Financial Results of Q2 / December 2022
(66th Fiscal Year)（Securities Code：7956）

Norimasa Kitazawa
President and CEO
August 9, 2022

Q2 / December 2022 (FY 66th)
Highlights for Q2 / Dec. 2022
Results for Q2 / Dec. 2022
Full-Year Forecast for Dec. 2022

AgendaP. ２ - ６

P. ７ - 14

P. 15 - 18

Highlights for Q2 / Dec. 2022

Covid-19 in China Shanghai Lockdown• Our business activities were severely affected by the Shanghai lockdown, which began on April 1 and lasted for twomonths.
• Since the end of April, the Shanghai factory (which manufactures nursing bottles and skincare products) has taken
various measures, and approximately 200 employees had been staying at the factory and support production andshipping operations during the lockdown period.
• The Shanghai lockdown was lifted on June 1, and almost all employees back to work at the Shanghai factory later
June 2, with operations returning to normal in the second week of June.
• Our manufacturing and shipping functions were restored to normal immediately after the lockdown was lifted.
Logistics disruptions continued around Shanghai area until the end of June, but we did everything possible toprepare for the 618 shopping festival.

Shanghai Lockdown (April 1 to May 31)

Logistics
Sales Office(Shanghai)
Factory(Shanghai)
Factory(Changzhou)

May

June

・Distribution to/from Shanghai continues to be restricted.
・Shanghai warehouses of our distributors and e-commerce retailers areclosed. Offline stores are temporarily closed.
・Shortages at our distributors' and e-commerce retailers' local warehouses.

Even after the lockdown was lifted, the effects of logistics
disruptions, such as delivery delays and soaring logistics costs
around Shanghai area continued until the end of June.

Gradually resumed production, shipping and other activities
despite restrictions.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

The factory operated normally.

J
U
N
E
１

・Almost all employees at the Shanghai factory were back to work
since the lockdown was lifted on June 1
・Production, shipments and other business activities haverecovered to normal.

The factory operated normally.

See the Appendix for the Covid-19 situation in China before May

3

China 618 Shopping Festival

The 618 shopping festival was held in a different
environment from previous years due to the “ZeroCovid” policy, which caused disruptions in
distribution networks and concerns about declining
consumer confidence.



Total GMV of our products during the 618
shopping festival period grew 11% YoY.



Nursing bottles and skincare products ranked as
No. 1 by category in JD.com as well as No. 1 brand in
mom and baby products.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

4Natural BotanicalMarket Expansion



The concept (naturally derived, environmentallyfriendly products) and image are well received byretailers and customers.

Strong sales in the Middle East, Indonesia, etc.
Launched in India since April, and are now inmore than 15 countries.

Strengthen marketing both offline and digitally toincrease repeat purchases by customers.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

5ESG and Sustainability
Received the Excellence Award from the Ministry of Agriculture, Forestry
and Fisheries (MAFF)
 Selected in the FTSE Blossom Japan Sector Relative Index

We aim to achieve sustainable growth as a company by reducing environmental
impact and solving social issues surrounding babies and mothers in all countries
and regions where we conduct business activities.
©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

6Results for Q2 / Dec. 2022

2022 Q2 Results - Consolidated P&L
Consolidated sales and profits declined due to the significant impact of the Shanghai lockdown in China, a driver ofsales and profits.

(Unit: Million JPY)

Q2 / Dec. 2021
ActualQ2 / Dec. 2022

% of Total

Actual% of Total

YoY Change

Net Sales

47,277100.0%

45,292100.0%

95.8%

Cost of Sales

24,71952.3%

24,543

54.2%

99.3%

Gross Profit

22,55847.7%

20,749

45.8%

92.0%

SG&A Expenses

14,96931.7%

15,631

34.5%

104.4%

Operating Income

7,589

16.1%

5,118

11.3%

67.4%

Ordinary Income

8,536

18.1%

6,404

14.1%

75.0%

5,085

10.8%

3,990

8.8%

78.5%

Net Income
Attributable to Ownersof Parent©Pigeon Corporation All Rights Reserved. │ Strictly Confidential【Currency Rates】

2022 Results: US$1 = JPY 123.15 / CNY 1 = JPY 18.97
2021 Results: US$1 = JPY 107.76 / CNY 1 = JPY 16.65

8

2022 Q2 Results - By Business Segment
Sales in Singapore and Lansinoh business grew by double digits y-o-y. Sales and profits in China and Japan both fell
below the previous year's levels.

(Unit: Million JPY)

Q2 / Dec. 2021

Q2 / Dec. 2022

Sales

% of Total

Gross
MarginSegment
ProfitSales% of Total

YoY
ChangeGross
MarginSegment
ProfitConsolidated Net
Sales

47,277100.0%

47.7%

7,589

45,292100.0%

95.8%

45.8%

5,118

Japan Business

19,888

42.1%

34.4%

1,172

17,904

39.5%

90.0%

32.6%

592

China Business

19,440

41.1%

52.0%

6,766

16,238

35.9%

83.5%

49.3%

4,609

Singapore Business

6,024

12.7%

36.9%

807

6,924

15.3%

114.9%

40.6%

1,210

Lansinoh Business

6,231

13.2%

55.1%

522

7,814

17.2%

125.4%

51.5%

252

Elimination of intersegment transactions(4,306)(9.1%)－－(3,588)(7.9%)－－－©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

92022 Q2 - Analysis of Change in Operating Income (YoY)• Consolidated operating income was also significantly affected by lower sales in China due to the Shanghai
lockdown and a higher cost of sales ratio due to a significant decline in factory utilization.
• SG&A expenses increased mainly due to labor costs (China and Lansinoh business. Includes impacts of FX rates)
and logistics costs (soaring due to international logistics disruptions).

75.8

(9.4)

(Unit: 100 Million JPY)

(8.6)

(3.1)

■ Increase

Operating
Income forQ2 2021

Decreased
Gross Profit bylower revenue©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Impact of
Cost Ratio
Increase

Personnel
Expenses

(2.0)

(1.1)

(0.3)

51.1

Depreciation

Other
Expenses

Operating
Income forQ2 2022■ Decrease

Distribution
前年andLogistics
営業利益10

2022 Q2 Consolidated Balance Sheet (Highlight)(Unit: Million JPY)

End of FY Dec. 21
ActualQ2 / Dec. 2022
ActualYoY Change(Amount)

YoY Change(%)

YoY Change (Amount)
w/o impacts of FX rates

Cash and Deposits

35,21835,557+339

101.0%(1,755)

Notes and Accounts
Receivable - Trade

16,253

17,916+1,663110.2%+133

Inventories

12,706

14,558+1,851114.6%

+473

4,087

5,783

+1,696141.5%+1,317

1,623

1,729

+105

106.5%+105

Net Assets

76,81081,875+5,064106.6%+2,333

Total Assets

98,042104,274+6,231106.4%(1,039)Equity Ratio

75.4%

75.3%

Notes and Accounts
Payable - Trade
Electronically Recorded
Obligations - Operating
Borrowings©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

ー

ー

ー

ー

ー

ー

ー

ー

11

Summary of Results by Business Segment (Q2 YTD)
Japan
BusinessBaby care ended below y-o-y. Nursing bottles are still strong, but consumables continued to struggle.
• Baby care sales declined 4.4% y-o-y. Main channels in Japan domestic were flat YoY, but overseas demand (e.g.,
Cross-border EC) was impacted by the decline.
• Sales of Nursing bottles increased 26% y-o-y due to the continued contribution of new models. In skincare, sales of
Momo-no-ha (Peach Leaves) continued to be weak since Q1.
• Sales of consumables such as wet tissues and nursing pads continued to struggle due to growing consumer
demand for low-priced products.
• Gross margin for baby care deteriorated by -4.5pt. This was due to an increase in procurement costs resulting fromyen depreciation and raw material price hikes.
• Sales of Health & Elder Care Business declined by 0.5 billion yen due to product portfolio review, but profit margin is
improving.

Mainland sales down 30% y-o-y despite heavy impact of Shanghai lockdown

China
Business• Mainland sales -30% y-o-y, impacted by the 2-month Shanghai lockdown, with mainstay nursing bottles andskincare sales down 20-30% y-o-y.
• Sellout was -10% y-o-y. -7% for online, -17% for offline y-o-y. Logistics disruption due to the Shanghai lockdown
caused serious shortages of merchandise . On the other hand, our key online channels such as Tiktok grewsignificantly. Online ratio in Q2 was 68%.
• Market share of nursing bottles declined slightly due to supply shortages caused by the lockdown, but still No.1
share.
• Gross margin deteriorated by 2.6pt. This was due to lower capacity utilization at the Shanghai factory(manufacturing nursing bottles and skincare products) due to the Shanghai lockdown.
• Out total GMV during the 618 shopping festival grew by 11% y-o-y. No. 1 in mom and baby products in JD.com.
• New products; Nursing bottles with Disney designs and new herbal skincare series.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential*Sales: Sell-in at local currency

12

Summary of Results by Business Segment (Q2 YTD)
Sales in major countries remained strong. Continued external sales growth driven by our coreproducts such as nursing bottles and skincare products

Singapore
Business• Domestic sales in India increased 54%, Malaysia +28%, and Indonesia +29% y-o-y.
• In export markets, sales in the Middle East and Vietnam grew y-o-y.
• Sales of core products (nursing bottles, breast pumps, skincare, and oral care) were strong with double-digit
growth y-o-y.
• Shipment of new skincare series (Natural Botanical) grew higher than planned. Expanding sales to Singapore,
Malaysia, Indonesia, India, Vietnam, Middle East and export markets.
• Gross profit increased by 26% y-o-y due to increased sales at sales companies, improved product mix at factories,
and foreign exchange effects. Gross margin also improved by 3.8pt.

Strong sales, but profits down due to logistics disruptions and continued high transportation
costs caused by global supply chain chaos•

LansinohBusiness•••

Lansinoh Group sales increased 10% y-o-y. Sales in North America increased 14% y-o-y. Continued strong sales
both online and offline.
In Europe, sales in Benelux were strong, while demand increased in UK and Germany, but some products wereout of stock, resulting in a slight decrease y-o-y.
Mainstay products such as nipple creams and breast pumps maintained strong sales. Prenatal and postpartum
care products are as good as expected. They are now sold in 25 countries includes export markets.
Gross margin declined 3.5 pt due to the higher-than-expected procurement and logistics costs (COGS factor) due
to logistics disruptions pushed down profit. In addition, higher sales distribution costs in the U.S. (SG&A
expenses) also had a negative impact on the operating profit margin. Progress was in line with the plan excluding
the impact of soaring logistics costs.

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential*Sales: Sell-in at local currency

13

FY Dec. 22

New Products

Singapore Business

Launched the world's first baby bottle made of a new plastic material, T-Ester. The glass-like
transparency of T-Ester, not found in conventional plastic, makes caregivers easier to visually checkwhen preparing breastmilk and washing it and improves usability (May).
Launched a new model of Softouch nursing bottles in Southeast Asian countries (August).
Japan Business

Launched “Sonaetta” line, Pigeon's first series of emergency supplies for babies (August)Launched “Precious Drop”, a colostrum collection device for hospitals, based on the idea of an
employee who used to be a midwife (August).

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

14

Full-Year Forecast for Dec. 2022

FY Dec. 2022 Revision to Full-year Consolidated Earnings Forecast• Our full-year consolidated forecasts were revised based on Q2 YTD results.
• Factors for lower sales and income: Shanghai lockdown, slower-than-expected recovery of the Japan business, risk ofhigher transportation costs and raw material prices due to international logistics disruptions, etc.
(Unit: Million JPY)FY Dec. 2022 Business Plan
（Previous Forecast）
Initial Plan

% of Total

Revised
Forecast

FY Dec. 2022 Business Plan
（Revised Forecast）% of Total

Change(Amount)

Change (%)

Net Sales

98,700100.0%

95,000100.0%( 3,700)( 3.7%)

Cost of Sales

50,60051.3%

50,700

53.4%

+ 100

0.2%

Gross Profit

48,10048.7%

44,30046.6%( 3,800)( 7.9%)

SG&A Expenses

33,90034.3%

32,30034.0%( 1,600)( 4.7%)

Operating
Income14,20014.4%

12,00012.6%( 2,200)( 15.5%)

Ordinary Income

14,30014.5%

13,00013.7%( 1,300)( 9.1%)Net Income Attributableto Owners of Parent

9,500

9.6%

8,550

9.0%

( 950)( 10.0%)©Pigeon Corporation All Rights Reserved. │ Strictly Confidential【Assumed Currency Rates】2H of FY Dec. 22: US$1 = JPY 132.00 / CNY 1 = JPY 19.50

16[Ref] ： FY Dec. 2022 Consolidated Earnings Forecast (Second half alone)• The company aims to increase sales and profits in the second half of the year compared to the previous year.
• Actions in 2nd half：
China - Restructuring from lost sales opportunities due to supply shortages in the first half
Japan - Strengthening marketing of nursing bottles and skincare products(Unit: Million JPY)

2nd Half (2H alone)
FY Dec. 2021
Actual

2nd Half (2H alone)
FY Dec. 2022 Revised Forecast% of Total

Forecast% of Total

YoY Change

Net Sales

45,803100.0%

49,708100.0%

108.5%

Cost of Sales

24,28953.0%

26,15752.6%

107.7%

Gross Profit

21,51447.0%

23,55147.4%

109.5%

SG&A Expenses

15,76634.4%

16,66933.5%

105.7%

5,747

12.5%

6,882

13.8%

119.7%

Ordinary Income

6,112

13.3%

6,596

13.3%

107.9%Net Income Attributableto Owners of Parent

3,700

8.1%

4,560

9.2%

123.2%

Operating
Income©Pigeon Corporation All Rights Reserved. │ Strictly Confidential【Assumed Currency Rates】2H of FY Dec. 22: US$1 = JPY 132.00 / CNY 1 = JPY 19.50

17

Shareholder Return and Investment Related Indicators[Shareholder return indicators under 7th Medium-Term Business Plan]
Aiming for the consolidated total shareholder return ratio of approx. 55% with a year-on-year increase in dividends for each fiscal year.

Dividends
Dividend per Share (Yen)Dividend Payout Ratio

Dec. 2020

Dec. 2021

Dec. 2022

Interim(Actual)Year-end(Actual)Interim(Actual)Year-end(Actual)Interim(Scheduled)Year-end(Forecast)

36

36

37

37

38

38

81.0%

100.9%

106.5%(Revised Forecast / Year-end)(Unit: Million JPY)

<Ref.>

Investment-related Indicators(Consolidated)

Dec. 2020
Interim(Actual)Year-end(Actual)Dec. 2021
Interim(Actual)Dec. 2022

Year-end(Actual)Interim(Actual)Full-year(Estimate)

Capex(*1)

1,690

4,185

2,013

6,735

2,814

6,600

Depreciation(*2)

1,967

3,972

1,986

4,161

2,381

4,300

R&D Expenses(*3)

1,430

3,115

1,709

3,603

1,802

3,700

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential*1: Property, plant and equipment and intangible assets (including long-term prepaid expense)*2 : Depreciation (including amortization of goodwill)*3 : Total expenses of R&D activities, including personnel costs

18

Disclaimer on Forward-Looking Statements
This material includes certain forward-looking statements about the Pigeon Group.
To the extent that statements in this material do not related to historical or current
facts, they constitute forward-looking statements.
These forward-looking statements are based on the current assumptions andjudgments of the Pigeon Group in light of the information currently available to it,
and involve know and unknown risks, uncertainties and other factors, which may
affect the statements made in this material.

P
Head Office
4-4, Nihonbashi-Hisamatsucho, Chuo-ku, Tokyo
103-8480, Japan©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

URL: http://www.pigeon.co.jp
http://www.pigeon.com

19Appendix

2022 Q2 Financial Highlights (Consolidated)
Unit: Million JPY

Q2 / Dec. 2021
ActualQ2 / Dec. 2022

% of Total

Actual% of Total

YoY Change

Net Sales

47,277100.0%

45,292100.0%

95.8%

Operating Income

7,589

16.1%

5,118

11.3%

67.4%

Ordinary Income

8,536

18.1%

6,404

14.1%

75.0%

Net Income Attributable to
Owners of Parent

5,085

10.8%

3,990

8.8%

78.5%

Net Assets

75,769―81,875―108.1%

Total Assets

97,152―104,274―

107.3%EPS (yen)

42.51

―

33.35

―

78.5%

BPS (yen)633.33―684.25―108.0%

ROE *

14.2%

―

10.5%

―

―

ROIC *

14.3%

―

9.0%

―

―

* ROE: Return on Equity (shareholders’ equity + accumulated other comprehensive income), calculated with equity being the average of the beginning and ending balances* ROIC: Return on Invested Capital (NOPAT/Invested capital, calculated with a tax rate of 30.0% and invested capital being the average of the beginning and ending balances©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

22Breakdown of Japan Business Segment (2022 Q2 YTD)

(Unit: Million JPY)

Q2 / Dec. 2021

Q2 / Dec. 2022

% of Total

Gross
MarginSegment
ProfitSales% of Total

YoY
ChangeGross
MarginSegment
ProfitJapan Business 19,888

42.1%

34.4%

1,172

17,904

39.5%

90.0%

32.6%

592

Baby Care(*)

13,042

―

41.2%

1,224

12,471

―

95.6%

36.7%

717

Child Care Services

1,786

―

16.2%

87

1,738

―

97.3%

16.3%

107

Health & Elder
Care Business

3,075

―

29.5%

294

2,486

―

80.8%

31.7%

255

Sales

[Note]*: Effective FY Dec. 2022, “Domestic Baby & Mother Care” Business was renamed to “Baby Care” Business.
The breakdown of Japan business segment was estimated by Pigeon for your reference.
©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

23Pigeon Sales by Regions* (2022 Q2 YTD / YoY)

KOR
CHN

-30%
VNM

IND

+54%

MYS

JPN

+18%

+28%

SGP
©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

+62%

0%

-4%

(Baby Care)

IDN

+29%
* Sell-In (Local Currency)

24

Lansinoh Sales by Regions* (2022 Q2 YTD / YoY)

GBR
CAN

USA

+18%

+14%

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

DEU

BENELUX-5%-5% TUR

+38%

CHN

+78%

+18％

* Sell-In (Local Currency)

25

Sales by Regions (2022 Q2 YTD)
Overseas Sales Ratio: 62.7%（Q2 / Dec. 2021: 61.6%）
China (Incl. Hong Kong)

Other Asia

North America

EuropeMiddle East
1,691
(6.0%)

Q2 / Dec. 2022

14,605(Composition: 51.4%)
70.7% on a local currency basis

5,011(17.6%)

28,393115.6% on a local currency basis

18,133631 (2.3%)

5,345(18.8%)
1,110(3.9%)
1,705

Q2 / Dec. 2021

Others3,872

379

29,123

4,044
990(Million JPY) 0

5,000©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

10,00015,000【Currency Rates】

20,00025,00030,0002022 Results: US$1 = JPY 123.15 / CNY 1 = JPY 18.97
2021 Results: US$1 = JPY 107.76 / CNY 1 = JPY 16.65 26

[Ref.] Comparison of Cash Flows (Consolidated)
Unit: Million JPY
Purchase of tangible and intangible fixed assets: ¥(2,757)[Q2 Dec. 2021: ¥(1,929)]

37,163

3,149(1,764)(4,343)

5,706
1,144

35,348(2,790)(4,614)35,218

Income before income taxes: ¥6,385

37,163Operating
Activities

3,149

Q2 / Dec. 2021

Investing
Activities(1,764)©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Financing
Activities(4,343)

Translation
Adjustment

1,144

Balance at
End35,348

Balance at
Beginning

35,218Operating
Activities

5,706

35,557

Dividends paid: ¥(4,425)[Q2 Dec. 2021: ¥(4,310)][Q2 Dec. 2021: ¥7,721]

Balance at
Beginning

2,038

Q2 / Dec. 2022

Investing
Activities(2,790)Financing
Activities(4,614)

Translation
Adjustment

2,038

Balance at
End

35,55727

PVA Tree: Consolidated Results in Q2 / Dec. 2022 (FY66)
Consolidated

Top: Q2 / Dec. 2022 Results
Bottom: Q2 / Dec. 2021 Results(Unit : Million JPY)NOPAT

Q2 Results 3,582
LY Q2

5,312

Net sales

Operating profit

Q2 Results 5,118
LY Q2

Q2 Results 45,292

7,589

LY Q2

Tax

Cost of sales

Q2 Results 1,535
LY Q2

Q2 Results
LY Q2

PVA

1,598
3,457

Capital invested

Q2 Results 79,343
LY Q2

74,198(Reference)

Capital invested Q2Q2 Results 39,671
LY Q2

37,099WACC©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

common 5.0%

Q2 Results 24,105
LY Q2

21,461

Fixed asset

Q2 Results 32,832
LY Q2

28,486

Cash and otherasset and liability

Q2 Results 22,404
LY Q2

Q2 Results 24,543

2,277

Working capital

22,08647,277LY Q2

Trade receivables

Q2 Results 17,084
LY Q2

15,900Inventory asset

Q2 Results 13,632
LY Q2

12,341

Trade payables

Q2 Results 6,612
LY Q2

6,780

24,719

SG&A expenses

Q2 Results 15,631
LY Q2

14,969

（参考）

研究開発費

見込 0
前期 0

発送費

見込 0
前期 0

*B/S Factors for PVA calculation are averaged between beginning and year-end figures.

28

PVA Tree: Consolidated Results in Q2 / Dec. 2022 (FY66)
Consolidated

Top: Q2 / Dec. 2022 Results
Bottom: Q2 / Dec. 2021 Results

PVA
SpreadQ2 Results
LY Q2

ROIC

Q2 Results
LY Q2

9.0%
14.3%

ROIC before tax

Q2 Results
LY Q2

12.9%
20.5%

Operating profit ratio

Q2 Results
LY Q2

11.3%
16.1%

Cost of sales ratio

Q2 Results
LY Q2

54.2%
52.3%

SG&A expenses ratio

Q2 Results
LY Q2

34.5%
31.7%

Working capital ratio

4.0%
9.3%

WACC

common 5.0%

Tax ratecommon 30.0%

Capital invested t/o

Q2 Results
LY Q2

1.1
1.3

Q2 Results
LY Q2

26.6%
22.7%

Fixed asset ratio

Q2 Results
LY Q2

36.2%
30.1%

Cash and otherasset and liability ratio©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Q2 Results
LY Q2

24.7%
23.4%

29

PVA Tree: Consolidated Results in Q2 / Dec. 2022 (FY66)
Consolidated

Top: Q2 / Dec. 2022 Results
Bottom: Q2 / Dec. 2021 Results(Unit : Million JPY)

Working capital

Q2 Results 24,105
LY Q2 21,461(Unit : Days)

Trade receivables

Q2 Results 17,084
LY Q2 15,900

Inventory asset

Q2 Results 13,632
LY Q2 12,341

Trade payables

Q2 Results 6,612
LY Q2 6,780©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

Q2 Results
LY Q2

CCC

Receivable turnover period

121.0
102.4

Q2 Results
LY Q2

68.8
61.4

Inventory turnover period

Q2 Results
LY Q2

101.4
91.1

Payables turnover period

Q2 Results
LY Q2

49.2
50.1

*B/S Factors for PVA calculation are averaged between beginning and year-end figures.

30

E-Commerce Ratio in Key Countries (2022 Q2 YTD)
EC sales ratio of Pigeon / Lansinoh products
87%

Korea*
68%

China - Pigeon*
49%

UK
36%

US
29%

India*
21%

Singapore*Japan©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

8%*: Sell-out

Others: Sell-in
31

[Ref.] Covid-19 in China / Impact on Q1 Results (As of May 12, Q1 Financial Results)• Sales were almost in line with our budget until February YTD.
• Due to a local lockdown that began in mid-March, 10-15% of our March sales forecast could not be shippedin Q1. Also, delays and cancellations of shipments from our distributors and retailers (EC and offline) also
affected Sell-out.

Local Lockdown (Mid-March to today)
Lockdown areas• North China area, Northeast area, etc.
• Shaanxi, Fujian, Yunnan, Tianjin and other areas experienced 14 - 60 days of local lockdown

Impact on logistics, retailers,and consumers• Key warehouses of our distributors were closed for several days, causing intermittent shipping delays.
• Many department stores and chain baby stores in the lockdown area temporarily closed.
• EC retailers were unable to fill the stocks to local warehouses, causing delivery delays.
• Delays in e-commerce deliveries have resulted in an increase in customer returns and order cancellations.

Impacts on our group companies in China
Sales Office (Shanghai)

Two important warehouses of our distributors were closed for several days, intermittently halting
our shipments.

Factory (Shanghai)• Operated normally until End of March.
• Build up inventory prepared for Shanghai lockdown

Factory (Changzhou,
Jiangsu Province

Six-day outage due to lockdown in Changzhou city

©Pigeon Corporation All Rights Reserved. │ Strictly Confidential32[Ref.] Update of Shanghai Lockdown (As of May 12, Q1 Financial Results)• Since April, the Shanghai lockdown has had a greater impact on both sales office and factories than in Q1.
• Shipments and production have partially resumed since the end of April; our China group was operating at only
about 20-30% of normal levels as the end of April.
• Shanghai lockdown is still in effect as of May, and the impact on earnings is currently being estimated.

Shanghai Lockdown (Since end of March）
CalendarApril 1 to 10

April 11 to 17

April 18 to 24

April 25 to May 1

Local lockdown

Local lockdowns are ongoing

Logistics in Shanghai

Distribution from Shanghai to other provinces suspended. Shanghai warehouses of our distributors and EC retailers are closed. Offline stores temporarily closed.

Logistics in other areas

Distribution to Shanghai city suspended. Local warehouses of our distributors and EC retailers are experiencing shortages of merchandise.
Some offline stores outside of the blocked areas are open.

Sales Office (Shanghai)

Shipment
Business activities

shipping the merchandise almost suspended

Resumed shipment of some products todistributors via Changzhou factory etc.

All employees shifted to remote work. very limited work in R&D and other activities. Some scheduled marketing activities and events were also postponed

Factory (Shanghai)
Production

Factory operation suspended

Shipment

Resumed operation（Approx. 20% of operation）

Factory (Changzhou）

Production

The factory operated normally. Shipments from Changzhou plant available, but very limited due to lockdown of shipping destination.

Shipment©Pigeon Corporation
All Rights Reserved. │ Strictly Confidential

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Key Theme : 7th Medium-Term Business Plan
Expand the Key Success Factors (KSF) of Chinese market globallyand achieve healthy business growth and profitability in all regions.

Brand strategy:

Develop a brand “chosen by consumers who buy into a business”
rather than a brand “chosen by customers who buy a product.”

Product strategy:

Accelerate growth in our Core products
which we can have a unique competitive advantages in global market.

Regional strategy:

Develop and implement agilely a cycle of “Product development, production and sales” that fitsmarket characteristics and consumer preference of each region.
©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

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Purpose

Our reason for being and the role we should play in society

We want to make the world morebaby-friendly byfurthering our commitment
to understanding and addressing babies’
unique needs©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

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The Pigeon Group seeks to maximize economic and social value through communications with all
stakeholders, including shareholders and other investors.
For information on Pigeon’s latest management strategies, business and ESG activities, please visit
our corporate website.

・Integrated Reporthttps://www.pigeon.com/ir/library/factbook/

・Sustainability

https://www.pigeon.com/sustainability/

・ESG Data Book

https://www.pigeon.com/sustainability/databook/©Pigeon Corporation All Rights Reserved. │ Strictly Confidential

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