billions of yen)

Net sales
Core operating
income% of net sales

Operatingprofit% of net sales

Profit for theperiodattributable toowners of parent

202２

202１
Amount%Y-o-Y changeJan.– Jun.
2022

Jan.– Jun.
2021

Amount

%

375.0

366.2

８.７

２.4

179.0

173.2

5.7

3.3

２３.0
6.1

30.９
8.4

(7.９)

(25.6)

7.6
4.2

14.0
8.1

(6.4)

(45.8)

27.5
7.3

31.1
8.5

(3.6)

(1１.8)

12.3
6.9

14.1
8.2

(1.8)

(13.3)

20.0
5.3

２3.7
6.5

(3.7)

(15.8)

9.0
5.0

10.8
6.2

(1.8)

(16.8)

６８.７９

81.73

(12.94)(15.8)

30.96

37.20

(6.24)(16.8)% of net sales

EPS（Yen）

72

2022 Sales to External Customers Forecast
Y-o-Y change(Billions of yen)

2022

2021
Amount%Jan.– Jun.
2022

Jan.– Jun.
2021

Y-o-Y change
Amount%Consumer
Products

2３５.０

229.5

5.4

2.4

110.0

107.1

2.8

2.6

Industrial
Products

35.0

34.7

0.2

0.6

17.0

16.6

0.3

2.2

Overseas

102.0

98.7

3.2

3.3

50.0

48.3

1.6

3.5

Others

3.0

3.1

(0.1)

(6.1)

2.0

1.1

0.8

70.7

375.0

366.2

8.7

2.4

179.0

173.2

5.7

3.3

Consolidated
Total

73

Fiscal 2022 Forecast of Change Factors Affecting Core Operating Income

Impact on income(Billions of yen)

Assumptions atstart of year

Sales, product mix and others＋2.1

Total cost reduction(raw materials, logistics, etc.)＋2.0

Raw material prices(6.0)

Competition-related expenses(3.0)

Other expenses

(3.0)

Total

(7.9)

74

Assumed Raw Material Prices and Exchange Rates
Raw Material Prices2022
forecasts

Dubai Crude

Domestic Naphtha

Crude Palm Oil

75.0$/BBL

JPY58,000/KL

5,000RM/ton

Exchange Rates
2022
forecasts

U.S. Dollar

Thai Baht

JPY110.0

JPY3.40

Dubai Crude

Domestic Naphtha

Crude Palm Oil

69.2$/BBL

JPY50,017/KL

4,449RM/ton

U.S. Dollar

Thai Baht

JPY110.3

JPY3.40

Reference2021
actual

2021
actual75

The forecasts and projected operating results contained in this report are basedon 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.