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

Event Summary[Company Name]

Lion Corporation[Company ID]

4912-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Financial Results for the Fiscal Year Ended December 31, 2020

[Fiscal Period]

FY2020 Annual[Date]

February 12, 2021

[Number of Pages]

51[Time]

16:00 – 17:23(Total: 83 minutes, Presentation: 43 minutes, Q&A: 40 minutes)[Venue]Webcast[Participants]

73[Number of Speakers]

5
Masazumi Kikukawa

Takeo Sakakibara
Kei Minamikawa
Yoshitada Ishii
Keita Tanimoto[Respondent]

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Representative Director,
President and Executive Officer
Chief Operating Officer
Director, Senior Executive Officer
Director of Corporate Planning Department
Deputy Director of Finance Department
Director of Investor Relations Office,Corporate Planning Department

Masazumi Kikukawa, Takeo Sakakibara

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Presentation
Tanimoto: Thank you very much for taking time out of your busy schedule to join us today for the FY2020 Lion
Corporation Financial Results Briefing. This event is held as a live webcast. We just disclosed our financial
results on the Tokyo Stock Exchange at 15:00. We will now explain the details.
First, let me introduce our attendees, these four members: Mr. Masazumi Kikukawa, Representative Director,
President, Executive Officer; Mr. Takeo Sakakibara, Director, Senior Executive Officer; Mr. Kei Minamikawa,Director of Corporate Planning Department; and Mr. Yoshitada Ishii, Deputy Director of Finance Department.
I, Tanimoto of the Investor Relations Office of the Corporate Planning Department, will serve as the moderator.
After an explanation by Mr. Kikukawa, based on the financial results presentation materials, we will move onto the Q&A session. The entire meeting is scheduled for one hour and 15 minutes.
The materials to be used in today's presentation are available on our website.

Before the explanation, please note that this presentation may contain forward-looking statements based on
current expectations, all of which are subject to risks and uncertainties, and therefore, actual results may
differ from the forecast.
Now, let us begin the explanation. President Kikukawa, please.

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Kikukawa: I'm Kikukawa, the President. Thank you very much for taking time out of your busy schedule toparticipate in our financial results briefing today. We would also like to thank you again for your continued
support of our IR activities.
Today, I will explain these three points.

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First, I would like to explain the business results for the last fiscal year.
Last year's business results achieved both net sales and profits in line with the announced figures revised on
November 5. In particular, in Q4 of the fiscal year, we increased our competition-related expenses in the coreareas of domestic consumer products as planned, which drove sales and market growth.
Core operating income exceeded the announced figures due to the increase in gross profit caused by thechange in sales composition.
Compared to the previous year, sales and profits increased due to increased sales of hygiene-related products
due to the impact of the novel coronavirus (COVID-19) throughout the year, increased gross profit due to achange in the composition of sales, and promotion of cost reduction.
Operating profit and profit for the period attributable to owners of parent increased substantially due to therecording of a gain on the transfer of the head office land in February last year.

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4This slide summarizes trends in the domestic consumer goods market and major overseas markets in which
we operate.
In Japan, the total market for 38 home products, in which we operate, has expanded by more than 10%, driven
by hygiene-related products.
As I mentioned at the Q3 financial results briefing, toothbrushes showed signs of recovery in H2 of last year,
and in the three months from October to December, both unit price and volume increased exceeding theprevious year.
Overseas, hand-washing frequency is increasing in many countries, and the hand soap market is expanding
greatly, doubling in South Korea, 1.7 times in Thailand, and 3.4 times in Malaysia. Laundry detergents, on theother hand, were greatly affected by a decrease in the frequency of laundry washing due to restrictions on
activities in Southeast Asia and sluggish consumption, and although they have been on a gradual recovery
trend since April, sales for the entire year have shrunk to the level of 90% to 95% of the previous year.

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I will now explain our consolidated business results.
Net sales totaled JPY355.3 billion, up 2.3% or JPY7.83 billion from the previous fiscal year. Excluding the effectof currency translation, the real rate of change would have been 3.2%.
Core operating income increased about JPY5.8 billion from the previous year to JPY35.9 billion, up 19.6%. Core
operating income to net sales was 10.1%, an increase of about 1.5 percentage points from the previous year.
Operating profit increased by JPY14.2 billion, including the gain on the transfer of land.

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6This slide shows the reasons for the increase-decrease in core operating income. This time, the impact of
COVID-19 is listed as an internal number in the relevant section.
As for the impact of sales increase and change in product mix, the increase in gross profit due to sales increase
and change in segment composition made a significant contribution. We estimate that the impact of COVID19 will be approximately JPY4.9 billion, mainly due to changes in the product mix as hygiene-related products
increased.
In addition, total cost reductions and lower raw material prices contributed to an increase in core operating
income, resulted in a total increase of JPY8.9 billion.
On the other hand, the increase in competition-related expenses, which were strategically invested especiallyin Q4, as well as the increase in other expenses such as personnel expenses and depreciation linked tobusiness performance, resulted in a total decrease in core operating income of JPY3 billion. As for the impact
of COVID-19, we estimate that a decrease of approximately JPY1.3 billion in competition-related expenses
was a positive factor, and an increase of JPY800 million in expenses was a negative factor.
As a result, core operating income increased by JPY5.9 billion, of which the impact of COVID-19 is estimatedto be approximately JPY5 billion.

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Let’s look at results by business segment. The upper line shows net sales and the lower line shows sales toexternal customers. The first is the Consumer Products Business.
Sales increased by 4.8%, driven by growth in hygiene-related products. Segment profit increased significantly
by 25.5%, and segment income margin rose to 10%.
Next, in the Industrial Products Business, sales declined due to the significant impact of the sluggish market
conditions in the chemical products field.
In the Detergents for Institutional Use Products fields, sales increased YoY, due to increased sales of sanitizers
for kitchens and hand soaps for institutional use, despite struggling sales of detergents for restaurant-relateduse. Segment profit increased mainly due to an increase in the proportion of the Detergents for Institutional
Use Products which earn high-margin.
Next, I would like to talk about our Overseas Business. In Southeast Asia, the market was strongly affected by
the contraction of the market due to restrictions on outings and activities, but in Northeast Asia, the Chinese
market grew strongly. As a result, total sales increased YoY. Segment profit decreased in total, due to thestruggles in Southeast Asia.

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8Next is sales by product category in the Consumer Products Business.
Oral care sales increased by 2.9% for the year. Sales of toothpaste, mouthwash, and dental care products all
grew steadily throughout the year. As for toothbrushes, which we saw as an issue to be addressed for earlyrecovery, there are signs of recovery mainly in the adult-use category, thanks to our aggressive marketinginvestment in Q4.
For beauty care, most of the increase in revenue is due to the growth of hand soap and hand sanitizer.
In the fabric care category, sales were down from the previous year due to struggling sales of laundry
detergents in particular.
In the living care category, sales of dishwashing detergents, food preparation products, and household cleaner
were strong due to an increase in time spent at home as people refrained from going out.
Sales in the pharmaceutical field decreased, due to the significant impact of the decline in inbound demand.

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9Next, we will look at the sales by region of our Overseas Business.
In Southeast Asia, overall sales decreased by 4.4% from the same period of the previous year due to the impactof reduced consumption caused by restrictions on outings and activities in Thailand and Malaysia. Excluding
the effect of exchange rate fluctuations, the real sales decreased by 0.8%.
In Northeast Asia, overall sales increased by 11.5% from the same period of the previous year. Excluding theeffect of exchange rate fluctuations, the increase in real terms was 14.4%. China, where the overall market
recovered at an early stage, performed well and drove the overall performance. In South Korea, the impactof the deterioration in the business environment since the summer of the year before last ran its course in H2of last year, and strong sales of hand soap added to the increase in sales for the year.

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10Here is a summary of the impact of COVID-19 on our business.
On a consolidated basis, we estimate a positive impact to be approximately JPY6.1 billion in sales.
This section shows the main reasons for the increase and decrease in sales. As for positive factors, a major
factor in all segments was the increase in demand for hygiene-related products along with the rise in hygieneawareness. In addition, the increase in the number of hours spent at home has led to increased demand fordishwashing detergents, food preparation products, and household cleaner in the Consumer Products
Business.
Negative factors, on the other hand, include a decline in demand for travel goods and medical products due
to voluntary restraint in going out, as well as a decrease in inbound demand due to restrictions on domestic
and international activities and a decline in demand for industrial products.
In Southeast Asia, in addition to the impact of the restrictions on going out, the economy itself has been
severely damaged, as the tourism industry plays a major role, and the resulting decline in consumption has
had a negative impact.
Now that I have finished explaining last year's business results, I would like to explain Vision 2030, our
medium- to long-term management strategy framework for the next 10 years.

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Before I explain the next 10 years, I would like to first look back at the past 10 years.
In October 2011, we formulated Vision 2020 and have promoted three medium-term management plans--V1 Plan, V-2 Plan, and LIVE Plan--since 2012.
Under the theme of improving profitability, which has been a particular issue for us, we have promoted
structural reforms, such as adding more value to our products, strengthening our earnings base, andconsolidating and eliminating affiliated companies.
As a result, as you can see, both sales and core operating income margin have improved significantly, with thecore operating income margin most recently reaching the 10% level.
On the other hand, although sales have continued to grow steadily, they have increased only slightly in thepast few years, and we see the recovery of growth potential as a challenge for the future.

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12This page shows the changes in major management indicators over the past 10 years.
Profitability, efficiency, and productivity have all improved significantly over the past 10 years, and we believethat our management base has been steadily strengthened. In terms of investment, we have steadily invested
in growth for the future, including advertising, R&D, and capital expenditures.
In the future, we recognize the importance of how to reflect these investments in our business performance.

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Next, here are the changes in market capitalization and dividends over the past 10 years.
Our market capitalization has increased approximately 5.5 times during this period, and our dividend pershare has increased from JPY11 to JPY23, which was the fifth consecutive year of dividend increases.

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14This page is a review of the LIVE Plan, our mid-term management plan up until last year.
Both sales and profits grew from 2017 but did not reach the targets of the Live Plan.
On the other hand, operating profit, profit for the period, and ROE have reached the target levels due to theimpact of the gain on the transfer of fixed assets.
As for the results, we were able to steadily promote the growth of our Oral Care Business and China Business,
as well as the strengthening of our business foundation through profit structure reforms and production
systems.
On the other hand, we recognize that we still have issues to address in terms of organic growth in existing
businesses, including the Fabric Care Business and Southeast Asia Businesses, as well as in terms of creating
new growth businesses and growth starting points to supplement them.

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Now, I would like to talk about the next 10 years.
As I mentioned earlier, under the LIVE Plan, our profitability has indeed improved and our business foundation
for the next stage of growth is being prepared, including the strengthening of our production base. In thiscontext, we recognize that the social mission and significance of our company have been greatly enhanced by
the impact of the new coronavirus infection that we experienced last year.
We believe that the changes in values and behaviors caused by the new normal has given us a great
opportunity to create a new starting point for growth, and that we now have a great chance to achievebusiness growth.
Against this backdrop, we will work to achieve even more thorough, purpose-driven management by 2030,
and we will grow our business by contributing to the daily lives of more people.
In order to realize these goals, we must transform ourselves into a company that continues to transform itself
in response to drastic social changes. These are the three themes that we would like to promote.

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In this environment, our group has formulated a long-term management strategy frame, Vision 2030.
In order to realize this management vision, we will further strengthen our management based on the objective
to “make a difference in everyday lives by redesigning habits”, while synergistically promoting initiatives toaddress the sustainability material issues and growth strategies, aiming to contribute to a sustainable society
and achieve business growth.

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In the wake of the global spread of COVID-19, we are once again reminded of how daily habits, such as handwashing and gargling, play a major role in people's mental and physical health.
Society and our customers need us to “make a difference in everyday lives by redesigning habits”, which isthe purpose and raison d’être of our Group. We believe it is important to further strengthen our management
based on this purpose and fulfill our social roles and responsibilities.

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18This is our management vision for the year 2030.
When we formulated the LIVE Plan, we set a management vision of “becoming an advanced daily healthcarecompany" for the year 2030. We will not change this one. By evolving and developing healthcare as only Lioncan, we will contribute to a sustainable society and aim to increase our corporate value.

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19This page shows our approach to the realization of our management vision.
Again, through implementing purpose-driven management, we aim to make a difference in more people’s
lives, and as a result, we hope to achieve business growth. In order to achieve this, we believe it is importantto have more points of contact and scenes related to daily life, to contribute to more consumers regardlessof age, and to contribute in more areas, especially in Asia.
By achieving these goals, we hope to achieve business growth and increase our market presence in Asia as aresult.

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The figure on the left shows our current presence in our major markets. We would like to grow our businessfrom the current 13th position to the 10th position and beyond, by contributing to society.
In 2030, we are aiming for a business scale of JPY600 billion in sales, a 50% share of overseas sales, JPY50
billion in core operating income, 8% to 12% ROIC, and 10% to 14% ROE and EBITDA margins.

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I would now like to explain the promotion of the three growth strategies, which are part of our management
strategy to realize our vision.

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In order to realize our vision, we will drive business growth by promoting the three growth strategies that you
see here.
The first is to accelerate growth in four fields of value creation. As a direction for the Group's growth toward
the realization of the vision, we will strategically innovate across the entire company, identify four fields ofvalue creation, which are fields where we can create consumer value, and promote the evolution of existing
businesses and the creation of new value, in order to further accelerate growth in Japan and overseas.
The second is to transform our business foundation for growth. By continuing and strengthening strategic
investments, we will work to transform our business foundation to the one that promotes growth.
The third is to generate dynamism to realize innovative change. We will realize the transformation into a
company that can achieve sustainable growth by strengthening the corporate brand, reforming job
satisfaction, and promoting diversity and open innovation.
In the following slides, I will explain each strategy in detail.

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First, the growth strategy.
I mentioned that we will drive our growth by identifying the four fields of value creation and clearly stating
the direction we will take.
First of all, in setting up these value creation fields, we thought about the health that we pursue – to be able
to live authentically, and to connect with others while healthy in mind and body. Everyone can find happinessevery day with their families and communities.
In order to further evolve and develop healthcare and better habits that only Lion can provide, we havedefined four fields of value creation based on those views of health as growth drivers.

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The four fields of value creation are oral health, infection control, smart housework, and well-being.
In the following sections, I will explain the details.

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First, let's talk about oral health.
By leveraging the strengths of Japan's number one oral care manufacturer, we will aim to expand our businessbeyond the boundaries of our existing operations by integrating innovative oral care products and services
into the context of each individual's life as a new form of healthcare.
Second, let's talk about infection control. As a company that has been securing cleanliness and hygiene for along time, we will reform our business with a sense of mission, expand our business domain not only toresidential spaces, but also to public and industrial spaces, and provide hygiene solutions that protect people's
lives from bacteria and viruses in all directions.
Next, about Smart housework. With the increasing diversification of lifestyles and living conditions, we believethat uniform proposals for household chores are no longer able to capture the needs of consumers. With thebasic concept of making housework smarter, more enjoyable and more efficient, we will rethink houseworkin general to maximize the comfort that each person can feel in his or her own way and aim to establish aunique advantage in various categories through strong collaboration and innovation with external partners.
The last one, well-being. Starting with habitual self-health care, we will work with external partners to expand
the solutions we offer and integrate each service while building connections with consumers. We would liketo transform ourselves into a total health care servicer that stays close to people's life stages for a long timeand continues to support their own health and happiness.

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The following is a detailed explanation of our approach to oral health, one of the four fields of value creation.
We are the number one manufacturer of toothpaste, toothbrushes, and other oral products in Japan, and wewill continue to create new value to lead the market.
The oral care goods market in which we have been operating has been surrounded by a vast array of business
opportunities, including dental care and oral care as a measure against systemic diseases. We will contributeto the improvement of oral health and quality of life by utilizing our assets to expand our business into theseareas and provide new value to various life contexts related to healthcare for consumers.

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27Here is an example of a specific business concept.
By utilizing data related to oral health, we will be able to make appropriate proposals for oral health. We willbuild new customer contact points in fields of value creation and obtain data related to oral health. Based on
this data, we will actively build collaborative relationships not only with our own company, but also withexternal stakeholders, such as companies in other industries, dental clinics, and academia. We aim to build abusiness that builds long-term relationships by providing personalized services and solutions to each customer.
By promoting this digital transformation in oral health, we will also be able to acquire new business models.

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In the second part of our growth strategy, transformation of our business foundation for growth, we will
promote transformation into a business foundation that promotes growth by continuing and strengthening
strategic investments.
In the promotion of digital transformation, digital technology should be used to create new value that
contributes to the creation of better habits for consumers. In addition, we will promote the transformationof operations to improve efficiency and speed. These are our two key themes.
In the area of reinforcing business infrastructure, we will continue to strengthen our business infrastructure
to achieve the above-mentioned growth by continuously increasing production capacity, developing coresystems for more sophisticated business management, and building a highly flexible and resilient SCM
platform.

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Finally, in the third growth strategy, the generation of dynamism to realize innovative change, we will aim torealize transformation into a company that can grow sustainably even in a drastically changing social
environment.
With regard to corporate branding, we will continuously earn the trust and sympathy of all stakeholders andenhance our corporate value by developing consistent corporate activities based on our purpose-driven
management in Japan and overseas.
We have been aiming for Lion Professional Fulfillment Reforms, which maximize the diverse abilities of
employees, since we started the reform two years ago. We will continue to implement each of these measureswith the aim of improving our ability to respond to change and create innovation.
In the area of diversity and open innovation, we will accelerate the utilization of diverse human resources andproactive collaboration with external partners to create new value by transforming conventional ideas, speed,
and methods.

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Next, I will explain how we will reinforce initiatives to address the sustainability material issues, which we will
promote in conjunction with our three growth strategies.

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We will also strengthen our initiatives to address the sustainability material issues that are inextricably linked
to the promotion of the three growth strategies. In particular, we will focus on creating healthy living habits
and promoting environmental initiatives for a sustainable planet, which we regard as our top priority material
issues.

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From here, I will explain about inclusive oral care, which is a new business action to be taken as a key theme
for creating healthy living habits, which is positioned as our top priority material issue.
The background of inclusive oral care is that there are disparities in the implementation of oral care due tovarious circumstances, such as living environment, physical, education, and information, and there are people
who are unable to adequately take care of their mouths.
Health is closely related to oral care. Through oral care, we will make it a habit for everyone to draw out andnurture the innate power of healthy living. Inclusive oral care is an activity that addresses the health disparities
that are currently the focus of attention.

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Our thoughts on promoting inclusive oral care are summarized in three keywords.
The first is By Anyone. We want to provide opportunities for oral care to all people regardless of theircircumstances or reasons, such as physical handicaps, aging, or environment.
By Oneself. We would like to create a habit of taking care of their oral health on their own, not because
someone tells them to or because they tell someone else to.
By Systems. We would like to create a society in which everyone can continue to be healthy by creating asystem in which everyone can support each other to solve problems that cannot be solved by one person.
With these three thoughts, we will deliver oral care to all people.

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I would like to share with you some of the specific actions of the program.
The first is to support the children's independence. Children who grow up in economically deprived
households are said to be characterized by a significantly lower sense of self-affirmation than those who donot, due to a lack of various experiences, such as praise from someone else and communication with adults
other than their parents.
Focusing on tooth brushing, which has a high affinity with eating, a necessary part of human life, we will use
the children's cafeteria to improve children's sense of self-affirmation and provide them with experiences
through the program.
The program will be based on the theme of tooth brushing and will include a dance program to foster
emotional expression and a program to feel a sense of accomplishment.

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For this activity, we would like to build a system to support children by collaborating with NPOs and local
governments. The NPO partners we will be collaborating with are Florence and Musubie. Both companies are
NPOs that support children.
We are also thinking of providing opportunities of experience in children's cafeterias, learning support classes,
in families of single mothers, as well through the web and apps.
In terms of regions, we plan to start with areas with high poverty and dental caries rates.

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Another example is the provision of a mechanism to encourage sustainable production for mint farms in India,
through the use of verified mint.
We are particular about the flavor of our toothpaste and use various kinds of natural mint. The main mint isfrom the US, but we use Indian mint for the Japanese species of mentha canadensis. We will replace all of thisJapanese mentha canadensis with verified mint that has passed a rigorous screening process. The verification
is FSA's verification on social and environmental issues, such as human rights, provided by the SAI Platform,
which supports sustainable agricultural supply chains.
Verified mints are more expensive than regular mints due to their quality and environmentally friendly
manufacturing process. By expanding the sales of products using this verified mint, we will increase theamount procured and the number of farmers who obtain verification, thereby contributing to theestablishment of a system that supports the sustainability of producers in terms of society, environment, andeconomy.

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I would also like to explain another important issue: the promotion of sustainable global environmental
initiatives.
The important thing here is to work not only within our own company, but also with many other companies
and local governments.
A specific example is the horizontal recycling of film containers that we are working on with Kao Corporation,
which we released in September last year. Here, we will study not only the mechanism of separate collection,
but also the quality design of recyclable containers, how to utilize recycled materials, and dissemination andeducational activities for consumers in cooperation with consumers, government, and distributors.
One more thing is, starting this year, we will be working on the realization of the Logistics EDI concept for theindustry's smart logistics initiatives using PLANET's system. This initiative aims to improve the working
environment, increase productivity, and reduce the environmental burden, as well as to effectively utilize
logistics resources and improve the efficiency of logistics operations by centrally managing, visualizing, andinterconnecting logistics information.

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Lastly, I would like to explain our business forecast for 2021.
For FY2021, we are forecasting consolidated net sales of JPY365 billion, core operating income of JPY30 billion,
operating profit of JPY30 billion, and profit for the year attributable to owners of the parent of JPY21 billion,
an increase in revenue, but a decrease in profit. The factors behind the decrease in core operating income will
be explained later.
In addition, from the current fiscal year, we will promote the optimization of our business portfolio andmanagement to increase investment efficiency by setting ROIC as an indicator and strengthening themonitoring and management of investment effectiveness. Furthermore, we will utilize EBITDA as a cash-based
earnings indicator in the leading phase of investment.

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The forecast for external sales by segment is shown in this page. I will not go into details, but we plan toincrease sales in all segments.

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Now, here is the explanation of the factors behind the decline in core operating income.
In the increase in sales, products mix changes and others, the impact of the increase in gross profit due to theincrease in sales and the decrease in profit due to changes in the composition of the segment are taken into
account. We estimate that the rebound from the impact of COVID-19 last year will be approximately JPY1
billion, mainly due to the decrease in profit caused by the change in segment composition.
Also included here is an increase in depreciation and amortization due to the start of operations at the new
toothpaste factory scheduled for completion this fiscal year. Together with total cost reductions and otherfactors, the total positive impact on core operating income is expected to be JPY2.5 billion.
On the other hand, the negative impact on core operating income is expected to be JPY8.4 billion due tostrategic competition related expenses, such as increased advertising expenses that could not be
implemented as planned due to the impact of COVID-19 last year, increased investment expenses for the
future, such as research and survey activities, increased in depreciation and amortization and other expenses.
As a reaction to the impact of COVID-19 last year, we estimate that an increase of about JPY1.3 billion incompetition-related expenses will be a negative factor, and other expenses will have a positive impact ofabout JPY800 million.
As a result, core operating income is expected to decrease by JPY5.9 billion. We expect steady sales growth in
the current fiscal year, which will result in an increase of gross profit as before.
On the other hand, profit will decrease due to increasing expenses caused by the rebound from the COVID19 pandemic and due to increasing investment to ensure growth over the next 10 years.

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I would like to explain our approach to the promotion of this year's business.
We recognize that the business of our Group is to provide products that are essential for daily life. Therefore,
we will be committed to both prevention of the new coronavirus infection and business continuity.
In addition, in an environment where COVID-19 is still unresolved, we will accelerate the shift to a new way
of working by proactively introducing systems that contribute to improving job satisfaction, not to mention
the safety of our employees, including factory workers.
This year is positioned as the starting year for the realization of our Vision for 2030, and we intend to steadily
promote the growth strategies set forth in Vision 2030 starting this year to achieve growth in the scale of ourbusiness.

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These are key themes for this year based on the three growth strategies.
I won't go into details, but as I mentioned earlier, this is our starting year, and we will steadily promote thesemeasures.

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I would like to introduce one specific example of our initiatives.
This is Lightee, our first brand of whitening toothpaste to be launched simultaneously in Japan and China, withthe aim of accelerating growth in the Chinese market, one of our oral health initiatives.
By doing so, we hope to firmly capture the ultra-high price range, which has a particularly high growth rate in
the whitening market, the largest volume market in China. For more details, please refer to the release on
February 10.

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Our basic dividend policy is to provide continuous and stable returns to our shareholders. For the current
fiscal year, we plan to pay an annual dividend of JPY24 per share, an increase of JPY1 from the previous fiscal
year, which results in the sixth consecutive year of dividend increases.
This is the end of my explanation.

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Question & Answer

Q: For fiscal 2021, you forecast a year-on-year increase in net sales of about ¥9.6 billion. Given this, why does
the expected impact on core operating income of sales, product mix changes and others amount to just ¥1.5
billion?
A: One major factor is the new depreciation expenses that will kick in from 2021 as a result of the operationof the new toothpaste factory in Sakaide, negatively affecting profit. Furthermore, sales of hand soaps
increased rapidly in 2020, and the resulting change in the sales mix boosted profit, but the share of hand soaps
in the overall sales mix will not be as high this year, and we expect profit in this area to soften somewhat.
Such sales mix changes are expected to adversely impact profit, which we have indicated as a negative ¥1.0
billion impact of COVID-19.

Q: Could you explain the factors behind the increases in competition-related expenses and other expenses,
including the impact of COVID-19?
A: In 2021, including the impact of COVID-19, we forecast a ¥4.4 billion increase in competition-related
expenses and a ¥2.5 billion increase in other expenses. In competition-related expenses, we plan to increase
advertising and promotional expenses as we aim for new growth from 2021. Under other expenses, we intend
to up investment in R&D and spending related to digital transformation, among other factors. Excluding theimpact of COVID-19, we expect to increase investment in each of these by about ¥3.0 billion, which will havea negative effect on profit in 2021.

Q: How much will depreciation expenses increase due to the Sakaide Factory?
A: We cannot disclose the exact figures, but we expect an overall year-on-year increase of about ¥2.0 billion
in depreciation expenses. This difference is mainly due to the depreciation expenses associated with the
Sakaide Factory.

Q: Could you tell us more concretely about how, and in which businesses and fields, you plan to increase
competition-related expenses?
A: There are two main factors. The first is the rebound from COVID-19, which will increase costs by ¥1.3 billion.
This increase represents the portion of advertising expenses related to various promotional events. In 2020,
almost all such events were cancelled due to COVID-19. Circumstances permitting, we plan to reinstate these
events in 2021, entailing the ¥1.3 billion increase. The second factor is our efforts to further drive growth bystepping up investment focused on advertising for our key brands, increasing expenses ¥3.0 billion.

Q: I gather that, having decided your aim and direction in each field of value creation, you are going to befocusing on businesses with high added value. However, in your envisioned financial performance in 2030,
the ratio of core operating income to net sales is only 8%, which seems somewhat at odds with a focus on
added value. Is this because the portion of sales from overseas will increase, or is there some other factor?
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A: First, we can reach net sales of ¥600 billion only if we achieve a top-line CAGR of almost 5% every year forthe next 10 years. This figure currently stands at about 2%, so we will need to boost it significantly. To do so,
we will invest heavily in the four fields of value creation to expand our existing business domains and fields ofvalue creation and thereby achieve business growth.
Furthermore, we will continue to bolster investment over the next 10 years. The year 2030 is still only a
midway point in terms of realizing a profit return from the expansion of growth areas. After that, we will entera stage where we can further improve the profit margin.

Q: As you work toward becoming an advanced daily healthcare company, do you have any ideas about whatneeds changing or trimming with regard to your existing businesses?
A: Yes, in the smart housework field, where we are struggling the most, I think that we need to significantly
change our current approach and shift our angle of competition. In the three other fields as well, we will takeon very ambitious challenges. For example, in oral health, this will mean evolving from a conventional businessapproach centered merely on selling products like toothpaste and toothbrushes to expand outward.

Q: Could you break down your 2021 forecast for net sales in the Consumer Products Business by category?
A: We expect overall growth of about 2%. As in 2021, oral care and living care will be the main growth areas.
Due in part to recoil from the previous year, the growth rate in beauty care will be slightly below the average.
For fabric care and pharmaceutical products, we expect short-term recovery to take a little more time.

Q: What is your forecast for sales of hand soaps in Japan?
A: Last year, the market for hand soaps expanded to about 1.8 times the 2019 level. Throughout 2021, we
expect this market to stay steady at about 1.5 to 1.6 times the 2019 level. As such, we expect hand soap sales
to decline about 10% or more. On the other hand, starting in March, we will be rapidly expanding our lineupof hygiene-related products to promote the formation of hygienic habits in a variety of settings. We aim toleverage these new products to help increase revenue.

Q: What is your outlook of for the Overseas business, particularly in China and Thailand, in 2021?
A: Our business in Thailand is gradually recovering but still not completely back to normal. Sales of laundry
detergents, in particular, are still below the previous year's level. Our outlook for the full year is not very
optimistic, and we expect sales to remain flat year on year. In China, on the other hand, we were able toachieve year-on-year growth of about 50% in 2020. We hope to see the same level of growth this year andwill aggressively reinforce our business there.

Q: One of your competitors has announced a business model shift toward data-linked precision healthcare.
With your digital transformation (DX) strategy in the four fields of value creation, are you aiming in a similar
direction, or for something different?

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A: Going forward, we will inevitably see a shift toward leveraging digital technologies across society, not justat Lion. For our part, particularly in the area of oral healthcare, we aim to accelerate the realization ofbusinesses that utilize oral healthcare records and data.

Q: Could you tell us more about why you expect sales of hand soaps to decrease in 2021?
A: Since around December 2020, the market size itself has already cooled to around 70% to 80% of its size atthe peak of demand in April and May. The market has remained at about this level throughout January andFebruary, so we expect it to stay there for at least the rest of the year. Of course, we hold the top market
share in Japan, and we aim to expand it further to bolster sales as much as we can. At present, however, we
expect expansion to be limited, and the forecast takes this into account.

Q: In 2020, core operating income was approximately ¥36 billion, for a core operating income margin of 10%.
Should we regard this level as unsustainable over the medium and long terms?
A: We are currently at work on the three-year medium-term management plan scheduled to commence next
year. Although we cannot make any concrete promises, we would like to achieve annual net sales growth of
3% to 5%. Furthermore, we believe that the amount of gross profit generated from this may increase, and will
not decrease, from the current level. In 2021, gross profit is being eroded by increased investment in growth
and recoil from the effects of COVID-19. From next year onward, we believe that these effects will graduallyease, and we believe that we can quite reasonably aspire to return to core operating income at the ¥36 billion
level within a few years.

Q: Could you tell us more about why your envisioned core operating income margin in 2030 is 8%?
A: Our envisioned financial performance in 2030 includes net sales of approximately ¥600 billion and core
operating income of approximately ¥50 billion. One more number to pay attention to is the EBITDA margin,
which we have included as an indicator from 2021. We are currently imagining an EBITDA margin in the rangeof 10% to 14% in 2030. Given the need to invest in growth, we are shifting focus to growth on a cash flow
basis, calculated as the sum of depreciation expenses and core operating income, with the year 2030 as amilestone along the road to further growth.

Q: As you work to achieve the vision, in addition to the business of selling products, will you be starting
businesses involved in the accumulation and sale of data?
A: Yes, we plan to make a big leap into business that make greater use of data. Rather than just selling thedata itself, however, we are pursuing businesses in such areas as providing services that leverage data or using
data to add value to product sales.

Q: How much of the ¥600 billion in net sales do you expect to come from services that leverage data andsimilar businesses?

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A: We have not made a concrete projection for that 10 years out. However, if we were to simply continue on
our current organic growth trajectory, we would come up more than ¥100 billion short of ¥600 billion in 2030.
We plan to fill this gap by expanding our overseas operations and creating new businesses.

Q: You said that in 2021, as the first year of Vision2030, you will be making considerable investments. It seems
that competition-related expenses account for more of this investment than R&D expenses. Does this indicatethat the foundations have already been laid for new services leveraging digital technologies and you will thus
be directing expenditure toward sales promotion for such services?
A: Reinforcing our existing brands is a necessary step in adding value to products that leverage data. From
there, once we have in place the means to create higher added value using data, we will promote further
growth and seek to add more value.

Q: How many years do you expect it to take for businesses that leverage data to become significantly
profitable?
A: We are already in the study stages for such data utilization businesses in, for example, oral care. However,there are regulatory hurdles we have to clear before we can launch such businesses, so we cannot yet provide
any concrete timelines.

Q: Could you tell us your estimates of the specific positive and negative impacts of COVID-19 on core operating
income in 2020 and 2021?
A: Please refer to page 11 of the Supplementary Materials to the fiscal 2020 financial results, which shows themain positive and negative factors affecting net sales. The greatest positive factor was a ¥10 billion increasein sales of such products as hand soaps and dishwashing detergents due to rising hygiene awareness. The
main negative factors were decline in sales of toothbrushes in oral care, the impact of decreased demand
from overseas visitors on sales of pharmaceuticals, as well as a decline in sales of chemicals in the Industrial
Products business. Overseas, sales in Southeast Asia declined. Positive sales impacts amounted to about ¥13
billion and negative sales impacts to ¥7 billion, for a net increase in sales attributable to COVID-19 of ¥6 billion.
These effects on net sales are reflected in gross profit along with other factors attributable to COVID-19, suchas a decrease in competition-related expenses, as shown on page 7. In total, we estimate that there was apositive impact of about ¥5 billion on core operating income.

Q: What aspects of your current businesses will form the basis for your efforts in well-being, one of the fields
of value creation designated under Vision2030?
A: Well-being will grow from our businesses in OTC drugs and supplements. Currently, our businesses arefocused on selling products. Our customers take BUFFERIN when they have a headache and use Smile when
their eyes are tired. In such businesses, however, our only contact with customers is when they need one ofthese products. We would like to evolve our businesses to be able to provide a variety of services tailored toindividual lifestyles and maintain long-term customer relationships through data. Of course, Lion cannot
provide all such services working alone, nor can Lion alone gather all the data needed, so collaboration witha wide range of other companies will be crucial.
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Q: You said that to reach net sales of ¥600 billion in 2030, in addition to growth in existing businesses, around¥100 billion in sales from overseas business and new businesses will be necessary. Could you give us anapproximate breakdown of that ¥100 billion?
A: We are not able to disclose that information at this time.
[END]______________
Document Notes
1.
2.
3.

Portions of the document where the audio is unclear are marked with [Inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
This document has been translated by SCRIPTS Asia.

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